# Popular Science Monthly/Volume 86/April 1915/Economic Importance of American Neutrality

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* ECONOMIC IMPORTANCE OF AMERICAN NEUTRALITY
By Professor GORDON E. SHERMAN
YALE UNIVERSITY
NEUTRALITY, regarded as a conception of international law, "consists in abstinence from any participation in a public, private or civil war, and in impartiality of conduct toward both parties" ​Its basic principle is plainly that of a limitation of war to the belligerent powers directly concerned. But neutrality in its practical applications is more than this. A distinct relation arises at once between the contending governments and those bearing no immediate share in the conflict, and situations are ipso facto created pregnant with the gravest complexities and responsibilities. It is, indeed, in this day of a highly expanded world commerce, impossible that the disasters of war should be wholly confined to the actual belligerents. The neutral will inevitably experience some phases of the general loss and damage, since each belligerent must, by universal consent, be allowed to so far restrain commercial intercourse with the opposing belligerent as to insure the cutting off of all intentional or incidental neutral aid. Neutrality, to be genuine, can know no degrees whatsoever, no divisions, no limits; it must be absolute and unconditional; should it be permitted to develop, under a specious pretext of safeguarding its own economic interests, any quality of relativity, it at once incurs the peril of becoming essentially less aloof from the interests of one side than of the other, and undeniably open to the charge of partiality. A neutral power may not even be permitted to vary its required attitude on the plea that proposed deviations may benefit the belligerents equally; since an identical concession or absence of restriction must operate with varying effect on those whose local environment is dissimilar. Such an imperfect neutrality becomes in substance a participation in a belligerent struggle. We need not, of course, stop to point out the distinctions arising from a partial territorial neutrality such as exists in the Savoy districts of Eastern France and where, should war occur between France and Italy, the districts in question may be occupied by Swiss troops to preserve the neutralization accorded this region at the Congress of Vienna. The very fact of neutralization, indeed, would appear to properly imply a prerogative of defense by force of arms if need be. Upon two celebrated occasions (in 1780 and in 1800) the states of northern Europe agreed to maintain, with their allies, certain dogmas of maritime neutral regulation by force of their combined fleets and troops, nor were these "armed neutralities" thought to derogate from true neutral character. Exceptions, too, are seen in the beneficent activities of the Red Cross and ambulance service, and in such cases as may justify a neutral in granting pilotage assistance to a disabled belligerent or in permitting him to take supplies of fuel limited by the requirements of distance to his nearest national or colonial port. But in such a crisis as confronts the world to-day, the chief stress of international perplexities arises from the threatened interests of commerce,—the detention by a belligerent of goods claimed as contraband, whether destined to an opposing belligerent or to neutral territory whence transshipment to belligerent territory is considered more than probable; or, again, the ​question of permitting by a neutral the domestic manufacture and sale or export to belligerents of war munitions. For the moment we may lay out of view problems arising from the exigencies of blockade, since this weapon has not as yet formed a feature of present-day hostilities. In time of war the trade of neutrals with belligerents in articles not deemed contraband is absolutely free unless interrupted by blockade which seeks to forbid all traffic irrespective of the character of the goods.
The term contraband, however, marks a sharply differing conception. It is applied to certain classes of merchandise intended on the part of a neutral for belligerent use, but whose seizures by an opposing belligerent is permitted on principles of international law; the merchandise is under the han—contra bannum—and its carriage becomes thus tinged with an illicit quality susceptible of enforcement, not by the neutral's government but rather by that of the belligerent. It is the goods themselves, indeed, and not the shippers which are the objects of this ban. The government, with us, of the shipping neutral is not properly concerned save where the transaction is brought within our neutrality statutes by assuming the form of an organized warlike undertaking, such as the fitting of a predatory vessel or one intended to afford assistance to belligerents or insurgents, as set out in the Act of Congress of 1794
recommended by President Washington in his annual address on Dec. 3, 1793; it was drawn by Hamilton; and passed the senate by the casting vote of Vice President Adams. Its enactment grew out of the proceedings of the then French Minister which called forth President Washington's proclamation of neutrality in the spring of 1793.
But with the strictly individual manufacture and sale to a belligerent of war munitions the case is wholly dissimilar; Jefferson wrote, May 15, 1793, to the French and British ministers at Philadelphia:
Our citizens have always been free to make, vend and export arms; it is the constant occupation and livelihood of some of them. To suppress their callings, the only means, perhaps, of their subsistence, because a war exists in foreign and distant countries in which we have no concern, would scarcely be expected. It would be hard in principle and impossible in practise. The law of nations, therefore, respecting the rights of those at peace has not required from them such an internal derangement in their occupations. It is satisfied with the external penalty pronounced in the President's proclamation, that of confiscation of such portion of these arms as shall fall into the hands of any of the belligerent powers on their way to the ports of their enemies. To this penalty our citizens are warned that they will be abandoned; and that the purchases of arms here may work no inequality between the parties at war, the liberty to make them will be enjoyed equally by both.
These expressions of the construction placed upon neutral rights are quite as valid for the exigencies of to-day as for those of 1793. Our ​government then wisely determined to enforce no restrictions proceeding from itself against domestic commerce, but it did recognize, and very clearly, that with the belligerent the case was radically different and that it had in international law a well-defined right to seize such goods as could properly be classed under the denomination of contraband. But the undeniable privilege of a belligerent to seize contraband becomes complicated with neutral commercial rights when the goods in question are primarily destined for a neutral port. The problems thus arising are concerned with the true and not merely the apparent destination of the goods; the better view and one which seeks to regard the whole carriage of the goods as a single shipment irrespective of whether a brief stoppage is to take place in neutral territory before forwarding to the belligerent, is known as "continuous voyage." This doctrine was developed by the British Admiralty courts from the so called "rule of 1756" by which was meant that Great Britain would not consider valid a shipment of merchandise carried between colonial ports and the mother country by neutrals who were excluded from such a trade in time of peace. This theory of continuous voyage was enforced by our own Supreme Court in the celebrated case of the Peterhoff and in other cases arising through our civil war, where European trade with the confederacy was attempted through West Indian or Mexican ports. The Declaration of London (1909) sanctions continuous voyage as applied to absolute contraband, that is goods which are preeminently those of war; with merchandise equally suitable for war or peace uses, i. e., for conditional contraband, however, the Declaration requires that an immediately hostile destination shall be shown to justify seizure. But the extraordinary development in military and naval war-making instruments, vehicles and methods, of the last few years which has brought the realm of the air into use as a theater of actual campaign, must inevitably lead to the widening of classes of contraband; a similar remark might be made touching the development of submarine apparatus. In cases where material unquestionably destined for use in the manufacture of aerial or submarine apparatus or in their maintenance is consigned in war time to a neutral country which can have no such use for these objects, but which lies adjoining belligerent territory where they are indispensable, it seems impossible to suppose that such material can be excluded from the class of absolute contraband and thus become open to belligerent seizure.
With questions arising from the possibility of such belligerent capture as between two or more governments actually at war, a neutral nation can have, of course, no concern. The equal or unequal course of belligerent fortunes should not be allowed to become in anywise a neutral's affair. For the neutral, the rules deemed sound by the ​acknowledged law of nations and the principles of that law in their legitimate development and expansion must prove controlling, whether they contemplate a temporary abridgment of neutral commerce or whether they justify its prosecution in channels sanctioned by the highest authority. The effect of such rules as between those engaged in war, however, should properly be left to the decision of their forces or opportunities such as they may be. For both neutral and belligerent, nevertheless, international law as crystallized in our own country and in Great Britain by executive action, by the carefully considered decisions of the highest courts, and by legislation in harmony with acknowledged principles of international law, point out the only safe pathways and those in which both governments and individuals should find their truest advantage.
* ↑ Fuller, C. J., in the case of The Three Friends, 166 U. S. 1, 52, March 1. 1897
* ↑ The Peterhoff, 5 Wallace, 28, 56.
* ↑ 166 U. S., 52.
* ↑ Ford's "Writings of Thomas Jefferson," Vol. VI., pp. 252-257.
* ↑ Case of The William, 5 Christopher Robinson, 385, where a vessel was not allowed to claim stoppage in a neutral port to justify colonial trade.
* ↑ 5 Wallace, 28.