Johann Bernstorff - My Three Years in America

In the meantime, Colonel House returned from Europe without having met with any success, but he had opened useful personal relations. The Governments of all the combatant Powers then held the opinion that the time had not yet come when they could welcome the mediation of President Wilson. Colonel House, however, did not allow the lack of success of his first mission to deter him from further efforts, and remained to the last the keenest supporter of American mediation. Since this journey Colonel House and I became on very friendly and intimate terms, which should have helped to bring about such a peace.

In the preceding chapter I mentioned that Dr. Dernburg's plan for raising a loan in the United States had failed. Later the direction of all our economic and financial affairs passed into the hands of Geheimrat Albert. His original task was to organize in New York extensive shipments of foodstuffs, particular wheat and fats, which were to be exported through the New York office of the Hamburg-Amerika line. This depended, in the first place, on the possibility of raising the necessary funds, and in the second, on the possibility that England, out of regard for the neutrals, and particularly the United States, would be compelled to abide by the codified principles of international law. Neither of these premises materialized.

As the necessary means for carrying through the scheme could not be raised it might have been possible to finance it if the Government had taken over the not inconsiderable funds of the German banks and the great industrial enterprises, e.g., the chemical factories in the United States, and used them for the shipments. The suggestions we made to this effect were not answered until the end of August, when we arrived in New York and had already lost many weeks in trying to negotiate the loan. One organ, which immediately after the war had taken up these questions on its own initiative, failed, and so nothing was done in the whole wide sphere of credit, supply of raw materials and foodstuffs and shipping until my arrival with the other gentlemen, so that the most favorable opportunity was lost. Remittances from Germany did not arrive until long afterwards, and then only to a very modest extent. Consequently the whole economic scheme was considerably narrowed and hampered from the beginning.

The second assumption, that the United States, in consideration of her great commercial connections with Germany, would maintain her rights as a neutral State to unrestricted sea trade within the provisions of international law, proved to be unfounded. The United States, at any rate according to the view of some very distinguished Americans, as, for example, in the journal New Republic , violated the spirit of neutrality when she allowed commerce of the neutrals one with another to be strangled by England. To the interest in traffic with the neutral States, and indirectly with Germany, was opposed the interest in the still greater trade with our enemies, to which was added, and indeed to a rapidly increasing extent, the supply of war material. The United States did not realize the extent of their economic power in respect of England, as the inexperienced, newly-appointed Democratic Government had no statistics to which to refer, and from a military point of view were defenceless for want of an army or fleet. So England was able, slowly and cautiously, but surely, to cut off the Central Powers from the American market. In view of this state of things the important thing was to pass all shipments off as neutral. The exporter had to be an American or a subject of neutral Europe. The financing had also to be European, at any rate outwardly. The destination could only be a port in Holland, Scandinavia, Spain or – at that time – Italy. Consequently it was not long before the consignments could no longer be made through the New York representative of the Hamburg-Amerika line, but were taken in hand by Herr Albert himself, who merely availed himself of the professional advice of the Hamburg-Amerika line.

All decisions therefore could emanate from the same source, which prevented loss of time, especially as the financial responsibility also rested with Herr Albert. The most important thing, however, was that attention was distracted from the shipping, as for a long time Herr Albert remained unknown, whereas the Hamburg-Amerika line from the first was kept under the closest observation by England. On the other hand, this arrangement exposed the cargoes to condemnation by the English prize courts as they were now State-owned. But Herr Albert could assume – and, as it turned out, rightly – that so long as the English respected neutral property, it would be difficult as a rule to trace the shipments back to him. Otherwise there would have been no security for a German private undertaking.

In carrying out his task, Herr Albert at first shipped the purchased goods by the usual lines (Scandinavia-American line). Soon, however, difficulties arose, because these lines, in order to avoid being held up in English ports, would no longer accept cargoes which were intended, if possible, for Germany, so a special line was formed sailing under the American flag. The direction of this line was in the hands of an American firm who represented themselves as the owners, whereas, in reality, the ships were chartered by Herr Albert. As, at the beginning of the war, the American flag was more respected by the English than those of the other neutrals, a number of these ships got through without much delay. Later this method of shipping also became impossible. Then single ships were chartered – mostly under the American flag – and when the owners, from fear of loss, refused the charter, or when outrageous conditions made chartering impossible, they were bought outright. The ships were consigned as blockade runners to a neutral port, and later either made direct for Germany or were taken in by a German ship of war. As the most important examples I may mention the Eir, Maumee, Winneconne, Duneyre, Andrew, Welch and Prince Waldemar .

With the tightening up of the English measures and blockade these undertakings became increasingly difficult, and finally had to be abandoned. Moreover the cost and the trouble of preparation grew out of all proportion to the results. Every individual shipment had to be prepared long beforehand. Out of ten attempts often only one would succeed. Very often an attempt which had cost weeks of work would fall through at the last moment owing to the refusal of credit by the banks, particularly when the political position was strained, or to an indiscretion, or English watchfulness, or difficulties with the American port authorities.

The English surveillance had assumed dimensions that would not have been possible without the tacit connivance, which at times became active support, of the American authorities. Not only did the English consuls demand that in each individual case the bills of lading should be submitted to them, but in addition to this an efficient surveillance and spy service was organized, partly by American detective bureaus and partly by a separate and wide-reaching service. The English had confidential agents in all the shipping offices, whose services had for the most part been acquired by bribery. At various times attempts were made to break into Herr Albert's office, to learn the combination for opening his safe, to get hold of papers through the charwomen and other employees, and even to rob him personally of papers. The control of the American port authorities was within the letter of the law, but in practice it worked very unfavorably to us. The regulation was that ship and cargo must be consigned to a definite port. This regulation was drawn up purely for purposes of statistics, and consequently no importance was attached to it before the war. As a rule the bills of lading were filled in by subordinate employees of the exporter. Soon after the outbreak of the war a special "neutrality squad" was attached to the "Collector of the Port of New York" whose duty it was to maintain strict neutrality by seeing that the said laws were properly observed. This led, in cases where there was a suspicion that the cargo was not intended for the given port of destination, but for Germany, to an exhaustive inquiry. This measure could not fail to act as a deterrent, and even Herr Albert was seriously hampered in his enterprises. The whole system amounted to a complement of the English blockade. When Herr Albert finally succeeded in coming to an agreement with the Customs authorities in this matter a great number of opportunities had been missed and the shipments had been made practically impossible by the tightening of the English blockade.