Before August 1914, every act of preparation for war, every advantage that naturally accrued to Britain through her unparalleled maritime strength, argued in favour of a close blockade of Germany. It never happened. By the end of August the situation had altered dramatically and the raw statistics remain breath-taking. At least one half of the world’s sea carrying capacity sailed under the British flag. The British fleet dominated every sea-gate in Europe, the North Sea, the Atlantic, the narrow Gibraltar Straits passage to and from the Mediterranean Sea, and the Indian and the Pacific Oceans. ‘The actual and physical power of the Fleets of England to cut off from the armies and inhabitants of the German Block all supplies whatever from oversea was undoubted.’ 
Germany was effectively barred from these seaways and, apart from the battle of Jutland, for most of the war the German High Seas Fleet remained in harbour behind their protective screens of mines. Ships of the Imperial German navy which were at sea when war was declared, were systematically hunted down and destroyed. The German light cruiser Emden, which independently raided across the Indian Ocean sinking or capturing some thirty Allied ships, was engaged in battle on 9 November 1914 by the Australian navy cruiser Sydney. With a third of his crew killed in the engagement, Captain Muller ran his ship aground on the Cocos Islands. On 8 December 1914 a large British squadron came out of Port Stanley in the Falkland Islands to engage and destroy the powerful German squadron of Vice Admiral von Spee. Just one week earlier, von Spee had defeated a Royal Navy squadron off Coronel in Chile. The battle of the Falklands put an end to raids on merchant shipping by German surface vessels, and international trade between Britain and the Americas successfully carried on until the advent of the German U-boat blockade later in the war.
Like Britain, international trade was also vital to Germany’s survival as a modern industrial nation and her balance of trade deficit was largely accounted for by the importation of foodstuffs and raw materials.  Without sufficient imports of food, Germany would be starved into submission. When war was declared, over 600 German ships took refuge in neutral ports. All German and Austrian vessels in British, French and Russian ports were immediately impounded, so that, by the end of August 1914 Germany’s maritime trade ceased to operate, with the important exception of the Black Sea and Baltic Sea. 
Almost a quarter of a million tons of German shipping was stranded in New York harbour, including the Vaterland, the largest passenger ship afloat, and three Norddeutschcher Lloyd liners all capable of steaming at over 19 knots across the Atlantic. Another Hamburg-Amerika liner was laid up for the duration of the war at Boston. It was particularly important to Britain’s maritime safety that these five powerful ships remained bottled up in American ports for fear they could be transformed into armed cruisers and cause havoc on the Atlantic passages. Although a Ship Registry Act that would have allowed these vessels to be transferred to the American flag was signed by President Wilson on 18 August, it was not ratified by Congress and these great German liners were doomed to see out the war as prisoners in the safe haven of American harbours  The Vaterland, however, was seized by the US government when America entered the war in April 1917, renamed SS Leviathan, and used as an American troop carrier.
As detailed in the preceding blog, with Germany’s entire merchant fleet out of action, Churchill boldly informed the Guildhall banquet on 9 November 1914 that a blockade by sea would quickly bring Germany and her allies to their knees. It did not. Why? The rules of naval blockade had long been an extremely contentious issue. For centuries privateers – privately owned, armed pirate ships authorised by the Crown to attack and seize foreign merchant vessels during time of war – had been a means by which the Crown could mobilize armed ships and sailors at no cost to government. The plundered ships and their cargoes legally became Crown property, and their value assessed by an Admiralty ‘Prize Court.’ When a vessel and its cargo were sold, the prize money was shared between the captain, his crew and any individuals who had invested in the privateer ship.
Privateering was abolished by the Paris Declaration of 1856 Respecting Maritime Law which was ratified by fifty-five states. It was replaced with regulations on what constituted contraband of war and what was or was not liable to capture. The warships of a country at war were now entitled to stop and examine the cargo of any neutral merchant ship on the high seas. Neutral goods were exempted from seizure, but any material on the contraband list that might aid the enemy, such as weapons, gunpowder, cotton, army uniforms, could legally be seized.
The Paris Declaration was not a treaty, nor was it signed by Britain or America, and so rules for stopping, searching and apprehending merchant vessels remained unclear. Discussions between the major maritime nations took place in London in 1908 and the consequent ‘Declaration of London’ on ‘The Laws of Naval War’ was issued on 26 February 1909. The British foreign office had been instrumental in organising the conference, and foreign secretary Sir Edward Grey put great personal store in the declaration. It recommended the establishment of an International Prize Court, laid out guidelines on contraband and issued directives on how neutral countries should be allowed to trade with combatant nations.
Material that should be considered contraband was defined in two levels: (1) Absolute contraband included weapons of all kinds and their distinctive component parts. Projectiles, charges, and cartridges of all kinds, and their distinctive component parts. Powder and explosives specially prepared for use in war. Gun-mountings, limber boxes, limbers, military wagons, field forges, and their distinctive component parts. Clothing and equipment of a distinctively military character. (2) Conditional contraband included Foodstuffs. Forage and grain suitable for feeding animals. Barbed wire. Clothing. Fabrics for clothing and boots and shoes suitable for use in war. Fuel, lubricants and explosives. In the event of war the contraband list had to be declared to the governments of enemy Powers, with a notification to all neutral powers after the outbreak of hostilities.
The Declaration of London ruled that the following would not be declared contraband and therefore not subject to seizure in a blockade: (a) Raw cotton, wool, silk, jute, flax, hemp, and other raw materials of the textile industries, and yarns of the same. (b) Oil seeds, nuts and copra (the dried kernel of coconut used to extract oil). (c) Rubber, resins and gums. (d) Raw hides, horns, bones, and ivory. (e) Natural and artificial manures, including nitrates and phosphates for agricultural purposes. (f) Metallic ores. 
Sir Edward Grey and the Secret Elite were well pleased with the outcome of the conference they had organised, but generally it proved to be highly contentious in Britain. What sense did it make that the British government would agree to contraband regulations that would allow Germany in time of war to import cotton for her explosives manufacture, oil for her nitro-glycerine and dynamite, jute for her sand bags, iron, copper tungsten and other ores for production of her guns, rifles, bayonets, and shells, rubber for tyres and wool for military uniforms?  Little wonder that detractors dubbed it a ‘sea-law made in Germany’. 
Many observers, especially those associated with the Royal Navy, were outraged at the stupidity of the greatest sea-power on earth agreeing to clauses and conditions that could only serve to strengthen its foes. Serious tension developed between the Admiralty and the foreign office and 120 ‘Admirals’ signed a written objection which was circulated to all members of the House of Commons.  Opposition was fierce and although the Declaration was approved by the House of Commons, it was summarily thrown out by the House of Lords in December 1911  Since it failed to be ratified by the British government, it failed to have any legal standing within Britain or the Empire or indeed the United States which also rejected it.  From March 1911 until it produced a secret report in February 1913, the Committee for Imperial Defence had a sub-group examine the implications of Trading with the Enemy in war time.  This secret sub-committee comprised high-level civil servants from various government departments, and included both the Director of Naval Intelligence and the Chief of the War Staff at the Admiralty.
Lord Esher and Maurice Hankey, both members of the inner circle of the Secret Elite, attended as ‘advisor’ and secretary respectively. Esher warned the group on the impact of public opinion and expectations of the general public which would assume that the navy would blockade every avenue of approach to Germany by sea.  He advised that it was likely that Germany would be ‘hermetically sealed’ by the priorities of waging war. With an effective blockade of the North Sea ports, sea-borne trade in Europe would be ‘so danger-swept as to be practically closed to commerce’. Lord Esher thus concluded that there was no need for parliamentary legislation. It could, he said, be taken for granted that in the event of war trade of any kind between Britain and Germany would be so limited as to be negligible. All that would be required was a proclamation at the outbreak of war warning British subjects of their responsibilities and liabilities.  Everyone expected a blockade, everyone knew not to trade with the enemy, so parliament need not be troubled. As we shall see, the reality was that the Secret Elite wanted a door left ajar through which Germany would be able to trade and access essential foodstuffs and war materiel. Esher and Hankey of the Secret Elite were adamant that there was no need for legislation making cotton and other important war materiel absolute contraband, because everything was already in place.
At a meeting of that secret sub-committee on 20 January 1912, Rear-Admiral Troubridge, chief of the war staff at the Admiralty, lashed out. As far as the navy, and indeed the army, was concerned, it was outrageous to assume that while the armed forces would be focussed on crushing the enemy, neutrals would be allowed to supply Germany with the necessary resources to maintain her fighting forces and weapons production. He stressed the Admiralty view that every possible obstacle should be placed on trade with Germany to stifle economic life, and make them so desperate that they would take dangerous risks that would lead to defeat.  No-one would openly refute such an obvious statement of fact. It would have been tantamount to treason. But agencies were afoot, even two years before war was declared, to thwart the best intentions of the Admiralty to mount an effective blockade that would bring war to a quick and successful conclusion. The navy may have assumed that it would be in control of any blockade, and the secret sub-committee may have assumed that its recommendations on goods to be prohibited would be fully absorbed into war policy, but powers greater than they exerted would come into effect.
Despite Esher and Hankey’s exhortations, the sub-committee’s most important proposal was that British ships should be banned from carrying cargoes of cotton from America to neutral ports close to Germany without clear and absolute proof that it was not destined for Germany. Cotton was crucial. It was the essential element in gun-cotton, the first high explosive requirement for artillery shells, projectiles, machine guns and rifles. It was such an important element for armaments and ammunition that it headed the sub-committee’s list of prohibited exports. 
Without cotton, the great howitzers would have been unable to rain down their massive destruction on fortifications, towns and trenches. The front-line troops, huddled in their muddied trenches would have been spared the merciless bombardments and millions of lives would have been spared. Cotton, turned by science into gun-cotton, was a priceless element and both Britain and Germany depended on its importation, mainly from America. Implementation of the proposal from the sub-committee on Trading With The Enemy to stop British ships from carrying American cotton across the Atlantic to neutral ports (from where it was anticipated they would be sold on to Germany) would have given Britain a powerful advantage and seriously limited Germany’s capacity to manufacture shells and bullets. Yet, from the bowels of the Secret Elite lair in the Foreign Office, moves were afoot to abort this very straightforward but highly effective cotton embargo.
The sub-committee wasn’t falling into line with Esher and Hankey’s Secret Elite wishes, and the first salvo across the bows of those members who wanted a ban on cotton trade was fired by the legal assistant-advisor to the foreign office, Sir Cecil Hurst. Though relatively unknown at that juncture, Hurst, [he was knighted in 1913] was later identified by Professor Quigley as a close associate of Alfred Milner and the Secret Elite’s Round Table group.  His argument ran as follows; the United States had a relatively small merchant marine fleet and depended on British ships to carry its cotton exports to Europe. Germany was a substantial importer of cotton and a blanket ban would ruin the Southern U.S. planters. If such trade was closed to British merchant ships, and the fair assumption was made that the German flag would disappear from Atlantic voyages, there would be insufficient neutral tonnage to carry cotton exports. Freight prices would rise and British ship owners would be tempted to transfer their vessels to the American flag in order to take advantage of the grossly inflated profits available under such conditions. In other words the American cotton manufacturers desire to maintain their markets and make a substantial profit from the demand for cotton in wartime, linked to the unrestrained greed of British ship-owners to take advantage of the situation, would ensure the transfer of many British vessels to American owners. Loyalty to the cause? Obligation to the state or the crown? Dulce et decorum est pro patria mori? Forget it. Raw capitalism was stronger than any bond of blood or race, and raw cotton was worth more than its weight in diamonds to the profiteers.
Note the connection between the parliamentary rejection of the Declaration of London by the House of Lords in December 1911 and the foreign office appendix to the sub-committee on Trading With The Enemy presented by their legal advisor Cecil Hurst in 1912. When their Lordships threw out the ratification of the Declaration of London, they threw out the immunity for cotton as contraband. When Hurst presented his paper to the sub-committee, he, as a Secret Elite agent, placed it secretly back on the agenda. Basically the message was that Parliament could reject whatever it liked, but behind its back, the foreign office had every intention of proceeding as Sir Edward Grey and the Secret Elite ordained. And they did. They knew exactly what they were doing when they undermined the Committee of Imperial Defence plans to ban cotton exports to Germany immediately war began.
Questioned by New York Times journalists in August 1915 on why cotton had not been declared contraband Lord Alfred Milner, the central figure at the heart of the Secret Elite, could only only reply, “I do not suppose it was realised by the government or their advisers in the early months of the war that a vast demand for cotton for military purposes would arise.”  Such spurious nonsense beggars belief. The British government knew all there was to know about the military need for cotton. Their own advisory committee had advised that it be the very first item on the contraband list. Without cotton, Germany could not have continued to rain down murderous shells on the beleaguered Allied troops on the Western Front. Without cotton Germany could not have continued in the war beyond 1915.
 George F.S. Bowles, The Strength of England, p. 162.
 C. Paul Vincent, The Politics of Hunger, The Allied Blockade of Germany, 1915-1919. p. 36.
 Ibid., p. 37.
 H.H. Asquith, Letters to Venetia Stanley, p. 181, note 5.
 The Declaration of London, Norman Bentwich, 1911, http://www.archives.org. eBook and Texts, California Digital Library.
 The Great War, ed. Hammerton and Wilson vol. 7. p. 122.
 Consett, The Triumph of Unarmed Forces (1914-1918), p. 23.
 Hansard, House of Commons Debate, 29 June 1911 vol 27 cc574-696.
 Hansard, House of Lords Debate, 12 December 1911 vol 10 cc809-95.
 George F.S. Bowles, The Strength of England, p. 163.
 National Archives, Cabinet Papers PRO CAB16/18A
 PRO CAB16/18A, p. 429.
 PRO CAB16/18A, pp. 429-30.
 PRO CAB16/18A, p. 74.
 PRO CAB16/18A, p. 45.
 Carroll Quigley, The Anglo-American Establishment, p. 158.
 Viscount Milner, Cotton Contraband, New York Times, 21 August 1915.