The Encyclopedia Americana (1920)/Blacklist, The

BLACKLIST, The, name applied to a war measure adopted by the British government in accordance with an Order in Council of 23 Dec. 1915, prohibiting British subjects from trading with specified firms and persons residing or established in neutral countries. From time to time lists of such proscribed firms had been published in the official London Gazette, and included a considerable number of Japanese firms and business houses established in various countries of Europe, South America and Asia. On 18 July 1916 the Gazette issued a list giving the names of 82 firms “domiciled” in the United States. Of these, 72 were established in New York city, three in Pennsylvania, two in Texas, two in California, one in Seattle and one each in Virginia and Florida. The names did not appear in the London newspapers. The publication of the “blacklist” in the American press created considerable sensation, and vigorous protests were raised on the ground that the inhibition constituted an unwarrantable interference with American trade. The government was called upon from many sides to take steps of a retaliatory nature if the offending list were not repealed. On 22 July Mr. L. W. Evans, Chief of the Department of Foreign Trade of the British Foreign Office, informed a representative of the Associated Press in London that the list had been compiled with the sole object of prohibiting British citizens from supporting firms which were strengthening the German enemy. He stated that the test applied before placing a firm in the United States on the list was: “Is that firm by its business operations strengthening our enemies? If so, then British firms may not support it.” As the prohibition extended to British shipping carrying freight for any such firms, and rendered their cargoes on neutral vessels liable to prize court confiscation, shipping companies were unwilling to take the risks involved. Thus on 20 July the Royal Dutch Mail Steamship Company, running vessels to the West Indies, announced that they would not accept any freight from shippers whose names appeared on the British blacklist, or take cargo for consignees similarly placed. Many other neutral shipping firms took the same course. The Teutonic Sons of America seized the opportunity to despatch a communication to the President, accusing him of “wavering,” recalling Jefferson's words that “England is still our enemy,” and suggested an embargo on munitions and provisions. British officials in Washington contended that no legitimate American firm or corporation would be injured by the blacklist, nor any German firm in the United States which had confined its operations to its own line of business; in short, that British subjects were prohibited from having any dealings with only such firms as were known to be actually under German control; whose profits went to Germany; or in cases where either German or American firms in the capacity of agents had departed from their regular lines to trade with Germany. Thus, for example, the British government knew that a German-American firm in New York had shipped a large quantity of nickel on the submarine Deutschland, yet that firm was not placed on the blacklist because dealing in such metal was part of its ordinary business. The Washington correspondent of the New York Sun reported (25 July) that the British list had not been published until the acquiescence of several banking institutions in New York had been obtained. “The banks were convinced that the blacklisted firms had been maintaining Germany's trade relations in South America, and that they were in a position to do this only because they were domiciled in a neutral country . . . and that the only effect of the boycott would be to transfer the business of German to American firms.” The Wall Street Journal (25 July) expressed a hope that the government would not make a protest, on the ground that the Allies exercised “a power which belongs to every state, to regulate the conduct of its own citizens . . . For its own preservation, the (United States) government regulated the business affairs of its citizens in neutral countries when (in 1863) their activities might even indirectly aid an enemy. It was a legitimate exercise of its power.” Meanwhile, the Allies (for France had issued the same list) had searched American records and discovered that on 16 Aug. 1861 President Lincoln issued a proclamation declaring that “all commercial intercourse between the States in insurrection and citizens of the United States is unlawful, and will remain unlawful until such insurrection shall cease.” In the following year (26 May 1862) an act of Congress authorized the Secretary of the Treasury to refuse clearance to ships where their cargoes, “whatever their ostensible destination,” were intended for points or places in possession or under the control of insurrectionists against the United States. From these precedents, apart from other considerations, the British government maintained its right to forbid its own nationals to trade with persons who openly or secretly aided the enemies of Great Britain. Acting State Secretary Polk instructed Ambassador Page (24 July) to inform the British Foreign Minister that the United States government must “protest in the most decided terms” against the “arbitrary interference with neutral trade.” The protest was presented on the 28th, and in his reply (10 Oct 1916) Lord Grey of Fallodon described the measure as “a piece of purely municipal legislation . . . part of the belligerent operations designed to weaken the enemy's resources.” He pointed out “that many Germans in neutral countries have done all in their power to help the cause of their own country and to injure that of the Allies . . .; that German houses abroad have in a large number of cases been used as an integral part of an organization deliberately conceived and planned as an engine for the furtherance of German political and military ambitions . . .; German business establishments in foreign countries have been not merely centres of German trade, but active agents for the dissemination of German political and social influence, and for the purpose of espionage. . . . Such operations have been carried out in the territory even of the United States itself.” The prohibition, he repeated, applied only to “persons in the United Kingdom,” and that the measure was “simply one which enjoins those who owe allegiance to Great Britain to cease having trade relations with persons who are found to be assisting or rendering service to the enemy.”

Shortly before the American blacklist was issued the Allies had held an “Economic Conference” in Paris (14-17 June 1916), at which it was decided that “The Allies will prohibit their own subjects and citizens and all persons residing in their territories from carrying on any trade with (1) the inhabitants of enemy countries whatever their nationality; (2) enemy subjects wherever resident.” As a result of American representations, the names of several firms were removed from the blacklist; the prohibitive ordinance on British subjects was rigorously maintained. Several British business men found guilty of indirect trading with the enemy were heavily fined and sentenced to terms of imprisonment.

The total number and distribution of firms placed upon the blacklist were — Argentine and Uruguay, 95; Bolivia, 22; Brazil, 140; Central America, 5; Chile, 35; Columbia, 1; Cuba, 10; Ecuador, 69; Greece, 50; Holland and colonies, 190; Japan, 86; Morocco, 88; Norway, 83; Paraguay, 3; Persia, 56; Peru, 41; Philippines, 44; Portugal and colonies, 166; Spain, 167; Sweden, 72; and United States, 85. See Blacklisting.