Sanctions System Gets First Trial
The League of Nations reassembles today at Geneva as a Conference for the Coordination of Sanctions.
It has before it the task of setting up the necessary machinery for control of sanctions
against Italy. It must go over the replies that have been received from its membership
governments on the several proposals. It has to effect its end with dispatch, as the date of
Nov. 15 has been tentatively announced for economic sanctions against Italy to take
effect.
The purpose of sanctions is clear enough—to cut off moral and material support from
the aggressor in order to force him to back down. To this end the League of Nations has
recommended five measures to its members. What are the possible effects of these devices:
On the aggressor, on League members, and on nonmember nations?
The Sanctions
Arms embargo against Italy to be continued
or imposed; against Ethiopia, to be lifted.
2. Financial boycott on all Italian loans,
direct or indirect.
3. Boycott on direct or indirect importation
of all Italian goods.
4. Boycott on direct or indirect export to
Italy of the following key war materials largely
controlled by League members:
A. Horses, mules, donkeys, camels and all
other transport animals.
B. Rubber.
C. Bauxite, aluminum, alumina (aluminum
oxide), iron ore, scrap iron, chromium,
manganese, nickel, titanium, tungsten, vanadium and their ores, and ferro-alloys (ferro-
molybdenum, ferro-silicon-manganese and
ferro-silicon manganese-aluminum). Also all
crude forms of these minerals and metals, with
their ores, scrap and alloys.
D. Tin and tin ore.
5. Exceptions provided for among League
members to existing treaties containing most-
favored-nation clauses, with other measures of
mutual support to minimize loss in applying first
four boycotts.
The Aggressor
Italy is a manufacturer of arms and munitions of war, but is almost completely dependent
upon imports for key materials. Coal, oil, cotton,
wool, rubber, iron and steel, copper, tin, nickel,
lead and manganese are among indispensable
imports-
Can Italy reach around the League boycott to
new import sources? An even more vital question
is whether she will be able to pay for imports
in the long run, with all new credits abroad
snuffed out and her exports drastically curbed.
The boycott on Italian exports takes away—to
whatever degree it is complete—the possibility of
renewing foreign exchange, that is, buying power
abroad.
League Members
Sanctions are obligatory under the Covenant,
but application of sanctions is left to the individual League members, acting simultaneously
on advice of a central coordination committee.
It remains to be seen how many members will
actually apply the sanctions voted, and to what
extent those abstaining will be under pressure
from Italy to sell, and from League members not
to sell. Export to countries which re-ship to
Italy may be curtailed.
Among members concerting their efforts, mutual exchange of business formerly done with
Italy will be possible in varying degree. The provisions for mutual support are designed as shock-
absorbers against avoidable loss.
Nonmembers
The United States, Germany, Japan and
Brazil are the chief non-members of the League:
Their co-operation with the League largely
rests on whether they will prevent private traders
from taking over Italian markets voluntarily
surrendered by League members.
United States neutrality legislation does not
cover key raw materials.
Germany and Japan are holding aloof with
policies of declared neutrality, but are free to
trade with Italy.
Brazilian meat packers recently rejected Italian orders in view of the risks involved in
delivery.
But there are snags in the way of taking over
Italian markets. Sympathy for Italy among non-
League members is hardly equal to paying in
part for her war against Ethiopia, by giving her
goods. Even nations willing to sell to Italy may
not be willing to buy enough to make exchange
possible. In this way non-members may indirectly
help the League ban on imports from Italy.
Are Italian gold reserves and existing foreign
credit sufficient to pay for imports she must
have? The answer to that question may well
measure the practical effectiveness of sanctions
in their first great test.