In the early days of the War Congress passed a bill admitting foreign ships to American registry.

The wisdom and even the "neutrality" of such an act were much questioned at the time.
Colonel House, in one of his early telegrams to the President, declared that this bill "is full of lurking dangers." Colonel House was right.
The trouble was that many German merchant ships were interned in American harbours, fearing to put to sea, where the watchful British warships lay waiting for them.

Any attempt to place these vessels under the American flag, and to use them for trade between American and German ports, would at once cause a crisis with the Allies, for such a paper change in ownership would be altogether too transparent.

Great Britain viewed this legislation with disfavour, but did not think it politic to protest such transfers generally; Spring Rice contented himself with informing the State Department that his government would not object so long as this changed status did not benefit Germany.

If such German ships, after being transferred to the American flag, engaged in commerce between American ports and South American ports, or other places remotely removed from the Fatherland, Great Britain would make no difficulty.