steamship flies coming in to denote that she has mails on
board.

"Before the war both the Lusitania and the Mauretania flew the blue
ensign of the Royal Naval Reserve, which any British merchant vessel is
allowed to do if her commander and officers and two-thirds of the crew
belong to the reserve."

NEUTRALS IN THE WAR ZONE.

[German Foreign Office Note.]

[Special to The New York Times.]

_WASHINGTON, May 11.--Secretary Bryan received from Ambassador Gerard at
Berlin today the text of an official declaration by the German
Government of its policy with respect to American and other neutral
ships meeting German submarines in the naval war zone around the British
Isles and in the North Sea. This declaration was handed to Mr. Gerard by
the German Foreign Office which explained that it was being issued as a
"circular statement" in regard to "mistaken attacks by German submarines
on commerce vessels of neutral nations."_

First--The Imperial German Government has naturally no intention of
causing to be attacked by submarines or aircraft such neutral ships of
commerce in the zone of naval warfare, more definitely described in the
notice of the German Admiralty staff of Feb. 4 last, as have been guilty
of no hostile act. On the contrary, the most definite instructions have
repeatedly been issued to German war vessels to avoid attacks on such
ships under all circumstances. Even when such ships have contraband of
war on board they are dealt with by submarines solely according to the
rules of international law applying to prize warfare.

Second--Should a neutral ship nevertheless come to harm through German
submarines or aircraft on account of an unfortunate (X) [mistake?] in
the above-mentioned zone of naval warfare, the German Government will
unreservedly recognize its responsibility therefor. In such a case it
will express its regrets and afford damages without first instituting a
prize court action.

Third--It is the custom of the German Government as soon as the sinking
of a neutral ship in the above-mentioned zone of naval warfare is
ascribed to German war vessels to institute an immediate investigation
into the cause. If grounds appear thereby to be given for association of
such a hypothesis the German Navy places itself in communication with
the interested neutral Government so that the latter may also institute
an investigation. If the German Government is thereby convinced that the
ship has been destroyed