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Germany’s announcement to neutrals of a policy of “unrestricted naval warfare” from February 1; all sea traffic to be prevented in wide zones round Great Britain, France, Italy, and in Eastern Mediterranean. United States to be allowed access to Falmouth with one steamer per week, and a Dutch paddle steamer to be allowed to ply between Flushing and Southwold. German Chancellor explains and justifies the policy; his firmer attitude towards submarine warfare only pro tempore; time has now come with increased number of submarines, world shortage of corn and shortage of coal in France and Italy to wage unrestricted submarine war. Foreign Office statement issued announcing Germany’s intention to sink British hospital ships; allegations that they are used for transport of troops and munitions denied and reprisals threatened. Successful British raid south-east of Neuville St. Vaast. German attacks near Beaucourt and Serre fail; more German prisoners near Le Transloy. Russians recover their gains near Riga. Russians take 1,000 prisoners in Bukovina.