"Cedarhurst, 28th July, 1915.

"I have on more than one occasion respectfully begged your Excellency to be so good as to wait for my report before deciding whether the last American _Lusitania_ Note is to be answered, and if a reply is to be sent, in what sense it should be drafted. Neither the Government nor public opinion considers such a reply absolutely necessary, so that there is no danger in delay; but I respectfully request that I may be permitted at all events to undertake further negotiations here, verbally and confidentially, even if my instructions have to be sent by letter. Experience has proved that negotiations, if they are to have any prospect of success with the American Government, must be carried on in Washington. Both President Wilson and Mr. Lansing are now prepared to attempt to reach an agreement by this means. In Germany, where the tone of the American Note must have appeared unnecessarily abrupt, this fact is perhaps not realized the explanation of course is that Mr. Wilson was carried away by the popular excitement over the _Lusitania_ incident, and was, thus, compelled to adopt an intransigent att.i.tude, from which he cannot now recede, without making his position impossible here.

Then besides the resignation of Mr. Bryan, and that unfortunate telegram of Dr. Dumba's, which has become known here has convinced him that we are not in earnest. Finally, he wishes to come to some kind of settlement with us by means of this exchange of Notes, in order that he may then turn his attention to England; and his well-known pride confirms him in the view that only after he has concluded his negotiations with us, can he take up the matter with her. It should be clearly understood that Mr. Wilson does not want war with us, nor does he wish to side with England, despite all statements to the contrary in the Press of the Eastern States. This Press, in agreement with other powerful and influential circles is Anglophile to a degree and not altogether averse to a war with Germany; but this view is not shared by Mr. Wilson, or the large majority of the American people.

"The great danger of the present situation is that we may be driven to war, either by the efforts of this Press, or by a new _Lusitania_ incident. What Mr. Wilson wants is to satisfy public opinion here, by the serious tone of the Note sent to us, and at the same time to induce us to make certain concessions and thus carry out his darling project of the freedom of the seas, by finding some middle course between the German and English views. In his last note, the President has certainly modified his views in our favor by his admission that submarine warfare is legitimate, whereas he formerly maintained that it could not be regarded as permissible from the point of view of international law.

"It is not my business, even were I in possession of all the necessary facts, to say whether it would be better policy from our point of view, to reply to this Note, or to leave it unanswered; I can only describe the situation, as it appears to me at the moment. From that point of view the decision must depend very largely on the results which we expect to follow from the submarine campaign. If this campaign is regarded as an end in itself, and we are justified in believing that it can bring about the overthrow of England, it would be wiser to leave the American note unanswered, and carry on with the submarine campaign and turn a deaf ear to neutral protests.

If, on the other hand, this campaign is only a means to an end, the end being the removal or slackening of the British blockade restrictions, then I beg respectfully to urge that it would be worth our while to make some concessions to President Wilson's convictions, in the hope of achieving our object through his co-operation. He is reported by a witness in whom I have complete confidence, to have said: 'If I receive a favorable answer from Germany I will see this thing through with England to the end.'

"Before this report reaches your Excellency, Wilson's Note will have been delivered to the English Government. If this is couched in as peremptory a tone as the one addressed to us, then I urgently recommend that we should endeavor to come to an agreement with the American Government on the basis of the following draft note. I hope that your Excellency will send me an authorization by wireless--it should be sent in duplicate for greater safety's sake--to enter into negotiations on this basis; I believe that I can guarantee to find a satisfactory principle to serve as a weapon for Wilson in his attack on England. If we show ourselves ready to help him out of his present difficulties, I am sure he for his part will energetically prosecute against England his design of vindicating the validity of international law. 'It can be,' said the President himself in his last Note. In these three words may be seen the conviction of Mr. Wilson, that he can impose his will upon England in this matter.

"As I have already reported, I earnestly hope that it will be decided to reply to the American note; and a reply should, to my mind, deal with these three points:

"(1) Settlement of the _Lusitania_ incident. In this connection it would be well to state that from the point of view of reprisals we were entirely justified in attacking the _Lusitania_. In so doing, however, we had no intention of taking American lives, and deeply regret that through a combination of unfortunate circ.u.mstances this has actually occurred. If any distress still exists among the survivors of the disaster, we should be quite prepared to leave the amount of financial compensation to be decided by a later agreement.

"(2) We propose in the future course of the submarine campaign to abide by the practice recently adopted. As things stand at present, the arrangement is that no liner is to be torpedoed without warning.

"(3) We should be prepared to support to the utmost of our power the efforts of President Wilson, to insist on the observation of the dictates of international law during the present conflict, and leave it to his discretion to enter into conversations to this end with the British Government. The Declaration of London might serve as a basis for these conversations, more especially as it was drawn up at the time by the American Government.

"If we act in accordance with these my respectful recommendations, the breakdown of the negotiations with England is the worst that can happen; and then it would be clear for all the world to see that our enemies were to blame for this breakdown, and Mr. Wilson would come over to our side. Knowing the President as I do, I have not the slightest doubt of this."

I gather from the account in Karl Helfferich's "World War," Vol.

II., p. 322, that the Secretary of the Treasury in Berlin was in favor of this policy, which I held to be the only possible one.

When he stated, as before mentioned, that his proposal had found no support from the Foreign Office, I was much astonished.

I was instructed to commence negotiations verbally and confidentially with Mr. Lansing on these lines, and was convinced myself that these would lead to nothing, so long as we persisted in carrying on our submarine campaign on the old lines. Policy should be based on what is possible; now it was not really possible to unite these two contradictory methods, and to come to an understanding with the United States over the freedom of the seas, and at the same time to bring her to agree to the continuation of submarine warfare on the existing lines. We were bound to decide once for all on the one policy or the other. I supposed that Berlin had decided for the former course of action, as I knew that our submarine commanders had lately been ordered to arrange for the rescue of noncombatants before torpedoing merchantmen, and I was confirmed in my supposition by the very fact that I had been authorized to open conversations with Mr. Lansing.

Scarcely had these conversations begun, when on August 19th the pa.s.senger steamer _Arabic_ was sunk, and again some American lives were lost. Excitement at once attained a high pitch, and once more we seemed to be on the brink of war.

On August 20th I dispatched by one of my usual routes the following wire (written for reasons of safety in French) to the Foreign Office:

"I fear I cannot prevent rupture this time if our answer in _Arabic_ matter is not conciliatory; I advise dispatch of instructions to me at once to negotiate whole question. Situation may thus perhaps be saved."

At the same time, without writing for instructions, I explained both officially and also through the Press that on our side the United States would be given full compensation, if the commander of the _Arabic_ should be found to have been treacherously dealt with. It was my first preoccupation to calm the public excitement before it overflowed all bounds; and I succeeded in so calming it. The action I thus took on my own responsibility turned out later to have been well advised, as, although I did not know this at the time, the submarine commander's instructions had, in fact, been altered as a result of the disaster to the _Lusitania_.

On the 24th of August, in accordance with instructions from Berlin, I wrote to Mr. Lansing the following letter, which was immediately published:

"I have received instructions from my Government to address to you the following observations: Up to the present no reliable information has been received as to the circ.u.mstances of the torpedoing of the _Arabic_. The Imperial Government, therefore, trusts that the Government of the United States will refrain from taking any decided steps, so long as it only has before it one-sided reports which my Government believe do not in any way correspond to the facts. The Imperial Government hopes that it may be allowed an opportunity of being heard. It has no desire to call in question the good faith of those eyewitnesses whose stories have been published by the European Press, but it considers that account should be taken of the state of emotion, under the influence of which, this evidence was given, and which might well give rise to false impressions. If American subjects have really lost their lives by the torpedoing of this ship, it was entirely contrary to the intentions of my Government, which has authorized me to express to the Government of the United States their deepest regrets, and their most heartfelt sympathy."

Fortunately, as already mentioned, orders had been given before the torpedoing of the _Arabic_, to all submarine commanders that no liner should be sunk before preliminary warning had been given, and the non-combatants had been placed in safety, unless any ships tried to escape or offered resistance. At the end of August I received an official statement to this effect, intended for my use in the negotiations over the _Lusitania_ question. This statement caused the first hitch in these negotiations. The American Government regarded the term "liner" as comprising every steamer plying on recognized routes as distinguished from the so-called "tramp steamer." The German Naval authorities, on the other hand, averred that their reservation only applied to the large ships of the regular pa.s.senger services. However, this divergence of opinion only became important at a later date, and was not for the moment an obstacle to our proceedings.

On the other hand, it was certainly unfortunate for us that up to the 31st January, 1917, neither of the two contending parties in Berlin were able to gain complete control in the matter of policy.

I, myself, was never in favor of the submarine campaign, because I was convinced that it could not fulfil its avowed object, and would probably involve us in hostilities with the United States; but bad as this policy was, it would have been better to follow it consistently than to halt between two opinions.

The submarine campaign was in the end gradually and unwillingly sacrificed, owing to our desire to placate the United States. If we had made a clean sweep of it, once and for all, after the _Lusitania_ incident, or, at any rate, after the sinking of the _Arabic_, as we actually did after the torpedoing of the _Suss.e.x_, considerable advantages would have been gained from the diplomatic point of view.

To my mind, there was now only one thing to be done--to abandon our pretensions that the submarine campaign was being conducted in accordance with the recognized principles of cruiser warfare, laid down by international law, and to offer compensation for the loss of the _Lusitania_ and the _Arabic_. Having done this, we could then proceed to recall to the American Government their oft-expressed original view of the freedom of the seas. As a matter of fact, immediately after the settlement of the _Arabic_ incident, Mr. Lansing sent a peremptory Note to England. But the prospect of any favorable result for ourselves from this exchange of Notes was never fulfilled, as our methods of war at sea always resulted in fresh incidents and fresh conflicts. There was, of course, a second possibility: that is, while persisting in the submarine campaign to recognize that it was inevitably bound to lead to friction with America, and to discount all the ensuing consequences.

Neither of these two courses was consistently followed in our policy.

We were for ever trying to square the circle, and to conduct a submarine campaign which should be from a military point of view effective, without at the same time leading to a breach with America. The order that "liners" should not be torpedoed under any circ.u.mstances was regarded simply as a piece of red tape, and not applicable to war conditions, as the submarine was not in a position to distinguish through its periscope between "liners" and other craft. We thus contrived at one and the same time to cripple our submarines, and yet to fail to give satisfaction to America. Probably the German Government did not venture in face of public opinion in the country to desist altogether from the use of submarines.

It has been said that "the freedom of the seas" was an unattainable ideal, a mere phrase, a red herring drawn across our track; but it was in reality none of these things. America attached to this phrase a definite and concrete meaning; namely, the abolition of the law of capture at sea, and I am convinced that after the World War America will yet fall out with England over this question, and will not rest till she has achieved her object. Certainly the original sin of the United States against the spirit of neutrality lay in the fact that she suffered the violation of her admitted rights by England's interference with the reciprocal trade of the neutral States. Messrs. Wilson and House often talked with me about this matter of the law of capture at sea. It would be a complete misconception of American policy to deny that in this phrase, "the freedom of the seas," one of their dearest desires found expression.

When I informed Mr. Lansing confidentially at the end of August of the latest instructions to our submarine commanders, he was much gratified, but explained at once that the fact of its being confidential would deprive the information of all its value; something must, at all costs, be done to rea.s.sure public opinion. I could not but admit that the view of the Secretary of State was correct in this respect. The factor of public opinion obviously appeared of less importance in Berlin than in Washington; besides, I knew from experience that no secret could be kept in Washington for long, and that in a few days this, our first sign of yielding, would be common knowledge. I thought it best, therefore, to get the full diplomatic advantage from the new situation, and took it upon myself, on September 1st, to publish my instructions. This exercise of initiative got me a reprimand from Berlin, but I attained my object none the less, in that I avoided any immediate danger of war.

Concerning these negotiations the following correspondence took place with Berlin:

(1) CIPHER

"Cedarhurst, August 30th, 1915.

"I have tried to wire reports to your Excellency by the route placed at our disposal, and inform you as to the progress of the negotiations between myself and Mr. Lansing over the _Arabic_ incident. In consequence of the instructions given to me and the information given by your Excellency to the a.s.sociated Press in Berlin, the general situation here has taken a turn for the better. The prospect of war is becoming more remote; there are signs of returning confidence on the Stock Exchange, and I have even succeeded in inducing the Press to see things in a more reasonable light.

"Thus up to the present, everything seems to be going well, and a rupture of diplomatic relations appears once more to be indefinitely postponed. None the less, our difficulties are really much greater than at the time of the _Lusitania_ incident. The American Government's intentions are undoubtedly peaceful, and the case of the _Arabic_, involving as it did the loss of only two American lives, may be said to be in itself comparatively unimportant. There are other factors, however, to be considered. Both the Government and the people are beginning to have shrewd suspicions, which for reasons of policy they refrain from expressing at present, that we cheated the United States in the matter of the _Lusitania_, that we spun out the discussion as long as possible, and then replied to President Wilson's last and most peremptory Note, by torpedoing the _Arabic_.

I am convinced that Mr. Lansing, who is an able lawyer, and as a result of his American training alive to every possible move of an opponent, expects us to follow the same policy over the matter of the _Arabic_. He has thus no great confidence in our good faith, though the President, I am told, is more optimistic, his friend House having informed him that his policy of the 'freedom of the seas' commands general a.s.sent in Berlin. The facts of the situation, then, are that the President will not permit any procrastination in the negotiations over the _Arabic_ affair, for should no more satisfactory conclusion be reached now than was the case after the _Lusitania_ incident, Wilson would forfeit the respect of his countrymen, and would have no other resource but to forego his cherished design with what face he might, or else break off diplomatic relations with Germany. There can be no doubt in the minds of any who are well versed in American affairs that he would elect for the latter course. The Spanish-American War arose out of just such a situation.

"The following conclusions result from the above: I gather from the Berlin reports of the a.s.sociated Press that your Excellency has decided to settle the present dispute with the United States on the lines which I have respectfully suggested to you. If this be so I urge the utmost expedition in the matter, that confidence here may be restored, and the way opened for negotiations with England. It is not so much a matter of making apologies or giving explanations, but rather of making a full statement to this Government as to the instructions given to our submarine commanders. If we can prove by this means that after the _Lusitania_ incident, orders had been given to attack no pa.s.senger ships while negotiations with the United States were going on, or to do so only under certain conditions, all outstanding questions could be solved without difficulty."

(2) CIPHER DISPATCH

"Berlin, September 10th, 1915.

"_Daily Telegraph_ of September 2nd publishes what purports to be extract from your aforesaid letter to Mr. Lansing, informing him of instructions issued to submarine commanders. Extract ends as follows:

"'I have no objection to your making any use you please of the above information.'

"If _Daily Telegraph_ has reproduced your letter correctly, above statement is contrary to instructions, which authorized you only to give information confidentially to American Government. Premature publication in American Press places us in difficult position here, especially as no official report of actual contents of your communication to Mr. Lansing has reached us. I beg that you will kindly furnish an explanation.

(Signed) JAGOW."

(3) CIPHER REPORT

"Cedarhurst, October 2nd, 1915.

"Reference your wire No. A 129 of September 10th, I ask your Excellency to be kind enough to pardon me for having taken upon myself to act on my own responsibility over the submarine question. The position at the end of August rendered some action to pacify public opinion imperative, if a breach were to be avoided. Owing to the difficulties of communication with Berlin I could do nothing but acquaint Mr.

Lansing with a portion of my instructions concerning the case of the _Lusitania_--the only ones which had then reached me. I at once reported my action to your Excellency in my wireless message, No.

179, and in a previous telegram, No. 165, and requested approval of my action; probably these messages have been delayed in transit, or have not reached Berlin. In further explanation, I may add that in this country, confidential matter, in the European sense, does not exist, and such matter can never be kept a secret from the Press. Sometimes I have been able to come to an agreement with the Government over the wording of their _communiques_ to the Press; that is one of the great advantages of conducting the negotiations on the spot. Had the whole American Press entirely refused to accept our official explanations, nothing further could have been done with the Government."