The first act of the German-American negotiations on the subject of submarine warfare thus closed with this open threat that war would follow any further action by Germany on the lines of the torpedoing of the Lusitania.

I think it well to reproduce here four of my reports, dated from Cedarhurst, a suburb of New York, where the Embassy usually had its headquarters during the hot summer months.

(1) Cipher

"Cedarhurst, June 9th, 1915.

"The political outlook in America appears at present as calm as a summer's day. The position abroad is perhaps reacting on internal affairs to some extent, as Mr. Wilson, as is usual in this country, considers foreign affairs primarily from the point of view of their influence on the prospects of next year's presidential campaign.

"The tide of anti-German feeling aroused by the Lusitania incident is still running pretty high, but it may now be regarded as certain, that neither the President nor the American people want a war with Germany. Mr. Wilson, then, will, I believe, have public opinion on his side, if he can find an honorable solution to his differences with us, and make use of this solution as the basis for a peace movement on a large scale. I am now even more convinced than I was a short time ago, at the time of my long interview with him, that the President's ideas are developing in this direction, and that this is the cause of his suddenly taking up the Mexican question again, as he hopes to find in it a means of diverting public opinion. I am unwilling to give any grounds for exaggerated optimism, but my recent observations incline me to the belief that the President and his Cabinet are more neutral than is commonly supposed. England's influence here is tremendous, permeating as it does through many channels, which we have no means of closing; but the Central Government, none the less, is really trying to maintain a neutral attitude. It is an astonishing thing, no doubt, but well established none the less, that all influential Americans who come from New York, Boston, and Philadelphia, the English headquarters in this country, to Washington, complain about the pro-German feeling there. I feel sure in my own mind that the Government hopes, by reviving the Mexican question, to diminish the export of arms and munitions to Europe. Public opinion, apart from the anti-German clique, would probably welcome such a move, as it is widely felt that the traffic in arms and munitions is hardly consistent with the continual appeals to humanity sent out all over the world from Washington. My general impression, as will be seen from the above, is that Mr. Wilson considers his best chance of re-election lies in bringing peace to Europe and restoring order in Mexico; for the latter purpose he will probably employ General Iturbide, who spent the whole of last winter in New York and Washington. He was at one time governor of the district of Mexico City, where he acquitted himself with courage and credit. He impressed me personally as a man of great ability. He should be able to find sufficient partisans in Mexico to enable him to raise an army, and the bankers of New York would be prepared to advance him the necessary sums. General Iturbide enjoys the full confidence of the present Administration, but only the future can show whether he will succeed in establishing a stable Government in Mexico, without the intervention of the United States."

(2) Cipher

"Cedarhurst, 12th June, 1915.

"Since the publication of President Wilson's second Note on the Lusitania incident, the daily Press has been busy with conjectures as to the real reasons for Mr. Bryan's resignation. It is generally agreed that the Note itself could hardly have been the occasion of the Cabinet crisis; as Bryan had concurred in the first Note, and there was no reason, therefore, why he should not have assented to the second one as well. On the other hand, no one can believe that the controversy with Germany was in reality simply an excuse for a personal trial of strength between Wilson and Bryan, after the manner of the earlier rivalry between Taft and Roosevelt.

"Bryan has now published in the World a manifesto addressed to the German-American community defending his attitude in this matter; but it is fortunately couched in terms which are unlikely to find favor in the eyes of those for whose benefit it was written. It would certainly be undesirable from our point of view that Bryan should be regarded as the champion of the German cause in this country; no useful result could follow from such advocacy. We must use all our efforts to come to an understanding with Mr. Wilson, if possible without compromising our present point of view; he is undoubtedly at the moment the most influential man in the country, and if he is antagonized we shall be powerless against him!"