"The inactivity of Mr. Wilson, who has only one thought, re-election, is due in the first place to the fact that no pressure is being put upon him by American public opinion to take action with regard to England. It is obvious that conditions here are not favorable to such action. Those American circles which are suffering financial losses as a result of the English blockade, have no weight in face of the tremendous stream of gold which our enemies have poured lavishly over this country, not haggling over details, and conniving at 'graft.' For the rest, Mr. Wilson's train of thought with regard to action in respect of England practically coincides with that expressed by Your Excellency. He does not think at present that it is likely to meet with any success, as he has no means of bringing pressure to bear. No one would take him seriously if he threatened England with war.
"The position is quite different with the President's well-known anxiety to bring about peace in Europe. In this matter he now has the whole of American public opinion behind him. He also believes that, after the expected failure of their present offensives, our enemies will be ready to open peace negotiations. If this assumption proves unfounded, and our enemies reject an American invitation on these lines, the main question dealt with in Your Excellency's instructions to me will be settled. Meanwhile, he is sure to make an attempt to negotiate peace, if only for election purposes. I therefore venture to request Your Excellency to cable me further brief instructions as to how I am to interpret the words 'more concrete form of mediation plans,' and 'positive proposal of mediation.' I am assuming that the main part of my respectful reports will only reach Your Excellency at the same time as this. Therefore, Mr. Gerard, when Your Excellency spoke with him at the beginning of May, on the question of mediation, would not have received detailed instructions as to the President's intentions. In any case, he was mistaken as to the attitude Your Excellency should adopt with regard to an American peace-movement. On the strength of a telegram received at that time from Mr. Gerard, Mr. Wilson believed that the Imperial Government was ready to accept his mediation, and I accordingly contradicted this assumption as instructed. As far as I know, Mr. Wilson refuses definitely to take any part in the discussion of territorial questions, but confines his interest to 'disarmament' and 'Freedom of the Seas.' His idea is that there should be a conference at the Hague, in which the United States and other neutral Powers would only take part in so far as these two questions are concerned. 'Disarmament' may certainly be very undesirable for us, but, on the other hand, the 'Freedom of the Seas,' ought, without a doubt, to bring us on the side of the United States. If it once comes to peace negotiations between the combatants, I regard it as out of the question—even were they to fail—that the United States would enter the war against us. American public feeling in favor of peace is too strong for that. It required the hysterical excitement roused by the Lusitania question, and the incidents connected with it, to produce a state of mind among Americans which at times made war seem inevitable. In the absence of similar incidents, such a state of public feeling could not be aroused. The admiration with which the cruise of the submarine Deutschland was regarded showed plainly which way the wind blows now.
"I made the above mentioned request because I consider it out of the question to prevent Mr. Wilson from taking action with regard to peace. I am in doubt, however, whether by a 'positive proposal of mediation' your Excellency means such a proposal as that made by Mr. Roosevelt after the Russo-Japanese War. On that occasion it is well known that the negotiations were carried on under direct American influence. This, as I have already said, is not what Mr. Wilson wants. He only wants to play the part of peace-instigator; he would like to deserve the credit for having brought the combatants to negotiate one with the other. Such a success would, in view of the state of feeling here, probably assure his re-election.
"I am therefore convinced that within the next few weeks the President will institute proceedings with regard to peace, provided that the enemy offensive continues to prove abortive. Mr. Wilson will then tell England that he has been obliged on the grounds of domestic politics to make a sharp protest against the blockade, provided that peace negotiations have not been opened. For me the question now arises whether I am to try to stand in the way of these proceedings. Of course I could exert strong influence on Colonel House. Wilson, however, would immediately suspect that we were attempting to deal with his successor, and to give Mr. Hughes the honor of instigating peace proceedings.
"As far as I can judge from here, there seem to be three possibilities:
"1. That the Wilson peace movement should fail in consequence of the obduracy of our enemies. In that case, if we were to reopen the submarine campaign to bring England to her knees, the situation would at least be more favorable to us than before.
"2. That the peace movement should fail through us, and that we should resume the submarine war.
"3. That the peace movement should be accepted by both sides.
"In the first case, I consider war with the United States probable; in the second, certain. This is the reason for my request for more definite instructions as to whether I am to impede a peace movement, or only a positive proposal that would bind us in respect of territorial conditions."
To this report I received the following reply, containing quite clear instructions, emphatically to encourage Mr. Wilson in whatever course he might take: