"The following conclusions result from the above: I gather from the Berlin reports of the Associated 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 passenger 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 communiqués 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."
While my negotiations with Mr. Lansing in Washington for a simultaneous settlement of the Arabic and Lusitania questions were still in progress, a memorandum was handed to Mr. Gerard, the American Ambassador in Berlin which purported to justify the action of the offending submarine commanders. Thus the situation once more became acute. The contents of this document were as follows:
"On August 19th a German submarine held up the English steamer Dunele about sixty miles south of Kinsale, and having ordered the crew to leave the ship, were about to sink it by gun-fire when the commander observed a large steamer heading directly towards him. This latter, which afterwards proved to be the Arabic, bore no ensign, or other marks of neutrality, and was thus obviously an enemy. Approaching nearer, she altered her original course, and again made directly for the submarine thus leading the commander of the latter to suppose that she was about to attack and ram him. In order to parry this attack, the submarine dived and fired a torpedo which struck the ship. The submarine commander observed that those on board got away in fifteen boats.
"According to his instructions, the German commander was authorized to attack the Arabic without warning, and without allowing time for the rescue of her crew, in case of an attempt at flight or resistance. The action of the Arabic undoubtedly gave him good grounds for supposing that an attack on him was intended. He was the more inclined to this belief, by the fact that a few days before, on the 14th, he had been fired at from long range by a large passenger steamer, apparently belonging to the British Royal Mail Steam Packet Company, which he saw in the Irish Sea, but which he had made no attempt to attack or hold up.
"The German Government deeply regrets that loss of life should have resulted from the action of this officer, and it desires that these sentiments should be conveyed more particularly to the Government of the United States, as American citizens were among the missing. No obligation to make compensation for the damage done can, however, be admitted, even on the hypothesis that the submarine commander mistook the intentions of the Arabic. In the event of an insoluble difference arising on this point between the German and American Governments, the German Government suggests that the matter in dispute should be referred to the Hague Tribunal as a question of international law, in accordance with Article 38 of the Hague convention for the peaceful solution of differences between nations; but it can do so only with this reservation, that the arbitrator's award shall not have the validity of a general decision as to the international legality or otherwise of the German submarine warfare."
The following three reports or telegrams dispatched by me to the Imperial Chancellor describe the situation in Washington at this juncture:
(1) Cipher
"Washington, September 14th, 1915.
"Lansing has given me permission to wire you by this route, without the messages being seen by him; he will also forward your Excellency's reply, and from this it appears to be the Government's view, that any further exchange of Notes, the subsequent publication of which, in both countries, would merely involve further misunderstandings, is bound to lead to a breach. It considers the present system of confidential negotiations with me as the only promising method of arriving at an agreement. The memorandum on the Arabic is not understood here, and in so far as it is understood, is considered to be a manifestation of German bad faith – a sign that we may perhaps give way in principle, but will always in practice seek to evade our obligations thus incurred.
"Lest this telegram should, by its length, give offence to the British, Mr. Lansing is forwarding the evidence in the Arabic case to Mr. Gerard for transmission to your Excellency; he is himself quite convinced that the submarine commander was not compelled in self-defense to torpedo the Arabic, and that his action in so doing was therefore unjustified. He hopes that your Excellency will after study of the evidence, agree with him in this.
"To obtain full and complete agreement it is first of all necessary that I should be empowered to publish in full those instructions given to our submarine commanders in so far as these were not given in my previous summaries on the matter. If we still consider ourselves bound to maintain that the officer concerned in the Arabic case was only obeying orders, we can never hope to come to an agreement, for no one can possibly feel any confidence in the sincerity of our intentions. In the meantime I shall try to reach a settlement on the matters now in dispute by means of arbitration. Finally, the question of compensation must, in accordance with my instructions for the Lusitania case, be referred to the Hague Tribunal.
"I am quite certain that if we fail to reach an agreement, severance of diplomatic relations cannot but follow.
"Lansing will not reply to the Arabic memorandum, and, as I said before, will conduct the diplomatic exchanges on this matter only through me. He considers this as the only possible course on the ground that Wilson and I are alike committed to the policy of 'the freedom of the seas.'
"Finally, I may observe that everyone here would be much gratified if we could see our way to extend the scope of our latest instructions to our submarines so as to include all merchant shipping. It is argued that these vessels are slow moving and could easily be warned; the advantage of acting without warning is only of importance in the case of swift passenger ships, which we have, none the less, undertaken not to attack without notice. The suggested proposal, therefore, could not harm us; it would, on the other hand, make us very popular here and give the United States a very strong position in her negotiations with England. Of course, I may be able to effect an agreement without this. The main point in dispute is the verdict on the action of the commander in the Arabic case, because this involves the whole question of our good faith. Anyway, there is no doubt whatever that a second Arabic case is bound to result in war."
(2) Cipher Telegram
"Cedarhurst, September 22nd, 1915.
"As position is still very difficult, I am carrying on conversations in strict confidence through personal friend of Wilson's. Request, therefore, that no directions be sent as regards question of responsibility for Arabic incident, till your Excellency hears again from me. Lansing at present gone on leave. Personally I do not believe that I shall manage to secure International Commission of Inquiry. According to present view, main point of dispute is question of disavowing action of submarine commander. I hope, however, that after reviewing American evidence, your Excellency will be able to find formula for such disavowal, agreeable to both Governments, especially if I can get concurrence of Wilson before press gets hold of it. Request, therefore, that American correspondents in Germany be told nothing more than that American evidence being carefully gone into in Berlin."
(3) Cipher Report
"Cedarhurst, September 28th, 1915.
"The negotiations about the submarine campaign are at a standstill at present. From the fact that Lansing has not been recalled from leave and that President Wilson does not seem over-eager to give an opinion on the proposals which I have put forward for his consideration, I consider myself justified in concluding that the Americans do not consider the situation to be any longer critical. Even the Press is no longer agitated, as in all recent cases of attack by German submarines. Their commanders have acted quite in accordance with our assurances. Under these circumstances Mr. Wilson may possibly fall in with our proposal that the particular case of the Arabic should be dealt with by an International Commission of Inquiry. In any case, some means must be found of finishing once for all with the Arabic and Lusitania incidents; only then shall we be in a position to see whether President Wilson will keep his word, and take energetic measures vis à vis England.
"The Anglo-French Loan Commission, assisted by their agency, the Morgan group, are working at high pressure. Stories of Allied victories in Europe are sedulously spread abroad in order to enlist the support of public opinion. Despite these efforts the commission found Chicago so invincibly hostile that they were compelled to proceed there in person, but they will probably, in any case, manage to raise a loan, as the Morgan group are quite strong enough for the purpose. The rate of interest they are demanding is very high, as up till now they have financed all English purchases here. By these means, they are, no doubt, making considerable profits, but in order to secure them, they will, of course consolidate their floating debt and unload it on to the public. The only question is to what extent they will be able to do this. Opinion varies as to the size of England's present debt; a prominent banker here, in close touch with the Morgan group, estimated the total to 500,000,000 dollars; if this estimate is correct, a loan of 500,000,000 dollars would only just cover the liabilities hitherto existing.
"The Morgan group certainly had to make two great concessions: first, that the proceeds of the new loan shall not be employed for the purchase of munitions, and second, that Russia shall be excluded from the loan; only by these means could they overcome the opposition of the German-Americans and the Jews. Our Jewish friends here are in no easy position. Their action, or rather inaction, takes the form of what is commonly known as 'egg-dancing,' or 'pussyfooting'; they wish to stand well with all sides, but have not the courage of their convictions, and are very anxious to make money. All this is very easily understood, when one remembers the ambiguous position of these gentlemen. A regular devil's dance around the 'Golden calf' is now going on here. All the European Governments are coming to buy in the American market, and usually paying double for their goods, as they only purchase what they urgently need. One lesson we may learn for future reference from the present state of affairs, and that is that we must not allow ourselves again to be left to the tender mercies of the German-Jew bankers here. After the war, we must have branches of our large banks in New York just as we have in London. All evidence goes to show that New York will then be the center of world-finance, and we should, therefore, take all steps to act on this assumption as soon as possible."
The Foreign Office in Berlin, who naturally wished to avoid a rupture with the United States, accordingly dispatched to me the following telegraphic instructions:
"We have no doubt that in this instance submarine commander believed Arabic intended to ram and had every reason for such belief. However, German Government prepared to give credence to sworn evidence of English officers of Arabic and agree that in reality no such intention existed.
"Attack of submarine thus was unfortunately not in accordance with instructions; communication to this effect will be made to commander. German Government is for sake of final settlement by friendly agreement prepared without admission of responsibility from point of view of international law, to give indemnification for death of American citizens. Your Excellency is empowered to notify American Government of above, and to negotiate with them in case of acceptance concerning amount of compensation, subject to our concurrence. Confidently expect that incident will thus be finally liquidated, as above is limit of possible concessions."
"The American Government during verbal negotiations with me on this matter considered it essential that a phrase expressing Germany's disapproval of the commander's action should be incorporated in the explanation which I proposed to publish. I was not sure whether I was really authorized by the above instructions to comply with this condition, but in view of the fact that it was the only hope of avoiding a breach and further delay in the negotiations would profit us nothing, as we were bound to make some sort of reply to the American demand within a certain definite time, I acted once more on my own responsibility and gave the following explanation to Mr. Lansing:
"The Government of his Majesty the Kaiser, in its orders with which I previously made you acquainted, has so framed its instructions to its submarine commanders as to avoid any repetition of incidents such as that of the Arabic. According to the report of the officer who sank the Arabic and his sworn evidence, together with that of his crew, this commander believed that the Arabic intended to ram the submarine. On the other hand, the Imperial Government does not desire to call in question the good faith of the English officers of the Arabic, who have given evidence on oath that the Arabic had no intention of ramming. The action of the submarine was therefore contrary to orders, and the Imperial Government both disapproves of it and regrets it. A communication to this effect has been made to the officer in question. Under these circumstances my Government is prepared to give compensation for the lives of American subjects drowned, to their great regret, in the Arabic. I am empowered to discuss with you the amount of this compensation."
The above explanation finally resolved the second crisis. The German naval authorities naturally complained of my action, as the "disapproval" stuck in their throats, and I was once more taken to task – a matter which weighed little with me. For I felt that my interpretation of the instructions from the Foreign Office was the only one which could have saved us from war, and that now the road was open for the final settlement of the Lusitania incident and the discussion of the great question of "the freedom of the seas." The outlook for us was most promising. Opinion in America as a result of the solution of the Arabic question was once more favorable to us. A leading American paper, the New York Sun, said at this time in its leading article:
"The successful issue of the conversations with Germany over the submarine campaign cannot fail to be of benefit to an nations, as a proof of the possibilities of diplomacy as against war. It has been a personal triumph for both the participants, President Wilson and Count Bernstorff."
The position of both men has been much strengthened thereby, and what they have already achieved is no doubt only a presage of still greater results in the future.
The following four reports to the Foreign Office deal with the settlement of the Arabic case:
(1) Cipher
"Cedarhurst, October 6th, 1915.
"The settlement of the Arabic case reported to your Excellency in my wire, has caused great satisfaction in all circles here. Of course a few avowedly Anglophile papers, such as the New York Herald and the New York Tribune, reveal the cloven hoof, and are clearly disappointed that a rupture of diplomatic relations between America and Germany has been averted; for the rest, at no time since the outbreak of war have we had such a good Press as at this moment.
"History alone will be in a position to say whether the settlement of the Arabic case really prevented a war with the United States or not; but your Excellency knows my views that without this settlement a conflict must eventually have become inevitable. I respectfully submit that the preservation of peace alone was a sufficient motive to induce us to come to terms; but you also know that this was by no means my sole object. I wished also to induce the Government of the United States to take energetic proceedings against England, with the object of translating into fact its idea of the freedom of the seas. I trust we shall not be disappointed in this regard, and I shall, certainly, leave no stone unturned to keep Mr. Wilson on the right path. Whatever may be one's personal opinion of the President, whether one believes him to be really neutrally-minded, or not, his great services to the cause of peace cannot be denied. A Republican President would certainly not have stood up, as he has done, against the united forces of anti-Germanism represented by Wall Street, the Press, and so-called Society.
"At the present moment it looks as if the American Government are ready to let the Lusitania matter drop altogether, provided we agree to refer the question of compensation to the Hague Tribunal after the war. The general belief here is that judicial proceedings are out of the question during the continuance of hostilities. At least I gather as much, indirectly, of course, from one of the President's friends."
(2) Cipher
"Cedarhurst, October 15th, 1915.
"I much regret that owing to a mistake on the part of the State Department, your Excellency was not earlier informed of the settlement of the submarine question. Mr. Lansing left my letter, which should have accompanied the telegram, in his writing-table by mistake, for which oversight he afterwards apologized to me. The Imperial Embassy was in no way to blame.
"The importance attached by the President, from the very first, to those main points on which we were unable to make concessions rendered the task of arriving at an agreement by no means an easy one. Thus on three of the most important points no agreement has been reached and over these we must, for the present, draw the veil. Only a few of the most rabid of the pro-English papers venture openly to reproach President Wilson with having achieved nothing but the security of passenger-ships, but all Americans are prepared to admit in confidence that the Government has completely departed from its original position.
"The three important questions still in dispute, as mentioned above, are the following:
"(1) The German Government's responsibility for American lives lost in the torpedoing of British Ships.
"(2) The responsibility for the payment of compensation for the American lives so lost.
"(3) The American demand that all merchant ships should be warned by our submarines before being attacked.
"This demand was at first so worded as to imply that submarines, like other warships, had only the right of search.
"The Government, realizing that we could not make concessions on the above three points, had to be content with our admission that the case of the Arabic should be regarded as exceptional. This very fast rendered it impossible to reach a similar settlement in the case of the Lusitania, in which no error on the part of the submarine commander concerned could be adduced. However, the Government seemed to be only too satisfied to have come so well out of their difficulties, and have no wish to raise any further obstacles because of the Lusitania incident. This matter, as I have already had the honor to report, may now well be left to drag on indefinitely, and can be referred in the end to the Hague Tribunal after the war. Our Press should, therefore, be warned that further discussion of the controversy between Germany and America over the submarine campaign is undesirable."
(3) Cipher
"Cedarhurst, October 20th, 1915.
"Your Excellency's last wireless requested me to render a report on the settlement of the Arabic question. I have already complied with these instructions, and the documents are now on their way to you, and should have reached you. However, it may be advisable to explain briefly the more important points of the matter.
"From the date of the sinking of the Lusitania, America has always been on the verge of breaking off diplomatic relations with us. The German people, I am convinced, have no idea of the full danger of the situation, at least, if one may judge from our Press. On two occasions we were compelled to sacrifice individuals in order to avoid a breach, Dernburg and Dumba being our scapegoats. Their mistakes would under normal circumstances have been overlooked, but their removal was at the time necessary in order to give the American Government the opportunity of showing its strength without breaking off diplomatic relations with us.
"As I have more than once explained in my reports, no solution of the Lusitania question, agreeable to the Americans, could be found, so long as we were not prepared to admit the responsibility of the Imperial Government for the disaster, or its obligation to make reparation, and so long as our views on the principles of submarine warfare differed from those held by the American Government.
"By dint of drawing out the negotiations as long as possible, and by the employment of all my persuasive powers, I succeeded in tiding over the moment of acute tension. Then came the incident of the Arabic. My laboriously constructed diplomatic edifice came tumbling about my ears, and things looked blacker than ever. The American Government regarded the Arabic incident most seriously, believing as they did that it was typical of the whole German policy vis-à-vis America. They argued that either the whole affair had been prearranged as a manifestation of our intention to have our own way in the matter of submarine warfare, or else it was a blunder which could be dealt with in the ordinary course of diplomacy. Negotiation became possible when your Excellency notified this Government that satisfaction would be given in the event of the submarine commander being proved to have acted contrary to his instructions. Further negotiations followed on this basis, and it was finally agreed that we should admit the exceptional nature of the Arabic case, without yielding our ground on the main points. Such agreement would have been impossible had President Wilson adhered to his previous position, but he wished to have done with the whole business, and could only do so by throwing dust in the eyes of the American public. He hoped by these means to get rid of the Lusitania incident unostentatiously, and told me, through one of his personal friends, 'to let it drift.' The idea at the back of his mind is that it shall be left to an international tribunal sitting after the war, to decide whether we shall pay compensation or not.
"The only really important question as regards the settlement of the Arabic case, is whether it is worth while for us to risk a rupture of relations with the United States, for the sake of this affair. I still persist in my opinion, that it would infallibly have led us into a new war."
(4) Cipher
"Washington, 1st November, 1915.
"Your Excellency's last wire on the matter of the submarine campaign raises two points of the highest importance.
"First, as to Wilson's policy of the 'freedom of the seas;' this has been the idea underlying all our recent negotiations over the submarine warfare. Our agreement with this policy has been constantly emphasized in all my conversations with leading men here; but it is of course necessary carefully to choose our moment for the public declaration of our agreement with Wilson's point of view, as people here naturally fear that if England believes us to be behind any agitation for the freedom of the seas she will resist it all the more firmly. I respectfully recommend, therefore, that we should leave Mr. Wilson to carry on his present controversy with England, for the present at all events, unaided. We shall lose nothing by so doing, and if an opportunity comes for our participation, we can make use of it.
"After this expression of opinion, let me pass on to the second point I have always clearly stated here, that we reserve to ourselves full liberty of decision, if England refuses to receive our advances. At present, now that the Arabic case has been recognized as exceptional, this 'freedom' is only being encroached upon from one direction as we have undertaken not to sink passenger ships without warning, etc. By this undertaking we must abide, unless we wish to go to war with the United States of America. Any future destruction of passenger ships with Americans on board, especially if such took place without warning, and with the approval of the Imperial Government, would inevitably cause a rupture."
The political sky in the United States was thus becoming more propitious day by day; but our enemies' exertions for the purpose of undermining the present friendly relations, redoubled in proportion. The German Embassy became the chief object of attack, owing to the fact being clearly realized by our foes, that so long as its influence in Washington political circles remained unimpaired, no rupture of diplomatic relations could be hoped for. Entente diplomacy left no stone unturned which could be of service against us; lies, robbery, personal defamation, gossip, were all used to discredit us.
The conduct of a British officer on duty in Washington affords a good example of the unscrupulous policy of our foes. According to the evidence of Dr. Fuehr, this gentleman, now holding a high position in London, attempted in the early months of 1916 to corrupt a messenger of our Press Bureau in New York, one Alfred Hoff, whose daily duty it was to take newspaper cuttings to Councillor Albert's office. Two of his people stopped this boy in the street and invited him to the British Consular offices; here he was received by the Captain himself, who showed him a bag filled with bank notes and promised him a liberal reward, if he would undertake to obtain some letters from Dr. Fuehr's desk. Hoff pretended to fall in with this suggestion, but at once informed his employer of the incident. The Captain then made a second effort to bribe Hoff by the promise of a money reward for every document from the Press Bureau, and also a ride in a motor for the letters which it was his duty to take from the Bureau to the German Embassy at Cedarhurst, during the coming summer. One of the British agents told Hoff that he would be well paid if he handed over the letters of Dr. Fuehr, which he often used to seal and frank, and also certain other documents of a specially confidential nature. Dr. Fuehr finally put an end to this unsavory episode, which had been fully investigated by private detectives, by publishing a detailed account of the whole affair in the Hearst papers. At the same time he brought the matter before the Public Prosecutor, who, however, was unwilling to interfere in the matter unless it should be further discussed in the Press. This limited comprehension of duty Dr. Fuehr could hardly be expected to agree with.
During my encounters at this time with the Entente, I entirely lost any respect I may previously have felt for their moral character, which was reputed to be so high. I came then to realize that we could expect nothing better from them in the hour of our defeat, than a Peace of Versailles, which would make of no account all their earlier loftier professions. We, in Washington, were therefore, in duty bound, to strain every nerve to avert such a catastrophe to our country. Unfortunately the activities of the agents dispatched from home invariably deranged our plans in a most unfortunate manner, and, while affording our foes the desired opportunities for damaging our cause, achieved nothing of advantage in compensation. The English Secret Police, and all the detective agencies of the United States which were in their pay, were always at our heels, endeavoring to establish some collusion on the part of the German Embassy in these isolated cases of sabotage. However, all this subterranean plotting and counter-plotting was but so much lost labor. It was the decision on the policy of continuing or not continuing the submarine campaign which finally turned the scale.