The economic rivalry and all that do not give much offence to our people, and they admire (Germany's) steady industry and genius for organization. But they do resent mischief making. They suspect the Emperor of aggressive plans of Weltpolitik, and they see that Germany is forcing the pace in armaments in order to dominate Europe and is thereby laying a horrible burden of wasteful expenditure upon all the other powers.

Germany is a young and growing empire. She has a world-wide commerce which is rapidly expanding and to which the legitimate ambition of patriotic Germans refuses to assign any bounds. Germany must have a powerful fleet to protect that commerce and her manifold interests in even the most distant seas. She expects those interests to go on growing, and she must be able to champion them manfully in any quarter of the globe. Her horizons stretch far away. She must be prepared for any eventualities in the Far East. Who can foresee what may take place in the Pacific in the days to come, days not so distant as some believe, but days at any rate, for which all European powers with Far Eastern interests ought steadily to prepare?

Look at the accomplished rise of Japan; think of the possible national awakening of China; and then judge of the vast problems of the Pacific. Only those powers that have great navies will be listened to with respect when the future of the Pacific comes to be solved; and if for that reason only, Germany must have a powerful fleet. It may even be that England herself will be glad that Germany has a fleet when they speak together on the same side in the great debates of the future.

The German Emperor is ageing me; he is like a battleship with steam up and screws going, but with no rudder, and he will run into something some day and cause a catastrophe. He has the strongest army in the world and the Germans don't like being laughed at and are looking for somebody on whom to vent their temper and use their strength. After a big war a nation doesn't want another for a generation or more. Now it is 38 years since Germany had her last war, and she is very strong and very restless, like a person whose boots are too small for him. I don't think there will be war at present, but it will be difficult to keep the peace of Europe for another five years.

As they both continued to press me to declare our complete solidarity with them, I said that I thought you might be prepared to represent strongly at Vienna and Berlin danger to European peace of an Austrian attack on Serbia. You might perhaps point out that it would in all probability force Russia to intervene, that this would bring Germany and France into the field, and that if war became general, it would be difficult for England to remain neutral. Minister for Foreign Affairs said that he hoped that we would in any case express strong reprobation of Austria's action. If war did break out, we would sooner or later be dragged into it, but if we did not make common cause with France and Russia from the outset we should have rendered war more likely.

I am afraid that the real difficulty to be overcome will be found in the question of mobilization. Austria is already mobilizing. This, if the war does come, is a serious menace to Russia, who cannot be expected to delay her own mobilization which, as it is, can only become effective in something like double the time required by Austria and Germany. If Russia mobilizes, we have been warned that Germany will do the same, and as German mobilization is directed almost entirely against France, the latter cannot possibly delay her own mobilization even for the fraction of a day. This however means that within 24 hours His Majesty's Government will be faced with the question whether, in a quarrel so imposed by Austria on an unwilling France, Great Britain will stand idly aside, or take sides.

1. A conviction that a great European war under modem conditions would be a catastrophe for which previous wars afforded no precedent. In old days nations could collect only portions of their men and resources at a time and dribble them out by degrees. Under modern conditions whole nations could be mobilized at once and their whole life-blood and resources poured out in a torrent. Instead of a few hundreds of thousands of men meeting each other in war, millions would now meet, and modern weapons would multiply manifold the power of destruction. The financial strain and the expenditure of wealth would be incredible. I thought this must be obvious to everyone else, as it seemed obvious to me ; and that, if once it became apparent that we were on the edge, all the Great Powers would call a halt and recoil from the abyss.

2. That Germany was so immensely strong and Austria so dependent upon German strength that the word and will of Germany would at the critical moment be decisive with Austria. It was therefore to Germany that we must address ourselves.

3. That, if war came, the interest of Britain required that we should not stand aside, while France fought alone in the West, but must support her. I knew it to be very doubtful whether the Cabinet, Parliament, and the country would take this view on the outbreak of war, and through the whole of this week I had in view the probable contingency that we should not decide at the critical moment to support France. In that event I should have to resign; but the decision of the country could not be forced, and the contingency might not arise, and meanwhile I must go on.

I said to the German Ambassador that, as long as there was only a dispute between Austria and Serbia alone, I did not feel entitled to intervene; but that, directly it was a matter between Austria and Russia, it became a question of the peace of Europe, which concerned us all. I had furthermore spoken on the assumption that Russia would mobilize, whereas the assumption of the German Government had hitherto been, officially, that Serbia would receive no support; and what I had said must influence the German Government to take the matter seriously. In effect, I was asking that if Russia mobilized against Austria, the German Government, who had been supporting the Austrian demand on Serbia, should ask Austria to consider some modification of her demands, under the threat of Russian mobilization. This was not an easy thing for Germany to do, even though we should join at the same time in asking Russia to suspend action. I was afraid, too, that Germany would reply that mobilization with her was a question of hours, whereas with Russia it was a question of days; and that, as a matter of fact, I had asked that, if Russia mobilized against Austria, Germany, instead of mobilizing against Russia, should suspend mobilization and join with us in intervention with Austria, thereby throwing away the advantage of time, for, if the diplomatic intervention failed, Russia would meanwhile have gained time for her mobilization. It was true that I had not said anything directly as to whether we would take any part or not if there was a European conflict, and I could not say so; but there was absolutely nothing for Russia to complain of in the suggestion that I had made to the German Government and I was only afraid that there might be difficulty in its acceptance by the German Government. I had made it on my own responsibility, and I had no doubt it was the best proposal to make in the interests of peace.

His Majesty's Government cannot for one moment entertain the Chancellor's proposal that they should bind themselves to neutrality on such terms. What he asks us in effect is to engage and stand by while French colonies are taken and France is beaten, so long as Germany does not take French territory as distinct from the colonies. From the material point of view the proposal is unacceptable, for France, without further territory in Europe being taken from her, could be so crushed as to lose her position as a Great Power, and become subordinate to German policy. Altogether apart from that, it would be a disgrace to us to make this bargain with Germany at the expense of France, a disgrace from which the good name of this country would never recover. The Chancellor also in effect asks us to bargain away whatever obligation or interest we have as regards the neutrality of Belgium. We could not entertain that bargain either.

I was asked to call upon the Chancellor tonight. His Excellency had just returned from Potsdam. He said that, should Austria be attacked by Russia, a European conflagration might, he feared, become inevitable, owing to Germany's obligations as Austria's Ally, in spite of his continued efforts to maintain peace. He then proceeded to make the following strong bid for British neutrality. He said that it was clear, so far as he was able to judge the main principle which governed British policy, that Great Britain would never stand by and allow France to be crushed in any conflict there might be. That, however, was not the object at which Germany aimed. Provided that neutrality of Great Britain were certain, every assurance would be given to the British Government that the Imperial Government aimed at no territorial acquisition at the expense of France, should they prove victorious in any war that might ensue.

His Excellency ended by saying that ever since he had been Chancellor the object of his policy had been, as you were aware, to bring about an understanding with England; he trusted that these assurances might form the basis of that understanding which he so much desired. He had in mind a general neutrality agreement between England and Germany, though it was of course at the present moment too early to discuss details, and an assurance of British neutrality in the conflict which present crisis might possibly produce would enable him to look forward to realization of his desire.

His Majesty's Government cannot for a moment entertain the Chancellor's proposal that they should bind themselves to neutrality on such terms.

What he asks us, in effect, is to engage to stand by while French colonies are taken and France is beaten so long as Germany does not take French territory as distinct from the colonies.

From the material point of view such a proposal is unacceptable, for France, without further territory in Europe being taken from her, could be so crushed as to lose her position as a Great Power, and become subordinate to German policy.

Altogether apart from that, it would be a disgrace for us to make this bargain with Germany at the expense of France - a disgrace from which the good name of this country would never recover.

The Chancellor also, in effect, asks us to bargain away whatever obligation or interest we have as regards the neutrality of Belgium. We could not entertain that bargain either.

Having said so much, it is unnecessary to examine whether the prospect of a future general neutrality agreement between England and Germany offered positive advantages sufficient to compensate us for tying our hands now. We must preserve our full freedom to act as circumstances may seem to us to require in any such unfavourable and regrettable development of the present crisis as the Chancellor contemplates.

I really felt angry with von Bethmann-Hollweg and von Jagow. They had given us to understand that they had not seen the terms of the Austrian ultimatum to Serbia before it was sent; they had been critical of it when they saw it. Von Jagow had said that, as a diplomatic document, it left something to be desired, and contained some demands that Serbia could not comply with. By their own admission they had allowed their weaker Ally to handle a situation on which the peace of Europe might depend, without asking beforehand what she was going to say and without apparently lifting a finger to moderate her, when she had delivered an ultimatum of the terms of which they did not entirely approve. Now they vetoed the only certain means of peaceful settlement without, as far as I knew, even referring it to Austria at all. The complacency with which they had let Austria launch the ultimatum on Serbia was deplorable, and to me unaccountable; the blocking of a Conference was still worse.

Among the acquaintances I made at this time was Baroness von Schroeder, wife of a Junker nobleman of wealth and station. She was known as "the American Baroness," though she was a native of Canada. She was tall, had sloping shoulders, an upturned nose, wide-apart bright blue eves, a retreating chin, and a flair for politics. She was a socialite supporting the moderate von Bethmann-Hollweg against army extremists. She gave dinners to which the Chancellor and his friends were pleased to come. She repeatedly told me that von Bethmann was a moderate, opposed to any annexations after the war. I said that if that were true, he should tell me and let me repeat it to Sir Edward Grey, for the British certainly had a different view of him. And that was precisely what she brought to pass.

I was received by the Chancellor in the somber palace where his office was situated. I was invited to sit in the ample chair at the side of his huge desk, and there I was told, without any preliminary conversation, just what I was to repeat to Sir Edward Grey. Germany would not annex any Belgian territory after the war and would guarantee Belgium's independence. But he added a fateful phrase. I also was to tell Sir Edward that Germany would want an indemnity for having been forced into the war.

Herr von Bethmann-Hollweg may have noted my disappointment at hearing this. "Can I trust you?" he asked. "Not a word of this must be published in the newspapers. You understand that?" "Of course," I said. "And you are able to deliver the message to Sir Edward Grey in person, for it must go to no one else in London." I said I was confident the London office of my newspaper could assure this. "Then come back and tell me what he says." The Chancellor, a tall figure of a man, with gaunt cheeks above his short beard, rose from his desk. "I must caution you again," he said, "not a word of this in the newspapers. If it is published, I shall have to say I never said it." I repeated that I understood, and he held out his hand gravely.

My mind raced with dissociated ideas. I realized that I was in the office of Bismarck and von Bulow, where the modern German empire had been blueprinted, and that here the issue of the European war and the European peace was to be shaped. I was astonished to be there, and that I should be there undertaking to bear a message to London. I also was disconcerted by the sentence about an indemnity. I knew it made the mission to Sir Edward Grey futile.

I so confessed to Baroness von Schroeder, to whom I at once reported. "Don't be so stupid," she said. "The Chancellor was simply protecting himself. He has to do that. If the army hears he has been talking peace with Sir Edward Grey, he can point to the demand for an indemnity. After all, he has to take precautions. This is a risky step for him. Sir Edward need only say that an indemnity is out of the question, but that he is interested in the proposal about Belgium. He will be smart enough to see why the indemnity has to be mentioned."

This reassured me. That night I was on the train for Holland and a day later walked into the London office of the Chicago Daily News. Edward Price Bell, who was in charge, was astonished, but when I told him why I had come, he lifted the telephone and it was at once arranged that I should be received by Sir Edward Grey late that afternoon. It was faster work than would have been possible in Berlin.

I had little firsthand knowledge of the British at that time. I knew how the Germans regarded them, Sir Edward Grey in particular. He was considered the arch-conspirator, the passionless builder of Germany's ring of enemies, and especially dangerous because of his ability to speak hypocritically about moral virtues - while acting in farsighted national interest. The Sir Edward Grey I met was a revelation. He had the personal appearance of a shaggy ascetic. He was tall, erect, slender, with thin but untidy hair. His clothes were not well pressed. At the time, I knew nothing about Sir Edward Grey, the naturalist, of the breed of Englishmen he represented -sensitive, shy, and complex - or that he was one of the best-educated men in the world.

I delivered my message from Herr von Bethmann-Hollweg and ended with the instructions I had received to return to him and repeat what Sir Edward had to say in reply. Sir Edward's face turned crimson when I spoke the word "indemnity." I thought of Baroness von Schroeder's explanation of it and almost blurted it out. But Sir Edward gave me no time to blurt out anything. He ignored what I said about no annexations in Belgium and Belgian independence. He struck at the word "indemnity" with a kind of high moral fury, and launched into one of the finest speeches I had heard. Did not Herr von Bethmann-Holhweg know what must come from the war? It must be a world of international law where treaties were observed, where men welcomed conferences and did not scheme for war. I was to tell Herr von Bethmann-Holhveg that his suggestion of an indemnity was an insult and that Great Britain was fighting for a new basis for foreign relations, a new international morality.

Whether I might have saved something from this interview and the efforts behind it is a question I still am not able to answer. If I had been ten years older, I should have asked Sir Edward to let me tell him a little about the political situation in Berlin, and in doing so would have explained that the mention of an indemnity had undoubtedly been a kind of escape clause for the Chancellor, in the event that the army learned that he was talking about peace with the British Foreign Secretary, through an American intermediary. I should have impressed upon Sir Edward that the message in which the Chancellor was interested was the pledge of no annexations and the guarantee of Belgian independence after the war. I should have pointed out that Sir Edward had it in his power to encourage quietly the moderates in the German guvornrnent, but that a blank refusal even to give one word on the promise about Belgium might weaken, not strengthen, the very influences he must wish to see reinforced. I said none of these of these things and should have said all of them. But I am not sure that if I had it would have made any difference. Sir Edward's whole case for going to war rested on the German violation of the guaranteed neutrality of Belgium. A promise not to violate it further or again would not have impressed him. Sir Edward, in his memoirs, wrote that early in the war an American correspondent had come from the German Chancellor with a message that Germany would expect an indemnity for having been forced into the war, and did not even mention the promise against annexation and the guarantee of Belgian independence. That was all he remembered from my visit. If I had carried out my mission with more sophistication, perhaps he would have remembered the real purpose of it.

When I returned to Berlin, I was again received by Chancellor von Bethmann-Hollweg and repeated to him what Sir Edward Grey had said. He listened without comment, then thanked me for my report. He could not have been surprised. His government had made a public promise of no annexations with no effect on the British. I do not believe it dawned on him that everything Sir Edward had said was stirred by the sinister word "indemnity," which he himself had used. And I am sure that Baroness von Schroeder was able to solace him at the next dinner he attended at her house on the ground that my visit had demonstrated that he alone was a man of peace.

Even then (after the letter sent to Chancellor Bethmann Hollweg on 30th July 1914) Sir Edward Grey did not abandon his role as peacemaker. In the same carefully-guarded letter he held out a promise that if the peace of Europe could be preserved, and the present crisis passed, he would do his utmost to promote some new scheme - hitherto too Utopian to form the subject of definite proposals - by which Germany could be assured that no aggressive policy would be pursued against her or her allies by the Triple Entente, severally or collectively. The Foreign Secretary went further than this on the following day, when he promised the German Ambassador that if Germany would only put forward some reasonable proposal for settling the existing differences, he would not only support it both at St. Petersburg and Paris, but go the length of saying that if Russia and France declined to accept it, Great Britain would have nothing more to do with the consequences.

The issue for us is that, if Germany wins, she will dominate France; the independence of Belgium, Holland, Denmark, and perhaps of Norway and Sweden, will be a mere shadow; their separate existence as nations will be fiction; all their harbours will be at Germany's disposal; she will dominate the whole of Western Europe, and this will make our position quite impossible. We could not exist as a first class State under such circumstances.

There is something more which I think any far-seeing English statesman must have long desired, and that is that we should not remain permanently isolated on the continent of Europe, and I think that the moment that aspiration was formed it must have appeared evident to everybody that the natural alliance is between ourselves and the great German Empire.

I cannot conceive any point which can arise in the immediate future which would bring ourselves and the Germans into antagonism of interests. On the contrary, I can see many things which must be a cause of anxiety to the statesmen of Europe, but in which our interests are clearly the same as the interests of Germany and in which that understanding of which I have spoken in the case of America might, if extended to Germany, do more, perhaps, than any combination of arms in order to preserve the peace of the world.

If the union between England and America is a powerful factor in the cause of peace, a new Triple Alliance between the Teutonic race and the two branches of the Anglo-Saxon race will be a still more potent influence in the future of the world. I have used the word 'alliance', but again I desire to make it clear that to me it seems to matter little whether you have an alliance which is committed to paper, or whether you have an understanding in the minds of the statesmen of the respective countries. An understanding is perhaps better than an alliance, which may stereotype arrangements which cannot be regarded as permanent in view of the changing circumstances from day to day.