proof of checks which have been given to American
citizens for propaganda and spy work.

I know personally of one instance where General Director Heinicken, of
the North German-Lloyd, gave an American in Berlin $1,000 for his
reports on American conditions. The name cannot be mentioned because
there are no records to prove the transaction, although the man
receiving this money came to me and asked me to transmit $250 to his
mother through the United Press office. I refused.

When Zimmermann began to realise that Germany's threatening propaganda
in the United States and Germany's plots against American property were
not succeeding in frightening the United States away from war, he began
to look forward to the event of war. He saw, as most Germans did, that
it would be a long time before the United States could get forces to
Europe in a sufficient number to have a decisive effect upon the war.
He began to plan with the General Staff and the Navy to league Mexico
against America for two purposes. One, Germany figured that a war with
Mexico would keep the United States army and navy busy over here.
Further, Zimmermann often said to callers that if the United States
went to war with Mexico it would not be possible for American factories
to send so much ammunition and so many supplies to the Allies.

German eyes turned to Mexico. As soon as President Wilson recognised
Carranza as President, Germany followed with a formal recognition.
Zubaran Capmany, who had been Mexican representative in Washington, was
sent to Berlin as Carranza's Minister. Immediately upon his arrival
Zimmermann began negotiations with him. Reports of the negotiations
were sent to Washington. The State Department was warned that unless
the United States solved the "Mexican problem" immediately Germany
would prepare to attack us through Mexico. German reservists were
tipped off to be ready to go to Mexico upon a moment's notice. Count
von Bernstorff and the German Consuls in the United States were
instructed, and Bernstorff, who was acting as the general director of
German interests in North and South America, was told to inform the
German officials in the Latin-American countries. At the same time
German financial interests began to purchase banks, farms and mines in
Mexico.

CHAPTER V

THE DOWNFALL OF VON TIRPITZ AND VON FALKENHAYN

After the sinking of the _Arabic_ the German Foreign Office intimated
to the United States Governme