ess on you difficulty of Germany's position
in view of Russian mobilization and military measures which he
hears are being taken in France. Beyond recall of officers on
leave--a measure which had been officially taken after, and not
before, visit of French Ambassador [Jules Cambon]
yesterday--Imperial Government had done nothing special in way of
military preparations. Something, however, would have soon to be
done, for it might be too late, and when they mobilized they
would have to mobilize on three sides. He regretted this, as he
knew France did not desire war, but it would be a military
necessity.

"His excellency added that telegram received from Prince
Lichnowsky last night contains matter which he had heard with
regret, but not exactly with surprise, and at all events he
thoroughly appreciated frankness and loyalty with which you had
spoken.

"He also told me that this telegram had only reached Berlin very
late last night; had it been received earlier chancellor would,
of course, not have spoken to me in the way he had done."

Ambassador Bertie telegraphed from Paris to Grey the report of
Germany's request to Russia to be informed on what conditions Russia
would consent to demobilization.

"The answer given is that she agrees to do so on condition that
Austria-Hungary gives an assurance that she will respect the
sovereignty of Serbia and submit certain of the demands of the
Austrian note, which Serbia has not accepted, to an international
discussion."

SIR EDWARD GREY REFUSES TERMS OF NEUTRALITY

Grey telegraphed to Ambassador Goschen at Berlin in answer to his
telegram of July 29:

"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 wi