erstanding with Mr. Wilson,
if possible without compromising our present point of view; he is
undoubtedly at the moment the most influential man in the country,
and if he is antagonized we shall be powerless against him!"

(3) CIPHER

"Cedarhurst, July 2nd, 1915.

"In spite of the English interference with the American mails reported
here to-day, I hope that the reports dispatched in the ordinary
course of my duty have all reached your Excellency safely. In case
they have not done so, I may report that since my audience with
Mr. Wilson, the removal of the 'agitator' Dernburg, the mission
of Meyer Gerhardt, and the arrival of the Press telegrams from
Berlin giving details of the last-named, things have been pretty
quiet generally; the situation has reverted to the normal, and will
remain normal if our next Note shows a conciliatory disposition.
I might even go further, and say that the _Lusitania_ incident,
taking it all in all, despite the manner in which we dealt with it,
has exercised and will exercise in the future a favorable influence
on our mutual relations. Of course it has brought us into even
greater odium with our avowed enemies; Anglophile 'Society' in New
York, Philadelphia and Boston is infuriated, and the Wall Street
magnates are little better; but these two cliques have always been
inveterate supporters of England. The Government has lost ground
for the first time as a result of the _Lusitania_ incident, and
it now fully realizes the importance of these questions of sea
warfare; whereas when I first spoke in February, March and April
to various exalted personages about the submarine campaign and
kindred matters, no one would listen to me, and the full seriousness
of the situation was quite unrealized. Now, however, 'the freedom
of the seas' has become the test question of American politics.
Every preparation has been made to take energetic measures with
regard to England if our answer to the last American Note renders
further negotiations possible. Even the New York Press has become
more reasonable, and capable of discussing war questions impartially;
and this was notably the case over the torpedoing of the _Armenian_.
In a word, at no time since the outbreak of war have the omens
been so favorable for a rational policy on the part of America."

"Cedarhurst, July 22nd, 1915.

"If we ask what have-been the results of our eleven weeks' negotiations
over the _Lusitania_ incident, and which invol