iew of reprisals
we were entirely justified in attacking the _Lusitania_. In so
doing, however, we had no intention of taking American lives, and
deeply regret that through a combination of unfortunate circumstances
this has actually occurred. If any distress still exists among the
survivors of the disaster, we should be quite prepared to leave the
amount of financial compensation to be decided by a later agreement.

"(2) We propose in the future course of the submarine campaign to
abide by the practice recently adopted. As things stand at present,
the arrangement is that no liner is to be torpedoed without warning.

"(3) We should be prepared to support to the utmost of our power
the efforts of President Wilson, to insist on the observation of
the dictates of international law during the present conflict,
and leave it to his discretion to enter into conversations to this
end with the British Government. The Declaration of London might
serve as a basis for these conversations, more especially as it
was drawn up at the time by the American Government.

"If we act in accordance with these my respectful recommendations,
the breakdown of the negotiations with England is the worst that
can happen; and then it would be clear for all the world to see
that our enemies were to blame for this breakdown, and Mr. Wilson
would come over to our side. Knowing the President as I do, I have
not the slightest doubt of this."

I gather from the account in Karl Helfferich's "World War," Vol.
II., p. 322, that the Secretary of the Treasury in Berlin was in
favor of this policy, which I held to be the only possible one.
When he stated, as before mentioned, that his proposal had found
no support from the Foreign Office, I was much astonished.

I was instructed to commence negotiations verbally and confidentially
with Mr. Lansing on these lines, and was convinced myself that
these would lead to nothing, so long as we persisted in carrying
on our submarine campaign on the old lines. Policy should be based
on what is possible; now it was not really possible to unite these
two contradictory methods, and to come to an understanding with
the United States over the freedom of the seas, and at the same
time to bring her to agree to the continuation of submarine warfare
on the existing lines. We were bound to decide once for all on the
one policy or the other. I supposed that Berlin had decided for
the former course of action, as I knew that o