e transport
of munitions, and so making clear to the Entente the futility of
their efforts in this area.

"The whole situation would change if President Wilson, following
out the plans he has already indicated, were to make an offer of
mediation to the Powers. This would, of course, not have to include
any definite proposals of a territorial nature, as these questions
should form part of the agenda of the peace negotiations. Such a
move, however, would have to be made soon, as otherwise we could
not continue to stand calmly aside and watch England, realizing
as she does the many difficulties to be reckoned with, exert with
impunity increasingly strong pressure on the neutrals, with a view
to improving her military and economic position at our expense, and
we should have to claim the renewed liberty of action for which
we stipulated in the Note of the 4th of May of this year. Should
Mr. Wilson insist on waiting until immediately before or after
the election, he would lose the opportunity for such a step. Also
the negotiations should not at first aim at the conclusion of an
armistice, but should be carried on solely by the combatant parties,
and within a short period directly bring about the preliminary
peace. A further prolongation would be unfavorable to Germany's
military situation, and would result in further preparations being
made by the Powers for the continuance of the war into next year, so
that there would be no further prospect of peace within a reasonable
time.

"Your Excellency should discuss the position cautiously with Colonel
House, and find out the intentions of Mr. Wilson. A peace movement
on the part of the President which bore the outward appearance of
spontaneity would be seriously considered by us, and this would
also mean success for Mr. Wilson's election campaign.

"Gerard has applied for leave, as the result of a private letter
from Colonel House, but he has received no reply from the State
Department.

"BETHMANN-HOLLWEG."

The explanation of the final sentence of the above telegram is as
follows. I have already mentioned that Mr. Gerard was not popular in
Berlin, owing to his very highly-strung temperament, his impetuosity
and his want of tact. His recall was eagerly desired. Consequently, I
had received instructions to arrange, if possible, for the replacement
of Mr. Gerard, and in any case that the Ambassador should be recalled
for a time to Washington, so that his nerves might have