that our peace terms were moderate,
and that we agreed to second Peace Conference, President thought he
had given expression to our wishes in his appeal to the Senate.

"Wilson hopes that we shall communicate our peace terms to him,
which might be published both in Germany and over here, so that
they could become known immediately all over the world. If only
we had confidence in him, President was convinced that he would be
able to bring about both Peace Conferences. He would be particularly
pleased if Your Excellency were at the same time to declare that we
are prepared to enter the second Peace Conference on the basis of
his appeal. Our declaration might be shown to have been actuated
by Wilson's having sent us a direct request for our peace terms.
President is of opinion that Note sent to him by the Entente was a
piece of bluff which need not be taken seriously. He hopes definitely
to bring about Peace Conferences, and quickly too, so that the
unnecessary bloodshed of the Spring Offensive may be averted.

"To what extent Your Excellency will and can meet Wilson, it is
impossible to tell from this side. Meanwhile I urgently beg leave,
to submit the following remarks for your consideration. If the U-boat
campaign is opened now without any further ado, the President will
regard this as a smack in the face, and war with the United States
will be inevitable. The war party here will gain the upper hand, and
the end of the war will be quite out of sight, as, whatever people
may say to the contrary, the resources of the United States are
enormous. On the other hand, if we acquiesce in Wilson's proposal,
but the scheme nevertheless comes to grief owing to the stubbornness
of our enemies, it would be very hard for the President to come into
the war against us, even if by that time we began our unrestricted
U-boat war. At present, therefore it is only a matter of postponing the
declaration for a little while so that we may improve our diplomatic
position. For my own part, I confess that I am of opinion that we
shall obtain a better peace now by means of conferences, than we
should if the United States joined the ranks of our enemies.

"As cables always take several days, please send instructions by
wireless, in case telegraphic privileges 157 cannot be used on
February 1st."

I had hoped that the communication of the President's appeal through
Mr. Gerard, would have led to a postponement of the unrestricted
U-boat war. T