Albert Ballin :: CHAPTER X The War

CHAPTER X The War

About the middle of the month of July, 1914, Ballin, when staying at Kissingen for the benefit of his health, received a letter from the Foreign Secretary, Herr v. Jagow, which made him put an immediate end to his holiday and proceed to Berlin. The letter was dated July 15th, and its principal contents were as follows:

The Berliner Tageblatt, it said, had published some information concerning certain Anglo-Russian agreements on naval questions. The Foreign Office did not attach much value to it, because it was at variance with the general assumption that Germany’s relations with Great Britain had undergone a change for the better, and also with the apparent reluctance of British statesmen to tie their country to any such agreements. The matter, however, had been followed up all the same, and through very confidential channels it had been ascertained that the rumours in question were by no means devoid of an actual background of fact. Grey, too, had not denied them point blank at his interview with Lichnowsky. It was quite true that Anglo-Russian negotiations were proceeding on the subject of a naval agreement, and that the Russian Government was anxious to secure as much mutual co-operation between the two countries as possible. A definite understanding had not, so far, been reached, notwithstanding the pressure exercised by Russia. Grey’s attitude had become somewhat uncertain; but it was thought that he would ultimately give his consent, and that he would quieten his own conscience by arguing that the negotiations had not really been conducted between the Cabinets, but between the respective naval authorities. It was also quite likely that the British, who were adepts at the art of making nice distinctions, would be negotiating with the mental reservation that they would refrain from taking an active part when the critical moment arrived, if it suited them not to do so; and a casus foederis would presumably not be provided for in the agreement. At any rate, the effect of the latter would be enormously to strengthen the aggressive tendencies of Russia. If the agreement became perfect, it would be useless for Germany to think any longer of coming to a rapprochement with Great Britain, and therefore it would be a matter of great importance to make a last effort towards counteracting the Russian designs. His (v. Jagow’s) idea was that Ballin, who had intimate relations with numerous Englishmen in leading positions, should send a note of warning across the North Sea. This suggestion was followed up by several hints as to the most suitable form of wording such a note, and the letter concluded with the statement that the matter was one of great urgency. A postscript dated July 16th added that a further article had been published by the Berliner Tageblatt, according to which the informants of the author also took a serious view of the situation.

Ballin, in response to the request contained in the letter, did not content himself with sending a written note to his London friends, but he immediately went to Berlin for the purpose of gaining additional information on the spot, with special reference to the general political outlook. He learned that Austria intended to present a strongly worded note to Serbia, and that it was expected that in reply a counter-note dictated by Russia would be received. He was also told that the Government not only wanted some information regarding the matter which formed the special subject of Herr v. Jagow’s letter, but also regarding the general political situation in London, as it was doubted whether the reports received from the ambassador were sufficiently trustworthy and complete. This was all that Ballin was told. Since then many facts have become known which throw a light on the way in which political questions were dealt with by the Berlin authorities during the critical period preceding the war, and if we, knowing what we know now, read the letter of Herr v. Jagow, we ask ourselves in amazement what was the object of the proposed action in London? Could it be that it was intended to intimidate the British Government? This could hardly be thought possible, so that some other result must have been aimed at. We can only say that the whole affair is still surrounded by much mystery, and we can sympathize with Ballin’s bitter complaints in later days that he thought people had not treated him with as much openness as they should have done, and that they had abused his intimate relations with leading British personages.

Ballin then left Berlin for Hamburg. He gave me his impressions of the state of political affairs—which he did not regard as critical—and went to London, ostensibly on business. In London he met Grey, Haldane, and Churchill, and there also he did not look upon the situation as critical—at least, not at first. When, however, the text of the Austrian note became known on Thursday, July 23rd, and when its full significance had gradually been realized, the political atmosphere became clouded: people asked what was Austria’s real object, and began to fear lest the peace might be disturbed. Nevertheless, Ballin returned from London on July 27th with the impression that a fairly capable German diplomat might even then succeed in bringing about an understanding with Great Britain and France which, by preventing Russia from striking, would result in preserving the peace. Great Britain and the leading British politicians, he said, were absolutely in favour of peace, and the French Government was so much against war that its representatives in London seemed to him to be rather nervous on the subject. They would, he thought, do anything in their power to prevent war. If, however, France was attacked without any provocation on her part, Great Britain would be compelled to come to her assistance. Britain would never allow that we, as was provided for in the old plan of campaign, should march through Belgium. It was quite true that the Austrian note had caused grave anxiety in London, but how earnestly the Cabinet was trying to preserve peace might be gauged by the fact that Churchill, when he took leave of Ballin, implored him, almost with tears in his eyes, not to go to war. These impressions of Ballin are confirmed by the reports of Prince Lichnowsky and other members of the German Embassy in their observations during the critical days.

Apart from these politicians and diplomatists on active service there were other persons of political training, though no longer in office, who did not think at that time that there was an immediate danger of war. In this connexion I should like to add a report of a very remarkable conversation with Count Witte, which took place at Bad Salzschlirf on July 24th. The Count—whose untimely death was greatly regretted—was without any doubt one of the most capable statesmen of his time—perhaps the only one with a touch of genius Europe possessed—and he certainly knew more about the complicated state of things in Russia than any living person. For these reasons his views on the events which form the first stage of the fateful conflict are of special interest. I shall reproduce the report of this conversation exactly as we received it at the time, and as we passed it on to Berlin. The authenticity of the statements of Count Witte as given here is beyond question.

“Yesterday (on July 24th) I paid a visit to Count Witte who was staying at Bad Salzschlirf, and in the course of the day I had several conversations with him, the first of which took place as early as ten o’clock in the morning. After a few words of welcome, and after discussing some matters of general and personal interest, I said to the Count: ‘I should like to thank you for your welcome letter and for your telegram. The question which you raise in them of a meeting between our two emperors appears of such fundamental importance to me that I may perhaps hope to be favoured with some details by you personally.’

“Witte replied: ‘In the first instance I wish to reaffirm what I have repeatedly told you, both verbally and by letter, viz. that I am not in the least anxious to be nominated Russian delegate for the proposed negotiations concerning a commercial treaty between Germany and Russia. Whoever may be appointed from the Russian side will gain no laurels. I think a meeting between the Kaiser and the Tsar some time within the next few weeks would be of very great importance. Have you read the French papers? The tone now assumed by Jules Hedeman is a direct challenge. I know Hedeman, and I also know that he only writes what will please Sasonov, PoincarÉ and PalÉologue (the French ambassador in Petrograd). Now that the Peterhof meeting has taken place the language employed by all the French and Russian papers will become more arrogant than ever. It is quite certain that the Russian diplomatists and their French colleagues will now assume a different tone in their intercourse with the German diplomatists. The rapprochement with Great Britain is making considerable progress, and whether a naval convention exists or not, Great Britain will now side with Russia and France. If even now a meeting could be arranged between the two Emperors, this would be of immense significance. The mischief-makers both in Russia and in France would be made to look small, and public opinion would calm down again.”

“I asked Witte: ‘Do you think, Sergei Yulyevitch, that the Tsar would avail himself of a possible opportunity of meeting the Kaiser?’

“Witte replied: ‘I am firmly convinced of it; I may, indeed, state without hesitation that the Tsar would be delighted to do so. The personal relations between the Tsar and the Kaiser are not of an ordinary kind. They converse with each other in terms of intimate friendship, and each time the Tsar has had a chat with the Kaiser he has been in better spirits. Believe me, if this meeting comes off, the impression which the French visit has left on the Tsar will be entirely wiped out. The effect of the showy reception of the French visitors which the press agitators have not failed to use for their own ends will be obliterated. Such a meeting will express in unambiguous terms that, whatever value the Tsar attaches to the Franco-Russian alliance, he insists on the maintenance of amicable relations with Germany. The meeting will have to be arranged without loss of time, in about four or six weeks, because in two months from now the Tsar will be leaving for Livadia. The army manoeuvres will be held within the next few weeks, and the Tsar will then go to the Finnish skerries where, in my opinion, the meeting might take place without difficulty.’

“I asked Witte: ‘Do you not think that, if the meeting were officially proposed by Germany, it might be looked upon as a sign of weakness on her side, especially in view of the now existing tension between the two countries?’

“Witte replied: ‘By no means. One has always to take into account the fact that the relations between the Tsar and the Kaiser, as I explained before, are in the highest degree friendly and intimate. I do not know how the Kaiser would feel on the subject, but I am convinced that he is possessed of the necessary political sagacity to find the way that will lead to a meeting. He might, e.g., write to the Tsar quite openly that, as the relations between their two countries had lately been somewhat under a cloud in consequence of the inefficient diplomacy of their respective representatives, he would be particularly happy to meet him at this juncture. Or the suggestion might reach the Tsar via the Grand Duke of Hesse and his sister, the Tsarina. But this is immaterial, because the Kaiser is sure to find the right way. I can only repeat that the effect of the meeting would be enormous. The Russian press and Russian society would change their whole attitude, and the agitation in the French press would receive a severe setback.’

“I said to Witte: ‘I shall communicate the gist of our conversation to Mr. Ballin. As it is quite possible that he will be ready to endorse this suggestion, I should like to know your answer to one more question, viz., whether, if Mr. Ballin were to submit the proposal to the proper quarters, you would allow him to refer to you as the originator of the suggestion.’

“Witte replied: ‘Certainly. He may say that I look upon this meeting as an event of the utmost importance to both countries at the present moment.’

“I said: ‘Seeing that you will be leaving Germany within five days from now, would you be prepared to go to Berlin if the Kaiser would receive you unofficially?’

“Witte replied: ‘Certainly. At any moment.’

“When we went for a walk in the afternoon, Witte made reference, amongst other things, to various political questions. I shall confine myself to quoting only a few of his remarks.

“‘Practically speaking,’ he said, ‘I think that there will be no war, although theoretically the air is thick with difficulties which only a war can clear away. But nowadays there is nobody who, like William the First, would put his foot down and say: “Now I will not yield another inch!” The spot at Ems where this happened is now adorned with a monument. Within a few years when the armaments which for the present are on paper only, shall be completed, Russia will really be strong. But even then, one has still to reckon with the possibility of internal complications. France, however, need not fear any such difficulties, because countries possessing a constitution acknowledged by all their inhabitants are not liable to revolutionary movements, no matter how often their governments change.’

“In speaking of Hartwig, Witte remarked: ‘His death is the severest blow to Russian diplomacy. He was unquestionably the most gifted Russian diplomatist. When Count Lammsdorff, who was a great friend of mine, was Minister for Foreign Affairs, he used to do nothing without first asking my advice. Hartwig, at that time, was the chief of his departmental staff, and he often came to see me. Even in those early days I had an opportunity of admiring his eminent diplomatic gifts.’”

The suggestion which formed the principal subject of the above conversations—viz. that a personal meeting of the two Emperors should be arranged in order to remove the existing tension—was not followed up, and the proposal would in any case have been doomed to failure, because the politicians who were responsible for the conduct of affairs at that time had done nothing to prevent the Kaiser from embarking on his customary cruise in Northern waters.

The latter end of July was full of excitement for the directors and the staff of the Hamburg-Amerika Linie. We endeavoured to acquaint the vessels that were under way with the critical situation, and we instructed each captain to make for a neutral port in case war should break out. The naval authorities warned us not to allow any ships to put to sea, and we were particularly asked not to permit the sailing of the s.s. Imperator, which was fixed for July 31st, because the attitude of Great Britain was uncertain. At a midnight meeting held at Ballin’s private residence it was decided to postpone the departure of the vessel “on account of the uncertain political situation.” Every berth on the steamer was booked, and hundreds of passengers were put to the greatest inconvenience. Most of them proceeded to a neutral or to a British port from which they subsequently embarked for the United States.

After this, events followed upon each other’s heels in swift succession. When war broke out, most of the ships succeeded in reaching neutral ports, so that comparatively few of them were lost in the early part of the war. By August 5th the cables had been cut. This circumstance made it very difficult to keep up communications with New York, and compelled the majority of our agencies and branches abroad to use their own discretion as to what to do. The place of regular business was taken by the work involved in carrying out the various agreements which the company had entered into during peace time, viz. those for the victualling and bunkering of various units of the Imperial Navy, for the supply of auxiliary vessels, and for the establishment of an organization which was to purchase the provisions needed by the navy.

In the meantime, the Ministry of the Interior had started to devise measures for provisioning the country as a whole, as far as that was still possible. It is well known that the responsible authorities had done far too little—indeed, hardly anything at all—to cope with this problem, because they had never taken a very serious view of the danger of war. Even the arrangements of the military authorities in connexion with the plans of mobilization were utterly deficient in this respect.

The first who seriously studied the question as to what would have to be done for the provisioning of the military and civil population if Germany had to fight against a coalition of enemies, and if the overseas supplies were stopped, was General Count Georg Waldersee, who became Quartermaster General in 1912. In a letter which he wrote to Ballin about that time, he gave a very clear description of the probable state of things in such an emergency. He pointed out that the amount of foodstuffs required during a war would probably be larger than the quantities needed in peace time—a contingency which had escaped attention in Germany altogether—and that above all there would be an enormous shortage of raw materials. Therefore, he said, if it was desired to guard the country against disagreeable surprises, it was imperative to make certain preparations for an economic and a financial mobilization. The military authorities at least had studied this problem theoretically, but the civil authorities would not make any move at all. The general said he thought it desirable that this question should receive more attention in the future, and he asked Ballin to let him know his views on the matter, and to give him some practical advice. The anxiety felt in military quarters was largely augmented by the receipt of disquieting rumours about the increase of Russian armaments.

In reply we furnished Count Waldersee with a brief memorandum written by myself in which, amongst other items, I referred him to some suggestions put forward by Senator Possehl, of LÜbeck, in the course of a lecture delivered about the same time before a selected audience. In view of the fact that Germany depended for her food supply and for her raw materials to an increasing extent on foreign sources, there could be no doubt as to the necessity for making economic preparations against the possibility of a war, if a war was considered at all probable.

Nevertheless, and in spite of the newly awakened interest on the part of the military authorities, these economic preparations had, before the war, made absolutely no progress worth mentioning. The only practical step which, as far as my knowledge goes, had been taken by the civil authorities, was the conclusion of an agreement entered into with a Dutch firm dealing with the importation of cereals in case of war. When, in the fateful summer of 1914, this contingency arose, the firm in question had chartered some British steamers, which instead of carrying their cargoes to Rotterdam took them to British ports.

Thus, no serious efforts of any kind had been made to grapple with the problem. On Sunday, August 2nd, Geheimrat Frisch, who afterwards became the director of the Zentral-Einkaufs-Gesellschaft (Central Purchasing Corporation), came to Hamburg, in order to inform Ballin, at the request of the Ministry for the Interior, that the latter felt very anxious in regard to the quantity of food actually to be found in Germany, which, it was feared, would be very small, and that it was expected that a great shortage would arise after a very brief period. He therefore asked him to use his best endeavours in order to secure supplies from abroad. A Hamburg firm was immediately requested to find out how much food was actually available in the country, and, although the figures obtained were not quite so bad as it was expected, steps were taken at once to remedy the deficiencies by importing food from neutral countries. A great obstacle to the rapid success of these efforts was the absolute want of any preparatory work. The very attempt to raise the necessary funds abounded with difficulties of every kind, because no money had been set aside for such expenditure in connexion with the scheme of mobilization, and the time taken by the attempts made in this direction, as well as the circumstance that communication with the United States could only be maintained via neutral countries, were the causes of a great deal of serious delay.

At Ballin’s suggestion the Reichseinkauf (Government Purchasing Organization) was then formed. For this organization the Hamburg-Amerika Linie was to do all the purchasing, and it was arranged that it should put at the disposal of the new body all those members of its staff who were not called up, and who were considered suitable for the work. Buyers were sent to every neutral country; but the mobilization then in progress led to a complete stoppage of railway travelling for the civil population, thus causing no end of difficulties to these buyers, and making personal contact with the Berlin authorities almost impossible. Added to all this, there was the inevitable confusion which the replacement of the civil administration by the army commands brought in its train. It had, in fact, been assumed that this war would resemble its predecessors in every respect, and no one was prepared for a world war. Hence, such important matters as the importation of foodstuffs from abroad and the work of supplying political information to neutral countries concerning the German standpoint were sadly neglected; everything had to be provided at a moment’s notice, and had to be carried through in the face of a great deal of opposition. Funds and energy were largely wasted; the military, naval, and civil organizations were working against one another instead of co-operating; and it took a long time before a little order could be introduced into the chaos. It was also found that the German credits abroad were quite inadequate for such enormous requirements. An attempt to dispose of some treasury bills in New York was only moderately successful, and in consequence of this lack of available funds the supplies obtained from the United States were but small. Even the fact that the Hamburg-Amerika Linie immediately succeeded in establishing the necessary connexions with American shippers, and in securing a sufficient amount of neutral tonnage, did not improve matters in the least. To obtain the required funds in Berlin, as has been explained before, involved considerable loss of time; and as the months passed the British blockade became more and more effective. Thus, as the war continued, large quantities of food could only be procured from European countries.

Ballin took a large personal share in the actual business transacted by the Reichseinkauf. He did so, if for no other reason, because he needed some substitute for the work connected with the real shipping business which was rapidly decreasing in extent. The only benefit his company derived from its new work was that it gave employment to part of the members of its staff, thus reducing in some measure the expenses. With the stoppage of the company’s real business its principal source of income ran dry in no time, and the small profits made out of the supply of provisions to the navy was only a poor compensation.

The world’s economic activities in those days presented a picture of utter confusion. All the stock exchanges were closed; all dealings in stocks and shares had ceased, so that no prices could be quoted; several countries had introduced a moratorium, and numerous banks had stopped payment. Germany had no longer any direct intercourse with the overseas countries; the British censorship was daily increasing its hold on the traffic proceeding via neutral ports. At first those foreign steamship companies which maintained passenger services to America did splendid business, because Europe was full of American tourists and business men who were anxious to secure a berth to get home, and numerous cabin passengers had to be content with steerage accommodation. When this rush was past, however, shipping business, like international commerce, entered upon its period of decline. The freight rates came down, the number of steamers laid up assumed large proportions, and the world’s traffic, in fact, was paralysed.

After a comparatively brief period it was found too difficult to conduct the Reichseinkauf organization with its headquarters at Hamburg, because the intercourse with the Imperial Treasury at Berlin, which provided the funds, took up too much time, and also because it seemed highly advisable to purchase the foreign foodstuffs needed by the military as well as the civil population through one and the same organization. The state of things in respect to these matters was simply indescribable; indeed, if it had been purposely intended to encourage the growth of war profiteering, it would have been impossible to find a better method of setting about it. Numerous buyers, responsible to different centres, not merely purchased without regard to each other, but even outbid each other, thus causing a rise in prices which the public had to pay. Conditions such as these were brought about by the utter unpreparedness of the competent civil authorities and by the fact that the military authorities could dispose of the vast amounts of money placed at their command at the outbreak of the war. These conditions were doubtless the soil from which sprang all the evils which later on developed into the pernicious system we connect with the name of Kriegswirtschaft, and for which it will be impossible to demand reparation owing to the lost war and to the outbreak of the revolution.

In order to facilitate the intercourse with the proper Government boards, and to centralize the purchasing business as much as possible, Ballin’s suggestion that the seat of the organization should be removed to Berlin was adopted, and at the same time the whole matter was put on a sounder footing by its conversion into a limited company under the name of Zentral-Einkaufs-Gesellschaft (Central Purchasing Corporation). The history of the Z.E.G. is well known in the country, and its work has been subject to a great deal of criticism, largely due to the fact that all the annoyance caused by the many restrictions which the Government found it necessary to impose, and which had to be put up with during the war, was directed against this body. Generally speaking, this attitude of the population was very unfair, because the principal grievances concerned the distribution of the foodstuffs, and for this part the Z.E.G. was not responsible. Its only task was to obtain the necessary supplies from abroad. If it is remembered that the transactions of the corporation reached enormous proportions, and that, after all, it was improvised at a time of war, we cannot be surprised to see that some mistakes and even some serious blunders did occur occasionally, and that the right people were not always found in the right places. Moreover, some of the really amazing feats accomplished by the Z.E.G—e.g. the supply of grain from Roumania, which necessitated enormous labour in connexion with the transhipment from rail to steamer and with the conveyance up the Danube—were only known to a few people. It is obvious that nothing could be published during the war about these achievements nor about the agreements concluded, after endless negotiations, with neutral countries and thus the management of the Z.E.G. was obliged to suffer in silence the criticisms and reproaches hurled at it without being able to defend itself.

The volume of the work done by the Z.E.G. may be inferred from the fact that the goods handled by the organization during the four years from 1915 to 1918 represented a value of 6,500 million marks, in which connexion it must not be forgotten that at that time the purchasing power of the mark was still nearly the same as before the war. When the Roumanian harvest was brought in the daily imports sometimes reached a total of 800 truck-loads. However, the greatest credit, in my opinion, is due to the Z.E.G. for putting a stop to the above-mentioned confusion in the methods of buying abroad and for establishing normal conditions. To-day it is scarcely possible to realize how difficult it was and how much time it required to overcome the opposition often met with at home.

Not much need be said here about the activities of the Hamburg-Amerika Linie during the war. The longer the struggle lasted, and the larger the number of countries involved in the war against Germany became, the heavier became the company’s losses of tonnage and of other property. All the shore establishments, branch offices, pier accommodation, etc., situated in enemy countries, were confiscated, and the anxiety about the post-war reconstruction grew from month to month. Ballin never lost sight of this problem, and it is chiefly due to his efforts that the Government and the Reichstag passed a Bill (1917) providing the means for the rebuilding of the country’s mercantile marine. Along with this he tried to keep the company financially independent by cutting down expenses, by finding work for the inland offices of the company, by selling tonnage, and by other means. The families and dependents of those employees who had been called to the colours were assisted as far as the funds at the company’s disposal permitted. Of all these measures the company has already given the necessary information to the public, and I can confine myself to these brief statements. There is only one circumstance which requires special mention.

It is universally acknowledged that no German industry has suffered so greatly through the action of the German Government as the shipping business. When the discussions as to the rebuilding of the merchant fleet were being carried on, the Government frankly admitted this fact. I am not thinking, in this connexion, of those measures which were imposed upon the Government by the Versailles Treaty, such as the surrender of the German mercantile marine, but what I have in mind is the steps taken whilst the war was in actual progress. These have one thing in common with those imposed by the enemy: their originators have, more or less, arrived at the belated conviction that they have sacrificed much valuable property to no purpose. In Great Britain it is admitted quite openly that the confiscation of the German merchant fleet has very largely contributed to the ensuing collapse of the world’s shipping markets, and to the confusion which now prevails on every trade route. The war measures of the German Government—or, rather, of the German naval authorities—have sacrificed enormous values merely for the sake of a phantom, thus necessitating the compensation due to the shipowners—a compensation far from sufficient to make good even a moderate fraction of the loss. The vessels that can be built for the sums thrown out for this purpose will not be worth the twentieth part of the old ones, if quality is taken into account as well as quantity. This will become apparent when the compensation money has been spent, and when it will be possible to compare the fleet of German passenger boats then existing with what the country possessed previous to the war.

The phantom just referred to was the foolish belief that it would be possible to eliminate all ocean tonnage from the high seas—a belief which was in itself used to justify the submarine war, and which was responsible for the assumption that the withdrawal of German tonnage from the high seas would affect the food and raw material supply of the enemy countries. This mistaken idea was also the reason for prohibiting the sale of the German vessels in neutral ports, and for ordering the destruction of their engines when it became impossible to prevent their confiscation. The latter measure, and in particular the manner in which it was carried out, prove the utter inability of the competent authorities to grasp the very elements of the great problem they were tackling, and in view of such lack of knowledge it is easy to understand the bitterness of tone which characterizes Ballin’s criticism of these measures as contained in his memorandum to the Minister of the Interior (1917). He wrote:

“When Your Excellency decided to permit the sale of our vessels in the United States it was too late to do so, because the U.S. Government had already seized them. Previous to that, when we saw that war would be inevitable, and when we had received an exceedingly favourable purchasing offer from an American group, we had asked permission to sell part of our tonnage laid up in that country.

“Your Excellency, acting on behalf of the Chancellor, declined to grant this permission. I am quite aware that neither the Chancellor nor Your Excellency as his representative were responsible for this refusal, but that it was due to a decision of the Admiralty Staff. However, the competent authority to which the protection and the furtherance of the country’s shipping interests are entrusted is the Ministry of the Interior. With the Admiralty Staff itself, as I need not remind Your Excellency, we have no dealings whatever, and we are not even entitled to approach that body directly in such matters.

“Our company which was the biggest undertaking of its kind in the world, and which previous to the war possessed a fleet aggregating about 1,500,000 tons, has lost practically all its ships except a very few. The losses are not so much due to capture on the part of the enemy as to the measures taken by our own Government. If our Government had acted with the same foresight as did the Austro-Hungarian Government with respect to its ships in United States and Chinese waters, the German vessels then in Italy, Portugal, Greece, the United States, Brazil, and elsewhere, might have been either retained by us or disposed of at their full value.

“The Austrian ships, with their dismantled engines were, at the instance of the Austrian Government, sold in such good time that the shipping companies concerned are not only in a position to-day to refrain from asking their Government to pass a Shipowners’ Compensation Bill, as we are bound to do, but they have even enriched the Austrian national wealth by such handsome additions that their capital strength has reached a sum never dreamt of before, and that they are now able to rebuild their fleet by drawing upon their own funds, and to make such further additions to their tonnage that in future we shall not only be compelled to compete with the shipping companies of neutral and enemy countries—which have accumulated phenomenal profits—but with the Austrian mercantile marine as well.

“From the point of view of our country’s economic interests it is greatly to be regretted that the policy of the Government has not changed in this respect even now. We have received reliable news from private sources to the effect that the engines of the German vessels now in Argentine waters have been destroyed without Your Excellency having so far informed us of this action, and without Your Excellency having asked us to take steps to utilize the vessels, if possible, for the benefit of the country’s economic interests and for that of the completely decimated German merchant fleet.

“Moreover, a wire sent by His Excellency Herr v. JonquiÈres to the competent Hamburg and Bremen authorities states that the ships in Uruguayan waters are also in great jeopardy. The Government of that country, according to this report, would prefer to purchase them rather than confiscate them. After what has been done before, we fear that the Admiralty Staff will either not permit the sale at all, or only grant its permission when it is too late.

“Your Excellency, I am sure, is fully aware of the fact that the methods of the Admiralty Staff—ignoring, as it does, all other considerations except its own—have caused one country after the other to join the ranks of Germany’s enemies. In view of the shortage of tonnage which Great Britain and other of our enemies systematically try to bring about—evidently with the intention of inconveniencing neutral countries as much as possible—these latter feel compelled, for the very reason of this lack of tonnage, to declare war upon us, because the politics of our country are guided by a body of men who, unfortunately, shut their eyes to the economic and political consequences of their decisions.

“Several months ago, at a time when nobody thought of unrestricted submarine warfare, an opportunity presented itself to us of concluding an agreement with the Belgian Relief Committee by which it would have been possible for us to withdraw our steamers, one after the other, from American ports and, under the flag of that committee, to bring them to Rotterdam. At that time, it was again the Admiralty Staff which prevented the conclusion of this agreement, because, for reasons best known to itself, it would grant permission for only three of these vessels, although Great Britain had agreed that the whole of our fleet interned in U.S. ports, representing 250,000 tons in all, could sail under the terms of the proposed agreement, and although the Allies as a whole had signed a written declaration to the effect that they would not interfere with our ships so long as they were used for the provisioning of Belgium. I took the liberty of pointing out to Captain Grashoff, the representative of the Admiralty Staff, that nothing could have prevented us from letting the ships remain at Rotterdam after they had completed their mission, and that afterwards, as has been borne out by later facts, they could have been safely taken to Hamburg.

“I respectfully ask Your Excellency whether it is not possible to enter a protest against such unnecessary dismemberment of part of the German national assets....

“ ... I must also protest most emphatically against the insinuation—which is sure to be made—that I have no right to criticize any steps which the Admiralty Staff has regarded as necessary for reasons of our naval strategy. Without reservation the German shipowners agree to any measures which are strategically necessary, however greatly they may injure their interests. The criticism which I beg to make on behalf of German shipping—although possessing no formal mandate—concerns itself with those steps which might have been taken without jeopardizing the success of our naval strategy if the vital necessities of German mercantile shipping had been studied with as much consideration as this branch of the economic activities of our country has a right to claim.

“What we principally take exception to in this connexion is that no information was sent to us before the decision to destroy the engines of our ships was arrived at, and that we were not assisted in making use of these dismantled vessels in the financial interests of our country. Nothing of this kind was done, although it was the most natural thing to do so, and although such action would have deprived many a country of a reason to declare war upon Germany.”

To a man of the type of Ballin—who had, throughout his life, been accustomed to perform a huge amount of successful work—a period of enforced inactivity was unbearable. The longer it lasted the more he suffered from its effects, especially because the preparatory work for the post-war reconstruction, the work connected with the war organization of the German shipowners, etc., was only a poor substitute for the productive labour he had been engaged in during more than thirty years of peace. There is no doubt but that the Government could have made better use of Ballin’s gift of organization, but it must be remembered that there was really no effective central Government in Germany throughout the war. The civil administration was not exactly deposed, but it was subordinated to the military one from the very beginning, and the latter carried on its work along the guiding lines laid down in the scheme of mobilization. The authorities to whose care the economic aspects of the war were entrusted did not often—if at all—avail themselves of Ballin’s advice; and to offer it unbidden never entered his mind, because he was cherishing the hope that the war would not last long, and because it was his belief that the world would be sensible enough to put an end to the wholesale destruction before long. It was a bitter disappointment to him to find how greatly he was mistaken, and to see that the forces of unreason remained in the ascendancy, especially as he was always convinced that Time would be on the side of Germany’s enemies. The sole aim of his political activities during the war was to bring about peace as early as possible.

Of all the attempts at mediation known to me, the one which seemed to be most likely to succeed passed through the hands of Ballin. To give a detailed account of it must be left to a time which need no longer pay regard to governments and individuals. Ballin’s share in it was brought about through his former international connexions. Through him it reached the Kaiser and the Chancellor, and owing to his untiring efforts, which lasted for two years, the position in the early part of 1917 was such that the establishment of direct contact between the two sides was imminent. Then the unrestricted submarine war began, the intended direct contact could not be established, and the carefully woven thread was definitely snapped asunder; because from that time on the Allies were certain that the United States would join them, and they felt assured of victory. No other mediation scheme with which I am acquainted has been pursued with so much unselfishness, devotion, and energy as this one. This attempt, however, no more than any other, could have procured for us that kind of peace which public opinion in Germany had been led for years to expect, thanks to the over-estimation of the country’s strength, fostered by the military censorship and by the military reports.

From such exaggerated opinions Ballin always held himself aloof. He recognized without reservation the immense achievements of Germany in the war, but he was fearful lest the strength of the country could not cope in the long run with the ever-increasing array of enemies, and he therefore maintained that, if it was desired to bring about peace, the Government would have to be moderate in its terms. A much discussed article which he contributed to the FrankfÜrter Zeitung on January 1st, 1915, under the heading of “The Wet Triangle,” is not inconsistent with these views of his. In it he pointed out that Germany’s naval power, in order to make a future blockade impossible, should no longer be content to be shut up in the “wet triangle,” i.e. the North Sea, but ought to establish itself on the high seas. This statement has been alleged to refer to Belgium, and Ballin has been wrongly claimed a partisan by those who supported the annexation of that country. What he really meant was that Germany should demand a naval base on the Atlantic, somewhere in the northern parts of Africa, and this idea seemed to be quite realizable if taken in conjunction with the terms of peace he had in view, viz. no annexations, no indemnities, economic advantages, a permanent political and naval understanding with Great Britain, based on her recognition that a military defeat of Germany was impossible. All this would be somewhat on the lines of the article published by the Westminster Gazette, referred to in the eighth chapter and a facsimile of which is given at the end of the book. Ballin was firmly convinced that, even if a mere peace of compromise was the outcome, i.e. one which left Germany without any territorial gains and without any indemnities, the impression which the German achievements during the war would produce on the rest of the world would be so overwhelming that the country would secure indirectly far greater advantages than could be gained by means of the largest possible indemnity and the most far-reaching annexations. Besides, the experiences of former times had proved that Germany would be quite unable to absorb such large accessions of territory as certain people had in mind. These views of Ballin, of course, were looked upon as those of a “pacificist,” and Ballin was classified among their number.

In a letter which Ballin wrote to a friend of his, a naval officer, in April, 1915, he puts up a highly characteristic defence of himself against the accusations implied by describing him as “pacificist” and “pro-English.”

“If,” he wrote, “the fact that I have been privileged to spend a considerable part of my life in close contact with you, entitles me to add a few personal remarks, I should like to say that I have made up my mind to retire from my post after the end of the war altogether. I told you shortly after the outbreak of the war that my life’s work was wrecked. To-day I am convinced that it will soon come to life again, but my youth would have to be restored to me before I could ever dream of taking up again that position in international shipping which I held before the war. I cannot imagine that I would ever go to London again and take the chair at the conferences at which the great problems of international shipping would come up for discussion, and nobody, I think, can expect that I should be content to play second fiddle at my age. Indeed, I cannot see how I could ever re-enter upon intimate relations with the British, the French, the Italians, and especially with the Americans. Strangely enough, influential circles on our side, and even His Majesty himself, look upon me as ‘pro-English,’ and yet I am the only German who can say with truth that he has been fighting the English for supremacy in the shipping world during the last thirty years. During this long period I have, if I am allowed to make use of so bold a comparison, conquered one British trench after the other, and I have renewed my attacks whenever I could find the means for doing so.”

It is no secret that during the war many prominent politicians and economists—men of sound political training—viewed the question of the war aims which it was desirable to realize very much in the same light as did Ballin, but that the censorship made it impossible for anyone to give public expression to such opinions. Ballin’s appreciation of the probable gain which Germany would derive from a peace by compromise has now been amply confirmed by the undeniable fact that the rest of the world has been tremendously impressed by Germany’s achievements, an impression which has made foreigners regard her chances of recovery with much more confidence than she has felt herself, stunned as she was by the immensity of her dÉbÂcle.

The following notes, which are largely based on Ballin’s own diary, are intended to supplement the information given so far as to his political activities during the war.

The outbreak of war, as may be inferred from what has already been related, took him completely by surprise, and he did not think that the struggle would last very long. “The necessities of the world’s commerce will not stand a long war,” was his opinion during the early days. For the rest, he tried to find work for himself which would benefit his country. “What we need to-day,” he wrote to a friend, “is work. This will lift us up and keep us going, and will make those of us who are no longer fit to fight feel that we are still of some use after all.” But in connexion with this thought another one began to occupy his mind. He anxiously asked: “Which of the men now at headquarters will have the strength and the wisdom required to negotiate a successful peace when the time comes?” All his thoughts centred round the one idea of how to secure peace; what advantages his country would derive from it; and how it would be possible to bring about an international grouping of the Powers which would be of the greatest benefit to Germany. On October 1st, 1914, he wrote to Grand Admiral v. Tirpitz:

“ ... I quite agree with what you say in your welcome letter. Indeed, you could not view these matters[3] with graver anxiety than I do myself. I hope I shall soon have the opportunity I desire of discussing these things with you personally.

“To win the peace will be hardly less difficult than to win the war. My opinion is that the result of this world war, if it lasts 12 months, will be exactly the same as if it lasts six months. I mean to say that, if we do not succeed in acquiring the guarantees for our compensation demands within a few months, the further progress of events will not appreciably improve our chances in this direction.

“What we must aim at is a new grouping of the Powers round an alliance between Germany, Great Britain and France. This alliance will become possible as soon as we shall have vanquished France and Belgium, and as soon as you shall have made up your mind to bring about an understanding with Great Britain concerning the naval programme.

“I am aware that this idea will find but slight favour with you, but you will never secure a reasonable peace with Great Britain without a naval agreement.

“By a reasonable peace I mean one which will enable both Germany and Britain to sheathe their swords in honour, and which will not burden either nation with a hatred which would contain within it the germs of future war.

“We have had no difficulty in putting up with the French clamour for revanche for a period of 44 years, because in this case we had only to deal with a small group of nationalist firebrands, but a British clamour for revenge would produce an exceedingly adverse effect on the future of our national well-being and of our share in the world’s trade and commerce.

“For a long time past it has been my conviction that the era of the super-Dreadnoughts has passed, and some time ago I asked Admiral von MÜller if it was not possible to consider the question of a naval understanding simply on the basis of an agreement as to the sum of money which either Government should be entitled to spend annually on naval construction, leaving it to the discretion of each side how to make use of the money agreed upon for the building of the various types of ships.

“Great Britain is putting up a fight for her existence just as much as we do, if not to an even greater extent. Her continuance as a world power depends on the superiority—the numerical superiority at least—of her navy.

“I am convinced—always supposing that we shall succeed in conquering France and Belgium—that the British terms concerning her naval supremacy will be very moderate, and I cannot help thinking that a fair understanding regarding naval construction is just as important to Germany as it is to Great Britain.

“The present state of things is the outcome of a circulus vitiosus, and is bound to produce a soreness which will never permit of a sound understanding....

“ ... And what about the further course of the war? I sincerely hope that your Excellency will not risk the navy. The expression ‘The Fleet in being’ which has never left my memory, and which has lately been heard of again, implies exactly all I mean.

“The navy, in my opinion, has never been, and never ought to be, anything but the indispensable reserve of a healthy international policy. Just as a conscientious director-general would never dream of reducing the reserve funds of his company, unless compelled to do so by sheer necessity, we ought not to drag the navy into the war, if it could possibly be avoided.

“What would it profit you to risk a naval battle on the high seas? Not only our own, but British experts as well, believe that our ships, our officers, and our crews are superior to the British, and King Edward emphasized at every opportunity that the crews on British warships are not a match to those on German vessels. But what are you going to do? Are you going to make them fight against a numerically superior enemy? Such a course would be open to great objections, and even, if the battle turned out successfully, the victors would not escape serious damage.

“I do not know how your Excellency, and their Excellencies v. MÜller and Pohl look upon these matters, but since you yourself have asked me to state my views, I hope you will not take it amiss if my zeal causes me to enlarge upon a subject which is not quite within my province. Besides, I have another reason for doing so.

“It is our duty to prepare ourselves in good time for the peace that is to come. Does your Excellency believe it would augur well for the future peace if Germany succeeded in inflicting a naval victory on the British? I do not think so myself, but I rather fancy that the opposite effect would take place.... If the British should suffer a big naval defeat, they would be forced to fight to the bitter end. That is inherent in the nature of things; even those who can only argue in terms of a Continental policy must understand it.

“Even a partial loss of her naval prestige would spell ruin to Great Britain. It would imply the defection of the great dominions which now form part of her world empire. The raison d’Être for Great Britain’s present position ceases to exist as soon as she has lost her naval supremacy....

“ ... And, please, do not lose sight of one further consideration. We must find our compensation by annexing valuable territories beyond the seas; but for the peaceful enjoyment of such overseas gains we shall be dependent on the good will of Great Britain.... At present, men of German blood occupy leading positions in the economic life of almost every British colony, and the open door has been the means by which we have acquired a great deal of that national wealth of ours which caused the smooth working of our financial mobilization when the war broke out.

“ ... For all these reasons I consider it a great mistake that the press should be allowed to excite German public opinion against Great Britain to the extent it is done. I was in Berlin during the week, and I was alarmed when I became acquainted with the wild schemes which are entertained not only by the people of Berlin, but also by distinguished men from the Rhineland and Westphalia.”

Apart from the peace problem there was another matter which gave Ballin grave cause for anxiety. This was the circumstance that the Kaiser, because of his long absences from Berlin, lost the necessary touch with the people, and could not, therefore, be kept properly informed of popular feeling. He expressed his fears on this account in a letter to a friend of his amongst the Kaiser’s entourage in which he wrote:

“I hope you will soon be able to induce His Majesty to remove his winter quarters to Germany. My common sense tells me that, if a war is waged on French and Russian soil, the headquarters ought to be situated in Germany. From the point of view of security also I consider this very desirable, and I feel a great deal of anxiety concerning His Majesty.... Whether it is wise to exercise the censorship of the press to the extent it is done, is a question on which more opinions than one are possible.... I have just had a call from a Mr. X., a former officer, and an exceedingly reliable and capable man. He complained bitterly of the rigid censorship, and he thought it would be a mistake from which we should have to suffer in days to come. It would certainly be a blessing if such a man who is highly esteemed by the Foreign Office could be given a chance of explaining his views at headquarters.”

Among the problems of foreign policy with which Germany saw herself faced in the early part of the war, those referring to Italy and Roumania were of special interest to Ballin. The question was how to prevent these two countries from joining the ranks of Germany’s enemies. Ballin did all he could to bring about the Italian mission of Prince BÜlow. He not only urged the Chancellor to select BÜlow for this task, but he also tried hard to induce the Prince to undertake the thankless errand involved. In addition to the political importance of the mission, he laid great stress on its bearing on the food problem.

“The question of provisioning the German people,” he wrote in a letter to the Army Headquarters, “is closely connected with the solution of the Italian and Roumanian difficulties. No pressure is, in my opinion, too strong in order to make it perfectly clear to Austria that some sort of an agreement with Italy is a sine qua non for the successful termination of this war. If it were argued that Italy would come forward with fresh demands as soon as her original claims had been satisfied, I think the German Government could combat this objection by insisting upon a written promise on the part of Italy to the effect that she would not extend her demands.

“ ... Political and military considerations make it plain beyond any question of doubt that Italy, who will be armed to the teeth in March, will not be able to lay down her arms again unless Austria arrives at an understanding with her. Thus our greatest danger is the uncertainty as to what these neutrals will do, and I hope that the ministerial changes in Austria will smooth the way for a reasonable attitude towards this regrettable but unavoidable necessity. Our aim should be to prevent the scattering of our forces, for the burden imposed upon ourselves because of the inadequacy of our allies is almost superhuman, and contains the danger of exhaustion.”

The German mission to Italy suffered through the vacillations of Austrian politics, and was therefore doomed to failure. Austrian feeling concerning a compromise with Italy was always dependent on the news from the Italian front; if this was favourable, people did not want to hear of it, and in the opposite case they would only discuss such an understanding most unwillingly. The proposed compromise was looked upon as a heavy sacrifice, and people were by no means favourably disposed towards German mediation. Prince BÜlow was accused of having “presented Italy with the Trentino.” Disquieting news which Ballin received from Vienna induced him to report to the Chancellor on the state of Austrian feeling, and to offer his services if he thought that his old-established relations with Vienna could be of any use. His offer was also prompted by his conviction that the German diplomatic representation in Vienna was not adapted to Austrian mentality.

Thereupon Ballin, early in March, 1915, entered upon a semi-official mission to Vienna. He first acquainted himself with the actual state of the Austrian mind by calling on his old friend, his Excellency v. Schulz, the Vice-President of the Austrian Chief Court of Audits, who was regarded as one of the best informed personages in the capital, and who was one of the regular partners of the old Emperor Francis Joseph for his daily game of tarock. This gentleman told Ballin that the people of Austria felt a good deal of resentment towards Germany, who had stepped in far too early as the “advocate of Italy,” at a time when Austria was still hoping to settle Serbia all by herself. This hope, indeed, had proved an illusion; but Germany’s strategy had also turned out a failure, because she had misjudged the attitude of Great Britain, and had not finished with France as rapidly as she had expected to do. Now Austria, confronted by stern necessity, would have to make concessions to Italy which every true Austrian would view with bitter grief; and, to bring about the active assistance of Roumania, Count Tisza would consider a sacrifice in the Bukovina debatable, but never one in Transylvania. Ballin told his friend that, as far as Roumania was concerned, he would have to leave it to Austria to settle that question by herself; and that his mission with regard to Italy was so difficult that he preferred not to make it more so by trying to solve the Roumanian problem as well.

Ballin’s subsequent interviews with the Prime Minister, Count StÜrgkh, and with the Minister v. Koerber, as well as those with other influential personages, confirmed these impressions, and he left Vienna buoyed up by the hope that the conference between German, Austrian, and Italian delegates which it was proposed to hold at Vienna would lead to a successful result. Such, however, was not the case, and it is quite probable that the possibility of arriving at an understanding with Italy had passed by that time, or, assuming the most favourable circumstances, that only immediate and far-reaching Austrian concessions could have saved the situation; but these were not forthcoming.

The next subject which caused much anxiety to Ballin was the question as to what Roumania would do, a country to whose attitude, considering her importance to Germany as a food-producing area, he attached even more value than to that of Italy. In his notes dating from that time he said:

“ ... June 21st, 1915. The news which I received from X. regarding the political situation in Roumania and Bulgaria was so serious that I felt bound to send copies of these letters to the Chief of the General Staff, General v. Falkenhayn, and to inform him that, in my opinion, our Foreign Office had now done all it could possibly do, and that nothing but some forcible military pressure such as he and Baron Conrad could exercise on Count Tisza would induce this obstinate gentleman to settle his differences with the Balkan States....”

“ ... On this occasion X. expressed a great deal of contempt at the suggestion that we should draw upon the members of the old diplomacy for additional help. On the whole, he seemed to be very proud of the achievements of the Foreign Office, whereas I am of opinion that this body has entirely failed, and is of no practical use any longer. Things must be in a pretty bad state if Herr Erzberger, of all people, is looked upon as the last hope of the country. I suggested to the gentlemen that it would do some good if the Chancellor were to request the more virulent of the Pan-Germans to see him, and to ask Hindenburg to explain to them the military situation without any camouflage. This suggestion was favourably received, and it is to be passed on to the Chancellor....

“ ... The Chancellor informed me that he was considering whether, if Roumania remained neutral, and if the operations against the Dardanelles terminated successfully for us, he ought to submit any official proposals for peace to our enemies. I expressed my admiration of the plan, but told the Chancellor of my objections to its practical execution. The Entente, I feared, would refuse to entertain the proposals, and the German people would regard it as a sign of weakness. The Chancellor asked me to refrain from pronouncing a definite opinion for the present, but to think it over until our next meeting.”

In a letter of July 31st, 1915, Ballin wrote as follows:

“I should like to express my heartfelt gratitude to you for sending on to me the report which contains some of the finest observations that have come to my knowledge since the outbreak of the war.

“ ... The writer lays great stress on the belief prevalent in enemy and neutral countries alike that Germany is making a bid for universal supremacy and for supremacy on the high seas—a belief which has spurred on the resistance of the enemy to the utmost, and has caused a good deal of bad feeling amongst the neutrals. I repeatedly brought this fact to the knowledge of the Chancellor and I urgently suggested to him that in some way—e.g., by an Imperial proclamation on the anniversary of the outbreak of war, or by some other suitable means—we should announce to all and sundry that such hare-brained schemes are not entertained by any responsible person or body of persons in Germany. I sincerely trust that some such steps will be taken at an early opportunity, because otherwise I do not see when the war will be over. Though not a pessimist I do not believe in taking too rosy a view of things. I envy the British because they have the courage openly to discuss in their press and parliament the reverses as well as the successes they have had.

“ ... You see I am not taking too cheerful a view of matters. I have nothing but the most enthusiastic admiration for the achievements of the German people, both at the front and at home. Although not gifted politically this people could do wonders if led by great statesmen and by great politicians.”

“ ... August 10th, 1915. This morning I spent an hour with the Chancellor, who had requested me to call on him.... We had a long discussion as to the advisability of publishing a statement to the effect that Germany would be ready at any moment to discuss an honourable peace. She had achieved great successes in the field, she was in possession of important mortgages, her armies were occupying large tracts of the enemy’s country, and she was not carrying on a war of aggression but one of defence: therefore such a step could not be regarded as a sign of weakness. The Chancellor, nevertheless, was afraid that such a step might after all be interpreted in that sense. I suggested to him that it might be of some use if the Pope could be induced to address a peace message to the rulers of the various countries.

“I also called the Chancellor’s urgent attention to the need for dealing with the food problem during the ensuing winter, especially with relation to the price of meat.”

“ ... August 12th, 1915. The United States Ambassador, Mr. Gerard, had expressed the desire to discuss with me the question as to the advisability of suggesting that President Wilson should mediate between the belligerents. I therefore called on him on Tuesday, August 10th, and advised him to refrain from any official action in that direction, but said that I thought he might ask the President to sound opinion in Great Britain as to the chances of such peace proposals.”

In the early part of September, 1915, Admiral v. Holtzendorff was appointed Chief of the Admiralty Staff. This appointment gave rise to a conflict with Grand Admiral v. Tirpitz, who threatened to resign because, inter alia, the Kaiser had issued instructions to the effect that the Chief of the Admiralty Staff should no longer be subject to the authority of the Secretary for the Navy, but that he could communicate with the Kaiser and with the Chancellor direct. Ballin thought a possible resignation of Admiral v. Tirpitz would be fraught with serious consequences at that moment, as it would produce a bad impression on public opinion and be inimical to the position of the Kaiser. These considerations caused Ballin to intervene in person with Admiral v. Tirpitz and with the Chief of the Naval Cabinet, with the result that the Grand Admiral withdrew his intended resignation.

The following extracts are taken from Ballin’s notes during the next few months:

“ ... October 20th, 1915. I am annoyed at the importunity with which some interested parties, such as the Central Association of German Manufacturers and the representatives of agriculture, are pushing forward their views on the peace terms. Moreover, my alleged readiness to conclude a ‘bad peace’ with Great Britain is being talked about so widely that even His Excellency Herr v. Zimmermann has drawn my attention to the ill effects of such calumnies. All this has prompted me to avail myself of the opportunity presented by the annual meeting of the Association of Hamburg Shipowners of making a speech in which I have explained my views as to the freedom of the seas.

“Prince BÜlow will be leaving for Lucerne to-day where he intends to stay for some time, and the Prussian chargÉ d’affaires, Herr v. Mutius—of whom it has been alleged that the Chancellor appointed him to his post on the death of his predecessor (the excellent Herr v. BÜlow, Prussian Minister to Hamburg) for the reason that he might have a watchful eye on Prince BÜlow and myself—has been promptly transferred to Warsaw. Evidently the Berlin authorities now think the danger has passed, since Prince BÜlow has left.”

“ ... November 23rd, 1915. Hammann[4] asked me why I did not call on the Chancellor, and I told him that I thought the Chancellor might feel annoyed with me for my interference in favour of Tirpitz, which, however, would not affect me in any way, because I was convinced that I had acted in the best interests of the Kaiser, and that it would have been unwise to remove Tirpitz from his post so long as the war lasted.”

“ ... The Chancellor asked me to see him on Wednesday at 6.30 p.m., and I spent nearly two hours with him. I urgently advised him to make a frank statement in the Reichstag as to our readiness for peace, and to do so in such a form that it could not possibly be looked upon as a sign of weakness.”

“ ... On January 10th, 1916, I was commanded to dine with Their Majesties at the Neues Palais. The only other guests apart from myself were the Minister of the Royal Household, Count Eulenburg, and the Minister of Agriculture, Herr v. Schorlemer. None of the suite were present so that the company consisted of five persons only. The Kaiser was in high spirits and full of confidence. The after-dinner conversation extended to such a late hour that we did not catch the train by which we intended to return, and we were obliged to leave by the last train that night.

“A remark of mine concerning the possibility of an extension of submarine warfare had, as the Chancellor had been informed, caused the Kaiser to assume that I completely shared the point of view of Admirals v. Holtzendorff and v. Tirpitz, who now recommend a submarine campaign against Great Britain on a large scale. I therefore, at the Chancellor’s request, addressed the following letter to the Kaiser:

“‘A few days ago I had occasion to discuss with Grand Admiral v. Tirpitz and Admiral v. Holtzendorff the question of a resumption of the submarine campaign.

“‘I was then given confidential information as to the number of submarines at our disposal, and I am bound to say that even if due allowance is made for the activity of the mine-seeking auxiliaries I regard the number of large submarines as insufficient for the purposes of such a finally decisive measure.

“‘The first attempt at submarine warfare proved unsuccessful on account of the insufficiency of the means employed to carry it through; and it is my humble opinion that a second attempt should only be undertaken if its success were beyond the possibility of a doubt. If this cannot be guaranteed the consequences of such a measure appear to me to be out of all proportion to the risks attached to it.

“‘I therefore beg to respectfully suggest to Your Majesty that the work of the mine-laying auxiliaries should be carried on as hitherto, and should even be extended. I also consider that the submarines should be made use of to the fullest extent of their capacity, with the proviso, however, that their employment against passenger steamers should be subject to the restrictions recently laid down by Your Majesty.

“‘When the number of the big submarines shall be sufficient effectively to cut off the British food supply, I think the time will have arrived for us to employ this weapon against Great Britain without paying regard to the so-called neutrals.

“‘At present about two hundred ocean steamers or more enter British ports every day, and an equal number leave for foreign ports. If we sink a daily average of 30 or 40 we can, indeed, greatly inconvenience England, but we shall assuredly not be able to compel her to sue for peace.

“‘I humbly apologize to Your Majesty for thus stating my views on this matter; but I am of opinion that the extreme importance of the proposed steps will be a sufficient excuse for me.’”

In the early part of 1916 Ballin went on a second mission to Vienna, and afterwards he prepared a detailed report for the Chancellor dealing with the state of public feeling as he found it. This document presents a faithful picture of the precarious conditions in that capital which the German Government had constantly to reckon with, and may therefore be of interest even now. The following passages are extracts from it:

“If we desire to keep the Austrian fighting spirit unimpaired we must avoid at all hazards suggesting the possibility of an understanding with Italy. The Italian war is popular down to the lowest classes of the people, and the successful stand against Italy is a subject of pride and hope to all Austrians.

“Hence the circumstance that Prince BÜlow has temporarily taken up his abode at Lucerne has roused a considerable amount of suspicion. Even the officials in the various ministerial departments fear that the Prince might intend to make unofficial advances to Italy when in Lucerne, and that these steps might be followed in Berlin by a movement in favour of a separate peace with Italy by which Austria would have to cede the Trentino. People were obviously pleased and relieved when I could explain to them that the Prince was greatly embarrassed on account of having lost his Villa Malta, and that the choice of a suitable residence during the winter had been very difficult. They were particularly gratified when I told them—what I had heard from the Prince’s own lips—that he had had no official mission, and that he had not been engaged upon any negotiations.

“People are especially proud of the Isonzo battles, but they do not shut their eyes to the uncertain prospects of a successful Austrian offensive. They really consider that Austria has gained her war aims, and the old Emperor described the military situation to Frau Kathi Schratt by saying that the war was in many respects like a game of tarock, in which the winner was not allowed to cease playing because the losers insisted upon him going on with the game so that they might have their revenge. Matters at first had been to the advantage of our enemies: the Russians had overrun Galicia, the Serbians had defeated the Austrians at Belgrade, and the French had looked upon the retreat from the Marne as a great success. Now, however, the war was all in favour of Germany and Austria, and therefore our opponents did not want to call a truce just yet.

“If this comparison which the venerable old gentleman has borrowed from his favourite game of cards is correct, the war will not be over until one side has nothing further to stake, and the decision will be brought about by that side whose human and financial resources shall last longest.

“Banking circles, of course, view the financial situation with the utmost gravity, but the general public—in spite of the high prices ruling here, and in spite of the great want of food which is much more noticeable than with us—regard matters a great deal more serenely. This is simply due to the greater optimism so characteristic of the Austrians, whose motto is: ‘Life is so short, and death so very, very long.’ They prefer to assign to future generations the worries which would spoil their sublunary existence.

“The present Cabinet is looked upon as weak and mediocre. The old Emperor clings to Count StÜrgkh because of the extensive use to which the latter puts the celebrated paragraph 14 of the Constitution, by which Parliament is eliminated altogether, and which provides the Government with every conceivable liberty of action. The all-powerful Tisza gives his support to Count StÜrgkh just because of his weakness. Hence the attempt to replace the latter by Prince Hohenlohe, the present Minister of the Interior, is beset with much difficulty. The Emperor wants to avoid a break with Tisza at all costs. This state of things makes people feel very worried. The strain in the relations between Austria and Hungary has greatly increased since my last visit, whereas the friendly feelings for Germany are now more pronounced than ever.

“Our Kaiser everywhere enjoys an unexampled veneration. Within the next few days he will be made the subject of great celebrations in his honour. Although the tickets of admission are sold at enormous prices, even General v. Georgi, the Chief of the National Defence Organization—whom I met last night—did not succeed in obtaining a box, notwithstanding his high connexions. This morning the well-known member of the Hofburg Theatre, Herr Georg Reimers, read to me two poems dedicated to the Kaiser which he is going to recite that night, and I feel bound to say that it can hardly be an unmixed pleasure to the members of the court to witness this act of enthusiastic homage paid to our ruler.

“The Roumanian question, particularly in its bearing on the food supply, is regarded by people who are able to judge with great anxiety. It is believed that the only thing to do is to send to Bucharest experienced men connected with the supply and the distribution of food who must be properly authorized to purchase as much grain as possible for ourselves and for our allies.

“The big Austro-German Zollverein—or by whatever other name it is intended to describe the proposed customs union—is looked upon with very mixed feelings. Last night Baron Skoda (the Austrian Krupp) explained to me after a dinner given at his house, with the lively consent of members of the court and of the big manufacturers, that the Austrian interests might indeed profit from such a union with the Balkan States, but that it would be better that Germany should remain an outsider for a period of fifteen years. This is evidently a case of timeo Danaos, et dona ferentes, and people feel that Austria, owing to her economic exhaustion, would be easily absorbed by Germany after the conclusion of the war. The Hungarians, naturally, view matters from a different angle, not only because the Hungarian farmers would like to sell their grain to Germany free of any duty, and because industry counts for very little in their country, but also because they dislike the Austrians.

“ ... I also dined with Count Tisza. He is a purely Magyar politician who regards the international situation from his Hungarian point of view, and in conformity with his Magyar inclinations. He is evidently a strong if obstinate character, and he does not impress me as a man who will give up his post without a protest. He, too, thinks the real war aims of Austria-Hungary have been accomplished. Serbia is crushed, Galicia liberated, and Russian supremacy in the Balkans—formerly viewed with so much apprehension—is a thing of the past. All that is wanting now is to bring the Italian campaign to a successful conclusion and the war may be regarded as over as far as Austro-Hungarian interests are involved.

“Both Tisza and the Austrian society showed strong symptoms of an Anglophile leaning. Frau Schratt, who in such matters simply re-echoes the views of the old Emperor, seemed very pro-English, and had something to say about ‘German atrocities.’

“I mention these facts because I cannot help thinking that, notwithstanding the war, some friendly threads must have been spun across from England to Austria.”

The subject of an unrestricted submarine war, already touched upon by Ballin in his above-mentioned letter to the Kaiser written in January, 1916, was discussed with much animation in the course of the year, and a powerful propaganda in its favour was started by certain quarters. Ballin’s attitude towards this question, and particularly towards its bearing on the possible entry of the United States into the war, is described with great clearness in a letter addressed to a friend of his attached to the Army Headquarters. In this message he wrote:

“ ... You ask me to tell you something about the political and military situation as I see it, and I shall gladly comply with your wish.

“The American danger seems to be averted for the moment at least. A severance of diplomatic relations with the United States would have been nothing short of fatal to Germany at the present stage. Just because the war may be looked upon as won in a military sense, we were obliged to avoid such a catastrophe at all costs. As far as military exertions are concerned, it is quite correct to say that Germany has won the war, because in order to turn the present position into a military defeat our enemies, in the first instance, would have to gain military victories in Russia, France, and Belgium. These would have to be followed up by our retreat from the occupied countries and by their invasion of ours, and they would have to defeat us at home. Every sensible critic must see that neither their human material nor their organizing powers are sufficient for such achievements. The fact is that we have reached the final stage of a progressive war of exhaustion, which nothing but the intervention of the United States could have prolonged.

“The accession of Italy to the ranks of our opponents has shown what it means if an additional Power enters the war against us. From a military point of view the entry of Italy did not materially aggravate our position; but the whole aspect of the war, as viewed by our enemies, underwent a complete change, and Grey, who shortly before had announced that ‘there is nothing between us and Germany except Belgium,’ stated a few weeks subsequent to the Italian volte-face that he could not find a suitable basis for peace negotiations anywhere.

“The entry of the United States would have been of immeasurably greater effect on the imagination and the obstinacy of our enemies.

“The very intelligent gentlemen who even now preach the unrestricted submarine war, especially the leading members of the Conservative and National Liberal parties, are misinformed about what the submarines can do. They not only regard it as possible, but even as practically certain, that the starvation of Great Britain could be achieved if the unrestricted submarine war were introduced. I need not tell Your Excellency that such an assumption fails to estimate things at their true value. Great Britain will always be able to maintain her connexion with the French Channel ports. Quite apart from that, she will always succeed in importing the 14,000 tons of cereals which she needs every day to feed her population even if the number of our submarines is trebled, because it must not be forgotten that the submarines cannot operate during the night.

“Hence the whole problem is now, as ever, governed by the axiom to which I have over and over again drawn the attention of the heads of the Berlin economic associations, viz. that we can no more force the British into subjection through our submarines than they can hope to wear us out by their starvation blockade. Both the submarine war and the blockade are extremely disastrous measures, inflicting heavy losses on either side; but neither of them can determine the fate of the war nor bring about a fundamental improvement in the position of either of the belligerent groups of Powers. That, apart from all other considerations, the unrestricted submarine war would have exposed us to the open hostility of the neutral countries, and might even have caused them to join the ranks of our enemies, is an additional contingency which the submarine enthusiasts have found it most convenient to dismiss by a wave of the hand.

“If after the war Germany remains isolated from the rest of the world, she cannot feed her population, and the doctrine of Central European brotherhood promulgated by some of our amiable poets has given rise to a movement which is apt to be of the greatest detriment to the interests of our country when the war is over.

“If we had wished to invest large parts of our German national wealth in countries like Austria-Hungary, Bulgaria, and Turkey, nothing could have prevented us from realizing such a plan at any time previous to the war, provided we had thought it economically sound.

“Such a return to a continental policy, I maintain, would be a disaster to Germany. Our needs and our aspirations have increased to such an extent that we can no longer hope to satisfy them by economic isolation or within the framework of a Central European economic league of states.

“It is not because I am at the head of the biggest German shipping concern that I tell you these things, but I do so with the disinterestedness of a man who hopes to be allowed to retire into private life when this terrible war is over. No one can perform his life’s work more than once, and no one can make a fresh start at the age of sixty.

“The war has considerably strengthened the moral fibre of the Chancellor; he has learnt to take upon his shoulders responsibilities which, I think, he would formerly have shirked. It is much to be regretted that the Conservative party cannot see eye to eye with him in so many questions. He is blamed for the fact that the Kaiser is so difficult of access, and that he does not every now and then receive the leaders of our political and economic life, as he should do considering the fateful time through which the Empire is passing.

“If the Chancellor is to succeed in carrying through the huge tasks still before him, it is, in my opinion, imperative that he should not lose touch with Conservative circles, and I think there is no reason why the Kaiser should not ask men like Herr v. Wangenheim, Count Schwerin-LÖwitz, etc., to visit him from time to time at headquarters, and to acquaint him with their wishes and anxieties.

“I cannot help telling you that the whole nation views with profound regret the Kaiser’s isolation. Since the outbreak of the war I have only once had an interview with His Excellency v. Falkenhayn, and the main purpose of my asking for it was to request him to bring about a change in this state of things by using his influence with the Kaiser. His Excellency frankly told me that he had some objections to doing this, but he promised me nevertheless that he would exercise his influence in this direction. I am only afraid that, because of the excessive burden of work he has to get through, the matter has slipped his memory....”

Ballin was not the only one who, as early as 1916, regarded with such alarm the devastating effects of a possible entry of the United States into the war; other men of political training thought so too, although their number was not large. The following passages, taken from two letters which Ballin received from a member of the German diplomatic service, show that the feeling was there:

“February 16th, 1916. My chief apprehensions are purely political. Although it seems that for the moment our differences with the United States will be smoothed over, there can be no doubt but that at times the tension has been so great that a wrong move at the critical moment would have caused America to take up arms against us. Contrary to what most people seem to think, I regard this danger as having by no means passed; in fact I look upon it as always lurking in the background. Those who, like myself, have seen that the secret ideal of British policy is an alliance and permanent co-operation with America, will agree with me that such an Anglo-American understanding for the period of this war would be of lasting detriment to our whole future. You know England, and you know that the course of events has turned the Entente automatically into an alliance, although the British, especially those who look beyond the actual present, have always felt a great deal of aversion towards such a development. The individual Frenchman, indeed, is mostly looked upon as a somewhat grotesque and slightly ludicrous character, but all the same there exists some sympathy with the French as a nation, however artificially this may have been brought about; but towards Russia the average Englishman never felt anything but an icy aloofness and a great deal of antipathy. Hence, the so-called allies of the British have never been the cause of unalloyed joy to them.

“On the other hand, to establish permanent relations with that part of the Anglo-Saxon race inhabiting the huge continent across the Atlantic has at all times been the aim pursued by every really far-sighted British statesman. By means of such an alliance, it is hoped to consolidate and to strengthen for many generations the foundations on which the venerable but also slightly dilapidated structure of the United Kingdom rests. From a purely maritime point of view, such an alliance would be of overwhelming strength. In my opinion it would be perfectly hopeless for our country, constantly menaced as it is by serious Continental complications, to gain the trident of Neptune in opposition to these two Powers. I believe an Anglo-American league, whose object it would be to prevent us from becoming a commercial, naval, and Continental Power, would restrict us once more to a purely Continental policy, a policy which we have so successfully discarded since the accession of our present Kaiser.

“To frustrate such an alliance must be our principal task. To call it into being or even to facilitate its conclusion would be the greatest crime against Germany’s future which anyone could commit.

“Let us by all means sink as much enemy tonnage as possible, let us lay mines, and let us proceed with our submarine warfare as hitherto, or even with more energy, but let the people who are at the head of the whole movement be aware of the immense responsibility that rests on their shoulders. If our leading men speak of a war with America just as cheerfully as though San Marino or Montenegro were involved, I cannot help viewing such an attitude with the utmost apprehension. The British will use all their astuteness and all their energy to exploit any mistakes committed by Germany. If they succeed in this, and if, in consequence, our relations with the United States become very strained again or drift towards a rupture, I fear that we shall not be able to bring this war to a successful close, or derive from it any security for our future development.

“Berlin, February 26th, 1916. During the two days I have now been here it has greatly depressed me to see a number of fanatics who cannot gauge the consequences of their doings attempting to drive this splendid German people towards a new abyss. Alas! delusions and folly are rampant everywhere. If I were you, I should now disregard every other consideration, and explain to the Kaiser as a friend that everything is being gambled away: the existence of his Empire, his crown, and possibly the fate of the dynasty. It is like living in a madhouse; everyone talks about war with Holland, America, Denmark and Roumania as though a mere picnic were concerned.”

During the war Ballin tried over and over again to make the responsible authorities see the position in the same light as his own observations, and his repeated discussions with unprejudiced and clear-headed men had led him to see it himself. The letter reproduced below contains a description of the general situation at the time of writing (July, 1916). It was addressed to a friend of his in the diplomatic service who was looking after German interests in one of the countries allied with Germany, and who had asked him for some information concerning the situation at home:

“I am sorry that I can send you no good news at all. The conduct of the war and its probable outcome are more of a mystery now than ever, and with all that I cannot help feeling that our responsible quarters do not even now realize the profound gravity of the situation. The political and the military leaders are frequently at variance. There is a lack of proper co-operation between Berlin and Vienna. We imagine ourselves to be the rider, but we are only the horse. The road between Berlin and Vienna is studded with compromises of doubtful value, and incapable archdukes are given the most important positions.

“The military situation was favourable until the Austrians thought their day of reckoning with Italy had come, and when our own Supreme Command set out to cover themselves with laurels in France.

“Both these undertakings turned out to be political and military failures. For hundreds of reasons an early peace is imperative to us. As matters stand at present only Great Britain and Russia can conclude peace, because France and Italy must be regarded as mere British vassals.

“Since the Cabinets of London and Petrograd remain absolutely deaf to our publicly expressed overtures for peace, we have no choice but to try to utterly defeat the one or the other of these, our principal enemies, either Russia or Great Britain.

“We could have finished with Great Britain if we had had at least 300 first-class submarines, and in that case we might have regarded a war against America with complacency.

“However, even if we possessed, as some optimists believe, as many as 150 first-class submarines, we could not strike a mortal blow at Great Britain and defy the United States as well. Therefore, we have only one choice left: we must force Russia, our second chief enemy, to her knees.

“Russia has been badly hit through the loss of the industrial regions of Poland. If we had exerted all our strength in that direction, and if we had taken Kiev, the economic key to Russia, the Tsar would have had no alternative but to conclude a separate peace, and this would have settled the Roumanian question at the same time.

“With less certainty, but also, perhaps, with less exertion, it might have proved possible to make peace via Petrograd. But what have we done instead? We have squandered our forces. The Eastern theatre of war was denuded of troops, because at first Falkenhayn felt sure he could take Verdun in a fortnight, then by Easter, and finally by Whitsuntide. All our forces have been hurled at Verdun; rivers of blood have been spilt, and now, in July, we are still outside it. And what does it profit us if we do get it? We shall only find other and more formidable lines behind it.

“In the meantime our good Austrians have transferred all their reliable officers and men to the Tyrol, and have left nothing but the rubbish and their inefficient generals to guard the points of danger. And what are the results? A graceful retirement for Salandra and the formation of an anti-German coalition government in Italy on the one hand, and a manifestation of Austrian superiority on the other, but a failure, nevertheless, because the Austrians were not strong enough numerically to get down into the plain. And even if they had compelled the evacuation of Venetia nothing would have been gained. The fate of Italy, as it happens, does not depend on Austria, but on Great Britain, who will rather watch her starve and perish for want of coal than permit her to sue for peace.

“Although all this is perfectly plain to everyone, our Supreme Command seems to be undecided as to whether an offensive with all the means at our disposal should be started on the Western Front simultaneously with one against Russia, or whether it should be directed against Russia only. As far back as last year I exerted all my influence—small though it has become—in favour of an energetic and whole-hearted offensive against Russia.

“Well-informed and far-seeing men have justly pointed out that, if fortune so wills it, the Kaiser, arm in arm with Hindenburg and Ludendorff, could risk a ‘bad peace’ without danger to himself and his dynasty, but it appears beyond doubt that the influence of Falkenhayn is all-powerful.

“ ... If we were to arrive at an understanding with Russia to-day, we should be able to go on with the war against Great Britain for a long time to come, and, by means of unimpeded submarine activity, to carry it to a successful issue. In that case we could also estimate the danger threatening us from America at as low a figure as many who are unacquainted with the position are putting it now.

“Thus it is my view that it is necessary to abandon definitely the belief that the war can be brought to a successful issue on the Western Front, and without first defeating Russia. It is greatly to be deplored that many observers assert that the Western Powers will make peace when they have found out that the big offensive now in progress remains without any visible success. Only people who do not know Great Britain can put forward such a proposition, but how many people are there at the Wilhelmstrasse who do know Great Britain? Very few indeed, if any....

“ ... You said you would rejoice to hear from me, and I can only regret with all my heart that I have not been able to report anything to you in which it would really be possible to rejoice.”

A still more serious note is struck in the following letter written in September, 1916:

“Very many thanks for your welcome letter of yesterday’s date, with the contents of which I agree in every detail.

“I quite share your belief that Hindenburg and Ludendorff must each feel like a great physician who is only called in when it is too late. Two declarations of war within 24 hours were necessary to bring about this change which the German people had been looking forward to for months and months. The Chancellor is justly reproached for not having had the courage to insist upon the appointment of these two men and on the resignation of Falkenhayn long ago. It is contended that he should have tendered his own resignation if his recommendations were refused, and his neglect to do so makes him principally responsible for the fate that is in store for us. For a long time back I have kept emphasizing the need for transferring our main activities to the Eastern theatre of war, and for definitely settling these personal questions.

“The Chancellor clings to his post because he believes that there is no one better qualified than himself to be at the head of affairs. Such an attitude reminds me of the old gentleman who neither wanted to die nor to retire from his post as president of the Berlin Chamber of Commerce, and who bitterly complained to those who came to congratulate him on his ninetieth birthday that he was compelled to stick to his office, in spite of his advanced years, because he could not see a better man to succeed him.

“It is very sad that we have arrived at such an impasse, and I am convinced that the present internal political situation is untenable. No German Chancellor can possibly carry the business of the country to a successful issue if, in the midst of a terrible war, he is obliged to fight against an opposition consisting of the Conservatives, the representatives of the Heavy Industries, and the majority of the National Liberals.

“As far as I can make out, the Chinese wall surrounding the Kaiser has not disappeared with the exit of Falkenhayn from the scene. No one is granted access to him who knows something about the events that led up to this war, and who, in the interests of his dynasty as well as his own, would tell him the unvarnished truth. We are, after all, a constitutional country. It would doubtless be best to transfer General Headquarters to Berlin, but, of course, people are not wanting who object to such a proceeding, asserting that it would enable outside influences to acquire a hold on the conduct of affairs.

“How badly people are informed with regard to the actual situation was brought home to me when I was in Berlin a short while ago, and when X. contended with great emphasis that we should have to attach more value to huge indemnities than to annexations. If it is possible that the men round the Kaiser count on heavy indemnities even now, it shows how sadly they misjudge the real state of affairs.

“My feeling tells me that the present Cabinets, containing as they do men who are compromised by their actions since the outbreak of war, cannot give us peace. How can anyone imagine that men like Bethmann, Asquith and Grey, who have hurled such incredible insults at each other, can ever sit together at the same table?

“The question as to who is to succeed them, of course, abounds with difficulties.

“I recently met some Austrian gentlemen in Berlin. They are completely apathetic; they have lost all interest in the future, and they themselves suggest that Germany should no longer permit Austria to have a voice in the conduct of affairs. Her food supply will only last until March 1st. After that date she will depend on Hungary and ourselves for her food. She fears that she is not likely to get much, if anything, from Hungary; on the other hand, she feels sure that we are compelled for our own sake to save her from famine.

“Constantinople, too, has only supplies for a few more weeks.

“With us at home the paraffin question is becoming very serious. In country districts it may be possible to tell people to go to bed at curfew time, but the working population of our large cities will never consent to dispense with artificial light. Serious riots have already taken place in connexion with the fat shortage.

“I am afraid that Great Britain is trying to bring about such a change in the situation as will enable her shortly to tell the small neutral countries that no one in Europe will be permitted any longer to remain neutral, and that they must make up their minds to enter one or the other of the two big syndicates. You see nothing I can write to you has even a semblance of comfort in it. I regard the future with the utmost apprehension.”

In contrast to such views as were expressed in the foregoing letters, the men who were at the head of affairs at that time maintained that nothing but the application of rigorous force, or, in other words, the unrestricted use of the submarine weapon against Great Britain, would lead to a successful termination of the world war. The propaganda in favour of that measure is still in everybody’s memory. Whatever may be said in defence of the authors of this propaganda, there is one reproach from which they cannot escape, viz. that they left no stone unturned to prevent their opponents from stating their views, and this, on account of the strict censorship to which the expression of every independent opinion was subject, was not a difficult matter. Their one-sided policy went so far that, when a pamphlet on the question of submarine warfare was written by order of the Admiralty Staff and circulated among a number of persons, including leading shipping men, Ballin was purposely excluded, because it was taken for granted that he would not express himself in favour of the contents. It is not likely, however, that the methods of reasoning put forward in this document—which was much more like an academic dissertation than an unprejudiced criticism of a political and military measure affecting the whole national existence of Germany—would have induced Ballin to change his views on the submarine war. Once only, and then merely for a brief period, was he in doubt as to whether his views on that question were right, but he soon returned to his first opinion when he found that he had been misinformed regarding the number and the effectiveness of submarines available.

The inauguration of unrestricted submarine warfare in January, 1917, not only put a sudden end to the peace movement in which Ballin, as has been explained on a preceding page, played an important part, but also to the attempt of President Wilson to bring the two sides together. The details of the President’s endeavours have meanwhile become public property through the revelations of Count Bernstorff, the German ambassador in Washington. In both instances a few weeks would have sufficed to ascertain whether the proposed action was likely to bring about the desired end, and the former attempt had even led to the impending establishment of mutual contact between the belligerents. The inability of the German political leaders to avail themselves of this opportunity, or at least their failure to do so, has doubtless been the greatest misfortune from which Germany had to suffer during the whole war.

Notwithstanding the successful exploits of the submarines, Ballin’s apprehensions never left him, and they were not allayed by the development of the position at home. The letter published below, which he wrote to the Chief of the Kaiser’s Civil Cabinet, believing that this gentleman would be most likely to assist him in laying his views before the Kaiser, admirably sums up his feelings, and testifies both to his real patriotism and to his presentiment of the fate that was to overtake his country:

“Your Excellency,

“April 4th, 1917.

The internal conditions of our country fill me with grave alarm, and I therefore venture to approach Your Excellency privately with this expression of my apprehensions.

“I do not doubt for a moment that our competent authorities intend to extract the utmost advantage to ourselves from the situation which is developing in Russia. This Russian revolution may enable us to bring the war to a close, and to obtain peace terms which, relatively speaking, are not unfavourable.

“What Germany has achieved in this war is beyond all praise. A glance at the map shows how small she is compared with her opponents in the field; and yet she is bravely struggling against a world in arms in which even the few countries that have remained neutral are not our friends. It is, indeed, one grand epic. But unfortunately the position at home becomes more untenable every day.

“If we find ourselves compelled to reduce the bread ration still more, you will, I am sure, agree with me that the bulk of the people will suffer enormously through being underfed. In Austria, conditions are said to be worse still, and I am afraid that we shall even have to part with some of our stores to feed her population.

“At first sight the Chancellor’s speech in the Prussian House of Deputies appeared to be somewhat too comprehensive in its range of vision; but a few days later, when the news of the Russian revolution arrived, it almost seemed that his words had been prompted by Divine inspiration. After this Russian news had become known, it would have been impossible for him to make this speech without giving rise to the suspicion that these events had cast their shadow in advance on the Prussian Parliament. Unfortunately, however, this favourable development was not followed up by the right steps. On the contrary, the Chancellor, after his breezy advance in the House of Deputies, has now retired from the position he then took up, thus creating the impression that our policy is constantly shaped by all sorts of mutually contradictory views and currents. Up to now, although the people have to suffer greatly through the shortage of food and fuel, their patriotism has put up with it because of their faith in the promised electoral reforms. It would have been so simple to reiterate this promise, and at the same time to point out that so many other things claimed precedence during the war, and that so much was at stake, that it would hardly be advisable to introduce this great reform at present, seeing that there was no time to give proper attention to the careful working out of all the details.

“If now, however, such bills as those dealing with the entailed property legislation and with the repeal of the Polish laws are to be discussed, such a postponement is no longer justifiable.

“It almost seems as if the Government is unable to read the signs of the times. The fate of the Prussian suffrage reform bids fair to resemble that of the sibylline books, of which it was said that the longer one hesitated to buy them the more expensive they became. To-day the people would still be content to agree to plural voting, but when the war is over, and when the Socialist leaders are demobilizing their men, inducing tens of thousands of them, decorated with the Iron Cross, to air their grievances, it will be too late to stop the ball from rolling. It is true that people say revolutions are impossible in the era of the machine-gun. I have no faith in this theory, especially since the events that have happened in Petrograd have become known to us. That, in a country like Russia, the reigning family could disappear from the scene without any opposition, and without a single Grand Duke or a single soldier attempting to prevent it, is certainly food for much reflection.

“I hope Your Excellency will pardon me for thus frankly expressing my anxieties, but I considered it my duty to let Your Excellency know my feelings.”

In May, 1917, Ballin accepted an invitation received from the Supreme Army Command and paid a visit to General Headquarters, where he found a great deal of discontent prevailing with the policy of the Chancellor. He also met the Kaiser, and reports on his visit as follows:

“After sharing the Kaiser’s repast—which was plain and on a war diet—I had several hours’ private conversation with His Majesty. I found him full of optimism, far more so than I thought was justified. Both he and Ludendorff seem to put too much faith in the success of the submarines; but they fail to see that this weapon is procuring for us the enmity of the whole world, and that the promise held out by its advocates, viz., that Great Britain will be brought to her knees within two months, is, to put it mildly, extremely doubtful of realization, unless we can sink the ships which carry ammunition and pit-props to England.”

In a letter addressed to a gentleman in the Kaiser’s entourage he gave a further detailed account of his views on the optimism prevailing in high places:

“I cannot help thinking of the enthusiastic and at the same time highly optimistic letter which you had the great kindness to show me last night. My opinion is that the gentlemen who form the entourage of His Majesty ought not to view matters as that interesting epistle suggests that they do.

“You are a believer in the statistics of Mr. X. I took the liberty of telling you last night that statistics are a mathematical form of telling a lie, and that, to use the expression of a clever Frenchman, a statistical table is like a loose woman who is at the service of anyone who wants her. ‘There are different ways of arranging figures,’ as they say in England. I do not know Mr. X, neither do I know his statistics, but what I have been told about them seemed foolish to me. If we carry on the war, and particularly the unrestricted submarine war, on the basis of statistics such as he and other jugglers with figures have compiled, we are sure to fail in the ends we are aiming at.

“As concerns the unrestricted submarine war itself, I still maintain the view I have always held, viz., that we shall never succeed in starving out Great Britain to such an extent as to force her Government to sue for a peace of our dictation.

“I have just had a visit from a Danish friend whom His Majesty also knows quite well, and who, together with a committee of delegates sent by the Danish Government, will be leaving for England to-night. The two members of this committee who represent the Ministry of Agriculture have been instructed, inter alia, to complain that Great Britain now imports much less bacon, butter, and other articles from Denmark than she had undertaken to do, and that the prices she pays for these imports are much below those originally stipulated.

“Apart from the cargo carried by two small steamers that have been torpedoed, Denmark has been able, notwithstanding our submarines, to supply Great Britain with all the food required of her. The vessels remain in territorial waters until a wireless message informs them of the spot where they will meet the British convoy which is to take them safely to England. They have to pass through only a small danger zone which, as I have said, has hitherto proved fatal to no more than two vessels.

“This fact, to my mind, points to the limits of the success obtainable by our submarines. I have constantly explained, especially to the Chief of the Admiralty Staff, that I can only regard the submarine as a successful weapon if it enables us to cut off the British supplies of ore from Spain and Sweden, and also those of pit-props, because without the possession of these two necessities, Great Britain is no longer able to continue the war. I have been assured that our submarines would achieve this task, even if torpedo boats were employed as convoys; but the experiences gained so far do not bear out these predictions. We succeed, indeed, in sinking a few vessels out of many; but suppose there are ten ships in a convoy, it still means that nine of them, with their supplies of ore and pit-props, safely reach their destination.

“Let me repeat, the starvation of Great Britain is impossible; because, in addition to her own harvests, she only needs from twelve to fifteen thousand tons of cereals every day, and these she can, if necessary, always obtain at night-time through her Channel service, via Spain and France. Even this necessity will hardly arise, because two medium-sized steamers are sufficient to carry the fifteen thousand tons, and things would have to be very bad, indeed, if these did not succeed in reaching a British port. And if our statistical tricksters juggle with crop failures, please do not forget that new harvests are soon to be expected, and that it will not do always to count on crop failures.

“You will be doing a good work if you can persuade people at headquarters to abandon their belief that Great Britain can be starved to submission. Unfortunately their other belief, viz., that we can cut off her supplies of ore and pit-props, will also have to be abandoned.

“Certainly, the achievements of our submarines have been amazing. At their present rate they will enormously diminish the British tonnage figures, and raise the hatred of everything German to boiling point; but they will not, unfortunately, lead to such an end of the war as our Pan-Germans desire. It is a thousand pities!

“When the submarine problem began to assume practical shape, I pointed out to the Chief of the Admiralty Staff that, to be successful, the submarine war must be brief; that its principal object was not to sink a large number of ships, but to produce such a feeling of alarm in neutral countries as to prevent them from risking their ships (1) because of the great value of tonnage immediately after the war, (2) because of the impossibility of finding crews, and (3) because of the insurance difficulty. These conditions of success were, indeed, realized during the first four weeks; but since that time people, as I had predicted, have got used to the danger. The crews are coming forth again, the insurance companies issue their policies again, and the ships are put to sea again.

“If the Admiralty Staff, who is doubtless in possession of the figures, would submit to you a list of the number of vessels laid up in Dutch and Scandinavian ports on March 1st, owing to the submarine danger, and another one showing the position as it is to-day, you would discover that, at a low estimate, at least 30 per cent, of the cargo vessels are running again, and that, after another month or so, the number of those still idle will have dwindled down to 20 per cent, or less.

“These are my views on the situation. If we have no other means of finishing the war but the submarine menace, it will go on for years. I should like to protest in anticipation against any suggestion to the effect that I am trying to minimize the achievements of the submarines. On the contrary, I have nothing but the highest admiration for them, and I really find it quite impossible to praise in ordinary prose all that our country has done during this war; the whole achievement is one grand epic.

“Within the next few months the problem will have to be solved how to put an end to this devastating catastrophe which is ruining the progress of the world. There is no need for me to tell you that the position of Germany has grown considerably worse through the active intervention of the United States. The fact that this enormously wealthy country with its one hundred million inhabitants has turned against us is fraught with the most dangerous consequences. Now it will no longer be possible for us to continue the war for several more years, and then to enforce a peace on lines such as are laid down by a noisy section of our people, unless we succeed in exploiting the extremely fortunate change in the Russian situation in such a way that the vast resources of that country will be at our disposal.

“This letter has become longer than it ought to be, but the gravity of the subject with which it deals must be my excuse for going into so many details. Perhaps I may avail myself of some future occasion to acquaint you with my hopes and fears on other political matters; because, as I have already explained, the present state of affairs makes it urgently desirable that the gentlemen whose privilege it is to be near His Majesty should see things as they really are, and not as they would wish them to be.

“Compare, if you have a chance, the advertisement pages of an English paper with those of a German one. I have just come across a copy of the Daily Telegraph which I beg to enclose for this purpose. I have been in the habit of studying these advertisements for many months; they are excellent means of gauging the difference in the effects of the war on the two countries.”

During the remaining part of 1917, and during the first months of 1918 as well, Ballin took an active interest in the preparations for the Bill dealing with the rebuilding of the German mercantile marine; in other respects, especially with regard to political matters, the course of events condemned him to remain passive. His notes during this period are few. I select the following passages from them:

“ ... July 17th, 1917. The Erzberger resolution which was chiefly aimed at Helfferich and the naval authorities has made the Chancellor’s position untenable. Everybody turned against Herr von Bethmann, and General von Ludendorff informed me by telephone that he would resign if Bethmann remained in office.

“I then had a lengthy talk with His Excellency v. Valentini who agreed that it was necessary for the Chancellor to retire; but he found it just as difficult as other people to name a suitable successor. Vienna had raised strong objections to the appointment of Prince BÜlow, and, acting upon Valentini’s suggestion, I made up my mind to approach the Kaiser with a view to discussing with him the situation which appeared to me fraught with the greatest danger. I therefore asked His Excellency von Reischach to arrange such a meeting for me, but on Thursday night I was rung up from headquarters and informed that Hindenburg and Ludendorff were already on their way to the Kaiser to report to His Majesty on this subject. Under these circumstances I did not like to interfere, and on Friday I withdrew my application for an interview. The Kaiser has told the two generals that he had accepted Bethmann’s resignation the previous evening. He is thus able to save himself from a perplexing situation by contending that he had to give in to the wishes of the Supreme Army Command.

“ ... July 25th, 1917. Yesterday I called on Prince BÜlow at his Flottbek residence, and found him looking better than I had seen him for years. After I had left him I had the feeling that the Prince, who regards the whole situation with a great deal of misgiving, would even be willing to accept the post of Foreign Secretary under Michaelis himself, in order to be able to guide our foreign policy along sensible lines once more. Contrary to the reserve which he formerly showed, he now condemns Bethmann’s policy with great bitterness. Bethmann, he maintains, by yielding to the demand for universal suffrage, acted like a banker on the day before bankruptcy who would try to save himself from disaster by using his clients’ deposits.

“The Mexico telegram[5] he treated with a good deal of sarcasm, remarking that it was the maddest prank since the exploits of the Captain of KÖpenick, with which I agreed. If anyone, he said, ever wrote a comedy on the subject, he would scarcely venture to lay the plot in modern times, but would go back to the period when pigtails and wigs were the fashion.

“ ... July 30th, 1917. I had several messages over the telephone, as well as a visit, from Lieutenant-Colonel von Voss, the Chief of Staff with the Altona Army Command, who wanted to consult me as to whether Prince BÜlow should be offered the post of Foreign Secretary. I am afraid, however, that there is not much chance of his being appointed. The Prince shares this opinion, and would not like the Press to make any propaganda in his favour.

“ ... Sept. 14th, 1917. In the meantime, on August 19th, the Kaiser has been to Hamburg on a one day’s visit. He came from Heligoland, and was brimful of optimism.

“He pretended to be very well satisfied with his new Chancellor, and was very optimistic as to a German victory, an attitude which, I am afraid, is not in the least justified by the situation as it is.”

In the month of September, 1917, Ballin wrote a memorandum for Dr. Schwander, the newly appointed Secretary of State for National Economy. Apart from politics this document deals with economic matters, and in particular with the legislation concerning these during the period of transition which would succeed the close of the war. Ballin gave a great deal of thought to these questions, and I shall refer to them later on. Meanwhile I will quote the text of the memorandum:

"September 6th, 1917.

“The fall of Riga shows once more how far superior our military achievements are to the work performed by our politicians. With the dispatch of the Mexico telegram their folly appeared to me to have reached its height; but the descent from that point is but slow. The news recently published by the Press to the effect that the Federal Council is to deal with the question of the constitutional and administrative reforms which are to be granted to Alsace-Lorraine, makes me fear that some big political blunder is going to be committed again. It is evidently believed that, if Alsace-Lorraine were to be established as an independent federal state with perhaps some South German prince as its Grand Duke, such a measure would remove an obstacle to peace. I, however, consider it a great tactical mistake to attempt such a solution of the Alsace-Lorraine problem before the war is over. We must never lose sight of the fact that each one of the leading actors in the political drama has to play to his own gallery, and that therefore at the conclusion of peace—which in my opinion can only be one of compromise—French diplomacy must be able to show up something which the man in the street can be induced to regard as a succÈs d’estime. No doubt it would be easier and more to our liking to solve the problem in our own way, and at the initiative of our Government; but by doing so we would deprive ourselves of another possibility for compromising which we ought to keep in order to enable the French to retire from the struggle with a fair measure of success.

“We have a bad habit of spoiling the chances of peace by premature actions intended to help it on and to prepare the way for it. Just think of what we did in Poland! In the same way we deliberately diminished the great value of the important asset which we possess in the shape of Belgium when we set up the Council of Flanders and introduced the administrative partition of that country.

“Besides these political matters there are others which were better left alone for the present. I am thinking of the steps taken to regulate our economic restoration after the war. War corporations are springing from the ground like mushrooms after rain, and the preparations made in order to solve the difficult economic post-war problems have an ugly tendency toward establishing too many Government-controlled organizations. To my mind the appointment of a ‘Government Commissioner for the period of Economic Transition’ is altogether superfluous. We must refrain from all attempts at interfering by artificial means with the natural development of events. This, however, is precisely what the Commissioner would have to do. He would have to act according to instructions received from the Bank of Germany or from some specially created body dealing with the question of the foreign exchanges and the provision of foreign bills.

“My belief is that our foreign exchanges which have so completely got out of order will prove an excellent means of diminishing the hatred against us and of making our enemies less disinclined to resume business with us. The Americans who are now able to obtain goods to the value of M 6.20 for their dollar, instead of M 4.20, as they used to do, will soon discover their liking for us again.

“Another point is that the coming peace, even if we derive no other gain from it, will enormously raise German prestige all over the world. Prussia became a European Power after the Seven Years’ War, in spite of the fact that the peace treaty brought her neither a territorial nor a financial gain, merely confirming the right of Frederick the Great to the possessions he had defended in the war. Prestige, however, means credit, and this circumstance makes me believe that all these anxious discussions of the foreign exchange question and of the need for controlling German payments abroad are just as superfluous as the Government control of our economic activities during the period of transition.

“The nations now at war will be impoverished after the war, and the state of our exchange and the high prices of raw material will compel us to live from hand to mouth as far as the importation of raw material is concerned. Pending the return of normal conditions, no sensible manufacturer will want to import more raw material than he urgently requires.

“I therefore think we ought to try to induce the Government to desist from its proposed control of trade and industries, and to restore the old conditions. If the Government’s proposal to carry on under its own management large sections of our import and export trade—in order to make these valuable sources of profit available for the reduction of its debts—were allowed to materialize, our economic doom would be certain, however attractive the plan might be in view of the huge national debt. One must be careful not to ignore the fact that the flourishing state of trade and manufactures is always largely due to the existence of personal relations.

“If I think of the lessons of the past forty years—a period during which the freedom of trade, the freedom of industrial enterprise, and the freedom of shipping have led to marvellous successes and to the accumulation of huge wealth—I ask myself: ‘How is it possible that a wise statesman could seriously occupy himself with the plan of establishing a Government-bound system in place of it?’ How, I ask you, can a State-managed industrial organization avail itself of the advantages to be had when trade is booming, or to guard itself against the losses when there is a slump? What will be the attitude of such an organization towards dealings in futures and speculation, both of which are indispensable forms of modern business enterprise? True, it has been suggested that these difficulties could be overcome if some business men were requested to accept appointments under this system, and if so-called ‘mixed’ concerns worked by the co-operation of public funds and private capital were established. May Heaven grant that this will never be done! I am sure you have had even more to do than I with business men who had been promoted to the higher dignity of Government officials. Most of them have turned out complete failures in their new spheres; they have become more bureaucratic than our bureaucrats themselves; their initiative and their eagerness to take upon themselves responsibilities have never lasted very long. Let there always be a fair field and no favour! Personal relations and personal efficiency are all that we need for the rebuilding of our national economic system. The ‘mixed’ concerns are bad because they lack the necessary elasticity, because they disregard the personal equation, and because they impede the indispensable freedom of action.

“I am quite prepared for these views of mine to meet with much criticism. People will say: ‘All that is very well, but the Government’s huge indebtedness compels it to take recourse to extraordinary measures.’ Quite right, but would it not be much wiser to reduce this indebtedness by increasing direct and indirect taxation, instead of depriving those who have proved during the past few decades what they can do of the means that have made them so efficient?

“Even among the efficient business men, unless they be born geniuses, a distinction must be drawn between those who can make profits and those who can organize. The former kind—who are, moreover, but few and far between—will never submit to the personal restrictions to which they would be subjected in state-managed or ‘mixed’ concerns. The second kind alone, however, would never make any concern prosper.

“Another consideration is that the enemy countries would view with much suspicion any such institutions controlled partly or wholly by the Government. I remember quite well the scant respect with which the French delegates were treated at the International Shipping Conferences before the war. Everyone knew that the big French shipping companies, owing to the huge Government subsidies, had to put up with a great deal of supervision on the part of the Government, and that they could often vote neither for nor against the most important proposals with which the Conference had to deal, because they had first to obtain the consent of the Government commissioner. They were, therefore, simply ignored, as it was clear that they could raise no counter-proposals at their own initiative.

“And truly there is every reason for us to use the utmost caution whenever any questions connected with the reconstruction of our country are concerned. The excellent Dr. Naumann, with his ‘Berlin—Bagdad’ slogan, has already smashed a good many window panes which will have to be paid for after the war by the producing classes. The suggestion that an economic union of the Central European countries should be established was put forward at a most inopportune moment, and the propaganda in its favour was bound to bring about the retaliatory measures agreed upon by our enemies at the Paris Economic Conference.

“The resolutions of this Conference were of little practical importance to us until the day when America entered the field against us. If the United States assents to them, it will become possible to enforce them, and for this reason I am watching the further development of the economic question with growing concern. I maintain that peace negotiations should only be started after a previous agreement has been arrived at between the belligerents to the effect that, on the conclusion of peace, the commercial relations formerly existing between them should be restored as far as possible, and that the resolutions passed at the Paris Economic Conference and at the Central European Conference should be rescinded. Such an attitude, however, can only be taken up by our delegates if they agree that the former commercial treaties, no matter whether they are still running or whether they have elapsed, should automatically become valid again for a fairly extensive period of time after the close of the war. The disadvantages which some of these treaties involve for us are easily outbalanced by the advantages secured by the others.

“Our Government cannot be reminded too often that it is necessary to consult experienced men of business in all such questions. Since the early days of the war I have vainly tried to convince Herr v. Bethmann of this necessity. After all, nobody can possibly be an expert in everything. Yesterday, when reading the letters of Gustav Freytag to his publisher, Mr. Hirzel, I came across the following admirable piece of self-criticism: ‘I do not know yet what is to become of my work; but I fear I am doing what others, better qualified than I, ought to be doing, and that I am leaving undone what I ought to do.’ Every great leader in our political and economic life must have experienced that it is extremely unsatisfactory to waste one’s time and energy on work which another man could do just as well as, or even better than, oneself. This the Government should remember whenever it attempts to interfere with the big industrial combines, such as trusts, syndicates, etc. Wherever a syndicate is necessary in the best interests of any industry, a leader will be forthcoming who will create it; and only in cases where inferior minds, acting for selfish reasons of their own, do not wish to acknowledge the need for combining, the Government should be asked to exercise whatever pressure it considers advisable in order to further the great aims that are involved.

“I am afraid that after the war we shall lack the funds needed for the solution of the traffic problems with which we shall then be confronted, especially with regard to our inland waterways. At any rate, if we do build the necessary canals immediately after the war, we shall find ourselves compelled to charge such high rates to the vessels using these waterways that their advantages will largely tend to become illusory. Even as it is now, our trade and our manufactures are seriously handicapped by the high canal dues existing, by the tugboat monopoly, etc. A really far-sighted policy which would make it its principal object to assist the progress of our foreign trade would have to guard against the mistaken idea that the levying of high rates was the only means of obtaining interest on the capital invested. After all, even the turnpikes had to be abolished in the end.

“The agitation in favour of separating from Russia the Ukraine, Finland, and other parts inhabited by alien peoples—an agitation which is becoming noisier every day—troubles me very much. Since the early days of the war I have maintained that it must be our main war aim to detach Russia from the Entente, and that we must endeavour to establish close relations between our own country and Russia so that the two of us shall be strong enough to face a possible alliance between Great Britain, the United States, and France. This should be our aim even now. But if we are going deliberately to dismember the Russian Empire and to parcel it out into a number of independent units, our political influence after the war will be slight indeed, and the result must necessarily make itself felt to the detriment of our whole economic life.”

At Ballin’s suggestion, the members of the Reichstag were invited to attend a meeting which was to be held in Hamburg during the summer of 1918. Large sections of people in the three Hanseatic cities viewed with grave concern the plans which the Government entertained for the economic development after the war, and the meeting had been called to draw the attention of the visitors to this state of affairs. Three principal speeches were delivered, and at the close of the meeting Ballin briefly recapitulated the main arguments against too much Government interference. Much of what he said on that occasion, and much of what he had written in the memorandum quoted above, has been borne out by the events of the recent past, even though the actual terms of the peace imposed on Germany were much more unfavourable than he had expected them to be. In addressing himself to the Vice President of the Reichstag, Geheimrat Dove, and the large number of the elected representatives of the German people who accepted the invitation, Ballin said:

“We should be glad if you would see to it that the Government does not put a halter round our necks, and that it refrains from the dangerous attempt to employ barrack-room methods where economic questions of national and international importance are at stake. Let us have air, and light, and freedom to act; and we, by availing ourselves of our relations with the overseas countries, shall be able to carry out the work that lies before us....

“ ... I am convinced that all the measures which are contemplated to stabilize economic conditions during the period of transition from war to peace will do more harm than good. If carried into practice, they will merely prepare the soil for an economic struggle to succeed the present war of arms. We need a peace that is doubly secure! We cannot ask our enemies to give us freedom where we impose compulsion. We cannot fight for the freedom of the seas, and at the same time surround Central Europe with a barbed wire.

“I do not wish to deny that in order to carry out our economic tasks a certain amount of Government control will be necessary. That, of course, goes without saying; but anything beyond it is an unmixed evil. If it is said to-day that the measures to be adopted during the period of economic transition are, in some instances, intended to remain in force for three years, and if it is announced semi-officially that the thousand and one war corporations are to be made use of for the purposes of this policy, and that their disappearance is to be very gradual—I can only sound a serious note of warning against any such designs. When the war is over all those who can do efficient work will return to their normal occupations; and those who then prefer to remain attached to the war corporations in one capacity or other are surely to some extent people who have discovered some hidden charms in these institutions, or, if not, they are persons who, fearful of the risks connected with the unfettered interplay of forces, feel that they are better off under the protecting wing of the Government. If you are going to entrust the future of our country to such organizations for better or worse, the economic war after the war, as I have said before, will be sure to follow, and you will have to face a war that will last years and years.”

As regards the closing months of the war—which are also the closing months of Ballin’s life—it must suffice to refer here to one event only; one, however, which is of dramatic significance. I am speaking of Ballin’s last meeting with the Kaiser. His notes on this subject, roughly sketched though they are, require no further comment. I reproduce them in full:

"Hamfelde, August 25th (Sunday), 1918.

“Last Tuesday Herr Deters[6] rang me up to ask me on behalf of Hugo Stinnes if I would meet him in Berlin on the Thursday. Lieut.-Colonel Bauer, one of Ludendorff’s aides-de-camp, a gentleman largely responsible for the Pan-German leanings of the General and for his close association with the interests of the big manufacturers, had been to see Stinnes, and on the strength of the information he had received from Lieut.-Colonel Bauer he thought it advisable to have a talk with me. I declined the invitation because I expected that the work they wanted me to do would be anything but pleasant.

“Next morning Herr Deters rang me up again and told me that Stinnes would call on me in Hamburg on Friday morning.

“I left for Hamfelde on Wednesday afternoon, but returned to town again on Thursday, because Stinnes had arranged to call on me as early as 10.30 a.m. on Friday.

“The proposed meeting thus took place on Friday, August 23rd, from 10.40 a.m. to 1.15 p.m. Stinnes, with admirable frankness and directness, started our conversation by stating that the military situation had become much worse. Our troops, he said, began to fail us in our task, and the number of deserters had been very large lately (he mentioned, I believe, that their number was 32,000). Ludendorff had told the Crown Prince the plain truth; but it was still necessary to explain the true state of affairs to the Kaiser, and to make it clear to His Majesty that Hertling, who was completely laid up with sickness, could no longer effectively fill his post. The real work was done by his son, Captain v. Hertling, and no efforts were being made to come to a cessation of hostilities. In other directions, too, matters were drifting towards a catastrophe. The Minister of War, v. Stein, lacked the necessary authority. In many instances the men called up did not enlist at all; in Silesia large numbers of them had concealed themselves in the woods and forests, and their wives provided them with food, while no energetic steps to check these occurrences were taken by the Chief Army Command. I replied to Stinnes that if Ludendorff agreed I would be ready to undertake the unpleasant task of informing the Kaiser, but that it would first be necessary that Ludendorff and myself should come to an understanding as to whom to propose to His Majesty for the Chancellorship.

"Continuation. Hamburg, August 26th, 1918.

“Stinnes said he thought that Ludendorff had Prince BÜlow in his mind. I told Stinnes that BÜlow, in my opinion, might perhaps be suitable at the head of a peace delegation, but that it was too late to think of him as a possible Chancellor, and that the German people—more particularly the Socialists—had not now the requisite confidence in his ability to fill the post of Chancellor. Neither would he be acceptable to our enemies. It would be difficult to persuade Great Britain, the United States and France that a prince, especially Prince BÜlow, would seriously carry out the democratization of Germany. If, however, we really were to discuss peace at last it would be necessary that the office of Chancellor should be vested in a man to whom our enemies could take no possible exception. Stinnes perfectly agreed with me in this matter.

“We continued to discuss other possible candidates for the post, but we could not agree on anyone. Finally Stinnes proposed that we should both go to Berlin and there continue the discussion together with Lieut.-Colonel Bauer, Ludendorff’s representative. He would in the meantime report to Berlin about our conversation, and he was hopeful that we could see Bauer either to-night (Monday), or to-morrow (Tuesday, August 27th).

“This morning Stinnes informed me through Deters that he had sent me a wire stating that the proposed meeting could not take place until Monday next, September 2nd, at 8 p.m. He proposed that we should have a preliminary meeting at the Hotel Continental at 7 p.m. the same evening. I suggested that it would be better to fix this preliminary meeting at 6.30 p.m.

“I must add that Bauer’s (that is Ludendorff’s) suggestion was that I should not see the Kaiser by myself, but together with Stinnes, Duisburg, and Krupp v. Bohlen.

“I replied to Stinnes that I considered it very inadvisable for such a deputation to visit the Kaiser, who would never tolerate that four gentlemen—two of whom were perfect strangers to him—should speak to him about such matters. It would be better that Herr v. Bohlen, or, if Ludendorff attached special value to it, I myself should call on the Kaiser in private, and that either Herr v. Bohlen or I should then endeavour to induce the Kaiser to see the other three gentlemen as well.

“Stinnes was greatly depressed and took as grave a view of the situation as I did myself.”

Ballin’s notes on the Berlin meeting are confined to a few jottings, from which it appears that not Lieutenant-Colonel Bauer but Major v. Harbou in his stead took part in it, and that the question of selecting a suitable candidate for the Chancellorship proved impossible of a satisfactory solution. As a last resort, if everything else should fail, Ballin thought of proposing Stinnes himself, because in his opinion the situation demanded a man of dictatorial character and with the authority of a dictator.

Concerning his interview with the Kaiser, Ballin wrote down the following notes:

“I arrived at WilhelmshÖhe on the morning of September 5th, and I was asked to ‘report’ to the Kaiser at 12.45 p.m. This expression was chosen because the new head of the Kaiser’s Civil Cabinet, Herr v. Berg, evidently wished to invest my visit with an official character which would enable him to be in attendance. After a while, however, the Kaiser became impatient and did not wish to wait till the hour appointed for the interview. So I was requested by telephone to hold myself in readiness by 11 o’clock.

“I went to the Castle at that hour and waited in the room of the aide-de-camp until the Kaiser came and asked me to go for a walk with him. However, Herr v. Berg was also there and accompanied us. Consequently the conversation lost much of the directness which would have been highly desirable in the Kaiser’s own interest, as well as in that of the country.

“I found the Kaiser very misinformed, as usual, and full of that apparent buoyancy of spirit which he likes to display in the presence of third persons. The facts have been twisted to such an extent that even the serious failure of our offensive—which, at first, had depressed him very much—has been described to him as a success. It is now intended to retire to the old Hindenburg line, so that the only result of the offensive has been the loss of several hundreds of thousands of valuable lives. All this, as I have said, is dished up to the poor Kaiser in such a fashion that he remains perfectly blind to the catastrophic effect of it.

“He now puts his whole trust in Herr v. Hintze, whom he evidently looks upon as a great light.

“I told the Kaiser of my grave misgivings and made him clearly understand that I did not think there would be much use in entering into peace negotiations with Great Britain. I urged that no time should be lost in immediately approaching Wilson, who was an idealist and who had no territorial aspirations in Europe. If, however, the war should continue much longer Wilson would most probably become subject to the influences of a war party, and then we could no longer hope that he would still insist upon a settlement along the lines of his idealist programme.

“The Kaiser agreed that my views were well founded, but he thought we ought not to enter into peace negotiations before the approach of autumn, by which time we should have returned to the safe position afforded by the Hindenburg line. Then, he thought, we should avail ourselves of the offer of mediation which had been made by the Queen of Holland.

“Whenever I was too frank in my criticisms and suggestions, Herr v. Berg skilfully interposed. He declared to me when the Kaiser had left that it would not do to make His Majesty too pessimistic.

“I also discussed with the Kaiser the question of doing away with the restrictions imposed upon the sale of perishable articles of food, such as butter, eggs, etc.; and I pointed out to him that the fixing of maximum prices and the issuing of regulations dealing with illicit trading merely forced the people to pay exorbitant prices, at the same time helping those engaged in underhand trading to amass huge fortunes. On this subject, too, the Kaiser fell in with my own views, and it was decided to release at least the perishable articles, and to allow them to be sold once more through the ordinary channels without restriction.

“The Kaiser also declared that this war would soon be followed by another, to which he referred as the Second Carthaginian War. He spoke a great deal of an Anglo-American alliance which would, of course, be directed against Japan, and the views on political subjects which he expressed in this connexion showed that he is being very badly advised indeed.

“Herr v. Berg is obviously conservative and Pan-German in his politics, and it seems that his influence is predominant at Court. Only on the Prussian suffrage question did he agree with my own standpoint, which is that universal suffrage must be granted now that the King has promised it.

“Since the Kaiser and the Kaiserin, on account of the latter’s illness, were dining alone, I joined the so-called ‘Court Marshal’s table,’ together with the Countesses Keller and Rantzau, the gentlemen-in-waiting on the Kaiser, and the physician-in-ordinary and the chamberlain of the Kaiserin. The duty of acting as court marshal fell to General v. Gontard, as Herr v. Reischach had unfortunately fallen seriously ill.”

In order to illustrate further what has been shown to be Ballin’s views on the character of the Kaiser, I here quote the first part of a letter of his, dated October 25th, 1918:

“In the meantime,” he writes, “Wilson’s reply has been received, and it is certain that compliance with its terms will be equivalent to capitulation.

“To my mind Wilson’s note clearly shows that he and his allies will demand that the Hohenzollerns, or at any rate the Kaiser and the Crown Prince, shall relinquish their rights to the throne, and that, in consideration of such an act, they will ease their terms of peace.

“Each of the men who are at the head of their respective Governments has to play to his gallery, and if these men desire to give their audience a convincing proof of the completeness of the success they have achieved, they can do no better than demand condign punishment for the man who has been held responsible for the war, and inflict it upon him. I do not believe that the Kaiser would grieve very much if he were given a chance now of retiring into private life without much loss of dignity. The war, which was something absolutely uncongenial to his whole nature, has had such bad effect on his health that it would be desirable in his own interest if he were enabled to retire comfortably into private life. He must see the force of this argument himself, and it is not likely that he would refuse to accept such a chance, as a refusal would prejudice the best interests of his country. The Kaiserin, however, may be expected to oppose any such solution with much feeling. If the Kaiser’s grandson were now appointed his successor, and if a regent were nominated in whom everybody had confidence, the whole German situation would lose much of its seriousness. Of course, the abdication of the Kaiser would not take place without certain disturbances, but it would be necessary to face these disadvantages with a good grace. No doubt the outlook would be better if they could be avoided, and if the Kaiser, without losing his position, could be invested with rights and duties similar to those of the British king, who, broadly speaking, enjoys all the advantages of his dignity without having to take upon himself responsibilities which he is unable to bear. I quite believe that the Kaiser never derived much pleasure from his sovereign powers; at any rate, if he did, he has ceased to do so since this unfortunate war has been forced upon him.”

Ballin’s last entry in his diary contains the following passage:

“Stinnes has sent word to me that the Socialist and Centre parties are of opinion that I ought to be nominated to conduct the peace negotiations. I have told him that I should not shirk it, but that I should be much better pleased if somebody else would do it.”

This note was written on November 2nd, 1918. One short week later, on November 9th, his heart had ceased to beat—a heart which had so warmly responded to the call of his Kaiser and country, and which had succumbed to its excessive load of grief and sorrow.

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