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end of Oct.; on Dec. 12 a note was addressed to President Wilson and the Pope, and the matter was made public in the Reichstag. The note was based on Germany's success; she and her allies, it declared, " have given proof of their indestructible strength. . . Their unshakeable lines resist ceaseless attacks. . . . The latest events have demonstrated that a continuation of the war cannot break their resisting power. The general situation much rather justifies their hope of fresh successes." These they would forego for the sake of peace. " They do not seek to crush or annihilate their adversaries " and " they feel sure that the propositions which they would bring forward . . . would be such as to serve as a basis for the restoration of a lasting peace." These they did not specify; nor, indeed, had they made up their minds on the point. Eighteen months earlier the " Six Associations " representing German industry and commerce had demanded as conditions of peace " a colonial empire adequate to satisfy Germany's mani- fold economic interests," the military and economic control of Belgium, the annexation of the French coast and its hinterland from the Belgian frontier to the Somme, of Briey, Longwy, Verdun and Belfort, of " at least parts of the Baltic provinces," and had declared that the surrender of any occupied territory " in which so much German blood has been spilt and so many of our best and noblest have found a grave, would do violence to the sentiments of our people and to their conception of an honourable peace." Bethmann Hollweg would not have coun- tenanced such preposterous demands; but Ludendorff was more influential, and in vaguely describing the terms which alone reached the enemy with his approval, he uses phrases which might be made to cover them all except the annexation of the Channel ports and their hinterland.

Whatever their official conceptions of peace, the Teutonic allies dared not avow them in public, and the absence of sub- stantial proposals convinced their opponents that the note about peace was a mere manoeuvre of war, a continuation of the German offensive designed to complete the disintegrating work of German arms and to break up the Entente by playing off one Power against another. Consciousness of the real perils of such a conference gave an angry tone to the note in which the Entente replied on Dec. 29, and it consisted of a comprehensive indict- ment of Germany's conduct during the war, with particular reference to Belgium, and of a categorical refusal " to entertain a proposal which was devoid alike of sincerity and of substance."

Almost simultaneously but quite independently President Wilson addressed an inquiry to both belligerent groups on Dec. 18. He admitted that he was embarrassed by the coincidence because his note " may now seem to have been prompted by the recent overtures of the Central Powers," and the popular voice in Entente countries was convinced that he was " playing Ger- many's game." Clearer sighted observers discerned in it the President's first step toward intervention on the Entente side. It was, in effect, a request for information about the intentions of the belligerents, and resembled the inquiry which Great Brit- ain addressed to France and to Germany with respect to Bel- gium's neutrality. The answers then determined British inter- vention, and the answers to Wilson's note helped him to make up his mind, or rather that of his people. "What," he asked, " did the two sides mean by the general terms they used of the war ? The concrete objects for which it is being waged have never been definitely stated. The leaders of the several belligerents have . . . stated those objects in general terms. But, stated in general terms, they seem the same on both sides. Never yet have the authoritative spokesmen of either side avowed the precise objects which would, if attained, satisfy them and their people that the war had been fought out. The world has been left to conjecture what definitive results, what actual exchange of guarantees, what political or territorial changes or readjust- ments, what stage of military success even would bring the war to an end." Germany brushed aside the request on Dec. 26 by reaffirming her contention that a direct exchange of views between the belligerents was " the most suitable way of arriving at the desired result," and proposing " the speedy assembly, on neutral ground, of delegates of the warring States."

The Entente reply was more considered and was not completed until Jan. 10 1917. Demurring to the President's " assimilation " of the two belligerent groups, the Allies expressed their disbelief in the possibility at the moment of attaining " a peace which will assure them reparation, restitution, and the guarantees to which they are entitled by the aggression for which the responsibility rests with the Central Powers." They proceeded to indicate as their objects the restoration of Belgium, Serbia, and Montenegro with indemnities; the evacuation of the invaded territories of France, of Russia, and of Rumania with just reparation; the "reorganization of Europe"; the "restitution of provinces and territories wrested in the past from the Allies by force or against the will of their populations; the liberation of Italians, of Slavs, of Rumanians, and of Czechoslavs from foreign domination; the enfranchisement of populations subject to the bloody tyranny of the Turks; the expulsion from Europe of the Ottoman Empire." In a covering despatch dated Jan. 13, which was one of the most important and effective State papers of the war, Mr. Balfour demonstrated that " a durable peace can hardly be expected unless three conditions are fulfilled. The first is that existing causes of international unrest should be, as far as possible, re- moved or weakened. The second is that the aggressive aims and the unscrupulous methods of the Central Powers should fall into disrepute among their own peoples. The third is that behind international law and behind all treaty arrangements for pre- venting or limiting hostilities some form of international sanction should be devised which would give pause to the hardiest aggressor." It would, perhaps, be hyperbole to call Mr. Bal- four the author of Mr. Wilson's policy, but its future outlines could hardly have been more accurately indicated.

Germany's first " peace offensive " had failed, to the deep disappointment of her people and her Government. Her situation was, indeed, imposing rather than substantial. Apart from a corner of German E. Africa, her colonies had all been lost; the battle of Jutland had terrified her high seas fleet into ignominious inaction; and on the western front Hindenburg had prepared a comprehensive retreat. In Oct. the Vorwiirts had been suppressed as a minority Socialist organ and subjected to official inspiration. Ominous creaking began to be heard in the joints of her Austrian ally. Francis Joseph had died on Nov. 21, giving place to the more pacific Charles, and the murder of Count Sturgkh on Oct. 27 was followed by a rapid succession of three prime ministers in Dec. and by the substitution of Czernin for Tisza's henchman Burian as Foreign Minister. Peace had become a popular aspira- tion, and when the Allies rejected the offer, astonishment mingled with consternation. "Jelzl ist alles verloren," exclaimed a German officer interned in the Engadine. Nor did the opening months of 1917 belie this gloomy German forecast. The German retreat to the Hindenburg lines, sound enough in itself, depressed a public accustomed to judge by the map. Sir Stanley Maude's spectacular conquest of Bagdad gave a sinister turn to the Berlin-Bagdad vision. Sir Archibald Murray was at the gates of Gaza, and, if Maude's campaign were a precedent, would soon be in Damascus. Above all there loomed the threatened breach with the United States, which would make the ultimate defeat of Germany inevitable save by a miracle. -Corresponding elation appeared on the Entente side; even sober critics thought that the war would soon be won with the substitution of Mr. Lloyd George for Mr. Asquithin Dec., and in Jan. 1917 a highly suc- cessful "Victory" loan was launched in England on the basis of triumph within eight months.

Allied War Aims. Prospective victors made haste to divide the contingent spoil. France demanded, and Russia agreed, on Feb. 14 1917 to the Rhine as " a permanent strategical frontier against a Germanic invasion." Besides the restoration of Alsace- Lorraine, the new boundaries were " to be drawn up at the discretion of the French Government so as to provide for ... the inclusion in French territory of the entire iron district of Lorraine and of the entire coal district of the Saar valley." The rest of the territories on the left bank of the Rhine were to be separated from Germany, constituted an autonomous and neu- tral state, and garrisoned by French troops until all the condi-