The Life and Letters of Walter H. Page Volume II Part 25

Though the whole story of the blockade thus seems finally to have ended in a joke, the whole proceeding has its serious side. The United States had been posing for three years as the champion of neutral rights; the point of view of Was.h.i.+ngton had been that there was a great principle at stake. If such a principle were involved, it was certainly present in just the same degree after the United States became belligerent as in the days when we were neutrals. The lofty ideals by which the Administration had professed to be guided should have still controlled its actions; the mere fact that we, as a belligerent, could obtain certain advantages would hardly have justified a great and high-minded nation in abandoning its principles. Yet abandon them we did from the day that we declared war. We became just as remorseless in disregarding the rights of small states as Great Britain--according to our numerous blockade notes--had been. Possibly, therefore, Mr. Balfour's mirth was not merely sympathetic or humorous; it perhaps echoed his discovery that our position for three years had really been nothing but a sham; that the State Department had been forcing points in which it did not really believe, or in which it did not believe when American interests were involved. At any rate, this ending of our long argument with Great Britain was a splendid justification for Page; his contention had always been that the preservation of civilization was more important than the technicalities of the international lawyers. And now the Wilson Administration, by throwing into the waste basket all the finespun theories with which it had been embarra.s.sing the Allied cause since August 4, 1914, accepted--and accepted joyously--his point of view.

II

One of the first things which Mr. Balfour did, on his arrival in Was.h.i.+ngton, was personally to explain to President Wilson about the so-called "secret treaties." The "secret treaty" that especially preyed upon Mr. Wilson's mind, and which led to a famous episode at the Versailles Conference, was that which had been made with Italy in 1915, as consideration for Italy's partic.i.p.ation in the war. Mr. Balfour, in telling the President of these territorial arrangements with Italy, naturally did not criticise his ally, but it was evident that he regarded the matter as something about which the United States should be informed.

"This is the sort of thing you have to do when you are engaged in a war," he explained, and then he gave Mr. Wilson the details.

Probably the most important information which Mr. Balfour and the French and Italian Commissions brought to Was.h.i.+ngton was the desperate situation of the Allied cause. On that point not one of the visiting statesmen or military and naval advisers made the slightest attempt at concealment. Mr. Balfour emphasized the seriousness of the crisis in one of his earliest talks with Mr. McAdoo, Secretary of the Treasury. The British statesman was especially interested in the financial situation and he therefore took up this matter at an early date with the Treasury Department.

"Mr. Balfour," said Mr. McAdoo, "before we make any plans of financial a.s.sistance it is absolutely necessary that we know precisely where we stand. The all-important thing is the question as to how long the war is likely to last. If it is only to last a few months, it is evident that we need to make very different arrangements than if it is to last several years. Just what must we make provision for? Let us a.s.sume that the United States goes in with all its men and resources--that we dedicate all our money, our manufacturing plants, our army, our navy, everything we have got, to bringing the war to an end. How long will it take?"

Mr. Balfour replied that it would be necessary to consult his naval and military advisers before he answered that question. He said that he would return in a day or two and make an explicit statement. He did so and his answer was this: Under these circ.u.mstances--that the United States should make war to the full limit of its power, in men and resources--the war could not be ended until the summer or the autumn of 1919. Mr. McAdoo put the same question in the same form to the French and Italian Missions and obtained precisely the same answer.

Page's papers show that Mr. Balfour, in the early stages of American partic.i.p.ation, regarded the financial situation as the thing which chiefly threatened the success of the Allied cause. So much greater emphasis has been laid upon the submarine warfare that this may at first seem rather a misreading of Great Britain's peril. Yet the fact is that the high rate of exchange and the depredatory U-boat represented almost identically the same danger. The prospect that so darkened the horizon in the spring of 1917 was the possible isolation of Great Britain.

England's weakness, as always, consisted in the fact that she was an island, that she could not feed herself with her own resources and that she had only about six weeks' supply of food ahead of her at any one time. If Germany could cut the lines of communication and so prevent essential supplies from reaching British ports, the population of Great Britain could be starved into surrender in a very brief time, France would be overwhelmed, and the triumph of the Prussian cause would be complete. That the success of the German submarine campaign would accomplish this result was a fact that the popular mind readily grasped.

What it did not so clearly see, however, was that the financial collapse of Great Britain would cut these lines of communication quite as effectually as the submarine itself. The British were practically dependent for their existence upon the food brought from the United States, just as the Allied armies were largely dependent upon the steel which came from the great industrial plants of this country. If Great Britain could not find the money with which to purchase these supplies, it is quite apparent that they could not be s.h.i.+pped. The collapse of British credit therefore would have produced the isolation of the British Isles and led to a British surrender, just as effectively as would the success of the German submarine campaign.

As soon as Bernstorff was sent home, therefore, and the partic.i.p.ation of this country in the war became extremely probable, Mr. Balfour took up the financial question with Page.

_To the President_ March 5, 1917.

The inquiries which I have made here about financial conditions disclose an international situation which is most alarming to the financial and industrial outlook of the United States. England has not only to pay her own war bills, but is obliged to finance her Allies as well. Up to the present time she has done these tasks out of her own capital. But she cannot continue her present extensive purchases in the United States without s.h.i.+pping gold as payment for them, and there are two reasons why she cannot make large s.h.i.+pments of gold. In the first place, both England and France must keep the larger part of the gold they have to maintain issues of their paper at par; and, in the second place, the German U-boat has made the s.h.i.+pping of gold a dangerous procedure even if they had it to s.h.i.+p. There is therefore a pressing danger that the Franco-American and Anglo-American exchange will be greatly disturbed; the inevitable consequence will be that orders by all the Allied Governments will be reduced to the lowest possible amount and that trans-Atlantic trade will practically come to an end. The result of such a stoppage will be a panic in the United States. The world will therefore be divided into two hemispheres, one of them, our own, will have the gold and the commodities; the other, Great Britain and Europe, will need these commodities, but it will have no money with which to pay for them. Moreover, it will have practically no commodities of its own to exchange for them.

The financial and commercial result will be almost as bad for the United States as for Europe. We shall soon reach this condition unless we take quick action to prevent it. Great Britain and France must have a credit in the United States which will be large enough to prevent the collapse of world trade and the whole financial structure of Europe.

If the United States declare war against Germany, the greatest help we could give Great Britain and its Allies would be such a credit.

If we should adopt this policy, an excellent plan would be for our Government to make a large investment in a Franco-British loan.

Another plan would be to guarantee such a loan. A great advantage would be that all the money would be kept in the United States. We could keep on with our trade and increase it, till the war ends, and after the war Europe would purchase food and an enormous supply of materials with which to reequip her peace industries. We should thus reap the profit of an uninterrupted and perhaps an enlarging trade over a number of years and we should hold their securities in payment.

On the other hand, if we keep nearly all the gold and Europe cannot pay for reestablis.h.i.+ng its economic life, there may be a world-wide panic for an indefinite period.

Of course we cannot extend such a credit unless we go to war with Germany. But is there no way in which our Government might immediately and indirectly help the establishment in the United States of a large Franco-British credit without violating armed neutrality? I do not know enough about our own reserve bank law to form an opinion. But these banks would avert such a danger if they were able to establish such a credit. Danger for us is more real and imminent, I think, than the public on either side the Atlantic understands. If it be not averted before its manifestations become apparent, it will then be too late to save the day.

The pressure of this approaching crisis, I am certain, has gone beyond the ability of the Morgan financial agency for the British and French governments. The financial necessities of the Allies are too great and urgent for any private agency to handle, for every such agency has to encounter business rivalries and sectional antagonisms.

It is not improbable that the only way of maintaining our present preeminent trade position and averting a panic is by declaring war on Germany. The submarine has added the last item to the danger of a financial world crash. There is now an uncertainty about our being drawn into the war; no more considerable credits can be privately placed in the United States. In the meantime a collapse may come.

PAGE.

Urgent as this message was, it really understated the desperate condition of British and Allied finances. That the warring powers were extremely pressed for money has long been known; but Page's papers reveal for the first time the fact that they were facing the prospect of bankruptcy itself. "The whole Allied combination on this side the ocean are very much nearer the end of their financial resources," he wrote in July, "than anybody has guessed or imagined. We only can save them....

The submarines are steadily winning the war. Pers.h.i.+ng and his army have bucked up the French for the moment. But for his coming there was more or less danger of a revolution in Paris and of serious defection in the army. Everybody here fears that the French will fail before another winter of the trenches. Yet--the Germans must be still worse off."

The matter that was chiefly pressing at the time of the Balfour visit was the fact that the British balances in the New York banks were in a serious condition. It should always be remembered, however, that Great Britain was financing not only herself, but her Allies, and that the difficult condition in which she now found herself was caused by the not too considerate demands of the nations with which she was allied in the war. Thus by April 6, 1917, Great Britain had overdrawn her account with J.P. Morgan to the extent of $400,000,000 and had no cash available with which to meet this overdraft. This obligation had been incurred in the purchase of supplies, both for Great Britain and the allied governments; and securities, largely British owned stocks and bonds, had been deposited to protect the bankers. The money was now coming due; if the obligations were not met, the credit of Great Britain in this country would reach the vanis.h.i.+ng point. Though at first there was a slight misunderstanding about this matter, the American Government finally paid this over-draft out of the proceeds of the first Liberty Loan. This act saved the credit of the allied countries; it was, of course, only the beginning of the financial support that America brought to the allied cause; the advances that were afterward furnished from the American Treasury made possible the purchases of food and supplies in enormous quant.i.ties. The first danger that threatened, the isolation and starvation of Great Britain, was therefore overcome. It was the joint product of Page's work in London and that of the Balfour Commission in the United States.

III

Until these financial arrangements had been made there was no certainty that the supplies which were so essential to victory would ever leave the United States; this obstruction at the source had now been removed.

But the greater difficulty still remained. The German submarines were lying off the waters south and west of Ireland ready to sink the supply s.h.i.+ps as soon as they entered the prohibited zone. Mr. Balfour and his a.s.sociates were working also on this problem in Was.h.i.+ngton; and, at the same time, Page and Admiral Sims and the British Admiralty were bending all their energies in London to obtain immediate cooperation.

A remark which Mr. Balfour afterward made to Admiral Sims shows the frightful nature of the problem which was confronting Great Britain at that time.

"That was a terrible week we spent at sea in that voyage to the United States," Mr. Balfour said. "We knew that the German submarine campaign was succeeding. Their submarines were destroying our s.h.i.+pping and we had no means of preventing it. I could not help thinking that we were facing the defeat of Great Britain."

Page's papers show that as early as February 25th he understood in a general way the disheartening proportions of the German success. "It is a momentous crisis," he wrote at that time. "The submarines are destroying s.h.i.+pping at an appalling rate." Yet it was not until Admiral Sims arrived in London, on April 9th, that the Amba.s.sador learned all the details. In sending the Admiral to England the Navy Department had acted on an earnest recommendation from Page. The fact that the American Navy was inadequately represented in the British capital had long been a matter of embarra.s.sment to him. The ability and personal qualifications of our attaches had been unquestioned; but none of them during the war had been men of high rank, and this in itself proved to be a constant impediment to their success. While America was represented by Commanders, j.a.pan, Italy, and France had all sent Admirals to London.

Page's repeated requests for an American Admiral had so far met with no response, but the probability that this country would become involved in the war now gave new point to his representations. In the latter part of March, Page renewed his request in still more urgent form, and this time the President and the Navy Department responded favourably. The result was that, on April 9th, three days after the American declaration of war, Admiral Sims and his flag-lieutenant, Commander Babc.o.c.k, presented themselves at the American Emba.s.sy. There was little in the appearance of these men to suggest a violent naval demonstration against Germany.

Both wore civilian dress, their instructions having commanded them not to bring uniforms; both were travelling under a.s.sumed names, and both had no more definite orders than to investigate the naval situation and cable the results to Was.h.i.+ngton. In spite of these attempts at secrecy, the British had learned that Admiral Sims was on the way; they rejoiced not only in this fact, but in the fact that Sims had been chosen, for there was no American naval officer whose professional reputation stood so high in the British Navy or who was so personally acceptable to British officialdom and the British public. The Admiralty therefore met Admiral Sims at Liverpool, brought him to London in a special train, and, a few hours after his arrival, gave him the innermost secrets on the submarine situation--secrets which were so dangerous that not all the members of the British Cabinet had been let into them.

Page welcomed Admiral Sims with a cordiality which that experienced sea veteran still gratefully remembers. He at once turned over to him two rooms in the Emba.s.sy. "You can have everything we've got," the Amba.s.sador said. "If necessary to give you room, we'll turn the whole Emba.s.sy force out into the street." The two men had not previously met, but in an instant they became close friends. A common sympathy and a common enthusiasm were greatly needed at that crisis. As soon as Admiral Sims had finished his interview with Admiral Jellicoe, he immediately sought out the Amba.s.sador and laid all the facts before him. Germany was winning the war. Great Britain had only six weeks' food supply on hand, and the submarines were sinking the s.h.i.+ps at a rate which, unless the depredations should be checked, meant an early and unconditional surrender of the British Empire. Only the help of the United States could prevent this calamity.

Page, of course, was aghast: the facts and figures Admiral Sims gave him disclosed a situation which was even more desperate than he had imagined. He advised the Admiral to cable the whole story immediately to Was.h.i.+ngton. Admiral Sims at first had some difficulty in obtaining the Admiralty's consent to doing this, and the reason was the one with which Page had long been familiar--the fear, altogether too justified, that the news would "leak" out of Was.h.i.+ngton. Of course there was no suspicion in British naval circles of the good faith of the Was.h.i.+ngton officials, but important facts had been sent so many times under the seal of the strictest secrecy and had then found their way into the newspapers that there was a deep distrust of American discretion.

Certainly no greater damage could have been done the allied cause at that time than to have the Germans learn how successfully their submarine campaign was progressing. The question was referred to the Imperial War Council and its consent obtained. The report, however, was sent to the Navy Department in the British naval code, and decoded in the British Emba.s.sy in Was.h.i.+ngton.

Admiral Sims's message gave all the facts about the submarine situation, and concluded with the recommendation that the United States should a.s.semble all floating craft that could be used in the anti-submarine warfare, destroyers, tugs, yachts, light cruisers, and similar vessels, and send them immediately to Queenstown, where they would do valuable service in convoying merchant vessels and destroying the U-boats. At that time the American Navy had between fifty and sixty destroyers that were patrolling the American coast; these could have been despatched, almost immediately, to the scene of operations; but, in response to this request, the Department sent six to Queentown.

The next few months were very unhappy ones for Admiral Sims. He was the representative in London of one of the world's greatest naval powers, partic.i.p.ating in the greatest war that had ever enlisted its energies, yet his constant appeals for wars.h.i.+ps elicited the most inadequate response, his well-reasoned recommendations for meeting the crisis were frequently unanswered and at other times were met with counter-proposals so childish that they seemed almost to have originated in the brains of newspaper amateurs, and his urgent pictures of a civilization rapidly going to wreck were apparently looked upon with suspicion as the utterances of a man who had been completely led astray by British guile.

To give a fair idea of Was.h.i.+ngton's neglect during this period it is only necessary to point out that, for four months, Admiral Sims occupied the two rooms in the Emba.s.sy directly above Page's, with Commander Babc.o.c.k as his only aid. Sims's repeated requests to Secretary Daniels for an additional staff went unheeded. Had it not been for the Admiral's constant daily a.s.sociation with Page and the comfort and encouragement which the Amba.s.sador gave him, this experience would have been almost unbearable. In the latter part of April, the Admiral's appeals to Was.h.i.+ngton having apparently fallen on deaf ears, he asked Page to second his efforts. The Admiral and Commander Babc.o.c.k wrote another message, and drove in a motor car to Brighton, where Page was taking a little rest. The Admiral did not know just how strong a statement the Amba.s.sador would care to sponsor, and so he did not make this representation as emphatic as the judgment of both men would have preferred.

The Admiral handed Page the paper, saying that he had prepared it with the hope that the Amba.s.sador would sign it and send it directly to President Wilson.

"It is quite apparent," Admiral Sims said, "that the Department doesn't believe what I have been saying. Or they don't believe what the British are saying. They think that England is exaggerating the peril for reasons of its own. They think I am hopelessly pro-British and that I am being used. But if you'll take it up directly with the President, then they may be convinced."

Page put on his spectacles, took the paper, and read it through. Then, looking over the rim of his gla.s.ses in his characteristic way, he leaned toward Admiral Sims and said:

"Admiral, it isn't half strong enough! I think I can write a better despatch than that, myself! At least let me try."

He immediately took a pen and paper and in a few minutes he had written his own version which he gave the Admiral to read. The latter was delighted with it and in a brief time it was on its way to Was.h.i.+ngton.

From: Amba.s.sador Page.

To: Secretary of State.

Sent: 27 April, 1917.

_Very confidential for Secretary and President_

There is reason for the greatest alarm about the issue of the war caused by the increasing success of the German submarines. I have it from official sources that during the week ending 22nd April, 88 s.h.i.+ps of 237,000 tons, allied and neutral, were lost. The number of vessels unsuccessfully attacked indicated a great increase in the number of submarines in action.

This means practically a million tons lost every month till the shorter days of autumn come. By that time the sea will be about clear of s.h.i.+pping. Most of the s.h.i.+ps are sunk to the westward and southward of Ireland. The British have in that area every available anti-submarine craft, but their force is so insufficient that they hardly discourage the submarines.

The British transport of troops and supplies is already strained to the utmost, and the maintenance of the armies in the field is threatened. There is food enough here to last the civil population only not more than six weeks or two months.

Whatever help the United States may render at any time in the future, or in any theatre of the war, our help is now more seriously needed in this submarine area for the sake of all the Allies than it can ever be needed again, or anywhere else.

After talking over this critical situation with the Prime Minister and other members of the Government, I can not refrain from most strongly recommending the immediate sending over of every destroyer and all other craft that can be of anti-submarine use. This seems to me the sharpest crisis of the war, and the most dangerous situation for the Allies that has arisen or could arise.

If enough submarines can be destroyed in the next two or three months, the war will be won, and if we can contribute effective help immediately, it will be won directly by our aid. I cannot exaggerate the pressing and increasing danger of this situation.

Thirty or more destroyers and other similar craft sent by us immediately would very likely be decisive.

There is no time to be lost.