cargo
space. More vessels have been destroyed in a month of U-boat
warfare than the English dockyards have turned out in the last
year. Even the thousand much-talked-of American wooden vessels, if
they were there, would only cover the losses of four months. But
they will not come before it is too late. English experts on the
subject have already said quite openly that there are only two
ways of counteracting the effect of the U-boats: either to build
vessels quicker than the Germans destroy them, or else to destroy
the U-boats quicker than the Germans can build them. The first has
proved to be impossible, and the U-boat losses are far less than
the new vessels building.

England will also have to reckon on a progressive rise in the loss
of tonnage.

The effects of the U-boat warfare on the people's provisions and
on all private and Government activities will be felt more and
more.

I anticipate, therefore, the final results of the U-boat warfare
with the greatest confidence.

According to secret but reliable information, the Prime Minister
Ribot recently stated to the Italian Ambassador in Paris that
France was faced with exhaustion. This opinion was expressed
before the beginning of the last Franco-English offensive. Since
then, France has sacrificed life to a terrible extent by keeping
up the intensity of the fighting until the offensive ceased.

The French nation is certainly doing marvellous things in this
war, but the Government cannot sustain the enormous burden after
it reaches a certain limit. A reaction in the temper of France,
which is kept up by artificial means, is inevitable.

As regards our own internal situation, I do not under-estimate the
difficulties presented by the inevitable results of the severe
fighting and the exclusion from the seas. But I firmly believe
that we shall succeed in overcoming these difficulties without
permanently endangering the nation's strength and general welfare,
without any further crises and without menace to Government
organisation.

Although we are justified in viewing the total situation in a
favourable light, I am nevertheless in complete agreement with
Count Czernin in pursuing the aim of bringing about as speedily as
possible an honourable and, in the interests of the Empire and of
our Allies, just peace. I also share his opinion that the
important factor of the weakening of Ru