e
world her desire for peace she had in mind only the most drastic peace
terms as far as Belgium, certain sections of northern France, Poland
and the Balkans were concerned. Neutrals observed that Germany was so
exalted over the Roumanian victory and the possibilities of that
campaign solving the food problem that she was not only ready to defy
the Allies but the neutral world unless the world was ready to bow to a
German victory. There were some people in Germany who realised that
the sooner she made peace the better peace terms she could get but the
Government was not of this opinion. The Allies, as was expected,
defiantly refused the Prussian olive branch which had been extended
like everything else from Germany with a string tied to it. For the
purposes of the Kaiser and his Government the Allies' reply was exactly
what they wanted.

The German Government was in this position: If the Allies accepted
Germany's proposal it would enable the Government to unite all factions
in Germany by making a peace which would satisfy the political parties
as well as the people. If the Allies refused, the German Government
calculated that the refusal would be so bitter that it would unite the
German people political organisations and enable the Government to
continue the war in any way it saw fit.

Nothing which had happened during the year so solidified the German
nation as the Allies' replies to Berlin and to President Wilson. It
proved to the German people that their Government was waging a
defensive war because the Allies demanded annexation, compensation and
guarantees, all of which meant a change in the map of Europe from what
it was at the beginning of the war. The interests which had been
demanding a submarine warfare saw their opportunity had come. They
knew that as a result of the Allies' notes the public would sanction an
unrestricted sea warfare against the whole world if that was necessary.

From December 12th until after Christmas, discussions of peace filled
the German newspapers. By January 1st all possibilities of peace had
disappeared. The Government and the public realised that the war would
go on and that preparations would have to be made at once for the
biggest campaign in the history of the world in 1917.

Throughout the peace discussions one thing was evident to all
Americans. Opposition to American intervention in any peace discussion
was so great that the United States would not be able to ta