demands
should be the subject of direct conversation between Vienna and
St. Petersburg."

Grey telegraphed to Sir Eward Goschen, British Ambassador at Berlin,
that Prince Lichnowsky, the German Ambassador at London, had
informed him that Germany accepted in principle the four-power
mediation, reserving its right as ally to help Austria if attacked.

"He has also been instructed to request me to use influence in
St. Petersburg to localize the war and to keep up the peace of
Europe.

"I have replied that the Serbian reply went further than could
have been expected to meet the Austrian demands. German Secretary
of State [Von Jagow] has himself said that there were some things
in the Austrian note that Serbia could hardly be expected to
accept. I assumed that Serbian reply could not have gone as far
as it did unless Russia had exercised conciliatory influence at
Belgrade, and it was really at Vienna that moderating influence
was now required. If Austria put the Serbian reply aside as being
worth nothing and marched into Serbia, it meant that she was
determined to crush Serbia at all costs, being reckless of the
consequences that might be involved. Serbian reply should at
least be treated as a basis for discussion and pause. I said
German Government should urge this at Vienna.

"I recalled what German Government had said as to the gravity of
the situation if the war could not be localized, and observed
that if Germany assisted Austria against Russia it would be
because, without any reference to the merits of the dispute,
Germany could not afford to see Austria crushed. Just so other
issues might be raised that would supersede the dispute between
Austria and Serbia, and would bring other powers in, and the war
would be the biggest ever known; but as long as Germany would
work to keep the peace I would keep closely in touch. I repeated
that after the Serbian reply it was at Vienna that some
moderation must be urged."

Grey telegraphed Buchanan at St. Petersburg, referring him to the
above, and informing him that the Russian Ambassador at London,
Count Benckendorff had told him [Grey] that the impression prevailed
in German and Austrian circles that Great Britain would stand aside
in event of war. This the Ambassador deplored for its adverse effect
on peace.

Grey informed Si