n Stuttgart. The question then became the subject of
my reports, and was submitted to an inquiry by the home authorities
and the courts. I still hold to my opinion that the whole affair was
unnecessarily exaggerated by German public opinion, and that the
detailed investigation into its legality by the home authorities
and courts was unnecessary, as the managing director of the American
branch and the directors of the German company had acted in perfect
good faith in an attempt to advance the interests of the German
cause. It was merely a question of the result. If their policy
of procrastination had succeeded in delaying the contracts and
had kept our enemies for a considerable time from building their
own factory for fuses and aeroplane magnetoes, their action would
have been justified; in the contrary event it would have been vain,
but blameless from a moral and legal point of view. The fact that at
the beginning the English relied on the possibility of the production
and supply of such fuses from America, and only later gradually
came to a decision to build and fit out their own factories,
consequently under much more difficult circumstances, offered an
opening for this procedure. That difficulties were caused to the
enemy in this respect until quite recently is unmistakably shown
by the messages that reached America from England.

As a result of the extensive purchases of the Allies, there came
about a gradual change in the attitude of the American Government
to the question of issuing loans. At the end of March, 1915, we
succeeded, acting on instructions from Berlin, in raising a small
loan. It involved an unusual amount of trouble. The American financial
world was already completely dominated by the Morgan trust. This
domination resulted from the fact that the Allied commissions were
concentrated in English hands and were placed by England in the
hands of J. P. Morgan & Co., who acted as the agents of the English
Government. As these commissions finally included every sphere of
economic life, all the great American banks and bankers were called
upon, and so drawn into the Morgan circle. The result was that
no big firm could be induced to undertake a German loan. However,
several trust companies of repute, who already had or wished to
have business relations with Germany, declared their readiness
to become partners in a syndicate if we succeeded in finding a
"Syndicate Manager." A certain New York firm which after