"The whole situation would change if President Wilson, following out the plans he has already indicated, were to make an offer of mediation to the Powers. This would, of course, not have to include any definite proposals of a territorial nature, as these questions should form part of the agenda of the peace negotiations. Such a move, however, would have to be made soon, as otherwise we could not continue to stand calmly aside and watch England, realizing as she does the many difficulties to be reckoned with, exert with impunity increasingly strong pressure on the neutrals, with a view to improving her military and economic position at our expense, and we should have to claim the renewed liberty of action for which we stipulated in the Note of the 4th of May of this year. Should Mr. Wilson insist on waiting until immediately before or after the election, he would lose the opportunity for such a step. Also the negotiations should not at first aim at the conclusion of an armistice, but should be carried on solely by the combatant parties, and within a short period directly bring about the preliminary peace. A further prolongation would be unfavorable to Germany's military situation, and would result in further preparations being made by the Powers for the continuance of the war into next year, so that there would be no further prospect of peace within a reasonable time.
"Your Excellency should discuss the position cautiously with Colonel House, and find out the intentions of Mr. Wilson. A peace movement on the part of the President which bore the outward appearance of spontaneity would be seriously considered by us, and this would also mean success for Mr. Wilson's election campaign.
"Gerard has applied for leave, as the result of a private letter from Colonel House, but he has received no reply from the State Department.
The explanation of the final sentence of the above telegram is as follows. I have already mentioned that Mr. Gerard was not popular in Berlin, owing to his very highly-strung temperament, his impetuosity and his want of tact. His recall was eagerly desired. Consequently, I had received instructions to arrange, if possible, for the replacement of Mr. Gerard, and in any case that the Ambassador should be recalled for a time to Washington, so that his nerves might have a chance to rest. As always, in strictly confidential matters, I referred this to Colonel House, who told me that in view of the existing political situation there could be no question of a recall of Gerard. He would, however, arrange for the Ambassador to be summoned at once to Washington for fresh instructions. If once Mr. Gerard learned that the President now had the definite intention of mediating with a view of peace, Colonel House thought he would be received in a more friendly manner in Berlin.
