Chapter X: The War (3)

The internal conditions of our country fill me with grave alarm,
and I therefore venture to approach Your Excellency privately with
this expression of my apprehensions.

"I do not doubt for a moment that our competent authorities intend
to extract the utmost advantage to ourselves from the situation
which is developing in Russia. This Russian revolution may enable
us to bring the war to a close, and to obtain peace terms which,
relatively speaking, are not unfavourable.

"What Germany has achieved in this war is beyond all praise. A
glance at the map shows how small she is compared with her
opponents in the field; and yet she is bravely struggling against a
world in arms in which even the few countries that have remained
neutral are not our friends. It is, indeed, one grand epic. But
unfortunately the position at home becomes more untenable every
day.

"If we find ourselves compelled to reduce the bread ration still
more, you will, I am sure, agree with me that the bulk of the
people will suffer enormously through being underfed. In Austria,
conditions are said to be worse still, and I am afraid that we
shall even have to part with some of our stores to feed her
population.

"At first sight the Chancellor's speech in the Prussian House of
Deputies appeared to be somewhat too comprehensive in its range of
vision; but a few days later, when the news of the Russian
revolution arrived, it almost seemed that his words had been
prompted by Divine inspiration. After this Russian news had become
known, it would have been impossible for him to make this speech
without giving rise to the suspicion that these events had cast
their shadow in advance on the Prussian Parliament. Unfortunately,
however, this favourable development was not followed up by the
right steps. On the contrary, the Chancellor, after his breezy
advance in the House of Deputies, has now retired from the position
he then took up, thus creating the impression that our policy is
constantly shaped by all sorts of mutually contradictory views and
currents. Up to now, although the people have to suffer greatly
through the shortage of food and fuel, their patriotism has put up
with it because of their faith in the promised electoral reforms.
It would have been so simple to reiterate this promise, and at the
same time to point out that so many other things claimed precedence
during the war, and that so much was at stake, that it would hardly
be advisable to introduce this great reform at present, seeing that
there was no time to give proper attention to the careful working
out of all the details.

"If now, however, such bills as those dealing with the entailed
property legislation and with the repeal of the Polish laws are to
be discussed, such a postponement is no longer justifiable.

"It almost seems as if the Government is unable to read the signs
of the times. The fate of the Prussian suffrage reform bids fair to
resemble that of the sibylline books, of which it was said that
the longer one hesitated to buy them the more expensive they
became. To-day the people would still be content to agree to plural
voting, but when the war is over, and when the Socialist leaders
are demobilizing their men, inducing tens of thousands of them,
decorated with the Iron Cross, to air their grievances, it will be
too late to stop the ball from rolling. It is true that people say
revolutions are impossible in the era of the machine-gun. I have no
faith in this theory, especially since the events that have
happened in Petrograd have become known to us. That, in a country
like Russia, the reigning family could disappear from the scene
without any opposition, and without a single Grand Duke or a single
soldier attempting to prevent it, is certainly food for much
reflection.

"I hope Your Excellency will pardon me for thus frankly expressing
my anxieties, but I considered it my duty to let Your Excellency
know my feelings."

In May, 1917, Ballin accepted an invitation received from the Supreme Army Command and paid a visit to General Headquarters, where he found a great deal of discontent prevailing with the policy of the Chancellor. He also met the Kaiser, and reports on his visit as follows:

"After sharing the Kaiser's repast--which was plain and on a war
diet--I had several hours' private conversation with His Majesty. I
found him full of optimism, far more so than I thought was
justified. Both he and Ludendorff seem to put too much faith in the
success of the submarines; but they fail to see that this weapon is
procuring for us the enmity of the whole world, and that the
promise held out by its advocates, viz., that Great Britain will be
brought to her knees within two months, is, to put it mildly,
extremely doubtful of realization, unless we can sink the ships
which carry ammunition and pit-props to England."

In a letter addressed to a gentleman in the Kaiser's entourage he gave a further detailed account of his views on the optimism prevailing in high places:

"I cannot help thinking of the enthusiastic and at the same time
highly optimistic letter which you had the great kindness to show
me last night. My opinion is that the gentlemen who form the
entourage of His Majesty ought not to view matters as that
interesting epistle suggests that they do.

"You are a believer in the statistics of Mr. X. I took the liberty
of telling you last night that statistics are a mathematical form
of telling a lie, and that, to use the expression of a clever
Frenchman, a statistical table is like a loose woman who is at the
service of anyone who wants her. 'There are different ways of
arranging figures,' as they say in England. I do not know Mr. X,
neither do I know his statistics, but what I have been told about
them seemed foolish to me. If we carry on the war, and particularly
the unrestricted submarine war, on the basis of statistics such as
he and other jugglers with figures have compiled, we are sure to
fail in the ends we are aiming at.

"As concerns the unrestricted submarine war itself, I still
maintain the view I have always held, viz., that we shall never
succeed in starving out Great Britain to such an extent as to force
her Government to sue for a peace of our dictation.

"I have just had a visit from a Danish friend whom His Majesty also
knows quite well, and who, together with a committee of delegates
sent by the Danish Government, will be leaving for England
to-night. The two members of this committee who represent the
Ministry of Agriculture have been instructed, _inter alia_, to
complain that Great Britain now imports much less bacon, butter,
and other articles from Denmark than she had undertaken to do, and
that the prices she pays for these imports are much below those
originally stipulated.

"Apart from the cargo carried by two small steamers that have been
torpedoed, Denmark has been able, notwithstanding our submarines,
to supply Great Britain with all the food required of her. The
vessels remain in territorial waters until a wireless message
informs them of the spot where they will meet the British convoy
which is to take them safely to England. They have to pass through
only a small danger zone which, as I have said, has hitherto proved
fatal to no more than two vessels.

"This fact, to my mind, points to the limits of the success
obtainable by our submarines. I have constantly explained,
especially to the Chief of the Admiralty Staff, that I can only
regard the submarine as a successful weapon if it enables us to cut
off the British supplies of ore from Spain and Sweden, and also
those of pit-props, because without the possession of these two
necessities, Great Britain is no longer able to continue the war. I
have been assured that our submarines would achieve this task, even
if torpedo boats were employed as convoys; but the experiences
gained so far do not bear out these predictions. We succeed,
indeed, in sinking a few vessels out of many; but suppose there are
ten ships in a convoy, it still means that nine of them, with their
supplies of ore and pit-props, safely reach their destination.

"Let me repeat, the starvation of Great Britain is impossible;
because, in addition to her own harvests, she only needs from
twelve to fifteen thousand tons of cereals every day, and these she
can, if necessary, always obtain at night-time through her Channel
service, _via_ Spain and France. Even this necessity will hardly
arise, because two medium-sized steamers are sufficient to carry
the fifteen thousand tons, and things would have to be very bad,
indeed, if these did not succeed in reaching a British port. And if
our statistical tricksters juggle with crop failures, please do not
forget that new harvests are soon to be expected, and that it will
not do always to count on crop failures.

"You will be doing a good work if you can persuade people at
headquarters to abandon their belief that Great Britain can be
starved to submission. Unfortunately their other belief, viz., that
we can cut off her supplies of ore and pit-props, will also have to
be abandoned.

"Certainly, the achievements of our submarines have been amazing.
At their present rate they will enormously diminish the British
tonnage figures, and raise the hatred of everything German to
boiling point; but they will not, unfortunately, lead to such an
end of the war as our Pan-Germans desire. It is a thousand pities!

"When the submarine problem began to assume practical shape, I
pointed out to the Chief of the Admiralty Staff that, to be
successful, the submarine war must be brief; that its principal
object was not to sink a large number of ships, but to produce such
a feeling of alarm in neutral countries as to prevent them from
risking their ships (1) because of the great value of tonnage
immediately after the war, (2) because of the impossibility of
finding crews, and (3) because of the insurance difficulty. These
conditions of success were, indeed, realized during the first four
weeks; but since that time people, as I had predicted, have got
used to the danger. The crews are coming forth again, the insurance
companies issue their policies again, and the ships are put to sea
again.

"If the Admiralty Staff, who is doubtless in possession of the
figures, would submit to you a list of the number of vessels laid
up in Dutch and Scandinavian ports on March 1st, owing to the
submarine danger, and another one showing the position as it is
to-day, you would discover that, at a low estimate, at least 30 per
cent, of the cargo vessels are running again, and that, after
another month or so, the number of those still idle will have
dwindled down to 20 per cent, or less.

"These are my views on the situation. If we have no other means of
finishing the war but the submarine menace, it will go on for
years. I should like to protest in anticipation against any
suggestion to the effect that I am trying to minimize the
achievements of the submarines. On the contrary, I have nothing but
the highest admiration for them, and I really find it quite
impossible to praise in ordinary prose all that our country has
done during this war; the whole achievement is one grand epic.

"Within the next few months the problem will have to be solved how
to put an end to this devastating catastrophe which is ruining the
progress of the world. There is no need for me to tell you that the
position of Germany has grown considerably worse through the active
intervention of the United States. The fact that this enormously
wealthy country with its one hundred million inhabitants has turned
against us is fraught with the most dangerous consequences. Now it
will no longer be possible for us to continue the war for several
more years, and then to enforce a peace on lines such as are laid
down by a noisy section of our people, unless we succeed in
exploiting the extremely fortunate change in the Russian situation
in such a way that the vast resources of that country will be at
our disposal.

"This letter has become longer than it ought to be, but the gravity
of the subject with which it deals must be my excuse for going into
so many details. Perhaps I may avail myself of some future occasion
to acquaint you with my hopes and fears on other political matters;
because, as I have already explained, the present state of affairs
makes it urgently desirable that the gentlemen whose privilege it
is to be near His Majesty should see things as they really are, and
not as they would wish them to be.

"Compare, if you have a chance, the advertisement pages of an
English paper with those of a German one. I have just come across a
copy of the _Daily Telegraph_ which I beg to enclose for this
purpose. I have been in the habit of studying these advertisements
for many months; they are excellent means of gauging the difference
in the effects of the war on the two countries."

During the remaining part of 1917, and during the first months of 1918 as well, Ballin took an active interest in the preparations for the Bill dealing with the rebuilding of the German mercantile marine; in other respects, especially with regard to political matters, the course of events condemned him to remain passive. His notes during this period are few. I select the following passages from them:

" ... July 17th, 1917. The Erzberger resolution which was chiefly
aimed at Helfferich and the naval authorities has made the
Chancellor's position untenable. Everybody turned against Herr von
Bethmann, and General von Ludendorff informed me by telephone that
he would resign if Bethmann remained in office.

"I then had a lengthy talk with His Excellency v. Valentini who
agreed that it was necessary for the Chancellor to retire; but he
found it just as difficult as other people to name a suitable
successor. Vienna had raised strong objections to the appointment
of Prince Bülow, and, acting upon Valentini's suggestion, I made
up my mind to approach the Kaiser with a view to discussing with
him the situation which appeared to me fraught with the greatest
danger. I therefore asked His Excellency von Reischach to arrange
such a meeting for me, but on Thursday night I was rung up from
headquarters and informed that Hindenburg and Ludendorff were
already on their way to the Kaiser to report to His Majesty on this
subject. Under these circumstances I did not like to interfere, and
on Friday I withdrew my application for an interview. The Kaiser
has told the two generals that he had accepted Bethmann's
resignation the previous evening. He is thus able to save himself
from a perplexing situation by contending that he had to give in to
the wishes of the Supreme Army Command.

" ... July 25th, 1917. Yesterday I called on Prince Bülow at his
Flottbek residence, and found him looking better than I had seen
him for years. After I had left him I had the feeling that the
Prince, who regards the whole situation with a great deal of
misgiving, would even be willing to accept the post of Foreign
Secretary under Michaelis himself, in order to be able to guide our
foreign policy along sensible lines once more. Contrary to the
reserve which he formerly showed, he now condemns Bethmann's policy
with great bitterness. Bethmann, he maintains, by yielding to the
demand for universal suffrage, acted like a banker on the day
before bankruptcy who would try to save himself from disaster by
using his clients' deposits.

"The Mexico telegram[5] he treated with a good deal of sarcasm,
remarking that it was the maddest prank since the exploits of the
Captain of Köpenick, with which I agreed. If anyone, he said, ever
wrote a comedy on the subject, he would scarcely venture to lay the
plot in modern times, but would go back to the period when pigtails
and wigs were the fashion.

" ... July 30th, 1917. I had several messages over the telephone,
as well as a visit, from Lieutenant-Colonel von Voss, the Chief of
Staff with the Altona Army Command, who wanted to consult me as to
whether Prince Bülow should be offered the post of Foreign
Secretary. I am afraid, however, that there is not much chance of
his being appointed. The Prince shares this opinion, and would not
like the Press to make any propaganda in his favour.

" ... Sept. 14th, 1917. In the meantime, on August 19th, the Kaiser
has been to Hamburg on a one day's visit. He came from Heligoland,
and was brimful of optimism.

"He pretended to be very well satisfied with his new Chancellor,
and was very optimistic as to a German victory, an attitude which,
I am afraid, is not in the least justified by the situation as it
is."

In the month of September, 1917, Ballin wrote a memorandum for Dr. Schwander, the newly appointed Secretary of State for National Economy. Apart from politics this document deals with economic matters, and in particular with the legislation concerning these during the period of transition which would succeed the close of the war. Ballin gave a great deal of thought to these questions, and I shall refer to them later on. Meanwhile I will quote the text of the memorandum:

_"September 6th, 1917._

"The fall of Riga shows once more how far superior our military
achievements are to the work performed by our politicians. With the
dispatch of the Mexico telegram their folly appeared to me to have
reached its height; but the descent from that point is but slow.
The news recently published by the Press to the effect that the
Federal Council is to deal with the question of the constitutional
and administrative reforms which are to be granted to
Alsace-Lorraine, makes me fear that some big political blunder is
going to be committed again. It is evidently believed that, if
Alsace-Lorraine were to be established as an independent federal
state with perhaps some South German prince as its Grand Duke, such
a measure would remove an obstacle to peace. I, however, consider
it a great tactical mistake to attempt such a solution of the
Alsace-Lorraine problem before the war is over. We must never lose
sight of the fact that each one of the leading actors in the
political drama has to play to his own gallery, and that therefore
at the conclusion of peace--which in my opinion can only be one of
compromise--French diplomacy must be able to show up something
which the man in the street can be induced to regard as a _succès
d'estime_. No doubt it would be easier and more to our liking to
solve the problem in our own way, and at the initiative of our
Government; but by doing so we would deprive ourselves of another
possibility for compromising which we ought to keep in order to
enable the French to retire from the struggle with a fair measure
of success.

"We have a bad habit of spoiling the chances of peace by premature
actions intended to help it on and to prepare the way for it. Just
think of what we did in Poland! In the same way we deliberately
diminished the great value of the important asset which we possess
in the shape of Belgium when we set up the Council of Flanders and
introduced the administrative partition of that country.

"Besides these political matters there are others which were better
left alone for the present. I am thinking of the steps taken to
regulate our economic restoration after the war. War corporations
are springing from the ground like mushrooms after rain, and the
preparations made in order to solve the difficult economic post-war
problems have an ugly tendency toward establishing too many
Government-controlled organizations. To my mind the appointment of
a 'Government Commissioner for the period of Economic Transition'
is altogether superfluous. We must refrain from all attempts at
interfering by artificial means with the natural development of
events. This, however, is precisely what the Commissioner would
have to do. He would have to act according to instructions received
from the Bank of Germany or from some specially created body
dealing with the question of the foreign exchanges and the
provision of foreign bills.

"My belief is that our foreign exchanges which have so completely
got out of order will prove an excellent means of diminishing the
hatred against us and of making our enemies less disinclined to
resume business with us. The Americans who are now able to obtain
goods to the value of M 6.20 for their dollar, instead of M 4.20,
as they used to do, will soon discover their liking for us again.

"Another point is that the coming peace, even if we derive no other
gain from it, will enormously raise German prestige all over the
world. Prussia became a European Power after the Seven Years' War,
in spite of the fact that the peace treaty brought her neither a
territorial nor a financial gain, merely confirming the right of
Frederick the Great to the possessions he had defended in the war.
Prestige, however, means credit, and this circumstance makes me
believe that all these anxious discussions of the foreign exchange
question and of the need for controlling German payments abroad are
just as superfluous as the Government control of our economic
activities during the period of transition.

"The nations now at war will be impoverished after the war, and the
state of our exchange and the high prices of raw material will
compel us to live from hand to mouth as far as the importation of
raw material is concerned. Pending the return of normal conditions,
no sensible manufacturer will want to import more raw material than
he urgently requires.

"I therefore think we ought to try to induce the Government to
desist from its proposed control of trade and industries, and to
restore the old conditions. If the Government's proposal to carry
on under its own management large sections of our import and export
trade--in order to make these valuable sources of profit available
for the reduction of its debts--were allowed to materialize, our
economic doom would be certain, however attractive the plan might
be in view of the huge national debt. One must be careful not to
ignore the fact that the flourishing state of trade and
manufactures is always largely due to the existence of personal
relations.

"If I think of the lessons of the past forty years--a period during
which the freedom of trade, the freedom of industrial enterprise,
and the freedom of shipping have led to marvellous successes and to
the accumulation of huge wealth--I ask myself: 'How is it possible
that a wise statesman could seriously occupy himself with the plan
of establishing a Government-bound system in place of it?' How, I
ask you, can a State-managed industrial organization avail itself
of the advantages to be had when trade is booming, or to guard
itself against the losses when there is a slump? What will be the
attitude of such an organization towards dealings in futures and
speculation, both of which are indispensable forms of modern
business enterprise? True, it has been suggested that these
difficulties could be overcome if some business men were requested
to accept appointments under this system, and if so-called 'mixed'
concerns worked by the co-operation of public funds and private
capital were established. May Heaven grant that this will never be
done! I am sure you have had even more to do than I with business
men who had been promoted to the higher dignity of Government
officials. Most of them have turned out complete failures in their
new spheres; they have become more bureaucratic than our
bureaucrats themselves; their initiative and their eagerness to
take upon themselves responsibilities have never lasted very long.
Let there always be a fair field and no favour! Personal relations
and personal efficiency are all that we need for the rebuilding of
our national economic system. The 'mixed' concerns are bad because
they lack the necessary elasticity, because they disregard the
personal equation, and because they impede the indispensable
freedom of action.

"I am quite prepared for these views of mine to meet with much
criticism. People will say: 'All that is very well, but the
Government's huge indebtedness compels it to take recourse to
extraordinary measures.' Quite right, but would it not be much
wiser to reduce this indebtedness by increasing direct and indirect
taxation, instead of depriving those who have proved during the
past few decades what they can do of the means that have made them
so efficient?

"Even among the efficient business men, unless they be born
geniuses, a distinction must be drawn between those who can make
profits and those who can organize. The former kind--who are,
moreover, but few and far between--will never submit to the
personal restrictions to which they would be subjected in
state-managed or 'mixed' concerns. The second kind alone, however,
would never make any concern prosper.

"Another consideration is that the enemy countries would view with
much suspicion any such institutions controlled partly or wholly
by the Government. I remember quite well the scant respect with
which the French delegates were treated at the International
Shipping Conferences before the war. Everyone knew that the big
French shipping companies, owing to the huge Government subsidies,
had to put up with a great deal of supervision on the part of the
Government, and that they could often vote neither for nor against
the most important proposals with which the Conference had to deal,
because they had first to obtain the consent of the Government
commissioner. They were, therefore, simply ignored, as it was clear
that they could raise no counter-proposals at their own initiative.

"And truly there is every reason for us to use the utmost caution
whenever any questions connected with the reconstruction of our
country are concerned. The excellent Dr. Naumann, with his
'Berlin--Bagdad' slogan, has already smashed a good many window
panes which will have to be paid for after the war by the producing
classes. The suggestion that an economic union of the Central
European countries should be established was put forward at a most
inopportune moment, and the propaganda in its favour was bound to
bring about the retaliatory measures agreed upon by our enemies at
the Paris Economic Conference.

"The resolutions of this Conference were of little practical
importance to us until the day when America entered the field
against us. If the United States assents to them, it will become
possible to enforce them, and for this reason I am watching the
further development of the economic question with growing concern.
I maintain that peace negotiations should only be started after a
previous agreement has been arrived at between the belligerents to
the effect that, on the conclusion of peace, the commercial
relations formerly existing between them should be restored as far
as possible, and that the resolutions passed at the Paris Economic
Conference and at the Central European Conference should be
rescinded. Such an attitude, however, can only be taken up by our
delegates if they agree that the former commercial treaties, no
matter whether they are still running or whether they have elapsed,
should automatically become valid again for a fairly extensive
period of time after the close of the war. The disadvantages which
some of these treaties involve for us are easily outbalanced by the
advantages secured by the others.

"Our Government cannot be reminded too often that it is necessary
to consult experienced men of business in all such questions. Since
the early days of the war I have vainly tried to convince Herr v.
Bethmann of this necessity. After all, nobody can possibly be an
expert in everything. Yesterday, when reading the letters of Gustav
Freytag to his publisher, Mr. Hirzel, I came across the following
admirable piece of self-criticism: 'I do not know yet what is to
become of my work; but I fear I am doing what others, better
qualified than I, ought to be doing, and that I am leaving undone
what I ought to do.' Every great leader in our political and
economic life must have experienced that it is extremely
unsatisfactory to waste one's time and energy on work which another
man could do just as well as, or even better than, oneself. This
the Government should remember whenever it attempts to interfere
with the big industrial combines, such as trusts, syndicates, etc.
Wherever a syndicate is necessary in the best interests of any
industry, a leader will be forthcoming who will create it; and only
in cases where inferior minds, acting for selfish reasons of their
own, do not wish to acknowledge the need for combining, the
Government should be asked to exercise whatever pressure it
considers advisable in order to further the great aims that are
involved.

"I am afraid that after the war we shall lack the funds needed for
the solution of the traffic problems with which we shall then be
confronted, especially with regard to our inland waterways. At any
rate, if we do build the necessary canals immediately after the
war, we shall find ourselves compelled to charge such high rates to
the vessels using these waterways that their advantages will
largely tend to become illusory. Even as it is now, our trade and
our manufactures are seriously handicapped by the high canal dues
existing, by the tugboat monopoly, etc. A really far-sighted policy
which would make it its principal object to assist the progress of
our foreign trade would have to guard against the mistaken idea
that the levying of high rates was the only means of obtaining
interest on the capital invested. After all, even the turnpikes had
to be abolished in the end.

"The agitation in favour of separating from Russia the Ukraine,
Finland, and other parts inhabited by alien peoples--an agitation
which is becoming noisier every day--troubles me very much. Since
the early days of the war I have maintained that it must be our
main war aim to detach Russia from the Entente, and that we must
endeavour to establish close relations between our own country and
Russia so that the two of us shall be strong enough to face a
possible alliance between Great Britain, the United States, and
France. This should be our aim even now. But if we are going
deliberately to dismember the Russian Empire and to parcel it out
into a number of independent units, our political influence after
the war will be slight indeed, and the result must necessarily make
itself felt to the detriment of our whole economic life."

At Ballin's suggestion, the members of the Reichstag were invited to attend a meeting which was to be held in Hamburg during the summer of 1918. Large sections of people in the three Hanseatic cities viewed with grave concern the plans which the Government entertained for the economic development after the war, and the meeting had been called to draw the attention of the visitors to this state of affairs. Three principal speeches were delivered, and at the close of the meeting Ballin briefly recapitulated the main arguments against too much Government interference. Much of what he said on that occasion, and much of what he had written in the memorandum quoted above, has been borne out by the events of the recent past, even though the actual terms of the peace imposed on Germany were much more unfavourable than he had expected them to be. In addressing himself to the Vice President of the Reichstag, Geheimrat Dove, and the large number of the elected representatives of the German people who accepted the invitation, Ballin said:

"We should be glad if you would see to it that the Government does
not put a halter round our necks, and that it refrains from the
dangerous attempt to employ barrack-room methods where economic
questions of national and international importance are at stake.
Let us have air, and light, and freedom to act; and we, by availing
ourselves of our relations with the overseas countries, shall be
able to carry out the work that lies before us....

" ... I am convinced that all the measures which are contemplated
to stabilize economic conditions during the period of transition
from war to peace will do more harm than good. If carried into
practice, they will merely prepare the soil for an economic
struggle to succeed the present war of arms. We need a peace that
is doubly secure! We cannot ask our enemies to give us freedom
where we impose compulsion. We cannot fight for the freedom of the
seas, and at the same time surround Central Europe with a barbed
wire.

"I do not wish to deny that in order to carry out our economic
tasks a certain amount of Government control will be necessary.
That, of course, goes without saying; but anything beyond it is an
unmixed evil. If it is said to-day that the measures to be adopted
during the period of economic transition are, in some instances,
intended to remain in force for three years, and if it is announced
semi-officially that the thousand and one war corporations are to
be made use of for the purposes of this policy, and that their
disappearance is to be very gradual--I can only sound a serious
note of warning against any such designs. When the war is over all
those who can do efficient work will return to their normal
occupations; and those who then prefer to remain attached to the
war corporations in one capacity or other are surely to some extent
people who have discovered some hidden charms in these
institutions, or, if not, they are persons who, fearful of the
risks connected with the unfettered interplay of forces, feel that
they are better off under the protecting wing of the Government. If
you are going to entrust the future of our country to such
organizations for better or worse, the economic war after the war,
as I have said before, will be sure to follow, and you will have to
face a war that will last years and years."

As regards the closing months of the war--which are also the closing months of Ballin's life--it must suffice to refer here to one event only; one, however, which is of dramatic significance. I am speaking of Ballin's last meeting with the Kaiser. His notes on this subject, roughly sketched though they are, require no further comment. I reproduce them in full:

_"Hamfelde, August 25th (Sunday), 1918._

"Last Tuesday Herr Deters[6] rang me up to ask me on behalf of Hugo
Stinnes if I would meet him in Berlin on the Thursday.
Lieut.-Colonel Bauer, one of Ludendorff's aides-de-camp, a
gentleman largely responsible for the Pan-German leanings of the
General and for his close association with the interests of the big
manufacturers, had been to see Stinnes, and on the strength of the
information he had received from Lieut.-Colonel Bauer he thought it
advisable to have a talk with me. I declined the invitation because
I expected that the work they wanted me to do would be anything but
pleasant.

"Next morning Herr Deters rang me up again and told me that Stinnes
would call on me in Hamburg on Friday morning.

"I left for Hamfelde on Wednesday afternoon, but returned to town
again on Thursday, because Stinnes had arranged to call on me as
early as 10.30 a.m. on Friday.

"The proposed meeting thus took place on Friday, August 23rd, from
10.40 a.m. to 1.15 p.m. Stinnes, with admirable frankness and
directness, started our conversation by stating that the military
situation had become much worse. Our troops, he said, began to fail
us in our task, and the number of deserters had been very large
lately (he mentioned, I believe, that their number was 32,000).
Ludendorff had told the Crown Prince the plain truth; but it was
still necessary to explain the true state of affairs to the Kaiser,
and to make it clear to His Majesty that Hertling, who was
completely laid up with sickness, could no longer effectively fill
his post. The real work was done by his son, Captain v. Hertling,
and no efforts were being made to come to a cessation of
hostilities. In other directions, too, matters were drifting
towards a catastrophe. The Minister of War, v. Stein, lacked the
necessary authority. In many instances the men called up did not
enlist at all; in Silesia large numbers of them had concealed
themselves in the woods and forests, and their wives provided them
with food, while no energetic steps to check these occurrences were
taken by the Chief Army Command. I replied to Stinnes that if
Ludendorff agreed I would be ready to undertake the unpleasant task
of informing the Kaiser, but that it would first be necessary that
Ludendorff and myself should come to an understanding as to whom to
propose to His Majesty for the Chancellorship.

_"Continuation. Hamburg, August 26th, 1918._

"Stinnes said he thought that Ludendorff had Prince Bülow in his
mind. I told Stinnes that Bülow, in my opinion, might perhaps be
suitable at the head of a peace delegation, but that it was too
late to think of him as a possible Chancellor, and that the German
people--more particularly the Socialists--had not now the requisite
confidence in his ability to fill the post of Chancellor. Neither
would he be acceptable to our enemies. It would be difficult to
persuade Great Britain, the United States and France that a prince,
especially Prince Bülow, would seriously carry out the
democratization of Germany. If, however, we really were to discuss
peace at last it would be necessary that the office of Chancellor
should be vested in a man to whom our enemies could take no
possible exception. Stinnes perfectly agreed with me in this
matter.

"We continued to discuss other possible candidates for the post,
but we could not agree on anyone. Finally Stinnes proposed that we
should both go to Berlin and there continue the discussion together
with Lieut.-Colonel Bauer, Ludendorff's representative. He would in
the meantime report to Berlin about our conversation, and he was
hopeful that we could see Bauer either to-night (Monday), or
to-morrow (Tuesday, August 27th).

"This morning Stinnes informed me through Deters that he had sent
me a wire stating that the proposed meeting could not take place
until Monday next, September 2nd, at 8 p.m. He proposed that we
should have a preliminary meeting at the Hotel Continental at 7
p.m. the same evening. I suggested that it would be better to fix
this preliminary meeting at 6.30 p.m.

"I must add that Bauer's (that is Ludendorff's) suggestion was that
I should not see the Kaiser by myself, but together with Stinnes,
Duisburg, and Krupp v. Bohlen.

"I replied to Stinnes that I considered it very inadvisable for
such a deputation to visit the Kaiser, who would never tolerate
that four gentlemen--two of whom were perfect strangers to
him--should speak to him about such matters. It would be better
that Herr v. Bohlen, or, if Ludendorff attached special value to
it, I myself should call on the Kaiser in private, and that either
Herr v. Bohlen or I should then endeavour to induce the Kaiser to
see the other three gentlemen as well.

"Stinnes was greatly depressed and took as grave a view of the
situation as I did myself."

Ballin's notes on the Berlin meeting are confined to a few jottings, from which it appears that not Lieutenant-Colonel Bauer but Major v. Harbou in his stead took part in it, and that the question of selecting a suitable candidate for the Chancellorship proved impossible of a satisfactory solution. As a last resort, if everything else should fail, Ballin thought of proposing Stinnes himself, because in his opinion the situation demanded a man of dictatorial character and with the authority of a dictator.

Concerning his interview with the Kaiser, Ballin wrote down the following notes:

"I arrived at Wilhelmshöhe on the morning of September 5th, and I
was asked to 'report' to the Kaiser at 12.45 p.m. This expression
was chosen because the new head of the Kaiser's Civil Cabinet, Herr
v. Berg, evidently wished to invest my visit with an official
character which would enable him to be in attendance. After a
while, however, the Kaiser became impatient and did not wish to
wait till the hour appointed for the interview. So I was requested
by telephone to hold myself in readiness by 11 o'clock.

"I went to the Castle at that hour and waited in the room of the
aide-de-camp until the Kaiser came and asked me to go for a walk
with him. However, Herr v. Berg was also there and accompanied us.
Consequently the conversation lost much of the directness which
would have been highly desirable in the Kaiser's own interest, as
well as in that of the country.

"I found the Kaiser very misinformed, as usual, and full of that
apparent buoyancy of spirit which he likes to display in the
presence of third persons. The facts have been twisted to such an
extent that even the serious failure of our offensive--which, at
first, had depressed him very much--has been described to him as a
success. It is now intended to retire to the old Hindenburg line,
so that the only result of the offensive has been the loss of
several hundreds of thousands of valuable lives. All this, as I
have said, is dished up to the poor Kaiser in such a fashion that
he remains perfectly blind to the catastrophic effect of it.

"He now puts his whole trust in Herr v. Hintze, whom he evidently
looks upon as a great light.

"I told the Kaiser of my grave misgivings and made him clearly
understand that I did not think there would be much use in entering
into peace negotiations with Great Britain. I urged that no time
should be lost in immediately approaching Wilson, who was an
idealist and who had no territorial aspirations in Europe. If,
however, the war should continue much longer Wilson would most
probably become subject to the influences of a war party, and then
we could no longer hope that he would still insist upon a
settlement along the lines of his idealist programme.

"The Kaiser agreed that my views were well founded, but he thought
we ought not to enter into peace negotiations before the approach
of autumn, by which time we should have returned to the safe
position afforded by the Hindenburg line. Then, he thought, we
should avail ourselves of the offer of mediation which had been
made by the Queen of Holland.

"Whenever I was too frank in my criticisms and suggestions, Herr v.
Berg skilfully interposed. He declared to me when the Kaiser had
left that it would not do to make His Majesty too pessimistic.

"I also discussed with the Kaiser the question of doing away with
the restrictions imposed upon the sale of perishable articles of
food, such as butter, eggs, etc.; and I pointed out to him that the
fixing of maximum prices and the issuing of regulations dealing
with illicit trading merely forced the people to pay exorbitant
prices, at the same time helping those engaged in underhand trading
to amass huge fortunes. On this subject, too, the Kaiser fell in
with my own views, and it was decided to release at least the
perishable articles, and to allow them to be sold once more through
the ordinary channels without restriction.

"The Kaiser also declared that this war would soon be followed by
another, to which he referred as the Second Carthaginian War. He
spoke a great deal of an Anglo-American alliance which would, of
course, be directed against Japan, and the views on political
subjects which he expressed in this connexion showed that he is
being very badly advised indeed.

"Herr v. Berg is obviously conservative and Pan-German in his
politics, and it seems that his influence is predominant at Court.
Only on the Prussian suffrage question did he agree with my own
standpoint, which is that universal suffrage must be granted now
that the King has promised it.

"Since the Kaiser and the Kaiserin, on account of the latter's
illness, were dining alone, I joined the so-called 'Court Marshal's
table,' together with the Countesses Keller and Rantzau, the
gentlemen-in-waiting on the Kaiser, and the physician-in-ordinary
and the chamberlain of the Kaiserin. The duty of acting as court
marshal fell to General v. Gontard, as Herr v. Reischach had
unfortunately fallen seriously ill."

In order to illustrate further what has been shown to be Ballin's views on the character of the Kaiser, I here quote the first part of a letter of his, dated October 25th, 1918:

"In the meantime," he writes, "Wilson's reply has been received,
and it is certain that compliance with its terms will be equivalent
to capitulation.

"To my mind Wilson's note clearly shows that he and his allies will
demand that the Hohenzollerns, or at any rate the Kaiser and the
Crown Prince, shall relinquish their rights to the throne, and
that, in consideration of such an act, they will ease their terms
of peace.

"Each of the men who are at the head of their respective
Governments has to play to his gallery, and if these men desire to
give their audience a convincing proof of the completeness of the
success they have achieved, they can do no better than demand
condign punishment for the man who has been held responsible for
the war, and inflict it upon him. I do not believe that the Kaiser
would grieve very much if he were given a chance now of retiring
into private life without much loss of dignity. The war, which was
something absolutely uncongenial to his whole nature, has had such
bad effect on his health that it would be desirable in his own
interest if he were enabled to retire comfortably into private
life. He must see the force of this argument himself, and it is not
likely that he would refuse to accept such a chance, as a refusal
would prejudice the best interests of his country. The Kaiserin,
however, may be expected to oppose any such solution with much
feeling. If the Kaiser's grandson were now appointed his successor,
and if a regent were nominated in whom everybody had confidence,
the whole German situation would lose much of its seriousness. Of
course, the abdication of the Kaiser would not take place without
certain disturbances, but it would be necessary to face these
disadvantages with a good grace. No doubt the outlook would be
better if they could be avoided, and if the Kaiser, without losing
his position, could be invested with rights and duties similar to
those of the British king, who, broadly speaking, enjoys all the
advantages of his dignity without having to take upon himself
responsibilities which he is unable to bear. I quite believe that
the Kaiser never derived much pleasure from his sovereign powers;
at any rate, if he did, he has ceased to do so since this
unfortunate war has been forced upon him."

Ballin's last entry in his diary contains the following passage:

"Stinnes has sent word to me that the Socialist and Centre parties
are of opinion that I ought to be nominated to conduct the peace
negotiations. I have told him that I should not shirk it, but that
I should be much better pleased if somebody else would do it."

This note was written on November 2nd, 1918. One short week later, on November 9th, his heart had ceased to beat--a heart which had so warmly responded to the call of his Kaiser and country, and which had succumbed to its excessive load of grief and sorrow.