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Germany might do likewise. It would be

useless to discuss peace until Germany was

prepared to accept the terms long before

put forward by Mr. Asquith, namely,

"restitution, reparation, guarantees against


President Wilson seems to have realized

that a crisis was coming, and in an effort

to prevent the inevitable he dispatched,

on December 18, a note to all the belligerents saying that the leaders on both sides

contended that they were fighting for

virtually the same things, yet the authoritative spokesmen of neither side had ever

"avowed the precise objects which would,

if attained, satisfy them and their people

that the war had been fought out." He

emphasized the vital interest of the

United States in the question of peace

and suggested "that an early occasion

be sought to call out from all the nations

now at war such an avowal of their respective views as to the terms upon which

the war might be concluded and the

arrangements which would be deemed

satisfactory as a guaranty against its

renewal or the kindling of any similar

conflict in the future as would make it

possible frankly to compare them." At

the same time, he declared that he was

not proposing peace or even offering

mediation. He was "merely proposing

that soundings be taken in order that

we may learn, the neutral nations with

the belligerents, how near the haven of

peace may be for which all mankind longs

with an intense and increasing longing."

In explaining the note, Secretary of State

Lansing said that it was sent because our

own rights were becoming more and more

involved and we were "drawing near the

verge of war ourselves." We were entitled,

therefore, to know exactly what each belligerent sought in order that we might regulate our conduct accordingly. Lansing's

pessimistic words precipitated a serious

stock panic, nor was the country reassured

by a second statement in which he declared

that the Government was not considering any change in its policy of neutrality.

Although the President had asserted

that his decision to send the note antedated the transmission of the peace

proposals sent out by the Central Powers,

his action was received by them with

approval as tending to support their peace

proposals in European countries; on the

other hand, his note was bitterly criticized as playing into the hands of the

Central Powers. In the United States extreme pro-Ally sympathizers emphatically

denounced his act as inopportune and

ill-advised, but pacifists, pro-Germans

and partisans of the President applauded

him and prophesied that his step would

bring peace.

A feature of the affair which attracted

considerable attention was that the

President's note in some way had become

known several days in advance to certain

stock exchange firms and it was charged

that various government officials had

profited enormously on the stock market

as a result of this "inside tip." A letter

to a Congressman, signed by one "Curtis,"

named, among others, the President's

secretary, Mr. Tumulty, and the President's brother-in-law, Mr. Bowling, as

haying been beneficiaries of this information. Charges were also made by

others against members of the Cabinet

and other prominent public men. Investigation failed to substantiate these

extravagant charges, but of the "leak"

there was no doubt.

The Central Powers replied to the

President's note on December 26. They

carefully evaded, however, naming their

terms of peace and merely proposed "the

speedy assembly on neutral ground of

the delegates of the warring states." The

reply of all the Entente Allies except

Belgium was handed to Ambassador Sharp

at Paris on January II, 1917. Unlike

the Central Powers, the Allies laid down

certain specific terms including the restoration of Belgium, Servia, and Montenegro,

the evacuation of invaded territories, and

the expulsion from Europe of the Ottoman

Turks. Belgium submitted a separate reply which in part was as follows:

"Previous to the German ultimatum,

Belgium only aspired to live upon good

terms with all her neighbors. She practiced