The Illusion of Victory

by Thomas Fleming

  When the Lusitania was sunk, William Jennings Bryan was one of the few Americans who resisted the hysteria whipped up by Wellington House and its American mouthpieces. Citing the Lusitania’s cargo manifest, which listed the ammunition as well as material for uniforms and leather belts in its cargo, he told Woodrow Wilson:“A ship carrying contraband should not rely on passengers to protect her from attack—it would be like putting women and children in front of an army.” That was an ironic echo of the Bryce Report, which accused the Germans of doing this in Belgium.70

  Wilson ignored his secretary of state and filed an angry protest with the German government, in which he baldly stated that American citizens “bound on lawful errands” had the right to travel on ships belonging to “belligerents” and Germany would be held to a “strict accountability” if it violated these rights. He followed this with a second note that virtually required Germany to abandon unrestricted submarine warfare. Rather than sign this second note, Bryan resigned, accurately predicting that Wilson’s policy was certain to embroil the United States in war with Germany.71

  Bryan was succeeded by Robert Lansing. Two weeks after he took over the State Department, he wrote himself a private memorandum, which could have been excerpted from a statement by Wellington House:“I have come to the conclusion that the German Government is utterly hostile to all nations with democratic institutions because those who compose it see in democracy a menace to absolutism and the defeat of the German ambition for world dominance. . . . Germany must not be permitted to win this war or even to break even.”72

  Making Lansing secretary of state was one of Wilson’s worst mistakes. The president had little or no respect for the man and seldom concealed it. Colonel House had even less respect. He told Wilson that Lansing’s “mentality” did not impress him. But the president, like many other holders of the office, considered himself the master of the nation’s foreign policy and regarded the secretary as a mere messenger. In this view, House wholly concurred. He opined that the ideal secretary of state was a person with “not too many ideas of his own.” Lansing, by no means a stupid man, resented Wilson’s (and House’s) scarcely concealed contempt for his opinions. He used the power and influence of his office to undermine Wilson’s neutrality.73

  By 1916, the United States was supplying Great Britain, France and Russia with 40 percent of their war matériel. France and Russia were broke, and London was paying for everything. Of the 5 million pounds England spent on the war each day, 2 million pounds—$70 million a week—were spent in the United States. (This computes to $96,000,000 a week in 2002 dollars.) Three British missions were operating in Washington, D.C. The Ministry of Munitions had a staff of 1,600 and bought weapons and ammunition for both Britain and bankrupt France. Ministry agents were in hundreds of U.S. factories where orders were being filled; agents also rode the freight trains and supervised loading at U.S. docks to prevent sabotage. The Board of Trade and an entity called the Wheat Export Company were also hard at work buying immense amounts of civilian goods, cotton and grains.74

  Simultaneously, the United States did little while the British navy slowly but steadily extended the meaning of the word contraband (of war) until the definition included almost every imaginable article produced by farmers or industrialists. Cotton shipped to Germany had to be unloaded in New York and x-rayed, bale by bale, at the shippers’ expense to make sure it did not carry concealed contraband. A few months later, cotton itself became contraband. American exporters and companies that did business with the English were ordered to form trade associations that solemnly promised to sell nothing to Germany or Austria. Finally, in July 1916, the British published a blacklist of 87 American and 350 South American companies that were trading with Berlin and Vienna.

  Not a few American businessmen resented this arrogant restraint of trade by a foreign nation. President Wilson exclaimed to an alarmed Colonel House:“I am . . . about at the end of my patience with Great Britain and the Allies.” But Secretary of Commerce William Redfield, a passionate Anglophile, warned the president that an embargo on further business with England would be “more injurious” to the United States than to the countries at war. According to Redfield, an embargo would cost America the Triple Entente’s good will, which the United States would need badly when the war ended. This reasoning was based on the virtually invulnerable American assumption that an Allied victory was inevitable. Wilson, sharing the assumption, retreated into silence on the blacklist.75

  XII

  Watching this performance, Germans in the United States and in Germany became more and more embittered and skeptical about Wilson’s protestations of neutrality.“I do not think the people in America realize how excited the Germans have become on the question of selling munitions of war . . . to the Allies,” Ambassador James Gerard reported from Berlin. When Colonel House visited Berlin in 1915 on a supposed peace mission, he told Wilson that everyone he met “immediately corner[ed] me . . . to discuss our shipment of munitions to the Allies.”76

  The Germans became even more exercised when a U.S. machine tool company advertised a new lathe that could produce “poison shells” filled with two acids that would explode and cause death “in terrible agony within four hours.” Ambassador Gerard reported that a copy of the advertisement had been laid on the desk of every member of the Reichstag. Gerard, who was about as neutral as Robert Lansing, complained that “a veritable campaign of hate” against the United States was swirling through Germany.77

  In America, not a few members of the German embassy staff began to view the U.S. armaments industry as a branch of the British war machine. They decided it was their duty to disrupt this flow of weaponry. Their first large-scale attempt was legal and ingenious. They set up a corporation called the Bridgeport Projectile Company (BPC) and funneled several million dollars into its treasury. BPC ordered huge quantities of hydraulic presses, machine tools and rolling mills, depriving companies that were supplying the British with the tools needed for expansion. The Germans also tried to corner the market in carbolic acid, a vital ingredient in explosives. They hired agent provocateurs to stimulate strikes in ammunition factories where immigrants from Austria-Hungary predominated.

  All these activities were organized by Heinrich Albert, a self-effacing commercial attaché in the German embassy. He never dreamed that Secretary of the Treasury William Gibbs McAdoo, with President Wilson’s approval, had ordered the U.S. Secret Service to begin shadowing him. (They also began tapping the telephones of the German and Austrian embassies.) One hot day in July, Albert, weary from his labors, dozed off on a New York subway, awoke at his stop and dashed off the train, leaving his briefcase behind. The Secret Service agent tailing him grabbed it—itself a violation of America’s neutrality. Soon McAdoo and Wilson were examining the briefcase’s contents, which revealed almost all Germany’s covert operations, from the munitions diversion to fomenting strikes to financing the newspaper Fatherland.

  McAdoo admitted that none of these operations were the basis for any “legal action” against Germany. But, he claimed, he saw a chance to “scare the whole swarm of propagandists—British and French as well as German.” With President Wilson’s approval, he gave the contents of Albert’s briefcase to the New York World, which plastered it all over the front page, topped by screaming headlines:

  HOW GERMANY HAS WORKED IN U.S. TO SHAPE OPINION, BLOCK THE ALLIES AND GET MUNITIONS FOR HERSELF. TOLD IN SECRET AGENT’S LETTERS.78

  German agents operating under deeper cover planted bombs in U.S. armament factories, on docks where the deadly products were loaded, and in the holds of freighters carrying them to Europe. During the night of July 30, 1916, tons of ammunition on Black Tom Island, off Caven Point in Jersey City, blew up, breaking tens of thousands of windows in that city and in lower Manhattan, just across the harbor. Six months later, a munitions plant in Kingsland, New Jersey, exploded. These acts of sabotage did little to stem the flow of weaponry and munitions to France and England. In t
he United States, although connections to the explosions were unproved, the Germans were suspects number one, and pro-British advocates in U.S. newspapers had no trouble convicting them in the court of public opinion.

  A key player in this spy-versus-spy game was John Revelstoke Rathom, the editor of the Providence Journal. Born in Australia, Rathom had been educated in England and was a Germanophobe of manic proportions. He had close connections with Captain Guy Gaunt of the British navy, the man in charge of British intelligence operations in the United States and a confidant of Colonel House. Gaunt leaked stories, some true, on German undercover operations to Rathom, who soon established himself as the premier authority on the matter. The New York Times was so impressed, its editors worked out an agreement whereby they bought exclusive rights to reprint the material under the heading “The Providence Journal will say this morning . . . ”79

  It was hardly surprising, in the light of what was transpiring in the United States, that the leaders of Germany looked with growing skepticism on Wilson’s claim to be an unbiased peacemaker who could mediate a settlement between the warring nations. The kaiser and his ministers had yielded to the president’s demands to moderate their submarines’ tactics because they were winning the war in Europe. On the Eastern Front, whole Russian armies had been enveloped and destroyed. In the west, the German army’s casualties were much lower than those of the French and British forces, and their army’s morale remained high.80

  But as 1916 lengthened, the British blockade began to inflict menacing damage on the German home front. Food riots broke out in some cities. The lower classes were living close to the malnutrition line. These realities—and a London-Paris rejection of Berlin’s call for a peace conference—played a crucial part in Berlin’s decision to announce unrestricted submarine warfare, knowing that the decision would probably bring the United States into the war. The Germans were gambling that their submarines could starve the British into submission before American troops could reach Europe in significant numbers. The almost total unpreparedness of the American army lent credence to this strategy.

  XIII

  On the Allied side, another kind of shortage began to assume nightmarish proportions. By January 1917, not even J. P. Morgan could come up with enough money to keep pace with Great Britain’s expenditures in the United States. Morgan informed the British that henceforth, all loans (by this time the parties involved were using the correct term) would have to be on a short-term basis, against collateral. By March, it became apparent that Britain was reeling toward bankruptcy. There were only 114 million pounds of gold left in the Bank of England’s vaults to cover further loans. Secretary of State Lansing told Woodrow Wilson of a warning from Ambassador Page that “the collapse of world trade and of the whole of European finance” was imminent. This breakdown would mean the cessation of all war orders in hundreds of U.S. factories—a day of reckoning that would have a catastrophic impact on the American economy.

  Around the same time, Colonel House received letters from American embassy staffers in Paris and London, warning him that French morale was in danger of cracking. House immediately told Wilson, “If France should cave in before Germany, it would be a calamity beyond reckoning. . . . If we intend to help defeat Germany . . . it will be necessary for us to begin immediately.” It was in the shadow of these looming threats that the president decided the Zimmermann telegram and Germany’s submarine “outrages” left him no choice but war.81

  XIV

  Is there an explanation for Woodrow Wilson’s “unneutral” neutrality? One answer is the president’s Anglophilia. He profoundly admired the English system of government; in fact, he thought it was superior to the American system. His greatest political hero was Prime Minister William Evarts Gladstone, who rhetorically thrashed the conservatives and persuaded England to take a more liberal attitude toward Ireland, among other things. In an unguarded moment, Wilson confessed to a friend that he hoped for an Allied victory in the war but was not permitted by his public neutrality to say so.

  It does not take a degree in psychology to see how such a man could be heavily influenced by Wellington House’s propaganda. Another large factor was Wilson’s peculiar blind spot about economic realities and their influence on people and affairs. The son of a minister father, he went from college into academic life, after a brief brush with practicing law. He had little or no chance to understand how businesspeople, journalists and politicians influenced a society. One of his former students remarked that in his lectures, “ Mr. Wilson gave us no glimpse of the economic background of the English ruling class. . . . It was never hinted in his lecture-room that the British landed gentry, bankers and businessmen enacted laws to protect their own class and group.”

  The socialist leader Norman Thomas, another former student of Wilson’s, put it more succinctly: “If he [Wilson] had ever heard of [the] dictum that the distribution of power follows the distribution of property, he never discussed it with us in the classroom.”82

  Not to be underestimated in Wilson’s worldview was the influence of Colonel House. The intensity of their friendship was unique in presidential annals. Wilson repeatedly expressed amazement about how often they thought exactly alike. Much of this reaction can be credited to House’s astute handling of Wilson, who did not like to be contradicted once he had formed an opinion. There is also no doubt that a great many of Wilson’s opinions about the war were formed by this small, shrewd Texan. Nor is there much doubt that most of House’s opinions on the war were formed by his contacts with the top people in the English government, all of whom wined and dined him at their clubs and baronial homes and flattered him relentlessly into accepting their view of the conflict.

  The most striking example of Colonel House’s Anglophilia was an arrangement he worked out with Foreign Secretary Edward Grey. Reading House’s letters to “Dear Sir Edward” (signed “Affectionately yours”) makes it clear that this was not a correspondence between two men representing independent powers with widely differing opinions on the war. In May 1916, for instance, House anxiously warned Grey of a shift in American public opinion against England because Germany had suspended unrestricted submarine warfare while London persisted in its blockade. In another letter the following day, he discussed whether the “wearing down process,” as far as Germany was concerned, had gone far enough to make it “sensible of the power we can wield.”

  Whereupon House informed the British foreign secretary that the president was ready to commit himself to a plan that Grey had sown in the colonel’s brain nine months earlier. Wilson would approve a secret agreement with the British to commit the United States to war on their side, if Germany refused to respond to the president’s call for an immediate peace conference. Moreover, House agreed that Wilson would only speak when the British decided the time was ripe for a peace advantageous to them. Could there be a more complete revelation of which way House–Wilson– Philip Dru was tilting?83

  The House-Grey memorandum was executed, with only one small reservation by the president. He wrote the word “probably” into the statement that the United States would join the war on the side of the Triple Entente if Germany balked at the British peace offer. After the war, Grey would claim in his memoirs that as far as he was concerned, this single word invalidated the plan. But the minutes of the British cabinet meetings at the time tell a very different story. They show Grey weighing the pros and cons of the proposal, with only one thought in mind: Which alternative was likely to be best for England? He consulted British military authorities to find out if they thought England would be “completely victorious”—in which case it would be “better to ignore” the memorandum. After considerable debate, the cabinet hard-liners such as Arthur Balfour, who thought the proposal was “not worth five minutes thought,” convinced the majority that Germany was not sufficiently defeated to obtain the total victory they sought. Months went by with no word from Grey while men died by the tens of thousands on the Western and Eastern Fronts.84


  Soon after Wilson’s reelection in 1916, House and the president decided they could wait no longer. They went all out to pressure Grey with cables, letters, messages through third parties into signaling that the president was ready to breathe life into the House-Grey memorandum. They got nowhere. Grey retreated to saying that as long as Field Marshal Haig and his generals thought there was a chance of Britain’s winning the war, he could not agree to Wilson’s mediation. Ever the diplomat, Grey finessed House and Wilson out the door by warning them that a unilateral call for peace would be considered pro-German.85

  A cynical explanation for this performance was Grey’s assumption that House and Wilson were on Britain’s side no matter what he decided and could be strung along indefinitely with such proposals, which fed what House called the president’s desire “to serve humanity in a large way.” By and large, Grey was right. As a mediator, Wilson had allowed himself (and House) to be maneuvered into an impossible situation. The British regarded him with bemused contempt. In private letters, Ambassador Cecil Spring Rice mockingly called Wilson “our Savior.” the Germans, thanks to Wilson’s refusal to limit U.S. trade in weapons and food with the Allies, considered him pro-British. In the crisis weeks of early 1917, when Wilson called for peace without victory, Berlin told Ambassador von Bernstorff that the president’s mediation was “positively not desired.”86