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At the time of the dsipatch of the ultimatum to Serbia there still prevailed among the gentlemen who ruled in Berlin and Vienna a reckless self-assurance which believed that victory was already theirs, either diplomatic victory if Russia should submit without a fight to the capitis diminutio intended for her (as William expressed it, meaning her shameful degradation), or military victory if Russia allowed herself to be misled into drawing the sword.

But this assurance was based on the expectation that it would be possible (i) to secure the necessary approval of the German public; (2) to retain Italy as an ally, and (3) to induce England to remain neutral.

Then came Serbia's reply. The more its effect was felt, the more dubious became the general attitude towards Austria and her backers. Thus arose that uncertainty the symptoms of which we have just recognized.

We have seen William's indignation at the "Sozi" (Socialists). His Italian ally had another cause for anxiety in store for him.

Had the conspirators of Potsdam seen things as they really were, and not as they ought to be according to their wishes, they would have understood from the out-set that far from reckoning on Italy's support, they should have been prepared for her hostility.

In the Balkans, Italy was as much Austria's rival as Russia. Indeed, the paths of Austria crossed Italy's proposed course far more than that of Russia, since both Italy and Austria desired to expand on the western side of the Balkans. After the annexation of Bosnia by Austria in 1909 there had therefore been a marked rapprochement between Russia and Italy in Balkan policy.

Serbia also might well become a competitor with Italian Imperialism in the Balkans. But in those days it was still a small country, with 3,000,000 inhabitants, that is to say, quite harmless in comparison with the great Habsburg Monarchy with its 50,000,000 of population.

And not only the imperialism but also the democracy of Italy was antagonistic to Austria, who oppressed and persecuted the million of Italians in her territories.

In reality Italy was Germany's ally only, and not Austria's. Between the Italians and the Austrians there was bitter enmity; an enmity so great that as early as 1909 the Chief of the Austrian General Staff, Conrad von Hötzendorff, had urged war against Italy. The temper of the Austrian staff officers and diplomats had not been improved by the fact that in 1913 Italy had thwarted Austria's plans for a war against Serbia.

So little did the conspirators trust their "ally" that they considered it necessary to keep the secret of their enterprise against Serbia most carefully from her, as well as from the rest of the world. Italy's surprise at the Austrian ultimatum to Serbia was not only apparent, like that of Germany; it was genuine.

That the Italian Government was deeply incensed at this was to be expected; and even if they had been willing to stand by Austria it would have been difficult for them to do so. In Italy public opinion at once took the side of Serbia against Austria. But an Italian Government was far less its own master than a German or an Austrian. It dared not risk a conflict with a strongly expressed popular feeling.

In these circumstances the only way to win over Italy might have been for Austria to afford Italy ample compensation, such a compensation as the people also would accept; for example, the cession of the Trentino.

A policy marked by ordinary foresight would have made sure of this point before committing itself to the hazard of war—if it considered war necessary at all. From their own imperialistic point of view William and Bethmann ought to have demanded from Austria the assurance that she was ready to make definite concessions to Italy, before they promised in Potsdam unreserved support to Austria in a war against Serbia.

But they were in too great a hurry for this. The venture which brought about the terrible world-war—was quite apart from all moral considerations—started with such stupidity and levity that in Berlin they did not even think of first binding Vienna to compensate Italy. They never even inquired what were the objects aimed at in a war against Serbia. It was only afterwards that they began to think either about the war-aims or about Italy. Ten days after the Potsdam conference, on July I5th, Jagow telegraphed to Tschirschky in Vienna:

"Just as Italian popular opinion is in general Austrophobe, so it has so far always shown itself Serbophil. I have no doubt that in a conflict between Austria and Serbia it will be pronouncedly on the side of Serbia. A territorial expansion of the Austro-Hungarian Monarchy, even an extension of its influence in the Balkans, is detested in Italy and regarded as an injury to Italy's position there. In consequence of an optical delusion, in face of the inevitable threat by her neighbour Austria, the Slav danger, which is really much greater, is not recognized. Quite apart from the fact that the policy of the Government in Italy depends materially upon the variations of public opinion, the above view is that which is held by the majority of Italian statesmen. On every occasion that there has been a question of a threat to Serbia by Austria I have noticed an extraordinary nervousness. If Italy took the side of Serbia this would unquestionably and materially encourage Russia's desire for action. In St. Petersburg they would calculate that Italy would not only not fulfil her pledges to the alliance, but, wherever possible, act directly against Austria-Hungary. And a collapse of the Monarchy would also open up for Italy the prospect of gaining some long-desired territories.

"It is therefore, in my opinion, of the greatest importance that Vienna should come to an arrangement with the Cabinet in Rome about the objects to be pursued in Serbia, in case of a conflict, and should keep Italy on her side, or—as a conflict with Serbia alone does not mean a casus fæderis—strictly neutral. By her agreements with Austria, Italy has a right to compensation in case of any alteration in the Balkans in favour of the Danube Monarchy. This compensation would form the object and the bait for the negotiations with Italy. According to our information the cession of Valona, for example, would not be regarded in Rome as an acceptable compensation. Italy seems at present to have given up altogether the desire to establish herself on the altera sponda of the Adriatic.

"As I may state in the strictest confidence, the acquisition of the Trentino will alone be considered ample compensation in Italy. This morsel would, moreover, be so dainty that it might also suffice to close the mouth of Austrophobe public opinion. That the surrender of a strip of the ancient territory of the Monarchy would be very difficult to reconcile with the feelings of the ruler and of the people of Austria, cannot be denied. But, on the other hand, the question is, what is the value of Italy's attitude for Austrian policy, what price one is willing to pay for it, and whether that price is in proportion to the gain desired in another direction?

"I beg your Excellency to make the attitude of Italy the subject of a thorough confidential discussion with Count Berchtold, and, if possible, to touch on the question of compensation at the same time. Whether in this conversation the question of the Trentino can be raised, I must leave to your judgment and knowledge of how feeling is disposed in Vienna.

"The attitude of Italy will in any case be of importance for Russia's attitude in the Serbian conflict. If a general conflagration should result from the latter it would be of the greatest military importance for us also.

"To avoid misunderstanding, I may observe further that we have made no communication of any kind to the Rome Cabinet regarding the negotiations between Vienna and Berlin, and that the question of compensation has therefore not been discussed by us."

It was easy for Jagow to talk! He ought to have known the stupidity and stubbornness of his Austrian friends better. They would not hear of compensation in Vienna.

On July 20th Tschirschky thus reports an interview with Berchtold:

"Count Berchtold said that in his opinion, as things lay, the question of compensation would not now become a real one at all. In yesterday's discussion, at Count Tisza's instigation in particular, as he had emphasized that neither he nor any Hungarian Government could agree to a strengthening of the Slav element in the Monarchy by the annexation of part of Serbia, it was decided to waive any permanent incorporation of foreign territory. Any valid reason which Italy might have for demanding compensation would thus disappear. To my remark that on Italy's part even the overthrow of Serbia and the consequent extension of the influence of the Monarchy in the Balkans would be regarded as injuring her position and would lead to protests, the Minister thought that this point of view was in contradiction to the repeated declarations of the Marquis of San Giuliano, that Italy required a strong Austria."

After the Austrian Count had uttered this profound piece of wisdom, he went on to talk of the principle of nationality, which had been broken by Italy herself in the occupation of Libya, and continued:

"If, however, in Rome they cannot imagine at present a far-reaching Austro-Italian co-operation as a matter of practical politics, we reply that there is no need for anything of the sort. Austria demands neither co-operation nor support, but simply abstention from hostile action against an ally."

To the Minister, in his eagerness for action, the Italians caused no anxiety.

"He had no illusions regarding the anti-Austrian and pro-Serb feelings of San Giuliano and of the Italians, but was firmly convinced that for military reasons and reasons of domestic politics Italy could hardly think of active intervention. Herr von Merey (the Austrian Ambassador in Rome) believed, and he, the Minister, considered this opinion well-founded, that San Giuliano' s main object was to bluff Austria and seek shelter for himself from Italian public opinion."

After such proofs of levity and stupidity, the German Government ought to have felt serious qualms about entering with such an ally into an adventure which threatened to lead to "a general conflagration." William himself, however, remained at first still optimistic.

Jagow telegraphed to him on July 25th a report from Flotow in Rome, which had been sent off from there on the evening of the 24th. It says:

"In a conference, fairly excited and lasting several hours, with the Premier Salandra and the Marquis di San Giuliano, the latter laid it down that the spirit of the Triple Alliance Treaty demanded that in so momentous a step by Austria she should previously have come to an arrangement with her allies. As this had not been done with Italy, Italy cannot consider herself bound as regards any further consequences of this step.

"Besides" (he said) "Article 7 of the Triple Alliance Treaty (which I have not at hand here) demands that in alterations in the Balkans the contracting parties should previously come to an arrangement, and that if one of the contracting parties brings about territorial changes, the other should be compensated.

"To my remark that, so far as I knew, Austria had declared she did not seek territorial acquisitions, the Minister said that a declaration to this effect had only been given with considerable limitations. Austria had rather declared she did not at present seek territorial acquisitions, making a reservation regarding any other decisions which might later become necessary. The Minister thought that he would therefore not be blamed if he took precautionary measures in good time

"The text of the Austrian Note was composed in such exceedingly aggressive and tactless language that the whole of public opinion in Europe, and with it Italy [She wanted to go quietly hunting in Albania, and this has irritated Austria.—W.] would be against Austria. No Italian Government could fight against this. [Bosh !—W.]

"My impression is that the only possibility of retaining Italy is promptly to promise her compensation [The little thief must always be grabbing something.—W.] if Austria is planning territorial acquisitions or the occupation of Lovcen."

Jagow remarks on this telegram that the Italian Ambassador in Berlin, Bollati, had demanded compensation, otherwise Italy's policy must be directed towards preventing an extension of Austrian territory. William underlines the word "compensation" and adds "Albania." At the close of the telegram, however, he makes the classic observation:

"This is utter twaddle and will all settle itself in the course of events."

In the Foreign Office and even in the General Staff, however, Italy's attitude was regarded with less optimism, and William himself began, after he was on shore again, to consider things somewhat more soberly, especially when he saw the effect of the Serbian reply.

The German Government continued to urge Austria to grant compensation to Italy

Flotow reported on July 25th from Rome :

"At yesterday's discussion with Salandra and the Marquis di San Giuliano, which repeatedly led to sharp encounters between the Marquis di San Giuliano and myself, three points seemed to be marked on the Italian side: firstly, fear of public opinion in Italy; secondly, consciousness of military weakness, and thirdly, the desire to gain something for Italy out of this opportunity, if possible, the Trentino."

On this Bethmann-Hollweg remarks:

"His Majesty considers it absolutely necessary that Austria should in good time come to terms with Italy on the question of compensation. Herr von Tschirschky is to be told this in order that he may inform Count Berchtold by special command of his Majesty."

Flotow continues in his report:

"The possibility that Italy might eventually even turn against Austria was not directly mentioned by Count di San Giuliano, but it came out in gentle hints. ... As already reported, the Marquis di San Giuliano, on the ground of the composition of the Austrian Note, emphatically championed the thesis that Austria's procedure against Serbia was an aggressive one, that therefore all intervention by Russia and France that might result would not make the war a defensive one, and that there would not be a casus fœderis'. I vigorously combated this view, if only for tactical reasons. But Italy will probably stick to this possibility of slipping out.

"The total result is thus: In the event of a European conflict arising, one can hardly reckon on Italy's active assistance. So far as it is possible to foresee to-day, a directly hostile attitude by Italy to Austria might be prevented by skilful behaviour on the part of Austria."

On the 26th Flotow continues:

"The Marquis di San Giuliano continues to tell me that Austria's procedure is exceedingly serious for Italy, as Austria might use the same tactics to-morrow against Italy with respect to the Irredenta. Italy therefore cannot give her approval to such steps. According to confidential reports from Bucharest, His Majesty the King of Rumania is of the same opinion with regard to the Rumanians living in Hungary. ...

"The Minister still does not believe the Austrian assurances that no Serbian territory is to be claimed. ... The Minister again hinted that without compensation Italy would be forced to cross the path of Austria."

Whoever wished really to serve the cause of the peace of the world ought of course, to urge upon Austria above all things to be content with the Serbian reply. Instead of this, pressure was placed upon Austria to come to an arrangement with Italy in order that she might be stronger in the case of the Serbian war becoming a European conflict. The more this probability increased, the more urgent became the admonitions to Vienna.

On the 26th, Bethmann-Hollweg telegraphs to Tschirschky in Vienna:

"The Chief of the General Staff also considers it urgently necessary that Italy should be firmly retained in the Triple Alliance. An arrangement between Vienna and Rome is therefore necessary. Vienna must not evade an agreement by disputable interpretations of the Treaty, but must make her decisions in keeping with the gravity of the situation."

The demands became more and more urgent. On the 27th, Jagow telegraphs to the ambassador in Vienna:

"His Majesty the Kaiser considers it absolutely necessary that Austria should promptly come to an arrangement with Italy regarding Article 7, and the question of compensation. His Majesty has expressly commanded that your Excellency should communicate this to Count Berchtold."

But neither the Chief of Staff nor the Kaiser himself succeeded in overcoming the passive resistance of the gentlemen of the Ballplatz, who had once made up their minds to see in the Italians not an ally but an enemy.

And like Italy, on account of this sullen perverseness, the other ally whom Germany still had, Rumania, also threatened to fail her. This must have given rise to serious anxiety, and still more the attitude of England.