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Minister for Foreign Affairs, with Baron Macchio, the Under-Secretary.

      "I drew his attention to the unfavorable impression produced in Russia by the presentation of demands by Austria to Serbia, which it was quite impossible for any independent state, however small, to accept. I added that this method of procedure might lead to the most undesirable complications, and that it had aroused profound surprise and general condemnation in Russia. We can only suppose that Austria, influenced by the assurances given by the German representative at Vienna, who has egged her on throughout this crisis, has counted on the probable localization of the dispute with Serbia, and on the possibility of inflicting with impunity a serious blow upon that country. The declaration by the Russian Government that Russia could not possibly remain indifferent in the face of such conduct has caused a great sensation here."

      Count Benckendorff, Russian Ambassador at London, telegraphed to M. Sazonof:

      "Grey has just informed the German Ambassador, who came to question him as to the possibility of taking action at St. Petersburg, that such action ought rather to be taken at Vienna, and that the Berlin Cabinet were the best qualified to do so. Grey also pointed out that the Serbian reply to the Austrian note had exceeded anything that could have been expected in moderation and in its spirit of conciliation. Grey added that he had therefore come to the conclusion that Russia must have advised Belgrade to return a moderate reply, and that he thought the Serbian reply could form the basis of a peaceful and acceptable solution of the question.

      "In these circumstances, continued Grey, if Austria were to begin hostilities in spite of that reply, she would prove her intention of crushing Serbia. Looked at in this light, the question might give rise to a situation which might lead to a war in which all the powers would be involved.

      "Grey finally declared that the British Government were sincerely anxious to act with the German Government as long as the preservation of peace was in question; but, in the contrary event, Great Britain reserved to herself full liberty of action."

      Great Britain. Sir Maurice de Bunsen, Ambassador at Vienna, telegraphed to Sir Edward Grey, Secretary for Foreign Affairs at London, that he had consulted with his colleagues about the mediation of the four powers, and the impression was that the note to Serbia was intentionally drawn to make war inevitable, and, until Serbia had been punished, no proposals for mediation would be listened to.

      "This country has gone wild with joy at the prospect of war with Serbia, and its postponement or prevention would undoubtedly be a great disappointment.

      "I propose, subject to any special directions you desire to send me, to express to the Austrian Minister for Foreign Affairs the hope of his majesty's Government that it may yet be possible to avoid war, and to ask his excellency whether he cannot suggest a way out even now."

      Sir Francis Bertie, Ambassador at Paris, telegraphed to Grey that France had accepted his proposal for the four-power mediation, and sent the necessary instructions to her representatives at Belgrade, Vienna, and St. Petersburg.

      "Instructions have been sent to the French Ambassador at Berlin to concert with his British colleague as to the advisability of their speaking jointly to the German Government. Until it is known that the Germans have spoken at Vienna with some success, it would, in the opinion of the Ministry of Foreign Affairs, be dangerous for the French, Russian, and British Ambassadors to do so."

      Sir Edward Goschen, Ambassador at Berlin, telegraphed to Grey:

      "Secretary of State [Von Jagow] says that conference you suggest would practically amount to a court of arbitration and could not, in his opinion, be called together except at the request of Austria and Russia. He could not therefore fall in with your suggestion, desirous though he was to cooperate for the maintenance of peace. I said I was sure that your idea had nothing to do with arbitration, but meant that representatives of the four nations not directly interested should discuss and suggest means for avoiding a dangerous situation. He maintained, however, that such a conference as you proposed was not practicable. He added that news he had just received from St. Petersburg showed that there was an intention on the part of M. de Sazonof [Russian Minister for Foreign Affairs] to exchange views with Count Berchtold [Austro-Hungarian Minister for Foreign Affairs]. He thought that this method of procedure might lead to a satisfactory result, and that it would be best, before doing anything else, to await outcome of the exchange of views between the Austrian and Russian Governments.

      "In the course of a short conversation Secretary of State said that as yet Austria was only partially mobilizing, but that if Russia mobilized against Germany latter would have to follow suit. I asked him what he meant by 'mobilizing against Germany.' He said that if Russia only mobilized in south, Germany would not mobilize, but if she mobilized in north, Germany would have to do so too, and Russian system of mobilization was so complicated that it might be difficult exactly to locate her mobilization. Germany would therefore have to be very careful not to be taken by surprise.

      "Finally, Secretary of State said that news from St. Petersburg had caused him to take more hopeful view of the general situation."

      Sir George Buchanan, Ambassador at St. Petersburg, telegraphed Grey an account of the interview between M. Sazonof, Russian Minister for Foreign Affairs, and Count Szápáry, the Austro-Hungarian Ambassador, in which Sazonof had pointed out that Austria's demands entailed entire revision of existing Serbian laws, and were moreover incompatible with Serbia's dignity as an independent state; and that it would be useless for Russia, being an object of suspicion in Austria, to offer her good offices.

      "In order, however, to put an end to the present tension, he thought that England and Italy might be willing to collaborate with Austria."

      Sir George told M. Sazonof that Grey could do nothing more than he had promised on the 24th inst., and that the Russian Minister was mistaken if he believed that peace would be promoted by Great Britain telling Germany it would have to deal with her as well as with Russia and France if it supported Austria by force of arms.

       "Their attitude would merely be stiffened by such a menace, and we could only induce Germany to use her influence at Vienna to avert war by approaching her in the capacity of a friend who was anxious to preserve peace. His excellency must not, if our efforts were to be successful, do anything to precipitate a conflict. I trusted that the Russian Government would defer mobilization ukase for as long as possible, and that troops would not be allowed to cross the frontier even when it was issued.

      "The Minister for Foreign Affairs replied that, until the issue of the imperial ukase, no effective steps toward mobilization could be taken, and the Austro-Hungarian Government would profit by delay in order to complete her military preparations if it were deferred too long."

      In a supplementary telegram Buchanan reported that M. Sazonof had proposed

      "that the modifications to be introduced into Austrian demands should be the subject of direct conversation between Vienna and St. Petersburg."

      Grey telegraphed to Sir Eward Goschen, British Ambassador at Berlin, that Prince Lichnowsky, the German Ambassador at London, had informed him that Germany accepted in principle the four-power mediation, reserving its right as ally to help Austria if attacked.

      "He has also been instructed to request me to use influence in St. Petersburg to localize the war and to keep up the peace of Europe.

      "I have replied that the Serbian reply went further than could have been expected to meet the Austrian demands. German Secretary of State [Von Jagow] has himself said that there were some things in the Austrian note that Serbia could hardly be expected to accept. I assumed that Serbian reply could not have gone as far as it did unless Russia had exercised conciliatory influence at Belgrade, and it was really at Vienna that moderating influence was now required. If Austria put the Serbian reply aside as being worth nothing and marched into Serbia, it meant that she was determined to crush Serbia at all costs, being reckless of the consequences that might be involved. Serbian reply should at least be treated as a basis for discussion and pause. I said German Government should urge this at Vienna.

      "I recalled what German Government had said as to the gravity of the situation if the war could not