The deeds of our navy rank beside the successes of the army.  When Admiral von Holtzendorff was permitted to lay before His Apostolic Majesty the plans for the U-boat warfare, the prospects of success for this stringent measure had been thoroughly tested here and the expected military advantages weighed against the political risk.  We did not conceal from ourselves that the infliction of a blockade of the coasts of England and France would bring about the entry into war of the United States and, consequently, a falling off of other neutral states.  We were fully aware that our enemies would thus gain a moral and economic renewal of strength, but we were, and still are, convinced that the disadvantages of the U-boat warfare are far surpassed by its advantages.  The largest share in the world struggle which began in the East has now been transferred to the West in ever increasing dimensions, where English tenacity and endurance promote and strengthen the resistance of our enemies by varied means.  A definite and favourable result for us could only be achieved by a determined attack on the vital spot in the hostile forces; that is, England.

The success obtained and the effect already produced by the U-boat warfare far exceed all calculations and expectations.  The latest statements of leading men in England concerning the increasing difficulty in obtaining provisions and the stoppage of supplies, as well as corresponding comments in the Press, not only include urgent appeals to the people to put forth their utmost strength, but bear also the stamp of grave anxiety and testify to the distress that England is suffering.

The Secretary of State, Helfferich, at a meeting of the Head Committee of the Reichstag on the 28th ult., gave a detailed account of the effects of the U-boat warfare on England.  The review was published in the Norddeutsche Allgemeine Zeitung of the 1st inst.  I beg herewith to refer to the enclosed.[8]

According to the latest news the Food Controller, Lord Rhondda, owing to the inadequate supply of corn, has been compelled to specify a new allotment of cargo space.  This is already so restricted that more room for corn can only be secured by hindering the conduct of the war in other ways.  Apart from abandoning overseas traffic, vessels could only be released by cutting down such imports as absorbed much space.  England requires not only great transport facilities for provisions but also for the import of ore to keep up war industries, and also pit props to enable the coal output to be kept at a high level.  In the case of the ore needed for England and the wood available in the country, it is not possible to restrict the cargo space in these two instances.  Already, after three months of the U-boat warfare, it is a fact that the shortage of cargo space caused by the U-boats reduces the living conditions of the population to an unbearable extent, and paralyses all war industries,