The Economic Position--Moratorium Extension--Great Britain's Oversea Trade--Germany's Commerce--Question of Food Supplies--Importance of the Balkans--"Petrograd" 165 CHAPTER I The "Scrap of Paper"--Sir Edward Grey's further Statement--The Houses of Parliament and Belgium--Indian Troops--The German White Book. SINCE the first volume of this series appeared, additional particulars respecting the diplomatic negotiations preceding the outbreak of war have been made known; and to these, with some further details which have not hitherto been sufficiently emphasized, the attention of the public may now be usefully directed. On August 27th, the Foreign Office issued an important dispatch from Sir E. Goschen, British Ambassador at Berlin, to Sir Edward Grey, respecting the rupture of diplomatic relations with the German Government. It is dated London, August 8th, and contains a complete account of the Ambassador's final interviews with Herr von Jagow, the German Foreign Minister; with Herr von Zimmermann, the Under-Secretary of State; and with Herr von Bethmann-Hollweg, the Imperial Chancellor. It was in the course of the interview with the latter that the Chancellor referred to the Treaty guaranteeing the neutrality of Belgium, in a phrase which had become notorious, as a "scrap of paper." The document giving Sir E. Goschen's dispatch is as follows: In accordance with the instructions contained in your telegram of the 4th inst.,[1] I called upon the Secretary of State that afternoon and inquired, in the name of his Majesty's Government, whether the Imperial Government would refrain from violating Belgian neutrality. Herr von Jagow at once replied that he was sorry to say that his answer must be "No," as, in consequence of the German troops having crossed the frontier that morning, Belgian neutrality had been already violated. Herr von Jagow again went into the reasons why the Imperial Government had been obliged to take this step, namely, that they had to advance into France by the quickest and easiest way, so as to be able to get well ahead with their operations and endeavour to strike some decisive blow as early as possible.