Mut verloren — alles verloren!Da wär es besser, nicht geboren!
To lose courage is to lose everything, in which case it would have been better never to have been born.
A few stabs at rhyme-preserving translation:
Of courage shorn, of everything shorn!In that case better, never to have been born!
Courage lost — everything lost!Then having been born's too high a cost!
Loss of courage, something fatal!Better then, never natal!
Loss of heart — loss of all!'Twould then have been better, not to be at all!