MILESTONES TO ARMAGEDDON
1905–1910
‘Enmities which are unspoken and hidden are more to be feared than
those which are outspoken and open.’
CICERO.
A Narrower Stage—The Victorian Calm—The Chain of Strife—Lord Salisbury
Retires—Mr. Balfour and the End of an Epoch—Fall of the
Conservative Government—The General Election of 1906—The Algeciras
Conference—Anglo-French Military Conversations—Mr. Asquith’s
Administration—The Austrian Annexations—The German Threat to
Russia—The Admiralty Programme of 1909—The Growth of the German
Navy—German Finance and its Implications—The Inheritance of the
New German Chancellor.
If the reader is to understand this tale and the point of view from
which it is told, he should follow the authors mind in each principal
sphere of causation. He must not only be acquainted with the military
and naval situations as they existed at the outbreak of war, but with
the events which led up to them. He must be introduced to the Admirals
and to the Generals; he must study the organisation of the Fleets and
Armies and the outlines of their strategy by sea and land; he must not
shrink even from the design of ships and cannon; he must extend his view
to the groupings and slow-growing antagonisms of modern States; he must
contract it to the humbler but unavoidable warfare of parties and the
interplay of political forces and personalities.
The _dramatis personæ_ of the previous Chapter have been great States
and Empires and its theme their world-wide balance and combinations. Now
the stage must for a while be narrowed to the limits of these islands
and occupied by the political personages and factions of the time and of
the hour.
In the year 1895 I had the privilege, as a young officer, of being
invited to lunch with Sir William Harcourt. In the course of a
conversation in which I took, I fear, none too modest a share, I asked
the question, “What will happen then?” “My dear Winston,” replied the
old Victorian statesman, “the experiences of a long life have convinced
me that nothing ever happens.” Since that moment, as it seems to me,
nothing has ever ceased happening. The growth of the great antagonisms
abroad was accompanied by the progressive aggravation of party strife at
home. The scale on which events have shaped themselves, has dwarfed the
episodes of the Victorian era. Its small wars between great nations, its
earnest disputes about superficial issues, the high, keen
intellectualism of its personages, the sober, frugal, narrow limitations
of their action, belong to a vanished period. The smooth river with its
eddies and ripples along which we then sailed, seems inconceivably
remote from the cataract down which we have been hurled and the rapids
in whose turbulence we are now struggling.
I date the beginning of these violent times in our country from the
Jameson Raid, in 1896. This was the herald, if not indeed the
progenitor, of the South African War. From the South African War was
born the Khaki Election, the Protectionist Movement, the Chinese Labour
cry and the consequent furious reaction and Liberal triumph of 1906.
From this sprang the violent inroads of the House of Lords upon popular
Government, which by the end of 1908 had reduced the immense Liberal
majority to virtual impotence, from which condition they were rescued by
the Lloyd George Budget in 1909. This measure became, in its turn, on
both sides, the cause of still greater provocations, and its rejection
by the Lords was a constitutional outrage and political blunder almost
beyond compare. It led directly to the two General Elections of 1910, to
the Parliament Act, and to the Irish struggle, in which our country was
brought to the very threshold of civil war. Thus we see a succession of
partisan actions continuing without intermission for nearly twenty
years, each injury repeated with interest, each oscillation more
violent, each risk more grave, until at last it seemed that the sabre
itself must be invoked to cool the blood and the passions that were
rife.
* * * * *
In July, 1902, Lord Salisbury retired. With what seems now to have been
only a brief interlude, he had been Prime Minister and Foreign Secretary
since 1885. In those seventeen years the Liberal Party had never
exercised any effective control upon affairs. Their brief spell in
office had only been obtained by a majority of forty Irish Nationalist
votes. During thirteen years the Conservatives had enjoyed homogeneous
majorities of 100 to 150, and in addition there was the House of Lords.
This long reign of power had now come to an end. The desire for change,
the feeling that change was impending, was widespread. It was the end of
an epoch.
Lord Salisbury was followed by Mr. Balfour. The new Prime Minister never
had a fair chance. He succeeded only to an exhausted inheritance.
Indeed, his wisest course would have been to get out of office as
decently, as quietly, and, above all, as quickly as possible. He could
with great propriety have declared that the 1900 Parliament had been
elected on war conditions and on a war issue; that the war was now
finished successfully; that the mandate was exhausted and that he must
recur to the sense of the electors before proceeding farther with his
task. No doubt the Liberals would have come into power, but not by a
large majority; and they would have been faced by a strong, united
Conservative Opposition, which in four or five years, about 1907, would
have resumed effective control of the State. The solid ranks of
Conservative members who acclaimed Mr. Balfour’s accession as First
Minister were however in no mood to be dismissed to their constituencies
when the Parliament was only two years old and had still four or five
years more to run. Mr. Balfour therefore addressed himself to the duties
of Government with a serene indifference to the vast alienation of
public opinion and consolidation of hostile forces which were proceeding
all around him.
Mr. Chamberlain, his almost all-powerful lieutenant, was under no
illusions. He felt, with an acute political sensitiveness, the
ever-growing strength of the tide setting against the ruling
combination. But instead of pursuing courses of moderation and prudence,
he was impelled by the ardour of his nature to a desperate remedy. The
Government was reproached with being reactionary. The moderate
Conservatives and the younger Conservatives were all urging Liberal and
conciliatory processes. The Opposition was advancing hopefully towards
power, heralded by a storm of angry outcry. He would show them, and show
doubting or weary friends as well, how it was possible to quell
indignation by violence, and from the very heart of reaction to draw the
means of popular victory. He unfurled the flag of Protection.
Time, adversity and the recent Education Act had united the Liberals;
Protection, or Tariff Reform as it was called, split the Conservatives.
Ultimately, six Ministers resigned and fifty Conservative or Unionist
members definitely withdrew their support from the Government. Among
them were a number of those younger men from whom a Party should derive
new force and driving power, and who are specially necessary to it
during a period of opposition. The action of the Free Trade Unionists
was endorsed indirectly by Lord Salisbury himself from his retirement,
and was actively sustained by such pillars of the Unionist Party as Sir
Michael Hicks-Beach and the Duke of Devonshire. No such formidable loss
had been sustained by the Conservative Party since the expulsion of the
Peelites.
But if Mr. Balfour had not felt inclined to begin his reign by an act of
abdication, he was still less disposed to have power wrested from his
grasp. Moreover, he regarded a Party split as the worst of domestic
catastrophes, and responsibility for it as the unforgivable sin. He
therefore laboured with amazing patience and coolness to preserve a
semblance of unity, to calm the tempest, and to hold on as long as
possible in the hope of its subsiding. With the highest subtlety and
ingenuity he devised a succession of formulas designed to enable people
who differed profoundly, to persuade themselves they were in agreement.
When it came to the resignation of Ministers, he was careful to shed
Free Trade and Protectionist blood as far as possible in equal
quantities. Like Henry VIII, he decapitated Papists and burned hot
Gospellers on the same day for their respective divergencies in opposite
directions from his central, personal and artificial compromise.
In this unpleasant situation Mr. Balfour maintained himself for two
whole years. Vain the clamour for a general election, vain the taunts of
clinging to office, vain the solicitations of friends and the attempts
of foes to force a crucial issue. The Prime Minister remained immovable,
inexhaustible, imperturbable; and he remained Prime Minister. His clear,
just mind, detached from small things, stood indifferent to the clamour
about him. He pursued, as has been related, through the critical period
of the Russo-Japanese War, a policy in support of Japan of the utmost
firmness. He resisted all temptations, on the other hand, to make the
sinking of our trawlers on the Dogger Bank by the Russian Fleet an
occasion of war with Russia. He formed the Committee of Imperial
Defence—the instrument of our preparedness. He carried through the
agreement with France of 1904, the momentous significance of which the
last chapter has explained. But in 1905 political Britain cared for none
of these things. The credit of the Government fell steadily. The process
of degeneration in the Conservative Party was continuous. The storm of
opposition grew unceasingly, and so did the unification of all the
forces opposed to the dying regime.
Late in November, 1905, Mr. Balfour tendered his resignation as Prime
Minister to the King. The Government of Sir Henry Campbell-Bannerman was
formed, and proceeded in January to appeal to the constituencies. This
Government represented both the wings into which the Liberal Party had
been divided by the Boer War. The Liberal Imperialists, so distinguished
by their talents, filled some of the greatest offices. Mr. Asquith went
to the Exchequer; Sir Edward Grey to the Foreign Office; Mr. Haldane
became Secretary of State for War. On the other hand the Prime Minister,
who himself represented the main stream of Liberal opinion, appointed
Sir Robert Reid, Lord Chancellor and Mr. John Morley, Secretary of State
for India. Both these statesmen, while not opposing actual war measures
in South Africa, had unceasingly condemned the war; and in Mr. Lloyd
George and Mr. John Burns, both of whom entered the Cabinet, were found
democratic politicians who had gone even farther. The dignity of the
Administration was enhanced by the venerable figures of Lord Ripon, Sir
Henry Fowler, and the newly returned Viceroy of India, Lord Elgin.
The result of the polls in January, 1906, was a Liberal landslide.
Never since the election following the great Reform Bill, had anything
comparable occurred in British parliamentary history. In Manchester, for
instance, which was one of the principal battle-grounds, Mr. Balfour and
eight Conservative colleagues were dismissed and replaced by nine
Liberals or Labour men. The Conservatives, after nearly twenty years of
power, crept back to the House of Commons barely a hundred and fifty
strong. The Liberals had gained a majority of more than one hundred over
all other parties combined. Both great parties harboured deep grievances
against the other; and against the wrong of the Khaki Election and its
misuse, was set the counter-claim of an unfair Chinese Labour cry.
* * * * *
Sir Henry Campbell-Bannerman was still receiving the resounding
acclamations of Liberals, peace-lovers, anti-jingoes, and
anti-militarists, in every part of the country, when he was summoned by
Sir Edward Grey to attend to business of a very different character. The
Algeciras Conference was in its throes. When the Anglo-French Agreement
on Egypt and Morocco had first been made known, the German Government
accepted the situation without protest or complaint. The German
Chancellor, Prince Bülow, had even declared in 1904 that there was
nothing in the Agreement to which Germany could take exception. “What
appears to be before us is the attempt by the method of friendly
understanding to eliminate a number of points of difference which exist
between England and France. We have no objection to make against this
from the standpoint of German interest.” A serious agitation most
embarrassing to the German Government was, however, set on foot by the
Pan-German and Colonial parties. Under this pressure the attitude of the
Government changed, and a year later Germany openly challenged the
Agreement and looked about for an opportunity to assert her claims in
Morocco. This opportunity was not long delayed.
Early in 1905 a French mission arrived in Fez. Their language and
actions seemed to show an intention of treating Morocco as a French
Protectorate, thereby ignoring the international obligations of the
Treaty of Madrid. The Sultan of Morocco appealed to Germany, asking if
France was authorised to speak in the name of Europe. Germany was now
enabled to advance as the champion of an international agreement, which
she suggested France was violating. Behind this lay the clear intention
to show France that she could not afford in consequence of her agreement
with Britain, to offend Germany. The action taken was of the most
drastic character. The German Emperor was persuaded to go to Tangiers,
and there, against his better judgment, on March 31, 1905, he delivered,
in very uncompromising language chosen by his ministers, an open
challenge to France. To this speech the widest circulation was given by
the German Foreign Office. Hot-foot upon it (April 11 and 12) two very
threatening despatches were sent to Paris and London, demanding a
conference of all the Signatory Powers to the Treaty of Madrid. Every
means was used by Germany to make France understand that if she refused
the conference there would be war; and to make assurance doubly sure a
special envoy[1] was sent from Berlin to Paris for that express purpose.
France was quite unprepared for war; the army was in a bad state; Russia
was incapacitated; moreover, France had not a good case. The French
Foreign Minister, Monsieur Delcassé, was, however, unwilling to give
way. The German attitude became still more threatening; and on June 6
the French Cabinet of Monsieur Rouvier unanimously, almost at the
cannon’s mouth, accepted the principle of a conference, and Monsieur
Delcassé at once resigned.
So far Germany had been very successful. Under a direct threat of war
she had compelled France to bow to her will, and to sacrifice the
Minister who had negotiated the Agreement with Great Britain. The
Rouvier Cabinet sought earnestly for some friendly solution which, while
sparing France the humiliation of a conference dictated in such
circumstances, would secure substantial concessions to Germany. The
German Government were, however, determined to exploit their victory to
the full, and not to make the situation easier for France either before
or during the conference. The conference accordingly assembled at
Algeciras in January, 1906.
Great Britain now appeared on the scene, apparently quite unchanged and
unperturbed by her domestic convulsions. She had in no way encouraged
France to refuse the conference. But if a war was to be fastened on
France by Germany as the direct result of an agreement made recently in
the full light of day between France and Great Britain, it was held that
Great Britain could not remain indifferent. Sir Henry Campbell-Bannerman
therefore authorised Sir Edward Grey to support France strongly at
Algeciras. He also authorised, almost as the first act of what was to be
an era of Peace, Retrenchment, and Reform, the beginning of military
conversations between the British and French General Staffs with a view
to concerted action in the event of war. This was a step of profound
significance and of far-reaching reactions. Henceforward the relations
of the two Staffs became increasingly intimate and confidential. The
minds of our military men were definitely turned into a particular
channel. Mutual trust grew continually in one set of military
relationships, mutual precautions in the other. However explicitly the
two Governments might agree and affirm to each other that no national or
political engagement was involved in these technical discussions, the
fact remained that they constituted an exceedingly potent tie.
The attitude of Great Britain at Algeciras turned the scale against
Germany. Russia, Spain and other signatory Powers associated themselves
with France and England. Austria revealed to Germany the limits beyond
which she would not go. Thus Germany found herself isolated, and what
she had gained by her threats of war evaporated at the Council Board. In
the end a compromise suggested by Austria, enabled Germany to withdraw
without open loss of dignity. From these events, however, serious
consequences flowed. Both the two systems into which Europe was divided,
were crystallised and consolidated. Germany felt the need of binding
Austria more closely to her. Her open attempt to terrorise France had
produced a deep impression upon French public opinion. An immediate and
thorough reform of the French Army was carried out, and the _Entente_
with England was strengthened and confirmed. Algeciras was a milestone
on the road to Armageddon.
* * * * *
The illness and death of Sir Henry Campbell-Bannerman at the beginning
of 1908 opened the way for Mr. Asquith. The Chancellor of the Exchequer
had been the First Lieutenant of the late Prime Minister, and, as his
chief’s strength failed, had more and more assumed the burden. He had
charged himself with the conduct of the new Licensing Bill which was to
be the staple of the Session of 1908, and in virtue of this task he
could command the allegiance of an extreme and doctrinaire section of
his Party from whom his Imperialism had previously alienated him. He
resolved to ally to himself the democratic gifts and rising reputation
of Mr. Lloyd George. Thus the succession passed smoothly from hand to
hand. Mr. Asquith became Prime Minister; Mr. Lloyd George became
Chancellor of the Exchequer and the second man in the Government. The
new Cabinet, like the old, was a veiled coalition. A very distinct line
of cleavage was maintained between the Radical-Pacifist elements who had
followed Sir Henry Campbell-Bannerman and constituted the bulk both of
the Cabinet and the Party on the one hand, and the Liberal Imperialist
wing on the other. Mr. Asquith, as Prime Minister, had now to take an
impartial position; but his heart and sympathies were always with Sir
Edward Grey, the War Office and the Admiralty, and on every important
occasion when he was forced to reveal himself, he definitely sided with
them. He was not, however, able to give Sir Edward Grey the same
effectual countenance, much as he might wish to do so, that Sir Henry
Campbell-Bannerman had done. The old chief’s word was law to the
extremists of his Party. They would accept almost anything from him.
They were quite sure he would do nothing more in matters of foreign
policy and defence than was absolutely necessary, and that he would do
it in the manner least calculated to give satisfaction to jingo
sentiments. Mr. Asquith, however, had been far from “sound” about the
Boer War, and was the lifelong friend of the Foreign Secretary, who had
wandered even further from the straight path into patriotic pastures. He
was therefore in a certain sense suspect, and every step he took in
external affairs was watched with prim vigilance by the Elders. If the
military conversations with France had not been authorised by Sir Henry
Campbell-Bannerman, and if his political virtue could not be cited in
their justification, I doubt whether they could have been begun or
continued by Mr. Asquith.
Since I had crossed the Floor of the House in 1904 on the Free Trade
issue, I had worked in close political association with Mr. Lloyd
George. He was the first to welcome me. We sat and acted together in the
period of opposition preceding Mr. Balfour’s fall, and we had been in
close accord during Sir Henry Campbell-Bannerman’s administration, in
which I had served as Under-Secretary of State for the Colonies. This
association continued when I entered the new Cabinet as President of the
Board of Trade, and in general, though from different angles, we leaned
to the side of those who would restrain the froward both in foreign
policy and in armaments. It must be understood that these differences of
attitude and complexion, which in varying forms reproduce themselves in
every great and powerful British Administration, in no way prevented
harmonious and agreeable relations between the principal personages, and
our affairs proceeded amid many amenities in an atmosphere of courtesy,
friendliness and goodwill.
* * * * *
It was not long before the next European crisis arrived. On October 5,
1908, Austria, without warning or parley, proclaimed the annexation of
Bosnia and Herzegovina. These provinces of the Turkish Empire had been
administered by her under the Treaty of Berlin, 1878; and the annexation
only declared in form what already existed in fact. The Young Turk
Revolution which had occurred in the summer, seemed to Austria likely to
lead to a reassertion of Turkish sovereignty over Bosnia and
Herzegovina, and this she was concerned to forestall. A reasonable and
patient diplomacy would probably have secured for Austria the easements
which she needed. Indeed, negotiations with Russia, the Great Power most
interested, had made favourable progress. But suddenly and abruptly
Count Aerenthal, the Austrian Foreign Minister, interrupted the
discussions by the announcement of the annexation, before the
arrangements for a suitable concession to Russia had been concluded. By
this essentially violent act a public affront was put upon Russia, and a
personal slight upon the Russian negotiator, Monsieur Isvolsky.
A storm of anger and protest arose on all sides. England, basing herself
on the words of the London Conference in 1871, “That it is an essential
principle of the law of nations that no Power can free itself from the
engagements of a Treaty, nor modify its stipulations except by consent
of the contracting parties,” refused to recognise either the annexation
of Bosnia and Herzegovina or the declaration of Bulgarian independence
which had synchronised with it. Turkey protested loudly against a
lawless act. An effective boycott of Austrian merchandise was organised
by the Turkish Government. The Serbians mobilised their army. But it was
the effect on Russia which was most serious. The bitter animosity
excited against Austria throughout Russia became a penultimate cause of
the Great War. In this national quarrel the personal differences of
Aerenthal and Isvolsky played also their part.
Great Britain and Russia now demanded a conference, declining meanwhile
to countenance what had been done. Austria, supported by Germany,
refused. The danger of some violent action on the part of Serbia became
acute. Sir Edward Grey, after making it clear that Great Britain would
not be drawn into a war on a Balkan quarrel, laboured to restrain
Serbia, to pacify Turkey, and to give full diplomatic support to Russia.
The controversy dragged on till April, 1909, when it was ended in the
following remarkable manner. The Austrians had determined, unless Serbia
recognised the annexation of Bosnia and Herzegovina, to send an
ultimatum and to declare war upon her. At this point the German
Chancellor, Prince von Bülow, intervened. Russia, he insisted, should
herself advise Serbia to give way. The Powers should officially
recognise the annexation without a conference being summoned and without
any kind of compensation to Serbia. Russia was to give her consent to
this action, without previously informing the British or French
Governments. If Russia did not consent, Austria would declare war on
Serbia _with the full and complete support of Germany_. Russia, thus
nakedly confronted by war both with Austria and Germany, collapsed under
the threat, as France had done three years before. England was left an
isolated defender of the sanctity of Treaties and the law of nations.
The Teutonic triumph was complete. But it was a victory gained at a
perilous cost. France, after her treatment in 1905, had begun a thorough
military reorganisation. Now Russia, in 1910, made an enormous increase
in her already vast army; and both Russia and France, smarting under
similar experiences, closed their ranks, cemented their alliance, and
set to work to construct with Russian labour and French money the new
strategic railway systems of which Russia’s western frontier stood in
need.
* * * * *
It was next the turn of Great Britain to feel the pressure of the German
power.
In the spring of 1909, the First Lord of the Admiralty, Mr. McKenna,
suddenly demanded the construction of no less than six Dreadnought
battleships. He based this claim on the rapid growth of the German Fleet
and its expansion and acceleration under the new naval law of 1908,
which was causing the Admiralty the greatest anxiety. I was still a
sceptic about the danger of the European situation, and not convinced by
the Admiralty case. In conjunction with the Chancellor of the Exchequer,
I proceeded at once to canvas this scheme and to examine the reasons by
which it was supported. The conclusions which we both reached were that
a programme of four ships would sufficiently meet our needs. In this
process I was led to analyse minutely the character and composition of
the British and German Navies, actual and prospective. I could not agree
with the Admiralty contention that a dangerous situation would be
reached in the year 1912. I found the Admiralty figures on this subject
were exaggerated. I did not believe that the Germans were building
Dreadnoughts secretly in excess of their published Fleet Laws. I held
that our margin in pre-Dreadnought ships would, added to a new programme
of four Dreadnoughts, assure us an adequate superiority in 1912, “the
danger year” as it was then called. In any case, as the Admiralty only
claimed to lay down the fifth and sixth ships in the last month of the
financial year, i. e., March, 1910, these could not affect the
calculations. The Chancellor of the Exchequer and I therefore proposed
that four ships should be sanctioned for 1909, and that the additional
two should be considered in relation to the programme of 1910.
Looking back on the voluminous papers of this controversy in the light
of what actually happened, there can be no doubt whatever that, so far
as facts and figures were concerned, we were strictly right. The gloomy
Admiralty anticipations were in no respect fulfilled in the year 1912.
The British margin was found to be ample in that year. There were no
secret German Dreadnoughts, nor had Admiral von Tirpitz made any untrue
statement in respect of major construction.
The dispute in the Cabinet gave rise to a fierce agitation outside. The
process of the controversy led to a sharp rise of temperature. The
actual points in dispute never came to an issue. Genuine alarm was
excited throughout the country by what was for the first time widely
recognised as a German menace. In the end a curious and characteristic
solution was reached. The Admiralty had demanded six ships: the
economists offered four: and we finally compromised on eight. However,
five out of the eight were not ready before “the danger year” of 1912
had passed peacefully away.
But although the Chancellor of the Exchequer and I were right in the
narrow sense, we were absolutely wrong in relation to the deep tides of
destiny. The greatest credit is due to the First Lord of the Admiralty,
Mr. McKenna, for the resolute and courageous manner in which he fought
his case and withstood his Party on this occasion. Little did I think,
as this dispute proceeded, that when the next Cabinet crisis about the
Navy arose our rôles would be reversed; and little did he think that the
ships for which he contended so stoutly would eventually, when they
arrived, be welcomed with open arms by me.
Whatever differences might be entertained about the exact number of
ships required in a particular year, the British nation in general
became conscious of the undoubted fact that Germany proposed to
reinforce her unequalled army by a navy which in 1920 would be far
stronger than anything up to the present possessed by Great Britain. To
the Navy Law of 1900 had succeeded the amending measure of 1906; and
upon the increases of 1906 had followed those of 1908. In a flamboyant
speech at Reval in 1904 the German Emperor had already styled himself,
“The Admiral of the Atlantic.” All sorts of sober-minded people in
England began to be profoundly disquieted. What did Germany want this
great navy for? Against whom, except us, could she measure it, match it,
or use it? There was a deep and growing feeling, no longer confined to
political and diplomatic circles, that the Prussians meant mischief,
that they envied the splendour of the British Empire, and that if they
saw a good chance at our expense, they would take full advantage of it.
Moreover it began to be realised that it was no use trying to turn
Germany from her course by abstaining from counter measures. Reluctance
on our part to build ships was attributed in Germany to want of national
spirit, and as another proof that the virile race should advance to
replace the effete overcivilised and pacifist society which was no
longer capable of sustaining its great place in the world’s affairs. No
one could run his eyes down the series of figures of British and German
construction for the first three years of the Liberal Administration,
without feeling in presence of a dangerous, if not a malignant, design.
In 1905 Britain built 4 ships, and Germany 2.
In 1906 Britain _decreased_ her programme to 3 ships, and Germany
_increased_ her programme to 3 ships.
In 1907 Britain _further decreased_ her programme to 2 ships, and
Germany _further increased_ her programme to 4 ships.
These figures are monumental.
It was impossible to resist the conclusion, gradually forced on nearly
every one, that if the British Navy lagged behind, the gap would be very
speedily filled.
* * * * *
As President of the Board of Trade I was able to obtain a general view
of the structure of German finance. In 1909 a most careful report was
prepared by my direction on the whole of this subject. Its study was not
reassuring. I circulated it to the Cabinet with the following covering
minute:—
_November 3, 1909._
Believing that there are practically no checks upon German naval
expansion except those imposed by the increasing difficulties of
getting money, I have had the enclosed report prepared with a view to
showing how far those limitations are becoming effective. It is clear
that they are becoming terribly effective. The overflowing expenditure
of the German Empire strains and threatens every dyke by which the
social and political unity of Germany is maintained. The high customs
duties have been largely rendered inelastic through commercial
treaties, and cannot meet the demand. The heavy duties upon
food-stuffs, from which the main proportion of the customs revenue is
raised, have produced a deep cleavage between the agrarians and the
industrials, and the latter deem themselves quite uncompensated for
the high price of food-stuffs by the most elaborate devices of
protection for manufactures. The splendid possession of the State
railways is under pressure being continually degraded to a mere
instrument of taxation. The field of direct taxation is already
largely occupied by State and local systems. The prospective inroad by
the universal suffrage Parliament of the Empire upon this depleted
field unites the propertied classes, whether Imperialists or
State-right men, in a common apprehension, with which the governing
authorities are not unsympathetic. On the other hand, the new or
increased taxation on every form of popular indulgence powerfully
strengthens the parties of the Left, who are themselves the opponents
of expenditure on armaments and much else besides.
Meanwhile the German Imperial debt has more than doubled in the last
thirteen years of unbroken peace, has risen since the foundation of
the Empire to about £220,000,000, has increased in the last ten years
by £105,000,000, and practically no attempt to reduce it has been made
between 1880 and the present year. The effect of recurrent borrowings
to meet ordinary annual expenditure has checked the beneficial process
of foreign investment, and dissipated the illusion, cherished during
the South African War, that Berlin might supplant London as the
lending centre of the world. The credit of the German Empire has
fallen to the level of that of Italy. It is unlikely that the new
taxes which have been imposed with so much difficulty this year will
meet the annual deficit.
These circumstances force the conclusion that a period of severe
internal strain approaches in Germany. Will the tension be relieved by
moderation or snapped by calculated violence? Will the policy of the
German Government be to soothe the internal situation, or to find an
escape from it in external adventure? There can be no doubt that both
courses are open. Low as the credit of Germany has fallen, her
borrowing powers are practically unlimited. But one of the two courses
must be taken soon, and from that point of view it is of the greatest
importance to gauge the spirit of the new administration from the
outset. If it be pacific, it must soon become markedly pacific, and
conversely.
W. S. C.
This is, I think, the first sinister impression that I was ever led to
record.
* * * * *
We have now seen how within the space of five years Germany’s policy and
the growth of her armaments led her to arouse and alarm most profoundly
three of the greatest Powers in the world. Two of them, France and
Russia, had been forced to bow to the German will by the plain threat of
war. Each had been quelled by the open intention of a neighbour to use
force against them to the utmost limit without compunction. Both felt
they had escaped a bloody ordeal and probable disaster only by
submission. The sense of past humiliation was aggravated by the fear of
future affronts. The third Power—unorganised for war, but inaccessible
and not to be neglected in the world’s affairs—Britain, had also been
made to feel that hands were being laid upon the very foundation of her
existence. Swiftly, surely, methodically, a German Navy was coming into
being at our doors which must expose us to dangers only to be warded off
by strenuous exertions, and by a vigilance almost as tense as that of
actual war. As France and Russia increased their armies, so Britain
under the same pressure increased her fleet. Henceforward the three
disquieted nations will act more closely together and will not be taken
by their adversary one by one. Henceforward their military arrangements
will be gradually concerted. Henceforward they will consciously be
facing a common danger.
Ah! foolish-diligent Germans, working so hard, thinking so deeply,
marching and counter-marching on the parade grounds of the Fatherland,
poring over long calculations, fuming in new found prosperity,
discontented amid the splendour of mundane success, how many bulwarks to
your peace and glory did you not, with your own hands, successively tear
down!
“In the year 1909,” writes von Bethmann-Hollweg, then the successor of
Prince von Bülow, “the situation was based on the fact that England had
firmly taken its stand on the side of France and Russia in pursuit of
its traditional policy of opposing whatever Continental Power for the
time being was the strongest; and that Germany held fast to its naval
programme, had given a definite direction to its Eastern policy, and had
moreover to guard against a French antagonism that had in no wise been
mitigated by its policy in later years. And if Germany saw a formidable
aggravation of all the aggressive tendencies of Franco-Russian policy in
England’s pronounced friendship with this Dual Alliance, England on its
side had grown to see a menace in the strengthening of the German Fleet
and a violation of its ancient rights in our Eastern policy. Words had
already passed on both sides. The atmosphere was chilly and clouded with
distrust.” Such, in his own words, was the inheritance of the new German
Chancellor.
He was now to make his own contribution to the anxieties of the world.