"We then passed on to the question of the German fleet, as to which he
asked me to make any observations. I said I must. He and I had been
talking with the most absolute candor and friendliness to each other,
and I felt he would regard me as wanting in character were I not very
frank with him about the new navy law. What was the use of entering
into a solemn agreement for concord and against attack if Germany at
the same moment was going to increase her battle fleet as a precaution
against us, and we had consequently to increase our battle fleet as a
precaution against her? This was vital from our point of view, because
we were an island power dependent for our food supplies on the power of
protecting our commerce, and for this we needed the two-power standard
and a substantial preponderance in battle fleets. He said that it
was absolutely essential to Germany to have a third squadron in full
readiness for war. At present, owing to her system of recruiting, for
three months in the year she had virtually, owing to the necessity for
training recruits, no fleet ready at all. I said I did not contest
this; she was quite entitled to have it if she thought it necessary,
but the result would be that we should not be able to rely on the two
battle squadrons and reserve squadrons which had sufficed hitherto,
but that we should be compelled to have five, or even six, squadrons
ready in home waters, perhaps bringing ships from the Mediterranean to
strengthen them."
"He asked me was that necessary if we had a friendly agreement? I
said it would be a less convincing proof of friendliness if Germany
prepared her third squadron, and we should have no option. Still, I
said, this was not so serious as the proposal to add a third ship every
second year to the German construction program. This would put us in
great difficulties so far as securing the good opinion of the public
in England about the value of an agreement. We should certainly have
to proceed at once to lay down two keels to each one of the new German
additions, and that would cost money and cause feeling. It was true
that each country could bear the additional cost without difficulty.
They were rich and so were we. If it was for the purpose of the navy
our people would not complain, in my opinion, of the addition of
another shilling to the income tax, but it would be a great pity. He
asked was that really likely to be our program, the laying down of two
additional keels for each German one. I said that I had no doubt that
it would be the result, and the Government would be turned out if they
failed to accomplish it; and therefore some modification seemed to be
of the utmost importance, if the agreement was to be a real success."
"After a pause he said he would consider this and 'die Sache
überlegen.' The conversation up to this point had been largely in
German, I taking to English whenever there was a delicate topic, and
the Chancellor occasionally speaking English, but nearly always German.
In order to avoid misunderstanding repeated sentences in the other
language. I was impressed by his evident desire to meet us wherever he
could, and I derived considerable hope from the manner and emphasis
with which he said that he would reconsider the question of the ships.
But I must add that he went on to say that the question of the new
squadron was vital, and that some new ships would be necessary in
it. Could I suggest any way out, for they must keep to the plan of
a new law. I observed that it was not for me to venture to make any
suggestion to his Excellency, but that a spreading out in size of the
new program might make a difference. He said, 'Perhaps, eight or nine
years'; I added, 'or twelve, if he could not do better.' He again said
that he would take this matter into serious consideration and consult
his experts. 'My Admirals,' he said, 'are very difficult.' 'That was an
experience,' I observed, 'which we sometimes found in England also.'"