POLITICS
Notwithstanding the many business controversies in which Ballin took an
important part, it has occasionally been said that he was not really a
"fighter." This statement may be allowed to pass quite unchallenged,
provided that by the term "fighter" we mean a man whose habit it is to
fight to the bitter end. Ballin never indulged in fighting for its own
sake, nor was it ever his object to see his vanquished opponent lie
prostrate before him. Such a mental attitude he, in his own drastic way,
would have described as a "perverted pleasure." Always and everywhere it
was his aim to secure to himself and to those he represented the maximum
benefit obtainable consistent with the realities of the situation, so
that he has been justly described as "a man of compromise."
This feature of his personality, indeed, forms the key-note both to his
policy and to the principles on which it was based. Perhaps in other
spheres of economic activity it is possible for a struggle between two
competing rivals to end in the complete victory of one of them; in the
shipping business such an outcome is the exception but not the rule.
There a really _weak_ opponent is never met with, unless one's rival
happens to be exceptionally inexperienced or constitutionally unsound.
The minor competitor, where shipping is concerned, is by no means always
the less powerful of the two. On the contrary, the contest which
inflicts small losses on him inflicts heavy losses on his big opponent,
and may easily exhaust the latter first. The last few decades have
witnessed the establishment of many new shipping firms under the
auspices of national sentiment. Governments and whole peoples have
backed them, and in such cases private undertakings have found it
difficult to compete.
During his early training Ballin had so thoroughly convinced himself of
the necessity for co-operation and compromise in matters economic that
this conviction became the corner-stone of his policy. He also made it
his principle never to tie an unwilling partner to an agreement which
the latter considered to be detrimental to his vital interests, and he
would only approve of an agreement if both parties to it felt satisfied
that they had done a good stroke of business by concluding it. The
numerous "community of interest" agreements to which he signed his name
established, the longer they lasted and the further they were extended,
an increasingly intimate contact between the shipping firms all over the
world, thus proving that the consistent application of his principles
was justified by its success.
In politics, too, he regarded this line of action as the only correct
one. Over and over again he described the World War as a "stupid war" or
as the "most stupid of all wars," because its origin, the conflict
between Austria-Hungary and Serbia, was so utterly meaningless to the
progress of the world. Its actual outbreak was caused by the strained
economic relations between Hungary and Serbia, or--to put it quite
plainly--by the boycott of the Serbian pig, a matter which was surely of
no importance to the world's trade and traffic at large. "No Bismarck
was needed to prevent _this_ war," he often said when speaking of its
immediate origin.
This attitude of his does not mean that he shut his eyes to the
deep-seated antagonisms which were at the back of these local squabbles,
viz., the Franco-Russian coalition against Germany, and the
Anglo-German rivalry. The latter he regarded as sufficient to turn the
scale; if it could be adjusted a World War, he felt sure, would be
avoided. The possibility of a universal conflagration had been pointed
out to him by no less an authority than Prince Bismarck on the occasion
of the latter's visit to Hamburg, when he was shown over the express
steamer of the Packetfahrt that was to bear his name. "I shall not live
to see the World War," Bismarck told him; "but you will, and it will
start in the Near East."
With ever-increasing anxiety, Ballin noticed how, as a result of the
German naval armaments, the Anglo-German antagonism came into existence,
and how in time the position became worse and worse. When the
Government, about the year 1900, embarked upon its propaganda for the
creation of a big navy, he lent it his active assistance, but in later
years he strongly opposed the naval race with Great Britain, trying to
the best of his ability to circumvent its disastrous consequences.
The British argument against Germany's naval programme was that a nation
which owned one-third of the inhabited globe and intended to maintain
its supremacy could not renounce its naval predominance. His knowledge
of British mentality--gained, as it was, through many years of
intercourse with the English--told him that this reasoning was certainly
unassailable from the British point of view, and that England would
fight for its recognition to the bitter end. Therefore, he considered
the situation could only be met by an Anglo-German understanding. The
failure of arriving at such a solution was probably caused--apart from
personal motives--by the fact that in Germany the spirit of compromise
was not the predominant one, but that its place was taken by an
exaggerated opinion of the country's own strength combined with a
certain ignorance regarding foreign countries.
This mental attitude is typical of the two factions which were
all-powerful in Germany at the time, viz., what might be called the Old
Prussian aristocracy, and the representatives of the heavy industries.
The common platform on which these two groups met was the policy to be
pursued regarding customs tariffs, which, although it formed the basis
of the economic greatness of Germany, also prepared the way for serious
international conflicts. During the war these two groups were in charge
of what was meant to be the political policy of the country, but which
was, in fact, nothing but an inferior substitute for it.
Ballin's international position is illustrated by the fact that he was
the first to be approached in the matter of a projected Anglo-German
rapprochement, an affair which reached its climax with Lord Haldane's
visit to Berlin. Owing to its historical interest this episode is worth
a detailed account.
The first steps in this direction date back as far as the year 1908, and
the ultimate breakdown of the project did not take place until the
outbreak of the war. The British negotiator was Sir Ernest Cassel, who,
a native of Germany, had settled in England when quite young, and who
had become one of the world's most successful financiers. He was the
intimate friend of King Edward from the time when the latter was Prince
of Wales, and he also acted as his banker and as his political adviser.
The King visited his home almost daily during the last few years of his
life to take part in a game of bridge. The motives which may have
prompted Sir Ernest to lend his assistance and his great influence to an
endeavour which aimed at an understanding between his adopted country
and the land of his birth need not, in the case of a man so clever and
so experienced, be very far to seek. Sir Ernest repeatedly referred to
himself as a German, and as such he was deprived of his
privy-councillorship during the war. Thus it is quite likely that he
might have been prompted no less by an inherited predilection for the
one, than by an acquired preference for the other country. This very
fact may also have enabled him to see matters with particular clearness
of vision and without any prejudice. He and his friends reasoned
somewhat along the following lines:
The policy of King Edward having led to a considerable strengthening of
the position of France on the Continent, there arose the danger of an
armed conflict between the continental Powers, especially as many points
of dispute threatened at the same time to disturb the relations between
Germany and Great Britain. These differences were caused on the one hand
by the political activities of Germany as a world power, and on the
other by her commercial and industrial expansion which bid fair to
relegate Great Britain to a subordinate position. People in England
regarded the want of a system of protection similar to the German
protective tariffs as the real cause of this development, a want which
retarded the progress of British industrialism, and which prevented
British financiers from taking an active interest in these matters. The
German financiers, however, exerted all their influence on behalf of the
industrial expansion of their country, thus emancipating it more and
more from foreign capital. The time during which the financing of the
German industries by French money (the so-called French "pensions"),
i.e. the discounting by French capitalists of bills drawn by German
industrialists, played an important part, and even represented a serious
menace in days of political tension, had only just passed, but, thanks
to the increasing capital strength of Germany, its effects had now quite
ceased to make themselves felt.
The advantage to Great Britain of an understanding with Germany was that
it would guarantee her maritime supremacy which she was resolved to
maintain at any price, whilst at the same time reducing the burden of
her naval armaments which, in her case, too, had become wellnigh
insupportable. The Liberal Government then in power was particularly
interested in such financial retrenchment, being quite aware that the
time had arrived for the State to enter upon an era of social
legislation.
Contact between Ballin and the above-mentioned British groups was
established through the agency of some friends of his connected with
German high finance. The fact that the British selected Ballin to start
these negotiations is probably due to his well-known friendship with the
Kaiser, which suggested the possibility of approaching the German
Government--even if only by informal channels in the first instance.
This first attempt, should it prove successful, might at any moment be
followed up by direct negotiations between the two governments. In view
of the traditional close connexion existing in England between business
circles on the one hand, and the politicians, the parties, and the
Government on the other, such proceedings did not by any means imply a
policy of backstairs, but might be relied upon to open up a way for
sounding German official quarters in the most natural manner.
The general tenor of Anglo-German relations at that time was somewhat as
follows.
The visit of King Edward to Wilhelmshöhe and that of the German Emperor
and Empress to Windsor Castle in the summer of 1907 had been of a very
friendly character, and, together with other manifestations of
friendship exchanged between various German and British societies, they
had exercised a favourable impression on public opinion in both
countries. But very soon this friendly feeling was replaced by one of
irritation. Great Britain and Russia had concluded an agreement
concerning their frontiers in the Middle East, and this led to questions
in the Reichstag as to whether German interests had been properly
safeguarded. At the same time (in the summer of 1907) the Hague
Conference came to an end without having led to an understanding
regarding the limitation of armaments, which many people in England
would have liked to be brought about. Towards the end of the year the
German Government submitted to the Reichstag a Navy Bill by which the
life of the capital ships was to be reduced from 25 to 20 years. This
was tantamount to asking for the cost of three new ships of the line.
Simultaneously a powerful propaganda for the navy was started, and when
Prince Rupprecht of Bavaria resigned the protectorate of the Bavarian
section of the Navy League, because the League which at that time was
presided over by the well-known General Keim had engaged in party
politics, his withdrawal had the undesirable effect of focusing public
attention on the League's share in this agitation. This step, as was but
natural, brought about a change in the chairmanship of the League.
In England the agitation against Germany in general, and against her
naval policy in particular, became very violent in the early part of
1908. In February _The Times_ announced that the Kaiser, for the express
purpose of interfering with the British naval budget, had sent a letter
to that effect to Lord Tweedmouth, the First Lord of the Admiralty. His
lordship categorically denied in Parliament that the document had any
political character whatever, but in spite of this denial, and in spite
of the support which he received from Lord Lansdowne and from Lord
Rosebery, the matter produced a violent outburst of feeling on the part
of the British Press and public. During March, 1908, both houses of
Parliament discussed German and British naval policy in great detail. In
an article published by the _National Review_, Lord Esher, the chairman
of the Imperial Maritime League, demanded that for every keel laid down
by Germany, Britain should lay down two, and General Baden-Powell
described the danger of a German invasion as imminent. On the other
hand, Sir Edward Grey, the Foreign Secretary, emphasized in one of his
speeches the point of view referred to above, viz. that a reduction of
the naval burdens would also be desirable in the interest of Britain,
but that he could recommend such a policy only if the other governments
consented to do the same.
All these considerations might easily suggest to the clear-headed men of
business on either side of the North Sea how greatly it would be to the
mutual advantage of both if a way could be found towards a limitation of
naval armaments.
The first interview between Ballin and Sir Ernest Cassel took place in
the summer of 1908, and Ballin afterwards gave the Kaiser a detailed
account of it when the latter visited Hamburg and Kiel at the end of
June. Another report, based on material supplied by Ballin, was composed
by the chief of the Press Department of the Foreign Office, Geheimrat
Hammann, for the use of the Imperial Chancellor and the Foreign
Secretary, and in the absence of any original account by Ballin himself,
it may be permitted to give an outline of its contents below.
Sir Ernest opened the conversation by saying that for a long time back
he had desired to discuss the political situation simply in his capacity
as a private person, and that he felt qualified to do so because of his
intimate acquaintance with some of the leading personages and with
politics in general. He would like to contribute his share towards the
prevention of a dangerous development of the existing rivalry. The King
felt very keenly that the rapid increase of the German naval forces
constituted a menace to Britain's maritime position. He was convinced,
however, that his nephew would never provoke a wanton conflict, and
that, in his heart of hearts, he loathed the horrors of war. Although,
therefore, during his--the King's--lifetime the danger of an
Anglo-German war was remote, it was nevertheless necessary that, when
his son succeeded him, the latter should find Britain's maritime
position so strong that the Kaiser's successor should be unable to
assail it.
When Ballin interposed at this stage that the British navy, because of
its unchallenged superiority in numbers, need not be afraid of the newly
created naval power of Germany, Sir Ernest replied that it was well
known to British naval experts that the increase of the German navy was
considerably greater than the official statements made in the Reichstag
would let it appear. Undoubtedly the British navy would always preserve
its superiority, not only numerically, but also technically with regard
to material, construction, and armaments. Nevertheless, the advantages
possessed by the German system of manning the ships and the great
efficiency of German naval officers justified an apprehension lest the
German superiority in the human factor might outweigh the British
superiority in tonnage. The Boer war had taught England how difficult it
was to conquer a high-spirited, though numerically weak enemy. He said
that fear of the German danger formed the driving power of the whole
policy of the Entente, and that this policy was only meant to guard
against that menace. Therefore Russia had been advised at the Reval
meeting to forgo the enlargement of her navy, and to concentrate all her
energies on her army.
Upon Sir Ernest's intimation that at some date Britain, together with
France and Russia, might inquire of Germany when she intended to put a
stop to her naval armaments, Ballin replied that his friend, if he was
anxious to render a really valuable service to Britain and to the cause
of peace, could do no better than make it perfectly plain that such an
inquiry would mean war. Germany would resist with her whole strength any
such attempt which unmistakably suggested the methods employed at
Fashoda.
During the progress of the interview Sir Ernest--who showed that he
possessed excellent information concerning Germany's finances--observed
that the state of the same would render it very difficult for her to
make war. In that connexion he pointed out the intimate bearing of
international finance on political relations, and he emphasized how much
the borrowing countries were dependent on the lending ones. Still, even
the creditor nations would sometimes be forced into an uncomfortable
position, as was, for instance, the case with Great Britain after the
United States had passed on to her the greater part of the Japanese
debt. In Japan the disproportion between military burdens and economic
strength was becoming more and more pronounced, and if the country were
faced with the alternative of choosing between the total financial
exhaustion of the people and a stoppage of the payment of interest, it
would prefer to take the latter course.
In London Ballin was present at the Constitutional Club when a Member of
Parliament made a speech in which he stated, with the general approval
of his audience, that the position of Britain was not really so good as
the policy pursued by the Entente might lead one to believe. The
national balance-sheet had been much more satisfactory during the reign
of Queen Victoria; the items now appearing on the credit side being
partly bad debts incurred by Spaniards, Portuguese, and Japanese, for
whose political good behaviour Britain paid far too high a price, and
one should not allow oneself to be misled as to the value of these
ententes by balance-sheets which were purposely kept vague.
Geheimrat Hammann told Ballin by letter that Prince Bülow, the Imperial
Chancellor, and Herr v. Schön, the Foreign Secretary, were very grateful
to him for his information, and that in the opinion of both gentlemen
his reply to the suggestion concerning the stoppage of naval armaments
was "as commendable as it was correct." Meanwhile the Kaiser had also
supplied the Chancellor with a general résumé of Ballin's report to him.
Ballin's visit gave rise to an exchange of letters which it may not be
inappropriate to reproduce in this place. By way of explanation, it
should first be said that the Sandjak Railway project, to which
reference is made in Ballin's letter, had greatly agitated public
opinion all over Europe during the spring of 1908. In February, Count
Aehrenthal, the Austrian Foreign Minister, at a committee meeting of the
delegations, had announced the Government's intention of constructing a
railway line connecting the Bosnian system with the town of Mitrovitza
in the Sandjak (or province) of Novi Bazar. This announcement led to a
violent outburst of the Russian Press, which described this project as a
political _démarche_ on the part of Austria in the Balkans and as an
interference with the Macedonian reforms aimed at by the Powers. In
Austria it was thought that Germany would support her ally as a matter
of course, and Prince Bülow, in an interview given to a journalist,
tried to pacify the _Novoie Vremia_. He declared that the Russian papers
were absolutely mistaken when they alleged that the project was inspired
from Berlin, and he stated that Austria, like her German ally, pursued
none but commercial aims in the Balkans.
These remarks will be a sufficient explanation of the allusions
contained in Ballin's letter of July 13th, 1908, which, after an
expression of thanks for the hospitality extended to him, reads as
follows:
"By the way, the views I expressed to you on the matter of the
Sandjak Railway are now completely borne out by the facts. Both the
Kaiser and, later, Prince Bülow have given me positive assurances
that the German Government was just as much taken by surprise on
hearing of this Austrian project as were the London and Petrograd
Cabinets.
"I hope that our respective monarchs may soon meet now. There is
nothing that we on our side would welcome more heartily than the
establishment and the maintenance of the most friendly and most
cordial relations between the two sovereigns and their peoples. The
Kaiser will not return home from his Northern cruise and from his
visit to the Swedish Royal Court until the middle of August, but I
think it is probable that the two monarchs may meet when King
Edward returns from Marienbad, and that their Majesties will then
fix the date for the official return visit to Berlin. I sincerely
trust that this Berlin visit will be of the utmost benefit to both
countries."
Sir Ernest Cassel replied:
"I also feel that the meeting of their Majesties must produce a
great deal of good, and, as I now hear, it will after all be
possible to arrange for this meeting to take place on the outward
journey of the King. I am still as convinced as ever that our side
is animated by the same friendly sentiments as yours."
The meeting between the Kaiser and King Edward which was suggested in
these letters actually took place on August 11th at Friedrichshof
Castle, when the King was on his way to Ischl, and it was accorded a
friendly reception in the German Press. It was followed up by an
exchange of equally friendly manifestations on the part of the peoples
of both countries. Mr. Lloyd George, then Chancellor of the Exchequer,
went to Germany in August, 1908, to study the German system of workmen's
insurance against disability and old age, and British workmen came to
visit German trade unions, and to gather information about German
industrial conditions. Official Britain also pronounced herself in
favour of an understanding between the two countries which Mr. Lloyd
George described as the only means of relieving the European tension,
and Mr. Churchill professed similar sentiments.
Shortly afterwards, however, at the end of October, an event took place
which severely compromised the Kaiser's policy, viz. the incident of the
_Daily Telegraph_ interview. In this the Kaiser, amongst other matters,
bitterly complained that his friendship for England received such scant
acknowledgment. As a proof of the friendly sentiments by which his
actions were guided he stated that he, during the Boer war, had refused
the humiliating suggestion put forward by France and Russia that the
three Powers conjointly should compel Britain to put a stop to the war;
that he had communicated this refusal to King Edward, and that he
previously had presented Queen Victoria with a plan of campaign mapped
out by himself, to which the one actually pursued by Britain bore a
striking resemblance. With regard to Germany's naval programme, he
emphasized that his country needed a big fleet in order to command
attention when the question of the future of the Pacific was discussed.
Finally, with regard to Anglo-German relations, the Kaiser said that the
middle and lower classes in Germany did not entertain very friendly
feelings towards England.
The effect which this interview produced all over Germany was one of
profound consternation. Its publication led to the well-known
discussions in the Reichstag in November, 1908, during which the Kaiser,
to the great dismay of the nation, was staying at Donaueschingen with
Prince Fürstenberg, where he was hunting. In England, and abroad
generally, people regarded this interview as proving a great want of
consistency in the conduct of Germany's foreign policy, and this
impression was by no means changed when it became known that its
publication was only due to an unfortunate oversight. The Kaiser had
sent the account of it, as he was bound to do by the Constitution, to
Prince Bülow, who was then staying at Norderney. Bülow, however, did not
read it himself, but passed it on to the Berlin Foreign Office to be
examined. There, indeed, an examination took place, but only with a view
to finding out whether it contained any errors of fact, and when this
was proved not to be the case, it was marked to that effect, passed the
various ministries without any further examination, and was published.
This unfortunate chain of accidents did not, however, alter the fact
that the Kaiser ought to have been aware of the great political
importance of his utterances. It has always been a chief fault of his to
speak out too impulsively when it would have been politically more
expedient to be less communicative. Nor can the entourage of the
sovereign be excused for not drawing his and the Chancellor's attention
to the great political significance of his utterances. The Chancellor
himself and the Foreign Office, profiting from their previous
experiences with the Kaiser and his appearances in public, ought to have
used a great deal more circumspection, and it would have been well if
the permanent officials in the Foreign Office had shown rather more
political insight.
The endeavours of the official circles to remove the tension existing
between the two countries were not affected by the incident. On February
9th, 1909, King Edward and his Queen paid their visit to Berlin, thus
bringing about the event which Ballin in his letter of July 13th, 1908,
had described as so very desirable. To appreciate the importance of this
strictly official visit, we must bear in mind the fact that it did not
take place until the ninth year of the reign of King Edward. This long
postponement was no doubt due to a large extent to the estrangement
between uncle and nephew, and this, in its turn, had its origin in the
natural dislike which the Kaiser felt for his uncle's mode of conducting
his private life while still Prince of Wales. It would have been
preferable, however, to relegate such personal likes and dislikes to the
background where politics or business were concerned. British official
comments emphatically underlined the significance of the visit, and the
German Press followed suit, although voices were not wanting to warn
against any over-estimation of such acts of courtesy. The reply given in
the Reichstag by Herr v. Schön, the Foreign Secretary, to a question as
to whether any suggestions had been put forward by Great Britain with
respect to a reduction of naval armaments was very cool in its tone. His
statement amounted to this: that no formal proposal for an understanding
which might have served as a basis for negotiations had been received,
probably for the reason that it was not customary among friendly Powers
to put forward any proposals of which it was doubtful to say whether
they would be entertained.
In spite of this cold douche and in spite of other obstacles, the
promoters of an understanding, Ballin and Sir Ernest Cassel, did not
cease their efforts in that direction. In July, 1909, Ballin paid a
second visit to Sir Ernest, during which the political discussions were
continued. On these latter he reported to the Kaiser as follows:
"My friend to whom I had intimated in a private letter written
about a week earlier that it was my intention to visit him--at the
same time hinting that, for my personal information, I should like
very much to take up the threads of the conversation we had had a
twelvemonth ago on the subject of the question of the navy--had
evidently used the interval to supply himself at the proper
quarters with authoritative information about this matter. During
the whole of our long talk he spoke with extraordinary assurance,
and every word seemed to be thought out beforehand.
"At the commencement of our conversation I said to my friend that
in view of the great excitement which reigned in England on account
of the German naval armaments, and which was assuming a decidedly
anti-German character, he would quite understand that I should
desire to take up once more the interesting discussions which we
had had on the same subject a year ago. I pointed out that this
excitement--spread as it was by an unscrupulous press and fostered
by foolish politicians--was apt to produce results altogether
different from those which the Government might perhaps consider it
desirable to bring about within the scope of its programme. I
emphasized the fact that, of course, I was merely speaking as a
private citizen, reading with interest the English papers and the
letters of his English friends, so that all my knowledge of the
subject was derived from private sources.
"A year ago, I said, my friend, in the clear and concise manner
that distinguished him, had explained to me the need for an
understanding between Germany and Britain governing the future
development of their naval forces, at the same time requesting me
to exert myself in that sense. This suggestion of his had not been
made in vain. The fact that I had been successful in establishing
complete concord amongst Germans, British, French, Italians,
Austrians, and a whole series of small nations on questions
affecting their highly important shipping interests, and in
replacing an unbridled and economically disastrous competition by
friendly agreements to the benefit of each partner, was bound to
make me sympathize with any measures that it was possible to take
in order to bring about a similar result between the Governments if
only they were met in the right spirit. I, therefore, had made up
my mind to submit such a plan to our Government, but before doing
so, it would be necessary for me to know whether Britain still
adhered to the principles which my friend had enunciated to me at
our previous meeting.
"Sir Ernest's reply was that as far as Britain was concerned a
great change had taken place during the interval, and that he was
no longer able to endorse the views he had held at that time. The
necessity for his country to maintain her supremacy on the sea at
all hazards, and subject to no engagements of any kind, was now
more clearly recognized than it had been a year ago. A one-sided
understanding between Germany and Britain could no longer be
thought of, since both Austria and France had now voted large sums
for the enlargement of their respective navies. Austria would
certainly be found on the German side, but France could by no means
be said to be an asset on which it would be safe for Britain to
rely, to say nothing about the two 'dark horses,' Russia and Italy.
If Britain, in view of these uncertainties, were to permit Germany
to nail her down to a fixed programme, she would dwindle down to a
fifth-rate Power. Germany possessed her overwhelmingly large army
with which she could keep in check Austria, Italy, Russia, and
France, but Britain had nothing but her navy to guarantee her
existence as a world power and to safeguard the roads that linked
her to her colonies. For many decades Britain had enjoyed
opportunities for accumulating big fortunes. These times, however,
had now passed. During the reign of the Emperor William II, who,
with a consistency which it would be difficult to praise too
highly, had made his country a commercial power of world-wide
importance, and who had raised German industrial enterprise and
German merchant shipping to a condition of undreamt-of prosperity,
Britain sustained immense losses in her overseas commerce. British
trade was declining, and there was no doubt but that in the long
run Britain would be compelled to abandon her principles of Free
Trade.
"The question of the Austrian naval armaments appeared to trouble
my friend more than anything, and this circumstance, combined with
the doubtful attitude of Russia and the uncertainty of the
situation in France, was evidently a source of great anxiety to the
King. My friend remarked in this connexion that in his opinion the
moment chosen for the conclusion of an understanding was very
favourable to German but very unfavourable to British interests. It
was useless to talk of an agreement so long as an element of mutual
fear had to be reckoned with. At present this fear manifested
itself in Britain in a manner which was most inopportune, so that
it was bound to make the German public believe that Britain would
be ready to come to an understanding even if the terms of it were
detrimental to her own interests. Britain had got behindhand both
with her commerce and with her naval programme. To fight her
competitors in the world's trade with a fair chance of success was
impossible for more reasons than one, but the elimination of the
disadvantage from which she suffered with respect to her naval
armaments was merely a question of money. The funds that were
required to bring the British Navy up to the necessities of the
international situation would certainly be found, because they had
to be found.
"I told my friend that I was astonished to hear how completely his
views had changed on these matters. Not what he did say, but what
he had left unsaid, made me suspect that official circles in
England--partly, perhaps, through the fault of the German
Government--had arrived at the conclusion that the latter would
refrain from a further strengthening of the navy after the existing
naval programme had been carried out, and that it would merely
content itself with the gradual replacement of the units as they
became obsolete. Such a proceeding could be justified only if the
same plan were adopted by Britain also. If, however, his remarks
implied that in the opinion of his Government the moment had now
arrived for altering the ratio of naval strength existing between
both countries by a comprehensive programme of new building, it
would soon become evident that there were some flaws in that
calculation. In view of any such intentions it was my
opinion--which, however, was quite personal and unofficial--that
Germany would have to decide upon such an increase of her navy as
would enable her to carry on a war of defence with the certainty of
success. If, therefore, Britain meant to go on building warships on
a large scale, this would merely lead to an aimless naval race
between the two countries.
"These remarks of mine concluded our first conversation, and I
accepted my friend's invitation to dine with him that evening in
company with some prominent men of his acquaintance.
"In the evening I was greatly surprised to see that I was the only
guest present. My friend told me that, in order to be alone with
me, he had cancelled his invitations to the other gentlemen,
stating that he did not yet feel well enough to see them. It was
obvious to me that he had, meanwhile, reported on the outcome of
our conversation, and that the atmosphere had changed. This change
had without doubt been brought about by my remarks concerning the
necessity for a further enlargement of the German Navy, if the
action of Britain compelled our Government to take such a course.
The long discussions that followed proved that this view of mine
was correct in every detail.
"Sir Ernest explained that the Liberal Cabinet had acted penny wise
and pound foolish in dealing with the question of the navy. This
was the conviction of the great majority of the British people, and
this action had caused the feelings of apprehension and of
hostility animating them. The Liberal Government had thus made a
serious blunder, and had, in his opinion, prepared its own doom by
doing so. He thought the days of the Liberal party were numbered,
and another party would soon be in office. Anti-German feeling
would be non-existent to-day if the Liberal cabinet had not,
because of its preoccupation with questions of social policy,
neglected the navy. The whole matter was further aggravated by
other questions of a political kind. France, on account of the
French national character, had always been a doubtful asset to
Britain, and, considering the state of her internal politics, she
was so now more than ever. Germany, on the other hand, possessed a
great advantage in that her military preponderance enabled her to
rely with absolute certainty on her Austrian ally. He would say
nothing about Russia, because he had never regarded the
Anglo-Russian _rapprochement_ as politically expedient.
"If it was admitted--and he thought this admission was implied by
my remarks--that her colonial and her commercial interests made it
imperative for Britain to maintain an unchallenged supremacy on the
seas, he felt certain that some reasonable men would, after all, be
able to discover a formula which would make an understanding
between both countries possible. A great difficulty, however, was
presented by my often reiterated demand that Britain must not
abandon her principles of Free Trade. In questions such as these,
she could, indeed, speak for herself, but not for her great
colonies. History had proved that she lost her American colonies as
soon as she tried to foist her own commercial policy on the
colonists. He had no doubt that Germany, despite the disagreeable
surprises which she had experienced when adjusting the system of
her Imperial finances, possessed sufficient wealth to go on
increasing her navy in the same proportion as Britain. The great
mistake committed by the Liberal cabinet and by the other advisers
of the King had been their assumption that financial considerations
would prevent Germany from carrying out her naval programme in its
entirety. German prosperity had grown far more rapidly, he thought,
than even the German Government and German financial experts had
believed to be possible. Signs of it could be noticed wherever one
went, and one would turn round in astonishment if, during the
season, one heard the tourists in Italy or in Egypt talk in any
language but German. He, at any rate, felt certain of Germany's
ability to keep pace with Britain in the naval race, even if that
pace was very greatly accelerated.
"Reasons of internal policy had convinced him that Britain would
not in any case abandon her Free Trade principles within a
measurable period of time, and as it was not intended to conclude a
perpetual agreement, but only one for a limited number of years, he
thought it was not at all necessary that Germany should insist
upon her demand in connexion with this question. As the colonies
enjoyed complete independence in these as in other matters, the
difficulties would be insurmountable. In return for such a
concession on Germany's part, Britain would doubtless be willing to
meet the views of the German Government in other respects. For
these reasons he would be quite ready to change the opinion he had
expressed in the morning, and to agree that it could produce
nothing but good if either side were to appoint some moderate men
for the purpose of discussing the whole question. Such a meeting
would have to be kept absolutely secret, and both parties should
agree that there should be no victor and no vanquished if and when
an agreement was concluded. This condition would have to be a _sine
qua non_.
"I promised Sir Ernest that I would use my best endeavours to this
end when an opportunity should present itself, and we arranged to
have another meeting in the near future.
"There is no doubt but that my friend is an extremely
well-qualified negotiator. I do not recollect that during my long
experience, extending over many years, I have ever come across a
man who could discuss matters for hours at a time with so much
self-reliance, deliberation, and fixity of purpose."
This report was passed on by the Kaiser to Herr v. Tirpitz, the
Secretary for the Navy, who not only expressed his approval of the
project, but also recommended that the Imperial Chancellor, Herr v.
Bethmann-Hollweg, who had succeeded Prince Bülow on July 14th should be
kept informed of all that was done to bring about an understanding. The
Chancellor, accordingly, was presented by the Kaiser himself with a copy
of Ballin's report. This was the correct thing to do, as it avoided a
_faux pas_ such as, during the chancellorship of Prince Bülow, had
sometimes been made. Future developments, however, proved that this step
deprived the whole action of its spontaneity, and its immediate effect
was that the Secretary for the Navy was relieved of all responsibility
in the matter. Ballin, in later days, summed up his views on this way of
dealing with the subject by saying that if Herr v. Tirpitz had been left
a free hand in the whole matter--if, for instance, _he_ had conducted it
as Imperial Chancellor--it would hardly have turned out a failure. The
main object of the negotiations that Ballin had carried on was to ensure
that a number of "experts and men of moderate views," i.e. naval experts
in the first instance, should join in conference in order to discuss
how, without injury to their relative fighting efficiency, both
countries could bring about a reduction of their naval armaments. This
plan was so simple and so obviously right that, had it been carried out
as a preliminary to something else, and had the attention of the experts
been drawn to the enormous political importance of their decision,
success would have been assured. The procedure, however, which the
Chancellor adopted compelled him to combat the active opposition of the
various departments involved even before a meeting of the naval experts
could be arranged for, and this was a task which far exceeded the
strength of Herr v. Bethmann-Hollweg, the most irresolute of all German
chancellors, the man to whom Fate afterwards entrusted the most
momentous decision which any German statesman has ever had to make.
An interview between Ballin and the Chancellor was followed up, with the
consent of the latter, by an exchange of telegrams between Ballin and
Sir Ernest Cassel. From these it became clear that official circles in
London were favourably disposed towards the opening of discussions in
accordance with the terms laid down in Ballin's report, and Ballin
approached the Chancellor with the request to let him know whether he
should continue to work on the same lines as before, or whether the
Chancellor would prefer a different method, by which he understood
direct official negotiations. In a telegram to the Chancellor he
explained that in his opinion Sir Ernest's reference to the friendly
disposition of official London implied that he was authorized to arrange
the details about the intended meeting of experts. If, therefore, he
went to England again, he would have to know what were the views and
intentions of the Chancellor. The reply of the latter, dated August
11th, was as follows:
"Many thanks for your welcome telegram, which has found my closest
attention. I shall send you further details as soon as I have
interviewed the gentlemen concerned, which I intend to do to-morrow
and during the next few days."
This reply clearly showed that the Chancellor had made up his mind to
deal with the matter along official lines and in conformity with his own
ideas.
The subsequent course of events is indicated by a letter of the
Chancellor to Ballin, dated August 21st, in which he says:
"I have to-day taken the official steps of which I told you. As Sir
Ernest Goschen[2] and I have agreed to observe absolute secrecy in
this matter, and as a statement of your friend to the British
Government to the effect that I had undertaken an official
_démarche_, might possibly be regarded as an indiscretion, I
suggest that if you inform your friend at all, you should word your
reply in such a way that this danger need not be feared."
This letter shows, and later events have also proved, that the guiding
spirits of Germany's political destiny were unable to meet on such terms
as expediency would dictate the overtures of a man like Sir Ernest
Cassel, whose status and whose good intentions were beyond criticism.
If, on receipt of this news, Sir Ernest, who had been working so hard
for an understanding, was not entirely discouraged, it was no doubt due
to the diplomatic skill with which Ballin--who was a master of this art,
as of so many others--interpreted the Chancellor's rebuff when
communicating it to his friend.
That the latter's account of British feeling towards Germany was
perfectly unbiased, may also be inferred from another piece of news
which reached Ballin about the same time from a British source, and
which reads as follows:
"My only object in writing just now is to say that if there is any
feeling in high quarters in your country favourable to coming to an
understanding with this country concerning naval matters, I am
quite satisfied from the inquiries I have made that the present
would be an opportune time for approaching this question, and that
the present Government of this country would be found entirely
favourable to coming to such an arrangement."
However, by that time, the matter was in the hands of the various
departments, and they proved unable to make a success of it. Why they
failed, and why the step which Herr v. Bethmann had taken with the
British Ambassador produced no results, are questions which can only be
answered by reference to the files of the Foreign Office.
Mr. Asquith, in a speech dealing with the British naval programme
delivered on July 14th, 1910, explained why no understanding with
Germany had been arrived at.
"The German Government told us--I cannot complain, and I have no
answer to make--that their procedure in this matter is governed by
an Act of the Reichstag under which the programme automatically
proceeds year by year. That is to say, after the year 1911-12, the
last year in which under that law four Dreadnoughts are
constructed, the rate of construction drops in the two succeeding
years to two each year, so that we are now, we may hope, at the
very crest of the wave. If it were possible, even now, by
arrangement to reduce the rate of construction no one would be more
delighted than his Majesty's Government. We have approached the
German Government on the subject. They have found themselves unable
to do anything; they cannot do it without an Act of the Reichstag,
repealing their Navy Law. They tell us--and no doubt with great
truth--they would not have the support of public opinion in Germany
to a modified programme."
As these statements have never been contradicted, it must be assumed
that the departments concerned sheltered themselves behind the formal
objection that, owing to public feeling, a repeal or a modification of
the Navy Law was out of the question. If this assumption is correct, it
is evident that no touch of political genius was revealed in the
treatment of this important question. Even the hope that the "crest of
the wave" had been reached turned out a disappointment, as was proved by
the introduction of the new Navy Bill in 1912.
The objections which Herr v. Bethmann, on March 30th, 1911, raised to an
international limitation of armaments can likewise only be described as
formal ones. He said:
"If it is the intention of the Powers to come to an understanding
with regard to general international armaments, they must first of
all agree upon a formula defining the relative position of each....
Practically, it might be said, such an order of precedence has
already been established by Great Britain's claim that,
notwithstanding her anxiety to effect a reduction of her
expenditure on armaments, and notwithstanding her readiness to
submit any disputes to arbitration, her navy must under all
circumstances be equal--or even superior--to any possible
combination. Great Britain is perfectly justified in making this
claim, and in conformity with the views I hold on the disarmament
problem, I am the last person in the world to question her right to
do so. But it is quite a different matter to use such a claim as
the basis of an agreement which is to receive the peaceful consent
of the other Powers. What would happen if the latter raised any
counter-claims of their own, or if they were dissatisfied with the
percentage allotted to them? The mere suggestion of questions such
as these is sufficient to make us realize what would happen if an
international congress--because one restricted to the European
Powers alone could not be comprehensive enough--had to adjudicate
on such claims."
If this explanation is intended to be a reply to such statements from
the British side as the one just quoted from Mr. Asquith, the fact had
been disregarded that the most serious problem under discussion--viz.
the Anglo-German rivalry--could quite well be solved without convening
an "international congress."
As early as December 10th, 1910, Herr v. Bethmann, in a speech delivered
before the Reichstag, had enlarged on this same subject from the
political point of view:
"As to the relations between ourselves and Great Britain, and as to
the alleged negotiations with the latter country concerning a
mutual curtailment of naval armaments, I am bound to say that the
British Government, as everybody knows, has more than once
expressed its conviction that the conclusion of an agreement fixing
the naval strengths of the various Powers would conduce to an
important improvement of international relations.... We, too, share
Great Britain's desire to eliminate the question of naval
competition, but during the informal _pourparlers_ which have taken
place from time to time, and which have been conducted in a spirit
of mutual friendship, we have always given prominence to our
conviction that a frank discussion of the economic and political
spheres of interest to be followed up by a mutual understanding on
these points would constitute the safest way of destroying the
feeling of distrust which is engendered by the question of the
respective strengths of the military and naval forces maintained by
each country."
The speech which Sir Edward Grey delivered in the House of Commons on
March 14th, 1911, with special reference to this speech of Herr v.
Bethmann shows unmistakably that the remarks of the latter did not
reassure Great Britain with respect to the only point at issue in which
she was interested, viz. the limitation of the German naval programme.
Britain, according to Sir Edward, did not desire that her relations with
any Power should be of such a nature as to impede the simultaneous
existence of cordial relations with Germany. An Anglo-German agreement
had been specially suggested. This suggestion required some careful
thinking over. If he were to hold out any hope that Germany, in
compliance with the terms of some such agreement would be willing to
cancel or to modify her naval programme, he would be contradicted at
once. Only within the limits of this programme would it be possible to
come to some understanding between the two Governments. It might, for
instance, be agreed to spread the expenditure voted for the navy over a
longer term of years, or to arrange that the present German programme
should not be increased in future. Matters such as these could form the
subjects for discussion between the two Governments, and it would be
desirable from every point of view that an understanding should be
arrived at. To this speech the _North German Gazette_ replied that
Germany would be quite prepared to fall in with Sir Edward's suggestions
if agreements such as those outlined by him could in any way allay the
feeling of distrust governing public opinion in Great Britain. If from
this semi-official pronouncement it may be inferred that Herr v.
Bethmann on his part was favourably disposed towards an agreement, the
question arises: "Why was it not concluded?"
In order to understand why the British Cabinet attached so much value to
the settlement of the Anglo-German naval questions and to the
pacification of public opinion, it must be remembered that the Liberal
Cabinet, owing to its hostile attitude towards the House of Lords, had
drifted into a violent conflict with the Conservative party, and that
the latter, in its turn, during the election campaign had accused the
Cabinet of having neglected the navy, driving home its arguments by
constantly pointing out the "German danger." Moreover, King Edward had
died in the meantime (May 6th, 1910), and of his son and successor it
was said that he, at the time of his accession to the throne, was no
longer a man of unbiased sentiment, that he was very anti-German, and
that he was under the influence of a small group of Conservative
extremists.
It may not be out of place to reproduce in this connexion the text of
two accounts dealing with the situation in England which Ballin wrote in
the spring and in the summer of 1910 respectively, when he was staying
in London, and which he submitted to the Kaiser for his information.
In the early part of 1910 he wrote:
"If I were to say that London was completely dominated by the
election campaign, this would be a very mild way of characterizing
the situation as it is. The whole population has been seized with a
fit of madness. The City men who, until quite recently, had
preserved an admirable calm, have now lost their heads altogether,
and are the most ardent advocates of Tariff Reform. Every victory
of a Conservative candidate is cheered by them to the echo. Under
these circumstances, even in the City, the fear of war has grown.
If we ask ourselves what it is that has brought about such an
extraordinary change in the attitude of commonsense business
people, we find that there are several reasons for it, viz. the
general slump in business; the unfortunate policy cf Lloyd George
with regard to the Irish Nationalists; the advances he made to the
Labour Party, and the effects of his social legislation which are
now felt with increasing seriousness.
"Business is bad in England, and up to now very little has been
seen of the improvement which is so marked in Germany. It is but
natural that, in view of the extended trade depression which has so
far lasted more than two years, a people endowed with such business
instincts as the British should feel favourably disposed towards a
change of the country's commercial policy. This disposition is
further strengthened by the constant reiteration of the promise
that it will be possible to provide the money needed for new
warship construction and for the newly inaugurated social policy by
means of the duties which the foreigner will be made to pay.
"It seems pretty certain that the present Government, in spite of
the great election successes gained by the Conservative party, will
still retain a slight majority if it can rely on the Nationalist
vote. That is what I had always predicted. But the majority on
which the Liberal Cabinet depends will doubtless be a very
uncomfortable one to work with, and the opinion is general that it
will hardly take more than a twelvemonth before another dissolution
of Parliament will be necessary. It is said that the elections that
will then be held will smash up the Liberal party altogether, but I
consider this is an exaggeration. In this country everything
depends on the state of business. If, in the course of the year,
trade prospects brighten up again, and if everything becomes normal
once more, the Tariff Reformers in the City will turn Free Traders
again and will take great care not to kill the goose that lays the
golden eggs. I am quite convinced that everything hangs on the
future development of trade and traffic. To-day, as I have said
before, Tariff Reform and a Zollverein with the Colonies are the
catchwords that are on everybody's lips, and the anti-German
feeling is so strong that it is scarcely possible to discuss
matters with one's oldest friends, because the people over here
have turned mad and talk of nothing but the next war and the
protective policy of the near future. Large crowds are spending
hours every night in the principal squares such as Trafalgar
Square, where they have come to watch the announcements of the
election results in the provinces. Their behaviour is exemplary. It
is a curious thing that in this country the election game is spread
over several weeks, in consequence of which the political
excitement of the masses is raised to boiling-point. Within a few
months' time, I am sure, things will look entirely different
again."
From the second report, in the summer of 1910, the following is the
salient extract:
"I am now returned from England, and it may not be out of place to
report the impressions I received of the political and economic
conditions over there.
"My previous visit to London coincided with the big election
campaign, and I have already described the fit of mad excitement
which had taken possession of the people, and which was directed
against Germany.
"The situation has now undergone a complete change, which is
noticeable everywhere and which is caused by the close of the
election campaign, by the death of the King, and, finally, by the
visit of the Kaiser on the occasion of the Royal funeral. Everyone
whom I met in London--Liberals and Conservatives alike--spoke in
terms of the highest praise of the Kaiser's sympathetic attitude
displayed during his stay in England, and which was all the more
commendable as it was not denied that he had suffered many slights
during the lifetime of his late uncle.
"The attitude of the people towards the new monarch is one of
reserve, but also--in conformity with the national character of the
English--one of loyalty and good faith. The situation with regard
to home politics is as difficult now as it has been all along.
Unless a compromise between the parties is arrived at new elections
will be unavoidable in the spring or even before. I have met a
great many persons of political experience who are of opinion that,
even if a compromise is made, it will be necessary to submit such
an arrangement to the decision of the electorate by an appeal to
the country. It is difficult to predict the result of such new
elections. The views held by large sections of the Press and of the
public bear out the truth of the remarks in my previous letter when
I emphasized the fact that the British are a nation of business men
who act on the principle of 'leave well alone,' and who will refuse
to have anything to do with Tariff Reform as soon as there is an
improvement in trade.
"Business has, indeed, improved in the meantime, but only very
slightly, and much less than in Germany. This slight improvement,
however, has not failed to give a fillip to the cause of Free Trade
among the City men. If elections in the spring are regarded as
likely, much will depend on the further development of trade. I
must confess that I take a very pessimistic view as to the future
of Great Britain in this respect. The British can really no longer
compete with us, and if it were not for the large funds they have
invested, and for the sums of money which reach the small
mother-country from her great dominions, their saturated and
conservative habits of life would soon make them a _quantité
négligeable_ as far as their competition with us in the world's
markets is concerned.
"Of course, their financial strength and their excellent system of
foreign politics, in which they have now been trained for
centuries, will always attract business to their country, the
possession of which we shall always begrudge them (for is not envy
one of the national characteristics of the German race?)."
Up to the summer of 1911 the feeling remained friendly. Early in July
Ballin wrote:
"To-day the feeling, as far as the City is concerned, is thoroughly
friendly towards Germany. The visit in the spring of the Kaiser
and the Kaiserin, on the occasion of the unveiling of the monument
to Queen Victoria, has created a most sympathetic impression--an
impression which has been strengthened by the participation of the
Crown Prince and Princess in the Coronation festivities. At present
the Kaiser is actually one of the most popular persons in England,
and the suggestion of bringing about an Anglo-German understanding
is meeting with a great deal of approval from all sections of the
population."
However, this readiness to come to an understanding received a setback
during the course of the year, when it was adversely affected by the new
developments in the Morocco affair and by the dispatch of the _Panther_
to Agadir, which led to fresh complications with France, and later also
with Great Britain. The grievances of the latter found expression in a
sharply worded speech by Lloyd George in July, 1911, the main argument
of which was that Great Britain, in questions affecting her vital
interests, could not allow herself to be treated as though she were
non-existent. In Germany this pronouncement led to violent attacks on
the part of the Conservative opposition against Herr v. Bethmann and
against England, and it was the latter against whom Herr v. Heydebrand
directed his quotation from Schiller, to the effect that a nation which
did not stake her everything on her honour was deserving only of
contempt. It is also well known that the outcome of the whole affair, as
well as its sequel, the Franco-German Congo agreement, produced much
indignation in Germany, where it was felt that the material results
obtained were hardly worth the great display of force, and that it was
still less worth while to be drifted into a big war in consequence of
this incident.
The measure of the anxiety which was felt at that time in business and
financial circles all over the world may be gauged by reading the
following letter from Ballin to the Secretary of State, Herr v.
Kiderlen-Wächter, in which it is necessary to read between the lines
here and there.
"Baron Leopold de Rothschild has just sent me a wire from London in
which he says that, on the strength of information he has received
from the Paris Rothschilds, people there are greatly disappointed
to see that the German answer--the details of which are still
unknown there--leaves some important questions still unsolved.
Public sentiment in the French capital, he says, is beginning to
get excited, and it would be to the interest of everybody to settle
matters as speedily as possible.
"I felt it my duty to draw your attention to this statement, and
you may take it for what it is worth.