Meanwhile the Unionist party was prepared for the loss of one of its most imposing figures by Mr. Chamberlain's letters to the Presidents of the Liberal Unionist and Conservative Associations in his constituency of West Birmingham, announcing that he would retire from Parliament at the general election. He had not appeared in the House except to take the oath and his seat, since his disablement by gout and partial paralysis in the summer of 1906 (A.R., 1906, p. 180); and, though his health was not worse than it had been for some time, it had long been realised that he could never again take an active part in political life. Still, the announcement marked the close of an epoch, and of his Parliamentary connexion of more than thirty-seven years with Birmingham, twenty-nine of them as the first member for his actual constituency; and it was received with general regret and with acknowledgment, even by opponents, of his distinguished services to Great Britain and to the Empire. It was arranged that Mr. Austen Chamberlain should stand for his father's seat in West Birmingham. A few days later another Parliamentary veteran of Liberal Unionism, Mr. Jesse Collings, retired likewise after thirty-three years' service in Parliament, of which he had spent twenty-seven as member for Bordesley. He had worked, he said, for over half a century with Mr. Chamberlain, "and it seems fitting, even as a matter of sentiment only, that we should put off our harness together and at the same time."

However, the supreme questions were the attitude and the future of Ulster; and the period of interchange of views and of respite was rapidly drawing to a close. As The Times noticed (Jan. 5), responsible Unionists during the period of "conversations" had observed the "rule of reticence"; and such voices as had been heard were those of more independent politicians. Mr. William O'Brien, speaking at Douglas, near Cork (Jan. 4), regretted that the Nationalists had not accepted Lord Loreburn's proposals or the concessions suggested by the "All for Ireland" party, which in that event, had Sir Edward Carson refused them, might have been the subject of an appeal to the country. He again denounced the idea of the separation of Ulster from the rest of Ireland. A method of averting this and yet satisfying the fears of the Ulster Unionists was suggested by Mr. T. Lough, M.P., himself an Ulsterman and a Liberal, and had the support of Dr. Mahaffy and other eminent Protestant Irishmen. It was, briefly, to give the Protestant and Unionist minority a larger representation in the Irish House of Commons than their numerical strength would entitle them to claim. But the indemnity fund to compensate the Ulster Volunteers for their sacrifices for the cause had exceeded 1,000,000l. by January 9; and it was freely reported that the "conversations" had broken down, and the first important utterances by Unionists confirmed this opinion.

Addressing a Primrose League mass meeting at Manchester, on January 14, Earl Curzon of Kedleston dealt mainly with the naval question and with Ulster. The Chancellor of the Exchequer's statement, he said, was inconsistent with his speech in August, 1913 (A.R., 1913, p. 194). There was something humiliating in these appeals from British Ministers for a reduction, and British reductions had merely led to a German increase. The "naval holiday" proposal had produced no response, and the policy of independent and isolated reduction would provoke the exultation of Great Britain's enemies and the anger of her friends. Collective man seemed to be as selfish, bloodthirsty and brutal as in the dark ages, and the only guarantee of safety was the knowledge that a nation could not be attacked with impunity. Giving reasons for increased expenditure, he said that by the Navy alone could Great Britain keep her treaties with foreign Powers, maintain the balance of power in Europe, and be of any value to her friends. A Little Navy campaign would rouse Unionist protest throughout the country, not for party purposes, but because it tended to national suicide. As to Home Rule, he intimated that the conversations between the leaders had hitherto had no result; and, after pressing for either a referendum or a general election, he indicated that the Unionists might accept the Bill were it considerably altered and Ulster excluded. In gaining Ulster by force, the Nationalists would lose it for ever. To secure a peaceful Ireland, the Unionists would make sacrifices; but they could not consent to Home Rule within Home Rule, which Ulster would not accept. They desired to save the country from a great disaster and must appeal to the national instincts of the people.

The Lord Chancellor, speaking at Hoxton on January 15, advised his hearers not to be pessimistic about the discussions between the leaders; but at Bristol on the same evening Mr. Bonar Law gave no hope of a successful outcome. The country, he said, was rapidly and inevitably drifting to civil war. The conversations so far had been without result, and he expected that there would be none. It was not for the Unionists to make proposals, and, anxious as they were to avoid a terrible upheaval, they would accept no proposal which did not meet the just claims of Ulster. He had thought from the speeches of Mr. Churchill, Sir E. Grey, and even the Prime Minister at Ladybank, that the Government were prepared to face the facts, but the Nationalist leaders had claimed the right to govern Ulster, which they could not govern by their own strength. The Government knew that if they appealed to the people and were defeated their whole work of the last two years would be lost; and they had also incurred obligations to the Nationalists, and were resolved to carry their policy through. If they were right, the Ulstermen and the Unionists, who meant to assist them, were traitors; if the Unionists were right, the Government were acting as tyrants, and had lost the right to obedience. He argued once more that Home Rule was not before the electorate at the election of 1910, and pointed out that the American colonies in 1776, though their cause for revolt was trivial as compared with that of Ulster, had revolted on a question of principle while suffering was still distant. He contrasted the apathy in Dublin with the determination in Ulster, daily becoming more immovable, and interpreted Sir Edward Grey's statement at Bradford (A.R., 1913, p. 250) that the Government would put down an outbreak in Ulster as signifying that the Government hoped that Ulster would give occasion to put its existence down by force. That was gambling in human life. The position in Ulster was no longer in doubt. The people in Ulster, and the Unionist party, had no alternative. The Unionist leaders fully recognised their responsibility, past and future; but the path of duty was that of national safety, for, if the Government once realised that the Unionist party was in earnest, they would see that they must appeal to the people.

The impression of hopelessness produced by this speech was seen in the appeal of the Archbishop of York, at Edinburgh, in a sermon on the following Sunday (Jan. 18), from the text "Blessed are the Peacemakers," that efforts at compromise should continue so as to save the country from civil war. But the Nationalists held that compromise was impossible until the Bill had reached its final stage in the Commons; and the rank and file of the Ulstermen desired that the negotiations should fail. Hence, though Mr. William O'Brien sacrificed his seat (Jan. 17) and stood again in order to prove that, in spite of the defeat of his following at the Cork municipal elections, the constituency continued to support the policy of "conference, conciliation, and consent," the mass both of Ulstermen and of Nationalists showed no disposition to make peace. The anxiety was heightened by the proceedings in Belfast (Jan. 17-19). Sir Edward Carson arrived on the 17th, inspected the East Belfast Regiment, and emphasised the determination of the force to resist Home Rule. On the 19th the Ulster Unionist Council met in private; and, addressing them at a luncheon afterwards, he said that Mr. Chamberlain had told him a few weeks before that "he would fight it out," and they would take his advice. "Conversations" as to a settlement had been taking place, but negotiations were useless unless based on the continuance, under the Imperial Parliament, of the rights which their ancestors had won. Further conversations might be necessary, but their preparations should keep pace with their diplomacy. He paid a tribute to the sacrifices made by the Volunteer Force, and concluded by saying that their loyalty to the Throne would last to the end, even if they were shot down cheering the King. An enthusiastic demonstration in the Ulster Hall followed, and was addressed by the Marquess of Londonderry, Mr. Long (who assured Ulster of the support of the English Unionists), and Sir Edward Carson, who again advised "peace, but preparation."

Following this advice, the Ulster Unionist Standing Committee prepared for action; and at the annual meeting of the Ulster Women's Unionist Council Sir E. Carson again urged them to stand firm. He recognised the kindness of the English Unionists in preparing to receive the Ulster women and children in the event of civil war, but he believed "the women of Ulster would stand by their men." The women, it must be added, were actively engaged in preparing to take part in nursing, signalling, and telegraphic and postal work; and the meeting passed a resolution declaring its unabated loyalty to the Covenant and its resolve to continue in the pursuance of the cause and the maintenance of civil and religious freedom.

Speaking at Batley next day Mr. Birrell said that there was great prosperity in Ireland, except in Dublin, where, however, things were settling themselves; and he scoffed at the readiness of the Unionist party, while detesting Home Rule, to accept the decision of the odd men at a general election. He welcomed Sir Edward Carson's declaration that he would not close the door on negotiations; but they must leave the matter there for the present, resting satisfied that the Liberal party and its leader were conscious of the sacrifices Liberals had made to get the question into its actual position. From that they did not desire to see it recede in the least degree, except in pursuance of the object they had in view.

Meanwhile the Chancellor's utterance on naval expenditure had encouraged Liberal expressions of the demand for reduction at meetings at Manchester, Newcastle-on-Tyne, and elsewhere, even in the City of London (Jan. 16). This last meeting, at the Cannon Street Hotel, though not large, was influential, but there was a considerable dissentient element, and a protest was made in the name of "a great majority of members of the Stock Exchange." The chairman, Mr. F. W. Hirst, editor of the Economist, condemned the First Lord for not keeping to his own standard of sixteen to ten; and two resolutions were moved, one advocating a searching examination into all departments of expenditure, in order that the Sinking Fund might be maintained without additions to the taxes; the other urging savings in expenditure on armaments, "in view of the improved relations with all other Powers and the reduction in the naval programme of Germany," the next strongest Continental naval Power. Sir John Brunner and three M. P.'s—Mr. D. A. Thomas, Mr. Lough, and Mr. D. M. Mason—addressed the meeting, the first-named advocating the abolition of the right of capture of private property at sea.

One result of the protests was that the Daily Telegraph (Jan. 20), by an ingenious conjecture, declared that there was a grave crisis in the Cabinet, and that both the naval and civil members of the Board of Admiralty had expressed their intention to retire if the Cabinet refused the supplies asked for, which they regarded as the bare minimum necessary; the statement, however, was promptly contradicted officially.