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.”