“In the interval between my first and my second visit Sir Ernest evidently had, by consulting his friend Haldane, arrived at a very definite opinion, and when I visited him for the second time he assured me most emphatically that Great Britain would concede to us as much as she had conceded to the other Powers, but not more. We could rely on her absolute loyalty, ‘and,’ he added, ‘our attitude towards France proves that we can be loyal to our friends.’
“For the rest, the manner in which he pleaded the British point of view was highly interesting. Great Britain, he argued, had done great things in the past, but owing to her great wealth a decline had set in in the course of the last few decades. ('Traces of this development,’ he added, ‘have also been noticeable in your country.') Germany, however, had made immense progress, and within the next fifteen or twenty years she would overtake Great Britain. If, then, such a dangerous competitor commenced to increase his armaments in a manner which could be directed only against Britain, he must not be surprised if the latter made every effort to check him wherever his influence was felt. Great Britain, therefore, could not remain passive if Germany attempted to dominate the whole Continent; because this, if successful, would upset the Balance of Power. Neither could she hold back in case Germany attacked and annihilated France. Thus, the situation being what it was, Britain was compelled—provided the proposed agreement with Germany was not concluded—to decide whether she would wait until her competitor had become still stronger and quite invincible, or whether she would prefer to strike at once. The latter alternative, he thought, would be the safer for her interests.
“Our friend had a copy of the German note made by his secretary, and then forwarded it to Haldane. In the course of the evening the latter sent an acknowledgment of its receipt, from which Sir Ernest read out to me the words: ‘So far very good.’ It was evident that his friend’s opinion had favourably influenced his own views on the German note.
“On Tuesday Sir Ernest and Lord Haldane drove to the former’s house after having attended Thanksgiving Service. Lord Haldane stayed for lunch, and was just leaving when I arrived at 3 o’clock. He did not want to be accompanied by a naval expert, for, although he did not pretend to understand all the technical details, he said that he knew all that was necessary for the discussion. He stated that he would put all his cards on the table and speak quite frankly.
“Our friend spoke of our German politics in most disparaging terms, saying that they had been worth nothing since Bismarck’s time. What Ballin had attained in his dealings with the shipping companies was far superior to all the achievements of Germany’s diplomatists.”
The positive information which this report contained was passed on to the Chancellor.
By way of explanation it may be added that the German Navy Bill, which later on, at the end of March, 1912, was laid before the Reichstag, provided for the formation of a third active squadron in order to adapt the increase in the number of the crews to the increase in the material. This third squadron necessitated the addition of three new battleships and of two small cruisers, and it was also intended to increase the number of submarines and to make provision for the construction of airships.
The discussions with Lord Haldane took place at the Royal Castle, Berlin, on February 9th, the Kaiser being in the chair. The Chancellor did not attend, he had a separate interview with Haldane. The outcome of the conference is described in a statement from an authoritative source, viz. in a note which the Kaiser dispatched to Ballin by special messenger immediately after the close of the conference. It reads as follows:
“The Castle, Berlin.
“9.2.1912. 6 P.M.
“Dear Ballin,