'On April 24th I had decided at Chamberlain's strong wish to yield to Childers as to the beer duty; Childers promising in return to take the Princess Beatrice Committee of Inquiry demand upon himself.
'May 9th, the Queen now wished for immediate inquiry—that is, in other words, preferred the Parliament she knew to the new Parliament. The Government proposed "next year." It was agreed that the Government were to guide the Committee whenever it might sit, and that the Chancellor of the Exchequer should be in the Chair.
'Mr. Gladstone wrote me a letter to ease off my surrender on beer duties, by pointing out the importance of the proposals which were being made to put realty in the same position as personalty as to Death Duties. "This must in all likelihood lead to a very serious struggle with the Tories, for it strikes at the very heart of class-preference, which is the central point of what I call the lower and what is now the prevalent Toryism."'
In the great debate of April 27th, in which Mr. Gladstone proposed a vote of credit for eleven millions, of which six and a half were for war preparation in view of the collision between the Afghans and Russians at Penjdeh,
'Mr. Gladstone made perhaps the most remarkable speech that even he ever delivered, and I have his notes for it with a map I drew for him before he spoke, to show him the position of the various places. [Footnote: On this speech see the Life of Gladstone, vol. iii., p. 184; Life of Granville, vol. ii., p. 440.] At this time I wrote to Hartington to suggest that if we were forced into war with Russia we should attack the Russians at Vladivostock, and the Intelligence Department wrote a memorandum upon the subject. I also sent round a paper pointing out that we should fight at the greatest advantage from a Pacific base, that the help of China would be of moment, and that Chinese troops drilled and officered by Englishmen would be irresistible; and Northbrook strongly backed me up. Lumsden was sending us most violent telegrams, and while I was preparing for war I was also asking for the recall of Lumsden in favour of Colonel Stewart. Lord Granville wrote: "Lumsden was a bad appointment, and I for a moment wished to recall him. But it would be condemned here as an immense knock-under." [Footnote: See the Life of Granville, vol. ii., pp. 441, 442.] I also suggested that the engineers for whom the Amir had asked should be carefully picked, and should have a private Indian allowance for keeping us informed of what passed at Kabul, and Lord Granville conveyed the suggestion by telegraph to Lord Dufferin. (This was afterwards done.)'
Russia unexpectedly withdrew.
'On May 2nd there was a sudden Cabinet on the Russian acceptance of arbitration, Harcourt, Chamberlain, and Carlingford being absent. Kimberley, the Chancellor, Northbrook, Derby, and I were for immediate acceptance of the offer; Hartington against; Lord Granville for amiably getting out of it; Trevelyan and Lefevre silent; Rosebery late. Mr. Gladstone at first sided with Lord Granville, then came half way to us, and then proposed that we should wait a bit till Condie Stephen reached us. I replied by showing that Condie Stephen was a Jingo, the friend of Drummond Wolff and of Bowles of Vanity Fair, and would make things worse. Then Mr. Gladstone came completely to our side. Childers drew up in Cabinet the form for the declaration as to the Select Committee on the Civil List, and I agreed to it. I wrote what had passed to Chamberlain, who was at Birmingham, and he replied on the next day that he trusted that the information about Russia would be immediately communicated to the House, and went on: "But, then, what becomes of the vote of credit and the Budget? It seems cheeky to ask for 6 1/2 millions of Preparations when the matter is practically settled."
'On May 7th the Herat boundary was discussed and a line settled, and it was decided that either the German Emperor or the King of Denmark should be named as the Arbitrator about Penjdeh.' Later, 'There was a meeting of the Commons Ministers to discuss the situation created by the refusal by Russia of the German Emperor as Arbitrator, the Queen having previously refused the King of Denmark. The Queen had ultimately to yield. But, as I have said, the arbitration, although agreed on, never took place at all.'
The demarcation of frontier for which Sir Charles had so long contended was carried through without any marked incident, largely owing to the skill of Sir J. West Ridgeway, who had succeeded Sir Peter Lumsden.