The attitude of Great Britain at Algeciras turned the scale against Germany. Russia, Spain and other signatory Powers associated themselves with France and England. Austria revealed to Germany the limits beyond which she would not go. Thus Germany found herself isolated, and what she had gained by her threats of war evaporated at the Council Board. In the end a compromise suggested by Austria, enabled Germany to withdraw without open loss of dignity. From these events, however, serious consequences flowed. Both the two systems into which Europe was divided, were crystallised and consolidated. Germany felt the need of binding Austria more closely to her. Her open attempt to terrorise France had produced a deep impression upon French public opinion. An immediate and thorough reform of the French Army was carried out, and the Entente with England was strengthened and confirmed. Algeciras was a milestone on the road to Armageddon.
The illness and death of Sir Henry Campbell-Bannerman at the beginning of 1908 opened the way for Mr. Asquith. The Chancellor of the Exchequer had been the First Lieutenant of the late Prime Minister, and, as his chief’s strength failed, had more and more assumed the burden. He had charged himself with the conduct of the new Licensing Bill which was to be the staple of the Session of 1908, and in virtue of this task he could command the allegiance of an extreme and doctrinaire section of his Party from whom his Imperialism had previously alienated him. He resolved to ally to himself the democratic gifts and rising reputation of Mr. Lloyd George. Thus the succession passed smoothly from hand to hand. Mr. Asquith became Prime Minister; Mr. Lloyd George became Chancellor of the Exchequer and the second man in the Government. The new Cabinet, like the old, was a veiled coalition. A very distinct line of cleavage was maintained between the Radical-Pacifist elements who had followed Sir Henry Campbell-Bannerman and constituted the bulk both of the Cabinet and the Party on the one hand, and the Liberal Imperialist wing on the other. Mr. Asquith, as Prime Minister, had now to take an impartial position; but his heart and sympathies were always with Sir Edward Grey, the War Office and the Admiralty, and on every important occasion when he was forced to reveal himself, he definitely sided with them. He was not, however, able to give Sir Edward Grey the same effectual countenance, much as he might wish to do so, that Sir Henry Campbell-Bannerman had done. The old chief’s word was law to the extremists of his Party. They would accept almost anything from him. They were quite sure he would do nothing more in matters of foreign policy and defence than was absolutely necessary, and that he would do it in the manner least calculated to give satisfaction to jingo sentiments. Mr. Asquith, however, had been far from “sound” about the Boer War, and was the lifelong friend of the Foreign Secretary, who had wandered even further from the straight path into patriotic pastures. He was therefore in a certain sense suspect, and every step he took in external affairs was watched with prim vigilance by the Elders. If the military conversations with France had not been authorised by Sir Henry Campbell-Bannerman, and if his political virtue could not be cited in their justification, I doubt whether they could have been begun or continued by Mr. Asquith.
Since I had crossed the Floor of the House in 1904 on the Free Trade issue, I had worked in close political association with Mr. Lloyd George. He was the first to welcome me. We sat and acted together in the period of opposition preceding Mr. Balfour’s fall, and we had been in close accord during Sir Henry Campbell-Bannerman’s administration, in which I had served as Under-Secretary of State for the Colonies. This association continued when I entered the new Cabinet as President of the Board of Trade, and in general, though from different angles, we leaned to the side of those who would restrain the froward both in foreign policy and in armaments. It must be understood that these differences of attitude and complexion, which in varying forms reproduce themselves in every great and powerful British Administration, in no way prevented harmonious and agreeable relations between the principal personages, and our affairs proceeded amid many amenities in an atmosphere of courtesy, friendliness and goodwill.
It was not long before the next European crisis arrived. On October 5, 1908, Austria, without warning or parley, proclaimed the annexation of Bosnia and Herzegovina. These provinces of the Turkish Empire had been administered by her under the Treaty of Berlin, 1878; and the annexation only declared in form what already existed in fact. The Young Turk Revolution which had occurred in the summer, seemed to Austria likely to lead to a reassertion of Turkish sovereignty over Bosnia and Herzegovina, and this she was concerned to forestall. A reasonable and patient diplomacy would probably have secured for Austria the easements which she needed. Indeed, negotiations with Russia, the Great Power most interested, had made favourable progress. But suddenly and abruptly Count Aerenthal, the Austrian Foreign Minister, interrupted the discussions by the announcement of the annexation, before the arrangements for a suitable concession to Russia had been concluded. By this essentially violent act a public affront was put upon Russia, and a personal slight upon the Russian negotiator, Monsieur Isvolsky.
A storm of anger and protest arose on all sides. England, basing herself on the words of the London Conference in 1871, “That it is an essential principle of the law of nations that no Power can free itself from the engagements of a Treaty, nor modify its stipulations except by consent of the contracting parties,” refused to recognise either the annexation of Bosnia and Herzegovina or the declaration of Bulgarian independence which had synchronised with it. Turkey protested loudly against a lawless act. An effective boycott of Austrian merchandise was organised by the Turkish Government. The Serbians mobilised their army. But it was the effect on Russia which was most serious. The bitter animosity excited against Austria throughout Russia became a penultimate cause of the Great War. In this national quarrel the personal differences of Aerenthal and Isvolsky played also their part.
Great Britain and Russia now demanded a conference, declining meanwhile to countenance what had been done. Austria, supported by Germany, refused. The danger of some violent action on the part of Serbia became acute. Sir Edward Grey, after making it clear that Great Britain would not be drawn into a war on a Balkan quarrel, laboured to restrain Serbia, to pacify Turkey, and to give full diplomatic support to Russia. The controversy dragged on till April, 1909, when it was ended in the following remarkable manner. The Austrians had determined, unless Serbia recognised the annexation of Bosnia and Herzegovina, to send an ultimatum and to declare war upon her. At this point the German Chancellor, Prince von Bülow, intervened. Russia, he insisted, should herself advise Serbia to give way. The Powers should officially recognise the annexation without a conference being summoned and without any kind of compensation to Serbia. Russia was to give her consent to this action, without previously informing the British or French Governments. If Russia did not consent, Austria would declare war on Serbia with the full and complete support of Germany. Russia, thus nakedly confronted by war both with Austria and Germany, collapsed under the threat, as France had done three years before. England was left an isolated defender of the sanctity of Treaties and the law of nations. The Teutonic triumph was complete. But it was a victory gained at a perilous cost. France, after her treatment in 1905, had begun a thorough military reorganisation. Now Russia, in 1910, made an enormous increase in her already vast army; and both Russia and France, smarting under similar experiences, closed their ranks, cemented their alliance, and set to work to construct with Russian labour and French money the new strategic railway systems of which Russia’s western frontier stood in need.
It was next the turn of Great Britain to feel the pressure of the German power.