In the spring of 1909, the First Lord of the Admiralty, Mr. McKenna, suddenly demanded the construction of no less than six Dreadnought battleships. He based this claim on the rapid growth of the German Fleet and its expansion and acceleration under the new naval law of 1908, which was causing the Admiralty the greatest anxiety. I was still a sceptic about the danger of the European situation, and not convinced by the Admiralty case. In conjunction with the Chancellor of the Exchequer, I proceeded at once to canvas this scheme and to examine the reasons by which it was supported. The conclusions which we both reached were that a programme of four ships would sufficiently meet our needs. In this process I was led to analyse minutely the character and composition of the British and German Navies, actual and prospective. I could not agree with the Admiralty contention that a dangerous situation would be reached in the year 1912. I found the Admiralty figures on this subject were exaggerated. I did not believe that the Germans were building Dreadnoughts secretly in excess of their published Fleet Laws. I held that our margin in pre-Dreadnought ships would, added to a new programme of four Dreadnoughts, assure us an adequate superiority in 1912, “the danger year” as it was then called. In any case, as the Admiralty only claimed to lay down the fifth and sixth ships in the last month of the financial year, i. e., March, 1910, these could not affect the calculations. The Chancellor of the Exchequer and I therefore proposed that four ships should be sanctioned for 1909, and that the additional two should be considered in relation to the programme of 1910.

Looking back on the voluminous papers of this controversy in the light of what actually happened, there can be no doubt whatever that, so far as facts and figures were concerned, we were strictly right. The gloomy Admiralty anticipations were in no respect fulfilled in the year 1912. The British margin was found to be ample in that year. There were no secret German Dreadnoughts, nor had Admiral von Tirpitz made any untrue statement in respect of major construction.

The dispute in the Cabinet gave rise to a fierce agitation outside. The process of the controversy led to a sharp rise of temperature. The actual points in dispute never came to an issue. Genuine alarm was excited throughout the country by what was for the first time widely recognised as a German menace. In the end a curious and characteristic solution was reached. The Admiralty had demanded six ships: the economists offered four: and we finally compromised on eight. However, five out of the eight were not ready before “the danger year” of 1912 had passed peacefully away.

But although the Chancellor of the Exchequer and I were right in the narrow sense, we were absolutely wrong in relation to the deep tides of destiny. The greatest credit is due to the First Lord of the Admiralty, Mr. McKenna, for the resolute and courageous manner in which he fought his case and withstood his Party on this occasion. Little did I think, as this dispute proceeded, that when the next Cabinet crisis about the Navy arose our rôles would be reversed; and little did he think that the ships for which he contended so stoutly would eventually, when they arrived, be welcomed with open arms by me.

Whatever differences might be entertained about the exact number of ships required in a particular year, the British nation in general became conscious of the undoubted fact that Germany proposed to reinforce her unequalled army by a navy which in 1920 would be far stronger than anything up to the present possessed by Great Britain. To the Navy Law of 1900 had succeeded the amending measure of 1906; and upon the increases of 1906 had followed those of 1908. In a flamboyant speech at Reval in 1904 the German Emperor had already styled himself, “The Admiral of the Atlantic.” All sorts of sober-minded people in England began to be profoundly disquieted. What did Germany want this great navy for? Against whom, except us, could she measure it, match it, or use it? There was a deep and growing feeling, no longer confined to political and diplomatic circles, that the Prussians meant mischief, that they envied the splendour of the British Empire, and that if they saw a good chance at our expense, they would take full advantage of it. Moreover it began to be realised that it was no use trying to turn Germany from her course by abstaining from counter measures. Reluctance on our part to build ships was attributed in Germany to want of national spirit, and as another proof that the virile race should advance to replace the effete overcivilised and pacifist society which was no longer capable of sustaining its great place in the world’s affairs. No one could run his eyes down the series of figures of British and German construction for the first three years of the Liberal Administration, without feeling in presence of a dangerous, if not a malignant, design.

In 1905 Britain built 4 ships, and Germany 2.

In 1906 Britain decreased her programme to 3 ships, and Germany increased her programme to 3 ships.

In 1907 Britain further decreased her programme to 2 ships, and Germany further increased her programme to 4 ships.

These figures are monumental.

It was impossible to resist the conclusion, gradually forced on nearly every one, that if the British Navy lagged behind, the gap would be very speedily filled.