Accordingly, after the Irish ordeal was over, I said at Glasgow:—
‘The purposes of British naval power are essentially defensive. We have no thoughts, and we have never had any thoughts of aggression, and we attribute no such thoughts to other great Powers. There is, however, this difference between the British naval power and the naval power of the great and friendly Empire—and I trust it may long remain the great and friendly Empire—of Germany. The British Navy is to us a necessity and, from some points of view, the German Navy is to them more in the nature of a luxury. Our naval power involves British existence. It is existence to us; it is expansion to them. We cannot menace the peace of a single Continental hamlet, no matter how great and supreme our Navy may become. But, on the other hand, the whole fortunes of our race and Empire, the whole treasure accumulated during so many centuries of sacrifice and achievement, would perish and be swept utterly away if our naval supremacy were to be impaired. It is the British Navy which makes Great Britain a great Power. But Germany was a great Power, respected and honoured all over the world, before she had a single ship....
‘If to-day our position is eminently satisfactory we owe much to the foresight and resolution of Mr. McKenna.... Whatever is needed for the safety of the country will be asked for by the Government, and granted by the representatives of the nation with universal assent. There is no need for anxiety in regard to our shipbuilding capacity. There is no chance whatever of our being overtaken in naval strength unless we want to be....
‘But what of the men ? We have to-day 135,000 men in the active service ratings of the Navy. The great bulk of them are long-service men who have begun as boys and have been trained as a lifelong profession to the naval service. We have no difficulty in recruiting for the Navy ... and there is no doubt whatever of our ability to make any increases which may be necessary, and which I think will be necessary, in the personnel of the Navy. We have great reserves of seamen in this country. There are measures which may be taken to make a greater use of our reserves than has hitherto been found possible, and I have given directions for that part of the subject to be carefully studied by the naval experts upon whom I rely. Our reserves, both from the Royal Navy and from the Mercantile Marine, are a great resource, and this island has never been, and never will be, lacking in trained and hardy mariners bred from their boyhood up to the service of the sea.
‘Whatever may happen abroad there will be no whining here, no signals of distress will be hoisted, no cries for help or succour will go up. We will face the future as our ancestors would have faced it, without disquiet, without arrogance, but in stolid and inflexible determination. We should be the first Power to welcome any retardation or slackening of naval rivalry. We should meet any such slackening not by words but by deeds.... If there are to be increases upon the Continent of Europe, we shall have no difficulty in meeting them to the satisfaction of the country. As naval competition becomes more acute, we shall have not only to increase the number of the ships we build, but the ratio which our naval strength will have to bear to other great naval Powers, so that our margin of superiority will become larger and not smaller as the strain grows greater. Thus we shall make it clear that other naval Powers, instead of overtaking us by additional efforts, will only be more outdistanced in consequence of the measures which we ourselves shall take.’
This speech created a considerable outcry in Germany, which was immediately re-echoed by a very large proportion of our own Liberal press. It appeared that the word “luxury” had a bad significance when translated into German. The ‘Luxus Flotte’ became an expression passed angrily from lip to lip in Germany. As I expected, on my return to London I found my colleagues offended. Their congratulations upon Belfast were silenced by their reproaches about Glasgow. Mr. Haldane returned two days later from Berlin, and the Cabinet was summoned to receive an account of his mission. Contrary to general expectation, however, the Secretary of State for War declared that so far from being a hindrance to him in his negotiations, the Glasgow speech had been the greatest possible help. He had in fact used almost identical arguments to von Bethmann-Hollweg the day before. He had told the Chancellor that if Germany added a third squadron we should have ‘to maintain five or even six squadrons in home waters, perhaps bringing ships from the Mediterranean to strengthen them’; that if ships were added to the existing programme we should ‘proceed at once to lay down two keels to each of the new German additions’; and that for the sake of the Navy ‘people would not complain of the addition of another shilling to the income tax.’ He described how he had read the operative passages in my speech himself to the Emperor and Von Tirpitz in proof and confirmation of what he had himself been saying during their previous discussions. This settled the matter so far as I was concerned. It was only another instance of the very manly and loyal part which Mr. Haldane took at all times and on every question connected with the preparedness of this country for war with Germany.
Mr. Haldane brought back with him the actual text of the new German Navy Law, or “Novelle” as it was called. This had been handed to him by the Emperor during the course of the discussion. It was an elaborate technical document. Mr. Haldane had had the prudence to refuse to express any opinion upon it till it had been examined by the Admiralty experts. We now subjected this document to a rigorous scrutiny. The result more than confirmed my first unfavourable impression.
‘The main feature in the new law,’ I reported to the Cabinet on February 14, ‘is the extraordinary increase in the striking force of ships of all classes immediately available throughout the year. Whereas formerly we reckoned against 17 battleships, 4 battle cruisers, and 12 small cruisers in the active battle fleet, demobilised to a great extent during the winter months, we must in future prepare against 25, 12 and 18, which are not to be subject to anything like the same degree of temporary demobilisation.... Full permanent crews are to be provided for all, or nearly all, torpedo boat destroyers, now aggregating 115, and working up to an authorised total of 144, instead of for half the number as at present. There is to be an increase on the already large provision of £750,000 in this year’s Estimates for submarines. The numbers are not stated, but from the fact that 121 additional executive officers are required for this service alone by 1920, we may infer that between 50 and 60 submarines are to be added.[[14]] We know nothing of the rate at which this construction is to be achieved. The increases in personnel are also important. Under their existing law, the Germans are working to a total of 86,500 in 1917 by annual increments of 3,500. The new law adds 15,000 officers and men, and raises the total in 1920 to 101,500.’
On March 9 I pointed out that the fundamental proposition of the negotiations from the Admiralty point of view had been that the existing Germany Navy Law should not be increased, but, if possible, reduced, whereas on the contrary a new law was certainly to be enacted providing for large and progressive increases not only in 1912 but in the five following years. Practically four-fifths of the German Navy were to be placed permanently upon a war footing. The German Government would be able to have available at all seasons of the year twenty-five, or perhaps twenty-nine, fully commissioned battleships, ‘whereas at the present time the British Government have in full commission in Home Waters only twenty-two, even counting the Atlantic Fleet.’
Thus on the fundamental proposition we encountered an unyielding attitude. Nevertheless we persevered and the discussion was transferred to the question of a mutual declaration against aggressive plans. Here Sir Edward Grey offered the following formula: ‘England will make no unprovoked attack upon Germany, and pursue no aggressive policy towards her. Aggression upon Germany is not the subject, and forms no part of any treaty, understanding, or combination to which England is now a party, nor will she become a party to anything that has such an object.’ The German Government considered this formula inadequate and suggested through their Ambassador the following additional clause: ‘England will therefore observe at least a benevolent neutrality should war be forced upon Germany’; or, ‘England will therefore, as a matter of course, remain neutral if a war is forced upon Germany.’