Early in March, while the new German Navy Law was still unannounced, it was necessary to present our Estimates to the House of Commons. It would of course have been a breach of faith with the German Emperor to let any suggestion pass my lips that we already knew what the text of the Navy Law was. I was therefore obliged to make my first speech on naval matters on a purely hypothetical basis: ‘This is what we are going to do if no further increases are made in the German Fleet. Should unhappily the rumours which we hear prove true, I shall have to present a Supplementary Estimate to the House, etc.’
In this speech I laid down clearly, with the assent of the Cabinet, the principles which should govern our naval construction in the next five years, and the standards of strength we should follow in capital ships. This standard was as follows: Sixty per cent. in Dreadnoughts over Germany as long as she adhered to her present declared programme, and two keels to one for every additional ship laid down by her. Two complications of these clear principles were unavoidable. First, the two ‘Lord Nelsons’ although not Dreadnoughts were stronger in many ways, particularly in armour and subdivision, than the original Dreadnought herself. Although projected earlier, they had actually been completed later. Acting on the advice of the Naval Staff, I counted these throughout as ‘Dreadnoughts.’ On the other hand, any ships provided by the Dominions were to be additional to anything we might build ourselves. Otherwise the efforts of the Dominions would not have resulted in any accession to our naval strength, and consequently these efforts might have been discouraged. Proceeding on these lines I set out the six years of British construction at 4, 3, 4, 3, 4, 3, against a uniform German construction of 2. These numbers were well received by the House of Commons. We were not sure whether the Germans would adhere to an offer made to Mr. Haldane to drop one of the three extra ships embodied in their new Navy Law. This, however, proved ultimately to be the case and was at any rate a tangible result of the Haldane mission. In Tirpitz’ words: ‘He (Haldane) next came out with a proposal of a certain delay in the building of the three ships; could we not distribute them over twelve years?... He only wanted a token of our readiness to meet England, more for the sake of form.... Haldane himself proposed that we should retard the rate of our increase “in order to lubricate the negotiations,” or that we should at least cancel the first of the three ships. He outlined in writing of his own accord the same principle which I had previously fixed upon in my own mind as a possible concession. I therefore sacrificed the ship.’
We therefore ‘sacrificed’ two hypothetical ships, and our programmes, which would have been increased to 5, 4, 5, 4, 5, 4, were ultimately declared at 4, 5, 4, 4, 4, 4. The splendid gift of the Malaya by the Federated Malay States raised the figure of the first year from 4 to 5.
In announcing these decisions to Parliament later in the same month I made publicly and definitely those proposals for a Naval Holiday which were fruitless so far as Britain and Germany were concerned, but the principle of which has since been adopted by the English-speaking peoples of the world:—
‘Take, as an instance of this proposition I am putting forward for general consideration, the year 1913. In that year, as I apprehend, Germany will build three capital ships, and it will be necessary for us to build five in consequence.
‘Supposing we were both to take a holiday for that year and introduce a blank page into the book of misunderstanding; supposing that Germany were to build no ships that year, she would save herself between six and seven millions sterling. But that is not all. In ordinary circumstances we should not begin our ships until Germany had started hers. The three ships that she did not build would therefore automatically wipe out no fewer than five British potential super-Dreadnoughts. That is more than I expect they could hope to do in a brilliant naval action. As to the indirect results within a single year, they simply cannot be measured, not only between our two great brother nations, but to all the world. They are results immeasurable in their hope and brightness. This then is the position which we take up—that the Germans will be no gainers over us so far as naval power is concerned by any increases they may make, and no losers, on the basis I have laid down, by any diminution.’
By the beginning of April it became certain that no general arrangement for a naval holiday could be effected with Germany. The Emperor sent me a courteous message through Sir Ernest Cassel expressing his great regret, but adding that such arrangements would only be possible between allies. Herr Ballin wrote at this same time to Sir Ernest:—
‘I entirely share your opinion of C.’s (Churchill’s) speech, and believe that it is simply the unusual feature of frankness and honesty which flustered the whole world, and especially the leading parties here, and has caused a torrent of indignation in the Press. It is not easy to become all at once accustomed to such a complete change from the mystery mongering hitherto prevalent; up to now, it was thought that language was given to British and German Navy Ministers to conceal their thoughts. Suddenly, some one makes a new departure, and everybody asks disconcertedly, “What does this man want?”
‘A few friendly lines addressed to you about the report I sent would have a happy effect. [A complaint which we were reputed to have made about an alleged clandestine visit of certain German ships to the Shetland Islands.]... If he wishes it, C. can make use of this opportunity in a few quite unofficial lines addressed to you, to brush away the shadows which were created in high quarters here by the “luxury fleet” (luxus flotte) and the absence of warmth in his last speech. This will be a great help in the political negotiations. It would be too pitiful if, owing to misunderstanding and sentiment, the great work of arrangement were to be hindered ... etc., etc.’
In compliance I therefore wrote the following letter for the Emperor’s eye:—