The second hypothesis—the war of harassments—is more indeterminate, and both sides may look about for some means of waiting on each other without undue risk, till decisive periods supervene. For after all a ship can only fight another ship when she meets her.
CHAPTER VIII
IRELAND AND THE EUROPEAN BALANCE
The Oil Reserves and Supply—The Anglo-Persian Agreement—The 1914 Estimates—The Rise of Naval Expenditure—The Canadian Ships—The Conflict over the Estimates—The Admiralty Case—A New Year’s Declaration—Final Stage of the Estimates—The European Calm and the Anglo-German Détente—Renewed Efforts for an Anglo-German Naval Agreement—British Party Strife and Irish Feuds—Aggravation of the Irish Struggle—Faction—The Curragh Episode—Parliamentary Fury—Appeals to Reason—The Buckingham Palace Conference—Visits of the British Squadrons to Kiel and Kronstadt—The Crime of Sarajevo—The Sunlit World—Origin of the Test Mobilisation—The Great Review.
During the whole of 1913 I was subjected to an ever-growing difficulty about the oil supply. We were now fully committed to oil as the sole, motive power for a large proportion of the Fleet, including all the newest and most vital units. There was great anxiety on the Board of Admiralty and in the War Staff about our oil-fuel reserves. The Second Sea Lord, Sir John Jellicoe, vehemently pressed for very large increases in the scales contemplated. The Chief of the War Staff was concerned not only about the amount of the reserves but about the alleged danger of using so explosive a fuel in ships of war. Lastly, Lord Fisher’s Royal Commission, actuated by Admiralty disquietude, showed themselves inclined to press for a reserve equal to four years’ expected war consumption. The war consumption itself had been estimated on the most liberal scale by the Naval Staff. The expense of creating the oil reserve was however enormous. Not only had the oil to be bought in a monopoly-ridden market, but large installations of oil tanks had to be erected and land purchased for the purpose. Although this oil-fuel reserve when created was clearly, whether for peace or war, as much an asset of the State as the gold reserve in the Bank of England, we were not allowed to treat it as capital expenditure: all must be found out of the current Estimates. At the same time, the Treasury and my colleagues in the Cabinet were becoming increasingly indignant at the naval expense, which it might be contended was largely due to my precipitancy in embarking on oil-burning battleships and also in wantonly increasing the size of the guns and the speed and armour of these vessels. On the one hand, therefore, I was subjected to this ever-growing naval pressure, and on the other to a solid wall of resistance to expense. In the midst of all lay the existence of our naval power.
I had thus to fight all the year on two fronts: on one to repulse the excessive and, as I thought, extravagant demands of the Royal Commission and of my naval advisers, and on the other to wrest the necessary supplies from the Treasury and the Cabinet. I had to be very careful that arguments intended for one front did not become known to my antagonists on the other. I wrote to Lord Fisher that to prescribe a four years standard of reserves would be the death-blow to the oil policy of which he was the champion. I was forced to enter into arguments of extreme technical detail with the Second Sea Lord and the War Staff both as to the probable consumption per month of oil in the opening phases of a naval war, and secondly upon the number of months’ supply that should be in the country in each individual month. I had extreme difficulties with the Board of Admiralty in regard to the reductions which I thought necessary in both scales, and I feared for some time that I should lose the services of the Second Sea Lord. This, however, was happily averted and we finally agreed upon reduced scales which were in the end accepted by all concerned. These conclusions stood the test of war.
The reduced scales estimated a total consumption in the first ten months of war of 1,000,000 tons. The actual consumption was 800,000. At the end of the ten months we held 1,000,000 tons in reserve, or another twelve months’ supply at the current rate of expenditure, apart from further purchases which proceeded ceaselessly on the greatest scale.
During this year (1913) also I carried through the House of Commons the Bill authorising the Anglo-Persian Oil Convention. This encountered a confusing variety of oppositions—economists deprecating naval expenditure; members for mining constituencies who were especially sensible of the danger of departing from the sound basis of British coal; oil magnates who objected to a national inroad upon their monopolies; Conservatives who disapproved of State trading; partisan opponents who denounced the project as an unwarrantable gamble with public money and did not hesitate to impute actual corruption. There was always a danger of these divergent forces combining on some particular stage or point. However, we gradually threaded our way through these difficulties and by the Autumn the Convention was the law of the land. We now at any rate had an oil supply of our own.
All our financial commitments, fomented by rising prices and the ever-increasing complexity and refinement of naval appliances, came remorselessly to a head at the end of 1913 when the Estimates for the new year had to be presented first to the Treasury and then to the Cabinet. Knowing that the conflict would be most severe, I warned all Admiralty departments to be well ahead with their financial work and to prepare justification for the unprecedented demands we were obliged to make. We set forth our case in a volume of some eighty pages in which we analysed minutely each vote and marshalled our reasons. The main burden of this task fell upon the Financial Secretary, Dr. Macnamara, whose long experience of Admiralty business was invaluable.
We failed to reach any agreement with the Treasury in the preliminary discussions, and the whole issue was remitted to the Cabinet at the end of November. There followed nearly five months of extreme dispute and tension, during which Naval Estimates formed the main and often the sole topic of conversation at no less than fourteen full and prolonged meetings of the Cabinet. At the outset I found myself almost in a minority of one. I was not in a position to give way on any of the essentials, especially in regard to the Battleship programme, without departing from the calculated and declared standards of strength on which the whole of our policy towards Germany depended. The Cabinet had decided in 1912 to maintain equality in the Mediterranean with the Austrian Fleet, four Dreadnoughts of which were steadily building. Moreover, the issue was complicated by the promised three Canadian Dreadnoughts. The Canadian Government had stipulated that these should be additional to the 60 per cent. standard. We had formally declared that they were indispensable, and on this assurance Sir Robert Borden was committed to a fierce party fight in Canada. As it was now clear, owing to the action of the Canadian Senate, that these ‘additional’ ‘indispensable’ ships would not be laid down in the ensuing year, I was forced to demand the earlier laying down of three at least of the battleships of the 1914–15 programme. This was a very hard matter for the Cabinet to sanction. By the middle of December it seemed to me certain that I should have to resign. The very foundations of naval policy were challenged, and the controversy was maintained by Ministerial critics specially acquainted with Admiralty business, versed in every detail of the problem and entitled to be exactly informed on every point. The Prime Minister, however, while appearing to remain impartial, so handled matters that no actual breach occurred. On several occasions when it seemed that disagreement was total and final, he prevented a decision adverse to the Admiralty by terminating the discussion; and in the middle of December, when this process could go on no longer, he adjourned the whole matter till the middle of January.
I wrote to him on December 18:—