I said that our fleet was like his Majesty’s army.  It was of the Wesen of the nation, and the Two-Power standard, while it might be rigid and so awkward, was a way of maintaining a deep-seated national tradition, and a Liberal Government must hold to it as firmly as a Conservative.  Both countries were increasing in wealth—­ours, like Germany, very rapidly—­and if Germany built we must build.  But, I added, there was an excellent opportunity for co-operation in other things.  I instanced international free trade developments which would smooth other relations.

The Emperor agreed.  He was convinced that free trade was the true policy for Germany also, but Germany could not go so quickly here as England had gone.

I referred to Friedrich List’s great book as illustrating how military and geographical considerations had affected matters for Germany in this connection.

The Emperor then spoke of Chamberlain’s policy of Tariff Reform, and said that it had caused him anxiety.

I replied that with care we might avoid any real bad feeling over trade.  The undeveloped markets of the world were enormous, and we wanted no more of the surface of the globe than we had got.

The Emperor’s reply was that what he sought after was not territory but trade expansion.  He quoted Goethe to the effect that if a nation wanted anything it must concentrate and act from within the sphere of its concentration.

We then spoke of the fifty millions sterling per annum of chemical trade which Germany had got away from us.  I said that this was thoroughly justified as the result of the practical application of high German science.

“That,” said he, “I delight to think, because it is legitimate and to the credit of my people.”

I agreed, and said that similarly we had got the best of the world’s shipbuilding.  Each nation had something to learn.

The Emperor then passed to the topic of The Hague Conference, trusting that disarmament would not be proposed.  If so, he could not go in.

I observed that the word “disarmament” was perhaps unfortunately chosen.

“The best testimony,” said the Emperor, “to my earnest desire for peace is that I have had no war, tho I should have had war if I had not earnestly striven to avoid it.”

Throughout the conversation, which was as animated as it was long, the Emperor was cordial and agreeable.  He expressed the wish that more English Ministers would visit Berlin, and that he might see more of our Royal Family.  I left the Palace at 3.30 P.M., having gone there at 1.0.

On another day during this visit Prince von Buelow, who was then Chancellor, called on me.  I was out, but found him later at the Schloss, and had a conversation with him.  He said to me that both the Emperor and himself were thoroughly aware of the desire of King Edward and his Government to maintain the new relations with France in their integrity, and that, in the best German opinion, this was no obstacle to building up close relations with Germany also.