The Chancellor said that he did not take my observations at all in bad part, but I must understand that his admirals and generals were pretty difficult.

I replied that the difficulty would be felt at least as much with the admirals and generals in my own country.

The Chancellor, in the course of our talk, proposed a formula of neutrality to which I will refer later on.

I left the Chancellor with the sense that I had been talking with an honest man struggling somewhat with adversity.  However, next day I was summoned to luncheon with the Emperor and Empress at the Schloss, and afterward had a long interview, which lasted nearly three hours, with the Emperor and Admiral von Tirpitz in the Emperor’s cabinet room.  The conversation was mainly in German, and was confined to naval questions.  My reception by the Emperor was very agreeable; that by Tirpitz seemed to me a little strained.  The question was, whether Germany must not continue her program for expanding her fleet.  What that program really amounted to we had not known in London, except that it included an increase in battleships; but the Emperor handed me at this meeting a confidential copy of the draft of the proposed new Fleet Law, with an intimation that he had no objection to my communicating it privately to my colleagues.  I was careful to abstain even from looking at it then, for I saw that, from its complexity and bulk, it would require careful study.  So I simply put it in my pocket.  But I repeated what I had said to the Chancellor, that the necessity for secure sea-communications rendered it vital for us to be able to protect ourselves on the seas.  Germany was quite free to do as she pleased, but so were we, and we should probably lay down two keels for every one which she added to her program.  The initiative in slackening competition was really not with us, but with Germany.  Any agreement for settling our differences and introducing a new spirit into the relations of the two nations would be bones without flesh if Germany began by fresh shipbuilding, and so forced us to do twice as much.  Indeed, the world would laugh at such an agreement, and our people would think that we had been fooled.  I did not myself take that view, because I thought that the mere fact of an agreement was valuable.  But the Emperor would see that the public would attach very little importance to his action unless the agreement largely modified what it believed to be his shipbuilding program.

We then discussed the proposal of the German Admiralty for the new program.  Admiral von Tirpitz struggled for it.  I insisted that fundamental modification was essential if better relations were to ensue.  The tone was friendly, but I felt that I was up against the crucial part of my task.  The admiral wanted us to enter into some understanding about our own shipbuilding.  He thought the Two-Power standard a hard one for Germany, and, indeed, Germany could not make any admission about it.