I may observe that at the date of this conversation the new German Fleet Bill had not been made public, and we knew nothing of its contents in London, excepting that a third squadron for training was to be added to the two which were already there.  For this purpose it had been said that a few ships and a moderate increase in personnel would be all that was required.  Before I left Berlin the Emperor, as I mentioned in the preceding chapter, handed to me, with friendly frankness and with permission to show it to my colleagues, an advance copy of the new Bill.  It looked to me as if, when scrutinized, its proposals might prove more formidable than we had anticipated.  But I asked his permission to abstain from trying to form any judgment on this question without the aid of the British Admiralty, and I put it in my pocket and handed it to the First Lord of the Admiralty at a Cabinet held on Monday, February 12, in the afternoon of the day on which I returned to London.  I was not very sure as to what might prove to be contained in this Bill, and my misgivings were confirmed by our Admiralty experts, who found in it a program of destroyers, submarines, and personnel far in excess of anything indicated in the only rumors that had reached us.  After we had to abandon the idea of getting Germany to accept the carefully guarded formula of neutrality which was all that we could entertain, the Cabinet sanctioned without delay the additions to our navy which were required to counter these increases.  Our policy was to avoid conflagration by every effort possible, and at the same time to insure the house in case of failure.

I felt throughout these conversations that the Chancellor was sincerely desirous of meeting me in the effort to establish good relations between the two countries.  But he was hampered by the difficulty of changing the existing policy of building up armaments which was imposed on him.  In only one way could he manage this, and that was by getting me to agree to a formula of absolute neutrality under all circumstances.  The other, the better, and the only way that was admissible for us, the way in which we had surmounted all difficulties with France and Russia, he was not free to enter on, tho I believe that he really wished to.  Hence the attempt at a complete agreement failed.  But, as he says himself, much good came of these initial conversations, and still more of the subsequent conversations which followed on them in London between Sir Edward Grey and the German Ambassador.  Candor became the order of the day, minor difficulties were smoothed over, and a treaty for territorial rearrangements, of the general character discussed in Berlin, was finally agreed on, and was likely to have been signed had the war not intervened.