At last, thanks to the unwearying patience of the Prime Minister, and to his solid, silent support, the Naval Estimates were accepted practically as they stood. In all these months of bickering we had only lost three small cruisers and twelve torpedo-boats for harbour defence. Estimates were presented to Parliament for 52½ millions. We had not secured this victory without being compelled to give certain general assurances with regard to the future. I agreed, under proper reserves, to promise a substantial reduction on the Estimates of the following year. When the time came, I was not pressed to redeem this undertaking. * * * * * The spring and summer of 1914 were marked in Europe by an exceptional tranquillity. Ever since Agadir the policy of Germany towards Great Britain had not only been correct but considerate. All through the tangle of the Balkan Conferences British and German diplomacy laboured in harmony. The long distrust which had grown up in the Foreign Office, though not removed, was sensibly modified. Some at least of those who were accustomed to utter warnings began to feel the need of revising their judgment. The personalities who expressed the foreign policy of Germany seemed for the first time to be men to whom we could talk and with whom common action was possible. The peaceful solution of the Balkan difficulties afforded justification for the feeling of confidence. For months we had negotiated upon the most delicate questions on the brink of local rupture, and no rupture had come. There had been a score of opportunities had any Power wished to make war. Germany seemed, with us, to be set on peace. Although abroad the increase of armaments was proceeding with constant acceleration, although the fifty million capital tax had been levied in Germany, and that alarm bell was ringing for those that had ears to hear, a distinct feeling of optimism passed over the mind of the British Government and the House of Commons. There seemed also to be a prospect that the personal goodwill and mutual respect which had grown up between the principal people on both sides might play a useful part in the future: and some there were who looked forward to a wider combination in which Great Britain and Germany, without prejudice to their respective friendships or alliances, might together bring the two opposing European systems into harmony and give to all the anxious nations solid assurances of safety and fair play.