The creation of a third squadron in full commission is also a serious and formidable provision. At present, owing to the fact that in the six winter months the first and second squadrons of the High Sea Fleet are congested with recruits, there is a great relief to us from the strain to which we are put by German naval power. The addition of the third squadron will make that strain continual throughout the year. The maintenance in full commission of 25 battleships, which after the next four or five years will all be Dreadnoughts, exposes us to constant danger, only to be warded off by vigilance approximating to war conditions. A further assurance against attack is at present found in the fact that several of the German Dreadnoughts are very often the wrong side of the Kiel Canal, which they cannot pass through and must therefore make a long _détour_. The deepening of the Canal by 1913 will extinguish this safety signal.[11] The fact that the defenders are always liable to be attacked while only at their ordinary average strength by an enemy at his selected moment and consequent maximum strength, means that our margins would have to be very large. Against 25 battleships we could not keep less than 40 available within twenty-four hours. This will involve additional expense. The German increase in personnel must also be met. I had intended to ask Parliament for 2,000 more men this year and 2,000 next. I expect to have to double these quotas. On the whole the addition to our estimates consequent upon German increases will not be less than three millions a year. This is certainly not dropping the naval challenge. I agree with you that caution is necessary. In order to meet the new German squadron, we are contemplating bringing home the Mediterranean battleships. This means relying on France in the Mediterranean,[12] and certainly no exchange of system[13] would be possible, even if desired by you. The only chance I see is roughly this. They will announce their new programme, and we will make an immediate and effective reply. Then if they care to slow down the ‘tempo’ so that their Fleet Law is accomplished in twelve and not in six years, friendly relations would ensue, and we, though I should be reluctant to bargain about it, could slow down too. All they would have to do, would be to make their quotas biennial instead of annual. Nothing would be deranged in their plan. Twelve years of tranquillity would be assured in naval policy. The attempt ought to be made. We laid these matters before the Cabinet, who decided that a British Cabinet Minister should go to Berlin and selected Mr. Haldane for that purpose. The ex-Emperor in his Memoirs makes a ridiculous story out of this:—