We therefore ‘sacrificed’ two hypothetical ships, and our programmes, which would have been increased to 5, 4, 5, 4, 5, 4, were ultimately declared at 4, 5, 4, 4, 4, 4. The splendid gift of the _Malaya_ by the Federated Malay States raised the figure of the first year from 4 to 5. In announcing these decisions to Parliament later in the same month I made publicly and definitely those proposals for a Naval Holiday which were fruitless so far as Britain and Germany were concerned, but the principle of which has since been adopted by the English-speaking peoples of the world:— ‘Take, as an instance of this proposition I am putting forward for general consideration, the year 1913. In that year, as I apprehend, Germany will build three capital ships, and it will be necessary for us to build five in consequence. ‘Supposing we were both to take a holiday for that year and introduce a blank page into the book of misunderstanding; supposing that Germany were to build no ships that year, she would save herself between six and seven millions sterling. But that is not all. In ordinary circumstances we should not begin our ships until Germany had started hers. The three ships that she did not build would therefore automatically wipe out no fewer than five British potential super-Dreadnoughts. That is more than I expect they could hope to do in a brilliant naval action. As to the indirect results within a single year, they simply cannot be measured, not only between our two great brother nations, but to all the world. They are results immeasurable in their hope and brightness. This then is the position which we take up—that the Germans will be no gainers over us so far as naval power is concerned by any increases they may make, and no losers, on the basis I have laid down, by any diminution.’ By the beginning of April it became certain that no general arrangement for a naval holiday could be effected with Germany. The Emperor sent me a courteous message through Sir Ernest Cassel expressing his great regret, but adding that such arrangements would only be possible between allies. Herr Ballin wrote at this same time to Sir Ernest:— ‘I entirely share your opinion of C.’s (Churchill’s) speech, and believe that it is simply the unusual feature of frankness and honesty which flustered the whole world, and especially the leading parties here, and has caused a torrent of indignation in the Press. It is not easy to become all at once accustomed to such a complete change from the mystery mongering hitherto prevalent; up to now, it was thought that language was given to British and German Navy Ministers to conceal their thoughts. Suddenly, some one makes a new departure, and everybody asks disconcertedly, “What does this man want?”