on of armaments.

In 1909 this country discovered that in capital ships--which now began
to be considered the decisive factor in naval warfare--Germany would
actually be the superior by 1914 unless special measures were taken. The
British Government was awakened to the new situation (it arose from the
German Naval Law of 1908), and returned unwillingly to the path of
increasing expenditure. The Prime Minister said that we regretted the
race in naval expenditure and were not animated by anti-German feeling;
but we could not afford to let our supremacy at sea be imperilled, since
our national security depended on it (March 16, 1909). The 'Two Power'
standard was dropped, and the Triple Alliance became the object of
special attention at the Admiralty. The First Lord said on March 13,
1911, that we should make our navy superior to any foreign navy and to
any _probable_ combination which we might have to meet single-handed. In
practice this meant a policy of developing, in the matter of
Dreadnoughts, a superiority of sixty per cent, over the German navy;
this, it was officially explained in 1912, had been for some years past
the actual Admiralty standard of new construction (Mr. Winston
Churchill, March 18, 1912).

But even this programme had to be stiffened when the year 1912 saw a new
German Navy Bill which involved an increased expenditure of L1,000,000
annually for six years, and had the effect of putting nearly four-fifths
of the German navy in a position of immediate readiness for war. Earlier
in the year the British Government had announced that, if the German
policy of construction were accelerated, we should add to our programme
double the number which Germany put in hand; but if Germany relaxed her
preparations we should make a fully proportionate reduction. The German
Bill came as an answer to this declaration; and it was followed in this
country by supplementary estimates on naval account, amounting to nearly
a million pounds; and this was announced to be 'the first and smallest
instalment of the extra expenditure entailed by the new German law.' The
new British policy was maintained in 1913 and in 1914, though in 1913
the First Lord of the Admiralty made a public offer of a 'naval
holiday,' a suspension of new construction by mutual consent. The
Imperial Chancellor responded only by suggesting that the proposal was
entirely unofficial, by asking for concrete proposals, and by saying
that the idea constituted a