The controversy surrounding the 1914-15 Naval Estimates has been well documented. As a result of the 1912 decision to maintain a one-Power Mediterranean standard, Mediterranean requirements figured largely in the crisis — but how committed was Churchill to upholding this standard or, for that matter, the sixty per cent. standard in dreadnoughts against Germany? Nicholas Lambert, in his article “British Naval Policy, 1913-1914: Financial Limitation and Strategic Revolution”,[1] has argued the need

for major revision of our understanding of pre-1914 British naval policy. The findings of this and other work show that the strategic thought of Britain’s naval leadership has been fundamentally misrepresented. In addition, a reappraisal of naval thinking is almost certain to produce significant changes in the understanding of British defense policy before the First World War. There must be serious doubts over not only the accuracy of the currently accepted historical narrative but also the methodology used to produce it.[2]

Lambert’s article, while emphasizing the place of the submarine in pre-war naval thinking, concentrates on the so-called policy of ‘substitution’, whereby Churchill, having battled assiduously to have the construction of four Dreadnoughts in the 1914-15 Estimates agreed to by a reluctant Cabinet then, during the remaining peaceful months of 1914, secretly adopted a new policy, discarding the sixty per cent. standard in the process, whereby at least one, if not two, of the proposed Dreadnoughts would be dropped in favour of increased submarine construction. That such a policy was discussed at various times has long been known,[3] and Lambert’s contention rests, apart from that evidence previously available, somewhat uneasily on one paragraph in the draft manuscript of Churchill’s The World Crisis which was edited out of the final version. Churchill had written originally,

The reader must now prepare himself for what looks like a reversal of policy; but which indeed had been the real policy throughout. No sooner had I won from the Cabinet the authority to order the four super-dreadnoughts of the year 1914 than I immediately resumed my plans for converting two of these ships into a much larger number of small vessels. I proposed to treat these dreadnoughts not as capital ships but as units of power which could, if desirable, be expressed in any form … It was necessary to proceed in great secrecy. How could I ask the Cabinet and Parliament for four super-dreadnoughts as a vital matter in March [1914] and then transform two of these precious machines into thirty or forty submarines and torpedo-craft a few months later?[4]

Having written the above, why did Churchill omit it from the final version? He was never usually slow in claiming credit for policy initiatives. Could it be that the actual course of the First World War showed the policy to be misguided, or was it perhaps not a policy at all, but rather an ad hoc reaction to the loss of the Canadian ships? It is much more probable that the so-called substitution policy did not represent a radical shift in tactics at all. If Churchill was seriously contemplating dropping two of the capital ships from the programme it was due to financial imperatives and only as a result of Britain’s overwhelming numerical superiority in this class of ship. If the Royal Navy had not been able to maintain its quantitative lead over the High Seas Fleet it is highly unlikely that Churchill would have contemplated other options.

By the summer of 1914, and the danger period which would arise following the reconstruction of the Kiel Canal, Germany would possess no more than thirteen completed dreadnoughts and four completed battle cruisers. This fleet could be met by twenty Royal Navy dreadnoughts and eight battle cruisers, thus maintaining the sixty per cent. standard.[5] In addition to the Royal Navy ships, however, there was another source of dreadnoughts of which Churchill was only too well aware — foreign commissions in private British yards,[6] two of which, Sultan Osman I and Reshadieh being built for the Turkish Navy, would be ready in August 1914. Churchill had attempted to float the idea of this ready-made source in the C.I.D. during the great debate on Mediterranean requirements in the summer of 1912. On the basis of figures then supplied by Rear-Admiral Troubridge, Churchill ventured that the proposed Mediterranean standard was incapable of being met ‘unless our shipyards were to build for us exclusively or we were to acquire the vessels now building for foreign Powers.’[7] Troubridge had argued that, to help in meeting the demand for ten additional battleships required by 1915 to maintain superiority, the six battleships projected or building in British yards for foreign powers in June 1912 could be purchased.[8] By the addition, if necessary, of the Turkish ships, Britain would possess almost an eighty per cent. superiority in the summer of 1914 — until such time as the Turkish ships were due to be handed over. And, in the (less than disinterested) opinion of the Turkish Minister of Marine, the completion of the two ships was being deliberately delayed on Admiralty orders.[9] In view therefore of the considerable margin of safety, if Churchill did intend to sacrifice two dreadnoughts in 1914 it was to answer the very real charge of profligacy which had been levelled at the Admiralty in the face of ever-increasing Estimates. And, clearly, the reason for keeping the substitution policy secret was so as not to jeopardize the chance remaining that the Canadian ships, needed to maintain the Mediterranean standard, might still eventuate.

The possibility that a substitution of dreadnoughts for smaller vessels might take place was, in any event, not new. It had first been suggested by Churchill himself in a memorandum dated 8 December 1912 in which he argued that ‘It will always be possible at any time before the construction of the last two battleships in the programme is actually commenced to decide on a change of policy and to substitute for them greatly increased programmes of submarines and destroyers or small cruisers.’[10] The reason was the same: financial criticism of the estimates. Churchill’s ploy in 1912, as it would be in 1914, was simple if disingenuous: ‘We need not at this stage’, he had declared in December 1912, ‘complicate our proposals by any question of substituting for a battleship increased programmes of smaller vessels …’ Instead, by arguing that five capital ships were needed, Churchill hoped to get the money first and then decide how to spend it afterwards. The need for secrecy at that time was not to keep the Germans guessing that a change of tactics might be imminent but to avoid the loss of promised Empire battleships: ‘It is most undesirable’, Churchill added, ‘to raise such a question [of substitution] now while the Canadians and the federated Malay States are committing themselves to the construction of great ships. The adumbration of such a new idea would only darken counsel and greatly embarrass those who are working on our behalf.’ In the event, the substitution did not then take place. Churchill got his ship from Malaya – the eponymous Queen Elizabeth class dreadnought — but the hope of a further three ships from Canada was not fulfilled.

Churchill was aware by August 1913 that the Canadian Parliament would not even resume sitting until January 1914 and that the prospect, therefore, of the ships Prime Minister Borden hoped to provide had receded mournfully over the horizon; in its place, the storm of the 1914-15 Estimates blew up. The First Lord announced these to his Cabinet colleagues early in December 1913: they amounted to £50,694,800, an increase of £2,985,500 over the previous year. However, as a weary Charles Hobhouse noted, it was ‘pretty clear’ from Churchill’s opening statement ‘that he had contemplated much larger expenditure’ than the figure presented to Cabinet.[11] According to Churchill, ‘The new programme contains nothing abnormal. Four capital ships (one less than last year), which were announced to Parliament in 1912, as against two Germans.’ Ten ‘small torpedo boats’ were required for harbour defence; a million and a quarter pounds for submarines as against a million pounds which the Germans were spending; and ‘rather less than the usual proportion of yard craft and miscellaneous auxiliaries’. One of the few concessions made was the proposal to reduce the number of destroyers required to twelve to allow for an increase in the number of cruisers to eight.

The increases in the Estimates of 1912-13, 1913-14, and 1914-5 [Churchill explained] arise from four main causes:— First: From the decisions of policy to increase the programmes of new construction and the number of ships maintained in full commission in consequence of the new German Navy Law, and the decision to increase the numbers and pay of the personnel. Secondly: From the increase in the size, speed, armament, equipment, and cost of warships of all kinds necessary to keep pace with the similar vessels building all over the world. Thirdly: From the introduction and development of new services, principally Oil Fuel, Air Service, and Wireless Telegraphy. Fourthly: From the general increase in prices and wages, particularly in the cost of coal, oil, steel, and all materials used in connection with shipbuilding.[12]

The Estimates were discussed by the Cabinet on 8 and 11 December during which Churchill was, unsurprisingly, urged to make a reduction with Herbert Samuel, the Post-Master General, in particular emphasizing that only two capital ships were necessary to maintain the sixty per cent. standard over Germany. For the moment, Lloyd George said little.[13] The following week the matter was thrashed out in a series of Cabinets at which Churchill conceded a few small economies but steadfastly refused to budge on the programme for four capital ships. Realizing the signal which any reduction in building would send to Canada, Churchill wrote pre-emptively to Borden on 19 December that, ‘Although the preparation of armaments in Europe has undergone no relaxation, there is a powerful & widespread reaction against the expense among the populations affected. This general movement had produced its repercussion in the Cabinet, culminating in the demand that the quota for four ships appointed for the years 1914-15 should be reduced to two. The Admiralty position is unchanged from that described in the Secret & publishable memoranda.’[14] Nevertheless, Churchill received an increasingly rough ride from his colleagues. ‘Eventually,’ Charles Hobhouse recorded, ‘since courage like fear is contagious, everyone took up the running, even Beauchamp and Buxton joining in, and the P.M. as usual crossed over to the winning side.’[15]

The highlight of these wearisome debates was the increasing political estrangement of the former terrible twins of the Liberal Party, Churchill and Lloyd George, an event so startling in its implications that rumours were floated that Churchill might cross the floor to rejoin the Conservatives, while there was speculation that Lloyd George was intent on a left wing take-over of the Government.[16] The cooling of the previously warm relationship dated from at least April 1912, when Charles Masterman conceded that ‘The alliance between LG and Winston has broken up. They are still as friendly as ever, but are not concerting joint plans of action as formerly.’ It was felt that Lloyd George would gravitate more towards Grey, with whom he was in sympathy with ‘regarding the Labour question and foreign policy.’[17] By December 1913, and the formulation of the Naval Estimates, Lloyd George felt betrayed: ‘When [Churchill] went to the Admiralty’, he confided, ‘I made a bargain with him about the expenditure. He has not kept it. He has been extravagant. He is like a man who buys Rolls Royce motor cars and dines at the Carlton with other people’s money. He has not been economical.’[18]

The cause of Lloyd George’s silence during the initial debates was explained not by a general bargain but by the particular deal he had struck with Churchill the previous month: the Chancellor would support the First Lord in the question of the Estimates if Churchill supported Lloyd George’s nascent campaign for land reform.[19] However, once Lloyd George (as conscious of his image as always) realized the momentum gathering pace in the Cabinet and the Party towards a reduction, he promptly abandoned his stance, to Churchill’s fury.[20] When challenged by the First Lord, Lloyd George admitted that he had ‘agreed to the figure for this year & I have stood by it & carried it much to the disappointment of my economical friends. But I told you distinctly I would press for a reduction of a new programme with a view to 1915 & I think quite respectfully you are unnecessarily stubborn. It is only a question of a 6 months’ postponement of laying down. That cannot endanger our safety.’[21] The difficulty within the Cabinet was succinctly described by Sir Francis Hopwood, a Civil Lord of the Admiralty: ‘The Cabinet has become thoroughly scared by the Radicals who are for a smaller navy, and is putting pressure upon Churchill to reduce the programme. This he cannot do for the simple reason that he was fool enough to tell the world what his programme was going to be for about half a dozen years ahead. To this he is bound hand and foot … ’[22] Indeed, when it was so much as suggested in the Cabinet that two ships should be deleted from the 1915-16 programme, Churchill promptly ‘protested his inability to carry on and went off characteristically banging the dispatch box and the door as he went out as loud as he could.’[23]

                Asquith, as ever the consummate politician, needed Churchill more at that time than he did Lloyd George. The First Lord was quick to seize the opportunity so offered to make an ally of the P.M., writing to him on 18 December that:

there is no chance whatever of my being able to go on, if the quota of capital ships for 1914-15 is reduced below 4. Even the Daily News does not expect that. I base myself on 1) my public declarations in Parliament; 2) the 60% standard … 3) the Cabinet decision on the Mediterranean and 4) my obligations towards Mr Borden. You must in this last aspect consider broad effects. How could I argue in the H[ouse] of C[ommons] that the ‘emergency’ was so far removed that our forecasted programme could be halved, at the very time that the unfortunate Borden was arguing in Canada that it was so real & serious that 3 ships must be built at once additional to the declared British programme? It would destroy him. If on a general revirement of Naval policy the Cabinet decide to reduce the quota, it would be indispensable that a new exponent should be chosen. I have no doubts at all about my duty. You know the repeated efforts I have made to meet Lloyd George, & now that the financial corner has been turned, it is too stupid of him to throw the car off the track. As to the Mediterranean you surely would have to consider whether the deliberate conclusions of the C.I.D. & the Cabinet can be discarded without good reasons, & new facts & renewed examination. The Mediterranean decision was the foundation of the Canadian policy. All the argument for Borden stands on that. My own standards have never varied. As a matter of fact we have only to hold firm now to have good chances of complete success. The finance can be adjusted without fresh taxation. Borden will act. If he succeeds, the Cabinet policy in the Mediterranean can be carried out. If he fails — then 6 months from now I can develop an argument about submarines in that sea which will obviate a further construction of battleships for this secondary theatre. Either way we can get through. Germany every month is more drawn to a naval understanding. The Dreadnought era will eventually pass away. A weakening, a reversal, an upset now, will ruin everything. My loyalty to you, my conviction of your superior judgment & superior record on naval matters, prompt me to go all possible lengths to prevent disagreement in the Cabinet. But no reduction or postponement beyond the year of the 4 ships is possible to me. I gathered that the final decision was to stand over till we reassemble in January. But there is no hope of any alteration in my view on this cardinal point, or of the view of my naval advisers. Meanwhile I am having the details of the Estimates worked out on the basis reached with L.G. Turning from these tiresome subjects, which never could and never shall affect in the slightest degree my gratitude and regard for you, is there any prospect of your coming to dine tonight…[24]

By selectively quoting from this letter, Lambert argues that, ‘Anticipating Borden’s probable answer, Churchill had already taken the precaution of warning the prime minister he was contemplating a radical shift in defense policy for the Mediterranean.’[25] A full reading of the letter reveals no such interpretation. Churchill still hoped Borden would succeed; only if he failed would a new approach be necessary. And this new approach — dispatching submarines to the Mediterranean in furtherance of the tactic of ‘flotilla defence’ — was only possible because, to Churchill at least, the Mediterranean was a secondary theatre. So determined was Churchill to see his programme of four capital ships through that he wrote to Grey on Christmas Day repeating his threat to resign, knowing full well that this would ensure Grey’s support.[26] In any event, the question of a ‘flotilla defence’ for the Mediterranean was, again, not new. As mentioned previously, during the Balkan Wars Churchill had advocated that Britain should lease Corfu for use as a naval station. ‘There is no doubt’, the First Lord had declared in 1912, ‘that Austria intends to have a great Mediterranean Fleet. Our best and cheapest – perhaps our only – way of meeting this will be a large submarine and torpedo development supported by a fast squadron.’[27] Wary of such a proposal, the Foreign Office reaction was guarded, and no more came of it; there was no further development of flotilla defence in the Mediterranean. Instead, the emphasis remained firmly on comparative dreadnought strength.

                Churchill’s arguments, backed by all the officials at the Admiralty and underpinned by his threat to resign, placed the onus on Lloyd George to do something sensational but the Chancellor, attempting to repeat past successes and reclaim the mantle of undisputed leader of the Radical section of the Party, instead gave a maladroit interview to the Daily Chronicle which was published on New Year’s Day, 1914. It was an unwarranted intrusion into the departmental affairs of a colleague and only served to exacerbate matters during a fraught January; Churchill’s relations with Lloyd George were ‘civil and sombre’. However, although, in the opinion of Hopwood, Churchill was a great trial to his colleagues and they, sick of being undermined by the First Lord, were picking a quarrel with him, their mistake lay in the fact that ‘their battleground is very ill chosen as in consequence of their indolence he has probably got chapter & verse for every item of the Naval Programme.’[28] The exception was Lloyd George who, in addition to his Daily Chronicle interview, had also prepared a lengthy analysis of British and German naval strength in which he ingeniously argued that, as British ships were qualitatively superior, the sixty per cent. standard was excessive. Such a policy of new construction, as outlined by Churchill, which Lloyd George described as ‘distinctly provocative’, ‘would be construed as a direct challenge to Germany’.[29] Churchill attempted to turn this argument by laying stress on the Mediterranean situation, and in particular, the appearance of Austrian dreadnoughts, which effectively altered the strategic balance.

His memorandum had already been completed when, on the last day of 1913, he received the news he had been dreading from Borden: the Canadian Senate was bound to reject once more the Naval Aid Bill. Borden’s preferred course was either to introduce an amended bill ‘coupled with statement that ships could not be completed and commissioned until after our next general Election’, or to wait until old age killed off enough Liberal Senators to allow the Conservatives to gain a majority.[30] Churchill hurriedly re-drafted his memorandum, but quickly realized that ‘the argument can be turned either way. If Borden starts out on his 3 ships, we are bound in honour not to compromise his position. If he fails to make any effort for his 3 ships, all the more reason for our going forward with our 4.’ As Churchill candidly admitted, ‘the only awkward thing is my second speech in March this year [1913], when I was trying to state the Government case for what was being done at its highest.’[31] The revised memorandum was printed and circulated on 10 January 1914. Arguing that ‘No survey of British naval expenditure and no controversy arising out of it can be confined to our naval strength[,] It must also have regard to our military readiness compared to all other European States that are building navies’, Churchill outlined five distinct questions which the Cabinet would have to answer:

1.                    Is the Battleship programme for 1914-15 to be 4 ships or 2?

2.                    Is the Supplementary Estimate to be limited to £1,4000,000 although £3,150,000 will be actually due to the contractors?

3.                    The 7 months gained by the acceleration of the 3 1913-14 battleships having expired, and the Canadian ships not being begun, are we again to accelerate ends of 1914-15 programme to maintain the position meanwhile? If not, how are we to justify to Parliament the £450,000 required in the Supplementary Estimate which must now be presented?

4.                    Is the Cabinet decision to maintain a one-Power standard in the Mediterranean to stand or be revoked?

5.                    Are we to make any addition to our programmes in consequence of further Austrian or Italian building now imminent or are we to ignore it?[32]

There was no evidence of a radical shift in policy here. Admittedly, any hint of an attempt to backtrack from building four dreadnoughts would sound the death knell for Borden’s efforts and so, it could be argued, Churchill kept the plans for the proposed substitution policy to himself. This is the line taken by Lambert: any evidence which points away from the substitution policy is explained by declaring the need for absolute secrecy. But why would Churchill keep his own colleagues in the dark after he had first informed Asquith of the possibility of substitution and, especially, if he believed that such a policy would lead eventually to a reduction in the Estimates? Such an admission would have gone a long way to silencing his most vociferous critics within the Cabinet, particularly McKenna and Samuel, in addition to Lloyd George. Instead, Churchill informed the Cabinet on 10 January that:

Simultaneously with the apparition of the German Third Squadron in the North Sea comes the arrival in the Mediterranean of the 6 Italian and 4 Austrian Dreadnoughts (not counting 3 Radetzkys). These are the two great new facts of the naval situation which I have had to face. They were fully recognised by the Cabinet 18 months ago. They are now becoming operative. In view of these facts I proposed early in 1912 to bring home the 6 obsolescent battleships from Malta, and that we should content ourselves with a torpedo defence of that fortress and a cruiser squadron or squadrons to show the flag and discharge diplomatic duties. But the Cabinet felt that, however non-committal the understandings might be, which would on the basis necessarily be established between the British and French Admiralties, the moral effect of our evacuating the Mediterranean, and the conclusions that would be drawn therefrom, would in fact compromise us too deeply with France … I of course accepted this decision of policy, and the Admiralty have considered themselves bound by it ever since … [However], the 7 or 8 months [since the acceleration] are up; the effect of the acceleration has passed away: the Canadian ships have not been begun; the Canadian situation has not defined itself. When Parliament meets, the gap temporarily filled by the accelerated ships, will be open again. The Opposition demand will be that the 3 ships should be built additional to our regular programmes, i.e., 7 this year. For this they can find good warrant in the Cabinet decisions of June [to accelerate the Naval Programme]. Unless we at least accelerate ships of the 1914-15 Programme do we not stultify our action of last June, and do we not reflect on the good faith of our declarations to Canada and to Parliament?[33]

This was the nub as far as the Radicals were concerned: Not only was Churchill well prepared to argue for the acceleration of the 1914-15 programme, he had also enlisted the support of the King and, crucially, Asquith and Grey. As McKenna admitted, ‘Winston has shown his fangs and they are pretty big fangs. He has cornered the PM, who is committed up to the hilt to all that Winston has done.’[34]

Churchill evidently thought he had triumphed — an impression which was strengthened when, on 11 January, he received encouraging news from Borden that it was ‘just possible’ that the Conservatives might secure a majority in the Canadian Senate before the end of the session.[35] However, even if the Canadian prognosis was brighter, the date at which the elusive ships might appear receded even further. With the Estimates’ crisis not yet resolved, Churchill needed to concert his strategy. Battenberg was therefore informed on 14 January that:

News having been received from Mr Borden that no effective progress will be made this year with the construction of the three Canadian Dreadnoughts, it would appear to be necessary for us to accelerate ships of the 1914-15 programme to secure a further period of delay to Canada … I have asked Third Sea Lord to make proposals for accelerating the construction of the two contract battleships of the 1914-15 programme so that they may be completed before the end of the second quarter of 1916. This would entail their being repeats of the ‘Royal Sovereigns,’ making seven out of the complete squadron of eight which we considered desirable. The additional expense necessitated by this change could be met in part by a re-adjustment between the items of first instalments of the 1915-15 new programme; in part by a slight reduction of that programme; and in part by a direct financial addition, either to the Supplementary Estimate of this year, or to the vote for next. The Third Sea Lord has been requested to make proposals accordingly. 2. It will be necessary for the board to consider whether … we should not be justified for the purpose of effecting a general settlement in reducing the light cruiser programme from eight to six, and in dropping altogether the ten torpedo boats. 3. The effect of the acceleration of the two ships … would enable us to maintain six Dreadnoughts or ‘Lord Nelsons’ in the Mediterranean up to the end of the first quarter of 1917 without prejudice to the 50 per cent. margin at home (i.e. in home waters). It should be possible to select these six vessels so as to give an effective superiority over the four Austrian Dreadnoughts and the three ‘Radetzkys’ which is all that power can have by that date. If necessary, however, as a makeweight two ‘King Edwards’ could be added. It would be better not to break up the present Third Squadron.[36]

Churchill had fought tenaciously in 1912 to have the pre-dreadnoughts withdrawn from the Mediterranean due to their vulnerability yet now, incredibly, he was proposing, if necessary, to send two slow and obsolete pre-dreadnoughts back to the Mediterranean in 1917 to stand in the line of battle against Austrian super-dreadnoughts. Only the previous month he had assured the Cabinet that, so long as the speed of the Mediterranean Fleet was ‘maintained at a high and uniform superiority over any other equal force, there is no danger of its being cut off and destroyed in detail.’ What would McKenna have made of it? Churchill’s important minute to Battenberg also revealed how he intended to meet the additional expenditure required for the extra dreadnoughts — by reducing the cruiser programme and ‘dropping altogether the ten torpedo boats’. Although originally slated for harbour defence, Churchill’s minute is evidence of a trade-off in favour of dreadnoughts at the expense of torpedo craft.

Asquith had a long interview with his two recalcitrant ministers on 20 January (‘It was interesting & at moments rather dramatic’[37]) the result of which was that, three days later, Churchill injudiciously presented Asquith with a new proposal whereby reductions could be made in the 1915-16 and 1916-17 Estimates, but only if the current Estimates rose to £52,850,000. Lloyd George was furious; Asquith contemplated a dissolution. C. P. Scott, editor of the Manchester Guardian, saw Lloyd George the following morning. The Chancellor, having considered his position during the night, was now ‘prepared to face all present obligations including the 4 ships, but only on condition (1) that a clean breast is made of everything to Parliament and (2) that there is a great and assured reduction for the following year (1915-16). On this basis estimates for this year (1914-15) would be over 53 millions and there must be 2d. on the income tax to met the deficit’. Scott has left a detailed account of their meeting:

The conflict with Churchill was in regard to reductions in 1915-16. At first Churchill was obdurate and would give no pledge … Then Lloyd George made a home thrust: “You will resign. What will you resign upon? Everything has been conceded to you. You have your 4 ships; your estimates are up over 53 millions. You are not satisfied. You want more. And you go out of office on the top of that and expect the country to support you”. On that Churchill’s tone completely altered and for the first time he began seriously to give his mind to the question of reductions. He made some concessions — ships could be put out of commission instead of so vast a proportion being kept always ready for sea, acceleration of “Canadian[”] ships could be made nominal rather than real, and there could be minor economies. But the aggregate was not enough. Lloyd George required altogether 6 or 7 millions, so as to bring down the 1915-16 estimates to 46 or 47 millions … Churchill could not see his way. Did not know if he could carry his Board, especially Prince Louis of Battenberg who, being a German, would be bound to take the high (British) patriotic line … Nothing definitely settled as to amount of reductions for 1915-16. Lloyd George demand[ing] estimates of 46 millions, but would not reject 47. He would, however, require a pledge not from Churchill but from the Prime Minister. “Why?” asked Churchill. “Because I do not trust you” was the reply.’[38]

There was another aspect of the Cabinet battle which had been ignored by Lloyd George, but which did not escape the attention of another of Churchill’s sterner critics, McKenna. The former First Lord ‘contended all through that we were getting nothing from the extra expenditure and declared that the vote for construction was actually less than in his day when the estimates were 6 and 8 millions lower. The difference — apart from sheer waste — was practically all due to the policy of keeping almost the whole fleet instantly ready for sea.’[39] Upon hearing this, Scott promptly wrote to Lloyd George to alert him to this new weapon in the Radicals’ armoury:

McKenna’s statement that construction is actually less than in his time though estimates (apart from arrears) are 6 to 8 millions higher seems to me immensely important because construction — the number of our ships as against German ships — is what everybody talks about and is the only thing the public understands. If then we can maintain the full programme of construction and at the same time, by reverting to the old pre-Churchill standard of preparedness for sea, save ultimately some 5 or 6 millions, and immediately an appreciable instalment of that sum, the problem would be solved … If you carry your point as to the standard of preparedness (which in view of present relations with Germany it would be monstrous if you don’t) there would be not merely the promise but the virtual certainty of substantial economies this year and much larger ones next year. This would be better than any paper promises and the beauty of it is that it violates no undertaking of any kind and is not open to effective public attack … [40]

Churchill lost no time refuting this contention. In a densely argued paper (the First Lord always resorted to statistics when on shaky ground) he concluded that the ‘proportion of the British Fleet maintained permanently in full commission is substantially less than the proportion of the German Fleet so maintained; and I am satisfied that there is no opportunity of any further reduction.’[41] The key word was, naturally, ‘proportion’ and, as was so often the case, the British position was presented on the basis of the worst possible worst scenario.

                Nicholas Lambert has argued that ‘Lloyd George had agreed to increased naval estimates in 1914-15 only after Churchill had promised him an absolute reduction in the navy estimates the following year. With this guarantee the chancellor believed he could achieve the party’s objective of land reform before the next election … The plan depended, of course, on the reduction in the navy estimates materializing. Hitherto, no historian has ever seriously considered how this would have been possible.’ It could, of course, have been the case that Churchill did not seriously intend to reduce the Estimates — another scare could be engineered; reports of new building by Germany or Austria could be inflated; more memoranda could be obtained from a pliant War Staff. Indeed, Charles Hobhouse complained at the time that ‘Churchill’s memos would permit of 5 separate totals, varying from £48 millions to £50½ millions and of 6 different statements as to the number of ships we should have ready by April 1915.’[42] Merely because Churchill told Lloyd George that the 1915-16 Estimates would be reduced does not imply that Churchill himself believed this would be possible, or intended to honour the agreement. When Lloyd George boasted on the afternoon of Monday 26 January that he had had a ‘most satisfactory meeting with Churchill, who would give every guarantee that expenditure was down in 1915-16’ he was immediately set upon by McKenna, Simon, Masterman and Hobhouse who protested that Churchill ‘could not, with the best will in the world, give such a guarantee — internal and external events or pure accidents might upset all calculations.’[43]

According to Lambert, ‘Churchill’s pledge to reduce navy estimates was dependent upon the substitution of battleships for submarines. The First Lord’s pledge committed the Navy to the substitution policy.’[44] As evidence, Lambert cites Churchill’s altered first draft of The World Crisis and a letter from an ‘Unknown civil servant (initials J.B.)’ to Lloyd George, dated 26 January.[45] However, on the very same day, Churchill drafted a letter to Lloyd George in which he categorically stated that the ‘estimates of 1914-15 have been prepared with the strictest economy … I cannot buy a year of office by a bargain under duress about estimates of 1915-16 …’[46] The Chancellor clearly took Churchill at his word, and informed Asquith the following day that he had ‘laboured in vain to effect an arrangement between Churchill & the critics of his Estimates’. Lloyd George admitted that he had ‘utterly failed’. The economists, he added, ‘have always contended that Winston’s latest figures were not real & that he meant to take his £54,000,000 this year without honouring his promise of reduction for 1915-16. Winston’s letter to me confirms this suspicion.’[47] The only certainty about Churchill’s latest proposals, Lloyd George warned, was ‘that the Exchequer would this year have to find 56 millions — supplementaries included — for the Navy, whilst the reductions promised for 15/16 do not bind either the Board of Admiralty or the First Lord.’[48]

Indeed, Churchill had already indicated to Sir John Bradbury (Lambert’s J.B.?)[49] that he would refuse to accept responsibility ‘for any exceptional measures to reduce the Supplementary Estimate below the figure at which it is estimated by my professional advisers. If, for instance,’ Churchill warned, ‘a change occurred in the tenure of the Admiralty, my successor might raise objections to the procedure to which I should have no adequate answer.’[50] Lloyd George complained bitterly to the colleagues who had berated him the previous day that Churchill had now ‘repudiated any possibility of a guarantee by the Admiralty.’ Churchill’s letter, the Chancellor declared, ‘justifies all your doubts of Winston’s sincerity. I was defending it and almost at that very moment he was writing this letter, which fully upholds your contentions and fears.’ But Lloyd George’s own performance did not convince his colleagues either, who found ‘no new reason to trust Winston’s ability to reduce estimates, nor Ll. G.’s sincerity in asking for reduction.’[51]

While, during a further series of stormy Cabinet debates late in January, Churchill was implored to examine the estimates yet again for any further reductions which could be made, it was Asquith’s threat of dissolution which galvanised the Cabinet. The suggestion that two of the capital ships should be dropped was no longer made. Instead, the ‘strong protests’ made by Lloyd George, Lord Beauchamp, Sir John Simon, Herbert Samuel and others, were ‘directed not so much to the programme of new construction, as to the growing cost of maintenance, which has risen no less than 25 per cent in 3 years.’ Agreement was eventually reached ‘that large economies might be, & ought to be, made under this law’, while Lloyd George

pressed specially for a definite pledge of substantial reduction in 1915-16. He pointed out that according to his present forecast the Revenue in 1914-15 would show an increase of about 3½ millions, while the Expenditure (putting the Navy at 52,800,000) would grow by over 12 millions, leaving an adverse balance of about 9 millions which must be met by new taxation. He had no hope of being able to commend such taxation to the House of Commons, unless he could assure them that in the following year (1915-16) the bulk of the proceeds could be devoted to Education & the relief of local rates.

The discussion commenced anew, and ‘all the principal items in the Estimates were exhaustively reviewed’, without, it would seem a definite pledge being made by the First Lord. Asquith, his patience now exhausted, again warned ‘his colleagues of the disastrous consequences of a split on such an issue, [and] suggested that the First Lord should examine again the chief [items] of the charge for maintenance’ before the Cabinet met for the final consideration of the Estimates, on the following Tuesday, 3 February.[52]

Having achieved the desired effect, Asquith wrote to Churchill on 1 February that ‘Very largely in deference to my appeal, the critical pack (who know well that they have behind them a large body of party opinion) have slackened their pursuit. I think that you on your side, should … show a corresponding disposition, and throw a baby or two out of the sledge.’[53] Indicative of the supposition that Churchill was not wholly committed to future reductions, the First Lord was disinclined to grant any concession. ‘I see absolutely no hope of further reductions in the cost of maintenance & upkeep’, Churchill informed Asquith the day before the next meeting of the Cabinet. ‘The number of ships in commission’, he insisted, ‘is not I am sure susceptible of appreciable reduction … The prognosis of 1915-16 is bad.’[54]

Despite his private opinion to Asquith that submarines could be used in the Mediterranean to ‘obviate further construction of battleships for this secondary theatre’, Churchill again played the Mediterranean card by circulating on 6 February a memorandum concentrating on the gravity of the situation which would arise in 1916. The Admiralty had earlier learned, by way of a translation of the Austrian Zeit of 15 December 1913, that the Marine Commandant, Admiral Haus, had laid before the Ministerial Council plans for a new naval programme for the financial year 1914-15, the main feature of which would be the construction of four super-dreadnoughts.[55] There were also renewed indications of increased Italian building.[56] By the acceleration of the British programme which had been approved by the Cabinet in June 1913 the position had been secured up to the end of the first quarter of 1916 but only in the absence of any fresh Austrian or Italian building which Churchill now clearly suspected was taking place. This caused him to outline three courses to the Cabinet:

1                     To begin two ships of the 1914-15 programme early enough to have them ready by the second quarter of 1916. This is the course the Admiralty recommend.

2                     To repudiate the 50 per cent standard (3 to 2) in Home waters. This would be a grave step.

3                     To rescind the decision to maintain a one-Power standard in the Mediterranean. If this were decided on, the emergency to meet which the Canadian ships were required is of course removed. It would be necessary that Parliament and Canada should be officially informed of the reversal of policy.

‘In the existing circumstances,’ Churchill declared, ‘the Admiralty consider that it is necessary to lay down 2 ships of the 1914-15 programme as early as possible’. Such a course, he argued, would have many advantages, and cause ‘no extra charge to the taxpayer’, whereas not ‘to take this course would involve a departure from standards under which we are now working or a reversal of the Cabinet decision about the Mediterranean. It would destroy the whole basis on which Mr. Borden has hitherto acted, and in all probability lose at once and altogether the 3 ships which the Canadian Government are seeking to provide to meet the emergency which they have been assured exists’.

I do not here dwell [Churchill continued] upon the accusations of breaking pledges and breaking faith which would certainly be capable of being strongly maintained in the House of Commons. If the Opposition were to take this view, they would have no difficulty in justifying a solid vote against the naval estimates as a whole, even if those estimates were presented by the present Board of Admiralty … By adopting the course which the Admiralty recommend, the Mediterranean position will be secured until the end of the first quarter of 1917. Twelve months will be given to Mr. Borden in which to renew his proposals — he has stated that he is confident he can do so within that period. If he does so and succeeds, the great resulting addition to British naval strength would, in the absence of fresh developments elsewhere, justify a retardation of the battleships of the 1915-16 programme at least equivalent to the accelerations of the two previous years. If he does not do so, or tries and fails, the Mediterranean position after the first quarter of 1917 could, in the absence of fresh Austrian or Italian building, be safeguarded for another twelve months by the acceleration of one ship of the 1915-16 programme. It is also possible that by that time the progress of naval science, particularly in regard to submarine construction, may enable a new view to be taken of the naval situation as a whole. The Cabinet, therefore, would not be committed by taking the Admiralty advice on the present occasion to the construction of three additional units in the programme of 1914-15 should Canada again make default.[57]

This was the first intimation that comparative dreadnought numbers would, in future, not be the sole criterion in adjudging naval strength. However, if Churchill was serious about the so-called ‘substitution’ policy, this would have been the time to refer to it specifically; instead he would only hold out the hope that ‘the progress of naval science’ may have advanced far enough to take a different line when the 1915-16 Estimates came to be debated. A further indication of Churchill’s thinking was his increasing reluctance to treat the Italians as a serious threat. Certainly, his minute to Battenberg of 14 January referred only to Austria, despite the fact that, on the Admiralty’s own calculations, the one-Power Mediterranean standard should have applied to Italy which would, in 1916, have six dreadnoughts available as opposed to four Austrian. The other feature not commented upon by Churchill, in his anxiety to avoid reference to a commitment, was the growing strength of the French Navy. Whether Churchill liked it or not, a joint Anglo-French Mediterranean naval policy did exist and, by the summer of 1914, the four French dreadnoughts of the Courbet class would be completed, to add another factor to the Mediterranean naval equation. Churchill’s memorandum concluded by outlining possible savings:

I am deeply sensible of the heavy cost which an unusual combination of circumstances throws upon the coming year, and have endeavoured to reduce it by every means other than those which would merely transfer an equal burden to 1915-16. The following arrangements are proposed as the result of my final survey. It must, however, be distinctly understood that they, as well as the other technical measures I have at various times indicated to the Cabinet, can only be adopted with the concurrence of the Board of Admiralty as a whole. If a decision is taken to acquire control of the Anglo-Persian oilfields it would be justifiable, in view of Admiral Slade’s report, to review the whole question of oil reserves so as to attain the full reserve at a somewhat later date than was previously thought necessary. This would enable inter alia the purchase of 114,000 tons of oil now included in the estimates of 1914-15 to be postponed, and those estimates to be relieved by 450,000l. without a consequential addition to the charges of 1915-16. I have already undertaken, in conjunction with the Secretary of State for War, to reduce the estimate for the Naval Air Service by a further 120,000l. It may be found possible, as a result of fresh scientific enquiries into the life of the boilers, to reduce the expenditure on large refits in 1914-15 by 150,000l. By retarding the provision of shrapnel shell and anti-aircraft guns, Vote 9 could, if the Board assented, be reduced by a further 100,000l. By reducing the number of the patrol flotillas, by restricting their movements, and by reducing and partially immobilising their depot ships, it may be found possible to save another 100,000l. on maintenance under various headings. The total reduction from all these causes would, if they became effective, amount to 920,000l. The Estimates of 1914-15 could then he presented at 51,580,000l., without the prospect of 1915-16 being further impaired.[58]

This was the greatest concession Churchill would make; it was enough. Churchill had won; the Radicals had no fight left in them.

Whether Lloyd George believed in Churchill’s pledge or not, Churchill himself subsequently recounted that the actual cause of Lloyd George’s conversion was the result of the intervention of the Chancellor’s wife, who told him: ‘You know, my dear, I never interfere in politics; but they say you are having an argument with that nice Mr Churchill about building Dreadnoughts. Of course I don’t understand these things, but I should have thought it would be better to have too many rather than too few.’ And this was apparently enough to convince Lloyd George.[59] It should be borne in mind that the Chancellor’s wife, however great her actual influence, was only echoing public opinion. As the Military Correspondent of The Times pointed out:

When the Estimates come before the House of Commons the difficulty of the First Lord will be, not to excuse strength, but to reconcile in the eyes of the country a programme of four ships with his past assurances, with those of his colleagues, and with the ascertained facts of the general naval situation. The Canadian ships have gone. The decline of our pre-Dreadnoughts proceeds at accelerated speed, and has not been balanced, as we were assured it should be balanced, by any increase of Dreadnought superiority. Opinions differ concerning the value of the Dreadnought type, but we cannot do without these ships while our rivals are building them … The Dreadnought may be a passing type which will not stand the rough test of war, but, like the Maria Theresa dollar among some savage tribes, it is the current coin of confidence, and it remains the accepted token when diplomatists exchange ideas … [60]

As shown above, Churchill had privately informed Asquith in December 1913 that, if Borden failed, he would ‘develop an argument’ six months hence that submarines would suffice to obviate the need for further battleship construction for the Mediterranean. Now that Borden had failed, Churchill was prepared – if he could get away with it – to argue that a further acceleration was necessary. The Mediterranean situation was becoming for the First Lord a useful tool which, in his expert hands, could be utilized to further whatever particular argument Churchill wanted to put forward. So the “emergency” in the Mediterranean had provided the perfect opportunity to extract a commitment to Imperial Defence from Canada; when Borden failed to deliver, the “emergency” could justify an acceleration of the building programme; if this were delayed, or if even further increases appeared to be necessary, Churchill could renounce the battleship in favour of the submarine; if he did manage to extract the battleships he wanted from his unwilling colleagues but the situation against Austria still remained doubtful two King Edward class pre-dreadnoughts could be dispatched as a last resort.

Having secured victory for the principal plank of his programme — four capital ships — Churchill accepted Asquith’s advice to ‘throw a baby or two out of the sledge’ and agreed to a compromise of sorts on 11 February whereby four light cruisers were dropped from the 1914-15 programme and some smaller concessions made; nevertheless the result was a victory for the First Lord. ‘I hope’, Churchill informed Battenberg on 13 February, ‘that an agreement will be reached this morning at the Board on the outstanding points. The position is that the Cabinet have decided that the Cruiser programme should not exceed 4 vessels and have expressed a wish that the increase of men should be reduced from 5,000 to 4,000. I have not given my final adhesion to either proposal but, having some information on these subjects, I am bound to say that I consider both propositions reasonable. So far as manning is concerned I am not and have not for some time been satisfied that a sufficient effort has been made to reduce requirements which are of small military consequence or to maintain a proper flow of older vessels to the Third Fleet and to the Material reserve. This subject will require detailed examination during the next few months’.[61]

The First Lord introduced the Estimates in the Commons on 17 March in a long speech which met with a mixed reaction in the Press, though in the House it was a different matter: ‘those Navy Estimates,’ Asquith wrote earlier in the day, ‘with all the memories which cluster around their cradle, promise to go through on oiled castors, with hardly a murmur of protest.’[62] The Prime Minister, suffering from a slight cold, absented himself from the House; indeed, the only Government Minister sharing the front bench with Churchill was Lloyd George. The new programme, Churchill declared, was ‘in every respect normal — four battleships, four cruisers, 12 destroyers, a large number of submarines, the usual subsidiary craft, and the seaplane ship. Three of the battleships will be in principle Royal Sovereigns, completing, with the five now under construction, another homogenous squadron of eight vessels. The fourth battleship will be a faster vessel of the Queen Elizabeth type, and will burn oil only. All these ships will be armed with 15in. guns and a heavy and numerous anti-torpedo-boat armament …’ And what of the submarine hazard? The recent manoeuvres had demonstrated that ‘the great dangers from submarines will not be in the open sea but when they are returning to their harbour to fuel’.

The Admiralty’s submarine programme was, in Churchill’s opinion, ‘large enough in view of our effective lead in this type of vessel, but further effort will be required in the near future on account of what is going on elsewhere.’ Nevertheless, the Admiralty were ‘increasingly convinced of the power of the submarine and the decisive part which this weapon, aided perhaps in some respects by the seaplane, may play in the naval warfare of the future. It is sufficient at the moment to say that the whole system of computing naval strength are brought under review by the ever-growing power, radius, and seaworthiness of the submarine and by the increasing range and accuracy of its fatal torpedoes.’ Eventually, Churchill postulated, a limit would be reached in the construction of ever more powerful dreadnoughts:

I have one consoling observation to make for those who eye the monster ship with disfavour. The offensive power of modern battleships is out of all proportion to their defensive power … If you want to take a true picture in your mind of a battle between great modern ironclad ships you must not think of it as if it were two men in armour striking at each other with heavy swords. It is more like a battle between two eggshells striking each other with hammers. (Laughter.) In the light of that illustration the awful importance of good gunnery must come home to us. The importance of hitting first and hitting hardest, and keeping on hitting, and the necessity of spending money in arriving at the highest possible efficiency in that respect, really needs no clearer proof. But that fact also, I think, suggests doubts as to whether this form of warfare between these enormous ships is not now approaching its culminating phase.

Churchill then explained how the failure of the Canadian Naval Aid Bill obliged the Cabinet to adopt the expedient of acceleration. Two ships of the 1914 programme would be completed ‘at the earliest possible moment so as to have them ready in the third quarter of 1916. (Hear, hear.) Orders to this effect will be given as soon as the House has approved of these Estimates’. Even so, the First Lord still believed that there were ‘good prospects that the unfortunate deadlock which has arisen in Canada upon this Navy question will be relieved and that in one way or another, or by one party or the other, or, best of all, by the joint action of both parties, Canada will be able to take some share in her own naval defence and in the common defence of the Empire.’[63] Churchill had silenced the opposition and had also issued a challenge which the German Navy Office could not take up. The financial constraints which had caused Churchill so much difficulty were as nothing compared to those facing Tirpitz. The whole foundation of Germany’s naval policy — the ‘risk’ principle — was in danger of floundering. Aware that funds would not be forthcoming so long as Bethmann Hollweg remained Chancellor, a despondent Tirpitz even contemplated a reduction of the German ship-building tempo.[64]

As far as German observers were concerned, the intense debates on the Mediterranean situation were a blind. Following the Commons’ debates on the 1914-15 Estimates the German Naval Attaché in London reported that ‘the strategical importance of England’s position in the Mediterranean against Germany is being on the whole much exaggerated. It is a fiction kept up for the sake of naval agitation. In a war between England and Germany the main theatre is in the North.’ Captain von Müller believed that with the ‘present constellation of Powers’ the strength of Britain’s position in the Mediterranean was not as important to her strategically as it was perpetually being represented and that the increase being agitated for had, in reality, ‘at bottom quite different political-strategic reasons, which come under the trade-mark of “strengthening political influence and prestige on the spot”.’[65] How much validity there was in this charge would soon become apparent.  

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