He said that there had been much tendency to misinterpret in both
countries, but that things were now better. I might take it that our
precision about the Entente with France, and our desire to rest firmly
on the arrangement we had made, were understood in Germany, and that it
was realized that we were not likely to be able to build up anything
with his own country which did not rest on this basis. But he thought,
and the Emperor agreed, that the Entente was no hindrance to all that
was necessary between Germany and England, which was not an alliance but
a thoroughly good business understanding. Some day we might come into
conflict, if care were not taken; but if care was taken, there was no
need of apprehension.

I said that I believed this to be Sir Edward Grey's view also, and that
he was anxious to communicate with the German Government beforehand
whenever there was a chance of German interests being touched.

He went on to speak of the approaching Hague Conference, and of the
difficulty Germany would have if asked to alter the proportion of her
army to her population--a proportion which rested on a fundamental law.
For Germany alone to object to disarmament would be to put herself in a
hole, and it would be a friendly act if we could devise some way out of
a definite vote on reduction. Germany might well enter a conference to
record and emphasize the improvement all round in international
relations, the desirability of further developing this improvement, and
the hope that with it the growth of armaments would cease. But he was
afraid of the kind of initiative which might come from America. The
United States had no sympathy with European military and naval
difficulties.