Extracts from a memorandum to Fisher, the First Sea Lord, from A W Bethell, Director of British Naval Intelligence, 22 May 1909.
Crown copyright. Reference: McKenna Papers, MCKN 3/4/24
"Germany by the Fleet Bill of 1900 established a building programme which placed her Navy at the following strength by the year 1920 - 38 battle-ships - 14 armoured cruisers - 38 unarmoured cruisers and 96 destroyers. The age battle-ships were to be replaced was fixed at 28 years from the date of laying down and that of cruisers at 23 years - no period being named for the replacement of destroyers. The 1906 Fleet Bill increased the number of armoured cruisers to 20 by 1920 and the destroyers to 144; it also allotted to the latter an age limit of 12 years.
The 1908 Bill reduced the life of battle-ships by 5 years making the period after which they are to be replaced 23 years from the time of laying down.
It is therefore absolutely incorrect to say the "Dreadnought" caused Germany to set to work on a definite naval programme of its own. As regards the "Dreadnought" or "all big gun battle-ship" type it was the natural development the battle-ship was bound to take, but no doubt it appeared earlier than would otherwise have been the case on account of the Japanese-Russian war. ...Was it not far wiser to be ourselves the pioneers and reap the advantage we gained of at least 2 years start on any one else? But this is not the only advantage we obtained over Germany. We have forced her to spend money she can ill afford on the extra cost of her ships: to spend £11,000,000 and probably more on the enlargement of the Kiel Canal besides large sums at Wilhelmshaven and possibly to build a new Naval base at Brunsbuttel.
And more important than anything we have made it practically certain she will not force a war on us before the completion of the Kiel Canal or at earliest before 1915, unless she fights at a great disadvantage as her Fleet will have to be concentrated on the North Sea side of the Canal as her Dreadnoughts cannot pass through it and we therefore have only one exit to watch for her Fleet to come out."