Extract from report by A J Dawson, director of Vickers, 3 May 1909. Crown copyright. Reference: McKenna Papers, MCKN 3/14/19 B

"In very high circles in Germany it is considered to be a question of national existence to possess large and useful colonies for the emigration of the constantly increasing population of the country and for the purpose of creating markets for German exports. The best Colonies in the world are in the hands of England, and the only means of obtaining colonies is to take them from England. This idea is a most popular one in Germany and gains ground every day.

The plan of action, from a German point of view, is to win a second Trafalgar against England in order to be able to land in England the powerful German Army and dictate conditions from London as they did in 1870 from Paris.

To build 50 Dreadnoughts in five years is a matter of little moment to Germany from an industrial point of view, the only difficulty being a financial one, but allowing the cost of each Battleship to be £2,000,000, the total cost will be £100,000,000. If we double this figure to allow for general charges, equipment, target preparations, etc. we get £200,000,000, which is not a very important sum of money for the object in view, because Germany well knows that by the defeat of the British Navy she could have this money provided in the form of a war indemnity, and the possession of English Colonies would well compensate her for the money expended, in the same way as she obtained compensation in 1871 from France."