Inter-war arms limitation agreement between the United Kingdom and Germany
The Anglo-German Naval Agreement (AGNA) of 18 June 1935 was a naval agreement between the United Kingdom and Germany regulating the size of the "Kriegsmarine" in relation to the Royal Navy.
The Anglo-German Naval Agreement fixed a ratio whereby the total tonnage of the Kriegsmarine was to be 35% of the total tonnage of the Royal Navy on a permanent basis. It was registered in "League of Nations Treaty Series" on 12 July 1935. The agreement was abrogated by Adolf Hitler on 28 April 1939.
The Anglo-German Naval Agreement was an ambitious attempt on the part of both the British and the Germans to reach better relations, but it ultimately foundered because of conflicting expectations between the two countries. For Germany, the Anglo-German Naval Agreement was intended to mark the beginning of an Anglo-German alliance against France and the Soviet Union, whereas for Britain, the Anglo-German Naval Agreement was to be the beginning of a series of arms limitation agreements that were made to limit German expansionism. The Anglo-German Naval Agreement had been controversial ever since because the 35:100 tonnage ratio allowed Germany the right to build a navy beyond the limits set by the Treaty of Versailles and because London had made the agreement without consulting the French or Italian governments.
Background.
Part V of the 1919 Treaty of Versailles had imposed severe restrictions on the size and capacities of Germany's armed forces. Germany was allowed no submarines, no naval aviation, and only six obsolete pre-dreadnought battleships; the total naval forces allowed to the Germans were six armoured vessels of no more than 10,000 tons displacement, six light cruisers of no more than 6,000 tons displacement, twelve destroyers of no more than 800 tonnes displacement, and twelve torpedo boats.
Through the interwar years German opinion had protested these restrictions as harsh and unjust, and demanded that either all the other states of Europe disarm to German levels, or Germany be allowed to rearm to the level of all the other European states. In Britain, where after 1919 guilt was felt over what was seen as the excessively harsh terms of Versailles, the German claim to "equality" in armaments often met with considerable sympathy. More importantly, every German government of the Weimar Republic was implacably opposed to the terms of Versailles, and given that Germany was potentially Europe's strongest power, from the British perspective it made sense to revise Versailles in Germany's favour as the best way of preserving the peace. The British attitude was well summarised in a Foreign Office memo from 1935 that stated "... from the earliest years following the war it was our policy to eliminate those parts of the Peace Settlement which, as practical people, we knew to be unstable and indefensible".
The change of regime in Germany in 1933 caused alarm in London, but there was considerable uncertainty regarding Hitler's long-term intentions. The Secretary to the Committee of Imperial Defence (CID), Sir Maurice Hankey, visited Germany in August 1933, and wrote a report of his impressions of the "New Germany" that October. His report concluded with the words:
"Are we still dealing with the Hitler of "Mein Kampf", lulling his opponents to sleep with fair words to gain time to arm his people, and looking always to the day when he can throw off the mask and attack Poland? Or is it a new Hitler, who discovered the burden of responsible office, and wants to extricate himself, like many an earlier tyrant from the commitments of his irresponsible days? That is the riddle that has to be solved".
That uncertainty over Hitler's ultimate intentions in foreign policy was to colour much of the British policy towards Germany until 1939.
London Naval Conference.
Equally important as one of the origins of the agreement were the deep cuts made to the Royal Navy after the Washington Naval Conference of 1921–1922 and the London Naval Conference of 1930. The cuts imposed by the two conferences, combined with the effects of the Great Depression, caused the collapse of much of the British shipbuilding industry in the early 1930s. That seriously hindered efforts at British naval rearmament later in the decade, leading the British Admiralty to value treaties with quantitative and qualitative limitations on potential enemies as the best way of ensuring the Royal Navy's sea supremacy. Maiolo argues that it was actually of little importance whether potential enemies placed voluntary limitations on the size and the scale of their navies. In particular, Admiral Sir Ernle Chatfield, the First Sea Lord between 1933 and 1938, came to argue in favour of such treaties. They promised a standardised classification of different warships and discouraged technical innovations, which under existing conditions the Royal Navy could not always hope to match. Chatfield especially wished for the Germans to do away with their "Panzerschiffe" (known in the London press as "pocket battleships"), as such ships, embracing the characteristics of both battleships and cruisers, were dangerous to his vision of a world of regulated warship types and designs. As part of the effort to do away with the "Panzerschiffe", the British Admiralty stated in March 1932 and again in the spring of 1933 that Germany was entitled to "a moral right to some relaxation of the treaty [of Versailles]".
World Disarmament Conference.
In February 1932, the World Disarmament Conference opened in Geneva. Among the most hotly-debated issues at the conference was the German demand for "Gleichberechtigung" ("equality of armaments", abolishing Part V of Versailles) as opposed to the French demand for "sécurité" ("security"), maintaining Part V. The British attempted to play the "honest broker" and sought to seek a compromise between the French claim to "sécurité" and the German claim to "Gleichberechtigung", which in practice meant backing the German claim to rearm beyond Part V, but not allowing the Germans to rearm enough to threaten France. Several of the British compromise proposals along those lines were rejected by both the French and the German delegations as unacceptable.
In September 1932, Germany walked out of the conference and claimed it was impossible to achieve "Gleichberechtigung". By then, the electoral success of the Nazis had alarmed London, and it was felt unless the Weimar Republic could achieve some dramatic foreign policy success, Hitler might come to power. To lure the Germans back to Geneva, after several months of strong diplomatic pressure by London on Paris, all of the other delegations voted for a British-sponsored resolution in December 1932 that would allow for the "theoretical equality of rights in a system which would provide security for all nations". Germany agreed to return to the conference. Thus, before Hitler had become chancellor, it had been accepted that Germany could rearm beyond the limits set by Versailles, but the precise extent of German rearmament was still open to negotiation.
Adolf Hitler.
During the 1920s, Hitler's thinking on foreign policy went through a dramatic change. At the beginning of his political career, Hitler was hostile to Britain and considered it an enemy of the "Reich". However, after the British opposed the French occupation of the Ruhr in 1923, he came to rank Britain as a potential ally. In "Mein Kampf" and even more in its sequel, "Zweites Buch", Hitler strongly criticised the pre-1914 German government for embarking on a naval and colonial challenge to the British Empire and in Hitler's view, needlessly antagonising Britain. In Hitler's view, Britain was a fellow "Aryan" power, whose friendship could be won by a German "renunciation" of naval and colonial ambitions against Britain. In return for such a "renunciation", Hitler expected an Anglo-German alliance directed at France and the Soviet Union and British support for the German efforts to acquire "Lebensraum" in Eastern Europe. As the first step towards the Anglo-German alliance, Hitler had written in "Mein Kampf" of his intention to seek a "sea pact", by which Germany would "renounce" any naval challenge against Britain.
In January 1933, Hitler became the German chancellor. The new government in Germany had inherited a strong negotiating position at Geneva from the previous government of General Kurt von Schleicher. The German strategy was to make idealistic offers of limited rearmament out of the expectation that all such offers would be rejected by the French, which would allow Germany to go on ultimately with the maximum rearmament. The ultranationalism of the Nazi regime had alarmed the French, who put the most minimal possible interpretation of German "theoretical equality" in armaments and thereby played into the German strategy. In October 1933, the Germans again walked out of the conference and stated that everyone else should either disarm to the Versailles level or allow Germany to rearm beyond Versailles. 
Though the Germans never had any serious interest in accepting any of the various compromise proposals of the British, in London, the German walk-out was widely, if erroneously, blamed on French "intransigence". The British government was left with the conviction that opportunities for arms limitation talks with the Germans should no longer be lost because of French "intransigence". Subsequent offers by the British to arrange for the German return to the World Disarmament Conference were sabotaged by the Germans, who put forward proposals that were meant to appeal to the British but to be unacceptable to the French. On 17 April 1934, the last such effort ended with French Foreign Minister Louis Barthou's rejection of the latest German offer as unacceptable in the so-called "Barthou Mote," which ended French participation in the Conference while declaring that France would look after its own security in whatever way was necessary. Meanwhile, Admiral Erich Raeder of the "Reichsmarine" persuaded Hitler of the advantages of ordering two more "Panzerschiffe", and in 1933 advised the Chancellor that Germany would be best off by 1948 with a fleet of three aircraft carriers, 18 cruisers, eight "Panzerschiffe", 48 destroyers and 74 U-boats. Raeder argued to Hitler that Germany needed naval parity with France as a minimum goal, but Hitler from April 1933 onwards expressed a desire for a "Reichsmarine" of 33.3% of the total tonnage of the Royal Navy.
In November 1934, the Germans formally informed the British of their wish to reach a treaty under which the "Reichsmarine" would be allowed to grow until the size of 35% of the Royal Navy. The figure was raised because the phrase of a German goal of "one third of the Royal Navy except in cruisers, destroyers, and submarines" did not sound quite right in speeches. Raeder felt that the 35:100 ratio was unacceptable towards Germany but was overruled by Hitler, who insisted on the 35:100 ratio. Aware of the German desire to expand their Navy beyond Versailles, Admiral Ernle Chatfield repeatedly advised it would be best to reach a naval treaty with Germany so as to regulate the future size and scale of the German navy. The Admiralty described the idea of a 35:100 tonnage ratio between London and Berlin as "the highest that we could accept for any European power", but it advised the government that the earliest that Germany could build a navy to that size was 1942 and the Admiralty would prefer a smaller tonnage ratio than 35:100, but it was still acceptable. In December 1934, a study done by Captain Edward King, Director of the Royal Navy's Plans Division, suggested that the most dangerous form a future German Navy might take, from the British perspective, would be a "Kreuzerkrieg" (Cruiser war) fleet. Captain King argued that "guerre-de-course" German fleet of "Panzerschiffe", cruisers, and U-boats operating in task forces would be dangerous for the Royal Navy, and that a German "balanced fleet" that would be a mirror image of the Royal Navy would be the least dangerous form the German Navy could take. A German "balanced fleet" would have proportionally the same number of battleships, cruisers, destroyers, etc. that the British fleet possessed, and from the British point of view, that would be in the event of war, the easiest German fleet to defeat.
U-boat construction.
Every government of the Weimar Republic had violated Part V of Versailles, but from 1933, the Nazi government became more flagrant and open in violating it. That year, the Germans started to build their first U-boats since World War I, and in April 1935, they launched their first U-boats. On 25 April 1935, the British naval attaché to Germany, Captain Gerard Muirhead-Gould, was officially informed by Captain Leopold