(3) With reference to point (c) of the above explanations, I have the honour to inform you that Her Majesty`s Government in the United Kingdom has taken note of the reservation and has recognised it in the law established therein, while maintaining the ratio of 35:100 in arrears of a contrary agreement between the two governments. Due to the length of time required to build warships and the short duration of the agreement, its effect was limited. Experts from the German and British navy estimated that the first year Germany could reach the 35% limit was 1942.  In practice, the absence of shipbuilding land, construction problems, the shortage of skilled labour and the lack of foreign exchange in the purchase of necessary raw materials slowed down the reconstruction of the German Navy. A lack of steel and non-ferrous metals, caused by the fact that the navy was the third highest in German armaments behind the army and air force, meant that the navy (as the German navy had been renamed in 1935) was still far from the 35% limit when Hitler lifted the agreement in 1939.  Until 1938, the Germans had only the advantage of threatening to renounce the agreement, to pressure London to accept continental Europe as Germany`s legitimate sphere of influence.  At a meeting on April 16, 1938 between Sir Nevile Henderson, the British ambassador to Germany, and Hermann Goering, the latter stated that he had never been appreciated in England and bitterly regretted that Mr. Hitler had ever given his consent at the time, without obtaining anything in his favor. This was a mistake, but Germany would not remain in a state of inferiority vis-à-vis a hostile Britain and would rely on a 100% basis.  At the Munich Conference that led to the Munich Agreement in September 1938, Hitler informed Neville Chamberlain that while the UK`s policy was to “clarify under certain circumstances” that the UK could intervene in a European continental war, the political terms of the agreement no longer existed and Germany would have to denounce it.
This is how Chamberlain mentioned it in the Anglo-German declaration of September 30, 1938.  (e) If and as long as other major maritime powers retain a single category of cruisers and destroyers, Germany is entitled to have a single category for these two categories of ships, whereas it would prefer to see these classes in two categories. In November 1934, the Germans formally informed the United Kingdom of their wish to conclude a contract with the United Kingdom under which the Imperial Navy could grow to 35% of the Royal Navy. . . .