In the spring of 1917 Lloyd George underwent a change of heart and toyed with the idea of a negotiated settlement with Germany. He could see no dramatic changes immediately ahead, nothing to stimulate hope or signal an approaching climax. Gradually, the idea took root in his mind that the defeat of the German army might be either impossible or prohibitively costly to Britain. He began to backpedal from his announced policy of continuing the war until a knockout blow had been delivered. Strangely enough, his interest in considering peace negotiations came only after the United States had entered the fray. But he was told by the experts that the United States would not be able to place significant military forces in the west for at least a year. The unfitness of the French army for further action in 1917, Britain's shrinking manpower, the deadly toll exacted by the enemy's submarine campaign and the precipitous decline of Russia all combined to make it uncertain that the Entente could hold the Germans at bay until the following year.

Anticipating that in the near future his government might be confronted with an instant demand for peace, Lloyd George felt that some attention should be given to defining the nation's war aims. Accordingly, he prepared a statement that he intended to deliver at the initial meeting of the Imperial War Cabinet.