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“A Needless Sacrifice”: British Businessmen and Business As Usual in the First World War*

Published online by Cambridge University Press:  11 July 2014

John McDermott
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Extract

The First World War ended Great Britain's nineteenth-century world economic supremacy, which had been steadily eroded in the decades before 1914. Within Britain, the war also changed the way in which individuals carried on business, the attitudes of the business community toward government, the government's own policies toward trade and traders, and public opinion on these matters, as reflected in the press. Although it is far too simplistic to claim that the war spelled the end of laissez-faire in Britain, state control of the economy did increase in a country whose economic culture was based on free trade and minimal government interference in business. Moreover, before 1914 Britain had to export to pay its way in the world, and its economy, more than that of any other great power, depended upon peace for prosperity. In this setting, Germany was the biggest European customer for British exports, as well as being the source of vital imports, such as aniline dyes, optical, and electrical goods. Thus the application of economic warfare against Germany and its allies deeply affected the British economy and businessmen who were suddenly forced by official edict to relinquish a traditional market in patriotic support of their government's blockade of the German Empire.

Type
Research Article
Information
Albion , Volume 21 , Issue 2 , Summer 1989 , pp. 263 - 282
Copyright
Copyright © North American Conference on British Studies 1989

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Footnotes

*

I am much indebted to the Social Sciences and Humanities Research Council of Canada for a research grant in support of this project. I am also grateful to Professors Victor Batzel and David Burley of the University of Winnipeg for their encouragement.

References

1 For discussion of these issues in a wider setting, see Kennedy, Paul M., “Strategy versus Finance in Twentieth-Century Britain,” in Strategy and Diplomacy 1870–1945 (London, 1983)Google Scholar. For Anglo-German trade relations, see idem, The Rise of the Anglo-German Antagonism 1860–1914 (London, 1980), pp. 291–305, and Steiner, Z. S., Britain and the Origins of the First World War (London, 1977), pp. 59–68CrossRefGoogle Scholar. The standard older work on the subject is Hoffman, R. J. S., Great Britain and the German Trade Rivalry, 1875–1914 (Philadelphia, 1933).Google Scholar

2 See McDermott, John, “Total War and the Merchant State: Aspects of British Economic Warfare against Germany, 1914–16,” Canadian Journal of History 21 (April 1986): 61–76.CrossRefGoogle Scholar

3 Boswell, Jonathan S. and Johns, Bruce R., “Patriots and Profiteers? British Businessmen and the First World War,” Journal of European Economic History 11 (1982): 423–45Google Scholar. Some modern works on economic warfare include: Siney, Marion C., The Allied Blockade of Germany 1914–1916 (Ann Arbor, 1957)Google Scholar; Z. S. Steiner, “The Foreign Office and the War,” and Marsden, Arthur, “The Blockade,” in Hinsley, F. H., ed., British Foreign Policy under Sir Edward Grey (Cambridge, 1977)Google Scholar; French, David, British Economic and Strategic Planning 1905–1915 (London, 1982)Google Scholar; and Burk, Kathleen, ed., War and the State: the Transformation of British Government, 1914–1919 (London, 1982)Google Scholar. Recent articles on specialized subjects include: Burk, Kathleen, “The Diplomacy of Finance: British Financial Missions to the United States 1914–1918,” Historical Journal 22 (1979): 351–72CrossRefGoogle Scholar, and McKercher, B. J. C. and Neilson, Keith E., “‘The Triumph of Unarmed Forces’: Sweden and the Allied Blockade of Germany, 1914–1917,” The Journal of Strategic Studies 7, 2 (June 1984): 178–99.CrossRefGoogle Scholar

4 Steiner, , “The Foreign Office and the War,” p. 528.Google Scholar

5 French, , British Economic and Strategic Planning, p. 64.Google Scholar

6 Marsden, , “The Blockade,” p. 489.Google ScholarPubMed

7 See French, , British Economic and Strategic Planning, pp. 23, 74–76.Google Scholar

8 Money, L. Chiozza, “British Trade and the War,” Contemporary Review 106 (July-Dec. 1914): 482Google Scholar. Money later joined the Ministry of Munitions under Lloyd George and played a significant role in hammering out economic warfare policy during 1916.

9 “Maintenance of Trade and Industry,” The Chamber of Commerce Journal, September 1914 [hereafter cited as CCJ].

10 “The Capture of Enemy Trade,” by Runciman, 31-12-14, PRO, Cab. 37/122/198.

11 Ilersic, A. R. and Liddle, P. F. D., Parliament of Commerce: the Story of the Association of British Chambers of Commerce, 1860–1960 (London, 1960), pp. 11, 140–41, and 171–72Google Scholar. See particularly chapter 15, “1914–1918: War and the Association.”

12 “Maintenance of Trade and Industry,” September 1914, CCJ.

13 The War and Commerce,” October 1914, CCJ.

14 “Competition with German and Austro-Hungarian Trade,” October 1914, CCJ.

15 For a detailed discussion of these events and the government's emergency measures, see French, , British Economic and Strategic Planning, pp. 90–95.Google Scholar

16 “Paish Memorandum, August 1914,” 6 Aug. 1914, PRO, T172/183.

17 “Continuance of the Moratorium. Deputation from Delegates of Chambers of Commerce to The Chancellor of the Exchequer,” 14 Sept. 1914, [“Transcript from the Shorthand Notes of F. Primrose Stevenson.…”], PRO, T172/131. The delegates were not unanimous about lifting the moratorium immediately: Manchester was against having it end, since apparently Manchester merchants wanted to preserve their capital for business to which the moratorium was not applicable; other chambers wanted an immediate end to it; others, like Liverpool, Newcastle, and Sheffield, were split. The moratorium was lifted on November 4, after which date foreign trade began to revive (French, , British Economic and Strategic Planning, p. 94Google Scholar).

18 Letter: Edwin Butterworth & Co., Manchester, to Board of Trade, 20 Jan. 1915, PRO, BT 12/104.

19 Letter: Boardman Bros., Manchester, to Board of Trade, 11 Feb. 1915, ibid.

20 Letter: Holland and Sherry to Board to Trade, 20 Feb. 1915, ibid.

21 “Memorial by the Aberfeldy Farmers Club, to the Right Honourable The President of the Board of Trade,” 5 Nov. 1914, PRO, BT 12/105.

22 H. Fountain (Board of Trade) to Secretary, Chamber of Commerce and Manufacturers, Glasgow, 3 Feb. 1915, ibid. An amusing irony occurred in this issue a few months later. A Scottish M.P. approached the Board of Trade with the news that his constituents had accepted a “very big Russian cloth contract but find themselves much hampered by the lack of black-faced wool which is being shipped in large quantities to America.” He sought means of stopping or limiting exports while Scottish manufactures were short of wool! (Donald Maclean to Pretyman, 25 Nov. 1915, PRO, BT 12/104).

23 “City Notes. The Export Difficulty,” The Times, 12 Aug. 1915.

24 “City Notes. The Red Tape Check on Exports,” ibid., 23 Aug. 1915.

25 “The Export Muddle,” ibid., 21 Aug. 1915.

26 Davis, H. W. C., History of the Blockade (London, 1921), p. 121.Google ScholarPubMed

27 The Times, 14 Feb. 1915.

28 Confidential Memorandum, “Further Correspondence respecting Trading with the Enemy,” “Part III.” 23 Feb. 1917, PRO, FO 551/11.

29 Annual Trade Review, Special Supplement to the Chambers of Commerce Journal, January 1915.

30 President's Address at the annual general meeting of the London Chamber of Commerce, CCJ, May 1915.

31 “Finance,” CCJ, March 1915. All was not doom and gloom in the business community, however. The same issue of the Journal noted that the rate of unemployment, a concern of the businessmen at the beginning of the war, was “wonderfully little.”

32 President's Address, CCJ, May 1915.

33 “Report on the Opening of the War,” by Hankey, , 1 Nov. 1914, PRO, Cab. 17/102B.Google Scholar

34 “Further Correspondence respecting Trading with the Enemy,” Part III, No. 1. Memorandum. Home Office and the Blockade, 23 Feb. 1917, PRO, FO 551/11.

35 “Memorandum by Mr. A. R. Kennedy. Enemy Comforts. III.—Tea and Tobacco.” 12 July 1916, PRO, FO 899/11.

36 “Memorandum by Mr. A. R. Kennedy. Enemy Comforts. I.—Cocoa.” 10 July 1916, PRO, Cab. 39/32.

37 “Memorandum by Mr. A. R. Kennedy. Enemy Comforts. II.—Coffee.” 10 July 1916, PRO, Cab. 39/32.

38 “Further Correspondence respecting Trading with the Enemy,” Part III, No. 1. Memorandum. Home Office and the Blockade, 23 Feb. 1917, PRO, FO 551/11.

39 Board of Trade announcement, 28 Feb. 1915, in CCJ, April 1915.

40 Ibid.

41 Marsden, Arthur, “The Blockade,” p. 502.Google ScholarPubMed

42 Minute by Crowe, 9 Mar. 1915, PRO, FO382/185.

43 Montagu to Asquith, 3 July 1915, Bodleian, Asquith Papers, I, 14.

44 “Trading with the Enemy,” CCJ, July 1915.

45 Runciman to Hopwood, 6 May 1915, PRO, FO 382/223. Then Rotterdam was an entrepôt for trade in scarce products much as it was to be with oil during the shortages of the 1970s.

46 “City Notes. The Red Tape Check on Exports,” The Times, 23 Aug. 1915.

47 “Our Blockade Policy and the Value of Economic Pressure to Germany,” Letter to the Editor, from “Acceptor,” The Economist, 24 July 1915. The editor noted as well: “Our correspondent's argument deserves the attention of those who control British policy.”

48 “British Trade and the War,” CCJ, September 1915.

49 Montagu to Asquith, 3 July 1915, Bodleian, Asquith Papers, I, 14.

50 “How Our Export Trade is Hindered. A Story of Official Ineptitude.” Morning Post, 23 Nov. 1915.

51 “The Financial Situation,” by Kitchener, printed for the Cabinet, 27 July 1915, Bodleian, Asquith Papers, 117.

52 McDermott, , “Total War and the Merchant State,” p. 67.Google Scholar

53 “Memorandum by Mr. A. R. Kennedy. Enemy Comforts. II.—Coffee,” 10 July 1916, PRO., Cab. 39/32.

54 Minutes: 42nd meeting W.T.A.C., 20 July 1916, PRO, Cab. 39/31.

55 “Government Control of Trade. Report of the Merchant's Committee of the London Chamber of Commerce,” 12 July 1917, PRO, BT 13/78/E32919. Although dated July 1917, during the Battle of Passchendaele, there is no sense in this document of an overriding imperative about solidarity in the midst of total war.

56 Memorandum by Mr. J. B. Ball, Board of Trade, 21 July 1917, ibid.

57 “Further Correspondence respecting Trading with the Enemy,” 23 Feb. 1917, PRO, FO 551/11.

58 Boswell, and Johns, , “Patriots or Profiteers? British Businessmen and the First World War,” p. 445.Google Scholar

59 By late 1915 and early 1916, the press, led by Lord Northcliffe's other newspaper, The Daily Mail, conducted a tenacious campaign accusing the government of feeding the Germans by allowing food-stuffs to pour into the neutral ports, from whence they were shipped to the enemy. Of course this was inconsistent with The Times's campaign against the government's regulation of trade.

60 Boswell, and Johns, , “Patriots or Profiteers? British Businessmen and the First World War,” p. 423.Google Scholar