Nicholas A. Lambert
Copyright Date: 2012
Published by: Harvard University Press
Pages: 662
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  • Book Info
    Book Description:

    Before World War I, the British Admiralty conceived a plan to win rapid victory over Germany—economic warfare on an unprecedented scale. The secret strategy called for the state to exploit Britain's monopolies in banking, communications, and shipping to create an implosion of the world economic system. The plan was never fully implemented.

    eISBN: 978-0-674-06306-8
    Subjects: History, Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. [Map]
    (pp. ix-x)
  4. Introduction
    (pp. 1-16)

    This book offers a radical reinterpretation of the nature and significance of the relationship between economics and sea power before and during the First World War. It focuses on Great Britain’s development of a novel and highly sophisticated approach to economic coercion in the event of war against Germany. The British scheme rested upon the discernment that the explosive growth of international trade since the late nineteenth century rested substantially upon the creation of the global credit network, whose inevitable dislocation in the event of war could cripple and conceivably collapse national banking systems. The objective of “economic warfare,” as...

  5. The Pre-War, 1901–1914
    • 1 The Emergence of Economic Warfare
      (pp. 19-60)

      On 24 March 1873, George Goschen, the First Lord of the Admiralty, delivered a speech to the House of Commons in which he likened “our naval expenditure” to a “national premium of insurance—words which must be taken to imply insurance against hostile attack; in fact, the insurance of our power and prosperity.”¹ Possession of the largest and most powerful navy in the world not only guaranteed that the British Isles would be safe from invasion, but also safeguarded the nation’s commercial prosperity, upon which her economic strength and therefore world political status depended.² The analogy was apt and easy to...

    • 2 The Envisioning of Economic Warfare
      (pp. 61-101)

      In the aftermath of the 1905 Moroccan Crisis, Captain Charles Ottley resolved that the Admiralty would not again be caught trying to improvise a makeshift strategy when the next diplomatic crisis struck. As we have seen, the Admiralty had encountered considerable resistance to their suggestion that interdiction of German seaborne trade must inflict severe damage upon their economy, possibly sufficient to induce Germany to sue for peace. Opposition to this novel idea had come from within the service as well as outside. Undeniably, the Admiralty had based their proposals less upon calculation than upon an intuitive understanding of how the...

    • 3 The Exposition of Economic Warfare
      (pp. 102-137)

      When Captain Charles Ottley, the director of naval intelligence, arrived at The Hague in mid-June 1907, he was confident in his understanding of economic warfare, based upon nearly two years of study. He believed that in time of war Great Britain could effectively isolate Germany from the global trading system, achieving strategically decisive results. He envisaged the Royal Navy sweeping the German mercantile flag from the high seas and containing her battle fleet within the North Sea; British merchantmen would be induced not to carry, or explicitly prohibited from carrying German trade indirectly via neutral ports. Meanwhile, neutral merchantmen—insufficient in...

    • 4 The Endorsement of Economic Warfare
      (pp. 138-182)

      After the Committee of Imperial Defence (CID) voted to approve the final report of the Military Needs of the Empire subcommittee at the end of July 1909, the prime minister did not reconvene the forum until the following February. Sir Charles Ottley, the CID secretary, understood this “policy of inactivity” was due to the domestic political situation.¹ Asquith was preoccupied with the developing constitutional crisis consequent to the House of Lords’ refusal to pass David Lloyd George’s radical “people’s budget.” This story has been told too many times elsewhere to require reiteration here.² After the House of Lords finally voted...

  6. The Short War, 1914–1915
    • 5 “Incidentally, Armageddon Begins”
      (pp. 185-231)

      Widespread expectation of imminent war between the European powers during the last week of July 1914 generated a financial crisis of unparalleled severity. Though such a shock to the global economic system had been widely anticipated, not least by the Desart Committee, everyone was surprised by the scale of the panic, the speed with which global confidence collapsed, and the magnitude of financial devastation. Historians of the First World War have scrutinized the intricate diplomatic maneuvers in the weeks leading up to hostilities, as well as the political turmoil attending and generated by the decisions to set prewar military preparations...

    • 6 The Problem with Americans
      (pp. 232-278)

      On 24 August 1914, confused reports began trickling across the Channel suggesting that the British Expeditionary Force advancing into Belgium had encountered a vastly stronger German army near the town of Mons and was now in headlong retreat.¹ Since midnight nothing had been heard, and catastrophe was feared. Harcourt noted it was “a grim cabinet” that day.² Confirmation the following morning that the French army was also falling back in disorder prompted Asquith to remark acerbicly that “the French plan of campaign has been badly bungled.”³ In the cabinet, Kitchener ominously forecast that “unless the situation improves greatly in 24...

    • 7 Admiralty Infighting
      (pp. 279-322)

      Two months after the signing of the armistice in November 1918, the new First Lord of the Admiralty, Walter Long, wrote to the head of the Naval Staff Trade Division, Captain Alan Hotham, asking him to clarify the Navy’s opening moves in the economic campaign against Germany. Hotham replied he could not: “much of the work at that time was done verbally and in conference, and only the conclusions actually arrived at were noted and acted on.”¹ He nevertheless ventured his opinion that, in hindsight, the Admiralty should have adopted “a very much stronger position than it did, or was...

  7. The Long War, 1915–1916
    • 8 Vigorous Indecision
      (pp. 325-370)

      Between Christmas 1914 and the New Year, the British government despaired over the strategic situation. “It is curious how opinion alters in this war,” Lord Emmott, a cabinet minister outside of the inner circle, remarked in his diary on 4 January 1915. “At the moment people here are much more inclined to believe in a long war and to see the difficulties of moving forward in the west.”¹ “The worst of it is,” agreed U.S. ambassador Walter Page, that “no end is in sight. Everybody here expects a long war.”² In the previous chapter, we saw how recognition of stalemate...

    • 9 A Management Problem
      (pp. 371-408)

      In this chapter we shall examine the administrative procedures and machinery put in place to collect, digest, and disseminate the information necessary for monitoring compliance and enforcing the blockade. In so doing we shall demonstrate how dependent the Foreign Office–designed blockade system was upon the injection of vast quantities of information for its operation. We shall see why much necessary information either was not immediately available to administrators or quite often simply did not exist. We shall review how various government departments took a hand in gathering and processing this requisite information. We shall explain why much of the data...

    • 10 The Summer of Discontent
      (pp. 409-450)

      Shortly after the outbreak of war, Andrew Bonar Law, leader of the opposition Conservative-Unionist party, had offered the Liberals a parliamentary truce for the remainder of the calendar year. Asquith had accepted with alacrity. This did not mean—as is sometimes supposed—that the government would not be subjected to parliamentary criticism; it was merely an agreement not to contest by-elections for the anticipated duration of the war. Yet, consciously or not, the truce does seem to have inhibited Bonar Law and his front bench team from pressing the government harder to disclose more details about national strategy instead of passively accepting...

    • 11 The End of the Beginning
      (pp. 451-496)

      As the war entered its second year, expectations in London were running high for a victory at the Dardanelles. On 4 August 1915, the prime minister confided to Sylvia Henley that Kitchener had postponed a trip across the Channel to see the French army commander. “He doesn’t like to leave sooner, as he wants to be here during the Dardanelles crisis, wh[ich] I gather ought to come to an end early in the week. (This is all very secret).”¹ Asquith’s excitement intensified after a letter arrived from Hankey reporting he had reached Gallipoli and found the naval and military commanders...

  8. Conclusions
    (pp. 497-504)

    During the half century before the outbreak of the First World War, technological revolutions in communications, transportation, and financial services facilitated the global spread of market capitalism. The growth and intensification of international commerce had tremendous ramifications for the development of national power and the dynamics of national power relationships. Consequent structural modifications in the functioning of the global trading system produced other changes of great strategic significance. Innovations such as credit financing, freight forwarding, and the growing practice of what later became to be called just-in-time ordering, especially for food, increased commercial flexibility and efficiency and thus lowered economic...

  9. Abbreviations
    (pp. 507-508)
  10. Notes
    (pp. 509-638)
  11. Primary Sources
    (pp. 639-642)
  12. Acknowledgments
    (pp. 643-644)
  13. Index
    (pp. 645-651)