Chapter Three

Why was there a War?

The Great War was a vast human sacrifice of 20 million human beings, at a cost estimated at 80 billion sterling, and the exhaustion of billions of man hours – often woman hours – of effort in the munitions factories. The end-point was…what? Were the rights of small nations protected? Small nations were overrun, occupied and reoccupied throughout the war. Was authoritarian ‘Prussianism’ defeated? In the 20 years that followed authoritarian governments dominated Europe. Was it, as they said, the ‘war to end all wars’? Just 20 years later all Europe was plunged into another world war, so that the Great War had to be re-named ‘World War One’.

Trying to explain the war was not easy for politicians at the time, or for historians since. That is not because it is complicated. It is because the reasons the war was fought were too shameful to the leaders who pitched us into it. Rather than face the truth of their own complicity, understanding the Great War is wreathed in lies, half-truths and wilful misunderstandings. Underneath those lie the true story of why the war was fought.

The assassination of the Archduke Ferdinand

The first and most obvious explanation for the Great War is that it started with the assassination of the Archduke Ferdinand, in Sarajevo. On this account a teenager, Gavrilo Princip, part of a small guerrilla band hoping to free Bosnia, assassinated Franz Ferdinand, heir to the Habsburg Throne, leading Austria to exact humiliating conditions from the Serbian Government (who were not responsible), provoking the Russian Tsar to threaten to mobilise military action against Austria, which in turn led the German government to threaten action against Russia, but to take it against Russia’s ally France, pre-emptively, marching through Belgium, whose neutrality Britain was committed to defending, leading them to join Russia and France in declaring war against Germany and Austria; in the melee, the Ottoman War Minister Enver Pasha bombarded Russian positions with the help of German battleships, so that war was declared there also.

This improbable sequence of events explains very little, like pushing on a chain. Princip, who lived to see it from his prison cell, was asked how he felt about starting a world war. If I had not done it, the Germans would have found another excuse, the Balkan freedom fighter replied.¹ Princip was right. His crew were only the proximate cause of the war, not its underlying reason; the spark that ignited a powder keg, in a cellar packed with high explosives.

Each step on the march could have led another way if the statesmen, ambassadors, ministers, generals, kings and Caesars had not reacted in the ways they did. Far from being determined to avenge the wrong that Serbia – or the lad Princip, anyway – had committed, ‘it was only rather reluctantly and under German pressure the Austro-Hungarian ministers recommended that the Emperor Franz Joseph finally to sign the order for a general mobilisation on 31 July’ 1914, James Joll explains. So, too, was Russian minister Savonov firmed up in his decision to wage war by the urgent treaties of the French ambassador Paleologue. Germany’s eventual decision to invade through Belgium was made under the firm belief that Britain would stay neutral, as Britain’s Foreign Minister Lord Grey had promised to Prince Lichnowsky, the German ambassador in London.²

The war as ‘a series of unfortunate events’ also downplays the way that the system of treaties locked in a destructive dynamic. At first the Great Powers entered into treaties with one another as a way of trying to control the competitive, anarchic interplay of rival states. These treaties it was hoped would off-set the dangers inherent in an uncontrolled international system. The British ambition was to maintain the balance of power, which really meant to make sure that none of the other states became powerful enough to challenge her. For most of the nineteenth century, Britain was in direct rivalry with France, and allied herself to whichever states were opposed to France – including Germany, whose colonial ambitions in Africa Britain supported. When Germany’s economic might and military sway challenged continental domination, Britain instead allied herself with France.

France, too, allied itself with Russia, as a counterweight to German influence, as Germany’s alliance with Austria, and with Turkey, was intended to balance the threat from France and from Russia. The alliances that were initially sought to contain the conflicts came to have the opposite effect, amplifying the conflicts. ‘Once the governments of Europe came to believe that they were aligned in two rival camps, then the winning of an additional small state to their side seemed to be of great importance,’ wrote historian James Joll: ‘The existence of the alliance system above all conditioned expectations about the form a war would take if it broke out, and about who were likely to be friends and who enemies.’

Alliances were also secretive, as military alliances they were often not open to public scrutiny. Lloyd George remembered that:

There is no more conspicuous example of this kind of suppression of vital information than the way in which military arrangements were entered into with France and were kept from the Cabinet for six years. There is abundant evidence that both the French and Russians regarded these military arrangements as practically tantamount to a commitment on our part to come to the aid of France in the event of her being attacked by Germany…Yet the Cabinet were never informed of these vital arrangements until we were so deeply involved in the details of the military and naval plans that it was too late to repudiate this inference…When in 1912 (six years after they had been entered into) Sir Edward Grey communicated these negotiations and arrangements to the Cabinet the majority of its Members were aghast.³

In a public speech at the Guildhall on 9 November 1914, British Prime Minister Asquith said that the reason that Britain was fighting was to uphold international law and the rights of small nations. But in the Cabinet the war aims were to uphold the balance of power, which is to say Britain’s strategic advantage over her nearest rival: Germany.

One view (historian Christopher Clark’s) is that the statesmen of Europe were ‘sleepwalkers’ going to war by a series of blunders and miscalculations of each other’s intentions and the unforeseen consequences of their own. There is something in that account, but you would have to imagine these sleepwalkers as psychotics, all armed with flamethrowers to get the proper effect. The ‘accidental war’ argument leaves out of account the predisposition to war that is there in those European nations in the summer of 1914, as it had been building up since the later years of the nineteenth century.

Germany’s fault

The other explanation for the war is that it was Germany’s fault. This is the official view of the war as set down in Article 231 of the Versailles Treaty at the end of the war. Article 231 says:

The Allied and Associated Governments affirm and Germany accepts the responsibility of Germany and her allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals have been subjected as a consequence of the war imposed upon them by the aggression of Germany and her allies.

German leaders were made to sign the Versailles Treaty while their country was under occupation, accepting that they and their allies were responsible for the war. The humiliation of the ‘Guilt Clause’ and the reparations that Germans were made to pay to the Entente powers kept the hatred of the Great War burning – right up to the Second World War.

French, British and American leaders hung onto the idea that Germany was solely to blame for the war. After the war there were a lot of soldiers and civilians who were angry at the waste of lives. Keeping the finger pointing at Germany was something that the Entente leaders and presses did to stop people asking questions about their own role.

German people hated the humiliation of Versailles. But later generations of German historians, those working after the Second World War, have come to accept that Germany was guilty for what happened in the 1914-18 war.

In 1961 Fritz Fischer’s book Germany’s Aims in the First World War set out the case that Germany had planned domination of Europe and Africa long before the July Crisis – Germany was responsible for the Great War.

Fischer found lots of evidence that senior German officials, generals and politicians had ambitions and even plans for an aggressive forward policy. The imperialist Paul Rorhbach thought that ‘whether we shall obtain the necessary territorial elbow room to develop as a world power or not without the use of the old recipe of “blood and iron” is anything but certain’ in 1913.⁴ When J. K. O’Connor talked to German officers in East Africa in 1913, ‘it was evident that the possession of the African continent was the greatest desire of the Teutons’.⁵

Fischer, and the historians who followed him, said that the war was less to do with international conflict (‘Aussenpolitik’) and more to do with what was going on in Germany itself (‘Innenpolitik’). The war drive and the grab for world power was part of a reactionary social programme to fend off radical challenges. ‘Obsessed with the fear of revolution’, writes historian Geoff Eley, Wihelmine elites wagered the chances of social cohesion on the prosperity promised by Germany’s national strength in the world economy. At the time of the Morocco crisis in 1911 (when the Kaiser challenged French and British predominance there), Rosa Luxemburg wrote that it ‘shows again the intimate connection of world policy with the internal political conditions in Germany’. She explained that ‘the supreme representation of the German people’, the Reichstag, is completely excluded from the most important and momentous events and decisions’.⁶ When the war began in 1914 and the Social Democrats repudiated their anti-war position, Kaiser Wilhelm celebrated the end of internal debate: ‘I see no parties any more, only Germans.’

The ‘Fischer Thesis’ about the German war drive is good as far as it goes. For German historians and students trying to understand why their government went to war in 1914 it is very useful. But it is not an explanation of why the war happened, any more than the Guilt Clause in the Versailles Treaty was.

When Germany’s Aims in the First World War was translated into English it became a different book. It was no longer a book about how the German elite led the country into war. It was a book about how sole responsibility lay with the Germans. But that was not true. Germany did not wage war alone, nor just with her allies Austria and Turkey. The armies of the Entente Powers – Britain, France, Russia and America – after all, were far greater.

Britain’s war drive

If we look at what was driving Britain in its decision to wage war, all the features of the warlike German elite are there to be found in the British elite, too. If the war was the fault of the German leaders, it was the fault of the British leaders, too. The one difference is that the British Empire already dominated the world, whereas the German Empire was still only a plan.

At the start of the twentieth century the British Empire was in deep trouble. The rebellious Boers had risen up in rebellion against British rule, humiliating the British forces and only succumbing militarily after winning the propaganda war against the Empire. Britain was challenged too by the demands for Irish self-government. The Nationalist Party’s 2000 strong national convention of 1907 rejected the British Government’s modest reforms.

In Britain itself the ruling elite were facing not one but two existential challenges which would change the country forever: the challenge of the unions and the Labour Representation Committee on the one hand, and the challenge of the campaign for Women’s Suffrage on the other. The great wave of strikes in the United Kingdom in 1905 and then again in 1911-13 saw the civil authorities close to losing control. At one point the Home Office minister Winston Churchill had battleships anchored off Liverpool, their guns trained at the strike-bound city. At the same time the ruling Liberal Party was dependent on the votes of Members of Parliament who were sponsored by the Labour Representation Committee – as it was also upon the votes of the Irish Nationalist MPs in Parliament. In 1907 Labour candidates took seats from the Liberals in Jarrow and the Colne Valley, signalling a direct challenge to come.

At the same time the Women’s Suffrage campaigners kept up a sustained mass campaign of protest, barracking ministers in public, disrupting public meetings, attacking churches, West End shopping arcades and post-boxes. Prime Minister Asquith had a hatchet thrown at him in Dublin and Chancellor David Lloyd George’s house was bombed. ‘These harpies are quite capable of burning us out,’ Winston Churchill wrote to his wife, as he had hundreds jailed and force-fed. Suffragette protestors’ civil disobedience jammed the courts, and when jailed they went on hunger strike. British ministers shrunk in horror at the charges of cruelty and cowardice the Suffragettes threw at them at every public meeting.⁷

Faced with all these challenges the ruling British elite struggled to make a convincing case for themselves. Strident imperialism was their most potent public appeal. The Liberal-turned-Unionist Joseph Chamberlain stumped the country whipping up support for ‘Tariff Reform’ – an appeal to strengthen the ties of Empire and protect British industry against German competition. Agriculture was ‘practically destroyed’, ‘sugar has gone, silk has gone, iron is threatened; the turn of cotton will come’, Chamberlain warned. His campaign had the backing of all the big newspapers, the Daily Mail, the Times, the Telegraph and the Express. Protecting British industry against foreign competition was a big concern. Books like Williams’ Made in Germany (1896), Mackenzie’s American Invaders (1902) and A Shadwell’s Industrial Efficiency (1906) warned the public of the problem. A Times editorial of 1902 warned of ‘The Crisis in British Industry’.⁸

Protectionist campaigns against foreign competition also led to racist campaigns against foreign labour. In 1905 the Aliens Act was passed to stop Jewish immigration, at the urging of the British Brothers League and the National Union of Boot and Shoe Operatives. That year there was a great campaign against Chinese labour in South Africa, too. The ‘Khaki election’ of 1900, just after the Boer War, was won by the Conservatives under Lord Salisbury.

British imperialists like Chamberlain, the historian John Seeley, Secretary of State for the Colonies Sir Alfred Milner, Indian Viceroy Lord Curzon all put the case for a strident defence of the Empire against all enemies, and for government by elites. In the wake of the Boer War, Prime Minister Lord Salisbury complained about the democratic limits on waging war: ‘I do not believe in the perfection of the British Constitution as an instrument of war’, he said. Salisbury’s successor, Balfour, set up the Committee for Imperial Defence in 1902 – replacing the Defence Committee of the Cabinet – to get around the niceties of democratic debate.

The Committee for Imperial Defence aimed to integrate the command of all the armed services of Britain and the colonies – ‘the Dominions’ must ‘realize more fully that their security from attack’, said Viscount Esher, ‘is inextricably bound up with the security of Britain’.⁹ The ‘blue water’ policy of depending primarily upon naval supremacy was overturned with a commitment to a British Expeditionary Force in Europe; at the same time the committee yoked the navy to its all big-gun capital ship building programme. The Royal Navy War College was set up in 1900, and in 1904 the old commandership-in-chief of the army was replaced with an Army Council. The British Empire was gearing up for war.

The navy’s capital ships programme was trumpeted in a great propaganda campaign built around the first of the new battleships, the Dreadnought. There was a cult of the Dreadnought, which featured in newspapers, magazines, boys’ comics and adventure stories. The Admiralty had a full press campaign with booklets and press releases. When the Dreadnought visited the Thames in 1909:

there were chaotic scenes at Southend where the flagship was moored. The main pier to the Dreadnought had to be closed again and again because of overcrowding. On the morning of 18 July, an estimated 20,000 people tried to get on to the pier.¹⁰

‘In view of the pan-Germanic aspirations, the British Empire is today confronted by a danger unparalleled in history,’ warned military historian C. Stuart Linton.¹¹ Pro-war journals like Horatio Bottomley’s John Bull and Noel Pemberton Billing’s The Imperialist demanded more Dreadnoughts, and more scholarly journals like the Commonwealth and Empire Review were hardly less jingoistic.

Like the German leaders, the British were glad to see that the declaration of war drowned out – temporarily as it happened – the social conflicts that had been tearing the country apart. Lloyd George recorded ‘in the course of a single day angry political passions were silenced and followed by the just wrath’ of patriotism. Like Germany, Britain’s war drive was a response to ‘innenpolitik’ – the temptation to silence opposition by cranking up the war drive, and to find a new sense of purpose in war. Suffragettes, Irish Nationalists and trade unionists were, for a while anyway, swallowed up by the great cause of waging war. ‘Imperialism is not only a weapon of the ruling class seeking to extend its national domination,’ wrote William Paul: ‘Imperialism is also a weapon of the capitalist class in its endeavour to prolong class rule and subjugate the proletariat.’¹² The politician who did most to push the war was Winston Churchill, who was Lord of the Admiralty. As gloomy as he had been about the strikers, about the Home Rule crisis and about the social unrest in England, his spirits were raised by the war:

I love this war. I know it’s smashing and shattering the lives of thousands every moment – and yet – I can’t help it – I enjoy every second of it.

The arms race and the arms trade

One reason why the Great War has often seemed to have been fated is the arms race. The most arresting side of the arms race was the Naval Arms Race as Germany challenged Britain’s monopoly of sea power.

Retiring from Parliament in 1894 the former Prime Minister Gladstone warned that naval expansion was ‘the greatest and richest sacrifice ever made on the altar of militarism’, and said that, quite apart from the unrestrained spending, ‘I dread the effect which the proposals will have on Europe…the peace of Europe.’¹³

In 1900 Kaiser Wilhelm and Admiral von Tirpitz forced through the Fleet Law expanding the German Navy, and soon they were building their own ‘Dreadnoughts’ – armoured battle ships on the British model. In 1895 the Kaiser had opened the 61-mile-long Kiel Canal opening the way from the naval base on the Baltic Sea to the North Sea, and from 1907 it was widened to make way for the new ‘Dreadnought’ ships. The socialist leader Karl Liebknecht warned that ‘from 1899 to 1906-7 the military budget of Germany alone has grown from about 920 million marks to about 1,300 million, or 40 per cent’. For the workforce, he said, the war drive meant that ‘in Germany at present about 655,000 of the strongest and most capable workers, mostly aged between 20 and 22, are withdrawn from work’. He estimated Europe’s total military expenditure as equal to 15 per cent of world trade in 1907.¹⁴

Anyone who cared to step back and think about the Naval Arms Race could see that there was no limit to the vicious circle, and in Parliament Lord Grey warned about ‘this tremendous expenditure on and rivalry in armaments’. In the long run it would spiral out of control and ‘break civilisation down’ – if the cost did not leave us ‘bleeding to death in time of peace’. On 21 August 1909 the German Chancellor came up with a proposal to limit the Naval Dreadnought race, a ‘Scheme for a general good understanding’. The chief idea was that the Royal Navy would, by agreement, have a built-in superiority in capital ships by the imposition of a ratio of 4:3 in Britain’s favour. Not wishing to be cast as the enemy of peace, Grey pretended to ‘receive with sympathy any propositions on the part of Germany for an understanding’. But he qualified that by saying that it would have to be ‘consistent with the preservation of relations and friendships’ with other powers. In private a Foreign Office mandarin noted that ‘unless we intend to reverse our foreign policy of preserving the equilibrium in Europe we cannot tie our hands in the manner which Germany proposed to us’. Controlling the arms race was at odds with British power politics.¹⁵

Looking back at the causes of the Great War in Washington in 1936, the Special Committee on Investigation of the Munitions Industry, under Senator Gerald Nye, concluded that the war had been provoked by arms manufacturers. Arms manufacturers were well-placed to take advantage of the rising war fever.

Alongside the Naval Arms Race was a great boom in the international arms trade led by Krupp, ‘Schneider, Skoda, Mitsui, Vickers and Armstrong, Putiloff (Russia), Terni and Ansaldo (Italy), and Bethlehem and Du Pont (America)’. The arms merchants were so wedded to money that it did not matter to them who they armed. In 1906 First Lord of the Admiralty Reginald McKenna asked how it was that Krupp’s Kiel shipyards had undertaken to build the Royal Navy eight warships a year.¹⁶

In 1913 German minister Heeringen protested that, ‘it is not the case that I favour private industry’, but, ‘we are dependent upon it’. Government just could not do what private industry can:

On the other hand we cannot give the private firms enough orders to keep them solvent in peace time. Hence they are dependent on private orders. Who gets the advantage of that? Unquestionably the class they support!¹⁷

That same year Sir John Brunner felt some guilt at the success of his chemical company Brunner, Mond and Co. telling the annual meeting that ‘to every sensible man of business the amount of money spent’ on national armaments ‘must be regarded as a great folly’:

These armaments represented an enormous cost to the nations, and the profits accruing from them only went to very few people.¹⁸

Among the very few to profit were Brunner, Mond and Co., who had an operating profit of £225,000 banked. When the war started net profits climbed from £769,343 in 1914 to £1,117,153 in 1917 – so that they could pay 30 per cent dividend. So, too, did the Bleachers Association’s net profits climb from £197,835 in 1915 to £515,583 in 1917.

The British Government raised £3.6 billion in taxes and borrowed a further £7.17 billion to finance the war. Between 1914 and 1920 they spent a massive £11.27 billion – £573 billion in today’s money – to spend on explosives, shells, guns, uniforms, transporting and feeding the army.¹⁹

Nearly half of all the country’s output was given over to waging the war, and the government was spending more than half.

The more far-sighted capitalists, like the Minister of Works Sir Alfred Mond, got jobs in the government, organising war production. Mond was John Brunner’s partner, and plainly had less of a problem with military spending. Within 3 months of Mond’s appointment to the Office of Works:

Seven million pounds were spent on ammunition factories, filling factories and shell stores. Depots costing one million pounds were built, gun and searchlight stations costing a quarter of a million and housing schemes involving almost one million pounds were begun.

‘No better business brain has ever been placed at the disposal of the state,’ Chancellor and later Prime Minister Lloyd George said: ‘we all relied on his great business experience’.²⁰

The arms manufacturer Armstrong enjoyed ‘the great boom of wartime activity in which record profits were made’, according to the historian of the company, Kenneth Warren:

In the two months to 14 May 1914, orders for Elswick Ordinance Works totalled £1.1 million; in the two months to 19 November they were already £4.15 million.

Altogether during the war Armstrong produced over 13,000 guns and 12,000 gun mountings. They made 14,500,000 shells, 18,000,000 fuses, 21,000,000 cartridge cases. Their yards built 47 warships and 22 merchant ships. A total of 583 warships were armed…they made 1075 aircraft [up from six before the war] and three airships. They made 100 of the earliest type of tank.²¹

At the end of the war Sir Max Muspratt of the United Alkali Company boasted that ‘sulphuric acid is of vital importance to the manufacture of high explosives’ and that ‘all the resources of the Company were placed freely at the disposal of the Government’. This was, he said, ‘a course of action followed patriotically by all the other makers who often sacrificed large profits in their own businesses to meet the national need’.²² But who was it that sacrificed large profits? Not the United Alkali Company. Their profits ramped up from £193,604 in 1913 to £355,105 in 1915, so that they could pay an 8.5 per cent dividend to their shareholders and put £75,000 into the reserve. By 1918 United Alkali’s profits after tax were £384,327 and the dividends on the preference shares bumped up to 10 per cent, and 15 per cent on the ordinary shares.

Sir Max was thrilled:

Early in 1916 the production was immense, and the vast accumulation of explosives, which made the big victories on the Somme possible, was the direct result of these efforts. Never for a day was an explosive works held up for want of sulphuric acid.²³

The ‘big victories on the Somme’ recall were more than a million casualties, and more than half of those were on the Entente side, without any significant breakthrough.

Ruston Proctor’s Lincoln engineering firm saw pre-war profits of £51,928 doubled in the war years. Cortaulds’ profits went from £267,669 in 1913 to £1,184,938 in 1918.

‘People have come to regard the giving of money for the prosecution of the War...as a profit-making medium’, editorialised the Glasgow Herald on 27 May 1916. While the Nation projected that, ‘when the War is over...the propertied people men of this country will be several thousand million pounds the wealthier’. (June 1917) This, recall, when people’s living standards were being cut right back. (One business that saw its profits fall was J. Lyons, whose corner-house cafes only prospered when people had money to spend.)

Like British industry, German industry profited greatly from the war. Even before the war Karl Liebknecht pointed out the widespread fraud:

Krupp, Stumm, Ehrhardt, Loewe, Woermann, Tippelkirsch and the corruption that goes with them, the inflated freight and demurrage charges of Woermann, and the net profits of the Powder Ring, amounting to 100 and 150 per cent, which have lightened the German treasury by millions.²⁴

Before the war the big chemical concern BASF had doubled its wage bill to 7.88 million marks between 1900 and 1912. BASF’s great achievement before the war had been the development of the Haber-Bosch process for nitrogen fertilisers, but in 1914 they turned their attention to a more destructive goal: the German army’s desperate need for saltpetre for explosives (which they had previously imported from South America). Promising to synthesise the ingredients – the ‘saltpetre promise’ – they persuaded the government to pay six million marks for a new plant at Oppau. The firm’s capital value jumped from 54 million to 90 million. By 1918, 78 per cent of BASF’s 3331 million marks in sales were war related products. ‘Synthetic nitrates and ammonia alone accounted for half of sales in 1918.’ At their wartime peak, BASF’s gross profits stood at 150 million marks, which were ploughed back into the nitrogen plants.²⁵

BASF scientist Fritz Haber went to Ypres to supervise the first use of gas in April 1915, using a batch of electrolytic chlorine that was surplus when bleaching was suspended as ‘wasteful’. The French and British soldiers were driven out of their trenches to be shot at. Later BASF specialised in more potent poison gases phosgene and diphosgene and eventually mustard gas, which could be made out of by-products from its ammonia plants. Years later BASF’s Carl Bosch wondered whether his wartime efforts ‘had only extended the war pointlessly and increased its misery’.²⁶

Over the course of the war the arms magnate Krupp had made gross profits of 432 million marks. To Gustav Krupp’s indignation a former director, Wilhelm Muhlon, wrote in the April 1918 edition of the American magazine Littell’s Living Age that ‘the destiny of the country and the firm are interwoven, and if Germany falls, Krupps and Kruppism will fall with it’.²⁷

After the war, US Marine Corps General Major Smedley Butler took to the stump to warn his fellow Americans that ‘War is a Racket’ – the title of his 1935 booklet, popularising the findings of the Nye Committee. There he points out that the US Government spent $52 billion fighting the war, before going through the record profits that US companies made out of that spending. DuPont (today Dow) averaged profits of $6 million before the war but averaged $58 million making powder for the US Army during the war – ‘an increase in profits of more than 950 per cent’. Bethlehem Steel jumped from $6 million earnings before the war to $49m during. United States steel jumped from $105m before the war, to $240m during. The copper company Anaconda earned around $10m a year before the war, but $34m a year during.

It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war itself. This expenditure yielded $16,000,000,000 in profits. That is how the 21,000 billionaires and millionaires got that way.²⁸

Eventually the British Government decided that it would have to recover some of the excess profits its industrialists had made from the war with a special tax. In 1919 the estimate of the country’s total excess profits was £3,000,000,000.²⁹ War profiteers like Sir Max Muspratt complained that their profits would be twice as high if they were not paying the excess. Sir Algernon Frith, President of the Association of Chambers of Commerce, protested that the tax would stop businesses from employing people after the war: ‘you are going to cripple us’. Arms manufacturer E. Manville insisted that ‘those excess profits are precisely the thing which they have a legitimate right to’ – especially as they had to suffer loss of profits in peace time. Patriotic colliery owner Edward Hickman threatened that, ‘it will not be worth getting that coal out of the ground, it would be better for it to stop there and wait for better times’. Replying to these ‘very genuine’ complaints, Treasury Secretary Stanley Baldwin agreed that war profiteers needed incentives, and the duties should not get so high as to take away their initiative.³⁰

Employers tried to avoid the excess profits tax. ‘Many people had escaped the excess profits duty,’ the Liberal politician Herbert Samuel told the Manchester and District Bankers Institute, ‘and it was notorious that in spite of it huge sums had been accumulated.’³¹

At the Coal Commission, Inland Revenue inspector Ernest Clarke explained that colliery owners’ profits had climbed from £20.3m in 1914 to £50.5m in 1916, an increase in the return on capital from 12.6 per cent to 33 per cent. Still, owners ploughed the cash back into the business, whose capital grew from £135m to £144.5m rather than pay out on dividends, so disguising their profits. By the end of the war the mine owners’ profit by the ton was four times as high as before, and their total profits were £160 million.³²

War profiteering was made possible by the great expenditure by government on munitions, guns and other war materiel. That was a tax on the future, borne by the whole community. But the struggle to hold down the pay and consumption of war workers, outlined before, was the basis for the increased rates of profit. Keeping wages down was the way to make sure that the lion’s share of government military spending fell to the employers.

A war for empire

On the eve of the Great War, the British Empire held a territory of 11,900,000 square miles commanding 412 million people, 23 per cent of the world population at the time. Under the agreements that followed – the treaties at Versailles, Sevres and Lausanne – Britain absorbed 1,800,000 square miles and an additional 13 million subjects. The territories of the Ottoman Empire in the Middle East and the German Empire in Africa were shared out between France and Britain. Palestine, Jordan, Iraq, (half of) Cameroon, Togo and Tanganyika all came under her direct rule. Other areas in Africa and the Pacific were granted to the British Dominions of South Africa, Australia and New Zealand. Its territory increased to 13,700,000 square miles – almost a quarter of all land in the world – and those living in its dominions, overseas territories, Crown colonies, protectorates and mandates numbered 460,000,000.

The division of the spoils after the war gives a clue as to the importance of empires in the war.

One of Britain’s pressing concerns was control of the oilfields in Basra (the British Navy ran on oil). Before the war Britain could expect that the Turkish governor of Basra would be no threat to the exploitation of oil by Anglo-Persian Petroleum Company and Royal Dutch Shell – to the advantage of Britain. But when Turkey joined the war on the side of the Central Powers the British authorities’ determination to control the oil directly came to the fore. They were helped by the overweening ambition of the Government of India (which is to say the British Government of India) to control Mesopotamia. On 6 November 1914 the Anglo-Indian Mesopotamia Expeditionary Force seized the Basra oil fields. The Expeditionary Force’s chief political officer, Sir Percy Cox, blithely concluded, ‘I don’t see how we can well avoid taking over Baghdad.’³³

On 14 July 1915 Sharif Hussein wrote to Sir Henry McMahon, British High Commissioner in Egypt, asking whether Great Britain would:

recognize the independence of the Arab countries which are bounded: on the north, by the line Mersin-Adana, parallel to 37˚ N. and thence along the line Krejik-Urfa-Mardin-Midiat-Jazirat (ibn ‘Umar’) -Amadia to the Persian frontier; on the east, but the Persian frontier down to the Persian Gulf, on the South, by the Indian Ocean (with the exclusion of Aden whose status remains as at present); by the Red Sea and the Mediterranean Sea back to Mersin.

The Sharif was talking about the territory that today is divided between Syria, Iraq, Lebanon, Jordan, Israel, Saudi Arabia, the United Arab Emirates, Bahrain, Qatar, Oman and Yemen.

On 24 October 1915 McMahon wrote to Sharif Hussein, that:

the districts of Mersin and Alexandretta, and portions of Syria lying to the west of the districts of Damascus, Homs, Hama and Aleppo, cannot be said to be purely Arab and must on that account be excepted from the proposed delimitation.

He went on to say that:

I am authorised to give you the following pledges on behalf of the Government of Great Britain: …subject to the modifications stated above, Great Britain is prepared to recognise and uphold the independence of the Arabs in all the regions lying within the frontiers proposed by the Sharif of Mecca.³⁴

On 10 June 1916 the Sharif’s forces attacked Turkish troops garrisoned in Mecca. The fighting lasted till the Turks surrendered on 9 July. A force of 3500 tribesmen under the Harb federation led by Sharif Muhsin attacked the Turkish troops at Jedda, who surrendered on 16 June. The Arab Revolt had begun. By 30 September 1917 the Turks withdrew from Damascus in the face of the Arab and British advance, ending 400 years of Ottoman domination. Arab hopes for the post-war settlement were high.³⁵

Britain supported the Arab Revolt against the Ottoman Empire

Around the time that Sir Henry McMahon talked to Sharif Hussein, a negotiation between Sir Mark Sykes and M. F. Georges-Picot started at the Foreign Office in London. Picot had been France’s consul-general in Beirut. They then went on to Petrograd to talk to the Russian government about the division of the Ottoman Empire after the war. The ‘Sykes-Picot’ agreement divided Ottoman Arabia between a French and a British sphere of influence. France would dominate in those lands that today are roughly Syria and the Lebanon; Britain in those lands that are Iraq and Jordan. They further stipulated that there would be direct French rule in western Syria and Lebanon, and direct British rule in Basra, Baghdad and the land thereabout. They did concede that there could be a degree of self-government in some parts of these French and British spheres of influence (Zones A and B on their map).

At Russia’s request the ‘Holy Land’ was reserved for an international mandate.³⁶ On 2 November 1917 the British Foreign Minister Arthur Balfour issued a declaration which committed the government to ‘the establishment in Palestine of a national home for the Jewish people’. The Balfour Declaration arose out of discussions with the hard-line imperialists Alfred Milner and Leo Amery, with the Zionist movement leader Chaim Waizmann and British politician Herbert Samuel. Most of all it arose out of a British desire to water down the compelling argument for a single Arab nation.

The Arab leaders’ distrust of Britain and France was growing. To derail it the two powers issued an Anglo-French Declaration on 7 November 1918 – 3 days before the end of the war. In it they committed themselves to ‘the complete and final liberation of the peoples who have so long been oppressed by the Turks, and the setting up of national governments and administrations that shall derive their authority from the free exercise of the initiative and choice of the indigenous populations’.³⁷

Despite their promises, at the end of the war quite a different settlement emerged at the San Remo conference in April 1920 (an extension of the Versailles conference). The Arab lands freed from Ottoman rule were divided between France and Britain roughly along the lines agreed by Sir Mark Sykes and M. Georges-Picot. Under the Versailles terms these were ‘Class A Mandates’; that is territories that were governed by Great Powers, on behalf of their peoples who:

have reached a stage of development where their existence as independent nations can be provisionally recognized subject to the rendering of administrative advice and assistance by a Mandatory until such time as they are able to stand alone.

That meant that they were to be ruled on their behalf for the meantime by Britain or France. France got to govern Syria and Lebanon; Britain got Iraq, Trans-Jordan and Palestine. In Palestine, Britain patronised the small Jewish community. According to Ronald Storrs, who described himself as ‘the first military governor of Palestine since Pontius Pilate’, Britain would build ‘little loyal Jewish Ulster in a sea of potentially hostile Arabism’. The secret committee of Arab officers in the Ottoman Army that had played a key role in the Arab Revolt – al-‘Ahd – were shocked. They issued a proclamation denouncing the decisions at San Remo and calling on the people of Iraq to resist the dictation of the allied powers by force.³⁸

On the other side of the world another carve-up was under way. At the start of the war Germany held a colony in China, Qingdao in Shandong. On 23 August 1914 Japan declared war on Germany and, with the assistance of two British battalions, invaded Qingdao whose German officers surrendered on 7 November. China’s contribution of 340,000 labourers to the Entente forces was made in the hope that after the war, China’s sovereignty would be honoured. Many of the labourers were recruited from Shandong. China’s belief in Woodrow Wilson’s promise of ‘self-determination’, though, was cruelly betrayed. Secretly, the Japanese and Americans had already agreed in the secret Lansing-Ishii Agreement of 1917 to recognise each other’s ‘interests’ in China. At the Versailles Peace Conference China’s diplomat Wellington Koo appealed for his country’s freedom. But Wilson instead recognised the Japanese colony. On 4 May 1919, in Tiananmen Square, thousands of students and workers protested at the betrayal – ‘a new stage in China’s bourgeois-democratic revolution against imperialism and feudalism’, wrote Mao Zedong 20 years later.

The divisions of China and the former Ottoman Empire between the victorious powers, over the heads of their peoples, was not the only instance of re-division of the imperial spoils. Former German colonies Tanganyika and Cameroon were handed over to Britain and France respectively. South West Africa (today’s Namibia) was put into the hands of Britain’s Dominion in South Africa, and the African National Congress delegation to the Versailles Peace Conference left empty-handed. In the Pacific the government of the German colony of Samoa was handed over to that other British Dominion, New Zealand. The Mandate system was created to solve a problem:

Namely, how could the Allied powers which had seized (or in the modern jargon ‘liberated’) German and Turkish dependencies be allowed to keep their gains without affronting people, especially in the United States, who wanted to break free from old-fashioned imperialism?³⁹

The imperial share-out had to be dressed up as if it was a matter of ‘taking up the white man’s burden’.

A war of capitalist competition

When the Great Powers waged war between 1914 and 1918, they were no longer led by chivalric knights, nor fighting for honour. The war was above all a commercial enterprise. It was fought between rival economic powers who were unable to contain their rivalry. Interior Secretary Clemens von Delbruck dreamt of a German customs union ‘from the Pyrenees to Memel, from the Black Sea to the North Sea, from the Mediterranean to the Baltic’, saying that ‘we are no longer fighting for the master in the internal market but for the mastery in the world market’.⁴⁰

At the end of the war the Entente powers demanded extensive economic reparations from Germany, justified on the grounds that Germany was guilty, as established in Article 231 of the Versailles Treaty. According to John Maynard Keynes’ biographer, a ‘powerful lobby’ in Britain pushed the line that Germany must be charged ‘the whole costs of the war’. The lobby was made up of ‘business interests who wanted German rather than British industry taxed to finance the huge National Debt which the war had created’ – meaning the debt contracted boosting their profits – as well as representatives of the Dominions. The original sum demanded was 226 billion Reichsmarks, later reduced to 132 billion, or around £22 billion. Germany did not clear its reparation debts until 2010, when the last payment of £60 million was made.⁴¹

Entente powers occupied parts of Germany putting them in a position to dictate economic terms. In the French occupied region of the Saar, ‘there were not only coal mines but a flourishing metal industry in the control of German magnates. The Saar Government was soon able to “induce” the German magnates to give a 60 per cent participation in their industries to French capital.’ The Worker saw the pattern emerging:

Economic compensation, political control to safeguard those economic compensations, and then the further expropriation of the German industrialists.⁴²

BASF’s Ludwigshafen and Oppau plants were under the French occupation, which meant that: ‘the French utilised the provisions of the Armistice and the Versailles Treaty to study the company’s critical production facilities, an apparent case of industrial espionage in the name of arms control’. Under Article 168 of the Versailles Treaty, German factories making war materiel could be closed down unless approved by the victorious powers. ‘The French threatened to include BASF’s ammonia plants under this provision unless the company licensed the Haber-Bosch technology to them’ – that is the process that creates nitrogen fertilisers – which they did under disadvantageous terms.⁴³ The British chemical giant Brunner Mond did not even bother dealing with BASF, but just announced that they were using confiscated BASF patents licensed to them by the British Government.

BASF was further tasked with making 30,000 tons of ammonia a year for France as reparations. Even as they complained about the yoke of French and British theft of their patents and industrial secrets, the German chemical magnates could find some common ground with their new overlords. The company’s management ‘found itself depending on French troops to maintain order among striking workers’.

The reparations regime crippled Germany’s economy post war, and because Germany was a large market to which many other countries had sold goods it depressed the European and world market too. To keep up reparations payments Germany held down wages, and borrowed the money from creditors, among them the United States, or sought to have the debts rescheduled. It was an arrangement that grossly skewed domestic relations, and Germany’s relations with other countries – even destabilising the world financial system and economy. There were different international plans to help Germany meet her obligations. The Dawes Plan of 1924 (US banker Charles Dawes’s plan returned the Ruhr Valley, rescheduled debts and extended loans) only postponed the problem, and in 1928 the Young Plan rescheduled again. German governments passed on the cost to their workforces, so that in 1930 in the name of the Young Plan wages were cut:

The arbitration award in the German metal industry, imposing the very same eight per cent wages cut against which 140,000 Berlin workers struck for three weeks is only the prelude to a new international attack on wages and conditions of the workers in every country in the world.⁴⁴

The whole regime of reparations fostered a poisonous atmosphere in Germany, where foreigners were blamed for the country’s privations. The constant sore of reparations and post-war humiliation for Germany was exploited by the emerging nationalist right in the 1930s.

The Great War was often described as the war to end all wars. But the truth was that the way that the war was settled left in place all of the problems that had led to war in the first place. Reactionary political leaders’ positions were shored up, exploitative social conditions aggravated, there was an unstable re-division of the colonial world between the powers, militarism was not moderated but enhanced. History would remember the war not as the war to end all wars, nor even as the Great War, but as the First World War, just the prelude to another world war, 20 years later.