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THE FIRST WORLD WAR: A DOCUMENTARY RECORD

Series One: European War, 1914-1919, The War Reserve Collection (WRA-WRE)

from Cambridge University Library

Part 7: Economics, Finance and Socialism

Part 8: Russian Affairs, Bolshevism and the Eastern Front

Publisher's Note - Part 7

The First World War: A Documentary Record is a major microfilm series which is making available for the first time the riches of the Cambridge War Reserve Collection. This collection is acknowledged to be one of the finest sources of documentation concerning the First World War in the world, with much unique, rare and ephemeral material. Professor Jay Winter, Department of History, Yale University, is the Consultant Editor for the microfilm edition. The emphasis is on the inclusion of materials unlikely to be held in most libraries.

Part 7 concentrates on Economics, Finance and Socialism. It includes all the WRA-WRE material from subject code number 30.

These documents allow scholars and researchers to compare and contrast the economic, industrial and financial fortunes of both the Allies and the Central Powers (Germany and Austria-Hungary) during the Great War and in the years immediately after the conflict. We also include material on the perceived threats of the rise of socialism and the union movement.

The economic strength of the Allies derived from their extra-European reserves of manpower, material and money. This is borne out by a number of publications including J W Grice’s The Resources of Empire (1918) and volumes such as Imperial Britain: An Illustrated Descriptive Record of Industrial Achievement during the War for Freedom, 1914-18 (1920), Mobilizing America’s resources for the War (1918) and La Fête de l’Empire britannique (1918). Germany and Austria-Hungary could not match this second line of supply, support and finance.

The longer the war dragged on , the greater was the economic gap between the two sides. E F Davies on British and German finance (1915), H S Foxwell’s British War finance (1915), H Cox’s The economic strength of Great Britain, G B Dibble’s Germany’s economic position (1919), E C Fairchild’s The Economics of War (1917), England’s financial supremacy (1918), and L R Gottlieb’s Financial status of the belligerents (New York, 1920) all chart this process.

In an effort to bridge the gap, Germany launched unrestricted submarine warfare. This policy failed. In contrast, the Allied blockade of central Europe proved more effective and increased the cost of war to the Central Powers. The documents reveal the impact of bureaucratic inefficiency, harvest failures, labour shortages and the naval blockade. The difficult economic conditions led to a situation where black-marketeering was rife, official rations simply could not feed the German population, economic policy forced everybody to break the law and provided good opportunities for petty crooks and swindlers. The agriculture of Austria-Hungary and Germany should have made the Central Powers self-sufficient in food. However, shortages of labour and essential nitrates, exacerbated by mismanagement, led to a steep decline in agricultural production by 1917 at which stage pre-war levels of food supply had been halved. 

Worsening inflation in the Central Powers was another sign of economic difficulties. While retail prices doubled in wartime Britain and France, they trebled or quadrupled in Germany and Austria-Hungary. Market prices were higher still. The driving force was military expenditure. To pay for it, the government simply printed money. Bills in circulation in wartime Germany rose by over 1000%. Die Neuordnung der Deutschen Finanzwirtschaft (Munich 1918) attempts to address some of the problems.

Many of the works included here reveal how the German war economy became totally unbalanced. Germany spent 83% of total public expenditure on military items; 2% on the civilian sector. The figures in Britain were 62% and 16% respectively. The needs of the army and heavy industry came first. Such a policy required careful checks and balances. A successful war economy had to ensure the efficient distribution of scarce goods and services between a number of competing groups. In the end, the Allies were more successful, because they had greater resources, and because they never starved home populations to keep armies at the front well provisioned.

This material allows scholars and researchers to assess the economic condition and industrial strength of the various Great Powers at the outset of the war, at different stages during the conflict, and in the aftermath of hostilities. What was the impact of the war economy on each nation?  How did levels of industrial output vary and how did the balance of expenditure on different sectors of the economy shift and alter over time? There is much evidence and comment on these questions. There is also important material on the resultant problems - starvation, poverty, mass protest and social revolution. The emphasis on heavy industry, the rise of socialism and labour movements, trade unions, the threat of strikes, the growth in bureaucracy, the problems of manpower and material shortages are all set in a social and cultural context.

Some groups prospered in wartime. War contractors did not go poor, and for workers in war industries pay was relatively good, though the hours of work required were very long. Unemployment vanished and wages rose, especially those of unskilled workers, but for most people in Vienna, Prague, Budapest or Berlin, the war was a time of severe deprivation. This is well recorded in accounts such as the Food supply of the Republic of Austria (Vienna 1920) and The Starving of Germany (Berlin 1919).

The Allies were not without their problems. J A Hutton’s The effects of the War on cotton-growing in the British Empire (1916), How the United States of America is dealing with the shortage of dye stuffs (1916), A Mee’s S.O.S.: The facts about the great food scandal (1917), Christabel Pankhurst’s International Militancy (1915) and Annie Besant’s The War and its lessons (1920) look at a number of important issues.

However, despite submarine warfare, the lines of naval supply were kept open. There was great co-operation between the Allies on trade and commerce. This was co-ordinated at national and international level. Various documents cover these efforts, for instance, the Report of the Committee on Co-operation in foreign trade, of 21 July 1916.

Britain and France gave a high priority to maintaining home agricultural production. The success of Allied food policy was grounded in the work of the Food Control Committees - see Knight’s Handbook for Food Control Committees (second edition by W G Gillings, London 1917) - and a realisation that a crucial factor in winning the war was to defend civilian living standards. This ensured that the vital distribution system did not break down. Other works in this area included here are Charles W Fielding’s England’s Food (1915) and H Hoover’s Food in War (1918).

Britain benefited from significant help from the Empire and Dominions. Canada, Australia, New Zealand, India and South Africa put more men into the field than did the United States. These British Allies lost over 200,000 killed and 600,000 wounded, or twice the casualties suffered by the American Expeditionary Forces. Total war expenditure for the five countries reached one billion pounds sterling. In financial terms, the Dominions provided Britain with only a fraction of the support which came from the United States, and by 1917, US finance provided the foundation for the entire Allied war effort. However, without the Empire and the Dominions, Britain’s dependency on America, and the position of the British economy at the end of the war, would have been substantially worse.

The materials covered here look at many different economic aspects of the war. These include:

  • the importance of wheat in relation to the war
  • the contribution of British industry to the war effort
  • industrial output in Britain and Germany
  • mechanical engineering
  • the value of colonial manufacturing and international trade
  • US and South American trade
  • the circulation of money
  • British and German finance
  • war revenue in the United States
  • liquor restrictions
  • food policy and the starvation of Germany
  • the Allied blockade of Germany
  • the industrial situation immediately after the war
  • the economic consequences of the Peace settlement
  • the post-war economic outlook

There is material from a wide range of different countries: Britain, France, Belgium, Germany, Austria-Hungary, Poland, the Netherlands, Spain, Italy, Sweden, Norway, Denmark, Switzerland, the United States, Argentina, Bolivia and China. This is one of the great strengths of the War Reserve Collection as Francis Jenkinson, Cambridge University Librarian in 1915, embarked upon a systematic and comprehensive effort to collect from all countries all materials pertaining to the European conflict.

Socialism and the war is well covered in a number of ephemeral items and rare printed works. The rise of economic socialism was closely linked to the financial and economic situation and the social conditions created by the economic policies pursued by the wartime governments. Revolution in Russia, the threat that revolution would spread throughout Europe, economic disorder and the inflationary spiral in Germany, the power vacuum left by the defeat of the Central Powers, and the problems of the Peace settlement were all important factors. They challenged the stability of the existing world order. Here too were the origins of National Socialism in Germany. How did different nations face up to the challenges of socialism? How did Britain and France resist the threat of revolution?

Examples of relevant documents include:

  • Guy A Aldred, Socialism and War, (London 1915)
  • P J Troelstra, An open letter on the New Socialist Peace Conference, (London 1919)
  • V Nosek, Austrian Socialism and the present war, (London 1920)
  • E Froyer, La social-démocratie allemande, (London 1918)
  • Les Socialists dans la Nation et pour la Nation, (Paris 1917)
  • G Baeumer, Die deutsche Frau in der sozialen kriegsfürsorge, (London 1916)
  • J Webb, The War and the Workers, (London 1914)
  • Sozialismus ist Arbeit, (1920)
  • C Copper, La clase obrera y el Estado alemán, (Madrid 1917)
  • J Bryan, Essays in Socialism and War, (London 1917)
  • J T W Newbold, The politics of capitalism, (London 1918)
  • W Rarhenan, Die neue Wirtschaft, (Berlin 1918)
  • Christabel Pankhurst, International Militancy, (London 1915)
  • Paul Lensch, Drei Jahre Weltrevolution, (Berlin 1917)

A number of works deal with the immediate post-war period. There is J M Keynes on the Economic Consequences of the Peace, (London 1919); R H Brand’s The financial and economic future, (London 1919); J M Robertson on Fiscal policy after the war, (London 1916); Lloyd George’s Peace and Retrenchment, (London 1919); E Kuttner’s Die deutsche Revolution, (Berlin 1918); The New Victory Loan, (London 1919); Victory and other Liberty loan acts, (New York 1919); Important financing since the armistice, (New York 1920); and D C McMurtrie on Returning the disabled to economic independence, (New York 1919).

The First World War was the world-changing event of the century. With all that has been written about it, large areas need to be enriched and deepened by access to a wider range of material. The War Reserve Collection at Cambridge contains many unfamiliar and unusual documents.

Professor Trevor Wilson

Department of History, University of Adelaide

Scholars and students will be able to use this collection to explore the issues and arguments of the war from the perspectives of both sides. They will be able to examine the economic debate from a variety of different angles and study the various factors leading to the rise of socialism.

  • What were the reasons for the strikes and industrial unrest in Britain, France, Italy and Germany after 1916?
  • How prominent were women and young workers in the strike action?
  • What were the restraints on militancy?
  • What distinguished the second wave of militancy of early 1918?
  • What was the impact of the two major political events of 1917: American entry into the war and the Russian Revolution?

Part 8 of this project goes on to cover Russian Affairs, Bolshevism and the Eastern Front.

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