Yet wartime loans *were* defaulted on postwar, so evidently these weren't a safe investment. . So warning American ivestors against subscribing to unsecured loans was clearly the right call, whoever initiated it.
No Zimmermann Telegram, how soon does America join WW1 without it?
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Yet wartime loans *were* defaulted on postwar, so evidently these weren't a safe investment. . So warning American ivestors against subscribing to unsecured loans was clearly the right call, whoever initiated it.
You're jumping the gun here quite a bit with that 40% number. The UK had gold in the Treasury alone for $500 million worth of purchases, the Bank of France had gold for $625 million. France also had overseas gold assets and private reserves, while the UK had completely untapped large reserves held by private banks, overseas assets, etc. which would add $100s of millions more to the account.
At the same time, the UK produced an additional $621 million in securities in 1917-1918 even operating under the relaxed conditions caused by the US intervention, again non-inclusive of valuable overseas assets, particularly in Latin America, held in dollars or French assets.
Along with this, even during the period of "tight credit" from November 1916 - March 1917 the UK and France were still bringing in $100s of millions of collateralized loans from the US.
As @ArtosStark helpfully noted, other belt-tightening measures such as rationing could further improve the import situation. You also have the gamble of unpegging the pound sterling from gold, which would free up substantial dollars as well as gold to be used as collateral instead of direct trade. Keynes warned of serious damage to British credit and finance from such a decision, but Keynes isn't an infallible man and the UK's economists during this period were rather fixated on monetary stability and not rocking the boat too much to fund the war effort.
In the end you might still run the risk of severe belt-tightening and inflation, particularly in terms of domestic consumption. If this also effects US exports, Wilson is going to face substantial pressure from the "real" economy to provide some form of relief to the Allies to stave off economic pain in the US.
Lets not forget either to role the US entry into the war and American Liberty Loans played in encouraging an overly-aggressive Allied strategy in 1917 which went far beyond their means, nearly leading to strategic disaster. I'm thinking in particular the Kerensky Offensive, whose launch was never a sure thing. Kerensky was well aware of the pressure from Secretary of the Treasury McAdoo that US loans would only be provided to countries actively fighting the common enemy. The Provisional Government's support for a general offensive was predicated both on the fact that US support required active participation on their part and that securing a place at the victor's table became substantially harder from now on without equal commitment and proof of Russia's "honor". If Russia is still in survival mode, a risky offensive becomes much less likely. No Kerensky Offensive - No July Days - No Kornilov Coup - No October (As we know it). If Russia is still in the war come fall 1917 and could still launch an offensive at any moment, Germany can neither transfer troops to the Western Front nor preempt the Italian 12th Isonzo offensive after the 11th Isonzo nearly collapsed the Austro-Hungarian Army in August. At that point, Germany and its allies face certain defeat in Italy and the Western Front come Spring 1918.
If we applied your logic to OTL, Germany and Austria-Hungary "should have" collapsed in 1916-1917 with their intense financial dislocations, resource shortages, and material losses. Instead they tightened their belts, found creative solutions, adjusted their strategies, and shouldered onward until Fall 1918. The idea that a coalition of wealthy nation states is going to inexplicably collapse the moment easy solutions are exhausted strikes me as working backward from a hypothesis to insist its true rather than admitting the hypothesis could be flawed.
Even in the most optimistic scenario where the Allies are unable to launch successful offensive operations because of resource shortages, Germany still collapses first because of blockade-induced starvation and the collapse of Austria-Hungary, which was on the verge of happening at any moment from Fall 1917 - Fall 1918. In a war of attrition, the last man standing wins - and the Allies had more gas in the tank than Germany. Which is why IOTL the UK didn't even introduce rationing until 1918 while Germany was collapsing from deprivation.
They were sinking 323 million tons on average from September 1916 -January 1917? If the tonnage losses become too severe to endure, the Admiralty will be forced to implement convoying as it was IOTL and nip further sinking in the bud.
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Artos stark that is based on the fact that 50% of the food that the UK was eating was imported. If you reduce that by 40% it comes to 20% less which was the level of the turnip winter.
All the other figures are based at actual imports.
And one thing here. You made the claim about the 200k tons already once. It is factually wrong. The sinkings in the last 5 months before USW was declared were on average 300 k tons plus.
All the other figures are based at actual imports.
And one thing here. You made the claim about the 200k tons already once. It is factually wrong. The sinkings in the last 5 months before USW was declared were on average 300 k tons plus.
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One thing hanging over all of this, really, isn't whether it's physically possible for Britain to fight the war, but whether it's politically possible, at least once the demands on the public start to get more and more extreme.
This is, after all, not an existential threat to the British Empire, but a question about its role in global affairs. The German army might reach Paris or St. Petersburg, and the Allies might get Berlin, but nobody's ever getting near London. At some point, if the requirement for continuing the war is a weakening pound, rationed food, and government seizures of gold and securities...maybe people start saying that it's not worth it. They'd need a partner on the other side for peace talks, and some way to manage France, but I don't think you can take it entirely off the table, especially if Wilson is still working on it.
It might not take much for public opinion to swing decisively against Lloyd George. It doesn't have to be a revolution, just a loss of public confidence (and the confidence of military leadership, who were already skeptical of him). Knock him down enough for a no-confidence vote or resignation, and you might see either a return to office for Asquith (probably unlikely), or a different politician ready to lead Britain into peace talks.
This is, after all, not an existential threat to the British Empire, but a question about its role in global affairs. The German army might reach Paris or St. Petersburg, and the Allies might get Berlin, but nobody's ever getting near London. At some point, if the requirement for continuing the war is a weakening pound, rationed food, and government seizures of gold and securities...maybe people start saying that it's not worth it. They'd need a partner on the other side for peace talks, and some way to manage France, but I don't think you can take it entirely off the table, especially if Wilson is still working on it.
It might not take much for public opinion to swing decisively against Lloyd George. It doesn't have to be a revolution, just a loss of public confidence (and the confidence of military leadership, who were already skeptical of him). Knock him down enough for a no-confidence vote or resignation, and you might see either a return to office for Asquith (probably unlikely), or a different politician ready to lead Britain into peace talks.
But where does this 40% drop come from?
And stop saying that what others say is wrong when you are unable to provide the source of your words.
It's getting tiresome.
Comte I pointed you to a thread with all the sources.
According to Uboat net from Sep 16 to Jan 17 the exact figure is 336 kilo tons/month.
And the drop by 40% is generous. Remember that law that made unsecured loans illegal?
Even if I add all figures in Julians post (which the treasury of the UK funnily did not know about)
and double them it does not come to 60% of OTL imports.
And rationing oil, steel and copper in a war? Yes you can do this but how do you survive Caporetto with 50% less shells? Or the springoffensive with 20% less?
According to Uboat net from Sep 16 to Jan 17 the exact figure is 336 kilo tons/month.
And the drop by 40% is generous. Remember that law that made unsecured loans illegal?
Even if I add all figures in Julians post (which the treasury of the UK funnily did not know about)
and double them it does not come to 60% of OTL imports.
And rationing oil, steel and copper in a war? Yes you can do this but how do you survive Caporetto with 50% less shells? Or the springoffensive with 20% less?
No sorry, I did not find the thread you are talking about.
Please give me the sources directly, at least the direct link to the thread.
So we agree that this 40% drop is only based on your own speculations?
And again, sorry but I didn't understand the origin of the drop in imports by your reasoning.
Comte I am working on a mobile so adding links is at best tedious. Could the Entente win without America and post number 9 should give you all the answers.
And the 40% drop is a generous assumption. In reality the UK would not have been able to import a fraction of that due to a lack of money and the law that forbade unsecured loans.
And that threat is the first that comes out if you search „could the Entente win“
Julian, the convoy system was only possible due to US ships and ASW assets. Without that the inherent drop of 30% of the capacity inshippimg that comes with a convoy system would have been to hard to bear.
And the 40% drop is a generous assumption. In reality the UK would not have been able to import a fraction of that due to a lack of money and the law that forbade unsecured loans.
And that threat is the first that comes out if you search „could the Entente win“
Julian, the convoy system was only possible due to US ships and ASW assets. Without that the inherent drop of 30% of the capacity inshippimg that comes with a convoy system would have been to hard to bear.
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Based on a quick and dirty Wiki check it appears we are both wrong:
Assuming the military vessels don't broadly swing the numbers in the 5 months prior to USW being declared in Feb 1918 losses did indeed exceed the 200 kt I mentioned, averaging 323 kt. Greater than my estimate, less than yours. Assuming these numbers continue to slowly increase an average of 425 kt for the period between OTL USW being declared (Feb 1917) and Convoys really kicking in (November 1917) seems on the higher end of reasonable. In this case you get a total of 3.825 million tons compared to the 5.174 million of OTL. A savings of 1.349 million tons.
In 1917 The British completed 1.163 million tons of shipping within Britain. They also had orders for 81 "War Standard" ships in the US that were taken over by the US Merchant Marine in OTL, plus others for France. These, plus those built in Canada for both Britain and France, and the Allies total deficit in shipping from 1918 as compared to 1914 is probably reduced from around 6 million tons to around 4 million.
Indeed, but there are a few suspect assumptions in this calculation:
1- You seem to be making a very suspect break between the US Entering the war and the US stopping all trade, usually with a comment about unsecured loans. As has been pointed out, the funds are there to negotiate for secured loans, negating this whole issue. Further, there was no injunction against the regular purchase of goods with American dollars, of which the Allies did have some reserve, and of which they can gain more by directly selling gold or securities, if they cannot obtain secured loans in American dollars
2- You seem to assume that all, or most, of the foodstuffs crossing the Atlantic came from the US. While certainly a large amount did, AIUI Canada was the main supplier of Wheat, The Caribbean was the primary source of Sugar, and Argentina was the primary source of meat products.
3- The US entry into the war actually hurt Britain's ability to import food as limited shipping was needed to transport American troops and equipment to Europe. This is part of the reason that rationing was actually introduced later in the war. ITTL that pressure is removed
4- You assume that Britain's home production is a fixed variable. In fact it is estimated that the caloric content of British home production increased by 24% by 1918. This number is possibly slightly inflated but the amount of home grown food did significantly increase. This goes hand-in hand with the introduction of rationing, which, as I mentioned earlier would actually probably help the British economy. These two measures together meant the caloric intake of the average Briton fell by only 3% during the war. So it is somewhat confusing to see the assertion that a war with less losses to u-boats would lead to greater starvation.
True, though it is actually more complicated than that. The Lausanne conference was an effort under American pressure for the suspension of reparations from Germany to the Entente powers. Since reparations had been used to make payments on US war debt the agreement to end reparations was contingent on reaching an agreement with the US over their debt. This was rejected by Congress, which led to the "Wave of defaults" that became a part of the story of the Great Depression. If it makes you fell any better, proportional to GDP more debt owed to the UK was defaulted in this period than was to the US. Approximately 17% of the US GDP's worth verses 28% of the UK GDP (https://voxeu.org/article/sovereign-debt-relief-and-its-aftermath-1930s-1990s-future)
The US ships helped, certainly, but they were not actually critical to the existence of convoy. The Admiralty in early 1917 had estimated that they were 32 destroyers short on ships for convoy. This was based on three false assumptions:
1- They believed that destroyers would be needed far more than they ultimately were. Predreadnoughts, Armed merchant cruisers, sloops and Armoured Cruisers all ended up doing the job perfectly adequately in all but the most dangerous waters, and there were lots of destroyers to cover those even without those sent from the US. Particularly since the US 6th battle squadron required additional destroyers to screen for, deducting from the total available for convoy.
2. The Admiralty had been working with numbers of total sailings from British ports (300 per day), as the number that needed escorting, rather than from those crossing the Atlantic (140 per day)
3. The Admiralty assumed that they would need a 1:1 ratio of escorts to merchants. This would turn out to be way off. By October 1917 39 ships were sailing with the same number of escorts as had covered 12 in May.
The Treasury estimated in September 1916 that the well was dry for securities for dollars from that point onward. It went on to raise $600 million in securities in 1917-18 just by sequestering dollars. What the Treasury claimed it could accomplish vs what it could actually accomplish was, as Horn notes, conditional. The Treasury was certain they would be unable to survive through the November 1916 - March 1917 half year with the material it had on hand, especially with the ongoing crunch on lending. They muddled through, and by April 1917 still had substantial state reserves for imports as well as ways to suppress private leakage of dollars and gold still further. The French had actually negotiated themselves into a fairly comfortable slate of $100 million credits in early 1917 and were still sitting on a virtually untapped pile of gold reserves as well as various bonds.
Even without uncollateralized credits, the Fed had a wide variety of restrictions on foreign treasuries, city bonds, etc. which it had restricted from November 1916 as part of the pressure campaign for peace. It's hard to imagine, with Wilson's behavior from 1914-16, that once the peace offensive inevitably failed he would maintain those restrictions.
Much of the crying uncle of April 1917 should be taken in the context of the UK actively angling to receive substantial US government loans and convince the US Treasury to take over the financing of Allied purchases. The UK had done much the same in Fall 1916. The inability of the UK to raise additional funds was conditioned on no radical changes to its policy of finance or additional contributions from France, both of which could have brought substantial material to the table to continue funding for the foreseeable future even with no radical change in US policy.
That's simply not correct, the Admiralty had ample obsolete ships to send to escort convoys pre-March 1917. Their resistance was primarily strategic, not resource-based. The US entry into the war and USW substantially heightened the naval strain by creating a far greater amount of targets than previously existed, which absolutely necessitated USN resources.
The Allies were outproducing Germany by more than 2:1 by 1917-18, so I'd say a 20% reduction would actually still leave them in quite a comfortable material position on the Western Front. And that's assuming Russia drops out, which is by no means guaranteed if they don't engage in reckless offensives in 1917 egged on by US credit. Caporetto, similarly, was the product of reckless Italian maneuvering in Summer 1917 which nearly collapsed the A-H army but placed Italy in an extremely vulnerable position which the concentration of German and Austrian reserves freed up by the collapse of the Kerensky Offensive could take advantage of. Even a 50% reduction in Italian munitions in 1917-18 would still see them outproducing A-H by more than 2:1 in shells.
Even if the Allies are forced to remain on the defensive for much of 1918 because of shortages, Austria and Germany still face internal collapse far sooner than they do. If the Allies concentrate their meagre resources for an offensive against Austria, they'll easily knock it and the Ottomans out of the war and allow France, the UK, and Italy to now concentrate all of their remaining resources against an overstretched Germany.
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Artos if you introduce a convoy system the capacity of your shipping goes down by 30%. How does the UK make up for this?
And my last estimate of a drop of 40% in trade is not stopping all trade.
Julian again: Taking all your figures as 100% true and (!!) assuming the UK could somehow (!) double those figures they only make up less than 60% of the OTL figures.
So Artos, Comte, even taking the figures of Julian who is arguing the same case that you do for double the amount he is claiming we are still at a drop of 40% deliveries compared to OTL.
What is your case now that they would be higher?
So how do you conduct a war with the reductions in steel, oil and copper?
And my last estimate of a drop of 40% in trade is not stopping all trade.
Julian again: Taking all your figures as 100% true and (!!) assuming the UK could somehow (!) double those figures they only make up less than 60% of the OTL figures.
So Artos, Comte, even taking the figures of Julian who is arguing the same case that you do for double the amount he is claiming we are still at a drop of 40% deliveries compared to OTL.
What is your case now that they would be higher?
So how do you conduct a war with the reductions in steel, oil and copper?
The Allies funded $1.5 billion in purchases from November 1916 to April 1917 with just $500 million in gold fronted forward as collateral, and they only spent $420 million of that by April 1917. This was before the Allies started sequestering substantial dollar securities in 1917 to the tune of $620 million (And this was just one operation raised while the Anglo-French were being intensely financially cautious after US intervention). The British Treasury and Bank of France alone had over $1.2 billion in gold at home in reserve, enough to provide collateral similar to November 1916 - March 1917 until Spring 1918 if gold remained the only source of funding (With the explosion in securities, it wouldn't be). Substantial amounts of gold was also held overseas and in private sources, uncollected but available. Overseas securities to tap into for dollars were similarly untouched.
Would the Entente be scraping the bottom of the barrel and face severe monetary consequences postwar come Winter 1918 - Spring 1919? Absolutely! Britain's almost inevitable departure from the gold standard alone will yield substantial changes in the immediate postwar financial economy. Would they be on the verge of starvation and military collapse? Unlikely, the least of which because there's no world in which substantial US food aid, whether via charity or Federal support, doesn't come to the UK's aid with how sympathetic public feelings were toward it.
Even looking at a 20-30% drop in Anglo-French munitions production in order to continue importing food and fuel, they'd still be substantially outshooting Germany in 1918. And with Germany's industrial economy on the verge of collapse and starvation rampant, those numbers are going to look even more severe come Winter 1918-1919.
Germany was never close to winning the battle of material with the Entente. Narrowing the gap somewhat doesn't change the final scoreboard.
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You know, I had thought we were covering ground already trodden not long before, so I looked through my old posts and lo and behold:
No USW
Belisarius the theoretical answer is a convoy system but a) a convoy sytem cuts transport by 30% compared to single riders. That additional shipping simply wasn‘t there. b) you would also need the escorts which the RN did not have. The convoy system was possible with all the US shipping and...
www.alternatehistory.com
Since the Zimmerman telegram doesn't seem to change much on its own, this thread has more or less devolved into the same topic as that one. This is perhaps a sign of us wasting bandwidth, but I suppose that is a decision above my pay grade. Regardless...
You asked this question in that thread, so perhaps I will use the same answer:
I will also tack on a further response in a similar vein:
Then it seems vastly overinflated and I am not sure where it is coming from. To be honest, the logical basis for most of your numbers escapes me. Why is 40% of all trade being stopped when the Allies have:
-the resources to secure their loans from the US?
- The legal basis to apply for said loans as long as they are secured with American Dollars, Securities, or gold, which they still have?
- The legal and organizational basis to conduct trade with the US for the purchase of goods and the money with which to pay for them?
Julian and how does 20 to 30% reduction in shells and 30% in fuel plus the much less tighter blockade pan out in March 1918? With the UK feeling ever closer to scraping the barrel? With a Germany not in a hurry?
Artos for the third time. I am adding up every dollar that Julian sais the UK was able to spend. Then I double that number. And then I compare it to OTL imports.
And that pans out that even after the doubling of all figures Julian is saying the UK could muster it would lead to a drop of imports by 40%.
Artos for the third time. I am adding up every dollar that Julian sais the UK was able to spend. Then I double that number. And then I compare it to OTL imports.
And that pans out that even after the doubling of all figures Julian is saying the UK could muster it would lead to a drop of imports by 40%.
Nonsense. The German figures for the Turnip Winter were not 20% less.
Pre war, Germany produced around 75% of it's own food and shipped in 25%. At the start of the war, those food imports fell, until by 1917, they were essentially 0.
Domestic food production collapsed. Horses and men taken from the farms, a shortage of fertilizers, machinery failing due to lack of parts. While Britain increased domestic food production in 1917 compared to 1913, the same was not true in Germany. Domestic food production collapsed, with production coming in at around one quarter of what it had been. Hardly surprising given that livestock had been butchered to keep meat production up, until there wasn't enough livestock to restock to the same level.
In the Turnip Winter, Germany was producing around 20% of its needs. That was why starvation and malnutrition were endemic. The official food ration in Germany was 500 calories per day.
Distribution of food was lamentable. That's not surprising. It wasn't Glorious War, so the authorities weren't really interested.
Even if we grant your figures for Britain, you are claiming 80% is at the same level as 20%, which is self-evidently nonsense.
I mean, if Germany isn't in a hurry why would it launch an offensive? It didn't intend to IOTL 1917. If that's the case, the Allies can simply relax, conserve their resources, and focus on collapsing A-H and the Ottomans. After that, Germany's strategic position by Fall 1918 - Spring 1919 becomes hopeless.
In any case, the IOTL Spring Offensive never came close to dealing a decisive material or manpower blow. The Allies have reserves of both and were more than prepared to extend the war into 1919 - indeed, their material and manpower planning assumed Germany wouldn't surrender in 1918. The Germans, by contrast, have no such luxury of time.
It's not merely a matter of adding dollars, it's converting those dollar assets into credits and loans. IOTL the Entente raise $500 million in gold for direct purchases and collateral for loans from November 1916 to March 1917 to carry out $1.5 billion in purchases from the US, and they spent $420 million of the gold. And this was without the substantial securities raised IOTL 1917 compared to 1916, not to mention substantial assets which went untapped for collateral and securities. They had $1.2 billion in gold in just the Treasury/Bank of France reserves, not to mention overseas and private assets which add $100s of millions more. Just at the 1916-17 burn rate they could last until September-October 1918 before exhausting those public reserves, and it's likely closer to spring 1919 when you add in all the other assets they mobilized IOTL or could have but didn't.
Just looking at the balance sheet, the material was there to continue funding the war - the Treasury was simply unwilling to pursue disruptive measures or exhaust its reserves unless the situation became truly desperate.
From what I can gather US Trade with Britain and France together was approximately $3 Billion in 1917. Against this Britain and France Exported just over $400 Million to the US in 1917. That is a trade deficit of 2.6 Billion.
In OTL the British and French were able to get a three to one collateral to purchase ratio in the period after Wilsons instructions to the Fed (Nov 1916) and before the entrance of the US into the war (April 1917). With the $1.2 Billion of gold reserves left to them, they should be able to fund 3.6 Billion in purchases. The $620 million in securities mentioned above should gain another 1.86 Billion. At least one source puts the total amount of American securities left in Britain at $1.9 Billion beyond the $620 Million already mentioned which, if accurate, would give another 5.7 Billion in purchasing. This is ignoring other banks in the UK and France who will likely have some gold available if desperate.
In light of this the 40% drop in imports seems less than "generous".
On another note, the idea that the UK couldn't pursue further self-sufficiency under pressure of reduced imports from the US seems absurd to me. Despite the US providing functionally unlimited resources in 1917-1918, the UK's dependence on imported shell casings still declined from 55% in 1916 to 22% in 1918 as industrial strength grew. Food imports as a whole declined as well from 62% in 1916 to 40% in 1918. While shifting supply chains and building domestic capacity will cause some decline relative to imports from the US, the decline would be substantially less than what the full value of US imports implies. The UK could invest in products and industries which it could acquire non-US alternatives for and use the savings to maintain purchases in essential industries.
All of which didn't stop them coming within a whisker of victory in Spring 1918. See Zabecki.
The Entente doesn't need to fall behind in production - just do enough worse than OTL to change the outcome of those battles.
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I'm not sure why it should make me feel any better, but in general terms I was aware of it.
Iirc, US loans were conditional on the money beig spent in America. We Brits, unfortunately, failed to place a similar condition on our loans to continental allies.