The Anglo-Saxon Social Model

[Rattigan]

The White Eagle and the Double Cross: The Polish-Slovak Civil War

Slovakian armoured troops shortly before the Battle of Opawa in April 1939


Since the agreement on population transfers with Germany, the chimerical nation of Poland-Slovakia had entered into a period of (relatively) watchful calm. For some time intra-ethnic tensions were salved with the ideology of the country as a “home of nations” under the leadership of the Polish Chief of State Josef Pilsudski and his Slovakian Prime Minister Milan Hodza. However, this social peace came under severe fire following the 1929-30 crash (when the Polish-Slovakian economy saw unemployment rise to over 20% and output fall by 40%) - which stimulated the rise of a more exclusionary race-based politics - and finally collapsed after Pilsudski’s death in 1935. Instead, the politics of the country came to be quickly and violently polarised between the Polish nationalist Camp of Great Poland lead by Roman Dmowski and the Slovakian nationalist People’s Party lead by Andrej Hlinka.

The immediate push towards civil war seems to have been the death of Dmowski in January 1939. Rumours immediately spread that he had been murdered (reputable historians agree that he died of natural causes) and anti-Slovak riots immediately broke out, which lead to anti-Polish riots breaking out in response. Over the ‘Bloody Winter’ of January-February 1939 an estimated 100 Poles and 80 Slovakians were murdered by mobs. On 17 February, after an internal argument within the People’s Party, the leader Vojtech Tuka (who had taken over following Hlinka’s death in August 1938), announced his intention to withdraw Slovakia from the Commonwealth. There then followed a period where nobody knew what was going on, as the Polish leader Stanislaw Grabski (a relatively moderate member of the Camp of Great Poland) attempted to reach some kind of conciliation. However, any hopes of reconciliation were torpedoed decisively in April 1939, when the Polish General Jozef Haller responded to the build up of Slovakian forces on the border by shelling them with artillery and subsequently putting them to flight at the Battle of Opawa.

From then on, the slide to Civil War was inevitable. The smart money, in April 1939, would have been to back Poland, with their greater numbers of military officers and equipment. Indeed, their early victories seemed to prove this point. However, People’s Party politicians such as Tuka and Josef Tiso proved successful at mobilising the Slovakian population and, in Ferdinand Katlos, they soon found a general capable of organising a capable defence. Nevertheless, Slovakia was indisputably the weaker part of the Commonwealth and Poland was able to settle in for what they imagined would be a difficult but ultimately successful war of attrition.

However, this changed radically in December 1939. That month, a small Slovakian convoy travelling near the contested city of Zilina and heading towards the German border in Bohemia was surrounded by Polish troops. When the individuals inside refused to surrender, several were gunned down in a firefight and the remainder were carted off to a POW camp. This was all a fairly normal, if grim, part of the civil war then raging but what made it unusual was when it emerged in the days afterwards that one of the captured was the German diplomat Joachim von Ribbentrop. Germany had been building up its forces along its Polish-Slovakian border for months now, concerned about the possibility of the conflict spilling over, and at this point everything entered into a different gear.

Even at this stage, conflict could have been avoided. Lloyd George and his foreign secretary Herbert Samuel immediately raced to Berlin, reminding Beck of the promise Groener had made and urging him to adopt a diplomatic posture. Sadly, by this point the hotheads in the Polish government had got the upperhand over the relatively more cautious Gabski. Jedrzej Giertych, the Polish Prime Minister, believing that the threat of war with Britain, France and Italy would hold Germany back, not only refused to return Ribbentrop, calling him a spy (indeed, it is unclear what he was doing in Poland-Slovakia if not negotiating with the Slovakian government, which was known to have pro-German sentiments) and sending an insulting note to the German Chancellery.

On receipt of the note, Beck informed Lloyd George, Graziani and the French Prime Minister Leon Blum that the affair was now a matter of honour and that he intended for Germany to “inflict a severe blow upon Poland and to read a lesson to her leaders which shall not soon be forgotten.” In response, Blum and Lloyd George said that, in that case, they would be required to abide by the Vienna Agreement and other agreements made between them and declare war on Germany. Italy notably sent a more ambiguous response and Spain, for what that was worth, sided with Germany.

Thus, on 14 January, Germany declared war on Poland and German troops poured over the border, at the same time recognising Slovakian independence and signing an agreement making it a German protectorate. The next day, following the expiry of an ultimatum, France and Britain declared war on Germany. This act, however, opened up a web of secret German treaties that immediately made the Anglo-French position far weaker than it had looked only a day earlier.

Italy and Russia did not declare war alongside their notional allies. Instead Russia revealed a secret German-Soviet Pact, in which the Soviets acknowledged the German annexation of Poland-Slovakia in return for the German government agreeing to buy large quantities of Soviet oil and natural gas (not, in truth, much of a hardship for them). Italy’s failure to declare war on Germany revealed that it had an agreement with Germany whereby Germany would accept Italy’s future conquests in the eastern Mediterranean in return for Italy recognising the German conquest of Poland. Once more, the world was at war.

 

[BigBlueBox]

Italy and Russia did not declare war alongside their notional allies. Instead Russia revealed a secret German-Soviet Pact, which accepted German absorption of Poland-Slovakia in return for selling them vast oil and natural gas supplies.

Uh what? Did Germany conquer Romania or something? Last time I checked it was the USSR supplying gas and oil to Germany, not the other way around.

 

[Drunkrobot]

Uh what? Did Germany conquer Romania or something? Last time I checked it was the USSR supplying gas and oil to Germany, not the other way around.

Yeah, if anything it's going to be Russia selling oil and gas to Germany, not the other way around.

 

[Rattigan]

Uh what? Did Germany conquer Romania or something? Last time I checked it was the USSR supplying gas and oil to Germany, not the other way around.

Yeah, if anything it's going to be Russia selling oil and gas to Germany, not the other way around.

That's the way round I imagined it (i.e. USSR recognises Germany's annexation of Poland-Slovakia; Germany buys lots of oil from the USSR). Apologies if that's not clear. I've edited the original posting.

 

[Nyvis]

That seems a bit lopsided for the USSR. Especially if Germany take over all of Poland. If they just knock it down and leave a neutral-ish government to protect an ally in Slovakia, maybe. If we compare it to the OTL treaties to the same intent, it sounds pretty paltry, when the USSR could use the opportunity to gang on Germany before it gets unstoppable.

Unless they're as busy with purges as OTL, and even then they can probably get a better deal.

 

[Rattigan]

That seems a bit lopsided for the USSR. Especially if Germany take over all of Poland. If they just knock it down and leave a neutral-ish government to protect an ally in Slovakia, maybe. If we compare it to the OTL treaties to the same intent, it sounds pretty paltry, when the USSR could use the opportunity to gang on Germany before it gets unstoppable.

Unless they're as busy with purges as OTL, and even then they can probably get a better deal.

So I think it's worth remembering that the Polish-Slovakian Commonwealth doesn't look like OTL's 1919-39 Polish Republic: it's basically the bits of old Prussian Poland grafted onto Austrian Slovakia and Lodomeria. Russian Poland is still part of the Soviet Union as the Polish SSR. In that context, Germany can portray its occupation of Poland basically as reconquering territory that is rightfully hers anyway. The other thing is that, internally, the Soviets haven't done the military purges of OTL but the government is very concerned about the possibility of a Bonaparte emerging and aren't convinced that they could win a war with Germany in any event. It's also worth mentioning that TTL Germany is lead by a bunch of conservative aristocrats (who've effectively been running a command economy in Germany for a decade or more by this stage anyway) rather than genocidal fascists so the chances of them invading Russia directly can perhaps be perceived as lower than OTL (rightly or wrongly, we shall see).

But, yeah, you're probably right. I think a lot of people TTL will be confused about why the Soviets went along with this and there will have been significant divisions with the Soviet government about the correct stance to take re Germany. But that's the official stance anyway...

 

[Nyvis]

If they have the Polish SSR, it kind of make sense to let an independent and nationalist Poland die. On the other hand, it may anger their Polish subjects. Unless they take in refugees and make a show of that?

 

[Rattigan]

So, I plan for the updates on the war effort and other assorted political updates to take about the next two weeks, after which we'll be back on a primarily domestic and Commonwealth political and economic focus. As I think I've mentioned before (and you've probably been able to work out), military history isn't really something I'm terribly interested in or knowledgeable about and so, while I think everything kind of works out rationally and plausibly, I'm sure the military nerds amongst you will be able to pick out obvious errors and issues. After the end of this war, things will diverge further and further from OTL (in many ways most of this TL has been a prologue to a post-1945 TL) and so a lot of how this war pans out is so I can get people and/or countries to where I need them to be for the immediate postwar period. Anyway, apologies in advance for anything that seems dumb about the military history: I hope it doesn't impact your enjoyment of the TL as a whole.

* * *​

The Abyss Opens Once More: 1940

From left to right: The German delegation arrives ahead of the signing of the French surrender; Japanese troops prepare for the Chinese assault at the Battle of Pusan; General Montgomery surveys the scene following the Commonwealth landings in Galicia.


Poland fell in short order under the combined attacks of Slovakia to the south and the German army to its west and north. What was left of the Polish government surrendered in Gdansk on 28 January, confirming the German annexation of the territory. These events left Germany with not only the territories she had possessed in 1912 but also all of the German-majority lands of the old Habsburg Empire as well as Slovakia, Bohemia and Moravia. It was a remarkable achievement for the men who had lead the empire through the difficult times of the 1920s. They were the dog who had caught the car but, like all such dogs, they now needed to work out what to do with it.

Although a web of secret treaties had left Germany fighting only France and Britain, that was still clearly two enemies too many, especially with President Roosevelt issuing strongly-worded condemnations of German aggression from across the Atlantic. In his state of the union address, delivered on 13 February, Roosevelt warned that the United States had “fought to protect the world from Germanic tyranny once before and if necessary we shall do so again.” Beck immediately got in contact with the Kuomintang and between them they organised a (semi-) coordinated plan of attack. Although, in truth, both Chiang and Beck thought that the time was slightly too early, they reasoned that quick victories in Manchuria and France, respectively, could bring them the success they needed.

The Kuomintang had been planning for war with Japan for some time and had a clearly defined strategy both on land and sea. Germany, however, had not been planning on war with France at this stage and, immediately upon war beginning with Poland, they began to cast around for a plan. Eventually Beck settled on a plan that had been drawn up by Erich von Manstein, something which saved him from having an otherwise undistinguished career as a staff officer in eastern Prussia.

On 18 April 1940, Chiang commenced his attack on Manchuria by land, simultaneously invading the Japanese naval base at Liugong Island. Over the next week, the Chinese army experienced a series of sweeping victories, taking advantage of the Japanese reduction in military spending over the previous decade. By 25 September, the Chinese were in effective control of Liaoning and Kirin provinces and were threatening the main line of rail communications in Korea. Fighting over Liugong lasted for another two days but it was mainly a delaying action by the underprepared Japanese forces, who surrendered on 25 February with over 130,000 POWs.

At the same time, the Chinese navy under Chen Shaokuan played a clever cat and mouse game with the IJN using a strategy based around the use of their six extant aircraft carriers. Taking advantage of the IJN’s doctrine of ‘decisive engagement’, Chen would use his thin gunline to lure Japanese warships out of range of land-based air support, at which point he would use his aircraft to attack them from above. The most successful such operation occurred on 10 July, when dive bombers successfully sunk the battleships Mutsu and Nagato, then the largest ships in the IJN. These series of disasters lead to the quiet abrogation of the Kyoto Treaty and Royal Navy and Dutch ships began sailing north of the equator to support Japanese formations.

The destruction of the Mutsu and the Nagato lead to the fall of Inuki’s government and, for a moment, it seemed as if the Japanese military might step in and disestablish the civilian government. However, they stepped back from the brink. Instead, Saito Takao delivered an inspiring speech to the Diet on 17 July, demanding that Japan fight on in the name of protecting her people from Chinese tyranny.

By this time, however, things had gone from bad to worse for Britain and France. Spooked by the Chinese invasion of Manchuria, the ICS had immediately ordered the moving of large numbers of troops and ships to India and the Pacific, meanwhile warning the French army that they could only promise naval support in Europe. In May, under this cover, Germany had commenced a massive invasion through the Ardennes, bypassing the main French defences along the Maginot Line. French and Belgian defences were cut in two by the thrust and those on the north side were forced to retreat all the way to the sea, where over 300,000 French and Belgian soldiers were hastily evacuated by the Royal Navy. Outflanked and in full retreat, French forces abandoned Paris without a fight on 14 June. Spain declared war on France too on 15 June and invaded over the Pyrenees the next day. France surrendered for good on 25 June. Philippe Petain would form a notionally neutral government.

Also on 25 June, Italy and Bulgaria had also sent formal ultimatums to the Serbian and Greek governments, demanding the secession of Vojvodina to Italy and Macedonia to Bulgaria. When those ultimatums went ignored, Italy and Bulgaria invaded three days later. The Axis (as they would later begin calling themselves from September 1940) of Germany, Spain, Italy, Bulgaria and China was sitting in a pretty decent position by this point. But then the Spainish government, buoyed by the (relative) success of their invasion of southern France, did something very stupid. On 27 June, seeking to repay the humiliation heaped on them by the Treaty of Lisbon, Spanish troops invaded and occupied Gibraltar, capturing around 15,000 civilian and military personnel, although the naval and merchant shipping managed to escape. This, combined with the Italo-Bulargian invasion of Serbia and Greece, meant that Britain faced the very real possibility of losing control of the Mediterranean.

The fall of Gibraltar was an immediate and devastating blow for Lloyd George, who had, by many accounts, been looking to cut an honourable peace with the Axis beforehand. He was unceremoniously defenestrated by a motion of no confidence tabled on 29 June. However, far from crushing British resolve, has Primo de Rivera had (for unclear reasons, with hindsight) supposed, the occupation in fact meant that there was no way that Britain could not continue in the war. In place of the Welsh Wizard, the King sent for Winston Churchill, whose persistent warnings about the dangers of German militarism were looking pretty prescient. Churchill formed an all-party coalition and vowed to fight on with Britain’s ally Japan.

The first order of business was the recapture of Gibraltar. Guessing (correctly) that Spain was by far the weakest of the Axis, Commonwealth planning quickly focused on recapturing Gibraltar and knocking Spain out of the war as soon as possible. Beginning on 17 July, the Royal Navy organised a sealift of troops from Egypt into Andalusia while orchestrating an amphibious landing in Galicia under the overall command of Claude Auchinleck with General Crerar commanding the Andalusian Front and General Montgomery the Galician Front. On 21 July, the Royal Navy successfully sunk two of Spain’s three battleships at the Battle of Ferrol using torpedo bombers launched from aircraft carriers. At the same time, the Royal Navy began a blockade of the Italian ports in North Africa. Knowing that they could not successfully defeat the British at sea, Graziani chose not to attempt a reconquest and instead Italy and Britain set into a period of watchful tension in the Mediterranean, with naval squadrons periodically raiding one another but, for the most part, the Italian navy remaining in port in the Adriatic.

Meanwhile, in Asia, China commenced its invasion of Korea in July, driving south and securing significant victories at the Battle of Seoul and the Battle of Osan. Commonwealth forces (mostly Australians and Canadians) were hastily deployed alongside Japanese and Korean soldiers. At the Battle of Pusan in September 1940, Allied forces held off the Chinese advance long enough to evacuate the majority of their soldiers. Although the retreat was well-organised and served as something of a morale boost, it nonetheless left the Axis in control of the Korean Peninsula.

Over the course of August and September 1940, British forces would make steady advances in the north of Spain, cutting off Spanish land access to France following the Battle of Irun. In November, Montgomery launched his first assault on Madrid, which was repulsed by heavy fighting, with Spanish forces being reinforced by German troops and planes.

In December 1940, the Chinese navy made its most audacious attack yet: sailing its carrier forces almost straight up to the Japanese Home Islands and launching an air raid attack on the IJN as it lay at anchor at Hitokappu Bay. The losses - 3 aircraft carriers and 4 battleships sunk, 4 more battleships severely damaged - left Japan exposed ahead of what promised to be an attempted invasion next year.

 

[Rattigan]

The twist of the Knife: The World War, 1941

Left to right: German troops pushing through Ukraine as part of Operation Typhoon; Chinese soldiers engaged in house-to-house fighting during the Kyushu Campaign; the RMS Lancastria sinking as viewed from an attempted rescuer

Over the winter of 1940-41, Claus von Stauffenberg was transferred from his role on the General Staff and placed in charge of the Polish Population Division with authority over the newly (re)conquered Polish territories. While there, von Stauffenberg undertook a major programme of ethnic cleansing, not only returning the great Junker estates lost in the population exchanges of the 1920s but also making plans to systematically remove Poles from their lands and replace them with German settlers. In December 1940, the Soviet government raised its first protests, concerned especially about the possibility of a large Polish migrant crisis on the borders of the Polish SSR. This, combined with Germany’s stunning military successes in 1940 and the revelation of the secret treaties with Italy and the Balkan League, caused many in the Soviet government to reevaluate their support for Germany. In February 1941, Romania and the Soviets concluded an agreement to impose an oil embargo on Germany with the aim of forcing her to commit to a peace (at least in Europe) with Britain, possibly to be brokered by the Soviets. The actual result, however, was a good deal more complicated.

In the first place, the embargo precipitated a political crisis in Berlin over the future direction of the war, which resulted in Beck (as the head of the faction preferring peace) being forced into early retirement and being replaced as Chancellor by von Manstein at the head of an anti-peace faction. Von Manstein proposed an audacious plan to occupy Romania and capture the Russian oil fields in the Caucuses. To this end, they reopened the secret negotiations with the Turkish government, which had its own revanchist ambitions in the region.

In Spain, the Falange government began to have more success, managing to hold off Montgomery’s second attempt to capture Madrid in January and February. Von Manstein decided that, given that Commonwealth forces had cut off the land approaches over the Pyrenees, the Catalan government was remaining studiously neutral (albeit allowing the Axis to use its airspace) and the Royal Navy was looking invincible in the Mediterranean, the best way to force Britain out of the war was to damage its industrial base and break the resolve of its population to continue the fight. To that end, in April the Luftwaffe began a vast aerial bombing campaign of British cities and air defence infrastructure. At the same time, they also began a period of unrestricted submarine warfare in an effort to starve Britain of its support from the rest of the Commonwealth.

Later that same month, China and Germany commenced their major offensive actions of the year, with China launching fire-bombings of Tokyo and other Japanese cities in preparation for their land invasion and Germany invading and occupying Romania over the course of 6-18 April. One day later, Chiang commenced the invasion of Kyushu, the largest amphibious invasion in history at the time. The Japanese eventually ordered a retreat to Honshu on 1 June after suffering massive casualties. Two weeks later, the Germans commenced Operation Typhoon, a vast invasion of Russia designed to throw their defences into disarray and set up the capture of Petrograd in the autumn.

On 22 June, Chiang launched his invasion of the Kanto Plain. However, with few tanks and artillery ashore, the Chinese forces were unable to break out of their beachhead. At dawn on the 24 June, the second wave of the Chinese invasion was launched with supplies including armour and heavy artillery but this was intercepted by a combined Royal Navy-IJN fleet, which destroyed around two-thirds of the wave. Chiang immediately ordered the Chinese navy into the Korean Strait. In a skirmish in the Tsushima Strait, the Chinese navy succeeded in sinking two British destroyers and damaging six further ships (including two aircraft carriers), which caused Admiral James Somerville to withdraw his ships to Hokkaido.

Nevertheless, the Allied Navy remained a threat to the Chinese (who, it was now clear, did not have practical control over the sea lanes) and their troops in Japan only had an estimated 7 days of supplies and ammunition left, with casualties mounting on both sides. Chiang ordered further fire-bombings of Japanese cities and infrastructure, which convinced him that he had knocked Japan out as a potential opponent for the time being, even if he had failed to occupy the Home Islands. As such, he ordered his remaining reserves to stand down and prepare for redeployment to southern and western China on 28 June. The next day, 33,000 Chinese troops were successfully evacuated back to Korea while those who remained in Japan, some 65,000, surrendered.

The invasion was a resounding failure in pure tactical terms but, curiously, Chiang was not particularly downcast and the Allies weren’t particularly upbeat: the Chinese attack had devastated Japan’s internal infrastructure and the casualties she had sustained in the first 18 months of combat had effectively knocked her out of the war apart from as an auxiliary to her other allies. China, meanwhile, was able to absorb the personnel, technology and energy losses that she had sustained and now Chiang turned his attention elsewhere.

However, the Axis’ qualified successes of the first six months of 1941 came to be seen in a dramatically different light in July 1941. On the night of 17 July, a German U-Boat torpedoed the RMS Lancastria without warning, causing it to sink with the loss of 5,378 passengers and sailors, including 613 American citizens. Germany immediately ordered the cessation of her unrestricted submarine warfare and the drawdown of the bombing campaign of the British Isles, in an attempt to limit the diplomatic damage. However, the damage had been done and Roosevelt declared war on Germany and China on 16 August. Somewhat ironically, despite having taken power on the promise of providing stability and good governance, the Prussian Junker elite in the German military had dragged their country into a war with the three nations with the largest resources in the world.

Nevertheless, in the autumn of 1941, there were many indications that von Manstein’s gamble in Russia had paid off. Although the German invasion was not necessarily designed to conquer territory (even if some German planners contemplated the creation of buffer states in Ukraine and the Baltic), the German army had captured significant amounts of Soviet land, including all of Poland and most of Ukraine, inflicted over 500,000 casualties, destroyed over 20,000 planes and tanks and, finally, captured the capital of Petrograd in September. Elsewhere, in Asia Minor, Turkey entered the war on the Axis side, occupying Armenia and invading the first few miles of territory in the Soviet Caucuses. This put them well in a position to capture the Caucasus oil fields via a pincer movement in next year’s campaigning season.

However, the Soviet government managed to evacuate Petrograd before the German arrived, regrouping in Moscow. Bukharin would then attend the Aden Conference in November 1941, in which the Soviets would appear alongside British, American and Japanese delegations as the ‘Big Four.’ Together, they affirmed their commitment to pursue the “unconditional surrender” of the Axis powers, not accept a separate peace from any of their opponents, and for the United States to enter the conflict against both China and Germany.

As well as the Big Four, the conference was attended by representatives from the Commonwealth, Costa Rica, the Kingdom of Spain, El Salvador, Guatemala, Haiti, Honduras, Nicaragua, Panama, Ethiopia, Mexico, Egypt and Arabia, as well as governments in exile from Belgium, Poland, Austria, Greece, Luxembourg, the Netherlands, Serbia and Denmark. Together, all nations published the Declaration of the United Nations on 1 January 1942, affirming their alliances and a commitment to global reconstruction after the defeat of the Axis.

 

[Cool-Eh]

Just caught up. I'm really enjoying your timeline Rattigan!

I'm a bit confused about the situation of romania in the latest chapters. Are they communist TTL or just a soviet ally of convenience? And how have they fared now that Germany and the USSR are at war? has the german occupation proceeded or has there been more resistance?

 

[Rattigan]

Just caught up. I'm really enjoying your timeline Rattigan!

I'm a bit confused about the situation of romania in the latest chapters. Are they communist TTL or just a soviet ally of convenience? And how have they fared now that Germany and the USSR are at war? has the german occupation proceeded or has there been more resistance?

Romania and the Soviets are allies of convenience (basically they tried to get together and do what OPEC would do OTL in the 70s) and Romania is the same kinda/sorta constitutional monarchy it was OTL, minus Antonescu's coup in 1940 of course. The Romanian monarchs have kept good on their promise to rule like good Romanians and so have adopted a generally Germany-skeptic position for the past few decades.

The German invasion proceeded pretty smoothly - taking the whole country in a couple of weeks in the month or so before the beginning of Operation Typhoon. There is some occupied resistance (and the royal family fled into the Soviet Union, which gave them asylum because irony never dies) but nothing particularly major. I should probably have done a short paragraph about it but I thought the update was already getting rather long.

Glad you've been enjoying the TL.

 

[Rattigan]

The Last Burden: Sir Stafford Cripps in India

The Best of Enemies - Jawaharlal Nehru and Sir Stafford Cripps after the signing of the United Front Covenant


When the Commonwealth went to war in January 1940, India dutifully followed her imperial masters into the fighting. The Liberal Unionists, as expected, were fully behind the war effort, as was the League. The INC was divided over the issue. On the one hand, senior INC figures like Nehru and Gandhi had little sympathy with German or Chinese militarism (and, at least in Nehru’s case, a great deal of sympathy with the communism of Britain’s Soviet allies) but, on the other, many more radical figures such as Subash Chandra Bose and Chempakaraman Pillai wanted to use the war as an opportunity to force the British out of India.

In August 1940, Bose announced his split from the INC to found his own party known as the Jai Hind, taking 10 other members of the assembly with him. Jai Hind called for Britain to immediately leave India and to refuse to offer any form of cooperation until Britain’s departure. At first, Sikandar Hayat Khan and the Viceroy Lord Linlithgow were ambivalent about Jai Hind, as such a grouping’s numbers did not seriously threaten British control over the subcontinent. However, that changed with the discovery, in October 1940, of the group’s significant clandestine communications with Germany and China. The British authorities thereafter began an immediate crackdown on any and all forms of Indian dissent, including the arrest of not only members of Jai Hind but also the INC. Finally, in December, Linlithgow summarily closed the legislative assembly and returned India to direct rule from the Viceroy’s office, something Sikandar had counselled against.

The move generated the predictable rush of rioting and violence, at a level not seen since the aborted 1922 election. The response from Westminster was swift: Linlithgow was immediately removed from his post and in his place General Claude Auchinleck was appointed both Viceroy (as the 1st Earl Auchinleck) and Commander in Chief of the Indian Army; the legislative assembly was reinstated but now with Sir Stafford Cripps sent over to serve on a non-party basis in the now-combined role of Chairman and Speaker. Cripps and Auchinleck were confirmed in their positions in January 1941.

Cripps immediately halted the trials of those arrested under Linlithgow and began the process of releasing all political prisoners apart from those who could be proven to be supporters of Jai Hind. The half-dozen figures directly implicated in the intelligence report that revealed Jai Hind’s Axis links were sent to Britain to be jailed for the rest of the war. Although their confidence had been shaken by Linlithgow’s actions, the League and the Liberal Unionists were willing to go along with Cripps and continue their support for the war effort.

The INC was a different matter, with many leaders radicalised by being arrested in the winter of 1940. Cripps made efforts to bring them into the government, forming an all-party coalition to provide civilian oversight, with Nehru, B.R. Ambedkar and Sardar Patel all joining the cabinet. However, they and their supporters continued to cause trouble for the government. Cripps had sympathy for the idea of India joining the Commonwealth and was closely advised on this by Lord Ronaldshay (now Lord Zetland, having succeeded his father to the title in 1929). Therefore, in March 1941 Cripps promised the INC that, if they fully cooperated with the British government for the duration of the war, he would hold elections on the basis of universal suffrage within six months of the war’s end, to be followed by negotiations with the eventual aim of India joining the Commonwealth.

It was exactly the kind of big offer that the INC needed and later that month INC leaders visited the Viceroy’s mansion in New Delhi and signed the United Front Covenant, committing them to putting their full force behind the war effort. When Churchill heard about this in London, he flew into a rage and nearly ordered Cripps’ immediate recall. However, the Lord President of the Council and leader of the Labour Party, Clement Attlee, dissuaded him, pointing out that, although Cripps had technically overreached his mandate, it was more important to keep as much internal peace as possible in the face of the war.

 

[Nyvis]

This is the best the Brits will ever get out of India anyway. Cripps will probably be remembered as visionary.

 

[Rattigan]

Stopping and Starting All Over the World: The World War, 1941-42

Left to right: Soviet soldiers during the Battle of Grozny; General Slim surveys the scene during the Siege of Singapore; HMS Victorious suffers damage under fire from Chinese dive bombers during the Battle of Mussau


Following the failure of the invasion of Japan, Chiang decided to change his approach, this time to focus on knocking Britain off her perch in the Pacific. The unrest in India in 1941 and 1922 had convinced the Chinese that the British Empire in the Pacific was a hotbed of unrest and, in Chiang’s own words, “we only need to kick in the door to make the whole rotten structure collapse.” Hong Kong had been evacuated by the British in December 1941, leaving China’s main avenues of attack as through Malaya and over the Tibetan Plateau. Chiang took overall command of the operation, with Sun Li-jen in command of the Malayan Front and Chen Cheng in command of the Tibetan Front.

As a prelude, Thailand was occupied over the course of 6 hours on 21 December 1941 and Sun began his invasion of Malaya immediately afterwards, capturing Penang two days later while the Chinese navy occupied American naval bases in Guam and Wake Island, along with the Japanese islands of Okinawa and the Ryukyu Islands. On 1 January, the British Admiral Louis Mountbatten was appointed supreme commander for Allied forces in south-east Asia and India, with USAF Lieutenant General George H. Brett as his deputy and the Australian Field Marshal Thomas Blamey as overall commander of the land forces. Later that month, the Chinese launched an enormous combined-arms invasion of the Dutch East Indies, New Guinea and the Solomon Islands. The British were driven out of Malaya within a month and were forced to withdraw to Singapore. As the Chinese bore down on the city, the defenders made moves to evacuate and/or surrender. However, the order came down from Mountbatten ordered that the city should be defended at all costs, reasoning that its loss would lead to collapse in the East Indies, the splitting of the Allied forces in two and open up Indian Ocean routes to Chinese attack.

William Slim was promoted to General and given overall command of Singapore’s governance. The city managed to hold out under intense barrage as the Royal Navy struggled to keep it supplied. However, although the city held, the Chinese still had vast successes, occupying 90% of the Malayan Peninsula, Borneo, Sulawesi and much of New Guinea and the Solomon Islands. The fighting then became an intensely strategic one, as Mountbatten and Chun played chess with each other’s ships, hoping to gain control of the vital shipping lanes. In February, the Chinese successfully devastated a majority-Dutch force at the Battle of the South China Sea but a tactically inconclusive skirmish between the Royal Navy and the Kuomintang Navy at the Battle of the Java Sea only two months later prevented Chun from pressing his advantage.

In Europe, the Soviet army attempted to counter attack in Ukraine, planning to split the German army in two, but defeat at the Battle of Poltava in May put an end to those hopes. In June, Germany began its major offensive for the year with an assault in the south which took Rostov by the end of July. At the same time, Turkish forces invaded the Caucasus mountains, where they encountered fierce resistance.

Also in June, Chen’s forces crossed the Jinsha River on 23 June 1942, beginning what came to be known as the Battles of the Jinsha. Chinese forces outnumbered the Allied defenders (mostly drawn from Tibet, India and Nepal and commanded by Wavell, who was replaced in the Spanish Theatre by Harold Alexander) by around three-to-one but failed to penetrate the strong Allied lines in the gorges along the river. Because the British had spent several decades building up defences in a piecemeal fashion, their forces occupied higher ground than the Chinese and the invaders failed to make much headway before the battle ended in July. Another frontal assault launched two weeks later was also beaten back despite initial Chinese success.

In Spain, the Falangists launched an all-out campaign to reconquer Andalusia in the Battle of the Guadalquivir, which lasted from July until November. The attack was initially successful, prompting fears amongst the Allies that the Spanish might be able to advance down to Seville and split their forces once more. This was heightened when the French government handed their navy over to the Axis (although they stayed, notionally, neutral), giving them a powerful Mediterranean fleet once more.

The course of the Pacific Theatre shifted decisively against the Chinese over the course of the next two months. At the Battle of the Bismarck Sea on 3-4 July, the Royal Navy successfully engaged the Kuomintang Navy and succeeded in sinking a carrier and damaging two others. However, Chun still believed that he could draw the British into a trap, using a feint attack on New Ireland to draw in the Royal Navy, whereupon they could be set upon by Chinese aircraft and destroyed. However, what he did not know was that the Allies had already successfully broken the Chinese code transmissions and were able to set their own trap for the Chinese. Over the course of 4-7 August, the Royal Navy and US Navy caught the Chinese in a pincer movement (Royal Navy from the south and west and the US Navy from the North) north of Mussau Island. Although vice-admiral Shen Hongli managed to maneuvre most of his ships out of the trap, Chinese losses from the Battle of Mussau were still decisive: totalling 4 aircraft carriers and 2 cruisers, as against the American loss of an aircraft carrier and the British loss of a cruiser. Chun’s gamble had failed and Chinese naval power now looked totally blunted.

With the Chinese’s capacity for aggressive action greatly diminished as a result of their defeat at the Battle of Mussau, Chiang chose to focus on a belated attempt to capture Port Moresby by an overland campaign on Papua. Blamey, meanwhile, planned a counterattack against Chinese positions in the Philippines. Both plans started in July, but by mid-September, the Battle for the Philippines took priority for the Chinese and troops in New Guinea were ordered to withdraw from the Port Moresby area to the northern part of the island, where they faced Australian and British troops in the Battle of Buna-Gona.

Over the autumn, General Chen once more launched an attack in Tibet, but the Third Battle of the Jinsha once again resulted in large casualties without significant gains. A Fourth Battle commenced in November and wound down in December because of a shortage of supplies, with the Chinese again failing to make significant gains. Things were going better for the Axis in the Caucuses, however. In September, the German army defeated the Soviets at the Battle of Maikop. A month later, Turkish and German soldiers successfully linked up at the Battle of Grozny, annihilating an opposing Soviet army and capturing the city.

In November, the former French fleet sailed for Andalusia with the ambitious mission to link up with Spanish forces advancing towards Seville and Cadiz. However, the 10 French ships that did set sail were ambushed by a Royal Naval force under Admiral Cunningham as they sailed past Minorca. At the subsequent Battle of Minorca, the Royal Navy sunk 3 battleships and 4 destroyers for the loss of only 5 damaged battleships, another demonstration of the Royal Navy’s devastating use of its carrier fleet. This defeat, combined with dwindling supplies and ammunition, destroyed Spanish morale and resulted in them retreating back along the Guadalquivir.

 

[Thomas Wilkins]

“we only need to kick in the door to make the whole rotten structure collapse.”

Now, where have I heard that before?

 

[Rattigan]

Now, where have I heard that before?

I don't know what you're implying...

 

[Rattigan]

The Fickle Gods of Momentum: The World War, 1943

From left to right: Soviet tanks advancing at the Battle of Zaporizhia, September 1943; Chinese troops charging at the Ninth Battle of Jinsha, November 1943; Spanish troops retreating from a suburb of Madrid ahead of the final Commonwealth advance, March 1943; American heavy armour unloading following the landings at Biarritz, July 1943.


1943 began with China looking in severe difficulty, damaged at sea and unable to force a decisive breakthrough in either Tibet or Malaya. Germany, however, was looking in a paradoxically strong position: her Spanish ally was on the verge of collapse and she had failed to neutralise Britain but she was also on the verge of capturing Baku, giving her control over the entirety of the Caucasus oil fields. Indeed, the concern amongst the Western Allies that the Soviets would seek a negotiated peace was so strong that a conference in Trondheim was hastily organised in November 1942 to hash out the plans for the next year. Roosevelt and Churchill were both wary of Tukhachevsky’s (having been appointed Premier of the Soviet Union and Grand Marshal of its armies in October 1941) demands that they open a fresh front in France. Instead, they promised renewed offensives against the Turks in Asia Minor to draw pressure away from the Soviets in the Caucasus, along with a renewed assault in Spain.

In Spain, British troops under Crerar conquered the remainder of the Spanish coast in a whirlwind campaign during January and February 1943, culminating in the capture of Alicante on 2 February. This left Madrid and a few other Falangist holdouts in the centre of the peninsula and even these were only maintained with the harshest of repression. On 27 February, Germany evacuated what forces it could by air, leaving Spain to her fate. On 26 March, Montgomery and Crerar began a general offensive, resulting in the capture of Madrid five days later and the arrest, the following day, of Primo de Rivera and other prominent Falangists as they attempted to flee for Catalonia.

After a winter lull in Tibet, the Chinese launched another Battle of Jinsha in March 1943, which once more petered out with little strategic gain on either side. Over the summer, four more battles along the Jinsha erupted. The Sixth Battle of Jinsha, launched by the Chinese in August, resulted in greater success than the previous attacks, gaining nothing of any particular strategic value but managing to take Chamdo, which boosted Chinese spirits. The Seventh, Eighth and Ninth Battles of Jinsha (all fought between September and November) managed to accomplish little except to wear down the already exhausted armies of both nations.

The fall of Spain opened up a potential second front in Europe, a long-term strategic aim of the Allies. Germany immediately used this opportunity to attempt to broker a peace with the British and the Americans, reasoning that they had little love for the Soviets (which was, to an extent, true) and would willingly abandon them if needed (which turned out to be untrue). Roosevelt, too, was anxious to give his American troops a showing as the main combatants, with the majority of their engagements in the Pacific having been alongside the Royal Navy or in less flashy engagements in the mid-Pacific. To this end, he won the approval of Churchill and Tukhachevsky to open an American-lead front in the south of France.

In June, the Commonwealth, with support from American forces, began major operations to isolate Rabaul by capturing surrounding islands and the US Navy attacked the Chinese Central Pacific perimeter at the Gilbert and Marshall Islands. Meanwhile, Allied forces, predominantly Egyptian and Ethiopian, invaded and occupied the Italian colonies of Libya and Eritrea, respectively. Because of British control of the Mediterranean, the Italian government could not credibly combat either of these.

The three major operations of the year all opened in July: the Americans made a surprise amphibious landing at Biarritz, attempting to link up with an American-lead invasion over the Pyrenees; a combined Anglo-American-Arab army commenced a pre-planned invasion of Asia Minor; and the Soviets launched an enormous invasion of Ukraine down the River Dnieper. The initial landings in France were successfully commanded by Douglas MacArthur, helped in part by the breaking of German secret codes by British intelligence. In particular, the Battle of Biarritz lead to the rapid collapse of the still-notionally-neutral French forces and resulted in the disorganised retreat of German troops on the Franco-Spanish border back to the north of France. The Soviet operation along the Dnieper was similarly successful, with a series of enormous tank battles being fought along the river before Soviet forces retook the city of Zaporizhia in September 1943.

The going in Asia Minor was tougher, as a mixture of the terrain and the Turkish defences in depth prevented the Allies from fighting the war of maneuver they wanted. Fighting was more akin to that of the Great War, with infantry formations fighting over small pieces of territory, particularly along the Malatya Line, the Alexandretta Beachhead and the Antep Line. In particular, fierce resistance at the Malatya Line forced the Allied advance to a halt in the autumn.

With the German lines in Russia split in two, a combined effort of their Bulgarian, Turkish and occupied Romanian allies managed to allow the Germans to withdraw much of their forces from the Caucasus to the west of the Dnieper. There, freshly supplied with Caucuses oil and new tanks from Germany, they prepared for another great mechanised advance to regain the territory they’ve lost.

 

[Rattigan]

The Deluge: The World War, 1944

Left to right: American marines advancing under fire in Normandy; Gurkhas clear Chinese positions during the Allied reconquest of Malaya; HMS Warrior taking damage during the Battle of Leyte Gulf; Chinese POWs after the Twelfth Battle of Jinsha

With the momentum of the war seeming to have swung behind the Allies, a conference in Tehran over the winter of 1943-44 reorganised their command structure. The Western Front (i.e. France and Spain) was under the overall command of Dwight Eisenhower, the Eastern Front was commanded by Mikhail Tukhachevsky, the Middle Eastern Front (essentially the Anglo-American-Arabian army in Asia Minor) by Harry Crerar, the Indian and South Asian Front by Louis Mountbatten and the Pacific Front by Chester Nimitz. Negotiations also took place over the return of the Japanese to active fighting in Asia, with them having been relegated largely to naval duties in support of the Royal and US Navies since the failure of the Chinese invasion.

On 16 March 1944, Germany made a vast attempt on the Eastern Front to launch a counter-offensive in the Ukraine, hoping to smash the Soviet forces against the Dnieper, encircle them with their backs against the Black Sea and force a political settlement. Despite initial gains for the Germans, the attacks were poorly conceived, lacked adequate support (Germany had had to commit most of its remaining reserves to the initial offensive) and was repulsed by the end of April with no strategic objectives fulfilled and at the cost of over 90,000 German casualties killed, wounded and captured (Soviet losses were similar but by this point her pools of men and resources vastly outnumbered Germany’s).

Following the failure of the Dnieper offensive, von Manstein was moved to one side and quietly placed under house arrest. His replacement as Chancellor was Carl Friedrich Goerdeler, who immediately sent out feelers to the British and Americans, seeking a separate peace with them which, he thought, might put Germany in a position to either encourage the Soviets to the negotiating table or enable Germany to fight a successful defensive war. Such feelers were summarily rejected by both British and Americans. In response, Goerdeler resigned himself to leading Germany through a last ditch defence of everything he and his social class had fought for.

Japan’s land forces finally re-entered the war in April, with an invasion of Korea. By June, Japan had largely re-conquered the peninsula, bringing to an end the periodic Chinese air raids on the Home Islands from Korean airfields. In Tibet, further Chinese assaults in May and August yielded only miniscule gains for them. This left their soldiers’ morale crippled and minor mutinies sprung up along their lines. Also in May, General Slim lead a breakout from Singapore that drove the Chinese out of Malaya by July. The Malayan Campaign resulted in over 55,000 Chinese casualties and the sacking of General Sun.

In June, there were dramatic developments on both the Western and Eastern Fronts. On the Western Front, a combined Anglo-American force commenced an amphibious invasion of Normandy, meeting up with MacArthur’s forces in the south of France and capturing Paris by a pincer movement in the last week of August. The new French provisional government under Charles De Gaulle immediately declared war on Germany and the Allies made steady gains during the course of the year but successful defensive actions from the German army meant that Eisenhower’s forces were stuck on the left bank of the Ruhr by the end of the year.

On the Eastern Front, the Soviets’ June offensive consisted of an attack over a vast front from Belarus to the Crimea that almost completely annihilated the German forces arrayed against it. Soon after that, another Soviet offensive finally forced the Germans out of the Ukraine and Russian Poland. Another strategic offensive in eastern Romania cut off the considerable German troops there, liberating Romania from German occupation (with the help of a campaign lead by the pro-Russian King Michael I) and triggering a coup in Bulgaria, which brought down the pro-German government and brought in a new one which immediately joined the Allies.

In the Pacific, the Royal and US Navies continued to press back the Chinese perimeter. In mid-June 1944, the US Navy began their Mariana and Palau Islands campaign and the Royal Navy decisively defeated Chinese forces in the Battle of the Philippine Sea. These defeats gave the Allies more air basis from which to launch heavy bomber attacks on northern Chinese cities. They also lead to an attempted coup attempt against Chiang in July 1944, lead by General Sun, which failed with the arrest of all of the main conspirators.

In July, a British naval detachment commenced a small amphibious landing in Greece, which ended with a general uprising against Italo-Bulgarian rule and the liberation of the country on 17 August. By this point, Partisans under Josip Tito had been fighting a guerilla campaign against the Italo-Bulgarian occupation for four years and controlled good portions of the country. With British soldiers advancing and King Peter II back in the country after four years of exile in London, the Italian forces began to be pushed back hard.

With the support of the newly-friendly Bulgarian army, British-supported units from the south of the country managed to liberate Belgrade on 20 October, leading to Graziani calling for a general retreat into Bosnia and Croatia. A few days later, the Soviets commenced a massive assault on Germany-supporting Hungary which would last until February 1945. The only dark spot for the Soviets was their continued failure to crush the Finnish rebels who had risen up in 1941. An armistice signed in September 1944 effectively accepted Finnish independence.

In late October, Royal Marines commenced an invasion of the Philippine island of Leyte. Soon after, the Royal Navy scored another large victory at the Battle of Leyte Gulf, the largest naval battle of the War and, by some measures, the largest naval battle in history. The ground Battle of Leyte ground on until December 1944, launching the Philippine Campaign for the recapture of the entire archipelago. In Tibet, Wavell finally felt ready to go on the offensive, launching the Twelfth Battle of Jinsha in October. Using infiltration tactics and targeted air bombing, the Anglo-Indian-Tibetan force was able to bypass the Chinese lines, attacking them in the rear. Over 250,000 Chinese soldiers were taken prisoner and the remainder entered into a state of full retreat.

 

[Komnenos002]

Just caught up, I love the outbreak of hostilities you've charted. There's something very grounded in the mistakes made by all involved that causes the war to ignite and spiral out of control.

The Entente thinks they have Germany cordoned off - their information is wrong and past abrasiveness costs them support.

The USSR drastically miscalculates on the consequences of supporting Germany.

If Germany wanted to avoid a general war, they shouldn't have pulled the same stunt people pulled in WW1 - making defensive alliances secret and thus a nonfactor in deterrence.

 

[Rattigan]

The Battle of Lismore: Keynes, Bukharin, White and the making of a New World Order

Lismore Castle - the site of the United Nations Monetary and Financial Conference of June 1944

John Maynard Keynes and Harry Dexter White on 11 June 1944, the day before White's recall


By 1944, when the tide of the war had turned decisively in favour of the Allies, more thought could be given to postwar reconstruction, especially the global financial system. Although most governments had clambered out of the recession of 1929-30 by the end of 1939, they had done so in piecemeal ways which meant that global recovery was uneven and had left the global economy vulnerable to further shocks. A conference was called for 1 June 1944, where future governance structures for the global economy would be hammered out. Held at Lismore Castle in County Waterford and hosted by the Duke of Devonshire, it came to be called the Lismore Conference.

The conference brought to the fore a number of divisions between the Allies and was dominated by arguments between the Americans, the Soviets and the Commonwealth. In the first place, the chief Soviet negotiator, Bukharin himself, was anxious that his nation not sacrifice millions of its people simply to make a world safe for bourgeois capitalism. Keenly aware that the Soviets had benefited from being able to make their own agreements with individual nations while protecting their own internal command economy, he was suspicious of any agreement that would require the Soviets to open up to free trade. Harry Dexter White, the chief American negotiator, had a very different set of goals in mind: to promote international development and open up the world as a market for cheap American exports.

Although their economies had rebounded pretty effectively from the depression of 1929-30, Commonwealth economists were keenly aware of how delicately balanced the recovery was. In addition, British merchant shipping had been severely damaged by the war, particularly during the period of unrestricted submarine warfare between April and July 1941. Although the German policy of bombing civilian industrial areas had failed to effectively damage the British will to fight, it had done significant damage to British industrial capacity. Instead, Britain had relied on the supply of money and goods from Commonwealth countries (primarily India, Canada and Australia) under what came to be known as the Chifley Plan (named after the Australian Treasurer Ben Chifley). Under the Chifley Plan, £10.2billion was transferred to Britain, either in money or equipment, free of use (a further £1billion was supplied to Britain by the United States from November 1940, under a programme called Lend-Lease). (In practice, much of the money was spent on the war effort and so found its way back to the other Commonwealth members through a variety of means and most of the equipment was for use by the now-fully-integrated Commonwealth military. So the practical effect of these transfers can perhaps be questioned.)

Nevertheless, serious British macroeconomists and thinkers had come to a number of conclusions. Firstly, the fluctuations of war and global economic development meant that the UK, by herself, was no longer the hegemonic creditor nation it had been only five years earlier. Only as part of the Commonwealth could it retain superpower status and compete with the United States and the Soviet Union. It was therefore imperative that the new world order permit the continuation of the process of shared Commonwealth development begun in the 19th century by the general agreement on tariffs. Secondly, it would no longer, on balance, suit the UK to live in a world where creditor nations held all the power - while the UK retained significant creditor power, expenditure on the People’s Home Programme and warfare had resulted in substantial debts being accrued payable to other Commonwealth countries and the United States. The lead British negotiators, Harold Nicolson and John Maynard Keynes, were anxious to preserve the Commonwealth links (in other words, not open it up to outside free trade), and create a system whereby trade could be rebalanced on two levels: within the Commonwealth and then between the Commonwealth and the rest of the world.

None of the Big Three had sufficient economic clout overrule the other two and so the conference became a battlefield of diplomacy and shifting alliances. The net result was the creation of three global governing bodies for international trade and finance. Firstly, the World Trade Organization (WTO) was established as the successor to the Bank for International Settlements and to be a body that would provide a forum for negotiating trade agreements, registering them transparently and a dispute resolution process. White’s proposals that the furthering of free trade would be written in as one of the WTO’s principals were shot down by a united front of the Soviets and the Commonwealth.

Alongside the WTO, the Soviets and the Americans teamed up to pressure the Commonwealth into accepting the founding of the World Bank Group (WBG). The WBG’s remit would be to provide loans and other financing for countries seeking to undertake human development, infrastructure and governance projects. Although it was initially conceived as a way of rebuilding war-ravaged Europe come peacetime, the Commonwealth negotiators (correctly) perceived that it could be used by developing colonies (particularly India) to go get financing behind Westminster’s back.

The Commonwealth did not get everything it wanted out of the creation of the WTO and the WBG but that was, to Keynes’ mind, irrelevant next to the creation of the final prong of the so-called ‘Lismore System’: the International Clearing Union (ICU). The creation of the ICU was a response both to the way that the first half of the twentieth century had changed Britain’s (and the Commonwealth’s and the Empire’s) economic and geopolitical position and to Keynes’ insights about the cause of not only the 1929-30 crises but also economic crises more generally.

Keynes forcefully argued that the overarching reason why financial crises occur is trade imbalances between nations. Countries that accumulate large debts often did so as a result of a trade deficit with other countries, meaning that, as their debts become bigger, it becomes harder for them to generate trade surpluses. This, in turn, creates a class of debtor nations trapped in a state of low development and debt that threatens the entire economic system with periodic crises. In practice, there is very little that debtor nations can do in response to this, reliant as they are on the goodwill of creditor nations.

In response, Keynes proposed that the ICU would issue a unit of account - called the bancor - which would be exchangeable with national currencies at a fixed rate but which could not be held or traded by individuals (although gold could be exchanged for bancors). Each country would therefore have a bancor account at the ICU, with an overdraft facility equivalent to half the average of its trade over the previous five years. Any country with a deficit equating to more than half of its overdraft would be charged interest and obliged to devalue its currency to prevent capital flight. Concomitantly, countries with a bancor credit more than half the size of its overdraft facility would be charged interest and required to increase the value of its currency to encourage the export of capital. Surpluses which persisted for too long would be confiscated and used to clear other nations’ debts.

White had been adamantly opposed to the creation of the ICU, instead proposing a system of fixed exchange rates backed by the dollar. However, both the Commonwealth and the Soviets supported the idea, following negotiations between the two of them which resulted in a secret agreement to let countries in a customs union pool their bancors in certain circumstances. But when White was abruptly recalled to Washington on 12 June to answer espionage charges and died (of an apparent suicide) while in Reykjavik on the way home (the involvement of British and Soviet intelligence in this has often been suspected but never proven), the American approach finally became more conciliatory. In the end, the Americans agreed to the creation of the ICU on the proviso that the Americans, the British (in practice the Commonwealth) and the Soviets each get to nominate one member to its governing board at all times, with veto power over decisions. The three also came to an informal agreement whereby the ICU would be chaired by a Briton, the WTO by a Soviet and the WBG by an American.