WW 1 end earlier

Anderman

Donor
During reading the board i learned that the British Empiere was broke or near broke in 1917 or had no more assets to secure loans in the USA.
How would the financial situation of Great Britain develop if the German Empire didn´t lose the and pays no reparation in any form but the war ends march 1918 ? Could UK recover faster from the Great War?
 
During reading the board i learned that the British Empiere was broke or near broke in 1917 or had no more assets to secure loans in the USA.
How would the financial situation of Great Britain develop if the German Empire didn´t lose the and pays no reparation in any form but the war ends march 1918 ? Could UK recover faster from the Great War?
In short no. If the US didn't enter the war when it did, UK and France would went bankurtpe in a few months. I don't know what UK had to put of for the loans, but it would became American with short time.
 

Deleted member 1487

In short no. If the US didn't enter the war when it did, UK and France would went bankurtpe in a few months. I don't know what UK had to put of for the loans, but it would became American with short time.

They could still fight on, but at reduced capacity. Loans were still incoming from the colonies and Britain itself still had some financial cards to play, but it would cost them dearly post war, especially if there was no guarantee they would win and get Germany to pay for them.
That said the war would end before 1918, especially as Russia, without the loan issue being dangled over it, would probably end the war sooner than OTL, perhaps before the failed Kerensky offensive of OTL.

The UK would be in a tricky spot post war though. Their recovery would be slow, as the US won't be making more loans to them and Britain took out almost all of the Entente's loans from the US because they could get a better rate from the US than her allies. As a result much would depend on how France and Russia could pay them back. As it was France, even with a white peace, is going to have damages equal to 150% her annual GDP that Germany won't be paying for. The worst part is that all of the damage is in the most productive industrial and agricultural lands of the nation, not to mention most of the coal and iron mines, which were all wrecked.

Plus Britain will have made loans of her own from her own banks to her allies and to the government, so again, much depends on the capacity of the loanees to pay for their debts. Russia and France were the two most devastated nations in the war, so its going to be rough for them, that's for sure. Germany is going to have some serious issues with inflation even if the war ends in 1917, as will the much more unstable and likely soon to fight a civil war Austria-Hungary. In fact Germany here will be occupying Poland and Lithuania and probably will be paying for damages in Belgium and after the war will need to fight in all of her new European holdings plus prop up/annex parts of the Habsburg Empire, which incidentally owes Germany quite a bit of money. Not as much as France or Russia owes Britain, but still substantial amounts. Besides that Germany owes Holland a fair sum too, as she made major loans to Germany during the war to allow her to conduct foreign trade and fight.

So Britain, France, and Russia will all be heavily in debt post war and likely economically depressed with political violence and social instability, while Germany is probably going to lose her only ally, have to fight insurgents, and will have to cope with serious inflation, so won't be sitting pretty either. Long term Germany is in a better place if she can avoid a tariff war, but that isn't guaranteed.

Expect tariffs among all powers as part of lingering resentments, while the US cuts the Europeans out of other markets thanks to having retained her peacetime economy during the war and snapped up all the unserviced markets that the Europeans usually dominated. And with it would be a milder, but still unpleasant, version of the Great Depression in the 1920's, but one that hurts the former Entente much worse than OTL. British-American relations will probably get pretty nasty over the loan issue.
 
War Loans and Debts

After a short search the following figures appear
OUTSTANDING WWI LOANS
Britain owed to US in 1934: £866m
Adjusted by RPI to 2006: £40bn
Other nations owed Britain: £2.3bn
Adjusted by RPI to 2006: £104bn



http://news.bbc.co.uk/1/hi/magazine/4757181.stm

There are no figures for Germany but numerous articles on how poor the war economy was run purely for the war effort, for example :-

"The German economy was also going through more and more strain as the war went on. In 1914 the German economy was almost completely reliant on outside trade and therefore not ready for a protracted war. They had absolutely no large stocks of guns or ammunition and were forced to employ chemists to find replacements for substances that were made scarce by the war. They discovered things like a replacement for gunpowder ingredients, synthetic rubber, and the use of oil instead of coal in machinery.#5
There was such a shortage that riots had already begun in 1916. The armed forces took all the hired labour out of the economy. The immediate consequences of the war on the economy were more government control of goods and production, army control of what determined economic policy, and an increase in scientific pursuit."


http://www.firstworldwar.com/features/germanyduringww1.htm

#5. Ryder, A. J. Twentieth Century Germany From Bismarck to Brandt. New York: Columbia University Press, 1973, p. 154

Your premise that Britain would economically collapse before Germany is most likely incorrect
 

Deleted member 1487

After a short search the following figures appear
OUTSTANDING WWI LOANS
Britain owed to US in 1934: £866m
Adjusted by RPI to 2006: £40bn
Other nations owed Britain: £2.3bn
Adjusted by RPI to 2006: £104bn



http://news.bbc.co.uk/1/hi/magazine/4757181.stm

There are no figures for Germany but numerous articles on how poor the war economy was run purely for the war effort, for example :-

"The German economy was also going through more and more strain as the war went on. In 1914 the German economy was almost completely reliant on outside trade and therefore not ready for a protracted war. They had absolutely no large stocks of guns or ammunition and were forced to employ chemists to find replacements for substances that were made scarce by the war. They discovered things like a replacement for gunpowder ingredients, synthetic rubber, and the use of oil instead of coal in machinery.#5
There was such a shortage that riots had already begun in 1916. The armed forces took all the hired labour out of the economy. The immediate consequences of the war on the economy were more government control of goods and production, army control of what determined economic policy, and an increase in scientific pursuit."


http://www.firstworldwar.com/features/germanyduringww1.htm

#5. Ryder, A. J. Twentieth Century Germany From Bismarck to Brandt. New York: Columbia University Press, 1973, p. 154

Your premise that Britain would economically collapse before Germany is most likely incorrect

Britain's economy by itself was able to survive better than Germany's however France's was not because most of its industrial raw materials (iron, coal, etc.) were occupied by the Germans. It needed to import everything including food. Its finances were nearly exhausted and would require Britain to loan them vast amounts of money to keep them in the war even at half of their 1917 output.

Also your quote about the German economy is at best a flawed summary. For a fuller picture start here:
http://books.google.com/books?id=HT...&resnum=6&ved=0CDkQ6AEwBQ#v=onepage&q&f=false

The issue was very complex and Germany was being crippled, but much of it had to do with mismanagement due to political infighting rather than lack of capacity.

Finally your quotes about British loans is somewhat interesting, considering that by 1934 the loan issue was politically resolved by looting Germany post war, getting repayments for loans taken out for allies, and US working with Germany and the Entente to link the loans to German reparation payments.
 

Anderman

Donor
The main reason why started this topic was mainly because how a shorter war would effect Britain after war without german reparation. Could Britain repay the loans easier ?
 

Deleted member 1487

The main reason why started this topic was mainly because how a shorter war would effect Britain after war without german reparation. Could Britain repay the loans easier ?

It depends on the circumstances of the war ending sooner. France and Russia probably won't be able to pay for a while, thanks either to German reparations or needing to rebuild their shattered countries. The total loans taken out were about $2 billion in 1914 values, so it could be paid even after the war ends in 1917, but with hardship at home. Much of this was further lent out to the Italians, French, and Russians, so Britain may just pay back the US and wait for their allies to come up with payments. Military spending will be much lower after the war and veteran benefits/care will be a large expense. Taxes probably will have to go up, but remember that Britain also owes money to her colonies, who loaned her large amounts too, and her own private banks. THAT will cost her quite a bit, because she even outspent Germany during the war.

http://www.amazon.com/Economics-World-War-I/dp/0521852129
This book has more detailed information, but I don't have it with me at the moment. They spent something like $44 Billion in 1914 values ($950,944,640,000 in 2010) in the full OTL struggle IIRC, which I'm don't think included loans to their allies. They loaned about $4 Billion IIRC. I can check and post the actual values tomorrow. Even with 2/3rds of this Britain will be in debt for some time after the war, especially if they are owed by their allies/foreign companies (as there were private loans from private banks, to private foreign companies during the war too).
 
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