Economic Warfare (Part Six of How we planned the Great War)

Up until 1905 it had been the duty of commanders in the Royal Navy to watch Britain’s enemies’ fleets, and to bring them to action if they left harbour, and to take whatever measures they thought most proper for that purpose. The culmination of such work would be a big and decisive sea battle in which the superior Royal Navy would, of course, triumph.

That objective was not abandoned in 1914 but there had been, before 1906 and the war planning for Germany, no suggestion in Admiralty orders that the fleet would be now used largely as an instrument of economic warfare.

That departure is one of the strongest pieces of evidence of the substantial and thorough effort that went into the innovatory type of war that Britain put its mind to waging against Germany.

In the Official History of the Blockade A.C. Bell notes that in 1906,

“… the Admiralty formally assured the Committee of Imperial Defence, that they intended to blockade the German coasts if they could. They added, however, that they could not undertake to do so as soon as war began. The blockade of Germany was, therefore, contemplated as a subsidiary object of naval warfare, to be pursued when the strategical chess board was clear. It does not appear as though the Admiralty had, at this date, estimated what the consequences of this blockade would be.

“Shortly after these orders were issued, two important changes were made in the naval service, and these changes very much altered both the form and substance of all war orders issued subsequently. First, the Admiralty founded a war college for promoting the scientific study of war and strategy; secondly, a committee for war plans was assembled at Whitehall, and the president of the war college was made a member of it. These two additions to the naval administration were made in recognition of a growing conviction in the navy, that the traditional practice of giving the commander-in-chief a free hand was insufficient, and that the old-fashioned instructions, then in force, would have to be supplemented by detailed plans, prepared after all an enemy’s weak points had been scientifically considered. It was during the years 1905 to 1907, at all events, that war plans on an entirely new model were prepared.”

“In July, 1908, the first of these plans was completed. The great alteration was that, henceforward, the Admiralty, and not the commander-in-chief, were responsible for the strategic conduct of war, and the distribution of the fleet. Secondly, provision was made only for war against Germany, and the Admiralty stated, that the essence of their plan was to keep a preponderant force in the neighbourhood of the North Sea. Very detailed provisions were, therefore, made for concentrating the squadrons allotted to the North sea and the Channel; more than this, two groups of destroyers were to be stationed permanently off the German coast, so that something resembling a blockade of the German bight would have been imposed, if the plan had ever been successfully executed. The commander-in-chief was, moreover, specifically ordered to stop all enemy trade in the North sea; an economic objective was thus inserted into the war orders for the first time, and added to the old military duties.” (The Blockade of Germany, p.28)

The object of decimating German commerce was made the subject of further detailed study and calculation during the five years from 1908. In May of that year Admiral Slade asked that a scientific enquiry be instituted. His minute to the Admiralty said:

“The vulnerability of Germany through her overseas supplies being nowadays an accepted fact, it is considered desirable to obtain answers to the enclosed questions in order to gauge her actual dependence on these overseas supplies. The answers to these questions may indicate in a useful manner how far Germany does depend on overseas supplies, and to what extent these overseas supplies can be deviated from their normal to new channels in time of war…

“Assuming Germany’s import and export trade by her national ports to be at a standstill in time of war, how far could she draw supplies:
(a) of food-stuffs
(b) of raw material
“from neighbouring countries and from oversea through neutral ports by means of rail and inland water communication? Also to what extent she could export goods oversea through neutral ports?

“Assuming Germany could draw in sufficient raw material to give employment to her manufacturing centres in war time by such means as mentioned above, would the additional transport charges increase the cost of her manufactures to such an extent as to handicap her in competing in foreign markets?

“Russia at present producing sufficient surplus wheat to supply Germany with all her import need, could such be transported by inland waterways and railways into Germany? To what degree would such transport increase the cost of the wheat so carried?

“Antwerp and Rotterdam, being the two great neutral ports nearest to the manufacturing districts of Germany, how far could these two ports in war time accommodate neutral shipping carrying for Germany, i.e. how far could they accommodate the normal tonnage displaced from German national ports?

“Assuming that in war time the German North sea ports are closed to trade except Emden, are there sufficient rolling stock and lighters to serve German needs through the Ems and Rhine, supposing that the trade could be dealt with on the quays?

“Does any large amount of German foreign trade pass through neutral ports other than those of Belgium and Holland?

“Assuming the Baltic in war time to be closed to a great extent to the British trade, how far would Germany benefit by taking over the trade which Great Britain would lose?” (The Blockade of Germany, p.25)

The Foreign Office transmitted this enquiry to Sir William Ward, the consul-general at Hamburg, to Sir Cecil Hertslet, the consul-general at Antwerp, to Mr. Churchill, the consul at Amsterdam, and to Sir Francis Oppenheimer, the consul-general at Frankfort-on-Main, in Germany. These diplomats answered after they had made their own exhaustive studies of German statistics over a period of a year.

Oppenheimer was a curious case. He came from a wealthy German Jewish family and went to Balliol. He sent meticulously compiled and volumous reports on the German economy and its food supply to Eyre Crowe at the British Foreign Office. These reports helped to convince Crowe and his superior, Edward Grey that the Germans could overcome a naval blockade and it would work too slowly to defeat them on its own. This helped reinforce the thinking that large military forces would be required (largely French and Russian) to see off Germany.

For his sterling espionage work Oppenheimer became the only Jew to be awarded diplomatic rank in the Foreign Service (It was generally thought in Britain that Jews were German agents and a dangerous ungrounded element in international affairs).

While the British consuls were studying the matter, the Admiralty instituted an independent enquiry of their own. This enquiry was made at the insistence of the Committee of Imperial Defence.

A.C. Bell notes:

“In November, 1908, the Foreign Office urged that the time had come to consider, what military obligations were imposed upon the country by the treaties of guarantee to which Great Britain was a party. The most formidable and pressing of these obligations was the obligation to give armed assistance to Belgium, if she were attacked by Germany. The committee convened felt, however, that they could not confine themselves to so narrow an enquiry, and their report was mainly upon the help that could be given to France if Germany attacked her. To assist this enquiry, the Admiralty prepared a paper, in which they estimated the economic consequences of a purely naval war between Great Britain and Germany.” (The Blockade of Germany, p. 26)

What is noticeable here is that the British war on Germany was not dependant upon a German transgression of Belgium. That would be useful for political purposes in relation to the Liberal Imperialists taking a united government and cabinet into the War in 1914 instead of waging it in coalition with the Unionists. But the War was actually planned for without that eventuality being necessary, as a British intervention in a European war that would make it into a World War.

Bell continued:

“The starting point of the Admiralty’s enquiry was, that the German North sea harbours would be blockaded in war, and the report was substantially a report on the consequences, in so far as they could be foreseen. The Admiralty were guarded; but they were confident that this blockade, however imperfect, would be much felt in Germany. First, they did not believe that the neutral ports of Holland, and the small Baltic harbours of Germany, would deal with the great volume of additional trade that would be diverted to them; secondly, they considered that the British authorities could seriously diminish the diverted, indirect, trade of Germany, by using their control of the marine insurance market as an engine of coercion. The Admiralty’s principal contention was, in fact, that this partial blockade would be formidable by its indirect, secondary consequences. They nowhere suggested that these consequences would be decisive, but they were convinced that they would be serious.” (The Blockade of Germany, p.26)

The committee’s report produced the following conclusion:

“Financially great pressure would be brought to bear against Germany by means of blockading her ports. The trade of these ports could not entirely, or even, perhaps, largely be diverted to the neutral ports of Belgium and Holland, since the latter would not be able suddenly to increase their ability to handle a large addition to the normal traffic. The income of Germany being largely derived from import duties would be seriously diminished by the blockade of her ports. Her capital also sunk as it is, to a great extent in home industries and would shrink owing to those industries being deprived of the raw materials upon which they are dependent. The closing of many of these factories would coincide with a rise in prices, and great distress would result owing to the non-fighting population being thrown out of work…… From the evidence that we have had, we are of the opinion that a serious situation would be created in Germany owing to the blockade of her ports, and that, the longer the duration of the war, the more serious the situation would become…” (The Blockade of Germany, p.26)

This represented a much more developed form of naval warfare than mere Blockade. It was a strategy for extensive economic warfare to be waged on Germany that required meticulous collection of statistics, their working out, and a thorough analysis of economic data, involving planning of a totally new kind.

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