Why was the British industry not enough big and prepared for the scale of such huge conflict like the first WW1 ?

Tulius

Ad Honorem
May 2016
6,459
Portugal
Thank you for the information!
However I'm affraid that it was unnecessary, because Lord Telefax, pigsvillage and their comrades will say...it was small money... nothing bal blah.....
Not sure how BrutusofNY post supports your ideas... but... I have seen all in this forum already!
 
Jan 2020
130
cumberstone
Not sure how BrutusofNY post supports your ideas... but... I have seen all in this forum already!
Wrong. The debt was so big and terrible, that Britain lost its importance, and USA became the main financial centre of the planet.
 
Jan 2020
130
cumberstone
Speaking to the magazine’s editor, Rob Attar, ahead of his BBC Two documentary The Pity of War, Ferguson said: “The cost of the First World War to Britain was catastrophic, and it left the British empire at the end of it all in a much weakened state… Arguments about honour, of course, resonate today, as they resonated in 1914 but you can pay too high a price for upholding that notion of honour, and I think in the end Britain did.”
 
Jun 2015
1,303
Scotland
England borrowed quite a bit from the U.S. and it seems unlikely that there were any other sources for the amounts they needed. The numbers are those of John Maynard Keynes and are expressed in millions of Pounds. They are taken from this article that addresses the 100 year anniversary of Keynes’ book The Economic Consequences of the Peace. The article discusses how disordered British finances were as it examines Keynes role in the situation.

The Economic Consequences of the Peace: 100 Years Later | Edward W. Fuller


Loans To:By U.S.By UKBy FranceTotal
UK800800
France485390875
Italy27539035700
Russia38520160718
Belgium569090236
Serbia4203054
Romania2163553
Greece8101533
Portugal10010
Total1,6681,4513653,484
For comparison, here are England’s revenue and expenditures taken from Devinespark’s link. Again, all numbers are in millions of Pounds.



Revenue

1913-14 198.2
1914-15 226.7
1915-16 336.8
1916-17 573.4
1917-18 707.2
1918-19 889.0

Expenditures

1913-14 197.5
1914-15 560.5
1915-16 1559.2
1916-17 2198.1
1917-18 2696.2
1918-19 2579.3

I find it interesting that the UK borrowed 800 million Pounds all from the U.S but issued loans for amount that approached twice that amount working with an English economy that was less than half the size of the U.S. economy (the economy of the entire British Empire was slightly larger than the U.S. economy.)

There was also currency depreciation of the Pound that later caused major problems when the English over-valued the Pound and wrecked their export trade during the mid-1920’s.

There was quite a bit of profiteering in the U.S. The war was a godsend to the House of Morgan, which received a financial commission on every one of the billions of dollars loaned to the European allies while his associates on the just-established Federal Reserve made sure that credit was plentiful. At war’s peak, Morgan presided each month over purchases which were equal to the gross national product of the entire world just one generation before. The Morgan-dominated newly created Federal Reserve lower interest rates to facility the loaning. The massive debts thus created were a serious source of economic instability after the war.

Indeed, in the very first month of the World War I President Wilson approved a $100 million (at least $5 billion today) Morgan loan to France and as early as September 4, 1914 Morgan had written to the President: “The war should be a tremendous opportunity for America” and by October 15 of the same year US banks were aggressively making war loans – loans made more attractive by the fact that interest rates fell by over 22 percent during 1914 and 1915 as the Federal Reserve helped finance (and lengthen) the war.

In his Wall Street, Banks, and American Foreign Policy, Murray N. Rothbard described the picture in the U.S.:

By 1914, the Morgan empire was in increasingly shaky financial shape. The Morgans had long been committed to railroads, and after the turn of the century the highly subsidized and regulated railroads entered their permanent decline. The Morgans had also not been active enough in the new capital market for industrial securities, which had begun in the 1 890s, allowing Kuhn-Loeb to beat them in the race for industrial finance. To make matters worse, the $400 million Morgan-run New Haven Railroad went bankrupt in 1914.

At the moment of great financial danger for the Morgans, the advent of World War I came as a godsend. Long connected to British, including Rothschild, financial interests, the Morgans leaped into the fray, quickly securing the appointment, for J.P. Morgan & Co., of fiscal agent for the warring British and French governments, and monopoly underwriter for their war bonds in the United States. J.P. Morgan also became the fiscal agent for the Bank of England, the powerful English central bank. Not only that: the Morgans were heavily involved in financing American munitions and other firms exporting war material to Britain and France. J.P. Morgan & Co., moreover, became the central authority organizing and channeling war purchases for the two Allied nations.

The United States had been in a sharp recession during 1913 and 1914; unemployment was high, and many factories were operating at only 60% of capacity. In November 1914, Andrew Carnegie, closely allied with the Morgans ever since his Carnegie Steel Corporation had merged into the formation of United States Steel, wrote to President Wilson lamenting business conditions but happily expecting a great change for the better from Allied purchases of U.S. exports.

Sure enough, war material exports zoomed. Iron and steel exports quintupled from 1914 to 1917, and the average profit rate of iron and steel firms rose from 7.4% to 28.7% from 1915 until 1917. Explosives exports to the Allies rose over ten-fold during 1915 alone. Overall, from 1915 to 1917, the export department of J.P. Morgan and Co. negotiated more than $3 billion of contracts to Britain and France. By early 1915, Secretary McAdoo was writing to Wilson hailing the "great prosperity" being brought by war exports to the Allies, and a prominent business writer wrote the following year that "War, for Europe, is meaning devastation and death; for America a bumper crop of new millionaires and a hectic hastening of prosperity revival."


It was the huge debt hangover and the attempt to address it with additional credit that so disordered Western economies during the 1920’s and formed the backdrop to the crash in 1929.

Early financial exhaustion and a negotiated settlement could easily have been a better result than what was enabled by the flood of American (and British) credit. In particular, although the Czar seemed doomed one way or another, no Bolshevik Revolution and no hyper-inflation in Germany would have made for a very different world.
Great post, loads of information and a much more nuanced answer to some stupid posting on this thread than expected. To clarify things even more I seem to remember that a great deal of the credit forwarded from the US to the UK was secured against existing assets owned by the UK, is this true and if so is there information as to what proportion were secured.
 

Tulius

Ad Honorem
May 2016
6,459
Portugal
Wrong. The debt was so big and terrible, that Britain lost its importance, and USA became the main financial centre of the planet.
But you saw in the table that the UK borrowed more money to her allies (1451 millions of Pounds) than took from loans from the USA (800 millions of Pounds), didn’t you?

Most of the post was about the USA, while most of your ideas seem to be about the UK, beginning with the thread tittle that, has Martin already mentioned, is true, for UK, and for all the countries in the world.
 
Jan 2020
130
cumberstone
But you saw in the table that the UK borrowed more money to her allies (1451 millions of Pounds) than took from loans from the USA (800 millions of Pounds), didn’t you?

Most of the post was about the USA, while most of your ideas seem to be about the UK, beginning with the thread tittle that, has Martin already mentioned, is true, for UK, and for all the countries in the world.
and you foget the war materials what the weaker and more backward British industry was unable to provide without Uncle Sam. In a comparison with Germans Brits were unable to produce superior quality battleships, so Brits believed in big quantity of ships rather than quality.
 
Jan 2020
130
cumberstone
But you saw in the table that the UK borrowed more money to her allies (1451 millions of Pounds) than took from loans from the USA (800 millions of Pounds), didn’t you?

Most of the post was about the USA, while most of your ideas seem to be about the UK, beginning with the thread tittle that, has Martin already mentioned, is true, for UK, and for all the countries in the world.
Read it: A most surprising peacenik: Historian Niall Ferguson says Britain
 

Tulius

Ad Honorem
May 2016
6,459
Portugal
and you foget the war materials what the weaker and more backward British industry was unable to provide without Uncle Sam. In a comparison with Germans Brits were unable to produce superior quality battleships, so Brits believed in big quantity of ships rather than quality.
I already understood that that is your opinion. Do you have any quote from any historian that agrees that the German battleships were better?

I am aware of Niall Fergunson's ideas, even historians have opinions, like we see in other thread that is ongoing here. But what do you want that I read in that piece of journalism in the Independent? Care to quote the part that you consider relevant?
 
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deaf tuner

Ad Honoris
Oct 2013
14,816
Europix
Thank you for the information!
However I'm affraid that it was unnecessary, because Lord Telefax, pigsvillage and their comrades will say...it was small money... nothing bal blah.....
It was necessary, for You:
From American money?
USA financed half of the war efforts of
Do You understand that the British war effort was paid with British money ? Do You understand the meaning of borrowing? To borrow isn't synonymous with receiving a gift.

... Lord Telefax, pigsvillage and their comrades will say...
Everyone in thread, agreeing or disagreeing with You, treated You with respect. You should try to do the same.
 

Tulius

Ad Honorem
May 2016
6,459
Portugal
It was necessary, for You:

Do You understand that the British war effort was paid with British money ? Do You understand the meaning of borrowing? To borrow isn't synonymous with receiving a gift.

Everyone in thread, agreeing or disagreeing with You, treated You with respect. You should try to do the same.
Apparently we will not have an answer from him, deaf tuner. He was suspended due to multicount.
 
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