The new money-makers

As the wealth resulting from mining, quarrying, manufacturing, exporting and importing increased, there was an increasingly wide appreciation of the fact that - quite apart from making things – money in large amounts could be made to generate even more money. London had always been a centre of trade, and this was not a new discovery. Financial houses like that of the Baring family, founded in 1762, played a vital part in supporting international trade and overseas investment. The stock exchange, the merchant banks, the other commodity exchanges that grew up, all were more congenial places than the factory floor, where social life could play a part. The invisible earnings of the City institutions served to compensate for the increasing deficit on materials, goods and products. Despite being the 'workshop of the world', and a major coal exporter up to 1914, the value of Britain's imports had become greater than that of exports, by as much as £134 million in 1911. The country was run by an oligarchy – a government by the few: in this case a combination of the aristocracy with the richest manufacturers and bankers.

But the political power of the oligarchy was based upon the sufferance of the voters. In the first decades of the twentieth century, Britain was not a democracy, in that half the adult population had no vote, but almost half did possess the vote, and were beginning to understand the power which it put in their hands. The most astute member of the 1905 government was David Lloyd George, prominent on the radical and Nonconformist side of the party, and the first Welshman to become a household name in England. His closest ally was Winston Churchill, son of the Tory politician Lord Randolph Churchill.

The constitutional storm was intensified by other political events. From 1903, concern about German ambitions had already brought about alliances with France and Russia. There was a strong popular demand to enlarge the navy, prompted by the German warship building programme.

While the army and navy moved into rehearsed action, it was very quickly plain that far more fighting men were needed. In the course of 1914 recruiting stations were set up and over three million volunteers appeared. There was no invasion threat, but, for the first time since John Paul Jones had fired his cannons off Flamborough Head in 1779, England experienced foreign raids. Ominously for the future, these came from the air, as zeppelin airships, and, later, aircraft attacked Scarborough and other coastal towns.

As had not happened since the early years of the nineteenth century, the country's producing and manufacturing capacity was pushed towards its maximum potential. But the Britain of 1914 had three times the population of 1814 and a vastly greater range of industry. Little of this industry had been geared towards war production, however. The government faced three major and immediate tasks. There was the actual direction of the war.

The conduct of the war

Where the government was least successful was in the first of its tasks – managing the actual business of waging war. The dedication and courage of what was at first a largely volunteer army was never in question. But the story of the conduct of strategy is a tragic catalogue of incompetence, indecision, personal animosities and staff infighting. But the British were no worse in these respects than their French allies or their German opponents. Generals trained in colonial wars found themselves controlling a battle-front hundreds of miles long, in a bloody stalemate that lasted four years and in which any attack was fated to gain only a mile or two of ground at the cost of tens of thousands of lives. The western front was too vast and its fate too crucial to be left to the generals; its military and logistical aspects too complex to be influenced by the politicians. Military disasters caused increasing criticism of Asquith's Liberal government, which had been in power on the declaration of war. In May 1915 he made a coalition with the Conservatives, but continuing military failures, the lack of munitions, and a sense that Asquith was not pursuing the war with enough ardour and determination, led to political crisis. The year 1916 saw the battle of Jutland, in which the Grand Fleet succeeded in driving the German High Seas Fleet permanently back into port, but, rather than achieving a Nelson-style annihilation, itself suffered more losses than the enemy. And, by the end of 1916, German submarines were sinking 300,000 tons of British shipping every month.

1916 was the year in which volunteering dried up and – despite the reservations or opposition of many Liberal and Labour politicians – compulsory conscription for men into the armed forces was introduced. The maximum age was forty-one, later increased to fifty.

In 1917, with no progress on the western front, German submarines were winning a sea war, sinking British ships at a terrifying rate, over 600,000 tons in April alone. Convoys, the obvious means, were discounted because 'merchant captains could not keep station'. With the success of the convoy system, and the American entry into the war on the Allied side, it was possible to foresee victory, even though Russia, in the throes of revolution, made a separate peace with Germany, releasing battle-hardened divisions to the western front.