Chapter 4 Britain in World War I

assessment of the commercial situation

In 1911, preparing for a potential war with Germany, the British government authorized the Standing Subcommittee of the Committee of Imperial Defense on Trading with the Enemy (hereafter Committee on Trading with the Enemy). The subcommittee’s purpose was to examine “the subject of trade between British subjects and the enemy in time of war, the extent to which it should be allowed and the means and method of carrying out the policy recommendations.”¹ One of the necessary pieces of information for this examination was the importance of the peacetime trade between Britain and Germany. The Board of Trade provided this assessment.²

German goods imported and retained in the United Kingdom in 1910 were valued at 58 million pounds, a tenth of the total UK imports.³ Britain exported 37 million pounds of its produce and manufacturing to Germany, amounting to about a twelfth of its total exports.⁴ Additionally, there was 25 million pounds’ worth of transit trade—items shipped from other countries through Britain destined for Germany or items sent from Germany through Britain destined for other countries. Goods transshipped to Germany included sheep or lambs’ wool, rubber, fur, leather, and coffee.⁵ Goods transshipped from Germany were largely manufactures of cotton, silk, and wool.⁶ Twenty million pounds of this transit trade brought domestic profits as goods exchanged hands in the UK.⁷ The Board of Trade assessed that potential hostilities between the two countries would most affect the transit trade, which would likely pass into the hands of neutrals.

Germany was the predominant supplier for around 44 percent of the products Britain imported from Germany.⁸ These include unrefined beetroot sugar, coal-tar dyes, cotton piece goods, cotton hosiery, mixed silk goods, furs, toys and games, iron and steel manufactures, steel sheet bars, and tinplate bars.⁹ Three of these categories—sugar, coal-tar dyes, and metal manufactures—were important raw materials in British manufacturing. The rest were primarily finished goods that required minimal processing in the UK. While the Board of Trade believed that domestic manufacturing could have filled the wartime domestic demand for clothing, rubber, and earthenware products, it would have been insufficient to fill the demand for clocks, coal-tar dyes, electrical glow lamps, mixed silk goods, and sugar.¹¹ The situation was most dire in the case of sugar, as the Board of Trade deemed that if Germany was prevented from exporting sugar, there would not be enough global supply left to cover British needs.

The Board of Trade assessed trade in products flowing from Germany to Britain as mutually dependent—Germany required Britain as a market just as Britain needed Germany as a supplier. Trade in the opposite direction from Britain to Germany, however, was assessed differently. Imports from the UK accounted for about 8.5 percent of Germany’s total imports. For nearly two-thirds of these products, the UK was the predominant supplier.¹² These items included salted herring, yarn of wool and hair, heavy woolen tissue, cotton yarn, cotton tulle, cotton tissues, sheep- and lambskin, tinplate, and cotton-spinning and preparing machinery.¹³ While this trade would have been difficult for Germany to replace, severing it would not have applied considerable economic pressure on Germany as none of the products were raw materials required for its industry or indispensable food items.

It was assumed that German markets were not all that necessary for British goods. Less than a sixth of the value of exports from Britain to Germany consisted of products for which Germany was the predominant market.¹⁴ These items were maize meal, sharps and middlings, fresh and cured herring, painters’ colors (barites), thrown silk, slate for roofing, wool flocks, worsted yarn, alpaca and mohair yarn, and yarn of hair or wool.¹⁵ While specific groups of merchants in Britain would have been adversely affected by the loss of this trade, overall, the state would not have suffered much.

More thorough investigations were conducted, by the Board of Trade, of the wool trade, the main German import from Britain, and the sugar trade, the main British import from Germany. It found that in addition to the wool imported from the UK, most of Germany’s wool came from British colonies. While South American wool could possibly have been used as a substitute for British wool, the switch would have required considerable up-front costs as Germany did not have the machinery necessary to process the different type of wool.¹⁶ The assessment of the sugar trade led to the conclusion that Britain was asymmetrically dependent on the import of German sugar. Sugar manufacturing was of minor importance to Germany, and, if export was prohibited, Germany could easily divert the sugar it produced to satisfy domestic demand.¹⁷ Thus, Germany was judged dependent on British wool and Britain dependent on German sugar.

In making their assessments, the Board of Trade fully recognized that trade prohibited to British and German ships would continue through neutrals. If wartime trade was permitted, it was assumed that this trade would continue directly on neutral ships since belligerent ships were unwelcome in each other’s ports. If wartime trade was prohibited, it was assumed that trade between Britain and Germany would continue indirectly through neutral ports. The Board of Trade’s report pointed out that the real limiting condition on wartime trade would be infrastructural—the capability of neutral ports to absorb the increased traffic and the availability of neutral vessels to transport vast quantities of goods between Germany and Britain.¹⁸

expected length of war

Another significant piece of information the Committee on Trading with the Enemy requested, to make appropriate policy recommendations, was the expected duration of the war between Britain and Germany. In a note dated March 12, 1912, the General Staff, while refusing to go into any particular details on the subject, stated that “it would not be safe to calculate on the war lasting less than six months.”¹⁹ The War Office did not want to provide a point prediction for the end of the war to avoid blame if the prognosis proved mistaken. Additionally, the expected length of the war also influenced the extent of military stocks to be kept in the country. Preparing for a shorter war would have assured the military access to fewer resources than planning for a longer war. Given these incentives for the War Office, the Committee on Trading with the Enemy assumed that the war would not be especially prolonged.

divergent preliminary opinions on wartime trade

The members of the Committee on Trading with the Enemy came from various branches of government, which colored how they interpreted the information presented by the experts. Naturally, they formed different conclusions about the preferred form of the British wartime commercial policy. Their positions on wartime trade ranged from free trade with the enemy²⁰ to a complete prohibition on both direct and indirect trade with the enemy.

The contribution from the Board of Trade focused on the fact that Germany would have the Netherlands, Denmark, and potentially Belgium as neutral neighbors; therefore, “there would be little advantage in maintaining the legal prohibitions against exporting merchandise to an enemy country.”²¹ It was assumed that all belligerents would respect neutral rights, which indeed occurred in the opening months of World War I. Drawing on the lessons learned from the Crimean War, the Board of Trade asserted that as long as neutral countries were free to trade with all belligerents, a prohibition on trade with the enemy would do nothing more than throw trade into the hands of neutrals without increasing pressure on the enemy. The Board of Trade noted that the situation would be different if the war was fought against a belligerent of “minor commercial importance” for whom Britain was “a principal market.”²² In situations of one-sided dependence, Britain could create considerable pressure on the potential enemy; however, this was not the case with Germany. Britain was the principal market for only one article imported from Germany: sugar. Unfortunately, Germany was also the principal supplier of sugar to the UK, making this, in the best case, a situation of mutual dependence, where no pressure could be exerted, and, in the worst case, one of asymmetric dependence, with Germany holding the knife.

The Board of Trade concluded, “We are nearly as dependent on Germany for our imports as she is on us for her exports.”²³ Considering the mutual dependence, the Board of Trade posited that Germany also would be hesitant to prohibit trade with Britain during the war, as the necessity of feeding domestic industry would prevail.²⁴ Therefore, the position articulated by the Board of Trade was close to complete free trade with the enemy. If neutrals could usurp the trade Britain intended to sever, then Britain had no control over the enemies’ ability to increase military capabilities and would only be hurting itself by severing trade. This view largely omitted the military considerations of war fighting: Britain’s go-to strategy of every war, the blockade, and diplomacy with neutral countries. Both avenues could provide Britain with a way to influence German trade with neutrals and deprive Germany of some ability to increase its military capabilities during the war.

Llewellyn Smith, the permanent secretary of the Board of Trade and a permanent member of the Committee on Trading with the Enemy, wrote a separate memorandum injecting some of the military considerations into the Board of Trade’s free wartime trade policy. He proposed that Britain follow the existing common law prohibiting all trade with the enemy except where licensed by the government and that, with a few exceptions, all trade with the enemy be licensed to continue. He included a list of exceptions: (1) British vessels could not enter enemy ports; (2) British produce could not be transported from British ports directly to enemy ports; (3) A very short schedule of goods could not be carried from British ports to foreign ports unless Customs was satisfied that these goods would not reach the enemy; (4) British vessels could not carry any of the products from this schedule of goods to foreign ports if the final destination was the enemy.²⁵

The first exception would prevent the enemy from destroying British merchant vessels on sight. The last would ensure that British ships could not be used to help neutrals resupply the enemy. The second would extend the conversion times of all traded products by increasing their transportation times. To delay the enemy’s gains from trade, all British ships would have to make a stop at a neutral port before delivering their cargo to the enemy. In Smith’s conception, the short schedule of goods should consist of products used by the enemy for naval and military purposes, as well as a restricted list of products that could put pressure on the enemy—that is, raw materials.²⁶ His suggested policy focused on preventing the enemy from acquiring products that could be quickly converted into military capabilities or the lack of which could cause damage to the enemy’s economy. This proposal attempted to combine the security externality logic of the wartime trade theory with an imposition of maximum economic pressure.

The legal perspective was provided by Professor Lassa Oppenheim, who, in fine legal form, advocated for the continuation of peacetime trade during the war, provided it did not interfere with British war aims. He identified three historical legal grounds on which prohibition on trade with the enemy was based: the nature of war, the inability of enemy subjects to sue, and the purpose of war.²⁷ None applied to the possible war with Germany. According to his report, in modern wars hostilities were restricted to the armed forces; thus, the nature of war no longer pitted the people of two countries against each other.²⁸ Denying the enemy population commercial intercourse could not be justified when the population was not involved in warfare. The legal basis for preventing enemy subjects from suing in belligerent courts has been thoroughly tested in recent wars in numerous countries, and the principle was largely ignored. Finally, the general purpose of war as it relates to wartime trade was “overpowering the enemy by cutting off the necessaries of life from the enemy country.”²⁹ Given the rights granted to neutrals, Oppenheim argued that in a war against a European power, this purpose was unachievable.

Having disputed the applicability of the historical legal grounds for a prohibition on wartime trade, Oppenheim proposed that “such trade with enemy subjects as is not compatible with the aim of British warfare should, on principle, be prohibited.”³⁰ Among such incompatible trade, he included arms, ammunition, and naval and military stores. On the contrary, trade that did not contradict British war aims—such as “all trade in innocent goods through the channel of neutral countries”—should be allowed to continue.³¹ Being a legal scholar, he ended the report by saying, “The Crown should be empowered at any time during war . . . to prohibit all kinds of trading in case such prohibition is desirable.”³² While emphasizing that some trade with the enemy is innocent and can be permitted during war, he stopped short of providing a decision rule, except that such trade should not contradict the British war aims.³³ It should be noted, however, that he also advocated for wartime trade to be continued indirectly through neutral states.

The Admiralty advocated a wartime commercial policy designed to exert tremendous economic pressure on Germany. Germany imported half of its total demand for wheat, a quarter of its cereals, and large portions of raw materials used in its industries,³⁴ with cotton, jute, and rubber coming entirely from outside the country.³⁵ Believing that Germany derived a significant portion of its income from import duties and depended on industrial production, the Admiralty expected Germany to be susceptible to economic pressure through naval means. The majority of this pressure would stem from a blockade of German ports; however, any additional pressure contributed by a prohibition on wartime trade was welcome. It was advocated for Britain to prevent German imports of foodstuffs and raw materials.³⁶ The more allies and neutrals Britain convinced to follow the same policy, the more pressure exerted on Germany. Focusing on the side of security externalities related to the enemy’s revenue, the Admiralty’s proposal sought to exert maximum economic pressure without much regard for the economic costs of such a policy for Britain. The Admiralty’s policy did not consider the potential for alternative suppliers, because their ultimate goal was not only severing British trade with the enemy in foodstuffs and raw materials but severing German access to these products in general.³⁷

Some of the committee members, in addition to the security and economic considerations, raised domestic political concerns that they expected to influence the wartime commercial policy. Using the Boer War as an analogy, Lord Esher, a permanent member of the Committee on Imperial Defense, suggested that the domestic public, and possibly allies, would expect maximum pressure against Germany from the start of the war and would therefore be greatly opposed to trade with the enemy. He wrote, “This expectation might be formulated in a demand by public opinion, voiced by the press, in such an overwhelming force that no Government would be able to resist it.”³⁸ He argued that despite the British common-law prohibition of wartime trade, legislative action should be taken to reiterate the prohibition to appease public sentiment.

points of agreement on wartime trade

While preliminary positions on the best wartime commercial policy for the potential war with Germany diverged,³⁹ there were several important points of agreement between all committee members. First, the selected policy had to be tailored to the expected war. Second, different classes of products should be treated differently under the wartime commercial policy. Third, Britain had the capability to enforce even the most stringent policy if it was called for.

The agreement on tailoring the specifics of the adopted policy to the expected war was most pronounced in discussions of temporal effect. All committee members understood that economic pressure was a time-dependent policy instrument; it took time to achieve any effect. Lord Desart, the chair of the committee, pointed out that “a short period of extreme commercial pressure must affect the permanent commercial interests of the nation less than a prolonged period during which that pressure, which must in any case be heavy, was reduced to its lowest possible proportion.”⁴⁰ Even if the committee resolved to sever all trade with the enemy, in the short term, this policy would do little to help Britain win the war. Only in the long term—if the war became prolonged—would a wartime commercial policy, even one that prohibited but a handful of key products, contribute to battlefield outcomes. Sir Robert Chalmers, a representative from the Treasury, stated, “If the war were brought to a rapid conclusion by the success of the German armies over France, it would not be worthwhile for us to exercise the weapon of economic pressure, which must necessarily require time to produce effect.”⁴¹ Naturally, the same held if the allies were to quickly defeat Germany; the economic pressure from regulating trade with the enemy would not begin to be felt.

Even arguing from the position of severing all wartime trade and imposing maximum pressure on the enemy, Admiral Ernest Troubridge recognized that economic pressure takes time. Discussing Germany’s potential to reorient from directly trading with Britain to receiving all necessary resources indirectly through neutrals, he noted that overcoming the economic pressure of a blockade is itself a lengthy process: “It would take a long time before such a huge volume of trade could be diverted to neutral ports. No doubt, however, attempts would be made so to divert it, which would prove more and more successful as time went on, and then it might be important to supplement the naval blockade by prohibiting that considerable portion of trade which was carried on with this country.”⁴² Economic pressure takes time to produce an effect, which provides the enemy with time to attempt to circumvent it. To maintain economic pressure on the enemy at a later point in the war, neutral trade would also need to be controlled. However, this would require a long-term policy, as the enemy would still be in the process of shifting to neutral trade in the short term and thus would not yet be susceptible to the additional economic pressure. Lord Esher, also talking about the time it takes to redirect trade via alternative routes, noted, “It is the estimate attached to that period of time which largely governs the value of the pressure which could be put upon Germany.”⁴³ The committee members shared the assumption that creating enough shortages in enemy supplies to affect battlefield outcomes would take considerable time.

While discussing how to form a wartime commercial policy in the general case, the Committee on Trading with the Enemy was also designing a proposal for the British policy in the coming war with Germany, which was expected to be short. The committee’s secretary, summarizing the scope and ground to be covered by the committee, stated, “It is of course utterly impossible to foresee what developments of the policy to be adopted may become necessary during the course of a protracted war. Probably all that can be done now is to consider the most suitable policy for adoption at the outset of a war.”⁴⁴ The committee recognized that their proposed policy had to match the type of war Britain was going to fight. And if those war expectations changed, the policy had to change with them.

The second point of agreement was that different categories of products should be treated differently under the wartime commercial policy. The committee divided trade into three conceptual categories: arms, food and raw materials, and innocent goods. Regardless of how lax or restrictive a committee member’s preferred version of the wartime commercial policy was, everyone agreed that arms, ammunition, and military and naval stores would be prohibited from trade with the enemy. Not everyone agreed on which specific products fit this description, and several meetings were held to discuss this exact question, but there was an agreement that this nebulous category of finished goods used directly in war should never be traded with the enemy during the war.⁴⁵ If the enemy could use a product to immediately increase its battlefield strength, it was best to keep the product out of enemy hands.

Innocent products did not pose any significant difficulties for the committee members. Goods classified as innocent were used exclusively in civilian manufacturing.⁴⁶ It was assumed that they did not assist the enemy in prosecuting the war and therefore were safe to trade with the enemy.⁴⁷ These goods, by virtue of being part of civilian manufacturing, had a longer conversion time into military capabilities; thus, they were unlikely to affect the enemy’s war effort during a short war.

Raw materials were the contentious category. While it was agreed that these products could not benefit the enemy’s military in a short period of time, they contributed substantially to the enemy’s revenue.⁴⁸ Severing trade in these products, assuming the enemy could not diversify trade to an alternate partner, would inflict the greatest damage to the enemy’s economy. In their final report, the Committee on Trading with the Enemy settled on recommending a prohibition on trade in raw materials particularly important to the German economy, such as cotton, raw wool, crude rubber, raw jute, and coal.⁴⁹ However, the cabinet did not accept this recommendation. While prohibiting the enemy from gaining raw materials could exert economic pressure, such pressure would take time to have an effect, as the committee had pointed out. In the short war expected against Germany, there simply would not be any time for that to happen. By rejecting this portion of the committee’s recommendation, the cabinet corrected the one logical inconsistency in the proposed wartime commercial policy.

Finally, there was a unanimous agreement that enforcement was not a limiting condition on the choice of wartime commercial policy. Little doubt existed that it was considerably easier to enforce a prohibition on direct trade than on indirect trade. After discussing a memorandum prepared by the Board of Customs and Excise on how a prohibition on indirect trade could be enforced, the committee agreed to continue their proceedings on the assumption that it was possible to prevent a considerable amount of trade through neutral states.⁵⁰ While there were some lingering doubts about the high economic and political costs such enforcement would require, the feasibility of enforcing the prohibition was accepted—enforcement might not be perfect but good enough to tighten the noose on enemy necks.

The plans made by the Customs Board included requiring merchants to furnish detailed statements of the traded goods and their ultimate destinations, authorizing customs officers to inspect cargo, and taking bonds from merchants to ensure delivery to the declared port, where the traded products could be certified by the British consul. For more stringent enforcement, the rationing of neutral countries was proposed, as was vigilance against violators of the wartime trade policy, a precursor to the blacklists. Indeed, all of the instruments ultimately used in World War I to place enormous economic pressure on Germany were considered during the committee meetings before the war started. The use of the more stringent enforcement methods was initially rejected because they were not required in the war Britain expected.

adopted wartime commercial policy for a short war on the continent

Based on the recommendations of the Committee on Trading with the Enemy, the wartime commercial policy, adopted by the cabinet, for the expected war with Germany was as follows: (1) prohibit direct trade with the enemy; (2) allow indirect trade with the enemy, except in a few items that were prohibited from leaving the country because they were necessary for military and naval means and a few items that were prohibited from trade with states adjacent to the enemy as they were determined to quickly increase the enemy’s military capabilities. While the committee also advocated the prohibition of several raw materials required for German industry, the cabinet did not accept this part of the proposal. No restrictions were placed on trade in the raw materials Germany needed for its domestic industry.

The decision to prohibit direct trade with the enemy, especially for reasons of forestalling the presumed public outrage that would stem from a general permission to trade with the enemy, does not match the predictions of the wartime trade theory. At the same time, the logic behind this decision does not stray too far from expectations. To prevent the debilitating pressure on the government that Lord Esher hypothesized, the committee proposed prohibiting direct trade with the enemy only for the first few weeks of the war. During this period, the country’s entire transportation infrastructure would be overloaded with military personnel and supplies being transferred to the front lines. There would be little opportunity to conduct trade. In fact, the prohibition on direct trade was never meant to impede trade. Later in the war, after the political barriers were handled, the government would switch to the general policy preferred by the committee, which would allow direct trade. If no public outcry materialized at the beginning of the war, the government was likewise meant to rescind the prohibition on direct trade.⁵¹

With the exception of the prohibition on direct trade with the enemy, the British wartime commercial policy was based on a reasoned weighing of the benefits of trade against the costs of potentially aiding the enemy, adhering to the predictions of the wartime trade theory. Trade in products the enemy could convert into military capabilities by the end of 1914, when the war was expected to end, was severed. At the same time, to safeguard the state’s revenue and ability to invest in long-term security, none of the products that were of great importance to the British economy were prohibited from trade. Indeed, despite the prohibition on direct trade with Germany, the Board of Trade gave out numerous licenses to individual merchants for the direct purchase of German raw materials. Such licenses were granted for the import of enemy goods “which [were] essential for the maintenance and development of industries in this country and [could not] be supplied to anything approaching an adequate extent from other than enemy sources.”⁵² Products that could only be supplied by the enemy but that were still required for British industry, and therefore British revenue, were permitted to be imported into the country under license. Specifically, a large proportion of licenses were granted for the import of aniline dyes, used in textile and leather industries, as well as the import of various potash compounds, used in the manufacture of explosives, glassware, and dyes.⁵³

expected length of war

Before the war started, there was a general belief that the coming European war would be over within a few months. The Royal Navy would impose a successful blockade, creating the conditions for the French and Russian armies to crush Germany and Austria-Hungary.⁵⁴ In fact, British leaders wholeheartedly accepted the premise that a long war between industrial nations was impossible, as all economies would collapse under the strain.⁵⁵ The expectation of a short war was so widespread that no contingency plan was created for the possibility of a long war or for the mobilization of the resources of the state.⁵⁶ The army had what they believed would amount to a six-month supply of ammunition stockpiled; the domestic production of ammunition was geared toward supplying a very small army. Even if Britain required more ammunition than the stockpile could provide, the domestic industry would not be able to produce it.⁵⁷ That Britain took no actions to rectify this situation before the war started shows just how entrenched the expectation of a short war was. “The boys will be home by Christmas” was not a pacifying message meant to placate the domestic populace; it was the widespread belief of the British, and really all European, leaders before the Great War started.

For the first three months of the war, the expectation of a short war seemed justified. French and British leaders were aware of the Schlieffen Plan and understood that German victory depended on taking Paris early in the war. Thus, news of the Russian victory at the Battle of Gumbinnen on August 20, 1914, which forced Helmuth von Moltke the Younger, chief of the German General Staff, to reinforce the eastern front at the expense of the western front, was quite welcome—so much so that the German destruction of Samsonov’s army at the Battle of Tannenberg (August 26–30) did not cause British leaders to falter in their optimism.⁵⁸ They fully expected Russia to come up with considerably more numbers and continue to press the Germans from the east.⁵⁹ Meanwhile, on the western front, the French and British success at the First Battle of the Marne (September 6–10) stopped the German army from advancing into France, thereby preventing Germany from claiming a quick victory.⁶⁰ With the German plan effectively halted, all the Entente powers had to do was win. Unfortunately, that proved harder than anticipated.

Both sides believed the key to a quick victory on the western front was outflanking the enemy’s army. The resulting Race to the Sea (September 17–October 19) spanned more than 125 miles but failed to produce a decisive result. Trench lines on the western front mostly stabilized by October 20. By November, exhaustion had set in, the war of movement was over, and thoughts of stalemate could no longer be avoided.⁶¹

In London, it was sinking in that the short war everyone planned for was no longer in the cards, and the lack of a plan for a longer war was making itself felt.⁶² In November, H. H. Asquith, the British prime minister, replaced ad hoc councils with an official war council, specifically to discuss war strategy.⁶³ This was not deemed necessary earlier in the conflict. By December, it was clear that the war would definitely not be over by Christmas, but the new expected length of war stretched out only as far as 1915.⁶⁴ The belief in a quick victory continued to linger; with an injection of new men and a fresh supply of ammunition, the stalemate on the battlefield could still be broken.⁶⁵

The year 1915, accordingly, began with a sense of optimism. However, the French offensives in the First Battle of Artois (December 17, 1914–January 13, 1915) and the First Battle of Champagne (December 20, 1914–March 17, 1915) painted a very different picture. In the new reality of war, considerable casualties were traded for little to no territorial gain, no matter how much new ammunition or how many new men were sacrificed.⁶⁶ There was no path to a quick and easy victory.⁶⁷

Failing to restart a war of movement, Britain turned its attention to other theaters, searching for a way to win the war without breaking the stalemate on the western front. The Dardanelles campaign was supposed to, first of all, free the straits for allied shipping after the Ottoman Empire closed it to Britain and France in October 1914. Then, it was meant to weaken the Ottoman Empire, allow attacks on Austria, ensure supplies could reach Russia, and, once it accomplished all that, sway neutrals to the Entente side.⁶⁸ On March 30, Asquith predicted that Allied success in the Dardanelles would bring the war to an end by June 1915.⁶⁹ However, by the end of April, these high hopes were dashed as it was acknowledged that the campaign had failed and devolved into yet another scene of trench warfare.⁷⁰

By the end of May 1915, after the Dardanelles campaign had failed, no breakthroughs appeared on the western front, and the Germans had significant successes on the eastern front. With the so-called shell scandal—the shortage of artillery shells on the front lines—in full rage, Asquith was forced to update his expectation of the length of war to go past the end of 1915.⁷¹ The cabinet seemed a bit more pessimistic, making the assessment in mid-June that the Allies would not be able to mount a combined major offensive on all fronts until 1916, which meant that the war could not end until the end of 1916, maybe even 1917.⁷² This increasing war-length expectation is reflected in the creation of the Ministry of Munitions on July 2, 1915. While the proximate cause for the creation of the new government department was the shell scandal breaking in the newspapers in London, the department would not have been created, much less given much leeway, unless the war was expected to run long enough to benefit from its work.

At the end of 1915, the Allies started planning a major offensive, which the commander in chief of the French army, Joseph Joffre, had convinced them would win the war in 1916.⁷³ However, the Germans seized the initiative and attacked first at Verdun in February. By April 1916, the British government had to demote their expectations of what would become the Battle of the Somme (July 1–November 18) from a war-winning campaign to a diversionary battle to relieve the pressure on the French at Verdun.⁷⁴ The battle did succeed at diverting German attention from the French, but although it was designed to bring a swift victory through the use of overwhelming power, it soon turned, like many before it, into a battle of attrition.⁷⁵ There was some hope in September that a war of movement could be restored with the introduction of the tank. The new technology was meant to terrify the Germans and provide the decisive edge to win the war.⁷⁶ Yet the tanks’ numerous technological problems prevented a large portion of them from even reaching the assault point.⁷⁷ The introduction of the tank failed to alter the expected length of war.

The other glimmer of optimism for the Allies came in August 1916, when Romania joined the war effort against the Central powers. Romania could prevent the flow of materials between Germany and its allies, and it was considered a great prize for the Allies. The joy did not last long, as Bucharest fell on December 6.⁷⁸ A defeated Romania was much worse for the Allied war effort than a neutral one; having occupied a sizable portion of the country, Germany received access to Romanian oil and wheat. Both Britain and France understood that starving a country that has a new source of grain would be rather difficult.⁷⁹ By the end of 1916, all strategies to turn the war toward a swift conclusion had failed.

Nothing in 1917 served to shorten British expectations of war. The Nivelle offensive (April 16–May 19) not only failed to break the German line but led to mutinies in the French army. While news of the mutiny was kept from the British and French governments, both governments were aware that the attacks on the front had stalled.⁸⁰ The French army, under new leadership, undertook no new offensives for the rest of the year, and the British army focused on preventing the Germans from realizing they could easily break through French positions.⁸¹ While the United States finally joined the war effort on the Allied side in April 1917, their troops were not expected to arrive in force in Europe until 1918 and thus could not affect the chance of winning the war until then. To make the situation worse, in November, it became clear that Russia had been knocked out of the war by the Germans and that Italy no longer had an army to field.⁸² From September 1917, the British David Lloyd George administration, which came to power at the end of 1916, had serious doubts the war could be won.⁸³ A negotiated peace could not be ruled out as an outcome.⁸⁴

The year 1918 provided no news that could alter the expectations of a long war. Having won in the East, Germany could now shift considerable troops to the western front.⁸⁵ The German troops that remained in the East ensured German access to new sources of grain from the occupied Ukraine⁸⁶ and access to raw materials from the trade treaty imposed on Russia.⁸⁷ These events were somewhat counterbalanced by the influx of US troops to Europe, which provided essential relief on the front. However, US participation was not enough to revise the expectation of a long war. Instead, President Woodrow Wilson was asked to provide another one hundred divisions for the 1919 campaign—a request the president agreed to, showing that the war was expected to last well over a year longer.⁸⁸

Victory was as much a surprise for the Allies as was the initial realization that the war would not be over in six months. On September 9, 1918, the Allies returned to the territorial status quo before the German spring offensives of that year began.⁸⁹ Regaining territory previously lost to the opponent was a feat repeated many times during the war and did not seem any more special this time. It was not until October 5, 1918, when the Allied forces started to break through the Hindenburg Line, that there were any thoughts of a quick conclusion to the war. Of course, this was four days after Britain had finally severed all trade with the enemy.

expected stakes of war

While the expected length of war went through several swings between periods of expected quick victory and periods of expected attrition warfare, the expected stakes steadily increased throughout the conflict. With it, Britain’s willingness to lose revenue from traded products also steadily increased, progressively shifting from a focus on investing in long-term security to a focus on making the current war marginally easier to win. At the beginning of the war, fairly few changes were made in Britain to accommodate the war effort. As the war became more intense, Britain had to shoulder a greater financial burden and take an active role in the management of the economy, channeling labor and resources toward war production at the expense of civilian comforts.

The war started as a distant struggle on the Continent; Britain was not even certain that it would deploy the Expeditionary Force. While the war certainly affected British national security interests, it did not immediately threaten Britain’s survival—at least not in the same way that it threatened Belgian or French survival. This perception changed with the German zeppelin raids on Britain. The first successful attacks on England targeted Humberside on January 19, 1915. On May 30, London became the target of bombing for the first time.⁹⁰ The initial zeppelin attacks caused considerable panic as the large flying machines seemed impossible to defend against; fears of a German invasion of Britain intensified. German raids brought the war considerably closer to home, making the war seem more existentially threatening. While the practical threat of such an invasion was put to rest with the Battle of Jutland in 1916, the public belief that the war posed an existential threat to Britain did not dissipate.⁹¹

To finance the war effort, which expanded beyond the easily manageable short war, Britain had to impose considerable costs on the domestic population. In 1915, income taxes rose by 40 percent, and the earnings threshold at which the tax was applied was lowered.⁹² Additionally, three domestic war loans were floated on the exchange, in November 1914, June 1915, and January 1917.⁹³ Britain strained to finance the Allied war effort through 1916, after which point it ran out of domestic options and had to resort to heavy borrowing from the United States.

Starting in 1915, the government worked to mobilize the domestic economy for war, which required giving up civilian production in favor of war production. The Ministry of Munitions, formed in July 1915, was authorized to redirect supplies toward the efficient production of all industries related to wartime needs, from arms and munitions to uniforms. The following November, the Ship Licensing Committee was created to ensure that available shipping was used for trade vital to the war effort.⁹⁴ The controls imposed by the government intensified with the creation of the Ministry of Labor in 1916, which focused on ensuring that “private industry met wartime needs.”⁹⁵ These changes reflected the intensification of the war, which required greater civilian sacrifices in favor of conducting the current war.

During the war, the government also had to intervene in the structure of the labor force. While the British recruitment centers flooded with volunteers in the early months of the war, the excitement dried up when newspapers started to report on the realities of warfare on the front. The National Registration Act of July 1915 had to be implemented to keep track of all the men eligible for service. Three months later, the Derby Scheme tried to increase volunteers by paying men to enlist and defer their service until they were needed by the military.⁹⁶ Finally, in January 1916, Britain introduced conscription. This reflected the increased value attached to the stakes of the war, as the state was willing to remove a substantial portion of the labor force from the domestic economy and redirect them toward helping the current war effort.

Furthermore, to make up for the men leaving for the front, Britain turned toward female labor despite societal objections to such a policy. In 1915, the government asked for female volunteers to temporarily fill in job vacancies, mostly in the munitions factories being created to meet the war demand. By 1917, women accounted for nearly half of Britain’s total labor force; however, labor unions required that female employment be temporary and constrained to the war years only.⁹⁷ Britain required its citizens to sacrifice more and more for the war effort, shifting its focus from assuring long-term security toward the priorities of the current war.

two major policy realignments

At the start of the war, control over indirect exports to the enemy started with a short list of products prohibited from leaving the country, containing thirty-four product descriptions, and another short list of products prohibited from export to countries adjacent to the enemy, containing another fifty-nine product descriptions.⁹⁸ The products on both lists were immediately required for the war effort. They had short conversion times; thus, even in a short war, the enemy could use them to increase their military capabilities.⁹⁹ The size of Britain’s strategic stockpiles determined which list a specific product was placed on. Products the country had in sufficient quantity to prosecute its expected short war could be exported to the world, with the exception of the enemy’s neighbors. Examples of products prohibited from indirect export to the enemy on August 5, 1914, include airplanes and engines, arms and ammunition, gunpowder, cotton suitable for making explosives, petroleum, pack animals, and surgical bandages and dressings.¹⁰⁰

On the other hand, products British leaders thought they might have insufficient stockpiles of could not be exported from the country.¹⁰¹ The first schedule of products prohibited from export from the country on August 3, 1914, contained explosives, torpedoes, cannon and other ordnance, camp equipment, saddles, horseshoes, marching boots, uniforms, and the chemicals and tools required to make explosives.¹⁰² In addition to preventing these products from reaching the enemy, these more stringent prohibitions had a secondary function: they reduced the cost of the war for Britain. British merchants were required to sell their products at lower domestic prices, instead of the temptingly high world prices. The prohibitions, thus, increased the domestic supply of necessary goods while simultaneously reducing the price at which Britain purchased them.

Additionally, the export of “forage and food of all kinds for animals” and “provisions and victual of all sorts which may be used as food for men” was prohibited from leaving Britain on August 5, 1914.¹⁰³ However, it was quickly clarified that the prohibition on food only covered animals meant for slaughter, wheat and wheat flour, barley and oats, butter, margarine, cheese, eggs, sugar, jams and marmalades, and condensed milk—in other words, the basic ingredients for soldiers’ rations.¹⁰⁴ At this early point in the war, Britain had no intention of initiating a starvation campaign against its enemy. On August 4, food was designated as conditional contraband, which was in line with international law.

These lists were incrementally amended during the war. Some products were added when battlefield realities dictated it; others were removed from the list when it was discovered that they had been added erroneously; yet others were switched from one list to the other, changing the geographic scope of the prohibition. In 1914, seventy-seven product descriptions were removed from the prohibited export lists, and thirty-nine product descriptions were amended. By the end of the year, the schedule of goods prohibited from export from Britain contained 187 product descriptions, with an additional forty-two designating trade allowed only with British colonies. The schedule of goods prohibited from reaching the enemy contained 153 product descriptions. A considerable number of these additions took place in November, as the war of movement on the western front devolved into a war of attrition. During the first five months of the war, three of the raw materials identified as crucial to the German economy were prohibited from export: raw rubber on September 8, 1914;¹⁰⁵ raw jute and lamb and sheep wool on October 6, 1914.¹⁰⁶

There were, likewise, incremental changes in the British policy on indirect imports from the enemy. The war opened without any special measures preventing enemy goods from being imported into Britain indirectly. On September 30, 1914, the first wartime schedule prohibiting imports into Britain appeared, containing only one product description: “raw or refined sugar made or produced by an enemy or in any enemy country.”¹⁰⁷ No other import prohibitions were made in 1914. However, even this prohibition served not to prevent trade in sugar of enemy origin but to control said trade, as the import prohibition made amply clear, referencing trade by license twice in a quarter of a page. The Royal Commission on Sugar Supplies, established in August, was responsible for monitoring the supply and procuring what Britain required.¹⁰⁸ The prohibition served to provide this commission with greater control over the flow of trade in sugar, which, after all, was the most significant British import from Germany.

In September 1914, certificates of origin were instituted for goods coming from countries neighboring enemy states.¹⁰⁹ These certificates were required on all goods valued at one hundred pounds or higher. A few months later, the value of goods requiring a certificate dropped to twenty-five pounds.¹¹⁰ Moreover, some effort was made to prevent neutrals from engaging in minimal manufacturing—that is, importing goods of enemy origin, refining them in some small way, and exporting the results as neutral products. By the end of 1914, manufactured goods imported into Britain could not have more than 50 percent enemy goods or labor.¹¹¹ Such restrictions could be circumvented with licenses granted by the secretary of state or the Board of Trade, which were numerous at the beginning of the war.

While the incremental changes were sufficient to update the wartime commercial policy through the opening salvos of the war, by February 1915, the effective use-by date of the initial policy had passed. The expected length of the war stretched to the end of 1915, making it at least one more year and twice as long as the initially assumed six months. The Committee on Trading with the Enemy needed to reassess the entire strategy.

In a report printed on February 25, 1915, the Interdepartmental Committee on Trading with the Enemy described the British policy up to this point as “concentrating efforts mainly on preventing the enemy from receiving those articles which affect his ability to prosecute the war, and to allow greater relaxation in the case of articles of value for the civilian production alone.”¹¹² The policy for a short war was to prevent trade in products quickly convertible into military capabilities by the enemy and permit trade in products that did not help the enemy on the battlefield. The report continued: “The same principle does not apply as regards the offense of trading with the enemy at the present time.”¹¹³ Given that the war was going to last at least another full year, the committee decided that it now made sense to prevent certain products previously deemed innocent, like raw materials and food items, from reaching the enemy. A consolidated list of prohibitions published in February 1915 added prohibitions on 132 new products, including chemicals, metals and ores, oleaginous nuts, and machine guns.¹¹⁴

One of the most important actions taken to pursue this change in policy was the consolidation of the Black Lists. The War Trade Intelligence Department,¹¹⁵ newly created in February 1915, was tasked with consolidating the individual blacklists kept by each department and maintaining the unified Black List with further additions from all departments.¹¹⁶ At the same time, the Home Office, in conjunction with the Board of Customs and Excise, started strengthening control over indirect trade with the enemy. The new policy placed on the exporter the onus of proof that exported products would not go to the enemy.¹¹⁷ For a few months, to export products on the prohibited list, a merchant would have to put up a triple-value bond to ensure the products were not destined for the enemy. The requirement for a bond, however, was removed in August 1915, as it stifled too much trade. On the import side, all products imported from countries bordering enemy states were required to have certificates of origin. The proportion of enemy goods and labor allowed in manufactured goods imported into Britain was dropped to 25 percent.¹¹⁸

As part of the February 1915 restructuring of the wartime commercial policy, the War Trade Department suggested that countries neighboring enemy states should be placed on a rationing scheme, where they would not be allowed to import more from Britain than they had in peacetime, thereby limiting indirect trade with the enemy.¹¹⁹ At this point in the war, however, the Foreign Office was only prepared to pursue agreements with neutrals based on voluntary rationing, whereby neutrals chose to ration their own imports and exports, as opposed to forced quotas mandated by Britain.¹²⁰

Perhaps the biggest change to the wartime commercial policy came on March 11, 1915, when Britain reversed its position on neutral rights and condemned seaborne trade with Germany. The reprisals order-in-council, issued in response to Germany declaring all waters surrounding the United Kingdom a war zone, prohibited all vessels, even neutral ones, from carrying goods of enemy origin or to enemy destinations.¹²¹ While it had a severe impact on neutral trade, the unrestricted blockade most strongly affected direct trade with Germany. Indirect trade between Britain and Germany was still managed via certificates of origin, licenses, and export prohibitions.

The second significant shift in British wartime commercial policy occurred near the end of 1916. All the Allied strategies that the British government relied on to win the war had been tried and had failed. Despite Britain’s victory in the Battle of Jutland, the public perception that the war posed an existential threat to Britain did not dissipate.¹²² Furthermore, after two and a half years of financing the Allied war effort, Britain finally had to start borrowing heavily from the United States. With the expected length and stakes of the war growing, British decision-makers further restricted their wartime commercial policy. The list of products prohibited from export grew substantially, and product descriptions lost their detailed qualifiers. Phrases like of all kinds and all not otherwise prohibited became frequent modifiers, prohibiting whole categories of goods instead of highly differentiated items. Import restrictions increased in number at a rapid rate.¹²³ Given the strains of war, the shipping situation became dire, forcing Britain to ration tonnage on ships to guarantee that the products necessary for the war economy made it to the country.¹²⁴

Additionally, the system of licensing the import of enemy goods was overhauled. As previously mentioned, Britain started the war granting numerous licenses for the direct importation of enemy products, focusing on products necessary for British manufacturing. This liberal policy was somewhat curtailed after March 1915, reflecting the change in British willingness to lose revenue from traded products; the state sacrificed investment in long-term security to make the current war marginally easier to fight. All licenses for dyestuffs and for most of the drugs and chemicals were revoked; licenses were restricted to “special machines and appliances urgently needed and unobtainable from non-enemy sources, caustic potash and carbonate of potash, a few drugs on the recommendation of the National Health Insurance Commission, spelter and zinc, flax, iron drums, hosiery needles, Palestine wine for Jewish rites, velonia for tanning, syphon vases, samples for copying purposes and books of a technological, scientific, or educational character.”¹²⁵ After August 1916, only hosiery needles—which were essential to the textile industry—and the occasional enemy publication were allowed to be imported from the enemy.

trends in incremental changes of the wartime commercial policy

The British wartime commercial policy was publicized to domestic merchants through official proclamations printed in the London Gazette and Edinburgh Gazette. Lists of products prohibited from trade with the enemy were periodically updated, with a new proclamation appearing about two or three times a month. On some occasions, when a considerable number of changes had to be introduced at once, consolidated prohibition lists were printed in the newspapers. While the wartime commercial policy included prohibitions on both exports and imports, this section of the chapter focuses specifically on exports. Britain prohibited products with three types of geographic scopes: those that could not be exported from Britain, those that could be exported only to the colonies, and those that could not be exported to countries adjacent to the enemy. Although there were multiple reasons to ban products from leaving Britain, prohibitions on export to countries adjacent to the enemy were designed expressly to sever wartime trade. Similar geographic distinctions do not exist for prohibitions on imports, which were prohibited from all sources. Thus, it is impossible to distinguish imports prohibited to stop trade with the enemy and imports banned for other reasons.

The export prohibitions display a number of interesting patterns. First, British decision-makers adapted the wartime commercial policy to changes on the battlefield. As the trenches on the western front solidified by November 1914 and Britain saw that attrition was going to be a major feature of the current war,¹²⁶ “entrenching tools and implements,” such as pickaxes, shovels, and spades, were prohibited from export to the enemy on November 10, 1914.¹²⁷ “Machinery for trenching and digging” was not prohibited until February 3, 1915,¹²⁸ when most hopes of returning to mobile warfare had faded.¹²⁹ On the same date, because of the same intuition that a war of movement was not likely to recur, machine guns were also prohibited from trade.¹³⁰ Interestingly, machine guns were not prohibited from trade at the beginning of the war, as there was a wide consensus that they were useful only in wars of attrition, not in maneuver warfare.¹³¹ Thus, carriages and mountings for machine guns, but not machine guns themselves, were forbidden from export at the start of the war.¹³² The same pattern of adapting to the changing nature of warfare can be seen in the British understanding of a German innovation—poison gas. As the British identified the compounds being used by the Germans, these chemicals were prohibited from trade. Chlorine was first used against the British and French forces on April 22, 1915, and it was banned from trade on July 28, 1915.¹³³ Phosgene was prohibited on October 19, 1915.¹³⁴

Figure 4.1 aggregates the number of products Britain prohibited from export to countries adjacent to the enemy for each month of the war through the end of 1917. While Britain continued to change its wartime commercial policy in 1918, the prohibitions made in that year prevented products from leaving the country and were not necessarily associated with trade with the enemy. The number of products prohibited specifically from trade with the enemy remained stable after 1917.

The shaded columns in figure 4.1 represent periods when British leaders expected a long war. The dashed line shows what a constant-rate increase in product prohibitions would have looked like. Large increases in the number of prohibited goods tend to correlate with moments when British decision-makers extended their war length expectations. On the other hand, moments of stasis, when the prohibition lists did not change much, tend to correlate with moments of short war expectations. This pattern is summarized in table 4.3, which shows the average number of new prohibitions in each period of war length expectations. Even though periods of long war expectations lasted longer, their average number of products prohibited per month is greater than the average number prohibited when a short war was expected. The average number of prohibitions is rather high for the first period, although it was a period of short war expectations, because it includes the initial prohibitions made at the start of the war.

As the war expectations changed toward a long war for the first time, when the Race to the Sea solidified into trench warfare, items prohibited from export to the enemy included airplanes and boats of all kinds, as well as nautical and shipbuilding equipment. These are products that could be useful for the enemy’s war effort but that required a bit longer than the initially anticipated six months to convert into military capabilities. Additional prohibitions featured numerous chemicals and manufactured metals: iron, brass, and copper. The second time the anticipated quick victory was not realized and war expectations expanded once more—around the end of June 1915 and the failure of the Dardanelles campaign—food and forage for animals were prohibited, as were cotton manufactures, rubber, and resins. When war expectations turned long for the third time and remained there, Britain started prohibiting machinery used in domestic manufacturing, products that were used to repair or replace other products of use on the battlefield. These included tools and instruments for fixing telegraphs and metalworking machinery. Additionally, all manner of products from which something useful could be derived joined the ranks of prohibitions. For example, “boots and shoes with soles or uppers of leather” were prohibited to deny the enemy access to leather.

Indeed, a product’s conversion time determines when a specific product is prohibited from trade with the enemy. While getting a temporal measure of conversion time would require industry knowledge of the production processes of World War I–era technology and of transportation routes for individual companies’ supply chains and factory locations, it can be roughly approximated with a product’s relative position in the manufacturing process: finished goods, intermediate goods, raw materials, or substitute goods. Substitute goods are used in manufacturing after the products they replace are no longer available. Products at the beginning of a supply chain have longer conversion times than products at the end of the same supply chain. Substitute goods have the longest conversion times relative to other products in the supply chain.

Figure 4.2 disaggregates the products Britain prohibited from export to the enemy by their relative position in a supply chain and shows the distribution of when each was added to the prohibition lists. The fact that prohibitions in products across the four categories were spread across the full duration of the war logically coheres with the concept of conversion time. Some supply chains are short and useful to the war effort; the raw materials and finished goods of such supply chains should be prohibited early in the war. Other supply chains are short but take a long time to convert into military capabilities; those raw materials and finished goods should be prohibited further into the war.

Products within the same supply chain were generally prohibited in order of increasing conversion time. For example, harnesses and saddles used for military purposes were prohibited from trade at the start of the war.¹³⁵ However, the leather used to make such saddles was prohibited later, on October 6, 1914.¹³⁶ Metal fittings for the harnesses were prohibited on July 28, 1915.¹³⁷ Harness-making machines could be traded with the enemy all the way up to December 18, 1917.¹³⁸ The wartime commercial policy first prevented the enemy from having access to products of immediate use on the battlefield, then tightened progressively to prevent the enemy from gaining the supplies necessary to make those war-ready finished goods. The same pattern can be traced through uniform clothing, which was prohibited from trade with the enemy at the start of the war.¹³⁹ “Cloth, woolen or worsted, if suitable for uniform clothing” was not prohibited until October 19, 1914.¹⁴⁰ “Leather, dressed or undressed, suitable for military clothing” was prohibited on February 3, 1915.¹⁴¹ “Uniform clothing, second hand military,” which had to be taken apart and the fabric and other parts reused to make a new uniform, was prohibited only on May 10, 1916.¹⁴² The longer the product’s conversion time into military capabilities, the less likely it was that the product would be prohibited from trade early in the war.

Figure 4.3 generalizes this pattern across all the products that were prohibited from trade with the enemy. On average, it took about nine months for finished goods to be prohibited from export, a year for intermediate goods, a year and a half for raw materials, and about two years for substitute goods.¹⁴³ This pattern suggests that conversion times dictated the timing of prohibitions as products at the beginning of the supply chain were prohibited earlier than products at the end of it.

the role of domestic politics

The British domestic lobbying efforts during the war were somewhat consistent with the process, though not the outcome, hypothesized by the industry-level version of the open economy politics approach. Members of the same industry joined in their efforts to write to the Board of Trade, relying on collective action to boost the strength of their requests. Industry representatives primarily asked for prohibitions on wartime trade to be lifted either in general or through the provision of special licenses. The Board of Trade, however, firmly maintained that the exigencies of war took priority over all else. The wartime commercial policy largely reflected the government imposing its own preferences over commercial policy to ensure that economic considerations were balanced against security concerns.

However, while industry was largely denied a voice in how wartime commercial policy was formed, industry voices were far from useless to the government. Information about product differentiation provided in lobbying letters allowed the British government to make their wartime commercial policy more targeted.¹⁴⁴ More general product categories could be broken down into specific products, and only products that would help the enemy on the battlefield were prohibited from wartime trade.

An illustrative example was the effort made by Britain’s domestic firms to remove “lead, in all forms,” from the list of items prohibited from export from the country. In a letter dated August 14, 1914, the director of Locke Lancaster, a prominent lead merchant, argued that the product description was too inclusive.¹⁴⁵ It prohibited, for instance, the export of tea lead linings for tea chests and white lead, neither of which has a military application but both of which are necessary to sustain the export of certain industries. He also advocated that pig lead, which was admitted to have military applications, should be prohibited from export to the enemy, not restricted from leaving the country altogether. This request was justified by the claim that both France and Russia had previously obtained their pig lead from Germany, and if Britain was not available to supply it, the allies would be forced to purchase this necessary article from the enemy. This plea sparked a conversation, and on August 20, 1914, “lead, in all forms” was replaced with “lead, pig, sheet, or pipe”; however, despite the pressure from lead exporters, this item was still prohibited from leaving the country.¹⁴⁶

The one clear success case for business lobbying efforts was a delegation representing 70 percent of London’s confectionary trade, which convinced the Board of Trade to remove “confections, all kinds,” from the list of items prohibited from export. Confections were prohibited from August 5 to August 20, 1914.¹⁴⁷ This product did not reappear on the prohibition lists until March 12, 1917, and it was again removed on May 11, 1917.¹⁴⁸ Such leniency was given because the group convincingly showed zero domestic demand for their products and proved that their only clients were British colonies.¹⁴⁹ Basically, the enemy had no interest in their products.

On the other hand, rather unsurprisingly, merchant requests to allow the export of ammunition, even to African countries, were habitually denied.¹⁵⁰

This chapter demonstrated the causal mechanisms of the wartime trade theory through process tracing of British decision-making in World War I. Focusing on the security externalities of wartime trade and understanding that neutrals would open channels of indirect trade between the belligerents, Britain developed a product-level policy to balance the security and economic imperatives of wartime trade. Only products with short conversion times were prohibited from trade, to prevent the enemy from increasing their military capabilities during the war. Products important to British industry, on the other hand, were allowed to be imported into the country under license to ensure the continued stream of revenue into the long-term security of the state. As war expectations changed, Britain adjusted its policy in accordance with the wartime trade theory. When the war grew longer, the wartime commercial policy became more restrictive, with products further down the supply chain being prohibited from reaching the enemy. When the stakes of the war increased, Britain rescinded some of its licensed trade with the enemy, depriving its own industry of necessary raw materials.

Britain’s initial wartime commercial policy was designed for a quick war on the Continent. It was quite lax, prohibiting only trade in arms, ammunition, gunpowder, and the like. Not even all military equipment was prohibited from trade: machine guns and shipbuilding equipment were deemed innocent for wartime trade with the enemy. The majority of indirect trade with the enemy was permitted. Direct trade was prohibited, but with the major caveat of being prohibited for the period of time when such trade would not have been logistically possible anyway.

When the expectation of a quick and easy war evaporated, Britain’s wartime commercial policy became progressively more suppressive of trade with the enemy. As the war settled into trench warfare, implements for digging trenches, along with other materiel required for a more stationary model of war, were prohibited from reaching the enemy. When the war did not end by the end of 1914 as was initially planned for, British decision-makers reassessed their wartime commercial policy, prohibiting numerous products previously deemed innocent. By the end of 1916, with no end of war in sight, hopes of victory dwindling, and funds running out, Britain ceased providing licenses for products previously deemed too important to the domestic industry to lose trade in. Only hosiery needles, essential for the textile industry, could be imported from the enemy under license.