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Not-really-Great Britain was on self-destruction mode across an entire century.
-- Increasing costs of maintaining the empire.
-- Onslaught of WWI and Winnie's disastrous campaigns in the Dardenelles.
-- Extremely expensive war with Japan in the Indian Front
-- Onslaught of WWII
-- Winnie finally becoming FDR's lap poodle
-- Presumptuous Suez canal war with Egypt which finally put them in the coffin.
Sorry to say there is more to the story than meets the eye, so I'll repost what I've already posted earlier;
"My first question at the Treasury of an international
character was our American debt. At the end of the war, the
European Allies owed the United States about ten thousand
million dollars, of which four thousand million were owed by
Britain. On the other hand, we were owed by the other
Allies, principally by Russia, seven thousand million dollars.
In 1920, Britain had proposed an all-round cancellation of
war debts. This involved, on paper at least, a sacrifice by us
of about seven hundred and fifty million pounds sterling. As
the value of money has halved since then, the figures could
in fact be doubled. No settlement was reached. On August
1, 1922, in Mr. Lloyd George’s day, the Balfour Note had
declared that Great Britain would collect no more from her
debtors, Ally or former enemy, than the United States
collected from her. This was a worthy statement. In
December of 1922, a British delegation, under Government,
visited Washington; and as the result Britain agreed to pay
the whole of her war debt to the United States at a rate of
interest reduced from five to three and one-half per cent,
irrespective of receipts from her debtors.
And then it was again the US money ( and partially British money) that financed the rebirth of German military machine.
The rest is history, including the fact that US was a major financial winner ( yet again) as the direct result of the WWII, that took lives of millions of Europeans.
So no, US did not become a superpower "by chance and luck," but because it was pulling the financial strings behind the scene all along. As in "money rule the world," the rest are pure speculations.
Ok - Lets understand this - Basically Britain had it would only repay to the US what it would get repaid by their debtors.
But the US rightly insisted on full repayment of their Debts - But they reduced their interest rates for the British. Then the British in order to repay the debts effectively had to become a debt collector for the US, and impose tough conditions on the Germans to get repayment - but it appears they had to reduce the amount they were getting paid by their allies - so they were sort of getting shafted by there so called Allies.
So why didn't Loyd George - just stand by the statement he made earlier - and only repay what was repaid to the British - that is odd? The only thing he seems to have done is get the interest rate lowered.
I do believe the US had a long term strategy of outwardly acting like Allies but in reality wanted to weaken the British Empire and break it up, and other European Countries - but really did not have military Muscle or political muscle to get into a war with the British - plus all the ties between the two countries mean it could never happen. Therefore there strategy was lending money to put them into debt, let them colonise, and fight with others to get them to use up all their resources.
here is an interesting point about the debt repayments in wilkipedia
"Under the Hoover Moratorium of June 1931 issued by the American president Herbert Hoover, which was designed to deal with the world-wide financial crisis caused by the bankruptcy of the Creditanstalt in May 1931, Germany ceased paying reparations.[49] At the Lausanne Conference of June 1932, reparations were formally cancelled. Marks calculates that between 1921 and 1931, Germany paid a total of 20 billion marks in reparations, most of which came from American loans that the Germans repudiated in 1932. In this way, the Germans largely escaped paying for World War I, and instead shifted the costs onto American investors. The American historian Gerhard Weinberg commented about the way the Germans used reparations to avoid paying the costs of World War I that "The shifting of the burden of reparations from her shoulders to those of her enemies served to accentuate this disparity" in the economic strength of the Allies, which struggled to pay their heavy World War I debts and the other costs of the war and Germany, which paid neither reparations nor its World War I debts"
It just so happened - that WW2 came along. To suggest that WW1 and WW2 were all part of some great master plan by the US - is going a bit far.
Last edited by mikeyking; 08-19-2011 at 11:39 AM..
Ok - Lets understand this - Basically Britain had it would only repay to the US what it would get repaid by their debtors.
But the US rightly insisted on full repayment of their Debts - But they reduced their interest rates for the British. Then the British in order to repay the debts effectively had to become a debt collector for the US, and impose tough conditions on the Germans to get repayment - but it appears they had to reduce the amount they were getting paid by their allies - so they were sort of getting shafted by there so called Allies.
So why didn't Loyd George - just stand by the statement he made earlier - and only repay what was repaid to the British - that is odd? The only thing he seems to have done is get the interest rate lowered.
From what I see here, Great Britain owed only 4 thousand million out of total 10 thousand million.
Those six thousand million ( the bigger chunk of money actually that was owed to the US by other allies) were supposed to be re-payed as well. So my guess is that even if Gr. Britain would have reduced its burden on Germany, the other allies would have still stepped it up.
Quote:
I do believe the US had a long term strategy of outwardly acting like Allies but in reality wanted to weaken the British Empire and break it up, and other European Countries.
And by "other European countries" I suspect it was meant to be Germany first of all in the long run.
So yes, I think what you are saying here has been a case and it still stands true. Therefore no, it doesn't look like the WWII " just so happened" or "came along" out of nowhere.
Quote:
To suggest that WW1 and WW2 were all part of some great master plan by the US - is going a bit far.
I don't think that WWI was a part of some "great master plan" by the US - not at all. European countries ( that are much older of course) had their own feuds with each other for centuries and they've been doing very well massacring each other without any US interference thank you very much.
But the WWII is a different story. Those old feuds and simmering conflicts were already exploited by the US I believe for its own ( future) advantage.
As the bible predicted "I didn't come to bring peace... but sword."
So it has been said, and so it shall be done, heh. All were Christian countries.
PS. Those Churchill's words regarding the proposal of debt cancellation sounded almost like prophetic warning.
I don't think Europeans with all their losses wanted another war after the WWI. At least not that soon.
I know.
I've decided to combine it, since you were kinda in agreement...
I didn't realize you were replying to me...
In order to make the connection that American demand to have their debts repaid led to the issues in the German economy, one has to accept that the reparations were in fact unpayable.
The years between the ending of WW1 and the rise of Hitler are very little studied or understood by many people. Most simply accept Keynes' view that the reparations were unpayable and wrecked the German economy, which lead to the rise of Hitler.
There are many historians now such as MacMillan, Mantoux, Marks, Ferguson, Taylor, et al that refute Keynes' assessment and instead argue that it was the bumbling of the Allies in how they handled the enforcement of the reparations, particularly France and the actions of the German government itself to protest the reparations that led to the economic issues and rise of Hitler.
The United States certainly insisted on collecting on the money it was owed in full. This was not an insurmountable problem. The United States was owed around $10 billion US, most of which had been funnelled through Britain, which was still a net creditor nation at the end of WW1.
Total German reparations had been set at a very sustainable $50 billion Marks (~$24 billion US), when they were divided into A, B and C bonds. The Allies only intended to collect on the A and B bonds, the additional $82 billion Marks (~$40 billion US) missing was allocated to the C bonds, which no one intended to collect and was done merely to pacify the French public. This total amounted to $1 billion Marks LESS than what the Germans themselves had proposed.
The problems began and ended with the actions of France in how it handled the payment of the reparations. Throughout 1921 and 1922 France occupied Dusseldorf as an incentive to pay the reparations. They were paid in full, on time and the German economy actually grew at this time. France pulled out in 1922 and instantly the Germans stopped paying, or were late with payments. The Weimar government was testing Allied resolve to collect the reparations.
The British and Americans by this time had been arguing to reduce the reparations owed by Germany as the economies of both had significantly recovered and were doing well, as was the German economy. The French insisted on maintaining the payments and set on a course of occupation in the Ruhr that led the German government to make a critical decision, they engaged in policies of hyperinflation to protest the French occupation.
This hyperinflation garnered the Germans international sympathy, ruined their economy and with a simultaneous decline in the Franc the French finally acquiesced to Anglo-American pressure to restructure the debts and payments. This became known as the Daws Plan and eventually gave rise to the Young Plan.
The Germans received great concessions under these plans, took in billions in American loans and removed most of the shackles of Versailles, including the ending of the Ruhr and Rhineland occupations. In total between 1921 and 1931 the Germans took in $27 billion Marks from the US in loans and paid only $19.7 billion Marks in reparations. The scheme the US and Britain setup to loan money to Germany that they then used to pay reparations, which were then used to pay off US loans worked great until the stock market crash of 1929 and the ensuing Depression. Suddenly all of Germany's loans came do and there was no more money to borrow and the German economy imploded.
What it all comes back to is two points:
1. The Allies did not have the fortitude to carry out an occupation of Germany to enforce the repayment of reparations and all provisions of the Versailles Treaty. Even when such actions were undertaken, they were almost always unilateral action by France with great misgivings by the Anglo-American block who favored looser terms, lower payments, etc.
2. The reparations were never severe enough to cripple the German economy and the debts owed by other nations to the US were not severe enough to cripple their economies either. Instead, the Germans engaged in deliberate actions to test their ability to refute the Versailles Treaty and they were quite succesful. The course of inflation (by creating inflation, the total debts were greatly reduced) that gripped Germany in the 20's was a German reaction to French occupation of the Ruhr and gained them great latitude in the enforcing of Versailles and overall reparations payments.
For instance many of the restrictions on German militarization were lifted in the late 1920's under the Young Plan. How could Germany afford planes, tanks, guns, etc. if they couldn't afford reparations payments?
The end only came when the US stock market crashed in 1929 and the flow of money under the Daws/Young Plan stopped. This crushed the German economy that had been made fragile by their earlier inflationary policies and setup the situation that gave rise to Hitler.
So, what it all comes back to is the Allies were unwilling to put any teeth into the Versailles Treaty. The Germans understood this and did all they could to test the waters and gain favor with the Anglo-American block that preferred a change in and reduction to reparations. Had the Allies actually enforced Versailles from the beginning it would have been a very different situation. Had the stock market not crashed in 1929, Hitler may never have come to power as the flow of money would not have been stopped.
This is a very complicated topic and I have only given a bullet point synopsis of the events. However, it is wrong to say that US insistence on debt repayment caused WW2. It is also wrong to say that reparations crippled Germany. The problem was essentially an incomplete peace as the Germans were never really defeated and they protested Versailles from day one and the Allies never really had the fortitude to make the Germans comply.
In order to make the connection that American demand to have their debts repaid led to the issues in the German economy, one has to accept that the reparations were in fact unpayable.
The years between the ending of WW1 and the rise of Hitler are very little studied or understood by many people. Most simply accept Keynes' view that the reparations were unpayable and wrecked the German economy, which lead to the rise of Hitler.
There are many historians now such as MacMillan, Mantoux, Marks, Ferguson, Taylor, et al that refute Keynes' assessment and instead argue that it was the bumbling of the Allies in how they handled the enforcement of the reparations, particularly France and the actions of the German government itself to protest the reparations that led to the economic issues and rise of Hitler.
The United States certainly insisted on collecting on the money it was owed in full. This was not an insurmountable problem. The United States was owed around $10 billion US, most of which had been funnelled through Britain, which was still a net creditor nation at the end of WW1.
Total German reparations had been set at a very sustainable $50 billion Marks (~$24 billion US), when they were divided into A, B and C bonds. The Allies only intended to collect on the A and B bonds, the additional $82 billion Marks (~$40 billion US) missing was allocated to the C bonds, which no one intended to collect and was done merely to pacify the French public. This total amounted to $1 billion Marks LESS than what the Germans themselves had proposed.
The problems began and ended with the actions of France in how it handled the payment of the reparations. Throughout 1921 and 1922 France occupied Dusseldorf as an incentive to pay the reparations. They were paid in full, on time and the German economy actually grew at this time. France pulled out in 1922 and instantly the Germans stopped paying, or were late with payments. The Weimar government was testing Allied resolve to collect the reparations.
The British and Americans by this time had been arguing to reduce the reparations owed by Germany as the economies of both had significantly recovered and were doing well, as was the German economy. The French insisted on maintaining the payments and set on a course of occupation in the Ruhr that led the German government to make a critical decision, they engaged in policies of hyperinflation to protest the French occupation.
This hyperinflation garnered the Germans international sympathy, ruined their economy and with a simultaneous decline in the Franc the French finally acquiesced to Anglo-American pressure to restructure the debts and payments. This became known as the Daws Plan and eventually gave rise to the Young Plan.
The Germans received great concessions under these plans, took in billions in American loans and removed most of the shackles of Versailles, including the ending of the Ruhr and Rhineland occupations. In total between 1921 and 1931 the Germans took in $27 billion Marks from the US in loans and paid only $19.7 billion Marks in reparations. The scheme the US and Britain setup to loan money to Germany that they then used to pay reparations, which were then used to pay off US loans worked great until the stock market crash of 1929 and the ensuing Depression. Suddenly all of Germany's loans came do and there was no more money to borrow and the German economy imploded.
What it all comes back to is two points:
1. The Allies did not have the fortitude to carry out an occupation of Germany to enforce the repayment of reparations and all provisions of the Versailles Treaty. Even when such actions were undertaken, they were almost always unilateral action by France with great misgivings by the Anglo-American block who favored looser terms, lower payments, etc.
2. The reparations were never severe enough to cripple the German economy and the debts owed by other nations to the US were not severe enough to cripple their economies either. Instead, the Germans engaged in deliberate actions to test their ability to refute the Versailles Treaty and they were quite succesful. The course of inflation (by creating inflation, the total debts were greatly reduced) that gripped Germany in the 20's was a German reaction to French occupation of the Ruhr and gained them great latitude in the enforcing of Versailles and overall reparations payments.
For instance many of the restrictions on German militarization were lifted in the late 1920's under the Young Plan. How could Germany afford planes, tanks, guns, etc. if they couldn't afford reparations payments?
The end only came when the US stock market crashed in 1929 and the flow of money under the Daws/Young Plan stopped. This crushed the German economy that had been made fragile by their earlier inflationary policies and setup the situation that gave rise to Hitler.
So, what it all comes back to is the Allies were unwilling to put any teeth into the Versailles Treaty. The Germans understood this and did all they could to test the waters and gain favor with the Anglo-American block that preferred a change in and reduction to reparations. Had the Allies actually enforced Versailles from the beginning it would have been a very different situation. Had the stock market not crashed in 1929, Hitler may never have come to power as the flow of money would not have been stopped.
This is a very complicated topic and I have only given a bullet point synopsis of the events. However, it is wrong to say that US insistence on debt repayment caused WW2. It is also wrong to say that reparations crippled Germany. The problem was essentially an incomplete peace as the Germans were never really defeated and they protested Versailles from day one and the Allies never really had the fortitude to make the Germans comply.
That's an excellent Analysis - However the question was regarding the British Empire vs US. With the US an up and coming power from 1900 onward - but isolationism, they had not become the most powerful country in the world yet. There was period when lets both of them are almost even in power.
The British Empire although in Decline was still fairly formidable - But it was apparent from 1850s onward - The British mostly took a Policy of Appeasement with the US, - as the did not take sides in the Civil War, the paid compensation rather than outright war because they could not defend Canada.
Perhaps some in the 1920s was when the US started becoming stronger.
That's an excellent Analysis - However the question was regarding the British Empire vs US.
Well, I thought it was important to point out the chain of events in regards to what happened after Versailles in order to respond to the assertion that the US insisting on its debt payments in full drove behavior that caused the severe reparations and rise of the Nazi's.
In terms of Anglo-US relations during that time, they were very much on the same page and neither was treated as the inferior partner in those negotiations. If anything the US had a little more sway as it was American money that allowed the Daws and Young Plans to work.
Either way, it was not part of some greater machination by the US to create a situation wherein they could become a superpower, as was asserted.
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With the US an up and coming power from 1900 onward - but isolationism, they had not become the most powerful country in the world yet. There was period when lets both of them are almost even in power.
I think that would be a very accurate assessment. While US power had most likely eclipsed Britain in the early 1900's, the US still did not have the status among nations that the British held. This torch would not be passed until during WW2 when the US took the preeminent role in the fighting among the Western Allies.
The trick is figuring out when that power equalized. In the next paragraph you suggest 1850 and that is probably a good time frame, maybe even a little earlier. Economically the US was long a thorn in the British side as the US operated the largest merchant fleet in the world throughout the 1800's. The US was also keen to refute British sovereignty of the seas and trade with whomever they pleased. This obviously boiled over in 1812, but from that point forward, the British never again challenged the US the same way. So, I think ~1850 is a pretty good answer. That would mean from say 1850-1920 the two nations held a rough parity with the US eclipsing Britain economically in the 1880's, military capacity by 1920 and then outright in everyones eyes by 1942.
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The British Empire although in Decline was still fairly formidable - But it was apparent from 1850s onward - The British mostly took a Policy of Appeasement with the US, - as the did not take sides in the Civil War, the paid compensation rather than outright war because they could not defend Canada.
It wasn't just the issue of Canada. The British were all about trade and economics and ruled by public opinion at home. The only good military ventures were the ones that secured the Empire and guaranteed the flow of goods to and from Britain.
During the Civil War, there were three factors that were more concerning than the integrity of Canada to the British:
1. While the South is viewed as agrarian to the North's industry, the fact is that the North was also an agricultural powerhouse at the time producing the vast majority of food and cereal crops. Britain was HEAVILY dependent on US wheat imports, which compromised a large percentage of British consumption with no ready replacement. War with the North would have led to starvation in Britain.
2. The Souths only claim to fame was their cotton which the British were very keen on. That is until they were able to cultivate and develop equally good cotton strains in Egypt and India, which were beginning to bear fruit by 1860. Being part of the Empire, these represented secure sources absent American tarriffs. With this new cotton source to power their textile mills, they didn't need the South.
3. Britain was extremely anti-slave and the vast majority of Britains simply wouldn't support going to war in favor of a nation that was built upon slavery.
Overall though, it does show where the British weak. While their navy was quite powerful, they had a much smaller army that would not have been able to make much of an impact against the forces the North was able to muster. Even in the terms of navy, the Union Navy by 1862 had equalled the size of the Royal Navy. It was simply a fight the British most likely would not have been able to win and would have been fought at great expense.
The United States certainly insisted on collecting on the money it was owed in full. This was not an insurmountable problem. The United States was owed around $10 billion US, most of which had been funnelled through Britain, which was still a net creditor nation at the end of WW1.
Then why Churchill is saying that Great Britain owed only 4 billion out of 10? Wouldn't that mean that some other allies ( France probably?) owed US even more than Gr. Britain?
Quote:
The British and Americans by this time had been arguing to reduce the reparations owed by Germany as the economies of both had significantly recovered and were doing well, as was the German economy. The French insisted on maintaining the payments and set on a course of occupation in the Ruhr that led the German government to make a critical decision, they engaged in policies of hyperinflation to protest the French occupation.
I have forgotten all about this one, but even if to take it in consideration, your point of view ( the one you share) is not the only one possible of course, as it becomes evident even in the article on reparations in Wikipedia. ( Yes, you've rightfully mentioned Keynes point of view too.) World War I reparations - Wikipedia, the free encyclopedia
What buffles me in this article, is these words;
In this way, the Germans largely escaped paying for World War I, and instead shifted the costs onto American investors.
As in "you've had all the fun down there in Europe with WWI and now you refuse to pay for dinner."
May be I am underestimating the whole picture of American involvement in WWI too - after all it looks like the US have sponsored the WWI financially as well - did they not, while enjoying quite safe location across the ocean, where the civil population ( and country's infrastructure) would be in no danger of that war?
Quote:
For instance many of the restrictions on German militarization were lifted in the late 1920's under the Young Plan. How could Germany afford planes, tanks, guns, etc. if they couldn't afford reparations payments?
How could they afford planes-tanks-guns?
From what I've read in "The Gathering Storm," Germany was militarizing herself with the help of American loans ( that they were using to pay reparations as well,) not because they really had any money. Churchill was talking about this whole bizarre situation.
So I'll leave this subject for now if you don't mind - I want to dig for information a bit more...
It's no secret that back in the 1920's and 1930's the United States had a series of war plans, each with a different color name as its code word (United States color-coded war plans - Wikipedia, the free encyclopedia ). Some of these plans eventually morphed into the actual strategic moves of World War II.
Frankly, that's what militaries do in peace time - they come up with plans for every conceivable situation.
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