Richard Overy: The timing of the war suited the Allies economically, not Germany

Discussions on the economic history of the nations taking part in WW2, from the recovery after the depression until the economy at war.
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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by Michael Kenny » 14 Mar 2022 21:11

TheMarcksPlan wrote:
13 Mar 2022 06:53


In Dec. 1938 there was - as the dispatch mentions - immense French frustration over Munich. Thereafter, France started more aggressively seeking an alliance with the SU, which Chamberlain did everything in his power to thwart. France was very understandably frustrated with Britain as an ally: they were unwilling/unable to contribute much to defending France (2 divisions available at point) and were destroying France's best (only) hope of defeating Germany. France SHOULD have been telling Britain to bugger off; the passive aggression they got instead was a small pittance of what they deserved. ...............................
...................This is just abominable coming from the British FO. It's basically making fun of France for not having a moat to hide behind, for not being able to be somewhat casual about military realities because the stakes were existential for France. And all while the FO was sabotaging the only thing that could have helped France. Perfidious Albion...

The Alliance with France was vital to the UK as it was the French Army that was needed to fight a land war against Germany. Far from trying to insulate itself from European matters it was the UK that forced the issue and declared war on Germany. In the 1930s it was The French Army that was seen as the most powerful Army in Europe and there was no expectation that it would be knocked out of the war in a matter of weeks .Hindsight is everything.

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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by wm » 14 Mar 2022 21:36

Post ww1 the French were believed to be gods of war.
And they had a moat to hide behind - the Maginot Line protecting the most vital parts of France.
Fully manned, the "moat" would have sent hundreds of thousands of Germans straight to Valhalla.

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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by Steve » 15 Mar 2022 01:21

The British planned that defence expenditure for 1937 -41 should not exceed £1,500 million pounds and that if any more was necessary it would probably be raised by taxation rather than borrowing. The 1938 budget allowed for £90 million to be borrowed and for an increase of £30 million in revenue involving a 6d (2.5%) increase in standard rate of income taxation. On March 23 the government approved a statement to parliament asking that full priority (by industry) should be given to defence contracts. Defence contract work had been gradually given priority to the detriment of exports.

In February 1938 the cabinet agreed to limit defence expenditure in the quinquennium 1937- 41 to £1570 million. The Chancellor thought “higher defence expenditure could not be reached unless we turned ourselves into a different kind of nation”. Hopkins the Controller of Finance and Supply Services at the Treasury thought that the Anschluss had provided an opportunity of winning over public support for rearmament, and this should make it possible to raise more money by taxation, and perhaps by borrowing. The government’s domestic debt and the funding of debt incurred through rearming stood up well till the summer of 1938.

After Munich it was proposed to increase the Air Force programme. Hopkins estimated that if the air Ministry was given what it asked for and the other departments were held to the Inskip ration, £820 million would have to be been borrowed in the last three years of the quinquennium to March 1942, allowing for the fact that revenue was falling owing to a recession and civil expenditure was rising. About £180 million would have been borrowed in 1937 and 1938, so that total borrowing for the quinquennium would come to £1,000 million compared with the £400 million authorised by the Defence Loans Act. Hopkins believed that borrowing on such a scale must tend to be inflationary. On November 7 the Air Ministry was told to scale back its plans.

Expansion of the Government’s borrowing powers was considered by the Treasury and the Bank of England. An increase of £400 million over the existing £400 million borrowing power was put to Parliament in February 1939, making it £800 for the quinquennium 1937- 42. In the twelve months to 30 September 1938 £310 million had been spent on defence an increase of £120 million over the previous 12 months but unemployment had risen by 450,000. There was a decline in export trade and a decline in house building at home also shortages of industrial raw materials and of various categories of skilled labour.

In the six months between the Anschluss and Munich British gold reserves fell from a peak of £800 million to £650 million and the outflow continued after the Munich settlement. In the autumn of 1938 difficulty was experienced in holding the value of the pound and in the last quarter of the year it fell on the open market to a figure just over 4.60 against the dollar, compared to a top figure of 5.0 earlier in the year. In January 1939 Hopkins was warning the cabinet through the Chancellor of the Exchequer “it must be said that recent conditions have been painfully reminiscent of those which obtained in the country immediately prior to the financial crises of 1931”.

In the April 1939 budget of the £650 million forecast to be spent on defence in the financial year 1939 well over half £380 million was to be borrowed. The increase in the Government’s borrowing powers by £400 million for the period up to March 1942 announced in February 1939 had been a deliberate understatement to prevent too violent a reaction on government credit.

The transfer of gold into the Exchange Equalisation Account did little to check speculation against the pound. In March 1939 the account began to lose gold uninterruptedly and by June the gold stock was £300 million down on the £800 million of fifteen months previously. On August 22 it was announced that further sales of gold and foreign exchange was suspended.

Taken from – British Rearmament and the Treasury 1932 – 1939 by G.C.Peden 1979.

The book has a huge amount of detail and anyone really interested in the subject should have it in their bookcase. I dipped into one chapter to hopefully show that Britain was stretched to the limit of what it could spend on defence and could not have sustained defence expenditure on the 1939 scale for long.

In the British April 1939 budget revenue was estimated at £918,300,000 and expenditure at £922,500,000. After various expenses the government had £223,500,000 for that years defence budget. In February 1939 the estimated defence expenditure figure had been given as £580,000,000 of which £350,000,000 would have been loan money. The Chancellor now told the house that the estimated defence expenditure was not £580,000,000 but £630,000,000. This seems to be about 43.78 billion in today’s money. Almost the same as the UK defence budget in 20/21 which was 44.6 billion but drawn from a much larger generally richer population.

Chamberlain wrote to his sister Ida on October 8 1939 “As you know I have always been more afraid of a peace offer than of an air raid”.

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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by wm » 15 Mar 2022 04:26

Well, statements in the vein the UK declared war on Germany are basically straight from Goebbels' propaganda factory.
Germany declared war on the (pure defensive) French-British-Polish alliance fully aware that Britain couldn't "weasel out" from it.

It wasn't 1938 Czechoslovakia once again when Britain was a neutral mediator without any treaty obligations towards the Czechs.
This time Britain signed an alliance openly and as Hitler said on hearing about it - "if the British ratify a treaty one day, they don't break it the next."
And it wasn't for free either. Poland was required to declare war on Germany in case Germany attacked Britain or any of the small countries including Belgium.

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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by Michael Kenny » 15 Mar 2022 06:13

wm wrote:
15 Mar 2022 04:26
Well, statements in the vein the UK declared war on Germany are basically straight from Goebbels' propaganda factory.............

The UK did declare war on Germany. That is an undeniable fact and it does not sit well with the Anglophobic. They castigate the UK for betraying Czechoslovakia in 1938 and they castigate The UK for not not betraying Poland in 1939. There is no way of getting through to such blinkered individuals.

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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by TheMarcksPlan » 15 Mar 2022 09:17

wm wrote:
14 Mar 2022 21:36
Post ww1 the French were believed to be gods of war.
And they had a moat to hide behind - the Maginot Line protecting the most vital parts of France.
Fully manned, the "moat" would have sent hundreds of thousands of Germans straight to Valhalla.
The moat/Maginot doesn't solve the problem of winning the war, even if we accept that confidence in the line was great (it wasn't, because most people noticed that the Low Countries existed).

To win the war the Allies needed an offensive, as German influence in Scandinavia and Southeast Europe, plus autarky measures, rendered blockade indecisive even before the MR Pact. With the Pact, blockade was a hopeless strategy.

How do you successfully invade Germany when France has 40% of Germany's military-age manpower and Britain will commit no more than 30 divisions in 1941?

You can't, which the Allies recognized. Thus they started thinking, "well maybe we'll go to war with SU also, to make our blockade effective." So you get insane - but seriously pursued - ideas like bombing Baku and intervening in Finland.

If you can't win a war you're eventually going to lose it. And that's what happened - at least to France but arguably to Britain as well (subsequent events being arguably an analytically separable war in which Britain played a small part, riding the coattails of two superpowers. I.e. Germany won the War of the First Coalition and then lost against the Second Coalition). Sooner or later, the much weaker French Army (plus weak British assistance) was going to lose to Germany's much bigger and qualitatively superior army.

And yes, Britain's army was tiny at the start of the last war. But by the time France faced Germany on a one-front war in 1918, the BEF was the second-largest and probably overall the strongest portion of the Allied coalition. With a tiny BEF and a one-front war, France was cooked. The rapid defeat of 1940 was contingent in many ways but France being defeated within a year or so was not.
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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by Peter89 » 15 Mar 2022 17:38

TheMarcksPlan wrote:
15 Mar 2022 09:17
wm wrote:
14 Mar 2022 21:36
Post ww1 the French were believed to be gods of war.
And they had a moat to hide behind - the Maginot Line protecting the most vital parts of France.
Fully manned, the "moat" would have sent hundreds of thousands of Germans straight to Valhalla.
The moat/Maginot doesn't solve the problem of winning the war, even if we accept that confidence in the line was great (it wasn't, because most people noticed that the Low Countries existed).

To win the war the Allies needed an offensive, as German influence in Scandinavia and Southeast Europe, plus autarky measures, rendered blockade indecisive even before the MR Pact. With the Pact, blockade was a hopeless strategy.

How do you successfully invade Germany when France has 40% of Germany's military-age manpower and Britain will commit no more than 30 divisions in 1941?

You can't, which the Allies recognized. Thus they started thinking, "well maybe we'll go to war with SU also, to make our blockade effective." So you get insane - but seriously pursued - ideas like bombing Baku and intervening in Finland.

If you can't win a war you're eventually going to lose it. And that's what happened - at least to France but arguably to Britain as well (subsequent events being arguably an analytically separable war in which Britain played a small part, riding the coattails of two superpowers. I.e. Germany won the War of the First Coalition and then lost against the Second Coalition). Sooner or later, the much weaker French Army (plus weak British assistance) was going to lose to Germany's much bigger and qualitatively superior army.

And yes, Britain's army was tiny at the start of the last war. But by the time France faced Germany on a one-front war in 1918, the BEF was the second-largest and probably overall the strongest portion of the Allied coalition. With a tiny BEF and a one-front war, France was cooked. The rapid defeat of 1940 was contingent in many ways but France being defeated within a year or so was not.
The economic blockade was more effective than you describe. Germany's autarchy program was both unrealistic and ineffective. Not before the May of 1941 had Germany any chance to stabilize her economic situation - including that of food.
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wm
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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by wm » 15 Mar 2022 19:08

Michael Kenny wrote:
15 Mar 2022 06:13
The UK did declare war on Germany. That is an undeniable fact and it does not sit well with the Anglophobic. They castigate the UK for betraying Czechoslovakia in 1938 and they castigate The UK for not not betraying Poland in 1939. There is no way of getting through to such blinkered individuals.
No, it isn't undeniable.
It was like, today Putin attacks Poland and the other NATO countries respond declaring war.
The French-British-Polish alliance was a proto-NATO before NATO.
And the situation was exactly the same.
There was an aggressor and there were its victims: Poland, France, Britain.

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Re: Richard Overy: The timing of the war suited the Allies economically, not Germany

Post by Michael Kenny » 15 Mar 2022 20:26

wm wrote:
15 Mar 2022 19:08
Michael Kenny wrote:
15 Mar 2022 06:13
The UK did declare war on Germany. That is an undeniable fact and it does not sit well with the Anglophobic. They castigate the UK for betraying Czechoslovakia in 1938 and they castigate The UK for not not betraying Poland in 1939. There is no way of getting through to such blinkered individuals.
No, it isn't undeniable.
It was like......................
Talking to a brick wall?


Some people are still living in 1939 and they are determined to put right what they consider mortal slights on their nations honour. The UK kept its word to Poland. It declared war and made sure a nation named 'Poland' was kept in being. Land-wise Poland did quite well out of the post-war border adjustments and given that Poland was one of the states that grabbed a piece of Czechoslovakia she is in no position to lecture others about their failings.

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