Just yesterday, British Foreign Secretary Sir Edward Grey inked a confidential memorandum with American President Woodrow Wilson’s right-hand man, Edward ‘Colonel’ House, to join in a secret diplomatic effort to arrange for a peace conference — and potentially bring the United States into the war on the allied side if the Germans refuse. But today, as House sails back across the Atlantic with his tentative promise kept under tight wrapping, Grey attends to a matter that will bring US-British relations to a new low. Lord Robert Cecil (see above) is formally appointed Minister of Blockade, putting him nominally in charge of the economic stranglehold around the Central Powers, complete with all the details that the Americans loathe.
A Tory who became part of the coalition government put together after last May’s shakeup, Cecil’s title has been Parliamentary Under-Secretary of State for Foreign Affairs. But at his first meeting with the newly-minted cabinet member, Grey made it clear that he did not consider Cecil just another ordinary subordinate despite his inexperience. Nineteen months after the Great War began, maintenance and regulation of the blockade now makes up half the workload of Grey’s ministry, and Cecil has become a key adviser in the complex job of coordinating and communicating between five departments: the Foreign Office, the War Office, the Board of Trade, the Exchequer, and the Admiralty. Grey, who does not want to lose any part of his responsibilities to any other branch of government, rightly recognized Cecil’s talent for administration; in a conflict characterized by centralization and ‘big government,’ where unprecedented power is being afforded to appointed officials, no aspect of the British ‘war effort’ has been bureaucratized quite as much as this one.
Since September, however, the War Trade Advisory Committee has begun to overlap the Foreign Office’s responsibility on important issues, especially the contraband rules. Seeking to end these tensions — and to give his ministry greater power in Prime Minister Asquith’s government — Grey has made the unusual step of advancing Cecil as a second cabinet-rank officer for the Foreign Office.
Cecil is an ideological ‘free trader.’ Criticized in 1914 for allowing the United States to flood the cotton market, he has little direct policy impact in the day-to-day operations of the blockade. Instead, he has entrusted the details with Superintending Under-Secretary Eyre Crowe, who oversees the eight departments projecting out of the Contraband Department. This allows Cecil to focus on the most important policy mission of all, which is the collection and processing of statistics on international trade and commercial data into a weekly summary and monthly analyses that can be understood by the cabinet, who are learned men but hardly trade balance accountants. His mission is to identify banks and businesses trading with the Central Powers, pull any financial support they get from the British government, and impose the economic embargo on Britain’s enemies. This requires him to keep a close watch on business transactions, scrutinize the origins of raw materials purchased by neutral countries, and win agreements with companies from those countries to boycott enemy goods.
At the beginning of the war, the blockade was mainly aimed at stifling German exports and imports. But a strategy of economic warfare soon emerged which was supposed to insert a psychological wedge between the German business and industrial classes and the ruling aristocracy by shutting out German trade with neutrals. The Germans are meant to regard a longer war as a long-term disaster for their trade, with Britain holding the power to keep their enemy from being able to rebuild. Indeed, during January British intelligence provided the government with circulars from the Foreign Ministry in Berlin to their consuls in neutral states which outlined plans for rapidly reestablishing German commercial activity. So-called ‘export societies’ of industrial and business interests are already laying up stores in the United States to revive their import-dependent factories.
A subtle shift is now taking place, however. The strategy of making it possible to strangle Germany after the war is morphing into plans to advance British global commerce at Germany’s expense on a permanent basis. To this end, during the month of March a Reconstruction Committee begins to meet in order to study and report on the postwar economic challenges of restoring British trade preeminence, with much of the projected gains coming from German losses. During June, an Inter-Allied Conference meets in Paris to regularize the blockade across the Entente alliance, and in the process, create a new economic order in Europe. Although this means surrendering some control of the blockade to their allies, it also means the British government is finally perfecting the blockade, shutting loopholes through which the Germans have gleaned some trade. During June, Britain buys up the entire domestic production of wool; in November, the Foreign Office arranges to buy all the wool in New Zealand and Australia. The wool is then rationed out to industries for the war effort.
This is where the Americans will beg to differ, forming the chief obstacle to allied plans. Already upset by the blockade’s seizures and delays of American cargoes, the ever-lengthening contraband list, and the infringements on their neutral trade rights, the United States government is in no mood to cooperate with London. Cecil’s blacklist of firms doing business with Germany is a slight too far for President Wilson, who threatens retaliation. Even America’s entry into the war will not diminish his resolve to prevent France, Britain, and Italy from shutting America out of Europe. The result of his policy will be the transatlantic international order in which we all live now, a century later.
Grey and Cecil will have another legacy in their vision for an international League of Peace. Indeed, both play critical roles in the realization of Wilson’s vision for a League of Nations. And as a result of their experience directing the blockade of Germany, they will impress the idea of economic sanctions on that organization as an alternative to armed conflict. It is largely because of their influence that sanction regimes are a regular feature of the international order today.
In Lisbon this morning, there is further evidence of Grey’s reach as the government finally seizes German and Austro-Hungarian steamships that had been interned in the Tagus river for the duration of the war. This open breach of neutrality comes after more than a year of quiet colonial conflict in Africa, where German schutztruppen have attacked Portuguese territories with near-impunity. Despite doubts about the tiny Portuguese Army, which has a pro-German officer corps thanks to years of training exchanges, the fledgling Republic has at last made a fateful move in its so-far undeclared war with Berlin. Germany will retaliate on the 9th of March by formally declaring war against the faraway nation whose overseas possessions it has long sought to devour. Hoping to forestall the Great War, until August of 1914 Britain secretly offered to help them do it. But that policy, like so much else, is but a distant memory thanks to the conflict.