British-American relations in the 1920s

Table of Contents:

I) Introduction

II) Main Part
II.1) The problem of financing the war or the prelude of the decline in Anglo-American relations
II.2) The military factor: Naval Arms limitation and the Anglo-American relation
II.3) Anglo-American relations and the oil issue

III) Conclusion

IV) Bibliography

V) Primary sources

I) Introduction:

Answering the above question one must look back to the First World War. Various scholars have shown that the origins of tensions in Anglo-American relations derive mostly from problems centred on issues of the Great War.^[1] Therefore research on this topic must start slightly before the time frame given by the above question with the examination of the time period following the First World War (1918-1920).

Since various issues influenced the decline of Anglo-American relations an essay on this topic should reasonably be arranged into the examination of different issues, rather than in a chronological way.

Factors that entailed the decline in Anglo-American relations in the post-war period were the loss of influence and power of Great Britain, related to the financial dependency on the United States, Anglo-American rivalry for naval predominance, Anglo-American rivalry concerning the world’s oil and rubber resources^[2], the war debt issue and the future of the Anglo-Japanese Alliance.

Thomas Buckley has shown that a deep suspicion of Britain existed within the American population and even within the American government. He stated that the predominant view on Britain was that of an arrogant competitor “whose pretensions of leadership failed to recognise realities of British decline and American rise.”^[3] He reminded the community of Historians of how deep-rooted this suspicion was in the United States of the 1920s and 1930s. The suspicions grew on the belief that Britain worked only for its own interests and therefore always against the United States whose influence increased steadily. A large number of Americans believed that Britain had manipulated the United States into the war to save its very own interests.^[4]

On the other side of the Atlantic similar resentments dominated the 1920s. British officials and media-representatives pointed out regularly the American strictness on the war debt issue and the danger of loosing the world-leadership. The British Ambassador to Washington wrote in 1921:

“The central ambition of this realist school of American politicians is to win for America the position of leading nation in the world and also of leader among the English-speaking nations. To do this they intend to have the strongest navy and the largest mercantile marine. They intend also to prevent us from paying our debt by sending goods to America and they look for the opportunity to treat us as a vassal state so long as the debt remains unpaid.”^[5]

Kathleen Burk has established the view that the loss of British power and decision-making in relation to the USA began in 1917 with the entrance of the United States into the war.^[6] This dependence is clearly visible in terms of supply and finance and laid the foundation of the following change in the post-war world order. Therefore it is important here to emphasise this development.

II) Main Part

II.1) The problem of financing the war or the prelude of the decline in Anglo-American relations

Great Britain fulfilled its traditional task of financing the allies as it had done in most of the previous wars, lacking a sufficient standing land army.^[7] Regarding the dimensions of the First World War and its totality one can easily understand the problems related to its financing. Relatively early, in 1914, Britain therefore sent the first special mission to Washington to negotiate conditions for the purchase of goods and the possibilities to raise money in America since it became clear that Great Britain could not supply its rapidly expanding army on its own.^[8]

When Lloyd George became Minister of munitions in 1915 he decided to exploit the American economic power for the benefit of the Allies. By then the first resident mission was sent to Washington and employed 1600 members when the United States entered the war in 1917. This commission purchased munitions for the entire entente.

This practice of purchasing in the United States of America resulted in an average expenditure of $ 75 million per week by 1917. This massive sum was not easily raised while the United States was still neutral. These $ 75 million had to be raised on the private market in three ways: One way was to ship gold to America and use it to buy dollars. Secondly, the British government bought American securities^[9] that were owned by British citizens and sold it in New York. Both of these resources were used up quickly. The third possibility lay in the issue of public loans in America but as the outcome of the war was still uncertain, these were harder and harder to sell. However, these bonds became vital for Britain as they represented the only possibility to raise dollars without buying them with pounds as to depress the exchange rate and make dollars even more expensive.^[10]

These missions were unofficial until April 1917 since international law prohibited a war nation to maintain a supply base in a neutral country. Furthermore the British had to work carefully because the American population was split up in pro-British, pro-German and highly indifferent groups. Therefore the missions worked under a permanent threat of a Congressional Embargo on the export of war supplies and thus operated under company names without much direct contact with the American government.^[11]

[...]

^[1] For example: Kathleen Burk, Great Britain in the United States, 1917-1918: The Turning Point. IHR 1, p. 228; David Reynolds, Rethinking Anglo-American Relations. IA 65, p. 91; B.J.C McKercher, The politics of naval arms limitation in Britain in the 1920s. Diplomacy and Statecraft 4, p. 35, Alan S. Milward, The economic effects of the two World Wars on Britain. London 21984, p. 56; Fiona Venn, ‘A futile paper chase’: Anglo-American Relations and Middle East oil, 1918-1934. Diplomacy and Statecraft 1, p. 167.

^[2] Britain held a rubber monopoly by which it could hold the prices high. This enabled Britain to extract money from the main rubber consumer USA. (PRO, T 172/1486). Compare Frank C. Castigliola, Anglo-American Financial Rivalry in the 1920s. The Journal of Economic History, 37 (1977), p. 912

^[3] Thomas H. Buckley, The Icarus Factor: the American Pursuit of Myth in Naval Arms Control, 1921-1936. Diplomacy and Statecraft, 4 (1993). P. 128

^[4] Thomas H. Buckley, The Icarus Factor. P. 127

^[5] Cited in Frank C. Castigliola, Anglo-American Financial Rivalry in the 1920s. The Journal of Economic History, 37 (1977), p. 913. The USA had established high import tolls in 1921/22 that closed the American market or made it at least very expensive to import.

^[6] Burk, Great Britain in the United States, p. 228. In this context Lord Northcliffe (Head of the British war mission in the USA) wrote in 1917: “We are down on our knees to the Americans...”

^[7] Compare with the Napoleonic Wars from 1793 to 1814, when Britain financed the Continental powers on a large scale, lacking a great standing army. H. C. Allen, Great Britain and the United States. A History of Anglo-American relations (1783-1952). London 1954, p. 754

^[8] Burk, Great Britain in the United States, p. 229

^[9] e.g. shares in railways

^[10] Burk, Great Britain in the United States, pp. 230-231

^[11] Burk, Great Britain in the United States, p. 232