Britain, France, and the Financing of the First World War (review)

Martin Horn's work is an extremely well-researched, detailed appraisal of how Britain and France sought to finance their war effort in World War I. This topic is important, as oftentimes historians gloss over the purchasing of war material through general references to the procurement of goods from the United States by the Entente powers. Horn's book reveals the intricacies of coalition strategy at the financial level and demonstrates that the operation to fund the war by Britain and France was, on the whole, a disunified one.

Fully two-thirds of Horn's work focuses on issues of finance between the outbreak of war and the end of 1915. This approach is understandable, given that Horn seeks to show that the financial efforts of Britain and France were handicapped by prewar economic policies that prevented a truly unified policy. The economies of Britain and France were largely decentralized and consequently not geared to the prosecution of a long war where the need to fund large, conscript armies was vital to victory. In addition, the two nations had been long-time economic rivals. Upon the outbreak of war, these two factors weighed heavily on their actions. The belief in a short war partially obviated the drive to centralize their economies in order to establish a unified financial policy for prosecuting the war. Early efforts at collaboration were also handicapped by mutual suspicions harbored by the British and French, particularly the French, that each side sought to gain economic advantage during the war at the expense of the other.

A strength of Horn's coverage of British and French dealings between 1914 and 1915 is the distinction he makes between purchasing efforts among the Entente powers themselves and those involving countries abroad, mainly the United States. As domestic stocks of war material began to wane along with the belief in a short war, the Entente increasingly turned to the neutral United States for supplies. These efforts, as with those on the domestic front, were marked by difficulty, as private American investors favored British finance over that of the French, who had not been a large investor in the prewar United States economy and appeared economically weak. Increasingly, the French had to rely on British subsidies to fund the purchase of goods in the United States. This effort was far from efficient. In the absence of a unified financial policy, French fortunes fell in the face of mounting debt.

The remaining portion of Horn's work centers on the period between 1916 and mid-1917. The author asserts, although in general terms, that the collapse of the French economy by August 1916 presented a crisis for the war effort of the Entente that was insurmountable without the entry of the United States into the war. He believes that Britain, had France been forced to ask for a cessation of hostilities, had the financial means to continue the war. Even so, the loss of France, with its large army, would have meant the end of the war for the Entente powers. As the British did not have the ability to completely fund both their war effort and that of the French, the situation was dire. The entry of the United States into the war as an associated power of the Entente in April 1917 averted disaster, but infighting between the three nations over economic self-interest pervaded all remaining questions of finance despite the assurance of the supplies necessary for the Entente.

Horn concludes his book with a useful evaluation of the financial dimensions of the postwar world and the beginning of World War II. While Britain and France resumed their economic rivalry of the pre-World War I years, they realized that a greater degree of collaboration was necessary in the event...