World War One: Industrial innovation and suspicion

Profiteer Image copyright Labour History Archive

Death, jingoism and stalemate are the themes for classroom lessons on World War One.

But away from the mud of the trenches, advances in science and manufacturing helped to decide the outcome of the war. Some businesses prospered, while others saw a need to revamp themselves. And amid the flurry of invention and reinvention, some people were suspicious of the money being made while the bodies piled up.

The front line developments - tanks and aeroplanes - often overshadowed some of the progress we make most use of today.

That includes the growth in communications technology, says Leeds University science historian Elizabeth Bruton.

Leading the way was the Marconi Company, founded by Guglielmo Marconi, the Italian inventor who made a pioneering early transatlantic broadcast, and whose company was later to merge with others to become Cable & Wireless.

Image copyright Hulton archive/getty images
Image caption Marconi field radios, like this one, changed the war

"Marconi wireless stations were the first to announce the outbreak of war," she says. "They also developed voice over wireless, the most important technological achievement in the First World War."

The company was savvy enough to offer to supply wireless operators to the UK government to assist them in using Marconi radio equipment, she says.

"They wanted contracts but they also wanted to be seen well by the government."

'The last million pounds'

Aside from new technology, the biggest advancement was in production, says Mark Harrison, economics professor at Warwick University.

The Allies' out-production of Germany and its allies "was the basis of victory," he says.

Image copyright Hulton archive/getty
Image caption David Lloyd George, first chancellor and then prime minister, knew spending would be key

"Lloyd George said the war would be won by the last million pounds," says Mark Harrison, and he was clever enough to "throw maximum firepower into the front line" through spending - a strategy that ultimately won.

Businesses that won government contracts did the best, including boot and shoe-makers and the clothing industry, says Terry Charman, senior historian at the Imperial War Museum, and author of The First World War on the Home Front.

The aircraft industry also grew considerably. "It was a cottage industry at the start of the war but by the end had expanded terrifically," he says.

The final war?

But the successes were not without controversy at the time.

World War One was thought of by many as the war to end all wars. But some saw unsavoury financial interests at work.

Image copyright Hulton archive/getty
Image caption In 1914 bombs were released by hand, but by 1918 both sides were using specially-designed heavy bombers

Smedley Butler was a US Marine Corps major general who later campaigned against military expansionism, and saw profits being reaped alongside "newly placed gravestones" and all the other grisly trappings of war.

He portentously wrote in 1935 that war was far too profitable to be impossible again, pointing to the immense amount of money made by steel companies and weapons manufacturers in America.

'Does war pay?'

He singled out munitions maker du Pont, whose stock, according to the New York Times, rose 374% from 1915 to 1918 and distributed dividends worth 458% of the value of each share.

"The profits jump and leap and skyrocket, and are safely pocketed," he wrote: "Does war pay? It paid them."

Shipping companies also came in for criticism. The chancellor of the time and future Prime Minister, Andrew Bonar Law, told Parliament that from an £8,100 investment (roughly £600,000 today) in various shipping companies, he was paid dividends of 44.7% in 1915 and 47.5% in 1916, to the shock of his parliamentary colleagues. That was after tax, he told them.

Image copyright Hulton archive/getty
Image caption Shipping firms could demand higher prices because of the increased risk of ships being attacked

As unimpressed as Smedley Butler was anti-conscription pamphleteer JW Kneeshaw, who complained in a 1918 booklet about ship owners' profits.

For example, the Manchester Guardian in May 1917 reported that the shipping firm Frederick Leyland & Co paid dividends at a rate of 24.5% for 1915 and 88% for 1916.

Mr Kneeshaw quoted a Labour MP, William Crawford Anderson, in referring to the famous recruiting poster of the daughter asking her father: "Daddy, what did you do in the Great War?"

"When the ship owner's child asks him that question his answer will be simple and comprehensive," said Mr Anderson: "He will reply, 'I did everybody.'"

Wage gap squeezed

Profit during the war was a concern of politicians and various taxes were levied, including an excess profits duty.

And yet, taken as a whole, it was workers who did better than investors, says Mark Harrison. "There was full employment and the high demand for labour ensured not only that workers' gains were more than comparable but that wage inequality was also squeezed." Wartime also saw rampant inflation, he says.

Image copyright Hulton archive/getty
Image caption Not everyone was comfortable with money being made amid the loss of life

Most commercial interests were against the war, though, he argues.

"In the 1920s there developed this widespread myth - everywhere, but especially in Germany and the United States - that the war was caused by plutocrats who just wanted to make money out of selling weapons to all-comers.

"And yet as soon as the war ended, they were so weak that they could not stop the politicians just about everywhere from slashing away at military spending and cutting right back down, close to where the world had been before the war."

Profiteers fined

Outright profiteering that was perceived to hurt people was punished heavily.

The Western Daily Press reported in November 1917 that Henry Thompson, a Lincolnshire farmer, was fined £1,800 (about £90,000 today) for selling potatoes above the maximum allowed price.

Image copyright Hulton archive/getty
Image caption For future Prime Minster Andrew Bonar Law, shipping proved a profitable investment

This threat was capitalised upon by co-operatives of the time. One advertised in the Edinburgh Evening News in January 1918 that "the co-operative movement is the sworn enemy of profiteering."

Other changes in British commercial life were more nationalistic or odd, says Terry Charman.

Fired staff

"Having a German-sounding name like Schweppes was bad for business and lots of firms made a declaration that they were British through and through.

"Lyons Tea sued Liptons for suggesting its board were German. Bovril had it in its adverts that it was all-British and always-British," he says, while hotels and restaurants stated that they had fired their German and Austrian waiters.

Name changes

  • The Coburg Hotel, earlier called The Prince of Saxe-Coburg, became The Connaught
  • The Blucher pub in Effingham, Surrey, named after the Prussian military leader, was renamed The Sir Douglas Haig after the British army's commander
  • Most famously, in 1917 the Royal Family changed its name to Windsor from Saxe-Coburg-Gotha

Discover more about the World War One Centenary

For workers in the US, the war helped some toward more favourable treatment by the authorities, says Hugh Rockoff, economics professor at Rutgers University.

"Many African-Americans were able to move to the north and Midwest to work in industrial jobs, a great boon for them, although they faced great antagonism that sometimes ended in race riots.

"Organised labour was brought on board in the formation of wage policy, and the prestige of organised labour rose."

And so to Wall Street

As more money was thrown into the war by Britain, Bank of England governor Walter Cunliffe's initial fears for the City of London played out. Days prior to the UK entering the conflict, he told Chancellor Lloyd George that the financial district was "totally opposed" to war.

And so across the Atlantic the industry to profit the most was finance, and the US's dominance continued even after the Wall Street Crash in 1929.

"Before the war, the United States was a debtor nation, and the world's financial centre was London," says Hugh Rockoff.

"After the war, the United States was a creditor, and the world's financial centre was Wall Street."

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