Nor were war matériel and other goods America’s most crucial contribution to the effort against Germany. A steady flow of loans from the leading banks on Wall Street, led by J.P. Morgan, had enabled the British, French, and Russians to purchase what they needed to sustain the war effort as their gold reserves dwindled from larger and larger war purchases. By the end of 1916, American investors had bet some two billion dollars on an Allied victory. During the Somme offensive, for example, the House of Morgan alone discharged more than one billion dollars in America for the British government, totaling some 45 percent of Britain’s entire wartime spending. “The most powerful states of Europe,” writes economic historian Adam Tooze, “were now borrowing from private citizens in the United States”—citizens who, when those notes came due, would be able to demand a financial reckoning neither Britain nor France dared contemplate. Indeed, with the fate of the war hovering in the balance, it was a reckoning they had no time or energy to contemplate.6
That, however, was not Germany’s problem—or so it seemed at the end of 1916. (As we’ll see, within three years, it would be, with a vengeance.) Instead, what Bethmann-Hollweg faced was a situation that was increasingly unsustainable for his country, unless something broke the war’s impasse. That something, he now hoped, would be peace—if not with all three Entente countries, then at least with one. He hoped others in the German government could see the same reality, especially those in the German High Command. In fact, one reason he had supported removing Erich von Falkenhayn, the man behind the failed Verdun offensive in the west, and replacing him with Paul von Hindenburg and Ludendorff, the two titans who had overthrown Russian power in the east in 1914, was that he was sure they would immediately see the insuperable obstacles Germany faced and would build a consensus within the army that winning the war was impossible and that a compromise peace was the one remaining option.
Ludendorff, however, had other ideas. Bull-necked, supremely self-assured, with a cold, arrogant stare from behind an ever-present monocle, he was the very picture of the brutal aristocratic Prussian officer in the Allies’ cartoons. In fact, he came from humble origins; he had negotiated his way through the exclusive military Junker class by a combination of brains, energy, and boundless self-confidence. Ludendorff’s confidence in his ability to win the war for Germany was surpassed only by his contempt for Bethmann-Hollweg or any other civilian who dared to try to tell him his job. Ludendorff’s formula for ultimate victory was simple and came in two stages. First, pull all Germany’s forces on the Western Front back behind the Hindenburg Line, the long line of trenches and fortifications on French soil stretching from Arras, in the north, southward to Laffaux, near Soissons, on the Aisne River. Then Ludendorff would turn loose Germany’s ultimate weapon, the one he and the other generals were firmly convinced was the remaining key to victory: its formidable submarine fleet.
The submarine—Unterseeboot, or “U-boat,” in German—was one of this war’s newest technologies and, as it happened, potentially the most decisive. In German hands, it had evolved from a minor naval weapon for protecting home ports or breaking a harbor blockade into one that could bring the Allied war effort to a halt. The fleet had grown from just 20 U-boats in the High Seas Fleet at the start of the war to more than 146 on patrol at any given time two years later. By systematically hunting down and sinking the merchant ships supplying France and Britain with the food and matériel they needed to keep fighting, German U-boats were poised to impose a blockade of the British Isles that threatened that island nation with starvation as well as defeat.
In early 1915, Germany had unleashed its submarines to sink enemy shipping without warning, but that plan had backfired with the sinking of the Lusitania. President Wilson’s carefully worded but clearly hostile note to the German ambassador had confronted Germany with the possibility that it might be at war with the most powerful economy in the world, the United States, and the world’s third-largest naval fleet, the U.S. Navy, at the same time that it was fighting France, Britain, and Russia.
Sobered by Wilson’s note, Bethmann-Hollweg had forced the German navy to reimpose restrictions on its use of the U-boat. Those restrictions limited the kind of ships the navy could sink (no neutral vessels) and where it could sink them (attacks were limited to the waters around the English Channel). Germany even offered to halt its U-boat campaign if Britain stopped its naval blockade, but Britain refused. Nonetheless, the shipping slaughter was still impressive, rising to 400,000 tons a month by the end of 1916. The damage to the British and, by extension, the French and Russian war effort was still palpable if not overwhelming.
It was devastating force that Ludendorff now wanted. “Necessity knows no law.” Those had been Bethmann-Hollweg’s own words when Germany invaded Belgium in August 1914. They were Ludendorff’s now in the waning days of 1916. As the number of U-boats swelled, and their captains became more adept at finding and sinking their targets, the chief of the German General Staff was convinced Germany could turn the war around if the restrictions imposed after the Lusitania incident were finally irrevocably lifted. If the German submarine fleet was unleashed, the transatlantic lifeline that kept Britain and France in the war would be cut for good. The two powers would have to sue for peace, or starve—because, as Ludendorff knew, the cargo that would be sunk included not just ammunition and spare parts for weapons but also millions of tons of foodstuffs for hungry populations.
Besides, as 1917 neared, the options became bleak. Ludendorff was convinced that Germany no longer had the strength to win the war in the west on the battlefield; the cost in matériel as well as human lives would be too much. As the outgoing general Falkenhayn had told the Kaiser, “You now face the alternative—either Verdun or submarine warfare.” The war had come down to a race, to who would be starved out first, the Germans or the Allies.7
Bethmann-Hollweg, however, sensed that unrestricted U-boat warfare would spell doom for Germany. It would not only trigger a revulsion at German barbarism that would sustain the Allies’ morale, but also almost certainly bring the United States into the war.
However, as Ludendorff and his chief, Paul von Hindenburg, assumed the reins over the army, they presented the Kaiser, and the German people, with a stark choice. If Germany didn’t shut off the flow of shipping in the Atlantic, they said, the war would be lost. The risk was that America would enter the war, but this was a risk worth running now that Germany’s back was to the wall.
Still, the sudden victories in the east that autumn had given Germany some breathing space in the west—not the first time that events in one theater changed the momentum of war in another. So, Bethmann-Hollweg bought himself time for his peace offensive, a last stab at finding a negotiated settlement before the submarines moved in for the kill, and a last stab at somehow convincing Wilson to rouse himself and intervene—not for war in this case, but for peace.
Either way, for the first time in more than a year, it seemed that Germany not only could survive this war but could even emerge on top—that is, if one or another of its opponents could be convinced to go to the peace table.
So, all in all, it was a cool and confident Bethmann-Hollweg who spoke to the assembled deputies in the Reichstag on December 12, 1916. After summarizing recent events, including the victory over Romania, he proclaimed, “With God’s help our troops shaped conditions so as to give us security which not only is complete but still more so than ever before.” Germany was standing firm in the west, with more troops and matériel than ever; “great stocks of grain, victuals, oil, and other goods fell into our hands in Rumania,” including the rich Romanian oil fields around Ploesti.
The chancellor did not forget about the German submarine fleet, as “the spectre of famine, which our enemies intended to appear before us, now pursues them without mercy.” Nonetheless, despite Germany’s recent successes, “[d]uring these long and earnest years of the war the Emperor has been moved by a single thought: how peace could be restored to safeguard Germany aft
er the struggle in which she has fought victoriously.”
The Kaiser, therefore, “in complete harmony and in common with our allies” Austria-Hungary, Turkey, and Bulgaria, “decided to propose to the hostile powers to enter peace negotiations.” The chancellor told the Reichstag that “this morning I transmitted a note to this effect to all the hostile powers,” meaning Great Britain, France, and Russia. Bethmann-Hollweg then concluded: “Gentlemen, in August 1914 our enemies challenged the superiority of power in the world war. Today we raise the question of peace, which is a question of humanity . . . God will be the judge. We can proceed upon our way.”8
Bethmann-Hollweg’s note went out that same morning—but not to the British, French, or Russian governments; all diplomatic relations with them had been severed at the start of the war. Instead, it went to German diplomats in neutral Switzerland, Spain, and the United States, to be delivered to the Allied countries on Germany’s behalf.
The note was barely six paragraphs long. It read, in part, “The most terrific war experienced in history has been raging for the last two years over a large part of the world—a catastrophe which thousands of years of common civilization was unable to prevent and which injures the most precious achievements of humanity.” Germany’s aim was never “to shatter or annihilate our adversaries.” Therefore, to “make an end to the atrocities of war, the four allied powers [meaning Germany and its allies] propose to enter forthwith into peace negotiations.” The note pointed out that “the most recent events” had demonstrated that Germany’s will and ability to fight on could not be broken, “and the whole situation with regard to our troops justifies our expectation of further successes.”
Nonetheless, “if in spite of this offer of peace and reconciliation, the struggle should go on,” Germany and its allies were determined to push on to victory, “but they solemnly disclaim responsibility for this before humanity and history.”9
This was Bethmann-Hollweg’s final roll of the diplomatic dice, for peace this time instead of war. Yet, even as the note fanned out along the diplomatic route to a dozen foreign capitals, including the Vatican, he could not guess that he had just signed his political death warrant.
THE NOTE ARRIVED in a cold, wet, overcast London, where dark clouds had been bringing rain and even snow all that week. It was a city made even colder and grimmer by the situation at the front, where just weeks before, Britain’s massive offensive along the Somme River had finally petered out after five months of futile effort—but not before some 420,000 Britons were either dead or wounded. If Germany’s chances of winning this war on the ground looked slim to nonexistent, they didn’t look much better from the perspective of Britain’s new prime minister, David Lloyd George.
Short in stature, with a florid face, a shock of thick white hair, and a white mustache, Lloyd George had been minister of munitions before taking over as prime minister on December 5, 1916. No one knew better Britain’s fitness to carry on a war that had already consumed money, lives, and munitions on an unprecedented scale, a war that, without American loans, would have pushed the world’s greatest empire—one out of every four persons on the planet in 1914 was a British subject—into bankruptcy. Nor did he have any illusions that the conflict was anywhere close to ending in Britain’s favor. He had told his military adviser Sir Maurice Hankey in November, “We’re going to lose this war.” Now, as prime minister, he saw his top priority as preventing that from occurring.10
As it happened, Lloyd George was as dissatisfied with his nation’s generals as Bethmann-Hollweg was with his, and for most of the same reasons. All promised that one last big offensive that would finally break the deadlock and bring victory, and none had succeeded. The only one who had had an inkling of what was going to happen was Field Marshal Horatio Herbert Kitchener, or Earl Kitchener, Britain’s greatest living war hero and the conflict’s first secretary of state for war. Following the bloody battles of the Marne and First Ypres, as the system of trenches along the Western Front was getting established, Kitchener had left a strange and prophetic note for the commander of the British Expeditionary Force in France, Sir John French: “I suppose we must now recognize that the French army cannot make a sufficient break through the German lines of defense to bring about the retreat of the German forces from northern France,” he wrote. “If that is so, then the German lines in France may be looked upon as a fortress that cannot be carried by assault, and also cannot be completely invested.”11 It was a prediction of stalemate long before that idea had crossed anyone else’s mind on either side. Almost two years later, after two and a half million casualties—one of them Kitchener himself, who drowned when the transport ship he was on was torpedoed and sunk by a German U-boat on June 5, 1916—it was still true.
The Somme was just the latest, and biggest, of the British offensives that had failed to break the deadlock. There had been Loos in 1915, which ended with 50,000 British casualties as opposed to 20,000 Germans. The French had lost even more with their offensive along the Champagne front, 190,000 versus 120,000 Germans. There had been the landings at the Gallipoli peninsula in the Dardanelles that same year, an attempt to drive Turkey out of the war and open a southern flank into Central Europe. That, too, had ended in stalemate and cost more than a quarter of a million casualties. It also ended the political career of the man who had dreamed up the operation, Lloyd George’s friend Winston Churchill.
All that sacrifice, yet no resolution. What the combatants were only beginning to understand was that while their generals’ strategies committed them to taking the offensive, the new tools of modern warfare gave the overwhelming advantage to the defender. The machine gun; bigger and bigger artillery firing high-explosive shells; the development of more and more elaborate trench networks, with ever-deeper dugouts and bomb shelters; the use of airplanes to monitor an enemy’s forces as it organized for the next big push—all these gave defenders a commanding edge over soldiers who, no matter how powerful the advance barrage or how big the clouds of poison gas aimed at disrupting or immobilizing the enemy, still had to attack across open ground in the same way armies had done from the Greeks and Romans to Napoleon. And on those very rare occasions when a breakthrough of a few miles was achieved, another tool of modern warfare, the railway train, would ensure that the defender could move his forces to plug the gap faster than the attacker could move his forces to exploit it.
This was especially true on the Western Front. On the Eastern Front, different rules applied. The systems of railways and modern communications hadn’t caught up with the vast distances involved—this was one reason the war in the east had been a seesaw affair from its first months, with first the Russians advancing and the Germans and Austrians retreating, and then the Russians retreating and the Central powers advancing—until now, at the end of December, as the Germans rolled back the Russians once again and pressed on into eastern Poland.
Yet it was on the Western Front that the big decisive victory over Germany would have to be achieved—or so all the French and British generals and politicians except David Lloyd George assumed. Besides, Lloyd George knew there were other problems with Allied strategy in the west. There had been no coordination of men and resources among the Allies; generals such as Douglas Haig and his French counterpart, Joseph Joffre, tended to make their plans almost as if the other ally didn’t exist. There had never been any plans for a general offensive; no one had thought, for example, of combining a Franco-British push in the west with a similar Russian one in the east, so that Germany would come under pressure from both sides at once.
Above all, so far, there had been no full mobilization of all Britain’s might, including its economic might. Munitions factories had continued to work regular business hours; other factories continued to make civilian goods; hundreds of thousands of draft-age males—conscription had been introduced in January 1916—still held their peacetime jobs. A huge untapped labor reserve, women, remained at home tending to domestic duties. In addition, a whole other r
esource, Britain’s vast empire, had only barely begun to be tapped.
Lloyd George was determined to change all this. His plan was one he shared with his Conservative counterpart, Andrew Bonar Law, and many other members of Parliament: “a more energetic conduct of the war,” meaning a national commitment of people and resources to deliver “a knock-out blow” that would defeat Germany and end the bloodiest war in history.
Therefore, Bethmann-Hollweg’s note came at the perfect moment for Lloyd George’s purposes. By denouncing it, he could make it clear that he and Britain were “all in.” In fact, his first speech in the House of Commons that week was a steadfast attack on the note. In it, he promoted the idea that a negotiated peace was tantamount to surrender—and others couldn’t criticize him without seeming to endorse Bethmann-Hollweg. Britain had only one goal: victory. “We accepted this for an object, and a worthy object,” he told Parliament, quoting Abraham Lincoln during the American Civil War, “and the war will end when that object is attained. Under God, I hope it will never end until that time.”12
To no one’s surprise (not even the German chancellor’s), then, the December 12 note fell on fallow ground at Number 10. Over the next several days and weeks, Lloyd George would start to assemble his war coalition. He set up a slimmed-down War Cabinet of only five men: himself, Bonar Law, former viceroy of India George Curzon (Lord Curzon), Alfred Milner (Lord Milner) of South Africa and Boer War fame, and Arthur Henderson of the Labour Party. This was Labour’s first appearance in the corridors of power in Whitehall, and highly significant. Lloyd George intended to get the unions and British industry working full tilt to mobilize the nation for war. By doing so, he would change both the political landscape and Britain itself.
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