New Year in a World at War

The First World War was an unprecedented catastrophe that shaped our modern world. Erik Sass is covering the events of the war exactly 100 years after they happened. This is the 161st installment in the series.

December 31, 1914-January 1, 1915: New Year in a World at War

“What does this New Year which rises before us, veiled like Isis and as enigmatic as the Sphinx, hold concealed in its cloak? Of what are our great military chiefs and politicians thinking? What decisions will they come to about us?” This entry from a Frenchwoman’s diary captured the sense of anxiety and helplessness felt by ordinary Europeans as the year 1914 drew to a close, bringing down the curtain on a world in upheaval. Elsewhere the young British poet Roland Leighton described the scene in London’s Piccadilly Circus in a letter to his girlfriend Vera Brittain:

"There was very little demonstration; two Frenchmen standing up in a cab singing the ‘Marseillaise’; a few women and some soldiers behind me holding hands and softly humming ‘Auld Lang Syne.’ When twelve o’clock struck there was only a little shudder among the crowd and a distant muffled cheer and then everyone seemed to melt away again, leaving me standing there with tears in my eyes and feeling absolutely wretched."

Indeed, as 1914 drew to a close there was nothing to celebrate. In just five months the worst manmade catastrophe ever to befall Europe had undone centuries of progress, stripping away illusory notions of reason, honor, and glory as it tore up treaties, targeted civilians, desecrated cultural heritage, and tested new methods of anonymous mass destruction. When the war began many believed it would be over by Christmas, but now that seemed like a bad joke. A German soldier, Herbert Sulzbach, wrote in his diary: “This terrible war goes on and on, and whereas you thought at the start that it would be over in a few weeks, there is now no end in sight. Your feelings harden, you become increasingly indifferent, you don’t think about the next day any more…”

Sulzbach and Leighton were just two among millions of young men wrenched from their ordinary day-to-day lives and plunged into the cauldron of war. On the Allied side, by December 1914 France had mobilized 4.8 million men, Russia 6.6 million men, and Britain 1.4 million men, for a total of around 13.8 million troops under arms (when Serbian, Belgian, and Montenegrin forces are included). Opposing them in the Central Powers, Germany had mobilized 4.4 million men, Austria-Hungary 3.4 million men, and the Ottoman Empire 500,000 men, for a total of around 8.3 million troops under arms.

The casualties inflicted in the opening war of maneuver and the first months of trench warfare, culminating on the Western Front in the inferno of Ypres, were nothing short of mindboggling. On the Allied side, Britain’s total losses of around 100,000 men, including 16,374 dead, were only the tip of the iceberg. While estimates vary, by the end of December 1914 France may have suffered almost a million casualties, including 306,000 killed, 220,000 taken prisoner, and 490,000 wounded, and Russian losses were even worse. At Tannenberg alone the Russians lost 30,000 killed and missing, 50,000 wounded, and 90,000 taken prisoner; by the end of December 1914 total Russian casualties came to around 1.8 million – half its prewar strength – including 396,000 dead, 485,000 taken prisoner, and countless wounded.

The Central Powers suffered comparable losses. German casualties also came to about a million, including 241,000 dead, 155,000 taken prisoner, and 540,000 wounded, while Austria-Hungary – its pre-war army all but destroyed by multiple debacles on the Eastern Front and in the Balkans – suffered over 1.3 million casualties, including around 145,000 killed, 485,000 wounded, 412,000 missing or taken prisoner, and 283,000 sick or injured (the last figure reflecting the looming menace of typhus, one of the war’s worst nonhuman killers).

Tallying these figures, across Europe over 1.1 million young men had already died by the end of December 1914, roughly twice the number killed on both sides in the four years of the American Civil War. Shocked by the magnitude of losses produced by modern warfare, all the belligerent governments were frantically recruiting or drafting more young men to fill the gaps.

Financing the Fighting

While leftwing conspiracy theorists accused Europe’s financial and industrial elites of somehow engineering the war for private gain, in fact it was generally a disaster for business interests (on top of its obvious human costs). On that note the Welsh Liberal politician David Lloyd George, hardly a conservative plutocrat, later dismissed the idea that bankers and businessmen wanted war, recalling:

"I was Chancellor of the Exchequer and, as such, I saw Money before the war; I saw it immediately after the outbreak of war; I lived with it for days, and did my best to steady its nerve, for I knew how much depended on restoring its confidence; and I say that Money was a frightened and trembling thing: Money shivered at the prospect. It is a foolish and ignorant libel to call this a financiers’ war."

For governments accustomed to (mostly) sound fiscal management, the massive expense meant a sudden free fall into staggering debt. By early October the French Finance Ministry announced it had already advanced over two billion francs, or around $420 million in contemporary U.S. dollars, for the war effort, which it estimated was costing $7 million per day. A little over a month later, in mid-November, British Prime Minister Herbert Asquith told Parliament the war was costing Britain around £1 million or $5 million per day, and Lloyd George, asking Parliament to approve a budget with an initial loan of $1.75 billion, estimated the first year of war would cost $2.25 billion. By the end of the year the first British war loan, financed by selling bonds to ordinary Britons, was “oversubscribed” to the tune of $3 billion, reflecting the country’s patriotic fervor.

Meanwhile by mid-November the Russian Finance Ministry estimated that the war had cost Russia around 43 billion rubles, or nearly $900 million, and a first loan for $250 million was floated on November 1; the ministry also proposed a new income tax to offset borrowing. In Germany, on October 22 the regional parliament of Prussia, the largest German state, voted an initial war credit of around $375 million, and on December 1 the German Reichstag voted an additional war credit of $100 million – notably with the support of most of the leftwing Social Democrats, abandoning their traditional pacifism.

Bank of America

This was only the beginning: as the war went on, all the belligerent nations would accumulate mountains of debt by borrowing from their own people as well as foreign banks and governments. Predictably Paris and St. Petersburg immediately tapped London, the world financial capital, for loans, but it wasn’t long before all three Allies were turning to the world’s new economic powerhouse, the United States, for financing. (Germany and Austria-Hungary were effectively cut off from American trade and finance by the Allied blockade.)

As early as August, France was approaching American bankers in New York for loans, although the pacifist Secretary of State William Jennings Bryan, concerned to preserve U.S. neutrality, voiced his disapproval when J.P. Morgan asked him Washington’s position on lending to belligerents. On October 18 Russian finance minister Sergei Witte officially notified U.S. ambassador Charles Wilson that he would be traveling to the U.S. to arrange loans; London banks, backed by the British government, also helped secure loans from New York on behalf of the Allies.

At the same time, British and French governments were forced to sell overseas assets (and compelled their own banks and businesses to do the same) to secure currency, especially U.S. dollars, for purchases of foreign goods. Thus Britain’s total stock of foreign direct investment around the world fell from around £4.3 billion in 1914 to £3.1 billion by 1919, and British interests liquidated about $2 billion of American securities to buy U.S. products (mostly weapons). Over the same period the total stock of French FDI around the world fell by a third, from around 45 billion francs in 1914 to 30 billion francs in 1918.

These retreats translated into less leverage for Britain and France financial interests and more leverage for their American counterparts, which in many cases benefited by picking up British and French assets on advantageous terms. As total foreign-controlled FDI in the U.S. fell from around $7.2 billion in 1914 to $4 billion in 1919, American private FDI abroad almost doubled from $3.5 billion to $6.1 billion. In other words, the First World War converted the United States from a net recipient of investment to a net investor in other countries – foreshadowing its role as a leader in globalization.

Meanwhile the New York Stock Exchange, closed in the early days of the war, reopened for limited trading on December 12, 1914, with no evidence of panic selling (European counterparts were also opening their doors again, led by the Paris Bourse on December 7 and the London Stock Exchange on January 4). Although foreign trade was disrupted in the short term, far-sighted American investors were already anticipating huge gains as the Allies turned to America for food, fuel, and armaments – paid for, as often as not, with American loans.

Already in September 1914 the French government had placed a huge contract with Chicago-based meatpackers Armour & Co., calling for the delivery of one million pounds of meat per day for a year, and in October the French Army ordered 600 trucks from a Cleveland firm. That same month the British government ordered two million army blankets from a company in West Virginia, followed by another four million in November. In early December the Allies placed additional food contracts worth $32.5 million in Chicago, and towards the end of the month France and Russia placed orders for 65,000 tons of steel with American manufacturers.

U.S., Britain Clash over Blockade

Even as American firms benefited from Allied contracts, diplomatic tensions were rising between Washington and London over the de facto British blockade of the Central Powers, which saw the Royal Navy stopping and searching American ships and occasionally seizing cargoes deemed contraband. As early as August 6, 1914, the U.S. demanded that both sides abide by the 1909 Declaration of London concerning the Laws of Naval War, which defined contraband and protected neutral shipping – but the treaty had never been ratified by any of its signatories, so the British brushed off the suggestion.

Conflict arose almost immediately when the British diverted a cargo of grain in August 1914, prompting American exporters to stop all wheat shipments and complain to the U.S. government. On September 26, 1914 (the same day Congress established the Federal Trade Commission) the U.S. lodged a formal complaint with the British about their refusal to abide by the Declaration of London and their open-ended policy on contraband; four days later the U.S. Senate demanded to know why British ships were intercepting shipments of American copper destined for the Netherlands.

Leery of offending the world’s most powerful neutral state, in early October the British responded with vague offers of compromise – but they remained determined to interdict anything which could aid the German war effort, and the situation was bound to get worse as the war dragged on.

On October 21 the U.S. protested Britain’s seizure of three oil tankers, again demanding the Allies respect the rights of neutral countries; instead, on October 29 the British declared copper, oil, and rubber contraband and on November 2 announced the doctrine of “continuous voyage,” giving themselves the right to seize neutral ships headed for neutral ports if their cargo was ultimately intended for one of the Central Powers (a doctrine which had helped stoke tensions leading up to the War of 1812, although the Union was later happy to employ it during the Civil War).

Adding insult to injury, on November 7 the French revoked their earlier acceptance of the Declaration of London, and on November 23 the State Department sternly warned all sides (but especially the Allies) that it would protect its rights under international maritime law, hinting at the use of force. Then at the end of December 1914 Washington delivered its strongest protest yet condemning Allied interference with American shipping, forcing the British cabinet to hold an emergency meeting on December 30 to discuss their strained relations.

As the New Year began there was scarcely any prospect of this conflict being resolved, but the British were about to get some help from an unexpected quarter: in February 1915 the Germans decided to retaliate for the British blockade with their own “counter-blockade” using a shocking new method of warfare – U-boat attacks against unarmed merchant shipping. Although tension persisted between Britain and the U.S., unrestricted submarine warfare was even more outrageous to American public opinion, making British actions look relatively inoffensive by comparison.

Shortages and Economic Control

It’s worth noting that Americans weren’t just pursuing profit. When Germany proved unable to feed the Belgian civilian population in the fall of 1914, American philanthropic impulses won the world’s admiration with the establishment of the Committee for Relief in Belgium, led by chairman Herbert Hoover, an American engineer with boundless energy and a genius for organization. Altogether the CRB delivered 5.7 million tons of food during the course of the war, feeding 9.5 million Belgian civilians.

Although Belgium was suffering the worst shortages during this period, in fact all the belligerent nations were struggling to provide for their civilian populations while sustaining colossal military efforts. As the war settled into deadlock on the Western Front, governments on both sides began taking control of key industries and regulating the production and distribution of necessities like food, clothing, and fuel, eventually instituting rationing and price controls. Not coincidentally, some of these measures also gave them more control over the civilian workforce.

In Britain, on September 17 Parliament gave the Board of Trade the right to seize any item deemed necessary for the war effort if it was being withheld from the market, and on November 27 it passed the Defence of the Realm Consolidation Act, giving the military the right to take over factories producing a range of war-related products; these moves foreshadowed even greater government involvement in industry following the “Shell Crisis” in the spring of 1915, when newspapers accused the government and industry of massive inefficiency resulting in needless loss of British lives.

Meanwhile on September 8 the French government created a new Civil Food Supply Service, a precursor to rationing, followed in October by a new Office of Chemical and Pharmaceutical Products to oversee production of key chemicals, including explosives. In Russia, during October the Tsar’s Council of Ministers passed industrial regulations enabling police and factory owners to suppress labor unrest – although this didn’t stop workers from carrying out a brief stoppage on January 22, 1915 to commemorate the tenth anniversary of “Bloody Sunday” in the Revolution of 1905.

The Central Powers employed similar measures. On September 26 Germany’s new Office of Industrial Mobilization began regulating chemical manufacturing, which would soon include fixing atmospheric nitrogen on an industrial scale using the Haber-Bosch Process. In October the German government introduced “Kriegsbrot,” bread made with artificial ingredients that was soon widely loathed by the German public, and in November formed the War Wheat Corporation to regulate the grain trade, while fixing the prices of staples like potatoes and flour. For its part on October 29 the Austrian Parliament passed the War Precautions Act, empowering the government to direct commercial activity whenever necessary during wartime.

Loss of the Formidable

In 1914 the Germans had already been employing U-boats to devastating effect against British warships, and the New Year brought yet another submarine triumph with the sinking of HMS Formidable by U-24 in the English Channel in the early morning of January 1, 1915. Another humiliating loss for the Royal Navy, the Formidable took 547 officers and men to a watery grave, out of a full complement of 780 crewmembers.

The tragedy is associated with an unusual piece of trivia: the fictional canine hero “Lassie” was supposedly inspired by a dog of the same name who helped save a British sailor, John Cowman, pulled out of the ocean after the sinking of the Formidable. The human rescuers believed Cowman to be dead, but Lassie, the denizen of a local pub in Lyme Regis, licked his face and lay down next to him, apparently helping revive him with her body heat.

Germans Shift Focus to Eastern Front

On January 1, 1915, the German high command made a momentous decision: with the war on the Western Front deadlocked following the failure of the Schlieffen Plan, they would shift their focus to the Eastern Front in an attempt to defeat Russia and end the war.

This decision was a victory for Paul von Hindenburg and Erich Ludendorff, the heroes of Tannenberg, who led the “Eastern” faction in the German Army, so-called because its adherents believed that the war in the east should take priority. They were supported by Austrian chief of staff Conrad von Hötzendorf, who was understandably alarmed by Russian gains in the northeastern Austrian province of Galicia.  It also represented a defeat for the “Western” faction, which wanted to continue the effort in the Western Front, and which included Kaiser Wilhelm II and chief of staff Erich von Falkenhayn.

The Easterners argued that the disorganized Russian armies were ripe for destruction, and that the Russians could be forced to abandon the Western Allies and make a separate peace, or risk internal revolution. After much wrangling, Ludendorff and Conrad forced Falkenhayn to agree to the formation of a new hybrid army composed of German and Austrian troops, the Südarmee or “South Army,” under General Alexander von Linsingen, to spearhead the new campaign in the south (see map above). They also created a new Tenth Army to drive the Russian Tenth Army out of East Prussia, where it was holding on to a substantial slice of German territory. Meanwhile the Russians were also forming a new force, the Twelfth Army, to renew their own attack on East Prussia.

Misery in the Trenches

Of course for ordinary soldiers all these grand strategic matters had little apparent relevance to their day-to-day lives in the trenches, which remained unspeakably miserable as the winter of 1915 unfolded. Inclement weather, frostbite, hunger and body lice were constant companions for troops on both sides – and now, after several months of fighting, death was ubiquitous and routine. On the Western Front a German soldier from Alsace, Dominik Richert, encountered a terrible sight after his unit occupied former British trenches:

"The bottoms of these trenches were full of dead Englishmen. We had to bury the dead who were lying in the positions. We removed some earth at the rear wall of the trench, laid down the dead, and covered them with earth. As there was no other place to sit in the trench, these little hills were used as seats. It started to rain again. The trenches soon filled up with water and mud, and soon we were so filthy that you could see nothing of us but the whites of our eyes, there was so much dirt. Then I was sent to collect ammunition; everywhere I saw the toes of boots, clutching hands, and hair stuck together by mud sticking out of the earth. It was a gruesome sight, which nearly made me despair. It put me off so much that I did not want anything more from life."

See the previous installment or all entries.