In 1918, the British won an astonishing, almost fortuitous, victory, snatching an imperial triumph from what seemed, as late as June, the jaws of continental defeat. Their greatest imperial rivals had been broken, one (Russia) by the other (Germany). In the Armageddon of empires, British credit, domestic unity and imperial cohesion had been tested to the limit, but had survived. Of the three principal victor powers, the United States, France and Britain, the British seemed best placed to turn the making of peace to their advantage. They had made the largest territorial gains, in the Middle East, Africa and the Pacific and had most to bargain with. They had incurred heavy debts to the United States, but London's influence on post-war reconstruction was bound to be large, since it was from London that the European victor states had borrowed most. With their pre-war rivals in disarray, there seemed little danger that British authority would be challenged by colonial politicians – whose leverage had been cut down by peace – or client states, no longer able to play off two sides in the great game of imperial influence. Above all, perhaps, with the gravest threat to the balance of power in Europe extinguished by the defeat of the Central Powers, the British could hope to lower their naval guard (after the strain of the Anglo-German arms race) and ease the pre-war tensions over imperial defence created by their single-minded concentration on the North Sea. European peace would leave them free to remake their partnerships with dominion, Indian and colonial politicians. Devolution – promised to the dominions and India in 1918 – would earn a dividend of loyalty. The British world-system would enter an Antonine Age of peace and prosperity.

But it did not turn out like that. Inevitably, the violent disruption of the pre-war order could not be repaired overnight. Nor was it likely that a new blueprint for world politics would command ready assent among the victorious allies, let alone in the ranks of the defeated or disenfranchised. Everywhere the prospect of a post-war settlement that might last for decades raised the stakes of political and social struggle: between states, peoples, races, religions, clans and classes. Success – whether dominance, freedom or security – was vital before the new moulds hardened, before new rulers could climb into the saddle, before cynicism or despair set in among the rank and file on whose backing leaders at all levels depended. For all these reasons, the formal diplomacy of peacemaking was sure to be staged against the disorderly backdrop of political or armed struggle wherever there was the chance of a fait accompli, or the hope of winning the national status that the peacemakers seemed so willing to dispense.

The British system was bound to be especially vulnerable to this post-war turbulence. Sprawled across the globe, it faced nation-making movements at every point: Irish, Greek, Turkish, Arab, Egyptian, Persian, Afghan, Indian, Chinese and West African. Its open societies were easily permeable by new ideologies of class, nation, race or religion. Without a draconian apparatus of control (unimaginable in most places if only for reasons of cost), its colonial and semi-colonial regions could not be closed to external influence or new ideas. Its commercial prosperity depended upon an open trading economy and multilateral flows of goods and money. The prolonged dislocation of this fine-spun web threatened to wreck the mutual self-interest underpinning the politics of empire, and drain the wealth that paid for its costly superstructure. Peacemaking in its broadest sense – settling territorial boundaries and sovereignty, reopening the channels of trade, adjusting the spheres of great power interest – would need to be early and complete. The risk otherwise was that discontent and uncertainty would subvert the collaborative base of British rule and erode the loyalty of its self-governing partners to the idea of a British system. But peacemaking was anything but swift and far from complete. It was an intricate puzzle requiring dozens of pieces to be fitted together. Cooperation in one field required agreement in another and harmony in a third. Territorial settlement, strategic security and economic reconstruction were all entangled in a maddening knot of conflicting interests. Consequently, peacemaking in Europe dragged on until the Dawes Plan (1924) and Locarno (1925) and ignored Russia's place in the post-war order. In the Middle East, a territorial settlement was delayed until the treaty of Lausanne (1923) and final agreement over the northern border of Iraq until 1926. In East Asia, the Washington treaties of 1921–2 checked great power rivalries but not the determination of Chinese nationalists to attack the foreign privileges embodied in treaty-ports and concessions.

As a result, the claims of the dominion governments, as well as Irish, Indian, Egyptian, Arab and (some) African nationalists for wider influence and greater autonomy in the British system were caught up in the larger instabilities of the post-war world. Mistrustful of London's intentions, fearful of new British claims upon them, resentful of the apparent disregard for their ethnic, religious or constitutional aspirations, they had little sympathy for the mood of chronic anxiety that hung over the cabinets of Lloyd George and his prime ministerial successors. Among British ministers and their advisers, the avalanche of international and imperial demands bred a siege mentality that verged at times on paranoia. Die-hards and visionaries pondered loudly whether the end of empire was at hand. But, by the mid-1920s, the worst seemed over. The danger that internal stresses and external pressures would together set off a general crisis of the British system receded. Its strategic security and financial solvency did not break down. The centre held. As nationalism fell back from the high tide of 1919–20, its leaders made their peace – for the moment – with the British world-system.

‘New World’ geopolitics

The first priority of British ministers in London was to secure a peace that would avert a future commitment to European security on the terrible scale of the War. The logic of Britain's global interests, as they well understood, was to protect the imperial centre but not at such cost as to imperil the defence and development of the rest of their world-system. The stringent terms imposed in the treaty of Versailles (28 June 1919) were designed to disarm the terrifying power of German ‘militarism’. Germany's navy was seized (but scuttled by its crews) and its rebuilding forbidden; her colonies were confiscated; and her army capped at 100,000 – one-third the peacetime size of the combined British and Indian armies, one-eighth the size of France's. But the larger problem remained: how to prevent the (eventual) resurgence of German power and enforce (in the meantime) the punitive terms of peace.

For an important group of British opinion, the answer lay in forging an Atlantic partnership with the United States.1 There were many attractions. An Anglo-American alliance would rule the waves and the exchanges. It would be the decisive counter-weight to any power that aspired to dominate the European continent. It appealed to the vague emotion of pan-Anglo-Saxon racial unity to which politicians of all parties were susceptible. It would avert the risk of naval and financial rivalry, whose impact on Britain was bound to be adverse. It was favoured by Canadian leaders, and by Smuts, the heir-apparent in South African politics. It was the best guarantee against the continental entanglements upon which all the dominions looked with anxiety and disfavour as a dangerous distraction from imperial purposes. It would draw Britain away from the ‘old diplomacy’ of secret commitments and (as the war had shown) unlimited liabilities towards open covenants and defined obligations: and thus stabilise her claims on dominion loyalty.2Above all, it would make bearable the otherwise open-ended burdens of the League of Nations Covenant as the instrument for post-war collective security.

But in Europe such an Anglo-American partnership proved impossible. On the British side, even those keenest on Atlantic amity would not give up the claim to naval superiority and its vital instrument, the right of blockade.3 The ‘freedom of the seas’ – on which Woodrow Wilson insisted – remained a bone of contention. For Wilson, naval parity with Britain was the only basis on which the United States could enter the new world order envisaged in the League of Nations Covenant.4 But, before the naval issue could be resolved, as it was in part at the Washington conference in 1921–2, American membership of the League of Nations was bluntly rejected by the United States Senate. This reaction against further involvement in the rancorous quarrels of the Old World had a second vital consequence. It aborted the three-way security pact through which Britain and the United States were together to guarantee France against unprovoked attack by Germany. When ratification failed in Washington, the Anglo-French pact lapsed as well.5

From July 1919, therefore, the British were thrown back on less attractive solutions to the most pressing of their strategic concerns. They could not wash their hands of Europe for fear that the dangers that had forced their intervention in 1914 would quickly recur, and because a European settlement was economically vital. They might have been tempted to hark back to ‘Edwardian’ solutions: to rebuild a European ‘balance of power’ so that no state could dominate the continent against them. But the balance of power was now discredited by its failure in 1914, and by public suspicion of the ‘old diplomacy’ of alliance treaties and secret clauses. Instead, London was pledged to collective security and the League of Nations. In principle, this shared the burden of keeping the peace and enforcing the treaty system of post-war Europe among the great continental states. In practice, the Bolshevik revolution in Russia and the fragmentation of Eastern Europe threw the task of containing Germany and policing the treaties back upon Britain and France. Worse still, the communist ‘contagion’ from Russia threatened to spread through a Europe that was economically devastated and socially disoriented. What was needed was a Concert of Liberal Europe, to preside over the new era of national self-determination, to promote material recovery and to repel the Bolshevik menace. That meant the reconciliation and cooperation of Britain, France and Germany.

This was the object, often muddled and obscure, of Lloyd George's coalition government and those of his successors after his fall in October 1922. What made it Herculean, or worse, were the interlocking differences blocking a European settlement along the lines laid down in the peace treaties of 1919. Thus the peace treaties looked forward to the creation of new nation states in Poland, Czechoslovakia, Hungary and the ‘South Slav state’ (later Yugoslavia), and the ethnic ‘rectification’ of other pre-war boundaries. Such an ambitious programme depended heavily upon the cooperation of Germany. At the same time, the treaties prescribed reparations payments through which Germany would compensate France and Belgium (mainly) for the damage of the war. But, neither reparations on the scale demanded, nor the peaceful reconstruction of Central and Eastern Europe, were possible without a wider programme of economic recovery, and the provision of new capital to help rebuild Europe's war-shattered finances. Here was a further maddening complication. New capital meant American money. Fresh American loans were unlikely without agreement on repaying the wartime advances made mainly to Britain. The British were unwilling to promise payment unless the huge loans they had made to their European allies were part of the financial settlement. (Indeed, loud voices in Britain, including Keynes and a former Chancellor of the Exchequer, urged mutual cancellation of all war debts.) But, of their wartime allies, one (Russia) was a bankrupt outlaw; and the other (France) insisted upon large German reparations as the condition of any reckoning. And so the problem came full circle.

By the end of 1922, after three years of tortured diplomacy, periodic confrontation and a full-scale war between Poland and Russia, Europe's post-war instability approached a crisis. Anglo-French relations were embittered by growing differences over their approach to Germany (whose economic recovery was more urgent in British eyes than the enforcement of reparations) and by rivalry in the Near East. German resistance to French demands and resentment against the territorial losses imposed by the treaties were fanned by internal discontent and economic hardship. In January 1923, the Conservative government led by Bonar Law, who had emerged from retirement to break up the Lloyd George coalition, watched impotently as France occupied the Ruhr to extract German reparations. It faced the demand from the United States for repayment of its war loans on terms that Bonar Law rejected as intolerable. It fretted about the military consequences as the Foreign Secretary, Lord Curzon, struggled (at the Lausanne conference) to defend the draconian terms imposed on Turkey in the treaty of Sèvres (1920) against an insurgent regime led by Kemal Ataturk, the treachery (as Curzon saw it) of the French and the hostility of the Russians, posing now as Turkey's friend against the British ogre. ‘I have realised from the first’, Bonar Law had told Curzon in December 1922, ‘the utmost importance of trying to get the Lausanne business settled before we came to grips with Poincaré over reparations.’6 But, as the Turkish conference turned sour, and the German crisis deepened, he began to press the case for withdrawal from Britain's mandate in Iraq for whose northern third (the old vilayet of Mosul) the Turks were expected to wage an armed struggle.7 The travails of the imperial centre were leaving their mark on imperial defence. The need for drastic economies at home (partly to meet the American bill), and the receding prospect of European peace and reconstruction seemed to be turning Britain's main strategic prize in the Middle East into an untenable liability.

1923 was a crisis year. But matters gradually improved. The nightmare of a Turkish, French and Russian combination against Britain in the Near and Middle East soon passed. In the treaty that was signed in July 1923, the Turks accepted the loss of their Arab provinces, and the demilitarisation of the Straits but regained full sovereignty in Anatolia and part of Thrace. Mosul was deferred for arbitration. Bonar Law's Cabinet colleagues insisted upon accepting the American terms over his bitter opposition and even his threat to resign (Bonar Law went so far as to write to The Times under the soubriquet of ‘Colonial’ to denounce his colleagues’ views).8 In doing so, they paved the way for American credits to flow to Europe as the severity of the crisis, highlighted by the Ruhr occupation, sounded the alarm across the Atlantic. With the Dawes Plan (1924), it at last seemed possible to cut the Gordian knot of debts and reparations, and begin to normalise the economic relations of the European states. In a more hopeful atmosphere, the idea of a Liberal Concert revived.

For the British, the question was how large a continental commitment they would have to make to ward off the danger of a new European conflagration. Relations with France would not improve, argued Austen Chamberlain (Foreign Secretary 1924–9), unless Britain guaranteed her safety against Germany. Nor would the Germans ‘settle down’ so long as they hoped to divide the wartime allies. Sooner or later, a ‘new catastrophe’ would occur, into which Britain would be dragged. ‘We cannot afford to see France crushed, to have Germany, or an eventual Russo-German combination, supreme on the continent, or to allow any great military power to dominate the Low Countries.’9 There were imperial arguments as well. If Britain was at loggerheads with France, said Maurice Hankey, who, as secretary to both the Cabinet and its Committee of Imperial Defence, exerted a powerful influence on ministerial thinking, ‘our imperial communications [through the Channel and the Mediterranean] would be jeopardised’ and London in ‘extreme danger’ from France's powerful fleet of bombers. It was an ‘almost essential Imperial interest’ to be on good terms with France – which meant a pact or guarantee.10 Imperial defence, noted a Foreign Office memorandum, was ‘closely related to a policy of European security’. The government should say publicly that the defence of the Empire entailed a guarantee of France and Belgium.11 But the arguments against were formidable. Opinion at home was dead against a French pact. It would be denounced by both Liberals and Labour. It would shackle Britain to the Franco-Polish alliance and to the murky state-system of Eastern Europe. It would be anathema to the dominions and disliked in India. It would mean an intolerable strain on a post-war army barely sufficient for its imperial role.12 In the event, Chamberlain achieved a triumph of limited liability. In the Locarno Pacts of October 1925, he avoided an outright guarantee of French security. Instead, France and Germany exchanged pledges to uphold their post-war borders, with Britain and Italy as joint guarantors of their mutual promises. The significance of this implausible formula was largely symbolic. It marked Germany's acceptance of the new European order (in the West), signalled by her joining the League of Nations, not a new continental commitment for Britain. By the same token, it revealed how dependent Britain's imperial position had become upon a Liberal Concert in Europe – as a substitute for military power or a continental balance. The fragility of that concert was soon to be seen.

European security was a precondition of imperial safety; but it was not the only one. In his Locarno conversations, Chamberlain bluntly told the French and German leaders that, whatever happened, Britain could never be a party to economic sanctions that brought her into conflict with the United States. ‘It is a fundamental condition of British policy’, he insisted, ‘I might almost say a condition of the continued existence of the British Empire, that we should not be involved in a quarrel with the United States.’13 It was true, of course, that America had drawn back from the role that Woodrow Wilson had imagined for her in the post-war world, a role that promised friction with Britain as well as partnership. To Isaiah Bowman, one of Wilson's closest advisers in Paris, the failure came to seem inevitable. America's multi-ethnic politics, democratic government and commercial self-sufficiency made a definite foreign policy impossible. ‘Whatever degree of participation we may finally come to have in world affairs’, he wrote, ‘it will be conditional in many respects and limited in all.’14 But this did not make the US a negligible factor, least of all for the British. They treated American oil companies and their Middle East claims with wary respect. They needed the cooperation of American bankers for the financial reconstruction of Europe. They were conscious that Wilsonian ideals held a powerful attraction for British opinion in the centre and on the left: a fact of some weight in the fluid politics of the 1920s. Above all, they were anxious not to goad American leaders into an arms race at sea.

Britain had ended the war with a colossal navy: 70 battleships and battle-cruisers, 120 cruisers, 463 destroyers and 147 submarines. Once the German fleet was confiscated or scuttled, the American navy, with some 40 battleships, 35 cruisers and 131 destroyers, was the second most powerful. But these flattering figures were not the whole story. The British fleet was far too large to be maintained in peacetime: the naval budget crashed from £334 million in 1918–19 to £54 million in 1923–4. Secondly, many of its most powerful units would soon need replacing by more modern versions. Thirdly, it faced a post-war strategic revolution as far-reaching as that of 1912. For now, its main rivals were the American and Japanese navies: two potential enemies at opposite ends of the globe. The strategy of concentration used to bottle up Germany was obsolete. Worse still, American hostility to a continental blockade – Britain's key weapon in another war – meant that British sea-power in the Atlantic could not be weakened to reinforce the East except in a great emergency. At the very least, the Royal Navy needed parity with the Americans, whose Pacific commitments would then serve to balance its own obligations in the eastern seas.

In the aftermath of the war, this looked improbable. The Wilsonians were committed to a big navy. Their programme for 1918 had added 20 ‘super-dreadnoughts’, 12 large battle-cruisers and 300 other ships.15 The naval budget rocketed upwards from $37 million in 1914 to $433 million in 1921. As these new battleships came into service, even a numerically smaller American navy would outgun its Atlantic rival. At the end of 1920, British ministers anxiously debated how to contain the American challenge. Lloyd George argued for the pre-war view that America should be discounted as a possible enemy. But other ministers insisted that naval supremacy could not be surrendered.16 It was agreed to seek negotiations, but from the Washington embassy came warnings of growing antagonism to Britain even amongst the incoming Republicans, exacerbated by friction over war debts and the war in Ireland.17 This analysis proved excessively bleak. In fact, much American opinion regarded enmity towards Britain as unthinkable: talk of British aggression, said the New York Times was ‘grotesque’.18 The reaction against Wilsonian involvement in international politics had its counterpart in the revolt against ‘navalism’. A big navy would drag America into overseas conflicts as surely as the League. Naval limitation attracted growing support. This new mood gave the British some much-needed leverage. They could hope to bargain their limited programme of March 1921 for American concessions. More to the point, by giving up their twenty-year-old alliance with Japan, whose renewal was disliked by both the Foreign Office and the Admiralty, they could neutralise the strongest card of the ‘big navy’ school in Washington: the fear that Britain would abet Japanese expansion in the Western Pacific. After a fierce debate, into which both Canada and Australia were drawn (on different sides), and amid much unease about the fate of British interests in China, the alliance was abandoned.

The balance was swung. At the Washington conference in 1921–2, the British and Americans settled their naval differences by agreeing to parity in capital ships, and a ten-year ‘holiday’ in construction. The new rapprochement had a further consequence. Hesitation over giving up the alliance derived partly from British alarm at the semi-colonial expansion of Japan into China and especially her reluctance to give up the large Shantung concession seized from Germany.19 Without the alliance, argued its champions, restraining Japan would become even harder. In fact, the show of Anglo-American unity helped to push Japanese policy towards economic rather than military expansion in China, in financial partnership with American business.20 The Japanese agreed to attend the conference which framed a post-war settlement for East Asia. They gave up Shantung and agreed to limit their battleship strength to 60 per cent of the British and American figure (the 5:5:3 ratio). They also signed the Four Power treaty alongside Britain, France and America, guaranteeing the independence and integrity of China, and the Nine Power treaty, promising no expansion of existing foreign rights and concessions in the country.

The ‘Washington system’ was a promise of stability in East Asia. But its strategic implications were only gradually clarified. To British naval planners, the Washington logic was straightforward. To conciliate Japan, the treaty had forbidden new fortifications across a vast area of the Western Pacific. Henceforth, if a British fleet were sent to East Asia, it must use Singapore as its base, not vulnerable, underfortified Hong Kong. Indeed, the need for a great new naval base at Singapore had already been agreed by British ministers in 1921. Secondly, the post-war navy should be built and trained for a war against its likeliest enemy, now Japan. Yet, as financial stringency bit deeper, governments in London scaled down or postponed the Singapore base and questioned the need for an East Asian strategy. Matters came to a head in 1925 when Winston Churchill, as Chancellor of the Exchequer, dismissed the navy's spending plans as ruinously expensive. They would infuriate taxpayers, he told Baldwin, the Conservative prime minister, and unite Liberals and Labour in a campaign for economy.21 The Japanese threat was chimerical. ‘Why’, he asked, ‘should there be a war with Japan? I do not believe there is the slightest chance of it in my lifetime.’ No Japanese government would risk a war against the united strength of the Anglo-Saxon sea-powers. The Cabinet agreed. Churchill had his way. Navy spending was cut down and the Admiralty forbidden to prepare war plans against the Japanese navy.

In the seven years that followed the end of the war, the strains and tensions of imperial politics had been magnified by persistent geopolitical uncertainty. For the British, the defeat or exhaustion of their international rivals had been the main guarantee that the simultaneous emergencies they faced in Ireland, Egypt, China, India and the Middle East would not escalate into a general crisis of their global system. By 1925, they could be more hopeful. The settlements at Locarno and Washington (as Churchill had interpreted its meaning) revealed an emerging world order whose imperial consequences seemed reassuringly benign. International tranquillity at both ends of Eurasia dispelled the nightmare of war on fronts 12,000 miles apart. With Germany tied to the Liberal Concert (underwritten financially by American capital), and Japan constrained by Anglo-American friendship, only Russia could threaten the defences of empire – though more by ideological subversion than by military challenge. The gates of the British world would be guarded by the self-interested caution of its most likely predators: an agreeably cheap solution. The revolutionary excitement of 1919 had passed. The siren call of Wilsonian self-determination had modulated into the League of Nations mandate system, under the watchful eye of the two main colonial powers.22 With little risk of external attack, the internal enemies of the British system could be dealt with in detail by an army freed from its old strategic burdens. The defence costs of empire could be axed to pay for its debts and fund social reform. As escape from the British system seemed less likely, colonial resistance would grow less fervent. The politics of empire could pass from the maelstrom of the aftermath to the calmer waters of the post-war world.

Rebuilding commercial empire

The necessary counterpart to international tranquillity was the revival of London's commercial imperium. Churchill's furious opposition to naval rearmament sprang from the fear that its costs would unhinge his financial strategy. Stringency, especially in defence, was necessary partly to pay for social spending – the price of political survival in the age of universal suffrage – but even more to fund the return to a gold-based currency. In the City, at the Bank of England and in the Treasury, it was axiomatic that London's reputation as a financial centre depended upon the restoration of the gold standard.23 ‘Gold’, said Montagu Norman, the Governor of the Bank, ‘is the guarantee of good faith.’24 But there was a catch. If sterling was once more to be based upon a fixed value in gold, bullion had to be attracted to London. It would only come if London offered the safest haven or the highest rates. On both counts it was vital to reduce government spending and borrowing (hugely inflated by the war) to the minimum. Foreign depositors would be reassured by the strict management of public finance, and the interest rate needed to attract them would fall back gradually to a level that domestic industry could afford. Britain's return to gold in October 1925 was intended to signal the end of post-war economic turbulence, and London's resumption of its pre-war status. As we shall see, however, its old commercial empire was not so easily revived.

Before 1914, London's pre-eminence had been based upon the vast scale of its commercial and financial transactions. A huge proportion of the world's international business was conducted in or through the City. The City exerted its influence on the financial and commercial practice of states inside and outside the Empire to protect or enhance Britain's overseas wealth – perhaps one-third of her total by 1914. As the centre of the world's information network (all cables led to London), it was the principal engine of Britain's ‘soft power’: transmitting news, ideas and intellectual fashion to audiences abroad. Above all, perhaps, its claims on overseas production (the real meaning of its foreign investment) and its portfolio of foreign property formed a grand ‘war-chest’ to be drawn on in times of imperial emergency.

This commercial empire had survived the war. Its prospects in peacetime were much less certain. The rupture of the pre-war commercial and financial system was prolonged by the struggle over debts and reparations, the violent fluctuations in currency values, the proliferation of new states and frontiers and the revolution in Russia. To restart the flow of trade, from which the City drew its profits, required a massive injection of loans and credits. But the City lacked the ready cash. With a large dollar debt to service, small hope of recovering its wartime advances (especially to Russia), and so much British saving tied up in government borrowing at home, capital for once was in short supply. To make matters worse, the end of the war cut off the flow of American credits just as government spending was reaching its peak. The result was a wave of inflation and an outflow of gold. The gold standard was suspended, deterring short-term lenders from depositing their funds in London and further weakening the City against its great rival, New York. Orthodox remedies merely enfeebled the patient. Interest rates were raised and expenditure slashed. As dear money at home drove up its costs and dried up demand, British industry struggled to compete in foreign markets. Its failings were reflected in the balance of payments, the value of sterling and the credit of the City. Here was a vicious circle of decline from which no escape seemed easy.

Indeed, the post-war turbulence seemed to have drastically worsened the structural problems of the British economy, some of which had been visible before the war. The heavy dependence upon exports of cotton textiles and coal became an increasing liability. Cotton exports fell back heavily from £125 million in 1913 to £85 million in 1925 and £72 million by 1929.25 Under the pressure of Japanese and local competition, the Indian market, Lancashire's great stand-by, began its inter-war collapse. Coal was damaged by cheap competition and the increasing use of oil as fuel. The index of all exports by volume declined from 173 (1913) to 119 (1922) and recovered only to 134 (1927).26 But imports rose from 81 (1913) to 86 (1924) to 96 (1927) (1939 = 100). The result was ever-growing pressure on the balance of payments. As imports surged and exports faltered, the strain was taken up (as it had been before the war) by the income from invisibles. Before the war, however, the merchandise gap was narrower and invisible income far more buoyant. In the five years from 1922 to 1926, the income from both overseas investments and other invisibles fell well below their equivalent pre-war values.27 Shipping, a huge source of pre-war earnings, was particularly hard-hit. One-fifth of the British merchant fleet was laid up in the 1920s.28 Competition from the United States, Japan and the Scandinavian countries drove down the British share of world trade carried from 52% in 1913 to 40% in 1936,29 and Britain's share of world tonnage began its long descent from 40% (in 1913) to 30% (in 1930), to 26% (1939).30 The shipping giants of the pre-war years fell on hard times.31 British shipping was slow to modernise by adopting oil instead of coal, and its share of the booming trade in oil transport was soon only half its pre-war level.

The full significance of these economic difficulties emerged only gradually after 1918. For seven years after the armistice, the British economy seemed on a roller-coaster: boom, followed by slump, followed by signs of recovery, a further setback and then cautious optimism as the Dawes Plan in 1924 promised to settle the problem of reparations and stabilise the European economy, to which one-third of British exports were normally sent. To the City, it was vital to rebuild the pre-war world, if need be by an active financial diplomacy. This was the role assumed by Montagu Norman, the Governor of the Bank of England, an idiosyncratic, highly strung and emotional figure of remarkable tenacity. Norman's recipe was the close cooperation of the main central banks, with London as the intermediary between New York and Europe. The severity of the depression after 1920 encouraged others to propose more radical solutions. The grudging nod by the wartime British government towards imperial preference, ‘imperial development’ and subsidised empire settlement was converted by post-war tariff reformers like Leo Amery into a full-scale programme to relieve unemployment and reorient the economy. Budgetary cuts and Treasury opposition meant that little came of this.32But it was desperation at the prospect of deepening economic crisis at the end of 1923 that led Baldwin, the Conservative prime minister, to declare a sudden conversion to protective tariffs. The occupation of the Ruhr, he told the House of Commons, meant that ‘the restoration of Europe had been postponed for years…[W]e are…in a position of emergency that we have never had to meet before.’ ‘Radical and drastic measures’ were needed.33 Tariffs were rejected by the electorate. The 1924 Labour government and the second Baldwin ministry (1924–9), with the free-trader Churchill as Chancellor of the Exchequer, turned back to the orthodoxies of the gold standard as their escape from the economic labyrinth.

With the return to gold, the City might have hoped that the worst of its post-war uncertainties were over, and that it could begin to profit from the revival of the world economy. In reality, the economic damage revealed by the recovery period proved much more lasting. The gold standard was meant to restore confidence in London as the financial centre of the world economy. But the strain was felt by domestic industry struggling to compete abroad while an over-priced pound and high interest rates drove up its costs. Nor was going back on gold a cure for the most serious weakness of the City's commercial empire after 1918: the shrinkage of its foreign investment and the shortage of capital with which to rebuild its pre-war holdings. Indeed, in the effort to keep sterling high against the dollar and prevent interest rates at home (driven up by the enormous scale of government debt) from rising further, the Treasury and Bank of England had actively discouraged investment overseas except to sterling countries.34 When the Bradbury Committee recommended ending the embargo on foreign issues in 1925, it remarked that Britain could not afford to lend abroad more than £100 or £120 million a year, far below the pre-war figure.35 British investors seemed to heed this advice. Where British foreign investment in 1911–13 had taken some 8 per cent of national income, after 1925 the figure was 2.5 per cent.36 By 1929, the nominal level of British capital abroad was the same as in 1913, but its real value had fallen by perhaps 40 per cent. High interest rates at home and uncompetitive exports reduced both the incentive and the means to invest or reinvest abroad. Well before the great depression, the old pattern of commercial empire practised since the 1870s was in retreat.

The shortage of British capital was not the only culprit. The operating conditions for British commerce and capital were also changing. In Latin America as a whole, American capital and trade competed much more heavily than before the war. The British position was strongest in Argentina. In 1914, Argentina had been the third largest destination for British capital after the United States and Canada.37 British investment had boomed on the back of its exceptionally dynamic growth as a producer of meat and grain. In the 1920s, it still seemed of huge importance to British wealth. ‘Argentina must be regarded as an essential part of the British Empire’, remarked the British ambassador in 1929.38 There were 40,000 British passport-holders in the country (substantially more than in the Rhodesias). It paid some £36 million a year to Britain in dividends and interest, perhaps 10 per cent of Britain's foreign property income. Its credit-rating was on a par with Canada and Australia.39 Its British-owned railways were ‘the backbone of our whole position out here’,40 not least because they bought most of their supplies, including coal, from Britain. But Argentina's growth was slowing down as the supply of new land dried up. British exports were declining. British-owned railways and utilities faced growing local resentment over rates and charges. Little British capital was forthcoming. Indeed, the Anglo-Argentine connection was becoming increasingly politicised, just as London began to press hard for import concessions to bring its visible trade into balance. It was only Argentina's extreme dependence on the British market after 1929 that checked for the time being the more vigorous expression of economic nationalism. In China, by contrast, political conditions in the 1920s were already having a direct impact upon British commerce. The lure of the China market (as opposed to its existing value) was strong, but London's apparent reluctance to abrogate the ‘unequal treaties’ and give up the extra-territorial privileges of the treaty-ports made British interests the prime target of Chinese nationalism after 1919. From Canton, where the nationalist movement (or Kuomintang) was concentrated, anti-British activism was aimed at nearby Hong Kong. In 1925, after the ‘30 May incident’ in Shanghai, when several Chinese were killed by the municipal police of the Anglo-American (but mainly British) settlement, the Canton nationalists organised a highly effective sixteen-month boycott of British trade along the coast and a general strike in Hong Kong itself.41 By the end of 1926, the damage was bad enough to push London (under pressure from the large British firms in China) towards the appeasement of Chinese nationalism. Official policy was now to move towards the surrender of extra-territorial rights and the concession of tariff autonomy – China's power to set import duties independently, taken away from Peking in 1842. British enterprise would now have to make the transition (welcomed by the larger firms) towards fending for themselves in their dealings with customers, politicians and warlords.

In the mid-1920s, however, economic nationalism in London's commercial empire had yet to pose a major threat to its financial and commercial interests. The great edifice of commercial primacy inherited from 1914 still seemed largely intact. In some sectors, like oil, telecommunications and international banking, British firms seemed well positioned to exploit the new opportunities of the post-war world. But a subtle shift was taking place whose full significance only became visible after 1930. The shortage of capital, uncompetitive industry and (in certain cases) outdated technology meant that overall the British were poorly placed to profit from the great expansion of international trade in the later 1920s.42 In both trade and finance they were drifting steadily away from the cosmopolitan traditions of the pre-war City. Much more of the City's financial business was now devoted to domestic loans. Most of British industry was now protectionist in sympathy.43 Banking and investment in Empire (rather than foreign) countries assumed an ever-growing importance. British capital now flowed predominantly into the development funds of Empire governments – Indian, dominion and colonial.44 The City's foreign income, and ultimately its solvency, were becoming more and more dependent upon its ties with dominion governments and especially India. Most important of all was the fact that not even the return to gold could reverse the great shift of financial power towards New York. America had become, like Britain, a great creditor nation. London could no longer control interest rates across the world as it had before 1914, nor draw in the gold it needed by an upward shift in its own bank rate.45 And, by the 1920s, the City's prime international asset, the collateral for any future crisis, was leaking rapidly away. In 1931, of the great treasure trove of dollar securities built up before 1914, scarcely one-tenth remained.46 The war-chest of the British system was almost empty.

West of India: the British in the Middle East

The logic of Britain's position after 1918 was to maintain its world-system but cut down its cost. Its Middle East policy seemed to throw this in reverse. There the British acquired a huge new commitment. The original impulse sprang from the need to defeat the Ottoman Empire, once it became Germany's ally. It was supercharged by the panic (in 1918) that followed Russia's collapse and the great German offensive in the West. In retrospect we can see that the strategic imperative that drove the British into the Middle East was symptomatic of the fundamental instability of their whole system. Ever since the 1870s (arguably since the 1840s), protecting their most valuable spheres and preserving the cohesion of their global empire had forced them periodically into new and heavy liabilities. Whatever ultimate benefits they promised, these new zones of imperial control increased the risk of collision with a rival power. They raised the costs of imperial defence. And, partly as a result, they threatened to upset the political balance of the British world-system by loading new burdens on its taxpayers and rousing new fears among its disparate communities.

Before 1914, British leaders had been acutely aware of this danger even if they had few means of mitigating it. The furious arguments over the occupation of Egypt that lasted at cabinet level into the mid-1890s sprang from the fear that in so exposed a salient Britain would face (sooner or later) a hostile European combination or be driven willy-nilly into a costly alliance. To sprawl across the globe like a gouty giant, warned a philosophical diplomat, courted a united onslaught by resentful rivals. But as it turned out, neither the occupation of Egypt nor

Map 10 The Middle East after 1918

the colossal share that Britain took in the partition of Africa brought on the confrontation the critics had feared. European statesmen, mindful of the tensions of continental diplomacy, were disinclined to risk much for ‘light soil’ in Africa, and only France was willing to challenge the British over Egypt – a challenge that ended in the humiliation of Fashoda in 1898. The mutual self-interest of the European powers in tranquillising (contemporaries would have said ‘pacifying’) their African possessions at the lowest cost had all but sterilised the African continent diplomatically by 1904, the year of the Anglo-French entente. But the Middle East was a different story.

If Egypt was a salient, the Middle East was a vast arena in the middle of the world that would have to be held against all comers. Since antiquity it had been a cockpit of rival imperialisms vying for its trade and agrarian wealth. It lay open to invasion over land from the north and east, and by sea from the west and south. There were wide internal frontiers of desert, marsh and mountain that waged a constant war of attrition against settled authority in the cultivation zones. Strategically, it was a quadrilateral. Mastery of the region meant keeping control of its four great gateways: at the Straits, in North Persia, on the Isthmus of Suez and round the shores of the Gulf – a task that defeated almost every conqueror except the Ottomans at the height of their power. Culturally, it was a mosaic of overlapping but impermeable communities, the residue of successive waves of conquest, conversion and migration and a reminder of the region's past as the commercial and intellectual crossroads of the Old World. In this heartland of Islam, no ruler could ignore the scribal elite (the ulama) who enjoyed wide popular loyalty, nor discount the traditions of religious militancy as fierce as any to be found in Europe. The guardianship of its Holy Places aroused intense concern among Islamic populations as far away as Senegal and Java. Economically, it was a region that had once been the junction of global trade, but had drifted into the relative poverty that intensified the isolation of its remoter hinterlands. Vulnerable and volatile, it was tempting to enter but hard to keep. It was small wonder that, while they had agonised over its strategic fate, no British government since 1800 toyed more than briefly with the idea of empire in the Middle East.

It was a measure of how far they had been driven from the old assumptions of imperial defence that British leaders could agree by mid-1918 that without Middle Eastern supremacy their world-system would collapse. In the year that followed, British policy was inspired by a grand design of which Lord Curzon was the principal architect. A former Viceroy, Curzon was chairman of the War Cabinet's Eastern Committee. His knowledge of the region was unmatched (but not unchallenged) by his ministerial colleagues. He was determined to exploit the twist of fate that had delivered the Middle East into British hands, for (or so he thought) it was the region in whose turbulent politics lay the most important key to imperial safety. ‘You ask’, he lectured the Eastern Committee, ‘why should England do this? Why should Great Britain push herself out in these directions? Of course the answer is obvious – India.’47 Protecting India required the exclusion of any other great power from Southwest Asia. But it did not mean the wholesale extension of colonial rule. Curzon's preference was for ‘native states’: local autonomy for Arabs (and Kurds) modelled on the princely states in India.48 What mattered most was a proper settlement for Turkey and Persia. Curzon was convinced that Ottoman Turkey must be cut down to size, to demolish its pre-war status in the Islamic world and destroy forever the power it had used with such deadly effect against Britain: its control of the Straits. Denied their old leverage in European diplomacy (command of the Straits), and restricted to their Anatolian homeland, the Turks could do little harm. In the case of Persia, against whose domination by Russia he had warned so vociferously before 1914, Curzon's plan was to bind the shah's government in a treaty that exchanged aid for influence. Teheran's grip would be tightened on its unruly provinces with British help. The shah's ministers would defer to British ‘advice’. The deal would be sweetened by a British loan. To insure against disruption from the north, a military presence would be maintained in the Caucasus and Trans-Caspia where post-imperial states were emerging from the wreck of Tsarism. And, needless to say, the whole vast scope of Curzon's plan assumed implicitly that the citadel of Britain's Middle Eastern power, her primacy in Egypt, would be even safer and stronger than before the war.

But Curzon's grand design was flawed from the outset. It assumed that the French could be denied what they had been promised in 1916: control of ‘Syria’ – a loosely defined region extending from the Lebanon coast to the Persian border. Clemenceau made it plain that British bad faith in the Middle East would cost it dearly in Europe, where French cooperation in treaty-making was vital: in September 1919, the British gave way. Curzon had assumed that the collapse of Tsarism would prevent, or postpone indefinitely, the revival of Russian influence in the Caucasus and Central Asia. By the middle of 1920, the Red Army had shown that this was a pipe-dream with immediate repercussions on the Anglo-Persian treaty, as yet unratified.49 The easy monopoly of great power influence on which Curzon had counted thus rapidly dissolved. Even in the spheres under British control, his native state formula ran into the ground. There was no question of reversing the Balfour Declaration (its author was a senior member of the Lloyd George government) with its promise of a Jewish ‘home’. That meant that in ‘Palestine’ – another ill-defined zone – Arab autonomy would have to be curtailed to protect the experiment in Jewish colonisation. Meanwhile, in Mesopotamia (modern Iraq), military occupation by an Anglo-Indian army was mutating into a form of government loosely modelled on an Indian province (not a native state), in which a cadre of British officials began to rule local communities much as they might have done in the Punjab. Indirect command of the Eurasian crossroads, cheap, flexible, cooperative, began to vanish like a mirage. But, on the other hand, there was no question of building a Middle East Raj in the way that the British had made an Indian empire: with its own army, administration, ideology and political tradition. Quite apart from the promise of accountability to an incipient League of Nations – under the mandate system – any such evolution was completely blocked by the harsh realities of financial control. In the Middle East, the main cost of such Raj-making would have fallen not on the locals as had happened in India, but on London and the taxpayers at home. But, there, the demand for demobilisation and retrenchment grew stronger every week.

In these conditions, local resistance to foreign rule spread rapidly across the region. In the Arab lands it was centred on Damascus, where a pre-war movement had sprung up among the notables against the growing assertiveness of the Turkish authorities.50 Here, the notables looked forward to an independent ‘Greater Syria’, uniting much of the Fertile Crescent (including Palestine) in an Arab state of which the Hashemite prince Feisal would be the nominal head.51 French over-rule and a ‘Jewish commonwealth’ in Palestine were fiercely rejected. As the hope of freedom receded, and the French mandate grew more certain, the Syrian leaders issued a despairing proclamation of Arab independence in Syria, Lebanon, Palestine and Iraq. Four months later, the French army scattered a Syrian militia and occupied Damascus. In Palestine, where late Ottoman rule had strengthened the position of the Arab notables in Jerusalem and extended their influence on the countryside,52 the prospect of colonial-style rule and sharing power with a Jewish settlement was even less welcome. A ‘Palestine Arab Congress’ voted in favour of joining Syria in 1919, there were rumours of armed resistance and in the spring of 1920 protests against the Balfour Declaration spilled over into violence against Jews. Worst of all (from the British point of view) was Iraq. By mid-1920, the occupation regime was surrounded by enemies. In the Kurdish north, its authority was fragile. In Baghdad, the Sunni notables, encouraged from Damascus, plotted against rulers who excluded them from power even more than the Ottomans.53 In the tribal zones of the centre and south, where much of the war had been fought, the British were resented as the gatherers of tax and the breakers of custom. In July, the revolt broke out in earnest. At the end of the month, Arnold Wilson, the Civil Commissioner, told London that ‘our military weakness is so extreme’ that the Euphrates valley might have to be abandoned. ‘An Arab state…may yet come to pass but it will be by revolution not by evolution.’54The British garrison of 35,000 (its bayonet strength) was pinned down, unable to move beyond the railheads except in a force too small to be safe.55 As their losses rose and costs soared, ministers in London began a furious debate on whether to pull back to Basra in the south or withdraw from the country altogether.

For the British, 1920 was a year of crises. With an army that had shrunk dramatically to its pre-war size of around 200,000 men, they faced a whole clutch of emergencies: in India, where Gandhi's non-cooperation movement was in full swing; in Ireland, against the IRA; and at home, where the sudden end of the post-war boom brought a wave of industrial unrest. Nor were their troubles in the Middle East confined to the Arabs. With its garrisons, camps and aerodromes, and the Canal, Egypt was the castle-keep of British power, the ‘Clapham Junction’ (as the cliché had it) of imperial communications, more important than ever with the post-war rise of Japanese sea-power. But, in March 1919, it too had burst out in revolt. The spark was lit by the refusal of the British to allow a delegation of Egyptian politicians (organised into the Wafd or ‘delegation’ party) to appeal for independence at the peace conference in Paris and by the arrest of the Wafd leader, Sa’ad Zaghlul. The revolt of the notables had been triggered by fear that the British were planning a constitutional ‘reform’ in which local influence would be cut down in favour of foreign interests, and was almost certainly encouraged by the Egyptian ruler, the Sultan.56 Much more alarming was the revolt of the fellahin, embittered by the burdens and depredations of a war economy, and the violent unrest in the towns, where the Wafd made common cause with students and organised labour. In the spring of 1919, the British briefly faced an insurrection that cut off their communications (sixty-seven rail stations were destroyed, lines blocked, telegraph wires cut), made travel perilous and brought to mind hideous images of the Indian Mutiny. But, even when the rural dust had settled, they found themselves baffled by a political boycott. No Egyptian minister would (or dared) take office without insisting on the promise of independence. The British could stay on but they would face all the risks of violent confrontation (orchestrated at will by local politicians) and all the costs of an inflated garrison. A fruitless series of negotiations dragged on through 1920 and 1921. As if that were not enough, the early months of 1919 brought warning that the keystone of Curzon's geostrategic plan – the careful containment of post-war Turkey – was far from secure. On 19 May 1919, Mustapha Kemal (Ataturk) landed at Samsun on the Black Sea coast to rally Turkish national resistance against the Greeks and Armenians and their Great Power backers. In little more than a year, the danger of a great Turkish recovery drove London into a reluctant, and ultimately disastrous, alliance with the Greeks to destroy Ataturk before he could pull down the flimsy structure of its post-war imperium.

The scale of resistance was impressive, and at times it induced something near panic among British leaders. They found themselves trapped between an inglorious scuttle (throwing away all the gains of their eastern triumph) and the escalating cost of military occupation – at a moment when the reduction of their post-war spending had become extremely urgent. By the end of 1920, their naïve confidence in a cheap and convenient regional primacy had given way to anxiety, impatience and uncertainty. They were saved in part by the divisions and weaknesses of the nationalisms they feared. Significantly, the toughest was Mustapha Kemal's, forged in the sufferings of wartime Anatolia and infused with the bitterness between the Muslim ‘Turks’ and the Christian ‘Greeks’, with whom they fought for control over Asia Minor.57 In the Arab lands it was a different story. The notables in Damascus, Baghdad and Jerusalem had no common programme. In Baghdad and Jerusalem they wanted their own state, not one ruled from Damascus. As provincial elites of the Ottoman Empire, they knew little of international politics and depended upon the Hashemite princes, Feisal and Abdullah, as their intermediaries with the imperial powers. Socially, they were deeply conservative and recoiled from the risks of popular politics. They were hobbled by religious and ethnic divisions: there was little chance of the Sunni notables of Baghdad making common cause with the Shia rebels along the Euphrates, still less with the Kurds in the north. In Egypt, the same theme of division was played out in different ways. There too the Wafdist leaders (drawn largely from the landowning class) refrained from encouraging a further round of the rural violence that had shocked the British in 1919. But the real check to a unified movement was the power of the court and the dynasty. The sultan (soon to be the king) was as keen as the Wafd to reduce the overweening power the British had assumed over Egypt. But he was equally keen that the beneficiaries of a British retreat should not be the Wafd, whose open purpose was to reduce the monarchy to a constitutional figurehead. His influence was mobilised to frustrate the unity that might have forced the British into the concessions that Zaghlul had demanded from them: full diplomatic freedom abroad and the withdrawal of the British garrison from Cairo and Alexandria to a cantonment near the Canal. Factional politics in Egypt between court and country and within the Wafd itself produced a stalemate. No group would or could sign a treaty with the British. But nor would the British give up their control of Egypt's external relations, their role as ‘trustee’ of foreign interests in the country, or their political grip on Egypt's own colony, the Sudan.58

From mid-1921 onwards, the British traced a tortuous path towards compromise. In Iraq, Churchill (who as Colonial Secretary had assumed responsibility for Britain's two Arab mandates) found in Feisal a ruler-in-waiting (he had been driven out of Syria) who was acceptable to the Sunni notables in Baghdad, and a seemingly reliable ally against the threatened reflux of Turkish influence. After an ‘election’ in which official influence was thrown openly on his side and his main local rival was unceremoniously deported, he was declared the choice of the Iraqi people. But, when it came to the treaty by which the new Iraq government was to accept the mandate, Britain's diplomatic supervision and a military presence (in the form of bases), Feisal proved alarmingly obdurate. It took a Kurdish revolt in the north, new signs of Shia unrest, and Feisal's own temporary retirement with political appendicitis (a local variant of the diplomatic cold) before the anti-treaty party in Baghdad was repressed and an agreement endorsing the mandate and Britain's supervisory rights was eventually signed in October 1922. In Palestine, Arab resentment was partially appeased by amputating its eastern zone as a separate mandate of Trans-Jordan and installing Abdullah, Feisal's elder brother, there as king; and by conceding, through the creation of the Supreme Muslim Council, that Palestine proper would be ruled on a communal, not a unitary, basis. The Council became the instrument through which the Jerusalem notables would exert their influence over the Arab population. In Egypt, the logjam was eventually broken by the British High Commissioner, Lord Allenby, the victor of Megiddo. Allenby scrapped the treaty that London had demanded from the Egyptian politicians, and declared unilaterally that Egypt was now ‘independent’. The protectorate of 1914 was terminated. British supervision would be confined henceforth to Egyptian diplomacy (it would have to ‘conform’ to Britain's), the safety of foreign nationals (some 250,000, mainly Greeks, who enjoyed extra-territorial privileges) and the Sudan. With the ambiguous, and perhaps disingenuous, promise that the Residency would no longer interfere in local politics, an uneasy calm descended upon Anglo-Egyptian relations.

These compromises were necessary for regional tranquillity (and a reduction of Britain's military burden), but they were not sufficient. British influence in the Middle East (if it was not to be at prohibitive cost) still turned on a settlement of the Turkish question. A resurgent and nationalist Turkey, in control of the Straits, bent on recovering its old Arab provinces, and enjoying the open support of Russia and the covert sympathy of France: this was the nightmare scenario that had led Curzon and Lloyd George to back the onslaught of the Greeks on the Kemalist forces in Anatolia. In September 1922, when the Greeks were routed, the nightmare seemed close to reality. At Chanak, on the Straits, a shooting war between British and Turks was only averted by the promise of a conference. When it convened at Lausanne, Curzon (who had survived the fall of the Lloyd George coalition in October after the Conservative rebellion occasioned in part by the costs and risks of its eastern policy) faced the Turkish demand for the restoration of the Straits, Istanbul and Thrace, and the return of the Mosul vilayet, the northern and predominantly Kurdish third of Iraq. Worse still, while Turkish claims were backed by Russia, Curzon gained little help from France. It was a critical moment. To give up Mosul, warned the Colonial Office, would mean the collapse of Iraq.59 But, without peace with the Turks, the cost of its defence would be unacceptably high. To give back control over the Straits would hand Turkey the lever for the demolition of any Middle East settlement. Yet Curzon's hand was stronger than it looked. The Turks were reluctant to fight their way into Gallipoli and Thrace, and nervous of embracing the old enemy to the north. After seven months of diplomacy, prolonged by the deafness, sometimes feigned, of the Turkish delegate, the treaty of Lausanne was signed. The Turks regained Eastern Thrace, and full control over Istanbul and Asia Minor. In return, they agreed that the Straits should be permanently open and their shores demilitarised, a concession that turned the Black Sea (in the bitter phrase of a Russian delegate) into ‘an English lake’.60 But their real concession was to agree to reserve the dispute over Mosul for arbitration, a vital breathing space for the fragile mandate. It was a turning point.

In the end, geopolitics had been the decisive factor in the Middle East peace. By 1921, Russian power had revived enough to make coercing Turkey impossible and to ruin Curzon's hopes of imposing his semi-protectorate in Persia. But not enough to dissuade the two ‘strong men’ who came to power there from seeking an accommodation with Britain. Reza Pasha in Persia, like Kemal in Turkey, could exploit the new balance of power to restore the independence that had seemed all but lost in 1919. But he was not strong enough to exclude British influence or expel British interests, whether strategic or economic (like the Anglo-Persian Oil Company's concession in southwest Persia).61 Both Turkey and Persia became buffer states, poised uneasily between Russian power to the north and British to the south.62 But it was enough for British purposes. On the British side, their Middle East policy was governed by three powerful assumptions. First, that local leaders, Egyptian or Arab, were too realistic to expect a ‘real’ freedom and that, shrewdly managed, the ‘amour propre’ of local nationalisms would not conflict with their imperial interests. It is quite possible, remarked Lord Milner hopefully, during his abortive attempt at an Egyptian settlement, ‘that what we mean by “Protectorate” is not really incompatible with what they mean by “Independence”’.63 Secondly, that British objects were best obtained by indirect methods and informal control. ‘These Eastern peoples with whom we have to ride pillion’, said Curzon with viceregal condescension, ‘have different seats from Europeans, and it does not seem to me to matter very much whether we put them on the saddle in front of us or whether they cling on behind and hold us round the waist. The great thing is that the firm seat in the saddle should be ours.’64 The alternative was a troublesome ‘entanglement’ in parochial concerns of no imperial value. Thirdly, that even the cut-down primacy they retained after the dust had settled in 1923 was of vital importance to their imperial system. Indeed, for all the setbacks they had suffered by 1922, the British had gained a real prize. The buffer zone protecting Suez and the Gulf was far wider and deeper than ever before. The costs of guarding it after 1923 were low. Its value as compensation for British weakness in Europe would soon enough be shown.

What is surprising in retrospect is how little interest the British seemed to take (beyond the ‘official mind’) in the new treaty empire they had founded in the Middle East, an empire that now included not only the mandates in Iraq, Trans-Jordan and Palestine, the ‘veiled protectorate’ in Egypt, the real protectorates in the Persian Gulf, and a colony in Aden (still under the Bombay government) but also two new client states in the Nejd and Hedjaz (soon to be forcibly united as Saudi Arabia by Ibn Saud). Part of the reason may lie in the absence of the causes that endeared tropical Africa to press and public: the crusade against slavery and the struggle for souls. Partly it may have been due to the ignorance or antagonism that shaped British views of the Islamic world, only partially (and later) offset by the romantic imagery of T. E. Lawrence.65 But, most of all, the explanation may lie in the hour of its acquisition, a time of introversion and exhaustion when the relief of burdens was the first priority of domestic politics. With no energy to invest and no capital to send, the British connection remained narrow and shallow, the preserve for the most part of diplomats and pashas. There was almost no sympathetic engagement with the nation-building aspirations of the Arab literati – the constructive ambivalence that lubricated politics in India and the colonial world – a failure with a long and bitter legacy. In that sense, Britain's ‘moment in the Middle East’66 remained cast in the mould of its first imagining.

The politics of Gandhi

The vast new liability that Britain assumed in the Middle East after 1918 was bound to affect the internal balance of the British world-system. It was fiercely criticised in Britain on grounds of expense. It was a source of anxiety and irritation (as we will see) among Canadian leaders who feared its military implications. But the biggest repercussions were inevitably in India. After all, it was widely assumed that the main burden of defending the new ‘imperial’ interest in the Middle East would fall on India. The Indian taxpayer would foot the bill. Even more controversially, India would have become an accessory to the final liquidation of the Ottoman Empire, the humiliation of the Sultan-Caliph, and the imposition of Christian rule over the Muslim Arabs – a role that many millions of Indian Muslims might be expected to resent. As we have seen, nervousness about Muslim criticism of India's war effort in the Middle East had already led the government of India into the repression against which Gandhi had mobilised so effectively in the Rowlatt satyagraha of 1919.

These difficulties were compounded by the new political status towards which India was supposed to be moving. The August Declaration of 1917 had promised progress towards ‘responsible government’, the constitutional equivalent, it was widely assumed, of the self-government enjoyed by the dominions. The Imperial Conference in 1918 reinforced the impression that India would be treated in the meantime as an honorary dominion. India became, somewhat bizarrely, a non-self-governing member of the League of Nations and the Indian government campaigned actively (but abortively) to be given a mandate in East Africa as a reward for war service. These concessions implied that Indian views would be listened to more carefully than before the war in matters of foreign policy. The second complication was that both London and New Delhi were committed to implementing the ‘Montford’ reforms, to win Congress support for the gradual devolution of British rule – but on British terms, with safeguards for British interests and to a British timetable. Political calm – or at least the absence of violent controversy – was a precondition for their successful launch, even more so after the Rowlatt Act and Amritsar. Thirdly, while the emergency of war had passed, the urgency, in London's view, of the close coordination of Indian and British policy was as great as ever. For, if India was to play its (large) part in the new imperial burden in the Middle East, its army would have to be managed much more closely from London than in pre-war times. Its trade, revenues and currency would also need more direct supervision if they were going to contribute positively to the revival of British economic power.

The omens were unfavourable even without the additional friction that the Middle East threatened in Indian politics. The aftermath of war brought economic turbulence: a steep price rise followed by a slump in 1920. Resentment at the tax increases of wartime, and the coercive methods of recruitment practised by the Punjab government, were now reinforced by additional grievances. As prices fell, tenants and cultivators paying rent to landlords and land revenue to government came under heavy pressure. In many places, the light, benevolent hand of government now seemed more grasping and, where it upheld the claims of landlords, less just. In the towns, the see-saw of prices created labour unrest, symptomatic, the British thought, of socialist or communist infiltration. From all these came the risk of widespread disturbance. But what made them really dangerous was the chance that they would fuse with two more political movements whose object was mass mobilisation round a single issue.

The first of these was the ‘culturalist’ revolt that Gandhi had been organising since his return to India in 1915. At the heart of Gandhi's message (spelt out in his 1909 manifesto, Hind Swaraj, or Indian self-rule) was the call for isolation from the West and cultural renewal from within. This was not unique to India (a similar programme was advanced by social critics in contemporary Japan) but Gandhi's appeal was exceptionally wide and his powers of persuasion extraordinary. From his newspapers Navajivan (in Gujerati) and Young India (in English) poured a stream of political direction, tactical advice and moral instruction. It was aimed at the disparate constituencies he was intent on forging into a grand coalition. Among the most important of these were the cultural activists for whom the propagation of India's vernacular languages (as print and literature) was the vital medium of social improvement; social reformers who wanted to restore traditional morality and social cohesion (for example, through restraint of liquor-selling); religious reformers anxious to purify and invigorate Hinduism by an attack on superstition and greater emphasis on its spiritual content; and other groups for whom the status of women, or the treatment of untouchables was the most pressing concern. To all these interests and many others, the institutional politics fashioned by the British and adopted by the Congress offered little. All of them wanted their public concerns forced on to the political agenda. All of them were susceptible to the ‘culturalist’ programme that Gandhi urged and to his claim that India faced a parting of the ways between a genuine swaraj and the empty promise of British ‘reform’.

Gandhi's was not the only movement that reached out beyond the anglo-literate elite. Even before the war, social and religious reformism among Muslims had been attracted by the appeal of pan-Islamic feeling. The Ottoman Empire, guardian of the Holy Places, was in danger from Christian imperialism. During the war, the Indian government had been nervous enough to throw the Ali brothers in gaol for fear that they would canalise Indian Muslim unease and undermine discipline in the disproportionately Muslim Indian army. Mahomed Ali had been kept in gaol until late 1919. But on his release he soon began to call for Indian Muslim support against the victor powers’ treatment of the Ottoman Empire. The subjection of Muslim Arabs to Christian rule, the Greek invasion of Anatolian Turkey, the loss of Jerusalem – a Muslim Holy Place as much as a Christian – showed Western (and especially British) contempt for Muslim opinion. But it was the threat to the Ottoman Sultan, the Khalifa or ‘Commander of the Faithful’, that became the rallying cry for local Muslim elites who were keen to promote the cause of religious and social reform, and to assert their Islamic credentials. Through the ulama (scholars and scribes), and the sheikhs and mullahs who preached in the mosques, the downward transmission of this single-issue campaign to restore the Khilafat was likely to be more rapid and intense than any comparable movement among Hindus.

Gandhi grasped the urgency of uniting the Khilafat movement with his diffuse coalition of oppositional groups. The collapse of the Rowlatt satyagraha in the bloody aftermath of Amritsar had damaged his influence. The Congress leaders were rowing back hard from the confrontationist tactics of the spring. If the Muslims were left to go it alone, and the Congress endorsed the Montford constitution, his ‘culturalist’ programme would have failed and the reforms ‘could be used to deprive us of our freedom’.67 The Congress decision in December 1919 (meeting ironically in Amritsar) to accept the new constitution but press for its improvement showed the danger. Gandhi's response was immediate. In January 1920, he appeared at the Khilafat conference to call for Hindu–Muslim unity and urge non-cooperation with government. In March, the Congress inquiry into the Punjab disturbances – drafted mainly by Gandhi – was published. It was a brilliant polemic designed to convert the most respectable of Congress constitutionalists to the cause of the Khilafat and non-cooperation. Its main target was the Punjab government and the Lieutenant-Governor, Sir Michael O’Dwyer. His speeches were quoted to show his contemptuous attitude to Congress and the educated class – the ‘grasshoppers’ – reminiscent of Curzon's in 1905. The Punjab government was denounced as terroristic and corrupt. The moral was clear. By failing to repudiate O’Dwyer, the Raj had broken the concordat in which its respect for the law and the educated class was exchanged for Congress moderation. To right the ‘Punjab wrong’, and force British rule back to legality, Congress must unite with the Muslims and take up the ‘Khilafat wrong’ as its own. By the middle of 1920, Gandhi was winning the argument. The Turkish peace terms showed the scale of the Muslim grievance. The Indian members of the government's enquiry into the Punjab troubles (the Hunter Commission) refused to sign the report. The ‘small print’ of the Montford constitution showing that Civilian influence would still be entrenched in provincial politics was published in June.68 With few urban seats to contest, electoral victory would depend on the support of Muslims in almost every province.69 The Congress leaders risked being left behind by Gandhi's appeal for Hindu–Muslim unity and rejected by their disappointed provincial supporters. So, at the special Calcutta Congress in September, to which Gandhi brought large numbers of Muslim delegates, the Amritsar vote was reversed, and non-cooperation endorsed to bring ‘swaraj in one year’.

The decision for non-cooperation, reaffirmed at the main Congress meeting at Nagpur at the end of the year, marked a crucial shift in the politics of the post-Mutiny Raj. Non-cooperation meant boycotting elections to the new provincial councils, refusing or returning the award of honours, rejecting government in favour of ‘national’ schools, avoiding the courts in favour of unofficial tribunals and practising swadeshi, the choice of local over imported products. It was to be enforced by volunteers who would engage in satyagraha – non-violent civil disobedience. Gandhi reconstructed the Congress as a vehicle for his supporters and an organisation to challenge government at every level. Most dramatic of all was his repudiation of Congress' loyalty to the ‘British connection’, and its hope of inheriting the British Indian state. The Raj, insisted Gandhi, was an evil empire, guilty of ‘terrorism’70 and ‘Satanism’.71 Hindu–Muslim unity was more important than preserving the British connection. What India needed was a ‘separate existence without the presence of the English’ and the right to secede from the Empire. Unless Indians were acknowledged as equals, only complete separation would bring ‘Swaraj, equality, manliness’.72 Non-cooperation was a programme for self-sufficiency and isolation, a rejection of the imperial duties whose discharge was burdensome to all and loathsome to Muslims. It redefined Indian nationalism as the search for community rooted in local values and vernacular culture, committed above all to Hindu–Muslim unity. It was an astonishing turn in Indian politics. Yet, Gandhi's success would have been inconceivable without Britain's advance into the Middle East, the furious reaction of India's Muslim politicians, and the skill he displayed in harnessing Congress and its ‘constitutional’ grievances to the Muslim cause and his own.

The campaign got under way in earnest in 1921. At the local level, it was often a struggle of wills between the Congress district committees and their volunteers and the British district officer, backed up by the police and local notables who were reluctant to alienate the official machine. The Viceroy's government thought that non-cooperation would fizzle out, and urged its officials not to make ‘prison martyrs’ of its leaders. But, by July 1921, the confrontation was becoming increasingly sharp. The Khilafat leadership veered towards more violent tactics. In September, the Ali brothers were arrested for sedition. In November, the visit by the Prince of Wales led to widespread rioting in Bombay in which several Europeans were killed. As the fear grew of more general violence, the Viceroy, Lord Reading, came under heavy pressure from London to arrest Gandhi and the Congress ‘high command’. Then at the end of January 1922, at Bardoli in Bombay, the Congress leadership called for mass civil disobedience, including non-payment of taxes. Non-cooperation had reached its climax.

At first sight, Gandhi's decision seems strange, and it turned out to be reckless. There were already signs that the anger of Muslims and peasants was being turned not only on government but against other Indians, Hindus and landlords. The Congress politicians, always doubtful of Gandhi's tactics, looked on with misgiving. But there were also signs that the government might give way. Lord Reading had been looking for a way out. He was pressing for a change of heart towards Turkey. He had offered a round table conference. His masters in London had come to terms with Sinn Fein (in December 1921) and were about to concede the ‘independence’ of Egypt. One more push might break the British will, before the Hindu–Muslim alliance fell apart and non-cooperation collapsed. But Gandhi miscalculated. When Reading tried publicly to force London into concessions to Turkey (mainly to show the Indian government's sympathy for Muslim feelings), Montagu (who had published his telegram) was sacked. Then, at Chauri Chaura in the United Provinces, twenty-two policemen were killed by a mob. Gandhi called off mass civil disobedience. Soon afterwards he was gaoled. Within weeks, non-cooperation began to subside. By 1923, the return to constitutional politics had become irresistible. Had Gandhian politics been merely an episode?

The British certainly hoped so. The scale of non-cooperation had been a profound shock to the Civilians of the Indian Civil Service. They now had to work out new tactics for a constitution in which Indian ministers would control part of every provincial government, and elected politicians or ‘MLCs’ (Members of the Legislative Councils) would become much more important as intermediaries between provincial governments and the localities. The old ‘Anglo-India’ was dead, but the goal of the new polity seemed uncertain, even to the most senior Civilians. ‘Today I walked with Hailey for an hour and a half before dinner’, wrote Sir Frederick Whyte, who presided over the Central Legislative Assembly. ‘We tried to answer the question “Where are we going?”.’73In fact, Hailey, who was soon to be governor of the Punjab, became the arch-exponent of the new Civilian policy. It was based on the assumption that there were two Indias: Congress India in the towns and districts, where Congress influence was strong, and Traditional India, where it was not. The object of Civilian policy was to contain the one and mobilise the other. At the provincial level, that meant careful attention to the franchise and the distribution of seats, and the deft encouragement of politicians and parties that would ‘play the game’ of constitutional politics rather than resorting to boycott or agitation. If shrewdly done, it meant that, even when the Congress returned to the electoral fray, its ‘assault on the Legislative Council can be awaited with interest and without alarm’.74 At the district level, it meant the vigorous use of patronage, influence and reward (like the grant of pensions, honours, or gun licences) to counter the influence of Congress politicians and build up a ‘loyal’ party of ‘Government men’.75 It also meant guarding the princely states against pressure or criticism from Congress. India might be pledged to eventual self-government, but there was no reason to think that it had to be self-government in the Congress (let alone the Gandhi) style.

At the same time, the Civilians were determined (as so often in the past) to win more freedom from their masters in London. They had gained a major victory with the grant of ‘fiscal autonomy’ in 1919: a historic concession in which the old prohibition on Indian tariffs and import duties was lifted, in recognition of the urgent need to raise more revenue. They wanted a convention that London would not interfere in matters of purely Indian (as opposed to imperial) interest.76 They wanted more latitude to deal with Indian politicians without coming under the kind of pressure to gaol or coerce felt by the Viceroy at the time of non-cooperation. London could scarcely dispense with their services. In its straitened financial circumstances after 1918, it had all the more need to keep up the old army system in India, in which one-third of the British army was barracked in India at Indian expense, and the Indian army was an imperial reserve. Against the furious protest of Montagu and the Indian government, tightening London's control over the Indian army (the main theme of the Esher Committee in 192077 had had to be shelved, but guarding the army budget against Indian politicians was a top priority after 1920. No less urgent was the need to control the value of the rupee and the monetary policy of the government of India. If the rupee fell too low, then India might default on its charges to Britain, and damage further the fragile balance of payments. All this was good reason why the Civilians were still the indispensable allies of the imperial interest in India, the guarantee that it would play its part in the British world-system. If nothing else, non-cooperation had shown that London still needed the ‘steel frame’ (Lloyd George's term) of the Indian Civil Service (ICS).

But had India's ‘new politics’ made their task hopeless? In the mid-1920s, the signs were ambiguous. Congress formally abandoned non-cooperation in 1924, in belated recognition that many of its members had already given up the boycott of the councils. By 1924 also, the Khilafat movement was dead: the office of khalifa had been abolished by the Turks themselves. The residue of non-cooperation seemed to be the rising antagonism of Hindus and Muslims and the deepening appeal of both Hindu and Muslim revivalism. The All-India nationalism that Gandhi had urged was less in evidence than the ‘sub-nationalisms’ of region, language, community (like the untouchables) and religion. For the Congress politicians, like Motilal Nehru and Chittaranjan Das, the uncrowned king of Bengal, who had followed Gandhi into agitational politics, the dilemma was obvious. Neither Gandhian populism nor the provincialism that the Civilians were eagerly promoting had much in common with the British Indian state they still wanted to make: both threatened in different ways to abort its birth. They hankered for an Indian dominion (inside the Empire), and an Indian ICS, to build the nation from above. Their instrument was the Swarajya party, formed in December 1922. But, if they were to extract new concessions from the Civilians, and force the pace towards full dominion status, they needed the resources that Gandhi had made: the mobilising potential of his new-style Congress; the inclusive ideology that drew a vast range of communities and classes to the Congress banner and out of the web of Civilian influence. It was vital to capture the Congress machine for constitutional politics78 and to keep at bay the rising tide of Hindu communalism, whose leader Malaviya urged ‘responsive cooperation’ to defend Hindu interests.79 The real enemy, insisted Das, was still ‘the bureaucracy’ – the ICS.80 By 1926, however, the Swarajists seemed on the ropes as their provincial support was eroded by the communal appeal of ‘Hindu’ and ‘Muslim’ parties.81 Squeezed between the Civilians and provincial communalism, their main hope lay now in alliance with Gandhi. After all, what non-cooperation had shown was that, with skilful leadership, Gandhian mass politics could turn the tables on government and push it towards the concessions that it had seemed in 1921 to be on the verge of making. What was far less certain in 1926 was when the chance to do so would come again.

Imperial nations?

The importance of the white dominions to British world power had been dramatically vindicated in the First World War. Their manpower and resources had made a crucial contribution to imperial victory. They had strengthened Britain's claim to be the leader of free states against autocracy and militarism. They had been a vital prop – perhaps the strongest proof – for the idea that empire was a central element of British life. The existence of self-governing ‘British’ states on three continents outside Europe gave substance to the notion – implicit in British attitudes after c.1880 – that the British were a ‘world people’ uniquely adapted to the task of creating new nations in temperate climes. But the place of the dominions in the British system after 1918 was as problematic as India's – and for similar reasons. There was the unfinished business of 1917, when the new conception of dominion statehood and equality with Britain had been mooted. There was the legacy of the war and the impact of its disturbing aftermath. In all four overseas dominions, the instability of trade, war debts and the downward pressure on wartime wages and prices created social unrest, political division and (in two) the danger of ethnic strife. Most worrying of all was the geopolitical turbulence that lasted into the mid-1920s, bringing with it the threat of unwanted commitments, unlimited liabilities and new insecurities, perhaps even of war. The question of mandates (1919), the renewal or not of the Anglo-Japanese alliance (1921), a possible war over Chanak (1922), the new British commitments in Europe foreshadowed in the Ruhr crisis of 1923 and the Locarno pact of 1925, and the military obligations to the League of Nations set out in the Geneva protocol of 1924, raised in the starkest form the meaning of dominion autonomy and imperial unity. Then there was the question of Ireland.

The result was a political argument in two dominions (muted in Canada, fierce in South Africa) over the form and substance of the ‘British connection’ and an armed struggle in Ireland which turned into civil war after the treaty of December 1921 conceded ‘Canadian’ status to the twenty-six counties of the new ‘Irish Free State’. In Australia and New Zealand, as we will see, there was ample scope for friction with Britain, but much less interest in constitutional change or formulaic autonomy. Indeed, since each of the dominions had its own interests, political traditions and ethnic composition, it seemed highly unlikely that a common formula could evoke its particular place in the British system. This was the fundamental question at issue between 1918 and 1926. Would the five dominions (including Ireland after 1921)82 divide between the three that still regarded themselves as ‘British nations’ (a less than unanimous view in Canada), and the two where republicanism was a powerful, perhaps dominant force? Would the idea of a common dominion status dissolve into a set of bilateral ties between Britain and the several self-governing states, some acknowledging the bonds of kinship, others only the terms of a treaty? Or could all the dominions agree upon a form of words that recognised their ties to each other, to the imperial association and to the British Crown? This was not merely a question of constitutional pedantry. To a wide circle of informed opinion in all the overseas dominions, some statement of common concerns was crucial. This was not to bend the knee to Downing Street but to resist the isolationism that was a latent force in dominion politics. Without some vehicle through which to play an active part in the ‘New World’ created by the war, they argued, the dominions would see their most vital interests going by default.


As the largest and oldest of the dominions, Canada's attitude was of key importance. Before the war, the Canadian premier, Sir Robert Borden, had been an ardent advocate of a common imperial foreign policy, over which Canada should exert a significant influence. Canada had made the largest contribution in manpower to the imperial war effort. Borden's ‘Unionist’ coalition had driven through conscription against the passionate protest of the French Canadians in a bruising demonstration of Britannic loyalty. In 1918, Borden had been instrumental in gaining dominion representation at the peace conference in Paris as part of the ‘British Empire Delegation’. But, after 1921, under the Liberal prime minister, Mackenzie King, the Canadian government repudiated much of the approach for which Borden had stood, insisted upon the right to negotiate and sign a separate treaty (the ‘halibut’ treaty with the United States in 1923) and supported (in 1926) the demand from Ireland and South Africa that dominion equality with Britain, including the right to their own foreign policy, should be formally recognised in a public statement.83 King's apparent hostility to the claims of empire, his almost paranoid suspicion of the ‘centralising’ aims of the London government, and his determination that the Canadian government should have the first and last word on any external commitment were easily converted by a later mythology into a programme for independence. But King's objectives were much less spectacular. They are better understood as a defensive reaction to the fluid state of Canadian politics than as a novel vision of Canadian nationhood.

The end of the war in Canada saw a rapid deflation of the Britannic sentiment that had helped to carry the Unionist coalition and conscription to victory in 1917. The end of a booming war economy exacted an immediate toll. The gross domestic output per person, having risen by some 8 per cent between 1913 and 1917, fell back by an astonishing 27 per cent in the four years that followed, causing a slump in living standards.84 The worst effects were felt on the Prairies among wheat farmers and the service industries they supported, and in rural Ontario. For the Unionist government, which struggled vainly to prop up grain prices, the political backlash was catastrophic. It had alienated Quebec by conscription. Now the west and the rural east were in revolt as well. In the cold post-war climate, the Unionist slogans of conscription, the flag and the tariff were redundant or worse. When they eventually went to the polls under Borden's tough and uncompromising successor, Arthur Meighen, the Unionists suffered a shattering defeat. A rejuvenated Liberal party under Mackenzie King won most seats (116). The farmer's protest party, newly formed in the west, carried 65. Meighen, who lost his own constituency, was reduced to 50. But the 1921 election did not bring about a settled regime like those that Macdonald, Laurier and Borden had been able to fashion. King had no overall majority. Three-party politics made for prolonged uncertainty in a period of great international turbulence. They placed a premium on excluding so far as possible the influence of unpredictable external factors. The greatest danger by far was a call to arms from London in a European or Near Eastern war and the fervent response it would evoke in Canada. Four times in twenty years the appeal to Britannic loyalty had struck the dominion's brittle politics with the force of an earthquake: in 1899, in 1911 (over reciprocity and a Canadian navy), in 1914 and (most destructively) over conscription in 1917. The short-lived Chanak crisis in September 1922 was a timely reminder that the threat was still there. ‘The minute there is any war or threat of war in Europe in which Great Britain might be involved’, remarked an Anglophone Quebec politician, ‘the Jingoes will so stir up the Country that in a Plebiscite or Referendum 75% of the people would immediately vote for war.’85

Mackenzie King was an Ontario Presbyterian, the son of a Toronto barrister turned academic.86 But his position as Liberal leader was crucially dependent on his support in Quebec – where Ernest Lapointe, the provincial leader, was his vital ally until his death in 194187 – and the avoidance of any damaging rupture between his followers there and in English Canada. A jingo storm would tear his government apart. This was why King waged his relentless bureaucratic war against any form of words that bound Canada to the chariot of British foreign policy, that made Canada party to the treaty obligations that London assumed in Europe and elsewhere, or which implied that the dominion prime ministers at the Imperial Conference formed an imperial ‘cabinet’ empowered to take decisions that were binding on their own dominions. King's fears ran deeper. A secretive, reclusive man, whose private views were carefully veiled, he was deeply suspicious (and not without reason) of British politicians and the British press. At the Imperial Conference in 1923, he expected a press attack in London on his ‘disloyalty’ to the Empire that would be loudly echoed in the Canadian papers.88 He suspected British ministers of ‘briefing’ against him, and angrily complained to L. S. Amery of London's habit of appealing over Ottawa's head to public opinion in Canada.89 King was determined to warn London off from such public appeals for Canadian support and to insist upon Ottawa's right to decide its external obligations. But he was equally determined not to be cast as an enemy of ‘British connection’ or as lukewarm about Canada's imperial ties. Neither (it seems likely) accorded with his private opinions; both would have been fatal to his public reputation. He did not want to redefine Canada's place in the world, and he showed little interest in the constitutional debate over dominion status until Irish and South African pressure made some declaration unavoidable in 1926. The Canadian delegation did not want a definition, King's senior official, Oscar Skelton, told a favoured journalist.90 His real aim was to stabilise Canadian politics (and his own lease on power) by moving as close to an isolationist position within the British system as he dared. It was a solution very similar to Laurier's. It fell far short of nationalism.

There were nationalists in Canada after 1918, but King showed no sympathy for them, and they all but despaired of him. In Quebec, nationaliste feeling was moving gradually away from the outlook once championed by Henri Bourassa, towards a more hostile view of ‘British connection’ and (under the influence of the Abbé Groulx) towards the dream of peaceful separation from the rest of Canada.91 In English Canada, post-war nationalism formed a polar opposite. It was built on the pre-war claim to full equality with Britain in the management of the Empire and on an angry repudiation of the ‘isolationist’ and ‘abjectly colonial’ mentality attributed to the French Canadians.92 Its most articulate proponents after 1918 were Sifton and Dafoe, proprietor and editor of the Winnipeg-based Manitoba Free Press. Both had been ardent conscriptionists in 1917. But, by the early 1920s, both were convinced that the Britannic patriotism to which they were loyal was being abused by the reckless expansionism of the Lloyd George government, especially in the Middle East, and by its assumption of European liabilities that had little to do with the common concerns of the white dominions. They backed King's efforts to disentangle Canada from these ‘false’ imperial burdens, but they wanted to go further and gain formal recognition of Canadian sovereignty. They were in no doubt that Canada was and should be a ‘British nation’, and wanted the (white) Empire to become a ‘league of British states’, free and equal but bound together by racial sympathy and mutual interest. This sectional view of Canadian identity was anathema in Quebec (as Bourassa pointed out to Dafoe),93 and, as Dafoe himself acknowledged, this ‘national’ idea had yet to supplant the imperial sentiment of which King was so nervous. Indeed, for all its ambivalence, King's careful formula proved surprisingly durable. His Conservative opponent, Arthur Meighen, had already asserted Canada's particular interests and her special ties with the United States in the argument over renewing the Anglo-Japanese alliance in 1921. Borden's closest adviser, the diplomat-lawyer Loring Christie, abandoned in the early 1920s the old Borden policy of a common foreign policy. Like Dafoe and Sifton, he was alarmed by the signs that Britain had turned away from her imperial destiny to plunge into the quagmire of European diplomacy.94 To be true to the Empire was not to follow the same route. Meighen himself, in despair at reviving his electoral fortunes without support in Quebec, had conceded by 1925 that no Canadian government should follow Britain into war without holding and winning a general election. An uneasy consensus had been reached.


In Australia and New Zealand, by contrast, there was little enthusiasm for greater detachment in imperial relations: quite the reverse. Radical opinion in the Pacific dominions disliked the expansion of ‘tropical empire’ over non-white peoples and distrusted the motives that lay behind it – for similar reasons to radicals in Britain. It resented the influence of the City of London and its power to frustrate the political aims of Labour in the state governments. But, despite widespread industrial unrest at the end of the war, radicalism and the Labour party made little headway in the post-war decade.95 The commemoration of the war was conservative and imperial-minded: Gallipoli as Britain's blunder and Australia's sacrifice was a much later mythology.96 Australian leaders were more sympathetic than Canadian leaders to Britain's Middle Eastern travails: Australia's interest in the Suez Canal was second to none. Where differences arose between Australia and Britain, it was over Australia's claim to the German ex-colonies in the South Pacific and the thorny issue of the Anglo-Japanese alliance. Here there was a passionate Australian (and New Zealand) belief that renewing the alliance was the vital means of restraining Japan from imperial aggression. But, against Canadian opposition, and (more cogently) the urgency of reaching an Anglo-American accord, the Pacific dominions protested in vain.

Australian and New Zealand dissatisfaction arose not from a fear of imperial commitments but from what they saw as London's indifference to imperial interests. King saw a plot to make Canada party to a common imperial policy. Hughes and Massey (more realistically) resented their exclusion from the imperial decisions that mattered. At the peace conference in Paris, Hughes fought a stubborn battle to annex Germany's conquered colonies in the South Pacific not hold them as mandates under the League of Nations – a struggle that brought him into conflict with both the British government and President Wilson.97 The ‘class C’ mandate (envisaging permanent trusteeship) was the compromise outcome. In the furious arguments over the Japanese alliance and at the Washington Conference in 1921–2, the Australian government saw further proof that its vital interests received little attention in British diplomacy. For Hughes, the last straw was the crisis at Chanak in September 1922 and the conference that followed at Lausanne. Unlike Canada and South Africa, he reminded London, Australia and New Zealand had answered Churchill's call for help and promised troops if they were needed to defend the Dardanelles against the resurgent Turks. But neither dominion was represented at the conference. Hughes’ rage knew no bounds. ‘The habit of asking Australia to agree to things when they are done and cannot be undone’, he told the Bonar Law cabinet,

is one which will wreck the Empire if persisted in. You have already seen Canada and South Africa standing aloof on the plea that they had not been consulted. I have pointed out…many times that what is wanted, and what we are entitled to, is a real share in moulding foreign and Imperial policy. In foreign affairs the Empire must speak with one voice.98

Hughes’ frustration was the greater because, as he readily admitted, ‘there is only one course open to us in practice and that is to follow Britain’.99 Unless Australia spoke as part of the Empire, he told the Australian parliament in September 1921, its voice ‘would be lost across the waste of waters’. ‘But when Australia speaks as part of the British Empire

[w]ith its 500,000,000 of people, its mighty navy, its flag on every sea, its strongholds on every continent, its power and glory shining and splendid, then she speaks in…tones that are heard and heeded…With our hands on the lever of Empire, we move the world, but casting this aside we are shorn of our strength and count for little or nothing.100

The uncompromising intensity of Hughes’ Britannic nationalism was a measure of this brutal realism about Australia's prospects in isolated independence.

Hughes’ language was characteristically blunt. But his suave successor as prime minister, Stanley Bruce, was just as unequivocal. ‘It is useless for anyone to maintain that if we were an independent nation, with no connection with the British Empire, we should be in a position to protect ourselves’, was his message in 1924.101 The reason was simple. ‘We have the most wonderful unprotected white man's country in the world’: defending it relied on British help. The fierce rhetoric of Hughes and Bruce, and the similar attitude in New Zealand, showed that the war had quite different effects in the South Pacific from those it had set off in Canada and (as we shall see) in South Africa. In Australia, the issue of conscription had been deeply divisive. But neither there nor in New Zealand did it result in an ethnic fissure. Instead, it strongly reinforced the pre-war sense of racial and strategic vulnerability. The signs of China's resurgence in the ‘May the Fourth’ movement, and the visible evidence of Japanese sea-power and imperial ambition, were easily converted into the racial nightmare of ‘teeming millions’ of Asian immigrants that an Australia without British support might be forced to admit. It was this anxiety, and the fear that the post-war recession might drive Australia back to the dark days of the 1890s, that led post-war governments to call for even closer economic ties with Britain. What Australia needed, said Bruce, was ‘men, money and markets’: Britain must supply them. The limitless possibilities of Australian development became an article of faith. When the geographer Griffith Taylor sought to puncture inflated claims by pointing out that Australia could support at best 20 million people at an American standard, he found it wiser to pursue his career in another dominion.102 The population (a mere six million in 1925) must be boosted; the interior colonised. The same impulse was felt among writers and artists.103 Coming to terms with Australia's landscape, love and fear of the Australian ‘bush’, and adaptation to the Australian environment became the hallmarks of ‘Australianness’: a creole identity not in conflict with ‘Britishness’ but a supercharged, perhaps superior, version of the north European original.

Indeed, Hughes and Bruce reasserted the British character of the Australian Commonwealth in terms inconceivable to a Canadian premier – at least one who wanted some votes in Quebec. ‘We are all of the same race and speak the same tongue in the same way’, said Hughes, ‘we are more British than the people of Great Britain…[O]ur great destiny is to hold this continent in trust for those of our race who come after.’104 ‘It is…essential to remember’, insisted Bruce, ‘that the British Empire is one great nation…the British people represent one nation and not many nations as some have endeavoured to suggest.’105 Of course, not all Australian opinion was convinced by this heavy stress on imperial ties. Too much deference to Britain ran athwart the claim that Australian society was stronger, fairer, more democratic and more manly than the parent stock. Self-reliance and the cultivation of ‘Australian sentiment’ was how Labour preferred to lay the emphasis. It wanted to cut away some of the outward signs of subordinate status: the judicial appeal to London and the appointment of state governors by the Crown. But these were superficial. The defence of ‘White Australia’ remained the foremost plank on the party platform. Labour was as committed as Bruce's government to the urgent need for economic development, and accepted that large-scale immigration was the necessary price.106 But, when immigrants flocked in from Southern Europe, it was quick to denounce them for taking jobs ‘from British workmen’107 and forced a government ban on employing ‘foreigners’. For Hughes and Bruce, then, there was little to fear at home from a close association with imperial policy, as long as it reflected their views and protected their interests. Their real concern was not that the London government would impose its wishes, but that those wishes were becoming too selfishly narrow. Like Christie, and other old followers of Borden, they were alarmed by the European turn in British policy. The air defence of Britain (against a putative threat from France) might consume the resources needed for a stronger presence in the Pacific and at Singapore, Bruce warned in 1924. If post-war Britain with its straitened finances chose to protect the Home Islands at the expense of ‘outlying parts’, Australia would be in peril.108It was not declarations of dominion freedom that were needed (or so he might have said), but a clear reminder to opinion in Britain of the global scope of imperial interests.

South Africa

South Africa was not a ‘British nation’. Nor was there a common feeling of South Africanness, even among its white minority. Of the four main overseas dominions, it had been the last to receive the full measure of self-government. Among the whites (a more fluid category than it became under apartheid after 1948) there was an Afrikaner majority but more than half a million ‘English’ – English speakers mostly of British origin. Afrikaans (a patois of Dutch) was still only a language in the making, and well-educated Afrikaners were as likely to use English as Dutch in business or professional life.109 Indeed, there were many Afrikaners in the propertied and professional classes for whom the parliamentary government introduced to the Cape in the 1870s was the optimal combination of order and liberty. There a property-based franchise and the wide degree of local autonomy made symbolic allegiance to the British monarch at worst unobjectionable, at best a buttress of social stability and the racial order. When ‘responsible government’ was extended to the rest of the country after the South African War of 1899–1902 (but with manhood suffrage for whites and no votes for blacks), this pragmatic loyalty was adopted by many Afrikaners in the old republics. It was futile to break up the Union of 1910 to revive the pre-war states. To drag the whole country into secession from the Empire as the ‘South African Republic’ would mean imperial intervention and a third Boer War. Worse still, it would set off a civil war among the whites. In a sub-continent, where blacks outnumbered whites by nearly four to one, and where memories of war's catastrophic impact were all too recent, this was a desperate option.

Nevertheless, the First World War had placed a major strain on the pragmatic compromise that Botha embodied. Although the 1914–15 rebellion had collapsed, Afrikaner support for the National party established by General Barry Hertzog in 1913 was markedly stronger by the end of the war. Much Afrikaner opinion was bitterly resentful of South Africa's involvement in an ‘English’ war and regarded a British imperial triumph with foreboding. The rise of republicanism – which stood for an Afrikaner state outside the Empire – alarmed the English politicians in South Africa. When Smuts returned from Europe on Botha's death to take up the premiership, he found it hard to bend the older man's bow. He lacked Botha's canny sense of Afrikaner feeling or the charm (some alleged more material inducements) through which he kept his followers loyal. In the first post-war election in 1920, Smuts’ South Africa Party emerged neck and neck with the Nationalists, driving him towards fusion with the Unionists (the old party of Rhodes, and led by his political and financial legatees) to keep his hold on power.

Had politics in South Africa been solely a matter of the antagonism between the white communities, they would at least have been simple. The republican option repelled the English but also many Afrikaners who feared the turbulence it threatened. So long as that was true, the British connection was safe. But, after 1918, Afrikaner opinion became more susceptible to the appeal of nationalism not less, as the irritations of wartime were replaced by new sources of grievance. The main reason lay in the rising fear of the educated class – clerics (predikants), teachers, (a handful of) academics, lawyers and journalists – that the deepening poverty among rural whites (almost all Afrikaners) would destroy the cohesion of the Afrikaner people. By 1921, the numbers of ‘poor whites’ (the term was coined in 1906 for those neither skilled nor semi-skilled) was estimated at over 150,000 – perhaps one-fifth of the Afrikaner community.110 Over much of South Africa, the land was too poor or too dry to support much more than subsistence farming, and after 1920 the problem was made worse by the huge fall in agricultural prices from the artificial heights of the First World War.111 To the Afrikaner elite, three outcomes of almost equal horror seemed all too likely. The poor whites might be seduced by the appeal of socialism or communism and exchange their ethnic loyalty for one based on class. If they drifted to the towns, they might be absorbed by the English culture that was dominant there. Or they might lapse into ‘barbarism’ by adopting the living standards of the blacks and intermarrying with them. It was this double crisis – the threatened loss of both Afrikaner and white identity in so large a fraction of the Afrikaner people – that gave Afrikaner nationalism its urgency and sharpened the edge of its racial message: explicitly against imperialism and its Doppelganger capitalism; implicitly against the silent threat of the black majority.

Social rather than ethnic antagonism was also a problem for those English politicians who counted on Britannic solidarity to keep Afrikaner republicanism at bay and force Afrikaner ‘moderates’ to accept the permanence of the British connection. Class conflict between English (often British immigrant) mineworkers and the mining interest whose influence was strong in the Unionist party had been a feature of pre-war politics and had led to the rise of the Labour party on the Rand. After 1918, these intra-English class tensions erupted spectacularly. Post-war depression was the immediate cause. South African gold producers were trapped between the fixed price of gold and the rising costs of drilling ever deeper into the gold-bearing reef beneath Johannesburg. They longed to cut their costs by substituting cheap black labour for the costlier white men they were forced to employ by the strength of (white) organised labour on the Rand. The surge in prices during wartime (when gold's price was still fixed) made matters worse, and when the temporary relief that came with the fall in the post-war value of the pound against gold was reversed by early 1922, and depression led to declining production, the crisis could not be postponed. When the mineowners suspended the old ratio of white to black workers, a strike broke out. In early March 1922, it became a general strike on the Rand, and then an armed insurrection as some of the strikers declared a socialist republic. Smuts’ reaction was uncompromising. Troops were sent in, and in several days of fighting over 200 people were killed. The strike was crushed. The number of white miners was cut by over 3,000 and real wages fell. The gold industry returned to profit.112But Smuts’ identification with the mining interest was to cost him dear. Three revolutions in a few short years, sighed one English politician, was ‘too much for any country’.113

Smuts was committed wholeheartedly to empire membership. He had commanded the imperial force in the East African campaign. He had represented South Africa at the Imperial Conferences of 1917 and 1918. By the last year of the war, he had become one of the most powerful figures in Lloyd George's government. He played a leading part in the planning for a league of nations and in the diplomacy of peacemaking at Paris in 1919. In a secret mission in 1921, he had pressed on the leaders of Sinn Fein the argument for accepting dominion status and not holding out for secession and an Irish republic.114 Yet Smuts had also been one of the loudest voices demanding British recognition of the dominions’ equality: in constitutional status and external policy. And, like other dominion leaders, he thought that Britain's involvement in post-war Europe would weaken her claims on dominion support. It was vital, he urged, that Britain renounce secret diplomacy for open covenants. Then the dominions would know what commitments they faced.115 Smuts knew very well that, whatever the guise, South African involvement with Britain's global interests was deeply unpopular with many Afrikaners. The ‘bulk’ of the Dutch people, he told a friend in Britain, were republicans.116 But he was convinced that a united British Empire within the League of Nations was the key to world order in an age of great uncertainty; and that survival as a ‘white man's country’ (itself far from certain in the 1920s) made empire membership essential for South Africa. In a conscious echo of Rhodes’ programme, Smuts looked forward to a chain of white states stretching north to Kenya – ‘A great white Africa along the eastern backbone, with railway and road communications connecting north and south’ – under South African influence and sooner or later as part of the South African Union. Here was the promise of South Africa's greatness, and her commercial prosperity (as the sub-metropole of this settler Africa) and the best guarantee against a colonial policy that favoured Indian traders or native (i.e. African) chiefs.117 But this long game of South Africa's future made it all the more vital to have influence in London, to be a partner in African empire, and to keep the loyalty of the South African English and the British settlers to the north of the Limpopo.

In 1921, Smuts had turned the tables on his nationalist opponents. Post-war prosperity and the reaction of English voters against republicanism gave him and his ex-Unionist allies a clear election victory over both Hertzog and the Labour party. The electorate had given a ‘decisive answer’ on the question of secession, said Smuts.118 After that, almost everything went wrong. Depression, the bloodshed on the Rand and the continuing fear of a crisis in Europe damaged Smuts’ reputation. In 1923, to Smuts’ great chagrin, the white settlers in Southern Rhodesia (where rule by the British South Africa Company was about to end) voted for a separate future as a self-governing colony rather than join the South African Union. In the general election of June 1924, although its popular vote held up well, the South Africa party lost badly to the National and Labour parties united in a pact.119 Smuts was hated by Afrikaners and many British, Fitzpatrick told Lord Milner.120 ‘Intense unreasoning racialism (i.e. towards the English) and class hatred and communism’, was how he explained the defeat to Amery.121 But the 1924 election was not the prelude to South African secession.

Hertzog and his able lieutenant, Daniel François Malan (a predikant turned newspaper editor), had been the champions of republicanism. But, with the defeat of 1921 and the social crisis within the Afrikaner community, their priorities shifted. To tackle the problem of ‘poor whites’, if need be by a ‘colour bar’ in employment, to safeguard the cultural unity of the Afrikaner people and to promote Afrikaans as a national language (the 1910 constitution provided for English and Dutch) laid a premium on power not principled opposition. Hertzog knew that without Labour party support he had little hope of defeating Smuts, and that many of Labour's English voters would desert it if it allied with him on a republican ticket. Instead, he was able to trade on the widespread fear of white unemployment and the ‘ignorant panic’122 over black competition. His greatest fear was that Smuts would beat him by an appeal to the Britannic sentiments of the English minority. ‘Smuts het net een kans’, he told Malan in November 1923, ‘en dit is nogmaals ’n khaki electie’ – Smuts had one last chance, a khaki election.123 What Hertzog wanted, when once in power, was the same formal status for which Smuts had pressed: constitutional equality within the Empire, as the substance (or so he claimed) if not the form of republican independence. By an ironic twist, the need to safeguard a white South Africa – the same ultimate goal as Smuts – had led him to accept, for the time being at least, the same constraints and the same solution.

The dominions and Ireland

Hertzog's opportunity came with the Imperial Conference in 1926. At the previous post-war conferences in 1921 and 1923, the dominion premiers showed no appetite for the constitutional debate envisaged in 1918. Hertzog gave warning of his intention, and the British government planned its tactics carefully. A. J. (now Lord) Balfour, who chaired the committee of British and dominion ministers set up at the conference to report on ‘inter-imperial relations’, had already signalled his willingness to concede the principle of equal status to the white dominions.124 When Hertzog presented his draft, in which the dominions were described as ‘independent states’,125 it was not the principle to which the British ministers objected but the wording. They were ready to concede the dominions’ right to exercise external as much as internal autonomy – the right to conduct their own foreign policy – but resisted ‘independence’ as implying the lapse of their Empire membership. (Mackenzie King also opposed ‘independence’ as an American usage that would be badly received in English Canada.) After a blizzard of drafts, Balfour produced a formula of almost theological intricacy in which the central concession of the dominions’ equal constitutional status (and their implicit right of secession) was carefully balanced against their free and willing recognition of empire membership. In a sunburst of good will it was accepted by all.

The effect of this pronouncement was twofold. It gave a meaning to dominionhood that was flexible enough to embrace all the dominions’ varied relationships with Britain. The risk of a division between the dominions themselves was averted. Secondly (and consequentially), it reinvented the bilateral connection between Britain and the different dominions as an intimate form of international association whose terms of membership (‘free association’) were very attractive to small states in an age of collective insecurity. ‘The British Empire’, said Balfour's version, ‘depends essentially…on positive ideals. Free institutions are its lifeblood. Free cooperation is its instrument. Peace, security, and progress are among its ideals.’ This appealed to a wide segment of opinion in all the dominions for whom the dangers of isolation and diplomatic ‘weightlessness’ were as important as Britannic loyalty, if not more so. Balfour's formula acknowledged that the real ties that would hold the dominions to Britain were the informal ties of sentiment or self-interest. Its acceptance by the least Britannic of the dominions, South Africa and the Irish Free State, showed that for one reason or the other exit from the British world-system had as yet little appeal.

Balfour's motive is clear enough. He wanted to discredit the ‘small but obstinate minority who…persistently advocate the break-up of the Empire’.126 Free association would pull the rug out from beneath the secessionists. Austen Chamberlain, the Foreign Secretary, may have hoped that he would gain his reward in the dominions’ diplomatic sympathy: indeed, in the defence discussions that followed, all except the Irish Free State said that they would come to Britain's aid if ever necessary.127 Balfour, Chamberlain and Lord Birkenhead (the Secretary of State for India) bundled Amery, the Dominions Secretary, along with them. He was a political lightweight. But the three senior ministers may have had another reason for wanting an amicable settlement. All three, especially Birkenhead and Chamberlain, had been deeply involved in the Anglo-Irish treaty of December 1921. They had the strongest motive for avoiding confrontation with the Irish Free State government and rousing ‘die-hardism’ from its slumbers on the Tory backbenches. Nor could they be sure that too little flexibility at the conference might not damage the pro-Treaty government in Dublin and pave a path to power for its republican and secessionist enemies.

Indeed, of all the dominions, the Irish Free State was the one that British ministers watched most nervously.128 Its assimilation to the dominion ‘model’ was more a hope than an expectation. Its ‘Britannic garrison’ after partition was far smaller than South Africa's. For all the practical limits to linguistic independence, its cultural revolt against Englishness was more vehement than anything seen in the other dominions. Alone of the dominions, it had won self-government in a violent insurrection against British rule. Alone among the dominions, its right to self-rule was limited by treaty. In the war of independence (1919–21), Sinn Fein declared an Irish Republic, and its candidates who were successful in the United Kingdom general election of December 1918 (but refused to take their seats at Westminster) met as a separate Irish parliament, the Dail Eireann. After eighteen months of guerrilla warfare, terrorism and reprisal had produced a stalemate truce in July 1921, and a treaty settlement was hammered out in London between the Lloyd George government and a Sinn Fein delegation. It gave the twenty-six counties of southern Ireland ‘Canadian’ status as a self-governing dominion, but rejected the demand for an Irish republic outside the Empire and insisted on an oath of allegiance to the King by those taking office or sitting in the Dail. The possibility of a united Ireland – if Northern Ireland agreed – or of repartition on terms more generous to the South was held open. By a narrow majority, the Dail upheld the treaty proposals. But the Sinn Fein government split. De Valera, president of the 1919 republic, denounced the oath of allegiance (though he was willing to recognise the King as the head of the Empire). Much of the Irish Republican Army in the south and west rebelled against a civilian regime whose treaty-based constitution was at odds with the claim that the citizen in arms was the true embodiment of the Irish nation – and which threatened to end the free rein that the ‘flying columns’ enjoyed.129 It took a bloody civil war, with a death-toll heavier than in the Anglo-Irish struggle, to impose the authority of the ‘treatyites’ and the Free State government.

The fate of the treaty was watched in London with great anxiety. The risk of embroiling the North – where Catholic nationalists were harassed by Protestant paramilitaries – seemed high. Michael Collins, the charismatic leader of the IRA, who led the Free State army in the civil war, was suspected of duplicity: few tears were shed in London when he was ambushed and murdered by the anti-treaty forces in August 1922.130 For British leaders, the success of the Free State government was critical if Ireland was to escape a further round of turmoil and then a further round of imperial crisis. Partly for that reason, they acquiesced in a quasi-republican constitution in which authority was derived from ‘the people of Ireland’ (not the king-in-parliament).131 When the North rejected a united Ireland and the boundary settlement left the frontier unchanged, they sweetened the pill for the Dublin government by financial concessions. The Free State government won a popular mandate, but the balance seemed fine. The army mutiny of 1924, the continued threat of IRA violence and the return of the anti-treatyites (as Fianna Fail) to the Dail, made its tenure seem fragile. The danger that it would repudiate the treaty and declare a republic could not be ruled out.132

British leaders may have exaggerated the risk. Despite the hangover of republican violence, the Free State government represented a powerful body of Irish opinion that preferred free trade (with Britain) to isolation and autarky,133 and accepted that, without the association with Britain, the Irish voice in international affairs would be embarrassingly faint.134 To the larger farmers and local businessmen who formed the backbone of the old Irish party before 1914, and supported the treatyite Cumann na nGaedheal, overthrowing the constitution was a menace to order. For the champions of Catholic conservatism, the most influential ideology in the new state,135 republicanism was suspect for its atheism and socialism. Cosgrave and O’Higgins, his dynamic deputy, were determined to restore an ordered society of strong institutions, lawful authority and firm discipline.136 Their aim was not to break the treaty, but to free themselves from the surviving relics of Ireland's subordination to Britain – in part to disarm their Fianna Fail opponents. This was why at the Imperial Conference they were quick to follow Hertzog with a list of detailed ‘anomalies’ in dominion status, and why O’Higgins insisted that Ireland's separate status should be formally marked in the royal title. When the ‘O’Higgins comma’ was inserted, the king was no longer ‘King of Great Britain and Ireland’ and the overseas dominions, but ‘King of Great Britain, Ireland, and the British Dominions’. To Birkenhead, one of the signatories of the Anglo-Irish treaty, the need to meet the Irish leaders over their ‘tiresome points’137 and protect a settlement that is ‘working better than our most extravagant hopes’ was unarguable. In Ireland, more than anywhere else, what mattered most was to make cooperation a habit and ingrain the constitutionalist outlook that was its greatest ally.

Like Hertzog (who returned in triumph to South Africa), the Irish leaders found merit in the constitutional experiment codified by the conference. They had equal status and external autonomy. In return, they accepted the Crown (with some ambiguity) as their head of state and the symbol of their membership of the ‘Empire-Commonwealth’ – a term just creeping into use. Like the other dominions, they recognised the British system as the magnetic pole of their external relations. Like them, they had much to lose from an open break. For the moment, it seemed that Ireland might be shaped to the mould of an ‘imperial nation’, to become another Canada in substance as well as form. The stresses of the next decade would settle the question.

The Empire at home

After 1918, there was good reason to doubt whether the vast world-system the late Victorians had assembled would command the support of British society at home. A positive view of its costs and risks sprang from the distinctive complex of ideology and politics in late-Victorian Britain. The late Victorians had been loyal to laissez-faire economics. They accepted the logic of free trade and the gold standard and regarded with equanimity their ever-growing dependence on foreign food, foreign trade and a foreign income from investments. They acknowledged the force of the geopolitical corollary. That Britain must be a global power to defend the sphere of free commerce and guard its long lines of maritime transport was argued over in detail but rarely disputed in principle. The electorate that sanctioned this globe-wide imperialism excluded all women and more than one-third of adult men. No party dedicated to the ideas of socialism or the sectional interests of the working class could win a majority in parliament. The electorate's antipathy to Irish nationalism, partly on sectarian grounds, made it amenable to arguments for coercion elsewhere: unionism at home helped underwrite imperialism abroad. And, although some of its articles had come under attack in Edwardian politics – in the struggle over tariff reform and Irish Home Rule – the prime assumptions of this ‘liberal imperialism’ went largely unchallenged until the First World War.

In the new landscape of post-war economics and politics, this late-Victorian consensus looked less secure. Economic discontent was real enough in late-Victorian society and industrial militancy had been a striking feature of the pre-war decade. But their political impact had been blunted by the general prosperity of skilled workers and by a franchise that excluded many of those most vulnerable to economic misfortune – the army of unskilled and casual labour. By the end of 1920, these pre-war conditions no longer held good. The post-war depression brought high unemployment to skilled workers as well as unskilled. It affected those organised in trade unions (a much larger number than before the war) as well as those who were not. But the most important change was that all men affected by the slump in trade now had the vote since adult males over twenty-one, as well as some women, had been enfranchised in the reform Act of 1918. The result politically was profoundly unsettling. A prolonged depression would mean an alienated class, excluded by poverty, but included by politics. It would be empowered by the franchise against a social system from which it had nothing to gain. Not surprisingly, fear of a ‘socialism’ (a vaguely defined creed) that would be swept into power by a working-class electorate, haunted the politicians of the older parties.138 For there seemed no doubt about who would be the beneficiary of the two new facts of British politics: the great pool of working-class discontent and the huge new electorate (three times as big as the old) with no tradition of loyalty to either Liberals or Conservatives. In the excitable climate bred by the Russian revolution and industrial confrontation in Britain – at its tensest in 1921 – it was easy to credit the Labour party with the extremist views from which its leaders recoiled. Pacifism, ‘bolshevik’ sympathies, and antipathy to colonial rule, especially in India, seemed synonymous with socialism.

These fears (in some quarters, hopes) turned out to be exaggerated. It was industrial labour, not political Labour, that proved the real threat to the British world-system. It rejected the sacrifices on which the revival of London's commercial empire was supposed to depend. At the end of the war, it was widely agreed by expert opinion that British prosperity meant restoring the commercial conditions that had ruled in 1914. London must resume its place as the world's greatest banker, lender and market-place. The gold standard must be revived as a self-regulating mechanism of monetary control and the guarantee of sterling's worth as the global currency. British debts must be repaid. British exports must recover lost markets and win new ones to ease the strain on the balance of payments and help renew the flow of outward investment. At government level, this programme meant the stringent control of public expenditure. But its social and industrial meaning was much more drastic. If British exports were to be competitive, British costs had to fall. The large gains in real income conceded in the war and its inflationary aftermath would have to be clawed back. By Keynes’ estimate, while the cost of living had risen by 60 per cent, the combined effect of higher wages and shorter hours had more than doubled real wages.139

The fierce deflation of 1920–1 was aimed in part at this objective. But its results were not what its authors intended. The numbers of unemployed rose rapidly from 700,000 at the end of 1920 to over two million by mid-1921 and remained above 1.2 million for the rest of the decade. But it proved impossible to push down the wages of those in work. Instead, the sharp fall in prices that deflation produced boosted their real incomes still further, by some 13 per cent between 1919 and 1922, on top of the wartime rise.140In the climate of industrial militancy and electoral uncertainty that dominated the early 1920s, imposing a wholesale reduction of wages was out of the question. It would have meant economic controls as draconian as in wartime, repellent alike to capital and labour, and hastily scrapped in 1919. In a tacit social and political bargain, those in work kept the real income gains of 1914–22 (the exception were the miners).141 The unintended victims were the unemployed.

Worker resistance to cuts in real wages had a real significance for the part Britain played in her imperial system. It made the price of the return to gold in 1925 – the sine qua non of commercial empire – uncomfortably high, and cut down the benefits it was supposed to bring. High interest rates, a fragile pound and a restricted stream of investment abroad were the penalty for setting the gold value of sterling at a level designed to compete with the dollar, but without the fall in industrial costs that was needed to make British exports competitive. In the crucial phase of economic adjustment, industrial labour had refused to give up what it had gained since 1914, and could not be coerced into doing so. It could not be bent to the purpose of a revived commercial empire. Its resistance to the ‘logic’ of bankers and businessmen could be seen, indeed, as an instinctive form of metropolitan ‘isolationism’, a refusal to bow to the harsh demands of the international economy. It set the limits to the post-war promise of the British world-system.

This was the most potent (if least conscious) act of worker ‘anti-imperialism’. At the same time, the rapid growth of a mass constituency for the Labour party (Labour vote, 1910: 371,722; 1918: 2,385,472; 1922: 4,241,383; 1923: 4,438,508; 1924: 5,489,077) lent added weight to radical opinion in imperial matters. Before 1914, critics of empire had attacked the cost of imperial wars, the threat to peace of imperial rivalry, the authoritarian trend of colonial rule and the commercial exploitation of indigenous peoples. But their voice had been muffled by political concession in India and South Africa, the diplomatic settlement of colonial disputes (especially with France) and the domestic (rather than imperial) threat posed by the new German navy. Even J. A. Hobson, the critic-in-chief of British imperialism, had come to concede the beneficent effects of international trade.142 But, as the war dragged on, he revived (in Democracy after the War (1917)) the old claim that imperial antagonism was the real cause of conflict. With militarism enthroned at the heart of government, and imperialism (in the person of Milner) at its elbow, an Allied victory would mean the triumph of reaction. The ‘imperialist’ project, checked since 1906, would resume its course. An imperial tariff, territorial expansion and the economic exploitation of Afro-Asian peoples would destroy free trade at home, cut down living standards and corrode the tradition of political liberty. The best defence was a league of nations, ‘international government’ and the careful protection of indigenous cultures against the social damage of enforced industrialism. In the last year of the war, this radical programme received a powerful boost. Official endorsement of the idea of a league, the publication of Woodrow Wilson's Fourteen Points and the emergence of Labour (which Hobson joined in 1918) as a mass-based party, strengthened its claim on public attention.

Hobson's warnings were echoed by the band of writers who made up Labour's ‘intelligence branch’ in imperial policy: Leonard Woolf, whose Empire and Commerce in Africa (1920) denounced colonial rule as a licence to rob; Sydney Olivier, whose The League of Nations and Primitive Peoples (1918) pressed the case for international trusteeship; and E. D. Morel, veteran of the Congo campaign, who published The Black Man's Burden in 1920. Their critical view of the pre-war world (Olivier believed that the humanitarian traditions of colonial rule had been corrupted by business after 1890)143 chimed with a larger body of ‘middle opinion’ disillusioned by political, diplomatic and economic failure in the aftermath of the war. A new commitment to the reconstruction of Europe was urged by Alfred Zimmern in Europe in Convalescence (1922). The destructive impact of the reparations demand was condemned by J. M. Keynes in The Economic Consequences of the Peace (1920). The hidden commitments and secret promises that had sheltered ‘old diplomacy’ from public opinion were denounced in Lowes Dickinson's The International Anarchy in 1926. Such polemics by themselves meant little. But the electoral support for the Liberals and Labour (in 1923, they commanded together nearly nine million votes to the Conservatives’ five and a half) suggested that a large body of public opinion took a similar ‘neo-Gladstonian’ view of Britain's overseas interests. The pre-war version of imperial diplomacy (if not already discredited) had been made redundant by victory. Peaceful cooperation through an international concert, not an empire in arms, was the need of the moment. The predatory instincts of colonial settlers and businessmen should be carefully restrained before they whipped up revolt, or provoked a fresh clash between colonial powers. A new bond of sympathy must be forged with the aspirations of colonial peoples, when they embraced the values of the Liberal state.

Of course, none of this implied the repudiation of power. The Labour leadership had refused any truck with Gandhian agitation in 1920, and insisted in its first (minority) government in 1924 on strict adherence to the Montford constitution.144 The champions of trusteeship insisted that African self-government lay far in the future. The effect was more subtle. The liberal mood of the early 1920s inspired a more thoughtful defence of colonial rule and a more critical view of its actual practice. The ex-proconsul, Lord Lugard, whose sense of publicity was unusually sharp (his wife had been on the staff of The Times) urged a ‘dual mandate’ in tropical Africa. Economic development brought reciprocal benefits to Europeans and Africans. The task of government was to balance the interests of international trade and its indigenous subjects.145 Amid the new stress on enlightened trusteeship and non-interference with ‘primitive’ peoples, ‘indirect rule’ acquired additional merit. A neo-traditional regime based on customary law and chiefly rule became the settled dogma of African policy. In the new wave of paternalism, humanitarian causes, including education and anti-slavery, attracted fresh attention if not more resources. Extending self-government (however gradually) to the non-white colonies meant that cultural sympathy across racial lines had become more urgent. In E. M. Forster's A Passage to India (1924), the stilted parochialism of ‘Anglo-India’ and its cold rejection of educated Indians was held up to ridicule and proclaimed as a warning.

The strongest emotion in this age of flux was the fear of commitments and the urge to save. This was hard to square with the leftover business of the First World War. The political turbulence of the post-war years arose from this conflict. The Lloyd George government faced a huge agenda: in Europe, at home, and in Ireland as well as in the imperial sphere in India, Egypt and the Middle East. On almost every issue it faced fierce dissent, some of the bitterest from its backbench supporters in the House of Commons. Over Ireland particularly, Lloyd George's readiness to negotiate with Sinn Fein (from July 1921) enraged the ‘die-hards’ in the Conservative party. Signs of compromise in the treatment of ‘extremists’ in India and Egypt (like the failure to arrest Gandhi) strengthened die-hard claims of the ‘empire in danger’. It was Lloyd George's misfortune that some of the credit he gained from the Irish treaty in December 1921 was devalued by the civil war between the Irish ‘treatyites’ and ‘anti-treatyites’. But the real cause of his downfall in October 1922 was the lack of economic recovery at home and the sense of over-commitment abroad. Working-class discontent over unemployment and pay was matched by middle-class anger at the high rate of taxation (income tax had risen to five shillings (25 per cent) in the pound in 1917, and was at six shillings (30 per cent) throughout 1919–22). Government ‘waste’ became the target of a public campaign and had to be appeased by a formal enquiry (the ‘Geddes axe’). The military cost of British control in Iraq (partly perhaps because Winston Churchill, a coalition Liberal, was the minister responsible) drew especially bitter complaint from the Conservative backbenches, on whose support the coalition cabinet was overwhelmingly dependent. It was the lightning rod for unease over a Middle East policy whose aims seemed obscure and whose outcome uncertain. When the British force at Chanak in the Dardanelles faced the Turkish army advancing north from Izmir in September 1922, and military conflict seemed likely, two streams of discontent were united. Whatever the merits of its case – the strategic argument for preventing the Turks from recovering the Straits – the coalition government had risked a new war in the Middle East for which public opinion was quite unprepared.146 When Bonar Law (who had favoured coalition in 1918 and been Lloyd George's loyal lieutenant until 1921) came out of retirement to lead the Conservative revolt against continued partnership with the Lloyd George Liberals, he could draw on multiple sources of Tory resentment. But it was the over-extension of British power that he chose to emphasise. Britain, he said in a famous phrase, ‘cannot alone act as the policeman of the world’.147

The fall of Lloyd George opened two more years of party manoeuvre, induced in the main by economic uncertainty. The Conservative ministry of Bonar Law (until May 1923) and Baldwin was dominated by the setback to European recovery, by the need to cut spending and by the fear that Lloyd George would build a new coalition against its economic failure. Baldwin's sudden leap to protection was intended to offer a definite programme and unite his party round the cause to which much of it was already loyal. It was an electoral disaster. In December 1923, the Conservative vote held up well (at 38.1 per cent compared with 38.2 per cent in November 1922), but Baldwin was swept away by the Free Trade opposition. But the result was inconclusive. A minority Labour government took power with Liberal support in January 1924. Neither circumstance, inclination, nor, perhaps, talent, could make Ramsay MacDonald a second Gladstone.148 No great centre-left party emerged in a grand realignment of political forces. When MacDonald was pulled down by the petty scandal of the ‘Campbell case’, and by public suspicion of his party's communist ties (the Zinoviev letter), it was Baldwinite Conservatism that won the high ground electorally. In October 1924, it gained a decisive victory. With the long-awaited revival of European prosperity, and the return in Britain of a ‘social peace’,149 the domestic instability of the post-war years seemed a thing of the past.

Yet it had left its mark on the British role in their imperial system. Baldwin's aim was a broad-based party that would annex the centre in British politics. He renounced protection and installed a free trade Chancellor (Winston Churchill). He embraced ‘economy’ in defence, partly to fund the rising cost of welfare expenditure. He had learnt from Chanak to fear confrontation abroad as a hostage to fortune. He and other leading Conservatives accepted much of the ‘liberal’ outlook on international affairs, as a rough approximation to informed opinion and as a useful guide to the post-war world. As a result, the imperial attitudes of the post-war years seem curiously tepid. At another time, high unemployment, a vast new electorate and the nationalist revolts against imperial rule might have prompted the embrace of a jingo populism. Indeed, tariff reform at home, ‘splendid isolation’ abroad, opening up the ‘undeveloped estates’, and a firm way with ‘agitators’, all had their advocates in Conservative ranks. But the overwhelming need was to bind the new political nation to an economic order (capitalism) it had no reason to like. An attack on free trade (as Baldwin discovered) would be deeply resented by the new constituency. Pre-war-style thinking on imperial defence – as if Britain were still surrounded by rival world empires – was (or seemed) obsolete at a time when the reconciliation of Europe was the most immediate need and competing imperialisms at an unusually low ebb. Coercive tactics against colonial (or semi-colonial) dissidents in the Empire, Egypt, Iraq or China could not be ruled out. But their likely cost, and the fear that they would lead to political extremism and guerrilla war (the ‘Irish syndrome’ frequently invoked after 1921) gave an added premium to emollient policies. To a much greater extent than before 1914, the demands of empire on society at home were to be monitored closely and reduced to the minimum. What sort of empire that made in the age of depression the following chapter will try to explain.

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