The Second Crimean War has brought forth wonder, at least among some, at the stock market’s indifference. Some would say stock market “exuberance,” but with daily, government interference, stocks will rise – until they don’t. What follows is a look at market indifference in 1914, right up until the guns were rolling. Hindsight can be a handicap. We know what happened in August 1914. No one in Europe foresaw four years of trench warfare. The British periodicals quoted below were caught up in the “Ulster Crisis,” which seemed far more important than an assassination in Sarajevo.
Aside from the markets, the views quoted below show how quickly the media can about face, in a complete dismissal of formerly held opinions. Many will look at this as evidence the government controlled the press, but it should be remembered that Gustave Le Bon preceded Joseph Goebbels. It may also be noted how disagreements between Russia and its underbelly, among different ethnicities and alliances, are ancient, modern and do not lend themselves to sweeping solutions.
The Spectator – 6 June 1914 – page 3:
Bank Rate 3 per cent, changed from 4 per cent.
The Spectator – 20 June 1914 – page 1:
“IN THE BALKANS, ALSO, THINGS ARE GETTING WORSE RATHER THAN better. Throughout the week a confused battle has been proceeding round Durazzo, the Albanian capital. It is true, the latest news is more reassuring, but…. How will it be possible to prevent Austria-Hungary and Italy quarreling over the disposition of Albania? Neither will let the other intervene. Partition between the two seems impracticable….”
“SIR EDWARD GREY, REPLYING TO CRITICISMS OF THE SCHEME… maintained that the good relations between Russia and Great Britain would be unaffected by the deal. The Anglo-Persian Company’s concession antedated the Anglo-Russian Agreement…. Mr. Lloyd George asked how the government proposed to defend the property “surrounded by material far more inflammable than oil” and Sir Edward Grey suggested that two brigades of British troops could defend the pipeline if the worst came to worst…. [H]e held there was no place outside the British Empire where the risks were less.”
The Spectator – 25 July 1914 – Page 1:
NEWS OF THE WEEK. The event of the week which eclipses all others in interest and importance is the meeting of the Conference of political leaders which assembled at Buckingham Palace on Tuesday…. The fact that the proposal was the King’s proposal… undoubtedly rendered it easier for the four Unionist members to take part in the proceedings.
The Conference at Buckingham Palace addressed the Ulster Crisis.
The Spectator – 25 July 1914 – Page 5:
AUSTRIA-HUNGARY AND SERVIA. THE NATION’S DEEP ANXIETIES CONCERNING HOME POLITICS [Northern Ireland – FJS] have to a very great extent obscured for them the European prospect. Yet, if we judge by the telegrams in the Press and by the agitated condition of many of the Continental Stock Exchanges, it is hardly too much to say that the public mind of Europe is greatly moved by the question whether the peace of the world can be maintained. We are alluding, of course, to the diplomatic friction between Austria-Hungary and Servia…. Austria-Hungary is attempting to fasten some part of the responsibility for the infamous murder of the heir to the Austrian throne and his wife upon Servia as a nation…. If this is the kind of pressure that is being put upon Servia, one can well imagine that the Chancelleries of Europe are anxious about peace. The tone is altogether too like that of the ultimatum addressed by the wolf to the lamb about the drinking water. The injury done to the Dual Monarchy and to the Imperial House by the murder at Serajevo was terrible, but such demands as we have summarized would be tantamount to the provocation of war. It is hard to see how Servia could acquiesce in them without in effect making an admission of guiltiness which she must naturally feel it impossible to make.
“Though it is difficult to regard Austria-Hungary as politically a wise Power or to look upon the statesmen who control her destinies just now as men of foresight, we cannot think it possible that she is intent upon attacking Servia. Hostilities begun on these terms would be almost certain to involve first the rest of the Balkan peninsula and then Europe as a whole. No doubt nations sometimes go mad, but, distracted as Austria-Hungary no doubt is, both by her home and her foreign policy, there is no reason to think that insanity or anything approaching it has fallen on her.”
“[T]here is no reason to think that insanity or anything approaching it has fallen on her,” was a “however” statement. The Spectator then delved into the cross-currents of ethnicities, borders, and alliances across Europe. It concluded if some sort of peace pipe were not arranged between Austria-Hungary and Servia, a continental war would follow.
Daily News – 27 July 1914 – “On the Brink of War”:
“…If it should prove impossible at this late hour to prevent the outbreak of war between Austria and Servia, it is at least possible to isolate the struggle. If Great Britain, Germany, France and Italy, acting together in good faith, do not achieve that they will be responsible for the greatest crime in history.” Daily News – 29 July 1914 – “Russia and the War”:
“…No one has ever yet dared to claim that Russia is the champion of the freedom of anybody. She has enslaved many, but she has freed none. Her claim to be the protector of the Slav peoples has no historic basis… For ourselves, it is unthinkable that we should be drawn into such a quarrel. We have done much for the advancement of Russian interests in recent years. We have remained silent while the liberties of Finland have been trodden in the dust and while Russia, in defiance of her agreement with us to preserve the independence and integrity of Persia, has made the northern half of that country a Russian province. But the suggestion that we should spend British lives and British treasure to establish Russia in the Balkans would be an inconceivable outrage to a democratic country. Our hands are free in this business and we must take care to keep them free. Let us work zealously to preserve peace; but let us remember that the most effective work for peace that we can do is to make it clear that not a British life shall be sacrificed for the sake of a Russian hegemony of the Slav world.”
Manchester Guardian – 30 July 1914 – “England’s Danger”:
“We wish Servia no ill; we are anxious for the peace of Europe. But Englishmen are not the guardians of Servian well-being, or even of the peace of Europe. Their first duty is to England and to the peace of England. Let us for a moment drop solicitude for the peace of Europe and think of ourselves. We ought to feel ourselves out of danger, for, whichever way the quarrel between Austria and Servia were settled, it would not make a scrap of difference to England. We care as little for Belgrade as Belgrade does for Manchester.”
Manchester Guardian – 1 August 1914 – “England’s Duty”:
“Then is it honour that we must fight for? No; for honours sake we must keep the peace. There are, as Mr. Asquith and Sir Edward Grey have both told us, no engagements with European Powers that would take away our perfect freedom of choice in the event of a general European war. Being free as regards Europe, we are not free as regards our own people, but must decide in favour of neutrality. For if we decide differently, then we violate dozens of promises made to our own people the promises to seek peace, to protect the poor, to husband the resources of the country, to promote peaceful progress. These promises are in honour binding, and if they are broken, then not only are our interests sacrificed but our honour is tarnished.”
The Spectator – 1 August 1914 – page 3: Bank Rate 8 per cent, changed from 3 per cent. The Spectator – 1 August 1914 – Page 3: ON MONDAY IN THE COMMONS SIR EDWARD GREY EXPLAINED THE position of the Government in the Austro-Servian crisis. So long as the dispute was between Austria-Hungary and Servia alone Great Britain had no title to interfere, but if Russia were drawn in, the question would be one of the peace of Europe. He had told the Austrian Ambassador that if this happened the only chance of peace seemed to be that the four Powers-Germany, France, Italy, and Great Britain- should try to induce Austria-Hungary and Russia to suspend military operations while the four Powers tried to arrange a settlement. When he had learnt that Austria-Hungary had actually broken off relations with Servia, he immediately tried to bring about a conference of the four Powers in London. He had been compelled to act rapidly and without the usual precaution of making preliminary inquiries as to whether his proposal was likely to be welcomed.
The Spectator – 8 August 1914 – page 3: Bank Rate 5 per cent, changed from 6 per cent. Daily News – 11 August 1914 – “Our Business Now”:
A Letter from Mr. G.B. Shaw:
“…. we shall punch Prussia’s head all the more gloriously if we do it for honour and not for malice, meaning to let her up [?-FJS] we have knocked the militarism out of her and taught her to respect us. Prussian militarism has bullied us for 40 years; and a month ago neither Germany nor France believed that we would fight when it came to the point….”
Daily News – 14 August 1914 – “Concerning Mr. Maximillan Craft”:
A Letter from Mr. H.G. Wells:
“I find myself enthusiastic for this war against Prussian militarism. We are, I believe, assisting at the end of a vast, intolerable oppression upon civilisation. We are fighting to release Germany and all the world from the superstition that brutality and cynicism are the methods of success, that Imperialism is better than free citizenship and conscripts better soldiers than free men. And I found another writer who is also being, he declares, patriotically British. Indeed, he waves the Union Jack about to an extent from which my natural modesty recoiled. Because you see I am English-cum-Irish, and save for the cross of St. Andrew that flag is mine. To wave it about would, I feel, be just vulgar self-assertion. He, however, is not English. He assumes a variety of names, and some are quite lovely old English names. But his favourite name is Craft, Maximilian Craft-and I understand he was born a Kraft. [In other words, of German ancestry – FJS] In appearance Kraft is by no means anglicised himself. He is a large-faced creature with enormous long features and a wooly head; he is heavy in build and with a back slightly hunched; he lisps slightly and his manner is either insolently contemptuous or aggressively familiar. He thinks all born Englishmen, as distinguished from naturalised Englishmen, are also born fools….” [Mr. H.G. Wells was just warming up at this point; he still had 1,500 words to go. – FJS] The Spectator – 15 August 1914 – page 1:
NEWS OF THE WEEK: “THE war continues to be as amazing as ever. We have now had actual firing for over ten days, and yet there has been no serious invasion of French soil. What one was always told would happen in the great war, and what undoubtedly the Germans meant should happen, was a steady and rapid advance of the stupendous tide of German soldiers into France. Wave was to succeed wave of men on the frontier, and all of them were to have their faces turned to France and Paris…. Instead of France being invaded, and the first great battle taking place on French soil, it is, Belgium that is being invaded, and the battle which is beginning as we write is not only in Belgium, but one largely against Belgian troops -a battle in which German guns will point west and the Belgian and French guns east.”
The Spectator – 15 August 1914 – page 4:
TOPICS OF THE DAY: THE CALL TO ARMS. “Let us say once more what we said as emphatically as we could last week-that the first thing to do is to get Lord Kitchener the five hundred thousand men whom he must have to make the country safe. Till that is done, till we have got the men for the firing line, all philanthropic schemes, however good, nay, however essential in themselves, must wait.”
The Spectator – 15 August 1914 – page 4:
RIFLE CLUB AND VILLAGE GUARDS. “We understand that the High Sheriff of Surrey, Mr. St. Lee Strachey, is this afternoon holding a Conference of the Surrey Rifle Clubs at Brett Reynard’s Restaurant, Guildford, at five o’clock, with the object of making proposals for the formation of Town and Village Guards. It must be obvious to every one that it would be an enormous advantage if every small town and village had such Guards….”
The Spectator – 15 August 1914 – page 9:
TERMS OF SERVICE. IN connecxion with our explanation of the conditions required for enlistment in the Regular Army, we are glad to learn that in the latest leaflets issued by the War Office all references to “three years” have been omitted. The conditions are now perfectly clear…. FOR THE DURATION OF THE WAR.”
The Spectator – 15 August 1914 – page 10:
THE GERMAN MILITARY MIND. “ALL Englishmen are now agreed that Germany made the war, and that the moving force within the German nation was and is German militarism….”
The Spectator – 15 August 1914 – page 19:
BOOK REVIEW: Jane’s Fighting Ships, 16th edition. “The latest Dreadnoughts, which are not yet completed, will carry at least eight 15-inch guns. At the moment a contrary movement is going on, however, between the sizes of ships and of guns…. On the other hand, to tie up so much capital value in a single vessel is perhaps to put too many eggs in one basket. And there are many experts who believe that the lesson of the victory of the small British ships over the larger vessels of the Spanish Armada is a lesson that may by no means have ceased to be true even for the navies of to-day…. No German Dreadnoughts in commission have guns larger than 12-inch. Our 13-inch guns in the ships in commission give us a distinct superiority in gunpower…. The only other Navy besides the British which is largely employing oil is that of the United States. So far as one can foresee, the ships of the future will burn only oil. While the British Admiralty has secured control of a Persian oilfield, the United States Navy has an oilfield in California.”
“The landing of the British Expeditionary Force on the Continent within a fortnight of the declaration of war is one of the most remarkable in the history of war, and the newspapers have not appraised it at its true value… It is, in fact, perhaps the most striking example of the use of naval power that even our history has ever afforded, and it should, if rightly understood, do more for the opening of the seas to commerce than a great victory… The Admiralty is to be heartily congratulated on a most brilliant beginning. There will, we think, be no talk at the end of this war of our “unpreparedness”, at any rate…”
The Spectator – 22 August 1914 – page 10:
The Spectator – 1 January 1916 – page 11:
Bank Rate 5 per cent, changed from 6 per cent, 8 August 1914
Frederick J. Sheehan is the author of Panderer to Power: The Untold Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession (McGraw-Hill, 2009) and “The Coming Collapse of the Municipal Bond Market” (Aucontrarian.com, 2009)