Empire Lost: Britain, the Dominions and the Second World War

by Andrew Stewart

  By autumn 1940 Britain's dollar reserves were exhausted and as the United States continued to show few signs of offering any credit disaster appeared to loom. A September deal had given the Admiralty 50 old American destroyers of doubtful military value, in return for which Roosevelt gained the long-term mortgage for a raft of prime British real estate scattered around the Empire, and a guarantee that the Royal Navy would never be surrendered to the Germans.30 This was only a relative success. The defeated French government had placed its gold reserves in storage in Canada but British attempts to use this as collateral for further purchases had floundered on Mackenzie King's discomfort over such an act. Negotiations with the Dutch and Belgian governments-in-exile to use the remainder of the monies and commodities that had been rescued with them as they fled the Continent had also proven unsuccessful as the repayment terms demanded were considered to be too onerous. And it soon got worse. The American Treasury Secretary Henry Morgenthau Jr. had requested a complete list of British holdings in the Western Hemisphere, differentiated according to liquidity. When Roosevelt was shown the list, he remarked, 'Well, they aren't bust, there's lots of money there.' He therefore now advised the British authorities that he had arranged for an American destroyer to sail for South Africa to arrange the transfer of some of the United Kingdom's gold held there. It was recognized that this would be virtually the last of the gold reserves available but it was also understood that there was no choice other than to acquiesce to the president's decision. Whitehall's embarrassment was all too apparent, it even being suggested that General Smuts not be told why the destroyer was visiting.31

  Within the DO the importance of the United States was entirely recognized by Cranborne who also held that the authorities in Washington were the only ones who could deter Japan and protect the British Empire's position in the Far East.32 He had his concerns about the extent of the relationship, however, and these drew heavily upon his knowledge of the Dominions' thinking on the matter. On the one hand there was the New Zealand high commissioner in London raging about 'toadying to a power which only acted in accordance with its own selfish and commercial interests'.33 On the other was Canada which, even before the signing of the Ogdensburg Agreement between Mackenzie King and Roosevelt in August 1940, was recognized within Whitehall, albeit reluctantly in some quarters, as enjoying a special relationship with the Washington administration.34 In light of its geography, history and culture, the fact that Canada should feel close to its southern neighbour can be seen today as not surprising; at the time it caused some confusion within Whitehall's more obstreperous clique. Generally speaking, as one astute commentator put it just weeks after the outbreak of war, the American-Dominions relationship would always be complicated.35 This was because the Dominions were at the same time 'both jealous and contra-wise' admirers of all things American. They recognized that securing the support of the authorities in Washington was a prerequisite to winning the war and consequently they campaigned hard for closer links.36

  In November 1940 Roosevelt had won the presidential election and with it came—in response to a lengthy and pointed plea from Churchill—a greater degree of confidence to provide some measure of succour. By the spring of the following year he was in a more sympathetic mood, 'We have been milking the British financial cow, which had plenty of milk at one time, but which has now about become dry.'37 The Lend-Lease Act, pushed through Congress in the first two months of 1941 and signed into law in March saved the day in so much as it did away with the cash-and-carry policy which had obliged the British authorities to pay for all of its supplies bought in the United States in hard currency. Before its agreement Halifax had been given an ultimatum. The British must sell one of their important companies in the next week as a mark of good faith; a major subsidiary of Courtaulds was consequently sold at a knock-down price.38 Here was the visible demonstration of the price of salvation, what was left of Britain's economic strength. According to one of those present the promise given by Harry Hopkins, the president's emissary, that he would tell Roosevelt upon his return that the United States should unconditionally support the British invoked tears in the famously lachrymose British leader and 'seemed like a rope thrown to a drowning man'.39 According to one American reviewer US support for Britain's war effort was 'a knife to open that oyster shell, the Empire'.40 There also remained those in Washington who saw the proposed facilities as a device that would be used by the British to sustain exports in the face of American competition; essentially having been supplied with raw materials and components free of charge these would then be sold in the global export markets.41 This rather seemed to overlook the fact that the subsequent German attack against the Soviet Union should, if any further evidence were still needed, have amply demonstrated the enduring nature of Hitler's expansionist plans.

  Roosevelt's financial promise was well received despite its apparently reserved nature. According to Cuthbert Headlam, Conservative MP for the safe seat of Newcastle North, the Americans were 'a quaint lot', prepared to do everything 'as their share in the war for democracy' but fight.42 The Dominions, however, were often kept deliberately on the fringes of these discussions as they gained momentum throughout 1941, making them especially wary of the longer-term implications both for them individually and for the alliance.43 This distance was in large part because the United States preferred to deal just with one set of negotiators, but there was also a desire by the British government to retain ultimate control of the distribution of loaned materials.44 Although arrangements ultimately improved, the minimal access initially given to the newly available equipment left the Dominions angry at the DO for 'not pressing their case hard enough'.45 As Cranborne had campaigned especially hard for them to be included, such criticism was unfair.46 It is however clear that the lack of involvement in the first instance ensured that there was a subsequent reluctance to demonstrate any great enthusiasm for the Lend-Lease scheme. The view took hold that this economic entanglement would quite likely have potentially onerous consequences for post-war economic policy, most obviously because of an almost inevitable attack by the American government on the system of Imperial Preference.47 As Cranborne argued, in a note written to the Chancellor in August 1941, 'it is plain that for some of the Dominions ... the abandonment of [this system], without compensating advantages which are not yet in sight, would at their present stage of development spell economic disaster'.48 Despite subsequent criticisms of the degree to which he sought to encourage the relationship, even Churchill was not entirely blind to this danger and what it would mean for the future of the British Empire. But there was little else he felt could be done by this stage of the war.49

  A considerable amount of squabbling followed over the exact provisions of the agreement and what they meant for each of the Dominions. The ordering and distribution of essential supplies for the Anglo-Dominion alliance had been handled in a variety of ways. Canada had, from the outset, been an exception to the rules as it was a dollar country and had its own arrangements with the United States, a provision which proved of great value not just for it but also for Britain who took full advantage of this route of purchase. The remainder of the Dominions—and indeed India and the Colonies—placed all orders for warlike stores, meaning weapons and munitions for fighting forces, through the British Purchasing Commission. The WO, in turn, was responsible for distributing these purchases based upon the appreciations of strategic necessity supplied by the General Staff. This arrangement had been put to the Dominions at the start of the war and they had agreed; for the first few years it proved a working solution but with occasional distresses. Up until April 1941 all non-warlike stores bought in the United States were again handled by Britain as the provider of dollar exchange or gold required to pay for them and at every opportunity it remained keen to limit spending. Lend-Lease brought with it a request from Washington that a similar system be maintained with all Empire needs being coordinated before submission into a single channel. Global requirements were accumulated
and processed in London and Dominion supply representatives joined the Purchasing Commission. This system worked for the first few months but it soon became known in London that Casey, the Australian representative in Washington, was agitating that each Dominion should have direct dealings. The American authorities, perhaps pleased at what they saw as signs of growing agitation, seemed only too pleased to assist. According to Arthur Purvis, the head of the British mission, the degree to which the Dominions wished to make themselves involved was 'making the waters rather muddy' in Washington. His view was that the Dominions could not hope to gain either the same access to goods or the same repayment terms because the American public held no 'emotional sympathy' for them.50 This led the DO to comment that it would be 'intolerable' if 'Dominion machinations' were found to be to blame for the trouble.51 And by December 1941 it was now being made quite clear by the Americans themselves that the Dominions' belief that they 'could get practically anything under Lend-Lease' was a 'misunderstanding'.52

  To some perhaps less than objective writers in Britain it was never in doubt that the US would help, an article in the Empire Review in February 1941 being typical of such sentiment: 'American ideals and interests are as deeply involved as are those of Britain in the threat of Nazi domination. If Britain goes under the United States faces the loss of the most important single source of her strategic raw materials, her overseas trade and investment, the ruin of her prosperity and the end of her traditional way of living and thinking. A war to decide the fate of the British Empire cannot, therefore, be a matter of indifference to America.'53 Watching from his vantage point in Canada House, which he used to augment the information he gained from his many connections within British society, Charles Ritchie was probably more accurate with his assessment. As he wrote in his sometime scandalous diary: 'How the English hate being rescued by the Americans. They know they must swallow it, but God how it sticks in their throats. The Americans are thoroughly justified in their suspicions of the English, and the English I think are justified in their belief that they are superior to the Americans. They have still the steadiness, stoicism and self-discipline that make for a ruling race, but what will these qualities avail them if the tide of history and economics has turned against them?'54

  The Atlantic Charter was another challenge, a 'flop' that went down like a proverbial lead balloon in London and in large parts of the Empire but its significance in terms of Anglo-American relations and the position of the British Empire was undoubtedly greater than any of the British delegation could ever have imagined.55 Welles, in competition with Secretary of State Cordell Hull, had been a leading force behind the idea of producing a joint declaration in which Imperial Preference would be violently censured. The actual proposal for the Charter was apparently sprung upon Churchill on the opening day of the conference by his host. Despite the leading role Sir Alexander Cadogan played in drafting the final document, it lacked any significant oversight by the Whitehall mandarins who specialized in dissecting such agreements.56 Oliver Harvey noted in his diary that Eden 'feels FDR had bowled the PM a very quick one'.57 The cricketing metaphor would have been lost on the American hosts; as would become more apparent later the Charter was in fact more akin to a 'Beanball thrown to cause the opposition injury for it certainly had a considerable negative impact on the British imperial position. Article 3, which affirmed that the two governments 'respect the right of all peoples to choose the form of government under which they will live', was 'perhaps the most explosive principle of all'.58 Churchill told the Cabinet following his return that he believed this referred to 'the restoration of the sovereignty, self-government and national life of the States and nations of Europe now under the Nazi yoke'. What it definitely did not refer to was the position of any of the many subject peoples of the British Crown. Roosevelt apparently, however, saw it as much more than just this, his understanding being that the specific promise outlined in the third article 'applied to all humanity'.59

  Writers such as Viscount Samuel were able to gloss over the question of what the United States was actually trying to achieve during the meeting held at Placentia Bay off the Newfoundland coast in August 1941, arguing that the finer details were something to be examined at a later stage, part of a process which it was inferred would take a very long time to complete.60 Others preferred to focus on the wider economic aspects of the document, and what was seen as the abandonment of the restrictions of Ottawa and the embracing of a more open, advantageous and international system of post-war trade.61 Upon reading the newspaper accounts of the signing Leopold Amery, who was eminently well qualified after a lifetime considering such issues to quote on the long-term implications, rued 'we shall no doubt pay dearly in the end for the fluffy flapdoodle'.62 His assessment was both the most alarming but also the most astute. Headlam retained a broadly similar outlook with the formal announcement of the Atlantic Charter. This was an 'eight point pronouncement' that was 'somewhat vague and woolly in character' and was likely intended for an American audience who would be 'tickled'. His conclusion though was that Britain's hoped for allies were 'a strange and unpleasing people: it is a nuisance that we are so dependent on them'.63 As has been seen, the Dominion governments had been given only the vaguest of indications of what was proposed.64 This led the DO to complain, 'so long as [they] are kept in the dark, they are apt to misconstrue the reasons for our actions . and to suspect us of ulterior motives which, apart perhaps from our wish to ensure absolute secrecy about future plans and operations, do not exist'.65

  Throughout 1941 the United States edged towards war with the extension of its naval operations east of Iceland and the eventual final repeal of the most significant remaining provisions of the Neutrality Act. By this stage all bar the most myopic of isolationists recognized that the Roosevelt administration would at some stage soon become a wartime government. As Halifax confided to Amery in May 1941, 'the defeatists and non-interventionists are working very hard'. Later that month, after a visit to the Middle West, he was more optimistic that there was considerable support for a policy of supporting Britain, and that the isolationists were not so strong 'as so many people from a distance think'.66 In August 1941 Hugh Dalton had been told that Roosevelt was 'a sick man and more and more with the mentality of an Emperor'. His source also claimed that although Halifax was now getting on better with the President, he had broken down and wept in front of him only a short time after his arrival 'because he couldn't get on with these Americans'.67 In November of that same year Halifax was attacked by egg and tomato throwing demonstrators as he entered the chancery of Archbishop Edward Mooney in Detroit. He compared working with American government departments to being like 'a disorderly day's rabbit shooting'. 'Nothing comes out where you expect and you are much discouraged. And then, suddenly something emerges quite unexpectedly at the far end of the field'.68 John Maynard Keynes, a regular visitor to Washington as he conducted the complicated financial negotiations, also characterized American officials as 'flying confusedly about like bees, in no ascertainable direction, bearing with them both the menace of the sting and the promise of honey'.69 What remained to be confirmed was the exact manner in which this would take place. The President and his aides were reading intercepted Japanese intelligence and knew that in November 1941 the Nazi Foreign Minister Ribbentrop had agreed that in the event of war involving America, Germany and Japan would be in it together. Even so Hitler spared Roosevelt a tricky political manoeuvre by choosing to declare war on the United States following the Pearl Harbor attack.70

  During the war Professor Keith Hancock, considered by one of the greatest modern historians of the British Empire and Commonwealth as 'the greatest', wrote a small volume entitled Argument of Empire.71 Having previously produced the still authoritative Survey of British Commonwealth Affairs, he wrote as an Australian who had spent a great deal of time working and living in Britain which made him both enamoured of the way of life he had experienced but also aware of its foibles and follies. His creden
tials were impeccable and he used these to attack the growing American anti-colonialism stance. Published in 1943 on flimsy wartime paper, it began:

  It is difficult to conduct an argument across the Atlantic. John Bull wakes up one morning to read newspaper headlines which give him the impression that Americans are making the liquidation of the British Empire one of their war aims. John Bull growls that it's like their cool cheek and that he won't let go. John Bull's growl is cabled across the Atlantic and served up to the American citizen in bigger headlines. The American citizen gets excited and declares that John Bull is a reactionary imperialist and American boys aren't fighting for anybody's old empire but for a brave new world.72

  Some 75,000 copies of the first run were rapidly sold, the readers being urged to 'pay attention' to the rich tapestry of ideas and examples he employed to support his premise that the British Empire might not be entirely perfect but it remained a progressive force in world affairs, and the two sides needed to cooperate much more in the future. Nonetheless, as he wrote privately to a friend at about the same time as his book was finished: 'There are of course some features of American life which are, in my view, a menace. There is crudity in American big business as well as in some methods of American thought and discussion. In this crudity there are elements of brutality, vulgarity and naïveté'.73 It would be features such as these that would present the greatest of challenges to the cohesion of the Anglo-Dominion alliance as it entered its next crucial wartime phase.

  Rupture?

  The United States' entry into the war had been greeted by Churchill as the salvation of the Empire and he departed at once to visit his new coalition partner, undoubtedly primus inter pares. In his absence from London, and just a day after fighting had begun in the Pacific, Page had written to Canberra setting out the many deficiencies that he saw in the relationship with Britain.1 To rectify them he wanted to find a method that would allow Australian influence to be exerted as policy was being decided. This did not mean the creation of an Imperial War Cabinet but, instead, regular visits by special representatives who would stay for two or three months, attend the War Cabinet and support the high commissioner. In short they would 'come for a special job, get it done and get away'. Page also had strong opinions about the position of secretary of state for Dominion affairs. This should be one of Britain's most senior politicians, indeed, were it not for the fact that he already had so much to do, the prime minister would be the most obvious direct link with the Dominions. The clear inference, of course, was that Cranborne was not up to the job and should be replaced. Brooke-Popham, one of the many official British visitors to Australia during the latter half of 1941, had warned Whitehall of the growing need to make his hosts 'feel that we in England look upon them as definitely part of one Empire'.2 It was implied, somewhat prophetically, that were this not to happen there would be a risk of them 'slipping out'. This was now the danger as the Australian government insisted that better use be made of Page who, having heard that the Prince of Wales and Repulse had been sunk, had begun his own efforts to broaden his role.3 The authorities in Canberra were told the following year, by another Australian visitor, that all Page achieved during this period was to create 'a deplorable impression' and 'exerted little influence' in terms of wartime strategy. Nonetheless guarantees were secured that troops and planes would be diverted from the Middle East as well as an agreement that he would be given access to all of the facilities Curtin had requested.4