and in neutral markets is especially noticeable in the case of Germany.” Although relatively optimistic about Great Britain’s long-term economic prospects, the commission concluded: “we cannot, perhaps, hope to maintain, to the same extent as heretofore, the lead which we formerly held among the manufacturing nations of the world.”15 The anxieties voiced by the commission went largely unheeded. A report by the Board of Trade in 1888 painted a far more sanguine picture of Great Britain’s economic performance. The report argued that alarmism was unwarranted, and that British commercial primacy was uncontested.16 Likewise, the Times (of London), the newspaper of elites in the Victorian age, confidently asserted in 1891 that German hopes of overtaking British trade “must soon be surrendered.”17
However, by the mid-1890s, doubts about Great Britain’s economic competitiveness had become commonplace. Parliamentary debates in 1893 and subsequent years featured repeated questions about the influx of German imports into Great Britain. No longer complacent about Great Britain’s longterm economic trajectory, the Times in 1894 and 1895 published numerous articles detailing the advance of German commerce and the intensifying competition British business faced. The “Decay of the Iron Industry,” a prominently located article in the Times, provides a window onto British anxieties: “the iron trade of that country [Germany] has of late years greatly improved its competitive position in reference to the iron and steel industries generally, and that it now menaces the prosperity of the English iron trade to a larger extent than has ever happened in the past.”18
The alarm sounded by the Times paralleled the thinking of many, though not all Conservatives, who in 1895 assumed control of government.19 Joseph Chamberlain, the new colonial secretary, was already convinced that Great Britain would be surpassed by its commercial rivals in the absence of strenuous efforts to shore up competitiveness.20 The president of the Board of Trade, Charles Ritchie, also harbored doubts about Great Britain’s economic situation. In 1896, the Board of Trade conducted a study comparing Great Britain to France, Germany, and the United States. Summarizing the results, Ritchie, largely referring to the United States and Germany, predicted: “their competition with us in neutral markets, and even in our home markets, will probably, unless we ourselves are active, become increasingly serious.” Without improving industry, Great Britain “could scarcely expect to maintain our past undoubted pre-eminence.”21
On the economic side, the balance of perceptions decisively shifted in the mid-1890s. From then on, a critical segment of British elites projected decline relative to the United States and Germany.
Maritime Fears
Throughout much of the nineteenth century, elites in Great Britain took the Royal navy’s worldwide supremacy for granted.22 This was particularly true vis-à-vis the United States and Germany. Continuous neglect of the American navy in the decades following the Civil War led the British government to dismiss the United States as a maritime power. A paper prepared in 1882 for the Royal Commission on Imperial Defence exemplifies this perception. It described the American navy as “contemptible,” and cited budgetary pressures and tensions between Congress and the executive branch as ruling out substantial increase in U.S. maritime strength.23
By the late 1880s, the British government had begun to reassess the future trajectory of the American navy. The War Office and the Admiralty in an 1889 joint report noted that British maritime supremacy in the Western Hemisphere was secure, but added: “the present naval policy of the United States tends in the direction of a considerable increase in strength.”24 The steady buildup of the American fleet thereafter wrought a transformation in British perceptions of the Royal navy’s predominance. In a paper written for the first lord of the admiralty in 1899, the director of naval intelligence admitted that the Royal navy’s squadrons in North America, the Pacific, and the Caribbean had become “completely outclassed.”25 By the early years of the twentieth century, Great Britain’s loss of maritime supremacy to the United States was considered potentially global in scope. In 1901, the first lord of the admiralty observed: “if the Americans choose to pay for what they can easily afford, they can gradually build up a navy, fully as large and then larger than ours.”26 Three years later, the British naval attaché in Washington offered a similar assessment: the United States intended to become the world’s second maritime power, and might ultimately displace Great Britain as the first.27
Fears of losing maritime supremacy to Germany emerged during roughly the same period. Before 1896, the German navy—dwarfed by its British counterpart—aroused derision rather than alarm. However, the attitude within British official circles changed when the first naval bill was introduced to the Reichstag in 1897. Elites in Great Britain worried that a stronger German navy might join with the Dual Alliance—France and Russia—to offset the Royal navy’s worldwide dominance.28
Unease hardened into outright alarm as the German navy grew rapidly from 1900 to 1905. During this period, British elites began to perceive the Royal navy’s all-important primacy in European waters as increasingly tenuous. The Admiralty identified the emerging challenge to the Royal navy’s regional predominance, and recommended that the home fleet be strengthened “if it is to be on a par with the formidable German force which is being rapidly developed in the North Sea.”29 By early 1902, concerns about Germany’s potential to eclipse the Royal navy in European waters permeated much of the British government. Reflecting this, the Conservative Cabinet decided to construct a naval base on the North Sea with a fleet to “be practically determined by the power of the German navy.”30
Last, the Admiralty’s readiness to alter the venerable two-power standard speaks to changing British perceptions of the maritime balance. The two-power standard had previously meant maintaining a navy equivalent to the combined fleets of the Dual Alliance. Looking forward at the end of 1904, the Admiralty anticipated that the two-power standard would have to incorporate Germany to remain a valid measure of maritime supremacy.31
American Democracy, German Autocracy
Although the United States and Germany emerged as rising powers at roughly the same time, they differed in one fundamental respect: regime type. Whereas America was a democracy, Germany, despite parliamentary trappings, remained an autocracy. This disparity is not fully reflected in the Polity IV dataset. The United States during the prewar period receives a polity score of +10, denoting a strongly democratic regime. Germany receives a polity score of + 1 from 1895 to 1908 and +2 from 1909 to 1914.32 At the middle of the polity spectrum, it is difficult to draw conclusions about regime type. On the other hand, power centralization and domestic transparency—the additional set of criteria introduced in Chapter 2—clearly distinguish American democracy from German autocracy.
During the period of its ascendance, the United States had a decentralized political system. The House of Representatives was popularly elected. State legislators, who were directly accountable to the public, elected members of the Senate until 1913. Last, the popular vote determined the makeup of an electoral college, which in turn selected the president. The combination of a competitively elected executive and a bicameral legislature meant that America at the turn of the twentieth century had more than three checks and balances.
By contrast, Germany’s political system concentrated authority. The German constitution placed the kaiser at the epicenter of government, particularly in the realm of foreign policy. Although the Reichstag was competitively elected, and multiple parties including those hostile to the government held large numbers of seats, the chancellor was appointed and dismissed by the kaiser alone. Rather than chosen by parties with significant representation in the Reichstag, ministers served at the kaiser’s pleasure and could not even be members of parliament.33 Germany thus featured only one check and balance.
On regime transparency, the United States
