the Germans would be alerted to Britain’s dire position: ‘“If England has gone off the gold standard, she can’t last six months more,” is what everybody would say, whether it is true or not.’ Keynes was striving to ensure Britain’s financial survival while not relinquishing his hope that President Wilson in Washington would force a negotiated peace by severing financial supplies and thus threatening Britain with ruin. On 22 January Wilson issued his manifesto for ‘peace without victory’ in the form of a message to the US Senate. He demanded freedom of the seas, limitation on military and naval armaments, self-determination of peoples, and a supranational world executive with overriding powers. ‘In other words, an immediate utopia, machine-made and thoroughly American,’ commented the German liberal Count Harry Kessler.26
In February 1917, at the age of thirty-three, Keynes was appointed to head a new Treasury department managing Britain’s external finances and reporting directly to Chalmers and Law. His responsibilities covered banking, currency, foreign exchanges, inter-Allied finance. (As an Acting Principal Clerk at the Treasury, Keynes’s toil never relented: contrary to Chalmers’s peacetime hopes that his officials would make time for their hobbies, Keynes on the weekend of 18–19 August 1917 took home on Saturday some eighty-nine Treasury papers, which he had despatched by Sunday evening.) Keynes expected Britain’s resources to be exhausted by the end of March. But the Germans – not realizing that the US Federal Reserve Board had already delivered a death-blow to the Allied effort – on 1 February launched unrestricted submarine attacks to stop American material supplies from reaching the British Isles, France and Italy. The German navy believed that they could defeat England in four months – and might have succeeded if the Admiralty had not introduced the convoy system whereby merchant ships put to sea in a tight group under escort from protective Royal Navy warships. German submarine attacks destroyed Wilson’s notions of a negotiated peace, without victory. Publication of the Zimmermann telegram, in which the German Foreign Minister promised control of Texas, Arizona and New Mexico to Mexico as recompense for siding with Berlin in a war against the USA, outraged American opinion. On 6 April the US declared war on Germany.
After the American entry into the war, the US Treasury began limiting the release of dollars to Britain. In June US funds were withdrawn from London for investment in a $2 billion Liberty Loan. In a message drafted by Keynes, and sent on 20 July by Bonar Law, the US government was warned that the European Allies’ finances would collapse within days unless the Americans undertook to pay all of the Allies’ expenses in America, including exchange costs. Initiatives by Keynes were crucial in obtaining the release of funds by the US Treasury at the last moment. This emergency was for Keynes the worst period of strain since the beginning of the war. It confirmed that, by the summer of 1917, British financial dominance in the world had been ceded to the United States. After the resolution of the exchange crisis, Lord Cunliffe of the Bank of England demanded the dismissal of Chalmers and Keynes as punishment for their high-handed conduct. It was however Cunliffe whose retirement Bonar Law obtained.
Officials deal in public action: they operate in the public interest, they regulate civic affairs, they seek public stability; but Keynes was a man who cherished private intimacies, and cultivated the private domain. The tension between his official duties and personal loyalties was disturbing throughout the war.
Keynes wanted the war to be waged efficiently and to end swiftly. Its calamities convinced him that his early trust in the rationality of other people’s feelings and conduct was specious. He said of the Apostles before August 1914, ‘we completely misunderstood human nature, including our own’. He had no presentiment until the war that ‘the springs of action lie deep in ignorance and madness’. He was not a pacifist who objected to fighting in principle, but a liberal who objected to compulsion in the form of conscription. ‘He would not fight because Lloyd George, Horatio Bottomley and Lord Northcliffe told him to,’ as Clive Bell recorded. ‘He held that it was for the individual to decide whether the question at issue was worth killing and dying for; and surely he was … a better judge than the newspapermen who at that time ruled the country.’27
In all this Keynes was a son of Harvey Road. Constance Garnett’s translations of Tolstoy’s major works had been read aloud by Florence Keynes to her family, who had heard (even if they did not fully accept) the Russian seer’s message that violence is wicked, that all forms of state compulsion are criminal and that the aim of humankind should be to seek happiness by doing right. These ideals were out of kilter with wartime England. On 4 October 1915 Neville Keynes cancelled the household’s order for The Times, which he had read since he was a boy in Salisbury, because he was disgusted by its bellicosity under Northcliffe’s ownership. That day’s issue included a jubilant account of the futile massacre of the Australian Light Horse Brigade when it had charged against a long line of Turkish machine-guns in the Dardanelles campaign; an endorsement of the Bishop of London’s prudish campaign against night-clubs; and an editorial on the Battle of Loos which spoke of ‘the utmost cheerfulness’ prevailing among soldiers on the Western Front after 59,000 British soldiers had been killed. Perhaps most objectionable to Neville Keynes, who had not wanted Maynard to join the volunteer army corps at Eton, was the humbugging report of a London recruiting rally (which had singularly failed to excite many volunteers). There had been a booming oration on Shepherd’s Bush Green by an MP with the apt name of Sir William Bull, but the leading jingo MP, Horatio Bottomley, failed to speak having sprained his ankle alighting from a taxicab. ‘Everything was splendid,’ The Times reported. ‘There was plenty of popular music … The soldiers were in the pink of health and high spirits. Their bearing gave evidence of the contentment that comes when the call of duty has been responded to, and the virility and good humour imparted by military training.’28
In the opening phase of the war there had been a burst of genuinely voluntary enlistment by men seeking either to serve their country or to escape from their ruts into overseas adventures. This was followed by a period of voluntary enlistment under pressure of either public opinion or economic necessity. The army had more men than it could equip in 1915, but during that summer, as volunteers failed to meet the army’s manpower targets, a bombastic newspaper agitation was launched against an estimated 650,000 slackers, who supposedly were shirking their country’s call. The Earl of Derby, Director-General of Recruiting, announced in October 1915 a scheme whereby men of military age ‘attested’ (or registered) their willingness to serve when called up. However, a man’s decision to enlist in the army or navy still depended upon his sense of duty, his susceptibility to public opinion, and the attitude of his employer. The Derby scheme may have been intended to fail to meet its targets. Certainly, it incited agitators for compulsory military service rather than assuaging them.
In December 1915 the Cabinet was divided by a proposal to increase the army to seventy divisions by introducing conscription. Lloyd George, the newly appointed Minister of Munitions, was converted to conscription by his need to stop the unregulated, disruptive enlistment in the armed forces of skilled factory-workers, who were requisite for improving shell output. McKenna, who believed that seventy divisions were more than the country could afford, threatened to resign. Despite the resistance of McKenna, Walter Runciman and other Liberal ministers, the Military Service Act of January 1916 introduced conscription of all single men between the ages of eighteen and forty-one. Its achievements were mixed, for instead of catching the mooted 650,000 slackers, it produced 748,587 claims for exemption from miners, munitions workers, shipbuilders, farmworkers and others in protected jobs. Most of these claims were accepted as valid. A smaller category of men claiming conscientious objection to fighting were allowed to state their case before a local tribunal.
In total, during the war of 1914–18, there were 2.4 million volunteers in the United Kingdom and 2.5 million conscripts (although the nation contributed only 6 per cent of the total number of men mobilized on both sides). The issues of the war meant little to the majority of conscripts, who enlisted because they were scared to disobey the Military Service Act. That Act, combined with similar legislation in 1939–45 and the system of
