Britain, Europe and The World in 1937: A Moment in History Repeating itself? Part One

Democracy and Dictatorship – 2022 & 1922-1937:
The fall of the three great European empires at the end of the First World War – Austria, Germany and Russia – the chief centres of autocratic rule, seemed a happy augury for the future of democratic government. After the war, this was established in the new states, whose rulers recognised the wisdom of adopting constitutions modelled by Western Powers. In every European country, except Russia, where a new form of government, a Communist dictatorship, was maintained, the principle of representative government was accepted. Source: Richards et al., 1937.

Beginning his keynote address on Russia’s War on Ukraine on 28th June 2022, the newly-commissioned Head of the British Army, General Sir Patrick Sanders, spoke of the similarity of the events of 1937 in Europe to the continuing and impending events of 2022 in the central-eastern part of the continent:

“This is our 1937 moment. We’re not at war, but we must act rapidly so that we are not drawn into one by our failure to contain territorial expansion … so we never find ourselves asking that futile question, ‘could we have done more?’

Sky News Report, 28. 06. 2022.

How did that ‘moment’ arise, and how significant was it in the subsequent events of interwar Europe? What are the parallels with recent events in Europe and elsewhere? The Paris Peace Settlement had left every post-war state in central Europe with internal problems and potential border disputes. It proved easier to break up the multi-ethnic empires than to replace them with ethnically homogeneous states. Restored Poland and Czechoslovakia both had significant German minorities after 1919 and disgruntled Slav minorities. The two new states established in Paris, Czechoslovakia and Yugoslavia, also had substantial Hungarian minorities, as did Ukraine (in its western sub-Carpathian region) and Romania (in Transylvania). Hungarian resentment at the loss of over two-thirds of its pre-war land and at the exclusion of more than one-third of the Hungarian-speaking population was to simmer throughout the interwar period. Some 9.5 million ethnic Germans, or thirteen per cent of the German-speaking peoples, found themselves ‘marooned’ in the often uncongenial atmosphere of Czechoslovakia or Poland. The Germans of Austria were explicitly forbidden under the terms of Versailles from seeking Anschluss (union) with Germany, which contributed to undermining the newly founded Austrian Republic.

Time Chart of International Events & Relations, 1919-1929. Source: Donald Lindsay (1979), Europe & The World, 1870-1979.

As the economic situation in Germany grew worse during 1929-33, the Nazi Party (NSPD) increased its support in the Reichstag, and in 1933 the President, Hindenberg and the Nationalist Party, supporters of the old imperial régime, were forced to share power with Hitler, who became Chancellor.

There was often an acute sense of grievance among both winners and losers. The strictures of the Versailles Treaty managed to alienate many Germans from the new democratic Weimar Republic without seriously diminishing German might in perpetuity. A nation forged on Europe’s battlefields in the mid-nineteenth century bitterly resented attempts to exclusively blame its ruling élite for the outbreak of the Great War and the restrictions on its future military capabilities. In fact, her armed forces were merely streamlined into the professional nucleus of future mass armies. In this climate, it was not entirely surprising that swathes of desperate people, including the young, should have invested their hopes in the multiple temptations offered by Hitler’s National Socialists, with their identification of culprits, espousal of egalitarian mediocrity, and their messianic visions of future national greatness. By 1933, the most dangerous dictator had come to power after other authoritarian solutions had been essayed and failed. A peculiarly ‘democratic’ figure, the Führer was worshipped like a god by his followers, in itself testimony to the power of charismatic celebrity in the modern age.

Time Chart of International Events & Relations, 1930-39. Source: Donald Lindsay, Europe & The World, 1870-1979.

For the first five years of his rule, the Nazi dictator confined himself to chipping away at the restrictions imposed by the Treaty of Versailles. He refused, for example, to resume the reparation payments set at Versailles, while in 1933, he took Germany out of the League of Nations. Moreover, by promising that Germany only wanted to live at peace with her neighbours so long as all people of the German ‘race’ were within ‘the Fatherland’, he lulled the democratic statesmen into a false sense of security. Only after 1937, when German military strength had been built up, Hitler’s demands became limitless, and the democracies slowly came to understand the danger he represented. In 1933, British public opinion was very mixed regarding what to do about Hitler. Victor Gollancz, the left-wing author and publisher, wrote this retrospective in 1953, reflecting on his conflicted feelings in 1933:

… I felt passionate about checkmating Hitler. But pacifism, genuine pacifism, previously asleep, was simultaneously beginning to stir. I began to wonder whether military resistance – killing your enemy, hacking your enemy’s guts out, driving your enemy mad – could ever be right. If it could ever be right, then it must be right when you used it, as in this case, to prevent the enslavement, the utter degredation of mankind: but could it? If the worst happened, if war came, shouldn’t I find myself a pacifist? Shouldn’t I say, don’t retaliate, don’t despitefully use them, don’t wound, don’t kill? And yet surely to prevent a war that immediately threatened was demanded, above everything, by my very hatred of wounding and killing? By, I almost began to say – my very pacifism? … The fact is that I never really faced the issue: or rather, I avoided facing it with a sort of unconscious deliberation.

Victor Gollancz (1953), More for Timothy, pp. 354-5.
German & Japanese Expansion, 1933-39:
Source: The Times History of Europe (2002).

Pervasive pacifism, an understandable reaction to mass carnage within living memory, shaped how the powers responded to the advent of predatory dictators and militarists. Ordinary people had already, by 1933, invested many expectations in the new League of Nations as a forum for resolving international conflicts without violence. There was a widespread fear of militarism and suspicion of the armaments industry, ensuring that the League had no effective means of stopping any future transgressors should moral persuasion or sanctions fail to work.

Source: Lindsay, 1979
Source: Lindsay, 1979.

Japanese aggression in northern China (above), followed a few years later by Italian imperialism in the Horn of Africa, was the League’s first crisis, and it failed in both cases. Statesmen who had lost relatives in the Great War, like Neville Chamberlain, or who had fought in it, like Lord Halifax, were loath to risk a future conflict over such issues as the fate of three million Sudeten Germans who claimed their human rights were being abused. The French PM, Daladier, had also fought in the war, and the French government adopted a defensive mentality, symbolised by the construction of the Maginot Line. It never occurred for a moment to anybody that the French behind their Maginot Line, an impregnably fortified strip stretching all across northern France to the Belgian border with hundreds of miles of underground workings, might turn out not to be a tower of military strength and virtue and the West’s main guarantor on land.

Rehearsal, Rearmament & Remilitarisation, 1935-37.

‘The Rehearsal’, as the contemporary journalist René Cutforth titled these preceding events in his 1976 retrospective Portrait of the Thirties, commenced in the early months of 1935, with Mussolini’s invasion of Abyssinia (Ethiopia). Hitherto it had not been thought necessary to consider Italy a hostile power. That position now changed, but though the Mediterranean fleet of the Royal Navy was superior to the Italian navy, Italian air attacks in the Mediterranean could be decidedly uncomfortable.

The British – their empire at its maximum extent – pondered how to balance multiple global military commitments against domestic demands for lower taxes and improved health and housing. Britain had been rearming, though by no means feverishly, since 1935, but there were still 1.6 million unemployed. By 1937, a large influx of refugees from Central Europe, primarily Jewish, into Britain, so large as to be noticed among the crowds on London streets. The number of intellectuals among the refugees was disproportionately large, but the ordinary refugees were unpopular, but not, except among Mosley’s blackshirts, violently so. The London intellectual attitude seemed much like that of Duff Cooper when he wrote, although I loathe anti-Semitism, I … dislike Jews. This was also the view of a large section of the British aristocracy at the time.

There were also strains of these attitudes in the Labour members of the National Government like the anti-Zionist Lord Passmore (Sidney Webb), whose laws restricted Jewish emigration to British-controlled Palestine. In addition, there were also echoes of petty anti-Semitism among ordinary Londoners like a well-known bus conductor on the Swiss Cottage run who expressed his feelings by bawling out ‘Swiss Cottage – Kleine Schweizer-Haus.’ Until Kristallnacht in the autumn of 1938, however, these expressions of anti-Semitism were mixed up with anti-German sentiments, which survived among older generations who had directly experienced the 1914-18 war. The children of the Kindertransports of 1938-39, pictured below, generally received a warm British welcome from their foster parents and broader society.

The main strands of German foreign policy in the first three years of Hitler’s chancellorship were remarkably different from the foreign policy constellation created in 1937. The first signs of a new era came in October 1933, when Hitler took Germany out of the League of Nations and the Disarmament Conference at Geneva because it was still treated as a second-class citizen in the other capitals of Europe. Hitler agreed to plans for expanding the military already laid before 1933 and authorised the secret development of an air force. Forms of military training were introduced in the guise of youth movements and the numerous ‘gliding clubs’ which provided the first volunteers to fly Germany’s forbidden aircraft. But Hitler approached foreign policy issues prudently so as not to provoke Allied intervention. Like every state affected by the international economic slump, the Nazi régime wanted to stabilise and revive economic life before pursuing a more active policy abroad. In Mein Kampf and his second book, written in 1928, Hitler argued that German interests would best be served by an alliance with Britain, which would give Germany a free hand in Continental Europe, particularly in the conquest of ‘living-space’ (Lebensraum) in the east. After 1933 he looked for an improvement in Anglo-German relations with economic and trade agreements, which meant that Britain was the only major state to keep credit lines open to Germany throughout the 1930s.

Source: Overy.

By the terms of the Treaty of Versailles, the Saar Basin, rich in iron ore, was to be governed by the League of Nations for fifteen years. In January 1935, the time had come for the Saarlanders to vote on whether they wished to be reunited with Germany, become part of France, or remain under the League. Most Saarlanders were German and therefore likely to vote in favour of a reunion with Germany, despite the rumours already spreading about Nazi methods. Nevertheless, the Nazis organised an ‘excellent’ propaganda campaign, and the result was overwhelming. More seriously, later that March, Hitler reintroduced conscription and an airforce, both forbidden in 1919.

Source: Overy (see source list below).

Source: Overy

Hitler declared that he intended to raise an army of 550,000, involving a complete reorganisation of Germany’s small but well-trained army, which alarmed his generals. In reality, for the next two years, Hitler was in no position to fight if opposed. Britain came to his aid by reaching an agreement over naval armaments in June 1935. It was thought quite sensible to sign this Anglo-German Naval Agreement because it restricted the German fleet to thirty-five per cent of the Royal Navy’s surface fleet and forty-five per cent of its submarines. Supposing that this agreement would be honoured, it made it more feasible to think of sending a fleet to Singapore to act as a deterrence to Japanese expansion in the Far East. Britain also did little in response to Hitler’s rearmament declaration. All the time, there was a balance to be struck between the claims of the Far Eastern empire and those of Europe.

Source: Richards et al., see source list below.

A rally to celebrate the Saar plebiscite.

The 1935 Referendum in the Saarland, rearmament and the remilitarisation of the Rhineland rapidly persuaded Hitler to widen his ambitions. At this point, his relations with Italy and Japan were not as favourable as they were to become. The German Foreign Office preferred to continue to develop its extensive trading links with China. Italy looked at a resurgent Germany to the north with some anxiety, especially when fears were raised about an Anschluss which might threaten Italy’s Alpine territories. Only the rift between Italy and the western powers over the Ethiopian war of 1935/6 drove Hitler into opportunistic support for his fellow Fascist leader, Mussolini. In the east, Germany had concluded a Non-Aggression Pact with Poland in 1934, but the Nazis’ hatred of Marxism meant that it had only distant or hostile relations with the USSR until the dramatic ‘vault fáce’ of 1939. The distractions caused by the Spanish Civil War, the chaos unleashed in the Soviet Union by Stalin’s purges, and the reluctance of Britain and France to take the threat of German expansion seriously all combined to make his task substantially easier.

Rhineland remilitarisation, 1936. The areas marked in hatch were included in the demilitarised zone; those in dark green were areas occupied by the allies, 1923-30. The arrows mark the German advance.

The European nations had spent much of these months in 1935-36 distracted by events in Abyssinia, arguing over whether the League should impose sanctions on Italy, and what these should be. In February 1936, however, Eden had recommended to a committee of senior Cabinet members that Paris and London should enter into negotiations for the surrender of their rights in the ‘zones’ of the Rhineland under their control, while such surrender still has… a bargaining value.

Unfortunately for Anthony Eden, it was in that very month that Hitler determined upon an action that would remove that card from the British Foreign Secretary’s hand. Hitler seized his opportunity to unilaterally remilitarise the Rhineland on 7th March by sending forty thousand troops into the frontier territory.

Source: Irene Richards, 1937: “The map suggests that the settlement made at Versailles has failed completely to satisfy the needs of Europe. Not only has the defeated state of Germany openly repudiated the restrictive clauses of the Treaty, but the victor states, recognising that the collective security of the League Covenant is uncertain, have reverted to pre-War methods of forming alliances and piling up armaments. Two countries, Italy and Japan, have already undertaken military conquests in defiance of solemn treaty promises. … The principal developments in addition to Hitler’s repudiation of the Treaty of Versailles have been:
(a) the rapprochement of France and Soviet Russia… (b) The Re-armament of the Great Powers… (c) Anglo-German Rivalry.”

At the same moment, Hitler repudiated the Locarno Pact agreed over a decade earlier, using the excuse of the threat posed by a more recent agreement between France and Soviet Russia. The other Locarno powers were duped into believing that he would make a new agreement with them and perhaps even return to the League. Both Britain and France had been expecting that Hitler would raise the issue as a matter of negotiation. The British, Eden in particular, were annoyed not so much by the action itself as by the fact that Hitler would not now have to make any concession in return. A demilitarized Rhineland had been very important for French security, but the French government was initially hesitant in its reaction. A general election was soon to take place and France had no troops nor even plans for a counter-attack. Britain had no intention of fighting to uphold the Locarno treaties. In his post-war book, The Gathering Storm, Winston Churchill described the reaction of the leading British politicians to this first blatant breach of the terms of the Treaty of Versailles:

On Monday, March 9th, Mr Eden went to Paris accompanied by Lord Halifax and Ralph Wigram. The first plan had been to convene a meeting of the League in Paris, but presently Wigram… was sent to tell Flandin (French foreign minister) to come to London. … Flandin … arrived … and at about 8:30 on Thursday morning he came to my flat in Morpeth Mansions. He told me that he proposed to demand from the British Government simultaneous mobilisation of the land, sea and air forces of both countries, and that he had received assurances of support from all the nations of the ‘Little Entente’ and from other states. … There was no doubt that superior strength still lay with the Allies of the former war. They had only to act to win. Although we did not know what was passing between Hitler and his generals, it was evident that overwhelming force lay on our side. …

Mr Chamberlain was at this time, as Chancellor of the Exchequer, the most effective Member of the Government. His able biographer, … gives the following extract from his diary:

‘March 12, talked to Flandin, emphasising that public opinion would not support us in sanctions of any kind. His view is that if a firm front is maintained, Germany will yield without war. We cannot accept that as a reliable estimate of a mad Dictator’s reaction.’

W. S. Churchill, The Gathering Storm (1948), p. 168.

Hitler’s bluff had succeeded brilliantly and the leaders had surrendered their last chance of checking him without serious risk of war. As at least one historian has pointed out (Bell, 1986, p. 211), France had the opportunity to stop Hitler, but only by going to war. Had it taken this option, it might well have been successful; but the encounter would have been no pushover. However, German army sources have recently been discovered, suggesting that a withdrawal plan had been prepared for this eventuality, confirming Flandin’s view of the situation. In his New History of the Second World War, Andrew Roberts (2009) has shown that had the German army been opposed by the French and British forces stationed nearby, it had orders to retire back to base. Such a reverse would almost certainly have cost Hitler the Chancellorship. The fact remains, however, that there was not the will in France to undertake such an expedition. Equally certainly, there was no desire in Britain to support the French in such an operation. A former senior Liberal minister in the National Government, the Marquis of Lothian, reacted by saying, they are only going into their own back garden. The Western powers, riven with guilt about having imposed a ‘Carthaginian Peace’ on Germany in 1919, had allowed the Germans to enter the demilitarized zone designated under Article 180 of the Versailles Treaty, without any opposition. When Hitler sought to assure the Western Powers that Germany wished only for peace, the deputy leader of the Labour Party, Arthur Greenwood, told the House of Commons:

Herr Hitler has made a statement … holding out the olive branch … which ought to be taken at face value … It is idle to say that these statements are insecure.

The Re-occupation of the Rhineland. German troops march through the city of Karlsruhe.

Writing to his wife on 12th March, Harold Nicolson described the impact of the British reaction to the Rhineland Reoccupation on the Anglo-French alliance:

House of Commons: The French are not letting us off one jot or tittle of the bond. ‘The Covenant of the League has been violated. Locarno has been violated. We merely ask you to fulfill your obligations under those two treaties.’ We are thus faced with repudiation of our pledged word or the risk of war. The worst of it is that in a way the French are right … if we send an ultimatum to Germany, she ought in all reason to climb down. But then she will not climb down and we shall have war. Naturally we shall win and enter Berlin. But what is the good of that? It would only mean communism in Germany and France, and that is why the Russians are so keen on it. Moreover, the people of this country absolutely refuse to have a war. We should be faced with a general strike if we even suggested such a thing. We shall therefore have to climb down ignominiously and Hitler will have scored. We must swallow this humiliation as best we may, and be prepared to become the laughing stock of Europe. …

Harold Nicolson, Diaries and Letters, 1930-1939 (1967). pp. 249-50.

Retrospectively, the Rhineland crisis has been seen as the first conspicuous failure of appeasement. In one sense, it was, but it has also been stressed that the contemporary reaction was characterised by annoyance rather than failure. The concept of a demilitarised zone was an anachronism. It perpetuated the German sense of inferiority which precluded a deeper and more lasting settlement. On the other hand, it would probably have to be faced that once the militarization of the Rhineland had been completed, the scope of the French army would be that much further reduced. There was also the possibility that Belgium would return to neutrality, though the speed with which this subsequently occurred came as a surprise to London. Both of these developments forced British ministers to begin to reflect on the significance of France and the Low Countries for the security of Britain. However, no very positive action resulted. Hitler’s gamble had been justified and his generals, who had opposed it, had been proved wrong.

The re-orientation of German foreign policy coincided with the decision, taken in 1936, to launch large-scale German rearmament and the construction of a siege economy based on the policy of autarky, or self-sufficiency. Therefore, also in August, he drafted a document on German strategy (later known as the Four Year Plan Memorandum) which formed the basis of the reorientation of policy. Hitler wanted Germany to develop a ‘blockade-free’ economy in which materials for war would be produced at home instead of being imported. This policy of self-sufficiency, or autarky, was introduced with the formal establishment of the Four Year Plan organisation in October 1936. Over the following two years, the organisation initiated expensive programmes in basic chemicals, synthetic fuel and rubber, aluminium and iron-ore extraction, all designed to reduce German dependence on outside sources. The Plan also introduced a programme of improvement in German agriculture to ensure that Germany would not be starved into submission in a future war.

1936 marked a significant break in economic and military strategy for Germany. With the economic strategy, Hitler ordered a significant increase in military expenditure based on the expansion plans the forces’ chiefs had already drawn up in 1936. Germany adopted compulsory two-year military service and Hitler ordered the building of the Siegfried Line, a formidable series of defences along the Rhine and the Saar. With the economy back to the levels of the 1920s and the political stability of the régime more assured, Hitler was in a position to start rearming seriously and create an economy geared more closely to the conduct of large-scale warfare. Hitler’s programme imposed a faster pace and a larger scale, however.

Hermann Göring (right) was the ‘plenipotentiary’ of the Four Year Plan, announced amid much noisy propaganda at the Party Rally in Nuremberg in September. Its unpublished purpose was to prepare the economy and armed forces for war by the year 1940. It was about this time that Hitler began to drop clear hints to those of his entourage who were privy to the thoughts of the Führer about the prospect of a great war in the 1940s which would redraw the map of Europe in Germany’s favour. There was never a clearly articulated plan tied to this date, but, for example, coordinating a programme of labour retraining would ensure that the depth of skilled labour needed for a war economy would be in place by that time. Hitler was prepared to be flexible and to await opportunities. On a number of occasions, he indicated that the years 1943-45 were the point at which war was likely, even desirable. This was the date he gave at a meeting on 5th November 1937, called by Hitler in order to give his ‘executive’ a clear idea about his future strategy.

It was held in the Reich Chancellory. The details, set down in the so-called ‘Hossbach Memorandum’ (a record of the meeting later compiled by Hitler’s army adjutant, Colonel Friedrich Hossbach), indicated the immediate aims of incorporating Austria and destroying Czechoslovakia.

These ‘minutes’ also prove conclusively that the ‘Four Year Plan’ was part of Hitler’s wider ‘master plan’ incorporating economic, military and foreign policy strategies, albeit one which could be moved forward as opportunities presented themselves. The meeting lasted for nearly four hours and was intended to leave the senior executive officers of the Reich under no illusions as to where his plans were leading. The participants included General Werner von Blomberg (pictured above), who had been made the first field marshal of the Reich in 1936; General Werner von Fritsch, commander-in-chief of the Wehrmacht; Admiral Erich Raeder of the Navy and Göring, commander-in-chief of the Luftwaffe; and the Foreign Minister, Baron Konstantin von Neurath. The Führer began by stating that the purpose of the meeting could not be discussed before the Reich Cabinet just because of the importance of the matter. He then explained how the histories of the Roman and British Empires ‘had proved that expansion could be carried out only by breaking down resistance and taking risks.’ These risks, by which he meant short wars with Britain and France, would have to be taken before the period 1943-45, which he regarded as ‘the turning point of the régime‘ because, after that time…

“… the world would be expecting our attack and would be strengthening its counter-measures from year to year. It would be while the world was preparing its defences that we would be obliged to take the offensive.”

Domarus, Essential Hitler, p. 604.

Before then, in order to protect Germany’s flanks, Hitler intended to overthrow Czechoslovakia and Austria simultaneously and ‘with lightning speed’ in an Angriffskrieg (‘offensive war’). He believed that the British and French had already tactically written off the Czechs and that without British support, offensive action by France against Germany was not to be expected. Only after the speedy destruction of both Austria and Czechoslovakia and then Britain and France could he concentrate on the creation of a vast colonial empire in Europe.

Greater Germany & The Consolidation of Power:
&A German poster of 1939 charting the development of Grossdeutschland – Greater Germany. A Pan-German state had been the aim of many German nationalists since the period of unification in the mid-nineteenth century. Bismarck, a Prussian, created a small Germany in 1871: Hitler, an Austrian, created a large Germany by 1939. Bismarck’s Germany lasted for forty-seven years, Hitler’s only for six.

The apparent immediacy of these plans alarmed Blomberg and Fritsch, the latter even proposing to postpone his holiday, due to begin in a few days’ time. Both men ‘repeatedly emphasised that Britain and France must not become our enemies.’ Together, the pair might have prevented Hitler from carrying out the second part of the Hossbach plans, but Blomberg was forced to resign in January 1938 when it emerged that his new, young bride had been involved in pornography and prostitution in Berlin eight years earlier. The scandal briefly extended to Hitler and Göring, both of whom had stood witness for the couple at their wedding in the war ministry. A week later, Fritsch was also forced to resign when he was framed in another sex scandal, most likely by Heinrich Himmler, head of the SS, and General William Keitel, a devotee of Hitler. Hitler was swift in exploiting this potentially embarrassing situation by appointing no formal successor to Blomberg, taking over the role of war minister himself with Keitel as his Wehrmacht advisor, a man appointed for his sycophancy and total lack of personality and intellect. At the Nuremberg Trials, Keitel testified that:

“No one issued orders independently of Hitler. Of course I signed them … but they originated with Hitler. It was the wish and desire of Hitler to have all the power and command reside in him. It was something he could not do with Blomberg.”

Goldensohn, Nuremberg Interviews, p.158.

In replacing Blomberg with himself and Keitel, Hitler sealed his personal control over the German armed forces as early as the end of January 1938. Within days he carried out a massive reorganisation of the upper echelons of the military machine: twelve further generals were dismissed and the occupants of no fewer than fifty-one other posts were reshuffled. The way was now clear for Hitler to establish complete domination of Germany’s armed forces. Over the coming years, he would become more and more closely involved in every aspect of strategic decision-making through Keitel and his other equally obsequious deputy, Colonel Alfred Jodl. The German High Command was thus usurped by a man whom many of them admired as a politician and statesman but whose talent as a military strategy was a completely unknown quantity and quality.

“The new régime, particularly Göring, are masters in the art of party-giving.” Sir Henry ‘Chips’ Channon, ‘Diaries’.

Between 1936 and 1939, almost two-thirds of all industrial investment in Germany was devoted to the implementation of autarkic plans. The shift to large-scale armaments and a strategy of opportunistic expansion fundamentally altered Germany’s position in Europe, as the 1935 map below shows. So large were the plans for rearmament and economic development that neither the armed forces nor the economic administration thought them remotely feasible. The level of state debt increased sharply and the growth of living standards came virtually to a halt. The militarization of the economy forced a much higher level of state management and eroded the independence of private business. The price of extensive military commitment was a command economy and a distortion of Germany’s pattern of consumption and international trade.

Besides Göring, the other driving force behind the ‘change of gears’ was the Party’s self-proclaimed foreign policy expert, Joachim von Ribbentrop. He had helped to secure the Anglo-German Naval Agreement of 1935 and was sent as Hitler’s special representative in London to try to secure a wider British alliance. His aims, first as special commissioner, then from August 1936 as German ambassador, were frustrated not only by his own diplomatic ineptitude but also (and more seriously) by the unwillingness of the British government to make any substantial concession to the German position. There were eminent economists at hand to suggest to the British government that there was a good chance of the German economy crashing under the pressure of the four-year plan. Ribbentrop became a strident anglophobe during his years in London and he ultimately succeeded in turning Hitler against a British alliance. Ribbentrop was also keen to support Japan rather than China and was instrumental in setting up the Anticomintern Pact directed against International communism, signed on 25th November 1936. Italy joined a year later, despite Mussolini’s abiding distrust of German motives and manoeuvres. He was ‘wooed’ by both Ribbentrop and Göring, his isolation from the western democracies over Abyssinia and intervention in the Spanish Civil War already pushing him in Germany’s direction.

The Political Prelude in Britain – 1936-37 – Kings & Fascists:
The new king, George VI, his Queen, Elizabeth and his children Elizabeth, aged nine and Margaret, appeared on the balcony of Buckingham Palace after the Coronation in May 1937. Source: These Tremendous Years, 1919-38.

In the course of 1936 in Britain, three Kings had reigned and the unemployment figures were improving, but the political skies over the British Isles, Europe and the Far East were growing darker.

In 1937, George VI was crowned king, Ramsay MacDonald died, Baldwin retired, the British government announced that it had plans to evacuate the capital in a time of war and that air-raid shelters were to be built, and Wallis Simpson became Duchess of Windsor. Baldwin’s handling of the abdication meant that his image as a safe pair of hands was assured. It has been argued that Baldwin and Cosmo Lang, the Archbishop of Canterbury, had meant to get rid of Edward VIII all along. They had failed, through Godfrey Evans at the Palace and Thomas Jones, the Cabinet secretary, to stop his visit to the South Wales coalfield the previous October and his misreported remark in Dowlais, ‘terrible, terrible, something will be done about this,’ had further antagonised the government and ‘establishment’. The intelligence services continued to watch the former monarch and Mrs Simpson in exile on the continent, where the latter was already known to have Nazi friends via the German embassy in London.

Source: These Tremendous Years, 1919-38.

On 4th May 1937, a week before his brother’s coronation, Edward, now the Duke of Windsor, married Mrs Simpson near Tours in France. In October, the exiled couple met Hitler at his mountain villa in Berchtesgaden, near the Austrian frontier. While the Duchess chatted with the Nazi leaders, the Duke had a twenty-minute private conversation with Germany’s dictator. Criticism followed this action in making Germany the first country of a series visited in a tour he had planned to investigate social conditions. It was obvious to the Foreign Office that Hitler and Mussolini were drawing closer together, and it rightly believed that Hitler had his eye on annexing Austria, though this was not to become a reality until March 1938. But early in November, the first public speech since leaving England, the Duke told newspaper men in Paris that he was mystified by the ulterior motives attributed to his activities. He observed that:

“Though one may be in the lion’s den, it is possible to eat with the lions if on good terms with them.”

But the political connotations of this ill-advised trip were clear, even if discounted by the Duke himself. Before the abdication, Baldwin had already threatened that the Cabinet would resign if King Edward went against his advice in pursuing these personal links. Now his subsequent visit left diplomats and politicians like Harold Nicolson considerably on edge. He himself had refused to travel through Germany ‘because of Nazi rule’, telling ‘Chips’ Channon that:

We stand for tolerance, truth, liberty and good humour. They stand for violence, oppression, untruthfulness and bitterness…’

These were distinguishing traits which he obviously felt had eluded the notice of the Windsors. It must have confirmed for Harold what many others suspected: that the Windsors had fallen heavily for the champagne-like influence of von Ribbentrop. The Duke’s views were well-known and were to come to the fore following the Fall of France in May-June 1940. Like some in Whitehall, he favoured a negotiated peace with Nazi Germany, and the Germans were almost certainly aware of this. With Ribbentrop at the helm, they plotted to keep the Duke in occupied Europe and reinstate him as King once they had conquered Britain. However far-fetched a prospect this might be, after May 1940, Churchill refused to allow Duke back into England. Instead, he dispatched him to the Bahamas to be governor there, where he remained until 1945. Rumour had it that Ribbentrop “had used Mrs Simpson.” More seriously, Chips Channon had admitted that the new King, George VI, was also, before the outbreak of war, going the dictator way, and is pro-German, against Russia and against too much slip-shod democracy. More recently, it has been suggested that Edward differed in many aspects from the government’s foreign policy and foolishly allowed his tongue to wag in an ‘unconstitutional’ fashion. In Germany, his indiscretions created an impression of warm sympathy for the Nazi state’s people and an exaggerated idea of the Duke of Winsor’s power and influence. But there is no evidence to suggest that the former King’s views, however pro-German, influenced British government policy before or after 1940. After due consideration, Harold Nicolson concluded that Edward believed more than he should have in German integrity and in his ability to influence the course of events.

Fascism in Britain, for all the passions it aroused in 1936-37, had limited influence on either domestic politics or foreign policy. Certainly, in Bethnal Green, Stepney and Limehouse in the East End of London more generally, it gained some temporary working-class support in the form of Oswald Mosley’s uniformed BUF (British Union of Fascists), partly in response to the increase in the number of Jewish refugees from central Europe. But, following the well-remembered ‘Battle of Cable Street’ in 1936, the National Government banned para-military style marches and much of the appeal of Mosley’s black shirts among London’s poor evaporated. Fascism returned to being primarily an aristocratic preoccupation with continental events.

Wherever fascism was strong, as it was in East London, the opposition was also very strong and could be violent. While Limehouse had a significant fascist vote, it was still the safe seat of Labour Party leader, Clement Attlee. Source: Briggs (see below).
The End of the Baldwin-MacDonald Era & ‘effective deterrence’:

By 1937, Baldwin’s physical and mental state was worn down by these events at home and abroad. It was time for him to retire. Not enough has been made of his utter weariness in attempting to hold together a foreign policy threatened by/from Japan, India, Palestine, Germany, Russia, Italy, and Spain. Added to that the domestic difficulties over the economy and the political in-fighting at Westminster, it is hardly surprising that the veteran leader was exhausted. Many far younger leaders would no doubt have felt similarly. Baldwin looked around and decided that he had done almost everything that could have been done to prepare the country for war. In February, he delivered the Defence White Paper. MacDonald’s unilateral disarmament policy was considered to be a failed policy, and Baldwin had laid down guidelines for a new policy of deterrence because, as he told the House of Commons, ineffective ‘deterrence is worse than useless’. For the first time, money would have to be borrowed to pay for national defence. In April, the National Defence Contribution Tax was introduced. It was supposed to be revenue taken exclusively from arms manufacturers, but it proved unworkable and had to be replaced with a five per cent profits tax. The money to pay for Britain’s defences was supposed to be either in place or in the pipeline of the Treasury.

On 28 May 1937, Balwin resigned and was succeeded by Neville Chamberlain, the son of the great radical of the turn of the century, Joseph Chamberlain and half-brother of Austen, one of the Nobel-prize-winning architects of the Locarno Pact, who died later in 1937. Neville was now in his late sixties and had been a reforming Minister of Health and Local Government in the 1920s and, from 1931, Chancellor of the Exchequer. He was therefore well aware of local economic and social conditions throughout Britain as well as the overall state of the economy and the industrial influences upon it. But he was a very ordinary national politician at a time when the country needed an extraordinary leader. He had no great grasp of foreign affairs, though he understood Germany better than many gave him credit for. His reputation is that of an ‘appeaser’ but it could be that he was simply aware that Britain was not yet ready for war. Nevertheless, RAF aircraft delivery rates were increasing, and those shipyards that could were working exclusively on military tonnage. This was to be the biggest naval programme since the Great War.

Chamberlain’s Cabinet was still a National Government. Anthony Eden was the Foreign Secretary and the only member of the government to be trusted by the Foreign Office. Chamberlain probably understood what was going on abroad even if he knew less of what Britain should do about it. The internecine warfare in Whitehall did not help in this respect. Sir Robert Vantissart, the senior civil servant at the Foreign Office, practised the most arrogant form of Whitehall. His position was clear: German ambitions must be resisted and loudly. So he dropped hints to well-known ‘rousers’ including Churchill and the editors in Fleet Street, who stirred up the debate on what Britain should do about Hitler. Whatever the spinning and leaking, only Chamberlain and his inner Cabinet carried the responsibility for going to war, and for the time being, they had other matters to deal with, especially with Ireland and Palestine.

Economic Appeasement and Rearmament in Britain, 1936-40.
Source: Briggs (see below).

While the interwar years saw thriving new industries in car production, electronics and chemicals, old industries such as shipbuilding, coal, steel and textiles were badly hit by the world economic slump. Unemployment and wage cuts led to protests in the form of hunger marches. It was only in late 1937 that Rearmament began to provide significant numbers of jobs in depressed areas. The only major enterprise to be located in the South Wales Special Area before that date was that of Richard Thomas & Co. Ltd., who agreed to establish blast furnaces, a steel plant and a continuous strip mill at Ebbw Vale in 1935. This employed several thousand workers at the site of the old steel works, which had closed in 1929, leading to mass migration out of the valley area, with some two thousand steel workers thrown onto the dole. The Treforest Trading Estate Company was formed in 1936, and by the end of 1938, seventy-two firms were assisted in settling in different parts of the Special Area, fifty-one of them at Treforest. Shortly before the outbreak of war, the estate was providing employment for 2,500 workers at twenty factories under the direction of refugee industrialists from Austria and Czechoslovakia. Some industrialists were sceptical that workers…

… accustomed only to heavy work would find it too difficult to adapt themselves to the more delicate work demanded in the call for high precision.

This problem was countered in two ways: Firstly, one skilled refugee worker was employed for every twenty-five local workers, and secondly, the majority of local workers were women. By the end of June 1939, there were only 914 men out of a workforce of 2,196 at Treforest. Thus, it was not until 1939 that the economy was slowly transformed and put on a war footing. In South Wales, this was aided by government rearmament through the siting of Royal Ordnance Factories at Bridgend and elsewhere. However, this initially grudging policy shift did not occur until the end of a decade of mass unemployment and migration. Appointed in 1937, the Barlow Commission On the Distribution of the Industrial Population did not complete its work until August 1939 and its report was not published until the end of the year. By then, the need for regional planning had been finally accepted in response to the threat of aerial warfare from the continent, making London and the South East region especially vulnerable to bombing:

It is not in the national interest, economically, socially, or strategically, that a quarter, or even a large proportion of Great Britain should be concentrated within twenty to thirty miles or so of Central London.

Barlow Report, pp. 152-3.

Although by 1937, a national political consensus had finally accepted that the transference of workers from the depressed areas to the new industry areas should no longer be the main response of the government to the problem of mass unemployment, this still did not bring about an immediate end to the policy or the continued exodus of workers from the ‘Special Areas’. The rearmament boom was swallowing up more and more labour. Protests were still heard, especially from Welsh Nationalists, who compared the continuing operation of the policy to Hitler’s actions against the Czechs as just another Fascist way of murdering a small defenceless nation without going to war about it. The theme was repeated in y Blaid’s 1943 pamphlet Transference Must Stop. War-time transference was, however, conducted under emergency labour controls, and by the time of the occupation of Prague in 1939, the Transference policy had ceased to occupy centre stage.

The Era of Rearmament & The Gathering Storm, 1937-38:

In seeking to balance the emphasis of traditional historiography on politics and diplomacy, more recent historians of interwar Britain have come to focus more on the nature of the British economy in the 1930s and its implications for foreign policy. However, there is a danger that every political decision can be thought to have a primary economic cause. Keith Robbins has suggested that looking for underlying prevailing attitudes in the political, financial and economic spheres makes more sense. In 1932, the National Government had formally abandoned the ‘Ten Year Rule’ of 1919, whereby the armed forces were told to prepare their estimates on the assumption that there would not be a great war involving the British Empire for ten years. But there was no immediate action to increase defence expenditure due largely to a widespread though ill-defined ‘pacifism.’ These political difficulties were compounded by economic ones. In a general atmosphere of continuing economic uncertainty, ‘confidence’ would best be boosted by very modest defence expenditure. The figure for 1932 had been the lowest since 1919.

Since the British wished to avoid war, they would obviously not themselves seek to precipitate it. The Treasury, with Neville Chamberlain as Chancellor of the Exchequer, had their sights primarily set on assisting the economic recovery, which had only begun in 1933. It would jeopardise that revival to shift resources on a massive scale into ‘rearmament.’ At the time, there was a genuine fear that that would lead to a further economic crisis like that of 1931. Sir Warren Fisher, the Permanent Secretary to the Treasury, was acutely conscious of the need to be able to deal with ‘foreign gangsters’, but he also feared an economic ‘smash.’ In reaction to this dilemma, it was often thought that it was best to keep potential enemies guessing about Britain’s intentions, which was Eden’s position. The alternative course was to seek to create a war economy in peacetime, as Germany was doing by 1936, regardless of the broader economic and social consequences. In a democracy like Britain, although Defence expenditure was an absolute commitment, this could only be justified on the basis of economic performance or wartime requirements.

That was the dilemma, and in these circumstances, it was thought that the best solution was to keep potential enemies guessing about Britain’s intentions. The British Defence Requirements Committee advocated increased expenditure and talked of being ready for a war in early 1939. But it also drew attention to what was believed to be a massive expansion of the Luftwaffe. The Germans, they reported, might be able to inflict such damage within a matter of weeks that a collapse of civilian morale would occur on a scale which would make it impossible for Britain to continue to resist. Such observations, and many others like them over the next two years, all seemed to point to one central conclusion: appeasement must continue. Nevertheless, the first turning point in economic policy also arrived in 1936-37.

Gradually, the consensus in the House of Commons necessary to maintain the rearmament programme was being reached. The Labour Party found it difficult to vote for increased defence spending but agreed to abstain rather than vote against, but enough Labour MPs refused to abstain for newspapers to claim that the party itself opposed rearmament. Chamberlain’s personal dilemma was that although he saw the logic of rearmament, he saw that there were too many expensive domestic issues that remained unresolved. However, this was no more than a clue to Chamberlain’s approach to Hitler during 1937-38. He saw as simple logic the fact that Germany would, if left alone, become the controlling power in eastern Europe, given the practical politics of Europe and the undeniable power of Nazism. In truth, Chamberlain’s greatest flaw was that he appeared incapable of thinking beyond day-to-day politics and therefore came up with mundane solutions to problems. He had no vision beyond these.

The Local Industrial Economy & Rearmament – The Case Of Coventry:

Whereas immigration into the car and service industries in Oxford spiked in the late twenties and early thirties, then remained fairly even throughout the thirties, in Coventry, these peaks were highest in the late thirties, from mid-1936/37 to 1938/39, when twelve to thirteen thousand immigrants were being added every year. Between 1931 and 1938, the city’s total population increased by twenty per cent compared with an increase of three per cent for Great Britain as a whole. Much of this growth occurred between 1935 and 1939, when the total population rose from 190,000 to nearly 235,000. High wages in the ‘shadow’ factories continued to attract voluntary migration at least until the Blitz on London and other English cities in the autumn of 1940.

As early as 1936, it became obvious that if Britain were to be involved in another European war, then Coventry’s economic strengths were precisely those that would be essential to the pursuit of modern warfare. In that year, a group of the city’s industrialists, including John Black (of the Standard company), William Rootes and Alfred Herbert, became involved in planning Shadow Factories with Whitehall officials. The city was to be heavily involved in aircraft engine construction, namely the Mercury and later the Pegasus for the lightweight Blenheim bomber, and consequently, four Shadow Factories were built in and around the City boundaries between 1936 and 1937. Over the space of two years, some four thousand aircraft engines were made. Clearly insufficient to meet the RAF’s needs, especially with the introduction of the Hurricane and Spitfire fighters and the Whitley, Stirling and Lancaster bombers, increased factory space to produce new and more powerful engines was imperative and so once again Daimler, Rootes, and Standard became involved in the war effort in a major way.

Coventry’s dramatic population growth continued in the second half of the thirties due to government contracting in the aircraft industry through the abandonment of its ‘Business as Usual’ Rearmament Policy in 1938. This enabled the building of ‘shadow’ factories under the Ministry of Defence contracts next to the new car factories on the outskirts of Coventry. To begin with, the new labour requirements of these factories were substantially met by men who were ‘stood off’ from the motor industry, which was suffering from the general recession in the engineering industries of 1937-38. However, this supply was soon exhausted and a crisis meeting of the directors of Coventry firms was called in May 1939…

… to consider the question of the shortage of skilled labour in Coventry, earnings of workpeople and the housing position, in view of the proposal to extend the shadow factories in Coventry, involving the employment of five to six thousand further workpeople…

Coventry Engineering Employers’ Association (EEA) Minutes, 22 May.

At their meeting the following October, the EEA heard reports of members struggling to control the ‘poaching’ of key workers. They agreed to urge the National Government to obtain additional employees from other areas. From the mid-thirties, average earnings for engineering workers in Coventry were easily the highest in the Midlands, so much so that firms in Birmingham were complaining. In 1937, this disparity was still very much in evidence and the subject of continuing complaints against the Association from employers elsewhere, but the EEA agreed that there was very little to be done locally to rectify the situation as labour was in such short supply. In September of the following year, it was claimed that the basic rate of the labourer and earnings of the skilled worker in the district was the highest in the country. The combination of high earnings, greater job secretary and better conditions prompted increasing numbers of migrant workers to choose Coventry as their destination by the late thirties. Many younger men were lured to Coventry as a city of high earnings and away from other centres following the general recovery of 1933-34. Added to this was the seasonal nature of work in many car factories, even where the basic weekly wage was good. Nonetheless, the improvement in earnings during the 1930s is strikingly evident in the following extract from John Yates’ pamphlet:

1933, dole and means test; 1934 employment… as skilled machinist, found without much difficulty; 1935, “if you know a few good men, Jack, get ’em to come and work for me, I’ll see you alright for it “; 1936, “I see they’re advertising in the News Chronicle – up to seven pounds a week guaranteed”… In 1936 it was “up to nine pounds a week!”

J. A. Yates, Pioneers to Power: Story of the Ordinary People of Coventry.

However, it is important to recognise that the housing shortage and the high cost of living in the new industry towns could be a major deterrent to successful settlement there. More fundamentally, in Oxford, the delay in the conversion of the Cowley factories to war production meant that whilst Coventry was gaining workers rapidly, Oxford was losing them, many probably its fellow manufacturing ‘magnet.’ Housing was an important aspect of this; the Nuffield Survey’s war-time report on Coventry and East Warwickshire of September 1941 found that, even after the November 1940 Blitz of the city, the City’s sixty thousand houses and shops were a goodly number for the population … the great majority of houses provided accommodation superior to the average for the whole country.

By 1944, when all the Shadow Factories were fully operational, their combined output was in the region of eight hundred engines a month, quadrupling the output target originally set in 1936. Siddeley’s or Hawker Siddeley as the firm became known, had a workforce of over ten thousand strong in 1944. and had by that time turned out 550 Lancaster and 150 Stirling bombers. Other city firms contributed all kinds of war materials. Coventry Climax, for instance, built twenty-five thousand trailer pumps as well as a large number of generators. Daimler produced a series of Scout cars, Dunlop made tyres, wheels and barrage balloons, anti-gas clothing and underwater swimming suits. At the nexus of much of this was the city’s machine tool firms, all of whom increased output, modified existing and produced new tools to meet the ever-pressing demands made upon them. Between 1939 and 1944, Herbert’s produced over sixty-eight thousand machine tools.

In 1937, the Defence Chiefs had calculated that if Britain were to find itself simultaneously at war with Germany, Italy and Japan, it would lose. The military leaders, therefore, looked to foreign policy to avoid such a contest. In the meantime, a ‘steady as she goes’ rearmament programme might have seemed safer, but it might also make it more difficult to accelerate ‘when the time comes.’ With the benefit of hindsight, we may observe that the time came sooner than the politicians, diplomats and military leaders thought, and in 1939-40 it was left to industrialists and engineering workers, among others, to accelerate rearmament in order to make up for the lost time.

(to be continued… )


Andrew J Chandler (1988), The Re-making of a Working Class: Migration from the South Wales Coalfield to the New Industry Areas of the Midlands, 1920-40. Unpublished PhD thesis, University of Wales (Cardiff).

Keith Robbins (1988), Appeasement. Oxford: Blackwell Publishers.

Richard Brown & Christopher Daniels (1982), Documents & Debates: Twentieth-Century Britain. Basingstoke: Macmillan Education.

Richard Overy (1996), Historical Atlas of the Third Reich. Harmondsworth: Penguin Books.

Andrew Roberts (2010), The Storm of War: A New History of the Second World War. London: Penguin Books.

Asa Briggs, et. al., (2001), The Penguin Atlas of British & Irish History. London: Penguin Books.

Norman Rose (2005), Harold Nicolson. London: Pimlico (Random House).

René Cutforth (1976), Later Than We Thought: A Portrait of the Thirties. Newton Abbot: David & Charles.

Michael Clark & Peter Teed (eds.) (1972), Portraits & Documents: The Twentieth Century, 1906-1960. London: Hutchinson Educational.

Christopher Lee (1999/2000), This Sceptered Isle: Twentieth Century. Harmondsworth: Penguin Books (BBC Worldwide).

Bill Lancaster & Tony Mason (eds.) (1987), Life and Labour in a Twentieth-Century City: The Experience of Coventry. Coventry: University of Warwick Cryfield Press.

Irene Richards, J. B. Goodson & J. A. Morris (1938), A Sketch-Map History of the Great War & After, 1914-35. London: George Harrap & Co.

Unknown author/ publisher (1938), These Tremendous Years. Printed in London & Northampton, 1938.

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