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Authors: Niall Ferguson
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In an effort to put a stop to the policy of internment, Hobhouse returned to England but she found the War Office more or less indifferent. Only reluctantly did the government agree to appoint a committee of women under Millicent Fawcett to investigate Hobhouse’s claims, and she was pointedly excluded from it. Incensed, she sought to return to South Africa but was not even allowed to go ashore. Now her only weapon was publicity.
Conditions in the camps went from bad to worse during 1901. In October a total of 3,000 inmates died, a mortality rate of more than a third. This was not a deliberately genocidal policy; rather it was the result of disastrous lack of foresight and rank incompetence on the part of the military authorities. Nor was the Fawcett Commission as toothless as Hobhouse had feared: it produced a remarkably hard-hitting report and secured rapid improvements in medical provision in the camps. Although Chamberlain refused to criticize the War Office publicly, he too was shocked by what Hobhouse had revealed and hastened to transfer the camps to the civilian authorities in South Africa. With striking speed, conditions improved: the mortality rate fell from 34 per cent in October 1901 to 7 per cent in February 1902 and just 2 per cent by May.
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Milner at least was contrite. The camps, he admitted, were ‘a bad business, the one thing, as far as I am concerned, in which I feel that the abuse so freely heaped upon us for everything we have done and not done is not without some foundation’. But contrition, no matter how sincere, could not undo the damage. Hobhouse’s revelations about the camps triggered a bitter public backlash against the government. In Parliament the Liberals seized their chance. Here at last was the perfect opportunity to wade into the coalition of Tories and Chamberlainites that had dominated British politics for nearly two decades. As early as June 1901 Sir Henry Campbell-Bannerman, the party’s leader, denounced what he called the ‘methods of barbarism’ being used against the Boers. Speaking in the Commons, David Lloyd George, the darling of the party’s radical wing, declared:
A war of annexation ... against a proud people must be a war of extermination, and that is unfortunately what it seems we are now committing ourselves to – burning homesteads and turning women and children out of their homes ... the savagery which must necessarily follow will stain the name of this country.
It did.
Not only was imperialism immoral, argued the critics. According to the Radicals, it was also a rip-off: paid for by British taxpayers, fought for by British soldiers, but benefiting only a tiny elite of fat-cat millionaires, the likes of Rhodes and Rothschild. That was the thrust of J. A. Hobson’s profoundly influential
Imperialism: A Study
, published in 1902. ‘Every great political act’, argued Hobson, ‘must receive the sanction and the practical aid of this little group of financial kings’:
Imperialism: A Study
, published in 1902. ‘Every great political act’, argued Hobson, ‘must receive the sanction and the practical aid of this little group of financial kings’:
As speculators or financial dealers they constitute ... the gravest single factor in the economics of Imperialism ... Each condition ... of their profitable business ... throws them on the side of Imperialism ... There is not a war ... or any other public shock, which is not gainful to these men; they are harpies who suck their gains from every sudden disturbance of public credit ... The wealth of these houses, the scale of their operations, and their cosmopolitan organization make them the prime determinants of economic policy. They have the largest definite stake in the business of Imperialism, and the amplest means of forcing their will upon the policy of nations ... [F]inance is ... the governor of the imperial engine, directing the energy and determining the work.
Henry Noel Brailsford took Hobson’s argument further in his
The War of Steel and Gold: A Study of the Armed Peace
(written in 1910, but not published until 1914). ‘In the heroic age’, Brailsford wrote, ‘Helen’s was the face that launched a thousand ships. In our golden age the face wears more often the shrewd features of some Hebrew financier. To defend the interests of Lord Rothschild and his fellow bondholders, Egypt was first occupied, and then practically annexed by Great Britain ... The extremest case of all is, perhaps, our own South African War’. Was it not obvious that the Boer War had been fought to ensure that the gold mines of the Transvaal remained securely in the hands of their capitalist owners? Was not Rhodes merely, in the words of the Radical MP Henry Labouchere, an ‘Empire jerry-builder who has always been a mere vulgar promoter masquerading as a patriot, and the figure-head of a gang of astute Hebrew financiers with whom he divides the profits’?
The War of Steel and Gold: A Study of the Armed Peace
(written in 1910, but not published until 1914). ‘In the heroic age’, Brailsford wrote, ‘Helen’s was the face that launched a thousand ships. In our golden age the face wears more often the shrewd features of some Hebrew financier. To defend the interests of Lord Rothschild and his fellow bondholders, Egypt was first occupied, and then practically annexed by Great Britain ... The extremest case of all is, perhaps, our own South African War’. Was it not obvious that the Boer War had been fought to ensure that the gold mines of the Transvaal remained securely in the hands of their capitalist owners? Was not Rhodes merely, in the words of the Radical MP Henry Labouchere, an ‘Empire jerry-builder who has always been a mere vulgar promoter masquerading as a patriot, and the figure-head of a gang of astute Hebrew financiers with whom he divides the profits’?
Like those modern conspiracy theories which explain every war in terms of the control of oil reserves, the Radical critique of imperialism was an oversimplification. (Hobson and Brailsford little knew what a liability Rhodes had been during the siege of Kimberley.) And like those other modern theories that attribute sinister power to certain financial institutions, some anti-imperialism conveyed more than a hint of anti-Semitism. Nevertheless, when Brailsford called it ‘a perversion of the objects for which the State exists, that the power and prestige, for which all of us pay, should be used to win profits for private adventurers’, he was not entirely wide of the mark. ‘We are engaged in Imperial trading’, he wrote, ‘with the flag as its indispensable asset, but the profits go exclusively into private pockets’. That was substantially true.
Most of the huge flows of money from Britain’s vast stock of overseas investments flowed to a tiny elite of, at most, a few hundred thousand people. At the apex of this elite was indeed the Rothschild Bank, whose combined capital in London, Paris and Vienna amounted to a staggering £41 million, making it by far the biggest financial institution in the world. The greater part of the firm’s assets was invested in government bonds, a high proportion of which were in colonial economies like Egypt and South Africa. Nor is there any question that the extension of British power into those economies generated a wealth of new business for Rothschilds. Between 1885 and 1893, to give a single example, the London, Paris and Frankfurt houses were jointly responsible for four major Egyptian bond issues worth nearly £50 million. What is even more conspicuous is the closeness of the relationships enjoyed by the Rothschilds with the leading politicians of the day. Disraeli, Randolph Churchill and the Earl of Rosebery were all in various ways connected to them both socially and financially. The case of Rosebery – who served as Foreign Secretary under Gladstone and succeeded him as Prime Minister in 1894 – is particularly striking, since in 1878 he actually married Lord Rothschild’s cousin Hannah.
Throughout his political career, Rosebery was in regular communication with male members of the Rothschild family, a correspondence which reveals the intimacy of the connections between money and power in the late Victorian Empire. In November 1878, for example, Ferdinand de Rothschild suggested to Rosebery: ‘If you have a few spare thousand pounds (from £9 – 10) you might invest them in the new ... Egyptian loan which the House brings out next week’. When he joined the government following the news of Gordon’s death at Khartoum, Lord Rothschild wrote to him in revealing terms: ‘[Y]our clear judgments and patriotic devotion will help the Govt. and save the country. I hope you will take care that large reinforcements are sent up the Nile. The campaign in the Soudan must be a brilliant success and no mistake’. In the fortnight after he joined the government, Rosebery saw members of the family on at least four occasions, including two dinners. And in August 1885, only two months after Gladstone’s resignation had temporarily removed him from office again, Rosebery was allotted £50,000 of the new Egyptian loan issued by the London house. When he became Foreign Secretary, Lord Rothschild’s brother Alfred assured him that ‘from all sides & even distant climes we hear nothing but great satisfaction at the nomination of the new Minister of Foreign Affairs’.
Though it is hard to find conclusive evidence that the Rothschilds benefited materially from Rosebery’s policy when he was in office, there was at least one occasion when he undoubtedly did give them advance warning of an important diplomatic decision. In January 1893 he used Reginald Brett to communicate to New Court the government’s intention to reinforce the Egyptian garrison. ‘I saw Natty [Lord Rothschild] and Alfred’, reported Brett,
and told them that you were much obliged to them for having given you all the information at their disposal, and therefore wished them to know [of the reinforcement] before reading it in the papers ... Of course they were delighted and most grateful. Natty wished me to tell you that all the information and any assistance which he can give you is always at your disposal.
Nor was Rosebery the only politician who failed to achieve the complete separation of his private and public interests. One of the principal beneficiaries of the occupation of Egypt was none other than Gladstone himself. In late 1875 – possibly just before his rival Disraeli’s purchase of the Suez Canal shares – he had invested £45,000 in the Ottoman Egyptian Tribute loan of 1871 at a price of just 38.
88
He had added a further £5,000 by 1878, and a year later invested a further £15,000 in the 1854 Ottoman loan, which was also secured on the Egyptian Tribute. By 1882, these bonds accounted for more than a third of his entire portfolio. Even before the military occupation of Egypt, these proved a good investment: the price of the 1871 bonds rose from 38 to 57 in the summer of 1882. The British takeover brought the Prime Minister still greater profits: by December 1882 the price of 1871 bonds had risen to 82. In 1891 they touched 97 – a capital gain of more than 130 per cent on his initial investment in 1875 alone. Small wonder Gladstone once described Turkish state bankruptcy as ‘the greatest of all
political
crimes’. And was it entirely without significance that the British Agent and Consul-General in Egypt for nearly a quarter of a century after 1883 was a member of the Baring family – second only to the Rothschilds among City dynasties?
88
He had added a further £5,000 by 1878, and a year later invested a further £15,000 in the 1854 Ottoman loan, which was also secured on the Egyptian Tribute. By 1882, these bonds accounted for more than a third of his entire portfolio. Even before the military occupation of Egypt, these proved a good investment: the price of the 1871 bonds rose from 38 to 57 in the summer of 1882. The British takeover brought the Prime Minister still greater profits: by December 1882 the price of 1871 bonds had risen to 82. In 1891 they touched 97 – a capital gain of more than 130 per cent on his initial investment in 1875 alone. Small wonder Gladstone once described Turkish state bankruptcy as ‘the greatest of all
political
crimes’. And was it entirely without significance that the British Agent and Consul-General in Egypt for nearly a quarter of a century after 1883 was a member of the Baring family – second only to the Rothschilds among City dynasties?
Revulsion against the government’s methods of fighting the war combined with mounting anxiety about the soaring cost of the conflict and dark suspicions about who its beneficiaries might be. The result was a political sea change. The government, now led by Salisbury’s nephew, the brilliant but fundamentally frivolous Arthur Balfour, was deeply divided over how best to pay for the war. Fatally, as it proved, Chamberlain seized the moment to argue for a restoration of protectionist tariffs. The idea was to turn the Empire into a Customs Union, with common duties on all imports from outside British territory: Chamberlain’s catch-phrase for the scheme was ‘Imperial Preference’. The policy had even been tried out during the Boer War, when Canada had been exempted from a small and temporary duty on imported wheat and corn. This was yet another bid to turn the theory of Greater Britain into political practice. But to the majority of British voters it looked more like an attempt to restore the old Corn Laws and put up the price of food. The Liberals’ campaign against imperialism – now widely regarded as a term of abuse – culminated in January 1906 with one of the biggest election landslides in British history, when they swept into power with a majority of 243. Chamberlain’s vision of a people’s Empire seemed to have dissolved in the face of the old, insular fundamentals of British domestic politics: cheap bread plus moral indignation.
Yet if the Liberals hoped they would be able to pay voters an anti-imperial peace dividend they were swiftly disappointed, for a new threat to the security of the empire was now unmistakably looming. It was not a threat from disaffected subjects – though the gathering storm in Ireland for a time loomed much larger – but from a rival empire just across the North Sea. It was a threat not even the peace-loving Liberals could afford to ignore. And, by a singular irony, it was a threat posed by the one people whom both Cecil Rhodes and Joseph Chamberlain (to say nothing of Karl Pearson) had regarded as the English-speaking race’s equals. The Germans.
BOOK: Empire: The Rise and Demise of the British World Order and the Lessons for Global Power
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