One of the questions that arose during this meeting was whether British national insurance should work, like the German system, on the "dividing-out" principle, or should follow the example of private insurance in accumulating a large reserve. Lloyd George favoured the first method, but Braithwaite fully supported the alternative system. (3) He argued: "If a fund divides out, it is a state club, and not an insurance. It has no continuity - no scientific basis - it lives from day to day. It is all very well when it is young and sickness is low. But as its age increases sickness increases, and the young men can go elsewhere for a cheaper insurance." (4)

The debate between the two men continued over the next two months. Lloyd George argued: "The State could not manage property or invest with wisdom. It would be very bad for politics if the State owned a huge fund. The proper course for the Chancellor of the Exchequer was to let money fructify in the pockets of the people and take it only when he wanted it." (5)

Eventually, in March, 1911, Braithwaite produced a detailed paper on the subject, where he explained that the advantage of a state system was the effect of interest on accumulative insurance. Lloyd George told Braithwaite that he had read his paper but admitted he did not understand it and asked him to explain the economics of his health insurance system. (6)

"I managed to convince him that one way or another it (interest) was, and had to be paid. It was at any rate an extra payment which young contributors could properly demand, and the State contribution must at least make it up to them if their contributions were to be taken off and used by the older people. After about half an hour's talk he went upstairs to dress for dinner." Later that night Lloyd George told Braithwaite that he was now convinced by his proposals. "Dividing-out was dead!" (7)

Braithwaite explained that the advantages of an accumulative state fund was the ability to use the insurance reserve to underwrite other social programmes. Lloyd George presented his national insurance proposal to the Cabinet at the beginning of April. "Insurance was to be made compulsory for all regularly employed workers over the age of sixteen and with incomes below the level - £160 a year - of liability for income tax; also for all manual labourers, whatever their income. The rates of contribution would be 4d. a week from a man, and 3d. a week from a woman; 3d. a week from his or her employer; and 2d. a week from the State." (8)

The slogan adopted by Lloyd George to promote the scheme was "9d for 4d". In return for a payment which covered less than half the cost, contributors were entitled to free medical attention, including the cost of medicine. Those workers who contributed were also guaranteed 10s. a week for thirteen weeks of sickness and 5s a week indefinitely for the chronically sick.

Braithwaite later argued that he was impressed by the way Lloyd George developed his policy on health insurance: "Looking back on these three and a half months I am more and more impressed with the Chancellor's curious genius, his capacity to listen, judge if a thing is practicable, deal with the immediate point, deferring all unnecessary decision and keeping every road open till he sees which is really the best. Working for any other man I must inevitably have acquiesced in some scheme which would not have been as good as this one, and I am very glad now that he tore up so many proposals of my own and other people which were put forward as solutions, and which at the time we had persuaded ourselves into thinking possible. It will be an enormous misfortune if this man by any accident should be lost to politics." (9)

The large insurance companies were worried that this measure would reduce the popularity of their own private health schemes. David Lloyd George, arranged a meeting with the association that represented the twelve largest companies. Their chief negotiator was Kingsley Wood, who told Lloyd George, that in the past he had been able to muster enough support in the House of Commons to defeat any attempt to introduce a state system of widows' and orphans' benefits and so the government "would be wise to abandon the scheme at once." (10)

David Lloyd George was able to persuade the government to back his proposal of health insurance: "After searching examination, the Cabinet expressed warm and unanimously approval of the main and government principles of the scheme which they believed to be more comprehensive in its scope and more provident and statesmanlike in its machinery than anything that had hitherto been attempted or proposed." (11)

The National Insurance Bill was introduced into the House of Commons on 4th May, 1911. Lloyd George argued: "It is no use shirking the fact that a proportion of workmen with good wages spend them in other ways, and therefore have nothing to spare with which to pay premiums to friendly societies. It has come to my notice, in many of these cases, that the women of the family make most heroic efforts to keep up the premiums to the friendly societies, and the officers of friendly societies, whom I have seen, have amazed me by telling the proportion of premiums of this kind paid by women out of the very wretched allowance given them to keep the household together."

Lloyd George went on to explain: "When a workman falls ill, if he has no provision made for him, he hangs on as long as he can and until he gets very much worse. Then he goes to another doctor (i.e. not to the Poor Law doctor) and runs up a bill, and when he gets well he does his very best to pay that and the other bills. He very often fails to do so. I have met many doctors who have told me that they have hundreds of pounds of bad debts of this kind which they could not think of pressing for payment of, and what really is done now is that hundreds of thousands - I am not sure that I am not right in saying millions - of men, women and children get the services of such doctors. The heads of families get those services at the expense of the food of their children, or at the expense of good-natured doctors."

Lloyd George stated this measure was just the start to government involvement in protecting people from social evils: "I do not pretend that this is a complete remedy. Before you get a complete remedy for these social evils you will have to cut in deeper. But I think it is partly a remedy. I think it does more. It lays bare a good many of those social evils, and forces the State, as a State, to pay attention to them. It does more than that... till the advent of a complete remedy, this scheme does alleviate an immense mass of human suffering, and I am going to appeal, not merely to those who support the Government in this House, but to the House as a whole, to the men of all parties, to assist us." (12)

The Observer welcomed the legislation as "by far the largest and best project of social reform ever yet proposed by a nation. It is magnificent in temper and design". (13) The British Medical Journal described the proposed bill as "one of the greatest attempts at social legislation which the present generation has known" and it seemed that it was "destined to have a profound influence on social welfare." (14)

Ramsay MacDonald promised the support of the Labour Party in passing the legislation, but some MPs, including Fred Jowett, George Lansbury and Philip Snowden denounced it as a poll tax on the poor. Along with Keir Hardie, they wanted free sickness and unemployment benefit to be paid for by progressive taxation. Hardie commented that the attitude of the government was "we shall not uproot the cause of poverty, but we will give you a porous plaster to cover the disease that poverty causes." (15)

Lloyd George's reforms were strongly criticised and some Conservatives accused him of being a socialist. There was no doubt that he had been heavily influenced by Fabian Society pamphlets on social reform that had been written by Beatrice Webb, Sidney Webb and George Bernard Shaw. However, some Fabians "feared that the Trade Unions might now be turned into Insurance Societies, and that their leaders would be further distracted from their industrial work." (16)

Lloyd George pointed out that the labour movement in Germany had initially opposed national insurance: "In Germany, the trade union movement was a poor, miserable, wretched thing some years ago. Insurance has done more to teach the working class the virtue of organisation than any single thing. You cannot get a socialist leader in Germany today to do anything to get rid of that Bill... Many socialist leaders in Germany will say that they would rather have our Bill than their own." (17)

Alfred Harmsworth, Lord Northcliffe, launched a propaganda campaign against the bill on the grounds that the scheme would be too expensive for small employers. The climax of the campaign was a rally in the Albert Hall on 29th November, 1911. As Lord Northcliffe, controlled 40 per cent of the morning newspaper circulation in Britain, 45 per cent of the evening and 15 per cent of the Sunday circulation, his views on the subject was very important.

H. H. Asquith was very concerned about the impact of the The Daily Mail involvement in this issue: "The Daily Mail has been engineering a particularly unscrupulous campaign on behalf of mistresses and maids and one hears from all constituencies of defections from our party of the small class of employers. There can be no doubt that the Insurance Bill is (to say the least) not an electioneering asset." (18)

Frank Owen, the author of Tempestuous Journey: Lloyd George and his Life and Times (1954) suggested that it was those who employed servants who were the most hostile to the legislation: "Their tempers were inflamed afresh each morning by Northcliffe's Daily Mail, which alleged that inspectors would invade their drawing-rooms to check if servants' cards were stamped, while it warned the servants that their mistresses would sack them the moment they became liable for sickness benefit." (19)

The National Insurance Bill spent 29 days in committee and grew in length and complexity from 87 to 115 clauses. These amendments were the result of pressure from insurance companies, Friendly Societies, the medical profession and the trade unions, which insisted on becoming "approved" administers of the scheme. The bill was passed by the House of Commons on 6th December and received royal assent on 16th December 1911. (20)

Lloyd George admitted that he had severe doubts about the amendments: "I have been beaten sometimes, but I have sometimes beaten off the attack. That is the fortune of war and I am quite ready to take it. Honourable Members are entitled to say that they have wrung considerable concessions out of an obstinate, stubborn, hard-hearted Treasury. They cannot have it all their own way in this world. Let them be satisfied with what they have got. They are entitled to say this is not a perfect Bill, but then this is not a perfect world. Do let them be fair. It is £15,000,000 of money which is not wrung out of the workmen's pockets, but which goes, every penny of it, into the workmen's pocket. Let them bear that in mind. I think they are right in fighting for organisations which have achieved great things for the working classes. I am not at all surprised that they regard them with reverence. I would not do anything which would impair their position. Because in my heart I believe that the Bill will strengthen their power is one of the reasons why I am in favour of this Bill." (21)

The Daily Mail and The Times, both owned by Lord Northcliffe, continued its campaign against the National Insurance Act and urged its readers who were employers not to pay their national health contributions. David Lloyd George asked: "Were there now to be two classes of citizens in the land - one class which could obey the laws if they liked; the other, which must obey whether they liked it or not? Some people seemed to think that the Law was an institution devised for the protection of their property, their lives, their privileges and their sport it was purely a weapon to keep the working classes in order. This Law was to be enforced. But a Law to ensure people against poverty and misery and the breaking-up of home through sickness or unemployment was to be optional." (22)

David Lloyd George attacked the newspaper baron for encouraging people to break the law and compared the issue to the foot-and-mouth plague rampant in the countryside at the time: "Defiance of the law is like the cattle plague. It is very difficult to isolate it and confine it to the farm where it has broken out. Although this defiance of the Insurance Act has broken out first among the Harmsworth herd, it has travelled to the office of The Times. Why? Because they belong to the same cattle farm. The Times, I want you to remember, is just a twopenny-halfpenny edition of The Daily Mail." (23)

Despite the opposition from newspapers and and the British Medical Association, the business of collecting contributions began in July 1912, and the payment of benefits on 15th January 1913. Lloyd George appointed Sir Robert Morant as chief executive of the health insurance system. William J. Braithwaite was made secretary to the joint committee responsible for initial implementation, but his relations with Morant were deeply strained. "Overworked and on the verge of a breakdown, he was persuaded to take a holiday, and on his return he was induced to take the post of special commissioner of income tax in 1913." (24)

David Lloyd George, unlike most Liberal and Conservative MPs, "had no capital resources, whether self-made or derived from the money-making activities of ancestors... As a young M.P. he had to live off a share, perhaps unduly large, of the profits from the solicitors' firm in which he and his brother William were the founder-partners, supplemented by whatever fees he could earn from casual journalism and lecturing." John Grigg has argued that Lloyd George resented this, "not because he cared about money for its own sake, but because he could see that private wealth was a key to political independence". (25)

After becoming Chancellor of the Exchequer he received a salary of £5,000. Although he could live on this income he worried about what would happen if he lost office. He decided to use his contacts with businessmen to provide him with information that would enable to invest wisely in stocks and shares. His good friend and political supporter, George Cadbury, heard about these financial dealings and warned him that if the Conservative press found out about this it could bring an end to his political career. Cadbury was the owner of the Daily News and might have heard about this from journalists he employed.

"Those who hate you and your measures make themselves heard, but the millions who rejoice in your work and in the courage you have shown on behalf of labour, like myself, have no means of expressing their gratitude for what you have done - this must be my apology for writing to a man whose every moment is full of important business, but even now I would not write if I did not feel that I had a definite duty to convey to you my own desire which I believe represents that of millions, that you should hold fast your integrity." (26)

One of the reasons for this letter was the rumour that David Lloyd George had made £100,000 by buying and selling Surrey Commercial Dock shares. Surrey Commercial was one of the three London dock companies which had been created when the Port of London was being established, in 1908, under a scheme prepared by Lloyd George but enacted by his successor at the Board of Trade, Winston Churchill. (27)

Lloyd George wrote to his wife about his share dealings. "So you have only £50 to spare. Very well, I will invest it for you. Sorry you have no more available as I think it is quite a good thing I have got." (28) Four days later he told her about the success of his investments: "I got my cheque from my last Argentina Railway deal today. I have made £567. But the thing I have been talking to you about is a new thing." (29)

H. H. Asquith had been urged by senior members of the military to set up an British Empire chain of wireless telegraphy. Herbert Samuel, the Postmaster-General, began negotiating with several companies who could provide this service. This included the English Marconi Company, whose managing director was Godfrey Isaacs, the brother of Rufus Isaacs, the Attorney General.

Godfrey Isaacs, was also on the board of the Marconi Wireless Telegraph Company of America, that controlled the company operating in London. Isaacs had been given responsibility for selling 50,000 shares in the company to English investors before they became available to the general public. He advised his brother, Rufus Isaacs, to buy 10,000 of these shares at £2 apiece. He shared this information with Lloyd George and Alexander Murray, the Chief Whip, and they both purchased 1,000 shares at the same price. On 18th April 1912 Murray also bought 2,000 shares for the Liberal Party. (30)

These shares were not available on the British stock market. On 19th April, the first day that shares in the Marconi Company of America were available in London, the shares opened at £3 and ended the day at £4. The main reason for this was the news that Herbert Samuel was in negotiations with the English Marconi Company to provide a wireless-telegraphy system for the British Empire. Rufus Isaacs now sold all his shares for a profit of £20,000. Whereas his fellow government ministers, Lloyd George and Alexander Murray, sold half their shares and therefore got the other half for free. Lloyd George then used this money to buy another 1,500 shares in the company. (31)

Cecil Chesterton, G. K. Chesterton and Hilaire Belloc were involved with a new journal called The Eye-Witness. It was later pointed out that "the object of the Eye-Witness was to make the English public know and care about the perils of political corruption". The editor wrote to his mother, Lloyd George has been dealing on the Stock Exchange heavily to his advantage with private political information". They immediately began to investigate the case. (32)

On 19th July, 1912, Herbert Samuel announced that a contract had been agreed with the English Marconi Company. A couple of days later, W. R. Lawson, wrote in the weekly Outlook Magazine: "The Marconi Company has from its birth been a child of darkness... Its relations with certain Ministers have not always been purely official or political." (33)

Whereas the rest of the mainstream media ignored the story, over the next few weeks The Eye-Witness produced a series of articles on the subject. It suggested that Rufus Isaacs had made £160,000 out of the deal. It was also claimed that David Lloyd George, Godfrey Isaacs, Alexander Murray and Herbert Samuel had profited by buying shares based on knowledge of the government contract. (34)

The defenders of Lloyd George, Isaacs, Murray and Samuel, accused the magazine of anti-semitism, pointing out that three of the men named were Jewish. "They were all victims of the disease of the heart known as anti-semitism. It was a gift to them that the Attorney-General and his brother had the name of Isaacs, and the added bonus that the Postmaster General, who had negotiated the contract, was called Samuel." (35)

H. H. Asquith called a meeting with the accused men and discussed the possibility of legal action against the magazine. It was Asquith who eventually advised against this: "I suspect that Eyewitness has a very meagre circulation. I notice only one page of advertisements and then by Belloc's publishers. Prosecution would secure it notoriety which might yield subscribers." (36)

A debate on the Marconi Scandal took place on 11th October, 1912. Herbert Samuel explained that Marconi was the company best qualified to do the job and several Conservative MPs made speeches where they agreed with the government over this issue. The only dissenting voice was George Lansbury, the Labour MP, who argued that there had been "scandalous gambling in Marconi shares." (37)

David Lloyd George responded by attacking those who had spread untrue stories about his share dealings: "The Honourable Member (George Lansbury) said something about the Government and he has talked about rumours. If the Honourable Member has any charge to make against the Government as a whole or against individual Members of it, I think it ought to be stated openly. The reason why the government wanted a frank discussion before going to Committee was because we wanted to bring here these rumours, these sinister rumours that have been passed from one foul lip to another behind the backs of the House." (38)

Later that day, Rufus Isaacs issued a statement about his share-dealings. "Never from the beginning... have I had one single transaction with the shares of that company. I am not only speaking for myself but also speaking on behalf, I know, of both my Right Honourable Friends the Postmaster General and the Chancellor of the Exchequer who, in some way or another, in some of the articles, have been brought into this matter". (39)

Leopold Maxse, the editor of The National Review, pointed out that Isaacs had been careful in his use of words. He speculated why he said that he had not purchased shares in "that company" rather than the "Marconi company". Maxse pointed out: "One might have conceived that (the Ministers) might have appeared at the first sitting clamouring to state in the most categorical and emphatic manner that neither directly nor indirectly, in their names or other people's names, have they had any transactions whatsoever... In any Marconi company throughout thc negotiations with the Government". (40)

Asquith announced that he would set-up a committee to look into the possibility of insider dealings. The committee had six Liberals (including the chairman, Albert Spicer), two Irish Nationalists and one Labour MP, which provided a majority over six Conservatives. The committee took evidence from witnesses for the next six months and caused the Government a great deal of embarrassment. (41)

On 14th February, 1913, the French newspaper, Le Matin, reported that Herbert Samuel, David Lloyd George and Rufus Isaacs, had purchased Marconi shares at £2 and sold them when they reached the value of £8. When it was pointed out that this was not true, the newspaper published a retraction and an apology. However, on the advice of Winston Churchill, they decided to take legal action against the newspaper.

Churchill argued that this would provide an opportunity to shape the consciousness of the general public. He suggested that the men should employ two barristers, Frederick Smith and Edward Carson, who were members of the Conservative Party: "The public was bound to notice that the integrity of two Liberal ministers was being defended by normally partisan members of the Conservative Party, and their appearance on behalf of Isaacs and Samuel would make it impossible for them to attack either man in the House of Commons debate which would surely follow." (42)

Churchill also had a meeting with Alfred Harmsworth, Lord Northcliffe, the owner of The Times and The Daily Mail and persuaded him to treat the accused men "gently" in his newspapers. (43) However, other newspapers were less kind and gave a great deal of coverage to the critics of the government. For example, The Spectator, reported a speech made by Robert Cecil, where he argued: "It was his duty to express his honest and impartial opinion on the conduct of Mr. Lloyd George in the Marconi transaction. He had never said or suggested that the transaction was corrupt; but he did say that, if it was to be approved and recognized as the common practice among Government officials, then one of our greatest safeguards against corruption was absolutely destroyed. The transaction was bad and grossly improper, and it was made far worse by the fact that Mr. Lloyd George went about posing as an injured innocent. For a man in his position to defend that transaction was even worse than entering into it." (44)

During the House of Commons investigation the three accused Liberal MPs admitted they had purchased shares in the Marconi Company of America. However, as David Lloyd George pointed out, he had held no shares in any company which did business with the government and that he had never made improper use of official information. He ridiculed the charges which were made against him - some of which he invented, for example, the claim that he had made a profit of £60,000 on a speculative investment or that owned a villa in France. (45)

Alexander Murray was unable to appear before the Marconi Enquiry because he had resigned from the government and was working in Bogotá in Columbia. However, during the investigation, Murray's stockbroker was declared bankrupt and, in consequence, his account books and business papers were open to public examination. They revealed that Murray had not only purchased 2,500 shares in the American Marconi Company, but had invested £9,000 in the company on behalf of the Liberal Party. (46)

H. H. Asquith and Percy Illingworth, the new Chief Whip, denied knowledge of these shares. According to George Riddell, a close friend of both men, Asquith and Illingworth had known about this "for some time". (47) John Grigg, the author of Lloyd George, From Peace To War 1912-1916 (1985), has argued that Asquith was also aware of these shares and this explains why he was so keen to cover-up the story. "If he had shown any sign of abandoning them, they might have contemplating abandoning him, and vice versa... there was probably a mutual recognition of the need for solidarity in a situation where the abandonment of one might well have led to the ruin of all." (48)

On 30th June, 1913, the Select Committee provided three reports on the Marconi case. The majority (government) report claimed that no Minister had been influenced in the discharge of his public duties by any interest he might have had in any of the Marconi or other undertakings, or had utilized information coming to him from official sources for private investment or speculation.

The Minority (opposition) report criticised the whole handling of the share issue and found "grave impropriety" in the conduct of David Lloyd George, Rufus Isaacs and Alexander Murray, both in acquiring the shares at the advantageous price and in subsequent dealings in them. It also censored them for their lack of candour, especially Murray, who had refused to return to England to testify.

Although the chairman on the enquiry, Albert Spicer, signed the majority report, he also published his own report where he heavily criticised Rufus Isaacs for not disclosing at the beginning that he had bought shares in the Marconi Company. Spicer claimed that it was this lack of candour that resulted in the large number of rumours about the corrupt actions of the government ministers. (49)

In October, 1913, Rufus Isaacs, was appointed Lord Chief Justice of England. Newspapers complained that it appeared that he had been promoted as a reward for not disclosing the full truth about his share-dealings. However, it was reported by Lord Northcliffe that only five people had sent letters to his newspapers on the subject and "the whole Marconi business looms much larger in Downing Street than among the mass of the people". (50)

C. K. Chesterton, one of the men who exposed the Marconi Scandal, agreed: "The object of the Eye-Witness was to make the English public know and care about the perils of political corruption. It is now certain that the public does know. It is not so certain that the public does care." However, he did go on to argue that it did have a long-term impact on the British public: "It is the fashion to divide recent history into Pre-War and Post-War conditions. I believe it is almost as essential to divide them into Pre-Marconi and Post-Marconi days. It was during the agitations upon that affair that the ordinary English citizen lost his invincible ignorance; or, in ordinary language, his innocence". (51)

In a speech at the National Liberal Club, David Lloyd George, attempted to defend the politicians involved in the Marconi case: "I should like to say one word about politicians generally. I think that they are a much-maligned race. Those who think that politicians are moved by sordid, pecuniary considerations know nothing ofeither politics or politicians. These are not the things that move us...The men who go into politics to make money are not politicians... We all have ambitions. I am not ashamed to say so. I speak as one who boasts: I have an ambition. I should like to be remembered amongst those who, in their day and generation, had at least done something to lift the poor out of the mire."

Lloyd George went on to argue that it was politicians like him who were protecting the public from other powerful forces: "The real peril in politics is not that individual politicians ofhigh rank will attempt to make a packet for themselves. Read the history of England for the past fifty years. The real peril is that powerful interests will dominate the Legislature, will dominate the Executive, in order to carry through proposals which will prey upon the community. That is where tariffs - the landlord endowment - will come in." (52)

In 1862, King Wilhelm I appointed Otto von Bismarck as Minister President of Prussia. When he had first entered the Prussian legislature in 1847 he was a royalist and reactionary politician who believed that the monarch had a divine right to rule. During the 1848 Revolution he took the side of the monarchy and opposed the liberals who advocated universal suffrage and the unification of Germany. (53)

However, now in power, he advocated the unification of the German states: "Prussia must concentrate and maintain its power for the favorable moment which has already slipped by several times. Prussia's boundaries according to the Vienna treaties are not favorable to a healthy state life. The great questions of the time will not be resolved by speeches and majority decisions - that was the great mistake of 1848 and 1849 - but by iron and blood." (54)

On 18th August, 1866, Prussia and a large number of North and Central German states signed an alliance. The following year Bismarck established the North German Confederation. The federal constitution established a constitutional monarchy with the Prussian king as head of state. Laws could only be enabled with the consent of the Reichstag (a parliament elected by all males over the age of 25). The North German Confederation had nearly 30 million inhabitants, of which eighty per cent lived in Prussia.

Napoleon III became very concerned about the unification of the German states and saw it as a threat to the Second French Empire. On 16th July 1870, the French parliament voted to declare war on the German Kingdom of Prussia and hostilities began three days later. The Paris section of the International Workingmen's Association immediately denounced the war. However, in Germany opinion was divided but the majority of socialists considered the war to be a defensive one and in the Reichstag only Wilhelm Liebknecht and August Bebel refused to vote for war credits. As Karl Marx had privately argued that this would end in failure as the "working-class... is not yet sufficiently organised to throw any decisive weight on to the scales". (55)

Marx believed that a German victory would help his long-term desire for a socialist revolution. He pointed out to Engels that German workers were better organised and better disciplined than French workers who were greatly influenced by the ideas of Pierre-Joseph Proudhon: "The French need a drubbing. If the Prussians are victorious then the centralisation of the State power will give help to the centralisation of the working class... The superiority of the Germans over the French in the world arena would mean at the same time the superiority of our theory over Proudhon's and so on." (56)

A few days later Karl Marx issued a statement on behalf of the IWMA. "Whatever turn the impending horrid war may take, the alliance of the working classes of all countries will ultimately kill war. The very fact that while official France and Germany are rushing into a fratricidal feud, the workmen of France and Germany send each other messages of peace and goodwill; this great fact, unparalleled in the history of the past, opens the vista of a brighter future. It proves that in contrast to old society, with its economical miseries and its political delirium, a new society is springing up, whose International rule will be Peace, because its natural ruler will be everywhere the same - Labour! The Pioneer of that new society is the International Working Men's Association." (57)

Peace activists, John Stuart Mill and John Morley, congratulated Marx on his statement and arranged for 30,000 copies of his speech to be printed and distributed. Marx thought the war would provide the opportunity for revolution. He told Engels: "I have been totally unable to sleep for four nights now, on account of the rheumatism and I spend this time in fantasies about Paris, etc." He hoped for a German victory: "I wish this because the definite defeat of Bonaparte is likely to provoke Revolution in France, while the definite defeat of Germany would only protract the present state of things for twenty-years." (58)

In a letter to the American organiser of the IWMA, Friedrich Sorge, Marx made some predictions about the future that included the First World War and the Russian Revolution: "What the Prussian jackasses don't see is that the present war leads just as necessarily to war between Germany and Russia as the war of 1866 led to war between Prussia and France. That is the best result that I expect of it for Germany. Prussianism as such has never existed and cannot exist other than in alliance and in subservience to Russia. And this War No. 2 will act as the mid-wife of the inevitable revolution in Russia." (59)

The German coalition mobilised its troops much more quickly than the French and rapidly invaded north-eastern France. The German forces were superior in numbers, had better training and leadership and made more effective use of modern technology, especially the latest developments in artillery. The war went badly for Napoleon III and he was heavily defeated at the Battle of Sedan and was forced to surrender on 2nd September. The historian, Geoffrey Wawro, pointed out: "The disparity in casualties testified to the awful effectiveness of the Prussian guns: 3,000 French dead, 14,000 French wounded, and 21,000 French prisoners against a total of 9,000 German dead, wounded, and missing." (60)

On 4th September, 1870, a republic was proclaimed in Paris. Adolphe Thiers, a former prime minister and an opponent of the war, was elected chief executive of the new French government. In March 1871, the government made an attempt to disarm the Paris National Guard, a volunteer citizen force which showed signs of radical sympathies. It refused to give up its arms, declared its autonomy, deposed the officials of the provisional government, and elected a revolutionary committee of the people as the true government of France. Thiers now fled to Versailles. Governments all over Europe were concerned by what was happening in Europe. The Times reported complained against "this dangerous sentiment of the Democracy, this conspiracy against civilisation in its so-called capital". (61)

The new government called itself the Paris Commune and attempted to run the city. The committee was a mixture of different political opinions but did include the followers of Mikhail Bakunin, Pierre-Joseph Proudhon and Louis Auguste Blanqui. The Communards had difficulty keeping control of the national guard and 28th March, on the day of the election, General Jacques Leon Clément-Thomas and General Claude Lecomte were murdered. Doctor Guyon, who examined the bodies shortly afterwards, found forty balls in the body of Clément-Thomas and nine balls in the back of Lecomte.

At the first meeting of the Commune, the members adopted several proposals, including an honorary presidency for Louis Auguste Blanqui; the abolition of the death penalty; the abolition of military conscription; a proposal to send delegates to other cities to help launch communes there. It was also stated that no military force other than the National Guard, made up of male citizens, could be formed or introduced into the capital. School children in the city were provided with free clothing and food. David McLellan suggests that the actual measures passed by the commune were reformist rather than revolutionary, with no attack on private property: employers were forbidden on the penalty of fines to reduce wages... and all abandoned businesses were transferred to co-operative associations." (62)

Karl Marx believed the actions of the Communards were revolutionary: "Having once got rid of the standing army and the police – the physical force elements of the old government – the Commune was anxious to break the spiritual force of repression... by the disestablishment and disendowment of all churches as proprietary bodies. The priests were sent back to the recesses of private life, there to feed upon the alms of the faithful in imitation of their predecessors, the apostles. The whole of the educational institutions were opened to the people gratuitously, and at the same time cleared of all interference of church and state. Thus, not only was education made accessible to all, but science itself freed from the fetters which class prejudice and governmental force had imposed upon it." (63)

Although only males were allowed to vote in the elections, several women were involved in the Paris Commune. Nathalie Lemel and Élisabeth Dmitrieff, created the Women's Union for the Defense of Paris and Care of the Wounded. The group demanded gender and wage equality, the right of divorce for women, the right to secular education, and professional education for girls. Anne Jaclard and Victoire Léodile Béra founded the newspaper Paris Commune and Louise Michel, established a female battalion of the National Guard. (64)

The Committee was given extensive powers to hunt down and imprison enemies of the Commune. Led by Raoul Rigault, it began to make several arrests, usually on suspicion of treason. Those arrested included Georges Darboy, the Archbishop of Paris, General Edmond-Charles de Martimprey and Abbé Gaspard Deguerry. Rigault attempted to exchange these prisoners for Louis Auguste Blanqui who had been captured by government forces. Despite lengthy negotiations, Adolphe Thiers refused to release him.

On 22nd May 1871, Marshal Patrice de MacMahon and his government troops entered the city. The Committee of Public Safety issued a decree: "To arms! That Paris be bristling with barricades, and that, behind these improvised ramparts, it will hurl again its cry of war, its cry of pride, its cry of defiance, but its cry of victory; because Paris, with its barricades, is undefeatable ...That revolutionary Paris, that Paris of great days, does its duty; the Commune and the Committee of Public Safety will do theirs!" (65)

It is estimated that about fifteen to twenty thousand persons, including many women and children, responded to the call of arms. The forces of the Commune were outnumbered five-to-one by Marshal MacMahon's forces. They made their way to Montmartre, where the uprising had begun. The garrison of one barricade, was defended in part by a battalion of about thirty women, including Louise Michel. The soldiers captured 42 guardsmen and several women, took them to the same house on Rue Rosier where generals Clement-Thomas and Lecomte had been executed, and shot them.

Large numbers of the National Guard changed into civilian clothes and fled the city. It is estimated that this left only about 12,000 Communards to defend the barricades. As soon as they were captured they were executed. Raoul Rigaut responded by killing his prisoners, including the Archbishop of Paris and three priests. Soon afterwards Rigaut was captured and executed and the rebellion came to an end soon afterwards on 28th May. As Isaiah Berlin pointed out: "The retribution which the victorious army exacted took the form of mass executions; the white terror, as is common in such cases, far outdid in acts of bestial cruelty the worst excesses of the regime whose misdeeds it had come to end." (66)

After the war Bismarck forced the French government to cede Alsace-Lorraine to Germany. General Helmuth von Moltke believed that this would provided a buffer zone that would provide a defence against future attack. German socialists in the Reichstag spoke against this measure and Wilhelm Liebknecht and August Bebel were charged with treason. In 1872, both men were convicted and sentenced to two years in the Königstein Fortress. (67)

Otto von Bismarck acted immediately to secure the unification of Germany. He negotiated with representatives of the southern German states, offering special concessions if they agreed to unification. The new German Empire was a federation made up of 25 constituent states. Jonathan Steinberg has argued: "The genius-statesmen had transformed European politics and had unified Germany in eight and a half years. And he had done so by sheer force of personality, by his brilliance, ruthlessness, and flexibility of principle." (68)

Bismarck's main concern was the growth of the Social Democratic Party (SDP). In the 1877 General Election the SDP won 12 seats. Bismarck responded by introducing Anti-Socialist Laws. Socialist organizations and meetings were forbidden and socialist literature was censored. As a result of these laws socialists were arrested and tried by police courts. Despite this action socialists won seats in the Reichstag by running as independent candidates.

Bismarck came to the decision that the best way of preventing socialism was by introducing a series of social reforms including old age pensions. In 1881 he announced that "those who are disabled from work by age and invalidity have a well-grounded claim to care from the state." When the issue was debated Bismarck was described by his critics as a socialist. He replied: "Call it socialism or whatever you like. It is the same to me." It has been argued that Bismarck's intention was to "forge a bond between workers and the state so as to strengthen the latter, to maintain traditional relations of authority between social and status groups, and to provide a countervailing power against the modernist forces of liberalism and socialism." (69)

In 1883 Bismarck introduced a health insurance system that provided payments when people were sick and unable to work. Participation was mandatory and contributions were taken from the employee, the employer and the government. The German system provided contributory retirement benefits and disability benefits as well. Germany was therefore the first country in the world to provide a comprehensive system of income security based on social insurance principles.

Bismarck explained: "The real grievance of the worker is the insecurity of his existence; he is not sure that he will always have work, he is not sure that he will always be healthy, and he foresees that he will one day be old and unfit to work. If he falls into poverty, even if only through a prolonged illness, he is then completely helpless, left to his own devices, and society does not currently recognize any real obligation towards him beyond the usual help for the poor, even if he has been working all the time ever so faithfully and diligently. The usual help for the poor, however, leaves a lot to be desired, especially in large cities, where it is very much worse than in the country." (70)

Bismarck believed that this insurance system would increase productivity, and focus the political attentions of German workers on supporting his government. It also resulted in a rapid decline of German emigration to America. He also hoped that it would reduce support for the socialists. After the passing of the Old Age and Disability Insurance Law in 1889, Bismarck thought it was safe to legalize the Social Democratic Party. (71)

In 1879 Germany and Austria-Hungary agreed to form a Dual Alliance. This became the Triple Alliance when in 1882 it was expanded to include Italy. The three countries agreed to support each other if attacked by either France or Russia. According to Basil Liddell Hart: "In regard to Britain, Bismarck's aim seems to have been to keep her in friendly isolation from Germany and unfriendly isolation from France. His feelings towards Britain oscillated between friendship and contempt." He had respect for Benjamin Disraeli but despised William Gladstone. (72)

Alfred Harmsworth, Lord Northcliffe, became very concerned about the dangers posed by Germany. He sent his leading journalist, George W. Steevens, to report on the country: "The German army is the most perfectly adapted, perfectly running machine. Never can there have been a more signal triumph of organization over complexity... The German army is the finest thing thing of its kind in the world; it is the finest thing in Germant of any kind... In the German army the men are ready, and the planes, the railway-carriages, the gas for the war-balloons, and the nails for the horseshoes are all ready too... Nothing overlooked, nothing neglected, everything practised, everything welded together, and yet everything alive and fighting... And what should we ever do if 100,000 of this kind of army got loose in England?" (73)

Northcliffe became convinced that Britain would have to go to war with Germany and urged the government to increase its spending on defence: "This is our hour of preparation, tomorrow may be the day of world conflict... Germany will go slowly and surely; she is not in a hurry: her preparations are quietly and systematically made; it is no part of her object to cause general alarm which might be fatal to her designs." (74)

France felt threatened by this alliance. Britain was also concerned by the growth in the German Navy. In the 1890s it became clear that Germany had a policy to challenge British naval supremacy. In 1904 the two countries signed the Entente Cordiale (friendly understanding). The objective of the alliance was to encourage co-operation against the perceived threat of Germany. Three years later, Russia, who feared the growth in the German Army, joined Britain and France to form the Triple Entente. Some members of the opposition, such as David Lloyd George, raised doubts about this agreement and suggested "a friendly bilateral relationship between Britain and Germany". (75)

The agreement was signed by Sir Edward Grey, the Foreign Secretary. In contrast to the Triple Alliance, the terms of the Entente did not require each country to go to war on behalf of the others, but stated that they had a "moral obligation" to support each other. As Keith Robbins pointed out, the agreement upset some politicians: "It went against the grain for some Liberals that their government should conclude a treaty with a government which had suppressed the parliamentary Duma in Russia.... Grey himself claimed that a frequent source of friction and possible cause of war had been removed. His critics suggested that he too readily accepted Russian assurances. Taken as a whole, however, the Russian agreement was a further recognition that in the twentieth century the British empire was not in a position to take on simultaneously all powers that might be thought to challenge its pre-eminence. Some feared Germany more, some feared Russia more. Either way, Grey supposed that in his first years of office he had steered a course which retained for Britain freedom of decision while removing a prospect of total isolation." (76)

Britain's first dreadnought was built at Portsmouth Dockyard between October 1905 and December 1906. It was the most heavily-armed ship in history. She had ten 12-inch guns (305 mm), whereas the previous record was four 12-inch guns. The gun turrets were situated higher than user and so facilitated more accurate long-distance fire. In addition to her 12-inch guns, the ship also had twenty-four 3-inch guns (76 mm) and five torpedo tubes below water. In the waterline section of her hull, the ship was armoured by plates 28 cm thick. It was the first major warship driven solely by steam turbines. It was also faster than any other warship and could reach speeds of 21 knots. A total of 526 feet long (160.1 metres) it had a crew of over 800 men. It cost over £2 million, twice as much as the cost of a conventional battleship.

Germany built its first dreadnought in 1907 and plans were made for building more. The British government believed it was necessary to have twice the number of these warships than any other navy. David Lloyd George had a meeting with the German Ambassador, Count Paul Metternich, and told him that Britain was willing to spend £100 million to frustrate Germany's plans to achieve naval supremacy. That night he made a speech where he spoke out on the arms race: "My principle is, as Chancellor of the Exchequer, less money for the production of suffering, more money for the reduction of suffering." (77)

Alfred Harmsworth, Lord Northcliffe, used his newspapers to urge an increase in defence spending and a reduction in the amount of money being spent on social insurance schemes. In one letter to Lloyd George he suggested that the Liberal government was Pro-German. Lloyd George replied: "The only real pro-German whom I know of on the Liberal side of politics is Rosebery, and I sometimes wonder whether he is even a Liberal at all! Haldane, of course, from education and intellectual bent, is in sympathy with German ideas, but there is really nothing else on which to base a suspicion that we are inclined to a pro-German policy at the expense of the entente with France." (78)

Kaiser Wilhelm II gave an interview to the Daily Telegraph in October 1908 where he outlined his policy of increasing the size of his navy: "Germany is a young and growing empire. She has a world-wide commerce which is rapidly expanding and to which the legitimate ambition of patriotic Germans refuses to assign any bounds. Germany must have a powerful fleet to protect that commerce and her manifold interests in even the most distant seas. She expects those interests to go on growing, and she must be able to champion them manfully in any quarter of the globe. Her horizons stretch far away. She must be prepared for any eventualities in the Far East. Who can foresee what may take place in the Pacific in the days to come, days not so distant as some believe, but days at any rate, for which all European powers with Far Eastern interests ought steadily to prepare?" (79)

Grey replied to these comments in the same newspaper: "The German Emperor is ageing me; he is like a battleship with steam up and screws going, but with no rudder, and he will run into something some day and cause a catastrophe. He has the strongest army in the world and the Germans don't like being laughed at and are looking for somebody on whom to vent their temper and use their strength. After a big war a nation doesn't want another for a generation or more. Now it is 38 years since Germany had her last war, and she is very strong and very restless, like a person whose boots are too small for him. I don't think there will be war at present, but it will be difficult to keep the peace of Europe for another five years." (80)

Lloyd George complained bitterly to H. H. Asquith about the demands being made by Reginald McKenna, First Lord of the Admiralty, to spend more money on the navy. He reminded Asquith of "the emphatic pledges given by us before and during the general election campaign to reduce the gigantic expediture on armaments built up by our predecessors... but if Tory extravagance on armaments is seen to be exceeded, Liberals... will hardly think it worth their while to make any effort to keep in office a Liberal ministry... the Admiralty's proposals were a poor compromise between two scares - fear of the German navy abroad and fear of the Radical majority at home... You alone can save us from the prospect of squalid and sterile destruction." (81)

Lord Northcliffe had consistently described Germany as Britain's "secret and insidious enemy", and in October 1909 he commissioned Robert Blatchford, to visit Germany and then write a series of articles setting out the dangers. The German's, Blatchford wrote, were making "gigantic preparations" to destroy the British Empire and "to force German dictatorship upon the whole of Europe". He complained that Britain was not prepared for was and argued that the country was facing the possibility of an "Armageddon". (82)

Lloyd George was constantly in conflict with McKenna and suggested that his friend, Winston Churchill, should become First Lord of the Admiralty. Asquith took this advice and Churchill was appointed to the post on 24th October, 1911. McKenna, with the greatest reluctance, replaced him at the Home Office. This move backfired on Lloyd George as the Admiralty cured Churchill's passion for "economy". The "new ruler of the King's navy demanded an expenditure on new battleships which made McKenna's claims seem modest". (83)

The Admiralty reported to the British government that by 1912 Germany would have 17 dreadnoughts, three-fourths the number planned by Britain for that date. At a cabinet meeting David Lloyd George and Winston Churchill both expressed doubts about the veracity of the Admiralty intelligence. Churchill even accused Admiral John Fisher, who had provided this information, of applying pressure on naval attachés in Europe to provide any sort of data he needed. (84)

Admiral Fisher refused to be beaten and contacted King Edward VII about his fears. He in turn discussed the issue with H. H. Asquith. Lloyd George wrote to Churchill explaining how Asquith had now given approval to Fisher's proposals: "I feared all along this would happen. Fisher is a very clever person and when he found his programme in danger he wired Davidson (assistant private secretary to the King) for something more panicky - and of course he got it." (85)

In 1909 the British Parliament authorized an additional four dreadnoughts, hoping that Germany would be willing to negotiate a treaty about battleship numbers. If this did not happen, an additional four ships would be built. In 1910, the British eight-ship construction plan went ahead, including four Orion-class super-dreadnoughts. Germany responded by building three warships, giving the United Kingdom a superiority of 22 ships to 13. Negotiations began between the two countries but talks foundered on the question on whether British Commonwealth battlecruisers should be included in the count. (86)

Prince Henry of Prussia, the younger brother of Kaiser Wilhelm II, had a meeting with their cousin, King George V at Sandringham in December, 1912. Henry asked George if Germany declared war on France and Russia, would Britain come to their assistance? When he reported back to the Kaiser he said he was convinced that "Britain was peace-loving; but that also she might, under certain circumstances, side with Germany's foes." Kaiser replied "that settles it, we can now go ahead a bully France." (87)

In the spring of 1913, it was announced that Germany now had an army of 661,000. However, Imperial Chancellor Theobald von Bethmann-Hollweg, told a friend a few months later that he had no interest in starting a war: "I am fed with war and the clamour for war and with the perennial armaments. It is high time that the great nations calmed down again and occupied themselves with peaceful pursuits, or there will be an explosion which no one desires and which will be to the detriment of all." (88)

In the early summer of 1914 it was announced that the Kiel Canal, which would enable German ships to move safely and swiftly from the Baltic Sea to the North Sea. The Daily Mail created a great deal of anti-German feeling. It also made repeated calls for the Liberal government to introduce military conscription, so as not to be dependent in the event of war on a small professional army. In one article the newspaper described the Germans as "Huns" and therefore "created the image of a terrifying, ape-like savage that threatened to rape and plunder all of Europe, and beyond". (89)

Serbia did not regain independence from Turkey until 1878, and established a monarchy in 1882. Geographically a land-locked state, Serbia had the Austro-Hungarian Empire on its borders in the north, and Romania and Bulgaria in the east. To the south lay Macedonia and the northern shores of Greece, including the major port of Salonika. Serbia was an overwhelmingly rural society. It had few mineral or industrial resources and had less than 10,000 people employed in manufacturing.

Serbian encouragement of Slav separatist movements in Bosnia-Herzegovina and Croatia angered the government of Austria-Hungary. Serbia received support from Russia in this policy. Tsar Nicholas II wanted to unite the Slav people under his leadership. In 1914 the Russian Army was the largest army in the world (5,971,000) and in case of war could mobilize 12,000,000 men. However, Russia's poor roads and railways made the effective deployment of these soldiers difficult.

When it was announced that Archduke Franz Ferdinand was going to visit Bosnia in June 1914, members of the Black Hand group began to make plans to assassinate the heir of the Austro-Hungarian throne. Colonel Dragutin Dimitrijevic, the chief of the Intelligence Department of the Serbian General Staff sent three members of the Black Hand group based in Belgrade, Gavrilo Princip, Nedjelko Cabrinovic and Trifko Grabez, to Sarajevo to carry out the deed.

Just before 10 o'clock on Sunday, 28th June, 1914, Franz Ferdinand and Sophie von Chotkovato arrived in Sarajevo by train. General Oskar Potiorek, Governor of the Austrian provinces of Bosnia-Herzegovina, was waiting to take the royal party to the City Hall for the official reception. In the front car was Fehim Curcic, the Mayor of Sarajevo and Dr. Gerde, the city's Commissioner of Police. Franz Ferdinand and Duchess Sophie were in the second car with Oskar Potiorek and Count von Harrach. The car's top was rolled back in order to allow the crowds a good view of its occupants.

At 10.10, when the six car possession passed the central police station, Nedjelko Cabrinovic hurled a hand grenade station at the archduke's car. The driver accelerated when he saw the object flying towards him and the grenade exploded under the wheel of the next car. Two of the occupants, Eric von Merizzi and Count Boos-Waldeck were seriously wounded. About a dozen spectators were also hit by bomb splinters.

Franz Ferdinand's driver, Franz Urban, drove on extremely fast and other members of the Black Hand group on the route, Cvijetko Popovic, Gavrilo Princip, Danilo Ilic and Trifko Grabez, were unable to fire their guns or hurl their bombs at the Archduke's car.

After attending the official reception at the City Hall, Franz Ferdinand asked about the members of his party that had been wounded by the bomb. When the archduke was told they were badly injured in hospital, he insisted on being taken to see them. A member of the archduke's staff, Baron Morsey, suggested this might be dangerous, but Oskar Potiorek, who was responsible for the safety of the royal party, replied, "Do you think Sarajevo is full of assassins?" However, Potiorek did accept it would be better if Duchess Sophie remained behind in the City Hall. When Baron Morsey told Sophie about the revised plans, she refused to stay arguing: "As long as the Archduke shows himself in public today I will not leave him."

In order to avoid the city centre, General Oskar Potiorek decided that the royal car should travel straight along the Appel Quay to the Sarajevo Hospital. However, Potiorek forgot to tell the driver, Franz Urban, about this decision. On the way to the hospital, Urban took a right turn into Franz Joseph Street. One of the conspirators, Gavrilo Princip, was standing on the corner at the time. Oskar Potiorek immediately realised the driver had taken the wrong route and shouted "What is this? This is the wrong way! We're supposed to take the Appel Quay!".

The driver put his foot on the brake, and began to back up. In doing so he moved slowly past the waiting Gavrilo Princip. The assassin stepped forward, drew his gun, and at a distance of about five feet, fired several times into the car. Franz Ferdinand was hit in the neck and Sophie von Chotkovato in the abdomen. Princip's bullet had pierced the archduke's jugular vein but before losing consciousness, he pleaded "Sophie dear! Sophie dear! Don't die! Stay alive for our children!" Franz Urban drove the royal couple to Konak, the governor's residence, but although both were still alive when they arrived, they died from their wounds soon afterwards. (90)

The assassination of Archduke Franz Ferdinand did not immediately cause a reaction in Britain. David Lloyd George admitted that he heard the news he suspected that it would result in a war in the Balkans but did not believe such a conflict would involve Britain. He also pointed out that the Cabinet, although it was meeting twice a day, because of the crisis in Ireland, they did not even discuss the issue of Serbia and the assassination for another three weeks. (91)

Lloyd George told C. P. Scott that there is "no question of our taking part in any war in the first instance... and knew of no minister who would be in favour of it". In a letter a few days later to King George V he described the impending conflict as "the greatest event for many years past" but he added "happily there seems no reason why we should be anything other than a spectator". H. H. Asquith, instructed Sir Edward Grey, the Foreign Secretary, to "inform the French and German ambassadors that, at this stage, we were unable to pledge ourselves in advance either under all conditions to stand aside or in any conditions to join in." (92)

On 23rd July, 1914, George Buchanan, the British ambassador to Russia, wrote to Sir Edward Grey, about the discussions he had following the assassination: "As they both continued to press me to declare our complete solidarity with them, I said that I thought you might be prepared to represent strongly at Vienna and Berlin danger to European peace of an Austrian attack on Serbia. You might perhaps point out that it would in all probability force Russia to intervene, that this would bring Germany and France into the field, and that if war became general, it would be difficult for England to remain neutral. Minister for Foreign Affairs said that he hoped that we would in any case express strong reprobation of Austria's action. If war did break out, we would sooner or later be dragged into it, but if we did not make common cause with France and Russia from the outset we should have rendered war more likely." (93)

Grey replied to Buchanan on the 25th July: "I said to the German Ambassador that, as long as there was only a dispute between Austria and Serbia alone, I did not feel entitled to intervene; but that, directly it was a matter between Austria and Russia, it became a question of the peace of Europe, which concerned us all. I had furthermore spoken on the assumption that Russia would mobilize, whereas the assumption of the German Government had hitherto been, officially, that Serbia would receive no support; and what I had said must influence the German Government to take the matter seriously. In effect, I was asking that if Russia mobilized against Austria, the German Government, who had been supporting the Austrian demand on Serbia, should ask Austria to consider some modification of her demands, under the threat of Russian mobilization." (94)

Several members of the Black Hand group interrogated by the Austrian authorities claimed that three men from Serbia, Dragutin Dimitrijevic, Milan Ciganovic, and Major Voja Tankosic, had organised the plot. On 25th July, 1914, the Austro-Hungarian government demanded that the Serbian government arrest the men and send them to face trial in Vienna. Nikola Pasic, the prime minister of Serbia, told the Austro-Hungarian government that he was unable to hand over these three men as it "would be a violation of Serbia's Constitution and criminal in law". Three days later Austro-Hungarian declared war on Serbia. (95)

Despite these events, Sir Edward Grey was still confident that war could be avoided and departed for a fishing holiday in Hampshire. On 26th July, 1914, Prince Henry of Prussia, had another meeting with King George V. Later that day he wrote a letter to his brother of Kaiser Wilhelm II, that George had told him: "We shall try all we can to keep out of this, and shall remain neutral." Admiral Alfred von Tirpitz, the Commander of the German Navy, doubted the value of such a remark, however, the Kaiser replied: "I have the word of the a King, and that is enough for me." (96)

On 28th July, 1914, Austria-Hungary declared war on Serbia. The following day the Kaiser promised to Britain that he would not annex any French territory in Europe provided the country remained neutral. This offer was immediately rejected by Sir Edward Grey in the House of Commons. On 30th July, Grey wrote to on Theobold von Bethmann Hollweg: "His Majesty's Government cannot for one moment entertain the Chancellor's proposal that they should bind themselves to neutrality on such terms. What he asks us in effect is to engage and stand by while French colonies are taken and France is beaten, so long as Germany does not take French territory as distinct from the colonies. From the material point of view the proposal is unacceptable, for France, without further territory in Europe being taken from her, could be so crushed as to lose her position as a Great Power, and become subordinate to German policy. Altogether apart from that, it would be a disgrace to us to make this bargain with Germany at the expense of France, a disgrace from which the good name of this country would never recover. The Chancellor also in effect asks us to bargain away whatever obligation or interest we have as regards the neutrality of Belgium. We could not entertain that bargain either." (97)

C. P. Scott, the editor of the Manchester Guardian, made it clear what he thought of the conflict. "Not only are we neutral now, but we could, and ought to remain neutral throughout the whole course of the war... We wish Serbia no ill; we are anxious for the peace of Europe. But Englishmen are not the guardians of Serbia well being, or even of the peace of Europe. Their first duty is to England and to the peace of England... We care as little for Belgrade as Belgrade does for Manchester." (98)

At a Cabinet meeting on Friday, 31st July, more than half the Cabinet, including David Lloyd George, Charles Trevelyan, John Burns, John Morley, John Simon and Charles Hobhouse, were bitterly opposed to Britain entering the war. Only two ministers, Sir Edward Grey and Winston Churchill, argued in favour and H. H. Asquith appeared to support them. At this point, Churchill suggested that it might be possible to continue if some senior members of the Conservative Party could be persuaded to form a Coalition government. (99)

On 1st August, Asquith wrote in his diary that his government was badly divided on the issue of war: "Lloyd George, all for peace, is more sensible and statesmanlike for keeping the position still open. Grey declares that if an out-and-out and uncompromising policy of Non-intervention at all costs is adopted he will go. Winston very bellicose and demanding immediate mobilization... Of course, if Grey went, I should go, and the whole thing would break up." (100)

Churchill wrote to Lloyd George after the Cabinet meeting: "I am most profoundly anxious that our long co-operation may not be severed... I implore you to come and bring your mighty aid to the discharge of our duty. Afterwards, by participating, we can regulate the settlement." He warned that if Lloyd George did not change his mind: "All the rest of our lives we shall be opposed. I am deeply attached to you and have followed your instructions and guidance for nearly 10 years." (101)

On 1st August the Governor of the Bank of England, Sir Walter Cunliffe, visited Lloyd George to inform him that the City was totally against British intervening in the war. Lloyd George later recalled: "Money was a frightened and trembling thing. Money shivered at the prospect. Big Business everywhere wanted to keep out." Three days later The Daily News argued that it would help business if Britain kept out of the war, "if we remained neutral we should be able to trade with all the belligerents... We should be able to capture the bulk of their trade in neutral markets." (102)

Later that day Grey told the French Ambassador in London that the British government would not stand by and see the German Fleet attack the French Channel Ports. When he heard what had happened, John Burns immediately resigned as he now knew war was inevitable. Charles Trevelyan, John Morley and John Simon also handed in letters of resignation with "at least another half-dozen waited upon the effective hour". (103)

Lloyd George did not submit a resignation letter but he remained unconvinced that Britain should go to war over this issue. His friend, George Riddell, pointed out that he was coming under great pressure from pacifists in the Liberal Party. (104) H. H. Asquith argued: "Some ministers believed that we should declare now and at once that in no circumstances would we take a hand. There is no doubt that, for the moment, that is the view of the bulk of the party. Lloyd George - all for peace - is more sensible and statesmanlike, keeping the position open." (105)

However, in a letter to his wife, Lloyd George admitted he would support the war if Germany invaded Belgium: "I am moving through a nightmare world these days. I have fought hard for peace and succeeded, so far, in keeping the Cabinet out of it, but I am driven to the conclusion that if the small nationality of Belgium is attacked by Germany all my traditions and even my prejudices will be engaged on the side of war." (106)

Andrew Bonar Law, the leader of the Conservative Party, heard about this dispute in Cabinet and wrote to Asquith giving him support on this matter: "Lord Lansdowne (leader of the House of Lords) and I feel it our duty to inform you that in our opinion as well as in that of all the colleagues whom we have been able to consult, it would be fatal to the honour and security of the United Kingdom to hesitate in supporting France and Russia at the present juncture; and we offer our unhesitating support to the Government in any measures they may consider necessary for that object." (107)

The leaders of the Labour Party, especially Ramsay MacDonald and Keir Hardie, did not give their support for a war. Hardie made a speech on 2nd August, 1914, where he called on "the governing class... to respect the decision of the overwhelming majority of the people who will have neither part nor lot in such infamy... Down with class rule! Down with the rule of brute force! Down with war! Up with the peaceful rule of the people!" (108)

The same day as Hardie's speech the German government wrote to the Belgian government: "Reliable information has been received by the German Government to the effect that French forces intend to march on the line of the Meuse by Givet and Namur. This information leaves no doubt as to the intention of France to march through Belgian territory against Germany. The German Government cannot but fear that Belgium, in spite of the utmost goodwill, will be unable, without assistance, to repel so considerable a French invasion with sufficient prospect of success to afford an adequate guarantee against danger to Germany."

The letter went on to argue that to defend itself, Germany the right of free passage across Belgium for its troops. "It is essential for the self-defence of Germany that she should anticipate any such hostile attack. The German Government would, however, feel the deepest regret if Belgium regarded as an act of hostility against herself the fact that the measures of Germany's opponents force Germany, for her own protection, to enter Belgian territory... Germany has in view no act of hostility against Belgium. In the event of Belgium being prepared in the coming war to maintain an attitude of friendly neutrality towards Germany, the German Government bind them selves, at the conclusion of peace, to guarantee the possessions and independence of the Belgian Kingdom in full." (109)

The following day the Belgian government replied: "The intentions attributed to France by Germany are in contradiction to the formal declarations made to us on August 1, in the name of the French Government. Moreover, if, contrary to our expectation, Belgian neutrality should be violated by France, Belgium intends to fulfil her international obligations and the Belgian army would offer the most vigorous resistance to the invader... The attack upon her independence with which the German Government threaten her constitutes a flagrant violation of international law. No strategic interest justifies such a violation of law. The Belgian Government, if they were to accept the proposals submitted to them, would sacrifice the honour of the nation and betray their duty towards Europe." (110)

Winston Churchill now was to time to make it clear that Britain would it could to protect Belgium from Germany: "I would act in such a way as to impress Germany with our intention to preserve the neutrality of Belgium. So much is still unknown as to the definite purpose of Germany that I would not go beyond this. Moreover, public opinion might veer round at any moment if Belgium is invaded, and we must be ready to meet this opinion." (111)

On 3rd August, 1914, Germany declared war on France. That afternoon Sir Edward Grey, the Foreign Secretary, made the first official statement on the crisis. "The French fleet is now in the Mediterranean, and the northern and western coasts of France are absolutely undefended. The French fleet being concentrated in the Mediterranean, the situation is very different from what it used to be, because the friendship which has grown up between the two countries has given them a sense of security that there was nothing to be feared from us. My own feeling is that if a foreign fleet, engaged in a war which France had not sought, and in which she had not been the aggressor, came down the English Channel and bombarded and battered the undefended coasts of France, we could not stand aside."

Grey then went on to talk about Belgian neutrality. "Even if by agreement she admitted the violation of her neutrality, it is clear she could only do so under duress. The smaller States in that region of Europe ask but one thing. Their one desire is that they should be left alone and independent. The one thing they fear is, I think, not so much that their integrity but that their independence should be interfered with. If in this war, which is before Europe, the neutrality of those countries is violated, if the troops of one of the combatants violate its neutrality and no action be taken to resent it, at the end of war, whatever the integrity may be, the independence will be gone."

Grey explained why it was important to defend Belgian independence: "If her independence goes, the independence of Holland will follow. I ask the House from the point of view of British interests to consider what may be at stake. If France is beaten in a struggle of life and death, beaten to her knees, loses her position as a great power, becomes subordinate to the will and power of one greater than herself - consequences which I do not anticipate, because I am sure that France has the power to defend herself with all the energy and ability and patriotism which she has shown so often. Still, if that were to happen and if Belgium fell under the same dominating influence, and then Holland, and then Denmark, then would not Mr. Gladstone's words come true, that just opposite to us there would be a common interest against the unmeasured aggrandisement of any power?" (112)

That evening an estimated 30,000 people took to the streets. They gathered around Buckingham Palace and eventually King George V and the rest of the royal family appeared on the balcony. The crowd began singing "God Save the King" and then large numbers left to smash the windows of the German Embassy. Frank Owen points out that the previous day the crowds had been calling for a peaceful settlement of the crisis, now they were "clamouring for war". (113)

The following day the Germans marched into Belgium. According to the historian, A. J. P. Taylor: "At 10.30 p.m. on 4th August 1914 the king held a privy council at Buckingham Palace, which was attended only by one minister and two court officials. The council sanctioned the proclamation of a state of war with Germany from 11 p.m. That was all. The cabinet played no part once it had resolved to defend the neutrality of Belgium. It did not consider the ultimatum to Germany, which Sir Edward Grey, the foreign secretary, sent after consulting only the prime minister, Asquith, and perhaps not even him." (114)

Charles Trevelyan, John Burns, and John Morley, all resigned from the government. However, David Lloyd George continued to serve in the cabinet. Frances Stevenson, Lloyd George's private secretary, later claimed: "My own opinion is that Lloyd George's mind was really made up from the first, that he knew that we would have to go in and the invasion of Belgium was, to be cynical, a heaven-sent opportunity for supporting a declaration of war." (115)

The anti-war newspaper, The Daily News, commented: "Among the many reports which are current as to Ministerial resignations there seems to be little doubt in regard to three. They are those of Lord Morley, Mr. John Burns, and Mr. Charles Trevelyan. There will be widespread sympathy with the action they have taken. Whether men approve of that action or not it is a pleasant thing in this dark moment to have this witness to the sense of honour and to the loyalty to conscience which it indicates... Mr. Trevelyan will find abundant work in keeping vital those ideals which are at the root of liberty and which are never so much in danger as in times of war and social disruption." (116)

The Labour Party was completely divided by the outbreak of the First World War. Those who opposed the war, included Ramsay MacDonald, Keir Hardie, Philip Snowden, John Glasier, George Lansbury, Alfred Salter, William Mellor and Fred Jowett. Others in the party such as Arthur Henderson, George Barnes, J. R. Clynes, William Adamson, Will Thorne and Ben Tillett believed that the movement should give total support to the war effort. (117)

Ramsay MacDonald stated that he would not encourage the members of the Labour Party to take part in the war. "Out of the darkness and the depth we hail our working-class comrades of every land. Across the roar of guns, we send sympathy and greeting to the German Socialists. They have laboured increasingly to promote good relations with Britain, as we with Germany. They are no enemies of ours but faithful friends." (118)

On 5th August, 1914, the parliamentary party voted to support the government's request for war credits of £100,000,000. Ramsay MacDonald immediately resigned the chairmanship and the pro-war Arthur Henderson was elected in his place. (119) MacDonald wrote in his diary: "I saw it was no use remaining as the Party was divided and nothing but futility could result. The Chairmanship was impossible. The men were not working, were not pulling together, there was enough jealously to spoil good feeling. The Party was no party in reality. It was sad, but glad to get out of harness." (120)

(1) David Lloyd George, speech in the House of Commons (29th April, 1909)

(2) William J. Braithwaite, Lloyd George's Ambulance Wagon (1957) page 121

(3) William J. Braithwaite, diary entry (3rd January, 1911)

(4) William J. Braithwaite, Lloyd George's Ambulance Wagon (1957) pages 84-88

(5) Roy Hattersley, David Lloyd George (2010) page 294

(6) John Grigg, The People's Champion (1978) page 323

(7) William J. Braithwaite, Lloyd George's Ambulance Wagon (1957) pages 126-127

(8) John Grigg, The People's Champion (1978) page 325

(9) William J. Braithwaite, Lloyd George's Ambulance Wagon (1957) page 143

(10) Roy Hattersley, David Lloyd George (2010) page 292

(11) Bentley B. Gilbert, David Lloyd George: Architect of Change (1987) page 438

(12) David Lloyd George, speech in the House of Commons (4th May, 1911)

(13) The Observer (7th May, 1911)

(14) The British Medical Journal (3rd June, 1911)

(15) Emrys Hughes, Keir Hardie (1956) page 200

(16) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 207

(17) David Lloyd George, speech in the House of Commons (19th July, 1911)

(18) Bentley B. Gilbert, David Lloyd George: Architect of Change (1987) page 445

(19) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 208

(20) Roy Hattersley, David Lloyd George (2010) page 299

(21) David Lloyd George, speech in the House of Commons (19th July, 1911)

(22) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 209

(23) David Lloyd George, speech at Kennington (13th July, 1912)

(24) Jonathan Bradbury, William Braithwaite : Oxford Dictionary of National Biography (2004-2014)

(25) John Grigg, Lloyd George, From Peace To War 1912-1916 (1985) page 44

(26) George Cadbury, letter to David Lloyd George (21st March, 1912)

(27) John Grigg, Lloyd George, From Peace To War 1912-1916 (1985) page 47

(28) David Lloyd George, letter to Margaret Lloyd George (15th April, 1912)

(29) David Lloyd George, letter to Margaret Lloyd George (19th April, 1912)

(30) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) pages 226-227

(31) Roy Hattersley, David Lloyd George (2010) page 320

(32) C. K. Chesterton, Autobiography (1936) page 196

(33) W. R. Lawson, Outlook Magazine (25th July, 1912)

(34) Eyewitness Magazine (8th August, 1912)

(35) John Grigg, Lloyd George, From Peace To War 1912-1916 (1985) page 51

(36) Frances Lloyd George, The Years That Are Past (1967) page 54

(37) George Lansbury, speech in the House of Commons (11th October, 1912)

(38) David Lloyd George, speech in the House of Commons (11th October, 1912)

(39) Rufus Isaacs, personal statement (11th October, 1912)

(40) Leopold Maxse, evidence before the House of Commons committee (12th February, 1913)

(41) John Grigg, Lloyd George, From Peace To War 1912-1916 (1985) page 52

(42) Roy Hattersley, David Lloyd George (2010) page 323

(43) George Riddell, More Pages from My Diary (1934) page 146

(44) The Spectator (11th October, 1913)

(45) David Lloyd George, statement at the Marconi Inquiry Parliamentary Committee (28th March, 1913)

(46) John Grigg, Alexander Murray : Oxford Dictionary of National Biography (2004-2014)

(47) George Riddell, More Pages from My Diary (1934) page 158

(48) John Grigg, Lloyd George, From Peace To War 1912-1916 (1985) page 65

(49) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 236

(50) Roy Hattersley, David Lloyd George (2010) page 323

(51) C. K. Chesterton, Autobiography (1936) page 196

(52) David Lloyd George, speech in the National Liberal Club (1st July, 1913)

(53) Jonathan Steinberg, Bismarck: A Life (2011) page 86

(54) Otto von Bismarck, speech (30th September 1862)

(55) Isaiah Berlin, Karl Marx (1939) page 191

(56) David McLellan, Karl Marx: A Biography (1973) page 355

(57) Karl Marx, statement on behalf of the International Workingmen's Association (23rd July 1870)

(58) Karl Marx, letter to Friedrich Engels (17th August, 1870)

(59) Karl Marx, letter to Friedrich Sorge (1st September, 1870)

(60) Geoffrey Wawro, The Franco-Prussian War: The German Conquest of France in 1870-1871 (2005) page 224

(61) The Times (22nd March, 1871)

(62) David McLellan, Karl Marx: A Biography (1973) page 358

(64) L'Humanité (19 March 2005)

(65) The Committee of Public Safety (22nd May 1871)

(66) Isaiah Berlin, Karl Marx (1939) page 187

(67) Francis Wheen, Karl Marx (1999) page 320

(68) Jonathan Steinberg, Bismarck: A Life (2011) page 311 (69)

(69) Kees van Kersbergen, Comparative Welfare State Politics: Development, Opportunities, and Reform (2013) page 38

(70) Otto von Bismarck, speech in the Reichstag (March 1884)

(71) Ernest Peter Hennock, The Origin of the Welfare State in England and Germany, 1850–1914 (2007) page 157

(72) Basil Liddell Hart, History of the First World War (1934) page 3

(73) George W. Steevens, The Daily Mail (8th October, 1897)

(74) S. J. Taylor, The Great Outsiders: Northcliffe, Rothermere and the Daily Mail (1996) page 141

(75) John Grigg, Lloyd George, From Peace To War 1912-1916 (1985) page 128

(76) Keith Robbins, Edward Grey: Oxford Dictionary of National Biography (2004-2014)

(77) The Times (29th July, 1908)

(78) David Lloyd George, letter to Alfred Harmsworth, Lord Northcliffe (9th April, 1908)

(79) Kaiser Wilhelm II, interview in The Daily Telegraph (28th October 1908)

(80) Sir Edward Grey, letter published in The Daily Telegraph (1st November, 1908)

(81) Roy Hattersley, David Lloyd George (2010) page 245

(82) S. J. Taylor, The Great Outsiders: Northcliffe, Rothermere and the Daily Mail (1996) page 141

(83) Roy Hattersley, David Lloyd George (2010) page 306

(84) Bentley B. Gilbert, David Lloyd George: Architect of Change (1987) page 365

(85) David Lloyd George, letter to Winston Churchill (3rd January, 1909)

(86) Lawrence Sondhaus, Naval Warfare 1815–1914 (2001) pages 203-204

(87) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 259

(88) S. J. Taylor, The Great Outsiders: Northcliffe, Rothermere and the Daily Mail (1996) page 143

(89) Martin Gilbert, The First World War (1994) page 4

(90) Hew Strachan, The First World War: A New History (2014) page 9

(91) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 261

(92) Roy Hattersley, David Lloyd George (2010) page 353

(93) George Buchanan, report to Sir Edward Grey about discussions he had with French and Russian officials (23rd July, 1914)

(94) Sir Edward Grey, letter to George Buchanan (25th July, 1914)

(95) Martin Gilbert, The First World War (1994) page 20

(96) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 259

(97) Sir Edward Grey, letter to Theobold von Bethmann Hollweg (30th July, 1914)

(98) C. P. Scott, Manchester Guardian (29th August, 1914)

(99) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 259

(100) H. H. Asquith, diary entry (1st August, 1914)

(101) Winston Churchill, letter to David Lloyd George (1st August, 1914)

(102) The Daily News (4th August, 1914)

(103) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 266

(104) George Riddell, More Pages from My Diary (1934) page 5

(105) H. H. Asquith, Memoirs and Reflections (1928) page 7

(106) David Lloyd George, letter to Margaret Lloyd George (2nd August, 1914)

(107) Andrew Bonar Law, letter to H. H. Asquith (2nd August, 1914)

(108) Keir Hardie, speech (2nd August, 1914)

(109) Letter delivered by the German Ambassador at Brussels, Claus von Below-Saleske, to Julien Davignon, Belgian Minister for Foreign Affairs (2nd August 1914)

(110) Letter delivered by Julien Davignon, Belgian Minister for Foreign Affairs to the German Ambassador at Brussels, Claus von Below-Saleske (3rd August 1914)

(111) Winston Churchill, letter to David Lloyd George (3rd August, 1914)

(112) Sir Edward Grey, speech in the House of Commons (3rd August, 1914)

(113) Frank Owen, Tempestuous Journey: Lloyd George and his Life and Times (1954) page 270

(114) A. J. P. Taylor, English History: 1914-1945 (1965) page 27

(115) Frances Lloyd George, The Years That Are Past (1967) page 73

(116) The Daily News (5th August, 1914)

(117) Tony Cliff and Donny Gluckstein, The Labour Party: A Marxist History (1988) page 43

(118) Ramsay MacDonald, speech (5th August, 1914)

(119) G.D.H. Cole, A History of the Labour Party from 1914 (1948) page 18

(120) Ramsay MacDonald, diary entry (5th August, 1914)