Great War economics : UK and Russia

[shri]

I hereby request members to contribute to this thread so that a long term decision maybe taken by the MODS (if they see fit) to increase British Industry and decrease Russian potential Industry in the game


//The Logistical Significance of the Turkish Straits, Russo–Ottoman War and Gallipoli Campaign in Imperial Russia’s Great War, 1914–19171 by A.J. Heywood// is one of my key exhibits in this.


Key excerpts:
1. The outbreak of the First World War pitched the Russian empire’s international trade into crisis. Not
only did it deprive the country of her largest trading partner, Germany, but it also posed an enormous
and complicated logistical challenge. As was to be expected in any war between Russia and the Central
Powers, Russia’s western land border was closed for virtually its whole length from the Baltic Sea to the
Black Sea, the short border with Romania being the only exception. Furthermore, Germany’s dominance
of the Danish Straits between the Baltic and North seas terminated the long-distance trade of all the
major ports on Russia’s Baltic coast such as Riga, Revel’ (now Tallinn) and the capital St Petersburg
(renamed Petrograd in August 1914). Accordingly the Russians found that, with their Baltic Fleet acting
primarily as a coastal defence force, their international commercial shipping in the Baltic region was
reduced to just a few vessels operating across the Gulf of Bothnia between Sweden and ports on the
west coast of Finland. Apart from the Black Sea ports, the only other significant option in European
Russia for trade with Western Europe, and above all with her two main partners in the war, France and
Britain, was the northern port of Archangel on the White Sea. The port of Murmansk on the Kola Bay off
the Barents Sea was still under construction together with a connecting railway to the capital, and this
route would not open until January 1917

2. Unfortunately for Russia, Archangel was very problematic for handling the immediate and
massive demand for urgent war-related imports. In addition to its annual closure by winter ice, it was far
from the frontline areas, its facilities were modest and its transport connections to the interior were
poor. Its 635-kilometre railway link to the rest of the network at Vologda had merely a low-speed single
narrow-gauge track that had been built in the 1890s with only local commercial needs in mind. As of
1913 this railway still had sufficient capacity for the peacetime traffic

3. Enormous effort was made urgently to complete the Kola project as the Murmansk Railway. But even with priority supplies of materials and food and the use of tens of thousands of PoW labourers the full route was not ready for through traffic until January 1917. As for Archangel, building work to create additional capacity was started as early as August 1914. New loops and storage sidings were created on the Archangel–Vologda railway, almost doubling
its capacity within two months from about five to nine trains per day, and the storage facilities at both
Archangel and Kotlas were expanded. Moreover, in October 1914 the government authorised an order
in the United States for 30 new freight locomotives for delivery to the Archangel line before the end of
the winter, together with the conversion of the whole route to the standard Russian track gauge.


Concluding Summary - It can be seen, then, that the blockades of the Black and Baltic seas functioned alongside the Uboat campaign in the Atlantic as an integral part of the Central Powers’ war strategy, just as the British
and French efforts to blockade and isolate the Central Powers were fundamental to the Allied war
strategy. Moreover, the actual impact of the combined German–Ottoman blockades on the Tsarist war
effort was severe. Together they forced the severe curtailment of Russia’s flows of exports and imports
during the second half of 1914, undermined the national finances, imposed long and slow diversions for
large amounts of urgent goods over routes that had relatively low capacity, and hampered the supply of
food and fuel to the cities of European Russia. For Russia, though, these consequences were not the full
story: the logistical situation was rendered even worse by the outbreak of war with the Ottoman Empire
in October 1914.


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Proposals- The game allows Russian Industry theoretically to expand to level 5, a Stalinist kind of idea, which was logistically and practically impossible (and that is backed by History).
Still something should be there for Russia. Maybe level 3 should be their maximum and only 1 chit at a time allowed in Industry showing the slow progress. However, 2 major decisions in September and again Nov-Dec 1914 to expand Archangel and construct Murmansk at a great cost (say 200 MPP each, spread over 4 turns) should be done, so that British supplies can reach even in Winter.

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A similar case for expansion of British Industry is also made simultaneously, right now Britain is too insignificant in Industry and both France and Russia dominate it. Instead Britain should be sending MPP to all allies (not just Russia, but also France and Italy as historically happened, what can be done is stop the Serbian convoy from France and make it a British one with subsequent diversion to Greece and Italy + an additional convoy route to France itself).

//The increased demand for munitions drove expansion in the output of steel during the war, which reached 9.7 million tons in 1917, or 25 percent above 1913 levels.// +
//By 1917, government spending comprised 38.7 percent of gross domestic product, up from just 8.1 percent before the war.// - This is from Paul Kennedy Rise and Fall of the Great Powers. This was the only case where steel production increased in wartime.

In October and November Britain needs 2 key decisions at say 200 MPP cost each wherein production increases in colonies and India (convoy strength increases by 25-30% from base but this takes 6-8 turns to kick-in).
This will in addition to investments in Industry by UK itself make UK a powerhouse by 1916 economically (that it did become) and able to give subsidies Russia and Italy with a lot of MPP, even 10% for Russia and 10% for Italy means 50MPP more per turn for these nations (of-course the Germans can sink some or all of it to compensate and making Submarine warfare more important). Another thing that can be incorporated is if UK stops the subsidies both Russia and Italy lose morale (they did need these subsidies) and thus can force some decisions on the UK player,
do i send more troops and guns to Haig or to Sinai or Mesopotamia or do Gallipoli or send munitions to my allies?

What these 5 things do-
1. Makes Russia more historical (weaker? but more realistic) - there was no Stalin incharge of Russia in WW1, so Russia reaching it's potential is impossible then.

2. Makes UK much more stronger and more important - UK by mid 1916 was bankrolling all it's allies and infact a secret peace talk had started in Washington in mid 1916, i recently read a thread somewhere about this book -
https://www.amazon.in/Road-Less-Travele ... 1541750950
(This book it seems makes a very convincing case that Germany esp the Chancellor Bethmann Hollweg was ready to negotiate, French were also very read, the English were ready but not sure how so put it upto Wilson of America who fumbled. I have not read the book, just a small excerpt and a review).

3. Makes it important for Germany to invest in higher level submarines ASAP and send out half a dozen or more at sea by mid 1915 to sink Convoys inbound and outbound.

4. Makes it important for UK to invest in ASW ASAP

5. Makes the game more interesting as the UK and makes the UK cornerstone of the Allied policy than Russia or France.

[shri]

https://mappinghistory.uoregon.edu/engl ... 31-06.html

Above table shows, the power of the British empire, total of UK + Empire is over $40 billion of which about 20% is from Empire and rest from home, still it doesn't show the invisible earnings and requisitions like the Indian army being wholly equipped in India and so on, so that puts the empire contribution at minimum 30%.
Yet, out of $125 billion over 40 is from british empire, nearly 1/3 rd, pretty substantial numbers.

Germany does something like 65% of the CP contribution. Though conquests/occupation of Serbia, Belgium, Romania, Poland, Baltic states and later Byelorussia and Ukraine did help the German war efforts, we can easily add another $10 billion through these states in cash & kind to the $62 billion CP efforts, still it shows the allies outspent the CP by a factor of 60% or more. Some of this was wasteful and duplication of efforts and thus only a part of it was useful.

[mdsmall]

Hi shri - The information you have provided about the impact on Russia's international trade of going to war with Germany, and the limitations on its rail-lines to Archangel and Murmansk is really interesting.

When playing the Entente, I rarely send any MPPs from the U.K. to Russia via the convoy routes. I do this partly because Russia has a large economic base to start with and can grow rapidly; and because the U.K. has lots of other demands on its MPPs, in particular to build up its tiny army starting in 1914. Do you know how large were the Entente convoys to Russia from 1914 - 1917, say relative to the overall British or Russian war effort?

I agree with your recommendation to restrict the maximum that the Russian economy can grow using Industrial tech. As you know, in the Icarus mod I have already limited the number of chits Russia can invest in Industrial tech to two. Limiting them to being able to invest only one would be fairly severe but would be worth play-testing. I plan to limit the maximum they can reach in Industrial tech to 3 (or maybe even 2) in the next iteration of the mod.

The history about expanding Archangel suggests that a new DE could be written giving Russia the option to upgrade the port and rail-line to Archangel. Once completed, this could be linked to a new script that increases the maximum of the British convoy to Russia. The base rate might be set at only 5% of the UK economy, but once Archangel is upgraded it could go to 10%. Perhaps once the rail line to Murmansk is completed, it could go to 15% as well as operating all year around. It also sounds like the cost of the DE to build the rail-line to Murmansk should be increased, but if it is made much more expensive, the Entente side will be reluctant to opt for it.

I like the idea of making the British convoys to Russia a more important part of the game than they are at present. One approach might be to reduce somewhat the starting size of the Russian economy (over and above the restrictions on how fast it can grow with Industrial tech) and perhaps increasing the starting size of the British economy, so Britain has a greater capability to send MPPS to Russia and Russia has a greater need from the outset of the war.

Note that under the game system, a power can only send one outgoing convoy, so adding more destinations for the UK to convoy to is not in the cards. The game system partially gets around this, for example, by having a DE whereby the UK gives Italy 4 X 50 MPPs in return for entering the war. That could be replicated say for Serbia. However, I like the existing balance whereby France has to choose between convoying to Serbia or to Italy and the UK has to decide whether to support France by sending troops there or not. That keeps the UK focussed on convoying to Russia.

Some players (looking at you, Bavre) like to send the BEF and other UK units as an expeditionary force to Russia - in particular if the Germans opt for an East first strategy. One could play with enabling/disabling this strategy as an additional incentive to upgrade the rail capacity to Archangel. For example, it might be possible to render the rail-line from Archangel to Moscow to unavailable for operational movement if the Russians do not choose this DE.

I'd be interested in other players thoughts on this thought-provoking topic.

[shri]

Russia financed it's share of the war of a total of around $22.3 billion in the following manner - 40% from Domestic sources (i guess various taxes including Vodka, Railways etc) + 40% from domestic bonds and loans + 20% external borrowing, since US came into the war around the time period after the February revolution, i think these bonds were all raised in the UK alone.
This means upto $4.5 billion or nearly 20% of the Russian economy ran due to British loans/bonds sold in the British empire.

Thus reducing Russian economy starting, increasing British economy and allowing 15% (after sufficient amounts spent for Archangel and Murmansk) will make it more Historical.

To give an idea of how big an amount the figure of $22.3 billion (in 1913 dollars is)-
The whole of Europe, spent a grand total of less than $40 billion (he has written 38-40) between 1873 to 1913 (this includes Russo-Japanese war, Balkan wars, Italo-Turkish wars etc.)- this includes Army and Naval expenses (air force was minimal pre 1914), do remember this is the gold standard (more like gold and silver bi-metallic with gold as reserve and silver & copper for circulation), for an equivalent today will be roughly 65 times on the gold standard and roughly 500 times on the free float FIAT currency standard. Thus, $22.3 billion can be imagined as modern $11.15 Trillion dollars or as $1.45 Trillion dollars (depending on how you want to do the mathematics).
Of course this is spread over a period of over 3 years and not done all at once.

France had spent ~$8.5 billion in this time period
Italy ~$3 billion
Russia - $7.5 billion
UK (not sure if this includes India etc.) - $8.5 Billion
---
Austria - $2.7 Billion
Germany - $7.5 Billion.
Others - maybe a max of $2 Billion (including Ottoman empire)
This is from Paul Kennedy and should be authentic as Kennedy's figures have proved to be right time and again.

The British Empire alone spent over $40 billion in the 4 years of war, more than what all of Europe had spent in 40+ years of "peace".

[shri]

Hi shri - The information you have provided about the impact on Russia's international trade of going to war with Germany, and the limitations on its rail-lines to Archangel and Murmansk is really interesting.

When playing the Entente, I rarely send any MPPs from the U.K. to Russia via the convoy routes. I do this partly because Russia has a large economic base to start with and can grow rapidly; and because the U.K. has lots of other demands on its MPPs, in particular to build up its tiny army starting in 1914. Do you know how large were the Entente convoys to Russia from 1914 - 1917, say relative to the overall British or Russian war effort?

I agree with your recommendation to restrict the maximum that the Russian economy can grow using Industrial tech. As you know, in the Icarus mod I have already limited the number of chits Russia can invest in Industrial tech to two. Limiting them to being able to invest only one would be fairly severe but would be worth play-testing. I plan to limit the maximum they can reach in Industrial tech to 3 (or maybe even 2) in the next iteration of the mod.

Yes, limiting the domestic improvements and increasing (or rather forcing the UK player) to send convoys becomes more historical.

The history about expanding Archangel suggests that a new DE could be written giving Russia the option to upgrade the port and rail-line to Archangel. Once completed, this could be linked to a new script that increases the maximum of the British convoy to Russia. The base rate might be set at only 5% of the UK economy, but once Archangel is upgraded it could go to 10%. Perhaps once the rail line to Murmansk is completed, it could go to 15% as well as operating all year around. It also sounds like the cost of the DE to build the rail-line to Murmansk should be increased, but if it is made much more expensive, the Entente side will be reluctant to opt for it.

I like the idea of making the British convoys to Russia a more important part of the game than they are at present. One approach might be to reduce somewhat the starting size of the Russian economy (over and above the restrictions on how fast it can grow with Industrial tech) and perhaps increasing the starting size of the British economy, so Britain has a greater capability to send MPPS to Russia and Russia has a greater need from the outset of the war.

Note that under the game system, a power can only send one outgoing convoy, so adding more destinations for the UK to convoy to is not in the cards. The game system partially gets around this, for example, by having a DE whereby the UK gives Italy 4 X 50 MPPs in return for entering the war. That could be replicated say for Serbia. However, I like the existing balance whereby France has to choose between convoying to Serbia or to Italy and the UK has to decide whether to support France by sending troops there or not. That keeps the UK focussed on convoying to Russia.

Some players (looking at you, Bavre) like to send the BEF and other UK units as an expeditionary force to Russia - in particular if the Germans opt for an East first strategy. One could play with enabling/disabling this strategy as an additional incentive to upgrade the rail capacity to Archangel. For example, it might be possible to render the rail-line from Archangel to Moscow to unavailable for operational movement if the Russians do not choose this DE.

I'd be interested in other players thoughts on this thought-provoking topic.

Bavre has found a great use of the Ook troops in that case, congrats to him. I had sent it to Serbia in my one Russia first game, 1 HQ + starting BEF + 1 extra corps + 1 cavalry, they held Serbia till Greece came and though i lost one cavalry and 1 corps permanently, it had delayed the game till French became powerful enough to attack on a broad front through France and Italy.

[shri]

Bumping my own post.