You obviously read far more about the subject than me. But just from some statistics about foreign trade I've seen I get the idea that the BE (edit: actually, Great Britain) and France produced the vast majority of their raw materials right at home at the time. This was still the Coal and Steel era. Of which Great Britain was an exporter. Still the world's leading exporter, I believe. They also had lots of other minerals. Some metals came from South America, some from the US, very little from Canada or the european colonies in Africa and Asia. But the dependance from the US was partly one of industrial products (I don't think that would be decisive) and partly one of grain. It'd be very though to get grain elsewhere, as the other traditional big exporters were in Russia and Eastern Europe. But it they really needed it they had empires and plenty of land. If Germany and AH made it through, France and the UK should be able to also.
"At the time" is misleading. In terms of normal, non-war production, the British did manage to cover their industry with home sources of most raw materials. At the height of the war economy in 1916-8, however, this was completely untrue. Not only was production in the British Isles insufficient to cover anything more than the barest majority of needs (with Canada and the United States making up a very large proportion of the rest), as you noted, Britain was very badly short of food (I, perhaps inaccurately, usually class this under 'raw materials' whenever I talk about this on forums). Indeed, the German naval staff, in planning the U-boat campaign, fixated on the food crisis as the key issue, not the collapse of the British financial sector and the hamstringing of her industry, mostly because the Germans were incapable of integrating economic and industrial concerns into war planning due to their utterly awful military hierarchy. (Individual Germans, such as Max Warburg, fixated on the Entente's financial woes in 1916, but they were largely ignored. Warburg was unpopular with the Third OHL, partly because the few non-military types Ludendorff liked to listen to were industrialists, as financiers were seen as largely irrelevant with their pre-1914 warnings having proven inaccurate, and partly because the Entente's financial situation led him to oppose the U-boat campaign.) At any rate, the dependence of the Western Allies on the US was such that, by the summer of 1916 as American factories began to properly gear up for the production of Entente war matériel, over two-fifths of all Entente
daily spending on the war was in the United States.
And I don't think that the British and French would have to completely halt industrial production by any stretch when the hammer came down in April or May 1917; that'd be foolish, considering the scrimping other countries had to do at the same time. The BEF would not simply evaporate. But the problems faced by the UK at such a time would be rather unlike anything any other country had to deal with at the time. Germany and Austria-Hungary, even the Ottomans and Russia, did not face financial apocalypse on the order of what loomed in the spring of 1917 until they had effectively already lost the war, Russia in summer-fall 1917 and the Central Powers at various points a year later. A large part of the reason they were able to maintain their industrial production in such relative order, despite some intermittency in the physical amount of matériel produced, was because their financial systems, also never tranquil, never faced real discontinuities.
What the financial apocalypse of 1917 would do to the Western Allies is manifold. First, the effect would be, while not a series of falling dominoes, very quickly propagated to the rest of the alliance. All belligerent states, from Italy to Russia, were heavily implicated in borrowing in London, and British defaults on their American loans would cause financial crises in other states, too. Even France had been forced to effectively tie their fiscal policy to Britain's in the summer of 1916 after the (mostly failed) McKenna-Ribot negotiations. If anything, this might precipitate the Provisional Government to collapse faster; it would certainly not help matters, and it's nearly certain that the Russians would be forced to bow out of the war sometime before the 1918 campaigning season just as happened historically. Italy could also see its historical 1917 collapse turn from a mere disaster into a
failure cascade; before Armando Diaz "pulled a Joffre" with the aid of British and French forces in OTL, Italy was in serious danger of falling into revolution in the north.
Secondly, while industrial production in these states would not totally stop, for obvious reasons, it would be drastically curtailed. This would have a direct battlefield effect. Remember, after the post-Nivelle mutiny, the BEF took up the reins with a series of massive offensives in Flanders to take pressure off the French, relying largely on their superiority in matériel and manpower. (Commonwealth tactical doctrine would eventually improve in the 1918 counteroffensives - possibly the one thing Haig did right the whole war - and finally give the British a fighting chance without expending disgustingly large amounts of troops and shells, but in 1917 those improvements were a long way off, and the officers to make them weren't present anyway.) One of those things would cease to be an advantage under these circumstances. Looking ahead to 1918, the BEF's positions in Flanders would be much worse than they were historically, probably permitting the Germans to successfully launch a variant of their KLEIN-GEORG or HAGEN offensives instead of the half-success it was in OTL; there would be, for instance, no Passchendaele or Mount Kemmel positions to slow the Germans down. If the BEF on the Continent goes down, combined with severe financial pressure, would the British really be able to politically sustain the war?
That brings us to the third point, the political effects of such a financial crisis and the potential political effects of subsequent battlefield successes. In the OTL 1918 offensives, Germany is usually agreed to have had a slim chance at effectively destroying the BEF or at the very least forcing it off the Continent; even with Americans arriving in large numbers and American financial and industrial support buttressing Entente strength, Lloyd George, Robertson, and Foch all agreed that had Amiens fallen - not even the total destruction of the BEF, but the fall of Amiens! - the Entente powers would have been forced to seriously negotiate with Germany. Now add some more battlefield success for Germany, a food crisis in Britain itself, and a massive shortfall in the City markets, and delete the Americans from the manpower equation and from the financial equation. Would Lloyd George's government be able to survive if it didn't seek peace under those circumstances? I seriously doubt it.
innonimatu said:
Ultimately if they really had to sell stuff they had empires to negotiate, and the US was in land-grabbing mode also. Plus the british could negotiate with their (rather stupid since the beginning of the century) free trade policy. Would the US exporters really want to lose access to european markets? Dependance in these things ends up being two-ways...
Apart from the fact that Lloyd George ruled territorial concessions out as nonsensical and political suicide and rightly so (free trade had already been abandoned anyway), Reginald McKenna did not believe that he was dealing with a united American government on this issue, and he was largely correct. Wilson was a Democrat, and he successfully fought his reelection campaign in the fall of 1916 on a platform of peaceful pro-Entente sympathy, but the Federal Reserve Board's governors were not of the same mind. Benjamin Strong was the only real pro-Entente voice on the Board in late 1916 and early 1917, and illness largely relegated him to a side role; even if he hadn't been sick, Paul Warburg (no relation to the aforementioned Max) probably would've still successfully convinced William Harding, the president of the Board, that the ideal course for the United States was to let Entente orders slowly wind down to permit American industrial adjustment to the evaporating ability to pay. He was, after all, preaching to the proverbial choir. Political pressure from a British Treasury representative to the New York Fed and from Wilson was only able to secure a temporary moratorium on the November note, not a reversal of Fed policy, and McKenna was convinced that the hammer would fall in June 1917 at the absolute latest. At any rate, even if the British and Wilson would have been able to agree on some sort of program to supply the British with enough cash to keep going for a while longer, an extremely unlikely proposition - and at the rates of British spending and the rate of increase of that spending, this would probably have erased the Fort Knox gold reserves by 1918 - they would almost certainly not be able to actually implement it in the face of opposition from the Fed.
