The Politics of Wool in World War I

The cold climate warfare of 1914-1918 rested as much on the nineteenth century industrialization of wool textile production and concomitant growth of Australasian sheep pastoralism as it did on new technologies in steel, explosives, communications, and transportation. By 1900, the wool manufacturing centers of Germany, Poland, France, the UK, the US, Italy, and Japan all relied on Britain’s dominions—primarily Australia and New Zealand—as key suppliers of raw wool. These merino and cross-bred wools were highly prized for both domestic requirements and the international trade in woolen textiles. They were also the backbone of the manufacture of cloth for military uniforms, blankets, and even flags.

The Great War disrupted this intricate global trade. From the outset, Britain worked to control access to wool, partly for wartime purposes, partly to position its own wool industry better to compete in the post-War world. The challenges of keeping a world mired in conflict warm involved diplomatic maneuvering on a scale with the war itself.

In August 1914, none of the combatant nations realized that supplies of raw wool were going to be critical to victory. There was no immediate panic over wool supplies. Governments had expected war to come - the Germans and British had been building wool stockpiles since 1912 - but had not foreseen the scale or length of that war. Still, shortly after the war began, Britain blockaded German ports, and imposed an embargo on shipments to the US of cross-bred UK and Dominion wools, generally used for enlisted men’s uniform cloths and blankets, even from sources as small as the Falkland Islands. The war’s first winter exposed the hard realities of trench warfare, and after the call to arms for a two-million-man army, Britain extended the embargo to include all wools, including fine merinos. The Times (London), described Britain’s wool industry as, “Dependent upon external sources for five-sixths of their raw supplies, relying on other countries for the purchase of more than half their production, and in close trading with all the belligerent countries…” This was, in fact, true of almost all nations that imported Australasian wool.

A number of other issues arose within the wool trade among the Allied and neutral nations in 1914 and early 1915, which diplomacy attempted to address. Prices were unsettled.  Buyers and sellers of raw wool expected shortages due not only to wartime disruption of the trade as the military devoured supplies, but also the problem of shipping wool from distant sources of supply. Both surface and submarine warfare played havoc with cargo shipping; freight rates to London from Australia on greasy wool rose from ¾ d. per pound in July 1914 to 1 7/16 d. per pound a year later. Insurance increased from just over 1% to 7 ½ %, and there was a 20% war surtax on top of that. At this time Australasian wool was still being sold privately, at auction, so shipping and insurance costs were a matter of concern for growers, brokers, and buyers.  There was also the issue of space. Governments and shippers had to juggle competing strategic cargoes: was it more important to send ships to Australia for wool and mutton or to the US or Canada for grain and steel?

In addition, warring nations needed hard currency to pay for the war. British wool textile businesses were expected to continue to spin, weave, and knit and sell to neutral nations, and Allies, and fill any needs formerly supplied by German and Austrian manufacturers, or by firms in the German-occupied parts of France and Belgium. This would have a three-fold effect: 1) to keep the mills working and employees earning, and therefore remaining a docile labor force, 2) businesses and individuals earning income would pay taxes, which would support the war; and 3) the income earned from exports could be used to pay for imports, also necessary to support the war. Similarly, the British needed to sell raw wool and wool tops to the manufacturing nations that needed them in order to fulfill British and Allied contracts for uniform cloth or blankets.

For Britain, this meant that the wartime wool trade had to be controlled as much as possible to keep this strategic commodity out of German and Austrian hands. Not only through direct importation, which the British controlled by blockading German ports, but by preventing, as much as possible, trans-shipping through neutral nations, including Sweden, the US, and the South American wool growers. This control had to be balanced against the exigencies of both hard currency and supply chain needs, and was vested in the Foreign Office, Treasury, and War Trade Department