Rise of the German State

To summarize briefly, the geopolitical oil outlook in early 1922 looked something like:

• The British had control of Kuwait, Basra and Baghdad
• The French had control of Mosul
• The Americans (i.e., Standard Oil) had control of the entire Soviet Union
  

The allocations were not necessarily "static", per se.. there was a great deal of infighting between the groups, and especially so between the Americans and the British. The Americans (i.e., Standard Oil) had been angling to get a hold of at least some Iraqi oil since at least as early as 1919, and as we've seen in an earlier post, the British were aggressively trying to wrestle control of the Soviet oil fields away from Standard and its Bolshevik puppets (giving rise to such historical "scandals" like the Teapot Dome scandal).

Baku's oil fields were the scene of intense
international competition in the early 1920s

Such was the situation in early 1922. At this point, two events, both of which would ultimately have a momentous impact on subsequent world history, and neither of which seem to have been anticipated by the Western powers, occurred almost simultaneously:

• The Rapallo Treaty was signed between Walter Rathenau (Germany) and G. V. Chicherin (Russia) in April 16, 1922
• Vladimir Lenin suffered the first of four strokes on May 26, 1922. Lenin would soon die on January 21, 1924, creating a power vacuum in the as yet highly unstable Soviet (i.e., Standard Oil) state.
  

Both events must be considered in detail. First we must consider some of the economic motivations the British had for waging WWI in the first place.

The Rise of German Power

Beginning with the political unification of Germany in 1871 under Bismarck, a new center of political and economic might was suddenly created right in the heart of Europe. What had hitherto been a disjointed, balkanized "buffer zone" between France, Austria-Hungary and Russia, had suddenly been transformed into a new, powerful political state in its own right. Moreover, with the adoption of a policy of "national economy" as set forth by Friedrich List, the German economy was charging ahead of its European competition by leaps and bounds.

Otto von Bismarck united Germany in 1871,
after defeating Austria-Hungary in war

There were two things in particular that alarmed the British Crown about this sudden rise of German power:

• German colonialism, and the threat it posed to the British Empire
• German shipping building and advancing naval technology, and the threat it posed to Britain's hitherto unrivaled supremacy on the seas (since the sinking of the Spanish Armada in 1588, at any rate).
  

A more distant cause for concern was the fact that the new German state was not teetering on the brink of bankruptcy, as was the British Empire of the late 19th century. The Germans were operating from a much more secure, and much less debt-ridden, economic basis than the British were.

German U-Boats were London's worst nightmare in WWI,
overturning 300+ years of unrivaled British naval supremacy

Of the two threats cited above, the threat of colonial expansion is probably what ultimately sparked WWI (from London's perspective). However, one should still bear in mind that by 1914 the German Navy undoubtedly reigned supreme on the high seas surrounding Europe, and would likely have won the war for Germany had the U.S. not intervened in 1917.

There were two areas where German colonialism concerned London. One area was in Africa, and especially the German colonies in what area now Burundi, Rwanda, Tanzania and Namibia. Namibia has extensive deposits of gold, diamonds and natural gas, while Tanzania sits on a strategic corridor connecting the (southern) Horn of Africa to Egypt, the Nile Valley and the Suez. The British, who were in control of both South Africa (gold and diamonds) and Egypt (strategic shipping through the Suez), desired to build a railway connecting these two colonies, and German Tanzania sat smack the middle of it.

German colonies (circa 1900) are shown in pink

The second, much more serious (from London's viewpoint), area of German expansion concerned the Ottoman Empire. So as to counteract growing Russian influence in the Balkans, Bismarck entered into a series of alliances and agreements with the Ottomans beginning 1878. These agreements culminated in a project known to history as the Baghdad-Berlin Railway, a project which would ultimately light the sparks that set off the First World War.

Clearly, neither Germany nor Britain have any indigenous sources of oil (North Sea crude excepted, which isn't really indigenous to Britain and was technologically inaccesible anyway in 1914). The lack of pretty much any natural resources (whatsoever) in Europe is largely what has driven Europe's policy of imperial colonialism since the 16th century. With the advent of petroleum-based technological innovations (circa 1859 and onwards), though, the wars for control of natural resources began to grow much more aggressive and much more deadly.

The Baghdad-Berlin Railway was nearing completion in 1914

Bismarck's solution to this problem (i.e., lack of oil) was to contract with the Ottomans and construct a railway that would bring Mesopotamian crude directly into Berlin straight from Baghdad. The British, quite clearly, did not take kindly to this idea. It's out of scope for this post to discuss the "true" causes of WWI, but know that the Baghdad-Berlin Railway played a very key role. Curiously, the Austrian archduke Ferdinand (whose assassination allegedly "sparked" WWI) was killed in Serbia just a few miles away from where construction was being completed on one of the final links of the Baghdad-Berlin Railway.

In the next post, we'll have a look at the Treaty of Versailles, and how the British divided up what remained of German assets to (a) ensure that Germany would never again threaten British naval supremacy; and to (b) implement a policy of a "strategic denial" upon defeated Germany with respect to natural resources (and more especially with respect to oil).