The First World War fundamentally undermined the imperial and global economy described in Chapter 2. Given how reliant jute was on that economy, it is wholly unsurprising that war had radical implications for the jute industries of both Dundee and Calcutta. In the short run both were seriously affected by the economic priorities of the war, which brought sharp increases in demand (along with falls in output in continental Europe) and enormous increases in profitability in both the industries. But in the decade following the war it became clear that Dundee's relative position had deteriorated starkly compared with its Indian competitor. Responses to this deterioration were profoundly shaped by the fact that the war also fundamentally changed the dynamics of the imperial relationship between Britain and India.

The first section of this chapter outlines the economic impact of the war on Juteopolis and its rival. The second analyses the shifting balance of power in the imperial relationship. The third summarises the responses in Dundee to this new situation on the part of the jute employers, down to the pivotal year, 1931. The final part focuses special attention on the response on the Left to the new situation of the 1920s, as in the postwar decade the jute unions became, at least initially, more powerful, and the Labour party came to dominate Dundee's parliamentary politics. This last discussion allows us to place the dilemmas posed for Dundee by Calcutta's competition in the context of the national debate about how those on the Left should respond to the need to sustain employment in Britain's staple industries, without advocating a simple protectionist strategy against low-wage competition.

After initial uncertainties in 1914, the war brought Dundee jute to a level of prosperity not seen since the American Civil War. As in other industries vital to the war effort, the government incrementally extended controls over jute to prevent the manufacturers taking too much advantage of their newfound bargaining power. Manufactured exports and raw jute imports were controlled, and later maximum prices imposed. In order to restrict demand for scarce shipping space, from May 1917 the export of jute goods from Calcutta to Britain was prohibited. However, the same shipping scarcity put limits on Dundee's production capacity because of controls on raw jute imports.