I am aware that the Americans had the Regular Army and the Army of the United States (two separate entities) but what about the British, Canadian, French and other allied armies? Wouldn't there be a glut of mid-level and senior officers and NCO/NCMs in the new peacetime armed forces, or did certain people voluntarily take a reduction in rank?
For the US this problem was solved by the Officer Personnel Act of 1947 (OPA).
Under OPA limits were set for the total number of officers or each rank based on ratios. Officers would be given a set amount of time to advance and if they did not advance they would be forced to retire. The high number of officers of each rank meant that many officers would be forced out.
However, the ratios were still somewhat skewed because they were based on a top down system. That is there were so many colonels for each brigadier gen and so many Lt. colonels for each colonel. The problem was that there were too many officers with stars walking around. This was remedied by the Officer Grade Limitation Act of 1954 (OGLA). OGLA limited the number of total officers in each grade above the rank of Major.
text of OPA warning PDF
I'm afraid I don't know about other armed forces.
Source: Filling the Ranks: Transforming the U.S. Military Personnel System by Cindy Williams
During World War Two the UK defence budget reached a peak of £86bn a year in 1944. In the final year of the war, the defence budgets fell by 48% to about £44bn. When the war ended, Britain had to rapidly change gear for a peacetime economy. At this point the British Army numbered 3.12 million soldiers. Add in the Navy, Royal Air Force and other parts of the military and demobilisation involved five million servicemen and women.
Britain had won the war but it owed huge sums to the US. At the same time, Clement Attlee's government began building the welfare state. Austerity set in and the defence budget dropped - in 1946 falling by 56% to £19.5bn. There was a steep rise in 1947 before it fell back in 1948 and 1949 with cuts of 18% and 4% respectively.
The Times in August 1947 reported "Cuts all round to meet the crisis". The petrol ration was reduced by 33%, coal miners were to work an extra half hour a day. And defence personnel would be cut to 1,007,000 by the end of March 1948, the prime minister announced. By October, further cuts were announced - the armed forces would now number 937,000 by the following April. The Conservative opposition "expressed grave anxiety at the state of the country's defences", according to the Times.
Winston Churchill, now in opposition, made his Iron Curtain speech in 1946. There followed a slow period of realisation that the Soviet Union - formerly an ally against Hitler - was becoming a threat. It is thought the term Cold War was first used by Bernard Baruch, a White House adviser, in April 1947. The UK was moving secretly towards a nuclear deterrent. Despite demobilisation, conscription continued and in 1948 the National Service Act adopted this for peacetime. Britain's role was changing.
Attlee was dismantling the Empire - in 1947 India gained independence. British forces were still being deployed as peacekeepers to the Middle East and to police the Empire. Troops were based in Palestine in the years before the declaration of Israel's independence in 1948. The Malayan Emergency - an attempt to put down a communist uprising - began in the same year and continued until 1960.
Britain found itself at war again in the early 1950s. Winston Churchill - back as prime minister - sent almost 100,000 British troops to serve in Korea - 765 lives were lost. UK defence spending rose dramatically to cope with the operation. And 1952 was the year the UK first successfully tested a nuclear bomb. There was a cut of 6% in 1953, anticipating the Korean armistice of July that year. The resolution of Korea led to hopes of detente. The Times talked of an olive branch being extended from Moscow and Peking (Beijing). There were other operations for UK forces to worry about - the Mau Mau insurgency in Kenya, the independence campaign in Cyprus, and Borneo, among others.
But the Suez Crisis was perhaps the definitive moment for the UK. The seizing of the Suez Canal with France, after Egypt had nationalised it, and then the humiliating withdrawal after pressure from US President Dwight Eisenhower, has been identified by some historians as the moment Britain ceased to be a great power. During the mid-1950s the UK defence budget had bobbed around - up a little in 1954, down in 1955 and up a little in 1956. But in 1957 following Suez, there was a 10% cut.
Spending on defence fell below 7%. The philosophy was set out by incoming Defence Secretary Duncan Sandys in his 1957 Defence White Paper. The army was to be slimmed down again and aircraft numbers cut. The new philosophy accepted the supremacy of nuclear weapons. In February 1957 a Times report summed up Sandys' position: "We must as far as possible resist the temptation to dissipate our limited resources on forces which in themselves had no deterrent value, for to that extent we should be reducing our contribution to the prevention of war."
Sir Lawrence Freedman, professor of war studies at King's College London, says it was an attempt to reduce the cost at a time when the UK was overstretched. "The basic problem was we were still trying to manage an empire, putting a great strain on spending. Sandys' review was a shift to nuclear deterrence." Sandys also announced the end of conscription, although this didn't come into effect until 1963. The defence budget was frozen in 1958 and 1959. By 1960 the British Army was down to 315,000 men - about a tenth of its size at the end of WW2.
I have never heard of the two different armies of the United States before. Could you explain a bit?