W. Keith Hancock and Margaret M. Gowing

“ How did the Government ensure that the civilian economy did not absorb resources needed for the war, and how was the supply of civilian goods regulated to prevent the depletion of stocks and unfair distribution? Did the ‘level economy’ become in any marked degree a levelling economy, in which control of the general level of money incomes was reinforced by measures to redress the balance between different classes of income on the principle of ‘fair shares’? ”

“ To dole out reserves of gold and foreign exchange at the rate of £150 millions a year might be sound policy if the war were likely to last three years; it could not be sound policy if the enemy were planning to win it in one year. This must have been the thought in the French Prime Minister’s mind when he declared that he would be ready to sell his nation’s art treasures for American aircraft. If only the Americans had been ready to deliver them! They too were clinging, far more intensely than the French or the British, to the commercial, unmilitary notion of time. ”

“ The men who understood modern war knew that the armed forces of the nation were no more than ‘the cutting edge’ of a mechanism that included all the departments of state and all the national energies that those departments controlled. Since modern war demanded mobilisation of the total resources of the nation, the task of studying it and preparing for it must involve investigations penetrating every sector of the national life. ”

“ At the beginning of the First World War, when huge administrative structures such as the Ministry of Munitions had not yet as even been dreamt of, the mainspring of industrial mobilisation was by necessity economic demand, not sovereign command. It was government expenditure that released the spring. The Government had to spend immense sums of money in order to achieve at maximum speed the maximum intensity of economic employment; it had to keep on spending them in order to feed the war machine’s insatiable appetite for men and steel. ”

“ At the end of March, M. Reynaud pictured to the Supreme War Council a general feeling among neutrals ‘that the war had reached a deadlock, that Germany had only to wait, and that then, like the better of a pair of chess players, she would be able to take her enemy’s pieces one after another’. A war, after all, could not be won merely by trying not to lose it. Such an outlook, the Chiefs of Staff declared, was very unlikely to inspire neutrals who, whatever might be their sympathy with the Allies, had no wish to share the fate of Poland. ”

“ In the United Kingdom, there was at the outset of the First World War no clear conception of war economy as a unified structure in which military and civilian requirements must be kept in proper balance with each other: on the contrary, those piecemeal controls that have already been surveyed contained within themselves the possibility of cumulative and ruinous unbalance. When, for example, the War Office satisfied the Army’s demand for jute, it did so at the expense of civilian demand: that is to say by curing its own scarcity it created a new one. ”

“ It cannot be said that the British departments and their French visitors had achieved a very impressive body of combined economic preparations by the time war began. It was perhaps easier for them to agree upon plans of economic warfare against the enemy than upon plans for strengthening and combining their own economic resources: to decide what had to be done in order to deny all imports to Germany was one thing, to agree upon the division of available tanker tonnage between France and the United Kingdom was quite another. ”

“ Issues so crucial and so intricately tangled called for skillful and firm handling on the British side. At every point the British had much to lose: at every point their losses might be severe if they failed to strike a just balance between their competing claims; if they failed to argue their case as a whole. This had always been the doctrine of Purvis—and of Monnet, who in July 1940 went to America to take service under Purvis. [9] During the nine months between the fall of France and the advent of lend-lease, the doctrine embodied itself with reasonable success in organisation and policy. ”

“ Not merely would it widen the budgetary gap and aggravate the problems of government accountancy, but it would throw into confusion the social accounting of all households and classes of the nation; it would generate economic waste, and social injustice of the most embittering kind; it would hinder and distract the orderly mobilisation of the nation’s power in war, and after the war would heap upon the nation a heavy burden of suffering and discord. ”

“ When all due allowance has been made for the special difficulties of the change-over from peace to war, there still remains the obstinate contrast between a volume of imports far higher in the first year of the war than in any subsequent year, and a seriously weakened stocks position. Government and people had failed in this time of grace to make provident use of British sea power. The nation had not as yet adjusted its imagination and will to the hard realities that would compel it, later on, to live lean. ”

“ They are, in the main, the themes which the theorists of war economy will be looking for—the United Kingdom’s capacity to procure and transport overseas supplies, the mobilisation of its military and industrial manpower, the condition of its basic industries, the suction of resources out of the sector of civilian industry, the efforts to ensure ‘fair shares’ of what remained, the efforts to curb the inflationary tendencies of the whole process. ”

“ There would have been no sense in choking the armed forces with zealous men for whom there were no weapons. Nor would there have been any sense in turning men out of their jobs in the so-called ‘unessential’ industries before the munitions factories were ready to employ them on new jobs. What needs now to be investigated is the pace of industrial mobilisation during the first nine months of war. A word needs first to be said about the balance between the Services and industry. ”