# British War Economy/Chapter III

ORGANISATION AT THE CENTRE
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At last the mounting tension of the years and the suspense of the summer months of 1939 were broken. In those first September days, when the Polish cities were already burning, the people of British cities filled their sandbags, erected their Anderson shelters, groped their way nightly in unaccustomed blackness and by day watched the pathetic processions of labelled children moving to the railways stations. On the morning of Sunday, 3rd September, they heard that their Government had declared war against Germany. They listened for the air-raid sirens and the German bombers.
At Westminster, the Government immediately sought from Parliament new additions to the exceptional powers with which it had been vested during the past fortnight. Even in time of war, no British Government can act outside the law. It has to find legal authority for its actions, either under the Common Law, or the Royal Prerogative, or Statute Law. Since the use of the Common Law and the Royal Prerogative is subject to strict limitations, it must secure most of its emergency powers from Acts of Parliament and from the Regulations and Orders made under those Acts.
At the beginning of the First World War, before the intensity of the economic effort and the extent and penetration of administrative control had revealed themselves, the Government’s attempts to equip itself with legal powers had been of necessity experimental and hesitant. In November 1914, when it issued the first consolidated code of the Regulations made under the first Defence of the Realm Act, it announced its intention to interfere as little as possible with the ordinary avocations of life and the enjoyment of property. Later on, when necessity compelled it to interfere drastically, it found frequently that its actions were challenged in the courts by contentious and often successful plaintiffs. These undesirable consequences of legal unpreparedness had been taken to heart: so much so, that among all the multifarious plans for war, the preparations of war legislation became perhaps the most thorough and complete. Study of the emergency powers that would be required in a future war had begun in 1924. By July 1937 the Committee of Imperial Defence had approved a draft Defence Bill and a comprehensive draft code of Defence Regulations. It had in addition marked out a considerable number of special subjects to be dealt with by separate legislation. Thus, two years before the Second World War broke out, the foundations of the necessary powers were in good shape.
However, there still remained a good deal of detail to fill in. The draft Defence Bill and Regulations had also to be kept up to date and additional emergency legislation had to be drafted and co-ordinated. Moreover, as crisis succeeded crisis—Vienna, Munich, Prague—the problem of timing became critical. Should the Defence Bill be introduced in advance of the emergency? Should it be introduced at the onset of emergency, but before the outbreak of war? Or should it be held back until hostilities had actually started? And how should the issue of Defence Regulations be spaced? Which ones should be issued before the onset of emergency, which ones before the outbreak of war? Which ones should be held back until war was declared? The pros and cons of these questions were much discussed; but it was considered that final decisions must depend upon the precise circumstances of the emergency and of the transition from a state of emergency to a state of war. In April 1939, the Cabinet agreed to get the Defence Bill passed through Parliament at the beginning of the emergency, when many precautionary measures, such as civilian evacuation would be set in hand. It also agreed to rearrange the main code of Regulations into two sub-codes according to their suitability for issue before or after war broke out.
At last the moment came. On 22nd August the Cabinet decided to introduce the Defence Bill and request its passage in a single day. On 24th August the Bill became law as the Emergency Powers (Defence) Act 1939. It was purely an enabling Act, empowering His Majesty by Order in Council to make such regulations as appeared necessary or expedient for securing the public safety, the defence of the Realm, the maintenance of public order, the efficient prosecution of any war in which His Majesty might be engaged and the maintenance of the supplies and services essential to the life of the community. It specified six particular purposes for which regulations might be made—the punishment of offences against the regulations, the detention of persons in the interests of public safety or the defence of the Realm, the possession or control of any property, other than land, entry into any premises, and the amendment, suspension or application of any other Acts. In this lavish delegation of its authority, Parliament included also a wide power of further delegation: Defence Regulations could empower such authorities as they specified, to make orders, rules and bye-laws while these ‘third generation’ orders might in their turn beget a further brood of directions and general licenses.
Nevertheless, the Government evidently desired to set a limit to the things that could be done under authority derived directly or indirectly from the Defence Act. During the opening weeks of the war it invited Parliament to pass some sixty additional Statutes. There were some legal gaps to be filled; the powers specified in the Defence Act did not, for example, authorise the imposition of taxation or the general expenditure of public money, nor alterations in peace-time public services and the administration of justice. There were some other things that might legally have been done by regulation under the Defence Act, but were for political reasons more prudently done by special legislation after full parliamentary discussion. Property compensation was one such thing, military conscription was another. As for industrial conscription, the Government was not as yet ready to ask for it, nor the trade unions to permit it, either under the Defence Act, or in any other way.
Apart from these deliberate omissions, the Government secured from the Defence Act of 1939 as much power as it then needed to legislate by subordinate instruments. In the crisis of 1940 it sought and obtained from Parliament two further Emergency Powers Acts. There is an instructive contrast in the legislative history of these two Acts. The first was very short. It declared simply that all persons might be called upon to place ‘themselves, their services and their property’ at the disposal of His Majesty. This assertion of a limitless power of conscription was in part a gesture to the times, since the Act of 1939 had already given to the Government complete powers over property; but in part it was far more than a gesture, since it introduced something new and important—industrial conscription. It passed through all its stages in one hectic day. The second Act, which was also short, was debated for three days in the Commons and two days in the Lords. Its purpose was to provide in the event of ‘actual or immediately apprehended enemy action’ a system of special war zone courts in place of the ordinary centralised system of criminal law. The need to invoke this Act never arose; but its stormy passage through a Parliament that had agreed almost without debate to the conscription of life and property is a fact of great historical significance. At a time of intense national danger and unlimited national resolution, Parliament was moved profoundly by the fear of domestic encroachments upon those civil liberties which foreign enemies were threatening with complete overthrow.
The present narrative is not a constitutional history of the United Kingdom at war; nor can it discuss those deeper themes of political philosophy that are implicit in the war-time tension between authority and liberty. Nevertheless, there may be some profit in looking briefly backward and forward from the summer of 1940 in order to identify some of the main issues.
Judging from the evidence of the Statute Book, of the volumes of Defence Regulations and of Statutory Rules and Orders, it would at first sight appear that the powers which Parliament surrendered the to Government for the purpose of defending national freedom left in being very few of those concrete individual freedoms for which Parliaments of earlier centuries had struggled so steadfastly. In some fields, the planners of legal preparedness had hoped to mitigate government encroachments upon civil liberties; they had for example earmarked for last-minute scrutiny and decision by ministers the Home Secretary’s power to detain persons upon suspicion. In the hectic days of August 1939 the opportunity for this last-minute scrutiny was never found. In other fields the wide powers claimed on the Government’s behalf simply reflected the incompleteness of detailed planning. Industrial plans, for example, were in September 1939 still in a very elementary stage; yet Defence Regulation 55 made provision for the most comprehensive and stringent control over industry. The Government preferred to run the risk of asking for too much power rather than discover later that it possessed too little. In general, its memory of the embarrassments of the previous war and its anticipation of stress in the coming one moved it to close every legal loophole and to secure the fullest power to cover every contingency that might arise. Such loopholes as were still left open by the Defence Act of 1939 were effectively closed on 22 May 1940.
But did the Government hold and exercise its emergency powers unconditionally? After May 1940 the surrender of the liberties of economic classes in the interests of national war-making power was never seriously challenged; but Parliament showed a steady disposition to criticise, and where necessary to curb governmental interferences with individual liberties. The most effective check upon unnecessary or excessive interferences did not come from the judges; it came from the M.P.s. The absence of guaranteed rights in the British constitution meant that extraordinary powers, provided they derived from Act of Parliament, could not be challenged in the courts on grounds of ultra vires; moreover, since Parliament had entrusted to the Government complete discretion about what was ‘necessary’ or ‘expedient’, judicial control was virtually confined to questions of interpretation. But Parliament still retained its ultimate political control over the executive; it could, and, in 1940, it did force out of office a Government in which it had lost confidence. From a Government to which it gave its confidence without stint it still demanded proofs of efficiency, equity and restraint in the use of emergency power. Apart from its stubborn questioning of the war zone courts, it had granted willingly and even enthusiastically the enabling powers of the Defence Acts, and it accepted without demur most of the Regulations made under these Acts. But against some Regulations it concentrated heavy fire—most notably against the powers to suspend Habeas Corpus, to control propaganda and establish press censorship, to prevent attempts at spreading disaffection in the Services and to suppress without warning any newspaper which systematically published matter ‘calculated to foment opposition to the successful prosecution of the war’. Its criticism was not in vain; for sometimes it moved the Government to modify Regulations, and always it inculcated a salutary moderation in the administration of the more distasteful ones, such as those that gave the Government power to detain persons on suspicion and to suppress newspapers. Moreover, the House of Commons showed an increasing anxiety to extend its effective control over Regulations to cover those multitudinous rules and orders which departments were by Regulation empowered to make. Parliamentary procedure, combined with the sheer bulk of the orders, made effective scrutiny very difficult. Nevertheless, continued parliamentary pressure did secure greater uniformity of procedure among the departments issuing this subordinate legislation; it secured also greater care in drafting, and the publication of explanatory notes for the purpose of making difficult orders more easily comprehensible, Finally, it led in 1944 to the establishment of a Select Committee to scrutinise rules and orders as they were issued.
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Most historians of British responsible government have attuned their story to the theme of liberty. It might with equal appropriateness be attuned to the theme of efficiency: indeed, the inspired constitutional historian, if he ever arises, will combine both themes in harmony. The personal responsibility of ministers and the collective responsibility of the Cabinet supply strong inducements for cleaning up all those inefficiencies that inevitably from time to time find lodgment in the complicated government structure. At the beginning of a great war, the ramifications of that structure and its ponderous bulk increase with immense rapidity. The switch over of the machinery of government from peace to war is no less difficult a task than the switch over of factory equipment, or the transformation of civilians into soldiers. If the task is mishandled, civilians will go short of food and armies of weapons, campaigns will be lost, the will to win them will waver.
As has been seen in an earlier chapter, the Committee of Imperial Defence had given much thought to the problems of government organisation in time of war. There was, to begin with, the problem of constituting new ministries or reconstituting old ones. The Government had begun to attack this problem even before war broke out. In the spring of 1939, the small but comparatively efficient Food (Defence Plans) Department had been freed from the apron strings of the Board of Trade and given independent status under a Minister; in the summer, the Ministry of Supply was constituted and the Ministry of Labour vested with National Service functions. Moreover, plans had been written in the War Book for the Government to introduce swiftly a Bill enabling the establishment of new war-time ministries, and then to set up Ministries of Home Security, Economic Warfare, Information, Food, Shipping. On 1st September 1939, the Bill passed through all stages into law and ministers were shortly afterwards appointed to all the new offices. Before France fell, another new Ministry—that of Aircraft Production—had been created. All the new ministries with economic functions to perform found themselves faced with common problems of organisation. If they were to exercise detailed control over the trades and industries entrusted to their oversight they had to expand their staffs with great rapidity; but they could find in the civil service neither the numbers nor the expert knowledge requisite for their efficiency. They therefore reinforced their administrative strength with academic persons whose names were on the National Register and built up their industrial controls chiefly with business men who had experience in the industries now subjected to control This partnership of civil servant, don and business man turned out to be one of the most interesting and fruitful administrative experiments of the war: its history, in each significant sphere of economic management, will be told in the appropriate volumes of this series. In the present volume, the problems of government organisation can be considered only from a central point of view, and even then only briefly.
The more widely functions were diffused among departments, the more necessary it became to institute efficient machinery for knitting them together into one coherent policy for winning the war. The Ministries of Supply and Economic Warfare had to serve the needs of strategy. The Ministry of Labour had to produce men for the Ministry of Supply’s contracts and for the Forces themselves. The Ministry of Food’s actions were heavily influenced by the policy of the Ministry of Shipping. The list could go on indefinitely; for all the strands of home and economic policy were intertwined, and economics and strategy were themselves inextricably mingled.
The responsibility for infusing unity of purpose into all the dispersed activities of government rested squarely on the War Cabinet. In the War Book it had been laid down that the final choice between different models of the ‘Organ of Supreme Control’ must be made by the Prime Minister in power when the emergency arose; but there never was any real doubt that the only practical course in a great war would be to establish immediately a War Cabinet with supreme power. Accordingly, on 1st September 1939, Mr. Neville Chamberlain informed the Cabinet that if war came he would immediately set up a War Cabinet on the 1916-19 model. He did so on the first day of war. The Cabinet resigned, the Committee of Imperial Defence died, the War Cabinet held its first meeting. Its members were the Prime Minister, the Chancellor of the Exchequer, the Minister for Co-ordination of Defence, the Lord Privy Seal, the Foreign Secretary, the First Lord of the Admiralty, the Secretaries of State for War and for Air, and the Minister without Portfolio.
There had been between the two wars a good deal of academic discussion about the principle on which Mr. Lloyd George’s War Cabinet had been constructed. Most writers had ascribed its virtues to its limitation in size to five or six members and these members’ freedom from departmental duties. The Committee of Imperial Defence had itself envisaged for any great war of the future a War Cabinet of this kind. But the War Cabinet set up in September 1939 had nine members, five of whom had to carry heavy departmental responsibilities. The theorists of government were in consequence inclined to lament what they considered a departure from true principles. They forgot that the making of a government is a delicate operation in which personalities count as much as the design of a machine. They over-estimated the contrasts, they under-estimated the identities and similarities between the War Cabinets of the two twentieth-century wars. By peace-time standards, the War Cabinet set up in September 1939 was, like its predecessor, very small, and its proportion of non-departmental ministers was large. Again like its predecessor, it did not confine its meetings to its own members, but called in other ministers when it thought their attendance necessary indeed, it summoned the Minister of Home Security and the Secretary of State for Dominion Affairs to practically all the meetings held between September 1939 and May 1940. It also regularly summoned the Permanent Secretary to the Treasury and one or other of the Chiefs of Staff, or their deputies. Its meetings in this period were usually about fifteen strong—about half the size of the normal pre-war Cabinet and very manageable compared with the ‘bear garden’ atmosphere which was said to have characterised some War Cabinet meetings during the First World War.
In the autumn of 1939 the War Cabinet met once, or sometimes twice daily; but in the winter of 1939-40 it discontinued its Sunday meetings, limited its Saturday meetings to specially urgent business and arranged them on a rota system. Not until the invasion of Norway did it resume full meetings for each day of the week. Even so, it cumbered itself in this first period of the war with rather too much detail. It could not, of course, devolve upon the Chiefs of Staff or any other body the responsibilities of high political decision, but it involved itself perhaps more widely than it need have done in matters which departments might have been left to settle: for example, some of the smaller details of food rationing or the handling of Army petrol. Not that it ignored the advantages of decentralisation: on the contrary, it authorised some sixty War Cabinet committees, of which about two-thirds were inter-departmental, non-ministerial bodies. The number seems impressive, but mere number is no guide. Fewer committees might possibly have done more competent work.
The military committees had their shortcomings, but, unlike the civil committees, they could at least build upon a firm basis of proved experience; the Chiefs of Staff Committee and its sub-committees for Joint Planning and Joint Intelligence were already in existence. It was felt, however, that a ministerial committee was also needed, to provide for the regular exchange of views between the ministers primarily responsible for defence and the Chiefs of Staff, to save the War Cabinet’s time by giving preliminary consideration to complicated reports from the Chiefs of Staff, and to serve as a clearing house for the discussion of new strategical ideas. At the end of October 1939, therefore, the Ministerial Committee on Military Co-ordination (the M.C.C.) was established, with terms of reference so wide that, as one authority pointed out, ‘an almost infinite variety of grist could be brought to its mill’. Grist came in plentifully, both from the side of supply and that of operations. By the time of the Norwegian campaign the M.C.C. had fitted itself reasonably well into the chain of command. It did not, however, establish itself as a permanent institution of war government. Some people doubted whether the same body could handle effectively both supply and strategy. There was moreover difficult in finding the appropriate chairman. The office of the Minister for Co-ordination of Defence had been established in 1936 for peace-time duties with the Committee of Imperial Defence; in time of war the Minister had no clearly defined functions. The War Cabinet was the real co-ordinator, and no one but the Prime Minister could be its effective spokesman on defence policy. In April 1940 the office of Minister for Co-ordination of Defence lapsed, and Mr. Churchill, as First Lord of the Admiralty, assumed the chairmanship of the M.C.C.; but even he requested the Prime Minister to take the chair when exceptionally important matters were discussed. The last reorganisation of the M.C.C., on 1st May 1940, provided that the Prime Minister would preside whenever possible, and in his absence the First Lord.
Ten days later, Mr. Churchill became not only Prime Minister but also Minister of Defence. While retaining the Chiefs of Staff machinery he set up to assist him a Defence Committee (Operations) and a Defence Committee (Supply), both infinitely flexible bodies. This arrangement was challenged later on, at times when the war was going badly; but it endured to the end of the war.
On the civil side the need for an efficient mechanism was if anything greater; for whereas the Service Ministers were all members of the War Cabinet, the majority of civil departments were unrepresented in it. If therefore the separate activities of these departments were to be effectively and continuously focused upon the main objectives of war policy, the War Cabinet must establish bodies vested by devolution with substantial authority. But there did not exist on the civil side the same firm foundation of peace-time organisation; nor had the Committee of Imperial Defence devoted much time to planning the structure of civil committees. In the little that was said or written about this subject after Munich, two committees had been contemplated—a Home Security Committee, and a Home Affairs Committee which would concern itself with ‘all domestic affairs’. When war came a third committee—the Ministerial Priority Committee—was set up to supervise the allocation of productive resources.
The Ministerial Priority Committee and, still more, the Home Affairs Committee were prolific parents of sub-committees. Yet there remained apparently an important gap to be filled; for in October 1939 the Prime Minister and the Chancellor of the Exchequer decided to appoint an inter-departmental committee ‘in order to keep under review and to co-ordinate the functioning of the departments in relation to the economic effort of the country as a whole and to make any necessary arrangements for Anglo-French economic co-operation’. Lord Stamp was to preside over this committee, which indeed was expressly intended to continue and expand the work of the Stamp Survey. However, two days later, a Ministerial Committee on Economic Policy was constituted above Lord Stamp’s committee of officials—the first example of a ‘two-decker’ committee structure which was soon imitated in the sphere of food policy and elsewhere.
The pattern of organisation was complicated and for some time there was much uncertainty about the boundaries of jurisdiction. Frequently they came to be drawn along lines that had not been foreseen. For example, the Home Policy Committee failed to establish itself as the authority exercising effective oversight a ‘all domestic affairs’. On the other hand, the Economic Policy Committee quickly achieved a position of importance. Here a clear thread of continuity could be traced with the pre-war methods of economic co-ordination. The Treasury still held the key positions. No doubt this was due in part to the personal position of the Chancellor of the Exchequer (Sir John Simon) and his Permanent Secretary (Sir Horace Wilson) in the counsels of the Prime Minister. The Chancellor, alone among the ministers concerned with economic affairs, had a seat in the War Cabinet; he was also chairman of the Ministerial Economic Policy Committee and the political supervisor of Lord Stamp’s work. The Permanent Secretary to the Treasury was chairman at the official level of both the Economic Policy and the Food Policy sub-committees.
This balance in the composition and leadership of the civil committees was reflected in their deliberations: the economic effort of war was commonly assessed in terms of finance rather than of physical resources. Much study was given to the problems of foreign exchange and domestic inflation but less to the problems of industrial production and of the mobilisation of shipping, manpower and raw materials. Shipping, indeed, slipped through the hands of all the committees and was in the end dealt with by a special review of import problems by the Lord Privy Seal.
These limitations of central economic control were perhaps aggravated by the absence at that time of adequate machinery for the collection of economic information., However, beginning was made by the establishment of a Central Economic Service in November 1939. It was a small beginning—nothing more than the engagement of one or two additional economic experts to assist Lord Stamp—but from it grew later the Economic Section of the Offices of the War Cabinet and the Central Statistical Office.
Fundamentally, however, it was not in the mere assembly of economic data, but in the approach to the data and the handling of it that the War Cabinet in this first period of the struggle differed from the new War Cabinet which took power in May 1940. Before May 1940 the Government thought of ‘financial and economic plans’ and put the accent on the first word. The new Government shifted the order of words and put ‘economic’ in front of ‘financial’. It continued and indeed carried further its predecessor’s anti-inflation policy; nor did it despise budgetary arithmetic; but it shifted the emphasis of planning to the simpler arithmetic of import programmes and stocks and the supply of skilled engineers. The new attitude announced itself emphatically in the composition of the new War Cabinet. Sir Kingsley Wood, who succeeded Lord Simon as Chancellor of the Exchequer, was given neither the chairmanship of the Economic Policy Committee nor a seat in the War Cabinet; but there was a strong representation in the War Cabinet of ministers who, then or later, were charged with the main burden of mobilising and allocating the nation’s physical resources—Mr. Bevin, Minister of Labour and National Service; Mr. Arthur Greenwood, Minister without Portfolio and chairman of both the Economic Policy Committee and the newly established Production Council; Mr. Attlee, who was appointed Lord Privy Seal and chairman of both the Home Policy Committee and the Food Policy Committee. Mr. Neville Chamberlain for the few months before his death acted as Lord President of the Council—an office destined to achieved pre-eminence in guiding and governing the nation’s economic energies.
A good deal of experiment had still to be made, both with personalities and mechanism, before the new Government found itself smoothly in gear with its economic task. The task would soon be defining itself in new ways as unemployed resources were absorbed and scarcity became the chronic condition in all sectors of the national economy. When that happened, the need would be much more urgent than it had been in the first period of the war to establish at the centre of government an efficient mechanism of economic control.
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In all essentials, the strategical principles agreed upon by the British and French in May 1939 remained in force after 3rd September. The Germans, it is true, did not open the first phase of the war in the gruesome way that had been anticipated, nor did the Italians show any clear intention of intervening. At first, the Allies welcomed the respite as an unexpected gift of time, allowing them to develop undisturbed their own deliberate plan of war. They believed that they could do nothing to prevent the enemy from striking down Poland and that it would be a big mistake for them to attempt offensive land operations in the west. They ruled out an air offensive in the belief that it would call down on their own cities retaliation out of all proportion to the damage it could inflict on the enemy. They felt themselves compelled to remain on the defensive until they had narrowed the gap between Allied and German resources, or until the Germans ‘took some action which threatened decisive results against us or the French’. They did not dispute the enemy’s initiative.
At home there was an anti-climax; no air raids, no mass slaughter, but some social strain and soon considerable boredom. Static war, or ‘phoney war’, as some people began to call it, was not after all so very different from the phoney peace of recent years. On 9th September, when the Germans were at the gates of Warsaw, the British Prime Minister announced that his Government was preparing for a three years’ war. In the lull that came after the dust and ashes had settled upon Warsaw this announcement seemed somehow comforting; it meant there would be no negotiated peace, it meant that time was ‘on our side’. At sea indeed there was no ‘phoney’ war. The merchant seamen were facing danger and death. Though the Royal Navy was bringing most of the convoyed ships to port, it had to cope not only with U-boats but with ocean raiding by pocket battleships. It was also striving to draw a tightening ring around the German economy. On land and in the air life was easier. A British Expeditionary Force—small, perhaps, but ‘wonderfully prepared’—had crossed the Channel into France, where, it was popularly supposed an impregnable Maginot Line stretched from the North Sea to Switzerland. British soldiers sang that they would hang out their washing on the Siegfried Line. Meanwhile the Royal Air Force was scattering over Germany leaflets which proclaimed not only the wickedness but also the weakness of the German Reich. In British propaganda, at home as abroad, the dominant note was ‘assurance of victory’. If this assurance did not intimidate the enemy, it lulled the British people.
Perhaps it lulled the British Government. Accepting its own military passivity as inevitable and the enemy’s unexpected pause as a reprieve, the Government pushed on the work of rearmament in depth, designing long-term programmes of expansion to yield fruit in future years. The programmes were of varying ambition. The merchant shipbuilding programme was not particularly impressive, but it was complementary with a warship-building programme designed to exploit United Kingdom and Empire capacity to the full. The Air Ministry aimed high—at 2,500 aircraft a month by mid-1942 and more thereafter. The Ministry of Supply was authorised by the War Cabinet to begin industrial preparations for a fifty-five division Army—the thirty-two British divisions already agreed a few months back, and an additional twenty-three divisions to be supplied by the Dominions, India and prospective Allies. This fifty-five division scheme was an aspiration rather than a programme; it was soon hedged about by conditions whose fulfilment was not yet in sight and it was destined for a time which the War Cabinet called vaguely ‘as soon as possible’. Here was no immediate answer to the rearmament in width already achieved by Hitler. The conversion of British industry to a full war basis did not move fast. Government expenditure, even with its figures concealing a substantial rise in prices, rose gently from about £20 millions a week in the first two months of war to about £33½ millions a week in the sixth month.
But the blockade was already operating and the British people expected great things from it. Their expectations derived in part from the political education given to them in the wistful peace-time years, when the power of blockade was re-named ‘sanctions’ and envisaged as an instrument of the new international order. Many people had believed that ‘sanctions’ could achieve mastery over the armed forces of even the strongest nations; it was natural for them to keep on believing it when yet another name for the same thing—this time it was ‘economic warfare’—signified the collapse of the international order and the reversion of blockade to its traditional role as an instrument of national policy. These changes of name were perhaps partly due to the realisation that new methods of assault and constraint were now available to reinforce the action of naval blockade; but they were also due to the successful German propaganda against the ‘hunger blockade’ of 1914-18. In denouncing its inhumanities, the Germans had exaggerated its successes, thereby covering up the mistakes their own government had made in planning the German war economy. The distortion was a useful aid to German policy abroad, for it fostered the illusion in the western democracies that blockade, sanctions or economic warfare—the name does not matter—could be employed as a substitute for military force.
British statesmen and their expert advisers had shown between the wars considerable uneasiness over this popular tendency to ‘exaggerate the potency of the blockade weapon’. They were aware that many of the drastic effects popularly attributed to the blockade had in fact been produced by mistakes of German economic policy before and during the First World War, by its failure to build up stocks of fertilisers and food, by its faulty distributive mechanism and the lack of balance in its agricultural effort. When in 1937 they sharpened their studies of blockade policy and focused them upon the German economic system, they found it hard to believe that the German Government and its experts would be taken in by their own propaganda and make the same mistakes again. Admittedly, the Germans were heavily dependent upon overseas supplies of iron-ore, manganese, alloy metals, liquid fuels, edible fats and some other materials; but it was thought that they were building up plentiful stocks of these commodities and preparing large schemes of substitute production. It seemed probable that the German war machine would be able to run at full strength for fifteen or eighteen months at least, even if the blockade drastically cut down essential German imports.
When war came, this drastic cut could not be imposed. The Ribbentrop-Molotov pact had guaranteed German access to the economic resources of all Europe east of the Rhine. By intimidation or cajolery, the Germans were able to assure the flow of supplies from their neutral neighbours, including the Scandinavian countries. As intimidater and cajoler the British Government was less successful; for it was chary of provoking unfriendly neutrals or offending friendly ones. Shortage of foreign exchange circumscribed its plans to forestall the Germans in purchases from neutral countries. Its desire to observe existing rules of international law, except in so far as German action justified reprisals, hampered its attempts to ration forcibly the imports of neutrals, or to block enemy exports. Moreover, the international law concerning blockade was subject to rival interpretations: the United States were by tradition the opponents of the British doctrine of blockade and the champions of neutral rights. Difficulties arising from this cleavage of opinion were not completely eradicated until the Lend-Lease Act was passed in March 1941. With all these hindrances to contend against, Allied economic warfare during the first six months of the war could not make much of a dent in the enemy’s strength. Paradoxically, the British Government seemed now to be forgetting its earlier and more sober estimates of possible achievement. At the meeting of the Supreme War Council at the end of March, the British Prime Minister acclaimed economic warfare as ‘the main weapon’.
By this time, however, the British and French Governments were ready to think out ways and means of sharpening their ‘main weapon’ and using it more resolutely. They felt that they must take a firmer line with some of the neutrals that were supplying Germany. Their military advisers were becoming increasingly uneasy about the undiluted passivity of Allied strategy. Spring was approaching, but the gap between Allied and German resources seemed just as great as it had been in the previous autumn. An offensive on the western front could not be attempted in 1940 and might well be impossible before 1942. Even then, the disparity between Allied and German divisions made any hope of success depend partly on the development of new tactical methods and weapons, partly on the participation of Belgium. Yet meanwhile Belgium could not even be persuaded into staff conversations with the Allies to provide for her defence if she should be invaded. All this was disheartening, and the Chiefs of Staff felt constrained in March 1940 to utter a warning. ‘Time is on our side’, they said, ‘only if we take the fullest possible advantage of it.’ The moral and political disadvantages of passivity, as well as the military ones, were becoming only too obvious. Between September and March the British War Cabinet had more than once given attention to reports which suggested that public opinion in France was ‘highly restive’. The trend of public opinion in neutral countries was a cause of considerable anxiety to both Governments. 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.
Within the agreed framework of defensive strategy a more spirited policy was needed, and in March 1940 the Supreme War Council tried to provide it. A desire to force the pace, yet without any frittering away of resources, bore fruit in plans for certain perimeter operations which would strengthen the blockade, cut off some valuable imports from the Germans, compel them to consume their stocks, and at the same time bolster up domestic and neutral morale. Nothing need be said of these schemes, for while they were being constructed the days of grace were swiftly passing. It was not the new plans that were called into operation but the older defensive plan for resisting German attacks in Norway and in the Low Countries.
As early as the first week of May the Chiefs of Staff felt themselves compelled to assess Great Britain’s chances in a war that she might be compelled to continue alone. In a study of ‘British Strategy in a Certain Eventuality’ they ruled out submission but saw no chance of final victory unless full economic support were forthcoming from the United States. Looking to the immediate future they saw no prospect save a desperate defence. At home, the most urgent of many needs was for fighter aircraft and crews for the approaching battle against the German air fleets and possibly the invading German Army. Abroad, the western basin of the Mediterranean would be dominated by the enemy; but Suez and the approaches to the Middle East must be held. At the other end of the world Singapore must be strengthened lest the Japanese attack. And after these defensive battles had been fought and won—what then? The Chiefs of Staff believed in the possibility of victory; but they did not as yet look so far as the final victorious assault of a new British Army against the European Continent. They envisaged prospects that then seemed nearer—revolt in conquered Europe, and, most of all, the effects of economic pressure. The Chiefs of Staff based their conclusions about economic pressure upon prophecies from the Ministry of Economic Warfare that in 1941 Germany would suffer acute shortages of food, fuel and industrial supplies. They said they could not emphasise too strongly the importance of the substantial accuracy of this forecast, since upon the economic factor depended the only hope of bringing about the downfall of Germany.
In fact, Germany’s economy was immeasurably strengthened by her conquests and the Ministry of Economic Warfare’s forecasts were sheer illusion. But at a time when the British Government and people were in stern reaction against their earlier complacent mood, one or two illusions may possibly have done less harm than an overdose of the harsh truth would have done.
Endnotes
* ↑ Some forty draft Bills were prepared during the next two years.
* ↑ For illustration, see the account in Section (ii) of Chapter IV of the institution of exchange control. The delay in imposing it cost perhaps some £200 millions; some of the horses had got out before the stable door was shut.
* ↑ 2 & 3 Geo. 6, c. 62.
* ↑ 3 & 4 Geo. 6, c. 20. H. of C. Deb., Vol. 361, Cols. 154-185: 22nd May 1940.
* ↑ Control over industry was in fact exercised throughout the war by regulations under the 1939 Defence Act.
* ↑ 3 & 4 Geo. 6, c. 45. H. of C. Deb., Vol. 363, Cols. 65-146, 702-758. H. of L. Deb., Vol. 117, Cols. 3-40, 57-72: July 1940.
* ↑ Two years of war passed before a motion was moved in the House of Commons to annul a Regulation for the control of industry. H. of C. Deb. Vol. 373, Cols. 2050-64 (6th August 1941).
* ↑ For a discussion of safeguards, see Concerning English Administrative Law by Sir C. T. Carr. (O.U.P. 1941).
* ↑ The most famous legal cases were those which arose under Reg. 18B by which the Home Secretary could intern anyone whom he had ‘reasonable cause to believe’ came within one of the specified categories of suspects. In Liversidge v. Anderson, [1942] A.C.206, and Greeve v. Secretary of State for Home Affairs, [1942] A.C.284, the House of Lords decided that the courts could not inquire into the reasonableness of the belief which led to the making of a detention order; the matter was one for executive decision.
* ↑ H. of C. Deb., Vol. 352, Cols. 1829-1902 (31st October 1939); Vol. 363, Cols. 1307-48.
* ↑ Defence Regulations had to be laid before Parliament and either House could resolve in favour of a prayer for their amendment. The only ways of criticising rules and orders were a formal motion of censure of a debate on the adjournment.
* ↑ H. of C., Deb., Vol. 389, Cols. 1646-69; Vol. 386, Cols. 157-161; Vol. 400, Cols. 202-99.
* ↑ On this theme there will be room for an important book when the British war histories are completed and the German evidence more deeply studied.
* ↑ The Minster was the Chancellor of the Duchy of Lancaster.
* ↑ See Part I, Chapter II, p. 58. Throughout this book the Ministry of Labour and National Service, as it became on 8th September 1939, is called, for brevity, the Ministry of Labour.
* ↑ H. of C. Deb., Vol. 351, Cols. 212-215.
* ↑ The Ministry of Economic Warfare was set up by S.R. & O. (1939) No. 1188, the Ministry of Food by S.R & O. (1939) No. 1119, the Ministry of Home Security by S.R & O. (1939) No. 1142, the Ministry of Information by S.R. & O. (1939) No. 1189, the Ministry of National Service by S.R. & O. (1939) No. 1118 and the Ministry of Shipping by S.R. & O. (1939) No. 1425. The Minister of Shipping was appointed in October, the other Ministers in September.
* ↑ Set up under S.R. & O. (1940) No. 747, 17th May 1940.
* ↑ See Part I, Chapter II, p. 46.
* ↑ Respectively, Mr. Chamberlain, Sir John Simon, Lord Chatfield, Sir Samuel Hoare, Lord Halifax, Mr. Churchill, Mr. Hore Belisha, Sir Kingsley Wood, Lord Hankey.
* ↑ This office was always combined with that of Home Secretary.
* ↑ After the outbreak of war, a Deputy Chiefs of Staff Sub-Committee was also established.
* ↑ Consisting of the Minister for Co-ordination of Defence (Chairman) and the three Service Ministers. The Chiefs of Staff were advisers.
* ↑ In the Committee’s twenty meetings between 8th April and 6th May, there was no discussion of supply.
* ↑ H. of C. Deb., Vol. 359, Cols 699-700.
* ↑ At the same time the other two committees were renamed respectively the Civil Defence Committee and the Home Policy Committee.
* ↑ One of these, the Food Policy Committee, soon achieved independent status as a committee of the War Cabinet.
* ↑ See p. 47 above.
* ↑ See above, p. 67.
* ↑ The Germans were thought to have over 2,000 bombers in September 1939 against an Allied total of 950. In fact, Germany then had a total of 1,442 bombers of which 1,343 were immediately available (Air Ministry figures).
* ↑ The Times, 11th September 1939.
* ↑ The pocket battleship Graf Spee was destroyed by British cruisers in December 1939.
* ↑ The Times, 11th September 1939.
* ↑ See Chapter II, p. 72.
* ↑ The programme was 1,100,000 gross tons a year—scarcely any larger than what commercial enterprise, with a little help from subsidies had achieved in 1938.
* ↑ The authority is Dr. R. Kuczynski (Deutschlands Versorgung mit Nahrungs- und Futtermitteln, 1927) of whose work Lord (then Sir William) Beveridge made use in the pamphlet Blockade and the Civil Population, 1939.
* ↑ In fact, German stocks were low on the outbreak of war (see U.S. Strategic Bombing Survey, op. cit. Chapter vi).
* ↑ An account of the trade agreements negotiated with neutrals will be given in Professor W. M. Medlicott’s volume on Economic Blockade in this series.