The Central Machine

The British economy, as the war developed, became morę and more effectively mobilised. Government through the Service and supply departments—the Admiralty, the War Office and the Ministry of Supply, the Air Ministry and the Ministry of Aircraft Produc- tion—produced directly in Royal Dockyards and Royal Ordnance Factories or bought on contract from outside firms, an increasing proportion of the national output.2 Government through the Raw Materials Department of the Ministry of Supply and through the controls, acąuired and distributed most materials, and certainly all those of strategie importance. Government, through the Board of Trade, determined which firms not engaged in the production of warlike stores should remain in business and specified in certain cases what they should make; and Government using the machinery of the Ministry of Labour and National Service, could direct, if need 'Cmd. 6294, para. 11. 2Below, Table 12, p. 130. be, labour not only to trades wanting workers but to particular firms and plants. Materials, labour and other resources were divided between users in the amounts which conformed with the policies and strategies dictated by the times. Supplies were directly allocated to the different purposes and the portion set aside for the civilian market was distributed between firms remaining in business by quota, against the surrender of ration coupons collected from con-sumers and on the issue of a licence to acąuire the ąuantities of materials authorised by the controlling agency. At the top of the administrative machinę, directing and continually reviewing its parts, stood the War Cabinet and their principal Com-mittees. There were at first, five of these—a Production Council, an Economic Policy Committee, a Food Policy Committee, a Home Policy Committee and the Lord Presidenfs Committee.1 Among the five, the Lord Presidenfs Committee emerged as "a steering or planning committee, . . ." The Lord President and his Com­mittee dealt with large issues of economic policy. They acted "in certain aspects", as the Prime Minister described it "almost as a parallel Cabinet concerned with home affairs".2 To them were referred the urgent and awkward problems of a civilian economy at war. Among others they were asked to consider investment in railways and the means of securing the maximum economy of trans­port; the distribution of coal and whether this could best be secured by a ration; clothes rationing and the application of the points system to the rationing of food; prices, including the relationship between agricultural prices and farmers' profits; house repairs and the difficult problem of civilian standards in total war. The Lord Presidenfs Committee did not wield an executive power; but advice and counsel were continually sought by Ministers and departments and when, in 1943, resources of manpower finally fell so far short of requirements that all demands had to be subjected to careful scrutiny, it was the Lord President and his Committee on whom fell the responsibility of drawing up the manpower budgets and who so successfully arranged for the broad division of the little that was available between the Services and between military and civilian supply. The statistics which were collected in Great Britain before the 1 361 H.C. 769-70; Chester (ed.): Lessons of the British War Economy, Chapter II, "The Central Machinery for Economic Policy"; Hancock and Gowing: British War Economy, passim. 2 Chester (ed.): Lessons of the British War Economy, pp. 9-13; 368 H.C. 264, 379 H.C. 38; Hancock and Gowing: British War Economy, pp. 219-21. war, though considerable in volume, had not been intended for such large purposes as the assessment of national resources and the formulation of national needs. The data themselves were deficient —there was nothing, for example, on supplies and stocks of raw materials, the oversight of which in peacetime did not come within the administrative responsibility of any department.1 Official series were published piecemeal, by the departments which collected them. Discrepancies could and did arise between one depart-mental series and another from differences in the dates on which the periods closed, in the areas covered and so on. There was no central bureau to collate and systematise the individual returns; nobody whose duty it was to use and prepare for use such information as there was about the economic resources of the country. The value of the mass of figures which departments were collecting was greatly diminished by the lack of a statistical office, competent, if it did no more, to point out the dangers to be guarded against when depart-mental returns were being combined for generał economic enquiries not narrowly directed to the administrative purposes of the branch in which the figures had originated. The value of statistical tabulations and economic intelligence began to be widely appreciated during the war by Ministers and by the civil servants both permanent and temporary whose business it now was to adjust production programmes to meet and, if possible, to anticipate, the fluctuating scarcities of supply, to watch the pro-gress of a wide variety of stores, to ensure that components were balanced with rates of assembly and to take deliveries against state-ments of reąuirements as the discharge of their responsibilities. Statis­tical branches and sections were established and expanded through-out the Government service. Economists and statisticians (and any-body who could lay claim to that title either by initial qualification or by the naturę of his work) became as highly prized as accountants in private business and for much the same reasons. Both kept the record. Both measured performance in the unit in terms of which the account was made up—money in business and the actual stores in the more specific accounting of an organisation producing for service reąuirements; and both, bidden or not, could be relied upon to exercise themselves upon the many questions which figures and tables are bound to raise in an enquiring mind. Sir Winston Churchill's memoirs and the civil histories of the war contain examples recording the assistance which a skilful use of 1 The Board of Trade were empowered by the Essential Commodities Reserve Act, 1938, to cali for returns of stocks of certain raw materials. statistics (and of statisticians) was able to give those responsible for the direction of affairs. There is ample evidence, too, that the mobilisation of (economic) resources was hampered by the lack of adequate statistical information. It is noted by one authority that in 1940, when it first became necessary to set limits to imports of food, raw materials and other categories, the adeąuacy or inadequacy of the several allocations in relation to the needs could be based on no really firm statistical foundation. At a later period, when the Board of Trade were concerned to ensure an equitable distribution of the steadily diminishing supplies of con-sumer goods which had taken place as a result of the war, a difficult task was made all the harder by the fact that nothing was known about the shifts of population which had occurred sińce the war. Up-to-date statistics . . . seemed surprisingly hard to come by. Later the most accurate figures of the buying population of towns were obtained from the number of sugar registrations; but in the meantime the only figures available were rather unsatisfactory ones from The Registrar-Generafs Department.1 With the imposition of each new control, there went both the opportunity to require users to furnish returns and the need also to assemble these data, if the controls were to be properly administered. Controllers clearly could not ensure that scarce resources were being put to the purposes for which the allocations were made without information on stocks, supplies and consumption; and users could fairly be asked to complete the returns as part of their application. Statistics began to pour into branches and sections. All departments now had access to a mass of statistics and other information about industry. In each there had been established some branch or some officer who had made a study of the industries with which the depart-ment was principally concerned—or at least knew where to turn and whether the information was available from a trade association or other outside source. Across the Atlantic in Washington, the Admin-istration were demanding ample and detailed statistical verification showing the urgency of British requirements. It began to appear 1E. A. G. Robinson: "The OveraIl Allocation of Resources", in Lessons of the British War Economy (ed. Chester), p. 40; Hargreaves and Gowing: Civil Industry and Trade, p. 292; Winston Churchill: The Second World War, Vol. III, p. 103; Hancock and Gowing: British War Economy, pp. 94, 221; Harrod: The Life of John Maynard Keynes, pp. 491, 502, 529; Bridges: Treasury Control, Stamp Memoriał Lecture, 1950. indeed as if payment for American supplies, no longer having to be made in dollars, was being exacted in statistics instead! The task of surveying economic potentialities and economic preparations had been entrusted shortly before the outbreak of war to a group of eminent economists, specially charged with this task. They were Lord Stamp, Sir Henry Clay and Sir Hubert Henderson. A Central Economic Service was modestly estab-lished in November 1939 by "the engagement of one or two addi-tional economic experts to assist Lord Stamp". The organisation flourished. It rapidly established its worth to the central direction of the war, and was divided a year later into a Central Statistical Office and an Economic Section. The Central Statistical Office were given the specific duty of collecting figures from Government depart­ments "on a coherent and well ordered basis covering the develop-ment of the war effort, figures which" by direction of the Prime Minister, "were to form an agreed corpus, not subject to depart-mental argument but accepted and used without ąuestion".1 The Economic Section in tura supplied economic intelligence, prepared surveys and, as a very important duty, acted as an advisory staff to the Lord President and his Committee. The economists who entered the Government service after the out­break of war took with them among their other intellectual furniture, the ideas about income and expenditure which they had so recently been discussing. These ideas were quickly assimilated by the civil servants and statesmen with whom the economists worked. Among them, the fruitful concept was soon seized upon of national income as the flow of goods and services out of which all claims had to be met for the waging of war, for the support of the civilian population and for export, the means, at the time, of procuring supplies from overseas. There had been, before the war, no official nor regular attempts to ascertain the value of the national income. Such estim-ates as there were emerged from the work of those resolute men who, unassisted and so little encouraged, embarked upon their own com-putations. The best known British names are the late Lord Stamp, Sir Arthur Bowley and Mr. Colin Clark. 1 Hancock and Gowing: British War Economy, p. 222.