2. Hobsbawm, E. J., Industry and Empire (New York, 1968), p. 191Google Scholar.

3. Cf., Ashworth, William, An Economic History of England: 1870–1939 (London, 1960)Google Scholar; Clay, Henry, The Post-War Unemployment Problem (London, 1929)Google Scholar; Hirst, Francis W., The Consequences of the War to Great Britain (London, 1934)Google Scholar; Hobsbawm, Industry and Empire; Hurwitz, S. J., State Intervention in Great Britain: A Study of Economic Control and Social Response 1914–1919 (New York, 1949)Google Scholar; Marwick, Arthur, Britain in the Century of Total War: War, Peace, and Social Change, 1900–1967 (London, 1968)Google Scholar; Mowat, Charles Loch, Britain Between the Wars, 1918–1940 (Chicago, 1955)Google Scholar; Pigou, A. C., Aspects of British Economic History 1918–1925 (London, 1947)Google Scholar; Pollard, Sidney, The Development of the British Economy 1914–1950 (London, 1962)Google Scholar; Tawney, R. H., “The Abolition of Economic Controls, 1918–1921,” Economic History Review, first series, XIII (1943)Google Scholar.

4. Tawney, , “Abolition of Economic Controls,” Econ. Hist. Rev., first series, XIII, 7, 13, 14Google Scholar.

5. Ibid., p. 13.

6. In particular, cf., Hobsbawm, , Industry and Empire, pp. 203–04Google Scholar.

7. Morgan, E. Victor, Studies in British Financial Policy, 1914–1925 (London, 1952), pp. 374–75Google Scholar; Pigou, , Aspects of British Economic History pp. 107–08, 115–26Google Scholar; Clay, Henry, Lord Norman (London, 1957), pp. 116–25Google Scholar. Clay notes, without commenting, that Norman believed monetary controls were appropriate and adequate to contain inflation and carry through the transition effectively.

8. Lloyd, E. M. H., Experiments in State Control (Oxford, 1924), p. 23Google Scholar.

9. Morgan, , Studies in British Financial Policy, p. 95Google Scholar.

10. PRO, Cabinet Memorandum, February 20, 1918, GT series 3681, Cab 24/42.

11. Interim Report of the Committee on Currency and Foreign Exchanges after the War, 1918 (Cmd. 9182), 853. (Hereafter cited as Cunliffe Committee Report.)

12. The Cunliffe Committee wrote the manifesto of the conservative banking community, the ultimate aim of which was the return to the gold standard at prewar parity, as the Balfour of Burleigh Committee on Commercial and Industrial Policy after the War wrote the manifesto of the industrial-commercial establishment. Paramount in the minds of the Balfour Committee's members was the eventual adoption of general protectionist tariffs. Cf., PRO, Cabinet Memorandum, January 1918, GT 2891, Cab 24/34.

13. Cunliffe Committee Report, The “paper money” was Government Notes for £l and 10s issued as legal tender and distinguishable from the Bank of England Notes in that the latter had at least some gold backing. The Currency and Bank-notes Act of August 6, 1914, charged the Bank to increase its Fiduciary Issue, that is paper money not supported by its equivalent in gold held by the Bank. “Paper money,” however, usually refers to the Government Notes. Notes, issued by the Bank and country banks, outstanding in 1913 amounted to £44m. By 1919 there were £104m. in such notes. To this must be added the £335m. in Government (Currency) Notes which had no gold backing. Gold bullion held by the Bank rose from £36m. in 1913 to £85m. in 1919. Thus approximately £314m. in notes outstanding in 1919 was unsupported by gold. The Floating Debt was short-term and accumulated as the Government needed cash quickly in order to pay immediate obligations. It is standard for all governments to buy short-term credit in anticipation of revenue. However, in 1919 the British Government was straddled with a backlog of four years of borrowing far more on short-term than it could redeem with revenue. By the time of the Armistice, the Floating Debt exceeded £1,400m. Cf., Harrod, R. F., The Life of John Maynard Keynes (London, 1951), pp. 196–99Google Scholar; Morgan, , Studies in British Financial Policy, pp. 115, 147Google Scholar; Clay, , Lord Norman, pp. 79–83Google Scholar; Mitchell, B. R., Abstract of British Historical Statistics (Cambridge, 1962), pp. 451, 445Google Scholar.

14. Dollar securities held in Great Britain were used as collateral for loans and directly to support the New York price of the pound. They were not sold to finance directly the war. Loans raised in the United States thus made possible the conservation of all but £288 million (or about 47 per cent) of U. S. Dollar securities. Morgan, , Studies in British Financial Policy, pp. 325–30Google Scholar.

15. Clay, , Lord Norman, pp. 118–19Google Scholar. The forced loan was Norman's idea.

16. Cunliffe Committee Report, passim.

17. Thus, for example, Ashworth wrote: “The government in 1918 accepted the recommendations of the Cunliffe Committee on Currency and Foreign Exchanges after the war …. The full implementation of the decision was clearly not possible at once.” Ashworth, , Economic History of England, p. 385Google Scholar. There is no evidence to suggest that the report was even accepted in principle and postponed until the war's official end — January 1920.

18. 112 House of Commons Debates, fifth series, 567 (February 17, 1919).

19. Ibid., 1150 (February 20, 1919); 113 H.C. Deb., fifth series, 611 (March 6, 1919); 114 and 115 H.C. Deb., fifth series, passim (March 24-May 16, 1919).

20. Cf., Johnson, Paul Barton, Land Fit for Heroes; the Planning of British Reconstruction, 1916–1919 (Chicago, 1968), pp. 197–98Google Scholar; 115 H.C. Deb., fifth series, 175-211 (April 30, 1919); 116 H.C. Deb., fifth series, 231–36 (May 20, 1919).

21. PRO, Cabinet Memorandum, February 10, 1918, GT 3643, Cab 24/42.

22. PRO, Cabinet Memorandum, February-March, 1919, G series 237, Cab 24/75.

23. PRO, Cabinet Memorandum, February 25, 1919, GT 6887, Cab 24/75. Bonar Law made the same point during the discussion.

24. Ibid.

25. Cf., 116 H.C. Deb., fifth series, 231-39; 242-56 (May 20, 1919); Hirst, Francis W. and Allen, J. E., British War Budgets (London, 1926), pp. 272–95Google Scholar. The “Coupon Election” Parliament's hard-faced men who had done well out of the war have been, perhaps, overly damned. Cf., Taylor, A. J. P., English History 1914–1945 (Oxford, 1965), pp. 128–29Google Scholar.

26. During the war the insularity was a function of Lloyd George's reorganization of the cabinet. In the name of efficiency and for the sake of security, even cabinet ministers not in the five-man war cabinet were kept from information and discussions leading to major decisions. Cf., Taylor, , English History, pp. 74–78Google Scholar on the nature of the reorganization. The postwar aloofness was partially the residue of wartime attitudes toward a compliant Commons, and it lingered on into the first two years of peace because the coalition and its enormous majority functioned as a reasonably harmonious family.

27. PRO, Cabinet Memorandum, February 23, 1919, GT 6886, Cab 24/75. Striking is the absence of bankers or men from the great financial houses in the City and the preponderance of men of trade and industry (including Sir Albert Stanley, Lord Inverforth, Sir Eric Geddes, A. H. Illingworth, Lord Devonport, Sir Alfred Mond and R. E. Prothero). Like the Prime Minister, many came from the Celtic fringe and most were not social equals of the City's Mandarins. As wartime government servants, the businessmen were more effective than the bankers, perhaps because the former were less respectful of tradition's vested interests. On the other hand, it could be that businessmen only looked more efficient: the Government and the country were impressed with production, not finance. In this respect, the First World War was a watershed in the history of British wartime politics; it was the first businessman's war, earlier ones being financiers' wars.

28. Cf., LordGeddes, , The Forging of a Family (London, 1952)Google Scholar.

29. PRO, Cabinet Memorandum, February-March, 1919, G 237, Cab 24/75.

30. PRO, Cabinet Memorandum, February 25, 1919, GT 6887, Cab 24/75.

31. Ibid.

32. PRO, Cabinet Memorandum, February 10, 1918, GT 3643, Cab 24/42.

33. PRO, Cabinet Memorandum, February 25, 1919, GT 6887, Cab 24/75.

34. Asquith's reconstruction committee, which met when there were less than two million in the armed forces, expected considerable unemployment after the war, but felt that it was a problem for the Local Government Board and the Prince of Wales Fund to handle. Cf., Beaverbrook Library, Report of the Reconstruction Committee (1916), Bonar Law Papers, 64/F/19. A month before the Armistice, when faced with the prospect of demobilizing five million men, the cabinet discussed the anticipated unemployment dilemma and came to the conclusion that it would be a function primarily of dislocations. That is, it would persist until demobilization and reconversion were succeeded by a peacetime economy. However, even Austen Chamberlain was worried about short-term joblessness. He argued against terminating war materials work until non-war production could start absorbing labor. PRO, War Cabinet Minutes 491-1, October 24, 1918, Cab 23/5.

35. On March 17, 1919, Tom Jones wrote to the Prime Minister that the miners were planning to strike on the twentieth if the cabinet did not accept a recommendation for nationalization of the coal mines. Beaverbrook Library, Tom Jones to Lloyd George, Mar. 17, 1919, Lloyd George Papers, F/23/4/36. Lloyd George's response (from Paris) reveals something of his interpretation of the labor situation: “Once the strike begins it is imperative that the state should win. Failure to do so would inevitably lead to a soviet republic so that we ought to have our plans thoroughly well thought out.” Beaverbrook Library, Lloyd George to Tom Jones, March 18, 1919, Lloyd George Papers, F/30/3/31. The Glasgow and Belfast strikes in January had alerted him to the need for swift, decisive action, either by a show of force or grand concession. Recently Arno Mayer has made a good case for believing that the Government feared the “bolshevik” revolts and attached considerable importance to them as possibly only the small tips of the iceberg of discontent poking above the surface. Mayer, Arno, Politics and Diplomacy of Peacemaking, 1918–19 (New York, 1967), pp. 158–64, 606–11Google Scholar.

36. Lord Riddell recorded in his diary on April 11, 1919, the following conversation: “[Bonar] Law: We have some awkward hurdles to cross. L. G [Lloyd George]: What are they? Law: The miners are raising troublesome points on the Sankey report. The owners will probably decline to agree to what is asked. That may force us into nationalization before we are ready. L. G.: Well, if it does, that will not be very serious. It has to come. The State will have to shoulder the burden sooner or later.” LordRiddell, , Lord Riddell's Intimate Diary of the Peace Conference and After, 1918–1923 (London, 1933), p. 49Google Scholar; cf., Conservative Research Dept. Robert Sanders Diary, I, entries for April 1919.

37. PRO, War Cabinet Minutes 491-2, 499-8, October 24 and November 15, 1918, Cab 23/5; PRO, Cabinet Memorandum, November, 1918, GT 6056, Cab 24/67.

38. PRO, Cabinet Memorandum, November, 1918, GT 6056, Cab 24/67. The most vigorous opponents of the restoration of labor's prewar rights and privileges were Andrew Weir (who became Lord Inverforth in 1919) and Winston Churchill. Both based their cases for retention on grounds of making British industry more efficient and competitive.

39. Dearle, N. B., An Economic Chronicle of the Great War for Great Britain and Ireland (London, 1929), p. 254Google Scholar.

40. PRO, Cabinet Memorandum, February 25, 1919, GT 6887, Cab 24/75; Clay, , Lord Norman, pp. 116–19Google Scholar.

41. Cf., R. G. Hawtrey, Trade Depression and the Way Out, Pt. III, ch. 1, sec. II, cited in Pigou, , Aspects of British Economic History, pp. 188–90Google Scholar; Clay, , Postwar Unemployment Problem, pp. 20–21Google Scholar; Clay, , Lord Norman, p. 132Google Scholar; Morgan, , Studies in British Financial Policy, p. 376Google Scholar.

42. Clay, , Lord Norman, p. 116Google Scholar.

43. Harrod, , John Maynard Keynes, p. 220Google Scholar.

44. Morgan, , Studies in British Financial Policy, pp. 73–74, 273, 281, 284Google Scholar.

45. Johnson, , Land Fit for Heroes, p. 401Google Scholar.

46. Essentially, the short-term debt was becoming unmanageable because of the relative unattractiveness of government bonds to potential investors and, thus, the difficulty of the state in persuading holders to renew rather than redeem. Cf., PRO, Finance Committee [of the cabinet], September 25, 1919, Memorandum 5, Cab 27/72. Of course, in paying higher interest on Treasury Bills, as the state did after November 1919, it was acting in a mildly deflationary direction. Concurrent with the one per cent increase in the Treasury Bill interest rate was an equivalent rise in the Bank of England's discount rate. Cf., Pigou, , Aspects of British Economic History, pp. 188–90Google Scholar for a persuasive evaluation of the impact of these monetary policy measures.

47. Pigou, , Aspects of British Economic History, pp. 188–90Google Scholar. Even the friendliest of the coalition's critics, such as Pigou, accept the notion that the coalition's deflationary tactics were ill-timed and probably accelerated the rate of economic decompression — right into the depression of 1921-22.

48. Evidence of this is the speed and manner with which the Government relinquished control of the money market during the autumn of 1919, and followed this up a year later by conceding to the principle of the orthodox money men on fiscal policy — the state, according to the principle, budgeted annual surpluses (above what was allocated for statutory sinking funds) for use in debt redemption. Cf., Clay, , Lord Norman, pp. 117–27Google Scholar. The all-important status which debt redemption came to have after 1920 cannot be explained, as it usually is, by the cabinet's prejudice for “sound money” over social policy. The war record of the Lloyd George coalition refutes that claim. Rather, the preeminence of debt redemption was one of the consequences of the cabinet's loss of faith in its ability to navigate through the economic storm which it saw brewing, following upon its unhappy experience with the inflationary boom of 1919.

49. The anti-waste campaign was largely engineered by the Harmsworth press. It drew its first blood in a December 1920 by-election at Dover; the anti-waste, ultra-Conservative candidate, sponsored by the Harmsworth press, defeated the coalition's candidate. In two subsequent contests, one in March, the other in June 1921, the coalition's choice was defeated by the anti-waste candidate. After the June debacle, Lloyd George wrote to Austen Chamberlain: “this election represents the real sentiment which may very well overwhelm us if we do not deal with it in time.” Beaverbrook Library, Lloyd George to Austen Chamberlain, June 9, 1921, Lloyd George Papers, F/7/4/6.

50. Johnson, , Land Fit for Heroes, p. 490Google Scholar.