Miller, Christopher William (2015) Planning and Profits: the Political Economy of Private Naval Armaments Manufacture and Supply Organisation in Britain, 1918-41
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Miller, Christopher William (2015) Planning and profits: the political economy of private naval armaments manufacture and supply organisation in Britain, 1918-41. PhD thesis. https://theses.gla.ac.uk/6976/ Copyright and moral rights for this work are retained by the author A copy can be downloaded for personal non-commercial research or study, without prior permission or charge This work cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Enlighten: Theses https://theses.gla.ac.uk/ [email protected] Planning and Profits: The Political Economy of Private Naval Armaments Manufacture and Supply Organisation in Britain, 1918-41 Christopher William Miller M.A.(Hons.), M.Sc.(Oxon.) Submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy School of Humanities College of Arts University of Glasgow September 2014 1 Abstract This thesis examines the relationship between the private naval armaments industry, businessmen and the British Government’s supply planning framework between 1918 and 1941. More specifically, it reassesses the concept of the Military-Industrial Complex by examining the impact of disarmament upon private industry, the role of leading industrialists within supply and procurement policy, and the successes and failings of the Government’s supply organisation. This work blends together political, naval and business history in new ways, and, by situating the business activities of industrialists alongside their work as government advisors, it sheds new light on the operation of the British state. This thesis argues that there was a small coterie of influential businessmen, led by Lord Weir, who, in a time of great need for Britain, first gained access to secret information on industrial mobilisation as advisers to the Supply Board and Principal Supply Officers Committee (PSOC), and later were able to directly influence policy. This made Lord Weir and Sir James Lithgow among the most influential industrial figures in Britain. This was a relationship which cut both ways: Weir and others provided the state with honest, thoughtful advice and policies, but, as ‘insiders’ utilised their access to information to build a business empire at a fraction of the normal costs. Outsiders, by way of contrast, lacked influence and were forced together into a defensive ‘ring’ – or cartel – and effectively fixed prices for British warships in the lean 1920s. However, by the 1930s, the cartel grew into one of the most sophisticated profiteering groups of its day, before being shut down by the Admiralty in 1941. More generally, this work argues that the Japanese invasion of Manchuria was a turning point for supply organisation, and that between 1931 and 1935, the PSOC and its component bodies were governed by necessity. Powerful constraints on finance and political manoeuvre explain the nature of industrial involvement. Thus, it is argued that the PSOC did a broadly effective job at organising industry with the tools it was given, and the failings were down to the top levels of policymaking – the Cabinet – not acting upon advice to ease procurement bottlenecks early enough, to the extent that British warship construction was more expensive and slower than it could have been. In sum, this group of industrialists, the Admiralty and a few key figures in the PSOC such as Sir Harold Brown, effectively saved MacDonald, Baldwin and Chamberlain’s National Government from itself. 2 Contents Acknowledgements 5 List of Tables & Figures 7 List of Abbreviations 8 A Note on Definitions 10 Part One: Literature, Sources and Organisational Framework Introduction (Chapter One): Guilty Men, Complexes, and Legends 11 Chapter Two: Structure of Government and Industry, from the Ministry of Munitions to the Principal Supply Officers’ Committee, 1918-27 34 Part Two: Industry and the Navy Before Manchuria, and the Establishment of the Warshipbuilders Committee 1919-1931 Chapter Three: From Boom to Bust – The Private Naval arms industry and the Admiralty, 1919-26 56 Chapter Four: From Competition to Collaboration: The Warshipbuilders’ Committee and the National Shipbuilders Security Scheme, 1926-31 81 Part Three: The formation of a National Government, the Far East, and the PSOC approach to industry 1931-34 Chapter Five: From ‘Outsiders’ to ‘Insiders’, Industry and the Rehabilitation of the Supply Planning Framework 121 Chapter Six: The Advisory Panel, Information Sharing and Inside Information, 1933-4 151 Part Four: The Ultimate Potential Enemy & Rearmament Planning 1934-6 Chapter Seven: Towards Rearmament, 1934-5 176 Chapter Eight: The White Papers, 1935-6 199 3 Part Five: The Inskip Era & War 1936-41 Chapter Nine: The Minister for Coordination of Defence & Early Rearmament, 1936-7 238 Chapter Ten: Later Rearmament and War Supply Organisation, 1937-41 264 Conclusion & Retrospective 288 Appendix 296 Bibliography 297 4 Acknowledgements This thesis has been a long, occasionally frustrating and painstaking, sometimes liberating and invigorating, but often rewarding experience. It would, I have no doubt, not be anything like the same work without the contributions, guidance and efforts of a small number of people who have oversaw and assisted this project since its inception four or five years ago. First and most profound thanks go to my supervisors, Dr Phillips O’Brien and Professor Ray Stokes. Both have had their own books, directorships of research centres, and other PhD students during my time at Glasgow University, and yet I have never at any point felt that I was not a first priority to them (or, at least, they hid it well). They have consistently offered sound advice, thoughtful comments and much-needed encouragement to me during my research and writing period, and I feel very fortunate indeed to have fallen into such distinguished company, such a productive working relationship and such a supportive subject area at this university. I hope this thesis, at least in part, repays the patience and faith shown by them toward me. Thanks are also due to Professor Simon Ball (now at Leeds University), and Dr Nicholas Rodger, who oversaw the earliest phases of this work at Oxford University and Glasgow. Simon and Nick have always, even after they or I had moved to pastures new, taken time from their schedules to answer my questions and provide me with advice. Professor Tony Slaven provided me with access to his notes, which have proved extremely valuable, while Robert Laurie helped with the proofreading of the final draft. Dr Stephen Sambrook, of the Centre for Business History in Scotland, has become a close friend and sounding board throughout this work – and I owe him a deep debt of gratitude for the many hours I spent in his office, pitching ideas, looking at his own research or (most frequently) going off on unnecessary tangents. The assistance, professionalism and encouraging comments of my examiners, Professor Peter Jackson and Professor George Peden, have been gratefully received, and have, I am sure, helped to substantially improve the quality of the thesis which follows. This research could not have been undertaken had it not been for a full studentship from the AHRC, for which I am deeply appreciative. In addition, the Economic History Society, the Lind Foundation, the Snell Exhibition, the University of Glasgow’s College of Arts and Centre for Business History, and Yale University have supported this work materially and financially. 5 In the latter-most case, Yale supported me for a fellowship to the department of International Security Studies, where I was fortunate enough to cross paths with, among others, Professor Paul Kennedy and Dr Anand Toprani, who have both assisted this project in their own ways. I have been assisted from the outset by a group of very helpful archivists and librarians. Those at the Scottish Business Archive (at the University of Glasgow), the Mitchell Library, the National Archives in Kew, at Churchill College Cambridge and the University of Cambridge Library, and at the Caird Library of the National Maritime Museum made often arduous tasks much easier to bear. Finally, a debt of gratitude is owed to my family, particularly my partner Enni. She has seen through this thesis from the beginning until its conclusion, and spent the final (hectic) weeks proofreading, and fixing my typographical errors. More fundamentally, she has been a constant source of inspiration and encouragement throughout these past four years. Without her, the task would have been immeasurably harder. All errors in this work are entirely my own responsibility. 6 List of Tables & Figures Table 2.1: CID: Condition of the Shipbuilding and Armaments Industry, 1933 40 Table 2.2: The Position of Private Armaments in Imperial Defence, 1933 41 Figure 2.1: 'Organisation for the Coordination of Peacetime Supply’ 50 Table 3.1: Naval expenditure, 1920-31 61 Table 4.1: Shipbuilder Codenames as of 1932 100 Table 4.2: Example of price agreement between firms for Warspite machinery tender 105 Table 5.1: Permanent Members of the Supply Board after Manchuria 138 Table 7.1: Defence Requirements Committee Members 1934 180 Table 7.2: Naval and RAF Defence Expenditure, 1932-9 189 Table 8.1: British and