The Wartime Diaries of Lionel Robbins and James Meade, 1943–45

268 Pages·1990·26.589 MB·English

by  Susan Howson, Donald Moggridge (eds.)

THE WARTIME DIARIES OF LIONEL ROBBINS AND JAMES MEADE, 1943-45
Also by Susan Howson
THE COLLECTED PAPERS OF JAMES MEADE (editor)
DOMESTIC MONETARY MANAGEMENT IN BRITAIN, 1919-38
THE ECONOMIC ADVISORY COUNCIL, 1930-1939: A Study in
Economic Advice during Depression and Recovery (with Donald Winch)
Also by Donald Moggridge
BRITISH MONETARY POLICY, 1924-1931
THE COLLECTED WRITINGS OF JOHN MAYNARD KEYNES
30 volumes (editor with Elizabeth Johnson)
KEYNES
MONEY AND POWER (editor with P. L. Cottrell)
THE RETURN TO GOLD, 1925
The Wartime Diaries of
Lionel Robbins and
James Meade, 1943-45
Edited by
Susan Howson
Professor of Economics
University of Toronto
and
Donald Moggridge
Professor of Economics
University of Toronto
Palgrave Macmillan
ISBN 978-1-349-10842-8 ISBN 978-1-349-10840-4 (eBook)
DOI 10.1007/978-1-349-10840-4
Selection and editorial matter © Susan Howson and Donald Moggridge, 1990
Chapters L 3 and 4 © Lady Robbins, 1990
Chapter 2 © James Meade, 1990
Softcover reprint of the hardcover 1s t edition 1990
All rights reserved. For information, write:
Scholarly and Reference Division,
St. Martin's Press, Inc., 175 Fifth Avenue,
New York, N.Y. 10010
First published in the United States of America in 1991
Library of Congress Cataloging-in-Publication Data
Robbins, Lionel Robbins, Baron, 1898-1984
The wartime diaries of Lionel Robbins and James Meade, 1943-45/
edited by Susan Howson and Donald Moggridge.
p. cm.
Includes index
1. World War, 1939-1945-Economic aspects. 2. Robbins, Lionel
Robbins, Baron, 1898-1984-Diaries. 3. Meade, J. E. Games Edward),
1907- -Diaries. 4. World War, 1939-1945-Personal narratives,
British. I. Meade, J. E. Games Edward), 1907- . II. Howson,
Susan, 1945- III. Moggridge, D. E. (Donald Edward), 1943-
IV Title
D800.R58 1990
940.54'8141-<1c20 90-48160
CIP
Contents
List of Abbreviations vii
Introduction 1
1 Lionel Robbins: Hot Springs and after, May-June 1943 8
2 James Meade: The Law Mission, September-0ctober 1943 92
3 Lionel Robbins: Bretton Woods, June-August 1944 156
4 Lionel Robbins: The Loan Negotiations and the ITO,
September-December 1945 221
Index 249
List of Abbreviations
BIS Bank for International Settlements
BLPES British Library of Political and Economic Science
BoE Bank of England Archives
BoT Board of Trade
CPRB Combined Production and Resources Board
CU Clearing Union
DO Dominions Office
FAO Food and Agriculture Organization
FO Foreign Office
HMG Her Majesty's Government
HMSO His/Her Majesty's Stationery Office
IBRD International Bank for Reconstruction and Development
ILO International Labour Office
IMF International Monetary Fund
ITO International Trade Organisation
JMK The Collected Writings of John Maynard Keynes
LSE London School of Economiu and Political Science
OPA Office of Price Administration
OSS Office of Strategic Services
PM Prime Minister
QRs quantitative restrictions
RAF Royal Air Force
RCAF Royal Canadian Air Force
SF Stabilisation Fund
UNO United Nations Organization
UNRRA United Nations Relief and Rehabilitation Administration
vii
Introduction
Lionel Robbins and James Meade both served as economists in Whitehall
during the Second World War. They joined the Central Economic Information
Service in the summer of 1940. Robbins, Professor of Economics at the
London School of Economics since 1929, had been in Cambridge, where the
School had been evacuated on the outbreak of war. Meade had just made his
way with his wife and three children across falling France from Geneva, where
he had been working for the Economic Intelligence Service of the League of
Nations since 1937. Previously, Meade had been Fellow and Lecturer in
Economics at Hertford College, Oxford. Robbins also had an Oxford
connection: he had been Lecturer (1924-5) and Fellow and Lecturer (1927-9)
in Economics at New College. Meade had attended his lectures. A few months
after Robbins and Meade joined the Central Economic Information Service, it
was split into the Central Statistical Office and the Economic Section, of which
Robbins became Director in September 1941. Meade succeeded him as
Director at the end of the war, officially taking over on 1 January 1946 when
Robbins returned to LSE. Meade followed Robbins to the School. as Professor
of Commerce with special reference to international trade, when he resigned
from government service in 1947. Meade later became Professor of Political
Economy at Cambridge (1957-67).
A great deal of Robbins's and Meade's work in the Economic Section from
1942 focused on post-war reconstruction, domestic and international. They
were both intimately involved in the preparation of the White Paper on
Employment Policy (Cmd 6527, May 1944): Meade wrote the first draft of
what became the White Paper in March 1943/ Robbins actively promoted
and strongly defended this aspect of the Section's work, in the Section and
elsewhere in Whitehall. According to Meade, Robbins's wisdom and
diplomatic skills were, along with the presence of Lord Keynes in the
Treasury (194(}-46) and the fad that the Sedion worked for a powerful
Minister, Sir John Anderson (Lord President of the Council, 194(}-43), the
main reason for the influence of the Section during the war.2
Robbins and Meade were not so diredly involved in the drafting and
development of Keynes's 'dearing union' proposals for post-war international
payments, since that was a Treasury initiative. They were both strongly
convinced of the need to build a multilateral world economic system after the
war: Meade responded to Keynes's plan by putting forward a complementary
2 Wartime Diaries of Robbins and Meade
plan for a 'commercial union' in July 1942.3 Keynes also produced a proposal
for international commodity price stabilisation known as 'commod'. These
plans became the basis of the British contributions to the wartime Anglo-
American discussions on international monetary and commercial policy. These
discussions eventually led to the establishment of the International Monetary
Fund, and might have led also to the establishment of an International Trade
Organisation if the development of the commercial policy proposals had not
been repeatedly stalled by divisive disputes within Britain's wartime Coalition
Government under Prime Minister Winston Churchil1.4
As a result, Lionel Robbins and James Meade both actively participated in
the Anglo-American wartime conversations on post-war policy, Robbins in
his role as Director of the Section and Meade because his 'commercial union'
proposal was enthusiastically taken up by the President of the Board of Trade,
Hugh Dalton, who arranged for Meade's part-time secondment to the Board
of Trade in 1942-3. The origin of the series of conversations, which began in
the late spring of 1943, lay in 'Article VII' of the Mutual Aid, or Lend-Lease,
Agreement between the US and the UK, signed on 23 February 1942, by
which, as the 'consideration' for US wartime aid in the form of lend-lease,
Britain committed herself to
agreed action ... open to participation by all other countries of like mind,
directed to the expansion, by appropriate international and domestic
measures, of production, employment, and the exchange and consumption
of goods ... ; to the elimination of all forms of discriminatory treatment in
international commerce, and to the reduction of trade barriers.5
The series included discussions in Washington on Keynes's clearing union
plan and on the US Treasury's proposal for a 'stabilisation fund', developed by
Harry Dexter White, in June 1943 after the United Nations Conference on
Food and Agriculture at Hot Springs, Virginia; conversations on monetary,
commerciaL commodity and employment policy and international investment
in September-October 1943, again in Washington; further monetary
discussions before and during the United Nations Monetary and Financial
Conference at Bretton Woods, New Hampshire, in June-July 1944; and finally,
and least amicably, the protracted negotiations in Washington in
September-December 1945 for the US post-war loan to Britain.
Robbins was a member of the official British missions to North America for
all four sets of discussions (and a UK delegate to both Hot Springs and
Bretton Woods). Meade, in his Board of Trade secondment was a member of
the 'Law Mission' - headed by the Minister of State at the Foreign Office,
Richard Law - to Washington and Ottawa in the autumn of 1943. Both kept
diaries of their visits to the USA and Canada, diaries which between them
cover all the major official talks, negotiations and conferences in North
America preparing the way for the post-war international monetary system,
Introduction 3
commercial regime and post-war financial settlement between Britain and the
United States. Hence this volume.
President Roosevelt of the United States in March 1943 suddenly proposed
a United Nations conference on food and agriculture, which was held at the
Homestead Hotel in Hot Springs, Virginia, a couple of months later. The
Conference, at which the 44 allied and associated nations were represented,
agreed to establish an interim commission to draft a constitution for a
permanent Food and Agriculture Organisation (FAO), which came into
existence in 1945. Richard Law was the chairman of the UK delegation, which
consisted of J. P. R. Maud and J. C. Drummond (Ministry of Food),
R. R. Enfield (Ministry of Agriculture and Fisheries), C. L. M. Clauson
(Colonial Office), Robbins, J. H. Magowan (Board of Trade), Sir Kenneth
Lee (Ministries of Production and Supply) and E. Twentyman (British Food
Mission, Washington). Law later reported to the British War Cabinet that this
very able delegation had taken control of the conference, utilising the ideas of
Keynes's 'commod' scheme for international buffer stocks which had been
approved by the Cabinet at the beginning of May.6
By the time of the conference, Keynes's plan for an international clearing
union, which had been approved by the Cabinet the previous year, had been
published as a White Paper on 7 April. when the US Treasury had also
published Harry White's plan for an international stabilisation fund.
Publication had followed communication and correspondence between the
two Treasuries which had started the previous summer.7 The American
administration took the opportunity of the Hot Springs Conference to discuss
the plans with representatives of a number of countries, including Britain, in
Washington in June 1943. Robbins's 1943 Diary (Chapter 1) records these
discussions as well as the Hot Springs deliberations.
Anglo-American monetary discussions resumed in Washington in
September-october 1943 as part of wide-ranging talks under Article VII
covering commercial policy, international investment, cartels, commodity
policy and employment policy, as well as the Keynes and White plans. As
Professor Pressnell has recently remarked, '[these] informal. non-commital
talks ... were the most important Anglo-American exchanges on economic
issues not only during the war but also for many years before and since'.s
Besides Richard Law, the 'Law Mission' included Lord Keynes, Sir David
Waley and Frank Lee (Treasury); Percivale Liesching, R. J. Shackle and Meade
(Board of Trade); Robbins (Economic Section); Nigel Ronald (Foreign Office);
C. L. M. Clauson (Colonial Office); P. W. Martin (Ministry of Food),
L. P. Thompson-McCausland (Bank of England seconded to the Treasury for
the Mission); and three officials (Baster, Hasler and Snelling) who acted as
secretaries. Their work began on board ship as they crossed the Atlantic
where much of the preparation for the talks took place. Meade's Mission
Diary (Chapter 2) covers the delegation's deliberations; the Anglo-American
conversations on commercial policy, in which as author of the British