War economy and finance

With the exception of major warships, the armaments available in 191418 were suitable for mass production, making war a gigantic industrial undertaking. Britain had the largest shipbuilding industry in the world, but even so it was difficult to meet the requirements of both the Royal Navy and the merchant navy when the latter was suffering heavy losses from submarines. British steel production in 1914 was only about half of Germany's, and domestic output had to be supplemented by imports from the United States and Sweden. Munitions production involved equipping new factories with machine tools, and once more the shortfall in British output had to be made good with imports, mainly from American sources.39 The munitions requirements of the army, which increased in size from 734,000 men in August 1914 to a peak of 3,858,000 in March 1918 (or 5,560,000 if troops from the Empire are included),40 were far beyond what the pre-war armaments industry could supply. New manufacturing capacity had to be created not only for guns and shells, but also for chemicals and optical glass, two sectors of industry where Britain had come to depend on imports from Germany before 1914. The Ministry of Munitions provided financial and technical assistance, and in 1916 the Department of Scientific and Industrial Research was created to promote research not only directly in universities and elsewhere but also indirectly by encouraging industries to set up research associations.41 Barnett is correct to point out that the war revealed the extent to which Britain had fallen behind other industrial countries in a range of advanced technologies, including aircraft engines, electrical goods and scientific instruments.42 On the other hand, it was normal in the international economy for countries to specialise in the production of some products and to rely upon imports for others. For example, in the cases of optical glass and scientific instruments, France had also become dependent upon imports from Germany for a range of specialist items, although France was a net exporter of optical glass and had pioneered the manufacture of scientific

39 Ministry of Munitions, History of the Ministry of Munitions, 12 vols. (London: HMSO, 1921-2), vol. II, part 1, p. 58; vol. VII, part 2, pp. 1-2, 9, 19-20, 71, 78-9; vol. VIII, part 3, pp. 38-9, 50-1; vol. XII, part 1, p. 110.

40 War Office, Statistics of the Military Effort of the British Empire during the Great War 191420 (London: HMSO, 1922), pp. 30-7.

41 Roy and Kay MacLeod, 'War and economic development: government and the optical industry in Britain, 1914-18', in Winter (ed.), War and Economic Development, pp. 165203.

42 Barnett, Collapse of British Power, pp. 83-9.

instruments.43 Nor was British industry found wanting in every respect. Barnett draws attention to delays in tank production caused by poor quality of castings of track-links and a lack of engines, but once these difficulties were overcome heavy engineering firms were able to respond well to orders for tanks, the skills required being similar to those for producing railway locomotives. Whereas British tank production in 1916-18 totalled 2,619, design and industrial delays limited German output to 20, all in 1918.44

The British aircraft industry in 1914 consisted of small firms with no experience of mass production, and had to expand to sustain an increase in first-line aircraft from 113 aeroplanes and 6 airships in August 1914 to 3,300 aeroplanes and 103 airships by November 1918, with an attrition rate on the Western Front that averaged 670 aeroplanes per month in 1918 owing to enemy action or accidents. Unplanned growth and competing orders by the War Office and Admiralty led to a situation in January 1917 in which the RFC and the RNAS between them used seventy-six different airframe designs and fifty-seven different types of engine. After the Ministry of Munitions took over procurement in December 1916a policy of standardisation reduced the number of types in production by September 1917 to fourteen airframes and thirteen aero-engines, with a consequent increase in economies of scale and in output. Although problems in developing more powerful aero-engines and in introducing new types of aircraft into service led to production falling below targets, output of aircraft doubled from 14,832 in 1917 to 30,782 in 1918.45 The British aircraft industry was not alone in encountering problems in developing more powerful aero-engines. Similar difficulties were experienced in Germany, and whereas the latest German fighters in 1918 used 180 h.p. engines, British designers were able to exploit the 230 h.p. Bentley Rotary 2. Likewise, whereas the Gotha bombers had 260 h.p. engines, Handley Page bombers had the 360 h.p. Rolls-Royce Eagle VIII. Over the war as a whole, as table 2.1 shows, British output of airframes exceeded German output. The Germans were unable to take full advantage of the superiority of their Fokker fighter in 1915 because they failed to manufacture it in large

43 Mari E. W. Williams, The Precision Makers: A History of the Instruments Industry in Britain and France, 1870-1939 (London: Routledge, 1994), pp. 72-8.

44 Barnett, Collapse of British Power, pp.84, 86; Childs, Peripheral Weapon? pp.34-5; Ministry of Munitions, History of the Ministry of Munitions, vol. XII, part 3, pp. 49-50, 58, 62-9, 93; B. T. White, German Tanks and Armoured Vehicles 1914-1945 (London: Ian Allan, 1966), p. 22.

45 Cooper, Birth of Independent Air Power, pp. 87, 90-3, 142. For the airframe and aeroengine industry, see Peter Fearon, 'The formative years of the British aircraft industry, 1913-1924', Business History Review, 43 (1969), 476-95.

Table 2.1. Aircraft production, 1914-18
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