‘THE FOURTH FIGHTING SERVICE’ - THE EARLY DEVELOPMENT OF BRITISH ECONOMIC STATECRAFT

The Desart Committee By January 1911 Asquith directed the formation of a number of sub-committees of the CID to examine the full breadth of economic issues in the event of war. [...] The most difficult and untested issue was the functioning of the international financial system: what might Germany do in the event of war, how could the City of London be protected, and how might financial markets be used to inflict damage on Germany? The Committee assembled an extensive advisory panel of financiers and others from the City of London to explore these questions. [...] The impact of HM Treasury’s intransigence in mapping and planning the financial system in the Desart Committee, undoubtedly constrained Cabinet’s ability to appreciate the interplay between the financial crisis and the economic measures it was on the eve of implementing. [...] The unravelling of blockade By the end of 1914 the very problems that the CID had been established to avoid were running out of control - “the Treasury was preoccupied by managing the ongoing financial crisis and trying to resurrect global trade; the Admiralty was still trying to implement its economic warfare policy over the mounting objections of the Foreign Office; [and] increasingly the Board. [...] The next day, Cabinet approved the establishment of a Ministry of Blockade, under Lord Robert Cecil, to “coordinate the work of the War Trade Department (WTD), the Contraband Department of the Foreign Office and of all the different committees dealing with commercial questions”100.