BRITISH RAW MATERIAL CONTROLS1

Abstract

Introduction ONE of the principal instruments used during this war by the British Government for the diversion of factors of production to war purposes has been the direct control of the use of raw materials. In the case of nearly all raw materials the manufacturer must obtain a licence for their use from the appropriate Government Control, and in this way the manufacture of non-essentials can be prevented by the simple device of withholding the licence. The more general aspects, both practical and theoretical, of this technique of control of industry in war-time were discussed in an article by Mr. Ian Bowen and the present writer, entitled 'The Controls and War Finance'2 written in the summer of 1940, and an admirable article by two American writers3 has since been published in which the economic principles of control are treated in regard to one particular Control. In this issue of Oxford Economic Papers Mr. Hitch approaches the problem from the different angle of post-war reconstruction. In this paper, therefore, no attempt will be made to deal with principles of control, the more especially since there have been no notable changes in the technique of control since the two earlier articles mentioned above were written. On the other hand, the area of control has extended rapidly as the war has proceeded. In September 1939 there were about twenty industrial commodities under control: at present (October 1941) there are over sixty. The scope of control also has extended beyond the raw material stage to the later stages of production, e.g. the supplies to the home civilian market of certain manufactures embodying controlled materials have been curtailed by Government Orders. The object of this paper is to describe in some detail the development of control in the case of six materials. In the Appendix to the article 'The Controls and War Finance' the account of five Controls-Iron and 1 MLy thanks are due to Mr. N. H. Leyland for valuable help in the compilation of material for much of this paper, to M~r. S. C. Hood for the note on the Jute Control and to Mr. C. J. Hitch for his careful study of the manuscript and the elimination of many errors. 2 Oxford Economic Papers, No. 4, September 1940. 3 'British War-time Control of Copper, Lead and Zinc', by Jules Backman and Leo I'ishinan, Quarterly Journal of Economics, February 1941. 4520.6 B