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The Formation of the Foreign Office Economic Relations Section, 1930–1937

Published online by Cambridge University Press:  11 February 2009

Donald Graeme Boadle
Donald Graeme Boadle
Affiliation:
St John's College, Cambridge
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Extract

In December 1930 Sir Victor Wellesley, the deputy under secretary at the Foreign Office, and its expert on Far Eastern finance, circulated a 29-page ‘Proposal for the establishment of a Politico-Economic Intelligence Department in the Foreign Office.’ This memorandum was prompted by the growing importance of tariffs, and various forms of investment, as instruments of foreign policy, and concern at his colleagues' failure to understand the political consequences. With economic nationalism in the ascendant, Wellesley recognized that Britain soon would have to consider whether she would ‘take part in the scramble for economic hegemony’. He hoped Cabinet would decide against tariffs and imperial preference, but was worried that the Foreign Office would be ill-equipped to defend this viewpoint. It was not that the Office lacked adequate sources of economic information, but rather that the division of duties between the Department of Overseas Trade and the Foreign Office precluded their assimilation with political appreciations. Although seventy five per cent of the work of the average mission was economic or commercial, this was generally left to the commercial counsellor, who reported directly to the Department of Overseas Trade. Political dispatches were forwarded to the appropriate Foreign Office department and there examined in virtual isolation. Moreover, the dominant attitude of mind among senior diplomats was, if not actually predisposed against economic work, at least so lacking in understanding that their efforts were often misdirected.

Type
Articles
Information
The Historical Journal , Volume 20 , Issue 4 , December 1977 , pp. 919 - 936
Copyright
Copyright © Cambridge University Press 1977

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References

1 W12855/12855/50, F.O. 371/14939. 1 Dec. 1930.

2 Until the formation of the Department of Overseas Trade in 1917, responsibility for trade and commerce was divided between the Foreign Office and the Board of Trade. The creation of an intermediate department, responsible to both, was a compromise solution intended to placate businessmen who feared that the concentration of all this work in the Board of Trade would isolate commercial issues from political considerations. Under these new arrangements, the Board of Trade remained responsible for formulating commercial policy, while the Department of Overseas Trade was charged with its implementation. Following the disbanding of the Foreign Office's commercial attache service in 1919, direction of the newly established commercial diplomatic service was placed solely in the hands of the Department of Overseas Trade. The consular servicé continued to operate from within the Foreign Office. See Platt, D. C. M., Finance, trade and politics in British foreign policy 1815–1914 (Oxford, 1968), pp. 378–80, 393–5.Google Scholar

3 Ashton-Gwatkin, Frank, ‘Sir Victor Wellesley’, D.N.B. 1951–1960. (Oxford, 1971), pp. 1042–1043;Google ScholarStrang, Lord, Home and abroad (London, 1956), p. 59;Google ScholarAshton-Gwatkin, Frank, The British Foreign Service (Syracuse, 1950?), p. 24.Google Scholar

4 Gladwyn, Lord, Memoirs (London, 1972), p. 57;Google Scholar Strang, Home and abroad, p. 310; Vansittart, Lord, The mist procession (London, 1957), p. 320; Platt, Finance, trade and politics, pp. xx-xxx.Google Scholar

5 Harold Nicolson MS diaries, II July 1930; F.O. 366/881, Apr. 1930, correspondence with the National Institute of Industrial Psychology; minutes by Dalton and Vansittart 9, 10 Jan. 1930, L246/102/405, F.O. 370/325; Hugh Dalton diaries, 20 Mar. 1930.

6 Minute by Vansittart, 15 Dec. 1930, C9308/9308/18, F.O. 371/14379; C7444/52/18, F.O. 371/14357; L8646, L8647/102/405, F.O. 370/326; C9044/658/62, F.O. 371/14347.

7 Memorandum by Dalton “Dec. 1930”, filed with other unregistered papers in W441/50, F.O. 371/15671. On instructions from Clifford Norton, Vansittart's private secretary, most of these early papers on the economic section proposal were not entered. Instead they were kept by die Western Department, and only restored to their rightful place in 1969, when this file was transferred to the Public Record Office. It is not clear whether this was done for reasons of convenience and greater secrecy, or in the hope that the proposal might more easily be forgotten. Normally, secret papers were entered ‘green’. If restricted circulation was intended in this instance it seems curious that the normal practice was not followed.

8 Memorandum by Dalton, ibid.

9 W441, W1225/441/50, F.O. 371/15671. Minutes of the 17 Feb. 1931 meeting are among the unregistered papers in this file.

10 Wellesley, Victor, Diplomacy in Fetters (London, 1944), pp. 194, 196–8.Google Scholar

11 Unsigned minute, 18 Feb. 1932, annexed to W278/278/50, F.O. 371/17318.

12 Dalton, Hugh, Call back yesterday: memoirs 1887–1931 (London, 1953), p. 291.Google Scholar

13 Unregistered correspondence in W441/50, F.O. 371/15671.

14 W823, W1843/823/50, F.O. 371/14932; Crowe to Vansittart, 9 Apr. 1931, W5483/866/50, F.O. 371/15672.

15 Henderson to MacDonald (draft by Wellesley), 20 Mar. 1931, W44I/50, F.O. 371/15671; Crowe to Vansittart, 9 Apr. 1931, W5483/866/50, F.O. 371/15672.

16 Dalton diaries, 18 Dec. 1940; Vansittart, The mist procession, p. 393; Carlton, David, MacDonald versus Henderson (London, 1970), passim.CrossRefGoogle Scholar

17 Minute for Henderson by Vansittart, 23 Apr. 1931, unregistered paper in W441/50, F.O. 371/15671; Norton to Fisher, 9 Apr. 1931, ibid.; minute for Simon by Vansittart, 14 Nov. 1931, ibid.; unsigned memorandum by P. J. Noel-Baker on Vansittart's instructions, 22 Apr. 1931, Ramsay MacDonald papers, 1/286.

18 Minute by Vansittart for Howard Smith, 23 Apr. 1931, and minutes for Henderson, II Apr., 12 June 1931, W5483/866/50, F.O. 371/15672; Nevile Buder to Vansittart, 19 June 1931, ibid.

19 Memorandum by Wellesley, 4 May 1931, F.O. 800/283.

20 Minutes by Howard Smith and Wellesley, 30 Oct. 1931, W12622/11082/50, F.O. 371/15683.

21 Wellesley to Vansittart, “? 5 Oct.” 1931, W441/50, F.O. 371/15671; minutes by Wellesley and Norton, 5 Oct. 1931, WI 2197/441/50, ibid.

22 Minute by Howard Smith, 7 Dec. 1931, WI4039, WI4244/11082/50, F.O. 371/15684.

23 Minute for Simon by Vansittart, 14 Nov. 1931, W441/50, F.O. 371/15671; minutes by Craigie and Wellesley, 6 Jan. 1932, W341/63/50, F.O. 371/16384; unsigned memorandum, 18 Feb. 1932 and report on economic work in 1932 by Ashton-Gwatkin, 5 Jan. 1933, W278/278/50, F.O. 371/17318.

24 W5120/5120/50, F.O. 371/15676; minute by Ashton-Gwatkin, 26 Nov. 1931, W13443/5120/50, ibid.; W13399/5120/50, ibid.; W14244/11082/50, F.O. 371/15684.

25 Minutes by Mounsey and Wellesley, 23 Dec. 1931, WI 4454/11082/50, F.O. 371/15684.

26 For the background to these measures see Drummond, Ian M., Imperial economic policy 1917–1939. (London, 1974), pp. 174–86.CrossRefGoogle Scholar

27 Memorandum, ‘IDAC on Foreign Countries’ by Ashton-Gwatkin, 1 Nov. 1932, with minutes by Vansittart and Simon, 2, 6 Nov. 1932, W12437/63/50, F.O. 371/16392.

28 W968/285/50, F.O. 371/17318; W3504, W3672/285/50, F.O. 371/17319.

29 F13135/I, T.160/532.

30 WI3489/285/50, F.O. 371/17319.

31 Report on economic work in 1932 by Ashton-Gwatkin, 5 Jan. 1933, W278/278/50, F.O. 371/17318; report on the Economic Relations Section in 1933, 5 Jan. 1934, W293/293/50, F.O. 371/18487.

32 W3986/278/50, F.O. 371/17318; minutes by Mounsey, 15 May 1933, W986/278/50, ibid.

33 W9851/278/50, ibid.

34 Minute by Vansittart, 9 July 1933, W3986/278/50, ibid.; minutes by Ashton-Gwatkin, 2, 24 Aug. 1933 and Vansittart, 14 Aug. 1933, W9852/278/50, ibid.

35 WI2966/278/50, ibid.

36 F13701/1, T.160/742.

37 Minute by Ashton-Gwatkin, 16 Feb. 1934, W1617/1617/50, F.O. 371/18500.

38 Minute by Vansittart, 30 Jan. 1934, W293/293/50, F.O. 371/18487.

39 Minute for Fisher by Leith-Ross, 21 Feb. 1934, F13701/1, T.160/742.

40 W3928/293/50; F.O. 371/18487.

41 Minutes by Mounsey and Vansittart, 13, 14 Apr. 1934, W3929/293/50 ibid.

42 Minute by Mounsey, 4 May 1934, W4907/293/50, ibid.; Ashton-Gwatkin, British Foreign Service, pp. 26–27; Selby, Walford, Diplomatic twilight 1930–1940 (London, 1953), pp. 1–6.Google Scholar

43 Circular instructions, I June 1934, W4907/293/50, F.O. 371/18487.

44 Minutes by Mounsey and Vansittart, 4, 5 June 1934, W5466/293/50, F.O. 371/18488.

45 W5451, W6928, W7203/1195/50, F.O. 371/18497; W7223/293/50, F.O. 371/18488; W1246, W1264/23/50, F.O. 371/19597.

46 Circular instructions, II Mar. 1935, WI246/23/50, F.O. 371/19597; minutes by Ashton Gwatkin and Mounsey, 17 Mar. 1936, W2075/92/50, F.O. 371/20455.

47 WI682, W4756/92/50, F.O. 371/20455; minute by Ashton-Gwatkin, 5 Aug. 1937, W15856/124/50, F.O. 371/21218.

48 W23, W277/23/50, F.O. 371/19597; Nicolson, Harold, Lord Carnock: a study in the old diplomacy (London, 1930), pp. 326–327.Google Scholar

49 Report on the Economic Relations Section in 1934 by Ashton-Gwatkin, II Feb. 1935, WI264/23/50, F.O. 371/19597; WI661, W4351/107/50, F.O. 371/22491.

50 L1994/51/405, F.O. 370/471; L5309/51/405. F.O. 370/472.

51 Minute on the future of the EAC by Ashton-Gwatkin, 19 Aug. 1937, and Vansittart to Fisher, 23 Aug. 1937, W16183/124/50, F.O. 371/21218.

52 Minutes by S. D. Waley, 14 Dec. 1936, 29 Oct. 1937, F13701/2, T.160/742.

53 Sources cited in n. 10 and n. 42 (above); Ashton-Gwatkin, Frank, ‘Thoughts on the Foreign Office: 1918–1939’, Contemporary Review, CLXXXVIII (12 1955), pp. 374–8.Google Scholar