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(Ebook) Activities 1939-1945: Internal War Finance by Keynes, John Maynard ISBN 9780521218764, 9781107696648, 9781139520157, 0521218764, 110769664X, 1139520156 PDF Version

The document is about the ebook 'Activities 1939-1945: Internal War Finance' by John Maynard Keynes, which focuses on his contributions to Britain's financial management during World War II. It includes discussions on his influential essay 'How to Pay for the War' and the first explicitly Keynesian Budget in Britain. The ebook is part of a larger collection of Keynes's writings, highlighting his significant impact on modern economics and public policy.

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16 views134 pages

(Ebook) Activities 1939-1945: Internal War Finance by Keynes, John Maynard ISBN 9780521218764, 9781107696648, 9781139520157, 0521218764, 110769664X, 1139520156 PDF Version

The document is about the ebook 'Activities 1939-1945: Internal War Finance' by John Maynard Keynes, which focuses on his contributions to Britain's financial management during World War II. It includes discussions on his influential essay 'How to Pay for the War' and the first explicitly Keynesian Budget in Britain. The ebook is part of a larger collection of Keynes's writings, highlighting his significant impact on modern economics and public policy.

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the collected writings of
J O H N M AY NA R D K E Y N E S
Managing Editors:
Professor Austin Robinson and Professor Donald Moggridge

John Maynard Keynes (1883–1946) was without doubt one of the most influ-
ential thinkers of the twentieth century. His work revolutionised the theory
and practice of modern economics. It has had a profound impact on the
way economics is taught and written, and on economic policy, around the
world. The Collected Writings of John Maynard Keynes, published in full in
electronic and paperback format for the first time, makes available in thirty
volumes all of Keynes’s published books and articles. This includes writings
from his time in the India Office and Treasury, correspondence in which he
developed his ideas in discussion with fellow economists and correspondence
relating to public affairs. Arguments about Keynes’s work have continued
long beyond his lifetime, but his ideas remain central to any understanding of
modern economics, and a point of departure from which each new generation
of economists draws inspiration.

Between the outbreak of war in 1939 and his death in 1946 Keynes was closely
involved in the management of Britain’s war economy and the planning of
the post-war world. This volume, the first of several dealing with this period,
focuses on two aspects of his activities during the war: his efforts as a private
citizen to influence opinion of the tasks ahead prior to July 1940, and his
contributions within the Treasury to Britain’s internal financial management
thereafter. It contains the correspondence and memoranda surrounding How
to Pay for the War, perhaps his most successful essay in persuasion; the 1941
Budget, the first explicitly Keynesian Budget in Britain; the development of
the associated national income estimates; and his later attempts to influence
other areas of financial policy. This is a necessary companion to How to Pay
for the War, which appears in Volume IX of this series.

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THE COLLECTED WRITINGS OF
JOHN MAYNARD KEYNES

VO LU M E X X I I

ACTIVITIES 1939–1945
I N T E R NA L WA R F I NA N C E

edited by
DONALD MOGGRIDGE

CAMBRIDGE UNIVERSITY PRESS


for the
ROYAL ECONOMIC SOCIETY

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© The Royal Economic Society 1978, 2013

All rights reserved. No part of this publication


may be reproduced or transmitted, in any
form or by any means, without permission

Published for the Royal Economic Society


throughout the world by
cambridge university press
Cambridge, New York, Melbourne, Madrid, Cape Town,
Singapore, São Paulo, Delhi, Mexico City
Cambridge University Press
The Edinburgh Building, Cambridge cb2 8ru, UK

Published in the United States of America by


Cambridge University Press, New York

www.cambridge.org
Information on this title: www.cambridge.org/9781107696648

This publication is in copyright. Subject to statutory exception


and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without the written
permission of Cambridge University Press.

This edition published 2013


Printed and bound in the United Kingdom
by the MPG Books Group

A catalogue record for this publication is available from the British Library

isbn 978-1-107-69664-8 Paperback


30-volume set isbn 978-1-107-67772-2

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CONTENTS

General introduction page vii

Editorial note xiii

Part I. Shaping Opinion

1 THE BEGINNING 3

2 HOW TO PAY FOR THE WAR 40

3 OPERATIONS ON OTHER FRONTS - FEBRUARY


TO JUNE I94O 150

Part JI. At the Treasury - Domestic War Finance


4 THE 1 9 4 1 BUDGET r
95
5 THE LATER BUDGETS 355
6 FINANCIAL MARKET POLICY 393
7 MISCELLANEOUS ACTIVITIES 432
List of Documents Reproduced 487
Acknowledgements 492
Index 493

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GENERAL INTRODUCTION
This new standard edition of The Collected Writings of John
Maynard Keynes forms the memorial to him of the Royal
Economic Society. He devoted a very large share of his busy
life to the Society. In 1911, at the age of twenty-eight, he
became editor of the Economic Journal in succession to Edge-
worth; two years later he was made secretary as well. He held
these offices without intermittence until almost the end of his
life. Edgeworth, it is true, returned to help him with the
editorship from 1919 to 1925; Macgregor took Edgeworth's
place until 1934, when Austin Robinson succeeded him and
continued to assist Keynes down to 1945. But through all these
years Keynes himself carried the major responsibility and
made the principal decisions about the articles that were to
appear in the Economic Journal, without any break save for
one or two issues when he was seriously ill in 1937. It was only
a few months before his death at Easter 1946 that he was
elected president and handed over his editorship to Roy
Harrod and the secretaryship to Austin Robinson.
In his dual capacity of editor and secretary Keynes played
a major part in framing the policies of the Royal Economic
Society. It was very largely due to him that some of the
major publishing activities of the Society—Sraffa's edition
of Ricardo, Stark's edition of the economic writings of
Bentham, and Guillebaud's edition of Marshall, as well as a
number of earlier publications in the 1930s—were initiated.
When Keynes died in 1946 it was natural that the Royal
Economic Society should wish to commemorate him. It was
perhaps equally natural that the Society chose to commem-
orate him by producing an edition of his collected works.
Keynes himself had always taken a joy in fine printing, and
the Society, with the help of Messrs Macmillan as publishers
vii

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GENERAL INTRODUCTION
and the Cambridge University Press as printers, has been
anxious to give Keynes's writings a permanent form that is
wholly worthy of him.
The present edition will publish as much as is possible of
his work in the field of economics. It will not include any
private and personal correspondence or publish letters in the
possession of his family. The edition is concerned, that is to
say, with Keynes as an economist.
Keynes's writings fall into five broad categories. First there
are the books which he wrote and published as books. Second
there are collections of articles and pamphlets which he
himself made during his lifetime (Essays in Persuasion and
Essays in Biography). Third, there is a very considerable
volume of published but uncollected writings—articles
written for newspapers, letters to newspapers, articles in
journals that have not been included in his two volumes of
collections, and various pamphlets. Fourth, there are a few
hitherto unpublished writings. Fifth, there is correspondence
with economists and concerned with economics or public
affairs.
This series will attempt to publish a complete record of
Keynes's serious writing as an economist. It is the intention
to publish almost completely the whole of the first four
categories listed above. The only exceptions are a few syndi-
cated articles where Keynes wrote almost the same material
for publication in different newspapers or in different coun-
tries, with minor and unimportant variations. In these cases,
this series will publish one only of the variations, choosing the
most interesting.
The publication of Keynes's economic correspondence
must inevitably be selective. In the day of the typewriter and
the filing cabinet and particularly in the case of so active and
busy a man, to publish every scrap of paper that he may have
dictated about some unimportant or ephemeral matter is
impossible. We are aiming to collect and publish as much as
Vlll

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GENERAL INTRODUCTION
possible, however, of the correspondence in which Keynes
developed his own ideas in argument with his fellow econ-
omists, as well as the more significant correspondence at
times when Keynes was in the middle of public affairs.
Apart from his published books, the main sources available
to those preparing this series have been two. First, Keynes in
his will made Richard Kahn his executor and responsible for
his economic papers. They have been placed in the Marshall
Library of the University of Cambridge and have been avail-
able for this edition. Until 1914 Keynes did not have a
secretary and his earliest papers are in the main limited to
drafts of important letters that he made in his own handwrit-
ing and retained. At that stage most of the correspondence
that we possess is represented by what he received rather than
by what he wrote. During the war years of 1914-18 Keynes
was serving in the Treasury. With the opening in 1968 of the
records under the thirty-year rule, many of the papers that
he wrote then and later have become available. From 1919
onwards, throughout the rest of his life, Keynes had the help
of a secretary—for many years Mrs Stevens. Thus for the last
twenty-five years of his working life we have in most cases
the carbon copies of his own letters as well as the originals of
the letters that he received.
There were, of course, occasions during this period on
which Keynes wrote himself in his own handwriting. In some
of these cases, with the help of his correspondents, we have
been able to collect the whole of both sides of some important
interchange and we have been anxious, in justice to both
correspondents, to see that both sides of the correspondence
are published in full.
The second main source of information has been a group
of scrapbooks kept over a very long period of years by
Keynes's mother, Florence Keynes, wife of Neville Keynes.
From 1919 onwards these scrapbooks contain almost the
whole of Maynard Keynes's more ephemeral writing, his
IX

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GENERAL INTRODUCTION
letters to newspapers and a great deal of material which
enables one to see not only what he wrote but the reaction
of others to his writing. Without these very carefully kept
scrapbooks the task of any editor or biographer of Keynes
would have been immensely more difficult.
The plan of the edition, as at present intended, is this. It
will total twenty-nine volumes. Of these the first eight are
Keynes's published books from Indian Currency and Finance,
in 1913, to the General Theory in 1936, with the addition of his
Treatise on Probability. There next follow, as vols. ix and x,
Essays in Persuasion and Essays in Biography, representing
Keynes's own collections of articles. Essays in Persuasion differs
from the original printing in two respects: it contains the full
texts of the articles or pamphlets included in it and not (as
in the original printing) abbreviated versions of these articles,
and it also contains one or two later articles which are of
exactly the same character as those included by Keynes in his
original collection. In Essays in Biography there have been
added a number of biographical studies that Keynes wrote
both before and after 1933.
There will follow two volumes, xi-xn, of economic articles
and correspondence and a further two volumes, already
published, xm-xiv, covering the development of his thinking
as he moved towards the General Theory. There are included
in these volumes such part of Keynes's economic correspon-
dence as is closely associated with the articles that are printed
in them.
The next thirteen volumes, as we estimate at present, deal
with Keynes's Activities during the years from the beginning
of his public life in 1905 until his death. In each of the
periods into which we divide this material, the volume con-
cerned publishes his more ephemeral writings, all of it
hitherto uncollected, his correspondence relating to these
activities, and such other material and correspondence as is
necessary to the understanding of Keynes's activities. These

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GENERAL INTRODUCTION
volumes are edited by Elizabeth Johnson and Donald Mog-
gridge, and it is their task to trace and interpret Keynes's
activities sufficiently to make the material fully intelligible to
a later generation. There will be a further volume printing
his social, political and literary writings and a final volume of
bibliography and index.
Those responsible for this edition have been: Lord Kahn,
both as Lord Keynes's executor and as a long and intimate
friend of Lord Keynes, able to help in the interpreting of
much that would be otherwise misunderstood; Sir Roy
Harrod as the author of his biography; Austin Robinson as
Keynes's co-editor on the Economic Journal and successor as
Secretary of the Royal Economic Society, who has acted
throughout as Managing Editor.
Elizabeth Johnson has been responsible for the Activities
volumes xv-xvm covering Keynes's early life, the Versailles
Conference and his early post-1918 concern with reparations
and international finance. Donald Moggridge has been res-
ponsible for the two volumes covering the origins of the
General Theory and for all the Activities volumes from 1924 to
the end of his life in 1946.
The work of Elizabeth Johnson and Donald Moggridge has
been assisted at different times by Jane Thistlethwaite, Mrs
McDonald, who was originally responsible for the systematic
ordering of the files of the Keynes papers and Judith Master-
man, who for many years worked with Mrs Johnson on the
papers. More recently Susan Wilsher, Margaret Butler and
Leonora Woollam have continued the secretarial work. Bar-
bara Lowe has been responsible for the indexing. Susan
Howson undertook much of the important final editorial
work on these volumes.

XI

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EDITORIAL NOTE
In this volume, the first of three concerning Keynes's involve-
ment in the problems of financing Britain's war effort after
1939, the concentration is on internal financial policies. Later
volumes will deal with the external aspects of Britain's war
finance including lend lease. A further three volumes will
be devoted to Keynes's efforts to shape the post-war world.
For Keynes's efforts to shape opinion through contribu-
tions to the Press, the main source is the series of scrapbooks
which, as explained in the General Introduction, his mother
carefully maintained (with Keynes's assistance) throughout
his working life. For correspondence and memoranda, we are
dependent on his surviving papers, materials available in
the Public Record Office and the papers of colleagues and
friends, in particular Professor J. R. N. Stone, to whom
Keynes passed his working files concerning the national
income exercise that accompanied the 1941 Budget. Where
the material used has come from the Public Record Office,
the call numbers for the relevant files appear in the List of
Documents Reproduced following page 487.
In this and the succeeding wartime volumes, to aid the
reader in keeping track of the various personalities who pass
through the pages that follow, we have included brief
biographical notes on the first occasion on which they appear.
These notes are designed to be cumulative over the whole run
of wartime volumes.
In this, as in all the similar volumes, in general all of
Keynes's own writings are printed in larger type. All intro-
ductory matter and all writings by others than Keynes are
printed in smaller type. The only exception to this general
rule is that occasional short quotations from a letter from
Keynes to his parents or to a friend, used in introductory

xm

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EDITORIAL NOTE

passages to clarify a situation, are treated as introductory


matter and are printed in the smaller type.
Most of Keynes's letters included in this and other volumes
are reprinted from the carbon copies that remain among his
papers. In most cases he has added his initials to the carbon
in the familiar fashion in which he signed to all his friends.
We have no certain means of knowing whether the top copy,
sent to the recipient of the letter, carried a more formal
signature.

xiv

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PART I
SHAPING OPINION

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