Pre-war Clash of Supply and Overseas Exchange Policies

Early in 1939 it became apparent that the National Supply Committee's request to manufacturers and distributors to carry additional stocks was clashing with the Government's policy of import and exchange control. The Allocation Committee for Sterling Funds was informed of the supply policy of the Organisation for National Security and asked to keep in mind the need for increased stocks when applications to import goods were being considered.¹ It is not surprising that such a reminder had little effect. Increases in stocks usually implied high importing. Conservation of overseas funds required low importing. When imports had to be rationed the natural tendency was to issue licences for the minimum quantities which would keep manufacturers and traders in operation, and not to use scarce funds for building up stocks. The volume of imports fell by 12 per cent in 1939. It is most unlikely that stocks in general increased, though stocks of some specific commodities may have increased.