Statesmen of World War I by Sir James Guthrie / © National Portrait Gallery. Creative Commons Licence.

In the run up to the First World War not all in government prioritised spending on the military as the debate in the run up to the Finance Bill of 1905 shows. None the less, the private arms companies’ best customer was the state and private firms were accused of influencing rearmament by fomenting war scares in the run up to the First World War.

During the war the government established the Ministry of Munitions to ensure a sufficient supply after the existing private and state owned facilities failed to deliver enough shells to feed the guns. The Ministry recruited businessmen and brought hundreds of new works into operation. They succeeded in increasing the supply of arms, enriching many companies along the way. Attempts were made to control excessive profits through the munitions levy and the excess profits duty, with varying degrees of success.

After the war, many believed that if arms were to be made the state should be the only one to make them. Pressure to prohibit the private trade in armaments led to the arms trade being put on trial in the Royal Commission on the Private Manufacture of and Trading in Armaments in 1935. The private arms companies were strongly supported by some in government, and in the midst of rearmament for the next world war the Commission’s recommendations were buried.

  • Mulliner & The Big Navy Scare

    A Cooked Up Conspiracy

    In 1909, a scandal, which was to become notorious as the Big Navy Scare, ‘swept the country off its feet.’

  • Bailing Out The Private Sector

    Vickers-Armstrong Fusion Scheme

    It was June 1927. Two of Britain’s largest arms firms, Vickers and Armstrong, were operating at 40 percent capacity, with heavy losses, and Armstrong was in massive arrears to the Bank of England. A merger scheme was pushed through at the taxpayers’ expense.

  • The Arms Trade on Trial

    The Royal Commission on the Private Manufacture of and Trading in Arms 1935-6

    The Commission was probably the closest Britain has ever come to banning the private sale of arms. Despite its importance, its recommendations were buried at the time and are little remembered today.

  • Restricting profits?

    Control and Taxation of Business During the War: An Example from Swansea.

    In this case study, a steel producer complains his patriotism is being exploited by an unequal system of taxation, restricting his profits. Did the government control profits effectively during the war?

  • Blowing Brains Out or Putting Them In?

    The Military Spending Debate in 1905

    As Parliament debated the 1905 Finance Bill Liberal politicians argued to reduce defence expenditure, arguing that government funds should be diverted towards social reform. In the 1906 General Election the Liberal Party won a majority, and subsequently introduced wide ranging ed...

  • A Businessman’s Organization

    The Ministry of Munitions

    In 1915 the Ministry of Munitions was created to oversee and increase production of armaments for the war. Many businessmen were recruited to run the new ministry, yet production was brought under greater state control than ever before. Did the way the Ministry was staffed benefi...