The Director of Financial Enquiries\ud A Study of the Treasury Career\ud of R. G. Hawtrey, 1919-1939.
The Director of Financial Enquiries. A Study of the Treasury Career of R. G. Hawtrey, 1919-39.\ud In 1904 Ralph George Hawtrey, a Cambridge Mathematics graduate, entered the Treasury as Second Class Clerk. Apart from one year of secondment he was to remain employed by the Treasury until 1947. His career progress was modest. He never achieved a position of high administrative responsibility. Only in 1919, at the age of forty, did he achieve the grade of Assistant Secretary. In this position, as Director of Financial Enquiries within the Finance Division of the Treasury, he had no administrative responsibility, but was required to prepare reports on matters of his own choosing or as directed by his Treasury superiors. In his remaining 28 years at the Treasury he made no further career progress. As such, his was an unremarkable career.\ud His career was only remarkable because, after entering the Treasury, he took up an interest in the subject of Economics – he became a self-taught economist. Having developed his economic understanding through his experiences within the Treasury, it owed little to any previously existing ‘school’. Thus, in 1913, in his first book Good and Bad Trade, he was able to produce the first complete monetary explanation of the trade cycle. His standing as an economist rose even as his civil service career halted. In 1919 he produced a book Currency and Credit which became a standard university text on monetary economics for over a decade. He was appointed visiting Professor of Economics at Harvard for 1928-9, was elected to a fellowship of the British Academy in 1935, appointed Professor of International Economics at the Royal Institute of International Affairs in 1947, knighted (for ‘services to Economics’) in 1956, and elected to an Honorary Fellowship of Trinity College, Cambridge in 1959. As an economist of standing he used his position in the Treasury to criticise the policy-making authorities.\ud The Financial Enquiries Branch, for which Hawtrey was responsible, has commonly been described as a ‘backwater’ – removed from centre of economic decision-making. Likewise, within studies of the Treasury, there has been a tendency to deprecate Hawtrey as a figure of fun; partly on account of personal inefficiencies and eccentricities, and partly on account of a certain ‘unworldliness’, with his views being tied too closely to his economic theory and divorced from the traditional culture within which the Treasury and the Bank of England had been accustomed to operate.\ud This thesis will examine the way in which, as an economist, Hawtrey used his position within the Treasury to criticise, and attempt to change, policy. It will concentrate on his differences with the advice of other economists and his differences with the policies of the Treasury and the Bank of England.\ud The findings of this study are that while much of the criticism of Hawtrey’s career may be true, there were times when Hawtrey was both persuasive and influential. Much of his influence stemmed from his relationship with senior members of the Treasury administration, and whilst there were times when senior staff respected his judgement, there were times when his views ran contrary to the ethos of the Treasury and were ignored. However, even when he was ignored, as he often was, Hawtrey’s criticisms drew attention to the wider implications of policy in such a way that he can be seen as acting as the Treasury’s ‘conscience’. As such, his influence was often not directly on policy but, more subtly, upon the way in which the Treasury’s perception of its responsibilities changed.