ABSTRACT
During the 1920s Morton became convinced that both Soviet Russia and Germany posed an increasingly urgent threat to British interests that extended across the political, economic and military spheres, and that it was important to secure reliable and detailed information about industrial developments in those two countries and about their potential for conversion to military use in preparation for war. Morton was not the only person, and SIS not the only organisation, to be thinking along these lines, although in the creation of an Economic Section SIS was in the vanguard in taking concrete steps to collect economic intelligence and to assess its significance as a discrete body of information in the context of wider sources. Developments on the wider Whitehall front took longer to mature. The revival in 1929 by Ramsay MacDonald of an earlier initiative for a Committee of Economic Enquiry, that evolved into the Economic Advisory Council in 1930,2 and Arthur Henderson’s proposal to establish a ‘politicoeconomic intelligence department in the Foreign Office’3 are two examples of a growing realisation of the critical importance of economic factors in the
formulation of policy, whether domestic or foreign. Similarly, at the official and military Staff level the study of the means of economic pressure on potential enemies, and of the economic foundations of those enemies’ war potential, had been in hand since 1918, albeit at a low level of priority.4 Before 1931, it would have been common ground that the enemy of first choice was Soviet Russia, with China and Japan in the second rank. Germany, though coming up fast on the rails, was still regarded as a lesser threat.
