ABSTRACT
In time of war, the financial department of any government must accustom itself to a position of both lesser and greater importance than during peacetime. Military necessity rules, and lesser considerations such as financial good housekeeping fade away; but at the same time, if the belligerent is at all dependent on resources outside the country, finance becomes of central concern. During the First World War the Treasury was pulled both ways. The war was unimagined in its scope, duration and devastation, and it transformed beyond all expectation the responsibilities and powers of the British government. No department could remain untouched, and most certainly not the department which had, since the time of Gladstone, played a pivotal role in the government. The Treasury was unprepared to administer a great war, and it was upended. Duties which had accrued to it for decades, that is, Treasury control of spending and of civil service staffing, were held to be of commanding importance by few outside the Treasury itself. At the same time, the Treasury for the first time imposed controls on the domestic money market and involved itself with overseas finance; and in a battle of wills with the Bank of England it emerged victorious.
