The Washington herald., 1919-11-23
ny JOHN LLoYD BALDERsroy.

by JOHN LLOYD BALDERsTON.
London. Nov. lis the British
Empire going bankrupt? 'The
isoad to Ruin" is the phrase used
ny the Northcliffe press to describe
the present descent to the abyss"
The people OF England are una Bile
70 see how the country can keen
soivent while the treasury. in peace
time, despite all efforts at econ
Iomy. Is spending s55,00O.0 900 a week
more than the total revenue from
all sources.
In my last two dispatches ]
showed that England is not going
Boishevik. and that at the same
time that the labor situation ia
more encouraging industry has re.
vived until at present goods ar,
peing produced and there Is less
unemployment in this country than
ever before in the most piping
times of peace.
WorkmeR Reasonable.
Pessimists have been confounded
by reasonable attitude the British
workingman assumed as soon as
he was made certain that his war
time wages are not to be taken
away from him. at least not before
the cost of living has fallen. Pes
simists were also put to shame
when the country. instead OF fall
ing into chaos during demobiliZa-
tion. turned its industrial plants
into peace goods factories almost
over night. beat its swords into
ploughshares, started production
on peace basis and absorbed all
the millions of discharged soldiers
I a not haf 4
the war was over.
| Nevertheless the financial crisis
remains. Pessimists, unable sincs
the railroad strike was settled to
croak about labor or production
now concentrate their gloom upon
the approaching bankruptcy OF the
country. As. the breakdown of Brf-
tain would shake the world. includ-
ling the United States. perhaps even
more than the war has done. the
! financial situation here affects
tevery American.
! Since production is the backbone
of prosperity. and production here
is going full blast, what Is there t.
worry about?
! Interest on War Debt Paid.
! Interest has to be paid upon the
war debt. either by increased taxa
tion or by some form OF disguised
confiscation of wealth. such as the
proposed levy on capital" The cru
ctal fact of the day seems 10 be that
! although production has risen. and
I every body has work. still the output
Of goods is not sufficient to enable
everybody to live as before the war.
and at the same time turn over 10
the government between three and
four billion dollars a year for interest
to those at home and in America who
have advanced the money for tho
strusgle OF the past five years.
The national income is greater than
it was in 1918. Measured in terms 6t
quality OF commodities and services
being produced. it is greater: and IN
terms of the deprecated paper cur
rency now current It is probably twice
| as great. These estimates are not
mine. but those of Treasury officials
| qualified to speak.
Ehis optimistic fact, coupled with
the disappearance with the railroad
strike Of the fear of revolution, | have
dealt with in my last two dispatches
But to set of against increa ased pro-
is causing the most serious alarm in
I ChNlNS anu
men.
Government Borrows.
| Government expenditure. not war
expenditure. but money now a year
after the armistice actually being paid
| out is almost exactly five times as
great as in the last year of peace.
| Where is this gigantic sum to come
from? And where is the mad race
to end when every week the govern
ment has to borrow $S5.G0.O0O more
TO keep the wheels turning?
Wage earners are demanding that
their standard of life shall not be
cut down. that their wages shall re-
main at the relatively high figure TO
which they attained during the war
To this demand the government. IN
| settling the railway strike, in effect
acceded. But business men and land
owners are trying to get profits at
least as great as those they enjoyed
before the war: economists claim that
with the rise in the rate OF interest
capital here even gets more than it
used to get
| The common sense view is that one
OF four things must happen. The
country must produce. not a little
more than in 1913. but two to three
times as much. IL the war interest is
to be paid and capital and labor each
| continue to set their present return.
II this is not possible. either capital
or labor or both must retrench and ac-
cept less remuneration, reduce expen-
/ dlture. If one Of these three things
does not take place, and that within
a comparatively short time. the dread
ed fourth possible contisency will he
upon the money capital of the world.
England will go broke
Bankers Agree.
These facts I have put somewhat
cruelty. in such shape as to shock
grave bankers. who wrap their words
and meanings in choicely chosen and
circumlocutory phrases. But I ven
II Tilt