The Washington herald., 1919-11-23
BRITAIN Is ALMOST BANKRUPT.
DESPITE BIC TRADE REVIVAL
The Road to Ruin Terriies Nation Which
Spends $55,ooo,ooo a Week More Than
Income and Fears to Increase Taxation.

/ turc to say that not a banker Of inn
portance in England would quarrel
with the substance OF conclusions set
down above.
To back up what has been said !
have permission to quote Sir Alfred
Booth, chairman of the Cunard Steam
ship Company. This man, head of
one of the greatest businesses in the
world, and one OF the most prosper
GUS. is no croaker or alarmist. This
| is what he said:
''It Is useless to disguise the fact
| that the national position is sufficient
iy serious 10 shake the confidence Of
the most optimistic. II trade and
commerce had been released from
control at the beginning Of the year.
and IL competition and the law OF
I supply and demand had been given
full sway. we should no doubt have
had serious difficulties for a time
and some alarming fluctuations in
prices, but 1 believe that by this
date we should have already got
over the worst. The trade of tn,
country would have had the chance
to reconstruct on the firm basis
of facts. Instead OF that we have
preferred to continue to live in q
| land or dreams.
Imports on Credit.
| with cur unemployment doles,
artificial wages. subsidIsed loaf
and railways and coal, and with
our inflated currency, we appear 10
| be heading for national bankruptcy
The plain fact is that the country
Is not paying it's way. or anything
like II. The great volume OF i'm
ports. which maintain freights at
their present artificial level, are
not being paid for by the goods
we can export or the services we
b can render in return. A large pro-
portion of these imports are simply
being supplied on credit.
! Now. If customer who nas
done business with you in the past
gets into financial trouble and needs
help to get going on a sound foot
ing again. you are willing to lend
him money IL you see he is putting
hS back into the business-trying
to increase production and cutting
out all waste in expediture. Bu;
you will not lend him another
penny il you hear he is on his way
to Monte Carlo.
Cannot Defy Mature.
I'm the affairs of this uorIo
nature has n nasty way of getting
back at you IL you persist in defy-
ing her laws. The politicians tell
US that the law of supply and de-
mand does not apply in war time
/ or in after war time. either. ap-
parently. All goes merrily for 4.
time. and then the despised law
gets US right between the eyes
| with the fail in dollar exchange.
through the war the value Of the
\ sovereign was maintained by gov
ernment borrowings in America,
This procedure could not long be
continued after the armistice. and
| last March IL became necessary 70
let the exchange 40. while il was
still necessary TO forbid the export
of gold
This means that :oId stand
ard has gone and the ersr-
while financial centvr "f the world
mas now to put up with what is
IN erect an incontrovcrtible paDer
currency. which differs only in de-
gree from the fiat currency of Boil
shevik Russia. But it is better to
be brought down to earth again
even in such an undiSnified para.
chute as this than to 20 on soaring
a'oft in a balloon which was lust
ready to burst
AS the exchange falls, all our
| purchases in America cost US more
and moro: but. on the other hand
our manufacturers are able to nut
their goods in the home and foreign
markets at a price relatively lower
than the American manufacture.
In this way the value of our inn
ports is bound to fall to the amount
we can really pay for. but unfor-
tunately the fall in exchange will
affect the imports We really need
! just as much as those we could do
without. In the end IL is perfect
; ly clear that if We will not work
we shall not be fed.
Stop Often Debated.
where the fall in exchange will
stop is often debated. The answer
is surely that it will stop when it
has accomplished its purpose OF
balancing our exports and imports,
1t is clearly to the interest of the
Americans to check the fall as much
| as they possibly can. for every ad-
ditional drop enhances their price
in this market as against our own
costs. The fall of exchange is
checked from time to time by Gre
dts given to traders in this coun-
try. but unless these credits lead
to profitable production, they only
postpone the evil day by piIinS up
| more debt against US, and the Gre
dts themselves will stop il it turns
out that we are really determined
to stay at Monte. Carlo. NV view.
as You see. is that the fall in ex-
change is bound to produce a re-
duction OF imports from America,
The labor situation today is so
erave that ii is idle to ignore the
| fact that great civilizations have
vanished in the past and that the
same thing may happen again.
rom the purely financial aspect,
the present situation will bring
about the bankruptcy OF the coun-
ltry unless We realize that we must