The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1931-08-26
British Capitalism on the Edge
of a PreCipice
Ry R. PAINE DUTT.

BY r. PAINE DUTT.
THE gravity of the British financial situation,
L consequent on the German collapse and the
fiasco of the London Conference, is now becorA-
ing increasingly evident, although all attempts
are still made to conceal its full extent The
recent extreme strain during the past fortnight
IF the heavy gold exports and the consequent
raising of the Bank Rate are only symptoms Of
the process at work Not only the effects of the
collapse of German economy in which British
capitalism is deeply involved but also the direct
offensive of Paris and New York which seek
finally to dsplace London as the world finan-
cial center, are behind the intensity of the pres
ent crisis itself the outcome of the steady
weakening of British capitalism for ten years.
This development now becomes of increasing
Importance for the whole line of development
of the world crisis, and may possibly raise new
and far-reaChing issues with great suddenneSs.
Britain is revealed the second weakest link
in the chain of the imperialist powers the stage
through which the collapse in Germany may
extend to new intensity throughout world CAPT
talism.
A year ago the leader of the German Center
Party, DR.. Kaas caused slight flutter in dip
Iomatic circles by his declaration-actDally no
more than the customary argument of the Ger
man bourgeosie to plead for concessions from
son, if driven to desperation, would bring down
the whole structure of world capitalism in its
collapse Today the industralist "Deutsche
Allgemeine zeitung" is able to fling out the
challenge to London in its article AFTER YOU
the Deluge?" on the failure of the London Con-
ference:
This is the hour of which Dr. Kaas spoke
prophetically year ago when he said that the
German Samson, driven to desperation, would
pull down his opponents with him in his col
lapse Let the London Stock Exchange con-
tradct us if it CANT
But the London Stock Exchange was in no
mood to contradict.
On July II Baldwin, the Conservative leader,
startled public opinion in England by making
declaration openly referring to the possibility
of financial crash overturning the whole econ
omy in Britain. He said, speaking at Hull:
1T is difficult for us in England to realize
what financial crisis may mean, and yet it
is not beyond the bounds of possibility that
we may have one day to meet one here. We
have seen the result in other countries. Let
us take a warning of the resultant you
may find one morning no money for wages,
that you may find the value of your currency
so fluctuating that no man knows where he
stands, that there can be no certainty either
for the business man who makes his con-
tracts or for the workman who draws his
wages. The perils of such disaster in coun-
try like ours are beyond computation"
This was the first public declaration by polit-
ical leader of the possibility of financial crash
in Britain It was followed by a host of vague
alarmist statements in the press and in polit-
ical utterances that Britain was facing the
gravest crisis since August, 1914, or since the
general strike; that everything was in the bal
ance; there was talk of moratorium or ma
tional coalition government Alongside, went
declarations that there was full confidence"
mo panic,' mo crisis etc. At the same time
Henderson in Paris was painting a desperate
picture Of the British financial situation and
the possibility of a moratorium, and was yield
ing completely to the French demand that the
London Conference should cover no political
ground
What lay behind this wave of alarm? The i'm
mediate facts were obvious. First, Britain was
heavily involved in the short term credits to
Germany. At the London Conference the Brit
ish share was estimated at IS per cent or some
so to 100 million pounds sterling, whereas France
only held per cent and could afford to be
relatively less concerned. If these credits we're
lost, some of the biggest financial houses in
London would be faced with collapse This lay
behind Henderson's declaration nj Paris that a
German moratorium would inevitably be fol-
owed by a British moratorium DAILY Telegraph
rs. T. 81.
Britain seeks by every means in its power to
safeguard these credits by conversion to long
term international loan, and then to safeguard
the future payment Of interest on this and other
investments by drastic cutting down of debts
and reparations payments. But here Britain
find itself face to face with the antagonism of
both France and the United States. France will
not allow any question to be raised of the re-
vision of PREPARATIONS. The United States will
not allow any question to be raised of the re-
vision of war debts At the same time France
blocks any international loan by the insistence
on political guarantees including the sanctity of