Evening star., 1947-11-23

of Britishers. Victory in this unpr
gap between exports and imports
by all in the empire.
There are really two gaps to be
closed: internationally, between
exports and imports, and domest-
ically, between spending money and
the amount of available goods. The
two are inextricably joined. The
basic remedy is increased production,
which is just beginning to come in
and decreased consumption, which
is being forced by taxes and other
governmental DEGREES.
A Bad Winter Is Ahead
Even if Congress approves the
Marshall or European recovery plan
early in 1s4S, England will suffer
this winter more than during the
war years. Britain's economy is SO
complicated and her plight SO ap-
palling it, is doubtful whether the
American aid proposed for the next
four years will put her firmly back
on her feet so she can take up her
former high position in the inter-
national trading and financial
market places. AS one distinguished
expert told me: g
Britain must also make funda-
mental changes in her economy to
repair the neglect and to correct
the easy habits of the last 40 years. "
He was referring to the past lack
of initiative and enterprise by man.
agement and comparatively small
increases in the productivity OF labor
during the last four decades.
This was no argument against
adoption of the ERP or other aid
to Britain and the rest of Western
Europe. The present gaps between
exports and imports and between
domestic purchasing power and pur-
chasables are fundamentally the re-
suit OF the destruction of the war.
Unless the damage of two world
conflicts is repaired, the inhabitants
of the British Isles will have class
C or D standard of living. BY
American yardsticks, the present
standard is at most class B. If it
goes further down, Britain would be
in no shape to take the lead in
European recovery and her citizens
would not be the effective potential
Allies we must have in all important
bargainings with Soviet Russia and
her satellites.
Priorities for Export
AS Economic Minister and Chan
cellor of the Exchequer, Cripps has
laid out a program OF work and
sacrifice for the citizens and a blue
print for factory and trade re-
Mobilization. The highest priorities
will 60 to those industries that will
contribute most to the export trade,
particularly to those countries that
will directly or indirectly bring in
dollars.
Britain's present production is so
low that she is forced to use up the
accumulated savings of century
and to borrow from the United
States and from the commemorative
and colonies. OF the original Amer
ican loan of $3,75Q, 10000 made last
year and supposed to last five years
only $400, 600, 900 remains, and that
is frozen" She is selling her pre-
cious gold reserves at a fast rate.
and is borrowing $500, ,000, 900 from
the Union of South Africa. Her cit
izens still have an undisclosed
amount Of foreign securities and
direct capital investments that
could be turned into dollars as the
last resort. These, however, bring
to the United Kingdom the dollars
so direly needed to bridge the pres
ent export-import gap. The British
held American securities and prop
critics are said to be worth between
two and three billion dollars.
Cripps, using what are known as
orthodox" economics, has told his
people that even if his "austerity"
program is filled to the letter and
there is a balance in goods Of ex-
ports and imports between Britain
and the rest of the world there will
still be a gap of $1,000, 900, 900 at
the end of 194s.
A Paradoxical Situation
This paradoxical situation arises
from the fact that many of the
foods and materials. Britain must
have to exist come from dollar
countries in the Western Hemi-
sphere, notably the United States
and Argentina. --..
The glib observation that Britain
could save herself If she would only
work harder does not fit the present
facts. That may be true in the
long run, but it is not true in the
present situation. .r
For instance, the United King
dom today is producing only one
third Of its food requirements. Even
after the agricultural expansion
program is completed four years
hence it will produce only 50 per
cent Of the needed foods. There
Is a present difaculty in getting
new agricultural workers. The
drastic "order Of engagements" law,
which authorizes the direction" Of
men and women to the farms and
other essential work, Is Just getting
into operation. That law Is for only
IS months and probably will be
extended. |
For the long view. the government
is giving high priority to farm
houses in the hope of attracting |
permanent recruits. Here again in
trade enters the picture:
Britain must import almost all her
timber and the timber producing
countries are driving hard bargains.