HOW BRAITAIN HAS DONE IT!
James Wedgwood Drawbell
Editor of the London Sunday Chronicle
TO APPRECIATE Great Britain’s achievement in the world crisis, it is necessary first to understand that this country’s problems have differed in kind, substance and degree from those of any other country. Less than five years ago our very existence as a nation was threatened. Because of our dependence on international trade, we were in greater danger than any other country; greater indeed than at the darkest moments of the war. Every move in the direction of economic nationalism by Germany, France, the United States or any other power, was a move against Great Britain, which lived by trading.
There were many such moves long before the American collapse in October, 1929. Tariff walls and other restrictions had begun to hem the countries in. The American scheme of limited immigration had driven European nations in ujxm themselves. A new and jealous nationalism, bom of the Versailles Treaty and economic pressure, expressed itself in such nonsensical w ays as the revival of old and dead languages. For the first time in history, race pride and national pride were fused together. Nations called themselves races, which they were not, and set out to be sufficient unto themselves and independent of their neighbors.
Nothing but harm to Great Britain could come from this movement, which we could do nothing to prevent. International trade was our lifeblood. Shipping, banking, insurance, buying and selling, were our “invisible exports” by which we maintained our balance of trade. With our profits from these sendees we could afford to buy the products of other countries, and thus could let them into our ports without hindrance. We were the world's carriers and traders and. rightly or wrongly, we believed that our prosperity, our very lives, depended on free trade among the nations. There can be little wonder that the most sanguine of us were alarmed at the threatened contraction of world trade, and that prophets of doom abounded among us.
That these prophets have been confounded by events, that we have survived an almost complete dry mg up of
world trade, and that we are emerging from the most ruthless trade war in history stronger than we were when we were dragged into it, is due not to luck or to geographical accident but to carefully applied effort under wise leadership.
Stronger? Yes, for, having been thrown on our own resources, we have learned to use them and to see their value. Free trade, though profitable while it lasted, was always attended by the danger that we should neglect to hold our place as a great manufacturing country. Compelled to adopt tariffs, we have had to discover our industrial capabilities, and have developed our industries to a degree hitherto unknown.
British workshops actually employ more hands today than they did in the boom years of free trade. Nor have we lost our place as a trading nation. Although the volume of trade has declined, we are still the world's greatest exporters and carriers. Our banks and insurance companies are as sound as ever they were. And if prosperity returned to the world tomorrow, we should be better equipped than any other country to seize the new opportunities.
I do not lose sight of the stagnant, grass-grown shipyards of Newcastle and Belfast, or of the Lancashire looms made idle by Japanese competition; but I hope to show that our gains outweigh our losses.
Our recovery has been deliberately planned and carried out by easy stages, with very little friction and with much less ballyhoo than one might expect so sweeping an industrial revolution to demand. Instead of a National Recovery Act on the Roosevelt model, suddenly imposed, we have a closely interlocking system of quotas, codes, marketing boards, price-fixing devices, and safeguarding regulations, which have been applied so gradually that they have barely disturbed the even course of the average citizen’s life. There has been no great social or economic upheaval; the lives of the majority of British people run as smoothly as ever, and more safely than at any time since 1914.
All Working Together
MOST REMARKABLE of all, the work has been accomplished without sacrifice of individual liberty. No law abridging free speech or the freedom of the press has been passed. The right to demonstrate en masse for or against the Government has been upheld daily in Hyde Park and in every market place up and down the country, and in the traditional British manner. There has been no disorder. The recent so-called hunger march to London was not a phenomenon of the depression but one of a series of such marches that began more than thirty years ago; and it was one of the smallest of the series. The marchers arrived, and after a mass gathering as good-humored as any Saturday football crowd, and much less noisy than the annual Cup Final, they went home.
Cinemas are booming. London department stores report a record year’s business. We have just finished the greatest football season in history; crowds and takings throughout the season have been larger than ever.
I mention this only in order to complete the picture of Britain as the country that has kept its head; that has come through an economic revolution stronger than it went in; that has held together, without a thought of panic, in the face of direst danger.
How was all this brought about? Not by our diabolical cleverness surely. Nobody would dream of calling us a clever nation, or our Cabinet a Brains Trust. But the achievement cannot be dismissed as a lucky miracle.
It has all come to pass in less than three years—since the summer of 1931, when Viscount (then Mr.) Snowden, in a startling speech, made the country aware of its peril and called it to action. The Labor Government, in which he was Chancellor of the Exchequer under Mr. MacDonald, was without a working majority. Even if its personnel had been of the right sort to deal with such a crisis, it lacked the authority to take the decisive action that was necessary.
Only a great national effort, skilfully applied, could avert calamity; and only a strong Government, free to act firmly and quickly, and returned by the people for that express purpose, could make the effort. Snowden, MacDonald, and other Labor leaders put country before party and resigned. At the General Election they were returned as leaders of the National Government, largely Conservative, but containing members of all three great parties.
The National Government was swept into power on a wave of patriotic enthusiasm. There had been no such display of national feeling since the end of the war. Expressions of patriotism, indeed, had been unfashionable during the years that had looked like prosperous years but were really years of drifting. Now, suddenly, flags came out of attics and were flown in the streets. Cinema and theatre orchestras played the whole of “God Save the King” at the end of each performance, instead of rushing through the first few bars as a perfunctory signal that the performance was over. The King’s portrait on the screen brought crowds to their feet, cheering. Noel Coward’s “Cavalcade,” at Drury Lane, taught boys to whistle “Tommy Atkins.” Bands even played “Rule Britannia”—an almost forgotten tune to most grown-ups, and a new one to most children.
That did not last. It never does in Britain. On the rare occasions when we bubble over, we surprise ourselves and then retire into our shells. But that was the spirit in which we went off the gold standard. We felt it not as a defeat but as a call to arms. After all, we had been off the gold standard before, as an accident of war, and had only returned to it in 1925. Now we realized that the return had been premature, and that the mistake had been costly. Mr. Snowden’s Budget speech, in which the nation’s financial plight was revealed, was a shock to the nation. It showed us where we stood.
And after that one patriotic yell, to remind ourselves and the neighbors that we were all together in this, we settled down to work. Without complaint and without highsounding talk about the national destiny, we went on paying higher taxes than any other people on the face of the earth, and faced without grumbling the prospect of paying even more. Although to the man in the street the balancing of the Budget was a mysterious process, he realized that it was something that must be done, and he undertook to do his part. One result, three months after the General Election, was a rush to pay income tax before it was due. Before the end of December there were actually queues of taxpayers waiting at the Inland Revenue offices to pay installments due in January.
An Encouraging Budget
rpiIE TRANSFORMATION of Great Britain from a frec trade country to a country of high tariffs had begun two months earlier, with the passing of the Abnormal Importations (Customs Duties) Act and the imposition of a fifty per cent ad valorem tax on cutlery, typewriters, woollens, stockings of silk and artificial silk, gloves, perfumery, cosmetics, and men’s and boys’ suits. Some of these things had been taxed before, but not effectively, under the Safeguardings of Industries Act, which had been a shuttlecock of Chancellors of the Exchequer for years. The word Protection was studiously avoided for the time being, in deference to the large body of Die-hard opinion that could not bear the sound of it. The new scheme was called AntiDumping, because it was applied only to goods that had been imported in abnormal quantities.
Other Anti-Dumping orders followed, and in February, 1932, came the first avowed measure of Protection—the imposition of a ten per cent tariff on all imported goods, including iron and steel manufactures, flour, oats and barley, and expressly excluding a few commodities which continued to enter duty free. On March 1, 1932, when the Import Duties Bill received the Royal assent, Britain openly threw Free Trade overboard and launched the experiment of Protection.
We abandoned the fiscal system under which, in the nineteenth century, we advanced to the forefront of the nations. Whether we can ever return to it or not, dewnds on what happens abroad as much as on what happens at home. As we were forced off the gold standard, so we were forced to adopt Protection, of which even lifelong Free Traders like .Sir John Simon now recognize the necessity. Having committed ourselves to tariffs, we have made them high. Today we arc one of the best—or, if you like, most— protected countries in the world. We have learned to use our tariffs as weapons in bargaining with foreign countries and as levers in negotiating. It was as a high tariff country that we went to the Ottawa Conference, and since then the results of that conference have influenced all our dealings with foreign powers. Our subsequent trade treaties, such as the recent treaty with Russia, contain clauses insisting that no agreement with a foreign power can conflict in letter or spirit with the Ottawa agreements.
Those who predicted an enormous rise in the cost of living as a result of tariffs have been made to look foolish by the actual results. If food prices have risen, the fractional increase is imperceptible even to the poorest. Clothing prices and rents have dropped. This is due, of course, to the obstinate refusal of prices in all countries to obey measures designed to put them up. The fact remains that tariffs have brought no hardship to either British workers or British unemployed, but, on the contrary, have provided work for many thousands who otherwise would have been on the dole.
The only citizen who has “taken a cut” is he who possesses what used to be known as a fixed income; the civil servant, the teacher, etc. Here as elsewhere the rentier class has had to revise its notions of the proper return from “safe” investments.
The automatic five per cent of the boom days has gone, and a series of Conversion Loans has relieved the taxpayer of the great burden of paying an uneconomic rate of interest on public debt.
It is generally agreed that the conversion of our five per cent Government loans to 314 F*-r cent was the greatest series of financial transactions ever attempted by any Government.
By the conversion of £2,000,000,000 of five per cent W ar Loan bonds alone, we saved annually some £23,000,000. The conversion loans were due to confidence in the stability of British finance and saved taxpayers millions of pounds. Today, Government “gilt-edged” stock is at a premium.
With unemployment falling, revenue rising, and trade steadily growing, there was little wonder that Chancellor of the Exchequer Chamberlain, was able on April 17, 1934, to present the most encouraging Budget of recent times.
Reduction In Unemployment
^¡^E HAVE unemployment.
Mr. MacDonald is reconciled to the prospect of our always having about 2,000,000 idle would-be workers to keep. Many of us, however, agree with the unemployed that it would be better for them and for all of us if they were at work. Actually more than 700,000 who were idle a year ago are working in industry today—and this number does not include the many thousands who are on “relief” work or in vocational training centres. This reduction in unemployment naturally means a great saving to the country in lessening the "drain of the dole” on the national resources.
I use the word “dole” not in any derogatory sense, but because it is simple and comes easy. It is no more charity than any other insurance benefit jxnd at maturity is charity. The men and women who receive it have paid their premiums or as much of their premiums as the scheme requires of them. Part has been paid by their employers; and that, is just, since it is right that each industry should have some share in the maintenance of its own reserve of lalxir. A third share has been contributed by the State, in recognition of its duty to its citizens and its regard for its own welfare. If there were no unemployed the Chancellor of the Exchequer would have all that money, from all three sources, to play with.
Before and during the war, when there was less unemployment than now, the Unemployment Fund was self-support -ingand actuarial!/ sound ; nowit is not, and the Chancellor has to provide for it in each Budget. In the last twelve months the cost to the nation has Ix-en about £85,000,(XX), which is greater than the national cost of education. In addition, local authorities, filling their obligations under the Poor Law which has fed, clothed and sheltered the poor and helpless since the time of Queen Elizabeth, have spent millions on relief, bringing.the total to about £100,000,000. And that is more than we are spending on the Army, the Navy and the Air Force combined.
Nobody needs to starve. Anybody can have sustenance by merely applying for it. Even men and women who have failed to pay their unemployment contributions are entitled, under recent regulations, to the same benefits as the assured, after proving their actual need for it. This division between those who have paid for their benefits and those who have not has involved what is called the Means Test.
Some such test is regrettably but obviously necessary. It is not applied to people who draw the dole to which they are entitled under the insurance scheme, but only to those, who, having exhausted their benefits, apply for their extension. They are asked what property they own, whether they have banking accounts, and soon; but they are not called upon to spend their last £25, and the resources of other members of the family are taken into consideration.
It is this last feature that has roused most of the opposition
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How Britain Has Done It !
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I to the Means Test, but altogether the me: thods of tiie Public i Assistance CommitI tees, who apply it, are much less inquisitorial than those of the Income Tax collector, and much less pauperizing than the enquiries that are made into the affairs of applicants for relief in countries where unemployment insurance is unknown. And dole queues composed of men and women who have paid for their benefits, are less heartrending than bread lines. Our unemployed are paid in money, which they can spend as they like. W hat if they do spend some of it on cinemas and football matches? A little fun is good for morale.
And morale is high, even in the dole queues, where the talk is more of the search for jolis than of the benefits themselves. The money is paid at Labor bureaus, which are also Government agencies for putting men and women in touch with employers. In the last few months many thousands of men have gone to the bureaus to draw their money and have come away with their eyes shining because they have found something better—work. The “hunger-marchers” may be angry, but they are not hungry. They have only to march as far as their own local relieving officers, and they will be more than I fed.
I have mentioned vocational training centres. During the last eighteen months, in response to an appeal by the Prince of Wales, these settlements of unemployed men have been established in hundreds of , districts up and down the country. Some of them take the form of work-camps in rural surroundings; others are recreational, instructional, social and industrial clubs in the hearts of cities. All men who join these centres are volunteers. Many of them practise or learn such trades as shoemaking and repairing, carjxmtry, tailoring, coach-building, acetylene welding, even hairdressing and restaurant work. Others raise vegetables, or work at improving public parks and recreation grounds. Most towns provide free land allotments for unemployed men, and encourage them to market their produce.
It is perhaps too early to estimate the economic effect of these activities, but the moral effect is already pronounced. The fact is clear that the “dole” has not paralyzed the will to work. The British workman, even after years of unemployment, is still a skilled and willing craftsman.
Higher Standard of Living
TT W'AS recently stated in court that more j A than ninety jx*r cent of the goods on sale in British chain stores of the sort known in Canada as “five and ten,” were British-made. That could not have been said three or four years ago, before the flood of cheap goods from America, Germany, France, Japan, Czechoslovakia and Russia was checked.
This great change has not been wrought by tariffs alone, for even today the low-wage countries are able to offer us goods, duty
paid, at prices that compete with our own. What has brought it about is the belief of the mass of British people that our own products, at anything like comparable prices, are best, and their silent determination to “Buy British.”
They have been aided in this determination by the compulsory marking of all goods, under the National Marks Act. Everything that is not “British” or “Empire” must be marked “Foreign” or with the name of the country of origin. This system of marking, once the public became aware of it, was all that was necessary to set going the great “Buy British” campaign which closed our market to wide ranges of foreign products and compelled foreign manufacturers to set up factories here.
Four years ago there were more foreign cars than British on our streets. Today foreign cars are rare. It is no longer “posh” or “swell” to own one. British manufacturers, instead of taking advantage of the high duties to raise prices, have actually lowered them, and the British motor car is better money’s worth today than ever before. In a similar manner we have ousted foreign radio sets, electrical goods, and other products that threatened to swamp our industries.
Retail trade for the last year has been booming. An American observer recently was amazed to find the shops crowded and people eagerly buying “everything from old masters to electric refrigerators, from beer to ocean cruises.” In one week one London store has added 5,600 customers to its books. Last year Britain’s 700,000 shops took nearly £2,500,000,000. Even more encouraging is the enormous increase in the number of shopping transactions; it shows that more people are able to buy and are buying. They are buying British-made gloves, clocks, hosiery, vacuum cleaners and radio sets ¡although these could be imported, duty and carriage paid, at the same or lower cost.
Empire produce is edging out Belgian, Italian and French. Danish butter and bacon and Argentine beef, formerly a oneway traffic, now meet British goods going out. Every hundredweight of butter and beef imported is bought with British coal and manufactured articles.
Accompanying and supporting this mass effort, the Government has carried out widespread schemes of reorganization in all the great industries, notably in agriculture, which we are always surprised to find is still our principal industry. Production of wheat, milk, pigs, and other agricultural commodities has been put into the hands of various boards answerable to the Government, and marketing is so controlled as to ensure fair prices to producers and public. The work of these boards is of great value in regulating imports. The production and distribution
of coal, too, are similarly controlled. Just as in America under N. R. A., the wasteful methods of cutthroat competition have been abolished, but much less suddenly, more smoothly, and indeed almost unnoticed by the mass of people.
Another successful piece of Government enterprise that has been carried out during the years of depression is the grouping of the electric supply services of the country under the Central Electricity Board, at a cost of £27,000,000. On April 1 this year the linking up of the Central England region with this scheme added 7,311 square miles to the area controlled by the board. Its giant “grid” is now operating in six of the nine areas in which regional schemes have been develojjed to form the national system. These six areas serve districts with a total population of 35,000,000.
Steel pylons, similar to the towers that carry the Canadian Hydro-Electric cables, now stride across the British countryside, carrying light to the smallest villages and the remotest farms. Pretended lovers of rural beauty may deplore them, but their march is as irresistible and inevitable as that of Time itself. They have a grey and ghostly beauty of their own, and painters may find that they fill the place of departed windmills in our English landscape. They complete the revolution that automobiles and motor buses had begun in rural Britain.
The countryside has been opened up to everybody, and none of the dire results that were predicted have followed the invasion. Little or no beauty has been lost, and its delights have been made available to the millions of city dwellers.
Thanks to the motor buses, the road houses, and the petrol stations beside ancient inns, the countryman is no longer a yokel. The squire and the parson may regret the change, but the farmer’s boy welcomes it, and so do his mother and sisters who do their shopping in the city.
No other country has such transport facilities. Here, too, the Government has taken a hand, with district tribunals under the Ministry of Transport to fix fares, allocate services, and protect conflicting rights, such as those of the railway companies and those of the public.
Great new suburbs now surround all the large towns and run for miles along ancient roads. London is now ringed by widelighted boulevards and “by-passes” for motor traffic. New factories, shining with concrete and chromium, stand on the sites of ancient smithies. They are making goods that were formerly made abroad. For every industry that has decayed—as most industries must in time, depression or no depression—a new one has sprung up.
If you wish to see Dickens’s London, it is still to be found, as quaint as ever. But new London lies all about it—a London brighter, busier, and, I think, happier. And what has happened to London has happened in some degree, to all the cities.
Certainly the warning of 1931 has done us more good than harm. For the mass of us the standard of living is higher than before the depression. There are more luxuries in our homes; we are buying more and better food and clothing. Our houses, and especially those of the working people, are roomier and better built than ever before. There are at least three times as many bathrooms in England today as there were five years ago. Hundreds of thousands of artisans’ homes have been built by local councils, with Government aid.
More than 6,000,000 wireless licenses are in force at this moment, nearly a million more than a year ago. We are even becoming telephone-minded—which nobody, knowing our ways, could have predicted. Thanks to a campaign by the Postmaster-General, every issue of every local telephone book is fatter than the last.
Month by month our exports rise and the unemployment total drops. It is still formidable, but not alarming. It is hard to think of anything that could alarm us now.