The Bad News

"Work or Want" said the Government's billboards. Last week Herbert Morrison, Deputy Prime Minister, grimly told the House of Commons that no matter how hard Britons work, they will still want.

In the next twelve months, he said, Britain must import $6.8 billion worth of goods, even to keep something like her present austere standard of living. In that period Britain cannot hope to earn by exports more than $5 billion. Even by using up the rest of the U.S. loan, Britain would end up in the red. And in less than a year, there would not even be the loan to fall back on.

Slowly, with no trace of his cockney cockiness, Morrison, pale and ill at ease, took Britain to the edge of the abyss and made her look down. "If we cut imports too far," he said, "great [downward] adjustments become necessary in our production and in our whole standard of living. But we cannot indefinitely go on importing what we cannot pay for, and I must tell the House quite frankly that it may come to this--and a tragically bad day it would be for us, for Europe, and for the world's best hopes of prosperity."

No More Dollars. Britons had known that they were badly off, but this blunt statement was a shocker. Wasn't "The Loan" supposed to see them through the first five postwar years of reconstruction? What had gone wrong?

By the first anniversary of the loan this week, Britain had spent 60% ($2.2 billion) of its $3.75 billion credit from the U.S. The money had gone far faster than anyone expected when the loan was negotiated. One reason was that, since then, U.S. wholesale commodity prices had risen about 30%.

More serious than the drastic cut in the loan made by U.S. inflation was the fact that most of the money had gone for consumers' goods, rather than for equipment that would allow Britain to produce more. In the first six months of the loan, Britain had made U.S. purchases in the following proportions: tobacco 32%, food 24%, oil 12%, raw materials 11%, films 5%, ships 3%.

Why had the British not bought more machines? They had not been able to buy them. U.S. manufacturers were filling a big backlog of domestic orders. Britain, for example, tried this year to find 100 heavy-duty tractors, could get less than six. Searches for strip-mining excavating equipment and woodworking machinery drew a blank.

Hard-boiled and well-fed economists might contend that the British were wrong to spend so much money on food and tobacco. But even with the dollar food purchases, the British diet had remained on the thin line that divides discomfort from malnutrition. If British workers had eaten less in the last year they probably would have produced less.

No Card. Another possible drain on "Loan" dollars begins this week as Britain becomes obliged to convert into dollars some of the sterling credits held by foreigners (TIME, June 2).

As the pressure for dollars rises and Britain's supply of dollars dwindles, how is Britain to feed her people next winter? Recently, Food Minister John Strachey made an optimistic speech pointing out that world crop prospects were good. But the expected food surpluses were in areas where it takes dollars, not pounds, to buy.

What was the British Government going to do about the onrushing crisis? The way Foreign Secretary Ernest Bevin had snapped up the "Marshall approach" left no doubts where his hopes lay.

And if that failed? After needling Morrison for failure to produce any domestic plan to meet the crisis, young Tory David Eccles buttonholed Morrison in a House of Commons lobby. "Haven't you got any card up your sleeve?" he asked anxiously. Morrison shook his head sadly and replied, "Have you?"

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