Dollars & Dockers

Britain's Labor government, locked in dubious battle with the obscure forces of a dollar-exchange crisis, had to turn this week to a more tangible danger. On the decision of his cabinet, King George VI proclaimed a state of emergency to meet a two-week-old strike on the London docks. Not since the General Strike of 1926 had a British government taken such drastic action in a labor dispute.

The strike had begun when dockers refused to unload two ships involved in a Canadian strike. The walkout on British docks persisted and spread. Prime Minister Attlee said the London stoppage was a maneuver in Communist "wrecking tactics." Attorney General Sir Hartley Shawcross called it "economic and political treason." The government ordered troops to load the ships.

Richard Barrett, secretary of the Dockers Union, admits he is a Communist. If the strike's goal was, as Attlee hinted, to hurt British exports, the Communists could hardly have timed it better.

Delicate Distinctions. Five days before the King's emergency proclamation, a grim House of Commons listened glumly while Chancellor of the Exchequer Sir Stafford Cripps read from eight pages of foolscap. Almost every one of the 20 minutes' worth was bad news. Britain's dollars were going down the drain too fast; $261,950,000 had been used up from the end of March to the end of June. Only $1,636,180,000 was left--well below the $2 billion reserve the British had considered the minimum for safety.

A month ago, Cripps revealed, he had issued a secret order stopping all new dollar purchases. It would stay in effect at least three months. A further period of "restraint and restriction" might lie ahead; that could well mean less food and tobacco from the U.S.

At a conference of Commonwealth Finance Ministers in London this week, the British planned to spread the austerity by asking all of the Dominions to restrict dollar purchases. Economist-Politician Cripps, with one eye on the dollar and the other on the general elections due within a year, walked a tortuous path. He and other Western politicians faced a delicate job in telling the public just how big the crisis was.

Cripps called it a "serious development," but said it was unfair to compare it with the convertibility crisis in the summer of 1947. In Washington, U.S. Secretary of State Dean Acheson termed it "not a great crisis." On the contrary, British Fuel Minister Hugh Gaitskell referred to "this moment of supreme crisis," and Australian Prime Minister Joseph B. Chifley said it was a "pretty desperate situation."

Cripps wanted to jar the British people into working harder; at the same time he wanted to restore confidence in the pound sterling--Cripps still said flatly that he would not devalue the pound.

Delicate Socialism. Socialist spokesmen made clumsy efforts to explain the crisis in terms that would not reflect discredit on Socialism. The New Statesman & Nation agreed, blamed the "willfulness" of the U.S. Congress for "abject failure to counter the American slump which is the prime cause of ... the drain on our gold reserve." To this the London Economist had a tart reply: "The level both of general demand and economic activity in America is still a long way above any definition of normal that the world has ever known before, and if British socialism cannot adjust itself to as minor a quaver as this, then it is too delicate for the real world."

U.S. Secretary of the Treasury John* Wesley Snyder was in London last week to answer any hints of U.S. blame for Britain's troubles. Snyder's reaction to the Laborite buck-passing was: "Recession? What recession?" He stoutly denied bringing pressure to bear on the British to devalue their pound.

Snyder discussed the crisis with Cripps and Canada's Finance Minister Douglas C. Abbott. The three issued a statement couched in what Cartoonist David Low calls "economists' double-gab" (see cut). It offended nobody, offered no specific solution, used such terms as "aggravation of deep-seated maladjustments." Further conferences would be held in Washington early in September, before the meeting of the International Monetary Fund. The aim would be "a pattern of world trade in which the dollar and nondollar countries can operate together within one single multilateral system."

That would be fine, if anyone could figure out how to do it. Meanwhile, Britain's government was going ahead with a restrictive empire trade policy and with bilateral barter deals to get food from Argentina and Russia.

-The official British Treasury communique originally called Snyder "James." Said a Treasury spokesman: "It was an inadvertence--possibly even a bloomer."

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