Gravel for the Wheels

In a London theater last week a quartet of actors, togged out as Prime Minister Clement Attlee with his Ministers Sir Stafford Cripps, Ernest Bevin and Herbert Morrison, sang a doleful parody of a tune from Oklahoma!:

Oh, what a terrible mornin', Oh, what a terrible day; We gotta horrible feelin' Dollars ain't comin' our way.

In real life, boarding the Mauretania en route to the Washington conference on the British dollar crisis, Ministers Bevin and Cripps tried to be less doleful. They linked arms and beamed for cameramen. Bevin remarked that they were on "one of the most important missions in history." Someone yelled from the dockside, "Bring us back some dollars!" Bevin said: "I would ask the public not to expect to find the solution in a moment." Sir Stafford smiled toothily at his colleague's statement. "Good," he applauded. "Well done."

A Matter of Health. The two statesmen did not feel as chipper as they looked. For one thing, their personal health was not good. Just back from a Swiss resort where he had been treated for a digestive ailment, Cripps took austere vegetarian meals at a small table in the ship's dining room. As a fellow sufferer under doctor's orders, Bevin dieted in his cabin--nothing but boiled fish, poultry, milk puddings, custards. Between meals they wrestled together with the bigger problem of Britain's economic health.

For guidance and argument, Bevin & Cripps had a 15,000-word brief approved by the British cabinet. When they reached New York this week, they would have further briefing from Sir Henry Wilson Smith, the chief of their advance working party in Washington.

By the time they sat down with U.S.

Secretaries John Snyder and Dean Acheson, the British envoys would be primed to show that Britain's dollar shortage could not be blamed primarily on her costly social services or nationalization plans. It was the cumulative effect of a powerful historic cause.

A century ago, by virtue of her maritime and industrial supremacy, Britain had been the world's unrivaled banker, investor, manufacturer, middleman, shipper. The earnings of her exports, services and investments abroad gave her security and strength.

Then, in the last decades of the 19th Century, a mighty competitor arose to threaten British trade. U.S. productivity caught and then far surpassed Britain's. The leadership in world finance and trade passed into American hands. Declining Britain could no longer earn enough abroad to pay for what she needed to buy abroad to maintain her living standard.

Bevin & Cripps would argue that Britain's ultimate aim, like America's, was a competitive, freer-trading world outside what Bevin calls "the ruble area." But they would also defend Britain's present bilateral trade deals with other countries (e.g., Argentina) as an unavoidable expedient so long as the dollar shortage lasts. They would have a fairly shrewd notion of the American climate of opinion, of what they might ask and expect to receive.

A Matter of Tinkering. It was generally agreed, that the conference would produce no definitive, radical or inspiring solution. It seemed likely that a series of short-range adjustments, like a shovelful of gravel under a skidding wheel, might help pull Britain out of the immediate financial mudhole in which she was floundering. There would be more mudholes ahead; to meet them, the conference might set up a long-range approach through a permanent Anglo-American staff for economic cooperation.

Probable short-range adjustments:

P: Increased stockpiling by the U.S. of strategic raw materials from the sterling area, particularly tin and rubber from Malaya--to be bought with dollars.

P: Simplification of U.S. customs procedure. The British object to technicalities which classify sheep shears as a "surgical instrument," and by which rugs with fringes on them get charged as lace because the law puts fringes in the lace-and-trimmings category. The U.S. customs maze is well-nigh impenetrable to the would-be British trader without customs-broker guidance, which adds to the cost of British goods.

P: Reduction of more U.S. tariffs. Though the general tariff level is down to the 1914 mark, the British insist that some of their best items for export cannot compete in the American market because of high discriminatory duties. For example, duties on woolen and worsted cloths can amount to 40 to 45%, clocks up to 150%, china tableware 35%, chamberpots ("sanitary earthenware if of vitreous china") 60%.

P: More 'U.S. investment in the sterling area, particularly Point Four colonial development. Since the defense costs and dollar deficits of Egypt, India and Southeast Asia are a drain on the British economy, the U.S. might be asked to share the burden in the general interest of Middle and Far Eastern security.

A Matter of Imagination. There were other possible adjustments, on which the British and American climates did not yet agree. It was most improbable that a U.S. loan would be asked or offered. It seemed that no concrete plans to reduce British production costs and increase industrial productivity would be laid on the conference table.

Cripps appeared still dead set against devaluation of the pound ("A rude word not allowed to be scribbled on the Treasury walls," cracked one British official). But more & more, in the face of Britain's dwindling dollar reserves, British opinion itself was pressing for devaluation. It was argued that devaluation was inevitable anyway, and that its delay had become a "psychological" obstacle to traders in the sterling area. London's Economist summoned British "statesmanship" to meet the crisis with "imagination":

"The disasters of falling living standards," declared the Economist, "of a collapsing sterling area and a disintegrating Commonwealth against which the government wishes to defend the country are implicit in the policies they are still pursuing. With or without American assistance they will in the near future be compelled to devalue, to cut costs, to increase output and to tackle the problem of productivity.

"The choice is not therefore between 'accepting American dictation' and the continuance of an independent British line. It is between taking the steps necessary to make the British economy solvent now, with America's active cooperation, or taking them in six months' time in the middle of economic disaster and with America perhaps contributing no more than a melancholy 'I told you so.' "

The U.S. could help Britain--a little.

Britain could help herself--a lot. But Britain would not be saved by cutting the U.S. duties on "sanitary earthenware if of vitreous china."

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