New Blow to the Chin

While a holiday calm settled over most chancelleries and financial centers, Britain had no respite from the Labor government's continuing difficulties with business and the badly shaken economy. Last week the Bank of England was forced to move in for the second time in as many weeks to support the pound against renewed selling pressure abroad. Foreigners, not wanting to be stuck with pounds in the event of devaluation, were finding buyers in advance for pounds that they expect to receive over the next few months. The central bank had to use as much as $56 million of its dwindling reserves to prevent another major run on the pound. Even so, fresh rumors of devaluation kept the world on edge and Laborites on the spot.

Labor also suffered a new blow to its battered chin when Dr. Richard Beeching, the able, cost-conscious chairman of the British Railways Board, resigned abruptly in a dispute over how to run the country's deficit-plagued nationalized railroads (1963 losses: $340 million). A trained physicist with a no-nonsense attitude toward inefficiency, Beeching was technical director of Imperial Chemical Industries when the Conservatives called him in 1961 and gave him a free hand to put the rails on a paying basis. His unsentimental and sound plan: close 352 branch lines, 5,000 miles of track and 2,363 stations, and trim the payroll by 70,000 workers over five years.

The Tories let him proceed, and he closed down 121 branch lines-most of them in rural areas, where he aroused angry opposition. But the plan was too drastic for the Laborites, who had never warmed to Beeching. They fussed when he took over, noting that his $67,000 salary was more than twice that of the Prime Minister and of the heads of other nationalized industries.

As he put his plan into practice, they feared that he was trying to become a railroad czar. In the House of Com mons last week, Minister of Transport Tom Fraser said that Beeching's offer to make a comprehensive study of all transportation problems "would not be practical," and Labor members demanded that unions be brought in on decisions to lay off workers and shut down lines. Beeching would brook no such interference. When he failed to win assurances of a hands-off policy, he dumped the whole railroad problem into the lap of Labor.

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