Mr. Chamberlain Talks Of Buoyancy
Its Limits And Its Prospects
By Our Industrial Correspondent The Chpsncellor of the Exchequer has a lot to say about the revival of industry, for which he wants to take part of the credit. He tells us of a buoyancy reflected in the yield of taxes that enables him to finance the new armament programme with only small increases in the rates of taxation. There is no need here to follow him into thts details of his figures any more than into his claim to be the author of the impr ovement.
We mcly agree that as compared with the worst point of the slump there has been some recovery. What we want to know is where the improvement has lain and whether it is likely to continue and become general.
WHERE READJUSTMENT STICKS
The first Thing to note is that there has 3een no important recovery in foreign rade. It is true that last year exports in:reased relatively to imports to a point where for the first time since 1930 there was what the City calls a "favourable salance of payments" of appreCriable magsitude. But once upon a time this salance amounted to about 150 millions of sounds a year.
Home Markets for Preference
This was made possible by the fact that 'oreign countries were paying for our pods out of British loans to them. Forign lending is now almost non-existent md our inflated foreign markets have ranished with it. Mr. Chamberlain's ariffs have checked an excess of imports sver exports but no more. In so far as here has been any considerable recovery t has been in the home market.
This, however, need not be regretted, though it distresses the City which thrives on lending abroad. A swollen foreign trade causes excessive industrial specialisation in the nation as a whole, such as created the great cotton, coal, iron and shipbuilding areas, now scheduled as "distressed." All-round production for the home market gives a better balanced national economy.
Changes Arrested
Unfortunately there are indications that hange in this direction is already sticking. Cake, for example, the transfer of workers mm the heavy to the light industries which has marked it. One of the signiicant figures is the proportion of women workers, for the light industries contain ar more operations on which women can ie employed. The proportion has increased. ince 1923 but in the last two years the in
rease has been arrested. (It is not sugested that the increasing employment of women in industry is in itself a good thing; he figure is only quoted for the light it hrows on the change in question.)
A similar tale is told by the general figures for unemployment. The government is never tired of telling us that the number of persons in employment has reached unprecedented figures, but they omit to explain that the increase is largely accounted for by the entry into industry of boys and girls born in the years following the war when the birthrate temporarily shot up. The number of those out of employment remains not far from the two-million mark.
The Special Areas
It is not in the least the intention of this rticle to crab such improvement as has eally taken place, but only to see it withut the government's camouflage and to ecognise its limitations. We are then in better position to ask what are the causes ,f this contipued "stickiness," and to seek remedy. (It will be remembered that it ; the failure to expand adequately producion for the home market, not the foreign sarket, that we are concerned with here.) First, then, there is the special and abormal "stickiness" of the special areas.
was pointed out in this column some reeks ago, the transfer of cotton, coal, and on-workers to production for the home sarket presents difficulties not to be overome by mere planning, however bold, or sere money, howes et plentiful. The older eneration of them are set in a traditional nd limited skill and segregated locally, nd both older and younger generation are ow suffering grievously from physical and soral deterioration.
Maintaining the Unemployed
Next comes the burden upon industry f maintaining the unemployed, whether hronic or temporary. As unemployment enefit is now financed, unemployment auses unemployment; for the monetary ast of the maintenance ultimately falls pon industry and enormously increases S costs relative to world prices. '
There is also the cost of the other scial services. The pros and cons of sese from the social and moral standoint do not concern us here. The point ) be noted is that their monetary cost on a scale which was reached under >tally different monetary conditions in se years immediately following the war, hen continued inflation had brought bout an expansion of all expansible soney payments and of people's ideas of hat the country could afford.
Then came the report of the Cunliffe Committee recommending deflation and a return to the gold standard at the old parity as soon as possible, and the installing of Mr. Norman at the Bank of England to carry it out. The incomes of all classes except the renders were crushed down, but the social services that had to be paid for out of them were not appreciably diminished and in some cases were greatly increased. A torrent of bankruptcies and an uprush of unemployment figures by hundreds of thousands, and eventually by millions, marked the progress of this policy which, with a temporary setback in 1931 when the pound sterling had to be devalued by about 40 per cent., has been pursued ever since.
Incomes Reduced
To this must be added the fact to which Mr. Churchill referred in the House of Commons last week, that the income from foreign investments which used to be one of the chief supports of the social services has fallen by 25 per cent.
Finally, in an attempt to adjust itself to these conditions, industry has been driven more and more to " rationalise" itself, and the first effect of this is to throw more men out of work for industry to support. The second stage of which the economists tell us, when cheapened production leads to increased sales and so to the reabsorption of the displaced men, has not been reached except by a few favoured industries, such as the motor trade. This is largely because when industry has to pay for the keep of the men displaced the cost of production for industry as a whole is not cheapened.
A Deadlock ?
Once more we are brought back to the apparent deadlock: industry cannot absorb the unemployed because it has got to support the unemployed. Ard to this the retort is made that the deadlock is an entirely artificial one brought about not by the nature of things but by monetary restrictions which could and should be removed.
The stupendous dislocation caused by the Cunliffe-Norman policy is a particular case of this, but some would extend the statement to cover the whole system by which money is treated as a commodity and the supply of it as a private monopoly.
The extreme view is that if money were issued like tickets to enable potential consumers to buy all the goods that could be produced there need be no restrictions on industry, nor taxes for social services, and the more unemployment the better, becausc we could all have a share in it and keep our incomes at the same time.
While by no means subscribing to that view the idea that the maintenance of the unemployed could be financed in such a wa-..• as to break the vicious circle does contain an element of truth, and it is that element which we shall continue to seek in these columns.
THE HOLY SEPULCHRE A Reproduction in France
In order to produce an atmosphere as much as possible like that of Jerusalem, for the Corpus Christi ceremonies—which date back a thousand years—to be held on June 4, a copy of the church of the Holy Sepulchre has been constructed at Angers. This building is surrounded by olive and orange trees, cyprus and cedars, which have been bought to Angers from Palestine. A French prelate, Mgr. Potard, is responsible for its construction, having made 63 pilgrimages to Jerusalem to take measurements and make the necessary arrangements.
The cross on top of the church will be floodlit on great occasions. Inside, the building, as at Jerusalem, is divided into two parts, the first "the room of the angel," in memory of the apparition on Easter morning. The second contains the reproduction of the Holy Sepulchre, with a slab of white marble an inch thick and weighing 1,000 lbs., fashioned by the Christian workers in Jerusalem.