Lancashire Let Down

With pained aplomb the leading yarn makers of the Empire held a quiet mass meeting last week in Manchester. They had given His Majesty's Government sleepless nights by closing their mills, throwing 50,000 of the King's subjects out of work (TIME, Aug. 13). This was their decorous way of hinting that the British Embassy in Berlin had better get busy. They had shipped -L-1,500,000 worth of yarn to Germany in all good faith. They had not been paid, as bland German importers pointed out that the Reichsbank had blocked all such transfers to conserve Germany's foreign exchange. What had the Embassy done about that?

To the gentlemen of the British Foreign Office the Manchester mass meeting was, after all, only a gathering of persons in trade. Stiffly the Foreign Office reported that the Berlin Embassy had just obtained an agreement under which the Reichsbank would pass payments due on British goods imported into Germany after Aug. 20, 1934. This agreement did not cover the -L-1,500,000 already owing on yarn. Also it was "terminable without notice in the event of endangering the stability of the mark." In short. British diplomacy had let Lancashire down.

Grimly the cotton men passed a unanimous resolution, bound themselves to sell nothing more to Germany until their arrears are paid up and notified His Majesty's Government that their mills will stay closed indefinitely. Same day in Berlin that master bluffer of international finance. Dr. Hjalmar Schacht, President of the Reichsbank and newly created ''Economic and Financial Tsar," suddenly issued a manifesto to the effect that "Germany, if necessary, can dispense with all raw material imports." This presumably was the opening move of Dr. Schacht, who always starts from zero, in a game to jockey the British cotton men into consenting to part payment on what they are owed and speculating on further shipments to Germany.

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