On the Brink

In the summer of their discontent, Britons were escaping to the quiet glories of the English countryside. They rattled along in tinny Austins and on sputtering motorbikes, queued up for trains and buses in ideal summer weather. But toward this happily perspiring pastorale, occasioned by the traditional Bank Holiday weekend, swept an oppressive storm. Britain was again in crisis, the gravest in the series that began with peace.

Poison for Mrs. Attlee. At bottom, the crisis was economic. Britain was still a land of national hunger. British labor, especially the all-important miners, were simply not producing in sufficient volume. Britain was buying more goods abroad than she sold; the money with which to make up that deficit (the $3.75 billion U.S. loan) was running out much faster than it should; Britain had only $1 billion left and it was going fast. But suddenly from the steadily mounting pressure of impoverishment sprang a political crisis.

There was torrid talk about Labor having to seek a coalition with the Tories. People whispered of convulsions within the Labor Cabinet (Shinwell was about to be thrown to the dogs. Bevan was ready to move in where Bevin feared to tread). Cried Ernie Bevin: "My God, working men and women! This is the first Labor Government you've got.* Don't let it fall!" A gust of anti-Attlee anecdotes swirled up. Said one Labor minister: "If you told Attlee, 'Look here, sir, I've just put strychnine in your wife's coffee,' he would say, 'Quite, quite,' and go on to something else."

But Prime Minister Clement Attlee was at last frightened out of his quite-quite attitude. He called a Cabinet meeting--the most momentous since Labor was elected to plan Britain's future in the Socialist mold.

Survival v. Socialism. The men around the table could blame much, but by no means all, of Britain's plight on the war. They had bungled. They had never made up their minds whether they should give priority to housing or to food production. They had disastrously overestimated Britain's ability to export, underestimated her need for dollars. They had concentrated on their pet nationalization schemes instead of all-out production. They had fulfilled the long-standing Socialist promises of higher pay and shorter hours at a time when production costs needed to be lowered and workers needed to work harder.

Now Clem Attlee in effect told his colleagues: survival (i.e., increased production) must come before socialization. Health Minister Aneurin Bevan and Fuel & Power Minister Emanuel Shinwell, both far-left Laborites, still want socialization immediately. But most of the ministers rallied to Attlee.

Stunned Silence. Then, at a meeting of the parliamentary Labor Party, Attlee decided to tell all. In preparation, Labor whips talked hard & fast about party unity to bucking backbenchers. When Attlee unpacked the details of Britain's crisis, his listeners were stunned into silence. The whips had framed a party resolution expressing confidence in Attlee; it was passed unanimously.

Afterward, Attlee met a miners' committee, including Mine Union Boss Arthur Homer, a Communist whose first loyalties might not belong to his country in crisis (TIME, July 28). Attlee pleaded: would the miners work an extra half hour daily, or an extra half day weekly? The men from the mines agreed--if the Government promised not to revoke the newly granted five-day week.

Next of Attlee's emergency meetings was a huddle with leaders of the Trade Union Council. Asked Attlee: would the unions again accept wartime regulations forbidding workers to leave essential industries; would they please stop being stubborn about keeping able and willing foreign workers out of the factories? The union leaders agreed. But they still had to make that agreement stick with their membership, including a sizable bloc of Communist shop stewards.

The Attlee Approach. Attlee had other plans. Already dangerously low imports would be further cut--and that meant even less food and fripperies for austerity-greyed Britons. Not only luxury imports, like films and tobacco, would be reduced to save dollars, but raw material purchases as well. That meant a further danger to British production which alone, in the long run, can get Britain the dollars she needs.

Britain would reduce her armies and overseas commitments. That meant further shrinkage of Britain's world prestige, and even more world responsibility for the U.S. It also meant that Britain would contribute less to Europe's general recovery under the Marshall plan. Britain could no longer afford to share Germany's occupation costs on a 50-50 dollar basis with the U.S.; the British suggested that they pay their share in pounds.

To Paris flew Sir Stafford Cripps for a conference with U.S. Under Secretary of State Will Clayton on the leftovers of the U.S. loan. The shocking fact: if Britain keeps withdrawing funds at the present rate, nothing will be left by September. Two of the loan's agreements add to the-dollar drain: 1) the "nondiscrimination" clause, which forces the British to buy goods in the U.S., for dollars, which they might get elsewhere more expensively but for pounds; 2) the "sterling convertibility" clause, which forces the British to convert into dollars some of the sterling credits held by foreigners (TIME, June 2). Attlee hoped to get both these clauses revised.

The Attlee approach was, in the words of London's Economist, "the planners' last chance." It might end much of Labor's vague mismanagement. But by Attlee's own estimate, it could only carry Britain through the winter to face another, even bigger crisis in 1948. At that time, many observers believed, Britain would have to tap her last gold reserves and thus stand on the brink of national ruin.

* Actually, Britain's first Labor Cabinet, headed by Ramsay MacDonald, was in power from January till October, 1924.

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