The Bitter Pill

The time had come for the Labor government to growl "no" at the very people who had voted it to power--members of the labor unions. Last week Prime Minister Clement Attlee screwed up his courage and said what had to be said: general wages, as well as profits, must not go any higher.

It was not just another exhortation. Clem Attlee called for a voluntary freeze, but he warned that the government might intervene if necessary. Failure to peg wages and prices, he said, would lead to a pricing of British exports out of the world market. That would quickly mean "mass unemployment and real desperate hunger."

The speech was a bitter pill for the millions of British miners, railwaymen, shipyard and textile workers and others who have been clamoring for higher wages. It was bitter, too, for Trades Union Congress leaders. T.U.C. men would not swallow the dose without angry protests when they met Attlee and his cabinet this week; some were already muttering that they would not be able to hold the rank & file in line.

Most Britons had been basking in the sunny news of increased production and exports, unmindful of Chancellor of the Exchequer Sir Stafford Cripps's warnings of storms ahead (TIME, Jan. 19). Observers noted some black facts:

P: Britain has recently taken out the next to last $100 million left of her $3.75 billion U.S. loan.

P: Even with rising production, the British had spent $1 billion more* on imports last year than they had got for their exports.

P: With every ounce of gold and every dollar she could lay her hands on, Britain's reserves stood at only about $2.6 billion. If they fell to $1 billion, Britain would be too broke to act as banker for the sterling bloc, which might then fall apart. And gold and dollars were running off at a hemorrhagic rate of $200 million a month.

In short, Britain was edging close to bankruptcy. Without Marshall Plan aid, her position would soon be arithmetically hopeless. At Edinburgh last week, Cripps gave a somber summary: ". . . The whole future of our country really hangs in the balance. We have nothing to spare--no slack to take up. . . . The gold reserves of the sterling area are all that now stand between us and disaster."

* Last week Prime Minister Attlee received a matchbox filled with U.S. coins--43-c- in all. A twelve-year-old, John Morris, had collected and saved them to send to the U.S. for comic books; instead, he was giving them to his dollar-hungry country. John's government accepted his 43-c-, and Clem Attlee wrote him a note: ". . . It was a fine idea."

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