Buckingham Bulletin

King George VI was pronounced officially out of danger last week.

The Melancholy Fact

The traditional toast had just been proposed: "Prosperity to the public purse and health to the Chancellor." At the annual banquet given by the Lord Mayor of London to the Chancellor of the Exchequer, 200 of London's leading bankers and merchants & their wives got to their feet. The toast drunk, Chancellor Hugh Gaitskell (whose health was fine) responded with some distressing news about the prosperity of the public purse: Britain's dollar deficit for the third quarter of 1951 was 638 million. The audience gasped. A deficit was expected, but not this much. It was the worst financial news since the pound was devaluated in 1949. The fact that British gold reserves of $3.2 billion are twice as big as they were in 1949 softened the blow, but still it hurt.

Nor could the deficit be blamed on rearmament alone, though commercial and strategic stockpiling accounted for some of it. Britain's hasty attempt to find oil somewhere else than Iran, for example, would cost $300 million a year. Even more serious was the drop in the world price of sterling commodities such as wool, rubber and tin, with no commensurate drop in the price of dollar commodities.

Something unpleasant would have to be done about it, Gaitskell added significantly, "whatever government is in power." The General Election was only three weeks away. And though Britain's patient, put-upon man-in-the-street might not understand all the financial subtleties of dollar deficits, he had learned to translate the terms, and the worried expression on the Chancellor's face, into a feeling that he would get less to eat, pay more for clothes, and warm his shanks at a dwindling coal fire.

The melancholy fact about Britain's 1951 election is that two parties are competing for the privilege of presiding over the next bout of economic unpleasantness. Clement Attlee, if he expects to lose, has exercised the Prime Minister's privilege of putting the fruit for which Churchill has been reaching into the old man's hands at the precise moment when it is turning into the worst kind of lemon. Neither side apparently sees a way to cope with the crisis except by blood, sweat and tears, which in peacetime terms mean regimentation, restriction and austerity.

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