Aug, 22.
Over a year ago the Trade Union Congress issued a report by its Economic Committee on the subject of "economic groups." In that important document there occurred the following passage:
"Economic theory condemns the general policy' of tariffs, but Political rather than economic considerations are usually the determining factor."
It may be suspected that the Trade Union Congress is hesitate ing to accept the Government's proposals for retrenchment with this comment at the back of its mind. The issue is of the first magnitude. It embodies the traditional suspicion of the Trade Unions when confronted by any proposal tending to reduce the standards of living. That suspicion has not been altogether unjustified, as those acquainted with the early struggles of Trade -Unionism will agree. Nevertheless, if the Government "have decided to tackle the Unemployment Insurance scandal on the lines of the May Committee's Report by a percentage reduction of the benefits under the Insurance Fund scheme, they may be reducing the standard of living of the unemployed but they will be applying to him which, owing to the f prices, has actually been applied already to the workers. This Journal recently showed that the anomalous position has been created whereby the unemployed are actually better doled than they were when the cost of living was higher. The May Committee caustically—commented on the effect of wild election pledges on the national expenditure. No more poignant example of this political tragedy. has been provided than in the' failure of the Labour Gove: ment, blessed as they are ith the possession of first-class economic brains, both within their own ranks and among their {intellectual supporters, to. gi proper heed to the principles of that important science. It is all very well for the Trade Committee to drag political considerations into their argument for the disregard of economic theory. The plain fact, however, is that, at a time when the mass of the electorate does not appreciate the true economic position of the country, the Trade Unions have used all their power to force Parliamentary candidates into reckless pleds-ing of posterity's resources for the benefit of the immediate present. The catastrophic fall in prices has seriously compromised the national exchequer in its relation to such charges: as are connoted by the Unem ployment Insurance Fund, the rates of which have been fixe! in monetary terms, on the basis of higher prices. In some degr this applies to the Government's. obligations in regard to pen-ions, where no provision has been made to adjust the pension rates conformably with the index figures.
Mr, Philip Snowden stands firm on his doctrinaire support of free trade. He will have nothing to do with tariffs. Yet tariffs meet the point of view of the Trade Unionist and, indeed, of the employer who knows the strength of the Unions and the strain of Frotected foreign com: petition. Whether this national crisis will develop into a re-
[grouping of parties under thelof prudent husbandry as per-respective banners of Free Trade and Protection may be doubted, The obvious trend of Trade Union opinion in the direction of tariffs, which a strong section of the Conservatives supports, opens up a deious prospect of distraught loyalties. Political adversity has made strange bedfellows before now. Yet the creation of a Conservative cum Trade Union cum Protectionist party cannot be regarded as within the range of immediately practical politics, especially as the economy movement receives strong backing. from the most influential members of the Conservative Party. The telegrams, so far received, suggest that ' the Government. and the Trade Unions may come into serious conflict, The readiness of the National Execative lof the Labour Party to falt_ in with the proposals of the Bij Five suggests that Mr. Ramsay. MacDonald need not despair of convincing the Trade Unions that Codlin is still the friend and not Short. Mr. Arthur Henderson's bland diplomacy has enjoyed much practice since hhis first accession to Cabinet rank, He has triumphed on the world stage. He can still ex-excise his old gifts of reassuring the comrades. Indeed his skill has probably acquired an even surer touch by reason of his European successes. Mr. Philip Snowden, on whom the toga of the Roman father sits more becomingly than ever, may be trusted to lean heavily on the Foreign Secretary in maintainig his classic adherence to the doctrine of free imports, To him, it may be suspected, even the'device of a 10 per cent. tariff for purely revenue purposes is anathema, He will endorse the latest challenge from the very stronghold of Free Trade, the Kingdom of Holland the best reply which England can give to the blandishments of the protectionists:
The doctrine of free trade teaches is that this system is not only
Dut also that it be the beat for the world at large, country which holds to it, not Withstanding the fact that the opposite policy is applied in other countries. The advance con protectionism in other cou tries is undoubtedly prejudicial Dut its evils are not diminish by joining the chorus, On the contrary, by joining, these evils are angmiented,'
That official view from The Hague is the authentic pro: nouncement of Mr. Snowden's school. It provides a retort to the Trade Union Economic Report, It sets out the issue on [which the contending parties can come to grips.
It may be assumed that the Government will do their best to avoid a rupture with the Trade Unions. The serious feature of the situation is not so much the threat of the rupture as the likelihood of the Government being forced to evade it by watering down their economies. The Conservatives appear to be dissatisfied with such retrenchment as is proposed. This satisfaction may be wecentuated and thus what might be a national and virtually _all-party effort will be degraded into a Government device for staving off an immediate deficit and yet! retaining the power of pampering the electorate's dislike of a really comprehensive policy of retrenchment. The May Committee pointed out that their proposals were merely tempora ary palliatives unless the Government tackled the question of Parliamentary, control of expenditure, The Treasury has often been held up as the tyrant suppressor of all kinds of beneficial activities. 'The truth is that that guardian of the publi finances is severely hampered its task by the escape of major policy from its control. In the Cabinet the Chancellor' of the Exchequer stands alone as the brutal obstructor of his colleagues' vote-bringing schemes. He should, in the view of the Committee, have the support of la Cabinet Finance Committee which would impress on the Ca-bluet, as a whole, the importance manent ingredient in all policies, A Select Committee has been appointed to examine the relation of Parliament to the Executive and its proposals may, to some extent, deal with this weakness in financial control, The plain facts of the problem before the Government point to the need for immediate grapple ing with an orgy of expenditure which has woefully outstripped national resources, The comfortable belief that the feat of balancing the budget by finding the £120,000,000 required will solve the problem should dissipated. It can be nourished only by a Party cynically looking to the polls, without regard for the eventual future. During the next winter the stress of world depression will be felt in England as elsewhere. It will be futile to depend on a possible turn of the tide for the permanent relief of the Exchequer. What will be required will be a proper policy of reviewing national expenditure. In homelier Janguage the nation has to cut its coat according to the cloth The process has been but spas medically attempted. The spa-[cious visions of the post war years still exert the banefully soporific influence on some schools of thought, That is why the Government's best hope lies in the study determination of Mr, Snowden rather than in the dic plomatic gifts of the Prime Minister. If there is any surrender to the Trade Unions on vital principles the problem of retrenchment will remain unsolved and, if there is any vigour in Con: servative protestations, the nemesis may be bitter for the Government,
Text read from the printed page and cleaned; old type leaves the occasional error.