The pessimists in England are those who believe we should never have left the old gold standard; (there are still some left, th themselves; believers in money) those who believe we ought never to have imposed u general tariff; (they call themselves "free traders," a hopeless misnomer) and in addition there are, of course, the official. opponents of the Government of the day. The latter, however, are only official pessimists so far as the condition of the country ds concern-mover in setting the savings of the country to work and thus promoting recovery.
The above causes are still operating. The steep rise in commodity prices which took place a year ago (and was, in my opinion, directly due to the collapse of the gold standard in the gold "bloc" countries) has subsided during the past year and occasloned a temporary halt in world recovery. But the British domestic recovery is broad, based on savings and on spending, which is derived from savings and profits, not from loans.
That proportion of the national income which accrues to the working class has greatly increased in the, past five years, and the wage increases of the past two years, so far from setting up consumer resistance, have increased the purchasing power of the mass of the people. It is the industries which cater to the mass which have been the main ones, in the first instance, to benefit from the recovery, And this is as it should be.
The gradual decline in the prices of securities during all 1937 has affected the purchasing power of the upper classes but has left that of the lower ones unaffected. A change in the latter may only be looked for if the employment situation is very adversely influenced and this is not seriously anticipated in the near future, The pyramid of recovery must be based on the broad footing of working class prosperity. Only thus can permanent results be achieved. A recovery which affected the wealthier classes first would be like an inverted pyramid, a top heavy structure balanced on a fine point and liable to collapse at any moment.
The British recovery is on a, Sounder footing than the pessimists know. It will stand harder knocks and last a longer time than they imagine possible. ed. Their real pessimism is about their chances of taking office during ihe duration of the recovery. Building activity had mot achieved its maximum before the Government made the startling announcement of its rearmament programmes. This" was something so new in the history of the country that it took both real and professional pessimists by surprise.
They saw at once how unfair it was (from their angle), just as they had been predicting an uncomfortable slump, that ihe Government should embark on a five year programme of exceptional expenditure.
Sp they transferred their attentions from building activities to rearmament and are now endeavouring to create the impression that the ecohomie activities of the country are deriving their main impetus from this expenditure, which is nonsense, and that a slump will follow the Completion of the programme which is even greater nonsense.
Text read from the printed page and cleaned; old type leaves the occasional error.