BRITISH CREDIT

Nelson Evening Mail, Volume LXVI, 15 October 1931, Page 10

BRITISH CREDIT

-fia» CAUSES OF THE CRISIS Efforts are being made by the Labour Party in Britain to persuade the public that the fall of the Labour Government teas due to a division in its ranks caused by a “virtual ultimatum from New York hankers,” as the “Daily Herald” called it. That journal published a statement that further large credits were offered to the Bank of England "provided that specific and considerable economies were at once made in the administration or in the actual benefits paid under the unemployment, insurance scheme.” This statement was officially denied by Mr Ramsay MacDonald, and the “Economist” declared that tho report was manifestly incorrect because at that time neither the New York Reserve Bank nor any other foreign bank refused London a credit or consented to grant it only on terms, for the simple reason that no request for a further foreign credit was made. “It was not the dictation of bankers and financiers,” says the “Scotsman,” “which brought matters to a head; it was tho loss cf credit, resulting in the withdrawal of a large amount of gold from London; and this loss of credit was the direct outcome of our gross over-expenditure and an unbalanced Budget. The whole crisis is due to these two facts—overexpenditure and an unbalanced Budget. They are only too real —they are not figments of the imagination. Moreover, they have not been created by the bankers and financiers; they liave been created by the politicians.”