BRITISH FINANCIAL CRISIS

Stratford Evening Post, Volume I, Issue 56, 13 February 1931, Page 5

BRITISH FINANCIAL CRISIS

HEAVY BUDGETARY DEFICIT CHANCELLOR SAYS SACRIFICES MUST BE MADE WARNING DRAWS ATTACK FROM HIS OWN PARTY MAINTENANCE OF BRITAIN'S FINANCIAL REPUTATION. When the House of Commons was considering the Conservative motion of censure on the Government for failing to effect economies, the Chancellor of the Exchequer, Mr Philip Snowden, delivered one of the most remarkable speeches heard in Parliament for some time. He said it was no secret that there would be a heavy deficit at the end of the year, and he issued a grave warning that sacrifices will be necessary to maintain Britain's financial equilibrium. Labour members attacked Mr Snowden, saying that he was prepared to go back on the whole of his political career. Some see in Mr Snowden's remarks the death knell of the Government.

HUGE COMMITMENTS

Liberal Amendment. Sir Donald Maclean moved a Liberal amendment demanding that a committee should be set up to recommend practical and immediate economies. He pointed out that the country had to face the fact that even in the most favourable conditions there would be chronic unemployment, of at least one and a-quarter millions for seven to ten years. Ways must be found for distributing the' national cost of relief in the shape of wages. Mr W. J. Brown (Labour) said that Mr Snowdcn's speech was one of the most revolutionary heard in the pro sent Parliament. It meant that Mr Snowden so highly regarded the city of London and tie interests of the banker and money-lcider that he was- pre pared to go back on the whole of his own political career. It meant a surrender of the whole of the Labour philosophy at the bidding of the financial interests.

LIBERALS DEMANDING MORE THE BRINK OF DISASTER. RUGBY, Feb. 11. Sir L Worthington Evans (Con), speaking in the House of Common, on the motion of censure on the Govern mont for failing to effect national economies, said that the country already was committed to various relief wo :1s with an expenditure of £150,000,000, and the Liberals were demanding more. In handling national insurance the Government was borrowing money to relieve current expenditure. One ol the Treasury's principal officers had declared that the whole stability of the British financial system was endan gered. Continental financiers were withdrawing balances and gold from London and the Government was leading the country to the bring of financial disaster by the means which had wrecked Australia's finance. He did not believe the present Government could restore confidence either at Home or abroad. The House ought to act as a Council of State and pass his motion, Mr Snowden's Speech.

Mr Brown said the Labour Party had become the handmaid of capitalism. It was monstrous that a Socialist Chancellor should make such a speech. The Government had no unem ployment policy and was staggering from crisis to crisis. It ( appeared neither to have the "guts" to govern nor the grace to get out. Mr N. Ailgcll (Labour) said that instead of harping on cheese-paring economies, there should be a cost of living indei figure applied to bond holders. Duties and Responsibilities. Sir E. S. Home (Conservative), thanked Mr Snowden for one of the gravest warnings ever uttered from the Treasury Bench. It would brace the country to a new view of its responsibilities and duties, but despite the grave warning Mr Snowden had allowed the introduction of a scries ■)': bills, all involving a large expenditure, such us the School Age Bill and land bills. The Government had had every chance and but had improvidcntly spent the nation's sustenance and depleted the country's re sources.

Mr Philip Snowden said it was no secret that there would be a heavy deficit at the end of the financial year. No budget would or could stand tho unexpected strain caused in past years by the increase in unemployment. Expenditure had increased and rcveuuo had declined. Furthermore, productive capacity had fallen off 20 per cent. "When the history of the way in which the war debt and debt to Washington were incurred, and the reckless extravagance and unnecessary commitments come to be known, I am afraid posterity will curse those responsible," said Mr Snowden. "Despite the world depression, Britain has suffered less than any other great industrial community. We are the worhPs financial centre. Other nations are watching us and any well grounded fear that Britain's budgetary equilibrium is unsound might have disastrous consequences. Therefore, we must maintain our financial reputation and we can do that. Our position is fundamentally sounder than that of any other country in the world. All that is necessary is an effort to get over the present .crisis. That can be done. It will involve temporary sacrifices from everyone and those best able to bear them will have to make the largest sacrifices, and to which cabinet is prepared to make a substantial contribution. This is a crisis which no one party can solve. The country and House must realise the gravity of the position and instead of party bickering must write in a common effort to take effective measures to overcome the temporary difficulties, and restore our former prosperity." The "Last Straw."

Mr W. GniliiUU (President of ilio Board of Trade) replying, said that whatovcr Government had been in office would have been faecd with a similar crisis. The enormous growth of unemployment was due mainly to the fall in commodity prices. He saw little sign that the bottom had yet been touched. There was no need for pessimism and despair, but sustained and enlightened constructive optimism, realising that the country could survive and build up a far greater appeal to the world trade than ever before. The Motion Defeated.

The Conservative motion was de« feated by 310 votes to L'3s. The Liberal amendment was challenged only by the left wing Labourites anj was carried by -AfiS votes to 21. Mr Snowden's speech is generally regarded as one of the most remarkable and most important Parliamentary utterances for a long time. The Labourites are alarmed at the implications and some believe that they see in them the death knell of the Government, because Mr Snowden has definitely rejected all new expenditure and contemplated economies at the expense of the unemployed. The reference to temporary sacrifices for all is regarded as an allusion to wage reductions as well as to a curtailment of state activities of the beneficent kind.

Tho Chancellor said that under the present conditions any increase in taxation which fell on industry would be the last straw. None would welcome the suggestions for economy more than lie, and no proposals submitted would fail to received the closest and most sympathetic attention. 'Dealing with the Liberal amendment Mr Snowden emphasised that only tho smallest economies could be hoped for in the cost of administration. It was only on policy that any large savings could be made, and the House must face that fact.' He added: "Having pointed out the difficulty, I say with all the seriousness that 1 can command) that drastic and disagreeable measures will have to be taken if tho budget equilibrium is to bo maintained and if an industrial recovery is to be made." He said that expenditure which might be easy and tolerable in prosperous times, became impossible in a state of grave industrial depression. Schemes involving heavy expenditure, however desirable, would have to wait until prosperity returned. This was necessary in order to maintain the present standard of life. This was a crisis which no one but the country and the Commons must realise the gravity of the situation and unite in an effort to overcome tho temporary difficulties and restore the former prosperity.

The Daily Telegraph's political correspondent asserts that Cabinet already has decided on a ten per cent, reduction of their own salaries. The saving thus affected would, of course, merely be a drop in the ocean, but it is intended as a practical gesture and it is hoped that the example will be widely followed. He adds that some Commoners may follow the example, and also that cuts in the civil service are procurable. The Daily Telegraph's political contributor says that the Conservatives considered that Mr Snowden displayed courage in speaking so plainly. It is suggested that the Government, in. sanctioning the Chancellor's warning, intended to check extravagant demands from then- own party rather than anything else. The Daily Herald says that the nation is prepared to face the crisis, but there must be equality of sacrifice.

The Times says it is a little late to sound the foghorn when 'he ship is already on the rocks.