The Press TUESDAY, JANUARY 6, 1920. Britain's Economic Outlook.

Press, Volume LVI, Issue 16724, 6 January 1920, Page 6

The Press TUESDAY, JANUARY 6, 1920. Britain's Economic Outlook.

One of to-day's cablo messages quotes Mr Winston Churchill as saying that tho trade of Great Britain is on tho high road to recovery and is quickly getting into its stride. Ho also declared that the national expenditure is "rapidly decreasing." This is not impossible, but there was not much ground for optimism a couple of months ago. .What serious peoplo with other things to think of than tho bolstering up of the Government were saying at that timo is reflected in the pessimistic opinion just expressed by Mr Harold Bcanohamp, tho chairman of tho Board of Directors of tho Bank of New Zealand, who has just returned from a visit to Britain and Europo. Tho British nation, he said, is indulging in a riot of expenditure and loss work, and unless national production is increased Britain will bo faco to foce with bankruptcy. When British people speak gloomily about tho outlook for thoir country they speak very gloomily indeed, and ono may always allow a little for this tendency to exaggeration, even when thero is a unanimity of pessimism. When Mr Chamberlain produced his revised statement of revenue and expenditure for tho current year, "Tho Times" declared that tho state of the finances was appalling. Tho Chancellor's revision cut down the Budgot ostimato of revenue by 32 millions, and enlarged tho estimate of expenditure by 191 millions—substituting for an estimated deficit of 250 millions a deficit of 473 millions. This announcement, and tho levity of tho Government in the debate on tho position, caused widespread indignation and alarm. Most of tho newspapers treated the need for reduced expenditure as mora urgent than tho need for increased production. Tho bad financial habits cultivated by tho Government during tho war appear to havo infected the whole nation. "Apart from tho " ly small class that has been hit by " tho war,'' according to tho "Economist," "the country is now spending " money in a way that shows that tho " present scale of taxation is scarcely "felt. From tho Vest End restaurant "to tho country cinema, football " match, or raco meeting, all forma of " amusement aro thronged to ovcr- " flowing week by week." Tho root of the difficulty is that tho British nation is spending moro than it earns. At least, it was doing so two months ago, and it is difficult to believe that in two I months conditions oouhl tacome as cood L

as Mr Churchill represent? them to be. Economy on the Government's part will not be sufficient, although a determined policy of retrenchment would have a pood moral effect. Economy must be universal. "The working man," as a writer in the Lloyds Hank monthly report. points out, "Ls likely to turn a ''deaf ear to such an anpoal as ought to he made thim if he sees that " the more fortunate classes are not doing their chare towards the com- " mon pood. . The rich and the " well-to-do should nnt forget that they, ''quite as much a<- the working man. "owe a duty to the country, and are trusters of their good fortune for the " common welfare of the State." T'npleasant p. 5 are the financial and economic conditions in Rritain.it is well to remember that Britain's financial position is better than that of any other country i-xeent .Tanan and the I'nited States. I.or:l Mihier recently pointed out- that in ISIT. the national debt, was !>OO millions, and the revenue in 1817 was 51 millions, or one-sixteenth of the debt. To-day the revenue from normal sources i= 700 millions, which is about one-tenth of the debt. The position, therefore, although difficult, is not one calling for panic measures.

British Railway Wages. According to the terms of the agreement on which tho strike of liritish railwaymen three months ago was settled the negotiations for tho. standardisation of wagc.s were to be concluded bv December .01st. It is now announced by tho English newspapers that the matters which were left, in disputo have been settled, and unoffiei.nllv the terms of tho agreement have be-'i published, ft will be remembered that the cause of the strike, which hecan on September 2Gth and lasted for nine days, was the refusal of tho Government to agree to the men's demand for a minimum wage of 60s per week and othcrwiso to make permanent the wages that had prevailed during tho latter part of tho war. But in other respects tho Governmant had gone far to improve tho railwaymen's lot. They offered that tho rate of wages existing at tho armistico should prevail until tho end of the yoar irrespective of tho riso or fall in the cast of living; they hud reduced tho hours of work from ten and twelve a day to eight, had given extra allowances for overtime, night and Sunday duty, and had lengthened tho holiday leave. Theso arrangements wero satisfactory bo far as tho drivers, firemen, and cleaners wero concerned, but other grades of tho servico considered themselves loss well treated, and they forced tho strike. Tho trouble, which was mot most resolutely by tho Government and the public, camo to an end with a compromise, tho men accepting less than they had demanded and tho Government conccding rather moro than they had offered. Tho main featuro of tho agreement was that wages should be stabilised at their existing level until September 30th of this year, and that no adult railwayman in Great Britain should receivo less than 51s so long ss tho cost of living was not less than 110 per cent, above pre-war level. As tho result of tho negotiations that have been proceeding, os a week has been added to tho war bonus, making it 38 s a week in addition to tho pre-war rato of wages, and after next Septembor it will bo increased or reduced from timo to time by a shilling for every 5 per cent, rise or fall in tho cost of living, with this proviso, that in no case shall tho wages, plus tho bonus, bo less than doublo tho pre-war rates. The increase in wages in the lowest paid grades is considerably groator than tho rise in the cost of living over pre-war rates. The case is cited of a porter who used to receive 18s before the war. His wage is now 565, and ho is certain of nover receiving less than 495, showing an increaso of 311 down to 273 per cent., whereas tho cost of living is somewhero about 125 per cent, higher than before the war. But it was generally admitted that tho lower grades of railway servants used to be most inadequately paid, and that there was urgent nood for an improvement in this respect. As matters stand, railway scrvantas* wages, plus tho war bonus, cost closo upon fifty millions a year more than they did before tho war. The os per week that is to bo added to tho war bonus will increase this amount considerably, and must make the question of the cost of railway transport, as it affocts British trade, a matter of grave concern. But tho country can bettor afford to pay high wages to its railway servants than sustain the shock of another railway strike.

The result of the by-election for Spen Valley—one of tho Yorkshire electorates—is described as the heaviest blow yet received by the Government. The turnover of votes has boon enormous. At tho general election Sir Thomas Wliittaker, a Coalition-Liberal, defeated tho Labour candidate, Mr Myers, by 10,664 votes to 8508. At tho byolection thero were three candidates, Mr Myers, Sir John Simon, and Colonel Fairfax. Mr Myers and Sir John Simon were both anti-Governinent candidates, and they polled between them 22,206 votes, while Colonel Fairfax secured only 8134. A Government majority of 2000 was converted into a minority of over 14,000.

The by-elections have gone steadily against the Government. The first contest (West Derby) resulted in a Government win, but a sharp reduction of tho Government's * majority. In Wejt Leyton, Central Hull, Central Aberdeen, Bothwell, Widnes, the Government nomineo failed to hold tho seat. In the four contests in which the Government held the ceatit did so by a margin as small as its margin at the general election was large. We havo tho full particulars of tho voting at the first eight of the by-elec-tions. At the general election the Government in these eight electorates sccurod 83,435 votes, and the antiCoalition candidates 43,474. At the by-elections the Coalition vote totalled

5P.P94, and ::e anti-Coalition vote J 70,704. It is perfectly clear that the j country docs not desire the continu- j ance of this Government, and that the j verdict at the peroral election was not ' the verdict of the nation in its normal j frame of mind.

It may be of interest to Christchureh traders, if it is no consolation to them, for the inconvenience caused by the scarcity of coppcr coins, to know that London has been suffering as badly as Ohristehurch from similar shortage. A banker in the C'itv found the explonn- I tj on —this was in late October—in tiie j approaching Christmas. Many nr- | tides costing a few pence each were j being bought, and shopkeepers with | no hanking accounts were hoarding the j coppers until after Christmas. An j official of the Mint was little more ! enlightening. "We are pouring out morbronze coins than ever l?efore." j he declared, "'hut it seems to make no i difference. The only thing we can put it down to is that people keep stocks at picture theatres and such places, and in this way the cop-p-rs gel bottled up. and do not come into circulation." It must bo confessed that these explanations are not very convincing. The amusement tax out here may be a factor in creating an unu-ual demand for pennies, but it is difficult to escape the conclusion that bronze coinage, whatever may be the case now, has not of late been minted in such quantities as used to be the case. General Monnsh's method of defending the Australian troops against tho imputation that they were wanting in discipline is almost certain to provoke opposition. He has on his side the fact that, disciplined or undisciplined, the Australians were remarkably fine soldiers. Their achievements during the war were of a kind that would no: have been possible to men lacking the prime military virtues; and if a commander has under him men whom ho can be sure will do well just what ho desires they shall do, ho can ask for nothing more. No amount of what has been called "old Army" discipline could give him more. That there is a readiness in Britain to adjust old ideas to tho new teaching brought by the oversea armies is made clear by the treatment accorded by "The Times" to tho new book in which Mr Stephen Graham condemns some features of the training ho underwent as a private in the Guards. The excellence of tho Guards Division is, of courso, everywhere admitted. "Yet," says "Tho Times," "it was always urged, with somo "degree of truth, that, compared with tho Australians or Canadians, or even somo of the famous Scottish divisions, the Guards were better on tho defensive than tho offensive."

The weakness, according to "Tho Times," lay in tho defects of tho system of training at Caterham: "A man was taught in a stern, tough school to act, to obey implicitly, to becomo a splendid parade soldier of the type which before tho war was tho envy and despair of the rest of tho Army. But ho was never allowed to think: initiative was not permitted him, and though this iron discipline could triumph over tho difficulties of open warfare, and add to its laurels the superb counter-attack of Gouzeaucourt, it could never have executed that beautiful bluff by which the Australians won Mont St. Quentin." But Caterham was not the only training a Guardsman received. Ho would spend six or eight weeks at the regimental depot. There "ho learned that his officers were devoted to his interests, proud of him, eager to servo him, and rejoiced in their platoons. His N.C.O.'s were not mere heartless drill instructors, but men fired with tho deeds of tho Mons retreat and tho early days of tho salient, only too eager to pour out their war knowledge and to be fathers to their men. Discipline became educated and humane, and tho result was always to bo seen in France."