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Furtively Bruited About. While all this was going on Harold Wilson and his ministers were bent on a course that they had tried desperately to avoid ever since he took over as Prime Minister three years ago. Two weeks before, Chancellor Callaghan had gone to Wilson and reported that the Treasury's quarterly forecast showed that the outlook for 1968's balance of payments looked even worse than had been expected, and in fact suggested that there would be no improvement at all over the current year. In July, Callaghan had said publicly: "Those who advocate devaluation are calling for a reduction in wage standards of every member of the working class in this country." Now, he told Wilson, he had concluded that Britain would have to devalue, that "there's a point at which determination becomes obstinacy"—and that he had now passed that point. Exports were hardly rising, he told his boss, and yet enough wage increases had crept past the barrier of the Labor Party's price and income squeeze so that rising demand kept imports growing at an alarming rate.
The subject of devaluation began to be furtively bruited about among small groups of Wilson's ministers for the next several days, but it was not taken up at a formal Cabinet meeting until last Thursday. At the meeting the government made its decision to devalue.
That afternoon, Callaghan had to go before the Commons to answer questions about rumors that Britain had made international loan arrangements. He did not confirm that there were such negotiations for a good reason: there had not yet, in fact, been any. It was not until after the Cabinet meeting that the government went out and started looking for loans on the basis of its decision. The Bank of England's O'Brien went to work calling up his central bank counterparts in Europe and in the U.S. The whole deal was finally arranged by Saturday afternoon.
The I.M.F., which must approve devaluation of any of its members, was notified of the plan on Friday night, and at 8 a.m. Saturday each of its directors received a telephone call summoning him to a meeting that morning in Washington. The directors gave tentative approval to Britain's plan (they are to vote formally on the matter this week), and that approval was received in London about 5 p.m. Some four hours after that, having worked out a few more details, Chancellor Callaghan made his historic announcement.
The Once Proud Workshop. How did Britain, where the Industrial Revolution was born, fall to such a beggar's estate among the industrial nations of the world? There is scarcely a segment of British society or an element of British tradition that is not in some way responsible for the impoverishment of the once proud workshop of the world.