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Down: Dollars & Exports. Last week the results of some "follies" were officially recognized. Austere Sir Stafford Cripps's Board of Trade confirmed that the bulk of Britain's exports have been going to nations inside the sterling bloc. The balance of payments with "hard money" countries (the U.S., Canada, Switzerland) is more unfavorable than was calculated a year ago. The hard fact is that Britain has sold too little in the "hard money" markets (only about 14% of her exports), while buying heavily (about half of her imports) in those markets. A sore point in her U.S. buying: prices went up about 31% in 1946. That is why Sir Stafford keeps urging: "Save dollars."
Almost 30% of her 1946 American imports had been in tobacco and Hollywood —a statistic which portended more austerity. Most of the rest of Britain's loan spending had gone into food and other consumer items instead of into the stuff out of which real economic recovery could be built—steel, industrial raw materials, machinery.
As a result, Britain was far short of her export goal (175% of her 1938 average). The export drive, off to a brave start, reached 120% of the 1938 average last July, then leveled off to 117%. But in December it slumped to 103%.
The coal shortage, prime factor in most of Britain's troubles, was mostly to blame in December. Last week the Cabinet discussed employing displaced Poles already in Britain, to work the man-short mines.
Discussion of another proposal revealed the vicious circle of reasoning underlying the whole manpower shortage debate. When some repatriated Italian prisoners of war indicated that they would like to return to Britain and work on the farms, the semi-official objection was that Britain's food shortage was so grave that the nation could not take responsibility for feeding extra mouths. In fact, importation of foreign labor was political dynamite because labor's rank & file jealously opposed it. The alternative—a deep cut in the Armed Forces and Auxiliaries (1,510,000 men & women)—would mean a serious shrinkage in Britain's foreign prestige and policy.
Gloom Week was clearly a turning point for the Laborite Government. Now it would have to face decisions that would change its role from labor's protector to labor's prodder. Clement Attlee's regime was in for a hot time in the next few weeks, not only from the Loyal Opposition but also from the ranks of labor, on whose loyalty it depends.