THE NATIONS: Hard Hearts, Hard Facts

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The British economic crisis, which had been building up ominously for months, was no longer a subject in the sedate preserve of economists and statesmen. Britain was in a worse position than at any time since war's end, and by last week every plain newspaper reader in Britain and the U.S. knew it, and knew more details than he had ever known before. Britain's dollar reserves had dropped almost to $1.2 billion, dangerously below the safe minimum of $2 billion. In short, Britain was teetering on the verge of bankruptcy; since she acts as banker for the whole sterling area, her plight also meant the danger of panic and dire economic distress from Manchester to Melbourne.

In Washington next month a conference of the U.S., Britain and Canada will meet to see what can be done to save America's most important ally. What worried the U.S. as much as the prospect of Britain going bankrupt was the possibility that, in an effort to stave off bankruptcy, the British might withdraw into a tight autarchic sterling bloc which would in effect split the West in two.

The Old Backbone. As the conference approached, the U.S. press sat up and took notice. It was natural that most U.S. papers, from the polite New York Times to the loud-roaring Hearst press, should pointedly recall the $3.75 billion U.S. loan to Britain, which the British had long since run through, and more than a billion dollars worth of ECAid, which had kept the British going so far. It was also natural that the press of a capitalist, free-enterprising democracy should blame Britain's Socialist government and its works (e.g., nationalization of coal and railroads, the billion-dollar-a-year health plan) for a lot of Britain's trouble. U.S. press comment ranged from the thoughtful view that Britain's Socialist regime had merely aggravated a British economic weakness of long standing, to sharp criticism and invective ("The old British' backbone is turning to putty...Here is that beggar again...").

Before the U.S. press had got very far, the British hit the ceiling. War Secretary Emanuel Shinwell, who like most other Labor leaders has been free in his denunciation of free-enterprise capitalism as practiced in the U.S., last week cried petulantly: "Our magnificent efforts in the past are being overlooked." Cried the tabloid pro-Laborite Sunday Pictorial: "It is fair to say that the British are riled; in fact, we are damned annoyed...We British are tired of Yankee insults."