GREAT BRITAIN: Quite Unthinkable

One of those dismal howls which the greatest of British bankers from time to time permit themselves went up after coffee, cognac and black cigars at London’s Mansion House last week from fox-bearded Montagu Collett Norman, Governor of the Bank of England. “Look east or west, or wherever one will, and we see gold escaping from Europe across the Atlantic,” gloomed the Governor. “How far we are from those settled conditions under which alone we can work!”

This august candor, of course, quickened the war-scared flight of hoarded gold from London to Manhattan, despite the fact that on arrival it had to be converted into Roosevelt Dollars, with little assurance of possible reconversion into gold and shipment back to Europe later (TIME, Oct. 7). Well might so mad a state of affairs make the Governor of the Bank of England howl, but the Chancellor of Britain’s Exchequer is icy Neville Chamberlain, and last week this hook-nosed paragon of Conservatism favored the same London banquet with his stiff upper lip.

Though admitting by implication that the shot-in-the-arm given Britain by cheapening the pound (TIME, Sept. 28, 1931) has at last just begun to wear off, the Chancellor observed: “I must say that up to now there has been exceedingly little sign of a check in our movement toward recovery. . . . Employment . . . is picking up…. Export and retail trades, notes in circulation, bank clearings and bank advances all show substantial increases…. It is only in new capital issues, which were continuously extending up to the end of July, that in August we received a definite check, due doubtless to the situation abroad.”

Finally, Conservative though he is, Chancellor Chamberlain took the stand that he must be left as free to extemporize and monkey with the pound as President Roosevelt is to monkey with the dollar. “If this country were to go back to the gold standard, it would mean we were no longer free to adapt our policy,” Mr. Chamberlain suavely told the Mansion House banqueters. Earlier in the day, before the Lord Mayor’s wines had mellowed his mood, the Chancellor had said harshly what he really meant, “even the most tentative approach to stabilization is quite unthinkable!”

What is thinkable, and imminent, Chancellor Chamberlain added, is a Great British rearmament program, for which he must proceed to raise by loans, $500,000,000, according to City rumors.