TH E TABLET

A WEEKLY NEWSPAPER AND REVIEW

PRO ECCLESIA DEI, PRO REGE ET PATRIA

VOL. 195, No. 5734

FO U N D E D IN 1 8 4 0

LONDON, APRIL 15th, 1950

SIXPENCE

PU B L IS H E D AS A N EW S PA P E R

THE CHURCH, STATES AND PRIVATE PROPERTY

The Vindication of the Catholic Teaching

TITO AND TRIESTE

The Real Issue for the Disputed Territory

GOA, PORTUGAL AND INDIA

A Test o f Dr. Salazar’s Statesmanship

EASTER IN ROME A Description, with the Text o f the Pope’s Homily AFTER LA TOUR DU PIN A LETTER FROM WALES Catholic Social History in France. By M . P . Fogarty By H . W . J . Edwards

D A N G E R O U S P R E S S U R E S

J UST before Parliament dispersed for Easter, Sir Stafford Cripps was able to give a rather better report on the dollar position, and to say that the sterling area as a whole has a slight favourable balance of £40 millions for the last three months, although Great Britain still has a gap to close. This is real progress, in spite o f many difficulties, of which the Communists’ attempts to disrupt the economy and exports of Malaya are only a part. But the balance is only achieved because the dollar purchases for all sterling countries are still closely controlled and continually reduced ; and no one can imagine that a new mercantilism is for long practical politics, or that Great Britain can make a system of paying for dollar imports through the colonies, limiting their own dollar trade, requiring them to surrender their dollars for sterling and to buy their own necessities with sterling.

Dollars have begun to acquire the characteristics which made bullion, and the acquisition of a good bullion balance, the great object of Government policy before the liberal and free trade era began. The great point of bullion was its universal acceptability abroad, so that a Government possessing it could buy allies or mercenaries, and enjoyed a vastly greater range of diplomatic and military action. This better balance has been achieved by a reduction in dollar imports to all sterling countries and the continued expansion of exports, for which it continues to be vital that costs shall not rise in this country.

But the Easter conferences of several trade unions showed how the seams are beginning to burst, and the union leaders are finding it increasingly hard to keep the rank-and-file of their members from demanding increases to meet the cost of living. One man’s wages are the next man’s cost of living, and every advance is reflected in the prices the other workers have to pay. The cost of living is also high because o f the money taken and spent by the Government. It is not properly appreciated, by those who imagine that wage increases could come out of profits, that the Government is far and away the principal beneficiary from the profits of industry. From all distributed profits, the Government first takes 30 per cent in tax, and then 45 per cent in standard income tax. I f these receipts were diminished, they would have to be made up by other taxation, of the purchase tax variety, on current consumption. Wage increases are wanted for current consumption and, if broadly granted, will immediately increase effective demand, and force up prices in a double fashion, both by creating more buyers and by making goods more expensive to make and handle. All the advantage of devaluation could be quickly lost, and another devaluation would begin to loom on the horizon. These are cogent considerations, and they lead very naturally to the demand that Government action shall bring prices down ; but that is a thing Governments do not know how to achieve.

Perhaps in the Budget there will be some relief o f the tax on undistributed profits, to encourage companies to use their resources less for dividends and more for capital improvements, resulting in more economic production. Broadly speaking, it is only companies who are saving anything today. Private people under present conditions have neither the means nor the will, as the melancholy story which the National Savings campaign has to tell makes very plain. People need to draw on their private capital, and they do so all the more philosophically because savers who spend today what they saved even as recently as in the war years, can buy very much less for the money. Those people who bought jewellery twenty years ago, and who perhaps thought they were being very extravagant, have in fact done very much better than those who lent their money to the Government in return for a small interest, on which they have paid the full income tax. That is a great and painful truth, which should never be absent from the minds o f statesmen and their advisers, for it discloses a most unhealthy and disastrous state o f affairs. From Industry to Politics

I f the policy of freezing wages breaks down, it will be important politically as well as economically, for it will represent the failure of the TUC to control the rank-and-file. The Amalgamated Engineering Union, who are to ballot on whether or not to strike, have always been restive, but the whole position has a fundamental inconsistency between the two roles o f the trade union leaders, as representatives of one element in industry, and as political leaders inspiring the Government of the day. Trade unions were founded in the heyday of free enterprise to give working men the bargaining advantages o f solidarity, and the mutual assistance o f friendly societies. The second function has been increasingly taken over by the State, and the first function becomes increasingly difficult to reconcile with nationalized and socialized industry, in which there is not intended to be any place for bargaining power, because the structure and rewards of industry are to be planned and allocated in the public interest.

It is now beginning to be realized how much the trade unions have lost as well as gained by becoming so political. I f they are not yet, like the unions on the continent, more political than industrial, with political leaders, they are moving in that direction. And yet the political party they have done so much to create and support is more and more realizing that it must be more broadly based, and only has a future as a national party, which means that it must approach the highly diversified national life in a way that can appeal to much more of the nation than is comprised in the ranks of organized labour.

To secure the prestige and power o f numbers, the different trade unions have for long tried to think that their interests are more identical with each other’s than in fact they are. For a very long time all the trade unions believed dogmatically