Inquest on the Crisis

It may be remembered that, when Mr. Churchill addressed the House of Commons on the morrow of the Munich Agreement, the first thing he emphasized was that we had suffered a major defeat. Similarly in any review of the present economic crisis, the first thing that must be stated is that we are the victims of a dreadful catastrophe. So far the weather has been so good and the issues involved have been so technical that it has almost seemed that, despite much fluttering in high quarters, the average citizen has tended to regard the breakdown of the experiment in convertibility and the virtual exhaustion of our dollar resources as a matter of comparative indifference. But this state of opinion cannot persist. As the winter comes on, as our rations are cut and our amenities (such as they are) abolished, we shall all realize only too vividly that, for the urban inhabitants of a tightly-packed island, such as our own, to be caught with an adverse annual balance of payments of some six hundred millions sterling, and inadequate reserves to cover it, is no minor incident. It is the biggest disaster in our long economic history.