13 DECEMBER 1940, Page 7



OF course, the United States has still not plunged into the war preparation effort with enough intensity, despite everything that is being done. There is still too much of the "business as usual" attitude which plagued Britain before the fall of France. There is still too much isolationism in high, if not responsible, places. There is still too much uncertainty among the people over their ultimate relationship to the war.

But we are making progress. The seriousness of the shipping situation, the bombings of smalter industrial cities in Britain, the Axis's Balkan diplomacy, Lord Lothian's startling appeal for financial aid, all have aroused grave stirrings here. False optimism about Britain's prospects certainly does not exist here now—as it threatened to do with the failure of invasion to materialise and before the war at sea and over the Midlands had become acute. At the same time, the ultra-defeatists and appeasers are not making headway. Ambassador Kennedy's :ported remarks along defeatist lines have been stirringly combated by a good many others, and left a very bad taste in the public mouth anyway.

The next major step seems certain to be some sort of shipping aid, in just what form we do not yet know. But public opinion has thoroughly adopted the obvious view that it is futile to manufacture arms for Britain and have them go to the bottom of the Atlantic. Thus far, the trend seems to be toward plans for transfer of American shipping to British registry. The Committee to Defend America by Aiding the Allies, which often foreshadows Administration policy, has just made this recommendation: "The life-line between Great Britain and the United States is the sea-route to the Western Hemisphere. Under no circum- stances must this line be cut, and the United States must be prepared to maintain it. The United States must supply Great Britain with all possible merchant-vessels to fly the British flag. The United States should produce boats as rapidly as in the World War days, for lease or rent to the British. A shipping-pool should be developed so that American ships could operate in the Indian and Pacific Oceans and thus release Britain's shipping for service in the Atlantic."

Meanwhile, it is becoming increasingly clear that drastic steps to expand production further need to be taken. This is as true in the ship-building industry as it is elsewhere. As the Committee to Defend America also urged: "Aid to the Allies and American defence, which are parts of the same problem, can only be accomplished by very greatly increased American arms-production. The battle for civilisation and democracy may be won or lost on the American assembly- line. To this end we will support the President in the use of his full legal powers under a state of national emergency if necessary, to mobilise at once all the industrial resources Of the nation for maximum production. Whatever executive authority the President possesses must be used ; whatever additional authority from Congress is necessary must be secured for the mobilisation of tremendous industrial pro- duction for supplying ourselves and the Allies."

These two points are of imperative importance; more shipping and an end to "business as usual." They are far more important at this particular moment, it would really seem, than the extension of financial aid. Yet Lord Lothian was probably well advised in opening up the question of financial aid immediately upon the arrival of his Clipper in \ev: York. The first result was to draw a sharp and bitter protest from some isolationists—a result the Ambassador must have anticipated, for he is a shrewd student of American policy.

But the second result was to draw the fire away from the more immediate and urgent objectives. In effect Lord Lothian set up a remote and at present somewhat difficult goal ; he established an "asking price," in the shadow of which the various forms of needed physical aid will probably be easier to accomplish.

Actually, repeal of the Johnson Act—which is the issue on which the isolationists are making their protests at present—is far from essential, and might not be particularly helpful. The Johnson Act simply prohibits the flotation of private loans or credits here for nations in default on debts of the last war.

But private credit is not what Britain will be wanting from the United States. Until the Axis begins to crack, it would be difficult to obtain private credit in adequate quantities.

Government loans are much more to the point, and they are not prohibited by the Johnson Act. There are other types of financial aid, moreover, which are not now prohibited by law. The idea of "compensatory transfer" of various British assets can be carried a long way. It was never stated, for instance, that the naval and air base leases in British posses- sions in this hemisphere had been fully compensated for by the 50 destroyers. Such "compensatory transfers" need not involve territories or peoples, but may be in a far less tangible field.

Moreover, there is considerable sentiment among Americans for outright aid to Britain. Whether this would extend to the billions required is perhaps open to question without some kind of indirect compensation. But what Americans most seek to avoid is post-war unpleasantness about debts. They are thoroughly sick of the last war debts, and rather than have that sort of hang-over to plague relations between the countries for years they seem prepared to make quite considerable sacrifices. However, if they are to make such outright or virtually outright contributions, they will need to know rather precisely how much of an equivalent sacrifice has been made by Britons. They will ask, for example, whether extensive British investments in the United States still remain, and whether American corporations will continue to pay substantial dividends to Britons when American taxpayers are digging down for an outright contribution to the British war effort. If they are to give up "business as usual" in their own affairs, they will want to know that Britain's affairs in the Western Hemisphere are in similar state. One small example: it seemed to Americans that, for their national security, their share of the consumption of Bolivian tin should be smelted in the United States. Efforts to set up smelting facilities here, it is understood, have been resisted, if not blocked, by British smelting interests which have long had a virtual monopoly.

It is easy for Americans to be parochial and unreasonable in this discussion of finances, in their effort to be realistic. Nobody questions the tremendous burden of sacrifice which Britain is carrying at home, and in many far-flung parts of the world. The daily cost of the war is well known. Moreover, Britain's desire to avoid liquidating the remainder of its security holdings in the Americas, so as to regain trade after the war, is very human and understandable. Yet the desire of Americans to be shown that the time really has come for financial sacrifices on their own part, is equally human and understandable. Many considerations along these lines make the financial question by far the hardest to resolve in Anglo-American relations. That is perhaps why Lord Lothian chose to raise it as soon as he set foot on American soil. His statement, at any rate, ended the post-election lull. Emergence of strong Administration policies are now to be expected, notably in shipping and in industrial production. Possibly there will have been a big development in shipping before this article makes its precarious way by Clipper across the Atlantic.