or number—especially where one has left the city behind SIR,—Since
I last wrote to you on the financial situation to seek quietness in a natural sanctuary. Not that cul- as a whole there have been a number of events, social, tivated man cannot almost always improve upon un- political, and financial, which seem likely to play a consider- cultivated Nature, and improve almost any " wild " view able part in determining the future course of financial and by judicious planting and cutting or by the introduction economic developments. First and foremost, of course, of building or roads or water. The idea that the works we have had the settlement of the protracted coal strike. of Nature are necessarily all good, and the works of Nature's (I distinctly prefer to call it by that name.) In the second masterpiece, man, are necessarily all bad—" that every place, we have in pro3pect the conference with the Sinn prospect pleases and only man is vile "—is as mischievous Fein leaders ; and in the third place, and most important of as it is false and demoralizing. all, we have the suggestion put forward by the President of The mid-Victorians may have had, perhaps, some grounds the United States with regard to a conference concerning for such desperate pessimism—but we are no longer disposed the possible limitation of armaments. In view of these to be so abject. We know that England might be beautified three events, it is scarcely surprising that a more hopeful as Italy was beautified—given faith and works and time. feeling should have prevailed during the past week or two; There are few" beautification" projects, if any, that could and although there has appeared somewhat unexpectedly not find inspiration in Italy, and anyone who has ever seen the prospectus of yet another Government loan, that the Sacro-Monte of Orta or of Varallo will inevitably recall issue has not so far had any seriously disturbing effect To quote a previous Spectator article * :— Lest I should be charged with under-estimating the "On a spur of the hills overlooking an exquisite mountain importance of these three factors—for I am aware that my lake the builders of the Sacro-Monte presented their offering to letters to the Spectator scarcely err on the side of optimism God. They carved out of their native woodlands a scheme of —let me say at once that I regard each one of supreme green and winding glades overshadowed by tall chestnuts and stately pines and beeches—never too many or too few, but importance. The indefinite continuation of the strike exhibiting the happiest mixture of Nature and of Art. And must have brought the country to ruin ; civil war in a always between leaves and branches, even in the height of suinmer, country so near and so closely knit to us as Ireland is the pilgrims of the Hill catch glimpses of the blue lake and its something wholly inconsistent with conditions of real island town, or of the bluer sky and the widespread plain. Through this hill park wander broad and sinuous roads, or wide Prosperity in Great Britain itself ; while should the autumn paths, sometimes wholly of grass, and sometimes of stone. The conference at Washington conceivably result in such a stone-pitched paths have those broad, shallow steps which restoration of international goodwill and confidence as to decorate all the hills of Italy, whether in the Alps or Apennines— bring a great limitation of armaments within the sphere of a heritage from the Roman roadmakers. Bordering these roads are set, with an artful innocence of design that defies practical politics, it would be almost impossible to exagger- analysis, a series of exquisite Chapels built in mountain stone ate its effect in contributing to a return of prosperity to and hard plaster. The Orta, Chapels are the perfection of that Europe as a whole, a prosperity, moreover, in which this garden architecture which is Italy's singular prerogative. The country would share in full measure. Therefore it can be little classical buildings which delight one in the backgrounds of primitive pictures, but which one never sees in bricks and admitted that in these three factors we have something mortar in the towns, are scattered with a lavish hand through- warranting renewed hopefulness, and we . can no more out the sylvan solitudes of the Orta hillside. One can best afford to disregard the inspiration which comes from such describe the Orta Chapels, with the delicate wan Italian grass hopefulness than we can afford to ignore the many dangerous growing up to the short flights of steps which lead to the little factors in the situation to which I have so frequently drawn Our little Bunkers Hill cannot bear the rich load of Orta's Nevertheless, as the result of a discussion in many The place would be approached by alleys of pleached ated, that it is upon the first—namcly, the conclusion of the In the case of the Outlook Tower on the Castle Rock at the necessity for peaceful conditions to favour improvement. course has been revealed—these impending political conferences, I have to note the effect likely to be produced upon the financial and economic situation by the end of the coal deadlock and the return of the miners to work. It is just here that thoughtful observers in the City take exception to any undue and premature optimism with regard to an early return to prosperity. It is all very well for Mr. Lloyd George to speak of the settlement as a good one, of an enduring character, and so forth, but in all these great labour outbreaks and subsequent peace treaties there is far too great a readiness to eulogize the breaker of the industrial peace for consenting to return to work and too little disposition to note the appalling effects of the weeks and months of strike. As a consequence of the last two coal strikes coming so closely the one upon the other, our economic position has been gravely injured. Foreign markets have been lost, and one concrete reminder of the damage inflicted has come during the past week in a further serious decline in sterling as reflected in American currency, the New York exchange on London having fallen severely.
Not only so, but it is rather difficult at present to determine the precise merits of the settlement which has been reached when viewed from the standpoint of the nation's prosperity. Does it, for example, contain within its provisions sufficient inducement to colliery owners and miners alike to increase the output, for larger supplies of cheaper coal are one of the essentials for any great improvement in the industrial position ? At present, not only are there no signs of any reduction in the prices of coal for industrial purposes, but household coal has actually risen. Yet if, in spite of lower wages and a Government subsidy (at the expense of the taxpayer), we are not even to get cheaper coal, how are we to get a trade revival ? Moreover, the merest glance at the national accounts is sufficient to indicate the damage which has been wrought by the coal strike. Already the prospects of a heavy deficit for the year are becoming clearly defined, and instead of a reduction in the Floating Debt promised eighteen months ago in Mr. Chamberlain's Budget we have an actual increase, when compared with a twelvemonth ago, of nearly one hundred millions, while in consequence of failure on the part of the revenue to keep step with expenditure we have heavy borromiing at the Bank of England and on Treasury Bills, thus adding to the inflationary influences with their disastrous effect upon prices. I have already mentioned the further fresh issue of Treasury Bonds announced during the past week giving a return to the investor of just under 6 per cent. ; and while I have no criticism to make with regard to the actual merits of the bonds, the fact remains that they have been rendered necessary not only to meet maturing obligations, but to provide for the shortage of revenue itself, which, together with enlarged expenditure, is the direct result of the recent strike of the miners. The effect of it upon the national accounts, I predict, will be even more marked before the end of December arrives.
Inasmuch, however, as the strike is over, it might perhaps be asked, Why emphasize the past ills instead of dwelling rather upon the possibilities of the future now that work has been once more resumed ? I am afraid, Sir, that the reason is to be found in the fact that those who are largely responsible for our acute problems of to-day and for the taxation under which the nation is groaning still fail fully to appreciate the causes of our troubles. Confronted with the prospect of a deficit in the national accounts, the Government is at last compelled to make some move- ment in the direction of economy, while Labour, con- fronted with the fact that at present unemployment doles are not granted to an amount corresponding to full pay, perceives dimly the necessity for some partial recognition of the true position. At present the recognition is of the feeblest, and reforms are of a halting character, but the point is that, however feeble the recognition, it has only been obtained through adversity, and I do not believe for a moment that we shall get the impetus necessary to recovery from our present mis- fortunes until the results, on the one hand, of Government extravagance, and, on the other hand, of slackness on the part of labour have been still more keenly appreciated. As the next few months progress we shall find that, through increased competition on the part of Germany, through the -loss of markets by reason, of the coal strike, and through the impaired condition of the national finances, we shall get an accumulation of evidence of the effects of our unsound financial policy during recent years. To imagine that with the end of the coal strike we can recall prosperity with a mere beckoning of the finger is to indulge most dangerous illusions, though I quite admit the probability of a moderate early improve- ment in securities based on expectations of a slightly lower Bank Rate. The question whether the settlement of the coal strike will be the turning point in the situation, as it might conceivably be, depends not upon roseate views about the nation's possibilities, but upon a clear recognition of the follies which have been perpetrated and the magnitude of the task involved in restoring the years which the "locusts have eaten." When these have been realized by Government and people there will be ground for optimism, because a force will then come into operation which will inspire effort and bring to the country, as it always has done in the past, real prosperity.—I am,
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