BRITISH INDUSTRY AND REARMAMENT
Mr. Beckett at the Westminster Bank meeting very effectively demolished the notion that Britain's internal
(Continued on page 157.)
FINANCE AND INVESTMENT
(Continued from page 154.) prosperity is in a large degree dependent on rearmament work. This, he demonstrated, was a welcome but relatively small addition to the gross output of British industry. The supplementary expenditure of £150,00o,000 per annum on defence he placed against the background of a gross industrial output valued at £3,500,000,000 to £4,000,000,000 last year. Hence the striking conclusion that " for every 24 people already in employment, rearmament has so far provided work for an extra 1." Whether that is comforting or dis- concerting depends, of course, on how one is viewipg the future. It lends little support to the hope cherished in some quarters that the quickening pace of defence expenditure could be relied on to offset a really substantial decline in other branches of trade. On the other hand, it also implies that no serious setback should necessarily occur when the defence programme has passed its peak in, say, 1939-40.
In his recession analysis Mr. Beckett distinguishes between the course of trade itself and that of the commodity and stock markets. A moderate recession, in his view, was inevitable in that it is too much to expect that recovery can follow an unbroken upward curve, but the extent of the decline had been greatly exaggerated in Stock Exchange prices. What of the future ? Mr. Beckett admits that our pace has slackened, but relies on our reserve of strength and stamina to pull us through any vicissitudes. " To take alarm at this juncture is harmful and unwarranted," he states, although doubtless he would not counsel against taking reasonable precautions. An important point for the bank's share- holders : the a per cent. bonus dividend is to be regarded as a bonus, and not as tantamount to restoring the old 20 per cent. rate. Here is a plain warning, but I imagine that Mr. Beckett, as well as the bank's shareholders, will still cherish a hope that earnings in 1938 will be good enough to permit the 20 per cent. rate to be maintained.
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