Ted Grant

Lease-Lend Crisis

Burdens to fall on working class

Written: September 1945
Source: Socialist Appeal, vol. 7 no. 13 (September 1945)
Transcription: Harry 2007
Markup/Proofread:: Emil 2007

The American capitalists have abruptly and rudely, without consultation or warning, ended lease-lend. The sugary phrases about “co-operation” in the “great battle of democracy” are shown to have been but a cover for the real interests of imperialism.

No sooner had Germany and Japan been knocked out, than the scramble for the markets of the world has been intensified among the Allied victors. Despite the official lies about the reasons for Lend-Lease, it was only granted in the first place by the Americans after they had stripped British imperialism of the major part of her investments, markets and interests abroad.

The Observer of August 26th complains in its editorial columns:

“Could anybody suggest that Britain has devoted too small a fraction of her national production to the war? Yet other nations have already grown rich at our expense, to the tune of £4,000 millions in gold and securities. Without Lend-Lease we are likely to put up a dollar debt of at least a further £1,000 millions. This is financial lunacy. The whole concept of war “debts” is a false one. They must not be allowed to bedevil world trade and disrupt international relations after this war as they did after the last one.”

The whole of the press unanimously bleats about the difficult position in which British imperialism finds itself.

When the capitalist politicians and their Labour and Stalinist lackeys were painting a glowing picture of the glorious vistas of plenty and prosperity which would follow the victory of the Allies, the Socialist Appeal warned the workers that Britain, though nominally on the side of the victors, was in fact a defeated power. She had become a satellite, in effect, of American imperialism and Wall Street would call the tune.

Now, in common with the rest of the press, the jingoist Daily Mail gives this picture in an article by the Tory M.P. Captain L. D. Gammans:

“We must import all (or a large part) of our cotton, wool, timber, iron ore, oil, tin, rubber, hides and most of our rare metals. Otherwise, our factory wheels will not turn.

In 1938 our total imports were £920,000,000. But we did not export an equivalent value. Our exports were only £530 millions.

The difference was made up partly by the interest on those foreign investments made by our Victorian and Edwardian ancestors; partly by the profits of British shipping companies which carried not only British but foreign goods all over the world; and partly by the insurance business and other similar activities which resulted from the fact that the City of London was the financial centre of the world.

Even with these ‘invisible exports’, we were not breaking even before the war, and were starting to live on our capital abroad to make up the difference.

Since 1939 our economic position has deteriorated catastrophically in four respects:

(1) Most of our export trade has been sacrificed to the war. In the meantime, some of our best customers have learnt to make for themselves the things they previously bought from us.

(2) A large part of our overseas investments were liquidated in the early part of the war, when the U.S.A. was prepared to supply us only on a “cash-and-carry” basis.

(3) We are now a debtor nation and owe the staggering sum of more than £3,500,000,000. Even if this debt is ‘funded’ at a low rate of interest, i.e. the repayments spread over a number of years, it will mean that we must increase our exports by about £200,000,000 a year, for which we receive no corresponding imports in exchange.

(4) Our co-efficient of industrial efficiency is lagging behind that of the U.S.A. even more than before the war, and it is with America that we have to compete in the neutral markets of the world. For example, an American coalminer turns out nearly four times as much per shift as a British miner; in some branches of the textile industry the difference is nearly as bad.”

On the basis of Britain’s bankruptcy, Wall Street is exerting pressure to force Britain to follow a policy in her interests, just as Britain used her dominant position in the past—during and after wars—to force her “allies” to bow to her policy.

Not content with having driven Britain out of her former markets in South America and other areas, American imperialism, which has enormously expanded production in the war years—in fact doubled it—intends to force her way into the British Empire and the former “sterling bloc”. The Daily Mail correspondent in New York writes on August 27th:

“Those officials who are prepared to discuss an alternative to Lend-Lease say it might consist of continuing shipments of food and raw materials, with an agreement that Britain would settle the bill at a later date without paying any interest on the amount due.

In return Britain might be asked to agree to open up all her markets to the inflow of American goods.

‘Open Markets’

Representative Celler, of New York, hinted at such an agreement over the weekend, by saying that a ‘proper substitute’ will be found for the Lend-Lease agreement, if England opens up her markets to U.S. exports in foreign lands.

He said Britain is not ‘playing cricket’ by keeping India and other sterling bloc areas from buying American products.”

This is the underlying motive of all the deals between the capitalist gangsters. Churchill’s pitiful supplications in Parliament about the “unsordid” acts of American imperialism are so much eye-wash. America may extend further aid to Britain, as she did in the war, but inevitably it will be at a price. All the attempts at dignified editorials—that Britain is not a supplicant and cannot become a helpless satellite—cannot mend or alter the hard economic facts.

Britain cannot even rely with any certainty upon the continued dominance of her own Empire.

Unfortunately for the capitalist class, as the Observer points out in the same article quoted above, Britain is not in a position to stand up to a trade war with America, because America exports enormous quantities of goods on credit, which the British capitalists are unable to do. Not only that, but America can export goods cheaper than Britain can, owing to more modern techniques and thus greater production of labour. At best, even if the British manage to patch up some sort of compromise with the grasping financial overlords of America, the outlook for the masses is indeed a bleak one.

The whole of the press, including the so-called Labour press, is demanding a programme of “austerity and sacrifice” in order to rebuild British industry.

The Daily Mail of August 25th warns:

“If the talks fail, the British Government, forced to buy outside the dollar area, will launch an all-out export drive. This would mean big cuts at home in food, clothing— especially cotton goods—tobacco, petrol and luxury goods.”

Thus even the meagre standard of living of the British workers during the war, will not be maintained but will sink to lower levels.

Whatever the results of the talks, the ruling class in Britain is preparing the greatest onslaught on the standards of living of the masses that they have known for generations. Because of the mood of the British workers, the capitalists and the Labour leaders have not dared to speak openly of wage cuts. But in effect— with the cutting down of overtime, maintenance of crippling taxation on necessities, income tax, speed-up and price increases by disguised inflation—real wages will be cut disastrously if the capitalists have their way.

Not only to get British imperialism to toe the line, but to keep the Labour leaders in order, has American imperialism struck this blow. It is a warning to the Labour leaders not to take any measures against private enterprise, because of their fear of the reactions this would have on the workers in the rest of the world. Captain L. D. Gammans gives a broad hint in the same article quoted above, of the necessity to negotiate some financial agreement with America:

“Will the advent of a Labour Government make that task easier or otherwise?

It is impossible to say at the moment. It will largely depend upon the extent to which Mr. Attlee can control his own extremists and be prepared to swallow some of his more extravagant election promises.

One thing is quite certain: American financial aid will not be forthcoming to bolster up schemes of nationalisation which in themselves are not economically sound.”

That the Labour leaders should accept such blackmail is intolerable.

It is possible, and most likely, that America will make some concessions to British imperialism. Not out of kind-heartedness, but out of fear of revolution in Britain and the repercussions this would have in ruined Europe and Asia. America has achieved world domination, but it is a domination of ruins, as Trotsky said, with the danger of explosions all over the world. In order to maintain a fairly stable base against Russia, America will keep Britain going. But only on rations, like Britain rations her colonies or semi-colonies.

To try and solve this problem on a capitalist basis is hopeless. It can only mean further misery and insecurity for the masses in Britain and throughout the world. It will solve nothing, even if the masses surrendered to the blackmail of the capitalists. It could not alter the declining position of British imperialism. A trade war, with or without agreement with America, is still inevitable because of the monstrous contradictions between increased productivity and the purchasing power of the masses. It can only prepare the way for a new world-wide slump, which will make the slump of 1929-1933 seem the height of prosperity.

On this road there is no way out, yet instead of giving a clear call of anti-capitalist struggle against the City of London as well as against Wall Street, the Labour Government is proclaiming the necessity for the British people to tighten their belts and work harder. Even before the Lend-Lease crisis, they had announced cuts in clothing and other commodities.

This road can only lead to the rapid disillusionment of the masses and the strengthening of reaction.

The British workers would be quite willing to make sacrifices, if it was really to build a new world. But they cannot and they will not tolerate the same old vicious circle of wage cuts, unemployment, and then a new war, which the present “continuity of policy” means.

Let the Labour leaders take warning. The masses voted Labour in power because they wanted a sharp break with the old rotten system of capitalist exploitation. If the Labour leaders took real measures against the capitalists, the crisis could be overcome. When the Labour leaders in Russia were in power after the first revolution of February 1917, the same Wall Street and the same City of London exerted pressure upon them to tread the path of “continuity of policy” of capitalism. This resulted in chaos and misery for the Russian masses. But the Bolsheviks made a clean break when the Labour leaders failed, and they seized control. They took over the land, the mines, banks, factories, the railways—without compensation to the capitalists—and placed them under the control of the working class. Even a backward country like Russia, with its feeble industrial economy, achieved marvels on this basis. Britain would achieve even greater marvels. This is the road out in the interests of workers.

The Labour leaders are capitulating to the blackmail of Big Finance. This is the road to disaster. As Lenin said, either with capital or with the working masses, there is no middle road. Through the local Labour Parties and Trade Union branches and mass meetings, the workers must demand real measures against the capitalists.

The only road out lies in working class internationalism. Capitalism has turned the world into a mad-house of conflicting economic rivalries, state boundaries, tariff walls, culminating in military conflicts. On the basis of a decisive stand against capitalism in Britain, the workers could appeal to the European, Asiatic and the American masses to assist them in a joint plan of building a new world of socialist peace and plenty, on the basis of a socialist planned economy.

Sacrifices in the interest of a planned socialist economy would be worthwhile, because they would rapidly guarantee a rising standard of living on the basis of an abundance of goods produced in the interests of the many and not for the profit of the few.

Demand the Labour leaders take action against the capitalists, not capitulation to them!