Economic Recovery in Great Britain

Report Outline
American and British Recovery Policies
Course of British Recovery After 1931 Crisis
National Government's Recovery Measures
Adherence to Policy of Balanced Budget
Special Focus

American and British Recovery Policies

Promotion of Recovery and Reform in Great Britain

Advocacy by the Roosevelt administration of a new relief and recovery program which will further enlarge the federal deficit and possibly lift the public debt to a figure in excess of $40,000,000,000 has caused opponents of pump priming to point to Great Britain's achievement of a greater measure of recovery than the United States without seriously unbalancing the British budget or greatly increasing the national debt. The impression ha become widespread in this country, moreover, that the London government in combating the depression has followed a hands-off policy toward business. Accepting such assumptions, many critics of the Roosevelt administration have concluded that Britain's more favorable economic position today results from an absence of governmental interference with business as well as from the assurance given by a succession of balanced or nearly balanced budgets.

Even when the recovery drive in this country was in its early stages, attempts were made in some quarters to discredit New Deal policies by references to the British example. In a fireside chat, September 30, 1934, President Roosevelt took issue with those who “would have you believe that England has made progress out of her depression by a do-nothing policy, by letting nature take her course.” He said he did “not believe any intelligent observer can accuse England of undue orthodoxy in the present emergency.” More recently, Raymond Gram Swing, American newspaper correspondent formerly stationed in London, described as “grotesquely mistaken” the assumption that recovery was achieved in Great Britain “by adhering to the old-fashioned wisdom of letting things alone.” “The government,” he said, “has stepped in, gingerly it is true, but with utter disregard of the proprieties of laissez-faire.”

While the British government has not sponsored great public-works or other pump-priming programs of the kind undertaken in this country, it has initiated many measures, of both a general and special nature, to promote recovery. Nor has reform been neglected, for in numerous cases government aid to particular industries has been forthcoming only upon compliance with stipulated conditions designed to correct fundamental economic ills. Some of the steps aimed at recovery and reform have been far-reaching. D. Graham Hutton, assistant editor of the London Economist, has stated that “between the financial crisis of 1931 and the beginning of recovery early in 1933, the National Government effected at least four major economic revolutions in the British economy,” which “had they been attempted by an administration that was not a Conservative one … would have been execrated as ‘Bolshevistic.”