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H. V. Berry thinks the Labour Party should take the line suggested in the enclosed (a cutting from The Times). Hopes that Attlee will be able to see Roy Chowdhury before the meeting of the Select Committee (on Indian Constitutional Reform).

Thanks him for Harrod’s letter (1/60). Has advised the press that there is no objection to the information being sought, provided questions are reasonably put.

Proposes various measures in connection with the War Savings Bill.

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Transcript

21st. August. 1940.

Dear Clem,

I had a talk with Kingsley yesterday about the War Savings Bill, and as you probably know we are proposing at the Party Meeting to-day to appoint a small committee to go into this.

As you will remember, this question arose out of the talks that we had with the Policy Committee of the T.U.C. regarding the Keynes plan and the T.U.C. rightly maintained that before they could possibly associate themselves with the recommendation to the workers to save during the war, they must be assured that such savings would not be used when the war was over either by the employers or by the State to reduce the position of the workers.

It is therefore essential in my mind, that it should be new savings and not transferred capital that should form the basis of the Government promise, and any proposal to transform the Bill into a general disregard of all savings, including pre-war, would entirely fail to meet the case though possibly some arrangement might be come to with regard to holdings converted up till last week’s debate.

On the other hand, I am quite sure that the real gravamen of the heat developed in the Labour ranks, is due to our old enemy the Household Means Test, which so long as it remains, will be a constant irritant.

I therefore suggested to Kingsley, that he should seriously consider some gesture with regard to this vital matter and I would like you and he and Arthur to put your heads together to see whether something of this kind could not be done. I am turning over the matter in my own mind. I do not believe that it necessarily need cost a very great deal if it were done on reasonable lines.

I know of course, that the Labour Party have maintained that there ought to be no Means Test of any kind at any rate for Unemployment Assistance, but I do not think that this can be defended either for Unemployment Assistance or for Old Age Pensions. On the other hand, it is humiliating that a member of the household of the applicant should have to undergo a detailed examination of all his resources including savings before the grant to the old person or unemployed living with him, is considered. After the holiday is over, this matter must be faced and dealt with.

I hope you will get something of a change while Parliament is not sitting.

Yours sincerely,
[blank]

Rt. Hon. C. R. Attlee, M.P.,
House of Commons,
S.W.1.

P.S. In turning out my papers & clearing my desk I came across the enclosed which came a few days back. I cannot help feeling it is a most valuable suggestion

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The postscript is handwritten.

With regard to the enclosed (not identified), his advisors think it ‘exceedingly unlikely that the Government are doing anything of the kind, particularly as the Italian talks are going badly’.

Is still investigating her inquiry as to whether Gladstone made a certain remark about agricultural labourers.

Supports the suggestion that, if Elizabeth Robins were given permission to come to England, she might speak and broadcast on Anglo-American understanding.

Is going away for two or three weeks. Will discuss the matter (the proposed mission to Russia) further on his return.

Harben has sent him Cole’s prospectus of the proposed mission to Russia. Asks for further details.

Explains his objections to Cole’s plan of nationalising the joint-stock banks (see 1/160–1 and cf. 5/43–4 and 5/47–8).

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Transcript

7th. June, 1932.

Dear Cole,

Many thanks for your letter and enclosure. Dalton had already told me that you were going to get into touch with me and I have been looking forward to hearing from you.

Let me begin with the last paragraph in your enclosure. I am in entire agreement with this. I do not think we shall get anywhere at all if we pot† out the Bank of England to some committee or other, and do not leave it under the direct immediate control of the Chancellor of the Exchequer or whatever Cabinet Finance Minister is in control of the banking and credit policy of the country.

Now let us see what this involves. The Bank of England is a gigantic institution whose policy is interwoven with the whole finance of the world, and by long experience there has been built up a tradition of which the Governor of the Bank is the servant and the exponent. His court to a lesser extent has together traditional knowledge which enables them to modify his judgment in carrying out this policy.

According to the ideas which you and I share the Government Finance Minister will have to get on top of all this. He will have no existing civil servants to help him for at the Treasury at the present time there is practically no direct knowledge of banking, either of central banking or joint stock banking; and unless therefore the Minister can himself understand the larger details of central banking he will be merely a tool in the hands of the bankers whom he takes over to do the day to day work. It seems to me to be unquestionable that this is therefore a whole time job and that the bank officials will (however they may be called) have to become in effect civil servants.

Now you want to nationalise simultaneously all the Joint Stock Banks in the country. How is the actual work of governing them going to be done? There are at present as I have already said no civil servants who know practically anything about it. To-day, in the Head Offices alone there are a great number of highly trained bankers who have done this business for years and who handle all the larger detail. Apart from them, there are an immense number of smaller fry who have quite important functions to perform in the different branches up and down the country. If the Government is going to nationalise all the Joint Stock Banks all these officials are going, in effect, to become civil servants; and all the work that they do is going to become government work; and all the major directions of policy in all these things will have to be government business.

I cannot envisage the minister who is controlling the Bank of England having any time or brain left to perform this colossal task for the Joint Stock Banks. You may say perhaps that an additional Minister could be appointed to do this. But this will not really meet the case because however many Ministers be appointed, many of the intricate details will really have to be Cabinet business. You may perhaps alternatively say that only a few really large issues will have to be decided by the Minister, and of course it is true that under no circumstances will every detailed transaction of every individual branch bank have to come before the Minister. Nevertheless I am quite sure that the number of decisions which would have to be taken at the top would be far too numerous to be made a part time job for an already occupied Minister.

My main objection therefore to attempting to nationalise both the Bank of England and the Joint Stock Banks in the first year or two of a Socialist Administration is that it is essential that the work of directing shall be well done. I cannot conceive of a Socialist Government performing effectively the double untried task of managing both the Bank of England and the Joint Stock Banks.

Compared with this major objection other objections are of minor importance: and yet I think they should be stated. However much we short-circuit the procedure, the Bill to nationalise the Bank of England will take a considerable amount of parliamentary time; and there is bound to be a demand for parliamentary time to be available for other measures which the Socialist Government will want to carry. I believe that the inclusion of the Joint Stock Banks will need a further very large part of parliamentary time which the Government would have a difficulty in providing.

There is an argument for taking a bold comprehensive course (this has been metaphorically referred to as not taking two bites at a cherry or not blunting our spearhead). On the other hand there is political wisdom in dividing our enemies. We should get much support to-day for nationalising the Bank of England which would be lost to us if we proposed also to nationalise the Joint Stock Banks. We can afford to take a lesson out of the notebook of our opponents, recollecting the Derby Scheme for Conscription during the War. (Metaphorically, not taking two bites at a cherry does not necessitate eating the whole bag of cherries at once.) We are also entitled to take into account the opposition of the Co-operative Party to nationalising the Co-operative Wholesale Bank, which would of course share the fate of the Joint Stock Banks.

You fear that ownership of the Bank of England alone will not give us the necessary power to cause an expansion in industry because you say that open market transactions alone are not sufficient for this purpose. The real question is however whether all the instruments in the hands of the Bank of England plus all the instruments in the hand of the Government would be sufficient. You do not forget I am sure, that the Government has power to engage in Capital Enterprises on borrowed money. What has prevented the effect of this policy in the past has been that while the Government was pulling this way the Bank of England was pulling the opposite way and deflating, or at any rate, was neutralising the Government’s action owing to its desire either to return to the Gold Standard or to stay on it when it was there. Quite clearly a Government freed from the Gold Standard and with the Bank of England in its control could inflate if it wished to. (Because if it were not so, the Government could win universal popularity by remitting all taxation and borrowing and spend lavishly.) Of course I do not want inflation but stability of the price level.

Finally, you are afraid of an attempt by the Joint Stock Banks to sabotage the credit policy of a Labour Government by not expanding credit when they have the chance. I do not regard this as very likely because all these years some of them have been complaining against the Bank of England and calling upon it to enlarge its basis of credit. But it might happen. I am more afraid that the Joint Stock Banks might misuse the credit provided for them. You suggest that the vague power of control which the Bank of England possesses over the Joint Stock Banks will not be adequate. That is probably true, but this will be augmented by 1—the general power of a Government to get its view enforced and 2) as I envisage it, the special powers of control over the whole finance of the country which I think the Government ought to obtain at the outset. You will perhaps ask what form this general power of control is going to take? My view is that we ought to enact a kind of financial D.O.R.A. But I do not think this is a thing which we should talk about openly. Of course if the worst came to the very worst and we were resisted on all sides, we might be compelled to put D.O.R.A. into operation in the shape of nationalising the Joint Stock Banks. But I think this is very unlikely as the financial magnates of the country really do come to heel to a Government which is determined and which has public opinion behind it: and quite clearly we could not nationalise the Banks unless we had these prerequisites.

Yours sincerely,
[blank]

G. D. H. Cole Esq.,
7, Parsifal Road,
London, N.W.6.

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† Sic.

It is precisely because he wants the next Labour Government to begin socialism in earnest that he opposes a scheme of nationalisation (see 1/162) ‘which looks well on paper but … will not amount to very much in practice’.

Sends a brochure by Sir Alan Anderson and a copy of his own comments on it (see 1/53). Has been working on his autobiography. Is going to Scotland for a few days.

Encloses his article (see 3/60b), and asks to have a copy of the newspaper in which it appears. Sir Arthur Shirley-Benn replacing Sir Robert Horne on the Council of the Inter-Parliamentary Union.

Suggests arrangements for a meeting.

(The addressee’s name is misspelled ‘Neissen’.)

Expresses his opposition to any change in policy that would lead to the bombing of residential districts in Berlin.

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Transcript

9th. March, 1943.

Dear Herbert,

Bombing of Berlin.

I am writing what are my own views but what to my knowledge represent the feelings of a number of other people with regard to the bombing of Berlin.

I am not squeamish about injuries inflicted on civilians. We have all got to take the risk and the Germans least of all people have any right to complain if their civilian women and children are visited by the same fate that they have inflicted on other nations.

Nevertheless, I personally only support the bombing of German cities provided the main intention is the destruction of military objectives, construing the term pretty widely to include not merely munition works, but railway depots and centres of communication generally. If a few civilians get killed accidentally when aiming at targets of military importance, I am not going to be squeamish about it.

But I do not believe in bombing residential districts as such. For one thing I regard it as a waste of good bombs. I do not attach value to the notion that it weakens morale. It might do so with a cowardly nation. But there is no reason to suppose that the Germans, though they have many grievous faults, are cowards. Our own experience teaches us that bombing stiffens our resistance and makes us more determined to fight on to the bitter end.

If then the arguments for and against bombing civilians are roughly equal, it seems to me to be better to avoid doing so in view of the fact that so doing will make reconstruction after the war more difficult.

In writing the above, I am not suggesting that we have changed our bombing policy from attacking military objectives to attacking civilians. It may be that our policy remains as before. I do not know, but if so, I am writing lest a change should be contemplated and you will no doubt give such weight as you think proper to my point of view.

Yours sincerely,
[blank]

Rt. Hon. Herbert Morrison, M.p.†,
Secretary of State for Home Affairs.
House of Commons, S.W.1.

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† Sic.

States his objections to recent alterations in black-out regulations. Recommends measures to be taken after the war in connection with the black-out, single summer-time in winter, and double summer-time.

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Transcript

22nd. August. 1944.

My dear Herbert,

I accepted without protest but without enthusiasm your decision to prolong double summer time this year, recognising that you are in a position to judge better than anyone else where the balance of wishes lies.

But for the life of me I cant† see why it was necessary to rob us of the extra quarter of an hour non-black-out at each end of the day so long as double summer time lasts. It could not have been of the least use to the Germans to have a few minutes of twinkling lights in the dusk of evening or semi-twilight before dawn, and the alteration has been a nuisance to people who get up early. However this is a very small matter which cannot be reversed now and before it can arise again we all hope the European war will be over.

The purpose of this letter is to direct your attention to three matters which will arise when Ger-many gives in.

(1) The Black-out. Though there are many cranks, I cannot imagine that there are any black-out fans who will want to continue black-out on account of the war with Japan. Therefore I take it for granted that the black-out will be lifted. The point I want to make is that you should have arrangements made to announce this, and to get the Local Authorities to lift the black-out in the streets, the very day that the armistice (or whatever form the capitulation of Germany takes) is declared. There will probably be demonstrations all over the United Kingdom that very night (which may well be in the winter) and, if the black-out is still on, deaths and injuries are very likely to arise.

(2) Single summer time in winter. There are of course some people who habitually breakfast at 9 o’clock who regard a shift of hours as a net gain of an hours† daylight in the day. But for the rest of the peopulation† who get up to go to work, summer time in winter simply transfers an hour of dark in the evening to the morning and in reality means that they never see their homes in day-light, except on Saturday afternoon and Sunday, for some five or six months in the year. It seems to me that, if people want this rearrangement of the day, the right way would be to alter business hours generally and not to play about with the clock. In any case I suggest to you that it is a mat-ter for Parliament and not for the exercise of your war-time powers (when the German war is over).

(3) Double summer time. I am a firm believer in single summer time in the summer for as along a period as the House of Commons decides. As to double-summer-time I recognise that a good many people like it while many others do not. I suggest to you that when the German war is over this too is a matter on which only Parliament (assisted no doubt by the Government) is really competent to come to a decision.

I trust that the Parliamentary recess has meant some relaxation if not a holiday for you.

Sincerely yours,
[blank]

Rt. Hon. Herbert Morrison, M.P.,
Home Secretary and Minister for Home Security,
Home Office,
Whitehall,
S.W.1.

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† Sic.

Writes in support of Elizabeth Robins’s application to return to England (see 3/283-4), enclosing relevant correspondence. Suggests that a broadcast by her might be used to promote Anglo-American relations.

Will pass the information on to the right people.

States his objections to double summer-time and to single summer-time in winter, and expresses the hope that these measures will not be continued after the war.

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Transcript

9th. March. 1943.

Dear Herbert,

I was glad to see that you said in the House that it was premature to make any statement with regard to the continuance of “Double Summer Time” after the war. I should like you to appreciate the feelings of a countryman with regard to both questions of “Double Summer Time” and the continuance of “Single Summer Time” through the Winter.

We get up about six o’clock every morning. That means under the present arrangements that we have been getting up in the dark for about five months and that those of us who breakfast about seven had to have it in the dark for about four months. Just as it will be getting light when we get up, down comes upon us “Double Summer Time” which means a further three weeks getting up in the dark.

“Single Summer Time” in the Winter also had the disadvantage that the frost is not off the ground until quite late in the morning, and neither garden nor field can be worked in the hours following on breakfast.

“Double Summer Time” means similarly, that at any rate in the month after it begins and the month before it ends, the fields and the garden are saturated with dew long after work on them should begin.

At the other end of the day there is of course more light, but we do not want to have the nicest working time of the day after supper in the evening and we do not want to have to go out and water the garden near the time when we go to bed, which is our first opportunity of so doing because up till then the sun is too powerful.

While the war is on we acquiesce in temporary changes which are we understand desired by industrialists, though many of them I am sure hate getting up in the dark as we do. But we hope the Home Office will refuse, after the war, to continue changes which are advocated partly by those late risers who never get up in the dark in any case, and who imagine that “Summer Time” and “Double Summer Time” add one extra to the hours of daylight.

Yours sincerely,
[blank]

Rt. Hon. Herbert Morrison, M.P.,
Secretary of State for Home Affairs.
Home Office, Whitehall,
S.W.1.

Is sorry they could not come to a better agreement at yesterday’s Finance Committee meeting. Explains why he thinks that the Treasury Minute must be abrogated, and asks for Dalton’s views.

Will try to speak to the Cambridge Indian Majlis (see 1/178) after his debate at St Catherine’s. Will send a copy of the evidence he intends to give to the Colwyn Committee nearer the time. Intends to go with the Inter-Parliamentary Union to the United States this year. Encloses a copy of a letter he wrote recently to Dr Lange.

Sends a copy of a speech by Bogomoloff. Miss Goddard has recommended a male guide at Leningrad.

The sub-committee have approved his resolution (see 2/74), with minor amendments. Responds to points raised by Horobin.

Accepts the suggested date for the sub-committee meeting (see 2/75).

Thanks him for his criticisms (see 2/77), but points out the distinction between the memorandum and the questions, which are merely suggestions to be considered by the committee. Passes on comments on the questions by Lloyd and Wise.

Responds to Horobin’s comments on the draft questions (see 2/78).

Has sent him Pell’s book (The Riddle of Unemployment and its Solution). Has not made up his mind about Horobin’s memorandum (on currency), but McKenna agrees with it. Encloses his draft of the financial policy for the Labour Party, together with a copy of an explanatory letter to Dalton.

Commends Keynes’s pamphlet.

Asks his opinion of certain arguments in Abbati’s book The Unclaimed Wealth.

Summarises his recent address to the Free Trade Union Congress on ‘Pitfalls for Free Traders’, which provoked a surprising amount of indignation.

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Transcript

4th. October, 1926.

Dear Keynes,

Your book on “Laissez-Faire” {1} and the paragraphs about it in this week’s “Nation” prompt me to write you a word for your personal interest only, with regard to my visit to the Free Trade Union Congress at Manchester and my address on “Pitfalls for Free Traders” which I delivered to them.

I set out to establish five points:

1) That free traders were unwise if they said without qualifications when a new duty was being imposed that the price of the article would rise. I quoted artificial silk and motor cars as an illustration.

2) I urged them to disentangle free trade meaning free imports, from free trade meaning laissez-faire and unlimited individual competition.

3) I warned them that in opposing Imperial Preference, the argument based on the idea that the preference given to our traders in Australia was quite worthless, was rather a dangerous one to maintain.

4) I warned them that the doctrine of exports balancing imports was only true when invisible exports and imports were taken into consideration, and said I was doubtful whether any economists to-day (when there are pools of unemployment in various countries, unstable and artificial exchanges, and politically created loans, reparations, etc.) would be prepared to put his hand upon his heart and say that the current effect of an order for a million pounds placed abroad, would be identical with the same order placed at home.

5) I warned them that free traders must not be indifferent to labour conditions if they wanted to continue to have the support of the majority of the people of this country, and that though I thought tariffs were the wrong way, some consideration ought to be devoted to the question of production under sweated conditions in other lands.

I was purposely controversial but I was hardly prepared for the storm of indignation which I evoked. Every one of my points was very hotly challenged and had there been more time I should have had a torrent of opposition to meet. All the same, one or two of the best men in the meeting afterwards said that though they did not necessarily agree with everything, they thought there was a great deal of truth in what I had said.

Do not trouble to reply to this letter: I thought you would be amused to know how little some of the Manchester free traders have moved with the times.

Yours sincerely,
[blank]

J. Maynard Keynes Esq.,
46, Gordon Square,
W.C.1.

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{1} The End of Laissez-Faire (1926).

Explains why he opposes the introduction of compulsory saving.

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Transcript

22nd. November, 1939.

Dear Keynes,

Thank you for your letter. I am glad you like the speech I sent to you.

Of course I read with great interest your articles in The Times on compulsory saving as indeed I do everything of yours that gets into the public press, and I have thought about your proposal a great deal. I have not read Greenwood’s article so I do not know the line he took with regard to them.

I fully appreciate the motives that underlie your scheme and I recognise that if we have inflation during the present war the people who will be hardest hit will be the very poor who have tiny fixed incomes. At the same time I should not be frank with you if I did not add that I do not favour compulsory saving if it can possibly be avoided. The cirsumstances† of individual people are so different that what would be too small a modicum for some of them would be an impossible burden for others and would lead in my opinion to very great difficulty for them and give rise to much unemployment.

In any case you will probably agree that the time for the adoption of any compulsory scheme has not yet arrived while there are still a million and a half industrial workers unemployed as well as large numbers of people in the middle classes who are not included in this figure.

I therefore for the present prefer to see voluntary saving going forward. If the time should ever come when this proves inadequate some scheme of compulsory saving may have to be adopted. But it seems to me that such a scheme would have to include much more drastic proposals even than yours to prevent persons with other means selling capital and so evading the effective control of spending that you wish to enforce. Would it not be necessary for instance to close the Stock Exchange and prohibit other forms of realising capital? These in turn would create fresh difficulties of their own.

With regard to your suggestion that you should come to discuss this with myself and others at the House of Commons some day in the middle of the week, I have not had an opportunity yet of mentioning this to my colleagues; but for my own part and I am sure for some of them, it would be a very interesting experience as you have always so much light to throw on economic problems.

Yours sincerely,
[blank]

Professor J,† Maynard Keynes,
King’s College,
Cambridge.

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† Sic.