1939: Great Britain

The chief event in British history in 1939 was undoubtedly the opening of the war with Germany. Yet the year had run two-thirds of its course when, on Sunday, Sept. 3, at eleven o'clock in the morning, the ultimatum that the British Government had addressed to the German Reich expired, and a state of war between the two nations was declared. During the first eight months of 1939 Great Britain was at peace. Then near the end of the summer, came the outbreak of war.

The island of Great Britain, which includes England, Scotland, and Wales, has an area of 88,735 sq. mi. and a population of approximately 46,000,000 (census of 1931 — the latest). Another 296 sq. mi. are added by the Isle of Man and the Channel Islands; their population is included in that of Great Britain. The four Channel Islands — Jersey, Guernsey, Alderney, and Sark — are the only parts of the duchy of Normandy, which remained in the possession of the king of England when Normandy was annexed to the kingdom of France early in the thirteenth century. The principality of Wales was incorporated into England in 1284. Scotland has had the same sovereign as England since 1603, when James VI of Scotland became James I of England; and since 1707 the two kingdoms have formed the kingdom of Great Britain. Politically, Northern Ireland is a part of the United Kingdom. The constitution of Eire states that 'the national territory consists of the whole of Ireland, its islands and the territorial seas,' but follows this with the important proviso that 'pending the reintegration of the national territory . . . the laws enacted by that Parliament shall have the like area and extent of application as the laws of the Free State.' This means that the six northern counties are not yet a part of Eire. Northern Ireland has its own government, and sends thirteen members to the British parliament.

Great Britain is a limited monarchy. The present monarch, George VI, is the second son of George V. He was born Dec. 14, 1895, and became king on the abdication of his brother, Edward VIII, Dec. 10, 1936. His consort, Queen Elizabeth, is a daughter of the late Earl of Strathmore, a member of one of the oldest of Scottish noble houses. The heir apparent to the throne is their daughter the Princess Elizabeth; there is also a younger daughter, the Princess Margaret Rose. For the most part the powers of the Crown are not exercised by the sovereign, but by his minister, at present the Right Hon. Neville Chamberlain, who took office on May 28, 1937.

Government.

Great Britain is the outstanding example of a country with a responsible government, that is to say, a government by an executive that is responsible to the legislature. The doctrine of the separation of powers, so familiar to all Americans, is unknown to the British constitution which provides, instead, for a fusion of the executive and legislative organs of government. The British executive, the Cabinet, is a committee of the legislature and its tenure of office depends upon its retaining the support of the majority in the House of Commons.

The British Parliament is bi-cameral, the House of Lords and the House of Commons. The advance of democratic principles in the nineteenth century gave to the House of Commons an overwhelming preponderance; since the passage of the Parliament Act of 1911 the House of Lords has been definitely subordinate to the Commons. By this Act, any money bill passed by the Commons and sent to the Lords at least one month before the end of the session becomes an act within one month whether passed by the Lords or not; on any other public bill the Lords have only a suspensive veto, which prevents enactment for two years. The Speaker of the House of Commons certifies that a bill is a 'money bill'; but there is no legal definition of 'public bill' — each House determines whether a measure it is considering is public, private, or hybrid. Any measure is to be regarded as rejected by the Lords if it be altered by amendments which the Commons will not accept. The House of Lords has a membership of about 740, but its total voting strength is somewhat less. It is made up of (a) peers who hold their seats by hereditary right, including, of course, new creations; (b) peers who are elected to membership in the House; and (c) peers who are in the House by virtue of their office. Group b is composed of the twenty-eight members of the Irish peerage who are elected to the House for life, and sixteen Scottish peers who are elected for the duration of each successive parliament; group c includes the Law Lords, the two archbishops, and twenty-four bishops of the Church of England. The House of Commons has a membership of 615, elected by universal suffrage. Clergymen of the Church of England, the Church of Scotland, and the Roman Catholic Church are ineligible for election to the House of Commons, as are also peers, convicts, and persons legally adjudged to be insane. The Parliament Act of 1911 fixed the maximum duration of a parliament at five years; but parliament is competent to prolong its own life. Such a prolongation took place during the World War, so that the country would not be disturbed by general elections; and it is not inconceivable that the present parliament, elected in 1935 and so due to come to an end in 1940, may similarly prolong its own life.

The British Government is the ministry, or, perhaps, the Cabinet. The Cabinet is not a legal entity; it is a meeting of the more important ministers, and the only notification of membership is an informal invitation from the Prime Minister. The present Prime Minister, the Right Hon. Neville Chamberlain, took office on May 28, 1937, succeeding Stanley Baldwin, now Lord Baldwin of Bewdley. There are some eighteen cabinet ministers who are invariably included in the Cabinet; others may or may not be included. Twenty seems now to be the minimum number of Cabinet ministers. In the year 1939 there were twenty-one Cabinet ministers and eight other ministers.

There have been a number of changes since the present government took office, each year witnessing some reshuffling of portfolios. Several changes were announced on Jan. 28, 1939. Sir Thomas Inskip became Secretary for the Dominions (an office that Mr. Malcolm MacDonald had held for a short time with the Colonial Office); Admiral of the Fleet Lord Chatfield succeeded Inskip as Minister for the Coordination of Defense; Sir R. H. Dorman-Smith, M.P., became Minister of Agriculture in place of Mr. W. S. Morrison, who succeeded Lord Winterton as Chancellor of the Duchy of Lancaster; Lord Winterton accepted appointment as Paymaster General and left the Cabinet. About three months later further ministerial changes were announced; a new ministry, the Ministry of Supply, was set up under Mr. Leslie Burgin who had been Minister of Transport; Captain Euan Wallace, financial secretary to the Treasury, succeeded Mr. Burgin as Minister of Transport; Captain H. C. F. Crookshank, Minister of Mines, took Captain Wallace's post at the Treasury, and was himself succeeded by Mr. Geoffrey Lloyd, parliamentary under-secretary for the Home office. Mr. Burgin and Captain Wallace were given seats in the Cabinet, increasing its size to twenty-three. Further changes, which were occasioned by the war, will be noted later on.

Visit of the King and Queen to Canada and United States.

That the sovereign plays an important rôle in the British Empire even though it may accurately be said that he neither reigns nor rules, was strikingly exemplified in the visit paid by King George and Queen Elizabeth to British North America and to the United States in May and June. They sailed on the Empress of Australia on May 6. The primary purpose of this transatlantic voyage presumably was to intensify the loyalty of the King's subjects in the Dominion of Canada and the other British provinces in North America. The King and Queen crossed the continent and were everywhere received with enthusiastic demonstrations. After returning from the Pacific coast they paid a short visit to the United States. Their majesties crossed the border June 7 at Niagara Falls, where they were met by the United States Secretary of State, Mr. Cordell Hull, and proceeded straight to Washington. At Washington they were greeted by President and Mrs. Roosevelt, whose guests they were, at the White House and at the Roosevelt family home at Hyde Park, during their brief visit in this country. The enthusiasm with which King George and Queen Elizabeth were welcomed in the United States was without political significance; it was the spontaneous expression of American hospitality, heightened by the natural grace and charm displayed by the distinguished visitors.

Unemployment.

The figures for unemployment in the first half of the year 1939 showed a marked improvement over conditions in the preceding year. The number of unemployed in the month of January was 2,039,026, the highest figure since January 1936; but succeeding months showed a sharp decline. The figure for March 1,726,929, was the lowest since December 1937. The figures for the next four months are: April, 1,644,394; May, 1,492,282; June 1,349,579; July 1,256,424. The number of the unemployed in July was the lowest since October 1929. It was officially stated that of the persons unemployed on July 10, 23 per cent had been unemployed for twelve months or longer. The smallest number of unemployed persons in any of the first ten months of the year 1938 was 1,747,764; so it is obvious that in this important particular the year 1939 saw a marked improvement in Great Britain. The figures are those of registered persons between the ages of 16 and 64. The number of insured persons between the ages of 16 and 64 who were employed, other than in the agricultural scheme, was estimated in June at 12,810,000.

From July 1, boys and girls under sixteen years of age employed in factories and work shops were put on a 44 hour week.

Imports and Exports.

Despite the increase in employment, in 1939 there was a decline in British trade in terms of imports and exports.

The figures for exports include the value of reexports, goods not of British manufacture. Reexports in March were £4,923,288; in May £5,012,363; in July £3,725,253. It should be noted on the other hand that while both exports and imports decreased somewhat in value in 1939 from the 1938 figures, the excess of imports over exports was less in the first six months of 1939. The unusual combination of an increase in employment and a decline in trade may be explained by the decrease in the money value of some manufactured goods.

Marine Construction.

In the important industry of ship building the first part of the year witnessed a sharp decline. At the end of March there were 129 merchant vessels, with a total tonnage of 596,903, under construction in British ship yards. This was 182,859 tons less than the figure for the end of December 1938, and 492,174 tons less than the figure for the previous March.

This decline in ship building related to the merchant marine only; naval construction was being pushed with rapidity. In January a river gunboat, the Grasshopper was launched at Southampton and two destroyers, the Kipling and the Kelvin were launched on the Clyde. The 35,000-ton battleship, King George V on Feb. 21, and on May 3 its sister ship the Prince of Wales, were launched at Birkenhead. These, the first battleships to be built in England in fourteen years, are equipped with ten 14-inch guns and sixteen 5¼ inch guns. A serious naval catastrophe was the loss of the submarine Thetis on a trial run on June 1. Of the 103 men aboard only four were saved. There was a delay of 19 hours before the position of the submerged vessel was discovered, a fact which gave rise to a good deal of criticism. This delay and the great loss of life on the Thetis were contrasted with the prompt action of the United States Naval Authorities in the rescue of a large part of the crew of the Squalus.

Irish Republican Army Outrages; Other Casualties.

The year 1938 saw the settlement of several matters in dispute between the British Government and the Government of Eire: land annuities, defense and trade. There remained only the question of Northern Ireland, now a part of the United Kingdom, but which the Government of Eire claims must be eventually united with the rest of Ireland. There is no clamor for any immediate step in this connection, but in 1939 there occurred in England a series of outrages perpetrated by men who styled themselves members of the Irish Republican Army. It was stated that these acts of violence would continue until the British Government had severed all connections with Ireland. Bomb explosions on Jan. 16 in Manchester, Birmingham and London were the beginning of a series that continued sporadically for some months. These caused a good deal of damage to property, and also involved personal injury and loss of life. None of the victims was in any way concerned with Anglo-Irish relations or with the exclusion of Northern Ireland from Eire. On July 28 the House of Commons passed a Prevention of Violence (Temporary Provisions) Bill, designed to put down this Irish Republican Army terrorism. It was then stated that since January there had been fifty-seven I.R.A. outrages in London and seventy elsewhere in Ireland. Under the provisions of this Prevention of Violence Act, seventy-nine I.R.A. suspects were expelled from England by the end of August and seven prohibited from entering the country. A number of persons found guilty of these criminal activities were sentenced to penal servitude. The Roman Catholic hierarchy in England publicly condemned the criminal violence resorted to by gangsters who claimed to be engaged in legitimate warfare, and, eventually, the Prime Minister of Eire announced that the Irish Republican Army was an illicit organization in its own country.

Entirely accidental in origin was a gas explosion which occurred in London, near St. Paul's Cathedral, on the afternoon of Aug. 4. More than 100 persons were injured and hundreds of windows were shattered. The explosion caused the collapse of the Doctors' Commons building, familiar, at least in name, to all students of Dickens. As it was to be demolished shortly, this building was untenanted.

In 1939 the perennial and unremitting campaign to reduce the number of deaths and injuries from automobile accidents met with no marked success.

Finances.

For the fiscal year that ended March 31, 1939, the Government accounts showed a surplus of £505,315 before allowing for the Sinking Fund. The amount allocated to the Sinking Fund was £13,219,181, so there was a deficit of £12,713,866. The expenditures for the fiscal year were about £4,400,000 below the original estimate, but the revenue was some £17,465,000 less than had been estimated. The full fixed debt charge was £230,000,000.

The navy estimates for the year 1939-40, published about the beginning of March were £153,666,681. This was the largest amount ever to be spent for this purpose in a peace year, and about £23,500,000 more than the figure for the preceding year. The army estimates were £161,133,000, which was an increase of £46,714,000. Two weeks later the estimates for the air force, £205,000,000, were issued.

The budget which was presented to the House of Commons by the Chancellor of the Exchequer on April 25 provided for a total expenditure of £942,000,000, to be met from revenue, and £380,000,000, to be met from loans. The burden of taxation was noticeably increased. For example, the tax on motor cars was raised from 15s. to 25s. a horsepower; an extra basic tax of 2s. a pound was placed on tobacco; the tax on sugar was increased a farthing a pound. (See also INTERNATIONAL BANKING AND FINANCE.)

Trade and Industry.

Foreign affairs and war preparedness measures at home occupied much space in the British press. The prominence given them during the months of peace meant that less attention than usual was directed to certain normal peacetime activities. The British Industries Fair opened on Feb. 20 in three sections: the lighter industries of the United Kingdom, at Olympia; textiles, furniture, and food stuffs, together with products of India, Burma, the Dominions, and the Colonies, at Earl's Court; the heavy industry section not, like these, in the metropolitan area, but at Birmingham. The Fair called attention to the fact that not only is Great Britain primarily an industrial and commercial country, but that manufacture and trade have a large share in uniting the various parts of the British Empire. On June 23 a barter agreement was signed with the United States, providing for the exchange of about 80,000 tons of rubber for 600,000 bales of American cotton. This was a new type of trade agreement for both signatories but a kind that has been much used in recent years by continental European states. On July 9, the Yankee Clipper of the Pan American Airways reached Southampton on its first regular transatlantic passenger flight. The flying time was 19 hours, 34 minutes. Because of the advent of war, the regular air service thus inaugurated between the United States and Great Britain has proved less important than was anticipated.

Sport.

In the field of sport, two American crews distinguished themselves in the Henley Royal Regatta: Harvard won the Grand Challenge Cup and Tabor Academy the Thames Challenge Cup. It seems somewhat strange that in a nation as devoted to outdoor recreations as the English, no national forest park was established until this year; on Aug. 12 the Forest of Dean, 20,000 acres, was formally opened as a national park.

Foreign Affairs.

Little that occurred in Great Britain in the first eight months of 1939 seems to have much significance apart from those matters which may be regarded as steps toward the European War. In order to have any understanding of why peace came to an end, it is necessary to have in mind a broad outline of the backgrounds of the war. Since 1931 when the Conservatives came into power in the so-called Nationalist-Coalition Government, headed by Ramsay MacDonald, British foreign policy has been consistent, and it has been accompanied by, if indeed it did not cause, a decline in British power and prestige. The Conservative advent to power coincided with the Japanese attack on Manchuria, the first wanton act of aggression by any great power since the war.

The British Government was not willing to join with the United States in a protest against Japan's action, and it allowed to pass unchallenged what has proved to be the first step toward the establishment of Japanese hegemony in eastern Asia. That this has proved costly to British interests in the Far East is a point that needs no emphasis. British subjects, including Government officials, have been treated by Japanese soldiers and officials in a manner which in other days would have caused vigorous counter action by the British Government and perhaps a threat of war. The whole Japanese policy has included the deliberate plan to undermine Britain's position in the Orient. Nearer home, in Abyssinia, the British Government protested against the Italian plan for annexation, then yielded; and by its failure to implement adequately the sanctions against Italy, left the road open for the conquest of all Abyssinia. This same appeasement policy, showing unwillingness to take any step displeasing to the anti-comintern powers has been manifested time and again. The German military reoccupation of the Rhineland, the forceful annexation of Austria by the German Reich, and the dismemberment of Czechoslovakia occasioned no effective protest from the British Government. In Spain, the vigorous support given the Insurgents by Germany and Italy, turned what might have been a local civil war into a democratic-fascist struggle of international significance. Insofar as the British policy toward Spain was neutral, it was a neutrality benevolent to Fascism, though the supporters of Franco and his Insurgents did much damage to British ships. This appeasement policy was not carried on without objections, even within the ranks of the Conservative party. Mr. Neville Chamberlain's insistence on maintaining peace at any price, though for a time the price was paid by Abyssinia, Austria, Czechoslovakia, and republican Spain, brought Great Britain close to the brink of disaster. Of course there is something to be said in defense of this appeasement policy; for instance, British unpreparedness for war.

War Preparedness.

The Czechoslovak crisis of September 1938, at once brought Britain close to war and demonstrated the country's unpreparedness. In 1939, though the authorities hoped for and expected the continuance of peace, they made ready for war. Early in January plans were announced for the evacuation of children from areas that were likely to suffer from hostilities. These areas included all the metropolitan boroughs and most of the leading industrial, shipping, and naval centers. Late in March Prime Minister Chamberlain stated in Parliament that the Government had determined that the territorial field army, then on a peace basis of 130,000 should be raised to a war basis of 170,000 and then doubled in size. A month later, on April 26, Parliament was informed that the Government intended to introduce a conscription measure. The text of the Government's Military Training Bill was issued on May 1. It required every male between the ages of 20 and 21 to register for military service, to undergo continuous training for six months, and then to serve for three and a half years in one of the auxiliary forces. The Act compelled employers to reinstate men after their six months' service. Under the terms of the Act, 219,964 registered on June 3, of whom 3,775 claimed to be conscientious objectors. Before this, provision was made toward protecting the civilian population against air raids. The House of Commons was told in March that the Government had 50,000,000 ordinary gas masks, 940,000 special masks for men who would be outdoors during raids, and had ordered 1,400,000 gas helmets for babies.

Another step was the making of millions of steel shelters, the purchase of which was to be limited at first to persons living in areas most exposed to aerial attack. The country was divided into twelve districts (ten in England, one each in Wales and Scotland) for administrative purposes in case of war; this was announced at the beginning of May. In the summer, preparations were completed to compile a national register in case of war, so that every person, including children, would be given an identity card. On May 4 the Home Secretary said in Parliament that nine Germans had been requested to leave the country. That the Government was not unreasonable in feeling some danger of espionage was demonstrated a fortnight later; on May 19, a bricklayer pleaded guilty to stealing plans of the Royal Ordnance Factory at Euxton and selling them to Germany. He was sentenced to ten years' penal servitude. Despite defensive measures and alarms it is clear that the British Government in the late spring and early summer of 1939 did not believe war was imminent, as evidenced by the transatlantic voyage of the King and Queen.

Events Leading up to the War.

Turning now to the immediate antecedents of the war, it is probably true that the appeasement policy of the British Government was tied up with the hope that Hitler would be satisfied when those parts of Europe inhabited by German speaking people were annexed to the Reich. That hope was shattered on March 14, when German troops marched into Bohemia-Moravia (what was left of the Czechoslovak Republic after the German annexation of the Sudetenland) and extended their jurisdiction over the non-Germanic Czechs and Slovaks. Chamberlain denounced this action as violation of the Munich agreement and recalled Sir Nevile Henderson, the British ambassador to Berlin. The French President's visit to England in the latter part of March was regarded as a gesture of considerable political significance, a demonstration of Anglo-French solidarity. On March 31 Chamberlain announced that Great Britain and France were pledged to aid Poland in case her independence was threatened. Nine days earlier Lithuania had surrendered Memel to Germany, and it was clear enough that Hitler was contemplating a thrust to the east. The British ambassador returned to Berlin on April 23. Five days later, in an impassioned speech before the Reichstag, Hitler derided the plea for peace which President Roosevelt had addressed to him and to Mussolini; he denounced Germany's 1935 naval treaty with Great Britain and her 1934 non-aggression pact with Poland. He also demanded that Poland cede Danzig and a road across the Polish Corridor to Germany. In the note replying to the German official notice of the denunciation of the naval treaties, the British Government denied the charge that Britain was attempting to encircle Germany with foes.

Critics have often said that World War might not have come if the British Government of 1914 had stated definitely that it was prepared to go to war. A like charge cannot be made against the British Government in 1939. On June 29 the British Foreign Secretary warned Germany that Britain was ready to fight; on July 10 Chamberlain gave explicit assurance that an attack on Danzig would cause Britain to declare war, with which British public opinion agreed almost unanimously. The Polish Government had announced that aggression in Danzig would be a cause of war. The Times (London), commenting on Chamberlain's assurance of July 10, said that the issue was not the liberties of Danzig 'but the freedom and independence of Poland and of all the smaller countries of Central and Eastern Europe.' There was no little justification for discounting such statements. The Conservative Government had not abandoned appeasement. On July 20 a member of the ministry, not in the Cabinet, conferred with Dr. Wohlthat, Hitler's economic adviser, regarding immediate long-term credits on a huge scale to Germany. Disclosure of this discussion met first with official denials, followed by an admission by the British Secretary concerned; then Chamberlain told the house of Commons that there was no proposal of a loan to Germany, that the Secretary had merely expressed his personal view. This might have been extremely embarrassing to the Chamberlain administration if the opposition in Parliament had wished to make political capital of it. It is quite possible, too, that this and other less clear cut intimations that the British Government still clung to appeasement, convinced the German authorities that Great Britain would not go to war. July saw a great air raid rehearsal in England that blacked out 16 counties, and another to test the precautions taken to protect the forty-mile river stretch of the Port of London.

On Aug. 4 Parliament adjourned for 8 weeks. On the motion to adjourn the Government majority was reduced by 113 votes; and it is probable that the motion was carried only because Chamberlain made it a major issue and said that if the motion were lost it would be 'a vote of no confidence in the Government.' Uncertainty regarding what might happen in international affairs, and a lack of complete confidence in the Government's handling of foreign affairs caused a good deal of uneasiness and a widespread feeling that Parliament should not recess for so long a time. (See also FRANCE; GERMANY.)

European War.

The immediate occasion for the outbreak of war is to be found in the German attitude and action in regard to Poland. A careful analysis of the documents that are included in the British Blue Book, shows that even near the end of August there was the possibility of Britain's constraining the Poles to make concessions in much the same way that the Czechs had been forced to yield in 1938. Neither Chamberlain nor Halifax ever said that Britain would fight to maintain Poland's territorial integrity; the promise was to support the Polish Government 'in the event of any action which clearly threatened Polish independence.' As late as Aug. 28 the British ambassador to Berlin, Sir Nevile Henderson, made it clear to Hitler that what constituted 'a clear threat' would be decided by the British themselves and not by the Poles. In his answer, given the next day, Hitler said that he had no 'intention of touching Poland's vital interests or questioning the existence of an independent Polish State.' In accepting the British offer of their good offices, Hitler said that the German Government would expect a Polish emissary with full powers to reach Berlin on the next day, Aug. 30.

Though Halifax thought the German Government was unreasonable to expect such immediate action, and the British ambassador to Poland telegraphed that morning that the Poles would be unwilling to yield to the German demand, the British Government gave the German note careful consideration and urged the Poles to exercise restraint. Not until the evening of Aug. 30 did Halifax decide that the British Government could not advise the Polish Government to comply with the procedure. Through their ambassador in Berlin, the British suggested that the Germans enter into direct discussions with the Polish Government and that the German proposals be given to the Polish ambassador. This the German Government was unwilling to do. At 6:30 P.M. on Aug. 31, the Polish ambassador called at the German Foreign office; but it was too late. In the early morning of Sept. 1 the German invasion of Poland began. The invasion brought to an end the Anglo-German negotiations. Parliament was summoned back from its recess. At eleven o'clock in the morning of Sunday, Sept. 3, Great Britain was at war with Germany.

Effect of the War on Great Britain.

Quite apart from the military and naval efforts that come to mind when one speaks of a nation at war, the coming of the war involved a serious dislocation of the normal pattern of life in Great Britain. In accordance with plans drawn up early in the year, in less than four days, more than 1,500,000 children were moved, from London and other industrial districts. At the same time a large number of adults were similarly evacuated and sent to places considered free from danger of air raids; these included patients in hospitals and nursing homes, invalids, the blind, and various others. The sudden irruption of multitudes of city children, many of them from the slums, upset many a rural community; and a great many of the people with whom these children were billeted decided that the 10s. 6d. weekly which the government paid (8s. 6d. for each child where there were two or more) was quite inadequate. It was more significant that the evacuation brought to the attention of England the fact that thousands of its children were suffering from undernourishment, filth and venereal diseases. There was an immediate increase in unemployment. On Sept. 11 there were 99,230 more persons unemployed than on Aug. 14, and by mid-October there was a further increase of 99,710. This increase was entirely among women, boys, and girls. Housemaids and nurses were thrown out of employment because families were scattered; typists, stenographers, and clerks were dismissed when numerous business firms folded up; shop girls were thrown out of work because retail trade slumped. The ordinary peacetime liberties of the individual were circumscribed by such matters as compulsory blackouts, foreign mail censorship regulations and the strict rationing of gasoline. The Emergency Powers (Defense) Act, issued the last week of August, provided penalties for persons violating such defense regulations as the disclosure of troop movements or taking photographs in prohibited areas, and it authorized Government conscription of railways, land, ships, aircraft, and 'any chattel in the United Kingdom.'

Emergency War Budget.

The Emergency War Budget, introduced on Sept. 27, increased the normal income tax from 7s. to 7s. 6d. on the pound, and imposed new surtaxes to 80 per cent, and estate taxes. It fixed the rate for 1939 on the first £135 at 2s. 4d. instead of 1s. 8d.; after Jan. 1, 1940, instead of £135, a decreased rate will be allowed on £160, but this lower rate will be 3s. 9d. on the pound. Excise duties (internal revenue tax) were increased on a number of commodities; an additional 1d. a pound on sugar, 1s. 2d. an ounce on tobacco, 1d. a pint on beer, 1s. 3d. a bottle on whiskey, and so on. In other respects also the war affected British finance. Late in August war risk insurance rates went up and on Aug. 24 the Bank of England raised the discount rate from 2 to 4 per cent, the first change since June 1932. The old rate was restored near the end of October. On Aug. 25 the pound sterling, which in foreign exchange had kept around $4.69, dropped 30 cents. Two days after Britain entered the war the Bank of England fixed sterling at $4.04; since the middle of September it had been slightly lower; in estimates regarding costs, contributions, and payments, both British and American spokesmen have assumed the pound to be worth $4.00. On Sept. 16 Great Britain called in all gold and foreign exchange owned by its nationals.

Changes in the Cabinet.

The outbreak of war brought some immediate change in the make-up of the Government. Winston Churchill, one of the ablest men in English public life and for years a vigorous critic of Chamberlain's appeasement policy, became First Lord of the Admiralty, the position he held in the World War, and Anthony Eden returned to the Cabinet as Secretary of State for the Dominions. Sir Thomas Inskip who had held the Dominions office was raised to the peerage, and became Lord Chancellor. The War Cabinet constituted a group of nine members: The Prime Minister, the Chancellor of the Exchequer, the Secretary for Foreign Affairs, the Minister for Coordination of Defense, the First Lord of the Admiralty, the Secretary for War, the Secretary for Air, the Lord Privy Seal, and a Minister without portfolio. The latter post was given to Lord Hankey, secretary of the Committee of Imperial Defense in the World War and of the War Cabinet of 1916; after the war he was until 1938 secretary to the Cabinet, to the Committee of Imperial Defense, and clerk of the Privy Council. Although Anthony Eden was not made a member of the War Cabinet it was stated that he would be given special facilities for access to it. The Opposition, while giving their full support and cooperation, refused to accept place in the Government. They were not offered any portfolio whose holder would be included in the War Cabinet. The Government of Great Britain is a Conservative and not a Coalition Government. So far as Parliamentary elections are concerned there was a party truce; the Labor Party and the Conservatives agreed not to oppose each other in by-elections.

Losses at Sea.

It was only a few hours after the expiration of the ultimatum to Germany that the war was brought home to the English people. At 7:45 in the evening of Sept. 3, the passenger ship Athenia, west bound with 1,416 persons aboard, was torpedoed about 200 miles off the northwest coast of Scotland with considerable loss of life. The official German statement that the Athenia was sunk by the British to arouse American sympathy found few believers. However, it seems not unlikely that the sinking was the work of a young and over-enthusiastic U-boat commander acting on his own initiative. This was the first (but not the last) piece of evidence pointing to the conclusion that before the war began, German naval vessels had been sent to war stations.

The imposition of a strict censorship of all war news and the natural unwillingness of any combatant nation to admit the full extent of the losses it suffers make it impossible at this date to give any figures other than those subject to drastic revision. It was announced in the British press that in the first two weeks of the war, up to Sept. 17, 23 British vessels totaling 134,045 tons were sunk. On Oct. 11, Churchill gave a different set of figures in the House of Commons; 65,000 tons in the first week, 46,000 tons in the second week. He stated that the loss in the third week was 21,000 tons, and for the fourth and fifth weeks together only 5,809 tons. Succeeding weeks however admittedly witnessed the sinking of considerably more tonnage. While some of the loss was the work of German submarines, a great deal of it was caused by German mines. The Germans, it appears, developed a new technique and used aircraft to sow mines in waters adjacent to British Isles. A feat of great skill and daring was the penetration of the defenses of Scapa Flow by a German submarine, which sank the battleship Royal Oak on Oct. 14. The Royal Oak was a battleship of 29,150 tons with about 1,200 men aboard, of whom some 800 were lost. Three days later the aircraft carrier Courageous was lost. In announcing the sinking of the Royal Oak — the British broadcast this news in German to Germany — Winston Churchill said that the British merchant marine of 21,000,000 tons had lost 156,000 tons by U-boats and 18,000 tons otherwise. Submarines, mines, and aircraft have all been employed in the attack on British shipping; by the end of the year the Germans claimed to have sunk 1,000,000 tons; though this may well be an exaggerated estimate. On the other hand, Great Britain claimed to have sunk 35 of Germany's 60 submarines.

Economic and Military Measures.

The chief means on which the British seem to rely to defeat Germany is economic strangulation. The British Contraband Control has announced week by week the interception of thousands of tons of goods destined for Germany. On Nov. 21 the Prime Minister announced that in reprisal for the German methods of warfare, an Order in Council would be issued making exports of German origin or ownership subject to seizure on the high seas.

At the close of 1939 there was a British Expeditionary Force of perhaps 200,000 men in France. British soldiers had taken virtually no part in activities on the western front, partly because there was very little activity there. Another possible reason was that there were enough French troops to hold the Maginot Line, and the British were stationed where they would be of most value if the Germans again struck through Belgium. The first German airplane destroyed in France by the British was brought down toward the last of October. War from the air, has not figured in this conflict to anything like the extent expected. In view of the fact that Great Britain has thus far conducted no large scale military operations in any way comparable to those of the World War, the cost to the British taxpayer is amazingly high. On Nov. 23 Sir John Simon said in a broadcast that the war was costing £6,000,000 a day. In November 1914, Great Britain was spending less than £1,000,000 a day; the figure £6,000,000 was not reached until two or three years later.

Sinking of the Graf Spee.

The most important naval engagement of 1939 took place off the coast of Uruguay on Dec. 13. Early that morning the heavy cruiser Admiral Graf Spee, one of Germany's three 'pocket battleships,' while pursuing the French freighter Formosa was sighted by three British cruisers, Ajax, Achilles, and Exeter. None of these was as heavily armed as the Graf Spee which carried six 11-inch guns and eight 5.9-inch guns, as compared with the Exeter's 8-inch guns and the 6-inch guns of the Ajax and Achilles. Theoretically these ships could be blown out of the water before they were near enough for their shells to reach the Spee. A running naval battle took place in which the Exeter suffered severely, but the Spee was so badly damaged that she fled for refuge to Montevideo. The Ajax and the Achilles, reinforced by another British war ship, Cumberland, lay outside the harbor of Montevideo, while the Exeter made its way to the naval base in the Falkland Islands. On Dec. 17, faced with the alternative of leaving Montevideo or being interned for the duration of the war, the Spee placed part of her crew on the German tanker Tacoma and steamed slowly out of the harbor. At 7:30 in the evening, her crew and officers having left the ship, the Admiral Graf Spee was scuttled by her crew, shattered by an explosion set off by her Captain. Thus the only important naval engagement of the year ended in a British victory. Three days later Captain Langsdorff shot himself at Buenos Aires. See also EGYPT; INDIA; JAPAN; PALESTINE; WORLD PEACE.