The CHANCELLOR of the EXCHEQUER (Sir Robert Home)In presenting to the Committee my financial proposals for the current year, it is essential that I should give some brief survey of the year that is past. I do not think I shall be regarded as exaggerating if I say that it proved to be one of unexampled trial and difficulty for industry and commerce, and therefore also for finance. Its first three months were swept by the greatest industrial stoppage which this country, or perhaps any other country, has ever known. That occurrence had a disastrous effect upon our trade, and serious results upon the revenue of the year. But, apart from that refractory incident, there was enough in the natural flow of events to cause great anxiety. The trade boom which followed upon the War had given place to a steep and sudden slump. Many people were quite unready and unprepared. It is true that those who had reflected upon the problem anticipated that the War would be followed by a spell of activity and then by a period of depression, but I think that no one, or at least few people, anticipated that we should have only a spasm of activity, and that paralysis would supervene so quickly. Most men calculated that the boom would last long enough for them to make sufficient profits to justify them in embarking on new enterprises or in extending and developing the old. But the effects of the great convulsion to which the world has been subjected upset all calculations based upon the previous experience of mankind. Some countries which used to buy from us were crippled, some broken, some derelict, and the condition of the exchanges made it impossible, in many cases, for commerce to take place between the nations. The purchasing power of our customers was rapidly exhausted, and in the result very many of our manufacturers found themselves saddled with an increased capital 1020 outlay upon which there was no return, or with accumulated stocks which there was no hope of liquidating except at disastrous sacrifices.
Unemployment, as was inevitable, followed in the wake of these troubles. Its gravity and its extent throughout the whole of the past year have been not only a source of constant anxiety to the people of this country, but also a cause of great expenditure for the State. That we should have come through these distresses without worse calamities than we actually endured is an eloquent testimony to the soundness of the country and the solidity of its financial position. In this connection I would like to pay my tribute to the banks of this country. It is true that they have not entirely escaped criticism, but I do not know anybody or any institution in these clays which does escape. As one whose daily duty it has been closely to observe the movement and vicissitudes of money and business, I have a clear conviction that throughout this crisis—it has been a crisis—this country owes more than has been adequately stated to the soundness of our banking system and to the ability and character of the men who control it.
We have finished the depressing year 1921–22 with less misfortune than I had anticipated, and certainly with less disaster than my right hon. Friends opposite encouragingly predicted for me. I can recall a Friday afternoon in the month of July last year when my Noble Friend the Member for Hitchin (Lord R. Cecil) wrapped himself in impenetrable gloom over the Budget. His "native hue of resolution" was "sicklied o'er with the pale cast" of pessimism, shared by my right hon. Friend the Member for Peebles (Sir D. Maclean), who dramatically assured the House that the Budget that day lay shattered in ruins. I was suitably impressed by the pronouncement of these comforters, but they never quite convinced me, and I think the Committee will agree with me, when we have reviewed the financial situation for the year, that the country is entitled to take some pride, in view of the conditions which I have described, in the out-turn of the year's finances.