STERLING POLICY OF BRITAIN

Ashburton Guardian, Volume 68, Issue 137, 22 March 1948, Page 3

STERLING POLICY OF BRITAIN

Impending Changes

Denied

USE OF MARSHALL PLAN DOLLARS

(N.Z.P.A.-Copyright!. WASHINGTON, March 20

It is learned authoritatively that under present plans for administration of the Marshall Plan Britain will not be permitted to use dollars acquired under the plan, for financing her role as banker for the sterling area.

Knowledge of this arrangement appear© to have given rise to reports that Britain might be obliged to cease the conversion,of sterling into dollars for the sterling area countries, to restrict sterling loans to European countries, and block existing balances to reduce the ability of India, Egypt, and other non-European countries to buy British goods that otherwise might go to Europe. < Such reports are denied by British officials in Washington, who point out that under the present proposals for the Marshall Plan its administrator could not permit Britain to use dollars acquired by her under the plan to finance the provision of dollars to sterling area countries. Marshall Plan dollars would be used only for the purchase of Marshall Plan goods from the ■ United States and from other countries.

There is no intention at present, however, for Britain to cease furnishing dollars to other sterling area countries to assist their trade with the dollar area. Officials in Washington have been extremely puzzled by he message of the “New York Times” correspondent from the Paris conference on the Marshall Plan, in which he stated: “A growing body of. State Department opinion and in that of Continental Governments sees Britain’s struggle to defend sterling as the, greatest menace, outside Communism itself, to the success of the European Recovery programme.” 1