Ashburton Guardian Magna est Veritas et Prævalebit. TUESDAY, APRIL 19, 1949. DOLLAR PROBLEM

Ashburton Guardian, Volume 69, Issue 160, 19 April 1949, Page 2

Ashburton Guardian Magna est Veritas et Prævalebit. TUESDAY, APRIL 19, 1949. DOLLAR PROBLEM

Heavy Labour losses and Conservative gains in the County Council elections in Britain were attributed to the Budget. This may be true up to a point, but the Budget did not reach the public until the eve of the elections, and it could not have been digested to the extent that the election results suggest. Rather does the swing away from Labour suggest that the public are becoming tired of the austerity conditions. • it is most unfortunate that these conditions should have persisted so long, but the indications are that the British people will have to persevere for some time yet. The Budget was perhaps unpalatable, but looking, at the situation through unsmoked glasses, it does seem that a genuine attempt is being made to face up to the crucial economic situation. In spite of the background of steady progress, the dollar deficit is still the

greatest problem. The dollar probem is, of course, not new—added emphasis this year can be attributed in part to the fact that many of the other major objectives of 1947-48 have now been reached, thanks above all to the big increase in production. Although employment rose by only 2 per cent during the year, workers throughout industry achieved an overall output per cent, above the preceding year; in the last quarter of 1948 the level of industrial production was the highest ever recorded —as much as 22 per cent, abovepre-war. This increase m production was in fact the basic factor of all the progress made last yean Moreover, the whole of the additional output went to export and home investment (that is restoration and expansion of Britain’s industrial resources) although imports refnained at about four-fifths of the 1938 volume Thus the British public reaped no immediate gains for its intensified effort. That was very clearly revealed ih the Budget. The problem of the dollar deficit is a problem not of the United Kingdom alone, but is shared * with the whole sterling area, and member countries were last year also able to record immense improvement in dollar economics: gold and dollar deficits of the sterling area as a whole fell from £1,024,000,000 in 1947 to £423,000,000 in 1948. The aim of all these countries is to get back to normal trade, when there will be complete freedom from restrictions. The Budget proposals are a means to this end. They may react against the Government, but the people must see that the steps being taken have been , planned economically and for their ultimate good.