NO LOAN OF DOLLARS

Ashburton Guardian, Volume 70, Issue 69, 3 January 1950, Page 5

NO LOAN OF DOLLARS

COLONIAL DEVELOPMENT PLAN BRITAIN DOES NOT ACCEPT TERMS (N.Z.P.A.—Copyright) - ■ -* ■ LONDON, January 1. . The British Colonial Develop- ;y ment Corporation announced to- ~ 'day "that negotiations with the International Bank for Reconstruction and Development for a loan of 5,000,000 dollars had broken down, because the corporation felt unable to accept certain prt>visions in the bank’s agreement.' The loan was to have been followed by further advances in dollars,'and would have been used in the United States and Canada to buy heavy engineering and construction equipment needed for projects which the corporation had approved in Africa, the Caribbean area, and the Pacific. ;y.r Reuter’s financial correspondent comments: “This open rupture between Britain’s Colonial Development Corporation and the American-con-trolled World Bank will reverberate in many parts of the world. This is the most public, though not the only case where borrowers have considered that Washington’s* terms for lending dollars involved too few dollars and too many strings. South Africa had already stated that the official lending agencies in Washington were seeking to impose unacceptable conditions and instead arranged to borrow from New York banks. More recently Britain resisted Washington s terms for military aid.”

The Commonwealth Liaison Comittee has been meeting in London for several weeks for confidential talks on the general subject of raising dollar loans. Many Dominions have been potential borrowers from the World Bank.

In Washington, the World Bank said that its requirements for granting a loan included the right to inspect the borrower’s books and the goods purchased.