BRITISH LENDING POLICY

Press, Volume LXXIV, Issue 22317, 3 February 1938, Page 11

BRITISH LENDING POLICY

♦ T GREATER LATITUDE TO BE GIVEN STATEMENT BY CHANCELLOR OF EXCHEQUER (BRITISH OFFICIAL WIRKLESS.' RUGBY, February 1. The Chahcellor of the Exchequer (Sir John Simon), in the House of Commons, announced an important change in the lending policy, involving a greater latitude in foreign lending on a long-term basis on behalf of British, including Empire, borrowers. Consent for certain foreign issues would not be given indiscriminately, particularly those on behalf of foreign Governments, foreign local or public authorities, or State-con-trolled organisations. Explaining the direction in which greater latitude in foreign lending was contemplated, Sir John Simon said that he referred particularly to loans to Empire borrowers for assisting in developing enterprise in foreign countries, and to transactions involving large blocks of foreign-owned securities. The Chancellor added that foreign short-term lending of a non-com-mercial character raised special difficulties which rendered it generally undesirable. The Leader of the Opposition (Mr C. R. Attlee) and several other members expressed doubt as to whether the change in policy as announced might not encourage lending to Powers which were rearming with aggressive intention. Sir John Simon said that he was surprised at these suspicions. The general purpose of the policy was to enlarge foreign trade, while individual cases could be scrutinised as before. His suggestion was in the direction of one of the proposals made in M. van Zeeland’s report, and he hoped it would be largely welcomed. Sir John Simon’s statement reveals that the authorities are satisfied with the exchange position and confident of the future, according to the opinion of banking circles in London. The Associated Press understands that the Government’s decision may be regarded first as a contribution towards the policies recommended by M. van Zeeland in his economic report, and second, as an official realisation of the necessity urged by all bank chairmen, of expanding British exports. British borrowers will now be able to approach the market for long-term funds’ for the development of foreign countries entailing in some manner the purchase of British goods. Public opinicn will rule out the possibility of loans to certain foreign Governments.