The Press THURSDAY, NOVEMBER 1,1945. London Loans

Press, Volume LXXXI, Issue 24712, 1 November 1945, Page 4

The Press THURSDAY, NOVEMBER 1,1945. London Loans

The Hon. W. Nash's announcement that the Government intends to repay a sterling loan of £12,886,000 (5 per cent.) on January 1 next and another of £10,506,000 (4 per cent.) on February 1 is an interesting-one, marking a long step forward in the reduction of oversea debt. The saving in interest charges, exceeding £1,000,000 a year, with that due to other receht repayments and conversions, will widen the purchasing power of the Dominion's visible export surpluses in future, an advantage gained, of course, by reducing its immediate limits. These have rapidly expanded in recent months. The net oversea assets of the Reserve Bank and trading banks doubled between the end of 1943 and July of this year, when they exceeded £79,000,000 (N.Z.). .This continuing accumulation of London balances, however, does not in itself fully explain the Government's decision. The Minister of Finance in his statement gives one indication that conversion of the 4 per cent, loan was considered, and that it was ruled out less by choice than by necessity, "financial restrictions on opera"tions on the London market" preventing it; and it has, in fact, been officially observed more than once that, though the London balances were large and increasing, heavy claims upon them for the post-war needs of the State, of industry, and of the consumption goods market were also piled up. Mr Nash has omitted to say whether the repayment of so large a proportion of the sterling debt involves any reconsideration of importing policy over the next few years, and, if so, where the effect will be felt. If, for example, the Government thinks that the effect should be canalised in the restrictions of the import licensing system upon the flow of consumption goods, it should frankly say so and invite representations on the subject. On broad grounds, such a decision should not be taken without a fair review of all interests. Those of the consumer should not be arbitrarily subordinated to. purposes of.national and industrial development stressed in the Financial Statement. Upon one further point Mr Nash may at the moment be entitled to be reticent. It i* possible that the Government's decision to repay is not unconnected with the Washington " discussions, in which the dimensions of the sterling are? claims, including those of the Dominions, are clearly an issue.