AMERICAN LOAN TO BRITAIN

Press, Volume LXXXI, Issue 24742, 6 December 1945, Page 5

AMERICAN LOAN TO BRITAIN

Estimate of Amount And Terms

1,100,000,000 DOLLARS

(N.Z. Press Association—Copyright j (Rec. 11 p.m.) LONDON, Dec. 5. Unofficial reports from Washington correspondents say there are good grounds for estimating that the American loan to Britain will total 1,100,000.000 dollars. Of this, 162,500,000 will be earmarked for goods already in the lend-lease "pipeline" for Britain, and the remainder is called "new money." The details are expected to be known either on Thursday or Friday. It is assumed that the interest will be 2 per cent., with repayment over a period of 37 to 50 years. An essential feature of the agreement is likely to be the ra'hying by Britain of the Bretton Woods .monetary agreement v "Two unexpected issues are holding up the final settlement of the Washlington loan negotiations," reported the Press Association's diplomatic correspondent yesterday. "The issues, which have been raised by the Americans, are regarded as sufficiently substantial to jeopardise the talks and completely wreck the chances of agreement if the Americans are adamant. The negotiations, therefore, are. still in the balance, but London political circles are optimistic that the difficulties will be overcome, although perhaps not so optimistic as reports from America suggest. "The British Cabinet's attitude and comments on the new position reached Washington to-day (Tuesday). The next move is with the Americans."

"Britain is awaiting the British and American financial agreement without any degree of enthusiasm," said the special correspondent of the New Zealand Press Association. "During the long weeks when the negotiations were proceeding in Washington and when conflicting reports that agreement had or had not been reached, comment was largely withheld here.

"Although it is still regarded as premature, some comment is being made on information from 'Washington published by the newspapers. This is that it is proposed that the United States shall place at Britain's disposal a credit of between £900,1)00,000 and £1,000,000,000. This would be repaid, with interest of 2 per cent., in 50 annual instalments beginning in 1950, with the provision that in years when Britain's balance of trade is shown by impartial accounting to be below a given figure, the interest would be waived.

tt J l . proposed that the u j"£d States shall lend Britain an additional £125,000,000 with which to buy the lend-lease,suppiies that were in the process of being transferred from the United States to Britain when lend-lease ended.

"A Whole World System" "Publication of the term's of the proposed loan—and it will continue to be a proposed loan' until it is ratified by Congress—will be the signal for the start, both in Britain and the United States, of one of the historic: post-war debate's. A whole world system, it is remarked, hangs upon the success or lauure of the proposals which British and American financial and economic experts have hammered out during the 12 weeks of negotiations in Washing-

Apparently there is still some doubt = V j!! th ! r „, the * British Cabinet will 1* »t e t( U h r e J A P er , Ican Proposals, one of the chief difficulties being the question of scaling down the sterling balances owed to Empire countries. If Rrf/ a in gre? i me , nt is .u not re ached, then Britain will face the post-war world alone with the Empire. If the proposals are accepted, by Britain, then it Rr P e #?n Ct w at a biU ratifying the Bretton Woods monetary agreement will be presented to Parliament for mmediate action. But there is everv indication that there willbe much ol Britain willV \ he f rounds that Britain will be tied too closely to the American financial machine, ♦v, .•K SCUSS ! n S the reported proposals, the 'Manchester Guardian' saTs- 'The" principal conditions can be guessed They are: (1) Britain to make an !£ tempt to obtain a drastic reduction nf wh.vA 3 ' 500 ' 000 ' 000 sterling balances which have accumulated as a result of E m r ni e £ Pen^ e , to the credft of many Son wlrt co «ntries; (2) the tretton Woods scheme to be ratified before payment; (3) a worldl tradp a C riffs^ U fe, £ h £ hj b °th AmeriSn dutSs l? e m f K Emp i re Preference are , be lo wered must be accepted in principle and laid before an international conference next year.'

<"th, Thr eat to sterling Dre7SL P f a £ e «^ d - s that America is currencf P % ®Th b a alan( ; es , int .°, a » other currencies. The cost of yielding mav & 3&V" lll ttSßg S S3 American people. We shoulcfhave preferred to await the outcome of thP thS 1 'k tr,,de inference proof that they are willing to make We &hicn n f, th U i S in ,i heir im P°rt tarfff*. S?ifo k f he world s greatest trade obstacle, before we trusted ourselves to the _ uncertain tide. """eives to s Lno Use that recent events have not shaken our faith a H, tt i?-». 0n tne whole - however we shall have to accept this iettlemmt because we cannot afford to drift into State's- C ° nfliCt With the knifed

nk % itain and Bretton Woods Mr Christopher Hollis, M.P. i n an savs- 1 w' E^ ening Standard? „i£ tto 4 n Wo^ ds mean s a return to the gold standard under which Britain would be compelled to return to gold and render itself liable to sanctions from all the world, including the Dominions, if it should ever subsp. quently leave gold. It would return to gold when the United States holds 23.000 000,000 of 128.000^00 70001 dolkrs f? Id in the world, and when the problem of finding goods and services ™sil h j * a £ e on the American «« •; • by no means been solved +u Bn « m /would, then, be accepting }?J°}i sta " d ard at a time when the size of her holdings will be dependent upon American goodwill and 'wTien she may well have no alternative but to make payments in gold for American goods received.

Bretton Woods will create conditions under which our problems can never be solved. It spells good-bye to all hopes of prosperity, whether under a socialist or a capitalist system. This pact may well prove a suicide pact between the last two great nations of the world. "What is the alternative? Let as remain friends of the United Stated Let us trade with her, exchanging goods and services against goods and services to our mutual convenience; but, if she demands to invade the most ancient of all sovereign prerogatives—our right to control our own monetary supply—let us say, firmly and- courteeusly to her: 'Hands off.'"

U.S. LOAN TO FRANCE REPORTED

LONDON, Dec. 4. A report from Washington says that America has made a loan of 550,000,000 dollars to France.

29 KILLED IN CRASH

(Rec. 7 p.m.) LONDON, Dec. 4. Twenty-nine persons were killed when a four-engin#d British aircraft crashed in France on Saturday near the mouth of the fiver Charente. The Elane, a Liberator, is believed to have een struck by lightning during a trip from Malta. The tail and the outer port wing. with the outer port engine broke off in mid-air before the plane dived into a bridge near Rochefort. ' Those killed included five members of the crew and 22 British servicemen flying home from Malta on leave.