Drastic Change Thought Likely

Press, Volume LXXXIV, Issue 25448, 20 March 1948, Page 7

Drastic Change Thought Likely

“WEST EUROPEAN AND U S PRESSURE” (N.Z. Press Association— Copyright) (Rec. 11.10 p.m.) NEW YORK March 19 “Britain may be forced by pressure frnn, h w ? ~ ' pean neighbours and the United P States to ab mdnn V to maintain her position as banker for efforts wealth and other Common*X£’" d p “-

ances to reduce the ability of India g Esrvnt St^V hng bal ‘ European countries to buy British nOn ’ go to Europe, the cessation ofthe Breton dollars for sterling-area countries, and the extension of f i" tO loans to France and possibly other Continental Tountaies “Britain in effect would be required >to declare herself bankrupt and to start over again, with a drnJta ohift 1**1“ orientation of her economy and financial system away from the Commonwealth and towards Europe.” y 1 Om

The correspondent, after contending that there is a basic inconsistency between Britain’s participation in the European recovery programme and Britain’s position as banker for the sterling area, continues: “Abolishing the sterling area in its present form will not alter the underlying problenfs of the ster-hng-area countries Instead of furnishing dollars by way of Bntain, the United States may have to take over the direct responsibilities that Britain, as the centre of the sterling area has shouldered for countries like India, Egypt Aus’ traha, and New Zealand.” AUS The correspondent adds that a growing bodv of nnininn in the State Department and in the Continental government sees the British struggle to defend sterling “as the greatest menace outside Communism itself to the success of the European recovery programme.”