Dollar Crisis Fades In Sterling Area

Press, Volume LXXXVI, Issue 26221, 19 September 1950, Page 7

Dollar Crisis Fades In Sterling Area

(N.Z. Press Association—Copyright) (Rec. 11 p.m.) LONDON, September 18. “The Times,” the “Financial Times,” and the “Daily Telegraph” in special articles to-day said that the sterling area’s dollar crisis had faded since the devaluation of sterling exactly a year ago. The sterling area’s gold and dollar reserves had increased from 1,340,000,000 dollars to 2,422,000,000 dollars during the period. This had been mainly because of the present high price of sterling area commodities bought by the United States, and the sterling area’s cut in dollar imports, said the articles. Both the “Daily Telegraph” and the “Financial Times” said that the act of devaluation itself had little influence on the improvement. “The Tinies” said that the balance for the time being seemed secure, but this was subject to the proviso that imports from dollar sources into the sterling area did not increase appreciably.

The three articles said that devaluation now faced Britain with a special problem—increasing debts to other sterling countries. The “Daily Telegraph” said: “While the sterling area countries are contributing so handsomely to the dollar pool they are also earning more sterling, not only by transferring dollars to the pool in London, but by the sales of primary produce to us at high prices. The strain on Britain is becoming severe.”