STERLING CRISIS

Press, Volume LXXXVIII, Issue 26671, 4 March 1952, Page 7

STERLING CRISIS

Views Of Former Chancellor (Special Correspondent N.Z.P.A.) (Rec. 10 p.m.) LONDON, March 3. The former Chancellor of the Exchequer (Mr Hugh Gaitskell), speaking at Preston, urged the preseht Chancellor (Mr R. A. Butler) to disclose all the figures of how the sterling area as a whqle was going to balance its account with the rest of the world so that confidence in the £ could be speedily restored. “If we are to believe newspaper rumours, the decline in gold reserves MS continued at an alarming rate throughout January and February. I little doubt that the main causes are the failure, as yet, to cut down dollar exenditure sufficiently in the sterling area as a whole, combined with heavy speculation against the £.

“It is unfortunate that the decisions reached at the sterling area conference in January were never properly disclosed. The peoples of the countries concerned are entitled to know what was decided on their behalf. Moreover, the absence of a clear picture aS' to how the sterling afea is to get into balance—how much in the way of non-sterling imports is to be cut, by Whom, and when—has undoubtedly encouraged speculation against the £. The bland statement that we are to be in balance in the second half of 1952 has simply not proved convincing. “I urge Mr Butler even now to correct this by a full disclosure of how the sterling area is going to balance its account With the rest of the world snd what each country is going to chhtribute In the way of import cuts. If Such a disclosure showed beyond doubt there was no danger of gold reserves continuing to fall, then that alone would do much to prevent specuhtipn. “But other steps should be taken, too. Once again those who have to buy sterling with dollars are holding back in the hope that there may be another devaluation. Those Who have to buy dollars With sterling are, for the same reason, buying as much as they can in advance. Our exporters—and those of the sterling area—are at present given six months in which to collect and exchange their dollar earnings. This period ought now be reduced to four months with extensions only in special conditions. Similarly, importers should not be allowed to advance the purchase of dollars. Confidence could thus be speedily be•wfW.”