ECONOMY OF BRITAIN

Press, Volume LXXXIX, Issue 27201, 19 November 1953, Page 11

ECONOMY OF BRITAIN

“Position Still Precarious” (Rec. 12.30 a.m.) NEW YORK, Nov. 18. Sir Roger Makins, Britain’s Ambassador to the United States, said today that the underlying economic position of Britain was still precarious. He told a meeting of the National Foreign Trade Council in New York that Britain was making progress in pursuing the goal of a more liberal economic system, and was by persistent effort keeping its head above water. Referring to the dangers of an unfavourable turn in the present favourable international trade, he said: “A high spring tide would easily engulf us. and we are still far from dry land.” Sir Roger Makins said European countries, and particularly Britain, were doing as much as they could to remove trade restrictions in the light of their balance of trade position. This, however, was not a European but a free world problem. “We cannot be satisfied until trade flows as freely between the dollar area and the other monetary areas of the world as it does within those areas. Ultimately, the controlling factor must be the United States, which as the biggest creditor nation js dominant in the economy of the free world.” He said that for the success of the system of freer trade and freer currencies. certain conditions were necessary. These included:— (1) Adequate reserves in the form of gold and dollar holdings or credit facilities which would allow the principal trading “ countries to weather minor and temporary balance of payments deficits without being forced into premature restrictions on imports or severe deflation. (2) All countries involved would have to do their best to avoid major fluctuations in internal activity, since those fluctuations inevitably disturbed the pattern of interna-, tional payments.

(3) Creditors an<F debtors alike must be willing to take steps which were necessary to correct any disequilibrium which might appear.