"WE GET DOLLARS"

Evening Post, Volume CXL, Issue 138, 8 December 1945, Page 7

"WE GET DOLLARS"

BIG POINT OF AGREEMENT

Rec. 12.30 p.m. . LONDON, Dec. 7.i The bull point is that we get the; dollars necessary to avert further beltlightening and ease Britain's transitional difficulties, says the financial] correspondent of the Australian Associated Press. That point is foremost in the cross-section of official, economic, j financial, and industrial opinion. The severely practical view •is that given Britain's dependence in her present straitened circumstances on external financial aid, there is no alternative to Britain's acceptance of the loan with the conditions. , There is nevertheless not (Only disappointment at the apparent repudiation of the principle of equality of sacrifice, which, if implemented, would have assured Britain a squaver deal, but undisguised anxiety about Britain's ability, over a period, to discharge her obligations to both America and the holders of sterling balances. OPINIONS DIVIDED. t j This is the line taken in papers such as "The Times," the "Economist," and the "Statist." in wlYich it is pointed out that everything depends on America's foreign trade policy. The "Economist" says that the three, documents —the loan agreement, Bretton Woods, and the principles of commercial policy—together make up a bitter pill to swallow, and cast doubts on the .eventual satisfactory operation of Brettcn Woods. Other observers find it difficult to envisage any workable alternative to Bretton Woods. Whatever doubts were earlier held by Ministers, such as Messrs. Shinwell. Ernest Bevin. and Aneurin Bevan, the city now believes Cabinet is agreed on the acceptance of Bretton Woods. The Treasury view is understood to be that even if isolated, it is an important first step towards establishing the framework of an international economic and financial order and that in the light of the Washington Agreement it is overwhelmingly desirable. NOT BACK TO GOLD. Official circles stress that it does not take us back to the gold standard, and draw attention to the possible successive lines upon which it would be possible to devalue sterling if the need arose. Some financial * circles are taking the line that Britain is bereft of the bulk of her foreign investments and threatened with a loss of income from other invisible exports through American competition, notably in shipping, and question the country's ability to meet the American loan service and simultaneously reduce the sterling balance indebtedness. They welcome the five years' period of- grace, and the waiver clause affecting interest payments in defined circumstances, but only accept the Treasury's more hopeful .view of the outlook on one condition—that speedy reconversion of British industry to peacetime production and accelerated demobilisation will enable British economy to provide a substantial surplus over pressing home requirements. IF LOAN IS REJECTED. The Chancellor of the Exchequer will face criticism of the loan agreement in the House of Commons next week, says the Exchange Telegraph agency's political correspondent. But as the Government sees, it, disagreeable consequences which would follow rejection of the agreement by Congress and the British Parliament include, firstly, a period of restriction and austerity for Britain far more severe than anything in the war years; secondly, inability by Britain to import such quantities of foodstuffs as are generally regarded as essential for the preservation of a normal standard of life; thirdly, a clothing shortage worse than at present; fourthly, practically nothing to smoke. These are doleful prospects on which the Government will invite critics to ponder before advocating rejection. The Exchange Telegraph agency's correspondent in Calcutta says that the first reaction by Indian big business to the American loan was disappointment at the failure of the United States to insist on the immediate freeing of dollar assets held by India and other Empire countries. With easing of the exchange position for Britain. Indians see no reason for indefinite postponement of the repayment of the large sterling debt to India.

imposed by the Bill on any Government other than the United Kingdom Government.

The Press Association says that within an hour of the publication of the Bretton Woods Bill the two Conservative members, Mr. Boothby and Mr. Hollis, had tabled their motion to reject it. They also put down a motion asking the House not to approve the Bill inviting the House to agree with the financial arrangements with America.