LOAN CRITICS

Evening Star, Issue 25849, 20 July 1946, Page 7

LOAN CRITICS

Britain's "Monetary Munich" Huge Annual Burden Shouldered Elimination of Imperial Preference

(Rec. 11.35 a.m.) LONDON, July 19. .' : '\",The thing wasVwhisked through before anybody'realised what had happened. The House of Commons was allowed four days for what Congress took seven months," complained Mill. Boothby (Con.) in the Commons when, on the motion for adjournment,- he raised the question of what conditions were attached to the American loan. Mr Boothby asked if there were a tacit understanding between the British and American Governments on the methods whereby Britain could pay her sterling obligations. Britain could not use the loan for it and the establishment of full convertibility of sterling within a year'would impose an annual burden at 2 per cent, of £70,000,000, to which had to be added the £30,000.000 which Britain was bound to spend in the United States under the, loan agreement. Britain would have to build up" universal export trade double her pre-war trade. At." the ■ame time she would have to pay sterling creditors, not in goods, but in gold and dollars,/ which could be used to buy not British, but American goods. Mr Boothby continued that Britain would not be allowed to restrict the import of food for in- . creasing her own agricultural pro- ;

; Fantastic Obligation

" We have taken on a fantastic obligation which we can just manage to carry if we have the tools, .but we have allowed ourselves to be deprived of those tools," he said. The loan conditions allowed Americans to use the money for bargaining power, but took from Britain market bargain- ... ing power. He feared that the Government intended to use the loan for indulging in inn illicit spree at future expense. Unless it .repudiated a number of the

obligations accepted in principle Britain later would be forced to repudiate her debts. ' , , Mr A. T. Lennox-Boyd (Conservative) said many millions of Americans thought they had been generous, but many others thought they had been '.'sh'rowd in getting abolition of the sterling bloc and the dollar pooL He asked for Government assurance that Imperial preference would not be surrendered. He believed history would charge Britain, not with using Imperial preference selfishly,' but not using it fully.

duction. She was committed in principle to the elimination of .Imperial preference. The United " States not only showed no intention of importing British surpluses, but was preparing an export drive for 3,000,000,000d0l export surpluses a year, especially . to South America, which was formerly Britain's greatest market. Mr Boothby asked whether there was a secret Anglo-American understanding for dealing with sterling obligations and whether they would be scaled down. We have <the right to know Britain's monetary policy. We must not be confronted with a monetary Munich and told to pass it within 48 hours." Mr Boothby ajso wanted to know if the wheat agreement with Canada, which Mr Strachey recently visited Ottawa , to ; sign, was not signed because of pressure from Washington on the ground that it violated the loan conditions. Mr Boothby added that the price rises in the United State's had already taken 100.000,000 dollars off the loan. The rising prices also meant that Britain would have to export still more goods. He asked whether devaluation of sterling were contemplated if prices abroad continued to rise, otherwise there was no hope of, Britain discharging her.obligations under the loan.