LOAN AGREEMENT

Greymouth Evening Star, 7 December 1945, Page 7

LOAN AGREEMENT

HUGE SUM GRANTED J COMMERCIAL CO-OPERATION WASHINGTON, December 6. Mr.' .Truman and Mr. Attlee have issued a joint statement that they, have reached agreement on an > American grant of 4,400,000,000 dollars in credits to Britain, subject to approval by the British Parliament and the United States Congress. The credits are composed as follow:— I (1) A loan of 3,750,000,000 dollars, 1 repayable at 2 per cent, annual in- i terest in 50 instalments, beginning five years hence. Congress must approve the loan. (2) A credit of approximately 650,000,000 dollars, mostly in American goods, representing a final settlement of lend-lease aid, the disposal of surplus American property in Bri- . tain, and a final settlement of the war claims each Government has against the other. This second ciedit is repayable on the same terms as the first, but does not require Con- ' gressional approval. The figure of, 650,000,000 dollars is not exact be-j cause the value of lend-lease goods in transit has not been finally determined. .The United States State Department said the figure was somewhere between 625,000,000 and 700,000,000. Britain and America have also agreed on brbad principles of commercial policy, including tariffs, cartels, and other subjects, for which they will seek world support. The joint statement says: “These arrangements, if carried out, will end the fear of an economically divided world, make possible a world-wide expansion of employment and of the production, exchange, and consumption of goods, and bring into being for the first time a common code of equitable rules for the conduct of international trade policies and relations.” “The British-American loan agreement is not all that could have been wished from the British point of view, but it gives Britain valuable aid during the critical period of economic adjustment,” says the diplomatic correspondent of “The Times.” “If no agreement had been concluded it would have necessitated cutting down dollar imports to the point of imposing on the British people an austerity regime more severe than anything yet experienced.” PURPOSES OF PACT COMPREHENSIVE RANGE (Rec. noon.) WASHINGTON, December 6. Agreement was®reached subject to the approval of the Legislatures of both countries, for the extension by the United States to the United Kingdom of a credit of 3,750,000,000 dollars, says a joint statement by President Truman and Prime Minister Attlee. The credit is for the following purposes: To facilitate purchases by the United Kingdom of goods and services from the United States; to assist the United Kingdom to meet transitional post-war deficits in its current balance of payments; to help the United Kingdom to maintain adequate reserves of gold and dollars, and to assist the United Kingdom to assume the obligations of multilateral trade. This credit would make it possible for the United Kingdom to relax import exchange controls, including exchange arrangements affecting the sterling area, and generally move forward with the United States and other countries towards the common objective of expanded multilateral trade. Agreement was reached for the final settlement of lend-lease reciprocal aid and disposal of surplus war property in the United Kingdom owned by the United States, and. a final settlement was made of claims by each Government against the other arising from the conduct of the war. Agreement was also reached on the broad principles of a commercial policy for which the two Governments will seek general international support. These arrangements, if- carried out, will end the fear of an economically divided world and make possible, throughout the world, the expansion of employment and production, exchange and consumption of goods and bring into bein'’’ for the first time a common code of “equitable rules for the conduct of international trade, policies and rela- i tions. The realisation of these proposals will depend upon the suppoit given them by the peoples and Legislatures in the United States and the United Kingdom, and, where they envisage measures requiring bioad international collaboration, by the support of these countries. INTERNATIONAL CONFERENCE The Secretary of State issued, to- 1 day, a document setting forth certain , proposals for consideration by the International Conference on trade I and employment. These proposals have the endorsement of the United States Government and have been submitted to other governments as a basis for discussion. Equally,, the United Kingdom Government is in full agreement on all the important ; points in these proposals and accepts them as a basis for international discussion and -will use the best endeavours to bring the discussion to a successful conclusion. The two Governments also agreed . upon procedures for international negotiations and implementation of these proposals. They, have undertaken to begin preliminary early negotiations between themselves and with other countries for the purpose of developing concrete arrangements to carry out these proposals, including definite measures for relaxation of all kinds of trade barriers. These negotiations will relate to tarins, preferences, quantitative restrictions, subsidies, State trading, cartels, and other types of trade barriers. A joint statement regarding a settlement for lend-lease reciprocal aid surplus war property, and claims said! Firstly, the British-American Governments reached an understanding for setlement of lend-lease reciprocal aid for acquisition of United States Army and Navy surplus property, and the United States’ interest Fn installations located in the United Kingdom, find for a final settlement of the financial claims of each government arising from the conduct of the war. A specific agreement necessary to implement these understandings will shortly be completed. SURPLUS DISPOSAL. Secondly: The settlement for lendlease reciprocal aid will be complete and final. Both Governments have taken full cognisance of the benefits already received by them, in the defeat of the common, enemies, and of the general obligations they assumed. They will continue to dis*

cuss the arrangements for agreed action for the attainment of economic objectives referred to in Article I Seven of the mutual aid agreement. The Governments expect these dis--1 cussions to reach specific conclusions lat an early date respecting urgent problems such as those in the field of telecommunications and civil aviation. Both Governments agree that no further benefits will be sought as consideration for lend-lease recipro- ' cal aid. I Thirdly: The net sum due from the United Kingdom to the United States for the settlement of lend-lease reciprocal aid, for the acquisition of surplus property, and the United I States interest in the installations located in the United. Kingdom, and for 1 settlement claims shall be 650,000,000 dollars, subject to adjustments. This amount consists of 118,000,000 representing the difference between the amount of services and supplies furnished, or to be furnished by each Government to the other Govern- ’ ment. after V.J. Day, through lend- . lease reciprocal aid channels, less the net sum due to the United Kingdom under claims of settlement, and tile net sum of 332,000,000 for all other lend-lease and reciprocal aid items, and for surplus property and United States interest in installations ( located in the United Kingdom and ' owned by the United States. All the new transactions between the Governments after December 31, 1945 will be settled by cash. Fourthly: The total liability found to be due to the United States will be discharged on the same terms as those specified in the financial agreement.

Fifthly: In addition to the financial payments the two Governments agreed that appropriate non-discrim-inatory treatment will be extended .to United States nationals in the use and disposition of installations in | which there is United States interest; that appropriate settlements for lend-lease interest in the installations other than in the United Kingdom and colonial dependencies, will be made on the disposal of the installations; that the United States reserves its right to recapture any lendlease articles held by the United Kingdom armed forces, but the United States had indicated it does! not intend to exercise generally this right to recapture; that disposals for military use to forces other than the United Kingdom armed forces, of lend-lease articles held by the United Kingdom armed forces ,at V.J. Day, and disposals for civilian use other than in the United Kingdom and colonial dependencies of such lendlease articles will be made only with the consent of the United States, and any net proceeds will be paid to the United States. The United Kingdom agrees that except to a very limited extent it will not release for civilian use in or export for the United Kingdom and colonial dependencies, lendlease articles held by the United Kingdom armed forces. TRANSFER OF STERLING. That the United Kingdom will use the best endeavours to prevent export to the United States of any surplus property transferred in accordance with this understanding; that the United Kingdom agrees when requested by the United States from time to time before December 31, 1951, to transfer sterling to the aggregate dollar value not exceeding 50,000,000 at current exchange rates to be credited against dollar payments due to the United States as principal under this settlement, such sterling being used exclusively to acquire land or construct buildings in the United Kingdom and colonial dependencies for the use of the United States and for carrying out educational programmes in accordance with agreements to be concluded between the Governments. That these arrangements are without prejudice to the settlements concerning lend-lease and reciprocal aid which may be negotiated between the United States and Australia, New Zealand, South' Africa and India. The financial agreement stated, firstly, the effective date of the agreement shall be the date on which the United States notifies the United Kingdom that Congress has made available the funds necessary to extend the line of .credit in accordance with the provisions of the agreement. Secondly, the United States will extend to the United Kingdom a line of credit of 3,750,000,000 dollars which may be drawn upon at any time between the effective date of the agreement and December 31, 1951, inclusive. Thirdly, the. amount of line credit drawn by December 31, 1951, shall be repaid in 50 annual ’ instalments beginning on December ■ 31, 1951, with interest of two per If'a waiver is requested for interest payment prior to that due in 1955, the average income shall be computed for the calender years from 1950 up to and including the year preceding that wherein the request is made. Fifthly, it is understood that any amounts required to discharge United Kingdom obligations to third countries outstanding on the 1 effective date of this agreement would be found from resources- other than this line of credit. The United KingI dom won’t arrange any long-term loans from Governments within the British Commonwealth after December 6, 1945, and before the end of 1951 on terms more favourable to the lender than the terms of this line of credit. Waiver of interest will not be requested or allowed under Sec1 tion Five in any year unless the aggregate of releases or payment in that year of sterling balances accumulated to the credit of overseas governments’ monetary authorities and banks, except in the case of colonial i dependencies, before the effective date of this agreement, is reduced proportionately, and unless interest payments due to that year are waived. A proportionate reduction of releases or payments of sterling balances shall be calculated in relation to aggregate releases, and paid in the most recent year wherein a waiver of interest was not requested. Application of the principles set .forth in this section shall be subject to full consultation between the two Governments as the occasion may arise..

BRITAIN’S IMPORTS

LONDON, December 6.

The following official statement has been issued of British policy reIgarding imports:— | “The stringency of Britain’s external financial position, resulting from , the war, has left the Government no alternative but to restrict, by licence, for the time being, the British imports of manufacturing goods.. Until industry can be re-established, and I export trade developed to a level substantially above the pre-war level. (Britain will have an adverse balance iin her overseas payments!. This means that she must forego at present .many articles which she would like to import. Thus, essential supplies of (foodstuffs' and raw materials will at present have to receive priority, and, in the case, of manufactured goods, the import licences perforce will have to be restricted to goods that are urg-

ently needed, to supplement home production, and to quicken an economic recovery. The statement added that the British Government did not intend to use this import ' licensing system in order to exert pressure against Canadian firms so that they should establish factories in Britain.