LOAN TO BRITAIN

Greymouth Evening Star, 11 December 1945, Page 5

LOAN TO BRITAIN

MIXED RECEPTION VIRTUE OF NECESSITY (N.Z.E.F. Official Correspondent.) (Rec. 10.30 a.m.) LONDON, December 10. Britain has spent the past few days endeavouring to adjust her ideas, to the Washington monetary agreement. While some sections welcome it and others condemn it, there seems to be almost universal recognition that Britain must accept since she has no choice. It is this fact that is difficult to swallow. It goes hard for the nation that once led the world financially to realise that despite her gigantic war effort, proportionately greater than that of America which emerged from the war stronger and richer than ever before, and with her cities undamaged, Britain has no alternative but to accept the Washington agreement. “It is not easy to welcome it with the relief and gratitude which one would like to express,” observes the “Manchester Guardian.” Britain’s business world, however, supports the agreement almost unanimously. This says “The Times” is simply because most people are appalled at the thought of any practicable alternative, and adds the only real complaint is the amount of credit is too small to facilitate adequate industrial reconstruction. “In the City especially it is fully realised that whatever practical alternatives there may have been, the comfortable development of the sterling area system on its existing lines was certainly not one of them. It is known that several important members of the sterling area have been kicking against the dollar pool—which is the most important part of the system—for some time. It is only too likely that in the absence of American credit agreement there would have been important secessions, which would have resulted in the disintegration of the sterling area at an early date.” NEW ERA OF TRADE. “The Observer” believes the agreement offers Britain substantial benefits which overwhelmingly offset any disadvantages. Above all it opens the door to a new era of trade expansion on a basis of harmony; to internation consultation and order in place of the beggar my neighbour’policies of the past; to expanding-trade and rising standards of living in place of crises and deflation. It adds; The fundamental point about the agreement taken as a whole is it represents the first attempt to secure foi the world the full benefits of unrestricted international trade while warding off the dangers inherent in such a system by means of concerted international planning. Those who are opposed to the agreement subscribe to such opinions as John Gordon’s in the . Sunday Express,” who says: “Britain will become the, junior partner of the United States, who will for all time be in a position to dictate to us the whole of our internal > economy, whereupon depends our standard ot living and our place in the sun.” The necessity for accepting the Bretton Woods Bill —before it is known whether Congress will approve the loan— is disliked by a wide section on the grounds it will mean a return to the gold standard, which is against Britain’s interests. This however, is a matter of opinion. The '“Daily Telegraph” declares it is nonsense to say it means a return to gold. The “Telegraph” says: The gold standard denotes an exchange rigidly linked to gold and necessitates deflationary adjustment by the country with an unfavourable balance of payments, With depression and unemployment as consequences. Bretton Woods, on the other hand, permits 10 per cent, variation in the country s parity of exchange at discretion and a further 10 per cent, by agreement, in the event of the country being able to demonstrate its necessity. In other words, it seeks to combine stability with flexibility, and to put, a check on runaway devaluation, while allowing orderly adjustment within prescribed limits.” 1 The “Daily Herald” also declares that Bretton Woods does not mean a return to gold. “What has happened is two major industrial Powers recognised for the first time in history that the maintenance of full employment in all countries is essential to the maximum expansion of international trade../In reaching out to this goal there is to be no attempt to interfere with the internal policy oi any country.” The Commons debate on December 12 and 13 can be expected to find both Labour and Conservative Parties divided among themselves. But the fact' remains that Parliament can be expected to approve the agreement, since Britain has no alterna-j tive. EMPIRE ASSN.’S CRITICISM (Recd. 1 p.m.) LONDON, Dec. 10 The most assured hone of our future recovery lay in Empire trade, and that hope is now to be jettisoned, says the Empire Industries Ass-ci cation, in a statement of objection to the United States loan proposal. It adds: Empire trade even before the war was worth more to us than the trade of the rest of the world put together. “If we cannot secure general ■ acceptance at what point are we going to be entitled to say we have done our best but failed and hold ourselves free to impose whatever tariffs necessary to concentrate on the extension of Imperial preference, walk out of the Bretton Woods scheme, and rebuild the sterling area—after having got' away with 4,400,000,000 dollars. The statement objects on principle to any agreement limiting the right of Empire nations to co-operate in peace and in war. “That is not more the United States’ concern than the economic relations between New York and Pennsylvania are Britain’s concern.” The statement agrees the loan would no doubt serve to ease the immediate British position, while simultaneously affording no less urgently required relief to the United States surplus productive capacity. _ The statement continues: “Britain might well be entitled in view of the sacrifices to the common cause to have received a free gift instead of a commercial loan, which may well prove beyond its capacity to repay. It would have been far better for us to have borrowed only as. much as could have been secured on ordinary terms and for the remainder to have made up our minds to pull through with the help of the Empire and sterling area. We might well have been agreeably surprised as we were in 1931 at the unexpected resources at our disposal.” N.Z. FARMERS’ QUESTIONS WELLINGTON, December 11. The present attitude of commercial circles in Wellington is to withhold comment of the United States’ loan

to Great Britain, till more particulars of the conditions are available, and the matter has been given thorough consideration. . “A point about which we are most concerned, pending further advice is whether the Ottawa Agreement is going to stand and, if not, what anything which replaces it will mean to us,” said the President of the New Zealand Farmers’ Union (Mr Mulholland). Another important point was the extent to which farmers would be allowed to purchase United States farming requisites, such as agricultural machinery, tractors and so on, of which America has been the principal supplier to New Zealand so far. He could not wake any detailed statement till he had fuller advice and the opportunity of studying the matter closely. The New Zealand Manufacturers Federation has no statement to make till the conclusion of the discussions with the Government, which have been continuing for some time.