MUST BALANCE ACCOUNTS

Greymouth Evening Star, 16 January 1947, Page 10

MUST BALANCE ACCOUNTS

WARNING GIVEN BY BRITISH - ECONOMIST

BANKERS’ VIEWS ON RECOVERY

LONDON, January 5.

“Unless Britain soon balances her

external accounts she will lace economic difficulties greater than in the worst period of the war,” says rroi fessor Lionel Robbins, who lately left the Government service, writing in Lloyds Bank Review. Professor Robbins questions the feasibility of solving the hard currency problem by directing exports to special areas. Professor Robbins holds the chair of economics at the University of London, and was Director of the Economic Section of Offices of the War Cabinet. A special correspondent of the Australian Associated Pless says: “Independent opinion backs Proiessor Roboms’s assertion that the employment of foreign labour is the only real remedy for the coal shortage, which is Britain’s most urgent diinculty. The Cabinet may soon have to bow to this politically distasteful doctrine. Wisdom Doubted “The chairman of Barclay’s Bank, Mr. Edwin Fisher, in a speech, doubted the wisdom of the Government’s policy of forcing interest rates still lower. City circles welcomed this implied criticism of Dr. Dalton’s cheap money programme. They also welcomed Mr. Fisher’s appeal lor the earliest possible balancing of the national accounts.

“Many considered Sir Clarence Sadd’s address to the Institute of Bankers insufficiently insistent on the grim outlook lacing Britain unless productivity is increased.”

“If conditions after 1918 are recalled, it will be perceived how much greater to-day is the hope of a combined attack on mankind’s longstanding economic ills,” said Sir Clarence Sadd, vice-chairman of the Midland Bank, in his presidential address to the Institute of Bankers. “Sir Clarence said that the traditional convenience of the sterling area arrangements had brought stability to the world’s business and it was grand to see the progress in post-war recovery among British Commonwealth countries. He believed that Britain would emerge from the transition with an assured place in the world economy, bringing a • progressive improvement in Britain’s welfare. Experimental Phase “Britain, in monetary management, was in the experimental phase. The responsible authorities had rightlj 7 determined to direct the financial machinery to accomplishing the task of physical reconstruction. Meanwhile, adherence to the cheap money policy had diminished the debt charge and contributed to recovery by lowering interest costs.

“Controls and rationing at present held back the possible inflationary effects of the Government’s creation of new money by borrowing from the banks, but the position could be corrected only by a steady increase of goods and services on the market. “The facts did not justify alarmist conclusions, but there was need for a revival of savings in the popular sense as an aid to national reconstruction. Progress had been macle in regularising Britain's debtor and creditor relationships and in restoring the position of sterling in international trade, in which there was promise of an expansive trend which was indispensable to the required growth of British exports.”