BRITAIN’S DRAIN ON THE AMERICAN LOAN DISCUSSED

Greymouth Evening Star, 12 July 1947, Page 5

BRITAIN’S DRAIN ON THE AMERICAN LOAN DISCUSSED

WASHINGTON, July 10. Republican leaders in the United States Senate are striving to push through the Income Tax Reduction Bill, in spite of President Truman's veto, says Reuters. It was hinted today that Britain’s heavy drafts on the American loan during the last 12 months might have been urged on Britain by Mr Truman to upset Republican plans for a balanced Budget. During the debate on the bill today Senator R. A. Taft (Republican, Ohio) interrupted the Finance Committee chairman, Senator Eugene D. Millikin (Republican, Colorado) to ask: “Is it not a fact that instead of 1,500,000,000 dollars, the British have drawn more than 2,000,000,000 and thus reduced the surplus the Government would otherwise have had this year? And is it not possible that the Administration may even have suggested drawing a large amount, so that the Government surplus would not be so large?” Senator Millikin accepted Senator Taft’s explanation as “a distinct possibility.” Senator Walter George (Democrat, Georgia), rising to defend Mr Truman, said: “Might I suggest that Britain may have needed the money?”

COUNTRIES NEAR END OF THEIR DOLLAR RESOURCES IN.ZT.A. SPECIAL CORRESPONDENT! LONDON, July 11. The Financial Times, discussing the dollar shortage, says: “It mu.R not be forgotten that Britain does not stand alone. There are many European and Asiatic count) ie.> whose situation is even worse. Britain’s dollar and gold reserves might be eked out to cover her overseas payments deficit for another yeai, oi even two years, but many Euiopean countries face exhaustion of theii dollar reserves in a matter of weeks or months. . “Recent statistics prepared in the United States show that the whole world has only sufficient dollars to meet its needs for less than one year. This fact must weigh heavily with the British Government in considering its course of action. “A premature move by Britain, th-, second greatest trading nation m the world, to cut its overseas payment expenditure could hardly fad.to pr - duce a payments crisis of the first magnitude in other countries long before any comprehensive plan m American aid for Britain could be prepared and placed before CongrThe Financial Times contends that Britain can still do a great deal to heln herself. “So long as markers exist and the recovery of much ot tl*e woJld depends upon the provision of British coal, British equipment, mid British consumer goods, Bntam has no right to um about, shorter reaction 'but” sheer recognition oi quickly.”