Greymouth Evening Star. TUESDAY, AUGUST 12, 1947. The Dollar Crisis

Greymouth Evening Star, 12 August 1947, Page 6

Greymouth Evening Star. TUESDAY, AUGUST 12, 1947. The Dollar Crisis

yHE riddle of post-war existence has been immensely intensified, and perhaps forced into new directions still unguessed, by the financial-economic trouble of the “dollar crisis,” ■which has been superimposed on the political deadlocks of the day. The shadow of this further complication has fallen across the path of Britain’s recovery drive and'also across the tangled skein of international politics —probably never more complex and unpredictable than now. The crisis has arisen in the first place through a lack of dollars in countries that need to buy from America. Unless some alternative means of purchase is found —and an alternative means might possibly be found through the Marshall policy of American aid to Europe, which Soviet Russia has rejected —those customer countries may have to stop buying from America, whereupon the rapidly-risen stream of postwar American exports will be dammed or bottlenecked, with repercussive effects within the economy of the United States —such effects as American production in excess of market demand, leading perhaps to American price collapse or to unemployment: or to both.

Americans, like General Marshall, anxious to give financial aid to help European recovery have set a bold pattern. The question is: will the “dollar crisis” cramp their style'; Or will it promote their aid policy by emphasising the refinancing of customer countries as being the cure for a United States glut of exports? One thing is certain and that is that the lead in promoting world recovery must come from America. If the present trend continues, she cannot hope to maintain her standard of industrial activity at anything like its present level. She must take action to free the channels of trade. One of Britain’s present troubles is that since the loan agreement with America was negotiated, prices have risen steeply, cancelling out portion of the credit made available by Washington. The glut of exports feared in America may be averted, at any rate in part, if British restrictions on trade with the dollar areas result in a tumble in American prices—a tumble which would have repercussions both in America and Britain. It is difficult to see how such a happening could do other than benefit both. A price fall in America would give customer countries more goods for less money, with consequent benefit to trade and economic conditions generally. Some hard financial thinking in the next few months may greatly complicate the political thinking a little later. The indications are that those complications will extend themselves to New Zealand, whose trade is by the nature of things bound up with that of Britain.

The Acid Test

jgRITONS must work. That is the keynote of the appeal by the Prime Minister, Mr Attlee, to the nation for a united effort to meet the present economic crisis. At the same time as he was making his broadcast there was published a report that the extremists in the British Labour Party had won a victory by securing a decision for the continuation of the nationalisation policy. But does the experience of nationalised industries give any assurance that the salvation of work, and therefore the salvation of the workers, will be found in State ownership? The British Labour Government and the Minister of Fuel, Sir Shinwell, have already submitted this question to an acid test. With extravagant promises they nationalised the coal industry, and yet the National Coal Board is falling far short of the production target that it set itself. The Coal Board • and Sir Shinwell were not expected to overcome immediately difficulties inherited .from a generation of coal-mining neglect—which difficulties time alone can perhaps overcome —but they were expected to secure at least continuous work from newlynationalised miners fdlcd with production zeal. Sir Shinwell himself, expected at the least, loyal work, and the language he has used about absenteeism and “black-leg-ging,” and his direct warnings to certain sections of workers do not encourage the idea that additional doses of State Socialism are going to do Britain and her industries any good.

Similarly, in New Zealand the slow turn-round of shipping has been quoted repeatedly as a cheek on work done in the transport industry. Does coal nationalisation in Britain or, for that matter, State ownership of New Zealand mines, supply any argument for putting waterside work in New Zealand either under Government control or under a form of worker-control, which is the union’s objective? What is becoming increasingly evident is that Socialism is not possible without direction of labour —a totalitarian device. The two go hand in hand. Many more of the people who still can see nothing but magic in nationalisation are undoubtedly destined to join the swelling ranks of the disillusioned.