FINANCE TALKS MAY UNIFY DOLLAR AND STERLING AREAS

Greymouth Evening Star, 18 August 1949, Page 6

FINANCE TALKS MAY UNIFY DOLLAR AND STERLING AREAS

LONDON. August 17.—“ The British delegation to the financial talks in Washington next month may advance proposals for a form of unification of the sterling and dollar areas under which the Americans, through the Federal reserve banks or some other agents for the United States Treasury, would be prepared to accumulate sterling balances, in much the same way as the central banks or some other agents for the United States Treasury, would be prepared to accumulate sterling balances, in much the same way as the Financial Times. “This would mean that any deficit of the sterling area in relation to the dollar area would automatically be covered through a corresponding increase of American sterling balances. ' “It is considered most unlikely that the United States, will agree to underwrite sterling by some such arrangement unless .Britain agrees to American demands for the devaluation of sterling to a level at which its maintenance would not require unduly large sacrifices. May Insist On Devaluation “For this reason, it is expected that, if the British delegation produces a plan for automatic American support of sterling, the Americans will inevitably insist upon a discussion of devaluation. The United States Administration would be most unlikely to face Congress with an agreement involving considerable American financial assistance for Britain, unless it could at the same time claim credit for persuading the •British Government to yield on devaluation. American opinion places such store upon the importance of devaluation that Congress would be ready to endorse almost anything in z eturn for it.” “British and American competition for world oil markets will be considered during the Washington financial talks,” says the Paris edition of the New York Herald tribune. “American oil interests have been ‘unpleasantly surprised’ by w0 recent British agreements in which Britain undertook to- supply considerable quantities of oil and oil companies regarded the British deals as a threat to their business. Common Oil Policy “In these two cases, arrangements were finally made under which American oil distributors agreed to sell British oil in the Argentine and Egypt, but both the British and the Americans are anxious to avoid the possibility of a price war. and they will, therefore, endeavour to settle on a common oil marketing policy. The Chancellor of the Exchequer (Sir Stafford Cripps) is expected to return to London on Friday after, a month’s treatment in a Zurich clime. He will spend a week preparing his material for the financial talks in Washington early, next month, and will sail for New York on August 27, accompanied by the Foreign Secretary (Mr Ernest Bevin). A party of British Treasury officials will arrive in Washington a week ahead of Sir Stafford Cripps for preliminary discussions with the Americans. -