COMMENT ON DEVALUATION DECISION— Britain’s Problem Is Still Unsolved

Greymouth Evening Star, 22 September 1949, Page 5

COMMENT ON DEVALUATION DECISION— Britain’s Problem Is Still Unsolved

CANBERRA, This Day (Rec 11 a.m.).—“Britain cannot get away with this devaluation expediency, unless there is a rise in production in Great Britain sufficient to enable her to enlarge her exports to the United States and at the same time maintain her exports to this country which is of permanent importance to her,” said Mr R. G. Menzies, Leader of the Opposition, in the House of Representatives. ‘The British Chancellor’s decision to devaluate sterling was not completely intelligible. The rate of British devaluation was unexpectedly high. Devaluation will not help the dollar problem, unless British exports rise by about 30 per cent., which means that in Great Britain rearrangements will have to be made.

“If you are going to have a great production rise in a country in which there is full employment,” Mr Menzies said, “there will have to be drastic steps to increase individual output. “Australia cannot afford a reduction in her imports from Britain. We must ourselves: stimulate production. , , “Whatever feelings the people have nothing on earth can prevent Germany and Japan from becoming traders in the world, for these people are coming back at a time when Britain cannot supply us. “If the United Kingdom share of our market is reduced, our vital market in the United Kingdom becomes imperilled. “Rising prices in Britain will create upward pressure on wages and

social services'. The trade unions have already decided that they do not approve the devaluation of the pound. If you have a higher cost of production, what will become of the great idea that you are going to enter the dollar market in a big way? Devaluation does not solve the problem.”