Sir Stafford Cripps Says— Safety, Sanity Depend On Economic Issues

Greymouth Evening Star, 5 October 1949, Page 5

Sir Stafford Cripps Says— Safety, Sanity Depend On Economic Issues

LONDON, October 4 (Rec. 11 j a.m.). —The Chancellor of the Ex- : chequer, Sir Stafford Cripps, in an address to bankers and merchants at. a dinner given by the Lord Mayor ; of London, said that Britain’s deficit' for the first quarter of 1949 was £82,000,000 and for the second quarter £157,000,000, and, on the same’ basis, the third quarter’s figure was £133,000,000. “As against that £133,000,000 is; set £7,000,000 drawn on Canadian i credit and k £71,000,000 of E.C.A. re- ■ imbursements and other E.R.P. assistance,” he said. “The total deficit; is thus reduced to £55,000,000, the.' amount by which our reserves fell ■ during the third quarter. That com- I pares with £65,000,000 in the. second quarter. The resultant figures of

our reserves at the old parity was £351,000,000, compared with £406,000,000 at the end of June. On September 18, when the exchange rate was altered, our reserves stood at £330,000,000. So that in the 12 days to the end of thd quarter they , went up about £20,000,000 as a re- ; suit of money reaching this country after the alteration of the exchange rate.” Sir Stafford described his speech as an “interim account of the country’s economic and financial posi- i tion.” - “Impossible Burden i He said that taking the first quar- ‘ ter as a whole, the annual rate of deficit was £532,000,000 at the old rate of exchange—an impossible ' burden and one which would have very rapidly exhausted Britain’s re- | serves. 1 Sir Stafford said that Britain s situation was not so bad as some people might have feared. “But it. is quite bad enough. There is as ! great and urgent a need as. ever to. make rapid progress towards dimin- ; ishing our dollar drain.”' • i He said there had been consider- . able success in diminishing inflation- ! ary pressure, but there now signs of that pressure tending to build up again. | He also' warned that defence ex- | penditure was almost certain to ex- ■ ceed the original estimates by quite ah appreciable amount. Industrial production had risen between 6 and 7 per cent, above 1948, but the pressure of demand persisted.

He added: “With this rise in production and some fall in exports, we might have expected prices as a

i whole to fall. They have not. Prices ! have remained fairly ■ stable —with some increases.” Sir Stafford said that unemployment had dropped in the last year ■from 299,000 to 261,000. Solution Within Capacity “The solution of our difficulties is well within our capacity, provided ■ we are prepared to go all out with our efforts of muscle and brain,” he isaid. “The climate of international • economic opinion is more realistic and more helpful than ever before. We have the advantage of co-opera- ; tion from North America and the • Commonwealth and Western Europe. ' With that co-operation we must bei tween us—and we shall—solve the ' world problem of matching the dollar and non-dollar economies. Upon the ability of the democratic nations to solve their economic problems depends the whole future safety and sanity of the world.” Sir Stafford’s speech' was broadcast to the United States and other , parts of the world. i The governor of the Bank of England, Mr C. F. Cobbald, called for vigilance by every section of the community to hold inflationary pressures in check. The pound sterling stood at the centre of the trading I world, he said. Its future depended ; on whether Britain and the sterling I area as a whole could so manage ; their affairs as to earn what was spent and convince the world, that' they would continue to do so.