BRITAIN’S ECONOMIC DUNKIRK

Gisborne Herald, Volume LXXII, Issue 21809, 4 September 1945, Page 2

BRITAIN’S ECONOMIC DUNKIRK

INDUSTRY NOT GEARED FOR PEACE IMPORTANCE OF WASHINGTON MISSION (Special Correspondent.) (10 a.m.) LONDON, Sept. 3. The total surrender of Japan sees Britain, after six years of war to the day, a debtor nation instead of a creditor with a mission on its way to Washington to seek a way of tiding over its financial difficulties, which have been intensified by the abrupt cessation of lend-lease.

Facing what has been described as an economic Dunkirk, the British people find that the first fruits of peace are the prospect of continuing wartime restrictions for an indefinite period and the necessity for a tremendous burst of energy for the export trade to supply other nations with goods which it cannot yet afford for itself in order that the country may pay for its victory.

But Britain’s industry is not yet geared for peacetime production. It has to be re-equipped and worked by men brought back from overseas, and raw materials must be imported. Time is required, but the country’s position is aggravated by the ending of lend-lease, which was such an inestimable aid to Britain throughout the war. It enabled her to shut down manufacture for exports which she must otherwise have continued in order to pay for imports to prosecute the war. It also enabled her to' put over 900,000 more men in the field. To-day Britain, in addition to being faced with an adverse balance on lendlease account, also requires dollars during the next year to buy some Ameri-

The other holds that to tie the country to America’s dollar economy would be fatal. It would reduce Britain to a mere client of American capitalism, involve her in the next American slump and make it impossible for her to carry through her programme of full employment and social reform. It would be better to develop foreign trade through bilateral agreements with countries ready to exchange goods for goods.

The Observer expresses the opinion that a compromise between these two views will be found —at least on paper —followed by a period of trial which will show how far a compromise is workable. No Enthusiasm for Loan

Suggestions in America that a loan should be granted to Britain have not aroused any enthusiasm here. . A typical view of this question is expressed by Mr. L. S. Amery in the Sunday Times, who says the arrangement with America should be purely temporary and self-liquidating. ‘‘Nothing,” he declares, ‘‘would be more fatal than to enter upon any long-term commitment, whether in the nature of a loan, even if interest-free, or of commercial or monetary agreements which would limit our freedom to defend our home markets or build up our future prosperity by the deliberate fostering of inter-Empire trade, by mutually beneficial trade treaties, or by conservation and expansion of the sterling area.” A similar warning note is sounded by The Economist, which says: ‘‘The risk attaching to the forthcoming negotiations has been widely misunderstood in Britain. The danger is not that further American assistance will not be forthcoming, but it will be forthcoming only on terms that postpone indefinitely the prospect of achieving independence of further assistance.” Face To Face With Realities

There is support for the view that Britain’s trade with America should be cut down in the future to the minimum, but that it should be encouraged and expanded with Empire countries and those countries which are willing to take British goods in return. After the first shock of surprise Britain is now telling itself that the sudden ending of lend-lease is salutary in ‘that it brings the country face to face with a position that must be dealt with. ‘‘President Truman’s decision has given us the opportunity for a decisive break with the Churchillian method of maintaining British-American friendship by postponing awkward decisions,” says the New Statesman and Nation.

can food, tobacco, raw cotton and machinery for industrial re-equipment, as well as relief supplies for Europe. The British mission will meet the Truman Administration in Washington this week to work out a plan that will be equally in the interests of Britain and America. President Eases the Tension

The tension caused by the abrupt ending of lend-lease has eased following the President’s reference to the arrangements being made to bridge the gap and his declared confidence that the two countries will work out plans satisfactory to all. There are two schools of thought as to the line the British mission should follow. One maintains that Britain must keep in with America at any cost, not only for immediate economic reasons, but also because British and American collaboration is essential for the future peace and security of the world.

Comment from other quarters declares that Britain must not complain but act. Two facts stand out in Britain’s favour. One is that the country is led by a new and virile Government with a fresh mandate from the country. The other is that there should be no lack of employment for several years to come.