CURRENCY NEEDS

Gisborne Herald, Volume LXXIV, Issue 22240, 28 January 1947, Page 3

CURRENCY NEEDS

MARKETS_ABROAD BRITISH TRADE DRIVE U.S., ARGENTINE. SWEDEN (Special Correspondent.) (9 a.m.) LONDON, Jan. 27. An indication that Britain is taking steps to increase her earnings in “hard” currency countries was given by the President of the Board of Trade, Sir Stafford Cripps. In a written Parliamentary answer he stated that detailed discussions with industrialists and traders were being initiated in order to try to increase exports to those countries.

This important aspect of Britain's trade is reviewed by Lord Balfour of Burleigh, chairman of Lloyd’s Bank, in his annual statement, which is described by the Manchester Guardian as “the most lucid survey of Britain’s chances of recovery yet published.” In

the course of his statement Lord Balfour said that next July there would come into effect an obligation under the Washington Agreement to make sterling earned in current transactions freely convertible into dollars or other currencies.

“Crisis Within Two Years”

“As things are running at present,” he said, “a critical situation seems likely to arise within two years from now. The severity of the crisis will depend on the extent to which we can succeed in stepping up our production and diminishing our adverse balance with the hard currency area.”

Second only to the need for greater production, Lord Balfour continued, was the need for export, “and too great a stress, .cannot be laid on the vital character of the struggle for exports in which Britain is now engaged. Our very existence is at stake, just as it was in the physical battle against Hitlerism.”

Analysing the direction of United Kingdom exports in relation to “hard currency areas, he defined such an area as, first, a country which has goods Britain needs; secondly, docs not want to the same extent goods Britain is able to export; and thirdly, is not prepared to extend credit beyond a defined limit.

“When one examines the composition of the global import surplus of £246.000.000 in the first nine months of 1946, the picture is disturbing, for it will be seen that Britain’s deficit in trade with the all-important ‘hard currency countries, such as the dollar area, Argentina and Sweden, on which we depend for a large part of our supplies, food and raw materials, amounted to as much as £320.000.000. There is. in addition, expenditure necessary in Europe to avert an economic breakdown.”

Will Loan Be Large Enough?

On the United States loan, Lord Balfour said that one adverse factor which had since appeared to intensify the doubts expressed at the time by the late Lord Keynes and others as to whether it would prove large enough to tide us over the difficult period ahead, was' the sharp rise in United States prices bringing the danger of the credit running out more rapidly than had been hoped.

“The problem of securing imports to maintain our standards of living has become almost entirely a problem of securing dollars,” he said. “That is why it is essential that exports should be directed to the ‘hard’ currency countries. But that, is easier said than done. It takes two to make a bargain.

In the longer run. he added, the dollar shortage could be averted only if the United States were prepared to accept a large increase in imports, and he welcomed the growing awareness m the United States of that fact. “It should be understood that the interests of Britain lie not merely in obtaining direct tariff concessions for ourselves. What matters is that the great American market should become accessible to goods of the whole world. In this regard British exporters must improve their sales organisations overseas.” _____