AMERICAN ATTITUDE TO STERLING INDICATED TO BE THAT IT SHOULD BE DEVALUED

Grey River Argus, 23 August 1949, Page 5

AMERICAN ATTITUDE TO STERLING INDICATED TO BE THAT IT SHOULD BE DEVALUED

(Received 10.50 p.m.) NEW YORK, August 22 The American reaction to the British quest for further accommodation .regarding the loss of sterling reserves of gold and’dollars is not at present regarded as being as promising as could be desired.

Tne decision has been taken by President munan to nave the Unitea States Secretary oi the Treasury, Mi John Snyaer, preside at the 101thcommg uoiiar tarns in Vvashingcon, when sir stalioru Cripps and Mr bevm will meet America's representatives. The Washington correspondent oi the "New York Herald Tnoune” says, "inis decision has resulted in a deepening pessimism over me success of cue Comeience. rhe curivspondent says: “The BJtisn, in particular, are disappointed over the Administration’s choice of Mr Snyder, formerly he was a Missouri oanker. Mr Snyder, in his re--cent visit to London, seemed to the inrush to aisp.ay little appreciation oi enormous political consequences that vvou.d attend a British economic collapse, 'the Biitisn would have piererred Mr Dean Acheson (Secretary oi State; preside. They reel that their crisis demands something more than the bankers' approach to their pioblem. What is at stake is the whole structure of a Western alliance against Soviet Russia. The U.S. State Department is fully aware that Britain will go bankrupt by Christmas, unless the present rapid decline of her gold and dollar reserves is checked. It also knows that the present crisis is the most dangerous and most delicate one to confront the West since the year 1945. Perhaps, Mr Snyder also appreciates the magnitude of the impendi- disaster. But he did not show it in London. His appointment for the conference was interpreted as an indication that the U.S. Administration meant to treat the sterling crisis merely as an economic problem. Th? correspondent continues: “On the American side, there seems to be little hope or expectation of any major achievement at the conference. There is a general conviction, although it has not officially been expressed, that the only real solution is for Britain to accept the devaluation -of the pound, and increased austerity for her people. Senator Kenneth Wherry (Republican. of Nebraska, who is the minority floor leader in the Senate, in a statement tonight, warned the Administration not to try to by-pass Congress in these dollar talks. He declared that Congress would have the final say on any afj-eement that might be reached at the conference. He said: “Something better than give-away shows is wanted in the interests of Britain and of the maintenance of American prosperity and security. The dollar shortage is the symptom, and not the cause, of Britain’s ailment. The primary cause, in the opinion of competent observers, is Britain’s failure to price her goods for enough to capture world markets. Britain, like the United States, is afflicted by extravagant expenditures. That is a customary by-product of Socialism wherever it has been tried. When Britain wins world markets, through her efficiency, quality and competitive prices, her dollar shortage will disappear. Until her problem is attacked along that line, there is no sense in pouring the American taxpayers’ money into a bottomless pit.”

wants to sell her aold direct to , the United States, instead of through the sterling area dollar pool." Mr Matthews claimed that British officials took a pessimistic view of the forthcoming talks on sterling in Washington. He said: ' “There is unanimous agreement that no simple easy, short-term solutions are possible. Nobody in London- expects any dramatic, definite agreement to emerge from the talks.” Mr Matthews said: “Some experts [ in London believe that Britain could carry on with very little or no United States help. It would mean terrific internal and world repercussions and would be bad for the United States too, but experts think it is feasible. There would be grave hardships in Britain, including unemployment, but there would be no starvation, and no economic collapse. “It would, however, represent the greatest Soviet victory since the elimination of Nazi Germany, and the strain on British-American relations would be catastrophic, according to a high opinion in London. _ , “One of the highest priorities oi Soviet foreign policy is considered in London to have been to cause a split between the United States and the British Commonwealth, and to concentrate its maximum attack on Britain, as the weaker of its two enemies.”

T.U.C. Warning On Currency Disorder And Finance Problems

LONDON, August 21. The General Council of th e British Trades Union Congress to-day warned the Labour .Movement that it was facing the greatest struggle in its history. ‘ . This statement was made in a report which will be presented to the annual T.U.C. Congress on September 5. The report said the Labour Movement’s crucial period would culminate in the next 12 months in the general elections. The T.U.C. claimed that financial and currency disorders alone were responsible for Britain’s economic difficulties. "The magnitude of our industries' efforts is strikingly emphasised by the rise in our overall production and the expansion in our export trade”, the report said. “Our country’s main problem is not a decline in productive power, but is the financial and currency disorders which affect economy of all nations and bear with exceptional severity on our own country as the custodian and guardian of the interests of th e sterling area”. The report declared that these bal-ance-of-payment difficulties had complicated the operation of the Marshall Plan and had retarded Britain’s recovery.

The report criticised the “disruptive tendencies inside the Labour Movement which have seriously endangered good relations among unions and have jeopardised the work of the Labour Government”.

WHAT WILL BRITAIN ASK FROM U.S.A. ?

LONDON, August 21. Unofficial financial quarters suggest that British proposals for discussion at the Washington talks will include: — (1) International commodity agreements which would ensure fair and steady prices for the sterling areas dollar-earnihg products, notably for rubber, tin and cocoa. (2) Increased American, stockpiling of sterling area goods such as rubber and tin. . (3) Extended United States investments in overseas countries, includig those of the sterling area. These investments would raise the living standards of the countries affected and would enable them to buy more . from the dollar a-'ea. (4't A reduction, of American taron British goods. The Chancellor of the Exchequer. (Sir Stafford Crinps) has decided to postpone his departure for the Washington talks from August 27 to August 31. This may delay for a day the opening of the conference scheduled for September >6. Sir Stafford Cripps, who dislikes flying, will remain for an extra period at his Gloucestershire home, where he is convalescing after treatment for a digestive ailment at Zurich. “The Times” to-day called on the British Government to announce remedies for solving Britain’s economic difficulties; before British spokesmen left for the Washington economic talks next month. It said American sympathy could easily dw-ndle if the British Ministers and experts arrived with nothing to offer but a hope of more aid.

Job’s Comforter LONDON, Auugst 21. Sir Thomas Beecham, orchestral conductor, speaking in Edinburgh, where he is to conduct the Royal Philharmonic Orchestra at the opening concert of Edinburgh’s International Festival, said: “The 1951 Festival of Britain is a most monumental piece of imbecility and of iniquity. We are broke. Underline that three times. We have been misgoverned worse than any nation in the world. Lunatics have dragged us into world wars. We are going to celebrate 50 years of the most abominable mis-government b v having an exhibition and a festival at the expense of United States money. To what depths have we sunk?” Speaking of the National Theatre project, Sir Thomas said: “The country has gone potty. I strongly object to money being provided for musical enterprises by the whole bodv of taxpayers. As we have not money for our necessities, we cannot afford luxuries. The Americans, therefore, are paying for our music.”

STERLING CRISIS CAUSING DISPUTES IN STERLING BLOC

NEW YORK, August 21. One of the most serious aspects of the present British financial crisis was the internal bickering among the sterling bloc, said Herbert Matthews London correspondent of the Now York Times, in a dispatch to h’.s newspaper. Australia and New Zealand are very critical, and show signs of wanting to go off on their own,” said Matthews. “South Africa