EUROPE’S COMPLAINT AGAINST BRITAIN’S BIG DEVALUATION

Grey River Argus, 5 October 1949, Page 5

EUROPE’S COMPLAINT AGAINST BRITAIN’S BIG DEVALUATION

(Rec. 9.5). LONDON, October 4. British newspapers to-day discussed effects of Britain’s devaluation of sterling on other European countries. The Liberal paper, Manchester Guardian, submitted that the proposal for a thorough joint discussion of the effects of devaluation on the economy of Europe should have come from Britain and not from France, which country has asked for such discussion. The paper says: “This is not to say that there is much basis for the charges of irresponsibility that are being made against the British Government because it has devalued the pound without consulting the European partners of Britain in the Marshall Plan. Foreign critics are making the most of the sudden disturbance that we have inflicted on Europe. These critics are largely those who, for months, had been complaining that Britain was weakening the European economy by clinging to a false value for - the pound”.

The Financial Times said: “There is no easy way oat of this dilemma which the devaluation of sterling has posed. If it is true that the dollar markets for the products of the other European countries are not elastic, while for our products they are elastic, then there is a real divergence of interest between them and Britain on the issue of the exchange rates. It may have been this which prompted the British Government to act so summarily”.

BRITAIN’S STAND FOR CHEAP MEAT FROM ARGENTINE

(Rec. 10.10). LONDON, October 4. The Daily Mail says: Argentina’s ban on imports, announced in Buenos Aires yesterday, is recognised in Whitehall as another move in a “poker” game to force Britain to pay more for Argentine meat. The Daily Mail adds: Until Sir Stafford Cripps has examined the situation, no instructions will be sent to the British Ambassador. It is recognised that the Argentine Government is anxious to compel Britain to enter into new talks on th e price of the meat. It is reiterated that Britain will not be blackmailed. ARGENTINE ADOPTS ’ DEVALUATION BUENOS AIRES, Oct. 3 Argentina to-day reduced some of her exchange rates by 46 per cent. The new rates apply to the transfer of money for travellers, prftfits and certain services. The effect is to make the dollar bring 84.6 per cent., more in pesos. The rate was fixed at nine to the dollar, compared with the old rate of 4.875 pesos.

The peso was devalued to 25.2 to the British pound, instead of the old rate of 19.37. Argentina also suspended all imports, at least, temporarily. The Central Bank put- into effect the reshuffled exchange rate. It. also issued a list of items which can be imported, but said the method of applying for import permits will be announced later. There was no immediate indication of when this would be done.

The new schedule of exchange rates requires Britain and other countries which have cheapened their currencies to pay more for what they buy in Argentina. In some cases they will give more pesos for dollar purchases, which will make prices cheaper for those who can pax with dollars.

The new exchange rates announced are “free’ market rates. The Government froze the prices of primenecessities to all Argentine households according to schedules announced to-day by the Central Bank.

The old rate paid by Britain foi meat will not. be altered.

The price for 1949 w'as fixed in sterling at 97.536 sterling per long ton. The price for 1950, however, w'ill be subject to negotiation, which, it w'as agreed, should be conducted if the sterling was devalued. The meat price for 1949 was the only one fixed during the British-Argentine trade negotiations.

Idle price paid by Britain for other food or feeding stuffs wall presumably cost more, depending on the rate adopted for the particular commodity.