INDIA’S COMPLAINT AT BRITAIN’S DEVALUATION TACTICS

Grey River Argus, 7 October 1949, Page 5

INDIA’S COMPLAINT AT BRITAIN’S DEVALUATION TACTICS

NEW DELHI, October 5

The Finance Minister of India, Doctor John Matthai, opening a debate on devaluation in the Indian Parliament, complained that the decision made by the British representatives at the Washington financial talks had exceeded the brief which the Commonwealth Finance Ministers had given to Sir Stafford Cripps. He said there was not any reference whatever to devaluation in the resolution that was passed by the Finance Ministers Conference in London, which became the basis for the Washington talks. It was possible for the British Government to have taken the Commonwealth Ministers more fully into its confidence than was done.

Doctor Matthai said that Pakistan’s decision not to devalue her rupee was “totally lacking in economic justification.” He added that he shared the general view that strong economic forces would make it increasingly difficult for Pakistan to maintain her ratio.

Dr. Matthai said that he thought that in a matter which vitally affected the whole economy of every country in the sterling area steps should have been taken to arrange for a secret meeting of the Commonwealth Finance Ministers before a decision was reached on three points the need for, the extent of and the time of devaluation.

Dr. Matthai said it had been understood that Sir Stafford Cripps at Washington would argue the sterling case on the brief prepared by the Commonwealth Ministers Conference. The first information India had received on the devaluation decision was a message from Mr Attlee to Pandit Nehru on September 16—two days before Sir Stafford Cripps had announced the decision. He added “So long as we are a member of the sterling area, it is an obligation which we must be prepared to honour fully, that whatever we do must be in keeping with the general objective of that area.”

Dr. Matthai said that if there was no improvement in the dollar position of Britain and other sterling countries, and if their dollar reserves continued to diminish,” it is not inconceivable that we should be faced with the position of the sterling .area being dissolved.”