Wool Speculators Causing Britain to lose More Dollars

Grey River Argus, 12 November 1949, Page 5

Wool Speculators Causing Britain to lose More Dollars

(Rec 11.56) LONDON, Nov 11. Britain is again losing dollars through the re-sale of sterling woo to dollar markets by non-sterling operators on the Continent. The practice was temporraily checked by the devaluation. It is reported to be reviving as the result of a di.’cov.n being given on free sterling abroad The traffic is not as large as before devaluation, but still represents ; loss of dollar earnings io 'Britain. When sterling was pegged at 4.03 dollars, a discount at which free sterling was available on the Continent. This enabled operators there to buy wool in Britain and in the Dominions and to resell it to the United Stateat prices detrimental to direct storing exports to the dollar area. The devaluaton of sterling undercut this practice. It is now reviving on a basis of about 2.5 dollars, which represent about a 10 per cent discount on the ofiical sterlng-dollar rate. Britain and the wool-producing Dominions have instituted wool export licensing in an effort to check these re-sales to the dollar raarekts, but the measures were apparently not' completely effeetve. Trade opinion in Bradford is that the most effective way to check this practice would be to allow sterling to be more readily convertible on trading account.