Extension Of U.S. Credits To Britain

Northern Advocate, 9 December 1940, Page 5

Extension Of U.S. Credits To Britain

(Received 11.30 a.m.) LONDON, December 8,

The recent statement of the British Ambassador to the United States (the Marquess of Lothian) has succeeded in its primary aim of giving the subject of American financial aid a thorough airing on both sides of the Atlantic.

Quarters in close touch with the Bank of England remain emphatic that no urgent need exists at the present, but stress the desirability of timely preparations. Authoritative circles give credence to Washington reports that important moves for the extension of credits have begun. Some circles forecast early developments partly because American readiness to grant financial support would greatly influence the attitude of several neutral Governments. Lend to Dominions.

Cne plausible theory currently advanced is that the difficulty created by the Johnson Act, which prohibits the U.S. granting loans to countries which have defaulted on their Great War debts, will be short circuited by lending not to the United Kingdom but to gold-producing Dominions, such as Australia, Canada and South Africa, which have no war debts with the United States. They are qualified to borrow, and, despite the existing legislation, could either lend money to the United Kingdom or repurchase their own loans issued in London. Will Lend Direct. The “Financial News” says the result of the transaction! cn the balance would he a reduction of the Dominions’ net indebtedness to the United Kingdom and a corresponding increase to the

UniVed States. Many bankers are of the opinion that America will eventually lend direct to Britain without resort to subterfuge, and might immediately be helpful by accepting delivery in Soutn Africa, where, it is estimated, £150,000,000 to £200,000,000 of gold is earmarked for the British account.