EFFECT ON BRITAIN

Nelson Evening Mail, Volume 80, 29 August 1945, Page 5

EFFECT ON BRITAIN

END OF LEND-LEASE SOME FAVOURABLE FACTORS London, Aug. 27 Britain’s position in the forthcoming conversations with the United States is by no means as weak as suggested in the House ot Commons last week, says “The Times” specia’ correspondent examining the effect ot the termination of lend-lease The correspondent admits that Britain, whose international position was worsened by £5,500.000.000 during the war. is tor the first time since Queen Elizabeth a net debtor country, but adds that the annual gap which Mr Attlee estimated at £1,200,000 000 very much exaggerated the position when payments for munitions are no longer necessary. It would probably be pessimistic to assume that in the coming year more than £3OO 000.000 sterling would be needed for absolutely essential supplies from the United States because that figure might be substantially cut. Britain, according to official American statements, possesses a gold and dollar reserve of about £700.000 000 The correspondent points out that the end of the war brings great changes, which on balance will be favourable. The import of arms, which amounted to £1,055 000,000 in 1945, will almost immediately cease. Britain will also increasingly be able to buy in the cheapest markets as shipping becomes no longer a bottleneck. Moveover, it is again possible to import bulkier but cheaper commodities instead of costly finished goods. A large proportion of civilian imports from the United States, for instance tobacco, has already been taken off lend-lease and is being paid for by the cash expenditure of American troops in Britain. The end of the war means an automatic reduction in British imports from the United States, but the needs of the American Army in Europe will now be paid in dollars. The position in some respects may be more difficult regarding British economic relations with countries for whose wartime supplies Britain has been paying by the accumulation of sterling balance. The deficit amounts to £700.000,000 or £800,000.00«. but fortunately, except for Latin-American countries, the largest part of the deficit is incurred with members of the Commonwealth or close Allies, most of whom depend on the Br’tish market. There is no reason why the so-called sterling area, which was used as an instrument of tola! war mobilisation should not be used for reciprocal purposes of reconstruction. "Tie Daily Mail' in an editorial expresses the opinion that Mr Crowley’s proposed 30-year loan would be a millstone around the necks of the British people, mortgaging their standard of living for a generation. If the grant of an immediate short-term credit to enable Britain again to get on her feet cannot be arranged Britain should call an immediate conference of countries in the sterling area to consider the position for this is not a matter which concerns Britain alone: It is of vital moment to all the Dominions, excluding Canada, also to Egypt. Iraq and other States whose currencies are tied to sterling. These countries should not Wdit for new proposals from the United States, but should get together immediately and every effort should be made to build up trade within the area. EXPERTS SAIL FOR U.S.A. London, Aug. 27. Lord Keynes went aboard the liner Pasteur at Southampton to-day. on his journey to Washington to take part in the talks on the end of lend-lease. With him were experts from the Foreign Office, the Board of Trade, and the Ministry of Food. The U.S. Assistant-Secretary of State (Mr Clayton) is going to Washington Oy air to-day after important discussions with British leaders and officials on the effects of the lend-lease stoppage, says the Press Association. Mr Clayton originally visited London for UNRRA meetings.