TO BE WIPED OFF

Nelson Evening Mail, Volume 80, 1 December 1945, Page 5

TO BE WIPED OFF

LEND-LEASE ACCOUNTS PART OF TERMS FOR LOAN TO BRITAIN REPO AT FROM AMERICA (Rec. 10.15 a.in.) New York, Nov. 30. British and American financial negotiators are reported to have agreed on wiping off lend-lcase accounts as part of the terms for a loan to Britain, says the “Wall Street Journal’s” Washington correspondent. The exact amount of the loan will be decided when all other questions are settled, but the interest rate will be fixed at 2 per cent. Major points outstanding concern repayments which will start in five years with the whole advance amortised over the next 50 years. However, provision is made to avoid formal default if Britain’s trade in any year does not give her the dollar exchange necessary to service interest and principal payments. Britain must not use any part of the loan to pay external debts. Instead, she must negotiate with the holders of blocked sterling accounts to write off part of these accounts and amortise the balance over a period of 50 or more years without interest.

The fact that the loan will not carry a “buy American” label is considered unimportant by experts, who explain that if Britain uses part of the borrowed dollars to buy goods from India, for example, India will spend the dollars in the United States, thereby providing an export market for American goods. Britain also agreed to quickly abandon the dollar pool in London and undertake to make sterling fully convertible into dollars once blocked sterling accounts have been settled.