BRITAIN'S BURDENS

Otago Daily Times, Issue 26028, 17 December 1945, Page 5

BRITAIN'S BURDENS

THE LOAN FROM AMERICA RESTRICTIONS IMPOSED \ CRITICISM OF TERMS LONDON,' Dec. 14. That Britain, having lost £7,300,000,000 of her total pre-war wealth of £30,000,000,000 is .obliged to put her signature to a debenture carrying an annual charge of £35,000,000 is deplored in the British financial press as a grave miscarriage of justice. Without the dollar loan Britain’s standard of living would have been forced so low, and the industrial machine would have been so starved of raw materials and plant, that the absorption of the demoDilised into normal employment would have been impossible, and the essential increase in exports impracticable. Grave threats would inevitably arise to physical health, social discipline, and industrial efficiency. These threats are now temporarily averted, but other threats have arisen . to the Commonwealth’s economic unity and Britain’s ability to defend herself against repercussions of a post-war slump in the United States, which many experts consider inevitable. Bargaining Strength Crippled Criticism of the loan, with its attached strings, has increasingly found expression in resentment at the restrictions imposed on Britain's freedom of action which are considered likely to cripple her bargaining strength and virtually rule out any possibility of planned expansion of international trade. The Economist points out that the whole of Britain’s necessary 75 per cent, increase of exports will have to be concentrated on manufactures, and calculates that in this decisive field the British task is to secure additional markets equal to one-fifth of the whole international trade of the world. This could only be done by the use of every possible bargaining weapon, and the Economist finds it very difficult to understand how any man in his senses could think that the obligations now assumed could possibly be fulfilled in the face of the conditions attached to the loan. The trend in the stock markets suggests that business confidence has derived little encouragement from the loan agreement. Industrial opinion is clearly perturbed, and economic opinion far from being at ease. Pro- ■ fessor Henry Clay, former economic adviser to the Bank of Ehgland, and now Warden of Nuffield College, fears that the United Kingdom will be forced to restrict, rather than exbana imports, with the result that international 'trade will be less than if the sterling area were maintained. House of Lords Battle The battle oyer the American loan / and Bretton Woods will be. fought all over again in the House of Lords on December 17, says the Press Association. Lord Beaverbrook has tabled an amendment opposing the Government’s motions on the grounds that “the Government’s measures involve a return to the gold standard, the abolition of the sterling area, and the destruction of Imperial preference, all of which would endanger the economic well-being and full employment of our people, the unity of the Empire, and the conditions of expanding, commerce essential to prosperity.” Voting on the amendment could be a close thing. There are 26 Laboui peers, so that if Lord Beaverbrook persuaded 26 Conservatives to vote with him, the 'loan agreement would De thrown out. The Government’s only course then would be the mass creation of Labour peers to ensure ratiff cation before the end of December. The Conservative peers, however, are _ expected to accept, their leader’s (Lord Cranborne) advice and abstain from a division.