THE OTAGO DAILY TIMES Wednesday, April 16, 1947. THE STERLING BALANCES

Otago Daily Times, Issue 26437, 16 April 1947, Page 4

THE OTAGO DAILY TIMES Wednesday, April 16, 1947. THE STERLING BALANCES

It is timely emphasis that the

Financial Times has laid on the

necessity for the Chancellor of the Exchequer to make it plain whether

or not Great Britain intends to make counter-claims against her sterling creditors. The reason for

this is that under the terms of the United States Loan Agreement, after July, 1947, “ the sterling receipts from current transactions of all sterling area countries will be freely available for current transactions in any currency area with-

out discrimination, with the result that any discrimination arising from the so-called sterling area dollar pool will be entirely removed, and that each member of the sterling area will have its current sterling and dollar receipts at its free disposition for current transactions anywhere.” It is therefore essential that the nations concerned should

know just what their financial assets in sterling are,. and it is equally essential that Great Britain should know what are her actual sterling commitments. Treasury representatives have already visited the Argentine, India, Egypt, and Iraq for preliminary discussions, and it has been reported that “ each side now has a much fuller understanding of the viewpoint of the other.” It does not appear, however, that this understanding is inclusive of the possibility of British counterclaims. Apart from the purely financial aspects," it is inescapable that there should also be an in-

volvement of political considerations, and the statement of the Egyptian Finance Minister that Egypt will ask for the British holdings in the Suez Canal Company as part payment is an indication of this.

The enormous size of British sterling indebtedness is one result of her total war effort. Great Britain emerged from the war with its creditor-debtor relationship revolutionised. Before the war Great Britain - was the world’s greatest lender; she is now the world’s greatest borrower. At ■ the beginning of February it was estimated that the total sterling indebtedness amounted to £2,948,000,000, the principal creditors being India (£1,217,000,000) and Egypt (£470,000,000). The growth of these balances was due to the large military expenditure incurred by the United Kingdom overseas, to

the fact that purchases from sterling countries overseas could not be ' matched by exports owing to the prior claims of the war on industrial production, and to the sale to Great Britain of the abnormal dollar income received by certain sterling countries during the war. Military expenditure figures largely in the Indian and Egyptian accounts. Here, too, the balances have been swollen by substantial local inflation. Equity would seem to require some scaling down of the amounts not only because of the inflation, but also as legitimate contributions to the cost of defence. The series of agreements which have to be negotiated represents a most difficult task, and in the final outcome the recovery of British export trade will play an important part in stabilising the movement of the balances until payment can be made.

HOTELS AND ACCOMMODATION A North Island magistrate, according to a paragraph printed in our News of the Day column yesterday, has accepted the excuse of shortage of staff as a valid reason for a hotelkeeper’s failure to meet his legal obligation to supply accommodation for the travelling public. It is probable that in this particular case ample proof was forthcoming to support the licensee’s defence and the bench had little option but to dismiss the charge. The case, however, once again draws attention to a grave defect in the licensing system that continues unremedied—the inability or disinclination of a considerable number of hotelkeepers to maintain residential accommodation in their houses. This criticism cannot, by any means, be applied indiscriminately or to publicans in general. A substantial section of the trade is fully cognisant of its responsibilities, and its members perform a valuable and praiseworthy service to the public by making available accommodation to the limit of their resources. These men have proved that, in spite of difficulties, reasonable consideration can be given to the residential factor, but the number of their fellows who have attempted to emulate their good example is too few. This shortcoming on the part of certain licensees is as apparent in the country as in the city, despite the fact that the demand for female labour is relatively light in many country towns, and small staffs can generally be selected from those members of the community for whom the large cities hold no irresistible attraction.

The findings of the Royal Commission on Licensing contained some pointed comment on this pernicious trend in the licensing trade. The Commission stated that there was a large field for substantial improvement in residential accommodation in hotels, and drew attention to the fact that, as a result of excessive goodwills being paid, emphasis has been placed on the sale of beer at the expense of good accommodation and service. One of the reasons suggested by the Commission for lack of proper control was that licensing committees receive inadequate information and were hampered by lack of power. It is, indeed, a deplorable fact that licensing committees have become little more than rubber stamps to periodic police reports which deal almost exclusively with infringements relating to the sale of liquor. The enlarging of their powers and the creation of an independent inspection and advisory board, as suggested by the Commission, would be one method of overcom-

ing the present difficulties and would probably be welcomed by a large number of people who have had the mortifying experience of being refused meals and accommodation at hotels in different parts of the country. It would, however, prove a drastic cure for an evil which the trade itself is competent to remedy. And as far as the situation locally is concerned, this remedy must be found before the commencement of the influx of visitors which can be expected to visit Dunedin for the centennial celebrations next year.