BRITISH CRISIS

Otago Daily Times, Issue 26544, 20 August 1947, Page 4

BRITISH CRISIS

AID MEASURES SUGGESTIONS TO NEW ZEALAND MR ATTLEE'S OUTLINE Parliamentary Reporter WELLINGTON. Aug. 19. In reply to the offer of assistance cabled by the Prime Minister, Mr Fraser, suggestions of ways in which New Zealand may help Britain in Iter present crisis have been received from Mr Attlee. The British Prime Minister has appealed to New Zealand: — 1. To keep her imports from the United Kingdom at least within the limits of current income. 2. To speed up the turn-round of shipping. 3. To effect a reduction in petrol consumption. The dollar shortage, Mr Attlee said, was the most critical factor, in the situation in Britain, and it was one on which she would especially value the co-operation and assistance of New Zealand. “Delays in unloading and loading cargo at the ports not only reduce the supplies of food available, but greatly add to the drain on our shipping,” said Mr Attlee. “Thus, for every day that can be saved in the turn-round of British ships, we save 3000 dollars on the hire of an American one. Any-; thing you can achieve to accelerate the turn-round of shipping will be most valuable. Rise in Food Prices “ I stated in the House of Commons," Mr Attlee's message said, “that the level of distribution of foodstuffs in this country depends primarily upon the degree to which we - are able to obtain supplies from other than hardcurrency sources. The Government and people of New Zealand have over the past years recognised our need for the maximum supplies of staple foodstuffs from New Zealand, and we know of the efforts which have been made to maintain these.' “Any steps which can be taken to increase and accelerate the supplies of dairy products, meat and animal fats would be a contribution of the highest importance in the present emergency. “I also emphasised in my statement that a major factor in our present difficulties is the big rise in the price of food imports generally. You have, in general, been able to avoid a comparable rise in the price of New Zealand products, while still ensuring a fair return to your producers, by your policy of price control and stabilisation. You can help us greatly by maintaining this policy and by keeping to the lowest possible figure, consistent with your internal stability, the prices which you ask us to pay. Linytation of Imports “It would greatly help us if, for the current year, you could keep your imports at least within the limits of current income. “During the immediate critical situation it is most important for us that you should avoid any necessity for drawing down your sterling balances, and we shall hope that, if there should be any possibility of your building up your assets, you would be prepared to hold further sterling. “As you appreciate, one of the most urgent needs at this time is to make our supply of dollars last as long as possible. Briefly, the acute situation which faces us is this: We believed that, had our expectations in other directions been realised, the amount of the loan made available to us by the United States would have been sufficient to enable us to reach, without further aid, a stage of recovery. Unfortunately, those expectations have not been realised. The big rise in the prices of food and other imports, disappointment in the recovery of Europe, and. to a lesser extent, the severe winter, which curtailed production, have been the main upsetting factors. “ Further factors arising from the world shortage of dollars are now causing an additional drain. Sweden is in dollar difficulties, so is the greater part of Latin America, and, indeed, most of the world. The consequence is that great areas are attempting to meet their dollar difficulties by restricting imports (including those from the sterling area), with the result that the sterling which they receive for their exports tends to be spent in dollars to meet urgent needs for American goods, instead of being freely spent in the sterling area. Lines of Approach “ It is against this background of an extensive and spreading dollar, crisis that we have to operate. We have just announced still further import cuts from dollar sources, which will impose a severe measure of austerity on our people. Moreover, our nondiscrimination undertakings in the financial agreement with the United States bring us directly up against difficulties with other countries. We have found the following lines of approach valuable in our attempts to tackle the problem, and we commend them to you for your earnest consideration in determination of your import policy: The acceptance of delay in the securing of supplies which are not of an immediate and vitally essential character. The careful examination of the relative essentiality of capital works programmes. particularly those which involve dollar expenditure, either directly or indirectly. The examination of the maximum scope for economy in all terms in hard currency expenditure. “You will know of the measures which we have already decided to take on such items as tobacco, films, and paper. “As you know, we have decided to cut consumption here: any reduction represents a dir.ect saving in dollars, since the British supply companies 1 obtain their marginal supplies from dollar sources."