DEVALUING CURRENCY

Otago Daily Times, Issue 26775, 19 May 1948, Page 5

DEVALUING CURRENCY

EUROPEAN AID COUNTRIES

FUTURE “ REQUIREMENT ” BY AMERICA

N.Z.P.A.—Copyright

Rec. 9 p.m. WASHINGTON, May 18. The United States will “ require ” European Recovery Programme countries to consider devaluing their currencies when the Unite.d States thinks they should. This was stated by the Administration’s top group on foreign finance,. the National Advisory Council, in a report to President Truman sent to Congress. Such devaluation, the report says, should he worked out with the world monetary fund. The requirement will be asserted whenever the council “ believes that a country’s exchange rate is imposing an Unjustifiable burden on its balance of payments ” —in other words, when an inflated currency is drying up the country’s sales to other nations. The report adds that some adjustments in exchange rates (currency devaluation) may have to be made in the near future. The Associated Press says that apparently the United States could require countries getting aid under the European Recovery Programme t at least “to work on ” devaluation with the monetary fund by threatening to shut off E.R.P. money if they refused. The Associated Press adds that the British £, now valued at slightly over four dollars, is regarded in Washington official quarters as one of the E.R.P. country currencies which is vulnerable to a devaluation move later. Members of the council who signed the report included Mr Paul Hoffman. European Programme administrator, and the Secretary of State, Mr George Marshall.