DEVALUATION HOVE EFFECTS INCREASE IN DOLLAR ORDERS

Otago Daily Times, Issue 27211, 14 October 1949, Page 7

DEVALUATION HOVE EFFECTS INCREASE IN DOLLAR ORDERS

NZPA—Reuter—Copyright LONDON, Oct. 12. The Chancellor of the Exchequer, Sir Stafford Cripps, said to-da£ that since the devaluation of the £ there had been substantial signs of a change for the better in orders from the dollar area.

Surveying Britain’s industrial scene at a press conference, Sir Stafford said that it was impossible as yet to form anything like a complete picture of the effect of devaluation on the export trade. It would be some months before the figures of actual shipments, industry by industry, could show how much advantage had been taken of the new situation.

He said that Britain’s industrial production, excluding building, during the first half of 1949, was 36 per cent, above 1938. Compared with 1946, the average production in the past 12 months had shown an increase of just over 25 per cent.

Asked whether an impressive increase in production may induce workers to ask for higher wages, Sii Stafford said he was sure they had more common sense than to ask for increases at this moment. He defended has forecast that devaluation would raise the cost of living by only about one point by the end of the year. * Commission’s Warning

The Geneva correspondent of the Associated Press says that the United Nations Economic Commission for Europe issued a warning to-day that Britain may lose the advantage of devaluation unless she imposed severe limitations on her own exports to the sterling area. The commission’s quarterly survey of European economy, which gave this warning, also pointed out that drastic cuts in the dollar imports of sterling countries other than Britain would be necessary to reduce the over-all deficit of the sterling area. The survey said that restrictions on both sterling and dollar imports of overseas sterling countries would tend to increase their own economic problems, but these may be largely overcome by greater recourse to the resources of international and other agencies established to aid in economic development or to finance exports. “The gold and dollar deficit of the sterling area is one of the most critical features of Europe’s current economic situation,” said the survey. “Major readjustments appear to be necessary if the deficit is to be eventually eliminated."