LENDING POLICY

Wanganui Chronicle, Volume 80, Issue 28, 3 February 1938, Page 7

LENDING POLICY

CHANGE BY BRITAIN MORE LATITUDE FOR FOREIGN ISSUES. LONDON, Feb. 1. The Chancellor of the Exchequer, Sir John Simon, announced in the House of Commons, an important change in lending policy. Greater latitude is to be given for foreign lending on a long-term basis on behalf of British, including Empire, borrowers, but consent for certain foreign issues cannot be given indiscriminately, particularly those on behalf of foreign Governments, foreign local or public authorities, or State-controlled organisations. Sir John Simon, in explaining the direction in which greater latitude in respect to foreign lending was contemplated, said that he referred particularly to loans to Empire borrowers for the purpose of assisting in developing enterprise in foreign countries, and to transactions involving large blocks of foreign-ewned securities. Sir John Simon added that foreign short-term lending of a non-com-mercial character raised special difficulties which rendered it generally undesirable. For Armaments? The Leader of the Opposition (Mr. C. R. Attlee) and several other members expressed doubts as to whether the change of policy announced might not encourage lending to Powers rearming with aggressive intentions. Sir John Simon said that he was surprised at these suspicions. The general purpose of the policy was to enlarge foreign trade, while individual -..ases could be scrutinised as before. His suggestion was in the direction of one of the proposals made in M. van Zeeland's report, and he hoped it would be largely welcomed.

M. van Zeeland’s report on the possibility of removing the barriers to international trade emphasised the urgency for suppressing restrictions on payments for merchandise, but recognised that it was necessary first to arrive at an agreed adjustment of external debts. Debtor countries must be supplied with credit facilities to enable them to support their export trade and finance part of their imports.