“BRITISH FINANCES SERIOUS BUT NOT DESPERATE”

Wanganui Chronicle, Volume 89, Issue 226, 24 September 1945, Page 5

“BRITISH FINANCES SERIOUS BUT NOT DESPERATE”

LORD HALIFAX’S BROADCAST

DOMINIONS AFFECTED BY ATTITUDE TO IMPERAL PREFERENCE

Reed. 11 p.m. Washington, Sept. 22. J.ord Halifax, Ambassador for the United Kingdom in Ibo United States, and leader of a mission, which included himself and Lord Keynes (Financial Adviser to the British Treasury), to the I nited States in an effort to obtain aid from America in thc postwar period following the cancellation of Lend-Lease agreements, said in a broadcast that Britain’s financial situation was serious, but not desperate. He said the British were not approaching thc Americans as suppliants, hat in hand, or holding out a gun, but “as an Allied comrade, to tell you of our situation, learn yours, and then see if, together, we can make our partnership as great a power for peace as it has been for war.”

Lord Halifax declared that two al-i ternatives were facing Britain as the | result of depletion of her financial re-! sources, and the sudden withdrawal of > Lend-Lease. Firstly, the development j of trade within the sterling area, with [ subsequent controls, barriers and restrictions. “It may not be the best solution, but it seems the only way out, and whether we want it or not, we may have to take it,” he said. ' Secondly to try and work out something making for a freer and expanding world trade. This was not only our problem, but something which vitally concerned the whole a Grid. Lord Halifax denied that u>e British elections meant the new Government was contemplating rash experiments. He recalled Britain’s strong tradition of continuity, and the fact that some Labour Party Ministers were in the Churchill Government.

Official circles point out that th* sterling problem, which the Americans regard as of cardinal importance, presents a delicate situation '.or the British financial mission, because of Imperial relations. Hence, while the United States can suggest the Dominions should voluntarily scale down the blocked sterling balances, Britain must necessarily be reluctant to initiate such a suggestion herself. In fact it can be said Britain so far has not moved in that direction. Instead the mission tends to emphasise, firstly, Britain’s consideration for Dominion interests; secondly, the magnitude of the Dominions’ contribution to victory, which is not realised here. Thus, while some Americans urge Dominions’ concessions to Bri-aia as one starting point in the BriL’sn and American negotiations, the Bi Irish argue that if a British and American agreement first can be attained with considerable benefits to the sterling countries, then the road is eased for reaching a direct agreement with the Dominions. Moreover, a BritishAmerican agreement would also facilitate Imperial economic discussions, because they would then be based on a less problematical conception of post-war prospects.

Regarding possible Dominion concessions to Britain, it has been pointed out that while British exports have declined during the war to less than one-third the pre-war volume, the Dominion’s export capacity, including Australia’s, has increased consiti?rably. American officials, recognising the British difficulties, also the probable unprecedented British foreign debt burden, desire to meet Britain halfway, or further. They desire to reduce American tariffs, but point out that Congress will look for British as well as American concessions.

Regarding Imperial preference, the British mission is reported to have recognised that Britain is pledged progressively to reduce Imperial preference, because the Lend-Lease agreement contains a clause binding the parties to a progressive reduction and eliminations of all trade barriers.