DOLLARS FOR BRITAIN

Wanganui Chronicle, Volume 89, Issue 227, 25 September 1945, Page 5

DOLLARS FOR BRITAIN

AGREEMENT LIKELY SCHEME TO RECONCILE THE TWO CURRENCY AREAS

SALIENT PROBLEMS OF THE CUIRENT TALKS.

Recd. 10 p.m. New York, Sept. 24. Washington oflicials confidently predict that the current British and American talks will result in an agreement giving the United Kingdom and British Commonwealth sufficient dollars to unite their trade area with the American and avoid a division of the world into two intensely competitive currency spheres, says tiie "New York Times” correspondent. This would mean a much earlier than otherwise return to normal multi-lateral trade.

One of the most troublesome problems of the negotiations is what to do about the 14,000,000,000 dollars worth of blocked sterling balances which have piled up in London during the war as a result of British war purchases throughout the sterling area, and Britain’s inability to endow these balances with either a convertibility into more desirable currencies, or to translate them into purchasing power in terms of British manufactures. Two ticklish problems are how to finance American credits in a form acceptable to American public opinion, and what to do about persuading the sterling area countries to cancel at least a substantial part of the sterling debt. It is generally felt in Washington that an outright gift would be repugnant to the American people and that at least a token rate of interest must be charged if only to pay expenses as a kind of service charge. From a strictly economic point of view, the money, however it is provided, will not remain out of the United States, since it will be used to purchase goods from America. Canada holds none of this sterling debt, having made an outright gift to the United Kingdom of its war aid.

American official circles expect that as soon as the British get a reasonably acceptable American proposition they will contact the sterling area, probably while negotiations are still continuing, to see what they might do in return for American assistance.