ANGLO-AMERICAN LOAN

Wanganui Chronicle, Volume 89, Issue 300, 20 December 1945, Page 8

ANGLO-AMERICAN LOAN

THE FEELING IN U.S.A. WAIVER CLAUSE IMPORTANT (By Norman Crump.) (Special) London, Dec. 13 Late on December 7 i reacned London from the United States to find that the Anglo-American loan agreement had been signed the previous day while I was in the air between Bermuda and Lisborn. 1 give these personal details to show that while on the one hand I had not yet had time to make myseli fully conversant with British opinion, 1 had the good fortune to be the only British financial editor present in the United States during most of the negotiations leading up to the agreement. When I reached the United States at the end of October, I was hopeful that American opinion would be ready to consider a financial grant, to see Britain through the transition period which must precede the restoration in full of Britain’s export trade. There were strong arguments in favour of that course, notably the fact that Britain stood alone in 1940 to 1941, and also that the economic conduct oi the war laid on Britain the task of mobilising herself for war while depending upon others of the United Nations to supply her with a largepart of her material needs This was the position on V-J Day and it cannot be quickly reversed. And until that reversal can be completed Britain cannot be self-supporting. When I reached the United States, however, I quickly reached two conclusions: the first was that while the American nation would readily grant us a loan, a grant was out of the question; the next was that if negotiations broke down the British people would, be committed to years of austerity without the stimulus ol working to beat the enemy. Furthermore the sterling area countries might feel that Britain had failed to obtain a new supply of dollars which in part was required to meet their needs. This is the background to the Loan Agreement as I saw it, as a British observer. And that is why I am glad agreement wss reached, even though repayment will lay upon Britain a.) onerous and prolonged burden. To my mind the most important part of the agreement is the Waiver Clause, which relieves Britain from the need of paying interest if her income from exports and other current overseas transactions is insufficient to finance her imports on the pre-war scale. Quite frankly I should like to have seen the Waiver extended to cover repayments and also to cover a larger volume of imports. But the importanr point is established. During my travels about the United States 1 found many people ready to accept this as only reasonable. Several clauses in the agreement re-1 late to the modification of arrangements of the sterling area. To understand this it is essential to realise that American opinion is entirely opposed to exchange controls, discrimination between one country and another, and similar practices which arose out of the second world war and also out of Britain’s shortage of dollars. It is equally necessary to remember that in pre-war days a large section oi British opinion shared this repugnance, and more latterly have only counteracted these controls and discriminations as being inevitable in view of Britain’s shortage of dollars. It seems only logical that once Britain’s dollar resources have been reinforced as they will be by the loan these con-trols-and discriminations should gradually bo relaxed.

The proposal for an International Trade Conference is inevitably linked with the Loan Agreement, even though the two questions. were discussed independently at. Washington. Here again American dislike of Imperial preference can be set against British dislike of the American taril at its present: level. Two points cai fairly be made: The first is.that boti Imperial preference and American tariff must be discussed together in coirimon with the general question oi tariffs, the second is that the British Dominions and Colonies must be parties to the discussions—as indeed they will be. for the Dominions at least will be full participants in the coming International Trade Conference.

They will regard it as essential that the Loan Agreement should be ratified by the British Parliament, though it is obvious that it will impose upon Britain a heavy burden at a time when she had certain moral claims to generous treatment. On the other hand the discussions came at a time when American people felt they still had to make good some of their material needs, and that expenditure of the proceeds of the loan might conbict with the fulfilment of their home needs. 1 believe that view to be erroneous for Britain needs oil, cotton and foot! rather than those manufactured goods which the American want for their own home.

Some sections of opinion think it a pity that the debate in the British Parliament has to be rushed. The reason is that the Loan Agreement depends upon the adoption by Britain and other countries of the Bret tern Woods Final Act. This was ratified by Congress, but this American ratification is conditional upon a sufficient number of other countries ratifying by December 31. Other countries arcwaiting upon Britain and hence the present need for haste. The British and the United States of America are faced with big decisions. It is pity that these decisions should have had to be taken so soon after the war. but this is unavoidable. As matters stand it is in the interest of the world that both nations should ratifq the agreement