CANADA AIDS BRITAIN

Wanganui Chronicle, Volume 90, Issue 57, 9 March 1946, Page 5

CANADA AIDS BRITAIN

FIFTY-YEAR LOAN AMOUNT IS £281,000,000

Recd. 6 p.m. London, March 7. Canada is making a loan to Britain of 1,1)30,000,000 dollars (£281,000,005 sterling), to be repaid over a period of 50 years after January 1, 1951, and carrying from that date interest at 2 per cent.

The Prime Minister, Mr. Attlee made this announcement in the House of Commons to-day after news was received of the signature of the loan agreement at Ottawa.

Mr. Attlee said that both Governments des.red to make constructive arrangements enabling the United Kingdom to meet the serious problem's she must face after the losses and destruction caused by the war.

There was an article in the agreement, he said, providing for waiving interest payments in certa.n delined circumstances. The agreement provided that the interest-free loan granted to Britain by Canada in 1942 would be continued on the same basis until January 1, 1951. The two Governments, before that date, would discuss how to treat the service and repayment of any balance of the 1942 loan then outstanding. The agreement cancelled the 425,000,000 dollars’ indebtedness of the United Kingdom for the Commonwealth air training plan. The two Governments had also agreed to accord each other, in regard to exchange controls and import restrictions, treatment not less favourable than that provided for in any agreement which either made with the Government of any other country.

TEMPORARY FINANCIAL DIFFICULTIES. Mr. Attlee said that the agreement would enable Britain to overcome her temporary financial difficulties in purchasing from Canada, would contribute to the development of trade between the two countries and the removal of trade barriers, and would also free the use of currencies for international trade. These policies were in the vital interests of both countries. Both Governments believed they had taken essential steps for expansion of world trade. Mr. Attlee said that Canada and Britain had also concluded a supplementary agreement arranging lor the setlement of all remaining claims arising out of the war effort of both countries. This agreement provided that the United Kingdom should cancel all claims on Canada outstanding at February 28, 1946, and pay Canada 150,000,000 dollars. Canada would cancel all outstanding claims on the United Kingdom which were not otherwise dealt with, inclull ng the cost of food and other supplies delivered by Canada to the United Kingdom between V-J Day and February 28. 1946.

Mr. Attlee concluded: "I want to express our cordial appreciation of the sympathetic approach to our mutual problems which has been shown by the Canadian Government. I state my convict on that the agreement will be of great value to cu.' c0.:’.:..: i interests.” METHOD OF REPAYMENT. More complete details of the agreement which were made available after Mr. Attlee's announcement describe the method of repayment. The amount of credit drawn by December 31, 1951, is to be repaid in 50 annual instalments, begihning on December 31, 1951, w.th an interest rate of 2 per cent, per annum. The interest for the year 1951 is to be computed on the amount outstanding at December 31, 1951. In the succeeding years the interest is to be computed on the amount outstanding on January 1 in each year. The method of repayment in succeeding instalments is as follows: 49 instalments of principal repayments and interest shall be equal and calculated at the rate of 3,182,300 dollars for each 100,000,000 dollars of credit drawn by December 31, 1951. The fiftieth annual instalment will be at the rate of 3,184,073.665 dollars for each 100,000,000. Each instalment will consist of the full amount of interest due. The remainder wjll be principal to be repaid. These provisions are subject to the waiver provisions. Canada agrees to waive’the interest on the following conditions: —(1) If Britain finds a waiver is necessary in view of existing and prospective conditions of international exchange and the level of Britain's gold and foreign reserves; (2) if the International Monetary Fund certifies that the income of the United Kingdom from home-produced exports, plus the net income from invisible current transactions, was on an average, over the ■five preceding years, less than the average annual amount of Britain’s imports irom 1936 lo 1938—this average figure to be fixed at £866,000,000 sterling, subject to adjustments for changes in price levels; and also (3) if interest payments are waived on any credit, to the United Kingdom to w'.iich a similar waiver provision apples. In addition, the Governments agree to consider what changes should be made in the provisions for credit if there is any major change in the international financial situat.on which materially affects prospective benefits and obligations.

A high financial expert in London stated that Canadian implementation of the loan agreement would proceed before the Congress dec'sion. The loan requires ratification by the Canadian Parliament, but not the British, and will be effective from the moment it is approved by the Canadian Parliament. EMPIRE ARRANGEMENT URGED. Mr. W. J. Brown, commenting in the House of Commons on Mr. Attlee's statement, asked whether it was not conceivable that a similar arrangement between Britain, Australia, Nev.Zealand, South Africa and India might spare us as a nation lite humiliat.on of what was going on in Washington. Mr. Attlee said there was a difference between loans within the sterling area and loans within the dollar area. Mr. R. De la Bere (Con.) said: "The Dominions have behaved magnificently.” (Cheers). Mr. Attlee added that the gratitude of the House would be conveyed to the Canadian Government. Mr. Antnony Eden said lie and his friends cordially welcomed the loan. It seemed a satisfactory agreement which woud carry immediate advantages to Britain . and, they hoped, equal advantages to Canada. The "Daily Mail,” in an editorial, Says: "The thanks and gratitude of the Brit sh people are due again to Canada, as they were at all times during the war. Whatever the fate of the American loan, the Canadian credit has given Britain a foot ng in the dollar area which will be of great value in the next few years.”

"The Times,” in a leader, says the agreement will provide invaluable assistance to Brita n and facilitate an orderly transition to peace-time economy. 'll implies no lack of gratitude to Canada to point out. that Canada also should gain greatly, since the United Kingdom must be one of the principal markets for Canada's export trade.”

General. The 1945 total was 685.544. representing a rate of 16.1 ner 1000 o! the population. The number in 1944 was 76.679. or 17.5 ner thousand. Th" total of 847,916 deaths gave a new low record rate of 11.4. The previous lowest was 11.5 In 1942.