INDIA CRITICISED FOR MAKING SIDE DEAL WITH U.S.A.

Wanganui Chronicle, 9 November 1949, Page 5

INDIA CRITICISED FOR MAKING SIDE DEAL WITH U.S.A.

Barter Of Manganese For Wheat; The Implications Not Liked

LONDON, Nov. 8 (Rec. 6 “Financial Times” for making bartering manganese for wheat. “One of the reasons given by Sir Stafford Cripps for his sudden conversion to devaluation was that it would preserve the meagre gold and dollar resources of the sterling area, to which Britain acts as a banker,” states the “Financial Times.”

It continues: “If those reserves are drained away bankruptcy will be the lot of Britain, and many of the countries that put their trust in her. “Faced by this prospect, every country in the sterling area might be expected to do Its utmost to strengthen the dollar and gold resources held in London as trustee for the whole area. The biggest sourfce of dollars in the area is the proceeds of sales to Americans of commodifies like rubber, gold, tin, cocoa and manganese. Manganese is essential in the production of steel, and the United. States steel industry has to import most of its supplies. “India is an important producer of dollar - earning manganese. Mr. Nehru’s visit to America has been much publicised. But no publicity has been given to his side deal, whereby considerable quantities of Indian manganese were bartered for American wheat. This piece of barter obvi- ■

pm).—lndia is criticised by the “a side deal” with America by

ously weakens the dollar-earning powers of the sterling area “Was the British Government aware of Mr. Nehru’s side deal? For our Ministers must surely realise the bad example set by it. If Commonwealth territories in South-East Asia and West Africa followed India’s example, they could obviously provide themselves with all sorts of muchneeded consumer and capital goods. They would also destroy the hard currency reserves of the sterling area. “Of all members of the sterling area India has been most clamant in her demands on Britain. We sent her enormous quantities of unrequited exports. That is the current euphemism for giving away British goods. “India also has been allowed to make many great drafts on hard currency resources of the sterling area. “Sir Stafford Cripps once declared that one of the purposes of Socialism was to liquidate the British Empire. He certainly played a big part in establishing the Republic of India. If he continues to play Santa Claus to the Government of India he may well liquidate the sterling area as well.” Special N.Z.P.A. CorreI spondent.