EFFECT OF REDUCED DOLLAR IMPORTS NOT YET FULLY FELT

Wanganui Chronicle, 14 December 1949, Page 5

EFFECT OF REDUCED DOLLAR IMPORTS NOT YET FULLY FELT

LONDON, Dec. 13 (Recd. 6 p.m.)— Explaining the recent statement of the Chancellor of the Exchequer, Sir Staffoivi Cripps, that the reduction in dollar imports decided upon by Britain and Commonwealth countries in July was “being carried out according to plan,” the financial editor of the “Manchester Guardian” points out that few of these reductions have had time to take effect.

Britain’s own dollar cuts will begin to operate only next year, he said. Australia has already announced it can do nothing until the middle of next year and the extent to which New Zealand has reduced its dollar spending is not vet clear. Southern Rhodesia has iI ready reduced its dollar buying and India has reduced its purchases of non essentials, but in general, the effect of the majority of the cuts is not expected to be felt until 1950.

“The most disturbing aspect of the dollar cuts,” continues the financial editor, “is the assumption by most Commonwealth countries that their former purchases can be switched to the United Kingdom and other sterling area suppliers. If the only reaction of India and Australia, for example, is to look for substitutes in Britain and elsewhere in the sterling area, the result will be that their dollar deficit will be passed on to others. The goods sent from this country to India cannot at the same time earn us dollars. In some things, of course, supplies are abundant enough to supply both markets, and dollars would be saved. But in many cases, particularly manufactured goods, there is simply not enough supplies to satisfy the sterling area and the United States. The President of the Board of Trade, Mr. Wilson, himself said at least four times last week that the main problem of selling to the United States is no longer one of price but of deliveries.”