American Proposal For Reorganising British- Blocked Sterling Balances

Wanganui Chronicle, 15 December 1949, Page 5

American Proposal For Reorganising BritishBlocked Sterling Balances

NEW YORK, Dee. 13 (Ree. 7.30 pm).—The United States Council of the International Chamber of Commerce today said the British-blocked sterling- balances structure should be reorganised immediately.

The recommendation was prepared by the Council’s study group of prominent bankers and industrialists, headed by William Mitchell, president, of the Central Trust Company of Cincinnati. The report referred particularly to Britain's sterling balances created during the war effort in favour of India, Egypt, Eire, and some other countries, but said it was not so much concerned with balances owed to Australia, New Zealand, and South Africa. Because they found the problem “so complex, so overladen with political issues” the group was unable to agree on the desirability of proposing a formula for tackling the problem. The group, before coming to this decision, however, had considered recommend-

ing that the United States Govern* ment “instead of seeing Marshall Plan dollars pass through the leaky sieve ot unrequired exports.” should propose a formula whereby Britain would make a settlement. One approach could be the funding of all such balances with or without reduction. Another approach could be. firstly, a substantial writing down of amounts and payments in dollars by the United States of a certain portion, say 15 per cent., of the remaining sterling balances over a period of, say, five years; secondly, payment in sterling of, say, 15 per cent, over a five-year period and funding of the balance over a very long period. The report recommended that the problem of sterling balances be attacked anew in conjunction with next 'year’s Marshall Plan authorisation by ; Congress.