Ashburton Guardian Magna est Veritas et Prævalebit WEDNESDAY, FEBRUARY 22, 1950. DOLLAR PROBLEM

Ashburton Guardian, Volume 70, Issue 110, 22 February 1950, Page 4

Ashburton Guardian Magna est Veritas et Prævalebit WEDNESDAY, FEBRUARY 22, 1950. DOLLAR PROBLEM

A popular song-hit has it that money is the rqot of all evil. That is only partly the truth. It can be said, however, that money is the cause of a good deal of the trouble in the economic sphere. If there were no dollar difficulties, for instance, there would be no need for petrol rationing or con-* trol of imports affecting motorcars or even luxury goods. But there are dollars—America has a surplus and other nations are short. Those who possess plenty are seeking every possible outlet for their surfeit of riches, while those suffering a shortage are being compelled to resort to all sorts df expedients in an effort, to improve their economic position. It. is all very much a matter of supply and demand, the aim being to equate these so that neither will create a situation endangering the entire structure. Marshall Plans, trade agreements, and development schemes now, figure most prominently on the interna tional horizon, but still their operation docs not seem to solve the main issue—the shortage of dollars. The Commonwealth Government, according to the “Sunday Herald,” appears to be groping for another way out. The “Herald” reports that the Commonwealth Government' has asked the American oil companies to consider building refineries in Australia. The plan would involve an expenditure of £40,000,000 to £50,000,000, mostly in dollars. If the American companies agree, refineries will be built in Queensland, Victoria, and South Australia, thus obviating ’the use of tankers carrying vulnerable cargoes of pure spirits. The point is whether the plan will have any appeal to American companies from the point of view of a sound investment. Like all other business propositions, their chief concern will be the financial return. There will need to be reciprocal trade, because America cannot expect to be on the selling end all the time. The adoption by America of the British policy of seeking overseas markets for her surplus capital would bring results in the long run, and there are plenty of undeveloped areas where this could be done. Should this eventually come, America will no doubt select spots where stability is assured- The policy is a sound one, provided there js two-way trade. But here again the question arises: will America permit the borrowing countries to pay in the only way that payment can be made—with goods.? Until that question is answered satisfactorily, there must be considerable reluctance by responsible borrowers to enter into loan commitments.