Bay of Plenty Beacon Published Mondays, Wednesdays and Fridays. FRIDAY, AUGUST 22, 1947. WORLD DOLLAR FAMINE

Bay of Plenty Beacon, Volume 11, Issue 70, 22 August 1947, Page 4

Bay of Plenty Beacon Published Mondays, Wednesdays and Fridays. FRIDAY, AUGUST 22, 1947. WORLD DOLLAR FAMINE

BECAUSE the-rest of the world has been so slow in re-estab-lishing production since the end of the war, Britain has been compelled to buy more than she would normally have done of American goods, which have had to be paid for in dollars. This, according to Sir Wilfred Eady, leader of the British delegation which is now in the United States to discuss the revision of some of the terms of the American loan agreement, is the primary cause of the rapid depletion of the loan which is now nearing exhaustion. The problem was explained in simple terms by the New Zealand Economic Information Service, which pointed out that, not only Britain, but most countries nowadays need from America more food, raw materials, and manufactured goods than they can pay for with the dollars which they obtain by selling their own products to America. To make up the difference a larger part of American exports to the rest of the world is being paid for out of loans which have been made by the United States Government. Without such dollar loans, purchases of American goods by foreign countries would have to be cut drastically, with serious results for the people of those countries who urgently need the goods to maintain their standard of living, and also for the American producers who need their overseas markets to keep their factories in operation. Because goods can, in the end, only be paid for with goods, the problem of world trade is summed up in the dollar problem—in the lack of balance between the large quantities of* goods all countries want from America and the small quantities they can sell to her in return. Although lowering of American tariffs would help, it might not do so to the extent of making up the difference. This point was graphically illustrated recently by Sir Stafford Cripps, who pointed out that, to achieve stability, the rest of the world would need to export to America each month one and a half billion dollars worth of goods more than it does at present.