EXAMPLE OF BRITAIN

Chronicle (Levin), 7 June 1947, Page 5

EXAMPLE OF BRITAIN

(Speeial Correspondent.)

American Tribute To Past Efforts

Received Friday,13 7.0 p.m. LONDOX, June 6. Quoting Shakespeare 's dictum "Neither lender nor borrower^be, for loan oft loses botli itsclf and v friend, " Mr. Ii. RandoJph Burgess, vice-chairman of, the National City Bank of New York, in a speech lo the American Chamber of Commerce in London, suggested that United States, as the prcsent great source of capital investment in the world, shonld tuni to Britain 's oxperience during the half century prior to World War One. "During that period Britain was, by all odds, the greatost sonrce of liquid capital in the world," he said. "She built railroads in United States, Argentine, Brazil and elsewhere. * She lent monoy to country al'ter country. She traded all ovcr the world. To that courageous venture, to that extension of England, the world owes mucli of the spread to many peoples of the fruits of the industrial revolution. Our country, the United States, was the greatest beneficiary of all." Five secrets of British success lay behind this notable achievement, eontinued Alr. Burgess. Englishmen carried their house flags all over the world and were on the spot to see how British money was spent. British ban.k ing and insurance was backed by British business and created the necessary commercial i'acilities for it. The British Covernment stood behind the British trader and he eould count on the backing of his Covernment wherever he was. Coods, men and money moved freely about the world and there were few Covernment restrictions, while money could be easily exchanged because its value was fixed in relation to gold. These ventures were profitable for although half of the four billian sterling Britain invested overseas was lost, the interest and indirect benefits of the balance more than paid the bill. "This British experience is an illustration of the principles of lending money wiselv and eourageously and of avoiding th danger Shakespeare understood," ]\Ir. Burgess added. "These principles rested on lmman nature and human nature hasn't been repealed."

AI r. Burgess appealed to the people of Britain not to become impatient ii' United States moved slowly. It had its own problems but its heart in the right place. America's 260 billion dollar debt had blown up credit and the money system to a dangerous extent. The national budget was out of control and though C011gress economies niight l)e politically painful overseas, they were aimed at a solvent budget which would enable savings to retain their value. An unlialanced budget meaiit inflation and United States was not yet over the risk olfe dangerous inflation. If there was to be world economic stability, United States must be stable and other countries must realise that they had a greater stake in American stabilitv than their loans. Readjustments were inevitable and to achieve such read justment without a decline in prices and income, would be a miracle. They expected a decline but the important new opinion in United States was that this readjustment or recession would be brief and mild. "Looking at the American domestic scene, nothing like the depression of the 30 's seems possible for some years to eome. AYhile the brief but violent dip in 1921 is a better analogy, we hope to do much better than that — to avoid so severe a break in prices, ^mployment and output. The unj filfed demands for goods is so great and the available funds so ample, that if we can get over the hurdle of readjustment quickly we ought to have a long period of prosperity ahead."