HOW LONG WILL GOLD RESERVES LAST?

Chronicle (Levin), 6 January 1948, Page 5

HOW LONG WILL GOLD RESERVES LAST?

Received Mondav, 7 p.m. LONDON, Jan. 5. The question of how long Britain 's gold reserves will last, is dealt with by an artiole in The Banker. It points out that, allowing for a mininium operablo level of £270,000,000, the global reservo.. D)f the sterling area are not more 1han £420,000,000 — or about seven months ' supply at the recent rate of outgo, ' ' lf the G'o 'ernment is right in its assumption that it has alreadv planned to eut imports to the bone, ' domestic econoinv is the only way or narrowing either the global or dollar deflcit. And given the related assumption that tne basic standard of bving cannot be r educed any more without serious effects upon production, the only large scope for .sueh economy Hes in the capitai programme, " it is stated. The article goes on to point out thn the invesiment target of £1,420,000,000 for this year (with an annual rate ot £1,320,000,000 by tlie end of the year) is onlv £130,000,000 bolow the rate at ( liiid-1 047, The furtlier programme is largel.v guesswork and there is no assurance that cuts will be ma'de. Tt is suggesten tlia't, on past experitnce, the net reliet will be ve.-v small. "The Government policv in this sphere is still paralysed by the same timidity which made the last Budget merelv a derisory epproach to the financial proi lem. Tf this drift continues, the secon'd half of this year will wirneas a new dollar crisis more ttglv than that of 1047 — unless jMarsjiall dollars are mslved into the breach. After the Ghancellor's sound warnings about Uie dangfs of running down the reserves, it tvould be intolerable if the last line of aid were to be used merelv to s upper t a policy of too little and too late, " the article concludes.