NOTHING TO BE GAINED

Chronicle (Levin), 17 January 1948, Page 3

NOTHING TO BE GAINED

lieceivod Friday, 7 p.m. LONDON, Jan. 1(3. Authoritative British opinion reinains quite unconvinced that tkere is anything to be gained at present by iowering the exchange rate' of the pound sterling, says the Manchester Guardian's iinanciai editor. Tlie important question, he contiuues, concems the direct pound-dollar rate. Asking what is a pound wortlv in terms of dollars, he says: ' ' Surely if British priees have been rising, American prices have ouipaced them and it looks as if American inflation will carry the American boom at Jeast through another year if not two or three years. " He goes on to say that if the pound were devalued most Eurojiean countries would almost certainly follow suit. The French, Belgians and Eiviss were all longing for the oppOrtunity to eheapen their currencies against the dollar without having to take isolated action. In Europe, therefore, Britam would gain no competitive advantage. Though some Americans favour concerted European devaluation, Congress might take it as a plot to get more foreign goods into the United States. ' ' The finai crushing argument against devaluing the pound now," adds the Guardian's financial editor, "is that it would suddenly raise the question of British food subsidies and wages in a most explosive form. Prices of food and raw materials impofted from the western hemispliere would be raised overnight and the Government . would have to choose between increasing subsidies by a very large ainount or letting the cost of living shoot up by something like 10 or 20 per eent. The political trouble tliat could result may be inevitable but it will surely be postponed until we are ready to take advantage of the export stiinulus. "