CAN BRITAIN HOLD POSITION AS STERLING BANKER

Chronicle (Levin), 20 March 1948, Page 5

CAN BRITAIN HOLD POSITION AS STERLING BANKER

(N.Z.P.A.-

— Reuter,

Covyright)

Keceived Friday, 9'.5 p.m. NEW YORK, March 19. ' Britaiu may be fo-rced by prcssure from her West European lieighbours and the' United States "to abandon her effor-'s to maintain her position as banker for the British Commonwealth and other sterling area eountries, says the New York Times' Paris correspondent. This opinion is held by many of the b,est informed experts 'who have been attending the second Paris Conference on the European reeovery programme. Among tlie steps the- British may be urged, and eventually, forced to- take are tlie dehnite blocking o-f existing' sterling balances to reduee the ability of India, Egypt and other lmn-European ; eountries te buy British- goods that might otherwise go to Europe ; the cessatinn of the eonversion o-f sterling into dollars for sterling area eountries ; and the extension of sterling Toans to Franee and possiibly other Co.ntinental eountrids. Bri-tain in efteet would be- reepfeed to- declare herself bankrupt ■and f e .start over again- with a drastic shift in theyorient-ation of lier economy and! frnancial system away froni the Commonwealth aiidi to-ward Europe. Tlie eorrespondent, after eontendiing that tliere was a basic inconsistency between Britain's participation in the European reeovery pro-gramme and Britain's. position as a banker for the sterlfifi'g area-,. eontiinues: u" Afooiishing' the sterling area in its preseht fo»rm will not alter the underlyxng. probl'ems of the sterling area eountries. Instead of furnishing dollars by way of BritainT ' " the- United; States may have to take over the direct responsibili-ties tliat Brdtain as the centre of the- sterling area has formerly shoiddered for eountries like India,. Egypt, Australia and New .' Zealarid.,'"' . .. ■ . . • f . _ • 1 The correspon'denf addsthat a growing body of opinion in the State Department and ih( Coiitinental' Governments see.s the British strug-gle to def end tlie sterling "as the gr'eafest menaee outside Commnnism itseM to. the suceess of the European reeovery pro- • gramme." . ■