Drain On Sterling Reserves Eases Up

Chronicle (Levin), 7 July 1948, Page 7

Drain On Sterling Reserves Eases Up

(N.Z.P.A.-

-Reuter,

■sCopyright)

LONDON, July 5. The problem of the drain 0x1 thc sterling area's reserves had been reduced to more manageable proportions, said the Chancellor of the Exehequer (Sir Stafford Cripps) in opening in che House of Oommons this afternoon a debate on the Marshall Aid agreements and on Brifcain's -economic position. " Sir Stafford said' t'he problem had been reduced' by -Britain's cuts in dollar expendxture and by the restiraint chat the countries in the ' sterling area had exefcised, Iii the first six months ' operatiohs.. this year the net drain on the reserve, disregarding Marshall aid, was £254,000,000. Britain, jnst befox'e the end of Jnn«.' L'eceived the first welcome paynient oi' dollars under the 'Marshall aid ar range- . ui'ents. This was ab'out £22,000,000. Thc total of Marshall Ai'd, as distinet from loans, in the secohd quarter would bo £75,000,000. The "maximum. amouiit; oii'ered as loafts for the same periovl would be £25,000,000. Ineluding thc actual Luropean reeovery programmo r.eceipt. of £22,000,000, the reserves stood now at £473,000,000. He hoped, with Marshall aid, to mahitahi the reserves at about £500,000,000. The Chancellor thanked Britain's fellow members in the sterling a,rea for the understanding and cooperative way in wliich they had done their best tc diminish the drawings 011 the central reserve and increase their contribution of gold and dollars to the reserve. Their restraint had, meant a, considerable rcduction in the rate, of drawings since Last year. Sir Stafford siinmied up the agreement as ' ' f air and .sensible and in no way interfering with ' our right to regulate our own affairs, and designed to as.sist the United Kingdom to the maxhmim eff'ort toward reeovery." He said the United States' negotiators had shown themselves most under standing. The agi'eement would operate on the day of signature, wliich, he hoped, would be tomorrow niglit. He praised t'he far-sighted generosity oi the American people. . Reuter 's financial correspondent say.-x the Chancellor 's disclosure of Britain's gold and dollar drain was better timo expected, though worse than the Go>ernment predicted 111 its econoinic snrvey in Marcli. The survey anticipan: ! a drain of £222,000,000 in the half-year. Britain's reserves on July 1, at £473,000,000 were aetuallv bigger tinui the £450,000,000 wliich the survey. con templated as the maximum probabli ffgure. Tlie reason is that, before the. end of the half-year, Britain receivt-d £22,00.0,000 of ; U.R.P. reimburseiue.n; and the re were s'ome drawings by both Britain and India on the Lnternationni Monetarv Fund. ,