Importance Of Financial Talks Emphasised

Chronicle (Levin), 18 August 1949, Page 5

Importance Of Financial Talks Emphasised

(N.Z.P.A.-

— * — ■*- — -Reuter.

Covyright)

Received Wednesdav, i p.m.LONDON, August 17. Tbe Einancial Times says the British delejration to the financial talks in Wasliington next month, ma" advanee |)ro])Osals for a form of unification of llie sterling and dollar areas under which Americans, through the Eederal Rescrve Banks or some other agencies acting as agents for the United States Treasurv, would l)e prepared to aceumulate sterling balances in much the same way as the Central Banks or Treasuries of the sterling area eountries do. This would mr-an that any defieit of the sterling area in relation to the dollar area, would automatieallv be covered through a corresponding increase of American sterling balances. The Financial Times says it is considcred most unlikely that the United States would agroe to underwrite sterling bv some such arrangement unless Britain agrees to the American demands for a devaluation of sterling to a level at which its mainteuance would not demand unduly large sacrifices. For this reason it is expected that if the British delegation produees a plan for automatie American support of sterling, the Americans will inevitably ie^ist upon a discussion of devaluation. The Administration would be most unlikely to faco Congress with an agreement involving considerable American financial assistance for Britain unless it could. at the same time, claim credit for persuading the British Government to vield to devaluation. American oninion places such store upon the importnncp of devaluation that Congress would be ready to ondorse almost anytliing in return for it. The fact that the American Secretary of State. Mr. Dean Acheson, will head the American delegation to the talks, is regarded in Britain as an indication 1hat the Americans, like the British, regard the conference as having eonsiderablv wider implieations than pureIv financial matters whicb are its ostensible cause, American reports suggest that considerable argument took place behind Si-enes before it was decided to allow Mr. Acheson to head the American d degntion rather than the Secretary to the United States Treasurv, Mr. Snvder. This argument arose because oue sec1 5 "ti which advocates a "get tough c.ilh Britain" policy, considered Mr. Snvder would follow this policy more iirmlv than ATr. Acheson. while another seetion considered that an immediatg efl'ort must be made to improve cooperation with Britain on the broadest piis«il»]o basis.