Chances Of Loans For Commonwealth Countries Now More Hopeful

Chronicle (Levin), 20 August 1949, Page 5

Chances Of Loans For Commonwealth Countries Now More Hopeful

' (N.Z.P.A.-

-Reuter.

Covyright)

Received Friday, 8.50 p.m. LONDON, Aiignst 19. Though British newspapers and periodicals still continue to devote considerable space "to reporting American criticisms of Britain — ineluding in some cases summaries of highly critieal articles written for the Scripps-Hotvard chain by oue of its senior editors, Mr. Edward Leech — there are hopes that the forthcoming financial talks in Washington betwaen the Finance Ministers of the United States, Britain and Canada will open in a rather more auspicions atmosphere than was at one time feared. This hope is founded chiefly upon reports that business conditions are continuing to improve in the United States and that fears of a major slump are receding. The New York correspondent of the London Daily Telegraph savg that though deflationary tendencies are still apparent in the United States the general feeling there is now more optimistie than at any time this year.

"There seems to have been a return of self-confidenee, and if this is maintained for the next few weeks it will certainly help to create a better atmosphere for the Anglo-American finance talks next month,"" says the correspondent. "If the American representatives at the talks are not nnduly worried about internal economic trends they will be mueh more likely to be prepared to discuss bold measures to meet Britain 's dollar troubles." The London correspondent of the Paris edition of the New York Ilerald-Tribune says that one of the major proposals Sir Stafford Cripps will put to the Americans will be that the United States should undertake a largescale programme of capital invest-

ment in the British Commonvealth and in the British colonial empire. This is the solution advanced at the recent Commonwealth financial talks in London by the New Zealand Finance Minister (Mr. Nash). Another British proposal is likely to be that the United States and British Commonwealth should join in a price-fixing agreernent for basic commodities such as rubber. oocon, jute, wool, tin and copper. This, is is suggested. would provide reasonably stable market condffions for commodities on which the Comm^iwealth chiefly relies for its dollar earnings. American reactions to both these proposals have so far been lukewarm, while in Ihe case of rubber there is active and hostile npposition from the powerful American interests concerned with the synthetic rubber industry. So far as can be ascertained the deval nation of sterling, which is a matter very much in American 's minds, has not so far been T'laced unon the ncenda for the Washington talks. Tf it is not disr,ussed at the Finance Ministers' conference it is. however. likely to he bronght before the Board of , Cnvernors of the Tnternatioual Monetarv Fund who are also clue 1o rneet in Washington early in Scntember. , Some American reports suggest that the British delegation will stress the nrgent necessitv for remedying the Commonwealth dollar shortage in order to consolidate Anglo-American measures against Ocvnmunism. particularly in the Far East and Pacific. Indi- / tions are that by the time Sir vtafford Cripps and Mr. Brnest, Pevin go to "Washington the figures will show that the Commonwealth gold and dollar reserves hnvo rlronped by more than £80.000.000 during the present quarter. American sources estimnte that. the fall may reach 400,000.000 dollars for the three months Julv-Angust-September compared with.

a drop of 260,000,000 dollars during the preceding quarter. This heavy fall in reserves is expected to increase the American pressure • in favour of sterling devaluation and to weaken the British arguments against it. The New York ITerald-Tribune | says financial experts bclieve that Sir Stafford Cripps will be unable to maintain his stand against devaluation in the face of the need for drastic and dramatie emergency action which the situation of ' the reserves indicat.es will be necessarv.