WILL DEVALUATION BRING RELIEF?

Chronicle (Levin), 26 August 1949, Page 5

WILL DEVALUATION BRING RELIEF?

(N.Z.P.A-

— Reuter.

• U.S PRESS COMMENT ON STERLING-DOLLAR CRISIS

Copyright)

Received Thursdav 7 p.m. NKW YDRK. August 24. Devaluation of the sterling as a cor-rpi-tive to the British fiiiiuu'ial crisis. was the principal subject diseussed today 1 iv United States newspapers >n artieles on the forthcoming dollar talks. The Uhristian Science Alonitor's London correspondent reported a veering of " responsihle British opinion" to the conclusion that devaluation is "inevil alde. " Some Aliuisters and Labour otli eials he said, are still strongly opposed to tinkering with the currency but important elements of Britain's fmancia: management had come reluctantly to the conclusion that devaluation to a " conlidence meriting level," was one of the necessary lirst steps towards reversing Britain's "finuncial plunge. A New York Journal of Commerce article quoted a consensus of businesexecutives' opinion about devaluation The article said: "Devaluation alone, these executives stress, won't solve Britain's dollar problem nor should it be counted upon solelv to lead to improvement in world trade. It is other adjustments in British economic condi t'uins and external relations which it is lioped will follow this ste]). that wili lead to a modilication of trading praetices so that the groundwork may be lead for freer multilateral trading— the real obiective. Tt is these and other mnves that may or mav not be taken that mahe prognostications as to thc ultiriate effects of sterling devaluation so ditfic.ult. ' 1 The article said that in direct trade between Britain and the dollar areas, -torling devaluation would not be expfcted automaticallv tft correct Britain's dollar problem to anv more that, a :nod»rate extent.." In fact some notth.at devaluation alone might mean :t ret loss of dollars for Britain for this tradp. On the other hand Britain is dashing dollar buying and presumahlv .■ •u!d gain dollars in other wars, for i-xarnple, through direct trade of t'm--tmling area with the United States ; r.d by earning dollars "now lost to the -?' rling area where Commonw^altli proare reimported here from sucli K.uropean countries as Ttaly and the Netherland* through the use of a '••rnisferahle. account sterling'." A St. Louis Post Dispatch article expressed puzzlement why the, United At ntes vSecretary of the Treasury, ATr Snvder, was so sure devaluation was one simple answer to the British c. .uiomie problem when it had been bni-hed aside as a rpiestionable remedy b" ma n v Briti*h, American and Uontirn ental eeonomists. The paper said deva hiatioin would cause many British busi!i • sscs to clOse muler staggering in-cren^i-s in costs of raw materials, resnbing in large scale unemployment, re dnci'd wnges and burdensome Governn.cnt relief. In Washington todav Mr Snyder opposed increasing the dollar price of fto'd as one means of assisting Britain 's dollar shortago. Mr Snyder said the question of gold had never been mentior.cd in his "fcon vers'ations with Sir Stafford Crinps or in his discussions W;tl: other Buropean Finance Ministers.