Stern Warning To Socialists About Sterling

Chronicle (Levin), 6 September 1949, Page 5

Stern Warning To Socialists About Sterling

(N.Z.P.A.

— Reuter.

Copyright)

Keeeived. juonnav, / p.m. LONDON, Rept. 5. There are reasons to fear, says The Eeonomist, reviewing the prospects for' the Washington financial talks, that a defensive attitude of mind has grown up amongst British Rocialists towards Americans and that the British Ministers now en ronte to Washington, may construe it as their tusk to detend certain British institntions — among thcm the British standard of living, British welfare legislation, the, Socialist experiment and the artificial value of sterling — against what Mr. Nallv described at Rtrasbourg as "a small group of rich and nnscrupulous Ameri cans. ' ' Nothing wonld be more disturbing to the success of the conference, particularly after President Truman 's open disavowal of American criticisms of British policies, proceeds The Eeonomist. Round resnlts cannot proceed from faultv diagnosis and if it is in the minds of the British delegates to holieve that in some way their task is to insulate the welfare of the state at home and sterling area abr'oad, from the "unhelpful effects" of American policy. then it will be as though they entered the conference cliamber standing on their heads. Far from needing "defence" against i the cnnsequences of Americnn policy, uiia British economv, and its links with the Commonwealth, -have all in the last fonr years been maintained and underpinned by American assistance. Tf in the p.ost fonr vears the British people had been left to spend only what thev themselves had provided and at the same time to act as bankers for the sterling area, either their standard nf living would have been very much. lower- or thev would have had to adopt the very measures — increased output, lower costs and a larger volume of more competitive exports — that the Americans arc urging niton them today. Tf this is trne of the past fonr years, it will be so to an even greater e.xtent in future. The sellers' market has passed and Germany and Japan are emerging as competitive exporters. If the British make no change in their policy at this point. it will be only a matter of months before their last resorves are exhausted. Long before. that moment, sterling will virtually have devalued itself and unemployment tvill sonn follow beeause the countrv will be unable to purchase rnw materia1s. Th« sterling area will dmintegrate since its eentral banker will have closed his doors. The Commonwealth itself will be submitted to an eeonomic strain severe enongh to disturb the lovaltv of even its oldest members. With or without American assistance. the Government will, in the near future, be compelled to devalue, to cut costs, to increase output and to tackle the problpm of productivitv. The ehoice is not therefore between accepting "American dictation" and the continuancp of an independent British line. Tt. is between taking the steps necessarv to make Britain's economy solvent now with Americn's cooperation, or taking them in six months' time in the midst of eeonomic disaster and with Ameriea pcrhans contributing no more than a melancholv "I told you so. ' '