Britain's Remedy Not Devaluation

Chronicle (Levin), 16 September 1949, Page 5

Britain's Remedy Not Devaluation

"I do not like this talk of de- j valu'ing the pound sterling," said Professor F. P. Wilson, in an interview with a "Chronicle" reporter this morning. "Britain's remedy is not devaluation, but a reductio in its internal costs. There should be a scaling down in social security services, taxation and Government employees. Like all socialist governments, the British Government is far too lavish with its internal expenditure, making litt-le attempt to keep costs down. Taxation is too heavy and gives manufacturers no chance to expand and no incen- 1 tive to produce." The main effect of devaluation would be that it would take more j sterling for less dollars. While she might be able to sell 1 more in dollar countries, her im- i

' ports, many -of which were essential, would cost her more pounds and unless she increased in dollars by more saies, she would be in no better position than now — perhaps worse. "Our own pound must foLow the pound sterling, as Britain is our' major customer," Professor Wilson said. "We cannot retain our pound in terms of dollars, otherwisfe it would be appreciated still further| in terms of the new sterling." This would increase the effect of the revaluation of our pound recently, he added. The proposed devaluation of the British pound would not aff ect the ordinary person a great deal, as New Zealand did not | import much from the United States, he concluded.