Graver Predictions On the Dollar Position Expected from Mr Chifley

Otago Daily Times, Issue 26634, 3 December 1947, Page 5

Graver Predictions On the Dollar Position Expected from Mr Chifley

From C. R. Mentiplay, N.Z.P.A. Special Correspondent Rec. 9 p.m. SYDNEY, Dec. 2. In spite of the surprise of London financial observers concerning statements made by Mr J. B. Chifley on the serious nature of the dollar position, most Australians are accepting as gospel the words of their leader. The main reason for this is that Mr Chifley has a reputation for his impassivity and his refusal to panic. All political correspondents agree that the gravity of the position cannot be exaggerated and what criticism there is levelled at Mr Chifley is at the vague nature of his warning. The predictions are that though Mr Chifley’s statement carried portents ominous enough, the picture he will give Cabinet in a few days will be even more startling. Correspondents emphasise, first, that restrictions on imports from the United States and Canada have virtually halted all Australian plans for expansion and development; secondly, that an austerity period looms in practically everything but food; and thirdly, that motorists can expect a return to war-time petrol rationing.

Further frightening possibilities are listed by the political correspondent of the Sydney Sun as: “ First, a complete collapse in Great Britain and France is perilously close in both countries. France has gone haywire and sterling is unwanted in a world craving for dollars. Secondly, a sudden calamitous drop in overseas prices which would be ruinous to the primary industries now sustaining Australia. Thirdly, failure by the United States to get aid to Western Europe in time to allow it to buy what Britain urgently needs to sell.” The main defences against a depression are stated by informed authorities to be a continuance of record crops and high prices, a vastly improved capacity of secondary industries and recognition by world leaders of the need for ensuring stability of countries which can export food.

Members of the Government say that when import licences were called in recently and examined by an inter-departmental committee, it was found that the licences already issued had exceeded the Treasury estimate by more than £20,000,000.

Though many licences were then cancelled, those covered by irrevocable letters of credit and those on the essential list were allowed to stand. They represent a considerable sum about which nothing can be done. Two courses against further drastic cuts remain. Australia may apply to the International Monetary Fund for temporary accommodation or may request a direct loan from the United States. Britain has already tried both courses. Mr Chifley has declared himself against a loan because of the interest rates charged, but there are others who consider this the wiser course. „