WAR CREDITS

Wairarapa Times-Age, 10 December 1940, Page 9

WAR CREDITS

PROPOSALS IN UNITED STATES DEALINGS WITH DOMINIONS. POSSIBLE SHORT CIRCUIT (By Telegraph—Press Association—Copyright) LONDON, December 8. Lord Lothian’s recent statement about Britain’s cash resources succeeded in its primary aim of giving the subject of American financial aid a thorough airing on both sides of the Atlantic. Quarters in close touch with the Bank of England remain emphatic in their opinion that no urgent need exists at the present time, but they do stress the desirability of time preparations being made. Authoritative circles in the City give credence to Washington reports of important moves being made for extension of credits, and that, indeed, they have already begun.

Some early developments are predicted, partly because American readiness to grant financial support would greatly influence the attitude of several neutral Governments.

One plausible theory currently advanced is that the difficulty created by the Johnson Act will be short-circuit-ed by lending not to the United Kingdom but to the gold-producing Domonions, as for instance, Australia. Canada, and South Africa. These Dominions have not any war debts due to the United States. They are, therefore, qualified to borrow, despite the existing American legislation, and could either lend the money to the United Kingdom or repurchase their own loans issued in London. The “Financial News” says the result of such a transaction on balance would be reduction in the Dominion’s net indebtedness to the United Kingdom, with a corresponding increase to the United States.

Many bankers are of the opinion that America will eventually lend direct to Great Britain without resort to any subterfuge, and that it might be immediately helpful by accepting delivery in South Africa, where it is estimated that £150,000,000 to £200,000.000 is earmarked on British account.