Evening star., 1941-03-14
Canadians Are Urged
To Release American
Dollars TO Britain
London Poper Suggests
Thut Other Payment Be
Accepted for War Goods
By WILLIAM ii. STONEMAN,


Chicago Daily News Foreign Correspondent.
LONDON, March 14-Following
the decision of the neutral United
States to furnish Great Britain vast
quantities Of war materials without
demanding cash, it is now suggested
that belligerent Canada and New
founuland may be asked to waive or
alter the current arrangement under
which their goods are paid for in
dollar or pounds.
Because of their peculiar Situa-
ton, both of these members of the
empire hitherto have been given
special treatment by the British
and have not been asked to take
payment entirely in sterling. like
other members of the common
wealth. During 194l, it is estimated
that they would normally receive
S620,000,000 in the form of either
Amei lean dollars or gold,
Due to Britain'S shortage of Amer
lean dollars and gold. payment of
such sum would exercise a real strain
on the London governments finan-
cial position. According to the sug-
gestion put forward by Financial
News today, Canada might greatly
relieve the situation by agreeing to
take payment in the form of British
direct investments in the United
States. In the normal course of
events these investments would be
lquidated during the coming year
to pay Britain'S commitments in the
United States itself.
Dollar Resources Fell.
The position, as explained in the
Financial News and in this weeks
Economist, is roughly as follows:
With the loss of S2316000, 900 dur
ing the first l6 months of the war
including payment of S225 900 900 to
Canada-Britain'S dollar resources
had fallen to S2.167 100000 by the
end of 1910 The British treasury
estimates that of this sum only ST.
8ll000,000 is really available Of
this latter amount. S900,000000, at
the maximum, consists of direct and
miscellaneous investments in the
United States.
During 194l it is estimated that
dollar expenditures of the empire,
excluding Canada, would exceed re-
ceipts by ST ,464, 900 900. Thus, by the
end of the year, the United King
dom's gold and dollar resources
would be reduced to S347 100000. In
order to finance the deficit. it would
have been necessary to realize $685. !
900 900 of direct investments in the
United States.
Since this is almost exactly the
amount which would have to be
paid to Canada. to satisfy the ad-
verse balance between the latter !
country and the sterling area, it is |
suggested that Canada might SIM /
ply agree to take over most of these /
direct investments. The advantage, !
from the British viewpoint, would .
lie in the fact that these invest !
ments would remain in the British /
family of nations and that there /
would be no need for their haSty, !
and perhaps uneconomical, liQuida-
ton in the United States.
Canadian Position Strong.
While it is realized that Canada
has need for large quantities of for
eign exchange in order to finance
her imports from the United States,
1t is felt here that her dollar posi-
ton now is sufficiently strong to al
low her to maintain imports with
out liquidating British investments
In question. At the beginning OF
the war, Canada's gold dollar assets
amounted to s1.57O. 900 900 and pre-
sumably these were increased by
1925 100000 received from the rest
of the empire. Canadas imports
from the United States during the
first eight months of 1910 amounted
to only $483 100000, it is pointed out.
Canada is given full credit for
having an extraordinary position,
which entities her to peculiar treat
ment. and credit for generosity in
cooperating with this country by
allowing the repatriation of sterling
debt and accumulation of sterling
balances in London.
BY this means Britain financed
1880 000.0 900 last year and will nor
mally cover $3.50 100000 of payments
to Canada this year At the same
time there is the definite feeling
that Canada might go farther.
The Economist comments on the
''relief which would be secured if it
were possible to make with Canada
arrangements similar to the Lend
Lease Act"
ut is somewhat anomalous" it re-
marks. that neutral should be
providing munitions free of cash
payment while gold or American
dollars are still being paid to a bel
ligerent There is no reason to sup
pose that this is unappreciated in
the most realistic generous spirit in
Ottawa"
London is waiting to see whether
II really is or not.
tCopyright. 1941 by Chicago Daily News)