The Wilmington morning star., 1941-02-23
LOANS TO BRITISH
DEPEND ON NEED
Empire Still Holds Liquid As
sets To Finance Pur-
chases Here
By Cambridge Associates

BY Cambridge Associates =.
A fateful decision in internationa
oolicy will be made by the people
of the United States in 194l. Fol
the first time since the era O.
European debt defaults, which con
verted billions of dollars OF loans
extended by our government into
gifts. serious consideration must be
given to the problem OF further
needs. Present indications are thai
the United States will be ready te
grant credit to the British Empire
as and when the need is clearly
evident. But stern judgment will
be applied by public insistence be.
cause of four billions Of defaulted
obligations now outstanding.
Congressional Investigations by
the Nye committee a decade age
examined step by step the Ameri-
can part in financing the World
war, from a clandestine beginning
as secret authorization by Presi-
dent Wilson, to the point where the
weight of credit played a powerful
part in our declaration Of hostil-
tiles. With this voluminous testi-
mony as a guide, public policy
should take definite shape at an
early point, even though there are
many new problems in the present
situation.
Await Proof
First of all will come an ex-
haustive examination Of the assets
available to the Empire for trans
fer or pledging against loans.
Among these are American secur-
tiles, some of which have already
been sold, and other liquid assets.
British orders in the United States
have reached a total of approx
mately three billion dollars with
out exhausting these most obvious
resources. Such exports as have
been made to this country have
helped. Future gold production in
the African colonies and financial
control of business enterprises
throughout the world have a value
which will be examined. In view
of the fact that the grantor of
credit would be the United States
government rather than individuals
or business concerns, any conclu-
sion with regard to these CONNER
cial assets must be squared with
the traditional American renunci-
alton of aspirations to empire.
So complex is the problem of as
signing fixed assets that an alter
native may be chosen. The most
likely suggestion yet to appear is
for the construction here of ship
building facilities with American
funds, to be leased to the British
for mass production Of merchant
tonnage, a most pressing need. The
yards would presumably be useful
after British needs are satisfied.
Such a move would conserve Brit
ish dollar reserves and reduce the
need for borrowing.
Can Be Postponed
On the basis Of present figures,
the actual extension Of credit will
not become a necessity until late
this year, if then. Canada's re-
sources are still large and virtu-
ally untapped. We have already
arranged to loan to other neutrals
who are suppliers Of the British,
and who are accepting funds spend
able only in the Empire. Such a
case is Argentina, whose normal
imports from England are largely
machinery and other items which
England has directed into her war
effort.
Consequently, Argentina's for
eign exchange from the sale OF
agricultural products to England
is practically useless, and she has
no dollar exchange for the pur-
chase of necessary items in the
United States. Thus our loan to
Argentina relieves the problem of
these frozen funds and maintains
her position as a British bread
basket.
Canada is rapidly reaching full
employment Of her industrial re-
sources, and measures are being
applied to restrict consumer de-
mand for household goods, auto
mobiles, and other semi-capital
goods, not only to make more labor
and plant facilities available to the
war effort, but also to reduce i'm
ports of raw materials for these
purposes. Mining activity is being
expanded to provide gold for pur-
chases here, metals and fuels for
her own use.
The st. Lawrence seaway and
power project will be advanced as
an aid to Canada, to be financed