Evening star., 1941-01-01
u. !. Loans 10 British
Await Evidence of
'AN-0ut' Efforts
Empire Still Holds
Liquid Assets to
Finance Orders
By Cambridge Associates.


A fateful decision in internationa
policy will be made by the people
of the United States in 1941. Fol
the first time since the era of Euro.
pean debt defaults, which converted
billions of dollars of loans extended
by our Government into gifts. Sc
riOuS consideration must be given
to the problem of further needs.
Present indications are that the
United States will be ready to grant
credit to the British Empire as anc
when the need is clearly evident
But stern judgment will be applied
by public insistence because of -four
billions Of defaulted obligations now
outstanding.
Congressional investigations by
the Nye Committee decade ago ex-
amined step by step the American
part in financing the World War
from clandestine beginning as Sc
cret authorization by President Will
son, to the point where the weight
of credit played powerful part in
our declaration of hostilities. With
this voluminouS testimony as a
guide, public policy should take def
mite shape at an early point. even
though there are many new prob
lens in the present situation.
Await Proof of Sacrifice.
First of all will come an exhaus-
tive examination of the assets avail
able to the empire for transfer or
pledging against loans. Among
these are American securities, some
of which have already been sold,
and other liquid assets.
British orders in the United
States have reached a total of ap-
proXimately S3,000000000 without
eXhausting these most obvious re-
sources. Such exports as have been
made to this country have helped
Future gold production in the
African colonies and financial con-
troll of business enterprises through
out the world have a value which
will be examined. In view of the
fact that the granter Of credit
would be the United States Govern
ment rather than individuals or
business concerns, any conclusion
with regard to these commercial
assets must be squared with the
traditional American remuneration
of aspirations to empire.
So complex is the problem of as
signing fixed assets that an alterna-
tive may be chosen. The most
10 jC
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 use
full after British needs are satisfied.
Such move would conserve British
dollar reserves and reduce the need
for borrowing.
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 virtually
untapped. We have already ar
ranged to loan to other neutralS
who are suppliers Of the British. and
who are accepting funds spendable
only in the empire. Such 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 foreign
exchange from the sale of agricul-
tural products to England is prac-
tically useless, and she has no dol
lar exchange for the purchase 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
aDplied to restrict consumer de-
r-ard for household goods. auto
mobiles and other semicapital goods,
rot 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 pur-
poses. Mining activity is being eX-
panded to provide gold for pur-
chases here, metals and fuels for
her own use.
Canal Power Project Broached.
The St. Lawrence seaway and
power project will be advanced as
an aid to Canada. to be financed
by United States funds and oper-
ated for the benefit of both coun-
tries until Canada is ready to pay
her share The longrange nature
of this project, however. will sub
ject it to strong opposition in Con-
greSS
Not only for her industrial and
agricultural contribution, but also
for her large volume of American
securities and other assets is Can
ada Britain's strongest ally. The
exchange of goods between the
United States and Canada is the
largest between any two nations,
and before the war that exchange
was favorable to Canada, even after
debt service At the present rate
of activity Canada will not need
American financial assistance IN