Evening star., 1944-08-13


1t is recognized here that Britain's
ability to pay is considerably less than at
the end Of the World War. During the
early years of the war before lease-lend
was established, the British nquidated
large part Of their foreign holdings Of
stocks and other securities which In
normal prewar years had returned that
country an annual income Of f200, ,000,-
600 sterling $500. 900, 900 at current
exchange). Cash expenditures by Britain
in the United States through 1e43 are
estimated at about 5000, ,000, 900.
At the same time, units Of the British
Empire have turned over to the home
country virtually all OF their dollar bal
ances and. in addition, have furnished
the United Kingdom large amounts Of
war supplies on credit. At the recent
Breton Woods monetary conference,
the Indian representative several times
raised the question as to when the fund
ing of Britain's debt to his country
might be expected.
Alternatives Unattractive.
AS result of this situation, Great
Britain will end the war with its foreign
investments greatly curtailed, with little
dollar exchange and with a sterling debt
to other parts of the empire
AS economists here view the situation,
Great Britain could transfer large an
nual dollar balances on its lease lend
debt to the United States in only one of
two ways:
1. BY having a large postwar favor
able balance Of trade with the United
States.
q BY building up a tight restricted
economy within the empire, forcing its
exports through preferential tariffs, and
gradually acquiring dollar exchange
from third countries.
The first alternative, obviously. would
be strongly resisted by American manu-
facturers and probably would result in
the raising Of domestic tariffs. The Sec
ond would be directly contrary to the
American Governments hope Of beating
down world tariff barriers and exchange
restrictions.
SOHSluef Inree PRINCIPLES.
What, then, is the answer? The pres
ent line Of economic thought in the ad-
ministration appears to be based on
three principles:
l. A drastic scaling down of the total
lease-lend balances
2. international postwar economic pol
lcies designed to promote a tremendous
volume of foreign trade for all coun-
tries with resultant prosperity for all.
which would enable them gradually to
liquidate their debts
8. Funding OF lease-lend balances over
long terms at extremely low rates of in
terest, or possibly with no interest at all.
With regard to the first point. the
master lease-lend agreements provide in
Article V that the President may request
the return after the war Of such de-
tense articles as shall not have
been destroyed, lost or consumed and Al
shall be determined by the President to
be useful in the defense OF the United
states of America Or of the Western
Hemisphere. ="
If the European war should end sud-
denly, both Great Britain and Russia
would have on their hands considerable
quantities of serviceable tanks. planes,
trucks. ships and ammunition for which
they have been charged under lease
lend. AS Of the end of last year. Britain
had been debited with $27470o0, 900 and
Russia with s2,297,000, 900 for matertel
of this type.
Path to Reduction Open.
Presumably some of this materiel
might be returned to the United States
and credit received for it.
Also, article vi provides that the
United States in balancing up its lease
lend budget shall take into account all
property services, information, facili-
ties or other benefits or considerations
provided by its Allies The terms OF
this section are extremely broad and
could allow considerable scaling down
OF the debt in view of such intangibles
as information" or "other BENEFITS or
consideration
A very broad view of the contribu-
tions Of the various Allies was taken by
the President in his message to Congress
covering transmittal of the 18th Lease
lend report, in which he said:
Some countries, like the United
States and Canada, located away from
the fighting theaters Of war, are able to
make avanable to other United Nations
large quantities of food and manufac-
tured arms. Others, like the Soviet
Union and China, require virtually
everything they can raise and produce
on their own soil.
Still others, like the United King
dom and Australia, can make available
substantial quantities Of war materials
to their allies, but must necessarily re-
tain most Of their war supplies and food
for their own forces"
In similar vein, the Senate FOREIGN
Relations Committee in It's report on
the renewal of the Lease-Lend Act In
March, 1913, said: --.- g..
The security Of the United States
(see LEND-LEASE, Pago CAD