Evening star., 1945-09-28
Plan 10 Have Colonies
Assume Part Of British
Debt Advanced Here
BY JOSEPH H. BAIRD.

BY JOSEPH H. BAIRD.
A plan under which American
dollars would be advanced, not only
to the United Kingdom, but to other
countries of the British Empire who
would join in underwriting the debt
to the United States, is under dis
cussion here in connection with the
Anglo-American economic negotia-
tions, it was learned today.
This plan, which so far is only
In the discussion stage" would
envisage scaling down of the
sterling areas" claims to $14,-
000,000,000 balance in London, it is
understood. Those officials who
favor the plan point out what ap-
pears to them to be a twofold ad-
vantage:
l. 1t would give the British do
minions dollar exchange for any
purchases which they need to make
in the United States.
2. From the American point of
view, it would increase this coun-
try's security for the proposed S.
000,000,0OO loan, and further would
have the effect of stimulating inter-
national trade generally.
Gold Reserve Favored.
The base of these credits, it is
pointed out, might be either the
usual type of Treasury financing
through the sale of bonds or the
use of part of our $4,000, 900, 900
gold reserve as backing for a dollar
loan.
: The latter plan is favored by some
of the experts on the American side,
because it would eliminate the
Treasurys paying interest on the
money and hence would enable the
United States to make the loan at
a very low rate.
Although the empire participa-
tion" plan is still in a fluid state
and subject to changes, those who
advocate it say it would work some
what as follows:
I Australia, New Zealand, the Union
/. of South Africa and other British
Empire members of the sterling
bloc" would consent, in the first
place, to a Sizable reduction in the
United Kingdoms pound debt to
them, accepting their loss as
contribution to the empires vic
tory over the Axis.
United States Would Advance Funds.
Then the United States would ad-
vance funds to the dominions and
colonies to cover a part of what
remained of the United Kingdoms
debt to them. The fraction remain
ing after this payment would be
financed by London in the form of
long-term obligations.
These payments to the dominions,
however, would consume only a part
of the $4,000 100000 loan now being
considered, and the remainder would
be paid directly to the United King
dom to help restore its industries
and finance needed imports.
1t is not known yet how members
of the British Empire would regard
such plan. On the favorable side
it would give them dollar exchange,
which they need badly, and provide
an orderly plan for the financing of
the United Kingdoms debt to them.
Would Become Co-signers."
However, they would be expected
to become "co-signers" with the
British treasury in the obligation to
America, and there might be some
dissention on this score.
An indication that the Anglo
American negotiations have reached
the point where commercial policy,
particularly in the opening of the
British empire preference" area to
American trade, is coming to the
fore, was seen in the announcement
last night that a group of COM
mercial experts is en- route here
from London.
They include Sir Percivale Liesch-
ing, second secretary of the Board
of Trade; Prof Lionel Robbins,
economic secretary of the cabinet
office; Sir Gerald Clauson, assist
ant undersecretary of state for COL
onies; R. R. Enfield of the Ministry
of Agriculture and Fisheries, and
R. j. Shackle of the Board of Trade
Crowley Withdrawal Gives Hope.
Meanwhile, the withdrawal of Leo
T. Crowley, former foreign economic
administrator, from the negotiations
due to his resignation from the
Government, was viewed by some
observers today as enhancing the
British chance of liberal treatment.
Mr.. Crowley was considered one
of the hard bargain" group in the
administration. He was known to
be insistent that the British shave
down their pound Indebtedness
radically and break up the imperial
tariff system before receiving any
credit here, and then only in the
form of a normal commercial loan.
The American group as whole is
understood to be insisting on British
financial and economic concessions,
but in the complex realm of the
negotiations there are many degrees
of liberality. Some of the other
negotiators are said to be more SYM
pathetically disposed toward the
British problem than was Mr.. Crow
lev