Evening star., 1946-07-04
The Loan to Britain

ominous effect upon the economic
future of the world than failure by
the House to support the Senate-ap-
proved loan to Britain.
Nevertheless. now that they are
about to act upon it, a number of
Representatives are reported to have
grown cold to it for one reason or
another, including Britain's alleged
bad faith in Palestine. But these
reasons are not germane to the issue
at hand, and to vote against the loan
on the strength of them would be
much the same as deciding to burn
down ones house to get rid of the
mice in it.
The loan, as passed by the Senate
after full debate and long weeks of
painStaking Anglo American nego-
tiations, is anything but an ordinary
banking transaction. 1t has short
term and long term objectives whose
bearing on the peace is of profound
significance. Its immediate purpose
is to make available to the British
the dollar exchange they must have
II they are to surmount their serious
war-caused financial difficulties and
return to a healthy export
position. Beyond that, as far as the
future goes, its great purpose is to
encourage freer flow of interna-
tional commerce and by so doing
prevent the kind of cutthroat eco
nomic competition that has led to
world explosions in the past.
To this end, the United States
would make available to Britain So
750,000,000. Drawing upon this
credit at any time and repaying it
over a 5O-year period at an interest
rate ranging down to less than per
cent, the British would have the dol
lars they need to get themselves
back on their feet and thus become
a key factor in world recovery. In
return, they would stand committed
to remove or drastically revise the
so-called sterling area pool, the en-
pire preference system and similar
barriers to free trade. As our big
gest and best customer before the
war, they would thus be able to be-
come our biggest and best customer
again, and if only for this reason
the loan would be good business for
our own industry and agriculture.
Above all, however-and this, too, is
a matter of obvious American self
interest-it would serve as impor-
tant protection against. the danger
of economic warfare initiating
against stability and peace among
nations.
Contrariwise, should the House
take negative action, the British
who are themselves not too happy
about the loan, principally because
they fear it may give 'us a heavy
trading advantage everywhere
would have no other choice but to
tighten up on such restrictive de-
vices as the sterling area and en-
pire preference. That would be the
only way-through the strictest
state controls-that they could get
back on their feet, and it would au-
tomatically cut us off from vast
export market for everything from
cotton to Hollywood movies. The
overall effect of this would be to
wreck the hopes implicit in the Bret
ton Woods international bank and
monetary fund, invite a contagion of
retaliatory measures, freeze the diff
ferent nations into sharply compet-
ing economic blocs and put deadly
blight on the idea of building bet
ter world through cooperation.
In broad outline. these are the
basic considerations that must gov
ern the House as it moves now to
decide upon the loan. In face of
them, it is difficult to see how any,
thing but a favorable vote can be
reconciled with American self-inter-
est and the cause of an enduring
peace.