Evening star., 1947-08-21
0n|y400 Million
From Loan 10 Be
Left British Soon
u. S. Is Convinced
Crisis Impends and
Action Is Necessary
BRITISH FACING worse shortages
as convertibility halts. Page AS
BY the Associated Press

| BY the Associated Press
Withdrawals by Great Britain
will reduce to 100000, 900 by
August 20 the amount of credit
remaining from her original
So, ,750, 100000 loan from the
United States, Treasury officials
said today
The loan balance. already had
been reduced to $3.50, 100000 when
Anglo talks began here
Monday to consider emergency steps
aimed at relieving Britain's current
economic crisis.
Only yesterday the British agreed
with United States approval-toI
suspend temporarily the free ex-
change of dollars for pounds in
trade with other countries. 1t was
learned this step was necessitated
by dollar demands which had risen
recently to a rate of $237 ,00O, 900 a
week from the $780, 100000 Amer
lean credit.
A Treasury official said permission
for Britain to make Withdrawals be-
low the remaining $850,000, 900
stemmed from need for $3.50, ,000.-
900 to pay for goods on order in the
United States.
I To Cease Withdrawals.
| One request for a $150,0O0, 900
withdrawal already has been made.
| Other requests for Withdrawals in
the same amount will be made Au-
gust 25 and 20, cutting the credit
balance to 100000, 900.
Once the loan is down to the
| $40O 900, 900 point, British with
drawals will cease pending arrange
ments at the An9lo-American FL
nancial Conference here to control
the flow of dollar exchange from
London.
Treasury officials were described
as convinced that the British have
arrived at a genuine crisis and that
only drastic emergency action
such as that taken yesterday-canI
avert financial collapse.
May Reduce Other Demands.
The Treasury was reported as
believing that action does not Vio-
late the spirit of the loan agree
ment, even though that document
obligates the British to exchange
dollars for pounds freely when ether
countries request such payment.
American officials hope that Bri-
tain's new regulation over the con-
vertibility of pounds into dollars
will reduce the demands of otner
nations to manageable level. If
it does, they believe it will be rela-
lively easy to work out some solu-
tion to the dollar crisis" in talks
between Secretary of the Treasury
Snyder, British Second Secretary
OF the Treasury Sir Wilfrid Eady
and their stats here.
However, if the screening of
demands on the Bank of England
proves to be beyond handling. then
the talks here will face increasing
difficulty.
United States officials compared
the emergency action, in which this
country concurred, to the American
bank holiday" of 1933-a mora
torium on business temporarily to
halt what amounts to run on the
Bank of England.
Problem Is Aggravated.
The problem was aggravated by
the fact that Congress is not in
session, since any change in the
actual terms of the loan agreement
requires congressional approval.
At the Treasury Department, two
United States-British technical
groups conferred this morning, one
on the convertability question and
the other on possible relaxation of
the requirements that England
abandon all discrimination against
United States products In her foreign
buying.
The National Advisory Council on
International Monetary Problems
scheduled session later today. The
council Is made up of representatives
of the State, Treasury and Com
merce Departments, the Export
Import Bank and the Federal Re-
serve Board.
With both sides reporting good
progress, the Anglo American finan-
cial talks were pressed on toward a
decision over modifying a British
loan clause which bars Britain from
cutting her American dollar pur-
chases solely to be able to buy III
,