Evening star., 1949-09-13


listening Cleft to right are Britt!
afford Cripps, British Chancellor
Minister of External Affairs Leste
Black also urged reduction of So
cial welfare expenditures by coun-
tries which have launched pro-
grams more ambitious than they
could afford.
Sir Stafford Cripps, British
Chancellor of the Exchequer and
Britain's representatives on the
Boards of Governors of both the
bank and fund. followed Mr..
Blacks speech with careful at
tention.
Mr.. Black said one of the
problems of deficit countries in
reducing export costs was the
burden Of the cost of government.
He said that since the war gove
ernments committed themselves
to expensive programs of social
welfare"
mo one can dispute their right
to follow this course if they have
the means to undertake it," he
said. "Unfortuately. however. it
has become apparent that many
countries cannot afford ambitious
programs of social services with
out either reducing their living
standards in other respects or cut
ting back their productive invest
ments designed to make possible a
better standard of living in the
future"
Loans Total S716,00O,000.
The bank thus far has made
loans totaling $716,ooOoo0 to 10
nations, he reported. Twenty
more reconstruction and develop
ment projects are under investi-
cation.
Among the latter is a loan of
moderate size" to Yugoslavia. The
report indicated that this would
be a sum considerably smaller
than the $500 ,00o, 900 which Yugo-
slavia asked in 1947 or the $780,
100000 more recently mentioned.
The United States, through the
Export-Import Bank, last week
granted a $20,O00.000 loan to
Yugoslavia to help bolster Mar
shall Tito's government in its own
cold war with Moscow.
The report indicated that per-
haps a majority of the pending
loans are for development prof.
ects many of them in Latin
America-rather than for recon-
struction in the war-ravaged
areas. But Mr.. Black noted that
underdeveloped countries cannot
absorb new capital quickly, add
ing:
The principal limitation upon
bank financing in the develop
ment field has not been lack of
money but lack of well-prepared
and well-planned projects ready
for immediate execution"
The routine of the opening ses-
sion was disrupted briefly when
Czechoslovakia sought to have
subsequent discussions held in
public rather than behind closed
doors.
Pave1 Eisler, representing
Czechoslovakia on the funds gov
ernors, objected that the proceed
ings did not give the governors
enough time to study the annual
report. He said the questions Of
currency devaluation and gold
prices should be discussed openly
so that all the world might know
what was said.
When Mr.. Eisler's proposal for
open discussion was put to a
vote. only Poland sided with him,
other members voting to main
tain the established policy.
Price, Cutting Urged.
The funds report claimed
greater attention than the banks
as the four day session was called
to order, because Of its topical
content.
1t urged the dollar short ma
tions to cut prices and push the
production of goods salable in the
United States. and to try to at
tract foreign investment.
But 1t pointed out that United
States wholesale prices on manu-
factured goods average ITS per
cent of their 1887 level, while
prices in the major Western Eu-
ropean countries stand at 210 per
cent. Normal efforts to lower the
cost of export goods. to make
them attractive to American buy
ers, would not close such a gap,
the fund suggested.
"A fixed exchange rate is de-
sirable as long as a country is
able to adjust its economy to
changes in its real international
economic position" it went on.
But when the adjustments
needed in face of a radical change
in a country's international eco
nomic position cannot be made
through home prices and costs, it
may be necessary to change the
exchange rate.
Such a change should not be
regarded as meaning the abandon
ment of the policy of exchange
stability, but rather the focusing
of this policy on a different parity
better suited TO the new condt
tions."
Aim TO Stabilize Currencies.
The fund seeks to stabilize world
currencies by temporary "sales
actually loans of currencies
needed to meet international pay
ments. 1t requires members to
consult it before changing their
currency values.