Evening star., 1949-09-19
u. ). Officials Believe
Further Steps Are
Necessary Abroad
By the kssoeiofed Press

Necessary Abroad
By the Assoeioied Press
The chain reaction of British
pound-devaluation was expected
today to sweep rapidly over Eur
ope, the pound-using areas else
where and into Latin America.
There was every sign that the
International Monetary Fund I
with which 48 nations muset clear
any currency change. will have
heavy work in coming days and
weeks.
American officials welcomed the
S0h per cent cut in the pound
from $4.03 to $3.50, and the cor
responding cuts by several other
countries.
For Britain-and for others
washington officials felt that fur
ther measures are necessary.
Other Agreements Seen.
They limited that, as an early
step. Britain make some agree
ment on the so-called sterling
balances"-actually, war debts
held by India. Egypt and others.
Payment on these last year cost
Britain 100000 worth of
goods, with no goods received in
return. Some officials felt this
drain should be cut to one-fourth
that amount. If possible, while
Britain concentrates on selling to
the areas which pay in dollars.
They forecast improvement in
British exports to the United
States, because Americans can
buy in Great Britain for $3.50
what used to cost $4:03. That
should spur a buy-British move
ment.
It should also put some eco
nomic forces to work behind Sir
Stafford Grips dont-buy-Am
can campaign. United States goods
will cost more in England; many
British buyers will cut orders or
buy elsewhere, If possible.
Help in Balancing Accounts.
Both factors-more exports to
America and less imports from
America-should help England
balance her dollar accounts. which
are Iopsided in America's favor
and are cutting into Britain's re-
serve Of dollars and gold at a
fearful rate.
The British devaluation Is re-
garded here as temporary relief
which must be backed by these
measures:
First. the 10-point program of
tariff revision, liberalized Marshall
Plan aid, colonial development
and other steps agreed at the
American British Canadian crisis
talks which ended a week ago.
Second, an aggressive drive to
modernize British factories, cut
production costs, boost trade with
In Europe and break into the
American market on large scale.
Secretary of the Treasury
Snyder saw the British move as
constructive economic STEP" He
said: -. NJ
"The British government has
taken q constructive economic
step in making the adjustment in
their foreign exchange rates. The
British consulted with the Inter-
national Monetary Fund. The
immediate effect should be an
early rise in their dollar resources.
The .long-range results should be
q healthy impetus to worldwide
multilateral trade"
Senators Less Optimistic.
Among Senators the optimism
was less complete. Chairman
George Of the Finance Committee
viewed the action as necessary
and inevitable" but the results as
every short-lived the only
answer Is reduction in production
COSTS
Chairman Connally of the For
eign Relations Committee felt Bri-
tian's benefit may be relatively
temporary" but even in the long
run will operate to her advant-
age"
Senator Wherry of Nebraska,
Republican leader. foresaw "big
influx of British goods =. Now
we must do something to protect
our own economy" Another Re-
publican, Senator Malone Of
Nevada, denounced the new rate
as "a false and. dishonest value"
It viii depress Britain's economy
and bring sharper low-cost compe-
tition into this country, he pre-
dicted.
The American Federation Of
Of Labor, in its monthly magazine,
took the view followed by the
Truman administration. An arti-
Gle declared:
"Unless we allow other nations
to. earn dollars by selling goods
to US, our exports will be seriously
cut away; also it will be all but
impossible to expand world trade
and make currencies convertible. 81
Others Expected to Follow.
In the opinion of high-ranking
officials, the round of devaluation
announcements is just well under
way. They forecast that all the
Marshall Plan countries except
italy and Belgium will. down.
value in amounts which may vary
widely from the British cut. Spain,
Portugal, and even stable Swift
zerland, were described as posi-
hilities.