Evening star. [volume] (Washington, D.C.) 1854-1972, 1949-09-11

up the economy and the politica
prestige of the United Kingdom
if not indeed the long-run sur
vival of the commonwealth"
On Tuesday at the Shorehan
Hotel in Washington there vii
convene finance officials repre-
senting four dozen countries il
all parts of the world, includin
even some of the iron curtain
countries. For this is not only
from Secretary Snyder's viewpoint
income-tax- installment month il
the United States. 1t is the tim'
for the annual governors meeting
of the International Monetar!
Fund and the World Bank, the TIVE
institutions designed with so mucl
hope at Breton Woods, NH, flv'
years ago.
In the Washington talks or
Britain's problem, Canada has hat
a seat at the table. Represented
by it's Finance Minister Dougla!
C. Abbott and Secretary of State
Lester B. Pearson, Canada symbol
ICES the eternal triangle" in in
ternational commerce-the coun
try which in one direction sell
more goods than it buys and in tn
other, buys more than it sells
The United States is Canada
chief source of supply and Britain
Is Canada's chief market. Tht
trouble is that Britain can pay fol
Canadian goods only in paper
pounds sterling which won't buy
anything in Chicago or Pittsburgh
If some good angel would only
give Canada dollars for the British
pounds sterling Canada cannot
get rid of, no one would be happier
than the Canadians-unless. per-
haps, the British. This is the prob
lem of sterling in a nutshell.
Sterling Is Frozen
People all over the world today
hold bank balances in Britain
which they can neither spend out.
right for British goods, since
Britain cannot deliver all the
goods desired, nor are able to con-
vert into gold or other hare
money. Those sterling balances
are frozen" A large part of these
balances represent in effect Brit
ish war debts: payments made by
the British government in London
for goods and services supplied to
It's troops abroad during the war.
Not only is Britain unable to send
out enough surplus goods to pay
off that war debt. Britain is I'M
able to earn its way currently. To
maintain the present standard of
living, even with the help of the
large American loan of 1916 and
the ERP, Britain is having to draw
on its limited gold and dollar re-
serves. If this keeps on at the
rate of the past year. in another
year Britain will have an empty
till. That is why the British are
now here again. What the United
States does for Britain in this
matter and what the British do
for themselves is a subject Of the
keenest interest to all the world
as represented by the able and dis
tinguished f1nanciers and officials
gathering at the Shoreham.
The who's who at that hotel is
an impressive one. Belgium has
sent the governor of its National
Bank, M. Maurice Frere, whose
encourage includes. with eminent
appropriateness for these dis
turbed times, Miss 2. F. j. Ma
-laise. France has sent its Finance
Minister, M. Maurice Petsche, and
M. Mendes France. From Persia
comes A. H. Ebtehaj, head Of
the Central Bank. Mexico has sem
an able team which includes Sec
rotary of the Treasury Ramon
Beteta; the governor of the Bank
of Mexico, Carlos Novoa, and the
director general of the official
Nacional Financiera, Antonio Car
rillo Flores. To list the important
figures who will not be there might
be easier than to name those at
tending the meetings.
Since the pound sterling is a
drug on the market, it has long
been obvious to currency experts
that it is not worth. in terms OF
the United States dollar, anything
like the s4.03 at which it has been
pegged for years. That is why in
unofficial free" markets and
black markets here and there
about the world you can buy
pounds sterling at less than three
fourths of the official quotations.
In the United States Treasury and
elsewhere there has now long
existed the conviction that the
pound sterling should be officially
devalued; that is, that the official
parity in terms of the gold dollar
be lowered considerably below the
$4.03 figure. If this were properly
done, it is said, Britain would be
able to sell its luxury and other
goods in the United States ano
Canada and so earn many OF the
dollars for which they otherwise
depend on the American Taxpayer
to give them.
Not Simple Task
The matter of devaluation O.
sterling is. however, far from sim
pie, and if it happens, the effect
on other currencies in the sterling
area will be far-reaching. TIL
fund, repeatedly. has been trying
to figure out a proper par valu'
for the pound, but without success
Secretary Snyder, for various goot
reasons, is not going to suggest u
the British what value to put OF
the pound. He is well advised no
to propose devaluation at all. Fo
If devaluation results in a surg
of imports from Britain, injured
industries will blame him. And il
Britain Snyder would be charge,
with debating" to the British