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

rotary Ernest Bevin have been ex-
,asury John w. Snyder and Secre-
US and means of further snoring
Britain's imports would at once be
dearer, putting pressure on in
ternal costs and promoting dis
satisfaction of the working classes
and others, and, on the other hand,
devaluation by, say. 20 per cent
would not mean an instantaneous
and equivalent increase in Britain's
exports. 1t takes time to gear up
industry for added orders and to
switch primary attention from one
market to another. Devaluation of
the pound probably will come
along, ultimately, but it is not OF
itself a cure for Britain's dollar
hemorrhage. Nor will sterling de-
valuation be a success unless Brit
ish wages are kept from going up.
Even though prices of things the
worker buys 60 up. The British
government today can give no
such assurance. Without that as
surance, however, devaluation will
fail
If for these and other reasons
the United States does not for
mally propose sterling devaluation
to Grips, the British government
is no less reluctant to make the
decision voluntarily. The loss OF
confidence in sterling, now world
wide has been responsible for
considerable flight from the
pound" and for a large part of the
recent loss of gold and dollar re-
serves of the Bank of England.
This drain is forcing the Labor
governments hand. A few weeks
ago, while Sir Stafford Grips was
in Switzerland for medical reasons,
the British cabinet-it is reported
decided that the pound would
have to be devalued. and soon.
Grips heard about this in Switzer-
land and. cutting short his stay by
two weeks, fastened to London
and convinced the cabinet that the
$4.03 rate for the pound should
not be changed. Grips, the sue
cessful barrister whose earnings
from corporation clients are said
to have reached 100000 a year,
is one of Britain's most ardent
Laborites. He realizes that a de-
valuation of the pound, if it is to
be made really effective in stimu-
lating British exports and reducing
imports. must take something out
of the workers hide. That is
something Grips strongly opposes.
Will Make Own Decision
In short, Grips does not seem
fully to take to heart the advice
of the London Economist, to the
effect that Britain must give its
foreign customers more value for
their dollars. Grips doubtless
counts on Bevin to sell the United
States instead on the idea that
Washington underwrite. with dol
lars, in the end, the political bur-
dens of empire which have rested
so long on the broad and aching
shoulders of John Bull.
What role the subject of deval-
uation of the pound is playing in
the current British American
Canadian talks is not publicly
known. Paul Hoffman recently
stated that the subject was not
on the agenda at all. Mr.. Snyder
repeatedly has stated that the
proper forum for decisions on the
par value of the pound is in the
International Monetary Fund,
which sits in year-around session
in Washington. But persons in
the know cannot conceive of
proud Britain determining the
fate of the pound sterling in an
international Tower of Babel.
ANY decision to devalue will be
made in London, and the United
States Treasury will be promptly
advised of it. Then the World
Fund will consent" the United
States and Britain alone casting
A per cent of the votes. Then
the fund will get down to ap-
proving changes in the official
values of perhaps a score of other
currencies.
Meanwhile, it is hoped in Brit
ain that the official communique
to be issued at the end of the
current tri-partite Washington
talks will serve to bolster conf
dence in the pound sterling.
Study Exchange Policy
Whether the Fund will unani-
mously agree to new set of par
values for it's member countries
may be learned at this weeks
meetings of the governors. There
is block of countries, led by Bel
GUM and including perhaps
France and Italy, which would ia
vor free-market determination of
currency values, rather than an
other framework of rather arbi-
trary PARTIES. These countries
are also likely. during the Fund
meetings, to charge Britain with
running an imitation and thus I'M
settling the world.
The Fund governors will exam
Inc the whole subject Of foreign
Exchange policies. They face the
reality that exchange restrictions
are here for very long stay and
promise to get worse: that con-
vertibility is today farther of
than ever, perhaps decade away.
i The official British-American-