Evening star., 1949-09-04

be made freely convertible into
dollars within a year. Britain
tried to live up to that promise:
but the attempt quickly failed
and was abandoned, with the un-
avoidable consent of the United
States Government. Yet. when
Britain this year negotiated an
agreement to buy from Argentina
a large quantity of meat and
wheat, strong complaints were
heard in American business and
congressional circles. The fact
that Britain badly needs Argen-
tine meat and wheat, which we
won't buy, and must make pay
ment to Argentina in some form.
seems not to impress otherwise in
telligent Americans.
The Anglo-A Argentine agree
ment is one of those bilateral
trade and payments agreements
which have criss-croSSed Europe
and the world since the war.
Their ancestry may be traced to
the Schachtian policies of pre-
war Germany. For example, un-
der this agreement Argentina will
receive British currency for it's
meat and grains. Naturally, Ar
gentina will want to use that cur
rency to buy whatever it can to
fill it's needs for manufactured
goods in Britain. If the prices Of
British goods are higher than
American goods, that is not too
important, since Argentina hasn't
the dollars to buy all it needs here
anyway. Thus. trade between
two soft currency" countries.
Britain and Argentina, is expand =
ed while Americans must look
elsewhere for business.
Blow to Breton Woods
In view Of the dwindling gold
reserves of Britain and the ster-
ling area, unless the United States
gives still larger subsidies to Lon
don the British will continue to
practice in their foreign trade
the sort of bilateralism which, dis
eliminates against American
goods. In view of the limited
means in the Truman administra-
tion's hands to alleviate the
fundamental weakness in the Brit
ish commemorative economy. the
chances are that Uncle Sam must
now agree to call article 8 of the
Anglo-American financial agree
ment a dead letter, just as the
requirement in the same argree-
ment that the pound sterling be
made convertible was perforce all
lowed to lapse into dessuetude.
If thus willy -nilly we bow to BIZ
liberalism for Britain's sake. 1t
will be another blow to the frall
Breton Woods and ITO dream
houses.
The British have the idea that
the United States one way or an
other must give away its surplus
products of farm and factory.
something the U. S. has been do
ing in one form or another since
World War I. ECA Administra-
tor Paul Hoffman took sharp ex-
ception to this European view
the other day. He called it "one
great illusion" and added: Amer
ican surpluses can be turned to
very good advantage in America,
if it comes to a mere matter OF
giving things away" Mr.. Hoff-
man is entirely right in theory.
but American farmers. manufac-
turers and organized labor do not
act that way in times like these.
They prefer to have the Ameri-
can Government give goods away
abroad, rather than at home.
strange as it may seem; and the
British delegation now here know
this quite well.
All this, and its relation to
Britain's affairs. has been inter-
estingly tied together by DR.. Paul
Einzig. well-known British econo-
mist and financial writer. DR..
Einzig reports from London that
the Labor government has been
unable to induce Britons to work
harder and accept lower stand
ard of living until the country can
pay its own way because of the
workers feeling that the United
States would always fill the deficit
in Britain's international trading
accounts. But for that feeling.
the British worker could have
been induced to do his utmost.
Exports Blamed
80 long as the United States
continues to insist on maintaining
a huge export surplus. even if it
has to be financed at the expense
of the American taxpayer, any
British government will have
very difficult task in persuading
the British workers that he has to
rely on his own effort instead OF
depending on getting something
for nothing from the United
States" Einzig adds.
AS for bilateralism in trade re-
lations. DR.. Einzig says: There
is nothing like bilateralism to
make one realize that, in order to
consume, one must produce. Had
the United States adopted BIZ
lateralist policy In relation to Brit
ain after the war, the British
worker would undoubtedly have
felt forced to make all the neces-
sary sacrifices and exertions to
increase his output and curtail his
consumption, instead Of relying
on American help"
The British have come to WASH
ington to lay their problems before
our Government. It Is not just q
temporary crisis, but q chronic
and fundamental disequilibrium
which must me met. The belt
| Tightening cut in purchases here.
announced by Sir Stafford Cripps
in July, is a proper step but it Is
not enough. If Britain devalues
the pound, as American experts
think must be done, to level well
below the present $4.03, that will
help; but of itself the action won't
be enough. It's effects will be far.
reaching in the world of currencies