Evening star., 1950-01-29

ing its securities formerly held in
London, proves that India fell
short of its fair share of the sac
rifices during the war.
OF Egypt, Britains say it did not
even contribute to the common
cause, but throughout the war sat
on the fence, piling up London
balances and, five minutes before
the wars end" declared war on
the Axis. "Is it too much to ask"
observes a British commentator,
that countries such as Egypt.
which enjoyed the financial ad-
vantages of virtual neutrality until
a very late stage of the war,
should pay something toward the
expenses of the war incurred by
countries which were in the fight
from the outset?"
Debtors Viewpoint
Opposed to such British views
we have the intransigeant atti-
tude of the debtors. The leaders
of India. for example, have always
held that the Anglo Indian f1nan-
cial settlement recognized that
India had paid for its defense to
the limit of it's capacity. AS to
capacity to pay, the Indians seem
to regard the British as disgust
ingly aff1uent, measured by Indian
standards. Anglo-Indian discus
sions of the sterling balances have
involved heated charges centering
on the prices demanded for Indian
goods during the war, the pegging
of the wartime rate of exchange
between the two countries.
At Breton Woods Lord Keynes.
head of the British delegation,
publicly acknowledged Britains
deep obligation to "our Indian
friends" To this Keynes added a
promise: when the end is reached
and we can see our way into the
daylight we shall take it up with
out delay to settle honorably what
was honorably and generously
given"
Because the greater part of the
blocked-sterling problem is an
Asian problem and because the
United States of late has become
very Asia conscious, the British
UNDERSTANDABLE are hoping for a
way out of these bank balance
difficulties through American aid.
Britain doubtless hopes that some
how, in the extension of American
aid to Asia Washington will per-
Suade the Eastern creditors of
London to cancel part of the ster-
ling in consideration of dollars
supplied by the United States. In
Colombo recently Foreign Secre-
tary Ernest Bevin stated that the
United Kingdom will ask the
United States to share the prob
lem of non-Communist Asia. "The
United States" he added, lis
very generous country"
But If the role of securing can
collation. of part of the sterling
owned in India and elsewhere is
to be the role of the United States,
it promises to be tough one. The
Indians and other creditors would
welcome Washington's replace
ment of the sterling with dollars
only If no strings are attached.
Indian Finance Calcutta weekly
sees as "the most simple solution
for this vexing problem-the TAX
ing over by the United States of
the entire sterling obligations Of
Britain" But adds:
Unpalatable Fact
To suggest that the U. S. A. must
exert her influence to induce the
creditors to accept a scaling down
betrays lack of appreciation of
the type of embarrassments which
the U. S. A. will have to face
thereby. (This suggestion) seems
to overlook the fact that the Asian
countries are in no mood to listen
to any pleading howsoever emf
nent or friendly for any act of
charity with credits which for
them are an indispensable bulwark
against financial bankruptcy"
This is the background against
which one must view the cam
paign of American education
which has recently made itself
evident on this problem of the
sterling balances. 1t is we'll enough
for the chairman of j. P. Morgan
g. Co. to say that the sterling
balance should be scaled down and
funded and that the United States
Government should help arrange
it. Easier said than done,
We are being told that this
country is now helping India
through the ERP aid to Britain;
that with the dininution and final
ending of ERP India will suffer
and that, therefore, the Indian
and British problems are really
one. Americans are thinking more
about India than ever before, but
what is uppermost in their minds
is Britain's inability to get on its
feet and the fact that all the
financial transfusions of the post
war years have failed to get the
European deficits out of our
budget.
Several billion dollars of further
aid to Britain by relieving that
country of it's war-debt sterling
balances will certainly act as an
other stiff shot in the arm. But
will it solve Britain's inability to
earn its own way, or will it merely
postpone once again the facing of
a very unpalatable fact? This
question indeed is more than Brit
ish. It applies in a wide range of
countries where the United States
has been extending aid. Instead
OF doing everything they can for
themselves, many foreigners seem
inclined to let Sam do it.
But there is another fact unpal-