Evening star., 1951-12-15
Britain 10 Begin
Paying on 1946
Loan From u. ).
Control of FOREIGN
Exchange Eosed
To Help Pound
BY the Assoeiaied Press

of the Assocofeo rre3
LONDON, Dec. 15.-Britain an
nounced today she will begin pay
ing of both interest and prin-
cipal of her multi billion dollar
postwar American and Canadian
loans on December 81. A treas
ury announcement said the gov
ernment had decided not to take
advantage Of its right to post
pone payment of the interest on
both 1916 loans.
The United States loan totaled
$4.35o. 600, 900 ,75o, 100000 OF
which was new money made avail
able to Britain and 5000 million
of which was in lend-lease goods
which reached England after the
end of World War II.
The Canadian loan totaled ST.
185.000,000.
On December 81 Britain will pay
the United States $51.5 million on
the principal of her loan and $87
million as interest.
Her payments to Canada will
total $14 million against the prin-
cipal of the Canadian loan and
$23.7 million interest.
Exchange Controls Eased.
Earlier today. Britain eased
her iron-handed control over the
buying and selling of foreign mon
les with the aim of restoring
world confidence in her own
weakened currency.
The Bank of England author
lied private individuals to trade
British pounds for foreign money
including the dollar - subject
only to a government limitation
on the prices.
For IL years the bank itself has
handled all dealings in other cur
rency-always at the official ex-
change rates.
The changes affect only the me-
chanics Of exchanging pounds
sterling for other currencies. The
Government will retain its rigid
controls over what Britons may
buy abroad and in what quantities.
Thus there will be no increase
In British spending in the United
States or elsewhere, although i'm.
porters and exporters will now be
able. to take some advantage of
fluctuations in exchange rates.
The action, which relaxes but
does not end exchange control
restrictions, was regarded as al
small first step by Britain to let
the pound find its real value on
the money markets of the world.
The Bank Of England is an agency
of the British government, which
has been sorely troubled financially
and which may seek more United
States money aid next month.
Exchange Market to Reopen.
The official dollar value of the
British pound remains at $3.50
and the official price of gold re-
mains pegged at $35 per fine
ounce.
Dealers buying or selling foreign
monies for immediate use (spot)
will be able to swing their prices
anywhere between $277 and $2.83
getting the best price they can.
Dealers buying or selling foreign
monies for later use (forwar0 will
be able to vary their prices still
more. The only limitation is that
they cannot buy or sell at prices
which the international monetary
fund would deem unreasonable.
An official bank statement an
nounced that the foreign ex-
change market will be reopened in
London Monday for dealing both
in spot and forward currencies.
It has been closed since 1899.
In New York yesterday heavy
selling in the pound-based on re-
valuation rumors from London
sent the pound down nearly 6
cents, to $274A. for one-month
futures, while three-months' de-
liveries closed at around $2.71h.
The Federal Reserve Bank of New
York, as agent foT the Bank of
England, held spot sterling at
around $2.79A. The rumors also
were reflected in sharp price fuc-
tuations in the world rubber, tin
and cocoa markets.
Canada Abolishes Controls.
Canada suddenly abolished her
l2-year-old foreign exchange con-
trolls last night.
The action means that Amer
leans or other foreigners can invest
there without any bans on retriev-
ing either capital or profits, and
Canadians can spend their money
abroad where and how they please,
without government permission.
Canada thus became the first
nation to junk financial bans i'm
posed to aid the war effort and
recovery. She joins the United
States and Switzerland-neither
Of which limited foreign exchange
-as the worlds only countries