Evening star., 1952-12-21
Ster|ingA Area
Commonwealth Plans for Economic Comeback
Hinge on How America, Europe React
By Eorl n. Voss

Oy 6ot
The British Commonwealth Eco
nomic Conference, which now has
completed three weeks of planning
for the expansion of world produc-
ton and trade, put out a communique
at the end of the sessions, which has
come in for good deal of ribbing.
The Times of London, for instance,
thought the communique was fine
collection of good intentions" but
failed to find many specific projects
to get the sterling area back on its
feet.
Most of the decisions announced
after the London conference were
fuzzy generalities. But they had to
be. Everything the prime ministers
decided was subject to two big ifs:
. Would the United States and
Europe go along?
. Would their own parliaments
support them?
Essential Points
Here are some of the essentials in
the plan agreed upon at the confer
ence:
l. Commonwealth countries will
try to work with all members of the
free world to reduce import restric-
tions now imposed by both debtor
and creditor nations. This has al
ways been enviSioned as a necessity.
The timing is important, however.
If the sterling area hopes to do this
soon-and that depends on the CO.
operation coming from the United
States, Europe and the sterling area
parliaments-it would be a bold bid
to hasten the pace of recovery.
2. Commonwealth countries will
work to restore the convertibility Of
sterling by progressive stages. Again,
the important thing is when this
will happen. If the pound is to be
healthy again. it will have to be
convertible to dollars and other non
sterling currency. The way the
commonwealth conference talked
about it. the impression was left that
the time for the first stage" was
near at hand.
3. Commonwealth countries will
emphasize projects within their own
countries which will improve the
sterling areas balance of payments
with the rest of the world. This
probably means that sterling area
countries will move closer to the
prewar Setup in which the United
Kingdom served as manufacturer
and most other commonwealth
countries supplied the raw materials.
Whether the rest of the common
wealth will do what their prime
ministers say they ought to do is
another question. All countries like
to develop their own manufacturing
plants because they associate home
industries with an increased stand
ard of living. If they depend on
Britain or the rest of the world to
sell them finished products at prices
they can afford, they risk being left
out on the limb. For that reason
India, for instance. has embarked
on a five-year plan to develop it's
own industry, thus raising its stand
ard of living in the most economical
way possible. Shipping and manu-
featuring costs are thus absorbed at
home rather than sent abroad.
4. Great Britain. by pulling in its
belt another notch, or at least keep
ing it where it is, hopes to provide
the rest of the commonwealth with
additional capital to develop projects
which will aid the balance of pay
ments. Some of this capital will be
made available for lending through
the International Bank. other
amounts through special London
syndicate that is being formed.
S. All commonwealth governments
are ready to cooperate in Inter
national scheme" to stabilize both
the demand and the prices for
primary commodities. The sterling
area, as well as the rest of the world,
was hurt in the United States buy