The Evening Star (February 4, 1946)
ON THE RECORD —
British loan should be approved promptly
By Dorothy Thompson
It is greatly to be hoped that the British loan will be expedited by Congress. The world in which we live is economically devastated, and is in a condition of extreme political instability. No effort should be spared to ameliorate these conditions as rapidly as possible. Neither Bretton Woods nor any international trade policy can become in the least effective until the special British situation is met.
The British Parliament has accepted the conditions of the loan, not without making some wry faces. The conditions mean the dissolution of the sterling bloc and the abandoning of imperial preferences. The extreme left in the British Labor Party, which leans toward state-controlled trade as part of a completely planned economy, and the extreme right, which leans toward imperial autarchy, would both be supported against the middle-of-the-roaders by the failure of the loan. There is, therefore, a political aspect to the loan, which should certainly be taken into account by the very representatives and senators most likely to oppose it.
A prolonged debate – with even a filibuster, as has been threatened – would be in the nature of a strike against any international financial reconstruction. The British cannot dissolve the sterling bloc, for instance, until America takes action on the loan. The international trade conference, highly necessary, cannot take place until then. The delay will already have necessitated postponement, and meanwhile everything is hanging in midair, as far as world economic reconstruction is concerned. Time is, therefore, of the essence. A breakdown in British-American financial relations, or a prolonged state of suspension with anger and querulousness, would create an international deadlock, promoting every sort of political and economic speculation.
The matter of foreign trade is of grave concern to American industry and American workers. Henry Wallace, who is certainly in favor of the largest possible internal consumption of American production, was one of the first to realize and say that full employment will be impossible unless the United States finds increased foreign outlets.
In a world which is, at present, impoverished beyond imagination, and much of which – the Soviet Union and its satellites, for instance – is within a practically closed economy, the prospect is bleak at best. Certainly it is not in the American interest to promote any sort of autarchy, whether rightist or leftist, but that will be the alternative to refinancing Great Britain, and, as a result of that refinancing, promoting the multilateral reciprocal trade ideas which have been one of the few consistent lines of American foreign policy for many years, finding their stronger supporters in President Roosevelt and Cordell Hull.
Fortunately, by far and away the best American foreign customer has been, for decades, the United Kingdom and the British Commonwealth. In 1938, for instance – the last more or less normal year – 17 percent of all our exports went to the United Kingdom, 15 percent to Canada and 13 percent to the rest of the commonwealth – 45 percent of our entire export trade. The same year, imports from the United Kingdom were 6 percent of our total; from Canada 13 percent; from the rest of the commonwealth 13 percent, or a total of 32 percent – strongly favorable to us, on balance. It is therefore essential to our own trade revival that we get our affairs with the United Kingdom and commonwealth on a steady basis and quickly, for if we cannot do this with our best customers, we certainly cannot accomplish anything as favorable with anybody else.
The Congress members who think to oppose the loan are, oddly enough, the very men who are opposed to “regimentation,” “socialism” and “communism.” Yet they sometimes appear to be God’s gift to their own opponents, especially the regimenters. We have not got an infinite choice of alternatives. Any sort of freedom depends on a degree of economic freedom. Economic freedom is inconceivable without multilateral reciprocal trade; that is inconceivable without the refinancing of Britain. Money has to work in the world if it is to help create an expanding economy, and nothing is served by squeezing one’s competitors too hard, especially if they are also one’s own best customers. American prosperity has always risen or waned with world prosperity.
The argument that the British loan creates a precedent is specious. Every loan has to be considered on its own merits, and undoubtedly we shall have to refinance a considerable part of the world if we want orderly, prosperous, evolutionary reconstruction. The alternative will be political extremisms of all kinds, new forms and expressions of economic Fascism, all with inevitable social and economic repercussions on and within the United States. Indeed, the economic and political instability of the world at large is the greatest threat to our own institutions.
It is, therefore, to be hoped that the British loan will not, by further troubling the international waters, create new favorable fishing conditions for those few who do not want the rapid restoration of order and equilibrium. Whatever difficulties there may be in doing business with the British are largely overcome by the conditions attached to the loan, and in any case, if we cannot do business with the United Kingdom and commonwealth we shall encounter much harder problems with the rest of the world – and with less immediate and favorable results.