Courtesy Reuters

The British Loan

PERHAPS it is a curiosity of international relations that collaboration as widespread as that between Britain and the United States should normally be conducted in the atmosphere of unsparing mutual criticism. In December last the two Governments, after three months of negotiations between experts, jointly announced a broad economic and financial agreement -- a peacetime accord comparable in breadth, though not in nature, to the wartime lend-lease agreements, and regarded by the executive branches of both Governments as a model for international coöperation. The text of the agreement evoked more than a little hostility. In London various voices pronounced it "cruelly hard," said that it "left us with our agricultural program," or concluded that "we have been forced into a disastrous bargain." In many of the American Congressional comments the agreement was handled in much the same harsh spirit: it was called "not a loan but an outright gift" and "a game of chance," and the criticism was voiced that it would "promote too damned much Socialism at home and too damned much imperialism abroad." A mutual declaration of economic warfare could scarcely have elicited warmer outbursts of distaste on both sides. The British Parliament nevertheless felt forced begrudgingly to confirm the agreement. The United States Congress has yet to act, and what its action will be is at the present time uncertain.

The purpose of this paper is not to show on which side of the Atlantic there has arisen the juster oratory. Rather, an effort is here made to assess from an economic point of view the likely effectiveness of the proposed arrangements for solving the United Kingdom's current economic dilemma, and for contributing to the "multilateral" economy which is the avowed aim of the international economic policy of the United States.

Presumably the first concern of the United States in the negotiations was to expedite Britain's transition to a "normal" self-liquidating trade basis, in contrast to the informal financial arrangements of wartime. The British came to the

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