$3 Billion Gum, Chum?

In London restaurants last week the buzz of war talk had been replaced by: "I say, it is a frightful mess--Lend-Lease. ... If Roosevelt hadn't died. . . . May as well face it ... they want to lend, and they bloody well won't buy. . . . I'm ready to go but I can't get materials."

A cartoon in the weekly Tribune showed a British kid asking a G.I.: "Any gum, chum, on a strictly longterm, interest-free, dollar-loan basis?"

To see about that gum, Britain's Lord Keynes was in Washington, after talks in Ottawa on Britain's immediate credit position, which is so tight that her businessmen cannot properly get going on reconversion. His Washington mission dealt with a tougher, longer-range problem.

Britain, in spite of Lend-Lease, is -L-20 billion worse off than before the war. She does not want to add to her staggering debt, because she does not see how she can pay interest. Yet she must have dollars if she is ever to emerge from the refuge of blocked sterling balances which restrict her own and the world's trade. At present Britain, with a reserve of only -L-2 billion, cannot pay the -L-12 to -L-16 billion she owes India, Egypt and the other sterling countries.

The solution seemed to lie in a U.S. loan of up to $3 billion, which the British would accept only if they had plenty of time to pay and if interest rates were low or merely nominal. The U.S., anxious to get partner Britain back on her feet, had conditions, too: 1) modification of Britain's pro-cartel policy; 2) scaling-down of Britain's debts by the countries of the sterling group; 3) relaxation of Empire trade preferences.

The British felt especially keenly the danger of taking a dollar loan without assurance that they could pay with exports to the U.S. Keynes had not come hat in hand, though he knew he would have to make concessions. It would require all his spirited, almost oratorical negotiator's skill to reach a ground that both Congress and the British Cabinet would find reasonable.

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