Austerity Pangs

Great Britain's single-minded struggle for recovery was shaking Canada's hopes of prosperity.

Since Sept. 2, when the end of the Pacific war closed out mutual aid (Canadian Lend-Lease), London had piled more & more restrictions on imports from Canada. Almost the whole range of processed articles, from such job-producing industries as farm machinery, rolled oats, newsprint, office machines and household appliances, were barred from the British market.

Some manufacturers, concluding that they would have to build new plants in Britain, prepared to do so. Wheat and lumber were shipped only to tightly budgeted Government buyers. And then Canadian exporters began meeting similar" restrictions in India, Egypt, Australia, other countries in the British-money (sterling) circuit.

Businessmen last week yelled for somebody to do something--and quick. They well knew that the Dominion's traditionally best customer, Britain, would have to be the best customer again if Canada's plans for a 33% increase in her prewar exports were not to go glimmering.

Understanding & Doubts. At Ottawa, trade officials knew the urgency of keeping British shelves open to Canadian goods. They were fighting against British embargoes without hope of across-the-board success until the U.K. and the U.S. came to terms in their Washington deal for an American loan. But the Canadians, historically the third partner in the North Atlantic trade triangle, believed that the U.S. loan would not be big enough to let Britain spend dollars freely. The painful symbols of British economic austerity, they figured, might be reduced but hardly eliminated.

Canadian economists did not carp at the British. It was true that Britain did not have enough dollars for all her needs, logical that she should refuse to borrow more than she had a prayer of repaying. But Canada had not been niggardly in meeting Britain's needs in the war. Why should Britain now doubt that Canada would put up the money, somehow, to keep trade going?

Canada's reconstruction loans to Britain would be quickly settled, once the Washington deal was concluded. Meanwhile, two facts stood out: 1) the pace of transatlantic trading would be set by the British-U.S. agreement; 2) if Canada could not sell enough to Britain, she would have to sell more to the U.S., to Latin America and to other customers outside the sterling areas.

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