The Good European

In the Chateau de la Muette, onetime Parisian home of the Rothschilds and now, appropriately enough, the counting-house of Europe, Britain's Chancellor of the Exchequer Richard A. ("Rab") Butler gave his Continental colleagues the best financial news this year. Britain, he said, will relax trade restrictions to allow another $90 million worth of imports from Western Europe. British tourists will henceforth be allowed to take abroad -L-40 ($112) apiece instead of the -L-25 ($70) permitted before. "The United Kingdom," Butler told his fellow members of the Organization for European Economic Cooperation, "is determined to play the part of the good European."

Butler proved his good intentions by promising that the vast sterling area will remain a member of the European Payments Union for at least another year.

Henceforth, such items as French gloves and cheeses, Italian cork and coffin handles, will be admitted to the British market without quota restrictions. Swiss hoteliers rubbed their hands at the prospect of British tourists with enough money to spend a week or more instead of a few days. "A British accent" glowed London's Daily Express, "will no longer be a passport to the worst table in the restaurant,"

Pounds for Sale. Britain's action was welcomed more for its intentions than its actuality. Chancellor Butler raised from 44% to 58% the proportion of British imports freed from government restriction. This compares with a 75% trade "liberalization" expected of solvent nations by OEEC, and the 99% free trade permitted by Italy. Italy's open door actually threatens its own recovery: in the first two months of 1953, its imports from EPU nations exceeded its exports by $67 million. France is in direr straits and $625 million in debt to EPU; there is strong talk of a new devaluation of the franc. Rome and Paris had both threatened to tighten import regulations to get themselves out of their jam. By making it easier for them to earn sterling, Butler may induce them to change their minds.

Jaguars for Breakfast. Butler's gesture reflected Britain's increased financial confidence, which in large measure is due to him. In 1952, reported the U.S. Department of Commerce last week, the United Kingdom earned $37 million more from trade with the U.S. than it spent. The Bank of England's central reserves rose in the last ten months from $1.7 billion to more than $2 billion--enough for Rab Butler to authorize the release of 1) $168 million worth of sterling to the World Bank for lending purposes; 2) enough hard currency to keep the rate of British investment in Canada respectably close to that of the U.S.

No one, least of all Chancellor Butler, imagined for a moment that Britain was secure. "You stop buying Jaguar sports cars," a Butler aide said last month in Washington, "and we stop buying breakfasts." But after years of austere pessimism Britons had devised their own modest standards of what constitutes "recovery." When egg rationing was abolished last week, no music was sweeter to British housewives than a London grocer's complaint: "Eggs, don't talk to me about eggs. They're a drug on the market."

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