THE NEEDS 0F GREAT BRITAIN FOR FINANCIAL AID DURING PHASE III Summary 1. At the end of 1945 the British wi1 have foreign liabilities of $14 to 15 billlon, largely in short-term sterling obligations to members of the British Common- wealth. Their long-term foreign investments will be about $10 blllion, and their net gold and dollars a little over $2 billion. 2. It has been estimated that in the first three post-war transitional years the U.S. will incur an addi- tional indebtedness of from $2 to 5 billion to pay for essential imports. 3. This need would be met in part by a limited liquidation of foreign long-term investments, a small reduction in gold and dollar balances, and an increase in short-term sterling indebtedness. The International Mone- tary Fund and Bank would help some, especially indirectly by their effect on general international trade, invest- ment, and economic activity. 4. It is recommended that the President, if the Prime Minister raises the issue: a. Request a frank statement of Bristish financial needs in Phase III. b. Call attention to the possibilities of credit under a 3-C Lend Lease agreement, to cover supplies such as foodstuffs and raw materials on order under lend lease, but not yet exported at the close of hostilities. 0ther financial aid would be made possible by the adoption of our program of financial legislation. |