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COLONIAL
CIRCULAR DESPATCH
OFFICE
CONFIDENTIAL
Sir,
64
B3B.
THE CHURCH HOUSE
GREAT SMITH STREET LONDON, S.W.I
18th January, 1949.
Loan Policy
I have the honour to address you on the subject of the
raising of loans by Colonial Governments on the London market for
development purposes. The position has somewhat developed during
recent months, and I think it is very important that Colonial
Governments should be fully aware of the stage which has now been
reached.
2.
Until a few months ago, the general position which His
Majesty's Government were forced to adopt was that owing to the
acute balance of payments crisis, the raising of London loans by
Colonial Governments could not be contemplated for some years.
A number of Colonial Governments were informed in this sense as and
when the occasion arose. I must emphasise that this situation
has not fundamentally altered. The balance of payments problem
continues, and it is still necessary that the productive capacity
of the United Kingdom should be directed towards only the most
essential needs, with a view to the earliest possible restoration
of the balance of payments position of the sterling area. In
these circumstances, calls by Colonial Governments on the London
market, in that they involve additional claims on United Kingdom
productive capacity must still be kept to an absolute minimum.
3. On the other hand, His Majesty's Government fully recognise
that they are committed to the policy of Colonial development, and
that adequate finance must be provided to enable approved
The Officer Administering
the Government of
Development