CAB129-53 — Page 164

LONDON AIRPORT CAPACITRage 164 of 253

The estimated peak hour movements of air transport services in the London area, during the next eight years are as follows:-

Movements in

a peak hour

1952

35

1953

38

1954

41

1955

45

1956

50

1957

55

1958

59

1959

64

1960

70

Against this, the estimated capacity of London Airport with

dual parallel runways in use, and with Northolt Airport closed to all civil flying is 60 movements an hour in fine weather, and 21 per hour in bad weather rising to 42 per hour in 1960 if expected improvements in landing aids and technique are achieved.

Page 164

Page 164

THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT

The circulation of this paper has been strictly limited 165 of 253 It is issued for the personal use of.....

Page 165ssued

TOP SECRET

C.(52) 221

30TH JUNE, 1952

CABINET

23

Copy No..

EXTERNAL FINANCIAL POLICY

Memorandum by the Paymaster-General

In February of this year the Bank of England forecast such a drain on the gold and dollar reserves that there would be a currency crisis at latest in June, but very likely in April.

To meet this they suggested a plan which seemed to me likely to lead to disastrous consequences both economically and politically.

Although the loss of gold and dollars in the last quarter has been negligible, the Bank are again asking for their plan to be adopted. They do this on the strength of vague impressions that pressure on sterling may revive in the Autumn. They say they cannot give any exact reasons for this, though to the outsider the reason seems clear, namely leakages to city financial journals which have been openly canvassing the Bank's proposals.

In March when prospects were bad the Cabinet decided against the Bank's plan. Nothing seems to have occurred since to justify altering this decision.

183

BALANCE IN SECOND HALF OF 1952

It is reckoned that in the second half of this year the payments of the sterling area will exceed the receipts by £175 millions. It is hoped to redress this balance by expanding exports (coal, defence items, etc.) by £24 millions and cutting imports (oil, machinery, raw materials and food) by £150 millions. Any short-fall in achieving a concrete physical balance of our trade in some such way will inevitably fall upon our gold and dollar reserves. As these have now fallen to about $1,650 millions action on these lines is therefore clearly necessary. Everybody agrees that unless this fundamental condition is fulfilled nothing can save us. Nobody suggests that the Bank's plan will help to cure this deficit.

There is the secondary risk that the outside world may lose confidence in the future of the pound and sell sterling at its present price of $2.8 in the hope of buying it back at a lower price. As we owe about

£2,500 millions to the Sterling Area and £1,000 millions to non-sterling area holders this is a real danger.