Another Loan

The prospect, awful to Britons, that they may have to beg the U.S. for another loan is suddenly looming black and real. For months the possibility has been progressing from a vague foreboding to concrete worry, and lately to specific debate among a few burdened men in and near the British Cabinet. But until very lately it has been something for the future--a distant trouble obscured by present troubles. This week, subtly but unmistakably, the atmosphere changed. Britons, official and unofficial, who had resisted the idea, accepted it as something inevitable; in popular discussion the question became not "Do you think . . ." but "When... ?"

Ambassador Douglas, preoccupied with Britain's plight, is sounding out influential Britons on their views and getting their estimates of terms--financial and political--on which another loan might be asked. These talks are in no sense negotiations, or even formal preliminaries to negotiations; their significance is simply that "another loan" is inevitably one of the Ambassador's pressing concerns.

Moderate improvement in Britain's financial situation might well increase rather than decrease the likelihood of another loan application. Britain clings to financial respectability as a bankrupt tycoon might cling to his last good suit, and one of the most powerful arguments against another loan has been the uncertainty that it (or the first one) could be repaid. Furthermore, proud Britons, if they must ask it at all, would far rather ask it as a helpful stimulus to quicker recovery than as a desperate last resort.

But the pressures most powerfully at work are those of grim necessity: 1) U.S. prices have already risen precipitously since the loan was negotiated a year ago; 2) Britain has to buy more food than she expected from the dollar countries--the U.S., Canada, Argentina--because crop recovery in the soft-money countries has been slower than expected, 3) frosts, snow and floods have heavily cut Britain's home food supply (a quarter of all the sheep and lambs in the country died this winter).

Much as they hate the prospect of further dependence on the U.S., British leaders, noting that 1948 is a U.S. election year, would rather ask now than have the loan become a campaign football.

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