FINANCIAL NOTES THE BARTER PLAN
THE barter arrangement between Great Britain and the U.S.A. so earnestly desired by certain American interests has in part materialised. About 600,000 bales of American cotton are to be held in this country strictly for emergency purposes and the equivalent amount of rubber (approximately 8o,000 tons) is to be similarly held in the U.S.A. The cotton can be provided with great ease out of the stocks of over tx,000,000 bales controlled by the American Administration. The rubber is not so easy. The Dutch and the SiameSe, as parties to the International Rubber Regulation scheme, will have to partici- pate in it, and it has already been shown that there are doubts on the Committee as to the legality of a special quota release which is not available to all buyers. Nevertheless, one way or another, the means will be found and the Committee will doubtless make the quota release required, which is about to per cent. extra for about six months. Much of the rubber can be quickly provided out of the large stocks now held on estates awaiting export rights.
It remains true that the trade does not like the deal. It is feared that, all assurances notwithstanding, the Government stock will tend to depress prices and to limit the volume of normal market transactions. For instance, though the Govern- ments are bound not to dispose of these special stocks for seven years, they will from time to time need to turn them over to prevent deterioration. This involves large Government transactions in the market and opens unlimited possibilities of manipulation.
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