Back to Financial Reality The announcement that this year's interest
and instalment of principal on the American and Canadian loans will be paid in full sounded like news from another world, so unfamiliar has become the conception of a straightforward loan requiring a straightforward repayment. It is true that the conditions on which the loans were made were such that a waiver clause might have been invoked and the interest left unpaid, but the Govern- trient were undoubtedly wise in refusing- to take advantage of this loophole. The first task of the Chancellor, after six years. of Socialist finance, is to bring the- British public back to a sense of financial reality, and if he can do this while at the same time showing the outside world that Britain intends to pay -her way, so much the better. ..The reopening of the foreign exchange market for dollars and other specified currencies " (which include nearly every currency of importance outside the sterling area) is a reminder to bankers and traders that money-changing is a business with its own risks and rewards—a fact that they may haYe tended to forget during the twelve years in which the business has been conducted by the Bank of England. Daring these years traders and bankers requiring foreign currency on a future date have been able to insulate themselves 'against changes in the value of that eurrency by paying a fixed charge to the Bank of England, which took responsibility for any loss (or profit). This business, with the profit (or loss), is now in effect handed back to the banks. The currency regulations, as the public knows them, will still remain, but there is a possibility that the forward rates of exchange will now reflect the real strength. or weakness of sterling more naturally.
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