Detour into Controls

that in the immedate future we were going to take a detour, and a rough one, into quotas and restrictions. If we look for a single reason why we have to make this detour, we shall find it in the announcement in August, 1947 that the British Government could no longer continue convertibility of sterling. In July they had undertaken, not without misgiving, to give any country which had (like Canada) a favourable trade balance with them, cash, that is gold or United States dollars, for the difference between imports and exports. However, after a little more than a month they found that they could not continue. This did not affect us very much at the time because our excess exports to England and the rest of the sterling area were being financed by our 1946 loan to the United Kingdom. It did mean, however, that we could no longer look forward in the fairly near future, when the loan ran out, to getting cash for our excess exports. Therefore, we had to embark on some new policy. The breakdown of our hopes for selling to England traditionally our chief customer for cash was part of a wider breakdown. Until August, 1947 we, together with other countries, had been trying to build a world in which many wartime controls could be done away with and in which freer trade would be possible. In particular, we were trying to get rid of special tariff and quota arrangements designed to penalize, or to favour, one country or one group of countries rather than others; we were trying to get trade onto a true multilateral basis. The great achievement of the Geneva Trade Conference of 1947 was that the United States offered very sweeping reductions in its

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• Almost but Not Quite

  Michael Hart•The American Review of Canadian…•1989

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