Hobbled & Leaking

In the "free" markets of the world, the British pound, which was devalued to $2.80 last September, was being unofficially devalued still further. The pound was selling for $2.47 in New York City, was off 6% from its pegged price in Paris, 11% in Brussels.

Sir Stafford Cripps, who thought the British government had devalued the pound to rock bottom, brushed off the cheap pounds as insignificant. But exporters estimated that $60 million a year are being lost by Britain by use of the cheap pounds to pay for British exports. Britain had hoped to plug such leaks when she devalued in the first place.

Eying the dollar loss, some exchange experts thought that the pound might be in for more trouble, unless Britain removed her strict controls on its use. Warned the Wall Street Journal: "The pound is still a hobbled currency . . . The man who holds a pound sterling, with its limited usefulness, still wants to swap it for U.S. dollars or other money that is spendable anywhere any time . . . Under such circumstances, there is no 'rockbottom' price [for the pound]."

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