HC Deb 27 April 1948 vol 450 c209
51. Mr. Erroll

asked the Chancellor of the Exchequer whether sterling earned by Germans trading in the Anglo-American zone of Germany is freely convertible.

Mr. Jay

Sterling resulting from trade between the Bizonal area and the sterling area is not at the disposal of individual German exporters, but is held by the Joint Foreign Exchange Agency. This sterling is convertible to the extent that the net amount so held at the end of any quarter exceeds £1½ million. The German exporter receives payment in Reichsmarks.

Mr. Erroll

Why are the terms of trade so unfavourable for this country exporting to Germany?

Mr. Jay

The terms of trade are not unfavourable; it is a mutual arrangement. If the sterling area have a surplus, we earn dollars; if the sterling area has a deficit, we pay dollars.