Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-26
WEIGHS
CURRENCY CHANGE
Managed System Considered
to Replace Gold Standard
as Basis.
BY WILLIAM H. SLOVENIAN.

~ Gable to The Star.
STOCKHOLM, Sweden, November %
Formulation Of a new system of man.
aged currency to replace the gold
standard system, which Scandinavians
a general consider Anticipated and
Unsatisfactory" is now occupying the
attention Of leading Swedish econo-
Inists.
while the Swedish National Bank is
mA present so i1elplessly short Of for
Aten exchange holdings that it must
proceed with the utmost caution and
Strive to correct that weakness before
making definite plans for future man
Element Of national money affairs &C
oarding to any fixed system. its leaders
appear to share the opinion OF mde-
1endent economists as to the general
lines of the new policy which eventually
Hust be adopted.
zone of the most clearly formulated
taians for the establishment of a man
aged currency system is that set forth
by a group Of economists including
F<of. BERTH Ohlin and Prof. Gunnar
Nyrdal Of the University Of Stockholm.
Features Of Plan.
= It's salient features are as follows:
81. The purchasing power Of money
In the hands of the consumer would be
maintained at a fairly fixed level-for
example, at the level of September,
1880, or of any other date to be fixed
UPON.
81. There would be no attempt to con-
troll wholesale prices. AS a matter of
TACT, a rise in wholesale prices might
be welcomed, as it would tend to bring
them into the balance with retail prices
and would alleviate depression by as
slsting industry.
50. As currency would be free, there
would be no effort made to maintain
any fixed relation between the new
Swedish crown and the gold crown, or
between 1t and the pound or any for
efgn gold standard currencieS. The re-
lation between the new currency and
foreign currencies would vary according
to the retail purchasing powers OF the
latter.
Not New in Theory.
In order to maintain the level of
currency at fixed purchasing power"
the central government bank would be
able to use discount rate and other
credit restrictions to prevent a rise in
xrice levels. Distortion of the currency
BY outside influences would be prevented
hS the use of a stock Of foreign ex-
change, which would be sold whenever
shy foreign currency rose above its true
V&lue.
sWhile this plan is not altogether new
ID theory, its proposal at this time as
Enmes considerable Importance because
row for the first time in history there
IL a considerable chance of its being
pat into practice.
THE only alternative to such q plan
you'd be return to some sort Of gold
Standard, and the Scandinavian coun-
tiles are not the only ones which feel
tat the days OF the gold standard are
definitely passed. Were such a plan
Effected successfully by Sweden, it is
not unlikely that 1t would have the
Widespread effect of influencing the
rooney policies of other European ma
ttUns which are sick and tired Of gold.
Must Acquire Exchange.
awhen the swedes will be able to 60
ahead with the establishment Of their
currency on some such basis depends
l&fgely upon the Riksbank's success in
acquiring the necessary supplies Of for
eiRn exchange. Swedish exporters are
Known to possess large quantities Of
sterling and the situation will improve
Immediately when they can be COM
pelled to convert them into Swedish
Crowns.
WHEN Tic oI1t6u pOuuu IeCuIneu 10
parity with the crown last week, it was
expected that this sterling would be
dumped on the bourse, but apparently
those holding it preferred to retain it..
Restrictions on the issuance Of foreign
exchange and the granting of credit,
which were put into effect by all the
Swedish banks during the last few days,
are now expected to force the CONVEX
sion Of large quantities of this sterling
exchange.
(cOpvright, 1917