Evening star., 1933-06-25
SETBACK FOR CONFERENCE
LAID TO AMERICAN POLICY
British Economist Sees Steadied Ex-
change, if Not Pegged Dollar, Essen
tial to Economic Program.

proposals. For while it is certain that
if prices generally throughout the world
are to be raised equally, currency sta
biliZation would be no impeachment and
in many respects help to American
recovery, it is also true that If there is
to be no general rise or very unequal
one, a fixing Of exchange rates might
hamper America in raising its own
price level
The particular mixture of publicity
and secrecy which attended the central
bankers conversations increased the ef-
feet on the markets and on conference
psychology. For secrecy as to the SUBJ
stance of their proposals, whether neces-
sary or not at once magnified the pub
licity given them and exaggerated the
rumorS as to their character. A more
modest proposal, such as was indicated
above-an agreed mechanism to reduce
exchange fluctuations-might have re-
ceived acceptance and the clear an
nouncement Of its nature would then
nave Gained opinion. 1t may still not
be too late to return to such a course
But one thing is clear 1t seems use
less to make any further attempt to
choose the rate for sterilization until
the position of the different countries
as to monetary policy is cleared up.
Identical Policy Unnecessary.
The situation is difficult but not i'm
possible. 1t is not essential that the
policy should be identical for each
country, but only that it should be
known and accepted Supposing, for ex-
ample, we had statements from the
three key countries to the following
effect:
From President Roosevelt: Il am
determined TO use every method to raise
American prices to the point which re-
moves the present disparity between
costs and prices. In view of the extent
to which adjustments of costs have
been made and new contracts con-
cluded since 1928, this does not mean
an increase to the level of 1928. but
Tor instance, to level about half way
between the present level and that one
l do not intend to depreciate or devalue
the dollar except if, and SO far as. it is
necessary to do such for that objective
Ana am equally determined by every
method to prevent imitation proceeding
beyond that point"
from Mr.. Chamberlain a statement
10 the effect that in agreement with
the Bank of England he Is aiming at
the same objective, or, failing that. a
different but declared level.
And from the French delegation
That 1t would be happy to see a gen.
eral rise In world prices, but that it is
not directing monetary policy toward
an increase OF French prices.
Could Turn to Other Topics.
The immediate result Of such state
mentS would be that the exchange rates
on the market would begin to get closer
10 the true values of currencies, the
experts would have elements upon
which they could calculate more closely
the true rates and the way would grad
uaily be cleared for a provisional stabi-
hzatlon which would not impede anv
country's efforts for internal recovery
ana would immensely help the resto-
ration of world trade.
II this Is impossible. sterilization in
tne near future is also impossible; it
will have to wait until the actual course
OF future prices in the different coun-
tries will be known-that is. for many
months
In tnat case the world conference
would be confined to discussing oues-
lions which are not dependent on sta
olilzation or to attempting to reach
agreements which must be conditioned
upon or be adapted to later rates of
stabilization. That would greatly re-
strict Its work. But even in that case
there is much that can usefully be
done. Even in this. the worst, alternative
an agreement ought to be reached upon
conditions for a return to the gold
standard and the reforms which will be
necessary to make that standard work
satisfactorily.
The present progress of the discus
sions indicates a fair prospect of agree
ment in this sphere. AS regards tariffs.
no actual new rates can be negotiated
without currency stabilization, but the
way for future reform can be prepared
by agreeing upon the criteria to dis
tinguiSh between the better and worse
forms of tariffs and upon changes in
the use Of the most-favored- nation
clause. which will tend to help down.
ward movement in tariffs.
Copyright. 1879. by North American News
paper Alliance