Evening star., 1933-04-30

nomic separation and reopen chan
nels for international trade. Mean
while, whatever the results of these
general attacks may be, it may be wise
to begin as soon as possible the pene-
ira. on of mutually restrictive walls
by reciprocal arrangements for ex-
change. This policy rests on the SIM
pie belief that in the end revival of
trade will result from selective proc
esses. whereby one nation will agree
to take goods which it wants in re-
turn for market for the goods which
1t most wants to sell.
II nations are to engage In trade they
must have definite standard of meas
urement for the value of the products
which they exchange The restoration
OF stable currency relationships. there
fore. is necessary to revival and main
tenance Of international trade. The
departure of most of the nations of
the world from the gold standard ex-
change restrictions and other inter-
ferences with normal currency rela-
tionships have had an unsettling and
depressing effect upon commerce 1t
must not be forgotten, however, that
they were caused originally by the un-
balancing of commerce Exchange re-
strictions and "standstill' agreements
became necessary as emergency meas
ures to keep this country or that from
being drained Of all its reserves and
being thrown into complete collapse.
One of the fundamental objectives
OF the coming conference must be to
restore the currencies of the world to
stable relationship. That achieve
ment must rest on an understanding
of the means by which such a stable
relationship is to be preserved If the
international monetary standards is to
be gold, as the preparatory commission
has suggested. it will be necessary for
the leading nations through their CEN
tral banks to cooperate in making this
standard work
Debt Structure Grows Heavy.
The increasing weight of the struc-
ture Of debts as prices have fallen has
engendered a desire everywhere to ar
rest defation and to achieve such an
increase in prices as would tighten the
burden. Only by raising prices can the
defationary spiral of the last few years
be stopped and debts and commodities
be brought into supportable relationship
to each other. The reopening of trade
channels, the removal of exchange re-
strictionS and the stabiliZation of cur
rencies would furnish certain elements
for economic recovery which might have
this desired effect As the preparatory
commission observed in its report: THE
very fact that exchanges continue to
f1uctuate is not without its effect on the
level of gold prices and may hamper a
monetary and economic policy designed
to promote a recovery of prices in gold
countries" Furthermore the thawing
out of frozen debts will release purchas-
ing power. Credit locked behind ex-
change restrictions and standstill agree
ments in the countries of Central
Europe is no less frozen purchasing
power than credit locked in closed
banks in this country.
BY coordination in the management
of rediscount rates, in the provision OF
easy credit and in their reserve policies
the central banks of the leading ma
tions can make an additional contribu-
ton to the lifting of prices. A con-
ference of central banks is, therefore,
an important adjunct of the World
Monetary and Economic Conference.
Another method which could effec-
lively be employed to lift prices and
stabilize the worlds economy Is the
certain basic commodities by agree
nations. The organization of produc-
ton and trade is one of the subjects
on the agenda for the conference. Dis
cussions of means Of regulating the
production and export of wheat. sugar,
coal, timber and other commodities
have been held among various govern
ments during recent y rs.
Responsible for Failure.
It may be recalled that our own
country was partly responsible for the
failure to reach an agreement on con-
troll of wheat in London in 1881. Ar
gentina, Canada, Australia and other
wheat-eXporting nations at that time
were favorable to the idea We did not
then have any domestic mechanism for
controlling the production or export
of wheat or other agricultural COM
modities. We are in process of per-
fecting such machinery under the
emergency agricultural adjustment bill.
We are now in a position to approach
other nations with view to bringing
the world production Of various basic
the worlds consumption capacity.
International debts, particularly the
war debts, are not on the conference
agenda. There is a long history of con-
troversy behind this omission. Our
debtors have felt and said that these
ought to be written of as q preliminary
to world recovery. It has been the
American position that the necessary
writing down Of these took place when
the permanent payments were ar
ranged for, that this reduction is
already as great as Is justified by the
decrease In price levels, and that any
thing more would be an imposition on
American taxpayers.
There has been no disposition to be
dogmatic about this: the President has
again and again intimated that any