Evening star., 1933-07-31
John Bull Stabilizes.

John Bull g. Co. evidently believe
in the theory of sell-help, even when
it comes to currency stabilization. At
the very moment the London Confer
ence was adjourning last week and
casting up its failures, including the
inability to stabilize currency by in
ternational agreement, for which the
United States was chiefly blamed, Great
Britain and the dominions comprising
the British Commonwealth Of Nations
succeeded in composing supposedly
irreconcilable differences and convert
ing the empire into a solid currency
sterilization unit. to be based on ster-
ling and maintained as long as world
currencies are not again anchored to
gold The sterling bloc will have its
existence entirely independent Of gold
currencies or the dollar.
Termed officially declaration Of
monetary and economic policy" the
empire pact pledges Britain and the
dominions to keep exchange rates as
steady as possible among themselves. 1t
is set forth that SO far the British gov
ernment has no commitments to other
countries as regards future management
OF sterling. This is clearly meant to
disavow any alliance between the pound
and the franc but direct overtures are
made to non-British countries to asso-
ciate themselves with the empire group,
thus making possible the attainment
and maintenance of exchange stability
over a still wider area"
Canada's adhesion to the plan indi-
Gates shift in her position. In the
recent past our neighbor to the North
has been following the United States
dollar. Now the Canadians have de-
cided to adjust their dollar to the
fluctuations of sterling.
The declaration makes clear that the
empire currency alliance Is not in
tended to be permanent and that all
the British countries crave the ultimate
restoration of "a satisfactory interna-
tional gold standard" This, however,
must await the sterilization of world
prices through international action.
Wide latitude in other fields is left
to each empire government, on such
matters, for example, as capital out
lay for public works. They will decide
such issues exclusively lin the light of
their own experiences and conditions :"
phrase in the agreement, within
limits of sound finance" is of special
significance. The inference is clear
that while the empire governments are
willing to go along with President
Roosevelt in price raising, they will
have nothing to do with American cur
rency inflationary experiments To
that extent the empire monetary pact
is welcomed in London as a timely
triumph for sound money, as it un-
questionably is an indication of the
British Empires determination to effec-
tuate currency stabilization of its own
bat, regardless Of the London Confer
ence's inability to move in that direc-
tion, mainly because of Americas atti-
tude. The agreement is plainly notice
to all concerned that however uncon-
trollably or wildly the winds of none
tary experimentation elsewhere may
blow, the British Empire is not going
to split on the rocks Of currency or
economic disagreement among its con-
stituent members 1t will be interest
ing to observe the effect of the new
sterling alliance on the price of the
dollar The latter has risen steadily
in Europe since the demise of the Lon
don Conference.