The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-06-29

Scheme, provided the United States
and other countries in the sterling
block adopted it.
The currencies which have been
devalued could then be stabilized
Professionally and flexibly in rela-
ton to each other. The revalua-
ton Immediately would produce a
profit for the treasures of those
countries having an ample gold sup
ply, and this profit could be used
to stimulate purchasing power either
by expenditure on public work Or by
relief of taxation.
In all countries the operation
would at least enlarge the gold re-
serves of the central banks, and
thus render more possible the re-
moval of the restrictions on ex-
change.
THE plan offers the great advan-
- tage of satisfying the two
principal divergent interests and
views on which the conference is
divided and for all practical pur-
poses immobilized.
The actual devaluation would
confirm the psychological influence
now being eXerted on the commod-
ity markets by the hope and the
fear of g. rise in prices through
monetary action.
1t would put the seal upon the in
tention of the great financial powers
to raise prices, and that intention
ought, one might expect, to be dis
counted by speculation.
On the other hand, definite de-
valuation will at the same time in
dictate no less definite intention to
keep the rise of prices and the spec
ulation for that rise within clear
limits.
Thus it should lay the foundation
for a restoration of confidence in
long term investment. Moreover,
simultaneous devalution would make
it possible, without thus averting
the very real danger of competitive
currency depreciation.
II HAVE made some inquiries
Il among experts in delegations
which desire above all things to pro-
tect their own currencies by a |
Sterilization of the dollar and the
pound.
Naturally they do not like the
civ
force them to consider a devalua-
ton of their own currencies, thing
which for social and political rea-
sons they would prefer to avoid.
But I have found none among |
them who does not say that he
would prefer the quick sterilization
of definitely devalued dollars and
pounds to the uncertainties of cur
rency fluctuations under the threat |
of an underlined amount of devalua-
ton in the future.
Here, then, it would appear that
the plan offers possible way of
reconciling the divergent purposes
of the French and of ourselves by
achieving in one project the double
result of raising prices and stabiliz-
ing currencies.
THE Keynes plan deserves the
Il most careful immediate consid-
Grafton by the President and his |
advisers. 1t has the appearance
of dealing directly both with the
object of the conference and with
the principal conflict which thus
far has devided and confused it.
The plans would require consider
able technical competence to set it
up properly But it is not a hope
lessly complicated scheme requiring
prolonged negotiation among many
governments
If adopted, there is reason to
hope that this plan would deliver
out of the confused debate a de-
cisive achievement.
1t is a daring proposal. But any
one who here in Europe observes
the appalling distintegration which
is creeping westward must realize
that the greatest risk of all is to |
drift and do nothing.
Yet the plan is not the happy
go-lucky panacea of an amateur. 1t |
is the proposal of the leading eco
nomic thinker of our generation.
Keynes speaks with authority. |
The events of the last fifteen years
have demonstrated dramatically that |
his economic insight is more truly
prophetic than that of any other
living man.