Evening star., 1934-11-13
move FOR STABLE
CURRENCY IS SEEN
Removal of Restrictions on
Foreign Exchange Shows
Confidence.
BY DAVID LAWRENCE.

Removal of restrictions on purchase
Of foreign exchange is always the
forerunner of an effort to stabilize
world currencies.
The action of the Treasury Depart
Inent in cutting out all red tape IN
terfering with the export of American
capital to foreign lands-with the
possible exception of gold and silver
metals equivalent to an announce
ment that the whole world must here
after regard the American dollar as
unafraid of raids from spectators or
other untoward influences.
50 Simultaneously with the statement
from Washington Of a removal of ex-
change restrictions came London dis
patches predicting reduction of the
Bank of England's bank rate. Eng
land doesn't want boarded capital, but
wants it distributed in worldwide
trade.
Think and Act Together.
This would indicate that Great
Britain and the United States are
thinking and acting together-at least
through their banking systems-in or
der to create a stable monetary sit
uation.
The practical effect Of Americas
step in removing exchange restrictions
is to enable any American to send
his money abroad in unlimited quantl-
ties and to buy whatever he likes In
other countries. This will tend to
show the world that any danger Of
a flight of capital from America, due
to imitation fears, has been averted.
The feeling here, of course, is that
the recent elections demonstrated a
united Nation behind the President
and that Europe and Latin America
must realize the time has come for
the reopening of foreign trade by a
gradual removal of the barriers which
have thwarted commercial intercourse
for the last year and a half.
Some hint of the administration s
desires was given in the speech Of
Secretary of State Cordell Hull 10 days
ago before the National Foreign Trade
Convention, when he said:
Commerce has been strangled by
quotas, embargoes, exchange restric-
tions and other oppressive trade meas
ures. These trade deterrents are re-
sponsible for world trade, comprising
exports and imports, having a value
of S68,000,00O, 900 in 1929 having
shrunk to $24,000, 100000 in 1898.
Meanwhile the share of the United
States has decreased from $40, ,000,-
100000 to $2,5OO,0 900.
Urges Quotas End.
Elm the light of such appalling loss,
how can any thinking person, desiring
his own or his country's prosperity,
fail to search out the causes of the
disaster and seek to remove them?'
Mr. Hull went on to advocate a
cessation of the quota system of regu-
lating the amount of export or import
trade. 1t is understood that France
which began the quota method, is
giving serious consideration to its
abandonment. This may mean that
the United States, by removal of ex-
change restrictions, is making a ges-
ture which will permit other coun-
tries TO follow.
1t is also important to refer now to
q paragraph from the speech of George
N. Peek, special adviser to President
Roosevelt on foreign trade, also de-
livered before the New York conven-
tion, in which he declared the most
powerful factor in congesting interna-
tional trade Is the exchange restriction
imposed by 35 nations. He said:
saTIloa De hot 1ft-ia ne
are using the money due exporters,
without their consent and against their
will, and that payment is being made
finally upon the terms of foreign gov
ernments, at their discretion, often
without interest, and with charges and
discounts fixed by them or at best
regulated as a result of reluctant
agreement.
In the case of countries exercising
exchange controls against us, the
satisfactory solution of the exchange
problem should be made a prerequisite
to the negotiation of any general trade
agreement"
America Begins Cleanup.
Mr. Peek thinks the Government
might be compelled to handle all ex-
change with selected countries at a
reasonable charge. But whatever the
solution may be as to particular situ-
ations, the fact remains that America
has made start in endeavoring to
clear up exchange restrictions, and
that the countries which insist on
maintaining such restrictions against
us may find themselves the object Of
special treatment in trade relations.
The whole question Of reciprocity
and tariff barriers is being worked
out slowly by the Department of State
with some Of the smaller countries
In the hope Of developing a formula
that will have broad international
significance.
Copyright. 1o34)