Evening star., 1935-03-11
STABLE CURRENCY
. HELD DGREAT NEED
international Sterilization
Held Most important to
Cure Troubles.
BY MARK SULLIVAN.


hooey-exchanged their angry ameni-
ties, in which Congress received peti-
tons signed by some 100000 people
demanding thing called the Town
send Plan" in which Donald Rich
berg praised NJ R. A. and Senator
Borah denounced it-within that same
week an American outstanding in his
knowledge of world affairs, Mr.. Walter
Lippmann. wrote:
THE signs are multiplying that the
| stage is set for an event of worldUid
importance and of unpredictable con-
sequences -" There is no reason to
become excited, but there is every
reason for fixing attention upon the
situation and for preparing to
meet it,"
Sterilization Held Need.
Never since the depression began,
indeed, hardly ever since the great
war ended 16 years ago, has there been
such agreement by thoughtful persons
about what is the one most important
aspect of present world conditions. If
benevolent genie out of the Arabian
Nights" should ask the statesmen OF
the world to choose one gift, and were
| to promise to cure the worlds troubles.
provided the right gift were chosen,
the one that practically every ade-
quitely equipped statesman would
choose would be international stabii-
Zation of currencieS.
To perhaps nine readers out Of ten,
international stabiliZation" is a mere
phrase, and a dull, forbidding phrase
at that Perhaps not one reader out
of five even knows the commonplace
fact underlying the present confusion,
namely, that for a hundred years. one
British pound was equal to $4.86 with
other currencieS of other nations
having similarly fixed relations to each
other). That ancient flxity Of rela-
tion between pound and dollar was as
stable, became as much taken for
granted, as the very air We breat. Few
realize that this fixity has now become
floating thing. that during the past
two years the British pound has run
as high as s5l8 and as low as 1898,
and that other currencies have bobbed
up and down in relation to each other
like sliding sticks in the hands of a
boy Fewer yet realize the conse-
quenceS of this, including consequences
which affect the personal fortune
of storekeepers in Fargo, farmers at
Wichita bricklayers IN Hartford, car
penters in Cleveland.
Just because fiuctuation of curren-
cies is a subject complex and Oh
scure is one reason that makes REM
edy of the condition slow. II this
were q matter of wage rates or of
prices of familiar goods, there would
be agitation in every country, pressure
on the statesmen of the world Here
! in America it would be more the sub
ject of debate than N. r. A. or work
relief" 1t would occupy first-page
headlines in the newspapers instead Of
being confined to few lines in cryptic
Technology on the financial page and
very tnfrequent editorial in a very
rare newspaper.
I Like Bridge Player.
Seeking a device to make the sub
ject clear, hit upon this: It is like
a bridge player making his bid and be-
ginning to play his hand with the
cards having their regular values in
relation to each other, but, in the
midst of playing his hand, the ace
suddenly falling below the king in
value, and the other cards changing
their relation to each other with Sim
ilarly unpredictable eccentricity. In
business. the effect of currency fiuc-
tuationS is like the following. which
is not a typical transaction, but may
serve as an illustration: A manufac-
| turer in Battle Greek produces an
article which costs him 500 to make
He wishes to sell it abroad at $l05.
But at some point the Sl05 must be
changed into. let US say. francs. At
the time Of shipment, sl05 may equal
1900 francs But by the time pay
ment is due, or the transaction COM
pleted. 1000 francs may equal only
s75. The manufacturer. fearing this,
refrainS from attempting foreign busi-
ness. This Illustration applying to
America and France is duplicated to
one degree or another among all the
countries Of the globe
If now the reader. even if the reader
be a merchant in Des Moines who
never has a transaction outside Iowa
if he desires to know how important
international trade may be to him,
there is an Illustration that saw used
not long ago. Two quite able men
were arguing about how important
foreign trade is to America. One
declared that never in the best of
times was our foreign trade more
than 10 per cent of our business at
home. Therefore, said this arguer.
America need not be greatly crippled
by reduction Of foreign business. The
other arguer took from his pocket a
watch and said: You see this watch?
Well. the handspring Of it Is only
10 per cent Of the whole of it," It
is true both arguers over-stated their
respective cases, but the illustration
of the watch has much weight II in
America 80 per cent of our people
get their livelihood from home busi-
ness. and 10 per cent from foreign
business. the idleness Of the 10 per
cent, flooding back over our economy
as q whole, causes dislocations which
result in the idleness of more than
10 per cent.
May Arouse Prejudices.
This allusion to foreign trade may
be unfortunate to introduce here, for
it may arouse prejudices associated
with the tariff. Sterilization Of cur
rencies has an importance Of its own.
an importance at this moment
transcendtng that Of tariffs-tran-
scending, literally anything else
The reason it has become imme-
diately important is this: For q year
or more the range Of fiuctuation be-
tween pound and dollar was relatively
narrow, from $5 to $4.85. About 10
days ago the pound began to go down
markedly. falling as far as $3.7l. At
once the world is alarmed lest It 60
farther, lest the disparity between
the pound and other currencies be-
come greater yet. BY this apprehen-
sion is trade between nations set even
farther back than before. The alarm
takes an additional form. FAN in any