Imperial Valley press., 1936-10-14
By DIR. JULES 1. BOGEN
Editor, New York Journal
of Commerce

NEW YORK, Oct. IA. U.P)-The
international currency stabilization
agreement announced by Secretary
Morgenthau three weeks ago in
vague terms has now been sup
plemented by a tripartite arrange
ment to ship gold when necessary
to maintain monetary stability.
The announcement of this phase
of the agreement will answer many
doubts raised in recent weeks
as to the real significance and
value of the international stabiliz-
alton pact. 1t should also
strengthen confidence in the pros
poets for a real effort by leading
countries to foster a world trade
revival on the basis of stabilized
currencies and lowered trade bar
rierS.
The international currency sta
bilization agreement, it is true, re-
mains far from definitive in char
acter. Secretary Morgenthau, who
has insisted right along that the
United States is itself on a "a
hour" basis in currency matters,
has applied the same unfortunate
designation to the new interna-
tional accord. But the dollar has
been stabilized in fact since Janu-
ary, 1884, and if the international
agreement works as we'll, it may
become a real nucleus around which
to effect world wide monetary sta
bilization.
TIE decision to permit shipments
of gold between the three coun-
tries will re-astablish the yellow
metal as a medium for settling in
ternational balances. 1t will not
act as an actual medium of ex-
change or as a basis for the regu-
lation of a nations currency and
credit system, however.
No Big Effects
The immediate practical effects
Of the new agreement are not
likely to be extensive. The an
nouncement gives some further
encouragement to the repatriation
of European capital now placed
in Britain and this country While
some factors tending to SLOW up
the return flow of funds to the
continent remain, such as inter
nal political difficulties in several
countries, fear of taxation of eval-
uation profits and the sharp rise
in security prices in the United
States, the most important influ-
ence holding up capital repatria-
tion has been the necessity for
completing the mechanics of de-
valuation, including the proclama-
ton of new gold PARTIES, in France,
Holland and other gold bloc coun-
tries. Until this was done those
who had exported capital from
those countries felt it was prema-
ture to bring it home, for the most
part An important further step
has now been taken to complete
| these formalitieS.
The lcng-term implications are,
however, by far the most impor-
tant. 1t will be remembered that
after the Stabilization of the Ger
man mark in 1924, through adop-
ton of the Dawes plan, a world
wide business revival set in which
continued, with but minor inter-
ruptions, until the latter part of
1929. The new currency pact, If
adopted generally by other coun-
tries, might well bring about a
similar result. Several countries
have already lowered tariffs and
libaralized import quota restric-
| tionS, reflecting elimination of
the fear of currency depreciation
warfare.
Commodity prices will naturally
tend to be firm or rising because
of the increased demand resulting
from internal and external trade
revival in various countries.
Monetary stabilization further
more, both implies and facilitates
the settlement of defaulted inter-
| national 0pbtS as we'll as a re-