The Daily Alaska empire., 1936-10-17
Before StabiliZatiOn
(NeW York Timesl

(New York Times
 For the last two or three years it has been the conviction of increasing number of well-informed persons that permanent stabizaton of the worlds cunencies could be expected until the remaining nations in the gold bloc"-France Switzerland and IIolland-had devaluaed This step has now been taken in a most dramatic manner The fears that were sometimes entertained that this devaluation might be followed either by general policy of drift ter by an outright currency have been dissipated Iby the announcements of France, Great Britain and the United States the three most influential countries
 that they intend to consult and cooperate closely for the purpose of re-estabishing Tasting equilibrium and relaxing trade barriers.
 An event that only few weeks ago seemed to fir- ancial commentators little than a pous hope has occurred It is step forward of the first impor- t2nce But any realistic view must recognize that many obstacles must still be hurded before secure and lasting stabilization of the worlds currences can be achieved
 Among these, two of the most prominent are tar ifs and war debts Although Secretary Hull in spite of partisan attacks has made promising beginning jn whiting down tariffs the United States is still the greatest offender in this respect particularly in view of its creditor status Our debtors be vnced that they can pay us in future in goods, and that they will not have their gold drained or their currencies undermined through inability to do so Uncertainties regarding the war debts must in time be cleared up: this happen only if our debtors reopen negotiations and if Congress consents to very substantial scaling down of the present nominal amount of the debts.
 From our side we shall give other nations greater assurance of the permanent stability our present dollar if move definitely and convncinglv toward a balanced budget. Despite great financial strength six successive years of unbalanced budgets during the last five of which expenditures have been running at rate more than double receipts do not breed confidence in this respect Again to carify our own monetary policy ought to repeal our fool sh and highly expensive Silver Purchase Act
 The British, from their side will have readjust the notion that has become popular with them in the last few years that their gains from depreciation have been owing to currency management" rather than to the extent of their depreciation As matter of fact their gains have been greatest since the pound has been maintained in rather fixed relation to the dollar, itself now a defacto gold basis If the British indeed, had themselves maintained a golo currency Of the same type in the last two years, there be little doubt that they would have received more gold and should have received less while great deal of injurious uncertainty would have been avoided.
 The obstacles to permanent stabizaton that may develop on the French side have not yet become clear The French Government has been suggesting some measures that would offset of the chief advan- tages of devaluaton. sliding scale for wages and salaries based changes in the cost of living for example if the Government had insisted upon it. would have tended to offset the advantage of de- valuation in reducing costs in relation prices Some degree Of retail price control the part of the Gov ernment would probably not be harmful but any more general effort to prevent price increases would be in fundamental contradiction to the very results that devauation is designed to bring about.
 These obstacles to a permanent stabization are far from insuperable do all of them have to be eliminated before at least provisional international Sabilization agreement can be reached But ntelli- gent efforts toward removal of these obstacles be preceded by candid recognition of them.