Evening star., 1941-04-28

one.
This spectacle OF destitute Bel
gium and its bulging purse of gold
is regarded by the Germans as a
demonstration of the penury of
standardized money. The profess
sorial group in government circles
here claims that the test Of any
money is its buying capacity, and
that, judged by this test, the days
of gold are finished.
These economic eyolutioniSts offer
as an ideal monetary system the
Schacht bilateral trading agree
ments to be expanded into a multi
lateral system, with the reichsmark
as the common denominator of in
ternational currency. Berlin would
be the financial capital of Europe
and the clearing house for all in
ternational transaction, where debit
or credit differences would be
liquidated by the Reichsmark
instead of gold, with Germany
acting as controller.
Opposed to this theoretical view
are the ma ajority of conservative
men in the National Socialist Party
who have had practical business
training and whose convictions have
been welded in the forge of COM
petitive experience. These men
believe that gold is still important
in international trade and can per-
form an important function,
although they say it can never
assume the controlling role it
played before 1918. It's significance,
they say, is as a Stabilizer of cur
rencies-the basis for settlement of
debit and credit differences-but
they do not believe that gold will
ever again serve as the broad issue
basis for currency.
In the same breath they are frank
in saying they can think of no sub
Stitute for gold in international
credit operations. The barter
foundation of German bilateral
trade agreements can have no
capacity for expansion, they con-
cede, but must be limited to specific
transactions like the trade of Ger
man agricultural implements for the
oil of Rumania. In such a deal
there can be no purchase without
an offsetting sale an export
counterbalancing an import. There
fore, no element of the Specula-
tive future can be admitted-the
transaction does not of its nature
permit the doing of business except
by matching goods.
This is a weakness and limitation
of all barter arrangements which
business trained men in Germany
frankly recognize. They agree that
the foreign trade they have per-
fected is doing business without
money and admit that without in
ternational money there exists no
opportunity for insurance against
foreign currency appreciation, such
as the hedging operations of the
gold standard days.
Then, on foreign exchange mar
kets the value of the ReichSmark
was every day registered in the
currency of every other country and
the German merchant could buy
New York cotton six months ahead
protecting himself against the rise
of American dollars in terms OF
German money before the delivery
date, and likewise safeguarding
against the decline of the Reichs-
mark compared with the dollar.
The United States, they point
out, is now the holder of 80 per
cent of the worlds supply, is still
accumulating, and soon there will
be little if any gold outside Of the
American Treasury vaults-a sit
uation which proclaims its own fu-
tility. How. they demand, can any
other country. even Britain, par
ticipate in world trade if gold is in
dispensable and we hold all the
cards?
See Two Courses Open.
There are, they say, only two
logical courses to follow in order
to Iberate our imprisoned gold ant
make it circulate in the arteries
of world commerce. One methoc
is for us to import more goods than
we send beyond our borders ano
pay for such essential imports II
gold. For even the United States
has not an economy Of autarchy
or a complete self -sufhciency ano
must shop abroad for such neces-
saries as tea, coffee, manganese, t1r
and rubber.
Germany has trade relations with
countries which ship these com
moditieS to American markets ano
the German suggestion is that the
United States in such countries be
substituted as q debtor to Ger
many. They say that in the East
Indies the United States buys tlr
and rubber, and Germany sells ma
chinery. An American importer Of
tin and rubber, instead of paying
his vendor in the East Indies, woulc
pav German firm which has
shipped machinery, and in execu-
ton of such triangular arrange
ments the East Indian dealer woulc
get German machinery, the Ameri-
can would get tin and rubber anc
the German would get the dollars
which he could exchange for gold
By this means a large supply Of
our stagnant useless metal woulc
become useful, unshackled and sci
free to work in the markets OF ths
world, to expand trade and 90 fortf
on a mission of peace in dispensing
prosperity and goodwill toward ben
efiting mankind.
Another proposal was that we take
our perplexing treasure and put
it to work in the reconstruction OF
war-wasted Europe where the need
will be vast not only for consumer
goods but in rebuilding transporta-
ton, bridges, harbors, canals, de-
molished factories, dwellings and
what not. + was candid in saying
that I thought this prospect would
be met by unreceptive silence among
my countrymen, who were warned
rather than encouraged by their in.
vestment experience in Europe af-
Il