The Daily Alaska empire. [volume] (Juneau, Alaska) 1926-1964, 1943-10-27
The Gold Standard
New York Times

New York Times
The Guaranty Trust Company in its latest
monthly bulletin, comes out boldly in favor of a
restoration of the free gold standard as
possible after the close of war TT belief,
declares that no method of sterilization yet devised
on suggested is so sound easily operated the
international gold standardwith free coinage of gold
free markets annd private ownership of gold, and
currencies freely convertible into gold, both for
domestic and shipment abroad"
1t is important that this view should be re-
asserted boldly and unequivocaly at this time 1t is
in essential agreement with the proposal last spring
of winthrop w Aldrich chairman of the Chase Ma
tional Bank that at the earliest possible moment a
free dollar" be established in the postwar world
The same proposal made recently by the economic
policy commission of the American Bankers Associa
ton: The first requisite for any genuine progress
toward sterilization is stable dollar free OF all
exchange restrictions dollar in which the world has
full confidence
The A. B. A. commission went on to declare that
he second step should be establish rates between
the dollar and the pound sterling While the Guar
anty Trust does not go the question of the relative
rates to established it goes farther than the A. b. A.
commission in recommending the restoration of the
gold standard for the whole worldexcept that where
abnormal conditions may make immediate return
to the free gold standard by nations impossible
suggests that such nations could resort temporarily
to the gold exchange standard whereby countries with
inadequate gold tie their currencies to those
It has become fashionable to speak of the fail
ure of the gold standard" The Guaranty Trust
points out in reply that the real failure has been that
OF credit structure overexpanded either by unsound
Government policies by general excess OF OPP
trnism. The bank admits that many conditions are
needful to keep the gold standard sound balanced
budgets, reasonable tariffs and trade regulations,
avoidance of central bank and Treasury operations
that interfere with the price reactions essential to
the operation of the gold standard and, in general
governmental policies that promote business con-
fidence instead of destroying it. 1t adds that II such
sound policies followed the gold standard can work
if such policies are not followed international trade
and finance will break down under any conceivable
system"
These positive recommendations in themselves
point almost as clearly could any detailed analysis
to the fundamental weaknesses of the Keynes and
White plans for exchange stabilization put out on
behalf of the British and American governments 1t is
not merely that these plans needlessy elaborate
and complicated; it is not merely that they would
involve the making of bad loans without proper
controls from creditor debtor countries it is not
merely that they would put the values of all cur
rencies at the constant mercy of group of nerna-
tonal Their great weakness is that they
would lead on much larger scale, to the very evils
that followed the last war by providing artificial
support of foreign exchanges without the correction
Of the fundamentals AS Benjamin M Anderson has
put it ITO peg the foreign exchange rate without
correcting the fundamentals is merely to mask the
symptom and TO let the disease grow worse.