Evening star., 1943-04-05
orgenthau Reveals Plan to Put World Back on Cold Stunt
$5,000,000,000
International 4
Fund Proposed
Contributing Countries
Could Borrow to
Stabilize Currencies
By the Associated Press

Sl01IJAS Nv ISuStOS
By the Associated Press.
Secretary of the Treasury
Morgenthau disclosed to an ex-
traordinary session of three Sen
ate committees today that the
administrations plans for post
war currency stabilization in
clude partial return to the gold
standard for most of the nations
Of the world.
This would be accomplished. he
said in a statement read to a closed
session of the Foreign Relations
Banking and Postwar Economic
Committees. by an agreement
among the participating nations
fixing the value of currencies in
terms of gold.
The Treasury proposal as outlined
by the Secretary involves the crea-
ton of an international stabiliza-
ton fund and an agreement among
the participating nations not to
engage in competitive depreciation
OF tneir currencleS.
The purpose of the fund would be
to promote the maintenance of cur
rency stability.
international Board Would Govern.
This stability would in large
measure be secured, the Secretary
said, by fixing the value of currency
in terms of gold. and by providing
that changes could not be made
without consultation with other
members. an arrangement similar
to that of the tri-partite agreement
negotiated among France. Great
Britain and the United States in
1886
Control of the stabilization fund
would be in the hands OF an inter-
national board appointed by the
governments of the member coun-
tries.
The Secretary said the Treasury
feels that international currency
stability is necessary to reconstruct
ton in postwar and resumption Of
private trade and finance.
1T is generally held that this
formida BILE task can be successfully
handled only through international
cooperation" he added
Would Not Back Internal System.
Senators said the plan, the out
line Of which already has been COM
municated to "a nations, involves
the establishment of an interna-
tional fund from which contribut-
ing countries could obtain loans to
stabilize their currency for world
trade purposes. but not for internal
support of their monetary system.
Secretary Morgenthau declined to
discuss the plan after the closed ses-
sion broke up, but one OF the more
than 20 Senators present said it was
his understanding that the primary
capitalization of the proposed in
ternational fund would be $5,O00.-
100000.
Signatory countries would contri-
butte to the capitalization in pro-
portion to the amount of gold they
held and the amount of their in
ternational trade balances. No
country, however. would have voting
rights exceeding Is per cent, despite
the size of it's contribution to the
capital
AS outlined by the conferees, the
plan would involve pegging all cur
rencies to gold at fixed legal value
and stabilizing the exchange so that
the value of the dollar would be
the same in all nations entering the
agreement These nations currency.
likewise. would have a fixed and
relatively unvarying value in the
United States.
International Currency Seen.
The objective of the proposed sta
bilization plan, Secretary Morgen-
thau was reported to have told the
Senate group, is to provide a sta
bilized exchange to facilitate post
war world trade
Some members said it was their
understanding that an international
currency might be established, with
the 'unitas." valued at about $40,
set up rs the standard medium of
exchange. 1t was emphasized. how
ever. that the plans are tentative
only and that final details of the
program would await suggestions
from the "a countries invited to
contribute ideas.
There was no definite statement.
some members said. whether the
Treasury is thinking of calling a
world monetary conference in the
near future.
Byrd Impressed by Plan.
Although the plan was necessarily
nebulous in some Of its aspects
Senator Byrd. Democrat, OF Vr-
ginia said he was impressed with
what ne called the soundness of the
principles outlined.
Il am in favor of a sound plan
to stabilize international currency
for think that would be the best
thing we could do to facilitate world
trade" he told reporters.
Senator johnson. Democrat, of
Colorado said he regarded the sta
bilization of postwar world trade as
absolutely necessary commenting
that plan OF the nature outlined
by Secretary Morgenthau would
help"
However, Senator Shipstead. Re-
publican. of Minnesota said he
wanted to know whether the pro-
posed international fund was going
to facilitate trade or whether it
might be used to impose economic
sanctions to control trade"
Shipstead Not Satisfied.
I'm the last analysis" he declared,
~the only thing that can stabilize =
tSee GOLD, Page 2-X0