Evening star., 1943-04-08
World Financial Stability

Secretary of the Treasury Morgen-
thau's plan for postwar currency
stabilization is an event of great
Importance. Its significance lies, not
so much in the specific details of
his proposals, which are admittedly
tentative, as in the fact that this
Government is taking vigorous in
ltlatlVe for the establishment of a
postwar economic world order based
on international cooperation.
The Treasury's blueprint has al
ready been submitted to the entire
membership of the United and AS
soclated Nations, which have been
invited to confer as soon as possible
IN order to lay the foundations for
the project before the close of the
war. Thus far, ten replies have
been received, all highly favorable
IN tone. Furthermore, 1t should be
understood that the British Treasury
is working along parallel lines and
has evolved its own plan, framed bv
the eminent English economist, John
Maynard Keynes. Though the two
projects vary considerably, they have
the same basic objective and are not
mutually exclusive. There is thus
every reason to believe that they
can be harmoniZed Obviously, the
two most economically powerful
nations must work together if world
reconstruction is to be achieved.
The heart Of Secretary Morgen-
thau's proposal is the establishment
Of an International Sterilization
Fund, with at least $4,000 900 900
capital, Of which the United States
would contribute about $4,000 .OOO.-
900, the amount of our present do
mestlc stabilization fund It's pri-
mary object would be to stabilize the
foreign exchange rates Of national
currencies, involving the use of an
international token based on gold
and known as the Unitas General
currency stabilization is regarded by
our Treasury as necessary to avert
what Secretary Morgenthau describes
as the threat of International
monetary chaos at the end of this
war"
No informed person can deny the
likelihood of general breakdown
of the worlds economic life unless
intelligent. concerted measures are
taken to avert it. We have already
had a tragic preveW of what will
probably happen by what actually
did happen during the tragic decade
between 1929 and the outbreak Of the
present war. Indeed, the entire
lnter-War period from 1918 to 1899
was one of accelerated degeneration
in world economy. The century of
relatively peaceful stability between
Waterloo and 1914 witnessed the
evolution of a world wide economic
system under which international
credit, investment and trade could
develop a an unprecedented rate
This system, though unplanned and
regulated by the automatic yardstick
Of gold, was extremely delicate and
complex. The First World War
smashed that complicated framework
as though with trip hammer, and
no real effort was made to recon-
struct it or create something new
to take its place. Left to the play
Of blind economic forces, the world
sank lneXorably into a welter of de-
preclated currencles, debt defaults
and declining international trade.
The present war will produce the
same results on an even worse scale
If remedial measures are not taken,
and taken in time. The starting
point is undoubtedly international
currency stabilization. Our Govern
ment is thus obviously beginning the
process Of world reconstruction at
the vital end