Detroit evening times. (Detroit, Mich) 1921-1958, 1944-08-01

money, Which II ldhtll Wy VIC
banker and loaned TO bring a
profit TO the institution. Any
comparison Of that formula to
what -Aet-up- BRETON
Woods is hum orouS if not
ironlcal.
CERTAIN general standards
~ for the loans were fixed, but
these were the easiest possible
standards naturally They were
not the standards Of banks for
commercial loans
What these standards are
will become fully apparent only
as the loans are made and the
complex workings Of the agree
ment are interpreted by the
heads of the institution.
But the whole idea is to pro-
mote foreign rehabilitation and
development mot TO get the
money back so the standards,
you may be sure, were fixed ac-
cordingly
What the realistic Russians
thought of this is apparent in
their actions. They fought for
the lowest possible part in the
bank and the best part they
could get in the exchange ar
rangemcnt. =
PARTICIPATION i'm the bank
L obviously is a liability. But
participation in the exchange
agreement will give the Russians
more dollars and more pounds,
and also give them more power
in the world trade voting. as
voting power over the fund is to
be based on the extent of mon
etarY parlcipation.--4
In fact the observers thought
the Russians did The best in The
diekerine- They finally m 2
into the bank at the ratio as
signed hig her than tn v
wanted. but not our first figuret
only after we agreed TO increase
our own participation.
The British remained pretty
much in the background. Lord
Keynes (author of easy-spend-
ing policieS) ran the bank end
of the conference, but held only
one press conference.
Our Harry White ran the
monetary exchange end, and APP
peared as front man for the
gathering.
The Latin Americans handled
the miscellaneous part and
Mexico got in a few lickS for
silver. The LatinS had 10 out of
the 40 odd nations on the
ground-nearly half.
WILL the exchange agreement
w stabilize al the eXiSting
level. or at fair and just level
AS every one wishes? 1t will
have trouble.
The agreement did not fix
rates. We have already fixed
some rates for ourselves, the
invasion rate of a 2-cent franc
and a l-cent lire
In the negotiations each coun-
try wanted TO keep its rate as
high as possible against the
dollar and thus China achieved
the prospect Of Scent yuan.
That is politically friendly
rate, not an actual rate.
One expert recently out Of
China said the true internal
rate of the yuan runs anywhere
from 500 TO 1900 to the dollar.
The indicated rate of 5 cents in
the agreement VIII be difficult
10 sustain. Even 2 cents, some
say, might be difficult.
4 CTUALLY under the agree
"a ment present rates of exc
81 change are net to be frozen, but
will be fixed from time to time
in the future under the princi-
pies laid down. principles which
are more or less geared to
existing rates.
The defect Of the fund is that
the contributions 10 II are 10 be
largely in the currenCies Of for
eign nations. the worth Of which
in the future may depend on
anything else but the controls
of international exchange agree
ment.
Furthermore il prevents coun-
tries which might pay us in
gold, and have some gold with
which TO pay. from using II
France, Latin A m erica,
Russia
The conclusion must be
reached, therefore. that this
exchange agreement does not
itself stabilize exchange but
merely furnishes an S.. 10000
900 fund. through which II may
be- done As for Tho so t0ft 0f1N