The Daily Alaska empire., 1944-05-15

monetary systems and stable exchanges. Unfortunate ly, the proposal announced for s8,oO0ooo 900 international sabilization fund misconceves the real nature of the problem to be solved
 The text of the joint statement begins with the assertion: "It is the consensus of opinion of the experts of the United and Associated Nations who have participated in these discussions that the most practical method of assuring international monetary cooperation is through the establishment of inter national monetary fund" On the contrary, the most practical method of assuring international monetary cooperation is through sound economic, budgetary, credit and currency policies within each nation If these exist, huge international stablzation fund will be unnecessary. If these do not exist inter national monetary fund matter how large will be worse than ineffective It could not in the end SUD- port unsound currency; but in attempting to do it would drain part of the of the countries with sound currencies To that extent it would make it more difficult for them to maintain their soundness.
 A huge world stabilization fund of the type now proposed is no more than method by which the nations with strong currences make loans to the tons with weak currencies. Each nation will be at any moment net creditor net debtor to the fund To the extent that the loans bad the net creditors will be the net losers. When nations wish to borrow abroad through private international channels, the private lenders, risking their own funds, judge the probability of repayment with purely business eye They sometimes agree to make loans only if the borrowing country will change its economic financial policies in this respect that. Now, it is thing for the private citizens indicate distrust of tons currency; it is another thing for foreign gov ernments do It is also embarrassing for foreign governments, though acting through general fund, to demand minimum internal financial reforms within nation before they will lend that nation money An international stabization fund could increase the of international friction rather than reduce them.
 The principal need for world currency stabization sound internal policies in each country, not more international machinery. Each nation must want stable currency enough to accept it's necessary sequences The greatest single contribution that the United States could make to world currency stability after the war would be to declare it's determination to stabilize it's own currency. It could do this by balancing the budget and by announcing that the dollar no longer on a twenty -four-hour basis and subject to every runor, but firmly anchored to a fixed quantity of gold This would in turn give anchor to other nations.
 Other nations also would have to give up their faith internal imitation for their ills. Our correspondent reports the existence of an in fuentia body of opinion in Great Britain that eur rency stability would be gained at too high cost if the supply of currency be tied to rigid international standard when the internal situation demands policy of expansion" But nation cannot currency stability and currency imitation at the same time. it expect other nations to under write its own expansonist policies by giving heavy drawing account on fund to which they have con- tribued Each nation should give up the fallacious idea that it is to its own advantage to devalue its currency and that it is hurting itself and conferring favor on other nations when it does not Each nation should give up the falacous idea that it gains when it erects huge barriers to imports and loses when it lowers them; that it gains when it blocks its currency forbds its citizens to export gold capital or credit Each nation should give up the fallacious idea in short that it gains when it makes economic upon it's neighbors.
 Not until this theological reform is achieved will | c,lrrences he stable iS not achieved inter national stabilization fund must eventually break down. If it is achieved, complicated international machinery or huge funds will not be needed.