Evening star., 1944-07-02
Go-It-AIone Policy
Facing q New Test
Monetary Conference to Show
Extent of Our Cooperation
By O,Oen L. Scott.


By Oven L. Scott.
There now Is every sign that the
United States is ready to accept q mild
form of world political organization.
Both Republican and Democratic parties
are agreed that this country should be-
long to some kind of league Of nations.
At the present time, however, there
Is no sign that the United States is
prepared to implement that agreement
with policy OF cooperation in dealing
with world economic and financial
problems. In that field, in the field Of
aviation policy, investment policy,
shipping policy, money stabilization
policy, the now obvious American tend
ency Is to 60 it alone.
That tendency is about to be put to
first real test on the issue of postwar
stabilization Of world money values.
This issue will emerge from the world
conference on money now opening at
Breton Woods, N. H. 1t win revolve
around plan for stabilization of cur
rencies that already has the approval Of
experts Of "a nations.
Although the experts know what they
would like to do and have agreed upon
q basis minimum of what they think
| will have to be done to avoid currency
chaos after the war, they have not
| succeeded in selling their ideas either
to politicians or businessmen or hnan-
cial interests either in the United States
| or Britain. AS result, the outlook for
| final agreement on anything substan-
| tial is not bright.
The underlying difficulties In the way
| OF acceptance Of any rounded plan for
currency stabilization by either the
American Congress or the British Par
lament are two.
First, the British fear q tie to any,
thing that even looks as If 1t might
have tie to gold, or to any plan that
| might force Britain to 60 through a
| postwar deflation. The British fear
that after postwar boom while pent
up needs are being filled the United
States is likely to permit a deflation
and depression. They want to try to
tnsulate themselves from the effect of
any such development
Second, the American Congress and
| American financial interests are afraid
| that any world plan will involve an
underwriting by this country of lot of
weak currencies of other countries
They insist that before there can be
currency stabilization the other coun-
friac nf tho ,,ct
cial houses in order by balancing bud
gets and by restoring some balance in
| their foreign trade. Their idea Is that
the world will have to 60 through a
period of belt tightening in order to
get over the effects Of the wartime
spree.
Under these circumstances, the prob
lem of obtaining final agreement on
details of any plan that Congress or
Parliament will accept is very difficult.
The need for some kind of plan Is
not disputed. After the last war the
world went through a whole series of
financial crises. This country and
Great Britain went back to the formal
| gold standard. The dollar and pound
were stabilized. The French went
through periodic devaluations. The Ital-
tan lira was devalued. This country in
early postwar years poured out about
$4,000, 100000 in an effort to bolster
world currencies, but in the end the
was devalued
After this war the currency problem
of the world will be many times more
acute than it was after the last war.
All OF Europe will be in chaotic state
financially. The same is true of all of
Asia. The British will have a very diff
cult financial problem. The United
States with a s25o,o0o, 100000 debt will
not face such simple problem, either.
Russia will continue to operate its
socialistic state in which money and
debt and property ownership are not so
much Of a problem
1t was to deal with this tangled situa-
ton that the experts devised their plan
Tor use in trying to stabilize currencies.
This plan calls first of all for post
war adjustment of currency values in
| relation to one another, taking into ac-
| count the effect of war on currencies.
1t then calls for what might be called
world pool Of currencies, amounting
to $1,000 600 900, into which each CO.
| operating nation would place a quota of
currency or gold. A nation, Britain for
instance, If in need of dollars to pay
bills in this country, would exchange
| pounds for dollars in effect. If Britain
had $3.50 100000 in the fund in form
OF British pounds at the exchange rate
agreed upon, it could draw those dollars
and an added sl250,oO0OOO in addition
before being called to account.
Managers of the international money
pool could bring pressure on nations to
force them to correct trades practices
that might be undermining their cur.
rencies. The managers, however, could
not prevent any nation from devaluine
Its currency up to 10 per cent without
any warning or from devaluing further
after talking the matter over. Any
nation could withdraw from the fund
| merely by giving written notice.
1t Is recognized by the experts that
their whole plan is rather tentative and
weak. 1t also is recognized that If this
plan OF money sterilization is to work.
! 1t must be bolstered by more am
bilious program involving a world in
veStment bank which will sunplv th.