The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1945-03-19
TODAY and TOMORROW
By WALTER LIPPMANN

Dy WAL z
Those who are supposed to know
about the Breton Woods proposals
are divided. Thus the American
Bankers Association and the New
York State Bankers Association
are leading the opposition. They
speak with the authority of bank
ers who have a long experience in
international finance, and the posi-
ton they have taken reflects the
views of Professor John H. Will
iams, of Harvard University, an
expert whose views command great
professional respect. But not all
bankers, not even all international
bankers, agree with them. And
among the recognized experts in
this field, it is fair to say that the
majority are with varying degrees
Of enthusiasm and hopefulness for
the plan.
Now when technicians disagree,
the layman must ask himself
whether the issue is at bottom
technical, and beyond his under
standing. There are, it seems to
me, strong reasons for thinking
that the issue does not lie in the
field OF technical currency prob
lens but in that of the national
policy of states, and that it has
to be decided not by bankers and
expers as such but by men of
affairs.
II we compare Breton Woods
with the counter-proposal of the
two bankers associations we shall
find, l believe, that there are two
different methods intended to &C
complish the same result. Both
assume that it is desirable to re-
store system of international
trading through markets which
shall be as free as possible and by
means of currencies which shall
be as stable as possible in their
rates of exchange. Both agree that
to do this it will be necessary for
the United States, as the great
credito, nation, not only to invest
abroad continuously over a long
period of time but also to make
short and intermediate loans to
stabilize, or at least steady as
against arbitrary alterations, the
rates of exchange.
The argument between the two
bankers associations and the sup
porters of Breton Woods is con-
fined to the manner in which these
loans are to be made.
For it is agreed that long-term
loans to be invested in develop
ment projects abroad shall be
made according to orthodox bank
ing principles-that is by compel
ling the borrower in each case to
prove his redit-worthiness ito
bankers. The question at issue is
whether the sterilization loans
can and should also be made in
this fashion, whether governments
will come one by one to a bank,
Will let it pass upon the soundness
OF their taxes, their expenditures,
and the national and social poll
cles which their budgets reflect.
The two bankers associations
think that such system, which in
fact existed for generations and
during the '20s after the other
war, is preferable, and that the
other nations can, if Congress SO
DEGREES, be compelled to return to
1T. The delegates at Breton Woods
represented existing governments.
They took a different vieW-that,
whether or not the old relation be-
tween governments and interna-
tlonal bankers was better, the ma
lions today will not return to it,
and that they cannot be compelled
to return to it because they do not
have to.
Breton Woods recognized that
Sterilization loans touch the sensi-
s-'> AA~A W VI IlIOoCIu
their social policy. their employ
ment policy, their wage and price
levels which, second only to politi-
cal independence, are now re-
garded in all popular governments
as the very essence of their SOW
ereign control of their own affairs.
which governments could come
SO for sterilization loans they pro-
poseo not a bank but fund, to
not as a borrower to a banker who
may judge their affairs but-as
members Of an association who
have the right to draw a fixed
amount provided they could show
they were observing conditions to
which all had agreed in advance.
In such an association they were
prepared to open their books to
one another. The bankers declare
mat this is contrary ito the usual
lending practice" And so it is.