The midland journal. (Rising Sun, Md.) 1885-1947, 1945-04-13
Breton Woods Conference Laid Groundwork
For Stable International Monetary System
U. S. Postwar Exports
Depend on Soundness
Of Foreign Finances
BY WALTER A. SHEAD
WNU staff Correspondent.

WNU Dthu COfIeSpOnueuts
Stripped of all technical YER
biage, the proposals agreed up
on by A United Nations at the
Breton Woods conference and
which are considered an essen
tial part of the world peace plan
to be approved at San Francisco
April Is, are designed to
1.-Set up an international none
tary fund with working capital sub
scribed by Al nations in gold and
member currencies tOtaling 8.8 bill
lion dollars of which the United
States is to subscribe 2.75 billions.
This fund is expected to stabilize
and safeguard the value Of foreign
currencies in terms of gold, remove
trade barriers i'm favor of open or
reciprocal trade agreements to pro-
vide free and open trade among
member nations.
2.-Organize an international bank
for reconstruction and development
with a subscribed capital Of 81 bill
lions of dollars Of which the United
States is to furnish 3.175 billions.
Purpose of the bank Is primarily to
facilitate Aotation of foreign loans in
private capital markets by providing
International guarantees and to
make long-term capital loans direct
to member nations for specific prof.
ects of reconstruction and develop
ment.
Why the need for these safe
guards? Following World War I
American investors took beating,
and in the late 1920s were caught in
an epidemic of defaults by foreign
debtors. Under the Breton Woods
proposals, these foreign loans would
be investigated by the bank and then
guaranteed as to principal and in
terest by the foreign government
and the bank Risks then, of inter-
national loans, would not fall on in
vestors themselves, nor even on
any one country, but upon all of
the A member countries. Obvious
ly the objective of this guarantee of
loans is to encourage substantial
volume of private international in
vestment which is essential to our
own economic well being.
Great Need for Rebuilding.
France, italy, Norway, Poland,
! Finland, Czechoslovakia, a large
area of Russia, the Balkan nations,
large sections of England, China,
much of India and Burma, plus the
Axis nations of Germany and ia
pan, have been laid waste by the
war, their productive facilities pros
trate, their currencies deprecated,
and many years will be required for
them to rebuild their export indus
tries. They win require foreign cap
ital to get under way.
Tn OUT own country we have "a ire
mendous1y enlarged productive in
dustrial plant. Our agricultural pro-
duction has reached a new high OF
efficiency. After the war our eco-
nornic policy viii be aimed at full
employment and full utilization Of
our agricultural and industrial facil-
tiles. To realize these Arms new
outlets for the products OF farm and
factory must be found and these
PROSTATE foreign countries provide
a ready market providing that
American exports take the form Of
American investments abroad-good
American dollars-for il these ma
tons are to buy a large volume of
our productive machinery, our in
dustrial and agricultural products in
the immediate postwar period,
American investors will have to lend
part Of the purchase money. Under
the functions Of the international
bank, these investors will have the
assurance that these investments
are sound and remunerative.
Under the operation of the none
tary fund, as distinguished from the
bank, for the protection Of our in
vestors, currencies in all these coun-
tries must be stabilized in terms Of
gold and at equitable rates Of ex-
change. The United States holds 60
per cent of the worlds gold supply.
Economists point out there must be
elimination Of exchange fluctuations,
of discriminatory exchange prac-
tees, of competitive currency depre-
Citations, il the American dollar is
to be protected.
For instance, how can the Amer
Jean farmer be protected in the
world market if a stable wheat pro-
ducing country such as Russia and
Argentina can resort to monetary
action which places the wheat pro-
ducers of those countries in a pre-
ferred position with respect to Amer
ican wheat exporters? II the Amer
ican farmer is to continue to export
wheat or any other commodity, and
to receive fair price in good Amer
ican dollars for the product he sells
at home, he must know that the