STABILISATION OF CURRENCY

Press, Volume LXXIX, Issue 23976, 17 June 1943, Page 3

STABILISATION OF CURRENCY

INTERNATIONAL PROPOSALS ADDRESS BY PROFESSOR TOCKER Plans for the stabilisation of exchanges and related problems were discussed by Professor A. H. Tocker, Professor of Economics at Canterbury University College, in an address entitled “International Currency Proposals, which he delivered at a meeting of the Economic Society in Christchurch last evening. Professor Tocker said that the recently published schemes for stabilising the exchanges after the war were not ends in themselves, but were only means to ends. The ends in, view were the expansion of international trade and the freeing of exchange transactions irom present controls in order that trade might expand. The plans proposed, which envisaged the provision of such exchange facilities as would permit money and goods to move freely between countries, also aimed to provide the essential basis upon which post-war reconstruction in trade could be established. “It is now widely recognised that trade restrictions with their depressing effect on general welfare were not the least of many causes of war, and that monetary difficulties were closely associated with trade restrictions,” said Professor Tocker. “When gold standards were restored by various countries after the last war, the rates of exchange adopted were too often inappropriate to the conditions ruling, and the countries concerned were unwilling to submit to the monetary discipline imposed by the new rates. In consequence, trade balances moved against some countries and in favour of others.” ' After reviewing the efforts made by various countries after the last war to maintain gold standards and to manage their internal money in their own way, Professor Tocker said it was now being recognised that such nationalist policies resulted inevitably in economic warfare, .and were an important contributing cause of the present world-wide struggle. If such economic ■warfare were permitted to survive the war, then the chances were that the peace would be short-lived and woyld provide only an unstable interlude in which the, nations might gather strength for another contest for econoipic domination. “Peace must therefore be based, not on economic conflict,” continued Professor Tocker, “but om general economic co-operation among free peoples. Such co-operation demands much freer international trade than was permitted between the wars, and free and stable exchanges are essential to freer trade." British and American Plans Both the British and the American plans recently published had the same end in view, said Professor Tocker; reduced to essentials, they proposed the establishment of a sort of international exchange pool, within which international payments for trade, etc., might be cleared. The pool would be provided by contributions mainly from countries rich in potential exchange funds, and from it loans might be made to those other countries whose exchange resources had become depleted. International funds would thus be made available to finance the restoration of trade. It was hardly to be expected that every country would participate in the scheme from its "inception, said Professor Tocker. Some countries would want payment in a medium other than an international credit, and it was proposed, therefore, to make credits within the pool exchangeable for gold. The only important differences in the operation of the British and American schemes, continued Professor Tocker, concerned the proposed adoption of a new international money unit. The American scheme suggested the adoption of a unit exchangeable with gpld at fixed rates, while Britain had proposed a unit which would be fixed, but not unalterably, in-terms of gold. “Obviously, if gold is’to be used, as the means for settling balances, as an alternative to credits within the pool, to be exchangeable for those credits, and to be of equal value with them” added Professor Tocker, “then the United States, with its embarrassingly large stocks of gold, must be the chief contributor. Equally obviously, the control of the scheme must be largely in the hands of the contributors—he who provides the money calls the tune. But the United States suggests that no one country’s voting power should exceed 20’ per cent, of the total, and such a provision should prevent dominance by any particular interest.” Early Free Trade Impracticable Present schemes had obviously been published to test public opinion, said Professor Tocker, and many of the details had yet to be completed. Powerful vested interests had been built up which would favour the continuance and extension of trade restrictions after the war. “It is quite clear,” added Professor Tocker, “that no early adoption of completely free trade is practicable; but freer trade, stable exchanges, sound currencies, and balanced international payments are all interdependent, and all are equally essential if providing the conditions needed for an enduring peace is to be a main objective of reconstruction.”