BRETTON WOODS PROPOSALS

Chronicle (Levin), 14 May 1947, Page 7

BRETTON WOODS PROPOSALS

-Press Assoclation

WILL NEW ZEALAND JOIN OR JUST LOOK ON?

By Telegr"ph-

WELLINGTON, May 13. "The International Moiietary Fund is not the master of member eountries and can never be so. it is their servant," said the Deputy Governor of che Keserve Bank ox New Zeaiand, Mr. E. C. Fussell, when addressmg the Wellington JRotary Cluo on the Bretton \Voods proposals. For 4(3 nations representing tnreequarters of the population of the world, the International Monetary Fund and International Bank were practical realities for tiiose 4(3 nations were members of a fund and bank vvliich eame intb being* in said Mr. Fussell. New Zealand's inLentions as regards joining or not joinaig were not yet known and would not ue known until the discussion promised •jy the Prime Minister took place.in the Uouse next session,; ! | • "ilereand abroad Bretton' Woods uas botli fri'ends and fohs, said Mr. r'ussell. 1 "Pehr in the niinds of "inany that the fund represented an uncontrolled and uncontrollable group of inLernational linanciers, arose from the mistaken view that the goverliors of the fund were then members of the rund. That was not so. It was the dovernments of member eountries who were members and not the governors vyhoiii they appointed to represent them. Each government had the power at any time to remove a governor whom it hau appointed. It would thus be quite impossible for the fund, through its governors, to carry out a poliey contrary to the majority wishes of member nations. ' ' JReferring to another objection bearing on the question of the sovereignty of member eountries, Mr. Fussell said the vvhole matter boiled down to a moderate pooling of sovereign rights for the mutual beneiit of the participating nations and not to a surrender of basic sovereignty. Therefore, in his view, the nations which had already joined were still sovereign states. The essential point in using gold for tneasuring exchange rates, was to preserve as far as possible, the stability of individual currencies in terms of each other. He emphasised that gold,. like the fund, was not the master but the servant. Mr. Fussell, answering the fear that the fund would encourage United States to unload exports without taking a fair share of goods in return, said United States knew full well she could not sell goods indefinitelv without taking others in return. Whatever happened to Empire preferenee would happen regardless of whether or not New Zeaiand ever became a member. The United Kingdom, which was already a member, had not disclosed the exact intentions of the proposals about Empire preferenee but had indicated that preferenee might at least be modified in return for other material benefits. Commenting tliat many supported the idea of the fund because they believed that membership would entail the abandonment of the exchange control system and import restrictiojis, Mr. Fussell said that import restrietion procedures were not a matter for the monetary fund but a matter to be dealt with byl the Geneva Conference. It was idle to speculate as to what would be the ultimate position if New Zeaiand did or did not join the fund. The worst that could happen would be- that members would do all they could to prevent. nonmembers from beneliting from the existence of the fund and the best that could happen would be that members could. decide, as a speeial favour, that at least one country could have all the privileges of membership but none of the obligations. -He said he found it liard to say which alternative would be more distasteful. Mr. Fusp.oll saicl' that citizons, iu

forming their views on New Zealand's position in relation to the fund and the bank should talce into account the fol•lowing: — Firstly, did New Zeaiand as a great exporting country, approve of the measures designed to foster international trade? Secondly: Was it to New Zealand's advantage that other eountries should have (a)-steady exchange rate; (b) no bloclcing of payments due to us, (c) additional resources to tide over tempor- . ary shortages of f'oreign exchange? •Thirdly, was international cooperation a good tliing and did it need more supporters? Fourthly, was it better to be an active partner in such measures or stand aside as a spectator wh'ile others were shaping and condueting the world in which New Zealanders.live? In conclusion Mr. Fussell said the degree of success which would crown all the endeavours would depend on the williiigness of all members to help themselves by. helping and not hindering one another in.. their dealings in international finance and trade.