INTERNATIONAL CURRENCY

Dominion, Volume 14, Issue 68, 14 December 1920, Page 7

INTERNATIONAL CURRENCY

STANDARD GOLD COINAGE SUGGESTED. The adoption of an international unit exchange by tho chief trading Countries of tlie world, would, it is considered, materially simplify comnlicated exchange calculations. and assist in the economic restoration of war-stricken Europe. The Commonwealth Statistinian (Mr, G. H. Knibbs) contributes an intorestin? article on tho subject in In's latest "Tear Book." in which he shows that verv close relationships it£ present exist between .simple multiples of the units of international currency, so that unification of the world's coinage is not by anv means impracticable.

Mr. Knibbs points out that the British snvereien contains 7.3323S grams of, fine eohl: the American 5-dollar niece 7.522!)!) (Trams; the French 25-frane piece (if such a coin were in circulation) would contain 7.25805 grama: the. German 20-niece. 7.1G8« crams; and tho Japanese 10-yen piece 7.5 grams. Tlie nearness of these results suggests that if these nations could be induced to make such alterations in their respective currencies as to brim* these five values into exact agreement. then one single gold niece would be struck, circulating in the British Emniro as (I 5-drjllar piece,, in Trance and the Latin countries as 25 fran.es: in Germany as 20 marks: and in Jfl'nan as ■ S" 0 ' 1 11 co ' n ' with its decimal subdivisions, would then constitute an international coinace. The initial work involved in such a transformation would, of course, be considerable. This, however, would be compensated by material advantages. The conversion from ono curi'cncy into another, and the interpretation of foreign exchanges would both bo immensely simplified, .and Kro.it encouragement would be given to backward monetary countries to 7'nform their currency.

While economists when discussing International units, of exchange (!0 years ago, thoysrht mainly in terms of money, two of the latest proposals reflect n changed attitude (says tho Melbourno Anrus ). Pamphkts have been issued by Dr. Viatering, president of the Netherlands Bank, and by two Swedish experts, Axelson and Bittner, dealing with the urgent need for combined action to rcscuo the distressed' nations of Europe from the economic crisis through which they are passing. The three experts all think it necessary that machinery for the barter of goods, to which tho world has now practically been iedticed, should be created in the form 67 "an international unit of fixchoJigo based on sold." That is, a purely book currency,' not represented by nny coins, but following the lines of tho old "mark banco" of Hamburg. The Swedish authorities have devised a detailed schmnei for tho foundation of what they term an Associated Bankers' Clearing—A.B.C. for short. No money movement between different countries is to, be legal except through the A.B.C. Tho effective capital of the clearing house is to be four times the amount of metnl coins a.nd securities in its vaults. Bach country is to deposit securities or coinage corresponding to tts presumable importations, against which it. will bo granted a credit of four times that amount. These credits will be granted in denominations callod "monos," the "mono" being a value in account Miual to about five francs, four shillings, two yen, or one Aincricnn dollar.

It in to be noticed that the proposed new currency is "money of account" only. The obligations nro only ultimately convertible into gold, arid meanwhile would ]>n simply a mndi'Jm of barter, convertible in each country into the currency of the country. Mr. ICnibbs rpoints out that his tabl« of comparative values might .become necessary at a later stage to assign a value to the "mono." It might be*onsi<ij;ed advantageous to link up tho international monetary unit with the international system of weights and measures. In that caoe "mono" could bo defined as the exact equivalent of 14 grama of finei gold, which would make it precisely equal to two Japanese yen, and two Mexican pesos, while its vnhle in English currency would be about t!) 1-Gd.