The Dominion WEDNESDAY, JUNE 21,. 1944. THE MONETARY PLAN

Dominion, Volume 37, Issue 226, 21 June 1944, Page 4

The Dominion WEDNESDAY, JUNE 21,. 1944. THE MONETARY PLAN

Apparently there is an impression that the “Statement 'of Principles for an International Monetary Plan,” approved by the experts of more than 30 countries, involves the adoption of gold as the basis of world economy. There are, in many countries, people who are, as the London Times put it, “ suspicious of anything that links currency with gold, however elastic the link,” and they have jumped to the conclusion that the international plan establishes this connexion. But it seems to be purely an assumption, probably based on the provisions of the White plan—the American counter to the Keynes plan—which did reflect the view strongly held in the United States that gold is the only real basis of international trade and settlements.

The British journals, in their comment on the joint plan, see in it a sound compromise. The Economist, for instance, said: “It is true that several clauses permit transactions in gold—for example, a country may, if it chooses, redeem for gold the fund’s holdings of its currency; but there is no compulsion in it. It would be foolish to drive the anti-gold fanaticism to the length of denying that there are many useful purposes to be served by an international precious substance, universally acceptable. But every care has been taken to protect the scheme from any suspicion, justified or fanciful, of domination by gold.” In Great Britain, and no country is more vitally interested in the restoration of world trade, the trend of opinion appears to favour concentration on the proposed plan as a practical aid to that end. The statement is not accepted in toto, but is regarded as something which provides a basis for discussion, and it might be as well if it were approached by the people of the Dominion in a similar manner. Both extreme views regarding the place of gold in the monetary system may well be ruled out of the present discussions for the simple reason, as an overseas journal has stated, that “neither is capable of becoming a basis of general international agreement.” What is wanted—and this statement provides a measure of agreement that should assist the work of the conference —is a plan that will ensure the facilities for the expansion and balanced growth of international trade. Mr. Cordell Hull urged the summoning of an international conference to avoid the danger of “monetary chaos after the war,” and delegates would be hampered in their work if they were sent to the conference with their hands tied. The experts’ proposals constitute what they regard as a sound practical basis, or, as the London Times said, they “lay down the lines upon which a scheme could be built,” and this evidence of agreement already established affords ground for confidence that the thing can be done. If these principles are adopted then the task of working out the details will follow, and may require no little time. The Acting-Prime Minister stated recently that the Government proposed to issue particulars of the scheme, together with explanatory material, but no indication has yet been given of the Government’s own attitude with regard to these important issues. The conference is to meet within a few days and not a word has been said as to the opinions held by the Ministry. Presumably its views will be communicated to the Dominion’s delegates, and this is not a matter in which secrecy is necessary. The important matters raised by the experts’ statements have been before the people in Great Britain since April 22, and there has been ample opportunity for close examination and for representations to be made to the authorities in Whitehall, but here neither Parliament nor people have had the information, or the time, to ascertain how the principles of the scheme would affect the economic structure of this country. It would be erroneous for the Government to conclude that the people of New Zealand place such unquestioning confidence in the . delegation that these things are unnecessary.