THE OTAGO DAILY TIMES TUESDAY, September 15, 1936. ANOTHER WORLD CONFERENCE?

Otago Daily Times, Issue 22986, 15 September 1936, Page 8

THE OTAGO DAILY TIMES TUESDAY, September 15, 1936. ANOTHER WORLD CONFERENCE?

If there is to be another World Economic Conference earlj. next year it is hardly to be supposed that President Roosevelt will not take the initiative in summoning it. The Washington correspondent of the New York Times reports a movement amongst “ influential foreign delegates ” in the Federal capital to enlist American sympathy for" such a proposal, but it is added significantly that, while the American reaction is not yet known, it is nevertheless realised in informed circles that American participation “would necessarily mean a discus sion on currency stabilisation and war debts, any adjustment of which, at least at present, appears to be impossible.” In short, the position so far as the United States is affected, is much as it was when the World Monetary and Economic Conference of 1933 was brought to its rather tame conclusion. President Roosevelt has lately been credited with a desire to assemble a majority of the world’s rulers for the purpose of discussing ways and means of preserving peace. But it is not to be forgotten that he himself virtually wrecked the 1933 conference, for reasons which may, in the official American view, still be regarded as valid. That conference failed in its primary objective, the stabilisation of currencies, due solely to a bewildering volte face in American policy. The President’s first message to the sixty-six nations which were represented at the London gathering in 1933 was that the conference “ must establish order out of the present chaos by stabilisation of currencies, by freeing the flow of world trade, and by in ternational action to raise price levels.” That was on May 16. Early in July, with the conference some weeks in session, new instructions from Washington to the American delegation were accompanied by a general statement from the President denouncing “ the specious fallacy of achieving a temporary and probably an artificial stability in foreign exchange,” whereupon the conference almost literally broke up in confusion. The change of front was due to a belated realisation in Washington—though less belated there, according to some commentators, than in London—that the stabilisation of currencies and the raising of price levels are two policies which cannot be pursued at the same time, the raising of the price level by monetary methods being necessarily accompanied by currency depreciation. President Roosevelt, it will be recalled, was himself in the process of lifting prices and depreciating his own country’® currency. And, as was remarked in an English review at the time, “ a statesman embarked upon such a course of depreciating the most stable of currencies, as the dollar had proved to be up to the early months of 1933, could not conceivably press upon the world a policy of stabilisation of its currencies. For every currency in the World stood in some sort of relation with that of the United States.” Currency stabilisation is just as essential today as it was three years ago if any - thing approaching freedom of movement is to be restored to the flow of world trade. The logic of facts, therefore, might well cause the American President to hesitate before committing himself to a clarification of his executive’s attitude, in relation to world policy, on the struggle to restore prices in the United States.