POUNDS AND DOLLARS
THE FUTURE OF STERLING, by A. C. L. Day; Oxford University Press, English price 1 F ever there was a timely book in economics, this is it. Should countries outside the sterling area be permitted without limit to change their British pounds into dollars? The author. who is one of the British experts on the subject, concludes that they should not. | His argument is that if the world is to continue to be short of dollars. then there is no point in letting other coun- | tries drain away the dollars of the ster- | ling area-that is, a system of convertibility under these circumstances would be impossible. If, on the other hand, it might prove, by some curious chance. that dollars should become plentiful, then "the centre of gravity of the world financia] system would move to New York," and the importance of sterling as an international currency would be reduced, Day argues that \Britain’s economy will be severely damaged if Britain takes on too large a part of the world’s burden of trying to make a workable and unified international monetary system. His (continued on next page)
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(continued from previous page) reasons for this derive from the great economic strength of the U.S.A.,.the close dependence of the rest of the world on U.S. economic policies, the unpredictability of these economic policies and, indeed, the expectation of instability because of domestic pressure groups and "purely political considerations." The author discusses why and how sterling operated as an international currency before 1914 and analyses the profound economic changes that have taken place since then. He doubts whether the operations of the London financiers would earn Britain enough dollars to offset the losses on financial transactions that would follow convertibility-losses which would occur by fewer transactions in the British commodity markets. He Tecognises that there’ must be some workable system for international payments and puts forward a scheme which would not damage Britain as much as convertibility of sterling would. The book is short, easy to read and a refreshing product of the London School
of Economics.
W.B.
S.
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New Zealand Listener, Volume 31, Issue 797, 29 October 1954, Page 13
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350POUNDS AND DOLLARS New Zealand Listener, Volume 31, Issue 797, 29 October 1954, Page 13
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