AMERICAN SCHEME OF POST-WAR CURRENCY

Auckland Star, Volume LXXIV, Issue 81, 6 April 1943, Page 3

AMERICAN SCHEME OF POST-WAR CURRENCY

RETENTION OF GOLD

International Stabilisation Fund Proposed Rec. 2 p.m. RUGBY, April 5. Mr. H. Morgenthau, United States Secretary of the Treasury, at a secret meeting of a joint session of the Senate Committees for foreign relations, banking and currency and post-war economic policy and planning, presented the United States Government's plan for post-war international money stabilisation, proposing world restoration of the gold standard, states a Washington message. What Mr. Morgenthau said was not disclosed, but a statement issued to the Press outlined the main proposals. These were:— (1) The establishment of an international stabilisation fund to be taken part in by all the United Nations and countries associated with them who contributed to the fund. (2) The creation of an international board to control the fund with the participating nations appointing members and with the voting power of the board fixed according to eachcountry's contribution. ::.TTT. (3) Agreement among members not to engage in competitive depreciation of their currencies.

(4) The attainment of stability by fixing the values of the currencies in terms of gold.

(5) Retention of established channels of international trade and international banking for all international transactions. , _. Mr. Morgenthau outlined the tentative proposals of the United States to participate with a contribution of 5,000,000,000 dollars to the stabilisation fund. .■'.-. The American scheme for a postwar currency system, which the United States Treasury has submitted to all Allied Governments, was elaborated by Mr. Morgenthau s economic adviser, Mr. H. D. White. It proposes the establishment of a United and - Associated Nations Stabilisation Fund' of at least 5,000,000,000 dollars, the resources consisting of gold, also the currencies and securities of participating Governments. These Governments' contributions will be on a fixed basis of the gold holdings, trade balances and national incomes of the respective countries. Voting rights on the board of the Stabilisation Fund will depend on their quotas, the maximum for any country being 20 per cent of the total votes. The scheme proposes the establishment of a new international monetary unit called a "unitas," equalling ten dollars, which will be freely convertible to gold: The board will have absolute power to fix the exchange rates of the participating countries, also the price of gold. It. may authorise a certain range of fluctuation of rates, also call on any member country to buy the currency of any participating country with its Government's consent. The participating countries will be required as soon as practicable to remove exchange restrictions other that those on capital transfers. Unauthorised international capital movements will be prevented by closer collaboration between the member countries.