RECONSTRUCTION POLICY

Press, Volume LXXVIII, Issue 23812, 4 December 1942, Page 5

RECONSTRUCTION POLICY

STATEMENT MADE BY

MR EDEN

PRESENT CO OPERATION WITH ALLIES

(8.0. W.) RUGBY, Dec. 2, A complete denial of statements alleging that Mr Churchill was standing firm against the introduction of legislation to deal with reconstruction was given in the House of Commons by the Foreign Secretary (Mr R. A. Eden). Mr Eden also said that Britain, in spite of difficulties and reduced resources, was determined to do whatever was possible for the relief of postwar Europe. The measure in which she succeeded in co-operating with her Allies now would very largely determine her post-war foreign policy. Whether or not Britain would he able to maintain peace after achieving it depended on whether she could carry through the co-operation she_ had established with the United States, China, and Russia. He did not visualise a world in which these four Powers would try clamping down some form of dictatorship over everybody else; but when the fighting was ended these Powers would have a virtual monopoly of armed strength, which must be used in the name of the United Nations to present a repetition of aggression. Britain could not abdicate her responsibilities to Europe after the war without writing a charter for future German aggression. . Mr Eden expressed the conviction that there was no need for a conflict of interest between Russia and Britain. He had long held this view, which was firmly based on history. He did not agree with those who thought that Russia’s Communist faith made BritishRussian co-operation and friendship impossible, any more than he agreed with those who thought it necessary to hold the Communist faith. Whatever political philosophy would be practised in Britain, it would be practised free from the nightmare of recurrent aggression.

After victory the first imperative duty of the United Nations would be to elaborate a settlement making it impossible for Germany again to dominate her neighbours by force of arms. “Enthusiastic Americans” Commenting on Mr Churchill’s remarks on the post-war settlement, the New York “Herald-Tribune,” in a leading article, states; “It is impossible not to detect in this passage Mr Churchill’s polite reply to enthusiastic Americans who are writing idealistic open letters to the people of Britain advising them how they should conduct their own affairs. Britain entertains a hereditary distrust of crossing bridges before they are reached, while America has a passion for large visions and systematic schemes for a better world, and she does not always realise how irritating these can be to the British. “Mr Churchill’s gentle reminder once before that America was full of idealistic programmes which were promptly abandoned in 1920, leaving Europe to struggle with the consequences while America retreated into splendid isolation, offers some food for thought to those interested in international unity. It is true that some of Mr Churchill’s more brusque remarks about Britain holding on to her own evoke unpleasant memories in America of the' past sins of British imperialism, but it is also true that our own starryeyed exhortations evoke equally unpleasant memories in Britain of the past sins of American sentimentality.”

FUTURE OF GOLD

POST WAR MONETARY SYSTEM

DISCUSSION BY THE i « ECONOMIST” (Special Correspondent N.Z.P.A.)

(Rec. 8 p.m.) LONDON, Dec. 1 The future of gold Is being increasingly discussed. The "Economist,” .commenting on the planning of a post-war monetary system, says: “Whatever plan is ultimately put into operation, it is certain that it can involve no return to the monetary conceptions of 1925," The "Economist” says: “The gold standard died in 1914. That lesson, which should have been derived in the years 1925-31, was not the distrust of gold as such, but the distrust of false parities, of the barren masses of international indebtedness created by the last war of economic nationalism, of the whole crazy pattern of economic contradictions which doomed the new gold standard —and which would make equally short work of any international monetary System.’ ’ Asking what has been learned since 1931, since Germany’s vast armament drive without gold, the “Economist" declares: "The dominance of finance over economics has been overthrown. That dominance will never return, in that a concept such as a fixed gold parity will never be set up as the sole criterion of economic policy. But the baby must not be thrown out with the bath water. The wider objective of International economic equilibrium, of which gold parity stood as a symbol, cannot be disregarded. Some form of international monetary system is essential, and any such system calls for discipline on the part of its adherents. “The post-war system may ultimately involve the return of free exchange markets, which partly achieved the task of clearing international payments with an efficiency and suppleness which no rigid bilateral clearing system could achieve: but in the immediate post-war period it seems almost certain that some measure of exchange control will be called for, and that the operation of this control will make use of the technique of exchange clearing in which the war-time operations of the various currency blocs ( have provided much experience and \ led to many refinements. [ “Some Standard Essential” ;

"Whether the ultimate clearing of J international payments will be effected i through a free market or through re- ! ciprocal transactions, or through three ( or more currency blocs, some interna- j tlonal standard of value and means of I payment is essential. National cur- }! rency units must be expressed in terms I of some uniform standard. That stan- j dard must be related to the means j chosen to pay uncleared balances of international indebtedness.

“Strong arguments support the j claims of gold to fill these twin func- j tions. . . . The alternative to gold, or an j international unit of account based on I gold, would be one or other of the existing currencies—inevitably the dollar j in the post-war economic set-up—as a 'i standard of international values and payments. There might be grave politi- ’ cal objections to such an appointment.

. . . In any case the decision to use or (j abandon gold in the post-war monetary ~ mechanism will not be taken without ; reference to the immense vested inter- \ ests affected. However unfortunate such an admission may be, it will be a tj political as well as an economic de- ;* cision.” ]J The “Economist" adds: “Surely It is | permissible to hope that the end of $ the war will see the restoration of an i international currency (system which a may not indeed have the rigidity of fixed parities, but which will serve to i maintain economic equilibrium between nations. In such a system gold fji must assuredly have a part to play. It ji may no longer be the arbiter of the J volume of currency and credit, and of $ the main objectives of economic policy. | As a unit of monetary measurement, as | a store of value, and as a means of 3 ultimate payment, it is, however, likely (N to retain its place in the monetary pic- !q ture.” |