CURRENCY PLAN

Press, Volume LXXIX, Issue 23917, 8 April 1943, Page 5

CURRENCY PLAN

PROPOSALS BY U.S. TREASURY LIKELIHOOD OF BRITISH OPPOSITION (N.Z. Press Association—Copyright) (Rec. 10 p.m.) WASHINGTON, April 7. Outlining the United States Treasury’s post-war currency stabilisation proposals, the Secretary of the Treasury (Mr Henry Morgenthau) declared that the machinery would be established when two-thirds of the United Nations and their associates had agreed upon procedure, and he expressed confidence that, given time, agreement would be reached. The 4000-word plan reveals that the United States would exercise a power of veto—a provision likely to arouse serious opposition in Britain, where the House of Commons is due to consider a counter-plan drawn up by Lord Keynes. Decisions of the international board would be by simple majority. except that important operations would require an 80 per cent, vote. The United States proposes to contribute 2,000,000,000 dollars, and would presumably be entitled to 25 per cent, of the voting power. Thus the United States could prevent other members mustering the needed 80 per cent, of votes on vital issues. The plan, which is attributed to Mr H. D. White, Mr Morgenthau’s economic adviser, follows substantially the five points given to the press yesterday, These were: (1) the establishment of an international stabilisation fund, to be taken part in by all the United Nations and by countries associated with them who would contribute to the fund: (2) the creation of an international board to control the fund, wih the participating nations appointing members, and with voting power on the board fixed according to each country’s contribution; (3) an agreement among members not to engage in competitive depreciation of their currencies; (4) the attainment of stability by fixing the values qf currencies in. terms of gold; .(5) the retention of established channels of international trade and international banking for all interhatiOrtal 'tfaiiSfttlibhb. • • Members would be required to make initial payments to the fund of at least half their total subscriptions, in gold currency or Government securities. Mr Morgenthau explained that the fund would not constitute an international bank. It would not lend money. However, it would eliminate- the need for individual exchange control funds, which could be used to finance the new fund.

“Highly Tentative” The primary object of the proposals, which were highly tentative, was to assure rapid transition from war-time restrictions on trade, and especially to allow war-ridden nations to obtain foreign exchange with which to restart trade immediately after the war.

The proposed new 10-dollar international monetary unit, called “Unitas,” would not be issued in the form of notes or coins. Members would deposit gold for credit in “Unitas," which would be redeemable by gold and transferable between members. Mr Morgenthau added that the United States wanted agreement to emerge from the impending conference, but did not wish to act the part of big or rich brother. Ten out of the 37 nations invited to the conference so far had responded enthusiastically, The Washington correspondent of the “New York Times” says that the most conspicuous difference between the White plan and the Keynes plan is the apportionment of control. Under the White plan it is on the basis of capital participation, whereas under the Keynes plan the basis is pre-war trade, which would give Britain a greater voice in control, since in 1938 British trade was about 9,000,000,000 dollars, compared with the United States 6,000,000,000 dollars*. NAVAL ACTIVITY AT GIBRALTAR BIG FLEET MOVEMENT REPORTED LONDON, April 6. There is at present great activity at Gibraltar. The Tangier correspondent of the “Daily Express” reports that a great British battle fleet hjis left Gibraltar for an unknown destination in the Mediterranean. The fleet included the three battleships, Nelson, Rodney, and Malaya, three aircraftcarriers,* 35 destroyers and corvettes, 26 motor torpedo-boats, and several submarines.

The correspondent adds that convoys are entering and leaving Gibraltar almost daily. Concentrations of more than 100 merchantmen and warships are now frequent. The Paris radio reports that many aircraft arrived at Gibraltar yesterday.