WORLD CONTROL OF CURRENCY

Press, Volume LXXIX, Issue 23918, 9 April 1943, Page 5

WORLD CONTROL OF CURRENCY

BRITISH PROPOSALS ISSUED AN INTERNATIONAL CLEARING UNION (8.0. W.) RUGBY, April 7. Tentative proposals for world currency control after the war have been issued as a White Paper by the British Government. Among the suggestions is an international clearing union to promote the steady expansion of international trade after the war. The White Paper recalls the speech by the Chancellor of the Exchequer (Sir Kingsley Wood) in the House of Commons on February 2, when he spoke of the post-war need for an “international monetary mechanism which would serve the requirements of international trade.” Described by the Government as "a preliminary contribution- to the solution of one of the problems of international economic cooperation after the war,” the plan in the White Paper has been prepared by the Treasury in consultation with other departments and after informal discussions with officials of the Governments of the Dominions, India, and others. It has been communicated to representatives of the other United Nations.

The chief purposes of the plan are: (1) To provide a generally acceptable means of payment between nations to ensure that any. alterations in exchange values and national currencies are made as a result of orderly, international procedure and not by unilateral action.

(2) To relieve from excessive strain any nation suffering from temporary difficulty in meeting its obligations to make payments abroad, while at the same time subjecting it to gradual pressure towards restoring a position of balance. These purposes are subsidiary to the main purpose—the promotion of the steady expansion and flow of international trade.

International Money Unit

The White Paper proposal is .to establish an international clearing union based on an international bank money to be called, it is suggested, "Bancor,” and fixed, but not unalterably, in terms of gold and accepted as the equivalent of gold by all members of the union for the purpose of settling international balances. The central banks and all member States—also non-members —would keep accounts with the union, through which they would settle exchange balances at par value as defined in the terms of “Bancor.” Countries having a favourable balance of payments with the rest of the world would have a credit account with the union. Those having an unfavourable balance would have a debit account. , . ' The White Paper continues; The idea underlying such a union is simple —to generalise the essential principle of banking as it is exhibited within any closed system. . The principle is the necessary equality of credits and debits. If credits can only be transferred within it, the union can never be in difficulty in honouring cheques drawn upon it. Its sole task is to see that members keep the rules, and that the advances made to each are prudent and advisable for the union as a whole. Some minor provisions of the plan are that all the Allied nations will be invited to become original members. Governing boards shall be appointed bv the governments of the member States, and those with small quotas will be arranged in convenient political or geographical groups. The member States will agree between themselves on the initial values of their own currencies in terms of “Bancor. A quota based, perhaps, on imports and exports, shall determine responsibility in the management of the union and the right to enjoy the unions credit facilities. Member States shall agree to accept payment of currency balances due from other members by the transfer of “Bancor” in the union s k°The governing board shall be entitled to ask and receive from each member relevant statistical and other information. Non-member States keeping clearing accounts with the union wo g uld have no right to overdrafts, and no say in the m-nagement. The J White Paper says that the clearing union might become the pivot of the future economic government of the world.

UNITED NATIONS COUNCIL

recommendation at CONFERENCE INSTITUTE 'OF PACIFIC RELATIONS WASHINGTON, April 7. The formation of a permanent United Nations Council was recommended at; the December conference of the Insli-i tute of Pacific Relations A report just published by the institute says that there was considerable criticism of excessive British and American dominance in the conduct of the war and a erc-ing belief that the operations of war and peace would be badly handicapped unless the present nominal association of the United Nations was transformed into a functioning policymaking organ. . , Lord Hailey suggested a .regional council for the Pacific consisting of representatives of England, America, Russia, Australia, New Zealand, China, Canada, Thailand, France, the Netherlands, and the Netherlands East Indies. The Pacific Council would arrange the peace safeguards and organise cooperativ ■ action to secure a common, economic policy and tariffs. One recommendation was that Japan be stripped of all her possessions, including Manchukuo, Korea, and the mandated islands. , . . China indicated that she desired I ormosa, and Far Eastern delegates proposed that Allied and Asiatic troops occupy Tokyo temporarily after the war. The council rejected a proposal that the Emperor Hirohito’s palace should be destroyed. Most of the delegates were of the opinion that the captured lands in the Pacific should be returned to the sovereign Powers pending steps towards self-government. A committee on India emphasised the need for some form of collective security, including the United States, thus breaking American isolationism on the one hand and British imperialism on the other.

AXIS VESSELS SUNK

BRITISH SUBMARINE SUCCESSES (8.0. W.) RUGBV, April 7. The Admiralty announced that a British submarine attacked an Italian cruiser of the Regolo class in the Straits of Messina, The noise of a heavy explosion followed the attack, the full effects of which were not observed.

Other submarines operating in the Mediterranean torpedoed two tankers and a medium-sized supply ship. One of the tankers was intercepted near Cape Spartlvento, in Italy, while proceeding under an air and sea escort. The other tanker was torpedoed while being towed off the north coast of Sicily, and the supply ship formed part of a convoy attacked near Marittimo. Noisy but ineffective enemy counter measures made it Impossible to observe the full results of these attacks. At least one tanker is believed to have been sunk.

Air Council Appointments.—Air Marshal Sir Douglas Evill has been appointed Vice-Chief of the Air Staff, and additional member of the Air Council, in place of Air Vice-Marshal C. E. H. Medhurst. Air Marshal Evill succeeded Air Chief Marshal Sir Arthur Harris as head of the Royal Air Force delegation to Washington in February, 1942.— Rugby, April 7.