STEADY STERLING

Evening Post, Volume CXVI, Issue 110, 6 November 1933, Page 5

STEADY STERLING

IMPORTANT TO AMERICA

PLEA FOR STABILISATION

All-important to the United States is t'a, strong and« steady sterling," dcjElared Dr. Benjamin M. Anderson, economist of .the Chase National Bank, in a speech at tho Pilgrims' dinner to Sir Josiah Stan.p'in New York, says the ••'Christian Science Monitor." The particular rate, he said, was far less important than prompt settlement of the matter. America wauted a sterling ■which could bear its accustomed load in international commodity financing and dri facilitating the flow of goods. "The notion that we must fix a price Jcvel which we desire and England a price level which she desiros, and then try to adjust the gold stabilisation rate to these price levels, seems to me a very dangerous'notion, which can only lead to prolonged debate and interfere with the settlement," said Dr. Anderson* "The fear that, if the rates are fixed too high for any particular country, that country may have to undergo some further downward price adjustment is nqt one which'.1.1 should suppose need be considered,' unless the rato were fixed yery high indeed. "Prompt settlement, including the Jdwering of tariffs and the stabilisation of exchange/ accompanied by a good jnodus vivendi regarding tho interAllibd debts to be reached in separate negotiations, would cause such a radical upswing in general,confidence and such a-general rise in the level of world prices as to mean that tho only difference for any country in a higher or lower rate of stabilisation would bo in the extent to which its. prices rose, rather than the fact of a rise itself." Dr. Anderson reviewed point by point the.'chief'bases'of the old and the new economic systems, in all of which there was, by inference, praise of the old and doubt regarding the effec-. tivenoss of the new. One of tho most dangerous of these new theories, he held, was that regarding the "planned economy." COMPROMISE INSTEAD. He stressed that a planned' economic order would bo directed by administrators "chosen-primarily with respect to their ability to get along with men and •with respect to their acceptability to the controlling groups," rather than by men trained to see the whole economic picture. Therefore, "instead of economic planning, we should get political compromise, "he asserted. '' The plans that would be made would be only partially harmonious from the standpoint iof economic consistency. They would be in largo part a mere resultant of political pressures, contradictory in'their economic implications. "The administrative problem . would fee an ■. impossible problem, particularly difficult in the United States because of ,our conflicts of state and federal jurisdictions and\ our constitutional Hmifatjons; With the control of industry? it would involve an immonso bureaucracy. "If we wish a revival without «a real relapse into chaos, I do not think>we should go far with the advocates of the. planned economy. . They, cannot make a comprehensive plan." Discussing the chief obstacle to"1-re-covery of prices, Dr. Anderson said, ".I'am convinced that it is, first of all, the: excessive- tariffs and other trade ■barriers'which we have been so laboriously building up, year, after year, and which we have so intensified'since the great trmibW bega^ in 1929* >?,.;;£.iv '{l ainlfc;6nyinced; thatv.if■ %c'j sare; succjessfulTiii getting these trade barriers down, that there will come a. great rise .in comniodity prices throughput the.world. .Each country will be able to dispose of those ; commodities which are most-depressed in price because produced ,in great excess within its borders, with an* immense lift to tho buying power of the producers of thoso ( things. .;';.. ■; AMPLE CREDIT. "The countries.1 will balance one another, equilibrium will be restored, an •immense widespread growth of employment will create additional pay lolls and additional buying power on the' part of . labour, and immense increase in the utilisation of existing plant and equipment will create additional buying: power for. shareholders and partners in businesses, ■'income growing out of increased production will support an immensely consumption, and prices will rise. We shall not need, to forco an expansion of credit. Expanding industry will inyite an expansion of credit." ' He hoped that they would put their emphasis upon the great fundamental that neither the gold standard nor anyother monetary standard could work well if (a) the. world had excessive tariffs and trade barjiers : and\(b) a gigantic creation of international debts, jf trade barriers were moderated sufficiently so' that ' there could be an adequate flow of goods throughout the world, so that countries in debt could increase thpir exports .to ■ tho pflfint necessary to pay their debts, then there would1 be found to bd plenty of gold.