TO AVOID CHAOS

Evening Post, Volume CXXXV, Issue 1, 2 January 1943, Page 6

TO AVOID CHAOS

WHEN WAR ENDS c

ECONOMIC MACHINE X. ' EXISTS

A new system of international finance on the model of the Federal : Reserve System in the United States, in order to prevent worldwide financial chaos after the war similar to that which followed the last war, is urged by the U.S. As- ? sistant Secretary of State,.Mr. A. A. Berle, jun. In such a plan, he said, there was a possible use for America's vast gold hoard. ! Speaking at the annual, meeting o£ '. the Alabama Chamber of Commerce, ihe said that his call, for American leadership in such international cooperation was based on a realistic foreign policy which believed that the welfare of the United States 'depended ion the welfare of other nations. With, new aeroplane designs already on fha..^, drafting boards which might make.-: several hundred Pearl Harbours possible all over the United States in some-future war, self-preservation re-; ! quired America to establish a new 1 world order in which a new war could . not start, he said. "For purposes of defence," he as* serted, "we have erected \'an economio machine for war supply capable-01~ developing the entire world. In the light of this experience, it should not -.' ' be too difficult to create institutions ' - capable of handling the finance oi transition and turning the processes * of reconstruction into permanent pro; cesses of international trade.". "; * „ VISION OF LIMITLESS POWER. Asserting that the first World War> taught that military victory depended on united action, he continued: "The last two decades have shown us that united action is not less essential ii victory: is to mean peace. The second World War has ; given us a vision of limitless economic power achieved by> ;■' co-operation. We must not again"lightly throw away that power in the -*' moment of triumph, when arms are -■; grounded and we embark on the task' '7 of healing the world." ' ",-*- Business and financial men, he sug-\" gested, should "begin to do some think-. ing as to how the methods which have; proved successful within the United' *- States may be applied so that the- ; trade and commerce necessary for the health and peace of the world may be-' kept going." - • Saying the task was "not impossible,'!. . he went on: "We have the resom-ces.-. If it is desired to use'gold as a finan-.U rial base, as many people do, we have,. ; , at our command by far the greatest- _-;■ share of the world's gold. What is more important, we have the production and the goods available to back up.our finance. We shall be hi a position to make and deliver almost anything which is required to give to our; neighbour countries a new start in. international economic life. At theW. ; very time this is most needed, we shall,want to keep our plants busy, our-; people employed, and to provide jobs.,• „ for the returning soldiers. ...... MACHINE ALREADY BUILT UP. •' "A good many observers, both practical bankers and students, have been advancing the idea that we could profitably extend some of the principles of reserve banking to the international field. Certainly experience suggest? that this is a logical line of develop ment." He said that the international machine already built up by the,....... United Nations for war purposes, the . adaptation of which he urged for. - his proposed post-war system, was -*. so "truly international" and so effecu ' tive that it had probably saved the>United Nations from losing the war' T long ago. Without it, he said, the^ • United Nations \would have been" defeated one by one for lack of.' munitions, food, and other supplies. "During the war," he went on, "this; is the machinery-that must-support the • ..-;■ economic life of all the United Nations including ourselves. Sometimes \ve'. have been criticised because the huge*-; v machine did not get into action more * rapidly. Much of this criticism 'iSX X sound and useful. But it must be re-- *'- membered that all this huge design of " wartime life has been built within .".a" period of nine months. It will increase^ in effectiveness until the war is over. -*" "When victory comes, as come it ■ will, this vast machinery will be the' " way by which the civilian population ' of most of the world gets its supVv - plies. The organisation will bs there;, and standing; it will have under its-;, direct charge the resources of most' of the world." ". " • He said that there would be the pro;-, blem, after the. peace was won, of; keeping and holding that peace through • an extremely difficult period. ' "A HUNGRY WORLD." .. "You cannot expect order in a hurt*'■'■'. gry world, and the world will be very . *•;, hungry indeed," he added. "The machinery which has been built up t'tir' '*,v supply us during wartime will have _ % to be used, in large measure, to keep - , us supplied until the commerce.. of. peace can be re-established. "There will be no other way. UntiL new arrangements can be made to reopen the flow of trade and commerce, to repair the wrecked plants, and re- - place the broken machines, we shallhave to rely for a time on the war', supplies, while we are working to re— > establish the business of peace. "The technique of that period off*.'_. ~ transition must be planned and thought -, out soon, for this time we cannot risk.' "^ the breaking of all ranks which took; place in 1918 when Germany collapsed- - , Then the Allied machinery stopped at 1 .." once." ;-_. He said that the trade routes and- ~ markets of the world would have to be: reopened so that nations could get' into production and put their resources-; > to work as rapidly as possible. "- ,- "This rule goes for, everyone, including America," he added. "No country can expect to cut itself off,: from general commerce without harming its neighbours a great deal and itself most of all."