WORLD TRADE

Evening Post, Volume CXXXVIII, Issue 11, 13 July 1944, Page 4

WORLD TRADE

MONETARY FUND PLAN

Another report from Mr. Nash, leader of the New Zealand delegation to the International Monetary Conference in the United States of America, has been received by the Acting Prime Minister (Mr. Sullivan). Itfitts as follows:—

"Lord Keynes, at a Press conference last week, issued a warning that if the monetary fund proposals were rejected Britain may have to resort to bilateral barter agreements to protect her world trade position and internal economy. He added that in the absence of the fund it would be necessary to consider an indefinite prolongation or increase of wartime controls. Lord Keynes also admitted that the fund would not in itself solve the world's monetary problems, but it would provide a breathing space wherever necessary to enable nations to consult and decide "pon preventive or corrective measures to meet emergencies that may at any time arise.

"On examining Lord Keynes's statement along with others made by the leaders of various delegations, and taking into account conference discussions in committee and otherwise, it appears clear that the use of gold as a medium for measuring the respective values of currency, as envisaged in the monetary plan, is not inconsistent with Lord Keynes's denunciation of the old gold standard as a relic of barbarism.

"Under the proposals now being considered all currency will be measured in gold values, but the measure would be flexible enough to provide for orderly change in exchange rates, where necessary, to avoid old methods such as exchange depreciation and other measures of competitive economic warfare which caused so much trouble. Increase or decrease of gold production could not in any way be used to interfere with an expansion of world trade which is the basic foundation of the fund's policy. "There is a general agreement here that each country in the fund will have to watch its own economic and financial conditions carefully or the fund will not work, and, in any case, it will still be necessary to guard against danger of some countries imagining that they will not have to balance their accounts or pursue other sound domestic policy. "Discussions are now taking place with a view to ensuring that the fund will be supplied with all information and statistics from every country so that the whole world financial situation may be brought out into the daylight. One other purpose of the fund that may be of importance to use is to ensure that necessary currency will be available at all times to meet current transactions, but countries will be free to maintain control so as to prevent the flight of capital and other capital movements, and to ensure that, resources of the fund necessary to meet current transactions will be availlable when required.^