INTERNATIONAL FINANCE

Evening Star, Issue 25226, 13 July 1944, Page 10

INTERNATIONAL FINANCE

THE MONETARY FUND SCHEME OBJECTIVE IS EXPANSION OF WORLD TRADE (P.A.) WELLINGTON, July 12. The leader of. New Zealand's delegation to the monetary conference at Bretton Woods (Hon. W. Nash) has sent the following message to the Acting Prime Minister (Mr tiuiiivan') :

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 lie necessary to consider the indefinite prolongation or an increase of war-time controiS. 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 meet emergencies that may at any time arise.

From an examination of Lord Keynes's statement along with others made by the leaders of the various delegations and trom a review of the conference discussions in committee and otherwise, it appears clear that the use of gold" as a medium for measuring the respective values <>t currency as envisaged in the monetary plan is not inconsistent with Lord Keynes's denunciation of the gold standard as a relic of barbarism. Under the proposals now being considered, all currency would be measured in gold values, but the measure would be flexible enough to provide for an orderly change in the exchange rates, where necessary, to avoid the old methods, such as exchange depreciation and other measures of competitive economic warfare which caused so much trouble. An increase or decrease of gold production could not iii any way be used to interfore with the expansion of world trade, which is the, basic foundation of the fund's policy.

'■ There is general agreement 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 the 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 that the fund will be supplied with all the 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 us is to ensure that the 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 the resources of the fund necessary to meet current transactions wifj be available when required."