CURRENCY AND GOLD

Greymouth Evening Star, 7 April 1943, Page 5

CURRENCY AND GOLD

POST-WAR STABILISATION

U.S.A. TREASURER’S PLAN

RUGBY, April 5. Mr Morgenthau, United States Secretary to the Treasury, at a secret meeting of a joint session, of the Senate Committee for Foreign Relations, Banking and Currency, and Post-war Economic Policy and Planning, presented a United States Government plan for post-war international money stabilisation, proposing world restoration of the gold standard, states a Washington message. What Mr Morgenthau said, was not disclosed, but a statement issued to the Press outlined the main proposays. These were: (1) The establishment of an international stabilisation fund, to be taken part in by all the United Nations and the countries associated with them who contributed to the fund. (2) The creation of an international board to control the fund, with the participating nations appointing members and with voting power on the board fixed according to each country’s contribution. (3) An agreement among members not to engage in competitive depreciation of their currencies. (4) The attainment of stability by fixing the values of currencies in terms of gold. (5) Retention of established channels, of international trade and international banking for all international transactions.

Mr Morgenthau outlined, the tentative proposals of the United States to participate with the contribution of 5,000 million dollars to the Stabilisation Fund.

The American scheme for a postwar currency system which the United States Treasury submitted to the Allied Governments was elaborated by Mr. Morgenthau’s economic adviser, Mr. H. D. White. It proposes the establishment of a United and Associated Nations Stabilisation Fund of at least 5,000 million dollars resources, consisting of gold and also the currencies and securities of the participating Governments. These Governments’ contributions will be on a fixed basis of the gold holding and trade balances and national incomes of the respective countries. Voting rights on the Board of the Stabilisation Fund will depend on their quotas, the maximum for any country being 20 per cent, of the total voting. . . , The scheme proposes the establishment of a new international monetary unit called the “unitas,” equalling 10 dollars, which will be freely convertible to gold. The Board will have absolute power to fix the exchange rates of the participating countries and also the price of gold. It may authorise a certain range of fluctuation of rates and also call on any member country to buy the currency of any participating country with its Government s consents. The participating countries will be required as soon as practicable to remove exchange restrictions other than those on capital transfers. Unauthorised international capital movements will be presented by closer collaboration between the member countries.