Britain Likely To Oppose U.S. Currency Scheme

Northern Advocate, 8 April 1943, Page 3

Britain Likely To Oppose U.S. Currency Scheme

WASHINGTON, April 7

Outlining the Treasury’s post-war currency stabilisation proposals, Mr. Henry Morgenthau declared that machinery would be established when two-thirds of the United Nations and their associates agreed upon procedure and expressed confidence at a given time when agreement could be reached. A 4000-word plan reveals that the United States exercise power to veto — a provision likely to arouse serious opposition in Britain, where the House of Commons is due to consider a counter-plan drawn up by Mr. J. M. Keynes. Board decisions will be by a simple majority except when important operations require an 80 per cent, vote.

The United States proposes to contribute 2,000,000,000 dollars and presumably will be entitled to 25 per cent, voting power. Thus the United States could prevent other members from mustering the needed 80 per cent, votes on vital issues.

To Eliminate Exchange

The plan follows substantially the five points cabled on April 5. Members arc required to make initial payments to the fund of at least half the total subscriptions in gold currency or Government securities.

Mr. Morgenthau explained that the fund did not constitute an international bank. It would not lend money. However, it would eliminate the need for individual exchange control funds, which would be useable to finance the new fund.

Primary object of the proposals, which were highly tentative, was to assure rapid transition from wartime restrictions on trade and especially to allow war-ridden nations to obtain foreign exchange with which to restart trade immediately after the war. The proposed new 10-dollar international monetary unit, called unitas, would not be issued in the form of notes or coins. Members would deposit gold for credit in unitas, which would be redeemable by gold and transferable between members.

Mr. Morgenthau added that the United States wanted an agreement- to emerge from the impending conference, but did not wish to act the part of a big or rich brother. Ten out of the 37 nations invited to the conference have so far responded enthusiastically. Counter British Proposals The “New York Times” Washington correspondent says that the most conspicuous difference between Mr. White’s and Mr. Keynes' plans is the apportionment of control. Under Mr. White it is on a basis of capital participation, whereas, under Mr. Keynes, it is pre-war trade which would give Britain a greater voice in control, since in 1938 British trade was around 9,000,000,000 dollars compared with the United States’ 6,000,000,000.