RESTRICTIONS REMOVED

Nelson Evening Mail, Volume LXVI, 14 November 1934, Page 5

RESTRICTIONS REMOVED

DEALINGS IN FOREIGN EXCHANGE U.S.A. TREASURY ACTION (United Press Association-By Electric Telegraph—Cop'yrignt) WASHINGTON, 12th November. Restrictions upon transactions in foreign exchange imposed when the United States Treasury initiated its attempt to regulate the value of the dollar abroad, were removed to-day by the Secretary I.Mr Morgenthau). The requirement that Treasury permission be obtained for all shipments of currency and transfers of credit abroad was eliminated, and in its stead was substituted one that those dealing in sums exceeding 6,000 dollars in any week report to tlie nearest Federal Reserve Bank, so that a tab might be kept on the movements of capital. L'lie new order will permit people to take their money out of the country whenever they desire without asking Government permission.

With acknowledgement oT the need for stability in international exchange of currencies made bv the United States in a memorandum to th L , International Institute of Agriculture at Rome, there follows need for the United States coming to a decision as to what policy she will pursue in regard to the development of her foreign trade. The “Guarantry Survey,” the journal of the Guaranty Trust Company of Now York, sets forth tho alternatives before its Government. Tlie Government, the “Survey” writes, may consider it more important to stress the immediate needs of business and make every effort to sustain and increase foreign outlets for United States products in order to speed the process of domestic.industrial.recovery. Or it may endeavour to give foreign nations an opportunity to meet service payments on the foreign obligations held in i 4 United States in addition to paying for current United States exports. In making the choice between these two alternatives, the “Survey” continues, the Government is presented with no easy task. If future . trade agreements are designed primarily to maintain present markets abroad and to find new ones, they will greatly jeopardise tho prospects for repayment to holders of foreign obligations in this country; for, as long as tho United States holds a barge share of the world’s monetary gold supply and continues to maintain an export surplus, foreign nations cannot acquire the means with which to pay their obligations in. this country. On the cth ;r hand, if principal and interest payments on foreign debts are made tlig chief objective, another set of difficulties is encountered; for the theoretical advantages of tariff reduction are subject to the practical consideration that the industrial structure has been built up behind a protective wall and that any sudden and injudicious large-scale tariff reduction would probably bring about an immediate disorganisation of American industry that would more than offset any possible advantages for some years to come. In view of the many complex factors involved, the most expedient foreign trade policy for the United States, the “Survey” cous'ders,' would seem to bo one of compromise between tlie two possible extremes. . Negotiations for the expansion of foreign markets for her proaucts are highly desirable; but such negotiations must, be based on a frank recognition that import concessions must be made in return. The concessions cannot be permitted to disrupt the domestic markets of American producers.; but they must be substantial enough to permit the payment of the obligations due to the United States, for the result of permanent default would be to destroy the foundations of international credit and to force upon tlie world a regime of narrow nationalism that would indefinitely defer trade recovery, would be economically destructive to some nations, and would lowe’’ standards of living throughout (lie world ns long as it continued.