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Show I World Monetary Plans F C3R I Seen as Boon to Trade Funds Would Help Restore Production and llr W Stimulate Exchange of Goods in . Postwar Era, Treasury Says. By BAUKHAGE Veics Analyst and Commentator. WNU Service, Union Trust Building Washington, D. C. I have just come from a luncheon of creamed chicken and rice, green salad and trimmings. The food was not, however, the interesting part of the affair. The "food for thought" that went with it, was. And so was the setting. We were served from a large oval table in the conference room of the United States treasury. treas-ury. The hosts were Secretary of the Treasury Henry Morgenthau and a squad of his fiscal experts. The subject of the conversation was the same one which was discussed dis-cussed at many of the more than 200 conferences which took place around that same table and which led up to the Bretton Woods monetary mone-tary conference last July. Today that same subject is before Congress Con-gress In the form of pending legislation legisla-tion which would authorize American Ameri-can participation in an international bank of reconstruction and development develop-ment and an international monetary fund. on how the money or credit is to be handled. Relief for U. S. Bankers' Risks One of the chief arguments as to the direct value of the program for the United States is this: it is estimated esti-mated that in the postwar period, pe-riod, the United States bankers will have to do the bulk of the world lending. Estimated on the amount we did after the last war, perhaps as much as 90 per cent. Rather than have the lenders risk the loss as they did last time, it would be better bet-ter to have the government and the governments of the rest of the na-tions na-tions bear two-thirds of the risk. Thil they would do under the international inter-national bank. It is pointed out by j treasury officials that not only will most of the money be borrowed from private bankers in this country coun-try for the next five or ten years (SlnCS we have most of the money to i loan) but most of it will likewise be spent here since we have most of the thintrc fnriaicTn nnnntrifiQ nnpH Upon the passage of this legislation legisla-tion and the creation of the bank and fund, the master-minds on money matters tell me, depends the success of any world security organization which may come out of the United Nations meeting at San Francisco. Aim to Stop Economic Warfare The reason for that statement, boiled down to its essence is this: you can't stop international warfare unless you stop economic warfare. war-fare. Economic warfare in this sense means international trade practices not in the common good specifically spe-cifically some of the practices indulged in-dulged in by nations competing for foreign trade before and after the grand smash of "29. How is this warfare to be restrained? re-strained? Quid pro quo, of course. In the vicious fight for trade after the war a large number of nations will have three strikes on them to start. They are wrecked, some physically and a great many more financial- There are two chief reasons why such an international financial program pro-gram will be to the disadvantage of the private banker although by no j means all bankers oppose it. One is that the governments of nations will control the world fiscal policy and not the leading private international inter-national bankers who had the control con-trol before. The second is that in the long run, as sponsors of the plan admit, it will lower interest rates. Those two reasons are not stressed by the vocal opponents of the measure before members of congress. con-gress. Many other objections, some highly technical, are set forth. The main suggestion in the report of a committee of the American Bankers association is that because of unsettled un-settled political conditions throughout through-out the world, any action ought to be postponed until these conditions stabilize. They say that the nations should agree to certain changes in the program before it is presented to the congress. Some of the changes suggested are prompted by honest conviction, some are due, according to treasury ly, politically, economically. Those which will emerge less affected by the war scourge, like the United States, will be equally affected if they have nobody with money or credit enough to buy their goods. Therefore in exchange for an agreement to abide by certain fair practices as we might call them, and contributions in cash or its equivalent, under the Bretton Woods agreement a nation would receive membership in an international bank which would guarantee private pri-vate loans make some direct for the purpose of reconstruction and development so they can build factories fac-tories and do other things necessary to create goods to sell and earn money to buy. These loans would be loans in which the risk is too great for a private institution to take, and which if they were made and bonds offered to the public the public wouldn't touch. But guaranteed guaran-teed by the international bank over a long term, private bankers would lend the money and the public, with the word of 44 nations behind the bonds, would hardly be skittish. The monetary fund would be created for the purpose of stabilizing stabiliz-ing exchange, and facilitating the growth of international trade. The members would agree to tie their exchange to the gold standard and not change it unless the governors and directors of the fund approve. ap-prove. This would stop, among other things, what amounts to imposing impos-ing hidden tariffs on foreign goods by changing the rates of exchange of a country's currency in terms of other nation's currency. In their mad efforts to export goods at any price and get credits abroad, the Germans had all sorts of different kinds of marks that had one value here and another there. As to the administration of the bank and fund, a very careful system has been worked out regulating regu-lating the amount of financial responsibility each country would have. The figure would be based on the trade of a nation over a certain past period with some other modifications. modi-fications. For instance, the United States would assume roughly one-third one-third of the financial responsibility responsi-bility and have one-third of the votes officials, to a misinterpretation of the program. There is a group in the United States which says that the United States will come out of the little end of the horn under the arrangement ar-rangement and that the British sold us a bill of goods. There is a group in England which says that Britain Brit-ain will come out of the little end of the horn and that the United States sold their representatives a bill of goods. That is one thing which, quite aside from the arguments pro and con on the various disputed parts of the program, demonstrates that it must be pretty good. Some weeks ago in this column I tried to explain "why Germany came back" after its defeats in France. May I be permitted to explain why the Nazis couldn't come back for the second time? Once again we have to consider, not the military organization of Germany Ger-many alone, but the civilian organization or-ganization as well. Nazi discipline, because it was built on an entirely anti-human foundation, finally col-lapsed. col-lapsed. It was a discipline of (1) de- j ceit, (2) force. Both were bound to fail in the end because it failed to take into consideration one thing which the Nazis refuse to admit exists the human soul. Naziism with threats, brute force, and an organization which could carry out the threats and exercise the force, was effective up to a certain cer-tain point. Then it failed. Its strength was in "bending the twig." as I tried to point out in my earlier analysis. Youth worshipped j the false god of Naziism as long as Its clay feet could be concealed. Youth knew no other god. But the moment the clay feet crumbled in i the defeat of its armies (i.e. force failed) youth deserted. Even the older people, despite the numbing fear of the espionage of the gauleiter, the fear of the concentration concen-tration camp, fear of the firing squad, began passive resistance. The Volkssturm (the military unfit drafted by Himmler) refused to fight, refused to assemble when or- j dered, hid. Regulations were evaded. Taxes went unpaid. |
