The Payments Tangle
The fact that the experts have found it difficult, and the general public impossible, to follow the negotiations for a European Pay- ments Union which have been going on for weeks in Paris is a comment—and a severely adverse comment—on the state of affairs which has been allowed to grow up. The need to remove the barriers to payments by individuals, firms and Governments between one country and another is clear. It is everybody's business. But that need has been so lost to sight, and the tangle of restrictions has become so thick, that it is in danger of becoming nobody's business, simply because nobody can understand it. Yet most of the main elements of the problem are simple. Everybody wants payments to be freed. Everybody agrees in principle to the setting up of a central body to offset and finance surpluses and deficits between European countries. All European Governments will admit in some degree the special status of sterling as the currency of international trans- actions in many other parts of the world besides Western Europe— though not all of them will admit it in public. It should not be entirely impossible to, devise a simpler arrangement than the mystery that now exists. And, indeed, it appears likely that some of the principal difficulties have been cleared away. At any rate the objections of Belgium to the size of the contribution she was at first asked to make to the common fund have been overcome ; the duration of the payments union has been fixed ; arrangements have been made to cover the contribution of the other countries, the case of those who persistently contribute too much or too little to the common pool, and the circumstances in which gold becomes payable ; and the manner of settlement of existing debts has been provided for. This, in the world of foreign exchange complications, may be regarded as the early dawn. The world in general will look forward to the time when it is broad daylight.
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