29 JUNE 1962, Page 12

So we come back to the underlying weakness of our

Western capitalism—the shortcomings of our system of international exchange, the inade- quacies of our trading reserves. Imports have to be paid for by exports or settled by cash from the gold reserves or by credits, and the credits have to be based on gold or the equivalent in gold currencies. Lord Boothby hit the nail on the head in a letter to the Times of June 20: 'The truth is,' he said, 'that the exchange system of the free world has broken down, as many of us predicted it would when the Bretton Woods agreement fixed the price of gold, fixed exchange rates [based on gold] and failed to provide the necessary reserves.'