An Alternative to Bretton Woods?
In striking contrast with the practically unbroken silence of British bankers on the Bretton Woods proposals, the American Bankers' Association has come into the open with an international monetary plan of its own which it puts forward as a practical alternative. The American bankers, whose suspicion of anything originating in Washington is well known, oppose the Bretton Woods proposal for an International Monetary Fund. The fund, they argue, introduces methods of lending "contrary to accepted credit principles." On the other hand, they would incorporate some of the functions of the fund in the International Bank for Reconstruction and Development—also suggested at Bretton Woods—which would be the medium for monetary co-operation after the war. The special cases arising in the period before the establishment of the International Bank would be met by the existing Export-Import Bank, an American Government institution, with enlarged lending facilities, and the Johnson Act, which prevents loans to nations in default on 191448 war debts, would be repealed. Superficially, this plan has its attractions. It puts emphasis, very rightly, on the virtues of selfhelp, and points out the dangers of bolstering up weak currencies which undoubtedly must arise in the Bretton Woods proposals. That risk is one, however, which must be taken in the interests of achieving monetary stability, and is not to be circumvented by scrapping the International Monetary Fund, and virtually handing over control to an American-dominated Reconstruction Bank. That, in effect, is what the American bankers are suggesting. In return for dollar loans, it seems, other countries, including Britain, would be expected to abandon exchange-restrictions at the earliest possible moment, and open their economies to external influences without retaining effective safeguards. This is not the sort of arrangement which is likely to arouse enthusiasm here, nor, for. that matter, will it command approval among American Treasury officials.
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