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AGOOD deal of the hostile criticism direc international currency plan in the House o to the obscurity of the White Paper, and in par it involved a return to the gold standard.
in the House of Lords on Tuesday shoul The proposed arrangements remove the dangers that were associated with the old gold standard. Under the plan the external value of sterling will have to conform to its internal value, as determined by our own monetary policy, and not the other way round. As soon as the world begins to recover from the first period of chaos, when strict controls will be essential, trade will be able to benefit from conditions in which the currencies of one country can be converted into other currencies with a reasonable assurance of stability. It is of the first importance to us to be able to sell to one country and use the proceeds to buy from others. Hope lies in multilateral trade agreements, not bilateral. Moreover, the wheels of trade, as Lord Keynes put it, will be oiled by a great addition to the world's stock of monetary reserves. These reserves will meet the first shock of depression conditions ; and it is of the greatest importance that the Americans should agree to a measure of protection against the absorption of the rest of the world's reserves in meeting the claims of a creditor country which insisted on exporting more than it imported. It would be difficult to exaggerate the importance of the creation of an international organisation which would both exercise routine functions and afford opportunities for expert discus- sion and joint decisions. As for the suggestion that what matters most is not currency but trade, and that commercial problems should be settled first, the answer, of course, is that both problems must be solved, but that the solution of one of them will help in the solution of the other. In fact, the new plan, on the assumption —an important one—that it is understood in the same sense by all the parties to it, creates many of the conditions necessary to the reconstruction of international trade. There is every reason to be gratified that the Americans have gone so far along the r)ad of monetary co-operation. If the United States accepts the scheme it would be a disaster for us to reject it.
