Word: bretton
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Rising from his labors at Bretton Woods last July, England's Lord Keynes challenged the critics of the Keynes-White plan (for an international Fund and Bank - TIME, July 31). Said he, in sum, the critics must do more than criticize; they must show a better program. Last week W. Randolph Burgess, vice chairman of the National City Bank of New York, accepting the presidency of the American Bankers Association, accepted the challenge. Banker Burgess may have been disturbed by U.S. bankers' criticisms of the Bretton Woods plan - which in general have not offered a constructive substitute...
Admittedly most of the criticisms had come from conservative elements, which are most vocal. But Banker Burgess wanted to be constructive. Forthwith he set an A.B.A. committee to the task of restudying and possibly drafting simplified or alternative ideas to the Bretton Woods proposals...
...currency stabilization fund blue-printed at Bretton Woods, the U.S. banker-critics who have thus far spoken have raised four major objections...
First Objection. The Bretton Woods proposals, they admit, might work in a stable, orderly world. But the postwar world will be neither stable nor orderly. Some countries will be heavily in debt, while others enjoy vast spendable resources. What they term the "delicate" Keynes-White mechanism is not designed to bridge the gap between these two extremes. As an alternative, the bankers advance the "key country approach." Most of the world's trade, they argue, is carried on in pounds and dollars. Therefore, the dollar-pound rate should first be stabilized, providing a nucleus to which other currencies could...
Second Objection. Step No. 1, say the bankers, is for each country to get its budget under control, stabilize its own price level, and roughly balance its external payments and receipts. The Bretton Woods effort to fix exchange rates, even flexibly, they say, is only a third step which must be preceded by political and economic stability, nation by nation...