Dollar vs. Pound

A recent statement of the Federal Reserve Board to the effect that in the reconstruction of Europe--and particularly in the case of Germany--the dollar should be established as the international currency standard, caused trepidation abroad. Financial London, after a touch of goose flesh, has regained its habitual British sangfroid. Financial writers point out London's superior experience in foreign trade and its physical nearness to the world's ports compared with New York's. It has no intention of seeing the dollar usurp further the central and basic position in international trade occupied so long by the pound sterling. On the other hand, America's impregnable strength in gold reserves, and the absence of the gold standard just at present in British international financing, are clearly recognized. In Germany, the question as to whether their new credit structure should be based on the pound or the dollar is being widely debated. Last week one philosophizing critic asked: "What would happen to America if Europe suddenly decided to abandon the gold standard entirely?" He conjectured that America was becoming alarmed because of her tremendous and mounting gold resources.