1,300 Men with a Mission

When the Great Chief of the White House

Called the tribes of men together For a conference on wampum In the forest of New Hampshire, Came the prophets of the nations, Foremost in their craft and wisdom. . . . Keynes urged, "Be not slave to wampum, Throw away the truss of wampum, Start a fund for prudent lending, That all tribes of men may borrow, Each get credit from the other, Using anything for wampum, Sterling, beads or even fishbones." Morgenthau, the Chief of Wall Street, Tighter strapped the belt of wampum, "My world bank for reconstruction Must be on a wampum basis." So they reasoned as they wrestled, While they both exclaimed together-- "Let us order world finances, Let us keep away inflation, Let us stabilize exchanges For the profit of the people. . . ."

This quaint view of Bretton Woods (taken by "Sagittarius" of London's New Statesman & Nation) was no stranger than some of the things that went on at the International Monetary Conference last week.

The conference danced: Mignon MacLean, a blond diplomat from Arthur Murray's dance studios, turned up and soon had bewitched 20 of the 1,300 wise and wizened men of finance into signing up for dancing lessons.

Economists sang: one evening H. E. Brooks, a good pianist who is also a mem ber of the British delegation, sat down in the lounge and rippled out The Blue Danube, favorite tune of Lord & Lady Keynes (the former ballet dancer Lydia Lopokova). The peer and the peeress sang the words for the delegates near them.' Money vanished: while delegates up stairs in the Mt. Washington Hotel tried to conjure up world money, downstairs in a little bar (with a small orchestra and drinks at $1 a throw), Cardini the Magician made money disappear in his long fingers.

Serious Business. But the conference actually worked very hard. Even over drinks men talked nothing but money business. Sessions went on all day, including the Fourth of July, and most of the night. The delegates' attitude was: "This meeting is crucial. We must get workable results."

Said one finance minister as he sat down to lunch with a glass of milk: "I can't drink this wonderful milk without thinking of my children"--somewhere in occupied Europe, if still alive. Delegate Edward Eagle Brown, president of Chicago's First National Bank, went about for days in the same rumpled blue serge suit with cigar ashes accumulated on its front, his eyes bleary from lack of sleep, conferred with less-rumpled Economic Stabilizer Fred M. Vinson.

Every afternoon the Treasury's Harry White held a press conference--in effect, a seminar on world economics, answering questions about the meaning and expected effect of the measures under consideration.

One afternoon Lord Keynes, tall, slow-moving and quick-witted, appeared as guest star at this session, gazed on questioners like a kindly, elderly uncle. Then, for nearly 90 minutes, he parried questions on the gold standard and capital movements.

Conference Worries. All the foreign delegates were anxious about the possibility that Congress might reject the work of the conference. U.S. bankers, the only American group articulate about the conference, have been highly critical of the whole proposal--perhaps partly out of fear of losing some of their power in foreign-exchange and foreign-investment business, partly out of dislike of all change and from misunderstanding of the Bretton Woods proposals. Some of the bankers' criticisms:

P: An $8,000,000,000 to $10,000,000,000 Stabilization Fund is much bigger than needed. The general Bretton. Woods view: the Fund is, if anything, too small for the problems ahead.

P: The U.S. ought to help stabilize ex change by lending money directly to other nations, but the U.S. will merely lose its capital if it puts its capital into a fund which will be managed by directors, the majority of whom will be borrowers. The Bretton Woods view: in the Fund, all nations will have capital at stake and each will have an interest in actively joining the U.S. to see that the loans to every other nation are sound.

P: If a government is unwilling to adopt sound fiscal policies to stabilize its own currency, it may take advantage of the Fund to escape from the ordinary penalties of inflation. Bretton Woods view: this is true if the Fund would permit its facilities to be abused. Unless each country stabilizes its currency domestically, no efforts to stabilize exchange--the ratio between currencies--can be permanently successful. But in the case of a temporary recession, or other postwar difficulty, a nation aided by the Fund could have a few months to set its affairs in order without resorting to embargoes, currency depreciation and other measures that upset world trade.

Like the U.S. bankers, but for different reasons, some of the best financial brains at the conference--men from smaller countries which recognize that they have to play a secondary part--were not awestruck by the wisdom of the U.S. and British delegations. (Said one European, wise in the ways of international finance: "The British are too much like schoolteachers. And the Americans are too much like schoolboys. Sometimes I feel like raising my hand and asking to be excused.")

In general, the conference was in the stage where every group was trying to persuade the others. Nothing approaching final decisions had yet been reached. Some of the subjects:

Quotas. How much the various nations will subscribe to the capital of the Fund and the bank is important, since a nation's voting power will be roughly proportioned to its quota. France and Russia wanted bigger quotas than they were expected to get--but the statisticians had not yet figured out what the table of quotas would be.

Besides a bigger quota, the Russians were reported to be interested in a high gold value for the ruble.

One big worry of most occupied countries is the amount of money that U.S. troops will spend in their territories during the Liberation. In the postwar world such countries would generally like to value their currencies low for the sake of trade, but the lower their currency is valued, the more inflationary are the relatively big amounts of their currency which the doughboys will have to spend.

Down with B.I.S. The Norwegians tried to open a hornet's nest with a sudden proposal that the Bank for International Settlements at Basle be liquidated and a commission appointed to investigate its policies during the war--a direct hint that B.I.S. deals have been pro-Nazi. The Dutch and several other European nations opposed this suggestion on grounds that B.I.S. was the first international financial institution that ever worked, and that the assets of the Bank belong to Europe's central banks, which alone have a right to liquidate it.

Indian Blockbuster. India owns about one-third of the huge bank balances--nearly $12,000,000,000--accumulated in Britain by other nations (including her colonies) for war materials and services. India's delegates wanted the Fund to liquidate these sterling balances so it could spend them to buy goods elsewhere than in Britain. This proposal worried the British, since they could not possibly pay .the huge debt except in goods over a period of years. Other nations worried because the whole $8,000,000,000 Fund could have been exhausted in liquidating these sterling balances alone.

An Indian resolution to liquidate the balances was defeated in committee on the grounds that the Fund was not being established to handle such problems. As a result, the direction of India's postwar trade will depend on Britain's balance of trade: if Britain has a favorable balance and can spare foreign exchange, India will get her share and can trade with it where she will. Otherwise, India will be forced to do the bulk of this trading with England.

Fund and Bank. The proposed World Reconstruction Bank was a relative afterthought of the British and Americans who drafted its plan during the conference. Notable feature: the Bank would primarily guarantee loans, expected to come principally from the U.S., so as to reduce the American risk. To most of the delegates from European countries, the Bank is of prime importance. They do not see how the stabilization scheme can work without it. Unless they get loans to rebuild their industries, they cannot export goods to pay for what they need from abroad, and without internal economic stability, the Fund's attempts to support their exchange internationally would be futile.

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