Group Perseverance

At The Hague last week, Finance Ministers and central bankers from ten nations paused during a two-day conference on international monetary problems for a banquet at Het Prinsenhof, the royal residence of William of Orange. Presiding as host, Dutch Finance Minister Anne Vondeling toasted his colleagues with an old French proverb: "Point n'est besoin d'esperer pour entreprendre ni de reussir pour perseverer [One need not hope in order to undertake, nor succeed in order to persevere]." Next day, by a 9-1 vote, with France's Michel Debre the only holdout, Ministers of the Group of Ten agreed to persevere some more.

Enough? The ten are the U.S., Britain, Japan, Canada, Italy, West Germany, Holland, Belgium and Sweden, with Switzerland a nonvoting participant. Among them, they hold 80% of the world's gold and do most of its international trade. For nearly three years, they have been pondering whether enough gold and reserve currencies (the dollar and the pound) are available for the world to conduct its business.

The interminable discussions polarized the group into two blocs. Continentals, suspicious that reform was being urged in order to help the U.S. and Britain ease their own money troubles, urged both to solve their balance-of-payments problems before other action is taken.

U.S. Treasury Secretary Henry Fowler took another tack. Contingency planning, he said, should begin as soon as possible and involve poor nations as well as rich. By last week's vote, the Ten agreed not only to continue seeking some kind of reform but also to broaden deliberations by including the 20-member executive board of the International Monetary Fund. Half the board is drawn from Group of Ten nations, but the other members represent African, Arab, Asian and Latin American countries, which will now be able to insert poor-nation needs and notions into the debate and perhaps break the longtime deadlock.

Yankee Optimism. The vote was a victory for the U.S., but only of a procedural kind. Still to be decided is the question of which reforms should take place, and on this matter the delegates are as divided as ever. One European bloc, including West Germany, Italy and Holland, is in favor of creating a new kind of money, dubbed the "cru" (for composite reserve unit), which would take its place along with the dollar and the pound in the reserves of the world's central banks. Belgium and Switzerland opt instead for merely increasing the borrowing rights that 103 nations already have with the International Monetary Fund. Other nations, including the U.S., would agree to a combination of the two plans.

Secretary Fowler, with Yankee optimism, predicted last week that, with proper give and take, monetary reform could be accomplished by 1968.

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