r __ _
World Monetary Plans
Seen as Boon to Trade
Funds Would Help Restore Production and
Stimulate Exchange of Goods in
Postwar Era, Treasury Says.
By BAUKHAGE
Newt Analyst and Commentator.
WNU Service, Union Trust Bnlldlni
Washington, D. C.
I have Just come from a luncheor
of creamed chicken and rice, greet
salad and trimmings. The food wai
not, however, the interesting part oJ
the affair. The "food for thought"
that went with it, was. And so wai
the setting. We were served from a
large oval table in the conference
room of the United States treas
ury. The hosts were Secretary ol
the Treasury Henry Morgenthau and
a squad of his fiscal experts.
The subject of the conversation
was the same one which was dis
cussed at many of the more than
200 conferences which took place
around that same table and which
led up to the Bretton Woods mone
tary conference last July. Today
that same subject is before Con
gress in the form of pending legisla
tion which would authorize Ameri
can participation in an international
bank of reconstruction and develop
ment and an international monetary
fund.
Upon the passage of this legisla
tion and the creation of the bank
and fund, the master-minds on
money matters tell me, depends
the success of any world security
organization which may come out of
the United Nations meeting at San
Francisco.
Aim to Stop
Economic Warfare
The reason for that statement,
boiled down to its essence is this:
you can't stop international warfare
unless you stop economic war
fare.
Economic warfare in this sense
means international trade practices
not in the common good?spe
cifically some of the practices in
dulged in by nations competing for
foreign trade before and after the
grand smash of '29.
How is this warfare to be re
strained?
Quid pro quo, of course. In the
vicious fight for trade after the
war a large number of nations will
have three strikes on them to start.
They are wrecked, some physically
and a great many more financially,
politically, economically. Those
which will emerge less affected by
the war scourge, like the United
States, will be equally affected if
they have nobody with money or
credit enough to buy their goods.
mere lore in exchange (or an
agreement to abide by certain fair
practices as we might call them,
and contributions in cash or its
equivalent, under the Bretton Woods
agreement a nation would receive
membership in an international
bank which would guarantee pri
,vate loans?make some direct?for
the purpose of reconstruction and
development so they can build fac
tories and do other things necessary
to create goods to sell and earn
money to buy. These loans would
be loans In which the risk is too
great for a private institution to
take, and which if they were made
and bends offered to the public the
bublic wouldn't touch. But guaran
teed by the international bank over
a long term, private bankers would
lend the money and the public, with
the word of 44 nations behind the
bonds, would hardly be skittish.
r Th? monetary fund would be
created for the purpose of stabiliz
ing exchange, and facilitating the
?ffowth of international trade. The
members would agree to tie their
exchange to the gold standard and
not change it unless the governors
and directors of the fund ap
prove. This would stop, among other
things, what amounts to impos
ing hidden tariffs on foreign goods
by changing the rates of exchange
of a country's currency in terms of
other nation's currency. In their
mad efforts to export goods at any
price and get credits abroad, the
Germans had all sorts of different
kinds of marks that had one value
here and another there.
As to the administration of the
bank and fund, a very careful
system has been worked out regu
lating the amount of financial
responsibility each country would
have. The figure would be based on
the trade of a nation over a certain
past period with some other modi
fications. For Instance, the United
States would assume roughly one
third of the financial responsi
bility and have one-third of the votes
[ on how the money or credit is to
be handled.
1 Relief' for U. S.
j Banker*' Risk,
[ One of the chief arguments as to
? the direct value of the program for
, the United States is this: it is eatl
, mated that in the postwar pe
i riod, the United States bankers will
. have tb do the bulk of the world
. lending. Estimated on the amount
we did after the last war, perhaps
as much as 90 per cent. Rather
than have the lenders risk the loss
as they did last time, it would be bet
ter to have the government and the
governments of the rest of the na
tions bear two-thirds of the risk.
This they would do under the inter
national bank. It is pointed out by
treasury officials that not only will
most of the money be borrowed
from private bankers in this coun
try for the next five or ten years
(since we have most of the money to
loan) but most of it will likewise be
spent here since we have most of
the things foreign countries need.
There are two chief reasons why
such an international financial pro
gram will be to the disadvantage of
the private banker although by no
means all bankers oppose it. One
is that the governments of nations
will control the world fiscal policy
and not the leading private inter
national bankers who had the con
trol before. The second is that in
the long run, as sponsors of the plan
admit, it will lower interest rates.
Those two reasons are not stressed
by the vocal opponents of the
measure before members of con
gress. Many other objections, some
highly technical, are set forth. The
main suggestion in the report of a
committee of the American Bankers
association is that because of un
settled political conditions through
out the world, any action ought to
be postponed until these conditions
stabilize. They say that the nations
should agree to certain changes in
the program before it is presented
to the congress.
Some of the changes suggested are
prompted by honest conviction,
some are due, according to treasury
officials, to a misinterpretation of the
program. There is a group in the
United States which says that the
United States will come out of the
little end of the horn under the ar
rangement and that the British sold
us a bill of goods. There is a group
in England which says that Brit
ain will come out of the little end
of the horn and that the United
States sold their representatives a
bill of goods.
i n it i 13 one uung wnicn, quite
aside from the arguments pro and
con on the various disputed parts of
the program, demonstrates that it
must be pretty good.
? ? a
Some weeks ago in this column I
tried to explain "Why Germany
came back" after its defeats in
France.
May I be permitted to explain
why the Nazis couldn't come back
for the second time?
Once again we have to consider,
not the military organization of Ger
many alone, but the civilian or
ganization as well, Nazi discipline,
beciuse ii was built on an entirely
anti-human foundation, finally col
lapsed. It W&1 a discipline of (1) de
celt, (i) force. Both were bound to
fail in the end because it failed
to take Into consideration one thing
which the Nazis refuse to admit
exists?the human soul.
Nazllsm with threats, brute force,
and an organization which could
carry out the threats and exercise
the force, was effective up to a cer
tain point. Then it failed.
Its strength was in "bending the
twig," as I tried to point out In my
earlier analysis. Youth worshipped
the false god of Nsziism as long as
its clay feet could be concealed.
Youth knew no other god. But the
moment the clay feet crumbled in
the defeat of its armies (I.e. force
failed) youth deserted.
Even the older people, despite the
numbing fear of the espionage of the
[ gauleiter, the fear of the concen
tration camp, fear of the firing
squad, began passive resistance.
The Volkasturm (the military unlit
I- drafted by Himmler) refused to
> fight, refused to assemble when or
? dered, hid. Regulations were evaded,
i Taxes went unpaid.
BARBS... by Baukhag?
Om reason why SUlta can't leave
Russia to meet even the world's
bigwigs was revealed at the Yalta
conference?he makes all the mili
tary decisions himself.
? ? ?
The Japanese government has
taken over all the airplane factories,
giving the Jap ^todustrlaBsta whs
In spite of the shortage of nurses,
doctors, dentists, ths health of the
nation, according to OWI, shoars no
serious decline. Probably lost a
case of supply and demand.
? ? ?
General De Gaulle says that
Prance needs 13 million "fine
babies" in the next M years. Be
may not get 13 million bat they win
all be "flna"?aak Mr mothers.
Manila Wracked and Gutted by Spiteful Demolitions
Once-proud Manila Joins the cities of the dead, wracked and potted by battle and the spitefn] demoli
tions of the Japs. The stately buildings which formerly housed government and industry are now largely hol
low shells. The marts of trade echo only to the crash of falling timbers. Reins of the civil government return
to the Philippine commonwealth, and the battered capital binds its wound and looks forward to a rebirth.
Postwar Sleeping Cars to Show Radical Changes
The new Pullman three-tier deeper, to be used in postwar period, Is shown in upper left. Lower left,
the duplex-roomette railroad ear is one of several new designs being presented to railroad officials by
the Pullman company. Upper right, the traditional rectangular table arrangements give way to a modernised
scheme in the new diner. Lower right, a redeap captain examines revolutionary method of handling luggage on
the new coach model.
American Farmer in Germany
Even la eeaqaered German territory. Pvt. Harold W. Barnes of Cea
terbnrg, Ohio, teds time to pat late practice the knowledge acquired
ea a (arm at Ceaterbarg. He was right at home when he foend the new
litter of pigs at a farmhoase near Siadorf, Germany, and helped to
paB them threagh their drat days under American occupational rale.
Nazi Type Air Raid Shelter
German air raid ahaHcra have been working overtime thaaka to the
Anaertean air (arena. Photo afeowi Ptc. Archie Bakay. Akron, Ohio, loft;
and Flo. Charles Saaart, FraakHa, N. C., with m alert aa they
laapaet nan to the tyyiaal ahaltara to Dnrnn, Gnrmaay. They are Infantry -
aaaa to thn IMth dtvtotoa to tha C. 8. lot araay.
G.I.S Nearer Japan
I 1
a*ni
sis
^Kuzon
^PHILIPPINE
^JfliilSLANDS
?%
INDANAO
IZAMBOAWOH
PACIFIC
OCEAN
American navy, marines and in
fantry, supported by tank corps,
continue to advance island by island
toward Tokyo. Hap shows how new
landing gives the American forces
control of the entire Philippines.
New Big Ten Chief
Photo shows Kenneth "T?|" WU
Ma, former ithletie director at
Northwestern aittrilt;, who has
Just bees appointed commissioner of
the Bt( Tea eoafereaee. Be haa re
PLOT ON HITLER
Those whose business it is to
study the intricate problem of Ger
man politics have now come to .the
conclusion that if it hadn't been for
the July 20 putsch against Hitler,
we might have been saved six
months or so of fighting.
The attempt on Hitler's life gave
him the excuse to clean out every
military man not in sympathy with
the war, and his military leaders
since then have lacked the courage
to suggest an armistice ? even
though they knew the war was hope
less.
Here is the inside story of what
happened.
The Hitler plot had been clev
erly arranged by the British.
They had been working for
months with a small secret seg
ment of anti-Hitler officers In
side the German army. Actual
ly, their pipelines into Germany
had been laid even before the
war started. Weeks and weeks
of the most minute planning
had gone Into the plot.
However, as in anything as
dangerous as an attempt to as
sassinate the world's chief mad
man, something went wrong at
the last minnte. A high-up Ger
man officer on the general staff
had agreed to place a brief
case containing a time-bomb
alongside Hitler's chair during
a meeting of the general staff.
He did so. But either Hitler
moved away or else did not sit
where expected. At any rate
when the bomb went off, it
killed several officers, but Hitler
was only wounded in the hand
by a bomb fragment.
That incident, however, touched
off the bloodiest blood purge in his
tory. Neutral sources estimate that
100,000 German officers and other
high-up officials suspected of anti
Hitler bias were killed. Any Ger
man leader who had grown cool re
garding the war or was slightly
critical of Hitler was included.
In the last war, it was the Ger
man general staff who demanded of
the Kaiser that he sue for peace
as early as September 29, 1918.
The German civilian government re
sisted. In this war it was expected
that the professional military caste
would see the futility of further fight
ing and also sue for peace after the
Normandy invasion last June.
But as a result of the July purge
the military leaders who survived
dared not brave Hitler's wrath.
POSTWAR CONSCRIPTION
Although no final decision has
been made by FDR personally,
Undersecretary of War Bob Patter
son and several other White House
advisers are urging him to press
for immediate congressional action
on a postwar compulsory military
training law covering all men 18
to 26.
Patterson and some of the army
brass hats want Roosevelt to jam
the conscription bill through con
gress before the war is over. They
are using the line with FDR that
passage of a peacetime conscription
bill by congress now will be further
evidence to the United Nations that
this country will maintain a sizable
military force to help keep the
peace.
Congressional leaders so far are
against immediate consideration,
feel they'll have their hands full in
the next few months getting more
urgent postwar measures through
capitol hill, such as jobs, without
starting up a terrific controversy
over conscription.
Note: The White House is be
ing deluged with mail against
postwar conscription. Most of
the public seems to be against
it.
? ? ?
CAPITAL CHAFF
fl_ The German people have been
ordered to kill all chickens in order
to save feed.
4. A secret report has been cir
culated among top WPB officials
showing that, as of February 1, the
manpower situation was excellent.
Manpower Commissioner McNutt
has told the senate military affairs
committee privately the same thing.
. . . Senator Chandler of Kentucky
quoting Vice Chairman William Batt
of the WPB "That we have already
out-produced our enemies and our
Allies."
C. Representative Charles La Fol
lette, liberal Indiana Republican
and a close friend of Wendell L.
Willkie, never had met his son,
Philip Willkie, until his recent trip
to London where Lieutenant Will
kie was stationed. A few days later
La Follette bumped into Philip acci
dentally in New York, and a few
days after that Willkie arrived in
Washington and was a guest at La
Follette's home.
C The Norwegian embassy has pro
tested to Louis B. Mayer against
Metro - Goldwyn - Mayer's plan to
screen "Victoria," by novelist Knut
Hansun, who turned quisling. The
Norwegians don't want any book by
any quisling featured in Hollywood.
Three weeks have now passed and
the Norwegian embassy is wonder
ing why Louis B. Mayer has not
replied.
(. The California Veterans of For
eign Wars have requested Roosevelt
to drop deportation proceedings
against west coast labor laader
Harry Bridges.
THE MM
I cu\'t keep vp witk j
* aWlfcs in Art.
And Poesy* meeivlering*
I do admire, cultured
Polk* ?
Tkey know *o rrajmy j
little tkinda.
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