Herinneringen en dagboek (3 delen)

[p. 1617]

Bijlage 37

16 Maart 1934

Heldrings notities bij de nota-Gregory
(vgl. p. 1065)

I can subscribe almost word for word to Prof. Gregory's admirable memorandum. Although in my opinion the present crisis does not originate in monetary causes, but in governmental interference with production and distribution, monetary and financial policies are mainly responsible for the crisis having assumed its chaotic character and for the destruction of credit and confidence the world over. The instability of exchanges does more than anything else to hamper trade. Depreciation of currency may of may not lead to a rise of internal prices - depending on the economic structure of the country - but it certainly contributes to depress prices elsewhere and in the case of the goldbloc to painful deflation especially in those of the gold countries where internal price adjustment has made least progress. It exercises, therefore, a dangerous temptation to foster international competition in currency-lowering, leading, in the long run, inevitably to ruin and the menace of social upheavals on an unprecendented scale.

The first thing to do, therefore, is to restore confidence in each other's will to come back to stability of exchanges concerning which I share Prof. Gregory's belief that it will be followed by an advance of prices, the resumption of international lending and improvement of trade. The first condition to be fulfilled where stability of exchanges can be secured is the removal of all doubt that the United States may go further on the road of currency depreciation. Once the certainty existing that America will not devaluate the dollar any further, there is every probability that world prices will commence to rise, which will facilitate the de facto fixation of exchanges by other countries and weaken the tendencies, there existing among exporting interests to let the exchange go in order to be able to fix it sooner or later at what is deemed an advantageous rate. It is quite possible that internal adaptation may involve some final depreciation on the part of one or more gold countries, but if that necessity arises in the transition stage preceding de jure stabilisation it will not upset the process.

If on the other hand America resumes her devaluation policy there is every likelihood of the gold countries being unable to resist the strain and having to come off the gold standard notwithstanding the efforts on the part of their governments to maintain it. Stress should be laid on the extreme danger of

[p. 1618]

this eventuality for the further development of the world economic and financial situation, the goldbloc acting as a barrage preventing the water from flooding the land. The countries off gold should, in their own interest, strengthen, not weaken it.

A point which Prof. Gregory had not raised are the conditions to be fulfilled to ensure the durable stability of exchanges and perhaps they should be left over to be dealt with until the time when some degree of de facto stabilisation has been attained. However, we cannot hide from our view the fact that unless the wardebts form no longer a disturbing factor in the financial relations of states and nations agree to be paid in goods to a far more liberal extent than obtains to-day, durable stability in the rates of exchange will belong to Utopia.