Empire Money

In London three statesmen have been wrestling with dollars, pounds and francs as the mythical Trojan priest Laocoon and his two sons once wrestled with snakes which crushed them for the crime of defying Apollo. Recently the London News Chronicle, which favors cartoons of classic inspiration, printed a Laocoon group (see cut) in which the currency serpents coil around British Chancellor of the Exchequer Neville Chamberlain, James M. Cox, U. S. Delegate and Chairman of the World Conference Monetary Committee, and French Finance Minister Georges Bonnet. Last week, a few hours after the Conference adjourned (see p. 16), Chancellor Chamberlain was able to issue a joint declaration by the Mother Country and all dominions except the Irish Free State which proved his prowess as a fiscal snake charmer.

Throughout the Conference, dominion delegates eager for a little "inflationary Roosevelt prosperity" in their own lands have been pressing Chancellor Chamberlain to hitch Empire currencies in multiple harness with the dollar (TIME. July 24). Quietly Mr. Chamberlain took offices across the way from the World Conference, placed himself at the disposal of dominion delegates and proceeded to argue them down. The final session lasted 90 minutes, ended in an Empire Declaration pledging the Mother Country, Australia, Canada, India, New Zealand and South Africa to strive for: 1) A further rise in Empire wholesale prices to be stimulated by Empire Government policies of "low rates of interest and an abundance of short-term money . . . within the limits of sound finance" and with inflation "depreciated."

2) "Stability of exchange rates between the countries of the Empire in the interest of trade."

3) "The lowering or the removal of [trade] barriers between countries of the Empire."

4) "Restoration of a satisfactory international gold standard."

As a loophole, in case the Empire countries should eventually desire to embark on Rooseveltian finance, Chancellor Chamberlain, who continued to keep sterling steady against the French franc and other European gold standard currencies last week, inserted in the declaration that "the United Kingdom Government has no commitments to other countries regarding the future management of sterling and retains complete freedom of action in this respect."

As a stanch example to other Dominions, the Government of Canada followed up the Empire Declaration last week by turning for a loan to London instead of New York, for the first time in 20 years. She borrowed -L-15,000,000 (63,054,000 Canadian dollars or 67,800,000 U. S. dollars at current exchange) at 4%, will use the money partly to finance Canadian public works, partly for redemption of other Canadian bond issues:

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