550.S1/372½
The American Representatives on the Preparatory Committee of Experts for the International Monetary and Economic Conference (Day and Williams) to the Secretary of State
Sir: We have the honor to submit herewith our report24 as American representatives on the Preparatory Committee of Experts for the World Monetary and Economic Conference.
As we present it to you, one thought is to the forefront of our minds as a result of the experiences and conclusions related in the report. That thought is that every power must be exerted to convince our people that their own vital welfare is at stake in the current world depression, and that recovery from that depression requires adjustments in the relations between this country and the rest of the world. It must be brought home to all sections of the United States that the movement of prices and income which govern prosperity or depression for them is connected with the world situation. Therefore they must be brought to understand that in that [Page 840] world situation the United States must play, an open-minded and vigorous role, and that if it does not take the necessary actions promptly even worse conditions than those now existing are in prospect.
As indicated in our report, certain fairly definite conclusions can be stated. In the existing world situation there are three central features: (1) the instability of certain primary monetary systems; (2) the burden of public and private foreign indebtedness; (3) the strangulation of the international movement of goods. These three forms of obstruction are inextricably interwoven and constitute a vicious circle of infringements upon a normally constituted world order. The most promising means of breaking this circle, in the opinion of the experts, lies in a direct attack upon the problem of monetary instability. This means in particular the restoration of the gold standard in the key countries, England and Germany. The problem thus becomes initially one of determining the conditions under which this objective can be attained. In our report we deal with these conditions in considerable detail. In brief, they relate to: (1) the necessity of an early settlement of the war debt question: (2) a thorough exploration of the means of stabilizing and, if possible, raising world prices; and (3) the possibilities of improving trade relations. As stated in our report, our experiences at Geneva have led us to the conclusion that an Anglo-American understanding on these questions would be the most constructive next step toward assuring the success of the World Monetary and Economic Conference.
Depreciation of currencies depresses world prices which in turn steadily increases the burden of debts and leads to defensive measures which block the channels of trade. It seems clear that decisive cooperative action is necessary to break this cumulative deadlock and that the various governments must be prepared to take the strongest possible coordinated steps.
Very truly yours,
- Edmond E. Day
- John H. Williams
- Not printed. For the report of the Chairman of the Preparatory Committee of Experts upon the work of the Committee, October 31–November 9, see League of Nations Document C.764.M.361.1932.II.↩