Secretary of Treasury Morgenthau Reviews New European Trend Toward International Cooperative Monetary Policy

This is the third and final installment of the outline written by Henry Morgenthau, Jr., Secretary of the Treasury, for the CRIMSON, and used by him at the H-Y-P Conference.

VI. THE PERIOD OF ACTIVE INTERNATIONAL, COOPERATION BEGAN WITH THE TRIPARTITE ARRANGEMENT.

Confronted with an acute European monetary situation that not only threatened to develop into a period of disastrous competitive depreciation but, more seriously, held grave possibilities of international political break-down, the governments of the United States, Great Britain, and France made, on September 26, 1936, an announcement which constituted a major step toward international cooperation in monetary policy.

These three governments stated, among other things, that they proposed:

Taking into full account the requirements of internal prosperity, to maintain the greatest possible equilibrium in the system, of international exchange and to avoid to the utmost extent the creation of any disturbances of that system by internal monetary action.

The three governments invited the cooperation of other nations to realize the policy laid down in the declaration.

To further implement this statement, the Secretary of the Treasury announced, on October 14th, that gold would be sold to the exchange equilization or stabilization funds of those countries whose funds likewise were offering to sell gold to the United States.

France and Great Britain were named as complying with the conditions, for the purchase of gold from the United States.

On November 24, 1936, Belgium, the Netherlands, and Switzerland indicated their adherence to the principles contained in the tripartite announcement, and these countries were added to the list of countries to which the United States would soil gold.

VII. TO PROTECT THE DOMESTIC ECONOMY FROM EFFECTS OF ABNORMAL, INTERNATIONAL, GOLD MOVEMENTS THE TREASURY, ON DECEMBER 24, 1936. BEGAN A POLICY OF "STERILIZING" GOLD ACQUISITIONS WHENEVER CONDITIONS JUSTIFY.

To date about 190 million dollars worth of gold has been placed in the inactive account.