The World Confers

(See front cover*) Statesmen of every color, babbling every language and brimming with every economic creed, surged this week into the Hall of Fossils of London's new Geological Museum, sat down like schoolboys behind green metal desks for the World Monetary & Economic Conference, most crucial gathering since Versailles.

Fresh paint stung the nostrils of delegates representing 66 of the 67 recognizable nations of the world./- Twenty clocks warned them to make haste. Without even waiting for King George to arrive, the coal-black delegate of Haiti, gigantic, barrel-chested Constantin Mayard, broached his plan for world prosperity to whoever would listen. ''Everybody ought to drink more rum," advised Delegate Mayard, "and they ought to eat more bananas." Word that the King-Emperor was rising in the Conference lift caused 800 delegates, experts and correspondents to scramble to their feet. Stiff and silent to honor His Majesty, benign sovereign of one-quarter of all mankind, stood white chief delegates in cutaways, white-robed Indians, the gaily turbaned Hejaz delegate and the head of only one state, President Schulthess of Switzerland. George V, who had driven straight in from Windsor Castle, sprang an immediate surprise. Instead of speaking straight English (as scheduled) he skipped back & forth between English and French: "Gentlemen. ... I believe this is the first time in history that any sovereign has presided at the opening of a conference of all the nations of the world. . . . "Messieurs les delegues, c'est avec tres profonde emotion que je vois autour de moi cette auguste assemblee qui parait si vaste mais qui represente une conception infiniment plus vaste--d'espoir et les voeux du monde entier. . . . Messieurs les delegues, je vous tend la main et de tout man coeur j'espere que vos efforts aboutiront `a un heureux resultat yu'attendent avec impatience les peuples du monde. . .

"Gentlemen. ... In the firm belief that mutual consultation is the first step towards right action, I inaugurate this conference. I pray that the result of your labors will set the world once more on the path to prosperity and ordered progress."

Delegates who seemed amazed that His Majesty should speak two languages in the same speech (neither repeating nor translating himself) were still more startled when students of the Royal Scientific College just across the street set up exuberant catcalls in which they persisted throughout the royal speech. While a translator rendered the King's English into French (and his French into English) blue-helmeted London bobbies chased the catcalling students, achieved a hush amid which snowy-polled Prime Minister James Ramsay MacDonald rose to keynote as President of the Conference.

Speaking not in his usual vein of pious optimism but as though he fully realized that bitter national rivalries gravely threaten the Conference's chances of success, Scot MacDonald cried: "The world is being driven on a state of things which may well bring it face to face . . . with a time in which life revolts against hardships and the gains of the past are swept away for forces of despair. . . . How dark are the depths of misery and unsettlement which have still to be gone through? No one who has surveyed the facts . . . can doubt for a moment . . . that a purely national economic policy in this modern world is one which, by impoverishing other nations, impoverishes itself at the expense of others. . . . Nationalism in economics is the deathknell of ... prosperity."

Touching squarely on the topic which President Roosevelt insists must be kept out of the Conference. Mr. MacDonald rasped with a stubborn Scotch burr: "The question of War debts . . . must be dealt with before every obstacle to general recovery has been removed and it must be taken up without delay!"

Finally Scot MacDonald, who conceived originally the idea of the World Conference, thanked the League of Nations which organized it and is playing nominal host.

"A policy of nibbling will not solve this crisis!" wound up the Prime Minister. "Rapidity of agreement is essential to success. . . . Let us see to it that before we disperse we shall have revived hope, energy and opportunity!"

Thus spurred, the Conference swiftly appointed a steering bureau which met at once, decided to limit delegates' speeches to 15 min. each, adopted a program of daily conference work from 10 a. m. to 5 p. m. with 90 min. out for lunch.

Major Deeds crying loudest to be done by the Conference are four: 1) Interstabilization of the gyrating dollar and wobbling pound with each other and with gold standard currencies such as the French franc, Dutch gulden, Swiss franc. Last week the dollar plunged down to a new low-for-all-time against gulden and Swiss francs, tobogganed to a value of about 81.8-c- against French francs. This meant that the British Treasury, which is trying to keep sterling low for competitive trade purposes, saw the pound skyrocket within a week from $4.01 to $4.20, a new high since England went off gold.

2) General reduction of world tariff rates or, if that proves unattainable, then stabilization of world tariffs at the levels existing under President Roosevelt's Tariff Truce (TIME, May 22). Since prices and therefore tariff rates are based on money, tariff stabilization is plainly impossible unless the world's chief currencies are also stabilized.

3) Upping of world prices--a project to which nearly all the Chief Delegates paid lip service last week, but which seemed likely to plunge the Conference into bickering over how the thing can be done: Directly by world monetary inflation? Indirectly by world curtailment of production? Perhaps by a world program of public works to put money in the pockets of laborers of all nations? Or merely as a result of increased velocity of business and returning confidence which the Conference may be able to produce by stabilizing moneys and tariffs?

4) Dynamiting by one means or another the appalling fiscal ice jam represented by $28,000,000,000 of mostly frozen foreign debts owed the U. S.

"Oldest to Newest!" Since he rushed hot from Tennessee to fight in the Spanish War, Chief U. S. Delegate Cordell Hull has grown calm, deliberate, Senatorially sage, but far from cold.

Twirling a beaker of champagne last week as the U. S. delegation ship S. S. President Roosevelt hove to off the Irish Free State en route to England, sympathetic Mr. Hull wrung the hand of red-robed Sean French, Lord Mayor of Cork, who had come aboard to greet him. Then Mr. Hull raised the beaker and toasted, "The President of the Irish Republic!''

While astonished, delighted Free Staters grinned, Secretary Hull also gave them "Greetings from the Oldest Republic* to the Newest Republic of this hemisphere!" As the party waxed congenial, horrified U. S. consular officials begged and pleaded with Irish correspondents to suppress mention of Mr. Hull's toast. Obliging, the Irish kept mum. Not so the newshawks of Canadian-born little Baron Beaverbrook, "Hearst of England." Seven columns wide his London Daily Express headlined that Chief U. S. Delegate Hull had dubbed part of King George's realm-- and the most obstreperous part at that--a "republic."/-

Too frail to meet the delegation ship at Plymouth, pallid U. S. Ambassador Bingham** rested in London while sweltering U. S. Delegates debarked, boarded a special train and followed the example of U. S. Delegate Key Pittman, the Silver Senator from Nevada, onetime Klondike gold rusher, who was first to peel off his clinging coat. Arrived in London the delegation drove to Claridge's, smartest of Mayfair hotels, traditional hostel of visiting royalty. Times are so bad that each member of the U. S. delegation receives a sumptuous room, bath and three Claridge meals for only $5 per day. Told that Ambassador Bingham could not arise and call on him. Secretary Hull drove from Claridge's to the Embassy, sympathized.

Lone Chiefs. Next day, buckling promptly to business, Chief Delegate Hull slipped off for an unannounced lunch with Prime Minister MacDonald, only member of the British Delegation who has much sympathy with Mr. Hull's tariff-razing ideas. Reports from the U. S. that President Roosevelt & Professor Moley continue lukewarm to tariff cuts, prefer at most a tariff truce, left the impression that Secretary Hull is almost as isolated in the Cabinet to which he belongs as is Scot MacDonald in his. To British reporters the Chief U. S. Delegate plaintively remarked: "The international economic structure is flat on its back. If you perfect currency stability, but leave the skyscraper trade barriers intact, trade cannot move. It is all a common interlocked mass of difficulties, so I am hoping that the conference grasps every phase of the situation."

U. S. Delegation stragglers who came by the faster S. S. Olympic were led by Vice-Chief Delegate James Middleton Cox, shrewd, rich Ohio publisher who brought with him the U. S.'s fiscal big guns: sleek Governor George Leslie Harrison of New York's Federal Reserve Bank, owlish U. S. Treasury Adviser Dr. Oliver Mitchell Wentworth Sprague (recently Adviser to the Bank of England) and a brisk young Manhattan banker, James Paul Warburg. Letting Secretary Hull stew in his low tariff juice, these U. S. fiscal experts made swift contact with their peers at the British Treasury and in the Bank of England, started conversations to determine at what relative point pound, dollar and franc can and should be stabilized.

With the pound at this time worth $4.10 (after rising in the past few days from $4.01) Governor Harrison reputedly broached to Governor Montagu Norman of the Bank of England a pegging together of dollar & pound at $4.30. This of course was sheer horse trading, the British having mentioned $3.50 as their figure. During the next few days Governor Harrison sat tight, watched mysterious forces, about which Britons thought he knew a great deal, depress the dollar so violently on the day the Conference opened that the pound was forced up to $4.20.

Boss of Britain. Sure to dominate many a Conference session, if not eventually the Conference, is that mighty mover behind British Cabinet scenes, lean, taciturn, iron-willed Arthur Neville Chamberlain, son of one of Queen Victoria's greatest Ministers (orchid-boutonniered "Old Joe"), today Chancellor of his Majesty's Exchequer.

It is Mr. Chamberlain (he has no nickname and few close friends) who dominates Britain's Conservative Party by force of character and purpose. Bumbling old Stanley Baldwin, nominal Party Leader, has almost ceased to count. Since the Conservatives have an overwhelming majority in the House of Commons it is no secret that Scot MacDonald remains Prime Minister by Prime Mover Chamberlain's leave. An arch-deflationist and high-tariff man, the Chancellor of the Exchequer finds it convenient to get the Cabinet's work done beneath the camouflage of a "National Laborite" Prime Minister, popular, warmhearted, lovable. By the attitudes of Neville Chamberlain & friends, not by the speeches of Scot MacDonald, must Great Britain's true policy and probable action at the Conference be judged.

First the Chancellor, even with the pound off gold, has shown his congenital aversion to inflation by refusing to let British note circulation increase. "The pound is still the pound in England." It possesses virtually unimpaired internal purchasing power. Second, Mr. Chamberlain has striven tirelessly and greatly succeeded in turning Great Britain from a free-trade into a high-tariff country during the past year and a half. This work goes on even though Britain has joined President Roosevelt's "Tariff Truce." Because of shrewdly worded British reservations the Import Duties Advisory Committee chairmanned by hatchet-faced, be-monocled Sir George May can up tariffs to protect any British industry which asked protection before the "truce" was signed. Naturally all industries which wanted protection asked for it years ago. The free-trade Manchester Guardian ironically observed not long ago: "We may fully expect that, by way of showing their contempt for truce makers, Mr. Chamberlain and Sir George May will arrange between them to celebrate the King's opening of the World Conference by a nice little batch of additions to the British tariff."*

"Raise Prices!" Clearly Chief U. S. Delegate Hull will find in Delegate Chamberlain a stiff bargainer for every inch of tariff height which Britain may concede, but the Chancellor's friends say that, even so, he is prepared to concede more than President Roosevelt. If the Conference bogs down on tariffs, they insist, not London but Washington will be to blame. "The first objective [of the World Economic Conference]," Chancellor Chamberlain lately said, "ought to be the raising of world prices to a more satisfactory level. . . . How is that to be done?" Answering his own question, he plumped for world restriction of production, both agricultural and industrial, concluding with emphasis: "In the direction of regulation agreed on among producers lies, almost more than in any other, the raising of prices, which we so much desire."

Deploring inflation, either to raise prices or for any other purpose, and turning a cold shoulder to bimetallism, Chancellor Chamberlain called for stabilization of the world's currencies on the gold standard at new levels which he hopes the Conference will fix. "There is only one standard which is familiar to everyone and which could inspire confidence," said he crisply. "That is, of course, the gold standard." Last week as the Conference got under way Chancellor Chamberlain hinted that any further debt payments from His Majesty's Government to the U. S. will be chiefly made in silver. By this means (perfectly legitimate under the U. S. Congress' recent legislation) Britain's June 15 payment, nominally $75,950,000, could be made at a cost to the Exchequer of some -L-12,000,000, whereas -L-19,000,000 would be required if the debt were paid in gold.

On the human side Chancellor Chamberlain combines an air cold to the point of being supercilious with sudden flashes of unexpected warmth. He once nonplussed the House of Commons, which had thought him an icicle, by almost breaking down at mention of his mother who died in bearing him. Entering politics in Birmingham, his family's seat, he became its Lord Mayor and might have stayed all his life in the Midlands had not David Lloyd George called him to London during the War to become Director General of National Service.

Earnest and social-welfare-minded, Neville Chamberlain, after a first term as Chancellor of the Exchequer, so short that he never presented a budget, chose deliberately the lesser Ministry of Health, grappled with Britain's housing problems during the post-War years so successfully that under his regime more than 900,000 houses were built. In the fiscal crisis of 1931 which forced formation of Britain's present "National Government" steady-going Neville Chamberlain forged into front Cabinet rank. Settling quietly down at the Exchequer as though on permanent lease he remains to this day almost unknown to cockney Englishmen except as the toff who took a penny off the tax on a pint of beer. To his peers and intimates Neville Chamberlain is the complete gardener, dodges social functions of all sorts to putter among his plants and shrubs. Utterly poised, impossible to ruffle, completely sure of himself, he spent the Sunday afternoon before delivering his last budget speech (TIME, May 18) escorting his small daughter around the London Zoo.

Hottentots' Smuts. Scraping second fiddles to Chancellor Chamberlain in the British Delegation last week were pink-domed Foreign Secretary Sir John Simon and that genial shipping tycoon, President Walter Runciman of the British Board of Trade, both former low tariff Liberals whom the Conservative Chancellor has bent to his will. Put on the Delegation because of his great legal shrewdness was moon-faced Secretary for War Viscount Hailsham, veteran of slashing days as Attorney General when, as Sir Douglass McGarel Hogg, he boasted a fondness for pig-keeping. Finally the British Delegation included, perforce, irrepressible James Henry Thomas, onetime engine greaser and present Secretary for Dominions. Night before the Conference last week Jimmy Thomas staged a minor conference of British Dominion Delegation leaders, talked Hottentots, diamonds and gold with South Africa's silky-bearded General Jan Christiaan Smuts, parried the thrusting silver proposals of Canadian Premier Richard Bedford Bennett, more of a bimetallist if possible than even Nevada's Silver Senator.

Hard Money Men. Totally opposed to all talk of silver (since Europe produces little or none) were the hard money men who arrived from the Continent last week: blunt, homespun French Premier Edouard Daladier; faintly perfumed Italian Chief Delegate Giuseppe de Michelis and a queer German Delegation which might easily have played within itself a game of Find the Leader.

Nominally be-monocled German Foreign Minister Baron Konstantin von Neurath, decorative socialite, was Chief Delegate. But at his side stalked long-necked, domineering Dr. Hjalmar Schacht, Governor of the Reichsbank. To make things more exciting before he left Berlin Dr. Schacht recommended and Chancellor Hitler decreed last week a blanket and indefinite moratorium blocking payment of service charges on practically all German foreign obligations except her already frozen still-haltung credits. This move sent Germany dramatically to London hat in hand, served notice that unless she receives favors of some sort from the Conference her total borrowings are as good as lost. Eagle-eyed beside Dr. Schacht came the Delegation's vigilant Nazi watchdog, a Dr. Wilhelm Keppler, who was called "Chancellor Hitler's personal adviser on economic matters."

One thing the Big Three Delegations from the Continent not only had in common but also shared with the Delegations of Poland, Czechoslovakia, Austria, Hungary, Jugoslavia, Rumania and the Baltic states: All stood pledged to fight any move toward price raising by world monetary devaluation or inflation. Privately the German Delegates admitted that even Herr Hitler's popularity could not stand the storm which would burst should Germans, who suffered the world's worst inflation in 1923, feel they were due to suffer again.

"Appropriate Rates." Nailing hard money to Europe's mast last week, pugnacious Premier Daladier staked the life of his Cabinet on a speech to the French Chamber. "Maintenance of the gold standard," he cried, "is indispensable! Nothing can be obtained through transitory improvement worked by monetary manipulation. . . . Those nations with depreciated currencies should return to appropriate rates of exchange. . . .* When France declares she will cooperate with efforts to raise prices it is by economic methods we mean to proceed, and not by monetary or financial methods!"

Striking a bold, fresh note in Conference plans, the French Premier proposed world co-operation in "international public works," gave as examples "the exploiting of South America's wealth, the establishing of trans-African railways and vast public works in Central Europe and the Near East. These projects . . . should be simultaneously begun by all the great nations!"

Dazzled by the Premier's vision of rich works, pleased by his hard money stand, the Chamber gave M. Daladier a smash vote of confidence 413 to 163, sent him to London stronger than at any time since his Government was formed. Since Premiers cannot camp indefinitely at Conferences, Frenchmen considered that the active leader of their Delegation will be knife-faced, keen-eyed, astute Georges Bonnet, Minister of Finance. To friends he said that the World Conference "with good luck" should achieve its objectives by early September. Continentals last week credited persistent rumors that President Roosevelt does not want any treaties (which the Senate would have to ratify) to be made, prefers that the Conference conclude "agreements"--beginning with "gentlemen's agreements" and working up to the most substantial sort which can be made.

For further Conference facts and pictures see pages 21 to 28.

*From the Academy portrait by the late Sir William Orpen which hangs in Mr. ChamberIain's dining room and is here reproduced by his special courtesy.

/- Present at the Conference: Afghanistan Egypt Netherlands Albania Estonia New Zealand Saudite Arabia Ethiopia Nicaragua Finland Norway Argentina France Paraguay Australia Germany Persia Austria Greece Peru Belgium Guatemala Poland Bolivia Haiti Portugal Brazil Honduras Rumania Bulgaria Hungary Salvador Canada Iceland Siam Chile India Spain China Irak Sweden Colombia Irish Free State Switzerland Costa Rica Turkey Cuba Italy U. S. S. R. Czechoslovakia Japan Union of South Africa Jugoslavia Danzig Latvia United Kingdom Denmark Liberia Dominican Republic Lithuania United States Luxemburg Uruguay Ecuador Mexico Venezuela Invited but absent: Panama

*San Marino, minute and reputedly "oldest" republic, is 900 years older than the U. S.

/-The Irish Free State has "dominion status" under a Governor General appointed by King George on the advice of President de Valera, who is in fact merely President of the Cabinet (i. e. Premier).

**Scheduled to present several U. S. citizens at a royal levee in St. James's Palace fortnight ago, Ambassador Bingham suddenly canceled the presentations, let it be known that he was "saving himself" to speak at the Pilgrims Dinner next evening, did so with a flourish (TIME, June 12).

*Biggest additions to Britain's batch of tariffs since she signed the truce are: confectionery up 8s 5d per cwt.; silk & artificial silk wearing apparel up 10% ad val.: safety razor blades up 10% ad val.; spring steel up 23 1/3% ad val.; powder puffs & boxes up 15% ad val.; manicure articles & sets up 20% ad val.; imitation jewelry up 15% ad val.

*To London newshawks Expert Ralph W. Morrison of the U. S. Delegation said roundly that the U. S. dollar will not be stabilized at its previous level.

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