Banker Fraser's Proposal

Since Britain's Lord Keynes and the U.S. Treasury's Harry D. White unveiled their international currency plans, many a U.S. banker has grumbled publicly & privately at the financial mumbo jumbo of "unitas" and "bancor" (TIME, April 5 et seq.). Almost to the last vice president they have pleaded for a simpler, more down-to-earth plan.

Last week they got one, from brisk, burly Leon Fraser, 54, president of the First National Bank of New York, who spoke before the New York Herald Tribune Forum in Manhattan. International Banker Fraser helped negotiate the Young and Dawes plans, and later (1933-35) served as president of the Bank for International Settlements (The World Bank).

World Standard. Banker Fraser's plan was developed "out of the facts of present world finance and trade rather than out of an abstract blueprint." The facts of trade and finance, said Mr. Fraser, are: 1) the U.S. gold-backed dollar is the strongest currency in the world; 2) the British pound is the most widely used.

Therefore, he said, the common-sense thing to do is to set up, not a fictitious accounting unit such as "bancor" or "unitas," but a dollar-sterling standard, the exchange rate to be fixed by consultation between the two countries, and to be protected by an agreement to prevent competitive currency depreciation. To this standard, the nations of the world could then tie their currencies.

To shore up the potentially shaky British financial position, Mr. Fraser would: 1) grant a $5,000,000,000 gold credit to Britain, 2) formally cancel World War I war debts, 3) establish a five-year moratorium on Lend-Lease repayments.

Job for B.I.S. Instead of setting up a new super World Bank to stabilize world currencies, he would hand the job over to the Bank for International Settlements, reorganized, refurbished and given plenty of new muscles to do the tremendous job. Said he: "We should build on the experienced machinery we have, instead of creating elaborate new machinery. . . . The program may seem modest. Yet, this realistic approach represents the best entry on a solid road towards the reconstruction of international money."

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