By EMIL BJARNASON

€ sick international mone-
System received another
K when Britain floated the
Und sterling.

the monetary community
international ex-

he! of rules. One of those
: Was a revaluation of most
Ncies, including the pound,
bout 814% in terms of U.S.
on This was supposed to
aie realistic appraisal of
Telative real values of the
OUs currencies.
to, Maintain stable exchange
8, it was further agreed that
entry would support its
atket within a_ permitted
ae fluctuation of 24%
ij. °F below par. The finan-
ingen! breathed more easily,
Crisis it had weathered. the
Caused by the near col-

: Of the dollar in August

Re Prime Minister Heath’s
‘hoy the solution has been
A sang be short-lived. Nixon
‘that ely were very insistent
Sa New price of the pound
i One, but the facts
inflati the first place gallop-
ms On in the United King-
he pown it to be other-
Pour, elect of floating the
y oe been to wipe out last
terest ' revaluation. (It is of in-
e op © Canadians that this is
When Habe of what happened
ted u€ Canadian dollar was
Value ae 1970. At that time the
f Senin Ur dollar increased,
had oly Pe rause Canada has
yu Inflation than other
i) Kinga Whereas the United
a has had more).
Heat vtalist. Instability
Mitended action was, of course,
So, ly to deal with Bri-
Situation, but inevit-
TCussions had international re-

ah monetary agree-
dollar Shaken faith in the
fall also, and caused its value
‘Se with stronger
vane Such as West Ger-

a4 Moved to impose

ange controls in or-
ieee themselves
ey ationary inflows of
j qm the aS speculators _ flee
; lay ~ YNstable pound and

En,
Vhich ane Neat arrangements
: “Ome = “ Intended to over-
“open Pitalist instability have
¥ Irelity Wn under the stresses
Be Ogio:
St no Stificant that this lat-
Win, Moneta at this lat

tana (ADN) — Of the 26
x Se beration fighters
the : Sean for medical
a Oy, Trangement with
per Bent of the German
ang? Of 1). Republic, a ‘second
“ty return es have recovered
f Tequir ome. Four men
hh © Medical attention.
meantime, arrange-
been made for 10
fighters wounded
a for their country’s
args atme me undergo medi-
Bement yin, the GDR. By
h

ith the Minister
ws and oy Bangladesh, 20.
Ve Speci ve physicians will

R nopaedic train-

nge rates by agreeing to a

The fog

Dow
Cand Comp!

N Zz
For the Gov s
OFENGLAND

the BANK

ed £1 notes now circulating
are smaller in size than the real
ones which are smaller in value....

LZ

BANK OF

gold. The currencies of the world
are tied to a fictitious gold price
of $38 an ounce, but in the free
market it trades at $65.

American leaders scoff at the
significance of the gold price.
Since the U.S. will no longer re-
deem its money in gold, they
ask what difference it makes
whether they refuse to sell gold
at $35 an ounce or at $38.

But this only underscores the
false and artificial basis of the
whole system. No longer based
on gold, the value of money
rests on faith—the faith of cur-
rency speculators in the integri-
ty of ~leaders such as Nixon,
whose public image is expressed
by the slogan, “Would you buy
a second-hand car from this
man?”

Money, the measure of value,
is the crystallization of exchange
value, the ratio of labor time
used to produce commodity xX
against the labor time required
to produce a standard monetary
commodity, _ historically gold.
This ratio, as it expresses itself
in the free market corresponds
to a gold price of $65, whereas
the international purchasing
power of the U.S. dollar (and in
the appropriate ratio, the pound
sterling) is by main force held at
the equivalent of $38 gold. This
is some kind of measure of the
misalignment of present-day
money.

Situation Gets Worse

The Nixon reform was Sup-
posed to cure the international
monetary situation by placing
the United States balance of
payments on.a sound basis.

Nixon maintained that if other
currencies were revalued in their
proper relationship to the
dollar, U.S. exports would in-
crease, and the excess dollars
flooding world markets would
start to come home in payment
for a favorable balance of trade,
thereby putting the dollar on a
sound basis, and reducing the
international surplus of dollars.

No such thing has happened.
Nixon refused to take the essen-

tial step of curtailing military

expenditures abroad, in the first
place by getting out of Vietnam,
and consequently his remedy has
failed. In 1972, the U.S. is run-
ning a bigger foreign trade defi-
cit than in 1971. The situation
gets worse instead of better.
When Nixon imposed his sur-
charge in 1971, there were strong
fears that the capitalist powers
would embark on competitive
trade restritcions, which would
Jead to a general curtailment of

ENGLAND

? ee

‘trade and the possibility of a

major international slump.

These fears were relieved by
the monetary agreement. How-
ever, in the wake of the floating
of the pound, the stronger econ-
omies, West Germany, Switzer-
land and Japan, have moved to
restrict foreign capital invest-
ments and bank deposits in their
countries. This is not quite the
same thing as a trade war, but
it curtails the export of capital,
which in the.context of imper-
ialism, is a basic ingredient of
international trade.

Fragmentation of Market

The present situation points
in the direction of further frag-
mentation of the capitalist world
market. Indeed, the European
Common Market countries had
already adopted their own set of
rules, imposing on member
countries a rule that their cur-
rencies must fluctuate, relative
to each other, by only about
half as much as international
monetary agreements permit
them to fluctuate relative to the
U.S. dollar. In effect this is a
step towards a common Curren-
cy for western Europe as a rival
of the U.S. dollar.

It is therefore ironic and
symptomatic, that the Heath
government, which has made
entry into the Common Market
a keystone of its policy, should
have been forced to violate this
basic Common Market rule on
the very eve of joining. :

The floating of the pound is
not going to sink the imperial-
ist system. Nor is international
currency reform going to save
The conditions of state mon-
opoly capitalism dictate that
each country must regulate its
economy in the interest of in-
ternal stability, employment and
growth. This is incompatible
with free international monetary
exchange (the gold standard for
example). Yet an ever-growing
sector of each national economy
is dependent on international
relationships.

Thus the recurrent monetary
crises, increasing in scope and
frequency, are merely spectacu-
lar reflections of the basic con-
tradiction of the system in our
time: the contradiction between
the increasing (international)
socialization of production and
its private appropriation.

While the percentage the
opulation engaged in farming
es cut in half between 1950 and
1970, _ productivity increased
three-fold in that time-

Jur monetary system is sick IPM hee one
a threat to Europeans

Industrial nations in Europe
are in a quandary what to do and
what must be done to restruc-
ture the international payments
system. The 10 nations that will

form the enlarged European
Community have come to an
agreement that they feel will
help the situation providing
Washington will come to its
senses and help defend its own
dollar against further devalua-
tion — which benefits the U.S.
trade position on the short term,
but threatens to undo the Smith-
sonian agreement reached in
Washington last December.

The recent floating of the Bri-
tish pound was a serious warn-
ing of a drift toward a new cris-
is, including capital-market and
foreign-exchange controls, which
other countries may be forced to
take in order to defend them-
selves against an excessive in-
flow of unwanted U.S. dollars
putting an upward pressure on

their own currencies. The result ~

of such a development could be
to force the United States into
other and more Draconian means
of balancing its international ac-
counts on merchandize trade.
Agree on Objectives

The London meeting of Euro-
pean financial officials on July
17 acreed upon new objectives
for reform of the world mone-

tary system which they intend
to submit to a September meet-
ing of the International Mone-
tary Fund. These proposals
include fixed but adjustable pa-
rities, the re-establishment of
currency convertability, aban-
donment of reserve currencies,
measures to reduce speculative
flows of hot money, and a more
effective system for bringing
about. necessary balance of pay-
ments adjustments. But it would
be utopian to expect a solution
or a return to any kind of nor-
malcy or stability on exchange
markets. The internal conflicts
within imperialism are deepen-
ing and the trade war is quietly
proceeding and __ intensifying
while its reflections: are to be
found in the monetary system,
stumbling from one speculative
crisis to another.

In the meantime, Canada,
after six months of no negotia-
tions at all with the U.S. for a
new trade agreement, is now
hoping for some renewal of ‘ra-
ticnal’ negotiations over serious
Outstanding trade _ difficulties.
Last week Trade Minister Jean-
Luc Pepin and U.S. Treasury
Secretary George Shultz were to

‘meet for preliminary discussions

of whether, or when, to reopen
trade talks that broke down last

U.S. ECONOMIC DEVELOPMENT

(changes by comparison with previous year in %g)

Gross
Year social product
1967 2.7
1968 4.9
1969 2.8
1970 0.25

February. —B.M.
Industrial Price Consumer
production index prices
1.2 _ 2.8

4.7 4.0 4.2

4.4 4.7 5.4
—1,4" 5:0° 5.9

(* January to August; ** Estimate.)
(Source: OECD, Paris, Annual Report, 1971)

DOLLAR RESERVES OF THE INDUSTRIALIZED CAPITALIST NATIONS

(millions of $)

Federal Germany France

6,286
11,380

September 1970
September 1971

Japan Switzerland
1,039 2,423 1,360
3,033 11,939 3,640

(Source: 1971 Annual Report of OECD Panel of Experts, p. 17.)

Marks 80th Birthday

On July 17 Frank Halaburda
of Regina celebrated his 80th
birthday. A pioneer of this coun-
try, Comrade Halaburda was in-
volved for many of those years
in the struggle to improve condi-
tions for his fellow workers
here.

Like many Canadians, he
came to Canada from Europe
looking for a better life. He was
born in the province of Galicia,
then a part of the Austro-Hun-
garian empire, later to become a
part of the Ukraine. His father,
the head official of the village in
which they lived, assisted many
of his friends and relatives to
escape from the oppression un-

Dairy goods drop

Per capita consumption of’
milk and dairy products con-
tinues to decline around the
world. A 1970 survey of 17 major
milk-producing and consuming
countries including West Euro-
pean countries, the United States
and Canada, showed it was 713
pounds compared with 715
pounds in 1969. Cheese consump-
tion gained but consumption of
butter, fluid milk and other pro-
ducts declined. <

der which their area suffered,
and to come to Canada.

In 1910, at the age of 17, with
$10.00 in his pocket, Frank Hala-
burda arrived in Winnipeg,
where an older brother had set-
tled. The next six years he spent
working at’a variety of jobs in
several prairie cities, and in
1916 came to Regina, where he
has lived since.

During the Thirties he was
drawn into the activities of sev-
eral progressive organizations
including the Canadian- Labor
Defence League, the Association
of United Ukrainian Canadians,
and the Communist Party, and
in 1935 was arrested for assist-
ing the unemployed On-To-Otta-
wa trekkers, who were stopped
in Regina in the infamous Re-
gina Riot. In 1936 he took out a
membership in the Communist
Party and has continued to play
his part in promoting the inter-
ests of the working class, and in
the building of socialism in his
adopted country.

On the occasion of his 80th
birthday his comrades and
friends have taken the opportun-
ity to wish him many more
years in the struggle for a bet-
ter Canada.

PACIFIC TRIBUNE—FRIDAY, AUGUST 4, 1972—-PAGE 5