Kicking the Props

Underlying the squabble about the "sudden" devaluation of the French franc is a simple economic problem. French exports necessary to bring in dollars have been priced out the market by a combination of slowed-down inflation and a tight currency exchange. To start the mills rolling again, the French Cabinet decided to cut the value of the currency.

The British have objected from fear that the free-market which the French propose for the franc will inevitably affect the pound adversly. If large amounts of pounds flow through Paris, the British government feels that it will also have to devalue, making foreign commodities more expensive at a time when exports are beginning to climb to a level high enough to cover imports.

Before the Bretton Woods economic conference established the World Monetary Fund, the French could rate their currency to flit their own needs, and the result in a period of economic distress was shown in the frequent currency wars after World War I, making a mockery of stability.

The Fund, to which both Britain and France belong, was set up to place some controls over governmental currency manipulations. Despite the objections of both the Fund and London's Chancellor of the Exchequer, Sir Stafford Cripps, Premier Schuman's government decided that this hand had to be played alone if necessary because of the fall in exports. The squabble will not help ideas of West European unity along in the face of the worst economic crisis since 1932. But the worst blow will be dealt to the hope that the bank would replace the economic law of the jungle with international cooperation.