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The U.S. basically favors reforming the monetary system by increasing the amount that each industrial nation would contribute to the IMF and broadening the IMF's lending powers, thus insuring an increased supply of money and credit. It has been against many of the details of both the Triffin plan and the French cru because both would completely displace the dollar in international trade, but it is now coming around to the idea of an international currency. Fowler insists that any new currency must supplement—and not supplant—the dollar and the pound. The dollar must maintain its position as the world's most important currency, cannot be devalued, must keep its role as a currency used in reserves. In his talks with Giscard d'Estaing, Fowler said that the U.S. might now favor a new international currency—but only after Giscard agreed to negotiations at this month's IMF meeting for reform.
Rewards & Burdens. A big question, of course, is just who would control any new currency. The U.S. would like any monetary reform to be in the hands of the IMF, in which its influence is dominant. France and its Continental allies want to work any reform through the Group of Ten's powerful industrial nations, in which the U.S. has membership but the Continentals collectively have the greatest voice. The Continentals would thus like to keep reform a club affair not involving the underdeveloped nations. Fowler indicated last week that the U.S. may be warming to the idea of reform through the Group of Ten—but it would still prefer the IMF. In a book published this week, Monetary Reform for the World Economy, former Under Secretary of the Treasury Robert Roosa speaks up for new money to be created within the IMF—a position that European moneymen believe may reflect just what the U.S. wants.
Taken together, the best features of these plans would repair the inadequacies of the current system. The money drought would be alleviated for developing nations, which would be able to borrow more readily from the international treasury. Nations suffering from temporary financial embarrassment, such as Britain, would be able to borrow fairly easily instead of devaluing. The Continental countries, by contributing their own currencies to the new reserve fund, would share in both the rewards and burdens of serving as banker to the world. And the increased supply of reserves would ease the pressure on the dollar because 1) the U.S. could easily borrow the new reserve units when it needed to tide over balance-of-payments debts, and 2) foreign dollar holders could exchange their excess dollars for the new reserve units instead of for U.S. gold.
No Roses. Cautious Joe Fowler favors evolutionary change, working through existing machinery rather than rushing to embrace radical ideas. "There are plenty of reform plans floating around," he says. "The problem is to find an acceptable one. I don't expect that my path will be strewn with roses." Negotiations toward any change will be hard, and agreement will be long in coming, but Fowler's trip to Europe has already heightened a new spirit of compromise and led to a general agreement among the money managers that