doubts whether anything in the nature of the proposed Monetary Fund is   
either likely to come off or to be of benefit to the world if it did.  It   
is after all based on the assumption that the maximum of international   
trade is the main object and that parity of exchange is an important   
contibutory factor in international trade and investment.  But for  
countries which base their policy, as most countries will in the future,  
on stability of employment and production and consequently also on the   
stability of the price level internally, it will be far more important to   
be free to exercise complete control over exchange and investment that to   
joy the minor convenience of international parity of exchang
 
                                                            
 
 
In all these matters we here seem to be in a state of considerable   
uncertainty.  The Government has just issued a While Paper on Employment   
which is based entirely on the principle that stability of employment   
depends on the regulations and control of expeniture and investment.  But   
it only applies the principle with regard to domestic expenditure and   
application to the control of imports or of foreign investments.  I have   
just come across an article in your New York Times which draws attention   
to this lack of illogical coherence on our part and enclose a copy of it   
             in case you may not have seen it.              
 
                                                            
 
 
I see Mr. Cordell Haull has been raising the question of a world   
organization to preserve peace, as indeed has Mr. Churchill.  My oun   
profound conviction is that so long as it is clearly understood that the   
world organiation exists for conference and conciliation and, as such,   
definitely excludes coercion from its purview, it may fulfil a very useful   
function in creating a world opinion in favour of peace and in helping to   
adjust many minor differences , which, if allowed to develop, might become   
more serious.  On the other hand, if the world organization professes,   
again as such, to enforce peace, it will inevitably break down and by its   
very existence paralyse the action of individual nations who might be   
prepared to preserve peace.  The Leauge of Nations played a very useful   
part during the years between 1925, when we definitely rejected the Geneva  
 protacol, and 1935, when we committted outselves to the coercion of Italy   
by sanctions.  During those ten years British policy made it quite clear   
that it did not believe in the use of sanctions and only regarded the   
League as an instrument of conciliation.  If that policy had been followed   
it might have been quite easy for France and ourselves together quietly to   
tell Italy that we could not allow her to swallow Abyssinia, and to arrive   
                     at some reasonable