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goods, and that we can only afford to relax that policy in return for   
definite concessionsin other markets, and not merely on the off-chance of   
increasing our export trade in the world at large under a regime of low   
          tariffs and Most Favoured Nation Clause.          
 
                                                            
 
 
I would go even further and express my own grave doubts whether   
anything in the nature of the proposed Monatary Fund is either likely to   
come off or to be of benefit to the world if it did. At 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 contributory factor in   
international trade and investment. But for countries which base their   
policy, as most countries will in 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 than to enjoy the minor convenience   
            of international party of exchange.             
 
                                                            
 
 
In all these matters we here seem to be in a state of   
considerable uncertainty. The Government has just issued a White paper on   
Employment which is based entirely on the principle that stability of   
employment depends on the regutation and coutrol of expenditure and   
investment. But it only applies the principle with regard to domestic   
expenditure and investment and makes no attempt to follow it up in its   
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 coherance on our part and enclose a copy of it   
             in case you may not have seen it.              
 
                                                            
 
 
I see Mr. Cordell Hull has been raising the question  
of a world organization to preserve peace, as indeed has Mr. Churchill. My   
own profound conviction is that so long as it is clearly understood that   
the world organization exists for conference and conciliation and, as   
such, definitely excludes coercion from its purview, it may fulfil a very   
useful function in creating world opinion in fayour 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 paralyze the action of   
individual nations who might be prepared to preserve peace. The League of   
ations played a very useful part during the years   between.