THE LESSONS of the inter-war period should not be forgotten. They teach, by implication, the essential objectives and requirements of a truly international monetary system; they show why the gold mechanism was inadequate to cope with the problem of post-war international finance; they prove that deliberate domestic credit and employment policies, since they are here to stay, must be integrated by international institutions; and they demonstrate that national policies which are heedless of international repercussions are doomed to eventual failure in spite of their momentary success; but they also indicate that an international monetary system cannot hope to function successfully unless the nations of the world are willing to follow accepted rules of international behavior--even if these rules are occasionally inopportune.
Any new international monetary system must, of course, be so designed as to secure a sufficient amount of freedom of action for the member countries; otherwise it will not be acceptable. We must fully grasp "the essential position which the idea of maintenance of a high level of employment has taken in current economic thought."1.But the full employment policies must be compatible with international cooperation and with a reasonable degree of exchange stability. A compromise solution____________________