THE KEYNES PLAN will be discussed despite the publication of the Agreement for the following reasons: First, knowledge of the Keynes Plan is necessary for the fuller understanding of the Agreement, which, while it did not choose the Keynesian approach, is, nevertheless a compromise product quite visibly influenced by Lord Keynes; second, the Keynes Plan will be indicative of the British attitude when the International Monetary Fund will have to develop its policies; third, the Keynes Plan, unlike the White Plan or the Agreement, makes the intentions of each of its proposals clear and contains, therefore, most valuable explanatory material; fourth, the structure of the Keynesian scheme is so beautiful in its elegance and simplicity that our understanding of the problems of multilateral clearing will gain from a study of its mechanism.
This chapter merely aims at a survey of the working principles of the International Clearing Union, whose main problems will be discussed in the following chapters, often by way of comparison with the International Monetary Fund.
The Keynes Plan proposes "to establish . . . an International Clearing Union, based on international bank-money, called (let us say) bancor, fixed (but not unalterably) in terms of gold and accepted as the equivalent of gold by the British Commonwealth and the United States and all the other members of the Union for the purpose of settling international balances. The Central Banks of all member States (and also of non-members)