T HE crisis will no doubt be surmounted. dollar will be saved. Its parity will be successfully maintained, and world will be spared that ultimate and unmentionable calamity whose consequences are more dreaded for never being described. The world monetary system will stay afloat, and its captains on both sides of Atlantic will congratulate themselves on their seamanship in weathering storm. But storm is in good part their own making. And if financial ship has weathered it, it has done so only by jettisoning much of valuable cargo it was supposed to deliver. Currency parities have been maintained, but full employment has not been. The economic growth of half advanced noncommunist world has been hobbled, to detriment of world trade in general and exports of developing countries in particular. Currencies have become technically more convertible but important and probably irreversible restrictions and discriminations on trade and capital movements have been introduced. Some government transactions of highest priority for foreign policy of United States and West have been curtailed. Others have been tied to a degree that impairs their efficiency and gives aid and comfort to bizarre principle that practices which are disreputably illiberal when applied to private international transactions are acceptable when government money is involved. These are costs. Were, and are, all these hardships necessary? To what end have they been incurred? They have been incurred in order to slow down and end accumulations of obligations in hands of European central banks. It is fair to ask, therefore, whether these accumulations necessarily involved risks and costs serious enough for countries concerned and for world at large to justify heavy costs of stopping them. Which is easier? Which is less disruptive and less costly, now and in long run? To stop private or public transactions that lead one central bank to acquire another's currency? Or to compensate these transactions by official lending in opposite direction? I do not suggest that answer is always in favor of compensatory finance. But issue always needs to be faced, and especially in present case. Several courses were open to European countries whose central banks had to purchase dollars in their exchange markets in recent years. (a) They could have built up their holdings quietly and gladly, as they did before 1959. (b) By exercising their right to buy gold at United States Treasury, they could have forced devaluation of or suspension of gold payments. (c) They could have taken various measures to correct and reverse chronic European payments surpluses. (d) By occasional withdrawals of gold and by constant complaints they could have brought tremendous pressure for discipline upon United States without forcing a change in parity. European central banks and governments chose fourth course, with token admixtures of third. They have made world opinion, and American opinion, believe there is no other choice. Almost everyone agrees that pressure of balance of payments deficit upon United States is inescapable arithmetic rather than deliberate policy of foreign governments. Yet for almost ten years previously, United States deficits were no problem. Clearly it is a change in human attitude and public policy, not inexorable circumstance, which has compelled us to take corrective actions. It is true that concern of financial officials about the dollar was only an echoand a subdued echo at that of fears, hopes, anxieties, and speculations that arose in private financial circles in late 1950's. But financial officials do not have to follow private exchange markets; they can lead instead. By an equivocal attitude toward private suspicions of dollar, European officials kept pressure on United States. Never did they