YEAR

ONE YEAR ago today severed the post-war dollar-gold link and threw the world money system into an insoluble crisis.

Now the Federal Reserve Board of New York has indicated that over the year the capitalist financial system has moved much nearer to total crisis.

Last month the United States Treasury issued $3,100m in special securites to foreign central banks to absorb the vast quantities of dollars they purchased after Britain's decision to float the pound.

The foreign central bankers took in the dollars to hold the dollar at the level set last December at the Washington currency realignment talks.

Nixon's August 15 declaration meant the US Treasury would no longer exchange foreign dollar holdings against gold. He was forcing Europe to hold paper 'assets' which had an unknown value.

And now the Administration reveals that last month it was prepared to swop West German and Japanese increased dollar holdings for... other pieces of Treasury paper!

So much for all those financial pundits who hoped that the August 15 measures were only temporary, short-lived, shock tactics. These 'experts' no doubt hoped the would soon begin again to sell gold, albeit at an increased price.

On the contrary. By removing the gold backing to the dollar, Nixon effectively destroyed the corner-stone of the 1944 Bretton Woods arrangements and all the institutions, like the International Monetary Fund, which they brought into being.

It is clear the US has no intention-or ability-to restore Bretton Woods. Last August it died for all time. Even a brief glance at events over the last year confirms this.

Far from being 'restored', the post-war monetary system has continued to disintegrate.

For four months following Nixon's bombshell, the European bankers fought desperately to restore some order to their monetary arrangements.

At the December 18 currency realignment talks, agreement was reached on a series of exchange rates between the leading currencies and the dollar-with the gold backing for these parities now removed.

But still unwanted dollars continued to pour into Europe, 10 ÷ 12 à da da 27 4207 28 Charlotte St London W1 fuelled by a growing US payments deficit. By this June the first breach was made-the Tories 'floated' sterling and opened up a new stage in the From that moment on every currency has been suspect. US policy is clear-to force a series of European revaluations which would give American exports a crippling advantage in the struggle for world markets.

Such a move has been resisted desperately, particularly by West Germany and Japan who are critically dependent upon the American market for their survival.

But the price paid for their resistance has been high. Despite severe exchange controls, both these countries have been forced to buy in more suspect and unwanted dollars to hold existing parities.

Resistence to revaluation means that Europe is forced to hold ever greater quantities of unwanted paper, which is "backed' by equally unwanted US Treasury paper.

Inevitably, under these conditions, the gold price has continued to rise. It recently broke through the $70 an ounce barrier, with few sellers even at BOOKS • PERIODICALS • NEWSPAPERS Nixon Here alone is a measure of the crisis. For until last August the official gold price was still only $35 an ounce. So in less than a year, Europe's $50 billion holding has been slashed by half if this is measured in 'real', that is,_gold terms.

Even now nothing is solved. When the next US payments figures are announced they will show a record deficit. In other words the outflow of dollars continues. The crisis is so severe that support appears to be growing for a French proposal to establish a separate European gold price. This would mean not two but a three-tier gold system. It would mark another stage of the total disintegration of any cohesion and unity in the world financial system.

If there was ever any doubt it has now been dispelled: America will not release her much-reduced gold holding to salvage European capitalism. Nixon's August 15 declaration was an announcement of irreversible economic and financial warfare.

As they recall the August 15 anniversary, all workers preparing for their enormous battles against the capitalist class throughout Europe and America must keep this in the forefront of their