By currency stabilization we can mean one of two things. We can mean either the stabilization of the internal value of a currency—the quantity of goods and services that a unit of it will purchase inside the country concerned—or the ‘stabilization’ of its external exchange value in terms of the quantities of the currencies of other countries that it will purchase.

The internal and external values of a currency are of course closely interconnected. There was a time, when the gold standard was working more or less smoothly, when the fixity of foreign exchanges was taken for granted, and discussion of currency stabilization was mainly concerned with the desirability and possibility of maintaining a stable internal price level. Now, however, as a result of the shrinking of international trade in the Great Depression and the consequent bedevilment of the exchanges in nearly every country, the focus of attention has shifted, as the Keynes and White plans clearly show, to the problem of achieving and maintaining equilibrium in the external balance of payments of the different countries while avoiding drastic exchange restrictions or, alternatively, wide and erratic fluctuations in their exchange rates.