n today's world of flat currencies, cut loose from the gold standard, we are sailing in uncharted waters. To float? To peg? To bind? Is anything as good as gold? Professor Friedman poses the question; six eminent economists and businessmen respond.

DISCUSSIONS of international monetary reform have generally scanted the difference between two superficially similar but basically very different exchange-rate arrangement is a unified currency: the pound sterling in Scotland, England, and Wales, and, at an earlier date, in Ireland as well; the dollar in the fifty states of the United States and in Panama; since the currency reform of 1983, the Hong Kong dollar and the U.S. dollar; farther back in time, the pre-world War I gold standard, when pound, dollar, franc, and Mark were simply different names for specified fixed amounts of gold.

The key feature of a unified currency is that at most one central bank has the power to create money-'at most" because a pure commodity currency does not require a central bank. The U.S. Federal Reserve System has 12 regional banks, but only one central authority (the Open Market Investment Committee) can create money. Scotland and Wales do not have central banks. Hong Kong does not have a central bank.
The maintenance of fixed rates of exchange between different parts of a unified-currency area is strictly automatic. No monetary or other authority need intervene. One pound in Scotland is one pound in England, plus or minus perhaps the costs of shipping currency or arranging book transfers-just as under the pre-world War I gold standard the rate of exchange between the dollar and the pound varied from $4.8665 only by the costs of shipping gold (yielding the so-called "gold points"). Similarly, 7.8 Hong Kong dollars is essentially simply another name for one U.S. dollar, plus or minus a trivial amount for transaction costs. It requires no financial operations by the Hong Kong currency board to keep the exchange rate there other than to live up to its obligation to give 7.8 Hong Kong dollars for one U.S. dollar and conversely. And it can always do so because it holds a volume of U.S.-dollar assets equal to the dollar value of the Hong Kong currency outstanding.