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o
I
Provisional
Board of Governors
Annual Meeting
Procedures
Order of the Day
Friday
September 27, 1946
4:00 PM - Opening Meeting of the Boards of Governors
(Joint)
Theatre,
Wardman Park
Chairman "will call the meeting to order.
Reading of President Truman's statement.
Chairman's address*
Other business.
Adjournment.
5s30 to 7:30 PM r Reception by Honorable John W. Snyder
Continental Room*
Park
Order of the Day
SaturdaySeptember 28, 1946
10:00 AM - First Meeting of Joint Committees on Procedures XXX Room
to consider Fund, then Bank, and finally joint
business• (Chairman - Mr. Snyder)
4.:00 HI - Second Meeting of the Boards of Governors
(Joint) to hear the reports of the First
Meeting of the Joint Procedures Committees by
the Reporting Member (Egypt)*
Continental
Room, Wardman
park
6s00 PM - Reception by Mr. and Mrs. CanrLlle Gutt
Madison Suite,
Yfardman Park
Order of the Day
Sunday
September 29$ 1946
5:00 PM -* Reception by Mr« and Mrs* Meyer
At their home
Order of the Day
MondaySeptember 30, 1946
10:00 AM - Meeting of the Board of Governors of the Fund
Continental Room,
Tfardman Park
The Managing Director will submit
!• First Annual Report of the Board of
Directors
2. Financial Statement as of the close
of business June 30, 1946
ll:.3O AM - Meeting of the Board of Governors of the Bank
Continental Room,
TTardman Park
!• Statement by the President
2. Other Bank business
.Monday Afternoon - Fund Committee Meetings?
2:00 PM - Meeting of Committee on Rules and Regulations
XXX Room
3:00 PM - Meeting of Committee on Quota Revision
XXX R O O T
4*00 PM - Meeting of Committee on Membership
XXX Room
5s00 PM -* Meeting of Financial Committee
XXX Rooni
Order of the Day
Tuesday
October 1, 1%6
Fund Committee njeetings a$d preparation of Committee Reports
10;Q0 AM 12 JJoon -* Meeting of Committees on Rules and Regulations
XXX Room
2:00 PM - Meeting of Committee on Quota Revision
XXX Room
4:00 PM r» Meeting of Committee on Membership
XXX Room
(Beginning Tuesday at 6:00 HI all committee rooms are engaged
for other purposes.)
Order of the Day
ITednesday
Ootober 2, 1946
Earlier part pf day allocated to preparation, reproduction, and
distribution of Committee reports and also such Fund Conmittee
meetings as may be necessary*
2*00 FM - Meeting of Board of Governors of Fund
lt
XXX Room
Consideration of Committee Reports
2* Other Fund business
4:30 to 6:30 HI - Reception at the White House r. Presidential Tea
Order of the Day
Thursday
October 3, 1946
Committees of t.he Bank will meet during the day*
7:30 PM - Dinner by Joint Boards
Statler Hptel
Order of the Day
Ftiday
October A, 194.6
All day Friday to be taken up by Bank cominittee meetings
and the preparation of reports.
Order of the Day
Saturday
October 5, 194-6
11:00 AM - Meeting of Board of Governors of Bank
(Chairman **• Onydcr)
Continental Room,
Wardman Park
!• Consideration of Committee Reports
2. Other Bank business
3:00 PM - Joint Session of Boards of Governors
(Chairman - Mr, Snyder)
1. Place of next Annual Meeting
2. Election of Officers
3. Any other business
U. Closing Remarks
Continental Room,
Wardman Park
-esident Truman's
tern
INTERNATIONAI BANK AND FUND
FOR THE PRESS
First Annual Meeting
Release #1-(Joint)'
September 27, 1946.
FOR RELEASE WHEK DELIVERED, EXPECTED TO BE ABOUT 4:15 -P.M.,
Friday, September 27.
(The following greeting from president Truman was
read at the initial meeting of the Boards of Governors of the International Bank for Reconstruction
and Development and the International Monetary Fund,)
THE \7HITE HOUSE
Washington
September 23, 1946
Mr, Snyder?
It is my great pleasure, on behalf of the people
of the United States, to welcome to Washington the
Boards of Governors of the World Bank and Fund.
The World Bank and the World Fund were conceived
in the midst of a great war to help meet the difficult
problems of the postwar period and to become a permanent part of the. structure of international cooperation
visualized by the United Nations. At this first annual
meeting of these two organizations, it is impossible to
look about the world and fail to see the great responsi
bility that confronts you..
The world looks to you to provide leadership in
helping to build a stable economic world in which
nations can trade and prosper in peace. Your governments have accepted the Bretton Woods plans and have
placed substantial funds at your disposal to carry
them out. Let us put both the plans and the funds to
work.
It is with the deepest personal concern that
I wish 3^ou complete success in your important work.
Very sincerely yours,
/s/ Harry S. Truman
Honorable John W. Snyclen?
Chairman .
Boards of Governors of the
International Bank fo$
Reconstruction an4 Development,
and the International Monetary
Fund
Washington, p. C.
SI
I a <i
TREASURY DEPARTMENT
Washington
(The following address by Secretary Snyder in his
capacity as Chairman of the Boards of Governors
of the International Bank for Reconstruction and
Development, and the International Monetary Fund,
is for release upon delivery which is expected to
be about 4:30 P.M*. E.S.T., Friday, September 27,
1946.)
'
I welcome you to Washington* And I take this opportunity
of expressing my deep appreciation of the honor of serving
as your Chair man•
I am conscious of the great responsibility which we share
as Governors of the Boards of the World Fund and World Bank
during this critical period. The agreement reached at Bretton
Woods two years ago was possible only because of the convictions we shared that postwar problems would be complex, and
would require unprecedented international cooperation. These
expectations have been realized; the magnitude of our postwar
international economic and financial problems has more than
taxed our individual abilities* We must now actively assume
our share in the task of building a permanent peace and providing a prosperous life for the peoples of the world. We must
not fail to meet this challengef
We ere now beyond the blueprint stage of Bretton Woods.
Last March at the Savannah Conference we established the
basic operating structure under which these institutions of
international cooperation would function. The period since
the Savannah Conference has been one of building the organizations. Basic procedures and policy have been explored
by the Executive Directors of the Fund and Bank and the
important task of choosing key personnel has been practically
completed. The election of Mr* Camille Gutt as Managing
Director of the Fund and Mr. Eugene Meyer as President of the
Bank has inspired confidence in the institutions whose operations they have been chosen to guide. I wish to commend the
Executive Directors for their excellent work during this
organizational period*
The initial period of building the structures of the Fund
and Bank is at an end. From now on they will be operating
agencies in their appointed fields. If I may be permitted to
express the keynote of this second meeting of the Boards of
Governors, it is this: Let us lose no time in speedily
activating the Fund and Bank as effective instruments in a
world sorely in need of their services.
ft-91
-
2 -
The Fund and Bank were designed to meet both the immediate postwar and the longer term monetary and financial needs
of the world.
^I think we may take pride in saying that since the end
of tni wlffiy no nation - despite its many other woes and
troubles - has been denied the financial means of obtaining
temporary relief and assistance• As the world shortages of
goods are overcome, however, financial needs will become even
more apparent than they now are. The war-devaststed countries
must now be put in a position to restore production as rapidly
as possible on a scale adequate for home use and for export*
It has been the privilege of the United States to offer
leadership in positive action toward international peace and
economic stability, through encouraging the formation of the
United Nations organization, Bretton Woods and other inter*
national groups. And in furtherance of the ideals and objectives of these endeavors, the United States has been privileged
to offer considerable financial aid in an earnest effort to
reestablish economic equilibrium in the war-devastated countries, as well as in those countries materially affected by
the effects of the war. In making this contribution, the
United States has been prompted not only by its recognition
of the great needs of other nations, but also because, as a
member of the world family, the intelligent self-interest of
the United States recognizes that all of us must move forward
together*
As a part of this broad program, since V-E Day, our
Export-Import Bank has made loan commitments of over
#2,000,000,000, the bulk of which has been for reconstruction
purposes. When the United States Congress increased the lending power of the Export-Import Bank in 1945 from ^700,000,000
to #3,500,000,000, it did so not only in recognition of the•
world1 s urgent reconstruction requirements but in the expectation that the International Bank would soon become the principal international lending institution. Despite the very large
loan commitments already made by the Export-Import Bank and by
the United States and other governments, there remain large
credit needs which should be met if we are to have a stable
and prospe-rous world. As we all know, the International Bank
must now assume the primary responsibility for underwriting
reconstruction loans to countries otherwise unable to borrow
on reasonable terms. I am sure that all of us in the Bank
.are conscious of how far-reaching our operations will be,
even though necessarily tempered by the distinctions between
prudent lending and improvident borrowing.
-
3
-
In addition to assisting in the restoration of wardevastated areas, the Bank will have an enduring function
in stimulating the flow of international capital for development purposes* Many parts of the world are in need of
funds in order to develop their productive resources or to
improve existing facilities. The economic goal of the United
Nations is productive employment for all who are able and
willing to work, and "better living standards for everyone.
It is equally urgent that the International Monetary
Fund begin full operations at an early date. Buring this
critical period, when nations are endeavoring to restore
their currencies, they need the help that the Fund is designed to provide. We all know that no government can
function internally or externally without a sound currency
system. Every encouragement should be given to countries
to get rid of currency restrictions, wartime or otherwise,
which are designed to cover up fundamental weaknesses. We
must not allow the restrictive and discriminatory trade and
currency practices which were forced upon many countries
prior to and during the war to become permanent fixtures of
international commerce. The Fund can provide timely assistance to countries in maintaining imports while their export
industries and foreign markets are being restored.
There are many obstructions in world trade, closely
related to monetary and financial arrangements, but the existence of the Fund and Bank ss operating institutions will
greatly facilitate their removal. We should expect no overnight solutions of these problems, since some members of
the Fond will necessarily retain certain controls during the
transition period* However, a most immediate task of the
Fund should be to encourage and assist all of its members in
removing these restrictions as rapidly as possible. We have
long since agreed that we must attack these problems together.
Active leadership on the part of the Fund in this regard is
essential if world trade is to be restored to a high level and
if economic warfare among nations is to be avoided.
One of the most important jobs opt which the Fund is now
engaged is to determine by agreement with each member country
the par value of its currency. If we are to avoid the uneconomic consequences of improper exchange rates, and avoid
the competitive undermining of the exchange rate structure,
we must determine by cooperative action a pattern of rates
which will be consistent with the maintenance of international
equilibrium and stability of international currency values.
-
4
-
An early stabilization of exchange rates at their proper levels
will give encouragement to the flow of international commerce
and investment, and give confidence to people everywhere in
their own currenciest Everyone must realize that this.is a
most complicated and difficult task* The mere attempt to dothis is a great pioneering step, and although we shall un*
doubtedly find obstacles and resistances, I am sure we shall
be successful if we have the full cooperation and the confidence of the member nations.
A function of the Fund which I want to emphasize is that
of promoting common standards of fair practice in monetary
and financial relations among nations* In discharging this
function the Fund must be a flexible instrument capable of
adjusting to changing international economic conditions. At
this tine I believe that our success can be measured by our
development of acceptable standards to which all countries
are willing to adhere. Healthy economic competition undertaken in an atmosphere of international good will is whole*
some and will contribute to the expansion of international
trade.. Economic warfare reduces trade and creates suspicion
among nations. We cannot afford to permit economic warfare
to weaken the bonds which hold the United Nations together.
Among the problems with which the Boards of &overnors
will want,to deal at this meeting is th?t of considering the
applications for membership which have been made since the
Fund and Bank came into existence. It has always been contemplated that eventually other nations would want to join.
Obviously, the Fund and Bank will gain strength if the largest
possible number of peace-loving nations join with us. All but
six of the 44 nations represented at the Bretton Woods Conference have joine$ the Fund and all but seven are members of the
Bank. I sincerely hope that all peace-loving countries will
see their advantage in becoming members of both institutions
in the very near future. Cooperation in the economic world is
no less important than cooperation in the political world* It
is essential to the peace and prosperity of all nations that
they operate under the same fundamental rules'in their business
dealings with one another. The charters of the Fund and Bank
are drawn broadly enough to encompass various types of economic
and trading systems. In this world of rapid change and widely
differing systems of economic end political organization, it is
essential that we reach an a greement on common standards of
fair practice in internationel dealings.
-
5 *
The world is looking to us as we begin our task of
putting the Fund and Bank in full operation. At Bretton
Woods we gave a war-weary world the promise of peaceful
trade and economic prosperity. In joining the Fund and
Bank, our respective governments have not only invested
large sums of money, but they have in a considerable measure
staked their economic destinies on the success of these institutions . We must not fail our governments and, above all,
the hopeful people they represent.
The spirit of cooperation and enthusiasm which we show
here, will carry over into the 'day-to-day operations of the
Fund and Bank. I can ask no more than that the members of
the Boards of Governors gathered together at this meeting
will have the same spirit of cooperation, and the same faith
and will to succeed, as was manifested two years ago at
Bretton Vvoods, and again at the Savannah Conference last
March.
We have the machinery - let us put* it to work.
0O0
DAILY PROCEEDINGS
Suggested Procedure
Friday - September 21> 1946
4:00 PM - Opening Joint Meeting of the Boards of Governors of the
Fund and Bank
Chairman - Mr. Snyder
1. The Chair calls the meeting to order.
2. The Chair calls upon Mr. Clayton to read the message from
the President•
3.- Mr # Snyderfs address.
4. The Chair states that it is his understanding of the sense
of the Savannah meeting that the present officers of the
Board of Governors and the present membership of the Procedures Committee should continue in office until the
election scheduled to take place at the last meeting of
the Joint Boards, at which time we shall also consider
the report of the Procedures Committee on the question
of the site of the next annual meeting. The Chair states
that unless there is objection from the floor, we shall
proceed in that manner.
5# The Chairman announces the membership of the Procedures
Committee constituted at the Inaugural Meeting at
Savannah, as follows:
Chairman
United States
Vice Chairman
United Kingdom
Reporting Member
Egypt
Belgium
Brazil
Canada
China
France
India
llexico
Netherlands
Poland
6# The Chair announces that the Joint Committee on Procedures Yfill meet Saturday morning at 10:00 AM in
(room) of the Wardman Park Hotel.
Fri., Sept. 27, 1946
-2-
7. The Chair states that any and all resolutions should be
referred to the Procedures Committee in the first instance for report and recommendation back to the full
session* The Chair states that unless there is objection
from the floor, we shall proceed in that manner*
8. The Chairman announces the reception for the Governors
in the Continental Room at the Wardmari Park Hotel at
5 O 0 PM.
9. If there is no further business, the Chair adjourns the
meeting.
Suggested Procedure
Saturday - September %8, 1946
10:00 AM ~. Ffost Meeting of Joint Conpittees on Progedures
Chaiman - Mr* Snyder
(The Chaiiman may designate the Vice Chairman, Governor for
United Kingdom, to act in his place*)
X. Tfte Chair call? the meeting to order•
2* The listing of the members:
Chairman
United States
Vice Chairman
United Kingdom
Reporting Member
y
Egypt
Belgium
Brazil
Canada
China
France
India
Mexico
Netherlands
Poland
3# The Chair explains that the Procedures Committee is joint
for both the Bank and the Fund, there being identical
representation of membership from the Governors of the
Bank and from the Governors of the Fund.
The Qhair suggests that the Committee should
the plan of work for the Fund, then the plan of
work; for the Bank, and finally business cojnmon to both.
following items are common to the business of
the Fund and of the Bank and, it is suggested, should be
considered by the Procedures Committee for recommendation
and report to the Joint Boards:
$
b)
(c).
(d)
Invitations to observers
Site of the next annual meeting
Election of officers for next annual meeting
Constitution of the Procedures Committee
Thup, it is suggested that separate committees should
not be established to consider or report on those questions•
Sat«5 Sept. 28 5 1946
Report of the Procedures Committee on the first
^
Invitations to Observers, will be called for at the Joint
Meeting of the Boards to be held at. i:QG PM, Saturday,
Septembqr 28 • However, the report cf the Procedures
Conpnittee on the remaining items of business commop. to
the Fund $vd the Bank will not be called for until the
l&$% Joint Boards1 Meeting at 3*00 ?M, Saturday, October 4*
Plan of Work of the Fund
The Chair proposes for the consideration by the Committee
the agenda of the Fund circulated among the Governors by
the Managing Director of the Fund, pursuant to Section 6,
of the By^Lawss
^Agenda of Board Meetings• See* 6 of the BynLaws
!lThe agenda for the meetings of the Board of
Governors shall be prepared under the direction of
the Executive Directors by the Managing Director and
shall be transmitted simultaneously with the notice
to the members required to bo sent pursuant to
Section 3.
"Additional subjects may be placed upon the agenda
by any Governor or under special circumstances by the
Managing Director at the direction of the Executive
Directors provided notice thereof shall have been
given to the Fund in writing not less than 7 days
prior to the date of the meeting* The Managing
Pirector shall inform the members of any such addictions to the agenda as soon as possible• The Boar#
may authorize the placing of any matter upon the
agenda even though the required notice shall not
been given#lf
The Chair, proposes for the consideration of the Committee
tho establishment of the following committees to handle
the questions on the Fiqid agenda;
Rules apd Regulations Committee
Quota Revisions Committee
Membership Committee
Financial Committee
Other Coinmittees (if needed to handle new business)
The four specifically named Committees will handle the
business on the agenda in its circulated form, except for
Sat., Sopt. 28, 1946
agenda items common to the Bank a#d Fund which shall be
considered by the Procedures Committee • If , however, the
Cqnmittee has previously agreed to include new items in
its recommendation and report to the floor on agenda, it
is suggested that the Chair should propose the formation
of additional committees as appropriate^
$• The Ohair proposes for the consideration of thq Committee
the designation of membership on each such committee established* The Chair states that the Secretariat will circulate,
only byway of * suggestion, a proposed schedule of membership
for the first four committees mentioned*
The Chair suggests that^ after the membership of the
first four committees has been agreed upon, the Committee
consider the question of membership for the additional
committees recommended to be established, and will then
call upon the Secretariat to circulate a proposed schedule
of membership for these additional committees*
Eules and Regulations
Committee
Belgium (Reporting)
Bolivia
Canada
Chile
China
Colombia
Czechoslovakia (Vice Chair)
Denmark
Ethiopia
France
India
Luxembourg
Panama
South Africa (Chair)
United Kingdom
United States
Yugoslavia
Quota,Revisions Conjmitteo
Canada
China
Cuba
Ecuador
France
Iceland (Vice Chair)
India
Sat M Sept» 28 * 1946
-4-
Mexico (Reporting)
Norway (Chair)
Paraguay
South Africa
United Kingdom
United States
Uruguay
Membership Committee
Bolivia
China
Costa Rica
Dominican Republic
Egypt
El Salvador
France
Greepe (Chair)
Guatemala
Honduras (Vice Chair)
India
Iran
Iraq
Netherlands (Reporting)
Peru
United Kingdom
United States
Financial Committee
Brazil (Chair)
Chile
China
Colombia
Cuba
Czechoslovakia
France
India
Iraq
Nicaragua
Norway
Philippine Republic
Poland (Reporting)
United Kingdom
United States
Yugoslavia (Vice Chair)
Other Committees as needed
Plan of Work of the
6# The Chair propose?? for the consideration of the Comjnittee
the agenda of the Bank circulated among the Governors by
the Proficient of the Bank*
Sat.5 Sept. 28 S 1946
-5-
7« The Chair proposes for the consideration of the Committee
the establishment of the following committees to handle
the various questions on the Bank agenda:
Rules and Regulations Committee
Subscription Revisions Committee
Membership Committee
Financial Committee
Advisory Council Comiaittec
Other Committees (if needed to handle new business)
Tfte five specifically named committee? will handle the
business on the agenda in its circulated form, except for
agenda items common to the Bank and Fund, such as site,
which s^all be considered by the Procedures Committee? If,
hoover, the Committee has previously agreed to include new
itqms in its recommendation and report to the floor on agenda,
it is suggested that the Chair should propose the fomation
of additional committees as appropriate •
8t Tip Chair proposes for the consideration of the Committee the
designation of membership on each such committee established*
The Chair states that the Secretariat will circulate,
only by way of suggestion^ a proposed schedule of membership
for the fi? st five committees mentioned•
The Chair suggests that, after the membership of the
first five committees has been agree4 upon^ the Committee
consider the question of membership for the additional committees reoonunended to be established in the report on the
agqnda, and will then call upon the Secretariat to circulate
a proposed schedule of membership for these additional committees*
Rules and Regulations
Committee
Belgium
Canada
Chile
China
Czechosloyakia
Denmark
Ethiopia (Vice Chair)
France
India
Luxembourg (Reporting)
Panama
Philippine Republic
Sat,s Sqpt»..285 1946
SQuth Africa
United Kingdom
United States
Yugoslavia (Chair)
Quota Revisions CpmmitteQ
Committee
Brazil
Canada (Reporting)
China
Cuba (Chair)
Ecuador
France
India
Mexico
Norway
ParaguayPoland (Vice Cljair)
South Africa
United Kingdom
United Statop
Uruguay
3pUvia (Chair)
Copta Hica
Dominican Rep\it>lic
Egypt
EL Salvador
Franco
G oepe
Guatemala (Reporting)
Honduras
India
Iran (Vise Chair)
Iraq.
Netherlands
Peru
United KiiigdPm
United States
Financial Committee?
\
Brazil
(
(Rqporting)
China
ub
Czechpslo7*atela (Chair)
France
India
Iraq (Vice Chair)
Sat, s Sept» 289 1946
-7-
Nicaragua
Norway
Philippine Republic
Poland
United Kingdom
United States
Yugoslavia
Advisory Council Committee
Belgium
China
Denmark (Chair)
Dominican RepubJLip
France
Guatemala
Iceland
India
Iran
Netherlands (Reporting)
Nicaragua
Peru (Vice Chair)
United Kingdom
United States
Other Committees as needed.
^ Conpxm to the Fund and Pank
9* The Chair proposes for the consideration of the Committee
the matter of the issuance of formal invitations tp observe
the proceedings to the following named countries which were
at Brqtton Woocts and Savannah?
Liberia
Colombia
Venezuela
Haiti
New Zealand
and to tjio following international organizations?
Provisional International Civil Aviation Organization
International Labor Office
United Rations Relief and Rehabilitation Administration
Food and Agriculture Organisation of the %ited Nations
Economic and Social Council of the United Nations
Sat»f Sept, 28 ? 1946
-8-
The Chair should refer to the pfess release issued
on Augwt 27* 1946, stating* that, the Chairman of the Board
of Governors of the Bank and Fund would propose to the
convention of the Board of Goyernors that formal invitations be extended to the above-mentioned countries and
organizations if they wished to send observers•
Replies have been received from the following
cpxintries stating they i/vould welcome such an invitation?
Australia
Haiti
Venezuela
Replies have also been received from all five of the
international organisations stating they would welcome
such an invitation.
Thq Chair therefore calls upon the Secretariat for a
resolution inviting the three countries and five international organizations who have stated thsy would welcome
such an invitation*
10• The Chair proposes for the consideration of the Committee
the question of the site fqr the next annual meeting of the
Boards of Governors> for report at the last Joint Meeting
of the Boards»
f Chair prpppses for the consideration of the Gonatiittee,
for report at the last Joint Meeting of the Boards, the
nominations for the election of officers of the #6ard of
Governors, and of nominations for the membership of the
Procedures Committee, for the ensuing year, as follows•
(no suggested siaiq known as yet)
The Chair proposes for the consideration of the Committee
the quesiion of (a) press relations, (b) inforujatip^,
(c) open meetingsj. *^nd calls upon the Secretariat for
appropriate resolutions concerning those subjects*
If there ig no further T^usinoss, the Chair adjourns
meeting..
Sat», Sept, 28, 1946
4:00 PM - Joint Session of the Boards of Governors
Chairman «- Mr* Snyder
1*
The business of t h i s session will be to hear the reports of
the f i r s t meqting of the Procedures Committee, Reports will
be made by the designated Reporting Member (Egypt) 9 Reports
will be in the following order:
(a) The Fund
(b) The Bank
(c) Joint Business of Fund and 3ank
2# The
the
the
and
Chair calls the meeting to order to hear the report of
first meeting of the Procedures Committee, explaining
order of proceedings, first the Fund, then the Bank,
third, matters common to both institutions *
The Chair calls upon the Reporting Member (Egypt) to
proceed with the first report•
3* Report of the Procedures Committee on the Fund?
( ) Hecomuiondation on the agenda
(b) Recommendation for the establishment
of appropriate committees
(c) Recommendation concerning membership
of the Committees established
4 # Report of the Procedures Committee on the Bspik:
(a,) Recommendation on the agenda
(b) Recommendation for the establishment
of appropriate committees
(c) Recommendation concerning membership
of the Committees established
5? Report on matters common to the Fund and Pank;
(a) Report on invitations tq be extended to
non^meniber coi^itries represented at
Bretton Woods and Savannah zn$ to
other international organizations
(b) Report on the three questions of preps
relations, information, and oppn
meetings*.
Suggested Procedure
Monday - September 30, 1946
10*00 AM - Meeting of the Board of Governors of the Fund
Chairman (By-La?/ 7: The Chairman nay designate the Governor for
China, France, India, or the United Kingdom to act in
his place.)
1#
The Chair calls the meeting to order*
2. The Chair calls upon the Managing Director of the Fund,
Mr* Gutt, to present the first annual report, including
the proposed administrative budget, of the Board of
Executive Directors of the Fund, in accordance with
Section 10 of the Fund By-Laws and "the first paragraph
of the Fund By-Law 20, Tntoich reads as follows:
"3oc-« 10» Report of Executive Directors
"The Executive Directors shall have prepared
for presentation at the annual meeting of the Board
of Governors an annual report in which shall be
discussed the operations a.nd policies of the Fund
and which shall make recommendations of the Board
of Governors on the problems confronting the Fund.
"Sec* 20» Budget and Audits
"The Executive Directors shall instruct the
Managing Director to prepare an annual administrative budget to be presented to them for approval*
The budget so approved shall be incorporated in
the annual report to be presented to the Board of
Governors at their annual meeting."
After the presentation of the Managing Director's
report, the Chair invites discussion of the content of
the report; If it should appear to the Chair as a
result of the discussion that the Board is not satisfied
with the report, it is suggested that the Chair should
entertain z. motion to refer the report to committee for
further consideration and report with I-Jcommendations
back to. the Board•
Ify on the other hand, the Chair considers that
tho sense of the discussion points to a general agree-r
ment among the Fund Governors concerning the report,
Sept* 30, 1946
-2-
the Chair may then entertain a motion approving and
accepting the report* In the latter case,of course,
there would be no need to refer the report to the committee .
3# The Chair calls upon the Secretary of the Fund, Mr* Coe,
(or such other officer of tho Fund as the Fund may
designate) to present the Financial Report, as required
by the second paragraph of Byv-Law 20, which reads as
follows:
"The Executive Directors shall have an audit of
the accounts of the Fund made at least once each
year and on tho basis of this audit shall submit a
balance sheet and a statement of operations of the
Fund to the Board of Governors to be considered by
them at their annual meeting*"
The Chair should invite discussion among the Governors
of the Financial Report with a view to determining the
sense of the Governors toward the report* If it should
appear to the Chair as a result of the discussion that the
Board is not satisfied with the report, it is suggested
that the Chair should entertain a motion to refer the
report to committee for further consideration and report
with recommendations back to the Board*
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement
among the Fund Governors concerning the report, the
Chair may then entertain a motion approving and accepting the report* In the latter case,of course, there
would be no need to refer the report to the committee*
4* The Chair then announces the Meeting of the Board of
Governors of the Bank at 11;30 AM.
The Chair also announces that the afternoon will
be taken up by Fund committoo meetings.
Tho Chair calls upon the Secretary of the Fund,
Mr* Coe, to read the names of the committees scheduled
to meet Monday afternoon, tho membership of the committees, the rooms in which they will meet, and also
the time of the meeting as follows:
(The Fund has not yet indicated the organization, timing of the Fund Comittec Meetings
for Monday afternoon.*)
Mon,5 Sept. 30, 1946
-3-
5.
The Chair should then adjourn the meeting by his own
motion or by entertainment of motion from the floor
unless other business should be raised from the floor,
11:30 AM - Mjeting of the Board of-Governors cf the Bank
Chairman (I5y-Law 7: the Chairman may designate the Governor for
China, France, India, or the United Kingdom to act in
his place.)
1« The Chair calls the meeting to order.
2# The Chair calls upon the President of tne Bank, Mr. Meyer,
to present the first annual report of the Board, including
the proposed administrative budget, of the Board of Executive Directors of the Bank, in accordance with By-Law 10
and the second paragraph of By-Law 19, which reads as
follows:
"Sec. 10. Report of Bxecutive Directors
"The Executive Directors shall have prepared for
presentation at the annual meeting of the Board of
Governors an annual report in which shall be discussed the operations and policies of the Bank and
which shall make recommendations to the Board of
Governors on the problems confronting the Bank.
"Sec v 19. Budget and Audits
"The Executive Directors shall instruct the
President to prepare an annual administrative budget
to be presented tc them for approval. The budget as
approved shall be incorporated in the annual report
to be presented to the Board of Governors at their
annual meeting."
After the presentation of the Presidents report,
the Chair invites discussion of the content of the report.
If it should appear to the Chair as a result of the discussion that the Board is not satisfied with the report,
it is suggested that the Chair should entertain a motion
to refer the report to committee for further consideration and report v/xth recommendations back to the Board,
Mon.5 Sept, 3 0 v 1946
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement
among the Bank Governors concerning the report, the Chair
may then entertain a motion approving and accepting the
report• In the latter case, of course, there would be
no need to refer the report to committee•
3# The Chair calls upon the Secretary of the Bank, Mr. Mendels,
(or such other person as the Bank may designate), to present
the Financial Report as required by the first paragraph of
By-Law 19, which roads as follows:
"The Executive Directors shall have an audit of
the accounts of the Bank made at least once each year
and on the basis of this audit shall submit a state-*
ment of its accounts, including a balance sheet and
a statement of profit and loss, to the Board of
Governors to be considered by them at their annual
meeting•"
The Chair should invite discussion among the Governors
of the Financial Report with a view to determining the
sense of the Governors toward the report • If it should
appear to the Chair as a result of the discussion that the
Board is not satisfied "with the report, it is suggested
that the Chair should entertain a motion to refer the
report to a committee for further consideration and report with recommendations back to the Board•
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement
among the Bank Governors concerning the report, the Chair
may then entertain a motion approving and accepting the
reports In the latter case, of course, there would be
no need to refer the report to the committee •
4* The Chair should then announce that Monday afternoon will
be taken up with Fund Committee Meetings. The Chair
should then call upon the Secretary of the Fund (or any
other person designated in his place) to read the schedule
of Fund Committee Meetings for Monday afternoon*
5* Unless other business should ba raised from the floor,
the Chair should then adjourn the meeting by his own
motion or by entertainment of motion from the floor*
Suggested Procedure
Tuesday - October 13 1946
All day Tuesday -will be taken up vdth Fund Committee
Meetings and preparation of Fund Committee reports*
(The Fund has not yet advised us of the organization,
timing, and location of these Fund Committee Meetings.)
Suggested Procedure
Wednesday - October 2, 1946
The earlier part of the day will be taken up with such further
Fund Committee Meetings as may bo necessary and with the final
preparation of committee reports, and the reproduction and distribution of these reports*
2:00 EM - Meeting of the Board of Governors of the Fund
Chairman (According to By-Law 7, the Chairman may designate the
Governor for China, France, India, or the United Kingdom
to act in his place*)
1#
The Chair calls the meeting to order*
2* The Chair announces that the Board will proceed to hear
and consider the final reports of the various committees•
3« The Chair calls upon the RepQrting Member of the Rules and
Regulations Committee (Belgium) to present the final report
of the Committee • The reading completed, the Chair invites
consideration of the report by the Board, with a view to
determining the sense of the Governors toward the Report•
If it should appear to the Chair as a result of the discussion that the Board is not satisfied with the report,
it is suggested that the Chair should entertain a motion
to refer the report to a committee for further consideration and report with recommendations back to the Board*
If, on the other hand, the Chair considers that the
•sense of the discussion points to a general agreement
among the Fund Governors concerning the report, the Chair
may then entertain a motion approving and accepting the
report* In the latter caso, of course, there would be no
need to refer the report to the committee*
4* The Chair calls upon the Reporting Member of the Quota
Revisions Committoo (Mexico) to present the final report
of the Committee. The reacting completed, tho Chair invites consideration of the report by the Board, ?ath a
view to determining tho sense of the Governors toward
the report* If it should appear to the Chair as a result of the discussion that the Board is not satisfied
with the report, it is suggested that the Chair should
entertain a motion to refer the report to a committee
for further consideration and report "with recommendations back to the Board*
Wed«* Oct» 29 1946
-2-
If, on the otter hand, the Chair considers that the
sense of the discussion points to a general agreement among
the Fund Governors concerning the report, the Chair maythen entertain a motion approving and accepting the report*
In the latter case, of course, there would be no need to
refer the report to the committee •
The Chair calls upon the Reporting Member of the Membership
Committee (Netherlands) to present the final report of the
Committee* The reading -completed, the Chair invites consideration of the report by the Board, with a view to determining the sense of the Governors toward the report•
If it should appear to the Chair as a result of the discus si on that the Board is not satisfied with the report,
it is suggested that the Chair should entertain a motion
to refer the report to a committee for further consideration and report with recommendations back to the Board*
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement among
the Fund Governors concerning the report, the Chair may
than entertain a motion approving and accepting the report*
In the latter case, of course, there would be no need to
refer the report to the committee.
The Chair calls upon the Reporting Member of the Financial
Committee (Canada) to present the final report of the Committee* The reading completed, the Chair invites consideration of the report by the Board, with a view to determining
the sense of the Governors toward the report* If it should
appear to the Chair as a result of the discussion that the
Board is not satisfied with the report, it is suggested
that the Chair should entertain a motion to refer the report
to a committee for further consideration and report with
recommendations back to the Board*
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement among
the Fund Governors concerning the report, the Chair may then
entertain a motion approving and accepting the report* In
the latter case, of course, there would be no need to refer
the. report to the Committee•
Other Fund Business — The Chairv inquires whether there is
any other business to be considered* If other business
develops, it should be handled depending on its nature (a)
either by the Board meeting, or (b) if necessary, by reference back to the Procedures Committee*
Wed., Oct. 2, 1946
8. The Chair announces that the following day (Thursday)
will be taken up by meetings of the various committees
of the Bank*
The Chair calls upon the Secretary of the Bank,
Mr. Mendels,' (or someone designated in his place), to
announce the schedule of canmittees which will meet,
then membership, time, and place of the meetings*.
9* The Chair should then adjourn the meeting•
Suggested Procedure
Thursday - October 3, 1946
All day Thursday will be taken up by meetings of the
Bank as follows:
(Schedule of the meetings has not yet been
submitted by the Bank)
Suggested Procedure
Friday - October U> 1946
All day Friday will be taken up by meetings of the Bank
committees and preparation, reproduction and distribution
of Bank committee reports•
(Schedule of these meetings has not yet been
submitted by the Bank)
Suggested Procedure
Saturday *» October 5, 1946
11:00 AM - Meeting of the Board of Governors of the Bank
Chairman (According to By-Law 7, the Chairman may designate the
Governor for China, France, India, or United Kingdom
to act in his place:*)
1* The Chair calls the meeting to order,
2. The Chair then states that the meeting Tail proceed to
consider the reports of .the various committees.
3. The Chair then calls upon the Reporting Member of the Rules
and Regulations Committee (Belgium) to present the report
to the committee. The reading completed, the Chair invites
consideration of the report by the Board, with a view to
determining the sense of the Governors tov/ard the report•
If it should appear to the Chair as a result of the discussion that the Board is not satisfied with the report,
it is suggested that the Chair should entertain a motion
to refer the report to a committee for further consideration and report with recommendations back to the Board.,
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement among
the Bank Governors concerning the report, the Chair may then
entertain a motion approving and accepting the report. In
the latter case, of course, there would be no need to refer
the report to the Committee.
4# The Chair calls upon the Reporting Member of the Membership
Committee (Netherlands) to present the final report of the
Committee. The reading completed, the Chair invites consideration of the report by the Board, ?ath a view to
determining the sense of the Governors toy/ard the report'.
If it should appear to the Chair as a result of the dis~
cussion that the Board is not satisfied with the reportp
it is suggested that the Chair should entertain a motion
to refer the report to a committee for further consideration and report vdth recommendations back to the Board.
If, on the other hand, the Chair considers that the
sense of the discussion points to a, general agreement
among the Bank Governors concerning the report, the Chair
Sat,5 Oct. 53 1946
-2-
may then entertain a motion approving and accepting the
report. In the letter case, of course, there would be
no need to refer the report to the committee*
5 • The Chair calls upon the, Reporting Member of the Financial
Committee (Canada) to present the final report of the Committee • The reading completed, the Chair invites consideration of the report by the Board, with a. view to determining
the sense of the Governors toward the report• If it should
appear to the Chair as a result of the discussion that the
Board is not satisfied with the report, it is suggested
that the Chair should entertain a motion to refer the
report to a committee for further consideration and report "with recommendations back to the Board•
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement among
the Bank Governors concerning the report, the Chair may then
entertain a motion approving and accepting the report• In
the latter case, of course, there -would be no need to refer
the report to the committee•
6#
The Chair calls upon the Reporting Member of the Quota
Revisions Committee (Mexico) to present the final report
of the Committee, The reading completed, the Chair invites
consideration of the report by the Board, with a view to
determining the sense of the Governors toward the report*
If it should appear to the Chair as a result of the discussion that the Board is not satisfied with the report,
it is suggested that the Chair should entertain a motion
to te£er the report to a committee for further consideration and report with recommendations back to the Board*
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement among
the Bank Governors concerning the report, the Chair may then,
entertain a motion approving and accepting the report• In
the latter case, of course, there would be no need to refer
the report to the committee.
?* The Chair calls upon the Reporting Member of the Advisory
Council Committee (Netherlands) to present the final report
of the Committee • The reading completed^ the Chair invites
consideration of the report by the Board, with a view to
determining the sense of the Governors toward the report*
If it should appear to the Chair as a result of the discussion that the Board is not satisfied with the report,
Sat*5 Oct, 53 1946
—3—
it is suggested that the Chair should entertain a motion
to refer the report to a committee for further consideration and report with recommendations back to the 3oard*
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement
among the Bank Governors concerning the report, the Chair
may then entertain a motion approving and accepting the
report* In the latter case, of course, there ?rould be
no need to refer the report to the committee*
8* Other Bank Business —* The Chair inquires whether there
is any other business to be considered. If' other business
develops, it should be handled, depending on its matter,
(a) either by the Board Meeting, or (b) if necessary by
reference back to the Procedures Committee •
9* The Chair announces the Joint Session of the Boards of
Governors Meeting at 3*00 PK*
10* If there is no further business, the Chair should then
adjourn the meeting*
00 HI - Joint Session of the Boards of Governors
Chairman ~ Lr* Snyder
(According to By-iaw 7, the Chairman may designate the
Governor for China, France, India, or the. United Kingdom
to act in his place*)
1» The Chair calls the meeting to order*
2#
The Chair states that the Boards will hear the joint
report of the Procedures Committee on the site of the
next annual meeting*
3« The Chair then calls upon the Reporting Member of the
Procedures Committee (Egypt) to present the report*
The reading completed, the Chair invites consideration
of the report by the Board, with a view to determining
the sense of the Governors toward the report* If it
should appear to the Chair as a result of the discussion
that the Board is not satisfied v/ith the report, it is
suggested that the Chair should entertain a motion to
refer the report to. a committee for further consideration
and report with recommendations back to the Board.
Sat., Oct. 5, 1946
-4-
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement among
the Bank Governors concerning the report, the. Chair may then
entertain a motion approving and accepting the report• In
the latter case, of.course, there would be no need to refer
the report to the committee•
4« The Chair states that the Boards will hear the Joint Report
of the Procedures Committee on nominations for- officers of
the Board of Governors and on nominations for membership
on the Procedures Committee for the ensuing year.
5# The Chair then calls upon the Reporting liember of the
Procedures Committee (Egypt) to present the report.
reading completed, the Chair invites consideration of the
report by the Board, with a view to determining the sense
of the Governors toward the report. If it should appear
to the Chair as a result of the discussion that the Board
is not satisfied with the report, it is suggested that, the
Chair should entertain a motion to refer the report to a
committee for further consideration and report with recommendations back to the Board.
If, on the other hand, the Chair considers that the
sense of the discussion points to a general agreement
among the Bank Governors concerning the report, the Chair
may then entertain a motion approving and accepting the
report. In the lattor case, of course, there would be no
need to refer the report to the committee.
6. The Chair inquires whether there is any further business.
Presumably hero, onq or two governors will address closing
remarks to the Chair. After the conclusion of these remarks, the Chair will make its own closing remarks to the
Boards•
7. At the conclusion of these remarks, the Chair will adjourn
the meeting until the noxt annual meeting.
BANK AGENDA
The Agenda for the Meeting on September 27, 194-6 of the Board of
Governors of the International Bank for Reconstruction and Development
is as follows:
I. ORGANIZATION OF MEETING AND ELECTION OF OFFICERS
II. REPORT OF THE PRESIDENT ON BEHALF OF THE EXECUTIVE DIRECTORS
III. RULES AND REGULATIONS OF THE EXECUTIVE DIRECTORS
IV. ADVISORY COUNCIL
V. APPLICATIONS FOR MEMBERSHIP
VI. LIAISON WITH ECONOMIC AND SOCIAL COUNCIL AND OTHER INTERNATIONAL
ORGANIZATIONS
VII. SITE OF NEXT iJOTAL MEETING
1. Organization end
Elections
THE BAHK
fiscal Year and Annual Meeting of the Governors
That the fiscal year of the International Bank for Reconstruction
and Development shall begin on July 1.
That the Chairman shall pall the first annual meeting of the Board
of Governors during the month of Saptember ^6
HotIce of Meetings
(Section J of the B
The President shall notify all members of any meeting of the
Board of Governors*
Notice shall be sent to members by telegram or cable not less
than sis veefes prior to the date of any meeting, except that in urgent
this period may be shortened to not Ies6 than 10
of goard Meetings (Section 6 of the By-Law$)
(Decision on adoption of agenda is by majority pf tp+al votes cast.
Tue agenda for the Meetings of the Board of Governors shall be
prepared under the direction of the Executive Directors by the President and shall be transmitted simultaneously with the notice to the
membersi required to be sent pursuant to Section 3»
Additional subjects may be placed upon the agenda by,any governor
or under special circumstances by the President at the direction of
the Executive Directors provided notice thereof shall have been given
to the Bank in writing not less than 7 &&ys prior to the date of the
meetings ?ke President shall inform the members of any such additions
to the agenda as soon as possible, Tne Board may authorize the
placing of any matter upon the agenda even though the required notice
shall not have been given*
Item I Organisation of Meeting and Election of Officers
of Bank
Agenda Election of Chairman andTice Onairman (Section 7 of By^Laws)
(Decision is by majority of the total votes cast*)
At each annual meeting of the Board of Governors shall select a
Governor to act .as Chairman and at least two other Governors to act
as Vice Chairman until the next annual meeting*
In the absence of the Chairman ths Vice Chairman designated by
the Chairman shall act in his place,
- 2 Minutes
(Section 9 of the ^jr-
The Board shall keep a summary record of its proceedings which
shall be available to all members and which shall be filed with the
Executive Directors for their guidance.
Report of Ex.
Directors
Item II
of Bank
Agenda
Report of the President on Behalf of the Executive Directors
(Decision is by majority of the total votes cast*)
Report of Executive Directors
(Section 10 of the By-Laws)
The Executive Directors shall have prepared for presentation at
the annual meeting of the Board of Governors an annual report in which
shall be discussed the operations and policies of the Bank and which
shall make recommendations to the Board of Governors on the problems
confronting the Bank*.
Financial Statement
Budget and Audits
(Section 19 of the By-J*aws)
(Decision is by majority of the total votes cast.)
The Executive Directors shall have an audit of the accounts of
the Bank made at least once each year and on the basis r of this audit
sl^all submit a statement of its accounts, including a balance sheet
and a statement of profit and loss, to the Board of Governors to
be considered by then at their annual meeting*
CONFIDENTIAL
Not to be released for publication before 11:30 A.M. E.S.T.
1EETING
Monday, September 309 1946.
HRNORS
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
FIRST ANNUAL REPORT
by tLe
EXECUTIVE DIRECTORS
n, D. C.
September 27,1946
FIRST ANNUAL MEETING
of tke
BOARD OF GOVERNORS
of tke
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
FIRST ANNUAL REPORT
Ly tke
EXECUTIVE DIRECTORS
Washington, D. C.
September 27, 1946
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
September 27, 1946
My dear Mr. Chairman:
In accordance with Section 10 of the By-Laws of
the International Bank for Reconstruction and Development, I have the honor to submit to the Board of
Governors the Annual Report of the Executive Directors, and, in accordance with Section 19 of the By-Laws,
a financial statement, based on an audit of the accounts of the Bank, together with a statement on the
annual administrative budget.
Sincerely yours,
Eugene Meyer,
President.
Honorable John W. Snyder,
Chairman, Board of Governors,
International Bank for Reconstruction and Development,
Washington, D. C.
Contents
PAGE
Establishment of the Bank
Election of the President
Formal Commencement of Operations and Calls of Capital...
Investment of Funds Received by the Bank in Payment
of the First 2% of the Subscriptions
The Scope of the Bank's Lending Operations
Organization of the Executive Directors
Proposed Amendments to the By-Laws of the Bank
Organization of Bank's Staff
Recruitment Policies
Procedure on Loan Applications
Marketing Policies
Cooperation with Other International Organizations
Membership
Interpretations
Advisory Council
Financial Statement
Statement on Administrative Budget
Conclusion
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
1
2
2
3
4
5
6
7
8
9
10
10
12
12
13
13
14
16
17
19
20
21
22
28
33
FIRST ANNUAL REPORT TO THE BOARD OF
GOVERNORS OF THE INTERNATIONAL BANK
FOR RECONSTRUCTION AND DEVELOPMENT
(As of September 20, 1946)
This first annual report of the Executive Directors comes
at the threshold of the Bank's operations. During the few
months which have passed since the Executive Directors held
their first meeting in May, substantial progress has been made
in establishing the Bank's structure, securing staff personnel, and
developing working procedures and relationships. The policy
and operational questions which lie ahead have been examined
and preparations have been made to meet them when they arise.
As the Board of Governors' meeting convenes, the Bank stands
ready to play the important role in reconstruction and development which has been assigned to it by its 38 member Governments.
Establishment of the Bank
Under the By-Laws adopted at Savannah by the Board of Governors, the principal office of the Bank has been established in
Washington. In accordance with a resolution adopted by the
Board of Governors, the first meeting of the Executive Directors was held on May 7. The Executive Director representing
the United States acted as Temporary Chairman and continued
so to act until the election of the President.
The seven Executive Directors elected by the Board of Governors at the Savannah meeting took office on May 7, as did
four of the appointed Executive Directors. The fifth appointed
Executive Director, representing the United Kingdom, served
in a temporary capacity until the arrival of the permanent Executive Director for the United Kingdom on May 29. The only
subsequent change in the membership of the Executive Directors was caused by the resignation of Mr. Camille Gutt, of Belgium, to become Managing Director of the International Monetary Fund. Mr. Gutt was succeeded as Executive Director by
Mr. Hubert Ansiaux, who was elected on June 14 by votes of
the Governors representing Belgium, Iceland, Luxembourg and
Norway. Ten permanent Alternate Directors have been appointed
and two vacancies exist.
A list of the Governors and their Alternates appears as Appendix "A", and a list of the Executive Directors and their Alternates appears as Appendix "B*.
Election of the President
On the agenda of the first meeting of the Executive Directors was the election of a President of the Bank, but consideration of this item was postponed until June 4, when Mr. Eugene
Meyer was nominated and unanimously elected. Mr. Meyer took
office on June 18.
Formal Commencement of Operations and Calls of Capital
The Executive Directors fixed June 25, 1946 as the date
upon which the Bank would formally begin operations. The
member Governments were advised that such date had been
fixed and that, under the Articles of Agreement, the balance
of the first 2% of their capital subscriptions, payable in gold
or United States dollars, would be due within sixty days. The
members also were advised of an additional call of 3% of their
capital subscriptions, payable on or before November 25, 1946,
in their local currencies. They were notified at the same time
that the Bank would make another call, as of September 25, for
a further 5% of their subscriptions, payable in their respective
currencies, by November 25. This further call has now been
authorized. At the time this September 25 call is made, notice
will be given of the Bank's intention to make two more calls,
each for an additional 5% of the subscriptions payable in the
local currencies of the members by February 25, 1947, and May
26, 1947, respectively.
In response to the call for the balance of the first 2% of
the capital subscriptions of members, the Bank received $143,786,883.70* of a total of $153,400,000. The unpaid amount is
accounted for as follows:
(1) Payment of %% of the subscriptions of China, Czechoslovakia, Denmark, Greece, Norway, Poland and Yugoslavia was
*This figure includes the payment of the 1/100 of 1% of the subscription of each member made at the time of its acceptance of the Articles
of Agreement, but it does not include that portion ($1,989,616.30) of the
payment of $1,990,000 due from the Union of South Africa, represented by
gold which was reported to have been shipped on August 24, 1946 and to
be in transit to the Federal Reserve Bank of New York at the time of the
preparation of this report
postponed for a period of five years under Article II, Section
8 (a) (i) of the Articles of Agreement, which provides for
such postponement in die case of a member whose metropolitan
territory suffered from enemy occupation or hostilities during the
war. These postponements amount to $5,165,000.
(2) Czechoslovakia and Yugoslovia have requested a postponement with respect to the remaining V/2% of their subscriptions, amounting to $1,862,500 and $596,000 respectively, under
Article II, Section 8 (a) (ii) of the Articles of Agreement, which
provides that an original member which cannot make payment
of the 2% of its subscription, payable in gold or United States
dollars, because it has not recovered possession of its gold reserves which are still seized or immobilized as a result of the war,
may postpone all payment of such 2% until such date as the
Bank may decide. These two requests are under consideration
by the Executive Directors.
In addition to the amount received by the Bank from payments of 2% of the members* subscriptions, the United States
has paid the call for 3% of its subscription, amounting to $95,250,000, and payments have been made by Chile and Costa Rica
of the calls for 3% and 5% of their subscriptions, amounting to
$2,800,000 and $160,000, respectively. These payments, made
in die local currencies of the members, aggregate $98,210,000
in value, making the total amount received by the Bank to date
equivalent to $241,996,883.70 at the time of payment.
Of the total, $14,072,258.62 was received in gold, of which
$9,395,758.64 is held by the Federal Reserve Bank of New York
and $4,676,499.98 is held by the Bank of England. A list of the
depositories of the Bank, designated by the members, appears in
Appendix " C \
investment of Funds Received by the Bank in Payment of
the First 2% of the Subscriptions
The question of the investment of the Bank's funds has been
under consideration by the Executive Directors for some time.
They have recently authorized die President or the Vice President to invest, at current market prices, in bills, notes and certificates of the United States Treasury, maturing not more than
twelve months after the date of purchase, die United States
dollars received by the Bank in payment of the first 2% of the
Bank's subscribed capital.
The Scope of the Bank's Lending Operations
The purposes of the Bank are clearly set out in Article I
of the Articles of Agreement as follows:
"(i) To assist in the reconstruction and development of
territories of members by facilitating the investment of capital for productive purposes, including the restoration of economies destroyed or disrupted by war, the reconversion of
productive facilities to peacetime needs and the encouragement of the development of productive facilities and resources in less developed countries.
"(ii) To promote private foreign investment by means
of guarantees or participations in loans and other investments
made by private investors; and when private capital is not
available on reasonable terms, to supplement private investment by providing, on suitable conditions, finance for productive purposes out of its own capital, funds raised by it
and its other resources.
*(iii) To promote the long-range balanced growth of
international trade and the maintenance of equilibrium in balances of payments by encouraging international investment
for the development of the productive resources of members,
thereby assisting in raising productivity, the standard of living and conditions of labor in their territories.
"(iv) To arrange the loans made or guaranteed by it
in relation to international loans through other channels so
that the more useful and urgent projects, large and small
alike, will be dealt with first.
*(v) To conduct its operations with due regard to the
effect of international investment on business conditions in
the territories of members and, in the immediate post-war
years, to assist in bringing about a smooth transition from
a wartime to a peacetime economy."
It might have been expected that with the formal commencement of operations on the 25th of June, applications for
loans would have been presented to the Bank in large numbers.
Nevertheless, the Bank has so far received only two letters from
its members requesting loans. It is expected that these letters
will soon be followed by properly documented loan applications, and in the meantime preliminary discussions are taking
place.
The absence of loan applications may be surprising at first
sight. But a little reflection will indicate some of the reasons
why applications have not been received in larger numbers.
When the tide of war ebbs, the physical devastation and other
physical changes caused by the war are there for all to see. What
is not so obvious are changes in economic and social structure as
well as the destruction of administrative systems and of the necessary mechanisms of commerce and industry. On the one hand,
this makes it more difficult to devise plans for a long-run reconstruction of the countries concerned; on the other hand, it leads
inevitably to whole peoples having to preoccupy themselves with
the mechanics of avoiding starvation. It is not surprising, then,
that there has been in so many countries a period during which
relief on a large scale has been necessary before there could be
any thought of preparing major programs of reconstruction. In
this sphere UNRBA provided magnificent assistance and prevented serious disasters. But the period of relief must come
to an end, and it is vital that well articulated and productive
programs of reconstruction and development should be ready
against that time. Such programs are the raw material of the
Bank's business. The Bank is equipped now to consider applications for loans to cover such programs and to investigate them
with reasonable dispatch. Indeed, the Bank is prepared to consider furnishing technical assistance in the preparation of loan
applications. The Articles of Agreement of the Bank prescribe
the standards which it must apply in the consideration of such
applications. It is obvious, therefore, that in order to avoid
unnecessary delay in the consideration of applications for loans,
they must be supported by adequate data which will enable
the Bank to determine whether or not they conform to the prescribed standards.
Organization of the Executive Directors
By action of the Executive Directors, the respective functions and duties of the Executive Directors and the officers of the
Bank have been determined and the pattern of the Bank's operations has been outlined.
Matters of policy determination are the responsibility of the
Executive Directors, while operational, administrative, and organizational questions are the responsibility of the President, subject to the general direction and control of the Executive Directors. The President is the presiding officer of the Executive
Directors and is entitled to a deciding vote in the case of an
equal division.
The Executive Directors are constantly available for consultation with the administration of the Bank. Formal meetings
of the Executive Directors are held frequently, and they also
meet with the senior members of the staff for informal discussions concerning the Bank's operations.
The Executive Directors established a number of committees even before the selection of the President, and valuable
discussions on various aspects of the Bank's structure and work
took place in the early months of the Bank's existence. In the
sphere of policy the deliberations of the Executive Directors have
been carried to the point where provisional conclusions now need
to be checked and developed by reference to specific and detailed loan applications.
The committees of the Bank have been consolidated into
standing committees on membership, financial policy, interpretation, information and liaison. These committees are composed
solely of Executive Directors, but the President has designated
members of the staff to meet with each of them. The membership of the existing standing committees appears in Appendix "D". The Bank and the Fund have also agreed that there
shall be a joint standing committee to consider matters of common concern to the two institutions. Ad hoc committees have
been and will be established from time to time to consider and
make recommendations to the Executive Directors on specific
matters referred to them.
Rules of procedure defining and regulating meetings of
the Executive Directors, the agenda for meetings, voting, committees, minutes, notices, publicity and amendments, have been
adopted by the Executive Directors. The text of these rules
of procedure is being submitted separately to the Board of Governors for review pursuant to Section 16 of tie By-Laws of the
Bank.
Proposed Amendments to the By-Laws of the Bank
Certain amendments to the By-Laws of the Bank will be
proposed to the Board of Governors for their approval. These
are being submitted separately for consideration.
Organization of Bank's Staff
Although the organizational pattern of the staff must necessarily remain to a large extent flexible in the present formative
stage of the Bank's development, the following offices and departments have been established on a tentative basis to carry
on the work of the Bank:
Office of the President
Office of the Secretary
Office of the Treasurer
Legal Department
Loan Department
Research Department
Personnel Office
Office Services
(1) Office of the President.-In addition to the President, this
Office consists of the Vice President and two Assistants to the
President. The Vice President is Mr. Harold D. Smith, formerly
Director of the Bureau of the Budget of the United States Government.
(2) Office of the Secretary.—Mr. Morton M. Mendels, of
Canada, has been appointed Secretary of the Bank. In addition to his duties as such staff member, he acts as Secretary of die
Executive Directors and of the Board of Governors. He is also
responsible for providing secretariat service for the committees
of the Executive Directors.
Prior to the appointment of Mr. Mendels, Mr. John S. Hooker,
of Chevy Chase, Maryland, acted for several months as Temporary Secretary.
(3) Office of the Treasurer.—Mr. D. Crena de Iongh, of the
Netherlands, now an Alternate Executive Director, has been
appointed Treasurer.
The Bank was fortunate in receiving the temporary assistance during July and August of representatives of the Board
of Governors of the Federal Reserve System of the United States,
who developed, in conjunction with members of the Bank's staff,
a chart of accounts for the Bank.
(4) Legal Department.—This Department is headed by the
General Counsel, Mr. Chester A. McLain, of New York, who is
responsible for the legal staff of the Bank.
(5) Loan Department—Pending the appointment of a permanent Loan Director, Mr. J. W. Beyen, of the Netherlands,
has been acting as Temporary Loan Director in addition to his
duties as Executive Director.
For the time being, it is contemplated that the engineering
and technical staff of the Loan Department will be kept to a
minimum and that, to the maximum extent practicable, the technical services required by the Bank will be secured on a consulting basis. To this end, discussions have been held with
various technical groups for the purpose of enabling the Bank
to be in a position to call upon technical experts in the United
States and elsewhere to advise on loan applications which may
be presented.
(6) Research Department-The Research Department is
responsible for economic, statistical and other research required
in connection with the operations of the Bank. Mr. Leonard
B. Rist, of France, formerly an Alternate Executive Director,
has been appointed Research Director.
Discussions have been conducted with the research departments of the International Monetary Fund and of the United
Nations with the view of arranging for cooperation in the exchange of statistical and other information and research services. As a result it is hoped to keep the research staff of the
Bank confined to a small group of highly qualified economists
and statisticians.
(7) Personnel Office.-The Personnel Office is responsible
for personnel matters in connection with the Bank's staff. Mr.
William Howell, of Washington, D. C , formerly Personnel Director of UNRRA, is serving as Acting Director of Personnel.
(8) Office Services.—Office Services is responsible for all
supply, space, housekeeping, transportation and similar administrative services.
The Bank has been fortunate in receiving, during the past
few months, the assistance of representatives of the Bureau of the
Budget of the Upited States Government in connection with the
development of its administrative procedures.
Recruitment Policies
Pending the receipt of loan applications, the Bank has not
attempted to build up its organization beyond its needs, but the
8
Bank is in a position to assemble additional personnel as soon as
it is required.
In recruiting the Bank's staff, two principles have been consistently followed: first, that appointees shall have a high order
of competence; and second, that the staff be recruited with due
regard to geographical representation.
The success of the Bank's operations depends to a large extent on the character of its personnel, and it is believed that
the policy of careful selection will, in the long run, pay large dividends in the form of efficient and sound operation. Where necessary, positions have been filled on a temporary basis pending permanent appointments. By care in the selection of competent
personnel and by the use of expert consultants in connection with
special problems as they arise, the regular staff will be smaller
than otherwise would be necessary, with resulting benefits in both
efficiency and economy.
Procedure on Loan Applications
The Executive Directors and the staff have been engaged in
continuous study of the loan policies to be pursued by the Bank.
These studies have necessarily been preliminary in nature, since
development of definitive policies in substantial detail can only
be intelligently undertaken in the light of loan applications which
shall be received.
The Executive Directors have agreed as to the method of
handling loan applications. The procedure will consist of three
stages.
After preliminary conversations with the applicant, the President will bring the application before the Executive Directors, so
that they may decide whether the Bank should proceed with the
negotiations. If die Executive Directors determine that the Bank
should continue the negotiations, they will authorize the President
so to proceed and a Loan Committee will be appointed ad hoc for
the study of the particular application in accordance with the
Articles of Agreement.
Each Loan Committee will include an expert selected by the
member in whose territory the project to be financed is located
and one or more members of the technical staff of the Bank.
The Loan Committee will study the proposal and submit
a written report to the President with its recommendations con-
9
cerning the merits of the proposal. The Loan Committee will
not participate in the actual negotiations, but it will maintain
close touch with the negotiators in order that they may coordinate the negotiations with the findings of the Loan Committee.
Throughout the procedure the Executive Directors will be
kept continuously informed about the progress of the negotiations.
The ultimate proposal of the President, together with the
accompanying report of the Loan Committee, will be brought
before the Executive Directors for their final decision.
Marketing Policies
Preliminary investigation has indicated that most of the funds
required by the Bank in addition to its capital must, for the present, be obtained in the United States. Informal discussions have
accordingly been held with representatives of leading investment bankers, commercial banks, savings banks and insurance companies in order to familiarize them with the nature of
the Bank's operations and to obtain their views.
In most important states, legislative action will be required
before the Bank's securities can legally be purchased by insurance companies or savings banks, or by trustees who are limited
to investments which are legal for savings banks. Measures have
been taken by the United States authorities and by representatives of institutional investors looking toward the introduction of
the requisite legislation to permit such purchases, but most of the
State legislatures are now in recess and will not meet again until
after January 1, 1947. An encouraging first step was taken by
the New York State Legislature at its last session, when it
authorized savings banks in the State of New York to purchase securities issued or guaranteed by the Bank.
Preliminary study of the marketing possibilities in Canada
has also been undertaken, and studies will be made, as circumstances develop, of the possibilities of selling in markets,
other than the United States and Canada, securities issued or
guaranteed by the Bank.
Cooperation with other International
Organizations
The Executive Directors recognize that the Bank must
maintain close relations with the International Monetary Fund,
10
and that cooperation with the Economic and Social Council of
the United Nations, as well as with other specialized agencies of
the United Nations, is necessary in the light of the problems of
mutual concern which arise.
A joint standing committee of the Executive Directors of the
Bank with the Executive Directors of the International Monetary
Fund is being created to consider matters of common interest.
This will serve as a bridge between the two institutions in those respects in which they should complement each other. The Secretaries of the Bank and the Fund have also been charged with the
responsibility of informing each other of new subjects of mutual
interest to be considered by the Executive Directors of each institution, and they have been authorized to exchange documents
pertinent to matters of joint concern. The Chairman of the Executive Directors of each of the two institutions will invite a
representative of the other to attend meetings at which matters
of common interest are to be discussed, and the two Chairmen
will maintain close touch with each other and will propose to
the respective Executive Directors additional measures necessary
to insure close cooperation.
The Bank has had representatives in attendance at meetings
of the Food and Agriculture Organization in Washington during the spring and in Copenhagen during the summer, and a representative from the Bank attended meetings in London of the
Sub-Commission of the Economic and Social Council on Economic Reconstruction of Devastated Areas. Observers from the
Bank were also in attendance at meetings of the Economic and
Social Council during June and September.
Pursuant to the instructions of the Board of Governors at
their Savannah meeting, a number of discussions have been held
with representatives of the United Nations concerning arrangements for cooperation, particularly with the Economic and Social Council. The Executive Directors have felt that, pending
further development of the Bank's activities, it would be premature to attempt to define the exact scope and nature of such cooperation in a written agreement. They believe that the development of practical working relationships will be facilitated
rather than delayed by the absence of a formal agreement.
11
Membership
Recommendations with respect to the admission of countries which have applied for membership in the Bank are being
submitted separately to the Board of Governors in accordance
with Section 20 of the By-Laws of the Bank.
Interpretations
By Resolution No. 6, adopted on March 18, 1946, the Board
of Governors referred to the Executive Directors the request of
the Governor for the United States, pursuant to Section 12 of
the Bretton Woods Agreement Act, for an interpretation of the
Articles of Agreement with regard to the authority of the Bank
to make or guarantee loans for programs of economic reconstruction and the reconstruction of monetary systems, including longterm stabilization loans. As has been set out in a separate report
to the Board of Governors, to which reference should be made,
the Executive Directors have agreed that such loans are within
the authority of the Bank. This separate report appears as
Appendix "E".
The Executive Directors have also rendered two other decisions with regard to the interpretation of the Articles of Agreement of the Bank, as follows:
(1) In accordance with Resolution No. 7, adopted by the
Board of Governors on March 18, 1946, the Executive Directors,
at their meeting on May 9, 1946, decided that, under Article V,
Sections 4 (b) (i) and 4 (d) of the Articles of Agreement of
the Bank, any member of the Bank, having one of the five largest
subscriptions to the capital of the Bank at the date of a regular
election of Executive Directors or at any date between regular
elections of Executive Directors, shall be entitled to appoint an
Executive Director who shall hold office until the next regular
election of Executive Directors, without prejudice to the right of
a subsequently admitted member of die Bank to appoint an Executive Director if it has one of the five largest subscriptions to
the capital of the Bank.
(2) At their meeting on June 20,1946, the Executive Directors decided that, under Article IV, Section 2 (a) of the Articles
of Agreement, the United States does not have power to control
the use of United States dollars paid to the Bank in lieu of gold
pursuant to Article II, Section 7 (i) of the Articles of Agreement.
12
Advisory Council
Recommendations in respect of the Advisory Council are
being submitted separately to the Board of Governors in accordance with Resolution No. 5 of the Board of Governors.
Financial Statement
The accounts of the Bank have been audited as of June 30,
1946, by Price, Waterhouse & Co. in accordance with Resolution No. 19 adopted by the Board of Directors on September 10,
1946. The Auditors' Report appears as Appendix "F". Financial statements, as of August 31, 1946, prepared by Office of the
Treasurer of the Bank, appear as Appendix "G".
Summary information relating to the Bank's financial condition as of August 31, 1946, is given below.
Total assets were $385,157,513.64. Gold amounted to $14,072,258.62, of which $9,395,758.64 was held by the Federal Reserve Bank of New York and $4,676,499.98 by the Bank of England. Deposits with banks totalled $227,729,955.32, of which
$224,730,887.11 was on deposit with the Federal Reserve Bank
of New York and $39,068.21 with the American Security and
Trust Co., Washington, D. C. The account at the American Security and Trust Company is used for the payment of the Bank's
operating expenses. $2,960,000, the U. S. dollar equivalent at
exchange rates in effect at the date of deposit, was in the Central Banks of Chile and Costa Rica. These deposits in Chile
and Costa Rica represent payments of the 3% stock subscription call made as of June 25, 1946 and due on or before November 25,1946, and the 5% call made as of September 25, 1946,
also due on or before November 25, 1946.
Calls on subscriptions to capital stock outstanding as of
August 31,1946 amounted to $143,353,116.30, including outstanding balances of $9,613,116.30 on the 2% call payable on or before
August 24, 1946, and of $133,740,000 on the 3% call payable
on or before November 25, 1946. The subscription calls and
payments thereon are discussed in detail in the section of this
Report entitled "Formal Commencement of Operations and Calls
of Capital".
Miscellaneous assets of $2,183.40 include travel and other advances and service deposits.
13
Total liabilities of $1,939,676.77 include accounts payable
of $73,948.35, a reserve of $15,728.42 for estimated liability for
income taxes on salaries paid through August 31, 1946, and deferred credits of $1,850,000, the last item representing the advance payments by Chile and Costa Rica of the 5% stock subscription call which was not actually made until after August
31, 1946.
Capital stock of $383,500,000 represents the 2% call of $153,400,000 and the 3% call of $230,100,000.
The deficit of $282,163.13 is the total of the operating expenses of the Bank to August 31,1946.
The accounting system that has been established will reflect
at all times the various member currencies held by the Bank, as
well as the sources of the funds.
Statement on Administrative
Budget
Paragraph 4 of Resolution No. 2, adopted by the Board of
Governors on March 16, 1946, authorized the Temporary Secretary of the Bank, until permanent procedures should be established, to expend up to $200,000 to meet salaries and other administrative expenses of the Bank, including transportation expenses
of Governors and their Alternates. The Temporary Secretary
made disbursements under such authority until July 15, 1946.
Thereafter, disbursements were made by the President or Vice
President of the Bank. Total disbursements through July 15,
1946 amounted to $75,703.40.
The expenses of the Bank to August 31, 1946 totaled $282,163.13, including accrued expenses and provision for estimated
liability for income taxes on salaries and expenses of Executive Directors, their Alternates and the staff. Of the total, $33,086.50 represented expenses of the Governors and their Alternates in attending the meeting at Savannah, Georgia, and $8,407.73 represented expenses of the Executive Directors and their
Alternates in moving to Washington.
At the date of this Report, in addition to the Executive Directors and Alternates, die staff and secretarial force of the Bank
totaled 72. Operating expenses, on the basis of the present staff
and office space, are accruing at a rate of approximately $100,000
a month, or at an annual rate of $1,200,000. However, the Bank
14
is still in the process of developing its organization and this
rate of expenditure will necessarily increase.
Small staffs have been recruited for the offices of the Executive Directors and their Alternates, the offices of the President, the Secretary, the Treasurer, the General Counsel, the
Personnel Office and Office Services. The Director of the Loan
Department is serving in that capacity on a temporary basis, and
the Director of the Research Department only recently assumed
the duties of his office. The staffs for these departments will be developed in the light of their requirements. All the operational
units will have to be expanded substantially when the Bank begins to make loans and undertake financing.
Consideration is being given to the development of a retirement system and the provision of various provident funds for
employees, consistent with actions being taken by other international organizations. These, if adopted and put into effect,
will add a further undetermined amount to the cost of operations.
It would not be difficult to develop an administrative budget, based on numerous arbitrary assumptions, which would
present a forecast purporting to reflect the anticipated expense of operations of the Bank for a given period. However,
the many assumptions which would have to be made would result in figures that could not be accepted as having any foundation in fact. There is no indication as to the number or complexity of the loan applications which will have to be considered,
or as to the rapidity with which they will develop. There is
no experience on which to estimate the extent of the staff work
which will be required, either in Washington or in the field,
before loans can be approved. Work-load information is completely lacking, both as to lending and financing activities, and
there is no similar public or private financing institution with
which comparison can be made. Any assumptions which might
be made, at this stage, therefore, would be extremely speculative.
The minimum function of budgetary planning should be to
furnish to management an intelligent control over operations.
To be useful a budget must be based on anticipations that can
be reasonably justified. A budget prepared on any other basis
would be useless.
Under existing circumstances, it would not be possible to
prepare an estimate of operating costs that would be useful.
15
However, within a few months sufficient operating experience
will have accumulated to justify the development of an adequate budgetary control well in advance of the next fiscal year.
Conclusion
During the three months since its formal commencement of
operation, the Bank has attempted to prepare the ground for
those tasks of reconstruction and development which will be its
responsibility in the years ahead. If we build skillfully and well
an international organization to perform those tasks, the Bank
will be able to contribute, as the Member Governments of the
Bank intended it should, to the structure of a secure peace.
16
APPENDIX "A"
Governors and Alternates of the International Bank
for Reconstruction and Development
Member Government
Governor
Alternate
Belgium
Jean Vauthier
Maurice Frere
Bolivia
Rene Ballivian Calderon
Jaime Gutierrez
Guerra
Brazil
Edgard de Mello
Canada
Francisco Alves dos
Santos-Filho
James L. Ilsley
Chile
Arturo Maschke
Luis Davila
China
O. K. Yui
T. L. Soong
Costa Rica
Julio Pena Morua
Angel Coronas Guardia
Cuba
Joaquin E. Meyer
Czechoslovakia
Alois Krai
Joseph Hanc
Denmark
Carl Valdemar
Bramsnaes
Erling Sveinbjoernsson
Dominican Republic
Jesus Maria Troncoso
Jose Ramon Rodriguez
Ecuador
Esteban F. Carbo
Sixto E. DuranBallen
Egypt
Ahmed Zaki Bey
Saad
Ahmed Selim
El Salvador
Federico Vides S.
Manuel Melendez V.
Ethiopia
George A. Blowers
France
Robert Schuman
Pierre Mendes-France
Greece
Athanase Sbarounis
Nicholas B. Kaskarelis
Guatemala
Manuel Noriega Morales
Leonidas Acevedo
17
Graham F. Towers
Honduras
Julian R. Caceres
Jorge Fidel Duron
Iceland
Magnus Sigurdsson
Thor Thors
India
Sir Chintaman Deshmukh
N. Sundaresan
Iran
A. H. Ebtehaj
Mocharraf Naficy
Iraq
Ali Jawdat
A. M. Gailani
Luxembourg
Pierre Dupong
Hugues Le Gallais
Mexico
Antonio Espinosa de
los Monteros
Luciano Wiechers
Netherlands
P. Lieftinck
A. M. de Jong
Nicaragua
GuiUermo Sevilla Sacasa
Rafael A. Huezo
Norway
Cunnar Jahn
Ole Colbjoernson
Panama
Joaquin Jose Vallarino
Paraguay
Harmodio Gonzales
Ruben Benitez
Peru
Carlos Montero Bernales
Jose Barreda Moller
Philippine Republic
Joaquin M. Elizalde
Poland
Konstanty Dabrowski
Janusz Zoltowski
Union of South Africa
[an Hendrik Hofmeyr
(J. H. Holloway, acting)
M. H. de Kock
United Kingdom
Hugh Dalton
Sir James Grigg
United States
John W. Snyder
William L. Clayton
Uruguay
Yugoslavia
Hugo Garcia
Lavoslav Dolinsek
18
Ivan Randic
APPENDIX "B»
Executive Directors and Alternates of the
International Bank for Reconstruction and Development
Member Government
Executive Director
Alternate
United States
United Kingdom
China
France
India
Emilio G. Collado
Sir James Grigg
Yuen-Ting Shen
Pierre Mendes-France
N. Sundaresan
Netherlands
Union of South Africa
J. W. Beyen
(Netherlands)
Guy de Carmoy
Jaganadh Vishwanath
Joshi
D. Crena de Iongh
(Netherlands)
Hubert Ansiaux
(Belgium)
Thomas Basyn
(Belgium)
Victor Moller
(Chile)
Fernando Manes
(Chile)
Leon Baranski
(Poland)
Alois Krai
(Czechoslovakia)
Luis Machado
(Cuba)
Aramis Alvarez
(Cuba)
Canada
R. B. Bryce
J. F. Parkinson
Egypt
Greece
Iran
Iraq
Ethiopia
Kyriakos Varvaressos
(Greece)
Mocharraf Naficy
(Iran)
Belgium
Norway
Luxembourg
Iceland
Brazil
Chile
Philippines
Bolivia
Costa Rica
Guatemala
Paraguay
Panama
Czechoslovakia
Poland
Yugoslavia
Mexico
Cuba
Peru
Uruguay
Ecuador
Dominican Republic
El Salvador
Honduras
Nicaragua
19
John S. Hooker
Maurice I. Hutton
APPENDIX "C»
List of Depositories
Member Government
Depository Designated
Canada
Bank of Canada
Chile
Banco Central de Chile
China
Central Bank of China in
Shanghai
Costa Rica
Banco Nacional de Costa Rica
El Salvador
Central Reserve Bank of El Salvador
France
Banque de France
Greece
Bank of Greece
India
The Reserve Bank of India
Iran
Bank Melli Iran
Iraq
Rafidain Bank
Mexico
Bank of Mexico
Netherlands
General Treasury of the Department of Finance
Nicaragua
The Emission Department of the
National Bank of Nicaragua
Republic of the Philippines
Bureau of the Treasury
Poland
Narodowy Bank Polski
United Kingdom
Bank of England
United States
Federal Reserve Bank of New
York
20
APPENDIX "D"
Membership of Standing Committees
Committee on Financial Policy
Leon Baranski
J. W. Beyen, Chairman
R. B. Bryce
Emilio G. Collado
Sir James Grigg
Luis Machado
Committee on Interpretation
Hubert Ansiaux
Victor Moller
Yuen-Ting Shen
N. Sundaresan
Kyriakos Varvaressos, Chairman
Committee on Membership
Hubert Ansiaux
Leon Baranski
R. B. Bryce
Victor Moller
Yuen-Ting Shen, Chairman
Committee on Liaison
Sir James Grigg, Chairman
Pierre Mendes-France
Victor Moller
N. Sundaresan
Kyriakos Varvaressos
Committee on Information
J. W. Beyen
Emilio G. Collado
Sir James Grigg
Luis Machado
Pierre Mendes-France, Chairman
21
APPENDIX "E"
Report of the Executive Directors to the Board of Governors
on Interpretation of the Articles of Agreement
Pursuant to Resolution No. 6 of the Board of Governors, the
Executive Directors have interpreted the Articles of Agreement
with respect to the authority of the Bank to make or guarantee
loans for programs of economic reconstruction and the reconstruction of monetary systems, including long-term stabilization
loans, by approving the following report of their Committee on
Interpretation.
REPORT OF THE COMMITTEE ON INTERPRETATION
Section 12 of The Bretton Woods Agreements Act of the
United States of America provides as follows:
The Governor and Executive Director of the Bank appointed by the United States are hereby directed to obtain
promptly an official interpretation by the Bank as to its authority to make or guarantee loans for programs of economic
reconstruction and the reconstuction of monetary systems,
including long-term stabilization loans. If the Bank does
not interpret its powers to include the making or guaranteeing of such loans, the Governor of the Bank representing
the United States is hereby directed to propose promptly
and support an amendment to the Articles of Agreement
for the purpose of explicitly authorizing the Bank, after
consultation with the Fund, to make or guarantee such
loans. The President is hereby authorized and directed to
accept an amendment to that effect on behalf of the United
States.
Resolution 6, adopted by the Board of Governors of the Bank
on March 18, 1946, provides as follows:
That the Executive Directors of the International Bank
for Reconstruction and Development are invited, at the
request of the Governor for the United States of America,
to interpret the Articles of Agreement, pursuant to Article
IX (a), as to the authority of the Bank to make or guarantee
loans for programs of economic reconstruction and the
reconstruction of monetary systems, including long-term stabilization loans.
The Executive Directors of the Bank have referred the matter
to this Committee.
22
The Committee, having carefully examined the question in
the light of the provisions of the Articles of Agreement of the
Bank and of statements and memoranda which have been submitted to the Committee with regard thereto, presents the following report and recommendations to the Executive Directors:
1. The question presented by Section 12 of the Bretton
Woods Agreements Act relates to the general purposes for which
the Bank is authorized to make or guarantee loans and the scope
of the authority of the Bank to make or guarantee loans.
2. Article I of the Articles of Agreement of the Bank sets
forth the purposes of the Bank as follows:
(i) To assist in the reconstruction and development of territories of members by facilitating the investment of capital for
productive purposes, including the restoration of economies destroyed or disrupted by war, the reconversion of productive
facilities to peacetime needs and the encouragement of the development of productive facilities and resources in less developed countries.
(ii) To promote private foreign investment by means of
guarantees or participations in loans and other investments made
by private investors; and when private capital is not available on
reasonable terms, to supplement private investment by providing, on suitable conditions, finance for productive purposes
out of its own capital, funds raised by it and its other resources.
(iii) To promote the long-range balanced growth of international trade and the maintenance of equilibrium in balances of
payments by encouraging international investment for the development of the productive resources of members, thereby assisting in raising productivity, the standard of living and conditions of labor in their territories.
(iv) To arrange the loans made or guaranteed by it in relation to international loans through other channels so that the
more useful and urgent projects, large and small alike, will be
dealt with first.
(v) To conduct its operations with due regard to the effect of international investment on business conditions in the
territories of members and, in the immediate postwar years, to
assist in bringing about a smooth transition from a wartime to
a peacetime economy.
The Bank shall be guided in all its decisions by the purposes
set forth above.
23
3. The relevant provisions of Article III of the Articles of
Agreement of the Bank with regard to the making or guaranteeing of loans by the Bank are as follows:
Section 1. Use of Resources
(a) The resources and the facilities of the Bank shall be
used exclusively for the benefit of members with equitable consideration to projects for development and projects for reconstruction alike.
(b) For the purpose of facilitating the restoration and reconstruction of the economy of members whose metropolitan territories have suffered great devastation from enemy occupation or
hostilities, the Bank, in determining the conditions and terms of
loans made to such members, shall pay special regard to lightening thefinancialburden and expediting die completion of such
restoration and reconstruction.
Section 3. Limitations on guarantees and borrowings of the Bank
The total amount outstanding of guarantees, participations in
loans and direct loans made by the Bank shall not be increased
at any time, if by such increase the total would exceed one
hundred percent of the unimpaired subscribed capital, reserves
and surplus of the Bank.
Section 4. Conditions on which the Bank may guarantee or
make loans
The Bank may guarantee, participate in, or make loans to
any member or any political sub-division thereof and any business, industrial, and agricultural enterprise in the territories of
a member, subject to the following conditions:
(i) When the member in whose territories the project is located is not itself the borrower, the member or the central bank
or some comparable agency of the member which is acceptable
to the Bank, fully guarantees the repayment of the principal
and the payment of interest and other charges on the loan.
(ii) The Bank is satisfied that in the prevailing market conditions the borrower would be unable otherwise to obtain the
loan under conditions which in the opinion of the Bank are reasonable for the borrower.
(iii) A competent committee, as provided for in Article V,
Section 7, has submitted a written report recommending the
project after a careful study of the merits of the proposal.
(iv) In the opinion of the Bank the rate of interest and
other charges are reasonable and such rate, charges and the
24
schedule for repayment of principal are appropriate to the project.
(v) In making or guaranteeing a loan, the Bank shall pay
due regard to the prospects that the borrower, and, if the borrower is not a member, that the guarantor, will be in position
to meet its obligations under the loan; and the Bank shall act
prudently in the interests both of the particular member in
whose territories the project is located and of the members as
a whole.
(vi) In guaranteeing a loan made by other investors, the
Bank receives suitable compensation for its risk.
(vii) Loans made or guaranteed by the Bank shall, except
in special circumstances, be for the purpose of specific projects
of reconstruction or development.
Section 5. Use of loans guaranteed, participated in or
made by the Bank.
(a) The Bank shall impose no conditions that the proceeds
of a loan shall be spent in the territories of any particular member
or members.
(b) The Bank shall make arrangements to ensure that the
proceeds of any loan are used only for the purposes for which
the loan was granted, with due attention to considerations of
economy and efficiency and without regard to political or other
non-economic influences or considerations.
(c) In the case of loans made by the Bank, it shall open an
account in the name of the borrower and the amount of the loan
shall be credited to this account in the currency or currencies
in which the loan is made. The borrower shall be permitted by
the Bank to draw on this account only to meet expenses in connection with the project as they are actually incurred.
4. The expression "loans for programs of economic reconstruction and the reconstruction of monetary systems, including
long-term stabilization loans," is not defined either in the Bretton
Woods Agreements Act or in the above-quoted Resolution No. 6.
There is no reason to doubt, however, that loans of the kinds intended to be included in such expression fall within the general
purposes for which the Bank is authorized to make or guarantee
loans. With regard to any particular loan the only question
would be whether or not it complied with the conditions specified in the above-quoted provisions of Article III of the Articles
of Agreement of the Bank. Such conditions apply generally to
all loans made or guaranteed by the Bank.
25
Among those conditions is the condition set forth in paragraph (vii) of Section 4 of Article III that "Loans made or guaranteed by the Bank shall, except in special circumstances, be
for the purpose of specific projects of reconstruction or development." It is obvious that many of the loans referred to in Section 12 of the Bretton Woods Agreements Act would be "for
the purpose of specific projects of reconstruction or development,"
within the meaning of the above-quoted provision of Section
4 (vii) of Article III of the Articles of Agreement of the Bank.
But without at this time attempting to determine what would constitute a specific project of reconstruction or development within
the meaning of that Section, it is sufficient to point out that under
such Section the Bank is authorized "in special circumstances"
to make or guarantee loans other than for purposes of specific
projects of reconstruction or development, provided, of course,
that such loans come within the general purposes of the Bank
as set forth above. It follows, therefore, that, under Article III,
Section 4 (vii) of the Articles of Agreement, the Bank, while
primarily expected to make or guarantee loans for specific projects of reconstruction and development, does have authority to
make or guarantee loans for programs of economic reconstruction and the reconstruction of monetary systems, including longterm stabilization loans, even if such loans are not for specific
projects of reconstruction or development within the meaning of
such Section.
5. In determining whether or not to make or guarantee any
such loan, it is, of course, for the Bank to decide whether or not
such loan conforms to the conditions specified in the above-quoted
provisions of Article III of the Articles of Agreement of the
Bank, and, in die case of a loan which is not for the purpose of a
specific project of reconstruction or development, it is for the
Bank to decide whether special circumstances exist which justify it in making or guaranteeing such loan.
6. The Committee is, therefore, of opinion that, under the
Articles of Agreement, the Bank has authority to make or guarantee loans for programs of economic reconstruction and the
reconstruction of monetary systems, including long-term stabilization loans, and the Committee recommends that the Executive
Directors so decide.
7. If this report shall be approved by the Executive Direc-
26
tors, the Committee recommends that this report be transmitted
to the Board of Governors as the decision of the Executive Directors in accordance with the above-quoted Resolution No. 6 of the
Board of Governors.
Committee on Interpretation
[Signed]
Kyriakos Varvaressos (Chairman)
Hubert Ansiaux
Victor Moller
Yuen-Ting Shen
N. Sundaresan
27
APPENDIX "F"
Auditors' Report
PRICE, WATERHOUSE & Co.
AMERICAN SECURITY BUILDING
Washington 5, D. C , September 19, 1946
To The Executive Directors,
International Bank for Reconstruction
and Development,
Washington, D. C.
We have examined the accompanying financial statements
of the International Bank for Reconstruction and Development
as of June 30, 1946. Our examination was made in accordance
with generally accepted auditing standards applicable in the circumstances, and included such tests of the accounting records and
other supporting evidence and such other procedures as we considered necessary.
In our opinion, the accompanying financial statements present fairly the position of the Bank at June 30, 1946, and the results of its transactions from December 27, 1945 (the date when
the Articles of Agreement establishing the Bank entered into
force), to June 30, 1946, in conformity with generally accepted
accounting principles.
PRICE, WATERHOUSE & Co.
28
Exhibit A
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
Statement of Members9 Subscriptions to Capital Stock and
Balances Due on Calls—June 30, 1946
(Expressed in U. S. Dollars)
Member Country
Subscription
Shares
Amount
Amounts Amounts
called received
to
to
June 30, June 30,
1946
1946
Balances receivable
at June 30, 1946
Due
Due
Total Aug. 24
Nov. 25
1946
1946
Belgiu
BoliviaBrazil
CanadaChile
2,250 $225,000,000 $11,250,000 $22,500 $11,227,500 $4,477,500 $6,750,000
350,000
700
7,000,000
210,000
139,300
70
349,300
1,050 105,000,000 5,250,000 10,500 5,239,500 2,089,500 3,150,000
3,250 325,000,000 16,250,000 32,500 16,217,500 6,467,500 9,750,000
350 35,000,000 1,750,000 3,500 1,746,500
696,500 1,050,000
China.
Costa Rica
Cuba
Czechoslovakia
Denmark
6,000 600,000,000 30,000,000 60,000 29,940,000 11,940,000 18,000,000
100,000 200
2,000,000
60,000
20
39,800
99,800
350 35,000,000 1,750,000 3,500 1,746,500
696,500 1,050,000
1,250 125,000,000 6,250,000 12,500 6,237,500 2,487,500 3,750,000
680 68,000,000 3,400,000 6,800 3,393,200 1,353,200 2,040,000
Dominican
Republic
EcuadorEgyptEl SalvadorEthiopia
20
32
400
10
30
2,000,000
3,200,000
40,000,000
1,000,000
3,000,000
100,000 200
160,000 320
2,000,000 4,000
50,000 100
150,000 300
99,800
159,680
1,996,000
49,900
149,700
39,800
60,000
63,680
96,000
796,000 1,200,000
19,900
30,000
59,700
90,000
France
Greece.
GuatemalaHonduras
Iceland
4,500 450,000,000 22,500,000 45,000 22,455,000 8,955,000 13,500,000
250 25,000,000 1,250,000 2,500 1,247,500
497,500
750,000
20
2,000,000
100,000
200
99,800
39,800
60,000
10
1,000,000
50,000
100
49,900
19,900
30,000
10
1,000,000
50,000
100
49,900
19,900
30,000
IndiaIran—
Iraq
Luxembourg.
Mexico.
4,000 400,000,000 20,000,000 40,000 19,960,000 7,960,000 12,000,000
240 24,000,000 1,200,000 2,400 1,197,600
477,600
720,000
60
6,000,000
300,000
600
299,400
119,400
180,000
100 10,000,000
500,000 1,000 499,000
199,000
300,000
650 65,000,000 3,250,000 6,500 3,243,500 1,293,500 1,950,000
Netherland
NicaraguaNorway
2,750 275,000,000 13,750,000 27,500 13,722,500 5,472,500 8,250,000
8
800,000
40,000
80
39,920
15,920
24,000
500 50,000,000 2,500,000 5,000 2,495,000
995,000 1,500,000
Exhibit A (cont.)
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
Statement of Members9 Subscriptions to Capital Stock and
Balances due on Calls
June 30, 1946
(Expressed in U. S. Dollars)
Amount
Amounts
caUed
to
June 30
1946
Amounts
received
to
June 30
1946_
200,000
800,000
17,500,000
15,000,000
125,000,030
10,000
40,000
875,000
750,000
6,250,000
20
80
1,750
1,500
12,500
Subscription
Member
Country
Shares
Panama
ParaguayPeru—__
Philippines
Poland!
2
8
175
150
1,250
Balances Receivable
at June 30, 1946
Due
Due
Aug. 24
Nov. 25
Total
1946
1946
9,980
39,920
873,250
748,500
6,237,500
3,980
15,920
348,250
298,500
2,487,500
Union of
South
10,000 4,990,000 1,990,000
Africa
1,000
100,000,000
5,000,000
United
130,000 64,870,000 25,870,000
Kingdom
13,000 1,300,000,000
65,000,000
United States
of America. 31,750 $3,175,000,000 $158,750,000 $158,750,000
523,950
208,950
Uruguay
105
10,500,000
525,000
1,050
1,996,000
796,000
Yugoslavia™400
40,000,000
2,000,000
4,000
Totals
6,000
24,000
525,000
450,000
3,750,000
3,000,000
39,000,000
315,000
1,200,000
76,700 $7,670,000,000 $383,500,000 $159,199,500$224,300,500
Notes:
(A) The amounts of subscriptions called to June 30,1946 comprisedOne one-hundredth of one percent, payable by members
at the time of signing the Articles of Agreement767,000
Balance of the first two percent, payable on or before
August 24, 1946
152,633,000
Three percent, payable on or before November 25,1946 .
230,100,000
Total, as above
$383,500,000
(B) In August 1946, the Executive Directors authorized deferment until June 25,
1951 of amounts equal to one-half of one percent of subscriptions with
respect to calls payable by certain members, as follows: China $3,000,000;
Czechoslovakia $625,000; Denmark $340,000; Greece $125,000; Norway
$250,000; Poland $625,000; Yugoslavia $200,000; (total $5,165,000).
Additional deferments have been requested by Czechoslovakia and Yugoslavia with respect to the remainder of the balances due August 24, 1946
from those members, $1,862,500 and $596,000, respectively. Action on
these two requests was still pending at the date of this report.
30
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
BALANCE SHEET—JUNE 30,1946
Expressed in
U. S. dollars
ASSETS
Due from banks (United States currency)
$159,136,919
Receivable from members for calls on
subscriptions to capital stock:
Due August 24, 1946
— $89,450,500
Due November 25, 1946— 134,850,000
$224,300,500
483
Other assets
$383,437,902
LIABILITIES AND CAPITAL
Accounts payable and accrued expenses
Capital stock:
Authorized—100,000 shares
of $100,000 par value each
63,061
-$10,000,000,000
Subscribed but not issued—76,700
shares
$7,670,000,000
Less—Uncalled portion of subscriptions
Deduct:
Organization and other initial
expenses from December 27,
1945 to June 30, 1946
31
7,286,500,000
383,500,000
125,159
Exhibit C
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
Statement of Organization and Other Initial Expenses
From December 27, 1945, to June 30, 1946
Expressed in
U. S. dollars
Salaries and expense allowances of Executive Directors
and Alternates
$28,372
Other salaries—
Officers
Staff
821
.
7,478
Provision for reimbursement of income taxes on salaries
and expense allowances (estimated)
3,308
Travel—
Governors and Alternates
33,086
Other
-
Rental of office quartersStationery and suppliesPostage, telephone, telegraph and cableMiscellaneous expense
Office furniture and equipment.
82
7,364
Exhibit A
APPENDIX "G"
Financial Statements as of August
31,1946
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
Balance Sheet—August
31,1946
ASSETS
GOLD (Valued at $35 per fine troy ounce)
$9,395,758.64
Federal Reserve Bank of New York
4,676,499.98
Bank of England
_
DUE FROM BANKS
Member Currency—
United States:
Federal Reserve Bank
.$224,730,887.11
of New YorkAmerican Security
and Trust Co.,
$224,769,955.32
Washington, D. C._~_
39,068.21
Member Currency—
Other than United
2,960,000.00
States—Note A
CALLS ON SUBSCRIPTIONS TO CAPITAL STOCK—Note B
2% Call:
Payment
in process
_$ 1,989,616.30
Pending requests for
.. 2,458,500.00
deferment ~
Payments Deferred
$9,613,116.30
until June 25, 1951.. - 5,165,000.00
3% Call:
133,740,000.00
MISCELLANEOUS ASSETS
TOTAL ASSETS
LIABILITIES AND CAPITAL
LIABILITIES
Accounts payable and accrued
expenses
$73,948.35
Reserve for estimated liability
for income tax on salaries
15,728.42
Deferred credits-—advance
payments on stock subscription
1,850,000.00
$14,072,258.62
227,729,955.32
143,353,116.30
2,183.40
$385,157,513.64
$1,939,676.77
TOTAL LIABILITIES
CAPITAL
Capital Stock $100,000 par value
Authorized 100,000 shares
Unsubscribed 23,300 shares
Subscribed
$7,670,000,000.00
Less: Subscriptions not
$383,500,000.00
7,286,500,000.00
CaUed
Deduct:
282,163.13 $383,217,836.87
Deficit (Exhibit B)
TOTAL LIABILITIES AND CAPITAL
$385457,513.64
Note A—Converted to U. S. dollars at rates of exchange in effect
at date of deposit.
Note B—As of June 25, 1946, 2% and 3% capital stock subscription calls were made, payable on or before August 24, 1946 and
November 25, 1946, respectively.
33
Exhibit B
RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL BANK FOR
Deficit—August 31, 1946
DEFICIT JUNE 30,1946
Operating Expenses from
the beginning of operations
of the Bank (including
expenses of the inaugural
meeting of the Board of
Governors in Savannah,
Ga.)
$125,158.36
Add:
OPERATING EXPENSES FOR THE
PERIOD FROM JULY 1 TO AUGUST
31, 1946
Salaries:
Executive Director and
Alternates
.
.
$ 42,447.72
Officers
15*647,99
Others
25,229 97
Expense Allowance—
Executive Directors
and Alternates
Provision for Income
Taxes on Salaries
Transportation and Moving
to Seat of Bank
Travel:
Executive Directors and
Alternates
$
70.23
Others __..
1,103 29
Rental of Office Quarters
Furniture and Equipment
Stationery* Printing and
Supplies
Telephone and Telegraph
Cable Charges
Handling, Shipping and
Storage of Gold
' Books and Periodicals
Rental of Equipment
Repairs, Maintenance and
Alterations:
Rented Quarters
$ 3,257.36
Furniture and Equipment45.50
Miscellaneous
DEFICIT, AUGUST 31, 1946
$83,325.68
2,006.46
12,420.36
1,388.52
1,173.52
7,546.11
37,175.61
4,577.05
285.38
3,412.89
52.10
241.11
36.50
3,302.86
60.62
157,004.77
$282,163.13
34
Exhibit C
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
Statement of Receipts and Disbursements From July 191946
to August 31, 1946
I FUNDS DERIVED FROM %% CALL
ON STOCK SUBSCRIPTIONS
BALANCE JULY 1,1946
RECEIPTS
Payments on call
Deduct:
DISBURSEMENTS
Operating Expenses:
(Exhibit B)
$
157,004.77
Deduct:
Expenses Unpaid as of
75,043.44
Aug. 31,1946
$
81,961.33
Payment of Expenses
Unpaid at June 30, 1946—$ 48,427.76
Miscellaneous Advances
1,700.00
BALANCE AUGUST 31,1946
REPRESENTED BY:
GOLD:
Federal Reserve Bank of
New York
$ 9,395,758.64
Bank of England
4,676,499.98
MEMBER CURRENCYUNITED STATES
Federal Reserve Bank of
New York
Account B .
$129,480,887.11
American Security and
Trust Co., Wash., D. C._
39,068.21
Total
FUNDS DERIVED FROM 3% CALL
AND ADVANCE PAYMENT ON 5%
CALL ON STOCK SUBSCRIPTIONS
BALANCE JULY 1, 1946
RECEIPTS
Payments on 3% call
Advance payment on 5%
call
BALANCE AUGUST 31,1946
REPRESENTED BY:
Federal Reserve Bank of
New York Account A _ $ 95,250,000.00
Currency Depositories of
Members other than
United States
„ 2,960,000.00
$ 98,210,000.00
COMBINED FUNDS
BALANCE JULY 1, 1946
RECEIPTS
Payments on 2% call on
Stock Subscriptions
Payments on 3% call on
Stock Subscriptions
Advance payments on 5%
call on Stock Subscriptions
DISBURSEMENTS
(From Item I above)
BALANCE AUGUST 31, 1946
35
$63,886,919.33
$79,837,383.70
132,089.09
79,705,294.61
$143,592,213.94
$14,072,258.62
$129,519,955.32
$143,592,213.94
$95,250,000.00
$1,110,000.00
1,850,000.00
2,960,000.00
$98,210,000.00
$159,136,919.33
$79,837,383.70
1,110,000.00
1,850,000.00
82,797,383.70
$241,934,303.03
132,089.09
$241,802,213.94
Exhibit D
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
STATEMENT OF CAPITAL STOCK—AUGUST 31, 1946
SUBSCR:
AMOUNT
Belgium
Bolivia
Brazil
Canada
Chile
China
Costa Rica
Cuba
Czechoslovakia
Denmark
Dominican Republic
Ecuador
Egypt
El Salvador
Ethiopia
France
Greece
Guatemala —
Honduras.
Iceland —
India
Iran
Iraq
Luxembourg.
Mexico
Netherlands .
Nicaragua
Norway
Panama
Paraguay
Peru
Republic of the
Philippines—
Poland
Union of S. Afri
United Kingdom
United States _
Uruguay
Yugoslavia
CALLS ON SUBSCRIPTIONS 1/
1/100 ofl%
4225,000.000. $ 22,500.
7,000,000.
700.
-105,000,000.
10,500.
—325,000,000.
32,500.
35,000,000.
3,500.
.__600,000,000.
60,000.
200.
2,000,000.
35,000,000.
3,500.
12,500.
—125,000,000.
6,800.
68,000,000.
2,000,000.
200.
3,200,000.
320.
40,000,000.
4,000.
1,000,000.
100.
3,000,000.
300.
45,000.
—450,000,000.
2,500.
25,000,000.
2,000,000.
200.
1,000,000.
100.
1,000,000.
100.
40,000.
—400,000,000.
2,400.
24,000,000.
6,000,000.
600.
10,000,000.
1,000.
65,000,000.
6,500.
—275,000,000.
27,500.
800,000.
80.
50,000,000.
5,000.
200,000.
20.
800,000.
80.
-17,500,000.
1,750.
Balance of Z%
$ 4,477.500.
139,300.
2,089,500.
6,467,500.
696,500.
11,940,000.
39,800.
696,500
2,487,500.
1,353,200.
39,800.
63,680.
796,000.
19,900.
59,700.
8,955,000.
497,500.
39,800.
19,900.
19,900.
7,960,000.
477,600.
119,400.
199,000.
1,293,500.
5,472,500.
15,920.
995,000.
3,980.
15,920.
348,250.
3%
$ 6,750,000.
210,000.
3,150,000.
9,750,000.
1,050,000.
18,000,000.
60,000.
1,050,000.
3,750,000.
2,040,000.
60,000.
96,000.
1,200,000.
30,000.
90,000.
13,500,000.
750,000.
60,000.
30,000.
30,000.
12,000,000.
720,000.
180,000.
300,000.
1,950,000.
8,250,000.
24,000.
1,500,000.
6,000.
24,000.
525,000.
UNPAID BALANCES ON CALLS
-PAYMENTS
ON CALLS
Total
^Deferments 3 / Other 4/
3% Call 1/
TOTAL
$ 11,250,000. $ 4,500,000.
350,000.
140,000.
2,100,000.
5,250,000.
6,500,000.
16,250,000.
1,750,000.
1,750,000.
9,000,000.
30,000,000.
100,000.
100,000.
1,750,000.
700,000.
6,250,000.
12,500.
3,400,000.
1,020,000.
40,000.
100,000.
64,000.
160,000.
800,000.
2,000,000.
20,000.
50,000.
60,000.
150,000.
22,500,000.
9,000,000.
1,250,000.
375,000.
100,000.
40,000.
50,000.
20,000.
50,000.
20,000.
20,000,000.
8,000,000.
1,200,000.
480,000.
300,000.
120,000.
500,000.
200,000.
3,250,000.
1,300,000.
13,750,000.
5,500,000.
40,000.
16,000.
2,500,000.
750,000.
10,000.
4,000.
40,000.
16,000.
350,000.
875,000.
3,000,000,
625,000.
340,000.
125,000.
250,000.
1,862,500.
$ 6,750,000.
210,000.
3,150,000.
9,750,000.
$ 6,750,000.
210,000.
3,150,000.
9,750,006.
18,000,000.
21,000,000.
1,050,000.
3,750,000.
2,040,000.
60,000.
96,000.
1,200,000.
30,000.
90,000.
13,500,000.
750,000.
60,000.
30,000.
30,000.
12,000,000.
720,000.
180,000.
300,000.
1,950,000.
8,250,000.
24,000.
1,500,000.
6,000.
24,000.
525,000.
1,050,000.
6,237,500.
2,380,000.
60,000.
96,000.
1,200,000.
30,000.
90,000.
13,500,000.
875,000.
60,000.
30,000.
30,000.
12,000,000.
720,000.
180,000.
300,000.
1,950,000.
8,250,000.
24,000.
1,750,000.
6,000.
24,000.
525,000.
450,000.
1,500.
298,500.
-15,000,000.
750,000.
300,000.
450,000.
12,500.
3,750,000.
2,487,500.
.125,000,000.
6,250,000.
1,875,000.
3,750,000.
625,000.
10,000.
1,990,000.
3,000,000.
100,000,000.
5,000,000.
10,383.70
1,989,616.30 3,000,000.
25,870,000.
39,000,000.
1,300,000,000. 130,000.
65,000,000.
26,000,000.
39,000,000.
317,500.
95,250,000.
3,175,000,000.
63,182,500.
158,750,000. 158,750,000.
1,050.
208,950.
315,000.
10,500,000.
525,000.
210,000.
315,000.
796,000.
4,000.
1,200,000.
40,000,000.
2,000,000.
4,000.
200,000.
1,200,000.
596,000.
$7,670,000,000. $767,000. $152,633,000. $230,100,000. $383,500,000. $240,14H,883.70 $5,165,000.
$4,448,116.30 $133,740,000.
1/ 2% of the subscriptions to the capital stock of the Bank was payable in gold or United States dollars, 1/100 of 1%
of the subscription being payable at the time the agreement was signed and the balance being payable on or befor August 25, 1946. 3% of such subscriptions payable in the currencies of the respective members of the Bank
was called, as of June 25, 1946, for payment on or before November 25, 1946.
2/ Balances of the 2% on subscriptions were paid in gold by Belgium, Chile, Ethiopia, Luxembourg, Mexico, Netherlands, Nicaragua and Poland.
3/ Deferments of % of 1% of subscriptions granted pursuant to Art. II, Sec. 8(a)(i).
4/ Czechoslovakia and Yugoslavia have requested deferment of the balance of 1%% of their subscriptions pursuant
to Art. II, Sec. 8(a) (ii). These requests are still under consideration. The Union of South Africa is reported to have
shipped gold on August 24, 1946, in payment of balance.
450,000.
4,375,000.
4,989,616.30
39,000,000.
315,000.
1,996,000.
$143,353,116.30
5. Rules & Reg. of
Ex. Direotors
Item III Kciles and Regulates of the Executive Directory
of Bank
Agenda
~~T*"r (Decision is "by majority of the total votes cast*)
Rules and Regulations
(Section 16 of the By~Lavs)
The Executive Directors are authorized by the Beard of Governors
to adopt such rules and regulations, including financial regulations,
as may "be necessary or appropriate to conduct the business of the Bank*
Any rules and regulations so adopted, and any amendments thereof, shall
be subject to re-view by the Board of Governors at their next annual
meeting.
Organization and Management
Board of Governors
(Article ? of the Articles of
Agreement)
(Section 2 of the By-Laws)
(f) The Board of Governors, and the Executive Directors to the
extent authorized, may adopt such rules and regulations as nay be
necessary or* appropriate to conduct the business of the Bank.
National Advisory Council
Document No. 211
September 20f
Kft^ional Adyispry 8o]pincil
JG?# J, & ? Gollado, U. Sf BxecuH^@ S^egtop ? |ntea?njational Bank
Subject: Report Ho, 9 on Activities of the International Bank
On September 10 f 19*+6 the Executive Directors adopted
the attached Rules of Procedure for Meetings of the Executive
Directors. These will be subject to review by the Board
of Governors at their coming meeting, in accordance with
Section l6 of the By-Laws of the Bank.
Attachment.
CONFIDENTIAL
Hational Advisory Council
Document No. 211
INTERNATIONAL BANK FOR
RECONSTRUCTION AHD DEVELOPMENT
September 11,
RPLBS OF ^QQEffORIiffGfeMEETINGS OF THE EXECUTIVE DIRECTORS
The revised Rules of -Procedure, as presented in the
reports of the Committee on Procedure (R-25 and R-26)
a*id approved by the Executive Directors on September 10,
19^6, are forwarded herewith for information and
retention,
/ s / M» M» Mendels
M. K. Mendels
Secretary
Plstrjlbntjon:
Executive Directors and Alternates
Sugeno Meyer, President (k)
Harold 3). Smith, Vice President
Chester A* McLain^ General Counsel
Leonard B, Rist, Director of Research
M, M» Mendols, Secretary (2)
Henry ¥. Riley
CONFIDENTIAL
n a t i o n a l Advisory Council
Document No. 211
September 11,
(Adopted by the Executive
D i r e c t o r s on September 10, I9U6)
IOTERNATIONAL BANK FOR
KEC0NS3KUCTI0N MD DEVELOPMENT
Rules of Procedure for Meetings
of the Executive Directors
Pursuant to Section 16 of the By-Laws of the Bank the Executive
Directors hereby adopt the following rules of procedure for meetings of
the Executive Directors:
Section 1 - Definitions
For convenience of reference, the term flBoardff is used in these
rules to mean the Executive Directors of the Bank acting as a body with
the President of the Bank as Chairman, in accordance with the provisions
of the Articles of Agreement,
Section 2 - Meetings
(a) Regular meetings of the Board shall be held at such times
as the Board shall from time to time determine,- Notice of a regular meeting
of the Board need not bo given.
(b) A special meeting of the Board may be called at any time by
the President of tho Bank. The President shall call a special meeting of
the Board at any time at the request of any Executive Director. Notice of
each special meeting of the Board shall be given to each Executive Director
not loss than one day prior to the date fixed for such mooting.
(c) A quorum for any meeting of the Board shall be a majority of
t&e Executive Directors, exercising not less than one-half the total voting
power of the Board. Any meeting of tho 3oaxd at which a quorum shall not
bq present may be adjourned from time to time by a majority in voting power
of the Executive Directors present at such mooting and notice of any such
adjourned meeting need not bo given.
(d) Meetings shall 1)0 open to attendance only by Executive
Directors and their Alternates, tho President and such members of the staff
as he may designate, representatives of monbers appointed under Article V,
Section h (h), of tho Articles of Agreement and such other persons as the
Board nay invite.
CONFIDENTIAL
National Advisory Council
Document No. 211
- 2 -
(e) $he Board shall meet at the principal office of the Bank
unless it decides that a particular meeting shall "be held elsex*heref
(f) (The President of the Bank, or in his absence the Vicepresident of the Bank, shall act as Chairman of, and preside at, all
meetings of the Board*
(g) Except as otherwise in these rules expressly provided, any
reference in these rules to an Executive Director shall be deemed to include his Alternate when such Alternate acts for such Executive Director.
Section 3 - Agenda for Meetings
(a) An agenda for each meeting of the Board shall be prepared
by the President, or on his instructions, and a copy of such agenda shall
be given to each Executive Director at least 2H hours before such meeting.
Any matter upon which the Board has power to act shall be included on the
agenda for any meeting of the Board, if any Executive Director shall so
request.
(b) Any natter not included on the agenda for a meeting of the
Board may be presented to the Board by the Chairman or any Executive
Director and nay be acted upon by the Board at such meeting unless the
Chairman or an Executive Director objects thereto.
(c) If any Executive Director shall so request, action by the
Board on any matter, whether or not included on the agenda for the par*ticular meeting, shall be postponed not more than W e e for not less than
two days*
(d) Any item not included on the agenda for a meeting of the
Board, consideration of which has not been completed at that meeting, shall,
unless the Executive Directors decide other\irise, be automatically included
on the agenda for the next meeting.
Section k - Voting
If any Executive Director shall request a formal vote on cmy
matter before the Board, such vote shall be taken in accordance with the
provisions of Article V, Section k (g), of the Articles of Agreement* In
the absence of any such request, the Chairman nay ascertain and announce
to the meeting the sense of the Board with regard to such matter and the
Board shall be deemed to have acted in accordance with the announcement by
the Chairman without the taking of a formal vote* Any Executive Director
cLissenting from the decision of the Board may require that his views be
recorded in the minutes of the nee ting.
CONFIDENTIAL
CONFIDENTIAL
National Advisory Council
Document No. 211
- 3Section 5 ~ Committees
(a) The Board may from tine to tine establish such committees as
it shall deem advisable. Membership of such committees need not "be limited
to Executive Directors or their Alternates. The Chairman shall appoint the
members of such committees and shall designate one of such members to act
as chairman of the particular committee. In the absence of the Chairman so
designated the members of any committee nay designate one of their number
to act as chairman of the committee.
(b) Unless otherwise expressly provided "by the Board there shall
be no forn&l voting in committees and sub-committees of tii3 Board. The
chairman of the committee or sub-conmittse shall daioroiue the sense of the
meeting (including alternative points of view) which rhali be reported.
Section 6 - Minutes
(a) lIhe Secretary of the J3nrJr. ahall act as Secretary of the Board
and, under the direction of the President, the Secretary shall be Responsible
for the preparation of a suixiary record of proceedings of the Board.
(b) Verbatim records will be taken only if an Executive Director
requests that his remarks be taken down.
(c) Draft minutes will be circulated to all Executive Directors
as quickly as possible after meetings. Such minutes shall be presented to
the Board for approval.
Section 7 - Notices to Executive Directors and Alternates
(a) Any notice required by these rules to be given to any Executive Director shall be deemed to have been sufficiently given when it shall
have been delivered in writing or in person or by telephone at the office
of such Executive Director in the principal office of the Bank in Washington,
D. C.
(b) Any notice v/hich is required by these rules to be given to
any Executive Director (including notices with regard to meetings and the
agenda for meetings) may be waived by such Executive Director or- his
alternate by writing or telegram at any tine, whether before or after the
meeting to which such notice relates.
Section 8 - Publicity.
The proceedings of the Board are confidential and should not be
published except where the Board decides to authorize the Chairman to
arrange for suitable publiqj^in respect of particiilar decisions;
J
C0K7IDENTIAL
CONHEENTIAL
National Advisory Coundil
Document Ho. 211
Section 9 - Amendments
These rules may be amended by the Board at any meeting provided
at least five days1 notice of the proposed rjnendment has "been given to the
Executive Directors.
CONFIDENTIAL
a
Item IV Advisory Council
of Bank
(Decision is by majority of the total votes cast*)
Agenda
A Resolution on the Selection of the Advisory Council adopted
at the Savannah Conference, March 16, 19^6* (Resolution 5)
That the Executive Directors are requested to exaaine the problems relating to the selection of the Advisory Council by the Board
of Governors* and to make recommendations to the Board for its consideration at its annual meeting to be held in September
Organization and Management
Advisory Council
(Article V of the Articles of
Agreement)
(Section 6)
(a)
Ehere shall be an Advisory Council of not less than seven
persons selected by the Board of Governors including representatives of
banking, commercial, industrial, labor, and agricultural interests,
and with as wide a national representation as possible. In those fields
where, specialized international organizations exist, the members of
the Council representative of those fields shall be selected in
agreement with such organizations. The Council shall advise the Bank
on matters of general policy* The Council shall meet annually and on
such other occasions as the Bank may request•
Preliminary IJemorandum
Subject: Draft Recommendation by Executive
Directors re Advisory Council for
International Bank
1, The Problem
(a) The Articles of Agreement, Article V, Section 6, provide:
"a*, There shall be an Advisory Council of not less
than seven persons selected by the Board of Governors,
including representatives of banking^ commercial, industrial, labor and agriculturar~interests and with as wide
a national representation as possible • In those fields
where specialized international organizations exist, the
members of the Council representative of those fields
shall be selected in agreement "with siich organizations •
The Council shall advise the Bank on matters of general
policy• The Council shall meet annually and on such
other occasions as the Bank may request*
tf
b« Councillors shall serve for two years and
may be re§ppointed• They shall be paid their reasonable expenses incurred on behalf of the Bank."
(b) The Executive Directors were requested by the Board of
Governors at Savannah to make a recommendation to the Governors
for the September meeting on the selection of the Advisory
Council*
2#
Recommendation of the Executive Directors
The final document has not yet been received* The high lights
of the present draft, which is attache*, are as follows:
(a) The number of members of the Council is to total
nine#
(b) The representatives of banking± commercial,
industrial, labor and agricultural interests will be
selected from panels of three names each, submitted by
the specialized agency in the field (Pood and Agriculture
Organization, International Labor Organization, etc.)*.
The other four members -will be selected on the basis of
recommendation submitted by the Board of Executive
-2Directors* These four members are to be the# chairman,
scientist with specialized knovdedge in engineering, and
two members not representing any particular field- of
interest - one of whom may be an economist of repute*
3» Tentative Recommendation of U» S» Position
The recommendation of the Executive Directors appears to be
generally acceptable. No nominations for the Council have been
submitted so far. There is no reason why the Board of Governors
should not be able to go outside the nominations submitted by the
Executive Directors, particularly in the naming of the four members
y/ho are not representatives of special interests.
Possible American nominations are:
For the Chairman:
For the Scientist:
For the Economist:
For the other member:
Attachment
__
CONFIDENTIAL
National Advisory Council
Document No. 225
September 2k9 I9U6
MEMORANDUM Io; National Advisory Council
From: E # *G. Cillado - TJ. S# Executive Director,
International Bank
Report No. 13 on Activities of the International
Bank
U, S. Executive Director
Report So. 13.
Activities of the International Bank
On September 17 1 19^-6 the Executive Directors approved the
attaohed report of the Ad Hoc Committee on Advisory Council which
will be, in accordance with Resolution No. 5 of the {Savannah
meeting, submitted to the Board of Governors at the coming meeting.
Attachment*
00KFIDEHTIA1
National Advisory Council
Document Ho, 225
September 2l*f k
September 19,
B A M FOR
AHD DEVELOPMENT
ADVISORY
cororon
ihe report of the Ad, Hoc Committee on Advisory Council,
as approved "by the Executive Directors at their me$ti$g on
September 17 f for submission to the Board of Governors, is
attached for information•
/a/
Mf M # Mendels
Secretary
Pistri^utionJ
Executive Directors
President (if)
Vice President
General Counsel
director of Research
Secretary (2)
Henry Wf Itiley
Alternates
COHFIDBNTIAL
National Advisory Council
Document No f 225
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
ADVISORY COUNCIL
ftp, 5 adopted by the Board of governors at the sixth
at Savannah on March 16.
A JCB5SOIit?TIQH OJI THE SELEOTIOH 0! TKB
fh$t the Executive Directors are requited to examine the
problems relating to the selection of the Advisory Cptpacll ty the
Board of Governors, and to make recommendations to the ?o«$d for its
consideration at its annual meeting to "be held in September
*6<f
Executive Directors submit the following
tipns:
1#
Ihat the total number of members be nine, pf wlioin five should
y>e representatives of each of the following interests?
banking,
commercial, indugtri&l, labor and agricultural, The other .fow
members should be
(a) the Chairman who should be a personality $£
general eminence;
(b) a scientist with specialized knowledge in the
field of engineering; and
(c) two members not representing any particular
field of interest, one pf whom may be an
a composition would give the Council a proper balance e
it to ^dvise the Bank on matters of general policy.
ffh$t the Board of &pvernprs should select the members in the
way;
(a) One member to represent banking interests from & pariQl V/
of names compiled by the Executive ^Directory
Dit
iji opiir yl
sultaHon vrith the International Mojaetary fund*.
II
CONFIDENTIAL
National Advisory Council
Document No. 225
- 2 -
("b) One member to represent commercial interests from a panel
of names obtained from the International Trade Organization
(if the I.E.C. should not yet "be constituted, from a panel
compiled by the Executive Directors after consultation with
the International Chamber of Commerce.)
(c) One member to represent industrial interests from a panel
of names coarpiled by the Executive Directors.
(d) One member to represent labor interests from a panel of
names obtained from the International Labor Office and the
World federation of Irade Unions*
(e) One member to represent agricultural interests from a
panel of. names obtained from the Food & Agriculture Organisation •
articles prescribe that in those fields where
specialized international organizations exist, the
mcpbers of the Council representative of those fields
shall be selected in agreement with such organizations.
It is therefore recommended that if none of the names
initially obtained from any such international orga,ni~
aation commends itself to the Executive Directorsr the
latter shall ask such organization to submit further names,
(f) 3Jhe Chairman, the representative of scientific interests
and the two general members to be selected on the basis of
recommendation submitted by the Executive Directors.
3. In prder to satisfy the requirement of Article Y, Section 6 (&) of
the Articles of Agreement, t]aat the .Cpunctl have >fas w$4e a national
rgp^essn^ation as possible11, that the international organizations be
a,sked to submit psjiels of names of,persons from different epuntries.
5he same pjxpuld a.ppXy %o any panels of nm$$
submitted by the
Direqtors %$ %t±Q Bpard of Gov^nprs.the rules and yegu3.atj.ons of tjfre Advisory OpunsU prescribe
that ali meeting^ of ^ e GpttnciJ be attended by the P^esideitit pf the
Bank or his
CONFIDMTIAl
5#
National Advisory Council
Document Ho, 225
Ihat the assistance of the President, the Vice-Prepident and technical
staff of the International Bank for Reconstruction and Development be pt&e
available to the Advisory Council when required*
6*
In order to establish a working liaison "between the Council and the
Bank, that the Secretary of the Bank provide the seqretarist for the
Council*
7t
Ihat the Gptincil hold; its annual meeting at least three mpnths before
the annual meeting of the Bo$rd of &Qverno?s? i» o?der to eniable the Bank
to. incoypp.yate in J,ts annual report tp the Bpardl of Governors the advipe
tendeye^ >y the Council, together with a report of such gtctipn as has
been tai$n the^^on by the Executive J)ij:ector^#
1;
Item V
of Bank
Agenda
Applications for membership Italy, Lebanon, Syria and Turkey
(Decision is \>y majority of the total votes cast.)
Second Report on the Committee on Membership (Savannah Conference
Mr-.rch 13, 19U6)
The resolution of the United States Delegation as amended by the
Delegation of Czechoslovakia reads:
11
She Boards of Governors of the International Ba)ak for Reconstruction and Development resolves:
"That membership in the International Bank for Reconstruction
and Development is approved under Article II, Section l(b)
of the Articles of Agreement for all countries listed in
Schedule A which are members of the International Monetary
Fund and whose governments accept membership in accordance
with the provisions of Article XI until December 31, 19^6
(original wording «.vduring the. period of six months following the d^te of this resolution) **#
The Report was approved and adopted by the Boards of Governors
at the fourth session, March lH, 19^6 •
Acceptance*of Membership by Schedule A countries, adopted at the
seventh session, March 18, 19^6, (Resolution 9 of the Savannah
Conference)
That membership in the International Bank for Reconstruction and
Development is approved under Article II t Section l(b) of the Articles
of Agreement for all countries listed in Schedule A which are members
of the International Monetary Fund and whose governments accept member-*,
ship in accordance with the provisions of Article XI until December 31r
19^6.
Application for Membership
(Section 20 of theBy-Laws)
Subject to any special provisions that may be made for countries
listed in Schedule A of tho Articles of Agreement, any member of the
International Monetary Fund may apply for membership in the Bank by
filing with the Bank an application setting forth all relevant facts*
When submitting an application to the Board of Governors, the
Executive Directors after consultation with the applicant country,
shall recommend to tho Board the number of shares cf oapital stock
to be subscribed and such conditions as, in the opinion of the r
Executive Directors, the Board of Governors may Xtfisii to prescribe.
Other Actions by Board tf Governors
Application for Membership on 3ehalf of Lebanon, Italy, Syria
and Turkeyf
- 2 The Boatd of Governors received applications for membership in
the Sank from the Governments of Lebanon, Italy, and Syria at the
third session, March 13* 19^6. A similar application from the
Government of Turkey was received at the fourth session, March lU,
19^6* The applications were supported by the Governor representing
the United States and wetfe referred to the Executive Directors for
consideration and recommendations.
A communication from the Governor for Greoce, supported by the
Governor for Yugoslavia* questioned whether Italy, as a former enemy
country which had not yet signed a peace treaty, should be entitled
to apply for membership* The Board of Governors determined at the
sixth sessionf March l6, 19^6f that the communication should be held in
the records for consideration when Italy's application is again before
the Board* but that in the meantime the Executive Directors would not
be precluded from considering technical problems incident to the
application.
Membership in and Capital of the Bank
Membership
(Article II of the
Articles of Agreement)
(Section 1)
(a) The original members of the Bank shall be those members of
the International Monetary Fund which accept membership in the Bank
the date specified in Article XI * Section 2(e).
(b) Membership shall be open to other members of the Fund, at
suqb times and in accordance with such terms as nay be prescribed by
tlxe Bank*
Memorandum
Subject: Summary of tte Attached Draft Report
of the Executive Directors of the
Bank on'the Applications of Syria,
Lebanon, Italy, and Turkey,
1« The report recommends the admission of Italy
(subscription: £L80 million), Syria (subscription: &6.5
million), and Lebanon (subscription: &4*5 million)*
Action on Turkey (subscription: ^3 million has been #
deferred pending clarification of Turkey's position in
relation to Resolution VI• The report states that in
order to protect the Bank from Axis-tainted gold from
the new applicants the Bank reserves the right to reject
any gold tendered which may not be freely sold to members
requiring certifications as to the origin of such gold.
2 # All reference to the peace treaty issues in
relation to Italy has been excluded from the report.
The State Department will furnish to the U* S.
Governor a statement regarding the competence of the
Italian Government to accept membership in an international
OOHFIDMTJAL
National Advisory Council
Document No. 231
September 26, 1 9 ^
KEMORAHDTJM To; National Advisory Council
From: E # G. ColXado - U. S. Executive Director,
International Bank
Subject: Report No. 16 on Activities of the International Bank
Applications for Membership
There is attached report to the Board of Governors adopted in principle
by the Executive Directors of the International Bank on September 24 on the
subject of the applibations of Syria, Lebanon, Turkey and Italy for membership. Report is subject to minor drafting correlation with the report still
pending in the International Monetary Fund*
It will be noted that final action on the matter of the Turkish application is still awaiting negotiations between the Ambassadors of the United
States, United Kingdom, Prance and the Turkish Foreign Office with reference
to Bret ton Woods Resolution No. 6* A supplemental report will have to be
adopted if and when satisfactory action is reported from Ankara.
• ^ ^ h e Executive Director© of the Bank, taking cognizance of discussions
an the Fund of the applications of Paraguay and Prance, for increased quotas
aaa at JfrfljeqiiftB»f #vr. _».!,» ^ ^ . ^ 0 Pirpniinr of the BA.T»1T fnr T P » O J L resolved to recommend to the Board of Governors of thelank that the subi n r f h ! X n n S / ° r p a X a g U a y « * * « « * ** increased in proportion to increases
an the quotas approved by the Board of Governors of the Fund
(S0B5:
ASSachnent.
CONFIDENTIAL
National Advisory Council
Document No. 231
INTEfiNATIONAL BANX FOR
RECONSTRUCTION AND DEVELOPMENT
September 23,^19^6
DRAFT
Report of the Executive Directors
to the Board of Governors
Re: Applications of Syria, Lebanon, Italy and
Turkey for Membership in the Bank
At the Inaugural Meeting of the Board of Governors, the applications
of Syria, Lebanon, Italy,and Turkey for membership in the Bank were referred
to the Executive Directors for consideration and recommendations. This report
is presented to the Board of Governors pursuant to Section 20 of the By-laws,
which provides that, when sttoitting an application to the Board of Governors,
the Executive Directors, after consultation with the applicant country, shall
recommend to the Board of Governors the number of shares of capital stock to
be subscribed and such other conditions as, in the opinion of the Executive
Directors, the Board of Governors may wish to prescribe.
Section 2(b) of Aftticle XI of the Articles of Agreement of the Bank
provides that membership ift the Bank shall be open to ©ambersi 6f the Fund
Mother than original members of the Bank) ffat such times and in accordance
with such terms as may be prescribed by the Bank**
Accordingly, each of the above-named applicants must be a member of the
Fund at the time when it is admitted to membership in the Bank. In addition,
the Bank may prescribe other terms on which such applicants shall be admitted
to membership in the Bank*
In formulating the recommendations hero presented, the Executive
Directors of the Bank have consulted with the Executive Directors of the
Fond through their respective Committees on Membership.
In accordance with the determination of the Board of Governors at its
session on March 16, 19^6, the recommendations of the Executive Directors
of the Bank deal only with the specific technical questions which are discussed in this report*.
Capital Subscriptions
The data compiled with regard to each of the four applicants have been
considered by the Executive Directors of the Fund and the Executive Directors
of the Bank and they have agreed to recommend the same amounts as the quotas
CONFIDENTIAL
CONFIDENTIAL
National Advisory Council
Document No. 231
- 2 -
of the respective applicants in the Fund and their subscriptions to the
capital of the Bank. Such amounts are as follows:
(a)
(b)
(c)
(d)
Syria
Lebanon
Italy
Turkey
$
6,500,000
4,500,000
180,000,000
^3,000,000
In considering the subscriptions for Syria, Lebanon and Turkey, the
Committee on Membership of the Bank made available to the Executive Directors
certain "basic economic data regarding such countries in the form of a report
entitled frSecond Interim Keport of Committee on Membership." In considering
the subscription for Italy, the Bank had the benefit of a report prepared by
the Research Department of the I*und entitled "Analysis of Quota for Italy.n
Copies of such documents are attached as Appendix nAfl and Appendix ^B11
respectively.
Payments on Subscriptions
The Executive Directors believe that it is most desirable that countries
being admitted to membership should be required to assume immediately the
same relative financial obligations toward, the Bank as already have been
assumed by the original members.
Accordingly, they recommend that as a condition to membership each of
the countries should be required to agree:
(1) That on the date the country, becomes a member it shall pay to the
Bank
(a) Gold or United States dollars equal to 2$ of its subscription
to the capital of the Bank, without any right to postpone payment of any part thereof under Section S (a) of Article II of
the Articles of Agreement; and
(b) An amount in the currency of such country which, at the appropriate prevailing exchange rate, shall be the same percentage
of its subscription to the capital of the Bank as 'the percentage
of the subscriptions of original members which has been called
and which, pursuant to call, is required to be paid on or before
the date on which such country becomes a member.
(2) That the country will comply fully with all other calls for payments
on subscriptions which shall have been made or announced by the
Bank as of the date it becomes a mesiber of the Bank and which are
payable after that date.
CONFIDENT IA£
National Advisory Council
Document No. 231
- 3In order to protect the Bank from having to accept Axis-tainted goldf
under (l) (a) above, which could not "be sold under the various gold declarations issued by members of the United Nations during the war,, it should
be ,made clear that the Bank reserves the right to reject any gold tendered
which, in its opinion, may not be freely sold to members requiring certifications as to the origin of such gold.
Effective Date of Membership
The Executive Directors refcommend that, if the Board of/Governors decide
to admit the above-named applicants to membership, each applicant, becomes a
member of the Bank, subject to the terms and conditions prescribed by the
Board of Governors, upon compliance with both of the following requirements:
(a) Such applicant shall deposit with the Government of the United
States of America an instrument stating that it has accepted in
accordance with its law the Articles of Agreement and all the
terms and conditions prescribed by the Board of Governors, and
that it has taken all steps necessary to enable it to carry out
all of its obligations under the Articles of Agreement and under
such t6rms and conditions; and
(b) Such applicant shall sign the original copy of the Articles of
Agreement held in the Archives of the Government of the United
States of .America*
The Executive Directors also recommend that, in order that each applicant may have.a reasonable opportunity to take such action as may be
necessary in order to enable it to comply with such requirements, the
Board of Governors fis a period of six months after the date of the Board1 s
action within which such applicant shall comply with such requirements and
after which its right to do so shall expire.
Turkey
While the Executive Directors believe that all of the foregoing terms
and, conditions are applicable in the case of Turkey, action with respect to
the application from Turkey has been deferred pending clarification of
Turkey1 s position in the light of Bretton Woods Resolution No. VI on Enemy
Assets and looted Property.
Discussions with Representatives
of the Applicant Countries
Representatives of Syria, Lebanon and Italy have been co&?ulted informally
regarding their respective subscriptions and they have indicated that the
C0N3PIDSHTIAL
National Advisory Council
Document No* 231
suggested above are satisfactory to them. They also have been informed
regarding the other terms and conditions suggested in this report and they
have raised no objections thereto•
Procedural Recommendations
The Executive Directors have considered the procedural questions
incident to the Board of Governors determining the terms and conditions
upon which the fpur countries should be admitted to membership %n the
Bank,
It is suggested that a practicable procedure would be for the Board,
of Governors to adopt a resolution embodying all of the terms and conditions which the Board determines to specify with respect to the admission
of such countries* In this way each country could be informed of the
precise terms applicable to it and could authorize acceptance of member-^
ship in the Bank in accordance with such terms.
5he Executive Directors have prepared a draft form of resolution
embodying the terms and conditions they have recommended in this report
as applied to Syria, A copy of such resolution is attached as Appendix
ff tr
C , A variation of this form could, of course, be used with respect
to each of the other countries.
C0HFIDEUTIA1
National Advisory Council
Document Ho. 231
~ 5Attachment (A)
(Appendix M 0 w to Report of
the Executive Directors to
the Board of Governors)•
September 2}f
of tjae Board of Governors
to the Terms and Conditions
on wliiph Syria shall "be Admitted
to Membership in tho Bank
Ihe Government of tho Republic of Syria has applied
fox admission to membership in the International Bank for Reconstruction
and Development in accordance with Section 2("b) of Article II of the
Articles of Agreement of the Bank; and
WHEREAS, pursuant to Section 20 of the By-Laws of the Bank,,
the Executive Directors, after consultation with representatives of the
Government of the Republic of Syria, have made recommendations to the
Board of Governors with regard to the niamber of shares of capital stock
of the Bank to "be subscribed "by Syria and other conditions which, in the
opinion of the Executive Directors, the Board of Governors may wish to
prescribe;
NOW, THEREFORE, the Board of Governors having considered the
recommendations of the Executive Directors, hereby rasolves that the terms
and conditions upon which the Government of the Republic of Syria shall Tae
admitted to membership in the Bank shall "be as follows*
1#
Definitions: As used in this resolution*
(a) The term "Syria" means the Government of the Republic
of Syria.
("b) The term "Bank" means International Bank for Reconstruction and Developmentf
(c) The term "Articles" means the Articles of Agreement of
the Bank,
COMTOMTIAL
National Advisory Council
Document Uo* 231
-6(d) The terms ^dollars" or#lf$B mean United States dollars of
the weight and fineness in effect on July l f
(e) The term "subscription" means the capital stock of the
Bank subscribed to toy a menter.
(f) TJie teas? ^member* means member of the Bank*
2, Membership in the Fund: Before accepting membership in
Bank, Syria shall accept membership in and become a member
of the International Monetary Fund;
3*
Subscription: By accepting membership in the Bank, y
shall subscribe to 65 shares of the capital stock of the
Bank at the par value of $100,000 per share*
k. Payments on Subscription:
(a) On the date on which Syria becomes a member, Syria
shall pay to the Bank:
(i) Gold or dollars equal to 2$ of its subscription,
without any right to postpone paynent of any part
thereof under Section 8(a) of Article II of the
Articles; and
(li) An amount in the currency of Syria which, at tjae
appropriate prevailing exchange rate, shall be the
same percentage of its subscription as the percent*age of ihe subscriptions of original members which
has been called and which, pursuant to call, is
required to be paid on or before the date on which,
Syria becomes a member.
(b) Syr^a shall agree also to comply fully with all other
calls for payments on subscriptions which shall have
been made or announced by the Bank as of the date it
becomes a member of the Bank and which are payable
after that date.
CQ) Syria shall further agree that if it tenders any pgfft
of the paynent called for in (a) (i) above in gold, the
Bank shall have the right to Reject any such gold which,
in its opinion, nay not be sold freely and unconditionally
by the Bank to members requiring certifications or other
CONJlDMTIAi
National Advisory Council
Document No. 231
- 7 evidence as to the origin of gold purchased "by them,
5f Effective Date of Memberships Syria shall "become a member of
the Bank, subject to the terms and conditions set forth in
this resolution, upon compliance with "both of the following
requirements:
(a) Syria shall deposit with the Government of the United
States of America an instrument stating that it has
accepted in accordance with its law the Articles and all
the terms and conditions prescribed in this resolution,
and that it has taken all steps necessary to enable it
to carry out all its obligations under the Articles and
this resolution^ and
(b) Syria shall sign the original copy of thp Articles held
in the Archives of the Government of the United States
of America,
6t
limitation on Period for Acceptance of Membership;
Syria may accept membership in the Bank pursuant to this
resolution until April
*
Subject*
Established II»S« Pos^tipr} QX\ AA?1^^?f?^ P^- of Syria, Lebanon, Turkey
and Italv to the Fund and the Bank
At its meeting of July 2, 1946 the National Advisory Council took the
following action:
Ths National Advisory Council advises the United States
Executive Directors that the United States has no objection to the decaying of final action on the applications
of Syria, Lebanon, Turkey and Italy until the September
meetings of the Boards of Governors.
The Uational Advisory Council advises the United States
Executive Directors that the United States has no special
terms and conditions which it desires to have attached tp
the membership of Turkey, Syria, Lebanon and Italy*
At the Savannah Conference Mr. Clayton supported the application of Syria,
Lebanon and Italy on Ma*ch 13, 1946 and the application of Turkey on March 14,
1946.
1<
Turkey
As a condition of membership for Turkey it has been suggested that Turkey
should take all necessary steps to adhere to Bretton Woods Resolution VI and
the Gold Declaration of February 22, 1944. According to cable #1030, dated
September 24, from the American Embassy in Ankara, the Turks agree,with reservations, to adhere to Eesolution VI and the Gold Declaration. At the Council
meeting of September 27, the State Department assured the U.S» Executive
Directors on the Fund and Bank that Turkey's statement of willingness to adhere
to Resolution VI and the Gold Declaration was satisfactory and, therefore*
Turkey's admission should be favored.
In the draft report of the Executive Directors of
of Governors, dated September 23, 1946, $43 million is
subscription to the Bank. The same amount is likewise
the Executive Directors of the Fund for Turkey's quota
2*
the Bank to the Boards
recommended as Turkey1s
to be recommended by
in the Fund.
,It^|y
In a letter dated September 24 to the Secretary of the HAG tlxe U.S. Executive Director stated;
W i t h respect* to the application of Italy, I should like tp
point out that it has been possible to exclude all reference
to the peace treaty issue raised at Savannah by the Governors
for Greece and Yugoslavia. Nevertheless, I believe it essential
that the U.S. Governor be provided by the Department of State
with a well documented statement regarding the competence of the
Italian Government to accept membership in an international body.11
The State Department has informed the Council that it is preparing the statement suggested by Mr, Colladof
~ 2 In the draft report of the Executive Directors of the Bank to the Boards
of Governors, dated September 33, 1946, $180 million is recommended as Italy's
subscription to the Bank. The same amount is likewise to be recommended by
the Executive Directors of the Fund for Italy's quota in the Fund*
3.
Syria
In the draft report of the Executive Directors of the Bank to the Boards
of Governors, dated September 23f 1946, §6.5 million is recommended as Syria's
subscription to the Bank. The same amount is likewise to be recommended by
the Executive Directors of the Fund for Syria's quota in the Fund*
4*
Leb^noft
In the draft report of the Executive Directors of the Bank to the Boards
of Governors, dated September 23, 1946, $4.5 million is recommended as Lebanon'c
subscription to the Bank. ?he same amount is likewise to be recommended by the
Executive Directors of the Fund for Lebanon's quota in the Fund,
0)
o
3
»
Item VI ^iaison with BcottomiO mid Sfloial Council and Othor
of Bank Organizations
Agenda
(Deci^ipn is by majority of tfte tpt$l votes cast.)
At the fifth session, H&rch 15, 19^6, a letter fron the President
Of the Economic and SoQiai Council of United Nations requesting the
QStablishment of liaison With the Bank was referred to the Executive
Directors with authority to discuss arrangements for collaboration with
the Council and to prepare recommendations for submission to this Board
pf Governors•
Organization and Management
(Article V of the articles pf
Agreement)
Relationship to ctbjay international organizations
(Section 8 of
the By-Laws)
(a) The Bank, within the terms of this Agreement, shall
cooperate with any general international organization and with public
international organizations having specialized responsibilities in
related fields. Any arrangements for such cooperation which would
involve a modification of any provision of this Agreement may be
effected only after amendment to this Agreement under Article VIII.
(b) In making decisions on applications for loans or guarantees
relating to matters directly within the competence of any international
organization of thattypes spe&ified in the preceding paragraph and
participated in primarily by members of the Bank, the Bank shall give
consideration to the views and recommendations of such organization*
Memorandum
Subject: Liaison with the Economic and Social
Council and Other International
Organizations
1. The Problem
Under Article V, Section 3, of the Articles of Agreement:
"(a) The Bank, within the terms of this Agreement, shall cooperate with any general international
organization and vdih public international organizations having specialized responsibilities iri related
fields. Any arrangements for such cooperation which
would involve a modification of any provision of this
Agreement may be effected only after amendment to
this Agreement under Article VIII•
11
(b) In making decisions on applications for
loans or guarantees relating to matters directly
within the competence of any international organization of the types specified in the preceding
paragraph and participated in primarily by members
of the Bank, the Bank shall give consideration to
the views and recommendations of such organization•"
The Bank was represented at the Food and Agriculture Conference
held in Copenhagen in September 1946 and at conferences of the
Economic and Social Council*
2# Recommendation of Executive Directors
No paper has been furnished as yet, but it is understood that
the drawing up of a formal agreement with the United Nations has
been postponed for the time being*
3» Tentative Recommendation of U> S> Position
The National Advisory Council has agreed that the drawing up
of a foraial agreement vdth the United Nations should be postponed,
No action at the Board of Governors appears, therefore, to be
necessary.
o
Item ffi Site
of Bank
Agenda
of Heyt
Meeting
Is
of the tptal votes
1
Preliminary Memorandum
Subject;
Proposed Amendments to the By-Laws
of the International Bank*
Problem
(a) The By-Laws of the Bank, adopted at Savannah, included
no provision for their amendment, presumably on the
assumption that this could be done at any meeting of
the Board of Governors•
(b) Some of the By-Laws adopted at Savannah require clarification in language without change in substance.
Recommendation of Executive Directors
(a) The Executive Directors propose to add Section 23 to
the By-Laws as follows:
Amendment of By-Laws
These By-Laws may be amended by the Board
of Governors*at any meeting thereof or by
vote without a meeting as provided in
Section 13•
(b) The other.proposed amendments merely clarify the
language of the 3y~Laws adopted at Savannah without
changing their substance.
Tentative Recommendation of U». S» Position
The proposed amendments appear to be acceptable and should
be approved•
Subject: Subscriptions of Paraguay
and France to the International 3ank
Mr # Collado reports that the Bank will
recommend to the Board of Governors that the
subscriptions of Paraguay and France be increased in proportion to increases in the
quotas approved by the Fund*
CONFIDENTIAL
National Advisory Council
Document No* 214
September 21 $ 1946
i
To;
National Advisory Council
Promt
B. G. Collado, U# S. Executive Director, International Bank
Subject: Report No* 12 on Activities of the International Bank
On September 19, 1946 the Executive Directors
approved the attached Proposed Amendments to the
By-Laws of the Bank for consideration by the Board
of Governors at their coming meeting.
Attachment
CONFIDENTIAL
CONFIDENTIAL
National Advisory Counoil
Document No. 214
September 17, 1946
REVISED DRAFT OF PROPOSED AMEMDUBMTS TO I P BY-LAWS OF THE BANK
»-
c
\
RESOLVED that the Executive Directors hereby recoijimend to
the Board of Governors that the By-Laws of the B$nk be amended as here*
inafter set forth$
A. That Sections 3, 4, 5 and 6 of the By-laws of the Bank be
amended to read as follows;
Section 3« Meetings of the Board of Governors^
(a) The annual meeting of the Board ,of Governors shall be
held at such time and place as the Board of Governors shall determine I
provided^ however, that, if the Executive Directors shall, because of
special circumstances, deem it necessary to dp so, the Executive Directors
may change the time and place of such annual meeting«
(b) Special meetings of the Board of Governors may be palled
at any time by the Board of Governors or the Executive Directors and shall
be cabled upon the request of five members of the Bank er of members of
the Bank having in the aggregate one^fourth of the total voting power.
Whenever any member of the Bank shall request the Executive Directors to
call a special meeting of the Board of Governors, the President shall
notify all members of the Bank of such request and pf the reasons which
shall have been given therefor*
COJJFIPSNTIAL
CONFIDENTIAL
National Advisory Council
Document No. 214
- 2 -
(c) A quorum for any meeting of the Board of Governors shall
be a majority of the Governors, exercising not less than two^thirds of
the voting power. Any meeting of the Board of Governors at which a
quorum shall not be present may be adjourned from time to time by a
majority of the Governors present and notice of the adjourned meeting
need not be given.
Section 4 + Notice of Meetings of the Board of Governors,
The President shall cause notice of the time and place of
each meeting of the Board of Governors to be given to each member *f
the Bank by telegram or cable which shall be dispatched not less than
42 days prior to the date set for such meeting, except that in urgent
oases such notice shall be sufficient if dispatched by telegram pr cablG
not less than 10 days prior to the date set for such meeting*
Section 5. Agenda of Meetings of the Board of Governors,
(a) Under the direction of the Executive Directors, the
President shall prepare a brief agenda for each meeting of the Board
of Governors and shall cause such agenda to be transmitted to eaph
member of the Bank with the notice of such meeting.
(b) Additional subjects may be placed on the agenda for
any meetixig of the Board of Governors by any
Governor provided that
he shall give notice thereof to the President not legs than pevejx days
prior tp the elate, set for such meeting. In special circumstances the
President by direction of the Executive Directors may #t w y time pla<?e
CONFIDENTIAL
CONFIDENTIAL
National Advisory Council
Document No* 214
- 3 -
additional subjects on the agenda for any meeting of the Board of Govern©rs#
The president shall cause notice of the addition of any subjects
to thQ agenda, for any meeting of the Board of Governors to be given
a$ promptly as possible to each member of the Bank*
(c) The Board of Governors may at any time authorize any
subject to bo |>l$q$d on t}ie agenda for any meeting of such Board even
though the notice required by this Section shall not have been giyen#
(d) Except a.s otherwise specifically directed by the Board
of Governors, the President, under the general direction of the
E*9outtve Directory sh^l have charge of all arrangements for the
holding of xaeetingjs of the Board of Governorsf
Section 8» Attendance Q f Executive ptreptorg and Qbseryers at Meetings
of the Board pf Governors.
(a) The Exeoutiye Directors pnd their Alternates may attend
all meetings of the J3oar4 of Gpyerpor^ and inay participate in such
meetings, but an Executive Director or his Alternate shall not be
entitled to vote at any such meeting unless he shall be entitled t$
vote as a Governor pr an Alternate or a Ten*poj:ary Alternate of a Governor <
(b) The Chaiiwn of ths Board of governorsf in consultation
with tlfxo Ex^Qutiye'Dirpotops^ may invite obj3$rverp to attend qmy meeting
of the Board of Governors*
OONFIDBNTIiiL
CONFIDENTIAL
National Advisory Counoil
Document No, 214
- 4 -
B# That there be added to the By-laws of the Baiik a newSection 23 to read as follows:
Section 23 # Amendment of By-Laws«
These By-laws may be amended by the Board of Governors at
any meeting thereof or by vote without a meeting as provided in
Section 13,
CONFIDENTIAL
National Advisory Council
Document Ho. 226
September 2k9 19I+6
MEMORANDUM Tot National Advisory Council
Prom: E. G# Collado - V. S. Executive Director *
International Bank
Subject: Report No. ik on Activities of the International Bank
U* S. Executive Director
Report Ho. 1^
Activities of the International Bank
On September 20^ 19^-6 the Executive Directors approved the
attached report of the Committee on Interpretations which will "be
transmitted to the Board of Governors at the coming meeting in
accordance with Resolution No. 6 of the Savannah meeting*
Attachment•
CONFIDENTIAL
National Advisdtfy Council
Document ITo, 6
Report of the Committee on Interpretations
September 19,
Section 12 of The Brett on Woods Agreements Act of the
United States of America provides as follows:
The governor and executive director of the Bank
appointed "by the United States are hereby directed to
obtain promptly an official interpretation by the Bank
as to its authority to make or guarantee loans for programs of economic reconstruction and the reconstruction
of monetary systems, including long-term stabilization
loans* If the Bank does not interpret its powers to include the making or guaranteeing of such loans, the
governor of the Bank representing the United States is
hereby directed to propose promptly and support an amendment to the Articles of Agreement for the purpose of
explicitly authorizing the Bank, after consultation with
the fund, to make or guarantee such loans* The President
is hereby authorized and directed to accept an amendment
to that effect on behalf of the United States.
Resolution 6, adopted by the Board of Governors of the Bank
on March 18, 19U6', provides as follows:
That the Executive Directors of the International
Bank for Reconstruction and Development are invited, at
the request of the Governor for the United States of
America, to interpret the Articles of Agreement, pursuant
to Article IX (a), as to the authority of the Bank to make
or guarantee loans for programs of economic reconstruction
and the reconstruction of monetary systems, including longterm stabilization loans•
The Executive Directors of the Bank have referred the matter
to this Committee,
CQSTIDENTIAIi
National Advisory Council
Document No # 226
~ 2 The Committee, having carefully examined the question in the
light of the provisions of the Articles of Agreement of the Bank and of
statements and memoranda which have "been submitted to the Committee with
regard thereto, presents the following report and recommendations to the
Executive Directors:
1#
The question presented "by Section 12 of the Bretton Woods
Agreements Act relates to the general purposes for which the Bank is
authorized to make or guarantee loans and th§ scope of the authority of
the Bank to make or guarantee loans*
2* Article I of the Articles of Agreement of the Bank sets
forth the purposes of the Bank as follows:
(i) To assist in the reconstruction and development
of territories of members "by facilitating the
investment of capital for productive purposes,
including the restoration of economics destroyed
or disrupted "by war, the reconversion of productive
facilities to peacetime needs .and the encouragement of the development of productive facilities
and resources in less developed countries,
(ii) To promote private foreign investment "by means of
guarantees or participations in loans and other
investments made by private investors; and when
private capital is not available on reasonable
terms, to supplement private investment "by providing, on suitable conditions, finance for productive
purposes out of its own capital, funds raised by
it and its other resources*
CONFIDENTIAL
CONFIDENTIAL
National Advisory Council
Document No. 226
- 3(iii) To promote the long-range balanced growth of international trade and the maintenance of equilibrium
in balances of payments "by encouraging international
investment for the development of tae productive resources of members, thereby assisting in raising
productivity, the standard of living and conditions
of labor in their territories,,
(iv) To arrange the loans made or guaranteed by it in
relation to international loans through other channels so that the more useful and urgent projects,
large and small alike, will be dealt with first.
(v) To conduct its operations with due regard to the effect of international investment on business conditions in the territories of members and, in the immediate postwar years, to assist in bringing about a
smooth transition from a wartime to a peacetime economy.
The Bank shall be guided in all its decisions by the purposes
set forth above.
3. The relevant provisions of Article III of the Articles
of Agreement of the Bank with regard to the making or guaranteeing of
loans by the Bank are as follows:
Section 1. Use of resources
(a) The re^ourqes and the facilities of the Bank shall
be used exclusively for the benefit of members with equitable consideration to projects for development and projects for reconstruction alike.
(b) For the purpose of facilitating the restoration and
reconstruction of the economy of members whose metropolitan territories
have suffered great devastation from enemy occupation or hostilities, the
Bank, in determining the conditions and terms of loans made to such
members, shall pay special regard to lightening the financial burden and
expediting the completion of such restoration and reconstruction*
*
*
*
*
Section 3* Limitations on guarantees and borrowings of the
CONFIDlMTIAL
<0OBFUttmi£b
National Advisory Council
Document No. 22$
- if-
The total amount outstanding of guarantees, participations in loans and direct loans made by the Bank shall not "be increased
at any time,, if "by such increase the total would exceed one hundred percent of the unimpaired subscribed capital, reserves and surplus of the
Bank*
Section 4 #
Conditions on which the Bank may guarantee or
make loatis.
Ihe Bank may guarantee, pa&ticipate in, or make loans to
any member or any political sub-division thereof and any business, industrial, and agricultural enterprise in the territories of a member, subject
to the following conditions:
(i)
When the member in, whose territories the
project is located is not itself the borrower,
the member or the central bank or some
comparable agency of the member which is
acceptable to the Bank, fully guarantees
the repayment of the principal and the payment
of interest and other charges on the loan,
(ii)
The Bank is satisfied that in the prevailing
market conditions the borrower would be unable
otherwise to obtain the loan under conditions
which in the opinion of the Bank axe reasonable for the borrower.
*
(iii) A competent committee, as provided for in
Article V, Section 7,has submitted a written
report recommending the project after a careful
study of the merits of the proposal*
CONHDMTIAL
(iv)
In the opinion of the Bank the rate of interest
and other charges arb reasonable and such rate,
charges and the schedule for repayment of
principal are appropriate to the projeqt.
(v)
In making or guaranteeing a loan, the Bank shall
pay due regard to the prospects that the borrower,
and, if the borrower is not a member, tha;t the
guarantor, will be in position to meet its
obligations under the loan;; and the Bank shall
act prudently in the interests both of the
particular member in whose territories the project
is located and of the members as a whole.
CONFIDENTIAL
National Advisory Council
Document Ho. 226
~ 5~
(vi)
In guaranteeing a loan made by other investors,
the Bank receives suitable compensation for its
risk.
(vii) Loans made pr guaranteed "by the Bank shall,
except in special circumstances, be for the
purpose of specific projects of reconstruction
or development.
Section 5* Use of loans guaranteed, participated in or
made by the Bank.
(a) The Bank shall impose no conditions that the proceeds
of a loan shall be spent in the territories of any particular member of
members.
(b) The Bank shall make arrangements to ensure that the
proceeds of any loan are used only for the purposes for which the loan was
granted, with due attention tp considerations of economy and efficiency and
without regard to political or other non^economic influences or considerations,
(c) In the case of loans made by the Bank, it shall open
an, account in the name of the borrower and the amount of tlie loan shall be
credited to this account in the currency or currencies in which the loan is
made. The borrower shall be permitted by the Bank to draw on this account
only to meet expenses in connection with the project as they are actually
incurred.
ty. The expression "loans fpr programs of econpmic recon-*
struction and the reconstruction of monetary systems, including long-term
stabilization loans,fr is not defined either in the Bretton Woods Agreements
Act or in the above~qupted Resolution No. 6. There is no reason to doubt,
however, that loans of the kinds intended to be included in such expression
fall within the general purposes for whioh the Bank is authorized to make
or guarantee loans* Vith regard to &ny particular loan the pnly question
would be whether or not it complied yrith the conditions specified in the
above-quoted provisions of Article III of the Articles of Agreement of the
Bank. Such conditions apply generally tp all loans made QV guaranteed by
the Bank*
COOTIDUNTIAL
CCOTIBBNIIAl
National Advisory Council
Document &H©,/ 226
Among those conditions is the condition set forth in paragraph
(vii) of Section k of Article III that tfLoans made or guaranteed by the
Bank shall, except in special circumstances, be for the purpose of specific
projects of reconstruction or development #w
It is obvious that mapy of the
loans referred to in Section 12 of the Brett on Woods Agreements Act would
be ttfor the purpose of specific projects of reconstruction or developmentff, *
within the meaning of the above^quoted provision of Section k (vii) of
Article III of the Articles of Agreement of the Bank. But without at this
time attempting to determine what would constitute a specific prpject of
reconstruction or development within the meaning of that Section, it is
sufficient to point out that un<|er such Section the Bank is authorized
w
in special circumstancesfr to. make or guarantee lo$ns other than for purposes
of specific projects of reconstruction or development, provided, of course,
that such loans come within the general purposes of the Bank as set forth
above. It follows, therefore, th$t^ under Article III, Section k (vii),
of the Articles of Agreement, the Bank, while primarily expected to make or
guarantee loans for specific projects of reconstruction and d°yelopnent,
does have authority to ma&Q or guarantee 3.oan$ for programs of economic
reconstruction and the reconstruction of monetary systems, including longt&rm> stabilisation loans, pven %f such l o w s are not foy specific projects
of reconstruction or devQl9j?pent within the mining of sucjbt Section*
%
In determining whether or not to make or guarantee any
such loan^ it is, of course-, for the Bank tp decide whether op not such
loan conforms to the conditions specified in the above^quoted provisions
National Advisory Council
Document lTo# 266
of Article III of the Articles of Agreement of the Bank, endf in the case
of a loan which is not for the purpose of a specific project of reconstruction or development, it is for the Bank to decide whether special
circumstances exist which justify it i& making or guaranteeing such loan,
6» The Committee i$, therefore, of opinion that, under the
Articles of Agreement, the Bank has authority to make or guarantee loans
for programs of economic reconstruction ajid the reconstruction of monetary
systems, including long-terni stabilization Ipgtns, aja& the Committee recom*mends that the Executive Directors so deci&e.
J#
Jf this report shall t>s approved fcy the ExecuHY 0 Directors,
the Committee recommends that this report be tr#n$mitte& to the Board of
Governors as the decision o f the Sxeo^itive Directors %n acaordajice with the
fo# 6 ^f the Bpgtrd of
Committee on
(Original signed "by
y
Hubert Ansiaux
Victor Molle?
p (Chairman)
National Advisory Council
Document Ho. 22f
September 2kf ^
To: National Advisory Council
Prom} E # G. Oollado - U, S. Executive Directorf
International Bank
Subject; Report No f 15 on Activities of the International Bank
TT# S # Executive Director
Report No* 15
Activities Q£ the International
On Sep^"b^r 30 1 1 9 ^ the Executive Directors approved th#
attached Sesolutipn to Authorise the Purchase and Sale of United
States Treiaswy BillQf United States Ireasury Notei? and
States CertifiGatQs of
CONFIDENTIAL
Hational Advisory Council
Document Ho. 227
B - 30
(To be submitted to the
Executive Directors at
38th Meeting, September
20,)
RgPQRT Of gffl COMMITTEEi Off
Froppsed Resolution to Authorise the
Purchase and Sale of United States
Treasury Bills> United States Treasury
Npfcee and United States Certificates
of Indebtedness*
i
September 19 t
Ixx opim^ottQft with its consideration of the question
cts to the pdwer of the Bank to invest its capital or p^rt ihereof in short term ^QcnMrities, the Committee on Interpretation,
in consultation with General Counsel, has considered the attached
J)raft of Hesolution to Authorize the Purchase and Sale of United
States Treasury Bills, United States Treasury Notes and United
States Certificates of Indebtedness and the Committee is of the
opinion tha.t the aption proposed in such Draft of Eesolution is
withirt the powers of the Bank; under its Articles of Agreement.
Goironittes pn
(Original signed by
JCyriakos Varv&ressos)
Kyriakos Varvarossos (Chairman)
Victor Moller
N. S\in dares an
CONFIDENTIAL
COHFIDENTIAL
National Advisory Council
Document No. 227
Draft of Resolution to Authorize the Purchase and
Sale of Uhited States Treasury Bills, United States
Treasury Notes and United States Certificates of
Indebtedness,
(To be submitted to the Executive Directors
on September 20 1 19U6 for their approval)
that the President or the Vice-President of the
Bank, and each of them, be, and he hereby is, authorized in the name.
#
and on behalf of the Bank (a) to purchase from time to time at current
market prices a,t the time of purchase United States Treasury Bills,
United States Treasury Notes and United States Treasury Certificates,
of Indebtedness, or any of theip, maturing not more than 12 months
after tho date of purchase thereof 5 (b) to apply to t)ie purchase of such
Bills, Notes and Certificates of Indebtedness #11 QV any part of the
2$ of the capita,! of the Bank which under Section 7 (i) of Article II
pf the Articles of Agreement of the Bank w$s required to be p£$d in
gold or United States dollars $nd which is held by $*ie Bank in United
States dollars; and (c) fros time to tine to sell at current market
prices &% the %ino pf salo any pr all such Bills, Nptes &ni Certificates
which shall bs I*e34 by the B$nk, and
KBS0I^V3SD tJiart the Presiclont an* thp Vice?*rPresidQnt of the
9ank, pui^L each pf the^f be and hq liereby is ? authorize^ %n the n w e
on behalf of the Bank to execute any and all such documents and to do
any m& all, f W h acts and things as he sh^ll dpep necessary QV
in order to carry f u H y intp effect the purpose of the foregoing
resol\3Ltionf
September ;9.f
>
n
Fl
FUND AGENDA.
The Agenda f o r t h e Meeting on September 2 7 , 194-6 o f t h e Board o f
Governors of t h e I n t e r n a t i o n a l Monetary Fund i s a s f o l l o w s :
I.
II.
III.
ORGiJJIZATION OF MEETING AND ELECTION OF OFFICERS
REPORT OF EXECUTIVE DIRECTORS
FINANCIAL STATEMENT
I V . /APPLICATIONS FOR MEMBERSHIP, ITALY, LEBANON, SYRIA, AND TURKEY
V.
VI.
REQUESTS FOR REVISION OF QUOTA
RTLES AND REGULATIONS
VII.
AGREEMENT WITH UNITED NATIONS
VIII.
PLACE OF SECOND ANNUAL MEETING
IX.
OTHER BUSINESS
Elections
and
THE FUND
Notice 5f Meetings
-
(Section 3 of the 3y-Laws)
The Managing Director shall notify all members of any meeting of
the Board of Governors.
Notice shall be sent to members by telegram or cable not less than
six weeks prior to the date of any meeting^ except that in urgent cases
this period may be shortened to not less than 10 days*
Agenda of Board Meetings
(Section 6 of the 3y-Laws)
(Decision on adoption is by majority of the total votes cast.)
The agenda for the meetings of the Board of Governors shall be
prepared under the direction of the Executive Directors by the Managing
Director and shall be transmitted simultaneously with the notice to the
members required to be sent pursuant to Section 3»
Additional subjects niay be placed upon the agenda by any Governor
or under special circumstances by the Managing Direptor at the direction
of the Executive directors provided notice thereof shall have been
given to the Fund in writing not less than 7 days prior to the date
of the meeting. The Managing Director shall inform the members of any
Stych additions to the agenda as soon as possible• The Board may
authorize the placing of any matter upon the agenda even though the
required notice shall not have been given.
Fiscal Tear and Annual Meeting of the Governors adopted at the
Savannah Conference, March 16, 19l*6t (Resolution No* 3 ; Savannah
Conference),
lf
That the fiscal year of the International Monetary Fund sfrall
begin on J\CLy !*
2. That the Cfc&irm&n shall call tfte first annual meeting of the
Boards of Governors during the month of September 19i*6f
•
Organization
an4 Management
;
'
"
(Article XII. of the Articles of
Jlgreempnt) (Section 2)
(d) The Board of Governors shall hold an annual meeting and
such other meetings as may be providedl for by the Board of Governors
called by the Executive Directors* Meetings of the Board shall be
called by the Directors whenever requested by fiv§ members or by
members having oner-quarter of the total voting power•
- 2 Item I
of Fund
Agenda
Organization of Meeting and Election of Officers
Election of Chairman and Vice Chairman
(Section 7 of the
By-Laws)
(Decision is by majority of the total votes cast # )
At each annual meeting the Board of Governors shall select
a Governor to act as Chairman at least two other Governors to act as
Vice Chairman until the next annual meeting.
In the absence of the Chairman the Vice Chairman designated
by the Chairman shall act in his place.
Secretary
(Section 8 of the BiyrLaws)
The Secretary of the Fund shall serve as Secretary of the
Board of Governors.
Miniates
(Section 9 of the By~Laws)
The Board sha^-l keep a summary repord of its proceedings
which shall be available to all members and which shall be filed
Executive Directors for their guidance*
2. Report of Ex,
Directors
Item II
of Fund
Agenda
Report of Executive Directors
(Decision on approval is by majority of the total votes cast.)
Report of Executive Directors
(Section 10 of the By-Laws)
The Executive Directors shall have prepared for presentattion at the annual meeting of the Board of Governors an annual
report in which shall be discussed the operations and policies of
the Fund and which shall make recommendations to the Board of
Governors on the problems confronting the Fund.
MEMORANDUM FOR THE SECRETARY
Subject: Annual Report of the Executive Directors
of the International Monetary Fund*
September 1946•
The salieiytt points of the Annual Report of the Executive
Directors of the International Monetary Fund to the Board of
G
are summarized as follows*
1,
Financial Statement and Administrative Budget
Since Fund operations have not yet commenced, subscriptions
from, meniber countries for meeting administrative expenses of
1/100 percent of their quotas represent the sole receipts, and
administrative expenses represent the sole payments. At the
present atage of the Fund's organization it is impossible to
present an annual administrative budget. The following is a
summary of administrative receipts and payments from the Fund's
inception through August 1946:
Member Countries1 Subscriptions
for Administrative Expenses
y
Administrative Expenses
Balance Carried Forward
2*
739,750*00
T 2473826,40
$
491,923*60
Fund Status
(a) Applications for Membership •» Italy, Lebanon, Syria
3nd Turkey# . The recommendations Of the Executive Directors to
the Board of Governors (Appendix A) were not attached to the
report•
(b) Applications for Quota Revisions - Paraguay from
$2 million to $> million* France has also requested a revision
in quota• The recommendations of the Executive Directors to the
Board of Governors (Appendix B) were not attached to the report•
(c) Relations .with Other International Organizations?
(l) International Bank for Reconstruction and Pevelopmerit* Ihe Fund has collaborated closely with the International
Banfcj such coordination was achieved through joint committees of
the two Boards of Executive Directors*
PNRRA and FAQ, Fund was represented at the UNRRA
conference held in Geneva in August, and at the FAQ conference
held in Copenhagsh in September.
(3) UN* Fund was represented at conferences of the
Economic and Social Council of UN* Relations mXk undoubtedly
grow stronger, but a forriial agreement clarifying UN^Fund relationship was rejected for the time teing*
3#
Fund Policies
(a) Rules and Regulations? The Executive Directors prepared
draft, rules and regulations pertaining to procedural as well as to
policy matters for review by the Board of Governors •
(b) Interpretations• The Executive Directors are charged
with interpretations- of the Fund.'Agreement • The following thr^e
interpretations were requested:
(1) By the Governor for the U*K*, an interpretation of
"Fundamental Disequilibrium11« No interpretation has yet
been is sued •
(2) By the Governor for the U#3*5 an interpretation of
!U$e of the Fund's Resourcesf?# Interpretation issued i s
not contained in report*
l
(3) By the Governor for India, an interpretation of
appointment of an Executive Director11* The Executive
Directors ruled that "one of the five largest quotas £t
tte date of the regular election or at any date between
regular elections shall be entitled to appoint an
Executive Director who will hold office until the #ext
regular election without prejudice to the right of &
subsequently admitted member to appoint a Director $£
i t has one of the five largest quotas."
4»
Fund Operations
(a) Establishment of I n i t i a l Par Values of
AIL1 member countries have been officially requested to
to the Fund the initial par values of their ciarrencies* It was
feared that unless international financial consultation and 6p?operation were reached during the period of reconstruction, thQ
present emergency controls may again degenerate into economic
warfare* The Executive Directors decided therefore in spite of
obvious difficulties to initiate now discussions concerning
satisfactory exchange rates at this time*
5»
International Monetary Review
The report qites the broad economic and financial problems
confronting the postwar world* It emphasizes the need for international efforts to free exchange transactions which, in turn,
will result in greater exchange rate .stability* But the most
important condition for stability of e^ghange rates is the maintenance of high pro diction levels throughout the world* International investment will be required to restore and expand world
production* International capital movements, in turn, depend
ultimately on expansion of world trade * Checks of current
world-wide inflationary tendencies will help facilitate world
trade•
CONFIDENTIAL
National Advisory Council
Document No» 216
September 20, 1946
NATIONAL ADVISORY COUNCIL
ON
INTER1TATI0NAL MONETARY AUD FIE&NCIAL PROBLEMS
1IEM0RAHDUM To: National Advisory Council
Front
Secretary of the Council
Subject: Annual Report of the Executive Directors
of the International Monetary Fond
Attached is the annual report of the Executive
Directors of the International Monetary Fund which
is "being transmitted for the infornation of the Council
members.
Appendices A, B, a^dlH .-vriill be forwarded as separate
documents*
CONFIDENTIAL
INTERNATIONAL MONETARY FUND
Annual Report
of the
Executive Directors
September 1946
TABLE OF CONTENTS
Letter of Transmittal
Introduction
I#
Establishment of Fund
Entry into Force
Inaugural Meeting
First Executive Directors
Interim Period
Selection of Managing Director
Organization of Operating Staff
Administrative Budget
Financial Statement
II. Status of Fund
Application for Membership
Revision of Quotas
Relations with Other International Organizations
III. Policies
Rules and Regulations
Interpretations
IV, Operations - Initial Par Values
V, International Monetary Review
Appendices
A#
B,
C,
D,
£•
F.
G,
H.
I,
J#
Reports on Applications for Membership
Reports on Requests for Revision of Quotas
Relations with the United Nations
Interpretations
Financial Statement
Administrative Budget
Changes in Governors and Executive Directors
Rules and Regulations
By-Laws
Articles of Agreement of the International Monetary Fund
September 16, 1946
LETTER OF TRANSMITTAL TO THE BOA&D OF GOVERNORS
Sirs:
Section 10 of the By-Laws of the International Monetary Fund
provides that "the Executive Directors shall have prepared for
presentation at the annual meeting of the Board of Governors an
annual report in which shall be discussed the operations and
policies of the Fund and which shall make recommendations to the
Board of Governors on the problems confronting the Fund # " Because
of the short time that has elapsed since the Inaugural Meeting of
the Board of Governors, the present report is limited in scope and
content*
The first major task of the Fund, the establishment of agreement
of initial par values for the currencies of member countries, has
been initiated. The Fund's transactions will begin after the required
number of par values have been agreed, as provided in the Fund Agreement.
The major considerations of policy which have occupied the
Executive Board in the recent period are contained in the Rules and
Regulations, which are presented with this report for review by the
Board of Governors. They will, no doubt, have to be changed in the
light of experience, but it is believed that they are sound working
rules for the initial period of operations.
In submitting this report to the Fund, I want to make two brief
comments*
The first is that the work of the Fund has been, to a very high
degree, a work of mutual cooperation and understanding. In their
concise form, the Rules and Regulations may seem to be a mere formulation of simple and indisputable principles. However, a good many
are the result of long discussions concerning the organization as well
as the initial policy and the operations of the Fund.
During these discussions, delicate and important questions have
been solved in a unanimous desire for agreement. It is true, that
some important problems have not yet been touched, but the short
experience which we have just gone through allows us to look forward
hopefully to the times ahead.
My second comment concerns the apprehensions which have been
voiced in some quarters as to the future of the Fund. The difficult
economic and political conditions under which the Fund is starting
its operations have been emphasized. Some have wondered whether it
would not be better to delay until greater stability prevails*
- 2 We have not thought so today in Washington, any more than we
did in 1944 at Bretton ^oods. Then, as today, we knew that the
world would require time to recover from the terrible crises which
have upset it since 1914* But we have thought that an effort should
be made as soon as possible toward righting it again. It would, of
course, have been highly desirable to make such efforts simultaneously
in all fields: economic, political, monetary. These would have been
the ideal conditions. Should the fact that these conditions do not
prevail for the time being deter the Fund from starting its activities?
Such has not been our opinion. Tmmobility is not a policy. To
act entails risks. Not to act often entails greater risks. It is
with open eyes, conscious of the possible dangers, conscious, too,
of the constructive element that the Fund may be able to constitute
in the reestablishment of a more stable world, that we enter the path
indicated in the report. We know that our work can only be a
beginning, that other elements shall be needed to complete it. But
WG hope that the very fact of initiating it will have favorable
effects, and that it will constitute both an example and an incentive.
Camille Gutt
Chairman of the Executive Board
and Managing Director
INTERNATIONAL MONETARY FUND
Annual Report of the Executive Directors
September 1946
Introduction
report, prepared in accordance with Section 10 of the By-Laws,
covers the operations and policies of the International Monetary Fund in
the period from May 6, 1946, when the Executive Directors held their
first meeting in Washington, through early September 1946» In this
period, the Fund was creating an organization and laying down the necessary rules for its operations* The report is therefore a brief summary
of their accomplishments, with brief references to certain other tasks
that have been undertaken by the Executive Directors.
Since it is intended that in future years the annual report of the
Executive Directors will cover the operations of the Fund in the preceding
fiscal year, such figures as are here presented deal mainly with the
period ending June 30, 1946« However, in order to give the Board of
Governors as complete a view as possible, this report covers certain
developments since the end of the fiscal year*
I. ESTABLISHMENT OF THE FUND
Entry into Force
The Articles of Agreement of the International Monetary Fund entered
into force on December 27, 1945, when representatives of thirty countries
met and participated in a ceremony of signature held in Washington, P,C,
$y December 31, 1945> thirty-five countries had signed and otherwise
indicated their intention to become members. These were
Belgium
Bolivia
Brazil
Canada
Chile
China
Colombia
Costa Rica
Cuba
Czechoslovakia
Dominican Republic
Ecuador
Egypt
Ethiopia
France
Greece
Guatemala
Honduras
Iceland
India
Iran
Iraq
Luxembourg
Mexico
Netherlands
NorwayParaguay
Peru
Philippine Commonwealth
Roland
Uni?on of South Africa
United Kingdom of Great Britain
and Nprthern Ireland
United States of America
Uruguay
Yugoslavia
- 2 Instruments of Acceptance have been deposited with the United States
Government, as required by Article XX, Section 2(a) of the Articles of
Agreement, on behalf of all of the above countries*
Inaugural Meeting of the Board of Governors
In accordance with the provisions of Article XX, the Government of
the United States called the first meeting of the Board of Governors of
the Fund to meet jointly with the Board of Governors of the International
Bank for Reconstruction and Development at Savannah, Georgia, on March 8,
1946.
During the Meeting, the Board adopted a resolution which extended
from December 31, 1945, to December 31* 1946, the period in which countries
listed in Schedule A could joint as original members• Under this resoluition representatives of Cuba, El Salvador, Nicaragua, and Panama signed
the Articles in the course of the Meeting* Denmark, with a quota fixed
at $68,000,000 by the Board of Governors, likewise acquired membership
under the authority of this resolution on March 30, 1946.
Ihis Meeting took the necessary preliminary steps to establish the
International Monetary Fund. IJy-Laws were adopted to establish procedures
for meetings of the Board of Governors, and to govern the operations of
the Fund. A number of special tasks were assigned to the Executive Directors,
The Board of Governors appointed a temporary secretary, Mr. Roman £• H o m e ,
to make the arrangements for the first meeting of the Executive Directors,
and fixed the date of the first meeting at the beginning of May,
First Executive Directors
The Executive Directors, who were appointed or elected ir* stccordance
with the provisions of the Fund Agreement, were as follows:
Appointed Executive Directors
Votgg
George Boston
J. V. Joshi
lee-Chun Koo
Pierre Mendes-Franpe
Harry P* T/hite
United Kingdom
India
China
France
United States
13,250
4,250
5,750
4,750
27,750
Elected Executive Directors
G. W. J. Bruins
Netherlands
Union of South Africa
3,000
1,250
Rodrigo Gomes
Colombia
Costa kica
Cuba
Dominican Republic
El Salvador
Guatemala
Honduras
Mexico
Nicaragua
750
300
750
3Q0
27?
300
275
1*150
270
755^
- 3 -
Camille Gutt
Belgium
Iceland
Luxembourg
2,500
260
350
3U0
J. V. Mladek
Czechoslovakia
Poland
Yugoslavia
1,500
1,500
850
Louis Rasminsky
Canada
Norway
Ahmed Zaki Bey Saad
Egypt
Ethiopia
Greece
Iran
Iraq
Philippine Commonwealth
Francisco Alves dos
Santos-*Filho
37250
700
310
650
500
330
400
2739O"
Bolivia
Brazil
Chile
Ecuador
Panama
Paraguay
Peru
Uruguay
Jryterim Period
The necessary arrangements for the first meetings in Washington of
the Executive Directors were made by the Temporary Secretary, Mr. Horne,
with the assistance of a small staff. Thanks to the energy and ability
of this group, quarters were provided and equipped, documents of the
Inaugural Meeting were collected, edited, and published and the necessary
correspondence was transacted.
Selection of the Managing Director
At their first meeting on May 6, 1946> the Executive Directors
selected as Managing Director ife*. Camille Gutt of Belgium, who
thereupon resigned as Executive Director. On this date the Managing
Director assumed the chairmanship of the Executive Directors and the
responsibility for organizing and directing the staff of the Fund,
- 4~
Organization of the Operating Staff
The Executive Directors, as a first order of business, discussed the
general organization of the staff. By mid-June a general plan of organization had been agreed upon and, on June 20, was put into effect. Reporting
to the Managing- Director, the staff is divided into five primary departments
and offices, as follows:
Operations Department
Legal Department
Research Department
Office of the Comptroller
Office of the Secretary
Each of those departments and offices has a director or head responsible
to the Managing Director* The directors or heads of the primary units are
aided by assistant directors. The departments and offices are further
subdivided into divisions under chiefs• It is intended that the organization
should be simple and flexible.
By the beginning of September, the Managing Director had appointed the
head or acting head of each of the major staff units of the Fund and these
officials had assumed their duties in Washington. They are:
Mr* Lennox C. Fisher (U.K.), Director
Operations Department
Mr* Edward M. Bernstein (U»S.), Assistant Director, Acting in Charge
Research Department
$6% A. van Campenhout (Belgium), Director
legal Department
Mr. Charles M. Powell (Canada), Assistant Comptroller
Office of the Comptroller
Mr. Frank Coe (U.S.), Secretary
Office of the Secretary
By the end of August, that portion of the Fund's pperating staff which
ha<3 reported for duty numbered approximately 100 persons, recruited from
15 countries* Equipment and supplies had been procured and necessary
procedures had been established to direct the work of the staff through the
early period.
The Fund has adapted for its employees the salary scale and grades of
the United Nations.
As required by the Fund Agreement, the Managing Director hap pai4
J'due regard to the importance of recruiting personnel on as wide a geographic
basis as possible,tf and has taken account of "the importance of securing
the highest standards of efficiency and technical competence.11 It hag
proved difficult and time-consuming to negotiate with and select prospective
- 5staff members who are scattered all over the world* In most countries there
is a shortage of the kinds of skilled financial and economic personnel that
the Fund and other international organizations are seeking. Because of this
shortage, the treasuries, central and private banks and exchange departments
of many countries are unable or reluctant to release their personnel* Of
those who can be released, a considerable number are reluctant to give up
established positions to undertake new work in another country.
Despite these difficulties, the Managing Director is successfully
recruiting the Fund's personnel according to highest technical standards of
treasuries and central banks. The staff already contains a number of the
leading international experts in the fields with which the Fund is concerned
and the completed staff will be qualified for the important tasks which
member countries have entrusted to the Fund*
Administrative Budget
Section 20 of the By-Laws provides that an administrative budget should
be incorporated in the Annual Report to be presented to the Board of Governors•
In this report statements of administrative expenditures have been included,
but in view of the fact that the Fundfs major operations have not begun and
that it is difficult, if not impossible, to determine the Fund^5 administrative requirements in the absence of operating experience, an administra*tive budget has not been presented*
The Fund's transactions will not begin until the required roimber of
par values have been agreed* The amount and frequency of ttyese transactions,
the. kind of information that v/ill have to be collected in advance, and the
extent to which negotiation may be necessary all have a bearing on the size
of the staff required*. Similarly, the volume of work required in connection
with exchange rates, exchange restrictions and the other obligations of
members cannot be clearly foreseen at this stage, npr can the expenses of
providing adequate space, equipment and office furnishings. For these reasons
the Managing Director has not considered it desirable to attempt to define
the detailed organization of the- various departments and offices* They
will be operated by nuclear staff until such time as the nature and extent
of the Fund*s operations can be better determined*
Financial Statement
Section 20 of the By-Laws requires that the Executive Directors shall
have an audit of the accounts of the Fund made at least once each year and
on the basis of this audit shall submit a ba!aja<?e sheet and statement of
operations of the Fund to the Board of Governors to be considered by them
at their annual meeting*
Since operations have not yet commenced, the financial presentation in
this instance is in the form of a Statement of Receipts and Payments from
inception to 30 June 1946, wh^ch is annexetf to this report. (Appendix E)*
It will be se$n that the Receipts are solely subscriptions of one one-hundredth
of one pep cent of quotas of Member Countries as provided for by Section
2(d) of Article XX o£ the Fund Agreement, while the payments a re limited to
Administrative Expenses* This Statement of Receipts and Parents has been
audited by Mr* G* M* Powell, Assistant Comptroller*
A similar statement showing the administrative expenses of the months
of July and August* 1946, is also given in Appendix E*
- 6 II. SIATUS OF THE FUND
Applications for Membership
At its Inaugural Meeting the Board of Governors received applications for membership from the Governments of Italy, Lebanon, Syria, and
Turkey, which were referred to the Executive Directors for consideration
and recommendations*
As required by Section 21 of the By-4*ws, the Executive Directors
have consulted with representatives of the applicant countries and the
recommendations of the Executive Directors to. the Board of Governors
are contained in Appendix A.
Revision of Quotas
At.the Inaugural Meeting the Governor of Paraguay requested that
the quota of Paraguay in the Fund should be increased from #2,000,000
to $5*000,000f The Board of Governors referred this request to the
Executive Directors for consideration and recommendations• The report
to the Board of Governors on this matter is contained in Appendix B.
On September 6, 1946, the Government of France requested the Fund
to consicter an increase in its quota. The report of the Executive
Directors is contained in Appendix B#
Relations with Other International Organizations
The Fund and the Bank have maintained close relations throughout
the period of organization* The Managing Director of the Fund and
the President of the Bank and their subordinates have worked together
on common problems, and joint committees of the two Boards of Executive
Directors have been utilized as a device for effecting necessary
coordination* All possible steps have been taken to ensure that the
policies and operations of the Fund and the Bank will complement each
other.
As permitted by the Fund Agreement, informal arrangements for
cooperation with other international organizations have been initiated*
The Fund was represented at the UNERA conference held in Geneva in
August 1946 and the FAO conference held in Copenhagen in September•
£i$ison has been established between the Funci and the United Nations
oh publiq informationt Similarly, representatives of the Fund have
participated in conferences of the Economic and Social Council Q£
the United Nations on problems of personnel, pensions and balance
of payments. It %s expected that continuing relations between the
Fund and the United Nations will be maintained on a variety of matters
and that the Fund will adopt the administrative practices of U f N.
wherever these are feasible9
- 7 As requested by the Board of Governors at its Inaugural Meeting,
the Fund, together with the Bank, has conferred with representatives
of the Economic and Social Council concerning collaboration* No
recommendations to the Governor have been prepared, since it is not
believed that a formal agreement is required at this time* The
correspondence is reported in Appendix C.
- 8 III. POLICIES
Bules and Regulatlong
ft
The Executive Directors have, during the past few months, devoted a
large part of their time to the preparation of the Rulqs and Regulations
which are presorted with this report for review by the Board of Governors,
(Appendix H ) # During the course of this work, the purposes ahd functions
of the Fund have been carefully analyzed and an effort.has been made to
establish those procedures and rules of conduqt which will facilitate the
FundJs operations and will create practical working relationships with the
members* Emphasis has been placed on the principal problems which will
face the Fund in the coming year, and the procedures and rules of qonduct
concerning these matters have been worked out in greater detail than those
which dea,l with problems unlikely to arise until a later date.
Some of the provisions of the Rules and Regulations are procedural
in nature and others embody decisions of policy which, in the opinion of
the JSxeoutive Directors, should be made before operations begin. In view
of the fact that they have been drafted without benefit of the knowledge
which will be gained by experience with the Fund's operations, modifications
and additions will have to be made as time goes on and new problems are
encountered, Many of these problems cannot be foreseen at this time*
Others have been considered by the Executive Directors, but their solution
has been postponed wherever practicable in order that the formulation of
thq Rules and Regulations to handle them may reflect the experience of
the Fund. The modifications and additions will, of course, be presented
at future meetings of the Board of Governors for review.ff
Interpretat ions
Under the Fund Agreement one of the functions of the Executive
Directors is to make interpretations of the Agreement. At the inaugural
meeting of the Board of Governors Resolutions Noe^ 5, 6 and 7 requested
the Executive Directors to m^ke interpretations on points raised by the
Governors for the United Kingdom, the United States, and India, The
interpretations requested and made are presented in Appendix D. No
interpretation has yet been made on -the point raised by the United Kingdom,
since that Government required more time th3n was available in order to
put forward its views on the subject.
- 9 IV. OPERATIONS
Initial Par Values
The first major task of the International Monetary Fund is the
initial determination of par values. Article XX, Section 4(a) states
that lrwhen the Fund is of the opinion that it will shortly be in a
position to begin exchange transactions, it shall so notify the members
and shall request each member to communicate within thirty days the par
value of its currency based on the rates of exchange prevailing on the
sixtieth day before the entry into force of this Agreements"
In their early meetings, the Executive Directors considered that
by September the organization of the Fund should be far enough advanced
to warrant undertaking this task. This goal was realized and, accordingly, on September 12 the following cable was sent to all member
governments (with minor variations in the last paragraph)%
Cable to Member Governments
TO
x
pursuant to a decision of the Executive Directors of the Internal
tional Monetary Fund on September 4, 1946, and in accordance with the
Fund Agreement, I have the honor to inform your Government that:
(1) Ir* accordance with Article XX, Section 4(a) of the Agreement,
the Fund "will shortly be in a position to begin exchange transactions."
4
(2)
4 of the
currency
which is
lour Government is requested, pursuant to Article X%, Section
Agreement, to communicate within 30 3ays Sfts P a ? value of its
based on the rates of exchange prevailing on October 28, 1945>
the sixtieth day before the entry into force of the Agreement.
(3) Your Government is requested to acknowledge receipt of this
communication by cable, and to state in such acknowledgment the date on
which this cojnmunication i§ received,
(4) The provisions of Article XX, Section 4(b) apply to Governments
whose metropolitan territory jias not been occupied by the enemy*
(5) The provisions of Article XX, Section 4(b), apply to Governments
metropolitan territory has been occupied by the enemy.
(6) If separate currencies exist in tfte territories in respect of
which your Government has accepted the Agroqment, the provisions of
Article XX, Section 4(g) apply in respect of the communication pf par
values.
- 10 (7) The Fund is prepared to disfcuss with your Government all
matters related to the initial determination of par values• If your
Government wishes to make any special arrangements for discussion, the
Fund would like to be so informed at an early date.
(8) A signed copy of this communication is being sent to your
Legation in Washington for transmittal to you* It will be appreciated
if you will notify all interested agencies or persons in your Government
of the contents of this communication.
Camilla Qutt
Managing Director
As a result o£ this step the -Fund in tlfie next ;few months must come
to an agreement with 30 countries on the structure of exchange rates which
will govern most of the foreign transactions of the world. This is
obviously a very large task especially for an international organization
which is still in its infancy. It is doubtful if the Fund will ever
again, in a similar period of time, have to make so many decisions corn
cerning exchange rates.
In deciding to take this step now, the Executive Directors were
mindful of a number of reasons which could be advanced for postponement*
Many countries have only begun to recover from the devastation of war
and the ta,sk of reconstructing economies and monetary systems will take
several years. Ihe war-time economic controls of many members of the
Fi^nd are still in force. Inflations, of varying degrees of intensity,
are in progress. International trade and other international transactions are only partially restored. Concrete measures for international
economic cooperation, in spheres other than monetary, are not as far
advanced as had earlier been hoped. International political cooperation
leaves much to be desired.
These and other factors make it more difficult to come to an agreement concerning a satisfactory structure of exchange rates at this time.
However, it was the opinion of the Executive Directors that the necessary
agreement could be obtained. When the Bretton Woods Agreements were
signed, it was generally foreseen that the Fund would have to begin its
work in a period of unparalleled devastation and disorder. One of the
major purposes of tho governments who established the Fund was to insure
^he maximum of monetary cooperation in tho transition period from war to
pe$oe. It was feared that unless an effort were made in this period to
establish a regime of international financial cooperation that the various
controls erected to mobilize national economies for war would be carried
over into the peace and result in renewed economic warfare of the kind
which characterized the 1930^s.
Therefore, the Executive Directors have decixted th^t despite the
manifest economic difficulties, it is desirable that the nations of the
world begin now to Qonsult and collaborate concerning their exchange
rates. In making this decision the Executive Directors have also been
mindful that successful international cooperation is one sphere likely
to' facilitate the cooperation being attempted in other international
relations.
CONFIDENTIAL
-11V, INTERNATIONAL MONETARY REVIEW
Post-War Problems
At this time, when the Fund is beginning the consideration of
initial par values of currencies, it is appropriate to review the larger
task that lies before us* The Fund is a means by which the 39 member
countries can establish international economic relations on a basis which
will help tHem in securing greater production and higher standards of
living* To this end, they have agreed to cooperate in maintaining stable
and orderly exchange arrangements, so that international trade and investment will not be hampered by exchange disturbances"*
The war has £eft a host of problems that must be solved if the
world economy is to function on an efficient basis* A large part of the
world was occupied by the enemy and suffered from systematic destruction
and spoliation* The industrial production of these countries practically
qame to a halt, and even their agricultural output was greatly reduced*
These countries of Europe and Asia represent a major segment of the world
economy* They must again produce and trade if the Fund is to succeed in
attaining its objectives*
gven countries that fought off the enemy have found their international eponomic position seriously upset by the war* The United Kingdom,
for example, sold a considerable part of her international qapital resources
3nct incurred large foreign obligations to carry on the war* Production
•was diverted from exports to war needs* Now the British people are engaged in a great effort to expand their export industries and re-establish
their trade connections* With the war-time change in her international
economic position, Britain!s dependence on exports is now far greater
than ever before*
In many areas,particularly in the British Dominions, in Latin
America^ an4 in the Middle East and India, the proces3 of industrialization was accelerated by the urgent need of the United Nations for greater
production for war purposes* The war-time development in these areas is
an indication of the economic progress of which they are capable* A
number of these countries accumulated large foreign exchange resources
coring the war* For the time being, some of these exchange resources can
be usod only in limited amount* In time they will prove of considerable
."benefit to the people of these areas* The new economic status of these
countries and their desire for further economic development will necessitate
adjustments in the structure of world trade*
Apart from these fundamental c&anges in international economic
relations, the war has brought in all countries seripus monetary disturbances
•which must be dealt with before the world economy can be restored and
stabilised* As a by-product of the war, the balance between production,
incomes and th^ supply of money has been upset* A? a consequence, there is
everywhere a tendency toward instability of prices and costs arising from
monetary as well as economic forces*
GONFIPPTIAL
CONFIDENTIAL
These are the circumstances under which the Fund begins its
work. It emphasizes the difficulty of the task of restoring a healthy
world economy^ but it indicates, too, the vital need for the Fund* We
hope that in time, the problems born of the war will be met in a more
satisfactory manner because of the cooperation of the United Nations*
Meanwhile, many countries may have to continue to control their exchanges and some countries may need to adjust the value of their currencies* But there is no reason for economic warfare to develop out of
these disturbed conditions, or for any necessary measures of exchange
adjustment or exchange control to paralyze trade and production* Through
cooperation of members of the Fund, world economic conditions should
gradually evolve toward a balanced international economy, with greater
stability of the exchanges and increased freedom in exchange transactions*
Exchange rates and Exchange Controls
The establishing of an initial pattern of exchange rates, particularly under the new and uncertain conditions of the post-war period,
involves much more than the application of a formula* The currency
values that the Fund will set, in agreement with members, must perfozm
& vital function* They must link the national economy of each country
with that of all others, and in this way provide the basis for an inte>grated world economy* Through the Fund, we hope to secure exchange
which will enable all countries to participate in world trade and i
vestment and to achieve their reasonable economic objectives* The relation of all countries to the world economy must be one of mutual benefit • Each member of the Fund has a duty not to impose on other countries
inflationary or deflationary forces* It has a right to ask that other
countries do not impose such disrupting forces on it*
In ordinary times, the pattern of exchange rates has a historical continuity which gives it an element of strength and stability*
Except duiing periods of crisis, the exchange difficulties that arise
are the result of disturbances in the international economic position of
a single country or a small group of countries* Under such circumstances,
adjustments are made gradually fcy each country to the changing conditions
that affect it, and the world economy moves toward a balanced position*
A great depression or a great war radically alters this process* Yet,
even in such difficult times, much can be done to keep a core of stability
in exchange relationships and to build a stable world economy on this
foundation*
Throughout the war, world trade was continued among the free
countries, although on a smaller scale and directed toward war needs* The
greater part of the trade that has been going on during and since the war
has been conducted at exchange rates that have been found satisfactory in
practice* On this existing structure of exchange rates, we can build #n
appropriate pattern of initial par values by agreement between the members
and the Fund* The fact that the Fund provides an orderly method of ad-r
justing the exchange value of a currency, where it is found to be unsatisfactory, will permit agreement now on initial par values, despite the uncertainties of the world situation, when a stabilizing force in the world
economy is most needed*
CONFIDENTIAL
CONFIDENTIAL
-13After the establishment of initial par values, the Fund will
be in a better position to work toward the gradual removal of exchange
restrictions and currency discriminations* Devised in desperation as
national weapons of defense against monetary and economic chaos at the
depth of the world crisis, restrictions and discriminations were soon
turned by some countries into weapons of economic and political aggression* They proved to be of incalculable haim to world peace as well as
to world trade and prosperity* Even when purely defensive, the protect
tion they afforded was short-lived and illusory, as retaliation by other
nations accentuated the difficulties of all* Their ccansequence was to
force upon the world a network of national barriers which stifled production and trade*
This is more clearly perceived today than it was fifteen years
ago; and this better understanding of the dangers and limitations of exchange controls will be our best ally in the fight against them* Too
often in the past, our efforts at liberalizing world trade have proved
futile and unavailing because .they were directed at the effects, rather
than at the causes of the disease* In many countries, exchange controls
were not adopted lightheartedly and by choice, but as the quick answer
to real and pressing problems of exchange scarcity, which left a country
no alternative but the husbanding of meager and vanishing resources to
meet the most essential needs of the economy*
During the war, exchange controls became an essential mentis of
mobilizing and conserving foreign exchange resources for the prosecution
of the struggle* Today, they often reflect the inadequacy of a count:ry*s
foreign exchange resources to meet fully the demand for imports of consumption and capital goods* The shortage of goods with relation to
demand is an international, as well as national, phenomenon* In the
domestic sphere, it has forced the temporary maintenance, even in peace
time, of rationing and price control, in order to ensure the most
equitable distribution of short supplies* Similarly, exchange controls
in some countries may be unavoidable for a time in order to meet, out of
limited exchange resources, the most essential requirements for consumption
and reconstruction*
These considerations should not discourage rapid progress toward
the elimination of unnecessary exchange restrictions, and especially of
the worst evils associated with exchange controls in the past, their
distortion toward discriminatory ends and bilateral trading* There is
no necessary link between exchange controls and discriminations in favoj?
of one country and against another* Where exchange controls cannot be
immediately and entirely eliminated, they should, nevertheless, be purged
of discriminatory abuses and limited to their proper function of allocating
inadequate exchange resources in a rational manner*
This task will be facilitated if tho convertibility pf currencies
for current transactions is restored in the near future* The inconvertibility of currencies inevitably leads to discriminatory allocation of exchange*
CONFIIENTIAIi
CONFIDENTIAL
-14In the last analysis, multilateral trade depends on the ability of
countries to use the proceeds of their exports to every country to pay
for their imports from any country. The existence of inconvertibility, by
depriving others of the free use of the proceeds of their exports to that
country, may force on them restrictions on the convertibility of their own
currencies* T his is particularly true when the currency of a great trading
country becomes inconvertible*
It is very fortunate that there is now evezy prospect for an
early resumption of the convertibility of sterling in connection with current transactions* The credits made available to the United Kingdom by
the United States and Canada will enable Britain to buy essential imports
and to pay for them with convertible sterling# Countries that depend on
their exports to England to pay for their imports from other countries will
now have the funds which will enable them to maintain convertibility of their
own currencies* This development is a hopeful indication that the Fund will
succeed in restoring the convertibility of currencies and freedom in exchange transactions in accordance with the provisions of the Agreement*
Restoration of Production
Stability of exchange rates cannot be maintained when economic conditions deteriorate* Convertibility of currencies cannot be continued when
international trade and investment break down* The strength of aXX currencies will be greater in a world in which national economies are kept at
$ high level of economic efficiency and financial stability* The difficulties that have arisen in the past, and the difficulties we face new in
achieving the purposes of the Fund, are due to the failure to maintain a
high and stable level of production throughout the world* In each country,
the immediate objective of economic policy must be to increase agricultural
and industrial production and place it on a sound economic and financial
foundation*
The war has resulted in disruption and distortion of production
throughout the world* In some countries, production was greatly increased,
although it had to be shifted to goods needed for the war effort* In other
countries, particularly those invaded by the enemy, the war brought sharp
decreases in production, destruction and loss of capital equipment, and a
shortage of materials necessary for production*
For those countries whose production advanced during the war
the problem is essentially one of reconversion while maintaining high
of output* It is most encouraging that in the Upiteci States industrial
production at present is more than 50 per cent greater than before the
war* In the United Kingdom, despite war destruction and the shortage
of manpower, production is being maintained above the pre-war level* Jn
Canada, industrial production is nearly twice a? great as before the war,
and in the other British Dominions production has shown notable progress*
If the United States, Great Britain and the British Dominions are able to
sustain their increased output, the problem of adjustment will be greatly
eased throughout the world*
CONFIDENTIAL
CONFIDENTIAL
-15Other areas, too, have experienced an increase in production*
In Latin America, industrial production is about 25 per cent greater
than before the war* In India and in the Middle East,* the progress in
the use of modern methods of production represents a revolutionary innovation in their economies. For these countries, the increase in
industrial production offers a prospect for higher standards of living
for their people* These war-time gains, made through the severe sacrifice of consumption, must not be lost in the years to come* Eather,
they must become the starting point for continued economic development
on a sound and enduring basis*
The countries o£ Europe and Asis which were occupied, looted
and destroyed by the enemy have the gravest problems of reconstruction*
Despite this, nearly all of these countries have made noteworthy progress
in restoring production* In the past year, the members of the Fund on
the European continent have raised their industrial production from
less than half of the pre-war level, until it is now about 75 per cent
of the pre-war level* With favorable conditions, the industrial production of these European countries will during the coming year surpass
their pre-war output* Agricultural production in Europe has also ex-*perienced considerable recovery and this year will be nearly 85 per cent
as large as before the war*
In the Far East, some progress has been made toward recovery,
although much remains to be done* In these countries, agricultural
production usually predominates, and, with a measure of security, a
steady and relatively quick recovery in production should be experienced*
There, as elsewhere, reconstruction affords an opportunity for economic
progress* In most of these countries, seiious consideration is being
given to the greater diversification of agricultural production and
greater industrialization as a basis for raising the living standards
of their peoples*
The road back has not been an easy one* Although faciliated
by foreign aid, it is important to know and recognize that recovery in
the occupied countries has been largely the product of the hard work
and great sacrifice of the peoples of these countries* Out of the mis<r
fortunes and calamities of war, there is now the opportunity to reap
some lasting gains* There must be a determination to do everything
possible to increase production to the higher standards commensurate
With the technical progress of the past, decade* Success will depend
prunarily on the people of the countries concerned, but it will also
depend to a great extent bn the expansion of world trade and insrestment*
In such a favorable international economic environment, national
policies on production and employment can be carried through without
plashing with one another and defeating the common end*
CONFIDENTIAL
-16International investment
It urill not be simple or easy to secure increased production* In
order to restore production, agricultural and industrial reconstruction must
be given priority above all other needs with the exception of maintaining
consumption essential to the health of the people* There is everywhere, and
particularly in the countries that have suffered from the war, a shortage
of equipment, raw materials, fuel and transport, and the very essentials
of life* These shortages must somehow be met before labor efficiency can
be restored and production can attain the high levels of which it is capable*
The war-damaged countries all need external assistance to help them
in restoring production* The countries that have managed to maintain and
expand production are the only substantial sources of surplus capital* In
the past year, there has been a lar ge provision of capital for urgent reconstruction needs* In particular, the United States, Canada, and Sweden
have made available reconstruction loans on an unprecedented scale• The
provision of additional foreign capital remains, nevertheless, of the greatest importance to reconstruction and the restoration of the world economy*
The United States Government has extended credits of $1#5 billion for
surplus property and Lend-lease goods in inventories and pipelines. These
credits, although growing out of the war, will provide substantial aid for
reconstruction* At the same time, the lending power of the Export-Import
Bank has been increased to &KL/2 billion, and new credits amounting to
$2 billion have been granted by the Bank in the fiscal year ending
June 30, 1946* In addition, the United States Government has made avail-*
able a line of credit of $3-*3/4 billion to be used by the United Kingdom
under the terms of the Financial Agreement ratified by the American Congress
and British Parliament*
Canada has been quick to appreciate the responsibility of its new
international economic position and it is meeting in a most liberal spirit
the worldfs need for assistance* Under its Export Credits Insurance Act
of 1944* Canada has extended credits amounting to more than $500 million*
These credits do not include the very large advances which have been made
to the United Kingdom* T otal disbursements under the Canadian loan program, including the loan to the United Kingdom, are expected during the
fiscal year 1946-47 to be of the magnitude of fl billion*
Sweden, too, has done much to aid in reconstruction by providing credits
to war-devastated countries* Since the end of the war in Europe, the Swedish
government has authorized credits to other countries aggregating nearly 1
billion kronor, and there is still pending an additional credit of 1 billion
kronor to the Soviet Union* The Scandinavian countries and the United
Kingdom have been the principal recipients of the credits already extended*
In addition to these post-war credits, the Swedish government has written
off 200 million kronor in interest-free advances made during 1945*
CONFIDENTIAL
CONFIDENTIAL
The countries that can provide capital in significant amount out of
their present resources are limited in number. Even so, there has been
a gratifying willingness on the part of many countries, themselves in need,
to help the loss fortunate countries through UNRRA and through the moderate
credits they are in a position to offer* And all countries ha re shown an
appreciation of the important role that international investment can play
in reconstructing and developing the world economy* The members of the
International Bank, by their subscriptions, are assuming much of the risks
involved in international lending, and they are offering the fullest possible
encouragement to the revival of sound and productive investment*
With its present membership, the International Bank will be authorized
to make or guarantee approximately $7*5 billion of loans* The bulk of the
funds for loans made through the bank will be raised in the private capital
markets of member countries, particularly the United States* The establishment of the Bank has made it possible to raise capital for productive pur~
poses on a business-like basis from private investors* In this conneption,
there is still much for private capital to do*--at profit to investors and
with benefit to borrowers*
International investment can be an important factor in contributing
towards a stabler and more productive world economy*' From 193? to pL9;4£*
international investment was practically stopped* In fact, the fLow of
long-teim productive capital, with its stabilizing effects, was superseded
by the flight of capital from one money market to another in search of
economic and political security, witji disastrously disturbing effects* The
difficulty in coping with instability in international economic relations
during the 1930's was in part due to the sudden halt in productive inters
national investment* With the Bank, we may look forward to the availability
of capital, without sharp fluctuations, in amounts that can be fruitfully
employed*
Tflfe are all concerned to see that international investment is a
on a sound and business-like basis* T his means that the capital must be
used by the borrowing country for productive purposes-r-purposes that increase
output and enable a country to repay* And it means that the investing
countries must be prepared to facilitate repayment through the maintenance
ojf adequate imports* These principles of sound international investment
are now generally recognized* The Fund itself can be an important factor
in maintaining the stable and orderly exchange conditions which encourage
international investment and facilitate the service of internationalobligations*
Revival of world tirade
The revitalizing of the world economy requires tjae expansion of world
trade* It wiljl not \>Q enough to restore trade in qitfilian goods to the
prewar level* Even in the 1930*s, tho volume of international trade was
far be^ow the level necessary tot Maintaining a stable $nd prosperous world
economy* We must increase tho volume of international trade to a level
that will reflect the far greater production of which the world is capably*
CONFIDENTIAL
CONFIDENTIAL
-18The d i f f i c u l t i e s of economic adjustment which we now face can be met more
e a s i l y and more promptly i n an environment of expanded world t r a d e •
The expansion of world trade can be b u i l t around the present high
l e v e l s of exports of t h e countries of the Western Hemisphere* In the United
S t a t e s , the volume of exports i n the f i r s t half of 1946 was more than double
the corresponding l e v e l for the years 1936/38* Only a small and diminishing
proportion of these goods was exported on a non-commercial basis* In Canada,
the war-time increase i n exports i s being maintained* In the f i r s t half of
1946, the volume of Canadian exports was a t a r a t e of 50 per cent above t h a t
of 1936/38* In Latin., America, exports i n the f i r s t half of 1946 were about
15 per cent above the corresponding pre-war volume*
These countries are not only exporting on a higher l e v e l than before,
but they have shown an a b i l i t y and willingness t o absorb imports on a,
correspondingly greater scale* Despite the fact t h a t many countries are
not yet i n a position to resume t h e i r customary place i n the American market,
the volume of imports of the United States during recent months was about
10 per cent above the pro-war rate* In Canada imports have continued a t a
higher l e v e l , and during the f i r s t half year were about 60 per cent above
the corresponding pre-war volume* And the American Republics are eager
for increased imports of finished goods and i n d u s t r i a l equipment*
This g r e a t , world-wide demand for imports provides a favorable opportunity for the further development of world trade* The task now i s t o
r a i s e the l e v e l of exports from other p a r t s of the world* In the past* the
United Kingdom and Europe have accounted for more than half of the w o r l d s
trade* The r e v i v a l of production for export i n these countries i s of
tremendous importance for t h e i r own well-being, and i t i s indispensible t o
a balanced world economy*
For t h i s reason, i t i s encouraging t o see the progress made by B r i t a i n
i n restoring her export trade* There i s a firm determination i n t h a t
country t o increase production i n the export i n d u s t r i e s and t o give exports
p r i o r i t y over domestic consumption* Although B r i t a i n cut her exports
sharply u n t i l i n 1943 they were only 29 per cent of the pre-war volume, a
Very promising recovery has been made* In the f i r s t s i x months B r i t i s h
exports were a t a r a t e l e s s than 10 per cent below the 1938 volume^ and
i n recent months they have reached and even exceeded the prer-war volume*
I f world markets continue receptive t o the absorption of more imports, as
tliey probably w i l l , we may reasonably expect t h a t the United Kingdom w i l l
reach the higher l e v e l of exports which i s e s s e n t i a l to her economy and t o
the world*
On the continent of Europe, the export trade of the members of the
Fund has shown gratifying signs of revival* These countries were completely
cut off from the markets of the world for a period of five years * Respite
the domestic need for goods of a l l kinds> production for export has been r e sumed* In the past year, exports have s t e a d i l y increased u n t i l they are
nearly 50 per cent of the pre-war volume* With f u l l recognition of
CONFIDENT
CONFIDENTIAL
.-19the great efforts they have already made, i t i s not out of place to call
for increased concentration on the restoration of production for export*
Because the entire world i s in need of goods, the problem of world
trade i s now primarily one of production* The flow of export goods from
the European countries will not, in fact, deprive their people of any part
of their output* Bather, i t will enable them in a l l cases to secure urgently
needed food, raw materials and equipment from abroad, and i t will f a c i l i t a t e
the revival of foreign investment which they need for reconstruction* By
responding as rapidly as possible to the demand for goods in a l l markets
of the world, these countries will more quickly restore their international
economic position and more effectively strengthen their domestic economy*
In the long run, s t a b i l i t y and freedom of the exchanges depends upon
the expansion of trade* The Fund i t s e l f is a major factor in reducing
the exchange barriers to trade• Every step that the United Nations take
to reduce barriers and restrictions, both public and private, on the
international exchange of goods will contribute to achieving the objectives
of <bhe Fund* For this reason, the Fund will be an interested observer at
the discussion during the forthcoming conference of the United Nations on
employment and world trade*
Control of inflation
The efforts that are being made throughout the world to maintain and
to restore production, investment and trade cannot have their i h l l effect
without monetary stability* The danger of inflation is greatest in the
countries that have suffered most severely from enemy action; i t i s not
wholly absent even in the great industrial countries outside the theater of
war* Inflation i s the great enemy of economic stability* The distortion in
the world economy wrought by the war will be magnified if inflation i s a l lowed to develop* The progress that has already been made is jeopardized
and the hope for the future endangered by the failure to deal promptly
and forcefully with the problem of inflation*
In.a period when a l l the world hungers for goods, when the jravages
of six years of war must be made good, i t is impossible to satisfy at once
the multitude of demands on production* The attempt to express these demands
though expenditure i s the immediate cause of rising prices* In large part
the inflation problem will ultimately be solved as production i s increased*
In the meantime, however, severe inflation will develop unless the monetary
demand for goods i s kept in check* Governments should exercise particular
care to see that their own expenditures are postponed wherever they are not
for urgent reconstruction purposes or essential for maintaining the health
of the people* No country denies i t s e l f the real things i t needs by re*straining expenditure to the available supply of goods* On the contrary,
by avoiding the uncertainties and disturbances of inflation, i t encpurages
production and facilitates the effective use of i t s output*
CONFIDENTIAL
-20As part of the restraint on expenditure, it is necessary to see that
the expansion of money income and the supply of money does n&t proceed more
rapidly than the expansion of production. The ultimate objective of all
economic activity is to raise the standard of living of the people• But
this cannot be done merely by an expansion of money income; it can come
only from an expansion of production* The exigencies of war finance have
resulted in a large increase in the holdings of money by the public. With
the shortage of goods, these excessive holdings of money are a continuing
temptation toward increased expenditure. It is a natural illusion to hope
that somehow, by increasing expenditure, it will be possible to buy goods
that in fact do not exist. To minimize the pressure for excessive expenditure under inflationary conditions, provision should be made for adjustment of the holdings of money to the normal economic needs of the people.
Inflation in the countries now going through reconstruction would
dtelay them in resuming their place in the world economy. The export
markets to which they should be returning would be closed to them because
the prices at which their producers would be willing to export, in preference to selling in the home market, be too high for importers in other
countries, and their output would be diverted from world markets to meeting
the inflationary demand at home. The restoration of the world economy
and the integration within it of the countries that have suffered the
greatest destruction from the war become more difficult and too long delayed^
Inflation in the great industrial countries would impose a severe
hardship not only on their own economies but on the entire world. In the
present state of the world economy, it is inevitable that the large
industrial countries should export more than they import. That is the
way in which they aid in the reconstruction of the war-devastated countries*
It would be unfortunate if inflation in such countries results in decreasing
their contribution to the pool of goods in international trade through
exports, and increasing their drafts upon these goods through importsf
Iif this should happen, the countries which must buy from them the products
essential for reconstruction and for maintaining consumption would have to
pay excessive prices. The purchasing power of their monetary reserves
would be reduced and their need for foreign credits would be increased.
The primary sources of inflation are found in the national policies
of each separate country. The international forces affecting inflation
are very small in comparison with domestic factors. There seems to be a
Uiist&ken tendency in some countries to disclaim responsibility for inflation
on the grounds that it is world-wide and to regard the inflation problem
with which they are faced as external in origin*
There may be a few countries in which much of the inflationary pres~
sure comes from higher prices for their imports and excessive demand for
their exports• In such exceptional cases, there may be justification foy
dealing with the external aspects of inflation through the exchanges. The
woyld-wide inflation problem, however, cannot be dealt with in this way,
£0? exchange yates cannot all be simultaneously increased. Only a
country w&Lch is not itself a source of inflation can properly use this
CONFIDENTIAL
CONFIDENTIAL
-21method of protecting itself from outside pressure* In all other cases,
the use of this device adds to the uncertainties and doubts with which
we must contend in the post-war world* It is fortunate that the Fund will
be available to help in the maintenance of orderly exchange arrangements
while the fundamental causes of inflation are dealt with by each country*
Conclusions
There is no disposition on our part to underestimate the diffiqult4.es
with which the Fund must contend* We recognize that the war has left each
country with economic problems of unprecedented magnitude* We are encouraged by the progress already made in dealing with some of these problems*
We have learned, during and since the war, that a modern economy has great
latent strength that can be called upon in time of need* If each country
does its best to solve its own economic problems, and if all countries
work together to solve their common economic problems, we shall in time^
and not long distant, bring into being the prosperous world for which we
are striving*
The Fund has an important role to play in restoring the vforld economy*
It provides a center of order and stability tov/ard Yrtiich all countries can
progress and from which they can secure help in reaching this goal* We
cannot sit back and wait for normal times* We must do everything possible
to meet the problems of the present and prepare to meet the problems of the
future* There will always be some good reasons for doing nothing* But
there are better reasons for constructive action directed toward worthr
while ends* Our task is to give now an element of strength-and assurance,
of firm determination to achieve our objectives, which can be of im?measurable help in dealing with post-war problems*
In meeting these problems of the world economy*, the United Nations
have the benefit of concorbed action through the new institutions
international cooperation that they have established <— the International
Monetary Fund, the International Bank for Reconstruction and Development,
the Food and Agriculture Organization and, we hope soon, the International
Tra,de Organization* These institutions represent a general acceptance of
the doctrine that the economic well-being of each country depends in large
measure on the well-being of all*
The institution? that have been established represent a great
step in recognizing international responsibility for dealing with
national economic problems* Their success does not depend upon any
particular form of economic organization* It depends only upon the
pursuit of policies directed toward maintaining stability and order in
international economic relations* These institutions are not and cannot
be the creatures of any country or any group of countri.es* Their function
is to represent the interests of all countries of the world* We who ar$
concerned with the daily work of the Fund are conscious; of our obligation
to keep the Fund an international institution that deals impartially with
the international problems with which it has been entrusted*
CONFIDENTIAL
CONFIDENTIAL
-22The world economy is sensitive to political conditions. The war
has now been over for more than a year* In that time, progress has
been made in moving from a war to a peace economy* The continuance
of the progress will be far greater if the countries of the world have
assurance that we are entering into an era of fruitful cooperation among
all the Waited Nations for maintaining peace and for assuring to each
security from aggression* What we do in the international economic
field must be predicated upon the continuance of a peaceful world* We
hope that our work will be a contributing factor in this direction* We
look to the United Nations for the establishment and maintenance of that
confidence in enduring peace without which the world economy cannot
prosper*
CONFIDENTIAL
CONFIDENTIAL
National Advisory Council
Document N o # 3 1 6
APPENDIX C
Relations -with United Nations
There is given below the text of a letter dated March 12, 1946, from the
President of the Economic and Social Council of the United Nations to the
Chairman of the Board of Governors of the International Monetary Fund, which
led to extensive discussions and correspondence between the two organizations
looking toward a foxmal agreement* There is also given the text of the letter
of September 10 from the Managing Director to the Secretary-General of the
United Nations, which states the Pund!s views on this matter*
March 12, 1946
Fred M* Vinson, Esq.
President, Board of Governors
International Monetary Fund
General Oglethorpe Hotel
Savannah, Georgia
Dear Sir:
As you are aware, the Charter of the United Nations provides that
intergovernmental organizations may be brought into relationship with the
General Assembly of the United Nations through the Economic and Social
Council* The Council at its meeting in February appointed a committee
called the Negotiating Committee to enter into negotiations with certain
intergovernmental organizations, and prepared an agreement for submission
to the General Assembly at its next session in September*
Among the organizations which the Economic and Social Council desires
to establish relationship with, are the International Monetary Fund and the
Bank* The Secretary General of the United Nations will shortly be sending
you a communication indicating the points which the Negotiating Committee
of the Economic Council would like to discuss with the authorities of the
Fund and Bank*
I am anxious that these negotiations should take place at the next
session of the Economic and Social Council, which will be held in New Y o rk
from the 25th of May to probably the 20th of June* It is highly desirable
that the negotiations should be completed during that period, as the Council'
will then be in a position to report to the September session of the General
Assembly when the agreement may be adopted* Otherwise, the draft agreement
will have to be held over till the second session of the Assembly in September
of the following year, 1947* I would therefore request you as Chainnan and
your Board to consider the desirability of authorizing an individual or a
committee to meet the Negotiating Committee and discuss with them the terms
E0NFIDENTIA1
CONFIDENTIAL
C-ii
of an agreement on the nature of the relationship between your organization
and the General Assembly* I would also like to have an indication of the
time when your Committee can meet the Negotiating Committee so that I can
arrange that the Committee is convened for that date*
I shall be thankful for a reply at your convenience*
ICours sincerely,
/s/A* Raraaswami Mudaliar
President, Economic and Social Council
September 10, 1%6*
Dear Mr* lie:
In the course of the past few months representatives of the International Monetary Fund have had an opportunity of exploring with the
Assistant Secretary General in charge of the Economic Department and his
colleagues certain of the problems involved in the relationship between
the United Nations and the International Monetary Fund* These exchangee
of views have been very useful in clarifying the issues involved and they
have revealed a wide measure of agreement on the practical methods by which
this relationship can be strengthened*
In addition to these discussions the Fund has had the further advantage
of frequent participation in activities of the United Nations* We were
represented by an observer at the meeting of the Economic and Social Council
in New York last June, and propose to be similarly represented at the next
meeting of the Council* We were pleased to have an observer from the
Economic and Social Council present at the inaugural meeting of the Board
of Governors of the Fund last May, and hope that the United Nations will be
similarly represented at the first annual meeting of Governors to be held
in Washington later this month*
Moreover, in various specific fields a large measure of practical co-operation has already been established between the Fund and the United Nations*
Representative? of the Fund attended the United Nations Conference with
Specialized Agencies on Personnel Matters last month, and have also on
numerous occasions conferred separately with officials of the United Nations
on these problems* Informal discussions have already taken place regarding
statistical information and methods of dealing with public information*
The Fund is desirous of continuing close cooperation with the United
Nations and will take all practical steps, consistent with the Fund Agreement
by which its activities are governed, to broaden and intensify the working
relationships already established*
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CONFIDENTIAL
Th3 Fund recognizes that the Economic and Social Council is responsible
under the authority of the General Assembly for the discharge of the
functions set forth in Article IX of the Charter, and that it has for this
purpose the powers set forth in Article X of the Charter* For its part the
International Monetary Fund is a specialized agency with wide international
responsibilities as defined in its basic instrument, and is responsible to
its appropriate authorities for the discharge of the functions set forth in
that instrument*
The governments which have signed the United Nations charter and the
Articles of Agreement of the Inteinational Monetary Fund have clearlyexpressed their intention that whilst the authority and full responsibility
of each of the respective organizations for the discharge of its functions
under its basic instrument should be maintained and safeguarded, the
organizations should consider it their duty to combine their efforts for the
attainment of the common aims of the United Nations and for establishing
the broad lines of concerted policies and actions*
The International Monetary Fund is fully prepared to collaborate with
the United Nations along these lines* We have given careful thought to the
question whether this collaboration can best be furthered by the negotiation
of a legal instrument such as the Economic and Social Council has negotiated
with certain other specialized agencies» As the result of these deliberations
Yre have reached the conclusion that the precise nature of the collaboration
to be established and the modalities which should govern it can only be
detemined in the light of practical experience and that it would therefore
be premature to attempt to crystallize these relationships into the form of
a legal contract at the present time* In reaching this conclusion we have
had in mind the fact that the Fund is at the very beginning of its work and
that the precise character of its working relationships with the United Nations
is necessarily unknown* Moreover, in view of the fact that membership in
the Fund is so largely co-terminous with membership in the United Nations we
feel that there is little likelihood of insuperable conflicts of interest
arising which can only be settled by reference to a legal contract*
As I have indicated above, the Fund wishes to strengthen in every
practical way the effective working relationships with the United Nations•
Steps have already been taken to arrange for reciprocal representation at
certain meetings and it is our hope that these steps will be continued* The
Fund believes that detailed discussions should take place regarding the
avoidance of duplication in the collection and analysis of statistical
information and is prepared to accept responsibility for the statistics within
its special sphere while recognizing the United Nations as the central a.gency
for the collection and analysis of statistics serving the general purposes
of international organizations• The Fund is prepared to continue the consultations which, have already been negotiated with the United Nations concerning
the recruitment and employment of staff including conditions of service,
salary scales and allowances, staff regulations and rules etc*, with a view
to securing as much uniformity in these matters as is practical* In general
the Fund is prepared to collaborate with the United Nations to achieve tfre
common purposes of the two organizations through such consultations and
arrangements as seem necessary from time to time to the appropriate
authorities of tho United Nations and the International Monetary Fund*
CONFIDENTIAL
CONFIDENTIAL
C~iv
If, in the course of time, it appears desirable to the appropriate
authorities of the two institutions to place their relationship on a more
formal and legalistic basis, the Fund will, of course, be prepared to give
renewed consideration to this question* For the reasons indicated however,
it would appear to us that for the time being a more expedient course is to
concentrate on the working relationships and not attempt to negotiate a
legal contract*
Yours very truly,
Camille Gutt
Managing Director
llr* Trygve H e ,
Secretary General,
United Nations,
Lake Success, New York
CONFIDENTIAL
CONFIDENTIAL
National Advisory Council
Document Ncu^ 216
APPENDIX D
In Resolutions 5, 6 and 7 the Board of Governors, at their Inaugural
Meeting, requested interpretations of the Articles of Agreement by the
Executive Directors* Pursuant to these Resolutions, the following interpretations are submitted:
1 # On Fundamental Disequilibrium, presented by the Governor of the
United Kingdom*
In Resolution No* 5 of the Inaugural Meeting the Board of Governors
requested an interpretation of Articles of Agreement as to Question of
Fundamental Disequilibrium* The Resolution reads as follows:
Resolved:
That the Executive Directors of the International Monetary Fund
are invited, at the request of the Governor for the United Kingdom*
pursuant to Article XVIII(a), to interpret Article IV, Section 5(f),
as to whether, having regard to the intention of the Government of the
United Kingdom to maintain f a l l employment and to the texms of
Article I ( i i ) and (v) of the Articles of Agreement, steps necessary to
protect a member from unemployment of a chronic or persistent character,
arising from pressure on i t s balance of payments, shall be measures
necessary to correct a fundamental disequilibrium*
In accordance with Article XVIII of the Articles of Agreement, the
Executive Board made the following interpretation on
*
2* On the Use of the Fund's Resources, presented by the Governor
for the United States*
In Resolution No# 6 of the Inaugural Meeting the Board of Governors
requested an interpretation of Articles of Agreement as to Authority of
Fund to Use i t s Resources* The Resolution reads as follows:
Resolved:
That the Executive Directors of the International Monetary Fund
are invited, at the request of the Governor for the United States of
America, to interpret the Articles of Agreement, pursuant to Article XVIJI(ia<),
as to whether the authority of the Fund to use i t s resources extends beyorid
current monetary stabilization operations to afford temporary assistance to
members in connection with seasonal, cyclical and emergency fluctuations in
the balance of payments of any member for current transactions, and whether
the Fund has authority to use i t s resources to provide f a c i l i t i e s for
relief, reconstruction, or armaments, or to meet a large or sustained ou1>flow of capital on the part of any menber*
In accordance with Article XVIII of the Articles of Agreement, the
Executive Board made the following interpretation on
*
CONFIDENTIAL
CONFIDENTIAL
3» On the Appointment of an Executive Director, presented by the
Governor for India#
In Resolution No* 7 of the Inaugural Meeting the Board of Governors
requested an interpretation of Articles of Agreement as to Appointment of
Executive Director* The Resolution reads as follows:
Resolved;
That the following point of interpretation raised by the
Governor for India in regard to Article XII, Section 3(b)l and
Section 3(f) be referred to the Executive Directors for their
decision in pursuance of Article XVIIl(a) of the Articles of the
International Monetary Fund namely:
That with reference to the Ad Hoc Committee *s report on
the position of the Executive Director for India adopted
by your Governors at their meeting on the 15th of March
and in view of the inconsistency between Section 3(b)l and
Section 3(f) of Article XII that these sections be interpreted to mean that any member having one of the five largest
quotas at the date of a regular election or at any date between regular elections shall be entitled to appoint an
Executive Director who shall hold office until the next
regular election without prejudice to the right of a subsequently admitted member to appoint a Director if it has
one of the £Lve largest quotas#w
On .May B$ the Executive Board took tte following action:
11
It was unanimously agreed that Sections 3(b)l and 3(f) of
Article XII should be interpreted to mean that any member having
oriQ of the five largest quotas at the date of the regular election
or iat any date between regular elections shall be entitled to appoint
an Executive Director who will hold office until the next regular
election without prejudice to the right of a subsequently admitted
mejaber to appoint a Director if it has one of the five largest quotastfI
CONJTDENTIAIi
APPENDIX E
National Advisory Council
Document No* 216
Report to the Board of Governors
Concerning Financial Statements
In accordance with Section 20 of the By-Laws I am submitting,
on behalf of the Executive Directors, the following Statement of
Receipts and Payments for the International Monetaiy Fund from its
inception to June 30, 1946« This statement is for the consideration
of the Board of Governors at its annual meeting in September*
The accounts have been audited by Mr* C* M # Powell, the Assistant
Comptroller*
Since operations have not yet commenced, the financial presentation
which is being made at this time is limited to the receipts from member
countries as provided in Section 2(d) of Article XX of the Fund Agreement
and to payments for administrative expenses•
For the further information of the Governors a similar statement of
receipts and expenditures for the months of July and August 1946 has beep,
prepared*
/•/
Camille Gutt
Managing Director
CONFIDENTIAL
National Advisory Council
Document No.' 216
Appendix E
CONFIDENTIAL
INTERNATIONAL MONETARY FUND
Statement of R e c e i p t s and Payments from i n c e p t i o n t o 30 June 1946
•»
Receipts
U#S* $
Member Countries
for Meeting ActeiiBK
i s t r a t i v e Expenses
*
Paflftents
U«S# $
0.00 1* Personal Services
Salaries and Wages $47,060*80
1,000*00
Expense Allowances
2, Travel
Travel on orders
Removal Travel
4,335.26
341*95
3,993.31
68.00
3* freight
Freight on Personal
Effects
68.00
Um Communication
Postage
Telephone
Telegraph
5* Rents and Utilities
Rents, Maintenance
and Building Alterations
48,060,80
724.44
247.00
385.98
91.46
6,874*00
6,874*00
6# Books and Printing
2,011,58
Books, Nev/spapers
and Periodicals
4.00
Printing and Binding 2,007*58
7* Supplies and Equipment
Expendable Supplies 1,470*34
Office Equipment
33*50
Office Furnishings
3,160*58
8*' Miscellaneous
4,664.42
-0-
9*1 Pension Provisions
Total 1 to 9
66,738*50
! 0 t Meeting of Governors
30,643*38
11# Suspense Account
~ 308*53
Total 1 to 11
Balance carried forward
737.250.00
it
64O«176»65
1737,250*00
Remarks
1* Net receipts in Suspense Account made up as follows:
Taxes Yftthheld
Less: Potty Cash Imprest Fund
$ 63#62
Advances against traveling
Expenses
465*80
Not Receipts
2* Cash balance deposited in following banks:
Federal Reserve Bank df New York
Riggs National Bank of Washington
Balance
3* Obligations outstanding on 30 June 1946:
* Office Supplies and Equipment
Alterations to office building
837*95
529+42
$308*53
618,957,40
21.219^25
640,176465
% 54,000*00
9^000»00
I 63,000.00
4 # Subscriptions from Member Countries exclude the
sum of sv2,5OO;OO due from Peru, vdiich amount
•was not credited by the Federal Reserve Bank
/ s / C»M* Powell
http://fraser.stlouisfed.org/
of
New
York
until
July
1,
1946
Assistant
Comptroller
f
Federal Reserve Bank of St. Louis
National Advisory c o u n c i l
Document No« 216
CffllFIDENTIAI,
Appendix B
*^
Statement of Receipts and Payments for
Receipts
U«S«C«B
July and August
Payments
1946.'
U.S.' #
Balance forward $640,176f65 !• Personal Services
from June 30, 194.6
Salaries arid Wages
Expense Allowance
Subscription from 2,5OO«OO
member countries
2 / Travel
for meeting admini-*
Travel on orders
strative expenses«*
Removal Trayol
$74,133.17
$73,133.17
1,000.00
4,073.62
1,650,07
2,423.55
3m Freight
Freight on Official
Effects
Frei^at on Personal
Effects
47.55
7.95
39.60
4*: Comnunication
Postage
Telephone
Telegraph
1,002.07
593.00147.86
261.21
5*. Rents and Utilities
Rents, Maintenance and
Building Alterations 8,722*51
6* Books and Printing
Books, Newspapers and
Periodicals
Printing and Binding
264.56*
109 .16
155 .40
7* Supplies and Eauipmeni
Expendable Sppplies
Office Equipment
Office Furnishings
8*722*51'
54,144.16'
758.03
7,341.03
46,045.10
8. Miscellaneous
-0-
9. Pension Provisions
-0-
Total 1 to 9
$142,387.64
10..Hooting": of Governors
5,881.38
11. Suspense Account
2,483.53
Total 1 to 11
$150,753.05
Balance Carried Forward
491,923.60
$642,676.65
8642,676.65
Remarks u
1. Advances outstanding in Suspense Account;
Petty Cash Imprest
Advances re Travel
2,' Cash balance deposited in folloiwing banks:
Federal Reserve Bank of New York
Riggs National Bank of Washington
3« Obligations outstanding oh 31 August 1946:
Office Supplies and Equipment
Salaries and wages from 25 August
(last pay date) to 31 August
CONFIDENTIAL
11,500.00
675.00
$471,457.40
20.466.20
$491.923.60
$ 27,100.00
12.000.00
$ 39,100.00
/s/ C M . Powell
Assistant Comptroller
CONFIDENTiAL
F-i
National Advisory Cpuflcil
Document No« 216
APPENDIX F
Administrative Budget
There is presented below r£he administrative accounts for the latest month
available, August 1946*
As explained in the body of the report, it is not possible to present an
annual administrative budget i|i the present stage of the Fund's organization*
The purpose of this table is therefore merely to give the latest available
information concerning the Fund!s administrative expenses*
Statement of Receipts and Payments for August 1946
Receipts
-
U*S# $
Payments
1*
U.S. $
Personal Services
Salaries and Wages
141,537.31
$41,537.31
2« Travel
Travel on orders
Removal Travel
3.
2,409.16
629.31
1,779.85
Freight
Freight on Official
Effects
Freight on Personal
Effects
25.5S
7.95
17.63
4.. Communication
Postage
Telephone
Telegraph
637.10
500.00
l2.06Cr
149.16
5*,. Rents and Utilities
Rents, Maintenance and
Building Alterations
6* B ooks and Printing
Books, Newspapers and
Periodicals
Printing and Binding
7* Supplies and Materials
Expendable Supplies
Office Equipment
Office Furnishings
8,722*51
8,722*51
213*70
66*55
147*15
50,332*22
592*96
4*057*63
45,681*63
8 f Miscellaneous
<- $0 *~
9* Pension Provisions
- 0—
Total 1 to 9
$103,877*58
10* Meeting of Governors
4,541# 88
11* Suspense Account
869*50
Total 1 to 11
$109,288*96
Balance Carried Forward
$601,212.56
Remarks
2* Advances outstanding in Suspense Account:
Pfetty Cash Imprest
$
Advances re Travel
$
1,500*00
675*00
2,175*00
2* Cash balance deposited in following banks:
Federal Reserve Bank of New York
$ 471,457*40
Riggs NationalBank of Washington
20^466*20
$ 491.923*60
CONFIDENTIA!
491,923*1
National Advisory Co*uncil
Document Ho. 216
CONFIDENTIAL
APPENDIX G
Changes of Governors and Executive Directors
1* Governors
Changes in the composition of the Board of Governors since the
Inaugural Meeting have been as follows:
Hugh Dalton succeeded the late Lord Keynes as Governor for
the United Kingdom April 30, 1946#
John ¥• Snyder succeeded Fred Vinson as Governor for the
United States July 2, 1946*
Dr# Nicholas B« Kaskarelis, Provisional Alternate Governor
succeeded Alexander Loverdos, Alternate Governor for Greece
August 31f 1946*
N # Sundaresan, Alternate Governor succeeded Sir A# Rainaswami
Mudaliar, Temporary Alternate Governor for India April 22, 1946*
Sir James Grigg succeeded R* H« Brand as Alternate Governor
for United Kingdom July 4> l?46o
Pederico Vides S# appointed as Governor for El Salvador
June 27, 1946#
Einar Dige appointed as Alternate Governor for Denmark
March 30, 1946«
T
Manuel Mel4ndez V # appointed as Alternate Governor for E3.
Salvador June 27, 1946•'
Camille Gutt vacated the Belgian Governorship May 6, 1946«
Franklin Antezana Paz vacated the Bolivian Governorship
August 14* 1946*
Jaime Hernandez vacated the Philippine Commonwealth Govr
ernorship July 26, 1946*
Luis Ocampo Crespo vacated the Bolivian Alternate Governorship August 14, 1946*
CarJLos P# Romulo vacated the Philippine Commonwealth
Alternate Governorship July 26, 1946#
CONHBPTIAI,
G-ii
CONFIDENTIAL
-2Composition of the Board of Governors on September 1 was therefore, as follows:
Country
Governor
Alternate
Governor
Belgium
vacant
Maurice Frere
Bolivia
vacant
vacant
Brazil
Francisco Alves dos
Santos-Filho
Edgard de Mello *
Canada
James L« Ilsley
Graham F# Towers
Chile
Arturo Maschke
Luis Davila
China
0. K# Yui
Te-Mou Hsi
Colombia
Emilio Toro
vacant
Costa Rica
Julio Pena Korua
Angel Coronas Guardia
Cuba
Joaquin E» Meyer
vacant
Chechoslovakia
Jan Viktor Mladek
Julius Pazman
Denmark
Carl Valdemar Bramsnaes Einar Dige
Dominican Republic
Jesus Maria Troncoso
Jose Calzada
Ecuador
Esteban F* Carbo
vacant
Egy£t
Ahmed Zaki Bey Saad
Ahmed Selim
El Salvador
Federico Vides S #
Manuel Melendez V«
Ethiopia
George A« Blowers
vacant
France
Pierre Mendes-France
Emmanuel Monick
Greece
Xenophon Zolotas
Dr# Nicholas B«
Kaskarelis
Guatemala
Manuel Noriega Morales
Leonidas Acevedo
Honduras
Julian R# Caceres
Jorge Fidel Duron
Iceland
Asereir Ascfeirsson
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\A
CONFIDENTIAL
«i~ Hi.. 111
Country
Governor
Alternate
Governor
India
Sir Chintainan Deshmukh
N • Sundaresan
Iran
A. H. Ebtehaj
Dr # Taglii Nassr
Iraq
Ali Jawdat
A# U. Gailani
Luxembourg
Pierre Dupong
Hugues Le Gallais
Mexico
Antonio Espinosa
de los Montoros
Luciano Wiechers
Netherlands
P* Iaeffcinck
A # Mm de Jong
Nicaragua
GuiHermo Sevilla
Sacasa
vacant
Norway-
Gunnar Jahn
Ole Colbjornsen
Panama
Dr# Joaquin Jose
Vallarino
vacant
Paraguay-
Harmodio Gonzales
Ruben Benitez
Peru
Francisco Tudela Varela Emilio Barreto
Philippine Commonwealth
vacant
vacant
Poland
Edward Drozniak
Janus z Zoltovrski
Union of South Africa
Jan Hendrik Hoflneyr
U. H # de Kock
United Kingdom
Hugh Dalton
Sir James Grigg
United States
John W # Snyder
William L f Clayton
Uruguay
vacant
Hugo Garcia
Yugoslavia
Lavoslav Dolinsek
Ivan Randic
CONFIDEOTIAL
CONFIDENTIAL
G-lv.
2» Executive Directors
Changes in the composition of the Executive Board since the First
Meeting have been as follows:
Jean de Largentaye was appointed Executive Director by
France July 1, 1946 succeeding Pierre Mendes-France*
Hubert Ansiaux was elected Executive Director by Belgium,
Iceland, and Luxembourg June 19> 1946 succeeding Camille Gutt
who resigned May 6, 1946*
Ernest de Selliers was appointed Alternate Executive Director to Mr* Ansiaux June 24, 1946 succeeding Louis Goffin*
B# K» Madan was appointed Alternate Executive Director to
Mr* Joshi August 10, 1946 succeeding N* Sundaresan#
George P# Luthringer was appointed Alternate Executive
Director to Mr« White June 17, 1946#
Mihailo Kolovic was appointed Alternate
to Mr# Mladek June 27, 1946# Alois Krai was
visional Alternate Executive Director to Mr*
1946 succeeding Zygmunt KarpinskL who served
nate from May 29, 1946 to July 24, 1946*
Executive Director
appointed ProMladek August 15,
as Tempory Alter-
Mahmoud Saleh El-Falaki was appointed Alternate Executive
Director to Mr# Saad September 5, 1946*
Composition of the Executive Board on September 1 was therefore, as follows:
Chairman
Executive Director
CONFIDENTIAL
Camille Gutt (Belgium)
Alternate Executive Director
Herbert Ansiaux
(Belgium)
Ernest de Selliers
(Belgium)
G # L # F# Bolton
(United Kingdom)
A f P# GraffteyHSmith
(United Kingdom)
G# W # J# Bruins
(Netherlands)
D# Crena de Iongh
(Netherlands)
Jean de Largentaye
(France)
vacant
Rodrigo Gomex
(Mexico)
Raul Martinex-Ostos
(Mexico)
CONFIDENTIAL
Executive Director (Cont f d # )
Alternate Executive Director
Jangannath Vishwanath Joshi
(India)
lee-Chun Koo
(China)
B# K# Madan
(India)
vacant
J.V. Mladek
(C zechoslovakia)
Louis Rasminsky
(Canada)
ELhailo Kolovic
(Yugoslavia)
vacant
Ahmed Zaki Bey Saad
(Egypt)
Francisco Alves dos
Santos-Filho
(Brazil)
M* S. El-FalakL
(Egypt)
Octavio Bulhoes
(Brazil)
Harry D* White
(United States
of America)
George F» Luthringer
(United States of
America)
CONFIDENTIAL
fr-v
3 . Financial Statement
Item III Financial Statement
of Fund"
Agenda
(Decision on approval is by majority of the total vote cast.)
Budget and Audits
(Section 20 of the ?jr-Laws)
The Executive Directors shall instruct the Managing Director
to prepare an annual administrative budget to be presented to
them for approval* The budget so approved shall be incorporated
in the annual report to be presented to the Board of Governors at
their annual meeting*
The Executive Directors shall have an audit of the accounts
of the Fund made at least once each year and on the basis of this
audit shall submit a balance sheet and a statement of operations
of the Fund to the Board of Governors to be considered by them at
their annual meeting*
MEMORANDUM FOR THE SECRETARY
Subject: Annual Report of the SsecutiveJDirectors
of the International Monetary "
September 1946.
The salierit points of the Annual Report of the Executive
Pirectors of the International Monetary Fund to the Boarci of
Governors are summarized as follows:
1*
Financial Statement and Administrative Budget
Since Fund operations have not yet commenced, subscriptions
from member countries for meeting administrative expenses of
l/lOO percent of their quotas represent the sole receipts, and
administrative expenses represent the sole payments. At the
present atage of the Fund's organization it is impossible to
present an annual administrative budget* The following is a
summary of administrative receipts and payments from the Fimd's
inception through August 1946:
Member Countries1 Subscriptions
for Administrative Expenses
4
Administrative Expenses
Balance Carried Forward
739>750.00
- 247 5 826 *40
$
491,923.60
2*
Fund Status
(a) Applications foy Membership T Italy, Lebanon, y $
and Turkey* The recommendations of the Executive Directors to
the Board of Governors (Appendix A) were not attached to the
report*
(b) Applications for Quota Revisions - Paraguay from
$2 million to $5 million* France has also requested a revision
in quota* The recommendations of the Executive Directory to the
Board of Governors (Appendix B) were not attached to the report*
(c) Relations with Other International Organizations?
(l) International Bank for Reconstruction and Developgent* The Funcl has collaborated closely with the International
Bankj such coordination was achieved through joint committees of
the two Boards of Executive Directors*
(2) IJNRRA and FAQ. Fund was represented at the UNRRA
conference held in Geneva in August, and at the FAO conference
held in Copenhagen in September.
(3) UN» Fund was represented at confere$ces of
Economic and Social Council of UN. Relations will undoubtedly
grow stronger, but a formal agreement clarifying TM^Fund relationship was rejected for the time being•
3,
Furnd Policies
(a) Rules and Regulations, The Executive Directors prepared
draft, rules and regulations pertaining to procedural as well as to
policy natters for review by the 3oard of Governors •
(b) Interpretations• The Executive Directors are charged
wi.th interpretations of the Fund Agreement. The following three
interpretations were requested:
(1) By the Governor for the U.K., an interpretation of
"Fundamental Disequilibrium". No interpretation has yet
been issued.
(2) By the Governor for the U f S., an interpretation of
of the Fund's Resources" • Interpretation issued is
not contained in report.
(3) By thQ Governor for India, an interpretation of
"Appointment pf an Executive Pirector".* The Executive
Directors ruled that "one of the five largest quotas at
the date of the regular election or at any date between
regular elections shall be entitled to appoint ar*
Executive Director who will hold office until the next
regular election without prejudice to the right of a
subsequently admitted member to appoint a Director if
it has one of the five largest quotas."
4«
Fund Operations
(a) Establishment of Initial par Values of Currencies.
All member countries fyave be'dxl*. officially requested' td <&iftmujiij?ate
to the Fund the initial par values pf their currencies. It was
feared that unless international financial consultation and cooperation were reached during the period of reconstruction, the
present emergency controls may again degenerate into econojnic
warfare. The Executive Directors decided therefore in spite of
obvious difficulties to initiate now discussions
satisfactory exchange rates at this time.
-35#-
Internati onal Monetary Review
The report cites the broad economic and financial problems
confronting the postwar world • It emphasizes the need for international efforts to free excliange transactions which, in turn,
will result in greater exchange rate stability. But the most
important condition for stability of exchange rates is the maintenance of high pro diction levels throughout the world. International investment will be required to restore and e3q>and
production. International capital movements, in turn, depend
ultimately on expansion of world trade* Checks of current
world-wide inflationary tendencies will help facilitate world
trade•
•1 O
«
•
•o o
Item IV
of Fund
Agenda
Applications for Membership of Italy, Lebanon, Syria, and Turkey
(Deoision on approval is by majority of the total votes cast # )
Application for Membership
(Section 21 of the §y-Laws)
Subject to any special provisions that may be made for'
countries listed in Schedule A of the Articles of Agreement, any
country may apply for membership in the Fund by filing with the
Fund on application setting forth all relevant facts*
YJhen submitting an application to the Board of Governors, the
Executive Directors after consultation with the applicant country
shall recommend to the Board the amount of the quota, the form
of payment, the parity of the currency, conditions regarding exchange restrictions, and such other conditions as, in the opinion
of the Executive Directors, the Board of Governors may wish to
prescribe#
Acceptance of Membership by Schedule A countries adopted by
the Board of Governors at Savannah Conference March lU, 19U6 #
(Resolution No• 9 of the Savannah Conference).
That membership in the International Monetary Fund is approved under Article II, Section 2 of the Articles of Agreement
for all countries listed in Schedule A whose government accept
membership in accordance with the provisions of Article XX until
December 31, 19h6.
Applications for Membership on Behalf of Lebanon, Italy,
Syria, and Turkey
(Actions by the Board at Savannah)
The Board of Governors received applications for membership
in the Fund from the Governments of Lebanon, Italy, and Syria at
the third session, March 13, 19U6 # A similar application from the
Government of Turkey was received at the fourth session, March lU,
19U6* The applications were referred to the Executive Directors
for consideration and recommendations,
A communication from the Governor for Greece, supported by
the Governor for Yugoslavia, questioned whether Italy, as a
former enemy country which has not yet signed a peace treaty,
should be entitled to apply for' membership* The Board of Governors
determined at the sixth session, March 16, 19U6, that the communica-*
tion should be held in the records for consideration when Italy*s
application is again before the Board, but that in the meantime
the Executive Directors would not be precluded from considering
technical problems incident to the application*
Second Report of the Committee on Membership (Savannah Conference
'
March 13, 19h6)
The resolution of the United States Delegation as amended by the
Delegation of Czechoslovakia readst
"The Board of Governors of the International Monetary Fund
Resolves:
That membership in the International Monetary Fund is approved
under Article II, Section 2 of the Articles of Agreement for all
countries listed in Schedule A whose governments accept membership in
accordance with the provisions of Article XX until December 31, 19U6
(original wording,••.during the period of six months following the
date of this resolution)"«
The report was approved and adopted by the Board of Governors at
the fourth session, March lU, 19k6*
Membership
(Article II, Articles of Agreement of the Fund)
Original members
(Section 1 of the By-Laws)
The original members of the Fund shall be those of the countries
represented at the United Nations Monetary and Financial Conference
whose governments accept membership before the date specified in
Article XX, Section 2(e) #
Other members
(Section 2 of the ^y-Laws)
Membership shall be open to the governments of other countries
at such times and in accordance with such terms as may be prescribed
by the Fund*
Subject: Established y^S* Pqsfl.tj.cffl. qj\ Afljftj^sion of Syrlaf Lebanon, Turkey
and Italv to the ITund and the Bank
At its meeting of July 3, 1946 the National Advisory Council took the
following action:
The National Advisory Council advises the United States
Executive Directors that the United States has no objection to the delaying of final action on the applications
of Syria, Lebanon, Turkey and Italy until the September
meetings of the Boards of Governors*
The National Advisory Council advises the United States
Executive Directors that the United States has no special
terms and conditions which it desires to have attached to
the membership of Turkey, Syria, Lebanon and Italy,
At the Savannah Conference Mr, Clayton supported the application of Syria,
Lebanon and Italy on March .13, 1946 and the application of Turkey on March 14,
1946.
1,
Turkey
As a condition of membership for Turkey it has been suggested that Turkey
should take all necessary steps to adhere to Bretton Woods Resolution VI and
the Gold Declaration of February 22, 1944. According to cable #1030, dated
September 24, from the American Embassy in Ankara, the Turks agree,with reservations, to adhere to Resolution VI and the Gold Declaration. At the Council
meeting of $eptember 27, the State Department assured the U.S. Executive
Directors on the Fund and Bank that Turkey1s statement of willingness to adhere
to Resolution VI and the Gold Declaration was satisfactory and, therefore,
Turkey's admission should be favored.
In the draft report of the Executive Directors of
of Governors, dated September 23, 1946, $43 million is
subscription to the Bank, The same amount is likewise
the Executive Directors of the Fund for Turkey's quota
the Bank to the Boards
recommended as Turkey1s
to be recommended by
in the Fund,
2. .
In a letter dated September 34 1JQ the §ecr$tary of the MAC the U,Sf Executive director stated:
W i t h respect to the application of Italy, ? shp\iW like to
point out that it has been possible to exclude ail reference
to the peace treaty issue raised at Savannah by the Governors
fo^ Greece and Yugoslavia. Nevertheless, I believe %t essential
that the U.S. Governor be provided by the Department of ?tate
with a well documented statement regarding the competence of the
Italian Government to accept membership in an international body.*?
The State Department has informed the Council that it is preparing the statement suggested by Mr, Collado*
- 2 In the draft report of the Executive Directors of the Bank to the Boards
of Governors, dated September 23, 1946, $180 million is recommended as Italy's
subscription to the Bank. The same amount is likewise to "be recommended by
the Executive Directors of the Fund for Italy's quota in the Fund.
3,
Syria
In the draft report of the Executive Directors of the Bank to the Boards
of Governors, dated September 23, 1946, $6.5 million is recommended as Syria1s
subscription to the Bank. The samp amount is likewise to be recommended by
the Executive Directors of the Fund for Syria's quota in the Fund*
4*
Lebanon
In the draft report of the Executive Directors of the Ba#k to the Boards
of Governors, dated September 23, 1946, $4,5 million is recommended as Lebanon's
subscription to the Bank. The same amount is likewise to be recommended by the
Executive Directors of the Fund for Lebanon's quota in the Fund.
5. Fequests for
Revision of Quota
Item V
of Fund
Agenda
Request for Revision of Quota
(Decision is by four-fifths majority of total voting power. U.S.
'K^s effective veto)*
Request by Paraguay for Upward Revision of Quota
{Actions by Board of Goyernors at Savannah Conference)
The Government of Paraguay presented a request for an increase in its quota to $5,000^000* At the fifth session, March l£,
19U6, the Board referred the request to the Executive Directors
"with the request that they report as promptly as possible to the
Board of Governors and upon receipt of that report by the Board of
Governors, the Board of Governors shall take a vote on it promptly«
Adjustment of quotas
(Article III, Section 2!,. of the Articles
of Agreement)
The Fund shall at intervals of five years review, and if it
deems it appropriate propose an adjustment of, the quotas of the
members* It may also, if it thinks fit, consider at any other
time the adjustment of any particular quota at the request of the
member concernedm A four-fifths majority of the total voting
power shall be required for any change in quotas and no quota
shall be changed without the consejit of the member concerned*
Payments when quotas are changed
"
(Article III, Section k of
the Articles of Agreement)
(a) Each member which consents to ah increase in its quota
shall, within thirty days after the date of its. consent, pay to
the Fund twenty-five percent of the increase in gold 'and the
balance in its own currency* If ^ however, on the date when the
member consents to am increase^ its monetary reserves are less
than its new quota, the Fund may reduce the proportion of the in-*
crease to be paid in gold* (b) If a member consents to a reduction in its quota, the Fund shall, within thirty days after the
date of the consent, pay to the member an amount equal to the reduction. The payment shall be made in the member's currency and
in such amount ?f gold as may be necessary to prevent reducing the
Fund*s holdings of the currency below seventy-five percent of the
new quota.
I
a
0)
ft-!
Item VI
of Fund
Agenda'
Rules and Regulations
——----------------(Decision is by majority of the .total votes cast*)
Rules and Regulations
(Section 16 of the 3y-Laws)
The Executive Directors are authorized by the Board of
Governors to adopt such rules and regulations, including financial
regulations, as may be necessary or appropriate to conduct the
business of the Fund* Any rules and regulations so adopted, and
any amendments thereof, shall be subject to review by the Board
of Governors at their next annual meeting•
Articles of Agreement
Article XII, Section 2(g) the Board of Governors, and the
Executive Directors to the extent authorized, may adopt such
rules and regulations as may be necessary or appropriate to cor>duct the business of the Fund*
MEMORANDUM FOR THE SECRETARY
Subject: Certain Problems Raised by the Proposed Rules
and Regulations of the International Monetary
Fund.
1 # ' For the most part, the proposed rules and regulations
contain the usual detailed implementation of the more general
prpvisions contained in the Articles of Agreement* No attempt
has been made in this memorandum to pass upon the appropriate^
ness of the language for the rules and regulations or to check
them carefully against the Articles of Agreement for consistency.
It is assumed that the interests of the U # S* Government have
been adequately safeguarded by the U # S # Executive Director in
these respects.. This memorandum merely attempts to call attention to certain parts of the Rules and Regulations which involve
important policy considerations or require drafting clarification%
2. The most important problem raised by the proposed Rules
a*nd Regulations is that involved in Section D, "Provisions for
Security*1* In view of the strict nature of these provisions,
the U* S» Executive Director may be placed in the position of
being unable to inform, consult with, or seek policy guidance
from the National Advisoiy Council with respect to major prob-^.
lpus arising in the administration of the Fund^ The fundamental
polioy issue involved is the extent to which the Fund, because
of the security provisions, will act on major problems of policy
"Without prior reference by the Executive Directors to their own
governments.; You will recall that oh September 10 and September
17 this question was raised and discussed in the National Advisory
Council; The sense of the discussion was that under the Bretton
Woods Agreements Act, the U* S. was obligated to take the position
that its representative on the Fund could not be bound to a
secrecy which would prevent him* from seeking policy guidance from
thq National Advisory Council*'
3i Your attention is called to the following additional
problems involved in the proposed rules and regulations•
(a,) Section 1-3 of the proposed Rules and Regulations
provides that "Requests for the purchase of foreign
exchange in accordance with Article V, Section 3*
shall be dealt with in priority of their reception
by the Fund . • • ft There is no indication in the
Rules and Regulations that any standards have been
or will be established governing the granting or
denying such requests •
If such requests are to be granted automatically
so long as the member meets the conditions of Article V,
Section 3, the provision for dealing with requests on
a priority of reception basis may be an arbitrary and
an unrealistic method of handling the problem. Such
a situation i/vould mean that the Executive Directors
of the Fund would be unable to exercise discretion
ir* the sale of currency to a member until the currency
was declared scarce in accordance with Article VII,
Section 3(a).
(b) Section N^4 provides that "Each Executive Director
shall make arrangements with the members he represents, with a view to having them deposit with the
#W*d copies of all existing international agreements
of a financial nature entered into with other members
or with non-members, and all such agreements entered
into in the future #"
Under this provision the United States may have
tQ file? with the Fund certsin financial agreements
which up to this time have been handled as classified
materials However, it is felt that any disadvantages
to this government in making such agreements available
to ihe Fund are outweighed by advantages to this
Government in having other nations conform with this
provision*
CONFIDENTIAL
National Advisory Council
Document Not 217
September 20,
NATIONAL ADVISORY COUNCIL
ON
INTERNA.TIONJiL MONETARY ABD FINANCIAL PROBIBMS
MEMORANDA Tot National Advisory Council
From:
Secretary of the Council
Subject: Rules and Regulations of the International
Monetary Fund (Revised draft dated August 13,
U6)
Attached is a copy of the proposed Rules and
Regulations of the International Monetary Fund which
has been forvrarded "by the United States Executive
Director and is transmitted for the information of
Council members»
CONFIDENTIAL
Revised Draft
August 13, 1946
~ ~ Scope; of Rules and Regulations
A-l 1
These Rules and Regulations supplement the Articles of
2 Agreement and the §y~Laws adopted by the Board of Governor?*
3 They are not intended to replace any provision of either the
4 Articles of Agreement or the By-laws* The Rules and Regulations
5 adopted by the Executive Directors (for subsequent review by the
6 Board of Governors) attempt to provide such operating rules.,
7
procedures, regulations and interpretation as are necessary
8 and desirable to carry out the purposes and powers contained in
9
the Articles of Agreement, as supplemented by the By~Laws* If
10 any provision in the Rules and Regulations is found to be in
11 conflict with any provision in the Articles of Agreement or in
12 the By-Laws, the Articles of Agreement and By-Laws shall prevail
13 and $n appropriate amendment should be made to these Rules and
14 Regulations.
Ar2 15
Additions t o , and changes of, the Rules and Regulations
16 will be made as experience brings to light new problems or
17 suggests modifications in procedures already adopted•
Revised Draft
August 13, 1946
B - Terms5 Definitions and Symbols
B-l
1
2
B^2
3
Executive Director, except where otherwise specified,
shall include the Alternate•
Executive Board refers to the Executive Directors and
the Chairman as a body.
Agenda ordinarily refers to both the list of items to
B-3
B^
6
be considered at a meeting and the supplementary (Jpcuments
7
pertinent thereto*
8
9
*£
10
Member refers to the governments which have been admitted
to membership in the Fund*
Member country refers to the geographical territories on
11
behalf of which the member has.accepted membership and those
12
persons living therein as well as to the member.
B^6 13
Fund refers to the Board of Governors, the Executive
Board, and the entire staff of the International Monetary Fund*
15
Whether the whole is meant or any of the parts, depends upon the
16
context or the decision of the Executive Boards
Br-7 17
18
19
20
21
B_r8 22
23
BrrlO 24
25
AA refers to the Articles of Agreement of the Internatipnal
Monetary Fund.
BL refers to the By-Laws of the International Monetary Fund
as adopted by the Board of Governors*
RR refers to these Rules and Regulations*
Gold is defined in EBD No,
Currency refers to
.
•
Executive Session refers to a Meeting of the Executive
Direqtors in which no person is present except the Executive
- 2 26
Directors, Managing Director, and, with the approval of the
27
Board granted separately for each Executive Session, the Secretary
28
of the Board.
B-ll 29
30
B-12 31
General Order refers to an order issued by the Managing
Director with the approval of the Executive Board•
Administrative Order refers to an order issued by the
32
Managing Director pursuant to a general authorization of the
33
Executive Board.
Revised Draft
August 13, 1946
C - Meetings of the Executive Directors
MEETINGS
C-l
1
Meetings of the Executive Directors shall be called by the
2 Chairman as the business of the Fund may require. Except in
3 special circumstances the Chairman shall notify all Executive
4 Directors of meetings at least two work days in advance*
0~2
5
6
Q-3
7
The Chairman shall call a meeting at the request of any
Executive Director.
Except by consent of the Executive Directors present,
8 meetings shall be open to attendance only by Executive Directors,.
9 the Managing Director and such members of the secretariat as the
10 Chairman indicates*
C-4
11
The Executive Directors shall meet at the principal office
12 of the Fund unless it is decided that a particular meeting shall
13 be held elsewhere•
C-5
14
In the absence of the Managing Director, the Executive Director
15 selected by the Executive Beard shall act as Chairman of meetings.
16 Executive Directors shall retain their right to vote when serving
17 as acting Chairman.
AGENDA
fr-6 18
The Agenda for each meeting shall be prepared by the Managing
19 Director. The Agenda shall include any item requested by an
20 Executive Director.
- 2 O7
21
Except in special circumstances the Managing Director shall
22 notify Executive Directors of new items on the agenda at least
23 two full working days before their consideration in meetings.
24 Additional advance notice shall be given at the discretion of
25 the Managing Director before the consideration of new items of
26 especial importance which may require consultation with members
27 or the return to the seat of the Fund of Executive Directors who
28 are absent•
C-8
29
Matters not on the agenda for a meeting may be considered at
30 that meeting only by unanimous consent of the Executive Directors
31 presents
C-9
32
Any item of the agenda for a meeting, consideration of which
33 has not been completed at that meeting, shall, unless the Executive
34 Directors decide otherwise, be automatically included in the agenda
35 of the next meeting,
VOTING
C-10 36
The Chairman will ordinarily ascertain the sense of the
37 meeting in lieu of a formal vote. Any Executive Director may
38 require a formal vote to be taken with votes cast as prescribed
39 in Article XII, Section 3 (i).
Oil
40
There shall be no formal voting in committees and sub-
41 committees. The chairman of the committee or subcommittee shall
42 determine the sense of the meeting (including alternative points
43 of view) which shall be reported*
C-12 44
No Executive Director may vote at any meeting tey proxy or by
- 345 aiy other method than in person*
LANGUAGE
O13
46
The working language of the Fund will be English. The
47 discussion, documents and reports of meetings will ordinarily
48 be in English*
Speeches or papers presented in other language
49 shall be translated into English.
MINUTES
C-^14 50
Under the direction of the Managing Director, the Secretary-
Si shall be responsible for the preparation of a summary record of
52 proceedings of the Board.
fr-15 53
Verbatim records will be taken only if the Chairman, the
54 Board or an Executive Director so requests• In such case, the
55 Secretariat shall be given advance notice of the desire for
56 verbatim recording.
0-16
57
Draft minutes will be circulated to all Executive Directors
58 as quickly as possible after meetings. Unless corrections are
59 returned to the Secretary within the ensuing work day, the draft
60 minutes will be prepared in final form for approval at the next
61 meeting*
Draft No. 3
September U> 194-6
D - Provisions for Security
D-l
1
Executive Directors, the Managing Director and the staff
2 will have access to various types of confidential information
3 and are obligated to exercise the greatest care not to disclose
U
such information,; All information obtained under condition that
5 it be treated confidentially shall be made available only to
6
such persons as may be designated by the Executive Board or
7 the Managing Director*
D-2
8
It is the responsibility of the Managing Director to take
9
such steps as may be necessary to insure that the staff complies
10 fully with the provisions of this Section D»
11
It is essential that complete secrecy be maintained with
12 respect to the establishment of initial par values of the
13 currencies of members and with respect to impending or pro14- posed changes in exchange rates. The following classes of
l^ information, referred to hereafter as "secret exchange matters11,
16 must be restricted to persons designated from time to time by
17 the Executive Boards
18
(a) All matters pertaining to the level of
19
initial par values to be established under
20
Article XX, Section 4, and to the time when the
21
par-value of each currency will be established;
22
(b) Any proposal for a change in the par
23
value of a memberfs currency, the name of the
24
member proposing the change, the extent of the
- 2 25
.proposed change, and the time when a proposed change
26
may be effected j
27
(c) The views of any- Executive Director, the
28
Managing Director, or any member of the staff con-
29
cerning the adequacy of the par value of any
30
member's currency j
31
(d) All matters pertaining to uniform propor^
32
tionate changes in the par values of the currencies
of all members«
34
Persons authorized to attend executive sessions of the
35 Executive Board shall discuss ^secret exchange niatters1? only
36 among themselves unless they are authorized in specific pases
37 by the Executive Board in writing to discuss such information
38 with other specified persons• Such authorization shall
39 require the approval of three-fourths of the Executive
40 Directors qualified to vote at the meeting in which the
41 matter is considered, including the approval of the Executive
42 Director representing the member whose exchange matters are
43 under discussion*
DT-5
44
Members of the staff shall nqt discuss wsecreib exchange
4$ matters11 with other members of the staff or with any other
46 person unless speqifiq permission pf the Executive Board has
47 been obtained by the Managing Director.
R-6
48
Members of the staff shaljL be requested to work on problems
49 relating to !* secret exchange matters1* only with the specific
50 approval of the Executive #oard in each instance* The
- 351 Executive Board shall impose such conditions for the pre52 paration and submission of this type of work as it deems
53 advisable under the circumstances of each case.
D-7
54
Nothing in this Section D is intended to prevent the
55 preparation and necessary circulation within the Fund of
56 memoranda or reports dealing with the factual or analytical
57 presentation of material pertaining to the economic or
58 monetary situation in any country. Nor is it intended to
#
59 prohibit the description or presentation of views held out*60 side the Fund regarding a particular level of exchange rates.
D-8
61
Each formal communication from a member of a confidential
62 nature which deals with the establishment of the initial par
63 value of its currency or a change in the par value, shall be
64 addressed to the Chairman or Acting Chairman of the Executive
65 Board, directly or through the Executive Director who repre66 sents the member sending the communication* If any such
67 communication is in writing^ it shall be delivered personally
68 by a representative of the member*
D-»9
69
Nothing in the preceding paragraph shall preclude a
70 member from discussing any of these matters informally with
71 the Executive Board for the purpose of exchanging views, and
72 the same provisions with respect to security shall govern such
73 informal discussions as govern the formal communications*
D-10 74
When a mqiaber sends such a formal communication or
75 initiates such informal discussions, %% shall designate the
- 4 76
person or persons to whom the Executive Board, through its
77
representative or representatives, shall confine its
78
discussions*
D-ll 79
The provisions of this Section D sha£l be amplified and
80
modified as experience brings to light more effective means
81
pf assuring security*
82
(No provisions h$ve been drafted relating to discussions
83
initiated by representatives of members with individual
84
Executive Directors or the Chairman on a personal and
85
confidential ba§isf)
TENTATIVE DRAFT OF ADDITIONAL SECURITY PROVISIONS
Make the following changes in D - Provisions for Security:
(a) In D-lj line 3, delete the words "to exercise the greatest
care*fl
(b)- In D-4, line 35, after the word "unless", add a comma and
the words *!in specific cases/1 and in line % after the
word f*Boardft, add the words "in writing*"
II
The following sections are to be added to p - Provisions for Security;
(1) Each formal communication from a member of a confidential
nature which deals with the establishment of the initial
par value of its currency or a change in the par value,
shall be addressee! to the Chairman or Acting Chairman of
the Executive Board, directly pr through th§ Executive
Director who represents the member sending the communication*
If any such communication is in siting, it shall
bo delivered personally by a representative of the member,
(2) Nothing in the preceding paragraph shall preclude a member
from discussing any of these matters informally with the
E&c-cutive Board for the purpose of exchanging views, and
the same provisions with respect to security shall govern
such informal discussions as govern the formal communications •
(3) "When a member sends such a formal communication or
initiates such informal discussions, it shall designate
- 2 the person or persons to whom the Executive Board,
through its representative or representatives, shall
confine its discussions.
(4) Except -with the -agreement of the member concerned, no
disclosure whatever outside the Fund shall be made of
information relating to proposals for the establishment
of par values or changes in par values, to opinions of
members of the Executive Board with respect to such par
values- or changes or to opinions of any persons on the
staff with respect to the appropriateness of the par
value of any currency.
Ill
No provisions have been drafted relating to discussions
initiated by representatives of members with individual Executive
Directors or the Chairman on a personal and confidential basis*
Revised Draft
August 13, 1946
?L~ Applications for Membership and Quotas
E-l
E-2
1.
When a country applies for membership in the Fund, and
2
the application is placed before the Executive Board, the
3
Chairman shall announce a reasonable time to be allowed for
4
discussion and preliminary investigation by the Executive
5
Board before a decision is reached to proceed with the formal
6
investigation*
7
Fund may proceed to obtain all relevant information and discuss
8
with the applicant any matters relating to its application.
9
Any Executive Director may request such information to be added
If this decision is in the affirmative the
10
to the list requested of the applicant as in his opinion is
11
relevant to the decision to be made. The Executive Board shall
12
tL-in decide whether to submit an application for membership with
13
its views to the Board of Governors for a telegraphic vote or
14
hold the application until the next meeting of the Board of
15
Governors. (A.A. II-2j BL21)
16
When a country requests an adjustment of its quota, the
17
Executive Board, after consulting the member, shall submit a
18
written report on the request to the Board of Governors at its
19
next meeting* If the request is for an increase in the quota, and
20
the member is not obligated to pay 25 per cent of the increase in
21
gold, the report shall contain a recommendation on the amount to
22
be paid in gold*
(A.A.III-2 and 4)
- 2 E-3
23
At least one year prior to the time when a review of quotas
24
must be undertaken by the Fund, the Executive Board shall appoint
25
a committee to study the problem and to prepare a written report,
26
( M III-2)
Revised Draft
August 13, 1946
F - Subscriptions
F-l
F-2
F-3
F-4
1
2
New York, London, Shanghai, Paris, and Bombay. The earmarked
3
gold accounts of the Fund shall be held YriLth the depositories
4
designated by the members in whose territories they are located,
5
A member may pay its gold subscription to the Fund at one or
6
more of the specified gold depositories, within the terms of
7
Article XIII, Section 2. (AA XIII-2)
8
A member shall pay its currency subscription to the
9
Fund at the designated depository. Each member is authorized
10
to substitute in accordance with Article III, Section 5,
11
non-negotiable, non-interest bearing notes payable to the
12
Fund on demand for that part of the currency holdings of
13
the Fund which exceed 10 per cent of the member's quota, and
14
the depository shall hold such notes for the account of the
15
Fund* Such notes shall not be accepted until the Fund is
16
satisfied that they are in proper form and that their issue
17
has been authorized. (AA III-5)
18
The Executive Board may agree to alter the 10 per cent
19
requirement in the case of any member, should circumstances
20
in the opinion of the Executive Board warrant a different
21
percentage.
22
23
F-5
Gold depositories of the Fund shall be established in
24
The member is allowed 24 hours in which to replace any
sums necessary to maintain the specified minimum,
Any member wishing to make its initial gold payment
— 2—
25
in excess of the minimum shall be credited for the excess
26
at the parity price for gold.
Revised Draft
August 13, 1946
G - Determination and maintenance of
""" Par Values and Exchange Pates
&-1
G»-2
(3^3
Q-4
1
As soon as the Fund and a member have agreed on the
2
par value of the member!s currency, and of any separate
3
currencies of territories in respect of which it has accepted
4
membership in the Fund, the Executive Board shall decide on
5
the best method of notifying the members and the Fund shall
6
publish the agreed par value for the information of the public
7
within 48 hours after an hour agreed upon by the Executive
8
Board for specific currencies• Changes in par values of the
9
currencies of members shall be similarly published.(AA IV-5 and 9)
10
The members shall arrange through their fiscal agencies
11
that frequent and regular information as to the market rates
12
of currencies bought and sold in their territories is made
13
available to the Fund.
14
The Managing Director shall report to the Executive
15
Directors any case in which it appears to him that a member
16
is not fulfilling its obligations under Article IV, Section 3,
17
having ^regard to the permitted margins for spot and forward
18
transactions in foreign exchange prescribed by the Fund and
19
to Article XIV. (AA IV-3)
20
20
Agreed parities shall not be circumvented by rates
21
for forward exchange transactions or other transactions
22
discussed in EBD No.
.
- 2 &-5
23
Members shall notify the Fund whether for the settle-
24
ment of international transactions they, in fact, freely
25
buy and sell gold within the prescribed limits of price
26
and shall notify the Fund of any changes in such policy.
27
(Aa IV-4(b))
Revised Draft
August 13, 1946
H - Proposed Changes of Parities
H-l
H-2
1
A member desiring to change the par value of its currency
2
shall give the Fund as much notice as the circumstances allow,
3
and shall submit a full and reasoned statement why, in its
U
opinion, such a change is necessary to correct a fundamental
5
disequilibrium.
6
The Fund shall consider a proposal to change the par
7
value of a currency on the first business day after it receives
8
the proposal.
H-3 etc. - to be redrafted.
(AA 17-5)
Revised Draft
August 13, 1946
I - Fund Transactions
General
1-1
1
Each member shall designate a fiscal agency for its
2
transactions with the Fund, in accordance with Article V,
3
Section 1, before its subscription becomes due, and may
4
change the agency by notifying the Fund*
(AA V-l)
Foreign.Exchange
1-2
1-3
1-4
1-5
5
The Fund shall sell foreign exchange for gold or
6
currency only on the basis of a request in verified code
7
from the designated agency, and the agency, in its operations
8
on behalf of the Fund, will act only on instructions in such
9
form as may be agreed upon.
10
Requests for the purchase of foreign exchange in accord-
11
ance with Article V, Section 3, shall be dealt with in priority
12
of their reception by the Fund and with a delay of two working
13
days from the date of their reception if the Fund has in its
14
possession in liquid form a sufficient anount of the required
15
currency,
16
If the Fund does nob have ~n its po'-secsion in liquid form
17
a sufficiently large amount of the required currency, it shall
18
be permitted a further delay of three working days in order to
19
meet requests for purchases of that currency.
20
21
When a member expects to purchase from the Fund, in a
single transaction or a series of transactions, an unusually
~ 2 22
large sum of any other member's currency (unusually large
23
relative to the Fund's holdings of that currency), the member
24
shall give the Fund as much notice of the proposed transaction
25
or transactions as can reasonably be effected*
Gold
1-6
26
(Provisions dealing with transactions in gold, the price
27
to be paid for gold and charges for gold transactions are in
28
the process of preparation,)
Revised Draft
August 13, 1946
£
J-l
1
J-2
J-3
J-4
J-5
m
Exchange Controls, Currency
Practices and Agreements
The Fund shall keep all exchange controls under review
2
and shall consult with members in accordance with the Articles
3
of Agreement with a view to their progressive removal«
4
(AA XIV - 2)
5
If a member complains to the Executive Board that another
6
member is not complying with its obligations concerning exchange
7
controls, discriminatory currency arrangements, or multiple
8
currency practices, the complaint shall give all facts pertinent
9
to an examination,
10
(AA VIII - 2 and 3)
Upon receipt of a complaint from a member, the Executive
11
Board shall make arrangements promptly for consultation with
12
the members directly involved*
1.3
All requests by a member under Article VIII, Sections 2
14
and 3, that the Fund approve the imposition of restrictions on
15
the making of payments and transfers for current international
16
transactions^ or the use of discriminatory currency arrangements
17
or multiple currency pra ctioes, shall be submitted to the
18
Executive Board In writings with a statement of the reasons for
19
making the request*
20
ZX
( M VIII - 2 and 3)
The Executive Board shall decide each request for approval
expeditiously»
Revised Draft
August 13, 1946
K ~ Repurchases and Charges
K-l
K«»2
K-5
K-6
The first time that a member has to make a geld payment
2
to the Fund it shall pay an amount of gold at least sufficient
3
to meet the payment* Any balance of gold shall be held by the
4
Fund under earmark for the member and may be used to meet other
5
payments incurred in the future*
6
K*5
K-4
1
The service oharge payable by a member buying the currency
7
of a nother member in exchange for its own currency shall be
8
paid,at the time the transaction is consummated*
(AA V-8(a))
9
When a member repurchases its currency from the Fund with
1Q
gold in accordance with Article V, Section 7 (a)j no oharge shall
11
be levied. (AA V - 7(a))
12
Gold due to the Fund may be delivered at any gold depository
1$
of the Fund* The Fund may accept gold situated elsewhere and in
14
such cases shall levy an appropriate charge to cover the cost of
15
moving the gold to its nearest gold depository*
16
( M W 8 (b) and (f)
Ho charge shall be levied when a member repurchases its
17
currency from the Fund with gold or convertible currencies of
18
members in accordance with Article V, Section 7(b)-. (AA V^7(b
19
At quarterly intervals the Fund shall notify each member of
20
tiie charges due to the Fund pursuant to Article V, Section 8 (c)
21
or (d) on the balance of its currency held by the Fund in excess
22
of its quota* These charges shall be paid within ten days after
23
receipt of suoh notice* ( M V r 8 (q) and (d))
- 2 K«»7
K-8
24
A member wishing to pay in its own currency part of any
25
charges due shall submit to the Fund a statement giving the
26
necessary justification*
27
( M V - 8 (f))
At the end of each financial year of the Fund each member
28
shall furnish to the Fund the data necessary to calculate its
29
repurchase obligations pursuant to Article V, Section 7# In
30
order to facilitate the submission of these data the Fund will
31
provide a form which will be made available to the members as
32
soon as possible* All repurchases shall be made within thirty
33
day$ after the receipt of notice from the Fund of the amount of
34
its currency to be repurchased by the member arid the extent to
35
which payment is to be made in gold and in each convertible
36
currency.
( M V *> 7 and Schedule B)
Revised Draft
August 13, 191*6
L - Accounts and Reports
L-l
]>2
L~3
L-ll
1
The accounts of the Fund shall be kept in terms of the
2
currencies held by the Fund* and where deemed desirable shall
3
also be kept in terms of United States dollars on the basis of
k
the established parities• For the purpose of producing a balance
5
sheet to be submitted to the Board of Governors, all accounts
6
shall be summarized in terms of United States dollars on the
7
basis of the established parities• (BL - 20)
8
The accounts of the Fund shall be kept in a manner that
9
will show clearly the nature of each transaction, the position
10
of the Fund, and the results of its operations. The Managing
11
Director shall issue an Administrative Order establishing
12
procedures to assure that there will be complete records of all
13
transactions.
lit
A weekly statement of balances and transactions of the
15
Fund shall be prepared for the guidance of the Executive Board.
16
The Managing Director shall prepare an annual administrative
17
budget for presentation to the Executive Board for approval not
18
later than June 1 of each year.
1?
(BL * 20)
Not later than Jime 30 of each year, the Managing Director
20
shall present to the Board a summary of the matters which in his
21
opinion should be included in the annual report to the Board of
22
Governorsf At least one month before the annual meeting of the
23
Board of Governors, the Managing Pireqtor shall submit to the
- 2 -
L-6
2k
Executive Board for its consideration, a draft of the annual
25
report. (BL - 10)
26
At least one month before the annual meeting of the Board
27
of Governors, the audited accounts of the Fund shall be submitted
28
to the Executive Board for its consideration.
(BL - 20)
Revised Draft
August 13, 191*6
M - Limitation and Ineligibility
M-l
M-2
M-3
U-k
M-5
1
Whenever the Executive Board would be justified in
2
declaring a member ineligible to use the resources of the
3
Fund it.may refrain from making the declaration and prescribe
k
the circumstances under "which, and the extent to which, the
£
member may make use of the resources,
6
(AJL V-5, VJ-»1, XV~2(a))
Wien, pursuant to Article IV, Section 6, a meniber
7
become ineligible to use the resources of the Fund, the Executive
8
Board may determine thQ circumstances under which, and the extent
9
to which, the member may make use of the resources.
10
(AA IV *• 6 )
Before any member is declared, pursuant to Article XV,
11
Section 2 ( a ) , ineligible to use the resources of the Fund, the
12
matter shall be considered by the Executive Board, who shall inform
13
the member in reasonable time of the complaint against it an$
lii
allow the member an adequate opportunity for stating its case
l£
both orally and in writing*
16
(AA XV - 2 (a), BL - 22)
Any member that is ineligible to use the resources of the
17
Fund, or whose use of the resources has been limited, may request
18
the Executive Board to permit the resumption
19
actions without special limitations»
20
of exchange trans-
If the Executive Board decides not to permit full resumption
21
of exchange transactions, a written report gha.ll be made to the
22
member, if it so requests', stating what further actioja is required
23
before full resumption will be permitted*
Revised Draft
August 13, 191*6
N - Information
N-l
1
Unless specifically authorized by the Managing Director,
2
or persons designated by him, no person on the staff shall request
3
on behalf of the Fund that a member furnish any information to
h
the Pond.
5
N-3
N-fy
N-5>
N-6
(M VIII <- 5)
Until further notice the forms to be used by the
6
in furnishing information to the Fund shall be prepared under
7
the direction of the Managing Director and shall be approved by
8
the Executive Board*
9
The Ifenaging Director shall, wherever possible,
10
arrangements^ after consultation with the appropriate IJxecutive
11
Director, to obtain information collected by other agencies -which
12
is adequate to meet the needs of the Fund*
13
Each Executive Director shall make arrangements with the
lh
members he represents with a view to having them deposit with
15
the Fund copies of all existing international agreements of a
16
financial nature entered into with other members or with non-*
17
members, and all such agreements entered into in the future*
18
The Managing Director shall take such steps as he considers
19
necessary, in addition to those specified in Section p, to provide
20
for the security of confidential information-
21
Information i n ^ e possession of the Fund shall be published
22
only with the approval of the Executive Board* Confidential infor-
23
mation obtained by agreement between the Fund and a member shall be
2k
?5
furnished to persons outside %he Fund only with the permission of
*'hq member <>
Revised Draft
August 1 3 ,
0 - Staff Regulations
PERSONNEL
X
2
0-2
3
Persons o n the staff of the Fund shall be nationals of
members of the Fund,
In the discharge of their functions, the persons o n the
k
staff shall owe their duty entirely to the Fund and to no other
5
authority*
6
A l l persons on the staff must avoid any action, and in
7
particular any kind of pronouncement, which may reflect unfavor-
8
ably upon their position as employees of an international organ-
9
isation, either in their own country or elsewhere•
They should
10
always bear in mind th§ reserve and tact incumbent upon them by
11
reason of their international functions, and they are required to
12
exercise the utmost discretion in regard to matters of official
13
business. A t no time should they in any way use to private
Jdi
advantage information known to them b y reason of their official
15
position*
16
Except in the course of his official duties or by express
17
authorization of the Managing Director, no person on the staff
18
may, during the term of his appointment of service, publish, cause
X9
to be published, or assist in the publication of any book, pamphlet
20
article, letter or other document relative to the policies or activ-
21
ities of the Fund or to any national political questionsj deliver
22
any speech, lecture, or radio broadcast, or grant any press inter-
23
view on such policies, activities or questions? or communicate
- 2 -
0-5
0-6
0-7
2h
to any person any unpublished information known to him by
25
reason of his official position. For two years after termination
26
of his period of service with the Fund, a person formerly on
27
the staff may not, without the express authorization of the
28
Managing Director, disclose any confidential information he has
29
received during his service with the Fund by reason of his official
30
position,
31
32
employment or engage in any occupation or profession which in the
33
Fundfs opinion is incompatible with the proper performance of his
3l*
official duties.
35
A person on the staff may retain re-employment rights or
36
pension rights acquired in the service of a public or private
37
organization.
38
39
0-8
0-9
No person on the staff shall hold other public or priTate
1*0
Any person on the staff who accepts a public office of a
political character shall immediately resign from the Fund.
No person on the staff may accept any honor, decoration, favor
kl
gift, or bonus from any government, or from any other authority or
1|2
person external to the Fund, for services rendered during the perio
I4.3
of his appointment or service with the Fund.
kh
U5
Upon appointment, each person on the staff will subscribe in
writing to the following affirmation:
-3i*6
hi
my responsibilities in a manner that -will further the purposes
k9
of the International Monetary Fund;
51
52
53
$k
That, I -will refrain from communicating confidential
information to persons outside the Fund;
That, I -will not use to private advantage information
known to me by reason of my official position onlyj and
That, I "will accept no instruction in regard to the
5>f>
performance of my duties from any government or authority
56
external to the Fund,11
0-10 57
A H persons appointed to permanent positions on the staff
58
shall be classified by grades or positions according to the nature
$9
of their duties and responsibilities, Salary increases within
60
each grade will be progressively available upon the recommendation
61
of supervisors and upon the successful completion of successive
62
periods of work.
0-11 63
6J|
That, to the best of my ability, I -will carry out
hS>
50
0~12
"I solemnly affirm:
The salary scale for permanent employees of the Fund shall,
so far as practicable, conform to the salary scale o f United Nation
65
The Directors and Assistant Directors of departments and
66
offices of the Fund> and the heads of divisions within departments
67
and offices, and all persons to be paid 8000 dollars or more per
68
year, shall be appointed by the Managing Director with the approval
69
of the Executive Board* All other appointments to the staff shall
70
be made by the Managing Director or his designated representative•
0-13
71
The directors of departments and offices of the Fund shall
72
serve at all times subject to the pleasure of the Managing Director
73
but in terminating the services of these persons and any other
7k
persons -whose appointment was approved by the Executive Board, the
75
Managing Director shall give at least two "weeks1 notice to the
76
Executive Board before notice is given to the person concerned.
O-lll 77
78
Committee consisting of two persons on the staff selected lay the
79
Managing Director, two persons on the staff elected by the staff,
80
and a fifth member selected by the other four* Each member -will
81
serve a term of one year and may be re-appointed or re-elected*
82
This Committee will consider and make recommendations to the
83
Managing Director in all cases where it is proposed to discharge
Qk
a person on the staff for actions substantially prejudicial to
85
the interests of the Fund or for unsatisfactory working relations.
86
In cases where it is proposed to discharge a person on the staff
87
for inability or unwillingness to perform the duties of his
88
position and in the case of persons on the staff recommended for
89
discharge for failing to meet the requirements of probation, the
.90
person concerned may request the Personnel Review Committee to
91
investigate and make recommendations to the Managing Director.
Qyl5 92
The Managing Director shall establish a Personnel Review
The Managing Director is authorized to issue General Orders,
93
with the approval of the Executive Board, concerning the general
9k
personnel policies which shall apply to the operating staff of
95
the Fund* The Managing Director is authorized to issue such other
96
orders as may be necessary to make effective the personnel policie
97
stated in the Rules and Regulations and in the General Orders*
TRAVEL
0-16
98
Official travel -will be undertaken by staff members only
99
with the approval of the Managing Director* Official travel
100
outside the continental limits of the United States will be
1Q1
undertaken only with the further approval of the Executive Board*
102
The Managing Director is authorized to issue from time to time
103
General Orders, with the approval of the Executive Boardj concern-
lOli
ing the general travel policies which shall apply to the staff of
105
the Fund.
Revised Draft
August 13 , 191*6
P - Capital Transfers
P-l
1
If there is taking place a large or sustained outflow of
2
capital from a member country that may require net use of the
3
Fund f s resources:
k
5
presenting such information as it deems necessary, and may
6
request the Fund ! s views with respect to such capital movementj
7
and
8
9
10
P-2
F-3
a. that member or any other member may notify the Fund,
11
b . the Fund may present to the member or members concerned
a report setting forth its views and may request the member or
members to report on the situation within a suitable time*
Whenever the Fund has requested a member to exercise controls
12
to prevent use of the resources of the Fund to meet a large or
13
sustained outflow of capital, the member shall notify the Fund
lU
promptly and in detail of the measures taken, The member shall
X5>
consult with the Executive Board on the institution, administration
X6
and subsequent removal of appropriate controls.
17
(AA VI-l(a))
Each member shall inform the Fund in detail o f the measures
18
it is taking to regulate international capital movements and of
19
changes made in such measures.
20
If the Fund is of the opinion that the controls exercised
21
by a member to regulate international capital movements are
22
restrictive of payments for current transactions, or unduly delay
23
transfers of funds in settlement of commitments, the Fund shall,
2k
subject to the provisions of Article VII, Section 3 (b) and
25
Article XIV, Section 2, consult with the member on the manner in
26
which the controls are exercised*
If, after consultation, the Fund
- 2 -
P~5
P-6
27
is not satisfied that the controls are exercised in a manner
28
consistent with the Articles of Agreement, it shall so inform the
29
member in a -written report and give the member an opportunity to
30
modity the controls*
(AA VI-3)
31
"When the Fund!s holdings of a member's currency exceed
32
seventy-five percent of its quota and the Fund finds that a
33
member is effecting capital movements which are met out of the
3U
member's own resources of gold and foreign exchange and which
35>
may not be in accordance with the purposes of the Fund, the Fund
36
shall consult with the member with respect to such capital move-
37
ments. If, after consultation, the Fund is not satisfied that such
38
capital movements are in accordance with the purposes of the Fund,
39
it shall present to the member a report setting forth its views,
kO
and request a reply within a suitable time. If the Fund is not
kl
satisfied with the member's report, or the time set by the Fund
k2
has elapsed without receipt of a report, the Fund may request
I4.3
that action be taken to prevent such use of its resources*
hh
(AA VI - 1 (b)(ii))
k$
Whenever in any case coming before the Fund there is apy
I46
doubt whether a transaction is a current or capital transaction.,
U7
the Managing Director shall arrange for a report to be presented
hQ
to the Executive Board for its consideration and such consultation
il9
with the members concerned as the Executive Board deems appropriate«
50
(AA XIX - (i))
Revised Draft
August 13, 191*6
~ Scarce Currencies
Q-l
1
Q-2
Q-3
Q-4+
Q-5
When the Fund has declared a currency scarce, it shall
2
inform all members of the manner in which it proposes to
3
apportion its sales of the scarce currency. Any member may
h
consult with the Fund regarding the apportionment of its sales
5
of the scarce currency*
6
TJhen the Fund has declared a currency scarce, the members
7
shall consult promptly with the Fund on the temporary limitations
8
they propose to impose on exchange transactions in the scarce
9
currency*
10
The Fund shall offer its good offices if the member whose
11
currency has been declared scarce wishes to make representations
12
on the administration of the limitations imposed by another member*
13
If the Fund finds that a member maintains limitations on
li*
exchange transactions in a scarce currency which are more restric-
lf>
tive than is necessary in view of the supply held by the member
16
or accruing to it, the Fund shall consult with the member on the
17
relaxation of the unnecessary limitations.
18
The Fund shall inform the member in a written report of the
19
extent to which the limitations should be relaxed and the
20
for its opinion*
Revised Draft
August 13> 19h6
R - Relations with Non-Members
R-2
R-»3
R-ii
R«f£
1
The Fund may request the cooperation of any ijiember with
2
a view to the application of appropriate measures to prevent
3
transactions with non-members or with persons in their terri-
k
tories, contrary to the provisions of the Articles of Agreement
$
or the purposes of the Fund*
6
(AA XI - 1 (iii))
When the Fund finds that a member or any of its fiscal
7
agencies referred to in Article V, Section 1, engages in any
8
transaction with or cooperates in practices with a non-member
9
or with persons in a non-member*s territory, contrary to the
10
provisions of the Articles of-Agreement or the purposes of the
11
Fund, it shall present to the member a report setting forth its
1?
views and may request the cessation or modification of the trans-
13
actions or practices. (AA XI - l(i) and (1*))
1^
A member shall inform the Fund promptly and in detail of
15
any restrictions which it imposes on exchange transactions with
16
npn-members or with persons in their territories • ( M VIII-"f>(a)(xiX
17
Any member may notify the Fund o£ restrictions imposed by
318'
a member o n exchange transactions w i t h non-members o r w i t h persons
19
i n their territories which are deemed to prejudice the interests
20
of members and to be contrary to the purposes of the Fund e (M XI-2)
21
When the Fund finds that the restrictions imposed by a
22
member on exchange transactions with non^members QV with persons
- 2 23
in their territories are prejudicial to the interests of
2U
members and contrary to the purposes of the Fund, it shall
25
present to the member a report setting forth its views and may
26
request the abolition or modification of the restrictions^
27
(AA XI - 2)
Item VII Agreement with the United Nations
o& Fund"'
Agenda
(Decision is by majority of the total votes cast.)
Request of Economic and Social Council
'
(Actions by* Board of
Governors at Savannah)-
At the fifth session, March 1$, 191*6, a letter from the President of the Economic and Social Council of United Nations requesting the establishment of liaison with the Fund was referred to the
Executive Directors with authority to discuss, arrangements for collaboration with the Council and to prepare recommendations for submission to the Board of Governors#
Relations with Other International Organizations (Article X,
*
of the "Articles, of. &greemeat)
The Fund shall cooperate within the terms of this Agreement
with any general international organization and with public international "organizations having specialized responsibilities in related
fields« Any arrangements for such cooperation which would involve
a modification of any provision of this Agreement may be effected
only after amendment to this Agreement under Article XVII #
i^emorandujn
Subject: Liaison with the Economic and Social
Council and Other International
Organizations
!• The Problem
Under Article V, Section 8, of the Articles of Agreement:"
"(a) The Bank, within the terms of this Agreement, shall cooperate with any general international
organization and with public international organizations having specialized responsibilities in related
fields. Ar^r arrangements for such cooperation which
would involve a modification of any provision, of this
Agreement may be effected only after amendment to
this Agreement under Article VIII+
"(b) In making decisions on applications for
loans or guarantees relating to matters directly
Yfithin the competence of any international organization of the types specified in the preceding
paragraph and participated in primarily by members
of the Bank> the Bank shall give consideration to
the views and recommendations of such organization•"
The Bank was represented at the Food and Agriculture Conference
held in Copenhagen in September 1946 and at conferences of the
Economic and Social Council.
2* Recommendation of Executive Directors
No paper has been furnished as yet) but it is understood that
the drawing up of a formal agreement with the United Nations has
beeh postponed for the time being*
3* Tentative Recommendation of U+ S» Position
The National Advisory Council has agreed that the drawing up
of a formal agreement with the United Nations should be postponed**
No action at the Board of Governors appears^ therefore, to be
necessary•
lite of Next
Meeting
Item VIII Place of Second Annual Meeting
of FundT*"
Agenda "" (Decision is by majority of the total votes cast.)
9. Other Business
Item IX
of Fund
Agenda
Other Business
MEMORANDUM FOR THE SECRETARY
Subject: Proposed Fund Resolution No.
Regarding
Silver, Presented by the Mexican G
lt
The Problem
At Bretton Woods a resolution was adopted which recommended
further study of the question by the interested nations*
The proposed resolution of the Me^icfitn delegation* after
i
reference to the problems of silver, provides 5
The Fupi shall gather whatever material i s available
a,n$ obtainable on the monetary uses of silvery .the real
function of silver coinsj risks and uncertainties of i t s
monetary usesj possibilities of cooperation in the use of
silver for mondtary purposes, e t c . In general, the Fijind
shaXl gather material, s t a t i s t i c a l or othervdse, which
CQU!4 be useful in facilitating discussions on the subject i|i an international conference among interested
liiomber countrie s •
2t
The proposed rq^olution dpes not commit thp Fund to anything
but a ptudy of tl^e question of silver, and probably the publication
of its findings. There would be considerable interest in this
question in the United States as well as Mexico.
Recoinmendatiori
t is recommended tha.t the United §tate,s support the Mexican
ti subject to such (grafting changes as may appear advisable in the course of the discussion.
PROPOSED RESOLUTION ON SILVER
(Submitted by the Governor for Mexico before the first
annual meeting of the Board of Governors of the Inter
national Monetary Fund to be held in Washington* D#P*,
beginning September 27, 194-6.)
RESOLUTION NO.
September 27, 1946
FUND RESOLUTION NO.
A Resolution pursuant to the ffStatement Regarding Silver11^
(Section JV, Final Act)*
Due to 1$IQ shortage of, time, the magnitude o£ other problems
on the agenda, an$ other limiting factors, i t was not possible to
give sufficient consideration to the international aspects of
silver, nor to make definite recommendations, at the time of the
B^
Woods Conference}
liiERBAS
In Article l(i) of the Articles of Agreement of t\\e
n&t&onal Monetary Fund it is stated that one of the principal
purposes of the Fund is to promote international monetary cooperation through a permanent institution which provides the
machinery for consultation and collaboration on international
monetary problems;
¥iHEREAS
It was the sense of the ^statement Regarding Silverff included
in the Final Aut, that the subject merited further study by the
interested nationsj
YJHERSAS
One of the ppqv^iling factors of disequilibriura, accpntioated
by the di^rup^lvq fprcqa of the recent war, is a distorted dls^
of international lnotietary reserves, involving difficult
of
h
Silver
-2WHEREAS
{
Some member countries may consider of the utmost importance to
take the necessary measures to place their fiscal and monetary systems on sound bases, as a preceding or parallel condition to international action on other fundamental issues of monetary policy;
WHEREAS
4
Several manberf^omntries may contemplate tho use of sliver as
a prime constituent^ in their efforts to bring about the necessary
fiscal and monetary reforms as well as in making other essential
economic adjustments, but are hampered by technical and financial
problems arising from the uso of silver for monetary purposes?
WHEREAS
The problon falls-within the purposes set forth'by the Fundfs
Agreement, and several member countries arc interested in it,
THEREFORE!
In recognition of these promises, the Board of Governors of
the International Monotary Fund hereby RESOLVES thatf
The Fund shall gather whatever material is available and
obtainable on tho monetary uses of silver} the ro^l function of
silver coins) risks and uncertainties of its monetary usesj
possibilities of cooperation in the use of silver for monetary
purposes, otc# In general, the Fund shall gather material,
statistical or otherwise, which could be useful in facilitating
discussions on the subject in an international conference
interested member countries*
K
GOVERNORS AND ALTERNATES OF THE FUND AND BANK YfflO HAVE
ACCEPTED THE INVITATION TO ATTEND THE BOARD OF GOVERNORS
MEETING - September 27
COUNTRY
TITLE
FUND
BELGIUM
Governor
Mr* Frere
(Frer)
Alternate
Mr* Frere
(Frer)
Same
Governor
Mr# Calderon
Same
Alternate
Mr f Guerra
Same
Governor
Mr* Alves dos Santos Filho
(Santos Feelyo)
Same
Alternate•
Mr. <JQ Hello
Same
Governor
Ur f Illplcy
3ame
Alternate
Mr* Towers
Same
BOLIVIA
BRAZIL
CANADA
CHILE
Governor
Alternate
CHINA
COLOMBIA
COSTA RICA
BANK
Mr f Davila
(Davcelya)
•
Same
Governor
Alternate
Mr* Te-^Mou Usi
(She)
Same
Governor
Mr f Toro
Not a member
Alternate
Not named
Not a member
Governor
Mr# Pona Morua
(Ponya)
Same
Mr f Coronas Guardia
(Coronas)
Same
Alternate
COUNTRY
CUBA
TITLE
FUND
BANK
Governor
Mr* Meyer
Same
-
Alternate
Mr* lUadek
(Mlahdek)
•Mr. Krai
Alternate
Mr* Pazman
Mr* Hanc
Governor
Mr. Bramsnaes
(Bramsnas)
Same
Alternate
Uv. Ahlefeldt
(Alefelt)
Mr* Sveinbjornsson
(Svine-byornsen)
Alternate
Mr* Rodriguez
(Rodroegos)
Same
Governor
Mr* Carbo
Same
Governor
Mr* Zaki Bey
Same
Alternate
Mr* FaUki
Mr. Selioi
(Sealim)
Governor
Mr* Vides S*
Same
CZECHOSLOVAKIA Governor
DENMARK
DOMINICAN
REPUBLIC
ECUADOR
Governor
Alternate
EGYPT
EL SALVADOR
(Ho will attend alone for ?1 Salvador
iji all capacities*)
Alternate
ETHIOPIA
Governor
llr* Blowers
Same
Governor
Mr* Mendes~Fra#ce
(ivlendes-^Franz)
Mr* Schuman
Alternate
M^,# Monick
(Moyioek)
IJr* Mendes-rFrance
(Mondes-Franz)
Governor
Mr* Zoiotas
Mr* Sbaro-unis
Alternate
Mr* Kaskarelis
Same
Alternate
FRANCE
GREECE
COUNTRY
GUATEMALA
HONDURAS
ICELAND
TITLE
FUND
BANK
Governor
Mr* Noriega
(No-ree-gha)
Same
Alternate
Mr* Acevedo
(Ah-say-vay*-doh)
Same
Governor
Mr* Caccres
Samq
Alternate
Mr* Duron
(Doo-^ro^n)
Same
Governor
Mr. Asggirsson
(Ahs^ftay-^har-son).
jLIr. Sigurdsson
Governor
Mr* Dqshmukh
(Desh-muk)
Same
Alternate
Mr* Sundaresan
(Sun^dar **ayson)
Same
Alternate
INDIA
IRAN
IRAQ
LUXEMBOURG
MEXICO
NETHERLANDS
-
Governor
Alternate
Mr. AU
Sane
Governor
Mr* Jawdat
(Taw-dat)
Sane
Alternate
Mr* Gailani
(Gaylanee)
Same
Governor
Mr# Dupong
(Durrpon)
Same
Alternate
Ur* Le Gallaia
(Le Gallay)
Same
Governor
Antonio Espinosa do los Monteros
(Monteros)
Alternate
Mr* Wiqcher^
(Vco-eytchers)
Same
Governor
Mr* Lieftinck
(Leeftink)
Same
Alternate
Mr* do Jong
(do Yongh)
Same
Same
COUNTRY
NICARAGUA
NORWAY
TITLE
FUND
Governor
Mr. Sacasa
(Saa-caa-*sa)
Same
Alternate
Mr*
Same
HUQZO
(Hayso)
Governor
(Yahn)
PANAMA
PARAGUAY
PERU
PHILIPPINE
REPUBLIC
BANK
Same
Alterrjate
Ib>* Colbjorr^on
(C61-bjorn~son)
Same
Governor
Mr* Vallarino
(Vayareeno)
Same
Alternate
Not ramed
Not named
Governor
Mr* Gonzalez
(Gan^ahlays)
Same
Altornate
Mrt Bonitq?
(Bayneqtays)
Same
Mr# Bqrnales
Qovornor
Altornate
Mr* Barreto
(Barayto)
Mr* libller
Governor
VtVf Elizalde
Same
Alternate
POLAND
UNION OF
SOUTH AFRICA
Alternate
Mr* Zoltowpki
Zol-tov3ki)
Governor
Mr*
Alternate
Same
UNITED KINGDOM Governor
UNITED STATES
Mr. Dabrowsky
(Dabrovski)
Governor
Mr #
Same
flallovray
Same
(He w i l l represent ^lone)
Same
Dalton
Somq
ALternate
Mr* Grigg
Same
Governor
la?* 3nyder
Same
Alternate
Mrf* Clayton
COUNTRY
TITLE
URUGUAY
Governor
YUGOSLAVIA
FUND
BANK
Alternate
Mr* Garcia
(Garseea)
Same
Governor
Mr # Krasovqc
Same
Alternate
Mr. Srzqntic
(Zurentio)
Ex. Dir. 4 Alteri
Fund & Be
INTERNATIONAL MONETARY FUND
Executive Directors and Their Alternates
Executive Director
Alternate
Country
Harry White
George F. Luthringer
United States
G. L. F. Bolton
if P. Grafftey-Smith
United Kingdom
China
Yee-Chun Koo
Jean de Largentaye
Thierry de Clermont-Tonnerre
France
J. V. Joshi
B. K. Madan
India
Herbert Ansiaux
Ernest de Selliers
Belgium
G. W # J. Bruins
D, Crena de Iongh
Netherlands
J, V. Mendek
Mihailo Kolovic
Czechoslovakia
Ahmed Zaki Bey Saad
El Falaki
Egypt
Rodrigo Gomez
Raul Martinez-Ostos
Mexico
Francisco Alves dos
Santos-Filho
Octavio Bulhoes
Brazil
A
S
y
INTERNATIONAL BANK
Executive Directors and Their Alternates
Executive Director
Alternate
Bmilio 0. Collado
.John S # Hooker
United States
Sir James Grigg
Mourice Hutton
United Kingdom
Shen Yuen-Ting
Pierre Mendes-France
Country
China.
Guy de Carmoy
France
N # Sundaresan
India
Kyriakos Varvaressos
Greece
Victor Moller
Fernando Illanes
Chile
Dr. Luis Machado
Jose Aramis Alvarez
Cuba
Herbert Ansiaux
Thomas Basyn
Belgium
J# W # Beyen
Crena de Iongh
Netherlands
R. B # Bryce
Louis Rasminsky
Canada
Dr* Leon Baranski
Alois Krai (Czechoslovak:ia) Poland
M,E M 0 R A IT D U M
A*
Voting Powers under the Fund Agreement
I,
General
Article XII» Soction 5 #
Voting. - (a) Bach member shall have two hundred fifty votes plus one
additional vote for each part of its quota equivalent to one hundred
thousand United States dollars#
(b) Wuenever voting is required under Article V, Section h
or 5t each member shall have the number of votes to which it is entitled
under (a) above, adjusted
(i) by the addition of one vote for the equivalent of
each four hundred thousand United States dollars
of net sales of its currency up to the date when
the vote is taken,'or
(ii) by the subtraction of one vote for the equivalent
of each four hundred thousand United States dollars
of its net purchases of the currencies of other
members up to the date when, the vote is taken;
provided, that neither net purchases nor net sales shall, tje deemed at any
time to exceed an amount equal to the quota of the member involved.
(d) Except as otherwise specifically provided, all decisions
of the Fund shall be made by a majority of the votes cast,
II*
Voting Powers of tho Governors of the Fund
Article XII, Section 2.
(d) A uuorum for any meeting of the Board of Governors shall
be a majority of the governors exercising not less than two-thirds of the
total voting power.
(e) Each governor shall be entitled to cast the number of
votes allotted under Section 5 ?' this Article to the member appointing him,
(f) Tue Board of Governors may by regulation establish a
procedure whereby the Executive Directors, when they deem such action to be
in the best interests of the Fund, may obtain a vote of the governors -on a
specific question without calling a meeting of the Board,
- 2 III. Voting Powers of the Executive Directors of the Fund
Article XII, Section 3*
(h) A quorum for any meeting of the Executive Directors
shall be a majority of the directors representing not less than one-half
of the voting power*
(i) Each appointed director shall be entitled to cast the
number of votes allotted tinder Section 5 o* this Article to the member
appointing him* Each elected director shall be entitled to cast the number
of votes which counted towards his election* When the provisions of
Section 5(*b) of this Article are applicable, the votes which a director
would otherwise be entitled to cast shall be increased or decreased correspondingly* All the votes which a director is entitled to cast fchall be
cast as a unit;
B* Voting Powers under the Bank Agreement
I; General
Article V, Section 3.
Voting*- (a) Each member shall have two hundred fifty votes plus one
additional vote for each share of stock held*
(b) Except as otherwise specifically provided, all matters
before the Bank shall be decided by a majority of the votes cast*
II* Voting Powers of the Governors of the Bank
Article V, Section 2.
(d) A quorum for any meeting of the Board of Governors shall
be a majority of the Governors, exercising not* less than twoi-thirds of the
total voting power*/•
(e) The Board of Governors ma^ "by regulation establish a
procedure whereby the Executive Directors, when they deem, such action to be
in the best interests of the Bank, may obtain a vote of the Governors on a
specific question without calling a meeting of the Board*
• 3III. Voting Power8 of the Executive Directors of the Bank
Article V, Section h.
(f) A quorum for any meeting of the Executive Directors
shall be a majority of the Directors, exercising not less than one-half of
the total voting power*
(g) Each appointed director shall "be entitled t* oast the number of votes allotted under Section 3 of this Article to the member appointing him. Each elected director shall be entitled to cast the number of votes
which counted toward his election. All the votes which a director is
entitled to cast shall be cast as a unit.
0t
Certain Acts under the Articles of Agreement Requiring the Approval,
Consent, or Agreement of the U«S.
With respect to the |\xnd:
1» Agreement between the Fund and the United States for a loan of
dollars to the Fund, (Article VII, Section 2(i) t
2. Approval of the Pond borrowing dollars from persons in the
United States or elsewhere. (Article VII, Section 2(i).
3t Agreement between the Fund and the United States on the method
of repaying the subscription of the United States in the event of withdrawal.
(Schedule D, 2 and U ) .
k. Agreement between the United States and the Fund as to the
redemption of dollars held by the Fund at the time of liquidation. (Schedule
Et 3 ) .
5# Agreement between the United States and other members as to the
redemption of dollars distributed upon liquidation of the JTtyxd. (Schedule E, 7)t
With respect to the Bank:
1. Approval of the Bank ! s borrowing dollars. (Article IV,
Section
2. Approval of the Bankfs borrowing any currency in United States
markets* (Article IV, Section l(b).
3 # Approval of loans by the Bank out of dollars subscribed by the
United States for direct loans. (Article IV, Section 2(a).
k. Approval of the .Bank's exchanging or re-lending dollars
received "by the Bank from "borrowers in payment of loans made with dollars
subscribed by the United States for direct loans-# Article IV, Section 2(b) # '
5* Agreement with the Banfc that a loan made in dollars subscribed
by the United States for direct loans!be repaid in some other currency*
Article IV,, Section U(b)()
6,.. Approval of the Bank1 s buying or selling-in territories of the
United States securities it has guaranteed, invested in or issued* Article IV,
Section 8(i) #
Section
7« Approval of the Bankfs borrowing dollars,- Article IV,
( )
g« Acceptance of income distribution in a currency other than
dollars* Article V, Section 4 )
9»• Acceptance of currencies offered for distribution upon suspension
of operations of the Bank* Article VI, Section 5(b)(iii)#
D # . The following
more majority
As the United
United States
provisions of the Fund Agreement require three-quarters or
of the total voting power for decisions taken thereunder.
States now has 3J«J4 percent of the total voting power,""the
can in these cases exercise effective veto»
I. Required voting
majority
unanimous
unanimous
1) Any change in quotas, Article III;,- Section 2*
2) Changes in rates of service-charges, Article V,
Section S(e)*
3) Increase in number of elective directors,
Article XII, Section 3(b) # k) Extension of suspension of operations, Article XVI,*
Sectibn l(c).
5) Amendments, Article XVII(a)«
6) Temporary suspension of operations. Article XVI,
Section l(a) #
7) Certain amendments, Article XVil(b)#
— 5The following provisions of the Bank Agreement require two-thirds or
more"majority of the total voting flower for decisions taken thereunder.
As th$ United JSta^es now has 37*12 percent of the, total voting power,
the United States caa in these cases exercise an effective veto power.
Required voting
majority
3/>
4
2/3
unanimous
1) Increase of capital, Article II, Section 2(b) #
2) Miscellaneous operations, Article IV, Section 8(iv) #
Quorum of governors, Article V, Section 2(d).
Increase of directors, Article V, Section k.
Cessation of membership, Article VI, Section 3«
5)
6) Suspension of operations, distribution of assets,
Article VI, Section 5(f)«
Amendments,
Article VIII l(a).
7)
Amendments,
Article VIII (b) #
8)
8
I. Certain Acts not to be Taken without Authorization, of Congress^
Section 5 (Bretton Woods Agreements Act) # Unless Congress by law authorizes
such action, neither the President nor any person or agency shall on behalf of
the United States (a) request or consent to any change in the quota of the
United States under Article III, Section 2, of the Articles of Agreement of
the Fund; (b) propose or agree to any change in the par value of the United
States dollar under Article IV, Section 5t or Article XX, Section kt of the
Articles of Agreement of the Fund, or approve any general change in par values
under Article IV, Section 7; (c) subscribe to additional shares of stock under
Article II, Section 3, or the Articles of Agreement of the Bank;(d) accept
any amendment under Article XVII of the Articles of Agreement of the Fund or
Article VII of the Articles of Agreement of the Bank; (e) make any loan t>o
the Fund or the Bank* Unless Congress by law authorizes such action, no
governor or alternate appointed to represent the United States shall vote for
an increase of capital stock of the Bank under Article II, Section 2, of the
Articles of Agreement of the Bank.
[
Sali«nt Features of
Bank
#
MEMORANDUM TO THE SECRETARY
BRIEF ANALYSIS OP THE SALIENT FEATURES OF THE FUND AND BANK
I. ANALYSIS OF THE FUND AND BANK
The International Monetary Fund and the International Bank for Recon-*
struction and Development are separate organizations operated under separate management. Although the Fund and Bank will complement each otherf
they are designed to perform different and distinct functions,
The fundamental purpose of both the Fund and the Bank is to facilitate
the expansion and balanced growth of international trade and investment.
The Fund seeks to accomplish this aim by providing an environment of currency
stability and order in which international business can flourish* The Bank
seeks to assist in the accomplishment of this objective by encouraging and
participating in productive international investment in the postwar period*
The Fund will provide temporary assistance through short term loans*
The Bank will furnish long range assistance by making available long
term credits*
II*
THE INTERNATIONAL MONETARY FUND
Objectives
The principal objectives of the Fund may be summarized in the following four main points:
1* Members of the Fund recognize that international monetary problems
are in international responsibility and can be solved only through
international cooperation.
2* Members agree to establish the parities of their currencies in
consultation with the Fund and not to change these parities except
after consultation with the Fund or with its concurrence*
3« Members agree, after the postwar trarsition, not to impose restrictions on current international transactions and to remove the
restrictions now in effect as soon as conditions permit*
4* The Fund will help members maintain orderly exchanges by offering
them temporary assistance in J-imited amounts and under adequate safeguards to supplement use of their own monetary reserves and in order
to give members time in which to carry through essential readjustments
of their economy*
B*
Par Values And Elimination of Restrictions
In order to effectuate the intention of the Fund to set up orderly
arrangements that will promote exchange stability and eliminate compete
- 2 *
tive exchange depreciation, the members of the Fund agree to establish
acceptable par values for their currencies and agree not to impose restrictions on payments and transfers for current international transactions*
To the same end the Fund agreement also provides for progressive removal
of discriminatory currency arrangements, multiple currency practices, and
other currency devices that are destructive of international trade and investment. Such restrictions are now imposed in nearly all countries*
C»
Transition Period
However, it should be noted that the Fund agreement does not require
the immediate elimination of every existing limitation on exchange transactions, but rather that these limitations be removed as soon as feasible.
The Fund recognizes for example, that countries which have suffered years
of systematic spoliation during the war and countries which have disposed
of many of their foreign investments and incurred large foreign indebtedness
to carry on the war, may be unable to remove all existing restrictions
immediately* For this reason, during the postwar transition period, member
countries may retain some of the exchange restrictions which have been in
operation during the war* If necessary, countries which have been occupied
by the enemy may introduce new restrictions. These restrictions will,
however, be supervised by the Fund and when any restrictions are no longer
.necessary, the member will be expected to. remove them*
V.
Operation of the Fund
To help countries that abide by these fair-currency practices, the Fund
now has resources of 7,397,500,000 dollars, subscribed by members in
accordance with quotas agreed upon at the Bretton Woods Conference. The
subscription of the United States is 2/#75 billion dollars. Subscriptions
to the Fund will be in the form of gold and national currencies. The gold
subscription of each member country will be 25 percent of its quota or 10
percent of its net official holdings of gold and United States dollars,
whichever is smaller*
These resources will be available for use by the Fund to provide
temporary assistance to countries when their out-payments on current international account exceed their in-payments. This is especially important in
a period of depression during a business cycle when the decline in international trade and investment puts .pressure on the balance of payments of
some countries. Assistance during such periods will give countries time to
make appropriate adjustments without having to take such drastic measures
as exchange depreciation or restriction of exchange transactions*
Member countries inv need of temporary assistance to meet current international obligations are permitted to buy from the Fund the currency they
require.with their own currencies in limited amounts and in accordance with
specified conditions with the obligation to repurchase their own currencies
from the Fund with gold, or with convertible foreign exchange, as soon as
they are in a position to do so* The resources of the Fund nay not be used
for reconstruction or relief, or to meet indebtedness arising out of the
war, nor may the Fund be used to finance r. large or sustained flight of
capital*
- 3 E»
Safeguards to Prevent Misuse of Fund's Resources
There are a number of provisions in the Fund agreement which are designed
to prevent the misuse of its resources and to protect the Fund from loss*
For example, the net amount of foreign exchange a member purchases in any
twelve month period may not exceed 25 percent of its quota• Also, whenever
the Fund is of the opinion that a member is using the Fund's resources in
a manner contrary to the purposes of the Fund, the member may be declared
ineligible to use the Fund*
F#
Safeguards to Protect Fund Against Loss or Currency Depreciation
The following provisions indicate the type of safeguards given to the
Fund to protest it against loss from its operations or depreciation in the
value of its assets;
1. Each member must subscribe gold and currency to the Fund in an
amount equal to its quota# A country buying foreign exchange from the
Fund must put up additional amounts of its currency equal to the
foreign exchange it buys from the Fund. Therefore, the Fund will
always hold at least twice as much of a member's currency as the
amount it owes to the Fund, furthermore, the Fund's currency holdings
will carry special guarantees as to their value and their use #
2. All currencies held by the Fund will bear a gold value guaranty.
In the event of depreciation, the member must supply an additional
amount of its currency to maintain intact the original gold value of
the Fund's holdings. This guaranty also applies to currency which
the Fund sells to settle the account of a country that is no longer a
member.
3. The currencies held by the Fund cannot be blocked and their use
for the purposes of the Fund cannot be restricted in any way. Even
after a country withdraws from membership, it must permit the
unrestricted use of its currency held by the Fund in the purchase of
goods or the payment of Obligations.
4 # If a country withdraws from the Fund, it must redeem in gold or
convertible exchange any currency the Fund holds in excess of its subscription. If the country does not buy back its currency, the Fund
may liquidate its holdings in any market. Furthermore, any member
that needs such currency must purchase it from the Fund*
5. The Fund will not permit its resources to be used to support a
currency if it believes the exchange rate is untenable# The Fund will
not accept a proposed gold perity for a currency if in its opinion it
cannot be maintained without excessive use of the Fund's resources*
6. The Fund will not begin exchange operations with a country if in
the Fund's opinion such operations lnpuld lead to use of the resources
of the Fund in a manner contrary to its purposes or prejudicial to its
interests*
- 4 7* A member may not make net use of the Fund's resources to meet a
large or sustained outflow of capital* The Fund may require a member
to prevent a flight of capital of significant proportions to avoid
misuse of the Fund f s resources*
8* The Fund can at any time stop a member from using its resources
contrary to the purposes of the Fund* If a member violates the provisions of the Fund with respect to the maintenance of the parity of
its currency, the termination of discriminatory currency practices, or
any other provision of the Fund agreement, it will become ineligible
to use the Fund's resources and it may be required to withdraw from
membership.
9* The Fund will levy a charge of three-fourths of 1 percent on all
currency transactions and additional charges on its currency holdings
whenever they exceed the quota of a country* These charges increase
progressively withNthe amount of a country's currency held by
the Fund and the time during which it is held* With minor exceptions,
all charges are payable in gold*
XJ. Rationing of Scarce Currency
The Fund Agreement provides for the possibility of the development
of a scarcity of a member1s currency* This could happen if a country
should have a persistently large favorable balance of payments so that
other members would be forced to deplete their Monetary reserves and to
purchase substantial amounts of that country's currency from the Fund*
Yfhen the Fund finds that a general scarcity of a currency is developing,, it may issue a report setting forth the causes of the scarcity
and .making recommendations looking toward its correction* A report on the
possible scarcity of a currency may be issued while the Fund still has an
ample supply of that currency and means of obtaining more** But the Fund
m y , from a consideration of the balances of payments of members and the
current demands made upon it, find that a scaricity is developing*
When it becomes evident that the Fund will not be able to supply
the reasonable demands for a currency, the Fund will declare the currency scarce* The Fund would then make further sales of the scarce cur*»
rency with due regard to the relative need of members, the general' international economic situation, and other pertinent considerations. In other
words, when the Fund recognizes that a scarcity exists, it provides a
orderly procedure for utilizing its own and the scarce currency resources
of member countries•
« 5 III. INTERNATIONAL BANK
A . Role of the Bank in the International Investment Field
The International Bank for Reconstruction and Development recogpizes the
need for cooperation in encouraging productive international investment in
the postwar period* The countries that have been devastated by the war and
the countries that lack modern means of production will need foreign capital
for reconstruction and development* It is not intended, however, that the
Bank vail handle all foreign investments or even a major portion of them.
Its role will be to pick up where private investment would otherwise leave
off, and stimulate additional investment through established channels by
guaranteeing loans that meet specified requirements. To carry out this
purpose the Bank now has capital of $>7.67 billion, of which amount the
United States subscription is $3.175 billion.
B. An Important Function of Bank -
Guarantor of Bonds
An important function of the Bank will be to guarantee bonds of foreign
governments and corporations gold to private investors if the loans cannot be
secured on reasonable terms without the Bank's guaranty. In carrying out
this purpose the Ben k will function substantially as follows: It will determine* the soundness of a project for which a loan is sought, and its
capacity to raise a country1s production and to improve its foreign,exchange
position. The Bank will secure the guaranty of the government of the country in which the project is to be located or its central bank. And, finally,
it will add its own guaranty. The risks associated with investments sponsored by the Bank, therefore, will fall not on the investors, nor even on
any one country, but upon all members. All countries will, in turn, derive
benefits from the expansion of international investment.
C. Loans Out of Borrowed Capital
In the initial period, the Bank will probably serve as intermediary
between lenders and borrowers by selling its own securities in the market
of a member country, and, in turn, lending directly to the ultimate
borrower. By this device the B?nk will be able to consolidate demands
for capital and appeal to those American investors who might prefer the
securities of the Bank rather than those of a borrower located outside the
United St a tes.
D.
Direct Loans
The Bank may also make direct loans out of its own capital. The total
volume of such loans, however, will be limited to 20 percent of the Bank's
subscribed capital which will be paid in for this purpose proportionately
by all countries. The United States vail pay in $635 million of its subscription to be used for direct loans• The remainder of the subscription
of this country, and a corresponding proportion of the subscriptions of all
countries, will be called only to meet losses, if they should be incurred
of loans guaranteed by the Bank or made out of funds it borrowed.
- 6 E.
Specific Projects
The loans made or guaranteed by the Bank will be for specific projects
(the interpretation of this phrase is now under consideration and is of
fundamental importance) except that under certain circumstances the Bank
may make long-term currency stabilization loans. All loans and guarantees
of the Bank must have the consent pf the country whose currency is involved. That is, both direct dollar loans made by the Bank out ofits
capital and guaranteed loans or debentures of the Bank floated in this
country must have the approval of the United States Government.
F#
Ko
Restrictions on Place of Spending
In contrast to the Export-Import Bank whose funds must be spent within
the .United States, no such restrictions vail attach to the loans of the Bank.
G.
Commissions
The Bank will receive a commission of 1 to 1 l/2 percent annually of
the unpaid principal for its risk in guaranteeing or making a loan. Those
commissions are to be held in liquid form, such as United States .Treasury
^bllls or notes, as a special reserve to meet the Bank's obligations arising
out of defaults. This special, reserve should be sufficient to meet the
obligations of the Bank without impairing its capital even if one issue out
of four were to go into default.
H.
80 percent of Bankfs Capital Held as Reserve Fund
If the Bank's special reserve should prove inadequate to meet all
defaults, it will be necessary for the Bank to call upon its capital*
Eighty percent of the Bank's capital will be retained as a surety fund to
be called only to meet losses. Calls on capital for this purpose will be
payable in gold, dollars, or the currency needed to meet the obligations of
the Bank. As a further protection to the investor, the total amount out~
standing at any time of guarantees, participations in loans, and direct
loans made by the Bank may not exceed 100 percent of its unimpaired
subscribed capital, reserves, 'and surplus.
IV* ADDENDUM
The foregoing summary covers the essential functions of the Fund a d
Bank. In addition, it may be useful to have a brief picture of tine internal
mechanism through which the Fund and B^.nk operate. To provide such a
picture a memorandum is attached which sets forth the voting provisions of
the Fund, and Bank.
Of particular interest are sections C f D and
Section C enumerates those things which the Fund
the approval, consent or agreement of the United
enumerate the matters in which the United States
E of the attached memorandum«
and Bank can do only with
States. Sections D and E
has an effective veto power.
EMORANDU
Subject: Relevant Provisions of the Articles of Agreement} Resolutions
of the Savannah Conference Other Actions of the Savannah
Conference, and By-Laws, Concerning the Agenda of the Forthooming Meeting of the Board of Governors of the Bank and the Fund.
THE BANK
Fiscial Year and Annual Meeting of the Governors
the fiscal year of the International Bank for Reconstruction
and Development shall begin on July 1*
That the Chairman shall call the first annual meeting of the Board
of Governors during the month of September
Notice of Meetings
(Section 3 of the By-Laws)
The President shall notify all members of any meeting of the Board
of Governors•
Notice shall be sent to members by telegram or cable not less than
six weeks prior to the date of any meeting, except that in urgent cases
this period may be shortened to not less than 10 days.
Agenda of Board Meetings
(Section 6 of the By-Laws)
The agenda for the Meetings of the Board of Governors shall be
prepared under the direction of the Executive Directors by the President
and shall be transmitted simultaneously with the notice to the members
required to be sent pursuant to Section 3.
Additional subjects may be placed upon the agenda by any governor
or under special circumstances by the President at the direction of the
Executive Directors provided notice thereof shall have been given to the
Bank in writing not less than 7 days prior to the date of the meeting.
The President shall inform the members of any such additions to the
agenda as soon as possible. The Board may authorize the placing of
.any matter upon the agenda even though the required notice shall not
have been given*
Item I Organization of Meeting and Election of Officers
of Bank
Agenda
Election of Chairman and V^ce Chairman (Section 7 of By-Laws)
At each annual meeting of the Board of Governors shall select a
Governor to act as Chairman and et least two other Governors to act
as Vice Chairman until the next annual meeting*
- 2 -
In the absence of the Chairman the Vice Chairman designated by the
Chairman shall act in his place•
Minutes
(Section 9 of the By-Laws)
The Board shall keep a summary record of its proceedings which
shall be available to all members and which shall be filed with the
Executive Directors for their guidance.
Item II Report of the President on Behalf of the Executive Directors
of Bank
Agenda
Report of Executive Directors (Section 10 of the By-Laws)
The Executive Directors shall have prepared for presentation at
the annual meeting of the Board of Governors an annual report in which
shall be discussed the operations and policies of the Bank and which
shall make recommendations to the Board of Governors on the problems
confronting the B?nk.
Financial Statement
Budget and Audits
(Section 19 of the By-Laws)
The Executive Directors shall have an audit of the accounts of the
Bank made at least once each year and on the basis, of this audit shall
submit a statement of its accounts, including a balance sheet and a
statement of profit and loss, to the Board of Governors to be considered
by them at their annual meeting.
Item III Rules and Regulations of the Executive Directors
of Bank
Agenda
Rules and Regulations (Section 16 of the By-Laws)
The Executive Directors are authorized by the Board of Governors
to adopt quch rules and regulations, including financial regulations,
as may be necessary or appropriate to conduct the business of the Bank,
iiny rules and regulations so adopted, and any amendments thereof, shall
be subject to review by the Board of Governors at their next annual
meeting.
Organizatipn and Management (Article V of the Articles of Agreement)
Board of Governors (Section 2 of the By-Laws)
(f) The Board of Governors, and the Executive Directors to the
extend authorized, may adopt such rules and regulations as may be
necessary or appropriate to conduct the business of the Bank.
- 3 -
Item IV Advisory Council
of Bank
Agenda
A Resolution on the Selection of the Advisory Council adopted
at the Savannah Conference, March 16, 1946. (Resolution 5)
That the Executive Directors are requested to examine the problems relating to the selection of the Advisory Council by the Board
of Governors, and to make recommendations to the Board for its consideration at its annual meeting to be held in September 1946.
Organization and Management (Article V of the Articles of Agreement)
Advisory Council(Section 6)
(a) Ihere shall be an Advisory Council of not less than seven
persons selected by the Board of Governors including representatives of
banking, commercial, industrial, labor, and agricultural interests, and
with as wide a national representation as possible. In those fields
where specialized international organizations exist, the members of the
Council representative of those fields shall be selected in agreement
with such organizations. The Council shall advise the Bank on matters
of general policy. The Council shall meet annually and on such other
occasions as the Bank may request.
Item V Applications for membership Italy, Lebanon, Syria and Turkey
of Bank
Agenda
Second Report on the Committee on Membership (Savannah Conference
March 13, 1946)
The resolution of the United States Delegation as amended by the
Delegation of Czechoslovakia reads:
"The Boards of Governors of the International Bank for Reconstruction and Development resolves:
"That membership in the International Bank for Reconstruction
and Development is approved under Article II, Section l(b)
of the articles of Agreement for all countries listed in
Schedule A which are members of the International Monetary
Fund and whose governments accept membership in accordance
with the provisions of article XI until December 31, 1946
(original wording...during the period of six months following the date of this resolution)".
The Report was approved and adopted by the Boards of Governors
at the fourth session, March 14, 1946.
Acceptance of Membership by Schedule A countries, adopted at the
seventh session, March 18, 1946. (Resolution 9 of the Savannah
Conference)
That membership in the International Bank for Reconstruction and
Development is approved under Article II, Section l(b) of the Articles
of Agreement for all countries listed in Schedule A which are members
of the International Monetary Fund and whose governments accept membership in accordance with the provisions of Article XI until December 31*
1946.
Application for Membership
(Section 20 of the By-Laws)
Subject to any special provisions that may be made for countries
listed in Schedule A of the Articles of Agreement, any member of the
International Monetary Fund may apply for membership in the Bank by
filing with the Bank an application setting forth all relevant facts.
submitting an application to the Board of Governors, the
Executive Directors after consultation with the applicant country,
shall recommend to the Board the number of shares of capital stock
to be subscribed and such conditions as, in the opinion of the
Executive Directors, the Board of Governors may wish to prescribe.
Other Actions by Board of Governors
Application for Membership on Behalf of Lebanon, Italy, Syria ?.nd
Turkey.
The Board of Governors received applications for membership in the
Bank from the Governments of Lebanon, Italy, and Syria at the third
session, March 13, 1946. A similar application from the Government
of Turkey was received at the fourth session, March 14> 1946. The
applications were supported by the Governor representing the United
States and were referred to the Executive Directors for consideration
and recommendations.
A communication from the Governor for Greece, supported by the
Governor for Yugoslavia, questioned whether Italy, as a former enemy
country which ha*d not yet signed a peace treaty, should be entitled to
apply for membership. Hie Board of Governors determined at the sixth
session, March 16, 1946, that the communication should be held in the
records for consideration when Italy's application is again before the
Board, but that in the meantime the Executive Directors would not be
precluded from considering technical problems incident to the
application.
- 5-
Membership in and Capital of the Bank
Membership
(Article II of the Articles
of Agreement)
(Section l)
(a) The original members of the Bank shall be those members of the
International Monetary Fund "which accept membership in the Bank before
the date specified in Article XI, Section 2(e).
(b) Membership shall be open to other members of the Fund, at
such times and in accordance with such terms as may be prescribed by
the Bank.
(in this connection nttcnticn is drp/m to 11'. C Action No. 72,
Meeting No. 32, July 2, 194.6, Subject: Applications for
Membership by Syria, Lebanon, Turkey and Italy in the Fund
and the Bank. Action: 1 # The National Advisory Council
advises the United States Executive Directors that the
United States has no objection to the delaying of final action
on the applications of Syria, Lebanon, Turkey, and Italy until
the September meetings of the Boards of Governors. 2. The
National Advisory Council advises the United States Executive
Directors that the United States has nc special terms and conditions
which it desires to have attached to the membership of Turkey,
Syria, Lebanon, and Italy. 3. The National Advisory Council
submits to the United States Executive Directors for their
information a statistical report prepared by the Staff Committee
on proposed quotas and subscriptions for Syria, Lebanon, Turkey,
and Italy).Item VI Liaison with Economic and Social C o u n C xl and Other International
of Bank Organizations
Agenda
At the fifth session, March 15, 1946, a letter from the President
of the Economic and Social Council of United Nations requesting the
establishment of liaison with the Bank was referred to the Executive
Directors with authority to discuss arrangements for collaboration with
the Council and to prepare recommendations for submission to the Board
of Governors.
Organization and Management
(Article V of the Articles of
xigreement)
Relationship to other international organizations
(Section 8 of
the By-Laws)
(a) The Bank, within the terms of this Agreement, shall
cooperate with any general international organization and with public
international organizations having specialized responsibilities in
related fields, ^ny arrangements for such cooperation which would
involve a modification of any provision of this Agreement may be
effected only after amendment to this Agreement under Article VIII #
- 6-
(b) In making decisions on applications for loans or guarantees
relating to matters directly within the competence of any international
organization of the types specified in the preceding paragraph and
participated in primarily by members of the Bank, the Bank shall give
consideration to the views and recommendations of such organization*
Item VII Site of Next Annual Meeting
of Bank
Agenda
THE FUND
Notice of Meetings
(Section 3 of the By-Laws)
The Managing Director shall notify all members of any meeting of
the Board of Governors,
Notice shall be sent to members by telegram or cable not less than
six weeks prior to the date of any meeting, except that in urgent cases
this period may be shortened to not less than 10 days*
Agenda of Board Meetings
(Section 6 of the By^Laws)
The agenda for the meetings of the Board of Governors shall be
prepared under the direction of tixe Executive Directors by the Managing
Director and shall be transmitted simultaneously with the notice to the
members required to be sent pursuant to Section 3«
Additional subjects may be placed upon the agenda by any Governor
or under special circumstances by the Managing Director at the direction
of the Executive Directors provided notice thereof shall have been
given to the Fund in writing not less than 7 days prior to the date
of the meeting. The Managing Director shall inform the members of any
such additions to the agenda as soon as possible* The Board may
authorize the placing of any matter upon the agenda even though the
required notice shall not have been given.
Fiscal Year and Annual Meeting of the Governors adopted at the
Savannah Conference, March 16, '194.6. (Resolution No. 3, Savannah
Conference)
!• That the fiscal year of the International Monetary Fund shall
begin on July 1.
2* That the Chairman shall call the first annual meeting of the
Boards of Governors during the month of September 194-6.
_ 7 —
Organization and Management
(ixrticle XII, of the Articles of
Agreement) (Section 2)
(d) The Board of Governors shall hold an annual meeting and
such other meetings as may be provided for by the Board of Governors
called by the Executive Directors* Meetings of the Board shall be
called by the Directors whenever requested by five members ox* ty
members having one-quarter of the total voting power*
Item I Organization» of Meeting and Election of Officers
of Fund
Agenda
Election of Chairman and Vice Chairman (Section 7 of the By-Laws)
At each annual meeting the Board of Governors shall select a
Governor to act as Chairman at least two other Governors to act as
Vice Chairman until the next annual meeting*
In the absence of the Chairman the Vice Chairman designated by
the Chairman shall act in his place*
Secretary
(Section 8 of the By-*Laws)
The Secretrry of the Fund shall serve as Secretpry of the Board
of Governors.
Minutes
(Section 9 of the By-Laws)
The Board shall keep a summary record of its proceedings which
shall be available to all members and which shall be filed with the
Executive Directors for their guidance*
Item II Report of Executive Directors
of Fund
Agenda
Report of Executive Directors
(Section 10 of the By-Laws)
The Executive Directors shall hc?ve prepared for presentation at
the annual meeting of the Board of Governors an annual report in
which shall be discussed the operations and policies of the Fund and
which shall make recommendations to the 3oard of Governors on the
problems* confronting the Fund*
Item III Financial Statement
of Fund
Agenda
Budget and Audits
(Section 20 of the By-Laws)
The Executive Directors shall instruct the Managing Director to
prepare an annual administrative budget to be presented to them for
approval* The budget so approved shall be incorporated in the
annual report to be presented to the Board of Governors at their
annual meeting*
- 8 -
The Executive Directors shall have an audit of the accounts of
the Fund made at least once each year and on the basis of this audit
shall submit a balance sheet and a statement of operations of the Fund
to the Board of Governors to be considered by them at their annual
meeting*
Item IV Applications for Membership of Italy, Lebanon, Syria» and Turkey
of Fund
Agenda
Applications for Membership (Section 21 of the By-Laws)
Subject to any special provisions that may be made for countries
listed in Schedule A of the Articles of Agreement, any country may
apply for membership in the Fund by filing with the Fund on application
setting forth all relevant facts.
When submitting an application to the Board of Governors, the
Executive Directors after consultation with the applicant country shall
recommend to the Board the amount of the quota, the form of payment,
the parity of the currency, conditions regarding exchange restrictions,
and such other conditions as, in the opinion of the Executive Directors,
the Board of Governors may wish to prescribe*
Acceptance of Membership by Schedule A countries adopted by the
Board of Governors at Savannah Conference March 14, 1946 •
(Resolution No* 9 of the Savannah Conference)*
That membership in the International Monetary Fund is approved
under Article II, Section 2 of the Articles of Agreement for all
countries listed in Schedule A whose governments accept membership
in accordance with the provisions of Article XX until December 31, 1946*
Applications for Membership on Behalf of Lebanon, Italy,
Syria, and Turkey (Actions by the Board at Savannah)
The Board of Governors received applications for membership in the
Fund from the Governments of Lqbanon, Italy, and Syria at the third
session, March 13, 194-6. A similar application from the Government
of Turkey was received at the fourth session, March 14, 1946. The
applications were referred to the Executive Directors for consideration
and recommendations.
A communication from the Governor for Greece, supported by the
Governor for Yugoslavia, questioned whether Italy, as a former enemy
country -which has not yet signed a peace treaty, should be entitled to
apply for membership. The Board of Governors determined at the sixth
session, March 16, 1946, that the communication should be held in the
records for consideration when Italy's application is again before the,
Board, but that in the meantime the Executive Directors would not be
precluded from considering technical problems incident to the
application*
~ 9 -
Second Report of the Committee on Membership
(Savannah Conference
March 13, 1946)
The resolution of the United States Delegation as amended by the
Delegation of Czechoslovakia reads:
"The Board of Governors of the International Monetary Fund
Resolves:
That membership in the International Monetary Fund is approved under
Article II, Section 2 of the Articles of Agreement for all countries
listed in Schedule A -whose governments accept membership in accordance
with the provisions of Article XX until December 31, 1946 (original
wording*•••during the period of six months following the date of this
resolution)l!.
The report was approved and adopted by the Board of Governors at
the fourth session, March 14, 1946,
Membership (Article II, Articles of Agreement of the Fund)
Original members (Section 1 of the By~Laws)
The original members of the Fund shall be these of the countries
represented at the United Nations Monetary and Financial Conference
whose governments accept membership before the date specified in
Article XX, Section 2(e).
Other members
(Section 2 of the By-Laws)
Membership shall be open to the governments of other countries
at such times and in accordance with such terms as may be prescribed
by the Fund.
(in this connection attention is drawn to NIC Action No. 72,
Meeting No. 32, July 2, 1946 - Subject: Applications for
Membership by Syria, Lebanon, Turkey and Italy in the Fund
and the Bank. Action: 1* The National Advisory Council
advises the United States Executive Directors that the
United States has no objection to the delaying of final
action on the applications of Syria, Lebanon, Turkey, and
Italy until the September meetings of the Boards of Governors.
2m The National Advisory Council advises the United States
Executive Directors that the United States has no special
terms and conditions which it desires to have attached to
the membership of Turkey, Syria, Lebanon, and Italy.
3. The National Advisory Council submits to the United States
Executive Directors for their information a statistical report
prepared by the Staff Committee on proposed quotas and subscriptions for Syria, Lebanon, Turkey, and Italy).
- 10 -
Item V Request for Revision of Quota
of Fund
Agenda
Request by Paraguay for Upward Revision of Quota
(Actions by Board of Governors at Savannah Conference)
The Government of Paraguay presented a request for an increase
in its quota to $5,000,000. At the fifth session, March 15, 1946,
the Board referred the request to the Executive Directors "with the
request that they report as promptly as possible to the Board of
Governors and upon receipt of that report by the Board of Governors,
the Board of Governors shall take a vote on it promptly.
Adjustment of quotas
(Article III, Section 2P of the Articles
of Agreement)
The Fund shall at intervals of five years review, and if it deems
it appropriate propose an adjustment of, the quotas of the members*
It may also, if it thinks fit, consider at any other time the
adjustment of any particular quota at the request of the member
concerned. A four-fifths majority of the total voting power shall
be required for any change in quotas and no quota shall be changed
without the consent of the member concerned.
Payments when quotas are changed
(Article III, Section U of the
Articles of Agreement)
(a) Each member which consents to an increase in its quota shall,
within thirty days after the date of its consent, pay to the Fund
twenty-five percent of the increase in gold and the balance in its
own currency. If, however, on the date ?«rhen the member consents to
an increase, its monetary reserves are less than its new quota,
the Fund may reduce the proportion of the increase to be paid in
gold, (b) If a member consents to a reduction in its quota, the
Fund shall, within thirty days after the date of the consent, pay
to the member an amount equal to the reduction. The payment shall
be made in the member! s currency and in such amount of gold as may
be necessary to prevent reducing the Fund's holdings of the currency
below seventy-five percent of the new quota..
Item VI Rules and Regulations
of Fund
Agenda
Rules and Regulations
(Section 16 of the By-Laws)
The Executive Directors are authorized by the Board of Governors
to adopt such rules and regulations, including financial regulations,
as may be necessary or appropriate to conduct the business of the Fund.
Any rules and regulations so adopted, and any amendments thereof, shall
be subject to review by the Board of Governors at their next annual
meeting.
- 11 -
Articles of
Article XII, Section 2(g) the Board of Governors, and the
Executive DirectbrS to the extent authorized, may adopt such
rules and regulations as may be necessary or appropriate to conduct the business of the Fund,
Item VII Agreement with the United Nations
of Fund
Agenda
Request of Economic and Social Council
(Actions by Board of
Governors at Savannah)
At the fifth session, liarch 15, 1946, a letter from the President
of the Economic and Social Council of United Nations requesting the
establishment of liaison with the Fund was referred to the Executive
Directors with authority to discuss arrangements for collaboration with
the Council and to prepare recommendations for submission to the Board
of Governors.
Relations with Other International Organizations (article X,
of the Articles of Agreement)
The Fund shall cooperate within the terms of this Agreement with
any general internrtional organization and with public international
organizations having specialized responsibilities in related fields.
Any arrangements for such cooperation which would involve a modification
of any provision of this Agreement may be effected only after
amendment to this Agreement under Article XVII.
Item VIII Place of Second Annual Meeting
of Fund
Agenda
Item IX Other Business
of Fund
Agenda
Reference is made to a letter dated August 7, 1946 to Mr. John
W # Snyder from Antonio Espinosa de los ^onteros, Governor of the Fund
for Mexico, suggesting he has P. certain matter thrt he wishes to have
placed on the agenda for discussion.
>f Bunk
r *Q
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
Voting power of member
countries
Total subscription
Percent of total
Amount (in millions
of dollars)
United States
United Kingdom
China
France
India
37.12
15.37
7.25
5.51
4.93
3,175.0
1,300.0
600.0
450.0
400.0
Canada
Netherlands
Belgium
Czechoslovakia
Poland
4.06
3.48
2.90
325.0
275.0
225.0
125.0
125.0
Brazil
Union of South Africa
Denmark
Mexico
Norway-
1.51
1.45
1.74
1.74
1.08
1.04
.87
105.0
100.0
68.0
65.0
50.0
Egypt
Yugoslavia
Chile
Cuba
.75
.75
Greece
.58
40.0
40.0
35.0
35.0
25.0
Iran
Peru
Philippine Com.
Uruguay
Luxembourg
.57
.49
.45
.41
.41
24.0
17.5
15.0
10.5
10.0
Bolivia
Iraq
Ecuador
Ethiopia
Costa Rica
.37
.36
.33
.32
.31
7.0
6.0
3.2
3.0
2.0
Dominican Republic
Guatemala
El Salvador
Honduras
Iceland
.31
.31
.30'
2.0
2.0
1.0
1.0
1.0
Nicaragua
Paraguay-
.30
.30
.29
Panama
Colombia
.70
.70
.30
.30
.8
.8
.2
•••••
, f
Total
100.00±/
7.670.0
1/ The figures shown in the table do not add to 100.0 because of rounding*
• • • • t
INTERNATIONAL MONETARY FUND
Percent of Total
Voting Power of
Member Countries
Country
United States
United Kingdom
China
France
India
Canada
Netherlands
Belgium
Czechoslovakia
Poland
Brazil
Union of South Africa,
Denmark
Mexico
Norway-
33.U
5.08
2,750.0
1,300.0
550.0
450.0
400.0
3,88
3.58
2.99
1.79
1.79
300.0
275.0
225.0
125.0
125.0
2.09
1.49
1.11
150.0
100.0
68.0
90.0
50.0
15.83
6.87
5.67
1.37
.90
.84
Egypt
Yugoslavia
Colombia
Chile
Cuba
1.02
.90
.90
.90
Greece
Iran
Peru
Philippine Commonwealth
Uruguay
Luxembourg
Bolivia
Iraq
Ecuador
Ethiopia
Costa Rica
Dominican Republic
Guatemala
El Salvador
Honduras
.78
.60
• 60
.48
.48
.42
.42
.39
.36
.37
.36
.36
.36
*33
*33
,31
Iceland
Nicaragua
Paraguay
Panama
Total,,
Fund Quota
(Amount in Millions of Dollars)
45.0
60,0
50,0
50.0
50.0
40.0
25.0
25.0
15.0
15.0
10,0
10.0
8.0
5.0
6.0
5.0
5.0
5vO
2r.5
2,5
1.0
i32
2,0
;32
.30
2.Q
...... 100.00 1/
.5
7*397.5
1/ The figures shown in the table do pot add to 1QO?QQ because pf rounding.
Payment Obligations
Bank
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
MEMBER COUNTRY OBLIGATIONS i n GOLD a n d DOLLARS, I N OWN
CURRENCY, AND FOR FUTURE CALL
(All figures in United States Dollars)
Country
Gold or Dollars*
Belgium
Bolivia
Brazil
Canada
Chile
4,500
Members Own Currency**
Future Call
2,100
6,500
700
40,500
1,260
19,100
58,500
6,300
180,000
5,600
84,000
260,000
28,000
China
Costa Rica
Cuba
Czechoslovakia
Denmark
12,000
108,000
40
360
700
2,500
1,360
6,300
22,500
12,240
480,000
1,600
28,000
100,000
54,400
Dominican Rep.
Ecuador
Egypt
El Salvador
Ethiopia
40
360
576
140
64
800
20
7,200
60
180
540
France
Greece
Guatemala
Honduras
Iceland
9,000
500
81,000
4,500
40
360
180
India
Iran
Iraq
Luxembourg
Mexico
8,000
Netherlands
Nicaragua
Norway
Panama
Paraguay-
180
360,000
20,000
1,600
800
800
120
200
1,300
72,000
4,320
1,080
1,800
11,700
320,000
19,200
4,800
8,000
52,000
5,500
49,500
220,000
20
20
480
Peru
Philippine Com.
Poland
Union of S,A.
United Kingdom
United States
Uruguay
Yugoslavia
TOTAL
1,600
2,560
32,000
800
2,400
16
144
640
1,000
9,000
40,000
4
16
36
144
160
640
350
3,150
2,700
22,500
18,000
234,000
14,000
12,000
100,000
80,000
1,040,000
300
2,500
2,000
26,000
635,000
210
800
724,900
#•••4
1,890
7,200
809,100
2,540,000
8,400
32.000
6.136,000
Including ejvtiEe 20$ payment a/c U#S*
Not including the U.S» whose 1B% payment i s covered i n gold and
payment column*
3
INTERNATIONAL MONETARY. FUND
Payment Obligations Based on Quotas
Gold or U.S. Dollars
(thousands)
Country
Belgium
Bolivia
Brazil
Canada
Chile
China
Colombia
Costa Rica
Cuba
Czechoslovakia
Denmark
Dominican Republic
Ecuador
Egypt
El Salvador
Ethiopia
France
Greece
Guatemala
Honduras
Iceland
India
Ira*
Iraq
Luxembourg
Mexico
Netherlands
Nicaragua
Norway
Panama
Paraguay
Peru
Philippine Com,
Poland
Unitn of S. A,
United Kingdom
United States
Uruguay
Yugoslavia
TOTAL.
56,250
2,500
37,500
75,QOO
12,<|00
137,500
12,500
1,250
12,500
31,250
17,000
1,250
1,250
11,250
625
1,500
112,500
10,000
1,250
625
Members Own Currency
(thousands)
168,750
7,500
112,500
225,000
37,500
412,500
37,500
3,750
37,500
93,750
51,000
3,750
3,750
33,750
1,875
4,500
337,500
30,000
3,750
1,875
750
250
100,000
6,250
2,000
2,500
22,500
68,750
500
12,500
125
500
6,250
3,750
31,250
25,000
325,000
687,500
3,750
15,POO
1,500
18,750
11,250
93,750.
75,000
975,000
2,062,500
11,230
45,000
X ,.849,375
5,548,125
300,000
18,750
6,000
7,500
67,500
206,250
1,500
37,500
375
xCTONALMONETARY
Principal Staff
Title
Name
Edward Um Bernstein
Acting Director of Research
Richard Brenner
Counsellor
Andre van Campenhout
General Counsel
V* Frank Coe
Secretary
A, IJ# Dantas de Brito
Counsellor
Henry E, Edmunds
Archivist
John Lenox Fisher
Director, Operations Dept*
Irving Friedman
Division Head, Research Dept#
Walter Gardner
Division Head, Research Dept*
Camille Gutt
kanaging Director
Ervin Hexner
Counsellor
Earl Hicks
Assistant Division Head, Research Dept.
Roman L* H o m e
Assistant Secretary
George Ingram
Budget Assistant
Martin L t Lostus
Librarian
Felipe Pazos
Acting Division Head, Research Dept.
Charles M, Powell
.tijssistant Comptroller
Robert Jf Jtolin
Assistant to Managing Director
Ernest Sturc
Division Chief, Research Dept.
Phillip Ihorsop
assistant to the Secretary
Robert Tritfin
Apting Division Head, Research Dept*
Florence Wagner
Assistant to the Secretary
Walter H # Windsor
Director of Material
Principal Staff - Bank
INTERNATIONAL BANK
Principal Staff
Name
Title
Eugene Meyer
President
Harold D. Smith
Vice President
Richard H* Demuth
Assistant to the President
John H* Ferguson
Special Assistant to the
President
Chester A # McLain
General Counsel
Ansel Luxfordi
Assistant General Counsel
Morton M* Mendels
Secretary
!• B. Rist
Director of Eesearch
Crena de longh
Treasury of the Bank
Provisional
SCHEDULE OF UNITED SIkTES REPRESENTATION ON CCMMITTEES
INTERNATIONAL MONETARY FUND
1» Procedures Committee
U. S f Governor
U* S # Alternate Governor
Advisers
John W # Snyder
William L* Clayton
Harold Glasser
Norman Ness
U. S. Executive Director
U f S # Alternate Executive Director
H, D, White
George F # Luthringer
2. R-qleg and Regulations
U# S f Governor's Temporary
Advisers
Marriner S f Eccles
Joseph B. Friedman
J» Burke Khapp
L f W # Knoke
U # S ? Executive Director
U. Si Alternate Exequtive Director
Ef Df
George Ff Luthringer
3# Quota Revisions
U # S9 Governor's Tempo;nary Alternate
Advisers
William McCJiesney Martin, Jr.
Herbert £• Gaston
Harold Glasser
I. W a Knoke
U# 5« Executive Director
U^ S. Alternate Executive Director
E. Df White
George Ff Luthringer
» Membership
U. S« Alternate Governor
Advisers
William L, Clayton
Joseph B. Friedman
Norman
U# S. Executive Director
U# S # Alterna^te Executive Pirector
H # D # White
George Ft Luthringer
5. Financial
U f S # Governor's Temporary Alternate
Advisers
Alfred Schindler,
Arthur Paul
Ivan T?hite
IS. S, Executive Director
U f S # Alternate Executive Director
H, D. White
George F* Luthringer
- 2 6* Other Business
U# S # Alternate Governor
advisers ~
William L« Clayton
Norman Ness
August kaffyrr
U # S # Executive Director
U. S. Alternate Executive Director
H. D# White
George F# -Luthringer
B, INTERNATIONAL BANK
1#
Procedures Committee
JJm S. Governor
U t S # Alternate Governor
Advisers
John W # Snyder
William L* Claytoxi
Harold Glasser
Norman Ness
U. S« Executive Director
U« S t Alternate Executive Director
Emilio G # Collado
John S # Hooker
2. Rules and Regulation^
U, S t Governor's Temporary Alternate
Adviser
Marriner S # Eccles
J* Burke Khapp
U # S*. Executive Director
U f S; Alternate Executive Director
Emilio G # Collado
John 5 # Hooker
3. Quota Revisions
U* S # Governor's Temporary Alternate
Advisers
William McChesney Martin^ Jr#
Herbert E#. Gaston
August Maffry
Norman Ness
U. S f Executive Director
U t S # Alternate Executive Director
Emilio G# Collado
John S t Hooker
Membership
U # S # Alternate Governor
Advisers
S # Executive Director
« S. Alternate Executive Director
#
William L # Clayton
Norman Ness
Ivan White
Emilio^G# Collado
John S # Hooker
- 3 5* Financial
6#
U* S # Governor's Temporary Alternate
Adviser
Alfred Schindler
Arthur Paul
UU S # Executive Director
U # S«, Alternate Executive Director
Emilio G # Collado
John S # Hooker
Advisory Council
U* S, Governor's Temporary Alternate
Advisers
James J#
August Maffry
Efetrold Glasser
>»alter C # Louchheim
U« S f Ebcequtive Director
U« S» Alternate Executive Director
Emilio Gf Collado
John S # Hooker
7# Other Business
U f S f Alternate Governor
Advisers
William L. Clayton
Herbert E # Gaston
Joseph B. Friedman
Harold Glasser
U. S. Executive Director
0* S^ Alternate Executive Director
Emilio Gf Collado
John S # Hookey
OTHER ADVISERS TO THE U. S. GOVERNOR AND THE U. S, ALTERNATE GOVERNOR
Senator Robert F, Wagner
Senator Charles V7# Tobey
Congressman Brent Spence
Congressman Jesse P # V/olcott
- 0 ~
A« N. Overby
(These advisers may attend and assist all Committees and will
be available to assist the U» S# Governor and the U« S» Alternate
Governor on all matters)
A« N f Overby
September 26, 1946
Non-Member Figures
BRETTON ^OODS PARTICIPANTS 17HO ARE NOT YET MEMBERS
OF THE INTERNATIONAL BANK FOR J f f i d W
AND DEVELOPMENT
Payments by Categories based on Quotas Assigned a t
Bretton 'Joods
( A l l f i g u r e s i n United S t a t e s D o l l a r s )
Country
Russia
Gold and Dollars
- thousands -
Members Own purjrenpy
- thousands r
24,000
Future 6*11 Total Quota
-thousands- ; -thousands?960,000
1,200,000
Australia
4,000
36,000
160,000
-200,000
New Zealand
1,000
9,000
40,000
50,000
210
1,890
8,400
10,500
Haiti
40
360
1,600
2,000
Ireland
3P.
180
800
1,000
Liberia
10
90
400
5P0
Venezuela
I
BRETTON WOODS PARTICIPANTS TOO ARE NOT YET MEMBERS
OF THE INTERNATIONAL MONETARY FUND
Payments By Categories Based on Quotas Assigned at
Bretton Woods
(All figures in thousands of U.S. dollars)
Country
Quota
Russia
Members Own Currency
Gold and Dollars
1,200,000
900,000
300,000
200,000
150,000
50,000
New Zealand
50,000
37,500
12,500
Venezuela
15,000
11,250
3,750
5,000
3,750
1,250
500
375
125
Australia
Haiti
Liberia
BOARD OF GOVERNORS. OF THE BANK
FIRST ANNUAL MEETING
Suggssted Committee Assignments
Member
Rules and Subscription
Advisory
Procedure Regulations Revisions Membership Financial Council
Belgium
X
X
Bolivia
Brazil
X
Canada
X
X
Chile
X
China
X
X
Costa Rica
Cuba
C zocho Slovakia
X
Demark
X
ttcm* Republic
Ecuador
Eteypt
X Reporting
*1 Salvador
Ethiopia
X V.Chair
trance
X
X
Greece
Guatemala
Honduras
Iceland
India
X
X
Iran
Iraq
Luxembourg
X Reporting
Mexico
X
Netherlands
X
Nicaragua
Norway
Panama
X
Paraguay
Peru
Philippine Rep.
X
Poland
X
tJnion So .Africa
X
United Kingdom X V.Chair t
United States X Chair X
Uruguay
Yugoslavia
X Chair
X
'X' Chair
X
X Reporting
X
X
X
X
X Chair
•
X Reporting
X
X
X
X Chair
X Chair
X
X
X
X
X
X
X
X
X
X Reporting
X *
X
X
X
X
X V.Chair
X
X
X V.Chair
X
X
X
- X
X
X
X
X Reporting
X
X
X
X
X V.Chair
X
X
X
X V.Chair
X
X
X
X
X
X
X
X
X
X
X
BOARD OF GOVERNORS OF THE FUND
FIRST ANNUAL MEETING
Suggested Committee Assignments
Member
Belgium
Bolivia
Brazil
Canada
Chile
China
Colombia
Costa Rica
Cuba
Czechoslovakia
Denmark
Dom. Republic
Ecuador
Egypt
El Salvador
Ethiopia
France
Greece
Guatemala
Honduras
Iceland
India
Iran
Iraq
Luxembourg
Mexico
Netherlands
Nicaragua
Norway
Panama
Paraguay
Peru
Philippine Rep»
Poland
Union So. Africa
United Kingdom
United States
Uruguay
Yugoslavia
Rules and Subscription
Membership Financial
Procedure Regulations Revisions
X
X Reporting
X
X
X
X
X
X
X
X
X
X Chair
X
X
X
X
X.
X
X
X
X
X
X
X V.Chair
X
X
X
X
X
X Reporting
X
X
X
X
X
X
X V.Chair
X
X
X Chair
X
X V.Chair
X
X
X
X
X
X
X
X Reporting
X
X
X Reporting
X
X Chair
X
!
X
X
X
I
1i Reporting
X
X Chair
X V,Chair X
X Chair
X
X
X
X
X
X
X
X
X
X
X V.Chair
@FedFRASER