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June 5, 194-5

• The debate on the -House floor on tlie Bretton Woods Agreements Act
opened on June 5 and is to be limited to two days.
. • •;


The debate was carried on almost entirely by members of the House
Banking and Currency Committee. Representatives Spenco (D. Ky.),. Chairman of
the Committee, Wolcott (R. Mich.), ranking minority, member, and Patman (Texas),
Brow. (£&.}, Thorn (ohio), Outland (Calif.), Woodhouse (Conn.) and Folger (N.C.),
all Democratic members of the Committee, spoke at length in favor of the Agreements as such and of the bill. The three Republican members of the Committee-'
who voted against the bill in the Committee, Representatives Smith (Ohio),
Buffett (Nebr.) and Simmer (111.), opposed the Bpetton Woods Agreements as such
and the' bill reported out by the Committee. Several other members of the House,
both Democrats and Republicans, indicated their approval of the bill"and two :
Republican members indicated either skepticism or definite disapproval. Representative Spence asked the Clerk to read a letter from President
Truman urging prompt enactment of the legislation and•commending the-nonpartisan
spirit in which tho•Committee had'acted oh the bill, and a letter from Mr.
Burgoss, President of the American Bankers Association, saying the new bill
reported out by the Committee Was a substantial improvement over the old one
and would'^aid in the .effective accomplishment of the purposes of the whole
program." 'Representative Sponce'stressed the need for international economiccooperation as a means of preventing future wars. He said he believed'the
bill as amended clarified the agreements but did not change "a word, a letter,
or a punctuation mark of the spirit of the agreements."
Representative Wolcott stressed the fact that the success of any
institution depends on its administration and said he believed the Fund and
Bank, properly administered, could be an important influence toward stabilizing
the currencies and economies of many nations. Representativo Wolcott spoke at
length on the purposes of the Fund, the provisions providing for stabilizing
the values of member currencies and for setting initial values, and the numerous provisions in the Fund Agreement which limit the conditions under which
and the purposes for which a member can obtain assistance from the Fund. Representative Wolcott then mentioned the interpretation of the Fund's authority
in tho new bill as an added protection against misuse of the Fund and the provisions providing for coordination of the foreign financial activities of
United States Government agencies. Representative ?ifolcott quoted the American
Banker of May 29, 1945, praising vsry highly tho amendments to tho original
bill and a letter from Mr. Charles S. Dewey saying ho would vote in favor of
tho bill as amended.
• Representative Brown stressed the importance of flourishing exports
of both agricultural and industrial products to the American fanner and the
importance of exchange stability for a flourish export trade. Representative
Brown said he thought trie Bretton Woods plans were better than any alternatives that had been suggested. He stressed the safeguards against misuse of

the i ' n and mentioned particularly that there is no reason to believe a loan to
Russia will not always be sound. Representative Brown commented on the provision
in the bill interpreting the -Bank's powers and said he thought clarification of
the Bank's power to make long-term stabilization loans would contribute in an
important degree to the success of the Fund.
Representative Patman sold he thought all countries had a lot to gain
from the proposals but this country more than any .other. He stated that bankers
were opposing the plan's believing them contrary to their-own selfish interests.
Representative Smith spoke almost entirely about the interpretations
of the Fund's authority included in the new bill. He said the phrases designed
to limit the .Fund's authority to short-term lending in fact did not do so since
they provide for assistance in meeting cyclical fluctuations in. trie, balance of
payments and- a cycle may last eight years or more. Furthermore, tte thought the
statement interpreting the Fund's powers as far as financing relief, reconstruct ion, and sustained outflows of capital are concerned was actually dangerous
in that it implied that the seemingly clear language of the Fund Agreement on
these points could be interpreted one way or another. Representative .Smith also
said he objected to the C.F.D. interpretation of the Bank's powers on-the ground
that it would open the door to the Bank's making unwise loans.
Representative Buffett stressed differences in interpretation of the
Fund Agreement as between American and British experts, the danger of exchange
restrictions being maintained under the Agreement, British bilateral financial
arrangements, the complicated character of the plans., inflationary dangers', and
the danger of too easy access to the Fund.
Rerrresentative Sumner also spoke of British interpretations of the Fund
and said the plans were the "worst swindle in world history." She commented on
giving up our dollars for depreciated currencies,.the scarce currency provisions
authorizing repudiation in advance, and Americans becoming the economic slaves
of foreign governments.

Board of Governors
of the Federal Reserve System
Division of Research and Statistics
June 6, 1945