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June 6 and 7, 1945

June 6 Debate
Representative Outland (D. Calif.) opened the second day of debate on
the House floor regarding the Bretton Woods enabling legislation. In refutation
of the objections advanced by the American Bankers Association he stressed the
primary importance of the Fund in the Bretton Woods program, the adequacy of the
safeguarding provisions of that institution, the probable inadequacy of private
investment in the absence of government assistance, and the necessity of affirmative action to hasten world recovery from the effects of war. In answer to
critics who would prefer the gold standard, ho insisted that the International
Monetary Fund would improve upon that standard by creating stability without
imposing harmful rigidities. Representative Thorn (D. Ohio) outlined the method
by which the Fund's operations would assist nations suffering from temporary
exchange shortages to continue to engage in multilateral trade; in the absence
of the Fund they might,seek to balance trade through bilateral deals.
Representative Smith (R. Ohio) opposed the legislation on the ground
that-various nations were interpreting the Bretton Woods program in different
ways* He criticised the Treasury for what he termed its "colossal propaganda
program" and suggested that the Committee for Economic Development had been influenced in favor of the program by government generosity in providing the Committee with Washington offices. He charged that the Bretton Woods Agreements
would legalize currency debasement, could foreshadow rationing of world trade,
and would result in authoritarian control of capital transfers and currency transactions. Representative Barry (D. N.Y.) spoke in favor of the Fund and claimed
authorship of the amendment providing that one individual shall be United States
Governor for both the Fund and Bank. Representative Hill (R. Col.) opposed the
legislation and advocated international bimetal ism. Representative Brumbaugh
(R, Pa.) stated that ho supported the legislation with some hesitancy since he
y/ould prefer to see the Fund postponed for at least n year. A number of brief
speeches by members of both major parties showed strong support for the Bretton
Woods program on the basis of the importance of world cooperation in economic
affairs us a step-toward international peace.
Representative T,-aie (R. Iowa) expressed the belief that the United
Statos should take the lead in restoring international confidence and establish
the basis for this country's supremacy in international finance. Representative
Ellis (R. W.Va.) saw the United States assuming the role of a world Santa Glaus
and expressed his opposition to the proposed legislation. Representative Rains
(D. Ala.) reviewed some of the horrors of war as he had witnessed them on his
recent visit" to concentration camps in Germany and supported the Bretton Woods
program as a stop toward mutual faith and good will among the nations of the
Representative Sumner (R. 111.) stated that the original contribution
of this country would be only the beginning — "only the initiation fee" — and
that the scarce currency "sanction" would force the United States to contribute
very large additional sums. She did not wish to place vast power in the hands


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of international bureaucrats. Representative Douglas (D. Calif.) argued for the
Bretton Woods program as a contribution to the future peace of the world. Representative Hocli (D. Pa.) based hie acceptance of the program on his confidence in
the governmental and private experts who had supported the proposals. Representative Doyle (D. Calif.) called for support of the "practical idealism" involved in the program.
Representative Voorhis (D. Calif.) supported the Bretton Woods program
as far better than any practical alternative while der>loring its emphasis on the
"gold superstition." He believed government representatives rather than private
bankers should dictate world investment policies and possess over-all control of
international exchange transactions. He stressed the pressur-3 which the program
would exert on all nations to balance their imports and exports of real goods
and services and the significance of this pressure for the United States. Representative Crawford (R. Mich.) in- supporting the ponding legislation stressed
the necessity of post-war foreign investment of United States capital and pointed
out that the Bank would be largely dependent on private sources for its invostable
funds. Representative Buffett (R. Nebr.) spoke in opposition to the program,
repeating that "fundamental disequilibrium" was an indefinite criterion which
left the "way open for dissipation or freezing of the Fund's assets. Representative Patman (D. Toxcis) contended that op. ositicn to Bretton Woods arose from an
"international banking ring" many members of which had selfish interests in mind,
from ill-informed cr misguided persons who failed to understand the program, and
from isolationists."

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Representative Sumner of Illinois moved an amendment which would have
permitted the United States to join the Bank but not the Fund. Chairman Spence
,(D. Ky.) pointed out that Bank membership was possible only to members of the
Fund. The .amendment was'defeated 120 to 18. As the reading of the bill continued, Representative Voorhis (D. Calif.) offered an amendment to enlarge the
proposed National Advisory Council by including as members the Chairmen and
ranking minority members of the Banking and Currency Committee^s of both Houses
of Congress. Chairman Spence led the opposition to this amendment which was defeated. When tho reading of the bill had been completed, Representative Sumner
moved that tho bill bo recommitted to the Banking and Currency Committee with
instructions to report the bill back to the House in a form which would be consistent with the amendment with which this paragraph begins, i.e., would "strike
out the Fund." Majority Leader McCornack (D. Moss.) thereupon moved that further
consideration of the bill be postponed until Thursday morning*
June 7 Vote
The House voted to accept the Bretton Woods Act by a vote of 345 in
favor to 18 opposed. A total cf 69 members did not vote. The 18 Republicans
who opposed the bill-were is fellows: Representatives Btfffett (Nebr.), Clovenger (Ohio), Ellis (W. Va.), Gwynno (Iowa), Jones* (Ohio), Knutscn (Minn.), Lenke
(N. Dak.), Mason (ill.), O'Kara (Minn.), Reed (N.Y.), Rich (Pa.), Rizley (Okla.),
Robsion (Ky.), Schwabe (Mo.), Schwabe (Okla.J, Scrivner (Kans.), Smith (Ohio),
and Sumner (111.).
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.Board of Governors
of the Federal Reserve System
Division of Research and Statistics
Juno 8, 1945