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August 22, 1947. ear Johns I «i& mrty that I got «.w«y b^for* bavicg an opportunity to discuss vith you & eonpie of s e t t e r s relating to the tion of the Interratiotyil Fund ^ad Bauk which gire ae concern* I should like to give you ay vi#^s on DMNM s e t t e r s i& t l » following letter* I do Bsot think that this l a t t e r should be distributed m ft H&tloaeJL Advisor/ Council document, but i f you It Appropriatev y&u mi^ht s^ad coping of i t to the othar afiz&b«r« of th» Counell aa4 discuss i% with tbd« Ixi Ixa<mtlv@ £ to I PIS not .fully infonaed concerup9liei*»» biut ClPMi wtoafc I NrM learned, I M v©ry mi^b e,fr&id t h ' t there i s & £#tbXie ge&a«tel in lift* n r f ^ I t ^©«4fi to aw tfest tfcege policies would nat stand « body ^3^3 that the prestige end reputation of the 5*und NHl th@ Bight b® eeriouftly da».ge«S i f public a t t e s t i o ^ w#r# focused upon Tour correspsadeace t h i s spring Congresssmn Swith—see S»A»C« Doeuaent 414-—i» j^st • l of tslwrt i#e auKf eaqpeet. I s ill® f i r s t place, I *» opposed in Sflaelple to the of tftjc-free salaries f stad I t^isk «i #^ric«if sdstake vas at tb*5 iS«T»asah Conferene^ vb@B i t mts agreed th&t the ftond iflfl Bank vould SSQT «»l&ri#» on t h i s basis* I vas not jpreseat at th« SavRsanah but I registered s j objections s t t i » t tiae through Mr# , vho 1«»« represostiAg Mi there • I mt fWrtlisr viMi the mrgii;oents vhich h&-m b«*en edv^noed ta justify t h i s policy, l*e* that i t vould e&uftlise tlw islBS^MSM j>ay' of natioimli of ^ holding position* of equal rt^sik in the Fuud and evert. I do not find this arguaaent co&Tlncicg in rimt of %Sm disadvantages «nd inequities of tax-free pUgmtt&U UKI «e point to the fact tfcSj&j ft^ edntr&slard vlth the position of the gra&i MLk of Aaerle&n cltisRess, Atterican employees of the Fund and B&iak M*e rendered LE Honorable Mm n. $nyder -2- tmaam fro® change?* la the ?eder*l inooaw tax# &nd thea r*e*ivw the *&&f» "t&ke-hone jUjr* -* persons with performing tte# same work* that tha Senate h%$ turned down the proposal t o o*» £reai tft* tlto salaries* paid to Africa© natloeal* by the Oaitea fotions, I preens* that i t v i l l b® nectfea&ry for the United Stftt«*i to ttit&m th« Ftiisd «ud B&nk th»t i t e&miot giT» effect to the Eeselutloa |»ii«MKi *t Saveifliwih •wHllng ^m wmfo®r gpwmrts&at* to grant tax «x»$»|>ti0B to ^ l a r i a s paid by th$se littitltatlon** Ac • resuJ.t9 »o Xoflf a* the Ftmd &,sd Saak p»y »&l%rl*s <»i i ta*-fri*« bsaia they v i l l h&v® to coatina« resitting l*rge &a<m«t»' directIT to the Oaitcid State* Tlli<iPI>|< I ioagine that tltfl will b® I rery tore point with otber comitria^, vfeo a»y veil rai®# th« matter at I t ®®#a@ to m thet cmr iaabliitjr to iapleaent the E#toX»tioa m\* glvmt u$ m gooci «X«OM for reversing our and advocating th« payiwnt of a i l ffa&d aud 3%nk n^lari#a o» a aalfoxB taxable banii* 1 feel sure that *«& Wttld encounter no «#riou» #bj«ietios# tofisuefe« eh«nge on tta* part of foreign «oun«X reoogniaui th&t if thi® v«fr© d$>&^9 the fund and Bank, would to i&etir larger $^p#.o<lituresj tit@y would hair# io p«y their for* ea|>X07ee» the lawae gro^s galar!** a» Aawrioan en^loyees» and r e t l l f as easing on |my®#at$ of IMBM to for«ifa eountrie* tiaee «o©t if 2M?t a l l foreign ccmntriee h^vt #lr#ady mivM im^fe Payment** ^ir«ver# if $&Xsri«*$ W l piii gross^ foreign emmiri«*» could go &bea4 nad lewy taxe« OB their o«m natlon&la, tfau» remedying the preheat vsry unfair ifWitiwi in vhich osly the ttalteJ States deriT«a rm®m® frofe tal&iy pay—1i by the FuM aa4 to the fave-'Jr ef s&isrie*, X reeognice ttm for %b» pre«#st high aalarles of the top a&n&gea&e&t ia the Bask, the imaging Director of the Fund has to reeelve the at th« Pretideat of the 'Sank. 6tew*v«rf 1 think cf SxecatiTtt Directors are definitely too high &ad led to geaer&l o-rer-coigptsnemtioa of the »tA.ff aU. tha «1ovn the line. fh#re appewrif to h& »• glaring dieparity jtlOTlm pa44 to the staff of tlie Fund Sflsi the Bank ami p«id to persons Is&Tlng equ&l or greater responsibility i s agencies of the United States Cb^erss^e^fc. Aside froa tfel f*«t that this creates % target for publle ^od Congressional erilieifat, i t &m§ mk* for 0S#i r#lati@»s l^»tve#n psVfSMBSi in Use United States tM la the Fuad Msl t!» Sank* S\trtberaorey thlf- d i@d to aa excessive dr&in of people trom. the 9*i« CoTernaent to i w l and the tail sjrf eontitmes to giv© tho^e institutions an i in Jofen. X do sot suggest that && effort should bo » 4 # %Q bring tine Fund sad I N H salary scheduler completely into liu& with United 3t&t*s <ky*er&8i»«rt staad&rd&t bot I do think thftt &t L*Mt half of km present disparity should te® r&ttoved through wholesale reduction ist tfe* l*VSl o.f s*lari«s^ paid to tha Sxeeutlve Dir#«tor#? Director*, astd staff offici^la la tbo TmA of 0#S» iiico^& t^3E^ Aisat & reduction in ^© &osip#:a*i*t©d in part ia the future through s reduction i s QT&I isC'Oa-et t«e^s« X do not believe, ^ s w ^ r , that motion until jsuofe r#4a«itioR b#com#« effective* In e4cULtloi)i to ttoese salary , I DtfMk the sfaould ffcrutiiai the otter 4:.roYi«io'ng for the Bsak b»ve introduced or beaitfitf vbich exeeseively liberal bf Q&mp&rimn vlth s i a i l ^ r bassefitt of the Baited States O A fieai reaark tm» to as vita the *ue&ti&a of how tiae the £atecutiTe Direotore in the Fmsd and tfee B&jsk (wad tbeir ought to $p%M on. their jafe$ in. order to rsoaply lA^h ^ adopted «t ^AVftimAh r ^ u i r l a g ib-^m "to d#¥Ot# e l l the tiss* iad ^tte^tios* to the Pumi (B^isk) th«t i t * iBtar#©ts rfecjuire* X have, ao reason %0 believe that the Executive Direetore of %lw F be^t b#0E ifiodlaf saer© l i n t o© their j^lbs tfe&m i# MeaMWUff In ^ of tb«sir gre&t aM e^mtinnousi re«poi&«ihllitie9» IB the etUNl of IMI nev .:mmf#sj#iit? I i#oB&<ir if the f lik# foil tlM oa tkelr Jobe. reotora n«@cl to lr« factj I istaild ihin^k. l)Mtt aeetinu;* »t monthly1 sr even ior^.^r lJe* would lv§ suf tic lent %i (MNI Ifct BiMpiJt * Board to rsmfea regajtliag the iiak'i Xenilag ea4 !K>rro%"ing! operation** e that tkis poiley ooold IN carried out ui^@r the tere&e of re^eot By»lav 14(d}« It thi» policy ^#r<* t^Opted^ I VOOld g t t e t tvemtlw Directors ssi^ fhsir Ait^rn^tas ba oompezuMited ^n the bft#ia i f t aubst&ntial p©r diei for &tt#ssdanee at meetings rather thstt through paysumt of «alarie»« Bo f&r ej thi 0»A« Idrectsr MtematiB t f i tiMMMMMNl| I vomldftiseuBMthat :: H ea ^,.propri*t^ po®£tio« in the NfilflgiMMl -*^ M that Mr« Hooker eoulit revert to hi* status M «i» employ«*e ef the Halted Stat^g Qovor^a«?iit# Problems might arise In the case of some of the foreign directors, but I imagine solutions could be found. LE It vili of %hm par 25? Coosell* JBKjmla DAT L