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At Mr. Szymczak's suggestion, Mr. Gardner discussed the
following points which were of particular interest to the Federal
Reserve System and on which decisions had not yet been reached:

The need for a Federal Reserve voice in ihe management of the fund;


The contribution of the United States to the fund;


Ihether as a means of discouraging long-term use of
the fund there should be an interest charge on credits
running for less than a year with progressively higher
rates beyond one year and perhaps also on larger
amounts, it being suggested that credits for longer
than a year should be only with the express approval
of the fund; and

i . The power that the Reserve System should have to
offset excess reserves resulting from the operations
of the fund, including the power to require that
official balances in this country be deposited in
the Federal Reserve Banks.
It was recognized that some of these points were matters that
would not come up at the international conference, but it was felt that
decisions should be made with respect to them for the guidance of the
System's representatives at the conference.
A clear-cut consensus was not expressed on all of these
questions. However, it was suggested that it would be helpful to the
Federal Reserve System if it were understood that it would have a voice
in the selection of the American director of the fund and if he could
be required to make reports to, and confer with, the Chairman of the
Board of Governors in addition to the Secretary of the Treasury and
the Secretary of State.
On the second point, Mr. Gardner stated that there was evidence
that the Treasury contemplated that the funds for the American contribution would be raised in some "costless11 manner which had not yet been
worked out.

There was agreement that a suggestion that had been made

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at one time that the gold contribution to the fund might also be counted
as part of the legal monetary reserves of a member country should not
be approved, and that the contribution of this country should consist
of gold in the stabilization fund and funds provided through budgetary
"While there was a difference of opinion as to whether an
interest charge would be appropriate on resources of the fund used by
a member country, there was general agreement that it would be desirable
to have a charge which would discourage the use of the fund as a means
of obtaining long-term credits or credits for other than currency stabilization.
On the fourth point, there was agreement that a more specific
statement should be included in the draft of the plan which (l) would
require a country to prevent speculative movements of funds even though
financed by gold movements, (2) would state that it would not be contrary
to the fund program to adopt legislation that would discourage capital
from entering a member country, and (3) could require that foreign
balances be held in the central bank of the member country.

There was

a difference of opinion whether the Board should tie its position on the
fund to a request for additional authority to offset the effect of the
operations of the fund on the credit situation in this country or whether
this problem should be dealt with later.