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BOARD OF GOVERNORS
DF THE

FEDERAL RESERVE SYSTEM

Office Correspondence
To

Chairman Eccles

Frnm

Mr. gnapp

f

pate

9,1946.

Subject! Todayfs National Advisory
Council meet ing.

Attached is a copy of the agenda for this afternoon's National AdYisory Council meeting which was attended by Governor Szymczak and myself•
The business was again transacted with dispatch and the meeting lasted only
aboub an hour*
Item I, Further Discussion on Export-Import Bank Legislation* It
was agreed that no further discussion of this point would be useful until the
British loan was oub of the way, and it was put over until next weekfs meeting*
Item 2, Settlement of 1942 Chinese Credit* The Council approved
the alternative recommendation put forward by the Staff Committee providing
for the incite ion of the 500 million dollar financial aid to China in the overall war settlement negotiations* The Commerce Department withdrew the objection
to this procedure which it had made in the Staff Committee*
There was also some discussion of whether the negotiating agencies
on the war settlements (i*e* State and Treasury Departments) should consult
with the National Advisory Council concerning the terms of the settlement, and
it was specifically agreed and stated by Secretary Snyder that there would be
such consultation* With respect to the 500 million dollay financial aid to
China in particular, Harry White suggested that after the settlement had been
reached the Secretary of the Treasury should prepare a report to Congress on
the subject. Mr* Snyder agreed with this suggestion.
Item 31 Philippine Budgetary Problem. Harold Glasser reported the
progress which the Staff Committee had made in its study of this problem and
pointed out that we were still awaiting confirmation from the Philippines of
the figures on the Philippine budgetary situation which had been developed by
our experts here* In view of this it was agreed that the Council should postpone consideration of the question but that a special meeting might be called
later in the week if new data became available from the Philippines and indicated the need for further consideration of the loan.
Mr. Snyder stated that he had talked to Judge Yinson about the
latter1 s conversations with President Roxas and Mr. McNutt and that Judge Vinson
had disclaimed having made any commitments whatsoever.
Item 4, Sale of Domestic Surplus Property to the Philippines. The
recommendation of the Staff Committee was accepted, namely that the War Assets
Administration should be authorized to proceed with the 10 million dollar credit
to the Philippines on the terms approved by the Council for such credits at the
last meeting.




-2Item 5» Oral Report on International Monetary Fund (Report by Mr.
White). Harry White did not give a very long or illuminating report but he
promised to consult fully with the Couneil in the near future concerning
policy problems which were beginning to take form in the administration of
the Fund* His report today was mainly on organizational matters, bub he
did request that the Council consider immediately one matter which is of
great importance to the Fund, namely whether the Treasury Department might
waive its usual l/4 per cent commission in the case of transactions in gold
between the United States and the Fund* Mr. White suggested that this was
a matter of special interest to Treasury and Federal Reserve, and Mr. Snyder
asked the Treasury and Federal Reserve staff people to prepare a memorandum
on the subject for consideration by the Council. Actually, I think this
manorandum will (and should) be prepared by the full Staff Committee.
Mr. White reported that it had been the general expectation that
the Fund ^>uld coiamence operations around the first of next year but that he
was hopeful of expediting this somewhat. He said that good progress was
being made in drafting the rules of procedure of the Fund for submission to
the Board of Governors at their September meeting. He said that these rules
involved a ntsnber of important policy problems and that he would shortly
submit to the Council requests for policy guidance on a number of the matters
involved.
The Question was raised by both Harry White and Pete Collado as to
whether the United States would support Siamfs application for membership in
the Fund and Bank. George Luthringer reported that the State Department was
working on this question and had encountered difficulties because of violent
French opposition to Siamfs candidacy. (There is at present a serious border
dispute between Siam and French Indo-China)Luthringer promised to report on
this matter as soon as a decision could be reached in the State Department.

Attachment
JBK:mla




N a t i o n a l Advisory Council
AGEHDA
Tuesday, J u l y 9, 1946

1.

F u r t h e r d i s c u s s i o n on Export-Import Bank l e g i s l a t i o n ,

2-

Settlement of 1942 Chinese c r e d i t *
(MAC S t a f f Document 87; NAC Document l 6 l )

3*

P h i l i p p i n e Budgetary Problem
(NAC Document 140 ( r e y i s e d ) ; 157; 158; 159; HAC S t a f f Document 91)

4.

Sale of domestic surplus property to the Philippines
( A Documents 145; 160)
K C

5»

Oral report on International Monetary Fund (Report by Mr. White)