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10

NATIONAL ADVISORY COUNCIL
ON
INTERNATIONAL MONETARY AND FINANCIAL PROBLEMS
Agenda
Meeting $1
Tuesday, January 21, 191*7
2:30 P.M«, Room Ul|26, Main Treasury
1#

Maritime Commission Credits for Ship Sales
(a) Request of the Italian Government for Increased Credit
(NAC Document No* 336 - to be distributed;
NAC Document No* 33U - previously distributed)
(b) Guaranty by Banco do Brasil of Maritime Commission Credits
to Brazilian Citizens
(NAC Document Nc # 3lU - previously distributed)

2#

WAA Sale of Domestic Surplus to Foreign Governments
(MAC Document No # 332 - previously distributed)

3«

Jtalian Request for Tobacco Credit
(N/iC Document No # 331 - to be distributed)

k#

Reconsideration of NAC Action on Finnish Loan Request
(NAC Document No. 337 - to be distributed*
NAC Document No # 327 - previously distributed)

5«

International Monetary Fund*s Service Charge
(NAC Document No # 339 - to be distributed;
NAC Document No # 290 - previously distributed)

6*

Trade Policy Provision in International Bank Loan Contracts
(NAC Document No # 333 - to be distributed)

7«

Other Business

l:2ChU7
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Orvis Schmidt
Acting Secretary

National Advisory Council
Document No, 333
January 17, 1947 #

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Memorandum to: National Advisory Council
From:

National Advisory Council Staff Committee

Subject:

General Provisions of International Bank Loan Contracts
Covering Trade Policy Objectives

Problem
Since the trade policies
may have a significant effect
of the International Bank and
appear desirable for all Bank
guarding the interests of the

and arrangements of a borrowing country
on the accomplishment of the purposes
on its successful operations, it would
loan contracts to carry a provision safeBank in these respects.

It is therefore recommended that the following provision should be
incorporated in all loan contracts•
Recommendation
The National Advisory Council requests the U.S. Executive Director
to attempt to secure agreement by the International Bank to the incorporation as a condition in all loan contracts of a provision in the sense
of the following:
Since the basic purposes of the Bank, among others, are to assist
in the reconstruction and development of the territories of members,
to promote the long range balanced growth of international trade and the
maintenance of equilibrium in balances of payments, and to bring about
a smooth transition from a wartime to a peacetime economy;
And since the commercial and financial policies of each borrower may
have a direct effect upon (1) the success of projects financed by the
Bank in any member country, (2) the total financing needs of the borrower
or of other member countries, and (3) the ability of the borrower or
of other member countries to discharge their obligations to the Bank;
The borrower shall endeavor to refrain from commercial and financial
arrangements which are inconsistent with the basic purposes as provided
in Article I of the Bank's Articles of Agreement, and if the Bank
should indicate at any time that in its opinion the cormiercial and
financial policies of the borrower are such as to impede the success
of the projects financed by the Bank in any member country,'or to increase unduly the total borrowing needs of member countries^ or to
jeopardize fulfillment of the borrower's or other member countries1
obligations to the Bankj. the borrower shall consult with the Bank concerning such policies and if necessary concerning possible corrective
measures•

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