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TOP SECRET COPY NO 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 TOP SECRET Orvis Schmidt Acting Secretary National Advisory Council Document No, 333 January 17, 1947 # TOP SECRET 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• TOP SECRET C0PY