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Form F.R. 131
BOARD OF GOVERNORS
or
THE
FEDERAL RESERVE SYSTEM
Office Correspondence
To.
From.
Walter R. Gardner
Date
November 5, 1944
Subject: Final Act and Related Documents
of the United Nations Monetary
and Financial Conference
The attached copy of the Final Act and Related Documents of the
United Nations Monetary and Financial Conference, published by the Department of State, contains material which was not included in the
Treasury pamphlet which I sent you some time ago. The new Department
of State document contains the full text of the Final Act of the Conference, including the Fund and Bank Agreements published in the Treasury
pamphlet• In addition, it contains the Resolutions and Recommendations
of the Conference on other means of international financial cooperation,
a summary of the Agreements of the Conference, the final reports of the
three Commissions to the Conference, and the statements or reservations
of certain of the delegations concerning the Articles of Agreement of the
Fund and Bank, Some preliminary statements by the President and
Secretary Morgenthau, which were not contained in the Treasury pamphlet,
are also given in the State Department document.
Attachment
United Nations
Monetary and Financial
Conference
BRETTON WOODS, NEW HAMPSHIRE
JULY 1 TO JULY 22,
1944
FINAL ACT AND RELATED DOCUMENTS
United Nations
Monetary and Financial
Conference
BRETTON WOODS, NEW HAMPSHIRE
JULY 1 TO JULY 22,
1944
FINAL ACT AND RELATED DOCUMENTS
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1944
DEPARTMENT OF STATE
Publication 2187
CONFERENCE SERIES 55
For sale by the Superintendent of Documents
Government Printing Office, Washington 25, D. G
PRICE 25 CENTS
CONTENTS
Page
Statement by President Roosevelt June 29, 1944.
Address by the Honorable Henry Morgenthau, Jr., at the Inaugural
Plenary Session July 1, 1944
Address by the Honorable Henry Morgenthau, Jr., at the Closing Plenary
Session July 22, 1944
Final Act (test)
*__.
Annex A: Articles of Agreement of the International Monetary Fund___
Annex B: Articles of Agreement of the International Bank for Reconstruction and Development._.
Annex C: Summary of Agreements of Bretton Woods Conference
Report of Commission I to the Executive Plenary Session July 20, 1944_Report of Commission II to the Executive Plenary Session July 21, 1944—
Report of Commission III to the Executive Plenary Session July 21,1944
Statements of Certain Delegations Concerning the Articles of Agreement
of the International Monetary Fund
Statements of Certain Delegations Concerning the Articles of Agreement
of the International Bank for Reconstruction and Development
Officers of the Conference.
--m
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STATEMENT BY PRESIDENT ROOSEVELT1
JUNE 29, 1944
To THE MEMBERS OF THE UNITED NATIONS MONETARY AND FINANCIAL
CONFERENCE:
I welcome you to this quiet meeting place with confidence and
with hope. I am grateful to you for making the long journey here,
grateful to your governments for their ready acceptance of my invitation to this meeting. It is fitting that even while the war for
liberation is at its peak, the representatives of free men should gather
to take counsel with one another respecting the shape of the future
which we are to win.
The war has prodded us into the healthy habit of coming together
in conference when we have common problems to discuss and solve.
We have done this successfully with respect to various military and
production phases of the war, and also with respect to measures which
must be taken immediately after the war is won—such as relief and
rehabilitation, and distribution of the world's food supplies. These
have been essentially emergency matters. At Bretton Woods, you
who come from many lands are meeting for the first time to talk over
proposals for an enduring program of future economic cooperation and
peaceful progress.
The program you are to discuss constitutes, of course, only one
phase of the arrangements which must be made between nations to
insure an orderly, harmonious world. But it is a vital phase, affecting ordinary men and women everywhere. For it concerns the basis
upon which they will be able to exchange with one another the natural
riches of the earth and the products of their own industry and ingenuity. Commerce is the life blood of a free society. We must see
to it that the arteries which carry that blood stream are not clogged
again, as they have been in the past, by artificial barriers created
through senseless economic rivalries.
Economic diseases are highly communicable. It follows, therefore,
that the economic health of every country is a proper matter of concern to all its neighbors, near and distant. Only through a dynamic
1
Read by the Secretary General of the Conference at the Inaugural Plenary
Session July 1.
1
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MONETARY AND FINANCIAL CONFERENCE
and a soundly expanding world economy can the living standards of
individual nations be advanced to levels which will permit a full
realization of our hopes for the future.
The spirit in which you carry on these discussions will set a pattern
for future friendly consultations among nations in their common
interest. Further evidence will be furnished at Bretton Woods that
men of different nationalities have learned how to adjust possible
differences and how to work together as friends.
The things that we need to do, must be done—can only be done—in
concert. This Conference will test our capacity to cooperate in peace
as we have in war. I know that you will all approach your task with
a high sense of responsibility to those who have sacrificed so much in
their hopes for a better world.
FRANKLIN D. ROOSEVELT
ADDRESS BY THE
HONORABLE HENRY MORGENTHAU, JR.
AT THE
INAUGURAL PLENARY SESSION JULY 1, 1944
FELLOW DELEGATES AND MEMBERS OP THE CONFERENCE:
You have given me an honor and an opportunity. I accept the
presidency of this Conference with gratitude for the confidence you
have reposed in me. I accept it also with deep humility. For I
know that what we do here will shape to a significant degree the
nature of the world in which we are to live—and the nature of the
world in which men and women younger than ourselves must round
out their lives and seek the fulfilment of their hopes. All of you, I
know, share this sense of responsibility.
We are more likely to be successful in the work before us if we see
it in perspective. Our agenda is concerned specifically with the monetary and investment field. It should be viewed, however, as part of
a broader program of agreed action among nations to bring about the
expansion of production, employment, and trade contemplated in the
Atlantic Charter and in article VII of the mutual-aid agreements concluded by the United States with many of the United Nations.
Whatever we accomplish here must be supplemented and buttressed
by other action having this end in view.
President Roosevelt has made it clear that we are not asked to
make definitive agreements binding on any nation, but that proposals
here formulated are to be referred to our respective governments for
acceptance or rejection. Our task, then, is to confer, and to reach
understanding and agreement, upon certain basic measures which
must be recommended to our governments for the establishment of a
sound and stable economic relationship among us.
We can accomplish this task only if we approach it not as bargainers
but as partners—not as rivals but as men who recognize that their common welfare depends, in peace as in war, upon mutual trust and joint
endeavor. It is not an easy task that is before us; but I believe, if
we devote ourselves to it in this spirit, earnestly and sincerely, that
what we achieve here will have the greatest historical significance.
Men and women everywhere will look to this meeting for a sign that
the unity welded among us by war will endure in peace.
3
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MONETARY AND FINANCIAL CONFERENCE
Through cooperation we are now overcoming the most fearful and
formidable threat ever to be raised against our security and freedom.
In time, with God's grace, the scourge of war will be lifted from us.
But we shall delude ourselves if we regard victory as synonymous with
freedom and security. Victory in this war will give us simply the
opportunity to mold, through our common effort, a world that is, in
truth, secure and free.
We are to concern ourselves here with essential steps in the creation
of a dynamic world economy in which the people of every nation will
be able to realize their potentialities in peace; will be able, through
their industry, then* inventiveness, their thrift, to raise their own
standards of living and enjoy, increasingly, the fruits of material
progress on an earth infinitely blessed with natural riches. This is
the indispensable cornerstone of freedom and security. All else must
be built upon this. For freedom of opportunity is the foundation for
all other freedoms.
I hope that this Conference will focus its attention upon two elementary economic axioms. The first of these is this: that prosperity
has no fixed limits. It is not a finite substance to be diminished by
division. On the contrary, the more of it that other nations enjoy,
the more each nation will have for itself. There is a tragic fallacy in
the notion that any country is liable to lose its customers by promoting greater production and higher living-standards among them.
Good customers are prosperous customers. The point can be illustrated very simply from the foreign-trade experience of my own
country. In the pre-war decade, about 20 percent of our exports
went to the 47 million people in the highly industrialized United
Kingdom; less than 3 percent went to the 450 million people in China.
The second axiom is a corollary of the first. Prosperity, like peace,
is indivisible. We cannot afford to have it scattered here or there
among the fortunate or to enjoy it at the expense of others. Poverty,
wherever it exists, is menacing to us all and undermines the wellbeing of each of us. It can no more be localized than war, but spreads
and saps the economic strength of all the more-favored areas of the
earth. We know now that the thread of economic life in every nation
is inseparably woven into a fabric of world economy. Let any thread
become frayed and the entire fabric is weakened. No nation, however great and strong, can remain immune.
All of us have seen the great economic tragedy of our time. We
saw the world-wide depression of the 1930's. We saw currency disorders develop and spread from land to land, destroying the basis for
international trade and international investment and even international faith. In their wake, wejsaw unemployment and wretchedness—idle tools, wasted wealth. We saw their victims fall prey, in
ADDRESSES BY THE HON. HENRY MOKGENTHAU, JR.
5
places, to demagogs and dictators. We saw bewilderment and bitterness become the breeders of fascism and, finally, of war.
In many countries coutrols and restrictions were set up without
regard to their effect on other countries. Some countries, in a desperate attempt to grasp a share of the shrinking volume of world
trade, aggravated the disorder by resorting to competitive depreciation
of currency. Much of our economic ingenuity was expended in the
fashioning of devices to hamper and limit the free movement of
goods. These devices became economic weapons with which the
earliest phase of our present war was fought by the Fascist dictators.
There was an ironic inevitability in this process* Economic aggression
can have no other offspring than war. It is as dangerous as it is
futile.
We know now that economic conflict must develop when nations
endeavor separately to deal with economic ills which are international
in scope. To deal with the problems of international exchange and
of international investment is beyond the capacity of any one country,
or of any two or three countries. These are multilateral problems,
to be solved only by multilateral cooperation. They are fixed and
permanent problems, not merely transitional considerations of the
post-war reconstruction. They are problems not limited in importance to foreign-exchange traders and bankers but are vital factors
in the flow of raw materials and finished goods, in the maintenance of
high levels of production and consumption, in the establishment of a
satisfactory standard of living for all the people of all the countries
on this earth.
Throughout the past decade, the Government of the United States
has sought in many directions to promote joint action among the
nations of the world. In the realm of monetary and financial problems this Government undertook, as far back as 1936, to facilitate the
maintenance of orderly exchanges by entering into the Tripartite
Agreement with England and France, under which they, and subsequently Belgium, the Netherlands, and Switzerland, agreed with us
to consult on foreign-exchange questions before important steps were
taken. This policy of consultation was extended in the bilateral
exchange arrangements which we set up, starting in 1937, with our
neighbors on the American continents.
In 1941, we begaa to study the possibility of international cooperation on a multilateral basis as a means of establishing a stable and
orderly system of international currency relationships and to revive
international investment. Our technical staff—soon joined by the
experts of other nations—undertook the preparation of practical
proposals, designed to implement international monetary and financial
cooperation. The opinions of these technicians, as reported in the
joint public statement which they have issued, reveal a common belief
6
MONETARY AND FINANCIAL CONFERENCE
that the disruption of foreign exchanges can be prevented, and the
collapse of monetary systems can be avoided, and a sound currency
basis for the balanced growth of international trade can be provided,
if we are forehanded enough to plan ahead of time—and to plan together. It is the consensus of these technical experts that the solution
lies in a permanent institution for consultation and cooperation on
international monetary, finance, and economic problems. The
formulation of a definite proposal for a Stabilization Fund of the
United and Associated Nations is one of the items on our agenda.
But provision for monetary stabilization alone will not meet the
need for the rehabilitation of war-wrecked economies. It is not, in
fact, designed toward that end. It is proposed, rather, as a permanent
mechanism to promote exchange stability. Even to discharge this
function effectively, it must be supplemented by many other measures
to remove impediments to world trade.
For long-range reconstruction purposes, international loans on a
broad scale will be imperative. We have in mind a need wholly apart
from the problem of immediate aid which is being undertaken by the
United Nations Relief and Rehabilitation Administration. The need
which we seek to meet through the second proposal on our agenda is
for loans to provide capital for economic reconstruction, loans for
which adequate security may be available and which will provide the
opportunity for investment, under proper safeguards, of capital from
many lands. The technicians have prepared the outline of a plan for
an International Bank for Postwar Reconstruction which will investigate the opportunities for loans of this character, will recommend
and supervise them and, if advisable, furnish to investors guaranties
of their repayment.
I shall not attempt here to discuss these proposals in detail. That
is the task of this Conference. It is a task the performance of which
calls for wisdom, for statesmanship, above all for good will*
The transcendent fact of contemporary life is this—that the world
is a community. On battlefronts the world over, the young men of
all our united countries have been dying together—dying for a common purpose. It is not beyond our powers to enable the young men
of all our countries to live together—to pour their energies, their
skills, their aspirations into mutual enrichment and peaceful progress.
Our final responsibility is to them. As they prosper or perish, the
work which we do here will be judged. The opportunity before us
has been bought with blood. Let us meet it with faith in one another,
with faith in our common future, which these men fought to make free.
ADDRESS BY THE
HONORABLE HENRY MORGENTHAU, JR.
AT THE
CLOSING PLENARY SESSION JULY 22, 1944
I am gratified to announce that the Conference at Bretton Woods
has successfully completed the task before it.
It was, as we knew when we began, a difficult task, involving
complicated technical problems. We came here to work out methods
which would do away with the economic evils—the competitive currency devaluation and destructive impediments to trade—which
preceded the present war. We have succeeded in that effort.
The actual details of an international monetary and financial agreement may seem mysterious to the general public. Yet at the heart
of it lie the most elementary bread-and-butter realities of daily life.
What we have done here in Bretton Woods is to devise machinery
by which men and women everywhere can freely exchange, on a fair
and stable basis, the goods which they produce through their labor.
And we have taken the initial steps through which the nations of the
world will be able to help one another in economic development to
their mutual advantage and for the enrichment of all.
The representatives of the 44 nations faced differences of opinion
frankly, and reached an agreement which is rooted in genuine understanding. None of the nations represented here has altogether had
its own way. We have had to yield to one another not in respect
to principles or essentials but in respect to methods and procedural
details. The fact that we have done so, and that we have done it in a
continuing spirit of good will and mutual trust, is, I believe, one of
the hopeful and heartening portents of our times. Here is a sign
blazoned upon the horizon, written large upon the threshold of the
future—a sign for men in battle, for men at work in mines and mills,
and in the fields, and a sign for women whose hearts have been burdened and anxious lest the cancer of war assail yet another generation—
a sign that the peoples of the earth are learning how to join hands and
work in unity.
There is a curious notion that the protection of national interests
and the development of international cooperation are conflicting
philosophies—that somehow or other men of different nations cannot
7
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MONETARY AND FINANCIAL CONFERENCE
work together without sacrificing the interests of their particular
nations. There has been talk of this sort—and from people who
ought to know better—concerning the international cooperative
nature of the undertaking just completed at Bretton Woods. I am
perfectly certain that no delegation to this Conference has lost sight
for a moment of the particular national interests it was sent here to
represent. The American delegation, which I have had the honor
of leading, has at all times been conscious of its primary obligation—
the protection of American interests. And the other representatives
here have been no less loyal or devoted to the welfare of their own
people.
Yet none of us has found any incompatibility between devotion
to our own countries and joint action. Indeed, we have found on
the contrary that the only genuine safeguard for our national interests lies in international cooperation. We have come to recognize
that the wisest and most effective way to protect our national interests is through international cooperation—that is to say, through
united effort for the attainment of common goals. This has been
the great lesson taught by the war and is, I think, the great lesson of
contemporary life—that the peoples of the earth are inseparably
linked to one another by a deep, underlying community of purpose.
This community of purpose is no less real and vital in peace than in
war, and cooperation is no less essential to its fulfilment.
To seek the achievement of our aims separately through the planless, senseless rivalry that divided us in the past, or through the
outright economic aggression which turned neighbors into enemies,
would be to invite ruin again upon us all. Worse, it would be once
more to start our steps irretraceably down the steep, disastrous road
to war. That sort of extreme nationalism belongs to an era that
is dead. Today the only enlightened form of national self-interest
lies in international accord. At Bretton Woods we have taken practical steps toward putting this lesson into practice in the monetary
and economic field.
I take it as an axiom that after this war is ended no people—and
therefore no government of the people—will again tolerate prolonged
and wide-spread unemployment. A revival of international trade is
indispensable if full employment is to be achieved in a peaceful world
and with standards of living which will permit the realization of
men's reasonable hopes.
What are the fundamental conditions under which commerce
among the nations can once more flourish?
First, there must be a reasonably stable standard of international
exchange to which all countries can adhere without sacrificing the
freedom of action necessary to meet their internal economic problems.
ADDRESSES BY THE HON. HENRY MORGENTHATT, JR.
9
This is the alternative to the desperate tactics of the past—competitive currency depreciation, excessive tariff barriers, uneconomic
barter deals, multiple currency practices and unnecessary exchange
restrictions—by which governments vainly sought to maintain employment and uphold living standards. In the final analysis, these
tactics only succeeded in contributing to world-wide depression and
even war. The International Fund agreed upon at Bretton Woods
will help remedy this situation.
. Second, long-term financial aid must be made available at reasonable rates to those countries whose industry and agriculture have
been destroyed by the ruthless torch of an invader or by the heroic
scorched-earth policy of their defenders.
Long-term funds must be made available also to promote sound
industry and increase industrial and agricultural production in nations
whose economic potentialities have not yet been developed. It is
essential to us all that these nations play their full part in the exchange of goods throughout the world.
They must be enabled to produce and to sell if they are to be able
to purchase and consume. The Bank for International Reconstruction and Development is designed to meet this need.
Objections to this Bank have been raised by some bankers and a few
economists. The institutions proposed by the Bretton Woods Conference would indeed limit the control which certain private bankers
have in the past exercised over international finance. It would by
no means restrict the investment sphere in which bankers could
engage. On the contrary, it would greatly expand this sphere by enlarging the volume of international investment and would act as an
enormously effective stabilizer and guarantor of loans which they
might make. The chief purpose of the Bank for International Reconstruction and Development is to guarantee private loans made
through the usual investment channels. It would make loans only
when these could not be floated through the normal channels at
reasonable rates. The effect would be to provide capital for those
who need it at lower interest rates than in the past and to drive only
the usurious money lenders from the temple of international finance.
For my own part, I cannot look upon this outcome with any sense
of dismay.
Capital, like any other commodity, should be free from monopoly
control, and available upon reasonable terms to those who will put
it to use for the general welfare.
The delegates and technical staffs at Bretton Woods have completed their portion of the job. They sat down together, talked as
friends and perfected plans to cope with the international monetary
and financial problems which all their countries face. These pro
10
MONETARY AND FINANCIAL CONFERENCE
posals now must be submitted to the legislatures and the peoples of
the participating nations. They will pass upon what has been
accomplished here.
The result will be of vital importance to everyone in every country.
In the last analysis, it will help determine whether or not people have
jobs and the amount of money they are to find in their weekly pay
envelops. More important still, it concerns the kind of world in
which our children are to grow to maturity. It concerns the opportunities which will await millions of young men when at last they,
can take off their uniforms and come home and roll up their sleeves
and go to work.
This monetary agreement is but one step, of course, in the broad
program of international action necessary for the shaping of a free
future. But it is an indispensable step and a vital test of our intentions.
Incidentally, tonight we had a dramatic demonstration of these
intentions. Tonight the Soviet Government informed me, through
Mr. Stepanov, chairman of its delegation here in Bretton Woods,
that it has authorized an increase in its subscription to the International Bank for Eeconstruction and Development to $1,200,000,000.
This was done after a subscription of $900,000,000 had been agreed
upon unanimously by the Conference. By this action, the Union of
Soviet Socialist Republics is voluntarily taking a greatly increased
responsibility for the success of this Bank in the post-war world.
This is an indication of the true spirit of international cooperation
demonstrated throughout this Conference.
We are at a crossroads, and we must go one way or the other. The
Conference at Bretton Woods has erected a signpost—a signpost
pointing down a highway broad enough for all men to walk in step
and side by side. If they will set out together, there is nothing on
earth that need stop them.
FINAL ACT
The Governments of Australia, Belgium, Bolivia, Brazil, Canada,
Chile, China, Colombia, Costa Rica, Cuba, Czechoslovakia, Dominican Republic, Ecuador, Egypt, El Salvador, Ethiopia; the French
Delegation; the Governments of Greece, Guatemala, Haiti, Honduras,
Iceland, India, Iran, Iraq, Liberia, Luxembourg, Mexico, Netherlands,
New Zealand, Nicaragua, Norway, Panama, Paraguay, Peru, Philippine Commonwealth, Poland, Union of South Africa, Union of Soviet
Socialist Republics, United Kingdom, United States of America,
Uruguay, Venezuela, and Yugoslavia;
Having accepted the invitation extended to them by the Government of the United States of America to be represented at a United
Nations Monetary and Financial Conference;
Appointed their respective delegates, who are listed below by
countries in the order of alphabetical precedence:
AUSTRALIA
LESLIE G. MELVILLE, Economic Adviser to the Commonwealth Bank of
Australia; Chairman of the Delegation
JAMES B. BRIGDEN, Financial Counselor, Australian Legation, Washington
FEEDBRICK H. WHEELER, Commonwealth Department of the Treasury
ARTHUR H. TANGE, Commonwealth Department of External Affairs
BELGIUM
CAMILLE GUTT, Minister of Finance and Economic Affairs; Chairman of the
Delegation
GEORGES THEUNIS, Minister of State; Ambassador at Large on special mission
in the United States; Governor of the National Bank of Belgium
BARON HERV£ DE GRUBEN, Counselor, Belgian Embassy, Washington
BARON REN£ BOEL, Counselor of the Belgian Government
BOLIVIA
REN£ BALLIVIXN, Financial Counselor, Bolivian Embassy, Washington;
Chairman of the Delegation
BRAZIL
ARTHUR DE SOUZA COSTA, Minister of Finance; Chairman of the Delegation
FRANCISCO ALVES DOS SANTOS-FILHO, Director of Foreign Exchange of the Bank
of Brazil
VALENTIM BOU£AS, Commission of Control of the Washington Agreements
and Economic and Financial Council
EUOENIO GUDIN, Economic and Financial Council and Economic Planning
Committee
OCTXVIO BULHSES, Chief, Division of Economic and Financial Studies, Ministry of Finance
VICTOR AZEVEDO BASTIAN, Director, Banco da Provincia do Rio Grande do Sul
11
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MONETARY AND FINANCIAL CONFERENCE
CANADA
J. L. ILSLEY, Minister of Finance; Chairman of the Delegation
L. S. ST. LAURENT, Minister of Justice
D. C. ABBOTT, Parliamentary Assistant to the Minister of Finance
LIONEL CHEVRIER, Parliamentary Assistant to the Minister of Munitions and
Supply
J. A. BLANCHETTE, Member of Parliament
W. A. TUCKER, Member of Parliament
W. C. CLARK, Deputy Minister of Finance
G. F. TOWERS, Governor, Bank of Canada
W. A. MACKINTOSH, Special Assistant to the Deputy Minister of Finance
L. RASMINSKT, Chairman (alternate), Foreign Exchange Control Board
A. F. W. PLUMPTRE, Financial Attache", Canadian Embassy, Washington
J. J. DEUTSCH, Special Assistant to the Under Secretary of State of External
Affairs
CHILE
Luis ALAMOS BARROS, Director, Central Bank of Cliile; Chairman of the
Delegation
GERMXN RIESCO, General Representative of the Chilean Line, New York
ARTURO MASCHKE TORNERO, General Manager, Central Bank of Chile
FERNANDO MARDONES RESTAT, Assistant General Manager, Chilean Nitrate
and Iodine Sales Corporation
CHINA
HSIANG-HSI K'UNG, Vice President of Executive Yuan and concurrently
Minister of Finance; Governor of the Central Bank of China; Chairman of
the Delegation
TINGPU F. TSIANG, Chief Political Secretary of Executive Yuan; former
Chinese Ambassador to the Union of Soviet Socialist Republics
PING-JVEN KUO, Vice Minister of Finance
VICTOR HOO, Administrative Vice Minister of Foreign Affairs
YEE-CHUN KOO, Vice Minister of Finance
KUO-CHING LI, Adviser to the Ministry of Finance
TE-MOU H S I , Representative of the Ministry of Finance in Washington;
Director, the Central Bank of China and Bank of China
TSU-YEE PEI, Director, Bank of China
TS-LIANG SOONG, General Manager, Manufacturers Bank of China; Director,
the Central Bank of China, Bank of China, and Bank of Communications
COLOMBIA
CARLOS LLERAS RESTREPO, former Minister of Finance and Comptroller
General; Chairman of the Delegation
MIGUEL L6PEZ PUMAREJO, former Ambassador to the United States; Manager,
Caja de Cre"dito Agrario, Industrial y Minero
VICTOR DUGAND, Banker
COSTA RICA
FRANCISCO DE P. GUTIERREZ ROSS, Ambassador to the United States; former
Minister of Finance and Commerce; Chairman of the Delegation
Luis DEMETRIO TINOCO CASTRO, Dean, Faculty of Economic Sciences, Univer-
sity of Costa Rica; former Minister of Finance and Commerce; former
Minister of Public Education
FERNANDO MADRIGAL A., Member of Board of Directors, Chamber of Commerce
of Costa Rica
FINAL ACT
13
CUBA
E. I. MONTOULIEU, Minister of Finance; Chairman of the Delegation
CZECHOSLOVAKIA
LADISLAV FEIERABEND, Minister of Finance; Chairman of the Delegation
JAN MLXDEK, Ministry of Finance; Deputy Chairman of the Delegation
ANTONIN BASCH, Department of Economics, Columbia University
JOSEP HANC, Director of the Czechoslovak Economic Service in the United
States of America
ERVIN HEXNER, Professor of Economics and Political Science, University of
North Carolina
DOMINICAN REPUBLIC
ANSELMO COPELLO, Ambassador to the United States; Chairman of the Delegation
J. R. RODRIGUEZ, Minister Counselor, Embassy of the Dominican Republic,
Washington
ECUADOR
ESTEBAN F. CARBO, Financial Counselor, Ecuadoran Embassy, Washington;
Chairman of the Delegation
SIXTO E. DURAN BALLEN, Minister Counselor, Ecuadoran Embassy, Washington
EGYPT
SANY LACK ANY BEY; Chairman of the Delegation
MAHMOUD SALEH EL FALAKY
AHMED SELIM
EL SALVADOR
AGUSTIN ALFARO MORAN; Chairman of the Delegation
RAUL GAMERO
VfcroR MANUEL VALDES
C
ETHIOPIA
BLATTA EPHREM TEWELDE MEDHEN, Minister to the United States; Chairman
of the Delegation
GEORGL A. BLOWERS, Governor, State Bank of Ethiopia
FRENCH DELEGATION
PIERRE MENDES-FRANCE, Commissioner of Finance; Chairman of the Delegation
ANDRE ISTEL, Technical Counselor to the Department of Finance
Assistant Delegates
JEAN DE LARGENTAYE, Finance Inspector
ROBERT MOSSE, Professor of Economics
RAOUL AOLION, Legal Counselor
ANDRE PAUL MAURY
GREECE
KYRIAKOS VARVARESSOS, Governor of the Bank of Greece; Ambassador
Extraordinary for Economic and Financial Matters; Chairman of the Delegation
ALEXANDER ARHYROPOULOS, Minister Resident; Director, Economic and
Commercial Division, Ministry of Foreign Affairs
ATHANASE SBAROUNIS, Director General, Ministry of Finance
603992—44
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MONETARY AND FINANCIAL CONFERENCE
GUATEMALA
MANUEL NORIEGA MORALES, Postgraduate Student in Economic Sciences,
Harvard University; Chairman of the Delegation
HAITI
ANDRE LIAUTA.UP, Ambassador to the United States; Chairman of the Delegation
PiBRifE CHAUVET, Under Secretary of State for Finance
HONDURAS
JULIXN R. CICERES, Ambassador to the United States; Chairman of the
Delegation
ICELAND
MAaNtfs SIGURDSSON, Manager, National Bank of Iceland; Chairman of the
Delegation
ASHEIR Asr.EiRssoN, Manager, Fishery Bank of Iceland
SVANBJORN FRIMANNSSON, Chairman, State Commerce Board
INDIA
SIR JEREMY RAISMAN, Member for Finance, Government of India; Chairman
of the Delegation
SIR THEODORE GREGORY, Economic Adviser to the Government of India
SIK CHINTAMAX D. DESHMUKH, Governor, Reserve Bank of India
SIR SHANMUKHAM CHBTTT
A. D. SHROFF, Director, Tata Sons, Ltd.
IRAN
ABOL HASSAN EBTEHAJ, Governor of National Bank of Iran; Chairman of the
Delegation
A. A. DAFTART, Counselor, Iranian Legation, Washington
HOSSEIN NAVAB, Consul General, New York
TAGHI NASSR, Iranian Trade and Economic Commissioner, New York
IRAQ *
IBRAHIM KAMAL, Senator and former Minister of Finance; Chairman of the
Delegation
LIONEL M. SWAN, Adviser to the Ministry of Finance
IBRAHIM AL-KABIB, Accountant General, Ministry of Finance
CLAUDE E. LOOMBE, Comptroller of Exchange and Currency Officer
LIBERIA
WILLIAM E. DENNIS, Secretary of the Treasury; Chairman of the Delegation
JAMES F. COOPER, former Secretary of the Treasury
WALTER F. WALKER, Consul General, New York
LUXEMBOURG
HUGTJES LE GALLAIS, Minister to the United States; Chairman of the Delegation
MEXICO
EDUARDO SUXREZ, Minister of Finance; Chairman of the Delegation
ANTONIO ESPINOSA DE LOS MONTEROS, Executive President of Nacional Finan-
ciera;* Director of Banco de Mexico
RODRIGO G6MEZ, Manager of Banco de Mexico
DANIEL Cosfo VILLEGAS, Chief of the Department of Economic Studies,
Banco de Mexico
FINAL ACT
15
NETHERLANDS
J. W. BE YEN, Financial Adviser to the Netherlands Government; Chairman of
the Delegation
D. CBENA DE IONGH, President of the Board for the Netherlands Indies, Surinam, and Curasao in the United States
H. RIEMENS, Financial Attache*, Netherlands Embassy, Washington; Financial
Member of the Netherlands Economic, Financial, and Shipping Mission
in the United States
A. H. PHILIPSE, Member of the Netherlands Economic, Financial, and Shipping
Mission in the Unitea States
NEW ZEALAND
WALTER NASH, Minister of Finance; Minister to the United States; Chairman
of the Delegation
BERNARD CARL ASHWIN, Secretary to the Treasury
EDWARD C. FUSSELL, Deputy Governor, Reserve Bank of New Zealand
ALAN G. B. FISHER, Counselor, New Zealand Legation, Washington
NICARAGUA
GUILLERMO SEVILLA SACASA, Ambassador to the United States; Chairman of
the Delegation
LE6N DEBAYLE, former Ambassador to the United States
J. JESUS SXNCHEZ ROIG, former Minister of Finance; Vice Chairman, Board of
Directors, National Bank of Nicaragua
NORWAY
WILHELM KEILHAU, Director, Bank of Norway, p. t., London; Chairman of the
Delegation
OLE COLBJORNSEN, Financial Counselor, Norwegian Embassy, Washington
ARNE SKAUG, Commercial Counselor, Norwegian Embassy, Washington
PANAMA
GUILLERMO ARANGO, President, Investors Service Corporation of Panama;
Chairman of the Delegation
NARCISO E. GARAY, First Secretary, Panamanian Embassy, Washington
PARAGUAY
CELSO R. VELXZQUEZ, Ambassador to the United States; Chairman of the
Delegation
NESTOR M. CAMPOS ROS, First Secretary, Paraguayan Embassy, Washington
PERU
PEDRO BELTRXN, Ambassador-designate to the United States; Chairman of the
Delegation
MANUEL B. LLOSA, Second Vice President of the Chamber of Deputies; Deputy
from Cerro de Pasco
ANDRES F. DAS SO, Senator from Lima
ALBERTO ALVAREZ CALDER6N, Senator from Lima
JUVENAL MONGE, Deputy from Cuzco
JUAN CHAVEZ, Minister, Commercial Counselor, Peruvian Embassy, Washington
PHILIPPINE COMMONWEALTH
COLONEL ANDRES SORIANO, Secretary of Finance of the Philippine Commonwealth; Chairman of the Delegation
JAIME HERNANDEZ, Auditor General of the Philippine Commonwealth
JOSEPH H. FOLBY, Manager, Philippine National Bank, New York Agency,
Philippine Commonwealth
16
MONETABY AND FINANCIAL CONFERENCE
POLAND
LUDWIK GROSFELD, Minister of Finance; Chairman of the Delegation
LEON BARANSKI, Director General Bank of Poland
ZYCMUNT KARPINSKI, Director, Bank of Poland
STANISLAW KIRKOR, Director, Ministry of Finance
JANUSZ Z6I/TOWSKI, Financial Counselor, Polish Embassy, Washington
UNION OF SOUTH AFRICA
S. F. N. GIE, Minister to the United States; Chairman of the Delegation
J. E. HOLLO WAY, Secretary for Finance; Co-delegate
M. H. DE KOCK, Deputy Governor of South African [Reserve] Bank; Co-delegate
UNION OF SOVIET SOCIALIST REPUBLICS
M. S. STEPANOV, Deputy People's Commissar of Foreign Trade; Chairman
of the Delegation
P. A. MALETIN, Deputy People's Commissar of Finance
N. F. CHECHULIN, Assistant Chairman of the State Bank
I. D. ZLOBIN, Chief, Monetary Division of the People's Commissariat of
Finance
A. A. ARUTITTNIAN, Professor; Doctor of Economics; Expert-Consultant of the
People's Commissariat for Foreign Affairs
A. P. MOROZOV, Member of the Collegium; Chief, Monetary Division of the
People's Commissariat for Foreign Trade
UNITED KINGDOM
LORD KEYNES; Chairman of the Delegation
ROBERT H. BRAND, United Kingdom Treasury Representative in Washington
SIR WILFRID EADY, United Kingdom Treasury
NIGEL BRUCE RONALD, Foreign Office
DENNIS H. ROBERTSON, United Kingdom Treasury
LIONEL ROBBINS, War Cabinet Offices
•
REDVERS OPIE, Counselor, British Embassy, Washington
UNITED STATES OF AMERICA
HENRY MORGENTHAU, J R . , Secretary of the Treasury; Chairman of the Delegation
FRED M. VINSON, Director, Office of Economic Stabilization; Vice Chairman
of the Delegation
DEAN ACHESON, Assistant Secretary of State
EDWARD E. BROWN, President, First National Bank of Chicago
LEO T. CROWLEY, Administrator, Foreign Economic Administration
MARRINER S. ECCLES, Chairman, Board of Governors of the Federal Reserve
System
MABEL NEWCOMER, Professor of Economics, Vassar College
BRENT SPENCE, House of Representatives; Chairman, Committee on Banking
and Currency
CHARLES W. TOBEY, United States Senate; Member, Committee on Banking
and Currency
ROBERT F. WAGNER, United States Senate; Chairman, Committee on Banking
and Currency
HARRY D. WHITE, Assistant to the Secretary of the Treasury
JESSE P. WOLCOTT, House of Representatives; Member, Committee on Banking
and Currency
URUGUAY
MARIO LA GAMMA ACEVEDO, Expert, Ministry of Finance; Chairman of the
Delegation
HUGO GARCIA, Financial Attache", Uruguayan Embassy, Washington
FINAL ACT
17
VENEZUELA
RODOLFO ROJAS, Minister of the Treasury; Chairman of the Delegation
ALFONSO ESPINOSA, President, Permanent Committee of Finance, Chamber of
Deputies
CRIST6BAL L. MENDOZA, former Minister of the Treasury; Legal Adviser to the
Central Bank of Venezuela
Jos6 JoAQufN GONZXLEZ GORRONDONA, President, Office of Import Control;
Director, Central Bank of Venezuela
YUGOSLAVIA
VLADIMIR RYBAR, Counselor of the Yugoslav Embassy, Washington; Chairman
of the Delegation
Who met at Bretton Woods, New Hampshire, on July 1,1944, under
the Temporary Presidency of The Honorable Henry Morgenthau, Jr.,
Chairman of the Delegation of the United States of America.
The Honorable Henrik de Kauffmann, Danish Minister at Washington, attended the Inaugural Plenary Session in response to an
invitation of the Government of the United States to be present in a
personal capacity. The Conference, on the proposal of its Committee
on Credentials, extended a similar invitation for the remaining sessions
of the Conference.
The Economic, Financial, and Transit Department of the League
of Nations, the International Labor Office, the United Nations Interim
Commission on Food and Agriculture, and the United Nations Relief
and Rehabilitation Administration were each represented by one
observer at the Inaugural Plenary Session. Their representation was
in response to an invitation of the Government of the United States,
and either the observers or their alternates attended the subsequent
sessions in accordance with the resolution presented by the Committee
on Credentials and adopted by the Conference. The observers and
their alternates are listed below:
Economic, Financial, and Transit Department of the League of Nations
ALEXANDER LOVEDAY, Director
RAQNAB NUBKSE; Alternate
International Labor Office
EDWARD J. PHELAN, Acting Director
C. WILFRED JENKS. Legal Adviser; and
E. J. RICHES, Acting Chief, Economic and Statistical Section; Alternates
United Nations Interim Commission on Food and Agriculture
EDWARD TWENTYMAN, Delegate from the United]Kingdom
18
MONETARY AND FINANCIAL CONFERENCE
United Nations Relief and Rehabilitation Administration
A. H. FELLER, General Counsel; or
MIECZTSLAW SOKOLOWSKI, Financial Adviser
f Warren Kelchner, Chief of the Division of International Conferences, Department of State of the United States, was designated, with
the approval of the President of the United States, as Secretary General of the Conference; Frank Coe, Assistant Administrator, Foreign
Economic Administration of the United States, as Technical Secretary
General; and Philip C. Jessup, Professor of International Law at
Columhia University, New York, New York, as Assistant Secretary
General.
The Honorable Henry Morgenthau, Jr., Chairman of the Delegation of the United States of America, was elected permanent President
of the Conference at the Inaugural Plenary Session held on July 1,
1944.
M. S. Stepanov, the Chairman of the Delegation of the Union of
Soviet Socialist Republics; Arthur de Souza Costa, the Chairman of
the Delegation of Brazil; Camille Gutt, the Chairman of the Delegation of Belgium; and Leslie G. Melville, the Chairman of the Delegation of Australia, were elected Vice Presidents of the Conference.
The Temporary President appointed the following members of the
General Committees constituted by the Conference:
COMMITTEE ON CREDENTIALS
E. I. MONTOTJLIETJ (Cuba), Chairman
J. W. BETEN (Netherlands)
S. F. N. GIE (South Africa)
WILLIAM E. DEVNIS (Liberia)
WILHBLM KEILHATT (Norway)
COMMITTEE ON RULES AND REGULATIONS
HSIANG-HSI K'UNG (China), Chairman
GUILLERMO SEVILLA SACASA (Nicaragua)
LUDWIK GROSFELD (Poland)
LESLIE G. MELVILLE (Australia)
IBRAHIM KAMAL (Iraq)
COMMITTEE ON NOMINATIONS
WALTER NASH (New Zealand), Chairman
HUGTJES L E GALLAIS (Luxembourg)
JULIAN R. CXCERES (Honduras)
MAGNUS SIGURDSSON (Iceland)
PEDRO BELTRXN (Peru)
FINAL ACT
19
In accordance with the regulations adopted at the Second Plenary
Session, held on July 3, 1944, the Conference elected a Steering Committee which was composed of the following Chairmen of Delegations:
HENRY MORGENTHAU, JR. (U.S.A.), Chairman
%
CAMILLE GUTT (Belgium)
ARTHUR DE SOUZA COSTA (Brazil)
J. L. ILSLEY (Canada)
HSIANG-HSI K'UNG (China)
CARLOS LLERAS RESTREPO (Colombia)
PIERRE MENDES-FRANCE (French Delegation)
ABOL HASSAN EBTEHAJ (Iran)
EDUARDO SUAREZ (Mexico)
M. S. STEPANOV (U.S.S.R.)
LORD KETNES (U.K.)
On July 21, 1944, the Coordinating Committee was constituted
with the following membership:
FRED M. VINSON (XL S. A.), Chairman
ARTHUR DE SOUZA Cost A (Brazil)
PING-WEN KTJO (China)
ROBERT MOSS£ (French Delegation)
EDUARDO SUAREZ (Mexico)
A. A. ARUTIUNIAN (U. S. S. R.)
LIONEL ROBBINS (U. K.)
The Conference was divided into three Technical Commissions.
The officers of these Commissions and of their respective Committees,
as elected by the Conference, are listed below:
COMMISSION I
INTERNATIONAL MONETARY FUND
Chairman: HARRY D. WHITE (U. S. A.)
Vice Chairman: RODOLFO ROJAS (Venezuela)
Reporting Delegate: L. RASMINSKT (Canada)
Secretary: LEROY D. STINEBOWER
Assistant Secretary: ELEANOR LANSING DULLES
COMMITTEE 1—Purposes, Policies, and Quotas of the Fund
Chairman: TINGFU F. TSIANG (China)
Reporting Delegate: KYRIAKOS VARVARESSOS (Greece)
Secretary: WILLIAM ADAMS BROWN, JR.
COMMITTEE 2—Operations of the Fund
Chairman: P. A. MALETIN (U. S. S. R.)
Vice Chairman: W. A. MACKINIOSH (Canada)
Reporting Delegate: ROBERT MOSS£ (French Delegation)
Secretary: KARL BOPP
Assistant Secretary: ALICE BOURNEUF
20
MONETARY AND FINANCIAL CONFERENCE
COMMITTEE 3—Organization and Management
Chairman: ARTHUB DE SOUZA COSTA (Brazil)
Reporting Delegate: ERVIN HEXNER (Czechoslovakia)
Secretary: MALCOLM BRYAN
Assistant Secretary: H. J. BITTERMANN
COMMITTEE 4—Form and Status of the Fund
Chairman: MANUEL B. LLOSA (Peru)
Reporting Delegate: WILHELM KEILHAU (Norway)
Secretary: COLONEL CHARLES H. DYSON
Assistant Secretary: LAUREN CASADAY
COMMISSION II
BANK FOR ^RECONSTRUCTION AND DEVELOPMENT
.
Chairman: LORD KEYNES (U. K.)
Vice Chairman: Luis ALAMOS BARROS (Chile)
Reporting Delegate: GEORGES THEUNIS (Belgium)
Secretary: ARTHUR UPGREN
Secretary: ARTHUR SMITHIES
Assistant Secretary: RUTH RUSSELL
COMMITTEE 1—Purposes, Policies, and Capital of the Bank
Chairman: J. W. BEYEN (Netherlands)
Reporting Delegate: J. RAFAEL OREAMUNO (Costa Rica)
Secretary: J. P. YOUNG
Assistant Secretary: JANET SUNDELSON
COMMITTEE 2—Operations of the Bank
Chairman: E. I. MONTOULIEU (Cuba)
Reporting Delegate: JAMES B. BRIGDEN (Australia)
Secretary: EL J. BITTERMANN
Assistant Secretary: RUTH RUSSELL
COMMITTEE 3—Organization and Management
Chairman: MIGUEL L6PEZ PUMAREJO (Colombia)
Reporting Delegate: M. H. DE KOCK (South Africa)
Secretary: MORDECAI EZEKIEL
Assistant Secretary: CAPTAIN WILLIAM L. ULLMANN
COMMITTEE 4—Form and Status of the Bank
Chairman: SIR CHINTAMAN D. DESHMUKH (India)
Reporting Delegate: LEON BARANSKI (Poland)
Secretary: HENRY EDMISTON
Assistant Secretary: COLONEL CHARLES H. DYSON
COMMISSION III
OTHER M E A N S OF INTERNATIONAL FINANCIAL COOPERATION
Chairman: EDUARDO SUAREZ (Mexico)
Vice Chairman: MAHMOUD SALEH EL FALAKY (Egypt)
Reporting Delegate: ALAN G, B. FISHER (New Zealand)
Secretary: ORVIS SCHMIDT
FINAL ACT
21
The Final Plenary Session was held on July 22, 1944. As a result
of the deliberations, as recorded in the minutes and reports of the
respective Commissions and their Committees and of the Plenary
Sessions, the following instruments were drawn up:
INTERNATIONAL MONETARY FUND
Articles of Agreement of the International Monetary Fund, which
are attached hereto as Annex A,
INTERNATIONAL
BANK FOR RECONSTRUCTION
AND
DEVELOPMENT
Articles of Agreement of the International Bank for Reconstruction and Development, which are attached hereto as Annex B.
Summary of the Agreements in Annex A and Annex B, which is
attached hereto as Annex C.
The following resolutions, statement, and recommendations were
adopted:
I
PREPARATION OF THE FINAL ACT
»
The United Nations Monetary and Financial Conference
RESOLVES:
That the Secretariat be authorized to prepare the Final Act in
accordance with the suggestions proposed by the Secretary General
mJournallNo. 19, July 19, 1944;
That the Final Act contain the definitive texts of the conclusions
approved by the Conference in plenary session, and that no changes
be made therein at the Closing Plenary Session;
That the Coordinating Committee review the text and, if approved,
submit it to the Final Plenary Session.
II
PUBLICATION OF DOCUMENTATION
The United Nations Monetary and Financial Conference RESOLVES:
That the Government of the United States of America be authorized
to publish the Final Act of this Conference; the Reports of the Commissions; the Minutes of the Public Plenary Sessions; and to make
available for publication such additional documents in connection
with the work of this Conference as in its judgment may be considered
in the public interest.
22
MONETARY AND FINANCIAL CONFERENCE
III
NOTIFICATION OF SIGNATURES AND CUSTODY OF
DEPOSITS
The United Nations Monetary and Financial Conference
RESOLVES:
To request the Government of the United States of America
(1) as depository of the Articles of Agreement of the International
Monetary Fund, to inform the Governments of all countries whose
names are set forth in Schedule A of the Articles of Agreement of the
International Monetary Fund, and all Governments whose membership is approved in accordance with Article II, Section 2, of all signatures of the Articles of Agreement; and
(2) to receive and to hold in a special deposit account gold or
United States dollars transmitted to it in accordance with Article XX,
Section 2 (d), of the Articles of Agreement of the International Monetary Fund, and to transmit such funds to the Board of Governors of
the Fund when the initial meeting has been called.
IV
STATEMENT REGARDING SILVER
The problems confronting some nations as a result of the wide
fluctuation in the value of silver were the subject of serious discussion
in Commission III. Due to the shortage of time, the magnitude of
the other problems on the agenda, and other limiting considerations,
it was impossible to give sufficient attention to this problem at this
time in order to make definite recommendations. However, it was
the sense of Commission III that the subject should merit further
study by the interested nations.
V
LIQUIDATION OF THE BANK FOR INTERNATIONAL
SETTLEMENTS
The United Nations Monetary and Financial Conference
RECOMMENDS:
The Liquidation of the Bank for International Settlements at the
earliest possible moment.
VI
ENEMY ASSETS AND LOOTED PROPERTY
Whereas, in anticipation of their impending defeat, enemy leaders,
enemy nationals and their collaborators are transferring assets to and
through neutral countries in order to conceal them and to perpetuate
their influence, power, and ability to plan future aggrandizement and
FINAL ACT
23
world domination, thus jeopardizing the efforts of the United Nations
to establish and permanently maintain peaceful international relations;
Whereas, enemy countries and their nationals have taken the
property of occupied countries and their nationals by open looting and
plunder, by forcing transfers under duress, as well as by subtle and
complex devices, often operated through the agency of their puppet
governments, to give the cloak of legality to their robbery; and to
secure ownership and control of enterprises in the post-war period;
Whereas, enemy countries and their nationals have also, through
sales and other methods of transfer, run the chain of their ownership
and control through occupied and neutral countries, thus making the
problem of disclosure and disentanglement one of international
character;
Whereas, the United Nations have declared their intention to do
their utmost to defeat the methods of dispossession practiced by the
enemy, have reserved their right to declare invalid any transfers of
property belonging to persons within occupied territory, and have
taken measures to protect and safeguard property, within their respective jurisdictions, owned by occupied countries and their nationals,
as well as to prevent the disposal of looted property in United Nations
markets; therefore
The United Nations Monetary and Financial Conference
1. Takes note of and fully supports steps taken by the United Nations
for the purpose of:
(a) uncovering, segregating, controlling, and making appropriate disposition of enemy assets;
(b) preventing the liquidation of property looted by the enemy,
locating and tracing ownership and control of such looted
property, and taking appropriate measures with a view to
restoration to its lawful owners;
2, RECOMMENDS:
That all Governments of countries represented at this Conference
take action consistent with their relations with the countries at war
to call upon the Governments of neutral countries
(a) to take immediate measures to prevent any disposition or
transfer within territories subject to their jurisdiction of any
(1) assets belonging to the Government or any individuals or institutions within those United Nations
occupied by the enemy; and
(2) looted gold, currency, art objects, securities, other
evidences of ownership in financial or business enterprises, and of other assets looted by the enemy;
' as well as to uncover, segregate and hold at the disposition
24
MONETARY AND FINANCIAL CONFERENCE
of the post-liberation authorities in the appropriate country
any such assets within territory subject to their jurisdiction;
(b) to take immediate measures to prevent the concealment by
fraudulent means or otherwise within countries subject to
their jurisdiction of any
(1) assets belonging to, or alleged to belong to, the Gov*
eminent of and individuals or institutions within
enemy countries;
(2) assets belonging to, or alleged to belong to, enemy
leaders, their associates and collaborators; and
to facilitate their ultimate delivery to the post-armistice
authorities.
VII
INTEKNATIONAL ECONOMIC PROBLEMS
Whereas, in Article I of the Articles of Agreement of the International Monetary Fund it is stated that one of the principal purposes
of the Fund is to facilitate the expansion and balanced growth of
international trade, and to contribute thereby to the promotion and
maintenance of high levels of employment and real income and to
the development of the productive resources of all members as primary
objectives of economic policy;
Whereas, it is recognized that the complete attainment of this and
other purposes and objectives stated in the Agreement cannot be
achieved through the instrumentality of the Fund alone; therefore
The United Nations Monetary and Financial Conference
RECOMMENDS:
To the participating Governments that, in addition to implementing
the specific monetary and financial measures which were the subject
of this Conference, they seek, with a view to creating in the field of
international economic relations conditions necessary for the attainment of the purposes of the Fund and of the broader primary objectives of economic policy, to reach agreement as soon as possible on
ways and means whereby they may best:
(1) reduce obstacles to international trade and in other ways
promote mutually advantageous international commercial relations;
(2) bring about the orderly marketing of staple commodities at
prices fair to the producer and consumer alike;
(3) deal with the special problems of international concern which
will arise from the cessation of production for war purposes; and
(4) facilitate by cooperative effort the harmonization of national
policies of Member States designed to promote and maintain high
levels of employment and progressively rising standards of living.
FINAL ACT
25
VIII
The United Nations Monetary and Financial Conference
RESOLVES:
1. To express its gratitude to the President of the United States,
Franklin D. Roosevelt, for his initiative in convening the present
Conference and for its preparation;
2. To express to its President, The Honorable Henry Morgenthau,
Jr., its deep appreciation for the admirable manner in which he has
guided the Conference;
3. To express to the Officers and Staff of the Secretariat its appreciation for their untiring services and diligent efforts in contributing
to the attainment of the objectives of the Conference.
IN WITNESS WHEREOF, the following delegates sign the present
Final Act.
DONE at Bretton Woods, New Hampshire, on the twenty-second
day of July, nineteen hundred and forty-four, in the English language,
the original to be deposited in the archives of the Department of
State of the United States, and certified copies thereof to be furnished
by the Government of the United States of America to each of the
Governments and Authorities represented at the Conference.
For AUSTRALIA:
L. G. MELVILLE.
For purpose of certification
For BELGIUM:
GuTT
For BOLIVIA:
E BALLIVIAN
For BRAZIL:
A. DE SZA. COSTA
For CANADA:
W A MACKINTOSH.
For CHILE:
L u i s ALAMOS
For CHINA:
K'tJNG HsiANG HSI
[SEAL]
For COLOMBIA:
CARLOS L L E R A S R E S T R E P O .
For COSTA RICA:
Luis D . TINOCO C
For CUBA:
E I MONTOULIEU
26
MONETARY AND FINANCIAL CONFERENCE
For CZECHOSLOVAKIA:
L FEIERABEND
For THE DOMINICAN REPUBLIC:
A. COPELLO
For ECUADOR:
E. F . CARBO,
For EGYPT:
S. LACKANY
For EL SALVADOR:
A G . ALFARO.
For ETHIOPIA:
E P H R E M T. M E D H E N
For THE FRENCH DELEGATION:
M E N D E S FRANCE
For GREECE:
K. VARVARESSOS
For GUATEMALA:
M NORIEGA
M
For HAITI:
A. LlATTTATJD
For HONDURAS:
J U L I I N K.
CICERES
For ICELAND:
MAGNtJS SlGURDSSON.
For INDIA:
A J KAISMAN
For IRAN:
D R . T A G H I NASSR
For IRAQ:
IBRAHIM KAMAL
For LIBERIA:
WILLIAM E D E N N I S
For LUXEMBOURG:
HUGUES LEGALLAIS
For MEXICO:
EDTTARDO SUXREZ
For THE NETHERLANDS:
J. W,
BEYEN
For NEW ZEALAND:
E C FUSSELL
FINAL ACT
For NICARAGUA:
GuiLLERMO SEVILLA S A C A S A
For NORWAY:
WlLHELM KEILHAU
For PANAMA:
A. G. ARANGO
For PARAGUAY:
N. CAMPOS E O S
For PERU:
P. G. BELTRXN
For THE PHILIPPINE COMMONWEALTH:
A SORIANO
For POLAND:
LUDWIK GROSFELD
For THE UNION OF SOUTH AFRICA:
S. F . N . G I E
For THE UNION OF SOVIET SOCIALIST REPUBLICS:
M. S. STEPANOV
For THE UNITED KINGDOM:
KEYNES
For THE UNITED STATES OF AMERICA:
HENRY MORGENTHATT J R .
For URUGUAY:
MARIO L A GAMMA
For VENEZUELA:
The Venezuelan Delegation wishes to
express that its signing of this Act does not
imply any recommendation to its Government as to the acceptance of the documents
herein contained. The Venezuelan Delegation shall present to its Government these
documents for their careful examination
within the broad spirit of collaboration that
has always guided the acts of our Government.
RODOLFO KOJAS
For YUGOSLAVIA:
Dr. VLADIMIR RYBAS
[SEAL]
WARREN KELCHNER
Secretary General
27
Annex A
ARTICLES OF AGREEMENT OF THE
INTERNATIONAL MONETARY FUND
The Governments on whose behalf the present Agreement is signed
agree as follows:
INTRODUCTORY ARTICLE
The International Monetary Fund is established and shall operate
in accordance with the following provisions:
ARTICLE I
PUKPOSES
The purposes of the International Monetary Fund are:
(i) To promote international monetary cooperation through
a permanent institution which provides the machinery for
consultation and collaboration on international monetary
problems.
(ii) To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion
and maintenance of high levels of employment and real
income and to the development of the productive resources
of all members as primary objectives of economic policy.
(iii) To promote exchange stability, to maintain orderly exchange
arrangements among members, and to avoid competitive
exchange depreciation.
(iv) To assist in the establishment of a multilateral system of
payments in respect of current transactions between members and in the elimination of foreign exchange restrictions
which hamper the growth of world trade.
(v) To give confidence to members by making the Fund's
resources available to them under adequate safeguards,
thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to
measures destructive of national or international prosperity.
(vi) In accordance with the above, to shorten the duration and
lessen the degree of disequilibrium in the international
balances of payments of members.
The Fund shall be guided in all its decisions by the purposes set forth
in this Article.
28
FINAL ACT, ANNEX A
29
AETICLE II
MEMBERSHIP
Section 1. Original members
The original members of the Fund shall be those of the countries
represented at the United Nations Monetary and Financial Conference whose governments accept membership before the date specified
in Article XX, Section 2 (e).
Section 2. Other members
Membership shall be open to the governments of other countries
at such times and in accordance with such terms as may be prescribed
by the Fund.
AETICLE III
QUOTAS AND SUBSCRIPTIONS
Section 1. Quotas
Each member shall be assigned a quota. The quotas of the members represented at the United Nations Monetary and Financial
Conference which accept membership before the date specified in
Article XX, Section 2 (e), shall be those set forth in Schedule A. The
quotas of other members shall be determined by the Fund.
Section 2. Adjustment of quotas
The Fund shall at intervals of five years review, and if it deems it
appropriate propose an adjustment of, the quotas of the members.
It may also, if it thinks fit, consider at any other time the adjustment
of any particular quota at the request of the member concerned. A
four-fifths majority of the total voting power shall be required for
any change in quotas and no quota shall be changed without the consent of the member concerned.
Section 3. Subscriptions: time, placed and form of payment
(a) The subscription of each member shall be equal to its quota
and shall be paid in full to the Fund at the appropriate depository on
or before the date when the member becomes eligible under Article
XX, Section 4 (c) or (d), to buy currencies from the Fund.
(b) Each member shall pay in gold, as a minimum, the smaller of
(i) twenty-five percent of its quota; or
(ii) ten percent of its net official holdings of gold and United
States dollars as at the date when the Fund notifies members
• under Article XX, Section 4 (a) that it will shortly be in a
position to begin exchange transactions.
603992—44
3
30
MONETARY AND FINANCIAL CONFERENCE
Each member shall furnish to the Fund the data necessary to determine its net official holdings of gold and United States dollars.
(c) Each member shall pay the balance of its quota in its own
currency.
(d) If the net official holdings of gold and United States dollars of
any member as at the date referred to in (b) (ii) above are not ascertainable because its territories have been occupied by the enemy,
the Fund shall fix an appropriate alternative date for determining
such holdings. If such date is later than that on which the country
becomes eligible under Article XX, Section 4 (c) or (d), to buy currencies from the Fund, the Fund and the member shall agree on a
provisional gold payment to be made under (b) above, and the balance
of the member's subscription shall be paid in the member's currency,
subject to appropriate adjustment between the member and the Fund
when the net official holdings have been ascertained.
Section 4* Payments when quotas are changed
(a) Each member which consents to an increase in its quota shall,
within thirty days after the date of its consent, pay to the Fund
twenty-five percent of the increase in gold and the balance in its own
currency. If, however, on the date when the member consents to
an increase, its monetary reserves are less than its new quota, the
Fund may reduce the proportion of the increase to be paid in gold.
(b) If a member consents to a reduction in its quota, the Fund shall,
within thirty days after the date of the consent, pay to the member
an amount equal to the reduction. The payment shall be made in the
member's currency and in such amount of gold as may be necessary
to prevent reducing the Fund's holdings of the currency below seventyfive percent of the new quota.
Section 5. Substitution oj securities jot currency
The Fund shall accept from any member in place of any part of
the member's currency which in the judgment of the Fund is not
needed for its operations, notes or similar obligations issued by the
member or the depository designated by the member under Article
XIII, Section 2, which shall be non-negotiable, non-interest bearing
and payable at their par value on demand by crediting the account
of the Fund in the designated depository. This Section shall apply
not only to currency subscribed by members but also to any currency
otherwise due to, or acquired by, the Fund.
FINAL ACT, ANNEX A
ARTICLE
31
IV
PAR VALUES OF CURRENCIES
Section 1. Expression of par values
(a) The par value of the currency of each member shall be expressed in terms of gold as a common denominator or in terms of the
United States dollar of the weight and fineness in effect on July 1,
1944.
(b) All computations relating to currencies of members for the
purpose of applying the provisions of this Agreement shall be on the
basis of their par values.
Section 2. Gold purchases based on par values
The Fund shall prescribe a margin above and below par value for
transactions in gold by members, and no member shall buy gold at a
price above par value plus the prescribed margin, or sell gold at a price
below par value minus the prescribed margin.
Section 3. Foreign exchange dealings based on parity
The maximum and the minimum rates for exchange transactions
between the currencies of members taking place within their territories
shall not differ from parity
(i) in the case of spot exchange transactions, by more than one
percent; and
(ii) in the case of other exchange transactions, by a margin
which exceeds the margin for spot exchange transactions by
more than the Fund considers reasonable.
Section 4. Obligations regarding exchange stability
t (a) Each member undertakes to collaborate with the Fund to
promote exchange stability, to maintain orderly exchange arrangements with other members, and to avoid competitive exchange
alterations.
(b) Each member undertakes, through appropriate measures
consistent with this Agreement, to permit within its territories
exchange transactions between its currency and the currencies of
other members only within the limits prescribed under Section 3 of
this Article. A member whose monetary authorities, for the settlement of international transactions, in fact freely buy and sell gold
within the limits prescribed by the Fund under Section 2 of this
Article shall be deemed to be fulfilling this undertaking.
Section 5. Changes in par values
(a) A member shall not propose a change in the par value of its
currency except to correct a fundamental disequilibrium.
32
MONETAEY AND FINANCIAL CONFERENCE
(b) A change in the par value of a member's currency may be
made only on the proposal of the member and only after consultation
with the Fund:
(c) When a change is proposed, the Fund shall first take into
account the changes, if any, which have already taken place in the
initial par value of the member's currency as determined under Article
XX, Section 4. If the proposed change, together with all previous
changes, whether increases or decreases,
(i) does not exceed ten percent of the initial par value, the
Fund shall raise no objection,
(ii) does not exceed a further ten percent of the initial par value,
the Fund may either concur or object, but shall declare its
attitude within seventy-two hours if the member so requests,
(iii) is not within (i) or (ii) above, the Fund may either concur
or object, but shall be entitled to a longer period in which
to declare its attitude.
(d) Uniform changes in par values made under Section 7 of this
Article shall not be taken into account in determining whether a
proposed change falls within (i), (ii), or (iii) of (c) above.
(e) A member may change the par value of its currency without
the concurrence of the Fund if the change does not affect the international transactions of members of the Fund.
(f) The Fund shall concur in a proposed change which is within
the terms of (c) (ii) or (c) (iii) above if it is satisfied that the change is
necessary to correct a fundamental disequilibrium. In particular,
provided it is so satisfied, it shall not object to a proposed change
because of the domestic social or political policies of the member
proposing the change.
Section 6. Effect of unauthorized changes
If a member changes the par value of its currency despite the
objection of the Fund, in cases where the Fund is entitled to object,
the member shall be ineligible to use the resources of the Fund unless
the Fund otherwise determines; and if, after the expiration of a
reasonable period, the difference between the member and the Fund
continues, the matter shall be subject to the provisions of Article
XV, Section 2 (b).
Section 7. Uniform changes in par values
Notwithstanding the provisions of Section 5 (b) of this Article, the
Fund by a majority of the total voting power may make uniform proportionate changes in the par values of the currencies of all members,
provided each such change is approved by every member which has
ten percent or more of the total of the quotas. . The par value of a
FINAL ACT, ANNEX A
33
member's currency shall, however, not be changed under this provision if, within seventy-two hours of the Fund's action, the member
informs the Fund that it does not wish the par value of its currency
to be changed by such action.
Section 8. Maintenance of gold value of the Fund's assets
(a) The gold value of the Fund's assets shall be maintained notwithstanding changes in the par or foreign exchange value of the
currency of any member.
(b) Whenever (i) the par value of a member's currency is reduced,
or (ii) the foreign exchange value of a member's currency has, in the
opinion of the Fund, depreciated to a significant extent within that
member's territories, the member shall pay to the Fund within a
reasonable time an amount of its own currency equal to the reduction
in the gold value of its currency held by the Fund.
(c) Whenever the par value of a member's currency is increased,
the Fund shall return to such member within a reasonable time an
amount in its currency equal to the increase in the gold value of its
currency held by the Fund.
(d) The provisions of this Section shall apply to a uniform proportionate change in the par values of the currencies of all members,
unless at the time when such a change is proposed the Fund decides
otherwise.
Section 9. Separate currencies within a member's territories
A member proposing a change in the par value of its currency shall
be deemed, unless it declares otherwise, to be proposing a corresponding change in the par value of the separate currencies of all territories
in respect of which it has accepted this Agreement under Article XX,
Section 2 (g). It shall, however, be open to a member to declare that
its proposal relates either to the metropolitan currency alone, or only
to one or more specified separate currencies, or to the metropolitan
currency and one or more specified separate currencies.
ARTICLE V
TRANSACTIONS WITH THE FUND
Section 1. Agencies dealing with the Fund
Each member shall deal with the Fund only through its Treasury,
central bank, stabilization fund or other similar fiscal agency and the
Fund shall deal only with or through the same agencies.
Section 2. limitation on the Fund's operations
Except as otherwise provided in this Agreement, operations on the
account of the Fund shall be limited to transactions for the purpose
34
MONETARY AND FINANCIAL CONFERENCE
of .supplying a member, on the initiative of such member, with the
currency of another member in exchange for gold or for the currency
of the member desiring to make the purchase.
Section 3. Conditions governing use oj the Fund's resources
(a) A member shall be entitled to buy the currency of another
member from the Fund in exchange for its own currency subject to
the following conditions:
(i) The member desiring to purchase the currency represents
that it is presently needed for making in that currency
payments which are consistent with the provisions of this
Agreement;
(ii) The Fund has not given notice under Article VII, Section 3,
that its holdings of the currency desired have become scarce;
(iii) The proposed purchase would not cause the Fund's holdings
of the purchasing member's currency to increase by more
than twenty-five percent of its quota during the period of
twelve months ending on the date of the purchase nor to
exceed two hundred percent of its quota, but the twenty-five
percent limitation shall apply only to the extent that the
Fund's holdings of the member's currency have been
brought above seventy-five percent of its quota if they
had been below that amount;
(iv) The Fund has not previously declared under Section 5 of
this Article, Article IV, Section 6, Article VI, Section 1,
or Article XV, Section 2 (a), that the member desiring to
purchase is ineligible to use the resources of the Fund.
(b) A member shall not be entitled without the permission of the
Fund to use the Fund's resources to acquire currency to hold against
forward exchange transactions.
Section 4. Waiver of conditions
The Fund may in its discretion, and on terms which safeguard its
interests, waive any of the conditions prescribed in Section 3 (a) of
this Article, especially in the case of members with a record of avoiding large or continuous use of the Fund's resources. In making a
waiver it shall take into consideration periodic or exceptional requirements of the member requesting the waiver. The Fund shall also take
into consideration a member's willingness to pledge as collateral
security gold, silver, securities, or other acceptable assets having a
value sufficient in the opinion of the Fund to protect its interests and
may require as a condition of waiver the pledge of such collateral
security.
FINAL ACT, ANNEX A
35
Section 5. Ineligibttity to use the Fund's resources
Whenever the Fund is of the opinion that any member is using the
resources of the Fund in a manner contrary to the purposes of the
Fund, it shall present to the member a report setting forth the views
of the Fund and prescribing a suitable time for reply. After presenting
such a report to a member, the Fund may limit the use of its resources
by the member. If no reply to the report is received from the member
within the prescribed time, or if the reply received is unsatisfactory,
the Fund may continue to limit the member's, use of the Fund's
resources or may, after giving reasonable notice to the member,
declare it ineligible to use the-resources of the Fund.
Section 6. Purchases of currencies from the Fund for gold
(a) Any member desiring to obtain, directly or indirectly, the
currency of another member for gold shall, provided that it can do so
with equal advantage, acquire it by the sale of gold to the Fund.
(b) Nothing in this Section shall be deemed to preclude any
member from selling in any market gold newly produced from mines
located within its territories.
Section 7. Repurchase by a member of its currency held by the Fund
(a) A member may repurchase from the Fund and the Fund shall
sell for gold any part of the Fund's holdings of its currency in excess
of its quota.
(b) At the end of each financial year of the Fund, a member shall
repurchase from the Fund with gold or convertible currencies, as
determined in accordance with Schedule B, part of the Fund's holdings
of its currency under the following conditions: '
(i) Each member shall use in repurchases of its own currency
from the Fund an amount of its monetary reserves equal in
value to one-half of any increase that has occurred during the
year in the Fund's holdings of its currency plus one-half of
any increase, or minus one-half of any decrease, that has
occurred during the year in the member's monetary reserves.
This rule shall not apply when a member's monetary reserves
have decreased during the year by more than the Fund's
holdings of its currency have increased.
(ii) If after the repurchase described in (i) above (if required) has
been made, a member's holdings of another member's currency (or of gold acquired from that member) are found to
have increased by reason of transactions in terms of that
currency with other members or peisons in their territories,
the member whose holdings of such currency (or gold) have
thus increased shall use the increase to repurchase its own
currency from the Fund.
36
MONETARY AND FINANCIAL CONFERENCE
(c) None of the adjustments described in (b) abovre shall be carried
to a point at which
(i) the member's monetary reserves are below its quota, or
(ii) the Fund's holdings of its currency are below seventy-five
percent of its quota, or
(iii) the Fund's holdings of any currency required to be used are
above seventy-five percent of the quota of the member
concerned.
Section 8. Charges
(a) Any member buying the currency of another member from the
Fund in exchange for its own currency shall pay a service charge
uniform for all members of three-fourths percent in addition to the
parity price. The Fund in its discretion may increase this service
charge to not more than one percent or reduce it to not less than
one-half percent.
(b) The Fund may levy a reasonable handling charge on any
member buying gold from the Fund or selling gold to the Fund.
(c) The Fund shall levy charges uniform for all members which
shall be payable by any member on the average daily balances of its
currency held by the Fund in excess of its quota. These charges shall
be at the following rates:
(i) On amounts not more than twenty-Jive percent in excess of the
quota: no charge for the first three months; one-half percent
per annum for the next nine months; and thereafter an increase in the charge of one-half percent for each subsequent
year.
(ii) On amounts more than twenty-Jive percent and not more than
fifty percent in excess of the quota: an additional one-half per-
cent for the first year; and an additional one-half percent for
each subsequent year.
(iii) On each additional bracket of twenty-Jive percent in excess of
the quota: an additional one-half percent for the first year;
and an additional one-half percent for each subsequent year.
(d) Whenever the Fund's holdings of a member's currency are such
that the charge applicable to any bracket for any period has reached
the rate of four percent per annum, the Fund and the member shall
consider means by which the Fund's holdings of the currency can be
reduced. Thereafter, the charges shall rise in accordance with the
provisions of (c) above until they reach five percent and failing agreement, the Fund may then impose such charges as it deems appropriate.
(e) The rates referred to in (c) and (d) above may be changed by a
three-fourths majority of the total voting power.
FINAL ACT, ANNEX A
37
(f) All charges shall be paid in gold. If, however, the member's
monetary reserves are less than one-half of its quota, it shall pay in
gold only that proportion of the charges due which such reserves bear
to one-half of its quota, and shall pay the balance in its own currency.
AKTICLE VI
CAPITAL TRANSFERS
Section 1. Use of the Fund's resources jor capital transfers
(a) A member may not make net use of the Fund's resources to
meet a large or sustained outflow of capital, and the Fund may
request a member to exercise controls to prevent such use of the
resources of the Fund. If, after receiving such a request, a member
fails to exercise appropriate controls, the Fund may declare the
member ineligible to use the resources of the Fund,
(b) Nothing in this Section shall be deemed
(i) to prevent the use of the resources of the Fund for capital
transactions of reasonable amount required for the expansion
of exports or in the ordinary course of trade, banking or
other business, or
(ii) to affect capital movements which are met out of a member's
own resources of gold and foreign exchange, but members
undertake that such capital movements will be in accordance
with the purposes of the Fund.
Section 2. Special provisionsfor capital transfers
If the Fund's holdings of the currency of a member have remained
below seventy-five percent of its quota for an immediately preceding
period of not less than six months, such member, if it has not been
declared ineligible to use the resources of the Fund under Section 1 of
this Article, Article IV, Section 6, Article V, Section 5, or Article XV,
Section 2 (a), shall be entitled, notwithstanding the provisions of
Section 1 (a) of this Article, to buy the currency of another member
from the Fund with its own currency for any purpose, including
capital transfers. Purchases for capital transfers under this Section
shall not, however, be permitted if they have the effect of raising the
Fund's holdings of the currency of the member desiring to purchase
above seventy-five percent of its quota, or of reducing the Fund's
holdings of the currency desired below seventy-five percent of the
quota of the member whose currency is desired.
Section 3. Controls of capital transfers
Members may exercise such controls as are necessary to regulate
international capital movements, but no member may exercise these
controls in a manner which will restrict payments for current trans
38
MONETARY AND FINANCIAL CONFERENCE
actions or which will unduly delay transfers of funds in settlement of
commitments, except as provided in Article VII, Section 3 (b), and in
Article XIV, Section 2.
ARTICLE VII
SCARCE CURRENCIES
Section 1. Qmetal scarcity of currency
If the Fund finds that a general scarcity of a particular currency is
developing, the Fund may so inform members and may issue a report
setting forth the causes of the scarcity and containing recommendations designed to bring it to an end. A representative of the member
whose currency is involved shall participate in the preparation of the
report.
Section 2. Measures to replenish the Fund's holdings of scarce currencies
The Fund may, if it deems such action appropriate to replenish its
holdings of any member's currency, take either or both of the following
steps:
(i) Propose to the member that, on terms and conditions agreed
between the Fund and the member, the latter lend its currency to the Fund or that, with the approval of the member,
the Fund borrow such currency from some other source either
within or outside the territories of the member, but no
member shall be under any obligation to make such loans
to the Fund or to approve the borrowing of its currency by
the Fund from any other source,
(ii) Require the member to sell its currency to the Fund for gold.
Section 3. Scarcity ojthe Fund's holdings
(a) If it becomes evident to the Fund that the demand for a member's currency seriously threatens the Fund's ability to supply that
currency, the Fund, whether or not it has issued a report under Section 1 of this Article, shall formally declare such currency scarce and
shall thenceforth apportion its existing and accruing supply of the
scarce currency with due regard* to the relative needs of members, the
general international economic situation and any other pertinent considerations. The Fund shall also issue a report concerning its action.
(b) A foimal declaration under (a) above shall operate as an
authoiization to any member, after consultation with the Fund,
temporarily to impose limitations on the freedom of exchange operations in the scarce currency. Subject to the provisions of Article
IV, Sections 3 and 4, the member shall have complete jurisdiction in
determining the nature of such limitations, but they shall be no more
FINAL ACT, ANNEX A
39
restrictive than is necessary to limit the demand for the scarce currency to the supply held by, or accruing to, the member in question;
and they shall be relaxed and removed as iapidly as conditions permit,
(c) The authorization under (b) above shall expire whenever the
Fund formally declares the currency in question to be no longer scarce.
Section 4. Administration of restrictions
Any member imposing restrictions in respect of the currency of any
other member pursuant to the provisions of Section 3 (b) of this
Article shall give sympathetic consideration to any representations
by the other member regarding the administration of such restrictions.
Section 5. Effect oj other international agreements on restrictions
Members agree not to invoke the obligations of any engagements
entered into with other members prior to this Agreement in such a
manner as will prevent the operation of the provisions of this Article.
ARTICLE
VIII
GENERAL OBLIGATIONS OF MEMBERS
Section 1. Introduction
In addition to the obligations assumed under other articles of this
Agreement, each member undertakes the obligations set out in this
Article.
Section 2. Avoidance oj restrictions on current payments
(a) Subject to the provisions of Article VII, Section 3 (b), and
Article XIV, Section 2, no member shall, without the approval of the
Fund, impose restrictions on the making of payments and transfers
for current international transactions.
(b) Exchange contracts which involve the currency of any member
and which are contrary to the exchange control regulations of that
member maintained or imposed consistently with this Agreement
shall be unenforceable in the territories of any member. In addition,
members may, by mutual accord, co-operate in measures for the purpose of making the exchange control regulations of either member
more effective, provided that such measures and regulations are
consistent with this Agreement.
Section 3. Avoidance oj discriminatory currency practices
No member shall engage in, or permit any of its fiscal agencies
referred to in Article V, Section 1, to engage in, any discriminatory
currency arrangements or multiple currency practices except as authorized under this Agreement or approved by the Fund. If such
40
MONETARY AND FINANCIAL CONFERENCE
arrangements and practices are engaged in at the date when this
Agreement enters into force the member concerned shall consult with
the Fund as to their progressive removal unless they are maintained
or imposed under Article XIV, Section 2, in which case the provisions
of Section 4 of that Article shall apply.
Section 4. Convertibility of foreign held balances
(a) Each member shall buy balances of its currency held by another
member if the latter, in requesting the purchase, represents
(i) that the balances to be bought have been recently acquired
as a result of current transactions; or
(ii) that their conversion is needed for making payments for current transactions.
The buying member shall have the option to pay either in the currency
of the member making the request or in gold.
(b) The obligation in (a) above shall not apply
(i) when the convertibility of the balances has been restricted
consistently with Section 2 of this Article, or Article VI,
Section 3; or
(ii) when the balances have accumulated as a result of transactions effected before the removal by a member of restrictions
maintained or imposed under Article XIV, Section 2; or
(iii) when the balances have been acquired contrary to the exchange regulations of the member which is asked to buy
them; or
(iv) when the currency of the member requesting the purchase
has been declared scarce under Article VII, Section 3 (a); or
(v) when the member requested to make the purchase is for
any reason not entitled to buy currencies of other members
from the Fund for its own currency.
Section 5. Furnishing of information
(EL) The Fund may require members to furnish it with such information as it deems necessary for its operations, including, as the minimum
necessary for the effective discharge of the Fund's duties, national
data on the following matters:
(i) Official holdings at home and abroad, of (1) gold, (2)
foreign exchange.
(ii) Holdings at home and abroad by banking and financial
agencies, other than official agencies, of (1) gold, (2) foreign
exchange,
(iii) Production of gold.
FINAL ACT, ANNEX A
41
(iv) Gold exports and imports according to countries of destination and origin.
(v) Total exports and imports of merchandise, in terms of
local currency values, according to countries of destination
and origin.
(vi) International balance of payments, including (1) trade in
goods and services, (2) gold transactions, (3) known capital
transactions, and (4) other items.
(vii) International investment position, i. e.t investments within
the territories of the member owned abroad and investments abroad owned by persons in its territories so far as
it is possible to furnish this infoimation.
(viii) National income.
» (ix) Price indices, i. e., indices of commodity prices in wholesale and retail markets and of export and import prices.
(x) Buying and selling rates for foreign currencies.
(xi) Exchange controls, i. e., a comprehensive statement of
exchange controls in effect at the time of assuming membership in the Fund and details of subsequent changes as
they occur.
(xii) Where official clearing arrangements exist, 6 details of
amounts awaiting clearance in respect of commercial and
financial transactions, and of the length of time duiing
which such arrears have been outstanding.
(b) In requesting information the Fund shall take into consideration
the varying ability of members to furnish the data requested. Members shall be under no obligation to furnish information in such detail
that the affairs of individuals or corporations are disclosed. Members
undertake, however, to furnish the desired information in as detailed
and accurate a manner as is practicable, and, so far as possible, to
avoid mere estimates.
(c) The Fund may arrange to obtain further information by agreement with members. It shall act as a centre for the collection and
exchange of information on monetary and financial problems, thus
facilitating the preparation of studies designed to assist members in
developing policies which further the purposes of the Fund.
Section 6. Consultation between members regarding existing international agreements
Where under this Agreement a member is authorized in the special
or temporary circumstances specified in the Agreement to maintain
or establish restrictions on exchange transactions, and there are other
engagements between members entered into prior to this Agreement
which conflict with the application of such restrictions, the parties
42
MONETARY AND FINANCIAL CONFERENCE
to such engagements will consult with one another with a view to
making such mutually acceptable adjustments as may be necessary.
The provisions of this Article shall be without prejudice to the operation of Article VII, Section 5.
ARTICLE IX
STATUS, IMMUNITIES AND PRIVILEGES
Section 1. Purposes of Article
To enable the Fund to fulfill the functions with which it is entrusted,
the status, immunities and privileges set forth in this Article shall be
accorded to the Fund in the territories of each member.
Section 2. Status of the Fund
The Fund shall possess full juridical personality, and, in particular,
the capacity:
(i) to contract;
(ii) to acquire and dispose of immovable and movable property;
(iii) to institute legal proceedings.
Section 3. Immunity from judicial process
The Fund, its property and its assets, wherever located and by
whomsoever held, shall enjoy immunity from every form of judicial
process except to the extent that it expressly waives its immunity
for the purpose of any proceedings or by the terms of any contract.
Section 4. Immunity from other action
Property and assets of the Fund, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation,
expropriation or any other form of seizure by executive or legislative
action.
Section 5. Immunity of archives
The archives of the Fund shall be inviolable.
Section 6. Freedom of assets from restrictions
To the extent necessary to carry out the operations provided for in
this Agreement, all property and assets of the Fund shall be free from
restrictions, regulations, controls and moratoria of any nature.
Section 7. Privilege for communications
The official communications of the Fund shall be accorded by
members the same treatment as the official communications of other
members.
FINAL ACT, ANNEX A
43
Section 8. Immunities and privileges of officers and employees
All governors, executive directors, alternates, officers and employees of the Fund
(i) shall be immune from legal process with respect to acts performed by them in their official capacity except when the
Fund waives this immunity.
(ii) not being local nationals, shall be granted the same immunities from immigration restrictions, alien registration
requirements and national service obligations and the same
facilities as regards exchange restrictions as are accorded by
members to the representatives, officials, and employees of
comparable rank of other members.
(iii) shall be granted the same treatment in respect of travelling
facilities as is accorded by members to representatives,
officials and employees of comparable rank of other members.
Section 9. Immunities from taxation
(a) The Fund, its assets, property, income and its operations and
transactions authorized by this Agreement, shall be immune from all
taxation and from all customs duties. The Fund shall also be immune
from liability for the collection or payment of any tax or duty.
(b) No tax shall be levied on or in respect of salaries and emoluments paid by the Fund to executive directors, alternates, officers or
employees of the Fund who are not local citizens, local subjects, or
other local nationals.
(c) No taxation of any kind shall be levied on any obligation or
security issued by the Fund, including any dividend or interest thereon,
by whomsoever held
(i) which discriminates against such obligation or security solely
because of its origin; or
(ii) if the sole jurisdictions 1 basis for such taxation is the place
or currency in which it is issued, made payable or paid, or
the location of any office or place of business maintained
by the Fund.
Section 10. Application of Article
Each member shall take such action as is necessary in its own
territories for the purpose of making effective in terms of its own law
the principles set forth in this Article and shall inform the Fund of
the detailed action which it has taken.
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MONETARY AND FINANCIAL CONFERENCE
ARTICLE
X
EELATIONS WITH OTHER INTERNATIONAL ORGANIZATIONS
The Fund shall cooperate within the terms of this Agreement with
any general international organization and with public international
organizations having specialized responsibilities in related fields. Any
arrangements for such cooperation which would involve a modification of any provision of this Agreement may be effected only after
amendment to this Agreement under Article XVII.
ARTICLE XI
RELATIONS WITH NON-MEMBER
COUNTRIES
Section 1. Undertakings regarding relations with non-member countries
Each member undertakes:
(i) Not to engage in, nor to permit any of its fiscal agencies
referred to in Article V, Section 1, to engage in, any transactions with a non-member or with persons in a non-member's territories which would be contrary to the provisions
of this Agreement or the purposes of the Fund;
(ii) Not to cooperate with a non-member or with persons in a
non-member's territories in practices which would be contrary to the provisions of this Agreement or the purposes
of the Fund; and
(iii) To cooperate with the Fund with a view to the application
in its territories of appropriate measures to prevent transactions with non-members or with persons in their territories
which would be contrary to the provisions of this Agreement
or the purposes of the Fund.
Section 2. Restrictions on transactions with non-member countries
Nothing in this Agreement shall affect the right of any member
to impose restrictions on exchange transactions with non-members or
with persons in their territories unless the Fund finds that such
restrictions prejudice the interests of members and are contrary to
the purposes of the Fund.
ARTICLE XII
ORGANIZATION AND MANAGEMENT
Section 1. Structure oj the Fund
The Fund shall have a Board of Governors, Executive Directors, a
Managing Director and a staff.
FINAL ACT, ANNEX A
45
Section 2. Board of Governors
(a) All powers of the Fund shall be vested in the Board of Governors, consisting of one governor and one alternate appointed by each
member in such manner as it may determine. Each governor and
each alternate shall serve for five years, subject to the pleasure of the
member appointing him, and may be reappointed. No alternate may
vote except in the absence of his principal. The Board shall select one
of the governors as chairman.
(b) The Board of Governors may delegate to the Executive Directors authority to exercise any powers of the Board, except the power
to:
(i) Admit new members and determine the conditions of their
admission.
(ii) Approve a revision of quotas.
(iii) Approve a uniform change in the par value of the currencies of all members.
(iv) Make arrangements to cooperate with other international
organizations (other than informal arrangements of a
temporary or administrative character).
(v) Determine the distribution of the net income of the Fund,
(vi) Require a member to withdraw,
(vii) Decide to liquidate the Fund.
(viii) Decide appeals from interpretations of this Agreement
given by the Executive Directors.
(c) The Board of Governors shall hold an annual meeting and such
other meetings as may be provided for by the Board or called by the
Executive Directors. Meetings of the Board shall be called by the
Directors whenever requested by five members or by members having
one quarter of the total voting power.
(d) A quorum for any meeting of the Board of Governors shall be a
majority of the governors exercising not less than two-thirds of the
total voting power.
(e) Each governor shall be entitled to cast the number of votes
allotted under Section 5 of this Article to the member appointing him.
(f) The Board of Governors may by regulation establish a procedure
whereby the Executive Directors, when they deem such action to be
in the best interests of the Fund, may obtain a vote of the governors
on a specific question without calling a meeting of the Board.
(g) The Board of Governors, and the Executive Directors to the
extent authorized, may adopt such rules and regulations as may be
necessary or appropriate to conduct the business of the Fund.
(h) Governors and alternates shall serve as such without compensa603992—44
i
46
MONETARY AND FINANCIAL CONFERENCE
tion from the Fund, but the Fund shall pay them reasonable expenses
incurred in attending meetings.
(i) The Board of Governors shall determine the remuneration to be
paid to the Executive Directors and the salary and terms of the contract of service of the Managing Director.
Section 3. Executive Directors
(a) The Executive Directors shall be responsible for the conduct
of the general operations of the Fund, and for this purpose shall exercise all the powers delegated to them by the Board of Governors.
(b) There shall be not less than twelve directors who need not be
governors, and of whom
(i) Five shall be appointed by the five members having the
largest quotas;
(ii) Not more than two shall be appointed when the provisions of
(c) below apply;
(iii) Five shall be elected by the members not entitled to appoint
directors, other than the American Republics; and
(iv) Two shall be elected by the American Republics not entitled
to appoint directors.
For the purposes of this paragraph, members means governments of
countries whose names are set forth in Schedule A, whether they become members in accordance with Article XX or in accordance with
Article II, Section 2. When governments of other countries become
members, the Board of Governors may, by a four-fifths majority of the
total voting power, increase the number of directors to be elected.
(c) If, at the second regular election of directors and thereafter, the
members entitled to appoint directors under (b) (i) above do not include the two members, the holdings of whose currencies by the Fund
have been, on the average over the preceding two years, reduced below
their quotas by the largest absolute amounts in terms of gold as a
common denominator, either one or both of such members, as the case
may be, shall be entitled to appoint a director.
(d) Subject to Article XX, Section 3 (b) elections of elective
directors shall be conducted at intervals of two years in accordance
with the provisions of Schedule C, supplemented by such regulations
as the Fund deems appropriate. Whenever the Board of Governors
increases the number of directors to be elected under (b) above, it
shall issue regulations making appropriate changes in the proportion
of votes required to elect directors under the provisions of Schedule C.
(e) Each director shall appoint an alternate with full power to
act for him when he is not present. When the directors appointing
them are present, alternates may participate in meetings but may
not vote.
FINAL ACT, ANNEX A
47
(f) Directors shall continue in office until their successors are
appointed or elected. If the office of an elected director becomes
vacant more than ninety days before the end of his term, another
director shall be elected for the remainder of the term by the members
who elected the former director. A majority of the votes cast shall
be required for election. While the office remains vacant, the alternate of the former director shall exercise his powers, except that of
appointing an alternate.
(g) The Executive Directors shall function in continuous session at
the principal office of the Fund and shall meet as often as the business
of the Fund may require.
(h) A quorum for any meeting of the Executive Directors shall
be a majority of the directors representing not less than one-half of
the voting power.
(i) Each appointed director shall be entitled to cast the number
of votes allotted under Section 5 of this Article to the member appointing him. Each elected director shall be entitled to cast the number
of votes which counted towards his election. When the provisions
of Section 5 (b) of this Article are applicable, the votes which a director
would otherwise be entitled to cast shall be increased or decreased
correspondingly. All the votes which a director is entitled to cast
shall be cast as a unit.
(j) The Board of Governors shall adopt regulations under which
a member not entitled to appoint a director under (b) above may
send a representative to attend any meeting of the Executive Directors when a request made by, or a matter particularly affecting, that
member is under consideration.
(k) The Executive Directors may appoint such committees as
they deem advisable. Membership of committees need not be limited
to governors or directors or their alternates.
Section 4. Managing Director and staff
(a) The Executive Directors shall select a Managing Director who
shall not be a governor or an executive director. The Managing
Director shall be chairman of the Executive Directors, but shall have
no vote except a deciding vote in case of an equal division. He
may participate in meetings of the Board of Governors, but shall
not vote at such meetings. The Managing Director shall cease to
hold office when the Executive Directors so decide.
(b) The Managing Director shall be chief of the operating staff
of the Fund and shall conduct, under the direction of the Executive
Directors, the ordinary business of the Fund. Subject to the general
control of the Executive Directors, he shall be responsible for the
organization, appointment and dismissal of the staff of the Fund.
48
MONETARY AND FINANCIAL CONFERENCE
(c) The Managing Director and the staff of the Fund, in the discharge of their functions, shall owe their duty entirely to the Fund
and to no other authority. Each member of the Fund shall respect
the international character of this duty and shall refrain from all
attempts to influence any of the staff in the discharge of his functions.
(d) In appointing the staff the Managing Director shall, subject
to the paramount importance of securing the highest standards of
efficiency and of technical competence, pay due regard to the importance of recruiting personnel on as wide a geographical basis as possible.
Section 5. Voting
(a) Each member shall have two hundred fifty votes plus one
additional vote for each part of its quota equivalent to one hundred
thousand United States dollars.
(b) Whenever voting is required under Article V, Section 4 or 5,
each member shall have the number of votes to which it is entitled
under (a) above, adjusted:
(i) by the addition of one vote for the equivalent of each four
hundred thousand United States dollars of net sales of its
currency up to the date when the vote is taken, or
(ii) by the subtraction of one vote for the equivalent of each four
hundred thousand United States dollars of its net purchases
of the currencies of other members up to the date when the
vote is taken
provided, that neither net purchases nor net sales shall be deemed at
any time to exceed an amount equal to the quota of the member
involved.
(c) For the purpose of all computations under this Section, United
States dollars shall be deemed to be of the weight and fineness in
effect on July 1, 1944, adjusted for any uniform change under Article
IV, Section 7, if a waiver is made imder Section 8 (d) of that Article.
(d) Except as otherwise specifically provided, all decisions of the
Fund shall be made by a majority of the votes cast.
Section 6. Distribution of net income
(a) The Board of Governors shall determine annually what part
of the Fund's net income shall be placed to reserve and what part, if
any, shall be distributed.
(b) If any distribution"is~made,rthere* shalFfirst be distributed a
two percent non-cumulative payment to each member on the amount
by which seventy-five percent of its quota exceeded the Fund's average holdings of its currency during that year. The balance shall be
paid to all members in proportion to their quotas. Payments to each
member shall be made in its own currency.
FINAL ACT, ANNEX A
49
Section 7. Publication of reports
(a) The Fund shall publish an annual report containing an audited
statement of its accounts, and shall issue, at intervals of three months
or less, a summary statement of its transactions and its holdings of
gold and currencies of members.
(b) The Fund may publish such other reports as it deems desirable
for carrying out its purposes.
Section 8. Communication of views to members
The Fund shall at all times have the right to communicate its
views informally to any member on any matter arising under this
Agreement. The Fund may, by a two-thirds majority of the total
voting power, decide to publish a report made to a member regarding
its monetary or economic conditions and developments which directly
tend to produce a serious disequilibrium in the international balance
of payments of members. If the member is not entitled to appoint
an executive director, it shah1 be entitled to representation in accordance with Section 3 (j) of this Article. The Fund shall not publish
a report involving changes in the fundamental structure of the economic organization of members.
ARTICLE
XIII
OFFICES AND DEPOSITORIES
Section 1. Location of offices
The principal office of the Fund shall be located in the territory of
the member having the largest quota, and agencies or branch offices
may be established in the territories of other members.
Section 2. Depositories
(a) Each member country shall designate its central bank as a
depository for all the Fund's holdings of its currency, or if it has no
central bank it shall designate such other institution as may be
acceptable to the Fund.
(b) The Fund may hold other assets, including gold, in the depositories designated by the five members having the largest quotas and
in such other designated depositories as the Fund may select. Initially,
at least one-half of the holdings of the Fund shall be held in the
depository designated by the member in whose territories the Fund
has its principal office and at least forty percent shall be held in the
depositories designated by the remaining four members referred to
above. However, all transfers of gold by the Fund shall be made
with duo regard to the costs of transport and anticipated requirements of the Fund. In an emergency the Executive Directors may
50
MONETARY AND FINANCIAL CONFERENCE
transfer all or any part of the Fund's gold holdings to any place where
they can be adequately protected.
Section 3. Guarantee of the Fund's assets
Each member guarantees all assets of the Fund against loss resulting
from failure or default on the part of the depository designated by it.
ARTICLE XTV
TRANSITIONAL PERIOD
Section 1. Introduction
The Fund is not intended to provide facilities for relief or reconstruction or to deal with international indebtedness arising out of the war.
Section 2. Exchange restrictions
In the post-war transitional period members may, notwithstanding
the provisions of any other articles of this Agreement, maintain and
adapt to changing circumstances (and, in the case of members whose
territories have been occupied by the enemy, introduce where necessary) restrictions on payments and transfers for current international
transactions. Members shall, however, have continuous regard in
their foreign exchange policies to the purposes of the Fund; and, as soon
as conditions permit, they shall take all possible measures to develop
such commercial and financial arrangements with other members as
will facilitate international payments and the maintenance of exchange stability. In particular, members shall withdraw restrictions
maintained or imposed under this Section as soon as they are satisfied
that they will be able, in the absence of such restrictions, to settle
their balance of payments in a manner which will not unduly encumber
their access to the resources of the Fund.
Section 3. Notification to the Fund
Each member shall notify the Fund before it becomes eligible under
Article XX, Section 4 (c) or (d), to buy currency from the Fund,
whether it intends to avail itself of the transitional arrangements in
Section 2 of this Article, or whether it is prepared to accept the obligations of Article VIII, Sections 2, 3, and 4. A member availing
itself of the transitional arrangements shall notify the Fund as soon
thereafter as it is prepared to accept the above-mentioned obligations.
Section 4; Action of the Fund relating to restrictions
Not later than three years after the date on which the Fund begins
operations and in each year thereafter, the Fund shall report on the
restrictions still in force under Section 2 of this Article. Five years
FINAL ACT, ANNEX A
51
after the date on which the Fund begins operations, and in each year
thereafter, any member still retaining any restrictions inconsistent
with Article VIII, Sections 2, 3, or 4, shall consult the Fund as to
their further retention. The Fund may, if it deems such action necessary in exceptional circumstances, make representations to any
member that conditions are favorable for the withdrawal of any
particular restriction, or for the general abandonment of restrictions,
inconsistent with the provisions of any other articles of this Agreement.
The member shall be given a suitable time to reply to such representations. If the Fund finds that the member persists in maintaining restrictions which are inconsistent with the purposes of the Fund, the
member shall be subject to Article XV, Section 2 (a).
Section 5. Nature of transitional period
In its relations with members, the Fund shall recognize that the
post-war transitional period will be one of change and adjustment and
in making decisions on requests occasioned thereby which are presented by any member it shall give the member the benefit of any
reasonable doubt.
ARTICLE XV
WITHDRAWAL FROM MEMBERSHIP
Section 1. Right of members to withdraw
Any member may withdraw from the Fund at any time by transmitting a notice in writing to the Fund at its principal office. Withdrawal shall become effective on the date such notice is received.
' Section 2. Compulsory withdrawal
(a) If a member fails to fulfill any of its obligations under this
Agreement, the Fund may declare the member ineligible to use the
resources of the Fund. Nothing in this Section shall be deemed to
limit the provisions of Article IV, Section 6, Article V, Section 5, or
Article VI, Section 1.
(b) If, after the expiration of a reasonable period the member
persists in its failure to fulfill any of its obligations under this Agreement, or a difference between a member and the Fund under Article
IV, Section 6, continues, that member may be required to withdraw
from membership in the Fund by a decision of the Board of Governors
carried by a majority of the governors representing a majority of the
total voting power.
(c) Regulations shall be adopted to ensure that before action is
taken against any member under (a) or (b) above, the member shall
be informed in reasonable time of the complaint against it and given
an adequate opportunity for stating its case, both orally and in writing.
52
MONETARY AND FINANCIAL CONFERENCE
Section 3. Settlement of accounts with members withdrawing
When a member withdraws from the Fund, normal transactions of
the Fund in its currency shall cease and settlement of all accounts
between it and the Fund shall be made with reasonable despatch by
agreement between it and the Fund. If agreement is not reached
promptly, the provisions of Schedule D shall apply to the settlement
of accounts.
ARTICLE
XVI
EMERGENCY PROVISIONS
Section 1. Temporary suspension
(a) In the event of an emergency or the development of unforeseen
circumstances threatening the operations of the Fund, the Executive
Directors by unanimous vote may suspend for a period of not more
than one hundred twenty days the operation of any of the following
provisions:
(i) Article IV, Sections 3 and 4(b)
(ii) Article V, Sections 2, 3, 7, 8 (a) and (f)
(iii) Article VI, Section 2
(iv) Article XI, Section 1
(b) Simultaneously with any decision to suspend the operation of
any of the foregoing provisions, the Executive Directors shall call a
meeting of the Board of Governors for the earliest practicable date.
(c) The Executive Directors may not extend any suspension beyond
one hundred twenty days. Such suspension may be extended, however, for an additional period of not more than two hundred forty
days, if the Board of Governors by a four-fifths majority of the total
voting power so decides, but it may not be further extended except
by amendment of this Agreement pursuant to Article XVII.
(d) The Executive Directors may, by a majority of the total voting
power, terminate such suspension at any time.
Section 2. Liquidation of the Fund
(a) The Fund may not be liquidated except by decision of the
Board of Governors. In an emergency, if the Executive Directors
decide that liquidation of the Fund may be necessary, they may temporarily suspend all transactions, pending decision by the Board.
(b) If the Board of Governors decides to liquidate the Fund, the
Fund shall forthwith cease to engage in any activities except those
incidental to the orderly collection and liquidation of its assets and
the settlement of its liabilities, and all obligations of members under
FINAL ACT, ANNEX A
53
this Agreement shall cease except those set out in this Article, in
Article XVIII, paragraph (c), in Schedule D, paragraph 7, and in
Schedule E.
(c) Liquidation shall be administered in accordance with the
provisions of Schedule E.
ARTICLE
XVII
AMENDMENTS
(a) Any proposal to introduce modifications in this Agreement,
whether emanating from a member, a governor or the Executive
Directors, shall be communicated to the chairman of the Board of
Governors who shall bring the proposal before the Board. If the
proposed amendment is approved by the Board the Fund shall, by
circular letter or telegram, ask all members whether they accept the
proposed amendment. When three-fifths of the members, having
four-fifths of the total voting power, have accepted thfe proposed
amendment, the Fund shall certify the fact by a formal communication addressed to all members.
(b) Notwithstanding (a) above, acceptance by all members is
required in the case of any amendment modifying
(i) the right to withdraw from the Fund (Article XV, Section 1);
(ii) the provision that no change in a member's quota shall be
made without its consent (Article III, Section 2);
(iii) the provision that no change may be made in the par value
of a member's currency except on the proposal of that
member (Article IV, Section 5 (b)).
(c) Amendments shall enter into force for all members three months
after the date of the formal communication unless a shorter period is
specified in the circular letter or telegram.
AKTICLB
XVIII
INTERPRETATION
(a) Any question of interpretation of the provisions of this Agreement arising between any member and the Fund or between any
members of the Fund shall be submitted to the Executive Directors
for their decision. If the question particularly affects any member
not entitled to appoint an executive director it shall be entitled to
representation in accordance with Article XII, Section 3 (j).
(b) In any case where the Executive Directors have given a decision under (a) above, any member may require that the question
be referred to the Board of Governors, whose decision shall be final.
Pending^the result of the reference to the Board the Fund may, so
54
MONETARY AND FINANCIAL CONFERENCE
far as it deems necessary, act on the basis of the decision of the
Executive Directors.
(c) Whenever a disagreement arises between the Fund and a member which has withdrawn, or between the Fund and any member
during liquidation of the Fund, such disagreement shall be submitted
to arbitration by a tribunal of three arbitrators, one appointed by the
Fund, another by the member or withdrawing member and an umpire who, unless the parties otherwise agree, shall be appointed by
the President of the Permanent Court of International Justice or such
other authority as may have been prescribed by regulation adopted
by the Fund. The umpire shall have full power to settle all questionsof procedure in any case where the parties are in disagreement with
respect thereto.
ARTICLE XIX
EXPLANATION OF TERMS
In interpreting the provisions of this Agreement the Fund and its
members shall be guided by the following:
(a) A member's monetary reserves means its net official holdings
of gold, of convertible currencies of other members, and of the currencies of such non-members as the Fund may specify.
(b) The official holdings of a member means central holdings (that
is, the holdings of its Treasury, central bank, stabilization fund, or
similar fiscal agency).
(c) The holdings of other official institutions or other banks within
its territories may, in any particular case, be deemed by the Fund,
after consultation with the member, to be official holdings to the extent
that they are substantially in excess of working balances; provided
that for the purpose of determining whether, in a particular case,
holdings are in excess of working balances, there shall be deducted
from such holdings amounts of currency due to official institutions
and banks in the territories of members or non-members specified
under (d) below.
(d) A member's holdings of convertible currencies means its holdings of the currencies of other members which are not availing themselves of the transitional arrangements under Article XIV, Section 2,
together with its holdings ^of the currencies of such non-members as
the Fund may from time to time specify. The term currency for
this purpose includes without limitation coins, paper money, bank
balances, bank acceptances, and government obligations issued with
a maturity not exceeding twelve months.
(e) A member's monetary reserves shall be calculated by deducting
from its central holdings the currency liabilities to the Treasuries,
central banks, stabilization funds, or similar fiscal agencies of other
members or non-members specified under (d) above, together with
FINAL ACT, ANNEX A
55
similar liabilities to other official institutions and other banks in the
territories of members, or non-members specified under (d) above.
To these net holdings shall be added the sums deemed to be official
holdings of other official institutions and other banks under (c)
above.
(f) The Fund's holdings of the currency of a member shall include
any securities accepted by the Fund under Article III, Section 5.
(g) The Fund, after consultation with a member which is availing
itself of the transitional arrangements under Article XIV, Section 2,
may deem holdings of the currency of that member which carry specified rights of conversion into another currency or into gold to be
holdings of convertible currency for the purpose of the calculation of
monetary reserves.
(h) For the purpose of calculating gold subscriptions under Article
III, Section 3, a member's net official holdings of gold and United
States dollars shall consist of its official holdings of gold and United
States currency after deducting central holdings of its currency by
other countries and holdings of its currency by other official institutions
and other banks if these holdings carry specified rights of conversion
into gold or United States currency.
(i) Payments for current transactions means payments which are
not for the purpose of transferring capital, and includes, without
limitation:
(1) All payments due in connection with foreign trade, other
current business, including services, and normal short-term
banking and credit facilities;
(2) Payments due as interest on loans and as net income from
other investments;
(3) Payments of moderate amount for amortization of loans or
for depreciation of direct investments;
(4) Moderate remittances for family living expenses.
The Fund may, after consultation with the members concerned,
determine whether certain specific transactions are to be considered
current transactions or capital transactions.
ARTICLE
XX
FINAL PROVISIONS
Section 1. Entry intojorce
This Agreement shall enter into force when it has been signed on
behalf of governments having sixty-five percent of the total of the
quotas set forth in Schedule A and when the instruments referred to
ia Section 2 (a) of this Article have been deposited on their behalf,
but in no event shall this Agreement enter into force before May 1,
1945.
56
MONETAEY AND FINANCIAL CONFERENCE
Section 2. Signature
(a) Each government on whose behalf this Agreement is signed
shall deposit with the Government of the United States of America
an instrument setting forth that it has accepted this Agreement in
accordance with its law and has taken all steps necessary to enable
it to carry out all of its obligations under this Agreement.
(b) Each government shall become a member of the Fund as from
the date of the deposit on its behalf of the instrument referred to in
(a) above, except that no government shall become a member before
this Agreement enters into force under Section 1 of this Article.
(c) The Government of the United States of America shall inform
the governments of all countries whose names are set forth in Schedule
A, andvall governments whose membership is approved in accordance
with Article II .Section 2, of all signatures of this Agreement and of
the deposit of all instruments referred to in (a) above.
(d) At the time this Agreement is signed on its behalf, each government shall transmit to the Government of the United States of America
one one-hundredth of one percent of its total subscription in gold or
United States dollars for the purpose of meeting administrative expenses of the Fund. The Government of the United States of America
shall hold such funds in a special deposit account and shall transmit
them to the Board of Governors of the Fund when the initial meeting
has been called under Section 3 of this Article. If this Agreement
has not come into force by December 31, 1945, the Government of
the United States of America shall return such funds to the governments that transmitted them.
(e) This Agreement shall remain open for signature at Washington
on behalf of the governments of the countries whose names are set
forth in Schedule A until December 31, 1945.
(f) After December 31, 1945, this Agreement shall be open for
signature on behalf of the government of any country whose membership has been approved in accordance with Article II, Section 2.
(g) By their signature of this Agreement, all governments accept
it both on their own behalf and in respect of all their colonies, overseas territories, all territories under their protection, suzerainty, or
authority and all territories in respect of which they exercise a mandate.
(h) In the case of governments whose metropolitan territories
have been under enemy occupation, the deposit of the instrument
referred to in (a) above may be delayed until one hundred eighty
days after the date on which these territories have been liberated.
If, however, it is not deposited by any such government before the
expiration of this period the signature affixed on behalf of that gov
FINAL ACT, ANNEX A
57
eminent shall become void and the portion of its subscription paid
under (d) above shall be returned to it.
(i) Paragraphs (d) and (h) shall come into force with regard to
each signatory government as from the date of its signature.
Section 3. Inauguration oj the Fund
(a) As soon as this Agreement enters into force under Section 1 of
this Article, each member shall appoint a governor and the member
having the largest quota shall call the first meeting of the Board of
Governors.
(b) At the first meeting of the Board of Governors, arrangements
shall be made for the selection of provisional executive directors.
The governments of the five countries for which the largest quotas
are set forth in Schedule A shall appoint provisional executive directors. If one or more of such governments have not become members,
the executive directorships they would be entitled to fill shall remain
vacant until they become members, or until January 1, 1946, whichever is the earlier. Seven provisional executive directors shall be
elected in accordance with the provisions of Schedule C and shall
remain in office until the date of the first regular election of executive
directors which shall be held as soon as practicable after January 1,
1946.
(c) The Board of Governors may delegate to the provisional executive directors any powers except those which may not be delegated
to the Executive Directors.
Section 4. Initial determination of par values
(a) When the Fund is of the opinion that it will shortly be in a
position to begin exchange transactions, it shall so notify the members
and shall request each member to communicate within thirty days the
par value of its currency based on the rates of exchange prevailing on
the sixtieth day before the entry into force of this Agreement. No
member whose metropolitan territory has been occupied by the enemy
shall be required to make such a communication while that territory
is a theater of major hostilities or for such period thereafter as the
Fund may determine. When such a member communicates the par
value of its currency the provisions of (d) below shall apply.
(b) The par value communicated by a member whose metropolitan
territory has not been occupied by the enemy shall be the par value
of that member's currency for the purposes of this Agreement unless,
within ninety days after the request referred to in (a) above has been
received, (i) the member notifies the Fund that it regards the par
value as unsatisfactory, or (ii) the Fund notifies the member that in
its opinion the par value cannot be maintained without causing recourse to the Fund on the part of that member or others on a scale
58
MONETAEY AND FINANCIAL CONFERENCE
prejudicial to the Fund and to members. When notification is given
under (i) or (ii) above, the Fund and the member shall, within a
period determined by the Fund in the light of all relevant circumstances, agree upon a suitable par value for that currency. If the
Fund and the member do not agree within the period so determined,
the member shall be deemed to have withdrawn from the Fund on the
date when the period expires.
(c) "When the par value of a member's currency has been established under (b) above, either by the expiration of ninety days without notification, or by agreement after notification, the member shall
be eligible to buy from the Fund the currencies of other members to
the full extent permitted in this Agreement, provided that the Fund
has begun exchange transactions.
(d) In the case of a member whose metropolitan territory has been
occupied by the enemy, the provisions of (b) above shall apply,
subject to the following modifications:
(i) The period of ninety days shall be extended so as to end on
a date to be fixed by agreement between the Fund and the
member.
(ii) Within the extended period the member may, if the Fund
has begun exchange transactions, buy from the Fund with
its currency the currencies of other members, but only under
such conditions and in such amounts as may be prescribed
by the Fund.
(iii) At any time before the date fixed under (i) above, changes
may be made by agreement with the Fund in the par value
communicated under (a) above.
(e) If a member whose metropolitan territory has been occupied
by the enemy adopts a new monetary unit before the date to be fixed
under (d) (i) above, the par value fixed by that member for the new
unit shall be communicated to the Fund and the provisions of (d)
above shall apply.
(f) Changes in par values agreed with the Fund under this Section shall not be taken into account in determining whether a proposed
change falls within (i), (ii), or (iii) of Article IV, Section 5 (c).
(g) A member communicating to the Fund a par value for the currency of its metropolitan territory shall simultaneously communicate
a value, in terms of that currency, for each separate currency, where
such exists, in the territories in respect of which it has accepted this
Agreement under Section 2 (g) of this Article, but no member shall be
required to make a communication for the separate currency of a
territory which has been occupied by the enemy while that territory
is a theater of major hostilities or for such period thereafter as the
Fund may determine. On the basis of the par value so communicated,
FINAL ACT, ANNEX A
59
the Fund shall compute the par value of each separate currency. A
communication or notification to the Fund under (a), (b) or (d) above
regarding the par value of a currency, shall also be deemed, unless the
contrary is stated, to be a communication or notification regarding the
par value of all the separate currencies referred to above. Any member may, however, make a communication or notification relating to
the metropolitan or any of the separate currencies alone. If the
member does so, the provisions of the preceding paragraphs (including (d) above, if a territory where a separate currency exists has been
occupied by the enemy) shall apply to each of these currencies
separately.
(h) The Fund shall begin exchange transactions at such date as it
may determine after members having sixty-five percent of the total
of the quotas set forth in Schedule A have become eligible, in accordance with the preceding paragraphs of this Section, to purchase the
currencies of other members, but in no event until after major hostilities in Europe have ceased.
(i) The Fund may postpone exchange transactions with any
member if its circumstances are such that, in the opinion of the Fund,
they would lead to use of the resources of the Fund in a manner contrary to the purposes of this Agreement or prejudicial to the Fund
or the members.
(j) The par values of the currencies of governments which indicate
their desire to become members after December 31, 1945, shall be
determined in accordance with the provisions of Article II, Section 2.
DONE at Washington, in a single copy which shall remain deposited
in the archives of the Government of the United States of America,
which shall transmit certified copies to all governments whose names
are set forth in Schedule A and to all governments whose membership
is approved in accordance with Article II, Section 2.
SCHEDULE A
Quotas
(In millions'of UnitedI
States dollars)
Australia
Belgium
Bolivia
Brazil
Canada
Chile
China
Colombia
Costa Rica
Cuba
Czechoslovakia
Denmark*
Dominican Republic
Ecuador
Egypt
El Salvador
Ethiopia
France
Greece
Guatemala
Haiti
Honduras
Iceland
200
225
10
150
300
50
550
50
5
50
125
*
5
5
45
2.5
6
450
40
5
5
2.5
1
(In millions of United
States dollars)
India
400
Iran
25
Iraq
8
Liberia
.5
Luxembourg
10
Mexico
90
Netherlands
275
New Zealand
50
Nicaragua
2
Norway
50
Panama
.5
Paraguay
2
Peru
25
Philippine Commonwealth
15
Poland
125
Union of South Africa
100
Union of Soviet Socialist
Republics
1200
United Kingdom
1300
United States
2750
Uruguay
15
Venezuela
15
Yugoslavia
60
•The quota of Denmark shall be determined by the Fund after the Danish Government has declared
its readiness to sign this Agreement but before signature takes place.
SCHEDULE B
Provisions With Respect to Repurchase by a Member of Its
Currency Held by the Fund
1. In determining the extent to which repurchase of a member's
currency from the Fund under Article V, Section 7 (b) shall be made
with each type of monetary reserve, that is, with gold and with each
convertible currency, the following rule, subject to 2 below, shall
apply:
(a) If the member's monetary reserves have not increased during
the year, the amount payable to the Fund shall be distributed
among all types of reserves in proportion to the member's
holdings thereof at the end of the year.
60
FINAL ACT, ANNEX A
61
(b) If the member's monetaiy reserves have increased during the
year, a part of the amount payable to the Fund equal to
one-half of the increase shall be distributed among those types
of reserves which have increased in proportion to the amount
by which each of them has increased. The remainder of tfie
sum payable to the Fund shall be distributed among all
types of reserves in proportion to the member's remaining
holdings thereof.
(c) If after all the repurchases required under Article V, Section
7 (b), had been made, the result would exceed, any of the
limits specified in. Article V, Section 7 (c), the Fund shall
require such repurchases to be made by the members proportionately in such manner that the limits will not be
exceeded.
2. The Fund shall not acquire the currency of any non-member
under Article V, Section 7 (b) and (c).
3. In calculating monetary reserves and the increase in monetary
reserves during any year for the purpose of Article V, Section 7 (b)
and (c), no account shall be taken, unless deductions have otherwise
been made by the member for such holdings, of any increase in those
monetary reserves which is due to currency previously inconvertible
having become convertible during the year; or to holdings which are
the proceeds of a long-term or medium-term loan contracted during
the year; or to holdings which have been transferred or set aside for
repayment of a loan during the subsequent year.
4. In the case of members whose metropolitan territories have been
occupied by the enemy, gold newly produced during the five years
after the entry into force of this Agreement from mines located within
their metropolitan territories shall not be included in computations
of their monetary reserves or of increases in their monetary reserves.
SCHEDULE C
Election of Executive Directors
1. The election of the elective executive directors shall be by ballot
of the governors eligible to vote under Article XII, Section 3 (b) (iii)
and (iv).
2. In balloting for the five directors to be elected under Article XII,
Section 3 (b) (iii), each of the governors eligible to vote shall cast for
one person all of the votes to which he is entitled under Article XII,
Section 5 (a). The five persons receiving the greatest number of votes
shall be directors, provided that no person who received less than
nineteen percent of the total number of votes that can be cast (eligible
votes) shall be considered elected.
Q03092—44
0
62
MONETARY AND FINANCIAL CONFERENCE
3. When five persons are not elected in the first ballot, a second
ballot shall be held in which the person who received the lowest number
of votes shall be ineligible for election and in which there shall vote
only (a) those governors who voted in the first ballot for a person not
elected, and (b) those governors whose votes for a person elected are
deemed under 4 below to have raised the votes cast for that person
above twenty percent of the eligible votes.
4. In determining whether the votes cast by a governor are to be
deemed to have raised the total of any person above twenty percent
of the eligible votes the twenty percent shall be deemed to include,
first, the votes of the governor casting the largest number of votes for
such person, then the votes of the governor casting the next largest
number, and so on until twenty percent is reached.
5. Any governor part of whose votes must be counted in order to
raise the total of any person above nineteen percent shall be considered
as casting all of his votes for such person even if the total votes for
such person thereby exceed twenty percent.
6. If, after the second ballot, five persons have not been elected,
further ballots shall be held on the same principles until five persons
have been elected, provided that after four persons are elected, the fifth
may be elected by a simple majority of the remaining votes and shall be
deemed to have been elected by all such votes.
7. The directors to be elected by the American Republics under
Article XII, Section 3 (b) (iv) shall be elected as follows:
(a) Each of the directors shall be elected separately.
(b) In the election of the first director, each governor representing
an American Republic eligible to participate in the election
shall cast for one person all the votes to which he is entitled.
The person receiving the largest number of votes shall be
elected provided that he has received not less than forty-five
percent of the total votes.
(c) If no person is elected on the first ballot, further ballots shall
be held, in each of which the person receiving the lowest
number of votes shall be eliminated, until one person receives
a number of votes sufficient for election under (b) above.
(d) Governors whose votes contributed to the election of the
first director shall take no part in the election of the second
director.
(e) Persons who did not succeed in the first election shall not be
ineligible for election as the second director.
(f) A majority of the votes which can be cast shall be required
for election of the second director. If at the first ballot no
• person receives a majority, further ballots shall be held in
each of which the person receiving the lowest number of
votes shall be eliminated, until some person obtains a majority.
FINAL ACT, ANNEX A
63
(g) The second director shall be deemed to have been elected by
all the votes which could have been cast in the ballot securing
his election.
SCHEDULE D
Settlement of Accounts With Members Withdrawing
1. The Fund shall be obligated to pay to a member withdrawing
an amount equal to its quota, plus any other amounts due to it from
the Fund, less any amounts due to the Fund, including charges
accruing after the date of its withdrawal; but no payment shall be
made until six months after the date of withdrawal. Payments shall
be made in the currency of the withdrawing member.
2. If the Fund's holdings of the currency of the withdrawing member are not sufficient to pay the net amount due from the Fund, the
balance shall be paid in gold, or in such other manner as may be
agreed. If the Fund and the withdrawing member do not reach
agreement within six months of the date of withdrawal, the currency
in question held by the Fund shall be paid forthwith to the withdrawing member. Any balance due shall be paid in ten half-yearly
installments during the ensuing five years. Each such installment
shall be paid, at the option of the Fund, either in the currency of the
withdrawing member acquired after its withdrawal or by the delivery
of gold.
3. If the Fund fails to meet any installment which is due in accordance with the preceding paragraphs, the withdrawing member shall
be entitled to require the Fund to pay the installment in any currency
held by the Fund with the exception of any currency which has been
declared scarce under Article VII, Section 3.
4. If the Fund's holdings of the currency of a withdrawing member
exceed the amount due to it, and if agreement on the method of
settling accounts is not reached within six months of the date of
withdrawal, the former member shall be obligated to redeem such
excess currency in gold or, at its option, in the currencies of members
which at the time of redemption are convertible. Redemption shall
be made at the parity existing at the time of withdrawal from the
Fund. The withdrawing member shall complete redemption within
five years of the date of withdrawal, or within such longer period as
may be fixed by the Fund, but shall not be required to redeem in any
half-yearly period more than one-tenth of the Fund's excess holdings
of its currency at the date of withdrawal plus further acquisitions
of the currency during such half-yearly period. If the withdrawing
member does not fulfill this obligation, the Fund may in an orderly
manner liquidate in any market the amount of currency which should
have been redeemed.
64
MONETARY AND FINANCIAL CONFERENCE
5. Any member desiring to obtain the currency of a member which
has withdrawn shall acquire it by purchase from the Fund, to the
extent that such member has access to the resources*of the Fund
and that such currency is available under 4 above.
6. The withdrawing member guarantees the unrestricted use at
all times of the currency disposed of under 4 and 5 above for the
purchase of goods or for payment of sums due to it or to persons
within its territories. It shall compensate the Fund for any loss
resulting from the difference between the par value of its currency on
the date of withdrawal and the value realized by the Fund on disposal
under 4 and 5 above.
7. In the event of the Fund going into liquidation under Article
XVI, Section 2, within six months of the date on which the member
withdraws, the account between the Fund and that government shall
be settled in accordance with Article XVI, Section 2, and Schedule E.
SCHEDULE E
Administration of Liquidation
1. In the event of liquidation the liabilities of the Fund other than
the repayment of subscriptions shall have priority in the distribution
of the assets of the Fund. In meeting each such liability the Fund
shall use its assets in the following order:
(a) the currency in which the liability is payable;
. (b) gold;,
(c) all other currencies in proportion, so far as may be practicable,
to the quotas of the members.
2. After the discharge of the Fund's liabilities in accordance with 1
above, the balance of the Fund's assets shall be distributed and
apportioned as follows:
'" (a) The Fund shall distribute its holdings of gold among the
members whose currencies are held by the Fund in amounts
less than their quotas. These members shall share the gold
so distributed in the proportions of the amounts by which
their quotas exceed the Fund's holdings of their currencies.
(b) The Fund shall distribute to each member one-half the
Fund's holdings of its currency but such distribution shall
not exceed fifty percent of its quota.
(c) The Fund shall apportion the remainder of its holdings of
each currency among all the members in proportion to the
amounts due to each member after the distributions under
(a) and (b) above.
3. Each member shall redeem the holdings of its currency apportioned to other members under 2 (c) above, and shall agree with the
FINAL ACT. ANNEX A
65
Fund within three months after a decision to liquidate upon an
orderly procedure for such redemption.
4. If a member has not reached agreement with the Fund within
the three-month period referred to in 3 above, the Fund shall use the
currencies of other members apportioned to that member under 2 (c)
above to redeem the currency of that member apportioned to other
members. Each currency apportioned to a member which has not
reached agreement shall be used, so far as possible, to redeem its
currency apportioned to the members which have made agreements
with the Fund under 3 above.
5. If a member has reached agreement with the Fund in accordance
with 3 above, the Fund shall use the currencies of other members
apportioned to that member under 2 (c) above to redeem the currency
of that member apportioned to other members which have made
agreements with the Fund under 3 above. Each amount so redeemed
shall be redeemed in the currency of the member to which it was
apportioned.
6. After carrying out the preceding paragraphs, the Fund shall pay
to each member the remaining currencies held for its account.
7. Each member whose currency has been distributed to other
members under 6 above shall redeem such currency in gold or, at its
option, in the currency of the member requesting redemption, or in
such other manner as may be agreed between them. If the members
involved do not otherwise agree, the member obligated to redeem
shall complete redemption within five years of the date of distribution,
but shall not be required to redeem in any half-yearly period more than
one-tenth of the amount distributed to each other member. If the
member does not fulfill this obligation, the amount of currency which
should have been redeemed may be liquidated in an orderly manner
in any market.
8. Each member whose currency has been distributed to other
members under 6 above guarantees the unrestricted use of such
currency at all times for the purchase of goods or for payment of sums
due to it or to persons in its territories. Each member so obligated
agrees to compensate other members for any loss resulting from the
difference between the par value of its currency on the date of the
decision to liquidate the Fund and the value realized by such members
on disposal of its currency.
66
MONETARY AND FINANCIAL CONFERENCE
LIST OF ARTICLES AND SECTIONS ,
Introductory Article
I. Purposes
II. Membership
1. Original members
2. Other members
III. Quotas and Subscriptions
1. Quotas
2. Adjustment of quotas
3. Subscriptions: time, place and form of payment
4. Payments when quotas are changed
5. Substitution of securities for currency
IV. Par Values of Currencies
1. Expression of par values
2. Gold purchases based on par values
3. Foreign exchange dealings based on parity
4. Obligations regarding exchange stability
5. Changes in par values
6. Effect of unauthorized changes
7. Uniform changes in par values
8. Maintenance of gold value of the Fund's assets
9. Separate currencies within a member's territories
V. Transactions with the Fund
1. Agencies dealing with the Fund
2. Limitation on the Fund's operations
3. Conditions governing use of the Fund's resources
4. Waiver of conditions
5. Ineligibility to use the Fund's resources
6. Purchases of currencies from the Fund for gold
7. Repurchase by a member of its currency held by the Fund
8. Charges
VI. Capital Transfers
1. Use of the Fund's resources for capital transfers
2. Special provisions for capital transfers
3. Controls of capital transfers
VII. Scarce Currencies
1. General scarcity of currency
2. Measures to replenish the Fund's holdings of scarce currencies
3. Scarcity of the Fund's holdings
4. Administration of restrictions
5. Effect of other international agreements on restrictions
VIII. General Obligations of Members
1. Introduction
2. Avoidance of restrictions on current payments
3. Avoidance of discriminatory currency practices
4. Convertibility of foreign-held balances
5. Furnishing of information
6. Consultation between members regarding existing international
agreements
IX. Status, Immunities and Privileges
1. Purposes of Article
2. Status of the Fund
FINAL ACT, ANNEX A
67
3. Immunity from judicial process
4. Immunity from other action
5. Immunity of archives
6. Freedom of assets from restrictions
7. Privilege for communications
8. Immunities and privileges of officers and employees
9. Immunities from taxation
10. Application of Article
X. Relations with Other International Organizations
XI. Relations with Non-member Countries
1. Undertakings regarding relations with non-member countries
2. Restrictions on transactions with non-member countries
XII. Organization and Management
1. Structure of the Fund
2. Board of Governors
3. Executive Directors
4. Managing Director and staff
5. Voting
6. Distribution of net income
7. Publication of reports
8. Communication of views to members
XIII. Offices and Depositories
1. Location of offices
2. Depositories
3. Guarantee of the Fund's assets
XIV. Transitional Period
1. Introduction
% Exchange restrictions
3. Notification to the Fund
4. Action of the Fund relating to restrictions
5. Nature of transitional period
XV. Withdrawal from Membership
1. Right of members to withdraw
2. Compulsory withdrawal
3. Settlement of accounts with members withdrawing
XVI. Emergency Provisions
1. Temporary suspension
2. Liquidation of the Fund
XVII. Amendments
XVIIL Interpretation
XIX. Explanation of Terms
XX. Final Provisions
1. Entry into force
2. Signature
3. Inauguration of the Fund
4. Initial determination of par values
SCHEDULES
SCHEDULE A. Quotas
SCHEDULE B. Provisions with Respect to Repurchase by a Member of its Currency Held by the Fund
SCHEDULE C. Election of Executive Directors
SCHEDULE D. Settlement of Accounts with Members Withdrawing
SCHEDULE E. Administration of Liquidation
Annex B
ARTICLES OF AGREEMENT OF THE INTERNATIONAL
BANK FOR RECONSTRUCTION AND DEVELOPMENT
The Governments on whose behalf the present Agreement is signed
agree as follows:
INTRODUCTORY ARTICLE
The International Bank for Reconstruction and Development is
established and shall operate in accordance with the following provisions:
ARTICLE I
PURPOSES
The purposes of the Bank are:
(i) To assist in the reconstruction and development of territories of members by facilitating the investment of capital
for productive purposes, including the restoration of economies destroyed or disrupted by war, the reconversion of
productive facilities to peacetime needs and the encouragement of the development of productive facilities and
resources in less developed countries.
(ii) To promote private foreign investment by means of guarantees or participations in loans and other investments
made by private investors; and when private capital is not
available on reasonable terms, to supplement private investment by providing, on suitable conditions, finance for productive purposes out of its own capital, funds raised by it
and its other resources.
(iii) To promote the long-range balanced growth of international
trade and the maintenance of equilibrium in balances of
payments by encouraging international investment for the
development of the productive resources of members,
thereby assisting in raising productivity, the standard of
living and conditions of labor in their territories.
(iv) To arrange the loans made or guaranteed by it in relation
to international loans through other channels so that the
68
FINAL ACT, ANNEX B
69
more useful and urgent projects, large and small alike, will
be dealt with first.
(v) To conduct its operations with due regard to the effect of
international investment on business conditions in the territories of members and, in the immediate post-war years, to
assist in bringing about a smooth transition from a wartime
to a peacetime economy.
The Bank shall be guided in all its decisions by the purposes set
forth above.
ARTICLE II
MEMBERSHIP IN AND CAPITAL OF THE BANK
Section 1. Membership
(a) The original members of the Bank shall be those members of
the International Monetary Fund which accept membership in the
Bank before the date specified in Article XI, Section 2 (e).
(b) Membership shall be open to other members of the Fund,
at such times and in accordance with such terms as may be prescribed
by the Bank.
Section 2. Authorized capital
(a) The authorized capital stock of the Bank shall be $10,000,000000, in terms of United States dollars of the weight and fineness in
effect on July 1, 1944. The capital stock shall be divided into 100,000
shares having a par value of $100,000 each, which shall be available
for subscription only by members.
(b) The capital stock may be increased when the Bank deems it
advisable by a three-fourths majority of the total voting power.
Section 3. Subscription of shares
(a) Each member shall subscribe shares of the capital stock of
the Bank. The minimum number of shares to be subscribed by the
original members shall be those set forth in Schedule A. The minimum number of shares to be subscribed by other members shall be
determined by the Bank, which shall reserve a sufficient portion of
its capital stock for subscription by such members.
(b) The Bank shall prescribe rules laying down the conditions
under which members may subscribe shares of the authorized capital
stock of the Bank in addition to their minimum subscriptions.
(c) If the authorized capital stock of the Bank is increased, each
member shall have a reasonable opportunity to subscribe, under
such conditions as the Bank shall decide, a proportion of the increase
of stock equivalent to the proportion which its stock theretofore
subscribed bears to the total capital stock of the Bank, but no member
shall be obligated to subscribe any part of the increased capital.
70
MONETARY AND FINANCIAL CONFERENCE
Section 4. Issue price of shares
Shares included in the minimum subscriptions of original members
shall be issued at par. Other shares shall be issued at par unless the
Bank by a majority of the total voting power decides in special
circumstances to issue them on other terms.
Section 5. Division and calls of subscribed capital
The subscription of each member shall be divided into two parts
as follows:
(i) twenty percent shall be paid or subject to call under Section
7 (i) of this Article as needed by the Bank for its operations;
(ii) the remaining eighty percent shall be subject to call by the
Bank only when required to meet obligations of the Bank
created under Article IV, Sections 1 (a) (ii) and (iii).
Calls on unpaid subscriptions shall be uniform on all shares.
Section 6. Limitation on liability
Liability on shares shall be limited to the unpaid portion of the
issue price of the shares.
Section 7. Method of payment of subscriptions for shares
Payment of subscriptions for shares shall be made in gold or United
States dollars and in the currencies of the members as follows:
(i) under Section 5 (i) of this Article, two percent of the price
of each share shall be payable in gold or United States
dollars, and, when calls are made, the remaining eighteen
percent shall be paid in the currency of the member;
(ii) when a call is made under Section 5 (ii) of this Article, payment may be made at the option of the member either in
gold, in United States dollars or in the currency required to
discharge the obligations of the Bank for the purpose for
which the call is made;
(iii) when a member makes payments in any currency under (i)
and (ii) above, such payments shall be made-in amounts
equal in value to the member's liability under the call.
This liability shall be a proportionate part of the subscribed
capital stock of the Bank as authorized and defined in Section 2 of this Article.
Section 8. Time of payment of subscriptions
(a) The two percent payable on each share in gold or United States
dollars under Section 7 (i) of this Article, shall be paid within sixty
days of the date on which the Bank begins operations, provided that
(i) any original member of the Bank whose metropolitan terri
FINAL ACT, ANNEX B
71
tory has suffered from enemy occupation or hostilities during
the present war shall be granted the right to postpone payment of one-half percent until five years after that date;
(ii) an original member who cannot make such a payment because
it has not recovered possession of its gold reserves which are
still seized or immobilized as a result of the war may postpone all payment until such date as the Bank shall decide.
(b) The remainder of the price of each share payable under Section
7 (i) of this Article shall be paid as and when called by the Bank, provided that
(i) the Bank shall, within one year of its beginning operations,
call not less than eight percent of the price of the share in
addition to the payment of two percent referred to in (a)
above;
(ii) not more than five percent of the price of the share shall be
called in any period of three months.
Section 9. Maintenance of value of certain currency holdings of the Bank
(a) Whenever (i) the par value of a member's currency is reduced,
or (ii) the foreign exchange value of a member's currency has, in the
opinion of the Bank, depreciated to a significant extent within that
member's territories, the member shall pay to the Bank within a
reasonable time an additional amount of its own currency sufficient
to maintain the value, as of the time of initial subscription, of the
amount of the currency of such member which is held by the Bank and
derived from currency originally paid in to the Bank by the member
under Article II, Section 7 (i), from currency referred to in Article
IV, Section 2 (b), or from any additional currency furnished under the
provisions of the present paragraph, and which has not been repurchased by the member for gold or for the currency of any member
which is acceptable to the Bank.
(b) Whenever the par value of a member's currency is increased,
the Bank shall return to such member within a reasonable time an
amount of that member's currency equal to the increase in the value
of the amount of such currency described in (a) above.
(c) The provisions of the preceding paragraphs may be waived by
the Bank when a uniform proportionate change in the par values of
the currencies of all its members is made by the International Monetary Fund.
Section 10. Restriction on disposal of shares
Shares shall not be pledged or encumbered in any manner whatever
and they shall be transferable only to the Bank.
72
MONETARY AND FINANCIAL CONFERENCE
ARTICLE I I I
GENERAL PROVISIONS RELATING TO LOANS AND GUARANTEES
Section 1. Use ojresources
*
(a) The resources and the facilities of the Bank shall be used
exclusively for the benefit of members with equitable consideration to
projects for development and projects for reconstruction alike.
(b) For the purpose of facilitating the restoration and reconstruction of the economy of members whose metropolitan territories have
suffered great devastation from enemy occupation or hostilities, the
Bank, in determining the conditions and terms of loans made to such
members, shall pay special regard to lightening the financial burden
and expediting the completion of such restoration and reconstruction.
Section 2. Dealings between members and the Bank
Each member shall deal with the Bank only through its Treasury,
central bank, stabilization fund or other similar fiscal agency, and the
Bank shall deal with members only by or through the same agencies.
Section 3. Limitations on guarantees and borrowings oj the Bank
The total amount outstanding of guarantees, participations in loans
and direct loans made by the Bank shall not be increased at any
time, if by such increase the total would exceed one hundred percent
of the unimpaired subscribed capital, reserves and surplus of the
Bank.
Section 4. Conditions on which the Bank may guarantee or make loans
The Bank may guarantee, participate in, or make loans to any
member or any political sub-division thereof and any business, industrial, and agricultural enterprise in the territories of a member, subject to the following conditions:
(i) When the member in whose territories the project is
located is not itself the borrower, the member or the central bank or some comparable agency of the member which
is acceptable to the Bank, fully guarantees the repayment
of the principal and the payment of interest and other
charges on the loan.
(ii) The Bank is satisfied that in the prevailing market conditions the borrower would be unable othenvise to obtain
the loan under conditions which in the opinion of the Bank
are reasonable for the borrower.
(iii) A competent committee, as provided for in Article V,
Section 7, has submitted a written report recommending
the project after a careful study of the merits of the proposal.
FINAL ACT, ANNEX B
73
(iv) In the opinion of the Bank the rate of interest and other
charges are reasonable and such rate, charges and the
schedule for repayment of principal are appropriate to the
project.
(v) In making or guaranteeing a loan, the Bank shall pay due
regard to the prospects that the borrower, and, if the borrower is not a member, that the guarantor, will be in position to raeet its obligations under the loan; and the Bank
shall act prudently in the interests both of the particular
member in whose territories the project is located and of
the members as a whole,
(vi) In guaranteeing a loan made by other investors, the Bank
receives suitable compensation for its risk.
(vii) Loans maie or guaranteed by the Bank shall, except in special circumstances, be for the purpose of specific projects of
reconstruction or development.
Section 5. Use of loans guaranteed, participated in or made by the Bank
(a) The Bank shall impose no conditions that the proceeds of a
loan shall be spent in the territories of any particular member or
members.
(b) The Bank shall make arrangements to ensure that the proceeds
of any loan are used only for the purposes for which the loan was
granted, with due attention to considerations of economy and efficiency and without regard to political or other non-economic influences or considerations.
. (c) In the case of loans made by the Bank, it shall open an account
in the name of the borrower and the amount of the loan shall be
credited to this account in the currency or currencies in which the
loan is made. The borrower shall be permitted by the Bank to draw
on this account only to meet expenses in connection with the project
as they are actually incurred.
ARTICLE IV
OPERATIONS
Section 1. Methods of making or facilitating loans
(a) The Bank may make or facilitate loans which satisfy the general
conditions of Article III in any of the following ways:
(i) By making or participating in direct loans out of its own
funds corresponding to its unimpaired paid-up capital and
surplus and, subject to Section 6 of this Article, to its
reserves.
(ii) By making or participating in direct loans out of funds raised
74
MONETARY AND FINANCIAL CONFERENCE
in the market of a member, or otherwise borrowed by the
Bank.
(iii) By guaranteeing in whole or in part loans made by private
investors through the usual investment channels.
(b) The Bank may borrow funds under (a) (ii) above or guarantee
loans under (a) (iii) above only with the approval of the member in
whose markets the funds are raised and the member in whose currency the loan is denominated, and only if those members agree that
the proceeds may be exchanged for the currency of any other member
without restriction.
Section 2. Availability and transjerability of currencies
(a) Currencies paid into the Bank under Article II, Section 7 (i),
shall be loaned only with the approval in each case of the member
whose currency is involved; provided, however, that if necessary,
after the Bank's subscribed capital has been entirely called, such
currencies shall, without restriction by the members whose currencies
are offered, be used or exchanged for the currencies required to meet
contractual payments of interest, other charges or amortization on
the Bank's own borrowings, or to meet the Bank's liabilities with
respect to such contractual payments on loans guaranteed by the
Bank.
(b) .Currencies received by the Bank from borrowers or guarantors
in payment on account of principal of direct loans made with currencies referred to in (a) above shall be exchanged for the currencies
of other'members or reloaned only with the approval in each case of
the members whose currencies are involved; provided, however, that
if necessary, after the Bank's subscribed capital has been entirely
called, such currencies shall, without restriction by the members
whose currencies are offered, be used or exchanged for the currencies
required to meet contractual payments of interest, other charges or
amortization on the Bank's own borrowings, or to meet the Bank's
liabilities with respect to such contractual payments on loans guaranteed by the Bank.
(c) Currencies received by the Bank from borrowers or guarantors
in payment on account of principal of direct loans made by the Bank
under Section 1 (a) (ii) of this Article, shall be held and used, without
restriction by the members, to make amortization payments, or to
anticipate payment of or repurchase part or all of the Bank's own
obligations.
(d) All other currencies, available to the Bank, including those
raised in the market or otherwise borrowed under Section 1 (a) (ii) of
this Article, those obtained by the sale of gold, those received as
payments of interest and other charges for direct loans made under
FINAL ACT, ANNEX B
75
Sections 1 (a) (i) and (ii), and those received as payments of commissions and other charges under Section 1 (a) (ill), shall be used or
exchanged for other currencies or gold required in the operations
of the Bank without restriction by the members whose currencies
are offered.
(e) Currencies raised in the markets of members by borrowers on
loans guaranteed by the Bank under Section 1 (a) (iii) of this Article,
shall also be used or exchanged for other currencies without restriction
by such members.
Section 3. Provision of currencies for direct loans
The following provisions shall apply to direct loans under Sections
1 (a) (i) and (ii) of this Article:
(a) The Bank shall furnish the borrower with such currencies of
members, other than the member in whose territories the project is
located, as are needed by the borrower for expenditures to be made in
the territories of such other members to carry out the purposes of
the loan.
(b) The Bank may, in exceptional circumstances when local currency required for the purposes of the loan cannot be raised by the
borrower on reasonable terms, provide the borrower as part of the
loan with an appropriiate amount of that currency.
(c) The Bank, if the project gives rise indirectly to an increased
need for foreign exchange by the member in whose territories the
project is located, may in exceptional circumstances provide the
borrower as part of the loan with an appropriate amount of gold or
foreign exchange not in excess of the borrower's local expenditure in
connection with the purposes of the loan.
(d) The Bank may, in exceptional circumstances, at the request
of a member in whose territories a portion of the loan is spent, repurchase with gold or foreign exchange a part of that member's currency
thus spent but in no case shall the part so repurchased exceed the
amount by which the expenditure of the loan in those territories gives
rise to an increased need for foreign exchange.
Section 4. Payment provisions for direct loans
Loan contracts under Section 1 (a) (i) or (ii) of this Article shall be
made in accordance with the following payment provisions:
(a) The terms and conditions of interest and amortization payments, maturity and dates of payment of each loan shall be determined by the Bank. The Bank shall also determine the rate and
any other terms and conditions of commission to be charged in connection with such loan.
In the case of loans made under Section 1 (a) (ii) of this Article
during the first ten years of the Bank's operations, this rate of com
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MONETARY AND FINANCIAL CONFERENCE
mission shall be not less than one percent per annum and not greater
than one and one-half percent per annum, and shall be charged on
the outstanding portion of any such loan. At the end of this period
of ten years, the rate of commission may be reduced by the Bank with
respect both to the outstanding portions of loans already made and
to future loans, if the reserves accumulated by the Bank under Section
6 of this Article and out of other earnings are considered by it sufficient to justify a reduction. In the case of future loans the Bank
shall also have discretion to increase the rate of commission beyond
the above limit, if experience indicates that an increase is advisable.
(b) All loan contracts shall stipulate the currency or currencies in
which payments under the contract shall be made to the Bank. At
the option of the borrower, however, such payments may be made in
gold, or subject to the agreement of the Bank, in the currency of a
member other than that prescribed in the contract.
(i) In the case of loans made under Sectioci 1 (a) (i) of this Article,
the loan contracts shall provide that payments to the Bank of
interest, other charges and amortization shall be made in the
currency loaned, unless the member whose currency is loaned
agrees that such payments shall be made in some other specified
currency or currencies. These payments, subject to the provisions of Article II, Section 9 (c), shall be equivalent to the
value of such contractual payments at the time the loans were
made, in terms of a currency specified for the purpose by the
Bank by a three-fourths majority of the total voting power,
(ii) In the case of loans made under Section 1 (a) (ii) of this Article,
the total amount outstanding and payable to the Bank in any
one currency shall at no time exceed the total amount of the
outstanding borrowings made by the Bank imder Section
1 fa) (ii) and payable in the same currency.
(c) If a member suffers from an acute exchange stringency, so that
the service of any loan contracted by that member or guaranteed by it
or by one of its agencies cannot be provided in the stipulated manner,
the member concerned may apply to the Bank for a relaxation of the
conditions of payment. If the Bank is satisfied that some relaxation
is in the interests of the particular member and of the operations of
the Bank and of its members as a whole, it may take action under
either, or both, of the following paragraphs with respect to the whole,
or part, of the annual service:
(i) The Bank may, in its discretion, make arrangements with the
member concerned to accept service payments on the loan in
the member's currency for periods not to exceed three years
upon appropriate terms regarding the use of such currency and
FINAL ACT, ANNEX B
77
the maintenance of its foreign exchange value; and for the
repurchase of such currency on appropriate terms,
(ii) The Bank may modify the terms of amortization or extend the
life of the loan, or both.
Section 5. Guarantees
(a) In guaranteeing a loan placed through the usual investment
channels, the Bank shall charge a guarantee commission payable
periodically on the amount of the loan outstanding at a rate determined by the Bank. During the first ten years of the Bank's operations, this rate shall be not less than one percent per annum and not
greater than one and one-half percent per annum. At the end of
this period of ten years, the r#te of commission may be reduced by
the Bank with respect both to the outstanding portions of loans
already guaranteed and to future loans if the reserves accumulated
by the Bank under Section 6 of this Article and out of other earnings
are considered by it sufficient to justify a reduction. In the case of
future loans the Bank shall also have discretion to increase the rate
of commission beyond the above limit, if experience indicates that an
increase is advisable.
(b) Guarantee commissions shall be paid directly to the Bank by
the borrower.
(c) Guarantees by the Bank shall provide that the Bank may
terminate its liability with respect to interest if, upon default by the
borrower and by the guarantor, if any, the Bank offers to purchase, at
par and interest accrued to a date designated in the offer, the bonds or
other obligations guaranteed.
(d) The Bank shall have power to determine any other terms and
conditions of the guarantee.
Section 6. Special reserve
The amount of commissions received by the Bank under Sections 4
and 5 of this Article shall be set aside as a special reserve, which shall be
kept available for meeting liabilities of the Bank in accordance with
Section 7 of this Article. The special reserve shall be held in such
liquid form, permitted under this Agreement, as the Executive
Directors may decide.
Section 7. Methods of meeting liabilities qfthe Bank in case of defaults
In cases of default on loans made, participated in,.or guaranteed by
the Bank:
(a)' The Bank shall make such arrangements as may be feasible to
adjust the obligations under the loans, including arrangements under
or analogous to those provided in Section 4 (c) of this Article.
603902—44
$
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MONETARY AND FINANCIAL CONFERENCE
(b) The payments in discharge of the Bank's liabilities on borrowings or guarantees under Sections 1 (a) (ii) and (iii) of this Article shall
be charged:
(i) first, against the special reserve provided in Section 6 of this
Article.
(ii) then, to the extent necessary and at the discretion of the
Bank, against the other reserves, surplus and capital available
to the Bank.
(c) Whenever necessary to meet contractual payments of interest,
other charges or amortization on the Bank's own borrowings, or to
meet the Bank's liabilities with respect to similar payments on loans
guaranteed by it, the Bank may call an appropriate amount of the
unpaid subscriptions of members in accordance with Article II, Sections
5 and 7. Moreover, if it believes that a default may be of long duration, the Bank may call an additional amount of such unpaid subscriptions not to exceed in any one year one percent of the total
subscriptions of the members for the following purposes:
(i) To redeem prior to maturity, or otherwise discharge its
liability on, all or part of the outstanding principal of any
loan guaranteed by it in respect of which the debtor is in
default.
(ii) To repurchase, or otherwise discharge its liability on, all or
part of its own outstanding borrowings.
Section 8. Miscellaneous operations
In addition to the operations specified elsewhere in this Agreement,
the Bank shall have the power:
(i) To buy and sell securities it has issued and to buy and sell
securities which it has guaranteed or ia which it has invested,
provided that the Bank shall obtain the approval of the
member in whose territories the securities are to be bought
or sold.
(ii) To guarantee securities in which it has invested for the purpose of facilitating their sale.
(iii) To borrow the currency of any member with the approval
of that member.
(iv) To buy and sell such other securities as the Directors by a
three-fourths majority of the total voting power may deem
proper for the investment of all or part of the special reserve
under Section 6 of this Article.
In exercising the powers conferred by this Section, the Bank may deal
with any person, partnership, association, corporation or other legal
entity in the territories of any member*
FINAL ACT, ANNEX B
79
Section 9. Warning to be placed on securities
Every security guaranteed or issued by the Bank shall bear on its
face a conspicuous statement to the effect that it is not an obligation
of any government unless expressly stated on the security.
Section 10. Political activity prohibited
The Bank and its officers shall not interfere in the political affairs
of any member; nor shall they be influenced in their decisions by the
political character of the member or members concerned. Only
economic considerations shall be relevant to their decisions, and these
considerations shall be weighed impartially in order to achieve the
purposes stated in Article I.
ARTICLE V
ORGANIZATION AND MANAGEMENT
Section 1. Structure of the Bank
The Bank shall have a Board of Governors, Executive Directors, a
President and such other officers and staff to perform such duties as
the Bank may determine.
Section 2. Board of Governors
(a) All the powers of the Bank shall be vested in the Board of
Governors consisting of one governor and one alternate appointed
by each member in such manner as it may determine. Each governor
and each alternate shall serve for five years, subject to the pleasure
of the member appointing him, and may be reappointed. No alternate may vote except in the absence of his principal. The Board
shall select one of the governors as Chairman.
(b) The Board of Governors may delegate to the Executive Directors authority to exercise any powers of the Board, except the
power to:
.(i) Admit new members and determine the conditions of their
admission;
(ii) Increase or decrease the capital stock;
(iii) Suspend a member;
(iv) Decide appeals from interpretations of this Agreement given
by the Executive Directors;
(v) Make arrangements to cooperate with other international
organizations (other than informal arrangements of a temporary and administrative character);
(vi) Decide to suspend permanently the operations of the Bank
and to distribute its assets;
(vii) Determine the distribution of the net income of the Bank.
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MONETARY AND FINANCIAL CONFERENCE
(c) The Board of Governors shall h6ld an annual meeting and such
other meetings as may be provided for by the Board or called by the
Executive Directors. Meetings of the Board shall be called by the
Directors whenever requested by five members or by members having
one-quarter of the total voting power.
(d) A quorum for any meeting of the Board of Governors shall be a
majority of the Governors, exercising not less than two-thirds of the
total voting power.
(e) The Board of Governors may by regulation establish a procedure
whereby the Executive Directors, when they deem such action to be
in the best interests of the Bank, may obtain a vote of the Governors
on a specific question without calling a meeting of the Board.
(f) The Board of Governors, and the Executive Directors to the
extent authorized, may adopt such rules and regulations as may be
necessary or appropriate to conduct the business of the Bank.
(g) Governors and alternates shall serve as such without compensation from the Bank, but the Bank shall pay them reasonable expenses
incurred in attending meetings.
(h) The Board of Governors shall determine the remuneration to
be paid to the Executive Directors and the salary and terms of the
contract of service of the President.
Section 3., Voting
(a) Each member shall have two hundred fifty votes plus one
additional vote for each share of stock held.
(b) Except as otherwise specifically provided, all matters before
the Bank shall be decided by a majority of the votes cast.
Section 4. Executive Directors
(a) The Executive Directors shall be responsible for the conduct of
the general operations of the Bank, and for this purpose, shall exercise
all the powers delegated to them by the Board of Governors.
(b) There shall be twelve Executive Directors, who need not be
governors, and of whom:
(i) five shall be appointed, one by each of the five members
having the largest number of shares;
(ii) seven shall be elected according to Schedule B by all the
Governors other than those appointed by the five members
referred to in (i) above.
For the purpose of this paragraph, "members" means governments of
countries whose names are set forth in Schedule A, whether they are
original members or become members in accordance with Article II,
Section 1 (b). When governments of other countries become members, the Board of Governors may, by a four-fifths majority of the total
FINAL ACT, ANNEX B
81
voting power, increase the total number of directors by increasing the
number of directors to be elected.,
Executive directors shall be appointed or elected every two years.
(c) Each executive director shall; appoint an alternate with full
power to act for hiinwhen he is not present. When the executive
directors appointing thenvare present,* alternates may participate in
meetings but shall not vote.
(d) Directors shall continue in office ,until their successors are appointed or elected., If the office of an elected director becomes vacant
more than ninety days before the end of his term, another director
shall be elected for the remainder of the term by ,the governors who
elected the former director. A majority pf the votes cast shall be
required for election. While the office remains vacant, the alternate
of the former director shall exercise his powers, except that of appointing an alternate.
(e) The Executive Directors shall function in continuous session at
the principal office of the Bank and shall meet as often as the business
of the Bank may require.
(f) A quorum for any meeting of the Executive Directors shall be a
majority of the Directors, exercising not less than one-half of the total
voting power.
(g)- Each appointed director shall be entitled to cast the number of
votes allotted under Section 3 of this Article to the member appointing,
him. Each elected director shall be entitled to cast,the number of
votes which counted toward his election. All the votes which a
director is entitled to cast shall be cast as a unit.
(h) The Board of Governors shall adopt regulations under which a
member not entitled to appoint a director under (b) a>bove may send
a representative to attend any meeting of the Executive Directors
when a request made by, or a matter particularly affecting, that
member is under consideration.
(i) The Executive Directors may appoint such committees as they,
deem advisable. Membership of such committees need not be limited
to governors or directors or their alternates.
Section 5. President and staff
(a) The Executive Directors shall select, a President who shall not
be a governor or an executive director or an alternate for either. The
President shall be Chairman of the Executive Directors, but shall have
no vote except a deciding vote in case of an equal division. He may
participate in meetings of the Board of Governors, but shall not vote
at such meetings. The President shall cease to hold office when the
Executive Directors so decide. .
(b) The President shall be'chief of the operating staff,of the Bank
and shall conduct, under the direction of the Executive Directors, the
82
MONETARY AND FINANCIAL CONFERENCE
ordinary business of the Bank. Subject to the general control of the
Executive Directors, he shall be responsible for the organization,
appointment and dismissal of the officers and staff.
(c) The President, officers and staff of the Bank, in the discharge
of their offices, owe their duty entirely to the Bank and to no other
authority. Each member of the Bank shall respect the international
character of this duty and shall refrain from all attempts to influence
any of them in the discharge of their duties.
(d) In appointing the officers and staff the President shall, subject
to the paramount importance of securing the highest standards of
efficiency and of technical competence, pay due regard to the importance of recruiting personnel on as wide a geographical basis as
possible.
Section 6. Advisory Council
(a) There shall be an Advisory Council of not less than seven persons selected by the Board of Governors including representatives of
banking, commercial, industrial, labor, and agricultural interests, and
with as wide a national representation as possible. In those fields
where specialized international organizations exist, the members of
the Council representative of those fields shall be selected in agreement with such organizations. The Council shall advise the Bank
on matters of general policy. The Council shall meet annually and
on such other occasions as the Bank may request.
(b) Councillors shall serve for two years and may be reappointed.
They shall be paid their reasonable expenses incurred on behalf of
the Bank.
Section 7. Loan committees
The committees required to report on loans under Article III, Section 4, shall be appointed by the Bank. Each such committee shall
include an expert selected by the governor representing the member
in whose territories the project is located and one or more members
of the technical staff of the Bank.
Section 8. Relationship to other international organizations
(a) The Bank, within the terms of this Agreement, shall cooperate
with any general international organization and with public international organizations having specialized responsibilities in related
fields. Any arrangements for such cooperation which would involve
a modification of any provision of this Agreement may be effected
only after amendment to this Agreement under Article VIII.
(b) In making decisions on applications for loans or guarantees
relating to matters directly within the competence of any international organization of the types specified in the preceding para
FINAL ACT, ANNEX B
83
graph and participated in primarily by members of the Bank, the
Bank shall give consideration to the views and recommendations of
such organization.
Section 9. Location oi offices
(a) The principal office of the Bank shall be located in the territory
of the member holding the greatest number of shares.
(b) The Bank may establish agencies or branch offices in the territories of any member of the Bank.
Section 10. Regional offices and councils
(a) The Bank may establish regional offices and determine the location of, and the areas to be covered by, each regional office.
(b) Each regional office shall be advised by a regional council
representative of the entire area and selected in such manner as the
Bank may decide.
Section 11. Depositories
(a) Each member shall designate its central bank as a depository
for all the Bank's holdings of its currency or, if it has no central bank,
it shall designate such other institution as may be acceptable to the
Bank.
(b) The Bank may hold other assets, including gold, in depositories
designated by the five members having the largest number of shares
and in such other designated depositories as the Bank may select.
Initially, at least one-half of the gold holdings of the Bank shall be
held in the depository designated by the member in whose territory
the Bank has its principal office, acid at least forty percent shall be
held in the depositories designated by the remaining four members
referred to above, each of such depositories to hold, initially, not less
than the amount of gold paid on the shares of the member designating
it. However, all transfers of gold by the Bank shall be made with
due regard to the costs of transport and anticipated requirements of
the Bank. In an emergency the Executive Directors may transfer
all or any part of the Bank's gold holdings to any place where they can
be adequately protected.
Section 12. Form of holdings of currency
The Bank shall accept from any member, in place of any part of
the member's currency, paid in to the Bank under Article II, Section
7 (i), or to meet amortization payments on loans made with such currency, and not needed by the Bank in its operations, notes or similar
obligations issued by the Government of the member or the depository
designated by such member, which shall be non-negotiable, non-interest-bearing and payable at their par value on demand by credit to the
account of the Bank in the designated depository.
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MONETARY AND FINANCIAL CONFERENCE
Section 13. Publication of reports and provision of information
(a) The Bank shall publish an annual report containing an audited
statement of its accounts and shall circulate to members at intervals
of three months or less a summary statement of its financial position
and a profit and loss statement showing the results of its operations.
(b) The Bank may publish such other reports as it deems desirable
to carry out its purposes.
(c) Copies of all reports, statements and publications made under
this section shall be distributed to members.
Section 14. Allocation of net income
(a) The Board of Governors shall determine annually what part of
the Bank's net income, after making provision for reserves, shall be
allocated to surplus and what part, if any, shall be distributed.
(b) If any part is distributed, up to two percent non-cumulative
shall be paid, as a first charge against the distribution for any year,
to each member on the basis of the average amount of the loans outstanding during the year made under Article IV, Section 1 (a) (i),
out of currency corresponding to its subscription. If two percent is
paid as a first charge, any balance remaining to be distributed shall be
paid to all members in proportion to their shares. Payments to each
member shall be made in its own currency, or if that currency is not
available in other currency acceptable to the member. If such payments are made in currencies other than the member's own currency,
the transfer of the currency and its use by the receiving member after
payment shall be without restriction by the members.
ARTICLE VI
WITHDRAWAL AND SUSPENSION OF MEMBERSHIP: SUSPENSION
OF OPERATIONS
Section 1. Right of members to withdraw
Any member may withdraw from the Bank at any time by transmitting a notice in writing to the Bank at its principal office. Withdrawal shall become effective on the date such notice is received.
Section 2. Suspension of membership
If a member fails to fulfill any of its obligations to the Bank, the
Bank may suspend its membership by decision of a majority of the
Governors, exercising a majority of the total voting power. The
member so suspended shall automatically cease to be a member one
year from the date of its suspension unless a decision is taken by the
same majority to restore the member to good standing.
FINAL ACT,. ANNEX B
85
While under suspension, a member shall not be entitled to exercise
any rights under this Agreement, except the right of withdrawal, but
shall remain subject to all obligations.
Section 3. Cessation of membership in International Monetary Fund
Any member which ceases to be a member of the International
Monetary Fund shall automatically cease after three months to be a
member of the Bank unless the Bank by three-fourths of the total
voting power has agreed to allow it to remain a member.
Section 4. Settlement oj accounts with governments ceasing to be members
(a) When a government ceases to be a member, it shall remain
liable for its direct obligations to the Bank and for its contingent
liabilities to the Bank so long as any part of the loans or guarantees
contracted before it ceased to be a member are outstanding; but it
shall cease to incur liabilities with respect to loans and guarantees
entered into thereafter by the Bank and to share either in the income
or the expenses of the Bank.
(b) At the time a government ceases to be a member, the Bank
shall arrange for the repurchase of its shares as a part of the settlement of accounts with such government in accordance with the provisions of (c) and (d) below. For this purpose the repurchase price
of the shares shall be the value shown by the books of the Bank on the
day the government ceases to be a member.
(c) The payment for shares repurchased by the Bank under this
section shall be governed by the following conditions:
(i) Any amount due to the government for its shares shall be
withheld so long as the government, its central bank or any
of its agencies remains liable, as borrower or guarantor, to
the Bank and such amount may, at the option of the Bank,
be applied on any such liablity as it matures. No amount
shall be withheld on account of the liability of the government resulting from its subscription for shares under Article
II, Section 5 (ii). In any event, no amount due to a member for its shares shall be paid until six months after the date
upon which the government ceases to bo a member.
(ii) Payments for shares may be made from time to time, upon
* their surrender by the government, to the extent by which
the amount due as the repurchase price in (b) above exceeds
the aggregate of liabilities on loans and guarantees in (c) (i)
above until the former member has received the full repurchase price.
(iii) Paj^nents shall be made in the currency of the country
receiving payment or at the option of the Bank in gold.
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MONETARY AND FINANCIAL. CONFERENCK
(iv) If losses are sustained by the Bank on any guarantees,
participations in loans, or loans which were outstanding on
the date when the government ceased to be a member, and
the amount of such losses exceeds the amount of the reserve
provided against losses on the date when the government
ceased to be a member, such government shall be obligated
to repay upon demand the amount by which the repurchase
price of its shares would have been reduced, if the losses had
been taken into account when the repurchase price was determined. In addition, the former member government
shall remain liable on any call for unpaid subscriptions
under Article II, Section 5 (ii), to the extent that it would
have been required to respond if the impairment of capital
had occurred and the call had been made at the time the
repurchase price of its shares was determined.
(d) If the Bank suspends permanently its operations under Section
5 (b) of this Article, within six months of the date upon which any
government ceases to be a member, all rights of such government
shall be determined by the provisions of Section 5 of this Article.
Section 5. Suspension of operations and settlement oj obligations
(a) In an emergency the Executive Directors may suspend temporarily operations in respect of new loans and guarantees pending
an opportunity for further consideration and action by the Board of
Governors.
(b) The Bank may suspend permanently its operations in respect
of new loans and guarantees by vote of a majority of the Governors,
exercising a majority of the total voting power. After such suspension of operations the Bank shall forthwith cease all activities, except
those incident to the orderly realization, conservation, and preservation of its assets and settlement of its obligations.
(c) The liability of all members for uncalled subscriptions to the
capital stock of the Bank and in respect of the depreciation of their
own currencies shall continue until all claims of creditors, including
all contingent claims, shall have been discharged.
(d) All creditors holding direct claims shall be paid out of the
assets of the Bank, and then out of payments to the Bank on calls on
unpaid subscriptions. Before making any payments to creditors
holding direct claims, the Executive Directors shall make such arrangements as are necessary, in their judgment, to insure a distribution to holders of contingent claims ratably with creditors holding
direct claims.
FINAL ACT, ANNEX B
87
(e) No distribution shall be made to members on account of their
subscriptions to the capital stock of the Bank until
(i) all liabilities to creditors have been discharged or provided
for, and
(ii) a majority of the Governors, exercising a majority of the
total voting power, have decided to make a distribution.
(f) After a decision to make a distribution has been taken under
(e) above, the Executive Directors may by a two-thirds majority vote
make successive distributions of the assets of the Bank to members
until all of the assets have been distributed. This distribution shall
be subject to the prior settlement of all outstanding claims of the
Bank against each member.
(g) Before any distribution of assets is made, the Executive Directors shall fix the proportionate share of each member according to
the ratio of its shareholding to the total outstanding shares of the
Bank.
(h) The Executive Directors shall value the assets to be distributed
as at the date of distribution and then proceed to distribute in the
following manner:
(i) There shall be paid to each member in its own obligations or
those of its official agencies or legal entities within its territories, insofar as they are available for distribution, an
amount equivalent in value to its proportionate share of the
total amount to be distributed.
(ii) Any balance due to a member after payment has been made
under (i) above shall be paid, in its own currency, insofar as
it is held by the Bank, up to an amount equivalent in value
to such balance.
(iii) Any balance due to a member after payment has been made
under (i) and (ii) above shall be paid in gold or currency
acceptable to the member, insofar as they are held by the
Bank, up to an amount equivalent in value to such balance.
(iv) Any remaining assets held by the Bank after payments have
been made to members under (i), (ii), and (iii) above shall
be distributed pro rata among the members.
(i) Any member receiving assets distributed by the Bank in accordance with (h) above, shall enjoy the same rights with respect to such
assets as the Bank enjoyed prior to their distribution.
gg
MONETARY AND FINANCIAL CONFERENCE
ARTICLE
VII
STATUS, IMMUNITIES AND PRIVILEGES
Section 1. Purposes of Article
To enable the Bank to fulfill the functions with which it is entrusted,
the status, immunities and privileges set forth in this Article shall be
accorded to the Bank in the territories of each member.
Section 2. Status of the Bank
The Bank shall possess full juridical personality, and, in particular,
the capacity:
(i) to contract;
(ii) to acquire and dispose of immovable and movable property;
(III) to institute legal proceedings.
Section 3. Position of the Bank with regard to judicial process
Actions may be brought against the Bank only in a court of competent jurisdiction in the territories of a member in which the Bank has
an office, has appointed an agent for the purpose of accepting service
or notice of process, or has issued or guaranteed securities. No
actions shall, however, be brought by members or persons acting for
or deriving claims from members. The property and assets of the
Bank shall, wheresoever located and by whomsoever held, be immune
from all forms of seizure, attachment or execution before the delivery
of final judgment against the Bank.
Section 4. Immunity of assets from seizure
Property and assets of the Bank, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation,
expropriation or any other form of seizure by executive or legislative
action.
Section 5. Immunity of archives
The archives of the Bank shall be inviolable.
Section 6. Freedom of assets from restrictions
To the extent necessary to carry out the operations provided for in
this Agreement and subject to the provisions of this Agreement, all
property and assets of the Bank shall be free from restrictions, regulations, controls and moratoria of any nature.
Section 7. Privilege for communications
The official communications of the Bank shall be accorded by each
member the same treatment that it accords to the official communications of other members. *
FINAL ACT, ANNEX B
89
Section 8. Immunities and privileges of officers and employees
All governors, executive directors, alternates, officers and employees
of the Bank
(i) shall be immune from legal process with respect to acts performed by them in their official capacity except when the
Bank waives this immunity;
(ii) not being local nationals, shall be accorded the same immunities from immigration restrictions, alien registration requirements and national service obligations and the same
facilities as regards exchange restrictions as are accorded by
members to the representatives, officials, and employees of
.comparable rank of other members;
(iii) shall be granted the same treatment in respect of travelling
facilities as is accorded by members to representatives,
officials and employees of comparable rank of other members.
Section 9. Immunities from taxation
(a) The Bank, its assets, property, income and its operations and
transactions authorized by this Agreement, shall be immune from all
taxation and from all customs duties. The Bank shall also be immune
from liability for the collection or payment of any tax or duty.
(b) No tax shall be levied on or in respect of salaries and emoluments paid by the Bank to executive directors, alternates, officials or
employees of the Bank who are not local citizens, local subjects, or
other local nationals.
(c) No taxation of any kind shall be levied on any obligation or
security issued by the Bank (including any dividend or interest
thereon) by whomsoever held—
(i) which discriminates against such obligation or security solely
because it is issued by the Bank; or
(ii) if the sole jurisdictional basis for such taxation is the place
or currency in which it is issued, made payable or paid, or
the location of any office or place of business maintained by
the Bank.
(d) No taxation of any kind shall be levied on any obligation or
security guaranteed by the Bank (including any dividend or interest
thereon) by whomsoever held—
(i) which discriminates against such obligation or security
solely because it is guaranteed by the Bank; or
(ii) if the sole jurisdictional basis for such taxation is the location
of any office or place of business maintained by the Bank.
90
MONETARY AND FINANCIAL CONFERENCE
Section 10. Application of Article
Each member shall take such action as is necessary in its own
territories for the purpose of making effective in terms of its own law
the principles set forth in this Article and shall inform the Bank of
the detailed action which it has taken.
ARTICLE
VIII
AMENDMENTS
(a) Any proposal to introduce modifications in this Agreement,
whether emanating from a member, a governor or the Executive
Directors, shall be communicated to the Chairman of the Board of
Governors who shall bring the proposal before the Board. If the
proposed amendment is approved by the Board the Bank shall, by
circular letter or telegram, ask all members whether they accept the
proposed amendment. When three-fifths of the members, having
four-fifths of the total voting power, have accepted the proposed
amendment, the Bank shall certify the fact by a formal communication addressed to all members.
(b) Notwithstanding (a) above, acceptance by all members is
required in the case of any amendment modifying
(i) the right to withdraw from the Bank provided in Article VI,
Section 1;
(ii) the right secured by Article II, Section 3 (c);
(iii) the limitation on liability provided in Article II, Section 6.
(c) Amendments shall enter into force for all members three
months after the date of the formal communication unless a shorter
period is specified in the circular letter or telegram.
ARTICLE IX
INTERPRETATION
(a) Any question of interpretation of the provisions of this Agreement arising between any member and the Bank or between any
members of the Bank shall be submitted to the Executive Directors
for their decision. If the question particularly affects any member
not entitled to appoint an executive director, it shall be entitled to
representation in accordance with Article V, Section 4 (h).
(b) In any case where the Executive Directors have given a decision
under (a) above, any member may require that the question be
referred to the Board of Governors, whose decision shall be final.
Pending the result of the reference to the Board, the Bank may, so
far as it deems necessary* act on the basis of the decision of the
Executive Directors.
FINAL ACT, ANNEX B
91
(c) Whenever a disagreement arises between the Bank and a
country which has ceased to be a member, or between the Bank and
any member during the permanent suspension of the Bank, such
disagreement shall be submitted to arbitration by a tribunal of three
arbitrators, one appointed by the Bank, another by the country
involved and an umpire who, unless the parties otherwise agree,
shall be appointed by the President of the Permanent Court of
International Justice or such other authority as may have been
prescribed by regulation adopted by the Bank. The umpire shall
have full power to settle all questions of procedure in any case where
the parties are in disagreement with respect thereto.
ARTICLE X
APPROVAL DEEMED GIVEN
Whenever the approval of any member is required before any act
may be done by the Bank, except in Article VIII, approval shall be
deemed to have been given unless the member presents an objection
within such reasonable period as the Bank may fix in notifying the
member of the proposed act.
ARTICLE XI
FINAL PROVISIONS
Section 1. Entry into force
This Agreement shall enter into force when it has been signed on
behalf of governments whose minimum subscriptions comprise not
less than sixty-five percent of the total subscriptions set forth in
Schedule A and when the instruments referred to in Section 2 (a), of
this Article have been deposited on their behalf, but in no event shall
this Agreement enter into force before May 1, 1945.
Section 2. Signature
(a) Each government on whose behalf this Agreement is signed
shall deposit with the Government of the United States of America
an instrument setting forth that it has accepted this Agreement in
accordance with its law and has taken all steps necessary to enable
it to carry out all of its obligations under this Agreement.
(b) Each government shall become a member of the Bank as from
the date of the deposit on its behalf of the instrument referred to in
(a) above, except that no government shall become a member before
this Agreement enters into force under Section 1 of this Article.
(c) The Government of the United States of America shall inform
the governments of all countries whose names are set forth in Schedule
A, and all governments whose membership is approved in accordance
92
MONETARY AND FINANCIAL CONFERENCE
with Article II, Section 1 (b), of all signatures of this Ageement and
of the deposit of all instruments referred to in (a) above.
(d) At the time this Agreement is signed on its behalf, each government shall transmit to the Government of the United States of
America one one-hundredth of one percent of the price of each share
in gold or United States dollars for the purpose of meeting administrative expenses of the Bank. This payment shall be credited on
account of the payment to be made in accordance with Article II,
Section 8 (a). The Government of the United States of America
shall hold such funds in a special deposit account and shall transmit
them to the Board of Governors of the Bank when the initial meeting
has been called under Section 3 of this Article. If this Agreement has
not come into force by December 31, 1945, the Government of the
United States of America shall return such funds to the governments
that transmitted them.
(e) This Agreement shall remain open for signature at Washington
on behalf of the governments of the countries whose names are set
forth in Schedule A until December 31, 1945.
(f) After December 31, 1945, this Agreement shall be open for
signature on behalf of the government of any country whose membership has been approved in accordance with Article II, Section 1 (b).
(g) By their signature of this Agreement, all governments accept
it both on their own behalf and in respect of all their colonies, overseas
territories, all territories under their protection, suzerainty, or authority and all territories in respect of which they exercise a mandate.
(h) In the case of governments whose metropolitan territories have
been under enemy occupation, the deposit of-the instrument referred
to in (a) above may be delayed until one hundred and eighty days
after the date on which these territories have been liberated. If,
however, it is not deposited by any such government before the
expiration of this period, the signature affixed on behalf of that
government shall become void and the portion of its subscription paid
under (d) above shall be returned to it.
(i) Paragraphs (d) and (h) shall come into force with regard to each
signatory government as from the date of its signature.
Section 3. Inauguration of the Bank
(a) As soon as this Agreement enters into force under Section 1
of this Article, each member shall appoint a governor and the member
to whom the largest number of shares is allocated in Schedule A
shall call the first meeting of the Board of Governors.
(b) At the first meeting of the Board of Governors, arrangements
shall be made for the selection of provisional executive directors.
The governments of the five countries, to which the largest number of
FINAL ACT, ANNEX B
93
shares are allocated in Schedule A, shall appoint provisional executive
directors. If one or more of such governments have not become
members, the executive directorships which they would be entitled to
fill shall remain vacant until they become members* or until January 1,
1946, whichever is the earlier. Seven provisional executive directors
shall be elected in accordance with the provisions of Schedule B and
shall remain in office until the date of the first regular election of
executive directors which shall be held as soon as practicable after
January 1, 1946.
(c) The Board of Governors may delegate to the provisional executive directors any powers except those which may not be delegated to
the Executive Directors.
(d) The Bank shall notify members when it is ready to commence
operations.
DONE at Washington, in a single copy which shall remain deposited
in the archives of the Government of the United States of America,
which shall transmit certified copies to all governments whose names
are set forth in Schedule A and to all governments whose membership
is approved in accordance with Article II, Section 1 (b).
603992—14
SCHEDULE A
Subscriptions
(millions of
dollars)
(millions of
dollars)
Australia
Belgium
Bolivia
Brazil
Canada
Chile
China
Colombia
Costa Rica
Cuba
Czechoslovakia
•Denmark
Dominican Republic
Ecuador
Egypt
El Salvador
Ethiopia
France
Greece
Guatemala
Haiti
Honduras
Ireland
India
200
225
7
105
325
35
600
35
2
35
125
2
3.2
40
1
3
450
25
2
2
1
1
400
24
Iran
Iraq
Liberia
Luxembourg
Mexico
Netherlands
New Zealand
Nicaragua
Norway
Panama
Paraguay
Peru
Philippine Commonwealth
Poland
Union of South Africa
Union of Soviet Socialist
Republics
United Kingdom
United States
Uruguay
Venezuela
Yugoslavia
Total
6
.5
10
65
275
50
.8
50
.2
.8
17.5
15
125
100
1200
1300
3175
10.5
10.5
40
9100
*The quota of Denmark shall be determined by the Bank after Denmark accepts membership in
accordance with these Articles of Agreement.
SCHEDULE B
Election of Executive Directors
1. The election of the elective executive directors shall be by ballot
of the Governors eligible to vote under Article V, Section 4 (b).
2. In balloting for the elective executive directors, each governor
eligible to vote shall cast for one person all of the votes to which the
member appointing him is entitled under Section 3 of Article V.
The seven persons receiving the greatest number of votes shall be
executive directors, except that no person who receives less than
fourteen percent of the total of the votes which can be cast (eligible
votes) shall be considered elected.
94
FINAL ACT, ANNEX B
95
3. When seven persons are not elected on the first ballot, a second
ballot shall be held in which the person who received the lowest
number of votes shall be ineligible for election and in which there
shall vote only (a) those governors who voted in the first ballot for
a person not elected and (b) those governors whose votes for a person
elected are deemed under 4 below to have raised the votes cast for
that person above fifteen percent of the eligible votes.
4. In determining whether the votes cast by a governor are to be
deemed to have raised the total of any person above fifteen percent of
the eligible votes, the fifteen percent shall be deemed to include,
first, the votes of the governor casting the largest number of votes
for such person, then the votes of the governor casting the next
largest number, and so on until fifteen percent is reached.
5. Any governor, part of whose votes must be counted in order to
raise the total of any person above fourteen percent, shall be considered as casting all of his votes for such person even if the total
votes for such person thereby exceed fifteen percent,
6. If, after the second ballot, seven persons have not been elected,
further ballots shall be held on the same principles until seven persons
have been elected, provided that after six persons are elected, the
seventh may be elected by o simple majority of the remaining votes
, and shall be deemed to have been elected by all such votes.
96
MONETARY AND FINANCIAL CONFERENCE
LIST OF ARTICLES AND SECTIONS
Introductory Article
I. Purposes
II. Membership in and Capital of the Bank
1. Membership
2. Authorized capital
3. Subscription of shares*
4. Issue price of shares
5. Division and calls of subscribed capital
6. Limitation on liability
7. Method of payment of subscriptions for shares
8. Time of payment of subscriptions
9. Maintenance of value of certain currency holdings of the Bank
10. Restriction on disposal of shares
III. General Provisions Relating to Loans and Guarantees
1. Use of resources
2. Dealings between members and the Bank
3. Limitations on guarantees and borrowings of the Bank
4. Conditions on which the Bank may guarantee or make loans
5. Use of loans guaranteed, participated in or made by the Bank
IV. Operations
1. Methods of making or facilitating loans
2. Availability and transferability of currencies
3. Provision of currencies for direct loans
4. Payment provisions for direct loans
5. Guarantees
6. Special reserve
7. Methods of meeting liabilities of the Bank in case of defaults
8. Miscellaneous operations
9. Warning to be placed on securities
10. Political activity prohibited
V. Organization and Management
1. Structure of the Bank
2. Board of Governors!
3. Voting
4. Executive Directors
5. President and staff
6. Advisory Council
7. Loan Committees
8. Relationship to other international organizations
9. Location of offices
10. Regional offices and councils
11. Depositories
12. Form of holdings of currency
13. Publication of reports and provision of information
14. Allocation of net income
VI. Withdrawal and suspension of membership: Suspension of Operations
1. Right of members to withdraw
2. Suspension of membership
3. Cessation of membership ,n International Monetary Fund
4. Settlement of accounts with governments ceasing to be members,
5. Suspension of operations and settlement of obligations
FINAL ACT, ANNEX B
VTI. Status, Immunities and Privileges
1. Purposes of Article
2. Status of the Bank
3. Position of the Bank with regard to judicial process
4. Immunity of assets from seizure
5. Immunity of archives
6. Freedom of assets from restrictions
7. Privilege for communication
8. Immunities and privileges of officers and employees
9. Immunities from taxation
10. Application of Article
VIII. Amendments
IX. Interpretation
X. Approval deemed given
XI. Final Provisions
1. Entry into force
2. Signature
3. Inauguration of the Bank
SCHEDULES
SCHEDULE A. Subscriptions
SCHEDULE B. Election of Executive Directors
97
Annex C
SUMMARY OF AGREEMENTS OF BRETTON WOODS
CONFERENCE
This Conference at Bretton Woods, representing nearly all the
peoples of the world, has considered matters of international money
and finance which are important for peace and prosperity. The Conference has agreed onfcheproblems needing attention, the measures
which should be taken, and the forms of international cooperation
or organization which are required. The agreements reached on these
large and complex matters are without precedent in the history of
international economic relations.
I. The International Monetary Fund
Since foreign trade affects the standard of life of every people, all
countries have a vital interest in the system of exchange of national
currencies and the regulations and conditions which govern its working. Because these monetary transactions are international exchanges, the nations must agree on the basic rules which govern the
exchanges if the system is to work smoothly. When they do not
agree, and when single nations and small groups of nations attempt
by special and different regulations of the foreign exchanges to gain
trade advantages, the result is instability, a reduced volume of foreign
trade, and damage to national economies. This course of action is
likely to lead to economic warfare and to endanger the world's peace.
The Conference has therefore agreed that broad international action
is necessary to maintain an international monetary system which will
promote foreign trade. The nations should consult and agree on international monetary changes which affect each other. They should outlaw practices which are agreed to be harmful to world prosperity, and
they should assist each other to overcome short-term exchange difficulties.
The Conference has agreed that the nations here represented should
establish for these purposes a permanent international body, The International Monetary Fund, with powers and resources adequate to perform the tasks assigned to it. Agreement has been reached concerning
these powers and resources and the additional obligations which the
member countries should undertake. Draft Articles of Agreement on
these points have been prepared.
98
FINAL ACT, ANNEX C
99
II. The International Bankjor Reconstruction and Development
It is in the interest of all nations that post-war reconstruction
should be rapid. Likewise, the development of the resources of
particular regions is in the general economic interest. Programs of
reconstruction and development will speed economic progress everywhere, will aid political stability and foster peace.
The Conference has agreed that expanded international investment
is essential to provide a portion of the capital necessary for reconstruction and development.
The Conference has further agreed that the nations should cooperate to increase the volume of foreign investment for these purposes,
made through normal business channels. It is especially important
that the nations should cooperate to share the risks of such foreign
investment, since the benefits are general.
The Conference has agreed that the nations should establish a
permanent international body to perform these functions, to be called
The International Bank for Reconstruction and Development. It has
been agreed that the Bank should assist in providing capital through
normal channels at reasonable rates of interest and for long periods
for projects which will raise the productivity of the borrowing country. There is agreement that the Bank should guarantee loans made
by others and that through their subscriptions of capital all countries
should share with the borrowing country in guaranteeing such loans.
The Conference has agreed on the powers and resources which the
Bank must have and on the obligations which the member countries
must assume, and has prepared draft Articles of Agreement
accordingly.
The Conference has recommended that in carrying out the policies
of the institutions here proposed special consideration should be given
to the needs of countries which have suffered from enemy occupation
and hostilities.
The proposals formulated at the Conference for the establishment
of the Fund and the Bank are now submitted, in accordance with the
terms of the invitation, for consideration of the governments and
people of the countries represented.
REPORT OF COMMISSION I
(INTERNATIONAL MONETARY FUND)
TO THE EXECUTIVE PLENARY SESSION
July 20, 1944
Reporting Delegate: Louis Rasminsky, Canada
MR. PRESIDENT:
I have the honor to report to the Conference on the work of Commission I, which was set up by the Conference at its second plenary
session on July 3 to consider proposals for the establishment of an
International Monetary Fund. The Commission has ended its work
with complete success. It held nine sessions under the distinguished
chairmanship of Dr. Harry D. White (delegate of the United States of
America) whose firm guidance helped bring the Commission safely
around all difficult corners. I know that I am voicing the unanimous
and sincere feeling of all members of the Commission when I express
to Dr. White our deep appreciation of the manner in which he conducted our deliberations.
The Commission carried on a large part of its business through four
standing committees, dealing respectively with the Purposes, Policies,
and Quotas of the Fund, with the Operations of the Fund, with the
Organization and Management of the Fund, and with the Form and
Status of the Fund. In all, these standing committees held 26 meetings, and each 'of them established several subcommittees. In addition, the Commission set up ad hoc committees on Uniform Changes
in Par Values of Currencies, Exchange Controls on Current Payments, Depositories, Relations with Non-Member Countries, Special
Problems of Liberated Areas, Voting Arrangements and Executive
Directors, Quotas and, toward the end of its deliberations, a Special
Committee on Unsettled Problems. The task of recording the decisions of Commission I was entrusted to a Drafting Committee.
At its final session on July 19, 1944, the Commission adopted the
Articles of Agreement of the International Monetary Fund. It is
my privilege to transmit to the Conference these Articles of Agreement; they are annexed to this report and form part thereof.1
1
Not printed as an annex to this report. See Articles of Agreement of the
International Monetary Fund as contained in the Final Act, p. 28.
100
REPORT OF COMMISSION I
101
I am certain that all members of the Conference will share my view
that it has been no small achievement for the representatives of 44
countries to have reached agreement on the desirability of establishing
an International Monetary Fund and on the conditions which should
govern its operations. The subject is a highly technical and complicated one; and the new and bold vision it embodies might have been
expected to render agreement difficult to attain.
I think that there are two main reasons why it has been possible for
the Commission, in the short time which has elapsed since it held its
first meeting on July 3, to achieve this result. In the first place the
technical preparation of this Conference was admirable. The preparation went on steadily for about 18 months before the Conference
convened. As has happened so often in the history of ideas, a brilliant
concept was developed simultaneously and independently in different
parts of the world. In April 1943, the Clearing Union proposal,
which will always remain associated with the great name of Lord
Keynes, was published in the United Kingdom, and the original
American plan for a Stabilization Fund of the United and Associated
Nations, the work of Dr. White and his able collaborators, was published in this country. Before and after publication, informal discussions took place between the authors of these proposals and the
representatives of interested countries. Like the more formal proceedings of this Conference, these conversations were noncommittal
in character and did not bind governments to agree to or support the
proposals discussed.
After the United States Treasury officials had held a series of
bilateral talks with officials of other governments, they thought it
well to organize a more general exchange of views, which took place
among the representatives of some 20 countries at Washington in
June 1943. After that, bilateral and group talks continued in Washington, in London, and elsewhere, and the officials of certain other
countries, including France and Canada, put forward proposals along
the same general lines as the British and the American.
As a result of these discussions, the area of agreement on principles
was found to be very wide, and this having been ascertained, there was
no great difficulty in reaching a satisfactory accommodation as
regards the secondary questions relating to techniques and amounts.
This accommodation was embodied in the Joint Statement by Experts
on the Establishment of an International Monetary Fund of the
United and Associated Nations, which was published simultaneously
in many of the world's capitals in April 1944 and which constituted
the main working paper of Commission I.
The final stage of preparation for the work of this Conference was
the informal pre-conference discussions which took place at Atlantic
102
MONETAET AND FINANCIAL CONFERENCE
City from June 15 to June 30, 1944. This meeting provided a useful
opportunity for a preliminary exchange of views and it helped materially to shorten and focus the discussions here.
So much for the preparatory work. I repeat that the technical
preparation of the Conference was excellent and was largely responsible
for the results that have been achieved. I am sure that the Conference has every reason to be grateful to those who gave so unstintingly of their time and effort in the preliminary stages of this work.
But no amount of technical preparation would have been adequate
if there had not been in all delegations a single-minded determination
to accomplish positive results at Bretton Woods. I have said earlier
that at a relatively early stage in the preliminary discussions there
was found to be general agreement on major points of principle.
These major points of principle I conceive to be three in number:
First, that an exchange rate in its very nature is a two-ended thing,
and that changes in exchange rates are therefore properly matters of
international concern; second, that the peace and prosperity of all
will be served by countries agreeing to avoid not only competitive
devaluations of their currencies but also exchange restrictions on their
current international transactions and bilateralist currency practices
of a discriminatory nature; and finally, that means must be found to
increase the international liquidity of all countries, to give them assurance that temporary deficits in their international balances of payments can be met without resorting either to deflationary measures
which reduce real income and employment at home, the maintenance
of which is, in the words of the document I am transmitting to you,
one of the "primary objectives of economic policy/' or alternatively,
to internationally anti-social measures, such as excessive tariffs and
other import restrictions.
I wish to pause here for a moment to comment on these last two
objectives. The Commission, in asking governments to assume the
obligation to make their currencies freely convertible, so that each
country can count on using the proceeds of its exports to any part of
the world to pay for imports from any part of the world, has been
sufficiently realistic to recognize that certain countries will not be
able to assume this obligation at once. There are some countries,
notably the United Kingdom, who have without calculation or hesitation thrown all they had, including their foreign assets, into the
common struggle against our enemies, with the result that they will
emerge from the war as heavy debtors on international account. It
would be quite unreasonable to ask such countries to assume at once
the burden of making their currencies convertible; and in the report
I am transmitting to you, arrangements are provided under which
this obligation is deferred, without the countries concerned being in
REPORT OF COMMISSION I
103
any sense in default of the general obligations they would assume in
becoming parties to the Fund Agreement. They do, however, undertake to withdraw exchange restrictions, except on capital transactions,
as soon as practicable and to consult with the Fund regarding any
which may be maintained after a relatively short period of years.
My second comment relates to the provisions of the Agreement
under which members of the Fund may, on specified terms and conditions, purchase foreign exchange for their own currencies in specified
amounts. These provisions have given rise to considerable misunderstanding and I think it right to state that the Fund is not regarded,
and should not be regarded, as an institution for the provision of
long-term capital requirements. The quota of each country should
be regarded as an extra reserve to give it confidence to face the
uncertain future and not as the primary source of foreign exchange
to meet its international commitments. Long-term financing through
the Fund must not be practiced, and the Fund Agreement contains
provisions designed to this end. A perfect balance will, of course,
not be achieved and it would be idle to pretend that there may not,
especially in the first few years of the Fund's operations, be some
tendency toward meeting other than purely temporary requirements
through the Fund. But the Agreement itself makes it clear that "the
Fund is not intended to provide facilities for relief or reconstruction".
It is intended "to provide members with an opportunity to correct
maladjustments in their balance of payments" and "to shorten the
duration and lessen the degree" of such maladjustments. In this
connection, the Agreement recognizes that creditor as well as debtor
countries may be responsible for balance-of-payments difficulties.
I have already said, and repeated, that a wide measure of agreement
was found on the three general principles I enunciated. In spite of
this, there developed in the deliberations of Commission I, a considerable difference of opinion on detailed provisions. Let me take
as an example the important question of exchange stability. There
is universal agreement that one of the main purposes of the Fund is
"to promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation". The precise provisions to give effect to this purpose were,
however, the subject of considerable debate. There were some who
attached so much importance to exchange stability that they desired
to give the Fund great authority to prevent changes in exchange
rates; while others started from the position that this was a matter
of sovereign right and that there should be no suggestion of interference on the part of the Fund. In the end a text was developed
and incorporated in the Articles of Agreement which steers a course
between these two extreme views. All were willing to accept this
104
MONETARY AND FINANCIAL CONFERENCE
middle course. In the text which was developed there is preserved
intact the principle that changes in exchange rates are matters of
international concern.
And similarly with other important provisions of the. Agreement.
In passing from the joint statement, which consisted of 39 paragraphs,
to the Articles of Agreement, over 130 alternatives were formally
submitted and considered; for some provisions as many as 11 alternatives were put forward. In the end, one single text was agreed on
for each of the 80 sections and 5 lengthy schedules of the Agreement.
I mention these facts not on account of any interest in the figures
themselves but to place clearly on record that the various delegations
have been animated by a spirit of accommodation and adjustment, of
mutual give-and-take. It is not irrelevant to raise here the question
why this should have been so, why the national groups should have
been willing to give up positions originally taken on certain issues.
The answer, I believe, lies in the fact that the delegates in the
Commission worked with the realization that what was being given
up on particular points was small as compared with what might be
accomplished, for the general good, through the establishment of a
permanent institution for consultation and collaboration on international monetary matters.
I think, too, that the success of the work of Commission I can partly
be ascribed to the fact that the delegations have conducted their work
with a vivid recollection of the various international economic conferences which took place between the two great wars. There was a
general determination to avoid the fate which befell most of these
conferences, and to pass from generalizations and exhortations to
action. "Too little and too late" has cost us all so much that there
was no disposition on the part of any group to fall again into this
calamitous error.
The Commission is well aware that timidity still exists in certain
quarters and that even now there are those who say "Why take risks?"
and who urge us to go back to some monetary arrangements more
familiar than those embodied in the report I am transmitting to you.
No one would for a moment deny that there are risks involved in the
proposals of the Commission, as there are risks inherent in any extension of credit or in any partnership arrangement. But the realistic
course is to appraise the risks of any course of action by determining
what are the risks of any alternative course of action or, for that
matter, of inaction. On this basis, the risks involved in the present
proposals are, in my view, not excessive, nor are they risks we should
be afraid to assume. They might, at first sight, appear to be greatest
for countries which have a surplus in their current account balance of
payments. But I venture to submit that it must be borne in mind
that if the creditor countries extend credit through the Fund it will in
REPORT OF COMMISSION 1
105
effect be goods and not money they will be lending; and that it will be
open to them, through their own policies, to obtain the return flow of
goods to pay off the loans. It is on the basis of pure national selfinterest, of an enlightened and far-sighted kind, that these proposals
must be presented in the creditor countries. It is not an act of charity
to enable one's customers to maintain their purchases in periods when
their foreign-exchange resources are temporarily reduced, especially
when in the process of doing this one provides opportunities for
employment for one's own people.
As for the exhortations to return to the past, the plain and simple
answer to that is that, in the matter of monetary arrangements, the
recent past is not good enough to go back to and there would be few
countries able or willing to do so. We cannot go back. We must
go forward.
I thought it right, Sir, in transmitting this report to you, to make
these general observations in order to acquaint the Conference as a
whole with the spirit which actuated the work of Commission I.
In sum, this spirit was one of determination not to repeat the mistakes of the past) but to be reasonably and realistically courageous
in breaking new ground.
Before concluding, I should like to express appreciation of the
great assistance the Commission and its Committees have received
from the Secretariat. The Secretaries of the committees and their
assistants have discharged their duties with unfailing efficiency and
skill. I wish particularly to express my own thanks to Mr. Leroy
Stinebower, who served as Secretary of Commission I and as Secretary of the Drafting Committee. He never tired or failed in his
efforts to further the work entrusted to him; and the Commission
as a whole, as well as I personally, must feel greatly in his debt.
I should like to say one final word. No one in Commission I
thinks that if the International Monetary Fund is established, the
world's economic problems will have been solved. We have made
only a beginning toward accomplishing the objectives set out in the
Atlantic Charter and in article VII of the mutual-aid agreements
between the United States and many of the countries here represented. But we feel that we have made a good beginning and that
what we have done here should clear the way for similar progress in
other related fields. Let us hope that the action in these other fields
will be as realistic and constructive as the action we have taken at
this Conference.
REPORT OF COMMISSION II
(INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT)
TO THE EXECUTIVE PLENARY SESSION
July 21, 1944
Reporting Delegate: Georges Theunis, Belgium
MR. PRESIDENT:
I have the honor to report to the Conference on the work of Commission II, which was set up by the Conference at its plenary session
on July 3 to study the proposals for the creation of a Bank for Keconstruction and Development.
The first meeting of Commission II was also held on July 3 and was
mainly of a formal character, with the exception of an inspiring
address by Lord Keynes and the appointment of an Agenda Committee, which, slightly enlarged, was to become the hard-working
Drafting Committee. The Commission met again on July 11. Its
chairman, Lord Keynes, proposed a method of work by which the best
advantage could be taken of the accomplishment of Commission I
while speedy progress was made on the delicate points with which
the members of Commission II were confronted.
As in Commission I, the work was divided between four committees, dealing respectively with Purposes, Policies, and Capital of
the Bank; Operations; Organization and Management; Form and
Status. At the same time, several ad hoc subcommittees were created
for the purpose of examining points which called for special study and
discussion. To these subcommittees the following questions were
referred: membership; subscription; rates of capital employable; flat
rate of commission; relationship of international agencies; management; suspension and withdrawals; taxation.
Subcommittees—and amongst them the Subscription Committee
and the Special Committee on Unsettled Problems—were entrusted
with the task of solving the knottier problems. Most of these
sub- and ad hoc committees were created directly by the Commission,
in agreement with the chairman of the committees, and all of them
were allowed to report directly to the Commission if it were thought
106
REPORT OF COMMISSION II
107
advantageous. This change of procedure was instrumental in cutting
down unnecessary delays. The Commission met nine times and the
various committees and subcommittees held numerous meetings.
This afternoon, the Commission adopted the Articles of Agreement
of the Bank for Reconstruction and Development, which are attached
to the present report and which the Commission requested me to refer
for approval to the Plenary Assembly of the Conference.1
I must call your attention to the fact that the work*of Commission
II was simpler in some respects and more complicated in others than
the work of Commission I. It was simpler because many of the
questions relating to general organization, having already been very
carefully studied in Commission I, it sufficed, in most cases, either to
accept them as they were, or to adapt them to the particular nature
of the problems submitted to Commission II. The work was more
complicated because, unlike the Fund, the Bank had not been for a
long time past under the scrutiny of international research. Years
ago, the questions involving exchange stability were already widely
discussed both in Europe and in America. Various solutions had been
recommended, and procedures of a somewhat primitive and inadequate
character had indeed been in operation between the two wars.
The creation of the Bank was an entirely new venture. Never,
during the numerous international meetings which over a period of
25 years have studied all sorts of economic problems, was any thought
given to an organization so considerable in its scope and so novel in
its conception as that which has been the subject of your deliberations.
So novel was it, that no adequate name could be found for it. In so
far as we can talk of capital subscriptions, loans, guarantees, issue of
bonds, the new financial institution may have some apparent claim to
the name of Bank. But the type of shareholders, the nature of subscriptions, the exclusion of all deposits and of short-term loans, the
non-profit basis, are quite foreign to the accepted nature of a Bank.
However it was accidentally born with the name Bank, and Bank it
remains, mainly because no satisfactory name could be found in the
dictionary for this unprecedented institution.
Here is another example of our difficulties: The International Monetary Fund offered obvious advantages to its members in exchange for
their subscriptions. But, to some people, the advantages offered by
the Bank were not so obvious at first sight. Having regard to their
economic structure, certain countries might justifiably feel that the
Bank could not be of assistance to them and that they would not have
to resort to such a source of credit. But here an idea comes into play,
1
Not printed as an annex to this report. See Articles of Agreement of the
International Bank for Reconstruction and Development as contained in the Final
Act, p. 68.
108
MONETARY AND FINANCIAL CONFERENCE
an idea which I do not need to emphasize to you, Gentlemen, who have
long been convinced of its real greatness, but which should be impressed
on the mass of the people whom you represent. This idea is the idea
of human solidarity.
All those who have given thought to the problems which arise
every day in connection with the economic life of a country are aware
of the economic interdependence of nations. This interdependence
may not be immediately apparent. It is unquestionable, however,
that a loan granted to one country from the resources or with the
guarantee of the Bank will not be advantageous to that country alone.
The loan will enable it to reconstruct its economy, destroyed by war,
or inadequately developed. As a result, activity is fostered, needs
and requirements are satisfied, purchasing power is increased, new
markets are born, and, indirectly, by means of the general flow of
international trade, all countries finally benefit by the improvement
brought about in the particular country which has obtained a loan
through the Bank. In this way, capital which is now in excess in
certain countries will again be put to productive use and will find its
reward not only in the rate of interest on remunerative investments,
but also, indirectly, in the promotion of world prosperity which rich
countries themselves need in order to maintain and develop their
own well-being.
As I said before, some of the problems met with in drafting the
regulations of the future Bank were of an entirely new character—
much more so than for the Fund, the studies of which were started
two years ago.
This is not meant to detract from the merit of our colleagues who
concentrated their attention especially on the Monetary Fund and
who, I repeat, have greatly facilitated our work. My only intention
is to underline the considerable credit due to Commission II, its committees and subcommittees, which, within a limited period of time,
have succeeded in overcoming the difficulties involved and in reaching
an agreement on the principles which are to govern the activity of the
Bank. This achievement would have been impossible without two
distinct elements. The first is the brilliant chairmanship of Lord
Keynes. Not only has he greatly contributed to the ideas contained
in the Articles of Agreement of the Bank, but he also has kept the
proceedings at a brisk pace which the delegates sportingly emulated.
The other is the untiring and admirable work performed by the
Secretariat under the orders of Dr. Kelchner, and by the secretaries
of this Commission: Mr. Upgren, Mr. Smithies, and Miss Russell.
A considerable number of reports, amendments, and other documents
were drawn up, copied, and distributed with sufficient promptitude
to permit the work to proceed uninterruptedly.
REPORT OF COMMISSION II
109
I should now like to call your attention to a few remarks relating
more directly to the Bank. As for the purpose of the Bank, it should
be noted that the Bank is established both for the reconstruction and
for the development of the member countries, and these two objectives
are to be pursued on a footing of equality.
On the other hand, the Bank aims at covering a field distinct from
the Fund. As Mr. Rasminsky pointed out in his report to Commission I, "the Fund is not regarded, and should not be regarded, as an
institution for the provision of long-term capital requirements". The
Fund has been created to provide members with an "opportunity to
correct maladjustments in their balance of payments" and "to shorten
the duration and lessen the degree" of such maladjustments.
On the contrary, when the Bank promotes or supplements private
investments either by means of guarantees and participations in private loans or by providing funds out of its own resources, the aim is
to provide capital on a long-term or medium-term basis. Precautionary measures, as you know, appear in various provisions of the Agreement to prevent such movements of capital from hampering the economy of the countries concerned.
Next, I turn to the prospective size of the actual subscription. The
capital of the Bank is a huge sum and far exceeds anything the world
has ever known in this field. The greater part, however, is in the form
of a guarantee fund which cannot be called up except over a period of
years and the full amount of which we are entitled to hope will never
be called up. Careful recommendations have been worked out regarding the operation of the Bank with a view to protecting its resources and its credit. The first payments provided for, though ample
for the initial operations, are moderate enough and are within the
capacity of all the subscribers.
In spite of the difficulties encountered, I have found at the Conference ground for comfort.
In 1927, I was taking part in an important economic conference in
Geneva. A year of preparatory work and several weeks devoted to
discussions were needed before it was possible to recommend to the 51
governments represented the economic policy which in the opinion of
the Conference was indispensable to restore prosperity. Alas, those
recommendations were never implemented! But during the 17 years
that have elapsed since 1927, these ideas on economic policy have made
good progress and now find a better response. Indeed, at Bretton
Woods we have passed the stage of making recommendations of a more
or less general nature; we are recommending action. This is evidenced
by the important amounts which various countries are contemplating
to subscribe and which bear witness to the frame of mind of the delegates at the end of our deliberations.
003992—44
8
. .
110
MONETAKY AND FINANCIAL CONFERENCE
But don't let us stop with contemplation of the two milestones we
have reached on the arduous road which humanity has to cover
before reaching the peaceful prosperity to which we all aspire. Even
if the Bank and the Fund succeed in their purposes to the full extent
of the most favorable expectations, they cannot be sufficient to restore
a prosperous world economy. I would go further and say that they
could not be successful in a world whose economy remained chaotic
in other respects. But they can be and should be the starting point
of this restoration.
Before ending my remarks, I should like to pay tribute to President
Roosevelt, to his right-hand man in financial matters, Mr. Morgenthau, and to the Government and the people of the United States of
America for the initiative taken by this country in launching, with
far-sighted vision, the far-reaching plan which inspired the Articles
of Agreement of the Bank. A great deal of our appreciation should
also go to Mr. Harry White, who was instrumental in giving shape to
the plan.
In promoting the ideas of the Bank and of the Fund, and in calling
this Monetary Conference, the Government of the United States of
America has, on the common peace front of the United Nations, made
a contribution which timely complements that of the glorious American armies on the war front. Allies on the battlefield, we must also
do our part together in preparing a better world.
I have stressed the importance of the Fund and of the Bank in the
material organization of tomorrow, but the moral element which
would be expressed in the success of both organizations would be of
paramount value. It would mean that before the war is over, men
of good will, men coming from all parts of the world, men of different
races and creeds, whose countries have different political systems,
have agreed and have succeeded in collaborating in heretofore undreamed-of efforts at insuring a better and more secure future for the
whole world. The repercussions of such an achievement will be
tremendous.
The plans set up at Bretton Woods are not perfect. Even if they
were, their forbidding technicalities and the novelty of their thought
might be enough to ; arouse misapprehension. For many years, I
have noticed that economic questions, and especiallyfinancialmatters,
are not properly understood by the masses. When you leave Bretton
Woods, Gentlemen, your task will not be over. You who can bear
witness to the sincerity of purpose which has prevailed at Bretton
Woods can also dissipate false alarms, clear up possible misunderstandings, explain the necessary compromises that were made, and,
by so doing, act in your respective countries as pioneers of a just and
promising international cooperation.
REPORT OF COMMISSION III
(OTHER MEASURES FOR INTERNATIONAL MONETARY
AND FINANCIAL COOPERATION)
TO THE EXECUTIVE PLENARY SESSION
July 21, 1944
Reporting Delegate: Edward C. Fussell, New Zealand *
MR. PRESIDENT:
It is my privilege to report to the Conference on the proceedings of
Commission III, which was set up by the Conference at its second
plenary session on July 3, to examine any proposals which might be
submitted regarding other means of internationalfinancialcooperation.
The work of Commission III, unlike that of Commissions I and
II, did not represent the culmination of an organized body of preparatory work during a long period before this Conference was convened.
Nevertheless the proposals examined by Commission III represent
the views of people who had given long and careful thought to the
subject-matter of their recommendations.
Furthermore, there was no limit to the number and variety of
proposals which could conceivably have been submitted within the
Commission's terms of reference; it is therefore a fine tribute to the
wisdom and sense of proportion of every delegation that it was found
possible to group the proposals under three main headings, to which
I shall refer presently.
The Commission has held three sessions under the most excellent
chairmanship of the Honorable Eduardo Su&rez, Minister of Finance
of Mexico, chairman of the Mexican delegation. Though entire
unanimity on all points was naturally not to be expected, it was
largely due to his leadership and impartiality that the work of Commission III was brought so harmoniously to its successful conclusion.
In saying this I am confident that I am expressing the feeling of
every member of the Commission.
In order to provide a basis for the Commission's work an Agenda
Committee was appointed at the first meeting of the Commission on
July 3 to consider the suggestions received and make recommendations as to the problems which should be dealt with by the Commis1
Mr. Fussell acted as reporting delegate in the absence of Mr. Fisher.
Ill
112
MONETARY AND FINANCIAL CONFERENCE
sion. During the ensuing week 15 proposals were received by the
Agenda Committee. On examination it was found that these proposals related to three general fields of interest:
Firstly—"The Use of Silver for International Monetary Purposes"
Secondly—-"Enemy Assets, Looted Property, and Related
Matters"
Thirdly—"Recommendations on Economic and Financial Policy.
The Exchange of Information, and Other Means of Financial
Cooperation"
Accordingly three ad hoc committees were appointed to consider the
proposals and make recommendations to the Commission.
At its final meeting the findings of the Commission in respect of
the reports of the three committees which I have already named were
as follows:
(i) The Commission adopted the report oj Committee 1 on " The
Use of Silver for International Monetary Purposes" and
recommended that the following statement be included in the
Final Act:
"The problems confronting some nations as a result of the
wide fluctuation in the value of silver were the subject of
serious discussion in Commission III. Due to the shortage
of time, the magnitude of the other problems on the agenda,
and other limiting considerations, it was impossible to give
sufficient attention to this problem at this time in order
to make definite recommendations. However, it was the
sense of Commission III that the subject should merit
further study by the interested nations."
(ii) The Commission adopted two measures placed before it by
Committee 2 under the heading of "Enemy Assets, Looted
Property, and Related Matters".
The one is a recommendation reading as follows:
"The United Nations Monetary and Financial Conference recommends the liquidation of the Bank for International Settlements at
the earliest possible moment."
The other is a resolution relating to Enemy Assets and Looted
Property, and this was adopted in principle and a drafting committee
was appointed to make certain language changes and empowered to
prepare a resolution for presentation to the Plenary Session of the
REPORT OF COMMISSION III
113
Conference. The resolution as submitted by the drafting committee
reads as follows:
WHEREAS
In anticipation of their impending defeat, enemy leaders, enemy
nationals and their collaborators are transferring assets to and through
neutral countries in order to conceal them and to perpetuate their
influence, power, and ability to plan future aggrandizement and world
domination thus jeopardizing the efforts of the United Nations to
establish and permanently maintain peaceful international relations;
WHEREAS
Enemy countries and their nationals have taken the property of
occupied countries and their nationals by open looting and plunder,
by forcing transfers under duress, as well as by subtle and complex
devices, often operated through the agency of their puppet governments, to give the cloak of legality to their robbery and to secure
ownership and control of important enterprises in the post-war
period;
WHEREAS
,
Enemy countries and their nationals have also, through sales and
other methods of transfer, run the chain of their ownership and control through occupied and neutral countries, thus making the problem
of disclosure and disentanglement one of international character;
WHEREAS
The United Nations have declared their intention to do their utmost
to defeat the methods of dispossession practiced by the enemy, have
reserved their right to declare invalid any transfers of property belonging to persons within occupied territory, and have taken measures to
protect and safeguard property, within their respective jurisdictions,
owned by occupied countries and their nationals, as well as to prevent
the disposal of looted property in United Nations markets;
THEREFORE
It is resolved that, in recognition of these considerations, the
United Nations Monetary and Financial Conference
I. Takes note of and fully supports steps taken by the United
Nations for the purpose of
(a) uncovering, segregating, controlling, and making appropriate
disposition of enemy assets;
(b) preventing the liquidation of property looted by the enemy,
locating and tracing ownership and control of such looted property,
and taking appropriate measures with a view to its restoration to its
lawful owners.
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MONETARY AND FINANCIAL CONFERENCE
II. Recommends that all Governments of countries represented at
this Conference take action consistent with their relations with the
countries at war to call upon the Governments of neutral countries
(a) to take immediate measures to prevent any disposition or transfer within territories subject to their jurisdiction of any
(1) assets belonging to the Government or any individuals or institutions within those United Nations occupied by the enemy;
and
(2) looted gold, currency, art objects, securities, other evidences
of ownership in financial or business enterprises, and of other
assets looted by the enemy;
as well as to uncover, segregate and hold at the disposition of the postliberation authorities in the appropriate country any such assets within
territory subject to their jurisdiction.
(b) to take immediate measures to prevent the concealment by
fraudulent means or otherwise within countries subject to their jurisdiction of any
(1) assets belonging to, or alleged to belong to, the Government
or any individuals or institutions within enemy countries;
(2) assets belonging to, or alleged to belong to, enemy leaders,
their associates and collaborators, and
to facilitate their ultimate delivery to the post-armistice authorities.
(iii) The Commission adopted the report oj Committee 3 on "Economic and Financial Policies, Exchange of Information) and
Other Means oj Financial Co-operation."
Of the matters considered by Committee 3 two were subject to
specific discussion and vote by the Commission.
The first was a resolution combining the proposals submitted by
Bolivia, Brazil, Chile, Cuba, and Peru. The text of the resolution,
which was adopted by the Commission, is as follows:
WHEREAS
In Article I of the Articles of Agreement of the International
Monetary Fund it is stated that one of the principal purposes of the
Fund is to facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives
of economic policy;
WHEREAS
It is recognized that the complete attainment of this and other pur
REPORT OF COMMISSION i n
115
poses and objectives stated in the Agreement cannot be achieved
through the instrumentality of the Fund alone;
THEREFORE
The United Nations Monetary and Financial Conference recommends to the participating Governments that, in addition to implementing the specific monetary and financial measures which were the
subject of this Conference, they seek, with a view to creating in the
field of international economic relations conditions necessary for the
attainment of the purposes of the Fund and of the broader primary
objectives of economic policy, to reach agreement as soon as possible
on ways and means whereby they may best:
(1) reduce obstacles to international trade and in other ways promote mutually advantageous international commercial relations;
(2) bring about the orderly marketing of staple commodities at
prices,fair to the producer and consumer alike;
(3) deal with the special problems of international concern which
will arise from the cessation of production for war purposes;
and
(4) facilitate by cooperative effort the harmonization of national
policies of Member states designed to promote and maintain
high levels of employment and progressively rising standards
of living.
The second matter voted on was a resolution introduced by the
Australian delegation recommending that the governments invited to
accept the International Monetary Agreement be invited to enter, at
the same time, into an undertaking to maintain high levels of employment in their respective countries. A motion for adoption of the
Australian resolution was defeated.
I cannot end this report without placing on record the value of the
ready help so willingly given to the Commission and its committees by
the Secretariat. I should like also to pay a tribute to the consistently
high standard of performance of the officers and personnel of the committees, notably Mr. Orvis A. Schmidt, who was Secretary not only of
the committees, but also of Commission III.
To conclude this report, and in order to place the deliberations of
Commission III in perspective, I should like to say that they are supplementary to the reports of Commissions I and II, but in common
with the work of those Commissions they deal with financial measures
which do not by any means exhaust the efforts and endeavors which
must be made in bringing to fruition a grand scheme of world
prosperity.
STATEMENTS OF CERTAIN DELEGATIONS
CONCERNING
THE ARTICLES OF AGREEMENT
OF THE INTERNATIONAL MONETARY FUND
Statement by the Delegation of Australia
Article I
In the opinion of the Australian Delegation the purposes of the
Fund, which provide criteria for its management, place too little emphasis on the promotion and maintenance of high levels of employment, and too much emphasis on the promotion of exchange stability
and on shortening the duration and lessening the degree of disequilibrium in international balances of payments.
Article III, Section 1
In view of the fact that Australia has little gold and few dollars, the
quota fixed for Australia will compel her to build up liquid reserves
outside the Fund to meet the wide fluctuations in her balance of payments. In doing so she is likely to have to take action in conflict
with the purposes of the Fund.
Ankle IV, Section 5(f)
The Australian Delegation considered that the Fund should be
required to concur in a requested change in a par value when a country has a serious and persistent deficit in its balance of payments
accompanied by a seriously adverse change in its terms of trade.
Article V, Section 8(a)(iii)
The Australian Delegation considered that in view of the wide
fluctuations in the balance of payments of many agricultural 'countries, the annual drawing rights should be greater than twenty-five
percent of the quota.
Article V, Section 8
The Australian Delegation considered the charges provided for in
this Section are too high and questioned the principle of charging
countries interest which have an adverse balance of payments while
provision is made for the payment of two percent interest to countries
with a favourable balance of payments. (See Article XII, Section
6(b))
116
STATEMENTS OF CERTAIN DELEGATIONS
117
Article XV, Section 1
The Australian Delegation considered that the right of withdrawal
should be protected from being made meaningless by membership of
the Fund being made a condition of membership of other international
bodies.
Statement by the French Delegation
Article III, Section 1
Reservation as to the size of the French quota and of European
quotas in general.
Article III, Section 3
Reservation as to the omission of a clause permitting enemy
occupied countries to reduce their gold subscription by one-fourth.
Article IV, Section 7
Reservation on the veto power on uniform changes in par values
accorded to members having 10 percent or more of the total of the
quotas.
Article V, Section 8 (a) (Hi)
Reservation as to lack of flexibility as a result of prescribing a
definite quantitative limitation on the purchase of currency from the
Fund to the extent of 25 percent of the quota in a 12-month period*
Article Vt Section 7(6)
Reservation as to the non-inclusion of a clause in favor of enemy
occupied countries in connection with the provisions requiring a
member to repurchase its currency from the Fund with gold or convertible currencies.
Article XIX(b) and (c)
Reservation as to the definition of "official holdings of monetary
reserves."
Article, XIX(i)
Reservation as to the definition of "current transactions."
Article XX, Section 3 (b)
Reservation as to the date mentioned for the selection of permanent
executive directors which may not take sufficiently into account the
situation of enemy-occupied countries.
Statement by the Delegation of India
Reservation as to the size-of the quota for India.
Statement by the Delegation of Iran
Reservation as to the size of the quota for Iran.
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MONETARY AND FINANCIAL CONFERENCE
Statement by the Delegation of Peru
Peruvian Law No. 7526 of 18th May 1932, which suspended the free
conversion of the currency into gold, provided that the gold reserves
existing at that time, viz., 16,338.71115 kilos of gold, valued by law
at 38,784,832.53 Peruvian Soles, were to be earmarked and kept in
custody by the Central Reserve Bank, and were not to be used in any
way or manner, nor were ever to become liable to seizure or disposal in
any contingency whatsoever. ("Oro intangible" in the original
Spanish wording of that Law.) Consequently, the gold thus set aside
by Law No. 7526 cannot be taken into account, either for the purpose
of estimating Peru's quota and its proportion to be paid in gold, or for
use in any of the operations of the Fund, or to cover any contingent
or eventual liability of Peru if it ceases to be a member or if the Fund
is liquidated.
Statement by the Delegation of the Union of Soviet Socialist Republics
In the opinion of the Soviet Delegation the following additions to, or
alterations of language should have been made in the Articles of
Agreement:
Article III, Section 8
"Any country represented at the United Nations Monetary and
Financial Conference whose home areas have suffered substantial
damage from enemy occupation or hostilities during the present war,
may reduce its initial gold payment to 75 percent of the amount it
would otherwise have to pay."
Article V, Section 8{j)
To reword this paragraph as follows:
"Charges and commissions shall be paid partly in gold and partly
in local currency of the member, or fully in gold—uniformly by all
members—independent of the amount of the monetary reserves of each
member."
Article V, Section 7
The principle, that so long as a member's holdings of gold and gold
convertible exchange exceed its quota, the Fund in selling foreign
exchange to that country shall require that one-half of the net sales of
such exchange during the Fund's financial year be paid for with gold,
should be maintained in conformity with Article III, Section 7(b) of
the Joint Statement by Experts on the Establishment of an International Monetary Fund of the United and Associated Nations.
Article XIII, Section #(&)
After the words "in the depositories designated by the remaining
four members" to add the words: "in each of the four remaining countries having the largest quotas, gold shall be held in the amount not less
than the amount of their respective gold contributions."
STATEMENTS OF CERTAIN DELEGATIONS
119
Article XIX, (i) (j)
Not to include in the term "current transactions" the "remittances
for family living expenses", having in view that the Fund may upon
the agreement with the members concerned, determine whether certain
specific transactions of such kind are to be regarded as current transactions or capital transactions.
Article XIX, (a) and (e)
Because of the centralization in the Union of Soviet Socialist^Republics of banking operations concerned with international transactions,
as a rule, in the Central Bank—the State Bank of the Union of Soviet
Socialist Republics, which is performing the functions of financing
foreign trade, the Fund in calculating the net foreign exchange holdings
of the Union of Soviet Socialist Republics shall take into account the
necessity for the State Bank to maintain working exchange balances
abroad.
Statement by the Delegation of the United Kingdom
Article XIII, Section 1
In the opinion of the British Government the location of headquarters of the Fund ought not to be considered without reference to
the location of other international bodies which will be established.
The same observations apply equally to the location of the projected
Bank for Reconstruction and Development. The British Government may therefore find it necessary at some later date to ask that all
such interrelated questions should be considered as a matter for decision between Governments rather than in a technical conference.
STATEMENTS OF CERTAIN DELEGATIONS
CONCERNING
THE ARTICLES OF AGREEMENT OF THE INTERNATIONAL
BANK FOR RECONSTRUCTION AND DEVELOPMENT
Statement by the Delegation of the United Kingdom
Article XIII, Section 1
In the opinion of the British Government the location of headquarters of the Fund ought not to be considered without reference to
the location of other international bodies which will be established.
The same observations apply equally to the location of the projected
Bank for Reconstruction and Development. The British Government may therefore find it Necessary at some later date to ask that
all such interrelated questions should be considered as a matter for
decision between Governments rather than in a technical conference.
Statement by the Delegation of the Union of Soviet Socialist Republics
Article I (iv)
This section should be deleted.
Article III, Section l(b)
After the words "and expediting the completion of such restoration
and reconstruction" the following words should be added: "and shall
establish favorable interest and commission rates for such loans."
Article V, Section ll(b)
The word "initially" should be deleted from the last clause of the
second sentence.
120
OFFICERS OF THE CONFERENCE *
President of the Conference
Henry Morgenthau, Jr., Secretary of the Treasury; Chairman of
the Delegation of the United States of America
Vice Presidents of the Conference
M. S. Stepanov, Deputy People's Commissar of Foreign Trade;
Chairman of the Delegation of the Union of Soviet Socialist
Republics
Arthur de Souza Costa, Minister of Finance; Chairman of the
Delegation of Brazil
Camille Gutt, Minister of Finance and Economic Affairs; Chairman of the Delegation of Belgium
Leslie G. Melville, Economic Adviser to the Commonwealth
Bank of Australia; Chairman of the Delegation of Australia
Secretary General
Warren Kelchner, Chief, Division of International Conferences,
Department of State
Technical Secretary General
Frank Coe, Assistant Administrator, Foreign Economic Administration
Assistant Secretary General
Philip C. Jessup, Professor of International Law, Columbia
University
Secretaries and Assistant Secretaries of Technical Commissions and
Committees
H. J. Bittermann, Treasury Department
Karl Bopp, Federal Reserve Board
Alice Bourneuf, Federal Reserve Board
William Adams Brown, Jr., Department of State
Lauren Casaday, Treasury Department
Eleanor Lansing Dulles, Department of State
Charles H. Dyson, Colonel, United States Army, War Department
Mordecai Ezekiel, Department of Agriculture
John Fuqua, Department of State
1
For officers of Commissions and Committees, see p. 19.
121
122
MONETARY AND FINANCIAL CONFERENCE
Secretaries and Assistant Secretaries of Technical Commissions and
Committees—Continued.
Raymond Mikesell, Treasury Department
Ruth Russell, Department of State
Orvis Schmidt, Treasury Department
Arthur Smithies, Bureau of the Budget
Leroy Stinebower, Department of State
Janet Sundelson, Treasury Department
William L. Ullmann, Captain, United States Army, War Department
Arthur Upgren, Federal Reserve Bank
J. P. Young, Department of State
Chief Press Relations Officer
Michael J. McDermott, Special Assistant to the Secretary of
State
Assistant Press Relations Officers
Harold R. Beckley, Superintendent, Senate Press Gallery
George H. Coffelt, Treasury Department
John C. Pool, Department of State
Executive Secretary
Clarke L. Willard, Assistant Chief, Division of International
Conferences; Department of State
Liaison Secretaries
Elbridge Durbrow, Foreign Service Officer, Department of State
James H. Wright, Foreign Service Officer, Department of State
Special Assistants to the Secretary General
Edward G. Miller, Jr., Adviser, Liberated Areas Division,
Department of State
Ivan White, Foreign Service Officer, Department of State
Administrative Secretary
Lyle L. Schmitter, Department of State
Assistant Administrative Secretary
P. Henry Mueller, Department of State
Chief of the Interpreting and Translating Bureau
Guillenno Suro, Acting Chief, Central Translating Division,
Department of State
Secretary for Transportation and Special Services
M. Hamilton Osborne, Department of State
Editor of the "Journal"
Frances Armbruster, Department of State
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