Full text of Statements and Speeches of Marriner S. Eccles : Federal Reserve Policy with Respect to the Proposed International Monetary Fund and Bank for Reconstruction and Development

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Federal hesarve Policy with hespect to the
Proposed International Monetary *und and Bank
____ for Reconstruction and Development._____
(Bretton woods - June «¿8, 1945.)

Statement by Chairman Eccless
Before I was designated as a member of the American delegation
the Boc-rd of Governors had taken no position with respect to the tentative
plans which were then in the course oi feeing drafted as a basis for estab­
lishment of the proposed international Monetary fund and International Bank
for Reconstruction and Development. Memoers of the staff, however* had
informally given their assistance arid advice to the members of the Treasury
staff who were engaged in this work and had kept the Board informed. In
addition, the proposed plans had been the subject of a considerable amount
of discussion, both inside and outside the Federal neserve Bystem, and it
was recognised that there had been differences of opinion among the officers
and directors of the Federal heserve banks. From time to time the *>oard
received communications from the Federal ¿'mbserve Banks on the subject and
the Board*a conference with representatives oi the Presidents’ and Chair­
men’s conferences and others on June 6, 1944» brought out very clearly some
of these different views. Following this conference, the Board in­
vited such further advice as the officers and directors of the *>ar*ks might
wish to submit.
Towards the last of May I was advised informally by the ¿secretary
of the Treasury that the President wished me to serve as a member of the
American Delegation, which would attend arid participate in the United Nations
Monetary and Financial Conference to be held at Brotton feoods, beginning
July 1, for the purpose of considering the proposed plcois. It was mad©
clear, as I would naturally assume anyhow, that the President's request was
addressed to me in my official capacity as Chairman of the Board of Governors
of the Federal Reserve bystem in recognition of the Board’s responsibility
as an agency of Congress in the field of national credit and monetary policy.
Therefore, I took the matter up with the Board ¿aid it was pointed out in
the discussion that the only reason I could present for not accepting the
appointment would be a position on the part of the Bo^rd that it w*s opposed
to the plan and did not want to be represented at the conference. It was
felt, however, that this would be very difficult to explain <*nd that it would
indicate a fundamental cleavage between the System and the Treasury.
Moreover, it would very likely result in the complete exclusion of the Board
thereafter from any participation in the development of the plan or in its
workings if it were put into effect. After careful consideration, the Board
expressed the opinion that the adoption of a plan within the framework of the
joint statement would be desirable and that 1 should attend the conference
as a representative of the Board of Governors, at the conclusion of the dis­
cussion the Board approved my attendance at the international conference at
Bretton Woods as a member of the American Delegation representing the Board
of Governors, accordingly, I accepted the invitation and subsequently re­
ceived from the Secretary of State formal advice of the President’s approval,




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together witH a copy of the President’s instructions to Secretary Morgenthau,
as Chairman of the Delegation, which contained, among other things, the
following statement*
’'The responsibility which you and the other delegates
of the American Delegation will undertake is the responsi­
bility of demonstrating to the world that international
postwar cooperation is possible, I am. confident that you
*111 do your best to accomplish the purposes of the con­
ference.”
In these circumstances, additions were made to the members of the
Board’s staff who had been assisting the Treasury and they participated in
the drafting v.ork thc.t was done at Atlantic ^ity in preparation for the con­
ference, together »ith several officers of the Federal Reserve Banks, and a
substantial number of the »embers of the Board’s staff and officers of the
Federal Reserve Banks participated as technicians in the work of the confer­
ence at Bretton ftoods. Governor SzymczaK accompanied me to the conference
and I participated in the deliberations of the American Delegation which,
together *ith the delegations representing all the other nations at the
conference, unanimously approved the plans as finally evolved for the Inter­
national Monetary Fund and International Bank for Reconstruction and
Development.
At the conclusion of the conference the President of the United
States sent a message to the representatives of the 44 nations conveying
congratulations on the successful completion of their difficult task and
containing the following statement!
’’They have prepared two further founaation stones for
the structure of lasting peace and security. They have shown
that the people of the United Nations can work together to
plan the peace as well as fight the war.*1
In the light of these circumstances it seerne clear to rae that the
Bo^rd is committed to the principle involved in these plans and to cooperate
in helping to carry them out. Moreover, it is evident that if they should
be put into effect, the Federal Reserve BanKS, as the central banking system
of the country, would be called upon to play some part. I may add that in

a letter under date of August 5, 1944, which was received from Secretary
Morgenthau, the following statement appears:




BV*e still have before us the task of bringing to the
attention of the people and of Congress the importance of
the work done at Bratton woods and the necessity of parti­
cipation by the United States in the International Monetary
Fund and the International Bank for Reconstruction and
Development.

“There is stiJLl much to be done before the Conference
will have achieved its ultimate purpose, fte need the help
of ever/ member of the United £t<-tes delegation in carrying
the program of the Conference to a successful conclusion.11
For these reasons it seems to ine that the ¿to^rd has accepted a
responsibility as the Governmental agency at the head of the Federal Re­
serve System for cooperating in the further development of this program and
while the exchange of views and information among the Banks and the board
should continue so tnat they may be fully advised, the public expression
of an adverse attitude, if any, on the p^rt of any of the Federal Reserve
Banks would be likely to impair the usefulness of the System in its rela­
tions to the problems grovsing out of the conference.