The CHAIRMAN. How have the countries that have joined the fund made up their quotas in terms of the kind of stuff that they have put up?

As I recall it, there was a little leeway. You could put up so much gold or you could do something else. What was that?

Mr. WHITE. Some gold and the remainder local currency. In fact, they could go further than that, for the larger part of their local currency, they may substitute their government obligations.

The CHAIRMAN. Was there not a minimum of gold?

Mr. WHITE. There was.

The CHAIRMAN. What was that minimum?

Mr. WHITE. That minimum was 25 percent of their quota.
The CHAIRMAN. Yes.

Mr. WHITE. Or 10 percent of their net gold holdings and dollar exchange.

The CHAIRMAN. Whichever was less?

Mr. WHITE. Whichever was less.

The CHAIRMAN. Yes. How have they met their quotas?

Mr. WHITE. I have a list here. If you are interested in the particular countries, and I can give you the aggregate.

The CHAIRMAN. I would like now to have the aggregate, but if you can let me have the list, the committee will then determine whether it should be put in as an annexure to the hearings. It might be interesting to have it in the hearings.

Mr. WHITE. Then, with your permission, I would like to ascertain whether these can be made available.

They will be made available in the future with a lag.

The CHAIRMAN. Give me the figures on the aggregate basis.

Mr. WHITE. I have got the figures but the totals are not here, and I think we can get those in a moment.

The CHAIRMAN. All right.

Mr. WHITE. Many of the countries, of course, took the 25 percent, as did the United States, because it was less than the 10 percent of our gold holdings, and many took the 10 percent because the 10 percent was the smaller.

England, for example, took the 10 percent. The figures are not final, because there are a number of items on which there is further study necessary.

The CHAIRMAN. What loans have the banks made?

Mr. WHITE. None, sir, to my knowledge.

The CHAIRMAN. None?

Mr. WHITE. They are in the process of considering a number of them, and I am informed that the progress of several of them is far along.

The CHAIRMAN. Has the bank guaranteed any loans?

Mr. WHITE. No, sir.

The CHAIRMAN. Has the bank sold any of its securities?

Mr. WHITE. No, sir; it is now in the process of preparing a selling

program.

The CHAIRMAN. We had quite a little discussion, as you will remember, at the time when we were considering the fund and the bank as to what would be an acceptable term limit for cyclical movement. Mr. WHITE. Yes; I remember that, Senator.

The CHAIRMAN. As I recall it, we were instructed to take a certain position with reference to the type of loans which the banks should make.

Mr. WHITE. Yes, sir.

The CHAIRMAN. Can you make that a little sharper for the purpose of the record?

Just what those instructions were.

Mr. WHITE. Yes; I would be glad to. You mean the instructions that the United States Congress asked the Governor of the fund, the United States Governor of the fund to follow?

The CHAIRMAN. Yes; he was to try to get a general consent to a definite policy.

Mr. WHITE. Yes. That was the understanding of the other members, because we were able to assure you only as to what was our own understanding.

The CHAIRMAN. So, would you mind stating the two questions involved, and then tell us what, if anything, has come of any effort that was made to secure agreement?

Mr. WHITE. I will insert the exact words, which I have here, of the request

The CHAIRMAN. What is the capital of the fund?

Mr. WHITE. About $8,000,000,000 plus. There are some new members coming in.

The CHAIRMAN. Our participation was how much?

Mr. WHITE. $2,750,000,000.

The CHAIRMAN. What was the capital of the bank?

Mr. WHITE. About the same, and I think our participation was a little larger. I think it is $3,300,000,000.

The CHAIRMAN. Doctor, unless you have some further comments, we will close the session this morning, and I want to thank you for the very instructive information which you have given us.

Mr. WHITE. Thank you.

The CHAIRMAN. Thank you very much.

We will recess without date.

(Dr. White subsequently submitted the following memorandum :)

Hon. EUGENE D. MILLIKIN,
Committee on Finance,

INTERNATIONAL MONETARY FUND,
Washington 6, D. C., April 10, 1947.

United States Senate, Washington, D. C.

DEAR SENATOR: Below is the summary information with respect to England's trade and the proportion of gold to local currency in the fund that you requested. At the time of the United Kingdom-United States financial agreement the United Kingdom stated that they needed to increase the volume of their exports by 75 percent over their 1938 exports to enable the United Kingdom to pay for the necessary imports out of current earnings of foreign exchange.

Last year total United Kingdom exports (including reexports) were £911,000,000 sterling as against £470,000,000 for the year 1938. By January of this year exports had increased still more, reaching the annual rate of £1,100 million sterling. In February, however, trade dropped, due partly to the fuel crisis and partly to the short month.

In terms of trade volume, however, the January figure was about 12 percent greater than it was for the comparable period in 1938. That was the figure also that you cited.

The United Kingdom's target for 1947 has been announced as being 40 percent greater than 1938 in terms of volume.

The total amount of gold and dollars held by the fund is approximately $3,375,000,000, and of other currencies about $3,125,000,000. This total is less than total quotas of members of the fund ($7,530,000,000) largely because members are not required to pay in their full subscriptions until they are ready to do business with the fund. Before they do business with the fund they must agree with it on par values for their currencies; and such agreement has not yet been reached with all members.

Sincerely,

(Thereupon, at 12: 18 p. m. the hearing was adjourned.)

H. D. WHITE.

APPENDIX

DRAFT OF CHARTER FOR AN INTERNATIONAL TRADE ORGANIZATION PREPARED BY SUBCOMMITTEE OF THE PREPARATORY COMMITTEE MEETING AT LAKE SUCCESS, N. Y., JANUARY-FEBRUARY, 1947

1. At its First Session' held in London in October and November 1946, the Preparatory Committee adopted a resolution establishing a Drafting Committee. The resolution, after stating that it was desirable that further drafting be done on the basis of the work carried out at the First Session of the Preparatory Committee and before the commencement of the Second Session, directed the Drafting Committee, composed of representatives of the members of the Preparatory Committee, to meet in New York from 20 January 1947 and to complete its preparation of a report for consideration at the Second Session no later than 28 February 1947. It was resolved that it would be the function of the Drafting Committee to prepare a Draft Charter or Articles of Agreement based upon the Report and other documents of the First Session, editing for clarity and consistency the portions of the text on which the Preparatory Committee came to a substantial identity of views, preparing alternative drafts of those portions on which there remained a division of general views and preparing suggested drafts covering such uncompleted portions as were referred to it by the Preparatory Committee, together with such explanatory notes and commmentaries as the Drafting Committee might consider desirable and useful.

2

2. The Drafting Committee was convened at the temporary headquarters of the United Nations, Lake Success, New York, on 20 January 1947 and concluded its work on 25 February 1947, having held a total of twenty-nine meetings. Representatives from all the members of the Preparatory Committee attended, with the exception of the Union of Soviet Socialist Republics which stated that it was not in a position to take part in the work of the Drafting Committee. Colombia and Mexico sent representatives to observe the proceedings, in which the representatives of the Food and Agriculture Organization, the International Bank for Reconstruction and Development, the International Labour Organization and the International Monetary Fund actively participated.

3. The Drafting Committee availed itself of the Rules of Procedure of the First Session and worked according to the following plan. An examination of the text of each Article of the Charter drafted at the First Session was first made in plenary session together with any amendments introduced by delegates or Suggested by the Secretariat. During this examination a new text of each Article which had been amended was established and reproduced by the Secre

Whenever the words First Session or Second Session are mentioned the First or Second Session of the Preparatory Committee is understood.

Whenever the word "Charter" standing alone is used in this Report, it refers to the Charter as drafted by the Drafting Committee; when other texts or the Charter of the United Nations are referred to, the full title is given.

By retaining the title of "Charter" the Drafting Committee did not intend to indicate that it approved or disapproved of the use of this term. This is a point which may need to

be considered at a later stage.

tariat for second reading a few days later. After each Article had been examined a second time in plenary session, the text then agreed was referred to a Legal Drafting Sub-Committee. Finally all texts were again, examined when the draft report was approved.

4. The procedure outlined above was followed with most of the Articles of the Charter. However, to deal with Articles for which no detailed and generally agreed text had been established at the First Session, the Drafting Committee decided to constitute at an early stage of its work sub-committees to prepare texts for examination by the Drafting Committee at a later stage. Thus, a Technical Sub-Committee to prepare drafts of Articles 15 to 23 inclusive and Article 37 was set up and an Administrative Sub-Committee which worked upon Articles 1, 2, 64, 68 and 72 to 77 inclusive. Apart from preparing a draft Chapter, the Drafting Committee was charged with providing a more detailed draft of the General Ageement on Tariffs and Trade, based upon the outline drafted at the First Session. For this purpose a Sub-Committee on Tariff Procedures was established. Although the sub-committees were of restricted membership, all delegates to the Drafting Committee were accorded the right to participate in the proceedings of the sub-committees at any time and frequently availed themselves of this facility. In addition, in a number of cases, the Drafting Committee established ad hoc sub-committees to deal with specific points.

5. In view of the technical and detailed nature of the work performed by the Drafting Committee, all of its meetings were held in private. The public, however, was kept informed of the work being done by means of press releases arranged by the Secretariat, which gave a press conference at the close of the meeting. It was agreed that the report of the Drafting Committee should be classified as a restricted document, not for publication until such time as the Preparatory Committee itself might decide otherwise.

DRAFT CHARTER *

CHAPTER I. PURPOSES

ARTICLE 1. GENERAL PURPOSES

In pursuance of the determination of the United Nations to create conditions of economic and social progress essential to world peace, the States party to this Charter hereby establish an International Trade Organization through which they will work for the fulfilment of the purposes set out hereunder: 1. To promote national and international action:

(a) Designed to realize the objectives set forth in the Charter of the United Nations and particularly in Article 55 (a) thereof, namely, higher standards of living, full employment, and conditions of economic and social progress and development;

(b) For the expansion of the production, exchange and consumption of goods, for the achievement and maintenance in all countries of high and steadily rising levels of effective demand and real income, for the development of the economic resources of the world, and for the reduction of tariffs and other trade barriers and the elimination of all forms of discriminatory treatment in international commerce;

(c) To avoid excessive fluctuations in world trade and contribute to a balanced and expanding world economy.

2. To further the enjoyment by all Member countries, on equal terms, of access to the markets, products and productive facilities which are needed for their economic prosperity and development.

3. To encourage and assist the industrial and general economic development of Member countries, particularly of those still in the early stages of industrial development.

4. To facilitate the solution of problems in the field of international trade, employment and economic development through consultation and collaboration among Members.

5. To enable Members, by increasing the opportunities for their trade and economic development on a mutually advantageous basis, to avoid recourse to measures which disrupt world commerce, reduce productive employment or retard economic progress.

*Square brackets enclose wording adoption of which is left for future consideration.