Abstract

The Fund has concluded that it has implied powers to sell a portion of its gold in order to invest the proceeds, on certain conditions, in order to earn income for certain limited purposes.27 The proceeds have been invested in U. S. Government securities ranging from Treasury bills having not more than 93 days to run to 15-month Treasury securities. One of the problems that had to be resolved before the investment program was undertaken was whether the gold value of the securities would be maintained under Article IV, Section 8. Subsections (b), (c), and (d) all refer to the Fund’s currency holdings. However, subsection (a) refers to the Fund’s “assets.” It had already been decided in connection with the application of Article IV, Section 8, to fluctuating currencies that subsection (a) had independent substantive effect and was not merely a preamble adding nothing to the rest of Section 8. It had also been decided in connection with the same issue that “assets” included currency holdings. Therefore, the further problem was whether the word went beyond currency holdings and would embrace the securities in which the Fund would invest. It was of no assistance in solving this problem that the gold value of the non-negotiable, non-interest bearing securities that members may substitute for currency under Article III, Section 5,28 must be maintained in gold value, because Article XIX(f)29 provides expressly that these securities are to be regarded as currency holdings.