Article VIII, Section 7; Article XXII.

Proposed Second Amendment to the Articles of Agreement of the International Monetary Fund: A Report by the Executive Directors to the Board of Governors (Washington, March 1976), Part I (c).

Article XVIII, Section 1(a).

Joseph Gold, Special Drawing Rights: The Role of Language, IMF Pamphlet Series, No. 15 (Washington, 1971). (Hereinafter referred to as Gold, SDRs: Role of Language.)

Article XV, Section 1.

Compare, for example, Article XXV, Section 3(a) of the First Amendment with Article XIX, Section 3(a) of the Second Amendment.

Margaret Garritsen de Vries, The International Monetary Fund, 1966-1971: The System Under Stress (Washington, 1976), Vol. II, pp. 254-55.

International Monetary Fund, International Monetary Reform: Documents of the Committee of Twenty (Washington, 1974), pp. 15, 43, 162-79, and 183-207. (Hereinafter referred to as Documents of Committee of Twenty.)

International Financial News Survey, Vol. 20 (1968), p. 89; Gold, SDRs: Role of Language, p. 23.

Article XVIII, Section 1(b).

Communiqué of the Interim Committee of the Board of Governors on the International Monetary System, September 24, 1978, IMF Survey, Vol. 7 (1978), pp. 306-309.

Selected Decisions of the International Monetary Fund and Selected Documents, Supplement to Eighth Issue (Washington, 1978), pp. 103-112. (Hereinafter referred to as Selected Decisions, Supp. to 8th (1978).)

Article XXX(i).

Article XIX, Section 2(c).

Article XXX(i).

Article XIX, Section 2(b).

Article XVII, Section 3.

Article XIX, Section 7(a); Rules and Regulations, Rule 0-2, By-Laws, Rules and Regulations, Thirty-Sixth Issue (Washington, August 1, 1979), pp. 53-54. (Hereinafter referred to as By-Laws, Rules and Regulations.) See also Joseph Gold, Use, Conversion, and Exchange of Currency Under the Second Amendment of the Fund’s Articles, IMF Pamphlet Series, No. 23 (Washington, 1978), pp. 49-53 and 90-91.

Note also David J. Kuchenbecker, “Agency-Level Executive Agreements in U.S. Treaty Practice,” Columbia Journal of Transnational Law, Vol. 18 (1979), pp. 1-77, at p. 77: “Agency-level executive agreements have emerged as the new generation of international agreement to deal with the novel issues of U.S. treaty practice created by greater global interdependence. The agreements’ use has increased dramatically in past years and now even those only by nondiplomatic officials are recognized as legal instruments fully equivalent to treaties and other executive agreements under domestic and international law.”

Article III, Section 3(a); Article V, Section 8(e); Article XVI, Section 2; Article XVIII, Section 2; Article XX, Sections 2, 4, and 5; Article XXIV, Sections 2(b), 3, and 6(i); Article XXV(c); Schedule G, paragraph l(a)(iv); Schedule I, paragraphs 5 and 7.

Article XIX, Section 2(b).

Article V, Section 6.

Article XIX, Section 1(b).

Article XXX(i).

Article XIX, Section 2(c).

Article VII, Section 1.

Article XVII, Section 3.

Selected Decisions, Supp. to 8th (1978), p.55.

Documents of Committee of Twenty, p. 123: “36. One member of the Group proposed a modified SDR intervention system which might come into effect without the SDR being held by private markets. Under this proposal, margins would be set at 2¼ per cent on either side of parity with the SDR. Central banks would publish dealing rates in SDRs against their own currencies at 2¼ per cent on either side of parity and would declare their willingness to deal at these rates for transfers among themselves. They would also be prepared to deal at these rates in SDRs against their own currencies with commercial banks, but only on condition that the SDRs in question were to be transferred directly to or from another central bank: in this way commercial banks would intermediate in SDR transactions between central banks without themselves holding SDRs. It was suggested that this last provision would, at least after a period of adaptation, promote the market arbitrage necessary to keep currency exchange rates in line, i.e., to maintain rates within 4½ per cent on either side of cross parity for any pair of currencies participating in the system. Since this arbitrage would only arise when the published dealing rates had been exceeded and there was consequently a potential profit for the intermediating commercial bank, it was suggested that these rates might be set at an appropriate distance inside the 2¼ per cent SDR margins.”

Article XIX, Section 6.

Decision No. 5936-(78/168) S, October 25, 1978, effective December 11, 1978, Selected Decisions, Supp. to 8th (1978), p. 81.

Article XX, Sections 1, 2, and 3. Charges are paid by a participant on any negative balance (see Article XVIII, Section 2(f)) and on unpaid charges as well as on its net cumulative allocation.

Article V, Section 9.

Article V, Section 8.

By-Laws, Rules and Regulations, Rule T-l(c):

“The combined market interest rate shall be the average of the daily interest rates for the obligations, combined in accordance with the weights listed below, for the six-week period ending on the fifteenth day of the last month before the calendar quarter for which the rate of interest is determined:

	Per cent
Market yields for three-month U.S. Treasury bills	49
Three-month interbank deposit rate in Germany	18
Market yields for three-month U.K. Treasury bills	11
Three-month interbank money rate against private paper in France	11
Call money market rate (unconditional) in Japan	11
	100”

View Table

	Per cent
Market yields for three-month U.S. Treasury bills	49
Three-month interbank deposit rate in Germany	18
Market yields for three-month U.K. Treasury bills	11
Three-month interbank money rate against private paper in France	11
Call money market rate (unconditional) in Japan	11
	100”

Article V, Section 9(a).

Decision No. 5933-(78/168) S, October 25, 1978, effective December 11, 1978:

“Rule T-l(b) shall be amended as follows with effect from the date of the first allocation of special drawing rights in the third basic period:

“Unless the Executive Board decides otherwise, the rate of interest on holdings of special drawing rights for each calendar quarter shall be four fifths of the combined market interest rate as determined in (c) below, provided that the rate shall be rounded to the nearest ¼ of 1 per cent.” Annual Report of the Executive Board for the Financial Year Ended April 30, 1979 (Washington, 1979), p. 128. (Hereinafter the Annual Reports are referred to as Annual Report, 19—.)

Decision No. 5934-(78/168), October 25, 1978, effective December 11, 1978, Annual Report, 1979, p. 128-29.

Joseph Gold, SDRs, Sold, and Currencies: Third Survey of New Legal Developments, IMF Pamphlet Series, No. 26 (Washington, 1979), pp. 8-10. (Hereinafter referred to as Gold, SDRs, Gold, and Currencies, Pamphlet 26.)

Ibid., pp. 75-77.

Joseph Gold, Floating Currencies, SDRs, and Gold: Further Legal Developments, IMF Pamphlet Series, No. 22 (Washington, 1977), pp. 46-47. (Hereinafter referred to as Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22.)

Nordiska Investeringsbanken (Nordic Investment Bank), Placing Memorandum: SDR 20,000,000, 9 per cent. Notes due 1984, March 2, 1979, p. 11.

Firma Johann Lührs v. Hauptzollamt Hamburg-Jonas, Case 78/77 [1978] E.C.R. 169.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 11-15.

Ibid., pp. 23-24. Note also that an index of effective exchange rates by averaging the exchange value of a currency in terms of other currencies is not the same as an indicator of a country’s price competitiveness. For a discussion of the two, see Peter Hooper and John Morton, “Summary Measures of the Dollar’s Foreign Exchange Value,” Federal Reserve Bulletin, Vol. 64 (October 1978), pp. 783-89.

UN Commission on International Trade Law, Doc. A/CN.9/156, June 2, 1978. See also Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 11-15.

J.J. Polak, Valuation and Rate of Interest of the SDR, IMF Pamphlet Series, No. 18 (Washington, 1974), p. 12.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 11-15 and 23-24.

UN General Assembly, Report of the Committee on Contributions, Official Records: 33rd Sess., Supp. No. 11(A/33/11), 1978.

Ibid., paragraph 26.

Ibid., paragraph 27. See, in addition, paragraphs 28 and 29:

“28. The use of the special drawing right in place of dollars does tend to mitigate the effects on the scale of sharp rises or decreases in national income owing more to a sudden appreciation or depreciation of a national currency than to actual variations in the volume of production. However, the Committee found that this result is achieved in a way which does not differ markedly from or appear notably superior to the lengthening of the base period.

“29. The Committee also noted that the use of any basket of currencies for national income comparisons necessarily implied resorting to exchange rates to establish conversion factors. Any such device would therefore entail most of the difficulties and limitations outlined in paragraphs 10 to 12 above.”

Ibid., paragraph 42.

Ibid., paragraph 45.

Stephen A. Silard, “Emergence of SDR as a Standard of Value Is Transforming International Law of Money,” IMF Survey, Vol. 8 (1979), p. 159. See also Walter O. Habermeier, “The SDR as an International Unit of Account,” Finance & Development, Vol. 16, No. 1 (1979), pp. 11-13 (hereinafter referred to as Habermeier, “SDR as an International Unit of Account”). For a different view, see K. Alec Chrystal, International Money and the Future of the SDR, Essays in International Finance, No. 128, International Finance Section, Princeton University (June 1978), pp. 21-22.

Article VIII, Section 7; Article XXII.

Report by the Boards of Directors of the African Development Bank Group covering the period from 1st January to 31st December 1978 (Abidjan, 1979), p. 55.

Ibid., p. 92.

Instrument to Establish the Trust Fund, Section III, paragraph 4(a), Selected Decisions of the International Monetary Fund and Selected Documents, Eighth Issue (Washington, May 10, 1976), p. 193. (Hereinafter referred to as Selected Decisions, 8th (1976).)

Annual Report, 1978, pp. 77 and 132-33; Annual Report, 1979, p. 87.

Decision No. 5812-(78/90) TR, June 16, 1978, Annual Report, 1978, pp. 132-33. See also Appendix E.

Bank for International Settlements, Forty-Ninth Annual Report, 1st April 1978-31st March 1979 (Basle, 1979), p. 166.

Ibid., p. 165.

Article II, Section 2(a).

World Bank, Annual Report, 1978, p. 148. See also World Bank, Annual Report, 1979, p. 162. For the fiscal year ended June 30, 1979, the value of the capital stock is expressed on the basis of $1.29110 per SDR as computed by the Fund (World Bank, Annual Report, 1979, p. 119).

31 U.S.C. 449.

World Bank, Annual Report, 1978, p. 149. Note B further states that: “Prior to April 1, 1978, where market rates of exchange were not related to par values or central rates, as in the cases of a majority of members, and where there were differences between market rates of exchange and the rates at which capital subscriptions of members had been paid or were payable such differences were shown as Translation Adjustments on Capital Subscriptions under the heading Other Assets. These amounts represented notional receivables and payables which would become maintenance of value obligations if and when the provisions of Article II, Section 9 of the Articles of Agreement or the resolution of the Executive Directors described above could be applied. According to the legal opinion of the Bank’s General Counsel referred to in this Note B under Capital Stock, maintenance of value pursuant to Article II, Section 9 of the Articles of Agreement would be determined on the basis of the SDR, and is treated in the financial statements on this basis. Since the Bank is still considering the implications of the Second Amendment and in view of the questions referred to above, the timing of any establishment and settlement of these notional maintenance of value items $372,600,000 receivable and $115,811,000 payable at June 30, 1978 is uncertain. Accordingly, they are included in Other Assets, and Liabilities as notional maintenance of value obligations. … “Effect of Valuation in terms of the SDR: Expressing the value of the Bank’s capital stock in terms of the SDR rather than in terms of $1.20635 does not have a material effect on the financial position or results of the operations of the Bank. If the value of the capital stock were expressed in terms of $1.20635, the subscribed capital would have been $32,160,929,000 instead of $33,045,498,000, the uncalled portion of subscriptions $28,944,836,000 instead of $29,740,948,000, the paid-in capital $3,216,093,000 instead of $3,304,550,000 and the maintenance of value obligations would have been $181,104,000 instead of $256,179,000.” (Pp. 149-50.)

ICSID Additional Facility, Document ICSID/11 (Washington, June 1979), Schedule A, Administrative and Financial Rules (Additional Facility), Chapter II, Articles 4, 5, 6, 8, and 9 (pp. 10-11).

See World Bank, Annual Report, 1979, p. 177.

Article II, Section 2(a).

Asian Development Bank, Annual Report, 1978 (Manila, 1979), p. 129: “The Bank is examining the implications of this change on the valuation of its capital stock but has not made a decision on the matter. Pending such a decision, the Capital Set-Aside has been valued for purposes of the accompanying 1978 financial statements in terms of the Special Drawing Right (SDR), at the value in current United States dollars as computed by the IMF. As of 31 December 1978, the SDR was valued at $1.30279. On this basis, Capital Set-Aside amounted to $62,025,000. The substitution of the SDR rather than $1.20635 in current United States dollars for the 1966 dollar does not have a material effect on the financial position or results of operations of the Fund. If the capital stock as of 31 December 1978 had been valued in terms of $12,063.50 per share Capital Set-Aside would have been $57,434,000.”

Ibid., p. 105:

“The Bank is considering a proposal that its capital stock be redefined in terms of the SDR. A member government has raised the question whether the substitution of a new unit of value, insofar as it would give rise to any new obligations with respect to maintenance of value and capital stock subscription payments, should be made only by amendment of the Articles. This member has also raised questions as to the appropriateness of substituting a unit of value other than the SDR, the desirability of retaining the principle of maintenance of value, and the form in which maintenance of value should be applied.

“It is the opinion of the General Counsel of the Bank that the SDR is the successor in the international monetary system to the gold-based dollar, and that pending the exercise by the appropriate authorities of the Bank of their statutory powers under Chapter IX of the Articles, references in the Articles to the 1966 dollar should be read as referring to the SDR as defined from time to time by the IMF. In view of this, and pending consideration and action on the issues referred to in the preceding paragraph, the Bank has for purposes of these financial statements expressed the value of its capital stock in terms of the SDR, on the basis that each share has the value of SDR 10,000. For purposes of these financial statements, it has also measured the mutual obligations of each member and of the Bank with respect to maintenance of value of currency holdings by that standard. However, the appropriate authorities of the Bank could decide that the value of each share should be fixed at $12,063.50, on the basis of a substitution of 1.20635 current United States dollars for each 1966 dollar.”

Ibid., p. 105:

“The substitution of the SDR rather than $1.20635 in current United States dollars for the 1966 dollar does not have a material effect on the financial position or results of operations of the Bank. If the capital stock as of 31 December 1978 had been valued in terms of $12,063.50 per share, the ‘callable’ capital subscribed would have been $6,469,414,000 instead of $6,986,603,000, the ‘paid-in’ capital subscribed would have been $1,624,302,000 instead of $1,754,154,000, the total subscribed capital would have been $8,093,716,000 instead of $8,740,757,000, and maintenance of value obligations would have been $39,188,000 payable to members instead of $45,443,000 receivable from members.”

Ibid., p. 106. Note I is headed “Notional Amounts Required to Maintain Value of Currency Holdings” and reads as follows:

“Prior to 1 April 1978, the Bank implemented maintenance of value in respect of holdings of member currencies in terms of 1966 dollars, in accordance with the provisions of Article 25 of its Articles and relevant resolutions of the Board of Directors. Inasmuch as the valuation of the Bank’s capital stock and the basis for determining possible maintenance of value obligations after the effective date of the Second Amendment to the IMF Articles are still under consideration, notional amounts have been calculated provisionally as receivable from or payable to members in order to maintain the value of currency holdings in terms of the SDR. The timing of any establishment and settlement of such amounts is uncertain. The notional amounts as of 31 December 1978, consisting of receivables of $68,139,000 and payables of $21,923,000, represent (a) the increase of $84,631,000 in amounts required to maintain the value of currency holdings to the extent of matured capital subscriptions due to the increase in the value of the SDR in relation to the United States dollar, the Bank’s unit of account, offset by (b) the net increase of $38,415,000 in the value of such currency holdings in relation to the United States dollar during the period 1 April 1978 to 31 December 1978.”

Note G—Capital Stock, Inter-American Development Bank, Annual Report, 1978, p. 113.

IFAD, General Conditions Applicable to Loan and Guarantee Agreements, April 11, 1978, IFAD/9/Rev. 1, Article II, Section 2.01, item 27.

See Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 66-67.

IFAD, General Conditions Applicable to Loan and Guarantee Agreements (see n. 74), Article IV, Section 4.03(b).

Ibid., Article IV, Section 4.01.

Ibid., Article IV, Section 4.02.

Ibid., Article IV, Section 4.03(a).

Ibid., Article IV, Section 4.05.

Agreement Establishing the International Fund for Agricultural Development, Article 5, Section 2(b).

Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 38-39; Gold, SDRs, Gold, and Currencies, Pamphlet 26, p. 26.

On averaging, see Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 30-32.

Ibid.

See Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 24-26.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 22-24.

International Legal Materials, Vol. XI (1972), pp. 284-302.

Article 1, Section 4, of the Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, December 18, 1971, ibid., p. 285.

See Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 33-34.

See Joseph Gold, Floating Currencies, Gold, and SDRs, IMF Pamphlet Series, No. 19 (Washington, 1976), pp. 45-48 (hereinafter referred to as Gold, Floating Currencies, Gold, and SDRs, Pamphlet 19); Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 29-32.

Article 18, Section 3, of the Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, December 18, 1971, International Legal Materials, Vol. XI (1972), p. 294.

Regulation 2 of the Internal Regulations of the Assembly, Fund/A.2/4, February 28, 1979 (Assembly, 2d Sess., Agenda Item 7).

Article 4, Section 6, of the Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, December 18, 1971, International Legal Materials, Vol. XI (1972), pp. 284-302. A proposal had been made to increase the amount because of the experience of the Amoco Cadiz disaster and not because of changes in monetary values. J. Porter, “Compensation Fund Created to Aid Oil Pollution Victims,” Journal of Commerce, November 20, 1978, p. 1.

UNCTAD, Press Release, TAD/INF/1036, March 13, 1979.

UNCTAD, Trade and Development Board, Intergovernmental Preparatory Group on a Convention on International Multimodal Transport, Sixth Session, February 21, 1979, Report of the Working Group, TD/B/ AC.15(VI)/WG/L.l/Add.l, March 8, 1979, Article 18

Bernard Loveil, “Draft Multimodal Transport Convention in Final Form,” Journal of Commerce, March 15, 1979, p. 8.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 22-24.

Ibid., pp. 23-24.

Article III, Section 8.

Richard Lawrence, “Geneva Accords Hailed by Carter,” Journal of Commerce, April 13, 1979, p. 1:

“More important than the tariff reductions, said deputy U.S. trade negotiator Alan Wolff, are the international code and other non-tariff agreements reached at Geneva. A government procurement practices code, he said, probably represents the ‘biggest single new opportunity’ for U.S. exporters.

“By agreeing to new procurement rules, foreign governments will open about $20 billion a year in potential new business for American firms, he told reporters.”

See GATT, The Tokyo Round of Multilateral Trade Negotiations: Report by the Director-General of G A TT (Geneva, April 1979), pp. 75-82, 136-39, and 173-76.

Conrad J. Oort, “Capacité des banques à créer des instruments libellés en unités de compte (autres que les obligations)”in L’Utilisation d’Unités de Compte dans les Relations Economiques et Financières Internationales—Viabilité et Limites, Institut Universitaire International Luxembourg (1978), pp. 99-112. (Hereinafter this publication will be referred to as L’Utilisation d’Unités de Compte.)

Laurent N. Martin, “DTS, ECU, L’usage privé des cocktails de monnaies: de la théorie à la réalité, “Agence Économique & Financière, Edition spéciale du quotidien suisse (September 28, 1979), pp. 44-45. (Hereinafter referred to as Martin, “DTS, ECU, L’usage privé des cocktails de monnaies.”)

See Habermeier, “SDR as an International Unit of Account,” pp. 11-13.

Martin, “DTS, ECU, L’usage privé des cocktails de monnaies.” See also Carolyn E. Carter, “Maintenance of Value ‘Equal Protection’ for Small Savers: Foreign Currency Accounts Versus Basket Clause Accounts,” Business Lawyer, Vol. 34 (November 1978), pp. 233-55.

See, for example, Bank for International Settlements, Forty-Ninth Annual Report, 1st April 1978-31st March 1979 (Basle, 1979), pp. 168-69; and Habermeier, “SDR as an International Unit of Account.”

See n. 103, p. 109. See also André George, “L’utilisation d’unités de compte dans les émissions obligataires et les prêts à long-terme,” in L’Utilisation d’Unités de Compte, pp. 115-48.

Instrument to Establish the Trust Fund, Section III, paragraph 4(a), Selected Decisions, 8th (1976), p. 193.

Decision No. 5972-(78/189), December 4, 1978, Selected Decisions, Supp. to 8th (1978), p. 85 (reproduced in Appendix E).

Decision No. 5973-(78/189) TR, December 4, 1978, ibid., pp. 87-88 (reproduced in Appendix E).

Gold, Floating Currencies, Gold, and SDRs, Pamphlet 19, pp. 58-62.

The Bank was established in 1967 pursuant to a proposal by the Swedish Government that was approved by Parliament. The Bank’s primary purpose is to assist in the financing of industrial and commercial projects in Sweden that encourage economic rationalization and structural adaptation and development by means of medium-term and long-term loans. The Bank also participates in the financing of Swedish exports. All of the share capital is owned by the Kingdom of Sweden, which guarantees the obligations of the Bank up to a stated total. The Bank is not authorized to accept deposits from the public and depends principally on its equity and borrowings in the Swedish and international capital markets for the funds it needs in its activities.

See Gold, Floating Currencies, Gold, and SDRs, Pamphlet 19, pp. 13-15 and 87.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 1-7 and 75-77.

See Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 46-47.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 28-29.

Decision No. 5812-(78/90) TR, June 16, 1978, Annual Report, 1978, pp. 132-33. See also Decision No. 5973-(78/189) TR, December 4, 1978, Selected Decisions, Supp. to 8th (1978), pp. 87-88 (reproduced in Appendix E).

Decision No. 5973-(78/189) TR, Selected Decisions, Supp. to 8th (1978), pp. 87-88.

Joseph Gold, “Trust Funds in International Law: The Contribution of the International Monetary Fund to a Code of Principles,” American Journal of International Law, Vol. 72 (1978), p. 862.

Gold, Floating Currencies, Gold, and SDRs, Pamphlet 19, pp. 62-63, footnote 138.

Selected Decisions, Supp. to 8th (1978), pp. 5-10; Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 78-81.

Selected Decisions, Supp. to 8th (1978), pp. 9-10.

Decision No. 6026-(79/13), January 22, 1979:

“3. Supplemental surveillance procedure. … Whenever the Managing Director considers that a modification in a member’s exchange arrangements or exchange rate policies or the behavior of the exchange rate of its currency may be important or may have important effects on other members, whatever the member’s exchange arrangements may be, he shall initiate informally and confidentially a discussion with the member before the next regular discussion under Article IV. If he considers after this prior discussion that the matter is of importance, he shall initiate and conduct an ad hoc consultation with the member and shall report to the Executive Board, or informally advise the Executive Directors, on the consultation as promptly as the circumstances permit after conclusion of the consultation. This procedure will supplement the proceedings in Executive Board Decision No. 5392-(77/63), adopted April 29, 1977.”

See Annual Report, 1979, pp. 33-37.

C. de Strycker, “La coopération monétaire européenne,” Revue de la Banque, 1/1979, pp. 79-95. Cf. Michael H. Ryan, “The Treaty of Rome and Monetary Policy in the European Community,” Ottawa Law Review, Vol. 10 (1978), pp. 535-65; Jacques van Ypersele de Strihou, “Le nouveau système monétaire européen,” Revue de la Banque, 2/1979, pp. 247-68, at pp. 256-57:

“Outre ces motivations économiques que j’ai soulignées ici, il est évident aussi qu’il y en a d’autres, en particulier le processus d’intégration politique en Europe. Jacques Rueff écrivait en 1949: ‘L’Europe se fera par la monnaie ou ne se fera pas’. Il n’est pas nécessaire d’être aussi catégorique. Toutefois, il est indéniable que des progrès marquants dans la voie monétaire feraient faire à l’Europe politique un pas important.”

[“Obviously, there are other motivations in addition to the economic ones that I have emphasized, and in particular the process of political integration in Europe. Jacques Rueff wrote in 1949: ‘Either Europe will be made by money or it will not be made at all.’ It is not necessary to be so categorical. Nevertheless, marked progress in the monetary field would help Europe as a polity to take a big step forward.”]

See also Michel Vanden Abeele, “L’ECU, une monnaie politique?” Revue de la Banque, 2/1979, pp. 357-70.

Article IV, Section 3(b).

See Philip H. Trezise, ed., The European Monetary System: Its Promise and Prospects, Papers prepared for a conference held at the Brookings Institution in April 1979 (Washington); U.S. Congress, Joint Economic Committee, The European Monetary System: Problems and Prospects, A study prepared for the use of the Subcommittee on International Economics of the Joint Economic Committee, 96th Congress, 1st Session (November 1979); and John Williamson, Alexandre Lamfalussy, Niels Thygesen, et al., EMS, The Emerging European Monetary System, ed. by Robert Triffin, International Seminar on the European Monetary System (Louvain-la-Neuve, 1979).

The Resolution and the other legal instruments on which the discussion of the EMS in this pamphlet is based are included in Texts concerning the European Monetary System (1979) issued by the Committee of Governors of the Central Banks of the Member States of the European Economic Community and the European Monetary Cooperation Fund. The instruments in this collection are:

1. Agreements between the Central Banks of the Member States of the European Economic Community.

2. Decisions taken by the Board of Governors of the European Monetary Co-operation Fund.

Annexes

Resolution of the European Council of 5th December 1978 on the establishment of the European Monetary System (EMS) and related matters

Council Regulation (EEC) No. 3180/78 of 18th December 1978 changing the value of the unit of account used by the European Monetary Co-operation Fund

Council Regulation (EEC) No. 3181/78 of 18th December 1978 relating to the European Monetary System

See also Horst Ungerer, “European Monetary System Has as Objectives Greater Economic Stability, Policy Convergence,” IMF Survey, Supplement: The European Monetary System, Vol. 8 (1979), pp. 97-100.

Malcolm Rutherford, “Why Britain Balks at the Supersnake,” Financial Times, October 27, 1978, p. 19; “Mr. Healey Warns Cabinet on Hazards of EMS,” The Times (London), November 4, 1978, p. 1.

W.S. Ryrie, “Powerful Political Impulse Spurs Monetary Integration,” Journal of Commerce, August 15, 1978.

Certain features of the negotiations that culminated in the Council’s Resolution of December 5, 1978 have been described as follows:

“During the negotiations which followed there were two dominant issues, both related to the degree of ‘discipline’ that should be built into the system and its sharing between deficit and surplus countries. The first issue concerned the choice of the exchange-market intervention mechanism. One view was that intervention limits applied on either side of central exchange rates defined in terms of the ECU would result in a more equal distribution of intervention obligations between strong and weak currencies; on the other hand, countries with traditionally strong currencies feared that such a system would impose an unduly heavy burden on them and they therefore preferred a system, like that used in the ‘snake’, of intervention limits fixed in relation to bilateral central rates between currencies. The second issue concerned the size of the increased EEC credit facilities to be associated with the system, and their distribution between medium-term conditional credit, favoured by the strong-currency countries, and short-term unconditional credit, preferred by the other countries. The agreements reached on these issues represented, on balance, a compromise between the two schools of thought: the ‘snake’ method was adopted for defining intervention obligations, while deviations from currencies’ ECU central rates were to be taken as an indicator of ‘divergence’, carrying with them a presumption of action by the authorities concerned; on the credit issue, most of the increase was in unconditional facilities, the maximum duration of which was lengthened.” (Bank for International Settlements, Forty-Ninth Annual Report, 1st April 1978-31st March 1979 (Basle, 1979), pp. 144–45.)

Journal du Droit International, No. 1 (1979), pp. 79-85, with note by David Ruzié.

Care should be taken with the plural of ECU. In accordance with the legal texts, it should be ECUs and not, as one newspaper presented it, EC-U.S. (Journal of Commerce, November 21, 1978, p. 2). Moreover, according to Handelsblatt, March 23-24, 1979, p. 7, there has been a problem about the gender of the ECU in French and German and also whether it is the ECU or the Ecu (or the ecu).

According to Corriere della Sera, November 30, 1979, and Financial Times, January 11, 1980, p. 21, the Instituto Bancario San Paolo di Torino has announced that its public works financing section will issue a Lit 200 billion 9 per cent ten-year loan, the capital value of which will be indexed to the ECU. The nominal value of the bonds will be recalculated yearly, on the basis of the lira value of the ECU, and interest and capital payments will be determined by this indexed value. The base value is the average lira value of the ECU between mid-October and mid-November 1979 and is equivalent to Lit 1,147.92. The yearly recalculations will be based on the average for the corresponding period each year.

According to the article entitled “The European Monetary System: Structure and Operation,” Monthly Report of the Deutsche Bundesbank (March 1979), p. 12, a member may make the request. (Hereinafter referred to as Bundesbank Monthly Report, March 1979.)

See Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 1-7.

According to Bundesbank Monthly Report, March 1979, p. 13, unanimity is required: “Any change in a central rate in the EMS is therefore carried out in the context of a realignment of all ECU central rates, and it is consequently subject to the agreement of all the participants in the system.” But note Giovanni Magnifico, “Capturing the Snake in the Basket,” Journal of Commerce, April 25, 1979: “Changes in the central rates will have to be mutually agreed; but no country will have the power of veto and individual countries have in principle the freedom to decide the best means of carrying out any changes in the central rates that might be deemed necessary over a given period, even with best domestic policies.”

Wolfgang Rieke, “L’ECU et sa fonction de numéraire et de monnaie de réserve dans le nouveau système monétaire Européen,” in L’Utilisation d’Unités de Compte, pp. 47-48.

Jonathan Carr, “Bundesbank Can Halt Currency Intervention,” Financial Times, March 23, 1979, p. 2:

“THE BUNDESBANK retains the power temporarily to suspend currency market intervention in cases of extreme emergency, despite the obligations of the European Monetary System (EMS).

“The point is made by Dr. Otmar Emminger, the Bundesbank’s president, in an article to be published next week by Handelsblatt, the West German financial newspaper.

“Dr. Emminger asks what might happen if the Bundesband could not rely on speedy changes of currency parity by partner countries when these became desirable. Might not the Bundesbank be condemned to largescale intervention, and its control over domestic money supply undermined?

“He notes that the Bundesbank could always try to neutralise the inflationary impact of such currency support operations. It also has the statutory right to advise the Government and in extreme cases it could suspend intervention.

“The Bundesbank has long made it plain that it feels a key test of the EMS will be the extent to which ‘timely and noiseless’ parity changes prove to be possible within it.

“An underlying fear has been that a decision on a parity change might be delayed by political disagreement in a field over which central banks have no control.

“These fears were partly confirmed in advance by the months-long dispute over monetary compensatory amounts within the EEC Common Agriculture Policy—which delayed the start of the EMS.”

Bundesbank Monthly Report, March 1979, p. 13. See also Samuel Brittan, “Two and a Half months of the EMS,” Financial Times, May 24, 1979, p. 19.

Danmarks Nationalbank, Monetary Review, May 1979, p. 4:

“While the krone was the top currency, both in relation to the bilateral intervention limit and to the threshold value of the divergence indicator, the bilateral intervention limit was reached from time to time, but the threshold value was not exceeded.

“This is explained by the dissimilar principles governing the calculation of the two limits.

“A currency may reach its bilateral intervention limit if only one other currency reaches the opposite intervention limit in relation to the 2¼ per cent margin. In that case the two currencies will stand in mutually extreme positions.

“The principles governing the divergence indicator and its calculation are much more complex, but in practice they imply that one currency may exceed its threshold value without any other currency being in an opposite extreme position; hence, there will not be two diverging currencies but only one.

“The method of calculation also implies that even if the threshold value has been fixed at 75 per cent of the maximum divergence between the ECU value and the ECU central rate of a currency, that currency will not necessarily reach the threshold value before it reaches the bilateral intervention limit. Depending on the relative positions of the participating currencies the bilateral intervention limit may be reached first. The latter situation is relatively more likely to arise for a minor currency like the Danish krone, which carries modest weight in the system.”

See Guy de Jonquieres and Peter Riddell, “A European Monetary System: Condemned to Succeed,” Financial Times, September 18, 1978, p. 14; Peter Norman, “The Split at the Heart of the European Currency Debate,” The Times (London), September 11, 1978, p. 17; The Economist, October 21, 1978, pp. 58 and 69.

Netherlands Bank, Report for the Year 1978, p. 119.

“Green Paper on European Monetary System,” Financial Times, November 25, 1978, p. 4.

“Intervention arrangements in the European Monetary System,” Bank of England Quarterly Bulletin, Vol. 19 (June 1979), pp. 190-94.

See Annex 1 to the Outline of Reform, Documents of Committee of Twenty, pp. 24-28. See also pp. 51-75.

Board of Governors Resolution No. 29-10, Selected Decisions, 8th (1976), p. 218.

See n. 145.

Decision No. 5392-(77/63), April 29, 1977, Selected Decisions, Supp. to 8th (1978), p. 8.

Compare, for example, Article XIX of the Second Amendment with Article XXV of the First Amendment.

Under Article XVII, Section 3 of the Fund’s Articles, the Fund may prescribe as a holder of SDRs “institutions that perform functions of a central bank for more than one member, and other official entities” among other possible holders. The EMCF might fall into either category, but it would be necessary to determine that it had authority to engage in operations and transactions involving SDRs and that the operations and transactions that it might wish to engage in were compatible with the provisions of the Articles.

The preamble of the agreement, however, declares that:

“Whereas in order to make provision for means of settlement the central banks have been asked initially to transfer to the European Monetary Co-operation Fund, in the form of revolving swaps against ECUs, 20 per cent of their gold holdings and 20 per cent of their US dollar reserves, and thereafter to keep at least 20 per cent of the said reserves on deposit with the European Monetary Co-operation Fund.” (Agreement between the Central Banks of the Member States of the European Economic Community laying down the operating procedures for the European Monetary System, March 13, 1979, Committee of Governors of the Central Banks of the Member States of the European Economic Community, Texts concerning the European Monetary System (1979), p. 8.)

Bundesbank Monthly Report, March 1979, p. 16. See also Danmarks Nationalbank, Monetary Review (May 1979), p. 5: “These deposits…have been effected by way of three-month revolving swaps against ECUs. Hence, there has been no final transfer of gold and dollars to the Fund”; and International Financial Statistics (August 1979), p. 7: “For these countries [i.e., the participants], reserves deposited with the EMCF are excluded from their gold and foreign exchange holdings, and all ECU holdings are included in Foreign Exchange.”

But see Giovanni Magnifico, “Open Market Operation for Europe?” Journal of Commerce, April 26, 1979: “The dollars so transferred to the Fund are available for member countries who have to sell dollars in order to support their own currencies, but the total amount of dollars held by the European Fund only declines when the Community globally loses dollar reserves. The dollars transferred to the Fund are not available for the purpose of just diversifying reserves by purchasing strong currencies. Thus their volatility is reduced…”

See, for example, Marcel Planiol, Treatise on the Civil Law (translated by Louisiana State Law Institute), 11th ed. (Paris, 1939), Vol. 2, Part 2, pp. 274-78.

See Report of the Executive Directors to the Board of Governors on Increases in Quotas of Members—Fourth Quinquennial Review, paragraph 22, Annual Report, 1965, p. 128.

See, for example, Annual Report, 1966, p. 166.

Article XIX, Section 3(a).

Article XIX, Section 2(b).

Article XIX, Section 6; Schedule G, Paragraph 1(a); Decision No. 5936-(78/168)S, October 25, 1978, effective December 11, 1978, Selected Decisions, Supp. to 8th (1978), p. 81.

See “Green Paper on European Monetary System,” Financial Times, November 25, 1978, p. 4.

Verbatim, May 1977, p. 13.

See The Economist, December 15, 1979, p. 45.

See “Austrians and Swiss Consider Ins and Outs of EMS,” Financial Times, May 11, 1979, p. 2.

See Richard W. Edwards, Jr., “The European Exchange Rate Arrangement Called the ‘Snake,’” University of Toledo Law Review, Vol. 10 (1978), pp. 47-72.

Lars Gorton, “Escalation and Currency Clauses in Shipping Contracts,” Journal of World Trade Law, Vol. 12 (1978), pp. 319-41.

Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 7-12.

W. Bruns & Company of Hamburg v. Standard Fruit and Steamship Company of New Orleans (The “Brunsrode”) [1975] Lloyd’s Law Reports, Vol. 2, p. 74; [1976] Lloyd’s Law Reports, Vol. 1, p. 501.

[1976] Lloyd’s Law Reports, Vol. 1, at p. 507.

Ibid., p. 503.

Keith A. Yelinek, “The International Secondary Mortgage Market and Foreign Currency Exchange,” International Bar Journal (May 1978), pp. 68-82.

Cf. Nicholas Colchester, “How ICI Covers Itself Against Currency Losses,” Financial Times, November 10, 1978, p. 12.

The case, Chisari v. Vacani, decided on August 20, 1975, is discussed in James M. Harris, “Supervention of the Nominalistic Principle in Argentine Jurisprudence,” Texas International Law Journal, Vol. 14 (1979), pp. 37-57, at p. 45. The comment on the case in the text of this pamphlet is based on this article. Mr. Harris refers to the distinction made by an Argentine author, Mr. A.G. Spota, between what is “foreseen” and what is “foreseeable.” The fact that developments are not foreseen should not be a ground for relief, it is suggested, unless they were not foreseeable. The distinction may have some relevance to the discussion of the prudent trader and exemption from changes in monetary compensatory amounts in the jurisprudence of the European Court of Justice. Cf. the German case discussed in Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 61-63.

Petroleum Intelligence Weekly, Vol. 18 (December 10, 1979), pp. 1-2; The Guardian, December 11, 1979, p. 16.

Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 32-33. Karl E. Lindh, “Une unité de compte viable peut-elle résoudre des problèmes des entreprises internationales?” in L’Utilisation d’Unités de Compte, pp. 67-76.

Bank for International Settlements, Forty-Ninth Annual Report, 1st April 1978-31st March 1979 (Basle, 1979), pp. 174-75.

International Monetary Fund, Annual Report on Exchange Arrangements and Exchange Restrictions, 1979 (Washington, 1979), p. 415.

See John A. Usher, “Agricultural Markets: Their Price-Systems and Financial Mechanisms,” European Law Review, Vol. 4 (June 1979), p. 161. See also Christopher Vajda, “Some Aspects of Judicial Review within the Common Agricultural Policy—Part II,” European Law Review, Vol. 4 (October 1979), pp. 350-53.

For later developments, see Usher, ibid., pp. 155-59.

Case 94/77 [1978] E.C.R. 99.

Selected Decisions, 8th (1976), pp. 14-17.

See, however, Firma Gebrüder Dietz v. Commission of the European Communities, Case 126/76 [1977] E.C.R. 2431.

Case 146/77 [1978] 3 C.M.L.R. 47.

Usher, “Agricultural Markets: Their Price-Systems and Financial Mechanisms,” op. cit. (n. 177), p. 162.

Case 35/78 [1978] E.C.R. 2543.

Ibid., p. 2556.

Société pour l’Exportation des Sucres SA v. Commission of the European Communities, Case 132/77 [1979] 1 C.M.L.R. 309, at p. 310.

World Bank, Annual Report, 1979, pp. 28-29.

Article IV, Section 4(b)(ii) of the World Bank’s Articles provides that in the case of loans made with borrowed currency “the total amount outstanding and payable to the Bank… shall at no time exceed the total amount of the outstanding borrowings made by the Bank … and payable in the same currency.” Cf. André Jacquemont, “Le contrat d’euro-crédit: un contrat à contenu variable,” Journal du Droit International 106 Année (1979), pp. 37-38.

World Bank, Annual Report, 1979, p. 28.

International Bank for Reconstruction and Development, General Conditions Applicable to Loan and Guarantee Agreements (March 15, 1974), Article IV, Sections 4.01 and 4.02.

World Bank, Annual Report, 1979, pp. 28-29.

Ibid., p. 29. Other international development banks are said to be studying the problems of distributing exchange risks:

“As with other development banks, currency risks are borne by the borrowing country, not the bank [Asian Development Bank]. …

“The bank has committed itself to a study of ways of spreading exchange risks. The World Bank has a complex formula for spreading risk among borrowers, rather than leaving it to the chance distribution of currencies. But the ADB is believed to be thinking more in terms of providing for some compensation to badly afflicted borrowers out of reserves accumulated by currency movements in its own favour. But this would probably be done only on the basis of losses realised over the life of the loan, not on paper movements.” (Philip Bowring, “Asian Development: In Search of a Currency Hedge,” Financial Times, May 16, 1979, p. 23).

World Bank, Annual Report, 1979, p. 29.

[1975] 3 All E.R. 801.

Gold, Floating Currencies, Gold, and SDRs, Pamphlet 19, pp. 35-38; Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 15-16, 18,23, and 62; Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 63-64, 66-67, and 69.

[1977] 3 All E.R. 874.

[1978] 3 W.L.R. 804.

Services Europe Atlantique Sud (SEAS) of Paris v. Stockholms Rederiaktiebolag SVEA of Stockholm [1978] 3 W.L.R. 804, 811.

[1978] 2 All E.R. 764(C.A.); Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 67-69.

George Veflings Rederi A/S v. President of India and other appeals, The Bellami, The Pearl Merchant, The Doric Chariot [1979] 1 All E.R. 380. For a discussion of the possible impact of the decisions on parties, see Roger Bowles and Christopher Whelan, “Judgments in Foreign Currencies: Extension of the Miliangos Rule,” Modern Law Review, Vol. 42 (1979), pp. 452-58.

[1979] 1 All E.R. 380. The decision is based on the Miliangos case in this respect also, but extends it because payments in sterling for demurrage in the later cases were made before the judgments were delivered, and the issue was the extent to which the charterers’ obligations had been discharged (i.e., the appropriate rate of exchange). In the Miliangos case no payments had been made before the judgment was delivered. (See George Veflings Rederi A/S v. President of India. The Bellami [1978] 3 All E.R. 838, at p. 840.)

A.V. Dicey, Dicey and Morris on the Conflict of Laws, 9th ed. (London, 1973), pp. 988-92.

Ibid.

Ibid., pp. 1041, 1053, and 1058. See also F.A. Mann, The Legal Aspect of Money, With Special Reference to Comparative Private and Public International Law, 3rd ed. (Oxford, 1971), pp. 364 and 368.

See A.V. Dicey, Dicey and Morris on the Conflict of Laws: Sixth Cumulative Supplement to the Ninth Edition (London, 1979), referring to pp. 908-15 of Dicey and Morris on the Conflict of Laws. The legal situation in Canada has been described as follows:

“The problem of exchange rates has yet to be resolved in Quebec. Canadian courts cannot execute a judgment for an amount expressed in foreign currency, and, therefore, must convert the amount into Canadian dollars. In the present period of economic uncertainty, the rate of exchange of United States and Canadian dollars varies daily. Thus, it may make a substantial difference whether one selects the rate in force on the date of the breach of the obligation which was the cause of the original action, the date of the foreign judgment, or the date of the Quebec judgment. Although in the common-law provinces the date of the foreign judgment is preferred, there seems to be no established practice in Quebec. The law of Quebec concerning the execution of foreign judgments does not take into account the dynamics of international exchange and is badly in need of reform.” Ethel Groffier Atala, “Recognition of Foreign Country Money Judgments: Quebec-United States Position,” Fordham Law Review, Vol. 47 (1978), at pp. 136-37. See also Fordham Law Review, Vol. 45 (1976-1977), p. 150.

Michael H. Brenscheidt, “The Recognition and Enforcement of Foreign Money Judgments in the Federal Republic of Germany,” International Lawyer, Vol. 11 (1977), p. 269. The author does not discuss the question of the currency in which the judgment in Germany authorizing enforcement of the foreign judgment is entered or the question of the rate of exchange at which the foreign currency will be translated into the domestic currency, but the formula quoted on p. 274 suggests that the German judgment is expressed in the foreign currency.

Commerzbank Aktiengesellschaft v. Large, Scots Law Times (Reports) [1977] p. 219.

Ibid., p. 223.

For a reference to countries in which the practice is established, see Gold, Floating Currencies, Gold, and SDRs, Pamphlet 19, p. 36; Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, p. 19.

Brian Riordan, “The Currency of Suit in Actions for Foreign Debts,” McGill Law Journal, Vol. 24 (1978), pp. 437 and 438-41.

P.E. Nygh, “Recent developments in Private International Law—1974-1975,” in The Australian Year Book of International Law, Vol. 6 (1978), pp. 177-79, at p. 179. The issue arose in Ex parte TA Field Pty. Ltd. [1975] 49 A.L.J.R. 351, but was resolved on the ground that a judgment expressed in the currency of Papua New Guinea, at the time when it was an Australian Territory, could be registered under the terms of an Australian statute.

Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 18-19.

Anthony G. Guest, “Instruments Denominated in a Foreign Currency,” American Journal of Comparative Law, Vol. 27 (1979), pp. 533-45, at pp. 537-38. See also Barclays Bank International Ltd. v. Levin Brothers (Bradford) Ltd. [1976] 3 All E.R. 900, [1977] Q.B. 270; Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, n. 53 (p. 89).

See Decision No. 3153-(70/95), October 26, 1970, Selected Decisions, 8th (1976), pp. 142-43.

Proposed Second Amendment to the Articles of Agreement of the International Monetary Fund: A Report by the Executive Directors to the Board of Governors (Washington, March 1976), Part III, Section 6.

For example, Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 3-5; Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 55-57.

Staatsblad van het Koninkryk der Nederlanden, 1978, No. 332.

Ibid, 1964, Stb. 439.

The statement of Swiss law in the text is based on Fritz Zimmerman, “Schweizerische Nationalbank am Scheideweg: Aufhebung der gesetzlichen Minimalgolddeckung der Noten gemäss Revisionsentwurf? Hintergrunde?” [“Swiss National Bank at the crossroads: Will the draft amendment result in termination of the legal requirement of 40 per cent minimum gold cover for banknotes? Hidden reasons?”] Internationale Treuhand AG, Information, No. 58 (Basle, November 1978), pp. 11-20; and Hans Aufricht, Central Banking Legislation, Vol. II: Europe (Washington, 1967), pp. 705-23.

For a practical consequence of the retention of the legal value of the Swiss franc in terms of gold, see Hans J. Mast, “Une unité de compte est-elle un instrument utile pour les investisseurs institutionnels?” in L’Utilisation d’Unités de Compte, pp. 83-84.

Bilanz (Zürich), September 1979.

See John Wicks, “Rising Swiss Franc Forces Gold Reserve Revaluation,” Financial Times, October 20, 1978, p. 2.

See Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 40-41.

Case 94/77 [1978] E.C.R. 99.

Usher, “Agricultural Markets: Their Price-Systems and Financial Mechanisms,” op. cit. (n. 178), pp. 147-65, at p. 156.

Selected Decisions, 8th (1976), pp. 14-17.

See Case 94/77 [1978] E.C.R. 113.

Joseph Gold, Legal and Institutional Aspects of the International Monetary System: Selected Essays (Washington, 1979), pp. 541-42.

Ibid., pp. 559-60.

Selected Decisions, 8th (1976), p. 13.

Article VIII, Section 3.

Article V, Section 12(f).

Schedule B, paragraph 7. A provision of Public Law 95-147 of the United States, approved October 28, 1977, An Act to Authorize the Secretary of the Treasury to Invest Public Moneys, and for Other Purposes, amends the U.S. Bretton Woods Agreements Act (22 U.S.C. 286c) to provide that:

“[Unless Congress by law authorizes such action, neither the President nor any person or agency shall on behalf of the United States] (g) approve either the disposition of more than 25 million ounces of Fund gold for the benefit of the Trust Fund established by the Fund on May 6, 1976, or the establishment of any additional trust fund whereby resources of the International Monetary Fund would be used for the special benefit of a single member, or of a particular segment of the membership, of the fund.”

Schedule K, paragraph 2(a).

Article V, Section 12(a).

Article VIII, Section 7.

Regina v. Ernest George Thompson, Case 7/78 [1978] E.C.R. 2247.

Allgemeine Gold-und-Silberscheideanstalt v. Customs and Excise Commissioners, The Times (London), December 11, 1979, p. 15.

See IMF Memorandum, August 16,1979, p. 4. See also “The Revaluation of International Gold Reserves,” International Currency Review, Vol. 11, No. 4 (1979), pp. 46-51.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 33-34.

Agreement between the Central Banks of the Member States of the European Economic Community laying down the operating procedures for the European Monetary System, March 13, 1979, Article 17, Section 17.4 in Texts concerning the European Monetary System, p. 16.

Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 52-55. The members mentioned in the earlier pamphlet that had departed from the presentation of their gold holdings on the basis of the former official valuation were Australia, members of the Central African Monetary Union (Cameroon, Central African Republic, People’s Republic of the Congo, Gabon), Costa Rica, France, Italy, Jordan, Mexico, the Netherlands, and South Africa. According to International Currency Review, Vol. 11, No. 4 (1979), p. 51, Spain (which revalued its gold at the average market price prevailing in April 1979) can be added to the list.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 32-34.

Peter Riddell, “Official Reserves to be Revalued,” Financial Times, February 9, 1979, p. 36. British Information Services, February 8, 1979.

John Wicks, “Rising Swiss Franc Forces Gold Reserve Revaluation,” Financial Times, October 20, 1978, p. 2. See also David Marsh, “As EMS Launch Date Nears: Gold Set for Revival,” Financial Times, December 19, 1978, p. 3.

See Joseph Gold, The Fund Agreement in the Courts (Washington, 1962), pp. 32-36. See also The International Monetary Fund, 1945-1965: Twenty Years of International Monetary Cooperation, edited by J. Keith Horsefield (Washington, 1969), Vol. II, pp. 203-14; Margaret Garritsen de Vries, The International Monetary Fund, 1966-1971: The System Under Stress (Washington, 1976), Vol. I, p. 424.

Vol. XXX, No. 16, p. 1. See also Annual Report on Exchange Arrangements and Exchange Restrictions, 1979 (Washington, 1979), p. 335.

Annual Report on Exchange Arrangements and Exchange Restrictions, 1979 (Washington, 1979), p. 111.

Ibid., p. 367.

T. Treves, “Sulla Conversione in Moneta Nazionale Dei Limiti Di Responsabilita In Franchi Oro Della Convenzione Di Varsaria,” Il Diritto Marittimo (1978), pp. 83-91.

See Gold, Floating Currencies, Gold, and SDRs, Pamphlet 19, pp. 45-47; Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 29-30.

Proposals to adopt a gold value clause in certain private contracts continue to be made. For example:

“A New York union has proposed that its members be paid in something of more durable value.

‘Recognizing the possibility of uncontrollable inflation and the serious loss of credibility and purchasing power of [the dollar], the employer, upon union’s demand, will probably remunerate employes in mediums of exchange other than the presently used U.S. Federal Reserve dollar,’ the Professional Employes Federation has proposed in its negotiations with New York state.

‘Such alternate mediums of exchange include, but are not limited to, gold, silver, platinum, bullion and coin, and/ or one or more foreign currencies,’ the union contract proposal states….[The] public relations director of the union said the proposal is serious. ‘Every proposal we put on the table is serious or we wouldn’t put it on the table,’ she said. The union has a number of economists among the 48,300 state workers for whom it bargains and they helped formulate the unique bargaining approach, Grosse added.

‘We’re not suggesting that the governor pan gold in Colorado and pay us in gold dust,’ she said, ‘We want to be paid in the value of gold or silver or another index of value.’” (Washington Post, June 23, 1979, p. A3.)

See also Gold, SDRs, Gold, and Currencies, Pamphlet 26, p. 92; William Rees-Mogg, “Liquidity, Reality, Liberty and Order,” The Times (London), November 17, 1978, p. VIII; “Gold Clauses: Back to Barter?” Banking Law Journal, Vol. 95 (September 1978), pp. 743–44. For an account of the growth in domestic loans against gold collateral in India, see “Commercial Banks’ Lending Against Gold Ornaments,” Reserve Bank of India Bulletin (October 1977), pp. 617–47 and Aspects of Gold Policy, edited by S.L.N. Simha (Madras, 1979), particularly at pp. 150–52.

Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 55-56; E.W.J.H. de Liagre Böhl, “The Conversion Rate of Gold Francs to Guilders: The End of Monetary Gold,” Nederlands Juristenblad, Vol. 53 (1978), pp. 572-77.

See Il Diritto Marittimo (1978), p. 91 (cited in n. 251).

Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 56-58.

See Gold, SDRs, Gold, and Currencies, Pamphlet 26, p. 72. The author of the article in Nederlands Juristenblad referred to in n. 254 argues that legally there is now no alternative to the use of the market price of gold for the purpose of applying a gold value clause, even though he agrees that the monetary role of gold has ended, and that the market price is not a datum of the kind that the parties to a convention intended when adopting a gold value clause.

The author of the article in Nederlands Juristenblad referred to in n. 254 refers to the new practice of the Netherlands authorities in support of his thesis.

Gold, SDRs, Gold, and Currencies, Pamphlet 26, pp. 35-36. See also Gold, Floating Currencies, SDRs, and Gold, Pamphlet 22, pp. 55-56.

E.W.J.H. de Liagre Böhl, “The Conversion Rate of Gold Francs to Guilders: The End of Monetary Gold,” Nederlands Juristenblad, Vol. 53 (1978), pp. 572-77.

1979, c. 28.

Ibid., section 4(1)(a). See also section 4(3)(c).

Ibid., section 5.

The preamble is not correct in declaring that “the Fund Agreement no longer contains any reference to gold.”

Agreement between the Central Banks of the Member States of the European Economic Community laying down the operating procedures for the European Monetary System, March 13, 1979, Articles 16, 17, 18, and 20 in Texts concerning the European Monetary System, pp. 14-17.