Chapter

Appendix V. Enlargement of Fund Resources Through Increases in Quotas

Author(s):
International Monetary Fund
Published Date:
September 1959
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Whereas the Executive Directors have considered the question referred to them by the Resolution of the Board of Governors of the International Monetary Fund at their Thirteenth Annual Meeting:

That the Executive Directors promptly consider the question of enlarging the resources of the Fund through increases in quotas and that, if, having regard to views expressed by Governors and considering all other aspects of the matter, they find that action to carry out such increases would be desirable, they submit an appropriate proposal to the Board of Governors for action either at a meeting of the Board or by vote without a meeting, as the Executive Directors may determine;

And having found that action to carry out increases in quotas would be desirable, have set out their conclusions in a report, entitled Enlargement of Fund Resources Through Increases in Quotas, in which it is proposed that the present quota of each member of the Fund shall be increased by 50 percent, with additional increases for certain members;

And having noted that there are various legal requirements in member countries for giving effect to this proposal, have submitted to the Board of Governors the following Resolutions for a vote without meeting pursuant to Section 13 of the By-Laws of the Fund, which Resolutions propose increases of quotas for all members of the Fund, make provision for consents by members, and establish the conditions upon which the increases consented to shall take effect;

Now Therefore the Board of Governors hereby resolves that

First Resolution

1. The International Monetary Fund proposes that, subject to the provisions of this Resolution, the quotas of members of the International Monetary Fund as of January 31, 1959 shall be increased by 50 percent for each member.

2. None of the increases in quotas proposed in paragraph 1 of this Resolution shall become effective unless:

  • (i) The member concerned has notified the Fund in writing that it consents to the increase in its quota; and

  • (ii) The Fund determines that members having not less than 75 percent of the total of quotas on January 31, 1959 have consented to increases in their quotas; and

  • (iii) The requirement is satisfied of a minimum aggregate increase in subscriptions, contained in the Resolution of the Board of Governors of the International Bank for Reconstruction and Development entitled Increase of $10,000,000,000 in Authorized Capital Stock and Subscriptions Thereto, recommended by the Executive Directors of the International Bank for Reconstruction and Development; and

  • (iv) The member concerned has paid the full increase in its quota.

Subject to paragraph 7(c) of this Resolution, each increase in quota shall become effective upon the date of the latest of these four events.

3. The written notices prescribed in paragraph 2(i) shall be signed by a competent official whose authority and signature are duly authenticated.

4. Notices in accordance with paragraph 2(i) shall be received in the Fund not later than September 15, 1959, provided that the Executive Directors may extend this period as they may determine.

5. At any time after the percentage of participation prescribed in paragraph 2(ii) of this Resolution has been reached, the Board of Governors may, by a four-fifths majority of the total voting power, eliminate the requirements in paragraph 2(iii) of this Resolution, and may make such modifications as to the date of the effectiveness of increases in quotas as may then be determined.

6. Subject to paragraph 7(b) of this Resolution, each member shall pay to the Fund within thirty days after the latest of the three events in paragraph 2(i), (ii), and (iii) of this Resolution, 25 percent of the increase in gold and the balance in its own currency.

7(a). In giving notice in accordance with paragraph 2(i) of this Resolution, a member may represent that, for reasons which it shall submit to the Fund, its reserves should not be reduced by an immediate full gold payment in accordance with paragraph 6 of this Resolution, and that it therefore consents to the increase in its quota proposed in paragraph 1 of this Resolution, as an increase by installments.

(b). Notwithstanding paragraph 2(iv) of this Resolution, a member increasing its quota by installments shall pay not less than one fifth of the gold and currency prescribed in paragraph 6 within thirty days after the latest of the three events in paragraph 2(i), (ii), and (iii), and shall pay further installments of gold and currency of not less than one fifth of the increase in each twelve months after the first payment until the full amount prescribed in paragraph 6 has been paid.

(c). Subject to paragraph 2 of this Resolution, on the completion of the payment of each installment of the increase, the member’s quota shall be increased by an amount equal to the installment.

8. Since it is in the interests of the Fund and its members that the contemplated increase in its resources be expedited, members are invited to comply as soon as possible with the procedures for notice and payments to the Fund under this Resolution. Any payment made by a member before the effective date of increase in its quota will be kept in separate accounts of the Fund. If it should be established that such increase cannot become effective under this Resolution, the payment will be returned to the member.

Second Resolution

1. The International Monetary Fund proposes that, subject to the provisions of this Second Resolution, if any member to which the small quota policy of the Second Quinquennial Review applies so elects, its quota shall be increased beyond the amount specified in the First Resolution to such an amount, not exceeding a 50 percent increase in the maximum quota available under the said policy, as such member shall communicate to the Fund at the time that it consents to the increase in its quota.

2. Paragraphs 2(i) and (iv), 3, 4, 6, 7, and 8 of the First Resolution shall apply to this Second Resolution.

Third Resolution

1. The International Monetary Fund proposes that, subject to the provisions of this Third Resolution, if increases in quotas take effect under the First Resolution, the quotas of Canada, the Federal Republic of Germany, and Japan shall be increased to the amounts shown below:

Canada$550 million
Federal Republic of Germany$787.5 million
Japan$500 million

2. Paragraphs 2(i) and (iv), 3, 4, 6, and 8 of the First Resolution shall apply to this Third Resolution.

December 19, 1958

The three resolutions were adopted by the Board of Governors, effective February 2, 1959.

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