Concluding Remarks1 by the Chairman of the Executive Board and Managing Director of the International Monetary Fund

International Monetary Fund. Secretary's Department
Published Date:
November 1962
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Per Jacobsson

In the speech of President Kennedy, which we heard yesterday, we had an eloquent affirmation of the importance of international cooperation, and a pledge of the continuing participation of the United States in this cooperation. The President expressed his deep conviction that whatever the immediate sacrifices involved, this was an enlightened policy in the true self-interest of his and other countries.

I think I can say that the tenor of the speeches by Governors at this meeting shows that there is a general awareness that the true self-interest of every country is best served through international cooperation, and they referred especially to monetary matters. Many Governors here expressed their confidence that this cooperation can be effectively translated into practical politics, which can ensure the solution of the immediate problems and those that lie ahead.

We have heard from many Governors of the problems that are affecting their own countries. Some of their problems are largely domestic in character, such as questions of wage policy, taxation, mortgage rates, and others, and these problems have now, for many countries, to be considered as part of an adjustment to more stable price levels. But many of the problems have, at the same time, to be considered with an eye to the international situation. Indeed, it is being increasingly realized that there are more and more aspects especially of fiscal and credit policies where international contact and cooperation are necessary. Many Governors have also spoken of development assistance. Here, too, the richer countries which extend the aid are aware that they have an interest in acting in concert when making aid available to developing countries.

But it is still a problem for the developing countries and for the countries extending aid whether they should act primarily in an international setting or through bilateral relationships. Mr. Black referred at some length to these problems in his speech on Tuesday, stressing the advantages of granting aid in an international framework, and for my part I wish to reiterate my belief that the Fund will be more concerned with development problems in the future than it has been in the past.

Many Governors also drew attention to the need for the developing economies to have ready access to the markets of the industrial countries, and in this connection I cannot express too strongly my conviction that the lowering of trade barriers of all kinds against the exports of the less developed countries is in the mutual interest of both the industrial countries and the nonindustrial countries. We have also to continue our work on the problems for the primary producing countries arising from the fluctuations in the export earnings for their products. The Fund will pay close attention to this question, as well as to the more general problems of the developing countries.

But while numerous problems remain in the industrial as well as the developing countries, a great many Governors expressed the view that there has been a major improvement in the over-all payments situation, due in the main to a better balance between costs, prices, and interest rates among the principal industrial countries. At the same time, they welcomed the strengthening of the defenses which are now available to meet any strain on the international payments system. Indeed, the improved distribution of monetary reserves, the establishment of reciprocal central bank credits, and the availability of the resources of the International Monetary Fund, shortly to be fortified by $6 billion of supplementary resources, are crucial factors in the maintenance of good order in the international payments system. However, the Governors fully realize, and stated quite clearly, that no defenses, however substantial, can in themselves ensure stability unless appropriate policies are pursued in the individual countries.

The over-all improvement has been reflected in recent movements on the exchange markets; and I think we can say that the industrial nations, whose currencies provide the main elements of the international credit system, are enjoying a period of relative calm and consolidation. This gives us the opportunity to consider our various problems, and the suggestions which have been made for coping with them in an environment of expanding trade and greater confidence.

A great number of Governors referred to the problem of world liquidity. The consensus was, I think, that there is, at present, a sufficient degree of liquidity to finance expanding world trade, and many Governors emphasized the usefulness of the various steps already taken, whether through increased cooperation or otherwise, to strengthen the system.

While there were many expressions of confidence about the future, there were a number of suggestions advanced with the aim of ensuring that as world trade increases a satisfactory level of liquidity will continue to be maintained, however the basic conditions may change. I cannot comment at this stage upon the various suggestions made, some of a more limited character, some of a rather far-reaching nature. They must all be carefully examined. I can only say that the Fund will give the fullest consideration and closest study to the ideas expressed by the Governors as part of its continuing consideration of world liquidity problems.

There is one last point of a general character which I should like to make. There was unanimity among the speakers on the question of the importance of establishing and maintaining monetary stability in the industrial countries as well as in the developing countries. I think it is experience, sometimes very bitter experience, that has shown that this is the right policy. Policies of stability in individual countries will be most readily pursued if international conditions are such as to facilitate a healthy and expanding world economy with neither inflation nor deflation. We have to watch the signs of the times and adjust policies accordingly; but as I said at the beginning, we have to do it together.

I cannot let this occasion go without a special tribute to the work of the Executive Directors and the staff. Many Governors have spoken of the Fund’s record activities of recent years, and the successful conduct of those activities. For the Executive Directors, the intense work has required very frequent meetings of the Board, and has of course called for much work between the meetings. I need not point out how much this involves in the way of study, discussion, and liaison. It is a pleasure for me to testify how the relations of mutual confidence established over the years within the Board of Executive Directors have helped to render its work both effective and agreeable. We are all deeply indebted to them.

This leads me to the staff. With little increase in numbers this body of devoted international civil servants has carried the burden of much increased work. Week after week, the study and consideration of one important question has not been finished before a new urgent question arose. What can one say except that the work has been done, and that the staff has never failed to put forth the ever-increasing effort that this has required? It is a privilege for me to be the head of this staff, and perhaps that is all that I need say to convey my feelings.

I would in closing not like to allow the occasion to pass without adding a few words of my own to what has already been said by so many Governors in taking leave of three men on whom has fallen, for a number of years, a great part of the responsibility for the affairs of our institutions: for the Fund, Mr. Merle Cochran; and for the Bank, Mr. Eugene Black and Sir William Iliff.

It has been a great joy for me, as I am sure it has been for others in the Fund, to have listened to the appreciative words that have been said about the contribution made to the Fund by my old friend, Mr. Merle Cochran. These have been years of much hard work, and I know that all that has been achieved could not have been carried out without the unstinting devotion to the Fund and its work which Mr. Cochran has shown over the past nine and a half years, the longest period in which anybody has served in a management capacity in the Fund.

I met Mr. Cochran for the first time at a meeting of the Bank tor International Settlements in 1931. Financial problems have been a major interest of his life, and the happy combination of this interest with his training and skill as a diplomat has proved invaluable to the Fund through many complex negotiations and other problems. There are many ways that I could mention in which he has contributed to the Fund over the years, but I must limit myself today to stressing one or two which I consider the most important. In the first place, I must recall his great knowledge of the developing nations, his great sympathy for their point of view and understanding of their aspirations and endeavors, to which several Governors have referred in their speeches. Secondly, over a long career he has had great administrative experience, and his organizational capabilities and skill have been of inestimable value over the past decade—a decade for the Fund of considerable development and expansion. I would like to mention particularly one very solid result of this work: more than anyone else, Mr. Cochran was responsible for the Fund’s building at 19th and H Streets, a lasting monument of which he can be justly proud.

There have in these years been periods of intense strain and difficulties, but Mr. Cochran has learned to live easily with great problems, not losing his calm, but always ready for decisive action. Many of us will miss him as a close personal friend, and we shall all miss his presence and his counsel in our daily tasks. He will carry with him when he leaves the Fund next month the thanks and the best wishes of us all.

May I also take the opportunity of welcoming very warmly Mr. Frank Southard to his new position as Deputy Managing Director. He knows the Fund and the Fund knows him. We shall miss his well-considered and penetrating statements as an Executive Director, but he will be able to give all of us the benefit of his great qualities in his new position as a member of the Management of the Fund.

Mr. Chairman, I would like to say a few words to Sir William Iliff. I knew Sir William before I came to Washington. But after seeing his work from close at hand over the past six years I have come more fully to appreciate his firm grasp of problems and the friendly but decisive manner he shows in dealing with his colleagues and the many countries with whose difficulties he has so patiently and effectively concerned himself. He has always been ready to discuss and work out solutions to problems of mutual concern to the Fund and the Bank, showing, beneath his easy Irish manner, adroitness in his handling of a wide diversity of problems and also all the necessary determination to resolve them. May I convey to him my personal thanks and the thanks of the Fund for the friendly and cooperative spirit he has shown us all over the years and express the hope that whatever he may undertake in the future he will maintain contact with his many friends in the Fund.

Mr. Chairman, I would like to end by saying some words to Mr. Eugene Black. He made on Tuesday morning an effective and moving speech in the course of which he announced his decision to relinquish his position as President of the Bank. As I listened to his speech I could not help thinking how characteristic of him it was—-forceful, expressive, varied, reflecting his powerful mind and also his knowledge of literature. There is a famous saying in France by de Buffon: Le style est I’homme même—”Style is the man himself.” For Mr. Black, style is something that permeates his whole being, his elegant appearance, his easy humor, and impressive bearing, which makes him stand out in any company. He enjoys a high reputation in the world for what he has achieved over the years as head of the World Bank, but for those of us meeting here, he is held in equally high regard as a man, for his intelligence and imagination, his charm and friendliness. No wonder he is what the French call un homme recherché, a man much sought after in society and in business. But I am glad that in all these years he has withstood other attractions and remained here to serve the Bank and, through the Bank, the world.

I am sure he remembers the words that Shakespeare put into the mouth of Othello:“I have done the state some service and they know it.” I think we can say about Mr. Black today: “He has done the nations great service, and they know it.” Representatives of member countries have in these past days told him so in unmistakable language. Tangible evidence in the buildings, factories, roads, harbors, hospitals, and schools, financed by the Bank in so many of our member countries, will be a lasting memorial to Eugene Black’s contribution to the welfare of nations.

For my own part, having served for over forty years in international life, I can recall living through moments of despair, in times of peace as well as during the war, about the prospects for cooperation among nations. For me it is a great moment to be able to salute a man who has done so much to enhance the prestige of international service to the benefit both of the institutions he presided over and the cause of international cooperation in general. I want to express, too, my personal thanks for what he has done since I came here to help me attain a better understanding of many problems and personalities, and also to thank him for his part in maintaining close cooperation between the Bank and the Fund.

Let us also at this time express to his charming and gracious wife, Mrs. Suzette Black, our best wishes and our admiration of the contribution she has made, both at the side of her husband and for her own part, to enhance the more agreeable aspects of international financial life.

A comforting thought today is that, although Eugene Black may shortly be relinquishing his present office, he cannot escape from remaining an international figure. I think I can express the hope, as President Kennedy did in his address yesterday, that when difficult problems arise in the future, Eugene Black will still be willing to make his services available in situations for which his exceptional talents befit him. So we now wish him great satisfaction in his future activities—which, I am sure, will from time to time include a return to the international scene. When Mr. Black in his address on Tuesday announced his decision to relinquish the Presidency of the Bank, he said that this would be the last time he would be attending this meeting in his present capacity. Perhaps we may take this as a hint that he will be prepared to attend in some other capacity; but whatever the capacity, I can assure him that he will always be welcomed and honored whenever we assemble in the future.

Delivered at the Closing Joint Session, September 21, 1962.

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