Chapter

Committee Reports

Author(s):
International Monetary Fund. Secretary's Department
Published Date:
November 1948
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Procedures Committee

Chairman:China
Vice-Chairman:France
Reporting Member:Colombia

Member: Australia, Denmark, India, Italy, Peru, Poland, Turkey, United Kingdom, United States

Report No. 1

Mr. Chairman:

The Procedures Committee, at its first meeting4 at 10:00 a.m. on September 27, 1948, considered the matters of business which had been proposed for the Third Annual Meeting of the Boards of Governors of the Fund and the Bank.

I have the honor to submit the following recommendations of the Committee:

I. Business of the Board of Governors of the Fund

A. Agenda

The Committee recommends:

1. Adoption of the agenda attached hereto as Annex I.

2. That after the adoption of the initial agenda, proposed additions be submitted in writing to the Procedures Committee, through its Chairman, for its consideration and recommendation.

B. Committees

The Committee recommends:

1. Establishment of the following Committees of the Board of Governors of the Fund:

Committee on Membership (Joint with the Bank)

Committee on Finance

Committee on Rules and Regulations

2. Composition of these Committees as shown on Annex II

3. References to the Committees as shown on Annex III, for consideration and report to the Board of Governors of the Fund.

C. Second Regular Election of Executive Directors

The Committee considered the Report of the Executive Directors,5 dated September 3, 1948, regarding the Second Regular Election of Executive Directors and recommends the adoption of the draft Resolution on the Second Regular Election of Executive Directors attached as Annex IV.

D. Items for Information

The Committee considered the following Documents 6 presented by the Executive Directors of the Fund:

1. Report on Proposed Convention on the Privileges and Immunities of the Specialized Agencies.

2. Report concerning the establishment of an International Trade Organization.

3. Supplementary Report of the Executive Board on Relations with the International Trade Organization.

The Committee recommends that the Board of Governors note these Documents as being for their information only.

III. Procedural Matters of Joint Concern to the Fund and Bank7

A. Order of Business

The Committee recommends:

1. Adoption of the order of business as tentatively scheduled on Annex IX.

2. That the Secretaries of the Fund and Bank, in consultation with the Chairman, be authorized to change the schedule, if necessary, as the work of the Meeting progresses.

B. Conduct of Meeting

The Committee recommends approval of the provisions relating to the conduct of this Meeting, as contained in Annex X.

C. Procedural Items

The following procedural items will be dealt with in a later report8 of this Committee to the Board of Governors:

1. Site and Date of Fourth Annual Meeting.

2. Election of Officers and Composition of Joint Procedures Committee for 1948-1949.

In the name of the Committee I have the honor to move the approval of this Report and the adoption of its recommendations.

Approved:

(s)(s)
Y. W. WangEmilio Toro
(China)(Colombia)
ChairmanReporting Member

The Report was approved and its recommendations adopted by the Board of Governors at Session No. 1 (Joint), September 27, 1948.

Annex I. Agenda

1. Third Annual Report of the Executive Directors.

2. Financial Statements and Report on Audit.

3. Administrative Budget for the Fiscal Year ending April 30, 1949.

4. Application of the Kingdom of Siam for Membership in the Fund.

5. Reduction in the Quota of Honduras.

6. Changes in Rules and Regulations.

7. Proposed Amendment to Section 14 (f) of the By-Laws.

8. Second Regular Election of Executive Directors.

9. Site and Date of Fourth Annual Meeting.

10. Election of Officers and Procedures Committee for 1948-1949.

Items for Information

11. Report on proposed Convention on Privileges and Immunities of the Specialized Agencies.

12. Report concerning the establishment of an International Trade Organization and Supplementary Report on Relations with the I. T. O.

Annex II. Composition of Committees of Board of Governors

Committee on Membership (joint with Bank)
Chairman:Egypt
Vice-Chairman:Costa Rica
Reporting Member:Luxembourg
AustriaHondurasPhilippine Republic
ChinaIndiaUnited Kingdom
El SalvadorIranUnited States
FinlandNorwayVenezuela
FrancePanama
Committee on Finance
Chairman:Netherlands
Vice-Chairman:Bolivia
Reporting Member:Syria
ChileGreeceUnion of South Africa
ChinaGuatemalaUnited Kingdom
Dominican RepublicIndiaUnited States
EcuadorIraqYugoslavia
FranceParaguay
Committee on Rules and Regulations
Chairman:Belgium
Vice-Chairman:Brazil
Reporting Member:Iceland
CanadaFranceUnited Kingdom
ChinaIndiaUnited States
CubaLebanonUruguay
CzechoslovakiaMexico
EthiopiaNicaragua

Annex III. Terms of Reference of Committees of Board of Governors

Committee on Membership (Joint with Bank)

Consideration of:

(a) Application of the Kingdom of Siam for membership in the Fund.

(b) Report of the Executive Directors with respect to a request by the Government of Honduras for a reduction of its quota.

Committee on Finance

Consideration of:

(a) Financial Statements and Report on Audit.

(b) Administrative Budget for the Fiscal Year ending April 30, 1949.

Committee on Rules and Regulations

Consideration of:

(a) Changes in Rules and Regulations adopted by the Executive Directors during the year.

(b) Report of the Executive Directors on proposed amendment to Section 14 (f) of the By-Laws.

Annex IV. Draft Resolution on Second Regular Election of Executive Directors of the Fund9

RESOLVED:

(a) That the Report of the Executive Directors of the Fund, dated September 3, 1948, regarding the Second Regular Election of Executive Directors, is hereby approved;

(b) That the Proposed Rules for the Conduct of the Second Regular Election of Executive Directors, attached to said Report of the Executive Directors, are hereby adopted as the rules for the conduct of said election;

(c) That Resolution No. 10 adopted by the Board of Governors at its Inaugural Meeting in March 1946 is hereby repealed; and

(d) That the Third Regular Election of the Executive Directors shall take place at the annual meeting of the Board of Governors in 1950.

Annex IX.10 Order of Business11

MONDAY, September 27, 1948

3:00 p.m.—Joint Session of Boards of Governors

Address by Chairman

Responses First Report of the Joint Procedures Committee

TUESDAY, September 28, 1948

10:00 a.m.—Fund Board of Governors

Presentation of Third Annual Report

11:00 a.m.—Fund Committee on Finance

12:00 noon—Fund Committee on Rules and Regulations

3:00 p.m.—Joint Committee on Membership

3:30 p.m.—Fund Board of Governors Discussion on Third Annual Report

WEDNESDAY, September 29, 1948

10:00 a.m.—Bank Board of Governors

Presentation of Third Annual Report

11:00 a.m.—Bank Committee on Finance

12:00 noon—Bank Committee on Rules and Regulations

3:30 p.m.—Bank Board of Governors

Discussion on Third Annual Report

THURSDAY, September 30, 1948

10:00 a.m.—Fund Board of Governors

Committee Reports

Election of Executive Directors

3:00 p.m.—Bank Board of Governors

Committee Reports

Election of Executive Directors

FRIDAY, October 1, 1948

10:00 a.m.—Joint Procedures Committee

Site and Date of Fourth Annual Meeting

Election of Officers and Composition of Joint

Procedures Committee for 1948–1949

3:00 p.m.—Joint Session of Boards of Governors

Report of Joint Procedures Committee

Closing Remarks

Annex X. Provisions Relating to the Conduct of the Meeting

Attendance

(a) The opening and closing joint sessions of the Boards of Governors of the Fund and the Bank and the sessions at which the Annual Reports of the Fund and the Bank are presented shall be open to the press and the public; all other sessions of the Boards of Governors of the Fund and Bank and all meetings of their committees shall be closed to the press and public.

(b) All joint sessions of the Boards of Governors of the Fund and Bank and all sessions of either Board of Governors shall be open to accredited observers; all meetings of the committees of the Boards of Governors of the Fund and Bank shall be closed to such observers.

(c) Any meeting of the committees of the Boards of Governors of the Fund or the Bank, with the exception of the meetings of the Joint Procedures Committee, shall be open to the attendance, as observers, of those Governors and Alternate Governors who are not members of the committee and their authorized advisors.

(d) All sessions of the Boards of Governors and all meetings of committees shall be open to such members of the joint secretariat and the technical staffs of the Fund and Bank as may be necessary to the orderly conduct of business.

Public Information

The Chairman of the Boards of Governors, the Managing Director of the Fund, and the President of the Bank are authorized to communicate to the press such information concerning the proceedings of the Third Annual Meeting of the Boards of Governors as they deem suitable.

Records

(a) The Secretaries of the Fund and the Bank are authorized to have prepared a verbatim transcript of the proceedings of all sessions of the Boards of Governors of the Fund and Bank.

(b) The Secretaries of the Fund and Bank are authorized to have prepared summary records of all proceedings of the committees of the Boards of Governors.

(c) Reports of committees submitted to the Boards of Governors shall be signed by the Committee Chairman and the Reporting Member.

Report No. 2

Mr. Chairman:

I have the honor to submit for approval the Report of the Joint Procedures Committee on its second meeting held at 10:00 a.m., Friday, October 1, 1948.

I. Site and Date of Fourth Annual Meeting

The Committee took up the question of the site of the Fourth Annual Meeting. The Governor for France repeated the invitation which he had extended at the Second Annual Meeting to hold the meeting in Paris.

The Committee discussed the advantages and disadvantages of holding the annual meetings away from the site of the Fund and Bank. It was agreed that there appeared to be greater advantage in holding the next annual meeting in Washington; but that meetings outside Washington should be held from time to time. The Committee further agreed that, in the light of the invitation from France, a recommendation should be made that the Boards of Governors at their next meeting consider Paris as the site for the meeting in 1950.

There was agreement that the next annual meeting should be held during September 1949. It was urged that the time should be scheduled so as not to conflict with other international meetings.

It is recommended that the resolution attached as Annex I be adopted.

II. Nominations of Officers for Ensuing Year

On the proposal of the Chairman, the Committee unanimously agreed to recommend to the Boards of Governors that the Governor for France be elected Chairman for the ensuing year and the Governors for China, India, United Kingdom and United States be elected Vice-Chairmen. Accordingly, the Committee recommends to the Boards of Governors the adoption of the draft resolution attached as Annex II.

III. Composition of Joint Procedures Committee for Ensuing Year

The Committee then considered the composition of the Procedures Committee of the Fund and Bank for the ensuing year and recommends to the Boards of Governors the adoption of the draft resolution attached as Annex III.

IV. Fund Resolution on the Death of Harry D. White

The Committee then considered the resolution on the death of Harry D. White which the Governor for Guatemala had transmitted on behalf of the Governors for the Latin American members and the Republic of the Philippines. The Committee recommends the adoption of the resolution attached as Annex IV. In this connection, the Governor for Colombia presented a statement on behalf of the same Governors for inclusion on the Committee’s records.

V. Procedure for Future Meetings

The Governor for the United States urged that, for future meetings of the Boards of Governors, consideration should be given to the desirability of encouraging full and open discussions among the Governors on matters of substance and policy relating to the Fund and Bank. He believed that such an open exchange of views on important issues at each meeting would contribute to the strength and growth of the two institutions. His suggestion was supported by other Governors for recommendation to future Procedures Committees.

The Committee recommends approval of this Report and the adoption of the attached resolutions.

Approved:

(s)00
Yun-wu WangEmilio Toro
(China)(Colombia)
ChairmanReporting Member

The Report was approved and the Resolutions adopted by the Board of Governors at Session No. 5 (Joint), October 1, 1948.

Annex I. Draft Resolution on Site and Date of Fourth Annual Meeting 12

RESOLVED:

That the future meetings of the Fund should be held in Washington and that the Chairman shall convene the Fourth Annual Meeting of the Board of Governors of the International Monetary Fund in Washington, D. C, in the month of September 1949, but that meetings outside Washington should be held from time to time, and it is recommended that the Board of Governors should consider the first such meeting outside Washington taking place in Paris in 1950.

Annex II. Draft Resolution on Officers of Board of Governors13

RESOLVED:

That the Governor of France is hereby elected Chairman, and the Governors of China, India, United Kingdom and United States are hereby elected Vice-Chairmen of the Board of Governors of the International Monetary Fund, to hold their respective offices until the election of officers of the International Monetary Fund takes place at the close of the next annual meeting.

Annex III. Draft Resolution on Composition of Procedures Committee14

RESOLVED:

That a Procedures Committee be hereby established, to be available after the termination of this meeting, and until the election of officers of the International Monetary Fund takes place at the next annual meeting, for consultation at the discretion of the Chairman, normally by correspondence, and also if occasion requires by convening immediately before the annual meeting of the Board. The Procedures Committee shall consist of the Governors of the following members:

China, Ethiopia, France, Iceland, India, Luxembourg, Union of South Africa, United Kingdom, United States, Uruguay, Venezuela and Yugoslavia.

The Chairman, Vice-Chairman and Reporting Member shall be the Governors of France, India and the Union of South Africa, respectively.

Annex IV. Draft Resolution on the Death of Harry D. White 15

WHEREAS, the late Harry D. White was one of the leading framers of the structure as well as the Articles of Agreement of the International Monetary Fund and the International Bank for Reconstruction and Development;

WHEREAS, he devoted the greater part of his last years to building up those institutions and served as Executive Director of the International Monetary Fund in its initial year of functioning;

WHEREAS, the same Harry D. White passed away in the latter part of the month of August last, and the Governors of the International Monetary Fund want to honor his memory and his contribution to the building of these institutions;

THEREBY, in recognition of these premises, the Governors for the International Monetary Fund hereby RESOLVE:

To record in the proceedings of this meeting the profound sorrow of the Board of Governors because of the death of Harry D. White.

Committee on Membership

Chairman:Egypt
Vice-Chairman:Costa Rica
Reporting Member:Luxembourg

Members: Austria, China, El Salvador, Finland, France, Honduras, India, Iran, Norway, Panama, Philippine Republic, United Kingdom, United States, VenezuelaMembers: Austria, China, El Salvador, Finland, France, Honduras, India, Iran, Norway, Panama, Philippine Republic, United Kingdom, United States, VenezuelaMembers: Austria, China, El Salvador, Finland, France, Honduras, India, Iran, Norway, Panama, Philippine Republic, United Kingdom, United States, VenezuelaMembers: Austria, China, El Salvador, Finland, France, Honduras, India, Iran, Norway, Panama, Philippine Republic, United Kingdom, United States, Venezuela

Mr. Chairman:

The Committee met at 3:00 p.m. on September 28, 1948,16 under the Chairmanship of Mr. Saad, the Governor for Egypt, and considered the reports of the Executive Board with respect to the application of the Government of the Kingdom of Siam for membership in the Fund and with respect to a reduction in the quota of Honduras.

In the name of the Joint Committee on Membership, I have the honor to recommend to the Board of Governors of the Fund the adoption of the draft resolution attached hereto as Annex I relating to the terms and conditions on which Siam shall be admitted to membership in the Fund.

The Committee also recommends that the Board of Governors adopt the draft resolution attached hereto as Annex II concerning an adjustment in the quota of Honduras.

Approved:

(s)(s)
A. Z. SaadHugues Le Gallais
(Egypt)(Luxembourg)
ChairmanReporting Member

The Report was approved and the Resolutions adopted by the Board of Governors at Session No. 4, September 30, 1948.

Annex I. Draft Resolution Relating to the Terms and Conditions on Which Siam Shall be Admitted to Membership in the Fund17

WHEREAS, the Government of the Kingdom of Siam has applied for admission to membership in the International Monetary Fund in accordance with Section 2 of Article II of the Articles of Agreement of the Fund; and

WHEREAS, pursuant to Section 21 of the By-Laws of the Fund, the Executive Board after consultation with representatives of that Government has made recommendations to the Board of Governors with regard to the quota to be subscribed by the Government of the Kingdom of Siam and other conditions, which in the opinion of the Executive Board, the Board of Governors might wish to prescribe;

NOW THEREFORE, the Board of Governors, having considered the recommendations of the Executive Board, hereby resolves that the Government of the Kingdom of Siam shall be admitted to membership in the International Monetary Fund under Article II, Section 2, of the Articles of Agreement on the following terms and conditions:

(1) That the quota of Siam shall be $12,500,000;

(2) That its subscription shall be equal to its quota, and that not less than 25 per cent of the subscription shall be paid in gold and the balance in the currency of Siam;

(3) That the portion of the subscription to be paid in gold shall be paid on or before the date on which the Articles of Agreement shall have been signed on behalf of Siam;

(4) That within thirty days after the Fund so requests, Siam shall communicate to the Fund the par value of its currency based on the rates of exchange prevailing on the date Siam becomes a member of the Fund, and within sixty days following the Fund’s receipt of the communicated par value Siam and the Fund shall agree on an initial par value for the currency; provided that the Fund may extend the period of sixty days, and that Siam shall be deemed to have withdrawn from the Fund if agreement on a par value has not been reached when the extended period expires;

(5) That Siam may not engage in exchange transactions with the Fund before the thirtieth day after the par value of its currency has been agreed in accordance with (4) above and its subscription shall be paid in full before such thirtieth day;

(6) That Siam shall become a member of the Fund subject to the terms and conditions set forth in this resolution as from the date when Siam has complied with both of the following requirements:

a. Siam shall deposit with the Government of the United States of America an instrument stating that it has accepted in accordance with its law the Articles of Agreement and all the terms and conditions prescribed in this resolution, and that it has taken all steps necessary to enable it to carry out all its obligations under the Articles of Agreement and this resolution; and

b. Siam shall sign the original copy of the Articles of Agreement held in the Archives of the Government of the United States of America.

(7) That Siam may accept membership in the Fund pursuant to this resolution until March 31, 1949, provided, however, that if extraordinary circumstances are deemed by the Executive Directors to warrant an extension of the period during which Siam may accept membership pursuant to this resolution, the Executive Directors may extend such period until such later date as they may determine, but in no event beyond October 1, 1949.

Annex II. Draft Resolution on the Proposed Reduction in Quota of Honduras 18

RESOLVED:

That the quota of Honduras shall be changed to $500,000, provided that Honduras consents to the change by a written notice which is in a form satisfactory to the Fund and is received by the Fund within ninety days from the date of adoption of this resolution. Such change shall become effective on the date the Fund receives such notice but not sooner than the date of this resolution.

Committee on Finance

Chairman:Netherlands
Vice-Chairman:Bolivia
Reporting Member:Syria

Members: Chile, China, Dominican Republic, Ecuador, France, Greece, Guatemala, India, Iraq, Paraguay, Union of South Africa, United Kingdom, United States, Yugoslavia

Mr. Chairman:

I have the honor to report the recommendations of the Committee on Finance on the agenda assigned to it.

The Committee held its first meeting at 11:00 a.m. on Tuesday, September 28, 1948,19 and considered the Report on Audit for the fiscal year ended April 30, 1948, with the Financial Statements contained therein, and the Administrative Budget for the fiscal year ending April 30, 1949.

With regard to the Report on Audit, the Committee noted that, in connection with the Auditors’ suggestions that the present method of showing the Fund’s gold holdings should be changed, the Executive Directors had concluded that the Fund’s present method, which is in conformity with the practice of leading Central Banks, and which is acknowledged by the Auditors to make full disclosure of the true position, would be continued.

It was noted with satisfaction that there had been an increment to net capital during the period under review.

The Governor for South Africa drew attention to the expenditure for compensation for national income taxation and inquired if representations had been made to obtain exemption from such taxation.20 The Managing Director explained that the expenditure was largely with respect to the taxation paid by members of the staff who were nationals of the United States and stated that representations would be continued.

With regard to the Administrative Budget, the Chairman welcomed, and in doing so was supported by the Governor for the United Kingdom, the institution of a Retirement Plan for the Staff and suggested that at their next annual meeting the Governors should have a report on the operation of the retirement fund.

In the name of the Fund Committee on Finance, I have the honor to recommend to the Board of Governors of the Fund the adoption of the following resolution:21

RESOLVED:

That the Board of Governors considers the Report on Audit for the fiscal year ended April 30, 1948, the Financial Statements contained therein and the Administrative Budget for the fiscal year ending April 30, 1949, as fulfilling the requirements of Article XII, Section 7, of the Articles of Agreement and Section 20 of the By-Laws.

Approved:

(s)(s)
P. LieftinckFaiz El-Khouri
(Netherlands)(Syria)
ChairmanReporting Member

The Report was approved and the Resolution adopted by the Board of Governors at Session No. 4, September 30, 1948.

Committee on Rules and Regulations

Chairman:Belgium
Vice-Chairman:Brazil
Reporting Member:Iceland

Members: Canada, China, Cuba, Czechoslovakia, Ethiopia, France, India, Lebanon, Mexico, Nicaragua, United Kingdom, United States, Uruguay

Mr. Chairman:

The Committee met at 12 noon on September 28, 1948, under the Chairmanship of Mr. Frere, and considered a proposed amendment to the By-Laws and the changes made in the Rules and Regulations since the last Annual Meeting.

Rules and Regulations

The Committee reviewed the changes 22 in the Rules and Regulations of the Fund, submitted by the Executive Directors to the Board of Governors and recommends that the Board adopt the following resolution: 23

RESOLVED:

That the Board of Governors of the Fund hereby notifies the Executive Directors that it has reviewed the amendments and additions to the Rules and Regulations adopted by the Executive Directors since the Second Annual Meeting and has no changes to suggest.

By-Laws

The Committee recommends to the Board of Governors that Section 14 (f) of the By-Laws be amended to read as follows:24

Section 14. Terms of Service

(f) The Executive Directors and their Alternates are to be reimbursed, in addition, for all reasonable expenses incurred during absence from the seat of the Fund while on the designated service of the Fund. Executive Directors and their Alternates shall be reimbursed for authorized representation expenses actually incurred while they are absent from the seat of the Fund on a special mission at the request of the Fund. They shall also be reimbursed for travel and transportation expenses for themselves, their families, and their personal effects in moving once to the seat of the Fund during or immediately before their periods of service and in moving once from the seat during or immediately after their periods of service.

In addition, any Executive Director or Alternate who, while holding office continuously in either capacity, has served three years as a full-time Director or Alternate, shall be entitled upon the completion of each three years of such full-time service to reimbursement for the cost of transportation expenses for his family in traveling once to and from the country of which he is a national; provided that the Fund may arrange for reimbursement for such expenses incurred by a Director or Alternate during the third year of a three-year period of such full-time service.

The new second paragraph is intended to afford the families of Directors and Alternates, who serve the Fund on a full-time basis, an opportunity to visit the countries of which they are nationals. This arrangement will be substantially the same as that provided for the staff of the Fund. The text will permit the possibility of reimbursement in cases where families of Directors and Alternates, who have served more than two years, have returned to their homes in anticipation of repatriation following the second regular election but who nevertheless were elected for another two years. It is intended that the amendment should be administered with sufficient flexibility to take care of particular cases when equity justifies it. It is understood, for instance, that the Fund could grant the benefit of this amendment to a Director who, although not having served “full time” in the strict sense of this term, could reasonably be considered as having served as such in practice.

In addition, the phrase “terms of office” in the existing subsection would be changed to “periods of service”. This change will have no substantive effect but is intended to avoid any possible ambiguity as to the intention of the subsection.

Approved:

(s)(s)
Maurice FrereAsgeir Asgeirsson
(Belgium)(Iceland)
ChairmanReporting Member

The Report was approved and the Resolutions adopted by the Board of Governors at Session No. 4, September 30, 1948.

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