- International Monetary Fund
- Published Date:
- January 1971
On July 28, 1969 the amendment of the Articles of Agreement of the International Monetary Fund took effect, and on August 6, 1969 the Special Drawing Account came into being. On October 3, 1969 the Board of Governors decided that a total of special drawing rights equivalent to approximately $9.5 billion would be allocated during the period of three years beginning on January 1, 1970. An allocation equivalent to $3.414 billion was made to 104 participants on that date, and another equivalent to $2,949 billion was made to 109 participants one year later. By that time, 110 of the 117 member states in the Fund had become participants in the Special Drawing Account.
In the provisions of the Articles that govern special drawing rights, the states that participate in the Special Drawing Account have a potentially powerful mechanism for affecting the volume of liquidity available to them and for helping to avoid economic stagnation and deflation in the world as well as excess demand and inflation.
International agreement on special drawing rights was the result of discussions and negotiations conducted mainly in the Fund and in the Group of Ten. These discussions and negotiations were interrelated, in various ways. The members of the Group of Ten are also members of the Fund.1 Representatives of the Managing Director of the Fund took part in the deliberations of the Group of Ten,2 and studies prepared by the staff of the Fund were made available to it. At one stage, four joint sessions were held of executive directors of the Fund (though not as the organ entitled the Executive Directors) and the Deputies of the Ministers and Central Bank Governors of the Group of Ten. Drafting of the Outline and later the amendment of the Articles, which was based on the Outline, was undertaken in the Fund.
Published sources of the international agreement on special drawing rights include the Annual Reports of the Executive Directors of the Fund,3 Summary Proceedings of the Annual Meetings of the Board of Governors of the Fund, communiqués of the Ministers and Governors and of the Deputies of the Group of Ten, and reports of the Deputies. Certain communiqués of the Ministers of the European Economic Community also have a bearing on the agreement and on its formulation as an amendment of the Articles.
This pamphlet deals with one aspect of the drafting of the amendment, the choice of language, and more particularly the two expressions “special drawing rights” and “a supplement to existing reserve assets.” A study of the terminology of the amendment is not jejune, because it will help to clarify the agreement that was reached and the future possibilities of that agreement. It will also show the contribution that language can make, if not to the reconciliation of opposing views, then at least to their accommodation, so that it becomes possible for all to subscribe to the “concord of this discord.” The effort expended in the search for a suitable terminology was only part of the much larger effort required to reach agreement, but it was considerable. The choice of terminology enabled the proponents of divergent views to insist that their opinions had prevailed. The effort that made this form of concord possible was not misspent because the difference of opinion that provoked it has become inactive.