- International Monetary Fund
- Published Date:
- February 1996
THE INTERNATIONAL MONETARY FUND, 1945–1965
Twenty Years of International Monetary Cooperation
Vol. I. Chronicle
Vol. II. Analysis
Vol. III. Documents
This history of the first twenty years of the International Monetary Fund, written by past and present members of its staff, attempts to recount objectively what were its origins and what have been its plans and activities.
Volume I contains a chronological account of the evolution of the Fund from the original plans formulated in 1941 to the end of 1965, with a supplementary chapter summarizing subsequent events. Volume II analyzes the Fund’s policies in three major fields and reviews its constitutional development. Volume III reproduces the major documents referred to in the other two volumes, including some not hitherto published.
The three volumes are being made available to the public in the hope that they will enable those interested to understand more of the nature of the Fund’s work, of its problems, and of the techniques which it has devised.
* * *
$9.00 a volume
$25.00 the set of three volumes
(or the equivalent in most other currencies)
THE INTERNATIONAL MONETARY FUND 1945–1965
Twenty Years of International Monetary Cooperation
VOLUME II: ANALYSIS
Margaret G. de Vries and J. Keith Horsefield
with the collaboration of
Joseph Gold, Mary H. Gumbart, Gertrud Lovasy, and Emil G. Spitzer
J. Keith Horsefield
INTERNATIONAL MONETARY FUND
WASHINGTON, D. C.
Second printing, February 1972
Third printing, May 1981
- Preface to Volume II
- Abbreviations and Definitions
- CHAPTER 1: THE PROCESS OF POLICYMAKING
- CHAPTER 2: OBJECTIVES
- CHAPTER 3: THE PAR VALUE SYSTEM: AN OVERVIEW
- CHAPTER 4: SETTING PAR VALUES
- CHAPTER 5: EXCHANGE RATE ADJUSTMENT
- Margaret G. de Vries
- Two Basic Concepts
- Early Interpretation of Fundamental Disequilibrium
- The Fund’s Authority
- The Devaluations of 1949
- Competitive Depreciation
- Other Devaluations of Concern
- Fears of Competitive Depreciation Through Multiple Rates
- Revaluation by Germany and the Netherlands
- Magnitudes of Depreciation
- The Fund as a Participator
- CHAPTER 6: MULTIPLE EXCHANGE RATES
- CHAPTER 7: FLUCTUATING EXCHANGE RATES
- CHAPTER 8: GOLD TRANSACTIONS AT PREMIUM PRICES
- CHAPTER 9: SUBSIDIES TO GOLD PRODUCERS
- CHAPTER 10: EXCHANGE RESTRICTIONS: THE SETTING
- CHAPTER 11: THE CONSULTATIONS PROCESS
- CHAPTER 12: PROGRESS TOWARD LIBERALIZATION
- Margaret G. de Vries
- Time Path of Policy Developments
- An Incubating Period, 1946–49
- Establishing the Preconditions
- Progress Foreseen, 1950–54
- Time to Lessen Restrictions
- A Start Toward Relaxation
- Retention Quotas
- Convertibility of European Currencies Considered
- Progress Achieved, 1955–58
- Shaping the Fund’s Policy
- External Convertibility Attained
- CHAPTER 13: A CONVERTIBLE CURRENCY WORLD
- CHAPTER 14: THE RETREAT OF BILATERALISM
- CHAPTER 15: THE FUND AND THE EPU
- CHAPTER 16: COLLABORATING WITH THE GATT
- CHAPTER 17: DERIVATION AND SIGNIFICANCE OF THE FUND’S RESOURCES
- CHAPTER 18: EVOLUTION OF THE FUND’S POLICY ON DRAWINGS
- CHAPTER 19: CHARGES, REPURCHASES, SELECTION OF CURRENCIES
- CHAPTER 20: STAND-BY ARRANGEMENTS: PURPOSES AND FORM
- CHAPTER 21: FACTORS IN STABILIZATION PROGRAMS
- CHAPTER 22: THE INSTITUTION
- CHAPTER 23: USE OF THE FUND’S RESOURCES
- CHAPTER 24: THE CODE OF CONDUCT
- CHAPTER 25: THE TECHNIQUES OF RESPONSE
- CHAPTER 26: SOME CHARACTERISTICS OF OPERATION
- CHAPTER 27: THE AMENDMENTS
- INDEX A: Subjects
- INDEX B: Countries
- INDEX C: Articles of Agreement
- INDEX D: Executive Board Decisions
- INDEX E: Publications Cited
- 1. Initial Par Values Established, 1946–65
- 2. Dates of Membership and of Initial Par Values, December 27, 1945-December 31, 1965
- 3. Magnitudes of Exchange Depreciation, End 1948 to End 1965: Distribution of 105 Countries by Degree of Depreciation
- 4. Changes in Par Values, 1948–65
- 5. Exchange Rates Used in Table 3
- 6. Principal Developments in Multiple Exchange Rates, 1946–65
- 7. Fund Members by Article VIII or Article XIV Status, and Completed Consultations, April 1, 1952-March 31, 1966
- 8. Countries with Article VIII Status, as at December 31, 1965
- 9. Bilateral Payments Agreements Maintained by Fund Members in 1955 and 1964
- 10. Voting Power of Executive Directors as Percentage of Total Votes, at Selected Election Dates
- 11. International Monetary Fund: Income, Expenditure, and Reserves, Fiscal Years 1947–66
- 12. General Arrangements to Borrow: Participants and Commitments as at December 31, 1965
- 13. General Arrangements to Borrow: Borrowings by the Fund, 1964–65
- 14. Quotas of Members at Selected Dates
- 15. Fund Transactions by Tranches, 1947–65
- 16. Charges on the Fund’s Holdings of a Member’s Currency in Excess of the Member’s Quota Resulting from Transactions Effected
- 17. Continuous Use of the Fund’s Resources, 1946–65
- 18. Drawings and Repurchases by Currency, 1946–65
- 19. Constitution of Drawing by United Kingdom, December 1964
- 20. Constitution of Drawing by United Kingdom, May 1965
- 21. Ratio of Reserve Position in the Fund to Official Gold and Foreign Exchange Holdings: Selected Countries, as at December 31, 1960 and 1965
- 22. Drawings from the Fund, Calendar Years 1947–65
- 23. Repurchases of Drawings, Calendar Years 1947–65
- 24. Stand-By Arrangements Inaugurated or Renewed, Calendar Years 1952–65
PREFACE TO VOLUME II
The first four parts of this volume deal successively with the process of policy formation and the objectives of the Fund, and with its policies in three main aspects of its work. These chapters are concerned wholly with the period covered by this history, viz., the twenty years 1945–65. Part V differs from the rest of the volume in two respects: in this, the General Counsel of the Fund deals with the constitutional development of the Fund rather than with its economic activities; and he includes a brief description of the amendments to the Articles which entered into force in July 1969, in order to relate past constitutional developments to special drawing rights and the reform of certain features of the Fund.
As indicated in the title, Analysis, given to this volume, the intention is to examine here, more intensively than was possible in Volume I, the Fund’s activities in the various fields chosen for study. The additional dimension here provided has several facets. By bringing together the Fund’s decisions on a given subject, instead of discussing them seriatim as they were taken, it has been possible to bring into sharper focus the reasoning which led to the Fund’s actions. Similarly, where its decisions have been diffused among discussions with a number of different countries, the underlying policy has here been brought out. Further, an attempt has been made to take into account the economic background against which the Fund’s decisions were taken. Finally, some reference has been made to comments on and criticisms of the Fund’s actions by officials and economists not connected with it.
The foundation for this volume was laid by the late Oscar L. Altman, then Historian of the Fund, with the assistance of Mrs. Margaret G. de Vries, Mr. Allan G. B. Fisher, and Miss Mary H. Gumbart. Half of the final text has been written by Mrs. de Vries. Other contributors are Mr. Joseph Gold, the General Counsel of the Fund, who wrote Chapters 22 through 27; Miss Gumbart, who wrote Chapter 8 and contributed preparatory work for parts of Chapters 11, 15, and 17; Mr. Emil G. Spitzer, who wrote Chapters 20 and 21 and prepared early drafts of parts of Chapters 18 and 19; and Mr. J. Keith Horsefield, Mr. Altman’s successor as Historian of the Fund, who wrote Chapters 9, 17, 18, and 19 and has also edited the volume. A part of Chapter 18 was written by Miss Gertrud Lovasy, and Mr. Evan B. Hannay prepared early drafts for some other sections. All those mentioned are or have been members of the staff of the Fund.
At all stages the authors have been greatly assisted by advice and comments from present and former members of the Executive Board and of the staff of the Fund. In particular, Mr. Fisher has made most helpful comments on the draft of each chapter in Parts II, III, and IV. Mrs. de Vries expresses appreciation to Professor Gerard Curzon, of the Graduate Institute of International Studies, University of Geneva, and to Professor Gardner Patterson, of Princeton University, for sharing with her some of their experiences as authors of volumes in related fields and for making suggestions for the contents of this volume. She is grateful also to Professor Robert A. Mundell, of the University of Chicago, for his encouraging interest in the project.
The staffs of the Archivist of the Fund and of the Joint Bank-Fund Library have much facilitated the task of identifying and consulting the relevant documents and volumes.
Mrs. Jane B. Evensen, Assistant Editor of the Fund, has greatly assisted in clarifying the final text.
Mrs. Margaret P. Estes has helped with some of the statistical material and has patiently typed several versions of the manuscript.
Responsibility for the contents of this volume is, however, that of the authors and editor alone.
M. G. de V.
M. H. G.
J. K. H.
E. G. S.
ABBREVIATIONS AND DEFINITIONS
Annual Meetings of the Boards of Governors of the Fund and the Bank, in the year specified. The Meetings of the two institutions are held at the same time and in the same place, and some of the sessions are held jointly. Other sessions, however, are held separately by the Fund and the Bank. When the term Annual Meeting (in the singular) is used, the reference is to a Meeting of the Fund Governors.
Annual Report of the Executive Directors for the Fiscal Year Ended April 30, 19—
Articles of Agreement of the International Monetary Fund
International Bank for Reconstruction and Development
Bank for International Settlements
[Site of] United Nations Monetary and Financial Conference, July 1944
Annual consultations with members by the Executive Board under Article XIV, and parallel consultations with members that have accepted the obligations of Article VIII
Purchase from the Fund by a member of another member’s currency (or other members’ currencies). Amounts are always expressed in U.S. dollars.
Decision of the Executive Board. Until Meeting 630 (at the beginning of 1951), the formal decisions and policy actions of the Executive Board were numbered x-y, where x was the number of the meeting and y that of the decision taken at that meeting (e.g., 2-1 was the first decision taken at Executive Board Meeting 2). Beginning with Meeting 630, the decisions were numbered consecutively; thereafter the number was z-(x), where z was the consecutive number of the decision and x that of the meeting (e.g., 7-(648) was the seventh policy decision taken since Meeting 630, and was taken at Meeting 648). From January 1, 1952, the number of the decision has been followed by the last two figures of the year and the number of the meeting in that year in parentheses (e.g., Decision No. 102-(52/11) was the 102nd decision since Meeting 630, and was taken at the eleventh meeting in 1952).
Economic Cooperation Administration (U.S.)
Economic and Social Council (UN)
European Economic Community
European Monetary Agreement
European Payments Union
European Recovery Program (U.S.)
Food and Agriculture Organization (UN)
First in, first out (pertaining to Fund transactions)
General Arrangements to Borrow
General Agreement on Tariffs and Trade. The term Contracting Parties in capital letters denotes the adherents to the General Agreement acting in concert. The terms contracting parties and contracting party in lower case letters refer to the individual adherents to the General Agreement.
The countries associated in the General Arrangements to Borrow, viz., Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, the United States
Inter-American Development Bank
International Financial News Survey
International Financial Statistics
International Trade Organization
Joint Statement by Experts on the Establishment of an International Monetary Fund
Proposals for an International Clearing Union
Last in, first out (pertaining to Fund transactions)
Organization of American States
Organization for Economic Cooperation and Development
Organization for European Economic Cooperation
Proceedings and Documents of the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 1–22, 1944, 2 vols. (Washington, 1948)
Purchase of its own currency from the Fund by a member country, in reduction of the Fund’s holdings of that currency. Amounts are always expressed in U.S. dollars.
Resolution of the Board of Governors of the Fund. Resolutions at the Annual Meetings of Governors are referred to by the number of the Annual Meeting followed by a dash and the number of the resolution. Resolutions passed at the Inaugural Meeting (Savannah, March 1946) are listed as IM-1, etc., those at the First Annual Meeting (Washington, September 1946) as 1-1, and so on. Resolutions passed by Governors between Annual Meetings are given the number of the next succeeding Annual Meeting.
Selected Decisions of the Executive Directors and Selected Documents, 3rd issue, January 1965
Selected Documents, Board of Governors Inaugural Meeting, Savannah, Ga., March 8 to 18, 1946 (compare Summary Proceedings below)
Summary Proceedings of the … Annual Meeting of the Board of Governors (issued after each Annual Meeting). In early years Summary Proceedings were really summaries, but latterly most speeches made at the Annual Meetings have been printed in full. In these printed reports Governors are named, but in the records maintained in the Fund’s files they are not, being referred to as “Governor” whether they were in fact Governors, Alternate Governors, or Temporary Alternate Governors. Unless, therefore, the speaker can be identified in other ways, it has been necessary, in those parts of this volume that are drawn from unpublished reports, to cite only “Governor for …”.
United Nations Conference on Trade and Development
Proposals for an International Stabilization Fund
International Bank for Reconstruction and Development