Address by the Alternate Governor for France²—Wilfrid Baumgartner

Mr. Chairman, I should like first of all to convey to you as well as to Mr. Black and Mr. Jacobsson the apologies of the Finance Minister, Mr. Gaillard,³ who is detained in Paris by his official duties. He was looking forward with much pleasure to his Washington visit and would have been extremely interested to attend your Meetings. He would certainly have been most anxious to add his own wishes to those that have been paid our two organizations, as well as the International Finance Corporation, for their efforts during the past year and for the reports they made of their activities.

During the past year our organizations have truly engaged in a considerable amount of activity, many member countries having faced a certain number of difficulties in the midst of an inflationary period. It is in such times that good doctors are particularly welcome. You will not be surprised to hear me address my particular thanks to the International Monetary Fund for the help it gave my own country in several instances.

France has indeed had her share of world difficulties but, facing the doctors, I believe that I am in a position to say that my country is today convalescent rather than sick. Of course, we have still to tackle serious problems, but what really matters in such cases is the will to recover and France, which has never worked so hard or accomplished so much economic progress, has that will.

Mention has been made here of certain measures which were taken in France during the month of August. My Government deemed it necessary to adopt these measures which, although not so simple as it could have been hoped for in their detailed provisions, did actually meet the requirements of the situation and complied with the advices widely given to us.

I should like to recall that our previous system, apart from a specified rate of exchange, included several import taxes and a rather intricate mechanism of export aid. We have substituted for this a more simple and, if I may say so, more monetary system which implies perhaps two rates but undeniably is in the right direction. In fact, the International Monetary Fund judged it so.

What have been the results of these measures? Unquestionably, the lack of confidence in the franc, which had grown month after month, has now subsided. In the beginning of September, Mr. Gaillard was able to give figures showing how much the previous trend had reversed and I can tell you that since then the improvement has been confirmed.

During our discussions, there has been some talk about speculation. Of course, speculation should not be considered as the only scapegoat. However, I can only be glad for my country that speculation against the franc, which at the same time increased other countries’ surpluses or reduced their deficits, has been stopped. I am also pleased with the very firm statements which have been made by the representatives of other countries to the effect that they will maintain the parity of their currencies. France, firmly determined to maintain her new parity, also knows that the difficulties encountered by other countries would not, in the long run, alleviate her own difficulties.

We realize that we still have a good deal to achieve. This is not to say that the steps already taken are negligible. The budgetary deficit, which was our weakest spot, has been appreciably reduced. As for our credit policy, we recently took more drastic measures than in any period since World War II. We shall pursue this policy, not only to achieve a unified system of exchange, but also to renew the liberalization of trade. The main reason Mr. Gaillard stayed in Paris is to defend and improve the next budget.

His aim is not only to restore order and to re-establish a satisfactory equilibrium between the different segments of our economic life. France, through her traditions, her position, her activity and her wealth, has to pursue greater tasks. The Governor for the United Kingdom has rightly recalled the help given by his country to underdeveloped countries. We have also made important efforts for similar countries without up to now asking for much help from the International Bank. We now intend to submit to the Bank some applications which, we hope, will bring its participation to the vast development projects we are working on in Africa.

In Europe, efforts are under way for the creation of a common market which will require a great deal of mutual understanding and concessions. Also, France does not lose sight of this objective. Our Government considers it to be of utmost importance and will subordinate its actions to reach this goal. In this respect, I wish to associate myself with the words spoken, day before yesterday, by the Governor for the Federal Republic of Germany. When you opened this Meeting, Mr. Chairman, you expressed some concern on this account. I wish to say after my German colleague, being sure to express a point of view common to the six countries involved, that by trying to end the economic parceling-out of Europe, these countries are convinced they will considerably increase their economic efficiency and will thus be able to improve the standard of living of their populations and also participate more actively in world trade. Should I recall that the very preamble to the Treaty of Rome aims at “the gradual lowering of world trade barriers,” which is also one of the main goals of the International Monetary Fund.

The economic growth of Europe should itself be considered within the larger framework of basic problems which come to the attention of the Bank and the Fund, one of which is the lack of international liquidity. In this respect, many obstacles will still have to be overcome but we are convinced that the spirit of confidence and cooperation which inspired our two organizations will greatly facilitate our common task.

I should like to close my remarks by thanking the Government of the United States for the hospitality which, once again, it has extended to us in this capital. I should also like to express my particular satisfaction at the simultaneous admission to membership in our two organizations of Morocco and Tunisia. On behalf of my Government and on behalf of the whole French Delegation, I should like to address to our two new colleagues the warmest wishes of France and of the French franc area to which I should like to add my best personal wishes.

Address by the Governor for El Salvador—Carlos J. Canessa

The fiscal year ending on June 30, 1957, has been both for the Fund and the Bank a very interesting and important one. Our two institutions have made great contributions to the economies of the free world and have set their sights higher for future objectives.

The Fund, under the invigorating leadership of its present Managing Director, Mr. Per Jacobsson, has, during this past fiscal year, shown resoluteness and shrewdness. Transactions of unprecedented proportions have been undertaken and monetary crisis averted in several instances by the Fund’s valiant action under trying and difficult circumstances. We hope that the Fund will continue this policy and make its resources available to those member countries which need and request temporary assistance.

El Salvador had occasion to negotiate a drawing on the Fund during the period under review and was very favorably impressed by the expeditious manner in which our request was decided. I am happy to say that, as the object of the purchase of dollars was to fill a seasonal need of foreign exchange, the transaction was cancelled within a few months. I think that ours was a typical case of the important services which the Fund can give and which characterizes the revolving nature of its operations.

We extend our congratulations to Mr. Jacobsson and to the Executive Directors, who, I am certain, have given him valuable support. …

This year has again been characterized by advancing interest rates and tighter money in most of the countries of the world. Inflation, real or potential, has been the theme of primary importance in all financial and monetary circles. However, I think that we should, in the future, observe with interest some signs of weaknesses in the upsurge, some omens of negative tendencies. In the case of many Latin American countries, for instance, and also, I believe, in the case of some Near and Far Eastern countries, basic agricultural commodities have shown alarming symptoms of weakness, due either to excessive increased production or organized bearish pressure on the international markets. Coffee, an article of great importance to many countries of the world, has lately been demonstrating symptoms of debility. Cotton, another international commodity of vast interest to many nations, continues on an artificial basis. If these and similar products of prime importance to underdeveloped nations should continue the trend now discernible, we would, in the affected member countries of these two great international institutions, pass from the threat of inflation or the ailments of prosperity to the equally dangerous threat of deflation and the sufferings of depression.

The nations of the world are now so closely interrelated, especially on the economic level, that it is hard to conceive of one sector of the universal economy enjoying great riches and another sector of this same interrelated economy struggling in the depths of economic despair. From this point of view, then, I would recommend alertness and foresightedness, lest we commit the unpardonable crime of converting the magnificent position of today into a tragedy of tomorrow.

May I also take this opportunity, on behalf of the Government of El Salvador and of our Delegation, to thank the Executive Directors of the Fund and the Bank for having recommended, and the Boards of Governors for having approved, our request for an increase in the quota of El Salvador in the Fund¹ and a parallel increase in our capital subscription to the Bank.

In closing, I wish, in the name of my colleagues and myself, to congratulate you, Mr. Chairman, on the excellent manner in which you have presided over this Meeting, and to express to the Government and Delegates of the United States our gratitude for their gracious hospitality.

Address by the Alternate Governor for the Philippines—Eduardo Z. Romualdez

… Four years ago, in a panel discussion of monetary policies, the Director of Research of the Fund observed that the use of monetary policy had strengthened confidence in currencies, that it could no longer be assumed that the value of money would move uninterruptedly in one direction—downward—and that people were again encouraged to save and hold national currencies instead of seeking refuge in gold and dollars.

Monetary events since then make that statement seem like the voice of a past era. As mentioned repeatedly in the statements of our distinguished colleagues during the past three days, there has been a general upsurge of inflationary forces starting about the middle of the present decade, prices have gone up the world over, and the purchasing power of practically every currency has suffered a diminution.

It is easy enough on the basis of this to arrive at the rather obvious conclusion that monetary policy has not, is not, and cannot be expected to be the sole effective instrument in maintaining the value of money. To say this is to say very little that is significant.

The developing countries are particularly concerned at inflationary stresses in the industrial countries because they raise the cost of needed capital goods and thus make development more expensive and more painful. The Philippines, like many other countries, has been feeling the impact of these pressures from the outside.

Our country, as you, Mr. Chairman, have stated on several occasions, has been undertaking its economic development almost entirely with its own limited resources. We have sought to finance the totality of the requirements of the government sector by a sound and judicious balance between taxation and public borrowings, restricting the use of government securities and reparations proceeds to high priority public investments. We are thus, in our opinion, applying the absolute maximum of our own financial resources for economic development purposes. In proportion to the requirements of our economic program, the external assistance we have received thus far, either in the form of loans or investments, has been very meager indeed. It is because of this, and the fact that the prices of our primary products have not increased at the same rate, that unrestrained inflationary conditions in the industrial countries will certainly retard and render much more difficult our efforts to give vitality to our economic growth.

It is to be hoped that the inflationary trend which we have been witnessing recently is merely an interlude and that it will be possible to return to the condition which was observed by the Fund’s Director of Research four years ago. The continued stability of some currencies besides the U.S. dollar, especially that vigorous newcomer on the international financial scene, the deutsche mark, serves to show that the hope is not completely illusory.

Address by the Governor for Ghana—K. A. Gbedemah

On behalf of the new State of Ghana, it is my pleasure and honor to address for the first time what might well be described as the financial parliament of the world. For me and for my country this is a proud and significant moment.

Before I say anything further, may I be permitted to express my gratitude to you, Mr. Chairman, and to all the other Governors who, since the beginning of this Meeting, have expressed their own and their countries’ gratification at the admission of Ghana and the other three countries with whom we were admitted to the Fund and the Bank.

We very much appreciate the good will of everyone toward us, and I would like to assure all concerned that Ghana will always do what she can to further the aims and objects and prestige of these institutions of which we are now so proud to be members.

Some of the Governors here today are probably familiar with the economic situation of Ghana—what I might perhaps call Ghana’s vital statistics, of how we produce and export a third of the world’s cocoa, and of the lesser role in our balance of payments position played by our exports of gold and manganese, timber, and diamonds.

Our economic situation, resulting from the possession of these sources of national income, is not an unfavorable one, as evidenced by the fact that over the last decade, in addition to paying our way on the recurring costs of the administration of government, we have built up relatively large reserves of surplus assets.

But in spite of our prosperity, our economy is precariously agrarian, depending too much on cocoa, which is subject to the vagaries not only of violent world fluctuations but even of the weather.

The source of our greatest hope for a more stable and diversified economy is the possession of vast natural resources of bauxite, from which aluminum is processed and also of considerable water power from the Volta River.

The possibilities for the utilization of both the bauxite and the water power have been investigated in great detail already. If, with help from outside Ghana, we could develop these resources, our country would have a much brighter future than it can foresee at the present time. Should we be unable to do so, it may well be that Ghana would for many decades to come be like a man who complains of hunger while he continues to sit on bags of money.

In the last six and a half years, Ghana has been able to finance a very large program of capital development, expending nearly £80 million from its own resources on colleges and schools, hospitals, new roads, railways, better drinking water, and many of the other social amenities which are the measure of standards of living.

Without being boastful, I can say with pride that few countries the size of ours have been able in a comparable space of time to carry out a program of this magnitude. This achievement has been due to the prudent policy of my Government over the last few years. While world cocoa prices remained at a high level, a considerable proportion of the country’s receipts from its cocoa was paid to development funds.

Last year, however, there was a substantial fall in the world price of cocoa, and we were not able to make any significant contribution to our development funds.

There has since been a rise in the price, but we cannot count on the price’s remaining at its present level, and it seems, therefore, that we may have to look to other sources for financial aid to carry out further major developments of which we still stand in need.

In this connection, may I be allowed to say that, while we have an insignificant external debt, our surplus assets today stand at well over £170 million, and my Government is confident that so long as it follows its present economic policy it will be in a strong position to repay any additional loans which it may require for the implementation of carefully prepared development schemes.

I have indicated that my Government will most probably be seeking external loans in due course. We recognize that, if our country is to be developed at a reasonable rate, our own resources will be insufficient and must be augmented. We shall also work on overseas capital in the field of private investment.

We shall, naturally, wish to insure that, in the case of busy and important industries, a due proportion of the profits remains in our own country, but we do not consider that that is inconsistent with our wish to encourage investment from overseas. We appreciate that investors will expect a fair return on their capital, and my Government is examining its tax structure to see whether any amendments are called for in order to stimulate the process of development.

While it is apparent that, if Ghana is to develop quickly to a state where it can be counted out of the list of technically underdeveloped countries, the raising of external loans cannot be avoided. I wish to make it clear, however, as our country’s representative here, that we are not in a weak position. Ghana, for size and natural resources, many of which are still untapped, is strong, and I believe that it is generally agreed that strong people welcome strong allies who can pull their own weight. Ghana, therefore, in joining the Bank and the Fund comes in as a strong ally, small perhaps, but nevertheless not unlikely to be able to contribute strength to these organizations, and as such we shall, in any assistance that we may require, seek the cooperation of others who are stronger than ourselves, to help us achieve for our nation what we believe are the aims of the Fund and the Bank.

Ghana has only recently achieved political independence, and my Government is now dedicated to the task of achieving as soon as feasible economic self-sufficiency, or at least economic maturity.

I do not intend in this maiden speech to worry you with many details of Ghana’s financial position or of our future monetary arrangements. I will only say that, prior to the year 1956, Ghana through her exports had a favorable balance in her trade, but the position altered last year because of a fall in the price of cocoa, to which I have already referred. We are, however, watching the position carefully and hope that by keeping the price we pay to the producer in line with the world price we shall be able to keep our imports in balance with our exports.

It is not our wish to impose import controls, but we shall not hesitate to do this if it becomes necessary in order to safeguard our balance of payments and to strengthen our economic position.

Recently we have established our central bank, the Bank of Ghana, on what may be described as conservative lines. For the present, only the banking department is functioning, but next year the issue department will open and will issue our new Ghana currency. Because of our long association with Britain and also because of our geographical position, we intend to identify our new money closely with sterling and make it exchangeable at par with sterling.

It is too early to state what effect our new Ghana currency will have on our external economic and financial transactions and on our relations with these international institutions which we have now joined; but, if the prudent policy which we have pursued in recent years, and if the conservatism which characterizes our banking operations are any guide, one can safely assume that nothing but the highest confidence at home and abroad can be engendered.

It will be my pleasure or that of my distinguished Alternate, the Governor of the Bank of Ghana, to inform future Meetings of the Fund and the Bank of the progress which we are making in these matters.

Ghana, like every nation under the sun, feels it is entitled to the good things of life. We are confident that no one can or should blame us for this desire. What we could be blamed for would be if we desired good things at the expense of other peoples. May I assure everyone here and everyone who may come to read these words afterwards, wherever it might be, that the new State of Ghana cannot and will not ride on anyone’s back. We are prepared and determined to work hard for what we can get, and in return others may expect a fair deal.

The address delivered to us here by the President of the United States will be read in Ghana, as I am sure it will be read in other countries desiring stability and progress, with great satisfaction, for what can be more assuring than such words from the leader of the great American people. When the day dawns when the leaders of what must still regrettably be called underdeveloped countries today can also speak the same language as President Eisenhower spoke on Monday, then indeed the time will have come for the Bank to relax its efforts, in the knowledge that its principal task has been completed. May that day come soon. And may I add that the assurances given this morning by President Black of the Bank’s determination not to relax its efforts are most encouraging to us.

On behalf of the Government and people of Ghana, Mr. Chairman, I thank you and the Governors for this opportunity of stating our Ghana case, which I dare to say is the case of many peoples in Asia and Africa today.

Address by the Alternate Governor for Sudan¹—Hamza Mirghani

It is a great honor and privilege for me to speak at this Annual Meeting of the Boards of Governors in the name of the Government of the Republic of the Sudan.

It is less than two years since the Sudan has achieved its independence. But independence has from the start thrown upon us responsibilities far more complex and varied than its political implications. For it has meant for us the beginning of an era of sustained and coordinated effort in every field for the social and economic uplift of our people. The Sudan, however, is not unique in its problems and aims. Looking round the world today, it is clear that the primary objective of governments of all nations, old and new, developed and less developed, is the social and economic progress of their peoples. It was, therefore, natural that we should seek to join hands with governments working with and through international organizations dedicated to this purpose. That is why our admission to the International Monetary Fund and to the International Bank is a matter of special importance for us. On behalf of my Government, I, therefore, wish to express our sincere gratitude to you, Mr. Chairman, and other members for the words of welcome so generously extended, and to the authorities of the Fund and the Bank as well as to all member countries which have assisted in making possible our participation in these two institutions.

As newcomers, we cannot look back and appraise the achievements of the Fund and the Bank with the same intimate knowledge as members who have been closely associated with them for many years past. But from what we have read and the unanimity of praise and appreciation expressed at this Meeting, we can unhesitatingly look to the future with enthusiasm and confidence.

With regard to the Fund, its aims and policies, I would like to assure members that the Sudan has always believed in the promotion of international monetary cooperation and the expansion of world trade—a belief which I am happy to say has almost invariably been translated into action. Liberal trade and exchange practices are maintained in my country in spite of the difficulties encountered as a result of the bilateral and restrictive practices of many other countries. If we are to continue to hold fast to these sound principles, it is vital, we submit, that the pace must be quickened by all concerned toward the achievement of universal multilateralism. We are confident, however, that, with the sustained efforts of individual member countries and with the advice and reasonable assistance which the Fund provides wherever the need arises, the day will soon come when controls and restrictive practices will be things of the past.

On the Bank, we naturally place high hopes regarding the fulfillment of our major development projects. But that does not mean that the Sudanese people will in any way relax their determined efforts to play their role in the achievement of such schemes. We are aware that if the Bank is to fulfill the hopes placed on it by all, it should have access to the maximum possible capital, particularly from its own members. I am pleased to announce that my Government has agreed, in spite of its present dire need of foreign exchange, to release the 18 per cent in three equal yearly installments.

Further, we would like to add our voice to the suggestions that, within the general framework of sound business principles, the needs of less developed countries should be given further special recognition though, of course, never to the exclusion of others. Inasmuch as peace in the world is indivisible, so is prosperity—and to that extent the needs of developed countries should also have their rightful place.

In conclusion, I wish member countries and the authorities of the Fund and the Bank every success in their collective efforts.

Attendance

Board of Executive Directors

Executive Directors	Alternate Executive Directors
Frank A. Southard, Jr.	John S. Hooker
G. F. Thorold	R. E. Heasman
Beue Tann	Ching-Yao Hsieh
Jean de Largentaye	Jean-Maxime Leveque
B. N. Adarkar	P. J. J. Pinto
Ahmed Zaki Saad	Albert Mansour
Andre van Campenhout	Maurice Toussaint
Pieter Lieftinck	H. M. H. A. van der Valk
Carlo Gragnani	Costa P. Caranicas
Octavio Paranagua	Helvecio Xavier Lopes
Rodolfo Corominas-Segura	Julio Gonzalez del Solar
Takeshi Watanabe	Prayad Buranasiri
B. B. Callaghan	Brian Emmott Fleming
Torben Friis	Jouko J. Voutilainen
Jorge Sol	Jorge Hazera
Otmar Emminger	Wilhelm Hanemann
Louis Rasminsky	Alan B. Hockin

View Table

Executive Directors	Alternate Executive Directors
Frank A. Southard, Jr.	John S. Hooker
G. F. Thorold	R. E. Heasman
Beue Tann	Ching-Yao Hsieh
Jean de Largentaye	Jean-Maxime Leveque
B. N. Adarkar	P. J. J. Pinto
Ahmed Zaki Saad	Albert Mansour
Andre van Campenhout	Maurice Toussaint
Pieter Lieftinck	H. M. H. A. van der Valk
Carlo Gragnani	Costa P. Caranicas
Octavio Paranagua	Helvecio Xavier Lopes
Rodolfo Corominas-Segura	Julio Gonzalez del Solar
Takeshi Watanabe	Prayad Buranasiri
B. B. Callaghan	Brian Emmott Fleming
Torben Friis	Jouko J. Voutilainen
Jorge Sol	Jorge Hazera
Otmar Emminger	Wilhelm Hanemann
Louis Rasminsky	Alan B. Hockin