Washington is a long way from the romantic scenes along the Bosporus and the Golden Horn, where last we met. It is hard for us here to rival the scenery and the warm hospitality which we all enjoyed there, but I again welcome you most cordially to Washington. I hope you will all have a pleasant visit. We look forward to participating with you in these meetings and to the opportunity of meeting to discuss our mutual problems with you personally.

Address by the Governor for the United States—George M. Humphrey

Washington is a long way from the romantic scenes along the Bosporus and the Golden Horn, where last we met. It is hard for us here to rival the scenery and the warm hospitality which we all enjoyed there, but I again welcome you most cordially to Washington. I hope you will all have a pleasant visit. We look forward to participating with you in these meetings and to the opportunity of meeting to discuss our mutual problems with you personally.

At this opening meeting we should like to express our appreciation of the work of the International Monetary Fund and of the International Bank during the past year. And we are pleased to welcome Argentina and Viet-Nam as new members.

The Fund has continued its valuable work with its member countries in quietly and effectively reviewing with them their monetary and financial policies and working with them to remove unnecessary governmental restrictions. It has provided valuable technical advice and assistance, as well as temporary financial aid where that was required.

The Bank has recorded another outstanding year of constructive help to its members in financing economic development and in encouraging the participation of private capital in its activities. We join with others in welcoming the establishment of the International Finance Corporation, which, we believe, is a very hopeful experiment in getting private investors to join as partners in providing an enlarged flow of venture capital to private enterprises in the member countries.

We congratulate Mr. Rooth, Mr. Black, and Mr. Garner for their leadership and we particularly would like to express to Mr. Rooth, who is ending his term as Managing Director, our warm appreciation for his devoted and distinguished service to the Fund and our very best wishes to him for the future.

The basic problems which confront us in most of our countries are the economic and financial problems arising—happily—out of high prosperity in a world at peace. It might seem surprising that peace and prosperity should cause trouble for Finance Ministers and Central Bank Governors. These present troubles of ours are much more bearable than those of depression or war. They are, nevertheless, very real. These problems arise from the insistent and conflicting demands on available resources in each country. The question, in a few words, is how to finance both needed defense and high prosperity without inflation.

It is our task to balance the demands for defense, high consumption, and for further economic development against available resources. We have to steer as best we can the difficult and often unmarked channel between the whirlpool of inflation and the rocks of deflation.

We who are gathered here—Ministers of Finance and Central Bank Governors—have a very special responsibility to the people of our countries. We are the trustees of the value of our people’s work and skill, which is to say, the value of their money. We are responsible for the value of their wages and salaries, their savings accounts, their pensions and insurance policies, and the other investments they make to provide for the future. This is a sobering responsibility and trusteeship. The average citizen cannot defend himself against the terrible hardships of inflation.

Inflation brings with it grave social injustices and instability. It destroys not only the value of savings but also confidence, security, and social values. Inflation is the crudest form of theft—a theft with greatest harm to those least able to protect themselves. Inflation results in the destruction of the value of money. It is attractive only to those unwise politicians and others who are willing to sacrifice long-term good for unreal but falsely apparent immediate gain.

We here have a special trusteeship, additionally, because inflation destroys the incentive to save and to invest funds. Without such saving and investment in productive enterprise, we cannot have the growing and dynamic economies from which can come more and better jobs and higher standards of living for our growing populations.

It is far too little realized what an important contribution good money—money which people can trust—makes to the soundness of a nation. Confidence in the value of money is one of the greatest spurs to economic progress because it is an incentive to save, and it is our people’s savings over the years—large and small savings alike—which have built up our countries.

This is the trusteeship which we have—to avoid inflation. In this, we are the trustees of the people and the future of our countries. We are the trustees for continued growth and continued peace and prosperity of our people.

We in the United States responsible for the Government’s financial and economic policies have tried to continue to discharge wisely this trusteeship and this responsibility. We have brought the budget into balance. We have freed the economy from artificial restraints and allowed monetary policy to operate for the public good. We can fairly report that, although we are not free from problems, we have had substantial success. Employment is at the highest level in our history. National production is establishing new records. The cost of living has moved within a very narrow range. Confidence is high and savings are growing. This job of nourishing a dynamic U.S. economy, while also maintaining the U.S. dollar as a strong and reliable currency in the world, must be carried forward. This is not only a duty to ourselves; it is an important contribution to all of you, our friends from abroad.

Many of you have similar problems. We have been pleased to see so many of the free world economies grow and strengthen during the past year. It is our hope and belief that the interchange of views in these meetings will give us all greater courage and inspiration in our essential tasks and that the Fund and the Bank will continue to render effective aid at many key points.

Address by the Governor for Iran—Ali Asghar Nasser

It gives me great pleasure indeed to visit once again the beautiful and hospitable city of Washington, to find an opportunity to renew old acquaintances, and to see so many old friends at the World Bank and the International Monetary Fund, as well as other colleagues from the banking centers of the world. I am also deeply grateful for the hospitality and the warm reception accorded us by the city authorities.

May I avail myself of this opportunity to express my appreciation of the ever-increasing success of the Bank and the Fund and to congratulate Mr. Eugene Black and Mr. Ivar Rooth for their admirable organizing ability and foresight which have brought these two institutions to the forefront of international financial organizations.

The valuable lead given by the Fund has indeed paved the way toward the essential aims which are convertibility and freedom of trade. I am very glad to state that Iran has taken long strides toward obtaining that goal by following the Fund’s precepts and establishing a single rate of exchange for various transactions.

We have not only abolished the system of categories for imports, thus bringing all imports under a unified rate of exchange, but have succeeded in extending it to all noncommercial payments as well. As a result, the multiple rates system which was previously in force in Iran has been eliminated.

Greater facilities and more extensive freedom are also provided for our foreign trade, and the physical limitations on imports have largely been removed.

Following the recommendations of the Fund, my country is studying the possibility of doing away with bilateral and clearing agreements insofar as such an action could be deemed compatible with the economic exigencies of the country and would not impede the flow of certain essential commodities from economically appropriate sources.

The Iranian Government and the central bank are also studying the possibility of revising old laws concerning exchange transactions and of adopting a less restricted policy in line with the present economic conditions.

I wish to put on record our thanks to the Fund for placing at our disposal facilities, including stand-by credits, which we might require for the successful pursuit of these liberalizing policies.

Address by the Governor for Pakistan—Syed Amjad Ali1

May I express my happiness in seeing you chairing this very important and distinguished gathering of leaders in the field of banking and finance. I missed the Istanbul Meeting and, therefore, was not present to offer my congratulations to you at your election to this high office. I may, however, say that the good wishes of your friends all over the world were with you because they knew of your great merit and were sure of your ability as an excellent Chairman.

I had the privilege of making my debut to the Annual Meetings in Paris in 1950. Much water has flowed, and continues to flow, over and under many an international bridge. Turbulent, murky, muddy, and clear has been the cycle of the streams of international politics. The bridges have held, though some of the embankments have eroded and the foundations shaken. So, the world has been able to prevent war though it has not succeeded in winning the peace—an achievement not perfect, yet not to be belittled either.

In the field of economics, the record is somewhat better. The International Monetary Fund has been able to secure international cooperation in the field of exchange stability. The International Bank has not only helped in reconstructing the war-shattered economies but spearheaded economic development of the lesser developed areas. The overall effect has been impressive in the highly developed countries but not so inspiring in the underdeveloped. There, the increase in real incomes has been very low; economic disparities between nations tend to grow wider. Not only the flow of international capital on which so essentially depends a high level of economic activity has been very inadequate, but certain disequilibrating factors, such as fluctuations in commodity prices and adverse terms of trade, appear persistently to neutralize the effect of productive investments. These are some of the questions which require increasing attention for the achievement of more stable conditions.

The Fund, with its large and liquid resources, could possibly follow a more flexible policy in making medium-term loans available to member countries in order to enable them to cushion more effectively the adverse effects of fluctuations in export earnings as also for meeting the inflationary strains of larger investments. In a more technical field, the Fund might also consider whether it could not function as a clearing house for international exchange settlements. The International Bank, with its expanded resources, reorganization of its able management, establishment of the International Finance Corporation, its wide and useful experience in the problems of the member countries, can play a more dynamic role in accelerating the development and thus arresting the trends I have mentioned earlier.

To my mind, the most important development in the past few years has been the emergence of the concept of the sharing of prosperity. This great country—our host, the United States—has been in the vanguard of this sublime thinking. It has acted with great generosity. It is stimulating the minds of the great and the humble, the giants and the dwarfs to realize this wonderful concept. With the rapid advance of science and technology, the horizons are shifting and the firm lines are receding, offering an opportunity to the big to become bigger in sharing their prosperity as partners with hundreds of millions who are still backward and poor.

Address by the Governor for Brazil1Jose Maria Alkmim

Some of my colleagues on the Boards have been Governors of the Fund and the Bank for many years, in a few instances going back to the First Meeting of the Boards in 1946. It would be presumptuous of me, a newcomer, to speak with authority of the complex problems that confront the Fund and the Bank and their member countries in all parts of the world. On the other hand, I think that what I have to say regarding the problems of Brazil and their relation to the Fund will be of some interest to other countries.

Brazil has been doing business with the International Monetary Fund for a long time. I can say, on behalf of my country, that we regard our relations with the Fund as of incalculable value. They have been marked by a spirit of confidence and understanding on the part of the Fund which we hope we have merited and for which we shall always be grateful.

On seven different occasions you have lent us foreign exchange—dollars and sterling—amounting in all to $168.5 million. Of this, we have already repaid $103 million and we expect to repay the remainder within the usual period for such transactions.

We have had useful technical help from the Fund. About three years ago, Brazil had accumulated arrears in payments for imports amounting to about $600 million. It took a year for exporters to receive payments for the goods they sold. On the advice of the Fund, we established a prompt remittance system. Now, every exporter is paid on time for goods sold to Brazil. Furthermore, everyone is able to remit profits and other nontrade payments through the free market.

I do not want to pretend that Brazil is not confronted with difficult problems. At present, our payments position is relatively good. Our exports are large and world markets are favorable. Nevertheless, our position is vulnerable because of the large and unpredictable changes that take place in the price of coffee. We hope that, in time, some means will be found to deal with this problem. In the meantime, we hope that something can be done along the lines suggested by Mr. Rooth to minimize the impact of large fluctuations in the export receipts of the coffee producing countries.

It is not possible for me to say that our internal monetary position is satisfactory. We are confronted with a difficult inflation problem. In Brazil, as elsewhere, there is great pressure for higher wages and that has been one cause of inflation. The deficit in the budget has been large and that is another cause of inflation. The Government of Brazil is aware of the dangers that this presents to the orderly development of the economy. Special efforts are being made to reduce the budgetary deficit and I think we shall be able to cut the deficit by half. Bank credit has been restricted severely. If we can slow down and then stop the rise in prices, we are confident that we can establish the wage, budget and credit policies necessary for monetary stability.

The Government of Brazil is determined to bring an end to the inflation that has been going on for 20 years. This is extremely difficult in a country which is in the midst of development. The fact is that, because domestic savings and capital inflow are not adequate for the investment we are able to undertake, there is steady pressure to rely on budgetary deficits and excessive expansion of bank credit. We have had help from the Export-Import Bank; we believe that foreign capital will come into Brazil on a larger scale. Under any circumstances, we shall do our best to follow the advice of the Fund. I hope that at next year’s Annual Meeting Brazil will be able to report real progress in securing development with stability.


Session No. 1, September 24, 1956.


Syed Amjad Ali is Governor of the International Bank for Reconstruction and Development for Pakistan.


Delivered in Portuguese.