Abstract

Members:

Procedures Committee

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Members:

China, Ethiopia, Iceland, Luxembourg, United Kingdom, United States, %%Uruguay, Venezuela, Yugoslavia

Report No. 1

Sirs:

The Procedures Committee, at its first meeting at 4:00 p.m. on September 12, 1949, considered the matters of business which had been proposed for the Fourth Annual Meeting of the Boards of Governors of the Bank and the Fund.1

I have the honor to submit the following recommendations of the Committee:2

Business of the Board of Governors of the Fund

A. Agenda

The Committee recommends:

1. Adoption of the agenda attached hereto as Annex I, including, pursuant to Section 6(c) of the Fund By-Laws, Item 9 (Extension of period for acceptance by Liberia of membership in the Fund).

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 Organization and Administration

  • Committee on Gold

2. Establishment of the following Discussion Groups of the Board of Governors of the Fund under the chairmanship of the Managing Director of the Fund:

  • Discussion Group I — Exchange and Monetary Policy

  • Discussion Group II — Exchange Restrictions and Monetary Reserves

The establishment of Discussion Groups for consideration of the Annual Report is in accordance with the recommendation of the Procedures Committee of the Third Annual Meeting (Report No. 2), approved by the Board of Governors at the fifth session of that Meeting, to the effect that 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.

3. Composition of these Committees and Discussion Groups as shown in Annex II.

4. References to these Committees and Discussion Groups as shown in Annex III.

C. Item for Information

The Committee considered the following Document presented by the Executive Directors of the Fund, and recommends that the Board of Governors note this Document as for their information only and as a supplement to previous reports on the subject from the Executive Directors.

1. Report of the Executive Board on Relations with the International Trade Organization and the CONTRACTING PARTIES of the General Agreement on Tariffs and Trade.1

Procedural Matters of Joint Concern to the Bank and Fund

A. Order of Business

The Committee recommends:

1. Adoption of the order of business as tentatively scheduled in Annex IV.

2. That the Secretaries of the Bank and Fund, in consultation with the Chairmen, 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 V.

C. Procedural Items

The following procedural items will be dealt with in a later report2 of this Committee to the Board of Governors:

1. Site and Date of Fifth Annual Meeting.

2. Election of Officers and Composition of Procedures Committee for 1949-1950.

Approved:

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The Report was approved and its recommendations, as amended, adopted by the Board of Governors at Session No. 1 (Joint), September 13, 1949.

Annex I Agenda

  • 1. Fourth Annual Report of the Executive Directors

  • 2. Financial Statements and Report on Audit

  • 3. Administrative Budget for Fiscal Year ending April 30, 1950

  • 4. Changes in Rules and Regulations

  • 5. Resolution proposed by Union of South Africa concerning Gold Sales at Premium Prices

  • 6. Application of the Republic of Haiti for Membership in the Fund

  • 7. Place and Date of Fifth Annual Meeting

  • 8. Election of Officers and Procedures Committee for 1949-50

  • 9. Extension of Period for Acceptance by Liberia of Membership in the Fund

  • Item for Information

  • 10. Report on Relations with the International Trade Organization and the CONTRACTING PARTIES to the General Agreement on Tariffs and Trade

Annex II Composition of Committees and Discussion Groups of Board of Governors

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Annex III Terms of Reference of Committees and Discussion Groups of Board of Governors

Committee on Organization and Administration

For consideration and report to the Board of Governors:

(a) Financial Statements and Report on Audit.

(b) Administrative Budget for Fiscal Year ending April 30, 1950.

(c) Change in Rules and Regulations (C-5).

(d) Application of the Republic of Haiti for Membership in the Fund.

(e) Extension of Period for Acceptance by Liberia of Membership in the Fund.

Committee on Gold

For consideration and report to the Board of Governors:

Resolution proposed by Union of South Africa concerning Gold Sales at Premium Prices.

Discussion Group I—Exchange and Monetary Policy

For consideration only:

Chapters I and II of the Fourth Annual Report.

Discussion Group II—Exchange Restrictions and Monetary Reserves

For consideration only:

Chapters I, III and V of the Fourth Annual Report.

Annex IV Order of Business Provisional Schedule 1

TUESDAY, September 13, 1949

10:00 a. m.—Joint Session of Boards of Governors

Addresses

Presentation of Fourth Annual Reports of the Bank and the Fund

First Report of the Joint Procedures Committee

(at conclusion of Joint Session)—Fund Board of Governors

Statement by Governor for Union of South Africa relating to Item 5 on the Agenda

3:15 p. m.—Joint Session of Boards of Governors

Address by President of the United States

4:00 p. m.—Discussion Group I (Fund)

WEDNESDAY, September 14, 1949

10:00 a. m.—Informal Discussion (Bank)

12:00 noon—Committee on Organization and Administration (Bank)

2:30 p. m.—Committee on Organization and Administration (Fund)

3:30 p. m.—Committee on Gold (Fund)

THURSDAY, September 15, 1949

10:00 a. m.—Annual Report Discussion (Bank)

11:30 a. m.—Committee on Organization and Administration (Bank)1

3:00 p. m.—Discussion Group II (Fund)

4:45 p. m.—Committee on Gold (Fund)1

FRIDAY, September 16, 1949

10:00 a. m.—Bank Board for Committee Reports

11:00 a. m.—Fund Board for Committee Reports

12:00 noon—Joint Procedures Committee

4:00 p. m.—Joint Session of Boards of Governors

Second Report of the Joint Procedures

Committee

Closing Remarks

Annex V Provisions Relating to the Conduct of the Meeting

Attendance

(a) All joint sessions of the Boards of Governors of the Bank and the Fund and the first session of the Board of Governors of the Fund shall be open to the press and the public; all other sessions of the Boards of Governors of the Bank and the Fund and all meetings of their committees and discussion groups shall be closed to the press and public.

(b) All joint sessions of the Boards of Governors of the Bank and the Fund and all sessions of either Board of Governors shall be open to accredited observers. All meetings of the committees and discussion groups of the Board of Governors of the Fund shall be open to such observers, unless a committee or discussion group decides otherwise. All meetings of the committees of the Board of Governors of the Bank shall be open to such observers, unless a committee decides otherwise. All informal discussions of the Board of Governors of the Bank shall be closed to such observers.

(c) Any meeting of the committees and discussion groups of the Boards of Governors of the Bank or the Fund, 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. Meetings of the Joint Procedures Committee shall be open to the attendance of only the Governors and Alternate Governors who are members of the Committee and one advisor for each member country.

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

Public Information

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

Records

(a) The Secretaries of the Bank and the Fund are authorized to have prepared a verbatim transcript of the proceedings of all sessions of the Boards of Governors of the Bank and the Fund, of all meetings of the discussion groups of the Board of Governors of the Fund and of the informal discussion of the Board of Governors of the Bank. The transcripts of the discussion groups of the Fund and of the informal discussion of the Bank will be kept confidential and made available only to the Chairmen of the Boards of Governors, the President of the Bank and the Managing Director of the Fund.

(b) The Secretaries of the Bank and the Fund 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.

(d) For discussion groups of the Board of Governors of the Fund, the Managing Director of the Fund shall make an oral report to the Board of Governors.

Report No. 2

Sirs:

The Committee met at noon, September 16, 1949.1 The Committee noted the cordial invitation from the Governor for France that the Fifth Annual Meeting of the Boards of Governors be held in Paris. The Committee recommends the acceptance of that invitation.

The Committee also considered the matter of officers of the Board of Governors, and the composition of the Procedures Committee, for the ensuing year.

It is recommended that the Board of Governors adopt the resolutions attached hereto as Annexes I, II and III.

Approved:

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The Report was approved and the Resolutions adopted by the Board of Governors at Session No. 5 (Joint), September 16, 1949.

Annex I Draft Resolution on Place and Date of Fifth Annual Meeting2

RESOLVED:

That the Chairman shall convene the Fifth Annual Meeting of the Board of Governors of the International Monetary Fund in Paris in the month of September, 1950.

Annex II Draft Resolution on Officers of Board of Governors1

RESOLVED:

That the Governor for India is hereby elected Chairman, and the Governors for China, France, 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 Establishment and Composition of Procedures Committee2

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 for the following members:

Brazil, Canada, China, Colombia, Czechoslovakia, Egypt, France, India, Mexico, Netherlands, United Kingdom, United States.

The Chairman, Vice-Chairman and Reporting Member shall be the Governors for India, Canada and Netherlands, respectively.

Committee on Organization and Administration

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Members:

Australia, Bolivia, Brazil, Chile, China, Costa Rica, Egypt, El Salvador, France, Greece, Guatemala, India, Iraq, Nicaragua, Panama, Paraguay, United Kingdom, United States

Mr. Chairman:

I have the honor to report the recommendations of the Committee on Organization and Administration with respect to the items on the agenda assigned to it. The Committee met at 2:30 p.m. on Wednesday, September 14, 1949, under the Chairmanship of Dr. M. W. Holtrop, Alternate Governor for the Netherlands.

Finance

The Committee considered the Report on Audit for the fiscal year ended April 30, 1949, with the Financial Statements contained therein, including audited financial statements of the Staff Retirement Fund. The Committee also considered the Administrative Budget for the fiscal year ending April 30, 1950.

With respect to the Administrative Budget, the Committee noted with satisfaction that, as compared with the budget for the previous fiscal year, comparative stability appeared to have been reached in the Fund’s administrative expenditures. In this connection, the Committee agreed with the suggestion of the Governor for the United Kingdom that, in the future, consideration might be given to a presentation of the Administrative Budget in more detail and with the correlative figures for the previous year’s budget.

The Committee also believed it would be desirable to continue the efforts that have been and are being made to effectuate economies by coordinating insofar as possible Bank and Fund services.

The Committee noted with satisfaction the progress that had been made in the establishment and development of the Staff Retirement Plan, including the investment of its assets. They expressed interest in the continued successful administration of the Plan.

The Committee recommends to the Board of Governors of the Fund the adoption of the resolution attached hereto as Annex I.

Rules and Regulations

The Committee reviewed the change in Section C-5 of the Rules and Regulations of the Fund submitted by the Executive Directors to the Board of Governors and recommends that the Board of Governors adopt the resolution attached as Annex II of this report.

Application of Haiti for Membership in the Fund

The Committee also considered the report of the Executive Board with respect to the application of the Government of the Republic of Haiti for membership in the Fund.

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

Extension of Time for Acceptance of Membership by Liberia

The Committee also considered the request of Liberia for an extension of the period during which it may accept membership in the Fund. The Committee recommends to the Board of Governors the adoption of the draft resolution attached hereto as Annex IV extending the period during which Liberia may accept membership in the Fund until March 31, 1950 with provision for extension of that period by the Executive Directors to no later than October 1, 1950 if they deem the circumstances warrant it.

Approved:

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The Report was approved and the Resolutions adopted by the Board of Governors at Session No. 4, September 16, 1949.

Annex I Draft Resolution on Financial Statements, Report on Audit and Administrative Budget1

RESOLVED:

That the Board of Governors of the Fund considers the Report on Audit for the fiscal year ended April 30, 1949, the Financial Statements contained therein and the Administrative Budget for the fiscal year ending April 30, 1950, as fulfilling the requirements of Article XII, Section 7, of the Articles of Agreement and Section 20 of the By-Laws.

Annex II Draft Resolution on Amendment to Rules and Regulations1

RESOLVED:

That the Board of Governors of the Fund hereby notifies the Executive Directors that it has reviewed the following amendment to the Rules and Regulations adopted by the Executive Directors since the Third Annual Meeting and has no modifications to suggest:

Section C-5.

“In the absence of the Managing Director, the Deputy Managing Director shall act as Chairman and shall have a deciding vote in case of an equal division. In the absence of both the Managing Director and the Deputy Managing Director, the Executive Director selected by the Executive Board shall act as Chairman. An Executive Director shall retain his right to vote when serving as Acting Chairman.”

Annex III Draft Resolution Relating to the Terms and Conditions on which Haiti shall be Admitted to Membership in the Fund1

WHEREAS, the Government of the Republic of Haiti 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 has consulted with representatives of that Government and has agreed upon the terms and 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 Republic of Haiti 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 Haiti shall be $2,000,000;

(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 Haiti;

(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 Haiti;

(4) That within thirty days after the Fund so requests, Haiti shall communicate to the Fund the par value of its currency based on the rates of exchange prevailing on the date Haiti becomes a member of the Fund, and within sixty days following the Fund’s receipt of the communicated par value Haiti 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 Haiti 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 Haiti 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 Haiti shall become a member of the Fund subject to the terms and conditions set forth in this resolution as from the date when Haiti has complied with both of the following requirements:

a. Haiti 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. Haiti 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 Haiti may accept membership in the Fund pursuant to this resolution until March 31, 1950, provided, however, that if extraordinary circumstances are deemed by the Executive Directors to warrant an extension of the period during which Haiti 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 September 30, 1950.

Annex IV Draft Resolution on the Extension of the Period for Acceptance by Liberia of Membership in the Fund1

RESOLVED:

That the period in which the Republic of Liberia may accept membership in the Fund upon the terms and conditions set forth in Resolution No. 4-12 of the Board of Governors shall be extended until March 31, 1950, provided, however, that if extraordinary circumstances are deemed by the Executive Directors to warrant the extension of the period during which Liberia may accept membership, the Executive Directors may extend such period until such later date as they may determine, but in no event beyond October 1, 1950.

Committee on Gold

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Members:

Australia, Austria, Belgium, Canada, China, Colombia, Cuba, France, India, Mexico, Peru, Philippine Republic, Syria, Thailand, Union of South Africa, United Kingdom, United States, Venezuela

Mr. Chairman:

The Committee met at 3:30 p.m., September 14, and 4:45 p.m., September 15, 1949 to consider the following resolution which had been referred to it by the Board of Governors:

WHEREAS, it is the desire of all members of the International Monetary Fund to persevere in their endeavour to secure international co-operation in monetary and foreign exchange matters on the basis accepted by the Bretton Woods Conference, and

WHEREAS, it would be unreasonable to attempt to secure such co-operation on the basis of disproportionate sacrifice by members producing gold, and

WHEREAS, the price for gold used for monetary purposes in terms of Article IV, Sec. 1 of the Articles of Agreement of the International Monetary Fund has remained unchanged since the inception of the Fund, and

WHEREAS, the prices of other commodities have in the meantime increased by substantial margins, and

WHEREAS, the maintenance of stable exchange rates is the reason for fixing the price of gold at the same figure over considerable periods of time, and

WHEREAS, the maintenance of the price at present fixed in terms of the Fund Agreement has, in the face of the substantial increase in the price-level of other commodities, only been secured at heavy, disproportionate and unjustifiable cost to countries producing gold, and

WHEREAS, it is permissible in terms of the Fund Agreement to sell newly-mined gold in any market,

SO THEREFORE, it is now Resolved by the Governors of the International Monetary Fund that nothing in the Articles of Agreement of the Fund shall be interpreted to prevent the sale, by the Government of any member, of newly-mined gold in any market at such premium prices as may be ruling in that market provided the said member sells to the Fund or to one or more members of the Fund, or transfers to its own monetary reserves at least fifty percent of its newly-mined gold at the price from time to time current in terms of the Articles of Agreement of the Fund.

After extended discussion there was unanimous agreement that the following resolution be recommended to the Board of Governors for adoption:1

WHEREAS, the Governor for the Union of South Africa has proposed the above resolution;2

WHEREAS, the Committee has considered the resolution of the Governor for South Africa and has explored the related problems of the gold-producing countries; and

WHEREAS, the resolution proposes a basic modification of the policy respecting sales of gold at premium prices which has been adopted by the International Monetary Fund and may involve questions of interpretation of several provisions of the Articles of Agreement; and

WHEREAS, the considerations which are raised are so complex and important as to require extensive study;

BE IT RESOLVED, that the said resolution of the Governor for the Union of South Africa be referred to the Executive Directors of the Fund for study of all relevant considerations and report to the Board of Governors.

Approved:

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The Report was approved and the Resolution adopted by the Board of Governors at Session No. 4, September 16, 1949.

1

Meetings of the Procedures Committee were held jointly with the Bank. Subject matter pertaining to the business of the Bank has been omitted from the reports of the Procedures Committee reproduced in the Summary Proceedings of the Fund.

2

At its second meeting, held at 9:45 a.m. on September 13, 1949, the Procedures Committee adopted two amendments, which have been incorporated in the above report, for recommendation to the Board of Governors.

1

The Report is attached as Appendix B.

2

Report No. 2.

1

The business of the Meeting called for two additional committee meetings, as indicated.

1

It was the third meeting of the Procedures Committee.

2

Resolution No. 7.

1

Resolution No. 8.

2

Resolution No. 9.

1

Resolution No. 2.

1

Resolution No. 3.

1

Resolution No. 4.

1

Resolution No. 5.

2

Resolution No. 4-1, adopted by the Board of Governors by telegraphic poll on November 1, 1948, is reproduced on page 41.

1

Resolution No. 6.

2

The statement delivered by the Governor for the Union of South Africa in support of his Government’s motion is attached as Appendix C.