Mr. Friedman, Director of the Exchange Restrictions Department, is a graduate of Columbia University and was formerly with the U.S. Treasury. He is the author of Foreign Exchange Control and the Evolution of the International Payments System (1958) and of articles in financial journals; and a joint author of Postwar UJS. Economic Policy (1948).
This study is based on the observations and experience of the author over a considerable period of years and on discussions with colleagues in the Fund and with financial authorities and bankers in many countries. It is also indebted to the writings of many different authors, including Messrs. Altman, Coombs, Holtrop, Jacobsson, Martin, and Roosa. Detailed acknowledgment is not possible.
International Monetary Fund, Articles of Agreement: Article I (ii).
Ibid.: Article I (v).
The word “currencies” is used here to cover all the many forms of means of payment actually employed.
“External” and “internal” convertibility are more or less equivalent, respectively, to “nonresident” and “resident” convertibility, terms used in the literature on this subject. None of these terms occurs in the Articles of Agreement of the Fund. (For the Fund terms, see particularly Articles VIII, XIV, and XIX of the Agreement.)
See particularly Articles XII-XV of the GATT.
The only important industrial countries not members of the International Monetary Fund are Switzerland and those in the Soviet bloc.
Article IV, Section 3 (i).
International Monetary Fund, Selected Decisions of the Executive Directors (Washington, D.C., September 1962), p. 11.
Article IV, Section 3 (ii).
Committee on the Working of the Monetary System [Radcliffe Committee], Report (Cmnd. 827, London, August 1959), par. 326.
Ibid., pars. 327 and 707.
European Monetary Agreement, Third Annual Report of the Board of Management (Paris, 1962), pars. 102 and 103.
This paragraph does not attempt to deal with the hard question of the functions of forward exchange markets under present-day conditions.
See especially O. L. Altman, “Foreign Markets for Dollars, Sterling, and Other Currencies,” Staff Papers, Vol. VIII (1960-61), pp. 313-52, and “Recent Developments in Foreign Markets for Dollars and Other Currencies,” Staff Papers, Vol. X (1963), pp. 48-96. See also, European Monetary Agreement, op. cit., par. 79.
Article IV, Section 5.
International Monetary Fund, Annual Report, 1951, p. 45.
Article VI, Section 3, of the Fund Agreement.
Under Article XIV, Section 2, member countries availing themselves of the “transitional arrangements” may “maintain and adapt to changing circumstances (and, in the case of members whose territories have been occupied by the enemy, introduce where necessary) restrictions on payments and transfers for current international transactions.”
Article I (v).
Selected Decisions of the Executive Directors, op. cit., pp. 56-58.