the zavicha case

On July 18, 1966 Daiei Motion Picture Company, a Japanese corporation, entered into a contract dated September 1, 1966 with Zavicha, a resident of France, under which for a period of ten years from the date of the contract he was to be the sole representative of the company for all European countries and the manager of its European business. He undertook that, at his own expense, he would make premises available, open an office, and hire employees for conducting business under the contract. Zavicha was to receive a monthly salary of F 10,000 and bonuses based on the commercial value of films selected by him for distribution by the company in Japan. The bonus would be agreed for each film. He was also to select for distribution in Europe films produced by the company. The contract stated that in case of dispute the courts of the Seine would have competence and French law would apply. Zavicha began work under the contract in October 1966, and incurred expenses in opening an office and in arranging publicity. On February 21, 1967 the company informed Zavicha that it was having difficulty in getting approval of the contract by the Japanese exchange control authorities. It offered to renegotiate the contract so that there would be a better chance of getting it approved. On June 5, 1967 the company informed him that it considered itself released from the contract because it was null and void under Japanese law, and on August 24 reaffirmed the nullity of the contract and gave him formal notice to stop purporting to act as its representative. Zavicha sued for F 1 million as the expenses that he had incurred in performing the contract and for F 2.25 million as damages for loss of profit resulting from breach of contract. The company advanced various defenses and counterclaims.

The company’s main defense was that the contract was contrary to Japanese exchange control regulations and therefore unenforceable under the first sentence of Article VIII, Section 2(b), and the interpretation of that provision adopted by the Fund on June 10, 1949.² The first sentence of the provision reads as follows: “Exchange contracts which involve the currency of any member and which are contrary to the exchange control regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member.” Under Japan’s Foreign Exchange and Foreign Trade Control Law (Law No. 228 of December 1, 1949) and Cabinet Order No. 203 of June 27, 1950, no resident was allowed to enter into a service contract involving payments to a nonresident without the approval of the Exchange Office. Zavicha replied that the exchange control regulations were not consistent with Article VII of the Fund’s Articles,³ and were not justified by Japan’s monetary and economic conditions. The Court of Commerce held that this was not the only provision that authorized exchange control regulations and cited Article XIV.⁴ To support the consistency of the regulations with the Articles, the company relied upon a letter from the General Counsel of the Fund stating that the exchange control regulations of Japan did not contain any provision inconsistent with the Articles.⁵ Zavicha argued that Article VIII, Section 2(b), did not apply to payments for current international transactions, which were governed by Article VIII, Section 2(a). To this last argument, the court held that

this way of seeing things is not consistent with the wording of paragraph (b), which makes no distinction between the exchange contracts to which it applies; that it therefore suffices that contracts are in issue that involve the currency of a member State, that is to say, contracts the implementation of which affects the exchange resources of that State, according to the most general definition that has been given and the one that has already been accepted in judicial decisions …⁶ (Translation)

In Daiei Motion Picture Co. Ltd. v. Zavicha, the Fourth Division of the Court of Appeal of Paris on May 14, 1970 affirmed the decision of the Court of Commerce of May 31, 1968 in favor of the company. The Court of Appeal refused Zavicha a remedy on the contract because of Article VIII, Section 2(b). The Court held,⁷ however, that the company owed him a duty to do all that it could to obtain the necessary authorization from the Japanese exchange control authorities. The company had failed to perform this duty, and it had allowed him to incur expenses under the contract before informing him that the authorization had not been obtained. The court held that this claim was delictual (une faute quasi-délictuelle) and not contractual, so that Article VIII, Section 2(b), did not apply to it. The court relied on the fact that the company had made only an informal application for a license, that there had been a postponement for minor reasons and not a refusal, and that the difficulties could easily have been overcome. The company had deliberately refrained from taking further steps in order to renegotiate the contract. In addition, the company knew of the difficulties in October 1966 but did not inform Zavicha of them until February 1967, by which time he had incurred expenses. On June 3, 1971, following an appraisal by experts, the court ordered the company to pay Zavicha F 1 million in reimbursement of expenses and F 2,430,000 as damages.⁸ The company was adjudged bankrupt on December 23, 1971.

The decision is notable not only because the court accepted the broad interpretation of “exchange contracts” and the currency “involved” but also because it recognized that, in view of the Japanese regulations, the contract was unenforceable even though French law governed the contract and was the lex fori. According to certain judicial decisions,⁹ if a party’s claim under a contract is unenforceable under Article VIII, Section 2(b), he cannot succeed by reformulating the claim as one for damages for tort, or as a claim for the performance of a natural obligation, or for the restitution of an unjustified enrichment. These claims can, but need not, have the same effect as enforcing the contract.¹⁰ Damages were awarded to Zavicha because of the company’s failure to take all possible steps to comply with exchange control regulations and to make the contract enforceable. The decision has been defended on the ground that it was not based on the nonfulfillment of the contract, and could not have been because the court held that the contract did not have to be performed.¹¹ The decision has also been attacked on the ground that it negated the effect of Article VIII, Section 2(b), by adding a condition that the defendant should not be at fault.¹² A question that the case raises is how far courts should go in refusing remedies that are not legally equivalent to, but approximate in effect, the enforcement of an unenforceable contract in order to discourage parties from entering into such contracts.

The court assumed, without examining Japanese law on this point, that in the circumstances of the case it was reasonable to hold that the company had the duty to apply for a license. The court noted that the company operated in Japan and was familiar with Japanese exchange control regulations. It is not clear whether the court held that a duty arose between the parties as the result of an implied agreement between them or as the result of some general doctrine of law that all parties have a duty to make their contracts effective. Even on the latter hypothesis, the doctrine would seem to be one that establishes an implied term. If the duty to apply for a license was an implied term of the agency contract, the failure would have been contractual and not delictual, and if contractual it would have been caught by Article VIII, Section 2(b).

The court declared that the contract was no more enforceable in France than it was in Japan. It did not accept the company’s argument that the contract was null and void, because the company had not proved that this was the position under Japanese law. The court found that Japanese law did not provide that an unauthorized contract was absolutely void, but that it could not be performed without a license. Had the court declared the contract null and void, it would have gone beyond Japanese law, which, according to the majority opinion adopted by the Supreme Court of Japan in 1965 in Tomita v. Inoue, provides only that a contract entered into without the necessary license was not invalid under private law even though it subjected a party to criminal penalties.¹³

The validity of the contract raised another issue, which, however, the court did not investigate. The regulation requiring a license was not a restriction on payments and transfers for current international transactions within the meaning of the Articles because the restriction was on entry into contracts, that is, on the transaction of business, and not on payments even though the restriction was supported by an exchange control regulation. Insofar as the restriction on entry into the contract was concerned, the approval of the Fund under Article VIII, Section 2(a), was not necessary. The Fund does not have jurisdiction to approve or disapprove restrictions on the import and export of goods, the business of insurance, arrangements for the distribution of films, or the transaction of any other forms of business, of which these examples are but a few chosen at random. The Fund’s jurisdiction is to approve or disapprove restrictions applied directly on payments and transfers for current international transactions that are permissible under the applicable law. Restrictions on the transaction of business may be within the jurisdiction of other international organizations. Whether particular restrictions on the transaction of business are or are not within the jurisdiction of another international organization, the normal consequence of these restrictions will be that payments may not be made in respect of the transactions that are subject to the restriction. To have given the Fund authority to disapprove this consequential prohibition of payments would have had the effect of giving it jurisdiction over the import and export of goods, the business of insurance, arrangements for the distribution of films, and the transaction of all other forms of business requiring payments for their performance.

The restriction in the case was on entry into the contract,¹⁴ and if this had been the only relevant provision of Japanese law, Article VIII, Section 2(b), would have had no role.¹⁵ The proscription of payments under an unapproved contract is not, in the absence of special circumstances, a restriction on payments and transfers under Article VIII, Section 2(a), but the proscription is nevertheless an exchange control regulation under Article VIII, Section 2(b). A regulation that is not restrictive within the meaning of Article VIII, Section 2(a), does not require the approval of the Fund, and therefore can be “maintained or imposed consistently” with the Articles within the meaning of Article VIII, Section 2(b), without the approval of the Fund. This aspect of Article VIII, Section 2(b), was referred to in the letter of March 17, 1970 from the General Counsel of the Fund.¹⁶ The court held that exchange control regulations were involved, although it did not distinguish between the contract and payments under it.

A problem arises, however, because the contract was classified in Japanese law as valid. The regulations proscribed payments under an unapproved contract, which raises the question whether a restriction on payments and transfers for current international transactions was involved as a result of the legal effect of an unapproved contract. If there were such a restriction, the regulation imposing it would not have been “maintained or imposed consistently” with the Articles within the meaning of Article VIII, Section 2(b), if it had not been approved by the Fund. According to the Japanese authorities, however, the purpose of the licensing procedure was to prevent the disguised transfer of capital. All contracts were approved for invisible transactions that were genuine current international transactions, so that there was no restriction on payments and transfers for these transactions.

The company appealed to the Commercial Division of the Court of Cassation to have the decision of the Court of Appeal set aside and a new trial ordered. It argued, inter alia, that Zavicha had undertaken to obtain the necessary license; that it was impossible to obtain a license; that the alleged tort was inseparable from the contract; that a party cannot sue on a contract that it knows to be null and void; and that a tort cannot be based on a contract that is contrary to ordre public in the monetary field, particularly in view of the membership of France in the Fund. The Court of Cassation rejected these arguments and confirmed the judgment of the Court of Appeal.¹⁷

Zavicha sued the Bank of Japan, the central bank of Japan, in Paris for F 20.5 million as damages for the loss imposed on him by its fautes délictuelles ou quasi-délictuelles. This claim was based, inter alia, on the alleged wrongful acts of the Bank of Japan in refusing to approve the contract of September 1, 1966. The refusal was alleged to be in violation of the Articles of the Fund because the contract related to a current international transaction, for which a license could not be withheld. The claim was based also on alleged false statements by the Bank about its exchange control procedures and the application of them to the contract in issue. On March 16, 1974, the Paris Court of Appeal, Fourth Chamber, decided on appeal from a judgment of the Paris Tribunal of Commerce delivered on September 19, 1972, that the Bank of Japan was immune from suit. It applied the principle that

immunity from jurisdiction may be invoked by foreign governments and organizations acting on their instructions or on their behalf with regard to acts of public authority or carried out in the interest of a public service.

The court held that the Bank of Japan, when acting as the authority in charge of exchange control, does so by order and on behalf of the Japanese Government. If it were assumed, although it had not been demonstrated, that Japanese legislation or the Bank of Japan had misinterpreted the Articles of the Fund, or even that the Bank had misinterpreted national legislation, these errors would be covered by the Bank’s immunity from jurisdiction, because they would constitute either a violation by the Japanese Government of its international obligations or the commission of actions in the course of public service. The court applied the same analysis to the alleged false statements. On May 19, 1976, the Court of Cassation confirmed the judgment of the Court of Appeal.¹⁸

the Banco Frances case

The relationship between a claim for damages for tort and the unenforceability of exchange contracts under Article VIII, Section 2(b), is a complex one. In the Zavicha case, the court held that a contract was unenforceable under the provision because a license had not been obtained but that damages could be awarded because of the defendant’s failure to apply for a license. Banco do Brasil, S. A. v. A. C. Israel Commodity Co., Inc.¹⁹ has achieved some prominence as a case in which the New York Court of Appeals refused to award damages for conspiracy to evade Brazilian exchange control regulations. It held that New York courts were required in certain circumstances to withhold judicial remedies to enforce a contract but not to grant remedies for a tort if the contract was performed. Neither Article VIII, Section 2(b), nor any other provision of the Articles had changed the principle that the courts of one country do not enforce the revenue laws of another country.

The effect of Banco do Brasil was cut down to slim proportions by the New York Court of Appeals in its decision of May 8, 1975 in Banco Frances e Brasileiro S. A. v. Doe.²⁰ The principal question before the court was whether a foreign private bank might avail itself of the New York courts in an action for damages for tortious fraud and deceit and for rescission of contracts arising from alleged violations of foreign exchange control regulations.

The plaintiff was a private Brazilian bank that brought an action for fraud and deceit, and for conspiracy to defraud and deceive, against 20 “John Doe” defendants whose identities were unknown to it. The gravamen of the plaintiff’s complaint was that these defendants had participated, in violation of Brazilian exchange control regulations, in the submission of false applications to the plaintiff, which had relied upon them and made improper exchanges of Brazilian cruzeiros into travelers checks in U. S. dollars. As a result the plaintiff claimed that it had been exposed to penalties under Brazilian law and to injury to its business and reputation. The regulations allowed a Brazilian resident to obtain no more than $1,000 in return for cruzeiros when making a trip abroad. A large amount of the checks that had been obtained in violation of these regulations was deposited by two of the unknown John Does in accounts bearing code names with two banking institutions in New York. An order of attachment was granted against the property of John Doe Nos. 1 and 2 held with the two institutions. Motions were made by the plaintiff for disclosure by the institutions of the true names and addresses of the two John Does and to direct the attorney for John Doe No. 1 to disclose the true names and addresses of the defendants and the basis for his authority to act, or, in the alternative, to vacate his appearance in the action. John Doe No. 1 moved to vacate the order of attachment, to dismiss the plaintiff’s complaint, and to intervene in the motion for disclosure so as to resist it. After various steps in the proceedings, the Appellate Division, relying on the Banco do Brasil case, granted the defendant’s motion to dismiss the complaint and dismissed all ancillary applications by the plaintiff on the ground that the New York courts were not open to an action arising from a tortious violation of foreign currency regulations. The plaintiff appealed, and the Court of Appeals, in a decision of six judges to one, modified the decision of the Appellate Division and granted various forms of relief.

The majority opinion referred to the “old chestnut” ²¹ of the conflict of laws that one State does not enforce the revenue laws of another State, but rejected the modern extension of the category of revenue laws to include foreign exchange regulations. According to the majority, that extension was unjustifiable on the basis of both precedent and analysis. Analysis led the court to make the following pronouncement:

… [M]uch doubt has been expressed that the reasons advanced for the rule, if ever valid, remain so…. Some do consider that, in light of the economic interdependence of all nations, the courts should be receptive even to extranational tax and revenue claims as well, especially where there is a treaty involved, but also without such constraint…. Indeed, there may be strong policy reasons for specially favoring a foreign revenue regulation, using that term in its broadest sense, especially one involving currency exchange or control.

In the international sphere, cases involving foreign currency exchange regulations represent perhaps the most important aspect of the revenue law rule. This assumes, of course, that a currency exchange regulation, normally not designed for revenue purposes as such, but rather, to prevent the loss of foreign currency which in turn increases the country’s foreign exchange reserves, is properly characterizable as a revenue law. … At any rate, it is for the forum to characterize such a regulation and in this State the question would appear to have been resolved for the present at least by Banco do Brasil v. Israel Commodity Co….

But even assuming the continuing validity of the revenue law rule and the correctness of the characterization of a currency exchange regulation thereunder, United States membership in the International Monetary Fund (IMF) makes inappropriate the refusal to entertain the instant claim. The view that nothing in [A]rticle VIII, [Section 2(b)] … requires an American court to provide a forum for a private tort remedy, while correct in a literal sense (see Banco do Brasil v. Israel Commodity Co….) does not represent the only perspective. Nothing in the agreement prevents an IMF member from aiding, directly or indirectly, a fellow member in making its exchange regulations effective. And United States membership in the IMF makes it impossible to conclude that the currency control laws of other member States are offensive to this State’s public policy so as to preclude suit in tort by a private party. Indeed, conduct reasonably necessary to protect the foreign exchange resources of a country does not offend against international law…. Moreover, where a true governmental interest of a friendly nation is involved—and foreign currency reserves are of vital importance to a country plagued by balance of payments difficulties—the national policy of co-operation with Bretton Woods signatories is furthered by providing a State forum for suit.²²

The majority distinguished the Banco do Brasil case on the ground that the Government of Brazil itself, through the Banco do Brasil, sought redress for fraudulent violations of the Government’s exchange control regulations. In the case now before the court, a private bank was seeking damages and rescission of fraudulent exchange transactions.²³ The court was aware of no case in which a remedy in tort arising from exchange control regulations had been denied in proceedings between private parties under the rule relating to foreign revenue laws, and the court declined to extend the Banco do Brasil case so as to deny a remedy in these circumstances.

The court referred to Perutz v. Bohemian Discount Bank in Liquidation.²⁴ This case has been the subject of much discussion not only because of the conclusion reached but also because the ratio decidendi implicit in it is not clear. The majority had this interesting comment on the effect of Czechoslovakia’s exchange control regulations in that case:

Perutz v. Bohemian Discount Bank in Liquidation … is consistent with an expansive application of the IMF agreement to which we here ascribe (cf. Kolovrat v. Oregon…), although there it is true defensive use of foreign currency exchange regulation was made and upheld by this court. But interestingly, in Perutz, in contrast to the instant case, political relations at the time were not conducive to comity which nevertheless was extended.²⁵

The dissenting judge held the view that although relief was sought by a private bank, what was involved was “an aspect of the Brazilian Government’s sovereign management of the economy of its own country” and not solely the resolution of private rights as defined under the law of another State. The issue for him was whether a claim for which enforcement is sought is a manifestation of sovereign authority in the pursuit of “fiscal regulation and management.” The plaintiff had not suffered a loss in the private sense by providing travelers checks for value received. The heart of the claim was exposure to penalties applied by the Brazilian Government for breach of its regulations. The Banco do Brasil case had decided that foreign exchange control regulations may present an aspect of sovereign power by a foreign State, and it was for that reason that a remedy was refused even though the court invoked the rule relating to foreign revenue laws. This principle can be modified by treaty, but no modification had been made that applied in the circumstances of this case.

Nothing in the Bretton Woods Agreement Act or in any other agreement between the United States and Brazil of which we are aware, however, mandates a complete abrogation of the normal conflicts rule or requires our courts affirmatively to enforce foreign currency regulation, as we are invited to do in the present case …

The majority, however, argues that the time may have come for a change in what historically has been the applicable rule. I recognize that strong arguments can be mounted for a change in view of the increased frequency and importance of international commerce and the significantly different perspective in today’s world in which one nation views another nation and its interests. In my opinion, however, the responsibility for any change lies with our Federal Government rather than with the highest court of any single State. Change, if at all, in my view, would better come at the hands of the State Department and the Congress, through the negotiation of international agreement or otherwise in the discharge of the constitutional responsibility of the Federal Government “to regulate commerce with foreign nations” (cf. Bretton Woods Agreement Act). A fitting sense of judicial restraint would dictate that the courts of no single State should enunciate a change, however large that State’s relative proportion of foreign commerce may be, particularly since the authoritative effect thereof would necessarily be confined to the borders of that State.²⁶

The effect of the decision in New York is that the rule relating to foreign revenue laws will not prevent claims in tort between private parties because a violation is involved of the exchange control regulations of a foreign State that is a member of the Fund. The court did not inquire whether the exchange control regulations were consistent with the Articles of the Fund, but probably assumed that they were. The ratio decidendi may be applied to claims other than those in tort. The court did not decide that the same principle would apply to an action brought by the instrumentality of a foreign government and was content simply to refer to the Banco do Brasil case, but the court did cast doubt on that decision even within its newly defined narrow compass by doubting that exchange control regulations are revenue laws.

Terruzzi case in Queen’s Bench Division

Wilson, Smithett & Cope Ltd. v. Terruzzi,²⁷ decided in England by the Queen’s Bench Division on January 31, 1975 and by the Court of Appeal on January 20, 1976, seriously limits the scope of Article VIII, Section 2(b), in English courts. The plaintiffs were members of the London Metal Exchange and carried on business as dealers and brokers in metals. The defendant, a resident of Italy, dealt in metals in Milan. The plaintiffs alleged that between January 11, 1973 and November 7, 1973 they concluded with the defendant, on the standard terms of contract of the London Metal Exchange and subject to its rules and regulations, a series of contracts for the purchase or sale of copper wirebars, lead, and zinc futures. On November 14, 1973 the plaintiffs, having failed to receive any payment from the defendant, either as margin or in any other way, in respect of the debit balance of his account, “closed out” the defendant on his open contracts by transactions that left the defendant liable, after certain credits that were due to him, in an amount equal to almost £ stg. 200,000. The losses resulted largely from an increase in the price of zinc sold forward for three months’ delivery on behalf of the defendant in circumstances in which he was “short.” In an action by the plaintiff for this amount, the defendant pleaded that the contracts were unenforceable because they were unlawful under Italian law and were exchange contracts within the meaning of Article VIII, Section 2(b), which has been incorporated into English law.²⁸

The defendant relied on Decree-Law No. 476 of June 6, 1956, by means of which the Italian authorities introduced regulations that included the following articles:

2. Residents are forbidden from performing any act whatsoever which produces obligations between them and non-residents, except contracts for the sale of goods for export and contracts for the purchase of goods for import, save with ministerial authorization. Residents are forbidden from effecting the export or import of goods save upon ministerial authorization. Debts due to residents by non-residents must be declared in the manner and within the terms laid down by the Ministry for Foreign Trade.

Residents who are creditors or debtors by virtue of any right towards non-residents must recover their credits or pay their debits in the manner and within the provisions laid down by the Ministry for Foreign Trade….

4. Residents cannot receive payments from non-residents or effect payments to non-residents directly or on behalf of the same, save in conformity with the provisions of Articles 2 and 3. (Translation)

Article 3 was not relevant to the proceedings. Article 13 of the Decree prescribes the authorizations that must be obtained from the Treasury, the Ministry for Foreign Trade, or both, as the case might be, for the actions by residents that are otherwise prohibited. The two government departments were empowered to delegate the task of issuing authorizations to the Italian Exchange Office and the Bank of Italy. The defendant did not obtain the authorization required by the Decree.

The court of first instance, the Queen’s Bench Division, held, on the basis of the concessions made by the parties with respect to various aspects of the case, that the meaning and effect of Article VIII, Section 2(b), had to be decided purely as a question of English law. The court also decided that nothing turned on the point that the contracts were made for the purpose of speculating in “futures” without either party contemplating actual deliveries of metal. It was not contested that in English law contracts such as these are treated as ordinary contracts for the sale and purchase of goods, because the delivery and acceptance of the goods may be required.

The court noted Article XVIII of the Articles and the Fund’s interpretation under that provision of some aspects of Article VIII, Section 2(b),²⁹ but found that the interpretation cast no light on the issues in this case.³⁰

The plaintiffs argued that the lira was not “involved” within the meaning of Article VIII, Section 2(b), because the contracts provided for payment in sterling. The court was clearly unsympathetic to this view but at the same time was reluctant to endorse the view that the word referred to the economic effects of the contract. The court preferred the view that the phrase “which involve the currency of any member” must be taken as a whole and understood to mean that the purpose of the provision is to protect states that are members of the Fund and not nonmembers. “In such cases, if an ‘exchange contract’ infringes the exchange control regulations of a member, then I think that it follows that it also involves the currency of that member.” ³¹ This view would mean that a member’s currency could be “involved” even though an exchange contract had no economic effect on the member. Had the intention of the drafters been the one attributed to them, they could simply have omitted the phrase “which involve the currency of any member” and changed “that member” to “a member” later in the provision.

It is doubtful whether the court was endorsing the proposition that Article VIII, Section 2(b), refers to the exchange control regulations of any member that has adopted regulations affecting the contract. In rejecting the view that a currency is “involved” only if the contract is denominated in that currency, the court referred to Theye y Ajuria v. Pan American Life Insurance Co., a decision of the Supreme Court of Louisiana,³² as a case that at first sight appeared to support the proposition. The real ratio of that decision in favor of the defendant was not, the court thought, that the insurance contracts were expressed in U. S. dollars. “The ratio was that both parties were at the material time residents of the United States, so that a contract payable in dollars could not be affected by Cuban exchange control legislation which no longer applied to the plaintiff after he had ceased to be a resident of Cuba.” ³³ The regulations provided, inter alia, that payments should be made in Cuba in respect of business that had been transacted there. The reason why Article VIII, Section 2(b), no longer applied to this regulation was that the parties had ceased to have any economic connection with Cuba.

The court dealt with the plaintiff’s argument that there should be no presumption that the exchange control regulations in the Italian decree were “maintained or imposed consistently with” the Articles. The plaintiff argued that the decree imposed restrictions on the making of payments and transfers for current international transactions within the meaning of Article VIII, Section 2(a), and Article XIX(i), a view with which the court sympathized, but that there was no evidence that the approval of the Fund was ever sought or obtained. The court concluded, however, that it should assume that the decree was maintained or imposed consistently with the Articles. The reasoning was as follows:

The effect of the Italian decree is no different from the effect of the legislation of many countries which one has encountered in practice. In my judgment, the real test concerning legislation of this kind is not merely its wording but also the manner in which it is administered. The words are “maintained or imposed,” and I think that “maintained” may well have been intended to include the manner in which the legislation is administered. The Italian decree contains no absolute prohibition but provides in each case for the possibility of obtaining ministerial authorisation. An English court should not assume without evidence, of which there is none in the present case, that the Italian authorities administer their exchange control regulations in a sense contrary to the obligations of Italy as a member of the I.M.F. In the absence of such evidence, and in relation to legislation of a kind which is internationally fairly commonplace in this field, it seems to me that a court of a member state should not assume without evidence that such legislation is not “maintained or imposed consistently with the I.M.F. agreement.”³⁴

This passage can be understood to mean that the English courts will decide for themselves where the burden of proof rests in relation to the consistency or inconsistency of exchange control regulations with the Articles. The danger of such an approach is that it may produce a result that is in conflict with the decision of the Fund on the consistency of particular exchange control regulations with the Articles. The determination of consistency depends not only on interpretation of the Articles but also on the exercise by the Fund of its functions to approve or not approve certain restrictions. If a court were to deal with the issue solely as one of interpretation or of the burden of proof in circumstances in which consistency depended on approval by the Fund, the court would substitute itself for the Fund as the administrator of the Articles.

The court’s suggested interpretation of the words “maintained or imposed” is not in accordance with the Fund’s understanding of those words or the way that it operates in the application of them. The word “maintained” is taken to refer to the privilege that a member has to continue to apply those restrictions on payments and transfers for current international transactions that it applied when it entered the Fund, without the necessity for approval by the Fund, if the member decides to avail itself of the transitional arrangements of Article XIV. For this reason, “maintained” precedes “imposed” in the text, whereas logically, on the court’s reasoning, “imposed” should precede “maintained.” The word “maintained” does not refer to the day-to-day operation of exchange control regulations. It is true, however, that a member must administer its exchange control regulations in accordance with the Articles at all times. If regulations have been approved by the Fund as restrictions under Article VIII, Section 2(a), but are being operated otherwise than in accordance with the terms of the approval, they will cease to be approved and therefore will cease to be consistent with the Articles. Sometimes approval is not sought because the authorities intend to grant licenses for all genuine payments and transfers for current international transactions and to impede only capital transfers. The purpose of the regulations will then be to isolate capital transfers, including those that are disguised. If the member observes its intention, the regulations will not be restrictions under Article VIII, Section 2(a). Once the regulations are operated so as to produce restrictions under that provision, the regulations will cease to be consistent with the Articles. In short, the necessity for operation at all times in accordance with the Articles follows from the word “restrictions” and not from the word “maintained.”

Italy became a member of the Fund on March 27, 1947 under a Resolution of the Board of Governors that prescribed the terms for membership.³⁵ Various provisions of the Articles give special privileges to members whose territories were occupied by an enemy of the United and Associated Nations.³⁶ Italy was not one of the United and Associated Nations, but after Italy became a cobelligerent of the United and Associated Nations it was occupied by an enemy of them. The Fund wanted to give Italy the benefits that the Articles accorded to countries occupied by the enemy. The Resolution declared, therefore, that the provisions under which these benefits were enjoyed should apply to Italy.³⁷ One of the provisions that was made to apply was “the parenthetical statement of Article XIV, Section 2.” ³⁸ That statement, in the context of the first sentence of Article XIV, Section 2, reads as follows:

In the post-war transitional period members may, notwithstanding the provisions of any other articles of this Agreement, 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.

Italy’s restrictions were maintained under Article XIV. Decree-Law No. 476 codified pre-existing exchange control laws and regulations apart from one measure in the decree that is not relevant for the present purpose.³⁹ If the decree had contained new restrictions on payments and transfers for current international transactions, Italy might have asserted in 1956 that it was authorized to introduce them without the necessity for approval by the Fund under the parenthetical statement in Article XIV, Section 2.⁴⁰ The Fund did not find that the decree introduced new restrictions for which approval was necessary.

A later occasion on which it became necessary to consider the decree was when Italy ceased, on February 15, 1961, to avail itself of the transitional arrangements of Article XIV and undertook to perform the obligations of Article VIII, Sections 2, 3, and 4, without qualification. At that time, any restrictions on payments and transfers for current international transactions that Italy would continue to apply would cease to be “maintained” under Article XIV, Section 2, but would be “imposed” under Article VIII, Section 2(a). What, then, was the Fund’s analysis on that occasion? As noted in the discussion of the Zavicha case, there is a restriction on payments and transfers for current international transactions only if the restriction is applied directly to the payment or transfer and not to some other aspect of the transaction that gives rise to an obligation to make a payment or transfer. In the words of the Fund’s decision on the subject, “The guiding principle in ascertaining whether a measure is a restriction on payments and transfers for current transactions under Article VIII, Section 2, is whether it involves a direct governmental limitation on the availability or use of exchange as such.” ⁴¹ Applying this criterion to the 1956 decree, the Fund concluded that any restrictive effect that there might be in the administration of it applied to the export or import of goods under Section 2 of the decree. Section 4 of the decree was an exchange control regulation but not a restriction on payments or transfers for current international transactions under the Articles, because an independent discretion was not exercised with respect to these payments or transfers. An importer’s ability to make payments was determined exclusively and automatically by the granting or withholding of authority to make the import.

The term “exchange control regulations” appears in Article VIII, Section 2(b). The issues in this part of the case, therefore, were, first, whether the provisions of Decree-Law No. 476 included exchange control regulations and, second, if there were such regulations whether they were “maintained or imposed consistently” with the Articles in the sense in which those words are used in Article VIII, Section 2(b). Article VIII, Section 5(a)(xi), refers to “exchange controls” and continues:

i.e., a comprehensive statement of exchange controls in effect at the time of assuming membership in the Fund and details of subsequent changes as they occur.

The word “controls” is used in Article VI, Sections 1 and 3, in relation to international capital movements. There is no textual evidence that the “exchange control regulations” of Article VIII, Section 2(b), or the “exchange controls” of Article VIII, Section 5(a)(xi), exclude controls that restrict payments and transfers for current international transactions or capital transfers. The Fund would not be able to discharge its duties effectively ⁴² if it did not receive national data on all exchange controls so that it could determine, for example, whether they were restrictions on payments and transfers for current international transactions or capital transfers or capital transfers that “restrict payments for current transactions or … unduly delay transfers of funds in settlement of commitments….”⁴³ Various aspects of Article VI, Section 3, show that the word “controls” applies to restrictions on payments and transfers for current international transactions as well as to capital transfers:

Members may exercise such controls as are necessary to regulate international capital movements, but no member may exercise these controls in a manner which will restrict payments for current transactions or which will unduly delay transfers of funds in settlement of commitments, except as provided in Article VII, Section 3(b), and in Article XIV, Section 2.

This provision shows that “controls” may be applied to payments for current international transactions if they are not restrictive or if they do not unduly delay transfers, or even when they are restrictive if they are authorized by Article VII, Section 3(b), or Article XIV, Section 2.

The conclusion to be derived from these textual elements is that “exchange control regulations” include regulations that restrict payments and transfers for current international transactions, nonrestrictive regulations, and regulations that control capital transfers. This conclusion is in accord with the normal understanding of the expression. Exchange control regulations deal with all international payments and transfers of foreign or domestic currency.

Once this conclusion is reached on the content of “exchange control regulations” in Article VIII, Section 2(b), it becomes possible to answer the second question, that is, whether exchange control regulations that deal with payments and transfers for current international transactions but do not restrict them and therefore do not require the approval of the Fund are “maintained or imposed consistently” with the Articles. Exchange control regulations applied to capital transfers are maintained or imposed consistently with the Articles because Article VI, Section 3, authorizes members to control capital transfers without the necessity for the Fund’s approval. Other exchange controls that do not restrict payments and transfers for current international transactions do not require the approval of the Fund, although it is true that there is no provision that states this proposition with the same forthrightness as Article VI, Section 3.

It is not difficult to see why exchange control regulations that do not require the approval of the Fund should nevertheless be considered to be “maintained or imposed consistently” with the Articles for the purpose of Article VIII, Section 2(b). If a member decides to apply exchange control regulations in order to determine whether payments and transfers are disguised capital transfers, so as to be able to exercise its right to control capital movements, or if a member wants to determine that authorization has been granted for trade transactions before permitting payments in respect of them, other members should not enforce contracts that deprive a member of these opportunities to protect itself. The conclusion on this part of the judgment is that the court was correct in holding that the Italian regulations relating to payments were consistent with the Articles, but based this holding on incorrect reasoning.

According to the court, the crucial and most difficult question in the case was whether or not the contracts were “exchange contracts” within the meaning of Article VIII, Section 2(b). One view, as expressed by Lord Radcliffe in In re United Railways of Havana and Regla Warehouses Ltd.,⁴⁴ a case not involving the Articles, was that a “true exchange contract” is one “which is a contract to exchange the currency of one country for the currency of another.” ⁴⁵ This definition, the court said, represents what one would normally understand by the expression as a matter of ordinary English in any context dealing with foreign currencies. The other and broader view was represented by the definition offered by Lord Denning, Master of the Rolls, in Sharif v. Azad,⁴⁶ a case involving Article VIII, Section 2(b). According to that definition, “exchange contracts” mean “any contracts which in any way affect the country’s exchange resources.” The court considered the language of various provisions of the Articles, the views of authors, certain cases involving Article VIII, Section 2(b), decided by the courts of other countries, and Sharif v. Azad. The result of this survey was a conclusion in favor of Lord Radcliffe’s view. Some of the reasons were that, as pointed out in the Banco do Brasil case, the broad interpretation would give no independent effect to the word “exchange” in the expression “exchange contracts,” that the broad interpretation would interfere with international trade, that contracting parties would find it too burdensome to seek to satisfy themselves before entering into international contracts that all necessary permissions had been obtained, and that the broad interpretation would embrace all contracts except those for barter.

Terruzzi case in Court of Appeal

The opinion of the lower court deserves detailed examination because of its scope and vigor, but the decision of the Court of Appeal, which affirmed the decision of the lower court, will be authoritative as a precedent in English courts unless it is overruled on some future occasion. The opinions of the three members of the Court of Appeal were confined largely to the meaning of the words “exchange contracts.” The court included Lord Denning, M.R., whose view of the meaning of “exchange contracts” in Sharif v. Azad has been referred to as the broad interpretation. In the Terruzzi case, he noted that he had adopted his earlier view without question, and he now resiled from it in favor of the other view. Lord Denning referred to a “notorious case,” decided by an English court in 1928,⁴⁷ that involved speculation in foreign exchange at a time when exchange rates were fluctuating. The judge in that case castigated the speculators in language of unusual forcefulness, which Lord Denning quoted.⁴⁸ The mischief perpetrated by speculators in foreign exchange and castigated in the 1928 case was, in the opinion of Lord Denning, the one that the participants at Bretton Woods intended to stop by means of Article VIII, Section 2(b). He went on:

I do not know of any similar mischief in regard to other contracts, that is, contracts for the sale or purchase of merchandise or commodities. Businessmen have to encounter fluctuations in the price of goods, but this is altogether different from the fluctuations in exchange rates. So far from there being any mischief, it seems to me that it is in the interest of international trade that there should be no restriction on contracts for the sale and purchase of merchandise and commodities; and that they should be enforceable in the territories of the members.⁴⁹

The contracts in this case were intended by the defendant to be speculations in the prices of metals, but the plaintiff had a contractual right to insist on the completion of purchases and sales of the metals, for which reason it has been seen that the contracts are treated by English law as contracts for the purchase and sale of metals and not gaming contracts. The plaintiffs, by “closing” out the contracts, did sell the defendant sufficient quantities of zinc to enable him to meet his forward commitments as and when they fell due.

There is no good reason for assuming that whereas contracts for the sale of currency can be harmful to a country, contracts requiring payments for trade transactions cannot. Nor can there be more of a presumption of possible harm in connection with one category compared with the other. If payments for trade were never harmful there would have been no reason to grant authority to restrict these payments under Article VIII, Section 2(a), or to restrict trade transactions under the General Agreement on Tariffs and Trade, which expressly recognizes the need for restrictions in certain circumstances to safeguard the balance of payments.⁵⁰ In policy after policy the Fund has emphasized that restrictions on payments for trade transactions are detrimental to currencies.⁵¹ If both categories of contract can undermine the strength of currencies, there is no reason to assume that authorized derogations from a multilateral system of payments for current international transactions are less deserving of respect if the derogation relates to payments for trade.

Lord Denning cited Article I(ii), Article VI, Section 3, Article VIII, Section 2(a), and Article XIX(i) as fortifying his view that “the Bretton Woods Agreement should not do anything to hinder legitimate contracts for the sale or purchase of merchandise or commodities.” ⁵² This objective would be achieved by interpreting “exchange contracts” as contracts for the exchange of one currency for another. He found it difficult to give sensible meaning to the words “which involve the currency of any member” on any other reading, whereas in his view they were intended to distinguish between the currencies of members and non-members. He added this thought, however:

It is no doubt possible for men of business to seek to avoid article VIII, section 2 (b), by various artifices. But I hope that the courts will be able to look at the substance of the contracts and not at the form. If the contracts are not legitimate contracts for the sale or purchase of merchandise or commodities, but are instead what Professor Nussbaum calls “monetary transactions in disguise,” … as a means of manipulating currencies, they would be caught by section 2(b).⁵³

Lord Justice Ormrod also found sufficient evidence in various provisions in which “exchange” appears, perhaps most clearly in the reference to “exchange transactions” in Article IV, Section 3, to support the conclusion that the phrase “exchange contracts” was used in its “primary sense.”⁵⁴ For him also the interpretation should be favored that interfered as little as possible with international trade.

Lord Justice Ormrod seemed to believe that a distinction could be drawn between current international transactions, such as contracts for the sale of goods, and exchange contracts, which explained for him why “such a restrictive provision” ⁵⁵ as Article VIII, Section 2(b), appears as the second of two subsections under the common heading “Avoidance of restrictions on current payments.” The thought seems to be that restrictions on payments for trade will be less effective, and to this extent “avoided,” if other members can enforce contracts notwithstanding the restrictions. On this view, the purpose of Article VIII, Section 2(b), is to exhort or require members not to take cognizance of restrictions adopted by fellow members.

Payments under contracts for the purchase and sale of currency are payments for current international transactions if they are not for the purpose of transferring capital. For example, the Fund has frequently decided that limitations on the amount of foreign currency that residents may purchase for visits abroad as tourists or businessmen are restrictions on payments for current international transactions. Furthermore, the “transfers” for current international transactions referred to in Article VIII, Section 2(a), involve purchases and sales of currency. The transfers relate to the proceeds of recent current international transactions. Under Section 2(a), parties to these transactions must be allowed to convert the currency of receipt into their own currency unless the Fund approves restrictions on these conversions. If the Fund authorized restrictions on these conversions, the authorization would be given under Article VIII, Section 2(a), and the exchange control regulations by which the restrictions were imposed on contracts to make the conversions would relate to “exchange contracts” under Section 2(b).

Lord Justice Ormrod advanced a new theory of the meaning of the word “involve” in Article VIII, Section 2(b), which, however, he thought had no special significance. He felt that its function was to bring within the scope of “exchange contracts” monetary transactions in disguise. The contract in the case before him was not a transaction of this kind. If it involved any currency it was sterling and not lire. It had not been shown that the defendant would have to acquire sterling for lire, but even if he did, lire would not be “involved” in the contract.

Those who support the interpretation of exchange contracts adopted in this case are led to regard the phrase in which the word “involve” appears as unimportant or to explain it unconvincingly as referring to monetary transactions in disguise or as excluding the exchange control regulations of nonmembers. Some such analysis is necessary in order to avoid the criticism that is made of the broad interpretation that it gives no independent meaning to the word “exchange” in the phrase “exchange contracts.” A reasonable meaning can be given to all elements in the provision if “exchange contracts” are understood to be all contracts that provide for international payments or transfers and if “involve” is taken to refer to the exchange control regulations of the member whose exchange resources would be affected by enforcement of the contract, provided that the regulations are maintained or imposed consistently with the Articles.

Lord Justice Ormrod was aware of the difficulty of deciding whether the regulations were maintained or imposed consistently with the Articles. He thought that this question could be resolved only by evidence that the Fund had approved the regulations, or by applying a presumption of validity, or by expert evidence as to the effect of the regulations.

Lord Justice Shaw reasoned that if some special meaning not to be found in a dictionary had been intended for “exchange contracts” they would have been defined in Article XIX. The words used for all concepts in the Articles are defined by dictionaries, but the meaning of many of the concepts not defined in Article XIX has proved to be controversial in the context of the Articles. The Fund has had to adopt decisions defining many of these concepts. In any event, there is more than one dictionary meaning of “exchange.” One meaning is foreign or domestic currency when involved in international payments. This is the meaning of the word “exchange” in the phrase “exchange control.”

Lord Justice Shaw expressed the opinion that the broad view of exchange contracts would embrace transfers of capital, but that such an extension of meaning would be unnecessary in order to serve the objects of the Articles. In his opinion, members are free to restrict capital transfers because they are outside the protection of Article VIII, Section 2(a), and therefore do not need the protection of Section 2(b). Current international transactions are within the protection of Section 2(a), but it would frustrate the purposes of the Articles to apply Section 2(b) to them. According to this analysis, there are three categories of international transaction: current transactions, capital transactions, and exchange contracts. Economists would not accept this classification. The courts made much of the presence of lawyers at Bretton Woods, but economists also were there. The Articles were drafted on the assumption that transactions would be classified either as current or capital. On the thesis of Lord Justice Shaw, Article XIX(i), which begins “Payments for current transactions means payments which are not for the purpose of transferring capital …” should have gone on to say “or which are not made under exchange contracts.”

The language of Article VIII, Section 2(b), does not exclude from exchange control regulations the control of capital transfers or of payments and transfers for current international transactions. Moreover, even if the courts’ definition of “exchange contracts” were accepted, it would include contracts to make capital transfers. The transferor moves from one currency into another. The harm that outflows of capital might do to a currency was one of the dominating concerns of the drafters of the Articles. The drafting history of Article VIII, Section 2(b), shows that it was regarded as a contribution to the deterrence of undesirable capital movements.⁵⁶ The suggestion of Lord Justice Shaw that they can be effectively controlled “at source” ⁵⁷ without any need to make contracts for them unenforceable could equally be made with respect to contracts requiring payments and transfers for current international transactions. These payments also can be controlled at the source, and neither more nor less effectively than capital transfers. Exchange controls are normally applied through the legislator’s authorized dealers, to whom parties must go whether they wish to make payments and transfers for current international transactions or capital transfers. Furthermore, the fact that payments are impeded at the source may be the reason why a contracting party sues in a foreign court and seeks damages for nonperformance or other relief notwithstanding the exchange control regulations. Finally, it has been seen that “exchange contracts” as defined by the courts in the Terruzzi case can provide for payments and transfers for current international transactions within the meaning of Article VIII, Section 2(a). A barrier has not been erected between the two subsections of Article VIII, Section 2.

some further reflections on the Terruzzi case

In both the lower and the appellate court the judges found support for their view of the meaning of “exchange contracts” in various provisions of the Articles, particularly Article IV, Sections 3 and 4, in which the word “exchange” appears in such formulations as “foreign exchange dealings,” “exchange transactions,” and “exchange operations.” They thought that these phrases clearly bore the meaning given to “exchange contract” by Lord Radcliffe. It has been noted that no reference was made in this connection to any of the provisions of the Articles in which the words “exchange control” appear.

A related textual point to be considered is that a purpose of the Articles is to establish a multilateral system of payments and transfers for current international transactions by prohibiting restrictions inconsistent with that system. The Articles are concerned, therefore, with all payments and transfers of this kind and not merely with those that take the form of contracts for the purchase and sale of currency. When derogations from the system are permitted in the form of restrictions, and members other than the legislating member are required to take the action required by Article VIII, Section 2(b), it is not obvious why the drafters should narrow their concern from all payments and transfers for current international transactions to any one class of them.

The courts were unwilling to give paramount effect to the Fund’s purpose of promoting international monetary cooperation because the Fund has the important purpose of promoting international trade as well. It is true that the attempt to establish a hierarchy of purposes is a dangerous and probably erroneous undertaking. Nevertheless, the jurisdiction of the Fund is confined to payments and transfers and does not extend to imports and exports. Even at the Bretton Woods Conference it was agreed that another international organization would be created with jurisdiction over trade.⁵⁸ Moreover, the issue in the case was not the effect to be given to the purposes of the Fund, but, on the assumption made by the courts that the Italian regulations were restrictions under Article VIII, Section 2(a), the effect to be given to an authorized derogation from the obligation to avoid these restrictions. Under Article I, the Fund must be guided in all its decisions by the purposes of the Fund. Therefore, if the Fund had decided to approve the restrictions, that decision would have been taken because in the particular circumstances of Italy the approval would promote the purposes of the Fund, taken as a whole, over the longer run. The assumption that the regulations amounted to restrictions under Article VIII, Section 2(a), was unfounded, but the regulations were exchange control regulations within the meaning of the Articles, and they must be regarded as consistent with the Articles even though approval of them was unnecessary under the Articles.

A more reasonable reading of Article VIII, Section 2(b), it has been suggested, is that exchange contracts mean contracts requiring international payments or transfers in foreign or domestic currency. This interpretation would explain various aspects of the provision that puzzled the courts. It would explain why the expression “exchange transactions” is not used. It would also explain why Article VIII, Section 2(b), is not part of the provisions dealing with exchange rates, in which the expression “exchange transactions” occurs, although at one time during the drafting of the Articles the substance of Article VIII, Section 2(b), was included in the other provisions. Furthermore, the words “involve the currency of any member” take on a more likely meaning than the exclusion of nonmembers. This exclusion, it was explained, was not necessary but was made out of an abundance of caution.⁵⁹ There was no need to exclude nonmembers in this provision because it follows of necessity from other provisions, such as Article XI, that nonmembers are not the beneficiaries of any obligations of members under the Articles.⁶⁰ On the reading that has been suggested, the words would point to the member whose exchange resources were affected and whose exchange control regulations were designed to protect them. The Cuban Insurance Cases⁶¹ show that parties may attempt to rely on the exchange control regulations of a member in circumstances in which the regulations do not affect the member’s resources.

The approach that has been suggested is different from the interpretation that was rejected in the Terruzzi case. The condition that a member’s exchange resources must be affected is derived from the words “involve the currency of any member” and not from “exchange contracts.” The language of Article VIII, Section 2(b), examined in the tranquillity that was not a feature of the three weeks of the Bretton Woods Conference, is not as good as it might be for conveying the meaning that has been suggested, but no reading is free from difficulty. It is submitted that the reading suggested here is far more reasonable than the one adopted in the Terruzzi case, and is indeed the correct reading.

The courts in the Terruzzi case were bothered by the breadth of any interpretation other than the one that they chose, but a more liberal interpretation would not be broader than the exchange control regulations that are regarded by a member as necessary and are authorized by or under the Articles.

The courts examined the decisions of a number of courts in member countries other than the United Kingdom, particularly because of the argument that it was important to achieve conformity in the interpretation of a provision that was now part of the domestic law of all members. Lord Justice Ormrod felt that this submission was weakened by the divergence that had developed between the courts in France and in the Federal Republic of Germany, on the one hand, and a court in Belgium, on the other hand. The survey of cases neglected decisions delivered in the last few years and, therefore, failed to note that the Supreme Court of the Federal Republic of Germany⁶² and the Court of Cassation in France,⁶³ the highest tribunals in these countries, have now adopted the view that exchange contracts are contracts that affect a member’s exchange resources. Much emphasis was placed on the obiter dictum in the Banco do Brasil case, but there was no mention of the treatment of that case in the Banco Frances case, although it must be noted that the judgments in the later case do not discuss the meaning of “exchange contracts.”

Zeevi case

The New York Court of Appeals in its decision of June 16, 1975 in J. Zeevi and Sons, Ltd., et al v. Grindlays Bank (Uganda) Limited⁶⁴ gave a restrictive application to Article VIII, Section 2(b), but the basis of the decision is not clear. On March 24, 1972 an Israeli corporation deposited with the defendant, Grindlays Bank, Ugandan currency valued at US$406,846.80 for the purpose of establishing a fund on which the plaintiff, an Israeli partnership, could draw money. On the same date, the defendant opened its irrevocable credit for US$406,846.80 in favor of the plaintiff and issued a letter of credit acknowledging that it had opened an irrevocable credit for the amount referred to and providing that the credit would be available against clean drafts drawn on the depositor in ten equal monthly installments beginning April 15, 1972. The defendant guaranteed the payment of drafts. The negotiating bank was authorized to claim reimbursement for its payments from First National City Bank (Citibank) by debits against the defendant’s account with Citibank. By directives of March and April 1972, the Bank of Uganda, acting with the authority of the Minister of Finance under the Exchange Control Act of Uganda, notified the defendant that foreign exchange allocations in favor of Israeli companies and nationals should be canceled and ordered the defendant to make no payments pursuant to the letter of credit. On April 14, 1972 the defendant informed Citibank of the action of the Ugandan authorities and directed it to make no payments. On December 28, 1972 Chemical Bank presented to Citibank for reimbursement ten drafts totaling the amount of the credit. Citibank returned the drafts and refused payment. The plaintiff as beneficiary of the letter of credit and the assignee of the plaintiff commenced this action by order of attachment on the defendant’s funds on deposit with Citibank. The defendant relied on various defenses, one of which was that refusal to dismiss the complaint was contrary to Article VIII, Section 2(b), of the Fund’s Articles.

The Court of Appeals emphasized the value to those in commerce of having a place at a financial center where they could be certain of the prompt availability of funds under an irrevocable letter of credit. A vast amount of this business was transacted in New York.

The parties, by listing United States dollars as the form of payment, impliedly … set up procedures to implement their trust in our policies. In order to maintain its preeminent financial position, it is important that the justified expectations of the parties to the contract be protected …⁶⁵

The court held that no effect could be given to the confiscatory and discriminatory act of the Ugandan Government. The act of State doctrine did not apply. Under that doctrine, the courts of the United States cannot question an act of a recognized foreign nation committed within its own territory.⁶⁶ In this case, however, the debt was not located in Uganda because it had no power to enforce or collect it.

With respect to the defense based on Article VIII, Section 2(b), the court held:

Contrary to defendants’ position, the agreement [i.e., the Articles], even when read in its broadest sense, fails to bring the letter of credit within its scope, since said letter of credit is not an exchange contract. In Banco do Brasil, S. A. v. Israel Commodity Co., … this court frowned on an interpretation of said provision of the Bretton Woods Agreement which “sweeps in all contracts affecting any members’ exchange resources as doing considerable violence to the text of the section.” ⁶⁷

Even if the broad interpretation of exchange contracts is rejected in accordance with the dictum in the Banco do Brasil case, the letter of credit might fall within some narrower interpretation. It would certainly seem to fall within the interpretation adopted in the Terruzzi case. The court may have proceeded on the principle, however, that suit by the beneficiary on the letter of credit could be severed from the contract between the defendant and the depositor to issue the letter of credit, which incontestably would fall within the Terruzzi definition.⁶⁸

The court did not inquire whether the discriminatory restriction had been imposed consistently with the Articles. Restrictions on payments and transfers for current international transactions cannot be introduced consistently with the Articles unless they are approved by the Fund.

Measures of Potential Output in Manufacturing for Eight Industrial Countries, 1955–78—jacques r. artus (pages 1–35)

The concepts of potential output and output gap are in constant use in arguments about the economic situation and the appropriateness of public policies. Such concepts are, however, difficult to define and even more difficult to measure. The purpose of the present study is to review these concepts and to estimate consistent series of potential output in manufacturing for Canada, the United States, Japan, France, the Federal Republic of Germany, Italy, the United Kingdom, and Sweden for the period 1955–75. Potential output series are also projected for the medium term (1976–78) on the basis of forecasts of available resources.

The production function method is selected as the best approach to derive potential output series. The function used here is a modified Cobb-Douglas function that allows for economies of scale and cyclical variations in the intensity of use of employed labor and of the capital stock. The estimation also makes use of pooled time-series cross-sectional techniques. At the cost of imposing certain constraints on the parameters, these techniques allow a large number of variables to be taken into account, such as the evolution of the mean age of the capital stock, the increase in the price of energy, and other factors specific to certain countries.

The study concludes that the rate of growth of potential output in manufacturing is now lower in most industrial countries than it was in the late 1960s. However, the fall is not as large as is often claimed, so that the output gaps early in 1976 were extremely high in all the major industrial countries. The principal reasons for the slowdown in the rate of growth of potential output are the lower rate of capital accumulation and the reduction of the normal workweek, rather than the direct effect of the increase in the price of energy. In Japan and the United States, the trend rate of “technical progress” seems also to have decreased, possibly because a larger part of new investment is devoted to pollution control.

A Simple Model of the Private Gold Market, 1968–74: An Exploratory Econometric Exercise—leslie lipschitz and ichiro otani (pages 36–63)

This paper is concerned with the specification and estimation of a model of the world gold market. Two approaches to an understanding of the gold market are common. The first approach is to regard it as an ordinary flow market in which gold is traded for its intrinsic commodity value and buyers use the gold as an input in the manufacture of some final good. The second is to see it as a stock market in which gold is held as a financial asset and no depletion of the stock of gold occurs. This paper considers both approaches to be oversimplified; it integrates the two views by separating industrial demand for gold from portfolio adjustment and by specifying behavioral equations for each. A price-expectations generating mechanism, required by the portfolio adjustment equation, is added. On the supply side, mine production is endogenized by a simple supply function. The model is closed by a market-clearing condition.

An exposition of the workings of the model is illustrated by reference to simple and familiar diagrams. Particular emphasis is given to the path back to equilibrium after a disturbance of the initial equilibrium.

The econometric model is not much modified from the suggested specification. Five endogenous variables are determined: price, output, industrial use, and speculative net hoarding demand for gold, as well as the price expected in the following period. The model is estimated by the two-stage least-squares method for the period from the second quarter of 1968 through the fourth quarter of 1974, and the estimated model is subjected to a dynamic simulation for the sample period to test its tracking performance. The simulation results indicate that it is quite plausible in representing historical developments in the gold market.

Two appendices present (1) a note on the supply function of gold and (2) details of data sources and derivations.

Dollar Intervention Within the Snake—joanne salop (pages 64–76)

This paper compares the effects of maintaining snake parities by means of dollar intervention and snake currency intervention. To this end, the paper considers two exogenous shocks to European currency markets. The first consists of a shift in demand from one snake currency to another; the second is a shift in demand from dollars to a snake currency. Both shocks are assumed to require intervention to maintain the snake parities, and in response to each shock the effects of the alternative intervention responses—that is, dollar intervention versus pure snake intervention—are analyzed.

The paper concludes that dollar intervention encompasses a broad quantitative spectrum of intervention responses, each with a different impact on snake-dollar rates. One such response, where the intervening European central banks purchase and sell identical quantities of dollars in exchange for their respective currencies, is equivalent to pure snake intervention. Because, in effect, the scope of the EEC for altering relative dollar supplies is clearly delineated, this form of response has a systematic impact on the value of the dollar. While other specific modes of dollar intervention are similarly systematic, on the whole, “dollar intervention” connotes the array of these responses and, without quantitative restrictions on its use, imparts discretion over the value of the dollar.

Purchasing Power Parity and the Balance of Payments—Some Empirical Evidence—arturo brillembourg (pages 77–99)

The theory of purchasing power parity (PPP) suggests that an overvalued currency, as measured by a relative price index (RPI), should be associated with either balance of payments deficits or a deterioration of the exchange rate. This paper concentrates on the relationship between the RPI and the balance of payments.

Using wholesale and consumer price indices as well as trade and income weights in aggregating the rest of the world, eight alternative measures of the RPI are constructed. Recognizing that cyclical economic activity will also affect the balance of payments, an additional variable is introduced, the relative cycle index (RCY). Using data from 14 industrial countries for the period from the third quarter of 1963 through the fourth quarter of 1974, distributed lag functions of the RPI and the RCY were estimated with respect to each of two measures of the balance of payments (the trade and overall balances).

This study concludes that the relationship between the RPI and the balance of payments, although statistically significant, is quite complex and that the straightforward use of the PPP theory is unwarranted as a model of balance of payments determination. Indeed, contrary to most common expectations, the results indicate that, in many cases, an increase in the RPI tends to cause an improvement rather than a deterioration in the balance of payments. It is also found that (a) the results are sensitive to the proxy used for the RPI; (b) the lag functions are complex, involving changes in the signs of the weights; and (c) although reasonably satisfactory for the trade balances of the larger countries, such a simple model of balance of payments determination has low explanatory power for the smaller countries as well as for the overall balances of payments. Thus, while there is evidence of a relationship between the balance of payments and the RPI, it is doubtful that much benefit can be reaped from using the latter as a forecasting tool for the balance of payments.

The Fiscal Role of Food Subsidy Programs—jeffrey m. davis (pages 100–27)

The paper provides an analysis of the benefits and costs of large-scale food subsidy programs in selected countries. The role of food subsidies as a major tool for income redistribution is discussed, and information is provided on the types of program currently in use. A review of the provisions of actual food subsidy schemes raises considerable doubts as to how far they are consistent with the objective of aiding the poorest groups in society. Few schemes affect those too poor to purchase at the subsidized price, while many seem to provide a “back door” method for raising the wages of the urban employed. Doubts are also raised as to the effectiveness of food subsidies as an instrument for reducing the rate of inflation. Against the questionable benefits of the schemes, the financial and balance of payments costs of food subsidies are found to have increased significantly in recent years. The paper also provides information on the various forms of implicit subsidy that are due to government measures that directly alter relative prices for the benefit of the consumer. Insofar as these measures reduce the supply of food, there may be a trade-off between the increase in short-run and long-run benefits to the consumer. In these circumstances it is suggested that the possibility of replacing large-scale food subsidy schemes, by cash transfers or small target-oriented programs, might usefully be explored.

Controlling Fluctuations in Credit—peter m. keller (pages 128–53)

The use of direct credit controls as instruments for achieving balance of trade and payments objectives is a well-known proposition; the present paper raises some questions related to the implementation of such a policy. In particular, the paper investigates with the help of a simple model the extent to which it is necessary to prevent short-run fluctuations in the volume of credit.

It is found that short-run fluctuations have a differential impact on trade and financial flows depending on the structure of the financial markets and the degree to which capital is internationally mobile. The paper advances the argument that as less developed countries are characterized by a simpler structure of financial markets and an absence of large-scale financial intermediation outside the banking system and of offsetting international capital movements, credit extended by the banking system is more directly related to expenditures and the trade balance than in more highly developed countries. This has obvious implications for the effectiveness of ceilings on bank credit as an instrument. Using reduced form estimates, simple simulations show that, for example, movements in domestic credit have indeed a more immediate and forceful impact on the trade balance in Korea, compared with the effects in the Federal Republic of Germany; however, the overall balance of payments in the Federal Republic of Germany is ultimately more sensitive, as international capital flows are offsetting, to a large extent, movements in domestic credit. It is also shown that where the authorities are primarily concerned with the pursuit of trade and expenditure targets, this requires the control of “total credit,” that is, of domestic credit plus net foreign borrowing, rather than of net domestic assets of the banking system. Moreover, in certain circumstances, one could usefully differentiate between movements in credit originating from open market operations in existing securities and those from new direct lending by the banking system. It is also necessary to take account of the effects of tight ceilings on bank lending on the volume of financial intermediation outside the banking system.

Inflation, Lags in Collection, and the Real Value of Tax Revenue—vito tanzi (pages 154–67)

The literature dealing with the impact of inflation on tax revenue has assumed that two conditions hold, namely, that (1) taxes are paid as they accrue, and that (2) tax systems are generally elastic. When these two assumptions are valid, inflation is likely to lead to increases in real tax revenue. On the other hand, when the assumptions do not hold—that is, when a country is characterized by substantial lags in tax collection or when its tax system has an elasticity close to one—the consequences of inflation can be quite different. This alternative situation applies to most developing countries and may even apply to some industrial countries.

In this paper, the problem of lags in collection is analyzed in a theoretical framework, which is subsequently used to explain the behavior of revenue during the recent Argentine inflation. The theoretical part shows how lags in payments and rates of inflation interrelate to affect real tax revenue. Assuming that the tax system has an elasticity not too different from one, a matrix can be developed that shows by how much real revenue falls when inflation (per month) increases by a certain amount and the average lag (in months) has a given value. The matrix also shows the gain in real revenue associated with a given decrease in the length of the collection lag. In addition, a mathematical appendix shows how the lag and the rate of inflation interrelate with the elasticity of the tax system.

This analysis is finally applied to Argentina. Defining Ti as the proportion of 1974 total tax revenue generated by a particular tax (or group of taxes), and Li as the lag between the time when the liability for that tax payment was created and the time when the payment was actually made, the tax system’s total lag was the sum of the product of Ti and Li. This total lag was estimated at 4.3 months and 5.7 months, depending on whether social security taxes were included. Using these total lags in conjunction with the change in the monthly rate of inflation between 1974 and 1975, it was shown that much of the sharp fall in revenue over those years could be attributed to the acceleration of inflation in conjunction with the lag in collection.

External Debt Management and Balance of Payments Policies—claudio m. loser (pages 168–92)

The paper analyzes the interrelations between financial programming, the balance of payments, and the use of quantitative guidelines on medium-term foreign borrowing. These various aspects of external policies have not always been integrated. Therefore, as a consequence of the different time frameworks for policy formulation, short-term financial policies may not be consistent with external debt management guidelines that would be appropriate in a medium-term context. The paper presents an analytical framework to treat the impact of foreign borrowing on the domestic economy’s rate of growth, financial flows, and balance of payments. The framework is based on a relatively simple macroeconomic model, in which the impact of capital flows on the rate of growth of output can be analyzed in a multiperiod perspective.

The model allows for the determination of coordinated aggregate demand, exchange rate, and external debt management policies designed to achieve internal and external equilibrium in the short run and over the medium term. The external debt management guidelines and associated balance of payments policies are described for those economies that are confronted with a potential constraint on the supply of external loans in the medium term. These constraints on prospective developments in the capital account may considerably narrow the range of policy alternatives for a viable financial program. Formulation of such a program requires that current account developments be made compatible with the probable availability of foreign financing.

These constraints on foreign financing should not be interpreted simply as limitations on the aggregate availability of foreign financing during any period of time. The debtor country will confront different terms for, and availabilities of, various types of loan. In view of these circumstances, debt management guidelines should ensure that the amounts and terms of new borrowing will yield the highest sustainable net resource transfer, and therefore define the upper limit on the current account. The current account results require coordination of demand and exchange rate policies to ensure financial stability over the medium term. The quantitative debt guidelines help a country to attain consistency between its financing requirements and the foreign financing available to it in the medium term.

The Fund Agreement in the Courts—XII—joseph gold (pages 193–231)

Some important decisions on the effect of the Fund’s Articles of Agreement on the recognition of the exchange controls of other members have been taken recently by courts in France, England, and the State of New York. In France it has been decided that damages in delict can be granted in respect of a party’s conduct in relation to a contract even if it is unenforceable under Article VIII, Section 2(b). In New York it has been decided that the rule relating to foreign revenue laws will not prevent claims in tort because a violation is involved of the exchange controls of another member of the Fund.

English courts have interpreted “exchange contracts” in Article VIII, Section 2(b), to mean contracts for the sale of foreign exchange and have rejected the interpretation adopted by other courts according to which the provision applies to contracts that affect the exchange resources of a country. The interpretation and reasoning of the English courts are open to many objections. A restrictive interpretation of the provision in relation to a letter of credit has been adopted in New York.

After a detailed analysis of the provision in the context of the Articles, the view is advanced that the correct interpretation of “exchange contracts” is that they involve payments or transfers to another country in foreign or domestic currency. The exchange controls referred to in the provision are those of the member whose exchange resources are affected by the payments or transfers.

The restrictive interpretations of the provision are harmful to the principle of cooperation among members of the Fund. For this reason, it is recommended that the interdependence that members recognize by joining the Fund should be promoted and not frustrated by recognizing in appropriate ways the exchange controls of other members that are consistent with the Articles. The courts should do this on the basis of the doctrine of public policy (ordre public) even if Article VIII, Section 2(b), does not apply. This approach would be particularly appropriate if followed by courts that adopt a restrictive interpretation of the provision. In one of the cases referred to above, the New York court has already followed this approach.

Estimation du potentiel de production relative au secteur manufacturier de huit pays industriels, 1955–78—jacques r. artus (pages 1–35)

Les notions de potentiel de production et d’écart de production apparaissent constamment au cours des discussions concernant la situation économique et le bien-fondé des politiques officielles. Elles sont cependant difficiles à définir et encore plus difficiles à quantifier. L’objet de la présente étude est d’examiner ces concepts et d’estimer, pour la période 1955–75, des séries comparables se rapportant au potentiel de production du secteur manufacturier au Canada, aux Etats-Unis, au Japon, en France, en République fédérale d’Allemagne, en Italie, Au Royaume-Uni et en Suède. On a aussi projeté des séries pour le potentiel de production à moyen terme (1976–78) d’après les prévisions concernant les ressources disponibles.

La méthode de la fonction de production a été retenue car elle constitue le meilleur moyen de dériver des séries relatives au potentiel de production. La fonction utilisée ici est une fonction Cobb-Douglas modifiée qui tient compte des économies d’échelle et des variations conjoncturelles affectant le degré d’utilisation de la population active et du stock de capital. En outre, cette estimation utilise simultanément des séries chronologiques raccordées relatives aux différents pays. Même si elles imposent certaines contraintes aux paramètres, ces techniques permettent de prendre en compte un grand nombre de variables, telles que l’évolution de l’âge moyen du stock de capital, l’enchérissement de l’énergie et d’autres facteurs particuliers à certains pays.

La conclusion à laquelle aboutit cette étude est que dans le secteur manufacturier de la plupart des pays industriels, le taux de croissance du potentiel de production est aujourd’hui inférieur à celui de la fin des années 60. Toutefois, le ralentissement n’est pas aussi important qu’on le prétend souvent et les écarts de production au début de 1976 étaient extrêmement larges dans tous les grands pays industriels. Si le rythme de croissance du potentiel de production a ralenti, c’est surtout en raison de la baisse du taux d’accumulation du capital et de la réduction de la semaine de travail normale, plutôt que de l’effet direct de l’enchérissement de l’énergie. Au Japon et aux Etats-Unis, le taux tendanciel du «progrès technique» semble aussi avoir baissé, peut-être parce qu’une fraction plus importante des nouveaux investissements est consacrée au contrôle de la pollution.

Un modèle simple du marché privé de l’or, 1968–74: exercice économétrique exploratoire—leslie lipschitz et ichiro otani (pages 36–63)

La présente étude traite de la spécification et de l’estimation d’un modèle du marché mondial de l’or. Il existe, en général, deux conceptions du marché de l’or. Suivant la première, on considère le marché de l’or comme un marché ordinaire de flux où l’or est échangé pour sa valeur intrinsèque en tant que marchandise utilisée par les acheteurs dans la fabrication d’un produit final. Suivant la deuxième, le marché de l’or est considéré comme une Bourse de valeurs où l’on détient de l’or en tant qu’actif financier et où n’intervient aucune diminution du stock d’or. Selon cette étude, ces deux conceptions sont trop simplistes; les auteurs tentent de les réunir en distinguant la demande industrielle d’or de la demande d’or qui s’exerce à des fins de placement et en représentant chacune d’elles par des équations de comportement appropriées. Les auteurs ajoutent un mécanisme qui engendre des anticipations de prix, nécessité par l’équation d’ajustement du portefeuille. Du côté de l’offre, la production minière est rendue endogène par une simple fonction d’offre. Le modèle est fermé par une condition d’équilibre.

L’exposé du fonctionnement du modèle est illustré par des graphiques simples et bien connus. Les auteurs insistent particulièrement sur le sentier de retour à l’équilibre après une rupture de l’équilibre initial.

Le modèle économétrique est très proche de la spécification suggérée. Cinq variables endogènes sont déterminées: le prix, la production, l’utilisation industrielle, la demande spéculative nette d’or aux fins de thésaurisation, enfin le prix anticipé pour la période suivante. Le modèle est estimé par la méthode des doubles moindres carrés pour la période allant du deuxième trimestre de 1968 à la fin du quatrième trimestre de 1974, et le modèle estimé est soumis à une simulation dynamique pour la période couverte par l’échantillon de manière à contrôler son aptitude prévisionnelle. Les résultats de la simulation montrent que ce modèle rend compte, de façon plausible, de l’évolution du marché de l’or observée dans le passé.

Deux appendices contiennent 1) une note sur la fonction d’offre de l’or et 2) des précisions sur les sources des données et sur les calculs.

Les interventions en dollars à l’intérieur du serpent—joanne salop (pages 64–76)

La présente étude compare les effets du maintien des marges de fluctuation entre les monnaies du serpent dans le cas d’interventions en dollars et dans celui d’interventions en monnaies du serpent. A cette fin, deux types de perturbation exogène affectant les marchés des changes européens ont été analysés. Dans le premier cas, la demande a délaissé une monnaie du serpent au profit d’une autre; dans le deuxième, c’est le dollar qui a été délaissé au profit d’une monnaie du serpent. Il est supposé que les deux perturbations exigent une intervention pour maintenir les marges de fluctuation entre les monnaies du serpent et on analyse dans le cas de chaque perturbation les effets de l’un et l’autre mode d’intervention, ceux de l’intervention en dollars et ceux de l’intervention en monnaies du serpent.

La conclusion de cette étude est que l’intervention en dollars couvre une large gamme de mesures quantitatives d’intervention, dont chacune a une incidence différente sur les taux de monnaies du serpent-dollar. Une de ces mesures, à savoir l’intervention des banques centrales européennes consistant à acheter et à vendre des montants identiques de dollars en échange de leur monnaie nationale, équivaut à une intervention en monnaies du serpent. Comme dans la pratique, la Communauté ne peut faire varier l’offre de dollars que dans des proportions bien délimitées, ce type de mesure a une incidence systématique sur la valeur du dollar. Alors que d’autres mesures spécifiques d’intervention en dollars sont tout aussi systématiques «intervention en dollars» désigne généralement l’ensemble de ces mesures et, en l’absence de restrictions quantitatives quant à son utilisation, permet d’agir sur la valeur du dollar.

Parité des pouvoirs d’achat et balance des paiements—Résultats empiriques—arturo brillembourg (pages 77–99)

Suivant la théorie de la parité des pouvoirs d’achat, une monnaie surévaluée, mesurée par un indice des prix relatifs, s’accompagne de déficits de la balance des paiements ou d’une détérioration du taux de change. L’auteur de la présente étude examine essentiellement la relation qui existe entre l’indice des prix relatifs et la balance des paiements.

L’auteur construit huit indices des prix relatifs différents en utilisant les indices des prix de gros et des prix à la consommation, pondérés par les échanges et le revenu, lorsqu’il effectue une agrégation pour le reste du monde. Reconnaissant que le cycle économique affecte lui aussi la balance des paiements, il introduit une variable supplémentaire, l’indice du cycle relatif. A partir des données de 14 pays industriels relatives à la période allant du troisième trimestre de 1963 au quatrième trimestre de 1974 inclus, l’auteur a estimé les fonctions à retards échelonnés de l’indice des prix relatifs et de l’indice du cycle relatif par rapport à chacune des deux mesures de la balance des paiements (la balance commerciale et la balance globale).

Il ressort de cette étude que la relation entre l’indice des prix relatifs et la balance des paiements, bien qu’elle soit statistiquement significative, est assez complexe, et que l’on ne saurait recommander de construire un modèle de détermination de la balance des paiements qui repose directement sur la théorie de la parité des pouvoirs d’achat. En fait, contrairement à ce à quoi l’on pourrait s’attendre, les résultats montrent que, dans de nombreux cas, une hausse de l’indice des prix relatifs entraîne une amélioration de la balance des paiements plutôt qu’une détérioration. On observe aussi que a) les résultats sont influencés par la variable utilisée pour calculer de manière approchée l’indice des prix relatifs; b) les fonctions à retards échelonnés sont complexes, car elles entraînent des changements dans les signes des coefficients de pondération et c) s’il est relativement satisfaisant pour les balances commerciales des grands pays, ce modèle simple de détermination de la balance des paiements a une faible valeur explicative pour les petits pays et pour les balances des paiements globales. Ainsi, bien que l’on constate qu’il existe une relation entre la balance des paiements et l’indice des prix relatifs, il est douteux qu’on puisse trouver grand avantage à utiliser ce dernier comme instrument de prévision de la balance des paiements.

L’incidence budgétaire des programmes de subventions alimentaires—jeffrey m. davis (pages 100–27)

L’article fait une analyse des bénéfices et des coûts de vastes programmes de subventions alimentaires dans quelques pays. Il examine le rôle majeur que jouent les subventions alimentaires en tant qu’instrument de redistribution des revenus et donne des renseignements sur les types de programmes actuellement utilisés. Il étudie les dispositions des programmes de subventions alimentaires en vigueur et, à cet égard, se demande très sérieusement dans quelle mesure ces programmes sont conformes à leur objectif: aider les groupes les plus démunis de la société. Peu de programmes touchent ceux qui sont trop pauvres pour acheter au prix subventionné tandis que bon nombre semblent fournir un artifice pour élever les salaires des travilleurs urbains. L’article met aussi en doute l’efficacité des subventions alimentaires pour réduire le taux d’inflation. Il met en question non seulement la portée des avantages de ces programmes mais encore constate que les coûts financiers des subventions alimentaires et leur incidence sur la balance des paiements ont fortement augmenté ces dernières années. L’auteur décrit par ailleurs les différentes formes de subventions implicites dues aux mesures gouvernementales qui modifient directement les prix relatifs au bénéfice du consommateur. Pour autant que ces mesures réduisent l’approvisionnement en aliments, il peut y avoir un choix à faire entre l’augmentation des avantages à court terme et celle des avantages à long terme pour le consommateur. Dans ces conditions, l’auteur propose d’envisager la possibilité de remplacer les vastes programmes de subventions alimentaires par des transferts d’argent ou par de petits programmes à objectifs spécifiques.

Le contrôle des fluctuations du crédit—peter m. keller (pages 128–53)

L’utilisation de mesures directes de contrôle du crédit afin d’atteindre des objectifs en matière de commerce et de paiements est une question bien connue; l’auteur de la présente étude soulève un certain nombre de points concernant la mise en oeuvre d’une telle politique. Il cherche plus particulièrement à déterminer, à l’aide d’un modèle simple, dans quelle mesure il est nécessaire d’éviter des fluctuations à court terme du volume du crédit.

L’auteur constate que les fluctuations à court terme exercent sur les flux commerciaux et financiers un effet différent selon la structure des marchés financiers et le degré de mobilité des capitaux sur le plan international. D’après lui, les pays peu développés étant caractérisés par des marchés financiers d’une structure assez simple et par l’absence d’intermédiation financière sur une grande échelle à l’extérieur du système bancaire et de mouvements de capitaux internationaux compensateurs, le crédit accordé par le système bancaire est plus directement lié aux dépenses et à la balance commerciale que dans les pays ayant atteint un stade plus avancé de développement. Cette thèse a des conséquences évidentes pour ce qui est de l’utilité pratique des plafonds placés sur le crédit bancaire. Les méthodes de simulation simple montrent, notamment, si l’on utilise des estimations en forme réduite, que l’évolution du crédit intérieur exerce effectivement sur la balance commerciale de la Corée un effet plus immédiat et plus fort que dans le cas de la République fédérale d’Allemagne; cependant, la balance globale des paiements de la République fédérale d’Allemagne est en fin de compte plus sensible, car les flux de capitaux internationaux compensent dans une large mesure l’évolution du crédit intérieur. Cette étude montre également que, dans les pays où les autorités accordent la priorité aux objectifs fixés en matière de commerce et de dépenses, il est nécessaire de contrôler le «crédit total», c’est-à-dire la somme du crédit intérieur et des emprunts extérieurs nets, plutôt que celui des avoirs intérieurs nets du système bancaire. En outre, on peut utilement établir dans certains cas une distinction entre les variations du crédit qui résultent des opérations d’open market sur valeurs existantes et les variations dues aux nouveaux prêts directs consentis par le système bancaire. Il est également nécessaire de tenir compte des effets d’un encadrement rigoureux du crédit bancaire sur le volume des opérations d’intermédiation financière à l’extérieur du système bancaire.

L’inflation, les retards de recouvrement et la valeur réelle des recettes fiscales—vito tanzi (pages 154–67)

Les ouvrages qui traitent de l’incidence de l’inflation sur les recettes fiscales prennent comme point de départ deux hypothèses, à savoir, 1) que les impôts sont payés au fur et à mesure qu’ils échoient et 2) que les régimes fiscaux sont généralement élastiques. Lorsque ces deux hypothèses sont valides, l’inflation aboutit normalement à un accroissement des recettes fiscales réelles. Par contre, lorsqu’elles ne le sont pas—c’est-à-dire lorsqu’un pays se caractérise par des retards substantiels dans le recouvrement de l’impôt ou lorsque son régime fiscal a une élasticité proche de l’unité—les conséquences de l’inflation peuvent être très différentes. Cette situation s’applique à la plupart des pays en développement et peut même s’appliquer à quelques pays industrialisés.

Le présent article analyse le problème des retards de recouvrement dans un cadre théorique qui est ultérieurement utilisé pour expliquer le comportement des recettes pendant la récente période d’inflation en Argentine. La partie théorique montre comment les retards de paiements et les taux d’inflation se conjuguent pour influer sur les recettes fiscales réelles. Dans l’hypothèse oú le régime fiscal a une élasticité qui n’est pas trop éloignée de l’unité, il est possible de mettre au point une matrice qui montre dans quelle mesure les recettes réelles diminuent lorsque l’inflation (par mois) augmente à un certain rythme et lorsque le retard moyen (en mois) a une valeur donnée. La matrice montre aussi le gain des recettes réelles lié à une diminution donnée de la durée du retard de recouvrement. De plus, une annexe mathématique montre comment le retard et le taux d’inflation sont liés à l’élasticité du régime fiscal.

L’auteur applique enfin cette analyse au cas de l’Argentine. Définissant Ti comme étant la part du total des recettes fiscales de 1974 engendré par un impôt (ou groupe d’impôts) particulier, et Li comme étant le décalage entre la date de l’échéance de l’impôt et celle du paiement effectif, il conclut que le décalage est la somme du produit de Ti et Li. Ce décalage total a été estimé à 4,3 mois et 5,7 mois, selon que les cotisations à la sécurité sociale sont incluses ou non. Utilisant ces décalages de concert avec la variation du taux mensuel d’inflation entre 1974 et 1975, il montre que la baisse brutale des recettes au cours de ces années peut être en grande partie attribuée à l’accélération de l’inflation et au retard de recouvrement.

Politique pour la gestion de la dette extérieure et la balance des paiements—claudio m. loser (pages 168–92)

L’auteur analyse les relations entre la programmation financière, la balance des paiements et l’utilisation de normes quantitatives en matière d’emprunt extérieur à moyen terme. Ces aspects des paiements extérieurs n’ont pas été toujours envisagés globalement. Aussi, l’orientation de la politique étant définie dans des cadres chronologiques différents, la politique financière à court terme n’est pas toujours compatible avec les normes de gestion de la dette extérieure qui seraient souhaitables à moyen terme. L’auteur présente un cadre analytique permettant d’étudier les effets de l’emprunt extérieur sur le taux de croissance du secteur économique intérieur, les flux financiers et la balance des paiements. Ce cadre est établi à partir d’un modèle macroéconomique relativement simple, dans lequel il est possible d’analyser les effets qu’exercent les flux de capitaux sur le taux de croissance de la production au cours de plusieurs périodes.

Ce modèle permet de déterminer un ensemble de mesures coordonnées adoptées sur le plan de la demande globale, du taux de change et de la gestion de la dette extérieure afin d’arriver à l’équilibre intérieur et extérieur à court terme et à moyen terme. L’auteur définit des orientations en matière de gestion de la dette extérieure et des programmes de mesures connexes en matière de politique de balance des paiements pour les pays oú l’offre de prêts extérieurs risque d’être limitée à moyen terme. Les contraintes qui pèsent ainsi sur l’évolution future du compte de capital peuvent réduire considérablement la gamme des politiques compatibles avec un programme financier viable. La définition d’un tel programme exige que l’évolution du compte courant soit compatible avec les possibilités de financement extérieur.

Ces contraintes qui pèsent sur le financement extérieur ne limitent pas seulement le volume global de ce financement au cours d’une période quelconque, mais elles influent aussi sur l’importance respective des divers degrés de prêts que peut obtenir le pays débiteur et sur les conditions dont ils sont assortis. De ce fait, les orientations en matière de gestion de la dette doivent garantir que les montants et les conditions des nouveaux emprunts correspondent au volume maximum supportable de transferts nets de ressources et donc indiquent la limite supérieure du compte courant. Pour que le compte courant évolue de façon satisfaisante, il faut une coordination des politiques de la demande et des taux d’intérêt, de manière à assurer la stabilité financière à moyen terme. Les orientations quantitatives en matière de dette aident un pays à ajuster ses besoins de financement au moyen de financement extérieur dont il peut disposer à moyen terme.

The Fund Agreement in the Courts—XII—joseph gold (pages 193–231)

Des décisions judiciaires importantes ont été rendues récemment en France, en Grande-Bretagne et dans l’Etat de New York quant aux effets des statuts du Fonds sur la reconnaissance de la réglementation du contrôle des changes édictée par d’autres membres. En France, la jurisprudence a conclu à la «responsabilité quasi-délictuelle», entraînant imposition de dommages-intérêts à cause du comportement d’une partie dans l’exécution d’un contrat, même lorsque ledit contrat est inexécutoire au titre de l’article VIII, section 2 b) des Statuts. A New York, il a été décidé que la règle en matière de législation fiscale étrangère n’exclut nullement l’action en réparation de préjudice du fait qu’il y a eu violation de la réglementation du contrôle des changes d’un autre Etat membre du Fonds.

Pour les tribunaux britanniques, l’expression «contrat de change» de l’article VIII, section 2 b), désigne les contrats portant cession de devises; ils rejettent l’interprétation donnée par d’autres tribunaux, selon laquelle la disposition s’applique aux contrats qui mettent en jeu les ressources de change d’un pays. L’interprétation et le raisonnement auxquels ont recouru les tribunaux britanniques prêtent le flanc à plusieurs objections. Une interprétation restrictive de la disposition a été donnée par un tribunal de New York dans une affaire portant sur une lettre de crédit.

Après une analyse approfondie de la disposition, dans le contexte des Statuts, il est soutenu que l’interprétation correcte de l’expression «contrat de change», est que ces contrats impliquent des paiements ou des transferts, en monnaie étrangère ou en monnaie locale, à destination d’un autre pays. Les contrôles de change visés par la disposition sont ceux qu’exercent les membres dont les ressources de change sont affectées par lesdits paiements ou transferts.

Les interprétations restrictives de la disposition portent atteinte au principe de la coopération entre membres du Fonds. Pour cette raison, il est recommandé que l’interdépendance entre pays, dont les membres reconnaissent l’importance en adhérant au Fonds, soit développée et non privée de ses effets, par la prise en considération d’une manière appropriée, par tous les membres des réglementations de contrôle des changes des autres, dès lors que ces mesures sont compatibles avec les Statuts. Les tribunaux devraient y parvenir en se fondant sur les principes d’ordre public même dans les cas oú l’article VIII, section 2 b), ne s’applique pas. Cette attitude serait particulièrement opportune si elle était adoptée par les tribunaux qui optent pour une interprétation restrictive. Une telle attitude a déjà été adoptée par la Cour d’appel de l’Etat de New York dans l’une des espèces susvisées.

Medición de la producción manufacturera en potencia en ocho países industriales, 1955–78—jacques r. artus (páginas 1–35)

Los conceptos de producción en potencia y vacío de la producción aparecen constantemente en los argumentos en torno a la situación económica y a lo apropiado de la política estatal. Sin embargo, dichos conceptos resultan aquí difíciles de definir y aun más difíciles de medir. La finalidad del presente estudio es examinar dichos conceptos y estimar series coherentes de la producción manufacturera en potencia para Canadá, Estados Unidos, Japón, Francia, Italia, Reino Unido, República Federal de Alemania y Suecia durante el período 1955–75. Se hace también una proyección de las series de producción en potencia para el plazo medio (1976–78) a base de pronósticos de los recursos disponibles.

Se ha seleccionado el método de la función de producción como el mejor sistema para obtener las series de producción en potencia. La función aquí utilizada es la función Cobb-Douglas modificada, que permite la incorporación de las economías de escala y las variaciones cíclicas en la intensidad de utilización de la mano de obra empleada y de la masa de capital. La estimación utiliza también las técnicas de series cronológicas combinadas de sección representativa. Estas técnicas, al costo de imponer ciertas limitaciones a los parámetros, permiten que se tengan en cuenta un gran número de variables tales como la evolución de la edad media de la masa de capital, la subida del precio de la energía, y otros factores específicos en determinados países.

Se llega a la conclusión de que la tasa de crecimiento de la producción manufacturera en potencia es ahora inferior en la mayoría de los países industriales de lo que era a finales de la década de 1960. Ahora bien, esta disminución no es tan grande como se ha dicho a veces, de forma que el vacío de la producción de comienzos de 1976 fue amplísimo en todos los principales países industriales. Las razones más importantes del amino-ramiento de la tasa de crecimiento de la producción en potencia son la tasa inferior de acumulación de capital y la reducción de la semana normal de trabajo, no el efecto directo de la subida en el precio de la energía. En Japón y Estados Unidos parece haber disminuido también el ritmo de tendencia del “progreso técnico”, posiblemente porque se esté dedicando al control de la polución una mayor parte de la nueva inversión.

Un modelo sencillo del mercado privado del oro (1968–74): Ejercicio econométrico exploratorio—leslie lipschitz e ichiro otani (páginas 36–63)

Este artículo trata de la especificación y estimación de un modelo del mercado mundial del oro. Se suelen aplicar dos enfoques para estudiar el mercado del oro. El primero consiste en considerarlo como un mercado corriente de flujos en que el oro se negocia por su valor intrínseco de mercancía y los compradores lo usan como insumo en la manufactura de algún producto final. El segundo, en considerarlo como un mercado de masas en que el oro se mantiene como activo financiero y la masa de oro no se reduce. En este trabajo se considera que ambos enfoques son excesivamente simples y se integran separando la demanda industrial de oro del ajuste de cartera y especificando ecuaciones de comportamiento para cada uno. Se agrega un mecanismo de generación de expectativas de precios, necesario para la ecuación de ajuste de cartera. En cuanto a la oferta, la producción minera se hace endógena con una simple función de oferta. El modelo se cierra con una condición de agotamiento del mercado.

La descripción del funcionamiento del modelo se ilustra por medio de diagramas sencillos y bien conocidos. Se insiste especialmente en el sendero de vuelta al equilibrio después de la perturbación del equilibrio inicial.

El modelo econométrico no se modifica mucho con la especificación propuesta. Se determinan cinco variables endógenas: precio, producción, uso industrial y demanda de oro especulativa neta para atesoramiento, así como el precio previsto para el período siguiente. El modelo para el período del segundo trimestre de 1968 al último de 1974 se estima por mínimos cuadrados bietápicos y el modelo estimado se hace objeto de una simulación dinámica para el período de la muestra para verificar su capacidad explicativa. Los resultados indican que la simulación es bastante efectiva para representar la evolución histórica del mercado del oro.

En dos apéndices se presentan: 1) un comentario sobre la función de oferta de oro y 2) detalles sobre las fuentes y derivación de los datos.

Intervención con dólares en la serpiente—joanne salop (páginas 64–76)

En este trabajo se comparan los efectos que se producen cuando se mantienen las paridades de la serpiente por medio de la intervención con dólares y de la intervención con monedas de la serpiente. Con esta finalidad, se comparan dos choques exógenos en los mercados europeos de monedas. El primero consiste en un cambio de la demanda de una moneda de la serpiente por la demanda de otra; el segundo, en un cambio de la demanda de dólares por la demanda de una de las monedas de la serpiente. Se supone que ambos choques requieren la intervención para mantener las paridades de la serpiente, y se analizan los efectos de las variantes de intervención, es decir, la intervención con dólares o la intervención con monedas de la serpiente, que pueden adoptarse como reacción a cada choque.

En el trabajo se llega a la conclusión de que la intervención con dólares abarca una amplia gama cuantitativa de reacciones de intervención, cada una con un impacto diferente en los tipos entre el dólar y las monedas de la serpiente. Una de esas reacciones, como la que consiste en que los bancos centrales europeos que intervienen compran y venden cantidades idénticas de dólares a cambio de sus monedas respectivas, es equivalente a una pura intervención con monedas de la serpiente. Debido a que, de hecho, el margen de la Comunidad para variar las ofertas relativas de dólares queda claramente delineado, esta forma de reacción tiene un impacto sistemático en el valor del dólar. Si bien otras formas específicas de intervención con dólares son análogamente sistemáticas, en general, la “intervención con dólares” denota el conjunto de estas reacciones y, sin restricciones cuantitativas respecto a su uso, introduce el elemento de discreción en cuanto al valor del dólar.

Paridad del poder adquisitivo y balanza de pagos: Algunas pruebas empíricas—arturo brillembourg (páginas 77–99)

Según la teoría de la paridad del poder adquisitivo (PPA), la situación en que una moneda esté sobrevaluada, con referencia a un índice de precios relativos (IPR), deberá ir unida ya sea a un déficit de balanza de pagos o al empeoramiento del tipo de cambio. En este trabajo se estudia la relación entre el IPR y la balanza de pagos.

Se obtienen ocho medidas diferentes del IPR sobre la base de índices de precios al por mayor y al consumidor, y ponderaciones del comercio y del ingreso cuando se trata de índices agregados del resto del mundo. Como las variaciones relativas del ciclo económico repercutirán también en la balanza de pagos, se incorpora una variable más: el índice de posición relativa en el ciclo económico (CER). Con datos sobre 14 países industriales, correspondientes al período del tercer trimestre de 1963 al último de 1974, se estiman funciones de desfases distribuidos del IPR y el CER con respecto a dos aspectos de la balanza de pagos (las balanzas comercial y global).

De este estudio se desprende que la relación entre el IPR y la balanza de pagos, aunque estadísticamente significativa, es muy compleja, y no se justifica aplicar directamente la teoría de la paridad del poder adquisitivo como modelo de determinación de la balanza de pagos. Contrariamente a las previsiones más corrientes, los resultados indican que, en muchos casos, al aumentar el IPR, la balanza de pagos tiende a mejorar en lugar de empeorar. Se desprende también que a) los resultados dependen de la variable que se utilice en sustitución del IPR; b) las funciones de desfases distribuidos son complejas y entrañan cambios de signo en las ponderaciones, y c) aunque moderadamente satisfactorio en el caso de las balanzas comerciales de los países más importantes, un modelo tan simple de determinación de la balanza de pagos poco explica en el caso de los países más pequeños y de las balanzas globales de pagos. Por lo tanto, aunque se haya demostrado una relación entre la balanza de pagos y el IPR, es dudoso que este último sirva mucho como herramienta de previsión del comportamiento de la balanza de pagos.

La función fiscal de los programas de subsidios para alimentos—jeffrey m. davis (páginas 100–27)

En este artículo se ofrece un análisis de los beneficios y costos de los programas de subsidios para alimentos en gran escala de países seleccionados. Se examina la función de los subsidios para alimentos como uno de los principales instrumentos en la redistribución del ingreso. El estudio de las disposiciones de los planes actuales de subsidios para alimentos plantea considerables dudas en cuanto a la medida en que resultan adecuados para lograr el objectivo de ayudar a los grupos más pobres de la sociedad. Son pocos los planes que afectan a quienes son demasiado pobres para comprar al precio subsidiado, al tiempo que muchos parecen proporcionar un método “indirecto” para aumentar los salarios de los trabajadores urbanos. También surgen dudas sobre la eficacia de estos subsidios como medio para reducir la tasa de inflación. Frente a los dudosos beneficios de los planes, los costos financieros y de balanza de pagos de los subsidios para alimentos han aumentado mucho en los últimos años. Además, se presenta información acerca de las diversas formas de subsidios implícitos que se deben a las medidas del gobierno que alteran directamente los precios relativos en beneficio del consumidor. En cuanto estas medidas reducen la oferta de alimentos, puede haber más relación de compensación negativa entre el aumento de los beneficios a corto plazo y a largo plazo para el consumidor. En estas circunstancias puede ser útil explorar la posibilidad de sustituir los planes de subsidios para alimentos en gran escala por transferencias de dinero o pequeños programas con metas específicas.

Control de las fluctuaciones del crédito—peter m. keller (páginas 128–53)

Es bien conocida la proposición de utilizar los controles directos del crédito como instrumentos para conseguir objetivos de balanza comercial y de pagos; en el presente trabajo se plantean algunas cuestiones relativas a la aplicación de semejante política. En particular, en el mismo se investiga, con ayuda de un modelo sencillo, hasta qué punto es preciso evitar las fluctaciones a corto plazo del volumen del crédito.

Se ha observado que las fluctuaciones a corto plazo surten un efecto diferencial en los flujos comerciales y financieros, según sea la estructura de los mercados financieros y el grado de movilidad internacional del capital. En el trabajo se esgrime el argumento de que, como los países menos desarrollados se caracterizan por una estructura más sencilla de mercados financieros, así como por la falta de intermediarios financieros en gran escala fuera del sistema bancario y de movimientos de capital internacional neutralizadores, el crédito extendido por el sistema bancario está más directamente relacionado con el gasto y la balanza comercial que en los países de mayor desarrollo. Esto tiene consecuencias obvias respecto a la efectividad de los límites máximos del crédito bancario como instrumento. Utilizando estimaciones de formato reducido, las simulaciones simples indican que, por ejemplo, los movimientos del crédito interno causan indudablemente un efecto más inmediato y contundente en la balanza comercial de Corea, en comparación con los efectos surtidos en la República Federal de Alemania; ahora bien, la balanza global de pagos de la República Federal de Alemania es, en definitiva, más sensible, puesto que los flujos internacionales de capital están neutralizando, en gran medida, los movimientos del crédito interno. También se pone de relieve que cuando las autoridades se interesan primordialmente en alcanzar objetivos de comercio y gasto, ello requiere el control del «crédito total», es decir, el crédito interno más el endeudamiento externo neto, en lugar de los activos internos netos del sistema bancario. Además, en ciertas circunstancias, cabría diferenciar provechosamente entre los movimientos crediticios derivados de operaciones de mercado abierto en títulos existentes y los originados por nuevos préstamos directos otorgados por el sistema bancario. También es preciso tener en cuenta el efecto que la restricción del límite máximo de los préstamos concedidos por los bancos ejerce en la cantidad de mediación financiera fuera del sistema bancario.

Inflación, desfases en la recaudación y valor real de los ingresos tributarios—vito tanzi (páginas 154–67)

Las obras que se ocupan del impacto de la inflación sobre los ingresos tributarios hacen el supuesto de que se cumplen dos condiciones: 1) que los impuestos se pagan en el momento en que se devengan y 2) que los sistemas tributarios son generalmente elásticos. Cuando son válidos estos dos supuestos, lo probable es que la inflación ocasione aumentos en los ingresos tributarios reales. Por otra parte, cuando no se cumplen dichos supuestos—es decir, cuando un país se caracteriza por grandes desfases en la recaudación de los impuestos o cuando su sistema tributario tiene una elasticidad cercana a la unidad—las consecuencias de la inflación pueden ser muy distintas. Esta diferente situación se aplica a la mayoría de los países en desarrollo y puede incluso aplicarse a algunos países industriales.

En el presente artículo, el problema de los desfases en la recaudación se analiza en un marco teórico que se utiliza posteriormente para explicar el comportamiento de los ingresos públicos durante la reciente inflación en Argentina. La parte teórica indica la forma en que los desfases en los pagos y las tasas de inflación se interrelacionan para afectar a los ingresos tributarios reales. Suponiendo que el sistema tributario tenga una elasticidad no muy distinta de la unidad, puede formarse una matriz que indique la cuantía de la disminución del ingreso real al aumentar la inflación (mensual) en una cantidad determinada, teniendo el desfase medio (en meses) un valor dado. La matriz indica también el aumento de ingresos reales que va unido con una determinada disminución en la longitud del desfase de recaudación. Se presenta, además, un apéndice matemático en el que se indica la forma en que están interrelacionados el desfase y la tasa de inflación con la elasticidad del sistema tributario.

Por último, se aplica a Argentina el mencionado análisis. Definiendo Ti como la proporción de los ingresos tributarios totales generados en 1974 por un determinado impuesto (o grupo de impuestos), y Li como el desfase entre el momento en que se origina la obligación de pagar dicho impuesto y el momento en que efectivamente se efectuó el pago, el desfase total del sistema tributario es la suma del producto de Ti y Li. Este desfase total se estimó en 4,3 meses y 5,7 meses, según que se incluyeran los impuestos de la seguridad social. Utilizando dichos desfases totales junto con la variación en la tasa mensual de inflación entre 1974 y 1975, se demuestra que gran parte de la fuerte disminución en los ingresos durante dichos años puede atribuirse a la aceleración de la inflación junto con el desfase de recaudación.

Gestión de la deuda externa y políticas de balanza de pagos—claudio m. loser (páginas 168–92)

En el documento se analiza la interrelación entre la programación financiera, la balanza de pagos y el uso de lincamientos cuantitativos para la obtención de préstamos externos a mediano plazo. Estos aspectos de la política externa no siempre han sido integrados. En consecuencia, debido a los diferentes plazos en que se encuadra la formulación de las medidas de política, las políticas financieras a corto plazo pueden no concordar con lincamientos de gestión de la deuda externa apropiados en el mediano plazo. Se presenta un marco analítico para examinar el impacto de la obtención de préstamos externos en el crecimiento de la economía, interna, los flujos financieros y la balanza de pagos. Dicho marco se basa en un modelo macroeconómico relativamente sencillo, en el que el efecto de los flujos de capital en la tasa de crecimiento puede analizarse en una perspectiva multiperiódica.

El modelo permite determinar políticas coordinadas de demanda agregada, tipo de cambio y gestión de la deuda externa encaminadas a lograr el equilibrio interno y externo a corto y a mediano plazo. Se describen lincamientos para la gestión de la deuda externa y las consiguientes políticas de balanza de pagos de las economías que enfrentan una posible limitación de la oferta de préstamos externos a mediano plazo. Estas limitaciones a la eventual evolución de la cuenta de capital pueden reducir considerablemente la gama de las políticas que se puedan seguir en un programa financiero viable. La formulación de este programa exige que la evolución de la cuenta corriente se armonice con la disponibilidad probable de financiamiento externo.

Estas limitaciones al financiamiento externo no deben interpretarse sencillamente como restricciones a la disponibilidad global de financiamiento externo en un período dado. El país deudor confronta diferentes condiciones y grados de disponibilidad de diversas clases de préstamos. Por ello, los lineamientos para la gestión de la deuda deben garantizar que la magnitud y las condiciones de los nuevos préstamos reporten la mayor transferencia neta sostenible de recursos, y definir en consecuencia el límite superior de la cuenta corriente. Los resultados de la cuenta corriente requieren que se coordinen las políticas de demanda y de tipo de cambio a fin de lograr la estabilidad financiera a mediano plazo. Los lineamientos cuantitativos para la gestión de la deuda ayudan a un país a armonizar sus necesidades de financiamiento con el financiamiento externo de que puede disponer a mediano plazo.

El Convenio Constitutivo del Fondo ante los tribunales—XII—joseph gold (páginas 193–231)

Varias decisiones judiciales importantes han sido recientemente dictadas en Francia, en Inglaterra y en el Estado de Nueva York en cuanto a los efectos del Convenio Constitutivo del Fondo sobre el reconocimiento en esos países de las disposiciones de control de cambios decretadas por otros países miembros. En Francia se resolvió que procede la reclamación de daños causados por la conducta negligente de una de las partes en relación con la ejecución de un contrato aun cuando éste no sea exigible conforme al Artículo VIII, Sección 2 b). En Nueva York se decidió que la norma en materia de legislación fiscal extranjera no obsta a que se reclame la reparación de perjuicios en razón de que ello entraña una violación de las disposiciones de control de cambio de otro país miembro del Fondo.

Los tribunales ingleses han interpretado la locución «contratos de cambio» del Artículo VIII, Sección 2 b), en el sentido de que se refiere a contratos de venta de divisas, y han rechazado la interpretación dada por otros tribunales según la cual el citado precepto es aplicable a contratos que afecten a los recursos cambiados de un país. La interpretación y razonamientos de los tribunales ingleses suscitan muchas objeciones. En Nueva York se adopta una interpretación restrictiva del precepto en un caso relacionado con una carta de crédito.

Tras un análisis minucioso del precepto dentro del contexto del convenio del Fondo, se aduce que la interpretación correcta de la locución «contratos de cambio» es que ésta comprende los pagos y transferencias a otro país ya se hagan en moneda extranjera o nacional. Los controles cambiados a que se refiere el precepto son los del país miembro cuyos recursos cambiados resulten afectados por los pagos y transferencias.

La interpretación restrictiva del precepto va en detrimento del principio de cooperación entre los países miembros del Fondo. Por esta razón es recomendable que la interdependencia que los países miembros aceptan al ingresar en el Fondo sea fomentada y no frustrada, reconociéndose a ese efecto en formas adecuadas las medidas de control de cambios de otros países que sean compatibles con el Convenio. Los tribunales debieran pronunciarse en ese sentido, ateniéndose a la doctrina del orden público (ordre public), incluso en casos en que el Artículo VIII, Sección 2 b) no sea aplicable. Este enfoque sería especialmente pertinente que lo emplearan los tribunales que se pronuncian por una interpretación restrictiva del precepto. En uno de los casos aludidos el tribunal de Nueva York aplicó este enfoque.

A Collection of Research Papers by Members of the Staff of the International Monetary Fund

This volume presents the contribution made by the Fund’s staff in the development of the monetary approach to the balance of payments by bringing together their most important research papers, written over a period of nearly 20 years. The monetary approach was developed out of the necessity to design and implement external adjustment policies for member countries of the Fund that found themselves in balance of payments difficulties. Especially in the early period, when computers were not available and data were scarce, the staff had to adapt existing theories, develop new approaches, and experiment with novel analytical procedures. Of the 11 papers in the volume, 8 are reprinted in their original form and 3 are being published for the first time.

Contributors to the volume are as follows: Bijan B. Aghevli, Victor Argy, Lorette Boissonneault, J. Marcus Fleming, Manuel Guitian, H. Robert Heller, Mohsin S. Khan, J. J. Polak, S. J. Prais, and Rudolf R. Rhomberg.

Pp. x + 290

Price: $4.00

THE INTERNATIONAL MONETARY FUND, 1966–1971

The System Under Stress

Volume I: Narrative;

Volume II: Documents

These two new volumes of the history of the International Monetary Fund, written by Margaret Garritsen de Vries, a Fund staff member, cover the six critical years from 1966 through 1971. They are a sequel to three volumes published earlier, covering the years 1945 to 1965.

Vol. I: 699 pp.; Vol. II: 339 pp.

Price: $15.00 the set; Vol. I, $11.00; Vol. II, $6.00.

For information and to place orders, write to The Secretary, International Monetary Fund, Washington, D.C. 20431 U.S.A.