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N. A.-Not available.
1 Imports are in £ sterling.
* January-October.
3 January-November.
+ 1938.
January-September.
• June-December.
7 1937.
Source: Monthly Bulletin of Statistics, League of Nations and United Nations,

The CHAIRMAN. Now, while we are on the subject of the Fund, give us some illustrations of the actions which the Fund has taken since its establishment to correct the evils that it was set up to correct.

Mr. Bronz. Well, the Fund has called upon the members to communicate to it the parities of their currencies in accordance with the Fund agreement.

Most of the members have done so, the parities have been announced, and the time for initial review of these parities has passed.

The Fund has been ready, I believe, since early this month, to do business.

The CHAIRMAN. Has the Fund taken any affirmative action to relieve disequilibriums in the exchange of any of its members?

Mr. BRONZ. The Fund's resouces have been available since early this month.

The CHAIRMAN. I say, has the Fund taken any action?

Mr. BRONZ. As far as I know, I do not believe that any transactions have been consummated.

The CHAIRMAN. What, then, is the net accomplishment of the Fund to date?

Mr. BRONZ. Well, the Fund has established itself, is ready for business, and is available to meet difficulties that its members may encounter.

The CHAIRMAN. And when was it authorized by law?

Mr. Bronz. The Fund was established by the signatures of sufficient countries in the last few days of 1945. (The articles of the Fund appear as exhibit VIII-C.)

last year.

The CHAIRMAN. And our approval was given when?

Mr. BRONZ. Our approval was given in the summer of 1945. We were the first country to approve.

The CHAIRMAN. It has been in existence almost 2 years?
Mr. BRONZ. It has been in existence a little over 1 year.
The CHAIRMAN. It has been authorized about 2 years!
Mr. Bronz. That is right, as far as participation by the United
States is concerned.

The CHAIRMAN, And that was in 1945?
Mr. BRONZ. Yes, sir.

The CHAIRMAN. Do you remember the exact date of the authority by Congress! Mr. BRONZ. No, I do not.

The CHAIRMAN. Will you give us the reasons why the Fund has been operating in such slow motion ?

Mr. BRONZ. Well, I am not familiar with all the details of the Fund's activities, but it has not seemed to me that they have been operating very slowly. The final signatures were appended to the agreement just a year and three months ago.

The first meeting of the Board of Governors was called in accordance with the agreement about a year ago.

The CHAIRMAN. The Bank which was authorized at the same time has not completed its organization, has it?

Mr. Bronz. Yes, the Bank completed its organization about June of
The CHAIRMAN. Does it have a president at the present time?
Mr. BRONZ. Yes, sir.
The CHAIRMAN. How long!
Mr. Bronz. The new president, Mr. McCloy, was elected a few
The CHAIRMAN. Is he the first?
Mr. BRONZ. He is the second.
The CHAIRMAN. Has there been any financing under the Bank!
Mr. BRONZ. I do not believe so.
The CHAIRMAN. Any public flotation of issues!
Mr. BRONZ. No, sir.
The CHAIRMAN. Can you give us any reason for that?

Mr. BRONZ. I could not say. I understand there is a considerable amount of preparation necessary. There has been an effort to secure state legislation that would permit trustees, savings banks, insurance companies, and similar institutions to invest in securities of the Bank. It takes time to get things through State legislatures when they meet at varying times.

The CHAIRMAN. You gave us our exports and imports for 1946 ? Mr. BRONZ. Yes, sir.

The CHAIRMAN. Would you also supply for the record, the same figures starting in 1939 to and including 1945? Mr. BRONZ. For the United States? The CHAIRMAN. Yes. Mr. Bronz. Yes, sir. The CHAIRMAN. 'That will be done then.

weeks ago.

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1 Includes lend-lease exports, 1941-46, and UNRRA exports, 1945-46. Source: Monthly Summary of Foreign Commerce of the United States. Department of Commerce.

The CHAIRMAN. Dr. Wilcox, I believe we have come to subparagraph (C) of paragraph 3 of article 26; is that correct?

Mr. Wilcox. That is correct.
The CHAIRMAN. Do you wish to make any comment?

Mr. Wilcox. When we do discuss it, I should like to discuss (c) and (d) together.

The CHAIRMAN. Supposing I read (c) and (d).
Mr. Wilcox. All right, sir.
The CHAIRMAN. Subparagraph (c) reads as follows:

Any Member may consult with the Organization with a view to obtaining the prior approval of the Organization for restrictions which the Member proposes under paragraphs 1 and 2 of this Article to maintain, intensify, or institute, for the maintenance, intensification, or institution of restrictions under specified future conditions. The Organization shall invite the International Monetary Fund to participate in the consultations. As a result of such consultations, the Organization may approve in advance the maintenance, intensification or institution of restrictions by the Member in question insofar as the general extent, degree, and duration of the restrictions are concerned. To the extent to which such approval has been given, the action of the Member applying restrictions shall not be open to challenge under subparagraph (d) on the ground that such action is inconsistent with the provisions of paragraphs 1 and 2 of this Article.

(d) Any Member which considers that any other Member is applying import restrictions under paragraphs 1 and 2 of this Article in a manner inconsistent with the provisions of those paragraphs or of Articles 27 and 28, or in a manner which unnecessarily damages its commercial interests, may bring the matter for discussion to the Organization. The Member applying the restrictions shall then participate in discussions of the reasons for its action. The Organization, if it is satisfied that there is a prima facie case that the complaining Member's interests are adversely affected may, after consultation with the International Monetary Fund on any matter falling within the competence of the Fund, and, if it considers it desirable, after submitting observations to the parties with the aim of achieving a satisfactory settlement of the matter in question, recommended the withdrawal or modification of restrictions which it determines are being applied in a manner inconsistent with the provisions or paragraphs 1 and 2 of this Article or of Article 27 or 28 or.in a manner which unnecessarily damages the interests of another Member. If the restrictions are not withdrawn or modified in accordance with the recommendation of the Organization within sixty day such other Member or Members shall be released from such obligations incurred under this Charter towards the Member applying the restrictions as the Organization may approve.

Shall we read (e) also ?
Mr. Wilcox. I think we might take up the discussion at this point.
The CHAIRMAN. All right.
Mr. Wilcox. May I refer to (d) first, and then go back to (c)?
The CHAIRMAN. Yes.

Mr. Wilcox. Subparagraph (d) is the case in which a member of the Organization is of the opinion that another member of the Organization is violating either the provision of the preceding articles, limiting the use of quantitative restrictions, or the provisions of the next two articles dealing with nondiscrimination in the administration of quantitative restriction.

The CHAIRMAN. Are we still dealing with restrictions for the purpose of preserving equilibrium in the exchange, or have we gone broader?

Mr. Wilcox. We are still on that. The CHAIRMAX. All of that relates to that type of restriction ? Mr. Wilcox. That is right. A member which takes the position that another member has violated these provisions, takes the matter to the Organization, and if the Organization finds that there is a prima facie case for proceeding, it calls the Fund into consultation and it may then submit recommendations to the parties concerned as to a solution of the matter, but if such recommendation is unavailing, and if the restrictions are not withdrawn or modified in accordance with the recommendation, then the complaining member or members shall be released from specific obligations toward the offending member.

The CHAIRMAN. Doctor, I do not want to cavil about it, but could not the release be made available to members who did not complain?

In other words, could not the Organization, out of its own initiative after hearing the facts say that the complaining member should be entitled to do this, that, or the other thing, and other members should also be entitled to do this, that, or the other thing?

Mr. Wilcox. I think your interpretation is correct because the text says, "Such other member or members," and everything that has preceded has been in the singular.

The CHAIRMAN. The preceding part refers to a complaining member?

Mr. Wilcox. That is right.

The CHAIRMAX. And this seems to be an enlargement for the purpose of granting relief, but not for the purpose of making complaints?

Mr. Wilcox. That is right.

The CHAIRMAX. I think it would be correct to say under the reasonable construction of the subparagraph, that if one member may make a complaint that the Organization probably would not kick out a complaint if it were made jointly by several members.

Mr. Wilcox. A complaint might be made certainly by more than one member, but I think that the proper construction of this paragraph would be that they might release noncomplaining members as well as complaining members.

The CHAIRMAN. It seems so to me.

Mr. Wilcox. Now, I would like to refer to paragraph (c), in connection with paragraph (d).

The CHAIRMAN. Before we do that, may I ask you this:

What could be the nature of the penalty or penalties that might. be invoked against the violating member?

Mr. Wilcox. The primary penalty would be withdrawal of concessions granted to the offending member in the course of trading nego

tiations.

The CHAIRMAN. And such restrictions could be imposed by the complaining member and possibly others as the Organization might approve?

Mr. Wilcox. That is right.

The CHAIRMAN. That might go to the extent of a complete stoppage of trade?

Mr. Wilcox. Well, there is nothing in the text that would limit the extent.

The CHAIRMAN. It might authorize import quotas, or increase in import quotas, or increase in tariffs !

Mr. WILCOX. That is true.

One of the obligations of other members, toward the offending member, is not to use import quotas and they might be released from that obligation, and if they were released from that obligation, I think there is nothing in the text that would prevent a complete embargo. I think you are probably right.

The CHAIRMAN. The measure of what is possible is the measure of obligations under the Charter?

Mr. Wilcox. That is right.

The CHAIRMAN. The complaining member could be released of any or all of its obligations, under the Charter toward the offending country?

Mr. Wilcox. That is right.

Now, this is the case in which a member has not gone to the Organization before imposing the restriction.

Now, in order to avoid the prospect of the application to it of such a penalty as we have been discussing, paragraph (c) provides that a member, prior to imposing such restrictions, may go to the Organization for approval.

Now, they may ask for approval on one of two things:

One thing they may ask is that the imposition of specile restrictions be approved, and the other thing is that under specified conditions they might be permitted to impose restrictions if those conditions arise.

The CHAIRMAN. Now, I notice that the paragraph contemplates close collaboration between the Fund and the Organization in these matters?

Mr. Wilcox. That is right.

The CHAIRMAN. The language, after pointing that out, says (reading]:

As a result of such consultations, the Organization may approve in advance the maintenance, intensification, or institution of restriction by the members in question insofar as the general extent, degree, and duration of the restrictions are concerned.

Again I should like to ask, what particular type of restrictions are we talking about here?

Mr. Wilcox. The import quotas.
The CHAIRMAN. Import quotas?
Mr. WILCOX. Predominantly.
The CHAIRMAN. Predominantly.
Mr. Wilcox. But the section also offers export quotas.

The CHAIRMAN. But to the extent it involved directly an exchange restriction, that would go to the Fund for its decision?

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