APPENDIXES A. Tables on estimated gold and dollar resources of foreign countries, U.S. gold transactions, and the U.S. balance of payments: B. A-1. Estimated gold and short-term dollar resources of foreign A-2. Estimated holdings of U.S. Government bonds and notes A-3. U.S. net monetary gold transactions with foreign countries A-4. U.S. balance of payments by major components, season- B-1. Membership and quotas in the IMF, and membership and Page 47 50 52 54 55 REPORT OF ACTIVITIES OF THE NATIONAL ADVISORY COUNCIL ON INTERNATIONAL MONETARY AND FINANCIAL PROBLEMS JULY 1-DECEMBER 31, 1963 I. ORGANIZATION OF THE Council STATUTORY BASIS The National Advisory Council on International Monetary and Financial Problems was established by the Congress in the Bretton Woods Agreements Act (59 Stat. 512, 22 U.S.C. secs. 286, 286b), approved July 31, 1945.1 MEMBERSHIP The members of the Council, according to law, at the end of the period under review, were the following: The Secretary of the Treasury, Douglas Dillon, Chairman. The Secretary of State, Dean Rusk. The Secretary of Commerce, Luther H. Hodges. The Chairman of the Board of Governors of the Federal Reserve The President and Chairman of the Board of Directors of the By agreement, the following served as Alternates: John C. Bullitt, Assistant Secretary of the Treasury. George W. Ball, Under Secretary of State. Jack N. Behrman, Assistant Secretary of Commerce for International Affairs. C. Canby Balderston, Vice Chairman of the Board of Governors Walter C. Sauer, First Vice President and Vice Chairman of the George H. Willis is the Secretary of the Council. The U.S. representatives on the international financial institutions regularly participated in the work of the Council: U.S. Executive Director of the International Monetary Fund, U.S. Executive Director of the International Bank for Recon- U.S. Executive Director of the Inter-American Development The relevant portions of the statute, as amended, setting forth the functions and composition of the Council, are included in the Report for July 1-Dec. 31, 1962 (H. Doc. No. 144, 88th Cong., 1st Sess.). 34-738-64——2 1 Representatives of the Department of Agriculture and the Bureau of the Budget participated in the work of the Council on a regular basis, and representatives of other interested agencies took part on issues of interest to them. This participation by representatives of interested nonmember agencies continues a practice which has been followed during the entire period of the Council's existence. II. INTERNATIONAL MONETARY FUND (IMF) EIGHTEENTH ANNUAL MEETING The Annual Meetings of the Boards of Governors of the International Monetary Fund, the International Bank for Reconstruction and Development, and of the Boards of Governors of the International Finance Corporation and the International Development Association, affiliates of the Bank, were held in Washington, D.C., September 30 through October 4, 1963. The U.S. delegation was headed by Secretary of the Treasury, Douglas Dillon (U.S. Governor of the four institutions) and Under Secretary of State, George W. Ball (U.S. Alternate Governor). Under Secretary of the Treasury, Henry H. Fowler; Under Secretary of the Treasury for Monetary Affairs, Robert V. Roosa; Assistant Secretary of the Treasury and U.S. Executive Director of the International Bank, John C. Bullitt; and U.S. Executive Director of the Fund, William B. Dale served as Temporary U.S. Alternate Governors. Among others, the delegation also included Senators J. W. Fulbright and Frank Carlson, Representatives Henry S. Reuss and Clarence Kilburn, and members of the National Advisory Council. At the opening joint session, President Kennedy welcomed Mr. Pierre-Paul Schweitzer, the new Managing Director of the Fund, and Mr. George Woods, who succeeded Mr. Eugene Black as President of the International Bank. The President enumerated the several steps already taken to reduce the drain on the U.S. balance of payments and assured the Governors that the United States was determined "to maintain the firm relationship of gold and the dollar at the present price of $35 an ounce." In addition to the measures which the United States was taking to meet its current balance-ofpayments problem, the President also outlined the program being pursued by the United States to improve its long-term position in order to meet the international monetary problems of the future. In this context, he referred to the proposal that studies be initiatedby the Fund and by representatives of the 10 major trading countries to deal with the adequacy of world reserves and liquidity, the functioning of the international monetary system, and the effective role of the Fund in this field. These studies would attempt to anticipate and to explore the problems which may arise as the United States gradually closes its payments gap and no longer continues to supply dollars on balance to the rest of the world. In presenting the Annual Report of the Executive Directors to the Board of Governors, the Managing Director of the Fund, Pierre-Paul Schweitzer, outlined developments within the Fund during the past year and presented some general observations on the structure of international payments, including the United States deficit. With respect to the latter problem, the Managing Director indicated that although there was cause for concern in the continued deficit, the United States had ample reserves and other sources of international liquidity to finance an orderly adjustment, which should not conflict with the objectives of a high level of employment and a satisfactory rate of growth. He added that the attainment of a satisfactory equilibrium was dependent upon "a surplus on goods and services sufficient to provide a flow of capital exports and aid, especially to the less-developed countries, on a scale consistent with the capacity of the large American capital market." Secretary Dillon, at the Fund's annual discussion, joined in paying tribute to the late Managing Director, Mr. Per Jacobsson, and welcomed the unusually large number of new members to the Fund family. In the course of his remarks, the Secretary stated that although there presently appeared to be no indication of any shortage of international liquidity, the future requirements for assured means of financing balance-of-payments deficits might well increase, and the United States therefore favored the proposed study on the adequacy of existing arrangements for providing international liquidity over the years ahead. At the same time, the Secretary pointed out that the United States would continue to devote its energies to the problems of achieving a more rapid domestic growth and of reducing its payments deficit. The Board of Governors approved amendments to the rules and regulations, and reviewed the financial statements and audit report for the fiscal year ended April 30, 1963, and the administrative budget for the fiscal year ending April 30, 1964. The Governors also approved the allocation of $21.5 million-the net income for the fiscal year ended April 30, 1963-to the General Reserve. The application of Kenya for membership in the Fund, upon the attainment of constitutional independence, was approved by the Board of Governors, subject to the usual terms and conditions, and draft resolutions were adopted providing for increases in the quotas of El Salvador, Honduras, and the Syrian Arab Republic. At the closing session, the Governor for El Salvador was elected Chairman of the Boards of Governors for the coming year, and it was agreed to hold the 1964 Annual Meetings in Tokyo, Japan, in September 1964. The Group of Ten.-Concurrently with the Annual Meeting of the International Monetary Fund, arrangements were made by the "Group of Ten" (the members of the Fund which are parties to the December 1961 "General Arrangements to Borrow" 2) to undertake a study of the international monetary system and of the general problem of liquidity. 3 For the actual conduct of the study, a Committee of Deputies to the Ministers and Governors was established, with Under Secretary of the Treasury for Monetary Affairs Roosa as Chairman, and Mr. E. van Lennep, Alternate Governor of the Netherlands, as Vice Chairman. A statement issued on October 2, 1963, by Secretary Dillon on behalf of the "Group of Ten" said in part: "In examining the functioning of the international monetary system, the Ministers and Governors noted that the present national reserves of member countries, supplemented as they are by the resources of the 2 Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, and the United States. The term includes international reserves and other resources at the disposal of the monetary authorities of a country which serve to finance balance-of-payments deficits, and thereby provide time to make the necessary adjustments required to eliminate these deficits without resort to measures harmful to the prosperity of the countries concerned or to the rest of the world. |