1961, 75 countries were members of the Fund with aggregate quotas of $15,043.4 million. (See appendix table E-1.) 28

In August, the Executive Board of the Fund extended the appointment of Mr. Per Jacobsson as Managing Director of the Fund through February 5, 1964, the maximum period of time permitted under the Bylaws of the Fund governing the age limit for this position.

PAR VALUES

Changes in the par values of the currencies of Ecuador, Iceland, and Costa Rica, and establishment of an initial par value for the New Zealand pound were agreed with the Fund during the period under review.

Ecuador

In July the Fund concurred in a change in the par value of the Ecuadoran sucre from 15 to 18 sucres per U.S. dollar. At the same time, most multiple exchange rate practices previously in effect were discontinued. Under the new system, at least 90 percent of all trade and trade-connected transactions will be conducted within 1 percent of either side of parity. A small free market with a fluctuating rate will continue to operate, chiefly as a means of controlling capital movements.

Iceland

In August, a new par value for the Icelandic krona of 43 kronur per U.S. dollar was agreed with the Fund, replacing the former par value of 38 kronur per U.S. dollar introduced in February 1960. Costa Rica

In September, the Fund concurred in a change in the par value of the Costa Rican colon from 5.60 to 6.625 colones per U.S. dollar. At the same time the exchange system was simplified. The previous official market rate of 5.60 colones per U.S. dollar, which applied to most exports and 50 percent of all imports, was eliminated and all foreign payments, for imports as well as invisibles and capital, are to be made at 6.65 colones per U.S. dollar. Temporary export taxes are to be levied on the proceeds of coffee, banana, and sugar exports. (In support of its exchange reform measures, Costa Rica drew $7.5 million from the Fund, entered into a $15 million standby arrangement with the Fund, and negotiated a $6 million exchange agreement with the U.S. Treasury.)

New Zealand

By agreement between the Government of New Zealand and the Fund, an initial par value of 0.359596 New Zealand pound per U.S. dollar ($2.78 per New Zealand pound) was established in October. Since August 1948, the New Zealand pound had been maintained at a fixed relationship to the pound sterling.

"Appended to doc. 64, ante.

Currency sales

FUND TRANSACTIONS

As indicated in table 1,29 the Fund in the 6-month period under review sold the equivalent of $2.1 billion in various currencies to 17 member countries-an amount larger than in any previous semiannual period in the Fund's history. Three-fourths of the total was accounted for by a drawing in the equivalent of $1.5 billion in nine currencies by the United Kingdom, in support of its efforts to restore a strong balance-of-payments position at the existing exchange rate without imposing restrictions on trade and current payments. (A standby arrangement with the Fund for an additional $500 million was entered into at the same time.) To replenish its supply of these currencies, the Fund used $500 million of its gold holdings, $150 million of which was sold to the U.S. Treasury to acquire dollars. In this period also, the Government of India purchased the equivalent of $250 million in six currencies, including $110 million in U.S. dollars. Other purchases (drawings) ranged in amount from $1.5 million in U.S. dollars by Haiti, to the equivalent of $60 million in nondollar currencies by Argentina, and the equivalent of $61.3 million in various currencies by Indonesia.

A dramatic change has occurred in recent years in the currency composition of drawings from the Fund. Between March 1947 and December 1957, drawings of nondollar currencies constituted less than 10 percent of total drawings. Between 1958 and 1961, such drawings had increased to approximately 60 percent. In the 6-month period under review, approximately two-thirds of total drawings were made in nondollar currencies. Through December 31, 1961, total drawings amounted to the equivalent of $6.2 billion, of which approximately $4 billion was in U.S. dollars. (See table 2.) 29

Currency repayments

Repayments in the current period by 16 countries totaled the equivalent of $589 million. (See table 3.) 29 The largest transactions involved a repurchase in the equivalent of $420 million in U.S. dollars and other convertible currencies by the United Kingdom. The remaining transactions ranged in amount from a final repayment of approximately $300,000 by Czechoslovakia, a former member, to $63.3 million by India, and included a total of $61 million in repayments by eight countries in Latin America. As indicated in table 4, repayments in the 6-month period under review were substantially larger than in any previous semiannual period. Although U.S. dollars continued to be used in greatest amount as the currency of repayment, in calendar 1961 other convertible currencies used for this purpose amounted to the equivalent of $185 million. Total repayments through December 31, 1961, were equivalent to $3.6 billion, almost 75 percent in U.S. dollars. Outstanding drawings at the end of December 1961 ($2.5 billion) were larger than at the end of any previous period in the Fund's operations.

"Not reprinted here.

Standby arrangements

In addition to purchases (i.e., drawings) from the Fund of the currencies of other members for equivalent amounts of their own currencies, member countries since 1952 have been able to obtain additional assistance through the medium of standby arrangements under which drawings up to specified amounts and within an agreed period may be made without reconsideration of the member's position at the time of drawing.

The Fund, in the 6-month period under review, approved requests for standby arrangements from 12 member countries-the United Kingdom ($500 million), Argentina ($100 million), Mexico ($90 million), South Africa ($75 million), Indonesia ($41.25 million), Iran ($35 million), Costa Rica ($15 million), Guatemala ($15 million), El Salvador ($11.25 million), Bolivia ($75.5 million), Haiti ($6 million), and Paraguay ($5 million)-in the aggregate amount of $901 million.30 (See table 5.) 31 This is the largest amount agreed by the Fund in any semiannual period except July-December 1956 when such arrangements totaled in excess of $1 billion. As in earlier periods, most arrangements were entered into in support of acute or anticipated payments problems and to promote exchange stability generally. Argentina, Guatemala, Paraguay, South Africa, and the United Kingdom did not find it necessary to draw on their standby resources during the current period. Of the total of $3.8 billion in such arrangements agreed with the Fund through December 31, 1961, $1.4 billion was available on that date.

The U.S. Executive Director of the Fund, or his Alternate, acting on the advice of the Council, supported the decisions taken with respect to the foregoing matters.

39 In November 1961, the Fund also entered into a standby arrangement with the Government of Colombia which authorized drawings of up to $10 million for a 1-year period from Jan. 1, 1962. [Footnote in source text.] 31 Not reprinted here.

THE INTERNATIONAL TELECOMMUNICATION UNION

72. IMPLICATIONS OF UNITED STATES RATIFICATION OF THE 1959 INTERNATIONAL TELECOMMUNICATION CONVENTION AND RADIO REGULATIONS: Statement Made by the Assistant Secretary of State for Economic Affairs (Martin) Before the Senate Committee on Foreign Relations, May 2, 1961 32

The International Telecommunication Union (ITU) is an international organization composed of 98 member countries and 5 associate members.33 It has two basic purposes. The first is the voluntary coordination of international telecommunications by the members in such a manner as to assure their most efficient, economical, and rapid transmission. For example, one of the oldest and most important regulations adopted by the Union is that concerned with the transmission of messages pertaining to safety of life at sea.34

The second purpose is the maintenance and extension of international cooperation for the improvement of telecommunications and the advancement of telecommunication knowledge. This includes the exchange of information concerning technical advances and projects for the development of new technical facilities which will increase the usefulness of the services and make them more generally available to the public. The affairs of the Union are governed by an international telecommunication convention, which is revised when necessary by a plenipotentiary conference.

The conventions of the Union serve a dual purpose: They comprise the charter of the Union, establishing its membership and structure, and also contain the treaty provisions laying down the basic principles under which telecommunications are coordinated internationally. These basic principles are supplemented by radio, telegraph, and telephone regulations which spell out the methods by which the principles are put into effect. These regulations are the product of ordinary and extraordinary administrative conferences.

The latest convention is the one presently before the Senate for consideration.35 It is a revision of the convention drawn up at Buenos Aires in 1952 36 and was signed at the plenipotentiary conference in Geneva in December 1959 37 by the United States and 84 other countries.

The Buenos Aires convention contained the traditional provision that a plenipotentiary conference shall normally meet once every 5

32

Department of State press release No. 281 (text as printed in the Department of State Bulletin, May 29, 1961, pp. 830–832).

33 By the end of 1961, membership in the ITU had increased to 112; see Yearbook of the United Nations, 1961, pp. 655-656.

34

Reference to the radiotelegraph convention signed at Berlin, Nov. 3, 1906; text in Foreign Relations of the United States, 1906, vol. 2, pp. 1519-1528.

35 See the unnumbered title, infra.

36 TIAS 3266; 6 UST 1213.

St Held Oct. 14-Dec. 21, 1959.

years at a date and place fixed by the preceding plenipotentiary conference. It also provided that an ordinary radio conference normally shall meet once every 5 years, preferably at the same time and place as the plenipotentiary conference. In the past these conditions have not always been met, and the Geneva plenipotentiary conference was not convened until October 4, 1959. The radio conference was convened at Geneva on August 17, 1959, and both conferences completed their work on December 21, 1959.

Briefly, the outstanding decisions and accomplishments of the plenipotentiary conference were as follows:

The conference rejected proposals by the Soviet bloc to modify the membership provisions and confirmed the existing provisions. The revised list of members of the Union (subject to ratification of or adherence to the convention) includes (1) those listed as members in the Buenos Aires convention including the four countries, Ecuador, Honduras, Liberia, and Yemen, which, up to the time of the conference, had not ratified or acceded to that convention; (2) those admitted since 1952 by the procedure of two-thirds consent or by their membership in the United Nations and their accession to the ITU convention; and (3) the five associate members.

The Administrative Council was increased in size from 18 members of the Union to 25, and Africa was added as a separate region. Both the Atlantic City convention-1947 38-and Buenos Aires-1952-had fixed the Council at 18 countries divided into 4 regions as follows:

American region-5 members;

Europe and Africa-5 members;

Eastern Europe and northern Asia-3 members;

Asia and Australasia-5 members.

Total-18 members.

The regional distribution of the additional seats was figured on a mathematical basis, with the number of countries in each region governing the number of seats. The United States delegation recognized the validity of the argument that the African region should be represented as an entity on the Council.

Each region except Eastern Europe gained 1 member, while Africa was given 4 seats. Under the revised convention the Administrative Council is constituted as follows:

According to the provisions of the Atlantic City and Buenos Aires conventions the Secretary General and two Assistant Secretaries General were elected by the Administrative Council. Proposals were submitted at Geneva to change this procedure and to provide that the Secretary General and the Assistant Secretaries General should be elected by the plenipotentiary conference. The conference adopted this 38 TIAS 1901; 63 Stat. 1399.