Department of State National Advisory Council Files13

Minutes of the First Meeting of the National Advisory Council on International Monetary and Financial Problems, Washington, August 21, 1945

Present: Secretary Fred M. Vinson (Chairman), Treasury Department
Secretary Henry A. Wallace, Commerce Department
Mr. Marriner S. Eccles, Chairman, Board of Governors, Federal Reserve System
Mr. Leo T. Crowley, Chairman of Export-Import Bank
Mr. Amos Taylor, Commerce Department
Mr. Frank Coe (Secretary), Treasury Department

1. Responsibility of the Council

The Chairman called attention to the language of the Act (Public 171–79th Congress, 1st Session)14 which established the Council (NAC–1).15 He spoke of the wide variety of foreign financial transactions [Page 1400] in which the government is now engaged (NAC–2 and 3)16 and the need for coordination of methods and agencies. The legislative history of the Council was discussed.

2. Over-all Foreign Financial Program

The Chairman said that the government needed an over-all program, showing everything that was to be lent and spent abroad and what would be received. He thought that only thereby could the Council perform the functions which Congress expected of it. He had discussed the matter with the President, and had written him a letter in accordance with the understanding arrived at. The President wishes the Council to prepare such a program, and so indicated in a note to Secretary Vinson (NAC–4).17

The Council decided to request the heads of departments and agencies to submit programs of their expected foreign financial activities and of the present status of all loans, financial commitments, and programs of expenditure abroad. From this a general program would be prepared.

Secretary Wallace stressed the need for information on private loans abroad. It was decided that Mr. Eccles would check as to what the Federal Reserve System could provide on this subject.

3. Technical Committee on Bretton Woods

The Chairman proposed, and the Council agreed to, the appointment of a special committee to consider and report to the Council on the preliminary problems and policies of the International Fund and Bank and to conduct any necessary negotiations with foreign governments on the establishment of these institutions. The Chairman thought this committee would be practically the same as the group which had worked for several years on Bretton Woods. The Securities Exchange Commission should be included in the committee.

The names of members and alternates were to be sent to the secretary.

4. Export-Import Bank

The Council discussed the following matters concerning Export-Import Bank policy and operations:

(1) Loans under Consideration. Mr. Crowley informed the Council [Page 1401] that Export-Import Bank loans to the following countries were under consideration in the approximate amounts indicated:

France— $300 million
Belgium— 50 million
Netherlands— 50 million

(The above, related to the lend-lease 3(c) agreements, were proposed for 30 years at 2⅜%).18

U.S.S.K.— $ 1 billion
Norway— 40 million
United Kingdom— for food in the lend-lease pipeline.

At the request of Mr. Eccles, Mr. Crowley promised a concise report on the loans now under consideration. Mr. Crowley stated that he would continue negotiations on these loans and report back to the Council, but that, until proper lines and policies were worked out, the Export-Import Bank would make none of these loans until the Council had an opportunity to pass on them.

(2) Dollar Balances. The Council agreed with Mr. Eccles that loans should be considered in relation to the holdings by foreign countries of gold, dollars or American securities. It instructed that such information should be prepared for its use.

(3) Rate of Interest. Mr. Crowley asked the Council to consider the proper rates of interest for Export-Import loans. He suggested a 3% rate as the general rule for long and medium term loans. There was discussion as to the wisdom of a 3% rate for the United Kingdom and the Soviet Union while having a 2⅜% rate for the Western European countries. Although there was general agreement on the desirability of low interest rates for reconstruction purposes, a decision on interest rate policy was deferred until a full analysis could be prepared.

(4) Private Sources. The Chairman stressed the need to find out whether any of these loans could be placed privately. Mr. Crowley said that such a check would be made. He believed that many of them should be made privately, but he did not believe the banks would touch them.

[Page 1402]

(5) Loans Appropriate for the Export-Import and the International Bank. It was decided that the Staff Committee should have a report for the Council prepared on this matter.

5. Other Loans

The Council agreed with a proposal of Mr. Eccles that the State and Treasury Departments should prepare concise reports on pending foreign loans and stabilization agreements and the status of any negotiations now under way.

[Here follows discussion regarding the internal organization of the National Advisory Council.]

Frank Coe
  1. This file comprises a substantially complete record of the minutes and documents of the National Advisory Council on International Monetary and Financial Problems (the NAC) and its committees. This collection is located in Department of State Lot Files 60D–137.
  2. That is, the Bretton Woods Agreements Act, approved July 31, 1945 (59 Stat. 512).
  3. The memoranda in the NAC series was the documentation on which the Council’s agenda was based, and were prepared by the Staff Committee of the Council. This series is not to be confused with a separate documentation described as “Staff Documents”, nor with the minutes of meetings of the Council itself. It may be noted also that the National Advisory Council submitted regular and special reports to the Congress which are printed as Congressional documents.

    Council Document NAC–1 was an historical summary of the origins of the National Advisory Council, and analyzed the statutory duties of the Council as provided for in the originating statute. Section 4 of the Act stated in pertinent part that the Council was to “coordinate, by consultation or otherwise, so far as is practicable, the policies and operations of the representatives of the United States on the [International Monetary] Fund and the [International] Bank [for Reconstruction and Development], the Export-Import Bank of Washington and all other agencies of the Government to the extent that they make or participate in the making of foreign loans or engage in foreign financial, exchange or monetary transactions.”

  4. Documents NAC–2 and 3 not printed.
  5. The text of the Vinson letter is found in Document NAC–4, not printed; the letter was dated August 9, 1945. A marginal notation indicating approval was written by the President on the same letter on August 10.
  6. These credits were projected originally under the 3(c) agreements, and accordingly would have been financed out of Lend-Lease funds; see footnote 10, p. 1395. With the ending of the war, however, Lend-Lease financing was terminated as of September 2, 1945. Financing of Lend-Lease materials requisitioned but not under procurement by that date was now shifted to the Export-Import Bank. It was felt that as the credits “served to carry out previous commitments of the United States Government, their terms with respect to maturities and rate of interest [should be] made the same as those of the lend-lease 3(c) agreements.” (Export-Import Bank of Washington, First Semiannual Report to Congress for the Period July–December 1945, p. 17)