The question of the structure of the European Payments Union and possible conflicts between IMF and EPU principles and policies was raised again in a National Advisory Council meeting (No. 158) on June 29. The Secretary of the Council, C. Dillon Glendinning, raised the question in the context of the then-advanced stage of negotiations for the establishment of a European Payments Union, revealing “the type of arrangements the Europeans were prepared to accept.…” The basis for the discussion was NAC Doc. 1009, June 29, 1950 (Lot 60D137, Box 367).
During the discussion, Mr. Frank A. Southard, Jr., the United States Executive Director on the International Monetary Fund, said that he wanted to emphasize once again those parts of the problem that concerned him “as the representative of the Fund”. The Minutes summarize his position as follows:
“Mr. Southard added that the task of reconciling the EPU with broader United States policy with respect to non-discrimination and [Page 824] convertibility was the main problem in dealing with the EPU or any other regional group. In this instance, the very size of the area gave the plan particular importance. There was no practicable way of keeping the great colonial areas of England, France, and Belgium outside of the EPU. We were dealing with something that which in its impact, although not in its detail, was concerned with most of the Eastern Hemisphere and a large part of the trade of the world. This was what alarmed the Canadians and Latin Americans. The question was whether there was a change in American policy.
Mr. Southard pointed out that if the problem of South African discrimination were discussed in the Fund or raised at Torquay,1 we must be able to assure the critics that the United States has only one main theme and is not going to say to Europe that it is all right to discriminate and tell other parts of the world that discrimination is not permissible.”
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(Minutes of NAC Meeting No. 158, June 29, 1950, Lot 60D137, Box 362)