133. United States Position Paper on the International Finance Corporation1
What position should the Delegation take in any discussion of the report of the International Bank concerning recent developments leading to the establishment of the International Finance Corporation (IFC)?
United States Position
The Delegation should note the report of the International Bank,2 and express the view (a) that the Bank has fulfilled its responsibility pursuant to paragraph 3 of the Assembly resolution3 of last December, and (b) that current developments demonstrate that the IFC can be established “as soon as practicable” which is in accord with paragraph 2 of the same resolution.
The Delegation may, if appropriate, report the current status of the steps being taken to permit the United States to join the IFC and to pay its capital subscription.
The Delegation should, insofar as possible, refrain from entering into any discussion of the substance of the Articles of Agreement of the IFC, and should take the general position that such a discussion is inappropriate and not required by the Assembly’s resolution.
The Delegation should support a resolution consistent with the foregoing, which reports to the General Assembly on the progress being made toward the establishment of the IFC.
Under the terms of the resolution adopted by the General Assembly last December, the International Bank was asked to report the results of its work on the IFC to the forthcoming session of the Economic and Social Council. The Bank has transmitted its report to the Secretary-General indicating that it has prepared Articles of Agreement for the IFC which were on April 11th approved by its [Page 342] Board of Directors for submission to its member governments for their consideration and acceptance. Some 43 governments have indicated their intention of joining the IFC, subject in most cases to appropriate legislative approval.
Insofar as the United States is concerned, the President transmitted the Articles of Agreement to the Congress on May 2, 1955,4 with the request for legislation authorizing United States membership and the payment of our subscription to the capital. Hearings were held before the Senate Banking and Currency Committee on June 6 and 7,5 and are expected to be held by the House Banking and Currency Committee late in June or early in July. The Senate unanimously approved U.S. participation in the proposed IFC on June 21. The Executive Branch expects that the House will also take action during the present session of Congress. The Delegation will, of course, be kept informed of any further legislative developments which occur during the ECOSOC meeting.
In paragraph 2 of the resolution the General Assembly looked forward to the establishment of the IFC “as soon as practicable”. It is apparent from the foregoing that the International Bank’s activities fulfill this requirement, and that the United States Government is likewise moving as fast as possible toward this objective.
Paragraph 4 of the Assembly’s resolution requested the ECOSOC “to report on this matter to the General Assembly at its tenth session”. The United States interprets the resolution as not requiring the ECOSOC to comment upon the substance of the Articles of Agreement in its report to the General Assembly. Although the Delegation should not endeavor to foreclose all discussion of this nature in the Council, it should maintain the position that the effect of the previous resolution was to request the International Bank to proceed with steps leading to the establishment of the IFC and to report the subsequent progress toward this objective. The present action of the Council should be limited to reporting the steps taken, and the progress made, to the General Assembly in response to paragraph 4 of the resolution.
It is assumed that the Bank’s representative will be prepared to handle questions raised by members of the Council concerning the Articles of Agreement, and the nature of the proposed Corporation, and the United States Delegation should refrain insofar as possible from responding to such questions. One question may arise, however, [Page 343] on which the Delegation might feel called upon to make a statement. Under the Articles of Agreement, only present and future members of the International Bank and Monetary Fund are eligible for membership in the new Corporation. Certain delegations (Argentina, USSR and Czechoslovakia are not presently members of the Bank or Fund) may question this requirement, and there is attached a brief statement of the United States position on this matter for the possible use of the Delegation. This material should be used only if the failure of the Delegation to speak on this point would be conspicuous and embarrassing.
The Delegation has been supplied with background material concerning the IFC, including copies of the Articles of Agreement and accompanying Explanatory Memorandum, the President’s Message to Congress, and the statements of the Government’s witnesses before the Senate Banking and Currency Committee (Secretary of the Treasury Humphrey, Assistant Secretary of State Waugh, and Export-Import Bank President Edgerton).6
- Source: Department of State, NAC Files: Lot 60 D 137, NAC Staff Documents. Official Use Only. Approved by the Staff Committee of the National Advisory Council on International Monetary and Financial Problems, June 22, for the use of the U.S. delegation to the 20th session of the Economic and Social Council. An attachment is not printed.↩
- International Finance Corporation, Articles of Agreement and Explanatory Memorandum, approved April 11 for submission to member U.N. governments by the Executive Directors of the International Bank for Reconstruction and Development.↩
- Resolution 823 (IX).↩
- For text of the President’s message, see Department of State Bulletin, May 23, 1955, p. 844.↩
- See U.S. Congress, Senate, Committee on Banking and Currency, International Finance Corporation, Hearings before a Subcommittee on Banking and Currency on S. 1894, June 6 and June 7, 1955, 84th Congress, First Session (Washington, 1955) (hereafter cited as Hearings on S. 1894).↩
- The general testimony of these individuals as well as their formal statements are ibid., pp. 27–65.↩