This Session of the Conference was attended by 1184 Delegates and technical advisers from 106 of the 115 states Members. In most instances they were full tripartite delegations and 63 Ministers responsible for labor affairs in their respective countries attended the Conference. Each member of the ILO is entitled to send four Delegates to the Conference-two representing the Government, one the Employers and one the Workers. These Delegates may be accompanied by technical advisers for the various items on the agenda. A breakdown of the attendance shows there were 208 Government Delegates, with 392 advisers; 102 Employers' Delegates, with 178 advisers; and 104 Workers' Delegates, with 200 advisers. The United Nations, its specialized agencies, other official international organizations and non-governmental organizations also were represented by observers, as was the Territory of Mauritius. The over-all attendance amounted to 1347 persons.

The 50th Session was marked by the election of a President from Po

se Report of the United States Delegation to a Meeting of the International Labor Organization: The Fiftieth Session of the International Labor Conference, Geneva, Switzerland, June 1-22, 1965 (Washington, Department of Labor, 1966), pp. 1-3. The Chairman of the U.S. delegation was George L-P Weaver, Assistant Secretary of Labor. 8 See Appendix I for list of countries. [Not printed here.] Nine countries did not send delegations: Afghanistan, Albania, Bolivia, Haiti, Indonesia, Laos, Paraguay, Somalia, and Uganda. [Footnote in source text.]

88

89

land, the first time a candidate from the communist states has been elected to this office. Also, during the early days of the Session, there was a high degree of political activity in connection with the triennial election of the Governing Body. Neither of these factors detracted from the substantive work of the Conference which proceeded in a constructive manner. In the course of the debate on the Director-General's report," most of the speakers from the communist states made reference to United States policies in Viet-Nam, but the remarks were for the most part in low key. This was consistent with the Bloc's promise of a "peaceful" meeting if its claim to the Conference presidency was recognized. An effective reply to the attacks was made by the U.S. Government and Employer Delegates. The U.S. Worker Delegation did not participate in the work of the Conference, following the election of the Polish candidate, and the Delegation subsequently withdrew from the Conference. This action reflected the deep-seated opposition of the American trade union movement to the absence of freedom of association in communist countries, where autonomous organizations of Workers and Employers do not exist. The absence of these free organizations in the communist countries made the election of a President from one of them

92

88 Mr. Leon Chajn of Poland was elected President of the Fiftieth Session of the International Labor Conference by a vote of 184 for Mr. Chajn to 183 for Mr. G. M. J. Veldkamp of the Netherlands, with 6 abstentions and 3 spoiled ballots, taken June 1, 1966.

se Pyotr T. Pimenov of the U.S.S.R. was elected to a 3-year term on the Workers' Group of the Governing Body of the International Labor Office, June 9, 1966, the first nongovernment representative of a Soviet-bloc country to be elected to that body.

90 International Labour Conference, Fiftieth Session, Geneva, 1966: Report of the Director General, Part I: Industrialisation and Labour; and International Labour Conference, Fiftieth Session, Geneva, 1966, Activities of the I.L.O., 1965: Report of the Director General (Part II) to the International Labour Conference, Fiftieth Session, 1966: Twentieth Report of the International Labour Organization to the United Nations (Geneva, ILO, 1966).

91 For the U.S. Delegates' replies, see Appendices V and VI of the source text.

2 The U.S. Workers' Delegation withdrew from the Conference, June 10, 1966. Mr. whom Rudolph Faupl, the Conference Workers', Delegates reelected as the U.S. Workers' member of the Governing Body of the International Labor Office on June 9, 1966, participated in the 166th session of the Governing Body of the International Labor Office at Geneva on June 23, 1966.

97 Text ibid., pp. 757-758.

98 The U.S. Government and Employers' Delegates abstained in the vote on this Convention; text ibid., pp. 778-799.

The U.S. Government and Employers' Delegates abstained in the vote on this Convention; text ibid., pp. 768-777.

1 The U.S. Government and Employers' Delegates voted in favor of this Recommendation; text ibid., pp. 800-813.

2 The U.S. Government and Employers' Delegates voted in favor of this Recommendation; text ibid., pp. 814-827.

3 President Johnson requested Senate advice and consent to ratification of International Labor Convention No. 122 concerning employment policy, June 2, 1966 (text in S. Ex. G, 89th Cong., 2d sess.). This Convention, adopted by the International Labor Conference, July 9, 1964, provided that each member actively pursue a policy of promoting full, productive, and freely chosen employment. The Convention was pending in the Senate Foreign Relations Committee as of Jan. 1, 1967.

INTERNATIONAL MONETARY FUND

Document II-72

Report of the National Advisory Council on International Monetary and Financial Policies, Submitted March 31, 1967 (Excerpt)*

Operations of the International Monetary Fund During the Period July 1, 1965-June 30, 1966

PURPOSES AND FUNCTIONS

The purposes of the International Monetary Fund, in addition to making its resources available to member countries under appropriate safeguards, include the encouragement of (a) international monetary cooperation, (b) expansion and balanced 'growth of international trade, (c) maintenance of exchange stability and orderly exchange arrangements among members, and (d) the establishment of a multilateral system of payments for current transactions and the elimination of exchange restrictions. Under the unitary exchange rate system, which is a basic concept underlying the Fund agreement, each member is expected to declare a par value for its currency expressed in terms of gold or U.S. dollars (of the weight and fineness in effect on July 1, 1944) and to maintain the buying and selling rates of its currency within 1 percent of the par value. The approval of the Fund is required for changes in par values in excess of 10 percent of the original par value. Fund approval is also required for multiple exchange rates or other currency practices involving a deviation of more than 1 percent above or below the par value.

Each member of the Fund has a quota, which determines the amount

4 H. Doc. 92, 90th Cong., 1st sess., Apr. 3, 1967, pp. 4-14.

Text in A Decade of American Foreign Policy: Basic Documents, 1941-1949, pp. 273304.

of the member's subscription, measures the extent to which the member may have access to the Fund's resources, and governs the member's voting power. In March 1965 the Board of Governors approved a proposal calling for a general increase of 25 percent in quotas together with larger increases in those of 16 members. Members holding two-thirds of total quotas had consented to the proposed increases, and they thereby became effective, on February 23, 1966.

The Fund provides assistance to its members by selling convertible foreign exchange to member countries against payment in the member's own currency. Such transactions are commonly called Fund drawings. Drawings within the "gold tranche" or the portion of the quota, normally 25 percent, which is equivalent to the part of the member's subscription paid in gold, can be made almost automatically. The amount which a given member may draw virtually at will can be increased if other countries draw that member's currency to such an extent that the Fund's holdings of that member's currency drop below the original 75 percent of its quota. These claims upon the Fund are increasingly coming to be regarded as a type of reserve asset, which the creditor country can utilize to finance a deficit when its position changes.

Greater justification, in terms of steps taken by the member to solve its own problems, is required for drawings beyond the gold tranche. Requests for drawings within the first credit tranche, which would bring the Fund's holdings of a member's currency above 100 percent but not above 125 percent of its quota are given liberal treatment. Conditions of greater stringency are imposed as additional credit tranches are involved. The Fund is also prepared, in appropriate instances, to provide compensatory financing of temporary shortfalls in export receipts under an Executive Board decision adopted February 27, 1963, and amended on

• See International Monetary Fund, Summary Proceedings of the Twentieth Annual Meeting of the Board of Governors, September 27-October 1, 1965 (Washington, IMF, n.d.). pp. 245-249; and American Foreign Policy: Current Documents, 1965, p. 225, footnote 93.

See ibid., 1963, pp. 203-208.

September 20, 1966. As of June 30, 1966, three countries-Brazil, Sudan, and the United Arab Republic-had availed themselves of this facility. Drawings made under any of these arrangements are expected to be repurchased by the member, with gold or convertible currencies, over a period of not more than 3 to 5 years.

Closely related to Fund drawings are standby arrangements, under which a member is given assurance that it will be able to draw from the Fund up to an agreed amount under specified conditions. To an increasing extent, use of the Fund's resources has occurred in connection with standby arrangements. A request for a standby arrangement is given the same scrutiny, and is subject to the same criteria, as a request for a drawing of the same amount.

Members which maintain exchange restrictions under Article XIV of the Fund's Articles of Agreement are required to consult annually with the Fund and consultations on a voluntary basis are held with the countries that have accepted the obligations of Article VIII. The technical assistance of the Fund, through Fund missions, training programs, and other staff activities, has continued to expand.

MEMBERSHIP AND RESOURCES

During the period under review, the Fund's membership increased to 103. Two countries-Malawi and Zambiabecame members of the Fund with quotas of $11.25 million and $50 million, respectively. Indonesia, which had been a member of the Fund since 1954, withdrew from the Fund in August 1965. As a result of the general

8 IMF Executive Board Decision No. 2192-(66/81) extended the facility for compensatory financing from 25 percent to 50 percent of a member's quota in the Fund; text in International Monetary Fund, Annual Report of the Executive Directors for the Year Ended April 30, 1967 (Washington, IMF. n.d.), pp. 159-161. The United States supported this amendment; see the Department of State Bulletin, Oct. 24, 1966, p. 626.

9 Indonesia withdrew from the IMF, Aug. 17, 1965, reapplied for membership, July 5, 1966, and resumed membership on_signing the Articles of Agreement of the International Monetary Fund in Washington, Feb. 21, 1967. (See Resolution 21-12, adopted by the IMF Board of Governors, Sept. 30, 1966; text in International Monetary Fund, Summary Proceedings of the Twenty-First Annual Meeting of the Board of Governors, September 1966 (Washington, IMF, n.d.), pp. 248-253 (hereafter cited as Summary Proceedings); and International Monetary Fund, Annual Report of the Executive Directors for the Fiscal Year Ended April 30, 1967 (Washington, IMF, n.d.), p. 128 (hereafter cited as Annual Report, 1967).

and special increases in quotas mentioned earlier, the aggregate of Fund quotas on June 30, 1966, totaled the equivalent of $20,189.1 million (see app. table D-1).10 When all increases become effective, total quotas are expected to exceed $21 billion.

In October 1965, the Fund Executive Directors approved a 4-year renewal of the Fund's General Arrangements to Borrow." These arrangements, which first became effective in 1962, enable the Fund to supplement its resources by borrowing up to $6 billion in the currencies of 10 of its industrialized member countries should additional resources be needed to assure the smooth functioning of the international monetary system. These facilities have been used by the Fund on two occasions. In December 1964 the Fund borrowed the equivalent of $405 million and in May 1965 the equivalent of $525 million-to assist in financing transactions with the United Kingdom.

FUND CURRENCY TRANSACTIONS U.S. use of the Fund's resources

U.S. drawings from the Fund during the period under review totaled the equivalent of $580 million, including $300 million in five currencies the first U.S. "nontechnical" drawing from the Fund-" and four "technical" drawings totaling the equivalent of $280 million in Canadian dollars. The proceeds of the latter type of drawing are sold to other members for their use in making repayments to the Fund. Such drawings by the United States permit other countries to repay the Fund without creating a new or potential drain upon U.S. gold holdings. The Fund may not accept dollars in repurchase transactions since its holdings of dollars are in excess of 75 percent of the U.S. quota.14

13

10 See ante, doc. II-63.

11 Effective, Oct. 24, 1966; see American Foreign Policy: Current Documents, 1965, pp. 247-248.

12 See ibid., p. 229, footnote 2.

13 See Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1966 (Washington, Treasury Department Document No. 3239, 1967), pp. 499, 500, 501, and 503.

14 On Apr. 30, 1966, IMF holdings of U.S. dollars were equivalent to 85.9 percent of the U.S. quota; on Apr. 30, 1967, the Fund's U.S. dollar holdings were equivalent to 93 percent of the U.S. quota. The U.S. quota was $5,160,000,000 effective Feb. 26, 1965. (See International Monetary Fund, Annual Report of the Executive Directors for the Year Ended April 30, 1966 (Washington, IMF, n.d.), pp. 36 and 125, table; and Annual Report, 1967, p. 136.)

As of June 30, 1966, the United States had drawn the equivalent of $1.2 billion from the Fund. However, drawings of U.S. dollars by other member countries together with other Fund movements of U.S. dollars had the effect of reducing the U.S. outstanding balance of drawings at that date to $530.4 million.

Other currency sales

Total drawings from the Fund during the period amounted to the equivalent of $1.4 billion (see table 1). This compares with drawings of $3.2 billion in the preceding fiscal year, when the United Kingdom in two transactions purchased the equivalent of $2.4 billion in various currencies from the Fund.

A number of drawings during the current period were made in order to purchase gold in connection with the additional subscriptions required under the general increase in quotas which became effective in February. In order to mitigate the impact on the reserve currency countries of other countries' purchases of gold in connection with their Fund subscription payments, it was provided in conjunction with the increase in quotas that certain drawings up to the equivalent of $150 million could be made in currencies, other than the U.S. dollar or the pound sterling, for use in purchasing gold from the country whose currency was drawn, which gold the Fund would replenish by the sale of gold under Article VII, section 2(ii) of the Fund Agreement up to the amount of the drawings. It was further agreed that the Fund would make gold deposits in the United States and the United Kingdom up to an amount not exceeding the equivalent of $350 million in order to offset purchases of gold from these reserve centers.15

In addition to the U.S. drawings, other large transactions included the equivalent of $275 million by India, $122.5 million by the United Kingdom, $87.5 million by Yugoslavia, and $70 million by New Zealand. Drawings by Ireland, New Zealand, and Rwanda constituted the first use of the Fund's resources by these members.

15 On Apr. 30, 1967, the IMF's general deposit of gold with the Federal Reserve Bank of New York amounted to the equivalent of $230 million. Under a similar arrangement the Fund had deposited the equivalent of $44 million in gold on general deposit with the Bank of England (Annual Report, 1967, p. 121).