tion in 17 loans by U.S. and foreign commercial banks and financial institutions, without the Bank's guaranty, totaled approximately $30 million. The Bank made its first loans to Malta, New Zealand, Portugal, and Spain. Loan disbursements in the current half-year were $302.5 million.

In calendar 1963, net loan commitments of the Bank totaled the equivalent of $764.2 million-an amount larger than in any previous calendar year. Disbursements during this period were $592 million. Through the end of December 1963, the Bank's net loan commitments totaled the equivalent of $7,464.9 million (see table 7),23 covering 371 loans in 70 countries and territories. About 60 percent of this total was approved for projects in Asia and the Middle East ($2.5 billion) and the Western Hemisphere ($1.9 billion), and over 75 percent has been disbursed.

*

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

DISTRIBUTION OF EXPENDITURES UNDER BANK LOANS

Under the provisions of the Bank's Articles of Agreement, borrowers are free to use the proceeds of loans for purchases in any member country, and orders are normally placed on the basis of international competition. Purchases may also be made in Switzerland in view of that country's special relationship to the Bank.

In the early years of the Bank's operations, Bank loans were used very largely for purchases in the United States since other countries producing capital goods had no surplus of such goods for export. Through June 1948, identified loan expenditures in the United States of about $356 million represented 76 percent of total identified procurement. With the gradual recovery of the productive capacity in other member countries, the pattern of Bank disbursements changed with the result that the United States' share of cumulative Bank procurement decreased on an overall basis to a level of 45 percent, as of December 31, 1963, as shown in table 8.23 Since June 30, 1960, the trend of annual results in Bank procurement appears to be in the direction of a gradually increasing United States share. From a low of 29 percent in fiscal 1960, the United States' share increased to 33 percent in fiscal 1963 and 35 percent in the last half of 1963.

SECURITY ISSUES AND SALES OF LOANS

As of December 31, 1963, the outstanding funded debt of the Bank totaled the equivalent of $2,510.4 million, a net decrease of $8.8 million during the July-December 1963 period. In September, the Bank arranged the sale, entirely outside the United States, of a $100 million issue of 2-year, 4-percent dollar bonds. These funds were privately

23 Not reprinted here.

placed with central banks and other governmental institutions in 29 countries. This was a refunding operation which replaced a 2-year, 4-percent, U.S. dollar bond issue placed outside the United States in 1961 and which matured in 1963. The outstanding debt was decreased during the period under review through sinking fund and purchase fund transactions amounting to $8.8 million. Of the total of $2.5 billion in outstanding obligations on December 31, 1963, approximately $1.9 billion was denominated in U.S. dollars, and about $620 million in Belgian francs, Canadian dollars, Deutsche mark, Italian lire, Netherlands guilders, pounds sterling, and Swiss francs.

In the period under review, the Bank sold or agreed to sell the equivalent of $122.1 million principal amount of its loans, all without the Bank's guarantee. Through December 31, 1963, the total of such sales and agreements to sell amounted to $1,727.4 million, over two-thirds of which were made outside the United States.

The Council gave the approval of the United States to the borrowing by the Bank in U.S. dollars outside the United States, mentioned at the beginning of this section. Such borrowings have no statistical impact on the U.S. balance of payments. The Council also approved sales by the Bank of portions of its loans denominated in U.S. dollars. Since the announcement of the proposed Interest Equalization Tax in July 1963, the Bank has refrained from offering for sale to U.S. investors portions of its loans to countries whose obligations would fall within the scope of the proposed tax.

24

FISCAL RESULTS

For the 6 months ended December 31, 1963, the Bank reported net earnings of $36.5 million (compared to $42.5 million in the preceding 6-month period) which, in accordance with usual procedure, were added to the Supplemental Reserve against losses on loans and guarantees. Loan commissions earned during the period amounted to $16.2 million (compared to $15.9 million for the period January-June 1963) and were credited to the Special Reserve. On December 31, 1963, the Supplemental Reserve totaled $558 million and the Special Reserve was $271 million. Repayments of principal received by the Bank in the current period amounted to $58.3 million. Total principal repayments of $1,452.4 million on December 31, 1963, comprised $713.6 million repaid to the Bank, and $738.8 million repaid to the purchasers of borrowers' obligations sold by the Bank.

*See post, doc. XI-4.

Doc. II-69

APPENDIX B 25

TABLE B-1.-Membership and quotas in the International Monetary Fund (IMF), and membership and subscriptions in the International Bank (IBRD), the International Finance Corporation (IFC), and the International Development Association (IDA), as of Dec. 31, 1963

Source: International Monetary Fund, International Bank, International Finance Corporation, and International Development Association.

THE INTERNATIONAL CIVIL AVIATION ORGANIZATION

II-70

ACTIVITIES OF THE INTERNATIONAL CIVIL AVIATION ORGANIZATION DURING 1963: Annual Report of the President (Johnson) to the Congress on U.S. Participation in the U.N., Transmitted August 20, 1964 (Excerpt)26

At an air law conference, held under ICAO's auspices at Tokyo in August and September 1963, the United States and 15 other nations. signed a Convention on Offences and Certain Other Acts Committed on Board Aircraft. This new Convention, which lays down the rule that the country of registration of an aircraft is competent to exercise jurisdiction over offenses and acts committed on board while the aircraft is in flight, will come into force after it has been ratified by 12 countries. The Convention will provide an internationally agreed system to insure that no suspected offender will escape trial merely on the ground that his alleged offense was committed on board an aircraft. Offenses committed on aircraft will be treated for purposes of extradition as if they were committed not only in the place in which they have in fact occurred, but also in the country of registration of the aircraft. An article in the Convention concerning hijacking of aircraft provides that, if a person on board unlawfully and by force or threat of force seizes the aircraft or wrongfully interferes with the control of it in flight, all parties to the Convention shall have an obligation to take all appropriate measures to restore control of the aircraft to its lawful commander or to preserve his control of it.

THE INTERNATIONAL developmENT ASSOCIATION

II-71

OPERATIONS OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION DURING THE PERIOD JANUARY 1-JUNE 30, 1963: Report of the National Advisory Council on International Monetary and Financial Problems, Submitted April 11, 1964 (Excerpt)27

The IDA was established in 1960,28 as an affiliate of the International Bank, to promote economic development, increase productivity, and thus raise standards of living in the less-developed areas of the world. It is designed to meet the situation in a growing number of developing

26

27

28

U.S. Participation in the UN, pp. 297–299.

H. Doc. 297, 88th Cong., April 14, 1964, pp. 16-20. Part V of the NAC report. See American Foreign Policy: Current Documents, 1960, pp. 140-141.