FUND TRANSACTIONS

Currency sales

During the period under review, Fund currency sales (members' drawings) to 18 countries totaled the equivalent of $1,368.5 million, of which $1,101.5 million, or over 80 percent, consisted of 11 currencies other than U.S. dollars. (See table 1.) The majority of the transactions were concluded under standby arrangements. Two countries-the United Kingdom and the United States-accounted for the major portion of total drawings during the period. Although during the earlier years of Fund operations currency sales were principally in U.S. dollars, more recently, as other currencies have become stronger, the number of other currencies used in Fund drawings has increased. The growing list of nondollar currencies being drawn by member countries includes Austrian schillings, Italian lire, Japanese yen, Spanish pesetas, Swedish kronor, and Mexican pesos (February 1965). In November, 11 countries and the Bank for International Settlements moved quickly to mobilize a total of $3 billion in short-term credits in a cooperative effort to defend the British pound against speculative pressures.18 In December, the United Kingdom drew the equivalent of $1 billion in 11 currencies, including $200 million in U.S. dollars, under a standby arrangement with the Fund approved in August 1964. This was not only the largest Fund transaction during the year but also was the most important in terms of international monetary stability. In order to provide the needed currencies, the Fund (1) supplied the equivalent of $345 million from its own resources, (2) borrowed the equivalent of $405 million in the currencies of eight member countries under the provisions of the General Arrangements to Borrow, and (3) purchased the equivalent of $250 million of members currencies against the sale of gold. The United Kingdom used the proceeds of the drawing to repay outstanding short-term credits from central banks and from the Federal Reserve System. The borrowing represented the first use of the General Arrangements to Borrow under which the Fund is authorized to borrow up to $6 billion in the currencies of 10 of its industrial member countries.19

Under its renewed $500 million standby arrangement with the Fund, approved in July 1964, the United States made additional drawings from the Fund totaling the equivalent of $275 million in five currencies. The proceeds of these transactions were used for the same primary purpose as in the case of the initial U.S. standby arrangement, namely, to enable other member countries to continue in effect to use their holdings of dollars to make repayments to the Fund. As previously noted, under the Fund Agreement, members

11 Not printed here.

18 See post, docs. IV-163-164.

19

The second use of the General Arrangements to Borrow, in an amount equivalent to $525 million of currencies borrowed by the Fund from eight member countries, occurred in May 1965 in connection with a drawing by the United Kingdom of the equivalent of $1.4 billion. [Footnote in source text.]

are prohibited from making repayments to the Fund in a specific currency if the Fund's holdings of that currency exceed 75 percent of the country's quota. Through December 1964, the United States had drawn a total of $525 million in various currencies from the Fund. However, British drawings of $200 million in U.S. dollars under the arrangements described in the preceding paragraph, plus other drawings in dollars, had reduced the net U.S. liability to the Fund to $261.8 million as of December 31, 1964.20

Other currency sales in the equivalent of $93.5 million were made to 16 developing member countries in Latin America, Asia and Africa.

TABLE 2.-International Monetary Fund currency sales, through Dec. 31, 1964, by calendar years

1 Argentine pesos, Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche marks, French francs, Italian lire, Japanese yen, Netherlands guilders, pounds sterling, Spanish pesetas, and Swedish kronor.

NOTE.-Detail will not necessarily add to totals, due to rounding.

Source: International Monetary Fund.

As shown in table 2, through the end of the period under review, the Fund sold the equivalent of over $9 billion in various currencies to 54 member countries. Nondollar drawings amounted to $4.4 billion, or approximately 49 percent of total drawings-a sharp rise over the 13 percent of total drawings through December 31, 1960.

Currency repurchases

Repurchase transactions by 16 member countries during the last half of 1964 totaled $285.3 million (see table 3)21 and ranged in amount

20

As a result of additional U.S. dollar drawings by the United Kingdom and other member countries, net U.S. drawings from the Fund were further reduced to $123.4 million as of the end of June 1965. [Footnote in source text.]

21 Not printed here.

TABLE 4.—International Monetary Fund currency repurchases, in currencies and gold, by calendar years, through Dec. 31, 1964

! Includes repayments by Czechoslovakia and Cuba.

Consisting of Austrian schillings, Belgian francs, Canadian dollars, deutsche marks, French francs, Italian lire, Netherlands guilders, pounds sterling, and Swedish kronor.

Canadian dollars amounting to less than $50,000.

NOTE.-Detail will not necessarily add to totals due to rounding.

Source: International Monetary Fund.

from $240,000 by Paraguay to $65.3 million by Italy and $107.2 million by Canada. All repurchases during the period were made in currencies other than U.S. dollars, although the currencies used in repayment were in several instances purchased from the United States for dollars. The Italian transaction represents partial repayment of a gold tranche drawing of $225 million in March 1964. The Canadian repurchase completes repayment of a $300 million drawing made by Canada in June 1962.

Cumulative repurchases through December 31, 1964, amounted to $5,655 million and consisted of $3,572 million in U.S. dollars, $1,264 million in nondollar currencies and $819 million in gold. (See table 4.) Outstanding drawings on December 31, 1964, totaled $2,621 million, an increase of approximately $800 million over such drawings on June 30, 1964.

Standby arrangements

Standby arrangements are an important element of Fund operations. The Fund in the current period entered into new or renewed standby arrangements totaling $1.6 billion with 10 member countries-the United Kingdom, the United States, the Dominican Republic, Tunisia, Ecuador, Bolivia, Mali, Honduras, Paraguay, and Haiti. These arrangements are intended in many cases to support stabilization

measures designed to improve the balance of payments and to restore financial stability.

TABLE 5.—International Monetary Fund standby arrangements—Amounts available under agreements in effect on Dec. 31, 1964

In the 122 years since the standby technique was developed, the equivalent of $9.5 billion of such arrangements was authorized. Drawings under these agreements totaled approximately $3.5 billion. At the end of 1964, undrawn balances under standby arrangements with 16 members were equivalent to $685 million, including $225 million for the United States and $305 million for Japan. (See table 5.)

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

THE UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION

Document II-59

United States Grant of $12 Million to the UNESCO Program for Preservation of the Temples of Abu Simbel: STATEMENT ISSUED BY THE DEPARTMENT OF STATE, OCTOBER 6, 1964 22

Document II-60

Thirteenth Session of the General Conference of UNESCO, Paris, October 20-November 20, 1964: REPORT OF THE U.S. DELEGATION (EXCERPTS) 23

GENERAL

The Thirteenth Session of the General Conference convened at UNESCO headquarters in Paris on October 20, 1964 and concluded its deliberations on November 20, 1964. With the admission of Zambia and Malawi, 117 Member States were eligible to participate in the deliberations. The General Conference was preceded by a threeweek session of the Executive Board and followed by a two-day session of the Board.

The United States Delegation to the General Conference was chaired by Senator William Benton, the U.S. Member of the Executive Board. A complete list of the U.S. Delegation appears in Annex I.

The two main contenders for the Presidency of the General Conference were Norair Sissakian, First Scientific Secretary of the Academy of Sciences, of the USSR and S. M. Sharif of Pakistan, the latter supported by the U.S. The last-minute withdrawal of Sharif from the race for personal reasons ensured Sissakian's victory, and he was elected by acclamation. Under the circumstances, the United States Delegation did not oppose his election.

POLITICAL MATTERS

UNESCO is perhaps the most political of the agencies in the UN system-with the exception of the UN itself. This is to be expected since its program is directed at the mind. Little of the debate in plenary meetings at the Conference dealt with the high goals of UNESCO. The debates dealt instead with such matters as colonialism, peaceful co-existence, the Chinese problem and so forth. Thus there is great and intensive pressure on the delegation to a UNESCO conference, much more than might be expected at a technical meeting

22

'Department of State Bulletin, Nov. 2, 1964, p. 645. The $12 million grant was formalized in an agreement between the United States and UNESCO which entered into force Oct. 16, 1964 (TIAS 5731; 15 UST 2405).

Report of the United States Delegation to the 13th General Conference of UNESCO, October-November, 1964 (USDEL 13C/Report, Department of State, mimeographed).