FOREIGN ECONOMIC AND COMMERCIAL POLICY


union the major part of its present responsibilities and could this be
prevented?
   (3) If not, can other methods be found to deal with the problem of
providing for regional payments within the European area and of
furthering the economic integration of Europe?2.

   [Here follows a section entitled "Participation by the United States
in the Clearing Union." Part (a) dealt with technical questions
regarding the requirements and forms of a United States financial
contribution.]
   (b) 211anagement and Policy Formation
   The ECA proposal suggests that the clearing union should be man-
aged by the Board of Directors on which the United States would
have a member. The significance of participation by the United States
in the management of the clearing union would depend greatly on
the functions assigned to the union and to the nature and extent of
the United States financing.
   The most serious questions arise in relation to the provision by this
 country of funds for credits to be given out by the union on the basis
 of policy undertakings by the recipients. Under proposals giving an
 active policy role to the clearing union, such as is envisaged by the
 tentative ECA proposals, United States participation in management
 would have. the obvious advantage of giving the United States a
 recognized voice in an organization dealing with questions of great
 importance.
   Moreover, support for a union having important policy functions
 would certainly be more readily forthcoming from the Congress and
 people of the United States if this country had representation in the
 supervision of the union. The case for participation by the United
 States in management would be much less certain with regard to a
 union functioning automatically on a basis of credit or payment
 margins agreed on in advance, as the safeguards to United States
 interests would be embodied in the agreement rather than represented
 by participation in discussion of management.
   On the other hand, the question arises, particularly as relates to
 long-range influence by the United States toward the ultimate goal of
 worldwide convertibility of currencies, whether the voting position
 of the United States in a European union would be comparable to the
 weighted voting strength of this country in the International Mone-
 tary Fund. It is questionable whether there is any way of assuring
 any such continuing position for the United States in a European
 clearing union as in the Fund.
   The relationship of participation by the United States in a clearing
 union raises another question respecting the International Monetary
 Fund, This question is whether United States participation in an


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