FOREIGN RELATIONS, 1950, VOLUME I


cussions on price levels, on import requirements, and on export
availabilities.'
   'The following action (No. 426) was taken unanimously by the Council
 through a telephone poll completed on October 16, 1950:
   "The National Advisory.Council advises the United States Executive
Director
 of the International Monetary Fund that he should seek to obtain separate
reports
 by the Fund to the Fifth Session of the Contracting Parties to GATT on the
 external financial position of the United Kingdom (including its dependent
 territories and among ,them Southern Rhodesia), India, Pakistan, Ceylon,
Aus-
 tralia and New Zealand, recommending that with respect to each of the indi-
 vidual countries named which currently has a surplus in its balance of payments
 with the dollar area, a measure of relaxation of retrictions against imports
 from the dollar area would appear feasible.
   In presenting this position the U.S. Executive Director should note that
 defense programs may react adversely on the net dollar earnings of certain
 of these countries and make clear that in the present situation priority
must
 be given to defense considerations." (NAC. Doc. No. 88, October 16,
1950, Lot
 60D137, Box 367)

 394.31/10-1950
 Memorandur of Conversations, by the Chief of the Moknetary Affairs
                          Staff (MeDiarmid)

CONFIDENTIAL                         [WASHIrNGTON,] October 19, 1950.
Participants: Mr. Frank Southard, U.S. Executive Director, IMF 1
                Mr. Leddy-ITP
                Mr. McDiarmid-NM
   Mr. Southard called me this morning for the purpose of reviewing
the progress of the Fund ITO    GATT Committee which is preparing
reports on the import restrictions of -the sterling area countries for
the Fifth Session of the GATT. He indicated in general terms the
recommendations being considered on the various countries which
appear to conform to tohe NAC action. The Fund would suggest some
relaxation for a,1 the sterling area countries except India and Paki-
stan, but in the case of Chile the Fund would indicate that it had been
keeping the 'Chilean restrictions under review -and does not consider
that further relaxation would be appropriate at ,this time. I had pre-
viously suggested ,an action along -this line in the case of Chile after
clearing with ARA. The main point which Mr. Southard wanted to
raise was the Department's ,attitude towards the position which all
the sterling area countries are taking in the Fund, namely, that, while
the need for the maintenance of the present level of discrimination
may be 1an appropriate subject to discuss, it is not the subject now
before the Fund or the Contracting Parties. That subject is, in the
British view, whether or not the action pursuant to the London

  Mr. Southard was also Special Assistant to the Secretary of the Treasury.


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