FOREIGN ECONOMIC AND COMMERCIAL POLICY


823


2. Management of Clearing Union and United States Participation
     Therein.
   In order to avoid any possible United States involvement in conflict
 of recommendations made by the clearing union on monetary policy
 and those of the International Monetary Fund, the United States
 should not participate in the management of the clearing union. This
 would not preclude a United States observer in the union for the
 duration of the ERP period only; nor would it preclude United
 States veto power on any use of funds contributed' by the United
 States under" 1,above,..

   III. With respect ,to the memorandum of January 12, 1950, from
 the 'Managing Director of the Internationa Monetary Fund,1 the
 National Advisory'Council instructs the United States Executive
 Director to assure the Managing Director that the United States fully
 recognizes the interest of the International Monetary, Fund in any
 European clearing union and also indicate the hope of the United
 States that the International Monetary Fund will proceed promptly
 with consideration of the relationship which ought to be worked out
 between the International Monetary Fund and any European clearing
 union. As an immediate1first step, the United States will propose that
 a Fund representative be invited to participate in the meetings of the
 special committee of the OEEC which is now discussing the clearing
 union proposal.
   [Here follow discussion and action on another question.]

   'See footnote 6, p. 818.


                          Editorial Note
  The question of the structure of the European Payments Union and
possible conflicts between IMF and EPU principles and policies was
raised again in a National Advisory Council meeting (No. 158) on
June 29. The Secretary of the Council, C. Dillon Glendinning, raised
the question in the context of the then-advanced stage of negotiations
for the establishment of a European Payments Union, revealing "the
type of arrangements the Europeans were prepared to accept ..
The basis for the discussion was NAC Doc. 1009, June 29, 1950 (Lot
60D137, Box 367).
  During the discussion, Mr. Frank A. Southard, Jr., the United
States Executive Director on the International Monetary Fund, said
that he wanted to emphasize once again those parts of the problem
that concerned him "as the representative of the Fund". The Minutes
summarize his position as follows:
  "Mr. Southard added that the task of reconciling the EPU with
broader United States policy with respect to non-discrimination and


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