FOREIGN. RELATIONS, 1950, VOLUMBE I


proposals. We might have to say no to these proposals but the burden
on us would be a little less than at present and acceptance of the pro-
posal would be a gesture in the right direction. He added that he and
Mr. Hooker 4 thought it was a fair risk although it was not free of
all risk.
  Mr. Southard continued that he considered that this proposal did
not contradict any decisions of the NAC nor the two documents he
had put before the Fund at the direction of the Council. The Staff
Committee and the Council would have an opportunity to see in ad-
vance any program which, in the judgment of the Fund's Staff, met
the broad Gutt standard. He thought it was only.when the individual
cases were brought up that the Council could be expected to say yes
or no. He would like to feel it would not be inappropriate 'for him to
show this degree of cooperativeness in the Fund. However, if the
Council felt it was time to call a halt to the use of the Fund's resources
he would like to know that now.
  Mr. Szymczak,5 said that he had strongly favored the ýproposed
approach three or four weeks previously. Under present conditions,
however, he would favor steps that would delay a decision until we
could see more clearly what we were going to do. He added that he
understood that no change was 'being proposed in the NAC action
with respect to the ERP countries. Mr. Southard confirmed this
understanding.
  Mr. Blaisdell6 pointed out that Mr. Gutt's paper was dated Novem-
ber 7. In the, month that had elapsed since then a great many things
had happened that changed the picture entirely. At 'the earlier date
there was a considerable feeling of optimism that we were looking
to a time when- we could have fewer quantitative controls, and the
kind of freedom of trade and payments which he took it Mr. Gutt had
in mind when he raised the question. The matter had to be regarded
in the light of developments during the past month and of :the kind
of world situation it seemed we were- likely to have.7 This included a
budgetary situation in the United States which, unless regulatory
measures were taken, would make the-dollar of considerably different
character in international trade than in the past. In view of similar
actions that would be taken in other countries he wondered whether.
instead of there being the cautious approach Mr. Southard had sug-
gested, there should not be a very bold approach to the problem and

  'John S. H'ooker, Alternate U.S. Director, International Monetary Fund.
  5M. S. Szymczak, Board of Governors, Federal Reserve System.
  6Thomas C. Blaisdell, Jr., NAC representative from the Commerce Department.
  7 This is a reference to the national and international emergency that
had
arisen following upon the Chinese Communist intervention in the hostilities
in
Korea; for documentation regarding Korea, see vol. vn, pp. 1237 ff.; for
informa-
tion regarding the proclamation of the national emergency in the United States,
see editorial note, p. 477. The remarks that follow are made in the context
of this
emergency.


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