17.9 Billion of Hope

I am greatly encouraged by the critical, skeptical and even carping spirit in which our proceedings have been watched in the outside world. How much better that our projects should begin in disillusion than that they should end in it.

With these words Lord Keynes last week moved the adoption of the completed plans for an $8,800,000,000 world stabilization fund and a world reconstruction bank whose capital will total $9,100,000,000.* But the striking fact was that the delegates at the United Nations Monetary Conference at Bretton Woods felt very little skepticism about the value of their work.

At no point did the conference break down into a fight between selfish interests. Throughout, the attitude of the delegates was: "If we can't agree on a thing like this, what hope is there for the postwar world?"

Probably every one of the 45 nations represented had to make concessions about its degree of financial responsibility. But the concessions were made without bitterness. For the delegates knew that the concessions required were small compared to the advantages.

So Bretton Woods was a shock to those who are cynical about the possibilities of international cooperation. It was also full of surprises. Examples:

P: The Russians knew what they wanted and stood firmly for it. They won respect because their reluctance to yield was so obviously motivated by their anxiety not to commit Russia to anything the Soviet Union might not be able to live up to. And the Russians made concessions, voluntarily upping their subscription to the Bank from $900 million to $1.2 billion, after the conference had reluctantly agreed to the lower figure.

P: The Latin Americans, who felt that their underdeveloped countries should receive loans rather than make them, wanted to make only nominal subscriptions to the Bank. But under the leadership of able young Luis Machado (personal representative of Cuba's President-elect Grau) they finally boosted their subscription to 70% of the amount asked.

P: In the Fund (where quotas determine a nation's borrowing and voting limit), Colombia and Chile, like several other nations, wanted quotas bigger than $45 million. Mexico's Antonio Espinosa de los Monteros brought down the house by voluntarily giving each of them $5 million from the $100 million allotted to his country.

P: New Zealand put up a strong case for a bigger Fund quota, because she has the highest per capita world trade of any country in the world and it is subject to big fluctuations. But Finance Minister Walter Nash announced that in spite of the fact that his plea was rejected he was going back to New Zealand and fight for ratification of the Fund agreement.

U.S. Contribution. The concessions made by the U.S. delegation were not outstanding. Most notable was an increase from $2,750 million to $3,175 million in the U.S. subscription to the Bank.

The biggest U.S. contribution to the conference was probably in the prodigal effort poured into it by its representatives. The leading delegates and technicians of all nations, most of them no longer young, worked for three weeks with no more than a few hours sleep a night (even the stenographic staff worked three shifts). But the U.S. Treasury's Harry White outdid the rest. With no more than three or four hours sleep a night, he continued to the end with temper unfrayed and head clear, keeping facts and logic marshaled impressively and informing the press ably and regularly.

U.S. Responsibility. The plans drawn at Bretton Woods for the Fund and the Bank will not become effective until ratified by the nations whose delegates drew them. But in instigating the conference and pushing it to a successful conclusion the U.S. had assumed its biggest postwar responsibility to date.

If the U.S. delegation made a mistake, it was in not inviting more U.S. bankers to participate in the deliberations; Many U.S. bankers are prejudiced against the idea of the Conference. The Treasury might well have taken some of its opponents along to let them see for themselves. For U.S. bankers have great influence in the U.S. Congress, which has still to ratify the agreement.

* The Fund is a plan to stabilize the ratio be tween the currencies of 44 nations (Denmark was not assigned a quota), in an endeavor to protect the 1,500,000,000 people of those nations against slumps caused by a temporary shortage of foreign exchange. The Bank would make available, under most careful safeguards, a great pool of money for the reconstruction or physical improvement of war-damaged or backward areas. For detailed de scription of the two proposed institutions, see below.

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