1944 July 22
Articles of Agreement of the International Monetary Fund,
1944: The United Nations Monetary and Financial Conference
held at Bretton Woods during July 1944 concluded with the creation
of the IMF. These excerpts contain the major articles dealing
with the objectives and obligations of the members as well as
the articles relating to the relationship between gold, the
dollar, and other member currencies.
The Governments on whose behalf the present Agreement
is signed agree as follows:
The International Monetary Fund is established
and shall operate in accordance with the following provisions:
ARTICLE I. PURPOSES
The purposes of the International Monetary Fund are:
(i) To promote international monetary cooperation through a permanent
institution which provides the machinery for consultation and collaboration
on international monetary problems.
(ii) To facilitate the expansion and balanced growth of international
trade, and to contribute thereby to the promotion and maintenance
of high levels of employment and real income and to the development
of the productive resources of all members as primary objectives
of economic policy.
(iii) To promote exchange stability, to maintain orderly exchange
arrangements among members, and to avoid competitive exchange depreciation.
(iv) To assist in the establishment of a multilateral system of
payments in respect of current transactions between members and
in the elimination of foreign exchange restrictions which hamper
the growth of world trade.
(v) To give confidence to members by making the Fund's resources
available to them under adequate safeguards, thus providing them
with opportunity to correct maladjustments in their balance of payments
without resorting to measures destructive of national or international
(vi) In accordance with the above, to shorten the duration and
lessen the degree of disequilibrium in the international balances
of payments of members.
The Fund shall be guided in all its decisions by the purposes
set forth in this Article.
ARTICLE II. MEMBERSHIP
SECTION 1. Original members. -The original members of the Fund
shall be those of the countries represented at the United Nations
Monetary and Financial Conference whose governments accept membership
before the date specified in Article XX, Section 2 (e).
SEC. 2. Other members. -Membership shall be open to the governments
of other countries at such times and in accordance with such terms
as may be prescribed by the Fund.
ARTICLE III. QUOTAS AND SUBSCRIPTIONS
SECTION 1. Quotas. -Each member shall be assigned a quota. The
quotas of the members represented at the United Nations Monetary
and Financial Conference which accept membership before the date
specified in Article XX, Section 2 (e), shall be those set forth
in Schedule A. The quotas of other members shall be determined by
SEC. 2. Adjustment of quotas. -The Fund shall at intervals of
five years review, and if it deems it appropriate propose an adjustment
of, the quotas of the members. It may also, if it thinks fit, consider
at any other time the adjustment of any particular quota at the
request of the member concerned. A four-fifths majority of the total
voting power shall be required for any change in quotas and no quota
shall be changed without the consent of the member concerned.
SEC. 3. Subscriptions: time, place, and form of payment. -
(a) The subscription of each member shall be equal to its quota
and shall be paid in full to the Fund at the appropriate depository
on or before the date when the member becomes eligible under Article
XX, Section 4 (c) or (d), to buy currencies from the Fund.
(b) Each member shall pay in gold, as a minimum, the smaller of
(i) twenty-five percent of its quota; or
(ii) ten percent of its net official holdings of gold and United
States dollars as at the date when the Fund notifies members under
Article XX, Section 4 (a) that it will shortly be in a position
to begin exchange transactions.
Each member shall furnish to the Fund the data necessary to determine
its net official holdings of gold and United States dollars.
(c) Each member shall pay the balance of its quota in its own
(d) If the net official holdings of gold and United States dollars
of any member as at the date referred to in (b) (ii) above are not
ascertainable because its territories have been occupied by the
enemy, the Fund shall fix an appropriate alternative date for determining
such holdings. If such date is later than that on which the country
becomes eligible under Article XX, Section 4 (c) or (d), to buy
currencies from the Fund, the Fund and the member shall agree on
a provisional gold payment to be made under (b) above, and the balance
of the member's subscription shall be paid in the member's currency,
subject to appropriate adjustment between the member and the Fund
when the net official holdings have been ascertained.
SEC. 4. Payments when quotas are changed. -
(a) Each member which consents to an increase in its quota shall,
within thirty days after the date of its consent, pay to the Fund
twenty-five percent of the increase in gold and the balance in its
own currency. If, however, on the date when the member consents
to an increase, its monetary reserves are less than its new quota,
the Fund may reduce the proportion of the increase to be paid in
(b) If a member consents to a reduction in its quota, the Fund
shall, within thirty days after the date of the consent, pay to
the member an amount equal to the reduction. The payment shall be
made in the member's currency and in such amount of gold as may
be necessary to prevent reducing the Fund's holdings of the currency
below seventy-five percent of the new quota.
SEC. 5. Substitution of securities for currency. -The Fund shall
accept from any member in place of any part of the member's currency
which in the judgment of the Fund is not needed for its operations,
notes or similar obligations issued by the member or the depository
designated by the member under Article XIII, Section 2, which shall
be non-negotiable, non-interest bearing and payable at their par
value on demand by crediting the account of the Fund in the designated
depository. This Section shall apply not only to currency subscribed
by members but also to any currency otherwise due to, or acquired
by, the Fund.
ARTICLE IV. PAR VALUES OF CURRENCIES
SECTION 1. Expression of par values. -
(a) The par value of the currency of each member shall be expressed
in terms of gold as a common denominator or in terms of the United
States dollar of the weight and fineness in effect on July 1, 1944.
(b) All computations relating to currencies of members for the
purpose of applying the provisions of this Agreement shall be on
the basis of their par values.
SEC. 2. Gold purchases based on par values. -The Fund shall prescribe
a margin above and below par value for transactions in gold by members,
and no member shall buy gold at a price above par value plus the
prescribed margin, or sell gold at a price below par value minus
the prescribed margin.
SEC. 3. Foreign exchange dealings based on parity. -The maximum
and the minimum rates for exchange transactions between the currencies
of members taking place within their territories shall not differ
(i) in the case of spot exchange transactions, by more than one
percent; and (ii) in the case of other exchange transactions, by
a margin which exceeds the margin for spot exchange transactions
by more than the Fund considers reasonable.
SEC. 4. Obligations regarding exchange stability. -
(a) Each member undertakes to collaborate with the Fund to promote
exchange stability, to maintain orderly exchange arrangements with
other members, and to avoid competitive exchange alterations.
(b) Each member undertakes, through appropriate measures consistent
with this Agreement, to permit within its territories exchange transactions
between its currency and the currencies of other members only within
the limits prescribed under Section 3 of this Article. A member
whose monetary authorities, for the settlement of international
transactions, in fact freely buy and sell gold within the limits
prescribed by the Fund under Section 2 of this Article shall be
deemed to be fulfilling this undertaking.
SEC. 5. Changes in par values. -
(a) A member shall not propose a change in the par value of its
currency except to correct a fundamental disequilibrium.
(b) A change in the par value of a member's currency may be made
only on the proposal of the member and only after consultation with
(c) When a change is proposed, the Fund shall first take into
account the changes, if any, which have already taken place in the
initial par value of the member's currency as determined under Article
XX, Section 4. If the proposed change, together with all previous
changes, whether increases or decreases,
(i) does not exceed ten percent of the initial par value, the
Fund shall raise no objection;
(ii) does not exceed a further ten percent of the initial par
value, the Fund may either
concur or object, but shall declare its attitude within seventy-two
hours if the member so requests;
(iii) is not within (i) or (ii) above, the Fund may either concur
or object, but shall be entitled to a longer period in which to
declare its attitude.
(d) Uniform changes in par values made under Section 7 of this
Article shall not be taken into account in determining whether a
proposed change falls within (i), (ii), or (iii) of (c) above.
(e) A member may change the par value of its currency without
the concurrence of the Fund if the change does not affect the international
transactions of members of the Fund.
(f) The Fund shall concur in a proposed change which is within
the terms of (c) (ii) or (c) (iii) above if it is satisfied that
the change is necessary to correct a fundamental disequilibrium.
In particular, provided it is so satisfied, it shall not object
to a proposed change because of the domestic social or political
policies of the member proposing the change.
SEC. 6. Effect of unauthorized changes. -If a member changes the
par value of its currency despite the objection of the Fund, in
cases where the Fund is entitled to object, the member shall be
ineligible to use the resources of the Fund unless the Fund otherwise
determines; and if, after the expiration of a reasonable period,
the difference between the member and the Fund continues, the matter
shall be subject to the provisions of Article XV, Section 2 (b).
SEC. 7. Uniform changes in par values. -Notwithstanding the provisions
of Section 5 (b) of this Article, the Fund by a majority of the
total voting power may make uniform proportionate changes in the
par values of the currencies of all members, provided each such
change is approved by every member which has ten percent or more
of the total of the quotas. The par value of a member's currency
shall, however, not be changed under this provision if, within seventy-two
hours of the Fund's action, the member informs the Fund that it
does not wish the par value of its currency to be changed by such
SEC. 8. Maintenance of gold value of the Fund's assets.
(a) The gold value of the Fund's assets shall be maintained notwithstanding
changes in the par or foreign exchange value of the currency of
(b) Whenever (i) the par value of a member's currency is reduced,
or (ii) the foreign exchange value of a member's currency has, in
the opinion of the Fund, depreciated to a significant extent within
that member's territories, the member shall pay to the Fund within
a reasonable time an amount of its own currency equal to the reduction
in the gold value of its currency held by the Fund.
(c) Whenever the par value of a member's currency is increased,
the Fund shall return to such member within a reasonable time an
amount in its currency equal to the increase in the gold value of
its currency held by the Fund.
(d) The provisions of this Section shall apply to a uniform proportionate
change in the par values of the currencies of all members, unless
at the time when such a change is proposed the Fund decides otherwise.
SEC. 9. Separate currencies within a member's territories. -A
member proposing a change in the par value of its currency shall
be deemed, unless it declares otherwise, to be proposing a corresponding
change in the par value of the separate currencies of all territories
in respect of which it has accepted this Agreement under Article
XX, Section 2 (g). It shall, however, be open to a member to declare
that its proposal relates either to the metropolitan currency alone,
or only to one or more specified separate currencies, or to the
metropolitan currency and one or more specified separate currencies.
ARTICLE V. TRANSACTIONS WITH THE FUND
SECTION I. Agencies dealing with the Fund. -Each member shall
deal with the Fund only through its Treasury, central bank, stabilization
fund, or other similar fiscal agency and the Fund shall deal only
with or through the same agencies.
SEC. 2. Limitation on the Fund's operations. -Except as otherwise
provided in this Agreement, operations on the account of the Fund
shall be limited to transactions for the purpose of supplying a
member, on the initiative of such member, with the currency of another
member in exchange for gold or for the currency of the member desiring
to make the purchase.
SEC. 3. Conditions governing use of the Fund's resources. -
(a) A member shall be entitled to buy the currency of another
member from the Fund in exchange for its own currency subject to
the following conditions:
(i) The member desiring to purchase the currency represents that
it is presently needed for making in that currency payments which
are consistent with the provisions of this Agreement;
(ii) The Fund has not given notice under Article VII, Section
3, that its holdings of the currency desired have become scarce;
(iii) The proposed purchase would not cause the Fund's holdings
of the purchasing member's currency to increase by more than twenty-five
percent of its quota during the period of twelve months ending on
the date of the purchase nor to exceed two hundred percent of its
quota, but the twenty-five percent limitation shall apply only to
the extent that the Fund's holdings of the member's currency have
been brought above seventy-five percent of its quota if they had
been below that amount;
(iv) The Fund has not previously declared under Section 5 of this
Article, Article IV, Section 6, Article VI, Section 1, or Article
XV, Section 2 (a), that the member desiring to purchase is ineligible
to use the resources of the Fund. (b) A member shall not be entitled
without the permission of the Fund to use the Fund's resources to
acquire currency to hold against forward exchange transactions.
SEC. 4. Waiver of conditions. -The Fund may in its discretion,
and on terms which safeguard its interests, waive any of the conditions
prescribed in Section 3 (a) of this Article, especially in the case
of members with a record of avoiding large or continuous use of
the Fund's resources. In making a waiver it shall take into consideration
periodic or exceptional requirements of the member requesting the
waiver. The Fund shall also take into consideration a member's willingness
to pledge as collateral security gold, silver, securities, or other
acceptable assets having a value sufficient in the opinion of the
Fund to protect its interests and may require as a condition of
waiver the pledge of such collateral security.
SEC. 5. Ineligibility to use the fund's resources. -Whenever the
Fund is of the opinion that any member is using the resources of
the Fund in a manner contrary to the purposes of the Fund, it shall
present to the member a report setting forth the views of the Fund
and prescribing a suitable time for reply. After presenting such
a report to a member, the Fund may limit the use of its resources
by the member. If no reply to the report is received from the member
within the prescribed time, or if the reply received is unsatisfactory,
the Fund may continue to limit the member's use of the Fund's resources
or may, after giving reasonable notice to the member, declare it
ineligible to use the resources of the Fund.
SEC. 6. Purchases of currencies from the fund for gold. -
(a) Any member desiring to obtain, directly or indirectly, the
currency of another member for gold shall, provided that it can
do so with equal advantage, acquire it by the sale of gold to the
(b) Nothing in this Section shall be deemed to preclude any member
from selling in any market gold newly produced from mines located
within its territories.
SEC. 7. Repurchase by a member of its currency held by the fund.
(a) A member may repurchase from the Fund and the Fund shall sell
for gold any part of the Fund's holdings of its currency in excess
of its quota.
(b) At the end of each financial year of the Fund, a member shall
repurchase from the Fund with gold or convertible currencies, as
determined in accordance with Schedule B, part of the Fund's holdings
of its currency under the following conditions:
(i) Each member shall use in repurchases of its own currency from
the Fund an amount of its monetary reserves equal in value to one-half
of any increase that has occurred during the year in the Fund's
holdings of its currency plus one-half of any increase, or minus
one-half of any decrease, that has occurred during the year in the
member's monetary reserves. This rule shall not apply when a member's
monetary reserves have decreased during the year by more than the
Fund's holdings of its currency have increased.
(ii) If after the repurchase described in (i) above (if required)
has been made, a member's holdings of another member's currency
(or of gold acquired from that member) are found to have increased
by reason of transactions in terms of that currency with other members
or persons in their territories, the member whose holdings of such
currency (or gold) have thus increased shall use the increase to
repurchase its own currency from the Fund.
(c) None of the adjustments described in (b) above shall be carried
to a point at which
(i) the member's monetary reserves are below its quota, or
(ii) the Fund's holdings of its currency are below seventy-five
percent of its quota, or
(iii) the Fund's holdings of any currency required to be used
are above seventy-five percent of the quota of the member concerned.
SEC. 8. Charges. -
(a) Any member buying the currency of another member from the
Fund in exchange for its own currency shall pay a service charge
uniform for all members of three-fourths percent in addition to
the parity price. The Fund in its discretion may increase this service
charge to not more than one percent or reduce it to not less than
(b) The Fund may levy a reasonable handling charge on any member
buying gold from the Fund or selling gold to the Fund.
(c) The Fund shall levy charges uniform for all members which
shall be payable by any member on the average daily balances of
its currency held by the Fund in excess of its quota. These charges
shall be at the following rates:
(i) On amounts not more than twenty-five percent in excess of
the quota: no charge for the first three months; one-half percent
per annum for the next nine months; and thereafter an increase in
the charge of one-half percent for each subsequent year.
(ii) On amounts more than twenty-five percent and not more than
fifty percent in excess of the quota: an additional one-half percent
for the first year; and an additional one-half percent for each
(iii) On each additional bracket of twenty-five percent in excess
of the quota: an additional one-half percent for the first year;
and an additional one-half percent for each subsequent year.
(d) Whenever the Fund's holdings of a member's currency are such
that the charge applicable to any bracket for any period has reached
the rate of four percent per annum, the Fund and the member shall
consider means by which the Fund's holdings of the currency can
be reduced. Thereafter, the charges shall rise in accordance with
the provisions of (c) above until they reach five percent and failing
agreement, the Fund may then impose such charges as it deems appropriate.
(e) The rates referred to in (c) and (d) above may be changed
by a three-fourths majority of the total voting power.
(f) All charges shall be paid in gold. If, however, the member's
monetary reserves are less than one-half of its quota, it shall
pay in gold only that proportion of the charges due which such reserves
bear to one-half of its quota, and shall pay the balance in its
ARTICLE VII. SCARCE CURRENCIES
SECTION 1. General scarcity of currency. -If the Fund finds that
a general scarcity of a particular currency is developing, the Fund
may so inform members and may issue a report setting forth the causes
of the scarcity and containing recommendations designed to bring
it to an end. A representative of the member whose currency is involved
shall participate in the preparation of the report.
SEC. 2. Measures to replenish the fund's holdings of scarce currencies.
-The Fund may, if it deems such action appropriate to replenish
its holdings of any member's currency, take either or both of the
(i) Propose to the member that, on terms and conditions agreed
between the Fund and the member, the latter lend its currency to
the Fund or that, with the approval of the member, the Fund borrow
such currency from some other source either within or outside the
territories of the member, but no member shall be under any obligation
to make such loans to the Fund or to approve the borrowing of its
currency by the Fund from any other source.
(ii) Require the member to sell its currency to the Fund for gold.
SEC. 3. Scarcity of the Fund's holdings. -
(a) If it becomes evident to the Fund that the demand for a member's
currency seriously threatens the Fund's ability to supply that currency,
the Fund, whether or not it has issued a report under Section 1
of this Article, shall formally declare such currency scarce and
shall thenceforth apportion its existing and accruing supply of
the scarce currency with due regard to the relative needs of members,
the general international economic situation, and any other pertinent
considerations. The Fund shall also issue a report concerning its
(b) A formal declaration under (a) above shall operate as an authorization
to any member, after consultation with the Fund, temporarily to
impose limitations on the freedom of exchange operations in the
scarce currency. Subject to the provisions of Article IV, Sections
3 and 4, the member shall have complete jurisdiction in determining
the nature of such limitations, but they shall be no more restrictive
than is necessary to limit the demand for the scarce currency to
the supply held by, or accruing to, the member in question; and
they shall be relaxed and removed as rapidly as conditions permit.
(c) The authorization under (b) above shall expire whenever the
Fund formally declares the currency in question to be no longer
SEC. 4. Administration of restrictions. -Any member imposing restrictions
in respect of the currency of any other member pursuant to the provisions
of Section 3 (b) of this Article shall give sympathetic consideration
to any representations by the other member regarding the administration
of such restrictions.
SEC. 5. Effect of other international agreements on restrictions.
-Members agree not to invoke the obligations of any engagements
entered into with other members prior to this Agreement in such
a manner as will prevent the operation of the provisions of this
ARTICLE VIII. GENERAL OBLIGATIONS OF MEMBERS
SECTION 1. Introduction. -In addition to the obligations assumed
under other articles of this Agreement, each member undertakes the
obligations set out in this Article.
SEC. 2. Avoidance of restrictions on current payments. -
(a) Subject to the provisions of Article VII, Section 3 (b), and
Article XIV, Section 2, no member shall, without the approval of
the Fund, impose restrictions on the making of payments and transfers
for current international transactions.
(b) Exchange contracts which involve the currency of any member
and which are contrary to the exchange control regulations of that
member maintained or imposed consistently with this Agreement shall
be unenforceable in the territories of any member. In addition,
members may, by mutual accord, co-operate in measures for the purpose
of making the exchange control regulations of either member more
effective, provided that such measures and regulations are consistent
with this Agreement.
SEC. 3. Avoidance of discriminatory currency practices. -No member
shall engage in, or permit any of its fiscal agencies referred to
in Article V, Section 1, to engage in, any discriminatory currency
arrangements or multiple currency practices except as authorized
under this Agreement or approved by the Fund. If such arrangements
and practices are engaged in at the date when this Agreement enters
into force the member concerned shall consult with the Fund as to
their progressive removal unless they are maintained or imposed
under Article XIV, Section 2, in which case the provisions of Section
4 of that Article shall apply.
SEC. 4. Convertibility of foreign held balances. -(a) Each member
shall buy balances of its currency held by another member if the
latter, in requesting the purchase, represents (i) that the balances
to be bought have been recently acquired as a result of current
(ii) that their conversion is needed for making payments for current
transactions. The buying member shall have the option to pay either
in the currency of the member making the request or in gold.
(b) The obligation in (a) above shall not apply
(i) when the convertibility of the balances has been restricted
consistently with Section 2 of this Article, or Article VI, Section
(ii) when the balances have accumulated as a result of transactions
effected before the removal by a member of restrictions maintained
or imposed under Article XIV, Section 2; or
(iii) when the balances have been acquired contrary to the exchange
regulations of the member which is asked to buy them; or
(iv) when the currency of the member requesting the purchase has
been declared scarce under Article VII, Section 3 (a); or
(v) when the member requested to make the purchase is for any
reason not entitled to buy currencies of other members from the
Fund for its own currency.
SEC. 5. Furnishing of information. -
(a) The Fund may require members to furnish it with such information
as it deems necessary for its operations, including, as the minimum
necessary for the effective discharge of the Fund's duties, national
data on the following matters:
(i) Official holdings at home and abroad, of (1) gold, (2) foreign
(ii) Holdings at home and abroad by banking and financial agencies,
other than official agencies, of (1) gold, (2) foreign exchange.
(iii) Production of gold.
(iv) Gold exports and imports according to countries of destination
(v) Total exports and imports of merchandise, in terms of local
currency values, according to countries of destination and origin.
(vi) International balance of payments, including (1) trade in
goods and services, (2) gold transactions, (3) known capital transactions,
and (4) other items.
(vii) International investment position, i. e., investments within
the territories of the member owned abroad and investments abroad
owned by persons in its territories so far as it is possible to
furnish this information.
(viii) National income.
(ix) Price indices, i. e., indices of commodity prices in wholesale
and retail markets and of export and import prices.
(x) Buying and selling rates for foreign currencies.
(xi) Exchange controls, i. e., a comprehensive statement of exchange
controls in effect at the time of assuming membership in the Fund
and details of subsequent changes as they occur.
(xii) Where official clearing arrangements exist, details of amounts
awaiting clearance in respect of commercial and financial transactions,
and of the length of time during which such arrears have been outstanding.
(b) In requesting information the Fund shall take into consideration
the varying ability of members to furnish the data requested. Members
shall be under no obligation to furnish information in such detail
that the affairs of individuals or corporations are disclosed. Members
undertake, however, to furnish the desired information in as detailed
and accurate a manner as is practicable, and, so far as possible,
to avoid mere estimates.
(c) The Fund may arrange to obtain further information by agreement
with members. It shall act as a centre for the collection and exchange
of information on monetary and financial problems, thus facilitating
the preparation of studies designed to assist members in developing
policies which further the purposes of the Fund.
SEC. 6. Consultation between members regarding existing international
agreements. - Where under this Agreement a member is authorized
in the special or temporary circumstances specified in the Agreement
to maintain or establish restrictions on exchange transactions,
and there are other engagements between members entered into prior
to this Agreement which conflict with the application of such restrictions,
the parties to such engagements will consult with one another with
a view to making such mutually acceptable adjustments as may be
necessary. The provisions of this Article shall be without prejudice
to the operation of Article VII, Section 5.
ARTICLE XIII. OFFICES AND DEPOSITORIES
SECTION 1. Location of offices. -The principal office of the Fund
shall be located in the territory of the member having the largest
quota, and agencies or branch offices may be established in the
territories of other members.
SEC. 2. Depositories. -
(a) Each member country shall designate its central bank as a
depository for all the Fund's holdings of its currency, or if it
has no central bank it shall designate such other institution as
may be acceptable to the Fund.
(b) The Fund may hold other assets, including gold, in the depositories
designated by the five members having the largest quotas and in
such other designated depositories as the Fund may select. Initially,
at least one-half of the holdings of the Fund shall be held in the
depository designated by the member in whose territories the Fund
has its principal office and at least forty percent shall be held
in the depositories designated by the remaining four members referred
to above. However, all transfers of gold by the Fund shall be made
with due regard to the costs of transport and anticipated requirements
of the Fund. In an emergency the Executive Directors may transfer
all or any part of the Fund's gold holdings to any place where they
can be adequately protected.
SEC. 3. Guarantee of the Fund's assets. -Each member guarantees
all assets of the Fund against loss resulting from failure or default
on the part of the depository designated by it.
ARTICLE XIV. TRANSITIONAL PERIOD
SECTION 1. Introduction. -The Fund is not intended to provide
facilities for relief or reconstruction or to deal with international
indebtedness arising out of the war.
SEC. 2. Exchange restrictions. -In the post-war transitional period
members may, notwithstanding the provisions of any other articles
of this Agreement, maintain and adapt to changing circumstances
(and, in the case of members whose territories have been occupied
by the enemy, introduce where necessary) restrictions on payments
and transfers for current international transactions. Members shall,
however, have continuous regard in their foreign exchange policies
to the purposes of the Fund; and, as soon as conditions permit,
they shall take all possible measures to develop such commercial
and financial arrangements with other members as will facilitate
international payments and the maintenance of exchange stability.
In particular, members shall withdraw restrictions maintained or
imposed under this Section as soon as they are satisfied that they
will be able, in the absence of such restrictions, to settle their
balance of payments in a manner which will not unduly encumber their
access to the resources of the Fund.
SEC. 3. Notification to the Fund. -Each member shall notify the
Fund before it becomes eligible under Article XX, Section 4 (c)
or (d), to buy currency from the Fund, whether it intends to avail
itself of the transitional arrangements in Section 2 of this Article,
or whether it is prepared to accept the obligations of Article VIII,
Sections 2, 3, and 4. A member availing itself of the transitional
arrangements shall notify the Fund as soon thereafter as it is prepared
to accept the above-mentioned obligations.
SEC. 4. Action of the Fund relating to restrictions. -Not later
than three years after the date on which the Fund begins operations
and in each year thereafter, the Fund shall report on the restrictions
still in force under Section 2 of this Article. Five years after
the date on which the Fund begins operations, and in each year thereafter,
any member still retaining any restrictions inconsistent with Article
VIII, Sections 2, 3, or 4, shall consult the Fund as to their further
retention. The Fund may, if it deems such action necessary in exceptional
circumstances, make representations to any member that conditions
are favorable for the withdrawal of any particular restriction,
or for the general abandonment of restrictions, inconsistent with
the provisions of any other article of this Agreement. The member
shall be given a suitable time to reply to such representations.
If the Fund finds that the member persists in maintaining restrictions
which are inconsistent with the purposes of the Fund, the member
shall be subject to Article XV, Section 2 (a).
SEC. 5. Nature of transitional period. -In its relations with
members, the Fund shall recognize that the post-war transitional
period will be one of change and adjustment and in making decisions
on requests occasioned thereby which are presented by any member
it shall give the member the benefit of any reasonable doubt.
ARTICLE XX. FINAL PROVISIONS
SECTION 1. Entry into force. -This Agreement shall enter into
force when it has been signed on behalf of governments having sixty-five
percent of the total of the quotas set forth in Schedule A and when
the instruments referred to in Section 2 (a) of this Article have
been deposited on their behalf, but in no event shall this Agreement
enter into force before May 1, 1945.
SEC. 2. Signature. -
(a) Each government on whose behalf this Agreement is signed shall
deposit with the Government of the United States of America an instrument
setting forth that it has accepted this Agreement in accordance
with its law and has taken all steps necessary to enable it to carry
out all of its obligations under this Agreement.
(b) Each government shall become a member of the Fund as from
the date of the deposit on its behalf of the instrument referred
to in (a) above, except that no government shall become a member
before this Agreement enters into force under Section 1 of this
(c) The Government of the United States of America shall inform
the governments of all countries whose names are set forth in Schedule
A, and all governments whose membership is approved in accordance
with Article II, Section 2, of all signatures of this Agreement
and of the deposit of all instruments referred to in (a) above.
(d) At the time this Agreement is signed on its behalf, each government
shall transmit to the Government of the United States of America
one one-hundredth of one percent of its total subscription in gold
or United States dollars for the purpose of meeting administrative
expenses of the Fund. The Government of the United States of America
shall hold such funds in a special deposit account and shall transmit
them to the Board of Governors of the Fund when the initial meeting
has been called under Section 3 of this Article. If this Agreement
has not come into force by December 31, 1945, the Government of
the United States of America shall return such funds to the governments
that transmitted them.
(e) This Agreement shall remain open for signature at Washington
on behalf of the governments of the countries whose names are set
forth in Schedule A until December 31, 1945.
(f) After December 31, 1945, this Agreement shall be open for
signature on behalf of the government of any country whose membership
has been approved in accordance with Article II, Section 2.
(g) By their signature of this Agreement, all governments accept
it both on their own behalf and in respect of all their colonies,
overseas territories, all territories under their protection, suzerainty,
or authority and all territories in respect of which they exercise
(h) In the case of governments whose metropolitan territories
have been under enemy occupation, the deposit of the instrument
referred to in (a) above may be delayed until one hundred eighty
days after the date on which these territories have been liberated.
If, however, it is not deposited by any such government before the
expiration of this period the signature affixed on behalf of that
government shall become void and the portion of its subscription
paid under (d) above shall be returned to it.
(i) Paragraphs (d) and (h) shall come into force with regard to
each signatory government as from the date of its signature.
SEC. 3. Inauguration of the fund. -
(a) As soon as this Agreement enters into force under Section
1 of this Article, each member shall appoint a governor and the
member having the largest quota shall call the first meeting of
the Board of Governors.
(b) At the first meeting of the Board of Governors, arrangements
shall be made for the selection of provisional executive directors.
The governments of the five countries for which the largest quotas
are set forth in Schedule A shall appoint provisional executive
directors. If one or more of such governments have not become members,
the executive directorships they would be entitled to fill shall
remain vacant until they become members, or until January 1, 1946,
whichever is the earlier. Seven provisional executive directors
shall be elected in accordance with the provisions of Schedule C
and shall remain in office until the date of the first regular election
of executive directors which shall be held as soon as practicable
after January 1, 1946.
(c) The Board of Governors may delegate to the provisional executive
directors any powers except those which may not be delegated to
the Executive Directors.
SEC. 4. Initial determination of par values. -
(a) When the Fund is of the opinion that it will shortly be in
a position to begin exchange transactions, it shall so notify the
members and shall request each member to communicate within thirty
days the par value of its currency based on the rates of exchange
prevailing on the sixtieth day before the entry into force of this
Agreement. No member whose metropolitan territory has been occupied
by the enemy shall be required to make such a communication while
that territory is a theater of major hostilities or for such period
thereafter as the Fund may determine. When such a member communicates
the par value of its currency the provisions of (d) below shall
(b) The par value communicated by a member whose metropolitan
territory has not been occupied by the enemy shall be the par value
of that member's currency for the purposes of this Agreement unless,
within ninety days after the request referred to in (a) above has
been received, (i) the member notifies the Fund that it regards
the par value as unsatisfactory, or (ii) the Fund notifies the member
that in its opinion the par value cannot be maintained without causing
recourse to the Fund on the part of that member or others on a scale
prejudicial to the Fund and to members. When notification is given
under (i) or (ii) above, the Fund and the member shall, within a
period determined by the Fund in the light of all relevant circumstances,
agree upon a suitable par value for that currency. If the Fund and
the member do not agree within the period so determined, the member
shall be deemed to have withdrawn from the Fund on the date when
the period expires.
(c) When the par value of a member's currency has been established
under (b) above, either by the expiration of ninety days without
notification, or by agreement after notification, the member shall
be eligible to buy from the Fund the currencies of other members
to the full extent permitted in this Agreement, provided that the
Fund has begun exchange transactions.
(d) In the case of a member whose metropolitan territory has been
occupied by the enemy, the provisions of (b) above shall apply,
subject to the following modifications:
(i) The period of ninety days shall be extended so as to end on
a date to be fixed by agreement between the Fund and the member.
(ii) Within the extended period the member may, if the Fund has
begun exchange transactions, buy from the Fund with its currency
the currencies of other members, but only under such conditions
and in such amounts as may be prescribed by the Fund.
(iii) At any time before the date fixed under (i) above, changes
may be made by agreement with the Fund in the par value communicated
under (a) above.
(e) If a member whose metropolitan territory has been occupied
by the enemy adopts a new monetary unit before the date to be fixed
under (d) (i) above, the par value fixed by that member for the
new unit shall be communicated to the Fund and the provisions of
(d) above shall apply.
(f) Changes in par values agreed with the Fund under this Section
shall not be taken into account in determining whether a proposed
change falls within (i), (ii), or (iii) of Article IV, Section 5
(g) A member communicating to the Fund a par value for the currency
of its metropolitan territory shall simultaneously communicate a
value, in terms of that currency, for each separate currency, where
such exists, in the territories in respect of which it has accepted
this Agreement under Section 2 (g) of this Article, but no member
shall be required to make a communication for the separate currency
of a territory which has been occupied by the enemy while that territory
is a theater of major hostilities or for such period thereafter
as the Fund may determine. On the basis of the par value so communicated,
the Fund shall compute the par value of each separate currency.
A communication or notification to the Fund under (a), (b) or (d)
above regarding the par value of a currency, shall also be deemed,
unless the contrary is stated, to be a communication or notification
regarding the par value of all the separate currencies referred
to above. Any member may, however, make a communication or notification
relating to the metropolitan or any of the separate currencies alone.
If the member does so, the provisions of the preceding paragraphs
(including (d) above, if a territory where a separate currency exists
has been occupied by the enemy) shall apply to each of these currencies
(h) The Fund shall begin exchange transactions at such date as
it may determine after members having sixty-five percent of the
total of the quotas set forth in Schedule A have become eligible,
in accordance with the preceding paragraphs of this Section, to
purchase the currencies of other members, but in no event until
after major hostilities in Europe have ceased.
(i) The Fund may postpone exchange transactions with any member
if its circumstances are such that, in the opinion of the Fund,
they would lead to use of the resources of the Fund in a manner
contrary to the purposes of this Agreement or prejudicial to the
Fund or the members.
(j) The par values of the currencies of governments which indicate
their desire to become members after December 31, 1945, shall be
determined in accordance with the provisions of Article II, Section
Done at Washington, in a single copy which shall remain deposited
in the archives of the Government of the United States of America,
which shall transmit certified copies to all governments whose names
are set forth in Schedule A and to all governments whose membership
is approved in accordance with Article II, Section 2.
SCHEDULE A. QUOTAS
[In millions of United States dollars]
|Union of South Africa
|Union of Soviet Socialist Republics
1 The quota of Denmark shall be determined by the Fund after the
Danish Government has declared its readiness to sign this Agreement
but before signature takes place.
* * *