DEVELOPMENT ASPIRATIONS IN EAST ASIA
The international development provisions of the Bretton Woods agreements enjoyed backing that extended well beyond the US–Latin American partnership, including from two countries in East Asia that attended the Bretton Woods conference: China and the Philippines. These two countries were in fact the only representatives of the East Asian region at Bretton Woods. A few weeks before the start of the conference, Chinese officials had asked whether Korea could be represented or at least attend as an observer. White liked the suggestion but had to check with the State Department, after which the idea appears to have been dropped.
1
The role of the Dutch East Indies (Indonesia) also became the subject of an interesting discussion within the US delegation at the conference itself after the Dutch invoked their colony’s trade to justify their request for a larger quota in the Fund.
2
To prevent any perception of endorsing Dutch colonial rule, one US delegate—New York Democratic senator Robert Wagner—wondered whether separate quotas should be created for the Dutch and their colony. Others argued, however, that this idea—which was relevant to other colonial powers too—would result in a major political row, and Collado noted that the United States had already set the scene by inviting the Netherlands and not its colony. To address the fact that the quota size of countries such as the Netherlands and Belgium was completely unjustifiable without their colonies, another proposal was then discussed to create an explicit provision for members’ quotas to be broken up in the event of loss of colonies.
3
Even this idea raised political concerns, however, and Acheson suggested that the whole issue be ignored because “nobody will bother about it at all unless we raise it.”
4
In the end, Morgenthau insisted the delegation keep quiet about the discussion and they agreed to explore the second idea further, but it was soon abandoned.
In spite of being the only East Asian representatives at the negotiations, China and the Philippines demonstrated well two distinct ways in which Southern policymakers backed the development content of Bretton Woods, each of which we have already witnessed in the Latin American context. In China’s case, this support was expressed vocally during the negotiations themselves by the Kuomintang (KMT) government that represented China. China’s role in the creation of the Bretton Woods system has received little attention in existing academic literature.
5
Indeed, China does not even appear in the index of Gardner’s classic account of the Bretton Woods negotiations.
6
This neglect is strange since Chinese representatives were actively involved in the negotiations. It was even one of the few countries to prepare a formal alternative to the Keynes and White plans in 1943 (the others were Canada, France, and Norway), and it brought the second largest delegation after that of the United States to the Bretton Woods conference itself.
7
For the purposes of this book, China’s role in the Bretton Woods negotiations was particularly significant because of its advocacy of international development goals.
The support of Philippine policymakers for the development content of Bretton Woods took a different form. They played little role in the actual negotiations. After the conference, however, Philippine officials made clear their enthusiasm for the kind of development-oriented monetary reforms that Triffin had advocated in Latin America as part of building the new Bretton Woods order. Like many of their Latin American counterparts, Philippine policymakers saw these reforms as conducive to their state-led development and industrialization goals. As in Latin America, officials from the US Federal Reserve also backed the reforms and associated them with the broader Bretton Woods framework.
China and Bretton Woods
The scholarly neglect of China’s role in the Bretton Woods negotiations is no doubt largely a product of the fact that mainland China ceased to be part of the Bretton Woods system after the communist revolution of 1949, and did not resume membership in the Bretton Woods institutions until 1980. At the time of the negotiations, however, China was seen as a significant player in the construction of the postwar international financial order because Roosevelt viewed the country as one of four great powers, along with Britain and the USSR, that would help to govern the postwar world.
8
As a result, when US officials in July 1942 chose an inner circle of countries that would be consulted on early drafts of White’s proposals, China was included in it.
9
Archival records also suggest that US officials initially hoped that China and the USSR would be signatories of the April 1944 Joint Statement, although it appears as though there was not enough time for consultations with the two countries to take place.
10
At the Bretton Woods conference itself, China also received the fourth largest quota and voting share in the Bretton Woods institutions (behind the United States, Britain, and the USSR), thereby guaranteeing it a seat on the executive boards of these bodies.
The Chinese government was far from a passive participant in the Bretton Woods negotiations. Its officials expressed strong views about the content of the postwar international financial order. Particularly prominent was their desire to see a commitment to international development incorporated within it. We have seen how Latin American proposals for development-oriented international financial institutions predated the Bretton Woods negotiations. In their contributions to the Bretton Woods discussions, Chinese policymakers drew on even earlier ideas put forward by the famous Chinese political leader Sun Yat-sen.
Sun Yat-sen’s Thought
More than two decades before the inter-American negotiations for the IAB began, Sun had written
International Development of China
, which outlined in some detail the need for an “International Development Organization” to increase the standard of living of the Chinese people through the provision of foreign capital, technology, and expertise.
11
Sun’s proposal deserves attention because it highlights how the inter-American system was not the only incubator of the idea of international development institution. Indeed, because of the early timing of his ideas, Sun deserves the title of pioneer of the concept of “international development” more than any other figure examined in this book. His views are also important because they formed the basis of Chinese official engagement with the Bretton Woods negotiations.
Sun Yat-sen had emerged as a major figure in Chinese politics through his efforts to overthrow the emperor during the years leading up to the 1911 Revolution and his subsequent brief role as provisional president. In the ensuing political upheavals and creation of rival governments in different parts of the country, he had fled into exile, but then reemerged as a significant politician after returning to China in 1917 and resurrecting his political party, the Kuomintang. Sun Yat-sen published
International Development of China
in 1918 at the end of World War I when he was in Shanghai.
12
Sun had long been deeply committed to the economic modernization and strengthening of China as part of his broader philosophy of supporting the “people’s livelihood.” The latter concept drew on classical Chinese economic ideas and Sun associated it with government responsibility to help provide the “Four Great Necessities of the People—food, clothing, shelter and means of travel.”
13
In historian Margherita Zanasi’s words, the “people’s livelihood” principle was “ultimately a socialist goal which implied state intervention, restriction of private capital, and the building of state capital.”
14
But Sun felt that the modernization of China could not be achieved without international assistance because of the magnitude of the challenge involved. While China had not even entered the first industrial revolution, he noted that the United States and Europe had already reached the second. As Sun put it, “so China has to begin the two stages of industrial evolution at once.” In order to leapfrog into the modern age, he argued that China needed foreign capital, expertise and machinery to help with the development of railways, roads, canals, ports, modern cities with public utilities, water power, irrigation, reforestation, iron and steel works, cement plants, mining, agriculture, and the “colonization in Manchuria, Mongolia, Sinkiang, Kokonor, and Thibet.”
15
In specific terms, Sun proposed that “the various Governments of the Capital-supplying Powers must agree to joint action and a unified policy to form an International Organization” that would formulate plans and then negotiate a formal contract with the Chinese government for investing in the development work. The contract would specify how foreign loans would be repaid, but it would also outline that “the property thus created will be state owned and will be managed for the benefit of the whole nation.” Because he was critical of how foreign bankers in the past had often “entirely disregarded the will of the Chinese people,” he argued that the “enthusiastic support” of the people had to be secured before negotiations even took place between the international organization and the Chinese government. As he put it, “in my International Development Scheme, I intend to make all the national industries of China into a Great Trust owned by the Chinese people, and financed with international capital for mutual benefit.”
16
Sun stated that his proposal built on his experience of negotiating a contract in 1913 with the Pauling Company of London for the construction of a railway. By channeling foreign support through an intergovernmental organization, Sun argued, the kinds of imperialist rivalries and spheres of influence that had afflicted China in the past could be avoided. Indeed, by preventing a future war from breaking out over China, Sun suggested, his proposed “international development scheme” would promote world peace and become “the keystone in the arch of the League of Nations.”
17
Sun argued that China’s development would also benefit rich countries by serving as an outlet for their surplus capital and providing a growing Chinese market for their products as their war industries converted to peacetime purposes.
Several scholars have commented on the innovative nature of Sun’s ideas. In his history of development thinking, Arndt argues that Sun Yat-sen was the first to advocate “economic development” in the modern sense of term.
18
C. Martin Wilbur also observes regarding Sun’s plans that “there is a far-sighted and modern quality to the thought which underlay them: the modernization of an underdeveloped country through cooperative foreign efforts.”
19
In some ways, Sun’s proposal for an “International Development Organization” can be seen as a kind of forerunner to the IAB and IBRD initiatives. He seemed, however, to imagine an intergovernmental organization with only the “capital-supplying powers” as members. In this sense, the plan was in fact closer to Riefler’s 1941 proposal for the United States and Britain to create an organization that could grant charters to enterprises undertaking development projects (see chapter 4).
Although Sun’s ideas were pioneering, they were also ahead of their time. The help that he sought from the League was not forthcoming despite his efforts to send his plans to the 1919 Paris Peace Conference as well as to US, British, and Italian officials.
20
The refusal of the US government to back Sun was particularly important because of America’s position as the world’s major creditor after the war. When Sun first approached American officials, the latter did not take him seriously because he had no government position at the time. When he became head of a military government in South China (based in Canton) in May 1921, relations became worse rather than better because US government officials considered him a rebel against the existing Chinese government in Beijing that they recognized. United States policymakers even actively thwarted Sun’s efforts to secure private economic assistance in the United States. When Sun failed to secure financial support from other Western powers as well, he turned in 1922 for help to the Soviet Union despite his lack of enthusiasm for Marxist ideas.
21
Although Sun failed to attract official Western support for his plan before his death in 1925, his ideas garnered attention abroad and help to inspire interest in international development. The prominent US advocate of international development, Eugene Staley, declared that Sun’s book was a template for his own ideas about the need for a UN Development Authority.
22
Sun’s ideas also likely encouraged League of Nations technical assistance missions to China in the 1930s that focused on various issues such as agricultural development, public health, education, and transportation.
23
These missions emerged from a 1931 agreement that the League signed with the KMT government that had come to reunify much of the country by the late 1920s under the leadership of Sun’s successor, Chiang Kai-shek.
24
Indeed, Sun’s ideas about economic development were very popular with Chiang and his government. As Zanasi points out, his concept of the four great necessities of the people became “one of the tropes of political legitimacy favored by the Nationalists” during the 1930s.
25
When the KMT government developed plans during World War II for the country’s postwar economy, it also drew directly on Sun’s plans for state-led economic development backed by foreign capital, technology, and expertise. At an important September 1943 meeting of the KMT’s Central Executive Committee, resolutions were passed that committed the government to international collaboration to realize Sun’s economic program.
26
As one British observer noted in 1945, Sun’s 1918 book was “frequently quoted by Chinese economists and officials” at the time.
27
Like their counterparts in other poor regions of the world, Chinese analysts and officials saw industrialization as a particular imperative. As economics professor (and subsequent member of China’s delegation to Bretton Woods) Choh-Ming Li put it in 1943, “only by industrializing the country will the living standard of the people be appreciably raised and the economic strength of the nation rapidly developed.” Like Sun, Li also emphasized that “all post-war foreign investments in the country must be purged of ‘imperialistic’ motives. Foreign lending as a means of economic or political exploitation will no longer find any place in China—or, for that matter, let us hope, anywhere else in the world.”
28
The Chinese at Bretton Woods
Sun’s ideas heavily informed the Chinese government’s policy toward the Bretton Woods negotiations. This policy was shaped by a small circle of the KMT elite that was attempting to govern China in the early 1940s in the face of the Communist challenge to its rule and the Japanese invasion of the country. After retreating in the face of the Japanese, the government had established a provisional capital at Chungking in 1937. By the time of the Bretton Woods conference itself, Japan’s Ichigo Offensive, launched in April of 1944, had weakened Chiang enormously as the invaders conquered large swaths of territory and threatened to take Chungking itself.
China’s need for US support in this situation may help to explain the large size of its delegation at Bretton Woods. The United States had been providing financial assistance to the Chinese government since late 1938 because of the security situation in Asia, including an unconditional loan of $500 million that was extended after the United States entered the war. By 1944, however, the confidence of US policymakers in Chiang’s government was waning in the face of the gravity of the military situation and growing concerns about government waste and corruption associated with US loans and payments for the costs of US forces in China.
29
White, who had been a strong backer of financial assistance to China since the late 1930s, was among those with growing concerns.
30
The leader of the Chinese delegation to the Bretton Woods conference, Hsiang-Hsi Kung, was very conscious of the need to be cultivating US goodwill. At this time, Kung was in the powerful position of being both minister of finance and head of the central bank. Educated in the United States at Oberlin and Yale, Kung had long been Chiang’s close colleague as well as his brother-in-law (as well as of Sun Yat-sen, because all three had married daughters of Charlie Soong). Kung and his family were widely considered in China at the time to be quite corrupt and US officials observed that he was under considerable pressure at the conference to perform well because of his various enemies.
31
During the Atlantic City and Bretton Woods conferences, Kung instructed his officials not to offend White or other US policymakers by pressing too hard on specific issues because of China’s need for US support.
32
Indeed, in the middle of the Bretton Woods meeting, he even held discussions with US officials on the contentious topic of payments for US military spending in China.
33
Near the start of the Bretton Woods meeting, Kung made a point of emphasizing China’s development goals and their links to the broader goals of the conference. In a formal statement to the press, he declared: “China is looking forward to a period of great economic development and expansion after the war. This includes a large-scale program of industrialization, besides the development and modernization of agriculture. It is my firm conviction that an economically strong China is an indispensible condition to the maintenance of peace and the improvement of well-being of the world.” Kung then reminded his audience of Sun Yat-sen’s proposal: “After the first World War, Dr. Sun Yat-sen proposed a plan for what he termed ‘the international development of China.’ He emphasized the principle of cooperation with friendly nations and utilization of foreign capital for the development of China’s resources. Dr. Sun’s teaching constituted the basis of China’s national policy. America and others of the United Nations, I hope, will take an active part in aiding the post-war development of China.”
34
In a speech a few days later at the conference, he also assured his audience that China’s ambitious development plans were designed not “to compete with other industrial countries of the world but for the purpose of raising the standard of living of our people.” Like Sun, he noted that China’s development would contribute to “world prosperity through the opening of new opportunities for trade” as well as help China “play an important part in helping to stabilize conditions in the Far East and the world.”
35
Given these goals, it was not surprising that Chinese officials had been strong supporters of the Bretton Woods negotiations from the start. When the Chinese government received the initial 1943 White and Keynes plans, the initiatives had been welcomed as a potential source of financial assistance.
36
But the Chinese ministry of finance had also pointed out in April 1943 that “neither plan gives sufficient consideration to the development of industrially weak nations,” and other Chinese analysts had concurred.
37
At a meeting discussing the international monetary plans on May 21, Tsu-yee Pei of the Bank of China (who would be a member of China’s Bretton Woods delegation) suggested that China should present its views and those of the weaker countries before the United States and Britain finalized their plans. He argued that it might be difficult for China to present its case unless it could rally the support of weaker countries and surmised that perhaps “it may be necessary for China, as one of the four great powers, to be the leader of the undeveloped countries.” Kung agreed that China “should speak for the weaker powers” and that any propositions it had to make should be made before the final agreement was reached.
38
Support quickly emerged for the idea of presenting an alternative Chinese plan that could both highlight the country’s distinctive concerns and help to contribute to a reconciliation of the Keynes and White plans.
The Chinese Plan for an International Fund
Interestingly, the lead role in drafting this plan fell to an American, Arthur Young, who had been a student of Kemmerer’s and had been employed as a financial adviser to the Chinese government since 1929. He had been asked to study the Keynes and White plans and make recommendations, and had submitted some draft proposals on international monetary arrangements on May 18.
39
Because of his earlier involvement with the League’s stabilization loans to Austria and Hungary after World War I, Young’s initial reaction to the White plan in early May had been that it was “all wrong in suggesting that fixed exchange is the starting point, rather than the reform of individual situations largely by internal action but with external aid.”
40
He now worked closely with Kung and various Chinese experts to produce on June 9 a formal plan for an international fund that incorporated various ideas that had been raised in the Chinese internal discussions.
41
On June 15, Kung asked for the plan to be transmitted to the State Department, although an accompanying memo warned that the Chinese Government was “not necessarily committed” to it.
42
The plan and memo also formed the basis of the instructions Kung gave to four Chinese officials—Te-mou Hsi, Ping-Wen Kuo, Kuo-Ching Li, and Ts-Liang Soong—who attended White’s consultations in Washington in mid-June (and who would all become Chinese delegates to Bretton Woods).
43
These Chinese documents highlighted well the link that Chinese officials drew between their development goals and plans for the postwar international financial system. To begin with, the memo noted approvingly that both the White and the Keynes plans had referred to the need for international development loans. While recognizing that the “medium and long term provision of capital may well be discussed separately from monetary arrangements,” the Chinese government stated that it “would stress the very great importance to China of provision of capital and its close bearing upon the satisfactory working of any plan for monetary rehabilitation and stabilization.”
44
When they met for a bilateral meeting with White on June 18, 1943, Chinese officials also noted that “Dr Kung felt that discussions on the International Bank and the International Fund should be held simultaneously. This would give some assurance that the matter of long-term capital needs were being taken care of as well as short-term needs for current account.”
45
Other Chinese officials were even developing ideas of their own at this time for the creation of international development lending institutions. For example, at the May 21 meeting in China where Chinese officials and experts had discussed international monetary plans, the vice minister of finance, Yee-Chun Koo (who would also join China’s Bretton Woods delegation), had proposed the creation of an “International Reconstruction Finance Corporation” which (among other things) would encourage investments in “various relatively undeveloped countries” as well as hold commodities “to prevent wide fluctuation of prices of commodities of the world.”
46
In their specific proposal for a monetary fund, the Chinese also stressed their distinctive needs for external financial assistance. They outlined a formal draft of a “United and Associated Nations Fund for Monetary Rehabilitation and Stabilization.”
47
While the “stabilization” role of the Fund was similar to that of Keynes’s ICU and White’s Stabilization Fund, the “rehabilitation” function was more distinctive, reflecting China’s urgent need for foreign help to help stabilize its currency. Young had in fact warned the Chinese government that it might be unable to become a full member of the proposed multilateral Fund because it was unlikely to be able to maintain a gold parity immediately after the war. In his view, China’s immediate priority should be to contain its acute inflationary pressures rather than draw up ambitious development plans. Chinese officials were unwilling to abandon their development ambitions, but they agreed with Young that the Anglo-American plans should be modified to address the problem of monetary rehabilitation.
48
Under the Chinese plan, countries whose monetary systems had been ”seriously disrupted by the war” could take advantage—subject to the agreement of the Board—of a “transitional period” in which they could request credits from the Fund but did not need to commit to currency convertibility at a fixed exchange rate.
49
Many other aspects of the plan drew upon or modified slightly key components of the Keynes and White plans, as the Chinese freely acknowledged.
50
For example, similar to White’s proposal, currency values were to be defined in terms of gold (thereby committing China to define its currency in gold for the first time) and exchange rates could not be changed without the agreement of the Fund’s board (although countries could unilaterally undertake a one-off devaluation if they had a large net debit balance over two years).
51
Chinese experts linked their advocacy of stable exchange rates to their development goals, pointing out that China would need a stable currency to attract foreign capital.
52
Echoing Keynes’s proposals, the Chinese plan also ensured that adjustment burdens were imposed not just on deficit countries but also on creditor countries such as the United States. Countries that had large debit balances in the Fund would be forced to pay a charge and accept its recommendations for restoring equilibrium, but countries with net credit balances would also face a (lesser) charge and have to undertake discussions with the Fund about measures to reduce their surpluses, including increasing “international lending.”
53
Chinese officials also favored the US and British plans concerning capital controls, particularly the provisions for cooperation which they hoped might help China to control outgoing flight capital. Under the Chinese proposal, each member of the Fund would be required “upon request, to cooperate with any other member nation that may regulate international capital movements.” Echoing the White plan, each member country could be asked “(1) to prohibit in its jurisdiction acquisition of deposits or other assets by nationals of any member nation imposing restrictions of capital transfers except upon authorization of the latter nation; (2) to furnish the Government of any member nation on request full information regarding such deposits and other assets; and (3) to consider such other measures as the Board may recommend.”
54
Although provisions for cooperative controls subsequently disappeared from US proposals, Chinese interest in the idea remained, particularly as public concern grew in the country about those who had sent money abroad during the war. This concern culminated in a resolution being passed at the May 1945 Sixth KMT Congress that requested the US government to provide the names of Chinese citizens holding capital in the United States and the amounts involved. The request was refused.
55
Further Chinese Input
Although Kung asked for the plan to be sent officially to the United States in mid-June, it was not delivered to the State Department and White until early September because of wartime transportation difficulties.
56
On reading it, one US official told White that the main new point was the provision for international monetary rehabilitation, and that he thought the idea of special treatment in the postwar transitional period might have some value, as long as it was not a cover to use the Fund for reconstruction lending.
57
Morgenthau subsequently wrote to Kung on September 14, noting that US technical experts “have indicated considerable interest in the views expressed in these proposals, particularly with regard to the desirability of giving special consideration to the needs of China and countries in a similar position.”
58
In subsequent meetings with White in the fall of 1943, Hsi and T.-L. Soong showed great interest in the progress of the proposal for the IBRD. After receiving the first public US draft in late November, they suggested that the Bank should be able to receive deposits in order to increase its available funds, a suggestion that White had endorsed in his earlier IAB proposal but now rejected.
59
Commentators in the Chinese press also called for more to be done to foster postwar long-term international development lending. Here, for example, are the comments of economist Chun-fan Ku published in a Chungking newspaper on September 5, 1943: “The lofty ideals of the Atlantic Charter should be the goal of mankind in post-war reconstruction and the development of world resources. Full economic cooperation requires that the investor countries should give whatever is in their power to give and the countries receiving the investments should have whatever they are in need of.”
60
When the Joint Statement on the Fund was published in Chungking in April 1944, T.-L. Soong expressed satisfaction that China’s proposal for a transition period—a provision that the UK and others had also pushed for—had been accepted.
61
In his public comments, Koo also linked the proposed Fund to development goals, arguing that its ultimate aim was to link up currencies and “to elevate the living standard of all peoples.” He pointed out that the Fund’s establishment “will necessitate the inflow of foreign capital into China to be utilized in opening up her natural resources and developing her foreign trade which will naturally raise the living standard of the Chinese people.”
62
But questions continued to be asked in the Chinese press about why more was not being done to address long-term development lending.
63
When Kung received a draft of the Joint Statement on the Fund, he also asked when a statement would be released about the Bank.
64
At a meeting a few weeks later, Hsi presented Bernstein with a memo from Chungking declaring that the IBRD proposal was “of very great importance to China” and asking whether the Bank could be authorized to engage in lending for “monetary rehabilitation” since the Fund was “not intended to adequately provide for this.”
65
White’s early drafts of the Bank had allowed this kind of lending, but the provision had been removed in internal US discussions because of domestic opposition.
66
Although Bernstein told Hsi that the Bank could lend only for specific projects, a clause was subsequently inserted in the Bank’s charter at the Bretton Woods conference that stated that “loans made or guaranteed by the Bank shall,
except in special circumstances
, be for the purpose of specific projects of reconstruction or development.”
67
The phrase “except in special circumstances” created a loophole that allowed the Bank’s board in March 1946 to agree that the IBRD could lend in special circumstances for reconstruction of monetary systems, including stabilization loans.
68
With the approval of the IBRD at the Bretton Woods conference, the Chinese delegation achieved one of their key objectives. Some foreign analysts also echoed their Chinese counterparts in seeing this as the realization of Sun’s 1918 proposal. As Austin Grey, writing in the United States–based
Far Eastern Survey,
put it just after the conference:
It is interesting to note that the Bank’s purposes, objectives, and methods of operation closely correspond with the pattern of foreign lending by economically more advanced countries, and of borrowing by those less advanced, proposed by the late Dr. Sun Yat-sen in “International Development of China.” The promotion of foreign investment and international trade, the development of productive resources and the raising of standards of living, as enunciated in Article I of the Articles of Agreement of the International Bank, admirably fit in with the goal of the third of the Three People’s Principles, the Principle of the People’s Livelihood. It will be a particular source of pride to foreign admirers of Dr. Sun Yat-sen, as well as to all Chinese, that a concrete scheme born out of the world’s exigencies at the “beginning of the end” of World War II should follow the lines laid down by the Father of the Chinese Republic in his brilliant diagnosis both of the world economic situation as it unfolded toward the end of World War 1 and of the respective needs of China and of the industrial countries of the West.
69
An influential American internationalist lobby group, the Commission to Study the Organization of Peace, described the Bretton Woods institutions more generally—along with the Hot Springs conference on food and agriculture issues and the United Nations Relief and Rehabilitation Administration—as “international mechanisms that will be needed to achieve what the great Chinese leader Sun Yat-sen once described as ‘the principle of livelihood’—what we now call ‘freedom from want.’”
70
The Fund’s final articles of agreement also included provisions that accorded with Chinese preferences such as the acceptance of capital controls and stable but adjustable exchange rates.
71
At the Bretton Woods conference, Young (who served as a “technical consultant” to China’s delegation) and Pei even succeeded in securing a provision that gave enemy-occupied countries some flexibility in determining initial par values.
72
Chinese policymakers were also particularly pleased that their country received the fourth largest quota in the Bretton Woods institutions, a goal they had sought from the very start. Because this standing was difficult to justify on economic grounds, US officials produced this outcome only through some very arbitrary adjustments of the quotas behind closed doors, a move that left countries such as France extremely annoyed.
73
Morgenthau noted privately to his US colleagues that China’s quota was “the most difficult to explain, and we did that for the magnificent fight they made for the last seven years!”
74
Although Chinese officials achieved many of their objectives at Bretton Woods, how much impact did they actually have on the outcomes? There is no doubt that they were actively involved in the negotiations. As Austin Grey declared at the time, “the peoples of the Far East are becoming more and more the subjects and less and less the objects of the historical process. This trend was recognized and reinforced at Bretton Woods.”
75
Their precise impact is difficult to judge in many instances because the provisions they backed also found support among other delegations. However, we can certainly conclude that China reinforced the case for including development issues within the Bretton Woods negotiations. At a deeper level, it is also important to recognize that Sun’s ideas helped build the intellectual case for international development. Although the Good Neighbor financial partnership played the critical role in generating many of the Bretton Woods development initiatives, Sun’s thinking and activism established a foundation for these initiatives two decades earlier.
As a final point, it is worth noting that the political commitment within China to the kind of international development project outlined by Sun was not restricted to the KMT leadership. US officials discovered just after the Bretton Woods conference that it was even shared by Chiang’s rival in China’s civil war, Mao Tse-tung. The Chinese Communist Party had its first official contact with the US government through a group of US military advisers who traveled to its headquarters in Yenan in July 1944, the very month of the Bretton Woods conference. At the time, Mao recognized that the United States would play a major postwar role in the region and he hoped to cultivate its trust in ways that might help check the KMT’s power.
76
According to a State Department official who spoke with him on August 23 1944, Mao expressed his strong support for postwar economic cooperation with the United States centered around the goal of Chinese economic development: “China
must
industrialize. This can be done—in China—only by free enterprise and with the aid of foreign capital. Chinese and American interests are correlated and similar…. We can and must work together.”
77
On November 14, 1944, a US Treasury official in China, Irving Friedman, received an invitation from another top Communist official, Chou En-lai, who was visiting Chungking secretly under US protection and who wished to convey a similar message to Morgenthau. According to Friedman, Chou noted that “with regard to China’s post-war position, her greatest economic need would be for foreign capital…. Moreover, China had to participate in international economic and financial organizations if she was to overcome her present backward state.”
78
Chou’s statement appeared to be confirmation of the Communist Party’s support for the development role of the Bretton Woods institutions and China’s participation in them. Along with Mao’s views, it highlighted the breadth of the support across the Chinese political spectrum at this time for the kind of vision that Sun had outlined in 1918.
Monetary Reformers in the Philippines
There is no question that Philippine officials had very little influence on the Bretton Woods negotiations. At the time of the Bretton Woods conference, the Philippines was under Japanese occupation, as it had been since May 1942. It was represented at the conference by officials from its Washington-based government-in-exile headed by President Quezón. After annexing the islands at the turn of the century, the United States had in 1934 transformed the Philippines into a self-governing commonwealth with full independence scheduled for 1946. The Japanese occupation had then encouraged the United States to promise immediate independence after liberation and to treat its government-in-exile in the same way as any independent government.
79
The Philippine government was initially overlooked, however, when Morgenthau first extended invitations to thirty-seven foreign governments to its mid-1943 consultations in Washington. When President Quezón read about the invitations in the newspaper from his room in the Shoreham Hotel in Washington, he wrote an irritated memo to Morgenthau reminding him that the Philippines was “a full-fledged member of the United Nations” and that the future Philippine Republic would “have full control on matters affecting its currency.”
80
Morgenthau quickly apologized for the oversight and sent an invitation to the Philippine minister of finance, Andrés Soriano.
81
Soriano was a member of the Philippine elite and a leading businessman with interests that ranged from the San Miguel Brewery to Philippine Airlines. He had also been a prominent supporter of the pro-Franco Falange movement, a fact that concerned many US officials.
82
Given White’s and Morgenthau’s strong antifascist views, it is difficult to imagine that they had much interest in hearing his opinions. In his initial consultations with White and other US officials in May 1943, Soriano indicated that the Philippine government was very much in favor of the US Fund proposal even though the Philippines was unlikely to require financial assistance because of the strength of its currency.
83
Soriano also participated in White’s mid-June 1943 consultation session with representatives of eighteen countries. The Philippines was then invited to participate in the Atlantic City conference, although the invitation came once again only after all the other attendees had been invited and Quezón had asked if extra countries could attend.
84
At the Bretton Woods conference itself, the small Philippine delegation led by Soriano made very little contribution to the discussions.
The Philippine Push for Monetary Reform
The commitment of Philippine officials to the Bretton Woods development vision became more apparent after independence and the election of Manuel Roxas as president in May 1946. Roxas was strongly committed to rapid import substitution industrialization and his administration saw domestic monetary reform as an important tool in achieving this goal. After annexation by the United States, the Philippines’ monetary system had been a gold exchange standard (that Kemmerer helped create in 1903) and then a dollar exchange standard after the United States left gold in 1933.
85
Now that the Philippines was independent, key officials in the Roxas administration—particularly the finance minister Miguel Cuaderno—wanted a central bank to more actively manage the country’s currency and credit to serve domestic needs as well as to make better use of the country’s foreign exchange reserves, including for deficit financing.
86
Cuaderno had in fact been interested in creating a central bank since the early 1930s to foster the Philippines’ economic growth and industrialization. After researching central banks around the world for many years, he had concluded that the Guatemalan central bank—established with Triffin’s help—should be the model for the Philippines because of the similar social and economic conditions of the two countries.
87
Cuaderno’s interest in a Philippine central bank in the 1930s had not been unique. The Philippine National Assembly had approved a proposal to establish a central bank in June 1939, only to withdraw the proposal when it became clear that the Roosevelt would not approve it. During the Japanese occupation in February 1944, another proposal for a powerful government-owned central bank had been passed by the Philippine legislature but without any follow-up.
88
In 1946–47, Cuaderno used his role as co-chair of a prominent US-Philippine Finance Commission to push once again for the creation of a central bank.
89
The commission had been set up to discuss the government’s growing fiscal deficits (which had become larger than US aid could cover) and options for monetary reform.
90
It included three Philippine members and three US members. Like Cuaderno, the other two Philippine members—Pio Pedrosa and Vicente Carmona—favored the creation of a central bank. President Roxas also urged the commission to recommend such an institution.
91
Two of the American members were also very supportive: Arthur Stuart from the Treasury and John Exter from the Federal Reserve.
92
Exter (another Harvard economics graduate) was particularly keen, and his arguments echoed those made by his Federal Reserve colleagues regarding Latin America. In his view, the most important role the central bank could perform was “to cushion the economy against unusual and extreme fluctuations in the balance of international payments.”
93
He thought the Philippine government should loosen the 100 percent reserve backing for the currency and be given the power to adjust the exchange rate and even impose exchange controls (the latter had apparently not been initially considered by Philippine officials).
94
Exter spent much of his time on the commission trying to persuade the more conservative US co-chair, Edgar Crossman, to support reform. Representing the State Department, Crossman was a New York lawyer who had served as legal adviser to a US governor general in the Philippines in the late 1920s. His views had been influenced by discussions with Randolph Burgess in New York and, after he arrived in the country, with the manager of the National City Bank’s local Philippine branch who had been an old friend. From these discussions, he had become concerned that any tampering with the monetary system, particularly at a time when the local government was experiencing fiscal deficits, might deter US investment in the Philippines and provoke capital flight.
95
At the last moment, however, Crossman relented and the commission recommended in its June 1947 report the appointment of a “central bank council” to prepare for the establishment of a central bank. Many of the commission’s specific recommendations were modeled on the Fed’s advice in Latin America. Indeed, Exter had requested in March 1947 that a copy of the Guatemalan law be sent to him.
96
The commission suggested that the central bank be government-owned and empowered to lend to the government and to direct credit to specific sectors to foster industrial growth. It also urged that the central bank be assigned wide discretionary power to manage the monetary system in order to serve domestic needs, and that the currency be backed by flexible foreign exchange reserve requirements. In keeping with the Bretton Woods rules, the commission also recommended that the country’s exchange rate could be adjusted and that the central bank should have the power to introduce exchange controls to contain capital flight.
97
United States Support for Reforms
The commission’s recommendations provoked some strong reactions. Burgess and representatives of other US banking interests opposed the recommendations vigorously.
98
Even years later, US business critics of the report argued that it had been “the work, on the one hand, of ‘New Deal’ planners and bureaucrats from the United States, and, on the other, of Filipino officials fascinated by the governmental financial and economic manipulations encouraged by the Keynesian school of economics.”
99
In the State Department, some officials were also concerned about the possibility of exchange controls, devaluation, and inappropriate political tampering with the currency.
100
But Federal Reserve Chairman Eccles was very much in favor of the commission’s recommendations. In a letter to Treasury Secretary John Snyder in April 1947 (copied to Burgess), he stated that he was in “thorough disagreement with some of the implications and assumptions” of Burgess’s views. In his view, US businesses would not be deterred from investing in the country by a flexible currency system, given the many profitable opportunities that existed there. He also emphasized the politics involved: “We may have to recognize that our grant to the Philippines of political independence would be virtually nullified if we placed further barriers in the path of their economic self-administration. We must remember that such action might well appear in the Philippines—and elsewhere, especially in Asiatic countries—as an attempt to maintain a system of colonial imperialism which we publicly disavow.” More generally, Eccles highlighted the economic case for the changes:
My basic position is that usually it is inordinately expensive—I would say extravagant—for any foreign country to administer its currency system on a straight U.S. dollar basis, whether it uses U.S. dollars as its sole medium of circulation or issues its own currency backed 100 per cent by a U.S. dollar reserve. Not only does such a system involve locking up highly valuable foreign exchange assets which might be used productively to finance imports for development purposes. In addition it deprives the country concerned of any freedom of action in managing its domestic monetary affairs. It forces a rigid pattern of monetary policy, completely at the mercy of the flow of funds in the balance of payments, and in time of depression leaves the country concerned without effective defense against stagnation and waste of resources. Furthermore, in the specific case of the Philippines which is suffering a budgetary deficit imposed by reconstruction difficulties, it forces the country to assume burdensome external liabilities to meet purely domestic expenditure requirements.
101
Some Fed board staff members, such as J. Burke Knapp, thought that Eccles had “a somewhat excessive enthusiasm for the proposal, being less than fully conscious of the limitations upon Central Bank action (and the possibilities of abuse) in an underdeveloped economy such as the Philippines.”
102
But he and others on the Fed staff and board were still supportive of the commission’s recommendations. Exter too remained deeply committed to the commission’s goals, writing to Crossman in November 1947 that the approach to Philippine monetary problems of Burgess and other US bankers “strikes me as ostrich-like.”
103
He reported that many local banks were also very much in favor of the central bank proposal since it would offer them protection and “an opportunity to expand their loans.”
104
In the end, President Truman threw his support behind the commission’s recommendations, as did Treasury Secretary Snyder. A key reason was that the central bank’s creation and the lowering of reserve backing of the currency could provide immediate revenue for the Philippine government at a time when US Congress was increasingly reluctant to approve new aid. In historian Nick Cullather’s words, the proposal promised to give “the Philippine government desperately-needed short-term financing at no cost to the United States.”
105
US officials were also encouraged to accommodate Philippine preferences because of strategic concerns: the country provided an important base for the US military, particularly given the growing uncertainties in China. Political scientists Sylvia Maxfield and James Nolt also highlight divisions within the US business community at this time, with internationally oriented US manufacturing firms emerging as quite supportive of US initiatives to promote Philippine import-substitution industrialization. As in Latin America, these firms saw ISI policies as a way of boosting overseas markets for their products and providing opportunities to establish protected subsidiaries behind tariff walls.
106
When Cuaderno requested the Fed’s help with the creation of the central bank, Exter and Grove were quickly dispatched to the Philippines to help refine his initial draft legislation. Cuaderno reported that his draft had been patterned after the model that Triffin and Grove had developed for Latin American countries, because he “was greatly impressed by the realistic view which these two gentlemen took of conditions obtaining in smaller and less economically developed countries such as those of South America.”
107
The final legislation, completed by March 1948, also followed the Paraguayan and Guatemalan models in many ways, although it replaced specific minimum reserve requirements for the central bank with some broad guidelines for credit policy relating to trends in the money supply or cost of living.
108
As in the case of the Latin American reforms, the provisions in the Philippine legislation for exchange rate adjustments and capital controls conformed to what was allowed under the Bretton Woods agreements. In their final report, Grove and Exter also justified the reforms in language that reflected well the embedded liberal orientation of Bretton Woods: “…it could hardly be expected that the Philippine Government would retain a monetary system whose excessive rigidity might delay its program of reconstruction and development or might deprive it of any effective defense against the domestic consequences of world economic fluctuations.”
109
They also launched a broader development-oriented attack on the deflationary consequences of the old monetary regime: “When a system requiring a 100 per cent reserve against the note issue is applied to a growing economy, it may logically be expected to impart to it a consistently deflationary bias. In order to create the larger money supply required for an increasing population and an ever-expanding domestic trade, it would be necessary for the country to have a persistently active balance of payments, which in itself would be a costly luxury for an under-developed economy.”
110
Triffin no doubt appreciated these lines of argument. So did Philippine politicians, who approved the central bank law very soon after Grove and Exter had submitted their draft legislation. After legislative approval in June 1948, the central bank opened in January 1949. Cuaderno was named its first governor.
The governments of the two East Asian countries represented at Bretton Woods emerged as strong supporters of the development content of Bretton Woods. Like many Latin American policymakers, Chinese officials saw the negotiations as an opportunity to secure international backing for their development ambitions, ambitions that were focused particularly on industrialization as a means to achieve higher living standards. While Latin American expectations had been shaped in part by the Good Neighbor financial partnership, Chinese interest in international development drew on the deeper legacy of Sun Yat-sen’s ideas. Sun had failed to find international support for his pioneering proposals at the time of the establishment of the League of Nations. By the early 1940s, however, Chinese officials found the United States and other foreign partners much more willing to back their goal of constructing an international financial order that was conducive to development goals. Just after the Bretton Woods meeting ended, US officials discovered that these goals were even supported by the leadership of the KMT’s rival, the Chinese Communist Party.
The Philippines was a much less active participant in the Bretton Woods negotiations. But after the country’s independence and the election of Roxas, policymakers in the Philippines made clear their desire to introduce monetary reforms based on the model that Triffin had developed in Latin America in order to realize their ambitious development plans. As in Latin America, US policymakers—led by Federal Reserve officials—then helped craft and implement these reforms, seeing them as part of the new Bretton Woods framework. Fed officials soon did the same in other Asian countries that were not present at Bretton Woods, such as Ceylon in 1950 (where Exter played the lead role) and South Korea that same year (where the key figure was Arthur Bloomfield, whose support for development was noted earlier).
111
As we shall shortly see, Harry Dexter White and other US officials also assisted with developed-oriented monetary reforms in Ethiopia around the time of the Bretton Woods conference. These various episodes revealed another way in which the innovations of the Good Neighbor financial partnership were globalized beyond the US–Latin American context in the process of construction of the development foundations of Bretton Woods.
1.
“Meeting in Mr. White’s Office, June 9, 1944,” ITM, box 21; T. L. Soong and Hsi Te-mou to Kung, June 9, 1944, AYP, box 78.
2.
In justifying the need for the Dutch to be invited to the Atlantic City conference, Keynes had also talked of the importance of “Holland and her Empire”; Keynes, “The Monetary Conference,” p. 3, to Sir D. Waley and Sir W. Eady, May 30, 1944, UKT 247/28. One of the delegates of the Dutch delegation at Bretton Woods, was Daniel Crena de Iongh who was President of the Board for the Netherlands Indies, Surinam, and Curaçao in the United States.
3.
Luxford made this proposal and White and Morgenthau liked it. Edward Brown thought the whole issue was overstated because it applied primarily just to the Dutch and Belgians. He argued that it was less relevant to Britain’s quota size because that was already small and because its African colonies were unlikely to become independent. He applied a similar logic in the French case, arguing that Algeria “hasn’t the slightest chance of independence” (although he thought Morocco and Tunisia might). Acheson agreed with this analysis and thought that even in the Belgian case, the chance of the Belgian Congo’s independence was “pretty slight.” In addition to noting that this analysis overlooked French Indochina, White argued that these ideas missed the point that some provision needed to be made for the future. Luxford agreed and noted that no one would be able to prevent the Dutch from simply keeping their existing quota when the Dutch East Indies became independent. For this entire discussion, see MD, book 751, pp. 280–90. Brown and Acheson quotes on pp. 286, 287.
5.
The most detailed discussions I have found are Young 1963, 377–81; 1965, 310–12. While the discussion here draws on various archival sources, its major limitation is its reliance on English-language literature and the absence of Chinese archival sources. My discussion thus represents only a first step to filling this gap in existing literature.
7.
The delegation included nine formal delegates, a secretary general, four advisers, seven technical experts, two technical consultants, and nine secretaries. For the Canadian and French proposals, see Horsefield 1969b. For Norway’s proposal, see HDWP, box 8, folder 2.
8.
See for example Bagby 1992. The British were much less keen on the American cultivation of China, not least because of Chiang’s support for Indian independence (O’Sullivan 2008). At the Bretton Woods conference, the British delegate Lionel Robbins noted in his diary that “the Chinese position at the conference is, of course, largely bogus, and the high place they are assigned to generally by American diplomacy rests on illusion—at any rate as regards our day, whatever may be the case in fifty years’ time.” At the same time, he noted: “Nevertheless, the fundamental fact remains that they are civilised and tough…and you can talk to them with the frankness and familiarity which you would adopt with a fellow Englishman. What a contrast in relations with our poor Indian fellow citizens.” (Howson and Moggridge 1990, 171).
10.
See for example “Meeting in Mr. White’s office, March 13, 1944,” “Meeting in Mr. White’s office, April 5, 1944,” BWCC, box 11/5. Acksay (2000, 280–82) notes that the USSR did respond late.
13.
Quoted in Zanasi 2006, 38.
15.
Sun 1922, 5, 8. In discussing “colonization,” he invoked the examples of the United States, Canada, Argentina, and Australia, and wrote about applying foreign machinery to agricultural production on land that was divided into homesteads for Chinese labor. In one example, he wrote of the movement of “ten millions of the people, from the congested provinces of China, to the Northwestern territory” (Sun 1922, 24).
16.
Sun 1922, 9–10, 11, 236.
20.
Sun 1922, 233, appendices 2–5; Wilbur 1976.
21.
Wilbur 1976, 102–8, chaps. 4, 5.
24.
In this chapter, I have used English forms of Chinese names and places that are in keeping with the historical documents I have consulted and the practices of the time.
26.
Li 1943, 221; MD, book 663, pp. 200–201. See also Wu 1943.
27.
“The Future Economic Development of China, Record of a Private meeting held at Chatham House on 31st October 1945,” p. 1, RIIA, file 8/1167.
29.
See for example US State Department 1967b, 1060; Bagby 1992, 65; White and Jacoby 1946, 115.
30.
Craig 2004, chap. 8. White’s concerns about unconditional lending to Chiang’s government dated back to early 1940 (Boughton 2004, 187).
31.
MD, book 755, p. 103. See also Pakula 2009, 505–6. In November 1944, Kung resigned as finance minister in the face of opposition within the KMT.
32.
Fuchs 1974a, 109–10, 114.
33.
MD, book 755, pp. 13–64.
34.
US State Department 1948, 1156.
35.
US State Department 1948, 1165–66.
37.
Quote from “Summary of Comments on International Monetary Plans,” Chungking, May 25, 1943, p. 7, AYP, box 78, summarizing “Memorandum from the Ministry of Finance, April 21, 1943.” For similar comments, see also p. 2 of the latter document.
38.
“Summary of Conference, Chungking, May 21, 1943,” pp. 2, 10, AYP, box 78. Others supported the idea of allying with poorer countries at the meeting, such as vice minister of finance Y. C. Koo (p. 5).
39.
Fuchs 1974a, 107; Young to Kung, May 18, 1943, AYP, box 78.
40.
Young (1963, 378) quoting his diary entry of May 4, 1943. See also Fuchs 1974a, 72–73, 107–10.
41.
For the various Chinese discussions and proposals, see AYP, box 78.
42.
“Preliminary Draft of a Proposal for a United and Associated Nations Fund for Monetary Rehabilitation and Stabilization,” and “Memorandum As Submitted by Chinese Experts Giving General Observations on American and British Plans for International Monetary Organization,” June 9, 1943, HDWP, box 8, folder 1. For Kung’s request for the transmittal, see Kung to Wei Tao-ming (Chinese ambassador in Washington), June 15, 1943, AYP, box 78.
43.
H. H. Kung, “To the Chinese representatives appointed to confer at Washington regarding international monetary arrangements,” June 15, 1943, AYP, box 78.
44.
“Memorandum As Submitted,” p. 3.
45.
“Conference in Mr. White’s Office, June 18, 1943,” BP, box 69.
46.
“Summary of Conference,” p. 5. A four-page proposal dated May 11, 1943 for an institution with this name can be found in AYP, box 78, developed by a Chinese individual from the Farmers Bank of China.
48.
Young 1963, 377–81, 385, 391–94, 446–47; Fuchs 1974a, 72–73, 107–9.
49.
“Preliminary Draft,” p. 2.
50.
“Memorandum As Submitted,” p. 6.
51.
“Preliminary Draft,” p. 5.
52.
Dr. S. Y. Liu, “Memorandum,” May 15, 1943, p. 1, AYP, box 78. Liu was one of the officials consulted by Young in preparing the plan.
53.
“Preliminary Draft,” p. 6. The board could also chose to waive the charges on credit countries and increase those on debit countries “if in its judgment unduly expansionist conditions are impending in the world economy.”
54.
“Preliminary Draft,” p. 9. See also “Memorandum as Submitted,” p. 4, and Kung, “To the Chinese,” p. 3.
56.
Hsi Te-mou to White, p. 1, September 2, 1943, HDWP, box 8, folder 1. A copy was sent to the British and Soviet financial representatives in Washington in mid-October; Hsi Te-mou to Kung, October 22, 1943, AYP, box 78. Young also sent informally a memo outlining his views to the US State Department (where his brother John Parke Young was involved in postwar planning) in July 1943 (Fuchs 1974a, 110; Young 1965, 311, 375–77).
57.
Friedman to White, p. 1, September 10, 1943, HDWP, box 8, folder 1.
58.
Morgenthau to Kung, p. 1, September 14, 1943, HDWP, box 8, folder 1.
59.
A. Lipsman, “Meeting in Mr. White’s Office, October 29, 1943” and “Meeting in Mr. White’s Office, December 3, 1943,” HDWP, box 8, folder 4.
60.
Ku Chun-fan, “International Post-war monetary planning,”
Ta Kung Pao
(Independent), Sept. 5, 1943, translation in NAC, RG19, v. 3982, M-1-7-3.
61.
“Establishment of International Monetary Fund Favourably Commented on by Chinese Experts,”
Central Daily News,
Chungking, April 26, 1944, HDWP, box 8, folder 1. For UK pressure for a transitional period, see for example Mikesell 1996, 27–28, Moggridge 1992, 743. Not all delegates favored a transition period. Indian officials, for example, worried that Britain would take advantage of it to maintain the sterling area and its exchange controls, and even to devalue the pound, thereby undermining the value of India’s sterling balances (e.g. Mukherjee 2002, 167).
62.
Central News Agency, “Y. C. Koo Comments on International Monetary Fund,” April 28, 1944, p. 1, AYP, box 78.
63.
See for example “The International Monetary Fund” (Editorial from the
Sin Ming Pao
, Chungking, April 24, 1944), pp. 1–2, HDWP, box 8, folder 1
64.
A. Lipsman, “Meeting in Mr. Friedman’s Office, April 20, 1944,” BWCC, box 11/5.
65.
“Memorandum, Proposal for a United Nations Bank, April 17, 1944,” p. 1, BWCC, box 11/5 (presented to Bernstein on May 8); “Meeting in Mr. Bernstein’s Office, May 8, 1944,” BWCC, box 11/5.
66.
Oliver 1957, 370, 439; Mikesell 1994, 31; Mason and Asher 1973, 25.
67.
Quoted in Mikesell 1994, 40. Emphasis in original. A number of countries pushed at the June Atlantic City conference for the Bank to be able to make gold loans for currency reserves, but the United States had remained opposed there (Mason and Asher 1973, 20).
68.
Mason and Asher 1973, 24–25.
70.
Quoted in Borgwardt 2005, 133–34.
71.
China also contributed to discussions clarifying that remittances would be considered current account transactions, a clarification supported by other Southern countries such as Greece, India, Egypt, and El Salvador (but opposed by some such as Bolivia, which was a host to migrants) (Schuler and Rosenberg 2012, 253–56, 284–87).
73.
Mikesell 1994, 22–23, 36–37. For China’s appreciation of this result, see Young 1963, 381.
77.
Service summarizing Mao’s comments in MD, book 796, p. 253.
78.
MD, book 801, p. 272.
79.
O’Sullivan 2008, 141.
80.
Manuel Quezon to Morgenthau, April 7, 1943, p. 1, TSF, Entry 67A245, box 26.
81.
Morgenthau to Quezon, April 10, TSF, Entry 67A245, box 26.
82.
Cullather 1994, 12, 25, 93, 203 n. 11.
83.
“Memorandum of a Meeting on the International Stabilization Fund in Mr. White’s Office, May 12, 1943,” May 19, 1943, TSF, Entry 67A245, box 26. See also Soriano to Morgenthau, May 15, 1943, BWCC, box 5/3.
84.
D. W. Bell to Quezon, June 14, 1944, TSF, Entry 67A245, box 26.
86.
Cullather 1994, 63; Cullather 1992, 81.
87.
Fajardo et al. 1987, 7
88.
Exter to Board of Governors, September 2, 1947, ISF, box 232.
89.
Cullather 1994, 63–67.
90.
Knapp to Governor Ransom, September 6, 1946, ISF, box 232.
91.
Exter to Board of Governors, September 2, 1947, Knapp to Goldenweiser, August 6, 1947, ISF, box 232; Arthur Stuart to Orvis Schmidt, January 31, 1947, TSF, Entry 67A245, box 30.
92.
Arthur Stuart to Harold Glasser, April 1, 1947, TSF, Entry 67A245, box 30.
93.
Exter to Edgar Crossman, November 7, 1947, p. 3, ISF box 232.
94.
Exter to Knapp, January 31, 1947, ISF, box 232.
95.
Exter to Board of Governors, September 2, 1947. For Burgess’s views, see Burgess to Snyder, March 26, 1947, TSF, Entry 67A245, box 30; Exter to Knapp, February 27, 1947, ISF, box 232.
96.
Knapp to Exter, March 18, 1947, ISF, box 232.
97.
Exter to Knapp, January 31, 1947.
98.
Knapp to Goldenweiser, August 6, 1947, ISF, box 232.
99.
Hartendorp 1958, 255.
100.
Cullather 1994, 66, 77.
101.
Eccles to Snyder, April 11, 1947, pp. 1, 3, ISF, box 232.
102.
Knapp to Goldenweiser, August 6, 1947.
103.
Exter to Crossman, November 7, 1947, p. 1, ISF, box 232.
104.
Exter to Knapp, February 27, 1947, p. 1.
105.
Cullather 1992, 80. This rationale had already been prominent in US policymaking circles at the time the commission was established; e.g. Knapp to Governor Ransom, September 6, 1946, ISF, box 232.
106.
Maxfield and Nolt 1990, 62–68.
107.
Cuaderno to Eccles, December 9, 1947, p. 1, ISF, box 232.
108.
Knapp to Board of Governors, March 10, 1948, ISF, box 232.
109.
Grove and Exter 1948, 939.
110.
Grove and Exter 1948, 939.
111.
Alacevich and Asso 2009, Karunatilake 1973.