Courtesy Reuters
Foreign Affairs From The Anthology: From the Archives: International Institutions
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The International Bank and Its Future

AMEMBER of the Young Committee of 1929, which recommended the creation of a Bank for International Settlements, was asked what the Bank was going to do. "I don't know," he replied. "The important fact is that it exists. Unforeseen opportunities for service in the field of international finance will come to it as time unfolds. The conception is sound; the need is real; only the long future can answer your query."

In some measure this reply holds good today, for the Bank's greatest possibility of usefulness still lies ahead. While its past has been active and fruitful, any continuous, constructive development was necessarily arrested by the outbreak, in the Bank's very infancy, of a world-wide financial crisis. This exercised a cramping effect upon international relations generally, and upon all organizations designed to facilitate them. Yet the six years that have elapsed since the Bank was opened have indicated the direction in which it is to grow and the objects which it must serve. Americans have a primary interest in certain of those objects. It therefore may be opportune to review briefly the purposes for which the institution was created and its record to date in endeavoring to carry out those purposes; and also to state the fundamental task of high import which the Bank is prepared to undertake -- a task which it can probably fulfill with beneficent results to all countries, and especially to ours, if (and perhaps only if) the American monetary authorities determine to take advantage of its facilities, which are at their command.

When the Young Committee gave their reasons for constituting a new banking institution of an international character -- a proposal by no means novel -- they pointed out that the reparation problem on which they were working was primarily financial in its nature and involved the performance of banking functions at several points in the sequence between Germany's initial payments of the proposed annuities and the final distribution of the funds to the receiving Powers.

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