Since the return of convertibility among the currencies of most major industrial countries at the beginning of 1959, a crisis affecting at least one major currency has threatened each year; the U.S. balance of payments has been in continuous large deficit; and the stability of the convertible gold-dollar and sterling system has been increasingly questioned. With the transition to convertibility proving to be so turbulent, doubts have arisen over the adequacy of liquidity arrangements for the future and calls for a great reform of the international monetary system have quite understandably been intensified.
For most of the first five years of convertibility, the financial officials of the leading industrial countries have necessarily concentrated their efforts on developing, through increasingly close and harmonious coöperation, one facility after another that was adapted to the immediate needs created by the new circumstances. To have turned aside for protracted discussion of vast ideas for major reform, before the outline of the new convertible system itself had become scarcely visible, might have invited each incipient disturbance affecting any currency to become a disaster for all.
But most of the foundations for a new system of defenses have now been put in place and effectively tested in the joint action that has been taken to contain the heavy pressures on sterling in the spring of 1961 and at the beginning of 1963; to neutralize the monetary impact of the Berlin crisis in the summer of 1961; to halt the run on the Canadian dollar in May-June 1962; and to avert any monetary repercussions of the stock market collapse in May, or of the Cuban crisis in October 1962.
Several different groupings have also evolved among governments for carrying forward the consultation and coöperation that have proved so useful during these early years of convertibility. While the further use and improvement of the present combination of new and old arrangements may well prove fully adequate, the stage has clearly been reached, both in terms of facilities and of mutual understanding, when
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