Courtesy Reuters

The Inter-American Bank: Prospects and Dangers

THE first Pan American Conference, in 1890, recommended the granting of charters which would favor the development of inter-American banking transactions, and particularly those which would lead eventually to the establishment of an International American Bank with branches or agencies in each constituent nation. With only one exception, in 1902, there was no further mention of such a bank for forty-three years. Then in December 1933 the seventh Pan American Conference recommended the establishment of an inter-American organization for economic and financial coöperation, to consist of a governing board, an economic advisory committee, and an Inter-American Bank. The Bank would aim particularly to establish and develop inter-American credit and capital movements, and it also would coöperate in monetary reconstruction in each nation.

These plans were discussed further at Buenos Aires in 1936 and at Lima in 1938, and again at the meeting of Foreign Ministers of the American Republics, held in Panama in 1939. On the last-named occasion it was decided to create an Inter-American Financial and Economic Advisory Committee, consisting of 21 experts in economic matters, to sit in permanent session at Washington, beginning in November 1939. Besides studying problems relating to monetary affairs, the regulation of exchange, balances of payments, etc., this Committee was given the duty of examining the need for an inter-American banking institution to promote financial coöperation between the treasuries, central banks and similar institutions of the American nations.

Bearing in mind these facts, the Mexican Delegate to the First Meeting of Finance Ministers of the American Republics, held in Guatemala in 1939, again put forward Mexico's proposal (already presented at previous conferences) for the creation of such an institution. It was to have the following functions: (a) To act as an inter-American clearing house, thus reducing international movements of gold and silver to a minimum. (b) To act as financial agent of the affiliated central banks in the international capital market. (c) To assist affiliated central banks in stabilizing the internal and external value of their respective currencies. (d) To make

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