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Statement on Signing the International Financial Institutions Bill.

December 31, 1970

I AM TODAY signing H.R. 18306--the international financial institutions bill-although it only partially meets my recommendations.

I welcome that part of the bill which approves the $1,540 million increase in the United States quota in the International Monetary Fund as part of a general increase in Fund quotas. This is a major step. The general quota increase will enable the Fund to meet its important responsibilities for providing adequate credit facilities to support expanding world trade and capital movements. Our own quota increase permits the United States to maintain its leadership role in the Fund, and also takes the first step towards enabling us to enjoy the full benefits of the Special Drawing Rights allocation to be made on January 1, 1971. Similarly, I welcome the authorization for an increase in our World Bank capital subscription. The United States can now participate fully in making available to the Bank $2 billion of subscriptions from other countries in addition to our own increase of $246 million. The increase will maintain our relative voting position in the Bank. It will be of considerable help to the Bank in meeting its expanded program of assistance to the developing countries by expanding the base on which it can borrow in private capital markets around the world, and by adding a substantial amount of paid-in capital immediately available to the Bank.

Unfortunately, the legislative situation did not permit action on my request for $100 million for the Special Funds of the Asian Development Bank. We must not allow further delay to be interpreted as lack of U.S. support for the Bank at a time when it is coming to play an essential role in encouraging peaceful development in Asia. This Bank, the result of an Asian initiative and managed primarily by Asians, is a major force for peaceful and cooperative development. Six countries have already contributed to the Special Funds in anticipation of a United States contribution. Failure to act early in the next session of the Congress would be a serious setback to the Bank's ability to obtain funds from other donors and build a strong, long-range, concessional lending facility. Accordingly, I wish to stress that I will ask the 92d Congress to take prompt action to provide a United States contribution of $100 million to the Bank's Special Funds.

With respect to the Inter-American Development Bank, H.R. 18306 meets my request to provide an expansion of over $800 million in the United States subscription to the Bank's ordinary capital. This desirable step will greatly strengthen the Bank's capacity for conventional lending.

However, I regret that H.R. 18306 authorizes payment and appropriation of only $100 million for replenishment of the resources of the Bank's Fund for Special Operations, an amount representing the first portion of a planned St billion contribution over a 3-year period. The bill does authorize the U.S. Governor to vote in favor of a pending resolution of the Bank which contemplates that the full contribution will be available on schedule, and in accordance with this legislative action the U.S. Governor will cast his votes in favor of the resolution.

Further action by the Congress will be necessary to enable the United States to conclude the subscription procedure envisioned by the resolution, and I will urge the 92d Congress to take action to that end. Full U.S. implementation of this replenishment of the Fund for Special Operations will enable the Bank to continue and expand its role as the hemisphere's major instrument for promoting development financing.

As I indicated in my foreign aid reform message on September 15, international institutions can and should play a major role in the funding of development assistance. I have therefore proposed that the United States channel an increasing share of its development assistance through these institutions as rapidly as practicable. The institutions considered in H.R. 18306 are among the most important to this effort. I therefore welcome the authorizations contained in H.R. 18306, but regret its failure to fully meet my requests and urge that the 92d Congress take early action to do so.

Note: As enacted, H.R. 18306 is Public Law 91-599 (84 Stat. 1657), approved December 30, 1970.

Richard Nixon, Statement on Signing the International Financial Institutions Bill. Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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