Reparations Plan and Bank for International Settlements
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June 1930 358 FEDERAL RESERVE BULLETIN JUNE, 1930 FOREIGN BANKING AND BUSINESS CONDITIONS REPARATIONS PLAN AND BANK FOR INTERNATIONAL SETTLEMENTS The "new plan" embodying the experts' Italy.—Signor Bonaldo Stringher, governor of report of June 7, 1929/ the protocol of August the Bank of Italy; Prof. Alberto Beneduce, 31, 1929,2 and The Hague agreements of deputy in the Italian Parliament and member January 20, 1930 ?—altogether constituting a of the organization committee of the Bank for final settlement of reparations and other finan- International Settlements. cial claims arising out of the World War4—went Japan.—Mr. Tetsunosuke Tanaka, London into force on May 17, 1930.5 representative of the Bank of Japan and mem- The Bank for International Settlements ber of the organization committee of the Bank created by the plan received its charter from for International Settlements; Mr. Daisuke Switzerland on February 25, 1930. On Feb- Nohara, London manager of the Yokohama ruary 26 the governors of the central banks of Specie Bank. Belgium, England, France, Germany, and Formal invitations were at the same time Italy, and a representative of the governor of sent to Mr. Gates W. McGarrah, chairman of the Bank of Japan met at Rome and appointed the board of the Federal Reserve Bank of New the following board of directors for the bank: York, and Mr. Leon Fraser, New York attorney Belgium.—M. Louis Franck, governor of the and former general counsel for the Dawes plan, National Bank of Belgium and member of the to become the representatives from the United organization committee of the Bank for Inter- States on the board. The German represen- national Settlements; M. fimile Francqui, tatives were announced on April 4 as follows: Belgian financier and member of the Young Dr. Hans Luther, president of the Reichsbank; committee of experts. Dr. Carl Melchior, Hamburg banker and England.—Mr. Montagu Norman, governor alternate on the Young committee of experts; of the Bank of England; Sir Charles Addis, a Dr. Paul Reusch, well-known Rhenish indus- director of the Bank of England and member of trialist. As his personal substitute, Doctor both the Young committee of experts and the Luther designated Dr. Wilhelm Vocke, mem- organization committee of the Bank for ber of the board of directors of the Reichsbank International Settlements. since 1919. France.—M. Emile Moreau, governor of the The first meeting of the new board was held Bank of France; Baron Brincard, president of on April 22, at which time Mr. McGarrah was the Credit Lyonnaise; the Marquis de Vogue, elected chairman and president of the bank, president of the Compagnie de Suez. and other officers were appointed. Shares of the bank were issued and paid for on May 20. 1 See FEDERAL RESERVE BULLETIN for July, 1929, pp. 465-495. Of the 200,000 authorized shares (par 2,500 2 See FEDERAL RESERVE BULLETIN for December, 1929, pp. 792-796. 3 See FEDERAL RESERVE BULLETIN for April, 1930, pp. 172-249. Swiss gold francs equivalent to $482.37) 4 As noted in the FEDERAL RESERVE BULLETTN for April, 1930, p. 172, the settlement with Hungary embodied in The Hague agreements 124,000 were issued; and of this original issue "was not in all respects final, but was rather the definitive basis for a more detailed agreement to follow." This detailed agreement was 112,000 shares were distributed among the reached in due course and signed by the various powers concerned on seven countries represented on the board, the Apr. 28, 1930. * At the same time sec. 31 of the German bank law of Aug. 30, 1924, remainder being taken in equal amounts by became effective in accordance with the stipulations of the new plan. the central banks of Holland, Sweden, and This section requires the Reichsbank to redeem its notes in gold coin or gold bars, or in foreign exchange at the market value of the foreign cur- Switzerland. The shares are 25 per cent rency in gold. Under sec. 52 the coming into force of sec. 31 required a concurrent resolution of the managing board and the general council of paid-up and carry a liability for the unpaid 75 the Reichsbank. This resolution was announced Apr. 17 to become per cent. The bank opened for business May effective on the same date as the new plan. 20, 1930, at its registered offices in Basel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis.