The International Bank for Reconstruction and Development

IN writing an article about the International Bank for Reconstruction and Development in June 1948 one is inclined to compare the present aspect of the problem of reconstruction with that in the months of June of the years 1944, 1945, 1946 and 1947. It is interesting and instructive to recall how the problem of reconstruction presented itself to the delegates who went on their way to Bretton Woods in June 1944; how it started to unveil its real aspects to the countries of Continental Europe in June 1945 when the first excitement about their liberation had calmed down; how it looked in June 1946 to the Executive Directors of the International Bank who had just started to function in continuous session as the phrase in the Articles of Agreement goes; and how it loomed in all its formidable scope in June 1947 when General Marshall made his historic speech at Harvard just before the International Bank gave its first reconstruction loan and placed its first bond issue on the American market. The Bretton Woods Conference which gave birth to the twin institutions, the International Monetary Fund and the International Bank for Reconstruction and Development, was concerned with the drafting of an international monetary system for the after-war world. Such a system, it was realized, would not be immediately applicable under the conditions prevailing after the cessation of hostilities. What those conditions would be could not yet be clearly foreseen. All one knew was that there would be devastation and neglected maintenance of fixed capital, exhaustion of working capital, disorganization and demoralization of labour and an overall distortion of the pattern of production and trade. But while it was obvious that the general destruction would be on an unprecedented scale neither its character nor its scope could at best be more than guessed at. The Bretton Woods Conference in devising an international monetary constitution was designing for the world as it would be after it had been reconverted to peace-time conditions. This reconversion would consist of more than mere reconstruction in the sense of rebuilding and reshaping the mechanical apparatus of production. First the physical and moral ills of the human factors of production had to be cured by what was called relief and rehabilitation. The material needs of this salvation campaign could only be provided from whatever surplus was available in a relatively small number of countries. The bulk would have to come from the United

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