BANKING: Bad Start

In a rash of cheery press releases and bad feeling, the operating mechanism for the World Bank & Fund was set up last week at Savannah. Basic causes of the trouble were the old differences between Britain and the U.S. on how Bretton Woods should be implemented. But there was a new irritant. U.S. Treasury Secretary Fred Vinson looked like a weary ewe, but ran the nine-day conference with ram-like authority. He got exactly what he wanted—and the British be damned.

As a member of the Bank’s twelve-man board of executive directors, the U.S. named little-known Emilio Gabriel Collado, 35, who looks more like a fullback than a banker. A Harvard Ph.D., music lover and longtime economist for the Treasury and the State Department, he was generally regarded as a good choice.

But the British did not like the way Fred Vinson sidetracked Assistant Treasury Secretary Harry White, one of the foster fathers of Bretton Woods and top U.S. expert. They get on well with him, thought he was the best man to head the Fund. Instead, he was relegated to the less important job of director. (President will probably be Graham Towers, governor of the Bank of Canada.)

Now, the most important U.S. Bretton Woods official will be the president of the Bank. Leading candidate for the $30,000-a-year job was Lewis Douglas, president of the Mutual Life Insurance Co. and an old crony of Fred Vinson’s. A onetime Democratic Congressman from Arizona, and U.S. Budget Director, he had quit the New Deal in protest against its spending policies. His appointment would be a sop to conservative Democrats.

The British, who had hoped to keep party politics out of the Bank & Fund, were rubbed raw by a dozen other differences, e.g., salaries for Fund & Bank officials, the location of headquarters.The British wanted headquarters in the non-political air of New York. The U.S. said Washington—and won.

All this worried the British so much about future operations that they privately muttered: if the British loan is not granted, they will probably quit Bretton Woods. Summed up the Manchester Guardian: “The meeting was intensely discouraging. . . . Every proposal put forward by the American delegation was pressed through with steamroller tactics. . . . In fact, the worst fears of those who have always warned us that this is what the U.S. meant by international economic cooperation were borne out at Savannah.”