Front Matter

Front Matter

International Monetary Fund
Published Date:
October 1985
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Gold, Joseph

Membership and nonmembership in the International Monetary Fund; a study in international law and organization. Washington, D.C., International Monetary Fund, 1974.

xiii, 683 p.

Includes “Articles of Agreement of the International Monetary Fund … amended July 28, 1969” (Appendix VIII, p. [551]-638).

1. International Monetary Fund. 2. International finance. I. Title.



In his Proposals for an International Clearing Union, Keynes recognized that although it was conceivable that a meshing of bilateral arrangements could achieve some of the advantages of a multilateral international monetary system, only the “single act of creation” by which a comprehensive scheme was adopted would be likely to succeed. That single act of creation would have to bring into existence “a central institution, of a purely technical and non-political character, to aid and support other international institutions concerned with the planning and regulation of the world’s economic life.” To ensure “a right measure of inducement to the general expansion of international trade … a broadly based international organisation” was necessary. He did not overlook the importance of the right of withdrawal from the organization. Every treaty, he wrote, introduced a qualification of the right of nations to act at pleasure. To make the arrangements he contemplated fully voluntary, the adherence of a member state should be terminable if ever it concluded that its obligations had become too irksome. If member states were free to escape from the provisions of a treaty, they might be the more willing to go on accepting the constraints it imposed.1 These ideas were compatible with those that H. D. White was incorporating at that time into the Preliminary Draft Outline of a Proposal for an International Stabilization Fund of the United and Associated Nations.

More than thirty years have passed since Keynes and White were drafting their plans, and the membership of the International Monetary Fund has grown from 22 countries, when the Articles of Agreement took effect on December 27, 1945, to 126 at the present time. Four countries have ceased to be members, but one has re-entered the organization. Inevitably, an expansion in membership of such magnitude and the shocks of withdrawal have produced numerous and sometimes novel problems, but little has been written about them. The specialist is like a gnome who feels the need to share his gnosis.2 The result is a book of some length, I hope it will not be said of its author that he “draweth out the thread of his verbosity finer than the staple of his argument.” 3

The work is divided into four sections, of which the first and longest deals with the assumption of membership in the Fund. It discusses the criteria, procedures, and terms for membership and also certain general ideas, such as the principles of universality and the formal equality of members. In addition, some special problems are considered, including those related to state-controlled economies, small states, and dependent territories. In connection with state-controlled economies, there is an account of the part played by a nonmember, the U. S. S. R., in the negotiation and drafting of the Articles. This section also includes a discussion of the creation of the Special Drawing Account in the form that it has taken, and the option that members of the Fund have to participate in it and receive allocations of the new reserve asset, special drawing rights.

The second section deals with ex-membership, that is to say, the withdrawal of a country from the Fund and the consequences of that action. One of the withdrawals involved a rare event, the expulsion of a member from an international organization. The third section examines some effects of the Fund on non-members, including ex-members. The attempts to affect the conduct of “strangers” to the Articles have a certain originality.

The approach of this book is not confined to the intellectual discipline of public international law. The reader may find something to satisfy an interest in international diplomacy or other aspects of international relations. The fourth section of the book summarizes in 51 paragraphs the main topics of the study, so that the reader beginning with this, the shortest, section can decide whether to turn back to earlier chapters.

The manuscript of this book was read by N. S. Narayana Chari, Albert S. Gerstein, Philine R. Lachman, George P. Nicoletopoulos, Stephen A. Silard, and John V. Surr, all of whom are colleagues of mine in the Legal Department of the Fund. I am grateful to them for the care with which they have read the manuscript and made suggestions for its improvement. I have had advice on specific topics from François Gianviti, Joseph W. Lang, Brian Rose, William F. Walsh, Alan Whittome, and David Williams, and to these colleagues also I express my thanks. Beyond the persons whom I have named are the many past and present members of the staff of the Fund who have participated in the activities of the organization that are described in this book. It would be presumptuous of me to thank them for being devoted and ingenious international civil servants.

There remain acknowledgments about which I have particularly warm feelings. The secretaries of the Legal Department were willing and, it seems, even pleased to type the manuscript. Marie McManus organized the work in such a way as to promote that reaction. Jai Keun Oh is a research associate from whom no facts or figures can remain hidden. In preparing the manuscript and reference material for publication he and Jane B. Evensen, assisted by Jennie Lee Carter, have performed services for which once again the only apt word is indispensable.

April 30, 1974

Joseph Gold

General Counsel


Director, Legal Department

International Monetary Fund




The International Monetary Fund, 1945–1965: Twenty Years of International Monetary Cooperation, by J. Keith Horsefield and others (Washington, 1969), Vol. III, pp. 5, 20, 21.


“Like the griffons of Greece and of the East and the dragons of Germanic lore, the Gnomes watch over hidden treasure.

Gnosis, in Greek, means knowledge; and Paracelsus may have called them Gnomes because they know the exact places where precious metals are to be found.”—Jorge Luis Borges with Margaritta Guerro, The Book of Imaginary Beings (New York, Avon Books, 1970), p. 111.


Love’s Labour’s Lost, Act V, Scene 1.


In a few international (i.e., intergovernmental) organizations, any state (or “country”) may become a member merely by giving notice that it accepts membership. The treaties establishing most international organizations, however, distinguish between original or founding members and other members. The former may become members by following a procedure that does not involve a decision to admit them, but the latter may become members only if an organ of the institution decides to permit them to enter. The power to admit other states is exercised in effect by those states that have already become members, although in strict legal analysis the decisions of the organs are not the decisions of individual members. There may or may not be criteria for admission, and if there are criteria they may be explicit or implicit. If criteria do exist, the question will arise whether the organization is required to admit an applicant that satisfies the criteria.

The Articles of Agreement of the International Monetary Fund specify the countries that were able to become original members, provided that they entered before a certain date. Other countries may become members if they are admitted by a favorable vote of the Board of Governors, the senior organ of the Fund. There are both explicit and implicit criteria for the admission of other countries.

In this study, countries are referred to normally by their popular or territorial, and not their legal, names. This practice is followed in order to avoid clogging the text with names that are sometimes lengthy. In addition, current popular or territorial names of countries are used and not those of earlier times, although occasionally a country is referred to by the name it had when it entered the Fund (e.g., Ceylon for Sri Lanka, Siam for Thailand). The formal legal names of countries as at February 28, 1974 are set out in Appendix III, which shows also the dates when countries applied for membership, when the Board of Governors adopted resolutions to admit them, and when they entered the Fund either as original members or as other members.

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