Gold Reserve Act
The United States Gold Reserve Act of January 30, 1934 required that all gold and gold certificates held by the Federal Reserve be surrendered and vested in the sole title of the United States Department of the Treasury. The Gold Reserve Act outlawed most private possession of gold, forcing individuals to sell it to the Treasury, after which it was stored in United States Bullion Depository at Fort Knox and other locations; the act changed the nominal price of gold from $20.67 per troy ounce to $35. This price change incentivized foreign investors to export their gold to the United States, while devaluing the U. S. dollar in an attempt to spark inflation. The increase in gold reserves due to the price change as well as the confiscation clause resulted in a large accumulation of gold in the Federal Reserve and U. S. Treasury; the increase in the money supply lowered real interest rates which increased investment in durable goods. A year earlier, in 1933, Executive Order 6102 had made it a criminal offense for U.
S. citizens to own or trade gold anywhere in the world, with exceptions for some jewelry and collector's coins. These prohibitions were relaxed starting in 1964 – gold certificates were again allowed for private investors on April 24, 1964, although the obligation to pay the certificate holder on demand in gold specie would not be honored. By 1975 Americans could again own and trade gold; the Gold Reserve Act authorized the Exchange Stabilization Fund to use such assets as were not needed for exchange market stabilization to deal in government securities. The United States was still suffering the negative effects of the 1929 stock market crash in 1934 when the Gold Reserve Act was enacted. President Roosevelt was challenged with decreasing unemployment, raising wages and increasing the money supply, but was restricted by United States' strict adherence to the gold standard; the Gold Reserve Act, which banned the export of gold, restricted the ownership of gold and halted the convertibility of gold into paper money helped him overcome this obstacle.
This act ratified the previous Executive Order 6102 which required all gold to be exchanged for paper currency. The Gold Reserve Act revalued the price of gold to $35 per troy ounce; as a result, the Gold Reserve Act, an act of monetary policy, drastically increased the growth rate of the Gross National Product from 1933 to 1941. Between 1933 and 1937 the GNP in the United States grew at an average rate of over 8 percent; this growth in real output is due to a growth in the money supply M1, which grew at an average rate of 10 percent per year between 1933 and 1937. Traditional beliefs about the recovery from the Great Depression hold that the growth was due to fiscal policy and the United States' participation in World War II. Friedman and Schwartz stated that the "rapid rate in three successive years from June 1933 to June 1936... was a consequence of the gold inflow produced by the revaluation of gold plus the flight of capital to the United States". Treasury holdings of gold in the US tripled from 6,358 in 1930 to 8,998 in 1935 to 19,543 metric tonnes of fine gold by 1940.
The revaluation of gold referenced was an active policy decision made by the Roosevelt administration in order to devalue the dollar. The largest inflow of gold during this period was in direct response to the revaluation of gold. An increase in M1, a result of an inflow of gold, would lower real interest rates, thus stimulating the purchases of durable consumer goods by reducing the opportunity cost of spending. If the Gold Reserve Act had not been enacted, money supply had followed its historical trend real GNP would have been 25 percent lower in 1937 and 50 percent lower in 1942; the international community during the depression began to shift much of its gold reserves to the United States. Foreign investors clamored over the $15 increase in value from $20.67 to $35 per troy ounce, exported their gold to the United States in record amounts causing U. S. treasury holdings to increase. This data shows two important aspects; the first was the massive expansion of gold as a currency across the globe.
This data demonstrates the rapid increase of gold reserves to the US. In 1900 the U. S. only held 602 tonnes of gold in reserve. This was only 57 tonnes more than France. Over the next 20 years the countries' reserves grew as the amount of gold in the market increased and as normal trading occurred. However, in the 1930s there was a sudden shift up in reserves in the U. S. From 1930 to 1940, treasury holdings had tripled due to foreign investing. Another reason behind the shift of reserves to the US was the suspension of the gold standard in Britain on September 21, 1931. Gold reserves in the Bank of England grew over ten times from 1930 to 1940, but it was still less than the amount the U. S. had. The Bank of France saw over 200 tonnes of gold get transferred to New York following the raising of prices in America. Although hard to find and interpret the raw data, according to data collected by Goldsmith in their 1955 report, somewhere between 2 and 3.2 billion dollars' worth of imported gold stock was being held.
At 20 dollars an ounce, that would represent between 100 and 160 million ounces of gold, which would be worth between 125 and 200 billion dollars today at $1250/ oz, about half of the gold held by the U. S. treasury at the time. When the price changed, it would take $35 instead of $20 for foreign countries to buy back their gold; this implies a loss of 41% of their invested gold stock. This would be between 41 and 65 billion dollars' worth of gold or 800+ million dollars in 1934 dollars. But
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. Established by an Act of Congress in 1789 to manage government revenue, the Treasury prints all paper currency and mints all coins in circulation through the Bureau of Engraving and Printing and the United States Mint, respectively. S. government debt instruments. The Department is administered by the Secretary of the Treasury, a member of the Cabinet. Senior advisor to the Secretary is the Treasurer of the United States. Signatures of both officials appear on all Federal Reserve notes; the first Secretary of the Treasury was Alexander Hamilton, sworn into office on September 11, 1789. Hamilton was appointed by President George Washington on the recommendation of Robert Morris, Washington's first choice for the position, who had declined the appointment. Hamilton established—almost singlehandedly—the nation's early financial system and for several years was a major presence in Washington's administration.
His portrait appears on the obverse of the ten-dollar bill, while the Treasury Department building is depicted on the reverse. The current Secretary of the Treasury is Steven Mnuchin, confirmed by the United States Senate on February 13, 2017. Jovita Carranza, appointed on April 28, 2017, is the incumbent treasurer; the history of the Department of the Treasury began in the turmoil of the American Revolution, when the Continental Congress at Philadelphia deliberated the crucial issue of financing a war of independence against Great Britain. The Congress had no power to levy and collect taxes, nor was there a tangible basis for securing funds from foreign investors or governments; the delegates resolved to issue paper money in the form of bills of credit, promising redemption in coin on faith in the revolutionary cause. On June 22, 1775—only a few days after the Battle of Bunker Hill—Congress issued $2 million in bills. On July 29, 1775, the Second Continental Congress assigned the responsibility for the administration of the revolutionary government's finances to joint Continental treasurers George Clymer and Michael Hillegas.
The Congress stipulated. To ensure proper and efficient handling of the growing national debt in the face of weak economic and political ties between the colonies, the Congress, on February 17, 1776, designated a committee of five to superintend the Treasury, settle accounts, report periodically to the Congress. On April 1, a Treasury Office of Accounts, consisting of an Auditor General and clerks, was established to facilitate the settlement of claims and to keep the public accounts for the government of the United Colonies. With the signing of the Declaration of Independence on July 4, 1776, the newborn republic as a sovereign nation was able to secure loans from abroad. Despite the infusion of foreign and domestic loans, the united colonies were unable to establish a well-organized agency for financial administration. Michael Hillegas was first called Treasurer of the United States on May 14, 1777; the Treasury Office was reorganized three times between 1778 and 1781. The $241.5 million in paper Continental bills devalued rapidly.
By May 1781, the dollar collapsed at a rate of from 500 to 1000 to 1 against hard currency. Protests against the worthless money swept the colonies, giving rise to the expression "not worth a Continental". Robert Morris was designated Superintendent of Finance in 1781 and restored stability to the nation's finances. Morris, a wealthy colonial merchant, was nicknamed "the Financier" because of his reputation for procuring funds or goods on a moment's notice, his staff included a comptroller, a treasurer, a register, auditors, who managed the country's finances through 1784, when Morris resigned because of ill health. The treasury board, consisting of three commissioners, continued to oversee the finances of the confederation of former colonies until September 1789; the First Congress of the United States was called to convene in New York on March 4, 1789, marking the beginning of government under the Constitution. On September 2, 1789, Congress created a permanent institution for the management of government finances:Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be a Department of Treasury, in which shall be the following officers, namely: a Secretary of the Treasury, to be deemed head of the department.
Alexander Hamilton took the oath of office as the first Secretary of the Treasury on September 11, 1789. Hamilton had served as George Washington's aide-de-camp during the Revolution and was of great importance in the ratification of the Constitution; because of his financial and managerial acumen, Hamilton was a logical choice for solving the problem of the new nation's heavy war debt. Hamilton's first official act was to submit a report to Congress in which he laid the foundation for the nation's financial health. To the surprise of many legislators, he insisted upon federal assumption and dollar-for-dollar repayment of the country's $75 million debt in order to revitalize the public credit: "he debt of the United States was the price of liberty; the faith of America has been pledged for it, with solemnities that give peculiar force to the obligation." Hami
William Jefferson Clinton is an American politician who served as the 42nd president of the United States from 1993 to 2001. Prior to the presidency, he was the governor of Arkansas from 1979 to 1981, again from 1983 to 1992, the attorney general of Arkansas from 1977 to 1979. A member of the Democratic Party, Clinton was ideologically a New Democrat, many of his policies reflected a centrist "Third Way" political philosophy. Clinton was born and raised in Arkansas and attended Georgetown University, University College and Yale Law School, he met Hillary Rodham at Yale and married her in 1975. After graduating, Clinton returned to Arkansas and won election as the Attorney General of Arkansas, serving from 1977 to 1979; as Governor of Arkansas, he overhauled the state's education system and served as chairman of the National Governors Association. Clinton was elected president in 1992. At age 46, he became the first from the Baby Boomer generation. Clinton presided over the longest period of peacetime economic expansion in American history.
He signed into law the North American Free Trade Agreement but failed to pass his plan for national health care reform. In the 1994 elections, the Republican Party won unified control of the Congress for the first time in 40 years. In 1996, Clinton became the first Democrat since Franklin D. Roosevelt to be elected to a second full term, he passed welfare reform and the State Children's Health Insurance Program, as well as financial deregulation measures, including the Gramm–Leach–Bliley Act and the Commodity Futures Modernization Act of 2000. In 1998, Clinton was impeached by the House of Representatives for perjury and obstruction of justice following allegations that he committed perjury and obstructed justice to conceal an affair that he had with Monica Lewinsky, a 22-year old White House Intern. Clinton was completed his term in office, he is only the second U. S. president—following Andrew Johnson 131 years earlier—to be impeached. During the last three years of Clinton's presidency, the Congressional Budget Office reported a budget surplus, the first such surplus since 1969.
In foreign policy, Clinton ordered U. S. military intervention in the Bosnian and Kosovo wars, signed the Iraq Liberation Act in opposition to Saddam Hussein, participated in the 2000 Camp David Summit to advance the Israeli–Palestinian peace process, assisted the Northern Ireland peace process. Clinton left office with the highest end-of-office approval rating of any U. S. president since World War II, has continually scored high in the historical rankings of U. S. presidents placing in the top third. Since leaving office, he has been involved in humanitarian work, he created the William J. Clinton Foundation to address international causes such as the prevention of AIDS and global warming, he has remained active in politics by campaigning for Democratic candidates, including the presidential campaigns of his wife and Barack Obama. In 2004, Clinton published My Life. In 2009, he was named the United Nations Special Envoy to Haiti and after the 2010 Haiti earthquake, he teamed with George W. Bush to form the Clinton Bush Haiti Fund.
In addition, he secured the release of two American journalists imprisoned by North Korea, visiting the capital Pyongyang and negotiating their release with Kim Jong-il. Clinton was born William Jefferson Blythe III on August 19, 1946, at Julia Chester Hospital in Hope, Arkansas, he is the son of William Jefferson Blythe Jr. a traveling salesman who had died in an automobile accident three months before his birth, Virginia Dell Cassidy. His parents had married on September 4, 1943, but this union proved to be bigamous, as Blythe was still married to his third wife. Virginia traveled to New Orleans to study nursing soon after Bill was born, leaving him in Hope with her parents Eldridge and Edith Cassidy, who owned and ran a small grocery store. At a time when the southern United States was racially segregated, Clinton's grandparents sold goods on credit to people of all races. In 1950, Bill's mother returned from nursing school and married Roger Clinton Sr. who co-owned an automobile dealership in Hot Springs, Arkansas with his brother and Earl T. Ricks.
The family moved to Hot Springs in 1950. Although he assumed use of his stepfather's surname, it was not until Clinton turned 15 that he formally adopted the surname Clinton as a gesture toward his stepfather. Clinton said that he remembered his stepfather as a gambler and an alcoholic who abused his mother and half-brother, Roger Clinton Jr. to the point where he intervened multiple times with the threat of violence to protect them. In Hot Springs, Clinton attended St. John's Catholic Elementary School, Ramble Elementary School, Hot Springs High School, where he was an active student leader, avid reader, musician. Clinton was in the chorus and played the tenor saxophone, winning first chair in the state band's saxophone section, he considered dedicating his life to music, but as he noted in his autobiography My Life: Clinton began an interest in law at Hot Springs High, when he took up the challenge to argue the defense of the ancient Roman Senator Catiline in a mock trial in his Latin class.
After a vigorous defense that made use of his "budding rhetorical and political skills", he told the Latin teacher Elizabeth Buck that it "made him realize that someday he would study law". Clinton has identified two influential moments in his life, both occurring in 1963, that contributed to his decision to become a public figure. One was his visit as a Boys Nation senator to
Henry Morgenthau Jr.
Henry Morgenthau Jr. was the United States Secretary of the Treasury during the administration of Franklin D. Roosevelt, he played a major role in financing the New Deal. After 1937, while still in charge of the Treasury, he played the central role in financing United States participation in World War II, he played an major role in shaping foreign policy with respect to Lend-Lease, support for China, helping Jewish refugees, proposing to prevent Germany from again being a military threat by wrecking its industry and mines. Morgenthau was the father of Robert M. Morgenthau, District Attorney of Manhattan for 35 years and Henry Morgenthau III, an American author and television producer, he continued as treasury secretary through the first few months of Harry Truman's presidency, from June 27, 1945 to July 3, 1945, following the resignation of Secretary of State Edward Stettinius Jr. was next in line to the presidency. Morgenthau was the only Jew to be first in the presidential line of succession.
Morgenthau was born into a prominent Jewish family in New York City, the son of Henry Morgenthau, Sr. a real estate mogul and diplomat, Josephine Sykes. He had three sisters, he attended Phillips Exeter Academy transferring to the Dwight School. He studied architecture and agriculture at Cornell University. In 1913, he became friends with Franklin and Eleanor Roosevelt, he operated a farm named Fishkill Farms near the Roosevelt estate in upstate New York, like FDR, in growing Christmas trees. He was concerned about distress among farmers. In 1922, he took over the American Agriculturalist magazine, making it a voice for reclamation and scientific farming. In 1929, Roosevelt, as Governor of New York, appointed him chair of the New York State Agricultural Advisory Committee and to the state Conservation Commission. In 1933, Roosevelt became appointed Morgenthau governor of the Federal Farm Board. Morgenthau was nonetheless involved in monetary decisions. Roosevelt adopted the idea of raising the price of gold to inflate the currency and reverse the debilitating deflation of prices.
The idea came from Professor George Warren of Cornell University. Morgenthau met Jones there. I said to the President, he said, "That is right. Harrison called up and spoke to Jesse." I could not make out whether he spoke to the President. Harrison urged that inasmuch as Saturday was only half a day that they should not buy any gold. Both the President and Jones said. I believe it was on Friday that we raised the price 21¢, the President said, "It is a lucky number because it is three times seven." If anybody knew how we set the gold price through a combination of lucky numbers, etc. I think that they would be frightened. Saturday we increased the price 10¢. I stayed after Jones left and had a good half hour talk in which most of the time Louis Howe was present. In 1934, when William H. Woodin resigned because of poor health, Roosevelt appointed Morgenthau Secretary of the Treasury. Morgenthau was a strict monetarist. President Roosevelt and Federal Reserve Chairman Marriner Stoddard Eccles jointly kept interest rates low during the depression to finance massive public spending, later to support rearmament, support for Britain, U.
S. participation in WW II. In 1934, President Franklin D. Roosevelt asked Morgenthau to examine the taxes of William Randolph Hearst because FDR was "advised that Hearst was planning to use his newspapers to launch a major attack on the New Deal and its economic policies." Treasury Secretary Morgenthau explained that he examined the taxes of William Randolph Hearst and actress Marion Davies and "advised FDR to mount a preemptive attack on both her and Hearst." Morgenthau used his position as Treasury chief to investigate organized crime and government corruption. Treasury Intelligence and other agencies were uncoordinated in their efforts. Morgenthau created a coordinator for the Treasury agencies. Former head of IRS' criminal investigators Elmer Lincoln Irey, who had directed major investigations including the successful prosecution of Al Capone, assumed the position in 1937. Investigations of official corruption caused the fall of political boss Thomas "Big Tom" Pendergast of Kansas City. A Mafia-related shootout and massive official corruption led to successful investigations against Pendergast and the local Mafia head Charles Carrollo.
Other officials — as well as gangsters, in a few rare cases — were convicted because of Morgenthau's investigations. Morgenthau believed in balanced budgets, stable currency, reduction of the national debt, the need for more private investment; the Wagner Act regarding labor unions met Morgenthau's requirement, because it strengthened the party's political base and involved no new spending. Morgenthau accepted Roosevelt's double budget as legitimate — that is, a balanced regular budget, an "emergency" budget for agencies, like the Works Progress Administration, Public Works Administration and Civilian Conservation Corps, that would be temporary until full recovery was at hand, he fought against the veterans' bonus until Co
United States Mint
The United States Mint is a unit of the Department of Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion. It does not produce paper money; the Mint was created in Philadelphia in 1792, soon joined by other centers, whose coins were identified by their own mint marks. There are four active coin-producing mints: Philadelphia, San Francisco, West Point; the Mint was created by Congress with the Coinage Act of 1792, placed within the Department of State. Per the terms of the Coinage Act, the first Mint building was in Philadelphia, the capital of the United States. Today, the Mint's headquarters are in Washington D. C.. It operates mint facilities in Philadelphia, San Francisco, West Point, New York and a bullion depository at Fort Knox, Kentucky. Official Mints were once located in Carson City, Nevada. Part of the State Department, the Mint was made an independent agency in 1799, it converted precious metals into standard coin for anyone's account with no seigniorage charge beyond the refining costs.
Under the Coinage Act of 1873, the Mint became part of the Department of the Treasury. It was placed under the auspices of the Treasurer of the United States in 1981. Legal tender coins of today are minted for the Treasury's account; the first Director of the United States Mint was renowned scientist David Rittenhouse from 1792 to 1795. The position was held most by Edmund C. Moy until his resignation effective January 9, 2011; the position was left vacant until April 2018. Henry Voigt was the first Superintendent and Chief Coiner, is credited with some of the first U. S. coin designs. Another important position at the Mint is that of Chief Engraver, held by such men as Frank Gasparro, William Barber, Charles E. Barber, James B. Longacre, Christian Gobrecht; the Mint has operated several branch facilities throughout the United States since the Philadelphia Mint opened in 1792, in a building known as "Ye Olde Mint". With the opening of branch mints came the need for mint marks, an identifying feature on the coin to show its facility of origin.
The first of these branch mints were the Charlotte, North Carolina, Dahlonega and New Orleans, Louisiana branches. Both the Charlotte and Dahlonega Mints were opened to facilitate the conversion of local gold deposits into coinage, minted only gold coins; the Civil War closed both these facilities permanently. The New Orleans Mint closed at the beginning of the Civil War and did not re-open until the end of Reconstruction in 1879. During its two stints as a minting facility, it produced both gold and silver coinage in eleven different denominations, though only ten denominations were minted there at one time. A new branch facility was opened in Carson City, Nevada, in 1870. Like the Charlotte and Dahlonega branches, the Carson City Mint was opened to take advantage of local precious metal deposits, in this case, a large vein of silver. Though gold coins were produced there, no base metal coins were. In 1911 the Mint had a female acting director, Margaret Kelly, at that point the highest paid woman on the government's payroll.
She stated that women were paid within the bureau. A branch of the U. S. mint was established in 1920 in Manila in the Philippines, a U. S. territory. To date, the Manila Mint is the only U. S. mint established outside the continental U. S. and was responsible for producing coins. This branch was in production from 1920 to 1922, again from 1925 through 1941. Coins struck by this mint bear either the M mintmark or none at all, similar to the Philadelphia mint at the time. A branch mint in The Dalles, was commissioned in 1864. Construction was halted in 1870, the facility never produced any coins, although the building still stands. There are four active coin-producing mints: Philadelphia, San Francisco, West Point; the Mint's largest facility is the Philadelphia Mint. The current facility, which opened in 1969, is the fourth Philadelphia Mint; the first was built in 1792, when Philadelphia was still the U. S. capital, began operation in 1793. Until 1980, coins minted at Philadelphia bore no mint mark, with the exceptions of the Susan B.
Anthony dollar and the wartime Jefferson nickel. In 1980, the P mint mark was added to all U. S. coinage except the cent. Until 1968, the Philadelphia Mint was responsible for nearly all official proof coinage. Philadelphia is the site of master die production for U. S. coinage, the engraving and design departments of the Mint are located there. The Denver branch began life in 1863 as the local assay office, just five years after gold was discovered in the area. By the turn of the century, the office was bringing in over $5 million in annual gold and silver deposits, in 1906, the Mint opened its new Denver branch. Denver uses a D mint mark and strikes coinage only for circulation, although it did strike, along with three other mints, the $10 gold 1984 Los Angeles Olympic Com
The World Bank is an international financial institution that provides loans to countries of the world for capital projects. It comprises two institutions: the International Bank for Reconstruction and Development, the International Development Association; the World Bank is a component of the World Bank Group. The World Bank's most recent stated goal is the reduction of poverty; as of November 2018, the largest recipients of world bank loans were India and China, through loans from IBRD. The World Bank is different from the World Bank Group, an extended family of five international organizations: International Bank for Reconstruction and Development International Development Association International Finance Corporation Multilateral Investment Guarantee Agency International Centre for Settlement of Investment Disputes The World Bank was created at the 1944 Bretton Woods Conference along with the International Monetary Fund; the president of the World Bank is, traditionally, an American. The World Bank and the IMF are both based in Washington, D.
C. and work with each other. Although many countries were represented at the Bretton Woods Conference, the United States and United Kingdom were the most powerful in attendance and dominated the negotiations; the intention behind the founding of the World Bank was to provide temporary loans to low-income countries which were unable to obtain loans commercially. The Bank may make loans and demand policy reforms from recipients. Before 1974, the reconstruction and development loans provided by the World Bank were small; the Bank's staff were aware of the need to instill confidence in the bank. Fiscal conservatism ruled, loan applications had to meet strict criteria; the first country to receive a World Bank loan was France. The Bank's president at the time, John McCloy, chose France over two other applicants and Chile; the loan was for US$250 million, half the amount requested, it came with strict conditions. France had to agree to produce a balanced budget and give priority of debt repayment to the World Bank over other governments.
World Bank staff monitored the use of the funds to ensure that the French government met the conditions. In addition, before the loan was approved, the United States State Department told the French government that its members associated with the Communist Party would first have to be removed; the French government complied and removed the Communist coalition government - the so-called tripartite. Within hours, the loan to France was approved; when the Marshall Plan went into effect in 1947, many European countries began receiving aid from other sources. Faced with this competition, the World Bank shifted its focus to non-European countries; until 1968, its loans were earmarked for the construction of infrastructure works, such as seaports, highway systems, power plants, that would generate enough income to enable a borrower country to repay the loan. In 1960, the International Development Association was formed, providing soft loans to developing countries. From 1974 to 1980 the bank concentrated on meeting the basic needs of people in the developing world.
The size and number of loans to borrowers was increased as loan targets expanded from infrastructure into social services and other sectors. These changes can be attributed to Robert McNamara, appointed to the presidency in 1968 by Lyndon B. Johnson. McNamara implored bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks, the primary sources of funding. Rotberg used the global bond market to increase the capital available to the bank. One consequence of the period of poverty alleviation lending was the rapid rise of third world debt. From 1976 to 1980 developing world debt rose at an average annual rate of 20%. In 1980 the World Bank Administrative Tribunal was established to decide on disputes between the World Bank Group and its staff where allegation of non-observance of contracts of employment or terms of appointment had not been honored. In 1980 McNamara was succeeded by Alden W. Clausen. Clausen crafted a different mission emphasis, his 1982 decision to replace the bank's Chief Economist, Hollis B.
Chenery, with Anne Krueger was an example of this new focus. Krueger was known for her criticism of development funding and for describing Third World governments as "rent-seeking states". During the 1980s the bank emphasized lending to service Third-World debt, structural adjustment policies designed to streamline the economies of developing nations. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank had been responsible for "reduced health and educational levels for tens of millions of children in Asia, Latin America, Africa". Beginning in 1989, in response to harsh criticism from many groups, the bank began including environmental groups and NGOs in its loans to mitigate the past effects of its development policies that had prompted the criticism, it formed an implementing agency, in accordance with the Montreal Protocols, to stop ozone-depletion damage to the Earth's atmosphere by phasing out the use of 95% of ozone-depleting chemicals, with a target date of 2015.
Since in accordance with its so-called "Six Strategic Themes", the bank has put various additional policies into effect to preserve the environment while promoting development. For example, in 1991 the bank announced that to protect against deforestation in the Amazon, it would not finance any commercial logging or infrastructure projects that harm the en
International Monetary Fund
The International Monetary Fund is an international organization headquartered in Washington, D. C. consisting of "189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, reduce poverty around the world." Formed in 1944 at the Bretton Woods Conference by the ideas of Harry Dexter White and John Maynard Keynes, it came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international payment system. It now plays a central role in the management of balance of payments difficulties and international financial crises. Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money; as of 2016, the fund had SDR477 billion. Through the fund, other activities such as the gathering of statistics and analysis, surveillance of its members' economies and the demand for particular policies, the IMF works to improve the economies of its member countries.
The organisation's objectives stated in the Articles of Agreement are: to promote international monetary co-operation, international trade, high employment, exchange-rate stability, sustainable economic growth, making resources available to member countries in financial difficulty. IMF funds come from two major sources:quotas and loans. Quotas, which are pooled funds of member nations, generate most IMF funds; the size of a member's quota depends on its financial importance in the world. Nations with larger economic importance have larger quotas; the quotas are increased periodically as a means of boosting the IMF's resources. The current Managing Director and Chairwoman of the International Monetary Fund is French lawyer and former politician, Christine Lagarde, who has held the post since 5 July 2011. Gita Gopinath was appointed as Chief Economist of IMF from October 1, 2018, she received her Ph. D. in economics from Princeton University. According to the IMF itself, it works to foster global growth and economic stability by providing policy advice and financing the members by working with developing nations to help them achieve macroeconomic stability and reduce poverty.
The rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance-of-payments financing, provide the justification for official financing, without which many countries could only correct large external payment imbalances through measures with adverse economic consequences; the IMF provides alternate sources of financing. Upon the founding of the IMF, its three primary functions were: to oversee the fixed exchange rate arrangements between countries, thus helping national governments manage their exchange rates and allowing these governments to prioritize economic growth, to provide short-term capital to aid the balance of payments; this assistance was meant to prevent the spread of international economic crises. The IMF was intended to help mend the pieces of the international economy after the Great Depression and World War II; as well, to provide capital investments for economic growth and projects such as infrastructure.
The IMF's role was fundamentally altered by the floating exchange rates post-1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine if a shortage of capital was due to economic fluctuations or economic policy; the IMF researched what types of government policy would ensure economic recovery. A particular concern of the IMF was to prevent financial crisis, such as those in Mexico 1982, Brazil in 1987, East Asia in 1997–98 and Russia in 1998, from spreading and threatening the entire global financial and currency system; the challenge was to promote and implement policy that reduced the frequency of crises among the emerging market countries the middle-income countries which are vulnerable to massive capital outflows. Rather than maintaining a position of oversight of only exchange rates, their function became one of surveillance of the overall macroeconomic performance of member countries, their role became a lot more active because the IMF now manages economic policy rather than just exchange rates.
In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality, established in the 1950s. Low-income countries can borrow on concessional terms, which means there is a period of time with no interest rates, through the Extended Credit Facility, the Standby Credit Facility and the Rapid Credit Facility. Nonconcessional loans, which include interest rates, are provided through Stand-By Arrangements, the Flexible Credit Line, the Precautionary and Liquidity Line, the Extended Fund Facility; the IMF provides emergency assistance via the Rapid Financing Instrument to members facing urgent balance-of-payments needs. The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries; this activity facilitates international co-operation. Since the demise of the Bretton Woods system of fixed exchange rates in the early 1970s, surveillance has evolved by way of changes in procedures rather than through the adoption of new obligations.
The responsibilities changed from those of guardian to those of overseer of members' policies. The Fund analyses the appropriateness of each member country's economic and financial policies for achieving orderly economic growth, assesses the consequences of these policies for other countries and for the global e