Evening star., 1947-03-09
World Bank Has Vital Role in Economic Crisis
Wise Use Of Working
Capital Can Do
Much Good.

pending loan applications Of $2,500.-
00o, 900, did not do q dollars worth
Of business. In other words, 1t was
not yet = going concern" And this
inactivity was due, not 30 much TO
the lack OF . president as to the
availability Of president who would
reflect . loan policy calculated to
render the banks debentures At
tractiye to the institutional" In
vestors who would b the normal
purchasers.
The man most In view has been
the man actually elected to the
presidency week before last. He Is
John ]. McCloy, 81 years old, for
mer Assistant Secretary Of War and
prominent New York attorney, Mr..
McCloy, who had at nrst declined
the offer. accepted on certain con-
ditions, notably an agreement by the
executive directorate Of the bank
to make two important appoint
ments: Those OF Eugene r. Black
as United States executive director
and Robert L. Garner Is vice presi-
dent. Both men are prominent In
New York banking circles, Mr.. Black
being vice president Of the Guaranty
Trust Co.. while Mr.. Garner. at one
time an oflicer Of the Guaranty Co..
the former securities branch OF the
Guaranty Trust Co., Is now vice
president OF General Foods.
U. s. Voice Predominant.
Those appointments are. in them
selves, an assurance that the Bank
will be run according to sound
banking principles, and that when
the Banks securities are placed
upon the market, they will inspire
the confidence which investors re-
quire. In other words, the prolonged
uncertainty as to the Interpretation
Of the Banks lending formula has
been dissipated. and the implement
tation OF its policy can now proceed.
BY a curious coincidence, the very
day after the election of Mr.. McCloy
to the presidency of the World Bank,
the World Fund became fully opera
tive.
It should be understood that, in
both institutions, the voice of the
United States is predominant. This
is because voting power is measured
in terms Of subscription units. AS
OF last September, out Of a total Of
S6 200 units representing total sub
scriptions Of $7,67o, o,ooo, 900, the
United States could vote $4,000 units
more than one-third Of the total
voting power. The United Kingdom
(Britain) came next with 1920
votes, which gave q bare majority
to the two English speaking powers,
enhanced by Canada's $500 votes, to
say nothing of those of South Africa
and India. Holdings of the remain
ing IS nation-members were geo.
graphically and practically too di-
verse to be at all likely to constitute
an effective opposition bloc.
Ready to Function.
The effective preponderance Of
the United States in the world Bank
set-up is the logical reflection Of the
measure Of its commitments and
responsibility. Having put up much
of the money, and constituting with
Canada) virtually the only invest
ment market for the sale of the
Banks debentures, the United States
should justly have major say in its
management and policies. Under
its new president there's every rea-
son to believe that the World Bank
will now begin to function in the
sound, constructive way envisaged
by its creators. And, in connection
with the World Fund, it is to be
hoped that their joint activities will,
weigh notably in the handling of the
economic crisis from which the en-
tire globe today suffers.
AS Mr.. McCloy stated after his
formal election to the presidency:
THE world is in a most uncertain
state, yet there are many people
in 1t who have the will to work and
the skills to produce. Loans alone
will not and cannot accomplish all
that must be done. but some work
ing capital productivity employed
,an preatly helm