Address at the Joint Meeting of the International Bank for Reconstruction and Development and the International Monetary Fund.

Mr. Chairman, members of the Boards of Governors, ladies and gentlemen:

I am very happy to welcome you to Washington again. A great deal has happened since your last meeting here in 1949. The free nations of the world have joined together in a great cooperative effort to protect themselves against aggression. I am sorry to say, much of our energy must now be given to the task of building up military defenses for the free world.

Nevertheless, the tasks of the International Bank and the International Monetary Fund are as important as they ever were.

World peace and security are not merely matters of military defense. It is just as necessary and just as important to have a firm economic foundation on which the structure of peace can rest.

The two institutions that are meeting here today were created in recognition of that fact. They were started even before the end of World War II, and in fact before the United Nations was organized in San Francisco.

But these financial institutions are part and parcel of the same great effort as the United Nations: the effort to attain peace in the world. They are responsible for an essential part of the work that many countries must do to secure the peace, and to make the world a better place in which to live.

The major purpose of the International Monetary Fund is to help the growth of a vigorous system of world trade. In carrying out this purpose, the Fund tries to reduce restrictions on foreign exchange that stifle world trade.

This job obviously will be more difficult because of the special economic problems created by the defense programs of the free nations. But all of us now recognize the principle that each member country has a legitimate and vital interest in the exchange rates and policies of every other member country.

I am sure, therefore, that none of the countries which are members of the Fund will use the present difficulties to justify restrictions on trade and exchange which are not actually needed to further the program of mutual defense.

The International Bank has now been in existence for more than 5 years. Last year, in spite of international tension and uncertainty, it loaned almost twice as much money as it had the year before. Virtually all these loans were made to economically underdeveloped countries. They are loans which will help to make these countries stronger and more prosperous.

I am glad to see that nearly half the money loaned by the Bank for developmental purposes has been loaned for the expansion of electric power production. Cheap electric power is one of the greatest needs of many of the underdeveloped countries. It will do wonders in opening up new opportunities for their people.

The Bank has also made major loans for such basic improvements as new roads, railroads, the construction of port facilities, increasing agricultural production, and the expansion of telephone and telegraph lines. Such projects as these are the foundation stones of a long-range program of economic development.

I hope that the Bank will continue to go ahead with projects of this kind.

The defense program of the free nations will create some difficulties. There will be shortages of certain capital goods. But we must not slacken our efforts to create new sources of wealth, and thereby to bring about higher standards of living in the economically underdeveloped areas.

The cause of freedom to which we are dedicated will not permit us to fall behind in this effort.

The economic resources of the free nations, taken together, are sufficient to provide both military security and economic progress.

As we move forward with our defense effort, we should also do everything possible to increase the prosperity and raise the living standards of the free nations. We should remember that this is one of the greatest positive goals of the United Nations.

We have not joined together for purely defense purposes. We are not an association for preserving things as they are. Our great objectives are to secure peace and to create better lives for all of the peoples of the world.

Our faith is that free men, working together, can attain these objectives.

I sincerely hope that you will have a successful meeting, and make great advances in the year ahead.