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The Legal Character of the Bank for International Settlements

Published online by Cambridge University Press:  04 May 2017

John Fischer Williams
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Extract

We are all of us today, even we international lawyers, disciples of Heraclitus. The international world shows itself so clearly in a “state of flux,” that a doubt on the central doctrine of that philosopher is no longer permissible. We theorists have therefore to take heed to build our doctrines on tendencies rather than on “facts” ; otherwise when we have finished constructing our systems, it may happen that the facts are no longer what they were when we began building, and the system is out of date before it is established.

Type
Research Article
Information
American Journal of International Law , Volume 24 , Issue 4 , October 1930 , pp. 665 - 673
Copyright
Copyright © American Society of International Law 1930

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References

1 See Oppenheim, , International Law (4th Ed.),Vol. I,Peace, p. 175. (London: Longmans,1928.)Google Scholar

2 See contra, Les Noiwelles Tendances du Droit International , Politis, N. (Paris: Haehette, 1927 Google Scholar.) The question was discussed at the 1929 meeting of the Institut de Droit International

3 Pollock, and Maitland, History of English Law (1st Ed.), I, 469 Google Scholar.

4 Other examples may be found among international “unions” for special purposes. Thus Sir Moore, W. Harrison(British Year Book of International Law, 1930,p. 173 Note on the International Copyright Conference)Google Scholardescribes the International Copyright Union as a “ permanent international administration with a juristic personality.”

5 Report of the Committee of Experts on Reparations (British Government White Paper,1929, Cmd. No. 3343), Annex I, par. 3: “ It shall perform as trustee for the creditor countries the entire work of external administration of this Plan.” (Supplement to the Journal, April, 1930 (Vol. 24), p. 110.)

6 Report of Committee of Experts on Reparations, par. 60; Supplement to the Journal, April, 1930, p.90.

7 Ibid., par. 54.

8 Report of Committee of Experts on Reparations, par. 96 and Article X V of the Hague Reparation Agreement with Germany; Supplement to April Journal, p. 96, and to this Journal, pp. 326, 340.

9 Ibid., Annex I, par. 88

10 Ibid., Annex I, par. 84.

11 Report of Committee of Experts on Reparations, par. 54.

12 Ibid., par. 55.

13 Ibid., Annex I, par. 4.

14 It may assist the reader if he be given, in a summary form, the history of the events and documents relating to the constitution of the bank:

Spring of 1929. Sittings and report of the Experts Committee on Reparations (Young Plan). The Plan contains a very full sketch o f the organization proposed for the bank, but does not discuss the legal aspects of its incorporation. (Supplement to the Journal, April, 1930, Vol. 24, Annex I, p. 110.)

Autumn of 1929. Sittings of the Organization Committee of the bank at Baden-Baden. This committee proposed the incorporation of the bank under the municipal law of a single state, the founders being the central banks o f the chief European countries, together with a financial institution of the United States. The committee also drafted a “ trust agreement” i.e., an agreement between the creditor countries and the bank as “ trustee,” regulating the dealings of the bank with German reparation payments. The Trust Agreement in its final form is substantially identical with the draft o f the Organization Committee. (The draft is printed in British Government White Paper, 1930, Cmd. No. 3484, p. 68; the final agreement in Supplement to this Journal, p. 284.)

December, 1929. The Legal Committee of the Hague Conference on Reparations met at Brussels. This committee, working on the basis of the documents prepared at Baden-Baden by the Organization Committee, proposed that the States interested in reparations should by international agreement recognize that the bank, founded as proposed at Baden-Baden, possess the quality of an “ international body corporate.“ (The draft of the Legal Committee has not been published.)

January, 1930. The Hague Conference, on the representations of the Bank Organization Committee, decided to omit from the international reparation agreement the description of the bank as an international body corporate. The governments interested in reparations concluded an agreement with Switzerland according to which that country agreed to grant a “ charter” with “ statutes,” in the form already prepared by the Organization Committee, to the new bank. (Cmd. 3484, p. 110; Supplement to this Journal, p. 323.)

June, 1930. The necessary ratifications of the Hague Reparation Agreement having been given, the bank was constituted under Swiss law in exact conformity with the scheme approved in January at The Hague.

15 As a postscript to the above, it may be added that another of the Hague Agreements of January, 1930, that between Hungary and her creditors, which settled at last that question of the “ Optants” which haslong agitated Eastern Europe, provides for the creation of two “ Funds” which are to possess legal personality and which, so far as the agreements themselves go, are constituted by international action alone without the grant of any “ charter” or other act of establishment made by the authority of any one State. These “Funds” are thus international bodies corporate in the strictest sense of the word: they are created by an international instrument and they possess, at any rate within the territories of the States which have established them, the capacity of enjoying rights and fulfilling duties and, therefore, corporate personality. They are not incorporated by and in any one State nor subject to any one system of municipal law.

These “ Funds“ will issue bonds, but, unlike the Bank for International ettlements, they will not carry on any business that might compete with other institutions. They are nourished by money coming from States and not from individuals, and designed to undertake, in the place and on behalf of States, obligations of international origin which otherwise would fail to be borne by those States. The “ Funds” are thus a highly ingenious creation, begotten of the modern necessities of international intercourse; they are, doubtless, examples and forerunners of other similar institutionsin the future.