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This Week in World Bank History: July 14 – 20

July 19, 2002 – A presentation of historical events by the World Bank Group Archives, Information Solutions Group (ISG).

1948. World Bank Advisory Council holds its first meeting

July 15, 1947– The IBRD enters the bond market for the first time with an offering of $250 million. E. F. Dunstan, director of marketing, announced that the offering was substantially oversubscribed, and the bonds immediately sold at a premium over the public offering price. "It is hard now to comprehend how difficult it was initially to make investors, regulatory bodies and legislatures understand how essentially sound an institution we are. Indeed it was with considerable trepidation that we announced plans for our first bond offering of $250 million in the United States on July 15, 1947, through 1,700 securities dealers.

This was the largest consortium of its kind which, up to that time, had ever been organized in this country. As the date of offering drew near, tension in the Bank mounted to a high pitch, for as of then we had no experience of Mr. Black’s magic touch with the bond market. The Bank’s bonds appeared on the New York Stock Exchange ticker for the first time immediately after the 10 o’clock opening, and by noon the issue was over-subscribed. The relief in the Bank was considerable. I don’t believe that any subsequent transaction matched the excitement of the first."

Richard H. Demuth in International Bank Notes, June 1961.

July 16, 1947 – A mission, the Bank’s first to the country, goes to Brazil.

July 16, 1948   – "Mr. Garner…suggested that, in the interest of dispatch and as a matter of courtesy, staff members should dial their own intramural calls. A number of staff members…still instruct their secretaries to ‘get so-and-so on the line’. This means that three persons, the secretary of the caller, the secretary of the person called, and the person called, are immobilized for the convenience of the caller, to save his using the dial. Staff members are asked to cooperate in eliminating the waste of time which this procedure involves." Chauncey G. Parker. Director of Administration. Administrative Circular, July 16, 1948.

1956. Robert L. Garner, President
of IFC

July 19-23, 1948 – The World Bank’s Advisory Council holds first its annual meeting. Article V, Section 6(a) of the Articles of Agreement of the World Bank provided for an Advisory Council: "There shall be an Advisory Council of not less than seven persons selected by the Board of Governors including representatives of banking, commercial, industrial, labor and agricultural interests, and with as wide a national representation as possible…The Council shall advise the Bank on matters of General policy. The Council shall meet annually and on such other occasions as the Bank may request." 

There was a rumor that Albert Einstein was to be a member of the Advisory Council, but eventually the membership of the Council consisted of Mr. Leon Jouhaux, of France, prominent in international labor organizations; professor Lionel C. Robbins, British economist; Mr. Pedro Beltran, Peruvian agriculturist and statesman; Dr. S.K. Alfred Sze, former Chinese Ambassador to the United States and Britain; Sir Arthur Salter, Chairman, eminent British economist; Mr. Edward E. Brown, of the United States, Chairman of the Board of the First National Bank of Chicago; Colonel R. Dickson Hardness, Canadian industrialist; Sir C. Venkata Raman, of India, internationally famous for research in physics; Mr. Michal Kalecki, Polish economist; and the Honorable Herbert Hoover, former President of the United States.

The Advisory Council held annual meetings at the Bank in 1948 and 1949. As a result of this experience, the Chairman of the Council advised the President of the Bank and the Board of Governors that, in his personal opinion, no Advisory Council appointed in accordance with the Articles of Agreement and entrusted with the function there defined was likely to have a value commensurate with its cost in time and money. A majority of the Bank’s first Advisory Council expressed the same opinion. In light of the views thus expressed, the Executive Directors recommended to the Board of Governors in 1949 that the organization, selection, duties and all other matters relating to the Advisory Council be studied and that, pending completion of this study, the selection of new members of the Advisory Council be deferred. The Board of Governors approved this recommendation and no new members have since been appointed. The International Bank for Reconstruction and Development, 1946-1953. (Johns Hopkins Press: Baltimore, 1954, p. 23.) The Council has never met again since July 1949, and no new members have been appointed.

1952. Public Relations Department staff members

July, 1952 – The Public Relations Department is profiled in International Bank Notes. "The task of the Public Relations Department is to tell the world about the Bank…The Bank is in the business of lending—and a public relations job starts each time the Bank makes a loan. Even before negotiations for a loan have entered the final stage the Department is at work. The whole operation may start on Friday morning when Marion Brooks calls in all members of the Department for a weekly staff meeting in Public Relations Director Harold Graves’ office.

At the meeting Mr. Graves reviews current Bank operations and informs the staff of any new developments and new loans that are about to be made... Agnes Maher will then start preparing a press release about the loan. When completed and cleared, the release is stenciled by Audrey Pettit. Then a copy is airmailed to Drew Dudley in Paris, where Mme. Pasquier has it duplicated; Jose Camacho prepares a special version of the release in Spanish, which Graciela Marquez, the Department’s bilingual secretary, stencils. Doris Eliason, who is the king-pin of the distribution machinery, sends the release to the Printing and Drafting Section for duplication and alerts the Mailing Section that a release announcing a loan will be issued soon.

Within minutes after a loan is signed world-wide distribution of the release starts – copies are delivered to wire services and newspaper correspondents in Washington and Paris; mailings (regular and air) begin in Washington and Paris which will take the release to financial, research and academic institutions; to libraries, to Government offices, and to individuals in more than 60 countries. Five thousand copies of a loan release are distributed." International Bank Notes, July, 1952.

July 16, 1952 – William Howell is appointed director of administration, succeeding Chauncey Parker, who resigned to become Chief of the Mutual Security Agency’s Special Mission in Italy. "Everybody in the Bank knows Mr. Howell and Mr. Howell knows everybody. He is a man of astounding memory and never seems to forget a name. In August 1946 Mr. Howell came to the Bank as Assistant to Mr. Harold Smith, who was the Vice President at that time. Since then he has been Acting Personnel Officer, Personnel Manager, and Assistant Director of Administration. At the time of his appointment there were less than 50 people on the staff. ‘I’ve watched the growth of the Bank and I know it is possible to mold a good working team out of a staff recruited from many countries. I can be very enthusiastic about that after my experience.’ Mr. Howell said that the Bank’s administrative policies and practices became more orderly after Mr. Parker [Director of Administration] joined the staff. 'It is most important to have the administrative and personnel policies clearly established so that they will aid and assist employees without being paternalistic.’ Mr. Howell’s hobby is baseball. He reads The Sporting News every week from end to end. We are devoted to our Mr. Howell." International Bank Notes, January 1, 1950.

July 19, 1954 First funding for Austria: Loan 0102 Electric Power Project.

July 14, 1955  IBRD Articles of Agreement are signed by Afghanistan, which becomes the 57th member of the Bank.

1952. William D. Howells, Director of Administration, leaves work for the evening

July 20, 1956 – The International Finance Corporation charter comes into force, with an authorized capital of $100 million. The first 31 members were: Iceland, Canada, Ecuador, United States, Egypt, Australia, Mexico, Costa Rica, Ethiopia, Peru, Dominican Republic, United Kingdom, Panama, Ceylon, Haiti, Guatemala, Nicaragua, Bolivia, Honduras, India, El Salvador, Pakistan, Jordan, Sweden, Norway, Japan, Denmark, Finland, Colombia, Germany and France.

"The Charter of the International Finance Corporation came into force today when France and Germany completed the action necessary for membership. The organization of the Corporation can now commence and within the next few days the Board of Directors will hold its inaugural meeting. IFC’s Charter required for the creation of the Corporation the adherence of at least 30 member countries subscribing at least $75 million to the Corporation’s capital. The Corporation now has 31 members and capital subscriptions of $78,366,000. Twenty other countries have indicated their intention of becoming members of IFC, and the Corporation is authorized to have a total capital of $100 million." World Bank Press Release No. 452, July 20, 1956.

Robert L. Garner was appointed as the first President of the Corporation. John G. Beevor was appointed Vice President and Deputy to the President. Richard H. Demuth was Assistant to the President, and Mr. Davison Sommers was General Counsel. The World Bank’s Secretary, Treasurer, Director of Administration, and Director of Information were appointed to the same positions in the Corporation: "It has been thought desirable, in the interests of economy and to avoid duplication of effort, that to the greatest extent practicable the Corporation should make use of Bank staff and services. The Corporation will not, therefore, have its own service departments, but will call upon the Bank’s Legal, Treasurer’s and Administration Departments, its Offices of the Secretary and Information and its Economic Staff, as needed from time to time." In addition to those individuals named above, IFC consisted of an Engineering Adviser, with one assistant, a small group of financial officers (under ten in number), and eight operations officers. International Finance Corporation Inaugural Report, July 24 – September 15, 1956. In the first annual report (1956 – 1957), the Corporation listed twelve full time officers and professional staff.

1954. Loan 0102 Austria Electric Power Project – Hydroelectric power project and dam

The idea of an International Finance Corporation was originally brought up at the 1944 Bretton Woods Conference, but was postponed for later discussion. In 1951 the US International Development Advisory Board called for the establishment of the IFC, followed a few months later by a similar call from the United Nations’ ECOSOC. The World Bank responded in 1952 with a preliminary proposal for the IFC, and after ongoing discussions, the proposed charter for the IFC was submitted to member governments in April 1955.

"When the Corporation opened its doors in mid-1956, it faced two fundamental handicaps, the results of compromises between advocates and doubters. First, its $100 million capital – only a quarter of what had been planned and originally recommended – was de minimis even in those days of very low inflation. This figure severely limited individual project size and total volume of operations. Second, investment in equity was banned, thus denying precisely the kind of capital needed by emerging enterprises in the developing countries…

The first five years, when approvals averaged an annual $9 million, were a constant struggle to work around the Corporation’s Articles of Agreement and to demonstrate the need to change them. They were finally changed in 1961, at the end of Bob Garner’s presidency, to allow investment in equity and borrowing from the Bank…The ‘60’s were a heady time. From 1962 to 1966, approvals averaged double the annual volume of the first five years, and tripled again to $67 million in the following five years…In 1962, the Bank transferred to IFC responsibility for handling all development bank business…

In 1965 the Bank similarly transferred responsibility for industrial projects to IFC. (Those responsibilities reverted to the Bank in due course.)… In the ‘60’s IFC began to promote its services actively and to take seats on boards of directors. The Corporation was also stimulated by its new international advisory committee…It began its syndication activities, increasingly placing its own investments into the portfolios of a host of private financial institutions…IFC in the ‘60’s spread its net wider to include other sectors and it began to establish priorities for the promotion of its activities, concentrating on cement, fertilizer, agro-industries, tourism and development finance institutions...As the new decade started, the Corporation began to focus on a more important and diversified role in promoting capital markets…

These expansive trends were brought into sharp focus by the Pearson Commission Report which in 1969 urged IFC, among other things, to stress developmental impact as well as profits, to pursue explicit strategies in its client countries, to seek out and promote investments as well as finance them, and to diversity and increase support to financial institutions." "IFC at Liftoff: A Stroll Down Memory Lane with Bill Diamond." The Bank’s World, August, 1991

July 14, 1958  Final Suez Canal compensation agreement signed in Geneva.

July 18, 1958  Egypt and Syria join together to form a single membership known as United Arab Republic (bringing total IBRD membership to 66).

1954. Loan 0102 Austria Electric Power Project – electrical transmission power lines extend over the mountains

July 18, 1961  The United Nations Special Fund, the Government of Thailand, and the World Bank sign an agreement for a detailed study of the problem of siltation at the Port of Bangkok and for a study of the economic feasibility of building an alternative port at Sriracha. The World Bank was executing agency for the studies, having general responsibility for execution of the project including disbursement of the money made available by the Special Fund.

July 19, 1965 – IBRD, IFC, and IDA Articles of Agreement are signed by Malawi, which becomes the 103rd member of the Bank, the 79th member of IFC, and the 95th member of IDA.

July 20, 1966  The first Consultative Group for Brazil, convened by the World Bank, meets in Paris and is attended by representatives of eleven governments and six international aid organizations.

July 16, 1970  Liberia becomes the 55th member of ICSID.

July 17, 1970  Zambia becomes the 56th member of ICSID.

July 14, 1971  Swaziland becomes the 61st member of ICSID.

July 17, 1972  The World Bank publishes Agriculture Sector study. The paper discussed the role of agriculture in achieving the key development goals of greater production and exports, more employment, and a better distribution of income. Policy issues of wide relevance for less developed countries were singled out for attention. After a review of the Bank Group's past activities in agriculture, projections were made of its future work in the sector.

1965. Malawi becomes a member of the World Bank, IDA, and IFC

July 15, 1976  The World Bank approves a $30 million loan – Indonesia Loan 1318 – for the Indonesia transmigration program, to move settlers from the island of Java to other parts of the country. "The migration of settlers in Indonesia from the overpopulated island of Java to other parts of the country is being assisted by the World Bank with a loan of $30 million for a project in Sumatera. It is the first time the Bank has supported the Indonesian transmigration program.

The project consists of the establishment of a new 4,500-family settlement, upgrading of an existing 12,000-family settlement, and technical support for design and implementation of future programs…The Government considers transmigration as a means of providing the landless and other rural poor of the Inner Islands with land assets which offer the opportunity over time for productive labor and increasing income. Official transmigration dates back to 1905, when the Dutch colonial administration tried to alleviate population pressure in parts of Java by colonization of the Outer Islands." World Bank Press Release No. 77/11, July 16, 1976.

July 16, 1976 – The Bank approves a loan to Guatemala for national reconstruction following the devastating earthquakes of February 4, 1976.

July 18, 1983  Gregory Ingram is appointed Director, Development Research Department.

July 16, 1984  First meeting of the Consultative Group for Maldives, held in Paris, is attended by representatives of nine governments and seven aid organizations.

July 14, 1987  Richard Frank succeeds Mr. Hilary P. Reddy as IFC Vice President, Finance and Resources Management.

1987. Richard Frank

July 15, 1987  First funding for Tonga: Credit 1813 – Tonga Development Bank Project. The Tonga Development Bank Project provided the Tonga Development Bank (TDB) with adequate long-term resources to meet investment demand, particularly in the agriculture, industry and tourism sectors. Institution building assistance was provided to TDB through various forms of technical assistance designed to improve TDB's profitability and operational efficiency. The project provided resources to TDB to help meet its projected level of lending operations over the three year commitment period.

July 19, 1989  President Conable flies to Morocco and Algeria, his first visit to these countries since becoming Bank President in 1986.

July 19, 1989  The   World Bank announces its Expanded Cofinancing Operations (ECOs) program, which enables the Bank to provide flexible support for borrowers’ financing transactions and will broaden the scope of the bank’s commercial cofinancing program—the "B-loan" program.

July 14, 1991  Mongolia becomes the 95th member of ICSID.

July 18, 1991  The World Bank publishes a Forest Policy strategy paper, announcing that it will not, under any circumstances, finance commercial logging in primary tropical moist forests (TMFs). In addition, the financing of infrastructure projects which may lead to the loss of primary forests would be subject to the rigorous environmental assessments that the Bank conducts for projects that raise environmental and resettlement issues. The new policy paper was the first the Bank had issued on this subject since 1978. A substantial increase in the world’s understanding of, and concern about, the forest sector of the developing world during the intervening 13 years prompted the new paper.

July 14, 1992  The World Bank establishes a Resident Mission in Tirana, Albania, headed by Kutlay Ebiri.

July 19, 1994  MIGA Articles of Agreement are signed by Ukraine, which becomes the 123rd member of MIGA.

1989. President Barber B. Conable

July 15, 1998 – Bank President James Wolfensohn sends memo to all staff regarding allegations of corruption, and vows to vigorously protect the reputation of integrity and independence that the Bank has earned. "You may in the coming days hear reports that internal investigations are underway of possible corruption the part of Bank staff. I know that we share a passionate commitment to fight corruption, especially as we believe in the integrity of this institution and in the determination of staff to live up to the highest professional standards. The trigger for these investigations was my decision, as your President, that if we were going to campaign against corruption outside the Bank in our borrowing countries, we had to be absolutely certain that we held ourselves to the highest standards on the inside.

You will recall my comments two years ago at the Annual Meetings about the ‘cancer of corruption’. When I made that statement, I also made it clear that our drive against corruption would not stop at our own doors….This is not an easy process for an organization to undergo. You should, however, start from the knowledge that over our fifty-four year history, we have established an unparalleled reputation for our integrity, our independence, and our behavior. It is critical that we protect and enhance that reputation. This we will do vigorously and without fear." Memo from the President to all staff, July 15, 1998

July 18, 1999 – President Wolfensohn visits Albania, Macedonia, and Kosovo.

July 18, 2000 – The World Bank Group and IMF approve a comprehensive debt reduction package for Benin under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Total relief from all of Benin's creditors is worth around US$460 million. This is equivalent to US$265 million in net present value (NPV) terms, and about 31 percent of the total NPV of debt outstanding at end-1998 after the full use of traditional debt relief mechanisms.

July 17, 2001  US President George Bush delivers a speech to an invited audience in the Preston Auditorium.

1999. President James D. Wolfensohn (during a trip to Turkey)

July 18, 2001  The World Bank Board of Executive Directors endorses a new Environmental Strategy that aims to further integrate environmental concerns into the Bank’s projects and programs. The strategy placed emphasis on developing countries’ priorities, spelling out three objectives: Improving the quality of life; Improving the quality of growth; and Protecting the quality of the regional and global commons such as climate change, forests, water resources and biodiversity. The new policy was the result of the Bank’s own analysis, supported by over thirty consultations with stakeholders in Sub-Saharan Africa, Latin American and the Caribbean, the Middle East and North Africa, South Asia, East Asia and the Pacific, Europe, Japan and North America. The Bank’s Environment Strategy Consultation website received more than 35,000 download requests during the consultation process.

Without Records there is no History. Courtesy of ISG’s World Bank Group Archives.




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