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“Maybe the Fund needs something else.” Per Jacobsson, from the Bank for International Settlements to the International Monetary Fund, 1931–1963

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History of the IMF

Part of the book series: Studies in Economic History ((SEH))

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Abstract

On 7 September 1956, the IMF Executive Board offered the position of IMF Managing Director to Per Jacobsson (Horsefield 1969, p. 387). Jacobsson, a Swedish economist, had been Economic Adviser at the Bank for International Settlements in Basel, Switzerland, since 1931. The offer came as a surprise to many, but in spite of the negative advice of some of his close colleagues and friends, Jacobsson decided to accept it (Jacobsson 1979, pp. 283–284). He would remain the Fund’s Managing Director until his sudden death from an heart attack on 5 May 1963, at the age of 69.

The views expressed are those of the author and not necessarily those of the Bank for International Settlements.

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Notes

  1. 1.

    For a broader perspective, see also: Boughton 2004.

  2. 2.

    Black 1991, pp. 71–76. Charles Kindleberger, who had worked with Jacobsson at the BIS in 1939–1940, felt he suffered from egomania: Kindleberger 1980.

  3. 3.

    See Per Jacobsson’s biography, written by his daughter: Jacobsson 1979. Per Jacobsson himself wrote a semi-autobiographical essay: Jacobsson 1958a.

  4. 4.

    Among them Otto Niemeyer (1883–1971), then of the UK Treasury and later of the Bank of England; and Pierre Quesnay (1895–1937), later the first General Manager of the BIS.

  5. 5.

    On the history of the BIS, see in particular: Toniolo 2005. Also: Yago 2013.

  6. 6.

    See for instance the testimony from Rudolf Pfenninger, a later General Manager of Swiss Bank Corporation: “He would listen and was always liberal in his approach, imaginative and generous with his ideas. I never met anyone who was so generous with his ideas” (quoted in: Jacobsson 1979, p. 99). Also – albeit somewhat more pejorative – Charles Kindleberger’s memory, who worked with Jacobsson at the BIS in 1939–1940: “[Per Jacobsson] was an overwhelming personality. One might start talking to him in the center of a room, and find oneself after a time backed into a corner with his large frame and thick glasses still in attack” (Kindleberger 1991, p. 55).

  7. 7.

    BISA, 9.1.002 – Monetary and Economic Department (19 Oct 1932), General problems of a return to a common international standard (CB 58), Basel: BIS. And: BISA, 9.1.002 – Monetary and Economic Department (20 Oct 1932), General problems of the gold standard (CB 59), Basel: BIS.

  8. 8.

    UNIBAS-HAN, Basel, NL 324, A/63 – Nachlass Per Jacobsson, Diary 63, entry 22 April 1946.

  9. 9.

    Jacobsson argued that Keynes’ theories, and in particular the demand-side policies he proposed, disregarded the often delicate balance of payments situation of many countries, other than the UK and the USA, and paid little or no attention to the importance of currency stability and credibility (Jacobsson 1958a, p. 43).

  10. 10.

    UNIBAS-HAN, Basel, NL 324, A/41 – Nachlass Per Jacobsson, Diary 41, entry 23 February 1942.

  11. 11.

    BISA, 9.1.003 – Monetary and Economic Department (April 1943), Proposal for an International Clearing Union (‘Keynes Plan’) (HS 87), Basel: BIS. Also: BISA, 9.1.003 – Monetary and Economic Department (June 1943), Unitas and Bancor, Two Plans of International Payment (HS 91), Basel: BIS. And BISA, 9.1.003 – Monetary and Economic Department (10.07.1943), Proposal for a United and Associated Nations Stabilization Fund (‘White Plan’) (HS 89), Basel: BIS.

  12. 12.

    BISA, 9.1.003 – Monetary and Economic Department (01.09.1943), The Place of the United States in the post-war Economy (HS 96), Basel: BIS.

  13. 13.

    An excellent recent overview of Italy’s economic history can be found in: Toniolo 2013. For the immediate postwar period see also: Cotula 2000.

  14. 14.

    On Luigi Einaudi’s stance as a liberal economist and his view on society and social justice see: Gigliobianco 2010.

  15. 15.

    UNIBAS-HAN, Basel, NL 324, A/66 – Nachlass Per Jacobsson, Diary 66, entry 20 January 1947. Jacobsson was impressed by Einaudi’s “moral strength”. He found him to be “maybe somewhat oldfashioned liberal in his economics, but (..) transparently honest, without deceit or malice. As a liberal he has a sense for equilibrium: he won’t believe that control (often ineffective in the bargain) does away with the need of establishing an equilibrium”.

  16. 16.

    Baffi reciprocated the appreciation in writing to Jacobsson, shortly after the latter had left Rome: “I have learnt much from you. I often had the impression of being the inhabitant of a provincial town who through you came in touch with the great currents of interests and ideas of the capitals of the world”. UNIBAS-HAN, Basel, NL 324, B 140 – Nachlass Per Jacobsson, Correspondence Paolo Baffi, letter Baffi to Jacobsson, 21 February 1947.

  17. 17.

    BISA, 9.1.002 – BIS, Monetary and Economic Department (1947), Italy’s Economic and Financial Position in the Summer of 1947 (CB 200), Basel: Bank for International Settlements, 79 p.

  18. 18.

    BISA, 9.1.002 – Italy’s Position, p. 75.

  19. 19.

    BISA, 9.1.002 – Italy’s Position, p. 79.

  20. 20.

    A very lucid analysis of the 1947 crisis in: Martinez Oliva 2005.

  21. 21.

    “Clearly, the continued under-utilization of a considerable part of industrial capacity is inconsistent with the objectives of the recovery program and will not contribute to a solution of Italy’s fundamental employment problem”. ECA 1949, p. 35.

  22. 22.

    BISA, 9.1.002 – BIS, Monetary and Economic Department (1949), Economic and Financial Problems of Italy in the summer of 1949, Basel: Bank for International Settlements.

  23. 23.

    BISA, 9.1.002 – Economic and Financial Problems of Italy, p. A5.

  24. 24.

    BISA, 9.1.002 – Economic and Financial Problems of Italy, p. A17.

  25. 25.

    BISA, 9.1.002 – Economic and Financial Problems of Italy, pp. F1-F22.

  26. 26.

    De Cecco 2013, p. 143. Paolo Baffi of the Bank of Italy explicitly congratulated Jacobsson on those pages in the report that dealt with the refutation of the Keynesian arguments for credit expansion: UNIBAS-HAN, Basel, NL 324, B 140 – Nachlass Per Jacobsson, Correspondence Paolo Baffi, letter Baffi to Jacobsson, 26 September 1949.

  27. 27.

    As Per Jacobsson wrote: “The receipt of aid under the European Recovery Program imposes upon each country not only a legal, but even more a moral, duty to put its own house in order”. BISA 9.1.002 – BIS, Monetary and Economic Department (20 July 1948), Letter from Per Jacobsson to Marius Holtrop (CB 207), Basel: Bank for International Settlements, p. 17.

  28. 28.

    BISA, 9.1.002 – BIS, Monetary and Economic Department (6 January 1947), Some Economic and Financial Problems in Denmark (CB 195), Basel: Bank for International Settlements, 41 p.

  29. 29.

    BISA, 9.1.002 – BIS, Monetary and Economic Department (1 March 1948), The Economic and Financial Position in Austria at the beginning of 1948 (CB 205), Basel: Bank for International Settlements, 84 p.

  30. 30.

    BISA, 9.1.002 – BIS, Monetary and Economic Department (20 July 1948), Letter from Per Jacobsson to Marius Holtrop (CB 207), Basel: Bank for International Settlements, 27 p.

  31. 31.

    BISA 9.1.002 – Letter Jacobsson to Holtrop, p. 5.

  32. 32.

    BISA 9.1.002 – Letter Jacobsson to Holtrop, p. 15.

  33. 33.

    BISA 9.1.002 – BIS, Monetary and Economic Department (March 1949), The post-war Economic and Financial Position of France, from the Liberation to the Beginning of 1949 (CB 210), Basel: Bank for International Settlements.

  34. 34.

    BISA 9.1.002 – BIS (1949), The post-war Position of France, p. F3–F4.

  35. 35.

    BISA 9.1.002 – BIS (1949), The post-war Position of France, p. F7–F8.

  36. 36.

    BISA 9.1.002 – BIS (1949), The post-war Position of France, p. A31.

  37. 37.

    BISA 9.1.002 – BIS (1949), The post-war Position of France, p. B1.

  38. 38.

    “..those countries that have pursued flexible interest policies in the period since the Second World War have been able to expand their production just as much as – or even more – than those which have stuck obstinately to cheap money, and (..) the former countries have, in fact, been more successful than the other countries in avoiding harmful monetary disturbances” (Jacobsson 1958a, p. 15).

  39. 39.

    This section reproduces parts of Clement 2006.

  40. 40.

    Hubert Ansiaux of the National Bank of Belgium, who attended the meetings of the EPU Managing Board as Chairman of the OEEC Intra-European Payments Committee, was at the same time alternate member of the BIS Board of Directors. Two of the nine initial voting members of the EPU Board – Carli for Italy and Calvet for France – would later also become members of the BIS Board of Directors.

  41. 41.

    On this episode, see in particular: Kaplan and Schleiminger 1989, pp. 97–117; Jacobsson 1979, pp. 236–245; Holtfrerich 1999, pp. 333–341. Also: Alec Cairncross, “Report on visit to Germany 28 October to 3 November 1950”, DBHA, N2/K3 – Europäische Zahlungsunion, Cairncross-Jacobsson Mission 1950.

  42. 42.

    Among them was Otmar Emminger, later President of the Bundesbank, then economic adviser to the Bank deutscher Länder, for whom these talks were the start of a “close and trusted friendship” with Jacobsson and the basis for their future cooperation at the IMF (Emminger 1986, p. 52).

  43. 43.

    The written report of the experts was submitted 2 weeks later: Organisation for European Economic Co-ordination, MBC(50)13, European Payments Union: Consideration of Germany’s Position, 20 November 1950.

  44. 44.

    OEEC Council, The position of Germany in EPU, Report by the Managing Board of the EPU, C(50)315, Paris, 13 November 1950.

  45. 45.

    OEEC Council, Decision on the settlement of the deficits of Germany within EPU (adopted by the Council at its 117th meeting), C(50)342, Paris, 13 December 1950, p. 4.

  46. 46.

    Figures taken from: OEEC, European Payments Union, Consideration of Germany’s Position (experts’ report submitted by Per Jacobsson and Alec Cairncross), MBC(50)13, 20 November 1950, p. 46. West Germany’s current account balance: Kaplan and Schleiminger 1989, p. 101. West Germany’s GDP: Mitchell 2003, p. 916.

  47. 47.

    West Germany’s official gold and dollar reserves stood at a mere US$ 222 million at the end of 1950. Bank for International Settlements, Twenty-first Annual Report, Basel, 1951, p. 163.

  48. 48.

    See for instance: BISA 9.1.002 – BIS, Monetary and Economic Department (1954), Problems of the Return to Convertibility, Lecture by Per Jacobsson given at the University of Iceland, Reykjavik, on 8 September 1954, Basel: Bank for International Settlements.

  49. 49.

    UNIBAS-HAN, Basel, NL 324, B 562 – Nachlass Per Jacobsson, Correspondence Randolph Burgess, letter Burgess to Jacobsson, 28 May 1956.

  50. 50.

    UNIBAS-HAN, Basel, NL 324, A/110 – Nachlass Per Jacobsson, Diary 110, entry 19 June 1956.

  51. 51.

    International Chamber of Commerce (December 1946), Monetary Problems in the World of Today, brochure n° 104.

  52. 52.

    UNIBAS-HAN, Basel, NL 324, B 562 – Nachlass Per Jacobsson, Correspondence Randolph Burgess, letter Burgess to Jacobsson 1 June 1956.

  53. 53.

    UNIBAS-HAN, Basel, NL 324, A/110 – Nachlass Per Jacobsson, Diary 110, entry 19 June 1956 ff.

  54. 54.

    UNIBAS-HAN, Basel, NL 324, A/110 – Nachlass Per Jacobsson, Diary 110, entry 19 June 1956 ff. The Governors apparently nurtured some doubt about Jacobsson’s capacity to successfully steer a big administration like the IMF. As Governor Frère of the National Bank of Belgium put in a note to Burgess: “Jac[obsson] is certainly wonderful as an economist but he has absolutely no administrative capacity and no interest for administrative problems”, BISA, 7.16(3) – BIS Foundation and History, Baffi papers, Box RBL/B3, copy from National Bank of Belgium files, letter Maurice Frère to Randolph Burgess, 28 June 1956.

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  1. Information & Collaboration Unit, Bank for International Settlements, CH-4002, Basel, Switzerland

    Piet Clement

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  1. Waseda University School of Commerce, Shinjuku-ku, Tokyo, Japan

    Kazuhiko Yago

  2. Seijo University Faculty of Economics, Setagaya-ku, Tokyo, Japan

    Yoshio Asai

  3. Otsuma Women's University School of Social Information Studies, Tama, Tokyo, Japan

    Masanao Itoh

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Clement, P. (2015). “Maybe the Fund needs something else.” Per Jacobsson, from the Bank for International Settlements to the International Monetary Fund, 1931–1963. In: Yago, K., Asai, Y., Itoh, M. (eds) History of the IMF. Studies in Economic History. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55351-9_4

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