Memorandum by the Acting Chief of the Division of Current Information (Key) of Press Conference of the Secretary of State


Export-Import Bank

A correspondent called the Secretary’s attention to a press report to the effect that the Export-Import Bank has made it known that it will not grant credits to cover any commodities which look like munitions and in accordance with this policy will refuse to finance shipments of cotton to Italy. He inquired whether the Bank’s policy had been formulated at the suggestion of the State Department. The Secretary pointed out that this was a matter falling entirely within the province of the Export-Import Bank and that, accordingly, anything which was to be said on the matter should emanate from the Bank itself. The Secretary explained that the reason he felt it best for the correspondents to confer directly with the Export-Import Bank was in order to avoid any possibility of underlapping or overlapping between the Department and the Bank.

A correspondent pointed out that the Export-Import Bank had stated that their decision had been reached because of the unsettled situation existing in Italy. The correspondent inquired whether the question of the use of cotton for munition purposes had entered into the Bank’s decision. The Secretary repeated that any answer to this question should be obtained from the Bank as the latter alone could make known the facts and conditions upon which its action had been based.

A correspondent inquired whether, aside from the action of the Bank, there had been any other specific instances of loans or sales being curtailed and asked whether the Secretary could say anything about the Department’s general policy with regard to prohibiting shipments of munitions to Italy or Ethiopia. The Secretary reminded the correspondents that there was no existing law on this question.6 The correspondent then asked whether the Government [Page 315] had come to some tentative decision with regard to a general policy in cases where discretion might be exercised. The Secretary replied that frankly he had not observed any recent new developments of policy beyond what he had stated to the correspondents on this general subject in the past.

A correspondent inquired whether, in view of the past attitude of the American Government, cotton would be considered as munitions. The Secretary stated that in order to give a strictly accurate reply to this query it would be necessary for him to study the correspondence relating to contraband during the World War.

Asked whether the United States had ever admitted that cotton constituted munitions of war, the Secretary stated that for the sake of accuracy he would prefer not to discuss this matter until he had studied the correspondence.

A correspondent inquired whether the Secretary could say anything with regard to conferences between State Department officials and officials of the Export-Import Bank prior to the Bank’s decision. The Secretary stated that he had not participated in any conference of this nature, but pointed out that two members of the State Department are Directors of the Export-Import Bank. A correspondent inquired whether the Bank’s decision signified that the Government had decided to refuse the benefits of any credits to nations likely to go to war. The Secretary stated that he would be glad to give the correspondents any additional information on this subject which he might be able to obtain later.

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David Key
  1. The Neutrality Act was approved August 31, 1935; 49 Stat. 1081.