Department of State National Advisory Council Files
Minutes of the Fourth Meeting of the National Advisory Council, Washington, September 27, 1945
|Present:||Secretary Fred M. Vinson (Chairman), Treasury Department|
|Mr. W. L. Clayton, State Department|
|Mr. E. G. Collado, State Department|
|Mr. Amos A. Taylor, Commerce Department|
|Mr. M. S. Eccles, Federal Reserve Board|
|Mr. Wayne Taylor, Export-Import Bank|
|Mr. Harry D. White, Treasury Department|
|Mr. Frank Coe (Secretary), Treasury Department|
[Here follows statement regarding a procedural matter.]
1. Emergency Reconstruction Credits to Liberated and War Devastated Countries[Page 1409]
Approval. The Chairman described a conference which he and Messrs. Acheson24 and Crowley had with the President. After a full discussion of the points involved, the President had approved the memorandum (NAC Document No. 16) outlining the proposed loans to France, Netherlands, Netherlands East Indies, Belgium, and the U.S.S.R.
In view of this action, the Council approved the recommendations on these loans made by Mr. Crowley in his memorandum of September 18 (NAC Document No. 14), with the understanding that the negotiations with the U.S.S.R. were not to go forward until there was an opportunity to consult Secretary Byrnes.
Netherlands East Indies. Mr. Wayne Taylor said that this loan would be held up until a satisfactory report had been received from the International Tin Committee.
Exchange of Notes on Commercial Policy. Mr. Clayton said that the State Department had an understanding with the Export-Import Bank that none of these loans were to be completed until the foreign governments had agreed to an exchange of notes on commercial policy. The Council decided that the papers to which Mr. Clayton referred (NAC Document No. 22) should be made part of the record in order to show all the considerations on which the action of the Council was based.25
2. Interest Rates on Long-Term Loans made by the Export-Import Bank to Foreign Governments
The Council considered the rates of interest to be charged by the Export-Import Bank on long-term loans to foreign governments for reconstruction and development purposes. It had before it the recommendations of the Staff Committee (NAC Document No. 18), a memorandum from the Export-Import Bank (NAC Document No. 17), and the analysis prepared for the Staff Committee (NAC Staff Document No. 3).26 After detailed discussion, the Council decided as follows:
a. Long-Term Loans for Reconstruction and Development. The Export-Import Bank’s general rate of interest on 20 to 30 year loans to foreign governments for reconstruction and development should be 3 percent during the next period. In the case of loans with serial maturities, the average rate should be 3 percent.[Page 1410]
This rate should be uniform for all governments.
The appropriate rate or rates should be reviewed from time to time as relevant factors change.
b. Loans for Goods Requisitioned under Lend-Lease. In financing the export of goods for which requisitions had been filed by foreign governments under Lend-Lease and accepted by this government prior to V–J Day, the Bank’s interest rate should be 2⅜ percent for 30 year loans—i.e., the same as in Lend-Lease 3(c) agreements.
Factors Considered. The Council’s decision was based upon a number of factors, not all of which were covered in the documents before it. The more important of these were: the legislative background of the Export-Import Bank; the possible rates of interest to be charged by the International Bank; the present and prospective private rates for domestic and foreign securities; and the interest rate structure of the public debt. Other factors mentioned included the Export-Import Bank reserve policy and expenses; the relation of interest rates on Export-Import Bank loans to the prospect of repayment; the resale of foreign obligations to the public by the Export-Import Bank; and the benefits the United States would derive from world-wide economic reconstruction. It was noted that there are outstanding certain commitments respecting interest rates, and that interest rate discriminations as among borrowers might precipitate unfavorable political repercussions. The financial negotiations with the United Kingdom were also discussed, as were the prospects for the liberalization of commercial policies on the part of countries seeking loans here.
[Here follows discussion of other subjects.]
- Dean G. Acheson, Under Secretary of State.↩
- This refers to the United States proposals for the expansion of world trade on a multilateral and non-discriminatory basis. Document NAC–22, undated, not printed, described in some detail the loan discussions, actual or proposed, which were engaging the attention of the United States at this time with respect to France, Belgium, Poland, Czechoslovakia, the Netherlands (East Indies), the Soviet Union, and the United Kingdom; and stated that the United States in such discussions was “endeavoring to obtain agreements with respect to commercial policy and certain other matters of importance to this Government”.↩
- NAC Staff Document No. 3 not printed.↩