Lot 60 D 665: USBog/150
Remarks of William McC. Martin, Jr., President of the Export-Import Bank of Washington Before Committee IV of the Ninth International Conference of American States1
Last evening at the Plenary Session you all heard read the message of the President of the United States to the United States Congress requesting an increase of $500,000,000 in the lending authority of the [Page 37] Export-Import Bank.2 As stated in his message “This increased lending authority would place the bank in a position to assist in meeting essential requirements for the financing of economic development in the other American Republics. It would permit the bank to make loans for well-planned development projects which are economically justified and to cooperate most effectively with private funds.”
We in the United States recognize clearly that although private capital must play the major role in the economic development of Latin America, nevertheless, inter-governmental financial cooperation will be required. We are confident that the International Bank as an intergovernmental institution will play an increasingly important role in supplying such capital as well as in stimulating and facilitating private investment.
The International Bank, as its name implies, is not the agency of any one government. It is, as Mr. McCloy so aptly stated, “your Bank” because practically all of you have contributed to its capital and are actively participating in its management. At Bretton Woods and in the Draft Agreement prepared by the Inter-American Economic and Social Council earlier this year it was agreed that the International Bank should be the principal instrument for inter-governmental financial cooperation. However, we are also aware that the International Bank may not at all times be in a position to meet all the requests which may be addressed to it, since it must have recourse to the private capital market for its funds and since it must have regard for the requirements of more than its Latin American members alone.
It is for this reason that the request for an increase in the lending authority of the Export-Import Bank has been made. This increase should make certain that the Export-Import Bank will be able to consider all those requests for credits to finance sound development projects which are not otherwise met. It should ensure that the economic development of your countries will not be retarded by a lack of capital.
The existing close cooperation between the Export-Import Bank and the International Bank will continue in order to ensure that the latter institution will have every opportunity to discharge its functions as the principal intergovernmental source of development credits. The cooperation will also ensure that no sound development project which cannot be privately financed will fall into a gap between the two institutions.
Everyone here, I think, understands that the Export-Import Bank is a United States Government lending agency. It has a broad charter, and so long as it facilitates the financing of exports and imports it has [Page 38] authority to make its own lending policies subject only to two important limitations placed upon it by the United States Congress. The first relates to private capital. We are specifically directed to supplement and encourage and not to compete with private capital. In the second place, our loans must be for definite projects and must, in the judgment of the Board of Directors, have reasonable assurance of repayment. Within these limits, however, and they are the limits which must inevitably apply to the operations of any Bank designed to assist in financing development, the Export-Import Bank can make all the types of loans which may be required for development purposes. It can and does make loans to both governments and private entities. It can make loans to private entities without government guarantees where sufficient assurance of repayment is provided without such a guarantee, and where valid reason exists for the omission of this type of endorsement.
The Bank can, in exceptional and justified cases, make loans to cover local currency requirements and it has done so. However, it is the experience of the Bank that there is rarely justification for such loans. Applying governments and enterprises in discussing their financial requirements with the Bank have in most cases found that there were in fact local sources of capital to cover local currency requirements, and in view of the obvious desirability of avoiding the unnecessary amassing of obligations in foreign currencies, have chosen to borrow to finance only foreign exchange requirements.
Since the establishment of the Export-Import Bank total credits in excess of $1 billion have been authorized for the other American Republics. Since 1940 alone credits aggregating $908,000,000 have been authorized for your countries. Not all of these funds have actually been utilized. In some instances, changes in the plans of the borrowers, inability to obtain desired equipment or other factors, prevented the planned utilization of these credits. However, as of March 15 of this year $466,000,000 had been disbursed by the Export-Import Bank under credit commitments for the other American Republics, and more than $200,000,000 had been repaid. As of that same date $266,000,000 were outstanding, and roughly $200,000,000 remained to be drawn under still existing authorizations or commitments.
I take great satisfaction in the concrete record of accomplishment in the form of railroads, highways, electric power and industrial plants, and other productive installations throughout the Americas. I take equal satisfaction, as I am sure you all do, in the excellent record of repayment of these credits. This record reflects the sound judgment, in the first instance of the borrowers, and in the second instance of the Bank, in the selection of the projects to be financed. I look forward to the continuing exercise of such sound judgment on the part of all of us.
[Page 39]We also look forward to a continuation of the highly satisfactory cooperation we have enjoyed in the past and we are confident that through this cooperation there will appear many more concrete expressions of economic progress, many more productive facilities which will serve to raise the level of living of all our peoples.