NAC Files, Lot 60 D 137
Draft of Minutes of Meeting No. 168 of the National Advisory Council, Washington, December 26, 1950
[Here follows list of persons present (28). The statutory chairman of the National Advisory Council was present (Secretary of the Treasury John W. Snyder). Also present and representing the Department of State were Willard L. Thorp, Assistant Secretary of State for Economic Affairs; Leroy D. Stinebower, Director, Office of Financial and Development Policy; and Jerome J. Stenger, Division of Investment and Economic Development. Others present, referred to in this extract, include: C. Dillon Glendinning, NAC Secretary; Herbert E. Gaston, Export-Import Bank; and M. S. Szymczak, Board of Governors, Federal Reserve System. Discussion of NAC Doc. No. 1081 (extract, supra) followed.]
Increase in Export-Import Bank Lending Authority.—Mr. Glendinning pointed out that the Export-Import Bank had forwarded a paper to the Council that recommended an increase of $1.5 billion in the present lending authority of the Export-Import Bank (NAC Document No. 10791). The matter had been discussed in the Staff Committee and the majority view was to forward to the Council a recommendation of approval of this amount. On page 27 of NAC Document No. 1081 there was a statement of the present uncommitted funds of the Export-Import Bank and the International Bank. The International Bank funds, on the basis of existing bond issues were relatively low, amounting to $71 million, whereas the Export-Import Bank had slightly over $500 million.
Mr. Gaston said that the present thinking of the Export-Import Bank was that they should have some increase in their lending authority. The Bank would have about $500 million at the end of the fiscal year. However, the Bank believed it should always have a substantial reserve for emergency purposes and that to have only $500 million in the present situation available for the next year would be unwise.
The Chairman observed that in a four-year period the Export-Import Bank had committed a billion dollars and asked whether 1.5 [Page 1581] billion dollars was not a little too much to ask for at the present time. Mr. Gaston said that conditions were different from the earlier period, and the increased lending authority would not be used up in a short period if the Council thought it was unwise. He pointed out that the Export-Import Bank did not have a program of loans for the coming year. He added that the Gray Report had originally suggested an increase of $3 billion to $4 billion of lending authority. The Bank thought that a $5 billion total of lending authority was more appropriate. It thought it was not unreasonable to ask for that amount, but it might be better to approach Congress with a lesser figure. If a lesser figure was considered advisable, he believed it should be something more than $500 million, say $750 million.
Mr. Thorp said he did not think it was well for the Administration to get itself into the position where each year it was necessary to go to Congress on the question of the lending authority of the Export-Import Bank. The State Department had been thinking of this increase as something which, once obtained, would last for a number of years. The control of the expenditures would remain with the National Advisory Council. The Bank might go to Congress, say once every five years, for adjustment upward or downward of its lending authority. The State Department had felt that the Bank needed to have additional funds because it was not clear as yet how strategic materials would be handled and a number of them, such as manganese in Brazil, would probably be the subject of Export-Import operations. Mr. Gaston added that the Bank had several of such projects involving manganese, cobalt, nickel, and sulphur.
Mr. Szymczak suggested that an action might be taken that the lending authority be increased up to some agreed figure. The determination of the actual amount to be asked of Congress could be made at a later date. The Chairman thought that this would be a matter that would have to be determined by the budgetary situation. He would have no hesitancy personally in requesting almost unlimited borrowing authority, but there was a practical budgetary problem.
Mr. Gaston said that he would not like anyone to assume that this amount represented a budget for disbursement during any particular period. The Chairman observed that that was the way Congressmen would interpret the request.
After some further discussion of the amount, during which Mr. Gaston suggested that a billion dollars might be an appropriate figure, it was agreed to defer to a later meeting action on this part of the recommendations.
[Here follows text of NAC Action No. 442, relating to other parts of NAC Doc. No. 1081 not considered here. Regarding NAC action on the question of the relation of loans and grants in foreign assistance programs, see page 1592.]