NAC Files, Lot 60 D 137

Draft of Minutes of Meeting No. 169 of the National Advisory Council, Washington, December 28, 1950


[Here follows list of persons present (27).]

2. Proposed Increase in Lending Authority of the Export-Import Bank

Secretary Snyder pointed out that this topic had been discussed at the preceding Council meeting (December 26, 1950). Immediately after that meeting the Bureau of the Budget requested that a definite conclusion be reached on the subject. Accordingly it was now up for reconsideration.

Mr. Gaston noted that gross commitments of the Export-Import Bank (since it received an increase in its lending authority in 1945) had now reached $3.8 billion, and aggregated $2.6 billion after deducting cancellations and repayments. New loan commitments during the past year were approximately $550 million. Mr. Gaston said that he anticipated considerable new business during the period immediately before us, most of which would be directly related to the output of strategic materials. Total loans ranging between $250 million and $500 million per year seemed probable, based on the past year’s experience. He noted that it was possible that only $400 million might be left in loanable funds on June 30, 1951. The difficulty of planning for the next two or several years accordingly appeared very great. Mr. Gaston also observed that the Bank was prepared to request of the Congress a five-year extension of its loan authority (from 1953) to permit disbursements on prior commitments to extend past 1953. He added that the authorization requested would assure continuity of the Bank’s operations for several years, so that it could plan a proper role in the defense effort.

Secretary Snyder inquired whether the Bank presently investigated all potential loans in the light of possible material availabilities in the United States. Mr. Gaston said that all new loan commitments were being reviewed very carefully with this factor in mind. Mr. Blaisdell pointed out that the Export-Import Bank had, at one time, an arrangement with the Department of Commerce on licensing, and perhaps a similar arrangement could be set up in the near future. Mr. Gaston expressed complete agreement.

Mr. Dembitz1 mentioned that Governor Szymczak was in favor of the full increase of $1.5 billion in order to give the Bank sufficient funds for more than one year’s normal operations. The Bank could accordingly avoid returning to the Congress for additional funds [Page 1583] each year. Mr. Fisher said that the State Department concurred in this view.

Secretary Snyder pointed out that his own opinion was that this would be asking for too much now in view of the budgetary situation. He doubted the advisability of requesting an authorization greatly in excess of the amount that the Bank could expect to lend in the near future, even if it were to loan a maximum of $500 million a year. He stressed, however, that although his own view differed from that of the majority he would not press it here. He pointed out that in presenting the request to the Congress Mr. Gaston would be asked detailed questions as to exactly what the money was for—questions which could prove quite embarrassing.

Mr. Blaisdell2 suggested the possibility of settling the Congressional situation in advance through a conference with Congressional leaders. Secretary Snyder said that this would probably be difficult.

Mr. Gaston stated that he was fearful that in the uncertain days ahead, the Export-Import Bank might suddenly be asked for some very large loans at a time when Congress might be out of session. Hence, he believed it advisable for the Bank to have this additional stand-by lending authority. Secretary Snyder said that since it was his view that the Congress would be in session almost continuously as long as present uncertain world conditions prevailed, he could not agree with Mr. Gaston on this point.

Action: The following action was taken:

  • The National Advisory Council recommends an increase of $1.5 billion in the lending authority of the Export-Import Bank as an integral part of the legislative program for foreign financing proposed to be presented by the Administration to the next Congress.

  1. Lewis Dembitz, Board of Governors, Federal Reserve System.
  2. Thomas C. Blaisdell, Jr., Assistant Secretary of Commerce for Foreign and Domestic Commerce.