NAC Files, Lot 60 D 137
Memorandum by the NAC Secretary ( Glendinning ) to the National Advisory Council
NAC Doc. No. 1124
Subject: Agenda for Council Meeting of Tuesday, April 17th
1. The memoranda prepared by the President of the International Bank and the Chairman of the Board of Directors of the Export-Import Bank (NAC Document No. 1107) have raised a number of questions concerning the coordination of the activities of the two banking institutions in this period.1 There has been prepared, as a basis for Council discussion, NAC Document No. 11222 which deals not only with the problems raised in these memoranda but also with the question of coordination of lending programs for development with grant assistance programs being undertaken by this Government. This question inevitably must have an important bearing on the operations of the two banks in this period.
The problem of evolving a coordinated program is particularly important in areas of special political significance. (Attached is a letter from the Deputy Administrator of ECA to the Bureau of the Budget bearing on this problem.)
In these areas a major question is whether primary responsibility for evolving such programs in cooperation with local governments must not be assumed by the U.S. Government rather than by an international institution.
2. With reference to the Foreign Assistance programs for Fiscal Year 1952 the Council adopted the following principle in December 1950 (NAC Action No. 442):
- “Where a country is in a position to service a loan and the projects are of the appropriate type, they should be financed by the established lending institutions under their usual terms and conditions. The Executive Branch should not request authority from Congress or appropriations for special categories of loans under this program.”
It was felt desirable to review the implications of this action in terms of the legislation which is currently in preparation for presentation to the Congress. More specifically, the question is raised whether the legislative presentation should reserve to the Export-Import Bank all loan operations undertaken by this Government and should deny lending authority to other agencies extending foreign assistance.
The following cases are particularly pertinent to this general policy problem: [Page 1593]
- The question which is currently before the Administration of whether the Export-Import Bank or ECA should make a loan to India for wheat if the Congress should insist, contrary to the Administration view, that such assistance should be on a loan rather than a. grant basis.
- The possibility that the Congress might shift some assistance now scheduled for grants under the 1952 program to a loan basis.
- The question of whether the present financing by ECA of the production of materials required by the United States should be considered a loan, repayable in kind, within the terms of the above NAC action. (Under present arrangements some agreed portion of the materials so financed is to be made available to the United States without dollar cost to the stockpile program.)