Office of the Historian

NAC Files: Lot 60 D 137: NAC Documents

Memorandum by the National Advisory Council Staff Committee to the National Advisory Council

confidential
NAC Document No. 1160
[Washington,] June 22, 1951.

Subject: Request by Republic of Liberia for Additional Export–Import Bank Credits

Problem

The Export–Import Bank has requested the advice of the National Advisory Council as to whether the Council perceives any objections to consideration by the Bank of further credits, not in excess of $1,350,000, to the Republic of Liberia for financing a water supply and distribution and sewerage disposal system for Monrovia (NAC Document No. 1152).1

[Page 1302]

Discussion

The National Advisory Council in January 1951 approved consideration by the Export–Import Bank of a loan not in excess of $5 million to the Republic of Liberia for financing the cost of approved highway improvement and construction projects. (See NAC Action No. 4492). NAC Document No. 1090,3 which was prepared in support of this Action, contains the background information pertinent to consideration of additional credits at this time.

Originally the Republic of Liberia had applied to the Export–Import Bank for credits totaling $10,046,000 to assist in financing (a) a hydro-electric plant (including transmission and distribution system), (b) a water supply and distribution system for the capital city of Monrovia and (c) a highway development program and related construction projects. The Bank, however, was of the opinion then that the hydro-electric, water and sewerage projects required more detailed engineering and economic investigation by Liberia before they could be properly appraised. The Bank has now received additional information on the proposed water supply and distribution system and the proposed sewerage disposal system for Monrovia, and is prepared to act on credits for these projects.

Immediate action with regard to this request for additional credits has been urged by the State Department in view of the desirability of having the matter settled before the departure of the Liberian Delegation.

Liberia is one of the countries for which the National Security Council has made a general interim exception from the provisions of Section 1302 of Public Law No. 45 (82nd Congress).4

Proposed Terms

The terms envisaged for this loan by the Export–Import Bank (as in the case of the previous loan) are interest of about 3-½% with maturity in the neighborhood of 18 years.

Conclusion

There would appear to be no objection to consideration by the Export–Import Bank of the proposed additional credits to the [Page 1303] Republic of Liberia, subject of course to availabilities of any equipment and materials required from United States sources.5

  1. NAC Document 1152, June 8, was a letter from the Secretary of the Export–Import Bank to the Secretary of the National Advisory Council. The letter is summarized here. (NAC Files: Lot 60 D 137: NAC Documents) The Liberian application called for a credit of $2,348 million to finance the construction of a water system and a sewerage system in Monrovia. The Staff Committee Of the Export–Import Bank recommended approval of a credit of $1.35 million covering a sewerage system and the first stage of a water system and suspension of action on the remaining portion of the proposed credit pending the accumulation of further information about the project. Responsible officers in the Department of State hoped that the Bank could make more of a commitment to the second stage of the project. Documentation on the position of the Bank and the Department is included in file 103 XMB for May and June 1951.↩
  2. See footnote 3, p. 1284.↩
  3. Dated January 15, p. 1282.↩
  4. The legislation under reference here, the so-called “Kem Amendment,” provided that nations which wished to be eligible for financial or economic aid from the United States had to certify that they had not exported or knowingly permitted the exportation of arms, armaments, military materiel, or other controlled articles or commodities to the countries of the Soviet bloc. For documentation on the enforcement of the “Kem Amendment” by the National Security Council, see vol. i, pp. 993 ff.↩

  5. The memorandum printed here was circulated under cover of an “Action Sheet” containing the following “Recommended Action”:

    “The National Advisory Council advises the Export–Import Bank that it approves consideration by the Bank of additional credits, not in excess of $1,350,000, to the Republic of Liberia for financing the cost of the water supply and distribution and sewerage disposal system for Monrovia. It is understood that these credits will bear interest of about 3½%, with maturity in the neighborhood of 18 years.”

    According to Action No. 472, June 22, this was obtained unanimously by the National Advisory Council through a telephone poll on June 22. (NAG Files: Lot 60 D 137:NAC Actions)

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