103 XMB–754

The Secretary of the Treasury (Humphrey) to the Secretary of State

Dear Foster: In view of the fact that Senator Capehart1 is starting hearings on the activities of the Export-Import Bank next week, it seems to me wise for the National Advisory Council to have an agreed position on the Export-Import Bank along the line that we have previously discussed.

We ought therefore, I believe, to have an early meeting of the Council, and for your consideration I submit herewith a draft resolution on which I should be glad to have your comments.

I recognize that this does not fully cover the question of political loans which cannot be worked out to meet the test of reasonable assurance of repayment. That is a matter we can discuss further at the meeting. Our suggestion here is that for the present we should continue to use the FOA organization and funds for that purpose and submit to Congress any cases that seem more appropriate, as we did with the grain loans to Pakistan and India.

Sincerely yours,


[Attachment 1]

Action for Consideration of the National Advisory Council on International Monetary and Financial Problems

The Black–Edgerton statement relative to coordination of activities of the Export-Import Bank and the International Bank is approved in principle. (Statement attached)
It is the policy of this Government that the Government has no right to exact by taxation from one citizen funds for loans to another citizen for long term development of competitive enterprise. All loans of the Export-Import Bank should be short or medium term in duration, except in unusual cases such as referred to in Paragraph 2 in the attached statement, or in other very exceptional circumstances, and in these cases should be in harmony with the foregoing policy.
[Page 356]

[Attachment 2]

Statement of Principles Governing the United States Position in Respect to Loans by the Export-Import Bank of Washington and the International Bank for Reconstruction and Development

(Draft by Messrs. Edgerton and Black)

The International Bank should be the normal source of loans for development projects involving direct financial obligations of a member government or governmental agency or its guarantee of the obligations of other borrowers.
The Export-Import Bank should not make loans within the purview of the International Bank, except in special cases, such as those in which important interests of the United States warrant departure from the general principle, or an additional credit is required to continue the project initially financed by the Export-Import Bank, or a loan is for the development of strategic material for importation into the United States.
Loans to private United States businesses or their affiliates, without governmental guarantee, may be considered by the Export-Import Bank on their merits.
United States exporter credits in member countries, at the instance of United States suppliers, involving orders for purchase of United States equipment, may be considered by the Export-Import Bank on their merits if they are for such transactions as would not fit into the normal pattern of International Bank project lending. In view of the revolving nature of Export-Import Bank funds, these credits normally should be of short-to-medium-term.
Commodity loans to finance the export of United States commodities, short-term in nature, may be considered by the Export-Import Bank on their merits.
Loans by the Export-Import Bank in countries which are members of the International Bank should be coordinated with the International Bank’s lending program by consultation between the two Banks, and due weight should be given to whether such loans may endanger the repayment of loans made by the International Bank, unduly limit its future lending in the member country or run counter to governmental programs or priorities on which that Bank is planning its lending activities.
Loans in countries not members of the International Bank, whether governmental or private, may be considered by the Export-Import Bank on their merits.
  1. Homer E. Capehart (R.–Ind.), Chairman, Banking and Currency Committee.