82. Memorandum of a Conversation, Department of State, Washington, January 18, 19561


  • Secretary Dulles
  • Samuel C. Waugh
  • Henry F. Holland
  • Activities of the Export-Import Bank

The Secretary referred to the growing industrialization and economic development in Russia. He said that the Soviets are trying to capitalize on this development by arguing to the under-developed areas of the world that they, too, can enjoy such development and that Soviet Russia is prepared to assist them. He referred to the increasing propaganda campaign being carried on by Russia in Latin America. He expressed concern as to whether the operations of the Export-Import Bank in the area will be of volume sufficient to serve as an effective defense against the Russian campaign and as adequate implementation of our own policy commitments in the area.

Mr. Holland said that the new credits authorized by the Bank during the past nine months were very low; that he felt that our [Page 372] political objectives in the area required that the total new credits authorized by the Bank in fiscal year 1956 should exceed $200 million, and that he was worried as to whether we would achieve this objective. Mr. Holland also brought out as a second point the question of the Bank’s cooperating with the Commercial Attachés in our embassies.

Mr. Waugh answered by reading the highlights of the letter written two days previously, namely January 16, to Herbert Hoover, Jr., commenting on the record of the Bank in Latin America and giving figures for the loans authorized in the calendar years 1954 and 1955.2 The letter also answers Mr. Holland’s second point, upon which Mr. Waugh thought a meeting of minds had been previously reached during the visit to the six South American countries.

Mr. Waugh said that new credits authorized by the Bank during the first six months of the present fiscal year exceeded $50 million and he felt quite certain that the Bank could exceed $200 million for the present fiscal year on the basis of the applications now pending before the Bank, but added two provisos. First, that the sizable applications now pending and referred to in the aforesaid Hoover letter could be consummated, and second, that there would not be an adverse ruling with reference to the limitation that the IBRD has attempted to place on the Eximbank with reference to making development loans.

Mr. Waugh said that action by the Bank on two loans in Brazil was being held up at the request of the State Department. Mr. Holland assured Mr. Waugh that there was no longer any necessity for delaying the announcement of the action on the Santos Jundiai Railroad in Brazil. Comment followed with reference to the nitrate loans in Chile that are being held pending the passage of desired legislation. Mention was made briefly of the Colombia steel loan which is also being held pending the report of the IBRD mission.

Mr. Waugh then thanked the Secretary and commented on the desirability, from the standpoint of the Export-Import Bank, of the four regional offices of the Department of State coordinating their efforts and working through the “E Area,” and more specifically, Mr. Prochnow, a banker of years of experience and the designated representative of the Secretary in attending the weekly meetings of the Bank’s Directors.

  1. Source: Department of State, Central Files, 103–XMB/1–1856. Confidential. Drafted by Waugh. Another memorandum of this conversation, dated January 18, drafted by Holland, is ibid.
  2. Document 80.