202. Current Economic Developments1
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EXIMBANK GIVEN MORE LIBERAL EXPORT FINANCING AUTHORITY
The President on July 8 signed into law a bill which breaks new ground in export financing by the Eximbank.2 The law authorizes the Bank to use up to $500 million of its existing $13.5 billion commitment authority to support export transactions which carry a higher degree of risk than is permitted under the Bank’s present statute. The President will establish an Export Expansion Advisory Committee to provide guidance to the Eximbank with regard to the use of this facility.3
Purpose of New Authority
The new legislation is a part of President Johnson’s program designed to reduce the deficit in our balance of payments. In his January 1 b/p message the President said: “I shall … ask the Congress to earmark $500 million of the Export-Import Bank authorization to: provide better export insurance, expand guarantees for export financing, and broaden the scope of Government financing for exports.” The President elaborated further in his letter to the Senate and House transmitting the bill requesting such authorization. He said that the requested $500 million allocation would support the determined efforts of the entire business community to expand exports, assist American firms which now sell only within the US to expand their markets and send their goods abroad, and make available to American firms export financing more competitive with that provided by other major trading nations and especially suited to developing new markets.
The legislation seeks to achieve these objectives by authorizing the Eximbank to support export transactions which give promise of helping our b/p and promoting the long-term commercial interests of the US, but which do not necessarily meet the Eximbank’s statutory standard of [Page 569] “reasonable assurances of repayment.” The law provides broader criteria for a limited volume of Eximbank guarantees, insurance, and credits. It does not entail any increase in the current $13.5 billion lending authority of the Bank.
Advisory Committee
To achieve the greatest benefit from the export financing plan, the President will establish an Export Expansion Advisory Committee, chaired by the Secretary of Commerce, to provide guidance to the Board of Directors of the Eximbank. The Committee will be established by an Executive Order which will indicate the Committee’s membership and outline in broad terms the function of the Committee.
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- Source: Washington National Records Center, RG 59, E/CBA/REP Files: FRC 72 A 6248, Current Economic Developments. Unclassified. The source text comprises page 18 of the issue.↩
- P.L. 90–390; 82 Stat. 296. The legislation was approved on July 7, not July 8.↩
- On July 31, President Johnson issued Executive Order 11420 (33 F.R. 10997), which established the Export Expansion Advisory Committee. For the President’s statement the same day on the purposes of this committee, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968–69, Book II, pp. 853–854. Drafts of this executive order and the President’s statement are in the Johnson Library, Office Files of Ernest Goldstein, Export Expansion Advisory Committee, Box 6.↩