193. National Security Council Under Secretaries Study Memorandum 47B1
TO
- The Deputy Secretary of Defense
- The Assistant to the President for National Security Affairs
- The Director of Central Intelligence
- The Chairman of the Joint Chiefs of Staff
- The Under Secretary of the Treasury
- The Under Secretary of Commerce
- The Under Secretary of Agriculture
- The President of the Export-Import Bank
SUBJECT
- Financing Romanian Imports from the United States: Status Report
With reference to my memorandum of December 9, 1969 (NSC–U/SM 47a)2 the following is a summary of action taken on five proposals made by the Romanians to increase their ability to finance imports from the United States. It was found that two suggestions made by the Romanian Embassy, PL–480 assistance and Exim financing, are not possible under current legislation. The third proposal, credits from American banks of five years and longer duration, was found to be commercially infeasible for any nation for which no U.S. Government guarantee can be given.
Of the two remaining suggestions, we are actively working on the Romanian request for assistance in joint ventures. A list of American firms doing business in fields of interest to them has been prepared by the Department of Commerce and delivered to the Romanian Embassy.
The other, that of a joint Romanian-American Bank, is now under consideration in Treasury and the Federal Reserve Board. U.S. domestic law would limit the permissible scope of the latter proposal. The Johnson Act (18 U.S.C. 955) prohibits certain types of financial transactions, i.e., other than financing of normal export transactions, with countries such as Romania which are in default on debts to the USG and which are not members of the IMF and the World Bank. Also, the antitrust laws might limit the ability of two or more banks to form a consortium in connection with the establishment of a joint Romanian-American Bank. To clarify the legal issues, we have asked Justice to give us an opinion on the possible application of both the Johnson Act and the antitrust laws to the consortium formation of a joint Romanian-American Bank.
In addition to the legal problems, the commercial attractiveness of such a proposal to U.S. banks remains unclear. An informal sounding of Chase Manhattan, which has probably had the longest and most extensive financial connections with Eastern Europe, brought a skeptical and negative reaction to the proposal.
Chairman
- Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–252, U/SM 45–49, U/SM 47. Confidential.↩
- Under cover of a December 9 memorandum, Richardson forwarded a copy of the Department of State paper (Document 191) to the listed recipients. (Ibid.)↩