as well. It is practically impossible to get potatoes, corn, meat out of Boyaca because we have today created roughly 800,000 consumers, people who are now engaged in the arts, bricklayers, carpenters, welders, and so forth. They receive salaries and have thereby become consumers, and they are consuming the local products. As they increase their potential to buy they will immediately buy the refrigerators and the other products which are not made in Colombia today. The dollar saving that the steel mill will create will allow these people to buy in the outside world. It is interesting to observe the metamorphosis which has taken place. Dr. Currie is right. It should be an agricultural country, but it is no good at all to be able to produce goods that you cannot sell. Today we find that the farmers instead of only planting maybe 1 hectare are now planting 4 or 5 in order to meet the demands of the changes that are taking place in the cities that surround us. There are four new industries already started. Any of the loans that are made will have an effect on the people in that area. So it is of basic interest in the development that we have started, and we will continue to increase that accomplishment by producing consumers, which is the basic principle involved. The history of the United States proves that the system of creating the consumer is the only answer to any of this development. The fact that Colombia today needs to develop, needs to grow, is based mostly on the fact that there are no consumers of any great number in this area, which is the most backward area in Colombia. We are seeing a metamorphosis take place which is really an interesting thing. Senator Green of Rhode Island visited us and spent a great deal of time with us. We showed him the housing, the water supply, the electricity, the things that we have created in this area. Our position is that we had been heard and had the thing been truly seen the $35 million or $40 million would have been American dollars, and it would have been, certainly a furthering of this effort to create consumers for American goods throughout the world if the United States instead of some other country had done it. We are faced again with that problem of what to do with the flat rolling mill project. If we come here and say that we would like to do this, and here is the backing for what we are doing, and the Colombian balance of trade is a very interesting guaranty for what we are trying to do, I wonder if we are going to be faced with exactly the same difficulties or misunderstanding, and will we have to take the boat again and ask assistance from someone else, who, incidentally, gave us the assistance because you have already given it to them. Senator BENNETT. We have had a great deal of discussion during the last 3 or 4 days about the European competition. While the matter has not, I think, come out into the open before, certainly I have listened to it with the realization that the money that is supplying the credit from France and Germany, and to a certain extent from England, is actually our money. So instead of financing jobs for American workmen we have actually financed the preparation in France of your steel mill indirectly, if not directly. Mr. JARAMAILLO. I should like to add, Mr. Chairman, in this extension of the project, which is worth about $25 million, we already have definite offers of financing from 2 European countries who are 42493-54-pt. 1-24 ready to supply the necessary funds and equipment to finish that part of the mill. We have come here today because we feel that any assistance that the United States can give us will be of much more benefit to interAmerican solidarity than we could find by having to make these purchases outside of the United States. We would like to get some assistance from this country and buy the equipment here. We are not really asking for a handout. We only want assistance to be able to help each other. Senator BENNETT. Do you intend to explore the possibility of a loan from the Export-Import Bank for your additional facilities? Mr. JARAMAILLO. We are certainly doing our best. Senator BENNETT. I think this has been a very interesting part of the record. I think we have gone rather thoroughly into the problem. I appreciate that both of you could come. As a part of the record, I should like at this point to introduce Mr. Beretta's letter of September 19 and his second letter of September 28 into the record. He has supplied us with 15 or 20 photographs of the project as it appeared last September. Obviously, these cannot be put in the record. We have no means of reproducing them, but we are happy to have them for the committee files for reference if and when there is further discussion of this problem. I wish to thank both of you very much. (The material referred to follows:) EMPRESA SIDERURGICA NACIONAL DE PAZ DE RIO, SOUTH AMERICA, Mr. SHERMAN ADAMS, Assistant to President of the United States, White House, Washington, D. C., United States. DEAR MR. ADAMS: Some time ago you received a letter from us and we had the pleasure of an acknowledgement from you with regards to the application for a loan made to the Export-Import Bank for funds necessary to purchase materials for the first fully integrated steel mill in South America located near Bogota, Colombia. As you undoubtedly know, the loan was refused for reasons which never have been very clear to us. At any rate we were successful in obtaining the necessary financing in France and the materials which would ordinarily have been purchased in the United States were purchased in Europe. Because of the fact that first as an American and more definitely so, having been born, raised and educated in New England, we feel that the enclosed photographs will be of interest to you. They show the progress we have made to date. We hope they serve also to indicate that many of the opinions given by Dr. Lauchlin Currie who first opposed this project and later on by hosts of econo nists in the State Department who chose to comment in an adverse result of these opinions we have taken added interest in a project which could have been another jewel in the diadem of progress made by the United States in creating consumers in Latin America, consumers, that is, of American-made goods. We would give you a little history of this plant to assure you that our comments are made in the spirit of cooperation and because our background is one of longstanding and because we believe that some real technical assistance in the proper spot would have placed this project in the United States instead of in France. This plant we are finishing in Belencito, in the State of Boyaca has within a radius of 30 kilometers, iron ore, 48 percent Fe. with proven reserves for 250 years which meet the requirements of capacity of the plant and a proposed expansion for 2 more blast furnaces. Proved reserves of coking coal under the same conditions for an equal number of years and limestone of the highest chemical analysis for an equal number of years, also water in great abundance. From an engineering standpoint the above completely justifies the investment of a total of $80 million which will be the cost of the entire plant, the building of two small cities and all the auxiliaries. From the economic standpoint the manufacture of 110,000 tons of ingots which will be converted into construction bar, structural sections up to 8 inches, 75pound railroad rails and wire will return to the stockholders and the Colombian Government approximately $15 million in the first year and $25 million in the second year of operation. These dollars which will be saved on the importation of steel will be used for the purchase of those consumer goods which are today lacking in Colombia. It is not the fact that a steel mill is important and justified in Colombia or in any of these underdeveloped countries. The poignant fact is that in the process of construction of the plant and in the operation of the plant, we are creating the consumers which is the only answer to the successful development of these countries. We have carried on in great length but hope you will pardon us if you read between the lines the tremendous pride that is felt as an American in having helped the Colombians. We tried to get this project entirely from the American scene, but inasmuch as our efforts produced no results, we were forced to obtain assistance from other sources. Please don't just file these pictures away in a folder for future reference, but we would ask you one favor. Please show them to the President of our great country and also to any other officials who might be interested enough in the responsibility of making this world a better place to live in and to those who definitely are dedicated to the responsibilities which life, as we know it today, has thrust upon us. This is the day that we haven't yet received a visit from any officials of our Government so that an unbiased report could be presented to you. In a spirit of service we place at your disposal the years of background accumulated, the educational experience accumulated in Latin America and Europe and the entire cooperation of a person who is interested in helping the United States to take its place in history as the great contributor to the advancement of the underdeveloped countries. Please accept our greatest respect and sincere regard. FRANCIS BERETTA, Jr., Assistant to President. EMPRESA SIDERURGICA NACIONAL September 28, 1953. Senator HOMER E. CAPEHART, United States Senate, Washington, D. C., United States. DEAR SENATOR CAPEHART: We would acknowledge receipt of your good letter which reached us here in the field only yesterday. A radio was sent today informing that this evening's airmail would carry our comments which we trust you will find comprehensive and of interest. In 1949, the International Bank sent Mr. Lauchlin Currie and a host of specialists to study the economic measures necessary to assist in the development of the country of Colombia, South America. For many years, the Colombians have known that they have iron ore of very high quality, coal in great abundance, as well as limestone, all contained in a radius of 30 kilometers. These natural resources are located in Boyaca, the most underdeveloped State of all the Colombian States. In 1947, President Ospina Perez of Colombia decreed that a study should be undertaken to discover the feasibility of starting an integrated steel mill to produce a portion of the necessities of the country. Mr. Currie in his 21⁄2 months trip throughout Colombia decided that what Colombia needed was not a steel mill nor the creation of consumers, but rather a revamping of its monetary system and a host of other items which we, in the United States, have today only as a result of our great industrial development. Mr. Currie also decided that he could not recommend to the United States that the Colombians proceed with this project. He also, as a matter of fact, refused to visit the area where the natural resources are in great abundance. In spite of Mr. Currie's opinions, the Colombians, as a matter of national pride, elected to proceed. The writer, because of his background and experience in all the Latin-American countries, was chosen as chief consultant. Mr. Currie's derogatory report influenced the State Department and the International Bank who sponsored his trip to Colombia. They in turn informed the Colombian Government that they would be interested in some projects, but they could not include financing of an integrated steel mill. No formal application was ever made to the International Bank for financing the steel mill, but they rejected any possibility for a loan even before the application was made. Facing this impasse, we went to Europe and obtained the financing both in Germany and in France. At the last moment, when we were about to choose the German financing, we were given to understand by the Germans that pressure had been brought to bear on them by the American Zone Governor and that they could not finance any projects in Latin America. We believe the American Zone Governor at that time was Mr. McCloy. As a result, we were forced to take the French financing and it has been a godsend as the enclosed photographs will attest. Today, 16 months after breaking ground, the enclosed pictures will show you what we have been able to do in spite of great transportation difficulties and the natural material difficulties that go into an engineering project of this type. We have started accounting classes, a welding school, a carpentry school, a brickmason school, etc., all in an effort to make this project a well-rounded productive effort. Last fall, we prepared a complete study for the Export-Import Bank hoping to obtain a loan of $5 million to purchase auxiliary equipment from the United States, material such as, machine tools, generating equipment, and mining tools. Equipment which the writer as an engineer and as an American far preferred to that of European manufacture. We would inform you that Mr. Carl Cass, chief engineer of the Export-Import Bank was most interested in the project and gave us assistance and hearing. Several other men including Mr. Lynn Stambaugh were receiving us and were most gracious, but, immediately, the formal application was made, we were forced to fight the battle of Washington. We tried to get through the maze of specialists in the State Department who had decided that Mr. Currie's report, which had been spread all over our Nation's Capitol and practically had become law, had influenced the thinking to the point where the Holy Bible and Christian teachings and the feeling of responsibility for the world ceased to exist. Mr. Currie's word dominated. To make a long story interesting, we were informed that the project was considered unfeasible. We are also enclosing a copy of a cable sent to Mr. J. C. Hebert of the Jones & Lamson Machine Co. of Springfield, Vt., for whom we have the greatest respect. He has helped us many times on the various engineering projects undertaken in Latin America. We tried to buy American equipment, but the Export-Import Bank was influenced by people in State who apparently will not assume the responsibility that the condition of the world today has thrust upon them. We took a plane immediately to France, pleaded our case, and as a result, the $5 million worth of capital goods which would have been purchased in the United States were purchased in France. Now, we are sure that the American machinetool builders are not very satisfied with this situation and this was the reason for my radio to Jim Hebert. We are also sure that General Electric, Westinghouse, and other similar producers of materials which were needed are not very happy. My dear Senator, who is to blame for this if not those individuals who are not willing to face the facts that the United States, the greatest country in the world, has the responsibility as a result of its greatness to guide these underdeveloped countries into a pattern of contribution rather than to merely write them off as Indians and to keep loaning them money which does not help them and which in no way assists our own economy. As an American citizen and as a man who knows both Latin American needs and American products in their entirety, we are at loss to understand just what the functions of loaning agencies are in the United States, if not to help in creating consumers in these underdeveloped countries because only in this way will we be able to get them "off our back." Loaning them money for them to do as they will produces nothing but poor relations who never like you anyway, but if you loan them money for definite projects whose pattern should be the development of their country along the lines of our own American industrial development, you really will approach the desired end. The writer plans to leave soon to obtain necessary financing for a flat-rolled products mill to complement the rolling mills already in place. We would like to buy this from Mesta, United Bliss, or Continental, but what chance have we against Mr. Currie and his residue. From this project we will go to others and can inform you that we will continue the same endless circle of trying to get assistance from our country, but at the same time it is our moral obligation to inform you that we will spend less and less time in the effort. We shall try to answer your questions as you enumerate them in your letter. 1. The nature or purpose of your contact with the bank. Answer. To obtain financing for the purchase of auxiliaries such as machine tools, welding equipment, and so forth, from the United States. 2. If you had correspondence with the bank, did you receive prompt and satisfactory replies? Answer. Yes; we had correspondence with the bank and personal contact and we were always graciously received. 3. Have you ever applied for a loan from the Export-Import Bank? Answer. Yes; an application was made to the Export-Import Bank. 4. If so, has your application been granted or denied? courteous and expeditious manner? Was it handled in a Answer. The application was denied. A loan application was handled expeditiously. 5. If a credit was authorized, was it administered by the Export-Import Bank in an efficient manner? (No answer.) 6. Have you any specific complaints about the operations of the Export-Import Bank? Answer. No. 7. Has the Export-Import Bank aided or failed in properly financing and facilitating the export-import trade of the United States? Answer. We believe that the Export-Import Bank because it is totally an American institution is the only bank that has contributed on every one of the projects it has financed. We cannot recall a single case in Latin America where the Export-Import Bank's financing prevailed, where excellent results were not obtained. 8. Has the bank assisted in developing and expanding the economy of foreign countries? Has it increased their capacity to purchase United States exports? Answer. Yes; we have observed many satisfactory results through ExportImport Bank financing. 9. Have you any suggestions for changes or alterations in the policy or operations of the Export-Import Bank? Answer. There are a number of suggestions but the primary one would be that the bank should have a freer hand to deal directly with the industrialists of a country. There are enough Americans with sufficient engineering background and knowledge of Latin America who could be contracted by the bank to assist them in their work whenever an application for a loan is presented. 10. Has the Export-Import Bank facilitated in the expansion of international trade in the past, and if so, how can it more adequately expand it in the future? Answer. Because of the length of this letter and because of a projected trip in the very near future to the United States, perhaps we will expound further on the point at a later date. However, we will say without fear of successful contradiction that the bank, from our point of view, is the logical bank to do the job of creating consumers through loans for projects in various countries. American engineering advancement and the ability that exists in the American industries to produce the goods which these countries need, should be coordinated with this bank through its leaders. Immediately there comes to my mind the names of James Hebert of Jones & Lamson Machine Co., Colonel Kraut of Giddings & Lewis, Glenn Bixby of Excello Corp., and Jeff Miller of the Illinois Tool Co. who should sit with the bank in an advisory capacity and work out the plans that will help to lift these people in the underdeveloped countries rather than to keep pouring money down the drain with no guidance. My dear Senator, we have a responsibility as enlightened people to pass on to the rest of the world that which our forefathers left us and that which we have developed as a result of this inheritance. We know very little about where we came from and less about where we are going, therefore, our obligation as Americans is to plan and assist those people who have less than we do, not by outright gifts, but by guidance and leadership which will permit them to follow the course which the history of the American scene through the years has proven to be the only successful course. There is also enclosed, my dear Senator, as a matter of interest, the newspaper which our group has printed because, you see, we are not only building a steel |