mill and not only creating consumers, but we are trying to raise the educational standard of these people so that they can carry on successfully when the writer can no longer be on the scene. You will note on the inside page a photograph of the writer and what the Colombians think of his contribution. We have carried on to great length, but, Senator, we congratulate you because we feel that from what you are doing there will come a feeling of responsibility which cannot help but assist our great country in assuming its duties. Senator, believe us, the interest expressed in your letter indicates that we should take renewed hope that there still exist in the United States people who recognize their responsibility. The above comments are made in the spirit of cooperation and we place at your disposal the years of background and knowledge of these underdeveloped countries. Do with them as you will. God bless you. Regards and respect. FRANCIS BERETTA, Jr., Senator BENNETT. It is obvious we are not going to get through today's list of witnesses this morning. I would like to check the possibilities for the rest of the hearing. We will recess now because the Senate goes into session at 12 o'clock. We will come back at 2 o'clock. (Whereupon, at 11:55 a. m., a recess was taken until 2 p. m., the same day.) AFTERNOON SESSION (The committee reconvened at 2:03 p. m., Senator Wallace F. Bennett presiding.) Senator BENNETT. Mr. Rovira, I believe we can start. I do not know if other members of the committee will be here or not. Do you have a prepared statement? STATEMENT OF GERMAN ROVIRA S., REPRESENTING THE CORPORACION BOLIVIANA DE FOMENTO, AND YACIMIENTOS PETROLIFEROS FISCALES BOLIVIANOS Mr. ROVIRA. No, sir; I do not. Senator BENNETT. Will you give the reporter your name for the record? Mr. ROVIRA. My name is German Rovira. I am the representative in the United States for the Corporacion Boliviano de Fomento and Yacimientos Petroliferos Fiscales Bolivianos. Mr. Chairman, I just have to add a few remarks to what I have already said in my letter of September 22 to the chairman of the committee. First of all, I would like to definitely emphasize the fact that all the relations of the Corporacion de Fomento and Y. P. F. B. with the Export-Import Bank while getting some of the loans we did have been most friendly, most courteous, and we have received on every occasion the most ample cooperation and help from all the authorities with whom we have been dealing at the bank. Senator BENNETT. Apparently you were given 2 loans and the third was denied, or 1 of the 3 loans was denied? Mr. ROVIRA. Yes. We received two loans before my letter of December 22, and one after, on December 31. We have received 3 loans, and 1 denied. Senator BENNETT. Three out of four, then, instead of two out of three? Mr. ROVIRA. That is right, Mr. Chairman. We received two loans for highway construction for a very important transportation connection uniting the lowlands with the uplands. That project is known as the Cochabamba-Santa Cruz Highway. The total amount of the three loans that we received was $28,400,000. Besides those two loans for the highway we have received an additional loan for a petroleum project that we have. I would like to clarify that the mining project was for the establishment of a concentration plant for tin concentrates. We are still exporting tin concentrates, of very low percentage of metallic tin, to the United States. At the time the idea was to concentrate these ores to a high concentration, that is, the same concentration that we have on shipments to England, which run to about 50 percent of metallic tin. Due to different conditions at the time-that was 1949-the request for the loan, which was for $2,500,000, was denied. However, at this same time we were requesting an additional loan to complete the highway. This additional loan, which was for $16 million, was granted. Senator BENNETT. It was the purpose of the loan that led to denial rather than any other element in it? Mr. ROVIRA. I would imagine that was the case, Mr. Chairman. The loans granted by the Export-Import Bank to the Bolivian Government Corporation and Y. P. F. B. are examples of real cooperation on the part of the United States Government to a country such as Bolivia. These loans have definitely been helpful to Bolivia, although some of the results are not yet fully achieved. We have the case of the petroleum loans, which were for the construction of pipeline and a refinery. Since November of 1953 I am happy to say we have been self-sufficient in gasoline and kerosene. We still have to import diesel oil and fuel oil for heavy industry. However, this first results of this type corporation are definitely showing a saving of approximately $300,000 per month on foreign exchange to the country. We are hopeful that before the year is over we will be in a position to show additional gains in the saving of foreign exchange. Senator BENNETT. Does the crude oil from which you produce your gasoline and kerosene have its origin in Bolivia? Mr. ROVIRA. Yes. We have several fields. At the end of October 1953, production was only 850 barrels per day. At the present moment our production is 4,200 barrels per day. With regard to the highway, this important link between the highlands and the lowlands will show also a great saving in foreign exchange. At the present moment we have to import almost everything that is consumed in the country, including commodities such as wheat, meat, cotton, sugar, rice, and so forth. When the highway is completed, there will be transportation between these areas and the above products will be produced with the exception of wheat which will have to be imported for some considerable length of time. The highway will be open for traffic at the end of April 1954, but will not be completely paved. We only have approximately some 100 kilometers of pavement against a total length of 500 kilometers. We are hopeful that if some new government plans come through to be able to pave this highway. The present situation in Bolivia is a very difficult one. I think you can realize, when you come from a mining State, exactly how a mining country like mine is affected when our main export is one commodity, tin. I would also like to state that at this moment we are up to date on all of our obligations to the bank, amortization and interest. I do thank you for allowing me to come to testify. If you have any questions, I will be most happy to answer them. Senator BENNETT. Apparently your 3 loans are only 3 of 9 loans made by the Export-Import Bank in Bolivia. I suppose the rest of them were to private corporations rather than to a Government agency? Mr. ROVIRA. Yes. There were three loans made to some mining interests in Bolivia prior to the nationalization of some of the mines. They were to the Patino group, the Hochschild group and the Aramayo group. They were for minerals of a strategic nature. Senator BENNETT. There were apparently three tungsten loans made in the country. Mr. ROVIRA. That is right. Senator BENNETT. The total of loans made by the Export-Import Bank in Bolivia is $39,008,000, including your own and the others that were made to private interests? Mr. ROVIRA. Yes; $28,700,000, approximately, for the highway project and $8,500,000 for petroleum. Senator BENNETT. Thank you very much. We will put Mr. Rovira's letter in response to the committee questionnaire in the record at this point. The letter is dated September 22, 1953. (The material referred to follows:) CORPORACION BOLIVIANA DE FOMENTO, Senator HOMER E. CAPEHART, UNITED STATES OFFICE, Washington, D. C., September 22, 1953. Chairman, Committee on Banking and Currency, United States Senate, Washington, D. C. DEAR SENATOR: I am very sorry I could not answer your letter of September 3, 1953, as soon as I would have liked owing to my absence from the city. I hope this delay has not caused any inconvenience. The Bolivian Development Corporation has been in direct contact with the Export-Import Bank since its organization in 1942. I shall try to answer your questions in the same order as you have requested them. 1. The Bolivian Development Corporation was organized after recommendations made by an American mission (the Bohan mission) that visited Bolivia at the end of 1940 and part of 1941 and studied different problems of the Bolivian economic picture. One of the recommendations was the establishment of a development corporation which would undertake certain projects which the mission felt were vital for the development of the country. On December 29, 1942, the tripartite agreement was signed between the Export-Import Bank, the Bolivian Government, and the Corporacion Boliviana de Fomento, whereby CBF would receive a loan from the Export-Import Bank of $15,500,000 for the building of a highway from Cochabamba to Santa Cruz, and for financial help to YPFB to increase the production of oil. Our contact with the bank has been related directly to the loans granted by them to the CBF with the guaranties of the Bolivian Government. 2. We have had quite a lot of correspondence with the bank and have received prompt and satisfactory replies. 3. We have applied for three loans from the Export-Import Bank. 4. Two of these requests for loans have been granted, one denied. Due to a complexity of problems, the negotiations in the last two requests have been carried out over many months. 5. All the credits authorized and administered by the bank have been done in a very efficient manner. 6. We have no specific complaints about the Export-Import Bank. 7. To the best of our knowledge, the Export-Import Bank has aided in properly financing and facilitating the export-import trade of the United States. 8. In the case of Bolivia, I would say that the bank has assisted, and is assisting, in the development and expansion of the economy of our country, and believe that it will eventually increase the capacity of our purchases in the United States. 9. No comment. 10. The Export-Import Bank, to the best of our knowledge and from our own experience, has facilitated the expansion of international trade and think that it can do more in the future if given the proper authority and necessary funds to carry out its work. As a representative of a foreign government agency, I believe I would have to request the authorization of my principals to appear before your committee and testify with respect to the matter under consideration. However, I can assure you that this representation and my principals would be most happy to cooperate with your committee to the best of its ability. Very truly yours, GERMAN ROVIRA S., United States Representative. Senator BENNETT. Our next witness will be Mr. Jose Pinheiro, representing the Companhia Siderurgica Nacional, which is the Brazilian National Steel Co., of New York. Do you have a prepared statement? STATEMENT OF JOSE G. DE A. PINHEIRO, REPRESENTING THE Mr. PINHEIRO. Yes, Mr. Chairman, I have. Mr. PINHEIRO. Yes, I would. This will acknowledge receipt of your letter of January 20, 1954, relative to my appearance before the Committee on Banking and Currency on February 2. Your letter of September 3, 1953, was answered under date of September 21, 1953, by Mr. Aparicio Rodrigues da Cunha, in charge of our New York office. However, in accordance with your telegram of December 30, 1953, and your letter of January 20, we are submitting the following statement expanding the information previously presented by our New York office in answer to the specific questions listed in your letter of September 3. In the past 12 years, the Companhia Siderurgica Nacional (Brazilian National Steel Co.) has negotiated 2 loans with the ExportImport Bank for the purpose of assisting in the financing of the building and subsequent expansion of an integrated steel plant at Volta Redonda, Brazil. The first loan, in the amount of $20 million, was negotiated in May 1941 (Export-Import Bank credit No. 269). Two amendments were made, in December 1941 and June 1943, in the amounts of $5 million and $20 million, respectively, thus bringing the total of the first loan to $45 million. Shortly after operations of the plant were commenced in 1946, the rapid growth of industry in Brazil created an increasing demand for rolled-steel products that could no longer be met by the original plant facilities. Continued increases in the unfulfilled demand for such products indicated the necessity of a plant expansion and, for this purpose, a second loan of $25 million was negotiated with the Export-Import Bank by Gen. Sylvio Raulino de Oliveira, president of our company. This loan (Export-Import Bank credit No. 481) was executed on August 1, 1950. We believe that the Export-Import Bank has greatly stimulated the flow of trade between Brazil and the United States by materially aiding in the financing of the basic iron and steel industry in Brazil. As a direct result of the availability of basic steel products at Volta Redonda, a remarkable growth of other industries in Brazil took place, thus increasing the standards of living and greatly expanding the Brazilian economy. It is therefore our opinion that the Export-Import Bank has definitely assisted in the development and expansion of the economy of our country. The dollar amount that Brazil previously used for the purchase in the United States of basic crude steel products such as plates, rails, structurals, etc., has become available, as a result of the construction and successful operation of the Volta Redonda plant, for the purchase of manufactured steel and other products, such as industrial machinery, heavy equipment, and other items in highly finished form in the United States. We believe that this is advantageous to both our countries. It is relevant to point out that, under the terms of both ExportImport Bank agreements, the total amount of $70 million of the 2 loans granted to our company was spent entirely in the United States for the purpose of purchasing equipment and materials and paying for engineering services, transportation, insurance, etc. In addition to that, the purchasing offices established in the United States by our company have received from Brazil, up to December 31, 1953, a total of $94,703,252.90 to be spent in this country over and above the $70 million made available by the Export-Import Bank loans. These remittances from Brazil included $25,227,345.80 for payments to the Export-Import Bank as follows: The remainder of the $94,703,252.90 remitted from Brazil amounted to $69,475,907.10. As of December 31, 1953, $66,574,922.39 of this amount was spent for the purchase in the United States of coal, spare parts, machinery, and to pay for the costs of transportation, insurance, and engineering services, as well as for salaries of the American technicians sent to Brazil under contract with our company and for maintenance of our offices in Cleveland and New York since October 1940. In this connection, it is significant to list two of the major items that comprise the bulk of our expenditures in the United States from the beginning of 1945 to December 31, 1953: Machinery and equipment.. $16, 777, 795. 57 30, 083, 555.90 Further, we wish to point out that our company has also been buying in Brazil, from representatives of American firms, a substantial amount of miscellaneous materials and equipment, including fuel oil, diesel oil, gasoline, kerosene, lubricants, trucks, automobiles, spare parts; moreover, sulfuric acid of Brazilian manufacture made |