Mr. WATSON. That is quite correct. It is hoped from now on that private banks can take over. The period in which flexibility was required, I think, is now past. Senator BENNETT. I am just curious to know whether you plan to hurry up your withdrawal from the Export-Import Bank so that perhaps those funds can be added to the bank's present loaning limit and put to work somewhere else. Mr. WATSON. I think at the present time the bank is hoping to dispose of its investment in the Steep Rock Co., Mr Chairman, to private interests. Senator BENNETT. Without any action on your part? Mr. WATSON. With our concurrence, of course, Mr. Chairman. They have considered our case and made inquiries to ascertain that the disposition they propose is satisfactory to the company. Senator BENNETT. The loan is in such shape that it can be disposed of; there is a chance that it can be disposed of? Mr. WATSON. A very good chance, Mr. Chairman. Senator BENNETT. The committee has a letter from the Steep Rock Iron Mines, Ltd. dated September 9, 1953, and signed by Mr. Fotheringham, president and general manager, in response to the questionnaire, which I would like to put in the record at this point in the testimony. Thank you very much, Mr. Watson. Mr. WATSON. Thank you, Mr. Chairman. (The material referred to follows:) STEEP ROCK IRON MINES, Ltd., September 9, 1953. Senator HOMER E. CAPEHART, Chairman, Committee on Banking and Currency, United States Senate, Washington, D. C. DEAR SIR: In response to your inquiry of September 3, we are glad of the opportunity to cooperate with you in gathering information and opinion with respect to the Export-Import Bank of Washington. We have had no contact with the International Bank for Reconstruction and Development, and are therefore unable to offer any comment on that institution. Referring to your specific questions respecting the Export-Import Bank, we can advise as follows: 1. In 1943 and subsequently our company received from the Reconstruction Finance Corporation loans in the aggregate of $5 million, which constituted part of the moneys required for the development of large deposits of high-grade iron ore located in the bed of Steep Rock Lake. With this loan our first open-pit mine was brought into production and additional ore deposits were successfully explored. Because of the declining reserves of high-grade ore on the Mesabi Range and the urgent need for bolstering the North American iron ore supply, it was deemed advisable to extend the development of the Steep Rock Iron Range. Accordingly in 1948 we approached Reconstruction Finance Corporation and the Export-Import Bank in connection with provision of a portion of the required expansion funds. 2. We have had extensive correspondence with the Export-Import Bank as well as numerous conferences with their officials, and have consistently found them to be reasonable, businesslike, and diligent in their correspondence and interviews. 3. As indicated in (1) above, we applied in 1948 for a $5 million loan from the Export-Import Bank. 4. Our application was granted, and was handled courteously and with dispatch. 5. The $5 million credit advanced by the Export-Import Bank has, in our opinion, been administered consistently in a very efficient manner. Investigations made by the bank officials prior to granting the loan were thorough. They have kept in touch with our activities consistently, and have done whatever was possible to insure the efficient development and operation of the mines and to protect their investment. 6. We have no complaints about the operations of the bank. 7. In our judgment, the Export-Import Bank has aided materially the exportimport trade of the United States. 8. We believe that the bank has assisted materially in developing and expanding the economy of friendly foreign countries. In our case, the loan received from the Export-Import Bank was an important factor in the successful development of the Steep Rock Range. When our property has been fully developed we anticipate that there will have been a total capital investment in excess of $100 million, and the annual gross value of the iron ore produced here in due course will exceed $100 million. The bulk of our production is exported from Canada to steel mills in the United States, and the bulk of our mining equipment originates in the United States. 9. We have found the policies of the Export-Import Bank to be consistently sound, and have no specific suggestions for modification of bank policies. 10. We believe that the Export-Import Bank has materially assisted the expansion of international trade. We understand that the Reconstruction Finance Corporation is to be dissolved, and in that event we suggest that the Export-Import Bank might properly absorb the Self-Liquidating Division of RFC insofar as foreign credits are concerned. We are firmly of the opinion that the economic concept behind the ExportImport Bank is sound, that their policies have been sound and internationally beneficial, and that their officials have consistently demonstrated good business judgment. You inquired whether it would be possible for me to testify before your committee. We desire to cooperate with you in every possible way, but unfortunately pressure of work at the property would almost certainly prevent my attendance in Washington for such purpose during the next several weeks. I would be glad, however, to endeavor to supply by letter such information as you may require. Sincerely yours, M. S. FOTHERINGHAM. Senator BENNETT. The next witness is Mr. Lansdell K. Christie of the Liberia Mining Co., Ltd., New York City. Do you have a prepared statement? STATEMENT OF LANSDELL K. CHRISTIE, PRESIDENT, LIBERIA MINING CO., LTD., NEW YORK, N. Y. Mr. CHRISTIE. No, I do not, Mr. Chairman. Senator BENNETT. You may identify yourself for the record and proceed in your own way. Mr. CHRISTIE. My name is Lansdell K. Christie. I am president of the Liberia Mining Co., Ltd. Our company was formed in 1946 for the purpose of developing an iron deposit in Liberia. As the founders of the company first studied the project, we grew to realize that it answered quite well to the terms of reference of the Export-Import Bank. As we devised a general structure for the financing of it, we planned on endeavoring to secure a loan from the bank. We did approach them at the proper time. We found the bank receptive to the idea. They, too, felt that it subscribed very well to their general policies. We would spend $6 million or $7 million in the United States for equipment, as we planned the project, and in addition would bring about a flow of iron ore to the United States. Over a period of probably a year we were in close association with the bank. We found it to be very conscientious, very hardheaded, but still with a willingness to entertain a reasonable project with, Í might say, a minimum of risk that was inherent in it. As the matter progressed the officials of the bank put stipulations on us, some of which were perhaps a little difficult to meet. But by the act of meeting these stipulations we improved our general situation. So I think that they served, one might say, unofficially in something of an advisory capacity, simply prompted by a desire to make it a sound risk or reject it. Bringing the matter briefly up to date, I think their judgment in this case has been well justified. Our loan was a 10-year loan. In 2 years of operation we were able to repay the complete loan. At this time we have no indebtedness with the bank. We do not contemplate, insofar as we can see, any further efforts to raise money. In closing, I think I must say that we concluded the entire matter with a great deal of admiration for the officials of the bank and for the way in which they conduct the affairs of the bank. Senator BENNETT. Thank you very much, Mr. Christie. Do you have any questions, Senator Payne? Senator PAYNE. No. Senator BENNETT. Are your stockholders mainly American citizens? Mr. CHRISTIE. Yes, sir; 90 to 95 percent, perhaps even 99 percent are. Senator BENNETT. Did the bank require a guaranty from the Government of Liberia? Mr. CHRISTIE. No, sir; they did not. It was purely a commercial transaction. Senator BENNETT. This is an example of an operation in which American capital goes abroad to develop a local resource for importation into the United States? Mr. CHRISTIE. Yes, sir. I think I should mention that they were mindful of the fact that this iron ore is much needed in this country, in that it is an extremely high-grade ore. I believe that was one of the considerations which impelled them to entertain the loan. Senator BENNETT. I have no other questions. Thank you very much, Mr. Christie. At this point in the record I will place the letter of October 28, 1953, signed by Mr. Christie, addressed to the committee, in reply to our questionnaire. (The material referred to follows:) LIBERIA MINING Co., Ltd., MONROVIA, LIBERIA, Hon. HOMER CAPEHART, New York 5, N. Y., October 26, 1953. Committee on Banking and Currency, Washington 25, D. C. MY DEAR SENATOR CAPEHART: This is in reply to your letter of September 3d setting forth certain questions on the subject of the Export-Import Bank. For purposes of simplicity I repeat below in the left-hand column, the questions propounded by your committee and in the right-hand column, the answers, according to our best judgment and belief. 1. The nature or purpose of your contact with the bank. Answer. The purpose of our original contact with the Export-Import Bank was to arrange for a loan to assist in the development of an iron mine in Liberia. 2. If you had correspondence with the bank did you receive prompt and satisfactory replies? Answer. We invariably received prompt and appropriate replies to our communications with the bank. 3. Have you ever applied for a loan from the Export-Import Bank? Answer. We did apply for a loan. 4. If so, has your application been granted or denied? Was it handled in a courteous and expeditions manner? Answer. Our application was granted. The loan was processed in a courteous and expeditious manner. 5. If a credit was authorized was it administered by the Export-Import Bank in an efficient manner? Answer. The credit was administered in an efficient manner. 6. Have you any specific complaints about the operations of the ExportImport Bank? Answer. We have no complaints. 7. Has the Export-Import Bank aided or failed in properly financing and facilitating the export-import trade of the United States? Answer. The bank has been very efficacious in financing and facilitating the export-import trade of the United States. 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. The bank has assisted in developing and expanding the economy of foreign countries and has thereby increased the capacity of foreign countries to purchase United States goods. 9. Have you any suggestions for alterations in the policy or operations of the Export-Import Bank? Answer. We have no suggestions for changes or alterations. 10. Has the Export-Import Bank facilitated the expansion of international trade in the past, and it so, how can it more adequately expand it in the future? Answer. The present policies of the bank, if continued, should assist in the expansion of international trade. At the time this company approached the bank for a loan, ours was a pioneer venture, intrinsically sound, but like all pioneer ventures, still unproven through the medium of actual operating experience. The various individuals of the bank who gave their time and thought to the matter of our application showed courage and foresight, but in addition, a very commendable caution. The bank made an extremely thorough study of our undertaking. This involved all angles of the business, financial, sales, operation, etc. As a result of this study, they layed down various constructive stipulations, some of which were hard to meet, but it naturally followed that in responding to the terms imposed by the bank we were improving our own position, as well as qualifying for the loan. We emerged from the negotiations with a high degree of respect for the personnel of the bank. They were men of integrity and competence and the type which a citizen and taxpayer is grateful to find filling public office. The writer would conside. it a privilege to appear at any time desired by your committee. Yours very truly, LANSDELL K. CHRISTIE. Senator BENNETT. The next witness is Mr. Manuel Noriega of the Compania Fundidora de Fierro y Acero de Monterrey, S. A., of New York City. STATEMENT OF MANUEL NORIEGA, REPRESENTING THE COMPANIA FUNDIDORA DE FIERRO Y ACERO DE MONTERREY, S. A., NEW YORK, N. Y. Mr. NORIEGA. My name is Manuel Noriega. I represent the oldest Mexican steel company in Mexico, Compania Fundidora de Fierro y Acero de Monterrey, S. A., or as we call it for short, "Monterrey Iron & Steel." Our company over the last 5 years has had 2 loans from the ExportImport Bank aggregating $51⁄2 million, approximately. We have used all of that money to purchase equipment in the United States to further develop the capacity of the iron ore resources within Mexico. Our company has also been purchasing supplies regularly in the United States on the average of $12 million yearly. Senator BENNETT. Your company is largely owned in Mexico? Mr. NORIEGA. Yes, about 85 to 90 percent is Mexican-owned. The rest is American capital. About 15 percent is United States capital. Senator BENNETT. This is not a parallel case with that of Mr. Christie? Mr. NORIEGA. No. Senator BENNETT. How long has your company been manufacturing iron and steel? Mr. NORIEGA. Over 50 years. It started in 1900. Senator BENNETT. The Export-Import Bank coming in represents a program of expansion? Mr. NORIEGA. That is correct. Senator BENNETT. And further development? Mr. NORIEGA. That is correct. Let me mention here that in our case, as I believe is true in other countries to the south, loans and capital are essential, otherwise we would not be able to either start an operation, establish it, or sustain it because of the scarcity of development capital in the countries to the south due to the newness of their economic development. Senator BENNETT. I would think that we in America would be interested in seeing those two methods developed side by side, that we would be interested in seeing in a country like yours the ability to expand as they would be interested in seeing American capital come in and start a new company in a new area. Do you have any questions, Senator Payne? Senator PAYNE. No. Senator BENNETT. I have no other questions, Mr. Noriega. At this point we will submit for the record the statement which Mr. Noriega has just presented to us, and a copy of the letter written on October 8 in response to the committee questionnaire, signed by Mr. Noriega. (The material referred to follows:) STATEMENT ON THE DEVELOPMENT OF INTERNATIONAL TRADE WITH THE REST OF THE AMERICAS BY MANUEL NORIEGA The countries in the American Continent to the south of us offer a golden opportunity for the development of our trade, and simultaneously, for the establishment of a secure source of an abundant supply of strategic materials. And last, but not least, in the process of helping them to develop their natural resources and establishing prosperous and healthy economies, to our mutual benefit, we will have helped the consolidation of a powerful bulwark for the free world. The The American Continent was blessed by a kind providence with a tremendous wealth of resources of all kinds for the fulfillment of an abundment life. northernmost part of the continent has been able to reach a very high standard of living for its people through the judicious utilization of its wealth. Similar posibilities are latent in the rest of the American Continent: their natural resources are, if anything, greater than those of the northern portion, and its people are anxious to develop them to their utmost, in order to reach a more abundant life. They have already made some headway in that direction; but because their economic development is so recent, they lack the tools or capital 1esources, to accomplish their goal in a short time unless they are able to borrow the necessary tools. This situation presents an ideal opportunity for the United States to enter into a partnership with the rest of the peoples of the Americas to provide them with the capital goods necessary to accomplish their goals. This would be in the manner of an investment that would yield manifold returns. It would provide, immediately, a tremendous market for our capital goods to carry out the plans of industrialization that have already been initiated in most of the countries to the south of us. The beneficiation of their resources, both material and human, made possible by this partnership, will accelerate the improvements of the standard of living already initiated in practically all of these countries and thereby create a tremendous market for our consumer goods. Since industrial and economic improvements set off a sort of chain reaction, in which every step forward creates further |