include the legitimate seizure of goods pursuant to normal health and contraband regulations. (3) There were two specific requirements before insurance would be issued, namely, that it was unobtainable from private insurance companies and that it was unobtainable under the existing marine and war-risk insurance program of the Commerce Department. The private insurance companies and the Commerce Department did provide war-risk insurance while goods were aboard ship, so the bank would not issue that type of coverage. However, neither the Commerce Department nor the private insurance companies would provide protection for the goods after they were located abroad. (4) The bank was permitted to reinsure in private insurance companies and employ such companies as underwriting agents. The indications were that efforts to get private companies to reinsure part of the risk would be unsuccessful. However, the bank felt it would be able to call on the facilities of the private insurance companies to act as agents for the bank. The use of private companies would avoid the necessity of enlarging the bank's staff to process insurance applications and to administer the policies. (5) The bank would fix the terms and conditions of the insurance. However, the bill limited the term to 1 year, subject to a renewal for a period not to exceed 1 year (Senate hearings on S. 1413, April 13 and 14, 1953, vol. No. 1038, pt. 7, pp. 10-17). Mr. Edgerton stated that the need for insurance arose because American exporters could not arrange for commercial bank financing of sales abroad unless these risks were covered by insurance. This was particularly true of such commodities as cotton, and especially where goods and commodities were shipped abroad on consignment. It was believed that the availability of this type of insurance would encourage commercial bank financing and thus help American exporters sell more goods and commodities abroad (Senate hearings, vol. No. 1038, pt. 7, p. 13). The bank would have a problem in fixing rates for insurance. The difficulty arose because fixing a rate on an actuarial basis would make it necessary to charge prohibitive rates. On the other hand, the insurance program should be on a selfsustaining basis. The solution would be to have the rates on an equitable basis, varying with the country and the type of goods and commodities involved. Also the rates would be subject to change, and the risks would not be concentrated in one area (Senate hearings, vol. No. 1030, pt. 7, p. 16). Another problem discussed by Mr. Edgerton was the necessity of limiting the insurance to certain types of goods and commodities. The program would be limited to those exports which really needed insurance protection in order to be sold abroad and which normally constituted an exportable surplus (Senate hearings, vol. No. 1038, pt. 7, pp. 16-17). (NOTE.-Mr. Hawthorne Arey, vice chairman of the bank, presented this same statement of the bank in the House Banking and Currency Committee's hearings on H. R. 4465, April 20 and 21, 1953, pp. 2-6). Mr. Howard H. Gordon, of the Agriculture Department, voiced approval of the insurance program because it would facilitate the export of agricultural commodities, particularly cotton. The following persons endorsed the bill for the same general reasons as Mr. Gordon's: William A. McGregor, vice president of the Guaranty Trust Co. of New York; Walter L. Randolph, American Farm Bureau Federation; W. D. Felder, Jr., National Cotton Council; D. W. Brooks, National Council of Farmer Cooperatives; John C. White, American Cotton Shippers Association; Charles Sayre, Delta Council of Mississippi, Arkansas Agricultural Council, Lousiana Delta Council, and Missouri Cotton Association; W. Raymond Ogg, American Farm Bureau Federation; Read P. Dunn, Jr., National Cotton Council; and Homer L. Brinkley, National Council of Farmer Cooperatives. (Senate hearings, vol. No. 1038, pt. 7 pp. 18-23, 24-25, 31-33, 33-37, 38-40, 47-51, 51: House hearings, pp. 19-23, 25-30, 30-39, 39-41, 41-43, 52–57.) Mr. Craig R. Sheaffer of the Department of Commerce, stated that the Commerce Department was in favor of the bill, but wanted to make it clear that manufactured goods were covered by the insurance. Another statement in favor of the bill on general grounds was made by Allen Walker, director of the inter national division of the Washington Industrial Research Consultants, Inc. Letters in favor of the insurance program were received from: Harold E. Stassen, Director of the Mutual Security Agency; M. B. Folsom, Acting Secretary of the Treasury; Robert B. Murray, Jr., Acting Secretary of Commerce; and Herbert N. Goettlich, president of the National Association of Steel Exporters, Inc. (Senate hearings, vol. No. 1038, pt. 7, pp. 23-24, 40-42, 3-9; House hearings, pp. 12-19.) Several persons appeared to oppose the insurance program, and it is of interest to note that this was the first time that legislation concerning the bank was enacted in the face of full-scale opposition. Mr. Roy Leifflein, of the Association of Marine Underwriters of the United States, stated that the underwriters felt that the same problems which deterred commercial companies from providing this insurance applied to an even greater extent to the Government. The modern weapons of war rendered the entire amount of insurance subject to loss in the event of hostilities. His suggestion that the insurance should not cover goods and commodities while in transit was incorporated in the bill as passed by Congress (Senate hearings, vol. No. 1038, pt. 7, pp. 26–30; House hearings, pp. 43–52). Mr. K. G. Hunt represented the Dallas Cotton Exchange and the Dallas Cotton Shippers Association in opposition to the insurance program. He stated that the small shippers of cotton could not profitably undertake the sale of cotton by consignment abroad. There were only a dozen cotton exporters with financial ability and organization that could consign large quantities of cotton. Therefore this insurance program would not help the small and medium size cotton shippers. As for cash-on-arrival sales, there was already sufficient insurance available for those transactions. There was the danger of great losses in insurance from war. Also there were no dependable statistics showing that supplies of cotton abroad were inadequate (Senate hearings, vol. No. 1038, pt. 7, pp. 43-47; House hearings, pp. 57-59). The only other opposition was a letter from H. W. Farnum, vice president of the Insurance Company of North America. He stated the following points: (1) It would be impossible to accumulate enough premiums during peacetime to cover war losses. A war would result in losses to the taxpayer. (2) Insurance coverage presently available was sufficient for exporters who exercised reasonable precaution. (3) The legislation discriminated in favor of large exporters because small exporters would not have sufficient capital to tie up part of their stock abroad. (4) There was a security danger in having stocks of American merchandise in exposed overseas areas. (5) This legislation continued the trend of Government support to trade and business (Senate hearings, vol. No. 1038, pt. 7, p. 30). Reorganization of the Bank (1953) On April 30, 1953, the President of the United States presented to Congress a plan for reorganizing the Export-Import Bank, under the authority vested in him by the Reorganization Act of 1949 (Public Law 104, 81st Cong. (63 Stat. 203); Legislative History, pp. 17-19). In the hearings on the Supplemental Appropriation Act for 1954 (Public Law 207, 83d Cong. (67 Stat. 418)), held in June and July 1953, Mr. Glen E. Edgerton explained the effect that this reorganization plan would have on the Bank. Under Reorganization Plan No. 5 of 1953, the Board of Directors was abolished and three officers, i. e., a Managing Director, a Deputy Director and an Assistant Director were substituted for it. The Advisory Board of the Bank, which never functioned materially, was abolished along with its functions. Also the position of the Chairman of the Bank on the National Advisory Council was abolished (Hearings of subcommittee of the House Appropriations Committee on H. R. 6200, June 9, 1953, pp. 180, 194, 202). It was pointed out by a committee member that sections 4 and 5 of the reorganization plan appeared to be inconsistent. (See Legislative History, p. 19.) Mr. Edgerton stated that "it leaves the Managing Director with the authority and responsibility to do everything just as his judgment dictates except as he is influenced by the National Advisory Council. It does not devolve upon it to say anything except what it feels is necessary to guide the Managing Director." did not think that the plan substituted the National Advisory Council for the He Board of Directors. "I think the power of the National Advisory Council to coordinate under the original law is very broad. You cannot coordinate unless you can veto, so I think the plan emphasizes the authority of the National Advisory Council, but I do not think it changes it materially." Some examples of the problems considered by the Council were loans of great magnitude, what the interest rate should be, policy with respect to different countries, conflicts or coordination with other agencies including the International Bank (House Appropriations subcommittee hearings, pp. 202-3, 204–5). In discussing the various functions of the bank, Mr. Edgerton stated that the bank had not as yet issued any insurance under its new authority. The bank was in the process of setting up the mechanism for this program. The bank was still acting as agent for loans under the Defense Production Act of 1950, and the Mutual Security Act of 1951. There was no relation between the bank and the point 4 program, except that the bank obtained advice from that source (House Appropriations Subcommittee hearings, pp. 191, 198, 204). Mr. Edgerton testified that the time for processing loans varied greatly, but the average time was a matter of months, not days or weeks. The bank had no standard application form. The applicant kept furnishing more information until the application was complete. The applicant might think that the time consideration of the loan began with the first inquiry, but the bank felt the time began to run when the application was complete. There had been some complaints on this matter (hearings of the Senate Appropriations Committee on H. R. 6200, July 23, 1953, pp. 491-492, 498-499). Mr. Edgerton listea the various activities of the bank and the amounts involved, estimated as of June 30, 1953. (1) General foreign trade.—(a) Credits for development projects abroad and for expansion of foreign sources of strategic materials: Total loans outstanding of $922 million. (b) Commodity credits: Total loans outstanding of $430 million. (2) Credits for defense purposes.-Total loans outstanding of $68.5 million. (3) Small exporter and importer credits.-Average utilization of $200,000 a year. (4) Reconstruction credits.—Total loans outstanding of $835 million. (5) Lend-lease termination credits.—Total loans outstanding of $506 million. Under the Mutual Security Act loans, there was an unpaid balance of $1,150 million. Under the Defense Production Act loans there was $60,935 outstanding n notes (House Appropriations Subcommittee hearings, pp. 210-213). Mr. Edgerton stated that loan losses actually written off amounted to $279,500 and that loans in default fully reserved amounted to $220,000. Delinquent loans totaled $3 million in principal and $34 million in unpaid interest (House Appropriations subcommittee hearings, p. 199). The following statement of the bank's operations as of June 30, 1953, was submitted: Total authorizations. Total disbursements. Total repayments_ Total undisbursed authorizations. Outstanding loans.. Net income for fiscal 1952. Net income for fiscal 1953. Uncommitted lending authority Source: Senate Appropriations Committee hearings, pp. 495, 501. $6, 300, 000, 000 1, 100, 000, 000 4, 100, 000, 000 1, 500, 000, 000 791, 000, 000 2, 500, 000, 000 51, 800, 000 53, 800, 000 1, 000, 000, 000 The last congressional hearing in 1953, dealing with the Export-Import Bank, was held on July 29, 1953. The purpose of this hearing was the nomination of Glen E. Edgerton to be Managing Director and Lynn U. Stambaugh to be Deputy Director of the Export-Import Bank, pursuant to the Reorganization Plan No. 5 (hearings of Senate Banking and Currency Committee on the nominations of Glen E. Edgerton and Lynn U. Stambaugh, July 29, 1953, pp. 1-3). CONCLUSION The purpose of this study was to codify the expression of opinion concerning the policy and activities of the Export-Import Bank as recorded in the congressional hearings. No attempt has been made to present a statistical analysis of the bank's growth or operations. The statistics provided were for the purpose of showing the general trend of the bank's operation. Furthermore, no attempt has been made to analyze the legislative history of the bank, since that matter has already been covered by the committee staff. The reference to various legislative and executive pronouncements was both for the purpose of showing the opinion of Congress and the executive branch and also to serve as a background for the testimony of the various witnesses. AUTHORITIES LEGISLATION CITED 1. National Industrial Recovery Act, Public Law 67, 73d Congress (48 Stat. 195). 2. Fourth Deficiency Act, Public Law 77, 73d Congress (48 Stat. 283). 3. Bank Conservation Act, Public Law 1, 73d Congress (48 Stat. 6). 4. Public Law 1, 74th Congress (49 Stat. 4). 5. Public Law 2, 75th Congress (50 Stat. 5). 6. Independent Offices Appropriation Act for 1938, Public Law 171, 75th Congress (50 Stat. 348). 7. Independent Offices Appropriation Act for 1939, Public Law 534, 75th Congress (52 Stat. 43). 8. Public Law 3, 76th Congress (53 Stat. 510). 9. Reorganization Act of 1939, Public Law 19, 76th Congress (53 Stat. 561). 10. Supplemental Appropriation Act for 1940, Public Law 160, 76th Congress (53 Stat. 982). 11. Independent Offices Appropriation Act for 1941, Public Law 459, 76th Congress (54 Stat. 119). 12. Public Law 420, 76th Congress (54 Stat. 38). 13. Public Law 792, 76th Congress (54 Stat. 961). 14. Bretton Woods Agreements Act, Public Law 171, 79th Congress (59 Stat. 512). 15. Export-Import Bank Act of 1945, Public Law 173, 79th Congress (59 Stat. 526). 16. Public Law 282, 79th Congress (59 Stat. 666). 17. Government Corporations Appropriation Act, Public Law 519, 79th Congress (60 Stat. 588). 18. Government Corporations Control Act of 1945, Public Law 248, 79th Congress (59 Stat. 597). 19. Public Law 89, 80th Congress (61 Stat. 130). 20. Government Corporations Appropriation Act for 1948, Public Law 268, 80th Congress (61 Stat. 576). 21. Economic Cooperation Act of 1948, Public Law 472, 80th Congress (62 Stat. 141). 22. Government Corporations Appropriation Act for 1949, Public Law 150, 81st Congress (63 Stat. 374). 23. Export-Import Bank Appropriation Act for 1950, Public Law 150, 81st Congress (63 Stat. 374). 24. Export-Import Bank Appropriation Act for 1951, Public Law 759, 81st Congress (64 Stat. 641). 25. Public Law 158, 82d Congress (62 Stat. 367). 26. Defense Production Act of 1950, Public Law 774, 81st Congress (64 Stat. 798). 27. Mutual Security Act of 1951, Public Law 165, 82d Congress (65 Stat. 378). 28. Export-Import Bank Appropriation Act for 1953, Public Law 425, 82d Congress (66 Stat. 283). 29. Public Law 30, 83d Congress (67 Stat. 28). 30. Reorganization Act of 1949, Public Law 104, 81st Congress (63 Stat. 203). 31. Supplemental Appropriation Act for 1954, Public Law 207, 83d Congress (67 Stat. 418). EXECUTIVE ORDERS CITED 1. Executive Order 6581, dated February 2, 1934. 5. Executive Order 9361, dated July 15, 1943. CONGRESSIONAL HEARINGS CITED (NOTE.-The citation to volume numbers of these hearings refers to the compilation of hearings made by the United States Senate Library.) 1. House hearings on H. R. 5564, May 18, 19 and 20, 1933, volume No. 650. Senate hearings on S. 1712 and H. R. 5755, May 22, 26, 29 and 31, and June 1, 1933, volume No. 423, 2. House hearings on H. R. 5389. April 20, 21, 22, 24, 25 and 26, 1933, volume No. 651, part 7. 3. House hearings on H. R. 4240, January 23 and 24, 1935, volume No. 697. Senate hearings on S. 1175, January 23, 1935, volume No. 474. 4. House hearings on H. R. 2301, January 15, 1937, volume No. 834, part 4. Senate hearings on S. 3069, January 31, and February 1, 6 and 7, 1940, volume 11. House hearings on H. R. 10212, superseded by H. R. 10361, August 6, 7, 8, 13 and 14, 1940, volume No. 889, part 3. Senate hearings on S. 4204, July 30, 1940, volume No. 629, part 2. 12. House hearings on H. R. 4937, May 12, 1944, volume No. 1016, part 5. 13. House hearings on H. R. 2211, March 7, 8, 9, 12, 13, 14, 15, 16, 19, 20, 21, 22, 23 and 24, 1945, volume No. 1054, part 2. Senate hearings on H. R. 3314, June 12, 13, 14, 15, 16, 18, 19, 20, 21, 22, 25 and 28, 1945, volume No. 758. 14. House hearings on H. R. 3464 and H. R. 3490, superseded by H. R. 3771, July 11 and 12, 1945, volume No. 1020, part 2. Senate hearings on H. R. 3771, July 17 and 18, 1945, volume No. 754, part 6. 15. House hearings on H. R. 6777, May 16, 1946, volume No. 1098. 16. Senate hearings on S. 414, March 25 and April 8, 1947, volume No. 819, part 3. 17. House hearings on S. 993, May 8 and 12, 1947, volume No. 1150, part 4. 18. House hearings on H. R. 3756, April 24, 1947, volume No. 1144, part 1. 19. House hearings on United States foreign policy for a postwar recovery program, including H. R. 4840 and H. R. 4579, January 21, 1948, volume No. 1191, part 5. 20. House hearings on H. R. 6481, March 15, 1948, volume No. 1198, part 1. 21. House hearings on H. R. 3083, February 9, 1949, volume No. 1229, part 5. 22. Hearings before the Investigation Subcommittee of the Senate Committee on Expenditures in the Executive Department, pursuant to Senate Resolutuon 52, May 6, 17 and 18, 1949, volume No. 907, part 6. 23. House hearings on H. R. 5594, August 17, 19, 22, 23 and 24, 1949, volume No. 1261, part 4. Senate hearings on S. 2197, August 9 and 10, 1949, volume No. 913, part 2. 24. House hearings on H. R. 7786, January 23, 1950, volume No. 1276, part 3. Senate hearings on H. R. 7786, March 7, 1950, volume No. 942, part 2. 25. House hearings on S. 2006, September 18, 1951, volume No. 1340, part 2. Senate hearings on S. 2006, August 28, 1951, volume No. 980, part 6. 26. House hearings on H. R. 6584, January 28, 1952, volume No. 1350, part 8. Senate hearings on H. R. 6584, March 3, 1952, volume No. 1007, part 1. 27. House Banking and Currency Committee hearings on H. R. 4465, April 20 and 21, 1953, volume No. Senate hearings on S. 1413, April 13 and 14, 1953, volume No. 1038, part 7. 28. Hearings of the Subcommittee of the House Appropriations Committee on H. R. 6200, June 9, 1953, volume No. Hearings of the Senate Appropriations Committee on H. R. 6200, July 23, 1953, volume No. 29. Hearings of the Senate Banking and Currency Committee on the nominations of Glen E. Edgerton and Lynn U. Stambaugh, July 29, 1953, volume No. MISCELLANEOUS CITATIONS 1. Legislative History of the Export-Import Bank of Washington, Senate Banking and Currency Committee Print, September 10, 1953 (cited heretofore as Legislative History). 2. Index of Congressional Hearings in the United States Senate Library (1935). 3. Index of Congressional Hearings in the United States Senate Library (1935 supplement). 4. Index of Congressional Hearings in the United States Senate Library (1935 second supplement). |