Profit from Foreign Aid

For foreign customers who need U.S. goods but lack the cash to pay for them, there is always one avenue of last resort. When both private bankers and the World Bank (which makes only loans guaranteed by foreign governments) refuse credit, the borrowers go to the U.S. Government's Export-Import Bank, set up to finance purchases of U.S. goods when other funds are unavailable. Last week three Japanese firms that wanted such loans were winding up arrangements to get them. To ease Japan's chronic power shortage. Ex-Im was closing an $11million loan to Kansai Electric Power Co. to help buy U.S. generators from Westinghouse. Two other Japanese companies. Tokyo Electric Power Co. and Chubu Electric Power Co., were making deals to get similar loans for generators from General Electric.

Paying Its Way. Since Ex-Im was set up in 1934 to provide risk capital for overseas trade, the bank has disbursed $5.1 billion to individuals and government agencies in more than 65 nations. So far. $2.4 billion has been repaid; defaults have amounted to less than 11%. As a result, the bank has always paid its own way, turned over $283 million in interest and dividends to the U.S. Treasury while building up a $367 million surplus.

Ex-Im stretches a helping hand to anyone with a "reasonable" chance of success, will shell out millions for airplanes or thousands to buy a truck. In 1955 alone, Ex-Im authorized $371.1 million worth of individual loans, also handed out general lines of credit worth another $15-1-9 million to 130 U.S. exporters. An Argentine company got $60 million for a new steel mill; a Brazilian company got $1,222,000 for new U.S. buses; customers in Peru, Thailand, Turkey. Greece, Italy. Egypt borrowed funds ranging from $20 million down to $5,000 for everything from hospital equipment to coal-washing machines and textiles. The biggest private enterprise loan so far: $100 million last year to the U.S.-owned Southern Peru Copper Co. to develop the Toquepala deposit of critically short copper (TIME, Jan. 17, 1955).

Banker from Lincoln. The man who minds Ex-Im's till is Samuel Clark Waugh, 65, a longtime Nebraska banker with a wide-open mind and the appropriately chubby (5 ft. 10 in., 200 Ibs.) build of a Santa Claus. Going to Washington in 1953 after 40 years with the First Trust Co. of Lincoln, the last seven as president, he took charge of international economic affairs for the State Department, became a vocal and effective champion of freer trade. Traveling thousands of miles in 28 months, Waugh helped write the GATT agreements in Geneva, campaigned for Japan's admission and finally won. Back home, Waugh carried much of the Administration's load during the congressional hearing on renewal of the Trade Agreements Act, had the satisfaction of seeing it go through after a hard fight.

As Ex-Im president since last fall, Banker Waugh has worked hard to boost overseas loans. Back in the early days of the Administration Treasury Secretary Humphrey, who had to lend the bank its funds, was skeptical, wanted to cut down. But after studying the bank's consistent profits ($59 million in fiscal 1955), he became an ardent booster, hand-picked Waugh and backed his policy of increasing the flow of loans. Now President Waugh is funneling out new loans at a greater rate than last year. Among them: $19.6 million to the Santos-Jundiai Railway in Brazil, $3,300,000 to Chile for more steel, $14 million to Iran, $65 million to the Philippines for general economic development.

To Help America Grow. Last week Banker Waugh was off on a three-week flying trip to Mexico and Central America to look over still more loan prospects, plans trips to Europe and Asia this year. He also hopes to encourage more small loans, bring more private capital into export-import trade, thus release more Ex-Im funds for new loans.

But whether or not more private bankers come in, President Waugh promises to keep Ex-Im growing. He measures the need for the bank by letters such as the one he got recently from Mack Truck President P. 0. Peterson, who landed a $1,000,000 bus order from Iran with Ex-Im help. Wrote Peterson: "If America is to continue to grow and prosper, industrial concerns like Mack must find outlets for their increasing production. The Export-Import Bank is playing an essential role in enabling America to obtain its fair share of foreign markets."

This file is automatically generated by a robot program, so reader's discretion is required.