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lative repayments data include $24,805,033 of principal repaid in cash, of which $14,154,504 was received from other countries for sugar delivered under the advance to Cuba by the Commodity Credit Corporation of the Agriculture Department. Data also include $578,340 of interest repaid in cash and $59,361,829 of principal paid in gold.

4. Commodity programs for Germany and Japan.-Credits resulting from commodity advances by the United States Government to Germany and Japan are included in table 11. Raw materials are being shipped to these countries for manufacture into finished goods, part of which is retained by the occupied area as a processing fee. The other part is exported to adjacent areas for dollar proceeds, which are used to reimburse the United States Government for the cost, of the raw materials and the handling charges and administrative expenses incurred. Any balance of these proceeds will accrue to the respective military government for the procurement of civilian goods for shipment to the occupied area. The major commodity advanced to Germany and the only commodity advanced to Japan has been raw cotton made available by the Commodity Credit Corporation through the U. S. Commercial Company.

The total collections of principal and interest recorded for Japan represent funds realized by USCC from the sale of Japanese textiles. The collections recorded for CCC represent funds transferred from USCC to CCC through June 30, 1947, plus the funds available for transfer on that date.

Credits arising as the result of the following bulk sales of surplus property have been considered utilized as of the dates agreements were signed: Belgium, $49,000,000; China, $55,000,000; France, $300,000,000; Italy, $160,000,000; Philippines, $5,000,000; and United Kingdom, $60,000,000. This was done because ultimate deliveries under bulk sales are expected to approximate the amounts specified in the agreement. Commitments are treated as equivalent to


In all cases other than bulk sales, utilization figures regularly have been based on actual deliveries of surplus property, including merchant-ship sales, or bills rendered for goods delivered under lend-lease credits. However, if unfilled contracts for the sale of surplus property were assumed to result in the immediate utilization of related credits, the figure for utilized surplus-property credits would be increased as follows:

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Credits utilized and outstanding under lend-lease fiscal operations for the United Kingdom are stated in the amount of $590,000,000, although billings to June 30, 1947, of $250,000,000 for post-VJ-day pipe-line transfers plus $472,000,000 lend-lease VJ-day inventories total $722,000,000. Under the lend-lease settlement of December 6, 1945, the post-VJ-day transfers estimated at $301,000,000 plus the lend-lease VJ-day inventories ($472,000,000) less an offset estimated at $183,000,000 for the reverse lend-lease pipe line and allowed claims are expected to approximate $590,000,000.

Commitments as of June 30, 1947, for China and France under lend-lease fiscal operations show a reduction as compared with March 31, 1947, of $7,150,000 and $55,000,000, respectively, bringing the net commitment figures for these two countries to $51,750,000 and $365,000,000. The revised figures represent the estimated value of lend-lease aid furnished and to be furnished under the reported credits. With the recording of additional data during the September quarter, it is presently estimated that the net commitment figure as of September 30,1947, will be reported in the amount of $385,000,000 for France.


Because of the wide variety of transactions and differences in the accounting procedures of the lending agencies, it was impossible to prepare simple definitions applicable to all cases, but the classifications used are as consistent in principle as possible.

Sales of surplus property against foreign currencies and other property when the currencies have been paid to the account of the United States, or title to the

other property has been transferred, are considered as cash, not credit, transactions, even though there are quantitative limitations on the use of the foreign currencies which prevent their complete utilization for a year or more. On the other hand, sales against foreign currencies, services, or property which are to be paid, performed, or transferred upon demand are considered as credit transactions to the extent that demand has not been made.

"Net commitments" covers all loans and credits approved by the responsible officials of the lending agencies from available funds even if they have not in every case been signed or formalized by credit agreements. Cancellations and expirations up to June 30, 1947, have been deducted from the amounts authorized. "Utilized" is defined as follows:

(a) Loans such as those by the Export-Import Bank and the Reconstruction Finance Corporation; also, the loan to the United Kingdom-disbursed under the terms of the agreements.

(b) Credits by the Office of the Foreign Liquidation Commissioner amounts reported as actually delivered on normal sales plus the complete amount of bulk sales regardless of delivery.

(c) Settlements for lend-lease transfers-billings presented to foreign governments. Work completed, as reported to the Treasury Department, was the basis for determining utilization under the Liberian agreement.

(d) Ship sales by the Maritime Commission-principal amount of mortgages received by the Commission from foreign purchasers. The Ship Sales Act provides that vessels may be sold for 25 percent cash and the balance on credit terms. In all sales where credit is involved, mortgages are received when the ships are delivered to the purchaser.

"Repayments" are confined to repayments on principal account. They are exclusive of repayments on debts arising out of World War I.

"Outstanding indebtedness" is usually the net of utilization less repayments of principal.

International Monetary Fund and the International Bank for Reconstruction and Development

By the Bretton Woods Agreements Act, Public Law 171, Seventyninth Congress, first session, approved July 31, 1945, the United States was authorized to accept membership in the International Monetary Fund and the International Bank for Reconstruction and Development. Both of these institutions are now in operation.

The contribution of the United States to the capital of these institutions was largely made during 1946 and early 1947 in the following forms:

United States payments to the International Fund and Bank
[In millions of dollars]

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The payments to the fund covered the full amount of the United States quota. The payments to the bank covered the 20 percent of the United States subscription which was subject to call when the bank was ready to start operations. The other 80 percent of the subscription $2,540,000,000-is subject to call by the bank when and if required to meet obligations of the bank arising out of its direct issues or those guaranteed by it.

The capacity of the International Monetary Fund and the International Bank for Reconstruction and Development to assist in the task of financing the world's needs for United States dollars is restricted by the articles of agreement under which both organizations operate. These restrictions are of two types, first, actual limitations as to amounts available, and, second, qualitative requirements which must be met before currencies can be purchased from the Fund or loans can be made by the Bank.

International Monetary Fund.-The quantitative limitations on the right of member countries to acquire United States dollars from the Fund are stated in article V, section 3, of the Articles of Agreement. In general a member's aggregate purchases of currency from the fund are limited to the amount of its quota plus the amount of gold that the member has paid in. Also, members may ordinarily not borrow more than 25 percent of their quotas in any one year, unless special exception is made.

The total amount of United States dollars that the fund can furnish to all countries is limited by the amount of dollars and gold possessed by the fund. The balance sheet for June 30, 1947 showed gold holdings amounting to $1,344,000,000, and dollar deposits and dollar securities held amounting to $2,005,000,000, a total of $3,349,000,000.

The qualitative limitations on the rights of members to use the facilities of the fund are many. The principal ones are listed below:

(1) The member must be in good standing.

(2) The member must represent that the currency to be acquired is presently needed for making in that currency payments which are consistent with the fund agreement.

(3) The member must not be using the resources of the fund in a manner inconsistent with the purposes of the fund.

(4) The funds acquired may not be used to meet a large or sustained outflow of capital.

In general, the aim of these and other provisions is to limit the fund's resources to the financing of short-term balance-of-payments deficits.

The operations of the fund according to its report as of August 31, 1947, are shown below:

Currencies acquired by its members from the International Monetary Fund, as of August 31, 1947

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1 In millions of pounds sterling.

According to public releases, the following countries have acquired currency from the fund between August 31, and November 30, 1947: Chile, $7,500,000, Denmark, $3,400,000, France, $25,000,000, Mexico, $9,000,000, Netherlands, $12,000,000, Turkey, $5,000,000, and United Kingdom, $240,000,000.

International Bank.-The bank's capacity to make loans of United States dollars is limited to its holdings of dollars plus its ability to sell its obligations for dollars. As shown by its balance sheet, on September 30, 1947, its holdings of dollar deposits and securities amounted to $741,000,000. The bank had yet to make dollar disbursements of $263,000,000 on loans already authorized. In July it sold $100,000,000 of a 10-year 2-percent issue and $150,000,000 of a 25-year 3-percent issue at 100.

Qualitative restrictions on the bank's ability to lend, as stated in its second annual report (pp. 15 ff.), are:

(1) Loans may not be made for relief or for political purposes; (2) There must be reasonable prospects for repayment; and

(3) Specific projects or programs for development or reconstruction must be presented. General balance-of-payments deficits are not to be financed by the bank.

The loans authorized by the bank through November 1947 are as follows:

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1 Including $2,000,000 to be disbursed in Belgian francs.

The bank has also received loan applications from Italy, Poland, Czechoslovakia, Iran, Mexico, and Chile.

Commitments to extend aid

Commitments by the United States Government to extend aid to foreign countries, requested in item 3, are shown in the preceding tables as unutilized balances. A few other commitments which are not susceptible to statistical treatment are discussed below.

Mexico.-Under Public Law 422, Seventy-ninth Congress, Congress authorized United States Government aid to Mexico in the campaign to eradicate the foot-and-mouth disease.

In consequence, the United States Government helped to form and is supporting the Joint Mexican-United States Commission for the Eradication of Foot and Mouth Disease.

United States expenditures under this program, out of funds advanced by the Department of Agriculture, average 5 to 8 million dollars per month.

The United States Government commitment in this matter is expressed in an exchange of notes with the Government of Mexico. Panama. The following are the outstanding commitments to Panama (see exchange of notes dated May 18, 1942, executive agreement series 452):

1. The transfer to the Republic of Panama of certain railroad lots in Panama and Colon.

2. The construction at Balboa by the United States of a tunnel or bridge to allow transit under or over the Canal.

3. The removal from their present site to some other suitable site in the Republic of Panama of the terminal facilities of the Panama Railroad in Panama including the station, yards, and other appurte


4. Under paragraph 6 of point No. 5 of the above-mentioned note of May 18, 1942, the United States Government is committed to bear one-third of the current maintenance cost of the roads in Panama being used periodically or frequently by our armed forces. This commitment was made in view of wear or damage caused to such roads by movements related to defense activities.

Scientific and cultural cooperation.-The programs and projects conducted by the Department of State through the Interdepartmental Committee on Scientific and Cultural Cooperation provide for cultural, scientific, and technical cooperation and interchange with all the American Republics in accordance with the resolutions, conventions, and agreements entered into at the Inter-American Conference for the Maintenance of Peace held at Buenos Aires in 1936 and the Eighth International Conference of American States held at Lima in 1938. These programs are carried out pursuant to congressional authorization contained in Public Law 355, Seventy-sixth Congress, and Public Law 63, Seventy-sixth Congress. Inasmuch as these programs are carried out in agreement with and with financial cooperation of the government and people of the other American Republics, they are looked upon as actual and moral commitments within the limitations of the annual congressional appropriations and appropriation language.

These programs are administered by some 16 agencies of Government, including the Department of State through funds appropriated to the Department of State. None of them are direct financial-aid programs but they do constitute economic aid in the broad sense of that term. Although the program includes such varied activities as the exchange of students and professors, the establishment of cooperative agricultural field stations, the training of public administrators and public-health officers, and the translation of official United States publications into Spanish and Portuguese, they are all designed to render closer and more effective the relations between the American Republics and to foster economic and social well-being of the people of this hemisphere.

Commitments in fiscal 1948.-The Congress has made available to the Department of State a total of $4,000,000 for expenditure during the fiscal year 1948 and this total sum may be regarded, in light of the above, as a commitment to extend United States economic aid to the countries of Latin America.

United States Stabilization Fund agreements

United States Stabilization Fund now has three agreements which are still in effect, namely, agreements with Brazil, Mexico, and Cuba.

The period in which additional exchanges of cruzeiros and dollars can take place under the agreement with Brazil has now expired, but $80,000,000 of the $100,000,000 maximum provided for by the agreement was utilized before the expiration date. The agreement contains provisions for the repayment.

Several stabilization agreements with Mexico have beer made since 1936. The new and enlarged form of the agreement now in effect

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