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Report of House Committee
The House Banking and Currency Committee on July • 12, 1 1 - 1 b y a vcrte
of 18 to 2 reported out HfR. '3771 # a. bill "to provide for increasing the lending authority of the Export*Import Bank of Washington and for other purposes.ft
This bill differs somewhat from that introduced by Chairman Spencet
Summary of H,R. 3771
This bill provides for the continuation of -the Export-Import Bank as
an independent agency of the United States Government with the power to make
loans and guarantee obligations for the purpose of financing the foreign trade
of the United States. Tho aggregate amount of loans and guaranties of the* .Bank
is limited by the bill to $3*5 billion outstanding at any one time. The bill
provides that tho Bank should not compete with but should encourage private
capital and that tho Bank's loans should generally be for specific purposes
and should offer reasonable assurance of repayment. According to the bill the
management of the Bank-will be vested in a Board of Directors consisting of
the Foreign Economic Administrator as chairman, the Secretary of State and
three other full-time members appointed for five-year terms .by the President
of the United States and confirmed by the Senate. If the Foreign Economic
Administration should.go out of existence, tho. Prssident shall appoint another
member of the Board with tho advice and consent of the Senate and shall select
the chairman of the Board• This Board will be non-partisan with not more than
three members from any one party. In addition,, the bill provides for an advisory board similar in membership to the National Advisory Council proposed
j n the Bretton Wopds legislation to advise and make recommendations to tho
Boardf The advisory board shall consist of the Chairman o * the Export-Import
Bank (presumably the Chairman of the Board of Directors), who shali a6t as
chairman of the board, the Secretary of State, Secretary offcl>e.Treasury,
Secretary of Commerce, and Chairman of the. Board of Governors'of the Federal
Reserve System. According to the bill, the capital stock of the Bank of #1 billion shall be subscribed by the United States through the Treasury. All common
and proferred stock of tho Bank now outstanding will be cancelled. In addition,
tho Bank is authorized -to issue .obligations not to exceed two and one-half
times the capital stock of tho Bank for purchase by the Treasury. The Secretary
of the Treasury is authorized and directed to purchase such obligations which
shall have maturities and rates of interest to be .determined in agreement with
the Treasury. The bill provides tl>at the Bank make semi-annual reports to
Congress. Finally, the prohibition on loans by the Bunk to countries in default
on their obligations to the United States Government on April 13, 193U* is romovod and private capital is authorized to participate in any loans of the Bank.
This bill as reported out by the Committee differs in certain respects
from tho Spence bill* It provides for changes it the»which are s r i ;j
lar to those proposed in tho Wolcott bill* According to the latter, all five
members of tho Board of Directors of tho Bank-would bo full-time -directors
appointed by tho President of the United States and confirmed by tho Senate
and no more than three could be members of one party. There was no reference

- 2 in either the Spence or Wolcott bills to:an advisory -board * The Bank is set
up as an independent agency of the government contrary to the proposal of Mr,
Crowley that the Foreign Economic Administrator have'supervisory powers over
the Bank similar to those exercised by the Federal Loa&.A(toinistrator over
the Reconstruction Finance Corporation* Unlike the Spence and Wolcott bills,
the present'bill places no limit on the life of the Bank but merely provides
for its continuation as an agency of the'United States Government. The
present bill does not provide for the repeal of the Johnson Act as did the
Spence bill* but like the Wolcott bill" "removes tho prohibition on loans by
the Bank to countries in default on thoir obligations to the United States
and authorizes private capital to participate in any loan of the Bank*
Dobato in the House on H*R* 3771
In the debate in the Committee of the Whole House on July 13, 19h5f
Rep* Sponce (D* Ky*) explained the provisions of the bill and stressed the
necessity for the passage of the bill in order that the Bank may be in a position to make rehabilitation loans to war-devastated countries in tho period
prior to tho commencement of operations by the International Bank* He
mentioned that hearings on tho bill had been brief because there was no opposition to it and also pointed out that the endorsement of the bill by the
American Bankers Association indicated private capital did not fear competition from the Bank*
Rep. Buffett (R. Nebrf) opposed the bill on the ground that a loan
by the Bank to a foreign government leads to the acquisition of a vested
interest in the internal politioal affairs of the borrower and that such economic penetration leads to war* He felt that the United States public was
going to be taxed to finance exports which will create ill will abroad for the
purpose of increasing the commercial profits of this country. In his opinion,
increasing tho lending authority of the Bank by $2.8 billion will contribute
to inflationary tendencies in this country if domestic production does not
increase. In ROJD* Buffettfs opinion tho support of the bill by the American
Bankers Association was logical since it gives private capital a chance to
make earnings without risk of loss* Because of the size of gold and dollar
balances of Latin American and some other countries, Rep* Buffett felt that
these countries did not neod loans from the United States in prder to finance
purchases in this market* He thought Poland, Czechoslovakia, Greece and
Yugoslavia might require supplemental aid to that provided by UHRRA*
Rep. Brown (D* Ga*) described the past pperations of the Bank, the
present form of organization and management, and the changes proposed by the
bill* He pointed out the need for the Bank to act as a stop-gap after tho
cessation of Lend-Loase and until the International Bank gets into operation*
*Rep. Crawford (R. Mich*) also supported the bill on tho ground that loans by
the Bank will bo necpssary in the transition period*
Rep* Sumner\(R. Ill*) opposed the bill on numerous grounds and felt
that thb'Cottimittee^ investigation of "the.'Bank and its( operations had been inadequate* Shb stdted'that in'her opinion'and that of the President of the
American Bankers Association tho Bank might- guarantee loans amounting to many
times its capital by establishing a guaranty fund for this purpose* (As indicated in our summary of the hearings, this statement of Mr* Burgess1 views

-3 is not correct*) Rep* Monroney (D* Okla*) pointed out the limitation of $3«5
billion in the bill on the total amount of the Bank's loans and guaranties •
Rep* Crawford pointed out that Mr* Crowley, Foreign Economic Administrator,
had stated the $2,8 billion increase in the Bankfs lending authority would
probably suffice for only the present fiscal year* Rep* Sumner then stated
that the most vicious part of the bill was the fact that it contained the
"essence of communism*"
Rep* Wolcott (R* Mich*) approved the bill under discussion which he
explained was the result of Committee changes, because it set the Export-Import
Bank up as an independent agency* He also said the Bank has done a good job
and that credits must be made available to foreign countries to finance purchases of United States goods if this country is to achieve full employment*
He stated that the bill had been considered by tho Treasury Department, State
Department, Foreign Economic Administration, Federal Reserve Board and other
government agencies•
An amendment was then offered by Rep. Dirksen (R. Ill*) which would
prohibit loans by the Bank to countries which tho President of the United
States considered had violated the first three principles of the Atlantic
Charter* Rep* Spenco opposed the amendment on tho grounds that it would be
impossible to administer, that tho amendment did not sot forth definite standards to govern loans, and that the presence of tho Secretary of State on tho
Bankfs Board of Directors was adequate assurance that loans would conform to
United States foreign policy* Rep* Monroney, Rep* Folgor (D* N.C 9 ) f Rep* Hays
(D* Ark*), Rop* Brown, Rep* Wolcott, and Rep. Thorn (D« Ohio) opposed- the amend*l o f while Rep* Stunner and Rep. Bufferkt supported it* The amendment was deunc
feated by a vote of 93 to 9*
The Export-Import Bank bill without amendments was then voted upon
and passed, 102 to 6,

Board of Governors
of tho Federal Reserve System
Division of Research and Statistics
July 16, 19li5