The Birmingham age-herald., 1919-03-26
B|LL|ON-DOLLAR
 TRADE FUND SOON
 ID BE AVAILABLE
Regulations to Provide for Lending Huge Sums for Maximum of , Years on
 Adequate Collateral
By Associated Prsss

By Associated Prsn
 Washington, March 25-The gov-
 ernment's biIIion-dolIar fund for
 ffnancInp foreign trade soon will
 be opened to American exporters
 through loans from the war ff-
 nance corporntion. s.s
 Regulations are now being prepared by the corporation to cover advances will provide for the leading of sums up to s50, 900 to any individual firm. corporation or export association, probably at 5& per cent, for maxi mum of five years. on adequate col lateral
 The nature of this collateral secur- ity to be accepted remains to be work ed out by the corporation. but indi- cations are that paper representing; merchandise engaged in the export process will be acceptable. Collateral to the extent of 125 per cent of the loan probably will be required, and loans will be made either direct to the exporters or through banks. Scores of informal applications for information or for advances have been received from individual exporting firms or representatives of the export associa tions being organized under the Webb act, the war finance corporation reported today. Preparations for making the loans will be rushed. in spite of the enormous burden thrown on the corporation by the necessity of making large advances to railroad companies.
 Reports indicate the exporters are planning to make extensive use Of the governments foreign trade fund as soon as the regulations are completed and the corporati h' is ready to ac- cept formal applications.
 THREE PRINCIPAL INFLUENCES This is caused by three principal in- | fluences 1 ]. European countries which will need great quantities of American materials | during the next year or two for re- | construction and to make up for lack of constructive enterprises in the war,
 have neither the gold nor the credits to pay for their purchases in this country
 and their inability will be increased when
 the United States government stops mak- 1 ing loans to the allies at the end of the 1 war.
 2 Foreign exchange rates, following re- moval of artificial government influ- i ences by Great Britain. France, Italy and the United States last week. have produced situation in which American
 goods would cost foreign purcha sers much | more than their value in dollars at this time if purchasers were forced to pay
 cash. As a result, American exporters must sell on credit if they are to sell 1 iii the quantities needed abroad, and the war finance corporations fund will pro vide a means -of pooling these export CT edits under government supervision. | 8 American banks have not been ac- customed to financing export transac- tions, and cannot legally advance as large sums as may be needed to finance largo export operations. Nor can they ordinarily make advances for more than
 20 days. whereas for most foreign trade transactions 2 year or IS months are l needed on credits
 It is the last condition which has driv- 1 en export organizations to the war l finance corporation. since the law pro- vides that the corporation may make loans direct to exporters only if loans l car not be obtained through regular banking channels at reasonable terms. ! They have told that means probably can be worked out by which they can
 obtain advances from an American bank which in turn can transfer the loan to the corporation. The corporation cannot I lend directly to a foreign business in | terest, however.
 1 The ratc of interes. to be charged is determined largely by the legal provi sion that it must be at least l per cen,
 more than the prevailing discount rate l or 9o-day commercial paper at present 1 4% per cent. This would make the mini 1 mum rate of the corporation 5s4 per cent. Fifty million dollars is the maximum
 which the corporation may advance to anv single, business organization. l Eighty export organizations consisting g of groups of manufacturers. have noti- fled the federal trade commission of their intention to operate under provisions Of 1 the Webb act I Among the principal commodities rep
 re sented in the export associations all 1 ready developing are:
 ! steel, copper, lumber of various kinds, textiles automobiles, machinery of va ried styles, raw cotton, sugar, mag resia, raper, tanning materials, phos- phatc oil and munitions. One associa- ton would limit it's foreign trade to 1 clothes pins.