The sun., 1919-03-26
u. S. FOREIGN TRADE
FUND OPENS SOON
War Corporation Prepares to
Lend Amounts Up to
$5O,OOO,OOO.
COLLATERAL TERMS SET
Exporters Planning to Make
Extensive Use of Govern
ment's Offer.

WARRINGTON, March 25.-The Gov
ernment's billion dollar fund for imam
cling foreign trade will be opened soon
to American exporters through loans
from the War Finance Corporation.
Regulations now being prepared by the
corporation to cover advances will pro-
vide for the lending Of sums up to $780,
100000 to any individual firm. corpora
| ton or export association, probably at
So per cent. for a maximum OF hve
years, on adequate collateral.
The nature of this collateral security
to be accepted remains to be worked
out by the corporation. but indications
nre that paper representing merchan-
disc engaged in the export process Will
be acceptable. Collateral to the extent
OF 1875 per cent. Of the loan will prob
ably be required and loans will be
made either direct to tho exporters or
through banks.
Scores Of Informal applications for in
formation or for advances have been
received from individual exporting firms
or representatives OF the export asso-
Citations being organized under the Webb
act, the War Finance Corporation re-
the loans will be rushed, in spite OF the
enormous burden thrown upon the cor
poration through the necessity OF max
ing large advances to the railroads.
Reports indicate exporters are PLAN
ming to make extensive use OF the Gov
ernments foreign trade fund as soon
as the regulations are completed and
the corporation is ready to accept for
NAL applications.
This is caused by three principal in
huencee.
First-European countries which
will need great quantities Of Ameri-
can materials during the next year
or two for reconstruction and to make
UP for lack of constructive enter
prises in the war have neither the
gold not the credits to pay for their
purchases IN this country. and their
inability will be Increased when at
the end of the war the United States
Government stops making loans to
the Allies.
Second-F'oreign exchange rates.
following removal of artificial Gov
ernmental influences by Great. Brita-
ain, France, Italy and the United
States last week, have produced
situation in which American goods
would cost foreign purchasers much
more than their value in dollars at
this time II purchases were forced to
pay cash. As result American ex-
porters must sell on credit IL they
, are to sell in the quantities needed
abroad, and the War Finance Cor
poration's fund will provide a means
! Of pooling these exports credits I'M
der Government supervision.
Third-American banks have not
been accustomed to financing export
transactions and cannot legally .ad-
vance as large sums as may be needed
TO finance large exports operations.
Nor can they ordinarily make ad-
vances for more than ninety days.
whereas for most foreign trade trans
actions year or eighteen months
are needed on credits.
Direct Loan Plan.
1t Is the last condition which has
driven export organizations to the War
Finance Corporation. since the law pro-
vldes that the corporation may make a
loan direct to exporters only il loans
cannot be obtained through regular
banking channels at reasonable terms
Foreign exporters doing business in
the United States also have undertaken
INFORMAL negotiations with the corpora
ton to ascertain whether they may
share in the Governments credit ar
engagements They have been told that
means probably can he 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 lend directly TO a
foreign business interest. however.
The rate of interest to be charged is
determined largely by the legal provi-
sion that it must be at least per cent
more than the prevailing discount rate
on ninety day commercial paper, at
present "a. per cent. This would make
the minimum rate OF the corporation
5% per cent. Fifty million dollars Is
the maximum which the corporation may
advance TO any single business organiza-
ton.
Eighty export organizations. consist
ing OF groups OF manufa cturers, have
notified the Federal Trade Commission
OF their intention to operate under pro-
visions OF the Webb act
Among the principal commodities rep
resented in the export associa atoms al
ready developing are steel. copper.
lumber OF various kinds textiles, auto
mobiles. machinery OF varied styles. raw
cotton, sugar. magnesia. paper. tanning
materials, phosphate. oil and munitions.
One association would limit it's foreign
| trade to clothes pins.