Evening star., 1939-03-05

Out of the new lease on life given to
the Export-Import Bank, quiet little
institution occupying few rented rooms
in an office building on Seventeenth
street. may come new style of dollar
diplomacy. With this $4,000 900 insti-
tuition as its instrument, the United
States now is in a position to pursue
some Latin American penetration on its
own, parrying the European totalitarian
propaganda with American democratic
credit.
The signs point to good nelghbor
policy" executed with deeds instead of
the words which have flown from the
White House and the State Department
in the millions since 1888 The acuteness
of the problem raised for the United
States by Germany's interest in South
America has been brought sharply to
Washingtons attention by the visit here
of Oswaldo Aranha, the Brazilian for
eign minister. The subtleties of credit
can offset some of the effectiveness of
the Nazi transoceanic putsch.
The new dollar diplomacy is more of
defensive agent than its forbear of the
early goth century. 1t is a preserva-
tive If not for democracy, at least for
the democratic idea. The democratic
Idea is familiar in South America, where
1t has been introduced in recent years
to the European Fascist idea.
Was Forgotten Child.
In Its youth the Export Import Bank
was the forgotten child of Russian rec
ognition. When the Roosevelt admin
istration decided five years ago that
the Soviet government deserved a dlplo-
matte relationship with the United
States, the bank was set up to facili-
tate trade between the two countries.
The bank was never used in its Russian
connection.
The idea of the bank so appealed to
the administration. however, that a
second Export-Import Bank was set up
In 1884 to assist Cuba. 1t bought silver
in this country, minted it into Cuban
pesos and shipped the coins to Cuba,
receiving dollars in payment. Both the
first and second banks co-operated in
this undertaking to the tune of 500
100000. The second bank was liqui.
dated, and the first bank went its silent
way, operating with only occasional pub
licity.
The bank is a subsidiary of the Recon-
struction Finance Corp, with board of
trustees representative also of the State,
Treasury and Commerce Departments.
Its obvious commercial function is to pu.
credits at the disposal of American ex-
porters to- facilitate American sales
abroad. Its nicer political possibilities
arise from the fact that its credits can
be aimed toward promoting trade with
certain countries. Present expectations
of q widened interest in South America
are based on the proposal that the bank
act with greater vigor than it has in the
past.
Congressional Suspicion Aroused.
There was congressional suspicion that
international politics was being played
in dangerous spot when the Export
Import Bank gave s25 100000 credit for
shipments of trucks to China. The insti-
tuition which would have died June so
Of this year now goes on until January
IS, 1941, five days before the next presi-
suit of congressional approval.
1T has never been for moment con-
templated," Representative Steagali OF
Alabama said in defending the admins
tration from the charge that the bank
was helping the Chinese in their battle
with Japan, that any sale of any type
would be financed by the Export Import
Bank for war purposes"
But If the Chinese deal had no bel
Hgerent motive, it at least shows the in
tricaces Of the sort of financing which
the bank carries on. The bank made
e25,000,000 commitment to the Universal
Trading CO. in New York City, Chi
nese-owned organization. The credits
were to be guaranteed by the Bank of
China, half owned by the Chinese gov
ernment.
So far the Chinese borrowers have not
availed themselves of this commitment.
That is frequent procedure, because of
18l loans made by the bank in its his
tory, SO of them have not been used. The
bank has made total commitments of
$210,613, $3.50, of which s92 ,2O4 TAO was cam
celed by prospective borrowers who could
not complete the transaction for which
they were borrowing or who found they
could get their credits elsewhere salts
factorily.
Bank Disburses S63618,965.
The bank has disbursed $63,61S,e65.
Repayments amount to $36297, SAT.
Until Congress gave the bank the green
light fortnight ago, the institution had
been giving credits for sales to variety
Of countries, Iran as we'll as Brazil, Den
mark as we'll as Venezuela. But the
chief force behind the extension was
hope for business in South America, not
business for business sake, particularly,
but business for the sake of keeping
South American thoughts turned toward
us.
Due to superior credit terms and
subsidies given by other countries Sem
ator Wagner of New York said during
debate on the Export Import Bank ex-
tension bill, I'VE are now in very seri-
Gus situation in the South American
market
1.-THE Foreign Minister of Brazil stated
the other day that Brazil was very
friendly to the United States and would
prefer to hrv Anoericop commodities