Evening star., 1944-10-15
Leuse-Lend Problems
Looming High Ahead
Writer Tells Relation of Trade
and Debt Repayment
Bu Otuen Z. Scott

By Otpen L. Scott
Lease lend is beginning to give this
Government . worry of q new kind.
That worry grows from the economic
Jolt to be felt II lease lend suddenly Is
terminated when war ends.
At bottom, lease lend is simply q
means of financing American exports.
BY giving goods without particular re-i
gard to specific methods Of repayment.
lease lending AVOIDS all of the embarrass-
Ing problems OF exchange. The result
Is that In 1914 the United States is go-
ing to export about $4,000, 900 900
| worth Of goods. That is about three
times the record total Of prewar ex-
| ports.
If those lease lend billions In trade
suddenly ended, there would be real
shock to be added to other shocks that
! are to be felt in the rehabilitation Pc
riod. Consequently, officials are busy
now trying to find a formula by which
United States exports can continue to
be financed after the war. They are
concluding that it is going to be neces-
sary for this country to lend abroad
between 5000, 900 900 and $4,000, ,ooo,-
600 year for period of years, If ex-
| ports are to be held anywhere near
their lease-lend level. That would be
| more than five times the volume of for
| eign loans in the 1920s.
| There are two catches in a program
Of that kind:
| First, it Is doubtful if Congress or the
country would accept program of for
eign lending on that scale in the light
OF the record Of repayment of loans in
the past
| Second, 1t Is even more doubtful il
foreign nations would be willing to bor-
row on that scale If they felt that the
United States was serious in expecting
the goods exported actually to be paid
for. This country, in the past, never
has accepted as much as s., 1000 ,00o, 600
IN imports of goods and services.
1
| Yet, definite plans for large foreign
loans are taking shape These plans
are related to the central idea that the
United States in postwar must under
take to set the world up in business
| again, not only for the sake of the
rest OF the world but for the sake of
employment in this country as well.
The machinery for financing exports.
as now shaping up In the plans, in
wolves the following:
| Lease lend, first Of all, is to be turned
| into piece of financing machinery.
| Under section &c of the present lease
| lend law, contracts can be made up to
July /, 1915, with nations entitled to
lease lend, calling for sale of goods on
credit for delivery up to July /, 1913.
| Under this provision, negotiations for
large sales of goods to Russia, France
and some other nations now are under
way. Great Britain, however, is wary
Of assuming new debts.
| Next, there is the proposed interna-
ttonal bank for reconstruction and
development which the next Congress
will be asked to approve Through this
world bank, on which technicians of
more than 80 countries are agreed,
the way would be opened for about
| 5000 100000 of loans by the United
| States.
| Finally, the White House is pre-
pared to recommend that this country's
Export-Import Bank, which under
writes private loans abroad, be broad
ened In scope and authority, with its
capital much increased. This bank
could be used on a broad scale If the
United States decides that it wants to
become the great new world banker,
1t appears from this that the ma
chinery for financial postwar exports
on large scale now Is all set or soon
can be set. The difficulty is, however.
that there is no comparable machinery
at hand or under study that would serve
to assure a comparable volume of i'm
ports and to provide for distribution of
those imports of foreign goods if they
should be received.
Great Britain was able to serve as a
world banker for so long because shs
was willing to sacrifice her agricultRs
and because she was in an ideal posi-
ton to import raw materials from
abroad and to process those materials
for resale. This country. on the other
hand, has an embarrassing abundance
OF foods and raw materials and will find
1t impossible politically to destroy Amer
ican agriculture and mining In order to
accept foreign-grown foods and foreign
raw materials.
Yet, If huge exports are to be paid for,
| 11u I1y0o i,,,y. t-
Otherwise the exports will represent q
gift of American materials and Ameri-
can labor to strengthen other nations,
That gift may be justified both on the
basis Of altruism and as form of pump
| priming to assure jobs at home, but 1t
may not be popular politically when
understood. If exports are to be held
around $4,000, ,ooo, 900 level, then I'm
ports of more than $4,000 900 900 in
goods and services are required even-
tually, If the exports are to be paid for
with interest on loans used to finance
them.
The fact is that Government advisers
with no particular ak to grind estimate
that this country after the war will be
lucky to find markets, even with loans
freely made, that amount to more than
$1,000, 100000 year, If that. All over
the world, big and small nations are
striving for self-sufhciency or for trade
arrangements with other nations that
permit balancing of trade on a bilateral
basis. Russia, France, Great Britain
British dominions and many Latin
American nations are in this group.