Evening star., 1945-07-29
Vast Loans to Figure
In World Recovery PIun
Observer Sees America in Role
of International Invester.
BIZ OiDen L. Scott,

By O10en L. Scott.
| The United States Is to undertake
| large-scale program for foreign loans
| in the period just ahead. The aim will
be to lend at least $4,000, 900, 900 a year
for number of postwar years. These
loans. in turn, will help to promote ex-
| ports OF $4,000, 900 900 or more annual
ly-an export level that represents an
| other postwar aim.
President Truman, like President
| Roosevelt before him, is actively behind
the plans for foreign lending. Congress
has given its approval. 1t now has re-
| pealed the Johnson Act that barred new
| loans to nations that had defaulted on
old loans. 1t has authorized the Export
Import Bank to lend an additional
| $4,000, 900 900 in the year just ahead.
1t has approved an International Bank
for Reconstruction and Development.
with lending power of $9, 100 900 900, to
be used over period of years. 1t like
wise has approved an International
Monetary Fund, designed to bring
about stability in world currencies.
| At the same time Congress has author
ized another large lease-lend program,
with grants of dollars to former enemy
nations, such as Italy, as we'll as to
nations supplying little or no aid in
the war against Japan.
| AL of this means that the United
| States is embarked upon another effort
| to underwrite world recovery and pros
perity.
The need for this effort is apparent.
| 1t grows from the fact that the world,
| for six years, has been engaged in the
| greatest orgy of destruction in history.
Much of the productive capacity OF
Europe has been destroyed or seriously
impaired. Even with outside aid Russia
will require about five years to restore
the low living standard that her people
enjoyed before the war. The highly
! developed German industries are
shambles. France is having difficulty
in her effort to get back to work. So is
Italy. The industry of Japan. in the
Far East, is being destroyed.
Of all industrial nations, only the
| United States is in position to give
immediate large-scale help in the task
| of rebuilding the worlds industry either
in its old location or in new location.
Great Britain has a rebuilding job of
her own and Is not equipped to supply
capital goods on the scale that will be
required If the world is to get going
again in any reasonable length of time.
No other nation is in position TO give
significant aid.
The result of this situation Is that
the United States is about to embark
on a very large venture into foreign
trade It will enter on this venture
| both in the hope of profit and in the
hope of restoring the world to some
thing that can approach normal. The
| alternative is a period of chaos in Eu-
rope and possibly in the Far East that
would lead to revolution and to con-
struction of more Socialistic economies
based upon the land and labor and
other resources of the individual ma
| tions. A development of that kind
| would mean return to the kind OF ma
! tionalism that the latest wars were to
destroy.
The lending program, as now outlined
| by top policy making officials, is sched-
uled to run for at least five years, with
a level of loans of at least So 600, 100000
year.
Russia is scheduled to receive the larg-
est loans. She is down for 81 900, 600, 900
out of the $4,000 100000 of increased
Export-Import Bank lending power,
Russia also is to receive 81 000, 900 900 of
/ lease-lend in the year ahead, although
/ she is not now helping this country di-
rectly in it's war with Japan. Russia, too,
will draw heavily on the new Interna-
| tional Bank when it is set up and she
will be permitted to oyerdraw her ac-
count in the coming international Mon
etary Fund by as much as 81 100000 900
/ Russian credit needs are vast and there
| is real question concerning her ability
to repay, unless it is to be in gold or
raw materials that are competitive with
materials that the United States and
Latin America have in surplus.
| Poland is to get some rather large
! lOdllS. L dAISC dl4o oClS4AAiA WALL NC AAA CA4C
market for credits. So will Italy. Great
Britain eventually may need dollar cred
| its, but she intends to avoid asking for
| them just as long as possible. Latin
| America is down for only 5000 ,000, 900 in
new credits in the year just ahead, but
Latin American nations have built up
| large dollar supplies during the war
| that they can use in purchases. China
will want larger credits, but is likely to
have her borrowing restricted to between
$3.50, 900 900 and $500 900 900 year
There is a fair chance that this latest
American venture into foreign finance
| may end more happily than the first
venture after the last war. The reason
| Is that this time the loans will be long
term loans, running from 30 to so years,
on the basis of present plans, and it is
stated to be official policy that the
| United States will not look for repay
ment of principal amounts of loans but
will be content with interest and divi-
| dends on loans. That simplif1es the prob
lem of exchange on which the loans Of
| World War I broke down. but it does
not assure full payment of all money
loaned.
Actually the test of this whole policy
as with other policies pointed toward
world cooperation will come during
the period of postwar depression, when
ever that occurs. 1t is then that the
world might find trouble covering pay
ments called for in service on loans and
| the United States then may be much