Evening star., 1948-05-16

by tractors.
It is the institution referred to
Bank. Its name, formally, Is the
International Bank for Recon-
struction and Development.
It is one of the specialized
agencies" of the United Nations,
but its operations for all practical
purposes are independent OF the
u. N.
The bank is quartered in large
ofiice building at 1918 H street NV,
facing Pennsylvania avenue, across
a small triangular park.
1t is not many years since we
learned to differentiate between the
conferences at Dumbarton Oaks
and at Breton Woods. At the for
mer the preliminaries for perma-
nent United Nations were worked
out. At Breton Woods. N. H., the
U. N. Monetary and Financial Con-
ference was held in the summer OF
1914. Articles of agreement for the
World Bank were drawn up then.
Not a Relief Agency
The bank did not get going, how
ever until after the war. Its Board
Of Governors met for the first time
in March, 1916. in Savannah. Ga,
and elected 4 board of executive
directors. The bank then started
business in June, 1916, in Washing
ton, with Eugene Meyer Of Wash
ington as its first president. John
j. McCloy. now president, succeeded
Mr.. Meyer In February of last year.
The Board Of Governors held its
second annual meeting last Sep
tember in London and the third
will be held next September In
Washington.
The purpose of the bank is pretty
well set out in its name. 1t is not
q distributor of relief as was
UNRRA. Nor does 1t have a win
dow where a person or a country
In need of money can take col
lateral to be pledged for a loan and
60 off with the proceeds.
The bank was never intended "to
provide the external financing re-
Quired for all neritorious projects
of reconstruction and develop
ment," the institution has declared.
THE bank believes that its funds
must be used chiefly to finance pro-
grams or projects which will elm
mate bottlenecks to production"
and which will start the production
ball rolling in the expectation 1t
will develop real velocity.
The strategic use Of modest
sums" according to the bank, can
have beneficial effects out Of all
proportion to the size Of the in
vestment.
First Loan to French Group
Those modest sums" range up
to $3.50, 900 900, which does not loom
80 large when it Is considered the
bank does business not with indi-
viduals or the usual companies, but
with whole nations. While the bank
may lend to private business en-
terprises, the member government
in which the project is situated, or
its central bank, must guarantee re-
payment.
The 0,000,O 900 loan, the first
the bank made. was to the Credit
National, a semipublic French cor
poration. Made year ago, the
money is being used to modernize
Frances steel and transportation
industries and to purchase raw ma
terials.
Last August $195.O00,O00 was
loaned to the Netherlands. The
money was needed to pay for pur-
chases outside the country for the
reconstruction Of productive facili-
ties.
In the same month $4,000 ,00C
was loaned to Denmark. This was
designed to hasten Danish economic
recovery by possible imports Of ma
chinery and other products.
A third loan in August was oi
$12, 900 900 to Luxembourg. 1t was
for the purchase Of equipment fol
the steel industry and rolling stock
for the railways.
Chile Gets a Loan
Two loans totaling $4,000. .00(
were made just last month to two
government corporations of Chile
One loan of $l3,500 900 is to be usee
for hydroelectrie development. Tn,
other, for $500 900, is for the pur'
chase of agricultural machinery
Oxen will be replaced by tractors
and areas now covered by forest!
or used for pasture will be turned
into crop land.
These loans generally are for n
or 80 years and at from 81 to 81
per cent interest. In addition, th'
bank charges / per cent q year
which Is set aside in q special re-
serve fund.
| The loans indicate what the banl
does with its money. They are al
that have been made so far, bu
others are being considered.
/ Loans for the Philippines ane
Iran are being considered and In
formal discussions are under way
with Iraq. Inquiries have been mad.
by Honduras ana FL Salvador ane
informal discussions are in progres.
concerning loans to Mexico, Pert
and Bolivia. Negotiations are vel
advanced for Brazilian loan, the
amount mentioned being $4,000, 900
The banks president, Mr.. Nc
Cloy, recently made trip through
South America to discuss loan posi-.
bilities with countries there.
/ Expenditures Watched