Diario las Américas Newspaper, May 9, 1954, Page 12

THE AMERICAS DAILY Miami, Fla., Sunday, May 9, 1954. Published by THE AMEMICAS PUBLISHING COMPANY G A. SAN ROMAN way S. SMITH President + Vice President HORACIO AGUIRRE Fditor and Manager FRANCISCO AGUIRRE Vice President and Publisher Carlos E. Simons Managing Editor William H. Scharrer Ralph B. Ross Head of Circulation Dept. Head of Advertising Dept. FOR SUBSCRIPTIONS IN WASHINGTON DC. CALL THE AMERICAS DAILY OFFICE. Phone RE-7-7415 Suite 910, 1001 Connecticut Ave. Washington & DC. Advertising Department for the United Press and Editor Press services. Powers Inc. Wnited States and foreign countries c/o Joshua B. SUBSCRIPTIONS, by ordinary mail $12.00 per year. For six monctns $6.00; three months $3.90.’ By air mail in the United States, Mexico and Canada, additional $3.60 a monih. Regular issue 5 cents. Sunday issue 10 cents. 4349-36th St, Miami Springs, Fla. Phone 88-7521 2 MIAMI, FLA., SUNDAY, MAY 9, 1954. MOTHER'S DAY In a touching demonstration of affection and recognition, the people of the United States devote this day every year to honoring the nation’s mothers -those mothers whom we all revere so deeply because it is they who give us life, they who guide our path toward adulthood and they who afford us their boundless love. When we pay homage to the mothers of our eountry, we do so for some very sound reasons. Every day, in fact, we receive constant proof of the sincerity of maternal love, something which God has bestowed upon mankind as a symbol of light and hope for its daily living. As is everything which is connected with the idea of the home and the family, today’s celebration is one that is essentially spiritual in nature. One-of the major ends of Mother’s Day should be the instilling in all children of a sense of thankf- ulness toward their mothers and a growing realizat- ion with the passage of time and an increase in knowledge that love for one’s mother is something that should first of all have arisen spontaneously from the heart and that should be a feeling which expands and flourishes as we are better able to comprehend the significance for us of those wond- erful beings we call our mothers. The more we dwell upon that meaning, the more we should realize that we can never repay all the care and sacrifice which our mothers have undergone in order to guarantee us our happiness and our welfare. As in other lands on other days, the United States is today rendering public tribute to its mothers despite our current preoccupation with the complexities of modern life, including its worries and turmoil. Each of us has been provided with the opportunity to meditate on the significance of this day and do our bit to make it more meaningful. Those of us who are fortunate enough to have our mothers still with us can mark today with red carnations in our lapel and we can send some gift or telephone or wire a message to symbolize our heart: felt sentiments; while those others of us who have had the misfortune to lose our dear ones must wear a white carnation to signify our loss and we must remain content with a prayer to God to give haven to that blessed soul who carried her children in her heart before all else. We join today with all Americans in their celebration of Mother’s Day by rendering tribute to ‘the nation’s mothers wherever they may be in this vast land, with full recognition of the intrinsic value of this date in all that it implies. SUBSCRIBE TO THE AMERICAS DAILY WHAT THE EXPORT-IMPORT BANK MEANS TO HISPANIC AMERICA Believing that our readers will find it of interest to them, we are reprinting below a speech recently delivered in New York by Lynn U Stambaugh, assistant manager of the Export-Import Bank with the purposes of the famous Washington banking institution, its operat- ing methods and its significance for the Latin American nations as a whole The speech deals I am convinced that a discussion of the operations of the Ex- port-Import Bank, past, present and future, would be far too long and much too boring to retain your interest, You are already well acquainted with the Bank’s past operations, you do not like its present operations, or the lack thereof, so I propose to skip over the past and present and talk about the Bank’s future operations, This is a sufficiently comprehen- sive subject and its discussion entails just enough mystery to make it interesting, After all I suspect that it is about the future operations of the Bank that you really wish to hear. To carry out its statutory function of aiding in financing and facilitating the foreign trade of the United States, the Bank has $1.3 billion in unused lending authority, in addition to $500 million yet to be disturbed under existing credits. Furthermore, collections during the calendar year 1954 will total $400 million and assuming new lending at the same rate as in the past they should equal at least that amount each year in the future operations of the Bank certainly lack of funds would not appear to be one of them. I realize, however, that it is dangerous to make predictions or te anticipate under what circumstances the Bank will be compelled to perform its funetions in the future. STAMBAUGH Others factors have, of course, limited the Bank’s operations in the past and will do so in the future but it has always been able to rapidly adjust its operations te meet changing conditions. At the present time one such adjustment is taking place. The Bank has always had the authority to sell and guarantee securities. This method of obtaining funds to lend in furtherance of its statutory purpose has not been used heretofore because the Treasury Depart- ment frowned upon it. Funds so obtained cost more in interest than direct borrowing by the Treasury. Also, it has been considered advisable to leave the Government’s borrowing exclusively in the Treasury’s hands. On the other hand, money borrowed from the Treasury is a charge upon the cash budget and is taken into account in measuring our proximity to the debt ceiling. Therefore, on ac- count of current budgetary and debt problems the Treasury prefers that for the present at least the Bank shall obtain funds for lend- ing from private sources. This we are proceeding to do by use of the authority to sell and guarantee securities. We have, for instance, recently guaranteed a $60 million loan by private banks to finance the sale of cotton to Japan and a $16 million loan to finance the sale by United States suppliers of the machinery and equipment required for a pulp and paper plant in New Zealand. As was antici- pated, this method of obtaining funds is proving costly and for that reason in all probability will not be followed for too long or used too extensively. The area of greatest uncertainty regarding the Bank’s future operations has to do with the type of loans. This uncertainty arose during the period when the Bank’s operations were under study in light of the debt and budgetary policies of the new Administration and took the form of speculation that the Bank would not make any mere development loans. Most of the confusion has been caused by a misconception of what has been entailed in development loans made by the Bank in the past, Therefore, in the interest of a more accurate understanding of the Bank’s future operations it is neces- sary to take a brief look at the past. If we will all use the same definition of a development loan, there will be less confusion and a better understanding of what this type of loan by the Bank entails. A development loan in the concept of the Export-Import Bank is a credit which finances the sale abroad of the United States manufactured machinery and equipment and the services of United States technicians involved in constructing and placing into operation permanent projects and enterprises of continuing worth. Those who speculate that the Export-Import Bank is out of the development loan business appear to be laboring under the mistaken idea that a development loan is some sort of general purpose loan with no control over or restriction upon the end use of the funds. Let me emphasize that excepting in very minor and fully justi- fied instances, the Bank does not finance costs incurred or that should be incurred in local currency nor does the Bank finance off- shore purchases. Every dollar disbursed by the Export-Import Bank has aided in financing and has facilitated the exports and imports of the United States in conformity with the Bank’s Congressional charter. The simple truth is that a development loan accomplishes the same purpose as an exporter credit and in addition accomplishes broader and more far reaching results. Whereas, an exporter credit finances a one-shot sale the beneficial effects of a development loan upon United States foreign trade are manifold and cumulative. The initial effect, of course, is the assistance given to the sale of a wide range of purchases from the United States as distinguished from a single purchase in the case of an exporter credit. Next we have the plant or factory in operation increasing the productive capacity of the country of its situs adding to the standard of living of the people of that country and, most important to American industry, adding to their purchasing power and thereby developing a better market for United States goods. The Export-Import Bank strives to confine its development loans to the financing of projects which will enable the country of the borrower to either earn more United States dollars or to save dollars currently being expended for essential imports. The ap- plication of this principle results not only in greater assurance of the borrower's ability to repay in dollars but also by increasing the country’s dollar earnings makes the citizens of that country Potential customers for a greater variety of American goods. Throughout the history of the Export-Import Bank it has frequently been demonstrated, just as it was demonstrated in the United States during our period of development, that the establish- ment of a new, permanent, productive enterprise abroad engenders many related enterprises, each of which makes its own contribution to the improvement of the country’s economy, The case of the Brazil steel mill at Volta Redonda is one point. Commencing in 1940, the Export-Import Bank has assisted in financing the export of the machinery, equipment and services that went into the con- struction of this fine enterprise. The plant was oponed in 1946, By 1950, the date of our most recent statistics, 28 new plants designed to operate with steel produced by Volta Redonda have been estab- lished and 56 existing plants had been expanded. All this by private investors. This modern drama of progress has been repeated in Practically every place in the world where the seed of Export- Import Bank development loans has been planted, Most impressive is the fact that by 1951 exports of steel from the United States to Brazil had increased in volume by more than one third. It is also worthy of note that Volta Redonda purchases from the United States materials and spare parts totaling $12,500 each year, This is a striking demonstration of the fact that the better developed countries are our best customers, In addition to machinery and equipment, Export-Import Bank development loans have played an important part in introducing United States engineering and contracting firms and their tech- nical skills into the less developed areas of the world. Once having successfully demonstrated their worth in the performance of a contract financed by the Export-Import Bank, many American firms have been re-employed again and again for the carrying out of other projects, even where Export-Import Bank financing is not involved. Through the transfer of their know-how to the nationals of other countries and the training of technicians, they have im- proved the climate of those countries for the investment of Amer- ican capital N Ai bt otha a The export of American technical skills in this fashion also creates a preference for American equipment. The foreign nationals who are trained to replace the American technicians become accus- tomed to the United States equipment and when additional equip- ment is needed they naturally prefer the type which they have learned to operate. No discussion of development loans would be complete with- out considering the part that they play in advancing the political interest of the United States as distinguished from our foreign trade objectives. A well constructed industrial or utility project operating successfully and thereby contributing significantly to the improvement of the economy of the country and its situs stands as a constant reminder of the friendly aid given through Export- Import Bank financing and American engineering and mechanical skill, Nothing could conceivably contribute more toward cement- ing good will between the two nations. It is in the field of develop- ment loans that the Export-Import Bank has served best as an instrument of the foreign policy of the United States. With this explanation of Export-Import Bank development loans and their effect upon the foreign trade of the United States and upon our relations with friendly countries abroad, I advert to the question stated earlier. Is the Export-Import Bank to cease making development loans as it defines them? That is, is thé Bank to cease financing the sale of United States manufactured machinery and equipment for construction of an installation in development projects abroad? This is a rather serious question because this type of export constitutes a large segment of our foreign trade, This production keeps millions of Americans employed. During its 20 years in business the Bank has financed something over $2 bil- lion of such exports, about one-half of its total business. There have been some recent authoritative pronouncements that have a bearing upon this question. Taking them up in their chronological order, Dr. Milton Eisenhower stated in his report to the President on November 8, 1953 as follows: “It is generally agreed that the International Bank for Reconstruction and Develop- ment should have the principal responsibility for making develop- ment loans, as compared with the shorter-range lending operation of the Export-Import Bank. However, it seems essential. that the United States maintain a national lending institution to make sound development loans which are in our national interest, but which might not be made by an international agency.” This report was made upon the basis of a trip made by Dr. Eisenhower and a group from various departments of the Government throughout Latin America, The basic recommendation was for increasing our trade and strengthening our economic relations with our neighbors te the South. Next im chronological order I refer you to the report to the President, to the Senate and to the House of Representatives made by the Commission on Foreign Economic Policy headed by Mr. Clarence B. Randall. This report recognizes the Export-Import Bank as essentially an instrument of United States foreign policy, and makes the following statement concerning the role of the Bank: “United States investment abroad, public and private, provides additional market for United States exports. The financing of exports by public loans has been, and can be, helpful not only in maintaining domestic production and employment when domes- tie demand falls off, but also in assisting foreign countries in procur- ing the United States goods necessary to their growth. The financ- ing of exports by short-term loans from the Export-Import Bank may provide a stimulus te exports. Long-term loans for carefully selected development projects not only will increase United States exports, but are also likely to create a better international balance by assisting foreign countries in expanding their eapacity to ex- port to the United States and to third countries.” Speculation about the future operations of the Export-Import Bank has been as active in Latin America as in the United States. Export-Import Bank development loans have played a major part in the remarkable progress that has been made in that area in recent years, This circumstance was recognized by Secretary Dul- les during the Tenth Inter-American Conference at Caracas, Ve- nezuela last month. In his address to the Plennary Session on March 4 the Secretary said “There has been speculation as to whether this Bank has withdrawn from the field of economic development, I am glad to be able to clarify this matter. The Export-Import Bank will consider on their meriis applications for the financing of dev- elopment projects which are not being made by the International Bank and which are in our common interest, are economically sound, are within the capacity of the prospective borrower to repay and within the prudent loaning capacity of the Bank.” Finally, on March 30, President Eisenhower in presenting the Randall Report to the Congress made the following statement: “In extending such loans, we must be careful not to interfere with the normal lending activities and standards of the Export-Import Bank, The International Bank is the primary institution for the public financing of economic development. The Export-Import Bank will consider on their merits applications for the financing of develop- ment projects, which are not being made by the International Bank, and which are in the special interest of the United States, are economically sound, are within the capacity of the prospective borrower to repay and within the prudent loaning capacity of the Bank.” In closing his message, the President expressed the following view on the importance of our foreign trade: “If we fail in our trade policy, we may fail in all. Our domestic employment, our standard of living, our security, and the solidarity of the free world —all are involved. For our own economic growth we must have con- tinuously expanding world markets; for our security we require that our allies become economically strong. Expanding trade is the only adequate solution for these two pressing problems confront- ing our country”. ; Therefore, we have it from the highest authority that it is the policy of this Administration to promote aggressively the expansion of our world markets; that one of the instruments chosen to aid in carrying out this policy is the Export-Import Bank and that its normal lending activities and standards are not to be interfered with; that export credits will continue to be an important function of the Bank; that the Bank will be expected to make development loans not being made by the International Bank for Reconstruction and Development which are in the special interest of the United States according to the President or which are in our common interest, that is, in the interest of both the United States and’ the borrower's country according to the Secretary of State. These are the references from which the answer to the question with regard to future development loans by the Export-Import Bank can be spelled out. I leave them with you with the simple comment that they are all in affirmative language, none are in the negative. Last fall a sub-committee of the Senate Banking and Currency Committee with a considerable staff visited México, three Central American countries and every country in South America. It was my privilege to accompany the Committee on this trip and I can as- sure you that they worked diligently for long hours throughout the fifty-one’ days to assemble information with regard to our trade with Latin America, ' On March 16 in an Interim Report on the trip the sub-commit- tee stated, among other conclusions, that the activities of the Ex- port-Import Bank should be expanded. There is in many countries of the world a considerable backlog of sound development projects, many of them engineering to a point that would permit of im- mediate consideration by the Bank. However, let us make certain BEGINNERS’ SPANISH BY G. B. Palacin Professer of the University of Miami, Fla. Vocabulary (Vocabularie) LA HORA (TIME OF DAY) éQue hora es? What time is it? Es la una . It is one o'clock Es la una ¥ cinco It is one-five Es la uma y cuarto It is a quarter past one Es la una y media It is half-past one Son las dos y veinte It is twenty after twe Son las dos menos veinte It is twenty to two Son las dos menos cuarto It is a quarter to two Son las dos menos cinco It is five minutes to two Son las dos It is two o'clock zA qué hora es? A las diez de la mafana A las tres de la tarde Es mediodia At what time? At ten in the morning At three in the afternoon It is noon EXERCISE Translate into Spanish: 1—It is twelve o'clock, 2—It is a quarter after ten. 3—It is twenty-five after eleven. 4—It is four o'clock. 5~ It is half-past five. 6—It is seven o'clock. 7—It is one o'clock. 8— It is ten after five in the afternoon. 9—It is half-past twelve. 10—He is here at five o'clock. primero, primera segundo, segunda tercero, tercera cuarte, euarta quinto, quinta sexto, sexta séptimo, séptima octavo, octava Boveno, novena décimo, décima first second third fourth fifth sixth seventh eighth ninth tenth FINANCIAL NOTES OF THE WEEK. DOLLAR IN URUGUAY RE- MAINS UNCHANGED The dollar exchange rate for Uruguayan exports remained at 1.519 Uruguayan pesos per dollar because the congress failed to over- rule a presidential veto of a bill that would have modified the rate. The bill would have authorized wool exporters to sell in the free exchange market 10 per cent of the foreign exchange derived by them from their export earnings. The 1.519 peso-to-a-dollar rate has been in effect for several ye- ars. A new bill now under consid- eration to relieve hard pressed wool producers would exempt wool from internal taxation. ANOTHER FREEZE MAY BE DISASTROUS 2 A Brazilian government leader who visited New Orleans said world coffee supplies might be all but eliminated by another bad freeze like the one that recently killed 30 per cent of Brazil's young cof- fee trees. Alfonso Franco —head of Braz- il’s minority party— said the fre- eze, plus curtailed yields from less fertile soils, has lowered the amo- unt of coffee Brasil can produce. IMPORT DUTIES LIFTED IN MEXICO The Mexican government has lifted a 25 percent ad valorem duty on formerly collected on mer- chandise including 568 essential items ranging from salt to trac- tors and locomotives. The list includes oils, foodstuffs, fibers, steel products, electric gen- erators, office equipment, elevators, telephones, printing machinery, glassware, powder, dynamite and sewing machines. The decree was signed by Pres- ident Ruiz Cortines and Treasury Minister Antonio Carrillo Flores. It has been published in the of- ficial gazette. CHILE TO GET SURPLUS FARM PRODUCTS IN U.S, Chilean Agriculture Minister Al- ejandro Hales announced that a formal agreement was being ne- gotiated with the United States, whereby Chile will purchase 35 million dollars worth of surplus farm products from the U.S. Hales said that Chile needs main- ly from 50,000 to 100,000 tons of wheat and 12,000 tons of meat and added that his country Is in- terested in setting up a permanent exchange of products. The minister explained that the agreement in no way affects neg- otiations which Chile is carrying on with Argentina in connection with the same type items. DROP OF MEXICAN PESO HARMS U.S. PRODUCERS Senator Wallace Bennett (Rep.) said that the recent Mexican peso devaluation will give foreign prod- ucers of lead and zinc a position “even more advantageous”. Bennett asserted that U.S. prod- ucers of those metals are being put out of business by foreign competition. He emphasized that foreign competition had forced prices to decline from 19.5 to 10.25 cents in the last few months, Low costs of foreign production Bennett said permit leat and zinc importation at prices much lower than average prices prevailing in the. United States and are present- ly forcing some of U.S. mines to close. He added that inasmuch as most of U.S. imports of lead and zine come from Mexico the peso de- valuation is a blow to the already threatened domestic industry of the U.S. COPPER DEMAND MAY INCREASE E An increase in demand for Chile- an copper was expected in New York during the present month as the result of a reduction in available copper stocks in the U.S, according to the Wall Street Ja urnal. : The paper added that industrial- ists say their stocks for delivery in May are practically sold and that domestic producers have an- nounced that very little copper is available for shipment this month, The situation in the domestic market reflects a constant liquida- tion of stocks on the part of local consumers a growing volume of orders being sent to copper prod- ucers and a reduction in copper production both in Chile and the United States. HIGHER DIVIDENDS OF VEN. EZUELAN PETROLEUM The Venezuelan Petroleum Com- pany announced that its profits for the first quarter of 1954 total. led $1,059,902 that is to say 26 cents on every share of common stock. Profits for the same period of 1953 reached $699,911 a dividend of 17 cents per share, Net income on general opera- tions amounted to $7,118,584 as compared with $4,841,023 of the same period in 1953. The company also announced its net crude oil production and nat- ural gasoline output reached the level of 15,781 barrels per day as compared with 10,966 barrels per day a year ago. CHILEANS TO INCREASE METAL PRODUCTION Chilean iron ore producers prom- ised to increase their production from 100,000 to 600,000 tons per year with a guaranteed minimum output of 300,000 tons a year prov- ided they get better treatment for conversion of import dollars. The ministry of mines set up an exchange rate of 110 pesos for one dollar on 75 percent of all exports and free exchange rates for the remaining 25 percent. It is estimated that exports will result in a yearly dollar income of approximately four million dol- lars. <= ASS eT re criminate or uneconomic financing simply for the sake of promot- ing exports, The goal should be expansion within the limits of the selective standards that the Bank has applied for twe decades and that have proven sound and ef benefit to beth our country and the countries of our borrewers. It has been suggested in some quarters that the Bank be put inte the business ef writing expert credit insurance, This is the means by which the governments of some countries finance their exports; however, their preblem is not exactly the same as ours, With our enormous production capacity our problem is te enable our trading partners to earn dollars with which to purchase some of our output. If we should fellow a course that would quickly use up the dollar paying capacity of our trading areas without any consideration of means of restoring and increasing that capacity we would soon be out of the world market altogether. Selective financing ig the only sound method and it is the considered judg-' ment of the Export-Import Bank that in the United States it would be extremely difficult te offer export credit insurance om 2 select- ive basis, At the same time it is recognized that the principal problem of United States exporters today arises from the fact that were unable to offer their merchandise upon credit terms in petition with foreign suppliers with assurance that they cam tain assistance im fi the sale if the order is obtained, problem is under ive study at the Export-Import Bank we hope that im the very mear future we may be able to forward with a plam fer establishing lines of credit that will mest our traditionally selective standands } i