granting of the credit followed months of negotiation between the Governments of the United States and Brazil while Brazil was preparing to institute a free exchange market which was established on February 21, 1953. Brazil agreed to supplement the credit with its own resources to the extent necessary to pay its commercial backlog and institute a prompt remittance system for current imports from the United States.

The loan bears interest at the rate of 321⁄2 percent per annum and is repayable over a period of 3 years beginning next fall. In June the Bank authorized a credit of not to exceed $2,500,000 in favor of Cia. Brasileira de Estireno to assist in financing the procurement of United States materials, equipment, and services required for the construction of a $5,590,000 plant for the production of styrene monomer, the principal raw material used for the production of plastic. The plant is to be constructed near the Port of Santos and will have a capacity of 10,000,000 pounds of styrene per year. Ownership of Cia. Brasileira de Estireno is vested in Companhia Brasileira de Plasticos "Koppers," Koppers Commercio e Servicos Technicos Limitada and Industria Pneumaticos Firestone, S. A. the Brazilian subsidiaries of Koppers Co. and Firestone Tire & Rubber Co. respectively, and in Brazilian nationals. Management of the enterprise will be undertaken by Koppers Co. during the life of the Bank's loan under the terms of a contract which provides also that Koppers Co. will furnish its processes, patents, and technical knowledge for the production of styrene

monomer.

The credit is to be repaid in 18 approximately equal semiannual installments with interest at the rate of 5% percent per annum and will bear the joint and several unconditional guarantee of the Brazilian subsidiaries of Koppers Co. and Firestone Tire & Rubber Co.

The Bank authorized in June an exporter credit of $595,000 in favor of S. A. Industrias Reunidas F. Matarazzo of Sao Paulo, Brazil, to assist in financing the acquisition of rayon textile machinery. The amount of the credit represents 85 percent of the c. i. f. invoice value of the equipment; the remaining 15 percent of the total c. i. f. cost of approximately

June 30, 1953

$700,000 is to be financed by Whitin Machine Works, the United States suppliers of the equipment.

Another credit for the purchase of cotton textile machinery was authorized in the same month in favor of S. A. Industrias Votorantim. This credit in the amount of $255,000 represents 85 percent of the c. i. f. invoice value of equipment valued at approximately $300,000, the remaining 15 percent being financed by Whitin Machine Works, the United States supplier. The 2 credits for textile machinery will be repayable in 8 semi-annual installments with interest at the rate of 6 percent per annum.

Japan

A short-term credit of $40,000,000 was approved in April to assist in financing Japan's imports of United States raw cotton.

operates through United States and Japanese commercial banks and cotton marketing channels which customarily finance and handle cotton trade between the United States and Japan. Purchases and shipments are made in the customary manner, with the orders being placed by the textile mills in Japan, or their agents, with United States shippers. Facilitation of the cotton trade, which is the purpose of the credit, is one of the most important factors in United StatesJapanese economic relations. In recent years Japan has been the largest export market for United States cotton and, hence, the cotton credit extended will be of great benefit to our cotton growers and exporters. Approximately 200,000 bales of raw cotton purchased at current market prices under contracts for shipment subsequent to May 8, 1953, may be financed by the credit.

The credit bears interest at the rate of 3% percent per annum and is repayable within 15 months.

Mexico

In February the Bank authorized an increase of $1,567,500 in a credit heretofore established in the amount of $1,875,000 in favor of Mexican Gulf Sulphur Co. and Mexican Sulphur Co., S. A. for the purpose of completing a sulphur plant and providing, in addition, adequate facilities for shipping and marketing the sulphur produced. The loan will be repaid in 10 semiannual installments commencing in June 1954.

In April the Bank authorized a second increase in the amount of $105,000 in the credit of $450,000 previously established in favor of Cia. Minera Fernandez, S. A. The additional funds were required to meet increases in the cost of mine development and to expand the mill somewhat beyond the scope of the original plans to provide for improved extraction and increased capacity. The credit is repayable in seven semiannual installments beginning in December 1953. The company has increased its assignment to the Bank from the proceeds of shipments of manganese concentrates made to General Services Administration from $5.50 to $6.50 per ton.

In April the Bank authorized the establishment of a shortterm credit of $12,000,000 to assist in financing Spanish imports of United States raw cotton and spinnable waste. The credit was extended to the following Spanish commercial banks with the guarantee of the Bank of Spain: Banco Hispano Americano, Banco Exterior de Espana, Banco Espanol de Credito, Banco de Vizcaya, Banco Central and Banco de Bilbao.

It is anticipated that at current market prices, approximately 55,000 bales of cotton can be financed by the credit. The financing is arranged through letters of credit under which 18-month drafts bearing an interest rate of 31⁄2 percent per annum are drawn on the Bank of Spain as agent for the Spanish commercial banks.

Union of South Africa

At the request of the Atomic Energy Commission, in June the Bank approved a second increase of $30,000,000 in the general line of credit originally authorized in June 1951 for the purpose of establishing individual credits in favor of South African gold mining companies to facilitate the construction of plants and related facilities for the production of uranium for sale to the Atomic Energy Commission. The terms and conditions of the individual loans will conform to those of credits previously established under the general line.

Allocations Under Previously Authorized Credits

Ecuador

Within the commitment of $7,000,000 made in December of 1949 to assist the Republic of Ecuador in financing reconstruction work in the areas devastated by the earthquake of August 5, 1949, the Bank in April granted a credit of $335,000 to assist in financing the acquisition and exportation to Ecuador of United States materials, equipment and supplies required in connection with the improvement and enlargement of the water supply system of the City of Latacunga, Province of Cotopaxi, which is within one of the areas affected by the

general earthquake reconstruction credit for the purpose of improving water supply and sewerage systems in affected communities. The United States Institute of Inter-American Affairs has rendered technical assistance in the development of the project and, at the request of the Ecuadoran Government, will assist in supervising construction.

The credit will be repayable in quarterly installments over a 20-year period and will bear interest at the rate of 3/21⁄2 percent per annum.

Indonesia

Under the commitment of $100,000,000 made to the Republic of Indonesia on February 8, 1950, the Board in June authorized establishment of a line of credit of $14 million to assist in financing the acquisition and exportation to Indonesia of United States equipment, materials, supplies and services for the construction of a cement plant and related distribution facilities. The proposed plant will have a capacity of 250,000 TABLE 2.-Allocations made during the 6 months ended June 30, 1953 under previously authorized credits