MUTUAL DEFENSE AND DEVELOPMENT-Con. Public enterprise funds-Continued Development Loans-Revolving Fund-Continued The Foreign Assistance Act of 1961 authorized a 5-year, $7.2 billion program of development loans to be administered by the new Agency for International Development. This program replaced the Development Loan Fund corporation, which was abolished November 3, 1961. $773.7 million was appropriated for development loans in 1965 and $780.3 million is proposed for 1966. Revenue, Expense, and Retained Earnings (in thousands of dol Revenue... Expense. Net income for year... year.. Assets: Development loans are repayable in U.S. dollars. Under the provisions of the Foreign Assistance Act of 1964, interest charged on all loans, with the exception of those covered by special provisions relative to the use of the facilities of the International Development Association and those funds already committed to be loaned, will be at an interest rate of not less than 22% per annum. Loan repayments must begin not later than 10 years following the date on which the funds are lent. During the initial 10-year period the rate of interest shall not be lower than 1% per annum. Development loans are made to promote the economic Undisbursed loan obligations 1. 33.0 Investment and loans...... 99.0 Total obligations..... Treasury balance.... Total assets.... trans Government equity: 1964 actual Financial Condition (in thousands of dollars) 1963 actual End of year. 5,557 5,361 1,141 6,502 Identification code 1965 estimate 11,937 283 1964 1965 actual estimate 11,654 6,502 18,156 1,485,356 1,680,492 1,739,620 412,406 983,496 1,723,238 679 1,678 8,590 1,898,441 2,665,666 3,471,448 922,900 1,897,300 2,659,164 974,400 687,300 773,728 74,564 30,000 1,897,300 2,659,164 3,453.292 1,141 6,502 18,156 Total Government equity... 1,898,441 2,665,666 3,471,448 Object Classification (in thousands of dollars) 1964 actual Analysis of Government Equity (in thousands of dollars) 897,569 1,171,464 1,280.070 588,466 510,706 468,140 412,406 983,496 1,723,238 196 854,000 854,196 -9,600 Total Government equity...1,898,441 2,665,666 3,471,448 1965 estimate 283 857,348 857,631 1 The changes in this item are reflected on the program and financing s MUTUAL DEFENSE AND DEVELOPMENT-Con. Public enterprise funds-Continued Development Loan Fund (Liquidation Account)-Continued The Development Loan Fund was established as a corporation by the Mutual Security Act of 1958 to extend loans, credits, and guarantees to American or foreign individuals, businesses, financial institutions, or foreign governments in order to provide capital for projects and programs contributing to the economic growth of friendly less-developed countries. Under the Foreign Assistance Act of 1961, the Development Loan Fund Corporation was abolished and its functions were transferred, effective November 3, 1961, to the Agency for International Development. As of that date, the Fund had approved 217 loans and allocations and 3 guarantees for development assistance in 50 countries amounting to $2,008.5 million. Of this total, 203 loans and guarantee agreements had been signed totaling $1,887.3 million of which $632.9 million was actually disbursed, leaving $1.254.8 million in undisbursed loan and guarantee agreements still outstanding. In addition, the Fund had $120.8 million unobligated funds outstanding to provide for approved but unsigned loans. Approximately 24% of all loans were repayable in dollars and 76% in foreign currencies. A total of $2 billion was appropriated to the Fund, in addition to which receipts from operations totaling approximately $15.5 million was available including $5.8 million realized from foreign currency receipts sold to the U.S. Treasury for dollars. Subsequent to November 3, 1961, the Fund has remained open for the purpose of liquidating outstanding obligations and approved but unsigned loans. As of June 30, 1964, the undisbursed loan agreements amounted to $391.6 million. It is estimated that this balance will decrease to $236.1 million in 1965 and to $57.8 million in 1966. Loan repayments and interest earned totaled $124.6 million in 1964, and are scheduled to total $150.7 million in 1965 and $178.9 million in 1966. Revenue, Expense, and Retained Earnings (in thousands of dollars) Government equity: End of year. Retained earnings. Undisbursed loan obligations: 1 Dollars.... 1963 actual 748,609 667 Foreign currency. 153 4,129 12,438 1964 1965 1966 actual estimate estimate 424,565 236,119 57,815 220,602 254,332 283,662 309,226 946,313 1,066,896 1,109,640 1,129,824 487 820 820 820 7,935 7,324 9,986 14.584 24,628 35.676 1,425 1,425 1,425 6.985 6,985 6,985 1.932.911 1.778.029 1.671.089 1.552,243 -28,382 -18,701 -19,436 1,841,047 1,688.012 1,571,639 1,439,083 91,864 90,017 99,450 113,160 Total Government equity.... 1,932,911 1,778,029 1,671,089 1,552,243 Analysis of Government Equity (in thousands of dollars) 487 1,907,736 1,841,047 1,688,012 1,571,639 Foreign currency balance brought forward: 487 -74,564 -30,000 -25,000 -66,689-50,089-67,672 -88,120 Collections: Loan repayments. Unrealized gain on foreign currencies credited 637,444 391,566 236,119 57,815 127,732 55,518 31,951 45,661 1,167,068 1,330,945 1,403,019 1,448,767 Total Government equity.... 1,932,911 1,778,029 1,671,089 1,552,243 Total foreign currency balance carried forward... 1 The changes in these items are reflected on the program and financing schedule. Analysis of Foreign Currency Transactions (in thousands of dollars) 1964 actual 667 1965 1966 estimate estimate 49,855 67,672 88,120 429 -86,486-109,783 -136,843 Foreign Investment Guarantee Fund Program and Financing (in thousands of dollars) Program by activities: Capital outlay: Acquired security or Change in selected resources 1 Total obligations (object class Financing: Receipts and reimbursements from: Proceeds from sale of acquired secu- Recovery of prior year obligations. year: Authorization to spend public debt Fund balance.. Unobligated balance available, end of year: Authorization to spend public debt receipts.. Fund balance..... New obligational authority.... 10 70 71 72.47 72.98 Fund balance... 74.93 Obligated balance, end of year.. 90 Expenditures. 1964 actual Cash transactions: Gross expenditures.-- 51 -150,743 150,743 -4,674 -54 -150,743 Relation of obligations to expenditures: Total obligations... 51 Receipts and other offsets (items 11-17)-- 155,471 199,072 Obligations affecting expenditures.-155,420 Obligated balance, start of year: Authorization to spend public debt receipts.. 51 81,229 <-161 -4,831 51 -4,882 -117,843-199,072-199,072 199,072 161 1966 estimate 241 -8,241 -9,500 All guarantees are backed by the full faith and credit of the United States. As of June 30, 1964, total reserves available for all authorized investment guarantees was -74,191-82,352 $273,263 thousand. That amount is expected to suffice to handle any claims that might reasonably be anticipated to mature before a supplemental appropriation could be obtained from the Congress to restore the liquidity of the program. The current status and requested increase in statutory authorizations for specific risk, extended risk, and Latin American housing programs are indicated below. (a) Specific risk.-In order to meet a rising demand for coverage, an increase in authority of $2.5 billion is requested in 1966. The presently authorized level is $2.5 billion. 500 500 80 500 -8,241 -9,500 -8,161 -9,000 199,072 -8,000 -9,000 Balances of selected resources are identified on the statement of financial condition. extended risk guarantees available for self-liquidating pilot or demonstration housing projects in Latin America to stimulate private home ownership for middle and lowermiddle income families. These projects are of a type similar to those insured by the Federal Housing Administration and suitable for conditions in Latin America. (b) Extended risk.-No increase above the $300 million ceiling presently available will be requested for 1966. (c) Extended risk.-For Latin American housing projects, a 2-year increase in authority of $100 million is requested in 1966 to allow a cumulative total of $350 million in outstanding housing guarantees. (The present -9,500 ceiling is $250 million.) 500 Guarantees are available for investment in those countries whose governments have agreed with the Government of the United States to institute the investment guarantee program, and where there are suitable arrangements to protect the interests of the U.S. Government in connection with assets or claims acquired as a result of having provided relief under a guarantee. Continued progress has been made in reaching these agreements with countries that had previously not participated, particularly in Africa. Guarantees are available in 61 of the developing countries. Operating costs and administration.-The value of guarantees issued is as follows (in thousands of dollars): The investment guarantee program encourages and facilitates participation by U.S. businesses in developing Specific risk guarantees issued. the economies of the underdeveloped countries. There are three statutory types of investment guarantees. First, there are the specific risk guarantees which insure a U.S. investor against loss from inconvertibility of the local currency, from expropriation or confiscation, or from war, revolution, or insurrection. Second, there are the extended risk guarantees through which up to 75% of an investment may be insured against loss from any causes other than the investor's own misconduct or normally insurable risks, such as fire and theft. Third, there are |
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