1966 estimate Identification code 30-40-0500-1-1-910 40 New obligational authority (appro- Relation of obligations to expenditures: 71 Total obligations (affecting expenditures) – 90 Expenditures.. 1,450 2,250 3,200 800 3,200 50 -50 -250 750 3,000 At the time the budget estimates for this agency were prepared the President had not yet appointed the members of the Commission. The estimates are therefore preliminary and may be amended at a later date to reflect the actual program and operating plans to be developed by the Commission members. 1. Federal administration.-Title VII of the Civil Rights Act of 1964 established an Equal Employment Oppor tunity Commission to investigate alleged instances of unlawful employment practices. Funds are provided to support the five-member Commission and supporting headquarters and field staff assistance. 2. State administration.-Title VII also anticipates a 10 close relationship between the Commission and the States and localities that have statutes which prohibit unfair employment practices. Federal funds are provided to reimburse States and local equal employment agencies for certain activities carried out by them pursuant to specific agreements worked out with the Commission. 10 Identification code Object Classification (in thousands of dollars) Under existing legislation, 1965. Since no appropriation was made for 1964 or 1965, it is anticipated that a supplemental appropriation will be needed, in accordance with the provisions of Public Law 88-522, approved August 30, 1964, to finance the Commission on a standby basis from 30-46-0100-0-1-652 January 1, 1964, until funds are received, and on an active basis from the time funds are received to June 30, 1965. Personnel compensation: 11.1 Permanent positions... 11.5 Other personnel compensation.... 7 22.0 Transportation of things...-. 21.0 Travel and transportation of persons.. 23.0 Rent, communications, and utilities.. 120 25.1 Other services. 24.0 Printing and reproduction.... 12.0 Personnel benefits.......... 26.0 Supplies and materials. 31.0 Equipment..-- 41.0 Grants, subsidies, and contributions.... 900 EXPORT-IMPORT BANK OF WASHINGTON The Export-Import Bank of Washington is hereby authorized to make such expenditures within the limits of funds and borrowing authority available to such corporation, and in accord with law, and to make such contracts and commitments without regard to fiscal year limitations as provided by section 104 of the Government Corporation Control Act, as amended, as may be necessary in carrying out the program set forth in the budget for the current fiscal year for such corporation, except as hereinafter provided. (Foreign Assistance and Related Agencies Appropriation Act, 1965.) Public enterprise funds: EXPORT-IMPORT BANK OF WASHINGTON FUND Program and Financing (in thousands of dollars) 17 27 Interest revenue from loans 3. Guarantee and insurance program: Fees and premiums, net.. Recovery of prior year obliga- 21.47 Unobligated balance available, start of year: Authorization to spend public debt receipts....-2,824,760 -3,117,928 -2,425,746 24.47 Unobligated balance available, end of year: Authorization to spend public debt receipts.... Capital transfer to general fund.. New obligational authority.. Relation of obligations to expendi tures: Total obligations............ Receipts and other offsets (items Obligations affecting ex- Obligated balance, start of year: loans... 7,690 35,000 72.98 public debt receipts... Fund balance....... Change in selected re- Total capital outlay, Total loan program 93 Gross expenditures.. 94 Applicable receipts.. 1 Balances of selected resources are identified on the statement of financial condition. 2 Principal receipts are net of portion due holders of portfolio certificates: 1964, $65,714 thousand; 1965, $175,869 thousand; 1966, $218,956 thousand. 3 Interest receipts are net of portion due holders of portfolio certificates: 1964, $23,301 thousand; 1965, $47,924 thousand; 1966, $56,634 thousand. For more than 30 years the Export-Import Bank of Washington has assisted in financing U.S. exports. This is done through the Bank's programs of direct loans to foreign borrowers, guarantees issued to commercial banks, and insurance issued by the Foreign Credit Insurance Association. The Bank extends credit only when in its judgment private capital is not available, and encourages private participation in the credits ex212,690 233,448 219,873 tended. In all its activities, the Bank is required to find 607 820 89,135 119,559 93,673 80,000 100,000 33,889 26,200 · reasonable assurance of repayment. Public Law 88-101, approved August 20, 1963, extended the life of the Bank to June 30, 1968; increased from $7 billion to $9 billion the total amount of loans, guarantees, and insurance which the Bank may have outstanding at any one time; and increased from $1 billion to $2 billion the amount of guarantees and insurance EXPORT-IMPORT BANK OF WASHINGTON-Con. Public enterprise funds-Continued EXPORT-IMPOrt Bank of Washington FUND-Continued which may be issued on a fractional reserve basis. Although Congress enacted an increase of $2 billion in lending authority, it did not increase the Bank's authority to borrow from the U.S. Treasury. The Foreign Assistance Appropriation Act of 1964 provided that the Export-Import Bank could guarantee sales of U.S. goods and services to the U.S.S.R. and Eastern European countries only if the President determined such guarantees to be in the national interest. On February 4, 1964, President Johnson determined the sale of U.S. agricultural products to the Soviet Union, Poland, Czechoslovakia, Hungary, Rumania, and Bulgaria, and the sale of U.S. goods and services to Yugoslavia to be consistent with the national interest. Subsequently, the Bank has guaranteed sales of agricultural commodities to Hungary and Poland. In 1964 the Bank's receipts exceeded expenditures by $702 million. Three factors are mainly responsible. First, a growing volume of short- and medium-term loans akin to those made directly by the Bank in previous years are now being made by private credit sources under the Bank's program of guarantees to commercial banks or the re-insurance of policies issued by the Foreign Credit Insurance Association. Second, the Bank has been highly successful in selling its portfolio securities to commercial banks, thereby enlisting their participation in the financing of U.S. exports. Finally, the Bank has been receiving sizable prepayments from European governments on loans made for purposes of reconstruction shortly after World War II. The Bank's new program activity increased from $732 million in 1963 to $852 million in 1964, and is expected to increase further in 1965. As in past years, most Bank lending was in the form of equipment and service credits to foreign borrowers. Gross authorizations increased from $1,474 million in 1963 to $1,743 million in 1964, an increase of $269 million. Much of the increase was due to commodity loan and FCIA insurance authorizations. The following tables show the contemplated 1966 new program activity of the Bank, compared to the actual for 1964 and the estimate for 1965. NEW PROGRAM ACTIVITY [In thousands of dollars] Limitation on activity, 1964. Actual activity, 1964... Loan principal repayments 1. 419.4 Liquidation of agent bank loans. 4.1 Liquidation of portfolio certificates.... 218.9 Limitation on activity, 1965. 1.350.060 Sale of loans with recourse.. Sale of loans without recourse. Liquidation of loans sold with recourse_ .9 .9 30.0 60.0 31.0 Sale of portfolio certificates with recourse.. 700.0 involving establishment of new industries, expansion and DATA ON EQUIPMENT AND SERVICES LOANS 1 DATA ON COMMODITY LOANS 903 1964 actual 1965 estimate 1966 estimate Loan disbursements. 40.0 10.0 Undisbursed loan authorizations, June 30. 1,340.0 1,593.6 1,835.1 Loan principal repayments.. .3 33.3 Credit authorizations...... 570.2 770.0 900.0 Liquidation of agent bank loans. 4.1 Participations in authorizations. 60.5 100.7 Credit cancellations... 70.6 62.5 36.1 128.1 Loans outstanding, June 30.. Loan disbursements, including disburse ments by commercial banks under letters of credit.. Loan principal repayments 2 268.0 246.1 292.2 Liquidation of portfolio certificates.. 218.9 Liquidation of loans sold with recourse.. .9 Sale of loans without recourse.. Sale of loans with recourse.. 53.6 Sale of portfolio certificates with recourse. .9 30.0 31.0 700.0 Emergency foreign trade loans. On occasion the Bank extends emergency loans to foreign governments experiencing shortages of foreign exchange to help such countries maintain their level of essential imports from the United States. Emergency loans may take the form of a line of credit to a foreign central bank or other financial institution to provide dollar exchange for a wide range of U.S. exports or to fund arrearages resulting from dollar exchange difficulties. No new authorizations of this type occurred in 1964. In 1965, however, $250 million has been authorized as part of the U.S. contribution in support of the British pound. DATA ON EMERGENCY LOANS 1 Formerly titled "Long-term project and equipment loans." 2 Includes portion due holders of portfolio certificates. 3 Includes loans sold with recourse as follows: 1964, $5.0 million; 1965, $57.7 million: 1966, $87.8 million. Exporter loans.-Exporter loans are medium-term credits (1-5 years) which finance exports of capital equipment, consumer goods, aircraft, and semifinished products. Bank activity in this field has shifted from direct lending to the use of private financing sources-the Foreign Credit Insurance Association (FCIA) and commercial banks under Eximbank's guarantee programs. Delinquent loans. As of June 30, 1964, protracted loan defaults aggregated $39.5 million ($22.7 million principal plus $16.8 million interest), involving five loans to Cuba, four to Bolivia, and two to Haiti. On these loans the total outstanding principal was $97.3 million. Of the Bank's $200 million of loans to mainland China authorized prior to 1947, all but $28.3 million has been repaid. The Republic of China resumed payment in 1961 on $2.3 million of loans, $1.9 million was outstanding on June 30, 1964. In addition, there are minor delinquencies which, in the opinion of the Bank's Board of Directors, are attributable to routine delays or transitory exchange difficulties. On June 30, 1964, these delinquencies totaled $1.2 million of which $0.8 million was principal and $0.4 million was interest. On September 11, 1964, the Bank completed an agreement with the Government of Brazil to refund $92.5 million principal of debt due in 1964 and 1965. Of this total, $66.5 million consists of project and commercial supplier debt which the Bank will refund subject to comparable refunding by other creditor countries. loans to finance purchase of U.S. goods and services for Guarantees and insurance.-In addition to making direct projects abroad, the Bank guarantees export loans made by commercial banks and offers export credit insurance through the FCIA on short- and medium-term transactions. Guarantees issued by Eximbank to commercial EXPORT-IMPORT BANK OF WASHINGTON-Con. Public enterprise funds-Continued EXPORT-IMPORT BANK OF WASHINGTON FUND-Continued banks enable U.S. exporters to obtain nonrecourse medium-term financing directly from their banks. Similarly, through an arrangement with Eximbank, the FCIA issues insurance policies directly to exporters throughout the country. The insurance programs permit an exporter to: (1) extend credit to his customers in other countries without fear that unforeseen adverse developments abroad will expose him to large losses; and (2) obtain credit more readily from U.S. commercial banks. In August 1964, both programs were modified to give more flexibility to FCIA and the commercial banks. Under the medium-term FCIA program and the guarantee program, the foreign buyer is required to make a partial payment in cash. Under both short- and mediumterm programs, the exporter is required to carry a portion of the political and commercial risks. Eximbank takes the remainder of the political risks and shares the commercial risks with FCIA or the commercial bank. Premium rates for both guarantees and insurance vary according to the country of destination and the term of the credit. The Bank's activity also includes insurance against war and expropriation risk on commodities, mainly cotton, which U.S. exporters hold abroad on consignment awaiting sale. Total new insurance and guarantee authorizations in 1966 are estimated at $1,151.2 million. These include $884.5 million new and renewed insurance policies issued by FCIA, and $263.7 million of guarantees to commercial banks. The net charge to lending authority for such transactions is computed at 25% of the increase in outstanding balances during the year, after allowing for cancellations and expirations. This net charge is expected to be $55.0 million in 1966. DATA ON GUARANTEES AND INSURANCE 1 1 Guarantees and insurance issued prior to Oct. 4, 1961, are charged at 100% and those issued after Oct. 4, 1961, are charged at 25%. Excludes medium-term guarantees outstanding and issued prior to Oct. 4, 1961, which are not subject to limitation. Private capital participation.-In 1964 the Bank continued to encourage further participation of U.S. commercial banks in its lending abroad. Following the pattern initiated by the establishment of the Series A Eximbank Portfolio Fund in 1962, and the Series B in 1963, the Bank established in 1964 a third fund, Series C, consisting of a pool of export paper held by it with maturcates representing participations in the fund and ities falling due over a 7-year period. Portfolio certifiguaranteed by the Bank were sold to domestic commercial banks in the amount of $372.5 million; as in 1963, the domestic offering was heavily oversubscribed. The total sold under the three series as of June 30, 1964, amounted to $922.5 million of which $95.7 million has been retired, leaving net outstanding of $826.8 million. In addition to the portfolio fund sales in 1964, there were sales of individual loan maturities of $63.3 million without recourse of which $62.4 million was sold abroad. In 1965 the Bank expects to sell additional portfolio certificates amounting to $725 million as well as approximately $180 million of individual loan maturities. Portfolio sales of $700 million are projected for 1966. The Bank also continues its efforts to obtain the participation of commercial banks in its new loans. Administrative expenses. It is estimated that a limitation of $4.1 million will permit the Bank to carry out its programs in 1966. Operating results and financial condition.-The Bank is a Government-owned corporation in which the Treasury has invested $1 billion in capital stock. In addition, the Bank is authorized to borrow from the Treasury up to $6 billion as necessary to carry on its programs. The Bank pays interest on these borrowings, which is expected to amount to $11.4 million in 1966. In addition, interest on portfolio certificates is estimated at $56.6 million. For 1966, the Bank's net income is estimated to be $117.8 million. Of this sum, $50 million is expected to be paid as a dividend to the Treasury. It is planned to add the remaining $67.8 million to the Bank's retained earnings to provide for future contingencies. Total investment of the Government in the corporation is expected to be $2,064 million on June 30, 1966, comprising $1 billion in capital stock and $1,064 million of retained earnings. As of June 30, 1964, outstanding borrowings from the Treasury were $830 million and net retained earnings reserve was $880 million, after the 1964 dividend of $50 million. |