The amount requested for personal services, $1,543,000, reflects an increase of $165,700 over fiscal 1957. Nineteen additional positions are provided which increase the gross number of permanent budgeted positions from 202 to 221. Included in the 19 positions are 9 technical positions, namely, 1 assistant treasurer, 1 statistician, 2 economists, 3 engineers, and 2 lawyers. The remaining 10 are clerical and stenographic positions. (At December 31, 1956, there were 186 employees on the payroll, including 5 directors, 77 technical, and 104 clerical and stenographic.) The need for these additional positions is directly related to the increase in the number of active loans including the work performed in the consideration of applications and the approval of new loans. Based upon the estimated volume of new business in fiscal 1958 together with the carryover of work resulting from the heavy backlog of credits authorized in the current and prior fiscal years, the workload involved will transcend any previous year. Increased demands will be made upon the economic, engineering, and legal divisions, requiring seven additional technicians. Due to the increased demand and need of special and comparative information, the position of a statistician is projected for fiscal 1958. This position will eliminate time loss and work interruptions of accountants and clerks in meeting such requirements. The Vice PresidentTreasurer was elevated to the position of Senior Vice President in the latter part of fiscal 1956. At the same time the Assistant Treasurer was elevated to the position of Treasurer. The replacement of an Assistant Treasurer is required to assist in the financial transactions and controls of the Treasurer. The 10 clerical and stenographic positions are required in the following offices and divisions: Office of the Treasurer (1), Accounts (4), Administrative (1), Engineering (1), Legal (1) and Loan Division (2).

Between June 30, 1956, and December 31, 1956, the bank's permanent employees increased in number by 14. This was a significant accomplishment in that technicians, who were being recruited for more than a year, represent 9 of the 14 posi

Personal services compared, 1957 and 1958

The following table indicates the items comprising personal services and a comparison between the 1957 and 1958 fiscal years:

Travel costs for fiscal 1958 are estimated at $130,000. Although travel costs for 1957 will necessarily be considerably less than the $100,000 provided for the current fical year due to the budgetary savings required, the need for additional travel in 1958 is more pronounced for this reason.

During fiscal 1956 travel costs totaled $72,900 or approximately $22,000 less than the approved budget provided. Not all travel contemplated for fiscal 1956 was performed, but it should have been, in the opinion of the Board of Directors. The Board is always watchful to effect economies in the bank's operations. However, the safeguarding of the bank's loans is of primary importance and this can be accomplished most effectively by field inspections. The additional travel which should have been performed in 1956 was not possible for two reasons: (a) recruiting of new personnel (particularly technicians) lagged behind the increase in volume of work; and (b) the influx of applications and other documents received required immediate review and examination which reduced the manpower available for field investigations and inspections. The acquisition of the additional technicians in the first 6 months of the current fiscal year has improved this situation to some degree.

Analysis of travel performed

The following table presents a breakdown of the travel performed during the period July 1, 1956, to December 31, 1956, inclusive:

Foreign travel performed by members of the Board of Directors during the first 6 months of the current fiscal year included their attendance; as official members of Government delegations to international conferences; at dedication ceremonies of projects financed by Export-Import Bank; and further to see, firsthand, the results of our lending operations, as well as to gather financial information with respect to pending requests for the allocation of Export-Import Bank funds. For example, one of the Directors accompanied by members of the staff conducted a survey of Argentina's transportation facilities, for the purpose of determining the equipment to be financed under the approved credit for the rehabilitation of the system.

Domestic travel during the 6 months ending December 31, 1956, included 34 trips for the purpose of attending meetings of bankers and business groups interested in foreign trade and attendant financing problems. Members of the Board and the staff addressed some of these meetings.

Growth in active credits

As of June 30, 1956, there were 503 active credits, on December 31, 1956, the number was 550. The number of active credits is always significant as related to the workload of the bank from a standpoint of policing, investigating and inspecting. Experience indicates that investigations and inspections are proportionally higher in the instance of project-type credits and correspondingly travel costs are also higher. The following table shows a comparison of the number of active project credits and the number estimated for fiscal 1958:

The estimated cost of travel for fiscal 1958 is broken down as follows:

The amount of $1,500 estimated is the same as for fiscal 1957. This object includes the cost of transporting household goods when employee appointments are made by transfers to Washington from field offices of other agencies. Also included are charges for the moving of equipment within the bank.

Communication services

The amount of $19,500 is $1,300 more than provided in the 1957 budget. The increase is due to the uptrend in workload and to provide telephone facilities for additional personnel. The cost of the individual services is broken down as follows:

The estimate of $142,300 covers rentals to be paid to the General Services Administration. Although the bank has not acquired any additional office space

during the current fiscal year, additional space is required. The bank did not acquire approximately 1,500 square feet of office space, which was approved in the 1957 estimate, because of budget restrictions previously referred to. The estimate for 1958 provides for approximately 2.800 square feet of additional office space over the 1957 estimate. The bank is presently paying an annual rate of $3.55 per square foot for office space and 80.75 per square foot for storage space. Except for the cost of $660 covering the rental of one station wagon from the General Services Administration, the entire amount estimated covers office and storage space.

Printing and reproduction

The amount estimated. $17.400, is $1.800 more than approved for fiscal 1967. The funds required under this object are to cover the cost of the semiannual reports to Congress, office forms, checks, promissory notes, etc., and the erst of duplicating work. The increase over 1957 is estimated to cover the increased volume in the bank's program and the increase in printing costs.

Other contractual services

This object includes: The cost of repairs and renovation of furniture and equipment; alterations to the bank's quarters: contributions to the Federal employees' insurance program; investigations of personnel required by Execu tive Order 10450; the pro rata cost for operating the health unit which services all agencies in the Lafayette Building; credit reports; the maintenance of 1 passenger automobile; and the $9.000 provided as a limitation in our language which is available for entertainment expenses.

Supplies and materials

Under this object the increase of $1.400 is attributable to greater usage of supplies and materials because of increased activity and an enlarged staff. Grants, subsidies, and contributions

The entire amount, $97,000, is an increase over fiscal 1957 and represents the bank's contribution to the retirement fund in accordance with section 4 (a), Public Law 854, approved July 31, 1956.

Taxes and assessments

The entire amount included under this object is for deposits under the Federal Insurance Contributions Act, covering nonstatus personnel who are not eligible for civil service retirement benefits.

Mr. PASSMAN. Mr. Waugh, President and Chairman of the Board, is with us. Would you like to make a general statement at this time! Mr. WAUGH. Yes, Mr. Chairman. This is the first opportunity I have had to appear before your committee in my present capacity. I appeared some 2 or 3 years ago representing the economic area of the Department of State. I have a very brief statement I would like to read into the record with a few inserts as I go along, if I may, sir. Mr. PASSMAN. We are happy to have you before the committee. You may proceed in your own way, sir.

GENERAL STATEMENT

Mr. WAUGH. The Export-Import Bank of Washington submits to the Congress its request for the authority to pay out of the bank's estimated earnings of $107.2 million in fiscal year 1958 the amount of $1,980,000 for administrative expenses. The bank will also pay out of its earnings interest estimated at $42.1 million to the United States Treasury upon its borrowings. This will result in a net profit upon the bank's operations for fiscal year 1958 of $63.1 million. Out of these net profits the bank expects to pay to the United States Treasury a dividend of $22.5 million upon its capital stock. The balance of earnings totaling $40.6 million will be placed in reserve for contin

(b) the ability of the country to provide in dollars the principal and interest installments on the dates due.

The bank in presenting its program is not in a position to portray its accomplishments in the usual manner used by most Government agencies. The reason is that the benefits derived by the United States from loans financed by the bank are far-reaching. For example, the bank is financing the construction of a cement plant in Indonesia. Although the plant is not complete, approximately 1,000 United States companies have supplied materials and equipment in its building. Amounts reflected in statements of the bank as to authorizations and disbursements do not indicate in their entirety the foreign trade made possible by the Export-Import Bank financing. The reason for this is that some loans represent only a part of the total amount to be financed. The balance of financing in many instances is furnished by the supplier.

The interest rates on all the Export-Import Bank loans at December 31, 1956, ranged from 2% to 6 percent. The low rate of 2% percent is applicable to the postwar reconstruction and lend-lease loans (1945-46). The rates established are to cover usual operating expenses, the cost of money invested by the United States (i. e., payment to the Treasury of interest on money borrowed, and dividends on the capital stock of $1 billion wholly owned by the United States) and to establish a reserve for possible losses. Loans fully reserved at December 31, 1956, together with writeoffs, total $525,553.90, being approximately one-hundredth of 1 percent of the aggregate loan disbursements of over $5 billion made by the bank since its inception. Delinquent installments totaled $9,260,999.91 as at December 31, 1956. This amount was not charged against the bank's earned reserve because of the expectation of eventual payment.

The substantial increase in the bank's workload during the past 12 months results from the desire and necessity of United States manufacturers and exporters to promote and finance the foreign sale of their products. There has been a continuance of the high level of loan applications received by the bank. Also, the increase in interest rates and the current money market have made it necessary for the bank to perform work and services which usually have been performed by commercial banks through agreements relating to specific credits.

To bring forth practical economies the bank has always endeavored to interest and utilize commercial banks in its loans under takeout or guaranty agreements. The advantages are twofold. The funds disbursed by commercial banks reduce the amount of the bank's draw on the United States Treasury, and, secondly, the bank is relieved of a substantial portion of the paperwork. Such agreements with commercial banks provide the bank with a margin of profit. The increase in interest rates made it undesirable for the Export-Import Bank to continue this type of financing, because the greater cost of funds obtained through commercial banks over the cost of funds from the United States Treasury more than offset any savings from administration of loans by those banks. As a consequence the administrative load as to certain credits has shifted from the commercial banks to the bank.