Position with respect to lending, guarantee, and insurance authority

Salaries and expense limitation statement relating to 1966 and 1967 administrative

expense budgets

The largest increase, $51 thousand for personnel compensation, is accounted for by the following increases: average employment $25 thousand, $32 thousand for within-grade increases, and $3 thousand to cover the estimated excess of annual leave earned over leave taken. These increases are offset by a decrease of $9 thousand for temporary employment.

Other minor increases are for personnel benefits, $5 thousand; rent, $3 thousand, and printing and supplies, $2 thousand; which are more than offset by decreases in travel and transportation of persons of $25 thousand and $9 thousand in services of other agencies.

BIOGRAPHIES

Mr. PASSMAN. I wonder if we could place in the record just a little biographical sketch on Mr. Hobart Taylor, Jr. I believe he is a new addition.

Mr. LINDER. Yes, and Mr. Tom Lilley, if we may, who is also a new Director.

(The information follows:)

HOBART TAYLOR, JR.

Hobart Taylor, Jr., was appointed to the bi-partisan Board of Directors of the Export-Import Bank of Washington by President Johnson on August 25, 1965.

Mr. Taylor joined the Federal Government shortly after the inauguration of the Kennedy-Johnson administration in January 1961. He became a Special Assistant to then Vice President Lyndon B. Johnson and also served as Special Counsel to the President's Committee on Equal Employment Opportunity.

In September 1962, Mr. Taylor was appointed Executive Vice Chairman of the President's Committee on Equal Employment Opportunity by President Kennedy. In April 1964, President Johnson also named Mr. Taylor Associate Counsel to the President.

He resigned both positions when he joined Eximbank, but at the request of Vice President Humphrey, he continues to help direct the Plans for Progress program, a voluntary cooperative association of 316 major American corporations in support of equal employment opportunity. He serves as Special Consultant to the Vice President on Plans for Progress.

Mr. Taylor is a native of Texas. He was educated in the Houston Public Schools and attended Prairie View State College in Texas, where he obtained a bachelor's degree. He received a master of arts degree in economics from Howard University and received his law degree from the University of Michigan. After graduation from the University of Michigan, he served for one year as research assistant to the Chief Justice of the Michigan Supreme Court. He then entered private practice in Detroit.

Mr. Taylor served as Assistant Prosecuting Attorney for Wayne County and later as County Corporation Counsel. In 1958, he formed his own law firm. He also served as an officer and director of several companies and participated in a number of community projects.

Mr. Taylor is a member of the Bar of the U.S. Supreme Court, the Federal Bar Association, the Economic Club of Detroit, the University of Michigan Club of Detroit, the Detroit Press Club, the International Club of Washington, and the National Lawyers Club.

Mrs. Taylor, the former Lynnette Dobbins of Birmingham, Alabama, was at one time a school principal in Detroit. They have two sons, Albert and Hobart III.

TOM LILLEY

Born in Bluefield, West Virginia, August 13, 1912. Married Nancy Clegg December 27, 1936. Three daughters: Anne, Cynthia Lilley Maser, and Susan. Attended public schools in Bluefield, West Virginia; Harvard College 19301934, B.A. Degree; Harvard Graduate School of Business Administration 19341936. M.B.A. Degree. Phi Beta Kappa.

Member of Industrial Department of Lehman Brothers in New York City July 1936 through December 1940. January 1941 to September 1942, Burlington Mills, Greensboro, N.C. (July 1941 to January 1942 on leave of absence from Burlington Mills to the Bureau of Industry Advisory Committee, O.P.M., Washington, D.C.) October 1942 to June 1948, member of faculty of Harvard Business School serving as Associate Professor and Assistant Director of Research. June 1948 to October 1965, Ford Motor Company in Dearborn, Michigan-Finance Staff: Ford Division Controller's Office and Product Planning Office; VicePresident-Ford International Staff, and Vice-President-Canadian Overseas Group. Appointed by President Johnson to membership on the Board of Directors of the Export-Import Bank of Washington October 26, 1965.

In the past, Director of the National Foreign Trade Council, member of the Export Expansion Council, Trustee of the U.S. Council of International Chamber of Commerce, and Director of the International Road Federation.

LONG-TERM LOANS

Mr. PASSMAN. Mr. Linder, of your total request of $2,108,241,000, what percentage or give the figure-would be in what we refer to as long-term loans? Do you have that?

Mr. LINDER. I believe that was included in my statement, Mr. Chairman; $1.3 billion of long-term loans.

EMERGENCY LOANS

Mr. PASSMAN. What would be the amount of the emergency loan request?

Mr. LINDER. $595 million.

Mr. PASSMAN. Is that a new item in your budget request?

Mr. LINDER. No.

Mr. PASSMAN. What did you disburse last year for emergency loans?

Mr. LINDER. In 1965 under emergency loans, we authorized $340 million.

Mr. PASSMAN. Of your long-term loans, what was the amount last year?

Mr. LINDER. Authorizations of long-term direct capital loans were $435 million.

Mr. PASSMAN. What is the real basis for this emergency loan category under your operations?

Mr. LINDER. The emergency credit will provide for both balanceof-payments loans and unanticipated military purchases.

I would like, if I may, to go off the record.

Mr. PASSMAN. Surely.

(Off the record.)

MILITARY EQUIPMENT LOANS

Mr. PASSMAN. Would there be any reason why we could not put on the record the fact that you are lending funds to foreign governments for the purchase of U.S. military hardware, as long as we do not list the countries or the amounts?

Mr. LINDER. I do not think so.

Mr. PASSMAN. This is Mr. and Mrs. America's business.

Mr. LINDER. I would agree. I just would not like the countries or the amounts listed.

Mr. PASSMAN. We will not list the countries. Could you tell us the amount of the military sales for fiscal 1964, 1965, and 1966 ?

Mr. LINDER. I cannot tell you for 1966 at this moment.

Mr. PASSMAN. You could give us an estimate.

Mr. LINDER. I could give you an estimate. It will be over $300 million this year.

Mr. PASSMAN. A lot of people actually believe-I do not fully concur—that the need to sell military equipment is being built into our economy. Tens of thousands of people are employed manufacturing military equipment and ammunition for sales purposes. Since the profit incentive is there, some people think we are going to let this thing get out from under control.

I do not know whether we will or not, but it just looks as if it is a part of our economy today to manufacture and sell military equipment. I do not know for how many nations you are financing such sales. We will not put that on the record. I do know we have a military assistance

program going in 55 nations of the world. It may be necessary for our Government to have to have a look at it.

Mr. LINDER. We are financing a few, Mr. Chairman. For the most part, the ones we are financing are good credit risks.

Mr. PASSMAN. I am not talking about credit. I am talking about the profit incentive. Where there is a profit involved you can always find a reason why you keep doing these things.

Mr. SHRIVER. That is better than giving it away.

Mr. PASSMAN. Let the record show that we have not stopped giving it away. We are increasing the giveaway program, and this is just another system of selling military equipment. If you actually stopped giving it away, that would be one thing; but the foreign aid program for fiscal 1967 will be one of the biggest in the history of this country if you pick up all segments of it.

Mr. CONTE. Not military, Mr. Chairman.

Mr. PASSMAN. I am talking about foreign assistance, because if you give people money with which they can buy what they would normally spend their own dollars for, it releases their dollars to buy military equipment. They can work their internal affairs to spend what they earn any way they want to.

I do not know yet just what the request will be for the military assistance. That we will find out. If it is down, all right. I am only talking about the total amount of the Presidential request for the foreign assistance program and the 15 other bills in the budget for foreign assistance, which is one of the greatest, if not the greatest, amounts ever presented to the Congress.

Mr. LINDER. Mr. Chairman, I would like to volunteer, as far as the Bank is concerned and as far as we can look ahead-we cannot look ahead very far-I believe that a very large percentage of our military loans by the end of fiscal 1967 or fiscal 1968 will be to people who do not get foreign aid.

Mr. PASSMAN. That is fine. I am merely stating the aggregate, whether you give it all to 1 nation or whether you spread it over 98. I am talking about the total foreign aid program. If somebody picks up my grocery bill, it leaves me more money for automobiles. Do you get my point?

Mr. LINDER. No one can deny that.

Mr. PASSMAN. That is exactly the point I have always made.

LONG-TERM CAPITAL LOANS

Would you furnish for the record a list of the long-term capital loans, now called equipment and service authorizations, that were made by the Bank in calendar year 1965, similar to the table on page 15 of last year's hearings?

Mr. LINDER. Yes, sir.

(The information follows:)