Statement by the President Concerning Export Credit Facilities.

IN MY MESSAGE to the Congress on Balance of Payments and Gold earlier this year, I directed the President of the Export-Import Bank to initiate measures designed to give American exporters full equality with their competitors in other countries in order to help boost the total volume of United States exports. f also asked the Secretary of the Treasury to undertake a study of methods through which private financial institutions could participate more broadly in providing export credit facilities.

These two studies have been closely coordinated and carried out under the immediate supervision of the Export-Import Bank, with policy guidance from the Secretary of the Treasury and the National Advisory Council. I am pleased to announce two 'fundamental and. complementary steps to achieve the objectives of stimulating American exports, strengthening the balance of payments of our country, and enlisting maximum cooperation of private credit facilities.

The new programs are intended to be fully comparable with those offered abroad, particularly with respect to small and medium sized export concerns and with respect to assistance in the financing of consumer goods exports.

The first new program consists of a system of export credit insurance to exporters. This will be operated through the newly organized Foreign Credit Insurance Association--a voluntary, unincorporated group of major United States insurance companies. The FCIA has entered into an agreement with the Export-Import Bank to issue coverage against commercial foreign credit risks in partnership with Eximbank, which will cover political risks.

The second program consists of a new system of guarantees to be issued by Eximbank directly to commercial banks and affiliated financial institutions undertaking the financing of exports. It is designed to encourage these banks to provide non-recourse financing of medium term credits, and to speed up these transactions by permitting the exporter to deal with his bank, rather than with Eximbank in Washington.

The objective of both programs is to assure that U.S. exporters will not lose sales because of a lack of credit facilities where the extension of credit is appropriate. I believe that American exporters will be more disposed to extend credit to their customers if they hold an export credit insurance policy issued through the FCIA, and that commercial banks will be prepared to discount such insured paper. Accordingly, our exporters, through use of the insurance and bank guarantee programs, will be better able to compete successfully with exporters in other countries on sales where credit is required by the customers overseas.

I am deeply appreciative of the splendid response of private industry in furthering the national interest in this area. Both the participating insurance companies and the commercial banks have rendered a public service through their cooperation in making these export credit facilities available as part of the national effort to improve the balance of payments to the United States.