10913 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT EIGHTH ANNUAL REPORT 1952-1953 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT EIGHTH ANNUAL REPORT TO THE BOARD OF GOVERNORS 1952-1953 * WAN K*S WASHINGTON, D. C. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT September 9, 1953 My dear Mr. Chairman: In accordance with Section 10 of the By-Laws of the International Bank for Reconstruction and Development, I have been authorized by the Executive Directors to submit to the Board of Governors this Eighth Annual Report of the Bank. The report includes financial statements as of June 30, 1953, based on an audit of the accounts of the Bank made pursuant to Section 19 of the By-Laws. It also incorporates, pursuant to Section 19 of the By-Laws, an administrative budget for the fiscal year ending June 30, 1954. The report as a whole covers the Bank's activities for the fiscal year beginning July 1, 1952 and ending June 30, 1953. Sincerely yours, EUGENE R. BLACK, President. Chairman, Board of Governors, International Bank for Reconstruction and Development. TABLE OF CONTENTS Page Summary-THE BANK'S YEAR IN REVIEW .................... 7 Chapter I-INVESTMENT PROGRAMMING IN UNDER- DEVELOPED COUNTRIES ........................... 9 The Place of Governmental Programming Units ........ 10 Functions .......................................... 11 Organization ....................................... 12 Some Points of Emphasis ............................ 12 Chapter II-THE BANK'S OPERATIONS ......................... 14 Asia ............................................... 14 The Middle East .................................... 19 Africa ............................................. 21 Australasia ......................................... 23 Europe ............................................ 23 Western Hemisphere ................................ 28 Chapter IlI-FINANCIAL ACTIVITIES AND RESOURCES .......... 37 Earnings, Reserves, Repayments and Disbursements ... 37 Funds Available for Lending ......................... 39 Sales of Securities ................................... 40 Financial Statements and Reports ..................... 41 Chapter IV-MANAGEMENT AND ORGANIZATION .............. 42 Organization ....................................... 42 Personnel .......................................... 42 Training Programs .................................. 43 Staff Retirement Plan ............................... 43 Joint Services of the Bank and the Fund ............... 43 Administrative Budget .............................. 43 Chapter V-MISCELLANEOUS ................................... 44 Relations with Other International Organizations ...... 44 International Finance Corporation .................... 44 Membership and Subscription ........................ 45 APPENDICES ........................................ 47 GROWTH OF THE BANK (CUMULATIVE TOTALS EXPRESSED IN MILLIONS OF U.S. DOLLARS) 1,600 1,600 1,500 / 1,500 1,400 LOAN COMMITMENTS 1,400 (NET OF CANCELLATIONS OR REFUNDINGS) 1,300 - - 1,300 1,200 1,200 1,100 /1,100 GROSS 1,000 / DISBURSEMENTS 1,000 900 /o /110 800 100 700 OF 600 500___ _ 400 50 300 OBLIGATIONS OF f S / / .c**** ~~~BORROWER SOLD BY BANK 30 200 REPAYMENTS OF 20 I00 PRINCIPAL TO BANK ,_~s1 1 0 0 _ _ _ _ _~~~~~~~~~~~~~~0 g 1947 1948 1949 1950 1951 1952 1953 FISCAL YEAR ENDED JUNE 30 *Net income appropriated to Supplemental Reserve and commissions appropriated to Special Reserve Summary-The Bank's Year in Review Membership and Capital Subscriptions Disbursements Three more countries joined the Bank during Disbursements on new and existing loans, the fiscal year; Germany, Japan, and Jordan which were at the highest rate reached since the became members in August 1952. Membership Bank's development lending began, amounted to was thus increased from 51 to 54, and total sub- the equivalent of $226.8 million. Total disburse- scribed capital to the equivalent of over $9,036 ments now stand at $1,103 million. million. With an improved supply position outside Lending Operations the United States, currencies other than United States dollars played a larger part than hitherto During the year the Bank made ten loans in in the Bank's disbursements. Of the year's total nine countries amounting to the equivalent of disbursements, the equivalent of $39.6 million $178.6 million. This brought the total of Bank was in these currencies and accounted for 17% lending to date to $1,591 million in 29 countries. of the year's total. Of total disbursements $144.1 Two of the year's loans were made in sup- million was spent in the United States and $82.7 port of a broad range of economic projects. Agri- million (over 36% ) in other countries. culture, basic industries and transport benefited from a loan to Australia. In Yugoslavia, the Financial Position Bank supported a group of projects expected Resources available for lending were aug- to be of special value in improving the country's mented by the sale, in October 1952, of $60 mil- balance of payments. Splnecifi kyey industres. were hlped b Bank lion of the Bank's bonds in the United States. Spcfckyidsre-eehle yBn No further issues were made during the year in lendimg for iron and steel production in India, for wood-poduct e n l the United States, where there was a sharp in- wood-products industries in Finland and for a fer- ces ntecs fbroig tilizer plant in Iceland. Another loan made to . . ~~~~~~Funds were raised outside the United States India during the year is assisting the development whn,sfore se d thid tie Ubic of- program for the Damodar Valley; this program when, for the second and third time, public of- will help to provide more power for industry, ferings were negotiated in Switzerland. A sum of and water supply and flood protection for agri- 50 million Swiss francs (approximately $11.6 culture. In Peru, agriculture will benefit from a million) was raised in November 1952, and ar- loan for farm machinery. Transportation, essen- rangements for another issue of equal size were tial to both agriculture and industry, will be completed in June 1953. improved by loans in Colombia, Northern Rho- Funds available for new loans were also in- desia and Brazil. creased by the sale of the equivalent of $13.6 Non-dollar lending was larger in relation to million of securities from the Bank's portfolio, the year's total than in any earlier year. The $8.3 million with its guarantee and $5.3 million Bank's loans to Yugoslavia, Finland and Iceland without. were in European currencies, and service will be in The Bank's resources of non-dollar funds these currencies and not in dollars. were increased during the year by further releases [ 7] from the capital subscriptions paid in by members Apart from its general survey missions, the in their own currencies. The equivalent of $26.6 Bank sent specialized missions to advise on particu- million was released in this way. In addition, the lar problems in a number of its member countries. United Kingdom agreed, subject to consultation, Methods of mobilizing domestic capital and of to make up to £60 million ($168 million) avail- establishing credit institutions to stimulate devel- able for disbursement by the Bank for projects in opment have been investigated in Cuba, Iceland, Commonwealth countries of the sterling area over Lebanon and Nicaragua. A study of measures to a six-year period. encourage the further growth of the capital market The net income resulting from the Bank's in Colombia was completed and presented to the operations during the year was $18.5 million. Government. The Bank continued to assist in This sum was added to a supplemental reserve the technical examination being conducted jointly which at the end of the year amounted to $76.5 by India and Pakistan, of measures to increase the million. The special reserve rose to $37.2 mil- use of water from the Indus River system. Advice - ; 1 r ~~~~~~~~has also been given to member countries on a lion, making the Bank's total reserve from opera- tions $113.7 million. wide range of problems directly connected with the Bank's lending operations. All debt service charges and principal re- two misseion sponsoi payments due to the Bank were promptly metTwmisospnordbthBakjitl with other bodies, reported during the year. The during the year. Repayments of principal re- mission to Chile, organized in conjunction with ceived during the year, including advance pay- the Food and Agriculture Organization, presented ments, amounted to $2.3 million, bringing the its recommendations to the Government on an total to $12.7 million. agricultural development program. In Mexico, The chart facing the first page of this sum- a study of long-term economic trends and capi- mary shows, in addition to the cumulative total of tal requirements was concluded by a working loan commitments and disbursements, repayments party composed of Bank and Mexican economists. of principal, sales of borrowers' obligations, and the growth of reserves. International Finance Corporation Examination of the proposal to set up an Advisory Services International Finance Corporation was continued In addition to its loan operations, the Bank during the year. As proposed, the Corporation has been active in helping its members to assess would be an affiliate of the Bank; it would make their economic potential and to prepare programs loans to private enterprise without government of development. The general survey mission re- guarantee and would participate with private capi- mains the Bank's main way of performing services tal in equity investment. A report on this subject, of this kind, and the reports prepared are being made by the Bank in May 1953, stated that the widely used as a basis for further action by Gov- member countries upon whom the proposed cor- ernments concerned. The tenth survey mission, poration would have to depend for the bulk of its to British Guiana, was carried out during the first funds had not so far shown readiness to commit part of 1953. The report of the mission to Ceylon their capital. The matter is being kept under was presented to the Government in July 1952, review, but further action will be deferred until it and the report of the mission to Jamaica in De- appears that sufficient financial support is likely cember of that year. to be forthcoming. I18] Chapter I-Investment Programming In Underdeveloped Countries The Bank is now beginning its eighth year of Capital equipment can now readily be sent work. Since 1946, it has had opportunities to to most parts of the world; technical skills can be observe the process of economic development in imported. Both the tools and the knowledge many countries and on almost every level of ef- needed for development are within reach. But fort, from village to Cabinet council. Bank this does not mean, as is too often assumed, that officers, staff and consultants have visited nearly the chief requirement is to finance imports of all the Bank's 54 member countries and many foreign equipment and to attract foreign techni- overseas dependencies as well. Their business has cians. The availability of capital for these pur- been carried out for a wide variety of purposes: poses cannot, by itself, be expected to remove to make broad economic assessments; to consult some of the most important obstacles to economic on major policies affecting development; to study growth. individual projects and examine the possibility of To a greater or lesser extent, these obstacles making loans for them; to assist in dealing with to growth exist everywhere. In one country or problems of management, engineering and finance another, they include: the lack of traditions of arising in the course of project execution; to help political responsibility; the weakness of economic in the mobilization of local capital; and to gain initiative; low standards of education and training; knowledge of or consult upon many other prob- and insufficient understanding that economic lems of concern to the Bank and its members. progress requires patience, effort and self-denial. Many observations by the Bank confirm the The consequences may be lack of confidence be- widely held belief that the resources of most un- tween a government and its people and frequent derdcveloped areas are adequate, if effectively changes in government policies and personnel; un- used, to support a substantially higher level of sound economic and financial policies, dictated by production and income. There are many and political pressures and often leading to prolonged complex reasons why these areas have not been periods of inflation; a reluctance of important more developed. Many cultures, for instance, groups to accept necessary economic and social have placed a low value on material advance and, changes; waste of public funds on non-productive indeed, some have regarded it as incompatible activities; and weak administration in government with more desirable objectives of society and of and business. These factors discourage domestic the individual. The character of government has savings, and deter foreign investment. not always been of a sort to create popular incen- The interdependence of each aspect of society tives; certain forms of social and economic organi- in the development process is reflected in the fact zation have offered obstructions. In part, the rea- that, in countries now described as "developed," sons have been physical. Climate and topography the era of technological change and rapid eco- have imposed limits on economic growth; dis- nomic growth was preceded and accompanied by tances from centers of technological innovation other changes of great importance. These in- and capital resources, especially in the past, have cluded the evolution of new ideas concerning man, been hindrances. society and the physical world, and the evolution [9] of new political and economic institutions that of investment, the sources from which it comes, made it possible to apply capital productively and and the purposes to which it is put. The govern- share the benefits of technology among large num- ment's own share of investment in an underde- bers of people. Not only the printing press and veloped country, moreover, commonly amounts the steam engine, but the school house and the to between one-quarter and one-third of the total; joint venture corporation have their chapters in it is not only important in itself, but may have a the still unfolding story of economic development. direct effect on what enterprises are possible and The institutions that can promote economic profitable in the private sector. growth cover an extremely wide range. Among a The fact that financial and technical resources great many developments in this field, the remain- are limited in underdeveloped countries makes the der of this Chapter is confined to one: the estab- most effective use of these resources a pressing lishment, in an increasing number of underdevel- necessity. It lays on government a responsibility oped countries, of institutions to weigh government to develop its own policies and investments so that policy and guide government investment in eco- they will help to stimulate the economy as a whole nomic development. This is a comparatively new to greater productivity, increased savings and in- phenomenon. It has been selected for comment vestment and, as a result, higher living standards. because the Bank believes that, in the underdevel- This does not imply a detailed blueprinting oped countries in which much of its work is now of the economy or even of the government's role centered, organizational innovations of this kind in it. Still less does it imply close and coercive can enhance the effectiveness with which existing economic controls which are more likely to breed resources are used. new controls than new production. Nor, finally, does it justify the government's diversion of its The Place of Governmental own financial and technical resources into enter- Pro graimming Units prises for which private capital and management One of the universal findings of the Bank's are available, since that will lessen the resources missions has been that underdeveloped countries available for providing basic services and utilities have much to gain from a better direction and that generally lie outside the scope of private ini- balance of investment. The misdirection of finan- tiative. cial resources has taken many forms: the invest- But a stringency of financial and technical ment of money in commodity speculation or idle resources does mean that the government should land; the construction of factories in the absence exercise its influence consciously and consistently, of markets; the building of a few monumental rather than inadvertently and sometimes at cross- projects at the cost of more modest but more per- purposes with itself. A useful instrument in this vasive programs; the use of public funds for regard is a broad development program which purposes that private investors, given proper in- looks ahead for a period of years, sets out major centives, would have been willing to pursue; the goals in production and investment, and provides lack of foresight that has led to the building of a guide to government decisions on policy, on ap- hospitals and universities without adequate con- proximate magnitudes of public investment in cern for the availability of trained doctors, nurses different sectors of the economy, and on the choice or teachers. and timing of individual projects. The policies of government are no less im- The formulation and carrying out of a de- portant in underdeveloped countries than they are velopment program of this kind tries to satisfy elsewhere. The level of government spending, five objectives: (a) to review the total of govern- the tax structure, tariff and monetary policies, ment investment, so that it will neither unduly re- among other things, influence the total amount strict private investment nor exceed total capital re- [ 10 1 sources and so produce inflation or other unhealthy carried out and propose the allocation results; (b) to coordinate development planning of resources for the due completion of within the government, so that projects in one each stage; sector will be supported by whatever complemen- (d) to appraise from time to time the prog- tary investment is needed elsewhere; (c) to estab- ress achieved in the execution of each lish priorities among development objectives and stage of the plan and recommend the plans to insure the best and most timely use of the adjustments of policy and measures that finance, manpower and other resources available; the appraisal may show to be necessary; (d) to give encouragement by policies and spe- and cific measures to the most useful private activities; (e) to make such interim recommendations and (e) to keep fiscal and economic policies con- as appear to be appropriate on consider- sistent with the long-run objectives of economic ation of prevailing economic conditions, growth. current policies, measures and develop- ment programs. Functions In the case of Colombia, something in the An increasing number of underdeveloped nature of an approved development program ex- countries have brought some or all of these func- isted in 1951, in the form of recommendations tions together in a governmental programming made by a citizens' development committee on unit. Among the units recently established, some the basis of proposals presented by a Bank gen- with Bank advice, are a National Bank for Devel- eral survey mission in 1950. Along the lines of opment in Brazil, a National Ministry of Planning the mission's proposals, a National Planning and an Economic and Social Board in Burma, a Council was created in 1951, and began work in Planning Committee of the Cabinet in Ceylon, a April 1952. Among its functions are National Planning Council in Colombia, a Plan- (a) to study variations in the structure of ning Commission in India, a Development Board the national accounts, in order to obtain in Iraq, a National Economic Council in Nica- a continuing picture of the develop- ragua and a Planning Bureau in Surinam. ment of the economy; In the main, these units have assumed the (b) to study and coordinate investment proj- same essential duties, as a comparison of the In- ects, indicating the priority which these dian Planning Commission and the Colombian projects should have in the light of the Planning Council will suggest. At the time of its resources and needs of the country; formal establishment in 1950, the Indian Com- (c) to study the coordination of the different mission was instructed programs prepared in the government, (a) to make an assessment of the material, to avoid possible conflicts and incon- capital and human resources of the sistencies among efforts in various country, including technical personnel, fields; and and investigate the possibility of in- (d) to serve as a consultative body to the creasing resources that are found to be President of the Republic in economic deficient in relation to the nation's and financial matters. needs; One other function is commonly included in (b) to formulate a plan for the most effec- the work of programming units. The effective tive and balanced use of the country's use of resources for development embraces the resources; subject of how external assistance is to be used. (c) on a determination of priorities, to define The Nicaraguan Economic Council, the Colom- the stages in which the plan should be bian Planning Council and the Planning Com- [11] mittee in Ceylon, for instance, serve as screens in some particular sector of the economy. Gener- through which government requests for foreign ally speaking, governments have tried to achieve loans or other financial assistance to development impartiality in the planning body either by making must pass. In these and other cases, this screening it a forum in which the differing views of respon- also applies to technical assistance from abroad. sible executives can be reconciled, or by composing The Bank's general survey missions have re- it of persons who have no operating responsibili- peatedly stressed the importance of keeping the ties. In the Ceylon Planning Committee and the public informed as a means of spreading under- Nicaraguan Economic Council, for instance, the standing and enlisting the wide support vital to programming group is composed of all the minis- the success of any development program. In ters concerned with economic matters, so that all some countries, this kind of education is the may have their views represented. The Nicara- task of state ministries of information; in other guan Council's membership includes the Minister countries, it is not performed at all. In Nicaragua, of Economy (as chairman), the Ministers of Fi- where there is no ministry of information, the nance, Agriculture, and Public Works, the princi- Economic Council has established as part of its pal Secretary of the President, and the general own secretariat a small office "to bring to the managers of both the central bank and the newly attention of the public the progress of economic created Development Institute; other ministers development." participate from time to time as matters arise which directly concern them. In the case of the Organization Indian Planning Commission the members, apart The organization of programming bodies is from the chairman, have no other responsibilities not uniform among the governments that have in the Government. them, and the organizational recommendations of In any case, the programming body needs to the Bank's general survey missions have differed be supported by a secretariat competent to bring from one country to another. There has been it a balanced judgment on the separate plans of common agreement, however, on the standards the ministries and departments. kt is impossible to be met. to generalize on the size and composition of this The programming unit must be situated on staff. The secretariat of the Colombian Planning an influential level of government, and it par- Council is small, and is able to rely to a consider- ticularly must have the right, express or implicit, able extent on research and staff services of the to state its views on development expenditures central bank. The secretariat of the Indian Plan- before commitments for these expenditures are ning Commission is rather extensive and is divided accepted. Several units meet this standard by into the following sections: resource and economic having direct access to the prime minister or surveys; finance; industry; trade and communica- the chief executive of the government. The tion; food and agriculture; resource development; National Planning Council of Colombia is at- employment and social services. Several program- tached to the Office of the President, as is the Na- ming units regularly have the advice of advisory tional Economic Council of Nicaragua. The councils composed of private persons drawn from prime minister is the chairman of the Economic industrial, agricultural and trade groups. and Social Board of Burma, the Planning Com- mittee of Ceylon, the Planning Commission of SomePoints of Emphasis India and the Development Board of Iraq. A feature to be emphasized is that the basic The programming body cannot function ob- process entrusted to these units is programming, jectively if at the same time it is charged with and not planning in a detailed sense. Planning, executive responsibility for carrying out projects in terms of concrete projects and specific policies, [12] INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Supplement to the EIGHTH ANNUAL REPORT A Summary of Developments in the Bank from July 1 to September 4, 1953 MEMBERSHIP AND SUBSCRIPTION The Government of Indonesia has asked the Bank to extend from September 16, 1953 to March 16, 1954 the period during which the Republic of Indonesia may accept member- ship. The Executive Directors have recommended to the Board of Governors that the extension be granted, and have prepared a resolution to that effect for the Board's consideration at the Eighth Annual Meeting. On August 26 China paid $50,000 of the balance of $2,920,000 due on her capital subscription to the Bank. As of September 4, no payment had been made on the $625,000 due from Czechoslovakia on her capital subscription. MANAGEMENT The Executive Directors have selected Eugene R. Black as President of the Bank for a further five-year term that runs to July 1, 1959. THE BANK'S OPERATIONS Summary of Lending Since the end of the fiscal year, the Bank has made seven loans, in Brazil, Iceland, Nicaragua and the Union of South Africa, for an amount equivalent to $72,852,000. Each of the loans is described below under the appropriate country heading. In cases where a member government was not the borrower, the loans were guaranteed by the government concerned. The interest rate quoted includes the 1% commission which, under the Bank's Articles of Agreement, is allocated to the Special Reserve. The Bank has now made 85 loans, totaling $1,663,618,464, in 29 countries. Austria Bank staff members arrived in Austria during August to study the general economic situation and to discuss Austria's investment plans, particularly in the field of electric power development. Brazil On July 17 the Bank made a loan of $7,300,000 for an electric power project in the State of Minas Gerais in Brazil. The joint borrowers were the Centrais Eletricas de Minas Gerais S.A., a state-owned power comnpany, and one of its operating subsidiaries, the Companhia de Eletricidade do Alto Rio Grande. The project includes the building of a dam at Itutinga Falls on the Rio Grande, the construction of a power station with 24,000 kilowatts of generating capacity, and the erection of transmission lines and sub-statidns. Itutinga lies within the industrial complex of Rio de Janeiro, Belo Horizonte and Volta Redonda, the site of the largest steel mill in Latin America. The area conta'ns important deposits of iron ore, manganese and tin-bearing ores. Industry will take about 80% of the power to be generated at the new plant and the remainder will be taken by public utilities serving three small towns. The loan is for a term of 20 years and bears interest at the rate of 5% per annum. Amortization will begin on January 15, 1957. British Guiana In mid-August the Bank transmitted to the Governor of British Guiana the report of the general survey mission which visited the colony in February and March 1953. The mission recommended a program aimed at increasing national income by 20% and income per head by 6% over the next five years. The program calls for government expenditures of 66 million British West Indies dollars (U.S. $38.5 million) over the five years 1954-58, and the mission believes that most of this inxvestment can be financed internally. About 70% of the investment is recommended for agriculture, transportation and communications, and the remainder for forestry, industrial credits, electric power, housing, surveys and various public works. Because agriculture is the chief economic activity in British Guiana, the largest investment is recommended in this field. The mission believes that the best way to increase and diversify production is to extend and improve small-scale farming. Recommendations are made for opening new lands for this development, as well as for programs of land settlement and tenure, for agricultural credit, and for improved processing and marketing and research and extension services. Improvements in transport and communications come next to agriculture in importance. The mission's recommendations in this field deal first with a greatly improved road system as the most urgent need. Other recommendations cover re- habilitation of the railways, improvement of coastal ferry and shipping services, telecommunications, and internal air and postal services. The mission recommends that the Government make an inventory of British Guiana's extensive forest resources and formulate a program to assist the timber industry to improve and modernize its operations. The aim of the program would be to increase the supplies of wood for domestic needs and to intensify production for export, especially in species of wood not now well known in world trade. The report also contains proposals for expanding existing industries and estab- lishing new industries; for housing and schools; and for continued geologic, hydro- graphic, aerial and soil surveys. The mission also makes recommendations regarding the institutions to plan and carry out the proposed program. British West Africa Nigeria At the request of the Governments of Nigeria and the United Kingdom, the Bank is sending a general survey mission to Nigeria to study the econornicproblems of the country and to assist in the preparation of a development program. The mission will leave for Nigeria in mid-September and expects to remain there for about two and a half months. Ceylon Bank staff members arrived in. Ceylon during August to study the economic situation and prospects, and to obtain additional information on the Aberdeen-Laksapana hydroelectric project submitted for Bank consideration in June. Ecuador A Bank mission arrived in Quito on September 1. The group will examine Ecuador's economic and financial situation and study the Government' s development plans with particular reference to transportation and agriculture. It will also study the technical and financial feasibility of various specific projects which have been submitted to the Bank for its priority consideration. Iceland On September 4 the Bank made two loans in European currencies to the Iceland Bank of Development. One, in various currencies equivalent to $ 1,350,000,was for agricultural development; the other, of £90,000 ($252,000),was for the construction of a building to house radio equipment serving North Atlantic air traffic. Iceland began a program of agricultural development in 1951. It aims to increase farm production 50% by 1965, and should improve Iceland's foreign-exchange position considerably through import savings and export earnings. A Bank loan equivalent to $1,008,000 in European currencies, made in 1951, helped pay for imports needed for the program during 1952. The new loan will finance imported equipment and materials needed for the period July 1953 through 1954. The loan will help to expand grasslands for grazing, to build farm structures to house sheep and cattle, and to build farm dwellings. The loan is for a term of 22 years and bears interest of 5% per annum. Amortization will begin on September 1, 1958. The second loan, of £ 90,000, will pay for the construction of a building to house some of the radio equipment operated by the Icelandic Post and Telegraph Administration for civilian aircraft flying over the North Atlantic. The equipment is at present sheltered in an inadequate temporary structure and a new building is needed to assure the con- tinuance of adequate and reliable service. Under an arrangenient administered by the International Civil Aviation Organization (ICAO), the cost of the service is paid from contributions by eleven countries, including Iceland, whose airlines operate over the North Atlantic. ICAO has arranged for in- creased contributions from these countries to assure sufficient revenue to service the Bank's loan. Maintenance of the radio service will help Iceland to continue earnings of foreign exchange from international aviation, and will be of benefit to the airlines of the participating countries. The loan is for a term of 12 years and bears interest of 4-3/4% per annum. Amortization will begin July 15, 1954. Lebanon A Bank expert visited Lebanon in August and submitted to the Government proposals for the establishment of an industrial development bank and for mobilizing local funds for its capital. Mexico Since the end of the fiscal year, discussions have been taking place between Mexican officials and the Mexican Light and Power Company with a view to providing increased revenues and financing to enable the Company to carry on its expansion program. Netherlands On July 15 repayment was completed, five years before final maturity, of six loans made by the Bank in 1948 to four Netherlands shipping companies: Royal Rotterdam Lloyd, Nederland Line, Holland-America Line, and United Netherlands Navigation Company. The loans totaled $12 million, were sold by the Bank with its guarantee in 1948 and 1949, and at the time of final repayment, were held by banks in the United States and elsewhere. Nicaragua On September 4 the Bank made two loans to Nicaragua: $3,500,000 for highway construction and $450,000 for a new electric power unit in Managua. Construction of roads is needed to open new lands to cultivation and to provide adequate transport between farm and market. Nicaragua is carrying through a program for the construction of a network of main highways and feeder roads. In 1951 the Bank made a $3.5 million loan for the construction of 162 miles of main highways, and work on this part of the program is already well advanced. The new loan will be used for the construction of 25 miles of main and 430 miles of secondary roads. When this program is completed the cost of truck transportation should be reduced, commerce of all kinds should be stimulated, and farm production greatly increased. The loan is for a term of 10 years and bears interest of 4-3/4% per annum. Amortization will begin on March 15, 1957. The second loan made in September was for the import of a 3,000 kilowatt diesel power unit to ease the power shortage in the area of Managua, the capital. Although another 3,000 kilowatt unit was added to generating capacity in Managua early in 1953, the power supply in this area is still seriously inadequate. The loan is for a term of 10 years and bears interest at 4-3/4% per annum. Amortization will begin on March 15, 1955. Pakistan A Bank mission visited Pakistan in July-August 1953. The mission reviewed Pakistan's economic and financial position, examined the Government's development program and discussed several development projects. In July, the Bank's Director of Marketing visited Pakistan to advise the Government on the development of a market for Government bonds. Philippines In July the Bank's Director of Marketing paid a second visit to the Philippines to discuss the development of a market for Governrnent bonds. Union of South Africa On August 28 the Bank made two loans to help finance programs being carried forward in the Union to meet needs for expanded transportation service and increased supplies of power. One loan, of $30,000,000, was made to the Union Government to help pay for imports of equipment and goods needed to enlarge the carrying capacity and extend the services of the railways. The other loan, also of $30,000,000, was made to the Electricity Supply Comrmission (ESCOM). an autonomous state corporation, to pay for part of the imports needed in a program de signed to increase ESCOM' s power- generating capacity by 80% during the period from 1952 through 1958. The rapid growth of industry and mining in the postwar years has put a heavy strain on public services in the Union, and especially on the railway system and the power supply. The tonnage carried by the railways has increased by one-third since 1947, and ESCOM's sales of electric power have grown even more. In 1951 the Bank lent the Union Government $20 million for imports needed during two years of the railway expansion program. The new loan will help to finance imports needed from mid-1953 to mid-1956 and will be applied principally to the purchase of locomotives, freight cars and rails. ESCOM is engaged in a construction program which by 1958 is intended to add 1.4 million kilowatts of generating capacity to existing capacity of 1.6 million. A Bank loan of $30 million, also made in 1951, helped to finance imports for this program over a two-year period. The latest loan will help to finance imported equipment needed for the continuation of this program and will be applied particularly to the purchase of turbo-generators, boilers, structural materials and electrical supplies. Both loans are for a term of 10 years and bear interest of 4-3/'4% per annum. Amortization on the ESCOM loan will begin on September 15, 1955, and on the railroad loan on November 15, 1955. FINANCIAL ACTIVITIES AND RESOURCES Sales of Bonds from the Bank's Portfolio Since the end of the fiscal year, the Bank sold the equivalent of $5,964,698 principal amount of borrowers' obligations. Of this amount, $3,711,698 were sold with, and $2,253,000 without, the Bank's guarantee. These sales brought the total of bonds sold from the Bank's portfolio to $75,979,352. Of this total, $53,514,844 have been sold with, and $22,464,508 without, the Bank's guarantee. In addition two institutions in the United States agreed to participate, without guarantee, in one of the Bank's loans to the extent of $997,000 as soon as the loan becomes effective. remains the work of other ministries and agencies. It is implicit in the functions of the program- The programming unit stimulates planning and ming body that it provides a prod to action. In fact-gathering where they need to be done; it views the past, some governments have made the mis- plans and policies objectively, measuring them take of supposing that they had fulfilled their re- against one another and against the resources sponsibility by drawing up a program, and have available; and it recommends whatever modifica- left promising plans to exist only on paper. But tions of substance and timing are necessary to programs are not a substitute for action; and the bring them together into a coherent whole. existence of a programming unit empowered to The Bank's general survey missions have fre- review and to report to those in final authority quently stressed that it is an important task of can do much to see that plans are put into effect. these units to keep informed of progress, and to It is also obvious that the establishment of recommend changes that may be reauired by cir- a programming institution is not in itself a pana- 11:1 cea. Little purpose can be served by this cumstance. While the goals themselves may stand, il type of body unless a favorable climate is provided stand, it iS only realistic tO anticipate that they by aprpit ficladmntayplce. n may be advanced or deferred by events impossible by appropriate fiscal and monetary polscies and to frese. Th timng ad amunt f inest- by other steps to expand investment resources and to foresee. The timing and amount of invest- toserhminoheotpodcveoue. to steer them into the most productive courses. ment may be influenced by unexpected difficulties Nevertheless, in any community where resources in the construction of a basic project, by unex- are limited and the calls upon them are particu- pectedly rapid development in some sectors, by larly urgent, a programming institution can help changes of price levels and costs, by fluctuations to lift development projects out of the arena in the amount of local and foreign capital avail- of day-to-day stringencies and short-term needs. able, and by many other factors. Any long-term It can also bring more clearly into view, at a time development program therefore needs to be kept when self-denial will inevitably be called for, the continuously under review and to be subjected to gains to be won by steady pursuit of basic eco- periodic modification. nomic improvements. [131 Chapter II-The Bank's Operations This section is a country-by-country descrip- member government concerned. The interest tion of the operations of the Bank in the past fiscal rates shown include the 1 % commission which, year. For each country in which the Bank was under the Bank's Articles of Agreement, is allo- active, information is given on one or more of the cated to the Bank's Special Reserve. Additional following topics: loans made; negotiations and details, such as maturity dates of loans, amounts surveys looking to possible loans; reports of prog- disbursed and repayments of capital, are shown in ress on Bank-financed projects; and technical as- a tabular summary of loans in Appendix F, be- sistance. A note is also made of completely dis- ginning on page 54. bursed loans more fully described in previous An- Loans made during the fiscal year brought nual Reports. the total of the Bank's lending to $1,591 million Preceding the account of operations in each ($1,560 million net of $31 million of cancella- country is a list by fiscal year of all loans made in tions and refundings). The table on the follow- that country. Unless otherwise indicated, loans ing page classifies this total according to the have been made to member governments; loans purpose and regional distribution of loans. to other borrowers have the guarantee of the ASIA AND THE MIDDLE EAST President's Visit to the Middle East and field studies were undertaken during the second Turkey half of that year. The engineers of the two In February and March 1953 the President of countries, together with engineers of the Bank, the Bank spent seven weeks visiting Egypt, Ethio- met for a week in Karachi during December 1952 pia, Iraq, Jordan, Lebanon, Syria and Turkey, and to exchange information obtained from these discussed their problems of economic develop- studies. They spent the following six weeks visit- ment. ing irrigation works, dam sites and irrigated and Indus River System unirrigated areas in India and Pakistan. In Janu- ary 1953 they exchanged information in Delhi on In 1952 the Governments of India and other studies completed in the meantime. They Pakistan, acting on an invitation from the Presi- then agreed to meet again on September 1, 1953 dent of the Bank, began to study jointly the pos- in Washington to begin the preparation of a com- sible technical measures to increase the supplies prehensive plan for the development of the Indus of water available from the Indus river system. basin, including preliminary cost estimates and a Indian, Pakistani and Bank engineers held discus- construction schedule for the new engineering sions in Washington in May and June 1952, and works involved. ASIA Burma tion and to discuss the Government's develop- ment plans. The mission spent four weeks in the A fact-finding mission went to Burma in country consulting with Government officials and 1953 to review the economic and financial situa- visiting important production areas. [ 14] Bank Loans Classified by Purpose and Area As of June 30, 1953 (In millions of United States dollars, net of cancellations and refundings) Area Purpose Total Asia & Western Middle Austra- Hemni- East Africa lasia Europe sphere GRAND TOTAL ...... 1,560 187 132 150 734 357 RECONSTRUCTION LOANS TOTAL (France, The Netherlands, Den- mark, Luxembourg) ................. 497 - - 497 - OTHER LOANS TOTAL .............................. 1,063 187 132 150 237 357 ELECTRIC POWER (Machinery, equip- ment and construction materials). .. . 404 28 58 30 35 253 TRANSPORTATION ....... ........... 242 72 34 39 35 62 Railroads: locomotives, rolling stock, rails, shop and station equipment. . 150 63 31 16 3 37 Shipping: vessels and marine equip- ment ........................... 12 - - - 12 - Airlines: planes and equipment ...... 14 - 7 7 - Roads: building machinery and equip- ment ........................... 46 5 2 16 - 23 Ports: docks, loading and dredging machinery and harbor craft ....... 20 4 1 - 13 2 COMMUNICATIONS (Telephone and tele- graph equipment and supplies) ...... 26 2 - - - 24 AGRICULTURE AND FORESTRY ........ 150 51 - 54 28 17 Mechanization: general farm machin- ery and equipment ............... 59 - - 44 2 13 Irrigation and flood control: construc- tion equipment and materials ... . 60 41 - 5 13 1 Land improvement: machinery, con- struction equipment and materials. . 19 10 - 5 2 2 Grain storage: construction materials. 5 - - - 4 1 Timber production: machinery and vehicles.. 7 - - - 7 - INDUSTRY .......................... 149 32 - 27 90 - Manufacturing machinery .......... 126 32 - 20 74 - Mining equipment ................. 23 - - 7 16 - GENERAL DEVELOPMENT ............. 92 2 40 - 49 1 Development banks ................ 12 2 - - 9 1 General development plans ......... 80 - 40 - 40 - 1 15 ] Ceylon concerned, will coordinate the preparation and In July 1952 the Bank transmitted to the execution of all development projects. Government the report of the general survey mis- The Government is also considering the es- sion which visited Ceylon late in 1951. Ceylon's tablishment of a technicaL research institute as chief task, in the opinion of the mission, is to ex- recommended by the mission. Two Bank officials pand and diversify its economy so that productiv- visited Ceylon in November 1952 to discuss the ity can keep pace with population growth. The feasibility of establishing this institute with the report stated that resources in land, materials and elp of the Bank and the United Nations Tech- money are sufficient, if wisely managed, to meet nical Assistance Administration. the needs of the growing population, to improve Discussions between the Bank and Govern- the standard of living, and to strengthen the econ- ment representatives on ways of financing a part omy. of the Aberdeen-Laksapana hydroelectric project The mission recommended a six-year pro- began in Washington in June 1953; they will be gram of development, and gave priority to an in- resumed in Ceylon in August 1953. crease in agricultural production. The report em- phasized the need for improvement of agricul- India tural techniques and for putting new lands under Fiscal $34 million 15-year 4% loan of August 1950: 18, 1949 for railway rehabilitation; cultivation through irrigation, jungle clearance reduced at request of borrower on and settlement. It pointed out that the substan- May 16, 1950 to $32.8 million, which tial investments proposed for electric power, in- had been disbursed by March 1951. t-a investments proposed for electric power, in- $10 million 7-vear f1/2% loan of Septem- dustry and the improvement of transport should ber 29, 1949 for importation of agri- also lead to higher output from the land. It also cultural machinery; reduced to S8.5 stressed the need for surveys in many sectors-in million on July 27, 1951 and to $7.5 million on August 25, 1952 at request particular, water and irrigation, electric power, of borrower. land use, soils and forests-and urged that, until $18.5 million 20-year 4%, loan of April these studies are completed, new large-scale 18, 1950 for power development schemes be deferred in favor of a greater number project. a) Fiscal ,$31.5 million 15-year 431,4% loan of De- of smaller projects. 1953: cember 18., 1952 to the Indian Tron . . ~~~~~~and Steel Comnpany, Limited, for ex- In the field of industry, the mission recom- pan of ronpand steel proutn ; ~~~~~~~~~~~~~~~~~pansion ofr iron and steel production mended that the foundations for industrial growth facilities. be laid by research and education, and by fostering $19.5 million 25-vear 47/8S% loan of Tanu- ary 23, 1953 for electric powver devei- a variety of new industries that would not ndi- opment, dood control and irrigation. vidually involve heavy investment. The report The loan to the Indian Iron and teel Coi- stressed the need for improvemenlts in public pan loCn mate InoDcebe 1952 and t ~~ ~~~~~~ ~~pany (IISCO)), made in DecembDer 1952 and health and education, with emphasis in the field amounting to $31.5 million, resulted from rec- of health concentrated for the present more on ommendations made bv a Bank mission that went preventive than on curative measures. to India under the leadership of the Chairman of The Government is preparing a six-year plan The First Boston Corporation to examine means of development starting in 1953-54 which will of increasing iron and steel production. Al- take into account the recommendations of the mis- though the proceeds of other loans have been paid sion. For this purpose, a Planning Committee of through intermediate aoencies to private manu- the Cabinet, assisted by a Planning Secretariat, has facturers, this is the Bank's first loan in the manu- been established. The Committee, which includes facturing field to be made diarectly to a private the Prime Minister and other ministers directly concern. It will be used to finance imported equip- [163 ment and services which IISCO needs to carry out 1953 season about 240,000 acres were reclaimed, a five-year project to increase its annual productive making a total of nearly three-quarters of a mil- capacity from 350,000 tons to 700,000 tons of lion acres since the start of the project. The work finished steel, and from 160,000 to 400,000 tons is being carried out by the Government's Central of iron for sale to foundries. When this project Tractor Organization. In the past year the Or- is completed, India's finished steel capacity will be ganization has further improved its operating effi- about one-third higher than in 1952, and her ciency and has made good progress in overcoming foundry iron capacity will be doubled. difficulties in ensuring proper maintenance of One of the Bank's engineers visited India in equipment. However, the obstacle still exists that February and March 1953 to recommend, jointly some states have not yet made available large with two experts appointed by the Government, compact blocks of land suitable for reclamation. further steps to expand iron and steel production. This has considerably raised the cost of the op- Expansion in this field is an essential element in eration. the five-year plan for economic development. The Bank is studying an application for a The Bank's $19.5 million loan of January loan to the power companies in the Tata group 1953 is for key projects in the plan for the de- for the construction of a thermal-electric gener- velopment of the Damodar River Valley, an im- ating plant on Trombay Island near Bombay. portant agricultural and industrial area west of Calcutta. This loan will help to finance the con- Japan struction of two storage dams, two hydroelectric Japan became a member of the Bank in plants, and a barrage and irrigation system. The August 1952. A mission spent two months there hydroelectric plants will have a combined capacity in the later part of the year, being joined for a of 100,000 kilowatts. The irrigation system will time by the Vice President of the Bank. The supply water to a million acres and should make it mission made a general appraisal of the Japanese possible to increase the production of food grains economy, and collected information bearing on by 400,000 tons a year. Japan's economic prospects and her capacity to The Bank had already made in 1950 a loan service foreign debt. It also surveyed industrial of $18.5 million for the development of the and agricultural production and the problems of Darnodar River Valley. This loan is helping to economic development, and reviewed investment finance the construction of a steam power plant requirements in various fields. at Bokaro, a stcrage dam at Konar and a system In June 1953 discussions were begun with of transmission lines. The Bokaro plant was the Government on the financing of electric power formally opened by the Prime Minister in Febru- development. The Bank is studying an applica- ary' 1953. The first of the three 50,000-kilowatt tion for a loan to finance tfe foreign-exchange generating units started operation in that month, costs of constructing three thermal generating sta- and the plant should be in full operation by Sap- tions. The st-ations, which would have a total ca- tember 1953. The Konar dam is nearly com- pacity of nearly 300,000 kilowatts, would be lo- pleted, and it is expected that the transmission cated at Osaka, Karita and Yokkaichi. T hey system will be finished early in 1954. would be primarily for the purpose of supplying The $10 million loan of September 1949 is additional power to supplement hydroelectric sup- being used to pay for heavy tractors imported to plies in dry weather; in other periods they would reclaim land in central India. With these tractors take the place of less efficient thermal units. land is being cleared of kans grass, a deep-rooted These plants are part of the Government's weed which cannot be extirpated by the traditional program for reducing industrial costs through the plowing methods of the region. In the 1952- modernization of equipment. Japan has also [ 17 ] asked the Bank to consider collaborating in cer- The $4.4 million port development loan is tain hydroelectric power projects. being used mainly to meet the foreign-exchange cost of a dredging contract to assist in the deep- Malaya and Singapore ening of a channel through the sandbar at the Two members of the Bank staff visited Ma- mouth of the Chao Phya River and thus open the laya and Singapore in April 1953 to discuss the port of Bangkok to regular traffic of vessels of up desirability, possible terms of reference and com- to 10,000 tons. The loan is also being used to position of a general survey mission to the area. finance cargo-handling equipment at the port The Bank subsequently agreed to organize a mis- terminal, and navigational aids in port waters. sion to study the economy of the area and to make Various difficulties in the execution of the dredg- recommendations to assist the two governments ing program have been encountered; moreover, in planning further economic development. The an exceptional typhoon in October 1952 filled up mission is expected to begin its survey in January part of the channel already dredged. The Bank 1954. has advised the Government on the steps neces- sary for the completion of the channel before the Philippines end of 1953 or early 1954, and for its subse- quent maintenance. Nearly half of the loan has In December 1952 the Bank's Director of been disbursed. Marketing visited the Philippines for two weeks With the encouragement of the Bank, the to advise the Government on the development Board of the Port Authority was recently recon- stituted and strengthened as a first step towards Thailad .increasing its administrative and operating effi- ciency. The Bank has been asked to find an ex- Fiscal $3 million 15-year 33/496 loan of October pert to assist in reorganizing the Port Authority, 1951: 27, 1950 for railway rehabilitation. and a qualified administrator to work with the $18 million 20-year 4% loan of October Port Authority. 27, 1950 for irrigation project. $4.4 million 15-year 33/4% loan of Octo- The $3 million railway loan is being applied ber 27, 1950 for port development, to the reconstruction and re-equipment of the Progress has been made on the Chainat bar- Makkasan railway workshops near Bangkok, and rage and the related system of irrigation canals to the purchase of signalling equipment. There and regulating structures forming part of the Chao were considerable initial delays in determining Phya irrigation project, toward the cost of which the layout of the workshops and the types of the Bank lent $18 million in 1950. Excavation for the barrage is under way, while excavation equipment required. But all orders have now for the navigation lock is almost completed and been placed for imported goods, and deliveries are being made at the site. Construction and concrete-laying has begun. Though delays in de- eqipnarnogigfrwdstsacrly liveries of equipment have caused work to fall equipping are now going forward satisfactorily, behind schedule, it is expected that the whole and the workshops are likely to be completed in project will be completed as originally planned by the second half of 1954. The signalling equip- the end of 1958. More than two-thirds of the ment is arriving in Thailand and some has already Bank's loan has already been disbursed. Com- been installed at stations. Nearly half of the loan pletion of the project will give an assured water has been disbursed. supply to 21/4 million acres, and should increase A Bank mission spent two months in Thai- the production of rice in this area by approxi- land in the early part of 1953. It inspected the mately 800,000 tons annually. three Bank-financed projects and assisted the Gov- I 18 1 ernment in solving some problems which had and further railway development, and a power arisen in their execution. It also discussed various project with irrigation possibilities at Yan Hee on development schemes suggested by the Govern- the Ping River, in northern Thailand. These ment. Among these were programs for highway projects are now being studied by the Bank. THE MIDDLE EAST Egypt projects, mostly for the processing of agricultural The Bank sent an engineering consultant to products. Agricultural loans made by the De- Egypt in December 1952 to make a brief review velopment Bank have been mainly in Ethiopian of the position of the railways and their needs. dollars. Consideration of his findings has been suspended The Bank's $1.5 million loan for the expan- while the Government has been revising the de- sion of telephone and international radio com- velopment programs and priorities. In January munications is not yet effective. The project has 1953 the Government gave the Bank general in- been slow in getting under way because of diffi- formation on a revised scheme for the develop- culties in organizing the Imperial Board of Tele- ment of the Nile valley, with particular emphasis communications, the agency established by the on a high dam above Aswan to provide irrigation Government to carry out the project. The charter and hydroelectric power. Detailed studies will be of the Board was promulgated in October 1952; sent to the Bank when completed. the Board's new General Manager assumed his post in the following month; and steps are now Ethiopia being taken by the Board to fulfill the remaining .. .. ~~~~~~~~~~conditions for making- the loan effective. Fiscal $5 million 20-year 4% loan of September 1951: 13, 1950 for rehabilitation of roads. $2 million 20-year 4% loan of September Iraq 13, 1950 for Development Bank. $1.5 million 20-year 4% loan of Febru- Fiscal $12.8 million 15-year 3o% loan of June ary 19, 1951 for rehabilitation and de- 950: 15, 1950 for food control. velopment of telecommunications. A staff member visited Iraq in February Disbursements are almost complete on the 1953 to examine the progress of the flood-control Bank's $5 million loan used to finance the for- project being carried out with the help of the eign-exchange cost of road-building equipment, Bank's loan. The project is designed to protect materials and services. About half of the coun- Baghdad and the surrounding agricultural area try's system of main roads has been reconstructed against periodic floods of the Tigris River by con- during the past two years. The three-year pro- structing a barrage and canal to divert flood waters gram of road reconstruction and maintenance is into a large uninhabited depression northwest of scheduled to be finished by February 1954; a road Baghdad known as the Wadi Tharthar. Work maintenance program will be continued there- on the canal, begun late in 1951, is proceeding after. steadily. In February 1953 the contract for the The Bank has disbursed $0.7 million of its construction of the barrage at Samarra was $2 million loan to provide foreign exchange to the awarded to a German firm. Ethiopian Development Bank. Since starting op- In March 1953 Bank representatives dis- erations in May 1951 the Development Bank has cussed with the Government and the Iraqi De- made agricultural and industrial loans amounting velopment Board steps that are being taken to im- to Eth. $4.6 million (equivalent to U. S. $1.8 plement the recommendations of the Bank's gen- million). Foreign exchange from the Interna- eral survey mission. Further discussions will be tional Bank's loan has been applied to industrial held in August 1953. [19] Jordan Operation and maintenance of the locomotives . . ~~~~~~have been satisf actory and the introduction of In response to a joint request by the Govern- . . ments of Jordan and Syria, a refinery specialist diesel traction has led to considerable fuel econ- was engaged by the Bank to study the economic omy and saving in foreign exchange. The loan implications and investment requirements of the is being disbursed partly in U. S. dollars and construction of an oilrefinerytomeetthenees partly in francs released from the French sub- construction of an oil refinery to meet the needs scripton to the Bank's capital. either of Jordan and Syria together or of one of phe Governte nBnks negotat h these countries alone. His report was presented The Government is negotiating with the to the Government in May 1953. Bank for a loan to finance a portion of the for- In March 1953 Bank representatives dis- eign-exchange costs of constructing an integrated cussed with the Government various development pulp and paper mill in East Pakistan. A Bank plans. mission will visit Pakistan in July 1953 to review developments in Pakistan's economic and finan- Lebanon cial position and to examine the Government's Early in 1953 a Bank representative studied development program. The Bank's Director of the desirability of establishing an industrial de- Marketing will also visit the country at that time velopment bank in Lebanon, and in May 1953 his to advise the Government and the business com- munit on measures to strengthen the capital report was submitted to the Government. An makt.g expert will visit Lebanon in August 1953 to assist market. the Government in establishing the development Syria bank and in mobilizing local capital. During the second half of 1952, Bank rep- Pakistan resentatives and Government officials held discus- sions in Damascus on the technical and financial Fiscal $27.2 million 15-year 48o8% loan of March 1952: 27, 1952 for railway rehabilitation. aspects of projects for developing the port of $3.25 million 7-year 4Yg% loan of June Latakia and for constructing roads. These dis- 13, 1952 for agricultural machinery. cussions will be resumed at an early date. The Bank's $3.25 million loan is to finance In response to a joint request by the Govern- imports of tractors and other machinery needed in ments of Syria and Jordan, a refinery specialist a project for clearing, plowing, seeding and con- ZD~~ was engaged by the Bank to study the eco- structing watercourses on 660,000 acres of the nomic implications and investment requirements Thal area in Punjab Province. The loan has not of the construction of an oil refinery to meet the yet been made effective because some of the key needs either of Syria and Jordan together or of one personnel needed to carry out the project have of these countries alone. His report was pre- yet to be engaged. In the meantime, most of the equipment has been ordered and some of it ha sented to the Government in May 1953. arrived at the site. The Bank also provided technical experts to Orders have been placed for most of the study a project for a railway between Aleppo and equipment being financed by the Bank's $27.2 Latakia and an irrigation and electric-power proj- million loan of March 1952 for a program to im- ect at Youssef Pasha on the Euphrates River. prove and modernize the railways in East and In June 1953 the Bank was asked to or- West Pakistan. Twenty-three new diesel electric ganize a general survey mission to study the coun- locomotives have been operating on the main line try's economy and make recommendations for of the North Western Railway for a year or more. further development. [20] EUROPE, AFRICA AND AUSTRALASIA AFRICA Belgian Congo mission to carry out a survey of the economic Fiscal $40 million 25-year 41/2% loan of Sep- problems of the country and to help in the prep- 1952: tember 13, 1951 to the Belgian Congo aration of a development program. If a formal for development plan. Made simul- taneously with loan of $30 million to request for a survey is received, a mission is ex- Belgium (see page 23). pected to leave for Nigeria in the latter part of Like the $30 million loan simultaneously 1953. made to Belgium, the $40 million loan of Septem- A member of the staff also visited the Gold ber 1951 is supporting the Ten Year Develop- Coast to study the economic conditions and prob- ment Plan started in the Congo in 1950. Public lems of the area. investment under the Plan is now expected to reach the equivalent of about $800 million, to French Overseas Departments and be devoted to the expansion of public services, Territories mainly in the field of transport. Withdrawals After preparatory discussions held in Paris, under the loan are not related to specific imports a mission visited French West Africa in May and but are geared to the rate of public investment. June 1953 to study economic conditions and de- Good progress is being made with the Plan. velopment problems. It examined in particular The value of investment goods imported in 1952 the diesel traction program of the West African accounted for nearly half the Congo's total im- railroads. A staff member also spent a few days ports and was 50%o higher than in the preceding in Algeria in June 1953 for exploratory talks year. But the pace of public investment has not with Government officials. been so rapid as was originally expected. Over half of the loan has been disbursed. Fiscal $14 million 19-year 4344% loan of March British East Africa 1953: 11, 1953 to the Territory of Northern Rhodesia for railway development. A mission visited British East Africa toward The Rhodesia Railways serve the needs of the end of 1952 and studied the economic prob- Northern Rhodesia, Southern Rhodesia and lems of Kenya, Uganda and Tanganyika. It dis- Bechuanaland, and the $14 million loan made in cussed with the Governments, with the East Africa March 1953 in support of the railway expansion High Commission and with the Government of program will therefore benefit all three terri- the United Kingdom, various projects which might tories. Although the Bank's loan was in fact prove suitable for Bank financing. In par- made to the Northern Rhodesian Government, ticular, it studied a railway and harbor develop- the responsibility for the execution of the pro- ment program considered specially important to gram is shared by Northern and Southern Rho- the further economic progress of East Africa, and desia, and both Governments have undertaken to for which external financing may be required at see that it is carried out. The United Kingdom, a later date. of which Northern Rhodesia is a dependency, has guaranteed the loan. British West Africa Owing to the exceptionally rapid develop- Bank representatives went to Nigeria in May ment of the areas which they serve, the Rhodesia 1953 and examined the desirability of sending a Railways have been heavily overburdened since [21] the war. In 1952 the tonnage carried was more Kingdom, and about one-third of the loan has than 70% greater than in 1946. The difficulties been disbursed. In the meantime, Southern Rho- which have been encountered in handling this in- desia's economic development continues to be crease have, for example, led to the accumulation rapid, and the demands for both electric power of large stockpiles of chrome ore awaiting ship- and railway services continue to exceed the ability ment. to meet them. Measures being taken to improve the rail- In March 1953 the Bank made a loan to way system include the purchase of locomotives Northern Rhodesia for the expansion of the rail- and rolling stock, the improvement of permanent ways serving both the Rhodesias. At the same, way, the enlargement of yards and sidings, and time, it entered into a subsidiary agreement with the extension of repair shops. A new line is being both Northern and Southern Rhodesia regarding constructed from Bannockburn in Southern Rho- the financing and carrying out of the railway desia to the border of Portuguese East Africa, to project. This loan, like that for power develop- relieve the pressure on the port of Beira in Portu- ment, was guaranteed by the United Kingdom. guese East Africa, hitherto the chief outlet of the landlocked territories served by the Rhodesia Rail- Union of South Africa ways. The new line will connect with a line Fiscal $30 million 20-year 4% loan of January being built by the Portuguese Government to the 1951: 23, 1951 to the Electricity Supply port of Lourenco Marques. Commission for power development. The Rhodesia Railways program of expan- $20 million 15-year 3Y49% loan of Janu- ary 23, 1951 for expansion of trans- sion and improvement is expected to cost the portation facilities. Fully disbursed by equivalent of $79 million during the three years March 1953. endingMarch1955. Althoughmostofthegoods The Bank's two loans to South Africa, to- purchased with Bank finance will come from the taling $50 million, are directed toward keeping United Kingdom, the loan will be in dollars. the expansion of basic facilities abreast of the Southern Rhodesia country's economic growth. The sum lent in- cludes a $30 million loan to the Electricity Sup- Fiscal $28 million 25-year 43/4% loan of Febru- ply Commission, which provides about three- 1952: ary 27, 1952 to the Colony of South- ern Rhodesia for power development. quarters of the Union's power consumption. This The Bank's loan is helping to finance im- loan is to be spent on a wide range of imported ports of equipment and materials required in a electrical equipment; approximately $25 million program to expand the supply of electric power. of it has been disbursed. The other loan put $20 This program is part of Southern Rhodesia's gen- million at the disposal of the Union's transport eral plan for economic development during the expansion program. Disbursements under this four years ending in March 1955. Power fa- loan were completed by March 1953. Carrying cilities are to be increased by the installation of out of the program has been slowed down, how- about 230,000 kilowatts of new thermal gener- ever, by delays in receiving equipment from Ger- ating capacity, the erection of some 2,000 miles of many and the United Kingdom, and by the short- transmission lines, and the installation of addi- age of skilled labor. tional distributing equipment. Since these two loans were made, the speed The projects financed by the loan are pro- of economic development in South Africa has gressing approximately on schedule. Most of the been such that the power plants and transport sys- imports needed are being supplied from the United tem are still unable to meet all the demands upon [22 1 them. The Bank therefore agreed to send a mis- second mission arrived in South Africa in June sion to South Africa late in 1952 to study the 1953 to study railway and power service expan- economic situation and to examine the Govern- sion programs which might be suitable for financ- ment's plan for additional public investment. A ing by the Bank. AUSTRALASIA Australia projects of the Commonwealth and State authori- Fiscal $100 million 25-year 41/4% loan of Au- ties, much has been used on machinery and equip- 1951: gust 22, 1950 for development pro- ment imports needed by farmers and private busi- gram. nesses. All of the imports for private use have Fiscal $50 million 20-year 43/4% loan of July 8, be itiue hog omlcmeca 1953: 1952 for development program. been distributed through normal commercial In July 1952 a $50 million loan was made channels. to give further assistance to Australia's economic During July and August 1952 a Bank mis- development. The programs to benefit from this sion visited Australia to examine the progress of loan have all been chosen because they play a some of the projects for which dollar funds were basic part in the country's economy, and in its made available under the $100 million loan. balanced development. About one-third of the Early in 1953 two of the Bank's agricultural spe- loan will aid agriculture, and half of it will be cialists went to Australia to study farm production used for coal mining, the iron and steel industry, and the effects of Bank-financed equipment on railways, road transport and electric power. A agricultural development. This mission also small part is allocated to manufacturing industries studied Australia's farm production targets and related to such basic activities as agriculture, the prospects for marketing farm products. It transportation, construction and power. About found that most of the deficiencies in materials $11 million of the loan has been disbursed. and equipment, which had hampered the expan- The first development loan of $100 million sion of agriculture since the end of the war, had was made in August 1950 and has now been very been successfully overcome. Output of cereals, largely disbursed. While some of it has been milk and meat is expected to benefit considerably spent on imported capital goods for investment from the use of Bank-financed equipment. EUROPE Belgium not related to specific imports but are geared to Fiscal $16 million 20-year 4¼ 4% loan of March the rate of public investment achieved in the 1949: 1, 1949 for steel plants and electric Ten Year Development Plan for the Congo. power. The tin-plate mill, the blooming mill and Fiscal $30 million 25-year 412% loan of Sep- the thermal power plant financed by the $16 mil- 1952: tember 13, 1951 for development of lion loan of 1949 are in full operation. An the Belgian Congo. Made simultane- ously with loan of $40 million to the amount of $1.8 million originally allocated for Belgian Congo (see page 21). the construction of the power plant and not More than half of the $30 million loan of needed for that purpose, is being devoted to the September 1951 has now been disbursed. This purchase of a continuous hot strip mill by the loan was made to help to offset the pressure on owners of the completed blooming mill. In June the Belgian foreign-exchange position resulting 1953 Belgium repurchased and cancelled before from Belgium's contribution to the development maturity bonds to the value of $5 00,000 from this of the Congo. Withdrawals under the loan are loan. t 23 1 Denmark pulp over the fiscal year has created difficul- Fiscal $40 million 25-year 441o loan of August ties. To aid Finland in adapting her economy to 1948: 22, 1947 for reconstruction. Fully this situation, the Bank has agreed to various disbursed by March 1949. changes in the projects it is financing in the wood- The difficult dollar position of Denmark products industries. noted in the Bank's Seventh Annual Report im-Of the $20 million lent to Finland in April proved considerably during 1952. Her dollar 1952, $9.5 million was for additional machinery trade deficit for the year was reduced by more for the wood-products industries, $9.5 million for than one-half. Imports from the dollar area de- imports of equipment needed to increase the sup- clined; while, particularly as a result of larger ex- . . . penditures by United States armed forces in Eu- ply to electric powesr,ads $1 tmilo fre eup ment to construct access roads to timber areas and rope, export earnings increased. reclaim land. The wood-products industries Dollar-debt amortization payments, already will also benefit from the Bank loan of Swedish due or about to fall due, still present Denmark with kronor 18 million (equivalent to about $3.5 mil- a financial problem. But the Ministry of Finance lion) made in November 1952. This loan was has been able to increase the sums set aside to financed through the release by the Swedish Gov- meet these amortization payments in 1953. The ernment of part of its paid-in subscription to the improved position was reflected by Denmark's capital of the Bank. The proceeds will finance decision to pay in May 1953 $302,000 on the imports of equipment from Sweden. About one- $40 million reconstruction loan, although this third of the dollar loan and one-tenth of the sum did not fall due until August 1953. kronor loan have been disbursed. Finland The $12.5 million loan of August 1949 has Fiscal $12.5 million 15-year 496 loan of August been almost entirely disbursed, about four-fifths of Fiscal $12.5 million 15-year 4%g loan of August itfreup ntorcnsutadmdrizth 1950: 1, 1949 to the Bank of Finland for de- it for equipment to reconstruct and modernize the velopment of power, wood-products wood-products industries, the remainder for im- industries and limestone powder ports needed for electric power development and production. $2.3 million 2-year 3% loan of October the production of limestone powder. 17, 1949 for equipment for timber production; reduced at request of bor- France rower on September 30, 1951 to $2.1 million. This loan has been com- Fiscal $250 million 30-year 41/4% loan of May pletely repaid. 1947: 9, 1947 to Credit National for recon- Fiscal $20 milllion 18-year 43/4% loan of April struction. Fully disbursed by January 1952: 30, 1952 to the Bank of Finland for 1948. development of power and wood- The possibility of Bank assistance in the de- products industries and for agricul- tural improvement. velopment of French overseas territories was dis- Fiscal Swedish kronor 18 million ($3,479,464) cussed in Paris in the closing months of the fiscal 1953: 18-year 43/4%4 loan of November 13, year (see page 21). 1952 to the Bank of Finland for the wood-products industries. Most of the Bank's lending in Finland has Germany been for the modernization and expansion of the The Federal Republic became a member of wood-products industries, which account for nearly the Bank in August 1952. In the first half of one-third of the national income, consume more 1953 a mission made two visits to the country to than half the supply of electric power and pro- study present economic conditions and the possi- vide nearly the whole of the country's export earn- bility of Bank lending. During the second visit, ings. The sharp fall in the price of chemical wood the President of the Bank spent a short time in [ 24 1 Germany and met officials of the Government season of 1952. But progress has been good since and members of the investment community. the 1953 thaw allowed work to begin again, and construction should be completed by December Greece of this year. Though the total of this loan, like The Minister of Coordination visited the the £360,000 loan of November 1951, was ex- Bank in May 195 3 to discuss the present economic pressed in sterling, other European currencies situation and the investment program of Greece. were also used in both cases. A mission has been invited to visit the country All the Bank's loans to Iceland are financing to make a further examination of these topics, and purchases in Europe. The currencies lent for this is expected to leave for Greece within the next purpose by the Bank have been made available few months. to it by releases from the paid-in capital subscrip- tion of European members, and from the proceeds Iceland of the Bank's i5 million sterling bond issue of Fiscal £875,000 ($2,450,000) 22-year 43/s% loan May 195 1. Funds from the United States Mutual 1951: of June 20, 1951 for power develop- Security Agency have been drawn upon by the ment. Icelandic Government to furnish the dollar costs Fiscal £360,000 ($1,008,000) 22-year 412% loan 1952: of November 1, 1951 for agricultural and most of the Icelandic kr6nur costs of the development. Fully disbursed by projects. March 1953. The Government has discussed with the Fiscal $854,000 equivalent in European curren- ... .. 1953: cies 17-year 43/0% loan of August 26, Bank the possiblity of additional loans in various 1952 for a fertilizer plant. currencies for several other projects. A Bank The loan of August 1952, made in various mission visited Iceland in May 1953 to study these European currencies equivalent to $854,000, is projects and to obtain data on the country's eco- financing imports from Europe of building ma- nomic situation. terial and equipment for a nitrogen fertilizer The Iceland Bank of Development was es- plant. The plant will make enough fertilizer to tablished in February 1953, along the general meet domestic needs and will help Iceland in her lines recommended by a Bank representative who plans to develop agriculture and lessen her de- visited the country in 1952. pendence on fishing. About one-third of the loan has so far been disbursed. Italy Last disbursements under the £360,000 loan Fiscal $10 million 25-year 4122% loan of October of November 1951 were made during the year. 1952: 10, 1951 to the Cassa per Opere Stra- This loan was used to finance imports needed to ordinarie di Pubblico Interesse nell' Italia Meridionale (Cassa per il Mez- build farm houses and other farm buildings and zogiorno) for development of south- to re-seed and fence grasslands. An amount of ern Italy. Icelandic kr6nur equivalent to the loan has been Satisfactory progress has been made with deposited in a special account in the Agricultural the 10-year development program for southern Bank and is being used to assist farmers with Italy, in support of which the Bank lent $10 mil- loans toward buildings and other imnprovements. lion in October 195 1. This program, adminis- About four-fifths of the £875,000 loan made tered by the Cassa per il Mezzogiorno, will bring in June 1951, to pay for imports from Europe for a tenfold increase in the acreage under irrigation; hydroelectric plants on the Sog and Laxa Rivers, it will also control floods, clear land, improve has been disbursed. Supply difficulties, particu- roads, and provide for the settlement of farmers larly those caused by the shortage of certain types on land redistributed by the Government. The of steel, delayed work during the construction loan is not intended to buy equipment, for this t 25 ] can be obtained within Italy. But it will bear the Fiscal $15 million 15-year 4% loan of July 26, impact on the country's foreign-exchange position 1950: 1949 to Maatschappij tot Financiering van het National Herstel N.V. (Her- of the higher tempo of activity resulting from stelbank) for industrial re-equipment the plan's execution which is expected to employ projects; reduced at request of bor- rower to $8.8 million on March 17, a quarter of a million workers. The rate of dis- 1950 and to $7.9 million on Janu- bursement of the loan is geared to investment ary 9, 1952. under the plan at a rate of $1 per 10,000 lire, and Fiscal $7 million 6-year 4Y8% loan of March 20, 1952: 1952 to Koninklijke Luchtvaart Maat- disbursements have so far amounted to $8.2 mlu- schappij N.V. (KLM) for purchase lion. Execution of the first phase of the plan, in- of aircraft. volving the expenditure of 100 billion lire, has Over half of the $7 million loan of March been somewhat slower than was anticipated, but 1952 to KLM Royal Dutch Airlines has been is expected to be completed by September 1953. disbursed; the greater part of this amount repre- The lira counterpart of the Bank's loan is sented complete disbursement of the $3.5 million being used to stimulate industrial development in participation of The Chase National Bank of the southern Italy. Agreement has been reached on City of New York. Although there have been seven projects to be financed from this fund. delays in the delivery of the planes included in Three of these are for cement works. The others the aircraft replacement program, seven new are for the production of superphosphates, fiber planes were put into international service in 1952. board, welded tubes and woolens. Most of the The remaining 16 are to be delivered during 1953 loan contracts have been concluded and the first and early 1954. By helping to modernize KLM's disbursements have already taken place. fleet, the loan should increase the foreign- Two missions visited Italy during the year. exchange earnings of the Netherlands. Progress of the Cassa plan was surveyed, and the Only $750,000 remains undisbursed of the Bank studied the possibility of supporting the next $15 million loan made in July 1949 to the Fi- phase of the 10-year program with a further loan. nance Corporation for National Reconstruction (Herstelbank). Of the 35 industrial re-equip- Luxembourg ment projects assisted by the loan, 21 had been Fiscal $12 million 25-year 41/4o% loan of August completed by December 1952, 13 more are ex- 1948: 28, 1947 for equipment for steel mill pected to be completed by the end of 1953, and and railroads; reduced at request of the remaining one during 1954. borrower on December 19, 1949 to $11.8 million, which was disbursed by In June 1953 the four shipping companies the end of that month. arranged to purchase and cancel bonds to the value of $6 million from the loans of The Netherlands July 1948. By this purchase, together with the Fiscal $195 million 25-year 41/4% loan of August amortization payment due in July 1953, the whole 1948: 7, 1947 for reconstruction. Fully dis- . . bursed by June 1948. sum of $12 mllion will be repaid five years be- Fiscal $12 million 10-year 3X6% loans of July fore final maturity. 1949: 15, 1948 to N.V. Stoomvaart Maat- schappij "Nederland" (2 loans of $2 Turkey million each), N.V. Vereenigde Ned- erlandsche Scheepvaartmaatschappij Fiscal $12.5 million 25-year 441o% loan of July (one loan of $2 million), N.V. Neder- 1951: 7, 1950 for development of ports. landsch-Amerikaansche Stoomvaart- $3.9 million 18-year 37Y8% loan of July Maatschappij "Holland-Amerika Lijn" 7, 1950 for grain-storage facilities. (one loan of $2 million), and N.V. $9 million 15-year 33/4% loan of October Rotterdamsche Lloyd (2 loans of $2 19, 1950 to Industrial Development million each), for purchase of ships. Bank of Turkey for development of Fully disbursed by August 1948. private industry. [261 Fiscal $25.2 million 25-year 43/4% loan of June darpasa. Bids for the Samsun and Iskenderun 1952: 18, 1952 for multi-purpose dam and construction contracts have been received. The power facilities on the Seyhan River. i contractsdhave bee receive. ah The $25.2 million loan of June 1952 is to program is and Haydarpasa should be completed towards the end of 1954 and at Iskenderun and Alsancak dur- Dam, which will help to control floods, to irrigate ing 1955. Samsun will take longer, and will be the fertile Adana Plain and to provide power for the last of the five port projects to be completed. existing and new industrial enterprises in that p area. Consulting engineers have been engaged Progress has continued on the projects fi- and plans and specifications for the dam have been nanced by the $3.9 million grain-storage loan of completed. Orders for construction equipment July 1950 although, like the port loan, it is be- have been placed. The equipment is being ship- hind schedule. Construction of the 29 steel sheds ped in time for use in the 1953 construction for grain storage has been almost completed; they should be available for storing the 1953 harvest. season. The nine inland silos are still under construction, fromthe generatn pland distibeputiontof pwer hbut some of them should be in use this year. A from the Seyhan plant will be put into the hands cntuto otathsbe wre o h of a corporation in which private capital will have constructon contract has been awarded for the a maorit holing.Thi cororaton, amedthe Iskenderun port silo, bids for the Haydarpasa port aumajor ity hln. i Corpan, nam te silo have been received, and it is expected that ~ukuroa Utilty Powr Compny, ha been bids for the Alsancak silo will be invited soon. formed and private investors have acquired a ma- jority interest by subscribing to 16 million Turkish Yugoslavia liras of its issued capital. This operation is a new Fiscal $2.7 million 2-year 3% loan of October 17, and successful step in the mobilization of private 1950: 1949 for equipment for timber pro- capital in Turkey. duction. Fully disbursed by Decem- ber 1950, and now completely repaid. The Industrial Development Bank, estab- Fiscal $28 million equivalent 25-year 4112% loan lished to stimulate private industry and assisted 1952: of October 11, 1951 for power, min- by the $9 million loan of October 1950, has ing, industrial and othcr projects. Fiscal $30 million equivalent 25-year 47Y8% loan greatly expanded its activities. By the end of 1953: of February 11, 1953 for power, min- April 1953 it had approved loans equivalent to ing, industrial and other projects. 83 million Turkish liras (about $30 million) out A loan equivalent to $30 million was signed of total resources equivalent to 104.7 million in February 1953. Twenty-seven projects are Turkish liras. International Bank funds equiva- being assisted by it in seven sectors of the econ- lent to $5.8 million provided a part of the foreign- omy: electric power generation and distribution; exchange requirements of 19 loans made by the coal mining; the extraction and processing of non- Development Bank. These loans are aiding a ferrous metals; iron and steel production; other variety of industries, including cotton and wool manufacturing industries; forestry; and transpor- processing, brick and tile production, machine tation. Some of these projects are already close service and repair facilities, and the manufacture to completion, and all of them should be in opera- of pharmaceuticals. In May 1953 Industrial De- tion within two or three years. They were selected velopment Bank representatives visited the Inter- for financing because they were expected to bring national Bank to discuss the possibility of a sec- an early improvement in the Yugoslav balance of ond loan to provide additional foreign exchange. payments. Under the $12.5 million port development Similar objectives were served by the loan loan of July 1950, construction contracts have equivalent to $28 million made in October 1951 been awarded for the ports of Salipazar and Hay- in support of power, mining, industrial and other [27 1 projects. This loan has now been almost en- Both the loans are expected to be disbursed tirely disbursed or committed. and repayable entirely in European currencies. A mission visited Yugoslavia in the middle This is an important feature of the loan opera- of 1952 and found that progress on projects sup- tions; the pattern of Yugoslavia's external trade ported by the earlier loan had been satisfactory. is such that her exports go mainly to European The mission also examined projects put forward markets and her opportunities of earning dollars by the Government for the second loan, and are limited. The Government is buying equip- studied economic developments in Yugoslavia. It ment and supplies from the United States, Canada noted an improvement in the availability of goods. and eleven European countries. To finance these This improvement had been furthered by grants purchases the Bank is using, in addition to Swiss from the United States, the United Kingdom and francs received from the sale of Bank bonds in France, and changes in economic organization Switzerland and sterling received from the sale of aimed at decentralization of management and the bonds in the United Kingdom, releases from the encouragement of initiative. The mission dis- capital subscriptions of Austria, Belgium, Den- cussed measures being taken to meet the difficulties mark, France, Germany, Italy, the Netherlands, caused by the severe drought of 1952. Norway, Sweden and the United Kingdom. WESTERN HEMISPHERE Bolivia work and for carrying forward its program for Bank representatives visited Bolivia in March new highway construction and paving. The State 1953 to examine the economic situation and to of Rio de Janeiro, adjacent to the capital city of explain to officials the operating methods of the Brazil, is highly industrialized and also an im- Bank. portant agricultural area. It is the chief supplier of essential foodstuffs to Rio de Janeiro and to Brazil Niteroi, the State capital. Trucks now carry a Fiscal $75 million 25-year 41.296 loan of Janu- heavy volume of freight throughout the State, 1949: ary 27, 1949 to Brazilian Traction, and motor-bus traffic is growing as the cheapest Light and Power Company, Limited, and most convenient means of transportation. for power and telephone development. Most of the projects financed by the $90 Fiscal $15 million 25-year 4¼4% loan of May 26, 1950: 1950 to Companhia Hidro El6trica do million of loans made to the Brazilian Traction, Sao Francisco for power development. Light and Power Company in 1949 and Fiscal $15 million 25-year 4¼4% loan of Janu- 1951 have been completed. The project for the 1951: ary 18, 1951 to Brazilian Traction, Light and Power Company, Limited, diversion of the waters of the Paraiba and Pirai for power development. Rivers to supply water for the new Forcacava Fiscal $25 million 25-year 43/4% loan of June 27, power plant and the old Fontes plant was com- 1952: 1952 to the Comissijo Estadual de Energia El1trica of Rio Grande do Su pleted in March 1952. Since then, the pumping for power development. stations have been expanded by the installation of $12.5 million 15-year 45/s% loan of June additional pump units. Progress on the construc- 27, 1952 for improvement of rail- tion of the For§acava plant has been delayed be- ways. Fiscal $3 million 5-year 41/4% loan of April 30, cause of unforeseen difficulties encountered in ex- 1953: 1953 for highway improvements. cavating for the underground power station. The The $3 million loan of April 1953 will be first two units are now expected to be in opera- used to finance imported equipment needed by tion before November 1953 and the third before the Highway Department of the State of Rio de the beginning of 1954, giving the plant an initial Janeiro for the maintenance of its highway net- capacity of 135,000 kilowatts. [28] Work is continuing on the hydroelectric term investment program. The group consisted power project at Paulo Afonso for which the Bank of eight members: three of the Bank's staff; three made a loan of $15 million in May 1950. Be- specialists in agriculture and forestry nominated cause of the large volume of water and rapid flow by the Food and Agriculture Organization of the of the river, the most difficult part of the con- United Nations, which also shared their expenses; struction work is the closure of the dam section and two consultants recruited by the Bank, one a across the main part of the river. This work has specialist on the use of water resources and the required considerably more time than was esti- other an expert on transport and communications. mated. In the light of the experience gained The Bank expects to transmit the mission's report during the last construction seasons, the engi- to the Government in August 1953. neering plans have been revised and, if no further difficulties are encountered, the dam should be Chlle in tim fo.h lnosatoeain Fiscal $13.5 million 20-year 4½%2$ loan of March completed in time for the plant to start operations 1948: 25, 1948 to Corporaci6n de Fomento by April 1954. de la Producci6n (Fomento) and Em- The Loan Agreement for the $12.5 million presa Nacional de Electricidad, SA. loan of June 1952 to pay for imports required for $2.5 million 6o-year 33p4% loan of March rehabilitation of the Central do Brasil Railroad, 25, 1948 to Corporaci6n de Fomenro became effective in January 1953. A loan agree- de la Producci6n for agricultural ma- chinery. Fully disbursed by Decem- ment was concluded in December 1952 between ber 1949. the Central do Brasil Railroad and the Banco Fiscal $1.3 million 10-year 43/8% loan of Oc- Nacional do Desenvolvimento Econ6mico, pro- 1952: tober 10, 1951 to Corporaci6n de Fo- mento de la Producci6n for explora- viding the required cruzeiro funds. The new ad- tion and use of water resources of the ministration of the Central do Brasil Railroad is- Rio Elqui Valley. sued its invitations for tenders for the supply of The Endesa hydroelectric program, for which rolling stock, but by the end of June 1953 no dis- the Bank made a loan of $13.5 million in March bursement had yet been made under the Bank 1948, is proceeding satisfactorily. Two installa- loan. tions, one at Pilmaiquen and the other at Los The Loan Agreement for the $25 million Molles with capacities of 10,800 kilowatts and loan made to the Comissao Estadual de Energia 16,000 kilowatts respectively, have been com- Eldtrica in June 1952 for power development in pleted and are in operation. As a result of fur- the State of Rio Grande do Sul also became ef- ther studies, revisions have been made in plans for fective in January 1953. The Statutes of the the construction of the Los Cipreses plant. The Comissao have been promulgated by the Governor new plan provides for a 3-unit plant: two units of the State and notable progress has been made with a combined capacity of 58,900 kilowatts to in the organization of the Commission. Substan- be financed by the Bank, and a third unit with a tial headway is being made in construction and capacity of 29,450 kilowatts to be financed from bids have been invited for the supply of most of other sources. The transmission system of this the equipment to be financed under the loan. No plant has also been revised to be better adapted to disbursement had been made under the Bank the future power requirements of the Endesa sys- loan, however, by the end of the fiscal year. tem. The plant is scheduled for completion by the end of 1953, and the transmission lines and British Guiana substations during the first half of 1954. A general survey mission visited British There has been some delay on the project Guiana in February and March 1953 to prepare being carried out under the Bank's loan of $1.3 recommendations to the Government for a long- million to explore and use the underground water [29] resources of the Rio Elqui Valley. The first phase, countered delays arising out of differences of involving explorations to measure the volume of opinion in Chile regarding the conditions under underground water, will not be completed before which the Government should guarantee the loan. October 1953. After that, it can be decided to In April 1953, however, the Government decided what extent it will be practicable to proceed with to grant its guarantee. Bank representatives vis- the second phase, which consists of the installa- ited Chile shortly afterwards for renewed discus- tion of permanent pumps and power facilities to sion of the proposed plants and of problems which operate them. had arisen in connection with two coal-mining The report of the joint Bank-FAO mission, projects for which Bank financing had been re- which visited Chile in 1951 to prepare a long- quested. term program of agricultural development, was transmitted to the Government in December Colombia 1952. A special committee appointed by the Fiscal $5 million 7-year 31/2%o loan of August 19, Government is studying the report and preparing 1950: 1949 to Caja de Cr6dito Agrario, In- dustrial y Minero for agricultural ma- specific recommendations chinery; reduced at request of bor- The report contained recommendations aimed rower on April 2, 1951 to $4.9 mil- at increasing agricultural output during the next lion, which had been disbursed by February 195 1. eight years to a level approximately 40% above Fiscal $3.53 million 20-year 4%' loan of Novem- the 1945-49 level. First emphasis was placed on 1951: ber 2, 1950 to Central Hidroel6ctrica the need for the Government to adopt a consistent del Rio Anchicaya, Limitada, for long-term agricultural policy designed to create $2.6 million 20-year 4% loan of December incentives and maintain confidence among farmers 28, 1950 to Central Hidroel6ctrica de so that they will embark upon a vigorous expan- Caldas, Limitada, for power develop- sion program. Other recommendations for gov- $16.5 million 10-year 37.% loan of April ernment action concerned the improvement of 10, 1951 for highway construction roads, railways and ports as they affect agricul- and rehabilitation. ture, and facilities for processing, storing and mar- Fiscal $2.4 million 20-year 412%0 loan of No- 1952: vember 13, 1951 to Central Hidro- keting agricultural products. el6ctrica del Rio Lebrija, Limitada, To provide additional land for cultivation, for power development. the mission proposed that in the next eight years Fiscal $25 million 25-year 434% loan of August 1953: 26, 1952 for construction of the Mag- Chile should bring under irrigation an additional dalena Valley Railroad and central 500,000 acres, reclaim and drain 750,000 acres, repair shops. and return to production 250,000 more acres of The Bank's $25 million loan of August farm land now lying fallow. 1952 was made for key parts of an extensive pro- Various steps were recommended to increase gram being carried out to reorganize and reha- production from land now under cultivation. The bilitate the national railroads. Of the loan, $20 mission was of the opinion that better feeding and million is helping to finance the building of a sheltering of animals, and disease control, could railroad in the Magdalena Valley, and $5 million increase milk production by 55 % and meat pro- is being applied to the construction of railroad duction by 50% in eight years. Crops could be repair shops at Bogota. Work began on the new improved by increased use of farm machinery, im- Magdalena Valley Railroad in January 1953. provement of seeds, and better pest, disease and The line will be 235 miles long. It will connect weed control. the country's eastern and western rail systems, and Negotiations on the proposed Bank loan for will provide through rail transportation between the construction of pulp and newsprint plants en- the Pacific port of Buenaventura and important [30] cities of the interior. It will also supplement all- industrial center of Cali. Completion of the river transport through the Magdalena Valley project, originally scheduled for April 1954, prob- and provide a fast and reliable river-rail route be- ably will be delayed for several months. tween the Caribbean ports and central Colombia. The Bank's highway and railroad loans are The new repair shops will provide facilities for an outgrowth of the recommendations made by the reconditioning and maintenance of rolling the general survey mission which visited Colombia stock which now lies idle for long periods await- in 1949, and the Bank has continued to work ing repair. with the Government in carrying through other The highway project being carried out with recommendations of the mission. The Bank is the help of the Bank's $16.5 million loan of collaborating closely with the National Planning April 1951 has progressed satisfactorily. This Council established in 1951. A staff member on project consists of the rehabilitation of 1,802 miles leave of absence from the Bank is acting as Plan- of trunk highways and the construction of new ning Adviser to the Council and the Bank has sections to close gaps in the existing network. nominated several specialists to serve the Council By April 1953 all work, including paving, was in various other capacities. Consulting engineers, completed on 112 miles of roads; the full base engaged jointly by the Government and the Bank for paving was completed on 394 miles; and to study the civil aviation corporation recom- grading was finished on a further 158 miles. In mended by the mission, completed their report addition, the contractors had 1,213 miles of roads early in 1953. The proposed corporation would under maintenance. Two permanent repair shops, be an autonomous government agency established one at Bogota and the other at Bucaramanga, have to operate airports and aviation communication been completed and are being used to maintain services. The Government is now taking steps to the construction equipment. put into effect the recommendations of the report. Early in 1953 the Government asked the The Bank has also transmitted the report of Bank for a supplementary loan to expand the a financial expert, jointly retained by the Govern- highway project. The expansion would increase ment and the Bank, recommending measures to the amount of paving from 50% to 80% of the promote investment in industry and to improve mileage included in the project, and would in- the market for government securities. clude a comprehensive maintenance program for national highways. A Bank mission visited Co- Cuba lombia in April 1953 to examine this proposal The Bank is working with the Government and its report was under review at the end of the and the Banco Nacional de Cuba to put into ef- fiscal year. fect some of the recommendations on financial Progress on the three hydroelectric projects measures made by the general survey mission of being financed with the help of Bank loans has, 1950. Bank missions visited Cuba in July and on the whole, been satisfactory. The Caldas November 1952 for this purpose and to consider project has been supplying power to the city of how the Bank might collaborate with the Cuban Manizales since 1951 and the expansion of the Agricultural and Industrial Development Bank. distribution system is expected to be completed A consultant engaged by the Bank visited Cuba soon. The Lebrija project, which will make more in May and June 1953 to study the organization power available to the city of Bucaramanga, is and operations of the Agricultural and Industrial progressing according to schedule, and should Development Bank with reference to the possi- begin to supply power by the end of 1953. Prog- bility of developing a market for its securities. ress has been slow on the project being built on The International Bank is examining the techni- the Anchicaya River to supply more power to the cal merits of two projects which are being con- [31] sidered by the Agricultural and Industrial Devel- The Minister of Economy visited the Bank opment Bank and has also been studying the gen- early in 1953 to discuss the possibility of financ- eral problem of how to develop a more active ing irrigation, roads and an industrial develop- capital market. ment corporation. Preliminary technical and eco- nomic information has been received and a Bank Ecuador mission will be sent to El Salvador to examine Bank missions visited Ecuador in July 1952 these projects within the next few months. and in February 1953 to examine conditions in the country and to discuss with the Government Jamaica steps to be taken by Ecuador to facilitate Bank as- The report of the general survey mission, sistance in the development of its economy. The which visited Jamaica in March 1952, was trans- Government also discussed with the missions a mitted to the Government in December 1952. number of development projects. In May 1953 the Government issued a statement At the end of May 195 3 the Government of policy which accepted the recommendations of and the British Council of Bondholders agreed on the mission as a framework within which govern- the terms of a proposed settlement of Ecuador's the mision for k within w hovern- ment action for economic development should be external debt. The settlement is subject to rati- planned and carried out in the coming decade. fication by the Ecuadorian Congress. The Bank plans to send a mission to Ecuador in August In its report, the mission proposed a ten-year 1953 to examine specific projects which the Gov- development program to increase production and eminnto hxasine spresente trojectswhih the Bk fg reduce unemployment, largely through the devel- opment of agriculture. Chief among its recom- El Salvador mendations in this field were programs of soil Fiscal $12.545 million 25-year 4¼ 4% loan of De- conservation, irrigation, reclamation of swamp 1950: cember 14, 1949 to Comisi6n Ejecu- land, and pasture improvement; land surveys tiva Hidroel6ctrica del Rio Lempa for needed for proper planning of land use, and power development, changes in the system of land taxation. The mis- Construction financed by the loan of $12.5 sion also recommended measures to increase indus- million is somewhat behind schedule because of trial productivity, to develop the tourist industry difficulties encountered early in 1952 in the civil and to expand mining, electric power and trans- works for the hydroelectric planit on the Lempa portation facilities. In the field of social serv- River. The project should, however, be finished ices, the mission stressed the improvement of tech- before the end of 1953, and it is probable that nical education as a means of bringing about an the plant will begin limited operations early in 1954. In the meantime a specialist found with the help of the Bank is assisting the Government Mexico in a study of wholesale power rates and in study- ing a rate structure for retail sales. Fiscal $24.1 million 25-year 4½2% loan of Janu- 1949: ary 6, 1949 to Comisi6n Federal de Late in 1952, following a preliminary ex- Electricidad and Nacional Financiera amination made by an expert from the United for power development. Nations, the Government informed the Bank of $10 million 1-year 4½ 2% loan of January its intention to make detailed engineering studies 6, 1949 to Comisi6n Federal de Elec- tricidad and Nacional Financiera for for the construction of a projected new port on power development. (Refunded) the Pacific Ocean. It is expected that when tech- Fiscal $26 million 25-year 4V2% loan of April nical studies are completed the project will be pre- 1950: 28, 1950 to Mexican Light and Power Company, Limited, for power devel- sented for the Bank's consideration. opment. t 32 1 Fiscal $10 million (maturity dates 1952-1957) sion needed to meet the growing demand for 1951: 31/2% line of credit of October 18, power in the Mexico City area, the Company must 1950 to a consortium of eight Mexi- can banks and Nacional Financiera for be able to increase its revenues. It has therefore financial assistance to small enter- applied to the Mexican Government for a rate prises. Expired on June 30, 1952 with $0.532 million of loans out- icrease. standing. In April 1951, at the suggestion of the Fiscal $29.7 million 25-year 41/2% loan of Janu- Mexican Government, a working party consisting 1952: ary 11, d9d2 td Naciinal Financiera of an economist from the Nacional Financiera, for power development. one from the Banco de Mexico and two econo- Construction work on the electric-power mists from the Bank's staff, began a study of the projects which the Bank is helping to finance has long-term trends in the Mexican economy, with progressed satisfactorily during the fiscal year, special reference to Mexico's capacity to absorb ad- and about 100,000 kilowatts of new generating ditional foreign investment. The group collabo- capacity have been brought into operation. This rated for more than a year in the preparation of comprises 66,000 kilowatts at the Lecheria steam their report and presented it to the Mexican Gov- electric plant of the Mexican Light and Power ernment and the Bank in October 1952. The Company (Mexlight), which serves the Mexico conclusion of their task marked the successful City area; 10,880 kilowatts at the Tepazolco hy- completion of a new form of collaboration be- droelectric plant of the Federal Electricity Com- tween the Bank and a member country. mission, in the State of Puebla; 12,500 kilowatts The report pointed out that Mexico's re- at the Guaymas steam electric station in the State markable development between 1939 and 1950 of Sonora; and the first of two 15,000-kilowatt was accomplished in the face of many difficulties, units at the Monterrey steam electric station. The and was only made possible by an unusually high only important projects which will be completed rate of savings resulting from credit expansion and somewhat later than originally scheduled are two restrictions on consumption, and by exploiting in- hydroelectric projects requiring elaborate civil en- vestment opportunities which offered quick and gineering works: Mexlight's new 45,000-kilowatt substantial returns. High returns were possible plant at Patla and a third unit of 45,000 kilo- as long as existing public facilities, such as rail- watts at the Commission's Ixtapantongo station. ways, roads and power stations, could be made to The Mexican Light and Power Company carry additional burdens, and as long as existing has, however, experienced serious difficulty in oilfields and mines continued to give rich yields. financing the peso costs of its construction pro- A stage has now been reached, however, gram. When the Bank made its loan of $26 mil- when heavy capital investment must be made in lion in April 1950 to finance imports required for the improvement of public facilities and in the the program, it appeared that the peso costs could development and conservation of natural re- be met by a 44 million peso loan from Nacional sources. Also, an increasing proportion of in- Financiera and by suspending dividends during vestment will have to be devoted to the mainte- the construction period so that all earnings could nance of existing undertakings. be reinvested. However, unforeseen increases in The report concluded that since it will be the costs of construction have led to serious pres- difficult to raise domestic savings above the pres- sure on the Company's liquid funds. Nacional ent high level, Mexico will have to rely more on Financiera has already made additional advances, external capital than in the past, if development but still further advances will be necessary if con- is to continue at its present rate. Increased exter- struction is not to be seriously retarded. To repay nal borrowing will need to be accompanied by these advances and to finance the future expan- appropriate financial policies if it is not to disturb [33] the balance of payments. The report also recom- sented to the Nicaraguan Government in Sep- mended a greater degree of central coordination tember 1952. The report recommended a five- of development to ensure that projects are chosen year development program designed to help the so as to attain the maximum return from capital country move forward simultaneously in agricul- investment. ture, transportation, power, industry, education and health. The report also recommended cer- Nicaragua tain administrative and fiscal reforms which the Fiscal $3.5 million 10-year 41/s% loan of June mission felt were required to carry out effectively 1951: 7, 1951 for highway construction. the proposed investment program. $1.2 million 7-year 4% loan of June 7, The Government has undertaken a number 1951 to the Banco Nacional de Nica- ragua for agricultural machinery. of measures in line with the recommendations Fiscal $550,000 10-year 43/8% loan of October made in the report. It has accepted the recom- 1952: 29, 1951 for grain storage facilities. mended minimum five-year development program The grain drying and storage plant financed as a basis for its future economic policy. It has by the $550,000 loan of October 1951 was com- organized a National Economic Council to coordi- pleted in February 1953, seven months after nate the Government's economic activities and to ground was broken. Although it was completed promote the development program; the Congress during the off-season between harvests, it has al- has passed legislation establishing a National De- ready received some quantities of corn and beans. velopment Institute; a Budget Bureau has been It should operate close to capacity after the har- organized; an income tax law has been passed; vest in August 1953. customs duties and the general tax structure are Satisfactory progress has been made under being studied and revised; a new industrial devel- the $3.5 million highway construction loan of opment law has been passed; and the mining laws June 1951. It is expected that the first of eight have been revised. road-building projects will be completed in Au- At the Government's request, the Bank's gust 1953. This is the road from Matagalpa to special mission was extended beyond May 1952. Jinotega, a distance of 21 miles; it cuts through a A new special representative was appointed; he coffee-producing area and will speed up the ship- and an economist from the Bank's staff are in ment of coffee to marketing centers and open new Managua to assist in carrying out the development lands to further coffee growing. Two more roads program. are expected to be completed during 1954. One, Another Bank mission visited Nicaragua in the most important artery in the system, is the March 1953 to examine projects for the construc- 48-mile highway between Managua and Le6n. It tion of feeder roads into areas opened up by the will for the first time make road transport possible Bank-financed road program and for a small between the capital and Le6n, the country's sec- diesel-power plant in Managua. ond largest city, and should stimulate commerce in the area. The other is a 19-mile road be- Panama tween San Jorge and San Juan del Sur, a port A joint mission from the Bank and the on the Pacific Ocean. United Nations Technical Assistance Administra- The equipment acquired under the $1.2 mil- tion visited Panama in August 1952 to arrange lion agricultural machinery loan of June 1951 with the Government a program of technical as- has been distributed and is in the hands of farmers sistance directed toward the preparation and exe- throughout the most important agricultural areas. cution of fiscal and administrative reforms recom- The report of the Bank's special mission, mended by an earlier Bank mission. Subsequently, which spent nearly a year in Nicaragua, was pre- a Bank consultant visited Panama and made rec- [341 ommendations to improve the fiscal and credit tioned a special representative in Paraguay to as- systems. At the suggestion of the Bank, experts sist in matters related to the loan. Arrangements from the Banco Nacional de Costa Rica were are now far advanced for the handling and dis- called upon to advise the Panamanian Government tribution of the Bank-financed farm equipment on the establishment of an Economic Develop- and supplies; for the establishment by the Minis- ment Institute. Legislation was passed creating try of Agriculture of a tractor pool at an agricul- the Institute in January 1953, and the new agency tural colony near Asunci6n; and for the carrying has now begun the preparation of projects as a out by the Ministry of Public Works of a program first step toward a coordinated development pro- of road construction and maintenance designed to gram. link the agricultural regions of southeastern and Other government action toward strength- central Paraguay with marketing and transporta- ening the financial position of Panama has in- tion centers. By August 1953 it is expected that cluded the adoption of measures to fund and liqui- the $1.9 million portion of the loan will have date the internal floating debt, to improve the tax been disbursed and that most of the goods pur- structure and the tax collection system, and to chased with the funds will have arrived in Para- establish sound budgetary practices. guay. These favorable developments have made it Arrangements are being made for a Bank possible for the Bank to give consideration to the mission to visit Paraguay late in 1953 to examine financing of development projects, and a Bank other projects presented to the Bank for con- mission visited Panama in March 1953 to examine sideration. projects for grain-storage facilities, hydroelectric power and the importation of agricultural ma- Peru chinery. Fiscal $2.5 million 15-year 4112% loan of Janu- 1952: ary 23, 1952 for port improvements. Paraguay Fiscal $1.3 million 7-year 4Q/s% loan of July 8, Fiscal $5 million 9-year 43/8% loan of December 1953: 1952 for agricultural machinery. 1952: 7, 1951 for agricultural machinery The loan of $1.3 million of July 1952 is and supplies and road-building equip- ment. being used to import equipment for the agricul- Under the terms of the Loan Agreement, tural machinery pools of Servicio Cooperativo this loan could not become effective until the Inter-Americano de Producci6n de Alimentos Cr6dito Agricola de Habilitaci6n, one of the agen- (SCIPA), an agency of the Ministry of Agricul- cies to receive Bank-financed goods for resale to ture established in 1943 by the Governments of Paraguayan farmers, had strengthened its financial Peru and the United States. SCIPA's machinery position and improved its accounting and adminis- pools are being used for plowing and harvesting, trative procedures. When a large part of these for land reclamation and for opening new areas to reforms had been accomplished and the remainder cultivation. It is estimated that the Bank-financed were in progress, the Bank agreed with the Gov- equipment will, in addition to other benefits, make ernment of Paraguay that an initial portion of it possible to put an extra 50,000 acres of land the loan should be made available for withdrawal. under cultivation. Most of the loan has been dis- Accordingly, in September 1952, the Bank de- bursed and most of the equipment has arrived in clared the loan effective up to the amount of $1.9 Peru and been put into use. million, with the balance to be made available The Port of Callao loan of $2.5 million was later as the Bank and the borrower might agree. made to improve the port's facilities for handling In December 1952, by agreement between general cargo and to erect a grain elevator to un- the Bank and the Government, the Bank sta- load and store bulk grain. Virtually the whole [ 35 1 amount allocated to the general cargo-handling Uruguay facilities has been disbursed. Bids are expected to Fiscal $33 million 24-year 4144% loan of August be called shortly for the erection of the grain 1951: 25, 1950 to Administraci6n General elevator, and construction should begin within a de las Usinas El6ctricas y los Tel6fonos del Estado (UTE) for power and tele- few months. The Port Authority, established in phone development program. accordance with the provisions of the Loan Agree- The project for the expansion of power and ment, has made good progress in reorganizing the t f o U 21) ~~~~~~telephone facilities of Usmnas E1ectricas y los Tele- operations of the port. As a result of improve- fonos del Estado (UTE) was at first held back by ments at the port, the 25 %6 surcharge, imposed delays in making the loan effective and in con- by shipping companies on freight consigned to Callao, was removed in June 1953. cluding contracts for the main parts of the project. Two Bank missions visited Peru during the During the past year, however, work has been pro- fiscal year 1953. They discussed with Govern- ceeding steadily and all principal contracts have ment officials the general relationship between been placed. Some diesel generators have been the Bank and Peru, and reviewed the economic temporarily installed in communities not yet and financial situation. The second mission which reached by the primary transmission lines. This spent about two months in Peru early in 1953, equipment will be moved to the communities for also made detailed appraisals of the technical and which it was originally intended when the trans- economic merits of development projects for irri- mission system is completed. gation, road maintenance, agricultural machinery, In April 1953 a mission went to Uruguay to cement production and electric power. examine several projects submitted by the Gov- In January 1953 the Government made a ernment for the Bank's consideration. These in- formal offer for the settlement of Peru's dollar debt.l Thfer terms tha bettlent notiateru'sdowt t cluded a program to increase livestock production Foeign Bondholderms'had n P got tivtedCoucil oe based upon the joint Bank-FAO report submitted New York, which recommended that bondholders to the Government in July 1951, a substantial should accept this offer. Settlement has already further expansion of the electric power facilities been accepted on more than two-thirds of the administered by UTE, and a project for the re- bonds. Negotiations are continuing with the habilitation of the Uruguayan railway system. Council of Foreign Bondholders in London for The report of the mission is under study by the settlement of two sterling bond issues. Bank. [361 Chapter III-Financial Activities and Resources EARNINGS, RESERVES, REPAYMENTS AND DISBURSEMENTS The Bank's net income in 195 2-53 amounted an advance payment of $302,000 due on August to $18,485,411 compared with $15,872,883 1, 1953. during the previous fiscal year. In accordance Sums paid by borrowers to retire portions of with established practice, the net income has been loans which had been sold by the Bank amounted placed in a supplemental reserve against losses on during the year to $17,837,948. This figure in- loans and guarantees. This reserve was thus in- cluded an advance payment of $6 million on the creased to $76,513,511. loans of July 1948 to four Netherlands shipping Loan commissions, representing a charge of companies, and $500,000 on the loan made in 1% on outstanding balances of all loans, totaled March 1949 for steel and power plants in Bel- $9,551,822 for the year. This sum was credited, gium. as required by the Articles of Agreement, to the Disbursements on loans amounted to special reserve for meeting the Bank's obliga- $226,756,982, compared with $184,777,004 dur- tions. The special reserve was thus increased to ing the previous year. Total disbursements $37,236,477. Total reserves of the Bank on June through June 30, 1953, were $1,103,261,115. 30, 1953, were $113,749,988. Of this amount $1,014,536,420 is repayable in U. S. dollars. The balance, equivalent to $88,- The year's gross income, not including loan 724,695, is repayable in Austrian schillings, Bel- commissions, was $42,839,207. f is amount gian francs, British pounds sterling, Canadian dol- loanvinme was4$33,4937 income fromi lars, Danish kroner, French francs, Italian lire, vestments $9,2538,ndmscelaneosino Netherlands guilders, Norwegian kroner, South $144,352. Gross expenses increased from $19,- African pounds, Swedish kronor and Sw.Ss francs. 315,861 in 1951-52 to $24,353,796 in the past Tt fiscal year. This increase was due principally to Tue togthecal year is sown increases in interest charges and other borrowing on the fng p w the money amoun On the following page, with the money amounts costs. expressed in millions of United States dollars. The Borrowers met promptly all repayments of changed distribution in the past year indicates the principal due during the year. The total thus re- improved supply position in Europe. This has ceived by the Bank amounted to $1,781,028. In enabled European suppliers to benefit from the addition, in April 1953 Nicaragua paid $245,000 Bank's policy of encouraging the purchase of ma- to reduced future repayments on the agricultural terials and equipment from whatever source could machinery loan, and in May 1953 Denmark made offer the terms most favorable to the borrower. [373 Total to Fiscal Year Cumulative Total to Area of F.xpenditure June 30, 1952 1952-53 June 30, 1953 United States ................. $626.2 71.4% $144.1 63.5% $ 770.3 69.8% Canada .................... 61.7 7.0 9.7 4.3 71.4 6.5 Europe .................... 125.0 14.3 68.2 30.1 193.2 17.5 Latin America. 58.4 6.7 2.6 1.1 61.0 5.5 Africa .................... 2.5 0.3 1.8 0.8 4.3 0.4 Near East .................... 2.5 0.3 - - 2.5 0.2 Far East .................... 0.2 - 0.4 0.2 0.6 0.1 $876.5 100.0 $226.8 l00.0 $1,103.3 100.0 The growth of disbursements in currencies outside the United States are illustrated in the ac- other than United States dollars and the increased companying charts, which show disbursements by reliance placed by borrowers on sources of supply area of expenditure and by currencies used. CUMULATIVE LOAN DISBURSEMENTS TO JUNE 30, 1953 (EXPRESSED IN MILLIONS OF U.S. DOLLARS) BY AREA OF EXPENDITURE BY CURRENCY 1,200 _ _ ___ l___ _ 1,200 1,100 1,100 2,00 1,000 900 9A00 C 0N 1947 1948 1949 1950 t951 1952 1953. 1947 1948 1949 1950 1951 1952 1953 FICAL YEAR ENOED RJUNE 30 [ 38 ] FUNDS AVAILABLE FOR LENDING Funds available to the Bank for lending, less The improvement in the supply position in loan disbursements to June 30, 1953, *are sum- Western Euiope, to which reference is made in marized below in United States dollar equivalent. the preceding section of this chapter, has increas- The table shows only those funds which have ingly directed procurement by the Bank's bor- been used by the Bank or which are available for rowers to European markets, and has emphasized use without further approval by members and are the need for Western European currencies in the likely to be needed in the Bank's loan operations. Bank's lending operations. Unless these curren- Releases authorized by members during the year cies are available from 18% capital subscriptions from .their 18% capital subscriptions amounted to or from the proceeds of market operations, the the e4uivalent of $26.6 million. Bank acquires the Western European currencies by 2 % portion of subscription of all purchase against United States or Canadian dollars members ............... $ 177,185,000 or Swiss francs. In such cases, however, the Bank lgq portion of subscriptions made available by: must impose an obligation on the borrower to Canada ...... $ 53,356,000 service the loan in dollars or Swiss francs. But South Africa . . 2,400,000 there are often circumstances where it would be Western European difficult for the borrower to accept a debt obliga- members (listed tion in dollars or Swiss francs, while a debt obli- belowv) .... 62,804,000 690,060 000 gation in other currencies would be well within its Total0' ale capacity to bear. The lack of resources of other Total available capital subscriptions $867,245,000 Funds available from operations. . 77,100,000 currencies can, 'therefore, act in restraint of the Funds available from sale of bonds. 556,374,000 Bank's operations and, at the same time, limit op- "18%" funds available from prin- portunities for exports of Bank-financed equip- cipal repayments or sales of loans in U.S. and Canadian dollars ment by non-dollar member countries. and Belgian francs, which may The Bank has consistently urged upon its be loaned again without further release ................... 43,795,000 member governments the need for liberal releases Other funds'available from princi- of their 18% capital subscriptions. The following pal repayments or sales of loans 39,885,000 table shows, in United States dollar equivalent, Gross total available funds.... $1,584,399,000 the extent to which Western European countries Loan disbursements .1,103,261,000 Excess of available funds over loan have so far agreed to nTake releases from 18% disbursements ............... $ 481,138,000 capital. Available for lending in certain circumstances, Used or but subject to available for consultation or Total 18%10 lending other limitations Unreleased Capital Austria ................ $ 250,000 - $ 8,750,000 [$ 9,000,000 Belgium . ......... 4,500,000 - 36,000,000 40,500,000 Denmark . ............... 1,136,000 - 11,104,000 12,240,000 France.. 34,092,000 $ 60,408,000 - 94,500,000 - Germany:..- 3,100,000 - 56,300,000 59,400,000 Italy .................'. 4,288,000 28,112,000 - 32,400,000 Netherlands .............. 490,000 49,010,000 - 49,500,000 % S 3 Norway ................ 560,000 1,960,000. 6,480,000 9,000,000 Sweden ................ 3,779,000 - 14,221,000 18,000,000 United Kingdom* ......... 10,609,000 169,128,000 54,263,000 234,000j000 $ 62,804,000 $308,618,000 $187,118,000 $558,540,000 (*In addition the Bank has raised £5 million ($14 million) by an issue of bonds in the London market.) [39] Releases of 18% capital subscriptions far, the Bank has been unable to finance the pro- amounting in the aggregate to $33,395,000 have curement needs of any of its borrowers through the also been made by 18 other member countries, releases of these currencies, either because the cur- namely: Colombia, Costa Rica, Ecuador, El Salva- rency released is inconvertible or because the use of dor, Finland, Greece, Guatemala, Honduras, Ice- a convertible currency is specifically restricted by land, India, Lebanon, Mexico, Pakistan, Paraguay, the releasing country to purchases within its own Philippines, Syria, Thailand and Yugoslavia. So borders. SALES OF SECURITIES The bond market in the United States was francs (approximately $11.6 million) of 31/2% seriously affected in the past year by the return to Ten-Year Bank Bonds due December 1962. The freer money-market conditions and by the sharp offering price was 981/2 and the yield 3.68%. In rise, to levels not seen in 20 years, in yields on June 1953 the Bank entered into an agreement United States Treasury and other high-grade bonds. with the syndicate for an issue of the same amount Despite the difficulties imposed by these condi- of 31/2% Fifteen-Year Bonds, due July 1968, and tions, further progress was made in expanding to be offered at 99 to yield 3.59%. Dealings in the market for the Bank's obligations in the these bonds, to be dated July 1, 1953, began on a United States, and an encouraging expansion of "when-issued" basis before the close of the fiscal the market outside that country took place during year. Both issues were oversubscribed, and the the year. bonds sold at a premium over the issue price. New Bond Issues Sales from Portfolio The Bank sold new bond issues in principal Sales of securities from the Bank's loan port- amount equivalent to $71.6 million. Direct obli- folio during the year amounted to $13,637,966. gations outstanding at the end of the year were The funds obtained were added to the Bank's $556.4 million. lendable resources. In October 1952 the syndicate of 139 banks With its guarantee, the Bank sold the equiv- and investment firms in the United States headed alent of $8,304,145 principal amount of bor- jointly by The First Boston Corporation and Mor- rowers' obligations. These sales raised to $49,- gan Stanley & Co. purchased an issue of $60 mil- 803,146 the total of guaranteed issues sold by lion of Bank Nineteen-Year 3½2 % Bonds due June 30, 1953. Of that sum, $20,174,301 prin- October 1971, for public sale at 98 to yield cipal amount has already been paid as the securi- 3.65 %. Nearly $20 million of this issue was ties matured or by repurchases by borrowers be- subscribed by investors outside the United States. fore maturity. Guaranteed obligations still out- The balance was widely distributed within the standing at the end of the fiscal year amounted to United States, life insurance companies, savings $29,628,845. banks and pension and trust funds being the prin- The Bank also sold the equivalent of cipal purchasers. The bonds quickly advanced to $5,333,821 of borrowers' obligations without a premium and during much of the rest of the guarantee. By the end of the year, the total sales fiscal year were above the initial offering price. without guarantee had risen to $20,211,508. In November 1952 the syndicate of leading In addition, two United States firms agreed to Swiss banks, headed in turn by the Swiss Bank participate, without guarantee, in one of the Corporation, Cr6dit Suisse and the Union Bank of Bank's loans to the extent of $997,000 as soon as Switzerland, offered to the public 50 million Swiss the loan becomes effective. [40] Repayment of Obligations by the Bank 22%; mutual savings banks, 20%; pension and In August 1952 the Bank redeemed 17 mil- trust funds, 20%; commercial banks and other lion Swiss francs (approximately $3,956,000) of investors, 9%. The total of holdings in the its Serial Bonds of 194 due 195 3/54. The Bank United States was approximately $419.5 million, also paid at maturity in February and March 1953 and the Bank's bonds were firmly established respectively $10 million of its 2% Serial U. 3 among a wide range of institutional investors. dollar Bonds of 1950 and 5 million Swiss francs Investors outside the United States purchased (approximately $1.2 million) of its 21w2% Swiss the great majority of all guaranteed obligations franc Serial Bonds of 1950. sold by the Bank during the fiscal year, and ac- quired substantial additional amounts of the Holdings of Bank Obligations Bank's own bonds. It is estimated that as a re- sult of the growth of these holdings, not including At June 30, 1953 the total of direct and the Swiss franc issue of July 1, the total of the guaranteed obligations of the Bank outstanding Bank's obligations held outside the United States was equivalent to approximately $586 million. rose to the equivalent of $164.5 million, or about Investors in the United States were estimated to 28% of the whole amount. This total included hold over 70% of these obligations, distributed obligations of about $109.1 million payable in approximately as follows: insurance companies, U. S. dollars. FINANCIAL STATEMENTS AND REPORTS Appendices A through H contain a balance statement of loans up to the end of the fiscal year, sheet showing the financial position of the Bank the Opinion of the Independent Auditor, and as of June 30, 1953, and a comparative statement other schedules giving details of the assets and of income and expenses for the fiscal years ended the capital structure of the Bank are also included. June 30, 1952, and June 30, 1953. A complete [41] Chapter IV-Management and Organization Organization tions. An Economic Staff was maintained to ad- In September 1952 a partial reorganization vise the management and operational departments of departmental duties was carried out primarily on general economic, financial and investment to provide for more systematic and continuous problems of concern to the Bank, and to provide contact between the Bank and its member coun- statistical services. tries. The responsibilities in this field formerly The new organizational pattern is outlined in discharged by the Loan and Economic Depart- the chart below, which also shows the names of ments were assigned on a territorial basis to three the principal officers of the Bank. new departments, each of which was given re- Person-nel sponsibility for maintaining operational relation- Mr. William F. Howell, formerly Assistant ships with a particular geographical group of the Director of Administration, was appointed Di- Bank's member countries. These new units are rector of Administration in July 1952 in succes- the Department of Operations-Asia and Middle sion to Mr. Chauncey G. Parker, who resigned East; the Department of Operations-Europe, to become head of the United States Mutual Africa and Australasia; and the Department of Security Agency in Italy. Operations-Western Hemisphere. Mr. J. Burke Knapp returned to the Bank in The functions of assessing the economic, fi- September 1952 and was appointed Director of nancial and technical merits of projects proposed Operations-Western Hemisphere. He had been to the Bank for financing, and of following the given leave of absence from the Bank in 1950, progress of projects financed by the Bank, were first to serve as economic adviser to the United assigned to a new Department of Technical Opera- States Delegation to the North Atlantic Treaty PRESIDENT EUGENE R. BLACK ECONOMIC STAFF LEONARD B. RIST - DIRECTOR OFFICE OF THE VICE PRESIDENT GENERAL COUNSEL VC RSDN DAVIDSON SOMMERS - GENERAL COUNSEL ROBERT L. GARNER _ I ______________ TECHNICAL ASSISTANCE AND LIAISON STAFF ASSISTANT TO PRESIDENT RICHARD H. DEMUTH - DIRECTOR WILLIAM A. B. ILIFF DEPARTMENT OF OPERATIONS - OFFICE OF THE SECRETARY ASIA AND MIDDLE EAST FRANCOIS-DIDIER GREGH -DIRECTOR M. M. MENDELS - SECRETARY DEPARTMENT OF OPERATIONS - EUROPE, AFRICA AND AUSTRALASIA A. S. G. HOAR - DIRECTOR ADMINISTRATION DEPARTMENT L DEPARTCENTILLIAM F. HOWSLL - DIRECTOR DEPARTMENT OF OPERATIONS - S OPERATIONAL ERVICE WESTERN HEMISPHERE DEPARTMENTS DEPARTMENTS J. BURKE KNAPP - DIRECTOR TREASURER'S DEPARTMENT DEPARTMENT OF HENRY W. RILEY - TREASURER TECHNICAL OPERATIONS _ MILTON C. CRO~SS-DIRECTOR [ MARKETING DEPARTMENT OFFICE OF PUBLIC RELATIONS GEORGE L. MARTIN - DIRECTOR HAROLD N. GRAVES, JR. - DIRECTOR [42 ] Organization and later to be the U. S. President During the past year the Special Training of the Joint United States-Brazilian Economic De- Program has provided training in public finance velopment Commission. for budget officials of Pakistan and Turkey, to an Mr. Henry W. Riley, formerly Assistant agricultural credit official of the Philippines, to a Treasurer, was appointed Treasurer in January central bank official of Greece, and to a planning 1953 in succession to Mr. D. Crena de Iongh, officer of Pakistan. In its three years of operation, who resigned and became Executive Director for this program has had 12 participants from nine the Netherlands. member countries. In addition, the Bank made In February 1953 Mr. Francois-Didier special training arrangements during the year for Gregh was appointed Director of Operations- officials of the Industrial Development Bank of Asia and Middle East. Mr. Gregh had been Di- Turkey, for engineers of the Pakistan Govern- rector of the Budget in the French Ministry of ment, and for two German and two Japanese Finance, and immediately before joining the Bank Government officials. was a Director of the Credit Lyonnais in Paris, in charge of marketing and investments. Staff Retirement Plan In April 1953 Mr. Milton C. Cross was ap- The Plan began its sixth year of operation in pointed Director of Technical Operations. He is May 1953, and approximately 45 % of the Bank's on leave of absence from his position as Executive staff now has five years or more of eligible service. Vice President and director of the United States At the end of 1952, the total assets of the Plan investment firm of Harriman Ripley & Co., In- were $2,178,600, an increase of approximately corporated. $475,000 over the previous year; the investment During the fiscal year there have been 57 portfolio contained securities with a book value appointments to the permanent staff of the Bank of $2,134,100 and a market value of $2,296,400. and 64 terminations. On June 30, 1953 there were 426 permanent staff members from 24 coun- Joint Services of the Bank and the Fund tries. Four of the eight members of the Bank's At the Seventh Annual Meeting, the Board 1953 General Training Program were nationals of Governors raised the question of operating fur- of countries not represented by permanent staff ther services jointly with the International Mone- members. tary Fund. A committee was appointed by the President of the Bank and the Managing Director Training Programs of the Fund to investigate the feasibility of in- The Bank's General Training Program (for- creasing the sphere of joint Bank-Fund services. merly called the Junior Professional and Adminis- trative Program) is designed to give young men Administrative Budget and women from the Bank's member countries The Administrative Budget of the Bank for experience with general problems of economic de- the fiscal year ending June 30, 1954 appears in velopment and with the Bank's operations. The this Report as Appendix I. The budget was fifth year of this program began on January 1, prepared by the President and approved by the 1953, with the enrollment of trainees from Cey- Executive Directors in accordance with Section 19 lon, China, the Dominican Republic, Iraq, Nica- of the By-Laws. In the absence of new develop- ragua, Pakistan, the Philippines and Thailand. ments, no report is being submitted to the Board Citizens of 34 of the Bank's members have par- of Governors on the Advisory Council, and no ticipated in this training and selections are now provision is made for the Council in the budget. being made from candidates for the sixth annual A special report on the budget is being presented course. to the Board of Governors at the Annual Meeting. [43] Chapter V-Miscellaneous Relations with Other International of the Bank and the Managing Director of the Organizations Fund with the Executive Chairman of the Tech- Durinig the year the Bank continued to main- nical Assistance Board and the Director-General tain close relations with the International More- of the United Nations Technical Assistance Ad- tary Fund, the United Nations and other interna- ministration. tional organizations. As in the past, representa- The arrangements have continued under tives of the Bank attended meetings of the United which the agricultural and forestry experts for the Nations General Assembly and the Economic and Bank's general survey missions have been nomi- Social Council. In addition, the Bank was repre- nated by the Food and Agriculture Organization sented at meetings of other international agencies of the United Nations, and the costs of their when subjects of interest to the Bank were dis- services shared by the Organization. The Inter- cussed. national Monetary Fund furnished a staff member The President of the Bank presented a report to serve on an operational mission to Burma; and on the Bank's activities to the Fifteenth Session of a number of other international and national or- the Economic and Social Council in New York. ganizations have made staff available for technical In May 1953, in accordance with a resolution assistance and for operational activities. adopted by the Council at its Thirteenth Session, Bank representatives attended the Central he transmitted a report on the status of the pro- American seminar on agricultural credit, held in posal for an International Finance Corporation Guatemala City under the auspices of the Food (see below) to the Secretary General of the United and Agriculture Organization, the Economic Com- Nations. mission for Latin America and the Government During the course of the year the President of Guatemala. The Bank was also represented at of the Bank also attended several meetings of the the Sao Paulo seminar on land problems, spon- United Nations Administrative Committee on Co- sored by the Food and Agriculture Organization ordination, and staff members attended meetings and the Government of Brazil. of its subsidiary committees. The Bank also kept Intern in touch with the United Nations regional com- ational Finance Corporation missions and the Organization of American States, In May 1953 the President of the Bank and attended some of the meetings. transmitted a report to the Secretary General of The Bank was represented at numerous the United Nations, setting forth the present meetings of the United Nations Technical Assist- status of the proposal to set up an International ance Board and of the Technical Assistance Com- Finance Corporation. Establishment of this body mittee, which reviews the Board's activities on was proposed by the United States International behalf of the Economic and Social Council. In- Development Advisory Board in 1951. It would formation continued to be exchanged with repre- be a corporation, affiliated with the Bank, au- sentatives of the specialized agencies concerned thorized to make loans to private enterprise with- with technical assistance, and a series of meetings out governmental guarantee and to make equity to assure coordination was held by the President investment in participation with private investors. [ 44 ] As requested by the United Nations Eco- the Economic and Social Council, to be held in nomic and Social Council, the Bank studied this Geneva in July 1953. proposal and in April 1952 transmitted to the Council A Report on the Proposal for an Inter- Membership and Subscription national Finance Corporation. This was discussed Japan, with a subscription of $250 million, at the meeting of the Council immediately fol- the Federal Republic of Germany, with a sub- lowing and, in the later part of 1952, by the scription of $330 million, and Jordan, with a Second Committee of the United Nations General subscription of $3 million, became members of Assembly. The General Assembly approved a the Bank on August 13, 14 and 29, 1952, re- resolution adopted by the Council noting that the spectively. Bank membership was thus raised to Bank was continuing its examination of the pro- 54, and its total subscribed capital to $9,036,- posal and requesting a report on the results of the 500,000. Applications for membership from Bank's further exploration. Indonesia, with a subscription of $110 million, The report of May 1953 briefly reviews the and Haiti, with a subscription of $2 million, were main opinions expressed at the United Nations approved by the Board of Governors at the Sev- meetings, at the Bank's Seventh Annual Meeting enth Annual Meeting. These countries have until and in informal talks by Bank officers with offi- September 16, 1953 to accept membership. cials of member governments and representatives of business and finance. It points out that coun- Appendices tries on whom the Corporation would necessarily As well as appendices A through I contain- have to depend for the greater part of its funds ing the financial statements and the administrative have not yet indicated that they are ready to com- budget of the Bank, there are also included the mit themselves to subscribe to its capital; for this following: reason, there would be no object in further for- Appendix J-Voting Power and Subscrip- malizing the project at present. The report also tions of Member Countries as of June states that the Bank intends to continue to explore 30, 1953. the matter with member governments, and will Appendix K-Governors and Alternates as be prepared to present concrete proposals for their of June 30, 1953. consideration if and when there is a reasonable Appendix L-Executive Directors and Al- prospect that sufficient financial participation will ternates and their Voting Power as of be forthcoming. June 30, 1953. The International Finance Corporation pro- Appendix M-Principal Officers of the Bank posal is on the agenda of the Sixteenth Session of as of June 30, 1953. [45] APPENDICES Appendix Page A-Balance Sheet-June 30, 1953 .................................. 48 B-Comparative Statement of Income and Expenses for the Fiscal Years ended June 30, 1952 and June 30, 1953 ........................ 50 C-Statement of Currencies Held by the Bank-June 30, 1953 .......... 51 D-Statement of Subscriptions to Capital Stock and Voting Power- June 30, 1953 ............................................. 52 E -Funded Debt of the Bank-June 30, 1953 ........................ 53 F-Statement of Loans-June 30, 1953 ............................. 54 G-Notes to Financial Statements- June 30, 1953 .................... 60 H-Opinion of Independent Auditor ................................ 62 I-Administrative Budget for the Fiscal Year Ending June 30, 1954 ...... 63 J-Voting Power and Subscriptions of Member Countries as of June 30, 1953 .................................................... 64 K-Governors and Alternates as of June 30, 1953 ..................... 65 L-Executive Directors and Alternates and their Voting Power as of June 30, 1953 . ............................................ 66 M-Principal Officers of the Bank as of June 30, 1953 ................ 68 [ 47 ] APPENDIX A Balance Shee EXPRESSED IN UNITED STATES CURRENC ASSETS Due from Banks and Other Depositories (See APPENDIX C) Member currencies, including $4,899,095 United States Dollars Unrestricted. $ 5,890,196 Subject to restrictions-NOTE B ................. 102,231,817 $ 108,122,013 Non-member currency 14,856,599 $ 122,978,612 Investment Securities United States Government obligations ($374,460,000 face amount; at cost less amortized premium) . . $374,196,887 Canadian Government obligations (Can $5,000,000 face amount; at cost plus accumu- lated discount) ............................. . 4,523,366 United Kingdom Government obligations (£2,945,000 face amount; at cost) ............... 8,197,082 $ 386,917,335 Accrued interest ..1,129,342 388,046,677 Receivable on Account of Subscribed Capital (See APPENDIX D) Receivable in United States currency Calls on subscription to capital stock-NOTE C.. . $ 3,545,000 Receivable in other member currencies-NOTE B Non-negotiable, non-interest-bearing, demand notes $903,200,804 Amounts required to maintain value of currency holdings-NOTE B ........................... 861,584 904,062,388 907,607,388 Loans Outstanding Held by Bank (See APPENDIX ,F)- NOTE D 1,416,943,077 Accrued Interest, Commitment and Service Charges on Loans-NOTE D 8,191,020 Other Receivables and Other Assets 574,926 Special Reserve Fund Assets-NOTE E Due from Banks-member currency-United States.. . $ 135 Investment securities-United States Government obli- gations ($34,913,000 face amount; at cost) 34,889,449 Accrued loan commissions-NOTE D 2,346,893 37,236,477 Staff Retirement Plan Assets (Segregated and held in trust) 2,397,446 Total Assets $2,883,975,623 [48] APPENDIX A June 30, 1953 Note A of Notes to Finaencial Statements, Appendix G LIABILITIES, RESERVES AND CAPITAL Liabilities Accounts payable and accrued expenses, including $5,390,168 bond interest. . $ 5,853,553 Collection on loan in advance of due date 293,371 Undisbursed balance of loans (See APPENDIX F) On loans held by Bank .......................................... $ 396,019,253 On loans represented by obligations of borrowers sold under guar- antee-NOTE F ...................... 1,988,010 398,007,263 Funded debt (See APPENDIX E) (Of this amount $12,326,934 is due within one year) 556,374,002 Bonds called for redemption not presented. $ 2,020 Less funds on deposit with Fiscal Agent therefor . ....... 2,020 Reserves for Losses Special reserve-NOTE E.$ 37,236,477 Supplemental reserve against losses on loans and guarantees-NOTE G. 76,513,511 113,749,988 Staff Retirement Plan Reserve 2,397,446 Capital (See APPENDIX D) Capital stock Authorized 100,000 shares of $100,000 par value each Subscribed 90,365 shares.. $9,036,500,000 Less-Uncalled portion of subscriptions-NOTE H .. 7,229,200,000 1,807,300,000 Contingent Liability-OBLIGATIONS OF BORROWERS OUTSTAND- ING SOLD UNDER GUARANTEE-NOTE F ............ $27,640,835 Total Liabilities, Reserves and Capital $2,883,975,623 [ 491 APPENDIX B Comparative Statement of Income and Expenses For the Fiscal Years Ended June 30, 1952 and June 30, 1953 EXPRESSED IN UNITED STATES CURRENCY See Note A of Notes to Financial Statements, Appendix G July 1-June 30 1951-1952 1952-1953 Income Interest earned on investments .......................... $ 8,500,740 $ 9,245,538 Income from loans: Interest.. . 23,669,009 29,983,062 Commitment charges.. 2,838,343 3,366,376 Commissions.. 7,558,906 9,551,822 Service charges .... ..80,203 99,879 Other income. 100,449 144,352 Gross Income $42,747,650 $52,391,029 Deduct-Amount equivalent to commissions appropriated to Special Reserve- NOTE E.. 7,558,906 9,551,822 Gross Income Less Reserve Deduction $35,188,744 $42,839,207 Expenses Administrative expenses: Personal services.. $ 3,132,058 $ 3,373,732 Expense allowance-Executive Directors and Alternates . .......... 5,144 775 Fees and compensation .................................................. 318,832 317,772 Representation ......... 56,092 61,178 Travel ..............................................................5 38,211 843,360 Supplies and material ........................... 42,574 33,636 Rents and utility services... . 397,770 432,430 Communication services .......................... 114,332 111,476 Furniture and equipment .........33,586 26,241 Motor vehicles.. 4,907 5,646 Books and library services ........................ 69,463 71,720 Printing ..... 67,765 67,946 Contributions to staff benefits.. 336,559 344,394 Insurance .............................................................. 16,704 31,864 Handling and storage of gold ....................... 2,080 Other expenses ......................................................... 1,281 2,100 Total Administrative Expenses ... $ 5,137,358 $ 5,724,270 Interest on bonds ......................................................... 11,793,631 16,208,117 Bond issuance and other financial expenses-NOTE I . .............. 2,346,692 2,421,409 Exchange adjustments.. 38,180 Gross Expenses $19,315,861 $24,353,796 Net Income-Appropriated to Supplemental Reserve Against Losses on Loans and Guarantees-NOTE G. $15,872,883 $18,485,411 [ 50] APPENDIX C Statement of Currencis Held by the Bank-June 30, 1953 See Note A of Notes to Financial Statements, Appendix G Amount Expressed Total Expressed Unit of In Member Currency in Ulnited States Currency (Restricted) Rate of Exchange Dollars Member Currencies Australia Pound 156,494 $ = 0.4464 $ 350,546 Austria Schilling 4,390,500 $ = 26.00 168,865 Belgium Franc 13,233,381 $ = 50.00 264,668 Bolivia Boliviano 710,308 S = 190.00 3,739 Brazil Cruzeiro 348,509,769 $ = 18.50 18,838,366 Burma Kyat 113,263 $ = 4.7619 23,785 Canada Dollar 4,052,654 $ = 1.10 3,684,231 Ceylon Rupee 117,284 $ = 4.7619 24,630 Chile Peso 194,101,453 $ = 31.00 6,261,337 China Gold Yuan 21,550,341 $ = 20.00 1,077,517 Colombia Peso 12,203,444 $ = 1.950 6,258,237 Costa Rica Col6n 1,996,515 $ = 5.615 355,568 Cuba Peso 56,949 $ = 1.00 56,949 Czechoslovakia Koruna 10,980,338 $ = 50.00 219,607 Denmark Krone 1,174,077 $ = 6.90714 169,980 Dominican Republic Peso 982 $ = 1.00 982 Ecuador Sucre 8,583,456 $ = 15.00 572,230 Egypt Pound 20,790 $ = 0.3482 59,699 El Salvador Col6n 436,428 $ = 2.50 174,571 Erhiopia Dollar 1,283,760 $ = 2.4845 516,713 Finland Markka 1,572,124,313 $ = 230.00 6,835,323 France Franc 1,855,573,111 $ = 349.60 5,307,703 Germany Mark 2,558,594 $ = 4.20 609,189 Greece Drachma 22,500,000,000 $ = 5,000.00 4,500,000 Guatemala Quetzal 349,750 $ = 1.00 349,750 Honduras Lempira 355,400 $ = 2.00 177,700 Iceland Kr6na 2,865,709 $ = 16.2857 175,965 India Rupee 3,092,189 $ = 4.7619 649,360 Iran Rial 1,290,158 $ = 32.25 40,005 Iraq Dinar 2,720 $ = 0.3571 7,616 Italy Lira 13,069,669 $ = 350.00 37,342 Japan Yen 159,488,280 $ = 360.00 443,023 Jordan Dinar 1,697 $ = 0.3571 4,752 Lebanon Pound 1,745,589 $ = 2.1915 796,534 Luxembourg Franc 670,735 $ = 50.00 13,415 Mexico Peso 100,275,487 $ = 8.65 11,592,542 Netherlands Guilder 761,236 $ = 3.80 200,325 Nicaragua C6rdoba 660,383 $ 5.00 132,077 Norway Krone 1,174,049 $ = 7.1429 164,367 Pakistan Rupee 484,660 $ = 3.3085 146,488 Panama Balboa 30,595 $ = 1.00 30,595 Paraguay Guarani 1,293,287 $ = 6.00 215,548 Peru Sol 163,489 $ 6.50 25,152 Philippine Republic Peso 2,376,584 $ 2.00 1,188,292 Sweden Krona 90,655,160 $ = 5.1732 17,523,967 Syria Pound 40,835 $ = 2.1915 18,633 Thailand Baht 86,997 $ = 12.50 6,960 Turkey Lira 49,798 $ = 2.80 17,785 Union of South Africa Pound 253,317 $ = 0.3571 709,288 Unired Kingdom Pound 252,434 $ = 0.3571 706,816 United States Dollar 116,308 $ = 116,308 Uruguay Peso 2,825,818 $ = 1.519 1,860,254 Venezuela Bolivar 4,563,097 $ = 3.35 1,362,119 Yugoslavia Dinar 2,155,321,302 $ = 300.00 7,184,404 Restricted Currency (NOTE B) $102,231,817 Unrestricted Currency (Belgium, Canada, United Kingdom and United States) 5,890,196 $108,122,013 Non-Member Currency (Switzerland) 14,856,599 Total $122,978,612 [ 51 ] APPENDIX D Statement of Subscriptions to Capital Stock and Voting Power June 30, 1953 EXPRESSED IN UNITED STATES CURRENCY See Note A of Notes to Financial Statements, Appendix G Amounts Paid in Amounts Required to In Currency of Non-Interest- Maintain Subject to Subscriptions Member Other Bearing, Non- Value of Call to Meet Than United Negotiable Cerrency Amounts Obligations Nuimber Amount United States States Dollars Demand Notes Holdinzgs Due of Bank of Member Shares (Note J) Dollars (NVote B) (Note B) (Note B) (Note C) (Note H) Votes Australia 2,000 $ 200,000,000 $ 4,000,000 $ 360,368 $ 35,639,632 $ - $- $ 160,000,000 2,250 Austria 500 50,000,CCO 1,000,000 183,633 8,816,367 - - 40,000,000 750 Belgium 2,250 225,000,000 4,500,000 3,844,422 36,655,578 - - 180,000,000 2,500 Bolivia 70 7,COO,000 140,000 4,500 393,916 861,584 - 5,600,000 320 Brazil 1,050 105,COO,000 2,100,000 1S,900,COO - - - 84,000,00O 1,300 Burma 150 15,000,000 300,coo 27,000 2,673,000 - 12,000,000 400 Canada 3,250 325,000,000 6,500,000 27,053,182 31,446,S18 - 260,000,000 3,500 Ceylon 150 15,0CO,000 300,000 32,997 2,667,603 - 12,000,000 400 Chile 350 35,000,000 700,000 6,300,000 - - - 28,000,000 600 China 6,000 600,000,000 9,080,000 1,080,000 106,920,000 - 2,920,000 480,000,000 6,250 Colombia 350 35,000,000 700,000 6,300,000 - - - 28,000,000 600 Costa Rica 20 2,000,000 40,000 360,000 - -- - 1,600,000 270 Cuba 350 35,000,000 700,000 63,000 6,237,000 - 28,000,000 600 Czechoslovakia 1,250 125,000,000 1,875,000 225,000 22,275,000 625,000 100,000,000 1,500 Denmark 680 68,000,000 1,360,000 991,066 11,248,934 - - 54,400,000 930 Dominican Rep blic 20 2,000,000 40,000 3,600 356,400 - - 1,6C0,000 270 Ecuador 32 3,200,000 64,000 576,000 - - 2,560,000 282 Egypt 533 53,300,000 1,066,000 95,940 9,498,060 - - 42,640,000 783 El Salvador 10 1,000,000 20,000 180,000 - - 800,000 260 Ethiopia 30 3,000,000 60,0C0 540,000 - - 2,400,000 280 Finland 380 38,000,000 760,000 6,840,000 - - - 30,400,000 630 France 5,250 525,0CO,000 10,500,000 15,781,464 78,718,536 - 420,000,000 5,500 Germany 3,300 330,0C0,000 6,600,000 614,286 58,785,714 -- - 264,000,000 3,550 Greece 250 25,000,000 50,COO 4,500,000 - - 20,000,000 500 Guatemala 20 2,0C3,000 40,000 360,000 - - - 1,600,000 270 Honduras 10 1,0C0,0C0 20,000 180,000 - - - 800,000 260 Iceland 10 1,0^3,000 20,000 180,000 - - 800,000 260 India 4,000 400,0 00 8,000,000 721,S00 71,27S,200 - - 320,000,000 4,250 Iran 336 33,600,000 672,000 60,480 5,987,520 - - 26,880,000 586 Iraq 60 6,000,000 120,000 20,SS0 1,059,120 - - 4,800,000 310 Italv 1,S00 918,000,C00 3,600,0C0 2,257,143 30,142,857 - - 144,0CO,000 2,050 Japan 2,500 250,00,C030 5,000,003 450,000 44,550,000 - - 200,000,000 2,750 Jordan 30 3,000,000 60,000 5,400 534,600 --- 2,40O,000 280 Lebanon 45 4,500,000 90,000 810,003 3,600,000 295 Luxembourg 1C0 10,G00',000 200,000 18,000 1,782,000 - - 8,O00,00O 350 Mexico 650 65,0CO,000 1,300,000 11,700,000 - - - 52,000,000 900 Netherlands 2,750 275,0CC,000 5,500,000 552,632 48,947,368 - - 220,000,000 3,000 Nicaragua 8 8C0,0O0 16,000 144,000 640j000 258 Norway 500 50,0CC,OC0 1,000,000 272,000 8,728,000 - - 40,000,000 750 Pakistan 1,000 l00,00C,000 2,0C0,000 180,003 17,819,992 -- -- 80,000,O00 1,250 Panama 2 200,C00 4,000 36,000 - - - 160,000 252 Paraguay 14 1,40C,C00 28,C00 252,000 - - - 1,120,000 264 Peru 175 17,500,000 350,000 62,269 3,087,731 - - 14,000,000 425 Philippines 150 15,C0O,C00 300,000 1,200,000 1,500,000 - -- 12,030,000 400 Swedeni 1,000 100,CC0,C00 2,000,030 18,000,000 - - 80,000,000 1,250 Syria 65 6,500,C00 130,000 43,642 1,126,358 - - 5,200,000 315 Thailand 125 12,500,000 250,000 32,500 2,217,500 - - 10,000,000 375 Turkev 430 43,0CO,000 860,C00 77,400 7,662,600 - - 34,400,000 680 Union of South Africa 1,000 100,000,000 2,000,000 2,140,000 15,860,000 - - 80,000,000 1,250 United Kingdom 13,000 1,300,030,000 26,000,000 5,940,000 228,060,000 - - 1,040,000,000 13,250 United States 31,750 3,175,000,000 635,003,000 - - - - 2,540,030,000 32,000 Uruguay 105 10,500,000 210,000 1,890,000 - - 8,400,000 355 Venezuela 105 10,500,000 210,030 1,365,000 525,000 - - 8,400,000 355 Yugoslavia 400 40,000,000 800,000 7,200,000 - - - 32,000,000 650 90,365 $9,036,500,000 $748,685,000 $151,007,612 $903,200,804 $861,584 $3,545,000 $7,229,200,000 103,865 [ 52 ] APPENDIX E Funded Debt of the Bank-June 30, 1953 EXPRESSED IN UNITED STATES CURRENCY See Note A of Notes to Financial Statements, Appendix G Principal Annual Sinking Issue and Maturity Outstanding Fund Requirement Payable in United States Dollars 2% Serial Bonds of 1950, due 1954-62 $ 90,000,000 None 31 7% Nineteen Year Bonds of 1952, 1957-66 $2,000,000 due 1971 60,000,000 1967-70 $2,500,000 3% Twenty-Five Year Bonds of 1947, 1958-62 $3,000,000 due 1972 150,000,000 1963-67 $4,500,000 1968-72 $7,500,000 3s8% Twenty-Three Year Bonds of 1952, 1958 $1,000,000 due 1975 50,000,000 1959-74 $1,500,000 3%O Twenty-Five Year Bonds of 1951, 1963 $1,000,000 due 1976 50,000,000 1964-75 $2,000,000 314% Thirty Year Bonds of 1951, 1966-67 $2,000,000 due 1981 100,000,000 1968-73 $3,000,000 1974-80 $4,000,000 Sub-Total $500,000,000 Payable in Canactianz Dollars 4% Ten Year Bonds of 1952, due 1962 1955-60 Can $700,000 (Can $15,000,000) $ 13,636,364 1961 Can $800,000 Payable in Pounds Sterling 312% Twenty Year Stock of 1951, due 1971 (£5,000,000) $ 14,060,000 1957-71 £166,700 Payable in Swiss Francs 2'27% Serial Bonds of 1950, due 1953-56 (Sw fr 23,500,000) $ 5,468,296 None 3'2%0 Ten Year Bonds of 1952, due 1962 (Sw fr 50,000,000) 11,634,671 None 3Y2%G Twelve Year Bonds of 1951, due 1963 (Sw fr 50,000,000) 11,634,671 None Sub-Total $ 28,737,638 Gross Total $556,374,002 Each issue, except the 2% Serial Bonds of 1950, is subject to redemption prior to maturity at the option of the Bank at varying prices and upon the conditions stated in the respective bonds. The amounts shown as annual sinking fund requirements are the principal amounts of bonds to be purchased or redeemed to meet each vear's requirerment, except that in the case of the 3123% Twenty Year Stock of 1951 the amrount shown is the amount of funds to be pfovided annually for purchase or redemption. The followin,g table shows the aggregate principal amount of the maturities and sinking fund requirements of the debt each year for the five years following June 30, 1953: Yea; Ending Juam 30 Amoant 1954....... $12,326,934 1955....... 12,614,258 1956........... 11,799,831 1957....... 11,103,124 1958....... 14,103,124 Total .... $61,947,271 On June 3, 1953 the Bank entered into an agreement with its Swiss banking group for the issuance of 31 2% bonds in the aggregate principal amount of Swiss francs 50,000,000. The bonds will be dated July 1, 1953 and will mature July 1, 1968. They were offered to the public from June 10 through June 16 and payment is to be made by the banking group to the Bank on July 1, 1953. [53 ] APPENDIX F Statement of Loan. EXPRESSED IN UNITED STATES CURRENC2 Loan Date of Numynber Borrower and Guarantor Program or Project Loan Agreement Maturltfi 29 AU Australia Equipment and materials for development Aug. 22, 1950 1955-197' 66 AU Equipment and materials for development July 8, 1952 1957-197T 14 BE Belgium Equipment for steel and power industries Mar. 1, 1949 1953-196c- 48 BE Equipment and materials for 10-year De- velopment Plan of the Belgian Congo Sept. 13, 1951 1957-197( Belgium (Guarantor) 47 BE Belgian Congo Equipment and materials for 10-year De- velopment Plan of the Belgian Congo Sept. 13, 1951 1957-197C 65 BR BraZil Railway rehabilitation June 27, 1952 1955-196. *75 BR Highway maintenance and improvement April 30, 1953 1954-195' Brazil (Guarantor) 11 BR Brazilian Traction (First Installment) Electric power development and telephone equipment Jan. 27, 1949 1953-197 11 BR-S Brazilian Traction (Second Installment) Electric power development Jan. 18, 1951 1955-197i 25 BR Sao Francisco Hidro E1ec. Co. Electric power development May 26, 1950 1954-197 64 BR Comissao Estadual de Energia Eletrica Electric power development June 27, 1952 1957-19/ Chile (Guarantor) 5 CH Fomento and Endesa Electric power development Mar. 25, 1948 1953-196: 6 CH Fomento Agricultural development Mar. 25, 1948 1950-195 49 CH Fomento Exploration and use for irrigation of under- t'0_ ground water resources Oct. 10, 1951 1955-196 43 CO Colombia Highway construction and rehabilitation Apr. 10, 1951 1954-196 68 CO National railways project Aug. 26, 1952 1957-197: Colombia (Guarantor) 18 CO Caja de Crcdito Agricultural development Aug. 19, 1949 1952-195. 38 CO CHIDRAL Electric power development Nov. 2, 1950 1954-1971 39 CO Caldas Hidro-Elec. Co. Electric power development Dec. 28, 1950 1952-197 54 CO Hidroclectrica del Rio Lebrija Electric power development Nov. 13, 1951 1954-197. 3 DE Denmark Equipment and materials for reconstruction and development Aug. 22, 1947 1953-197: El Salvador (Guarantor) 22 ES Comisi6n del Rio Lempa Electric power development Dec. 14, 1949 1954-197 31 ET Ethiopia Highway rehabilitation Sept. 13, 1950 1956-197- 32 ET Foreign exchange for Development Bank Sept. 13, 1950 1956-197 *42 ET Rehabilitation and extension of telephone and telegraph systems Feb. 19, 1951 1956-197- 21 FI Finland Equipment for timber production Oct. 17, 1949 1950-195- Finland (Guarantor) 16 Fl Bank of Finland Electric power development and equipment for wood products industries and lime- stone powder production Aug. 1, 1949 1953-196 61 Fl Bank of Finland Electric power, wood products industries and agricultural development Apr. 30, 1952 1955-197( 70 Fl Bank of Finland Electric power, wood products industries and agricultural development (Supple- mental Loan Agreement) Nov. 13, 1952 1955-197i [54] APPENDIX F June 30, 1953 ee Notes A, D and F of Notes to Financial Statements, Appendix G Interest Undisbursed Rate Original Loans Cancellations Principal Obligations Effective Loans Principal Balance of Including Principal Not Yet and Repayments of Borrowers Outstanding Amount Effective "mm!ss!on) Amount Effective Refundings to Bank Sold by Bank Held by Bank Disbursed Loans, 414% $100,000,000 $ - $ $ - $ - $100,000,000 $ 91,297,518 $ 8,702,482 4Y4% 50,000,000 - - - 50,000,000 11,226,595 38,773,405 4Y4%0 16,000,000 - - - 16,000,000 - 14,011,990 1,988,010 4Y2% 30,000,000 - - - - 30,000,000 16,071,000 13,929,000 4Y270 40,000,000 - - - 40,000,000 21,433,000 18,567,000 4Y8% 12,500,000 - - - 12,500,000 - 12,500,000 414% 3,000,000 3,000,000 - - - - - - 412% 75,000,000 - - - 3,632,818 71,367,182 73,790,903 1,209,097 414% 15,000,000 - - - - 15,000,000 11,940,522 3,059,478 4Y4% 15,000,000 - - - - 15,000,000 12,320,279 2,679,721 434% 25,000,000 - - - - 25,000,000 - 25,000,000 4'2% 13,500,000 - - - - 13,500,000 11,154,764 2,345,236 334% 2,500,000 - - 518,000 1,490,000 492,000 2,500,000 - 4Ys% 1,300,000 - - - - 1,300,000 729,158 570,842 3 8% 16,500,000 - - 300,000 16,200,000 13,424,984 3,075,016 434% 25,000,000 - - - - 25,000,000 2,808,638 22,191,362 312% 5,000,000 - 74,559 500,000 2,000,000 2,425,441 4,925,441 - 4% 3,530,000 - - - 73,000 3,457,000 2,805,546 724,454 4% 2,600,000 - - 46,000 144,000 2,410,000 2,584,013 15,987 4Y2% 2,400,000 - - - 42,000 2,358,000 1,890,151 509,849 414% 40,000,000 - - 599,000 619,000 38,782,000 40,000,000 - 414% 12,545,000 - - - 1,000,000 11,545,000 10,508,252 2,036,748 4% 5,000,000 - - - - 5,000,000 4,519,838 480,162 4%c 2,000,000 - - - - 2,000,000 659,279 1,340,721 4% 1,500,000 1,500,000 - - - - - - 3% 2,300,000 - 197,869 2,102,131 - - 2,102,131 - 4% 12,500,000 - - 63,990 1,559,010 10,877,000 12,187,468 312,532 434% 20,000,000 - - - - 20,000,000 7,693,103 12,306,897 434% 3,479,464 - - - 3,479,464 340,465 3,138,999 (Continued) [55 ] APPENDIX F Statement of Loan EXPRESSED IN UNITED STATES CURRENG Loan Date of NuAmber Borrower and Guarantor Program or Project Loan Agreement AMaturif-- France (Guarantor) 1 FR Cr&dit National Equipment and mnaterials for reconstruction and development May 9, 1947 1952-19/ 46 IC Iceland Electric power development June 20, 1951 1956-197 53 IC Agricultural development Nov. 1, 1951 1956-197 69 IC Fertilizer plant Aug. 26, 1952 1954-196 17 IN India Railway rehabilitation Aug. 18, 1949 1950-196 19 IN Agricultural development Sept. 29, 1949 1952-195 23 IN Electric power development Apr. 18, 1950 1955-197 *72 IN Electric power development, flood control and irrigation Jan. 23, 1953 1956-19, India (Guarantor) *71 IN Indian Iron & Steel Company Expansion of iron and steel production facilities Dec. 18, 1952 1959-19( 26 IRQ Iraq Construction of a flood control project June 15, 1950 1956-19( Italy (Guarantor) 50 IT Cassa per Il Mezzogiorno Equipment and materials for 10-year De- velopment Plan of Southern Italy Oct. 10, 1951 1956-19 4 LU Luxembourg Equipment for steel mill and railroads Aug. 28, 1947 1949-19 Mexico (Guarantor) 12 ME Financiera and Comisi6n Electric power development Jan. 6, 1949 1953-19 13 ME Financiera and Comisi6n Electric power development Jan. 6, 1949 July 1, 19: 24 ME Mexican Light and Power Co. Ltd. Electric power development Apr. 28, 1950 1953-19 33 ME Consortium of Eight Mexican Banks Foreign exchange for small private enter- and Nacional Financiera prises Oct. 18, 1950 1952-19: 56 ME Financiera and Comision Electric power development Tan. 11, 1952 1955-19. 2 NE Netherlands Equipment and materials for reconstruction and development Aug. 7, 1947 1954-19 2a NE Equipment and materials for reconstruction and development (Supplemental Loan Agreement) May 25, 1948 1953-192 Netherlands (Guarantor) 7, 7a NE N.V. Stoomvaart Mij. "Nederland" Purchase of S.S. Raki and S.S. Roebiah July 15, 1948 1949-192 8 NE N.V. Vereenigde Schvrt. Mij. Purchase of S.S. Almkerk July 15, 1948 1949-192 9 NE N.V. Ned.-Amer. Stoomvaart-Mij. Purchase of S.S. Alblasserdijk July 15, 1948 1949-192 "Holland-Amerika Lijn" 10, 1Ca N.V. Rotterdamsche Lloyd Purchase of S.S. Friesland and S.S. Drente July 15, 1948 1949-192 NE 15 NE Herstelbank Equipment for reconstruction and modern- ization of particular industrial plants July 26, 1949 1952-19( 59 NE KLM Royal Dutch Airlines Purchase of Aircraft Mar. 20, 1952 1954-192 45 NI Nicaragua Highway construction June 7, 1951 1954-19( 52 NI Construction of grain storage facilities Oct. 29, 1951 1954-19( Nicaraguza (Guarantor) 44 NI Banco Nacional de Nicaragua Agricultural development June 7, 1951 1954-19' 60 PAK Pakistan Railway rehabilitation Mar. 27, 1952 1954-19t *62 PAK Agricultural development June 13, 1952 1954-19' [561 APPENDIX F June 30, 1953 (Continued) See Notes A, D and F of Notes to Financial Statements, Appendix G Interest Undisbarsed Rate Original Loans Cancellations Principal Obligations Effective Loans Principal Balance of (Including Principal Not Yet and Repayments of Borrowers Outstanding Amount Effective Commission) Amournt Effective Refunadings to Bank Sold by Bank Held by Bank Disbursed Loans' 4Y4% $ 250,000,000 $ - $ - $ - $ 6,772,000 $ 243,228,000 $250,000,000 $ - 4Ys% 2,450,000 - - - - 2,450,000 2,063,347 386,653 412% 1,008,000 - - - 1,008,000 1,008,000 - 434% 854,000 - - - 854,000 362,659 491,341 4% 34,000,000 - 1,200,000 4,087,759 4,581,847 24,130,394 32,800,000 - 312% 10,000,000 - 2,500,000 850,000 3,355,000 3,295,000 5,340,326 2,159,674 4% 18,500,000 - - - - 18,500,000 13,733,086 4,766,914 47H% 19,500,000 19,500,000 - - - 434% 31,500,000 31,500,000 - 334% 12,800,000 - 12,800,000 5,513,345 7,286,655 4Y2% 10,000,000 - - - - 10,000,000 8,248,642 1,751,358 414% 12,000,000 - 238,017 187,983 1,678,000 9,896,000 11,761,983 - 412% 24,100,000 - - 393,000 1,135,300 22,571,700 19,972,234 4,127,766 412% 10,000,000 - 10,000,000(Refunding-- - - 4Y2% 26,000,000 - - - 606,000 25,394,000 24,664,757 1,335,243 3Y2% o 10000,000 - 9,467,641 99,778 - 432,581 493,699 38,660 412% 29,700,000 - - - - 29,700,000 8,936,243 20,763,757 414% 191,044,212 - - - 2,265,000 188,779,212 191,044,212 - 4Y4% 3,955,788 - - - 3,955,788 - 3,955,788 3Y16% 4,000,000 - - - 4,000,000 - 4,0CO,000 - 3Y16% 2,000,000 - - - 2,000,000 - 2,000,000 - 3Y'6% 2,000,000 - - - 2,000,000 - 2,000,000 - 3V16% 4,000,000 - - - 4,000,000 - 4,000,000 - 4% 15,000,000 - 7,070,000 275,669 1,749,331 5,905,000 7,176,277 753,723 41Ys% 7,000,000 - - - 3,500,000 3,500,000 3,767,134 3,232,866 41 V% 3,500,000 - - - - 3,500,000 1,499,618 2,000,382 43 8% 550,000 - - - 550,000 523,918 26,082 4% 1,200,000 - - 245,000 - 955,000 1,132,911 67,089 4Y8% 27,200,000 - - - 550,000 26,650,000 6,548,267 20,651,733 41 V% 3,250,000 3,250,000 - - (2) - - - (Continued) [57 APPENDIX F Statement of Loans EXPRESSED IN UNITED STATES CURRENCY Loan Date of Nember Borrower and Guarantor Program or Project Loan Agreement Maturities 55 PA Paraguay Agricultural development Dec. 7, 1951 1954-1960 57 PE Peru Port development Jan. 23, 1952 1954-1967 67 PE Agricultural development July 8, 1952 1954-1959 40 SA South Africa Expansion of transport facilities Jan. 23, 1951 1956-1965 South Africa (Guarantor) 41 SA Electricity Supply Commission Electric power development Jan. 23, 1951 1954-1970 35 TH Thailand Railway rehabilitation Oct. 27, 1950 1954-1966 36 TH Irrigation Oct. 27, 1950 1956-1971 37 TH Port construction and development Oct. 27, 1950 1954-1966 27 TU Turkey Construction of grain storage facilities July 7, 1950 1954-1968 28 TU Port construction and development July 7, 1950 1956-1975 63 TU Electric power development, irrigation and flood control June 18, 1952 1957-1977 Turkey (Guarantor) 34 TU Industrial Development Bank of Turkey Foreign exchange for development of private industry Oct. 19, 1950 1957-1965 United Kingdom (Guarantor) 58 SR Southern Rhodesia Electric power development Feb. 27, 1952 1956-1977 74 NR Northern Rhodesia Railway development Mar. 11, 1953 1956-1972 Uruguay (Guarantor) 30 UR U. T. E. Electric power development and telephone equipment Aug. 25, 1950 1955-1974 20 YU Yugoslavia Equipment for timber production Oct. 17, 1949 1950-1951 51 YU Equipment for electric power, coal mining, non-ferrous metal development, industry, forest products, agriculture and fishery, and transportation projects Oct. 11, 1951 1955-1976 73 YU Expansion of electric power, mining, in- dustry, forestry and transportation Feb. 11, 1953 1956-1978 TOTAL LOANS GRANTED * Denotes Loans Not Yet Effective. Of the Undisbursed Balance of Effective Loans, the following amounts have been irrevocably committed by the Bank: Loan Amount Expressed in Number Borrower To Whom Committed United States Currency 11 BR Brazilian Traction (First Installment-Brazil) To Borrowver $ 1,209,097 11 BR-S Brazilian Traction (Second Installment-Brazil) To Borrower 1,315,068 5 CH Fomento and Endesa (Chile) To Third Parties 198,124 38 CO Central Hidroelectrica del Rio Anchicaya Limitada (Colombia) To Third Parties 66,725 54 CO Central Hidroclectrica del Rio Lebrija, Limitada (Colombia) To Third Parties 237,792 32 ET Ethiopia (Development Bank Project) To Third Parties 16 FI Bank of Finland (Finland) To Third Parties 5,575 61 FI Bank of Finland (Finland) To Third Parties 1,032,928 26 IRQ Iraq To Third Parties 149,271 36 TH Thailand (Irrigation Project) To Third Parties 2,946 27 TU Turkey (Grain Storage Project) To Third Parties 973,341 28 TU Turkey (Port Project) To Third Parties 2,375,487 34 TU Industrial Development Bank (Turkey) To Third Parties 62,091 63 TU Turkey (Seyhan Project) To Third Parties 1,451,304 30 UR U. T. E. (Uruguay) To Third Parties 1,785,393 51 YU Yugoslavia To Third Parties 9,071,152 73 YU Yugoslavia To Third Parties 5,975,994 $25,912,288 2 Two American firms will participate in Loan Number 62 Pakistan to the extent of $498,500 each. s The amount of currency repayable may differ from the amount of currency disbursed as a result of the purchase of one currency with another for purpose of dis- bursement. The currency used to make the purchase is the currency repayable. The amount of currency disbursed does not represent total purchases in the country whose currency is indicated. [58] APPENDIX F June 30, 1953 (Continued) Notes A, D and F of Notes to Financial Statements, Appendix G Interest Undisbursed Rate Original Loans Cancellations Principal Obligations Eflective Loans Principal Balance of 1ncluding Principal Not Yet and Repayments of Borrowers Outstanding Amount Effective _- nsion) Amount Effective Refundings to Bank Sold by Bank Held by Bank Disbursed Loans, 43 s% $ 5,000,000 $ - $ - $ - $ $ 5,000,000 $ 699,838 $ 4,300,162 4Y2% 2,500,000 - - - 2,500,000 972,818 1,527,182 4 18%o 1,300,000 1,300,000 1,068,635 231,365 334% 20,000,000 - - -- 20,000,000 20,000,000 - 4%o 30,000,000 - - - 624,560 29,375,440 25,149,903 4,850,097 334% 3,000,000 - - - 95,000 2,905,000 1,479,672 1,520,328 4%o 18,000,000 - - - - 18,000,000 13,187,097 4,812,903 334% 4,400,000 - - - 275,000 4,125,000 2,062,653 2,337,347 3 Y8%o 3,900,000 _ _ _ 12,000 3,888,000 1,219,519 2,680,481 414% 12,500,000 - - - - 12,500,000 2,909,054 9,590,946 4%4% 25,200,000 - - - 25,200,000 1,257,804 23,942,196 334% 9,000,000 _ - - 9,000,000 2,103,400 6,896,600 434if% 28,000,000 - - 28,000,000 10,634,784 17,365,216 434% 14,000,000 - - - - 14,000,000 - 14,000,000 414% 33,000,000 - _ _ - 33,000,000 10,603,244 22,396,756 3% 2,700,000 - - 2,700,000 - - 2,700,000 - 4Y2% 28,000,000 - - 28,000,000 17,533,003 10,466,997 478% 30,000,000 - - - 30,000,000 4,208,207 25,791,793 $1,590,766,464 $58,750,000 $30,748,086 $12,668,310 $70,014,654 $1,418,585,414 $1,103,261,115 $398,007,263 Less exchange adjustment 1,642,337 1,416,943,077 SUMMARY BY CURRENCY (Expressed in United States Currency) Amount Amount Amount Recovered Principal Balance Currency Disbursed3 Repayables by Repayment or Sale Outstanding Austrian Schillings $ 13,963 ' $ 13,963 $ - $ 13,963 Belgian Francs 29,497,559 4,198,816 529,963 3,668,853 Canadian Dollars 51,173,999 39,328,696 4,520,866 34,807,830 Danish Kroner 1,089,629 831,357 - 831,357 French Francs 11,308,374 10,440,746 - 10,440,746 German Marks 6,629,360 - - - Italian Lire 3,452,602 2,087,986 - 2,087,986 Netherlands Guilders 2,262,357 268,816 - 268,816 Norwegian Kroner 191,006 106,788 - 106,788 South African Pounds 1,430,115 1,430,115 - 1,430,115 Swedish Kronor 4,218,827 490,465 - 490,465 Swiss Francs 18,704,807 19,424,917 6,857,974 12,566,943 United Kingdom Pounds 59,974,341 10,102,030 - 10,102,030 United States Dollars 913,314,176 1,014,536,420 70,774,161 943,762,259 $1,103,261,115 $1,103,261,115 $ 82,682,964 $1,020,578,151 Plus-Undisbursed Balance of Effective Loans 398,007,263 $1,418,585,414 [59] APPENDIX G Notes to Financial Statements-June 30, 1953 NOTE A with designated depositories in the territories of the Amounts in currencies other than United States respective member. dollars have been translated into United States dollars: Article II, Section 9 provides for the maintenance of value of such 18% currencies as follows: ( i) In the cases of 44 members, at the pat values established under the International Mone- (a) Whenever (i) the par value of a members tary Fund Agreement as specified in the most recent currency is reduced, or (ii) the foreign exchange issue of "Schedule of Par Values" dated May 15 value of a member's currency has, in the opinion 1953, and published by the International Monetary Of the Bank, debpreciatedritories, the member shall Fund; and wti htmme' ertre,temme hl pay to the Bank within a reasonable time an (ii) In the cases of the remaining 10 members additional amount of its own currency sufficient to (Burma, Canada, China, France, Greece, Italy, maintain the value, as of the time of initial sub- Jordan, Peru, Thailand and Uruguay), the par scription, of the amount of the currency of such values of whose currencies are not so specified, at member which is held by the Bank and derived the rates used by such members in making capital from currency originally paid in to the Bank by payments. the member under Article II, Section 7 (i), from (iii) In the case of non-member currency, all currency referred to in Article IV, Section 2 (b), Swiss francs, at the rate of 4.2975 Swiss francs to or from any additional currency furnished under one United States dollar. the provisions of the present paragraph, and which has not been repurchased by the member for gold On July 24 1953, the Bank received a cable from or for the currency of any member which is ac- Statni banka ceskoslovenska stating that in consequence ceptable to the Bank. of monetary reform and a new gold content of the Czechoslovak koruna the Bank's balances had been con- (b) Whenever the par value of a member's verted by them to new currency as of June 1, 1953. currency is increased, the Bank shall return to Since the Bank has not received from the Government such member within a reasonable time an amount of Czechoslovakia any information or request in respect of that member's currency equal to the increase in of such conversion, the Bank's holdings of currency and the value of the amount of such currency de- demand notes of Czechoslovakia as shown in Appendix scribed in (a) above. C and as reflected in the financial statements do not (c) The provisions of the preceding paragraphs recognize such conversion. may be waived by the Bank when a uniform pro- portionate change in the par values of the curren- so representation iS made that any of such curren- cies of all its members is made by the International CieS iS convertible into any other of such currencies at Mntr ud any rate or rates. See also Note B. Monetary Fund. The equivalent of $861,584 is due from 1 member NOTE B in order to maintain the value of its currency as re- quired under Article II, Section 9. These currencies and notes are derived from the 18% of the subscriptions to the capital stock of the NOTE C Bank which is payable in the currencies of the respec- tive members. Such 18% may be loaned by the Bank, Under Article II, Section 8 (a) (i), any original and funds received by the Bank on account of principal member of the Bank whose metropolitan territories of loans made by the Bank out of such currencies may suffered from enemy occupation or hostilities during be exchanged for other currencies or reloaned, only World War II had a right to postpone payment of with the approval in each case of the member whose 12 of 1% of the amount of its subscription payable in currency is involved; provided, however, that, if neces- gold or United States dollars until June 25, 1951. All sary, after the Bank's subscribed capital is entirely members who received such a postponement have made called, such currencies may, without restriction by the payment in full except China and Czechoslovakia. members whose currencies are offered, be used or China has made payments totalling $80,000 and has exchanged for the currencies required to meet con- stated that it recognized its obligation to the Bank and tractual payments of interest, other charges or amortiza- would pay the balance of $2,920,000 as soon as it was in tion on the Bank's own borrowings or to meet the a position to do so. Czechoslovakia has claimed a Bank's liabilities with respect to contractual payments further postponement under Article II, Section 8 (a) on loans guaranteed by it. These currencies of the (ii). On August 21, 1951, the Executive Directors re- several members, and the notes issued by them for any jected such claim. The Executive Directors thereafter part of such currencies, as permitted under the pro- reported such action to the Board of Governors which, visions of Article V, Section 12, are held on deposit on September 13, 1951, approved such report. [60 1 APPENDIX G NOTE D NOTE G The principal disbursed and outstanding on loans Pursuant to action of the Board of Governors and and the accrued charges for interest, commitment fee, Executive Directors the net income of the Bank has service charge and loan commission are receivable in been allocated to a Supplemental Reserve Against United States dollars except the following amounts for Losses on Loans and Guarantees Made by the Bank; which the dollar equivalent is shown: and the future net income of the Bank will, until further Principal Outstanding $76,815,892 action by the Executive Directors or the Board of Accrued Interest, Commitment Governors, be allocated to this reserve. and Service Charges 539,558 Accrued Loan Commissions 127,869 NOTE H Total $77,483,319 Subject to call by the Bank only when required Total $77,483,319 to meet the obligations of the Bank created by borrow- NOTE E ing or guaranteeing loans. The amount of commissions received by the Bank NOTE I on loans made or guaranteed by it is required under The Bank has written off against income all dis- Article IV, Section 6, to be set aside as a special reserve count and premium on bonds sold or redeemed in the to be kept available for meeting obligations ofrespective years in which sale or redemption occurred. Bank created by borrowing or by guaranteeing loans. On all loans granted to date the effective rate of com- mission is 1% per annum. NOTE J In terms of United States dollars of the weight NOTE F and fineness in effect on July 1, 1944. The Bank has sold under its guarantee $49,803,146 of borrowers' obligations received by the Bank in con- GENERAL nection with its loan operations of which amount a Applications for membership from Indonesia, with total of $20,174,301 has been retired. Of the total a subscription of $110 million, and Haiti, with a sub- of $29,628,845 of obligations outstanding under guar- scription of $2 million, were approved by the Board antee $1,988,010 is reflected in the balance sheet as of Governors at the Seventh Annual Meeting. These a direct liability subject to withdrawal. The following countries have until September 16, 1953 to accept table shows the aggregate principal amount of these membership. obligations maturing in each of the five years following June 30, 1953: LITIGATION Year Ending A suit has been commenced by an individual June 30 Amount plaintiff against the Bank asking damages of approxi- 1954 $10,778,845 mately $625,000 for alleged interference with plaintiffs 1955 4,034,000 contractual relationships (Frank H. Redicker v. War- 1956 1,236,000 field et al., U.S. District Court, Southern District of 1957 1,282,000 New York, Civil No. 61-210). The Bank has denied 1958 1,298,000 the substance of the charges contained in the com- Thereafter 11,000,000 plaint and has been advised by trial counsel that the Total $29,628,845 suit is without merit. At June 30, 1953 there was no other litigation pending against the Bank. [61] APPENDIX H Opinion of Independent Auditor 1000 VERMONT AVENUE, N.W., WASHINGTON 5, D.C. August 3, 1953 To INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, Washington, D. C. We have examined the financial statements listed below of International Bank for Reconstruction and Development as of June 30, 1953. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, such financial statements, with the notes thereto, present fairly the financial position of the Bank at June 30, 1953, expressed in United States currency, and the results of its operations for the twelve months then ended, in con- formity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. PRICE WATERHOUSE & Co. Financial Statements Covered by the Foregoing Opinion Balance Sheet-Tune 30, 1953 .................. APPENDIX A Comparative Statement of Income and Expenses for the Fiscal Years Ended June 30, 1952 and June 30, 1953 ............................ APPENDIX B Statement of Currencies Held by the Bank- June 30, 1953 ............................ APPENDIX C Statement of Subscriptions to Capital Stock and Voting Power-June 30, 1953 .............. APPENDIX D Funded Debt of the Bank-June 30, 1953 ....... APPENDIX E Statement of Loans-June 30, 1953 ............. APPENDIX F Notes to Financial Statements-June 30, 1953. . .. APPENDIX G [62] APPENDIX I Administrative Budget For the Fiscal Year Ending June 30, 1954 There is outlined below the Administrative Budget for the fiscal year ending June 30, 1954 as prepared by the President and approved by the Executive Directors in accordance with Section 19 of the By-Laws. For pur- poses of comparison there are also outlined below the administrative expenses incurred during the fiscal years ended June 30, 1952, and 1953. Actual Expenses Budget 1954 1952 1953 BOARD OF GOVERNORS $ 114,220 $ 214,022 $ 121,000 OFFICE OF EXECUTIVE DIRECTORS 276,360 367,506 380,000 STAFF Personal Services 2,759,133 3,015,174 3,185,000 Staff Benefits 320,633 329,236 356,000 Consultants 107,927 182,467 150,000 Travel 378,170 555,223 575,000 Representation 41,833 3,607,696 50,673 4,132,773 50,000 4,316,000 OTHER ADMINISTRATIVE EXPENSES Fees and Compensation 47,809 51,522 69,000 Supplies and Materials 39,676 32,241 41,000 Rents and Maintenance 394,868 427,550 415,000 Communications 112,332 107,069 107,500 Furniture and Equipment 34,953 31,225 30,500 Printing 39,701 40,350 40,000 Books and Library Service 69,375 71,704 68,000 Insurance 16,704 31,864 16,000 Other 3,361 758,779 2,100 795,625 - 787,000 CONTINGENCY - - 175,000 TOTAL 4,757,055 5,509,926 5,779,000 SPECIAL SERVICES TO MEMBER COUNTRIES 380,303 214,344 300,000 GRAND TOTAL $5,137,358 $5,724,270 $6,079,000 The initial Administrative Budget for the fiscal year ending June 30, 1953 was $5,712,000; an increase in this amount to $5,762,000 was approved by the Executive Directors on May 12, 1953. No estimate has been made of bond registration, issuance and other financial expenditure for the fiscal year ending June 30, 1954. The amount of bonds which may be issued by the Bank during the next year is not known. These expenditures may amount to about $100,000, exclusive of commissions and premiums, for each $100 million of bonds which the Bank may issue. [ 63 ] APPENDIX J Voting Power and Subscriptions of Member Countries As of June 30, 1953 Voting Power Subscriptions Number Percent Amount Percent MEMBER COUNTRY of Votes of Total (in Millions of Dollars) of Total Australia ............................... 2,250 2.17 200.0 2.21 Austria ................................. 750 .72 50.0 .55 Belgium ................................ 2,500 2.41 225.0 2.49 Bolivia ................................. 320 .31 7.0 .08 Brazil ................................. 1,300 1.25 105.0 1.16 Burma. . 400 .39 15.0 .17 Canada ................................. 3,500 3.37 325.0 3.60 Ceylon ......... ........................ 400 .39 15.0 .17 Chile.. 600 .58 35.0 .39 China ................................. 6,250 6.02 600.0 6.64 Colombia ............................... 600 .58 35.0 .39 Costa Rica .............................. 270 .26 2.0 .02 Cuba ................................. 600 .58 35.0 .39 Czechoslovakia ............. 1,500 1.44 125.0 1.38 Denmark.. 930 .90 68.0 .75 Dominican Republic .......... 270 .26 2.0 .02 Ecuador ................................ 282 .27 3.2 .03 Egypt ................................. 783 .75 53.3 .59 El Salvador .............. 260 .25 1.0 .01 Ethiopia ......... . ....................... 280 .27 3.0 .03 Finland ................................. 630 .61 38.0 .42 France ................................ 5,500 5.29 525.0 5.81 Germany.. 3,550 3.42 330.0 3.65 Greece . .00 .48 25.0 .28 Guatemala.. 270 .26 2.0 .02 Honduras ............................... 260 .25 1.0 .01 Iceland ................................. 260 .25 1.0 .01 India... . 4,250 4.09 400.0 4.43 Iran......... . 586 .56 33.6 .37 Iraq ................................. 310 .30 6.0 .07 Italy ................................. 2,050 1.97 180.0 1.99 Japan..... 2,750 2.65 250.0 2.77 Jordan... . 280 .27 3.0 .03 Lebanon ................................ 295 .28 4.5 .05 Luxembourg .............. 350 .34 10.0 .11 Mexico ... ..900 .87 65.0 .72 Netherlands. . 3,000 2.89 275.0 3.04 Nicaragua. . . 258 .25 .8 .01 Norway ....... 750 .72 50.0 .55 Pakistan.. . 1,250 1.20 100.0 1.11 Panama.. 252 .24 .2 * Paraguay ............................... 264 .25 1.4 .01 Peru ................................. 425 .41 17.5 .19 Philippines.. 400 .39 15.0 .17 Sweden ................................. 1,250 1.20 100.0 1.11 Syria ................................. 315 .30 6.5 .07 Thailand. . 375 .36 12.5 .14 Turkey ................................. 680 .65 43.0 .48 Union of South Africa. . 1,250 1.20 100.0 1.11 United Kingdom. . 13,250 12.76 1,300.0 14.39 United States.. 32,000 30.81 3,175.0 35.13 Uruguay. . 355 .34 10.5 .12 Venezuela.. 355 .34 10.5 .12 Yugoslavia. . 650 .63 40.0 .44 Total.. 103,865 100.00 9,036.5 100.00 *Less than .005 percent. [64 1 APPENDIX K Governors and Alternates as of June 30, 1953 COUNTRY GOVERNOR ALTERNATE AUSTRALIA Sir Percy Spender Roland Wilson AUSTRIA Reinhard Kamitz Wilhelm Teufenstein BELGIUM Albert-Edouard Janssen Maurice Frere BOLIVIA Augusto Cuadros Sanchez [Vacant] BRAZIL Horacio Lafer Octavio Paranagua BURMA U Tin U San Lin CANADA D. C. Abbott John Deutsch CEYLON J. R. Jayewardene Sir Claude Corea CHILE Arturo Maschke Felipe Herrera CHINA Chia Kan Yen Peh-Yuan Hsu COLOMBIA Emilio Toro Ignacio Copete-Lizarralde COSTA RICA Angel Coronas Mario Fernandez CUBA Luis Machado Joaquin E. Meyer CZECHOSLOVAKIA Rudolf Houdek Antonin Braidl DENMARK Svend Nielsen Hakon Jespersen DOMINICAN REPUBLIC Jose Ernesto Garcia Aybar Pedro Pablo Cabral B. ECUADOR Luis Ernesto Borja Ramon de Ycaza EGYPT Mohamed Amin Fikry A. Nazmy Abdel-Hamid EL SALVADOR Catalino Herrera Luis Escalante-Arce ETHIOPIA Jack Bennett Ato Menassie Lemma FINLAND Artturi Lehtinen Ralf Torngren FRANCE Minister of Finance Pierre Mendes-France GERMANY Ludwig Erhard Fritz Schaeffer GREECE Emmanuel Tsouderos George Mantzavinos GUATEMALA Manuel Noriega Morales Carlos Leonidas Acevedo HONDURAS Rafael Heliodoro Valle Guillermo Lopez Rodezno ICELAND Jon Arnason Thor Thors INDIA Sir Chintaman D. Deshmukh Sir Benegal Rama Rau IRAN Mohammad Nassiri Abbas-Gholi Neysari IRAQ Ibrahim Shabandar Saleh Haidar ITALY Donato Menichella Giorgio Cigliana-Piazza JAPAN Sankurou Ogasawara Hisato Ichimada JORDAN Yusuf Haikal Omar Dajany LEBANON Andre Tueni Raja Himadeh LUXEMBOURG Pierre Dupong Pierre Werner MEXICO Antonio Carrillo Flores Jose Hernandez Delgado NETHERLANDS J. van de Kieft A. M. de Jong NICARAGUA Guillermo Sevilla-Sacasa J. Jesus Sanchez R. NORWAY Gunnar Jahn Ole Colbjornsen PAKISTAN Mohamnmad Ali Amjad Ali PANAMA Roberto M. Heurtematte Julio E. Heurtematte PARAGUAY Epifanio Mendez Fleitas Julio C. Kolberg PERU Fernando Berckemeyer Carlos Gibson PHILIPPINES Miguel Cuademo Sr. Emilio Abello SWEDEN N. G. Lange A. Lundgren SYRIA Husni A. Sawwaf Rafik Asha THAILAND Serm Vinicchayakul Kajit Kasemsri TURKEY Mehmet Izmen Munir Mostar UNION OF SOUTH AFRICA N. C. Havenga M. H. de Kock UNITED KINGDOM Richard Austen Butler Sir Leslie Rowan UNITED STATES George M. Humphrey Samuel C. Waugh* URUGUAY Nilo Berchesi Roberto Ferber VENEZUELA Manuel Reyna Carlos M. Lollet C. YUGOSLAVIA Vido Krunic Janvid Flere Appointed subsequent to June 30, 1953. [65 1 APPENDIX L Executive Directors and Alternates and Their Voting Power As of June 30, 1953 VOTES BY TOTAL DIRECTORS ALTERNATES CASTING THE VOTES OF COUNTRY VOTES Appointed Andrew N. Overby John S. Hooker United States 32,000 32,000 Sir Edmund Hall-Patch L. Waight United Kingdom 13,250 13,250 Yueh-Lien Chang [Vacant] China 6,250 6,250 Roger Hoppenot Maurice Perouse* France 5,500 5,500 B. K. Nehru B. R. Shenoy India 4,250 4,250 Elected Luis Machado Julio E. Heurtematte Mexico 900' (Cuba) (Panama) Cuba 600 Peru 425 Uruguay 355 Venezuela 355| Costa Rica 270, Dominican Republic 270 4,475 Guatemala 270 El Salvador 260 Honduras 260 Nicaragua 258 Panama 252 Johannes Zahn A. Tasic Germany 3,5505 (Germany) (Yugoslavia) Yugoslavia 650 4,200 Mohammad Shoaib Ali Asghar Nasser Pakistan 1,250 (Pakistan) (Iran) Egypt 783 Iran 586 Syria 315 Iraq 310 4,099 Lebanon 295 Ethiopia 280 Jordan 280 Cabir Selek Felice Pick Italy 2,050 (Turkey) (Italy) Austria 750 Turkey 680 3,980 Greece 500 Takeo Yumoto Boonma Wongswan Japan 2,7507 (Japan) (Thailand) Burma 4001 Ceylon 400 3,925 Thailand 375 Erling Sveinbjornsson Reino Rossi Sweden 1,250) (Denmark) (Finland) Denmark 9301 Norway 750 3,820 Finland 6301 Iceland 260 * Temporary [661 APPENDIX L Executive Directors and Alternates and Their Voting Power As of June 30, 1953-Continued VOTES BY TOTAL DIRECTORS ALTERNATES CASTING THE VOTES OF COUNTRY VOTES Alfonso Fernandez Jorge Schneider Brazil 1,300 (Chile) (Chile) Chile 600 Colombia 600 Philippines 400 3,766 Bolivia 320 Ecuador 282 Paraguay 264 L. G. Melville L. H. E. Bury Australia 2,2503 (Australia) (Australia) Union of South Africa 1,250f 3,500 Louis Rasminsky G. Neil Perry Canada 3,500 3,500 (Canada) (Canada) D. Crena de Iongh L. R. W. Soutendijk Netherlands 3,000 3,000 (Netherlands) (Netherlands) Thomas Basyn Ernest de Selliers Belgium 2,5002 (Belgium) (Belgium) Luxembourg 350J 2,850 Note: Member Country unrepresented by an Executive Director: Czechoslovakia with 1,500 votes. In addition to the Executive Directors and Alternates shown in the foregoing list, the following also served as Executive Director or Alternate after November 1, 1952, the effective date of the Fourth Regular Election: EXECUTIVE DIRECTOR End of Period of Service A. M. de Jong (Netherlands) December 31, 1952 ALTERNATE EXECUTIVE DIRECTORS Tsoo Whe Chu (China) November 10, 1952 Djahangir Boushehri (Iran) November 14, 1952 Jorge del Canto (Chile) February 28, 1953 Nenad D. Popovic (Yugoslavia) May 5, 1953 Allan Christelow (United Kingdom) May 15, 1953 1 67] APPENDIX M Principal Officers of the Bank As of June 30, 1953 Eugene R. Black ............ President Robert L. Garner .. Vice President William A. B. Iliff ................ ...... .. Assistant to President Henry W. Riley .. Treasurer M. M. Mendels .. Secretary Davidson Sommers ............... ......... .... General Counsel A. S. G. Hoar ........ Director of Operations-Europe, Africa and Australasia J. Burke Knapp ................ Director of Operations-Western Hemisphere Fran§ois-Didier Gregh ........ Director of Operations-Asia and Middle East Milton C. Cross . ............... Director of Technical Operations George L. Martin ...... .. ........ Director of Marketing Leonard B. Rist ...... .. ........ Director, Economic Staff Richard H. Demuth ........ Director, Technical Assistance and Liaison Staff William F. Howell . ............... Director of Administration Harold N. Graves, Jr . ............... Director of Public Relations l 68] lr INONE w