Earnings for the first 5 months of the 1942 fiscal year were $3,278,695.73. The increased earnings and the statistics presented in attached schedules reflect clearly the expanding activities of the bank.

Transactions involved.-A statement of the number of loans or the amount disbursed fails to reflect fully the amount of work required of the staff of the bank in connection with the authorization, the disbursement, and the collection of the loans.

Each application requires careful and individual study by the officers of the bank. Applicants for credit are required to submit such complete and detailed information as may be deemed pertinent to the cousideration of the particular transaction or type of transaction contemplated. The information generally embraces the financial standing of the applicant, the amount of credit desired, terms of repayment, bank and trade references, as well as economic and political conditions and the situation with regard to exchange in the particular foreign market involved. Frequently, the officers are called upon to spend several days in conference with a single applicant and to carry on a large amount of correspondence.

After the approval of a loan by the board of trustees or executive committee of the bank, it is necessary to prepare letters of instruction, contracts and other legal documents. Many loans are disbursed through the facilities of private banks and financial institutions, thus enabling us to operate with a smaller staff than would otherwise be the case. At the same time, however, all these transactions must be entered upon our records and must have careful and continuing supervision.

Few loans are effected through a single disbursement and practically all loans are repaid in installments. In view of the fact that no two loans are of the same nature, the work cannot be standardized to any appreciable extent.

The Export-Import Bank with outstanding loans in excess of $200,000,000 operates with a staff of 6 officers and 28 employees of varying grades, including legal staff, accounting staff, secretarial staff, etc. A bank in New York whose business is of a nature comparable to ours, but whose total assets amount to only $40,000,000, maintains a staff of 11 officers and 138 other personnel.

Expenditures.-The estimates for 1943 indicate the increases which will be required because of the greater volume of business to be handled as compared with former years.

SCHEDULE A

SCHEDULE B. JUSTIFICAVION OF ESTIMATES EXPORT-IMPORT BANK OF

WASHINGTON

The following tables set forth the aggregate of transactions actually handled during the fiscal year 1941 and estimates for the fiscal years 1942 and 1943. The estimates for 1942 and 1943 are necessarily tentative and are subject to revision.

INCREASE IN ADMINISTRATIVE EXPENSES

Mr. WOODRUM. You are asking for $270,535 for administrative expenses against $220,000 for the current year.

Mr. PIERSON. Yes. That was reduced from $275,000.

Mr. WOODRUM. According to the statement you have filed with the committee, business is pretty good.

Mr. PIERSON. Yes; we are keeping very active.

What this comes down to is largely, I think, a very small amount for supplies and communications, which will be necessary because of an additional 13 employees. That makes up the $50,000, which is being asked for here.

Mr. WIGGLESWORTH. Sixteen employees?

Mr. PIERSON. Thirteen employees beyond the number estimated for 1942.

Mr. FITZPATRICK. Your business is increasing; that is the reason, I suppose?

Mr. PIERSON. Yes.

Mr. FITZPATRICK. This operation is self-supporting; no money is taken out of the Treasury for it?

Mr. PIERSON. That is right.

PROFITS EARNED

We had our first 6 months financial statement prepared as of the end of the year, and our earnings were $3,854,708.61 after deducting expenses, but before paying dividends.

Mr. WOODRUM. That is for a half-year period?

Mr. PIERSON. Yes, sir. That is running at the rate of $7,500,000 a year, as compared with last year, of $5,384,000.

Mr. FITZPATRICK. That accounts for the increase in personnel that you are seeking?

Mr. PIERSON. As a matter of fact, we have no defaults if we can forget for the moment our old $46,000 Spanish peseta matter, which we have to mention each year. The Latin-American loans are all

current.

TRANSACTIONS WITH SOUTH AMERICA

Mr. HOUSTON. How much of that money has been used in South America; for example, Argentina? Did they not get a credit of $120,000,000?

Mr. PIERSON. They had a $60,000,000 commitment from us. They have used part of that.

Mr. HOUSTON. Has Peru used any of theirs?

Mr. PIERSON. No; Peru has used no part of theirs. They are stand-by credits for their central banks, but they have not used them. Mr. HOUSTON. Was there not a bill introduced in the Senate, an Inter-American bank bill, on which no action has been taken?

Mr. PIERSON. That is right. The hearings, apparently, have not been completed on that.

Mr. DIRKSEN. Mr. Pierson, has it been possible to use any of the $90,000,000 of lend-lease funds which we made available to Brazil in lieu of any moneys that you might lend to the Republic of Brazil?

Mr. PIERSON. No. I think the attitude has been that they should not use lend-lease money for anything such as railway equipment or civilian needs.

Mr. DIRKSEN. Your loan to Brazil is current?

Mr. PIERSON. Yes.

Mr. HOUSTON. What has been done in the way of credits, in Brazil especially? I know that they are complaining about England and other countries giving them credit where we demanded cash.

Mr. PIERSON. There is no just ground for complaint at the moment except that since the war has become a little more violent, a lot of our manufacturers do not care much about export business. Activities are so good at home they brush off the export business, either by not answering the letters, or by loading the price. That has had an effect down there which is unfortunate, and we are trying to meet that by personal contacts with the leading manufacturers. The real problem is not so much in Brazil, as it is a material problem from our standpoint.

Mr. HOUSTON. And that will be a problem when this war is over. Mr. PIERSON. Yes. We should have a good backlog when the war is over.

PROFITS EARNED

Mr. HENDRICKS. I notice in your justification that for the first 5 months of the 1942 fiscal year your earnings were $3,000,000 plus. How much is allocated to the import bank?

Mr. PIERSON. It has a total lending power of $700,000,000. present time our capital stock is $175,000,000.

At the

Mr. HENDRICKS. In other words, you are doing a good banking business here.

Mr. PIERSON. We think it is a pretty good record.

Mr. HOUSTON. It has always been a good paying proposition.
Mr. PIERSON. Yes, sir.

Mr. WIGGLESWORTH. Could you furnish, either for the record or to the committee, a list of the transactions during the past fiscal year? Mr. PIERSON. Yes; we have a complete list here. I do not know whether you want to put it all in the record or not; it is rather bulky. Mr. WIGGLESWORTH. You might leave it with the committee. Is there any objection to putting it in the record?

Mr. PIERSON. I do not think so.

Mr. WIGGLESWORTH. Leave it with the committee and we can decide whether to put it in.

Mr. WIGGLESWORTH. Could you also furnish a statement as to defaults, as to both principal and interest, if any?

Mr. PIERSON. We do not have any.

Mr. WIGGLESWORTH. None, in either respect?

Mr. PIERSON. We have the Spanish tobacco exception. That is represented by the equivalent of $46,000 worth of Spanish currency. We do not call it a default, although we cannot get dollars out of it. Mr. WIGGLESWORTH. That is the only default in either respect? Mr. PIERSON. That is right.

PERSONNEL

Mr. WIGGLESWORTH. I wish you would put in the record the figures for your nonadministrative estimate for the fiscal year, and what is the personnel now. You state in your justification 6 officers and 28 employees, but the Budget break-down would seem to indicate you are requesting 58.

Mr. PIERSON. It is higher now than when this was prepared.

Mr. WIGGLESWORTH. When you revise your remarks, I wish you would indicate what the personnel now is and what the request is. Mr. PIERSON. All right, sir.

(The information requested is as follows:)

For the fiscal year ending June 30, 1943, the estimate for nonadministrative expenses is $10,000.

The bank now has 6 officers and 35 employees. The request for 1943 is for 6 officers and 52 employees.

Mr. WOODRUM. Thank you very much, Mr. Pierson.

WEDNESDAY, JANUARY 7, 1942.

FEDERAL HOUSING ADMINISTRATION

STATEMENTS OF ABNER H. FERGUSON, ADMINISTRATOR; RAYMOND T. CAHILL, FIRST ASSISTANT ADMINISTRATOR; WESLEY ZANE, EXECUTIVE ASSISTANT AND BUDGET OFFICER; BURTON C. BOVARD, GENERAL COUNSEL; CLYDE L. POWELL, ASSISTANT ADMINISTRATOR (RENTAL HOUSING); ERNEST P. JONES, JR., ASSISTANT ADMINISTRATOR (TITLE I); LESTER H. THOMPSON, ASSISTANT COMPTROLLER; R. WINTON ELLIOTT, ASSISTANT TO THE ADMINISTRATOR; MRS. SHIRLEY K. HART, DIRECTOR, RESEARCH AND STATISTICS; AND JOHN D. BURROWS, ASSISTANT BUDGET OFFICER

SALARIES AND EXPENSES

Mr. WOODRUM. The next item for our consideration is that of the Federal Housing Administration, which is as follows:

Administrative expenses: Not to exceed $15,041,343 of the various funds of the Federal Housing Administration, as follows, (1) the mutual mortgage insurance fund, (2) the housing insurance fund. (3) the account in the Treasury comprised of funds derived from premiums collected under authority of section 2 (f) title I of the National Housing Act as amended (12 U. S. C. 1701), and (4) the defense housing insurance fund shall be available for expenditure, in accordance with the provisions of said Act for the administrative expenses of the Federal Housing Administration, including: Personal services in the District of Columbia and elsewhere; travel expenses, in accordance with the Standardized Government Travel Regulations and the Act of June 3, 1926, as amended (5 U. S. C. 821-833), but there may be allowed in addition to mileage at a rate not to exceed 4 cents per mile for travel by motor vehicle reimbursement for the actual cost of ferry fares and bridge, road, and tunnel tolls, and employees engaged in the inspection of property may be paid an allowance not to exceed 4 cents per mile for all travel performed in privately owned automobiles within the limits of their official posts of duty when such travel is performed in connection with such inspection; printing and binding; lawbooks, books of reference, and not to exceed $1,500 for periodicals and newspapers; not to exceed $1,500 for contract actuarial services; procurement of supplies, equipment, and services; maintenance, repair, and operation of two motor-propelled passenger-carrying vehicles, to be used only for official purposes;