Export-Import Bank (1934)

The Export-Import Bank (EXIM) is a federal agency that provides loans to foreign purchasers of U.S. goods and services, as well as other financial services designed to help American businesses compete in the global marketplace [1].

The first EXIM was created by Franklin Roosevelt on February 2, 1934, with Executive Order 6581 [2], and was designed to promote the sale of U.S. goods and services in the Soviet Union. A second EXIM was created by FDR on March 9, 1934, with Executive Order 6638, and promoted trade with Cuba [3].  Congress essentially combined the two banks into a single EXIM in 1936 [4], and then established it as an independent agency via the Export-Import Bank Act of 1945 [5].

When FDR created EXIM, he stated that it would assist other agencies and New Deal programs in alleviating “widespread unemployment and disorganization of industry” [6]. And today, EXIM describes its function in the following way: “When private sector lenders are unable or unwilling to provide financing, EXIM fills in the gap for American businesses by equipping them with the financing tools necessary to compete for global sales. In doing so, the agency levels the playing field for U.S. goods and services going up against foreign competition in overseas markets, so that American companies can create more good-paying American jobs” [7].

During the New Deal years 1935-1941, EXIM made loan disbursements of $327 million, of which $141 million were repaid. These loans were extended mainly to Central and South American countries and contributed to projects like the Inter-American Highway in Costa Rica, Nicaragua, El Salvador, and Mexico [8].  Infrastructure projects like this not only used American goods and services, but sustained and improved trade throughout the western hemisphere.

After World War II, EXIM contributed $2 billion in financing for reconstruction efforts in Europe, Asia, and Africa [9]. Many liberals have been suspicious of EXIM because of the potential for unfair favoritism by the world’s largest economy and greatest power. Yet, as proponents of EXIM point out, many countries have such lending entities (called “Export Credit Agencies” or “ECAs”) which promote their own exports at the expense of other countries. 

In modern times, EXIM has come under attack by free-market conservatives who view it as an unnecessary, or even damaging, intrusion into the private sector – much to the chagrin of the American Chamber of Commerce and the National Association of Manufacturers, who understand that it is a useful subsidy to US exporters. Conservative forces shut EXIM down in 2015 when Congress allowed its lending authority to expire [10].  Nonetheless, EXIM was reopened five months later, as the business community rallied to defend it.

EXIM has enjoyed “overall bipartisan support in Congress” [11] and even conservative icon Ronald Reagan appreciated the job-creating and job-supporting power of FDR’s creation, stating on January 30, 1984: “Exports create and sustain jobs for millions of American workers and contribute to the growth and strength of the United States economy. The Export-Import Bank contributes in a significant way to our nation’s export sales” [12]. 

SOURCES

(1) A 2015 White House Fact Sheet lists the four financial products of the Export-Import Bank as loans, loan guarantees, working capital guarantees, and export credit insurance (accessed December 12, 2020).  (2) “Executive Order 6581 Creating The Export-Import Bank of Washington,” The American Presidency Project, University of California Santa Barbara (accessed December 12, 2020).  (3) See, e.g., Second Annual Report of Export-Import Banks, pp. 1-2, Export-Import Bank of the United States (accessed December 12, 2020).  (4) “Export-Import Bank of the United States,” Wikipedia, citing: Becker, William; McClenahan, William (2003). The Market, the State, and the Export–Import Bank of the United States. New York: Cambridge University Press. pp. 10–40 (accessed December 12, 2020).  (5) “Full Historical Timeline,” Export-Import Bank of the United States (accessed December 12, 2020).  (6) See note 2.  (7) “About Us,” Export-Import Bank of the United States, emphasis added (accessed December 12, 2020).  (8) Annual Report of the Export-Import Bank of Washington for 1941, Export-Import Bank of the United States (accessed December 12, 2020); also see, “Half of 3,500 Mile Inter-American Highway to Panama Now Completed,” Tampa Bay Times, March 30, 1941, p. 33.  (9) See note 5.  (10) “The fight over the Export-Import Bank, explained,” Vox, June 30, 2015.  (11) “Export-Import Bank of the United States(Ex-Im Bank),” Congressional Research Service, January 15, 2020.  (12) See note 1.

New Deal Map — Washington, DC

New-Deal-DC-map-cover

Check out our new map and guide to the work of the New Deal in Washington, D.C. It includes 500 New Deal sites in the District alone, highlighting 34 notable sites, and includes an inset map of the area around the National Mall which can be used for self-guided walking tours.