“Export-Import loans have been particularly controversial because of prior expropriations of U.S. oil company property by beneficiary governments. Mexico’s nationalization of U.S. oil properties in 1938 was followed by a loan of $30 million for roads in 1941, a $10 million refinery loan in 1943, and a $150 million loan for general development in 1950. A 1946 loan of $5.5 million to Bolivia for production, refining, and pipeline expenditure followed nationalization a decade before.”
The Export-Import Bank (Ex-Im) was created by Executive Order 658l (February 2, 1934) to “facilitate exports and imports and the exchange of commodities between the United States and other nations or the agencies or nationals thereof.” The bank could borrow, lend, guarantee debt, and “do a general banking business” with its $700 million budget. (See Appendix below for a description of the agency today.)
The focus of Ex-Im was to stimulate exports to create jobs and promote recovery. Imports, on the other hand, were discouraged by the Smoot-Hawley Tariff of 1930 and other protectionist legislation. The mercantilist notion of a favorable balance of trade, dollar exports exceeding dollar imports, an inappropriate goal in its own right, was contradicted by reduced export demand from import restrictions which sent fewer dollars abroad for foreigners to buy U.S. goods. Recovery, furthermore, was diminished by taxes from the program which reduced private sector demand.
After World War II, recovery was no longer deemed necessary by the political establishment, and Ex-Im lending became part of the nation’s foreign policy and foreign-aid programs. In 1945, its capital stock was increased to $1 billion, the first of many increases associated with ever-expanding foreign commitments, militarily and economically, to counter perceived threats from Soviet Communism. 
As of 1983, Ex-Im commitments are limited to $58.75 billion with a mix of $33.75 billion in direct loans and $25 billion in guarantees and insurance. Commitments as of September 30, 1983, totalled $23.7 billion in loans, $6.7 billion in guarantees, and $7.8 billion in insurance. 
A partnership of objectives between government and private industry has been behind more than $100 billion in export support given in the pre-1984 history of Ex-Im.  The government’s goal has been to help countries deemed friendly to the U.S.; the exporter’s goal has been to increase demand for domestic products to make profits. private consortiums
Two private consortiums have been formed to act as a liaison between individual exporters and Ex-Im. The Private Export Funding Corporation (PEFCO), founded in 1970 and owned by 54 commercial banks and several other groups, pays a fee to Ex-Im for a $50 million revolving line of credit and full loan guarantees for approved credits.
The Foreign Credit Insurance Association, founded in 1961 and owned by 50 leading U.S. insurance companies, insures foreign receivables from commercial risks. Ex-Im, in turn, insures political risks and reinsures part of the commercial risks. Much, if not all, of this activity represents unacceptable risks to the private sector.
Rewarding U.S. Expropriation
Major areas of Ex-Im subsidization are electric power, aircraft, construction equipment, and communications. Beginning in the 1940s, loans have been made to foreign countries to purchase U.S. equipment, including oil rigs, refinery parts, and pipeline equipment.
Some of these loans have been particularly controversial because of the expropriations of property of U.S. oil companies by beneficiary governments. Mexico’s nationalization of U.S. oil properties in 1938 was followed by a loan of $30 million for roads in 1941, a $10 million refinery loan in 1943, and a $150 million loan for general development in 1950. A 1946 loan of $5.5 million to Bolivia for production, refining, and pipeline expenditure followed nationalization a decade before.
A $125 million loan to Argentina in 1950 for general expenditure was 13 years after the oil industry was taken over by authorities. A $300 million loan was made in 1950 to a thoroughly corrupt Brazilian government that would nationalize U.S. oil firms in 1964. 
Petroleum-related loans have gone to Mexico ($80 million-1972), Burma ($2.8 million-1971), Norway ($68 million-1973), Taiwan ($11.3 million-1973), Israel ($13.5 million-1975), Britain ($71 million-1975), Chile ($203 million-1975), Norway ($44 million-1975), Ivory Coast ($88 million-1980), Brazil ($29 million -1982), Indonesia ($333 million-1982), New Zealand ($99 million-1982), Cameroon ($54 million-1982) and Angola ($45 million-1983). 
Some ‘Big Oil’ Loans
A $456 million loan and loan guarantee to New Zealand involved well known companies such as Mobil and Phillips and 16 major U.S. oil field supply companies.  Other industry leaders such as Shell, Chevron, Getty, Occidental, and British Petroleum have been beneficiaries of Ex-Im largeness.
Total oil and gas credits between 1975 and 1983 totaled $3.5 billion. Other countries receiving oil and gas loans were Algeria, France, Hong Kong, Panama, Portugal, Yugoslavia, Belgium, Caymon Islands, Liberia, Japan, Spain, Peru, Rumania, Singapore, Egypt, India, Sweden, and China.
Appendix: Ex-Im Today
The agency describes itself today as follows:
The Export-Import Bank of the United States (EXIM) is the official export credit agency of the United States. EXIM is an independent, self-sustaining Executive Branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services.
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 Bank 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.
Because it is backed by the full faith and credit of the United States, EXIM assumes credit and country risks that the private sector is unable or unwilling to accept. The Bank’s charter requires that all transactions it authorizes demonstrate a reasonable assurance of repayment; the Bank consistently maintains a low default rate, and closely monitors credit and other risks in its portfolio.
 Public Law 173, 59 Stat. 526 (1945).
 Export-Import Bank of the United States, Fiscal 1983 Annual Report, p. 27.
 Exim News, October 14, 1982, p. 4.
 See Edward Chester, United States Oil Policy and Diplomacy (Westport, Conn.: Greenwood Press, 1983), pp. 131, 135, 137, 174, and 189.
 Compiled from various Export-Import Bank annual reports from 1975 until 1983.
 Exim News, October 14, 1982, p. 1.
This post is taken from Robert L. Bradley Jr., Oil, Gas, and Government: The U.S. Experience (1996), pp. 546–548. Part II tomorrow will examine the large usage of Ex-Im and other government lending services by Enron Corp., which went bankrupt in 2001.