BRAZIL: To the Rescue

Last week the U.S. Export-Import Bank came to the rescue of Brazil's economy with a $300 million loan to help pay off dollar debts to U.S. traders, totaling more than $360 million. The loan, hotly debated in the U.S. National Advisory Council (composed of the Secretaries of State, Treasury and Commerce, the heads of the Federal Reserve and Export-Import Banks, and the Director of Mutual Security), would do much to assure the success of the Latin republic's new "free" exchange rate, which permits foreign firms to remit earned profits without limit. The loan and the new rate give Brazil, despite its current $850 million foreign-trade debt, another chance to get back into world markets.

Announcement of the three-year credit at 3½% annual interest forestalled a repetition of the extraordinary lawsuit of a New York exporter, who attached Brazilian assets in two New York banks to satisfy a $2,515 commercial debt. Enraged Brazilians, who regarded the suit as an affront to their national honor, had calmed down by the time the loan came. In one stroke the Eisenhower Administration had stolen the play from Juan Perón's visit to Chile (see below), and scored a clean-cut success in foreign policy.