mately equal amounts, into two important sectors-industry and mining $378 million) and agriculture ($368 million). The remaining $895 million in commitments included $288 million for water supply and sewage; $242 million for low-income housing; $148 million for transportation; $124 million for electric power; and a total of $92 million for education, preinvestment studies, and export financing (see table 18).

EXTERNAL SOURCES OF FUNDS

In addition to funds made available to the the Bank by member countries through capital subscriptions and contribution quotas, the Bank continued its efforts to mobilize financial resources for Latin American development from other sources through sales of bonds, sales of participations in Ordinary Capital loans, direct borrowings and through special arrangements of various sorts with nonmem

ber capital exporting countries. As early as 1961, the Bank sold portions of its loans to banks and other institutional investors, and the Bank's first bond issue was sold in Italy in the following year. Financial transactions occurring during the current period are described in the following paragraphs:

Funded debt.-In January, the Bank issued 15 billion lire ($24 million equivalent) of 6 percent bonds in Italy-the fifth borrowing by the Bank in Europe. The proceeds of the issue will be used in the Bank's Ordinary Capital loan operations.

In April, the Bank announced the sale, at par, entirely outside the United States, of $65 million of its short term, dollar bonds, of which $57 million were sold to central banks or other governmental agencies in 15 Latin American member countries, and the balance outside the hemisphere. This

Source: Inter-American Development Bank.

was the Bank's first sale directly to Latin America and its first sale of short term obligations. The proceeds will also be used in loan operations from the Bank's Ordinary Capital resources. This transaction represents the Bank's ninth borrowing operation, six of which have been outside the United States. As of June 30, 1966, the Bank's funded debt amounted to the equivalent of approximately $374 million.

Other arrangements.-In September 1965, the Government of the Netherlands agreed to make available the equivalent of $10 million in Netherlands guilders for parallel or independent financing of development projects in cooperation with the Bank. Loans from these funds will be extended on terms up to 25 years, with initial grace periods of up to 7 years.

Also in September, the Canadian Government agreed to place under Bank administration an additional $10 million in Canadian dollars to finance a variety of projects in Latin America on easy terms. This commitment increased the total of Canadian funds provided for Latin American development to Canadian $35 million.

In April 1966, the United Kingdom agreed to make available the equivalent of $11.6 million to be administered by the Bank for economic assistance in Latin America. This sum is part of the equivalent of $20 million which the United Kingdom agreed to provide in 1964. The first portion ($8.4 million) was obtained through the sale of bonds in the United Kingdom in fiscal 1965.

Under a loan agreement signed in June 1966, the Export-Import Bank of Japan will provide 3.6 billion in convertible yen ($10 million equivalent) for a period of 15 years, including a 5-year grace period, at an interest rate of 5 percent, for use in the Bank's Ordinary Capital resources. This loan represents the first time an Asian nation has associated itself with the Bank to promote economic development in Latin America."

In the 51⁄2 years since its inception, the Bank has succeeded in providing for economic and social development in Latin America approximately $1

47 No disbursements under the Japanese agreement were made by the Bank as of June 30, 1966. It therefore is not included in the funded debt held on that date. [Footnote in source text.]

billion in resources additional to its own capital. These sums have come from both member and nonmember countries and include the Bank's funded debt ($374 million), funds administered by the Bank ($564.7 million), loan participations ($26.9 million), and other arrangements ($41.4 million).

CONCLUSIONS AND RECOMMENDATIONS

The National Advisory Council believes that the Inter-American Development Bank has been an effective instrument in accelerating economic and social development in Latin America. Since its first loan commitment in 1961, the Bank has approved loans from its three "windows" in the equivalent of $1.6 billion for a wide variety of projects which have made a significant contribution to the economic growth of the area. It has performed an important role as a catalyst in attracting additional local and external financing greatly in excess of the amount of its loan commitments; and it has cooperated in channeling more than $1 billion in funds from both member and nonmember countries over and above its own subscribed and contributed capital.

The Bank has also continued its support of programs designed to strengthen regional integration in Latin America through loans, technical assistance, and preinvestment activities to prepare and carry out multinational projects.

At the time the Inter-American Development Bank Act was approved in 1959, the National Bank Act and the Bretton Woods Agreements Act were amended to permit member banks of the Federal Reserve System to underwrite and deal in the Bank's bonds— provisions similar to those which apply to the bonds of the International Bank.

More recently, the Bank has continued to seek amendments to State laws to make its securities eligible for purchase by various categories of institutional investors.

Legislation qualifying the Bank's bonds for investment by State and municipal employees' pension funds was approved by the legislatures of Hawaii, Illinois, Michigan, Ohio, Tennessee, Utah, and Washington, and

people have exercised their democratic right to select a government of their own choosing.

They have selected that government.

They have just finished a similar exercise in Guatemala, and some four or five additional Latin American nations.

Document III-45

Note Delivered to the Argentine Ministry of Foreign Affairs by the United States Chargé d'Affaires ad interim (Saccio), Buenos Aires, July 15, 1966 51

United States Recognition of the New Government of Argentina

The Embassy of the United States of America presents its compliments to the Ministry of Foreign Affairs and Worship of the Argentine Republic and has the honor to acknowledge the receipt of the Ministry's note No. 539 of June 30, 1966,52 by which the Embassy was informed that Lieutenant General Juan Carlos Onganía had assumed the presidency of the Argentine nation on June 29, 1966.

In thanking the Ministry for this information, the Embassy wishes to reciprocate the Ministry's desire to maintain good and traditional relations between the United States of America and the Argentine Republic.

The Embassy takes this opportunity to express to the Ministry of Foreign Affairs and Worship the assurances of its highest consideration."

51 Department of State Bulletin, Aug. 1, 1966, p. 184. The United States had suspended relations with Argentina on June 28, 1966. See ante, doc. III-42.

52 Not printed here.

53 On Aug. 4, 1966, the Assistant Secretary of State for Inter-American Affairs (Gordon) made public a statement indicating U.S. "dismay and concern" over the closing of the Argentine state universities and police brutality against some of the professors, including an American. The Argentine Government had closed the universities because of violent protest demonstrations by students and professors against the decision of the Government to place the federal universities under its control. (See The New York Times, Aug. 2, 4, and 5, 1966).