STRICTLY CONFIDENTIAL


•1111                       Il'l'BIU,ATIOJIAL BAJIK FOR
                        RBCOBSTRUCTIOI AID DEVELOPMEl'l'


                                        ---
                   TWO HUlfDRBD A1ID IID'l'BD'l'H REGULAR .NEE'!'ING
                                          ot
                                  EXECUTIVE DIRECTORS

                                       - --

                                               Conference Rooa,
                                               International Bank Building
                                               Waahington, D. c.
                                               Thurada7, June 1,, 1951.


              The meeting vaa convened at 10:00 a.a., llr. Eugene R.
         lllact, President, pree141ng.
STRICTLY CONFIDENTIAL                       2



                        C O 1' T E If T S
          I'l'EM                                PAGE
STRICTLY CONFIDENTIAL




               Before I do it, I want to tell the Board that we have
          recently sold an additional small amount of bonds out of
          our portfolio, 140,000 Chilean bonds, due July 1952, and
          102,000 due JanuarJ 1953.   These bonds were sold with our
          guarantee to the National City Bank.   This is a similar
          tranaaction to the one we had previously.   The reason that
          they were sold with our guarantee 1a that the National City
         Bank is unable to buy the bonds without our guarantee because
          the Chilean Government bonds were in default and they don't
STRICTLY CONFIDENTIAL                                                77

          have a auff1cient11 high rating which would make them legal
          for the bank to buJ them.   In other words, theJ have got to
          buy them with our guarantee.
               The reason that they want to buy Chilean bonds is the
          ruling made in Chile to allow banks there to invest a certain
          percentage ot their capital and surplus in Chilean bonds,
          so that there ia no way that they could take advantage of
          that ruling except to buy Chilean bonds, and the only way
          they can buy Chilean bonds ia with the Bank's guarantee.
               Now, we have sold those bonds.    They are 2 3/4 percent
         bonds and we have &Qld them at a premium so that the Bank
         bought them at a price to yield 2 percent.     I haven't got
         the exact premium, but it was the premium over par that we
         got for the bonds.
              I say we have sold the bonds.     The Board gave the
         management the right to sell bonds up to $1,000,000.        I
         just didn't vant you to think I had done this without proper
         authority.