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EAST-WEST TRADE: Bundles for Russia

2 minute read
TIME

Trade relations between the Soviet Union and the U.S. have received another boost: a group of U.S. regional banks and Manhattan’s French American Banking Corp. have formed a consortium that will make it easier for relatively small American corporations to sell their goods in Russia. The banks have agreed to lend Soviet import agencies $100 million, provided that the money is used to buy products from the banks’ clients. The bankers hope that the availability of credit will entice their clients to search for sales opportunities in the U.S.S.R. The regional banks in the deal are Cleveland’s Union Commerce, Indianapolis’ Indiana National, Detroit’s City National, Dallas’ Republic National, Connecticut’s Hartford National, Memphis’ First National and Providence’s Industrial National.

The loan package was conceived by the French American Banking Corp., the U.S. arm of the French government-owned Banque Nationale de Paris, which has been dealing with the Soviets for years. The loans will be made at prevailing commercial rates. Russia in fact is becoming a favorite trading spot of other U.S. banks. The Soviets have approved the Chase Manhattan Bank’s request to open an office in Moscow, and Manhattan’s First National City Bank is seeking a similar authorization. Countries that have had relatively normal political relations with the U.S.S.R. have found the Soviets to be a good credit gamble. Says Charles Lord, president of Hartford National Bank: “The experience of European bankers and exporters since World War II has been that there is virtually no risk attached to loans made to the Soviet Union.”

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