(4 of 9)
Then the Russians, who had previously offered a $300 million loan, started jiggling the bait again. Though Egypt's Strongman Gamal Abdel Nasser prefers Western aid, and knows that he will get more dam for the money with no political strings attached, he is cagily bargaining with both sides. Last week Nasser received Russia's junketing Foreign Minister Dmitry T. Shepilov, who arrived in Cairo with tempting new offers (see FOREIGN NEWS). But on this trip, Black hopes to nail down the deal once and for all. Both he and the Reds know the size of the stakes. Whoever helps build the high dam will have the key to much of the future economic development in the Middle East.
Birth Pains. Compared to most citadels of high finance, Eugene Black's World Bank is as odd as a platypus in a poultry yard. In its slabsided headquarters in Washington, D.C., it does not even have a vault. Once, when money was left lying around—$30,000 in travel funds—it was promptly stolen by a thief who made a clean getaway. The World Bank was born at the 1944 Bretton Woods Conference,*almost as an afterthought to its sister institution, the International Monetary Fund, set up to deal with the temporary "disequilibrium" in world currency-exchange rates. But the job of equalizing the world's moneys proved too much for the fund (see FOREIGN NEWS). However, with the bank, the Allies could get on with the practical business of reconstruction and economic development by promoting "private foreign investment . . . and when private capital is not available on reasonable terms," lending money itself.
The World Bank started out with 38 nations (now 58), each subscribing loan funds ranging from $3.2 billion for the U.S. down to a minimum $200,000 for Panama. In a partnership of the world's "haves" with the "have-nots," all nations cooperated to run the bank through a board of governors, one member from each country, and a president, who has always been an American. Only member nations were allowed to apply for loans, and since voting strength was weighted by the size of each national subscription (the U.S. has a 30% vote), the U.S. and other like-minded countries could exercise an effective veto over any tendency to pauper profligacy by have-not partners.
From the start the bank had trouble, and its organization lagged until onetime RFC Banker and Washington Post Publisher Eugene Meyer moved in as the first president, set up a staff. Next, in 1947, came John Jay McCloy, onetime Assistant Secretary of War, who boldly started funneling out bank funds for the pressing reconstruction of Europe, a total of $500 million in four big grants, $250 million of it to France alone. Compared to the need, the loans were pitifully small, though they helped keep things going until the great flow of Marshall Plan aid started pouring from the U.S. Treasury.