"I address you as Japan's ambassador to the United States, Eikichi Araki. Today a loan agreement was signed between Japan and the International Bank for Reconstruction and Development which will provide funds for the purchase of thermal power equipment from the United States.
I am most happy on this occasion to inform you of the contents of the Agreement. Japan became a member of the International Bank for Reconstruction and Development in August of last year, signifying Japan's first step toward rejoining the international financial community. In June of this year Japan applied for the loan in order to facilitate the import of thermal power equipment necessary to develop electric power which is most urgently needed for Japanese industry.
After filing the application, we negotiated with International Bank authorities for four and a half months. These negotiations culminated in the loan agreement concluded today. Four and a half months is rather a short time when compared with the time required in similar negotiations with other countries.
This is the first long term loan agreement from abroad since the end of the war. I believe it is a reflection of Japan's higher credit standing. The loan was made to the Japan Development Bank, but the proceeds of the loan furnished by the International Bank for Reconstruction and Development, amounting to $40,200,000, will be used for the import of thermal power equipment for the Kansai, Kyushu, and Chubu power companies.
The Government of Japan will guarantee payment of the principal and interest. The interest rate, 5 per cent, is far lower than that of foreign bonds of power companies before the war, or for that matter far lower than interest rates charged by general financial institutions in Japan. I believe it is also favorable for Japan that the term of payment of the loan is as long as 20 years.
The equipment to be imported with the proceeds provided by the loan is of high efficiency, having and generating capacity of approximately 300,000 kilowatts. This will help substantially to offset Japan's power shortage. We all know, you as well as I, that this equipment is to be imported to promote industries and exports, and that as a result the national standard of living will be stabilized as rapidly as possible."