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Jan 1, 1941

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Jan 1, 1952

By Michael Bradbury

INTRODUCTION A major change in financing exports in recent years has been the decreased importance of subsidized export credits, following the commitment of the OECD countries to eliminate the subsidy element. Subsidized export credit rates are now often more expensive than market rates as the financing for exporters has decreased in volume and importance. The forfait market, in recognition of this decreasing importance, provides a rapidly expanding source of nonrecource finance for exporters. The following is a step by step guide to what it is, how it works, its benefits and problems. WHAT IS FORFAITING? Forfaiting is not new. It has been used in Europe for about 25 years to provide export finance for both capital goods and commodities without recourse to the exporter. Although long the preserve of exporters in Germany, and more lately Italy, forfaiting is now used increasingly by exporters in Great Britain, the United States, Canada and Scandinavia. It is a fairly simple operation with easy straight-forward documentation. The transaction involves the purchase by the forfaiting bank of a bill of exchange or a series of bills without recourse to the exporter. These bills will have been drawn by the exporter, accepted by the importer, and will usually bear the unconditional guarantee of the importer's bank. They are normally drawn payable at intervals during the credit period agreed between importer and exporter and are purchased at a discount by the forfaiter. The exporter thus obtains his cash payment and the importer receives his credit period. The forfaiter collects the amount of the bills as they mature directly from the importer. Credit periods vary, depending upon the type of goods and the country and commercial risk of the importer. The period is generally between one and five years with six monthly maturities. The usual forfait currencies are US dollars. Deutschmarks and Swiss francs and others, such as sterling, French francs, and the Scandinavian currencies are being used more frequently. CHOOSING FORFAITING Most types of financing require the continued involvement of the exporter in the financial side of the transaction during the credit period. Forfaiting has certain comparative advantages. In particular, it is possible to forfait 100 percent of the risk without recourse to the exporter, unlike government sponsored export finance schemes, where some retention of the risk by the exporter is required. In addition, exports from country sources do not present problems and forfaiting can also cover trade within the EEC. Other benefits for the exporter are: (a) The exporter's balance sheet is improved; debts are turned into cash thus improving the liquidity of the company and enhancing its cash flow. And there are no contingent liabilities for bills of exchange. (b) If the sales contract is in a foreign currency forfaiting removes the risk to the exporter of adverse movements in foreign exchange during the credit period. (c) Fluctuations in interest rates during the credit period can be ignored since in forfaiting the transaction is usually done on fixed interest rate terms on a discount basis. (d) The political and transfer risks are taken by the forfaiter. (e) The commercial risk is taken by the forfaiter. (f) The costs of administration and collection etc. during the credit period are removed.

Jan 1, 1985

By T. D. Yensen

IN the investigation of the magnetic properties of iron-nickel alloys,1 it was found necessary in order to make the alloys forgeable, or malleable, to add small quantities of some other element. Iron-nickel alloys have been known for nearly a century, but have been made in commercial quantities only since 1885. Their remarkable mechanical properties were disclosed by Riley in 1889 and from that time on a large amount of research work has been done both to discover new properties and to correlate the results obtained.2 Lately the Bureau of Standards has collected the published data in a special circular3 giving in compact form an account of the properties of the iron-nickel alloys. It also contains a clear historical sketch of the development as well as a selected bibliography. The chief difficulty with the development of iron-nickel alloys was that the "pure" alloys do not forge readily. The addition of small amounts of manganese, however, made the alloys forgeable, and manganese has therefore come to be regarded as a necessary constituent of nickel steels. The present paper shows to what extent manganese is needed for various nickel contents and also what is the effect of other alloying elements on the forgeability. It also touches upon the cause of forgeability but refers to other sources for more exhaustive treatises, on the subject. The alloys were prepared by melting electrolytic iron and electrolytic nickel with of without other alloying elements in the desired proportions in a magnesia crucible in a vacuum furnace under a. pressure of 1 mm. mercury. The ingots weighing about 2 kg. were allowed to cool in vacuo. If pipes or blowholes were present, the ingots were cut in such

Jan 1, 1920