Evening star., 1945-01-09

an International Bank Of Recon-
struction and Development. These
institutions will be integral parts Of
a broad program for cooperation
among the United Nations in those
areas of economic contact where
failure to adopt common policies
will result in economic spite
fences" economic waste, and eco
nomic warfare.
A concrete program for tnterna-
tional monetary and financial CO.
operation at an early date is essen
tial. In the first place, all countries
agree that solution must be found
for the evils that stem from the
unstable and destructive exchange
practices which the fund is designed
to eliminate. Second, the need for
international investment is already
becoming acute. The liberated
countries will require loans for the
reconstruction of their industry,
their transport, their cities, their
agriculture. and their trade.
The International Bank will make
direct long-term loans out of its
capital or from borrowed funds, and
particularly will guarantee private
loans for these purposes. While
the proceeds of these loans will be
spent to procure equipment in the
| countries where it is available, the
risks of lending will be spread equi-
tably among all member countries.
1t is therefore imperative that
both the fund and the bank be
established at once in order that
they may be properly stated and
equipped to cope with problems
which are already developing as the
countries in Europe are liberated.
Accordingly, urge acceptance of
the agreements and recommend the
enactment of legislation which
would permit the United States to
make its proportionate investment
in the fund and the bank.
Many Types of Investment
For Import Export Bank
In addition to the operations Of
the international Bank, there will
continue to be many types of for
eign investment in which national
financial institution such as the
Export-Import Bank should partici-
pate, especially during the next few
years when the foreign demand for
our products will be particularly
heavy. The Export Bank
will provide short and medium
term credits to finance our exporters.
1t will also undertake long term
lending for reconstruction and de-
velopment in cases where special
American purposes are to be served
and other countries may not wish
to participate.
In collaboration with private
banks, manufacturers, engineers.
and exporters, the Export Import
Bank has had 10 years of successful
experience in these fields. At pres
ent its resources available for new
operations are very limited. In or
der that it may play its part in the
reconstruction period, I recommend
early expansion Of its lending
power.
At present our foreign investment
programs are impeded by legislation
which restricts loans to those coun-
tries which are in default on loans
arising out of the first World War.
For both the International Bank and
the Export Import Bank to operate
effectively, as well as to achieve an
adequate flow Of private investment.
-. is essential that these restrictions
be removed.
i The American Nation has almost
doubled its total output of goods and
services under the impact of the war
program. Slightly less than one
half of this total output is purchased
by the Federal Government. What
is left for civilian consumption has
been sufficient to provide most of us
with better living standards than
prevailed before the war.
National Economy Operating
At Very High Levels.
i The national economy is operating
at extremely high levels of income
and expenditure. Despite wartime
taxes and large wartime savings,
consumers and business have sought
to buy more than the available sup
ply OF goods and services. Neverthe-
less, prices have been substantially
stabilized through vigorous applica-
ton of our stabilization program
and the cooperation of the Ameri-
can people. Whereas the cost of liv-
ing has increased by between 25 and
30 per cent since 1899, it has riser
only about 2 per cent since the
, "hold-the-ine" order of April, 1943
; Holding the line on prices and wages
has prevented, and is still prevent
ing, inf1ationary developments.
The reduction in war expenditures
which I hope the progress of the war
will permit during the next fiscal
year, will result in somewhat lower
wartime incomes, even if wage cell
lngs are adjusted upward to avoid
reduction in average hourly rates
when overtime is curtailed. Never
theless, the demand for goods and
services will undoubtedly still be
6ASeIo oiid VIC Gall De sure OF eager
buyers for whatever durable goods
industry might produce.
When war production is extern
ssvely reduced some of the controls
; which were needed in an all-ou,
war economy can be relaxed. al.
though other controls must be con-
tlnued to assure necessary war pro-
duction and orderly reconversion
For example, We must avoid specu-
lation in inventories such as con-
tributed to the imitation after the
last war.
The fact that many businesses and
individuals have ample funds for a
buying spree necessitates caution In
: relaxing controls. The balance be-
tween incomes. savings and expendi.
; lures will still be precarious during
the reconversion period. It will
!, therefore be necessary to retain the
machinery for ALLEGATION and price
. controls as long as certain materials
and finished goods are in short SUD-
ply. I therefore recommend extern
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