Evening star., 1947-11-04
Foreiqn Aid and Initiation

In it's report on the impact of foreign
aid upon our domestic economy, the Pres
ident's Council of Economic Advisers has
arrived at the same basic conclusion as
the earlier and related Krug report on
our national resources. This conclusion Is
that the United States is capable-without
placing dangerous strain upon 1tselt-of
promoting Europe's recovery with help on
scale as large as contemplated under the
Marshall plan.
The councils report, however, warns that
the effort to meet both domestic and for
eign needs will sharply accelerate our cur
rent imitation unless essential curbS are
established. In the overall picture, the
extraordinary consumer demand here at
home has been mainly responsible for the
upward movement of prices, but foreign
demand is an important factor as regards
certain key items. AS the council points
out, these items are food, steel, industrial
and agricultural machinery coal and ferti-
lizer-all in relatively short supply, all ur-
gently needed abroad, and all therefore
sensitive to inf1ationary pressures of a
contagious kind
1t Is because of this that the council
has emphatically recommended that a
limited number of wartime curbS be set
up in connection with our foreign aid and
that the Government adhere to a strict
anti-infationary fiscal policy. The recon-
mendations include: Cd Executive power
to allocate scarce materials for domestic
use; (2) a continuation and strengthening
of export controls; 90 measures to dis
courage boarding of items in short supply;
a. restrictions on certain types of specu-
lation; 60 checks on the expansion of
credit, and co encouragement of indi-
vdual savings, Federal economies, and the
maintenance of the present high level of
taxes.
Some of these proposals are bound to
run into trouble in Congress- Chairman
Knutson of the House Ways and Means
Committee, for example, has served notice
that he intends to fight for heavy slash
in taxes during the special session, and
there will be strong core of resistance to
the idea of restoring any kind of wartime
control. Yet, the facts being what they
are, the Council of Economic Advisers has
offered an argument too impressive and a
are two towering realities before us. One
Is that we must extend large-scale aid If
Western Europe is to escape chaos of a
sort that would undermine our own
security and prosperity. The other is that
we are already in the midst of imitation
and that this imitation will almost certainly
reach fearsome extremes unless we take
intelligent action to check it in keeping
with the great domestic and foreign de-
mand on our economy.
Both the Krug report and the report of
the Economic Council have made clear
that the United States can do the job that
needs to be done. The same finding un-
doubtedly will be contained in the forth
coming report of the committee of private
citizens headed by Secretary of Commerce
Hartman. But this premise is conditioned
on the assumption that we will do some
thing definite about imitation. Failing
that, then our long-term aid to Europe
which is so vital to our own we'll being
may be reduced by skyrocketing prices to
too-ittle- too-late futility. Nothing could
be more important than for Congress to
keep that grim possibility constantly in
mind