Evening star., 1947-11-09

the economy, with no comparable
output Of consumer goods to sop up
this purchasing power. This process
Is highly inflationary.
1t seems unlikely that European
nations can prudently afford to
sustain capital formation on as large
a scale as they have planned. What
this means, in effect is that housing
programs and capital development
may have to be slowed down until
European recovery is much more
advanced than at present.
Supply Determining Factor.
The final determining factor in
the size of a prudent program is
the availability of commodities in
this country. The committee has
canvaSsed such availability in detail.
At the Paris Conference, it was
concluded that the Western Hemi-
sphere simply did not have the food
resources to supply all Of the esti-
mated needs. AS against estimated
need for 100000 tons Of grain,
the Paris Conference conceded that
25,OOO,OOO tons was the maximum
which could be obtained from the
outside world with about 10000
tons coming from the United States.
In 1947, the United States will prob
ably export some 100000 tons
of grain with about 100000 tons
going to Europe. In view, however,
of the poor American corn crop and
the lack of fall rains, only a most
favorable crop year in l948 would
make any such performance pos
sihle.
With a number of other commod-
tiles, the situation is only little
less stringent. Steel and the steel
making materials, especially scrap,
are in particularly short supply in
the United States. Because it is a
basic industrial material, the effects
of this shortage are pervasiye. Coal
exports at high rate are possible
though they are imposing a strain
on the United States transportation
system and there may be q few
shortages in the coming winter. The
margin between supply and demand
of petroleum products is very mar
row in this country. The European
countries do not expect to import
this commodity from the United
States in volume, but the shortage,
like that OF steel products, Is world
wide. There is little likelihood that
these requirements set forth at Paris
can be met.
The situation Is much the same in
regard to most of the items OF ma
chinery and equipment the Euro
pean nations need. These re-
marks do not imply that the United
States can do little toward the re-
Mobilization Of Europe. " The
conclusion that does emerge from
the examination of particular mar
kets for particular commodities Is
that supply will be limiting factor
in many cases and that many Euro
pean requirements cannot be met
in full.
Nv. lf1E MAIIN1 ODC oE AN1211-
ICAN AID.
On the basis of revised estimates
of European imports and exports,
the committee calculates that the
cost OF the European aid program
to the Government of the United
States would be about $3.50, 900 900
for the first year. and between S12,-
900 900 900 and $1,000, 100000 for the
whole program here suggested.
These figures are not comparable
to those contained in the Paris re-
port. The latter are estimates OF
the deficit the participating Euro
pean countries would incur in their
trade with the Western Hemisphere.
They measure the margin by which
the European countries expect their
payments In dollars for goods and
services imported from the Western
Hemisphere to exceed their receipts
in dollars.
The Paris estimates Of imports
have had to be revised downward,
mainly on the grounds OF unavail-
ability of goods. To the extent OF
this revision the estimated cost OF
the program was also reduced. AT
the same time it was necessary, on
grounds of realism. to revise down.
ward the European statements OF
exports and to modify the figures
in a number of other ways which
increase the cost. The result was
an estimate by the committee that
the balance of payments deficit
would be $1,000, 100000 to $780,
oo0, 900 lower in the first year and
possibly as much as $4,000, 1000. 600
lower for the whole plan than that
contained in the Paris program.
Financing Outlived.
na,oox,e{%%ee'c ocfivn tn nf The