The Omaha guide., 1947-07-26
ECONOMIC
HIGHLIGHTS

GA four-year or 1ive-Vedl P'
of U. S. aid to Europe, to cost
about S25. 900, 900, 900 is in trouble
before it starts" says the United
States News. President Truman's
! Cabinet is sharply divided on n
plan. Congress is inclined to De
cool toward it. Europe wants and
badly needs the dollars. but may
/ not like the conditions to be at
tached to any new dollar grants"
The economics Of thu problem
are bleak to an extreme. Tnls
country is the only important pro-
Queer Of the goods Europe must
have for economic rehabilitation,
no less than for immediate susten-
ance. Those goods must be paid
for with dollars. However, foreign
countries are earning only 38 per-
cent Of the dollars they r spend
ing. The loans we have already
made are running out at an
alarming rate, and will be x
hausted, in most cases, in less
than a year.
The export-import situation
tells the story in another way.
Our exports abroad amount to
around 500, 900 900 900 a year.
Our imports from abroad, on the
other hand, arel less than 5000,
900 900 a year. That means. from
the foreign point of view. an an
nual deficit of nearly $4,000, OO0.
900 a year. A number of countries
notably Britain, r attempting
to step up their export product
ion in order to make their balance
of trade less unfavorable, and to
maintain their dollar credits as
long as possible. But these effects
have not borne much fruit, and no
great improvement can logically
be expected in the neal future.
Foreign countries have invest
ments in this country, in secur-
tiles, industrial properties, etc.
However, according to TIE U. S.
News, if all long-term -yleign in
-vestments of this nature were liq-
Undated, Europe's pocketbook
would be fattened by only $4,000,
0O0, 900 enough u balance tie IN
port-export scale for a mere eight
months. Furthermore, these assets
are unevenly distributed. The
great bulk of them belong to Eng
land, and some of the neediest
countries have little or nothing.
It will be a long time before
anyone knows just how far the
United States will go in under
| writing European recovery. But it
does seem certain that the policy
will not be of a blank-check
character and that firm strings
will be attached to future loans
and gifts and money so far ad-
, vanced and in some cases, have
been more interested in building
political organizations than in
trying to put their countries on
their economic feet. Public seems
Public opinion seems all in favor
Of stopping that.
The Marshall Plan obviously is
! based in part on such considerat-
ions. 1t says, in effect. that Eur
opean rehabilitation is the duty
of Europe, and that aid from US
can be given only if all the coun-
tries involved cooperate to the
limit. It thus marks an effort to
break down geographical, political
and chronological barriers to the
recovery of the continent.
1t is possible to draw parallels
between the present and the per-
iod following World War 1, when
we made large loans to Europe
which were repaid only in part.
But there is this enormous differ
ence-the sums involved then
were much smaller, and the
United States had a relatively in
significant tax and national debt
problem at home. On top of that.
there was no struggle for power
such as that which is being car
ried on between the United States
and the Soviet Union today. The
present European problem is CON-
plicated byy the most important
military anddiplomatic considerta.
IONS. Whilewe are Helping the
rest of the world, self-preservat.
ion demands that we prepare fol
any conceivable future contin.
gency-including that Of war.
Is American industry rolling ir
money? On the basis of the bare
statistics a yes" answer to that
would seem justified. Howevre
as a Newsweek survey recently
pointed out, there is another side
to the picture. The magazine said
The hard-to-b eliev fact was thai
business, despite record profits
hard pressed for funds"
The reason for that is thu enor.
moNs sums industry has beer
spdneing for new and better r
duction facilities. Laa year, 70,
example, Industry profits totaled
s12, 500. 900. 900. But in the same
wear industry sront e1o nno noo