The Omaha guide., 1947-10-11
Economic HighlightS

Economic Highlights
Business Week recently ran al article whose title, ~. 8
Exports: End of a Boom,'' outlines a situation of rapidly
growing economic importance to this country and the world
Since the end of the war, we have been selling goods
abroad at a tremendous rate. Europe presents a n unsuitable
appetite for the products Of America, and SO, to a lessed ex
tent, do the other continents. That appetite has not slack
cned in the sIightest-but, even so, our exports are now de
clining in both volume and value, and everyone expects
they will drop drastically in the future.
The reason for this is obvious. American exports have
lately been leaving our ports at the rate of l6,OOO,OOO,OO O
q year. On the other hand, our imports have been at the
rate of only $6,OOO,O0O,OOO . year. This means that the
balance of the world has been operating at a deficit of $40,
600, 600, 600 a year in foreign trade with us alone. And il
means that its dollar credits have been running out alarming
Iy fast, and that the bottom of the pile is definitely in sight
England, of course, presents the most pubicized example
of the trend. The American loan of So, 75O,OOO,OO was
expected to last through 1850, and possibly longer. When
Britain made her last withdrawal recently, the balance re-
manning was a mere 500, OO0, 600. That is only enough to
last her a few months at her latest rate of purchasing. The
result is that she is freezing the dollars she has left and IS
cutting her purchases in the U. S. to the bare bone. Fur
thermore, she is having to follow the same policy with other
countries, in that intricate currency agreements now in effec'
force her to- convert pounds into dollars. in many cases even
purchases are not made in America.
What is true of England is true of much of the world.
A number of Latin American nations have lately slapped
cosOAC AANNA OA ~-fO-
and gold stocks were becoming dangerously depleted.
The effect Of this abroad will be more belt tightening,
and a lower standard of living. The newest British ration
cut is an indication of what is happening The effect at home
will be the loss of many billion dollars worth of business.
Who will be hit hardest by the sag in exports? The
answer to that may be the farmer. To take England as an
example again, in the first half of l947 she bought about
S6O7, OOO,OO of American goods. Over 1892, 100000 wen'
for foodstuffs, and 81, 600, 600 more consisted Of inedible
fats. Every country, is making desperate efforts to become
as nearly sef-sustaining as possible in food.
Some machinery people have reported serious drops in
foreign sales. Butt by and Large, europe will use every pos
sible penny for heavy industrial equipment. The only hope
fer European economic salvation is to rebuild her shattered
basic industries, and she can't get the machinery anywhere
except from us.
Obviously, the market for anything resembling a luxury
or non-essential item will practically vanish.
All of this may be changed by future American legisla.
tiveaction. The Marshall Plan for instance, involves much
food for Europe as well as durable goods. But, at best, 4
will be limited in scope. And it applies only to European
countries not within the Soviet sphere of influence.
Theree h always the possibility of more American loana
and credits. But Congress will move slowly when it comes
to this. There is a feeling THAI Europe has not made the
most OF the aid we have given SO far.
Perhaps the most remarkable proposal yet is Mr.. Bevin's
suggestion that thte L. S. divide up the Fort Knox gold il
me interest OF world recovery. One American spokesman
observed that this would involve giving the gold away and
then buying it back. 1t hardly seems a feasible idea.
AT any rate, exports are on the way down. This won
cause major upsets in this country SO long as domestic bust
ness remains at or about present record levels. But should
Us. purchasing power fall In the home market. loss of ex.
ports would really be felt.