Evening star., 1947-11-10

P. Lovett.
cerning the administration of the
European Recovery Program.
There will be important functions
for the United States to perform
in Europe. Much of this work will
be negotiation with governments o1
a nature constituting essentially ar
extension of the conduct Of the en-
tire relationship of the United
States with the participating coun'
tries. Such matters are now han
died through our Embassies and LIE.
cations and clearly should continue
to be. There will be certain addi.
tional functions arising directly out
of the operating program, such as
screening of specific import require
ments, arrangements for furnishing
technical assistance and other SINH
lar specialized activities which will
require the appointment of qualified
men who can devote their full at
tention to such matters. These men
in their dealings with participating
governments should work through
our Ambassadors because 1t is es-
sential to maintain a single chan
mel of responsibility for United
States negotiations with other gov
ernments.
For general coordination Of the
operations in Europe and for central
representation in the continuing
European organization which the
participating countries have decided
to establish, consideration should be
given to the designation of special
United States representative for the
European recovery program, with
ambassado dorial rank, appointed by the
President with the advice and con-
sent of the Senate.
AS a general principle, aid should
take the form of grants or loans, de-
pending in each case upon the ca
pacity of the particular country to
repay and the effect which accumu-
,ation of additional external debt
would have upon sustained recovery
The precise determination in each
case should be made by the admin
istrative agency with the advice OF
the Department Of State and the
National Advisory Council. In prac-
tice 1t is felt that, where need Is
clearly demonstrated and where re-
payment can not reasonably be ex-
pected, imports of supplies which are
quickly consumed, such as food, fer
tilizer and fuel, of indispensable
items of capital equipment for i'm
mediate replacement and repair, and
of essential raw materials should be
financed by means OF grants.
Loans should be made to cover i'm
ports of capital equipment and raw
materials which will directly pro-
duce the means of repayment and
where such repayments can reason
ably be expected. At the same time
every encouragement should be
given to early initiation of private
financing so as to eliminate as far
as possible the necessity for direct
assistance from the United States
Government. Use should also be
made of the resources of the Inter-
national Bank whenever in the opin-
ion of the bank the necessary and
appropriate conditions for loans can
be met.
Places Responsibility.
It is obvious that the basic re-
sponsibility for European recovery
rests on the European countries
themselves. However, this Govern
ment must have assurance that the
aid it provides is effectively utilized
for the achievement Of European
recovery as rapidly as possible.
It is contemplated that, to this
end, bilateral agreements will be
negotiated between the United
States and each of the countries
participating in the recovery pro-
gram, setting forth the reciprocal
undertaking relating to American
assistance. These agreements will
vary in form and content as be-
tween countries, depending upon the
nature Of the aid to be furnished
and the conditions deemed import
ant in each case.
The commitments should include
undertakings to adopt monetary,
fiscal and other measures to main
tain stability in price and cost
structures; to develop production to
reach targets set by the participat-
ing countries and in particular, to
increase the production OF coal and
basic foods; and to cooperate in re-
ducing barriers to trade and pro-
noting increased interchange OF
goods and services. Many other
points and more detailed provisions
to be covered in the agreements
will be presented and discussed dur
ing the hearings.
Assistance to Europe will, to a
considerable extent, take the form
of commodities. The proposal to be
submitted to the Congress contem-
plates the use of funds provided
under the program for purchases
outside the United States OF COM
modities not readily available In
sufficient quantities in this country.
This policy will tend to protect our
home economy against infiationary
price movements which might re-
suit from concentrated buying in
our markets. It seems clearly in our
interest that the greatest possible
amount Of these supplies be OBJ
tanned for Europe from other coun-
tries. Such countries should be en-
couraged to contribute directly as
much as they can to the recovery