Evening star., 1947-11-10


arshall was accompanied to to-
: to Great Britain Douglas (cen-
Star Staff Photo.
by extending credits for exports to
Europe.
Effects on World Economy.
| I have so far confined my re-
marks to the European recovery
program itself But the economic
effects of this program will extend
far beyond the boundaries of the 16
countries involved. 1t is in one i'm
portant sense world recovery pro-
gram. The delay in European re-
covery has created serious problems
for many countries which normally
supply the European market with
raw materials and other commod-
tiles. Where Europe's trade with the
rest of the world would normally
have been balanced by an equivalent
exchange Of goods and services, the
low level of European production
and the limited availability of ex-
ports has drasticaNy reduced such
payment possibilities. Furthermore,
the habitual triangular trade pat
terms have almost disappeared,
whereby Europe met its deficit for
goods obtained from the Western
Hemisphere by means of balances
obtained from other parts Of the
world.
Similar patterns of triangular
trade used to provide certain other
countries in the Western Hemi-
sphere with balances from Europe
which were used to purchase goods
in the American market, With the
breakdown of these trade patterns,
supplying countries, to substantial
degree, have had to accept nom
convertible currency or extend cred
it in order to sell in the European
market. Neither of these proce-
dures has given them dollars with
which to purchase in the American
market. The net result has been
that trade continued around the
world in large part on the basis
of American grants or credits which
made dollars available to other
countries to meet their import re-
quirements. The diminishing sup
ply of dollars is restricting trade
everywhere.
The European recovery program
will be quickly reflected in other
countries, If the important element
of fexibility in purchasing is pro-
vided. To the extent that supplies
for Europe are procured from non
participating countries for dollars,
the trade position of these countries
with the United States will be i'm
proved. In this way we feel that
the problems of the other Western
Hemisphere countries can be met
through a combination of the Euro
pean recovery program purchases
and normal Export-Import Bank
transactions.
More important in fundamental
sense, with increases in production
in Europe such as those contem-
plated in the Paris report, exports
from Europe will increase, and the
Necessity for the various supplying
countries to accumulate noncon-
vertible currencies or to extend
credit will diminish. Just as the
progress Of each individual country
among the 16 will affect the progress
of the others, so the, recovery of
Europe will inevitably be signifl-
cant link in a chain reaction Great
ing or maintaining economic activ-
ity In other countries.
China Situation Mentioned.
The situation in China continues
to cause us deep concern. The civil
war has spread and increased in
intensity. The Chinese Communists
by force of arms seek control of
wide areas of China.
The United States and all other
world powers recognize the national
government as the sole legal gov
ernment of China. Only the gov
ernment and people of China can
solve their fundamental problems
and regain for China its rightful
role as a major stabilizing influence
in the Far East. Nevertheless, we
can be of help and, in the light OF
our long and uninterrupted record
of friendship and international CO.
operation with China we should ex-
tend to the government and its peo-
pie certain economic aid and as
sistance. A definite proposal is I'M
der preparation for early submis-
sion.
I do not have. to tell you that this
foreign economic program of the
United States seeks no special ad-
vantage and pursues no sinister
purpose. 1t is program Of con-
struction, production and recovery.
It menaces no one. It Is designed
specifically to bring to an end in
the shortest possible time the de-
pendence of these countries upon
aid from the United States. We
wish to see them self-supporting.
This is certainly not the program
of a. country seeking to exercise
domination or to influence unduly
any foreign country. The nations
and political groups which have now
declared their opposition to the
program apparently wish to block
for their own reasons the revival of
Western Europe.
Interim Aid Program.
I have gone at some length into
the major features Of the long
range plan for European recon-
struction and the part that the
United States can prudeptly and
wisely contribute because i. I fully
realize that the speedy and adequate
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