Evening star. [volume] (Washington, D.C.) 1854-1972, 1948-01-22
Policy Of World Bank
On Loan Supervision
Should Guide Aid Plan
Stote Department Could
Avoid 'RothoIe' Spending.
Capitol Hill Believes
Rp Dapid Laurence

not 60 down the "rathole"-the
word SO frequently heard on Capt.
toll Hill to describe the possible fail
ure of the plan to build up bar
rier in Europe against communism?
This is the question that bothers
many members of Congress. Yet in
variably when they try to get an
answer from Secretary Marshall or
his aides to the suggestion that
safeguards be written into the legis-
lation, the objection is made that
any such provisions would be re-
garded abroad as an infringement"
on sovereignty.
But it so happens that as nations
Of the world have already accepted
the very kind of limitations which
1t is now sought to introduce into
the Marshall Plan. Thus, for in
stance, the agreement creating the
World Bank contains the following
language:
"The bank shall make arrange
ments to ensure that the proceeds OF
any loans are used only for the pur-
poses for which the loan was
granted, with due attention to con-
siderations of economy and ef1i-
cheney and without regard to other
roneconomic influences or consider
ations."
Integral Part of Pact.
This language is sufficiently broad
and understandable and it certain
ly cannot offend against any ma
tion's sovereignty since it is al
ready an integral part of an agree
nent signed by As nations, includ-
ing all but four of the countries in
the group of is coming under the
Marshall Plan.
What it means is that the World
Bank is actually providing today
a method and an authority for in
specting what is done with the pub
lies money. There is no reason
why the European Recovery Admin
istration-as the agency to carry out
the Marshall Plan is to be called
cannot function like bank with
reference to all loans.
Where there are grants for relief
or gifts the situation is somewhat
different. On the loans the Ameri-
can Government can insist on the
right to follow through on what
happens to the money.
The real difficulty is that the State
Department is unduly sensitive to
Russian criticism. Sometimes 1t
becomes important to weigh the
advantages against the disadvan-
tages, and it doesn't matter a great
deal what the Russians think about
any feature of the Marshall Plan.
They are propagandizing against
the whole thing anyway. Their CO.
operation is not going to be won by
avoiding all forms of supervision
of American lending abroad.
U. S. Kept Track Before.
This is not the first time the
United States has stood guard over
the use of American funds abroad.
Thus the famous Dawes Plan and
later the Young Plan after World
War I involved the creation OF a
commission which sat in Berlin and
kept track of what was happening
to the receipts and disbursements
in Germany and acted in an advi-
sorry capacity on. certain financial
and economic problems.
This precedent. can be OF help
In devising ways and means OF
following through on the Marshall
Plan. It would be most unfortunate
If the State Departments sensitive
ness were allowed to squelch every
suggestion made by the Congress
to protect the handling of American
funds.
When nation is appropriating as
much as $1,000, 100000 year, more
instead Of less respect is engendered
when the citizens of the lending
country appear to take an interest
in what happens to their money.
This is a natural function of the
lender and is better understood in
Europe perhaps than anywhere else
in the world.
There is certainly no need to ask
that Americans be part of the
spending agencies>of other govern
ments, but in the legislation author
izing the lending Of money it can
be provided that American inspec-
ton rights and complete informa-
ton must be assured at every stage
of the lending and spending process.
Otherwise the money appropriated
for the 1949 fiscal year could very
we'll be the last for those countries
which dissipated the funds for pur-
poses at variance with the objec-
tives set forth by the United States.
The provision in the World Bank
agreement is adequate and if in
sisted on by Congress would surely
beiaccepted by foreign governments.
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