Evening star., 1950-08-06
Korea Crisis Expected
To Force Continuance
OF European Aid
BY John N. Hiehtower
Asseeiated Press Stoff Writer

Associated Press Stoff Writer
The Truman administration is
beginning to recast its plans for
future foreign economic aid as
result of the Korean crisis.
Top officials are already largely
convinced that the need to ex-
pand and speed up Western Euro
pean defense programs will COM
pei this country to continue large
scale assistance to Western Europe
after the Marshall Plan ends.
What success these officials
would have in getting such
program through Congress re-
mains to be seen, however. AL
ready there is much sentiment on
Capitol Hill to cut the Marshall
Plan in view of increased military
spending.
This week Marshall Plan funds
escaped reduction by narrow mar
gins in the Senate, and another
effort is to be made to cut them
in the House.
Uncertainty Cited.
Ofhcials who feel that economic
aid probably will be necessary after
the Marshall Plan ends base their
belief partly on the following
ground:
The atmosphere of uncertainty
in the world as to the prospects
for war or peace appear to have
reduced drastically the chances
for private investments in the So
called underdeveloped areas. The
Government has been counting on
such investments to take up much
of the slack in American spending
abroad after the Marshall Plan.
I'VE have a commitment to
Congress to end the Marshall
Plan operation in 1852" one
highly-placed informant said yes
terday. land we will do it, of
course. But as date for cutting
off substantial aid to the West
ern European countries, 1852 just
doesn't have any meaning any
more"
Gray Preparing Report.
The problem of what sort of aid
should be given to prop up Eu-
ropes war-strained economies
aside from purely military assist
ance-iS primarily the concern of
Gordon Gray, special assistant to
President Truman.
Mr.. Gray had to rewrite his in
ttial report after the Korean out
break but expects to give Mr.. Tru-
man comprehensive study of the
whole foreign aid question late
next month.
In addition, w. Averell Harri-
man, the Presidents top foreign
affairs co-ordinator, has devoted
considerable attention to this
question and SO have ranking Of
f1cials of the State Department
and Economic Cooperation Ad-
mlniStration.
The reasons why the question
arises at this time are reflected
on the European side, too. Brit
aims dramatic offer Thursday to
undertake a three-year, $9.5 bill
lion rearmament program was
conditioned on assurances that
the United States would help meet
the cost by supplying tools and
raw materials to make the
weapons. The British thus argued
in effect they could not under
take a rearmament expansion
purely out of their own resources
without reducing their living
standards. which they do not
want to do.
Others Take Similar Stand.
Other Western European coun-
tries, at American urging, are I'M
derstood to be taking a similar
attitude although it did not show
up yesterday in Denmark's an
nouncement of two-year- $57. Il
million rearmament program. No
condition about American aid was
mentioned in reports of the
Danish announcement.
Until the Korean crisis de-
veloped, all American civilian aid
programs abroad were planned on
a declining basis. This was par
ticularly true of the work which
had been done by Mr. Gray and
the staff under him.
They had assumed that Euro
pean recovery, though not COM
pleted, would be far advanced by
the end of the Marshall Plan.
They believed that some small
American assistance might have
to be given to individual European
States but that much of the dol
lars needed could be earned as
a result of American public and
private investments in other areas
of the world. This latter point
tied into President Truman's
point four plan.
There was considerable hope
that returning confidence of busi-
nessmen everywhere would en-
courage steady growth of pri-