Evening star., 1950-10-08

TO nave Deen seeking mlllCary alQ
in the form of dollars which they
can spend for what they will.
In at least one case, France,
there are doubts that even Amer
lean arms will be manned and
used for the intended purpose Of
the strengthening Of Europe
against the Russian danger. Hav-
ing accustomed the world to ex-
pect a continuous flow of billions
from Washington, we are having
a hard time getting something for
our money.
There was nothing like Korea,
however. to point up the risks to
ourselves in such a policy. Editor
Jenkin Lloyd Jones of the Tulsa
Tribune voiced the view of most
Americans when he told a group
of foreign editors that in Korea
the whole free world was attacked
and the whole free world, acting
through the U. NJ, ordered a
counterattack. "The only trouble
was that while everybody blew the
bugle, only Uncle Sam fell in"
Mr.. Jones added: MANY Ameri-
cans fear that we are being
played for suckers"
British Comment
Even abroad, where dependence
on the American taxpayer has be-
come a habit, people are begin
ming to wonder how far this
process can be carried. In
London's Sunday Times Financial
Editor George Schwartz records
his reflections on the OEEC's re-
cent recommendations on inter-
national investment of dollars:
Long-term interest-free loans ION
such nominal terms that they are
virtually equivalent to grants"
Comments Mr.. Schwartz: "At the
mention of the word grants all
eyes turn in one direction. Over
to you, Uncle Sam -.
II begin to feel sorry for the
American people. In about 200
years they have spread across a
raw continent and furnished it
with a stupendous stock of capital.
Just when they could ease up
and cultivate the arts and graces
of life, in which on the proclaimed
standards of many authorities in
the underdeveloped countries they
are lamentably deficient, there is
loud cry of Look at the state
of >. and then follows q list Of
countries which have been in
habited for millennia by peoples
who haven't found the spare time
and energy to look up the santa
ton.
Investors Shy Away
.''The assumption, nay, the in
struction, is that the American
people should buckle down to it
and get those roads and bridges
built in Asia. On easy terms,
mark you, on such nominal terms
that they are virtually equivalent
to grants. I have heard some
caustic leftish talk about the un-
derdeveloped state of Alabama,
wherever that may be-"
If conditions abroad were
sounder, one might expect people
with dollar capital to shift some
of their holdings abroad and thus
escape the imitation which in the
United States is eating into the
value of savings. AS commodity
prices go up and the money de-
preciates, there is no safe place
at home where the average person
can escape the consequences.
Some speculate in commodities,
but price gyrations are often
sudden in that area and the un-
sophisticated are likely to get
badly burned.
Should the administration have
it's way and persuade the Atlantic
nations to share in the costs of
rearming, currency imitation will
again threaten to become serious
across the ocean. In any case,
putting workers into uniform will
tend to reduce production Of
civilian goods in Europe. Scarce
goods make for higher prices.
Europe, therefore, is not too in
viting as a refuge for nervous
capital. Moreover. in most Of
Europe. exchange controls are
tight and, capital once sent there
cannot easily return home when
wanted.
Canadian Situation
Closer to our borders are safer
refugees for capital and capital
has been moving into both Canada
and Mexico. Some of this capital
is American, some belongs to
Mexicans and other foreigners
who had previously sent it here
for safety. Canada has exchange
controls, but they are mild COM
pared to Europe's. Money in
Mexico may legally be converted
into dollars whenever the owner
wishes.
The large American demand
and soaring raw material prices
have lead many people to expect
strengthening in the
Canadian dollar. Canada is a
large producer of scarce alu-
minum and other strategic metals
as well as foodstuffs and manu-
features. When large amounts Of
money started to move from this
country into Canadian domestic
securities and bank balances, over
and above that being put into
genuine long-term investments.
The Canadian government became
concerned. In three months
Canada's gold and dollar reserves
increased from $1,255, 100000 to
81 ,789 100000.