Evening star., 1950-06-04

more than she can pay for. What
would happen then?
| Paul @. Hoffman. economic
cooperation administrator. sup
piled the answer. He said 1t
would call for q reduction In ex-
ports Of more than So billion. and
he added:
such q quick and drastic re-
ducticn would obviously mean ca
tastrophe for Europe because her
very life depends on maintaining
q huge flow of food and raw ma
terial imports, as well as certain
tools and equipment that can be
obtained only In the United States.
Such a reduction would also result
In severe diSlocation Of our own
economy
| Secretary Of Commerce Sawyer.
discussing the same problem.
stressed the economic dislocation.
The harm would be greater than
the percentage of production des-
tined for foreign markets" he said.
'Cutbacks would unquestionably
have cumulative adverse effects on
United States prices. production.
employment and purchasing
power"
Tourist Trade Helps
Mr.. Hoffman believes that be-
tween now and 1853 Europe must
effect further dollar savings Of
something more than 81 billion
and at the same time increase her
earnings by something less than 81
billion. Then. he believes. trade
between the United States and
Western Europe can be brought
into balance somewhere between
So billion and $3.5 billion.
Europe can save dollars by buy
ing some of the things she needs
in other markets or by making
them herself. Mr.. Hoffman told
the Senate that a liberal estimate
Of what Europe could sell of COM
petitive goods in this country by
1883 would be 81 ESQ, 1000. 900.
There are, however. non-com-
petitive items In the world trade
balance. One Of them Is scenery.
1t is estimated that American
tourists will spend $500 million
abroad this year. There are also
remittances by Americans to rela-
tives abroad. and such things a.
ocean freight charges and marine
insurance.
There are European industries
which have an advantage in pro-
duction or. at least. are not at Q
disadvantage. Their products. II
sold extensively here. might edge
out OF business the high-cost or
marginal producer. II that results
in unemployment. a policy Of wei
coming those imports might be on
an unstable footing.
Defense Enters Picture
The industries affected are ones
in which defense considerations
enter. We need precision instru-
ments and special tools in war;
time. Should we protect our pro-
ducers with tariff or should we
let the foreign products come In
and maintain the home industries
with a subsidy. That's a knotty
problem for Mr.. Gray.
There Is considerable confidence
that the American market can
absorb a substantial increase in
imports without running into trou-
BILE. In 1948 we produced goods
and services valued at $255 bill
lion. Our imports from all parts
Of the world totaled SIM 900 900,
or per cent Of our gross national
product. Add $l.2 billion to this
and the percentage Is only 3.5.
the same as in 1885 and less than
in any Of the years l92l-l929 In
elusive.
Mr.. Gray's survey. however, In
not confined to Europe alone. It
is q job Of global dimensions be-
cause the problem of foreign trade
and foreign payments stretch
around the world. And q solu-
ton may be found in one part OF
the world to q problem In an
other part.
In the first nine months of
l949 the United States bought
more than 1t sold in Brazil, Cuba,
Bolivia, Chile. Colombia and
Uruguay. If Brazil would take
her surplus of American dollars
and buy from Europe she could
pay for those goods in American
dollars which Europe would use in
turn TO pay for American goods.