Evening star., 1950-04-04
To Close the Dollar Cop

President Truman has taken wise and timely
action In calling upon retiring Army Secretary
Gordon Gray to serve rs head OF q special nom
partisan project to prepare now for the problems
that will exist when the Marshall Plan ends in
1852. The main purpose of the project-which
is in line with Senator Vandenberg's recent pro-
posal to Economic Cooperation Administrator
Hoffman-is to work out a program of concrete
measures aimed at closing the huge dollar gap
between our exports and imports.
The key problem that must be solved can
be stated fairly simply. AS the President has
written to Mr.. Gray, the Marshall Plan, or Eco
nomic Cooperation Administration, has already
worked wonders in stimulating the recovery of
Western Europe, and 1t can be counted upon to
accomplish good deal more during the remain
ing two years of its life. Yet, unless forward
looking steps are taken In the meantime, its end
in 1852 will still see our friends abroad unable
to earn from us a sufficient number OF dollars to
pay for all the goods and services they need
from U.S.
In other words, what must be formulated
between now and 1852 is program that will
enable our friends to overcome the dollar short
age that we have been taking care of by our
aid under the Marshall Plan. At present our
annual exports to them amount to about $l6
billion, but our imports from them total only
ence Of $6 billion-or approximately a third Of
our total exports to them-a1e being financed
by grants from us. In the next two years, of
course, the export-import gap is likely to narrow,
but it will still be dangerously wide if means
are not found in the interim to increase the
dollar earning capacity of the ECA countries.
Stated another way as a White House
memorandum has put it, the end of our ECA aid
in 1852 will create tremendous economic prob
lens at home and abroad unless vigorous steps
are taken both by us and foreign countries. 1t no
offsetting measures are worked out 1t may well
be that United States exports will be sharply
reduced, with serious repercussions on our do
mestic economy" (such as production cutbacks
and employment layoffs), "and with equally
serious effects on friendly areas of the world
which are dependent on our goods" 1t is with
this danger in mind that the President has
instructed Mr.. Gray to supervise and coordinate
the charting of a non-partisan course to over
come, or at least alleviate, the dollar problem
inherent in the prospective termination of the
Marshall Plan.
AS far as our overseas friends are concerned
the situation calls for such things as action on
their part to promote their economic integration
and to step up their dollar earnings in shipping
tourism and similar fields. AS for ourselves
being the worlds great creditor nation, we need
to expand our private investment abroad and
increase the volume OF our merchandise imports
The latter is OF prime Importance. Trade is a
two-way proposition. If we use tariffs and other
devices to keep foreign countries from selling
to us, it will simply be impossible for those
countries to acquire the dollars they must have
to buy from us.
In terms of both security and economics, the
Marshall Plan has been and still is, as important
to us as to Western Europe. Without it, leaving
aside consideration of the Soviet threat our
unstable farm surpluses today would be much
bigger than they are and our factories would be
employing fewer people and producing less. Be-
tween now and the time 1t ends, therefore, all
countries involved must take the kind of action
that will enable them to get along without 1t.
Otherwise 1852 is likely to be an even more
unpleasant year than this one.