Evening star., 1950-11-19

side of the iron curtain to our eau
oped in communism under the le
other hand, if the cost of mobiliz-
ing the material resources and
manpower of the Western world
for our defense becomes too great,
it may very well set in motion a
wave Of currency imitation which
easily might destroy the great
economic strength of the Nation.
Facing this dilemma, President
Truman asked Gordon Gray, upon
his resignation last March as Sec
retary of the Army. to study the
whole complex of our foreign
economic relations and to develop
appropriate recommendations de-
signed to assure ourselves that
our own policies are those which
will serve best to reinforce our
economic strength and those of
other free nations of the world
Mr.. Gray's report to the President
was published November 10.
Mr.. Gray's Report to the Pres
ident on Foreign Economic Pol
icies" is an imposing document
covering the whole range of our
foreign economic problems. It
might be called a free-hand
sketch of plan to mobilize the
physical resources of the Western
world in order that the challenge
Of Soviet Russia might be sue
cessfully met.
We may indeed be sure that
the 82d Congress, despite the
changed balance between the two
major parties arising out of the
recent election, will be profoundly
influenced by this report when
legislation on the question of for
eign aid beyond the target date
of June 30. 1852. comes before 1t
for consideration.
Policy Objective
At the very outset. the Gray
report strongly emphasizes that
this study was made with a full
realization of the fact that the
foreign economic policy of the
United States has not been de-
signed primarily to accomplish a
balance between the exports and
imports of the country, which Is a
purely economic end, but rather
for the purpose of achieving OBJ
jectives in the political and mill
tary sphere directed at establish.
ing "a just and lasting peace
among nations"
Indeed. the report says, the Ma
ton has already adopted a polio.
which calls for the deliberate us
of its economic resources and in
dustrial power as a means O
achieving this basic objective. TIL
outstanding example of this polio.
| in action is the European Re
covery Program. Since its adop
ton. the United States has pouret
into the economy of the world
particularly into the economy o.
Western Europe, some $14 billior
in grants and $8 billion in Gov.
ernment loans for the sole pur-
pose of creating a political ano
economic environment favorable
to peace rather than to war.
That the ERP has so far been
successful may be seen from the
fact that, according to the Gray
Report, the disequilibrium be-
tween United States exports ano
imports had virtually disappeared
by mid 1864 development
which, to the economists, signifies
that the free world is again be-
coming self sufficient and that
except for the recent introduc-
ton of threat of war, the Eu-
ropean recovery program might
be discontinued June 80, 1852, az
was originally planned.
Calculations Upset
However. developments over thu
past several months have set ir
motion forces which have com
pletely upset all previous calcula-
tions calling for an end to the
ERP by June 80. 1852. According
to the Gray report. these devel.
opments, having their roots in the
Korean incident, are:
(a The decision to accelerate
rearmament in the United State!
and in Western Europe;
b) The increasing tension
military, economic and politica
in important areas of the
world;
(c) The impending shortages ir
major raw materials and durable
goods; and.
Cd The probability of genera
inflationary pressures arisin
from the increase in armament
expenditures and, especially, O.
sharp increases in raw materia
prices.
In his report, Mr.. Gray solemnly
warns that 1--WE should face frank
ly the fact that the original pur'
pose of the European recovery pro
gram-to help Europe to become
self sufficient within a four-yea,
period-must be modified, as fal
as timing is concerned, by tht
subsequent developments on th'
international scene, although th'
basic objectives of the ERP il
Europe are, if anything, more
vital than ever to our nationa
interests. Furthermore. the pro-
vision Of military equipment il
not by itself enough to enable
Western Europe to expand it!
own military production ane
forces with sufficient rapidity" tt
meet the present crisis. "Wha
is needed, therefore. is a reassess
ment of the outlook of tn,
Western European countries in tn
light of their revised requirement.
and their capabilities under tht
joint defense effort.
Provided that the Western
4 ~.