Evening star., 1950-10-08

oAAC WOlAN IIdS oOUSllt Tie QOlldr
years has been not it's convertible
into the products of farm, mine
and factory; into the goods that
sustain the life and welfare of the
peoples of the world. But this
year there has become noticeable
a marked change in the relative
position of the United States dol
lar in world exchange.
Evidence of Change
The change is typified in the re-
cent rise in the price of Canadian
currency when measured in terms
OF our own. In September Can
ada's dollar cost in this country
81 cents. Today you have to pay
about 95 cents for it.
The change is typified also in
the fact that foreign governments
have been converting their New
York balances partly into gold, the
while those balances are growing
handsomely. Between August,
1949, and August, 1850, more than
81 billion Of gold passed from the
United States Treasury to foreign
ownership.
The change is typified in the
talk. however foolish, of an up
ward revaluation of the exchange
value Of the pound sterling, the
Australian pound, the Mexican
peso and other currencies; by the
clearly improved reserve position
OF Britain and other countries; by
the day-by- day imitation of prices
and wages taking place before our
eyes since the advent of the Ko-
rean war and rearmament.
In September of last year oc-
Cured a wave of currency deval-
uations. Led by the important
pound sterling, the worlds soft
currencies overnight were cut in
price; cheapened in terms of our
dollar. This tended to make the
goods priced in those cheapened
currencieS more attractive to
Americans and to make American
goods more expensive for the soft
currency people to buy.
Great Sums Go Abroad
While our export was thus being
retarded, we continued to supply
the outside world with large
amounts of dollars as loans or
outright gifts. Millions of dollars
flow regularly abroad In loans
made by the Export-Import Bank
and the World Bank and in Mar
shall Plan (ECA) donations. The
grand total, enabling other coun-
tries to buy our goods without
putting up their own money,
coupled with other American ex-
penditures abroad has made it
possible for other countries to
build up their gold and dollar
reserves. During the second quar-
ter of 1850 alone foreign gold and
dollar balances here accordingly
increased by $648 million. If Paul
Hoffman, when he testified before
the congressional Appropriations
Committees on ECA, had stated
that a large part of the money
was wanted to increase foreign
reserves here, he might not have
got all he requested for European
recovery.
Thus far we have talked mainly
of pre-Korea changes in the posi-
ton of the dollar abroad. Since
the advent of rearmament pro-
gram here and the miniature
world war in Korea, enormous
changes in international trade
have provided a windfall to the
dollar hungry nations. In under
taking to arm not only ourselves,
but. at our expense, our "Allies"
abroad, we have set In motion a
vast demand for foreign raw ma
terials while at the same time
stimulating private demand here
on the part of civilian goods pro-
ducers and SPECTATORS. AS a
result the plantation and mine
owners of Britain, Holland, Bel
GUM. France and elsewhere; the
Australians, Egyptians and Latin
Americans are banking fat profits
as the prices Of such raw ma
terialS as cotton, wool, hides and
skins, rubber and metals leap up
ward.
Different Shortage
Prior to Korea the outside
worlds dollar gap"-meaning the
amount of goods and services we
supplied them on the cuff or
simply gave them-was down to
one-fourth of the peak rate of
1947. Due to the war prepara-
tions, that fourth is being rapidly
reduced.
Ever since the war we have
heard about the dollar shortage,
meaning the lack of enough dol
lars to carry out reconstruction
and development programs or just
ordinary living. The Organiza-
ton for European Economic CO.
operation-the recipient organiza-
tion for Marshall Plan aid which
is sometimes referred to in Wash
ington as the "donees' union"
because it sets the conditions
under which it will accept ECA
dollars-has regularly supplied
tables of statistics measuring
Europe's periodic dollar shortage.
Washington economists privately
point out, however. that the dol
lar shortage" is nothing more
than the best estimate of how
much the recipients should re-
quest in the light of what they
are likely to be given.