Evening star., 1953-10-24
j. ). Considers
NeWCutsin
Aid TO Europe
No Weakening Seen
To Defense Effort as
Economies Improve
By John M. Hiohtower
By John M. Hiehtower
Associated Press Stuff Writer

Administration officials are
considering further cuts in for
eign economic aid on the theory
that, because of Europe's i'm
proving economic health, they
would not weaken it's defense
effort.
This administration reason
ing is expected to be reflected in
budget proposals to Congress
next year for appropriations for
the fiscal year beginning July l.
Economic improvements in
Europe are measured, for ex-
ample, by the expected achieve
ment of a SO billion total of gold
and dollar reserves behind Euro
pean currencies. Such gains are
attributed not only to the pro-
longed United States assistance
programs, but to renewed con-
fidence by the Europeans in
themselves and to the cumula-
tive effects of recovery from
World War II destruction.
To Be Reviewed Next Week.
The economic prospects and
outlook will be reviewed in Paris
next week by the Organization
for European Economic Co.
operation, which includes II
nations. Harold E. StaSsen,
President EiSenhower's chief of
foreign operations, will attend in
the role of observer. He is ex-
pected to tell the Europeans
they can count on a relatively
stable American economy for
long time in the future.
Mr.. StaSSen and his advisers
estimate that the next round of
congressional appropriations will
show:
l. A further gradual decline in
economic assistance to Europe.
,. An increase in assistance
and development programs in
the Middle East and Far East
and an unchanged continuation
of United States aid to Latin
America.
'53 Funds Heavily Cut.
These estimates have not yet
been reduced to publicly known
figures. However, funds appro-
priated for aid to Europe in the
fiscal year ending next June 80,
including help to France to carry
on the war in Indo-China, total
$790 million. This compares with
a total of $1,282, 100000 made
available for the same general
purposes in the previous fiscal
year.
The total money available this
year, including new funds voted
by Congress and funds carried
over from previous appropria-
tionS, stands at $6,652,0OO, 900.
1t represents money for military
equipment as we'll as economic
assistance. The tendency has
been for military help to go up
and economic aid to go down.
Encouragement over Europe's
economic progress is modified
by a feeling of officials here
that Italy and France still have
some tough problems to over
come. But their efforts will be
made easier, it is believed. with
the general European economy
relatively healthy.
May Partially Support Armies.
One matter under study is
frank advocacy by the admin
1Stration of policy of supporting
allied armies in part where the
local government is not able to
maintain the necessary defense
level. Turkey and Greece, for
example, are said to have mill
tary establishments extremely
important to free world security
but greater than the Greek and
Turkish economic capacity to
support.
The principle is not new. how
ever, because the United States
has been providing army main
tenanCe funds to France for In
do-China and to South Korea.
French Ambassador Henri
Bonnet conferred briefly yester-
day with UnderSecretary of
State Walter Bedell Smith. Mr..
Bonnet told reporters it was a
general discussion touching on
the North Atlantic Treaty Or
ganization and incidentally on
Indo-China.
1t was reported, however, that
Mr.. Bonnet asked assurances on
Americas NATO policy and that
Mr.. Smith told him United
States forces would be kept in
Europe as part of the NATO
system.