Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-12-16

drain on the United States Treas
ury's cash
The financial crisis Of the pound
which led to the above-cited steps
is less attributable to the losses that
followed the closing of the canal
and cutting off Of Britain's trade
in oil and other commodities than
to the run on sterling based on
fears of the future.
The economic effects of the canal
closing are none the less real and
IN some cases hit other countries
more heavily than Britain. No one
knows how long the canal will re-
main closed. Hence no one can tell
now severe the economic and polit-
zeal strains will ultimately be.
The Suez affair is reflected in
the amounts which Europe and
others must now spend for oil in
the Western Hemisphere dollar
area. Coal must be substituted for
oil. where possible. All sorts Of
industries in Britain and Europe
are affected, as are imports. ex-
ports, shipping and all the varied
sources of income from London's
entrepot trade.
Fronce Is Hurt
France is badly hurt. A fourth Of
French industry uses oil. Cement,
chemicals, engineering, glass and
other lines are hit. Auto plants are
hurt. Revenues are cut. Imports
are costlier. Revenues are reduced.
Imitation and attendant social un-
rest are stimulated. France must
soon draw on the International
Monetary Fund credit arranged
some weeks ago.
Other countries in Europe feel
the pinch: Sweden. Holland. Bel
GUM, Italy. Even Egypt repeatedly
wants oil now from us.
While none of these effects are
pleasant. Washington experts hold
that it is easy to become over
alarmed. If the canal is re-opened
within three or four months Britain
and Europe should pull through
without need for large United
States aid. Most European coun-
tries possess substantial monetary
reserves. With progress toward a
Middle East settlement, confidence
IN European currencies will
strengthen. The worst of the run
on sterling seems definitely over.
The United States is giving Britain
generous financial support through
the World Fund and otherwise.
Any additional aid, such as grants,
would meet with strong United
States Treasury opposition under
present conditions.
More for Mideost
Some economists in the State
Department are less confident that
the Middle East crisis is blowing
over. In any case, there is a dispo-
sition there to give more economic
aid to the Middle East in 1857
than was given in 1856.
AS for Europe, and especially the
"bystander" victims of the Suez
debacle, Secretary Dulles won't
close the door to any valid request
for aid based on need. He regards
necessary financial aid as desir-
able cement for the Atlantic ALI
ance.
Whether this aid will reach pro-
portions requiring a new congress
sional program few would venture
to predict. 1t depends on how long
the canal is closed and how well
confidence in European currencies
is maintained.
The administration Of course
must reckon with Congress in all
this. Congress always grumbles
about foreign aid. Nonetheless, in
the end, it always keeps the hoop
rolling along. There is no reason
to expect otherwise in 1857.
Therell be hearings and plenty
of probing. Senator Georges doubts
Of last winter will be recalled. Sem
ator Byrd's opposition to ANY
further continuation of foreign
economic aid will be noted. The
recommendations of the President,
based on military and peace con-
siderations, will be modified, per-
haps, but not tossed aside.