U.S. AID THREAT

Chronicle (Levin), 15 May 1948, Page 5

U.S. AID THREAT

-Reutef,

Nervousness In Sterling Financial Circles

(N.Z.P.A.-

CopyHghi)

Received Friday, 7.20 p.m. NEW YORK, May 13. Mr. Averell "Harriman's outwardly" innocuouS statement that the United Btates was eonsidering its policy toward the sterling area in connection with the European recoverj^ prograinme elearly disturbed fepresentatives of the British financial press present at the Uiterview, says the New York Times' London correspondent. "There has been much talk in Lom don that certain quarters iu Washington desire to weakon or even break up the sterling area, ' } says the paper. "Those fears will now be intensified, altliough the United States Ambassa-dor-at -large did say tnei'e had been 110 formulation of American policy yet. ' ' It f rightens Britons to think that a policy on the subject is contemplated, and the reporters tried to pin Mr. Ilarfinian down specificallv 011 items of trade with the British Domiliions. He (lenied that the ComlnouWealth nations' trade would be interfered with although lie said the United States felt that Dominions lilie other countries shofiJd contribute an equitable share to European recovery. " No Dumping of American Goods. Mr. Averell Harriman, United States special Ainbassador for the European recovery prograinme, said at a ~ press conference in London 011 Thursday that there waS no question of any intentiou of dumping surplus American goods in Europe. Bv and large it Would be a sacrifice for the United States to provide the exports requircd to carrv out the programme. Tlie United States would have to export agricultural machinery, for instance, of which shchad great need. There was a basic scarcity of steel in the United States and in the world generally, The European recovery programme, he added, did not mean that trade be tween Eastern and Western Europe would cease. On the eontrarv, it whs of much value. Western Europe needed grain, timber and coal, and iu exehange for them Eastern Europe would have to receive supplies of machinery. No War Goods For Russia. ' ^ !Mr. Paul lloffman, Administrator of the European Gooperation Administration, today assured the Senate Appropriations Committee that United Btates aid under the European Aid Programme, would be cut off from anv country send- ' ing war goods to Russia. He alsc assured the committee that he woulo see that the Marshall Plan countries reform their trade' and fiscal policies, but added that 110 attempt would be riiade to influence their politieal system. Benator Homer had asked Mr. Hoff.man: "Why shoul.d we send steel to Britain which will be used in the mahuf'aeture of jet engines to be sent to Russia?" I' There has been considerable eontroversy in Congress . over reports that Britain is sending jet aireraft engines to Russia. Britain has formallv denied these reports. • The European Cooperation Administration cliief (Mr. Paul .Hoffman) told the Benate Appropriations Committee; that although he had no plans to finance the purchase of newsprint he would not like to close the door o-n that possibilitv. "After atfwe need the circulation of the truth iu Europe. We have been trying to get the facts on newsprin't, but thusfar we have not paid for one ounce of it. Otu* objective is to help Europe produce its own newsprint so that it will not have to come all tlie way to Canada for its supply."