STOP-GAP AID

Otago Daily Times, Issue 26616, 12 November 1947, Page 5

STOP-GAP AID

MR MARSHALL’S DEMAND

“INSPIRING CHALLENGE TO UNITED STATES ”

WASHINGTON, Nov. 10

The Secretary of State, Mr George Marshall, asked Congress to-day for 597,000,000 dollars for stop-gap aid for France, Italy, and Austria, to cover their needs between now and March 31, 1948. He tentatively estimated the cost of the long-term programme, to start about April 1, 1948, at between 16,000,000,000 and 20,000,000,000 dollars. Mr Marshall’s figures for emergency aid were a reduction on those which President Truman originally announced several weeks ag0 —642,000,000 dollars. Mr Marshall’s proposal envisages 42,000,000 dollars for Austria, 328,000,000 for France, and 227,000,000 for Italy. He expressed optimism over the short and long-range programmes achieving their objectives, saying: “Automatic success cannot be guaranteed, but I believe the chances of success are good.” Mr Marshall announced his programme to the joint session of the House and Senate Foreign Affairs Committees, which met as a preliminary to the meeting of full Congress next week.

Mr Marshall told Congressmen that they were being asked to make decisions “ which', although less spectacular and less dramatic, were no less important to the future of our country and the world than those of the war years.” He added that the three major Allies which fought the European War were directing their policies towards the restoration of the European community. “It is now clear,” he said. “ that only one Power —the Soviet Union —does not, for its own reasons, share this aim. The national interests of the United States coincide with those of a free and prosperous Europe. We must not fail to meet this inspiring challenge. “ We must not permit the free community of Europe to be extinguished. Should this occur it would be a tragedy for the world,” said Mr Marshall. “It would impose incalculable burdens upon this country and force serious readjustments in our traditional way of life. “ One of our important freedoms—freedom of choice in both domestic and foreign affairs — would be drastioally curtailed. Whether we like it or not, we find ourselves —our nation—in a world position of vast responsibility. We can act for our own good by acting for the world’s good.”

Mr Marshall said he did not intend asking Congress for an overall appropriation for the whole four-year period of the long-term European recovery programme, because uncertainties of weather, crops,- availability of supplies, and prices made accurate estimates impossible. The first request would be for a 15-month period, beginning April 1, 1948, and would require something under 1,500,000,000 dollars for the period April 1 to June 30, and somewhat less than 6,000,000,000 dollars for the year beginning July 1. As a general principle aid should take the form of grants or loans, depending in each case on the capacity of the particular country to repay, and the effect which the accumulation of an additional external debt would have on sustained recovery. . As a general principle, however, he considered that imports of food, fertiliser, fuel, of indispensible items of capital equipment for immediate replacement and repair, and of essential raw materials should be. financed by grants. “Loans should be made to cover the imports of capital equipment and raw materials which will directly produce means of repaym~snt and where such repayment can reasonably be expected,” he said. Mr Marshall prQposed that the United States Government should enter into bilateral agreements with each of the 16 nations to ensure aid was effectively used. These agreements would include “ undertakings to adopt monetary, fiscal, and other measures to maintain stability in price and cost structure, to develop production to reach the targets set by the participating countries, to increase the production of coal and basic foods, and to co-operate in reducing* barriers to trade and promoting increased interchange of goods and services.” Mr Marshall said the final plan to be submitted to Congress would contemplate the use of funds for purchases outside the United States of commodities not available in sufficient quantities inside the United States — especially Canada and Latin America. “ Such countries should be encouraged to contribute directly as much as they can to the recovery programme through grants, in aid; or by extending credits for exports to Europe,” he said. Mr Marshall emphasised:— 1. That the operation of the plan would in many ways define American foreign policy in the world’s eyes, and therefore must be fully in accordance with the policy of the President as expressed through the Secretary of State.

2. The organisation must be kept flexible, so it would be responsive to changing situations and varying supply conditions. 3. Full use should be made of existing Government agencies interested in foreign aid problems. 4. The administration must be under strong central direction and integrated closely to other operations of the United States Government both at home and abroad. Mr Marshall said the situation in China continued to cause the State Department deep concern, and a programme of aid and assistance to China would be submitted. The tremendous gravity of the current world economic problems requires American assistance to be directed to critical areas where it can be most immediately effective. We have become involved in two wars which have had their origins in the European Continent. , Mr Marshall also emphasised that his programme sought the special advantages and pursued no sinister purpose. It was a programme of reconstruction, production and recovery. “It menaces no one. This is certainly not the programme of a country seeking to exercise domination or to influence unduly any foreign country. The nations or political groups which have declared opposition to the programme apparently want to block for their own reasons a revival of Western Europe.” Mr Marshall said Austria would exhaust her funds shortly after the beginning of 1948; France could continue to buy food and fuel only until December; while Italy was in the worst plight of all. as she would be unable to buy such goods by the beginning of December. The interim programme was designed to enable the, people of those three countries “to continue to eat and work and to survive the winter.”