ECONOMIC AID FOR EUROPE

Press, Volume LXXXIII, Issue 25206, 10 June 1947, Page 7

ECONOMIC AID FOR EUROPE

FINANCING OF LOANS WORLD BANK’S PART ASSESSED (Rec. 7 p.m.) NEW YORK, June 8. “In view of the latest statements by the Secretary of State (General G. C. Marshall), it is evident that the urgency of the world’s economic needs and the approaching ‘dollar crisis’ have already relegated the International Bank for Reconstruction and Development to a subordinate position in foreign financing.” says the financial writer of the “New York Times.” “Informed observers say that the conditions anticipated when the institution was founded at Bretton Woods in 1944 have never materialised. The bank’s own operations also have been delayed unduly, and its activities have been eclipsed by actual events — Europe’s failure to reach adequate levels of production and the liquidation of European assets. “General Marshall recently announced that his top policy-planning committee in the State Department was conducting a world-wide survey to determine what the reconstruction demands on the United States were. The specific needs, when disclosed, are likely to be tremendous. “Although the World Bank nas already granted an initial loan of 250,000,000 dollars to France and is dealing with some 2,500,000.000 dollars worth of other foreign loan applications, the effect of world developments on its operations is clear —unless its entire charscter is changed. While it is theoretically the instrument to finance and promote world production, the bank cannot make loans beyond the extent to which the market wul absorb its securities. “Thus, even if the bank were a political instrument —which its management and other proponents carefully point out it is not—-there is no possibility of its being used arbitrarily to meet the present world situation. The investment market will see to that.”