MARSHALL AID TO BRITAIN

Press, Volume LXXXV, Issue 25742, 2 March 1949, Page 5

MARSHALL AID TO BRITAIN

“Will Be No Cut”

STATEMENT AFTER SENATE INQUIRY

WASHINGTON, February 28. There woukj be no cut in the proposed grant of 940,000,000 dollars to Britain under the Economic Co-opera-tion Administration programme, said the chairman of the Foreign Relations Committee of the United States Senate (Senator Tom Connally) in Washington to-day. The proposed 940,000,000 dollars in new aid to Britain was a “tight fit,” said Mr Paul Hoffman, head of the Economic Co-operation Administration, in a statement to the committee earlier to-day. The committee had celled on Mr Hoffman and a group of advisers to justify Britain’s share of new aid funds and to explain “wide discrepancies” in the estimates of Britain’s recovery. Mr Hoffman said that any reduction in the allocation to Britain would adversely affect recovery in both the United States and Western Europe. “Until Britain’s earnings of ’ dollars, through exports and services to the United States and other hard currency areas, are sufficient to pay for essential imports, she will still need American aid,’’ he said. Mr Hoffman said: “We are convinced that the salvation of Western Europe depends upon the joint economic effort of all the participants, and it can only be achieved by mutual aid and close economic co-operation. Any setback to a country so important as Britain would be bound to have the most serious consequences.” Mr Hoffman expressed concern lest British progress be reversed and “a stultifying and generally demoralising influence on the whole pace and vigour of British recovery be substituted.” 200,060,006 Dollar Cut Considered He said that the question of cutting the British programme by at least 200,000,000 dollars had been explored. In addition to the adverse effect this would have on the British economy, it might cut" into United States exports of cotton, foods, tobacco, and industrial goods. It would mean that Britain would have that much less to spend in the United States, Canada, and other markets where goods could be bought only for dollars. He claimed that Mr C. P. Mayhew, the British Parliamentary Undersecretary of Foreign Affairs, had been “needled by the Russians” into making his statement before the United Nations last week that the United Kingdom had already achieved recovery. He described this and a statement by Mr Hector McNeil that Mr Mayhew had been “telling the truth,” as “pure-: ly political.” Mr Hoffman insisted that “we in the Economic Co-operation Administration are just as anxious, as anyone else to save every dime of Government funds. At no time have we relied on any British politician for arriving at the figure of what Britain needs.” “Embarrassing” British Statements However. Mr Hoffman declared himself “distressed and embarrassed” by the statements of the British officials. “This present situation is a very distressing one for us,” he said. “To put it mildly, these speeches have proved very embarrassing to us. But I can ’say that if there should be any slowing down of the British recovery, I can think of nothing that would be more disastrous to the whole recovery programme.” He emphasised time and again that the 940,000,000 dollars allocated to Britain for the Marshall plan for the second year was a “tight fit.” and that the figure represented the best estimates of the best experts. In c nite of his asperity towards the speeches by British officials, Mr Hoffman was full of praise for Britain’s recovery efforts and self-discipline, in which he was supported by Senator Arthur Vandenberg (Republican. Michigan). Mr Hoffman was followed by Mr Thomas Finletter, chief of the E.C.A. mission in London, who went through a detailed description of Britain’s present and prospective balance-sheet earnings and export targets. He went even further than Mr Hoffman in describing the 940.000.000 dollars as “an absolute rock, bottom figure.” He said it was the figure the British Government had recommended, and he personally thought that a larger sum would have been needed. The Senate debate on E.C.A. appropriations will begin in the next few weeks.