ECONOMY MOVES BY EISENHOWER

Press, Volume XCIX, Issue 29365, 18 November 1960, Page 17

ECONOMY MOVES BY EISENHOWER

Big Cut In State Spending Abroad

(A.Z. Press Association—Copyright) AUGUSTA (Georgia), November 16. President Eisenhower today ordered a sweeping seven-point economy programme aimed at saving 1000 million dollars a year in overseas spending. As part of it, he ordered the gradual return, beginning on January 1, of 284,000 members of United States military forces round the world. The White House estimated later that the emergency moves, approved after months of top-level study, would cut down by 1000 million dollars the amount of dollars spent abroad in 1961.

Half of this saving would come by slashing Defence Department spending, the White House said. Another 330 million dollars would be saved on operation of the foreign aid programme. United Press International said the highlights of the President’s seven-point programme were to:

Without sacrificing combat strength, start reducing the number of armed forces wives and children abroad by 15.000 a month, commencing next January 1, until the total is not more than 200,000. Most of the dependants would come from Europe. Bar the purchase of foreign goods by military post exchanges. Order the International Co-opera-tion Administration to place “primary emphasis” on buying American goods and services in its foreign operations. Find new ways to increase United States exports and renew demands for dropping restrictions on purchases of American goods by other nations. Direct the Secretary of Agriculture to make sure that disposal of surplus food abroad does not hurt the market for United States farm products. Order a strong curb on buying goods abroad. Set a December 15 deadline for reports from each Federal agency outlining steps taken to comply with the directives

Mr Eisenhower told reporters he wanted to emphasise the importance of the ‘‘white paper” concerning the worrisome deficit in the country’s international balance of payments. The White House said aides of the President-elect John Kennedy were informed today of the sweeping series of directives designed to protect the dollar.

Mr Eisenhower said the United States must demand that other prosperous nations in the Western camp share in paying the costs of foreign aid and keeping troops poised to resist aggressors. Referring to the return of military dependants, the President said: ‘‘Of course, it’s a most unhappy occasion.” But he said servicemen’s tours of duty overseas might be shortened to com-

pensate for the absence of their families. He said the nation must insist to its N.A.T.O. partners that they carry more of the financial load of maintaining a military shield in Europe against possible attacks. But he said reduction of United States forces in Europe was being contemplated at present. ‘‘The last thing we would want to do is diminish our combat strength . . . until N.A.T.O. countries Can find it possible to fill the gap,” he said. “We should never want to reduce our forces so that people will think we have abandoned the area or lowered the flag.” Mr Eisenhower said the reason for the drastic moves was the need to close the balance-of-pay-ments gap. “In the last three years.” he said, "a total of about 10,000 million dollars more has been paid out than has been received.”

He called for prudent fiscal policies at . home. “As long as other people know we can pay our bills as we go they don’t get frightened and demand payment in gold,” he said. The International Co-operation Administration was directed to limit any operations which do not result in direct buying of United States goods or services and reduce purchases of commodities abroad to the lowest possible amount. He also directed a ban on buying of foreign goods by State Department commissaries and stores.

The Defence Department was studying and would report to President Eisenhower by December 15 the question of whether there should be lay-offs of civilian employees overseas, the American Associated Press said.

The United States military forces employed about 247,000 foreign nationals and 23,000 United States nationals overseas.

Commenting on the over-all programme, one official said: “This is not the solution to the balance-of-payments problem, but it is an important housekeeping measure.” He expressed hope that it would demonstrate to foreign governments the United States’ determination to solve its payment problem. While the end of persistent payments deficits was not in sight, a Treasury aide said: “At the moment, we do not contemplate further measures.”