Cuts Recommended In U.S. Foreign Aid Budget

Greymouth Evening Star, 5 June 1948, Page 6

Cuts Recommended In U.S. Foreign Aid Budget

WASHINGTON, June 3. The Appropriations Committee of the United States House of Representatives, in reporting on the Bill providing funds for the Marshall Plan and other foreign aid programmes, recommended a cut of 27 per cent, from the figure proposed by the Administration. The measure now provides a sum of 5,980,710,228 dollars for world assistance in the 15 months’ period ending on July 31, 1949, whereas Mr Truman had asked for 6,553,710,228 dollars for the 12 months ending on April 30, 1949.

The committee cut the amount for European aid to 4,000,000,000 dollars, a reduction of 245,000,000 dollars from the sum asked for, and said it was dissatisfied with the progress of the rehabilitation of Germany. The committee said: “Since July 1, 1945, the United States has provided foreign aid totalling 18,182,000,000 dollars, much of.which has been wasted.”

It approved 400,000,000 dollars of the 463,000,000 dollars requested for aid to China and agreed to the Administration’s requests for 424,000,000 dollars for relief in Japan and the Riukiu Islands and 107,000,000 dollars for Korea. Attitude to Japan The committee completely erased the 150,000,000 dollars sought for Japanese economic reconstruction, which had General MacArthur’s support, and it expressed misgivings about further aid to China. When he was informed of the committee’s action, the Economic Cooperation Administrator (Mr Paul Hoffman) promptly requested the reinstatement of the full amount of 4,245,000,000 dollars for European aid. He said: “The less money we

have the less recovery we can expect.” The proposed cut will be debated -in the House of Representatives tomorrow, but it seems certain that the House will not restore the cuts. Senate's Viewpoint

The Senate is not likely to make such heavy cuts, and the official figure will probably be announced after there has been a conference between the two Houses.

The Appropriations Committee stipulated that wool bought under Economic Co-operation Administration programmes should come from stocks at present held by the Commodity Credit Corporation, instead of being bought in foreign countries. The chairman of the committee (Mr John Taber) said that the E.C.A. had proposed to buy wool from other sources than the Commodity Credit Corporation at prices higher than the 42 cents per lb which the corporation paid for its stock of 240,000,000 lb. The committee also stipulated that the E.C.A. should not buy goods anywhere at prices higher than those in the United States. Explaining the committee’s reductions, Mr Taber said he was satisfied

that the E.C.A. could operate for 15 months on the money allocated, and accomplish proper rehabilitation. European Grain Crops The committee had eliminated one item of 288,000,000 dollars to meet the balance of exchange between participating countries and the United States because the expenditure of such a sum would have meant that the United States would have been paying debts due to itself.

Mr Taber said that another reason for the reduction was that the European grain crops were estimated to be nearly at pre-war levels, and accordingly large-scale relief should not be needed. “Any kind of prudent management should provide for the real needs of these countries without the enormous expenditures which have been proposed,” he said. He added that any unbiased analysis of European production figures and the E.C.A. estimates led “to a doubt about the foreign aid programme’s real aims. If it is the E.C.A.’s purpose .to raise production in the participating countries to a level far beyond the pre-war level, we are tackling a project which has been grossly misrepresented to the American public.” Reasons for Slowness of Aid

The Washington correspondent of the Daily Telegraph says that the British Ambassador to the United States (Sir Oliver Franks) will try to speed up Marshall Plan aid to Britain. “There is general criticism of the slow pace at which the European recovery plans are being put into effect,” says the correspondent. “Part of this is due to lack of staff on the Economic Co-operation Administration, and part to the failure of the participating nations, including Britain, to submit the details of concrete plans for which grants or loans can be made.

“Except for relief supplies, the Economic Co-operation Administration requires specific projects to be laid before it, so that it can determine whether to approve contributions within the time limit of four years. The decisions whether grants or loans will be made depend upon a country’s ability to repay. “Britain was tentatively allotted £75,000,000 in grants and £25,000,000 in loans for the April-June quarter of tiffs year, but so far no specific projects have been submitted.”