HELP FOR EUROPE

Gisborne Herald, Volume LXXIV, Issue 22464, 20 October 1947, Page 5

HELP FOR EUROPE

CAPACITY OF U.S. REPORT TO PRESIDENT ABLE TO STAND STRAIN <N. Z.P. A. —Reuter — Copyright.) (10 a.m.) WASHINGTON, Oct. 19. “The United States economy generally is physically able to meet the requirements of a considerable programme of foreign aid and still preserve national security and maintain living standards,” says the Secretary of the Interior. Mr. J. A. Krug, in a report submitted to President Truman on the physical aspects of the American capacity to implement the Marshall plan. Mr. Krug is chairman of one of the three special committees appointed by the President on June 22. ' President Truman, on receiving the report, said the fact that the natural resources were adequate to permit sharing was heartening, but he emphasised that other vitally important factors must be weighed before the extent to which the resources could be shared could be determined. Resources Very Elastic

These and other factors were being surveyed by the council economic advisers and Mr. Averell Harriman s committee which has been appointed to study the nature and quantities of the resources which could be used for relief.

Mr. Krug’s report states: "America exports a relatively small proportion of her total production, but with scarce supply and high prices a part pf everyday experience, the need for conserving material raw sources is greater than ever. The demands arising from the foreign aid programme will, in some measure, aggravate the strains on United States economy.

“It is self-evident that even a country as wealthy as the United States cannot long underwrite other nations material deficits without serious impacts on its own economy and resources, but we know from war experience that the limits of what our economy can do are exceedingly elastie and our resources are not fixed and immutable, but subject to constant changes in technology, production and consumption patterns. Revival of Trade Vital

“We know that what we, as a nation, can do depends greatly on what we set out to do. The revival of world production and trade, leading to an intelligently balanced use of the world’s resources is not only a solution of the foreign rehabilitation problem but an essential to America’s own continued well-being and security.” Mr. Krug has come to the conclusion that the only serious problems of supply will be those related to shortages which are already world-wide, particularly steel. The basic limiting factor to steel exports is ingot production which, thus far, in 1947, totals 6,000,000 tons less than the rated capacity due to the shortage of scrap steel and pigiron. This shortage could be eased by the steel industry itself, encouraged and assisted by the Government. Accelerated scrapping of surplus materials is desirable, coupled with exploration of means of increasing capacity by improved techniques. The report emphasises the need for reducing the consumption of wheat by livestock, supplying coal and machinery to Europe and North Africa to raise fertiliser production: increasing the number of trucks to take coal to the ports and a 50 per cent, increase in the export of farm machinery.