U.S. Arms Orders In Europe May Defer Dollar Shortage

Gisborne Herald, Volume LXXVII, Issue 23316, 27 July 1950, Page 7

U.S. Arms Orders In Europe May Defer Dollar Shortage

(11 a.m.) NEW YORK, July 26. The 10,000,000,000 to 20,000,000,000 dollar rearmament programme will not solve the Atlantic community’s dollar crisis but will probably minimise, postpone and obscure it for a while, says the New York Times diplomatic correspondent in Washington. What the massed intellects of the Administration are trying to figure out is to spend that much money in a hurry without creating unnecessary shortages and inflations in the United States.

In planning for both security and stability, manpower, factories and other resources of Canada and the Western European Allies are being assigned an important armament-producing dollarearning role.

All countries that have supplies of critical raw materials will get an immediate opportunity to earn dollars.

Washington is planning to place dollar orders in Canada, Britain, Italy and other countries where many essential goods can be manufactured to United States specifications. It is hoped to order from the British some military items such as jet aircraft that will increase both the armament of the Western nations and the dollar pool of the British Treasury.

In short, this new demand from the United States and the increased British rearmament programme may cut into British production facilities now making products for sale in the dollar market. In the long run it may create a new reconversion problem for Britain and obscure the basic realities of the dollar gap, but for the next few years —if plans here materialise as expected—the rearmament programme will at least provide a new, if temporary, source of the United States currency aVid give the British a little more time to adjust to the realities of the dollar-short world.