"THE MARGIN OF VICTORY"

Otago Daily Times, Issue 26792, 8 June 1948, Page 4

"THE MARGIN OF VICTORY"

The decision of the United States House of Representatives to reduce the Appropriations Bill' for foreign aid by over 25 per cent, vitiates the value of the gesture which President Truman had hoped to make. A measure which was envisaged as one to finance reconstruction is now in danger of becoming a mere programme of relief. The impression made by the Bill in its original form may be summed up in the phrase used by the Economist in a leading article, “ an act without peer in history/’ It gave an inspiration to the European countries to set about the final revision of their estimates and plans, and to Soviet Russia it must have come as convincing evidence that the United States recognised that national self-interest, security and economy were inseparably linked with European recovery. To-day, in the words of Senator Vandenberg, who is expected to lead the fight in the Senate to restore the cuts, the House of Representatives has struck “ a paralysing blow to American efforts to win the ‘cold war’ with Russia.” It is evident that a determined attempt will be made in the Senate to force the acceptance of the full programme, but even if this is successful there will have been another of the too frequent delays in a matter in which time is an important factor. Presenting his demands to Congress last December, President Truman described the basic considerations of 'the European Recovery Programme. “ The funds we make available,” he said, “will enable the countries of Europe to purchase goods which will achieve two purposes—to lift the standard of Europe closer to a decent level and at the same time to enlarge Europe’s capacity for production.” He also emphasised that sufficient funds should be made available “ to provide ' a margin bf victory ” for the recovery programme. Broadly speaking, it is this “margin of victory ” which the House has refused to grant. The reasons for the refusal may be presumed to be similar to those on which the House Appropriations’ Committee based its attitude. The. committee, for example, eliminated one item of 288,000,000 dollars to meet the balance of exchange between the 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. The item, on the other hand, could have been regarded as a contribution to bridging the gulf between European and American standards of living. The lack of generosity is all the more marked when it is recalled how Great Britain lost a substantial part of her loan because of a subsequent rise in price in the United States. The committee also stated that, as European grain crops were good this year, large scale relief would not be needed. Sir Stafford Cripps has made it clear that Great Britain will not accept loans for foodstuffs but only for the purchase of capital goods. The House’s statement, however, together with its doubts about the advisability of raising production beyond pre-war levels seems to reveal a lack of appreciation of the effect of accumulated deficiencies. A restoration of living standards and of production to those of the pre-war period would be insufficient to enable lost ground to be recovered and yet leave a margin for positive reconstruction. It is this aspect of the matter which it may be expected will be emphasised to the Senate when the Appropriations Bill comes before it.