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OCR Page 1 of 7the
MEMORANDUM
My recent trip to Europe included visits to England, Belgium,
Holland, Denmark, Germany, Switzerland and France. In addition, my
associate at the bank, who was with me all of that time, continued the
trip and visited Spain, Portugal, Italy and Austria.
In general, I was impressed by the excellent job being done by
our ECA organizations. Their work is appreciated and I feel sure this
aid is largely responsible for the favorable economic and political con-
ditions in the different countries. Without this help, I do not see how
serious trouble could have been avoided in many instances. The spread of
Communism has definitely been stopped everywhere, at least under existing
economic conditions, and it is really not a subject of much concern. Re-
covery is substantially further advanced than I had expected and the in-
flationary trend has been reversed with deflation evident, but not as
pronounced as in this country.
SERVICES
ENGLAND
England differs from most Continental countries in two important
respects. First, the dimensions of her balance of payments problem are
much larger and her problem involves the whole sterling area. Second, her
government is much more militantly socialistic. The latter factor has
undoubtedly accentuated her problems, as bureaucratic controls have tended
to keep costs high in relation to declining world prices. Many of her
problems would, however, exist under a different type of government, al-
though I do not think to the same extent as now prevalent. Achievements
to date in production and export volume deserve some credit, as does the
fine spirit of sacrifice which is characteristic of the British people.
High taxes and excessive controls are acting as a definite danger to
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