Memorandum, "Summary Outline of Discussion of Long Term International Problems for January 1950"

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mr. bloyd from w Salant November 17, 1949. SUMMARY OUTLINE OF DISCUSSION OF LONG TERM INTERNATIONAL PROBLEMS FOR JANUARY 1950 ECONOMIC REPORT I propose to begin with a discussion of the gift-financed gap in the v. S. Balance of Payments, and to use this as a springboard for a discussion of foreign investment under the Point Four Program. Other important international programs, such as ERP, will be dealt with but this will be done more or less in passing so that the Point Four Program will occupy the center of the stage. I. Existence. Meaning and Causes of the Dollar Gap. A. Statement of facts about postwar export surplus, pointing out that it is not confined to Europe. B. What is bad about it and why do ve want to close it? C. Reasons given in 1947 and reasons for believing that portion financed by gifts could be eliminated by 1952. II. Developments Since Initiation of the European Recovery Program. A. Great progress has been made in last two years to remove what were believed to be primary causes. 2. Increased European production. 2. Improvement in European shipping earnings. 3. Better control of internal inflationary pressures abroad for adjustment of exchange rates. NARA