State Trading

December 12, 1947

Report Outline
Foreign Aid and U.S. Government Trading
Government Trading in Foreign Countries
I.T.O. Charter and Future of State Trading

Foreign Aid and U.S. Government Trading

Whether Congress provides for administration of the European Recovery Program by an independent government agency headed by a single administrator, as recommended by the President's (Harriman) Committee on Foreign Aid, or by a government corporation headed by a bipartisan board of directors, as recommended by the House (Herter) Committee on Foreign Aid, the new agency will have wide powers over procurement of supplies for the Marshall Plan countries. To the extent that it acts directly as an exporter or exporting agent, and as an importer of materials that may be furnished in return for American aid, it will constitute a state trading agency.

During the war the United States government engaged in foreign trade on a large scale, although the bulk of the commodities which it imported were for its own use and the bulk of the commodities which it exported were for the use of allied governments rather than for resale to individual consumers. In some cases, however, during and since the war, Washington government agencies have carried on trading operations formerly conducted exclusively through private commercial channels.

Private Traders and European Recovery Program

Some concern has been voiced in business circles that arrangements for carrying out the Marshall Plan will injure private exporters and importers and encourage acceptance of peacetime government participation in foreign trade. Recently, for example, a New York merchant, while conceding that some government agency must screen shipments under the foreign aid program, contended that private traders could handle the actual transactions if the Export-Import Bank provided the financing. He asserted:

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