NAC Files, Lot 60D137, Box 3671

Information Paper Submitted to the National Advisory Council by the Secretary of the Council


Doc. No. 938

Statistical Survey of United States Government Postwar Foreign Aid

During the period July 1, 1945 through June 30, 1949, the United States Government made available $27.2 billion for foreign assistance, of which $23.3 billion were utilized or expended and $3.9 billion remained as an unutilized balance on June 30, 1949. United States foreign aid utilized in these four years has averaged somewhat less than $6 billion per year (about one-half billion dollars per month). There has been no clear trend, either upward or downward, in the amount of foreign aid utilized; in fact, expenditures for the last two years of the period under review were identical with those for the first two, and expenditures in fiscal 1948, the year in which the total was lowest, were only 15 percent lower than in the peak year of 1949 (see Table I). Preliminary estimates for 1950, including MAP disbursements, point to a level of expenditures on foreign aid of the same order of magnitude as the annual average for the previous four years.

There has, however, been a marked shift in the distribution of foreign aid between grants and credits (see Table I). While credits, which amounted to over two-fifths of foreign aid for the four year period ending June 30, 1949, accounted for more than half of our foreign assistance in 1946–47, they were less than one-third of the total in 1948–49, and less than one-fifth in 1949, and in 1950 will [Page 811] probably constitute about one-tenth of the total. It should be noted that by 1952 the debt service of foreign countries on postwar foreign loans made by the United States will amount to approximately $½ billion.

geographical distribution of aid

The ERP countries accounted for over 70 percent of the total aid utilized (see Table I). There was a marked trend upward in the ERP countries’ share of annual foreign aid, the proportion increasing each year. It rose from 58 percent in 1946 to 80 percent in 1949, and will probably be even more in 1950. Asia received about one-sixth of the total aid utilized, of which about three-quarters went to China and Japan, while Latin America received less than 2 percent of the total and about 10 percent went to European countries outside the ERP and to the rest of the world.

foreign aid and the united states postwar balance of payments

Total exports of goods and services of the United States amounted to $67.4 billion between July 1945 and June 1949 (see Table II). The United States received $35.3 billion in foreign goods and services, leaving a difference of $32.1 billion to be financed from other sources. United States Government foreign aid covered over 70 percent of this gap, while $6.6 billion of the remainder was met by the liquidation of gold and dollar assets of foreign countries. It should be noted that while shipments to Europe and Asia continued to make up a large portion of United States exports, on a relative basis the share of goods flowing from Europe and Asia to the United States decreased in the postwar period as compared with prewar.

changes in foreign gold and dollar reserves

Total gold and dollar reserves of foreign nations have declined by over $5 billion in the last four years (see Table III). The decline would have been even greater were it not for the addition of current gold production (outside the United States) of about $700 million a year to the world supply of gold. The ERP countries accounted for about three-fifths of the decline, having lost almost 30 percent of their gold and dollar balances since 1945.

foreign aid and the budget

Expenditures on foreign aid for the four years ending June 30, 1949, constituted about 13.5 percent of total budgetary expenditures. Since fiscal 1946, a year which included heavy expenditures directly connected with the War and its immediate aftermath, the annual share of the foreign aid program in total United States Government expenditures has fluctuated closely around 15 percent. The peak year, both absolutely and relatively, was 1949, when expenditures on foreign aid amounted to $6.3 billion and constituted 17 percent of total expenditures [Page 812] (see Table IV). It is estimated that expenditures on foreign aid for fiscal 1950 will constitute 13.8 percent of total estimated expenditures and will exceed the estimated deficit for the current year by $½ billion.

Table I

U.S. Government Foreign Aid Utilized in the Postwar Period

by type of aid and by geographical area

(in billions of dollars)

Fiscal years
Type or area Total postwar aid (est.) 1950 (Est.) 1949 1948 1947 1946
Total postwar aid (est.) $29.4 $6.0 $6.3 $5.4 $6.2 $5.5
By type of aid:
Grants 18.7 5.4 5.2 2.7 2.1 3.3
Credits 10.7 0.6 1.1 2.7 4.1 2.2
By geographical area:
ERP countries 21.3 4.8 5.0 4.2 4.1 3.2
Asia 4.9 0.9 1.0 0.8 1.0 1.2
Latin America 0.5 0.1 0.1 0.1 0.1 0.1
All other 2.7 0.2 0.2 0.3 1.0 1.0

Note: Transactions of the International Bank and the International Monetary Fund are not included in this Table. In the postwar period (through September 30, 1949), U.S. dollar disbursements of these organizations to foreign countries totaled $1.3 billion.

Components will not necessarily add to totals due to rounding.

Table II

Foreign Aid in the U.S. Balance of Payments

postwar period

(in billions of dollars)

Means of financing
Fiscal year Total exports Total imports U.S. Gov’t, aid (net) Liquidation of gold and dollars Other*
Total $67.4 $35.3 $22.2 $6.6 $3.2
1949 16.8 10.5 5.7 0.2 0.4
1948 18.3 9.4 4.6 3.1 1.3
1947 17.7 7.9 5.7 3.5 0.6
1946 14.6 7.6 6.3 -0.3 1.0

Note: Components will not necessarily add to totals due to rounding.

[Page 813]

Table III

Estimated Foreign Gold and Short-Term Dollar Balances june 30, 1945 to june 30, 1949

(in billions of dollars)

Area June 30, 1949 1948 December 31 1947 1946 June 30, 1945
Total, all areas $14.6 $14.9 $15.1 $19.3 $19.7
ERP countries 7.5 7.8 7.8 10.0 10.5
Asia & Oceania 2.1 2.0 1.8 2.0 2.0
Latin America 2.8 2.7 2.9 3.6 3.6
All other 2.2 2.4 2.6 3.7 3.6

Note: Table excludes holdings of the International Monetary Fund, the International Bank and other international organizations—also the U.S.S.R.

Table IV

U.S. Government Foreign Aid Related to Federal Fiscal Operations

postwar period

(in billions of dollars)

Expenditures for
Fiscal years Total U.S. Gov’t expenditures Foreign aid All other purposes Percent: foreign aid to total expenditures Budget surplus (+ or) deficit (–)
Total postwar period (est.) $215.8 $29.4 $186.4 13.6% $–18.8
1950 (est.) 43.5 6.0 37.5 13.8 –5.5
1949 37.1 6.3 30.8 17.0 –1.8
1948 36.8 5.4 31.4 14.7 + 8.4
1947 37.9 6.2 31.7 16.4 +0.8
1946 60.5 5.5 55.0 9.1 -20.7
[Page 814]

Table V

Major Appropriations and Authorizations for Foreign Assistance in the Postwar Period

(in millions of dollars)

Legislation Total postwar Fiscal years
1950 1949 1948 1947 1946
Total 26,975 6,566 6,641 3,889 5,069 4,810
ECA 9,998 3,924 4,824 1,250
GARIOA 4,021 913 1,300 1,083 725
U.K. loan 3,750 3,750
Lend-lease 2,475 2,475
UNRRA and post-UNRRA 3,032 332 465 §2,235
MAP 1,314 1,314
China, Korea & Philipp 1,138 370 292 247 129 100
Greece-Turkey 670 45 225 400
Interim aid 577 577

Note: Data in this table do not reflect the increase in the lending authority of the Export-Import Bank (from $700 million to $3,500 million on July 31, 1945), nor payments to the International Bank and the International Monetary Fund. Also excluded are foreign credits of $1,094 million made by the Foreign Liquidation Commissioner, and $800 million made by such agencies as the Reconstruction Finance Corporation, Depts. of Agriculture, State, and Army and the Maritime Commission. About $100 million in grants appropriated by the Congress for use by Agencies such as the Children’s Emergency Fund, The Institute for Inter-American Aid, and the International Red Cross also have been omitted from this table.

  1. The National Advisory Council on International Monetary and Financial Problems (NAC) was an interdepartmental committee established by the Bretton Woods Agreements Act of July 31, 1945 (59 Stat. 512). The Act provided for United States participation in the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD, or “the Bank”). The National Advisory Council was to coordinate policies and operations of the United States Government with respect to this Government’s relations with the two Bretton Woods institutions.
  2. Data in this column reflect U.S. net private remittances, U.S. net long and short-term capital outflow, errors and omissions, and dollar disbursements by the International Monetary Fund and the International Bank. [Footnote in the source text.]
  3. Excluding payments to and transactions of the International Bank and the International Monetary Fund.
  4. Excluding payments to and transactions of the International Bank and the International Monetary Fund.
  5. Classified according to fiscal years for which funds ware intended for expenditure. [Footnote in the source text.]
  6. Includes $800 million appropriated on June 30, 1944, but largely spent in 1946. [Footnote in the source text.]
  7. Includes $500 million in contract authorizations. [Footnote in the source text.]
  8. It is estimated that, of this amount, about $100 million (originally appropriated for China), will not be spent. [Footnote in the source text.]