Editorial Note

By the early months of the year 1951 both the forms and substance of United States foreign economic policy were being profoundly altered by the accelerating large-scale United States defense program generated by the Defense Production Act of June 30, 1950 (64 Stat. 798). In the Department of State itself there was a reorganization of the economic functions of the Department, which is described in the documentation following.

The departmental reorganization simply reflected the ever-increasing impact of the domestic defense production program upon the substance of United States international economic policies. United States foreign economic policy at the outset of the postwar period, 1945–1947, was based on classical concepts relating to international trading and included two basic elements: (1) the bringing about of international economic cooperation through the trade agreements program (the General Agreement on Tariffs and Trade (GATT)); and (2) the modernization of the traditional treaties of friendship, commerce, and navigation (FCN treaties), including the negotiation of conventions relating to double taxation. In 1949 there was introduced at the level of general policy in United States foreign economic policy formulation the concept of economic development assistance: the Point Four program of technical economic assistance (well-established in Latin America as “the IIAA program” (Institute of Inter-American Affairs)). This latter development was also reflected in the introduction of new “investment” articles into the FCN treaty drafts, beginning about 1948.

These same years saw the appearance of the emergency-type, and presumably temporary, foreign economic assistance programs that were launched by the “Marshall Plan” and came to be administered by the Economic Cooperation Administration (EGA). With the onset and stepping-up of the “cold war” and United States efforts to meet this emergency, this emergency-type and “temporary” activity was expanded; and then with the outbreak of the Korean war and the [Page 1226]enactment of the Defense Production Act of 1950 the “economic defense” aspect of United States foreign economic policy moved decisively to the center of policy formulation. The list of articles beginning on page 1230 is illustrative of this. Many of the subjects included in the list are documented in varying degrees of detail elsewhere in this volume and in the regional volumes of Foreign Relations for 1951; the indexes should be consulted as the subject matter will appear usually in the context of a political-military subject. For documentation on general policy matters and particularly those relating to the Mutual Security Program, see pages 266 ff.

For documentation on those international economic activities in the field of international trade cooperation (GATT) and economic treaty relationships in which the United States was involved, see pages 1245 ff. For documentation on matters relating to the foreign financial policy of the United States, which straddled both economic assistance/ defense-type activities and those of the classical type, see pages 1573 ff.