Current Economic Developments, lot 70 D 467

Current Economic Developments


Issue No. 366

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Final Appropriation for Mutual Security Program

The Supplemental Appropriations Bill for 1953 as signed by the President appropriates $6,001,947,250 for foreign aid to nations resisting Communist aggression—a cut of 25% from the amount originally requested by the executive branch. This was a reduction of $445,783,000 below the amount included in the authorizing legislation. In relation to the original executive branch request, the final appropriation bill carried over-all funds in the amount of $4,219,834,500 for military assistance. This represented a cut of [Page 515] $1,205,165,500 from the asking figure of $5,425,000,000. Funds for all other purposes were cut by $692,887,250 to a final figure of $1,782,112,750 as compared to the President’s original request of $2,475,000,000.

The US agencies concerned are now attempting to determine how much money individual countries will receive under the final appropriation bill, and are studying the possibility of shifting funds in order to help the most hard-pressed areas. Consideration is also being given to going to Congress for a deficiency appropriation to increase aid to South Asia, with particular reference to India, whose economic assistance cut was the most drastic. According to tentative allocations based on the amounts appropriated, only about $44 million are now available for India, compared to last year’s $50 million.

The Point IV appropriation for South and Southeast Asia including India, Pakistan, Burma and Indonesia suffered a 60% cut to $67,793,000 from the original request of $178,000,000 and an authorized amount of $118,634,250. The over-all Asian military and economic assistance program was cut to $811,378,750 from the $1,019,230,000 originally asked, a reduction of $207,851,250. The amount authorized was $886,220,000.

Europe’s aid program was also severely cut back in the appropriating legislation, with a total cut for military, economic and technical assistance of $287,390,000, bringing the amount available to $4,410,657,750 from the authorized figure of $4,698,047,750. The total amount originally requested by the President for Europe was $5,964,200,000.

The Near East and Africa suffered cuts of $61,200,500, bringing their appropriation for military, economic and technical assistance, and Arab and Israeli refugees from $741,430,500 to $680,230,000. The President had asked for $802,370,000.

Latin American countries were cut a flat $6 million from $78,014,750 to $72,014,750; the original request had been $84,400,000. Multilateral technical assistance was cut to $9,171,333 from the authorization of $15,708,750. The President had asked $17,000,000 for this purpose. Our contribution to the Provisional Intergovernmental Committee on the Movement of Migrants from Europe,1 requested at $10 million, was authorized and appropriated in the amount of $9,240,500. We originally asked $2,800,000 for ocean freight for relief packages; the amount authorized and appropriated amounted to $2,587,500. No money was sought for UNICEF, [Page 516] but Congress appropriated $6,666,667, after having authorized $16,481,000.

In criticizing the appropriation, President Truman called the Congressional action the poorest kind of economy, stressing that the cuts came at a time when many countries are facing severe economic strains. He expressed the opinion that the cut in Indian aid was extremely dangerous, for that country is now engaged in a tremendous effort to build up its own economy and living standards, to show that democratic methods can succeed in curing present conditions in Asia. The President also expressed his conviction that Congress itself will eventually find it necessary to make additional funds available during this fiscal year.

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  1. For documentation concerning the Provisional Intergovernmental Committee, see pp. 1560 ff.