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United States Department of State / Foreign relations of the United States, 1947. The British Commonwealth; Europe
(1947)

Europe,   pp. 196-654 PDF (168.7 MB)


Page 238


FOREIGN RELATIONS, 19 4 7, VOLUME III
  There is a phase of this matter which is both interesting and serious.
The farmer has always produced the foodstuffs to exchange with the
city dweller for the other necessities of life. This division of labor is
the basis of modern civilization. At the present time it is threatened
with breakdown. The town and city industries are not producing ade-
quate goods to exchange with the food-producing farmer. Raw ma-
terials and fuel are in short supply. Machinery is lacking or worn out.
The farmer or the peasant cannot find the goods for sale which he
desires to purchase. So the sale of his farm produce for money which
he cannot use seems to him an unprofitable transaction. He, therefore,
has withdrawn many fields from crop cultivation and is using them
for grazing. He feeds more grain to stock and finds for himself and his
family an ample supply of food, however short he may be on clothing
and the other ordinary gadgets of civilization. Meanwhile people in
the cities are short of food and fuel. So the governments are forced to
use their foreign money and credits to procure these necessities abroad.
This process exhausts funds which are urgently needed for reconstruc-
tion. Thus a very serious situation is rapidly developing which bodes
no good for the world. The modern system of the division of labor
upon which the exchange of products is based is in danger of breaking
down.
  The truth of the matter is that Europe's requirements for the next
three or four years of foreign food and other essential products-
principally from America-are so much greater than her present
ability to pay that she must have substantial additional help, or face
economic, social and political deterioration of a very grave character.
  The remedy lies in breaking the vicious circle and restoring the con-
fidence of the European people in the economic future of their own
countries and of Europe as a whole. The manufacturer and the farmer
throughout wide areas must be able and willing to exchange their prod-
ucts for currencies the continuing value of which is not open to
question.
  Aside from the demoralizing effect on the world at large and the
possibilities of disturbances arising as a result of the desperation of
the people concerned, the consequences to the economy of the United
States should be apparent to all. It is logical that the United States
should do whatever it is able to do to assist in the return of normal
economic health in the world, without which there can be no political
stability and no assured peace. Our policy is directed not against
any country or doctrine but against hunger, poverty, desperation and
chaos. Its purpose should be the revival of a working economy in the
world so as to permit the emergence of political and social conditions in
which free institutions can exist. Such assistance, I am convinced, must
not be on a piece-meal basis as various crises develop. Any assistance
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