838 _ FOREIGN RELATIONS, 1950, VOLUME [oo

Department of State Committee Files, Lot 122, Box 15559 -

| Attachment to the Memorandum to the President 0 f
| ae February 16, 1950?

CONFIDENTIAL -.- [Wasuineton, February 16, 1950. ]

Tre PropuemM of THE Fururet BALANCE OF PAYMENTS OF THE |
- Untrep States

1. Two economic facts of international significance have emerged
during the post-war period which stand out above all others. One
is the tremendous increase of production in the United States. The
other is the heavy dependence of the rest of the world on this pro-
duction. At the same time, the obligations due the United States
from other countries have increased, their sources of invisible income
have diminished; their resources of gold and foreign exchange have
been reduced, and the pre-war pattern of trade has been greatly
altered. We have been able to maintain the flow of our products to
meet these foreign needs only in part through the normal economic
processes of international trade, public and private investment,
gold purchases and the like. About one-third of total foreign require-
ments has been sustained by huge grants of extraordinary foreign
assistance, in amounts surpassing the total of our annual exports
before the war.

2. Estimates of our international economic transactions in 1949
are as follows:

Billions of

Dollars

Recorded U.S. exports of goods and services | $16. 2
Other foreign demands* For dollars | 1.3

Total requiring payment | , $17. 5
Means of Finanemg:
Recorded U.S. imports of goods and services 9.9
Public and private investments (net) 1.0.
Foreign liquidation of gold and dollar assets 0. 4
Private donations 0.5
Foreign assistance program 5.7

Total means of financing ~ | $17. 5

1The source text was not attached to the memorandum to the President, supra.
It was attached as an independent document to a Departmental Dollar Group
Working Paper of March 8, 1950 (DDG D-2/1).

-*This item reflects the fact that recorded exports are undervalued, that re-
corded imports are overvalued, and that there are certain unrecorded capital
movements. Some part of this figure might be included as a negative item under
“Means of Financing” but it would not affect the other items, except to reduce
the balancing total. [Footnote in the source text. ]