FOREIGN ECONOMIC AND COMMERCIAL POLICY


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
$1/ 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 land 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, leav-
ing 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 rem-ainder 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 las 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 tand 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 annulal share
 of the foreign aid program in total United States Government ex-
 penditures 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 ex-


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