Stopgap

Like the rest of the world, Canada was anxious to see what the U.S.'s European Recovery Program (see NATIONAL AFFAIRS) would look like when Congress got through with it. As laid out by President Truman, it called for the spending of $2,615 million by the U.S. in other Western Hemisphere countries in the 15 months ending June 30, 1949. Canadians hoped, with good reason, that it would mean enough U.S. dollars to solve the Dominion's foreign exchange troubles.

Until the U.S. began to spend, Canada must struggle along with makeshift measures, notably import and foreign exchange restrictions. Last week, another makeshift was adopted. Prime Minister Mackenzie King told Parliament that a 91-day agreement had been reached with Britain on food contracts (TIME, Dec. 15). The stopgap deal wall expire on March 31--the day before ERP is expected to go into effect.

With Britain strapped, even this temporary agreement had been hard to reach. Finally, Canada agreed to leave the wheat contract as it stood, guaranteeing Britain 160 million bushels in the current crop year at $1.55 a bushel. For the rest, Britain would take less of other foodstuffs (e.g., cheese and bacon) at higher prices, generally about 15% above 1947 figures.

In the three months, Britain is expected to get $185 million worth of Canadian products (compared with $150 million in the first quarter of 1947). Britain will sell Canada an estimated $40 million worth of goods, $45 million can be drawn from the shrinking Canadian credit, and the remaining $100 million will be paid in U.S. dollars from Britain's hoard. If ERP meets Canada's hopes, she can afford to rewrite the three-month agreement, giving Britain better terms for a longer period.

This file is automatically generated by a robot program, so reader's discretion is required.