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<div>*** START OF THE PROJECT GUTENBERG EBOOK 47437 ***</div>
<div id="coverpage" class="figcenter" style="width: 600px;">
<img src="images/cover.jpg" width="600" height="931"
alt="cover" title="cover" />
</div>
<hr class="chapter" /> <!-- separates cover from title page -->
<p><span class="pagenum"><a name="Page_i" id="Page_i">[Pg i]</a></span></p>
<h1>East-West<br />Trade Trends</h1>
<p id="subtitlebox">
MUTUAL DEFENSE ASSISTANCE<br />
CONTROL ACT OF 1951</p>
<p id="actbox">
(the Battle Act)</p>
<p id="starbox">
* * *</p>
<p id="reportbox">
FOURTH REPORT TO CONGRESS</p>
<p id="datebox">
Second Half of 1953</p>
<p><span class="pagenum"><a name="Page_ii" id="Page_ii">[Pg ii]</a></span></p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_iii" id="Page_iii">[Pg iii]</a></span></p>
<h2 id="transmittal" class="break">letter of transmittal</h2>
<p>
<i>To the Congress of the United States</i>:<br />
</p>
<p>I have the honor to submit herewith the fourth semiannual report
on operations under the Mutual Defense Assistance Control Act of
1951 (Battle Act), the administration of which is a part of my
responsibilities.</p>
<p>The period covered is July through December 1953.</p>
<p>A large part of this report is an examination of what the Soviet
Union has been doing in its trade relations with the free world. In
order to put the Russian activities of the last half of 1953 in a more
understandable framework we have ranged back over the last 30 years
to show how foreign trade fits into their economy and serves their
purposes. To study Soviet trends and tactics is obviously important
to the economic defense of the free world. To make a report to the
Congress and the public on these matters should also be useful. There
has been much public interest in the subject.</p>
<p>The selection of this theme, however, does not mean that Soviet
trade activities are the only important consideration to be taken into
account in the formulation of U. S. economic defense policy. They
are not. Many other factors enter in, as told in Chapter V.</p>
<p>In preparing the report my staff has drawn heavily upon the expert
knowledge of the Department of State and other agencies. But of
course the responsibility for the report is ours.</p>
<p>In my last Battle Act report I said that the strategic trade control
program had been hampered by lack of public knowledge. This is
still true, but to a less extent, it seems to me. There is a better understanding
of the Government’s policies, a greater realization that the
soundness of East-West trade policy is to be judged not primarily on
the amount of trade, but more on what kind of goods move back and
forth, and on what terms they move.</p>
<div class="figright" style="width: 250px;">
<img src="images/sig250.jpg" width="250" height="78" alt="Signature of Harold Stassen" />
</div>
<div style="clear: both;"></div>
<p class="right">
<span class="smcap">Harold E. Stassen</span>, <br />
<i>Director, Foreign Operations Administration</i>.</p>
<p><span class="smcap">May 17, 1954.</span><br />
</p>
<p><span class="pagenum"><a name="Page_iv" id="Page_iv">[Pg iv]</a></span></p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_v" id="Page_v">[Pg v]</a></span></p>
<table class="toc break" summary="Table of Contents">
<tr><td class="tdc bold" colspan="3">CONTENTS</td></tr>
<tr><td class="tdl" colspan="2">INTRODUCTION:</td><td>Page</td></tr>
<tr><td class="tdl smcap indent1" colspan="2">
Note on “Strategic” and “Nonstrategic”</td>
<td class="tdr">1</td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdl" colspan="3">CHAPTERS:</td></tr>
<tr><td class="tdr">I.</td>
<td class="tdl smcap">Stalin’s Lopsided Economy</td>
<td class="tdr"><a href="#CHAPTER_I">3</a></td></tr>
<tr><td></td><td class="tdl">Emphasis on Heavy Industry</td><td></td></tr>
<tr><td></td><td class="tdl">How Forced Industrialization Affects Trade</td><td></td></tr>
<tr><td></td><td class="tdl">How the Kremlin Controls Trade</td><td></td></tr>
<tr><td></td><td class="tdl">West Has Never Barred Peaceful Exports</td><td></td></tr>
<tr><td></td><td class="tdl">Stalin’s Last Gospel</td><td></td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdr">II.</td>
<td class="tdl smcap">The New Regime and the Consumer</td>
<td class="tdr"><a href="#CHAPTER_II">11</a></td></tr>
<tr><td></td><td class="tdl">Letting Off Pressure</td><td></td></tr>
<tr><td></td><td class="tdl">The “New Economic Courses”</td><td></td></tr>
<tr><td></td><td class="tdl">Malenkov’s Big Announcement</td><td></td></tr>
<tr><td></td><td class="tdl">Khrushchev and the Livestock Lag</td><td></td></tr>
<tr><td></td><td class="tdl">Mikoyan Advertises the Program</td><td></td></tr>
<tr><td></td><td class="tdl">Has Stalin Been Overruled?</td><td></td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdr">III.</td>
<td class="tdl smcap">The Kremlin’s Recent Trading Activities</td>
<td class="tdr"><a href="#CHAPTER_III">19</a></td></tr>
<tr><td></td><td class="tdl">The New Trade Agreements</td><td></td></tr>
<tr><td></td><td class="tdl">More Consumer Goods Ordered</td><td></td></tr>
<tr><td></td><td class="tdl">A Shopping Spree for Ships</td><td></td></tr>
<tr><td></td><td class="tdl">Most of All, They Want Hard Goods</td><td></td></tr>
<tr><td></td><td class="tdl">Something Different in Soviet Exports</td><td></td></tr>
<tr><td></td><td class="tdl">They Have Dug Up Manganese</td><td></td></tr>
<tr><td></td><td class="tdl">The Emergence of Russian Oil</td><td></td></tr>
<tr><td></td><td class="tdl">Gold Sales Expanded</td><td></td></tr>
<tr><td></td><td class="tdl">Reaching Outside Europe</td><td></td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdr">IV.</td>
<td class="tdl smcap">What’s Behind It All</td>
<td class="tdr"><a href="#CHAPTER_IV">35</a></td></tr>
<tr><td></td><td class="tdl">The Kremlin and Peace</td><td></td></tr>
<tr><td></td><td class="tdl">A Mixture of Motives</td><td></td></tr>
<tr><td></td><td class="tdl">Their Objectives Haven’t Changed</td><td></td></tr>
<tr><td></td><td class="tdl">Their Practices Haven’t Changed</td><td></td></tr>
<tr><td></td><td class="tdl">The Challenge</td><td></td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdr">V.</td>
<td class="tdl smcap">U. S. Policy on Strategic Trade Controls</td>
<td class="tdr"><a href="#CHAPTER_V">43</a></td></tr>
<tr><td></td><td class="tdl">The Background</td><td></td></tr>
<tr><td></td><td class="tdl">Basic Policy Reaffirmed</td><td></td></tr>
<tr><td></td><td class="tdl">The New Direction of Policy</td><td></td></tr>
<tr><td></td><td class="tdl">Reviewing the Control Lists</td><td></td></tr>
<tr><td></td><td class="tdl">East-West Trade: Road to Peace</td><td></td></tr>
<tr><td></td><td class="tdl">Trade Within the Free World</td><td></td></tr>
<tr><td></td><td class="tdl">The China Trade Falls Off</td><td></td></tr>
<tr><td></td><td class="tdl">They Play by Their Own Rules</td><td></td></tr>
<tr><td></td><td class="tdl">United States Policy on the China Trade</td><td></td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdr">VI.</td>
<td class="tdl smcap">The Battle Act and Economic Defense</td>
<td class="tdr"><a href="#CHAPTER_VI">55</a></td></tr>
<tr><td></td><td class="tdl">Battle Act Functions</td><td></td></tr>
<tr><td></td><td class="tdl">The Money and the Manpower</td><td></td></tr>
<tr><td></td><td class="tdl">Meshing the Gears</td><td></td></tr>
<tr><td></td><td class="tdl">Improving the Machinery</td><td></td></tr>
<tr><td></td><td class="tdl">The Termination-of-Aid Provision</td><td></td></tr>
<tr><td></td><td class="tdl">Miscellaneous Activities</td><td></td></tr>
<tr><td></td><td class="tdl">Summary of the Report</td><td></td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdc bold" colspan="3">APPENDICES</td></tr>
<tr><td class="tdr">A.</td>
<td class="tdl smcap">Trade Controls of Free World Countries</td>
<td class="tdr"><a href="#APPENDIX_A">65</a></td></tr>
<tr><td class="tdr">B.</td>
<td class="tdl smcap">Statistical Tables</td>
<td class="tdr"><a href="#APPENDIX_B">89</a></td></tr>
<tr><td class="tdr">C.</td>
<td class="tdl smcap">Text of Battle Act</td>
<td class="tdr"><a href="#APPENDIX_C">99</a></td></tr>
<tr><td> </td><td></td><td></td></tr>
<tr><td class="tdc bold" colspan="3">CHARTS</td></tr>
<tr><td class="tdr">1.</td>
<td class="tdl smcap">Volume of Trade of OEEC Countries With
European Soviet Bloc</td>
<td class="tdr"><a href="#CHART_1">6</a></td></tr>
<tr><td class="tdr">2.</td>
<td class="tdl smcap">Free World Trade With the Soviet Bloc</td>
<td class="tdr"><a href="#CHART_2">21</a></td></tr>
<tr><td class="tdr">3.</td>
<td class="tdl smcap">EDAC Structure</td>
<td class="tdr"><a href="#CHART_3">57</a></td></tr>
</table>
<hr class="chapter"/>
<p><span class="pagenum"><a name="Page_1" id="Page_1">[Pg 1]</a></span></p>
<h2 class="break"><a name="INTRODUCTION" id="INTRODUCTION">INTRODUCTION</a></h2>
<p class="chaptertitle">
Note on “Strategic” and “Nonstrategic”</p>
<p>To help protect the security of the free world, the United States
and certain other countries have been working together for more than
four years to withhold strategic goods from the Soviet bloc.</p>
<p>But how can you tell strategic goods from nonstrategic goods? A
good many people have asked that question. It is a reasonable question
and it deserves a nontechnical answer.</p>
<p>The answer is that strategic goods, as understood in the day-to-day
operations of the program, are those goods which would make a
significant contribution to the warmaking power of the Soviet bloc.</p>
<p>This is a practical guide to action. There is no rigid definition
that holds good for all times, places, and circumstances. All strategic
goods don’t have the same degree of strategicness. The free countries
have embargoed some, merely limited others in quantity, and
kept still other items under surveillance so that controls could be
imposed if necessary. Even the same item may vary in strategic
importance, depending on the destination, the changing supply situation
behind the Iron Curtain, and other circumstances which may
change from time to time. Whether an item includes advanced technology
is an important consideration. In specific cases, two experts
of equal competence may disagree on these things. Two agencies of
government, differing in function, may bring different points of view
to a given problem. The same is true of governments.</p>
<p>Since there is no distinctly visible boundary between “strategic”
and “nonstrategic,” some people insist there is no such thing as a nonstrategic
item at all. It is true that even bicycles, typewriters, or
ordinary hardware may help the other fellow by strengthening his
general economy. And these people argue that anything that contributes
to the general economy helps in a military way, too.</p>
<p>That is a correct concept in actual warfare but it is not an acceptable
concept of “strategic” in the present situation, for trade on certain
terms can help the free nations too. They carry on two-way trade
with the Soviet bloc for concrete commercial benefits. The problem
is to gain those benefits without permitting the Kremlin to accelerate
the growth of military power or to divide the free world.</p>
<p>In rating items as strategic or nonstrategic, it is clear that there
are innumerable commodities, used entirely or mainly for civilian<span class="pagenum"><a name="Page_2" id="Page_2">[Pg 2]</a></span>
purposes, which would not make a clearly significant contribution to
war potential. No one would have trouble drawing a line between a
jet plane and a suit of clothing, to take an extreme example. Few
would have difficulty putting cobalt on one side of the line and
butter on the other. As for the border area where it is less clear
what contribution an item would make, the allied governments put
their heads together, pool their facts, and try to arrive at mutually
acceptable judgments.</p>
<p>As President Eisenhower has said, “Unity among free nations is
our only hope for survival in the face of the worldwide Soviet
conspiracy backed by the weight of Soviet military power.”</p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_3" id="Page_3">[Pg 3]</a></span></p>
<h2 class="break"><a name="CHAPTER_I" id="CHAPTER_I">CHAPTER I</a></h2>
<p class="chaptertitle">
Stalin’s Lopsided Economy</p>
<blockquote class="chapterquote">
<p><i>The weakest link of the socialist chain is merchandising
and distribution; if this can be strengthened, present
difficulties will be overcome. Upon it the Kremlin has
wisely concentrated attention. The Kremlin’s immediate
objective, as recently announced by the resolutions voted
at the plenary session of Bolshevik leaders, is to increase
the supply of foodstuffs and consumers’ goods and stimulate
their mutual exchange.</i></p></blockquote>
<p>That quotation is from a Moscow dispatch to the <cite>New York Times</cite>.
The dispatch was written by Walter Duranty and printed on November
6, 1932.</p>
<p>As long ago as that, and even before, the Russian people were
wondering when something was going to be done about the supply
of food and other things they needed, and the dictatorship was making
motions—but not very helpful—in that direction. Goals were set
and decrees were issued. But the results were disappointing, and
the standards of living of the Russian people stayed low.</p>
<p>Stalin’s First Five-Year Plan called for a 50 percent rise in gross
farm production during 1928-32 inclusive. But by 1932, farm production
had declined by 20 percent. The difficulties have continued ever
since. For example, the Third Five-Year Plan, beginning with 1938,
was scheduled to bring a large increase in consumer goods—larger
than the increase being promised nowadays—but instead the supply of
consumer goods actually decreased, even in the three prewar years of
the period. Per capita consumption in the Soviet Union is lower now
than it was in the 1920’s, before the 5-year plans commenced.</p>
<h3>Emphasis on Heavy Industry</h3>
<p>The basic cause of these continual disappointments now is widely
understood: The Communist elite, while preaching continually about
the “uneven development of capitalism” and the “ever-increasing decomposition
of the world economic system of capitalism,” created a
remarkably lopsided economy of their own, in comparison with which
the free economies of the West look very well-balanced indeed.</p>
<p><span class="pagenum"><a name="Page_4" id="Page_4">[Pg 4]</a></span></p>
<p>Beginning in the 1920’s the Bolsheviks deliberately concentrated
on building a base of heavy industry. In their 5-year plans, pig iron,
steel, coal, oil, electric power, factories, heavy machinery, armaments
have always been given the right of way over the needs of the people
for meat, fish, vegetables, vegetable oils, milk, butter, chairs, tables,
beds, bicycles, watches and clocks, radio sets, decent homes, boots and
shoes, fabrics of cotton, wool, and silk—and so on through the myriads
of consumer items that are commonplace in most Western countries.</p>
<p>Impressive advances have been made in heavy industry. But
this was done at a staggering cost to the inhabitants. It was accomplished
through a vast use of forced labor and police discipline, and
through the neglect of the manufacturing of consumer articles, the
growing of foodstuffs and textile fibers, and the building of homes and
retail stores.</p>
<p>The Kremlin made strenuous efforts to maintain the flow of farm
products to the cities, even while drawing labor away from the farms.
But heavy metalworking industry was always considered more important
than food and clothing. And more important, too, was the
long, bitter and as yet unsuccessful attempt to cram collectivism down
the throat of the Russian farmer. Stalin considered this struggle
ideologically essential. Moreover, it was the means of forcing the
peasants to supply food and raw materials to the growing industrial
complex without receiving consumer goods in return. All in all, the
failure of Soviet farm policy was one of the most resounding failures
in the brief history of the U.S.S.R.—and it still is. Bread and
potatoes are the principal diet of the masses, and even the grain and
potato crops are unsatisfactory.</p>
<p>During the years of Hitler’s devastating invasion, the Kremlin had
to dedicate the energies of Soviet Russia to a fight for survival. But
when the Grand Alliance crushed Hitler, and the western nations,
hoping for a peaceful world under the United Nations, practically
dismantled their military establishments and fell back into their normal
roles as consumption economies, the Kremlin did not alter the
lopsided war economy of the Soviet setup. The Stalin regime inaugurated
a new phase of hostility toward the West. The grim drive
to build up an industrial-military foundation continued. Consumer
goods were still given a low priority in the scheme of things. And
all this was discouraging not only to prospects of world peace but
also to the prospects of happiness and dignity for the weary and
heroic Soviet peoples.</p>
<h3>How Forced Industrialization Affects Trade</h3>
<p>Moscow laid the same pattern upon the European satellite countries
and cut them to fit the pattern. Heavy industrialization was<span class="pagenum"><a name="Page_5" id="Page_5">[Pg 5]</a></span>
imposed on them regardless of their desires and the needs of the people.
This forced industrialization absorbed large amounts of commodities
that were formerly available for export to the free world.
At the same time the collectivization of agriculture was imposed on
the satellites, and this aggravated the difficulties of keeping pace in
farm output.</p>
<p>While these policies were reducing the total amounts of goods the
satellites had available for export to the West, the U.S.S.R. was
siphoning off great trainloads of what remained. The ability of these
countries to trade with the West was further reduced as they were
pushed into granting priorities to one another on the exchange of
items they could have more profitably sold to the free world.</p>
<p>Moscow also forced upon the satellites the characteristic Soviet
trading goal of reducing and eventually eliminating all dependence
on the free world. Lenin himself had emphasized that the first goal
of the Soviet Union in its economic relations with the outside world
was to gain “economic independence from the capitalist countries.”
A prominent Soviet economist, Mishustin, in a book published in 1941,
spelled out this principle in greater detail:</p>
<blockquote>
<p>The main goal of the Soviet import (policy) is to utilize foreign
products, and above all, foreign machinery ... for the technical and
economic independence of the U.S.S.R.... The import (policy) of the
U.S.S.R. is so organized that it aids the speediest liberation from
the need to import.</p></blockquote>
<p>In 1946 the leading Soviet economist, Vosnosensky, restated the objective
in the Government periodical, <cite>Planned Economy</cite>:</p>
<blockquote>
<p>The U.S.S.R. will continue in the future to maintain economic ties
with foreign countries in accordance with the tested line of the
Soviet government directed towards the attainment of the
technical-economic independence of the Soviet Union.</p></blockquote>
<p>The Kremlin’s new Eastern European empire included vast natural
resources and sizeable labor reserves. Nevertheless it was—and still
is—a long way from being self-sufficient, in the sense of being able
to match the production levels of the free world, or even in the sense
of fulfilling its own ambitious production plans, without trade with
the West. Imposing an ultimate goal of self-sufficiency thus could
not eliminate the Soviet bloc’s dependence on the free world. Communist
trade planners still found it advantageous to import from
the free world many things the bloc countries needed. The new
goal did, however, affect the composition of the satellites’ trade. The
planners placed much greater emphasis on the importation of industrial
raw materials and equipment that would, in the long run, reduce
the need to import.</p>
<p>In the U.S.S.R. itself, the Government had always been disinclined
to offer exports in order to import consumer goods, like meat, butter,
textiles, and appliances. Now the same policy was clamped on the<span class="pagenum"><a name="Page_6" id="Page_6">[Pg 6]</a></span>
satellites. So the bulk of Soviet-bloc imports from the West consisted
of goods that did not enter the homes of the people.</p>
<p><a name="CHART_1" id="CHART_1"></a></p>
<div class="figcenter" style="width: 500px;">
<img src="images/chart1.jpg" width="500" height="358"
alt="Volume of Trade of OEEC Countries with European Soviet Bloc" />
</div>
<p>The result of all this was a big decline in trade between Western
and Eastern Europe, as compared with prewar years. Before the
war, countries which now make up the Soviet bloc in Europe carried
on less than 10 percent of their foreign trade with one another; now
this has risen to more than 75 percent.</p>
<h3>How the Kremlin Controls Trade</h3>
<p>All foreign trade of the countries of the enlarged Soviet empire
was placed under absolute state control. For both the U.S.S.R.
and the satellites, international trade is now not only a 100-percent
monopoly of the state, but also an in*tegral part of the planned economy,
officially proclaimed as such. Each country, as a part of its
general economic plan, estimates its import requirements and then
develops a program of exports to pay for the imports. These country
plans are coordinated by Moscow. Part of the machinery of all
this economic planning and trade coordination is an organization,
with headquarters in Moscow, called the Council of Mutual Economic
Assistance.</p>
<p><span class="pagenum"><a name="Page_7" id="Page_7">[Pg 7]</a></span></p>
<p>This totalitarian trading system insures that foreign trade serves
the purposes of the state.</p>
<p>Top priority in trade planning is given to the requirements of the
U.S.S.R. Bloc countries are required to give one another preferential
treatment in trade. With this system the export of any items
to the West is easily restricted as it suits government purposes—whether
or not the items could be considered as “strategic.”</p>
<p>A vast amount of commercial information is obtained by bloc governments
through their dealings with free-world traders and through
their intelligence services. This provides Moscow with a comprehensive
picture of the bargaining strengths and weaknesses of free-world
traders.</p>
<p>Moreover the Soviet-bloc governments, as large buyers and sellers
controlling the production and trade of a whole country, indeed a
group of countries, enjoy certain bargaining advantages in dealing
with the many smaller competing buyers and sellers in the marketplaces
of the free world. Since losses on individual transactions can
be absorbed in longer-term government gains on other deals, the unit
profit need not be the factor that determines the advantage of a deal, as
it generally does for the free-world trader. Soviet-bloc governments
can—and not infrequently do—set their prices at levels which discriminate
among the various buyers and sellers with whom they deal.
They exercise monopoly control not only in selling their own goods
abroad but also in disposing of imported goods at home. The Soviet-bloc
governments get bargaining advantages from such practices,
made possible by their totalitarian trading system—practices which
the West would not wish to imitate but which it might as well squarely
face.</p>
<p>Foreign trade is a political as well as an economic weapon in the
hands of the Soviet Communist state. By way of illustration, in 1948
it was possible for the Kremlin first to reduce and then to cut off all
trade between Eastern Europe and Yugoslavia as a part of the attempt
to bring Marshal Tito to his knees. The attempt failed, but the
Yugoslavs suffered serious economic difficulties before they could
readjust. Even earlier, the world had seen how the Kremlin refused
to allow the Eastern European countries to benefit from the flow
of Western goods that could have been theirs under the Marshall
plan—another evidence of how the state’s objectives took precedence
over the people’s needs.</p>
<p>The Kremlin in its propaganda made much of Western trade restrictions.
But the West’s limited controls over the shipment of<span class="pagenum"><a name="Page_8" id="Page_8">[Pg 8]</a></span>
strategic goods did not come into existence until long after the
Kremlin had begun using trade as a cold-war weapon. Even then
these Western controls, far from being aggressive actions against
peaceful trade or against the welfare of populations, were common-sense
measures of economic <em>defense</em>, designed only to foster Western
security by withholding from aggression-minded governments the
important war-building materials that would make aggression easier.</p>
<p>On the other hand, the Kremlin’s long-term objectives in its economic
relations with the free world are far more than defensive.
They have a dual character: strengthening the bloc and weakening
the free-world powers. These objectives can be summarized as
follows:</p>
<ol>
<li>To feed the economy, especially the industrial-military base,
with imports that help the bloc become more powerful and less
dependent on the free world.</li>
<li>To drive wedges among free-world nations at every opportunity.</li>
<li>To increase the reliance of free-world nations on the bloc
for markets or supplies, and thus make the free world more vulnerable
to bloc pressures.</li>
</ol>
<h3>West Has Never Barred Peaceful Exports</h3>
<p>The Kremlin, while coldly managing the East-West trade of its
domain in the manner described, always had its propagandists and
fellow travelers out beating the drums and making a continual outcry
against the security trade controls of the West. The main line of
the propaganda was that trade was equivalent to peace and prosperity,
and that the Soviet bloc always stood ready for unlimited trade, but
that the Western “economic blockade” barred the way. In each
country the businessmen were constantly handed the false but inflammatory
story that they were being shamefully discriminated
against by their government and that the businessmen of neighboring
countries were less subject to restrictions. Western Europe as a whole
was treated to an alluring picture of a vast prospect of East-West
trade, beyond all factual probability in view of Soviet policies.</p>
<p>This propaganda cannot be separated from the Soviet trading objectives.
It is merely one of the instruments used in trying to achieve
those objectives. It was used lavishly at a Moscow Economic Conference
in April 1952, but although some Western businessmen who
attended that meeting were impressed, the chief result was not an
expansion of trade or elimination of Soviet discriminatory practices,
but only the formation of new propaganda councils. And one of the
significant facts of the present situation is that, although some new
economic factors have arisen, the main propaganda line stays the same.<span class="pagenum"><a name="Page_9" id="Page_9">[Pg 9]</a></span>
At the Berlin four-power conference in late January 1954, Molotov
used it again.</p>
<p>The truth is that Western controls, which did not become effective
until the 1950’s, have never been an “economic blockade.” The controls
apply to a small percentage of the types of goods which made
up East-West trade in the prewar years or in 1948. They leave
room for the expansion of trade in many items. There are even
many kinds of industrial raw materials and products which have
never been embargoed by the Western Governments. Western security
controls were not primarily responsible for the low levels of
East-West trade.</p>
<p>The main causes were Soviet policies, which wrenched the customary
trade of the satellites away from Western Europe, tying it to the
U.S.S.R., and which forced industrialization upon the whole European
bloc in a manner which reduced its ability to trade with the
West. In addition to these basic causes, the bloc countries were unsatisfactory
trading partners in many ways. The prices were often
higher than the world market; the deliveries were uncertain and
sometimes deliberately withheld; the quality of their goods was often
inferior; and some of the countries had a regrettable—and perhaps
intentional—tendency to go into debt to the West.</p>
<h3>Stalin’s Last Gospel</h3>
<p>Stalin himself, in the year before he died, made some illuminating
statements about the reorientation of the trade of Eastern Europe.
He wrote an article, The Economic Problems of Socialism in the
U.S.S.R., which was published in October 1952, though it had been
written earlier in the year. In this article Stalin said that the most
important economic consequence of World War II was “the disintegration
of the single, all-embracing world market.” Actually there
was scarcely a single world market before the war, but Stalin obviously
was talking about the change in the trade of those countries
that fell into the Soviet orbit during the war or shortly thereafter.
He said that “now we have parallel world markets,” confronting one
another. He then made the customary charge that the Western countries,
through an “economic blockade,” had tried to “strangle” the
Eastern European countries. He said the West had thereby unintentionally
contributed to the formation of the new parallel world
market. On this occasion, however, Stalin went on to say that “the
fundamental thing, of course,” is not the Western economic blockade,
but the fact that since the war the Eastern European countries “have
joined together economically and established economic cooperation
and mutual assistance.”</p>
<p><span class="pagenum"><a name="Page_10" id="Page_10">[Pg 10]</a></span></p>
<p>He made it perfectly plain that, in Kremlin thinking, the breakdown
of the “one world market” and the establishment of two rival
markets was a tremendous boon to the Communist cause, because it
shrank the markets available to the “capitalist countries” and intensified
a struggle which the Communists always see as going on among
those countries. And this, Stalin said, rendered more acute what he
called the “general crisis of capitalism.”</p>
<p>To picture the free world as in or near a general economic crisis
is of course familiar Communist mythology. But Stalin’s discussion
did reveal clearly the Communist indifference to the mutually fruitful
and expanding international trade that the West desires. It was an
admission of Communist responsibility for—or at least satisfaction
with—a divided trade world.</p>
<p>So much for Stalin’s last economic gospel. Stalin’s death was announced
on March 5, 1953. Now let us examine what has been going
on in his absence.</p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_11" id="Page_11">[Pg 11]</a></span></p>
<h2 class="break"><a name="CHAPTER_II" id="CHAPTER_II">CHAPTER II</a></h2>
<p class="chaptertitle">
The New Regime and the Consumer</p>
<p>After Stalin, the Soviet leadership was taken up by a group of
top party officials. Georgi M. Malenkov was the Premier and the
most influential, but apparently several other men held important
shares of the responsibility and the power. This elite group included,
with varying degrees of personal influence, Beria (temporarily),
Molotov, Khrushchev, Voroshilov, Bulganin, Kaganovich, and Mikoyan.
None of this new group was new to Soviet leadership. All had
been close lieutenants of Stalin. All are known to have had important
roles in previous policy formulation, and in directing key
operations.</p>
<p>The system that this group took over in the U. S. S. R. was their
own as well as Stalin’s creation. Under this system, the economy is
organized along authoritarian lines and characterized by state ownership
of the means of production and state planning of practically
all economic activity. It is the Central Committee of the Communist
party which lays down the economic and social policies which the
state production plans are desired to implement. The new regime
modified this system in no essential respect.</p>
<p>In addition to inheriting the <em>system</em>, Malenkov and his associates
inherited economic policies and economic conditions which they themselves
had helped to create.</p>
<p>In the U.S.S.R., as we have seen, Soviet economic policy had long
been to force industrialization by every means. And this objective
required such a concentration of capital investment—both civilian and
military—as to deprive the growing population of advances in living
standards commensurate with the overall expansion of the Soviet
economy. That is another way of saying they took it out of the
people’s hides.</p>
<p>Each of the European satellites, too, had undertaken, under Soviet
direction, to develop an economic structure similar to that of the
Soviet Union. By 1953 all foreign trade, nearly all industry, and a
very substantial portion of domestic trade had been nationalized in
those countries. Where collectivization of agriculture was not completed,
the Government controlled agriculture by means of centralized
planning and a system of compulsory deliveries. Each satellite government<span class="pagenum"><a name="Page_12" id="Page_12">[Pg 12]</a></span>
had drawn up a long-term comprehensive economic plan
which, like that of the U.S.S.R., emphasized rapid industrialization.</p>
<p>These developments brought the Communist leaders many serious
problems—and the people many deprivations. Before the war, as
independent states, most of these satellite countries had devoted a
much higher percentage of resources to the consumer sectors of their
economies than was customary for the U.S.S.R. When the Communists
took control, belts were tightened. The standards of living
of the satellite peoples began to decline toward the low levels long
prevalent in the U.S.S.R. But denying the satellite peoples the
fruits of their labors, in imitation of Moscow patterns, still did not
bring the overambitious war-economy plans to success. Agriculture
and industry both had difficulty in keeping pace. The world has
heard how the transformation of satellite agriculture into the Soviet
pattern was impeded by the opposition of the rural populations to collectivization
and by the difficulties of mechanizing farm output; how
shortages of raw materials slowed the textile program in Czechoslovakia
and the electric power industry in Hungary; how the mining
and metallurgical industries lagged in some areas; how the rights of
labor were obliterated in the attempt to shift manpower into heavy
industry; how purges furnished scapegoats for Communist failures.</p>
<h3>Letting Off Pressure</h3>
<p>In the summer of 1953 came the electrifying news of rioting in
East Germany.</p>
<p>Also in the summer of 1953, new economic targets were announced
in the U.S.S.R. and some of the satellites. These new targets—which
will be discussed further in a moment—were said to be a means
of improving the lot of consumers.</p>
<p>Some observers in the West assumed that economic difficulties in
the bloc were erupting with such force that they threatened to topple
the Malenkov regime. This interpretation is understandable—any
democratic nation would have long since replaced a regime that in
peacetime so subjugated the needs of the people—but such an interpretation
of the Soviet scene must be viewed with great skepticism.
At this writing there was some evidence that the problems faced by
the Kremlin may in some respects have become more difficult since
Stalin’s death, but one could not infer that the chronic economic difficulties
of the Soviet bloc were especially different in nature from previous
post-war years, nor that the Communist governments with their
inhuman police control were about to collapse.</p>
<p>What the Communist rulers were facing was their perennial problem
of developing lopsided economies without letting the lopsidedness
become so repressive on the people as to upset the plans and<span class="pagenum"><a name="Page_13" id="Page_13">[Pg 13]</a></span>
timetables. Even in police states there are physical and psychological
limits beyond which human beings cannot be driven without lowering
their incentives, their energy, their morale to the degree that production
is severely hampered. The Soviet leaders have always recognized
this. At three different periods in the thirty-odd years of
their control of the U.S.S.R. they have shown themselves adept at
opening the valves enough to relieve accumulating pressures and then
shutting them again—always without swerving very far in the basic
drive to build the industrial-military machine.</p>
<p>Many observers believe that even prior to Stalin’s death the time
was ripe for a slight relaxation in the postwar consumption squeeze.
The Kremlin faced multiple problems in consolidating its new empire.
External foreign developments had been adding to the difficulties
of achieving the overambitious industrial and military goals. Western
export controls on the shipment of strategic goods into the bloc
had been impeding the planned development of the military sectors
of the economies.</p>
<p>In any event, a close examination of the new actions proposed by
the Malenkov regime to improve the consumer’s lot, insofar as they
have been revealed, indicate that plans for heavy industry and for
military preparation will not be materially affected.</p>
<h3>The “New Economic Courses”</h3>
<p>During the summer and fall of 1953, Communist governments all
over Eastern Europe announced in turn so-called “new economic
courses.” East Germany announced its “new economic course” on
June 11, just before the East Berlin riots of June 17. Then came
Hungary (July 4), the U.S.S.R. (August 8), Rumania (August
22), Bulgaria (September 8) and Czechoslovakia (September 15).
Smaller adjustments were announced earlier for Albania, and later
for Poland.</p>
<p>The announced programs differed according to local problems, but
almost everywhere the solution of agricultural troubles was a key
objective. Better collection and distribution facilities for farm products
were demanded. This theme was almost invariably played to
the popular tune of helping the consumer—especially in the U.S.S.R.
Deplorable housing conditions came in for a share of the attention.</p>
<p>In the satellites the programs reflected openly the inability to meet
many of the exacting goals that had been set. In some countries, the
emphasis was on bigger industrial investments in scarce basic materials.
In others, concessions to the peasants were paramount. The
initial implementation, as well as some of the program announcements,
was confusing and sometimes contradictory.</p>
<p><span class="pagenum"><a name="Page_14" id="Page_14">[Pg 14]</a></span></p>
<h3>Malenkov’s Big Announcement</h3>
<p>The new economic course for the U.S.S.R. itself was unfolded
in three major speeches during the second half of 1953—by Malenkov
in August, Khrushchev in September, and Mikoyan in October—and
in a series of decrees and lesser pronouncements.</p>
<p>Premier Malenkov, addressing the Supreme Soviet on August 8,
made repeated claims of Soviet strength and progress. For example,
he said the United States had no monopoly on the hydrogen bomb
and added that such facts “are shattering the wagging of tongues
about the weakness of the Soviet Union.” But in the section on consumer
goods he gave a revealing picture of weakness.</p>
<p>He spoke at great length about lags and failures in agriculture and
in the manufacture of consumer articles. He severely criticized the
poor quality and appearance of goods, the “serious shortcomings” in
the organization of domestic trade, the “unsatisfactory leadership of
enterprises,” the “high production costs” and high prices of coal and
timber, the “neglected state” of agriculture in many districts, the
“serious lagging” in livestock, potatoes, and vegetables. He said the
Government considered it “essential to increase considerably” the
investment in consumer industries.</p>
<blockquote>
<p>The urgent task [Malenkov said] lies in raising sharply in 2 or 3
years the population’s supply of foodstuffs and manufactured goods,
meat and meat produce, fish and fish produce, butter, sugar,
confectionery, textiles, garments, footwear, crockery, furniture and
other cultural and household goods; in raising considerably the supply
to the population of all kinds of consumer goods.</p></blockquote>
<p>The program was to be accomplished in “2 or 3 years,” and this
was later repeated in other official statements. In other words it
was to be a relatively short-term program of expansion, hardly long
enough to make a major shift in industrial emphasis—nor did Malenkov
claim such a shift. He said, “We shall continue to develop, by
all possible means, heavy industry and transport.... We must always
remember that heavy industry constitutes the basic foundation
of our socialist economy, because without its development, it is impossible
to insure further growth of light industry, increase productivity
of agriculture, and the strengthening of the defensive power of
our country.” Taking up this theme, the Communist propagandists
in the U.S.S.R. and the satellites have constantly assured the people
that they should not interpret the “present tasks of the economic
policy as a retreat from the Marxist-Leninist principles of building
up socialism.” The continued growth of basic industries was declared
to be essential.</p>
<p>The assertion was made, not that the consumer program would displace
basic industrialization, but that both could progress simultaneously.<span class="pagenum"><a name="Page_15" id="Page_15">[Pg 15]</a></span>
Malenkov said that heavy industry had risen from 34 percent
of the total industrial output in 1924-25 to 70 percent in 1953. And
while that was going on, he said, the U.S.S.R. was unable to develop
light industry (textiles, garments, shoes) and the food industry at the
same rate as heavy industry. But now, he said, the Nation was at last
able to develop those industries rapidly.</p>
<p>This “now-we-are-strong-enough” theme runs all through the Communist
propaganda on the subject. But it doesn’t harmonize with
existing facts and figures.</p>
<p>In the first place, though the Soviet Union has made large industrial
gains, it has not built its industrial base anywhere near the long-term
goals that Stalin set in 1946 for the ensuing 15 years or so—goals
which, even if attained, would not bring the U.S.S.R. in most respects
to the production levels which the United States has already reached.</p>
<p>In the second place, the “now-we-are-strong” theme seems to leave
out of account the truly deplorable condition of Soviet agriculture.
Malenkov himself said a drastic increase in consumer goods could not
be achieved without “further development and upsurge” of agriculture,
because agriculture “supplies the population with food and light
industry with raw materials.”</p>
<h3>Khrushchev and the Livestock Lag</h3>
<p>On the condition of agriculture, Nikita S. Khrushchev had a great
deal to say at a session of the Communist Party’s Central Committee
on September 7. Khrushchev is the First Secretary of the Party. His
speech was an even more dismal confession of the “serious lag” than
Malenkov’s. He revealed that the Soviet Union had 10 million fewer
cattle at the beginning of 1953 than in 1928, and that the number fell
by 2,200,000 during 1952 alone, instead of increasing by that same
number as planned. In biting words he described the sharp decline in
pork production and in wool, the unsatisfactory fodder situation, the
deficiencies in potatoes and vegetables. His speech showed beyond
doubt that even the production of grain, traditionally the Soviet
Union’s No. 1 food staple and No. 1 export commodity, was in bad
shape and that a far greater acreage needed to be devoted to feed
grains in order to bolster the faltering livestock industry.</p>
<p>Khrushchev listed a number of measures to raise production. They
included higher farm prices for livestock, milk, butter, and vegetables;
the reduction of obligatory deliveries from the small private plots
still held by collective farm members; the assignment of more tractors
and more skilled workers to the collective farms; and <i>the tightening
of Communist Party control over agriculture</i>. The decisions to place
greater reliance on material incentives and to give slightly more recognition<span class="pagenum"><a name="Page_16" id="Page_16">[Pg 16]</a></span>
to what remains of private enterprise were intriguing, but the
collective farm system itself remained basically unchanged.</p>
<p>Students of the Soviet economy, surveying previous efforts to stimulate
agriculture and especially mindful of the biological limitations
on the reproduction of livestock, were doubtful that the new measures
could bring anything like the planned increase in 1954 or 1955.</p>
<h3>Mikoyan Advertises the Program</h3>
<p>Anastas I. Mikoyan, the Soviet Minister of Domestic Trade, then
made a speech October 17 before the All-Union Conference of Trade
Workers.</p>
<p>Mikoyan, as the man in charge of large segments of the consumer
goods program, enthusiastically described the program as “gigantic”.
In the manner of Malenkov and Khrushchev, he also enthusiastically
flayed an astonishing number of deficiencies in the production, packaging,
distribution, and marketing of consumer goods. He even condemned
dull advertising slogans and inconsiderate retail clerks, and
said there were some things about capitalist business methods that
were worthy of emulating.</p>
<p>He stated, too, that not only the Ministry of Consumer Goods Industry
but other ministries—including aircraft and defense—were getting
assignments to produce such things as refrigerators, washing
machines, metal beds, bicycles, and radio and television sets. Actually,
small quantities of durable consumer goods have always been
produced by heavy industry ministries. Mikoyan’s statement was, no
doubt, intended to sound as if these ministries were being transformed,
but there is no evidence that the U.S.S.R. actually planned to reduce
its production of aircraft and armaments to make way for household
appliances. If such evidence shows up, the free world will welcome it.</p>
<p>Mikoyan gave a few figures on the production of household appliances.
They revealed plans for large percentage increases, but
even if achieved, these increases would still leave the consumer many
years behind. For example, he said the output of refrigerators would
rise from 62,000 in 1953 to 330,000 in 1955 (for a population of more
than 200 million). This, even if achieved, would still be tiny by
Western standards.</p>
<p>In August, Premier Malenkov had spoken cordially of the expansion
of trade of the U.S.S.R. with Western countries but he had
avoided connecting this with consumer goods. Now, however, the following
brief passage appeared in the middle of Mikoyan’s long and
rambling speech:</p>
<blockquote>
<p>A few words must be said about the import of consumer goods. During
recent years we have been making use of this additional source of supply
for the population. Having become better off we can now allow ourselves<span class="pagenum"><a name="Page_17" id="Page_17">[Pg 17]</a></span>
to import such foodstuffs as rice, citrus fruits, bananas, pineapples,
herrings, and such manufactured goods as high standard woolens and silk
fabrics, furniture, and certain other goods supplementing our range.
These goods are in demand by the population.</p>
<p>Although we are buying 4 billion rubles’ worth of consumer goods from
abroad this year, two-thirds of this sum will be spent on goods from the
People’s Democracies. In turn, we are exporting certain consumer goods
of which we have a sufficiency, and are helping the People’s Democracies
with certain commodities.</p></blockquote>
<p>Mikoyan, revising his figures in December, estimated the Soviet
Union’s imports of consumer goods from non-Communist countries in
1953 at 1 billion rubles. Rubles are not used in foreign trade and
translation into dollar values may be misleading, but at the official
(although artificial) rate, 1 billion rubles would be 250 million dollars.
This is a slender figure in relation to the annual consumption needs of
more than 200 million persons. Even so, the amount that was actually
imported during the year did not equal the $250 million estimate.</p>
<p>There is, however, some connection between the new regime’s
promises of more consumer goods and the recent activities of the Soviet
Union in the field of East-West trade. We shall be examining those
activities in the next chapter.</p>
<h3>Has Stalin Been Overruled?</h3>
<p>In early 1954 the situation could be summarized something like this:</p>
<p>The Soviet-bloc rulers have put on a more affable diplomatic face
and made a number of conciliatory gestures to the Western world
without altering their fundamental hostile objectives, and they have
made a great fanfare about supplying more consumer goods to their
people without basically changing their war-oriented economy.</p>
<p>The conciliatory diplomatic tactics of Stalin’s successors have sometimes
been called a “peace offensive,” but the term is hardly justified.
Since last June the peaceful sounds have alternated curiously with
renewals of the old name-calling and intransigeance. And behind
their Curtain the Communists never stopped teaching their students
that capitalistic society must be overthrown. The North Atlantic
Council could not avoid the conclusion at Paris on December 16 “that
there had been no evidence of any change in ultimate Soviet objectives
and that it remained a principal Soviet aim to bring about the disintegration
of the Atlantic alliance.”</p>
<p>The evidence indicated that the Communist rulers, while making
gestures to their multitudes, were trying not to interfere with industrial-military
development.</p>
<p>The evidence included the Soviet Union’s own budget figures, which
indicated that the state investment (there is no private investment)
in consumer goods ministries is still extremely small; that the extremely<span class="pagenum"><a name="Page_18" id="Page_18">[Pg 18]</a></span>
large specific allocations to the military in the 1953 budget
were no lower than actual expenditures in 1952; and that the budget’s
“unexplained” category, which almost certainly includes “sensitive”
military projects, greatly increased.</p>
<p>It seemed most unlikely that increases in domestic output of consumer
goods, even supplemented by increased imports, could be large
enough to make a substantial improvement in the traditionally low
living standards in the Soviet Union.</p>
<p>We must suppose that the intent of any steps to improve the lot of
the Soviet-bloc consumer is to improve it just enough to rescue his
productivity in the interest of the state, but not enough to give him
such a taste of better living as would lead to a wider and wider opening
of the valves and hinder the buildup of the totalitarian war economy.</p>
<p>If that is a correct assumption, the world, yearning for assurance
of peace, is entitled to wish that the Kremlin’s calculations might be
upset and the consumer might get enough to whet his appetite in a
big way.</p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_19" id="Page_19">[Pg 19]</a></span></p>
<h2 class="break"><a name="CHAPTER_III" id="CHAPTER_III">CHAPTER III</a></h2>
<p class="chaptertitle">
The Kremlin’s Recent Trading Activities</p>
<p>In midsummer of 1953, at about the time of the Korean armistice
of July 27 and just before Malenkov’s major speech of August 8, the
Soviet Union attracted world attention by a flurry of new trade agreements
with non-Communist countries. There was another flurry
around the end of the year.</p>
<p>During the last 9 months of 1953 and the early part of 1954, the
representatives of U.S.S.R. adopted a somewhat more polite and
businesslike manner in their commercial dealings with the free world.
They not only <em>said</em> they wanted more trade (they had never stopped
saying it) but they took more steps to bring it about. Besides trade
agreements, they signed more contracts with private firms. In Moscow
they warmly entertained traveling salesmen from the West. In
Western capitals they staged a few cocktail parties and press conferences.
They poured more funds into eye-catching exhibits at “trade
fairs” from Copenhagen to Bangkok. They made grandiose offers to
buy, and gave them great publicity. Some offers to buy, sell, or barter
they made quietly through commercial channels. They showed signs
of wanting the nonindustrial portions of the world to regard them as
a helpful “big brother” bringing both trade and aid.</p>
<p>These activities, which many writers have called a “trade offensive,”
carried with them important meanings for the free world. In this
chapter we shall examine the activities and probe for the meanings.</p>
<h3>The New Trade Agreements</h3>
<p>In a period of about 3 weeks, in late July and early August, the
U.S.S.R. concluded trade agreements with France, Greece, Argentina,
Denmark, and Iceland. These were not mere renewals of expiring
agreements. The U.S.S.R. had never before had trade
agreements with France, Greece, or Argentina (or any other Latin
American country). Its last trade agreement with Denmark had expired
in 1950, and with Iceland in 1947. Its trade with three of the
countries, Greece, Iceland, and Argentina, had been almost nonexistent
in recent years. Considerable trade, however, had been carried on
with France and Denmark without benefit of trade agreements.</p>
<p><span class="pagenum"><a name="Page_20" id="Page_20">[Pg 20]</a></span></p>
<p>The U.S.S.R. also renewed existing trade agreements with Iran
and Afghanistan and signed a “payments agreement” with Egypt.
Most of these trade agreements signed during the summer of 1953
became effective as of July 1.</p>
<p>The second group of trade agreements, clustered shortly before or
after January 1, 1954, and mainly effective as of that date, was with
India, Belgium, Norway, Sweden, and Finland. It was the first time
the U.S.S.R. had ever had a trade agreement with India. There
had not been one with Belgium since 1951. The others were renewals.
Barter deals were also made with some of the countries already mentioned,
and with Israel and Japan.</p>
<p>Not since 1948, when the U.S.S.R. had entered into annual or long-term
trade agreements with eight countries of Western Europe, had
there been a period of Soviet trade-agreement activity that could compare
with the paper blitzkriegs just described. And the result was
that in the early part of 1954 the U.S.S.R. had trade agreements with
more free-world countries than at any other time in the postwar
period.</p>
<p>This fact and the hefty amounts of trade which were called for in
some of the agreements have given many people the impression that
a historic increase in the size of East-West trade was taking place.
The impression seems hardly justified.</p>
<p>In the first place, trade agreements are usually only hunting licenses.
They merely authorize—but do not guarantee—the exchange of goods.
The governments agree to permit the export and import of the types
listed—if contracts can be arrived at between Soviet monopolies and
Western business. If the goods turn out to be unavailable, or if the
demand is not forthcoming, or if the price is too high or the quality
too low, the publicized amounts of the trade agreements do not materialize
in the export-import statistics. And this fact rarely receives
as much public attention as the original announcement. To illustrate,
a spokesman for the Greek Foreign Ministry told the press on January
19 that the U.S.S.R. had lagged far behind in shipments under the
1-year trade agreement of July 1953. That agreement had been publicized
as calling for trade of $10 million each way, but the Greek
official said few Russian deliveries had been made and “it will be a
miracle” if these deliveries reached $3 million.</p>
<p>In the second place, even a big percentage of fulfillment would
not necessarily increase trade between the U.S.S.R. and the free
world to the high points of 1948 and 1952. The 1948 turnover—that
is, the sum of exports and imports—had been about $1 billion.
It declined to $545 million in 1950. By 1952 it was back up to $943
million. The preliminary estimate for 1953 is $790 million. Thus the
year which saw the Kremlin’s new trading tactics was also the year
that saw a slump of about 16 percent in the dollar value of its trade
with the free world. The trade was rising moderately in the last
part of 1953 and a further moderate rise in 1954 would not be
surprising.</p>
<p><span class="pagenum"><a name="Page_21" id="Page_21">[Pg 21]</a></span></p>
<p><a name="CHART_2" id="CHART_2"></a></p>
<div class="figcenter" style="width: 500px;">
<img src="images/chart2.jpg" width="500" height="388"
alt="Free World Trade with the Soviet Bloc"
title="Free World Trade with the Soviet Bloc" />
</div>
<p><span class="pagenum"><a name="Page_22" id="Page_22">[Pg 22]</a></span></p>
<p>But there is still another reason why the new Soviet trade arrangements
will not necessarily mean a historic upsweep in East-West
trade: The satellite countries have not been behaving in quite the
same way.</p>
<p>The U.S.S.R. is only one part of the Soviet bloc, albeit the center
of power. The U.S.S.R. accounts for about 30 percent of the trade
which the European Soviet bloc carries on with the free world. (The
percentage would be still less if Communist China were included, but
Communist China will be discussed in another chapter.) In other
words, Czechoslovakia, Poland, Hungary, the Soviet zone of Germany,
Rumania, Bulgaria, and Albania, despite the long, steady decline of
their trade with the free world ever since “sovietization” took hold
in about 1948, still exchange about twice as much merchandise with
free-world countries as does the U.S.S.R. These satellites, or some
of them, have long had trade agreements with countries in Western
Europe. During the last year or so they have renewed about 45 of
those. In addition they renewed about a dozen agreements with
non-European countries.</p>
<p>The brand-new agreements which the satellites concluded in Europe
were mainly with France and Greece, thus conforming to the Soviet
pattern of increased attention to those two countries. But in other
respects the satellite trade pattern was different from that of the
U.S.S.R., for while recent U.S.S.R. commitments, if fulfilled,
seem to indicate increased trade, there was no evidence of a reversal
in the long slide of the East-West trade of the satellites. Therefore
one could not ignore the possibility that the U.S.S.R., with a
flourishing of fountain pens and a blare of trumpets, was merely shifting
to itself a bigger percentage of all bloc trade with the rest of
the world.</p>
<p>Now let’s see what kinds of goods are involved in the new trade
agreements and other commitments that the U.S.S.R. has been
making.</p>
<h3>More Consumer Goods Ordered</h3>
<p>Consumer goods, the items about which Malenkov, Khrushchev,
and Mikoyan made such a fanfare in announcing the new course for
the Soviet domestic economy, make up one class of commodities, though
not the most important, that the U.S.S.R. has been ordering from
the Western world. It appears that the U.S.S.R. has committed
itself to buy consumer goods at a somewhat brisker rate than in
recent years.</p>
<p><span class="pagenum"><a name="Page_23" id="Page_23">[Pg 23]</a></span></p>
<p>Most of these consumer goods were food items. During the last
6 months of 1953 and the first month of 1954, the known Soviet arrangements
to buy food from the free world amounted to about $90
million. Some of the deliveries were scheduled in 1953, some in 1954.</p>
<p>Butter was the biggest item. In trade agreements and contracts,
butter quotas amounted to 37,500 tons, with an estimated value of
$40 million. Denmark was to provide about $18.6 million of this.
The second most important source of butter was to be the Netherlands,
with $13.7 million. Lesser amounts were to come from New Zealand,
Australia, Sweden, and Uruguay.</p>
<p>Meat quotas came to about $22 million, with Denmark and Argentina
the leading suppliers. Smaller amounts were to come from the
Netherlands, Uruguay, and other countries.</p>
<p>Fish quotas amounted to $15 million. Nearly all of this was herring.
The leading suppliers were to be Iceland and Norway, and
others were the United Kingdom, the Netherlands, and Denmark.</p>
<p>The U.S.S.R. during the 7-month period also arranged to buy
$7 million worth of citrus fruits from Italy, Japan, and Israel (and
apparently made a whopping profit selling oranges to the Russian
people); $4 million worth of cheese from Argentina and the Netherlands;
$2.4 million worth of lard from Denmark and Argentina;
and $1.4 million worth of sugar from the United Kingdom and Cuba.</p>
<p>Besides food, the most important consumer item ordered from the
West was textiles. The amount is harder to estimate, but it was
somewhat larger than the Soviet textile imports of any recent year.
The principal suppliers were to be Belgium, France, the Netherlands,
Italy, and the United Kingdom.</p>
<p>In addition to contracts already made, the Soviet officials were still
putting out feelers for consumer goods. Some of them reached across
the Atlantic. In January much publicity was given to the efforts
of an American firm to buy a large quantity of Government-owned
surplus butter and sell it abroad—ultimate destination Russia.</p>
<p>Secretary of Commerce Sinclair Weeks announced on January 15
that he would not approve any application “which would permit an
exporter to buy butter at considerably lower prices than those paid
by the American housewife and then send that butter into Russia.”
On February 10 he announced that it had been “decided as a matter
of policy to deny commercial export license applications for the export
for cash of United States Government-owned surplus agricultural
or vegetable fiber products to Russia or her satellites.” He
pointed out, however, that this ban “does not preclude study of export
license applications for these nonstrategic products to the Soviet bloc
if acquired by exporters in the open market and not from the Commodity
Credit Corporation surplus stocks.”</p>
<p><span class="pagenum"><a name="Page_24" id="Page_24">[Pg 24]</a></span></p>
<p>It is difficult at this writing to compare the Soviet Union’s new
commitments to buy consumer goods with the actual imports of
previous years. <em>Total</em> free-world exports to the U.S.S.R. in 1953
are estimated at $410 million (compared with $481 million in 1952)
but how much of this $410 million was consumer goods is not yet
determined. The 1954 figure can only be speculated upon. But certain
generalizations about consumer goods are possible.</p>
<p>As evident in chapter 1, the U.S.S.R. was never very much interested
in importing consumer goods from the West. The items
it did import for the consumer were not the household appliances
and luxury items we sometimes think of as consumer goods—but were
usually food. These imports have been higher at times than others:
for example they were relatively high in the late 1930’s and again
in 1948. Since 1950 they have been rising again, but by 1953 they
were still breaking no records. They have always represented a relatively
small percentage of total Soviet imports. At the same time,
during the postwar years Soviet policies were forcing the consumer-goods
imports of the European satellites steadily downward.</p>
<p>These contrasting trends of rising Soviet imports and sinking satellite
imports seemed likely to continue in 1954. This probability, plus
Mikoyan’s statement in his October speech that “we are helping the
People’s Democracies with certain commodities,” made one wonder
how much of the new Soviet imports of butter and other food were
being reshipped to Eastern Germany and other satellites to alleviate
the unrest there.</p>
<h3>A Shopping Spree for Ships</h3>
<p>The U.S.S.R., while ordering more consumer goods, seemed even
more anxious to buy ships.</p>
<p>Every trade agreement which the U.S.S.R. has signed with a
shipbuilding nation of Western Europe since mid-1953—that is, with
Finland, Italy, Belgium, the Netherlands, Denmark, France and
Sweden—has included a sizeable quota for ship purchases, particularly
fishing vessels and refrigerator ships. Contracts for fishing
vessels were also made with firms in the United Kingdom and Western
Germany.</p>
<p>It was safe to say that Soviet activity with respect to Western
European shipyards since mid-1953 surpassed the biggest previous
shopping expedition for ships, which came around 1949. And it was
clear that by early 1954 the U.S.S.R. had greater commitments on
the books to buy ships from the West than at any other time in its
history. This was true in tonnage, value, and number of vessels.</p>
<p>Probably not all the trade agreement commitments will result in<span class="pagenum"><a name="Page_25" id="Page_25">[Pg 25]</a></span>
actual deliveries; on the other hand, the shopping spree is still going
on and further commitments are likely.</p>
<p>Because of Western restrictions on the export of certain types of
ships, the new vessels destined for the Soviet Union were mainly of
smaller types. A large number were fishing vessels, such as trawlers,
fish processing craft, and refrigerator ships. Others were cargo ships,
tugs and barges.</p>
<p>The buying of fishing vessels accords with the shortage of food in
the Soviet bloc. Mikoyan in his October speech admitted there had
been many complaints about the fish supply and that the Soviet fishing
goals had not been met. But the Soviet search for ships could
not be viewed entirely in the light of a desire to produce more consumer
goods. The U.S.S.R. was seeking cargo ships in addition to
fishing boats, ordering other marine equipment such as component
parts and floating cranes and trying to arrange for more ship repairs
in free-world ports. Western shipbuilders were inclined to be receptive
to orders for vessels at a time when ship orders from Western
countries were declining. At the same time it was impossible to ignore
the fact that Soviet-bloc orders in the West can have the effect of
freeing Soviet-bloc shipyards for the building of naval vessels. The
campaign to buy ships thus presented the free world not only with
more orders but also with a security problem.</p>
<p>The development of a Soviet merchant fleet is relatively recent.
In 1939 the U.S.S.R. had seagoing merchant vessels totaling only
1,135,000 gross tons. It emerged from World War II with more
than twice this tonnage. The main sources of the increase were lend-lease
ships from the United States and war reparations. The United
States in its lend-lease program leased to the U.S.S.R. 121 merchant
vessels with gross tonnage of some 750,000 tons. Of these, 30 were
returned to the United States and 4 were lost. The U.S.S.R. kept
the others, and long exhaustive negotiations since 1946 have failed
to settle this and other lend-lease claims. Through war reparations
the U.S.S.R. acquired 170 more ships with gross tonnage just over
one-half million tons. By 1953 the Soviet bloc—the U.S.S.R. and
Poland for the most part—had a seagoing merchant fleet with a gross
tonnage of 2-1/2 million tons, compared with free-world fleets totaling
about 21 million tons.</p>
<h3>Most of All, They Want Hard Goods</h3>
<p>The new Soviet purchases of butter, meat, and other consumer items
have sometimes obscured the continuing heavy demand for equipment
and raw materials needed for industrialization. There has been no
appreciable decline in the Soviet interest in buying industrial commodities.<span class="pagenum"><a name="Page_26" id="Page_26">[Pg 26]</a></span>
Such goods still dominate Soviet imports and new agreements
to import—and that goes for the European satellites, too.</p>
<p>The Soviet bloc has shifted some of its priorities. The Soviet
eagerness to buy ships is an example of a raised priority. The sharp
drop in Soviet buying of Malayan rubber from the United Kingdom
in 1953 was an example of a lowered priority. There are some other
changes, but no change in the emphasis on industrial goods in general.</p>
<p>All the trade agreements concluded between countries of Eastern
and Western Europe since mid-1953 have included quantities of such
items—limited, of course, by the West’s security controls which provide
for the embargo of some items and quantitative restrictions on
others. In the trade agreements of Czechoslovakia and Poland, we
find quotas for deliveries from the free world of electrical equipment,
ball bearings, steel products, pyrites, lead, zinc, aluminum, and many
others. Bulgaria also has shopped for capital equipment. In exchange
for their grain, vegetables, fruits, tobacco, and a small amount
of manganese and chrome, the Bulgarians made trade-agreement commitments
to get important amounts of cables, rods, bars, plate steel,
railroad equipment, floating cranes, electrical machines and installations,
mining equipment, and miscellaneous machinery. The
U.S.S.R., besides its procurement program for ships, has written
into its trade agreements certain kinds of machine tools, various
kinds of steel, equipment for electric power plants, construction equipment,
chemical products, textile machinery and machinery for the
timber and food-processing industries. An analysis of one recent
trade agreement showed that three-quarters of the value of the Soviet
imports consisted of products of the metal working industries. Businessmen
in the United Kingdom, which has concluded no recent trade
agreement with the U.S.S.R., have reported that the Soviet bloc’s
real interest in buying British goods was confined mainly to items for
production.</p>
<p>The attempts to purchase items like those named in the foregoing
paragraph are nothing new. The point is, these efforts are continuing.</p>
<p>Many of these items have been under quantitative controls by the
major free-world countries—that is, exported to the bloc in limited
quantities only. Some of the most highly strategic items, such as the
types of machine tools and bearings that are essential to war production,
have been under embargo, and when that was true, the free
countries that participate in the international control program have
generally shipped them only to fulfill commitments made before controls
went into effect, or in special cases where the countries felt
strongly that the shipment was justified in view of the benefits to the
free world that resulted from the two-way trade made possible by the
shipment. In 1952 and 1953, for example, all nations receiving aid
from the United States permitted the shipment to the Soviet bloc<span class="pagenum"><a name="Page_27" id="Page_27">[Pg 27]</a></span>
of roughly $15 million in items that were listed for embargo under
the Battle Act (Mutual Defense Assistance Control Act of 1951), as
compared with total free-world shipments to the bloc of about $2.7
<em>billion</em> in the same 2 years.</p>
<p>These highly strategic items, of course, are the ones which the
countries of the Soviet empire have wanted most of all. And when
not able to get them legally, they have continued their efforts to get
them illegally. The third semiannual Battle Act report, <cite>World-Wide
Enforcement of Strategic Trade Controls</cite>, contained a detailed account
of the underground trade that violates Western regulations.
Since all foreign trade of a Soviet-bloc country is a state monopoly,
it follows that the state is an active participant in this underground
traffic. With the bloc, circumvention is an official policy.</p>
<p>The Soviet Union, despite its publicized buying of consumer goods—which
have never been restricted by the free world—has definitely not
slackened its efforts to obtain industrial goods whether strategic or
nonstrategic in nature.</p>
<h3>Something Different in Soviet Exports</h3>
<p>As told in chapter I of this report, the economic planners of the
Soviet empire first figure out their import requirements and then
decide what they want to export in order to pay for the imports. They
look upon exports primarily as a means of obtaining goods which are
more advantageous to import than to produce, or which they cannot
produce.</p>
<p>In the present chapter, we have seen what sort of items they are
currently interested in importing. Now we turn the coin over and
look at the export side.</p>
<p>The most noticeable feature is that the U.S.S.R. in the last half of
1953 and the early part of 1954 introduced into free-world markets a
number of mineral products which they had not sold in such quantities
for some years.</p>
<p>These commodities included manganese, petroleum, and gold. All
of them at one time or another have been among the major Soviet
exports. Together with grain, timber, and furs, they make up the
principal means that the U.S.S.R. possesses to procure the imports
they want.</p>
<p>Why have the mineral exports been revived at this time? This leads
us to the grain situation.</p>
<p>Grain has long been the Soviet Union’s No. 1 export commodity,
and still is. But Soviet grain shipments declined precipitately in
1953. The United Kingdom, usually the main Western customer for
this commodity, stopped buying grain on a government-to-government
basis and turned the purchasing over to private firms. At the<span class="pagenum"><a name="Page_28" id="Page_28">[Pg 28]</a></span>
same time the U.S.S.R. apparently decided to keep more of its
grain stores at home. The efforts to furnish more fodder to livestock,
together with below-average crops and collective-farm headaches in
the U.S.S.R. and satellites, suggest the motivation for this. At any
rate the private British firms were unenthusiastic about signing large
contracts at the high prices set by the U.S.S.R., and grain shipments
to the United Kingdom skidded from $101 million in 1952 to only $10.1
million in 1953.</p>
<p>Although grain was far from disappearing as a Soviet export to
the West, it became less potent—for the time being, at least—as a
means of acquiring foreign exchange to pay for imports. This loss
was only partially offset by a moderate increase in sales of Soviet
timber to Britain and a big drop in the amount of Malayan rubber
that the U.S.S.R. bought from the British. Meanwhile war reparations
from Finland had ended in 1952, and deliveries of Swedish
goods under a long-term credit agreement ended the same year. The
Finnish and Swedish developments meant that about $80 million
worth of goods which the U.S.S.R. had received from those countries
in 1952 could not be duplicated in 1953 unless some other means of
payment were created. All these events contributed to the reviving
of some other export commodities.</p>
<p>How far the shift is going and how long it will continue cannot be
predicted. Abrupt alteration in Soviet exports is hardly a novel
development. For a time, around 1930, when forced collectivization
of agriculture and forced exports of grain had induced famine in
some areas of the U.S.S.R., the Kremlin opened the pressure valves
a mite, heavily slashed the exportation of grain, and even <em>bought</em>
some grain on the Baltimore exchange. That was a breathing spell
in the midst of the first big Soviet push toward rapid industrialization.
During the same general period, the U.S.S.R. found it expedient to
force more production and more exports of furs, coal, and some of the
same commodities now receiving special attention—petroleum and
metallic ores—in order to get imports of capital goods needed in the
ambitious industrial program.</p>
<h3>They Have Dug Up Manganese</h3>
<p>Manganese is a silvery-white metal used in the making of hard
steels. The U.S.S.R. is one of the world’s major sources of manganese.
It can produce a large amount each year, depending on
how much manpower it decides to throw into the effort. It consumes
a lot in its own steel industry, even using manganese as a substitute
for scarcer alloys like nickel and molybdenum. In addition, its plans
usually provide for certain quantities of manganese ore to sell abroad.</p>
<p>These exports have continually fluctuated. Before the war they<span class="pagenum"><a name="Page_29" id="Page_29">[Pg 29]</a></span>
ranged from about 400,000 metric tons a year to about 1 million. The
United States, which produces very little manganese, was a major
customer. In the 1930’s we got about 40 percent of our manganese
imports from the U.S.S.R. Other important customers were France,
Germany, Belgium, and Japan.</p>
<p>During the war, Soviet manganese vanished from world markets.
The United States and other customers turned to sources in Africa,
Latin America, and India.</p>
<p>In March 1945, Soviet manganese ore reemerged. The United
States was the principal buyer, receiving 1,168,000 tons in about 4
years. In February 1947 the Soviet Foreign Trade Journal pointed
out the importance of the United States to future Soviet plans for
the export of manganese. But late in 1948 the Kremlin suddenly
reduced its shipments to the United States almost to the point of
embargo. A few shipments trickled in during the next 2 years and
stopped entirely in 1951. Meanwhile deliveries to Western Europe
did not undergo a compensating rise; they were little more than
100,000 tons a year.</p>
<p>Came the season of the last half of 1953 and the early part of 1954.
The Kremlin’s zeal for exporting manganese bloomed again. Commitments
to ship over 300,000 tons of the ore were written into trade
agreements with Western European countries. Offers of manganese
reached the United States through various channels.</p>
<p>Chrome is usually part of the package when manganese is sold.
As could be expected, Soviet chrome commitments also climbed in
late 1953.</p>
<p>There was also a revival of activity in the export of silver,
platinum, and palladium.</p>
<h3>The Emergence of Russian Oil</h3>
<p>But a more interesting commodity which the U.S.S.R. has begun
to put on the market in bigger quantities was oil.</p>
<p>In approximately the last half of 1953 the U.S.S.R. made agreements
to ship to free-world countries about 3.5 million metric tons
of crude petroleum, kerosene, diesel fuel, and other petroleum products.
The countries due to receive the largest amounts—if delivered—were
Finland, France, and Argentina. Other customers were Greece,
Italy, Iceland, Denmark, Sweden, Israel, and the Netherlands. Some
deliveries were made in 1953; more would be made in 1954; there was
no certainty that all the commitments would be fulfilled. But even
a two-thirds fulfillment apparently would be enough to hoist petroleum
ahead of lumber and furs and place it second only to grain
among Soviet exports to the free world.</p>
<p>What would this mean to the free world? What problems would<span class="pagenum"><a name="Page_30" id="Page_30">[Pg 30]</a></span>
it raise? Again we can find clues in the past. The present situation
is not the first time that the U.S.S.R. has created a stir by abruptly
entering oil markets. This also happened in the late 1920’s, when
the U.S.S.R. began exporting large amounts of oil as a means of
obtaining industrial imports. These exports grew each year and
were 6.1 million metric tons in 1932. This was around 10 percent
of the world’s oil exports, and was almost 30 percent of Soviet oil
production at the time. The United Kingdom and Italy were the
major customers for this oil, but there were many others. The marketing
was done through various channels. The Soviet monopoly
that controlled all oil exports set up a network of sales offices abroad.
Long-term contracts were made in Spain, Italy, France, Belgium,
and the Netherlands.</p>
<p>The expansion of Soviet oil sales gave rise to bitter price wars with
established oil groups. The bitterness was made more intense by
the fact that the Bolsheviks had neglected to settle for the foreign
oil properties that they had seized after the revolution. As in all
exports, the U.S.S.R. was more interested in total receipts of foreign
exchange than in making high per-unit profits; so it could and did
use price cutting as a means of achieving a foothold. Subsidiaries
of some of the world oil trusts then tried to drive the Soviet oil back
home by underselling the Soviet monopoly. But the attempts failed,
and Soviet oil won an important place in world markets.</p>
<p>In the late 1930’s, the oil was withdrawn. Soviet exports dropped
back to 1.4 million tons in 1938, and kept fading. After the war,
they came back only in a trickle—for example, 100,000 metric tons
in 1951 and 250,000 in 1952, then rising to 450,000 in 1953 as some of
the new commitments of 3.5 million tons began to be fulfilled.</p>
<p>Meanwhile the war had swept additional oil into the Kremlin’s
hands, including the oil wells of Rumania and those which were taken
over as “German assets” in the Soviet zone of Austria. And the oil
exported to the West from these new Eastern European acquisitions
greatly exceeded the exports of the U.S.S.R. itself, amounting to
1.2 million metric tons in 1951, 1.7 million in 1952, and 2.3 million in
1953. In recent months, while the U.S.S.R. was making agreements
to ship 3.5 million tons, the new export commitments of these other
properties in Eastern Europe became known only in part, at least
at this writing.</p>
<p>The Soviet bloc, though still short of certain specialized refined
products, probably has the oil capacity to make considerable exports
for at least some years, if the Kremlin so decides. Whether the bloc
will indeed step into the world markets in an important way, as the
U.S.S.R. did in the twenties, is of course not known. The West is
watching closely to see whether the Kremlin will again use its<span class="pagenum"><a name="Page_31" id="Page_31">[Pg 31]</a></span>
monopoly control to undertake a major campaign of underselling other
suppliers in world markets.</p>
<p>It was natural for oil-importing countries in the free world to be
interested in new supplies from the Soviet bloc, especially if the
price was attractive or if the transaction also enabled a free country
to market its own products in the East. But the West could not
forget past patterns, nor ignore the problems brought by new Soviet
sales.</p>
<p>When the Russians abruptly disappear from markets, free-world
importers turn to free-world sources to make up the difference. And
if the importers later jump whenever the Soviet Government decides
to stage another of their dramatic entrances, the free-world sources
whose production has been stimulated will be the losers. And who
can predict when the dictates of the Kremlin—economic or political—will
override the dictates of the market place, and the oil, manganese,
chrome, or whatever it may be, will suddenly be whisked out of reach?</p>
<h3>Gold Sales Expanded</h3>
<p>Down through the centuries, the word <em>gold</em> has exerted a powerful
effect upon the imaginations of mankind. And last December, when
the news came out that airplanes laden with gold bullion were flying
from Moscow to London, there was a great buzz of interest. What
were the Russians up to now?</p>
<p>The export of Russian gold was not new. The Soviet Union had
been selling a sizeable amount each year in the free world. But in
the last few months of 1953 a larger amount of Russian gold came out
into the free world than had emerged in any recent year. Most of it,
instead of entering the free market, went to the Bank of England.
The total amount exported to England, Switzerland, and other countries
during 1953 was not announced, but it was somewhere between
$100 and $200 million.</p>
<p>There has been much speculation on the reasons for an increase in
gold sales. The best explanation seemed to be that the Kremlin, hard
pressed for adequate exports, decided—as in the case of manganese
and oil—to use a fraction of its gold hoard so that it could continue
to import the things it wanted from the free world. It has done the
same thing on past occasions. For example, in 1928 the U.S.S.R.
exported $167 million worth of gold and in 1937, $212 million worth.</p>
<p>Whether still larger amounts of Russian gold would be exported in
the future was of course unknown. Concerning the size of the Soviet
gold stock many guesses have been made, most of them ranging from
$3 billion to $6 billion. The Soviet Union attaches great importance
to its gold reserve. It has been willing to part with gold only in
limited amounts or for special purposes. In any event, the gold<span class="pagenum"><a name="Page_32" id="Page_32">[Pg 32]</a></span>
hoard would not be big enough to use as a base for a large-scale, long-term
trade relationship. Nevertheless, over the short run, and for
limited purposes, the U.S.S.R. could, if it desired, export a lot more
gold than it has to date. Gold therefore is an intriguing question
mark of East-West trade.</p>
<h3>Reaching Outside Europe</h3>
<p>Moscow, while shopping for more ships, peddling more gold, and
making other moves in the industrial countries of Western Europe,
also reached outside Europe and tried to fasten closer economic ties
with Asia and Latin America. The trade of the Soviet Union with the
non-Communist areas of Asia, and with Latin America, has never
amounted to more than driblets. That of Czechoslovakia and Poland
has been a little bigger. The U.S.S.R. entered this field in 1953 with
a good deal of propaganda effect. The effect in delivery of goods was
still to be seen.</p>
<p>The Soviet trade bosses used a number of devices.</p>
<p>One device was to offer loans and technical assistance. Some of the
loans were connected with trade. Others, related to construction
activities within free-world countries, were more suggestive of investments
and provided opportunity for increased Soviet or Communist
Party economic penetration. There was a marked interest in assisting
in the establishment of storage and supply facilities. So far, few
Soviet offers have been accepted. Possibly this is because they are
disturbingly reminiscent of the penetration techniques that were used
to gain economic leverage inside the Eastern European countries and
China prior to Soviet political domination of these regions. Or it may
be that skepticism has been aroused by the experience with Communist
Party use of commercial enterprises in some Western European countries
to finance the local party and the Kremlin’s activities.</p>
<p>Another device has been to build lavish exhibits at “trade fairs.”
This activity, though carried on in Western Europe too, was especially
marked in South Asia. On an increasing scale, since 1951, the Soviet
Union and its satellites have been using trade fairs for a double purpose—to
promote the kind of trade the bloc desires and to propagate
Communist ideas.</p>
<p>By elaborate and costly displays the Soviet-bloc governments seek
to dominate the fairs; to overshadow the exhibits of the United States
and other free-world countries; and to create the illusion of an industrial
and commercial superiority over the Western nations, especially
the United States. The U.S.S.R. makes a concerted and
determined effort to discredit and minimize the industrial and technological
achievements of the United States by contrasting the great
size of the Communist nations’ participation with the usually modest<span class="pagenum"><a name="Page_33" id="Page_33">[Pg 33]</a></span>
representation by United States firms. An important distinction between
Soviet and U.S. exhibits is that the former are developed as a
state trade promotion and propaganda undertaking, and involve the
building of special pavilions, whereas U.S. participation amounts
to the sum total of exhibits of individual U.S. industrial and
commercial companies assembled for the single purpose of promoting
the sale of individual products.</p>
<p>The importance which the bloc attaches to these undertakings is
found not only in the mountains of propaganda it issues on the subject,
but in the sizeable expenditures it makes. For example, in 1952 the
U.S.S.R. and its satellites dominated the Bombay International
Industries Fair with four big exhibits. The Soviet exhibit was the
largest; it cost more than $200,000 and was manned by a staff of 40.
Communist China’s exhibit was the second most pretentious, with
Czechoslovakia and Hungary also participating in an impressive way.
At the Thailand Constitution Fair at Bangkok in December 1953, the
Soviet exhibit was again the most elaborate. The Soviet Government
established a special pavilion that cost an estimated $500,000 and
housed 5,000 items, including trucks, automobiles, precision equipment,
glassware, rugs, and preserved foods.</p>
<p>Yet another device was to join hands with a key nation of each
continent in a brand-new impressive trade agreement which seemed
to offer attractive benefits to that nation and which might stimulate
neighboring countries to hanker after similar opportunities. The
Kremlin chose India and Argentina. The U.S.S.R. concluded
trade agreements with those two countries for the first time. So did
some of the European satellites, and other satellites renewed existing
agreements. The U.S.S.R. and the satellites also renewed existing
agreements with certain other countries in Asia and Latin America.</p>
<p>The two-year Russian trade agreement with Argentina, signed in
August 1953, was one of the most interesting of the year. For one
thing it came at a time when trading missions of the U.S.S.R. and
its satellites were becoming more active throughout Latin America—and
the Soviet-Argentina agreement helped those missions to gain a
somewhat more receptive audience for their overtures. Latin American
governments have cooperated with other Western nations in withholding
highly strategic commodities from the Soviet bloc; for example,
bloc proposals to buy Chilean copper and Bolivian antimony
and lead were not accepted. Obviously the Kremlin hoped to bring
about more resistance to the control of strategic materials and to
create Western disunity over that issue.</p>
<p>This trade agreement between the U.S.S.R. and Argentina was
also interesting for its size and composition, at least on paper. It
called for deliveries of $60 million in each direction, presumably
during the first year, with an additional Soviet credit of $30 million.<span class="pagenum"><a name="Page_34" id="Page_34">[Pg 34]</a></span>
Argentine shipments were to include wool, hides, linseed oil, meat,
and other goods that the Soviet Union could undoubtedly use. But
the list of Soviet exports included some items for which the Soviet
bloc seemed to have equal or greater need. The U.S.S.R. promised
to deliver a large quantity of machinery and transportation equipment
on credit, as well as petroleum, coal, and other items. Proposals
to deliver certain kinds of machinery also cropped up in Soviet
agreements with India and Iran.</p>
<p>Machinery, as we know, is what the Soviet rulers go to extreme
pains to <em>import</em>. If they were serious now about exporting it, and
if they really intended to deliver large quantities and not mere tokens,
it would be something new, although even then they would probably
not be exporting the advanced types which they usually seek to obtain
in the West. It remained to be seen whether the U.S.S.R. would
come anywhere near to complete fulfillment of the trade agreement
with Argentina, for example. But one could only suspect that the
promises of big and attractive deliveries—whether fulfilled or not—were
made in large part for the purpose of weakening the ties of those
countries with the rest of the free world.</p>
<hr class="tb" />
<p>In this chapter we have traced various threads of the Soviet trading
activities, and have suggested reasons why they engaged in each kind
of activity.</p>
<p>Now it is necessary to look more deeply into the whole complex
of Soviet foreign trade policy and sum up what’s behind it all.</p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_35" id="Page_35">[Pg 35]</a></span></p>
<h2 class="break"><a name="CHAPTER_IV" id="CHAPTER_IV">CHAPTER IV</a></h2>
<p class="chaptertitle">
What’s Behind It All</p>
<p>From the Kremlin comes a continual flow of propaganda, spread
to the ends of the earth by the international Communist movement,
to the effect that the Union of Soviet Socialist Republics is the
Champion of Peace.</p>
<p>Stalin’s death afforded the Communists a convenient opportunity
to portray a new regime zealous for a peaceful, normal world. They
did not say out loud that Stalin had been <em>less</em> zealous, but they were
not reluctant to play upon the world’s fervent wish that the new
management would turn over a bright new leaf. And they were
willing, even eager, for the world to believe that one part of the
pursuit of peace was the promotion of East-West trade.</p>
<h3>The Kremlin and Peace</h3>
<p>Can the so-called Soviet “trade offensive” of 1953-54 really be explained
as an effort to establish a just and lasting peace, as the West
understands the word? If we could believe that, the world might
suddenly seem a more comfortable place to live in. We must always
keep the door ajar for any genuine steps to abandon the Soviet brand
of imperialism, to abandon the basic unfriendliness of purpose toward
everything not under Moscow’s control. The free world was looking
for such a movement at the Berlin Conference in the early part of
1954, but it did not show up.</p>
<p>The only way peace could be accepted as a Soviet trading motive
would be to define peace as the Soviet leaders themselves have defined
it in the past, not in their propaganda but in their party teachings.</p>
<p>“The peace policy of the proletarian state,” according to a Comintern
Congress resolution of 1928, “certainly does not imply that
the Soviet state has become reconciled with capitalism ... It is
merely ... a more advantageous form of fighting capitalism, a form
which the U.S.S.R. has consistently employed since the October
Revolution.”</p>
<p>Lenin, in a statement which was reprinted in 1943, said that “every
’peace program’ is a deception of the people and piece of hypocrisy
unless its principal object is to explain to the masses the need for a<span class="pagenum"><a name="Page_36" id="Page_36">[Pg 36]</a></span>
revolution, and to support, aid, and develop the revolutionary struggle
of the masses that is starting everywhere. ...”</p>
<p>There is no evidence that the new Soviet regime has overnight
embraced free-world ideas about peace and warfare. To the disciples
of Marx, Lenin, and Stalin, the world is always in a state of
warfare. The warfare waged by them is three-fold: psychological,
economic, and military. Military action is a last resort, but psychological
and economic action never ceases. Stalin did not invent this
concept, though he put it into action on a large scale. Nor was it
exclusively Russian. The German military philosopher, Clausewitz,
whose mid-19th century writings were carefully noted by Lenin and
Stalin, wrote: “Disarm your enemy in peace by diplomacy and trade,
if you would conquer him more readily on the field of battle.”</p>
<h3>A Mixture of Motives</h3>
<p>Hence the question arises: Can the Soviet trade offensive be explained
as a campaign of “economic warfare”?</p>
<p>That depends on what is meant by economic warfare.</p>
<p>Paradoxically, many people think of economic warfare as meaning
economic action in which economic considerations are relatively unimportant,
and the gaining of political or psychological advantage is
dominant.</p>
<p>If economic warfare is taken in this sense, the answer to our question
is “no”. The explanation of the Soviet trade offensive is not
that simple. The Soviet Union and its satellites have economic needs.
They use foreign trade to serve those needs. We have noted in this
report how they determine what imports they want from the free
world, and then develop a program of exports to pay for the imports.
They are not in the Olympian position of being able to pick and
choose these imports and exports solely on the basis of whether the
choice will help them deceive, confuse, embarrass, or divide the capitalistic
West. Therefore it is a grave oversimplification to assume,
as some people do, that the Soviet Communist’s every action in the
market places of the world inevitably brings him advantages in international
politics.</p>
<p>On the other hand it would be an even greater mistake to assume
that economic considerations always govern; that because the Soviet-bloc
governments often use normal trading channels and devices they
must be looking upon trade through the same eyes as the businessman
of Indianapolis, Manchester, or Stockholm; and that politeness at the
bargaining table is the undoubted mark of innocently “economic”
commerce, free of ulterior motives.</p>
<p>The truth is: Soviet-bloc trading actions are neither purely economic
nor purely noneconomic.</p>
<p><span class="pagenum"><a name="Page_37" id="Page_37">[Pg 37]</a></span></p>
<p>The Soviet trade offensive can be explained in terms of economic
warfare, if we define economic warfare as economic action by the state
that is designed to serve basic hostile objectives directed at another
nation or group of nations—whether or not the immediate gains are
economic.</p>
<h3>Their Objectives Haven’t Changed</h3>
<p>In Chapter I, the Soviet bloc’s long-term objectives in its economic
relations with the free world were outlined. It was pointed out that
these objectives have a dual character: strengthening the bloc and
weakening the free-world powers. The objectives were summarized
this way:</p>
<ol>
<li>To feed the economy, especially the industrial-military base,
with imports that help the bloc become more powerful and less
dependent on the free world.</li>
<li>To drive wedges among free-world nations at every opportunity.</li>
<li>To increase the reliance of free-world nations on the bloc
for markets or supplies, and thus make the free world more vulnerable
to bloc pressures.</li>
</ol>
<p>Within this broad framework the Kremlin pursues more immediate
and specific goals, such as:</p>
<ul class="nopadding">
<li>Obtaining through normal commercial channels the ships, machinery,
and other industrial goods which they can produce only at
relatively high expenditure of labor and resources—or which they
cannot produce at all.</li>
<li>Obtaining through illicit channels those strategic materials whose
shipment is restricted by free-world governments in the interest of
their national security.</li>
<li>Forcing the relaxation of free-world security controls in order
to get strategic goods more cheaply and easily and to create dissension
among free nations.</li>
<li>Fostering rivalry among free-world merchants in trading with
the bloc, thus reducing the net cost to the bloc of obtaining goods it
desires from the West.</li>
<li>Buying increased quantities of certain consumer goods, though
apparently just enough to help with problems within the bloc and to
rouse the interest of the West. (Of course it would not take a “trade
offensive” to obtain these consumer goods, for they have never been
restricted by the West.)</li>
<li>Selling the West an exaggerated idea of the size and reliability
of markets, supplies, and general benefits that can be obtained through
East-West trade.
<span class="pagenum"><a name="Page_38" id="Page_38">[Pg 38]</a></span>
</li>
<li>Making their limited export commodities go as far as possible in
solving their import problems without draining vital resources away
from their program of forced industrialization.</li>
<li>Making financial and other economic arrangements in neighboring
countries and nonindustrial areas in order (1) to gain more influence
and more access to resources there, and (2) to diminish the
influence and access to resources of free-world industrial nations.</li>
</ul>
<p>The foregoing can be recognized, as among the things being attempted
in the Soviet “trade offensive” of 1953-54. They did not fall
in separate compartments, but were woven together in a central plan
and they contributed to one another. They were not so new as some
of them might look at first glance. The long-term objectives which
they served were not new at all.</p>
<h3>Their Practices Haven’t Changed</h3>
<p>Some new tactics have been adopted, as we have seen. But even
many tactics have more of an old look than a new. Soviet-bloc business
practices still clash with Western concepts of normal, peaceful
trade relations.</p>
<p>Soviet-bloc representatives have access to many free-world factories,
visit docks and inspect merchandise destined for the bloc, maintain
offices in commercial centers, receive technical materials from libraries
and business firms, and pick up voluminous statistics on free-world
resources, production, exports, and imports.</p>
<p>The governments of Soviet-bloc countries do not reciprocate. Although
they entertain delegations of diplomats and businessmen and
occasionally allow individuals to visit certain places when it serves
their purposes, the Western business community in general is barricaded
out of their cities, factories, and countrysides, and the peoples
of the bloc firmly locked in. Disclosures of even the simplest facts
and figures about their economies is a serious crime. They do not
enter into the customary international agreements for the protection
of patents. Though they claim to have invented almost everything,
much of their industrial progress is based on piracy of Western inventions
and technology, from the tiny Moskvich automobile to the jet
engine. They have failed to settle promptly and adequately claims
for confiscation of Western properties and for lend-lease assistance.
Furthermore the terms on which they often seek to trade omit customary
guarantees of fair dealing. For example, the U.S.S.R is
still trying to insert clauses in its East-West contracts requiring that
any dispute between the Soviet Government and the free-world businessman
be arbitrated by the Chamber of Commerce of the Ministry
of Foreign Trade—an organ of the Soviet Government. And as we
have already seen, they make every effort to circumvent the export<span class="pagenum"><a name="Page_39" id="Page_39">[Pg 39]</a></span>
controls of other nations; they pay citizens of those nations to violate
the laws of their governments.</p>
<p>The best way to characterize the Soviet “trade offensive” is that the
Soviet rulers have improvised for their trade structure a new facade
of papier mache but have not reconstructed the interior. In changing
circumstances the Kremlin was seeking effective ways of accomplishing
the same traditional objectives of feeding its industrial-military
machine and weakening the free world.</p>
<p>In the absence of Soviet-bloc policies conducive to furnishing a
long-term steady supply of exports desired by free-world countries,
the West could hardly expect East-West trade to return to the prewar
volume, though a short-term boost would not be surprising. The
combined value of the trade in both directions between the free world
and the Soviet bloc in Europe was $2.6 billion in 1951 ... $2.4 billion
in 1952 ... and about $2.2 billion in 1953. By contrast, total
foreign trade within the free world in 1953 was about $148 billion.</p>
<p>It is not only the amount of trade that must be considered, however,
and that is why we have devoted attention in this report to what goods
were involved and what the new Soviet regime was trying to
accomplish.</p>
<h3>The Free World Is Strong</h3>
<p>What are the implications of all this for the free world?</p>
<p>In the face of the Soviet objectives, methods, and recent trade
activities, one can recognize the inadequacy of two extreme policies
that are often urged upon Western governments. Those extremes are:</p>
<p>1. Complete embargo on trade with the bloc.</p>
<p>2. Completely unrestricted commercial relations with the bloc.</p>
<p>Complete embargo would be the conventional answer in military
conflict. But to urge complete embargo in the present situation
is to ignore the fact that the present trade situation offers opportunities
to the free world. The free world, with its enormous production,
can benefit from trade; the test is what goods are traded
and on what terms. The free nations are stronger economically than
they have ever been. Collectively they are far stronger than the
Soviet bloc. They possess tremendous resources. On the whole they
have solid and healthy competitive systems. Their businessmen have
behind them centuries of experience in bargaining, merchandising,
and servicing. With these factors creating for the free world a currently
strong trading position, the free-world nations should be able
to take advantage of the needs of the Soviet bloc and by hard bargaining
gain benefits from East-West trade.</p>
<p>Completely normal and unrestricted commercial relations with the
bloc seem to be equally unsuitable as a course of action.</p>
<p><span class="pagenum"><a name="Page_40" id="Page_40">[Pg 40]</a></span></p>
<p>If the free world should abandon the controls it has imposed in
the interest of national security, drop its guard and permit unrestricted
trade in <em>all</em> its raw materials, industrial goods, and advanced
technology—the free world would be the loser. In view of the Communist
objectives and methods, unrestricted trade would permit the
bloc to increase its war potential—and specifically the all-important
economic base of its war potential—faster than it otherwise could.
The goods received by the free world would bring no commensurate
return.</p>
<p>If such trade encouraged a general relaxation of the free world
military defense, it would be that much more damaging to the free
world. In any event, unrestricted trade would permit the Soviet
traders to compete freely in Western markets for important strategic
goods needed for Western military defense, thus making that defense
more costly and difficult for many free-world nations.</p>
<p>Employing the monopoly power of the Soviet states, individually
or collectively, the bloc would be able to extract economic advantages
and unwarranted concessions from the weaker individual traders
and nations to the net detriment of the free world.</p>
<p>Finally, unrestricted commercial relations, in which commercial
gain is the overriding criterion, would weaken the free world insofar
as they increased the economic reliance of certain free areas upon the
bloc. This could be harmful by increasing the vulnerability of these
areas to Soviet pressure. It could also have the effect of diverting the
attention of the free world from its compelling general economic
tasks such as developing bigger, better, and more accessible markets
and making international financial and trade arrangements that will
diminish the difficulties of sharing the free world’s vast resources
and production among the nations.</p>
<h3>The Challenge</h3>
<p>Thus, the problem and the challenge is to find and to steer a course
midstream—to trade with the Soviet bloc on terms which bring to the
free world a net advantage. This is no simple matter.</p>
<p>There are two sharp dangers for the free-world nations.</p>
<p>One is the danger of being divided in purpose, split apart on policies
requiring concerted action, and forced into competing among themselves
in circumstances which call for unified action.</p>
<p>The other is the danger of being deceived about what is going on
in East-West trade and what’s behind it. This danger grows partly
out of the complexity of economic relations and the fact that the
Soviet system and approaches to economic relations and peace in general
are so different from ours. It grows partly out of the fact that
deception is intentionally practiced by the Soviet Communists.</p>
<p><span class="pagenum"><a name="Page_41" id="Page_41">[Pg 41]</a></span></p>
<p>On the other hand, the Soviet-bloc governments have limitations
in trying to accomplish their purposes. The free world, aware of
its own strengths, can meet a great part of the challenge by working
together not only to understand the Soviet bloc’s general objectives
and goals, but also to identify the specific actions which the bloc
chooses at any given time to accomplish them. In this way the free
world has the opportunity of segregating the harmful from the
helpful.</p>
<p>We of the free world will neither be deceived nor divided if we
keep ourselves armed with facts and work as a team.</p>
<p><span class="pagenum"><a name="Page_42" id="Page_42">[Pg 42]</a></span></p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_43" id="Page_43">[Pg 43]</a></span></p>
<h2 class="break"><a name="CHAPTER_V" id="CHAPTER_V">CHAPTER V</a></h2>
<p class="chaptertitle">
U. S. Policy on Strategic Trade Controls</p>
<p>The economic and trading activities of the Soviet empire require
close and continual study by free governments, but Soviet actions alone
do not determine free-world policies.</p>
<p>Let us be perfectly clear on this point. The theme of the early chapters
of this report has been the Soviet “trade offensive” and its background,
just as the theme of the third semiannual Battle Act report
was the enforcement of free-world strategic trade controls. The selection
of the theme, however, should not be taken to mean that Soviet
trading activities are the only factor that free-world nations must take
into account when they consider what economic defense policies to
maintain in the interest of their security.</p>
<p>In 1953 certain other considerations were demanding the careful
attention of the agencies of the United States Government that are
responsible for economic defense.</p>
<h3>The Background</h3>
<p>One of these considerations was the probability that the world
faced a long period of tension short of general war, though with the
ever-present risk of war. In such a period, no matter how long it
might last, it would be essential for the free nations to remain strong
and alert, to move together in whatever steps were necessary for military
or economic defense, and at the same time to keep open the paths
that might lead to a sounder basis for peace.</p>
<p>Another factor of historic significance was the massive upswing
in the strength of the free world. Western Europe, especially, had
moved into a far stronger position, both militarily and economically,
than it had occupied a few years earlier. This gave the West greater
bargaining power and it reduced the dangers of undue economic
dependence on Soviet-bloc trading partners.</p>
<p>As Western Europe grew stronger the need for economic assistance
from the United States declined. Although military aid continued
in a big way, economic aid began to taper off.</p>
<p>Accompanying the increase in Western economic strength was a
general shift in the free world from a “seller’s market,” in which<span class="pagenum"><a name="Page_44" id="Page_44">[Pg 44]</a></span>
goods were scarce and sellers had a relatively easy time finding buyers,
to a “buyer’s market,” in which buyers generally could pick and
choose. Some of the free countries had produced themselves into
surpluses of some commodities—or had built up surplus capacity and
needed additional markets in order to keep their industries prosperous.</p>
<p>This change brought more and more pressure from people in free
countries to carry on increased trade with the Soviet bloc. Some
groups had been clamoring for this all along, and had helped spread
the time-worn Communist propaganda that a friendly and peace-loving
“big brother” in Moscow was ready and waiting with an unlimited
paradise of peaceful trade and that the only obstacle to its
attainment was the strategic trade controls of the West. But now
large numbers of <em>anti</em>-Communist businessmen, even though many of
them were aware that the Communist propaganda was false and that
Soviet policies had always been the prime deterrent to a large and
peaceful commerce, felt that some increase in East-West trade would
be beneficial as a supplement to their much greater trade in the free
world. They recognized the limitations of the Soviet bloc as a stable,
long-term trading partner, yet saw no reason why an expansion
should not be sought.</p>
<p>This attitude was stimulated by the Korean truce of July 27, 1953.
It was also stimulated by the gestures that the Soviet Union began
making in the direction of livelier East-West trade.</p>
<p>Governments in the free world tended increasingly to the view that
some revisions in Western controls might be made without sacrifice of
security interests.</p>
<h3>Basic Policy Reaffirmed</h3>
<p>The new administration in Washington, taking account of such
considerations as those, and wishing to be sure that United States
policy was the most effective that could be devised, began a thorough
review of the economic defense policy of the United States in the
spring of 1953.</p>
<p>This policy review was completed around the beginning of August.
The third semiannual Battle Act report, which was published last
September 28 and which covered the first half of 1953, stated that
the conclusions of the review “will be reflected in the economic defense
actions of this Government during the months to come.” In the present
report, which covers the second half of 1953, it is possible to give
more information about those conclusions.</p>
<p>As a result of the policy review <i>the basic economic defense policy
of the United States was reaffirmed</i>. There were, however, some
shifts of emphasis—with respect to trade with the Soviet bloc in
Europe—designed to make the basic policy more effective. We shall<span class="pagenum"><a name="Page_45" id="Page_45">[Pg 45]</a></span>
discuss those shifts presently, but first let’s summarize the basic policy
as it has existed throughout the 6 months covered by this report.</p>
<p>This basic policy of the United States on East-West trade rested on
the following principles:</p>
<ol>
<li>Mutual security can best be advanced by continued increase
in the political, economic and military strength and cohesion of
the free nations relative to that of the Soviet bloc.</li>
<li>The free nations should not furnish a potential aggressor
with goods which directly and materially aid its war industry and
military buildup.</li>
<li>The free world may derive a net security advantage out of
some East-West trade.</li>
<li>Security export controls should be applied on a selective
basis, except in the case of military aggression, when a policy of
complete embargo may be in order.</li>
</ol>
<p>In accordance with those principles the United States has long been
exercising certain controls over its own trade. Here is a short description
of those controls:</p>
<p><b>United States exports to Soviet bloc in Europe</b>: Not prohibited
entirely, but limited to clearly nonstrategic goods.</p>
<p><b>United States imports from Soviet bloc in Europe</b>: Not prohibited,
except for certain types of furs.</p>
<p><b>United States shipping to Soviet bloc in Europe</b>: Not prohibited,
if carrying properly licensed goods.</p>
<p><b>United States exports to Communist China and North Korea</b>:
Prohibited.</p>
<p><b>United States imports from Communist China and North
Korea</b>: Prohibited. (Some licenses were issued, though not recently,
for goods needed in United States military stockpiles and in special
hardship cases.)</p>
<p><b>United States shipping to Communist China and North Korea</b>:
Prohibited.</p>
<p>As for the trade of the rest of the free world with the Soviet bloc,
the policy of the United States was set forth in the Battle Act (the
text of which is at the end of this report) and in certain executive directives.
The policy was not to prevent all East-West trade but to cooperate
with other free-world countries in a system of <em>selective</em> and
flexible controls. The aim was to prevent Soviet-bloc countries from
obtaining items that would contribute significantly to their warmaking
power, and to insure that the trade which did go on served the real
economic and security interests of the West.</p>
<p>Ever since the Communist aggression in Korea in 1950, the Far East
has presented a policy problem different from the problem of controlling
shipments to the bloc in Europe. The official position of the<span class="pagenum"><a name="Page_46" id="Page_46">[Pg 46]</a></span>
United States Government—both before and after the 1953 policy
review—was that the current levels of controls by the United States
and free world over shipments to Communist China and North Korea
should be maintained. Later on in this chapter we shall report on
what happened in the China trade during the last half of 1953.</p>
<h3>The New Direction of Policy</h3>
<p>So much for the basic policy. Now for the shifts in emphasis that
took place in United States economic defense policy toward the Soviet
bloc in Europe during the 6 months covered by this report.</p>
<p>It was determined that the system of the free-world controls that
had been developed during the last 4 years substantially satisfied the
objectives of retarding the buildup of Soviet warmaking power and
strengthening the free world relative to the Soviet bloc. The effort
to extend the control lists appeared to be reaching the point of
diminishing returns. It was decided not to pursue an extension of the
lists to many other items—though items would always be added occasionally
because of changed conditions or new information.</p>
<p>On the other hand the Government recognized a need for simplifying
the lists and removing or downgrading items, which, in the light
of current information, were no longer deemed to be so important.
The Government believed that much could be done in the months to
come, if done carefully and with due regard for security, to adjust
the controls to a “long-haul” basis. (Developments in the first half
of 1954 will be reported in the next Battle Act report.)</p>
<p>In general, it was decided to concentrate on seeking more effective
control of those items which, if shipped, would make a significant
contribution to Soviet warmaking power.</p>
<p>The main thrust from the United States toward improvement of the
control system, it was decided, would be in the field of implementation
and enforcement of controls. Notable deficiencies existed in that field.
To overcome them the free nations would need to keep improving their
techniques, and would need closer international collaboration and
pooling of information.</p>
<p>The new direction also took into account, even more than ever, the
economic and political problems of free-world countries. Free-world
unity was so vital, and the economic health of free nations so important
to the defense of free institutions, that problems of our allies
deserved to be given great weight in determining the actions of this
Government in the East-West trade field. This was not a new concept,
but this Government felt that such problems needed to be discussed
among the free countries more than in the past.</p>
<p><span class="pagenum"><a name="Page_47" id="Page_47">[Pg 47]</a></span></p>
<p>In setting the new direction the Government recognized:</p>
<ul class="nobullets">
<li> (1) that maintaining commercial ties between the free world
and the Soviet bloc—compatible with the security requirements
of the free world—may have positive advantages during the
present period of tension;</li>
<li> (2) that there are, however, risks that trade may in some cases
lead to undue reliance on the Soviet bloc as a trading partner;</li>
<li> (3) that it is important to encourage trade within the free
world, including the entry of commodities into the United States,
by reducing trade barriers, especially when the effect of such
action would be to decrease the reliance of the free world on the
Soviet bloc.</li>
</ul>
<p>Those were among the highlights of the new direction. As explained
before, the basic economic defense policy was not altered.</p>
<h3>Reviewing the Control Lists</h3>
<p>In the light of this basic policy, and its new direction, the Government
agencies responsible for economic defense were engaged in
certain projects during the period covered by this report.</p>
<p>One of the most important of these projects was the review of the
control lists. This review was a complex and time-consuming operation,
which continued into 1954.</p>
<p>It is easy for the public to become confused about control lists,
not only because of their necessarily secret nature, but also because
there are so many lists, serving different purposes.</p>
<p>The United States has had three main lists for its own exports:</p>
<p>The munitions list, compiled and administered by the Department
of State; the atomic energy list, compiled and administered by the
Atomic Energy Commission; and a much longer list, covering all
other controlled items, which is compiled and administered by the
Department of Commerce.</p>
<p>In addition there are the Battle Act lists. They relate to potential
exports from other countries to the Soviet bloc. They include those
primary strategic items which we believe the other free-world countries
should embargo in the interest of mutual security.</p>
<p>Then there are lists consisting of those items—at varying levels
of control—which the cooperating free-world nations have accepted
as a part of their informal coordination of controls.</p>
<p>All of these lists are subject to a continual process of review. But
as a part of the new direction in United States policy, this continuing
review process was broadened into an intensive reappraisal. Specialists
from several Government agencies were reevaluating all our
listings in terms of sharper and more meaningful criteria, and in<span class="pagenum"><a name="Page_48" id="Page_48">[Pg 48]</a></span>
the light of all the new relevant technical and intelligence information
that could be assembled.</p>
<p>This review would furnish the basis for appropriate adjustments
and for United States discussions with other governments in 1954
concerning the coverage of export controls.</p>
<h3>East-West Trade: Road to Peace</h3>
<p>It is a part of the economic defense policy of the United States
never to lose sight of the vital need to keep open all paths that might
lead to a sounder basis for peace in the world.</p>
<p>We not only recognize the economic benefits that free-world nations
can get from an expanding East-West trade in peaceful goods; we
also bear in mind the possibility that trade contacts can help to improve
relations among peoples.</p>
<p>But in hoping for and working toward that end, we are not thereby
accepting the belief that international trade inevitably and automatically
leads toward peace. Hitler’s Germany expanded its foreign
trade right up to the outbreak of World War II. We must view with
skepticism the Communist propaganda line on trade and peace, for
we know what their trading objectives and methods are. East-West
trade as now constituted is carried on not with private individuals in
the Soviet bloc but with agencies of Soviet-bloc governments.</p>
<p>International trade in general can be a broad highway toward better
living standards and more peaceful relations. It has served humanity
well. There should be more of it. But it takes two to trade, and trade
is not necessarily a road to peace unless both parties wish to make it so.</p>
<h3>Trade Within the Free World</h3>
<p>Toward the close of the 6-month period under review, the President’s
Commission on Foreign Economic Policy (Randall Commission)
was hard at work. There was a great amount of public
discussion, continuing into 1954, concerning ways in which the United
States and other free-world countries could eliminate or reduce the
obstacles that hinder the international exchange of goods.</p>
<p>The Commission, issuing its report in January, had much to say
on the reduction of trade obstacles.</p>
<p>The Commission also included a section on East-West trade, recommending
that the United States not object to more trade in peaceful
goods between Western Europe and the European bloc.</p>
<p>These two subjects, trade liberalization and East-West trade, are
connected with each other. When businessmen in free-world countries
are hindered—either by trade barriers or other artificial causes—from<span class="pagenum"><a name="Page_49" id="Page_49">[Pg 49]</a></span>
selling products in other free-world countries, they are more
prone to seek markets in the Soviet bloc.</p>
<p>To a certain extent this aggravates the problem of maintaining
adequate strategic trade controls and the problem that some free-world
countries have of avoiding undue dependence on the Soviet bloc.</p>
<p>It would be impractical to seek the elimination of all trade restrictions
within the free world but it is important to reduce unjustifiable
barriers and it is also important to take whatever other steps are
possible to develop new markets and new sources of supply.</p>
<p>To bring alternative markets and supplies into being is not an overnight
task but it must be done. It means the reduction of many
restrictions in the United States, thus allowing more goods to come
in from our friends and allies. It means a similar loosening of restrictions
by other free nations. It means more and better economic
integration among the European countries. It means steady advancement
in the economic development of the underdeveloped areas of
the world.</p>
<p>All those things are important for many reasons. East-West trade
is one aspect of the matter. The United States Government recognizes
that hindrances to the exchange of goods within the free world
do have a definite relationship to the international system of strategic
trade controls.</p>
<h3>The China Trade Falls Off</h3>
<p>This report so far has concerned itself almost entirely with trade
between the free world and the Soviet bloc in Europe. Now it is
time to shift our attention to the China trade.</p>
<p>During the 6 months under review, free-world trade with Communist
China fell far below the first half of the year. Free-world
exports to Communist China from July through December are estimated
to have been $111.1 million, as compared with $158.9 million
in the first half of 1953. This meant that shipments in the report-period
fell below even the extremely low level of the first half of 1952.</p>
<p>The result of this decline in shipments to Communist China was
that the estimated total for all of 1953 was $270 million, only a slight
rise in value from the 1952 exports of $256.5 million
<a name="FNanchor_1" id="FNanchor_1"
href="#FOOTNOTE1" class="fnanchor">1</a>.
A larger rise
had been foreseen. The last Battle Act report to Congress, <cite>World-Wide
Enforcement of Strategic Trade Controls</cite>, pointed out: “If free-world
exports continued at the same rate as that of the first 3 or 4<span class="pagenum"><a name="Page_50" id="Page_50">[Pg 50]</a></span>
months of the year—and that is not at all certain—the 1953 total
would be around $375 million.” It actually seems to have been about
$100 million short of that.</p>
<p>Free-world imports from Communist China also dropped in the
second half of 1953, though not so sharply as exports. They amounted
to $198.4 million in the second half, according to a preliminary estimate,
compared with $226.6 million in the first half of the year. This
brought the estimated annual total of imports to $425 million in 1953,
as compared with $365.8 million in 1952.</p>
<p>It was true that in spite of the decline in the latter part of the
year, some countries were able to sell more goods to the Chinese Communists
in 1953 than they had in 1952. For example, exports of Western
Germany rose from $2.8 million in 1952 to $25 million in 1953,
in line with the general rebirth of German foreign trade. Exports
of France rose from $3.3 million to $12.4 million, and Japan from
half a million dollars to $4.5 million. Exports from the United
Kingdom rose from $12.8 million to $17.5 million. On the other hand
exports from the British Colony of Hong Kong, the traditional gateway
of commerce to and from the mainland of China, fell so drastically
in the second half of 1953 that the Hong Kong total for <em>all</em> of
1953 was only $94.6 million, or little more than the $91 million of the
previous year. And the Communists slashed their buying of Pakistan
cotton, which had come to about $84 million in 1952, down to about
$7 million in 1953.</p>
<hr class="footnote" />
<p class="footnote">
<a name="FOOTNOTE1" id="FOOTNOTE1"
href="#FNanchor_1" class="fnanchor">1</a>
These 1952 and 1953 figures are adjusted to exclude Swiss watches,
which appear in Swiss official statistics as exports to China, but
which actually went to the British Crown Colony of Hong Kong and were
reexported to other free-world countries. Switzerland, in reporting
its “China” trade, lumps together its trade with Communist China,
Nationalist China, and Hong Kong. The watches in question are believed
to amount to approximately $1 million a month, on the average.</p>
<h3>They Play by Their Own Rules</h3>
<p>Clearly the glittering prospect of a vast and lucrative trade with
the Chinese Communists which had captured the imagination of
many Western traders was not materializing.</p>
<p>The China Association, a British trade organization, said in
December: “There is no doubt but that the potentialities have been
greatly exaggerated in the public mind, partly as a result of the
superficial successes of the various unofficial trade missions which
have paid visits to Peking this year. This overeagerness has unfortunately
been reflected in an increasing severity of the terms which
China now demands.”</p>
<p>Information about the increasing severity of the trade requirements
which Communist China was trying to impose upon the free
world came from all sides in the last half of 1953. Those terms would
hardly suggest a genuine interest in normal and expanding trade
relations.</p>
<p>When the Chinese Communists sell, they demand a confirmed letter
of credit in the hands of their own bank before they will ship the
goods. They collect payment as soon as they have loaded the goods<span class="pagenum"><a name="Page_51" id="Page_51">[Pg 51]</a></span>
on a ship. They present a Communist Chinese Government certificate
of inspection against which the buyer has no recourse if he finds—weeks
or months later—that the quality of the goods is below specification.</p>
<p>One who sells to Communist China is asked to follow a very different
set of rules. He ships his goods and waits until they have
arrived in Communist China, have been inspected by Communist
Chinese Government inspectors, and are in the hands of the buyers,
before he can collect his money. In the meantime he extends credit
without interest, immobilizing the capital he had invested in the
cargo, freight, and insurance, and is forced to accept claims resulting
from inspection of his goods in Communist China.</p>
<p>No doubt exceptions to these rules are still being granted to some
Western traders, for the rules are so remote from long-recognized international
trading practices that many firms would naturally balk
at them. But there is no doubt that the unconventional and frustrating
practices of the Chinese Communists have interfered seriously
with the amount of commerce and have disillusioned many who saw
an almost unlimited market in China’s multitudes.</p>
<h3>United States Policy on the China Trade</h3>
<p>As mentioned before, the policy of the United States throughout
the 6 months under review was to continue its total embargo on all
exports—strategic or nonstrategic—to Communist China and North
Korea, which were aggressors, and labeled as such by the United
Nations. Rumors heard from time to time in various countries, to
the effect that the United States had decided to relax its embargo
or was under irresistible pressure to do so, and that American cars
were reaching the Chinese mainland by way of Japan, were completely
untrue.</p>
<p>The position of the United States throughout the review period
was also that the free-world embargo on strategic goods to Communist
China—an embargo much more sweeping than that applying
to the European bloc—should be maintained. Other free governments
took the same position, and the embargo continued in force.
Such relaxations as took place in controls were changes that did not
affect the multilateral embargo. One example was the change in the
control of antibiotics and sulfonamides. The nations which carry
on trade with Communist China had been controlling those drugs,
while hostilities continued in Korea, by limiting the quantities
shipped; the quotas assumed by the various nations were scheduled
to expire on December 31, 1953, and were permitted to expire on
schedule. Another example was the relaxation by Japan on certain<span class="pagenum"><a name="Page_52" id="Page_52">[Pg 52]</a></span>
items that had been under embargo by that country—but these were
items that the other countries were not embargoing. The same was
true of the United Kingdom’s decision to permit the shipment of light
passenger automobiles.</p>
<p>Though the policies of other major free governments regarding trade
with Communist China have not been identical with our own, the
United States has not attempted—and will not attempt—to bring
about conformity through coercion.</p>
<p>This is true of all of our relations with other countries, not merely
our relations with them on the issue of Communist China.</p>
<p>Leaders of this Government forcefully reaffirmed that principle
during the period we are reviewing.</p>
<p>Secretary of State John Foster Dulles said in a statement on
December 1:</p>
<blockquote>
<p>“The tide of events has made our Nation more powerful but I
believe that it should not make us less loyal to our great American
traditions; and that it should not blur our dedication to the truths,
expressed in our Declaration of Independence, that we owe a
respect to the opinions of others.</p>
<p>“Today it is to our interest to assist certain countries. But
that does not give us the right to try to take them over, to dictate
their trade policies and to make them our satellites.</p>
<p>“Indeed, we do not want weak or subservient allies. Our friends
and allies are dependable just because they are unwilling to be
anyone’s satellites. They will freely sacrifice much in a common
effort. But they will no more be subservient to the United
States than they will be subservient to Soviet Russia.</p>
<p>“Let us be thankful that they are that way, and that there still
survives so much rugged determination to be free.”</p></blockquote>
<p>On December 2, President Eisenhower endorsed the declaration of
the Secretary of State and said this:</p>
<blockquote>
<p>“The easiest thing to do with great power is to abuse it—to use
it to excess. This most powerful of the free nations must not
permit itself to grow weary of the processes of negotiation and
adjustment that are fundamental to freedom. If it should turn
impatiently to coercion of other free nations, our brand of coercion,
so far as our friends are concerned, would be a mark of the
imperialist rather than of the leader.</p>
<p>“What America is doing abroad in the way of military and economic
assistance is as much a part of our own security program
as our military efforts at home. We hope to be able to maintain
these overseas elements of our security program as long as our
enlightened self-interest requires, even though we may, and<span class="pagenum"><a name="Page_53" id="Page_53">[Pg 53]</a></span>
probably we always will, have various differences of opinion with
the nations receiving our aid.”</p></blockquote>
<p>On that same day, Admiral Arthur Radford, Chairman of the Joint
Chiefs of Staff, speaking in general of America’s leadership role in
the world, said in a speech at West Point:</p>
<blockquote>
<p>“Relationships between members of coalitions are never simple,
particularly in coalitions as large as ours of the free world. The
smaller nations expect, and are entitled, to exercise their sovereignty
and independence. Our leadership therefore involves
self-restraint if our objectives are to be achieved by consent,
rather than through the pressure techniques imposed by the Soviet
on her satellites.”</p></blockquote>
<p>There is one commodity that is not on any list but is more important
than all others, and that is the cement that binds the free world
together.</p>
<p><span class="pagenum"><a name="Page_54" id="Page_54">[Pg 54]</a></span></p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_55" id="Page_55">[Pg 55]</a></span></p>
<h2 class="break"><a name="CHAPTER_VI" id="CHAPTER_VI">CHAPTER VI</a></h2>
<p class="chaptertitle">
The Battle Act and Economic Defense</p>
<p>The Mutual Defense Assistance Control Act of 1951, usually known
as the Battle Act after Representative Battle of Alabama, established
a general framework of policy within which the executive branch
takes actions that meet current conditions.</p>
<p>This law reinforced the system of international strategic trade
controls that was in existence prior to its enactment. It maintains
a close link between United States foreign aid and strategic trade
controls. It also recognizes the necessity of international cooperation
in the control effort, and it aims toward strengthening the free
world as well as impeding the military ability of nations threatening
our security.</p>
<h3>Battle Act Functions</h3>
<p>Administering the Battle Act is one of the responsibilities of the
Director of the Foreign Operations Administration, with the help of
a Deputy Director for Mutual Defense Assistance Control (MDAC).
The Director’s responsibilities under the Act include the following:</p>
<ol>
<li>Determining which commodities should be embargoed in
order to effectuate the purposes of the Act.</li>
<li>Continually adjusting the embargo lists to current conditions.</li>
<li>Advising the President on whether or not United States
aid should be continued to a country that has knowingly permitted
the shipment of embargo-list items to the Soviet bloc.</li>
<li>Making a continuing study of the administration of export
control measures undertaken by foreign governments and reporting
to Congress at least every 6 months.</li>
<li>Making available technical advice and assistance on export
control procedures to any nation desiring such cooperation.</li>
<li>Coordinating United States Government activities which
are concerned with security controls over exports from other
countries.</li>
</ol>
<h3>The Money and the Manpower</h3>
<p>The budget of Mutual Defense Assistance Control (MDAC) for
the present fiscal year is $1,078,000. As of December 31, 1953, the<span class="pagenum"><a name="Page_56" id="Page_56">[Pg 56]</a></span>
MDAC staff consisted of 29 persons, including clerical employees.
In addition, there were 111 persons on other United States Government
agency staffs, both in Washington and overseas, who were performing
Battle Act functions and were paid out of MDAC funds.
These 111 were in the following agencies:</p>
<table class="narrow" id="MDAC" summary="MDAC Employees">
<tr><td class="noborder indent0">Commerce Department</td><td class="noborder">32</td></tr>
<tr><td class="noborder indent0">State Department</td><td class="noborder">43</td></tr>
<tr><td class="noborder indent0">Defense Department</td><td class="noborder">13</td></tr>
<tr><td class="noborder indent0">FOA (other than MDAC)</td><td class="noborder">23</td></tr>
<tr><td class="noborder indent0"></td><td class="noborder">——</td></tr>
<tr><td class="noborder indent0">Total</td><td class="noborder">111</td></tr>
</table>
<p>This brought the total personnel on the MDAC payroll to 140, as
compared with 115 on June 30, 1953.</p>
<p>Besides these 140 people, the four agencies listed above had still
others, paid from the agencies’ own funds, who were working at
least part of their time on similar functions (and generally were
engaged in such activities even before the Battle Act became law).</p>
<p><span class="pagenum"><a name="Page_57" id="Page_57">[Pg 57]</a></span></p>
<p><a name="CHART_3" id="CHART_3"></a></p>
<div class="figcenter" style="width: 500px;">
<img src="images/chart3.jpg" width="500" height="381"
alt="EDAC Structure" title="EDAC Structure" />
</div>
<h3>Meshing the Gears</h3>
<p>The Battle Act is a part of the economic defense program of the
Government. The economic defense program involves at least 10
agencies whose activities and interests have to be coordinated. The
coordination is accomplished through the Economic Defense Advisory
Committee (EDAC). The chairman of EDAC is the FOA Deputy
Director for MDAC. The chart opposite this page shows what agencies
are members and how the EDAC structure is set up. In addition
the United States Information Agency has an observer on EDAC,
and economic defense matters are closely coordinated with USIA
for overseas information purposes.</p>
<p>The chart also shows that EDAC has an Executive Committee; it
handles the day-to-day operating and policy problems of the economic
defense program. EDAC advises the Director of the Foreign Operations
Administration and the Secretary of State who are charged
with coordinating the implementation of the program of economic
defense matters including the control of strategic shipments from the
free world to the Soviet bloc.</p>
<p>Each agency that has a part in the economic defense program
brings its own particular point of view to the discussions which constantly
go on in the EDAC structure. For example, the Department
of State is the agency that coordinates the overall foreign policy of
the Government and deals directly with other countries; hence, that
Department is able to speak authoritatively about the vital problems
involved in maintaining good relations and close cooperation among
the free nations, and concerning the most feasible and effective means<span class="pagenum"><a name="Page_58" id="Page_58">[Pg 58]</a></span>
of exerting United States influence in the implementation of United
States policies. The Department of Defense, being the agency primarily
concerned with military defense, brings to the discussions its
own expert knowledge of military matters and contributes valuable
advice on the military aspects of the problems that come up. The
Department of Commerce brings its specialized knowledge of commodities
and its experience in the administration of controls over the
exportation of goods from the United States. The Foreign Operations
Administration, besides administering the Battle Act, brings
the point of view of the program of foreign assistance and the economic
factors which must be taken into account. The Treasury
Department is the authority on foreign-assets control, the Atomic
Energy Commission on the significance and control of all atomic-energy
materials, and so on through the list.</p>
<p>All these viewpoints and all these special areas of expert knowledge
and experience are necessary to a well-rounded economic defense
program. Each agency, while discharging its obligation to make its
own special contribution to policy, is perfectly well aware that it is
only one of the participants, and that the other agencies have legitimate
points of view and valuable contributions to make. It is natural
and inevitable that these agencies should not approach every problem
of economic defense with identical views. But when the problem has
been thoroughly considered, and all viewpoints taken into account, a
decision is made on the basis of the overriding security interest of the
country, and that decision then becomes the policy of the Government
as a whole, respected by each agency regardless of the specialized
views which it might have expressed in the discussions.</p>
<h3>Improving the Machinery</h3>
<p>Organizational changes made in the United States economic defense
program during the 6 months under review included the following:</p>
<p> 1. <i>Establishment of a Security Trade Controls unit within the
United States Regional Organization at Paris.</i> This unit represents
the United States in the informal international committee
known as the Consultative Group (CG) and its subordinate working
bodies, the Coordinating Committee (COCOM) and the China Committee
(CHINCOM).<a name="FNanchor_2" id="FNanchor_2"></a><a href="#FOOTNOTE2" class="fnanchor">1</a>
It also performs certain Battle Act duties
in Europe. These two functions had previously been handled by
separate staffs. The head of the new amalgamated office is responsible
jointly to the Department of State and the Director of the Foreign
Operations Administration.</p>
<p> 2. <i>Establishment of a Joint Operating Committee (JOC) in Washington.</i><span class="pagenum"><a name="Page_59" id="Page_59">[Pg 59]</a></span>
This development grew out of the fact that while EDAC is
advisory on Battle Act matters and on economic defense in general,
another interagency structure known as the Advisory Committee on
Export Policy (ACEP) advises the Secretary of Commerce on controls
on exports from the United States. EDAC and ACEP rely on
basically similar information and upon the same general body of
experts throughout the Government. Accordingly, JOC was created
to analyze and recommend the strategic rating of commodities and
the levels of control which might be exercised by the United States
and advocated by the United States in international discussions. JOC
is thus the central point of United States commodity review activities
in this field, and there are no overlapping or competing activities of
this nature. The chairman of JOC is a Commerce Department representative
who is also a regular member of the EDAC Executive
Committee. The membership of JOC is made up of the principal
agencies which sit on both ACEP and EDAC. The new arrangement
has proved itself in practice.</p>
<hr class="footnote" />
<p class="footnote" id="FOOTNOTE2">
<a class="fnanchor" href="#FNanchor_2">1</a>
See Third Semiannual Battle Act Report, ch. II.</p>
<h3>The Termination-of-Aid Provision</h3>
<p>The Battle Act forbids United States military, economic, and financial
assistance to any country that knowingly permits the shipment
to the Soviet bloc of items listed for embargo under the Act, except
that if the items are not munitions nor atomic energy materials the
President may direct the continuance of aid “when unusual circumstances
indicate that the cessation of aid would clearly be detrimental
to the security of the United States.”</p>
<p>On August 1, 1953, the President notified the Congress that he had
directed the continuance of aid to France, the Federal Republic
of Germany, Norway, and the United Kingdom, because the cessation
of aid would have clearly been detrimental to United States security.
Even though this presidential action took place in the second half of
1953 it was covered in the last Battle Act report, entitled <cite>World-Wide
Enforcement of Strategic Trade Controls</cite>, and the texts of the letters
that went to the Congress were reprinted as appendix B of that
document, pages 73-77.</p>
<p>There were no further Battle Act determinations to continue aid
during the 6 months covered by the present report. (Another group
of determinations went to the Congress on March 5, 1954, and the
texts of those letters will be reprinted in the next Battle Act report.)</p>
<p>During 1952 and 1953, the first 2 years in which the Battle Act was
in force, the total amount of shipments of Battle Act embargo items
knowingly permitted by countries receiving United States aid was in
the neighborhood of $15 million. Of this amount, 74 percent consisted
of “prior commitments”—that is, commitments made before the<span class="pagenum"><a name="Page_60" id="Page_60">[Pg 60]</a></span>
Battle Act embargo lists went into effect on January 24, 1952. None
of the shipments were arms, ammunition, implements of war, or atomic
energy materials. Only $98 of the total went to Communist China,
all the rest to the European bloc. The $15 million may be
compared with a total of $2.7 <i>billion</i> of exports of all descriptions
from the entire free world to the Soviet bloc during the same 2 years.</p>
<h3>Miscellaneous Activities</h3>
<p>As usual, a wide range of activities relating to the Battle Act and
economic defense was carried on during the last half of 1953.</p>
<p>The intensive United States review of the control lists has been
mentioned in chapter V.</p>
<p>The United States Government continued to increase its emphasis
on seeking improvements in the free-world systems for preventing
illegal diversions of strategic goods. This problem involves goods of
free-world origin which start out to friendly destinations but are
illegally diverted en route to destinations behind the Iron Curtain.
Our Government: (1) set up improved machinery in Washington for
collection and coordination of information, in order to increase the
effectiveness of our participation with other countries in the enforcement
program, and (2) sought to work out better intergovernmental
machinery to deal with diversions.</p>
<p>Our Government also intensified its efforts to analyze current trade
patterns between East and West, including the large number of trade
agreements concluded between free-world nations and Soviet bloc
nations.</p>
<hr class="tb" />
<h3>Summary of the Report</h3>
<p>This leads us back to the earlier chapters of this report, which may
be summarized as follows:</p>
<p>In chapter I, Stalin’s Lopsided Economy, we looked at the basic
economic structure of the Soviet Union. Beginning in the 1920’s, the
Bolsheviks deliberately concentrated on an industrial-military
buildup, at great cost to their peoples. After the war, the same
pattern was forced upon the European satellite countries. Trade was
reoriented away from the West. That did not mean that the bloc
could do without Western goods, but the goal was to obtain those
imports that would help the bloc become more powerful and less
dependent on the free world. The Kremlin also sought to use trade
to divide the Western powers and to increase the reliance of free-world
nations on the bloc. These Soviet policies—not Western strategic<span class="pagenum"><a name="Page_61" id="Page_61">[Pg 61]</a></span>
controls—were the main causes of the low level of East-West trade
as compared with prewar. Stalin, shortly before his death, made it
clear that he welcomed the establishment of a divided trade world—he
saw it as a boon to communism and a blow to the non-Communist
nations.</p>
<p>In chapter II, The New Regime and the Consumer, we described
the new economic courses announced by the Soviet bloc governments
after Stalin’s death. They made a great fanfare about providing
more consumer goods to the people and improving the neglected agricultural
sectors. But their steps did not go very far, and the purpose
was to benefit the state and not the people. They apparently
were trying to ease internal pressures—especially in the satellites—by
opening the valves a little, as they had done before. But they
did not alter the basic war orientation of their economies and they
pressed on with the industrial-military buildup.</p>
<p>In chapter III, The Kremlin’s Recent Trading Activities, we reviewed
the so-called trade offensive—the various Soviet activities
of 1953 and the early part of 1954 which seemed to show a livelier
interest in East-West trade. The U.S.S.R. concluded more trade
agreements, ordered consumer goods at a somewhat brisker rate, but
also expanded its efforts to buy ships and showed plainly that its
principal interest was still centered on the kind of materials that
would foster industrial expansion. To help pay for imports, the
Communist planners put manganese, oil and gold on the market in
larger quantities than in recent years, though history showed that
they had done the same thing in the past when it served their purposes.
They also tried to increase their influence in Latin America and Asia.</p>
<p>In chapter IV, What’s Behind It All, we examined the motives and
the goals of the Soviet planners in all these recent trading activities.
Oversimplified explanations should be avoided. Their actions are
not motivated by a pursuit of peace—at least not peace as the West
knows the term. Their motives are mixed. In changing circumstances
they are seeking effective ways of accomplishing the same
traditional objectives of feeding the economy—especially the heavy
industrial base—and of weakening the free world. The free world
is strong, and if free nations refuse to be divided or deceived—if they
work shoulder to shoulder to prevent the Soviet bloc from getting the
advantage—they can trade with the Soviet bloc on terms that bring
benefits to the free world.</p>
<p>In chapter V, U.S. Policy on Strategic Trade Controls, we outlined
the factors involved in setting policy. Not merely because of Soviet
activities but also because of the vast upsurge of free-world production
and other considerations, 1953 brought a thorough review of
United States policy. The basic policy was reaffirmed, but shifts in
emphasis were made to meet current conditions and establish controls<span class="pagenum"><a name="Page_62" id="Page_62">[Pg 62]</a></span>
on a long-haul basis. Policy on the China trade did not change
at all during the 6 months under review. Free-world trade with
Communist China dropped sharply in that period, partly because
of unequal trading terms that the Chinese Communists were trying
to impose upon free-world traders. Finally, the United States reaffirmed
its traditional policy of treating its friends and allies with
respect. In the words of President Eisenhower, “this most powerful
of the free nations must not permit itself to grow weary of the processes
of negotiation and adjustment that are fundamental to freedom.”</p>
<p><span class="pagenum"><a name="Page_63" id="Page_63">[Pg 63]</a></span><br />
<span class="pagenum"><a name="Page_64" id="Page_64">[Pg 64]</a></span></p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_65" id="Page_65">[Pg 65]</a></span></p>
<h2 class="break"><a name="APPENDIX_A" id="APPENDIX_A">APPENDIX A</a></h2>
<p class="chaptertitle">
Trade Controls of Free World Countries</p>
<p>This appendix summarizes, in accordance with section 302 (b) of the Battle
Act, the trade control measures of most of the important mercantile countries
of the free world, as well as of several others for which there is new information
to report. These descriptions supplement the main text of this report and
similar appendices contained in previous Battle Act reports.</p>
<p>The main features of the trade-control systems of most free-world countries
were originally established to deal with such problems as foreign-exchange
control, conservation of goods in short supply, and directing foreign trade to
particular currency areas. For most countries security trade controls have
been inlaid in these general economic controls and are exercised through them,
using the same basic techniques of export licensing and customs inspection as
in export control for other purposes. Thus they are closely connected administratively
with them.</p>
<p>The details of security trade controls of almost all countries have a security
classification. Thus these descriptions must, in a public report, be presented
in somewhat general terms.</p>
<p>To avoid duplication, this appendix does not include countries which were
included in the appendix of previous Battle Act reports and for which there is
no substantial new information on security trade controls which can be reported
publicly. Summaries of export controls employed by Thailand and Yugoslavia
are given on pages 64 and 69, respectively, of the third Battle Act report. The
second Battle Act report contains summaries pertaining to Bolivia, Colombia,
Ecuador, Panama and Peru on pages 64-66, and to Indo-China, The Philippines
and Lebanon on pages 66, 68 and 71, respectively. Summaries concerning
Argentina, Brazil, Chile, Mexico and Venezuela are contained in pages 62-66
of the first Battle Act report, as well as Austria (p. 66), Iceland (p. 70),
Afghanistan (p. 75), Burma (p. 76), China (Formosa) (p. 76), Federation of
Malaya (p. 81), Iraq (p. 87), colonial Africa (pp. 91-97). All of the summaries
mentioned above are still substantially up to date.</p>
<p>Covered in this appendix, in alphabetical order, are the following:</p>
<table class="toc" summary="Free world countries with trade controls">
<tr><th class="tdc noborder"><i>Country</i></th>
<th class="tdc noborder"><i>Page</i></th></tr>
<tr><td class="tdl noborder"><a href="#BELGIUM-LUXEMBOURG">Belgium-Luxembourg</a></td>
<td class="noborder">66</td></tr>
<tr><td class="tdl noborder"><a href="#CANADA">Canada</a></td>
<td class="noborder">67</td></tr>
<tr><td class="tdl noborder"><a href="#DENMARK">Denmark</a></td>
<td class="noborder">67</td></tr>
<tr><td class="tdl noborder"><a href="#EGYPT">Egypt</a></td>
<td class="noborder">68</td></tr>
<tr><td class="tdl noborder"><a href="#FRANCE">France</a></td>
<td class="noborder">69</td></tr>
<tr><td class="tdl noborder"><a href="#GERMANY">Germany (Federal Republic) and Western Berlin</a></td>
<td class="noborder">70</td></tr>
<tr><td class="tdl noborder"><a href="#GREECE">Greece</a></td>
<td class="noborder">71</td></tr>
<tr><td class="tdl noborder"><a href="#HONGKONG">Hong Kong</a></td>
<td class="noborder">72</td></tr>
<tr><td class="tdl noborder"><a href="#IRAN">Iran</a></td>
<td class="noborder">72</td></tr>
<tr><td class="tdl noborder"><a href="#ISRAEL">Israel</a></td>
<td class="noborder">74</td></tr>
<tr><td class="tdl noborder"><a href="#ITALY">Italy</a></td>
<td class="noborder">74</td></tr>
<tr><td class="tdl noborder"><a href="#JAPAN">Japan</a></td>
<td class="noborder">76</td></tr>
<tr><td class="tdl noborder"><a href="#KOREA">The Republic of Korea</a></td>
<td class="noborder">77</td></tr>
<tr><td class="tdl noborder"><a href="#NETHERLANDS">The Netherlands</a></td>
<td class="noborder">77</td></tr>
<tr><td class="tdl noborder"><a href="#NORWAY">Norway</a></td>
<td class="noborder">78</td></tr>
<tr><td class="tdl noborder"><a href="#PAKISTAN">Pakistan</a></td>
<td class="noborder">79</td></tr>
<tr><td class="tdl noborder"><a href="#PORTUGAL">Portugal</a></td>
<td class="noborder">79</td></tr>
<tr><td class="tdl noborder"><a href="#SINGAPORE">Singapore</a></td>
<td class="noborder">80</td></tr>
<tr><td class="tdl noborder"><a href="#TURKEY">Turkey</a></td>
<td class="noborder">80</td></tr>
<tr><td class="tdl noborder"><a href="#UK">United Kingdom</a></td>
<td class="noborder">81</td></tr>
<tr><td class="tdl noborder"><a href="#USA">United States of America</a></td>
<td class="noborder">83</td></tr>
</table>
<p><span class="pagenum"><a name="Page_66" id="Page_66">[Pg 66]</a></span></p>
<h3 class="center"><a id="BELGIUM-LUXEMBOURG">BELGIUM-LUXEMBOURG</a></h3>
<h4>License Requirements</h4>
<p>The basic legislation from which the present import-export control system in
Belgium has developed was a law of June 30, 1931, modified by the law of
July 30, 1934, which authorized in broad general terms the regulation of
Belgium’s foreign commerce to promote the general economic well-being of the
country. The convention with the Grand Duchy of Luxembourg on the 23d of
May 1935, amending the economic union convention of 1922, established also a
combined Belgo-Luxembourg Administrative Commission (the Commission Administrative
Mixte Belgo-Luxembourgeoise) and in this way provided a central
agency for coordinating the import and export licensing procedures of Belgium
and Luxembourg. Pursuant to the 1935 convention, when the appropriate agency
of either Government desires to modify or expand regulations pertaining to
import and export controls, the recommendation is discussed with the appropriate
agencies of the other Government; their agreement having been reached
the new policies are communicated to the Mixed Commission which then transmits
identical instructions to the Belgian Central Office of Licenses and Quotas
and the Luxembourg Office of Licenses. This procedure insures close coordination
of the import and export licensing operations of the two Governments in
order that the general economic welfare of both may best be served.</p>
<p>The control over exports effected by the requirement of export licenses is
reinforced by special controls applied at the time of the actual export of the
licensed merchandise. Submission to these special controls is required as a
previous condition to the obtaining of certain licenses, these special additional
controls being applied by reason of the special nature of the merchandise to be
exported or to assure the direct delivery of the merchandise to its foreign
destination.</p>
<p>Applicants for export licenses must make a declaration that they are familiar
with the conditions upon which licenses are issued and the regulations relative
to exchange controls, and that they accept these conditions and regulations
without reserve. The applicant also acknowledges that the licenses are not
transferable and that any irregularity in his application or utilization of the
license subjects him to possible refusals of any new export license applications
and may expose him to prosecution for a criminal offense. Exporters of products
whose final destination is controlled must sign an undertaking that their
exports are not to be reexported. In such cases, the exporter renounces his
right to obtain any subsequent export licenses in all cases for which nonreexport
declarations are required, if the present undertaking is evaded.</p>
<p>At the present time, licenses are not required for goods passing in transit
through Belgium, with the exception of arms and implements of war and atomic
energy items, as well as petroleum and its subproducts.</p>
<p><span class="pagenum"><a name="Page_67" id="Page_67">[Pg 67]</a></span></p>
<h4>Financial Controls</h4>
<p>Prior authorization is required for all buying and selling transactions abroad
by Belgian and Luxembourg residents. The exchange control is carried out by
the Belgo-Luxembourg Exchange Institute.</p>
<h4>Shipping Controls</h4>
<p>Belgium has taken action to prevent the carrying of strategic goods in
Belgian ships to Communist Chinese and North Korean destinations.</p>
<h3 class="center"><a id="CANADA">CANADA</a></h3>
<h4>Permit Requirements</h4>
<p>The Canadian approach to export control is in two parts: by strategic and
short supply commodities, and by areas. Under the commodity control two
schedules of goods have been established: (1) goods in short supply for which
permits are required for shipment to all destinations; and (2) goods of strategic
importance for which permits are required for shipments to all countries other
than the United States. The area control sets up a list of countries (roughly
all of Europe and the Far East) to which all shipments normally require a permit.
A general export permit is in effect which enables the shipment of specified
nonstrategic items to all destinations except to Communist countries without
individual permit.</p>
<p>Export controls are administered by the Export Permit Section of the Canadian
Department of Trade and Commerce under authority of The Export and Import
Permits Act.</p>
<h4>Transit Controls</h4>
<p>An export permit is required for all goods originating outside Canada when
tendered for export in the same condition as when imported, without further
processing or manufacture in Canada. Goods in transit in bond on a through
journey on a billing originating outside of Canada, clearly indicating the ultimate
destination of the goods to be a third country, do not require a Canadian export
permit. Foreign goods passing through Canada to a third country without a
through bill of lading require a Canadian export permit. (If such goods represent
United States shipments of controlled goods passing through Canada to
third countries they must be covered by a United States export permit.) All
Canadian goods having an undeclared ultimate destination require export permits.
Effective from July 4, 1952, shipments of United States goods through
Canada must be accompanied by a copy of the United States export declaration
form.</p>
<h4>Financial Controls</h4>
<p>Canada does not exercise financial controls over the movement of any
commodity.</p>
<h3 class="center"><a id="DENMARK">DENMARK</a></h3>
<h4>License Requirements</h4>
<p>Export licenses are required for all commodities, except certain agricultural
products, if the goods are exported to or intended for end use in countries which
are not members of the European Payments Union or are within the dollar area.</p>
<p>For the goods enumerated in the below-mentioned Commodity Lists A and B,
export licenses are required, irrespective of the country of destination.</p>
<p>List A of the Danish export regulations consists of items of strategic significance.
For most of these items the licensing authority is the Board of Supply,<span class="pagenum"><a name="Page_68" id="Page_68">[Pg 68]</a></span>
but the Ministry of Justice controls exports of arms, munitions, and military
equipment, and machinery for the production thereof. For the exportation of
ships, the Board of Supply must obtain prior approval from the Ministry of
Commerce, Industry, and Navigation.</p>
<p>List B consists of nonstrategic goods. Export licenses for these are issued by
the Board of Supply, the Board of Health, the Ministry of Public Works or the
National Bank of Denmark according to the nature of the commodity concerned.</p>
<p>Denmark has instituted import certificate-delivery verification procedures.</p>
<h4>Exchange Controls</h4>
<p>The National Bank of Denmark exercises strict controls over all transactions
in foreign exchange. Earnings in foreign currencies must be repatriated and
sold to the bank unless special exceptions are made.</p>
<h4>Transit Controls</h4>
<p>The export controls apply to merchandise exported from the Copenhagen
free port, including exports from transit or bonded warehouses and goods from
free port or private warehouses. They also apply to goods in transit through
Denmark, unless these are transiting on a through bill of lading and there is
no change in the ultimate destination. They thus effectively prevent unauthorized
diversion of goods in transit through Denmark.</p>
<p>All transit transactions financed by Denmark are subject to control by the
national bank, regardless of whether the goods in question actually pass through
Denmark or are forwarded directly between the countries of origin and destination.
In its administration of these provisions the bank observes the same
rules as the export control authorities with which the bank cooperates closely in
this field.</p>
<h4>Shipping Controls</h4>
<p>An arrangement has been made by the Danish Government with Danish shipping
companies to prevent the carrying in Danish vessels of strategic goods
to Communist China and North Korea. This arrangement is implemented
through a licensing system operated under a voluntary agreement with Danish
shipowners.</p>
<h3 class="center"><a id="EGYPT">EGYPT</a></h3>
<h4>License Requirements</h4>
<p>Foreign trade and foreign exchange in Egypt are under official control. These
controls were primarily designed to conserve foreign exchange but since the
spring of 1951 they have been expanded to prevent the export of short supply
items.</p>
<p>Except for books, magazines and newspapers, import licenses are required
for all imports. Prior to October 6, 1952, licenses were required for goods
originating in hard-currency countries, while imports from other sources were
in the most part exempt from restrictions.</p>
<p>Application for imports are submitted to the Controller General of Imports,
Ministry of Finance. Exports are subject to export regulations which are divided
into three main categories: (a) goods that may not be exported; (b) goods
that can be exported freely, through the Customs, without the need of an export
license, and (c) goods that should be covered by a license. The Import and
Export Committee is the main authority entrusted with the formulation of
decisions governing exports and imports. This Committee is under the Secretaries
for Finance, Commerce and Industry, Supplies, Agriculture, War, the
Director General of Exchange Control, the Director General of Cotton Affairs
of the Ministry of Finance, the Controllers General of Exports and Imports, and
the Director General of Customs.</p>
<p><span class="pagenum"><a name="Page_69" id="Page_69">[Pg 69]</a></span></p>
<h4>Transit Controls</h4>
<p>There are no special licensing requirements or controls on goods in transit
other than the ordinary customs supervision.</p>
<h4>Financial Controls</h4>
<p>Foreign exchange is under official control. The basic regulation requires all
foreign exchange earnings to be repatriated to Egypt within 6 months after
the shipping date of the goods. The law requires that all dollar holdings or
payments received by Egyptian nationals or foreigners residing in Egypt be
reported to the Egyptian Government and converted into Egyptian currency at
the official rate unless they are the proceeds of cotton yarn and cloth or raw
cotton exports in which cases 100 percent or 75 percent, respectively, of the
dollars may be retained for up to 210 days in an “import entitlement” account
usable to buy certain listed essential and semiessential commodities.</p>
<h3 class="center"><a id="FRANCE">FRANCE</a></h3>
<h4>License Requirements</h4>
<p>Export licenses are required for over one-half the commodities identified
in the French tariff nomenclature. Governmental authority of this control
is contained in various decrees, the latest dated November 30, 1944. These
decrees also permit addition to or removal from the list of controlled commodities
merely by publication of a notice in the <cite>Journal Officiel</cite>. The most
recent list of these commodities, published as a codification of all previous lists,
appeared in <cite>Journal Officiel</cite> No. 156 of July 5, 1953.</p>
<p>Applications for license to export, as submitted by French exporters, are
examined by the Ministry of Industry and Energy, by the Office des Changes
(where monetary and financial factors are given consideration), and on occasion
by appropriate technical committees and personnel in other agencies.
At the time the application for export license is submitted, the exporter may
be instructed by the Ministry of Industry and Energy to submit a sample,
photograph, blueprint, drawing, or other detailed description of the commodity
in question. These data are used in determining the advisability of issuing
the export license requested. At the port of exit, random samples of actual
exports are extracted by customs officials and these are compared by competent
technicians with the original data submitted with the license application.
This procedure is designed to assure in as many instances as practical that
the commodity exported is identical with the commodity for which the export
license is issued.</p>
<p>In the event fraudulent action on the part of the exporter is found and can
be legally established, the exporter is subject to confiscation of the goods in
question and fines ranging upward to four times the value of the shipment
plus penal servitude. The control system in operation in France makes it
possible to block or encourage exports to any destination of commodities
requiring export licenses.</p>
<h4>Financial Controls</h4>
<p>All transactions in foreign exchange engaged in by French residents, particularly
those in which a French resident takes title to foreign merchandise,
require the prior authorization of the French Government.</p>
<p>An “exchange commitment” (guaranteeing the return to the Government of
the exchange proceeds of a transaction) is required for all exports and reexports
of merchandise to which a French resident holds title. Where the products concerned<span class="pagenum"><a name="Page_70" id="Page_70">[Pg 70]</a></span>
are subject to export license, the export license suffices for the exchange
commitment.</p>
<h4>Shipping Controls</h4>
<p>In order to avoid the transport on French vessels of strategic commodities
to Communist China, the French Government has reached agreement with the
only French shipping firm operating on the China run that the latter will not
transport commodities of any description to Communist China unless these are
covered by export license or permit indicating Communist China as the destination
and issued by the French Government or a friendly foreign government
maintaining the same level of controls as concerns strategic items to China
as is maintained in France.</p>
<p>The French Government has also instituted controls to deny bunkering facilities
to vessels transporting strategic commodities to Communist China.</p>
<h3 class="center"><a id="GERMANY">GERMANY (FEDERAL REPUBLIC) AND WESTERN BERLIN</a></h3>
<h4>License Requirements</h4>
<p>No commodity can be exported from the Federal Republic of Germany or Western
Berlin unless it is covered by an export-control document, which is issued
by the interior customs authorities. However, certain types of exports require
a special export-control document which is granted by the interior customs
authorities only after a certificate of approval has been obtained, as appropriate
from the Central Export Control Office of the Federal Government or the Central
Licensing Agency of the Berlin Senate. A certificate of approval is required
for all exports (regardless of commodity) to the Soviet bloc, Hong Kong or
Macao, and for the export of all commodities in excess of DM 500 on the
“restricted list,” published by the Federal Government, to all other countries.
This list, which corresponds to the United States “positive list,” comprises
commodities under control for security and short-supply reasons and includes
all items covered by title I and title II of the Battle Act.</p>
<p>Exports to numerous western countries, including peripheral countries, are
subject to one form or another of end-use checks. The import certificate-delivery
verification procedures have been in operation since July 1951.</p>
<p>In conjunction with the issuance of either the export-control document
or the special export-control document, the interior customs authorities observe
a definite procedure for physical inspection of commodities being exported. Additional
control over commodities being exported from the Federal Republic
is exercised by the border customs authorities.</p>
<h4>Transit Controls</h4>
<p>Certain items are prohibited for intransit shipments on grounds of health
and sanitation, but the number of items so prohibited is very small and the
prohibited list has not been changed since 1939. German customs officials
may inspect transit shipments at the border and remove any items prohibited
under German law. They then seal the containers of all other goods and
such goods are permitted to proceed, in accordance with international agreement
on transit traffic, without further inspection or restriction, except to
insure at the exit border that the original customs seals remained unbroken.</p>
<p>Intransit shipments arriving in the Freeport of Hamburg are subject to a
customs documentary and physical check before being allowed to enter the
Freeport. When in the Freeport, such shipments are under the control of the
Freeport authorities, and may be loaded, unloaded, or reloaded only with their
approval. The destination of intransit shipments arriving in the Freeport<span class="pagenum"><a name="Page_71" id="Page_71">[Pg 71]</a></span>
of Hamburg traveling under a “through bill of lading” can only be changed
upon instructions of the original shipper, while the destination of intransit
goods traveling under an “ordinary bill of lading” can be determined by the
responsible local forwarding agent.</p>
<p>Intransit shipments consigned to West German firms and remaining in the
Freeport of Hamburg for shipment to a consignee outside Western Germany,
require an intransit trade permit (Transit Handelsgenehmigung), except when
the goods are returned to country of origin. Such intransit trade permits are
issued by the State Central Banks after careful scrutiny of the West German
firm and in accordance with the same regulations applying to shipments of
West German origin, and approval by the West German Central Export Control
Office. West German firms must be listed in the official trade register in
order to qualify for an intransit trade permit.</p>
<p>The identical procedure is enforced in the Freeports of Bremen and Bremerhaven,
with the exception that the functions within the Freeport are carried
out by Federal Customs Authorities rather than Freeport Authorities. This
procedure also applies to Cuxhaven, Emden, and Kiel, which are Freeports of
very minor importance.</p>
<h4>Financial Control</h4>
<p>All financial transactions between residents of Western Germany and Western
Berlin and residents of other areas are subject to either general or specific
exchange-control authorizations issued by the foreign-trade banks. Before those
permits are granted, the transactions in question are not only screened with
respect to currency problems but also in regard to the strategic nature of the
goods. The latter screening is done by export control officials, who have the
power to prevent the transaction.</p>
<h3 class="center"><a id="GREECE">GREECE</a></h3>
<h4>License Requirements</h4>
<p>Export licenses are required for all strategic commodities, all minerals, and
for certain nonstrategic commodities for which export quotas have been established.
For nonstrategic shipments, licenses are issued by the Bank of Greece
in accordance with directives from the Greek Foreign Trade Administration,
Ministry of Commerce. For strategic shipments, including those to the Soviet
bloc countries, licenses must be obtained from the FTA. Such FTA licenses
are limited to items and quantities contemplated by trade agreements or approved
private barter arrangements.</p>
<h4>Transit Shipments</h4>
<p>A transit shipment whose final destination is not indicated on the manifest
or shipping documents must be licensed by the FTA prior to being reexported.
If the destination be indicated, no export license is required.</p>
<h4>Financial Controls</h4>
<p>Foreign exchange proceeds must be surrendered to the Bank of Greece.</p>
<h4>Shipping Controls</h4>
<p>Effective March 17, 1953, the Greek Government prohibited Greek flag vessels
from calling at Communist ports in China and North Korea. This was accomplished
by the Greek Council of Ministers Act No. 204 of March 17, which
was enacted into law by the Greek Parliament on May 7. Violators are punishable
under the provisions of law No. 2317 of 1953, published in Greek
Government Gazette No. 61, dated March 17.</p>
<p><span class="pagenum"><a name="Page_72" id="Page_72">[Pg 72]</a></span></p>
<p>The Greek foreign investment law provides that foreign vessels transferred
to the Greek flag may only be resold to countries named in the “letter of
approval”. This listing has not included Soviet bloc countries. With only
minor exceptions, ships already under the Greek flag may not be resold to other
countries.</p>
<p>Current bunkering controls require licensing both by the Bank of Greece and
the customs authorities. Ship repair controls require licensing by the customs
authorities. In neither case is the licensing control based on the nationality
of the vessel to be serviced nor, in the latter case, the type of materials used
for repair or installed.</p>
<h3 class="center"><a id="HONGKONG">HONG KONG</a></h3>
<p>While there has been no appreciable change in the already extensive security
controls maintained by the Hong Kong Government on exports to Communist
China and the Soviet bloc, there were changes in the laws and legal processes
under which these controls are enforced. The Emergency (Importation and Exportation
Ordinance) (amendment) Regulations, 1953, were promulgated July
10, 1953, in order to prevent evasions of export and import controls. Eighteen
modifications were made by these Emergency Regulations. Among them were:</p>
<p>1. It was made an offence to transfer an export permit with intent to deceive
or to allow any other person to use a permit with intent to deceive.</p>
<p>2. As court decisions in smuggling cases had thrown doubt on the legality of
searches and seizures carried out by the Royal Navy in enforcing export regulations,
an amendment in these Regulations specifically authorizes “any commissioned
officer of H. M. Armed Forces” to carry out such duties.</p>
<p>3. “Any vessel not exceeding 250 gross tons and any vehicle which is made
use of in the importation and exportation or attempted importation or exportation
of any article contrary to the provisions of this Ordinance or any regulation
made thereunder shall be liable to forfeiture whether or not any person is
convicted of any offence.” This article was added to discourage truck owners
and particularly, junk masters, from agreeing to the use of their property for
carriage of smuggled goods, even though the main purpose of their trip is quite
legal. Thus, whether a conviction is obtained or not, the truck or junk is liable
to forfeiture.</p>
<p>Several other changes have also been made which were designed to protect
the rights of persons tried under the basic Ordinance by bringing the Ordinance
into line with usual British judicial practice.</p>
<p>During the past 6 months Hong Kong has added a number of items to its
prohibited export list and struck off a number. All of these actions were taken
in conformity with the decisions of the United Kingdom Board of Trade.</p>
<p>There were no changes in the transit controls or shipping controls in Hong
Kong in the last 6 months of 1953.</p>
<p>In the field of financial controls, since October 1953, approved gold and bullion
dealers have been permitted to import nonresident-owned gold solely for reexport.
While in Hong Kong such gold must be in the custody of an authorized bank.
Such reexport is allowed only to nonsterling area countries and on production
of a valid import license from the country of destination.</p>
<h3 class="center"><a id="IRAN">IRAN</a></h3>
<p>The right to conduct foreign trade is vested in the Iranian Government by
the foreign trade monopoly law of 1931. From time to time the Government
grants by decree the right to conduct trade with respect to certain commodities
to private individuals and firms.</p>
<p><span class="pagenum"><a name="Page_73" id="Page_73">[Pg 73]</a></span></p>
<h4>License Requirements</h4>
<p>Exports are controlled primarily through the exercise of financial controls.
In general, laws and regulations governing export trade are designed so that
commodities that are in short supply, or which would otherwise have to be replaced
by imports, may not be exported. Thus there is a standing prohibition
against the export of gold and silver in bars, sheets, or coins; cattle, sheep,
raw hides, charcoal, matches, butter, sugar, and tea. Also prohibited are exports
of arms and ammunition, precious stones other than turquoise and pearls, and
archeological articles. Only on rare occasions has the Government authorized
the export of any or these commodities.</p>
<p>Decrees currently in effect permit the export of all other commodities without
licensing procedure except those under Government monopoly, such as opium,
oil and tobacco, and except wheat, flour, barley, legumes, rice, lumber and
cotton. Depending on the availability of these last-named commodities, export
quotas are established for them each year, and export licenses are issued by the
Ministry of National Economy to private individuals or firms to the extent of
the quotas established for each commodity.</p>
<p>The issuance of export licenses for lumber and cotton is subject to the approval
of the Ministry of Agriculture and the Iran Cotton Co. (an agency of the Plan
Organization), respectively. The export of opium and tobacco, which are under
Government monopoly, is subject to license of the Ministry of Finance.</p>
<p>Some Iranian exports are effected under barter or clearing agreements which
Iran has concluded with a number of countries since 1940, including the U.S.S.R.,
the Federal German Republic, France, Italy, Czechoslovakia and Poland.
Since quota lists under these agreements specify the commodities involved, exports
made thereunder are in effect licensed by the agreements themselves.</p>
<p>Regulations promulgated on March 18, 1953, under the Law on the Encouragement
of Exports and the Issuance of Licenses to Engage in Foreign Trade of
December 22, 1952, require Iranian exporters to submit a preexport declaration,
in which they inform the Ministry of National Economy of their intention to
export stated commodities to stated destinations. One copy of this declaration
is certified by the Ministry and must be returned to the exporter within 48 hours.
A second copy goes to the Customs Administration for use in inspecting the
goods when they actually leave the country.</p>
<h4>Transit Controls</h4>
<p>Goods having in transit through Iran may enter and leave the country only
at places where customs houses have been established for that purpose. Detailed
documentation is required by Iranian customs authorities for goods in transit.
In practice, there are very few intransit shipments through Iran.</p>
<p>The reexport of specified goods of foreign origin is permitted under a decree
of November 11, 1953, which lists five categories of goods eligible for reexport.
Reexport of such goods, however, requires the prior approval of a commission
established in the Ministry of National Economy, with representatives from a
number of other Government departments. Prior to this decree, reexport, of
imported goods was permissible only by decree of the Council of Ministers, which
rarely considered reexport cases. The new procedure represents a more workable
machinery for the licensing of reexports. It should at the same time provide
adequate safeguards against the reexport of strategic items.</p>
<h4>Financial Controls</h4>
<p>Exporters of Iranian goods must sign an undertaking that the exchange derived
from the export will be sold to a bank authorized by the Government to deal in
foreign exchange.</p>
<p><span class="pagenum"><a name="Page_74" id="Page_74">[Pg 74]</a></span></p>
<h3 class="center"><a id="ISRAEL">ISRAEL</a></h3>
<h4>License Requirements</h4>
<p>All goods to be exported from Israel (including reexports), with certain minor
exceptions such as gift parcels and commercial samples under I£10,000 in value
and personal effects of tourists and immigrants, require an export license. The
Ministry of Commerce and Industry is responsible for the control of most products.
Outstanding exceptions, with the Government department or agency
responsible, are as follows:</p>
<ul class="nobullets">
<li>Military items—Ministry of Defense.</li>
<li>Fuel—Ministry of Finance.</li>
<li>Citrus—Citrus Marketing Board.</li>
</ul>
<p>The Ministry of Commerce and Industry may ask for recommendations from
other ministries before licensing certain products, for example foods and
pharmaceuticals.</p>
<p>Israel voted to support the United Nations Resolution of May 18, 1951, placing
an embargo on shipments of arms and related material to China and North
Korea.</p>
<h4>Transit Controls</h4>
<p>The value of intransit trade is small, inasmuch as Israel is bounded on three
sides by Arab states with which no legal trade is conducted, but commodities
may be entered in bond without becoming subject to export licensing controls.
Before reshipment may take place, however, a permit must be obtained from
the Office of the Collector of Customs.</p>
<h4>Financial Controls</h4>
<p>The Israel Government exercises far-reaching control over the use of foreign
exchange, and it regularly uses this control to restrict the movement of commodities
in international trade. Israeli importers are required to submit comprehensive
justifications as to Israel’s need for a commodity before they are
granted an allocation of foreign exchange. Once the licenses have been granted,
it has been to the interest of the Government of Israel to make certain that the
commodities are in fact imported and used in the Israeli economy. This identity
of interest is a strong safeguard that materials consigned to Israel are not
reexported.</p>
<h3 class="center"><a id="ITALY">ITALY</a></h3>
<h4>License Requirements</h4>
<p>All commodities listed in the new export tables dated March 16, 1953, as
amended, require an export license to all destinations except Somaliland, which is
issued by the Ministry of Foreign Trade. Goods not listed in the export tables
are exempt from license, but must be exported in conformity with exchange
regulations, which vary according to the country of destination and clearing or
other financial agreements.</p>
<p>All items require an export license for shipment to the Soviet bloc, including
China.</p>
<p>Exports to the Soviet bloc also require bank validations, as virtually all trade
with the bloc is conducted under bilateral agreements which specify the commodities
that may be traded and the methods by which payment is to be made.
Normally, shipments to the East comprise only those commodities specified in a
trade agreement with an eastern country. In order to facilitate checking of
east-bound shipments, trade with the Soviet bloc is funneled through selected
frontier customs points.</p>
<p><span class="pagenum"><a name="Page_75" id="Page_75">[Pg 75]</a></span></p>
<p>The formulation of export-control policy and the administration of the export
licensing system are the primary responsibility of the Ministry of Foreign
Trade. This Ministry is advised by a special interministerial committee.</p>
<p>Italy is employing import-certificate delivery-verification procedures and
carries out end-use checks for shipments to destinations outside the Soviet bloc,
particularly for questionable transactions involving goods of a strategic nature.
The country of origin is notified if an attempt is made to divert a shipment.</p>
<h4>Financial Controls</h4>
<p>Financial control over all export transactions is maintained through the
licensing system and through implementation of existing exchange-control
regulations.</p>
<p>Strict bilateral trade agreements with almost all members of the Soviet bloc
have constituted, in effect, a financial ceiling on exports to Eastern Europe.
Italian exports to Communist China, with whom there is no trade agreement,
must be paid for in hard currency or must be exchanged for goods acceptable
to the Italian Government, an arrangement that has severely restricted Italo-Chinese
trade. Italian exchange control regulations would not normally permit
payment for imports from the Soviet bloc in hard currencies, although sterling
is occasionally used in payment for the few items not included in the trade agreements.
In certain instances ship charters are completed for sterling when circumstances
warrant or it is considered convenient.</p>
<h4>Transit Controls</h4>
<p>Direct and indirect transit shipments are subject to customs check, which
includes a screening of documents, physical inspection of goods in case of doubt
and control of the routing of shipments to prevent the use of unnatural and
unusual methods of transportation. In the case of indirect transit shipments,
a check is also made on the regularity of the transaction from the foreign-currency
standpoint. In doubtful or suspect cases, customs, while not empowered
to stop transit shipments, is able to delay the transaction until the Ministry of
Finance, in conjunction with the Ministry of Foreign Affairs and other agencies,
obtains detailed information concerning the final destination. When an investigation
discloses that a transaction is not in order, the central administration
orders confiscation of the goods and prefers charges against those responsible,
if they are Italian nationals.</p>
<p>New regulations published in April 1953, imposed a more strict financial
control over indirect transit operations. Prior to this time, certain firms and
individuals who were officially authorized to hold foreign currency accounts,
were permitted to carry on transit operations without making an application for
foreign exchange in each case. The new regulations withdrew this privilege,
making it necessary for all transit operators to submit an application to the
General Directorate for Currencies of the Ministry of Foreign Trade before purchasing
abroad any item listed in part A of the export tables (which include
strategic items). A later amendment to this regulation permits a certain flexibility
by allowing the transit operator to purchase goods abroad and have them
shipped to Italy before making application to the Ministry of Foreign Trade. An
operator making use of this provision must submit to the bank which holds his
currency account a written commitment that the goods will be sent directly to
Italy and not diverted and must obtain the clearance of the General Directorate
for Currencies before the goods can be onforwarded through Italy to another
country.</p>
<p><span class="pagenum"><a name="Page_76" id="Page_76">[Pg 76]</a></span></p>
<h4>Shipping Controls</h4>
<p>The Ministry of Merchant Marine has drafted a bill which, when enacted into
law, will give the Italian Government the power to exercise control over shipping
traffic with countries of the Soviet bloc. The bill contemplates quite severe
penalties to be imposed upon owners and masters of ships failing to comply with
regulations established by the Ministry of Merchant Marine. Consideration of
this bill by Parliament has been delayed for nearly 1 year, however, and there
seems to be no immediate prospect that it will be enacted into law.</p>
<h4>Penalties</h4>
<p>Penalties that may be imposed under Italian law for violations of export-control
regulations include (1) imprisonment up to 2 months, (2) fines up to 40,000 lire,
and (3) confiscation of the merchandise involved. Persons and firms under
investigation for illegal export transactions are denied foreign trading privileges.
However, an amnesty law recently passed by the Italian Parliament has resulted
in the dropping of all charges outstanding against violators of the export control
regulations.</p>
<p>Irregularities under the customs law may be punished by fines from 2,000 to
20,000 lire, while other infractions may incur the penalties contemplated by the
penal code.</p>
<h3 class="center"><a id="JAPAN">JAPAN</a></h3>
<h4>License Requirements</h4>
<p>Licenses from the Japanese Ministry of International Trade and Industry are
required for exports of any commodity on the Japanese export control list. No
exports to North Korea have been permitted since the outbreak of the Korean
War. Exports to Communist China are limited to nonstrategic items. Exports
of strategic items to any other communist bloc country are strictly controlled.</p>
<p>Strategic items embargoed by Hong Kong to Communist China are licensed for
export to Hong Kong by Japan only if an essential supply certificate has been
issued by the Hong Kong Government, and on exports of lesser strategic items the
Japanese licensing authorities require end-use checks or reliable evidence that
reexport to Communist China is unlikely.</p>
<p>End-use checks are made also on suspicious exports of strategic items to other
destinations and the import certificate-delivery verification procedure has been
utilized since April 1, 1953.</p>
<h4>Transit Controls</h4>
<p>Intransit cargo is offloaded under customs supervision and is normally kept
in a bonded warehouse or other area under the complete control of customs
officials.</p>
<p>All offloaded intransit cargo is subject to the same export regulations as indigenous
exports.</p>
<h4>Financial Controls</h4>
<p>For balance-of-payments reasons, Japan closely controls its receipts and expenditures
of foreign exchange. These controls are not related to security measures
except indirectly in connection with trade with Communist China and the Soviet
Union.</p>
<p>Trade with these areas is largely confined to barter transactions which must
be settled on the basis of back-to-back or escrow letters of credit approved by
foreign exchange banks.</p>
<p><span class="pagenum"><a name="Page_77" id="Page_77">[Pg 77]</a></span></p>
<h4>Shipping and Bunkering Controls</h4>
<p>Since June 1951 it has been required that bills of lading issued by carriers for
strategic items licensed for export must contain a “Notice to carrier” stating that
delivery of the goods to countries other than the destination designated in the
export license is prohibited without the express permission of the licensing
authority.</p>
<p>Japanese shipowners have been notified that Japanese vessels are not authorized
to carry strategic goods to Communist China from Japan or from any other
country unless shipment has been licensed by a COCOM country.</p>
<p>Administrative measures also have been adopted to prevent foreigners from
chartering or using Japanese vessels to carry contraband goods to Communist
China or North Korea. The Ministry of Transportation has announced that applications
for approval of a bare boat or time charter of a Japanese vessel to a
foreigner must show that the charterer has guaranteed that during the period
of the charter the vessel will not enter any port in Communist China or North
Korea with strategic goods on board the vessel unless the shipment has been
licensed by a COCOM country.</p>
<p>The Ministry of International Trade and Industry furthermore has instructed
Japanese oil companies not to furnish fuel bunkers to any vessels carrying
strategic goods to Communist China or North Korea unless the shipment has been
licensed by a COCOM country.</p>
<h3 class="center"><a id="KOREA">REPUBLIC OF KOREA</a></h3>
<h4>License Requirements</h4>
<p>Foreign trade in the Republic of Korea is governed by regulations issued by
the Ministry of Commerce and Industry. Licenses are required for all exports
to all destinations and are issued by the Ministry of Commerce and Industry only
to registered foreign traders, or to manufacturers for their own products. A
certificate of final destination (or pledge to submit such a certificate) must
accompany all exports license applications.</p>
<p>Registration as a foreign trader is canceled when a trader does business with
individuals or juridical persons under a Communist government. Delivery of
arms, ammunition and other goods for military use to enemy countries is a
criminal offense.</p>
<h4>Financial Controls</h4>
<p>Foreign exchange proceeds from exports are subject to the control of the
Bank of Korea.</p>
<h4>Shipping Controls</h4>
<p>Vessels engaged in foreign trade are required to submit their manifests upon
entry into an open port and are prohibited from proceeding to a foreign country
except by way of an open port. Transshipment from one vessel engaged in
foreign trade to another is prohibited unless authorized by the Collector of
Customs. Vessels engaged in domestic trade cannot load export goods unless
the goods are shipped in bond.</p>
<h3 class="center"><a id="NETHERLANDS">THE NETHERLANDS</a></h3>
<h4>License Requirements</h4>
<p>All exports from the Netherlands are subject to export licenses. Export
licenses for industrial commodities are issued by the Central Bureau of Imports
and Exports (CDIU) at The Hague, which has delegated this authority to a<span class="pagenum"><a name="Page_78" id="Page_78">[Pg 78]</a></span>
number of so-called trade-control boards. For agricultural products, licenses
are granted by the Ministry for Agriculture, which for a large number of commodities
has delegated this function to the “agricultural-monopoly holders.”
The latter are state-supervised and semiofficial organizations, similar to the
trade-control boards.</p>
<p>In certain instances, the exporter may make out his own export license which
must be dated and initialed by an officer of the CDIU.</p>
<h4>Transit Controls</h4>
<p>Goods passing in transit through the Netherlands, including strategic commodities,
are not subject to any controls except for a customs check to insure that
goods in transit leave in the same form in which they have entered.</p>
<p>The Netherlands has adopted import certificate-delivery verification procedures.</p>
<h4>Financial Controls</h4>
<p>All transactions of a Netherlands resident involving payment of moneys to or
from a party abroad are subject to a foreign-exchange license, issued by the
Netherlands Bank. The export license generally includes the authorization
of the banks for the proposed transaction.</p>
<h4>Shipping Controls</h4>
<p>The Netherlands instituted voyage controls in May 1953, aimed at preventing
the carriage of strategic commodities by Netherlands ships to Communist China
and North Korea except pursuant to special permission.</p>
<h3 class="center"><a id="NORWAY">NORWAY</a></h3>
<h4>License Requirements</h4>
<p>All commodities to be exported to any destination require export licenses.
The licensing authorities using existing powers can prevent the export of any
item for security reasons.</p>
<h4>Transit Controls</h4>
<p>Goods which are to pass through the territory of Norway may be reexported
without license only if it is clearly stated by their conveying documents that
the goods are going straight to foreign destination. If the reexport does not
take place within 90 days, a Norwegian export license must be secured. The
destination listed on the original documents must remain the same, and the
goods may not be transformed in any way during their stay in the country.
The customs authority applies a control to that effect. There are no free-port
areas in Norway.</p>
<p>Norway has adopted import certificate-delivery verification procedures.</p>
<h4>Financial Controls</h4>
<p>Strict exchange controls are maintained by the Government through the Bank
of Norway. The granting of an export license carries with it the obligation on
the part of the exporter to relinquish the foreign exchange to the Bank of
Norway as soon as received from the foreign buyer; a maximum of 60 days
is allowed between export and remittance, although under certain circumstances
the Government may grant the exporter an extension of time. Transfers of
capital from Norway require the prior approval of the Bank of Norway.</p>
<h4>Shipping Controls</h4>
<p>The Norwegian Foreign Office announced publicly in April 1953 that the
Norwegian war risk insurance group had refused to insure Norwegian vessels<span class="pagenum"><a name="Page_79" id="Page_79">[Pg 79]</a></span>
delivering strategic articles to Communist Chinese and North Korean ports.
The foreign office also announced that Norwegian ships had not violated the
United Nations resolution prohibiting the shipment of strategic material to
Communist China and North Korea. Several allegations that they had done
so had been investigated and found to be unjustified.</p>
<h3 class="center"><a id="PAKISTAN">PAKISTAN</a></h3>
<h4>License Requirements</h4>
<p>Pakistan’s export controls are exercised under the authority of the Imports
and Exports (Control) Act, 1950 (Act No. XXXIX) as amended by the Imports
and Exports (Control) Amendment Act, 1953 (Act No. IX of 1953), which
extends the life of the 1950 act for 3 years, until April 18, 1956. The act empowers
the Central Government to prohibit, restrict, or otherwise control the
import or export of goods of any specified description, or regulate generally all
practices and procedures connected with the import or export of such goods.
Under an export trade control notification of 1948, which is still in effect, numerous
categories embracing strategic or short-supply materials have been
established for which no licenses are granted. Pakistan prohibits the reexport
in their original form of all imported materials regardless of origin except in
specific cases, each of which is examined on its own merits. With respect to
goods of domestic origin, Pakistan encourages exports to all countries of such
goods as are surplus to her own requirements and encourages shipments to the
dollar area by placing selected items on an open general license specifically
applicable to the dollar area.</p>
<h4>Transit Controls</h4>
<p>Pakistan has issued special transit regulations to govern trade passing through
that country to Afghanistan. Strict control is maintained, moreover, at the
ports to insure against unauthorized transit shipments.</p>
<h4>Financial Controls</h4>
<p>Pakistan has promulgated exchange control regulations which insure the
surrender to the State Bank of Pakistan or its authorized agents of all foreign
exchange derived from export transactions.</p>
<h4>Shipping Controls</h4>
<p>The Control of Shipping Act, 1947 (Act XXIV), approved by the Central
Government as amended by Ordinance V of June 22, 1951, provides for the control
of shipping. Under this act a shipping authority appointed by the Central Government
licenses vessels of both Pakistan and foreign registry which participate
in coastal traffic. This act was recently extended through March 31, 1959.</p>
<h3 class="center"><a id="PORTUGAL">PORTUGAL</a></h3>
<h4>License Requirements</h4>
<p>All exports are subject to licensing under regulations issued in 1948 except that
export licenses are not generally required for shipments to Portuguese overseas
provinces. Portugal’s export trade with the Soviet bloc is not important and
consists almost entirely of cork, which is not on any strategic or restricted list.
The Portuguese colonies exert varying degrees of export control. On January 23,
1952, the Government of Macao adopted a trade-control system which requires a
license for the import and the export of strategic materials. Strategic materials
are shipped from Portugal to Macao only against import certificates issued by
that province.</p>
<p><span class="pagenum"><a name="Page_80" id="Page_80">[Pg 80]</a></span></p>
<h4>Transit Controls</h4>
<p>Portuguese controls over goods in transit are not wholly effective in that no
export license is required if goods in transshipment are reexported within 60
days after being placed in bond.</p>
<p>Financial control is exercised over all exports as a part of the license control
system.</p>
<h3 class="center"><a id="SINGAPORE">SINGAPORE</a></h3>
<h4>Licensing Requirements</h4>
<p>Colonial legislative authority for control of imports and exports is exercised
under the Control of Imports and Exports Ordinance of 1950, which places the
issuance of all licensing, both general and special, under the absolute discretion
of the Controller of Imports and Exports. Under this general authority, all
exports are carefully controlled. Strategic commodities, in particular, are controlled
in accordance with UK-adopted strategic trade controls with respect to
exports to all Soviet bloc destinations. In addition, a special list of goods is
embargoed to Communist China and North Korea, and subject to Essential
Supply Certification if such goods are to be exported from Singapore to Hong
Kong. Amendments to the latter embargo list adopted by the United Kingdom
are promptly reflected in Singapore.</p>
<p>Many commodities are subject to special licensing controls under exchange
restrictions or emergency regulations. The only exemptions to licensing are
goods transitting the colony on a through bill of lading, and those shipments
customarily exempted in international trade, such as parcel post shipments
under $50, etc.</p>
<h4>Transit Controls</h4>
<p>Goods which transit the port of Singapore without offloading are subject to
no control. Goods which are landed in the colony for the purpose of transshipment
on a through bill of lading to another destination are also subject to
no local license or declaration, as long as such goods remain in the custody of
the harbor board or of the agent of the ship from which landed. Transshipment
goods not on through bills are treated as reexports, and are subject to full
export control.</p>
<h4>Shipping Controls</h4>
<p>The United Kingdom Control of Trade by Sea Order (China and North Korea)
1953, went into effect in Singapore on March 31, 1953. Since that time, measures
taken to implement the order effectively have included placing all bunkering
of ships, either coal or oil, of over 500 gross registered tons, on a local licensing
basis. This places bunkering under the control of the Controller of Exports
and Imports. Voyage licensing of vessel is under the control of the Master
Attendant.</p>
<h3 class="center"><a id="TURKEY">TURKEY</a></h3>
<h4>Export Controls</h4>
<p>Under the new foreign trade regime, Turkish exports are grouped in two
lists. List I contains all Turkish export commodities, the export of which is
unrestricted unless they also appear on list II. A simple customs exit declaration
based on the exporter’s application is all which is necessary to realize list
I exports. List II designates commodities requiring export licenses. The export
license can be obtained from the Ministry of Economy and Commerce or agencies
so designated by the said Ministry. List II items may also be exported by certain<span class="pagenum"><a name="Page_81" id="Page_81">[Pg 81]</a></span>
Government or semigovernmental agencies only. The list II commodities subject
to such licensing procedure are as follows: cereals (barley, wheat, rye, corn,
oats, and rice) and cereal products (semolina, macaroni, starch, noodles, flour);
animal products (butter); dried fruits and nuts (pistachios shelled or unshelled,
seedless dried raisins); minerals and mineral products (asbestos, copper,
copper waste and scrap, copper plates, bars and wires); copper alloys and
copper alloy products; barite; steel and iron waste and scrap; zinc ore; zinc
mixed with lead; iron ore and pyrites; pig iron; iron products and waste and
scrap; ferro-manganese; graphite; calco-pyrite; chrome ore; lead ore; sulphur
ore; stone coal; mineral waste; coke and coke dust; manganese ore; molybdenum;
tin waste; raw materials for textiles (cotton linters, greasy wool);
vegetable oils (olive oil, margarines); tobacco and opium (tobacco processed
and leaf, opium); creosote and xylol; sodium fluoro-silicate; toluol; mineral
oils mixed with phenol and naphtha; straw; pistols and ammunition.</p>
<h4>Transit Controls</h4>
<p>There is no large amount of intransit trade in Turkey. All intransit goods
arriving in Turkey, however, must carry on all shipping documents (including
bill of lading and ship manifest) and outer containers the name of the Turkish
port, the phrase “in transit to” and the name of the city and country of
destination.</p>
<p>Generally, goods moving intransit through Turkey may be imported only
through customs warehouses.</p>
<p>Extensive documentation, including a reexport license, is required for clearance
by the Turkish Customs Administration.</p>
<h4>Financial Controls</h4>
<p>Export-control measures are designed for two purposes: (1) to keep a check
on outgoing strategic or short-supply materials, and (2) they are instituted also
for foreign-exchange reasons. For price-checking purposes in order that foreign-exchange
losses can be prevented, exporters must register with agencies
designated by the Ministry of Finance. Customs authorities do not permit
exportation without a certificate of registration and destination. All foreign
currency receipts are turned over to the Central Bank of Turkey.</p>
<h3 class="center"><a id="UK">UNITED KINGDOM</a></h3>
<h4>License Requirements</h4>
<p>The export control system in the United Kingdom is similar to but not
identical with that of the United States. It is administered by the Board
of Trade. Although the present system grew out of measures originally promulgated
at the start of World War II, its primary purpose now is the safeguarding
of the country’s requirements of strategic and short-supply goods, and the
restriction of the flow of such items to undesirable destinations. The United
Kingdom security trade control program was instituted in 1947.</p>
<p>The United Kingdom export control mechanism operates in the following
manner:</p>
<p>The consolidated order, which encompasses all the items subject to control,
is a published document and revisions are issued in the form of statutory orders
which are also published in the Board of Trade Journal (an official weekly).
The list is arranged into three schedules. The first schedule lists goods which,
in general, cannot be exported to any destination without a license. The second
schedule lists additional goods (mostly foodstuffs) which, in general, can be
exported to any destination without a license. The two schedules are, however,<span class="pagenum"><a name="Page_82" id="Page_82">[Pg 82]</a></span>
subject to two qualifications. Firstly, a limited number of goods included in
the first schedule can be exported without license to destinations within the
British Commonwealth (except Hong Kong), Ireland, and the United States.
Such goods are listed in the third schedule. Secondly, no goods, even those
included on the second schedule, can be exported without license to China,
Hong Kong, Macao, or Tibet.</p>
<p>The extent of the restriction on individual items is reflected in the administration
of the control. Strict control is maintained over items which are prohibited
exportation to certain areas, as, for instance, aircraft, firearms, ammunition,
atomic materials. The exportation of a wide range of goods of strategic importance,
including rubber, to Communist China is prohibited, as is the exportation
to the Soviet bloc in Europe of a somewhat narrower range of commodities.
The export to the Soviet bloc of many other items is subject to limitations as
to quantities permitted to be shipped. In addition, there is the great bulk
of items on which control is achieved through case-by-case scrutiny of individual
license applications.</p>
<h4>Transit Controls</h4>
<p>The United Kingdom has had in effect since November 1951 a system whereby
about 250 items of strategic importance arriving from other countries are subject
to transshipment control. Individual licenses are required for all of the items
on the licensing list before any of the goods, after being landed in the United
Kingdom, can be transshipped to any destination other than the British Commonwealth
(except Hong Kong), Ireland, and the United States. In administering
the control, the British authorities normally grant licenses when they are
satisfied that the goods will not be diverted to the Soviet bloc, China, etc., contrary
to the wishes of the exporting country.</p>
<p>The United Kingdom has effectively implemented import certificate-delivery
verification procedures.</p>
<h4>Shipping Controls</h4>
<p>In order to restrict further the flow of strategic goods to China and as an
additional measure of control, a statutory order (titled the Control of Trade
by Sea (China and North Korea) Order, 1953) was made on March 13, 1953,
pursuant to which the Ministry of Transport and Civil Aviation is empowered
to control all shipping to China and North Korea. In essence, the order applies
to all British ships having a gross tonnage of 500 tons, limits the type of trade
in which the ships may engage and the voyages which may be undertaken,
affects the class of cargo or passengers which may be carried, and imposes
certain conditions on the hiring of ships. Approximately a hundred items are
listed in a schedule which is an integral part of the license issued under the
order in question. These items are banned from carriage to China in British
flag vessels.</p>
<p>While formal shipping controls were not adopted until March 17, 1953, British
shipping circles were kept under fairly close scrutiny by the Government
ever since the adoption on May 18, 1951, by the Additional Measures Committee
of the United Nations of the resolution to apply economic sanctions against
China as a result of her aggressive intervention in Korea.</p>
<p>Complementary controls over the bunkering of vessels carrying strategic
cargo (as defined in the Shipping Control Order) to China were adopted at the
same time that the order affecting shipping became operative. These controls
are administered by the Ministry of Fuel and Power on an informal basis, in
cooperation with British oil companies which deny bunkers to ships carrying
strategic cargo to China.</p>
<p><span class="pagenum"><a name="Page_83" id="Page_83">[Pg 83]</a></span></p>
<h3 class="center"><a id="USA">UNITED STATES</a></h3>
<h4>Export Controls in General</h4>
<p>The Department of Commerce is responsible for controls over nearly all
commercial exportations from the United States under the Export Control Act
of 1949, as extended.</p>
<p>The Department of State is responsible for control over the exportation of
arms, ammunition, and implements of war; the Atomic Energy Commission administers
controls over the export of major atomic energy items; and the Department
of Treasury administers controls over the exportation of gold and narcotics.
All such items required export licenses, and shipments to the Soviet bloc are
not permitted.</p>
<h4>Administration of Export Controls by Commerce Department</h4>
<p>All commodities exported to any destination, except Canada, from the United
States, its territories and possessions are subject to export control. There are
three main techniques utilized in the administration of such controls:</p>
<p>1. Shipments of commodities contained in the Positive List
<a name="FNanchor_3" id="FNanchor_3" href="#FOOTNOTE3" class="fnanchor">1</a>
are under control
to virtually all destinations;</p>
<p>2. For some commodities, a general license is authorized permitting exportation
to virtually all friendly destinations without requiring that an export license
be issued;</p>
<p>3. All commodities, whether or not on the Positive List and irrespective of
any general license provisions, are under licensing control to subgroup A destinations
(i.e., Soviet Bloc, including Communist China and North Korea), Hong
Kong and Macao.</p>
<p>The Comprehensive Export Schedule published by the Bureau of Foreign Commerce
(BFC) of the Department of Commerce must be consulted in order to
determine whether a validated license is required for the exportation of a given
commodity to a specific destination as well as to determine other export control
regulations of the Commerce Department. The Comprehensive Export Schedule
is supplemented 2 or 3 times a month by BFC’s Current Export Bulletin. The
Secretary of Commerce’s Quarterly Report to the President and the Congress
reports major policy changes and activities of the Department of Commerce in
carrying out its export control activities.</p>
<p>The two main policies as indicated in the Export Control Act which is administered
by the Department of Commerce are export controls for security and for
short supply reasons. The objective of security controls as embodied in the
Export Control Act of 1949, as extended, is to exercise the necessary vigilance
over exports from the standpoint of their significance to the national security.
The controls were designed to deny or restrict the exportation of strategic commodities
to the Soviet bloc in order to impede the buildup and maintenance of
the Soviet war potential. Shipments of all commodities to Communist China
and North Korea are embargoed while shipments to the European Soviet bloc,
Hong Kong, and Macao are either denied or restricted. In addition, all proposed
shipments of strategic commodities to all destinations, except Canada, are carefully
scrutinized to assure that the goods will not be transshipped or diverted
to unfriendly hands. The Commerce Department has developed procedures to
prevent the frustration of our own export controls which would result from
shipping a strategic item to a country which (1) ships identical or closely similar<span class="pagenum"><a name="Page_84" id="Page_84">[Pg 84]</a></span>
items to the Soviet bloc, or (2) would use the American item directly in the
manufacture of strategic items for the Soviet bloc.</p>
<p>In order to prevent the transshipment abroad of United States commodities,
the Department of Commerce also has regulations covering the unauthorized
movement of United States commodities after they leave United States shores.
These regulations generally referred to as the “destination control” provisions
are designed to prohibit the reexportation from the country of ultimate destination
except upon written authorization from BFC. These regulations also restrict
ships, planes or other carriers from delivering United States origin goods to other
than the destination specified on the export control documents. In addition, the
United States participates in the international IC/DV (import certificate—delivery
verification) system described elsewhere in this report.</p>
<p>In addition to United States export controls for security reasons, it is necessary
to administer export controls for short supply reasons in order to protect the
domestic economy from the excessive drain of scarce materials and to reduce
the inflationary impact of abnormal demand. Such controls are usually exercised
by means of export programs or quotas fixed by the Secretary of Commerce.
The easing of supply programs in recent months has led to the prompt lifting of
nearly all domestic controls over materials: such actions have generally been
followed by the relaxation of related export controls for short supply reasons.
Thus, export controls for short supply reasons do not play as important a part
as before in comparison with security controls.</p>
<hr class="footnote"/>
<p class="footnote">
<a name="FOOTNOTE3" id="FOOTNOTE3"
href="#FNanchor_3" class="fnanchor">1</a>
The Positive List of Commodities is a current list contained in the
Comprehensive Export Schedule showing the commodities which require a
validated license from the Bureau of Foreign Commerce of the Department
of Commerce.</p>
<h4>Transit Controls</h4>
<p>A validated export license is required for the exportation from any seaport,
land frontier, airport, or foreign trade zone in the United States of certain
strategic goods in transit through the United States which originate in or are
destined for a foreign country. The commodities so controlled are the ones
which are identified on the United States Department of Commerce Positive
List by an asterisk.</p>
<h4>Shipping Controls</h4>
<p>Department of Commerce Transportation Order T-1 denies any United
States-registered vessel or aircraft authority to carry items listed on the
Positive List, or arms, ammunition and implements of war or fissionable material,
to any Soviet bloc destination, Hong Kong or Macao without a validated
license issued by BFC or other appropriate licensing agencies or the express
permission of the Under Secretary of Commerce for Transportation. This order
includes shipments from foreign ports as well as from the United States.</p>
<p>Department of Commerce Transportation Order T-2 has the effect of preventing
the transportation of any commodities directly or indirectly to Communist
China, North Korea, or areas under their control, by United States-registered
vessels or aircraft. It also prohibits American ships and aircraft
from calling at any port or place in Communist China.</p>
<p>A validated license is required for delivery in United States ports of specified
types of petroleum and petroleum products to foreign vessels, if the foreign
carrier has called at any point under Far Eastern Communist control, or at
Macao, since January 1, 1953, or will carry commodities of any origin from the
United States destined directly or indirectly for any such point within a period
of 120 days in the case of a vessel, or 30 days in the case of any aircraft. This
regulation also requires that if a carrier is registered in or under charter to a
Soviet-bloc country or is under charter to a national of a Soviet-bloc country
it will be necessary to apply to BFC for a validated license.</p>
<p>American petroleum companies at certain foreign ports are prohibited without<span class="pagenum"><a name="Page_85" id="Page_85">[Pg 85]</a></span>
a Treasury Department authorization from bunkering any vessel bound for a
Communist Far East port or Macao or which is carrying goods destined for
Communist China or North Korea. Similar restrictions apply to the bunkering
by these companies of vessels returning from Communist Far East ports or
Macao.</p>
<h4>Financial and Transaction Controls</h4>
<p>The Foreign Assets Control Regulations, administered by the Treasury Department,
block the assets here of Communist China, North Korea and their
nationals and prohibit unlicensed dealings involving property in which Communist
China, or North Korea, or their nationals, have any interest. The regulations
prevent the use of United States financial facilities by those countries
and their nationals. These regulations also prohibit the unlicensed importation
of goods of Chinese Communist or North Korean origin.</p>
<p>Treasury regulations also prohibit Americans, including foreign subsidiaries
of United States firms, from participating in the purchase or sale of certain
important commodities for ultimate shipment from any country outside the
United States to the countries of the Soviet bloc. These transactions controls,
which are complementary to the United States export control laws, are administered
by the Treasury Department under Foreign Assets Control
Regulations.</p>
<p><span class="pagenum"><a name="Page_86" id="Page_86">[Pg 86]</a></span><br />
<span class="pagenum"><a name="Page_87" id="Page_87">[Pg 87]</a></span><br />
<span class="pagenum"><a name="Page_88" id="Page_88">[Pg 88]</a></span></p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_89" id="Page_89">[Pg 89]</a></span></p>
<h2 class="break"><a name="APPENDIX_B" id="APPENDIX_B">APPENDIX B</a></h2>
<p class="chaptertitle">
Statistical Tables</p>
<ul class="nobullets outside">
<li><a href="#Page_89mid">Table 1</a>. Free-world trade with Soviet Bloc,
1948 through 1953.</li>
<li><a href="#Page_90">Table 2</a>. Exports of principal free-world countries to
Soviet Bloc, 1951, 1952, and 1953.</li>
<li><a href="#Page_91">Table 3</a>. Imports of principal free world countries
from the Soviet Bloc, 1951, 1952, and 1953.</li>
<li><a href="#Page_92">Table 4</a>. Free-world exports to the Soviet Bloc,
monthly, 1952 and 1953.</li>
<li><a href="#Page_92mid">Table 5</a>. Free-world imports from the Soviet Bloc,
monthly, 1952 and 1953.</li>
<li><a href="#Page_93">Table 6</a>. Free-world exports to Communist China,
semiannual 1952 and 1953.</li>
<li><a href="#Page_94">Table 7</a>. Free-world imports from Communist China,
semiannual 1952 and 1953.</li>
<li><a href="#Page_95">Table 8</a>. United States trade with the Soviet-Bloc
countries, 1937, 1948, 1952 and 1953.</li>
</ul>
<div id="Page_89mid"></div>
<p class="center break"><span class="smcap">Table 1.</span>—
<i>Free-world trade with Soviet bloc, 1948 through 1953</i></p>
<p class="center">[In millions of United States dollars]</p>
<table id="Table1" class="avg"
summary="Table 1. Free-world trade with Soviet bloc, 1948 through 1953">
<tr>
<th class="no-left"> </th>
<th class="middle">1948</th>
<th class="middle">1949</th>
<th class="middle">1950</th>
<th class="middle">1951</th>
<th class="middle">1952</th>
<th class="middle no-right">1953<br />(est.)</th>
</tr>
<tr>
<th class="indent0">Free-World exports to:</th>
<th class="sides"></th><td class="sides"></td><td class="sides"></td>
<td class="sides"></td><td class="sides"></td><td class="noborder"></td>
</tr>
<tr>
<th class="indent1">Entire bloc</th>
<td class="no-top">1,969</td><td class="no-top">1,680</td><td class="no-top">1,545</td>
<td class="no-top">1,685</td><td class="no-top">1,422</td>
<td class="bottom-only">1,350</td></tr>
<tr>
<th class="indent2">U.S.S.R.</th>
<td class="sides">533</td><td class="sides">437</td><td class="sides">301</td>
<td class="sides">386</td><td class="sides no-bottom">481</td>
<td class="noborder">410</td>
</tr>
<tr>
<th class="indent2">European satellites</th>
<td class="sides">902</td><td class="sides">919</td><td class="sides">792</td>
<td class="sides">853</td><td class="sides">672</td>
<td class="noborder">660</td>
</tr>
<tr>
<th class="indent2">China</th>
<td class="double-bottom sides">534</td>
<td class="double-bottom sides">324</td>
<td class="double-bottom sides">452</td>
<td class="double-bottom sides">446</td>
<td class="double-bottom sides">268</td>
<td class="double-bottom">280</td>
</tr>
<tr>
<th class="indent0">Free-World imports from:</th>
<td class="sides"></td><td class="sides"></td><td class="sides"></td>
<td class="sides"></td><td class="sides"></td><td class="noborder"></td>
</tr>
<tr>
<th class="indent1">Entire bloc</th>
<td class="no-top">2,005</td><td class="no-top">1,788</td><td class="no-top">1,727</td>
<td class="no-top">1,879</td><td class="no-top">1,608</td>
<td class="bottom-only">
<a href="#TABLE1_NOTE1" class="fnanchor">1</a>1,580</td>
</tr>
<tr>
<th class="indent2">U.S.S.R.</th>
<td class="sides">492</td><td class="sides">272</td>
<td class="sides">252</td><td class="sides">397</td>
<td class="sides">462</td><td class="noborder">380</td>
</tr>
<tr>
<th class="indent2">European satellites</th>
<td class="sides">1,026</td><td class="sides">1,090</td>
<td class="sides">940</td><td class="sides">960</td>
<td class="sides">780</td><td class="noborder">766</td>
</tr>
<tr>
<th class="indent2">China</th>
<td class="sides">487</td><td class="sides">426</td><td class="sides">535</td>
<td class="sides">522</td><td class="sides">366</td><td class="sides no-right">425</td>
</tr>
<tr> <!-- blank line to match document -->
<th class="bottom-only"> </th>
<td class="no-top"> </td><td class="no-top"> </td><td class="no-top"> </td>
<td class="no-top"> </td><td class="no-top"> </td><td class="bottom-only"> </td>
</tr>
</table>
<p class="tablenote">
<a name="TABLE1_NOTE1" id="TABLE1_NOTE1" class="fnanchor">1</a>
Includes $9 million imported by United States from Outer Mongolia.</p>
<ul class="tablenote nobullets nopadding">
<li><span class="smcap">Note.</span>—Figures unadjusted for price changes.
China data since 1949 refer, so far as possible, to Mainland
(Communist) China including Manchuria and Inner Mongolia.</li>
<li>Source: Official statistics of Free-World Countries,
compiled by U. S. Department of Commerce.</li>
</ul>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_90" id="Page_90">[Pg 90]</a></span></p>
<p class="center break"><span class="smcap">Table 2.</span>—
<i>Exports of principal free-world countries to Soviet bloc,
1951, 1952, and 1953</i></p>
<p class="center">[In millions of U. S. dollars]</p>
<table id="Table2" class="wide"
summary="Exports of principal free-world countries to Soviet bloc,
1951, 1952, and 1953">
<tr>
<th rowspan="2" class="middle no-left">Country</th>
<th colspan="4">Exports to world</th>
<th colspan="4" class="no-right">Exports to Soviet bloc</th>
</tr>
<tr>
<th>1951</th><th>1952</th><th colspan="2">1953 as indicated </th>
<th>1951</th><th>1952</th><th colspan="2" class="no-right">1953 as indicated</th>
</tr>
<tr>
<th class="indent0">Anglo-Egyp. Sudan</th>
<td class="sides">183.5 </td><td class="sides">122.6</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">127.5</td>
<td class="sides">0.8 </td><td class="sides">0.7 </td>
<td class="tdl"> Jan.-Dec. </td><td class="tdr">0.1</td>
</tr>
<tr>
<th class="indent0 sides">Argentina</th>
<td class="sides"> 1,152.3</td><td class="sides">702.3</td>
<td class="tdl">Jan.-Aug.</td><td class="tdr">790.4</td>
<td class="sides"> 34.5 </td><td class="sides"> 12.2 </td>
<td class="tdl"> Jan.-Aug.</td><td class="tdr">11.3</td>
</tr>
<tr>
<th class="indent0 sides">Australia</th>
<td class="sides"> 2,047.0</td><td class="sides"> 1,716.2</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 1,977.2</td>
<td class="sides"> 55.5 </td><td class="sides">8.9 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">61.5</td>
</tr>
<tr>
<th class="indent0 sides">Austria </th>
<td class="sides">453.8</td><td class="sides">505.5</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">532.9</td>
<td class="sides"> 60.5 </td><td class="sides"> 64.4 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">58.4</td>
</tr>
<tr>
<th class="indent0 sides">Belgium-Luxembourg</th>
<td class="sides"> 2,651.4</td><td class="sides"> 2,451.0</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 2,259.3</td>
<td class="sides"> 64.4 </td><td class="sides"> 60.1 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">66.1</td>
</tr>
<tr>
<th class="indent0 sides">Brazil</th>
<td class="sides"> 1,757.4</td><td class="sides"> 1,408.8</td>
<td class="tdl">Jan.-Nov.</td><td class="tdr">1,363.7</td>
<td class="sides">7.9 </td><td class="sides">6.5 </td>
<td class="tdl"> Jan.-Nov.</td><td class="tdr">10.7</td>
</tr>
<tr>
<th class="indent0 sides">Canada</th>
<td class="sides"> 3,608.0</td><td class="sides"> 4,396.4</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 4,184.8</td>
<td class="sides">.9 </td><td class="sides">.6 </td>
<td class="tdl"> Jan.-Dec. </td><td class="tdr">.5</td>
</tr>
<tr>
<th class="indent0 sides">Ceylon</th>
<td class="sides">399.9</td><td class="sides">315.5</td>
<td class="tdl">Jan.-Dee. </td><td class="tdr">329.3</td>
<td class="sides">8.5 </td><td class="sides"> 28.9 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">51.5</td>
</tr>
<tr>
<th class="indent0 sides">Chile </th>
<td class="sides">376.8</td><td class="sides">461.8</td>
<td class="tdl">Jan.-Aug. </td><td class="tdr">229.2</td>
<td class="sides">
(<a href="#TABLE2_NOTE1" class="fnanchor">1</a>)</td>
<td class="sides">
(<a href="#TABLE2_NOTE1" class="fnanchor">1</a>)</td>
<td class="tdl"> Jan.-Aug.</td>
<td class="tdl"> (—)</td>
</tr>
<tr>
<th class="indent0 sides">Denmark</th>
<td class="sides">838.8</td><td class="sides">849.1</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">893.9</td>
<td class="sides"> 40.0 </td><td class="sides">33.9</td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">44.3</td>
</tr>
<tr>
<th class="indent0 sides">Finland
<a href="#TABLE2_NOTE2" class="fnanchor">2</a></th>
<td class="sides">866.5</td><td class="sides">717.3</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">572.0</td>
<td class="sides">148.4 </td><td class="sides">183.5 </td>
<td class="tdl"> Jan.-Dec. </td><td class="tdr">179.3</td>
</tr>
<tr>
<th class="indent0 sides">France</th>
<td class="sides"> 4,240.6</td><td class="sides"> 4,046.9</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">4,019.4</td>
<td class="sides"> 40.5 </td><td class="sides"> 42.1 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">63.3</td>
</tr>
<tr>
<th class="indent0 sides">French Morocco </th>
<td class="sides">251.9</td><td class="sides">273.8</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">268.1</td>
<td class="sides">3.1 </td><td class="sides">1.5 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">1.9</td>
</tr>
<tr>
<th class="indent0 sides">Germany, Fed. Repub. </th>
<td class="sides"> 3,508.3</td><td class="sides"> 4,072.4</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 4,477.9</td>
<td class="sides">103.1 </td><td class="sides"> 88.2 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr"> 139.4</td>
</tr>
<tr>
<th class="indent0 sides">Gold Coast</th>
<td class="sides">255.5</td><td class="sides">241.6</td>
<td class="tdl">Jan.-Sept. </td><td class="tdr">192.4</td>
<td class="sides">9.6 </td><td class="sides"> 12.0 </td>
<td class="tdl"> Jan.-Sept.</td><td class="tdr">8.1</td>
</tr>
<tr>
<th class="indent0 sides">Greece</th>
<td class="sides">101.8</td><td class="sides">119.9</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">132.0</td>
<td class="sides">.4 </td><td class="sides">.4 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">8.3</td>
</tr>
<tr>
<th class="indent0 sides">Hong Kong</th>
<td class="sides">775.8</td><td class="sides">509.8</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">478.4</td>
<td class="sides">280.7 </td><td class="sides"> 91.0 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">94.6</td>
</tr>
<tr>
<th class="indent0 sides">Iceland</th>
<td class="sides"> 44.6</td><td class="sides"> 39.3</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">43.4</td>
<td class="sides">3.5 </td><td class="sides">2.8 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">8.6</td>
</tr>
<tr>
<th class="indent0 sides">India </th>
<td class="sides"> 1,645.8</td><td class="sides"> 1,299.3</td>
<td class="tdl">Jan.-Nov.</td><td class="tdr">1,001.5</td>
<td class="sides"> 30.9 </td><td class="sides"> 12.7 </td>
<td class="tdl"> Jan.-Nov.</td><td class="tdr">9.2</td>
</tr>
<tr>
<th class="indent0 sides">Indonesia</th>
<td class="sides"> 1,230.7</td><td class="sides">911.1</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">819.5</td>
<td class="sides">2.3 </td><td class="sides">9.8 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">4.5</td>
</tr>
<tr>
<th class="indent0 noborder">Iran</th>
<td class="sides">590.6</td><td class="sides">152.4</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">125.7</td>
<td class="sides"> 22.6 </td><td class="sides"> 25.6 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">16.6</td>
</tr>
<tr>
<th class="indent0 sides">Ireland</th>
<td class="sides">228.0</td><td class="sides">284.1</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">319.2</td>
<td class="sides">.1 </td>
<td class="sides">(<a href="#TABLE2_NOTE1" class="fnanchor">1</a>)</td>
<td class="tdl"> Jan.-Dec</td><td class="tdr">.4</td>
</tr>
<tr>
<th class="indent0 sides">Israel</th>
<td class="sides"> 44.8</td><td class="sides"> 34.2</td>
<td class="tdl">Jan.-Oct.</td><td class="tdr">47.7</td>
<td class="sides">2.1 </td><td class="sides">
<a href="#TABLE2_NOTE3" class="fnanchor">3</a>2.1</td>
<td class="tdl"> Jan.-Oct.</td><td class="tdr">1.2</td>
</tr>
<tr>
<th class="indent0 sides">Italy </th>
<td class="sides"> 1,629.3</td><td class="sides"> 1,382.8</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 1,488.1</td>
<td class="sides"> 65.7 </td><td class="sides"> 58.7 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">62.7</td>
</tr>
<tr>
<th class="indent0 sides">Japan </th>
<td class="sides"> 1,354.5</td><td class="sides"> 1,272.9</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 1,273.6</td>
<td class="sides">5.8 </td><td class="sides">.8 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">4.6</td>
</tr>
<tr>
<th class="indent0 sides">Malaya</th>
<td class="sides"> 1,957.1</td><td class="sides"> 1,239.7</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">951.1</td>
<td class="sides"> 92.9 </td><td class="sides"> 30.3 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">35.5</td>
</tr>
<tr>
<th class="indent0 sides">Mexico</th>
<td class="sides">629.7</td><td class="sides">592.5</td>
<td class="tdl">Jan.-Sept. </td><td class="tdr">386.0</td>
<td class="sides">.6 </td><td class="sides">.5 </td>
<td class="tdl"> Jan.-Sept.</td><td class="tdr">.2</td>
</tr>
<tr>
<th class="indent0 sides">Netherlands </th>
<td class="sides"> 1,956.1</td><td class="sides"> 2,113.4</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 2,021.4</td>
<td class="sides"> 40.0 </td><td class="sides"> 36.4 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">60.8</td>
</tr>
<tr>
<th class="indent0 sides">New Zealand </th>
<td class="sides">694.8</td><td class="sides">674.3</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">659.7</td>
<td class="sides"> 26.1 </td><td class="sides"> 10.0 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">14.9</td>
</tr>
<tr>
<th class="indent0 sides">Norway</th>
<td class="sides">620.0</td><td class="sides">565.4</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">508.6</td>
<td class="sides"> 29.2 </td><td class="sides"> 30.0 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">32.9</td>
</tr>
<tr>
<th class="indent0 sides">Pakistan</th>
<td class="sides">749.8</td><td class="sides">532.5</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">438.8</td>
<td class="sides">72.6</td><td class="sides">119.6</td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">19.8</td>
</tr>
<tr>
<th class="indent0 sides">Portugal </th>
<td class="sides">262.9</td><td class="sides">237.2</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">218.8</td>
<td class="sides">4.8 </td><td class="sides">7.1 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">5.7</td>
</tr>
<tr>
<th class="indent0 sides">Spain </th>
<td class="sides">477.7</td><td class="sides">403.5</td>
<td class="tdl">Jan.-Oct.</td><td class="tdr">383.9</td>
<td class="sides">.4 </td><td class="sides">.3 </td>
<td class="tdl"> Jan.-Oct.</td>
<td class="tdr">(<a href="#TABLE2_NOTE1" class="fnanchor">1</a>)</td>
</tr>
<tr>
<th class="indent0 sides">Sweden</th>
<td class="sides"> 1,178.5</td><td class="sides"> 1,561.1</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 1,477.0</td>
<td class="sides">126.7 </td><td class="sides">119.0 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">69.7</td>
</tr>
<tr>
<th class="indent0 sides">Switzerland </th>
<td class="sides"> 1,082.0</td><td class="sides"> 1,100.1</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 1,204.3</td>
<td class="sides"> 86.0 </td><td class="sides"> 60.4 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">60.8</td>
</tr>
<tr>
<th class="indent0 sides">Turkey</th>
<td class="sides">314.0</td><td class="sides">362.9</td>
<td class="tdl">Jan.-Oct. </td><td class="tdr">306.5</td>
<td class="sides"> 24.7 </td><td class="sides"> 20.3 </td>
<td class="tdl"> Jan.-Oct.</td><td class="tdr">22.8</td>
</tr>
<tr>
<th class="indent0 sides">United Kingdom </th>
<td class="sides"> 7,578.3</td><td class="sides"> 7,541.5</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr"> 7,524.7</td>
<td class="sides">119.6 </td><td class="sides">155.7 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">92.7</td>
</tr>
<tr>
<th class="indent0 sides">United States</th>
<td class="sides">16,602.3</td><td class="sides">15,176.3</td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">15,747.4</td>
<td class="sides">2.8 </td><td class="sides">1.1 </td>
<td class="tdl"> Jan.-Dec.</td><td class="tdr">4.8</td>
</tr>
<tr>
<th class="bottom-only"> </th>
<td class="no-top"> </td><td class="no-top"> </td>
<td class="bottom-only"></td><td class="bottom-only"> </td>
<td class="no-top"> </td><td class="no-top"> </td>
<td class="bottom-only"> </td><td class="bottom-only"> </td>
</tr>
</table>
<ul class="tablenote nobullets nopadding">
<li><a name="TABLE2_NOTE1" id="TABLE2_NOTE1" class="fnanchor">1</a>
Less than $50,000.</li>
<li><a name="TABLE2_NOTE2" id="TABLE2_NOTE2" class="fnanchor">2</a>
Includes reparations deliveries to U.S.S.R. valued at $53,899,000
in 1951 and $35,719,000 in January-September 1952 when reparation
deliveries were terminated. Also includes transfers of “former German
assets” to the ceded territory of Janiskoski, valued at $15,000 in 1951.</li>
<li><a name="TABLE2_NOTE3" id="TABLE2_NOTE3" class="fnanchor">3</a>
January-September only.</li>
<li><a name="TABLE2_NOTE4" id="TABLE2_NOTE4">(—)</a> None.</li>
</ul>
<p class="tablenote"><span class="smcap">Note.</span>—Soviet bloc countries
are Albania, Bulgaria, Czechoslovakia, Soviet Zone of Germany, Hungary, Poland,
Rumania, U.S.S.R., Outer Mongolia, and China (data as far as possible refer to
Mainland China, including Manchuria and Inner Mongolia). Exports include
reexports for the following countries: Anglo-Egyptian Sudan, Australia, Ceylon,
Gold Coast, Hong Kong, India, Ireland, Japan, Malaya, Mexico, New Zealand,
Pakistan, United Kingdom, and United States. All other countries exclude reexports.
</p>
<p class="tablenote">Source: Official trade statistics of listed countries,
compiled by U. S. Department of Commerce.
</p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_91" id="Page_91">[Pg 91]</a></span></p>
<p class="center break">
<span class="smcap">Table</span> 3.—
<i>Imports of principal free-world countries from the Soviet bloc,
1951, 1952, and 1953</i></p>
<p class="center">[In millions of U. S. dollars]</p>
<table id="Table3" class="wide"
summary="Imports of principal free-world countries from the Soviet bloc,
1951, 1952, and 1953">
<tr>
<th rowspan="2" class="middle no-left">Country</th>
<th colspan="4">Imports from world</th>
<th colspan="4" class="no-right">Imports from Soviet bloc</th>
</tr>
<tr>
<th>1951</th><th>1952</th><th colspan="2">1953 as indicated</th>
<th>1951</th><th>1952</th>
<th colspan="2" class="no-right">1953 as indicated</th>
</tr>
<tr>
<th class="indent0 sides">Anglo-Egyp. Sudan </th>
<td class="sides"> 120.6 </td><td class="sides">175.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">145.5 </td>
<td class="sides"> 3.5 </td><td class="sides"> 5.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">3.6</td>
</tr>
<tr>
<th class="indent0 sides">Argentina </th>
<td class="sides"> 1,360.8 </td><td class="sides">1,178.3 </td>
<td class="tdl">Jan.-Aug.</td><td class="tdr">483.2 </td>
<td class="sides">38.6 </td><td class="sides">17.1 </td>
<td class="tdl">Jan.-Aug.</td><td class="tdr">9.3</td>
</tr>
<tr>
<th class="indent0 sides">Australia </th>
<td class="sides">2,112.5</td><td class="sides">1,733.8</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">1,298.5 </td>
<td class="sides">37.8 </td><td class="sides">14.7 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 10.8</td>
</tr>
<tr>
<th class="indent0 sides">Austria </th>
<td class="sides"> 652.7 </td><td class="sides">653.6 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">541.2 </td>
<td class="sides">72.0 </td><td class="sides">73.6</td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 60.4</td>
</tr>
<tr>
<th class="indent0 sides">Belgium-Luxembourg</th>
<td class="sides"> 2,544.0 </td><td class="sides">2,460.5 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">2,422.6 </td>
<td class="sides">57.8 </td><td class="sides">37.4 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 47.4</td>
</tr>
<tr>
<th class="indent0 sides">Brazil</th>
<td class="sides"> 2,010.6 </td><td class="sides">2,009.5</td>
<td class="tdl">Jan.-Nov.</td><td class="tdr">1,215.8 </td>
<td class="sides">10.3 </td><td class="sides"> 5.9 </td>
<td class="tdl">Jan.-Nov.</td><td class="tdr">8.0</td>
</tr>
<tr>
<th class="indent0 sides">Canada</th>
<td class="sides"> 3,877.1 </td><td class="sides">4,120.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">4,449.4 </td>
<td class="sides"> 8.1 </td><td class="sides"> 8.7 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 6.0</td>
</tr>
<tr>
<th class="indent0 sides">Ceylon</th>
<td class="sides"> 327.3 </td><td class="sides">357.5 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">337.6 </td>
<td class="sides"> 2.4 </td><td class="sides"> 8.0 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 45.5</td>
</tr>
<tr>
<th class="indent0 sides">Chile</th>
<td class="sides"> 329.1 </td><td class="sides">371.0 </td>
<td class="tdl">Jan.-Aug.</td><td class="tdr">213.7 </td>
<td class="sides"> 1.8 </td><td class="sides">.8 </td>
<td class="tdl">Jan.-Aug.</td><td class="tdr">1.2</td>
</tr>
<tr>
<th class="indent0 sides">Denmark </th>
<td class="sides"> 1,012.5 </td><td class="sides">962.1 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">1,000.3 </td>
<td class="sides">70.7 </td><td class="sides">39.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 40.6</td>
</tr>
<tr>
<th class="indent0 sides">Finland </th>
<td class="sides"> 676.0 </td><td class="sides">791.7 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">529.8 </td>
<td class="sides"> 108.2 </td><td class="sides"> 153.5 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">182.3</td>
</tr>
<tr>
<th class="indent0 sides">France</th>
<td class="sides"> 4,614.8 </td><td class="sides">4,547.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">4,166.1 </td>
<td class="sides">71.1 </td><td class="sides">64.2 </td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">56.9</td>
</tr>
<tr>
<th class="indent0 sides">French Morocco</th>
<td class="sides"> 456.2 </td><td class="sides">515.8 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">490.1 </td>
<td class="sides">15.8 </td><td class="sides"> 8.6 </td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">13.2</td>
</tr>
<tr>
<th class="indent0 sides">Germany, Federal Republic </th>
<td class="sides"> 3,532.2 </td><td class="sides">3,873.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">3,877.4 </td>
<td class="sides"> 131.8 </td><td class="sides">94.0 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">168.0</td>
</tr>
<tr>
<th class="indent0 sides">Gold Coast</th>
<td class="sides"> 177.3 </td><td class="sides">186.4 </td>
<td class="tdl">Jan.-Sept.</td><td class="tdr"> 143.3 </td>
<td class="sides"> 2.2 </td><td class="sides"> 1.6 </td>
<td class="tdl">Jan.-Sept.</td><td class="tdr">1.5</td>
</tr>
<tr>
<th class="indent0 sides">Greece</th>
<td class="sides"> 398.4 </td><td class="sides">346.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">294.3 </td>
<td class="sides">.6 </td><td class="sides">.6 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">3.8</td>
</tr>
<tr>
<th class="indent0 sides">Hong Kong </th>
<td class="sides"> 852.3 </td><td class="sides">661.4 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">677.7 </td>
<td class="sides"> 155.1 </td><td class="sides"> 146.6 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">150.0</td>
</tr>
<tr>
<th class="indent0 sides">Iceland </th>
<td class="sides">56.7 </td><td class="sides"> 55.8 </td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">68.2 </td>
<td class="sides"> 3.9 </td><td class="sides"> 3.7 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">6.3</td>
</tr>
<tr>
<th class="indent0 sides">India </th>
<td class="sides"> 1,767.8 </td><td class="sides">1,657.0 </td>
<td class="tdl">Jan.-Nov.</td><td class="tdr">1,100.6 </td>
<td class="sides">38.4 </td><td class="sides">38.8 </td>
<td class="tdl">Jan.-Nov.</td><td class="tdr">6.0</td>
</tr>
<tr>
<th class="indent0 sides">Indonesia </th>
<td class="sides"> 805.3 </td><td class="sides">924.0 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">753.0 </td>
<td class="sides"> 6.7 </td><td class="sides"> 5.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">6.9</td>
</tr>
<tr>
<th class="indent0 sides">Iran</th>
<td class="sides"> 249.1 </td><td class="sides">165.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">152.5 </td>
<td class="sides">23.6 </td><td class="sides">27.4 </td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">18.3</td>
</tr>
<tr>
<th class="indent0 sides">Ireland </th>
<td class="sides"> 572.6 </td><td class="sides">482.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">513.6 </td>
<td class="sides"> 7.8 </td><td class="sides"> 2.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">2.7</td>
</tr>
<tr>
<th class="indent0 sides">Israel</th>
<td class="sides"> 343.3 </td><td class="sides">
<a href="#TABLE3_NOTE1" class="fnanchor">1</a>280.3</td>
<td class="tdl">Jan.-Oct.</td><td class="tdr">233.7 </td>
<td class="sides">10.5 </td><td class="sides">
<a href="#TABLE3_NOTE1" class="fnanchor">1</a>4.8</td>
<td class="tdl">Jan.-Oct.</td><td class="tdr">2.1</td>
</tr>
<tr>
<th class="indent0 sides">Italy </th>
<td class="sides"> 2,118.7 </td><td class="sides">2,313.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">2,395.1 </td>
<td class="sides">80.0 </td><td class="sides">86.4 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 53.8</td>
</tr>
<tr>
<th class="indent0 sides">Japan </th>
<td class="sides"> 1,940.9 </td><td class="sides">2,028.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">2,409.5 </td>
<td class="sides">23.1 </td><td class="sides">17.9 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 37.8</td>
</tr>
<tr>
<th class="indent0 sides">Malaya</th>
<td class="sides"> 1,542.1 </td><td class="sides">1,256.9 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">1,054.4 </td>
<td class="sides">46.7 </td><td class="sides">42.5 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 40.3</td>
</tr>
<tr>
<th class="indent0 sides">Mexico</th>
<td class="sides"> 783.0 </td><td class="sides">739.2 </td>
<td class="tdl">Jan.-Sept.</td><td class="tdr"> 539.1 </td>
<td class="sides"> 2.1 </td><td class="sides"> 1.5 </td>
<td class="tdl">Jan.-Sept.</td><td class="tdr">.8</td>
</tr>
<tr>
<th class="indent0 sides">Netherlands</th>
<td class="sides"> 2,561.3 </td><td class="sides">2,257.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">2,354.3 </td>
<td class="sides">66.9 </td><td class="sides">59.3 </td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">68.6</td>
</tr>
<tr>
<th class="indent0 sides">New Zealand </th>
<td class="sides"> 578.3 </td><td class="sides">644.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">457.8 </td>
<td class="sides"> 2.9 </td><td class="sides"> 2.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">1.9</td>
</tr>
<tr>
<th class="indent0 sides">Norway</th>
<td class="sides"> 877.3 </td><td class="sides">872.7 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">912.0 </td>
<td class="sides">29.4 </td><td class="sides">35.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 43.9</td>
</tr>
<tr>
<th class="indent0 sides">Pakistan</th>
<td class="sides"> 519.9 </td><td class="sides">609.7 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">350.2 </td>
<td class="sides">24.6 </td><td class="sides"> 8.6 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">4.2</td>
</tr>
<tr>
<th class="indent0 sides">Portugal</th>
<td class="sides"> 329.4 </td><td class="sides">346.6 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">330.6 </td>
<td class="sides"> 1.8 </td><td class="sides">.8 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> .9</td>
</tr>
<tr>
<th class="indent0 sides">Spain </th>
<td class="sides"> 387.0 </td><td class="sides">518.5 </td>
<td class="tdl">Jan.-Oct.</td><td class="tdr">481.2 </td>
<td class="sides">.4 </td><td class="sides">.2 </td>
<td class="tdl">Jan.-Oct.</td><td class="tdr">
(<a href="#TABLE3_NOTE2" class="fnanchor">2</a>)</td>
</tr>
<tr>
<th class="indent0 sides">Sweden</th>
<td class="sides"> 1,775.2 </td><td class="sides">1,727.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">1,577.0 </td>
<td class="sides"> 137.0 </td><td class="sides"> 108.4 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 61.4</td>
</tr>
<tr>
<th class="indent0 sides">Switzerland </th>
<td class="sides"> 1,364.4 </td><td class="sides">1,205.9 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">1,182.8 </td>
<td class="sides">57.4 </td><td class="sides">45.4 </td>
<td class="tdl">Jan.-Dec. </td><td class="tdr">50.7</td>
</tr>
<tr>
<th class="indent0 sides">Taiwan</th>
<td class="sides">85.8 </td><td class="sides">113.0 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">105.8 </td>
<td class="sides"> 6.8 </td><td class="sides"> 9.7 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">5.8</td>
</tr>
<tr>
<th class="indent0 sides">Turkey</th>
<td class="sides"> 402.0 </td><td class="sides">555.9 </td>
<td class="tdl">Jan.-Oct.</td><td class="tdr">428.8 </td>
<td class="sides">20.0 </td><td class="sides">20.6 </td>
<td class="tdl">Jan.-Oct.</td><td class="tdr"> 22.8</td>
</tr>
<tr>
<th class="indent0 sides">United Kingdom</th>
<td class="sides">10,959.8 </td><td class="sides">9,748.2 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">9,365.7 </td>
<td class="sides"> 287.8 </td><td class="sides"> 243.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr">235.6</td>
</tr>
<tr>
<th class="indent0 sides">United States </th>
<td class="sides">10,967.4 </td><td class="sides"> 10,716.8 </td>
<td class="tdl">Jan.-Dec.</td><td class="tdr"> 10,873.7 </td>
<td class="sides"> 110.3 </td><td class="sides">67.3 </td>
<td class="tdl">Jan.-Dec.</td><td class="noborder"> 45.6</td>
</tr>
<tr>
<th class="bottom-only"> </th>
<td class="no-top"> </td><td class="no-top"> </td>
<td class="bottom-only"></td><td class="bottom-only"> </td>
<td class="no-top"> </td><td class="no-top"> </td>
<td class="bottom-only"> </td><td class="bottom-only"> </td>
</tr>
</table>
<ul class="tablenote nobullets nopadding">
<li><a name="TABLE3_NOTE1" id="TABLE3_NOTE1" class="fnanchor">1</a>
January-September only.</li>
<li><a name="TABLE3_NOTE2" id="TABLE3_NOTE2" class="fnanchor">2</a>
Less than $50,000.</li>
</ul>
<p class="tablenote"><span class="smcap">Note</span>.—Soviet Bloc
countries are Albania, Bulgaria, Czechoslovakia, Soviet Zone of Germany,
Hungary, Poland, Rumania, U.S.S.R., Outer Mongolia, and China
(data as far as possible refer to Mainland China including Manchuria and
Inner Mongolia).</p>
<p class="tablenote">Source: Official trade statistics of listed countries,
compiled by U. S. Department of Commerce.</p>
<hr class="chapter"/>
<p><span class="pagenum"><a name="Page_92" id="Page_92">[Pg 92]</a></span></p>
<p class="center break"><span class="smcap">Table</span> 4.—
<i>Free-world exports to the Soviet bloc, monthly, 1952 and 1953</i></p>
<p class="center">[In millions of U. S. dollars]</p>
<table id="Table4" class="avg"
summary="Free-world exports to the Soviet bloc, monthly, 1952 and 1953">
<tr>
<th class="center middle no-left">Month</th>
<th>Total<br />Soviet bloc</th><th>European<br />Satellites</th>
<th class="middle">U.S.S.R.</th><th class="middle no-right">China</th>
</tr>
<tr>
<th class="indent0">1952:</th><td class="sides"></td><td class="sides"></td>
<td class="sides"></td><td class="noborder"></td>
</tr>
<tr>
<th class="indent2">January</th>
<td class="sides">107.8</td><td class="sides">58.7</td>
<td class="sides">39.1</td><td class="noborder">10.0</td>
</tr>
<tr>
<th class="indent2">February</th>
<td class="sides">121.4 </td><td class="sides"> 51.3 </td>
<td class="sides"> 48.9 </td><td class="noborder"> 21.2</td>
</tr>
<tr>
<th class="indent2">March</th>
<td class="sides">129.2 </td><td class="sides"> 67.8 </td>
<td class="sides"> 53.4 </td><td class="noborder"> 8.0</td>
</tr>
<tr>
<th class="indent2">April</th>
<td class="sides">114.8 </td><td class="sides"> 53.1 </td>
<td class="sides"> 40.7 </td><td class="noborder"> 21.0</td>
</tr>
<tr>
<th class="indent2">May</th>
<td class="sides">139.4 </td><td class="sides"> 52.4 </td>
<td class="sides"> 52.5 </td><td class="noborder"> 34.5</td>
</tr>
<tr>
<th class="indent2">June</th>
<td class="sides">109.4 </td><td class="sides"> 56.1 </td>
<td class="sides"> 30.7 </td><td class="noborder"> 22.6</td>
</tr>
<tr>
<th class="indent2">July</th>
<td class="sides">118.0 </td><td class="sides"> 53.5 </td>
<td class="sides"> 39.2 </td><td class="noborder"> 25.3</td>
</tr>
<tr>
<th class="indent2">August</th>
<td class="sides">125.4 </td><td class="sides"> 53.2 </td>
<td class="sides"> 39.3 </td><td class="noborder"> 32.9</td>
</tr>
<tr>
<th class="indent2">September</th>
<td class="sides">89.5 </td><td class="sides"> 45.6 </td>
<td class="sides"> 23.9 </td><td class="noborder"> 20.0</td>
</tr>
<tr>
<th class="indent2">October</th>
<td class="sides">104.6 </td><td class="sides"> 50.4 </td>
<td class="sides"> 34.6 </td><td class="noborder"> 19.6</td>
</tr>
<tr>
<th class="indent2">November</th>
<td class="sides">120.4 </td><td class="sides"> 55.7 </td>
<td class="sides"> 40.1 </td><td class="noborder"> 24.6</td>
</tr>
<tr>
<th class="indent2">December</th>
<td class="sides">139.3 </td><td class="sides"> 72.5 </td>
<td class="sides"> 38.0 </td><td class="noborder"> 28.8</td>
</tr>
<tr>
<th class="indent0">1953:</th>
<td class="sides"></td><td class="sides"></td><td class="sides"></td><td class="noborder"></td>
</tr>
<tr>
<th class="indent2">January</th>
<td class="sides">119.3 </td><td class="sides"> 54.9 </td>
<td class="sides"> 25.9 </td><td class="noborder"> 38.5</td>
</tr>
<tr>
<th class="indent2">February</th>
<td class="sides">97.1 </td><td class="sides"> 48.6 </td>
<td class="sides"> 23.5 </td><td class="noborder"> 25.0</td>
</tr>
<tr>
<th class="indent2">March</th>
<td class="sides">123.9 </td><td class="sides"> 61.2 </td>
<td class="sides"> 33.3 </td><td class="noborder"> 29.4</td>
</tr>
<tr>
<th class="indent2">April</th>
<td class="sides">110.9 </td><td class="sides"> 53.2 </td>
<td class="sides"> 26.8 </td><td class="noborder"> 30.9</td>
</tr>
<tr>
<th class="indent2">May</th>
<td class="sides">88.4 </td><td class="sides"> 43.4 </td>
<td class="sides"> 25.8 </td><td class="noborder"> 19.2</td>
</tr>
<tr>
<th class="indent2">June</th>
<td class="sides">100.9 </td><td class="sides"> 51.9 </td>
<td class="sides"> 27.2 </td><td class="noborder"> 21.8</td>
</tr>
<tr>
<th class="indent2">July</th>
<td class="sides">104.4 </td><td class="sides"> 55.2 </td>
<td class="sides"> 30.7 </td><td class="noborder"> 18.5</td>
</tr>
<tr>
<th class="indent2">August</th>
<td class="sides">113.2 </td><td class="sides"> 56.1 </td>
<td class="sides"> 37.8 </td><td class="noborder"> 19.3</td>
</tr>
<tr>
<th class="indent2">September</th>
<td class="sides">90.3 </td><td class="sides"> 47.7 </td>
<td class="sides"> 30.0 </td><td class="noborder"> 12.6</td>
</tr>
<tr>
<th class="indent2">October</th>
<td class="sides">118.4</td><td class="sides">50.7</td>
<td class="sides">46.8</td><td class="noborder">20.9</td>
</tr>
<tr>
<th class="indent2">November</th>
<td class="sides">140.3</td><td class="sides">67.0</td>
<td class="sides">50.6</td><td class="noborder">22.5</td>
</tr>
<tr>
<th class="indent2">December</th>
<td class="sides">144.4</td><td class="sides">68.7</td>
<td class="sides">53.2</td><td class="noborder">22.2</td>
</tr>
<tr>
<th class="bottom-only"> </th>
<td class="no-top"> </td><td class="no-top"> </td>
<td class="no-top"></td><td class="bottom-only"></td>
</tr>
</table>
<ul class="tablenote nobullets nopadding">
<li><span class="smcap">Note</span>. — Monthly data are preliminary and unrevised.
Therefore, they will not add exactly to annual world totals.
China data refer, wherever possible, to Mainland (Communist) China, including
Manchuria and Inner Mongolia.</li>
<li>Source: Official trade statistics of the free world,
compiled by U. S. Department of Commerce.</li>
</ul>
<hr class="chapter"/>
<div id="Page_92mid"></div>
<p class="center"><span class="smcap">Table</span> 5.—
<i>Free world imports from the Soviet bloc, monthly, 1952 and 1953</i></p>
<p class="center">[In millions of U. S. dollars]</p>
<table id="Table5" class="avg"
summary="Free world imports from the Soviet bloc, monthly, 1952 and 1953">
<tr>
<th class="center middle no-left">Month</th>
<th>Total<br />Soviet bloc</th>
<th>European<br />Satellites</th>
<th class="middle">U.S.S.R.</th>
<th class="middle no-right">China</th>
</tr>
<tr>
<th class="indent0">1952:</th>
<td class="sides"> </td><td class="sides"> </td>
<td class="sides"></td><td class="noborder"></td>
</tr>
<tr>
<th class="indent1">January </th>
<td class="sides">153.8</td><td class="sides">76.0</td>
<td class="sides">43.7</td><td class="noborder">34.1</td>
</tr>
<tr>
<th class="indent1">February</th>
<td class="sides">145.2</td><td class="sides">66.0</td>
<td class="sides">45.6</td><td class="noborder">33.6</td>
</tr>
<tr>
<th class="indent1">March</th>
<td class="sides">138.5</td><td class="sides">68.0</td>
<td class="sides">44.5</td><td class="noborder">26.0</td>
</tr>
<tr>
<th class="indent1">April</th>
<td class="sides">148.3</td><td class="sides">63.0</td>
<td class="sides">53.5</td><td class="noborder"> 31.8</td>
</tr>
<tr>
<th class="indent1">May</th>
<td class="sides">133.4</td><td class="sides">60.6</td>
<td class="sides">47.3</td><td class="noborder">25.5</td>
</tr>
<tr>
<th class="indent1">June</th>
<td class="sides">114.0</td><td class="sides">58.7</td>
<td class="sides">35.0</td><td class="noborder">20.3</td>
</tr>
<tr>
<th class="indent1">July</th>
<td class="sides">125.0</td><td class="sides">66.9</td>
<td class="sides">28.7</td><td class="noborder">29.4</td>
</tr>
<tr>
<th class="indent1">August</th>
<td class="sides">122.1</td><td class="sides">62.7</td>
<td class="sides">30.0</td><td class="noborder">29.4</td>
</tr>
<tr>
<th class="indent1">September</th>
<td class="sides">120.6</td><td class="sides">56.7 </td>
<td class="sides">31.9</td><td class="noborder">32.0</td>
</tr>
<tr>
<th class="indent1">October</th>
<td class="sides">124.0</td><td class="sides">59.7</td>
<td class="sides">35.6</td><td class="noborder">28.7</td>
</tr>
<tr>
<th class="indent1">November</th>
<td class="sides">135.3</td><td class="sides">65.2</td>
<td class="sides">35.7</td><td class="noborder">34.4</td>
</tr>
<tr>
<th class="indent1"> December</th>
<td class="sides"> 145.7 </td><td class="sides">74.8 </td>
<td class="sides"> 30.5 </td><td class="noborder"> 40.4</td>
</tr>
<tr>
<th class="indent0">1953:</th>
<td class="sides"> </td><td class="sides"> </td>
<td class="sides"></td><td class="noborder"></td>
</tr>
<tr>
<th class="indent1"> January </th>
<td class="sides"> 135.4 </td><td class="sides">67.8 </td>
<td class="sides"> 30.9 </td><td class="noborder"> 36.1</td>
</tr>
<tr>
<th class="indent1"> February</th>
<td class="sides"> 103.2 </td><td class="sides">51.3 </td>
<td class="sides"> 16.8 </td><td class="noborder"> 34.3</td>
</tr>
<tr>
<th class="indent1"> March </th>
<td class="sides"> 115.8 </td><td class="sides">59.6 </td>
<td class="sides"> 19.5 </td><td class="noborder"> 36.2</td>
</tr>
<tr>
<th class="indent1"> April </th>
<td class="sides"> 139.9 </td><td class="sides">74.3 </td>
<td class="sides"> 24.2 </td><td class="noborder"> 40.2</td>
</tr>
<tr>
<th class="indent1"> May </th>
<td class="sides"> 127.6 </td><td class="sides">61.6 </td>
<td class="sides"> 25.0 </td><td class="noborder"> 40.5</td>
</tr>
<tr>
<th class="indent1"> June</th>
<td class="sides"> 132.0 </td><td class="sides">63.3 </td>
<td class="sides"> 29.3 </td><td class="noborder"> 39.2</td>
</tr>
<tr>
<th class="indent1"> July</th>
<td class="sides"> 124.6 </td><td class="sides">62.2 </td>
<td class="sides"> 29.5 </td><td class="noborder"> 32.6</td>
</tr>
<tr>
<th class="indent1"> August</th>
<td class="sides"> 135.3 </td><td class="sides">58.4 </td>
<td class="sides"> 44.9 </td><td class="noborder"> 30.5</td>
</tr>
<tr>
<th class="indent1"> September </th>
<td class="sides"> 141.3 </td><td class="sides">65.2 </td>
<td class="sides"> 37.5 </td><td class="noborder"> 38.1</td>
</tr>
<tr>
<th class="indent1"> October </th>
<td class="sides"> 147.2 </td><td class="sides">71.5 </td>
<td class="sides"> 40.8 </td><td class="noborder"> 33.7</td>
</tr>
<tr>
<th class="indent1"> November</th>
<td class="sides"> 129.7 </td><td class="sides">67.6 </td>
<td class="sides"> 34.9 </td><td class="noborder"> 26.8</td>
</tr>
<tr>
<th class="indent1"> December</th>
<td class="sides"> 146.2 </td><td class="sides">63.7 </td>
<td class="sides"> 44.3 </td><td class="noborder"> 37.3</td>
</tr>
<tr>
<th class="bottom-only"> </th>
<td class="no-top"> </td><td class="no-top"> </td>
<td class="no-top"></td><td class="bottom-only"></td>
</tr>
</table>
<ul class="tablenote nobullets nopadding">
<li><span class="smcap">Note</span>. — Monthly data are preliminary and
unrevised.
Therefore, they will not add exactly to annual world totals.
China data refer, wherever possible, to Mainland (Communist) China,
including Manchuria and Inner Mongolia.
In 1952 United States statistics included Outer Mongolia with China,
where it is shown above.
In 1953 United States trade with Outer Mongolia was separately available;
it is therefore included in the total bloc column above, but not with China.
United States monthly 1953 imports from Outer Mongolia were as follows in
thousands of dollars: January, 647; February, 800; March, 517; April 1,185;
May, 474; June, 228; July, 287; August, 1,492; September, 526;
October, 1,243; November, 357; December, 902.</li>
<li>Source: Official trade statistics of the free world,
compiled by U. S. Department of Commerce.</li>
</ul>
<hr class="chapter"/>
<p><span class="pagenum"><a name="Page_93" id="Page_93">[Pg 93]</a></span></p>
<p class="center break"><span class="smcap">Table</span> 6.—
<i>Free-world exports to Communist China, semiannual, 1952 and 1953</i></p>
<p class="center">[In millions of U. S. dollars]</p>
<table id="Table6" class="wide"
summary="Free-world exports to Communist China, semiannual, 1952 and 1953">
<tr>
<th class="no-left middle">Country</th>
<th>First<br />half<br />1952</th><th>Second<br />half<br />1952</th>
<th>First<br />half<br />1953</th><th>Second<br />half<br />1953</th>
<th class="no-right middle">Major items in 1953</th>
</tr>
<tr>
<th class="indent1 noborder">
Free world exports, total </th>
<td class="full">112.8</td>
<td class="full">143.7</td>
<td class="full">158.9</td>
<td class="full"><a href="#TABLE6_NOTE1" class="fnanchor">1</a>111.1</td>
<td> </td>
</tr>
<tr>
<th class="indent0">Hong Kong</th>
<td class="sides"> 29.1 </td><td class="sides"> 61.9</td>
<td class="sides"> 63.7 </td><td class="sides"> 30.9</td>
<td class="noborder tdl"> Medicine, dyestuffs, fertilizers, machinery.</td>
</tr>
<tr>
<th class="indent0">Ceylon</th>
<td class="sides"> 12.5 </td><td class="sides"> 13.5</td>
<td class="sides"> 25.0 </td><td class="sides"> 25.9</td>
<td class="noborder tdl"> Rubber, coconut oil.</td>
</tr>
<tr>
<th class="indent0 topalign">West Germany</th>
<td class="sides topalign">.2 </td><td class="sides topalign">2.6</td>
<td class="sides topalign"> 13.7 </td><td class="sides topalign"> 11.3</td>
<td class="noborder tdl topalign"> Iron and steel, scientific instruments,
electrical machinery.</td>
</tr>
<tr>
<th class="indent0 topalign">United Kingdom</th>
<td class="sides topalign">1.9</td><td class="sides topalign">10.9</td>
<td class="sides topalign">8.7</td><td class="sides topalign">8.8</td>
<td class="noborder tdl topalign">Wool tops, mechanical handling equipment,
sodium compounds, piece goods, ammonium sulphate, textile machinery.</td>
</tr>
<tr>
<th class="indent0">Egypt</th>
<td class="sides">2.5</td><td class="sides">6.4</td>
<td class="sides">4.9</td><td class="sides">5.5</td>
<td class="noborder tdl">Cotton.</td>
</tr>
<tr>
<th class="indent0">Switzerland</th>
<td class="sides">2.5</td><td class="sides">3.5</td>
<td class="sides">10.0</td><td class="sides">5.5</td>
<td class="noborder tdl">Watches, coal tar dyes, indigo.</td>
</tr>
<tr>
<th class="indent0 topalign">Finland</th>
<td class="sides topalign">.1</td><td class="sides topalign">6.5</td>
<td class="sides topalign">1.0</td><td class="sides topalign">4.4</td>
<td class="noborder tdl topalign">Paper, cellulose, copper semi-manufactures.</td>
</tr>
<tr>
<th class="indent0">Australia</th>
<td class="sides">.2</td><td class="sides">.4</td>
<td class="sides">1.4</td><td class="sides">3.9</td>
<td class="noborder tdl">Greasy wool, wool tops.</td>
</tr>
<tr>
<th class="indent0">Pakistan</th>
<td class="sides">54.5</td><td class="sides">29.4</td>
<td class="sides">3.6</td><td class="sides">3.7</td>
<td class="noborder tdl"> Cotton.</td>
</tr>
<tr>
<th class="indent0 topalign">France </th>
<td class="sides topalign">.9 </td><td class="sides">2.4</td>
<td class="sides"> 9.7 </td><td class="sides"> 2.7</td>
<td class="noborder tdl">Iron and steel, machine tools, chemicals and pharmaceuticals.</td>
</tr>
<tr>
<th class="indent0">Japan</th>
<td class="sides">.3 </td><td class="sides"> .2</td>
<td class="sides"> 2.3 </td><td class="sides"> 2.2</td>
<td class="noborder tdl"> Textile machinery, seaweed, superphosphates,
medicines.</td>
</tr>
<tr>
<th class="indent0">Netherlands</th>
<td class="sides">(<a href="#TABLE6_NOTE4" class="fnanchor">4</a>)</td>
<td class="sides">(<a href="#TABLE6_NOTE4" class="fnanchor">4</a>)</td>
<td class="sides">2.6</td><td class="sides">1.3</td>
<td class="noborder tdl">Ammonium sulphate.</td>
</tr>
<tr>
<th class="indent0">Italy</th>
<td class="sides"> 2.1 </td><td class="sides">1.5</td>
<td class="sides"> 3.9 </td><td class="sides">.8</td>
<td class="noborder tdl">Chemical fertilizer, artificial yarn, woolen blankets.</td>
</tr>
<tr>
<th class="indent0">Sweden</th>
<td class="sides">.2 </td><td class="sides"> .4</td>
<td class="sides"> 2.3 </td><td class="sides">.4</td>
<td class="noborder tdl">Paper and paper manufactures.</td>
</tr>
<tr>
<th class="indent0">India</th>
<td class="sides"> 5.2 </td><td class="sides">1.3</td>
<td class="sides"> 2.2 </td>
<td class="sides"><a href="#TABLE6_NOTE2" class="fnanchor">2</a>.2</td>
<td class="noborder tdl">Jute bags.</td>
</tr>
<tr>
<th class="indent0">Belgium-Luxembourg</th>
<td class="sides">.3</td><td class="sides">.3</td>
<td class="sides">1.3</td><td class="sides">.1</td>
<td class="noborder tdl">Ammonium sulphate and sulfonitrate.</td>
</tr>
<tr>
<th class="indent0">Norway</th>
<td class="sides">(<a href="#TABLE6_NOTE4" class="fnanchor">4</a>)</td>
<td class="sides">1.7</td>
<td class="sides">.9</td>
<td class="sides">(<a href="#TABLE6_NOTE4" class="fnanchor">4</a>)</td>
<td class="noborder tdl">Paper.</td>
</tr>
<tr>
<th class="indent0">Other</th>
<td class="sides">.3</td>
<td class="sides">.8</td>
<td class="sides">1.7</td>
<td class="sides">(<a href="#TABLE6_NOTE3" class="fnanchor">3</a>)</td>
<td class="tdl"> </td>
</tr>
<tr> <!-- blank line at bottom of table -->
<th class="bottom-only"> </th>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="bottom-only"> </td>
</tr>
</table>
<ul class="tablenote nobullets nopadding">
<li><a name="TABLE6_NOTE1" id="TABLE6_NOTE1" class="fnanchor">1</a>
Estimate.</li>
<li><a name="TABLE6_NOTE2" id="TABLE6_NOTE2" class="fnanchor">2</a>
July-November only.</li>
<li><a name="TABLE6_NOTE3" id="TABLE6_NOTE3" class="fnanchor">3</a>
Not available.</li>
<li><a name="TABLE6_NOTE4" id="TABLE6_NOTE4" class="fnanchor">4</a>
Less than $50,000.</li>
</ul>
<ul class="tablenote nobullets nopadding">
<li><span class="smcap">Note.</span> —
Totals and Swiss data are adjusted to exclude those watches known to be
destined for Hong Kong and Malaya.
So far as possible, data refer to Mainland (Communist) China, including
Manchuria and Inner Mongolia.</li>
<li>Source: Official trade statistics of free-world countries,
compiled by U. S. Department of Commerce.</li>
</ul>
<hr class="chapter"/>
<p><span class="pagenum"><a name="Page_94" id="Page_94">[Pg 94]</a></span></p>
<p class="center break"><span class="smcap">Table</span> 7.—
<i>Free-world imports from Communist China, semiannual, 1952 and 1953</i></p>
<p class="center">[In millions of U. S. dollars]</p>
<table id="Table7" class="wide"
summary="Free-world imports from Communist China, semiannual, 1952 and 1953">
<tr>
<th class="no-left">Country</th>
<th>First<br />half<br />1952</th><th>Second<br />half<br />1952</th>
<th>First<br />half<br />1953</th><th>Second<br />half<br />1953</th>
<th class="no-right">Major items in 1953</th>
</tr>
<tr>
<th class="indent1">
Free world imports, total </th>
<td class="full">171.2</td>
<td class="full">194.6</td>
<td class="full">226.6</td>
<td class="full"><a href="#TABLE7_NOTE1" class="fnanchor">1</a>198.4</td>
<td class="noborder"> </td>
</tr>
<tr>
<th class="indent0">Hong Kong </th>
<td class="sides"> 60.7 </td><td class="sides"> 84.6 </td>
<td class="sides"> 84.9 </td><td class="sides"> 65.1 </td>
<td class="noborder tdl">Fruits and vegetables, textiles, vegetable oils,
pigs and poultry, eggs, plants and seeds.</td>
</tr>
<tr>
<th class="indent0">Ceylon</th>
<td class="sides"> .3 </td><td class="sides"> 6.6 </td>
<td class="sides"> 22.1 </td><td class="sides"> 21.8 </td>
<td class="noborder tdl">Rice.</td>
</tr>
<tr>
<th class="indent0">West Germany </th>
<td class="sides"> 8.2 </td><td class="sides"> 9.4 </td>
<td class="sides"> 14.8 </td><td class="sides"> 18.5 </td>
<td class="noborder tdl">Oilseeds, vegetable oils, eggs.</td>
</tr>
<tr>
<th class="indent0">Japan </th>
<td class="sides"> 5.6 </td><td class="sides"> 9.3 </td>
<td class="sides"> 12.6 </td><td class="sides"> 17.1 </td>
<td class="noborder tdl">Oilseeds, cashmere, wool, raw silk, pulses.</td>
</tr>
<tr>
<th class="indent0">United Kingdom</th>
<td class="sides"> 5.0 </td><td class="sides"> 3.4 </td>
<td class="sides"> 12.0 </td><td class="sides"> 16.8 </td>
<td class="noborder tdl">Eggs, hair, oilseeds.</td>
</tr>
<tr>
<th class="indent0">Malaya</th>
<td class="sides"> 21.0 </td><td class="sides"> 18.5 </td>
<td class="sides"> 20.3 </td><td class="sides"> 14.1 </td>
<td class="noborder tdl">Fruits and vegetable, eggs, plants and seeds,
paper and manufactures, animal feeding stuffs.</td>
</tr>
<tr>
<th class="indent0">Switzerland </th>
<td class="sides"> 3.5 </td><td class="sides"> 6.4 </td>
<td class="sides"> 8.1 </td><td class="sides"> 8.0 </td>
<td class="noborder tdl">Oilseeds, raw silk, silk fabrics.</td>
</tr>
<tr>
<th class="indent0">France </th>
<td class="sides"> 3.1 </td><td class="sides"> 2.5 </td>
<td class="sides"> 5.2 </td><td class="sides"> 5.8 </td>
<td class="noborder tdl">Textile yarn and fibers, grains, bristles,
casings, essential oils.</td>
</tr>
<tr>
<th class="indent0">Netherlands </th>
<td class="sides"> 2.8 </td><td class="sides"> 2.1 </td>
<td class="sides"> 11.8 </td><td class="sides"> 3.4 </td>
<td class="noborder tdl">Oilseeds.</td>
</tr>
<tr>
<th class="indent0">Belgium-Luxembourg</th>
<td class="sides"> 2.5 </td><td class="sides"> 2.2 </td>
<td class="sides"> 4.2 </td><td class="sides"> 3.1 </td>
<td class="noborder tdl">Oilseeds, vegetable oils.</td>
</tr>
<tr>
<th class="indent0">Italy</th>
<td class="sides"> .9 </td><td class="sides"> 1.2 </td>
<td class="sides"> 4.3 </td><td class="sides"> 3.1 </td>
<td class="noborder tdl">Fats and oils, oilseeds.</td>
</tr>
<tr>
<th class="indent0">Taiwan </th>
<td class="sides"> 4.5 </td><td class="sides"> 5.2 </td>
<td class="sides"> 2.9 </td><td class="sides"> 2.8 </td>
<td class="noborder tdl">Pulses, medicinal substances, vegetables.</td>
</tr>
<tr>
<th class="indent0">Norway </th>
<td class="sides"> 1.0 </td><td class="sides"> 2.2 </td>
<td class="sides"> .8 </td><td class="sides"> 2.8 </td>
<td class="noborder tdl">Oilseeds, copra, tung oil.</td>
</tr>
<tr>
<th class="indent0">French Morocco</th>
<td class="sides"> 4.0 </td><td class="sides"> 1.5 </td>
<td class="sides"> 4.7 </td><td class="sides"> 2.5 </td>
<td class="noborder tdl">Green tea.</td>
</tr>
<tr>
<th class="indent0">Australia </th>
<td class="sides"> 2.3 </td><td class="sides"> 1.2 </td>
<td class="sides"> 1.9 </td><td class="sides"> 2.4 </td>
<td class="noborder tdl">Inedible animal products, oils, peanuts.</td>
</tr>
<tr>
<th class="indent0">Pakistan</th>
<td class="sides"> 1.4 </td><td class="sides"> 1.2 </td>
<td class="sides"> .8 </td><td class="sides"> 2.2 </td>
<td class="noborder tdl">Cotton twist and yarn.</td>
</tr>
<tr>
<th class="indent0">Indonesia</th>
<td class="sides"> .9 </td><td class="sides">1.0</td>
<td class="sides"> .7 </td><td class="sides">1.5</td>
<td class="noborder tdl">Vegetables, plants and seeds, resin.</td>
</tr>
<tr>
<th class="indent0">United States</th>
<td class="sides"> 22.6 </td><td class="sides">5.1</td>
<td class="sides"> .2 </td><td class="sides">.4</td>
<td class="noborder tdl">Feathers, bristles, furskins, art works and antiques.</td>
</tr>
<tr>
<th class="indent0">Canada</th>
<td class="sides"> 1.1 </td><td class="sides">.2</td>
<td class="sides"> .7 </td><td class="sides">.4</td>
<td class="noborder tdl">Walnuts and peanuts.</td>
</tr>
<tr>
<th class="indent0">Philippines</th>
<td class="sides"> 1.4 </td><td class="sides"> 1.8 </td>
<td class="sides"> 1.3 </td>
<td class="sides"><a href="#TABLE7_NOTE2" class="fnanchor">2</a>.4</td>
<td class="noborder tdl">Food, cotton and manufactures, coffee.</td>
</tr>
<tr>
<th class="indent0">India</th>
<td class="sides"> 10.2 </td><td class="sides"> 22.2 </td>
<td class="sides"> 1.4 </td>
<td class="sides"><a href="#TABLE7_NOTE2" class="fnanchor">2</a>.4</td>
<td class="noborder tdl">Rice.</td>
</tr>
<tr>
<th class="indent0">Denmark</th>
<td class="sides">(<a href="#TABLE7_NOTE3" class="fnanchor">3</a>)</td>
<td class="sides">(<a href="#TABLE7_NOTE3" class="fnanchor">3</a>)</td>
<td class="sides">2.1</td><td class="sides"> (none) </td>
<td class="noborder tdl">Oilseeds, feedstuffs.</td>
</tr>
<tr>
<th class="indent0">Indochina</th>
<td class="sides"> 3.3 </td><td class="sides"> 4.0 </td>
<td class="sides"><a href="#TABLE7_NOTE4" class="fnanchor">4</a>3.4</td>
<td class="sides">(<a href="#TABLE7_NOTE5" class="fnanchor">5</a>)</td>
<td class="noborder tdl"> Not available.</td>
</tr>
<tr>
<th class="indent0">Burma</th>
<td class="sides"> 2.2 </td><td class="sides"> .2 </td>
<td class="sides"> .2 </td>
<td class="sides">(<a href="#TABLE7_NOTE5" class="fnanchor">5</a>)</td>
<td class="noborder tdl">Garlic, raw silk and yarn, cotton yarn.</td>
</tr>
<tr>
<th class="indent0">Other</th>
<td class="sides"> 2.7 </td><td class="sides"> 2.6 </td>
<td class="sides"> 5.2 </td>
<td class="sides">(<a href="#TABLE7_NOTE5" class="fnanchor">5</a>)</td>
<td class="noborder"> </td>
</tr>
<tr> <!-- blank line at bottom of table -->
<th class="bottom-only"> </th>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="bottom-only"> </td>
</tr>
</table>
<ul class="tablenote nobullets nopadding">
<li><a name="TABLE7_NOTE1" id="TABLE7_NOTE1">1</a> Estimate.</li>
<li><a name="TABLE7_NOTE2" id="TABLE7_NOTE2">2</a>
Figures for the second half of 1953 are incomplete as
follows: Philippines, July-November: India, July-November.</li>
<li><a name="TABLE7_NOTE3" id="TABLE7_NOTE3">3</a> Less than $50,000.</li>
<li><a name="TABLE7_NOTE4" id="TABLE7_NOTE4">4</a> January-May only.</li>
<li><a name="TABLE7_NOTE5" id="TABLE7_NOTE5">5</a> Not available.</li>
</ul>
<ul class="tablenote nobullets nopadding">
<li><span class="smcap">Note</span>.—So far as possible,
data refer to Mainland Communist China, including Manchuria and Inner
Mongolia.</li>
<li>Source: Official trade statistics of free world countries,
compiled by U. S. Department of commerce.</li>
</ul>
<hr class="chapter"/>
<p><span class="pagenum"><a name="Page_95" id="Page_95">[Pg 95]</a></span></p>
<p class="center break"><span class="smcap">Table</span> 8.—<i>United States
trade with the Soviet-bloc countries, 1937, 1948, 1952, and 1953</i></p>
<p class="center">[In thousands of dollars]</p>
<table id="Table8" class="wide" summary=
"United States trade with the Soviet-bloc countries, 1937, 1948, 1952, and 1953">
<tr>
<th rowspan="2" class="no-left">Country</th>
<th colspan="4">Exports, including reexports</th>
<th colspan="4" class="no-right">General imports</th>
</tr>
<tr>
<th><a href="#TABLE8_NOTE1" class="fnanchor">1</a>1937</th>
<th>1948</th><th>1952</th><th>1953</th>
<th>1937</th><th>1948</th><th>1952</th><th class="no-right">1953</th>
</tr>
<tr>
<th class="indent1">Total Soviet bloc</th>
<td class="sides double-bottom">143,892</td>
<td class="sides double-bottom"> 396,641</td>
<td class="sides double-bottom">1,097</td>
<td class="sides double-bottom">1,776</td>
<td class="sides double-bottom">206,506</td>
<td class="sides double-bottom">233,482</td>
<td class="sides double-bottom">67,311</td>
<td class="double-bottom">45,597</td>
</tr>
<tr>
<th class="indent1">Bloc in Europe</th>
<td class="no-top">94,189</td>
<td class="no-top">123,241</td>
<td class="no-top">1,097</td>
<td class="no-top">1,776</td>
<td class="no-top">102,884</td>
<td class="no-top">113,138</td>
<td class="no-top">39,586</td>
<td class="bottom-only">36,325</td>
</tr>
<tr>
<th class="indent0">Albania</th>
<td class="sides">147</td><td class="sides">344</td>
<td class="sides">1</td><td class="sides">2</td>
<td class="sides">137</td><td class="sides"> ---- </td>
<td class="sides">52</td><td class="noborder">65</td>
</tr>
<tr>
<th class="indent0">Bulgaria</th>
<td class="sides">490</td><td class="sides">2,086</td>
<td class="sides">24</td><td class="sides">5</td>
<td class="sides">1,862</td><td class="sides">831</td>
<td class="sides">275</td><td class="noborder">358</td>
</tr>
<tr>
<th class="indent0">Czechoslovakia</th>
<td class="sides">13,233</td><td class="sides">21,563</td>
<td class="sides">75</td><td class="sides">40</td>
<td class="sides">37,183</td><td class="sides">22,125</td>
<td class="sides">1,477</td><td class="noborder">2,262</td>
</tr>
<tr>
<th class="indent0">East Germany</th>
<td class="sides"> n.s.s.</td><td class="sides"> n.s.s.</td>
<td class="sides">622</td><td class="sides">1,079</td>
<td class="sides"> n.s.s.</td><td class="sides"> n.s.s.</td>
<td class="sides">7,118</td><td class="noborder">6,465</td>
</tr>
<tr>
<th class="indent0">Estonia</th>
<td class="sides">1,244</td><td class="sides">7</td>
<td class="sides">------</td><td class="sides">------</td>
<td class="sides">937</td>
<td class="sides">(<a href="#TABLE8_NOTE5">X</a>)</td>
<td class="sides">------</td><td class="noborder">------</td>
</tr>
<tr>
<th class="indent0">Hungary</th>
<td class="sides">693</td><td class="sides">8,029</td>
<td class="sides">69</td><td class="sides">2</td>
<td class="sides">5,512</td><td class="sides">1,613</td>
<td class="sides">2,913</td><td class="noborder">1,717</td>
</tr>
<tr>
<th class="indent0">Latvia</th>
<td class="sides">1,744</td><td class="sides">1</td>
<td class="sides">------</td><td class="sides">------</td>
<td class="sides">767</td><td class="sides">6</td>
<td class="sides">------</td><td class="noborder">------</td>
</tr>
<tr>
<th class="indent0">Lithuania</th>
<td class="sides">511</td><td class="sides">115</td>
<td class="sides">------</td><td class="sides">------</td>
<td class="sides">1,172</td><td class="sides">10</td>
<td class="sides">1</td><td class="noborder">------</td>
</tr>
<tr>
<th class="indent0">Poland and Danzig</th>
<td class="sides">26,297</td><td class="sides">55,675</td>
<td class="sides">286</td><td class="sides">622</td>
<td class="sides">19,568</td><td class="sides">1,249</td>
<td class="sides">10,247</td><td class="noborder">14,295</td>
</tr>
<tr>
<th class="indent0">Rumania</th>
<td class="sides">6,938</td><td class="sides">7,542</td>
<td class="sides">------</td><td class="sides">7</td>
<td class="sides">4,978</td><td class="sides">480</td>
<td class="sides">683</td><td class="noborder">372</td>
</tr>
<tr>
<th class="indent0">U.S.S.R.</th><td class="sides double-bottom">42,892</td>
<td class="sides double-bottom">27,879</td>
<td class="sides double-bottom">20</td>
<td class="sides double-bottom">19</td>
<td class="sides double-bottom">30,768</td>
<td class="sides double-bottom">86,825</td>
<td class="sides double-bottom">16,818</td>
<td class="sides double-bottom no-right">10,791</td>
</tr>
<tr>
<th class="indent1 smcap">bloc in asia</th>
<td class="sides"></td><td class="sides"></td>
<td class="sides"></td><td class="sides"></td>
<td class="sides"></td><td class="sides"></td>
<td class="sides"></td><td></td>
</tr>
<tr>
<th class="indent0">China (including Manchuria)</th>
<td class="sides tdl middle" rowspan="2"><span id="bigrightbrace">}</span>
49,703</td>
<td class="sides middle" rowspan="2">273,400</td>
<td class="middle sides" rowspan="2">------</td>
<td class="middle sides" rowspan="2">------</td>
<td class="middle sides" rowspan="2">103,622</td>
<td class="sides middle" rowspan="2">120,343<span id="bigleftbrace">{</span></td>
<td class="sides"><a href="#TABLE8_NOTE2" class="fnanchor">2</a>24,605</td>
<td class="noborder"><a href="#TABLE8_NOTE3" class="fnanchor">3</a>614</td>
</tr>
<tr>
<th class="indent0">Outer Mongolia
<a href="#TABLE8_NOTE4" class="fnanchor">4</a></th>
<td class="sides">3,120</td><td class="noborder">8,658</td>
</tr>
<tr>
<th class="indent0">North Korea</th>
<td class="sides"> n. s. s. </td><td class="sides"> n. s. s. </td>
<td class="sides">------</td><td class="sides">------</td>
<td class="sides">n. s. s. </td><td class="sides"> n. s. s. </td>
<td class="sides">------</td><td class="noborder">------</td>
</tr>
<tr> <!-- blank line at bottom of table -->
<th class="bottom-only"> </th>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="no-top"> </td>
<td class="bottom-only"> </td>
</tr>
</table>
<ul class="tablenote nobullets nopadding">
<li><a name="TABLE8_NOTE1" id="TABLE8_NOTE1" class="fnanchor">1</a>
Data represent direct shipments only, which in prewar years greatly understated the
trade with central European countries; for a total of direct and indirect imports of
United States merchandise see foreign country statistics.</li>
<li><a name="TABLE8_NOTE2" id="TABLE8_NOTE2" class="fnanchor">2</a>
Consisted chiefly of strategic materials specifically licensed for import.</li>
<li><a name="TABLE8_NOTE3" id="TABLE8_NOTE3" class="fnanchor">3</a>
Consisted chiefly of strategic materials specifically licensed for import in 1952
but not actually imported until 1953, and Chinese material located in free countries
before 1950 and purchased in those countries by Americans.</li>
<li><a name="TABLE8_NOTE4" id="TABLE8_NOTE4" class="fnanchor">4</a>
United States does not consider Outer Mongolia as a part of Communist China;
traditionally for statistical purposes Outer Mongolia has been included with China;
separate figures for this area have been compiled by Census only since January 1953.
The 1952 breakdown is estimated.</li>
</ul>
<ul class="tablenote nobullets nopadding">
<li>(<a name="TABLE8_NOTE5" id="TABLE8_NOTE5">X</a>) Less than $500.</li>
<li>n.s.s. Not shown separately.</li>
<li>Source: U. S. Department of Commerce.</li>
<li>Rows of dashes: )----) mean nothing shipped.</li>
</ul>
<p><span class="pagenum"><a name="Page_96" id="Page_96">[Pg 96]</a></span><br />
<span class="pagenum"><a name="Page_97" id="Page_97">[Pg 97]</a></span><br />
<span class="pagenum"><a name="Page_98" id="Page_98">[Pg 98]</a></span></p>
<hr class="chapter" />
<p><span class="pagenum"><a name="Page_99" id="Page_99">[Pg 99]</a></span></p>
<h2 class="break"><a name="APPENDIX_C" id="APPENDIX_C">APPENDIX C</a></h2>
<p class="chaptertitle">
Text of the Battle Act</p>
<p><strong>Mutual Defense Assistance Control Act of 1951 [H. R. 4550], Public
Law 213, 82d Congress, 65 Stat. 644, Approved October 26, 1951</strong></p>
<blockquote>
<p>An ACT To provide for the control by the United States and cooperating
foreign nations of exports to any nation or combination of nations
threatening the security of the United States, including the Union of
Soviet Socialist Republics and all countries under its domination,
and for other purposes</p></blockquote>
<p><i>Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled</i>, That this Act may
be cited as the “Mutual Defense Assistance Control Act of 1951.”</p>
<h3 class="center normalweight">TITLE I—WAR MATERIALS</h3>
<p><span class="smcap">Sec</span>. 101.
The Congress of the United States, recognizing that in a
world threatened by aggression the United States can best preserve
and maintain peace by developing maximum national strength and by
utilizing all of its resources in cooperation with other free nations,
hereby declares it to be the policy of the United States to apply an
embargo on the shipment of arms, ammunition, and implements of
war, atomic energy materials, petroleum, transportation materials of
strategic value, and items of primary strategic significance used in the
production of arms, ammunition, and implements of war to any nation
or combination of nations threatening the security of the United
States, including the Union of Soviet Socialist Republics and all countries
under its domination, in order to (1) increase the national
strength of the United States and of the cooperating nations; (2)
impede the ability of nations threatening the security of the United
States to conduct military operations; and (3) to assist the people
of the nations under the domination of foreign aggressors to reestablish
their freedom.</p>
<p>It is further declared to be the policy of the United States that no
military, economic, or financial assistance shall be supplied to any
nation unless it applies an embargo on such shipments to any nation
or combination of nations threatening the security of the United
States, including the Union of Soviet Socialist Republics and all
countries under its domination.</p>
<p>This Act shall be administered in such a way as to bring about the<span class="pagenum"><a name="Page_100" id="Page_100">[Pg 100]</a></span>
fullest support for any resolution of the General Assembly of the
United Nations, supported by the United States, to prevent the shipment
of certain commodities to areas under the control of governments
engaged in hostilities in defiance of the United Nations.</p>
<p><span class="smcap">Sec</span>. 102. Responsibility for giving effect to the purposes of this
Act shall be vested in the person occupying the senior position authorized
by subsection (e) of section 406 of the Mutual Defense Assistance
Act of 1949, as amended, or in any person who may hereafter be
charged with principal responsibility for the administration of the
provisions of the Mutual Defense Assistance Act of 1949. Such person
is hereinafter referred to as the “Administrator”.</p>
<p><span class="smcap">Sec</span>. 103. (a) The Administrator is hereby authorized and directed
to determine within thirty days after enactment of this Act after full
and complete consideration of the views of the Departments of State,
Defense, and Commerce; the Economic Cooperation Administration;
and any other appropriate agencies, and notwithstanding the provisions
of any other law, which items are, for the purpose of this
Act, arms, ammunition, and implements of war, atomic energy materials,
petroleum, transportation materials of strategic value, and
those items of primary strategic significance used in the production
of arms, ammunition, and implements of war which should be embargoed
to effectuate the purposes of this Act: <i>Provided</i>, That such determinations
shall be continuously adjusted to current conditions on the
basis of investigation and consultation, and that all nations receiving
United States military, economic, or financial assistance shall be kept
informed of such determinations.</p>
<p>(b) All military, economic, or financial assistance to any nation
shall, upon the recommendation of the Administrator, be terminated
forthwith if such nation after sixty days from the date of a determination
under section 103 (a) knowingly permits the shipment to
any nation or combination of nations threatening the security of the
United States, including the Union of Soviet Socialist Republics and
all countries under its domination, of any item which he has determined
under section 103 (a) after a full and complete investigation
to be included in any of the following categories: Arms, ammunition,
and implements of war, atomic energy materials, petroleum, transportation
materials of strategic value, and items of primary strategic significance
used in the production of arms, ammunition, and implements
of war: <i>Provided</i>, That the President after receiving the advice
of the Administrator and after taking into account the contribution
of such country to the mutual security of the free world, the importance
of such assistance to the security of the United States, the strategic
importance of imports received from countries of the Soviet bloc,
and the adequacy of such country’s controls over the export to the
Soviet bloc of items of strategic importance, may direct the continuance<span class="pagenum"><a name="Page_101" id="Page_101">[Pg 101]</a></span>
of such assistance to a country which permits shipments of
items other than arms, ammunition, implements of war, and atomic
energy materials when unusual circumstances indicate that the cessation
of aid would clearly be detrimental to the security of the United
States: <i>Provided further</i>, That the President shall immediately report
any determination made pursuant to the first proviso of this section
with reasons therefor to the Appropriations and Armed Services
Committees of the Senate and of the House of Representatives, the
Committee on Foreign Relations of the Senate, and the Committee
on Foreign Affairs of the House of Representatives, and the President
shall at least once each quarter review all determinations made previously
and shall report his conclusions to the foregoing committees of
the House and Senate, which reports shall contain an analysis of the
trade with the Soviet bloc of countries for which determinations have
been made.</p>
<p><span class="smcap">Sec</span>. 104. Whenever military, economic, or financial assistance has
been terminated as provided in this Act, such assistance can be resumed
only upon determination by the President that adequate measures
have been taken by the nation concerned to assure full compliance
with the provisions of this Act.</p>
<p><span class="smcap">Sec</span>. 105. For the purposes of this Act the term “assistance” does
not include activities carried on for the purpose of facilitating the
procurement of materials in which the United States is deficient.</p>
<h3 class="center normalweight">TITLE II—OTHER MATERIALS</h3>
<p><span class="smcap">Sec</span>. 201. The Congress of the United States further declares it to
be the policy of the United States to regulate the export of commodities
other than those specified in title I of this Act to any nation or
combination of nations threatening the security of the United States,
including the Union of Soviet Socialist Republics and all countries
under its domination, in order to strengthen the United States and
other cooperating nations of the free world and to oppose and offset
by nonmilitary action acts which threaten the security of the United
States and the peace of the world.</p>
<p><span class="smcap">Sec</span>. 202. The United States shall negotiate with any country receiving
military, economic, or financial assistance arrangements for
the recipient country to undertake a program for controlling exports
of items not subject to embargo under title I of this Act, but which
in the judgment of the Administrator should be controlled to any
nation or combination of nations threatening the security of the United
States, including the Union of Soviet Socialist Republics and all
countries under its domination.</p>
<p><span class="smcap">Sec. 203.</span> All military, economic, and financial assistance shall be
terminated when the President determines that the recipient country<span class="pagenum"><a name="Page_102" id="Page_102">[Pg 102]</a></span>
(1) is not effectively cooperating with the United States pursuant
to this title, or (2) is failing to furnish to the United States information
sufficient for the President to determine that the recipient
country is effectively cooperating with the United States.</p>
<h3 class="center normalweight">TITLE III—GENERAL PROVISIONS</h3>
<p><span class="smcap">Sec</span>. 301. All other nations (those not receiving United States
military, economic, or financial assistance) shall be invited by the
President to cooperate jointly in a group or groups or on an individual
basis in controlling the export of the commodities referred to in title
I and title II of this Act to any nation or combination of nations
threatening the security of the United States, including the Union
of Soviet Socialist Republics and all countries under its domination.</p>
<p><span class="smcap">Sec</span>. 302. The Administrator with regard to all titles of this Act
shall—</p>
<ul class="nobullets">
<li>(a) coordinate those activities of the various United States
departments and agencies which are concerned with security
controls over exports from other countries;</li>
<li>(b) make a continuing study of the administration of export
control measures undertaken by foreign governments in accordance
with the provisions of this Act, and shall report to the
Congress from time to time but not less than once every six months
recommending action where appropriate; and</li>
<li>(c) make available technical advice and assistance on export
control procedures to any nation desiring such cooperation.</li>
</ul>
<p><span class="smcap">Sec</span>. 303.
The provisions of subsection (a) of section 403, of section
404, and of subsections (c) and (d) of section 406 of the Mutual
Defense Assistance Act of 1949 (Public Law 329, Eighty-first Congress)
as amended, insofar as they are consistent with this Act, shall
be applicable to this Act. Funds made available for the Mutual
Defense Assistance Act of 1949, as amended, shall be available for
carrying out this Act in such amounts as the President shall direct.</p>
<p><span class="smcap">Sec</span>. 304.
In every recipient country where local currency is made
available for local currency expenses of the United States in connection
with assistance furnished by the United States, the local
currency administrative and operating expenses incurred in the administration
of this Act shall be charged to such local currency funds
to the extent available.</p>
<p><span class="smcap">Sec</span>. 305.
Subsection (d) of section 117 of the Foreign Assistance
Act of 1948 (Public Law 472, Eightieth Congress), as amended, and
subsection (a) of section 1302 of the Third Supplemental Appropriation
Act, 1951 (Public Law 45, Eighty-second Congress), are
repealed.</p>
<p class="tdr">U. S. GOVERNMENT PRINTING OFFICE: 1954</p>
<hr class="chapter" />
<div class="transnote">
<p class="break">TRANSCRIBER'S NOTE:<br />
Several words were changed as they were deemed to be typographic errors:</p>
<ul class="nobullets nopadding">
<li>p.32 esspecially changed to especially</li>
<li>p.70 comodities changed to commodities</li>
<li>p.71 Handelsgenchmigung changed to Handelsgenehmigung</li>
<li>p.81 naptha changed to naphtha</li>
</ul>
<p>
Otherwise, every effort has been made to remain true to the authors'
words and intent. Words such as sizeable and intransigeance are
unchanged on the assumption that they were the author's intent.
</p>
</div>
<div>*** END OF THE PROJECT GUTENBERG EBOOK 47437 ***</div>
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