In the practical application of our foreign policy, we enter the field of
foreign assistance and trade.
Military assistance must be continued. Technical assistance must be
maintained. Economic assistance can be reduced. However, our economic
programs in Korea and in a few other critical places of the world are
especially important, and I shall ask Congress to continue them in the next
fiscal year.
The forthcoming Budget Message will propose maintenance of the Presidential
power of transferability of all assistance funds and will ask authority to
merge these funds with the regular defense funds. It will also propose that
the Secretary of Defense have primary responsibility for the administration
of foreign military assistance in accordance with the policy guidance of
the Secretary of State.
The fact that we can now reduce our foreign economic assistance in many
areas is gratifying evidence that its objectives are being achieved. By
continuing to surpass her prewar levels of economic activity, Western
Europe gains self-reliance. Thus our relationship enters a new phase which
can bring results beneficial to our taxpayers and our allies alike, if
still another step is taken.
This step is the creation of a healthier and freer system of trade and
payments within the free world--a system in which our allies can earn their
own way and our own economy can continue to flourish. The free world can no
longer afford the kinds of arbitrary restraints on trade that have
continued ever since the war. On this problem I shall submit to the
Congress detailed recommendations, after our Joint Commission on Foreign
Economic Policy has made its report.