10. IMMEDIATE RELEASE 15.4.49 (U.S. aid imports.)
The Counterpart Fund
The Counterpart Fund sets up in the budget for the first time the estimated amount of U.S. aid which may be received during the coming fiscal year. The use of this fund will be under the control of SCAP. It is a powerful fiscal instrument for helping meet the future trends of the economy. Its use will be closely supervised and follow the general principles of similar U.S. aid funds elsewhere but related to the particular conditions of this economy. Its principal uses will be for the retirement of government debt and for capital investment purposes which contribute directly and quickly to economic reconstruction. It will not be a political grab bag. In considering released from the Counterpart Fund for investment projects great weight will be given to the progress made in achieving the tax goals set forth in the dudget, how the budget expenditures are being administered, and the fulfilment of the terms of the Nine-Point Stabilization Program.
Credit Policy
The balanced consolidate budget for the 1949 fiscal year together with the Counterpart Fund provide instruments with which the Government operations may be carried on without contributing to an inflationary expansion of the money supply. These also supply the means through which the legitimate requirements of industry for working capital and equipment funds may be set without an inflationary impact. The effect of this is closely related to credit policy. Investment expenditures from the Counterpart Fund will offset in advance by collections from the proceeds of imports. However, through the investment funds and the retirement of RE? and other government debt provided for in the budget and through the Counterpart Fund substantial means have been created for meeting the needs for extending sound and proper credit and for essential capital investment purposes.
