Statement by the President in Response to the Gray Report on Foreign Economic Policy.

THE FOREIGN economic policy of the United States is of key importance in influencing the course of world events. It is one of the central instruments with which we can meet the present world crisis and through which we can promote the security of the United States as part of a free world. Since the ending of World War II, we have come increasingly to realize that our foreign economic policy must be worldwide in concept, that its many parts must follow a single broad stream of direction and purpose, and that it must be continuously adapted to changing circumstances both at home and abroad.

For those reasons, last March I asked Mr. Gordon Gray, upon his resignation as Secretary of the Army, to study the whole complex of our foreign economic relations and to develop appropriate recommendations designed to "assure ourselves that our own policies are those which will serve best to reinforce our economic strength and that of the other free nations of the world." Mr. Gray's work was in full swing when outright Communist aggression in Korea demonstrated to the free world the urgency of a more rapid increase in its military power. The expanding rearmament programs of the United States and other free nations, while not basically altering our long-term objectives, created major changes in the immediate outlook for the world economy. Mr. Gray and his staff, therefore, have recast their work to take account of the changed outlook.

The report now submitted by Mr. Gray represents a comprehensive analysis of the whole range of foreign economic problem facing the United States. Behind the report lie many months of intensive labor by Mr. Gray himself, his immediate staff assistants, and a large number of consultants in all walks of private life and in the many governmental agencies concerned with these problems. The Nation is indebted to Mr. Gray and his associates for their fine response to a most challenging and difficult assignment. The report deserves the attention and study of all citizens.

The guiding concept of Mr. Gray's report is the unity of foreign policy in its economic, political, military, and informational aspects. Our national security can be assured only through effective action on all these fronts. I fully endorse Mr. Gray's statement on the basic objectives of our foreign economic policy. In his words:

"The objective of our foreign economic policy has been and is to encourage among the nations of the free world those economic conditions and relationships essential for the development of stable democratic societies willing and able to defend themselves and raise the living standards of their peoples. These objectives are to the benefit of all peoples; their national interests are bound up with our national interests; our security and well-being are clearly connected with their security and well-being. Neither we nor they can live alone or defend ourselves alone. This fundamental unity of interest underlies our efforts both to achieve long-term progress and also to meet the immediate necessities presented by Soviet aggressive designs."

Mr. Gray's report should be of great value to the Congress and the executive branch in developing specific measures to further these objectives. Certain of Mr. Gray's recommendations call for a follow-through on present lines of action, notably in the development of an integrated program for the defense of the North Atlantic Treaty area, and in the promotion of sound commercial and financial relationships among free nations.

In other respects Mr. Gray has recommended changes in existing policy to meet emerging problems of our foreign economic relationships. This is particularly the case with respect to underdeveloped areas and economic development programs.

I recently announced my intention to appoint Mr. Nelson Rockefeller as chairman of the advisory board created under the new Act for International Development to advise and consult "with respect to general or basic policy matters arising in connection with operation of the program." I am asking Mr. Rockefeller to have this board, as its first task, consider Mr. Gray's proposals concerning our policy toward the underdeveloped areas in the context of the full report, in order that this board will be able to give us its views early in the coming year on the types and size of programs which it considers desirable for the United States to undertake in this field.

Meanwhile, the various executive agencies concerned will draw fully on Mr. Gray's report, and on the background studies underlying it, in developing appropriate administrative action and legislative recommendations in the whole area of foreign economic policy which is so crucial to our national security.