The Hoffman Plan

In the bare Washington office of the Economic Cooperation Administration last week, a harried young woman slammed down a telephone receiver. "Horse meat!" she snorted. "That's the fifteenth man who's tried to sell us horse meat for Europe. They won't believe we're not buying anything here." As EGA set up shop last week, it was swamped by hundreds of calls from eager businessmen with things to sell. Dozens of food samples poured in, from canned stuffed zucchini to "Wheat Germ Residue and Food Yeast Mix," which EGA was advised to mix with rice to make it stretch farther.

Not since the early days of the war had Washington seen such an influx of businessmen on the hunt for EGA and armament orders. Hotels were packed once again. Pullman space was at a premium; airline officials exulted in traffic "like wartime days."

Private Trade. To keep businessmen out of Washington--where they stood little chance of getting any orders--ECAdministrator Paul Hoffman and his staff took time out to clear up some glaring misconceptions about EGA. EGA, said they, will do no buying of supplies itself. Private traders will do the bulk of the business through regular private-export channels.

Most of the orders, said Hoffman, will go from European governments, importers, or purchasing commissions, to U.S. exporters and manufacturers. EGA will screen the orders, make sure that the buyer is buying wisely, and the seller charging a reasonable price. After EGA approves an order, the exporter will still have to apply for a Department of Commerce export license.

Public Buying. There was one exception to ECA's determination to let private business handle the job. In the commodity markets (where about 20% of ECA's money will be spent), EGA will be represented by the Department of Agriculture's Commodity Credit Corp. Basic food buying called for market skill. Last week Hoffman had his first sample of how easy it is to send prices soaring.

Midweek, EGA announced ,that it planned to export 748,000 bales of cotton in the next three months. Promptly, the price of cotton started up. In two days, cotton for May delivery spurted $2.70 a bale to $194.60, a new seasonal high. But when no Government orders were forthcoming, the prices slipped down again. Hoffman finished pricking the boomlet.

Total relief exports will be less this year than in 1947. Grain shipments next crop year, said he, will be considerably less than those of the current year. Cotton exports will be increased, but he hoped to space buying so as not to drive up prices. In any case, said he, large-scale buying under EGA will not get under way till fall.

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