TECHNICAL ASSISTANCE PROGRAMS CAL 1 HEARINGS BEFORE A SUBCOMMITTEE OF THE ITEE ON FOREIGN RELATIONS UNITED STATES SENATE EIGHTY-FOURTH CONGRESS FIRST SESSION ON TECHNICAL ASSISTANCE PROGRAMS FEBRUARY 17, 18, 21, 23, 24, MARCH 2, 3, AND 4, 1955 Printed for the use of the Committee on Foreign Relations 59637 UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1955 UNIVERSITY OF GENERAL ་བ་མ་ན ཡ HC 60 .4545 PT. I } COMMITTEE ON FOREIGN RELATIONS WALTER F. GEORGE, Georgia, Chairman THEODORE FRANCIS GREEN, Rhode Island J. W. FULBRIGHT, Arkansas JOHN SPARKMAN, Alabama HUBERT H. HUMPHREY, Minnesota MIKE MANSFIELD, Montana ALBEN W. BARKLEY, Kentucky WAYNE MORSE, Oregon ALEXANDER WILEY, Wisco H. ALEXANDER SMITH, New Jɛ……. BOURKE B. HICKENLOOPER, Iowa WILLIAM LANGER, North Dakota WILLIAM F. KNOWLAND, California GEORGE D. AIKEN, Vermont HOMER E. CAPEHART, Indiana FRANCIS O. WILCOX, Chief of Staff Carl M. Marcy, Consultant JULIUS N. CAHN, Counsel PAT M. HOLT, Consultant ALWYN V. Freeman, Consultant C. C. O'DAY, Clerk SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS [Created pursuant to S. Res. 214, 83d Cong.]. MIKE MANSFIELD, Montana, Chairman THEODORE FRANCIS GREEN, Rhode Island J. W. FULBRIGHT, Arkansas JOHN F. KENNEDY, Massachusetts 1 BOURKE B. HICKENLOOPER, Iowa GEORGE D. AIKEN, Vermont HOMER E. CAPEHART, Indiana BARRY GOLDWATER, Arizona ¹ FRANCIS O. WILCOX Chief of Staff PAT M. HOLT, Consultant FRANCIS R. VALEO, Consultant s MARY ANN SAMES, A88istant Clerk EXILY JEAN BUTLER, Assistant Clerk DORIS COVINGTON, Assistant Clerk 1 Appointed by the ice President to serve with the subcommittee. On loan frome Legislative Reference Service, Library of Congess. II INDEX 395 Pere Transportation, technical instruction on systems of (See also Highway construction) In underdeveloped countries_ Travel, promotion of between participating countries and the United States... ** 23 194 Treasury, Secretary of the………. 4.5 G8 90 Treaties, use of by United States to create in underdeveloped countries political and economic conditions conducive to private investment capital 239 Truman, Harry, President. Tudeh Party in Iran__ Turkey, program in.. Aid to___ 162, 168, 356, 358, 369 337 38, 193, 333, 334, 349 135, 162, 170 Twentieth Century Fund_ 191 U UNETAP. (See United Nations Expanded Program of Technical Assist- ance.) Union of India_ Union of the Soviet Socialist Republics_ Agriculture in__. Activities in technical assistance__ Farmers to visit fundia. →mg. Financial contribution to U. N. technical assistance____ Has cical assistance in India_ United Fruit Co---- 120 368 20, 258, 261, 279 105, 135 109, 320, 322-323 116 118 258 237 (See Special United Nations, special fund for economic development. United Nations Fund for Economic Development [SUNFED].) United Nations technical assistance, program of (see also United Nations expanded program of technical assistance; special United Nations fund for economic development) – 3, 4, 5, 36, 75, 79, 99, 101–103, 120, 140-141, 161, 162, 176, 211, 216, 221, 227, 230, 237, 254, 259, 260, 261, 270, 271, 276, 279, 281, 317, 319, 322, 323, 347, 351, 352, 359, 361, 365-368, 369, 372, 373, 379. United States financial support to---- 4, 5, 108, 109, 136, 146, 147, 176, 177, 221, 236, 251, 252, 255, 257, 276, 319, 320, 321, 351, 352, 362, 366, 368, 373, 379, 381. 109, 320, 322-323, 366, 380 U. S. S. R. financial support to---. United Nations, work of Department of Health, Education, and Welfare with___. Fellows of_. United Nations central account. United Nations Charter, articles 55 and 56 of. United Nations Children's Fund…. 73, 74, 76, 79 74, 76, 79 270 154, 155, 162, 165 36, 77, 211 Work of Department of Health, Education, and Welfare with United Nations Economic and Social Council_ United Nations Educational, Scientific, and Cultural Organization, work of Department of Health, Education, and Welfare with_ United Nations Expanded Technical Assistance Program United Nations Food and Agriculture Organization--- Coordination of with FOA activities__ United Nations Relief and Rehabilitation Administration. United Service Organization (USO)--- United States Information Service__ 78 257 77, 78, 279, 281 77, 362, 378, 379, 380 (UNETAP) 61, 252, 259, 281, 362 63-64, 211 104, 126, 170 184 United World Federalists, Inc. (See Stanley, C. M., statement of.) University and college contracts (see also Names of universities and col- leges, i. e. University of North Carolina, University of the Philippines, etc.) Illustration of.. University of Delhi_ 214 9-15 47-59 214 214. 218 A 396 INDEX L University of Pennsylvania (8re also l'almer, Norman D., testimony by).- University of the Philippines- University of San Marcos. University of Virginia___ University of Wisconsin, College of Agriculture___. V Page 214, 218, 219, 226 21, 25 210 349 270 Van Kirk, Walter W., executive director, department of international affairs, National Council of the Churches of Christ in the United States. testimony of.. Venezuela Vietnam, refugees in (see also Public Administration). Village Development Program of Friends Service Committee. Village Type Industry. (Sce Industry, indigenous.) Vocational rehabilitation___ -97-109 371 46 227, 225 74 W Walker, W. Hugh__. 120 War Relief Control Board_ 184 Waring, Alston, of the American Fri-uds Service Committee__. Washington State College__ 230, 231, 232 225 Weitzer, Bernard, national legislative director, Jewish War Veterans of the United States of America, testimony by- 351-27 Wells. O. V., Administrator of the Agricultural Marketing Service. In States Department of Agriculture_. 63 West European cooperation. 214 Wharton School of Finance and Commerce, of the University of Pennsylva- nia. (See University of Pennsylvania.) Wheat, loan to India for… 11: Wilson, E. Raymond, Friends Committee on National Legislation, testi- mony by- 360-364 Wilson, Frank S., industrial development, adviser to India. Women's International League for Peace and Freedom, statement of____ 378–381 Woodstock School, Mussoorie, India__ 35 224 World Bank. (See International Bank for Reconstruction and Develop- шent.) World Council of Churches_ 99 World Health Organization.. 77, 206, 211, 281 Work of Department of Health, Education, and Welfare, with___ 77, 79, 80 Work on rabies_. 81 World Veterans Federation_. 370 Wormser, Felix E., Assistant Secretary for Mineral Resources, Department of the Interior, testimony by.. 81-87 XYZ Yen. Jimmy-- Young Lebanese Apprentice School- 190 194 こ ​> CONTENTS не 60 pt. Statement by- Page Allen, Hon. George V., Assistant Secretary of State for Near Eastern, South Asian, and African Affairs__ 109 Badeau, John S., President, Near East Foundation. Baker, John A., National Farmers Union_ 329 258 Bernstein, Rabbi Philip S., American Zionist Committee for Public Affairs. 177 Butz, Earl L., Assistant Secretary of Agriculture for Marketing and Foreign Agriculture__ - 61 Campbell, Wallace J., Cooperative League of the United States of America__ Duce, James Terry, vice president, Arabian American Oil Co.. Edgerton, Glen E., Managing Director and President, Export-Im- port Bank Ford, Henry, II, president, Ford Motor Co. Goldberg, Dr. Maurice, vice president, B'nai B'rith Hartz, Mrs. A. Paul, General Federation of Women's Clubs. Hoover, Hon. Herbert, Jr., Under Secretary of State___ Larabee, Byron H., Firestone Plantation Co. - Lee, Charles Henry- Loree, Robert F., chairman, National Foreign Trade Council, Inc. Lynn, John C.. American Farm Bureau Federation. McGavran, Dr. E. G., dean, school of public health, University of North Carolina____ McGuire, Rev. Frederick, National Catholic Welfare Conference. Mintener, Bradshaw, Assistant Secretary of Health, Education, and Welfare 275 283 1 66 1 1 317 } T I 354 183 2 I I 305 1 356 T 235 249 206 126 73 Palmer, Norman D., professor of political science, University of Pennsylvania. 214 Price, Don K., Jr., vice president, the Ford Foundation. Reuther, Victor, Congress of Industrial Organizations.. Rice, Andrew E., executive director, American Veterans Committee__ Rusk, Dean, president, the Rockefeller Foundation_ Smiley, Ralph E., Booz, Allen & Hamilton……. Smith, Marshall M., Acting Assistant Secretary of Commerce for International Affairs. Stassen, Hon. Harold E., Director, Foreign Operations Administra- tion_. Straight, Michael W., Americans for Democratic Action_. Taft, Charles, Chairman, Advisory Committee on Voluntary Foreign Aid Teaf, Howard M., Jr., American Friends Service Committee. Thorp, Willard L., director of the Merrill Center for Economics. Van Kirk, Walter W., National Council of Churches_ Weitzer, Bernard, Jewish War Veterans__ Wilson, E. Raymond, Friends Committee on National Legislation__. Wormser, Felix, Assistant Secretary of Interior for Mineral Resources_ 1 1 1 340 T 133 370 240 323 88 7 364 184 1 227 167 97 1 351 360 81 ΠΙ IV CONTENTS Page Additional information furnished by the Foreign Operations Administration: Technical personnel, as of December 31, 1954 (chart) – Value of FOA university contracts (chart) FOA technicians in the field, by region (chart) India's food situation (chart) 8 10 1 17 1 19 Program shifts in technical cooperation (chart) Number of participants programed (chart) 22 26 United States national personnel (chart). United States and host country contributions (chart) The Latin American Republics have steadily increased their share of 223 27 29 project costs as the programs mature (chart). The Mutual Security Program for 1955 (chart). Foreign Operations Administration (chart) Statements submitted for the record: 32 34 Faces 44 Statement of Andrew J. Biemiller, American Federation of Labor_-_- Statement by C. M. Stanley, president, United World Federalists, Inc. Statement by John R. Holden, AMVĒTS_ 175 373 374 Statement by American Association of University Women. Statement by Women's International League for Peace and Freedom_ 377 - 378 ས TECHNICAL ASSISTANCE PROGRAMS THURSDAY, FEBRUARY 17, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The committee met, pursuant to call, at 2:45 p. m., in room 457, Senate Office Building, Senator Mike Mansfield (chairman of the subcommittee) presiding. Present: Senators Mansfield (chairman of the subcommittee), Green, and Hickenlooper. CHAIRMAN'S OPENING REMARKS Senator MANSFIELD. The meeting will come to order. This is the first public hearing of the Special Subcommittee on Technical Assistance Programs of the Foreign Relations Committee. I think it appropriate therefore to begin the meeting with a brief state- ment of the origin and purposes of this subcommittee. In 1950, Congress provided by law for a formal program of technical assistance to underdeveloped areas of the world. This action was taken in response to point IV of the Presidential inaugural address of 1949. The interchange of technical knowledge among countries has gone. on for many centuries. But the concept of incorporating technical assistance into the basic machinery of the foreign policy of the United States, as was done in 1950, represented a new departure for this country. Like most new departures, the point IV program has been the sub- ject of some confusion and uncertainty as to objectives, scope, and methods during the 4½ years of its operation. There has been public praise of the program and there has been public criticism. Each year in the consideration of enabling legislation for foreign aid, the Foreign Relations Committee has examined aspects of the point IV program. In setting up this subcommittee, however, the Senate has, in effect, asked that a thoroughgoing examination of the program be made. Under Senate Resolution 214 (83d Cong.), as amended, the subcom- mittee is authorized and directed "to make a full and complete study of technical assistance and related programs. "" In the course of the study, the subcommittee expects to analyze the comments of informed Government officials and interested citizens. We expect to examine firsthand the operation of point IV in various parts of the world. When the study is completed we should be in a position to recommend to the Senate changes in the basic legislation, if they are indicated, and to make available to the executive branch for ! 1 2 TECHNICAL ASSISTANCE PROGRAMS its use such observations as may have relevance in improving the conduct of the programs. The urge for economic development in many parts of the world is one of the most significant facts of the mid-20th century. The direction that development takes may determine whether our children live in a free world or a Communist world. I am sure that I speak for all of my colleagues when I say that in pursuing this study, the subcommittee will be motivated by one con- cern-the relationship of the technical-assistance program to the wel- fare of the United States. As I mentioned previously, this program is now a part of the basic foreign policy machinery of the United States. As such, it must be viewed in terms of its contribution to the politi- cal, the economic, the cultural, and the security interests of this coun- try. The questions which we are dealing with, in short, are these: Is the program making a real contribution to American interests? Is it making the best possible contribution in terms of the expenditures and effort going into it? Are changes in the program indicated which would enhance its contribution? In recognition of the broad national and nonpartisan concern with such questions, the membership of the subcommittee is equally divided between the two major parties. My colleagues are Senator Green, Senator Fulbright, and Senator Kennedy; Senator Hickenlooper, on my right, under whose able chairmanship, the groundwork for the subcommittee's study was laid last year, Senator Aiken, Senator Cape- hart, and Senator Goldwater. Our first witness will be the Under Secretary of State, Hon. Herbert Hoover, Jr. Mr. Hoover is an engineer. He has been a consultant to the Gov- ernments of Venezuela, Iran, Peru, among others. He was instru- mental in working out the Anglo-Iranian Agreement of 1954. In August of 1954 he was confirmed by the Senate in his present position. Mr. Hoover, will you take the stand? STATEMENT OF HON. HERBERT HOOVER, JR., UNDER SECRETARY OF STATE Mr. HOOVER. Mr. Chairman and members of the committee, if I I would like to read a brief statement. may, At the outset I should like to say that we welcome the committee's study of technical assistance and related programs. I want to assure you of the full cooperation of the Department of State in this work. UNDERLYING POLICY I believe I can be of most service today if I review with you briefly the policy underlying technical assistance. As you know, the Depart- ment of State carries the responsibility for the policy aspects of this program. Upon the completion of my remarks, Governor Stassen will discuss the actual operation of the program for which he, as head of the Foreign Operations Administration, is responsible. L TECHNICAL ASSISTANCE PROGRAMS 3 The 81st Congress established, in June 1950, technical assistance as a major instrument of United States foreign policy in the Act for International Development. This act declared it to be- the policy of the United States to aid the efforts of the peoples of economically underdeveloped areas to develop their resources and improve their working and living conditions by encouraging the exchange of technical knowledge and skills and the flow of investment capital to countries which provide conditions under which such technical assistance and capital can effectively and construc- tively contribute to raising standards of living, creating sources of wealth, in- creasing productivity, and expanding purchasing power. The same act authorized United States contributions to technical- assistance programs carried out by the United Nations and the Or- ganization of American States. When the 83d Congress last year combined the numerous laws re- lating to foreign aid into the Mutual Security Act of 1954, it incorpo- rated the same statement of policy on technical assistance, using the identical language employed by the 81st Congress. It also reauthori- ized United States participation in the multilateral programs. As this 84th Congress opened, President Eisenhower declared in his message on the state of the Union: We must facilitate the flow of capital and continue technical assistance both directly and through the United Nations. In his later message on foreign economic policy he said: The United States has a vast store of practical and scientific know-how that is The United States has a needed in the underdeveloped areas of the world. responsibility to make it available. Its flow for peaceful purposes must remain unfettered. United States participation in technical-cooperation programs should be carried forward. These programs should be concerned with know-how rather than large funds * * * I shall recommend that the Congress make available the funds re- quired to support the multilateral technical cooperation programs of the United Nations. The bilateral programs of the United States should be pressed vigorously. This is an expression of the policy of this administration and is of course the policy upon which we are proceeding in the technical- assistance program. JUSTIFICATION OF PROGRAM A policy of such broad application and potentially large effect which has received notable support from Congress to Congress and from administration to administration must, it would seem, be justi- fied by compelling reasons. These reasons are not hard to find. It is apparent that this program is intended to serve the interests of the people of the nations to which we offer our help. It is also in- tended to serve the enlightened self-interest of the United States. A continually expanding economy is fundamental in our national life. For our economy to grow we must buy and sell abroad in increasing quantities, and we can do so only if our friends among other nations also have expanding economies and increasing standards of living. With few exceptions our trade with the peoples of the underdeveloped countries of the world is at a rate far less than with the peoples of more highly developed areas. One of the objectives of this program is to improve this situation. Technical assistance to underdeveloped areas would be in our na- tional interest even if there were no peril to free nations from inter- 4 TECHNICAL ASSISTANCE PROGRAMS national communism. But there is such a peril and its agents seek to subvert the people of the underdeveloped nations by holding out promises of economic betterment. At the same time these propa- gandists point to us as a people of wealth and power, disinterested in the well-being of other peoples. The technical assistance program refutes these charges and in the place of Communist promises of some future better life, is beginning to bring visible progress now. Though it is fundamentally a program for peaceful times, technical assistance is an effective method for counteracting subversion, and as such is one of our basic weapons in the cold war. At the same time, I think we should not hesitate to admit that in attempting to help the people of underdeveloped nations realize their longing for improved conditions of life, we are also inspired by motives which are plainly humanitarian. Í know that the tremendous support this program has throughout our country comes in large part from people who believe it is right to share our great store of knowl- edge for the benefit of others. SIZE AND DURATION OF PROGRAM Technical assistance is not and need not be a big-money program. It is limited by our ability to recruit technicians qualified to do the many tasks, usually under difficult conditions, which the program requires. It is also limited by the rate at which other nations can absorb and apply the technical know-how we provide. We believe that it will be desirable and possible to expand the program moder- ately in some areas this coming year and in other areas in the future. We believe the program should not be built up to, or cut down to, any arbitrary figure but should be determined on specific needs on which our help is asked and on which we believe it is in our interest to help. The majority of the technicians under the program may be Gov- ernment employees, but it is our wish to use the services of private agencies such as colleges and voluntary groups wherever feasible. We do not regard the Federal Government as the only effective instrument in this field; we recognize the tremendous value of and we try to encourage the work of business organizations and private endowments. We continue to bear in mind that this is a long-range program. It is part of a process of gradual progress which we believe will have a cumulative effect over a number of years. The statute places no arbi- trary limit on the duration of the program and we believe none should be placed. ROLE OF THE UNITED NATIONS I mentioned earlier the authority granted by Congress to contribute to the technical assistance program of the United Nations. Under this authority the United States took the initiative in encouraging the establishment of the United Nations program and, up to this year, has given it consistent financial support. The United Nations pro- gram engages most of the agencies of the U. N. system in a cooper- ative effort, and has been increasingly recognized as one of the very tangible means through which the United Nations can benefit its members. It is much smaller than the United States technical cooper- ation program in dollars and is sharply limited in supplies and equip- • TECHNICAL ASSISTANCE PROGRAMS 5 ment. However, it provides a substantial number of technicians and greatly adds to the number we can make available. The United States and United Nations programs should not be competitive. Each has a special contribution to make, depending on local circumstances and conditions. We believe the purposes of tech- nical cooperation in the free world will be achieved more rapidly because both programs are in existence. UNITED STATES PLEDGE TO UNITED NATIONS PROGRAM In the absence of an appropriation and at the direction of the Con- gress, the executive branch made no pledge for the U. N. program for calendar 1955 at the pledging conference held last November. This failure to pledge has hindered planning in the U. N. agencies and se- riously slowed the pace of the program. The President on February 10 transmitted to the Congress a request for a supplemental appropria- tion of $8 million to provide a United States contribution to the U. N. program for the first half of the calendar year 1955. Failure on our part to continue to participate in the U. N. program would reflect on our role of leadership in the U. N., as well as have serious repercus- sions in our relations with underdeveloped countries. In conclusion I would like to say this: The technical assistance pro- gram has been an important and useful element of our foreign policy for a number of years. During that period mistakes have been made along with efforts to correct these mistakes and to learn from them. The program has in the past, and can in the future, benefit from con- structive criticism. I again wish to assure the committee of the cooperation of the De- partment of State in your study. Senator MANSFIELD. Mr. Secretary, thank you for a very fine state- ment. Senator Hickenlooper? ADMINISTRATION OF TECHNICAL ASSISTANCE Senator HICKENLOOPER. Mr. Secretary, the technical cooperation program has now been largely under the FOA for, I think, 2 years. As I recall it, one of the reasons urged at the time the FOÁ was set up for that action was that the State Department was not an operat- ing agency, and that the diplomatic activities of the State Department had been in some cases confused with operating activities for the tech- nical programs and the information programs, and things of that kind. Have you gone into that question yourself since you have been in office? Mr. HOOVER. I have to some extent, but not in detail. Senator HICKENLOOPER. In view of the fact that the law now makes provision for the substantial ending of FOA operations and various segments of it being put in other departments, I am concerned myself as to whether operating activities of certain types should go back to the State Department, in view of the criticism which we once had. Do you have any particular views on that at the moment? Mr. HOOVER. I would like to make this statement, if I may, Mr. Chairman. 1 6 TECHNICAL ASSISTANCE PROGRAMS In his budget message of January 17 of this last year, 1955, the President said: The organizational arrangements to carry on the mutual security program beyond the present year are now under careful study, and I shall in the near future present to the Congress my recommendations regarding them. The ad- ministration of technical assistance is, of course, a part of the problem of the administration of the several components of the mutual security program. As such, the matter is under intense study at the present time. Senator HICKENLOOPER. And a policy position has not been an- nounced by the President as to his recommendations; is that correct? Mr. HOOVER. That is correct, sir. Senator HICKENLOOPER. From my own personal viewpoint, I think it is a very serious matter, a matter that calls for serious consideration, especially in the light of the attitude heretofore taken about it. I think that is all. Thank you. Senator MANSFIELD. Mr. Secretary, have any steps been taken by the State Department to assume control over the operations of point IV beginning next July 1? Mr. HOOVER. I believe that was more completely covered by this statement, Senator, which I just read, which is that the matter is under study, as set forth in the President's budget message, and is being very carefully considered by all of the agencies and by his own staff. Senator MANSFIELD. I see. Do you have any idea, Mr. Secretary, when the President is going to send up his definite recommendation about the foreign aid program? Mr. HOOVER. You mean with reference to the details of the foreign aid program itself? Senator MANSFIELD. Yes. Mr. HOOVER. No, sir; I don't know the exact dates on that. Senator MANSFIELD. Of course, as you know, under the law, FOA is supposed to be terminated on June 30, 1955. Under the law also the technical assistance program is to be incorporated and administered by the Department of State. It seems to me that time is getting pretty short, and very soon we ought to have some statement from the execu- tive branch as to what it intends to do to carry out the intent of the Congress. Mr. HOOVER. I know that is under very close scrutiny at the present time, and is receiving a great deal of attention. TECHNICAL ASSISTANCE PROGRAMS 7 Senator MANSFIELD. Thank you, Mr. Secretary. Mr. HOOVER. Thank you very much. Senator MANSFIELD. The committee will next hear from Governor Stassen, Director of FOA. Mr. Stassen, as we all know, was Governor of Minnesota from 1939 to 1943. He resigned from the governorship to serve in the Navy under Admiral Halsey from 1943 to 1945. In 1945 he was the United States delegate at the San Francisco Conference on the U. N. Charter. He became President of the University of Pennsylvania in 1948. At the end of 1952 he resigned that position to become Director of the Foreign Operations Administration. Governor, the committee would be delighted to hear from you about your views on the technical assistance program. STATEMENT OF HON. HAROLD E. STASSEN, DIRECTOR, FOREIGN OPERATIONS ADMINISTRATION, ACCOMPANIED BY ROBERT L. OSHINS Mr. STASSEN. Thank you very much, Mr. Chairman. Mr. Chairman, gentlemen of the committee, I, too, welcome the in- quiry of this committee and the careful study it is giving to this very vital part of the total activity of the United States, and the foreign policy implementation through the technical cooperation program, or the point IV program, as it is frequently and commonly referred to. With the permission of the committee, I should like to report on the implementation in the form of a few charts which I think will highlight the present situation and bring it more rapidly to the atten- tion of the committee. TECHNICIANS OVERSEAS In following up on Under Secretary Hoover's very excellent state- ment of the policy and the basic matters involved in this technical co- operation program, may I report to the committee that at the present time there are overseas these technicians that are reflected in this chart. TECHNICAL PERSONNEL- As of Dec. 31, 1954 398 553 гур 868 JANS PARTICIPANTS TRAINING IN US + 671 371 422 NOTE: FAR EAST US Technician figure represents persons employed December 31 Participants are those currently in training at this date. LATIN AMERICA NEAR EAST, AFRICA AND SOUTH ASIA (Ex. Greece - Tackey) 8 TECHNICAL ASSISTANCE PROGRAMS TECHNICAL ASSISTANCE PROGRAMS 9 You will observe that the technicians employed as of December 31, 1954, in the Far East area were 398. From the Far East area there were technical participants training in the United States to the extent of 671. From the Latin American area there were United States technicians serving down there in the Latin American countries to the extent of 553, and there were partici- pants studying technically and professionally in the United States to the extent of 371. In the Near East, Africa, south Asia area, there were 868 United States technicians. From that area there were 422 students or participants in training. In these three areas combined, these three classes of technicians and participants were at the highest level in the history of the technical cooperation or point IV program. In other words, the people who are participating overseas and in the United States are at the highest levels since the beginning of the program, having had quite a steady growth. And this program, as we see it, as we operate it under the policy guidance of the Department of State, under the direction of the President, is a very vital part of the United States foreign policy on this worldwide scene. USE OF COLLEGES AND UNIVERSITIES The next chart shows a very significant expansion of a part of the program that I think has not been thoroughly gone into in the com- mittees of Congress before, but in a way it is reporting now on the results of the practices which we reported to you in the last 2 years, and which have now been put into effect. We are using today the leading universities and colleges of the United States in sister-to-sister institution relationships with leading colleges and universities in the less developed countries of the world. So at the present time there are 61 contracts in force in 43 American universities and colleges serv- ing in 29 countries with the educational institutions of those countries around the world. 100 TECHNICAL ASSISTANCE PROGRAMS VALUE OF FOA UNIVERSITY CONTRACTS JUNE 30, 1954 and JANUARY 31, 1955 TOTAL ALL COUNTRIES CUMULATIVE $38.9 (Maximum U. S. Cost in Millions of Dollars) PRINCIPAL CONTRACTS BY COUNTRY-Jan. 31, 1955 4.5 Utah State Brigham Young Southern Cal. Syracuse 4.0 Am. Univ.-Beirut Wisconsin 2.5 $24.0 29 Countries 43 Universities 61 Contracts 2.0 1.8 1.8 Oklahoma A&M. Cornell Michigan Minnesota N.Y State Stanford Conn 20 Countries 30 Universities 36 Contracts IRAN NEA Regional ETHIOPIA PHILI- PPINES KOREA ISRAEL 1.7 1.5 1.5 1.4 1.2 1.0 Prairie View Cornell Texas A&M Michigan Tuskegee Calif. Armour Illinois Wisconsin Colorado Oregon St. Indiana Texas N. Carolina Harvard Penn. June 30 1954 January 31 1955 LIBERIA MEXICO INDO- INDIA THAILAND PERU NESIA TECHNICAL ASSISTANCE PROGRAMS 11 As you will note on the right here there are some of the principal contracts, principal situations listed in which these universities and colleges are working. Utah State, Brigham Young, Southern Cali- fornia, and Syracuse have been working in very effective programs in Iran. The American University at Beirut has been brought into the program on a regional basis, and the University of Wisconsin is serv- ing in that region, particularly in land use. In Ethiopia, Oklahoma A. and M. is one of the earliest of these con- tracts and has been doing an outstanding job in the development of the educational facilities of Ethiopia. In the Philippines, Cornell, Michigan, Stanford, and Connecticut are participating in the development of the educational resources in the Philippines. In Korea, the University of Minnesota. In Israel, New York State University. In Liberia, Prairie View and Cornell. In Mexico, Texas A. and M., Michigan, the Armour Research Insti- tute, Colorado, and Pennsylvania. In Indonesia, Tuskegee and California. In India, the University of Illinois and the University of Wisconsin. In Thailand, Oregon State, Indiana, and Texas. In Peru, North Carolina and Harvard. There are others of these contracts, but these are some of the leading ones. Under these contracts these institutions send certain selected mem- bers of their faculty Senator HICKENLOOPER. Do you mind an interruption? Mr. STASSEN. If you wish. Senator HICKENLOOPER. Will you give us for the record all the college contracts? Mr. STASSEN. I will put them in the record. I will expand them in the record, the entire 61. Senator MANSFIELD. So ordered. (The information requested is as follows:) FOREIGN OPERATIONS ADMINISTRATION—SUMMARY STATEMENTS Summary—FOA-financed university contracts in operation, Jan. 31, 1955¹ Region Latin America. Europe. Near East, South Asia and Africa. Far East.. Total Number of countries Number of United States universities Number of contracts 11 0 19 0 2 12 6 24 27 13 15 29 3 43 4 61 30*3 15 1 Limited to contracts under which a United States university carries on technical cooperation activities abroad. Excluded are such contracts as those with the Territory of Hawaii, the government of Puerto Rico, American College of Surgeons, and American Hospital Association. 2 Plus 2 regional contracts. 3 Totals 52 but some United States universities have more than 1 contract. * A total of 3 new contracts has been signed and 1 contract has expired since the previous summary dated Dec. 31, 1954. 12 TECHNICAL ASSISTANCE PROGRAMS FOA-financed university contracts in operation, January 31, 1955 LATIN AMERICA Country Host country institution United States university 1. Brazil ¹ 2. Brazil 3. British Guiana and Surinam. 4. Chile. Rural University of the State of Minas Gerais at Purdue University. Vicosa, Brazil. Getulio Vargas Foundation. Michigan State College- University of Maryland. 5. Colombia. 6. Colombia. 7. Costa Rica. 8. Ecuador. 9. Mexico. 10. Mexico. 11. Mexico. 12. Mexico 13. Mexico 14. Nicaragua 15. Panama. 16. Peru 2. 17. Peru.. 18. Peru. 19. Peru. USOMS. Departamento Tecnico Inter-Americano Cooperacion University of California. Agricola. Instituto de Credito Territorial National University of Colombia: (a) Facultad de Agronomia del Valle at Palmira; (b) Facultad Nacional de Agronomia at Medellin. Ministry of Agriculture and Industries of Costa Rica. Universities of Quito and Guayaquil. Instituto Mexicano de Investigaciones Technologicas Banco de Mexico. El Olivar School, Mexico City. National University of Mexico. Escuela Superior de Agricultura “Antonio Narro" Banco de Mexico (Instituto Mexicano de Investiga- ciones Technological). Servicio Cooperative Inter-Americano de Educacion Publica. Panama Ministry of Agriculture and National Insti- tute of Agriculture of Panama at Divisa. USOM. The National School of Engineering of Peru. University of Illinois.. Michigan State College- University of Florida. University of Idaho. Armour Research Foundation of Illinois Institute of Tech- nology. University of Michigan. University of Pennsylvania. Texas Agricultural and Me- chanical College System. Columbia University Teachers College. University of Florida. University of Arkansas. -- Harvard University. University of North Carolina_ Field of activity Agriculture and home economics. Business administration.. Agriculture, engineering, health, housing, community develop- ment. Agriculture. Housing. Action officer Keith Himebaugh, S/FOOD, Wilbur B. Powell, ITAD. Hugh W. Mohrbacher S/UCC. Keith Himebaugh, S/FOOD. George Reed, CDD. Agriculture and Natural Re- Keith Himebaugh, S/FOOD. sources. Agriculture. _do_ Industrial development. Vocational education. Agriculture (veterinary). Agriculture…. Education. _do_ Agriculture and home economics. Public health (nutrition). Sanitary engineering.. Programa Cooperativo de Experimentacion Agro- North Carolina State College of Agriculture. pecuaria. The National School of Engineering of Peru. Agriculture and Engineering of the University of North Carolina. do.. Textile engineering. Keith Himebaugh, S/FOOD. Keith Himebaugh, S/FOOD. Wilbur B. Powell, ITAD. George Hall, ED. Keith Himebaugh, S/FOOD. Russell Dilts, S/FOOD. George Hall, ED. George Hall, ED. Keith Himebaugh, S/FOOD. Dr. Charles Williams, PHD. Dr. Charles Williams, PHD, and Hugh W. Mohr- bacher, S/UCC. Keith Himebaugh, S/FOOD, and Hugh W. Mohr- bacher, S/UCC. Wilbur T. Powell, ITAD, and Hugh W. Mohr- bacher, S/UCC. 1 This contract is currently being extended. ? This contract is currently being renegotiated. TECHNICAL ASSISTANCE PROGRAMS 13 EUROPE NEAR EAST, SOUTH ASIA, AND AFRICA 1. Regional O/NEA.... USOM's in Lebanon, Jordan, Syria, Iraq, Iran, Libya, 2. Regional O/NEA... 3. Afghanistan. Pakistan, Ethiopia, Liberia, Saudi Arabia, Egypt. USOM's in Afghanistan, Pakistan, Iraq, Iran. Jordan, Libya, Egypt, and possibly Ethiopia and Turkey. Government of Afghanistan. Teachers Training College in Kabul and Ministry of Education. Government of Ethiopia and USOM. Allahabad Agricultural Institute. 4. Afghanistan.. 5. Ethiopia. 6. India. 7. India. Indian Institute of Technology of Kharagpur. 8. India. 9. Iran.. 10. Iran ¹ 11. Iran 1 12. Iran.. 13. Iraq. 14. Iraq. 15. Israel. 16. Jordan. 17. Lebanon. 18. Liberia. 19. Liberia.. American University of Beirut.. Training in fields of agriculture, University of Wisconsin. Wyoming University. Columbia University Teachers College. Oklahoma Agricultural and and Mechanical College. University of Illinois.. University of Illinois.. Bengal Engineering College at Sibpur, West Bengal, University of Wisconsin. and the Indian Institute of Science at Bangalore, Mystore, and others. Rural Development Board of Iran. .do.. Government of Iran and USOM. University of Tehran. Government of Iraq-- Utah State Agricultural College. Brigham Young University. Syracuse University. University of Southern Cali- fornia. Bradley University. Government of Iraq and Abu Ghraib Agricultural University of Arizona. College. USOM. Cooperative Department for Agriculture of the Hashe- mite Kingdom of Jordan. Ecole de Arts et Metiers of Beirut. Joint Commission of Liberia... Booker Washington Institute. State University of New York. Montana State College- Isaac Delgado Central Trades School (New Orleans). Cornell University. Texas Agricultural and Mechan- ical College System (Prairie View Agricultural and Me- chanical College). education, engineering, public administration, public health, and preventive medicine. Agriculture (land problems survey). Agriculture, engineering, educa- tion and other fields. Education, teacher training. | Agriculture and education. Agriculture. Engineering- Engineering and education. Agriculture. Education. Audio-visual education. Public administration. Vocational education. Agriculture. Dr. Arthur H. Estabrook, O/NEA. Monroe McCown, S/FOOD. J. Russell Andrus, UCC. Clarence Hendershot, ED. Hugh W. Mohrbacher, S/UCC. Wessels Middaugh S/FOOD, and J. Russell Andrus, UCC. Edward V. King, ITAD, and J. Russell Andrus, UCC. Hugh W. Mohrbacher, S/UCC. Wessels Middaugh, S/FOOD. Richard Farnsworth, ED. Lawrence J. Tate, M/PR. Harvey Sherman, PAD. Richard Farnsworth, ED. Wessels Middaugh, S/FOOD. Public health, education, agri- Hugh W. Mohrbacher, culture, industry. Agriculture. Education. Legal codification. Education... S/UCC. Monroe McCown, S/FOOD. Dr. H. D. Reid, ED. Julius Kessler, AFR. Dr. H. D. Reid, ED. 59637-55- This contract currently being extended. 14 TECHNICAL ASSISTANCE PROGRAMS Country 20. Nepal. 21. Pakistan. FOA-financed university contracts in operation, January 31, 1955—Continued NEAR EAST, SOUTH ASIA, AND AFRICA-Continued Host country institution Ministry of Education of Nepal. Punjab University and Others. Tezgoan, Ah Sanullah, Dacca, Chittagong- Peshawar University. Karachi University. 22. Pakistan.. 23. Pakistan. 24. Pakistan. 25. Turkey. 26. Turkey. 27. Turkey. University of Ankara. 1. Burma. 2. Burma... 3. Indonesia. 4. Indonesia. 5. Korea. 6. Philippines. 7. Philippines.. 8. Philippines. 9. Philippines.. English language training center at Ankara. Ataturk University. Government of Burma Ministry of National Planning. Industrial Development Corporation of Ministry of Industry and Mines. University of Indonesia. Teacher training centers in Medan, Semarang, and others. National University of Seoul- College of Agriculture, University of Philippines... Institute of Public Administration, University of Philippines. Colleges of Engineering, Education, and Business Ad- ministration of University of Philippines. University of Philippines - - Taiwan College of Engineering. Taiwan Teachers College. National Taiwan University. 10. Taiwan.... 11. Taiwan…. 12. Taiwan. 13. Thailand 14. Thailand. 15. Thailand. Chulalongkorn University. Kasetsart University. The College of Education. United States university University of Oregon.. State College of Washington. Texas Agricultureal and Mech- anical College System. Colorado Agricultural and Me- chanical College Wharton School of Finance and Commerce, University of Pennsylvania. Georgetown University. University of Nebraska. New York University FAR EAST Cornell University. Armour Research Foundation... University of California. Tuskegee Institute. University of Minnesota.. Cornell University.. University of Michigan. Stanford University.. University of Connecticut. Purdue University. Pennsylvania State University. University of California. University of Texas. Oregon State College. Indiana University. Field of activity Education Agriculture, engineering, edu- cation, business administra- tion and home economics. Education, business adminis- tration, agriculture, engineer- ing and home economics. Engineering, agriculture, edu- cation, and home economics. Action officer Clarence Hendershot, ED. J. Russell Andrus, UCC. Do. Do. Public and business administra- Harvey Sherman, PAD. tion. Education-English training. language Agriculture, engineering, busi- ness administration, educa- tion. Public administration. Richard Farnsworth, ED. J. Russell Andrus, UCC. MacDonald Salter, PAD. Use of aerial photography (photo | Walter G. Stoneman, IT. interpretation). Industrial research and develop- ment. Medicine. Vocational education.. Charles Brook, ITAD. Richard C. Parsons, PHD. Clarence Hendershott, ED. Agriculture, engineering, medi- J. Russell Andrus, UCC. cine and education. Agriculture. Public administration. Engineering, William F. Dickson, S/FOOD. MacDonald Salter, PAD. education and J. Russell Andrus, UCC. business administration. Labor. Engineering. Education-teacher training. Agriculture. Engineering. Agriculture. Education. Roger Dougherty, LAF. Charles Brook, ITAD. Clarence Hendershot, ED. William F. Dickson, S/FOOD. Henry Randall, ITAD. William F. Dickson, S/FOOD. Clarence Hendershot, ED. TECHNICAL ASSISTANCE PROGRAMS 15 ? TERMS OF CONTRACTS Senator GREEN. Aren't these contracts in a standard form? Mr. STASSEN. Yes; they are. There is a basic form which is then varied to fit the particular situation, and they regularly provide that certain of the faculty of an American university or college go to the college or university in the assisted country, and there help in the development of that institution in teaching and conferring with the faculty of that institution, in establishing whatever might be neces- sary, the laboratories or the teachers' college. Then certain members of the faculty of the other institution come to the United States and here engage in such added studies or observations as are needed, and then there is a certain exchange of students coming from the other institutions to the American institutions. So you develop a sort of a depth of professional, technical, and broad relationship between these two areas. We will put in a standard contract form and then permit the com- mittee to have access to any others of them. Senator HICKENLOOPER. I might suggest, if there are any substan- tial variations from the standard contract, those ought to be called to our attention. Senator MANSFIELD. I would assume that the Governor would see to that. Mr. STASSEN. I will. (The information referred to begins on p. 47.) Senator MANSFIELD. Those figures on the chart (see p. 10) for each country represent the amount of money that we are expending on this institution-to-institution basis. Mr. STASSEN. That is right. That is the total of the commitment to the institution. It frequently is a contract that runs for 3 years, but we charge the total commitment against a present year's appropri- ation of Congress. In other words, we do not make a commitment in any university unless it is covered by existing appropriation of the Congress, even though it will take some period of time to fulfill the obligation and to collect the money. It is something like the lead time on building an airplane or some- thing of that kind. Senator GREEN. Under the contract what obligations fall on the other country? Mr. STASSEN. The other country furnishes the educational budget of their own university, and usually the local currency expense for the activities in that country of our faculty members who go there and the development of the laboratories, courses, and things of that kind. As I will indicate a bit later, taken as a whole, the other countries are putting in more than matching amounts to the United States dollars. EXCHANGE OF STUDENTS Senator MANSFIELD. Governor, if I may ask another question: Did I understand you to say that there was an exchange of professors be- tween sister institutions? Mr. STASSEN. That is right. Senator MANSFIELD. As far as students from the foreign institu- tions are concerned, are there transfers to this country for further 16 TECHNICAL ASSISTANCE PROGRAMS acquisition of technical knowledge here, and are there no transfers of American students to do the same kind of job in the sister institu- tion abroad? Mr. STASSEN. There is some in the opposite direction, but it is not financed by FOA. American students can go to carry on special studies in these foreign institutions, and sometimes they, in effect, go with the faculty members to do postgraduate work. But we do not finance any American student going overseas. That is a matter of his private education and the development of his own postgraduate degree, or something of that kind as the case may be. INCREASED FIELD TECHNICIANS This third chart shows the rising total of the technicians in the field, and also the shifting emphasis in the program so far as geography is concerned. You will notice that the total technicians in the field com- ing up from June 30, 1953, 1,506; to June 30, 1954, 1,748; December 31, 1954, 1,819; which is then the largest total in the history of the program. You may remember that; in fact, I think the chairman would be particularly interested, the number 1,750 was reached when a malaria technician went to Nepal, and I think you personally observed that excellent program in Nepal, and you know the tremendous difficulty in malaria. An outstanding technician from Florida went to Nepal and became No. 1,750 out in the field, a very able young man in that area. We have in the program and are financed and are driving forward the expansion, particularly in the Far East, to the point where we have 2,000 American technicians serving in the field, really in the front lines of this tremendously important work, at one time. You will notice in connection with the Near East, that we have divided our organization in accordance with the regional offices of the State Department. We have exactly the same geographical divisions, so we will follow the close guidance from the Assistant Secretaries of State and their offices. So in the Near East, India, and Pakistan, or in what usually is called the Near East and the African area, from this we are going up from 641 to 865 to 868. The Far East is going up from 330 to 399, and is projected on up in our plans, but there was no change in total from June 30 to Decem- ber 31. Latin America is now fairly stabilized between 535, 530, and 553. There is no major expansion planned in the technicians in this area, but there is the expanding emphasis in the Far East, Near East, south Asia, and Africa. PROGRAM IN EUROPE Senator MANSFIELD. There are no technical assistance programs operating in Europe at the present time; is that what the committee is to understand? Mr. STASSEN. Not in this same sense with the countries in the Organization of European Economic Cooperation. There is a cer- tain amount of productive exchange, and we are phasing up to that and shifting it over to the European Productivity Agency, which is a European organization under the Organization for European Economic Cooperation. TECHNICAL ASSISTANCE PROGRAMS 17 FOA TECHNICIANS IN THE FIELD BY REGION TECHNICAL COOPERATION PROGRAM, FY 1953-1955 TOTAL IN FIELD 1,819 1,748 1,506 REGIONAL TOTALS A. Near East, Africa & South Asia (Excluding Greece & Turkey) 641 865 868 B. Far East 399 399 330 C. Latin America 535 553 530 June 30 1953 June 30 Dec. 31 1954 1954 June 30 1953 June 30 1954 Dec. 31 1954 Note: Excludes contract technicians. . 18 TECHNICAL ASSISTANCE PROGRAMS We still do have some trainees coming from Europe to the United States, particularly in the fields of interest in the labor organizations, in certain industrial productivity, but that is phasing down quite rapidly in accordance with the wishes of Congress and in accordance with the economic recovery that has occurred in Europe. As you know, the Marshall plan has been a solid success, and these countries are now able and should finance their own technical exchange with the United States, broadly speaking. Senator MANSFIELD. Would you describe the programs now in operation in southern Italy and Sicily as productivity programs rather than technical assistance programs? Mr. STASSEN. No, I would describe those as technical cooperation and development, particularly the land development in southern Italy. Senator GREEN. In what sense do you use the term "in the field” on these charts? Mr. STASSEN. I mean they are serving in a country with which the United States has a technical cooperation agreement. That is in one of the free-world countries. They are serving directly on projects and are not a part of administration. In other words, they are not a part of the administrative personnel, either in Washington or in a region, but they are working overseas on technical cooperation projects. Senator GREEN. Is holding a professor's chair an activity that falls within that definition? Mr. STASSEN. The professor's chair would be in addition to these people. These are the technicians, exchanges we have on this chart. The university professors' exchange would be in addition to these figures. Senator GREEN. That is what I wanted to find out. Thank you. FOOD PRODUCTION Mr. STASSEN. This next chart simply spotlights one more fact; that is, we have now reached the point where on the first of the necessities of human life, to wit, food, the progress has been so significant throughout the free world that the free world was better fed in 1954 than it had ever been before. Perhaps "ever" is a long time, but at least "ever" in modern times. India rather emphasizes that. You see the rise in food production and all foods and in cereals, and while there is some variation with weather; nonetheless the weather not being quite as good in 1954, preliminary reports would indicate there might have been a little dip again, the cumulative effect of the technical cooperation work and the initiative of these countries in their own programs. I would emphasize always that the major thing that happens de- pends upon the country itself. We can only assist them and work with them. There are actually, as such, cereal surpluses, rice surpluses in the vast areas of the world that so frequently in the past have had starva- tion. We are concentrating with them on the development of some storage capacity so if you get a year of some general crops, and also in the distribution of food that is produced, and of course, in their own buying power so they can buy the food that is produced, much remains to be done. TECHNICAL ASSISTANCE PROGRAMS 19 INDIA'S FOOD SITUATION PRODUCTION OF FOOD HAS INCREASED... ...BUT SUPPLIES ARE BELOW POPULATION REQUIREMENTS 110 100 (Index: 1936-38-100) 90 30 80 80 ALL FOODS CEREALS 0 1946-47 47-48 '48-49 49-50 '50-51 '51-52 52-53 (Crop Years) 2,250 + Estimated Requirements 1,747 + Total Calories 115 104 Other Milk 140 Sugar 198 Pulses 1,190 Cereals CALORIE FOOD SUPPLY PER CAPITA DAILY-1952-53 20 TECHNICAL ASSISTANCE PROGRAMS But the major advance in the first necessity of life, in food, is well on its way. That is a very significant worldwide fact, particularly when you set it over against the statement of the Premier of the Soviet, as he resigned, as to their trouble in agriculture and the implications of that to their side of the curtain. Senator MANSFIELD. Governor, would you mind telling the commit- tee what "pulses" are? Mr. STASSEN. They are related to cereals. How would you technically describe them? Mr. ROBERT L. OSHINS. It is a group word for beans, peas, lentils, and other edible legumes. Mr. STASSEN. They furnish protein and there are various varieties in the Near East, and they lump them together under the word "pulses." Senator GREEN. You say "to meet population requirements." How do you determine what requirements are? Mr. STASSEN. Various studies are made by medical men, public health, nutritional people, and they say that a human being on the average in an environment such as India's should have 2,250 calories per day. We are moving up toward it and are ahead of what had been the average calorie diet, and you can see in the increased pro- ductivity of the lands of these less developed areas that the movement is in that direction, even with some advance in population that has occurred. But the general statement, I would say, is that the average of the nutrition experts, the public health people, say that in these climatic conditions a human being ought to have 2,250 calories a day. These figures on these charts are from F.O.A. If he is doing heavy work- Senator GREEN. Population requirements would mean the same as human requirements. Mr. STASSEN. That is right. Senator GREEN. I didn't know it varied from one part of the world to another. Senator HICKENLOOPER. Governor, do you have the figures for 1954? That chart ends at 1953. Mr. STASSEN. They are only preliminary. They seem to cut down a bit, but not as low as 1950-51. There will still be satisfactory food supplies in India. Senator HICKENLOOPER. I would suggest, Mr. Chairman, as soon as any preliminary statistics of such kind are available, the governor furnish them for the record, so they can continue the chart and see what is happening. Mr. STASSEN. We will. (The following information was subsequently furnished:) India's food situation [Index: 1936-38=100] Crop year All foods Cereals Crop year All foods Cereals 1948-49- 1949-50... 1950-51. 99 103 99 *888 94 1951-52_ 98 89 1952-53 1953-54 101 91 103 100 113 111 Source: 1948-49 through 1952-53, U. N. Food and Agriculture Organization; 1953-54 and 1954-55, esti- mated by Foreign Operations Administration on basis of FAO indexes and production data reported by U. S. Department of Agriculture. TECHNICAL ASSISTANCE PROGRAMS 21 PROGRAM SHIFTS Mr. STASSEN. This next chart (see p. 22) shows a matter we want to report thoroughly on to the committee, and in which we will welcome your guidance and comments as you pursue your studies. I am pleased you contemplate going into the field. I know you have been in the field and you contemplate doing more of that in this review. Let me put it this way: As we reviewed the situation in the technical cooperation programs around the world, we noted certain things, that even though excellent work is accomplished in individual countries in effecting the food, the public health, the literacy, if in the process a country loses its financial stability, as a runaway inflation or a chaotic administrative picture, or if it does not develop the industrial jobs to promote employment for the people who are no longer needed in an improved agricultural production, you create new and very serious problems. So we are in the process of shifting the emphasis in the program in a new way. Here you see that in the agriculture and natural re- sources in percentage the effort is declining. In the health and sanita- tion it stayed relatively in about the same importance. In education, going beyond literacy, it is expanding. You will notice that the per- centages, in the Near East area, are going up from 15 to 19 percent. Far East down slightly from 19 to 18 percent, but the dollar figures are about the same. Latin America, up from 12 to 16 percent. This generally increased emphasis on education, including, for example, the establishment of the vocational-educational schools for crafts and occupations, the engineering schools, and the various types of profes- sional schools, brings that less-developed society along as it goes beyond the stage of enough food, beyond the stage of enough clothing for its people, into a more developed society. At the same time we are stepping up the public administration program to endeavor to educate and train their young men to be more economic in the managing of the financial exchange of their country, the balance of payments, the budgetary processes, the kind of things that a society, as it moves away from an agricultural, less-developed society, must have if it is to be stable and continue to develop. For example, in public administration, Michigan University has established with the University of the Philippines a public adminis- tration institute in Manila that has in it now over 300 students, includ- ing students from other countries like Thailand, Indonesia, and in- quiries are arriving from the entire Far East on this institute con- ducted in the University of the Philippines with the joint work of the University of Michigan. Likewise, in the new situation in Vietnam, in Indochina, Michigan State University is putting in there a public administration institute to assist in training administrators who are so badly needed in the country. So in various parts of the world we are giving increased attention for the preparation of public administration, and what might be called financial administration, in the form of technical cooperation we provide to the country. 22 TECHNICAL ASSISTANCE PROGRAMS PROGRAM SHIFTS in TECHNICAL COOPERATION FIELDS OF ACTIVITY, BY REGION, FY 1954-1955 SELECTED FIELDS OF ACTIVITY AS PERCENTS OF TOTAL AGRICULTURE and NATURAL RESOURCES 47% HEALTH and SANITATION EDUCATION Thening to no 37% 31% 27% 1954 1955 21% ہیں۔ 36% 22% 21% 21% 20% 15% 14% 1954 1955 NEA FAR EAST LATIN AMERICA NEA FAR LATIN EAST AMERICA INDUSTRY and TRANSPORTATION PUBLIC ADMINISTRATION 19% 19% 18% 16% 15% 12% 1954 1955 NEA FAR LATIN EAST AMERICA COMMUNITY DEVELOPMENT and HOUSING 12% 11% 14% 11% 12% 13% 13% 11% 8% 10% 5% 6% 2% 3% 4% 3% NEA FAR LATIN EAST AMERICA NEA FAR EAST LATIN AMERICA NEA FAR EAST * LATIN AMERICA 20% 16% Note: FY 1954 Obligations; FY 1955 Program = *Percentages revised since first use of this chart to reflect new program levels due to allocation of funds from Sec. 121, as authorized by the President on February 10, 1955. TECHNICAL ASSISTANCE PROGRAMS 價 ​23 • Likewise, we find that as food production increases, the transport of that food becomes more and more important, and you must bring forward the transportation system of the country. So you will find more of the technicians advising in matters of railroads and things of that kind; thus we have enlisted the cooperation of the American Railroad Association, our own general railroad group, to receive students from these other countries, and to help them improve their railway systems on the basis of technical cooperation. Then in community development and housing, the significant job being done in India, in the Near East area and that part, is expanding. There is some question here as to just how you classify these Far East programs, since they are in a very formative state. In fact, we are endeavoring to organize a community program in Indochina at the present time, but it does not show up as much of a commitment of funds at the present time. In Latin America it remains about the same. Senator HICKENLOOPER. Mr. Chairman, may I ask this: There is a great drop in community development and housing from 8 percent to 1 percent. What is the reason for that? Mr. STASSEN. That has been due to a delay in the program in those Far East countries under the war conditions, and so forth. We esti- mate this field of activity will complete the fiscal year around 10 per- cent and will be up from last year, but at the present time the com- munity programs in the Far East have been delayed in various coun- tries because of war and host governmental problems. PROBLEMS IN BROAD POLICY This bringing forward of the technical cooperation to unfold with the progress of the country is one of the most important aspects of the broad policies of the program. As you observe, you can be doing excellent work in the basics, in agricultural methods or in public health. You can be overcoming epidemics of various kinds. You can be teaching them more about public health. You can be showing them better methods of fertilizer and various types of seed. You can be teaching more of them to read and write and be doing excellent work, but if there are chaotic government conditions, and if wild inflation wipes out jobs and creates conditions of chaos, sometimes Communists take over, and things of that kind, and then the real objective of improving conditions of living is missed. + Furthermore, if the educational advance, especially in some of the older culture countries, produces an excessive number of college grad- uates who do not have a place that they find they can fit into the society, and they become in effect intellectually frustrated, with a feel- ing that they are not participating in a growing community, that can be a serious matter. These university graduates, seeing how our land- grant colleges have played a significant part in the development of America and the fitting in of intellectual capacity in the vital life of America, and the fulfillment of the lives of those who are intellectually competent, can be better satisfied. These are some of the vital prob- lems in the current unfolding of the program. Senator GREEN. Governor, may I ask you a question there? Mr. STASSEN. Yes. 24 TECHNICAL ASSISTANCE PROGRAMS DANGER OF BEING MISUNDERSTOOD Senator GREEN. If we go further than the original plan of technical cooperation and attempt to improve their economic system and form of government, aren't we in danger of meeting a great deal of opposition and being misunderstood? Mr. STASSEN. I think, Senator, there is always the danger of being misunderstood in these programs, and in what we do overseas, but the greater danger is that we begin to work with them, and then they have the impression that if we fail to follow through in an intelligent way, we leave them worse off than they were before. In other words, if you start the process in which these people begin to move through their own desires, their own urgings, their own wishes, out of their present elementary agricultural societies, and then if they find them- selves with greater unemployment, with dissatisfied population, with an expanded Communist infiltration, then you will have an unfor- tunate outcome. So that it is a matter of how does the United States move with the development of these less-developed areas. Senator GREEN. Have you tried this out? Have you met with oppo- sition on the ground that you are criticizing the existing governments there? Mr. STASSEN. No, it is working out the other way around. By that I mean, in the places where we have moved in a comprehensive way-- let's take Iran, for an example. Iran, as you know, had a very pre- carious situation two years ago. There was instability in its govern- mental picture. The oil revenue had ended. In that situation, with Communist infiltration and instability, even though there were better crops and other improvements as a result of the basic technical coop- eration, you came then to the moment of real chaos, with mobs in the streets, and then a more stable government came in as the people re- fused to turn against the United States, and refused to turn against the Shah of the country. That gave them a new opportunity to try to work with the people of Iran. At that time their currency-the former government had left their treasury bankrupt-the currency was unstable and we worked with them immediately in stabilizing their currency, in fitting together technical cooperation and certain grants-in-aid, so that you had sta- bility, you worked with the government in coming through that period of financial difficulty and once through it their Government then made a new settlement on their oil, and their new Parliament approved the agreements. There is every indication that they are moving along in a coopera- tive, friendly and appreciative way in the utilization of their resources. The same thing is true now in Guatemala. They welcome our coop- eration with them in meeting the very real problems they have in the financial stability of their country and in the more advanced proj- ects that they need. Senator GREEN. They do not want you to discontinue? Mr. STASSEN. That is right. Senator GREEN. If we weren't doing it with their consent, they would think you were a subversive. TECHNICAL ASSISTANCE PROGRAMS 25 IMPORTANCE OF HOST GOVERNMENT'S CONSENT Mr. STASSEN. It is important that we do each of these projects only at the request of their government, and with the continuing consent of their government. Take, for example, this Public Administration Institute at Manila. The University of the Philippines conducts it, and the Michigan University works with them, and the United States Government does not engage in the technical side of these adminis- trative works in the Philippines. It is done through this institute, with their own university, and on that basis they welcome it and utilize it to a very marked degree. But you do put your finger on a very important consideration, that their receptivity and approach of welcome to the program must always be in mind. NUMBER OF PARTICIPANTS The next chart (p. 26) shows the number of participants who are programmed by regions in technical cooperation. This shows the future objectives by the end of this calendar year. This amount is funded, so that if we can get the able people to par- ticipate, this is the number, and we have now joined with the Atomic Energy Commission in President Eisenhower's program of Atoms for Peace, and some of these participants will be coming to this country to actually study in our peaceful atomic uses courses at Argonne. So it shows how far we have gone from the elementaries of agriculture to the very significant matters of future import, of the peaceful uses of atomic energy. Senator HICKENLOOPER. May I ask: In 1955 does that mean the year ending June 30, 1955 ? Mr. STASSEN. That is right. These, you understand, are pro- grammed. There is usually some lag behind that in people arriving in this country. These are the students and technicians who come to the United States for study, and this shows the three regions. I would say these are targets that are being worked on and that are funded. We can do this within the current fiscal year's appropriation. 1 26 TECHNICAL ASSISTANCE PROGRAMS NUMBER OF PARTICIPANTS PROGRAMMED UNDER TECHNICAL COOPERATION, FY 1953-1955 TOTAL PROGRAMMED REGIONAL TOTALS A NEAR EAST, AFRICA and SOUTH ASIA 2,182 3,158 3,793 1,050 782 1,376 Ⓡ FAR EAST 1,381 1,000 659 C LATIN AMERICA 741 1,108 1,036 1953 1954 1955 1953 1954 1955 Fiscal Years * Excluding Greece-Turkey, financed with Defense Support funds. TECHNICAL ASSISTANCE PROGRAMS 27 " FOREIGN OPERATIONS ADMINISTRATION US. NATIONAL PERSONNEL PROGRAM ADMINISTRATIVE (Includes Participating Agency Personnel) 2,784 2,273 2,055 1,990 い ​2,035 1,952 Jan. 31 1953 Jan. 31 1954 Oct. 31 1954 Jan. 31 1953 Jan. 31 1954 Oct. 31 1954 28 TECHNICAL ASSISTANCE PROGRAMS This chart (p. 27) shows the United States national personnel and the program personnel. That includes these people out in the field that Senator Green asked about. As you see, they have been gradu- ally increasing, and in the reorganization, when President Eisen- hower's reorganization plan made FOA responsible, we consolidated the administrative structure and made these reductions in adminis- tration, so that the result is we have less people in Washington and more people out in the field in the technical cooperation program. HOST COUNTRY CONTRIBUTION This chart (p. 29) answers a question that Senator Green asked earlier and Senator Hickenlooper referred to, about the host countries' contributions. You can see that the contributions made by the other countries have been greater than the United States contributions, and are expanding. In Latin America, where the program has been going the longest, you see that the other countries are putting in about two-and-a-half times each $1 that the United States puts in. The statistics are not avail- able in the early stages for the Far East, and the program is getting going in a very real way just this year. You see the Near East, Africa, and South Asia were very significant in respect to their host country contributions. Senator MANSFIELD. Governor, would it be possible for the com- mittee to have the amount of contributions by all countries participat- ing in the technical assistance program for the years '53, '54, and '55 if they are available? Mr. STASSEN. We certainly will. Senator MANSFIELD. And will you please place them in the record. Mr. STASSEN. We will. 1 : TECHNICAL ASSISTANCE PROGRAMS 29 59637-55-3 U.S. and HOST COUNTRY CONTRIBUTIONS TECHNICAL COOPERATION PROGRAM FY 1953-1955 (Millions of Dollars and Equivalents) NEAR EAST, AFRICA and SOUTH ASIA LATIN AMERICA olday to bito da volonto 292 336 262 307 Host Country Contributions (estimated) 183 248 109 U.S. 74 59 55 87 77 53 5 61 61 38 17 1953 24 1954 FAR EAST 26 1955 73 49 + 24 1953 1954 1955 1953 1954 1955 Fiscal Years + Host country contributions in Far East not calculated prior to FY 1955 30 TECHNICAL ASSISTANCE PROGRAMS (The following information was subsequently furnished :) Technical cooperation and technical exchange programs, fiscal years 1953–55 [Obligations by area and country, United States and host country contribution] Fiscal year 1953 Fiscal year 1954 Fiscal year 1955 1 Country, by area United States contribu- tion Host country con tribu- tion 2 United States contribu- tion Host country con tribu- tion 2 United Host States contribu- country contribu- tion tion 2 Europe 3 $14, 660, 500 $13, 382, 800 Austria 446, 600 218, 800 Belgium-Luxemburg.. 357, 500 345, 300 Denmark.. 213, 900 336, 900 France.. 1,290, 500 935, 000 Germany (Fed. Rep.). 193,500 833, 800 Iceland. 65, 800 108, 900 Ireland.. -967, 900 -4, 800 Italy 715, 300 1,303, 400 Netherlands_ 282, 300 258, 800 Norway. 402, 200 286, 800 Portugal. 295, 400 Spain... 220, 600 616,000 Sweden -27, 900 Trieste. United Kingdom. 968, 800 66, 200 Yugoslavia.. 615, 800 1,719, 300 United States Regional Organizations. 2,578,300 Operating and miscellan- eous costs.. 3, 460,000 1,479, 400 OEEC... 2, 770, 900 130, 900 Multicountry. 1,776, 600 878, 600 U. S. Government agen- cies.... 1,024, 700 324, 500 Private contractors_ 763, 100 687,500 Coal-Steel Community. NATO.. 13, 500 Asia.. 112,618, 000 639, 000 5, 000, 000 tories. Egypt.. Ethiopia Greece.. India Iran 625,000 (4) 1,207,000 (2) Near East, Africa, and South Afghanistan Dependent overseas terri- Iraq. Israel. Jordan. Lebanon Liberia Libya.. Nepal. Pakistan.. Saudi Arabia. Turkey.. Regional projects. Domestic program costs.-- Far East...………. China (Formosa)…. 12, 617, 000 | 19, 952, 000 1,395,000 2,223,000 43, 577,000 100.000.000 22, 546,000 16.000 000 1,828,000 2,361, 000 2,623,000 966, 000 1,548,000 1, 174,000 458,000 11, 593, 000 1,604, 000 2, 131, 000 1,520,000 2,206, 000 16,621.000 2, 100.000 935,000 1, 190.000 1,383,000 624, 000 (4) 15, 120.000 1,750,000 (2) 3,256,000 | 19,321,000 3,000. 000 (2) 27,011,000 |156, 577.000 2, 194.000 1,483.000 2, 341, 000 2,793, 000 1, 164, 000 1,490 000 869,000 8,156,000 896, 000 3,048, 000 974,000 1, 242, 000 18.000 000 16, 640 000 1,500 000 2,160 000 903,000 2, 250.000 711,000 500 000 28,400.000 2, 000, 000 (2) 57, 014, 000 1, 620, 000 2. 400.000 3, 500.000 3,400 000 626.000 15,400 000 8,500 000 2,200 000 1, 400 000 2,200 000 2, 000 000 1,300 000 1,400 000 780 000 5,300.000 200 000 1, 000 000 1,573.000 2, 215, 000 23, 570.000 22,033, 300 25, 532, 800 2,247, 500 4, 263, 800 3, 425,000 Indochina (Associated States). 502, 600 1,367. 300 Philippines. 9, 263, 700 9, 449, 900 3. 515,000 7,630 000 Thailand. 6, 463, 500 5, 516, 800 Indonesia.. 3, 556, 000 4,935, 000 Footnotes at end of table. 5, 000 000 4.000, 000 5, 000, 000 5,400.000 12,752, 000 2,361,000 (2) 157,490.000 21, 682 000 4, 678, 000 810.000 1,516,000 1,712,000. 723,000' 800.000 32, 972, 000 (2) 49, 535,000 2,501, 000 2,000.000 26.749.000 13. 100,000 5, 185, 000 1 41, 600 17,000 77, 705, 000 1,341,000 5, 000, 000 3, 365, 000 4,388.000 2, 629.000 536,000 12, 917.000 TECHNICAL ASSISTANCE PROGRAMS 31 Technical cooperation and technical exchange programs, fiscal years 1953–55— Continued [Obligations by area and country, United States and host country contribution] Fiscal year 1953 Fiscal year 1954 Fiscal year 1955 1 Country, by area United States con tribu- Host country tion contribu- tion 2 United States contribu- tion Host country contribu- tion : United States contribu- tion Host country contribu- tion 2 1,838,000 13, 620, 000 Chile. Colombia. 869, 500 2,815, 300 3, 115, 800 Latin America.. Bolivia. Brazil. $16, 953, 800 $38, 398, 600 $24, 342, 000 $53, 193, 400 $2C, 000, 000 $72, 131, 800 1,287, 300 2,967,100 1,180, 200 3, 192, 600 2,719,500 | 3,651, 600 1,965, 000 1,441, 500 27, 906, 400 3,070, 000 34, 120, 000 1, 432, 400 2,230,000 1,657, 000 1,841, 600 Costa Rica……. 734, 200 Cuba.. 202, 300 Dominican Republic.. 268, 000 Ecuador. 1,045, 800 El Salvador.. 628, 100 1,062,000 100,000 148, 600 2,690, 400 1, 134, 200 1, 421, 500 857, 200 185,000 237,000 2, 320, 000 1,073, 000 2,556, 000 1, 508, 100 612, 300 Guatemala……. 205, 900 Haiti.. 545, 200 612,000 895, 400 188, 100 1,035, 000 Honduras. 629, 200 1, 985, 800 1,087, 400 Mexico 625, 400 Nicaragua Panama. Paraguay 572, 100 657, 100 1, 031, 200 Peru... Uruguay. Venezuela. 1,624,000 702, 000 976, 000 1,552, 800 1,008,000 2, 347, 200 1,375, 400 543, 200 1, 141, 100. 1,249, 900 2,423, 800 132, 200 Dependent overseas ter- ritories. Regional projects. Domestic program costs.. Voluntary agencies and interregional projects.. Less funds released from prior year's programs... 99, 900 36, 300 1,002, 700 610, 100 -583,000 ¹ Estimated figures, based on congressional presentation of June 1954. 'No information available on participating countries contributions in Europe and Greece and Turkey because of the different nature of the technical assistance program there. In the Far East for fiscal years 1953 and 1954, host country contributions were not estimated. In Europe, the technical assistance program is termed a "technical exchange program." 4 Not available. 518, 000 1,270, 800 6,300 220, 100 130,000 1,054, 000 1, 351, 400 960, 000 673, 000 919, 200 2, 030, 500 1, 618, 900 1,379, 100 1, 131, 900 2,314, 000 2,746, 900 509, 500 1, 030, 600 212,000 975,000 1,267,000 975, 000 1,400,000 825,000 975,000 1, 315, 000 2, 323,000 400,000 195,000 550,000 974, 000 1, 512, 000 588,000 1, 265, 400 1,900,000 162, 000 728, 700 654, 000 3,792, 000 705, 500 1, 145, 900 1,386, 700 1, 117, 200 3,273, 900 3,823, 400 357,000 1, 111, 000 10, 750,000 967, 100 880,000 360, 000 467,000 104, 500 375,000 775, 200 1, 364, 000 313,000 875,000 t 32 TECHNICAL ASSISTANCE PROGRAMS PROGRAM IN LATIN AMERICA Mr. STASSEN. I indicated on this chart the way the Latin American contribution was increasing, and here you see it in graphic form. ...THE LATIN AMERICAN REPUBLICS HAVE STEADILY INCREASED THEIR SHARE OF PROJECT COSTS AS THE PROGRAMS MATURE... 50 (Millions of Dollars) 40 30 20 10 Chart shows only those contributions in cash deposits to joint bank accounts for project operations *** Contributions to IIAA Projects Local Cash Contributions U.S. Cash Contributions O 1943 '44 '45 '46 '47 '48 '49 '50 '51 '52 '53 FISCAL YEARS '54 55 Estimated * Includes 1.9 millions for emergency food relief in Bolivia. *** ** It is estimated that local cash contributions will remain the same or increase. Estimated other contributions in direct support of the program will total for FY 1954: $16.1 million by U.S.; $12.6 million by Latin America. Total contributions: $24.3 million by U.S.; $55.2 million by Latin America. I See Presentation Book, pages 447-8 for full explanation ). TECHNICAL ASSISTANCE PROGRAMS 33 We start way back with the original technical cooperation program in Latin America, which, as you know, came up during the time of the war, and then fitted into the worldwide program. But you see the contributions to the projects of the Institute of Inter-American affairs. Here are the local governments'. Here are the United States cash contributions. Here again you see that growth of host govern- ment participation in these joint programs. We will furnish the specific country-by-country detail on it. Senator MANSFIELD. You mean to say on the basis of that last chart they are contributing on a ratio of about 5 to 1? Mr. STASSEN. Overall yes. NEW FUNDS APPROPRIATED This chart (p. 34) gives you the respective cost of this technical cooperation program, which is one of the most important aspects of everything we do around the world. It is also relatively one of the least costly in dollars. I have ex- pressed it in terms of millions of dollars. You see the technical co- operation slice up here is 4 percent of our worldwide total, or $1162 million in the current fiscal year's appropriation. That is 10 cents. per month for each adult in America to carry on the technical coopera- tion program. The development assistance program, which of course, is carried on in India, Egypt and in Guatemala, has a very close relationship to what we do technically. We don't have four-fold. That is 7 percent of the total appropriated, or $1842 million. 34 TECHNICAL ASSISTANCE PROGRAMS THE MUTUAL SECURITY PROGRAM FOR 1955 NEW FUNDS APPROPRIATED BY FUNCTION Other Programs $86.7 (3%) (Millions of Dollars) $2.781.5 BY GEOGRAPHIC AREA Latin America $44.0 (2%) Non-Regional $93.8 (3%) Tech. Coop. Develop $116.5 (4%) Assist. $184.5 (7%) Defense Support $406.1 (15%) Military Assistance $1,192.7 (43%) Near East, Africa and South Asia $469.5 (17%) S.E. Asia, W. Pacific and Direct Forces Support $795.0 (28%) Europe $696.6 (25%) Far East and Pacific $1,477,6 (53%) Mutual Defense Assistance $2,393.8 (86%) * Area distribution of military assistance, direct forces support, and technical cooperation estimated on basis of the program request presented to Congress. TECHNICAL ASSISTANCE PROGRAMS 35 DEFINITION OF DEVELOPMENT ASSISTANCE Senator HICKEN LOOPER. What is "Development assistance"? What is it composed of? Mr. STASSEN. Development assistance is composed of those dollar contributions made in either goods or capital equipment to a country in which the United States foreign policy objective directs us to assist them in their economic development, improvement of their economic status, and that country being one in which we do not have a military agreement for a force goal. In Korea it would be under defense support for what we are doing there, because we have the force goal. In India or in Egypt or in Guatemala, where we do not have a force goal, and we are helping their economy, we put it under the classification of development as- sistance. Senator HICKENLOOPER. Does development assistance include cap- ital investments? Mr. STASSEN. It does. Senator HICKENLOOPER. Furnishing of capital goods? Mr. STASSEN. It does. It includes that partially in long-term loans and partially in grants, depending upon the individual situation. Senator HICKENLOOPER. There are very few long-term loans in that program? Mr. STASSEN. In the current year the Mutual Security Act calls for not less than $200 million worth of long-term loans which we put in on a 40-year basis for development purposes, bearing interest after the third year. Senator HICKENLOOPER. Of the $184 million that comes under de- velopment assistance; how much of that would you say is on long- term loan? Mr. STASSEN. I would say about half of that. You understand we are not now talking about what is defined as technical cooperation funds. We are now talking about the development assistance funds. Senator HICKENLOOPER. I understand. I would make a rough com- parison and say you refer to technical cooperation funds as know- how money that is spent; that is, advice. Mr. STASSEN. Yes. Of course, we carry with it a certain amount of the country team, and Mr. Willson's mission administers and fits ment, but when it comes into a continuing development physical grant, then it is called development assistance. Senator HICKENLOOPER. So technical cooperation, as it is set out on this chart, does not include the furnishing of any installations; is that correct? Mr. STASSEN. That is correct. Senator HICKENLOOPER. If an installation is furnished, it would come under development assistance? Mr. STASSEN. That is correct. It is administered by the same mis- sion in the country. In India we have a mission under Mr. Willson, who, in turn, is under the leadership of the Ambassador, who is head of the country team, and Mr. Willson's mission administers and fits together the development assistance and the technical cooperation in India. 36 TECHNICAL ASSISTANCE PROGRAMS DIFFERENTIATION IN ASSISTANCE Senator HICKENLOOPER. What I am trying to do is to differentiate here or to draw as strict a line as we can eventually between that as- sistance which is composed entirely of giving advice or showing them how to do something on the one hand, and the furnishing of durable equipment or canals or anything of that kind which is of long-range, permanent value, on the other. As I understand it, the $1161½ million that comes under technical cooperation is composed of advice and transmission of know-how coupled with any necessary equipment for demonstration purposes only. If that equipment goes into the permanent structure of that country, that would be carried under development assistance. Mr. STASSEN. It is very difficult to draw a rigid line. You might actually install a laboratory that will be there from that time on and be a part of the teaching equipment of a country. You might do it in connection with a technical cooperation project without endeavoring to differentiate into a development assistance item, but anything that is substantial and of course these are all defined in our detailed presen- tation country-by-country, anything that is substantial in the way of capital goods, goes in the development assistance column rather than the technical cooperation column. I should point out this is a differentiation that the committees of Congress asked for, and that we then follow through on, that there was a time when what was called special economic assistance was really carried in with the point IV appropriations, and we have, under the wishes of the congressional committees, separated out as well as we can what should properly be classified as development assistance and what should be classified as technical cooperation from a fund- ing standpoint. The other part of this chart shows in the gross program the geo- graphic distribution, and you will notice for all purposes-military, development, and technical combined. It is the Far East and the Pacific area that has now the major emphasis and the major require- ment of the United States funds. Senator HICKENLOOPER. What is the nonregional? Mr. STASSEN. That would be such things as the U. N. Children's Fund, assistance to migrants and refugees, U. N. technical assistance, Battle Act, Department of Defense and FOA administrative costs. Senator HICKENLOOPER. That item is 93.6 million. Mr. STASSEN. It also includes the freight for the surplus agricul- tural products shipped by the voluntary organizations throughout our program. We work with 47 voluntary organizations in our program which do some very outstanding work in carrying on continuing pro- grams and supplying emergency food and sometimes in actual techni- cal cooperation-various religious organizations and voluntary foun- dations, and so forth. So it is all that type of activity. It shows up in a separate chapter in the Mutual Security Act, in which all these are classified. Senator MANSFIELD. Governor, going back to your first chart there, I think the committee ought to request you to make those charts avail- able for incorporation in the record. Mr. STASSEN. We will do that. TECHNICAL ASSISTANCE PROGRAMS 37 Senator MANSFIELD. Getting back to the charts, I note that approxi- mately $2,400 million is allocated for direct or indirect military assist- ance throughout the areas of the world; is that correct? Mr. STASSEN. Correct. Senator MANSFIELD. $184.5 million is allocated for what is known as development assistance programs. Half of that money is on a long- range, long-term, low-interest basis, the interest not to begin until the third year. Mr. STASSEN. That is right. Senator MANSFIELD. And as far as the subject matter before this committee at the present time is concerned, the amount spent in the fiscal year is $116.5 million for technical assistance. Mr. STASSEN. And that is about 4 percent of the world total of obligational authority. And I would immediately emphasize that the importance of this program is far out of proportion to its dollar cost, that is, it is one of the most significant works that this great leading country of ours is now doing in cooperation with some 57 other countries of the world. Senator HICKENLOOPER. Will you leave the charts? Mr. STASSEN. We will furnish copies of all the charts. EDUCATIONAL PROGRAM Senator HICKENLOOPER. In the figures which you have given of your own citizens going abroad on the first chart I believe the total is 1,819, which was discussed. And those coming to the United States was 1,464. Mr. STASSEN. That is right. Senator HICKENLOOPER. AS I understand it, the participants are in training in this country; that is, they are being trained or educated, so that it is an educational program, at least as far as those coming here are concerned? Mr. STASSEN. Right. Senator HICKENLOOPER. That is in addition to the Smith-Mundt programs and the Fulbright scholarship programs; is that correct? Mr. STASSEN. That is right. Senator MANSFIELD. Do you have a conflict between those programs and the educational program of the FOA? Mr. STASSEN. No. You see, those are the students within the broad objectives of those special laws, and they have very much the cul- tural aspect. These are technicians, frequently the officials of gov- ernments, or young leaders in industry or labor, or in laboratories in those countries; or in case, we will say, of the new group that will be coming over here in March on the peaceful study of atomic energy, they are postgraduate physicists. They will include some of the out- standing scientists of those countries, and they come over here to study the peaceful use of atomic energy, which you know so much about in the Atomic Energy Commission. So that these are not the same kind of people, and they are not here for the same purpose, they are here for professional and technical and specialized training in education to go back into these active fields in their countries. 38 TECHNICAL ASSISTANCE PROGRAMS TOTAL FOA PERSONNEL ABROAD Senator HICKENLOOPER. Then, Governor, I would like to ask, What is the sum total of all of our own people who are abroad at this time in this program? That is not the technicians alone, but stenographers and anybody else who does office work, or anything of that kind. What is the sum total of all of the people who are working now out- side of the United States under your program? Mr. STASSEN. You mean under the total Foreign Operations pro- gram? Senator HICKENLOOPER. Yes. Mr. STASSEN. You understand that, for instance, in India- Senator HICKENLOOPER. I think I had better differentiate between that and the military programs. Let's take these specific divisions: The technical cooperation program and the defense operations pro- gram and the developmental assistance program and the program that is listed as "Other programs," the undefined or undetailed program. Mr. STASSEN. Let me say first, you understand that we have brought these together in these countries in this Administration. For ex- ample, in Israel we have the one mission under the Ambassador, and they do the development assistance work and the accounting and the technical cooperation work; they do all types. In Pakistan they do the technical cooperation work, they do the developmental assistance work and they do defense-support work coordinating with, in that instance, a Military Assistance Advisory Group that handles the military end-item and training program. We have brought this to- gether and reduced the overhead expense in one coordinated program. Now, I cannot give you our exact total, but it will be something in the order of the total in all respects will be something in the order of 5,000 people, for all purposes. Senator HICKENLOOPER. That is for all purposes, including the mili- tary? Mr. STASSEN. That doesn't include the MAAG people, the Military Assistance Advisory Group of people. But it does include any eco- nomic work we have to do with a country. There are about 2,750 Americans included in the total of 5,000. Senator HICKENLOOPER. You say the MAAG people. You mean the MAAG people all over the world; is that it? Mr. STASSEN. That is right, Military Assistance Advisory Groups handle the end-item aid, the MDAP, so-called military hardware and training, and they are a distinct group under a military officer, a gen- eral or a colonel or an admiral or a captain, and they form the other part of the United States country team if we have a mutual defense agreement with the country in the military program. But taking Pakistan, or taking Turkey, there is a certain amount of economic work and fitting together in a total situation that occurs. And our clerks, our accountants, and our economists will work on one part of the problem one day and another part the next day; they do a total job in relationship to the country. JUSTIFICATION IN RELATION TO ECONOMIC POTENTIAL Senator HICKENLOOPER. Do you feel that the programs and the projects which we are engaged in-leaving out direct military assist- ance programs which are strictly military for defense purposes-do 1 TECHNICAL ASSISTANCE PROGRAMS 39 > * you feel that the programs in the various countries are identified in each instance with the economic potential of that country? Does the economic potential of the country justify the time and effort that is put in this technical assistance, and so on, in that country? Mr. STASSEN. We believe that it is. And we are constantly evaluat- ing it. I have installed a method by which we take some leading individual with a great deal of experience from outside the Govern- ment, we put him in as chairman of an evaluation team, and go into a country and review it; review it quite thoroughly. And that is a continuing process. When you are dealing with something so vast, when you are talking about the economic progress and development of half the area of the world and of a billion people, then I would be very hesitant to claim that we know all the answers. By that I mean that it is a very continuing, searching study that must go on. Senator HICKENLOOPER. My own feeling about the matter is that first we should be quite reasonably certain that the potential economy of that country, that is, the economy that can be potentially developed by new methods, and so on, is sufficient enough to be a good prospect for success and advancement there, and if it is, then I have never been able to see why that economy should not eventually pay, not only for the technical assistance, but for anything which we put in there to benefit that economy. Now, I am differentiating sharply between purely humanitarian activities, such as contributions to public-health knowledge epidem- ics, suffering, and things of that kind, that is a different category- and economic development. If the country's potential merits these activities-and that is a matter of judgment, of course then I see no reason why the economy of that country in the future, after it has developed and increased, should not bear the cost of the technical advice which they have received, as well as the capital investments which may have been made. I have had that feeling for a long time. Mr. STASSEN. Senator, I feel that in these countries it is somewhat like it is with individual human beings, that as you take an individ- ual-if he has been ill for some period of time, or injured, if he is com- pletely without resources, he can be in a situation where he needs as- sistance in regaining his health, or he might need assistance, under certain circumstances, in completing his education or his training, he might need clothing, or he might need shelter. But if he has got a good mind and has a real spark of human development, if he is assisted to a certain point, he then begins to work and produce, and he is a good subject for a loan, and then he can go on from there, and he might repay the loan, and he might actually become a man of resources himself. But if at the stage when he is very low in his own condition and his own resources, if you then make to him loans for, we will say, his hospital care and his very first suit of clothes, then even though Senator HICKENLOOPER. That has been my feeling on this thing. I said, I wanted to set aside the humanitarian things of disaster and sickness and public health and all things like that which come, in my view, under a different category. GRANTS TRANSFERRED TO LOANS Mr. STASSEN. That is where the judgment comes in, you have to carry them forward on a grant basis before you start transferring over 40 TECHNICAL ASSISTANCE PROGRAMS . to a loan basis, because if you make too many loans at a time when they are not really able to carry a loan, then as they begin to get on their feet they have used up their credit rating, and they are not eligi- ble for World Bank loans and things of that kind, because of the over- hanging of those loans that were made at a time when they needed grants. So it is a matter of judgment as to when a country gets into a situation where they should be put more on loans rather than grants. We will put it this way. Take the great recovery of Western Europe under the Marshall plan-and I think everybody now agrees it has been a greater recovery than could have been hoped for a few years back-in other words, it has gone beyond what even its advocates urged, and it has confounded its critics in the rebuilding of Europe. Now, if that was all attempted on a loan basis it never could have been done. It had to be partly grants, rebuilding for more. Now, in these underdeveloped countries, many of them are just new sovereignties emerging from colonialism, with a very low stand- ard of living, undeveloped countries, but with people in most instances who want to work, who want to improve the products of their soil, who want to open up their minerals. And it is a complex matter of judgment as to how far you can carry them on a loan basis and how much you must carry them on a grant basis. And that is the judg- ment factor that we have to exercise. Senator HICKENLOOPER. I think we have had literally millions of instances in this country, getting down to the man that is hungry and on his uppers, and so on, and somebody who wants to go to college, we have had millions of instances of those. People or organizations who have humanitarian instincts probably try to help him get well physically, but they don't go out and buy him a filling station and set him up in business unless he signs a note that out of the profits of that filling station he will eventually pay. Per- haps his benefactor will say, "You don't have to pay a nickel on this for 5 years." But I think under a self-help theory and an idea of the dignity of the individual and his own responsibility that it often does more harm than good to our own relations and to the individuals in the countries that are the recipients of the bounty to keep giving them things and say, "Uncle Sam will come along and put in a generator for you here," or "We will dig this ditch for you," or something, and "Give it to you free." I know it is a difficult thing. I think the pro- gram has accomplished a great deal of good. I am not saying that it hasn't. But in my own mind I have drawn a distinction between the things that help human beings get over a small difficulty or set them on the right road somewhere on the one hand—and you might say those are humanitarian things-and the donation of capital equip- ment, goods, and all that sort of thing to an economy which ought to be potentially able to pay if it is worth the original investment. And that is where I have disagreed with the activities-not so much the last year and a half or so-but activities in the past that I have seen where I felt that we have run around with a checkbook too often, telling those countries, "Don't dig in on a self-help basis, we will write you a check on Uncle Sam." Again I say, it is a difficult thing, I understand that. TECHNICAL ASSISTANCE PROGRAMS 41 EARLY MOVE TOWARD LONG-TERM LOANS Mr. STASSEN. I would go a step further, Senator. I think that not only should we move toward the long-term loans at the earliest date in any individual country situation, that it is sound to do so, but that we should also move at the subsequent earlier date into what might be called the normal bankable loans, the Export-Import and the IBRD type of loans, and the private investments. It is our observation that $1 of private investment will accomplish as much in the development of a country at least as $3 of Government money, because the private investment carries with it a know-how and a technical administration and an interest, so that we throughout the program encourage private investment. But there again you must bring the country up to a cer- tain prospect of success before you can expect private investment to risk its money. If it is in too difficult a shape, if there is too much instability, or too low a standard of living, then the flow of private investments never answers the situation. But as you bring them up to a certain point of a helpful outlook for further progress, then you see the growing private investment and the real acceleration of devel- opment of a country. Senator HICKENLOOPER. I can understand the value of educational advice, of financial advice, how to run their fiscal affairs, and admin- istrative advice, because those things may in the long run contribute to a climate in which it is secure, or reasonably secure, for private investment. SOFT LOANS And as far as the rules are concerned, I have advocated for a long time that in many of these places we couldn't expect what we call a hard loan to be consummated, a loan which has a due date immediately and interest regularly payable, but rather a loan which has perhaps a long term to run with agreements and conditions that that loan would be subordinated to any hard loans which that country might have to have in the future, so that these so-called soft loans of long duration would not necessarily injure the credit structure of that country if they needed it. It would seem to me that a device of that kind could be worked out, but leaving the people on their own feet so they would know eventually they were going to pay for development activities and increase their economy and their standard of living, and things of that kind. Mr. STASSEN. In our regular circular Airgram, circular A 102, para- graph 3, there is this statement: The decision to contribute must be made on the basis that an economic-develop- ment program or project which is clearly desirable in terms of United States and cooperating country mutual objectives could not or would not go forward without a United States contribution to its cost of the size proposed. In other words, we put them through a criteria in the process of approving the project. Senator HICKENLOOPER. Thank you. 42 TECHNICAL ASSISTANCE PROGRAMS 5 EMPLOYMENT POLICY Senator MANSFIELD. Governor, is the idea behind the technical assistance program to establish projects on a cooperative basis? Mr. STASSEN. Yes. Senator MANSFIELD. Is the idea also to help the people to help themselves? Mr. STASSEN. Right. Senator MANSFIELD. Is the idea to work as much as possible on a person-to-person basis? Mr. STASSEN. Right. Senator MANSFIELD. How did you hire these people who work in the field of technical cooperation? Mr. STASSEN. We have a personnel section here. And we enlist nominations for these positions by personal application, by suggestion of anyone who can advance a suggestion, frequently within the pro- fessional groups that are involved, or from universities or colleges, and then we interview them and review their qualifications. If they look favorable we have the usual security checks made to see that they are clear from a security standpoint, and then fit them to a request from a country for a particular talent. Senator MANSFIELD. And if you find their background favorable, and if you decide to hire them, for how long a period do you sign a contract? Mr. STASSEN. Two years as a general rule. Senator MANSFIELD. How much time is spent in training these tech- nicians before they are sent to their posts? Mr. STASSEN. That varies in varying circumstances, depending on how much training they have already had overseas, or experience over- seas. I would say on the average it would be 90 days. Senator MANSFIELD. Do you send the families overseas with the people you hire? Mr. ŠTASSEN. Yes, we do, if they wish. Senator MANSFIELD. Do you send them overseas at Government expense? Mr. STASSEN. Yes, we do. As a matter of fact, we frequently find that the wife is fully one-half of the total team, and sometimes accom- plishes as much or more than the technician himself. Senator MANSFIELD. That is understandable. PERSONNEL TURNOVER What is the turnover in your personnel on the basis of 2-year contracts? Mr. STASSEN. I do not have presently before me the exact figures. I know there is quite a substantial renewal after a bit of home leave, and we are endeavoring to expand the renewals, because when you have invested in an individual and he is serving well, he is the best source of future service. Senator MANSFIELD. Have you given thought to the idea of a 4- to 5-year contract instead of a 2-year contract, based on the investment, the amount of time spent in training, and so forth? Mr. STASSEN. Yes. There are some advantages to it, and there are some disadvantages, in that sometimes individuals who are profes- sionally qualified and on whom any review would indicate to be excel- TECHNICAL ASSISTANCE PROGRAMS 43 lent, do turn out to be failures in working overseas, because they are either emotionally not well-adjusted, not people who can fit into a foreign environment, or deteriorate when they get overseas. Some individuals go downhill overseas. Furthermore, there has to be a limit, we felt, on how much of a future commitment we could make at any one time under our program. Senator MANSFIELD. Of course, as you know, there has been no termination date on the technical assistance program as such. Mr. STASSEN. That is right. ECONOMIC AID FOR ASIA Senator MANSFIELD. I note from the press yesterday that it is re- ported that a billion dollars will be asked for economic aid for Asia next year, for aid extending from Pakistan on the west to Japan and Korea on the east. Is there anything to that story? Mr. STASSEN. I did not see the story, so I do not know which one you are referring to. But we do have in the final stages of consider- ation in the administration an Asian program of some significance. And I think the whole matter will be coming up to Congress perhaps the middle of April along with the total worldwide program. Senator MANSFIELD. What I was referring to, Governor, is a story in Wednesday's New York Times by Mr. Dana Adams Schmidt, in which he states: The total program for all nonmilitary, economic expenditures in the area from Afghanistan and Pakistan to Korea and Japan will probably reach $1 billion, according to authoritative estimates tonight. And then he says further: The increase in 1955-56 will be concentrated on basic economic development projects-powerplants, irrigation, transportation, communication, and the like. Further on he states: The main lines of the compromise were worked out by a subcommittee of the National Security Council, headed by Herbert Hoover, Jr., Under Secretary of State. And further on he states: The increase contemplated in the fiscal year 1955-56 that begins July 1 is modest. This, it is thought, should be a period of planning and engineering studies. Larger programs might be called for in years to come. Now, if there is any authenticity in this story, it would mean in- stead of several hundred million dollars being applied in this area, this fiscal year it is contemplated that roughly $1 billion will be asked for in the coming fiscal year. Do you have any comment to make on that? Mr. STASSEN. Well, only the comment that this program is going through the complete review of the Foreign Economic Council, under the chairmanship of Mr. Dodge, and the National Security Council, and the approval of the President, before it reaches the Congress, all indicate that it is in an advanced state of agreement, that the area that is involved, apparently, in that story-and in fact the area that we study includes more than southeast Asia, it goes all the way up to Korea and Japan, and all the way around the other way to Afghanis- tan and Pakistan and India. It is a very vast area and it is an area in which a significant further initiative should be taken by the United States in the future years. r 44 TECHNICAL ASSISTANCE PROGRAMS Senator MANSFIELD. Well, we will look forward to the President's request with some anticipation and see if the story carried in the press is authentic or not. INFORMATION PUBLISHED IN PRESS Mr. STASSEN. You realize, of course, Senator, that I cannot prop- erly report to you in public hearing matters that are not yet realized by the Security Council. Senator MANSFIELD. I understand that, Governor. You understand, of course, that what I am asking has already appeared in the public. press. So it doesn't appear to be secret as of now, because somebody has gotten the information somewhere and has published it. Senator Hickenlooper? Senator HICKENLOOPER. I was just going to remark that it is noth- ing unusual for us to get things last over here on the Hill. And I can understand the Governor's very justifiable feeling of prohibition against giving any accurate figures. He is here authoritatively. And so I wouldn't want him to give any figures which are still tentative or which have still not been completely resolved, until they are sent up here. But it is always interesting to compare the stories which come out of "authoritative sources" with the facts when they are officially sent up on the Hill. And I sometimes envy these newspapermen who have access on occasions to information long before the representatives of the people over here on the Hill are told about it. Mr. STASSEN. I think it is our endeavor always to have you be the first ones to know about it. But sometimes we are not successful. And perhaps I should say in this specific instance that I am not the "authoritative source" of Mr. Schmidt, because I haven't talked to him for a long time, even though I know him for a very enterprising and usually accurate reporter. Senator HICKENLOOPER. Let me hasten to say, there wasn't anything personal in the remark. I wasn't even remotely suggesting that you were the source of this. Mr. STASSEN. I thought under the circumstances I had better clarify it. Senator MANSFIELD. I might say, Senator, that the Governor's name wasn't even mentioned in the article. Mr. STASSEN. I like to get a lot of work done without getting my name mentioned. But I think I should say further that I do believe that after the careful review that has gone on in the administration, and the study that we are making of this entire Asian matter, I believe that the Congress will find the recommendations that the President sends up will, after Congress' own very thorough review, merit the support of both political parties in Congress. REORGANIZATION OF FOREIGN ACTIVITIES Senator HICKENLOOPER. There is one thing I would like to ask you. You may or may not care to comment on it. I shan't insist-I will abide by your wishes on that matter, at the moment anyway. With the contemplated reorganization of these foreign activities— do you have any comment, any suggestions, any objections, or ap- proval, or anything of the kind that you would like to express here FOREIGN OPERATIONS ADMINISTRATION* Policy Guidance THE PRESIDENT Advice and Assistance THE SECRETARY THE SECRETARY OF STATE OF TREASURY THE SECRETARY OF DEFENSE DIRECTOR BUREAU OF THE BUDGET DIRECTOR FOREIGN OPERATIONS THE SECRETARY THE SECRETARY OF FOREIGN POLICY MONETARY AND FINANCIAL POLICY JOINT CHIEFS OF STAFF BUDGET POLICY DEFENSE POLICY EXECUTIVE SECRETARY INTERIOR OF AGRICULTURE THE SECRETARY OF COMMERCE THE SECRETARY OF LABOR THE SECRETARY OF HEALTH, EDUCATION AND WELFARE LABOR COMMITTEE HEALTH COMMITTEE DEPUTY DIRECTOR FOREIGN OPERATION S DEPUTY DIRECTOR DEPUTY DIRECTOR FOR TECHNICAL SERVICES Office of Industrial Resources Office of Food and Agriculture Office of Small Business Office of Public Services Office of Trade, Investment and Monetary Affairs Office of Labor Affairs Office of Transportation MILITARY ADVISOR Member of the Planning Board of the National Security Council and of the Board Assistants of the Operations Coordinating Board DEPUTY DIRECTOR FOR PROGRAM AND PLANNING Liaison for Program and planning with Departments of State and Defense ASSISTANT DIRECTOR FOR REFUGEES MIGRATION AND VOLUNTARY ASSISTANCE Liaison with Departments of State and Defense; Voluntary Agencies; Intergovernmental and Multilateral programs. FOR OPERATIONS EDUCATION COMMITTEE INTERNATIONAL DEVELOPMENT ADVISORY BOARD ADVISORY COMMITTEE ON VOLUNTARY FOREIGN AID GENERAL COUNSEL Renders legal advice and assistance to Director and other agency officials. DEPUTY TO THE DIRECTOR Assists the Director in formulation of Policy matters. Supervises Congressional matters. DEPUTY DIRECTOR FOR MDAC ist Alternate Chairman of Economic Defense Advisory Committee. Ist Alternate Member of Advisory Committee on Export Policy Liaison with Departments of State, Commerce, Treasury, Defense, CIA OFFICE OF ECONOMIC AFFAIRS of the US MISSION TO NATO & EUROPEAN REGIONAL ORGANIZATIONS (USRO) PARIS, FRANCE DEPUTY DIRECTOR FOR MANAGEMENT Office of Personnel Office of Organization and Methods Administrative Services Office of Personnel Security & Integrity Office of Controller Office of Public Reports Office of Research, Statistics, & Reports REGIONAL DIRECTOR FOR FAR EAST Liaison with Assistant Secretary of State for Far Eastern Affairs REGIONAL DIRECTOR FOR NEAR EAST, SOUTH ASIA & AFRICA Liaison with Assistant Secretary of State for Near Eastern, South Asian, & African Affairs. REGIONAL DIRECTOR FOR EUROPE Liaison with Assistant Secretary of State for European Affairs and Director for German Affairs REGIONAL DIRECTOR FOR LATIN AMERICA (INSTITUTE OF INTER-AMERICAN AFFAIRS) Liaison with Assistant Secretary of State for Inter-American Affairs COUNTRY MISSIONS COUNTRY MISSIONS COUNTRY MISSIONS COUNTRY MISSIONS ★ESTABLISHED BY THE PRESIDENT'S REORGANIZATION PLAN NO. 7, EFFECTIVE AUG. 1, 1953 OCTOBER 19, 1954 59637 O - 55( Face p. 44) TECHNICAL ASSISTANCE PROGRAMS 45 for the benefit of this committee? We are attempting to look into the matter, and as I say, it may be a matter that you would not care to comment on at the moment, and if so, I would not insist. But if there are comments with respect to this proposed action of June 30, I think it would be helpful if we could have the benefit of it. Mr. STASSEN. I think I would simply say this: that I anticipate sup- porting before the committees the conclusions that the President reaches in this matter of administrative reorganization to conduct these programs. It has been my view, even before I was in Govern- ment, that the conduct of programs of this nature is an indispensable part of the position of the United States in the world, that the method of conduct is the subject, and has been, of sincere differences of view among individuals, and I have declined from the very beginning to give a personal view, and have strictly limited myself to the support of the President's conclusions. I do have a chart here that might show you how we have done it so far. It will just give you that background. In other words, speci- fically I would like to emphasize that FOA did not create FOA-in other words, FOA was the result of the Government reorganization study group, and then we began to exercise that responsibility under the President's appointment. And that is the way in which I have endeavored to carry out the President's reorganization plan, and carry through under the policies of Congress and the objectives of the program. So that I anticipate, Senator, that in accordance with the President's budget message, sometime-perhaps it would be at the same time the substance of the program was set up-there would be a Presidential recommendation as to the manner in which the program should be organized. And I would anticipate that I would personally support the President's conclusions at that time. Senator HICKENLOOPER. May I say without expressing an opinion one way or the other on how these things should go, I recognize some very valid arguments for placing the military operations in the De- partment of Defense. There may be-and probably are-a lot of arguments against that. I can also recognize valid arguments that say that the State Depart- ment is not an operating agency and should be relieved of operating activities as much as possible. And there are arguments that some of these activities should go back to the State Department. Still I have not fully made up my mind as to what, if any, division of activities should take place. I thought if you cared to express yourself, I would just give you the opportunity, but not insist on it. PRESENT ORGANIZATION Mr. STASSEN. No. You see, what we have done is to bring together in a position under the command of the President, but junior to all the members of the Cabinet, this particular foreign operations activ- ity. And we take policy and guidance in foreign policy from the Secretary of State, and defense policy from the Secretary of Defense, monetary policy from the Secretary of the Treasury, and budget mat- ters from the Director of the Bureau of the Budget. And then we draw on all these other departments of the Government for advice and assistance-Interior; Agriculture; Commerce, Labor; Health, 59637-55——4 46 TECHNICAL ASSISTANCE PROGRAMS Education and Welfare. And then we have organized, as I indicated, under the four regions that are the same as the regions of State. And we have, of course, the East-West Trade Control, we have the Euro- pean Office of Economic Affairs, you have your management activities, we have the Advisory Committee on Voluntary Foreign Aid, the Inter- national Development Advisory Board. And we have brought in a very outstanding Health Advisory Committee, and Labor Advisory Committee. And I indicated that we are moving stronger on the labor participation as we went beyond the agricultural economies into development of beginning industrial economies. We have the leaders of labor on that advisory committee, both the A. F. of L. and the CIO, and the railroad brotherhoods. And for the technical services side, we have brought in Dr. William Russell, who was the president of Columbia's Teachers College, because we are emphasizing, of course, the approach that if we can teach the teachers who will teach the teachers in these countries, then we get the real advance on the long-term basis from our effort. And then we have in a particular country the whole complex of problems which bring together the various facets of United States activities. Take, for example, in Pakistan. When there is a flood our people call on the Surgeon General's office for top advice on the epidemic diseases that occur there. We call on the Air Force to fly people in from Korea and from Turkey, and from other places. We call on Agriculture to ship in food supplies. And we do the operating job in the center of the Government to bring the United States to focus in an operational way anywhere in the world, and at the same time we give consideration to the implications. When the refugee movement came in Vietnam we called on our refugee experts out of Frankfort, Germany, and out of Hong Kong; we called on the Department of Health, Education, and Welfare for people that had experience in those matters. We called on the United States Navy to help lift the people and carry them down to the south. And with the financial impact and coming away from the French Government and setting up their own independent banking system, we got an expert from the Federal Reserve Bank of New York. We mobilize these people and bring them together to do a job under the Ambassador. And then the way we keep this organization functioning together is by these techniques. We have a daily log. And all these top executives you see here every day get a digest of the operational information, the cables outgoing and incoming all over the world. And they get a digest of other significant daily information. So the people in different parts of the total program are aware of the implications of the other parts of the program. Then we have two weekly staff meetings, one of the executive staff, on Monday mornings, and the general staff, which takes in a larger group of people down to these subheads, every Wednesday morning. And then we have a regular-what we call the "wash" list, which are the things that are pending which must be taken care of. And that "wash" list is then reviewed, and as the items are handled, they come off. TECHNICAL ASSISTANCE PROGRAMS 47 But that is the way we have tried to fit together what is our un- derstanding of what the President's reorganization plan meant when we took over the responsibility. Senator MANSFIELD. Thank you, Governor. Before we adjourn, I would like to request on behalf of the committee that Mr. Frederick Nolting and Dr. D. A. Fitzgerald be here tomorrow to answer ques- tions, because I understand that Secretary Hoover and Governor Stassen have other appointments. We will meet together at 10 o'clock. And the witnesses will be Dr. Butz, Assistant Secretary for Marketing and Foreign Agricul- ture, Department of Agriculture; Gen. Glen E. Edgerton, Managing Director and President, Export-Import Bank; Bradshaw Mintener, Assistant Secretary, Department of Health, Education, and Welfare; Felix E. Wormser, Assistant Secretary for Mineral Resources, De- partment of Interior; and Marshall Smith, Acting Assistant Secre- tary for International Affairs, Department of Commerce. The meeting is adjourned. (Whereupon, at 4:35 p. m., the subcommittee adjourned, to recon- vene at 10 a. m. Friday, February 18, 1955.) (The information requested on p. 15 is as follows:) ILLUSTRATIVE CONTRACT BETWEEN A UNITED STATES COLLEGE AND A FOREIGN COLLEGE [NOTE. The illustration which follows is in terms of a contract between two colleges, to be financed partly by FOA and partly by the foreign government and/or foreign college. With minor adjustments in terms and supporting docu- ments, this draft could also be utilized to cover several alternative arrangements. Thus the contract could be between the United States College and FOA itself, or with a joint fund or Servicio or with a foreign government or agency instead of with the foreign college. Similarly, the financing could be through any com- bination of FOA, Joint Fund, the foreign government, or the foreign college.] CONTRACT between and Contract made this day of 195---, between (host country) having its principal office at "College") and chartered by the State of College, organized and existing under the laws of (hereinafter referred to as the "Host Country"), (referred to below as the University, an educational institution with its principal office in the U. S. A. City of State of... (referred to below as the "Contractor"). The College and the Contractor mutually agree as follows: ARTICLE I. SCOPE OF SERVICES TO BE PERFORMED BY CONTRACTOR A. The College employs Contractor, and the Contractor accepts such employ- ment, to carry out during the term of the contract projects and activities in the fields of public health, education, agriculture, veterinary medicine, engineering, public administration, labor relations, home economics, business administration, and for the purpose of strengthening the educa- (other fields) tional, research, and extension programs of the College, as Provided in Exhibit I, attached hereto and hereby made a part of this contract. It is understood that Exhibit I may be modified or supplemented from time to time by agreement of the Contractor and the College. 48 TECHNICAL ASSISTANCE PROGRAMS B. In carrying out such projects and activities, the Contractor shall: 1. Maintain in residence in the Host Country a staff composed of a Chief Advisor who shall be the representative of the Contractor in the Host Country and who shall be responsible for the supervision of the performance of all duties undertaken by the Contractor and other staff members and short- term consultants as specified in Exhibit I. 2. Provide such personnel in the United States as may be necessary to carry on operations in the United States as specified in Exhibit I. 3. Furnish supervision and direction of its personnel and activities under the contract and supply additional services and materials to support opera- tions hereunder as specified in Exhibit I. ARTICLE II. CONDITIONS GOVERNING OPERATIONS BY CONTRACTOR A. It is understood that the above services will be performed under the general direction of the College, pursuant to the work plans agreed to by the College and the Contractor. B. Before commencing any project provided for under the contract or any supplement or amendment thereto, the Contractor and the College shall agree upon a general work plan, budget, and table of organization, indicating the basis upon which the Contractor proposes to carry out such project. Projects shall be carried out in accordance with such agreed work plans, budgets, and tables of organization, provided, that it is understood that appropriate modifications of such budget estimates may be made by the Contractor in carryig out such work within the total amount specified in such budget. These documents shall be supplemented and revised as necessary whenever the College provides addi- tional funds to the Contractor; and they may be supplemented and revised by mutual agreement at any other time. C. Contractor agrees, if requested by the College, to submit biographical infor- mation on any of the individuals now or hereafter employed directly on the performance of the contract; provided, that in respect of personnel to be sent overseas for work on the contract, Contractor shall obtain prior approval from the College. On the written request of the Government of the Host Country (including written requests of the College made through the Government of the Host Country) transmitted to the Contractor through diplomatic channels or through the Director of USOM, the Contractor will terminate the employment on the contract of any individual or individuals serving under the contract in the Host Country. D. Each staff member sent to the Host Country by the Contractor will serve under the contract for a period of not less than two years, including orientation time in Washington, D. C., travel to and from the Host Country, and leave taken during this period, unless otherwise stipulated in writing by the parties hereto. This provision shall not apply to consultants specifically employed for shorter terms. It is understood that Contractor will enter into written employment contracts with such staff members on terms not inconsistent with the provisions of this contract. [Final sentence may be inserted at option of U. S. university.] E. The Contractor shall prepare and submit to the College semiannual progress reports, the first to be submitted within six months of the arrival of the first member of the staff referred to in Section B-1 of Article I. These reports shall cover progress made, plans for the following period, and recommendations con- cerning current needs of the College. The Contractor shall submit a final report upon completion of activities under the contract. ARTICLE III. FACILITIES AND SERVICES TO BE PROVIDED BY THE COLLEGE The College, in order to assure full local benefits from the work as well as its expeditious conduct, agrees to— A. Make a clear assignment of responsibility to the appropriate officials of the College for the development of this undertaking. B. Provide, without charge to the Contractor, such facilities, services, and assistance in carrying out its work in the Host Country as are set forth in Exhibit II attached hereto and made a part of the contract. C. Develop, to the extent permitted by its available resources, its own personnel, facilities, programs, and activities to permit the early and effective accomplishment of the objectives of the contract. These shall include, but not be limited to, the specific matters described in Exhibit II. TECHNICAL ASSISTANCE PROGRAMS 49 ARTICLE IV. FINANCIAL PROVISIONS A. In consideration of the services to be performed by the Contractor, the College will pay the Contractor for the costs of services to be performed hereunder; provided, that in no event, without the prior written approval of the College, will such payments exceed the equivalent of $------ in all cur- rencies (of which not more than $------ shall be U. S. dollars). For pur- poses of this contract the equivalent of currencies to U. S. dollars shall be determined by applying the official commercial rate of exchange of conver- sion factor applicable in connection with the conversion of dollars into such other currencies for the purpose of export transactions from such country prevailing on the date of this contract; provided, that in the event of any substantial change of such rates a new rate shall be agreed upon by the College and the Contractor on the basis of the foregoing formula. [NOTE.— This formula may require modification for particular countries.] Such pay- ments shall be made at such times and in such manner as set forth in Exhibit III attached and hereby made a part of this agreement. B. It is understood by parties hereto that the funds to be paid to the Con- tractor by the College are to be derived in general from the following sources in the estimated ratios and amounts indicated: 1. Upon request of the Government of the Host Country, % up to a maximum of $------, or its equivalent in other currencies, are expected to be provided through the Foreign Operations Administration, an agency of the Government of the United States of America (referred to below as FOA) in accordance with relevant agreements between the Government of the United States and the Government of the Host Country. 2. %, up to a maximum of $--- local currency are expected to be provided by the Government of the Host Country. 3. %, up to a maximum of $----. local currency will be provided by the College from its own funds, in addition to the services and facilities pro- vided without charge by the College as specified in Exhibit II. ARTICLE V. RIGHTS AND OBLIGATIONS OF THE FOREIGN OPERATIONS ADMINISTRATION In consideration of the financial participation of FOA anticipated by the parties hereto, the College and the Contractor agree that FOA shall have such rights in connection with the contract as shall be set forth in the Letter of Commitment/Guaranty referred to in Exhibit III. ARTICLE VI. GENERAL PROVISIONS A. Responsibility of the Contractor.-The Contractor assumes full responsi- bility for the efficient and diligent performance of all services to be rendered by it under the contract. B. Use of Records. The recommendations furnished pursuant to Article I hereof, and all notes, memoranda, and other technical data, etc., furnished by the Contractor pursuant to or developed in connection with the provisions of the contract, shall become and remain the property of the College, and the College shall have the right to use them for any beneficial purpose without any additional compensation to the Contractor. Any such data, etc., in the possession of the Contractor shall be delivered to the College whenever so requested. C. Taxes and Customs Duties.-It is understood that all payments made to the Contractor by the College or by the Contractor to its employees under the contract shall be exempted to the extent permitted by the law of Host Country from any taxation which may now or hereinafter be imposed thereon by the law of the Host Country. Personnel of the Contractor shall also be exempt from all other local levies, including custom levies applying to any items imported by the Contractor personnel and their dependents for their use or consumption, to the same extent as FOA personnel of equivalent rank, or shall be reimbursed by the College for such levies. [NOTE. To the extent the tax exemptions noted above are covered by agreements with the Host Country, reference may be made to such agreements in this section.] D. Title. Title to all equipment, materials, and supplies, the cost of which is reimbursable to the Contractor by the College, shall be in the name of the College and all such equipment, materials, and supplies shall be turned over to the College upon completion or termination of the contract. E. Conformity to Host Country's Regulations.-Contractor agrees that it and its personnel, while in the Host Country, will abide by all applicable laws and 50 TECHNICAL ASSISTANCE PROGRAMS regulations of the Host Country and political subdivisions, states, and municipali- ties thereof. F. Assignment.—The Contractor shall not assign, transfer, pledge, or make other disposition of the contract without first obtaining the written consent of the College. G. Inspection.-In order to assure continuous and cooperative planning and operations hereunder, the Contractor shall encourage and permit the College or its authorized representatives, at all reasonable times to visit the Contractor's facilities and to inspect the facilities, activities, and work pertinent to the con- tract, either in the United States or abroad, and to interview personnel engaged in the performance of the contract to the extent deemed necessary by the College. H. Subcontracts. To the extent work hereunder is subcontracted or specified in Exhibit I, Contractor shall require each subcontractor to agree to the relevant provisions of the contract as fully as if such subcontractor were a party hereto. ARTICLE VII. DURATION AND TERMINATION A. Period of Contract.- 1. Effective date: The contract shall be effective as of 19__, upon execution by the parties hereto and upon establishment of the FOA Letter of Commitment/Guaranty referred to in Article V and Exhibit III. 2. Term and Termination: The contract shall remain in force for a period of 3 years from the effective date hereof unless previously terminated in accordance with the provisions set forth below. (1) In the event that FOA financing under said Letter of Commitment/ Guaranty shall be terminated and the College does not otherwise make available sufficient financing under the contract in a form acceptable to the Contractor the obligations of both parties hereunder shall terminate on the date of termination of FOA financing. (2) The College may terminate the contract on 90 days' written notice to the Contractor. (3) The Contractor shall not be liable for any delay in performing its obliga- tions hereunder if any such delay arises from causes beyond the control and without the fault or negligence of the Contractor, provided that the Contractor gives prompt notice thereof to the College. If such cause shall prevent perform- ance hereunder for a continuous 3-month period after such notice, Contractor may terminate this contract on 90 days' notice to the College. Such causes include, but are not limited to, acts of God or of the public enemy, fires, floods, epidemics, strikes, quarantine restrictions, acts of Government, and unusually severe weather. (4) If the College through the Government of the Host Country does not furnish the Contractor with either a Certificate of Performance as specified in the letter of commitment referred to in Exhibit III to this contract or a statement of the reasons for failure to consider satisfactory the Contractor's performance hereunder, within sixty days after receipt of the Contractor's request for such certificates, the Contractor shall have the right to terminate this contract on thirty days' notice to the College. (5) If the College is unable or otherwise fails to fulfill its obligation as set forth in Articles III and IV above, the Contractor may terminate the contract upon sixty days' written notice to the College. B. Obligations upon Termination.-In the event of any such termination, the Contractor shall make every effort to maximize the usefulness to the College of that portion of the work which has been accomplished and to minimize the College's obligations hereunder and the College- 1. Shall furnish for the Contractor's personnel and their dependents' return transportation and travel allowances for their return to their homes in the U. S. and living quarters and cost-of-living allowances due them up to date of their departure; 2. Shall reimburse the Contractor for salaries paid to staff members per- forming work under the contract for the remainder of the period of their agreed period of service with Contractor to the extent Contractor is liable to make such payments under its arrangements with such employees; pro- vided that such payment shall not extend beyond one year from the effective date of termination or beyond the original expiration date of the contract as specified in Article VII-A, whichever is earlier; and TECHNICAL ASSISTANCE PROGRAMS 51 3. Shall reimburse the Contractor for all other expenditures and obliga- tions properly incurred by Contractor hereunder and unpaid at the effective date of such termination. In witness whereof, the parties hereto have executed this contract on the day and year first above written. College U. S. University [Draft] EXHIBIT I ACTIVITIES TO BE CARRIED OUT BY THE CONTRACTOR In accordance with the provisions of Article I of the contract, the Con- tractor will carry out activities in the fields of public health, education, agri- culture, veterinary medicine, engineering, public administration, labor rela- tions, home economics, business administration, and as follows: (NOTE.-The following activities are illustrative of those that an Ameri- can university (Contractor) might be expected to carry out. Not all of them will necessarily be a part of the program in any one country and certainly the emphisis given each will vary depending upon the needs of the particular country, the field of activity, conditions in each country and the existence of a suitable local university. A general statement will be prepared for the specific activities to be carried out in each field covered by the con- tract, but the details will, to permit flexibility, be left to the work plan referred to in Article II-B of the contract.) GENERAL PLAN Beginning as soon as practicable after execution of the contract, the Con- tractor will send a staff of professional and technical personnel to assist the College in improving teaching methods and curricula, research projects and programs, and, where applicable, extension and demonstration programs in the fields covered by the contract. In addition to the staff members provided for 2 years, short time consultants may be sent during each school year in categories to be mutually agreed upon by the Contractor and the College. The Contractor's staff on behalf of the Contractor will assist the College in the development of trainee projects, including programing and arrange- ments, in the field of · TEACHING AND RESEARCH The Contractor will advise and aid in training the staff of the College in organization, administration and methods in the field of This will include (a) Teaching: Aid in development of (1) surveys of educational needs in the field of (2) curricula and courses in teaching meth- ods for undergraduate, graduate, and (where applicable) vocational school students in the field of (b) Research: Aid in (1) surveys of research needs, (2) improvement of research organization and administration, (3) development of research projects in major fields, (4) training of research workers, and (5) prepa- ration and dissemination of research results. EXTENSION PROGRAMS AND DEMONSTRATION PROJECTS Extension Programs: The Contractor will aid in the development of (1) studies of extension needs and effective extension methods, (2) effective plans for organization and administration of extension programs, (3) undergraduate and graduate training of extension workers, (4) in-service training for exten- sion workers and special short courses, utilizing special demonstration projects to show effective practices and to test effective extension techniques, and (5) 52 TECHNICAL ASSISTANCE PROGRAMS plans and programs for dissemination of results of research of improved practices. Demonstration Projects: The Contractor will provide specialists to aid the College in development of plans and programs for demonstration projects as an essential technique in carrying out major programs. Such plans will include aid in (a) planning and conduct of economic and technical studies to determine feasibility of such projects, (b) counsel on effective, practical plans, and (c) aid in development of research for such projects, and (d) operation of such projects. CONSULTATIVE SERVICES The Contractor will aid in the development of technical consultative services which the College may provide to governmental authorities and to non-govern- mental groups. TRAINING OF COLLEGE FACULTY AND OTHER STAFF As necessary to strengthen the staff of the College the Contractor will aid in selecting faculty and other staff members of the College and graduate students for training in the United States. Persons so selected may be trained at the Contractor's institution in the United States or at other institutions selected by the Contractor, in consultation with FOA and other agencies concerned. Unless otherwise stipulated, this training shall be for a maximum of one academic year. EXPANSION OF FACILITIES The Contractor will advise in the establishment, development and operation, where applicable, of technical training schools, laboratories, and special insti- tutions, which may undertake research and extension services and provide con- sulting and reference services in specialized fields. SPECIAL CONFERENCES AND TRAINING PROGRAMS The Contractor will aid the College in planning and conducting special con- ferences and training programs in major fields of activity under the contract. Technical specialists may be provided by the Contractor as needed and agreed upon: (a) for a period prior to the conference to advise in the planning and preparation of necessary materials, and (b) to aid in conduct of the conference or training program. Plans also will be developed for (a) follow-up consultation with participants in applying methods and recommendations developed in the conference or training course, (b) strengthening or establishing consultant and coordinating committees, and (c) training programs in the U. S. or elsewhere for specialists. TRAINING AIDS As part of the training program, the Contractor will aid the College in training staff and developing facilities to (a) prepare and disseminate training and edu- cational materials and aids, (b) instruct in the use of various types of training aids, and (c) cooperate with research and extension workers and teaching staff in effective use of demonstrations, special short courses, and services to volunteer leaders. PROFESSIONAL ASSOCIATIONS AND PUBLICATIONS The Contractor will provide assistance to the College in the development of professional associations and technical publications as a means of furthering the exchange of ideas and experiences in specialized fields. BOOKS, MATERIALS AND SUPPLIES The Contractor will advise the College on the selection and use of necessary books, equipment and supplies for the activities covered in the contract. TECHNICAL ASSISTANCE PROGRAMS 53 [Draft] EXHIBIT II PROVISION OF FACILITIES AND SERVICES AND SUPPLEMENTARY ACTIVITIES ON THE PART OF THE COLLEGE (NOTE.-The following activities are illustrative of those that the foreign col- lege might be expected to carry out as a part of its contribution to the mutual endeavor; not all of them will necessarily be expected in any one country, and others not mentioned may be included. The nature and extent of the College's contribution with respect to provision of these facilities and supplementary activities undertaken will depend on facilities and resources available, and appli- cablity to agreed programs carried out under the contract. A statement of this nature will be prepared for the specific facilities and services to be provided and the supplementary activities to be undertaken in each field on the part of the College.) In accordance with the provisions of Article III the College will— 1. Provide, without charge to the Contractor, suitable office space, supplies, equipment, stenographic and clerical services, communication services in- cluding postage, telegraph, cable, and telephone; printing and duplicating facilities as needed for prompt and effective prosecution of the work and issuance of publications; assignment to the Contractor of transportation facilities to provide necessary local transportation including a minimum of one passenger car with operator, services of translators and interpreters, necessary hospital and medical services for personnel and dependents, and access to pertinent official records and documents and to officials of the Col- lege as may be necessary and required by the Contractor in the course of performance of the work. 2. Provide the basic operating facilities (laboratories, workshops, class- rooms, etc.) necessary properly to carry out the activities set forth in Exhibit I. 3. Provide funds, land, equipment, and necessary personnel for the expan- sion of facilities described in Exhibit I. 4. Plan and budget for continuation of activities begun under the contract. 5. Provide scholarships for undergraduate and graduate study in each field. 6. Provide housing, allowances, and facilities as specified in Exhibit III. [Draft] EXHIBIT III FINANCIAL PROVISIONS A. ITEMS TO BE FINANCED In consideration of the services performed by Contractor under the contract, the College shall reimburse Contractor for the following: 1. Salaries paid by Contractor to staff members performing work under the contract. Such payments shall include- (a) Base salaries paid by the college to staff members performing work under the contract not in excess of either of the following rates: (i) For personnel on Contractor's regular staff or persons recruited from other academic institutions, amounts regularly paid to such per- sonnel adjusted for comparable periods of employment and subject to normal merit and promotion increases, in accordance with the customary salary practice of the contractor or the last academic employer. For personnel specially employed by the contractor for work on the contract from nonacademic institution, amounts approved in advance by the Col- lege. Exceptions to the foregoing (involving such considerations as additional professional income from consulting services, nonregular teaching, etc.) may be made, and base salaries in excess of $15,000 per annum may be paid, only with the prior written approval of the Col- lege; or 54 TECHNICAL ASSISTANCE PROGRAMS (ii) Amounts regularly and actually received by individual staff members, not in excess of $8,000 per annum from, and in accordance with the customary salary practice of the contractor or of the last academic employer of such staff member, plus an amount not in excess of 25% of such amounts received. (b) In areas where overseas differentials are paid to FOA employees overseas differential of the same percentage of base salary as is provided such FOA employees pursuant to the Standardized U. S. Government Civil- ian Allowances Regulations (Foreign Areas) in respect of amounts earned during the time such staff members actually spend overseas on work under the contract. (c) Salary payment during necessary sick leave and during holidays and vacations taken, or in lieu of vacations not taken, if in accordance with the established practice of the Contractor. (d) Salary payment during travel time from U. S. residence to destination and return, including stopover en route in Washington, D. C., for orientation and briefing. Such payments shall be limited to an amount which would have accrued had the most expeditious regularly scheduled commercial air route been used (except for delays beyond the control of contractor or its personnel). (e) Payment to staff members of base salaries after services are termi- nated under Article II or Article VII, to the extent Contractor is liable to make such payments under its arrangements with such employees or in accordance with Contractor's normal employment practice; provided, that such payments shall not extend beyond one year from the date of the employee's termination or the original expiration date of the contract as specified in VII-A, whichever is earlier, and provided further, that payment of salary shall not be reimbursed after termination of assignment under Article II, by reason of misconduct on the part of a staff member or consultant, such misconduct to be judged by Contractor. (f) Premiums paid by Contractor for group insurance or retirement, if such payments are made by Contractor under its normal employment prac- tice, or with the prior written approval of the College if Contractor has no such normal employment practice. 2. Compensation paid by Contractor to consultants employed for work on the contract for periods of less than one year and to Contractor's Staff in the United States working directly on the contract at rates not in excess of those regularly paid by Contractor to such persons who are on its regular staff and for other persons specially employed for such work at rates to be approved in advance in writing by the College. Exceptions to the foregoing and any pay- ments in excess of the rate of $15,000 per year shall be made only with the prior written approval of the College. 3. The cost of transportation of staff members and their dependents (as de- fined in Foreign Service Regulations), baggage, household effects, and of con- sultants and their baggage from the point of origin in the U. S. to their destina- tion in the Host Country and return to the point of origin. Such transportation shall be by first class commercial scheduled air carrier, provided, however, that such staff members, dependents, and consultants may, with the consent of the College, travel by other means so long as the total cost for fares and allowances to be reimbursed by the College does not exceed the similar costs if travel were performed by air. Reimbursement for travel by privately owned automobile shall be at a rate of seven cents a mile, subject to the above limitation. The trans- portation of staff members, consultants, and their baggage, will ordinarily in- clude travel via Washington, D. C., for orientation and briefing en route to the port of embarkation. The College will also pay for transportation not to exceed 50 pounds of ac- companied excess, and 200 pounds of unaccompanied air baggage for each of the staff personnel and consultants, and 50 pounds of accompanied excess baggage for each dependent traveling by air carrier under this section. The College will also provide for the ocean transportation of additional household goods up to a maximum of 5,000 pounds per Staff Member and one privately owned auto- mobile of a staff member under contract for two years or more from the U. S. port of embarkation to the Host Country and return. The return transportation of any staff members who resign within six months and their dependents, or of dependents who desire to return within six months of their arrival at the Host Country will not be provided by the College, provided that the return transporta- TECHNICAL ASSISTANCE PROGRAMS 55 tion of any staff member or of his dependents will be provided by the College if the staff member is returned to the U. S. under the provisions of Article II (in- cluding members discharged for cause), or it is agreed by the College that the staff member or his dependents should be returned to the U. S. for reasons of health. 4. The cost of transportation of staff members and consultants within the Host Country and between the Host Country and other countries and within the U. S. when authorized in connection with the activities to be carried out by the Contractor under the contract. 5. Travel allowances to staff members and consultants performing work under the contract and dependents of staff members of $10.00 per day for personnel and their dependents 11 years of age or over, and $5.00 per day for dependents under 11 years of age, while in travel status. 6. Quarters and cost-of-living allowances to staff members and consultants serving overseas under the contract. These allowances shall be the same as those provided under the Standardized U. S. Government Civilian Allowances Regulations (Foreign Areas), as from time to time amended, to U. S. Foreign Service Officers and employees stationed in the Host Country receiving the same base salaries. 7. Should the Commissary and Post Exchange privileges provided to FOA personnel in the Host Country not be provided to Contractor's personnel, the College will advance a special cost-of-living allowance to the Contractor's per- sonnel in the Host Country for any resulting increased living costs. 8. Actual out-of-pocket expenses in addition to those mentioned above includ- ing, but not limited to, communication expenses such as costs of telephone and telegraph, postage, cables, preparation and reproduction of training and refer- ence materials and reports, books, reference materials, special equipment, and other equipment and materials procured solely for the performance of work under the contract, and transportation costs thereon, from Contractor's campus to the Host Country and return; passport and inoculation fees, health examination for staff members and dependents, Workmen's Compensation insurance, special health and accident insurance in addition to that normally carried by Contractor, and other similar dollar expenses incurred by the Contractor in performing work under the contract, the total reimbursement under this section not to exceed in any one year, without the prior written approval of the College. 9. An allowance to cover indirect costs incurred in the U. S. in connection with projects to be carried out under the contract. In the case of projects to be performed away from the Contractor's campus, the allowance shall be at the "off-campus" rate of % of the salaries paid to personnel assigned to work on such projects overseas. In the case of projects to be performed on the Contractor's campus, the allowance shall be at the "on-campus" rate of % of the salaries of the personnel assigned to work directly on the project. These allowances for indirect costs shall be used to cover those costs of the Contractor which are normally included in the Contractor's indirect costs in accordance with its customary accounting practice; and such costs shall not be billed directly under other provisions of the contract. Upon the expiration of one year from the effective date of the contract, the rates specified above shall become provisional and subsequent payments at such rates shall be subject to adjustment to conform to new rates to be determined by agreement of the parties, or at the College's option, on the basis of an audit to determine the then applicable actual indirect costs, such audit to be conducted as provided in Article B, Section 5, below. (NOTE. If the contractor desires, there may be substituted for the above para- graph a provision for a tentative billing rate for both "on" and "off" campus indirect costs, such tentative billings to be adjusted annually to actual indirect costs in accordance with a formula or principles to be agreed upon between the parties and FOA. An illustrative text for this purpose is set forth below: ("9. An allowance to cover indirect costs incurred in the U. S. in connection with projects to be carried out under the contract at the rate of percent of salaries paid by the Contractor and reimbursable by the College under subpara- graphs (a) and (b) of Paragraph 1 and Paragraph 2 (other than Consultants) of this Section A. It is understood that this allowance is provisional and subject to adjustment to actual indirect costs annually during the period of this contract upon audit of the applicable accounts of the Contractor by the college or its authorized representative, FOA or other appropriate U. S. Government Agency.") 56 TECHNICAL ASSISTANCE PROGRAMS B. METHOD OF PAYMENT 1. The Contractor shall be reimbursed in U. S. dollars for all of the above expenditures for which it is necessary for it to spend U. S. dollars, and in the currency of the Host Country for the balance of the amounts due under the con- tract. Total reimbursement in U. S. dollars shall not exceed $- 2. Reimbursement to the Contractor of the amount expected to be paid by FOA under Article IV-B (1) of the contract shall be made monthly by or through FOA or otherwise in the following manner: to (a) Letter of Commitment/Guaranty.—(1) The College shall request FOA to issue a Letter of Commitment/Guaranty in the amount of $-. the Contractor at the time the contract is signed, against which the Con- tractor may obtain payment of (or secure advances against) reimbursable costs upon the presentation of the documents set forth in Paragraph (b) of this section. (2) When the balance remaining in such letter of Commitment/Guaranty is below $‒‒‒‒‒‒ the College shall request FOA to increase its amount by $-- or by such lesser amount as may be required to cover the remaining reimbursements due the Contractor under the contract. , (b) Documentation.-In the event of the issuance of said FOA Letter of Commitment/Guaranty, the documents required for reimbursement to the Contractor shall be specified in said Letter of Commitment/Guaranty. 3. Claim for payment shall not be made more often than once a month and the final payment shall not be made until the Contractor has satisfactorily com- pleted the work called for under the contract and the Contractor has submitted the reports specified in Article II. 4. Contractor shall keep full and complete records and books of account in accordance with generally accepted accounting principles covering the financial details applicable for the contract and shall require all subcontractors to main- tain similar books and records (except under Sub-Contracts for standard com- mercial supplies and raw materials). 5. The College, or its authorized representative, FOA and the Comptroller General of the United States or any of his duly authorized representatives, shall, until the expiration of three years after final payment under the contract, have access to and the right at all times to examine and audit such records and books of account (and in addition any or all other attachments, corres- pondence, memoranda, and other records pertaining to the contract) of the Con- tractor or any of his sub-contractors (except under sub-contracts for standard commercial supplies and raw materials) engaged in the performance of, and in- volving transactions relating to, the contract or any subcontract. Execution of any Certificate of Performance furnished pursuant to Section 1 (b) of this Article shall not affect the College's right to request appropriate refunds on the basis of such audit. 6. Reimbursement to the Contractor of the amounts to be paid by the Govern- ment of the Host Country and the College under Articles IV-B (2) and (3) of the contract shall be made in the following manner: (a) On arrival of the Contractor's staff in the Host Country, the College shall make an initial advance to the Contractor of an amount in currency of host country equivalent to $- to defray necessary local expendi- tures. (b) The Contractor shall make a full accounting for all expenditures made from such advances monthly by presentation of documentation satisfactory to the College. The College shall advance such additional amounts of equal to the amounts for which satisfactory documentation has been supplied. (c) Upon termination of the work under the contract, the Contractor shall repay promptly to the College all unexpended, unobligated, or unaccounted for portions of such advances. 7. The Contractor shall normally utilize the funds provided under Section 2 above to cover salaries of personnel, overhead, and other expenditures made in the United States; and the funds provided under Section 6 above to cover allowances, travel costs including international travel, and other expenditures made in the Host Country; provided, that uses of either funds for costs normally covered by the other may be made, upon authorization by FOA and the College. TECHNICAL ASSISTANCE PROGRAMS 57 . [Draft] ILLUSTRATIVE FOA LETTER OF COMMITMENT/GUARANTY [NOTE. This draft assures that the U. S. College will be reimbursed for dollar expenditures made by it under the contract with the foreign college; if appropriate, the Letter of Commitment may provide for advances to the U. S. College.] To: U. S. College: Re: Contract dated between (host country) college and (U. S. College) contractor under Project Agreement between the Government of the United States of America and (host country) dated DEAR SIRS: The Director of the Foreign Operations Administration, acting for the United States of America, hereby undertakes, as herein provided, to make payments not in excess of on the amounts to which you may become entitled in accordance with Article IV, B-1 and VII, B and Sections 1, 2, 3, 5, 8, and 9, Article A of Exhibit III of said contract; provided that in no event shall any such payments be made in respect of amounts to which you may become entitled in accordance with Articles III, IV, B-2 and B-3, and VI C of said contract, or Sections 4, 6, and 7 of Article A and Section 6 of Article B of Exhibit III to said contract. In consideration of the obligation assumed by the Foreign Operations Admin- istration to make payments to you under this Letter of Commitment/Guaranty and in accordance with the provisions of Article V of said contract it is understood that you will- (1) obtain the prior written approval of the Foreign Operations Admin- istration of: (a) any amendments to said contract, including the Exhibits thereto, and (b) any other action involving payment to be made to you pursuant to said contract which is subject to approval by the College; (2) confer on the Foreign Operations Administration the same rights and authority as provided the College under Articles II-B (approval of work plans), C (personnel), and E (reports), and VI-F (assignment), and G (inspection) of said contract, and Article A and Sections 4 and 5 of Article B, Exhibit III of said contract as fully as if the Foreign Operations Admin- istration were a party to said contract; it is also understood that you will, at the written request of the Foreign Operations Administration, terminate the employment on the contract of any individual or individuals if the Foreign Operations Administration is of the opinion that such termination is required for security reasons: (3) require personnel assigned to work under said contract to receive orientation to be furnished by FOA, if so requested by FOA; (4) carry out operations in the Host Country under said agreement under the general direction of the Director of the United States of America Opera- tions Mission in the Host Country or his designee on matters relating to the general scope and nature of your activities in each project undertaken under said contract, coordination of your operations with other technical assistance activities in the Host Country, relations with the Government of the Host Country, and conduct and discipline of personnel when stationed in the Host Country; (5) make prompt notification of any reimbursement adjustments re- quested by the College pursuant to paragraph B-5 of Exhibit III of said contract. The estimated maximum value of said Agreement is The director of the Foreign Operations Administration undertakes to amend this Letter of Commitment/Guaranty to make further additional payments in accord- ance with the Economic Cooperation Act of 1948, as amended [Act for Interna- tional Development, as amended] and the Mutual Security Act of 1951, as amended, conditional upon the appropriation by Congress of additional funds to the Foreign Operations Administration and allotment by the Foreign Operations Administration of a portion of such funds for the account of the Government of and the allocation of a portion of such allotment [by program or project agreement with FOA or otherwise] by the Government of to the making of dollar pay- ments under said Agreement. [NOTE. This paragraph is only applicable if the original FOA dollar commitment is less than the estimated dollar amount of the College contract.] 4 58 TECHNICAL ASSISTANCE PROGRAMS In any event, the Foreign Operations Administration reserves the right to terminate its obligation to make any or all payments to you hereunder upon 90 days notice in writing to you at the above address, in which event payment hereunder shall be limited to the items specified in Article VI-B of said Agree- ment; provided that the Foreign Operations Administration shall have no obliga- tion to make payments to you hereunder after June 30, 1956, unless such date has previously been extended. Except insofar as inconsistent herewith, all provisions of said Agreement are incorporated herein by reference. Payments will either be made to you by the Foreign Operations Administration upon monthly submission of the documents described in Appendix B attached, or at your option, by way of advance to you under the following terms and conditions: 1. Upon your presentation to FOA of an appropriate voucher, SE-1146 in original and three copies, FOA will advance you the sum of $_ to cover the first three months' requirement of funds. Accounts for such funds shall be separately maintained on your books and you will take such steps as may be necessary to assure that such funds shall not be subject to attachment, lien, seizure, or other legal process by any person, firm, agency, corporation or government. 2. When the balance of funds previously made available to you hereunder falls to approximately $-. [an amount sufficient for about one month's operation], additional advances will be made from time to time by FOA in amounts approximating $. each upon your sub- mission of voucher Standard Form 1146, in original and three copies, sup- ported by estimates of costs and expenses expected to be incurred from such advances. 3. You will use funds so advanced only at the rate required properly to perform your services in connection with said contract and will expend all funds withdrawn only in accordance with the terms and conditions of the contract and this letter of Commitment. You will be directly responsible to FOA for expenditure of all funds advanced hereunder, will account directly to FOA quarterly, the documentation described in Appendix B attached (ex- cept that SF 1146 shall be in the form of a no-pay voucher) and such other documents as may be required by FOA to substantiate costs; and will promptly refund to FOA any amounts not expended or accounted for under the terms of said contract and this letter of commitment. 4. On termination of this agreement you will promptly return to FOA that portion of any amounts advanced hereunder which are unexpended and unobligated on the date of termination of the contract. This Letter of Commitment/Guaranty shall expire June 30, 1956, unless such expiration date has previously been extended. Your acceptance of the terms and conditions hereof shall be indicated by causing your duly authorized officer or officers to execute this Letter of Commit- ment/Guaranty and the enclosed counterpart hereof and by then returning such counterpart to this office. This Letter of Commitment/Guaranty shall be effec- tive when you have so indicated your acceptance. Very truly yours, DIRECTOR OF THE FOREIGN OPERATIONS ADMINISTRATION, By Authorized Representative Accepted: [NOTE. This Letter of Commitment/Guaranty may be assigned only as on the form set forth in Appendix A to this letter and only to a banking institution organized under the laws of the United States, any State, Territory or Possession thereof, or the District of Columbia.] APPENDIX A FORM AND NOTICE OF ASSIGNMENT After signifying his acceptance of this Letter of Commitment/Guaranty, the addressee named on this Letter of Commitment/Guaranty hereby assigns for TECHNICAL ASSISTANCE PROGRAMS 59 value received the right to receive all monies due or to become due hereunder a banking institution organized under the laws of to (Signature of Assignor) Notice to the Foreign Operations Administration, Washington, D. C., under the Assignment of Claims Act of 1940, sent on (Date) (Signature of person sending notice) [NOTE.-The filing of notice of assignment will not be deemed effective unless date of such notice is properly noted in the space provided above.] APPENDIX B DOCUMENTS FOR THE COST OF SERVICES (1) Voucher SF-1034 (revised) or SF-1146 in original and three copies. (2) Original and one copy of Contractor's invoice, describing the services per- formed and itemizing in detail all reimbursable dollar costs as follows: (a) For salaries, the employee's name, rate of pay, period covered and amount claimed. (b) For transportation costs, a statement of the itinerary showing item- ized costs; payment being indicated by Contractor's check number. (c) For other costs, the name of the vendor, description and cost of ma- terial, equipment or services furnished; payment being indicated by Con- tractor's check number. (3) The invoice shall also indicate: (i) the total estimated dollar cost of serv- ices and fees under the agreement; (ii) the total dollar amount previously re- ceived and/or claimed as partial payments, detailed by amounts and dates; (iii) the dollar amount invoiced; (iv) total estimated dollar costs of services and fees not yet invoiced. In addition, attached to or endorsed on the invoice, shall be one copy of a Work Progress Certificate signed by the supplier in the following form : "The undersigned certifies that the cost of services reimbursable to the supplier and the amount of fee earned by the supplier up to the date of this certificate are not less than the total payments received or claimed by the supplier under the agreement (including the payment claimed under the invoice) and that the supplier has fully complied with the terms and condi- tions of the agreement." (4) Certificate of the host country (or of the College as authorized representa- tive of the host country) (i) that the services for which reimbursement is re- quested have been satisfactorily rendered; (ii) that the costs thereof are proper- ly reimbursable and the fees earned, in accordance with the terms of the agree- ment; and (iii) that any reports or recommendations required under the terms of the agreement have been received. (5) Two signed copies of Form FOA-280. - TECHNICAL ASSISTANCE PROGRAMS FRIDAY, FEBRUARY 18, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The committee met, pursuant to call, at 10 a. m., in room 457, Sen- ate Office Building, Senator Mike Mansfield (chairman of the sub- committee) presiding. Present: Senator Mansfield. Senator MANSFIELD. The meeting will come to order. The first witness this morning will be Dr. Earl Butz, Assistant Sec- retary for Marketing and Foreign Agriculture, Department of Agri- culture Dr. Butz has been head of the department of agricultural economics at Purdue University, and has been a research assistant at Brookings Institution and the National Bureau of Economic Re- search. Dr. Butz, will you proceed with your statement? STATEMENT OF EARL L. BUTZ, ASSISTANT SECRETARY FOR MAR- KETING AND FOREIGN AGRICULTURE, UNITED STATES DE- PARTMENT OF AGRICULTURE, ACCOMPANIED BY WILLIAM G. LODWICK, ADMINISTRATOR, FOREIGN AGRICULTURAL SERVICE Dr. BUTZ. Senator and members of the committee, I am happy to have the opportunity to appear before this subcommittee and testify on the subject of technical assistance. We in the Department of Agriculture believe that the study being made by this subcommittee will fill a great need, and that Senate Resolution 214 and the com- mittee's report on that resolution are wisely drawn. We will do everything that we can to assist the subcommittee in this study and to help clarify the purposes of the various programs. The Department of Agriculture, as you know, has had long experience with technical assistance work, both with our own rural people in America and with rural people in other countries. We are interested in, and assist and advise in, the operations of our United States pro- grams administered by the Foreign Operations Administration and the programs administered by the Food and Agriculture Organiza- tion of the United Nations. We have not participated in those ad- ministered by the Organization of American States. At the present time, we do not have direct operating responsibility for any part of the programs other than some special projects and providing training services for foreign nationals in the field of agri- culture. 59637—55———5 61 62 TECHNICAL ASSISTANCE PROGRAMS Our experience in agricultural technical assistance in our own coun- try, of course, has evolved through the development of cooperative programs with the States and the land-grant colleges for providing research, extension, credit, marketing and other services to our own rural people. FOREIGN EXPERIENCE OF AGRICULTURE DEPARTMENT Our experience in technical assistance programs to rural people of other countries has been roughly of three kinds from the standpoint of administrative responsibilities of the Department of Agriculture. From the early 1940's until the passage of the Act for International Development, we had full operating responsibility for some technical assistance programs in agriculture, principally in Latin America. From the passage of the Act for International Development until the establishment of the Foreign Operations Administration, we had cer- tain operating responsibilities for programs but exercised them in cooperation with a central agency. Under the third and present ar- rangement, the operations are conducted by a central organization, and we provide limited supporting services when requested. These various stages of our activities were determined by the legisla- tive authorities under which we operated and the administrative ar- rangements that were made to execute these authorities. Public Law 545 of the 75th Congress, passed in 1938 and amended by Public Law 63 of the 76th Congress in 1939 authorized temporary detail of United States employees to the governments of American Republics and the Philippines. Public Law 355 of the 76th Congress was passed in 1939 to authorize the President to render closer and more effective the relationship between the American Republics. Public Law 402, passed in 1948 by the 80th Congress, extended the authority for tech- nical cooperation to all countries of the world, in addition to those of Latin America. Under these authorities the Department of Agriculture worked with the governments of 15 other American Republics largely for the pur- pose of stimulating production of crops, such as rubber and coffee, which are complementary to our own agricultural economy or stra- tegic to our needs. The work we engaged in was largely technical and generally consisted of assisting in the establishment and maintenance of joint cooperative agricultural experiment stations and training Latin American specialists. On these programs we worked in coop- eration with other agencies of the Government through the Inter- departmental Committee on Scientific and Cultural Cooperation. The second stage of our participation in technical assistance pro- grams in agriculture came under the authority of the Act for Inter- national Development. Administration of this act was assigned to the Technical Cooperation Administration. Through this act, as the sub- committee knows, technical assistance programs were greatly empha- sized and operated in more fields and on a much larger scale than previously. The participation of the Department of Agriculture in the programs authorized by this act was largely that of (1) recruiting, employing, and assigning United States technicians abroad, (2) pro- viding technical support through the scientists and technicians of the Department, and (3) training foreign technicians who come to the United States. TECHNICAL ASSISTANCE PROGRAMS 63 · The third stage of our participation in United States technical assistance programs, and the one under which we now operate, dates from the conclusion of a memorandum of agreement with the Foreign Operations Administration just a year ago. Under the provisions of this agreement, we perform three functions (1) upon request from FOA in connection with their programs or projects we provide tech- nical advice and consultation, (2) we operate 10 so-called special proj- ects under separate agreements with FOA and at their request in such fields as insect control, soil salinity, soil survey, publications exchange and others, (3) we have responsibility for the training of foreign na- tionals in the United States through arrangements with the State land-grant colleges. PARTICIPATION IN FAO PROGRAM So much for our participation in the technical assistance programs of our Government. We have no operating responsibility with re- spect to the technical assistance programs of the Food and Agricul- ture Organization of the United Nations, commonly referred to as FAO, but maintain a close relationship to their program. The Sec- retary of Agriculture has the responsibility for coordinating the par- ticipation of United States Government agencies in FAO. This in- cludes FAO's technical assistance program as well as its so-called regular program, although the source of funds and the administra- tive arrangements for the two programs are different. Both pro- grams are carefully studied by the agencies of the Department of Agriculture, and by special committees of experts, prior to their ap- proval on a 2-year basis by the conference of FAO's 71 member na- tions. Our Administrative Assistant Secretary, Mr. Ralph S. Rob- erts, is a member of one of the expert committees, dealing with finance and administration; and our Administrator of the Agricultural Mar- keting Service, Mr. O. V. Wells, is a member of a committee, which reviews the program operations and developments of FAO. This latter committee recently made an intensive evaluation of the Organ- ization's technical assistance activities. On the basis of these studies and evaluations, and because of our confidence in FAO's Director-General, Philip V. Cardon, who was for a number of years our administrator of agricultural research, we in the Department of Agriculture believe that FAO's technical as- sistance programs are on the whole soundly based, well administered, and of real benefit to the member countries. COORDINATION OF FAO AND FOA ACTIVITIES Since your study is to include the relationship between technical as- sistance programs of the United States and those of international or- ganizations, the subcommittee will be interested to know that special arrangements to encourage coordination and joint effort of the tech- nical assistance activities of FAO and FOA. A subcommittee of the United States FAO Interagency Committee has been established for this purpose. The United States FAO Interagency Committee is the means of coordinating the total United States Government par- ticipation in FAO. I have been designated chairman of that com- mittee by the Secretary of Agriculture. The subcommittee for co- 64 TECHNICAL ASSISTANCE PROGRAMS > ordination of technical assistance activities in agriculture is under the chairmanship of a representative of the Office of Food and Agricul- ture of FOA, and has on it the technical assistance officer of the North American Regional Office of FAO, as well as representatives of the Departments of Agriculture, State, and Interior. This subcommittee has been useful in bringing about an exchange of information and discussion of plans for activities of the two or- ganizations, and through it a number of joint cooperative activities have been worked out. Through this means, and through the good will and common interest in program objectives of technicians in the field, duplication or overlapping of effort between the two programs has not been a problem. The FAO program is much smaller than that of FOA, since FAO has been operating its technical assistance activities on slightly less than $6 million. I would like to mention that in connection with our participation in the activities of the Food and Agriculture Organization we work in close cooperation with national voluntary organizations that are interested in FAO. These are primarily, of course, national farm organizations but include equally organizations of people concerned with forestry, fisheries, business, women's, church, public information and other interests. Representatives of some of these organizations contribute directly to the formation of United States policy with regard to FAO's technical assistance and other activities and attend sessions of the FAO conference together with Members of the Con- gress and representatives of the Department of Agriculture and other Government agencies. As I indicated earlier, we do not participate directly in the technical assistance programs of the Organization of American States, but I understand that cooperative arrangements have been worked out and are being further developed between the Organization of American States and FAO as well as FOA. OBSERVATIONS ON PROGRAM In commenting on the operations of these programs, I will limit myself to a few general observations and principles, which I hope will be helpful. As I indicated, these observations are based on our expe- rience, since we do not have direct operating responsibility for any of the programs. We believe that the operations of technical assistance, both those of the United States and those of international organizations, would be considerably clarified by a more precise definition of the purposes they are designed to achieve. This would be similar to the practice with our cooperative Federal-State technical assistance programs, wherein the purposes of the programs for agricultural research, exten- sion, and others are clearly stated in legislation. It is possible that sufficient experience has been gained in the operations of these pro- grams in other countries to make such an approach now feasible. Long-term programs generally associated with the concept of tech- nical assistance which should be directed at the development of na- tional services for agriculture, health, education, and other fields, do not require large amounts of investment, although the return on in- vestment for this type of long-range activity may in the long run be TECHNICAL ASSISTANCE PROGRAMS 65 greater than for the economic development activities. The long-term job of creating national institutions on a cooperative basis should not be governed by political considerations, but should be an expres- sion of American desire to improve the conditions of people in all friendly countries. Such a long-term program should result in a direct extension and sharing of technical knowledge. To such an exchange we can contribute our techniques and our philosophy of Government service to our citizens. These principles should apply to these long-term programs whether they are administered by a national agency or by an international agency. I do not believe I could appropriately comment on other aspects of the study being made by this subcommittee, such as the level of authorization of funds for the future, or the degree of self-help and mutual assistance available in countries receiving technical assistance. We believe that, as a general principle, countries receiving technical assistance should match that assistance through contributions and by creating conditions that will permit the assistance to achieve its pur- pose for the benefit of the receiving country's people. I will close by saying that programs soundly developed on a joint cooperative basis to assist other countries to provide their people with the benefits of agricultural research, credit extension, education, con- servation, marketing, disease and pest control, will contribute to world peace. That concludes my statement, Mr. Chairman. Senator MANSFIELD. Thank you, Mr. Secretary. Of the three administrative arrangements referred to in your state- ment which has been the most satisfactory, in your opinion? Dr. BUTZ. We find the present arrangement fairly satisfactory, al- though we don't have any direct responsibility for the foreign techni- cal assistance program abroad. Our primary responsibility now is limited to the training of technicians sent to this country. Senator MANSFIELD. That is your only responsibility at the present time? Dr. BUTZ. The only direct responsibility. RECRUITING METHODS Senator MANSFIELD. Where does the FOA get its county agents? How does it get the county agents it sends abroad to serve in agricul- tural projects? Dr. Burz. Under the present arrangement, as I understand it, these personnel are recruited from the land-grant colleges and elsewhere. They do their own recruiting, but we advise with them in that process. Senator MANSFIELD. Are there no transfers from the Department of Agriculture into the FOA for the purpose of carrying on technical assistance projects in countries like Nepal, India, and the like? Dr. BUTZ. Some of our personnel do that, but they are transferred to the FOA for that purpose. They are not there as Agriculture em- ployees, they are transferred from us to FOA. Senator MANSFIELD. Over a certain period of time? Dr. Burz. Yes. Senator MANSFIELD. And the FOA pays their salaries while they are working in that organization? Dr. BUTZ. I would like to have Mr. Lodwick speak on that. Mr. Lodwick is the Administrator of the Foreign Agricultural Service. 66 TECHNICAL ASSISTANCE PROGRAMS Senator MANSFIELD. Will you give your name to the reporter, please, and your title? Mr. LODWICK. William G. Lodwick, Administrator, Foreign Agri- cultural Service, Department of Agriculture. Senator MANSFIELD. Proceed. Mr. LODWICK. Under the present arrangement, if FOA desires to hire some one of our people, they resign from Agriculture and go on the payroll of FOA, they are no longer employees of the Department of Agriculture. I think there are some special variations to that, but generally speaking, that is the present arrangement. Senator MANSFIELD. Well, if that happens, what happens to these people when they complete their contract with the FOA? Mr. LODWICK. They either make a new contract or apply for a job in the Department of Agriculture or at some other place. Senator MANSFIELD. But they have no rights in the Department of Agriculture? Mr. LODWICK. No, in the case of employees who are now transfer- ring to overseas posts. Senator MANSFIELD. Thank you, Mr. Secretary. The next witness will be Glen E. Edgerton, Managing Director and President, Export-Import Bank. STATEMENT OF GLEN E. EDGERTON, MANAGING DIRECTOR AND PRESIDENT, EXPORT-IMPORT BANK Mr. EDGERTON. Mr. Chairman, I have a prepared statement to read, if it pleases the committee. It will take about 7 or 8 minutes. Senator MANSFIELD. If you wish to condense that statement and proceed in your own way, you may do so; or if you wish to read it, we will be glad to hear you. Mr. EDGERTON. Thank you, sir. Mr. Chairman, it is a privilege to appear before this committee to indicate some of the important relationships between the Govern- ment's technical assistance program and the operations of the Export- Import Bank of Washington. I am sure that other witnesses will de- scribe the technical assistance program as a whole so that my state- ment will be directed to the manner in which the bank's activities are served by that program. RELATIONSHIP OF PROGRAM TO DEVELOPMENT LOANS The most important relationship exists in the area of the bank's activities which we designate as development loans. In carrying out our statutory objective of aiding in the financing of the export and import trade of the United States, we have made a good many loans to foreign governments to finance the procurement of United States equipment, supplies, and services required for the construction of im- portant projects, such as dams, irrigation works, hydroelectric power installations, highways, and water supply systems, designed to improve permanently the economy of the borrowing country. Financial assist- ance of this kind, especially in the less developed countries, not only creates an immediate market for the American equipment, supplies, and services required to build the projects, but, in addition, has long- range economic effects in augmenting productivity and the dollar pur- TECHNICAL ASSISTANCE PROGRAMS 67 chasing power of the foreign countries involved so that they may become better markets for a wide variety of United States exports. In many instances, also, the projects contribute to the production of com- modities or goods for which there is a demand in the United States, and thus develop imports as well as exports of concern to our country. In some instances such loans also serve important purposes of the United States foreign policy. NECESSARY STANDARDS FOR PROJECTS In a majority of the projects of this kind in which the bank partici- pates, more than mere financial assistance is required to make the projects fully successful. They must be well conceived, competently designed and constructed, and effectively managed and maintained after they are completed. One of the most difficult tasks of the bank is to insure that the necessary standards in these respects are attained. The results of failure to do so are unfavorable, financially, economi- cally, and politically. On the other hand, the favorable results of success in attaining high standards are equally far-reaching, although not always susceptible of close identification and appraisal. In many countries in which financial assistance of this kind is most needed, there is a great lack of trained engineers, agronomists, and other specialists. To build and later to run these projects, it is necessary to secure the services of foreign technicians who, in the process of the execution of their tasks, may train the ambitious and enterprising local personnel, so as to promote the acquisition of skills and know- how to meet existing and prospective needs of the borrowing coun- tries to their continuing benefit. Of course, a loan of this kind is authorized only after the bank is reasonably satisfied that the borrowing government will be able to obtain technical services, from one source. or another, sufficient to meet the operating and maintenance requirements after construction. When the borrowed funds have been expanded, our position of influ- ence in these matters is obviously weaker. The bank itself is pre- pared and equipped to make the necessary technical analyses of devel- opment loan applications. That is a basic responsibility. But we are not so staffed as to be able to provide continuing technical advice and service to the borrower after a loan has been established and especially after it has been fully disbursed. EXAMPLES OF DEVELOPMENT LOANS Before commenting on specific operational aspects of a separate United States Government technical assistance program, it may be desirable to give examples of the bank's development loans which are presently authorized or outstanding. In most of these cases, the bor- rowing government has been able to avail itself of the services of United States technical experts assigned to the country under that program. In Haiti we have a $14 million loan to assist in financing the construction of the Artibonite Valley irrigation and flood-control project which will substantially increase the agricultural output of Haiti on which it depends for most of its dollar income. This project includes a large buttress-type dam which is being built for future installation of hydroelectric power facilities. In the middle-eastern | 68 TECHNICAL ASSISTANCE PROGRAMS area we have made two loans of approximately $20 million each to the Government of Afghanistan to carry out a similar, though larger, irrigation and hydroelectric power project in the Helmand River Valley area. The physical works of both the Haitian and Afghanis- tan projects will provide facilities to carry out specific programs of expanded agricultural production. Following the recent solution of the oil problem in Iran, the bank has earmarked $53 million to help meet the dollar costs of specific projects in Iran, which are to be submitted to and approved by the bank individually before the financing is actually committed. It is expected that a substantial portion of this financing will be devoted to basic development proj- ects, although United States machinery and equipment purchases for other approved purposes may also be financed under this loan. In Liberia, we have recently authorized a loan of $15 million to carry out a road-building program. Liberia is presently developing its re- sources in rubber and iron ore and should be an expanding area for United States investments. In Bolivia and Ecuador, the bank has financed highway construction projects. In Ecuador we have loaned dollars for the purchase of needed United States machinery and equipment to carry out waterworks projects in four cities and towns, including Quito and Guayaquil. I believe these examples of development loans indicate that the pro- jects are of a type and scope requiring skilled technical services to ob- tain full benefit from the facilities which our loans help to build. I should point out, perhaps, that it is not always easy to convince for- eign governments of the necessity for importing United States tech- nical services. Where bank-financed projects are involved, there are obvious advantages to the borrowing government in being able to share the costs of needed technical advisory services with the United States. The technical assistance program provides a means for doing So. LOAN APPLICATIONS The bank has to take full responsibility for analyzing loan appli- cations for projects of this type, as well as the others. We rely pri- marily on our own field investigations, but also on all the informa- tion we can obtain, including information given us by the applicant, by private engineers who have surveyed and investigated the project, and by other United States Government personnel who are in a posi- tion to furnish pertinent information to us. In this work technical- assistance personnel can often be very helpful and they have been on numerous occasions. Our analysis is influenced, of course, by the in- formation and opinions of other agencies of this Government, es- pecially in respect to matters affecting the discharge of their responsi- bilities, but the bank has to make the final determination of the ac- ceptability of each loan application in the light of the information that can be obtained from all sources. For the actual engineering and construction work involved in proj- ects financed by the bank, reliance is primarily on the technical serv- ices of private United States engineering and construction firms who contract for this work with our borrowers. There are many firms well equipped and experienced in such work, and able to demonstrate to less-developed countries the efficiency of private enterprise in these TECHNICAL ASSISTANCE PROGRAMS 69 fields. The bank has found that American engineers and contractors are for the most part glad to assist in training local technicians and engineers and to place increasing numbers of local personnel on their payroll as the job progresses. Many American suppliers of capital equipment provide facilities and personnel for training foreign per- sonnel in the operation and maintenance of the equipment sold abroad. These are good examples of technical assistance being provided from private American sources as a result of the bank's financing. OPERATION AND MAINTENANCE ACTIVITIES There is an area, however, where private American firms do not operate to any large extent. It is here that the United States Govern- ment technical assistance program can be of the best assistance to the bank in protecting its loan investments. I refer particularly to the general area of operation and maintenance activities. Foreign gov- ernments are generally reluctant to turn over the operation of a proj- ect of this kind to a private United States firm, even if they could. But at the same time, they are often not able to manage effectively without technical advice and assistance. Similar circumstances apply to such matters as surveys, developing general plans for irrigation, agricultural production, soil conservation, forestry, and the like. Ex- perts in these fields comprise the kind of technicians who can render most valuable service to borrowers or prospective borrowers from the Export-Import Bank. On some of our development loan projects, we have encouraged and occasionally required our borrowers to contract on a private basis for the services of individual American technicians in these fields to help execute and administer development programs being financed locally to utilize facilities which have been constructed with our loan assist- ance. These are cases in which American technical services of a highly qualified type are needed in the actual administration and operation of the programs. Private individuals can frequently step in on a con- tract basis to furnish such services and take on responsibilities which a United States Government technical assistance mission cannot as- sume without weakening local responsibility for success of the project. COMMENTS ON ADMINISTRATION OF PROGRAM I would like to say a few words about the administration of the technical assistance program in the fields where it touches the bank's activities. We have no overall, formal agreement with the Foreign Operations Administration to provide technical services to our bor- rowers. We maintain good contact, however, with its representatives in countries in which we have development loans outstanding. FOA's country directors have been very cooperative in trying to obtain tech- nical personnel for their missions who can supply needed advisory services to governments undertaking projects financed by the bank. These technical services have always been supplied directly to the foreign governments rather than through the Export Import Bank. The principal reason, of course, is that the technicians are likely to be involved in other activities in the country besides the projects being financed by the bank. 70 TECHNICAL ASSISTANCE PROGRAMS SUMMARY OF VIEWS The essence of my views can perhaps be summarized in this manner. In its development lending activities, the Export Import Bank, or more particularly the borrowers from the bank, have a need to draw on the services of trained United States technicians in fields where private United States and local firms are unready or unwilling to furnish such assistance. In some cases, it can be advantageous for the bank's borrowers to call upon technical assistance and advisory services furnished through a United States Government program. The bank itself cannot generally supply these services, although they can oc- casionally be secured by the borrower through contracts with private individuals. I believe the technical assistance program has been very beneficial in the less-developed areas in which our loans have been made. The great majority of personnel assigned to the technical assistance missions with which representatives of the bank have been in contact are conscientious, competent people, sometimes working under discouraging and frustrating conditions. The technical assist- ance program itself can be most effective insofar as our work is con- cerned, if special effort is directed to supplying technical services of the kinds needed in connection with development-type projects. That concludes my statement, Mr. Chairman. FOA LOANS Senator MANSFIELD. General, the FOA makes loans directly. Do you think that the time has come to have all development loans of this kind made by the Export Import Bank, or the international bank? Mr. EDGERTON. No. I think the program of loans of the FOA is somewhat different from the kind of loans that our bank will take, or I believe that the International Bank will take. We lend only dollars, and we require payment in dollars. I believe there is a field for the kind of assistance to such projects which could hardly support dollar loans. Senator MANSFIELD. Would you say that the loans that the Export- Import Bank approves are sounder than the loans that the FOA might have to approve? Mr. EDGERTON. Well, I think they are certainly supported by a higher financial backing. Our loans are required by our act to offer in the judgment of the Board reasonable prospect of repayment. The Board has interpreted that usually to be more than a mere good pros- pect, it has interpreted it to mean almost a certainty that they will be repaid. Now, I think it is appropriate in some cases for loans not quite bank- able to be made by the United States Government. EXPORT-IMPORT BANK LOANS Senator MANSFIELD. Does the Export-Import Bank make any po- litical loans? Mr. EDGERTON. No, sir. We make a number of loans which in addi- tion to their primary purpose do serve political objectives, and we try to consider in connection with each application all the possible factors pro and con--and in most applications there are some of each—and TECHNICAL ASSISTANCE PROGRAMS 71 in our best judgment check on balances between favorable and unfavor- able factors. Senator MANSFIELD. But always you are certain in your own mind that the country to which you loan money has enough in the way of collateral to repay it within the specified period of the loan. Mr. EDGERTON. Yes, sir. Senator MANSFIELD. What is the usual time period of the Export- Import Bank loans? Mr. EDGERTON. Well, there is no standard that I could quote you. There are some practices. The general rule of the bank would be to relate the length of payment to the nature of the project, the length of time over which repayment is to be made, so that a project which had a short life, or, say, equipment which had a short life, should have a rather short-term loan, somewhat commensurate with the life of the project, but a little shorter, whereas a project that takes a long time to bring in its fruit would have a longer time for repayment. An example of the latter part are the general agricultural develop- ment projects. They take much longer to pay for themselves than many manufacturing enterprises. ARTIBONITE PROJECT IN HAITI Senator MANSFIELD. The Artibonite power project, the irrigation loan in Haiti, is for $14 million, I believe. The Haitian Government, I believe, is putting up something on the order of $16 million, so that the project, I believe, will come to a total cost of somewhere in the vicinity of $30 million. How long is that loan for? Mr. EDGERTON. I think that loan is for in the neighborhood of 20 years. I have the data here, I can get that precisely. It is a long-term loan. I would like to say, Mr. Chairman, we don't count that precisely as a power project. It is primarily a water control and irrigation proj- ect. My reference as I read it there is a little misleading. It should have said that there are in the construction the basic facilities which will permit the installation of power development at a later date. Senator MANSFIELD. I understand, General, that the main purpose of the Artibonite project is to reclaim something like 60,000 acres of deforested land in Haiti, and it is badly needed. But, at the same time you are building a project of that kind you are making allowances so that at the same time the Haitian Government can install a power project for the purpose of disbursing power to the people of that part of the island. Mr. EDGERTON. That is right. COORDINATION OF FOA AND BANK LOANS Senator MANSFIELD. Is there any coordination between the Export- Import Bank lending policies and those of FOA, or are they each completely separate? Mr. EDGERTON. No, there is very good coordination. I think very good cordination is arranged between the two agencies. But in addi- tion, the National Advisory Council has coordinating authority on all United States agencies engaged in the international financial field. So there are two safeguards to prevent poor coordination. X 72 TECHNICAL ASSISTANCE PROGRAMS Senator MANSFIELD. In other words, what you have is a double check? Mr. EDGERTON. Yes, sir. COMBINING TECHNICAL ASSISTANCE WITH CAPITAL INVESTMENT Senator MANSFIELD. General, what do you think of the suggestion that our technical assistance would be made more effective if combined with capital investment, either Government or private? Mr. EDGERTON. That is a rather big question, Mr. Chairman. I would say that the difficulty of combining the two is substantial. Senator MANSFIELD. When you go back to your office, General, would you send us a memorandum on that subject? We would like to have your views. Mr. EDGERTON. Yes, sir, we can do that. It warrants a little thought rather than an extemporaneous reply. Senator MANSFIELD. You will furnish us with a memorandum then? Mr. EDGERTON. Yes, sir. BANK SERVICES FÜRNISHED Senator MANSFIELD. Does the Export-Import Bank furnish any direct banking assistance in connection with its loans? Mr. EDGERTON. No, sir. We furnish a good deal of advice and some- times assistance in respect to supervision of the work. The engineer- ing and technical work that has to be done couldn't be provided by us. We couldn't maintain a staff of sufficient size. Senator MANSFIELD. I understood you to bring that out in your testimony. I just wanted to emphasize it. Thank you very much, General, for your testimony. Mr. EDGERTON. Thank you, sir. (The following information was subsequently furnished :) Senator Mansfield asked if technical assistance would be made more effective if combined with capital investment, either Government or private. This is a very broad question and may best be answered by breaking down the technical assistance field into two categories: (1) technical assistance at the Government level as it relates to what may be described broadly as welfare functions and (2) technical assistance at the commercial level, whether governmental or private. The FOA has confined its technical assistance largely to the first category above. The great bulk of its technical assistance has been in the fields of public administration, education, health and sanitation, agricultural experimentation and extension, and public-works planning on the fiscal-as distinguished from the technical-level. This type of technical assistance is designed to improve the economic and social well-being of the peoples of the countries affected and to create a better climate for the free play of private enterprise. It may be said to be a condition precedent to large-scale capital investment rather than a com- plement to it. There appears to be no need to associate such technical assistance with specific capital investment, public or private. The second category above in fact has bulked historically much larger than the first and is normally associated directly with capital investment, Govern- ment or private. United States private firms, as a normal part of their foreign business, have been extending this type of technical assistance abroad for many decades. United States engineering and economic consultants have been em- ployed very extensively by foreign governments and foreign private entities for this purpose. Such private engineering and economic consultants normally are better organized to extend this type of technical assistance than United States Government agencies. In fact, the FOA as a matter of practice has employed private consultant firms for technical assistance to enterprises, public or private, of a commercial nature. The Export-Import Bank, too, has normally insisted TECHNICAL ASSISTANCE PROGRAMS 73 that its borrowers employ private United States contracting firms and consultant firms to construct and operate (the latter usually for a limited time) enterprises abroad, public or private, to which the Export-Import Bank has extended credit assistance. The Export-Import Bank frequently includes the United States dol- lar costs of such technical assistance in the loans extended to foreign enterprises. In these cases, I should say that the technical assistance rendered is comple- mentary to the capital assistance extended and would be wasted were not capital assistance given simultaneously. On the other hand, the capital assistance extended would, in most cases, be ineffectual were it not for the United States technical assistance accompanying it. One of the reasons that the United States Government has urged foreign coun- tries to improve the climate for the investment of United States private capital is that such private capital investment usually carries its invaluable technical assistance with it. Senator MANSFIELD. The next witness will be Mr. Bradshaw Min- tener, Assistant Secretary, Department of Health, Education, and Welfare. Secretary Mintener, will you take the chair? STATEMENT OF BRADSHAW MINTENER, ASSISTANT SECRETARY, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, ACCOM- PANIED BY GERTRUDE GATES, COORDINATING OFFICER FOR INTERNATIONAL RELATIONS, AND ARTHUR OSBORNE, INTERNA- TIONAL HEALTH REPRESENTATIVE OF THE PUBLIC HEALTH SERVICE Mr. MINTENER. Mr. Chairman and members of the committee, we appreciate the opportunity to appear before your committee this morning in response to the invitation sent by Senator Mansfield to Mrs. Hobby, the Secretary of the Department of Health, Education, and Welfare. Appearing with me from this Department are representatives of the Office of the Secretary, the Public Health Service, the Office of Education, the Social Security Administration, and the Office of Vocational Rehabilitation. I would like to read into the record the report which you have re- quested concerning our activities in the multilateral and bilateral pro- grams, and then I will attempt to answer any questions which you and the committee might wish to ask us. We should also like to be as helpful as possible to your committee. And if we can be of service, we hope that you will call on us for any technical assistance that we can provide. INTERNATIONAL ACTIVITIES OF DEPARTMENT The Department of Health, Education, and Welfare has had many years of experience in international cooperation in the field of health, education, and welfare. Representatives of the many services of our Department at various times in past decades have been made avail- able to serve as consultants to governments and to international or- ganizations. Our Department is also primarily concerned with the multilateral programs of the United Nations, the affiliated specialized agencies and the Organization of American States. As the Department most concerned with people and the important services of our fields, our role is essential in the bilateral and multi- 74 TECHNICAL ASSISTANCE PROGRAMS lateral programs for furthering friendship and technical advancement among nations. Since 1939, the constituent organizations of our Department have supervised training programs for foreign nationals under the pro- visions of a series of Public Laws which authorized appropriations for a variety of training programs in our fields. A coordinating unit for international activities coordinates the work of the constituent organizations of the Department. It is responsible to the Secretary of the Departmental Council. The unit consists of a coordinating officer, a senior staff officer, and their secretaries. The unit is responsible for bringing to the attention of the Secretary of the Department matters concerning international activities which have departmentwide impact or which by their nature should be brought to the attention of the Secretary. In each of the constituent organizations there is an international office which directs and supervises the international activities of the constituent organization and gives direction to the service activities. of international technical assistance programs in cooperation with the agency having primary responsibility. The international activities and functions of our Department may be described in general as: 1. Membership on interdepartmental committees organized by the Department of State for the formulation of foreign economic and social policy relating to health, education, social security, vocational rehabilitation and social welfare; 2. Participation in international organizations and conferences; 3. Cooperation with the Foreign Operations Administration in accordance with agreements under which the constituent organizations of the Department (a) recruit qualified personnel to carry out tech- nical programs in the FOA country missions; (b) give technical advice and consultation on request to country missions and to the technical services divisions of FOA; and (c) direct and supervise programs of technical training in our fields for foreign nationals of cooperating countries who are given the opportunity by FOA to receive specialized training in the United States; 4. Cooperation with the International Educational Exchange Serv- ice-IES of the Department of State in the exchange of persons programs, and particularly the teacher education and teacher ex- change programs; 5. Cooperation with the Department of State and FOA in directing the training programs for the Fellows of the United Nations and its specialized agencies of the World Health Organization, the United Nations Educational, Scientific and Cultural Organization, ILO. Senator MANSFIELD. What do you mean by "Fellows of the United Nations?" Mr. MINTENER. Students who come over here under the auspices of the United Nations to study in this country-Foreign Operations Administration technical assistance program: PROFESSIONAL SUPPORT FROM DEPARTMENT While administrative direction of the technical development pro- grams overseas is the responsibility of FOA, that Agency looks to the constituent organizations of HEW to cooperate in furthering the Y TECHNICAL ASSISTANCE PROGRAMS 75 programs by providing professional support as consultants in develop- ing country plans and programs; by recruiting technical personnel for FOA missions; by assigning commissioned corps officers of the Public Health Service to FOA on a reimbursable basis; by furnishing technical consultation to technicians in foreign missions working in our fields; and by assuming the responsibility for direction and super- vision of the training programs of foreign nationals in the United States who are here under the sponsorship of FOA and the UN Tech- nical Assistance Administration. The FOA bilateral technical assistance programs in health, edu- cation, rehabilitation, community development, and social welfare are operating in 37 countries. These developmental programs utilize the services of 686 technicians in our technical fields. There are in coun- try programs authorized posts for approximately 252 educationalists, 394 public health personnel, 35 social and child welfare officers, and 5 vocational rehabilitation specialists who are for the most part re- cruited for FOA by HEW. Senator MANSFIELD. Mr. Secretary, where do you use these 35 social and child welfare officers? Mr. MINTENER. Largely, I believe, in the South American coun- tries. If you want some more specific information, Senator Mansfield, I should be glad to get it for you. Senator MANSFIELD. I was just wondering. If we want any more information, we will contact you. You may proceed. Mr. MINTENER. These technicians in addition to working with governmental officials in planning country programs also develop, by means of pilot projects and training techniques, effective methods of work to meet the needs of each country in keeping with available re- sources. This combination-country planning and the development of techniques-which utilizes indigenous personnel and takes into account actual and potential national resources is effectively contrib- uting to the economic and social advancement in the countries in which the programs in our fields are of major importance. TRAINING OF FOREIGN NATIONALS IN UNITED STATES A further indication of the soundness of this approach is seen in FOA training programs for foreign nationals in the United States. Technical and professional persons who upon return to their respec- tive countries will hold key positions in their fields are given the opportunity for training in the United States. In fiscal year 1955, ap- proximately 1,500 training participants at an approximate cost of $3 million for tuition and maintenance grants will be given technical and professional training in the United States under the direction and supervision of HEW. These participants come from 36 countries. The two activities taken together contribute importantly to better health and improved educational opportunities in cooperating coun- tries and to further technical advancement. While the impact of these programs of health and education improvement throughout the world cannot immediately be measured they help to make possible the devel- opment of other aspects of technical assistance and the training of indigenous personnel. 1 76 TECHNICAL ASSISTANCE PROGRAMS There are also 172 fellows from the UN agencies studying in the United States under the supervision of HEW; three in education, 103 in public health, 56 in social welfare and maternal and child health, and 10 are working in the vocational rehabilitation field. TECHNICAL ASSISTANCE FUNDS ALLOCATED TO HEW Approximately $17 million have been allocated to HEW since fiscal year 1951 through 1954 under the provisions of the act for interna- tional development: 1951___ 1952___. $1,017, 372 | 1953. 2,659, 822 | 1954_--- $6,296, 905 6, 835, 269 An estimated $8 million will be available to HEW in fiscal year 1955 for salaries and other administrative costs for technical services including, the UN fellows, grants to the trainees of FOA, and for salaries and expenses of technicians in FOA public health programs in cooperating country missions. Senator MANSFIELD. This money, Mr. Secretary, comes out of the HEW appropriation, or is it transfer funds from other agencies? Mr. MINTENER. It is transferred from FOA, sir. There are at present 161 full-time positions in Washington and 170 Public Health Service Commissioned Corps Officers in 32 FOA coun- try missions—a total staff of 331 engaged in FOA bilateral interna- tional activities that are paid from FOA funds which are transferred by FOA to HEW for these programs. Financial support for HEW by FOA for its program in our fields is authorized by FOA on the basis of an agreement defining the scope of activity and responsibility which HEW will assume on behalf of FOA. For fiscal year 1955, FOA has authorized $914,020 to cover salaries and other agreed administrative expenses of HEW: Of these funds, $174,220 has been authorized for 32 positions and for adminis- trative expenses; $360,400 has been authorized for administrative salaries and expenses of 48 technical staff to give technical advice and consultation to 686 technicians in our fields now stationed in 37 coun- tries and to advise with the technical divisions of FOA; $379,400 has been authorized for salaries and expenses of 81 training positions to train 1,565 trainees of FOA cooperating countries; this amount in- cludes also $52,000 for 12 positions in the training programs for U. N. fellows. FOA has transferred to $2,688,110 to HEW to pay salaries and travel expenses for HEW technicians now in the field missions. All other technicians are carried on the FOA payroll. Also, funds in the amount of $2,958,636, to cover the training grants to foreign nationals have been transferred to HEW for payment in fiscal year 1955. The total amount of funds authorized by FOA for HEW in 1955 is $8,128,198. We estimate we shall expend $6,560,766, leaving approxi- mately $1.5 million for grants to foreign nationals whose application will be processed in fiscal year 1955 but who will not arrive in the United States until fiscal year 1956. PARTICIPATION IN MULTILATERAL PROGRAMS HEW participates in all of the important multilateral programs in our fields. Our Department strongly supports continued participa- TECHNICAL ASSISTANCE PROGRAMS 77 tion by the United States of the international multilateral programs of the United Nations and the Organization of American States- OAS: (a) The programs of U. N. and OAS represent a unified approach to global situations. (b) The programs of the United Nations and the OAS provide an effective method of identifying problems, of stimulating technical progress, of accelerating research, and of coordinating international action in the specialized fields in which the Department of Health, Education, and Welfare has particular interest. The multilateral organizations of primary concern to our Depart- ment are the United Nations Expanded Technical Assistance Program, United Nations International Children's Emergency Fund, United Nations Educational, Scientific, and Cultural Organization, Inter- national Labor Organization, World Health Organization, Organiza- tion of American States, Pan American Sanitary Organization, and South Pacific Commission. WORLD HEALTH ORGANIZATION HEW is primarily interested in the World Health Organization since the Public Health Service of HEW was one of the prime movers in the establishment of the World Health Organization in 1948 and some of the World Health Organization's leading officials have been recruited from HEW. The Surgeon General of Public Health Service serves on the delega- tion of the World Health Organization General Assembly and the United States member of the World Health Organization Executive Board and the United States representative on the Pan American Sanitary Organization Executive Committee have always been officers of the Public Health Service. Technical personnel of both the Pub- lic Health Service and Children's Bureau serve on committees of spe- cialists. The World Health Organization and the Pan American Sanitary Organization expend a substantial portion of their regular working budgets on technical assistance as part of their basic health programs since good health is a vital factor in economic development. The World Health Organization participates in the U. N. program of expanded technical assistance to member countries with funds allocated from the expanded technical assistance program by the U. N. Tech- nical Assistance Board. Likewise the Pan American Sanitary Organ- ization provides additional technical assistance with funds allocated for expanded technical assistance by the Organization of American States. The Public Health Service also receives and distributes technical materials from the multilateral organizations, and supplies these organizations with technical materials developed in the United States. The World Health Organization constitution provides that the Director General of the World Health Organization have direct access. to national health administrations therefore the Surgeon General of the Public Health Service has established direct communications with the World Health Organization and the Pan American Sanitary Organization. 59637-55-6 78 TECHNICAL ASSISTANCE PROGRAMS 1 UNITED NATIONS CHILDREN'S FUND The Chief of the Children's Bureau in the Department of Health, Education, and Welfare continues to be the United States representa- tive on the Executive Board of the United Nations Children's Fund. The United Nations Children's Fund was established in 1946 by the General Assembly of the United Nations for the rehabilitation of children and adolescents of countries who were victims of aggression and for child health purposes generally. Because of the United Na- tions Children's Fund, the United Nations has assisted governments to strengthen their permanent child health and welfare services and has aided programs for supplementary feedings, vaccinations against tuberculosis, provision of clothing, aid to maternal and child health centers, control of communicable diseases, development of safe milk supplies and the training of workers for maternal and child-care serv- ices. Since September 1950, emphasis has been directed to the needs of children in underdeveloped countries. UNITED NATIONS EDUCATIONAL, SCIENTIFIC, AND CULTURAL ORGANIZATION The Commissioner of Education is a member of the National Com- mission of the United Nations Educational, Scientific, and Cultural Organization and serves as a member of the United States delega- tion to the UNESCO General Conference. I might add that Dr. Brownell, the Commissioner of Education, re- cently attended the UNESCO Conference in Montevideo, last fall, when you will recall there was an important meeting there. The United Nations Educational, Scientific, and Cultural Organi- zation carries on important technical assistance programs, including fundamental education, rural education, and teacher education for its member nations, especially in the less developed countries. On re- quest, it provides special consultants to the various governments to help organize specific educational projects. The Office of Education serves as a clearinghouse for information on education matters, and staff members serve continuously on the United Nations Educational, Scientific, and Cultural Organization Commission projects. The De- partment of HEW, Office of Education, also nominates the delega- tion to the annual Public Education Conference held jointly by the United Nations Educational, Scientific, and Cultural Organization and the International Bureau of Education, and prepares the tech- nical papers for the Conference. INTERNATIONAL LABOR ORGANIZATION HEW officials participate in the formulation of United States policies affecting the International Labor Organization particularly those which are concerned with efforts to improve health, education, and social-security standards. Staff members also contribute services as special consultants and as participants in policy meetings in these matters. Social Security Administration officials and staff members have served on expert committees of the International Labor Organi- zation such as Social Security. TECHNICAL ASSISTANCE PROGRAMS 79 UNITED NATIONS SOCIAL WELFARE PROGRAM The Social Security Administration of HEW has carried an active role in development of the U. N. social welfare program. Assistance has been provided in developing standards for selection and training of fellows in strengthening the field services to less developed coun- tries and in advising in research projects of most practical value in advancing programs in the various countries asking for technical aid in this field. Over 400 experienced officials from other countries have visited the United States under this program observing in the field of com- munity organization, social welfare administration, child welfare, public assistance, social work, education, nutrition, vocational rehabili- tation, and other fields. MULTILATERAL TRAINING PROGRAMS Training programs for fellows from the U. N., its specialized agencies and the Organization of American States who study in our fields in the United States are referred to us by the International Educational Exchange Service of the Department of State which receives the applications from the U. N. fellow and distributes them to the departments of Government having responsibility for the re- spective programs. However, FOA makes administrative funds avail- able to the departments of Government participating in this program. The World Health Organization refers its fellows directly to Public Health Service and the Children's Bureau. All of the programs described above are financed by the U. N., the affiliated specialized agencies and the Organization of American States regular contributions of their member states and from addi- tional funds made available under the expanded technical assistance program by the Technical Assistance Board of the U. N. The United States technicians in FOA country missions and the resident repre- sentative of the U. N. or other representatives of specialized agencies consult together with government officials in planning country pro- grams. The appropriate government officials of the cooperating countries are thereby able to review the total program needs of their countries and determine which programs are of paramount concern. The FOA maintains a continuous cooperative relationship with the representatives of the U. N. who regularly consult together in the development of technical assistance programs throughout the world. The multilateral agencies in underdeveloped countries coordinate their country programs with officials of FOA. That completes our statement. Senator MANSFIELD. Thank you, Mr. Secretary. RECRUITMENT AND ORIENTATION OF UNITED STATES TECHNICIANS Could you tell this committee how techniciains are trained for their jobs? Are they briefed and trained before they are sent overseas? Mr. MINTENER. Mrs. Gates will answer that. Senator MANSFIELD. Will you give your name and title for the record, please? 80 TECHNICAL ASSISTANCE PROGRAMS Mrs. GATES. Gertrude Gates, coordinating officer for international relations in the Office of the Secretary of Health, Education, and Welfare. May I have the question again? Senator MANSFIELD. Could you tell this committee how technicians are recruited and trained for their jobs? Are they briefed and trained before they are sent overseas? Mrs. GATES. The recruitment which we do for FOA is by request. The FOA is responsible for the orientation of the technicians who go overseas except that the Public Health Service sends its Commission Corps officers to FOA missions overseas. And I think Dr. Brady of the Public Health Service could tell you better than I could the extent of the orientation in that respect. No, it will be Dr. Osborne. Dr. OSBORNE. Arthur Osborne, the International Health repre- sentative of the Public Health Service. The Public Health Service officers that go overseas have been train- ed through their experience in the Commission Corps for the jobs which they expect to hold. Their orientation as far as their overseas assignments are concerned, that is, with regard to such problems as their relationship with host governments and the people with whom they are to work is done by the FOA. Senator MANSFIELD. Then I would assume that as far as all activi- ties connected with the FOA are concerned, that the FOA has direct responsibility for orientation courses. Dr. OSBORNE. That is right, sir. Senator MANSFIELD. Mrs. Gates, does the HEW handle Fulbright and Smith-Mundt scholarship trainees, or do those funds come from the State Department? Mrs. GATES. They come from the IES of the Department of State. We today handle the teacher education and the teacher exchange pro- grams. Until last year we had some of the leader programs. Now, I think none of the leader programs are in the Office of Education, those are all handled by other organizations. UNITED STATES ADVANTAGES FROM U. N. HEALTH PROGRAM Senator MANSFIELD. Doctor, if I may ask you a question again, what advantages do we derive from participation in multilateral health programs of the U. N. and other international agencies? Dr. OSBORNE. That is a very long question to answer, sir. It de- pends entirely upon the approach you would like to have made. Our own individual service benefits from our association with the World Health Organization in that we do gain for our commissioned offi- cers experience overseas with problems which do not necessarily arise. in this country, but which might arise at any time. For example, in some of the health programs-not too long ago the flood in Pakistan was very heavily supported by Public Health per- sonnel-I am sorry, I am off on the wrong track, that is not a multi- lateral-the vaccination programs, such as the BCG programs that are sponsored by WHO is an example of our gaining experience in a project which we ourselves have not gone into very thoroughly as yet, but which we may. Countrywise, the World Health Organiza- tion is able to tap areas, for research purposes, which we ourselves can- TECHNICAL ASSISTANCE PROGRAMS 81 not do. Work is being done by the World Health Organization on rabies. In countries where this disease is highly endemic the WHO is obtaining a lot of useful knowledge for our own programs against rabies. Some of the vaccines that have been developed have been developed through research in other countries. But we as a country benefit in any case. In addition to research benefits such as these, our country receives from WHO, and its epidemiological intelligence network, information on the presence and prevalence of communicable disease which enables us to prevent the importation of such diseases as smallpox, cholera, plague, typhus, and yellow fever. This is particularly important now in these days of rapid travel. The eradication or control of disease at its source, the long-term aim of WHO, is however the ideal to be sought since any barrier we can erect consistent with commerce and travel can be penetrated. Through WHO our drug industry benefits under the program of in- ternational standards of antisera and biologicals, and the program on nonproprietary names. Our trade in general benefits from the increase in economic well- being in the underdeveloped countries where WHO help is most ef- fective. Our association with foreign colleagues, who hold high posi- tions in government, in the friendly atmosphere of the conference room serves to impress upon them our humanitarian aims. Our technical people both governmental and private serve on expert committees and the work of WHO on addiction producing sub- stances has been of great help in solving our own problems in this field. Senator MANSFIELD. Is it safe to assume that because of the world- wide participation of Public Health Service doctors who are in the Department of Health, Education, and Welfare, there are many bene- fits which this country receives in return because of the experience gained by these doctors who are sent out? Dr. OSBORNE. Yes. Senator MANSFIELD. Thank you, Doctor. Thank you, Secretary Mintener. Felix Ě. Wormser, Assistant Secretary for Mineral Resources, Department of the Interior. STATEMENT OF FELIX E. WORMSER, ASSISTANT SECRETARY FOR MINERAL RESOURCES, DEPARTMENT OF THE INTERIOR Mr. WORMSER. Mr. Chairman, I am delighted to be here. I recog- nize that the task of this committee is exceedingly important, and I want to assure you of the desire of the Department of the Interior to cooperate fully with your committee. The Department of the Interior has been giving technical assistance to underdeveloped countries on a modest basis for many years. It is not a new activity in the Department. For many years it has been the policy of this Government to extend a helping hand to friendly foreign nations in technical matters relating to the development of natural resources. Advice and counsel of our technical experts always has been freely given to visiting officials concerned with resource problems in their native lands. At times the services of our experts have been made available to foreign governments for duty abroad. 82 TECHNICAL ASSISTANCE PROGRAMS BACKGROUND OF DEPARTMENT ACTIVITIES The Department of the Interior has not only been engaged in tech- nical assistance activities for many years but it is rendering technical assistance to foreign countries through multilateral channels as well as through various governmental programs in addition to that being conducted by the Foreign Operations Administration. Our work in the various multilateral fisheries organizations is one example, while our work for other Government departments, such as the Atomic Energy Commission and in conjunction with the stockpiling of stra- tegic and critical minerals are other examples. With this background of cooperation the Department of the In- terior was well prepared to play a major role in the technical programs that have been emphasized by the Government since 1939. The Department, through the Bureau of Reclamation, Geological Survey, Bureau of Mines, and Fish and Wildlife Service, has for- mally participated in governmental technical assistance programs since the passage of the act to authorize the President to render closer and more effective the relationship between the American Republics, approved by the Congress on August 9, 1939. With the passage of Public Law 402 entitled "United States Information and Educational Exchange Act of 1948", approved by the Congress on January 27, 1948, the Bureau of Land Management and the Office of Territories. of the Department of the Interior also proffered their techniques and facilities for technical assistance and the training of foreign nationals. Following the issuance of Executive Order 10458 on June 1, 1953, the responsibility for the technical assistance program was trans- ferred from the Secretary of State to the Director for Mutual Security. By letter of June 1, 1953, to the heads of departments and agencies, the President established the policy to govern cooperative relation- ships in the conduct of the foreign economic and technical assistance- programs. To insure the carrying out of this policy, broad agree- ments were reached between the Foreign Operations Administration and various executive departments, one of which was the Department of the Interior. The memorandum of agreement between the Foreign Operations Administration and the Department of the Interior set down the nature of relationships and procedures to be followed in effecting the cooperation requested by FOA. This agreement covers in broad terms the role the Department might play in its recognized fields of competence in natural resources development and conserva- tion-minerals, fuels, geology, water resources development, fish and wildlife, mapping, public land management, and territorial admin- istration. FOA recognizes the technical facilities and competence in those fields in which the Department has technical responsibilities under its domestic program. ASSISTING FOA By virtue of its responsibilities, program, and activities, the De- partment of the Interior is called upon from time to time by FOA to assist its technical assistance program in four ways: 1. The Department is available for technical advice and consulta- tion. 2. The Department undertakes field projects for FOA. TECHNICAL ASSISTANCE PROGRAMS 83 3. The Department assists FOA in the training of foreign nationals. 4. The Department assists FOA recruitment of technicians. Perhaps a few general statements about each of these would be helpful. TECHNICAL ADVICE AND CONSULTATION First, with reference to technical advice and consultation. The Department possesses a wealth of knowledge and technical personnel uniquely qualified to assist in the formulation and execution of technical assistance programs in the natural resources field. The Department is anxious to make its experts available to insure the sound formulation and execution of this Government's technical assistance program. The Department encourages consultation by FOA with its experts. EXECUTION OF FIELD PROJECTS Second, with reference to the execution of field projects in foreign countries. The bureaus of the Department are periodically looked to by FOA for the conduct of a phase of technical assistance activities in certain underdeveloped countries. Under such circumstances, FOA contracts with one of our bureaus to undertake a field project for which that particular bureau is uniquely qualified and which is definable and limited as to scope, time, and cost and which involves more than personal services. In other words, FOA requests a given bureau rather than its employees to assume responsibility. Thus, the bureau will exercise professional and technical judgment and authority and will support the project with professional and technical backstop- ping. In each of the fields of competence of the Department, careful screening is done to insure that bureaus undertake only those projects which may not be readily done by private enterprise or better done by some other Government department. The Department recognizes and endorses the fact that certain as- pects of the FOA program may best be conducted on a contractual basis with the utilization of another public or private institution. Personnel of the Department assigned to special projects covered by agreements between FOA and the bureau concerned are responsible to the United States Operations Mission on program and policy de- velopment and changes, and on administrative matters and with regard to personal conduct and public relations. FOA regulations apply on such matters. Almost always, these activities are technical in nature and the Department's employees assigned to the projects work with and advise engineers, geologists, and their technologists of the counterpart bureau of the host government. The facilities and technical ability of the entire Department are thus available to the technologists in the field for backstopping purposes. Therefore, the advice and training given to the host government represents the latest techniques in the development and utilization of the natural resource under investigations. The assistance program usually is modest in the number of technologists involved, whose purpose is to advance development programs only to the point where the host gov- ernment or private capital can undertake exploitation. 84 TECHNICAL ASSISTANCE PROGRAMS There are certain areas abroad which require the services of ad- visers to the FOA missions and host governments. In some cases, personnel of the Department are made available and transferred to the Foreign Operations Administration and are wholly responsible to that organization. TRAINING OF FOREIGN NATIONALS Third, with reference to the training of foreign nationals. The essential ingredient of a successful technical assistance pro- gram in no small measure can be found in the existence of trained and qualified personnel in the host country to work with United States personnel and to carry on after United States personnel have been withdrawn. Thus, the training of foreign nationals upon request of FOA in the technical installations of the bureaus is another phase of the cooperation given by the Department to FOA. These pro- grams vary in length of time from a 2- or 3-day visit by a group of mining or reclamation engineers; for example, to a 12-month grant to individuals trained in their homelands but requiring the experience and know-how found in the United States. During the period 1952-54, 809 foreign nationals were received by the bureaus as ob- servers and trainees. ASSISTANCE TO FOA RECRUITMENT Fourth, with reference to assistance to FOA recruitment. Because of the Department's operation and relationship with non- governmental groups, including various segments of our private econ- omy-for example, minerals, fuels, water resources, and fisheries-the Department is in a position to assist FOA by locating qualified tech- nical personnel for certain positions which FŎA desires to fill. Hence, upon the request of FOA, the Department assists in the recruitment of qualified personnel for certain positions for which FOA desires a candidate. FOA-INTERIOR RELATIONS Under the general pattern of relationships thus described, the first step upon conclusion of the general agreement between FOA and the Department was to survey the activities being conducted by personnel of the bureaus operating under criteria which existed prior to the con- solidation of the economic aid, technical assistance, and military aid programs in FOA. The first step was to sort out the project and non- project personnel in order to reduce the projects to a contract and to transfer nonproject personnel to FOA rolls. This required consul- tations between the Department and FOA headquarters in Washing- ton and FOA field missions. At the time this procedure was undertaken, there were 162 employees of the Department assigned to 28 countries. Of this number, 47 are in the process of transfer to FOA from the Bureaus of Reclamation, Land Management, and the Fish and Wildlife Service as falling in the nonproject category, and, hence, transferable to FOA as being activities for which that organization should be responsible rather than the bureaus of this Department. Those projects for which the bureaus are responsible are covered TECHNICAL ASSISTANCE PROGRAMS 85 by agreements between FOA and the bureau involved. The execution of contracts has virtually been completed between FOA and the bu- reaus concerned. At this point, the principal bureaus engaged in the conduct of projects overseas for FOA are our two mineral bureaus Geological Survey and the Bureau of Mines-with the Bureau of Reclamation having a few projects in addition. DEVELOPMENT OF NATURAL RESOURCES The Government's technical assistance program is frankly a case of enlightened self-interest. Certainly we can agree that efforts that contribute to the unity of the free world and the advancement of free world prosperity are justified from the viewpoint of national well- being. But we should not lose sight of the fact that technical assist- ance can also contribute important material gains. The United States already is heavily dependent on foreign sources for supplies of strategic raw materials. Expanding population and industrial ac- tivity are increasing domestic demand for these materials and multi- plying the problems of importation. Thus to the extent that technical assistance fosters wealth-producing raw material industries in foreign lands, it automatically makes available in ever-increasing quantities the raw materials so vital to our security and national well-being. One of the most effective ways by which the United States can accelerate the economic development of an underdeveloped country is to help the government of that country stimulate, encourage, and give direction to an orderly development and wise use of the country's natural resources. To a considerable extent the prosperity and standard of living of any country is directly related to the way in which it makes use of its natural endowments. To many of our friends abroad, the development of resources is looked upon solely as a problem of capital. How do we get the money? Money, of course, is necessary, but before capital can be profitably invested in resource development, the government itself must not only write the kinds of laws which will attract capital and also enrich the country, but, as we have learned in the United States, the Government itself must perform certain basic functions which precede or supplement activities of private enterprise. These in- clude such tasks as the collection of basic data concerning water, topographic and geologic mapping, geologic research, direct explora- tion to obtain a more adequate appraisal of the Nation's mineral resources, and the administration of public lands. To help the governments of underdeveloped countries organize, train personnel, and inaugurate such programs is one of the objectives of the technical assistance program, one with which the Department of the Interior has considerable concern. We are convinced that such Government assistance leads to increased investment and operation by private enterprise. We believe, too, that it serves to strengthen those elements of government which we identify as democratic. Senator MANSFIELD. Thank you, Mr. Secretary. 86 TECHNICAL ASSISTANCE PROGRAMS SHORTAGE OF RESOURCES I note that you state that the United States is already heavily de- pendent on foreign sources for supplies of strategic materials. I understand also that something on the order of 128 of your personnel are now working under the auspices of FOA in various parts of the world on mineral resource projects, reclamation projects, and the like; is that correct? Mr. WORMSER. Yes. Senator MANSFIELD. Do you attempt to gear your technical assist- ance program with the relevance of raw materials in which we have a short supply? Mr. WORMSER. The initiative, is from FOA. We are merely an instrumentality by which they achieve whatever objective they seek, whether it is a water resource or mineral resource or mapping project. The initiative doesn't come from us. Senator MANSFIELD. The policy is laid down by FOA and your people carry it out? Mr. WORMSER. Yes, sir. We carry it out. Senator MANSFIELD. How much of our strategic material resources are in short supply on a percentage basis? Let me put it another way. Are we self-sufficient in mineral resources in this country? Mr. WORMSER. We are deficient in a great number of minerals that we require for both our defense and our commerce. Senator MANSFIELD. Could you give the committee a percentage figure as to just how deficient we are in that category? Mr. WORMSER. I should be very glad to submit a memorandum for the committee, sir, giving you that information in more accurate detail than I can by relying on my memory. Senator MANSFIELD. The committee would appreciate that, and we would like you to break down on that shortage on a mineral-by-mineral basis, if you will. Mr. WORMSER. We can do that very nicely. (The following information was subsequently furnished:) The dependency of the United States upon foreign sources of supply for minerals and metals varies from time to time and is subject to sharp and violent change brought about by emergency requirements, the exhaustion of existing sources, the discovery of new sources, the substitution of cheaper for more expensive materials, the development of synthetics, and other factors influencing cost and availability. The following table contains a series of comparisons of domestic production to apparent domestic consumption of a number of metals and minerals including all of those on the current list of strategic and critical materials for stockpiling, and several others considered to be of major importance to the United States economy. Data are for 1952 and 1953, the latest years for which complete information is available. Percentages are approximations. Secondary figures are included where applicable. It should be noted that the materials on the list of strategic and critical materials for stockpiling are stockpiled because the United States does not have sufficient productive capacity to meet wartime requirements. They are stockpiled in order to decrease and prevent, wherever possible, a dangerous and costly dependence of the United States upon foreign nations for supplies of these materials in times of national emergency. TECHNICAL ASSISTANCE PROGRAMS 87 United States self-sufficiency in metals and minerals on current list of strategic and critical materials for stockpiling [Domestic primary and secondary production expressed as a percentage of apparent consumption, 1952-53] Commodity 1952 1953 Commodity 1952 1953 Percent Percent Percent Percent Aluminum 88 82 Lead 60 62 Antimony (primary only).. 25 13 Magnesium 102 106 Asbestos: Manganese ore: Amosite. 0 0 Battery grade. 36 42 Chrysotile.. 17 18 Chemical grade. 0 0 Crocidolite. 0 0 Metallurgical grade. 6 7 Bauxite: Mercury 16 14 Metallurgical grade. 32 26 Mica: Refractory grade. 1 25 1 25 Muscovite block, good Beryl.. 1 20 120 stained and better. 15 Bismuth 1 50 1 50 Muscovite block, stained. Cadmium. 136 1 31 Muscovite film…. Celestite 0 0 Muscovite splittings. Chromite: Phlogopite splittings. Chemical grade... Metallurgical grade. Refractory grade. Cobalt. 15 Columbite. Copper Corundum Diamonds, industrial. Fluorspar: Acid grade Metallurgical grade. 75 ONOKOKO0 NN 2 * eoderoso 5 0 14 Molybdenum Nickel.. Platinum group: Iridium. 114 0 Platinum 73 Quartz crystals. 0 Rare earths.. 0 Sapphire and ruby 1 10 Selenium.. KOOOOOD LOOKI 16 2 0 0 0 119 7 74 22 0 93 1 10 cmoocar a089 3 0 0 0 7 79 15 84 91 57 44 Talc, steatite block. 0 0 52 43 Tantalite. 0 0 Graphite: Tin... 37 32 Amorphous lump. 0 0 Titanium sponge. 1 100 1 100 Crucible grade. 0 0 Tungsten. 30 24 Lubricating and packing Vanadium. 1 100 1 100 grade.. 1.90 1.90 Zinc.... 74 60 Jewel bearings: Other than vee. 15 Vee--- 15 er er 19 19 1 Estimate. United States self-sufficiency in other materials considered to be of major importance but not currently stockpiled [Domestic production expressed as a percentage of apparent consumption, 1952-53] Commodity 1952 1953 Commodity 1952 1953 Percent Percent Percent Percent Barite. 98 76 Gypsum. 73 72 Boron minerals and com- Iron ore.. 97 97 pounds.. 121 124 Petroleum including natural Bromine and Bromine in gas liquids. 94 93 compounds.- 102 102 Phosphate Rock.. 116 118 Clays.. 100 100 Potash. 96 105 Coal: Salt.. 102 101 Anthracite. 115 111 Sulphur. 130 124 Bituminous- 111 107 Senator MANSFIELD. Thank you very much. The next witness is Acting Secretary Marshall Smith, of the De- partment of Commerce. Secretary Smith. Proceed, Mr. Secretary. 88 TECHNICAL ASSISTANCE PROGRAMS STATEMENT OF MARSHALL M. SMITH, ACTING ASSISTANT SECRE- TARY OF COMMERCE FOR INTERNATIONAL AFFAIRS, ACCOM- PANIED BY CARL GIBBONEY, DIRECTOR OF FOREIGN ECONOMIC DEVELOPMENT STAFF, DEPARTMENT OF COMMERCE Mr. SMITH. I will address myself to the subject: The Relationship of the Department to Technical Assistance Programs. The experience of the Department of Commerce in foreign tech- nical assistance goes back many years. The programs under which foreign technical assistance activities have been carried out have had many titles. The National Bureau of Standards and the Bureau of Public Roads have been engaged in this kind of work for more than 30 years. Most of the nations of the world at one time or another have sent their nationals to the National Bureau of Standards for study and experience. In 1924 the Bureau of Public Roads was instrumental in bringing 40 road officials and engineers from Latin American countries for observation of highway construction and maintenance in the United States. The following year the Pan American Road Congress was organized and has continued since that time. In 1947 the Bureau of Census began a program of training students who were later to become leaders in their own countries in the 1950 Census of the Americas. Since 1947, 300 foreign technicians representing 45 foreign countries have received training at the Census Bureau. Each of the bureaus of the Department has been engaged in some form of foreign technical assistance work for periods averaging 10 or 12 years. The principal objective of the technical assistance programs has been to increase the level of economic activity in recipient countries and thus raise the level of living of their populations. The Depart- ment's efforts in the field of foreign trade and investment promotion have been a very effective type of technical assistance. International trade and foreign investments are very effective means of not only exchanging technical know-how but also provides the production equipment and capital which are essential to the utilization of modern techniques. The development of these trade promotional programs in the Department of Commerce during the 1920's is well known. These efforts, which have been continued on a somewhat reduced level, are now being expanded. The traditional close relationship of the Department of Commerce to the business and industrial community of the United States has facilitated the participation of United States private enterprise in the development of foreign countries. FOA-COMMERCE RELATIONS The Department did not look upon the establishment of the Techni- cal Cooperation Administration in 1950 as a really new undertaking but rather an enlargement and intensification of the kind of efforts it had been engaged in for a number of years previously. The Tech- nical Cooperation Administration and the ECA and MSA programs called upon the services of the Department and its various bureaus to carry out specialized activities under the overall direction of these agencies. The previous experience of the Department of Commerce in this kind of work, along with similar experiences of other special- ized agencies of the Government, made it possible for these newly TECHNICAL ASSISTANCE PROGRAMS 89 created organizations to make rapid strides in carrying out the overall program with which it was charged. Previous to the establishment of the Foreign Operations Adminis- tration, President Eisenhower, on June 1, 1953, sent a letter to the Secretary of Commerce and other departmental heads in which he stated: The Director of the Foreign Operations Administration should take full ad- vantage of the advice and assistance available in other agencies. He should coordinate his operations with related operations in other agencies. At the same time, I expect the Director of the Foreign Operations Administration to maintain full control and direction over all foreign economic and technical assistance programs rather than turn this responsibility over to other agencies. DEPARTMENT'S COOPERATION IN PROGRAM The Department immediately expressed its willingness to cooperate with the FOA. In June 1954 a memorandum of agreement between the Department of Commerce and the Foreign Operations Adminis- tration was signed by the head of each agency. This agreement covered the relationships between the two agencies in programs in- volving the sending of United States technicians abroad and in bring- ing foreign nationals to this country for training. Extended discussions have been carried out between the Department and FOA with the view of establishing effective working relation- ships in carrying out the provision of the 1953 and 1954 Mutual Security Acts for the promotion of international trade and foreign investment. The memorandum of agreement dealing with technical assistance provided for consultation with the Department on FOA policies and programs that relate to the responsibilities or fields of interest of the Department. Although the agreement provides that procedures will be worked out to insure consultation on programs and projects, the Department has not been called upon to contribute as much as it is believed could be contributed in this matter. The agreement also provides that foreign activities involving De- partment of Commerce bureaus under the FOA program would be carried out under a contractual basis and be known as special proj- ects. Some of the foreign activities in the fields of industry and transportation which had been started under the TCA program were activities which FOA wished to carry out without assistance from the Department of Commerce. Personnel engaged in these activities. which were not considered to be special projects were transferred directly to FOA from the Department of Commerce. The decision was reached by FOA on the basis that these latter activities involved policy determinations in program building. CURRENT PROJECTS IN COMMERCE DEPARTMENT THE CONTRIBUTION OF THE DEPARTMENT TO THE PROGRAM Several bureaus of the Department are now engaged in carrying out special projects abroad under the FOA program. The Bureau of Census is conducting 5 special projects in 5 countries and 1 regional project involving more than 1 country. The Civil Aeronautics Administration is conducting 15 special projects in 15 different coun- 90 TECHNICAL ASSISTANCE PROGRAMS tries and 1 regional project covering a number of countries. The Bureau of Foreign Commerce is carrying out 3 special projects in 3 different countries; the Coast and Geodetic Survey, 1 project involv- ing 1 country; and the Bureau of Public Roads, 8 special projects involving 7 countries. The Office of Technical Services provides in- formation on specific industrial techniques upon request from coun- tries cooperating with FOA. All together the Department is con- ducting 34 special projects in 24 foreign countries. These projects are being carried out by Department of Commerce personnel who are paid by funds transferred to the Department by FOA. The various bureaus involved provide the necessary technical direction. The Bureau of Public Roads is also involved abroad in non-FOA foreign activities. It is working with the Ethiopian Government in connection with a loan from the International Bank for Reconstruc- tion and Development, and is concerned with the United States Gov- ernment's participation in the Inter-American highway program. TRAINING FOREIGN NATIONALS The FOA-Commerce agreement also provides that the Department of Commerce will, when requested by FOA, furnish facilities for training foreign nationals brought to this country as a part of the technical assistance program. During the fiscal year which ended July 1, 1954, 10 bureaus of the Department provided specialized train- ing for a total of over 500 foreign nationals. This training involved such basic work as census and statistical studies, training in highway techniques, aviation development, ocean shipping, market and indus- trial development. Most of the techniques and skills of the Depart- ment of Commerce are needed in the development of other countries. The Department is glad to make its services available in this manner. SERVICES PROVIDED TO BUSINESS The Department has continued to provide services to business in international trade and foreign investment work with funds made available by direct appropriation to the Department. When there has been opportunity, the Department has also assisted the FOA in carrying out the responsibilities for similar work as authorized in the Mutual Security Act. The Department has utilized information available from both the Foreign Service and the Foreign Operations Administration. In spite of the primary responsibility of the De- partment for this field of activity, it has refrained from duplicating activities being carried out by FOA. The Department of Commerce has been designated by the President to carry out the responsibilities of section 416 of the Mutual Security Act of 1954 for the promotion and development of travel by citizens of the United States to countries receiving assistance and travel by citizens of such countries to the United States. Contacts are being maintained with international organizations concerned with the pro- motion of travel in order to reduce barriers to travel such as customs and visa requirements. Foreign countries are also being assisted in developing private programs for promoting travel of United States citizens to their countries. TECHNICAL ASSISTANCE PROGRAMS 91 CRITICISMS OF PROGRAM It is our view that through technical assistance we can help the citizens of other nations to help themselves. This we believe to be a fundamental concept in a technical assistance program. We also be- lieve that by and large the technical assistance work undertaken in connection with the ECA and MSA programs and the programs undertaken by the TCA and by FOA have made and are making a valuable contribution to the development of underdeveloped countries. We do believe that technical assistance must be considered as a long- term program and to be really successful must be carefully conceived, it must deal with specific objectives, and be jointly developed with the country requesting such assistance. However, many of the technical assistance projects have often been hastily drawn up without adequate consideration of the objectives of the United States in the programs and without sufficient evaluation of the ability of the recipient country to utilize the technical infor- mation. This haste has been due to a considerable extent to the fact that appropriations for this work are made on an annual basis with no assurance of the continuance of the program, which is necessary for sound planning and execution. Responsibilities for the operation of the technical assistance pro- grams have been carried out by temporary agencies which inevitably do not possess the experience that permanent agencies have gained in such technical fields over a long period of years. SUGGESTED IMPROVEMENTS We recognize the need for centralized planning of the technical assistance program in line with the foreign policy objectives of the United States. We believe that the newly created Council on For- eign Economic Policy and the National Advisory Council on Inter- national Monetary and Financial Problems should be utilized in de- veloping overall program policies. It seems clear that there is a continuing need for central coordina- tion and administration in Washington of technical assistance pro- grams, which also applies to field operations. We believe this sort of an organization would permit the full utilization of the permanent agencies of Government in the planing and execution of programs. This should insure full utilization of the specialized skills avail- able in the permanent agencies of Government. Duplication of skilled personnel is not only a costly matter but it is also difficult to recruit personnel whose competence is equal to that of experienced personnel in the permanent agencies. In general, we believe that our foreign assistance program should put greater emphasis upon technical assistance and relatively less upon economic grants in aid. We also are of the opinion that the responsibilities for private trade and investment promotion, for tech- nical assistance in industry, transportation, business statistics, and technological developments should be centered in the Department of Commerce which has a long-time background in this general field. 92 TECHNICAL ASSISTANCE PROGRAMS THE RELATIONSHIP OF THE PROGRAM TO THE DEVELOPMENT OF FOREIGN MARKETS FOR UNITED STATES GOODS The thesis that as friendly countries increase the level of economic activity they become better customers is sound. An effective technical assistance program increases the flow of international trade both ways. It creates a demand for the import of production goods into under- developed countries and increases the supply of raw materials and manufacturers for export from the same countries. When a United States technician goes abroad to assist other coun- tries in the solution of their problems he is, in effect, a salesman for United States goods and equipment. This is true whether he be in the field of industry or transportation or in the field of agriculture. I am not suggesting that the basic purpose of a foreign technical assistance program should be the development of foreign markets for United States goods. But I do suggest that it is something we should keep in mind in our own self-interest while we are assisting other na- tions to raise the level of living for their people and create conditions for a sound and lasting peace. Senator MANSFIELD. Thank you, Mr. Secretary. TRANSFER OF PERSONNEL Do you have any of your personnel from Commerce working in the FOA organization? Mr. SMITH. Yes. Senator MANSFIELD. When such people are transferred, do they lose their rights in the Department of Commerce or are they loaned on a permanent basis? Mr. SMITH. There are both types of assistants. Senator MANSFIELD. You do have some who come back to the De- partment of Commerce after they finish the job in the FOA? Mr. SMITH. Right. TEMPORARY VERSUS PERMANENT ORGANIZATION Senator MANSFIELD. I note that you say on page 7 of your state- ment: Responsibilities for the operation of the technical assistance programs have been carried out by temporary agencies which inevitably do not possess the experience that permanent agencies have gained in such technical fields over a long period of years. Is the committee to assume from that statement that you think the permanent old-line departments of Government are more capable of carrying out that technical assistance program, at least in some fields than the present temporary FOA organization. Mr. SMITH. No, Senator, that wasn't the point. What we are really thinking about here is that the technical aspects of the program have to be dealt with by qualified technicians and the inference is that there should be no duplication from the operation standpoint of the technical competence. Senator MANSFIELD. I see. TECHNICAL ASSISTANCE PROGRAMS 93 HASTILY DRAWN UP PROJECTS You state also on the same page, the top of the second paragraph: However, many of the technical assistance projects have often been hastily drawn up without adequate consideration of the objectives of the United States- and so forth and so on. What are some of these projects which in your opinion were too hastily drawn up? Mr. SMITH. I would like to give you some examples which we be- lieve fit in the situation. Under the technical assistance programs, our Government has agreed to supply technical assistance for the establishment or the en- largement of state-owned industries. We recognize that there may be conditions under which assistance would be warranted, but it is our opinion that further study could have perhaps provided alterna- tive methods of rendering assistance which would be more in line with the United States objective of strengthening our private enter- prise system. Furthermore, there is a basis for doubt as to whether the govern- ments of many of the underdeveloped countries possess the skills to adequately manage some of the industrial enterprises which they are anxious to develop. This is a question of judgment really in a given technical field. We frequently hear from foreign countries, particularly the underdeveloped ones, that they would like to en- gage in the production of some basic commodity, such as, for ex- ample, steel. This is an ambition which they generally share, but it is necessary to take into account not only the availability of the raw materials, but also the availability of markets. So it takes a long time really to determine whether a given industrial project should be undertaken or not and 1 year's time is really not sufficient to give proper evaluation to such problems in all cases. Senator MANSFIELD. Now, Mr. Secretary, what countries did you have in mind where such projects may have been undertaken? Mr. SMITH. I would like to ask Mr. Gibboney here if he would care to mention any specific projects. Senator MANSFIELD. Would you give your name and position to the reporter? Mr. GIBBONEY. Carl Gibboney, Director of Foreign Economic De- velopment Staff. I think this matter of our assistance of the development of state- owned industries is one in which we face in many countries, and I don't believe that the point is better made by selecting special ones, because it might indicate beyond our desire to criticize a particular country. I think that Mr. Smith has indicated that we haven't been skillful enough or patient enough and used enough time to find out how we can help them in their industrial developments without join- ing them immediately in the development of state-owned industries. But included in this would be Pakistan and Iran. It would be true in many countries, but not in this context that we are thinking about, that is, in terms of power developments. But in those particular countries as examples, I think we have assisted in the development of industries which normally we look at as private enterprise. 59637-55-7 1 94 TECHNICAL ASSISTANCE PROGRAMS : Again, I want to point out, as Mr. Smith said, that this was not a matter of black and white. It was a matter of judgment. We feel further consideration might have found other means. PROJECTS IN RELATION TO FOREIGN POLICY Senator MANSFIELD. Have you considered the possibility that ap- proval of these projects which you find some degree of fault with may have been projected in line with the objectives of American foreign policies; that is, in the strengthening of the countries concerned, es- pecially the two you have just mentioned? Mr. SMITH. That is true. One has to take into account the fact that these underdeveloped countries have notions of their own as to what they would like, and they won't necessarily coincide with our notion of what we think they ought to have. Then it becomes a judg- ment and a foreign policy decision rather than a technical decision. But we felt we ought to at least have the opportunity to express our views and then have them weighed perhaps at a higher level of compe- tence in international policy. Senator MANSFIELD. We are delighted to have those views and the other views you might have as to the efficacy of the program under discussion; however, I think I should point out that I assume what you are referring to is not so much the technical assistance program as the economic development assistance program, which is quite different from the point IV technical assistance aspects under study by this committee at this time; is that correct? Mr. SMITH. That is right, except as a preliminary to such de- velopment. ROLE IN ENCOURAGING PRIVATE INVESTMENT Senator MANSFIELD. Mr. Secretary, could you tell me what your Department has done to encourage private investment in the under- developed countries? Mr. SMITH. We are able to do very little, except so far as we re- ceive information from the Foreign Service and disseminate it through the medium of the publications for which we are responsible in this country. We have no Foreign Service of our own, and we have limi- ted opportunity to deal with foreign governments except insofar as we can deal with their representatives here in Washington. So our role until now has been primarily one of bringing investment opportunities to the attention of potential investors in the United States. Senator MANSFIELD. Well, do you have any idea as to how that role could be expanded so more private capital could be invested abroad and as a result less Government capital used for that purpose? Mr. SMITH. There are both the negative and the positive aspects to this problem. The negative aspect is one of overcoming barriers which are primarily in the form of laws in foreign countries which inhibit investment, laws which make investments unattractive to American capital, also administrative practices which have the same effect. Of course, there is also the incentive aspect of it which is one of the positive aspects of discovering or uncovering opportunities which is largely in the hands of FOA at the present time, in reducing them to manageable and compensable terms; in other words, in terms TECHNICAL ASSISTANCE PROGRAMS 95 which would warrant an investor in this country taking a trip abroad in order to explore the potentialities of the project. Both of those types of work are presently being conducted by the three different agencies of Government which are interested-State, FOA, and Commerce. We are trying to develop cooperative arrange- ments so as to be mutually helpful in this activity, and we are hoping to be able to improve our means for disseminating information. I don't think I could say any more on that subject at the moment. Senator MANSFIELD. I take it that what you are doing is constantly studying this problem, trying to find means for the export of Amer- ican capital to these underdeveloped countries so in time that can take the place of governmental appropriations. Mr. SMITH. That is correct, sir. Senator MANSFIELD. Thank you, Mr. Secretary. There will be no meeting of the committee this afternoon, but we will meet again at 10 o'clock in this room on Monday next. The meeting is adjourned. (Whereupon, at 11:55 a. m., the committee adjourned until 10 the following Monday, February 21, 1955.) a. m., 3 TECHNICAL ASSISTANCE PROGRAMS MONDAY, FEBRUARY 21, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., in room 457, Senate Office Building, Senator Mike Mansfield (chairman of the subcommittee) presiding. Present: Senators Mansfield, Green, Fulbright, Hickenlooper, and Aiken. Senator MANSFIELD. The committee will come to order. The first witness this morning will be Dr. Walter Van Kirk, of the National Council of Churches. Dr. Van Kirk, will you take the chair and proceed. STATEMENT OF WALTER W. VAN KIRK, EXECUTIVE DIRECTOR, DEPARTMENT OF INTERNATIONAL AFFAIRS, NATIONAL COUNCIL OF THE CHURCHES OF CHRIST IN THE UNITED STATES Dr. VAN KIRK. Mr. Chairman, my name is Walter Van Kirk. I am the executive director of the department of international affairs of the National Council of Churches. The chairman of the department is the Honorable Ernest A. Gross, a former Assistant Secretary of State for congressional relations, and a former deputy United States representative to the United Nations. The 30 denominations, Protestant, Anglican, and Orthodox, related to the National Council of Churches, have a membership in excess of 35 million. I do not, however, pretend to speak for each of these many millions of Christians. I am, however, authorized to appear before you as an officer of the National Council of Churches. The National Council of Churches is strongly of the opinion that the United States should continue its program of technical coopera- tion, both bilaterally and multilaterally. CONTRIBUTION OF NATIONAL COUNCIL For more than a century Christian missions have pioneered in de- veloping programs of technical assistance. The division of foreign missions of the National Council of Churches is made up of 97 member boards and related agencies. These boards and agencies maintain a missionary force of 9,500 men and women in more than 50 countries. They contribute annually for overseas expenditures, approximately $40 million. They maintain schools, colleges, universities, training 97 98 TECHNICAL ASSISTANCE PROGRAMS centers, farms, shops, and hospitals. Tens of thousands of trained nationals are associated in these Christian endeavors. Also, through the central department of church world service of the National Council of Churches, the various denominations related to this department have carried forward a point IV program of their own. In 1954 these denominations expended for this purpose $8 million and the anticipated expenditures for 1955 will be in excess of $9 million. In 1954 they shipped 30 million pounds of materials to areas of need and during the current year this figure will rise to between 50 and 60 million pounds. In Europe, the Near East, India, Pakistan, Indochina, Korea, Japan, and other Asian areas the churches have helped distribute surplus foods, and they have pioneered in various forms of village and community projects. In all of these endeavors they have worked in close cooperation with indigenous agencies and always with the view of helping people help them- selves. Through this ministry of good works the churches have built up a vast reservoir of good will toward the United States. It is out of this long and fruitful experience that the churches have reached the conclusion that a United States program of technical cooperation, properly motivated and administered, can be a factor of immense importance in the search for world justice and peace. We believe our Nation, under God, has inherited a great responsibility and opportunity. The numerous resources which have made possible our unrivaled prosperity are a trust we hold from God. We cannot violate that trust and escape judgment. SEPARATION OF TECHNICAL AND MILITARY AID The churches, accordingly, support Government programs of techni- cal cooperation insofar as these programs are essentially humitarian in character. The people in whose interest the point IV program was projected are in pursuit of a way of life that will invest the individual with a sense of human dignity. They don't want to be thought of as expendable in wars, hot or cold. They don't want to be bought, they don't want to be bribed. If among them the impression should prevail that fertilizers, seed grain, improved methods of agriculture, and irrigation and power projects are primarily designed to enlist them as participants in a possible world war, they are likely to refuse our hand of friendship. It is important, therefore, that programs of technical cooperation be kept wholly independent of considerations of military or defense strategy. We share the view of the International Development Ad- visory Board that "The United States technical cooperation program is sufficiently important and effective to stand on its own merits and is therefore fully justified without reference to military or defense support objectives." The general board of the National Council of Churches welcomes the steps already taken to restore the original idea of technical assistance on a mutual basis and separated from defense measures. LONG-RANGE ADMINISTRATION The National Council of Churches does not consider itself compe- tent to draft administrative blueprints for governmental operations. But it does feel that the United States program of technical coopera- TECHNICAL ASSISTANCE PROGRAMS 99 tion is much more likely to create good will and international under- standing if its administrative structure is made to correspond to this high purpose. It might help preserve the original humanitarian motivation of technical assistance, and contribute to the moral integ- rity of this endeavor, if there were established for its administration an agency, which, while representative of the appropriate branches of Government, would exercise definite authority and responsibility re- specting technical cooperation. It might also be desirable to create a permanent panel of advisers made up of representatives of the busi- ness, labor, educational, religious, farm, and social welfare interests. of our country. The churches believe, and the general board of the National Coun- cil of Churches has so declared, that Government programs of tech- nical cooperation should be projected upon a long-term basis. The conditions of social and economic maladjustment which these pro- grams are designed to improve, have been centuries in the making. They cannot be dealt with on a year-by-year basis, nor in the atmos- phere of an emergency operation. Adequate planning cannot be achieved, nor can money be wisely expended, if it is believed that miracles of social and economic advancement can be wrought over- night. We suggest, therefore, that programs of technical cooperation be conceived as an endeavor of long duration, and that personnel for the administration and operation of these programs be enlisted and trained in the expectation that we will be working at this task for a long time. As for the relation of church agencies to the program of technical cooperation it will suffice to say that insofar as this program is essen- tially humanitarian in character, Christian missionaries and the personnel of church-related institutions are prepared and eager to cooperate with this program, on a consultative and voluntary basis. But it must be a program that is curative in purpose, a program that is geared to the needs of the people on the community level, a pro- gram that enlists the collaboration of indigenous voluntary agencies. ADVANTAGES OF MULTILATERAL PROGRAM The National Council of Churches believes that whenever and wherever possible, technical assistance to the people of the underde- veloped areas should be made available through the United Nations. I might also add that the Christian community around the world sees great promise in the United Nations' endeavors in this respect. The assembly of the World Council of Churches, in session at Evanston, in August 1954, received a report on international affairs which claimed that: The response of more developed countries through expanded international programs of technical assistance is one of the brightest pages of recent history; but the effort thus far has been small in comparison with the needs of the less developed countries and the resources of those more developed. A progressively sustained effort will for a long time be required and involves mutual responsi- bilities and benefits which challenge all who cooperate in such endeavors. The Commission of the Churches on International Affairs, insti- tuted by the World Council of Churches and the International Mis- sionary Council, has urged: The better integration of programs conducted by the United Nations and specialized agencies, and closer cooperation between this U. N. expanded program 100 TECHNICAL ASSISTANCE PROGRAMS and regional and bilateral schemes, for the sake of rendering the maximum of the efficient service to peoples of less developed regions. The National Council of Churches identifies itself with this point of view. We believe that in its expanded program of technical assistance the U. N. can advance the cause of peace and justice with great effectiveness. It was the United States that, at the outset, requested the Secretary-General to prepare a comprehensive program of technical assistance for economic development through the U. N. There is ample evidence that when administered by the U. N., techni- cal assistance can reinforce the efforts of the free world to establish the conditions of peace. We sincerely hope the United States will continue its cooperation in the U. N. expanded program of technical assistance, and on a scale commensurate with our resources. We urge this course since we believe that multilateral technical assistance through the U. N. has certain advantages not found in bilateral programs. These advantages derive from the following considerations: (a) all contributions to the program are pooled and lose their particular identification, (b) specialized personnel who serve in the U. N. technical missions are drawn from many nations. and those multinational and multiracial teams have been one of the programs' greatest assets, (c) the absence of political and national motives makes the U. N. program more acceptable in areas where other types of aid may be suspect. That is the conclusion of my formal statement, Mr. Chairman. Senator MANSFIELD. Thank you, Dr. Van Kirk. WEAKNESSES OF UNITED STATES PROGRAM Senator MANSFIELD. What, in your opinion, have been the weak- nesses in the point IV program in the past? Now, I am speaking only of the United States' point IV program. Dr. VAN KIRK. Well, I would not have the competence to reply to your question in terms of structure or administration, perhaps. I would myself feel that the reason why point IV has not in every respect achieved the purposes for which it was initiated is more in the nature of an attitude and a psychology and a philosophy than it is of structure, perhaps. I have been abroad some, and have had oppor- tunity of talking with people in areas that have been touched by the point IV program in a sense. Their feeling is that they are being bought; rightly or wrongly, this is their impression. If, therefore, the point IV program could in its administration and in its organizational structure more clearly convey the impres- sion that this is something which the United States is undertaking to do not for the purpose of winning friends, however important that is in and of itself, but that we are projecting this program be- cause we believe in the dignity and rights of the people to whom this aid is directed. I think it is a psychological situation that we are confronted with here, perhaps more than it is a matter of organization or of structure. • Senator MANSFIELD. You used the word "bought." In what sense. did you mean that? Dr. VAN KIRK. That, having provided aid in this fashion, there is an implied obligation upon the part of the people, therefore, to be TECHNICAL ASSISTANCE PROGRAMS 101 + on the side of the United States in the cold war. In that sense, I think they feel they are being bought. Senator MANSFIELD. Well, of course, is it not true that one of the objectives of the point IV program is to help people to help them- selves so that they will be on our side, and be our friends? Dr. VAN KIRK. Yes, I think the likelihood of their being our friends is considerably enhanced if we do not encourage them to believe we expect it on our part, you see. Winning friends in this kind of a situation is a byproduct, and it is not anything that you go directly in search for. So that I would trust the good judgment of the people on the receiving end to know on what side to be associated in this endeavor, provided we do not create the impression that that is what we are undertaking to accomplish. Senator MANSFIELD. Of course, I understood the idea of point IV was to work out a person-to-person or a people-to-people program- Dr. VAN KIRK. Yes. Senator MANSFIELD (continuing). By means of which they could develop better methods to better their own conditions- Dr. VAN KIRK. Quite. Senator MANSFIELD (continuing). By means of which their longev- ity could be extended, their security made a little more stable. Dr. VAN KIRK. Yes. Senator MANSFIELD. And, so far as I know, so far as the actual application of the point IV program, as it was generated at the beginning is concerned, that has been the purpose of the whole project, to help these people and, in turn, to create friendship among them, not overtly on our part, but through appreciation on their part, and with a recognition that the program itself is a cooperative approach to a problem which must be met and must be defeated if the advance of other ideologies is to be stopped. Dr. VAN. KIRK. Yes, I would agree with that, sir. I think sometimes when the people in a receiving area get the im- pression that this is something which we are going to do this year, and maybe next year and maybe the year after that, it is thought of, I think, by many of these people as a short-term project related to the immediate emergency situation, and because it is thus related in their minds, they draw from that implications of a character that are different from those which motivated the point IV program in its initial stages. Senator MANSFIELD. That is probably true, Doctor, except that inso- far as the point IV technical assistance program is concerned, it is one program which has had no termination date, so the assumption has been that it will be carried on on a long-term basis because we all recognize that you cannot go in and do these things overnight; it does take time. Senator Aiken? CONTRIBUTIONS TO THE UNITED NATIONS Senator AIKEN. I want to say, first, Mr. Chairman, I think we should and do appreciate the work which has been done by the Na- tional Council of Churches in the field of international relationships. I gather from your statement, Dr. Van Kirk, that you feel that the United Nations could handle this technical assistance program 102 TECHNICAL ASSISTANCE PROGRAMS better than it is being handled on a bilateral basis? I mean, broadly speaking. Dr. VAN KIRK. In principle, I would say that would be the case. I can understand why under certain circumstances a bilateral program might, for a particular period, be a more useful vehicle through which to work. Senator AIKEN. Have you worked out any proportions or recom- mendations on which contributions to the work would be made? We assume, do we not, that the United States would probably make the major contribution to the work. Dr. VAN KIRK. Yes; I would assume that that would be the case, because we are, perhaps, better able than other nations to make a major contribution. I was over in the U. N. when the pledging conference was underway at the U. N., and it was rather humiliating for me, as an American citizen, to be confronted with the fact that our own delegate could not at that time make any pledges. This was in compliance, I think, with a congressional directive. I think the impression is the im- pression prevails over the U. N., rightly or wrongly-that we are tend- ing to ease out of this situation somewhat. CONTRIBUTION OF OTHER U. N. MEMBERS Senator AIKEN. What work is being done by the United Nations in this same field? To what extent is this same kind of work being done today? Dr. VAN KIRK. You mean through the expanded program of tech- nical assistance? Senator AIKEN. Through the United Nations, yes. Dr. VAN KIRK. Well, there are available, of course, reports of a very exhaustive character which would outline those projects and those endeavors, and I do not think I could undertake here to Senator AIKEN. Well, I was wondering what the other members of the United Nations are doing in this field as a United Nations program. Dr. VAN KIRK. I think to the extent of their resources, they are doing a commendable service in this respect; that is the impression I get. Senator AIKEN. You say to the extent; but do you know what that extent is? How extensive is the work they are doing in this technical assistance field? Dr. VAN KIRK. In terms of money it would not be, perhaps, a sizable amount, as sizable as we might wish. In terms of personnel, perhaps, the contribution is somewhat more impressive. Senator AIKEN. It would be very small, you would say, compared to what the United States was doing on a bilateral basis today? Dr. VAN KIRK. Oh, very much smaller than that, of course. Senator AIKEN. However, if the United States made this contribu- tion through the United Nations, all the nations belonging to the United Nations would have equal voice in conducting the program, that is, they would have a voice, perhaps not equal. Dr. VAN KIRK. Presumably, yes. Senator AIKEN. Do you think that it would be better for us to turn our contribution over to the United Nations in that way? TECHNICAL ASSISTANCE PROGRAMS 103 Dr. VAN KIRK. I would myself be prepared to trust the collective judgment of the U. N. as to proper procedures in relation to this program. Senator AIKEN. You maintain that it would contribute more to the dignity of the program- Dr. VAN KIRK. I would think so. Senator AIKEN (continuing). If we turned our contribution over to the United Nations? Dr. VAN KIRK. I think we should not forget the fact that some of the smaller states made contributions or pledges this year in excess of those which they had made in prior years. Senator AIKEN. Do you think there are some smaller states that have now got the idea that the United States is not trying to dominate them in these programs but is simply trying to help them? Dr. VAN KIRK. I would hope that that impression increasingly prevails. Senator AIKEN. Do you think there are any who do not think Uncle Sam is trying to grab off something in their country and domi- nate them? Dr. VAN KIRK. I do not know whether my judgment would be worth anything at that point or not. Senator AIKEN. Then I will not pursue that question any more. MATERIALS FOR AREAS IN NEED I notice in the first page of your statement you state that the "Cen- tral Department Church World Service in 1954 shipped 30 million pounds of materials to areas of need. During the current year this figure will rise to 50 to 60 million pounds." Do you know how much of that will be surplus commodities? Dr. VAN KIRK. No, I could not state categorically. I would have to get that data from the officers of Church World Service. I could get it and provide it, if the committee so desired. Senator AIKEN. Well, I presume some of Dr. VAN KIRK. A very considerable amount would be in the nature of surplus food, for example. Senator AIKEN. Yes, I would expect they would be, and something would probably have to be purchased. Dr. VAN KIRK. Quite. Senator AIKEN. Do you encounter any difficulties in carrying out this work? Dr. VAN KIRK. It is mostly a voluntary service in which, for ex- ample, the women of the churches go around and collect clothing, and it is a labor of love, essentially. Senator AIKEN. Yes. Do you encounter any difficulties in foreign countries where you work in carrying on this Dr. VAN KIRK. I think the record there is without exception, on the positive side. Senator AIKEN. That is, you find no great variances, no tariff re- strictions or anything against delivering these 30 million pounds last year or the anticipated 50 to 60 million pounds this year to the people of foreign countries? Dr. VAN KIRK. No, not in the by and large; I would say, no. 104 TECHNICAL ASSISTANCE PROGRAMS Senator AIKEN. There are no tariff barriers against any of this relief material which you are talking about? Dr. VAN KIRK. You see here we are getting involved in technical administration, which Church World Service officers could reply to much more definitely than I could. But I think every definitive con- dition has been met that would facilitate the operations of the churches in this field. Senator AIKEN. Yes. I ask that question because we hear that it is difficult sometimes to help out people of some countries because of restrictions against importation from the United States, and I was just wondering what your experience had been in that respect. Dr. VAN KIRK. Well, my experience has not been in this area of the endeavor. Senator AIKEN. You have not handled that yourself at all? Dr. VAN KIRK. Yes. Senator AIKEN. I will not go any further with that. I think that is all. Senator MANSFIELD. Senator Fulbright? Senator FULBRIGHT. Mr. Chairman, I, unfortunately, did not hear the statement. I do not want to be repetitive. However, I would like to ask, is there any plan for the expansion of the contribution, other than surplus commodities, of the Council of Churches in this field? Do you plan to expand your activities? Dr. VAN KIRK. Insofar as we can secure added material goods of one kind or another; that is definitely in the plan, as is indicated in the figures here where we expect during the current year a tremendous stepping up of the material goods which, it is hoped, through the churches, can be made available to areas of need. DISTINCTION BETWEEN RELIEF AND TECHNICAL ASSISTANCE Senator FULBRIGHT. Do you consider the contribution of goods, such as food, a part of the technical assistance program? Dr. VAN KIRK. Well, it has some identification of purpose of out- look. I mean, you make surplus foods available in order to improve conditions in the areas in which such help is extended which, in prin- ciple, is the end and objective, I would suppose, of the point IV pro- gram also. Senator FULBRIGHT. Well, we had a program called UNRRA right after the war- Dr. VAN KIRK, Yes. Senator FULBRIGHT (continuing). Which was essentially a relief program for the relief of the immediate needs. Dr. VAN KIRK. Yes. Senator FULBRIGHT. That is hunger and lack of shelter. I had thought there was some fairly clear-cut distinction between the relief program and a technical assistance program. Dr. VAN KIRK. I see what is behind your inquiry now, and I would wholly agree with you at that point, sir. I think the surplus food pro- gram is an emergency program. It is of much greater advantage both to ourselves and to the freedom-loving peoples of the world, generally, to help these people to develop a food program of their own that would make increasingly unnecessary any surplus food con- sideration on our part. TECHNICAL ASSISTANCE PROGRAMS 105 Senator FULBRIGHT. The point IV program is essentially an educa- tion program, is it not; not a relief program? Dr. VAN KIRK. It is essentially that; yes. Senator FULBRIGHT. It so happens that we have surplus food, and it may fit in-I am not objecting, I am only trying to clarify our ideas in the approach. Dr. VAN KIRK, Yes. Senator FULBRIGHT. But they are really two different ideas and two different approaches, are they not? Dr. VAN KIRK. Substantially so; I would say so. Senator FULBRIGHT. The objectives may be similar. Dr. VAN KIRK. Insofar as the food surplus distribution is an emergency operation, in that respect it stands in sharp contrast to the long-range objectives of the point IV program. Senator FULBRIGHT. Point IV is to try to teach and help the people to supply their own food- Dr. VAN KIRK. Correct. Senator FULBRIGHT (continuing). Rather than giving them food, is it not? Dr. VAN KIRK. That is correct. Senator FULBRIGHT. Well, I only think we should keep that in mind so we do not confuse the people by what we are trying to do, both here at home and abroad. Dr. VAN KIRK. I would agree with that. Senator FULBRIGHT. I take it that you feel the point IV approach, that is, the education approach, is a valid one and a proper one for us to engage in; is that correct? Dr. VAN KIRK. Yes; I would think it would be considerably en- hanced if in our point IV endeavors we established or sought to estab- lish a closer relationship with the people on the community level. These are the people that, in the main, are going to be affected ad- versely or otherwise by the point IV program; and I gather the im- pression, although I cannot be too definite at this point, because I lack the experience, but I rather have the impression that there is too great a gap between administration of point IV on our part and the peoples themselves in their community relationships and voluntary indigenous organizations. It would seem to me the cooperation of people's groups might con- ceivably be enlisted on a larger scale than hitherto. SOVIET INTEREST IN TECHNICAL ASSISTANCE Senator FULBRIGHT. In your experience, have you had occasion to become acquainted with what the Communists are doing in this field, if anything? Mr. VAN KIRK. I could not testify to that out of experience. I am rather impressed by the fact that the Soviet Union begins to manifest some interest in a program of this kind under the aegis of the UN, having been convinced, I think, of its positive results and now desir- ing, perhaps, to share in a program which, in the first instance, they sought to sabotage, and now seeing on what a wide scale it is conducive toward the strengthening of the free world, themselves wish to get into this situation. 106 TECHNICAL ASSISTANCE PROGRAMS I think this speaks volumes for the value of the service rendered by technical assistance. I ought to say this, Mr. Senator, if I may, that in these figures which I gave you with respect to Church World Service, this is conceived by Church World Service as an emergency operation, whereas in the earlier paragraph, I delineated all too briefly some of the activities of the Foreign Missions Division of the National Council, which is embarked upon a more permanent and long-range program related to the building of schools and hospitals, and the like. Senator FULBRIGHT. It is that part of the program which is more nearly akin to the so-called point IV program. Dr. VAN KIRK. Yes; I would think so. Senator FULBRIGHT. It seems to me that is the part which I had reference to, if there were any plans for expansion. Dr. VAN KIRK. Well, I am glad to have that clarified. SIMILARITY OF COUNTY AGENTS' WORK TO TECHNICAL ASSISTANCE Senator FULBRIGHT. Can you think of any analogy within your or our own experience in this country that leads you to believe the point IV program is a proper and effective one? Dr. VAN KIRK. I do not know whether I get the implications of that. Senator FULBRIGHT. I take it you are here seeking to persuade the committee that support of the point IV program is a worthwhile activity, I mean, that we should support it. Is there anything in your experience that you know of here within the United States that supports that point of view? Can you give us any other arguments that would be persuasive to the committee and the Congress that the point IV program is an effective and a proper activity? To put it another way, I have often thought that the county agent program in the United States was one quite similar to the point IV program, and is a very persuasive argument that this is an effective way to approach the problems in the underdeveloped countries. Ďr. VAN KIRK. I would agree with it insofar as I am familiar with the operations. Senator FULBRIGHT. Are you familiar with it? Dr. VAN KIRK. No; I am not. Senator FULBRIGHT. I thought you knew one in your field which would be similar to it. The county agent activity is one which I am very familiar with because it really helped us to remake the South during the last 30 years. I thought, perhaps, you could give us some instances in which there has been some improvement in the North that might be analogous. Dr. VAN KIRK. I am afraid I am without experience in this field, sir. Senator AIKEN. I could give some experiences there. I had some- thing to do with appointing the first county agent in my county in 1913, or one of the first in the country, and I could give adequate testi- mony as to the value of the county agents in the North as well as the South. Senator FULBRIGHT. Well, I did not mean to leave an implication at all or the possibility of one, that there had been no improvement TECHNICAL ASSISTANCE PROGRAMS 107 in the North. What I was thinking of was in some other fields. I realize probably the county agents helped the North also, but I was thinking more of the field of city development or in the field of mis- sionary work or something. Dr. VAN KIRK. Well, I would feel that the experience which the churches have had in the area of migrant labor, for example, might be illustrative of the program you had in mind. ANALOGOUS PROGRAMS IN U. S. if Senator FULBRIGHT. That is all I mean. People sometimes have difficulty bringing within their own experience what we are talking about here; of understanding what we are trying to do in point IV, and I am sure there are analogous situations within this country; we could only make them clear here to the people and to the Con- gress, that this is what we are trying to do only in a little different field. It has been proved to be effective here; therefore, it is likely to be effective in this field. That was the only thought I was trying to make. I think there are analogous situations. After all, there are undeveloped areas in this country, undeveloped in many different senses, and how do we go about solving those prob- lems. I think this is very basically the same approach. Basically it is an educational approach. Dr. VAN KIRK. We have in the National Council of Churches a Division of Home Missions, for example, which operates wholly on the national level, and a great variety of endeavors which the Home Missions Division would sponsor and supervise, having to do with migrant labor and various racial minority groups in this country, you see. Senator FULBRIGHT. Well, fundamentally, is not the objective and the procedure very similar? Dr. VAN KIRK. I would suppose so; yes. Senator FULBRIGHT. Well, that was all I was trying to do-trying to bring this thing down within the experience of everyday people here and not leave it dangling as some scheme of some wild-haired internationalist, as they often call us, you know, in the foreign field. It is just an ordinary approach we are applying in the foreign field, is it not? Dr. VAN KIRK. Yes. Senator FULBRIGHT. There is nothing peculiar or unusual about it, really. PUBLIC OPINION TOWARD PROGRAM Dr. VAN KIRK. My impression is that in the by and large the people of the United States, generally, even though they may lack experience of the kind to which you refer, for other reasons, essen- tially humanitarian, support this program of Government to a degree, perhaps, which is in excess of any enthusiasm which they may have demonstrated for other types and varieties of Government programs. I find a spontaneity of interest and support and a kind of public endorsement that is quite remarkable. Senator FULBRIGHT. If that is true, how do you account for the lack of support for it by the Congress? Dr. VAN KIRK. I would think the Congress is behind the people. 108 TECHNICAL ASSISTANCE PROGRAMS Senator FULBRIGHT. I cannot understand it. People get elected to Congress largely because they understand what people think. If they are experts in any field, they are experts on public opinion; they have to be elected by voters, and I think you are wrong in assuming there is great support in this country, and yet the Congress arbitrar- ily and for reasons you cannot explain, will not go along that way. I think it is a very serious error. I do not think it is true. I may be wrong, and it may be in the field, in the groups you know, that there is that support, but I do not think the Congress over any long period is unresponsive to what the people themselves want. I do not think they could be reelected time after time if they were unrespon- sive, and that is why I think it is important to try to bring this to the people and convince them that it is not just humanitarian. It is that, I think, but it is also very practical, and it is for their own interest to do it and not a do-good program essentially. I think it is im- portant to approach it that way, and that is why I regret that there is this confusion between point IV and a relief program because I do not think it is a relief program. Dr. VAN KIRK. Essentially not, no. Senator FULBRIGHT. That is all. Senator MANSFIELD. Senator Green? Senator GREEN. No questions. Senator MANSFIELD. Thank you, Dr. Van Kirk. Dr. VAN KIRK. Thank you, Senator. FINANCING U. N. TECHNICAL ASSISTANCE Senator AIKEN. I am just wondering whether people reading the record will get the impression that the United States has not con- tributed to the United Nations Technical Assistance Fund. Dr. VAN KIRK. I would not want that impression to be created. Senator AIKEN. The record should show that the United States contributes some $14 million a year, and should show that Russia has offered 4 million rubles which, as I understand it, the U. N. has not been able to spend, although they can spend our $14 million in dollars. You would not recommend that we also put in $100 million that we spend on bilateral programs into that fund, would you? Dr. VAN KIRK. No. I only feel that whenever we can Senator AIKEN. Is not the United States doing its share compared with the other countries of the world right now, and even more than its share? Dr. VAN KIRK. In the by and large, I would say so. My only regret at the point where I testified here this morning was that we had not been able thus far to make any pledges for the U. N. technical assistance program for the current year. Senator AIKEN. Well, you will not be able to so long as we conduct our Government affairs as we do in Congress, which has to make the appropriation for the coming year. Dr. VAN KIRK. No, but I still think it would be entirely within the rights of a representative of the United States at the U. N. to make a pledge, with a condition, of course, that the appropriation is to be authorized subsequently by the Congress. But this time we were not able even to do that, making a conditional pledge. All that we were able to do, as I recall, Ambassador Lodge stated that the TECHNICAL ASSISTANCE PROGRAMS 109 President was interested in the program, and it was his purpose to recommend an appropriation for this program during the current year. Now, that fell just a little short of what seemed to me the United States might have done under the circumstances, and in past years we have made pledges, you understand. Senator AIKEN. Are the other countries able to make definite pledges? Dr. VAN KIRK. Well, they had done it. Senator AIKEN. And carried them out, I suppose? Dr. VAN KIRK. In the main, I would say they have, yes; but I would not want my testimony to be construed as reflecting any lack of appreciation on my part for the service rendered by the United States thus far in the U. N. technical assistance program because it has done, in the by and large, magnificently. Senator FULBRIGHT. Mr. Chairman, may I ask, is it not a fact that the difficulty arises because we operate on a fiscal year and they are on a calendar year? Dr. VAN KIRK. That is the difficulty. Senator FULBRIGHT. And if we were to appropriate for 18 months at one time and get it started, I think- Dr. VAN KIRK. That is a real difficulty, the solution for which I have no recommendations. Senator FULBRIGHT. There is one other thought I had. I did not wish to be too critical of what you said about the support of the people. I think a lot of them do support it, but they do not make their wishes or their desires known, do they, to their representatives? Dr. Van Kirk. With that I am wholly in agreement, sir. Senator FULBRIGHT. Perhaps you can do something about it. Dr. Van Kirk. I try to do it every day in my life, sir, and if you do not get some letters shortly, it will not be my fault. [Laughter.] Senator MANSFIELD. Dr. Van Kirk, I think you emphasized what Senator Aiken said, that it is true that just within the past year, if my memory serves me correctly, the Soviet Union has come forth with a contribution of about 4 million rubles which at the official exchange rate, is 1 million dollars, but this is the first time, whereas the United States has been in the program all the way through, and has contrib- uted, by far, the major portion of the funds in spite of the fact that this country has the largest debt of any country in the world. I think that ought to be in the record, as well. Dr. VAN KIRK. Yes. Senator MANSFIELD. Dr. Van Kirk, thank you for your very in- teresting and worthwhile testimony this morning. Dr. VAN KIRK. Thank you. Senator MANSFIELD. The next witness is our old friend, Assistant Secretary of State George Allen. Secretary Allen, will you come up and proceed with your testimony. TESTIMONY OF GEORGE V. ALLEN, ASSISTANT SECRETARY OF STATE FOR NEAR EASTERN, SOUTH ASIAN, AND AFRICAN AFFAIRS Mr. ALLEN. Mr. Chairman, I am George V. Allen, Assistant Sec- retary of State for Near Eastern, South Asian and African Affairs, 59637-55- -8 . 110 TECHNICAL ASSISTANCE PROGRAMS former United States Ambassador to India, and I understand that my role this morning is to talk with you specifically regarding the operations of the technical assistance program in India as I have observed it during the last 2 years. I have no prepared statement, Mr. Chairman, and I will be very happy to proceed in any way that you suggest. I could address myself if you would like, to the seven specific points in the resolution of the Senate, which set up this committee; I have those here. Senator MANSFIELD. Well, Mr. Secretary, I think, in view of the fact that you have no prepared statement, that it might be better if the committee were to ask you questions, because I am quite certain that they have many questions in their minds relative to our position vis-a-vis India at the present time. Mr. ALLEN. I would be very happy to do so. Senator MANSFIELD. Senator Green. INDIAN ATTITUDE TOWARD PROGRAM Senator GREEN. Mr. Allen, in view of your experience in India, taking India as a typical case, what do you find the attitude of the government to be and also the attitude of the people toward this program? Mr. ALLEN. Senator, one of the surprises I got on my first arrival in India was to realize the fact that the attitude of the Indian people toward me, from the beginning, was conditioned very largely on the extent to which they felt I would support American technical assist- ance and economic aid for India. From the first time I landed at the airport, through all the press conferences I had, they kept asking this question over and over again. That fact surprised me a bit because I had understood that there was some reluctance on the part of the Indian Government to come forward openly and ask for American assistance, but there was not the slightest doubt from the articles and editorials in the newspapers that their judgment of the new American Ambassador in India would be very closely allied to the extent to which he would support economic and technical assistance for India. I may say that I have just mentioned to our new Ambassador, Senator Cooper, who is to go to India shortly, that he may also expect that that will be the measuring stick in his case. Senator GREEN. You mentioned the request of the Government. What were these requests? Mr. ALLEN. The actual requests of the Government of India have been in connection with specific projects for technical assistance and economic aid. For example, at the present time we have in India, I believe, about 130 technicians actually assigned. The number of requests we have before us for additional technicians is some 119. The requests come in the form of specific approaches by the Government of India through its various ministries, for assistance in the community development program, in the health program, in the education field, and in the various fields of activity that we are prepared to consider. Senator GREEN. Well, you mentioned the Government and the press. Would you care to give us the response of the peoples themselves who expressed approval or disapproval? TECHNICAL ASSISTANCE PROGRAMS 111 Mr. ALLEN. Yes, sir; there is a very warm response. I may take occasion at this time to pay respect to the testimony which I heard just before I took this chair by Dr. Van Kirk. I welcome his clear-cut expression of support for this program on the humanitarian basis, but I think I should say, in answer to your specific question, sir, that if you stress in India the pure humanitarian basis of this program, your views will not be entirely accepted. You have to explain to the Indian public that the United States Govern- ment and people have something of their own to get out of this. It is very difficult for them to accept the view that even the American peo- ple, whom they regard as the most generous people in the world, would go in for a tremendous program of this kind, unless there was something that America could get out of it. So I repeat, you cannot support the program in India on a purely humanitarian basis. To be entirely frank, the humanitarian aspects of the program, in speaking to the Indian public, should be sublimated. If you stress how noble and generous and kind the American people are in carrying out this program, the reaction on the Indian public is, in the first place, nobody is quite that good and, in the second place, the American people will expect great gratitude in return. The Indian people do not want to feel that they are under that much obligation to the United States. If it is a mutually beneficial program to both peoples, then it is acceptable to their dignity and their national pride. I may say that I respect the attitude of the Indians on that point. They do not want to be purely recipients of humanitarian charity. They want to feel that they are contributing to a mutually advantageous program. DISTINCTION IN MOTIVES Senator GREEN. In other words, you would say that not only from the point of view of the Indian people, but also from the point of view of the American people, it is best that they claim this program is justifiable on political as well as humanitarian grounds? Mr. ALLEN. I hesitate a bit, Senator, over your word "political" because it might indicate that we expect India, in return for our economic and technical assistance, to adopt a foreign policy somewhat in line with ours. That would not be enthusiastically received by the Indian people. Senator GREEN. I would be glad to accept any substitute you may care to give for the word "political." I thought you were making that distinction in your argument. Mr. ALLEN. Well, my distinction is rather this: In explaining to an Indian audience, as I have time after time, the purposes of American technical assistance, they understand your reasoning if you point out that the United States is well aware that it is not healthy for the United States to live in a world where there is a tremendous divergence between the standard of living of the American people and that of the underdeveloped areas, and that we realize, in our own national interests, that the continued existence of that great difference in the standard of living creates jealousies, animosities, bitterness, rivalries, and so forth. If you explain that we are endeavoring to help underdeveloped countries to increase their standard of living 112 TECHNICAL ASSISTANCE PROGRAMS because it creates a more healthy world for the United States, then they can understand your purpose. Senator GREEN. Well, we have to expect the American people, as well as the foreign people, to understand the distinction between the humanitarian and some other motive-what other word would you use to describe it better than "political"? Mr. ALLEN. I would prefer "economic" to "political." That is, the general improvement in standards of living and the economic development of these areas bring about some relaxation of tensions and avoid the jealousies and the bitterness I have referred to. Our technical assistance also increases the flow of trade between nations, the amount of our trade with developed areas of the world being always much larger than with underdeveloped areas. Those are factors which I would put in the economic rather than the political sphere. ECONOMIC ADVANTAGES TO THE UNITED STATES Senator GREEN. In other words, in addition to the humanitarian views of the American people, how would you describe the advantages of these appropriations from the economic standpoint of the American people? Mr. ALLEN. First I would mention the increased flow of trade; that is, the advantage which would come to the United States if areas of the world which have a very low consumptive capacity were to increase their capacity to consume, thereby making possible an ex- panded world economy. Second, I would return to the point mentioned earlier. The United States, in my opinion, cannot expect to live in comfort with our high standard of living, which we all want to see maintained, if at the same time, there are other areas of the world which are greatly under- developed and which have vastly lower standards of living. The in- crease in the standard of living of underdeveloped countries would bring about a lessening of jealousies, animosities, and bitterness. Senator GREEN. You think that your experience in India is a fair sample of experience in other parts of the world? Mr. ALLEN. I may be guilty of the disease which we in the Foreign Service sometimes suffer from, "localitis," but I have the impression that our technical assistance program in India has actually worked as well if not better than, any other one I know of. Senator GREEN. Is that your opinion as Assistant Secretary of State as well as a former Ambassador to India? Mr. ALLEN. Yes, sir. Senator GREEN. That is all. INDIAN NATURAL RESOURCES Senator MANSFIELD. Senator Hickenlooper? Senator HICKENLOOPER. Mr. Secretary, what potential natural resources does India have? Mr. ALLEN. I do not regard India as one of the outstandingly favor- able countries in natural resources. It has several things against it. The climate is unfavorable; the amount of rainwater generally over the country is insufficient. TECHNICAL ASSISTANCE PROGRAMS 113 At the same time, India is not a remarkably have-not country inso- far as natural resources are concerned. The country is poorly explored in that field but, at the same time, there are great natural resources that have already been discovered and developed. India produces a large percentage of the manganese of the world. It produces mica and other commodities. Rare earths is one commodity a good deal has been heard about. The imports into the United States last year from India were prin- cipally, I believe, manganese, jute products, and tea. Another great resource of India is physical manpower. The ex- perience of the last war showed that in spite of the fact that there were tremendous political difficulties inside India, the country did produce a tremendous lot for the allied side during the war. That was in spite of the fact that at one moment, I believe, upward of 200,000 Indians were in prison for political reasons. Senator HICKENLOOPER. Do you recall offhand how much, roughly, in dollars we have put into India in technical assistance programs or point IV programs or all of those things put together? Mr. ALLEN. The figure listed here is from 1949 through 1955, the total figure is $472.6 million. RECIPROCAL COOPERATION Senator HICKENLOOPER. India has certain resources; you mentioned the rare earths. Do you know of a single dollar's worth of contribution that India has made to the United States during that period of time from her resources? When I say "single dollar," I do not mean one dollar, but do you know of any appreciable amount of contribution out of the economy of India that has been made to the United States while we have been making roughly a half billion dollars' worth of contri- butions to the Indian economy? Mr. ALLEN. Senator, a part of this involves matters that I am sure you are aware we should not speak of for the record. But I can say this: In many fields of economic endeavor and access to raw materials we have had very good and effective cooperation from the Govern- ment of India. Senator HICKENLOOPER. Well, I was thinking particularly not of just cooperation on the receiving end-just cooperation because some- one is getting something out of it, but I am talking about the kind of mutual, reciprocal, direct contribution to the economy of the United States. And again I get back to the rare earths. I think there was no cooperation on the part of India when we were very desirous of getting some rare earths which they seemed to have in superabun- dance, and we were pouring money into their economy. I am talking about cooperation, stressing the word "mutual." Mr. ALLEN. I have to say, Senator, that my only experience on that score is rather different. I believe we have got cooperation from the Indians on that score. Senator HICKENLOOPER. We have had some amount of cooperation, but I wonder about contribution. Mr. ALLEN. I will be glad to go into that on a different occasion and give you full details, Senator. 114 TECHNICAL ASSISTANCE PROGRAMS SLOWNESS OF INDIAN ECONOMIC DEVELOPMENT Senator HICKENLOOPER. India is a very ancient civilization; is it not? Mr. ALLEN. Yes, sir. Senator HICKENLOOPER. And for several hundred years, India has had the benefit of education in Europe and other places; has it not? Mr. ALLEN. Yes, sir. Senator HICKENLOOPER. Very substantial numbers of them? Mr. ALLEN. During the last hundred years, we will say. Senator HICKENLOOPER. Yes. The fact of the matter is that they have what we may say is an overabundance of educated people in India, that is, insofar as their absorption into the existing economic development is concerned; is that not true? Mr. ALLEN. That is correct. Senator HICKENLOOPER. I have heard this, that one of the causes of restlessness in India is that there are a great many people who have received a very substantial and highly technical training in other places but who, upon getting back to India, very often cannot get a job at anything except some Government employment or something of that kind which does not require the education which they have received. Mr. ALLEN. Unfortunately that happens. It is not so much over- education of the Indian university graduate as it is the underdevelop- ment of their economy; the economy cannot absorb them. Senator HICKENLOOPER. Well, I am not referring to the overeduca- tion-the more education anyone can get is probably more desirable. The point that concerns me is why in this ancient civilization with its rather intimate contacts with western education over the last cen- tury or two, why is it that the Indian economy has not lifted itself more than it has? In other words, to use a comparison, this country developed from a raw frontier into a rather complex economy in 100 or 125 or 130 years. India has had exposure to the West for, let us say 400 years. Why is it that India has not developed itself? Mr. ALLEN. Senator, that is a very pertinent question and one that I can assure you I have been asking myself many times not only with regard to India, but with regard to a good many countries that have had long civilizations. I could add Egypt very well. One could ask, why is it that all those countries which learned to read and write 5,000 years ago, not only read and write but which acquired many of the attributes of civilization- Senator HICKENLOOPER. I would go further than that in India and say there are more educational opportunities in India than have been accessible in some other countries. In other words, they have great numbers of their people educated in England and in France and in the last couple of years, more and more of them, I do not know how many, are in this country. Do you know how many? Mr. ALLEN. At the present time about 1,400 Indians studying in the United States and about 3,000 studying in the United Kingdom. Senator HICKENLOOPER. With the record of nondevelopment of India over the last three or four hundred years, with advantageous associations through missionaries whom we sent there who total in the thousands, and the instruction which we have given them under point TECHNICAL ASSISTANCE PROGRAMS 115 IV and other things, what real prospect would you say that you see of a more accelerated development in the next 50 or 100 years than in the past? Mr. ALLEN. I repeat, sir, I think that is a very pertinent question and very well put and I will give you my answer. NEW AWARENESS OF PROGRESS I think something new has happened in India during the last 10 or 15 years that has never happened in the 5,000 years of Indian history before. That is, the awakening of the villages. About 80 percent of the Indian population lives in agricultural villages. They do not live on individual farms, but live in farm villages. For 5,000 years those Indian villages have been asleep. It has been the idea of the villager that he was born in the same situation as his grandfather and his father and it was not only futile for him to try to change that position, but it was even evil. His only chance of improvement was not in this life, but in a re- incarnation in some future life. So, people who went into the villages and talked about improvement of health, education, and so on were met with stony stares. The community development projects that are being carried out so widely, and I think so effectively, at the present time, have been tried in a number of places in India during the last 100 years, often- times by missionaries and sometimes by enlightened colonial British officials, but without success until recently. Today, when you go into a village in India, the villagers gather around and immediately ask, "Why can't we have a new well in this village? Why do we still have to have a well that has no wall around it? Everything drains into it, including the sewers. Cats and dogs running around at night fall into it. We want a well with a cement wall around it so the water can be kept clean.' Senator HICKENLOOPER. And do they get the suggestion that they might do that for themselves? Mr. ALLEN. Yes, they do. Voluntary organizations have been formed during the past 3 or 4 years which supply the labor. They are oftentimes so poor they have no brick, no cement. They have local mud for walls, which fall as soon as the rains come, but to make a permanent apron around a well, it takes cement, which takes a certain amount of money. I say to them, "Why are you so excited about a new well? Your father didn't have a different well and your grandfather didn't have a different well?" And they say immediately, "That is exactly why we want this new well. We want progress. We want change. We want something new." Now, why that has suddenly come about for the first time in 5,000 years is a difficult question, but I am convinced that a great change has come. STATUS OF FARIDABAD PROJECT Senator HICKENLOOPER. What is the present status of the Faridabad project? Mr. ALLEN. That is doing all right. It started off with a great deal of hope. It was essentially a project to resettle Hindus who 116 TECHNICAL ASSISTANCE PROGRAMS came out of West Punjab and who were living in refugee settlements around New Delhi. Houses were built for some—if I can correct the record later-per- haps 5,000 to 10,000 individuals- Senator HICKENLOOPER. 50,000, as I recall. Mr. ALLEN. I have no doubt. That does not sound too large to me; 50,000 is correct. There was also a great problem of getting those people occupations, either agricultural work-there was not enough land available so they could not all work there or other work. Various industries were proposed for the area, the principal one being a Bata shoe factory. It was a pioneer, pilot project. I think on the whole it worked well, but the people there did have difficulties finding adequate oppor- tunities to sell their goods and in getting other industries started. There were some mistakes made in connection with the setting up of the project. Perhaps it was too grandiose and too big an idea at the time, but it was a good effort and one that should not be decried. Senator HICKENLOOPER. Well, I have no desire to decry it. I have been on the project myself. I just wonder whether Faridabad in any substantial portion is supporting itself. Mr. ALLEN. Faridabad would not be entirely self-supporting. The cards were stacked against it. I am not certain how much direct help has been given it by the Government of India, but I believe it is still being helped. Senator HICKENLOOPER. Well, I think originally there was a loan by the Government of India for this project that was supposed to be operated- Mr. ALLEN. Liquidated? Senator HICKENLOOPER. Liquidated or amortized over a period of years, something of that kind. Mr. ALLEN. My guess would be that some of those loans are in arrears. Senator HICKENLOOPER. It seems to me to be a project with great prospects if it is properly administered. As I recall it, they are going to build a pump factory, a motor factory, a light plant and electricity, and they were installing irrigation projects there I think. PROPOSED SOVIET STEEL MILL IN INDIA Now, is the Soviet Union doing any point IV work of that size, and I will leave out propaganda? Mr. ALLEN. The only activity of the Soviet Union in that field at all has been the recent well-publicized offer on the part of the Soviet Government to assist India in building a steel mill. Senator HICKENLOOPER. As I read the story on that, India was to get a loan- Mr. ALLEN. That is right. According to the plan submitted by 12 Soviet technicians who arrived in India 4 or 5 months ago and studied the project, there would be a loan at 212 percent interest. Technicians would be provided by the Soviet Union. The steel mill, I believe, would be entirely Indian Government owned. The present status is that the Government of India has asked the Soviet Union, on the basis of the initial survey, to supply to India TECHNICAL ASSISTANCE PROGRAMS 117 details of the proposal. The Government of India will presumably consider them when those proposals are submitted. That is expected to be done in the course of the next 9 months. Senator HICKENLOOPER. It is my understanding that they have drawn preliminary contracts between the Soviet and the Indian Gov- ernment. I may be wrong about that. Mr. ALLEN. A contract only for the further elaboration of plans. Senator HICKENLOOPER. Do the Indians propose to get steel mills from the United States? Mr. ALLEN. There have been various proposals put forward, not by the Government of India, but by private Indian industrialists. It is understood by the Government of India that neither the United States Government nor any of its agencies, such as the Export-Import Bank, nor the International Bank, will put money in a Government- owned steel mill in India. However, private individuals such as B. M. Birla have been in the United States discussing a loan by the Export-Import Bank for a private steel mill in India. The same group has approached British interests and there is a British proposal now under consideration, I believe, for a steel mill to be constructed under the direction of a British group, with private capital. ADHERENCE TO MIXED ECONOMY Senator HICKENLOOPER. Well, do you think that running through the minds of the Indian people is the feeling or conviction that the American way of life or the private-enterprise system we have in America is better than the Soviet system? Mr. ALLEN. The Indians adhere rather strictly to a mixed economy, which is to say that certain activities they believe should be under- taken by government and others by private capital. It looks as if the Prime Minister, Mr. Nehru, has taken a strong position with regard to the socialization of industry during the last few months. I talked very specifically with him about that subject. He told me that he was confident there would always be a large role for private enterprise and private initiative in the Indian economy. Senator HICKENLOOPER. Is there any foreign private capital oper- ating in India? Mr. ALLEN. There is considerable foreign capital there. Not a great deal of new capital is going in at the moment, although taking the last 3 months there was inaugurated the largest private American capital expenditure in India that has ever been made. That is the Standard Vacuum oil refinery in Bombay which is a matter of $30 million in 1 project. Other smaller projects are continuing to go forward. I partici- pated in the inauguration of a project built by the American Cyan- amid Co., Lederle Laboratories division, north of Bombay, some time ago, which produces aureomycin, folic acid, and other chemicals and drugs. There are various projects of that sort which are either built or under consideration. Senator HICKENLOOPER. It has always been difficult for me to reconcile a situation under which India has not only accepted but sought additional gratuities or help by way of technical assistance and so on from the United States and from our system; and yet has rather 118 TECHNICAL ASSISTANCE PROGRAMS consistently followed the Communist Party line in international affairs on matters where the question of Communist aggression has been very acute. I wonder sometimes how much appreciation of the so-called free sections of the world exists there, in view of their rather consistent adherence to the Communist position in international matters. Now, I am not suggesting, by this token, that one should find, nor should we expect to find, adherence to our way of thinking as a result of dollars necessarily, but I am a little mystified by their stand. DISAPPOINTMENT IN INDIA'S ATTITUDE In other words, here is the Soviet Union that has apparently done nothing in an economic way or any other way to help India, but still seems to have their sympathetic cooperation, or has it on many occa- sion; whereas from the standpoint of the Western World a great deal has been done for India and a great deal has been put in there and yet we seem to have their passive antagonism-I do not know just what that is—but it is in the term anyway. It is a little confusing and one wonders what the net result of any expanded program of contribu- tions there would be. Mr. ALLEN. I may say, Senator, that the position taken by the Government of India on international affairs during the last 2 years, has more than once been the subject of considerable pain to me. Senator HICKENLOOPER. Well, I agree. One could say one of dis- appointment, and I think it gives occasion for thought as to whether or not our programs for making the world better, so far as the free world is concerned, should be expanded, curtailed or kept at approxi- mately the level as now. I think that is all, Mr. Chairman. Senator MANSFIELD. Senator Fulbright? Senator FULBRIGHT. On that last line, Mr. Secretary, the position of India that has been raised, is it that it is simply not in accord with ours or is the position taken in accordance with the Communist line or the Peiping line? Mr. ALLEN. Certainly it is not a straight Moscow line or a straight Peiping line, although from time to time in individual matters, the Indian Government policy-I think we have to look it squarely in the face is quite parallel to that taken by Moscow and Peiping. As an example, take the admission of Communist China into the United Nations. While the reasoning of the Government of India is different, the end result is that both are working very hard toward admitting Communist China into the United Nations. I think we have to admit that the Indian Government's policy is closely parallel to that of Moscow in that particular instance. I do not believe, however, that it is because India is in any way taking its directions from Moscow or Peiping. I think the Indian Government has reached that conclusion and supports it from an independent point of view, based on what India considers proper and in the best interest of India. Senator FULBRIGHT. Do you think that it would be to the best in- terests of the American people for India to go ahead and aline itself with the Soviet power? TECHNICAL ASSISTANCE PROGRAMS 119 A • Mr. ALLEN. I do not think so, I think it would be most harmful. Senator FULBRIGHT. Harmful to us? Mr. ALLEN. I think it would be most harmful to us. ASSISTANCE FIGURES BROKEN DOWN Senator FULBRIGHT. I have one or two more questions. You used that figure of $472 million. Does that include the wheat grant? Mr. ALLEN. I am glad you brought that up, Senator. I wanted to break down the figures. The wheat money should not be referred to as a wheat grant. It was a loan- Senator FULBRIGHT. Does it include any grants or loans for other than straight assistance? Mr. ALLEN. Broken down, technical assistance and economic aid amounted to $268.6 million. But that includes the year 1955, when something like 70 percent of the economic aid will be on a loan basis, not on a grant basis. The United States wheat loan was $189.7 million. Senator FULBRIGHT. What year is that? Mr. ALLEN. The wheat loan was in 1951. Senator FULBRIGHT. 1951. Can you break the figures down so you could tell us what the technical assistance program has been as dis- tinguished from any kind of a grant or loan which has nothing to do with what we call technical assistance, that is, teaching them how to help themselves? Mr. ALLEN. During the first 2 years of our program in India, eco- nomic aid and technical assistance were not separated. During 1951, which was the first year, $650,000 was approved under technical assistance. In 1952 that figure was $52.79 million, and in 1953 the figure was $44.1 million. In 1954 the appropriation was sepa- rated as between technical assistance and economic (or development) aid. Technical assistance in 1954 was $27.6 million and economic aid was $60.5 million. In the current fiscal year the figure for technical assistance is $15.4 million and for economic aid in $68.3 million, of which about $8 million will be expended on a fiscal year 1954 project. COORDINATION OF PROGRAM Senator FULBRIGHT. Was there any difficulty in your experience in India in the coordination of the technical assistance in the FOA pro- gram? Mr. ALLEN. No; they have been always operated separately by the same group of individuals in India and very closely coordinated, not only within the organization but between the FOA and the Embassy. That was one of the things I had in mind when I referred to the very fine way in which the program works in India. There has fortu- nately been no conflict or irritations or other difficulties between the regular operations of the Embassy and the FOA mission. FOA has operated in effect as practically a part of the Embassy structure, just like any other section of the Embassy. Senator FULBRIGHT. FOA is scheduled to expire this fiscal year; is that correct? 120 TECHNICAL ASSISTANCE PROGRAMS Mr. ALLEN. I believe that is the indicated wish of the Congress. Senator FULBRIGHT. Do you think that the technical assistance pro- gram would be the better combined with the United Nations program or do you think we ought to continue to do both? Mr. ALLEN. I think we should continue to do both, sir. I was very interested in the testimony of Dr. Van Kirk on that subject. I respect fully his views, and I certainly respect, particularly, the motivation of them. At the same time, I have seen both programs operate in India and I myself would not support a proposal that our technical assistance be operated entirely through the United Nations. At the same time I would very cordially support a continuation of the United Nations program. The United Nations is operating in India through several of its agencies and is doing good work. However, the U. N. faces many difficulties just as we face other kinds of difficulties in our program. Difficulty of recruitment is one thing particularly felt by the United Nations, which has trouble in getting the best type of men. In our United States technical assistance program, we are able to call on the very large group of well-trained county agents who have been referred to earlier in the testimony. EXPERIENCE IN HYDERABAD I would like to tell you of an inspiring experience I had with one American county agent in Hyderabad. I forget where he was from, but somewhere in the Middle West. He went down to Hyderabad when he first got there Senator FULBRIGHT. What was his name? Mr. ALLEN. I was trying to get his name. May I supply that for the record? Senator FULBRIGHT. Yes. (The name is W. Hugh Walker, from Texas.) Mr. ALLEN. I could also tell you of another man whom I had in mind. I am a little hesitant about selecting his case because he comes from my home State of North Carolina. He is Mr. Jameson who worked wonders in the Punjab. I saw his work with Senator Know- land. This man [Hugh Walker] had a rather special experience. You may know the political history and background of Hyderabad. The ruler was the famous Nizam of Hyderabad, who was a Moslem. The great majority of his people were Hindus and there was hesitation on the part of the Nizam to join up with the Union of India when it got its independence in 1947. He finally had to submit to what the Indians call "police" action. Fighting went on for about 3 weeks, with actual military conflict, before Hyderabad was brought into the Union. The conflict resulted in a very difficult relationship. This American county agent, who as far as I know had never been outside of the United States before, went down there because the local development commissioner, who was a very fine man and had studied abroad, knew that the area ought to be developed had asked for an American tech- nician. So, he [Walker] went to a training center where they were training Indians to be more or less what we would consider county agents, or TECHNICAL ASSISTANCE PROGRAMS 121 community development workers. Nobody paid any attention to him. He could not speak the local language, so when he was out in the country he could not say a word to the people in the villages but he had that human touch that so often the American county agent de- velops. He stayed for 6 months without. losing his temper, without being frustrated and without saying, "Why did I ever leave my com- fortable home and position in America and come away over to this benighted place where nobody seems to want me?" When I visited Hyderabad, he took me to this same community cen- ter. He showed me all the Indians who had been working with him in the last 2 years, and who were about ready for graduation. Well, he had established a relationship with them that was so warm that even though he still could not communicate directly with them in the same language, he had a great big ham of a hand and he would stick it out to them and the first thing they saw were callouses where he had been working with them in building a road from their camp to the main highway. They all had worked with him and they all stuck out their hands. They all knew exactly what he was talking about. They were proud of the callouses on their hands. It was a revolutionary thing in Hyderabad to see Indians, most of them of a little better class and education than average since they had to be high-school graduates in order to qualify for this position, stick- ing up their hands and grinning while they were showing their cal- louses with this American county agent. It was an inspiration. Prime Minister Nehru himself had been up to this same location about 3 or 4 months previously and he had been so impressed with that experience that he spoke to some ten or fifteen thousand people at a meeting afterward for 40 minutes and for 30 minutes of that time he spoke of the dignity of labor and the fact that Americans were the only people in the world who really accepted the idea of the dignity of labor. Senator FULBRIGHT. I gather from what you say that you would draw the conclusion that in some respects it is a successful program. Mr. ALLEN. I do, Senator. Senator FULBRIGHT. Toward better relations? Mr. ALLEN. I do, sir. REASONS FOR AWAKENING IN RURAL AREAS Senator FULBRIGHT. But you seem to be at a loss to explain the recent development on the part of the Indian villagers. Do you think that might be attributable to some extent to the rise of nationalism? Mr. ALLEN. Yes. I am glad you brought us back to that again because I would not want the record to show that I had no possible explanation of this sudden awakening in the villages. I think that one factor is the rise of nationalism, which began some- time before India achieved independence in 1947. This awakening of the villages is tied in with the activities of Mahatma Gandhi in the national movement. For the first time the villagers feel that they own their villages. Always in the past the villages were owned by somebody else the Moguls or the British or the maharajas, but it wasn't theirs. Coming along with the idea that the nation belongs to them comes the idea that 122 TECHNICAL ASSISTANCE PROGRAMS their own village is theirs and that they could and ought to do some- thing about it. Senator FULBRIGHT. Well, is it a fact that for quite some years India also was economically exploited to a rather high degree by the British? Did they not draw a considerable amount of economic sus- tenance from India? Mr. ALLEN. They did, although I would want the record to give an honest impression of my views on that. I am not disposed to make an all-out castigation of the 175 to 200 years of British rule in India. I might point out that Indian maharajas have exploited their own people a good deal, and I might point out that the Moguls did not contribute to the upbuilding and development of India. Senator FULBRIGHT. Well, I think that is a very good question, and you might even argue why the maharajas were permitted by the Brit- ish to retain their power. Why did they not eliminate them-but that is too big a problem. All I am interested in is that I did not want to have the record imply that there was not any explanation of this very marked enthusiasm that has arisen in India and the desire for a change, which you mentioned. It seems to me that it does grow out of Mahatma Gandhi's activities and the acquisition of freedom from colonial status and freedom from the domination of the British. I think that those of us who come from the South in this country appreciate that a little more. perhaps, than those from the North, because in our case we recently emerged from colonial status, you might say, under which practically all the valuable assets were owned in Boston and New York. We now are beginning to achieve a reasonable standard of living in the South, so I think we appreciate what is going on in India a little more than some of the others. I think that their enthusiasm largely is attributable to gaining their freedom-whether or not they will be able to make any progress is another matter. I don't know about that. There had been, from one point of view, exploitation for 100 years and more by the British Government, rather than from the natives. They were not very successful in raising the standards of living or edu- cation, and the record would seem to indicate that it is not now highly educated as a nation. INDIAN EDUCATION Can you tell us what percentage of illiteracy there is in India now? Mr. ALLEN. The latest figure that I have seen used is an estimate in 1951, which shows that perhaps 20 percent of the adult Indians-no, the Indians over age 6-could read and write. Senator FULBRIGHT. In other words, 80 percent illiteracy. Mr. ALLEN. 80 percent illiteracy, in 1951. Senator FULBRIGHT. Then you would not say that the population, as a whole, suffers from overeducation? Mr. ALLEN. I would not, sir. Senator FUBRIGHT. And I submit that it is a very small group of Indians, comparatively speaking, who were able to go abroad to Eng- land or the United States. After all, out of over 300 million, much over that, 3,000 or 4,000 is not a very high percentage, is it? TECHNICAL ASSISTANCE PROGRAMS 123 Mr. ALLEN. No, sir. Senator FULBRIGHT. And is it not also true that many of those peo- ple studied such fields as law, which is the favorite subject, and since India was not self-governing then, there were not any places open to the lawyers in the government, because those were taken up by the British civil service; is that not true? Mr. ALLEN. That is correct, sir. And that is one of the significant changes in recent years in the system. The types of studies which Indians are engaging in abroad is changing from law and literature or philosophy to more technical subjects, such as agriculture. Senator FULBRIGHT. That is what I wanted to clear. It had been the type of education-fields that were not suited to the needs of the Indians. Is that not a better way to put it? Mr. ALLEN. Yes, sir. Senator FULBRIGHT. And there is plenty of opportunity today- well, there is a great need, I would say, for people being trained in technical subjects, which is the objective of the technical assistance program, is it not? Mr. ALLEN. Yes, sir. Senator FULBRIGHT. And I mentioned the situation in the South, that I was talking about a moment ago, because I think that was the key to the rejuvenation of the South in the last 30 years. I look upon the technical assistance program as somewhat similar to that--to take it to the villages and populace, take them the knowledge which exists in this country and other countries; is that not really the objective? Mr. ALLEN. Yes, sir. Senator FULBRIGHT. Rather than the granting of economic aid— those are two different programs, are they not? Mr. ALLEN. They are two different programs, yes, sir, economic or developmental aid, and technical assistance. MOTIVES OF UNITED STATES Senator FULBRIGHT. Now, I will ask you this: You do not really feel that we are going into India primarily as humanitarians, are we? That is only one of the reasons, is it not? Mr. ALLEN. Only one, and I think not the most important. At the same time, I do believe that we would be writing the Amer- ican public short if we did not admit that some of the motivation of the average man in the street in America has an element of humani- tarianism in it, when he supports this program. Senator FULBRIGHT. Well, I am inclined to think that may be the stronger motive of the man in the street over here who has not studied this carefully but from the point of view of policy and your point of view as Assistant Secretary of State, there is a much stronger interest, our own interest, do you not think? Mr. ALLEN. Yes, sir. Senator FULBRIGHT. And I do think that there is confusion that arises between these two activities when you lump them together, such as grants of wheat, under one program into this program. It is often publicized that way, and I think it causes confusion. Mr. ALLEN. Senator, may I add one point to the discussion of why this rather sudden awakening of the villages of India has occurred? I should point out that it is taking place in other areas of the world, though perhaps not so conspicuously as in India. 124 TECHNICAL ASSISTANCE PROGRAMS Take Iran, as an example. It is also spreading very rapidly in Iran. I believe that one element which should be mentioned in ex- plaining why this happens is the spread of communication during the last generation-the development of printing for public consump- tion, radio, travel, motive power, automobiles, airplanes, all of the great ways in which people learn what is going on elsewhere. All of those things seem to be a part of the reason why there has been this awakening in rural villages which have been asleep for so many years. Senator FULBRIGHT. I am glad to have that observation. Iran was politically under the domination or control of England, and you might say economically also, for her oil was under the control of the Anglo-Iranian Oil Co. Mr. ALLEN. Iran was traditionally divided into spheres of eco- nomic influence between Russia and Britain, Russia being predom- inant in the north and Britain predominant in the south. INDIAN POLITICAL ATTITUDE Senator FULBRIGHT. One last observation, rather than a question, perhaps. Do you think, then, regardless of what attitude India takes, that she is what you call neutral rather than being sympathetic or com- pletely going along with the opposite of our view? Do you think our efforts in India up to now are justified if India simply makes a success of her self-governing system and does not degenerate into a dictatorship thus losing her democratic system? Do you think that of itself is of value to this country? Mr. ALLEN. I think that it is of value, and my opinion is that that consideration would in itself justify our technical assistance and eco- nomic aid. I should hope, however, that in time Indian foreign policy and ours might become somewhat more in accord through the course of nat- ural development, in the national interests of the two countries, rather than through any political, economic or financial pressures brought to bear. Senator FULBRIGHT. Would you say it is more likely or less likely that it would be in accord with ours in the future, rather than in accord with an authoritarian system? Mr. ALLEN. I should say it is much more likely that her interna- tional views will be similar to ours if she retains the democratic system. Senator FULBRIGHT. Would you say that she would be more likely to agree with ours if ours is right? Mr. ALLEN. Yes, sir. Senator FULBRIGHT. That is all. Senator MANSFIELD. Senator Aiken? INDUSTRIAL AND AGRICULTURAL DEVELOPMENT Senator AIKEN. I am going to make my questions short. I realize there is not much time. Mr. Allen, what is the annual per capita income of the Indians? Mr. ALLEN. I think it is about $56 per capita. Senator AIKEN. $56 per year. What is the average life span of the Indian? TECHNICAL ASSISTANCE PROGRAMS 125 Mr. ALLEN. About 32 years. Senator AIKEN. In other words, the average income is about $1 a week; would that be about right? Mr. ALLEN. Yes, sir. Senator AIKEN. About 15 cents a day. Do you think this level would be applicable to the other states of Southeastern Asia? Mr. ALLEN. I should say yes, generally; yes, sir. • Senator AIKEN. I mean generally speaking. Mr. ALLEN. Yes. Generally speaking. Senator AIKEN. Now, the technical assistance program has been devoted almost wholly to agriculture; has it not? Mr. ALLEN. The largest emphasis has been on agriculture; yes, sir. Senator AIKEN. Has industrial development in India more or less kept pace with the agricultural development? Mr. ALLEN. Senator, in India there has been a spectacular improve- ment during the last 3 years, almost phenomenal, as a matter of fact, in agriculture. Some agricultural goals for their 5-year program were reached at the end of last year, after 3 years. Senator AIKEN. There has been industrial development also? Mr. ALLEN. There has been industrial development also. Senator AIKEN. And foreign money has been invested in India and the other Southeast Asia states. Is there some money from United States private capital? Mr. ALLEN. Some; yes, sir. Senator AIKEN. Now, if industry developed in India and other states over there, that would lead naturally to a desire for markets? Mr. ALLEN. Yes, sir. Senator AIKEN. And they desire to export to the United States, as I understand it. Mr. ALLEN. Yes, sir. Senator AIKEN. Products from their industry. Mr. ALLEN. Yes, sir. Senator AIKEN. Now, assuming that instead of 15 or 25 cents a day, the average income of the Indian and those others was $2 a day. How would that affect the pressure on exports? Mr. ALLEN. They would be very anxious to increase their export markets, yes, sir. Senator AIKEN. Would they be able to buy any more, to make any sales from their own country? Mr. ALLEN. If their average income was $2 a day rather than 15 cents a day, they would be much greater importers of foreign commod- ities also. Senator AIKEN. Yes, sir; and they would also be better customers for their own industry, would they not? Mr. ALLEN. Yes, sir. Senator AIKEN. Would technical assistance, if continued-or has technical assistance had any effect on prices, wages, living standards, and allied subjects, among the Indian people? Mr. ALLEN. The most spectacular increase has been in the amount of food available, up to the present moment. Other developments are slower. India is now engaged in the biggest development of the utilization of water in its history. 59637-55-9 A 126 TECHNICAL ASSISTANCE PROGRAMS Many of those projects, however, are quite long ranged. I recently flew over irrigation canals in the Punjab area. I regard those canals that have been built in the last 5 years as perhaps 1 of the 10 most important single events in the entire history of India. Senator AIKEN. You feel that continuation of technical assistance and economic assistance to India will have the effect of raising their standards and purchasing power generally? Mr. ALLEN. I do, sir. Senator AIKEN. And would you agree that the real purpose of the technical assistance program is to enable these so-called underdevel- oped nations to convert their resources, either manpower or natural resources, into more purchasing power? Mr. ALLEN. That is a way to put it; yes, sir. I, perhaps, would not have thought of phrasing it exactly that way myself, but I find no difficulty in accepting that characterization as the first purpose of the technical assistance program. Senator AIKEN. And of course, higher purchasing power of the people of India and those other countries, too, would perhaps have a political effect of making them more resistant to the inroads of com- munism? Mr. ALLEN. Yes, sir; very definitely. Senator AIKEN. Something has been said concerning the reasons for the advances in India and the other countries over the last 10-year period. Would you agree that the American GI had some effects in foreign countries by creating and demanding a higher standard of living wherever he went? Mr. ALLEN. Yes, sir, I would. That is a part of the development of communications, of human communications, if you wish-personal contact with peoples of the world who never saw a man outside of their own village until recently. Senator AIKEN. I have no more questions. Senator MANSFIELD. Thank you, Mr. Secretary. The next witness is the Reverend Frederick McGuire. STATEMENT OF REV. FREDERICK MCGUIRE, REPRESENTING THE NATIONAL CATHOLIC WELFARE CONFERENCE Father MCGUIRE. Senator, I am Father Frederick McGuire, exec- utive secretary of the mission secretariat, which is a coordinating office for all the American Catholic foreign missionaries through the world. My immediate superior is Bishop Fulton Sheen. I have not a prepared statement, but I would like to make a state- ment here, and then submit myself to whatever questions might be offered. Senator MANSFIELD. Proceed, Father. Father MCGUIRE. First of all, I have had a fair amount of overseas experience, having spent 18 years, from 1932 to 1950 in the Far East. In the immediate postwar years, it was my duty to oversee and co- ordinate all of the Catholic welfare work in China; in connection with that I had intimate relations with the UNRA, China Relief Mission, the Economic Cooperation Administration. Since that time, I returned in 1952 to survey the situation of the refugees in Hong Kong, and have made intermittent trips to the Latin- TECHNICAL ASSISTANCE PROGRAMS 127 American countries, to look over their work, that is, the work of the missionaries in that area, and since 1950 I have watched with a great deal of interest the work of the point IV operations throughout the world, having followed it as closely as my duties would permit. EMPHASIS ON MORAL OBLIGATION First of all, Dr. Van Kirk stressed the moral obligation of the American people, and while this obligation might not be too much stressed when administering a program in a foreign country, as Am- bassador Allen indicated, it still seems to me of vital importance in selling the program to the American people. Recent statistical studies have shown that the American population, about 7 percent of the world population, has or is producing 45 per- cent of what is called the gross production of the world. We have today in storage close to $8 billion worth of surplus com- modities at a cost of almost $700,000 a day in storage costs alone. While you have indicated, Senator Mansfield, that we are a debtor Nation, the largest debtor Nation in the world, we still are a surplus. Nation when it comes to economy. In this day and age, I believe we are neighbors to the whole world. I have had the privilege of living with people of another color and another race and I feel I have learned much more from them than I ever taught. As the result, I have a deep sympathy for those of another nation which is unfortunately less developed than our own, due to a multitude of reasons, which are too numerous to go into here. I do know from my own experience, living at grassroots level with the people of China and having traveled in the Philippines, in India, and in Japan, as well as in the countries of Latin America, that the people at grassroots feel a deep sympathy for the chances that have been offered to them to develop themselves as the result of these pro- grams of technical assistance. I speak in support of the point IV program not because of any contractual relations that have been entered into by the Catholic mis- sionary group or Catholic service groups, because such are almost non- existent, we have not sought any contracts with FOA-we have sug- gested a few programs that might, in our estimation, be supported, in order that they might help the people. FOA RELATIONS WITH MISSIONARIES IN FIELD We have suggested that the point IV program might be helped if there were a closer interrelation between the FOA people in the field and the missionaries in the field, and I speak not only of the Catholic missionaries, but also of the Protestant missionaries; that these men and women know the thinking of the people, and that they are equip- ped, not technically perhaps, but psychologically, to develop this pro- gram in a manner that it would have an impact upon the people which in many cases it is not yet having. In the back country, for example, east of the Andes, in Bolivia, a country which is presently in a great state of unrest, there are mis- sionaries working there who are really capable of pushing forward projects of community development. 128 TECHNICAL ASSISTANCE PROGRAMS Unfortunately, many of the technicians in Bolivia are so engrossed in administrative details that they are not able to get away into the field. For one thing, they have to spend a great deal of their time in drawing up blueprints in order to obtain the funds necessary for next year's program. It seems to me that about half their time is spent in drawing up blueprints, doing paperwork which is required in order to convince the people back here that the programs are worth while. There are not sufficient technicians in the field in the sense that these technicians could make a real impact. Some months ago, Mr. Nasser, of Egypt, pointed out that the program in Egypt had come to be called the chicken program, and was laughed at, mainly because the people had never seen the program in operation. In the present state of things, the program calls for a government- to-government operation. Senator Fulbright, in questioning Ambas- sador Allen, I believe, brought out the fact that a small proportion of the people have access to higher education. That is true in all of the undeveloped areas of the world. It is too common that these people, once they receive an education, no longer have any desire whatsoever to soil their hands. That is why, for example, the scholar in China grew the long fingernails, to indicate that he never dirtied his hands from the time he became a scholar. Most of the people who have had access to higher education withdraw then from the life stream of the people in the village and so your Gov- ernment administrative personnel do not thoroughly understand the problems in the village. Therefore, I think that in the administration of a point IV program, it is more and more necessary for the technicians from the United States to get out beyond the capital city where the government is cen- tered, and down into the villages, and come to know the people, and one of the quickest ways for them to know and understand the prob- lems of the people is to have contact with those who are living there and have lived there for a number of years and intend to live there for many more years, and perhaps long after the point IV programs are no more. It is quite possible without contractural relations, without any large grant-in-aid to any particular missionary project, to have the help and advice of the missionary people wherever they may be in these underdeveloped countries. NEED FOR LONG-TERM APPROACH There is one other phase I would like to stress, and that is the need for a long-term approach to this problem of technical assistance. There are certain funds allocated here by the Congress of the United States for these programs. They are allocated according to country. The programs are then offered by the host country. They are gone over and if they are considered worth while, they are sent up here to Washington into headquarters and they are finally passed here and then the government of the host country, the ministry responsible for agriculture, or health, or education, must take those programs up be- fore the congress of their own country, or their parliament, and eventually try to get it through, and sometimes it may happen that having fought this thing all the way through it is passed and certain funds are allocated by the host country to match the funds provided TECHNICAL ASSISTANCE PROGRAMS 129 by the United States Government, then it is discovered that the United States Government can no longer fulfill those obligations, because the fiscal year has passed, and the funds are unallocated, and the project dies. Now, this does not win friends nor influence people. This is one way of destroying the very objective of the whole program, which is to de- velop an understanding between those, our two nations. I would therefore hope that the Congress of the United States would consider the point IV program on a long-term basis and a long-term agency, whatever that agency may be. KEEPING ECONOMIC AND MILITARY PROGRAMS SEPARATED There are many of us who feared when the Foreign Operations Ad- ministration came into existence, that the fact that the military pro- gram, the economic grant-in-aid program, and the technical assistance program, were all under one rule, would militate against a proper understanding of the technical assistance program in foreign coun- tries. That is what Dr. Van Kirk indicated it was possible might come to pass, that the people would think that our technical assistance pro- gram was only one way of buying their military support in the cold or hot war which we are waging against Soviet communism. In my experience of the past 2 years, this has not happened. In the field, the military program is quite distinct, if there is a military pro- gram, from the technical assistance program. But it is my belief that here in the United States the people of the United States, as a whole, do not understand the distinction between. the technical cooperation program and the economic grant-in-aid pro- gram. I think that is why you do not have your offices flooded with mail begging you to keep this program going, because I have talked in many parts of the United States in support of this program, and have met with enthusiastic audiences constantly when I based it on the tech- nical cooperation idea and not on the large economic grants-in-aid idea. I think there has not been done in this country a good promotion job on technical cooperation. As a matter of fact, I believe it was the intent of the Congress when the first technical cooperation adminis- tration program came into being, that no funds could be used in the United States to sell the program to the people of the United States. Perhaps that has been changed since, but that was the intent of Con- gress at that time, no promotional work would be done in this country to sell the idea of technical cooperation to the people of the United States. I think it is necessary. I think the people of the United States will respond and respond most generously and would want to see this pro- gram go on. I think also, as I say, that the Foreign Operations Administration today is keeping these divisions clear in their own administration and certainly that is true from my observation in the field. I do believe that in certain areas technical cooperation is not enough. I think that capital grants-in-aid are needed to spark certain projects. and to get them going. That can be worked out. It need not be called technical cooperation. It could be through a separate department in Government but I think 程序 ​130 TECHNICAL ASSISTANCE PROGRAMS in certain areas capital grants are needed in order to develop the country. NEED FOR PROGRAM IN FIGHTING COMMUNISM I go along with the idea completely that we are trying to stave off through these area programs the inroads of communism. I look upon communism not as a political measure. but as a philosophy and ideology which is dedicated to the destruction of Christianity, complete and total, and I say that whether that communism be operative in China as I saw it grow, having lived in the original Communist area for 2 years and running from pillar to post, then having taken over the administration of the missions in the original Communist capital in Juikin in Kiangsi Province in 1936 after movement out of south China-I say, I believe it is dedicated completely to the destruction of Christianity and therefore it is a Christian duty to fight it, and I believe that this program if it is instrumental in fighting such a Com- munist program, then I am all for it not only because I think it is our moral obligation to mitigate the deplorable conditions under which more than half the populations of the world live but also for this simple reason that it is defeating an operation which is vile, I say, whether it is in China or in Russia, in Bulgaria or in Yugoslava. That is all. Senator MANSFIELD. Any questions? UTILIZING TRAINED STUDENTS Senator AIKEN. Father McGuire, my only question is this. What is your observation as to the effect of these thousands of stu- dents from foreign countries who come over to study for the work they would like to do but they can't be utilized when they go home? I know in Latin America, several thousands, as many as 3,000 from 1 country have come here, and we have them coming from all over the world. Some come by scolarships and some come on a foundation basis, and some are sent in and their education is paid for by the Government; but what do they do when they go home? Father MCGUIRE. Well, Senator, I believe that those who are care- fully selected, having had not those whose uncle happens to be in the government, as is so often the case, but those who are selected because of their ability and sent here, return to do a very effective job. We have at the present time in the United States approximately 34,000 foreign students. Many of them have come here on their own, supporting themselves, and some of them have come here on church- sponsored scholarships. Not all of those are carefully selected, I can assure you, having had some work in it myself. However, I believe that those that have been chosen as the result of, say, the Fulbright or Smith-Mundt bill and so forth and who are carefully selected because they have done a good job of work, I think that they return, from my own observation and do an excellent job for their own country. I have met quite a few of them in travels. Incidentally, we do sometimes educate them and then let them die. For instance, 3 years ago I went to Hong Kong to survey the situ- ation on Chinese intellectuals. We surveyed it and found almost TECHNICAL ASSISTANCE PROGRAMS 131 • 20,000 university graduates who are still rotting in Hong Kong be- cause we have not found means of putting them in production. That is a pretty sad situation. Senator AIKEN. And they become frustrated? Father MCGUIRE. Definitely. Not only frustrated but suicidal. NEED FOR SEPARATE PROGRAM Senator MANSFIELD. I am glad that you referred for the first time to the impact of the technical assistance point IV program in Latin America. We know the benefits of the point IV program in Latin America which was put in there some 14 or 15 years ago, though not by that name, and it operated very effectively there. It operated on its own with no connection with the military program or other programs. The thought comes to us that we would like to see the return to that concept that the point IV program should be separate. There should be no termination date, as is the case with aid programs, and no allo- cation by country or by regions. This subcommittee, I am sure, would agree with the thesis advanced by you and Dr. Van Kirk that the tech- nical assistance program must stand on its own feet because it is on that basis that it has achieved its greatest effects. Now, you mentioned, Father, that you thought it should be on a government-to-government basis. Some of us have thought that it should continue on a person-to-person basis and that while negotiations must be with governments, we must recognize that for success we have to get enough assistance to the people who are working. If we do not the result is, as in France and Italy today, a large Communist Party. The purpose of the point IV program is that these people such as doctors, nurses and sanitarians and so forth work directly with the people there and the same way with the civil administration. It is to be hoped that this kind of a program will be continued and greatly expanded because, as I see it, speaking broadly, and I am sure there are some who will agree, that is probably the most important element in the whole foreign policy. But we do want to see a continuation of this program on the basis of the Latin American foundations, so to speak, and we want to see it turn away from any alliance with the military or other aspects because it should stand on its own feet. Now, Father, if there are any other points you wish to make—and this goes for you, Dr. Van Kirk, as well-this subcommittee would be glad to hear them and incorporate them in the record. Take your time, but we would appreciate your views; and I think the subcommittee has spent a very educational morning. Father MCGUIRE. May I make this remark? I perhaps gave the wrong impression. I believe it is the law that the present Technical Cooperation Ad- ministration must work government-to-government, in other words, no grants may be given unilaterally by the United States. It is a point of law. Now, I do not agree with that. I think that frequently we could go out and if we could bypass at times some of the ministries in the gov- ernment and go down to the people, it would be a better program. 132 TECHNICAL ASSISTANCE PROGRAMS Senator MANSFIELD. Well, Father, there is no reason that I can see why we cannot take advantage of the missionaries in various parts of the world. As you have said they have been there for years and some of them will be there for their whole lives at their job of work- ing with people and trying to lift them up spiritually and economically as well. I think perhaps it would be better if less time were spent in capital cities and on paper work and more time spent making con- tacts in the field. Then in that way we could bring more of the attri- butes of the better way of life on a person-to-person basis. This has been an excellent morning as far as this subcommittee is concerned. We have had three very fine witnesses and we have learned a great deal. Now, we will stand adjourned until 10 in this room Wednesday morning. (Whereupon, at 12:20 p. m., the committee adjourned to reconvene Wednesday, February 23, 1955, at 10 o'clock.) 4 1 TECHNICAL ASSISTANCE PROGRAMS WEDNESDAY, FEBRUARY 23, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., in room 457, Senate Office Building, Senator Mike Mansfield (chairman of the subcommittee) presiding. Present: Senators Mansfield, Fulbright, and Aiken. Senator MANSFIELD. The committee will come to order. The first witness will be Mr. Victor Reuther, representing the CIO. Mr. Reuther, will you take the chair and proceed with your testi- mony. STATEMENT OF VICTOR REUTHER, REPRESENTING CONGRESS OF INDUSTRIAL ORGANIZATIONS, ACCOMPANIED BY STANLEY RUTTENBERG Mr. REUTHER. My name is Victor Reuther. I am assistant to the president of the Congress of Industrial Organizations, and director of its department of international affairs. I am very grateful for this opportunity to appear before the sub- committee and verbally supplement the statement which we filed with you in behalf of the chairman of CIO's international affairs commit- tee, Mr. Jacob Potofsky, who regrets his inability to be here in person this morning. An emergency meeting of the executive board of the Amalgamated Clothing Workers is being convened in connection with the unity discussions which require his presence there. But I have worked closely with Chairman Potofsky in connection with this state- ment, and it reflects not only his personal views but those of the inter- national affairs committee of the CIO. I have with me the director of CIO's research department, Mr. Stan- ley Ruttenberg, who is familiar with the fiscal aspects of the question under discussion this morning, and who has testified on the subject on numerous occasions previously. Now, the interest of the CIO in this question is not a new-found one. As a matter of fact, we are very proud of the fact that from the very beginning of the discussions in the United States on the develop- ment of broad economic cooperation programs and technical aid pro- grams specifically the CIO was active in expressing its interest in see- ing programs of this kind launched and expanded. We saw in tech- nical aid a program that was of very great significance in supplement- ing the free world's defense activities. We feel very, very deeply that, 133 134 TECHNICAL ASSISTANCE PROGRAMS important as military defense is, simultaneously we must have bold economic cooperation programs and technical aid programs to help indigenous forces in the free countries to develop their own economies, without which they cannot make a significant contribution to our mu- tual defense. We believe that unless these two programs go hand in hand, we shall not be equal to the challenge which threatens our demo- cratic society around the world. The chairman of our international affairs committee, President Potofsky, also served as a member of the Nelson Rockefeller Advisory Board on Economic Development, which 4 years ago drafted de- tailed proposals calling for the launching of bold and extensive tech- nical assistance and economic cooperation programs around the world. As a matter of fact, many of the programs that are now under way have their origin in this Rockefeller Board on which the CIO was represented by President Potofsky of the Amalgamated Clothing Workers. I should like to address myself this morning to four main points in connection with this program. First of all, I should like to say that, as trade unionists have had some real experience in the problem of battling Communist infiltration and penetration, we know full well the extent to which the Communists have been able to forge poverty, misery and human insecurity into powerful weapons of aggression. In many instances they have captured the leadership in the struggle of people seeking a greater degree of economic and social security. It is a position of leadership to which they have no rightful claim. In many instances they have merely moved into a vacuum that existed because the free world has not sufficiently mobilized its resources to provide a positive alternative to the demagogic appeal which the Communists offer. And we believe that in this area of activity, in the field of economic aid and cooperation and technical assistance in raising living standards around the world, we have natural advan- tages which the Communist world and its satellite allies do not have at their disposal. UTILIZING SURPLUS RESOURCES In this area we are in a position to give them competition they cannot match. We come to you today in an urgent appeal that the United States, in concert with other nations around the world, mobi- lize not only the tremendous surplus resources which we now have available, but our even greater potential resources, in a bold, positive offensive to help nations help themselves by helping to put in their hands the tools that are needed to develop their own economies, so that they can forward their effort to raise living standards. The United States has provided a degree of leadership that has never been shown before in the history of mankind in this area. The whole experience of the Marshall plan is not duplicated in human history anywhere. We ought to be proud of the leadership we took in that. ČIO supported it from the beginning. Although we were not in complete agreement with all the administrative aspects of it, we felt that merely putting in aid at the top on the trickle-down theory, without sufficient guaranties that this aid would generate immediate improvement in the rise of living standards, was not doing justice to the great concept which General Marshall and those who founded the program had in mind. While we were critical of certain administra- TECHNICAL ASSISTANCE PROGRAMS 135 tive aspects of it, our support has always been strong for the program as such. Governor Stassen, of the Foreign Operations Administration, was before you some days ago. I understand he made available to you this significant chart showing the concrete results of Marshall aid in Europe, the direct relationship between the technical assistance aid and the economic assistance and cooperation that have been made. available to European countries, and the rise in their own productive capacity. It is our very strong feeling that if this kind of assistance can be offered to the people of southeast Asia, to the people of the Middle East and of Latin America, we can help them take important steps forward in meeting their own internal social and economic problems. We can give the people of those areas a real stake in a democratic future. And, by doing that, they can also increase their capacity to make a meaningful and realistic contribution to a common defense effort. We are conscious of the fact that there has been an effort in recent years in this country to rewrite the history of the Marshall aid pro- gram and of our aid program to Greece and Turkey. There has been an effort to interpret this assistance as a way of building up the strength of our competitors at our own expense. I think the record very clearly contradicts this. Our best customers around the world are those countries whose own economics are well developed. A country that does not have its own resources developed, that has a very low per capita investment in basic industrial equipment, low in- comes, standard of living and purchasing power, is a very poor cus- tomer. The Foreign Operations Administration has charted the effect of industralization of various countries on their purchases here in the United States. It is interesting to note that Canada, which is one of the most highly industrialized countries, purchases from the United States approximately $198.70 worth of commodities per capita. And down the scale you go to the least industrialized and least developed countries, where living standards are pitifully low, with India pur- chasing only 40 cents worth of commodities per capita from the United States. So it is also in our own self-interest in terms of providing a market for finished goods from American industries, a market for goods man- ufactured by American workers, to see the living standards of other areas raised-to see their own indigenous economies developed and strengthened. ACTIVITIES OF SOVIET IN TECHNICAL ASSISTANCE We are not unmindful of the fact that this has also occurred to the Soviet Union and her satellite countries. It is significant that the Soviet Union is not relying alone on the military threats and acts of aggression in the military field. The Soviet Union has launched an economic offensive. The Foreign Operations Administration reveals that this year the Soviet Union is advancing technical assistance credits to Red China in the amount of nearly $2 billion. And they are sending into China some 4,500 technicians. : 136 TECHNICAL ASSISTANCE PROGRAMS ፡ Now, the interest which the Soviet Union has in Red China is obvious. What should be equally obvious is the interest which the United States and the free world have in seeing the economies of the free nations of Southeast Asia, of the Middle East, of Latin America, equally strengthened, so that they can make their contribution to the common defense of freedom around the world, by raising the pitifully low living standards which the Communists so often forge into weapons of aggression. The direct economic aid this year of the Soviet Union to Red China alone is 10 times the amount which we are putting into India, for ex- ample, and includes 25 times the number of technical services of in- dividual technicians-25 times the number the United States is mak- ing available to India, that great country with its millions and mil- lions of inhabitants. The Soviet Union is also stepping up at a tremendous rate the trade fairs all along the periphery of the Soviet Union in those coun- tries where she hopes she will be able to create social and economic situations in which the door will be open to acts of military aggres- sion. In addition to the direct interest which the United States has in programs of this kind, the world organization of which our Nation is a member is also active. We are glad that through the statements of the Under Secretary of State, Mr. Hoover, the administration is indicating its full support for the contribution of some $8 million to the United Nations technical assistance program covering the bal- ance of the fiscal year. This action will remove a great deal of uncer- tainty and suspicion which has grown up because of the failure to date of the United States to make the balance of its contribution toward this fund. I understand that the problems which led to this action have now been removed. It is our hope that in the current discussions now going on in South- east Asia, participated in by Secretary of State Dulles, the United States will propose to the countries of Southeast Asia not only a mutual military assistance arrangement, but will also lay the ground- work for a bold and ambitious technical assistance and economic aid program that will help raise living standards in that area and be a source of attraction for countries whom we have been much too quick to label with the neutralist label and to imply that they are unsym- pathetic and unfriendly to the basic objectives and goals of the United States. I should like to file with the committee copies of a letter which I addressed to Secretary of State Dulles on the eve of his departure for the SEATO Conference in Southeast Asia, detailing our thinking on this question and expressing the hope that the United States, just as at a crucial moment at the end of World War II, it took the initia- tive and the leadership in coming forward with the Marshall plan, which captured the imagination of millions of people who had seen little hope for the future, will now, with the cooperation of many other countries, launch a Marshall program for Asia, for the Middle East, and for Latin America. TECHNICAL ASSISTANCE PROGRAMS 137 ADMINISTRATION OF PROGRAM I should like also to touch on the matter of administration of these aid and technical assistance programs. Our experience as partici- pants in the advisory bodies of various Marshall plan organizations from their very inception, leads us to conclude that if these programs are to be effectively administered and if the participation of the various departments-the State Department, the Defense Depart- ment, the Agriculture Department-whose activities in many in-- stances mesh with the basic work of our foreign aid agencies, are to be properly coordinated, then it is urgent that we retain a single unified agency, coordinating its broad policy in the foreign field, of course, with the policies laid down by the State Department. If we are to come forward with the kind of bold program which reflects the thinking of the people of this country and which coordinates the separate activities of the different departments that relate to the foreign field, then it must be under a single administrator who is responsible to the President and to the Congress. We come forward with no fixed ideas as to what this agency ought to be in name or who ought to head it, but we feel very strongly that it ought to be retained as a separate agency under a director respon- sible to the President and to the Congress. Senator MANSFIELD. Mr. Reuther, may I interrupt you there. Mr. REUTHER. Yes, sir. Senator MANSFIELD. You raised a very pertinent question with your recommendation for the continuation or the creation of a single agency to carry on this kind of work. In connection with the Marshall plan, you recall that was set up with a termination date of June 30, 1952, and because of the Korean difficulty it was supplanted by MSA, which also had a termination date of June 30, 1954. After the action by Con- gress allowing it a year more before it would be liquidated, this administration came down with the Foreign Operations Administra- tion to coordinate the conduct of all foreign aid in a single agency. And this began through Reorganization Plan No. 7, I believe. Now, we have been led to believe through all these years that those agencies were to be temporary in nature. But we find that they are continuing and growing and mushrooming all the time. Personally I want to say that I don't like the idea of new aid agen- cies of a permanent and temporary character. I recognize the need for aid, but I think in view of the testimony you have given this com- mittee this morning, that your view would coincide with mine to the effect that foreign aid is a part of foreign policy. Is that so? Mr. REUTHER. Well, certainly it ought to be governed in its broad policy aspects by the foreign policy as established by the State Depart- ment and concurred in by the Congress, certainly. JURISDICTION OVER MILITARY AID Senator MANSFIELD. Now, under the FOA at the present time we have a good proportion of money being spent for military defenses, military support, and military assistance of various kinds to foreign countries. It is my understanding that as far as the actual adminis- tration of the defense elements of the Foreign Operations Adminis- + 138 TECHNICAL ASSISTANCE PROGRAMS tration is concerned, it is 99.99 percent in the Department of Defense at the present time. Now, why wouldn't it be reasonable to assume that the Defense Department would be the agency which should be responsible, as it is now, for the continuation of military aid by this Nation? Mr. REUTHER. Well, sir, I would not for a moment argue that the Defense Department should not have jurisdiction over those aspects of the program which are purely of a defense character. As a matter of fact, our program in terms of making its maximum impact around the world would probably carry with it far broader support if our eco- nomic aid and our technical assistance were not so directly related to the defense program itself. In too many instances our offer of technical assistance and economic aid is being interpreted—and, of course, the Communists are doing their utmost to place their inter- pretation on it-as merely a bribe to draw them into common defense activities. And, of course, the so-called neutral areas of the world, who hope they can avoid being drawn into one camp or the other, are extremely cagey on this question, because of the close relationship which our economic aid has had to our defense assistance spending. Senator MANSFIELD. Then we would agree that military aid should be under the Defense Department, where it actually is at the present time. TECHNICAL AID AS A PART OF FOREIGN POLICY Now, to get back to what is left of the program, which is a hodge- podge of various aid projects, you have economic development, which has to do with the building of railroads, power projects, and things of that sort; you have Palestine relief, you have Korean relief. And then you have what some of us think is the most vital part of the program, and that is the technical assistance of the point IV program, which is purely a program, as we see it, by means of which we can help other people to help themselves. Testimony has been brought out to the effect, for example, that the average longevity in India and Southeast Asia is roughly 31 years, that there are health problems of various kinds which are endemic to the people of those areas, and that there are educational problems, security problems, and things of that sort. Now, the idea behind the point IV program-which is the program before this committee at the present time, is that it operates, or will operate, or should operate, on a person-to-person basis, in contrast to the Marshall plan, which you brought out in your testimony as being beneficial to those at the top but not dribbling down to help the people at the bottom, and which you supported. And it is a valid argument. It is a good argument, because I think that because of that deficiency we can see one of the reasons, at least, why we have such strong Communist parties in Italy and France today. We hope with the point IV program to work out, or to continue to work out, the person-to-person program by means of which our tech- nicians can go into foreign countries and can introduce new kinds of seeds, for instance, so that those people can grow more and better products per acre. We hope to increase their sanitation facilities so that they can lengthen their lives and enjoy themselves a little more. TECHNICAL ASSISTANCE PROGRAMS 139 We hope to increase their income a little more by means of this pro- gram, and have a better civil service administration, and so forth. Now, would you say that that is part of our foreign policy? Mr. REUTHER. Of course, it is a part of our foreign policy. But it is our contention that we can more effectively carry out the economic aid and technical aspect of our foreign policy if we retain the direct control for the administration of it in a separate agency which can handle the liaison relationship with the other agencies who are drawn into compatible technical aid programs. QUESTION OF TERMINATION Now, I appreciate the fact that there was a strong feeling that there ought to be some final termination date set on this whole program. But unfortunately the crisis which confronts us in the world has no foreseeable termination date on it. We are not doing justice to our own interest if we come forward with a pittance of our resources to deal with the challenge that confronts us from the other side. What is needed at this point, in our opinion, is a fresh look at this, and the courage to step forward and commit resources for direct economic aid, cooperation, and technical assistance comparable to those which we once put into the Marshall program. And just as it brought results to Europe, so in Southeast Asia, in the Middle East, and Latin Amer- ica, it will bring comparative positive results. Senator MANSFIELD. Mr. Reuther, there is no termination date to the longevity of the Department of State either. And that is the Department which under the Constitution is given the responsibility for the carrying out of our foreign policy. Why wouldn't it be all right to have an Under Secretary of State for Economic Affairs in the State Department to carry out the necessary aid programs so that there would be no duality of authority and no other voices speaking on foreign policy but the department which, under the Constitution, is charged with carrying out foreign policy and would have full and complete responsibility? Mr. REUTHER. I think you will find that over the experience of the past year, while there has been a good deal of discussion of the pos- sibilities of terminating the existence of the separate agency and moving it into the State Department, the mere fact that this discussion has been going on has had the effect of stymying a good deal of the activity of the Foreign Operations Administration. I know that in efforts on the part of industry groups and labor groups to assign their specialists in the field of increased productivity campaigns, for in- stance, in Latin America and the Middle East, the effect has been that the State Department has applied a brake to getting these prac- tical technicians out in the field to help local industry and local labor groups find their own way to increasing their own output and their own productivity. That has been the actual experience over the past year. I presume that protocol and diplomatic procedures always require the very long slow look. I believe that the urgency of the present situation demands that we not be inhibited or impeded by those kinds of considerations. And that is why I feel strongly that the main- tenance of the separate agency will make for better coordination and 140 TECHNICAL ASSISTANCE PROGRAMS for greater effectiveness and efficiency in the administration of pro- grams of this kind. NEED FOR SUNFED I should like with your permission to move to the final point that I wanted to stress. I raise it as an appeal that the United States have a new look at the specific proposal now under consideration in the United Nations called the SUNFED program, the Special United Nations Fund for Economic Development. This is an effort on the part of the world organization to assume some responsibility for fol- lowing up technical assistance work around the world with economic aid in getting projects underway that are vital in starting the develop- ment of many countries. We know full well that up to date the United States has had to carry the larger responsibility. We believe the situation is now ripe for tapping the resources of a great many other nations in this com- mon world effort to raise living standards. We believe that to do so might relieve a great many of the pressures we now have and which are building up in the field of international trade competition. We can open up and tap vast new markets for man- ufactured products and for technial skills of people in the various un- derdeveloped nations around the world. This is a real problem to us. It is a problem to management groups as well. We believe that the United Nations, in developing and going forward with the SUNFED program has shown real leadership. We regret very much that up to this point the United States Government has not made the modest initial commitment it has been asked to make in order to permit the launching of this program. SUNFED is really not a new idea as we show in the two documents presented here today. The Nelson Rockefeller Advisory Board came forward in 1951 with essentially this fundamental concept of develop- ing a worldwide attack on low living standards through a unified pro- gram and an international fund for economic development. It is expected that the initial amount of some $250 million would be sufficient to launch the program. Then, based upon voluntary con- tributions from such other nations as choose to participate, the work of the organization would be expanded. The United States share of this might be a modest amount of some $80 million. This contribution made now would put the United States on record as favoring this kind of program. It would be a symbol to the people in the underdeveloped areas around the world that the United States is prepared to put its resources into an effort of this kind. It is no secret that some of our strongest allies, on whom we are de- pending today in the Far East and who see eye to eye with us on most matters our Philippine allies, for example have been very, very critical of the fact that to this date the United States has given no indi- cation of its willingness to make a contribution to this program. And we hope that after the hearings held here the Senate will express itself vigorously in support of this SUNFED proposal. We have already taken the lead on past occasions in showing the world that we had a deep concern with the problems of people who are struggling and striving to raise their living and their health TECHNICAL ASSISTANCE PROGRAMS 141 standards. To back up this keen interest we should show we are pre- pared to make the contribution that is expected of us to this world ef- fort through the United Nations. We are not suggesting that this is in any sense a substitute for a host of other programs that are important to them, nor the activities of the World Bank, the International Finance Corporation and various in- ternational credit organizations. This is not a substitute for them, it is a supplementary activity that is needed now to make public and private loans more effective. I thank you very much for this opportunity to appear before you. If there are any questions, I will be glad to answer them. Senator MANSFIELD. Thank you, Mr. Reuther, for your interesting and provocative testimony. Mr. REUTHER. I request that this document "Will it be SUNFED or UNFED" be inserted into the record. And the letter to Secretary Dulles. Senator MANSFIELD. The letter will be included, and also the state- ment which you presented to the committee. [See p. 153.] Senator MANSFIELD. Senator Aiken? TECHNICAL AID NOT ENOUGH Senator AIKEN. Mr. Chairman, I had hoped in setting up these programs for aid to foreign countries in the last part of this last dec- ade that they would be of a temporary nature. I am also one who feared that it would be necessary to continue them longer than we had originally intended, due to the fact that the United Nations organi- zation might not be prepared to take them over within the length of time that many people had hoped. Now, we have an immediate situation before us, Mr. Reuther. I would regret seeing operating functions put back under the State Department, but I very much fear that I am in a minority, probably in this committee and in the Senate, and that these funds which have been handled by Mr. Stassen's agency may be divided up between the military and the State Department. And so we have to consider re- alities. I expect I am right in assuming that your organization is very much in favor of a continuation of technical assistance programs? Mr. REUTHER. That is correct, sir. Senator AIKEN. And that you would have them continued under whatever other agency the Congress saw fit to continue them, wouldn't you? Mr. REUTHER. That is correct, sir. Senator AIKEN. And you recognize I believe you so testified— that these technical assistance programs are a help in counteracting Communist propaganda in the underdeveloped countries. • Mr. REUTHER. You will not be able to counteract them unless you launch a bold, imaginative program in this field which is equal to the challenge. And we have not as yet launched it. Senator AIKEN. The assistance program alone in the field of econ- omy you think would not be sufficient? Mr. REUTHER. It alone would not do it either. We do need our mili- tary defense, we need our regional security pact of this character. 59637-55-10 142 TECHNICAL ASSISTANCE PROGRAMS However, they alone will not do it. What we are suggesting is that we need both, and we can afford both. ORGANIZED LABOR HELP IN UNDERDEVELOPED AREAS Senator AIKEN. I have heard it said that organized labor could be more helpful in counteracting the Russian penetration into various countries if greater effort were made to secure its cooperation. Could organized labor be more helpful in these underdeveloped countries? Mr. REUTHER. Well, organized labor has played a very important and significant role in helping the indigenous non-Communist trade- union forces who have perhaps to this date won more significant vic- tories against the Communists than we have won in the military field. I remember General Clay's having said to me in 1948, when I went into Berlin the first time after the war, that if it had not been for the successful activity of the non-Communist trade unions in Berlin in preventing the takeover by the Communist trade-union groups, he doubted very much that the Allies would have had the kind of climate which would have made it possible for them to stay on in Berlin. But, look, people at the trade-union level need tools with which to work, they cannot fight the opposing force by mere slogans and by words, they must show results. The American trade-union movement has won a solid basis among the people of this country as a strong, non-Communist force, because it has made democracy meaningful to our people; it has won for them a stake in our democratic way of life. It has won not only status and respect, but economic well-being and security. But what do we have to offer to people in India, Burma, and other countries in southeast Asia? Senator AIKEN. The countries in the Middle East, or our neighbor Latin American countries, where living standards are pitifully low, do we ask them to defend merely a slogan, or do we help them provide for themselves a kind of democracy which will be meaningful to them in terms of giving them an individual stake in it, in terms of individ- ual security for themselves and for their families? Mr. REUTHER. That is the contribution which the trade unions can help make. But they need tools to work with, they need the kind of overall policies which will provide a social and economic climate that will make it possible for democratic institutions to grow and expand and make their contributions. You can't promote democracy within a cesspool of insecurity. Senator AIKEN. Do you feel that the way that organized labor can assist most in combating the inroads of Communists in underdevel- oped countries is to work through the government instead of work- ing directly? Mr. REUTHER. We can work through every channel that is open to us, and we must work through many different channels at many differ- ent levels. However- Senator AIKEN. What other channels are open? Mr. REUTHER. We need assistance through Government in terms of providing broad economic aid in assistance programs and technical assistance. This will help us provide the kind of economic and social climate which will make it possible for us to carry on our work at the trade-union level. And so agricultural groups have a responsibility, and religious groups, and business organizations. TECHNICAL ASSISTANCE PROGRAMS 143 EXPANDING TECHNICAL ASSISTANCE PROGRAM Senator AIKEN. Well, would you expand the technical assistance program? Mr. REUTHER. I most certainly would expand it. Senator AIKEN. In what way? Mr. REUTHER. Well, most of all, you are starting with countries that are so backward that they aren't even in a position today to take ad- vantage of private capital investment offers that are available. And so we need the kind of seed money, so to speak, with which to provide the basic framework to build roads, to build means of communication, to develop the ports, et cetera, in order to put these countries in a posi- tion so that they can take advantage of private offers of investment in developing industries, et cetera. If they don't have roads and don't have power, if they have no labor force that is available that has any degree of industrial skill and efficiency, what investor, what employer, is going to make an investment in a country of that kind? But, if we can help them get their initial framework built-and that is what is envisaged in the United Nations SUNFED program, and that is what we ought to be helping them do through point IV-we can help them train their local people with the necessary technical skills, to help them get their own economy in a position so that they can take ad- vantage of these other offers that will flow, once the basic framework there is established. Senator AIKEN. That still adds up to the contribution of public funds being the principal ingredient for improving the lot of these countries. LABOR'S POINT IV WORK Does organized labor have anything in the way of a program itself for technical assistance? Mr. REUTHER. It most certainly has, Senator. Senator AIKEN. In the same manner that churches have testified they have a program? And what is organized labor doing in the way of rendering technical assistance? Mr. REUTHER. In concert with democratic non-Communist trade unions of other countries we have built a world organization repre- senting 54 million members in 57 different countries around the world. We have built in that world trade union organization our own little point IV program to help the struggling democratic trade unionists, particularly in the underdeveloped areas where they are just making their first step toward establishing a foothold of a free and democratic trade-union movement. We have raised a world fund to which CIO has already contributed nearly $200,000-this is over and above our dues payments to the world organization. These groups are used to set up a training center in Accra on the Gold Coast, a training center in the Middle East, a training center in Calcutta, which is operating, a training center in Japan. And we hope to get a training center going very shortly in Central America to train trade unionists in Guatemala, Honduras, Costa Rica, and other countries there. We have sent out of this labor point IV program technical teams into the plantation areas of India and elsewhere in southeast Asia, commissions of inquiry into areas of Africa where recognition of free 144 TECHNICAL ASSISTANCE PROGRAMS T trade-union rights does not now exist. Out of this fund we frequently provide the simple minimum tools that are necessary for education and propaganda-mimeograph machines, typewriters, that kind of thing. But surely, with a problem as vast at that facing us, of billions of people in the underdeveloped areas with living standards that are as pitifully low as they are, certainly a new typewriter and a new train- ing center that labor, out of its own pockets, can contribute, are not equal to the challenge. We will do all that we possibly can, and we have a moral obligation to do it. CHALLENGE IN ECONOMIC FIELD We believe that our Government today, if it really takes seriously the challenging problem that confronts us, must not be content to try to do it with one hand tied behind its back. It ought to use all the resources that are available to it. It is not a question of not being able to pay for it. If a shooting war were to start tomorrow, no one would be concerned with balancing the budget; we would quickly find ways and means to meet the expenditures, the vast sums running into bil- lions and billions of dollars, to meet that kind of threat. We are confronted with a threat equally challenging in the social and economic field. As a matter of fact, if we meet that challenge adequately, it may well make unnecessary dealing with the challenge in the military field. Senator AIKEN. What you are doing is trying to show them how to organize to improve their own lot, and how to strengthen such organi- zations as they may now have in existence which are at present not very strong? Mr. REUTHER. And to establish them where they do not have them, Senator. And to prevent in many instances the Communists captur- ing not only the trade-union movement but the movements of national liberation which frequently are so closely allied. Senator AIKEN. But you are teaching them how to do things for themselves to improve their own standards of living, and to get out from under the domination of government or any ideology? Mr. REUTHER. To help them to help themselves; that is right. Senator AIKEN. Not to depend on government, but to depend on themselves? Mr. REUTHER. Of course, they are going to have to depend on gov- ernment, and it is right that they do depend on government. If that government is representative, it is certainly democratic, and it is right that they turn to that government for assistance. Senator AIKEN. What kind of assistance? Assistance similar to what they have had in this country? Mr. REUTHER. Well, assistance not only in terms of broad legislation as there is in this instance, but assistance in terms of their own nation mobilizing to the maximum extent their own indigenous resources and putting them at the disposal of specific projects that will help in rais- ing their living standards, their knowledge and understanding; their health standards, et cetera. It is right that these indigenous trade-union movements would ex- pect of their government the kind of things which we expect of our Government here. TECHNICAL ASSISTANCE PROGRAMS 145 1 Senator AIKEN. And would you help them eventually to secure minimum wage laws and other advantages such as we have in this country for their own countries? Mr. REUTHER. I would hope so, yes. STATUS OF SUNFED Senator AIKEN. You have testified mostly about the Special United Nations Fund for Economic Development. What is the present status of that? Is that still in a proposal stage? Mr. REUTHER. It is in a proposal stage still. Initial pledges and contributions of $250 million are required to launch it. And I believe that an initiative by the United States at this point will take it off dead center and will put it in business. We had a discussion about a couple of weeks ago with Ambassador Lodge and some of his associates on this matter. And he gave us to understand that there was no objection in principle to this on the part of the United States Government, but that it was the economy-mind- edness of Congress which prevented it. Now, surely $80 million is not an impossible amount for this Con- gress or any Congress to appropriate to so significant a program. Senator AIKEN. Have any of the other members of the United Na- tions offered contributions up to this time? Mr. REUTHER. I could not testify accurately to that, but I know that a great deal of interest has been shown in it. I believe that because the United States has established a position of leadership in this field, the important countries whose support is required to make it a success are sort of standing back waiting for some sign of interest by the United States. Senator AIKEN. Where did this proposal originate? Mr. REUTHER. The Netherlands Government has definitely come out in support of it. I believe you have before you a report prepared by Mr. Raymond Scheyven, of Belgium, for the United Nations on the SUNFED program, which is a very significant document. Senator AIKEN. $200 million? Mr. REUTHER. $250 million. Senator AIKEN. Would that $250 million fund be in the nature of a revolving fund? Or would it be used for nonrecourse loans? Mr. REUTHER. As I understand it, it might partly be in the form of a revolving fund, partly for grants and requiring additional contri- butions. Contributions to it, of course, are of a purely voluntary character. The $250 million is the minimum amount required to launch it. Its proposed structure would guarantee to the major con- tributing nations half of the membership on the governing body. And I believe that the Senator AIKEN. When will this proposal take effect? Does it have to be approved by the United Nations itself first? Mr. REUTHER. Well, the basic principle of it has been approved. It is a matter of getting commitments from the participating nations in order to permit the fund to open shop. Senator AIKEN. It will take effect as soon as funds are available? Mr. REUTHER. That is correct. Senator AIKEN. To put it into partial operation, I suppose? Mr. REUTHER. That is correct. 146 TECHNICAL ASSISTANCE PROGRAMS Senator AIKEN. Testimony was given here a day or two ago by 1 or 2 witnesses who seemed to feel that as far as the technical assist- ance programs go, we should put more of our means at the disposal of the United Nations, rather than put as much emphasis as we do on bilateral arrangements. What do you think of that? DEMONSTRATING CONFIDENCE IN U. N. PROGRAM Mr. REUTHER. Well, I certainly would not want to see the United States give up its own direct aid program. But I believe that it is very, very important that we demonstrate confidence in the world organization and help the United Nations launch a program which, modest as it may be in the beginning, indicates our interest and con- cern and awareness of the problem. We ought to hope and look forward to the day where the world organization will be in a position to take over the overwhelming por- tion of the responsibility in this field. And as I mentioned before, particularly in southeast Asia, where people are very, very sensitive about direct approaches from a major power, where it is easier for sovereign governments to accept guidance and direction and assist- ance from a world organization than unilaterally with a single power in those areas it is very, very strategic that the world organ- ization be in a position to come forward with programs and funds to implement them. Senator AIKEN. Do you think that it would please these recipient countries more if the United States today increased its contributions so that it gave a larger percentage of the United Nations funds? I think we are giving about $14 million out of $24 million now, aren't we? Mr. REUTHER. Well, sir, I think there is nothing that has been so disappointing around the world to countries that want to be closely allied with us-not just in a military sense, but in terms of sharing our common hopes and ideals-nothing has been so disappointing to them as our standoffishness in this area. And I believe that a de- monstration of confidence in the Organization will do much to win. us this confidence. Senator AIKEN. If the United States furnishes about 88 percent of the money, wouldn't it seem that we were trying to absorb the organization? Mr. REUTHER. I don't believe it would be a good idea for the United States to contribute so large a portion of the going programs of the United Nations. I don't think that is required; I don't believe it is expected. If we contribute our share of it, this, I believe, will bring about a favorable response by numerous other nations around the world who are in a position to contribute generously. I don't believe that it is in the interest of the United Nations or in our interest to seek to dominate any of these programs, either in terms of the size of our contribution or in demanding an unfair and unreasonable degree of actual administrative responsibility. That is not suggested here. Senator AIKEN. I was advised last year that we contributed about 57 percent of the United Nations fund for technical assistance. And I just had the idea that if we went above that, we might be liable to charges of trying to take over the United Nations. And, after all, 57 percent was a pretty good percentage of the total. TECHNICAL ASSISTANCE PROGRAMS 147 Mr. REUTHER. Well, I certainly think that there would be far less sensitivity and suspicion on that score if it were done through the United Nations than if it were done unilaterally by the United States. I don't believe it is required, however, in programs of this kind that such a large percentage be financed by the United States. I am sure that an indication of the desire on the part of the United States to pay its share will cause a number of other important nations, who are among the "have" nations and are in a position to contribute, to do so. Senator MANSFIELD. Senator Fulbright? ANALOGY TO EXPLAIN PROGRAM Senator FULBRIGHT. Mr. Chairman, I regret I didn't hear all of Mr. Reuther's original statement. But I have a few questions I would like to ask him. Mr. Reuther, coming from an agricultural State, I often like to use the analogy of the county-agent program. I think that is an effective way to explain technical assistance to people in discussions. I wonder, in the light of your experience with unions and with labor- ing people, if you could give us an effective way or a similar analogy which you could use to explain your point of view to the working people. Is there an analogy to explain it? Mr. REUTHER. Well, the difficult position I am in in making a com- parable analogy from the labor side is that we don't have that kind of service in the trade unions that you have in the county-aid pro- gram. But there is no real difficulty in explaining to trade unionists the importance of a grassroots technical assistance program that will help people help themselves, because I believe in the ranks of Ameri- can workers there is a great realization and appreciation of the direct relationship between solving bread-and-butter problems on the one hand, and the threat of Communist influence, penetration and sub- version on the other. They know full well that, where practical steps are taken to win for people better living standards and a better degree of security, among those people the Communists have no hope of making a direct appeal. And they know full well that in the underdeveloped areas of the world, unless something is done to develop a grassroots assistance program, the Communist appeal, with all of its demagoguery, is going to move in to fill a vacuum that exists there. And we want to see democracy fill that vacuum. STRESSING ECONOMIC RATHER THAN POLITICAL ASPECTS Senator FULBRIGHT. I agree with your conclusion. Don't you think sometimes we talk a little too much about this merely being a way to combat communism? Isn't the fact of the matter that the conditions which exist in so much of the world are now causing a great frustra- tion in the minds of the people who have found out that there are solutions? They are looking for solutions, and we have to give them solutions, or some other revolutionary way, maybe communism, or any kind of a totalitarian system, will take over. 148 TECHNICAL ASSISTANCE PROGRAMS But I think we are kind of mesmerized by communism. What we are trying to do is solve some very real problems growing out of illiteracy, poverty, undernourishment in much of the world; aren't we? Mr. REUTHER. Sir, you have underscored a point which we raised in our supplementary document which we filed with you, namely, the struggle between the so-called "have" and "have not" nations that predates the rise of Communist power in Russia, and does not have its origins in Moscow or in Peiping. Senator FULBRIGHT. I will agree that the result, if we are successful, will lessen the attraction of communism. But if we talk about the result being to combat communism, political aspects rather than the economic and social aspects are emphasized. I am not trying to criti- cize what you said-I think that most of us agree that the technical assistance program is a proper program-but I think we are more effective if we emphasize the social and economic rather than the political aspect; they are only a long-term result of these conditions. Mr. REUTHER. Well, sir, the whole weight of our concern is to em- phasize the positive aspects of the problem that confronts us, the urgent need of dealing with mounting problems of human need. This predates Communist power- Senator FULBRIGHT. That is the way I like to hear it expressed, that we are not out and out fighting Moscow, we are trying to do a job which, if we do it properly, will solve that problem too. Mr. REUTHER. We feel very strongly that there can be no solution of that problem unless we deal with this basic problem here. Senator FULBRIGHT. So often in our business we sort of have to speak from the hip, and quickly, because the attention of people won't stay with you very long. And that is why I like the analogy of the county agent program, because the people all over the South and the West know what you are talking about when you say this is like the county agent program, since they have already been educated about that. I was wondering if you couldn't come up with sort of a similar simple illustration to show what you are talking about. Mr. REUTHER. We will certainly be very grateful to any help from your side in getting similar services for labor people, because it would make that analogy much more understandable. Senator FULBRIGHT. In the South everybody knows about the county agent, and is sympathetic and understanding. And we have unanimity on this subject. Mr. REUTHER. Of course, all of us have to interpret it in the kind of language that is helpful to our own people. Senator FULBRIGHT. That is right. I was asking you if there is something similar. Mr. REUTHER. I was speaking before you arrived of what the world trade union was doing in terms of developing Senator FULBRIGHT. That is right. You know, there is a great deal of resistance to this program among our own people, and in the Con- gress. We always have difficulty in getting money for this program along with the exchange programs in other fields, as you know. Mr. REUTHER. We are doing what we can as a grassroots program among our own people to stimulate understanding. TECHNICAL ASSISTANCE PROGRAMS 149 MOST BENEFICIAL TYPES OF PROJECTS Senator FULBRIGHT. I have one other question. I was reading your statement criticizing pouring money into the pot of national econ- omies. That criticism has been made before. We know it is a great difficulty with the administration of the program. I wonder if you can be specific about the type of project of technical assistance that you do consider most beneficial, both to the wage earners and to the farm people in these foreign countries. Can you give an illustration or two of concrete problems that appeal to you as having been helped by technical assistance? Mr. REUTHER. Well, of course, the actual planning programs that are conducted in these countries where you are dealing with the im- mediate, practical problems they are confronted with, are most help- ful. It is one thing to bring people from these countries abroad and expose them to the great technological developments here and the modern methods we use, but, if they are not applicable in their little villages, then they are being provided with training experience that they cannot really use and avail themselves of. We believe that train- ing assistance of this kind on the spot is very, very vital. This ought to be vigorously pursued, not only in the agricultural field and in the business communities, but among trade unionists as well. But, of course, before any of that kind of grassroots technical assist- ance can pay off, we have to have the right kind of capital assistance in developing transportation, power centers, et cetera, in order to pro- vide the foundation or the base on which they can build their own local industries and strengthen their own local economies. Senator FULBRIGHT. I have heard criticisms of our program in countries like Pakistan and Thailand that if we attempt to move too fast, a great deal of it is wasted, not properly timed. I remember talking about the Iranian program. They came up with what was an impractical program. We were supposed to send a lot of complicated machines over there, and it was wasted, because they weren't ready for it, and there was some criticism about that. INTERNATIONAL FINANCE CORPORATION This leads me to this final point in connection with SUNFED and the International Finance Corporation. Some people feel that the period of grants as exemplified by the Marshall plan in the early days should be approaching its end, and that as of now we can move forward with the purely technical assist- ance in its educational phases-which is a rather limited program- and instead of the grant program the International Finance Corpora- tion approach should be followed as a long-term program. They feel that politically and economically we will not support, certainly for any long period, continuation of substantial grants in the economic field, but that we should now, before we come to the complete end of our tether in this field, set up a real revolving fund in the nature of the International Finance Corporation which would carry on indefi- nitely, and if properly administered, would go on really indefinitely, because it would always be earning funds which would refresh and enlarge its capital. 150 TECHNICAL ASSISTANCE PROGRAMS Now, I wish you would comment on that. I don't know if there is any difference between your objective and that of those who advocate the International Finance Corporation; it is a matter of administra- tion and effectiveness and practical politics, all together. The judg- ment is as to what is wisest to do now. And this argument is made, that if you go the SUNFED route, an early end will be approached, because in this country no one is going to continue indefinitely the large appropriation for grants. If you go the other route, there is the prospect of a long period in which there will be much more liberal credit terms made available than you would get from the International Bank, and that you would get down to doing business directly with the people concerned, the creation of industrial concerns on a loan basis, and equity capital. Now, do you object to the International Finance Corporation? Mr. REUTHER. May I first of all comment on your initial point, that there is the feeling that we have reached the end of the need for grants, the Marshall plan has tapered off. That is true as far as Europe is concerned, because we have met our basic objective, we have built the economies of these countries, and they are producing at a level far higher than before the war or at a wartime peak. But we are right now in Asia and the Middle East, and Latin America at the beginning of the Marshall aid period, and if the United States had not taken this kind of bold, imaginative action, who would have in Europe? What we are proposing is not SUNFED as a substitute for the Inter- national Finance Corporation arrangements, but a supplementing ar- rangement. We need the private capital offers. But the basic purpose of SUNFED is to provide the necessary grants to build this minimum structure that is required in these countries, in getting their ports and harbors in shape, and getting their roads and railways built, and get- ting power stations going, and schools and hospitals, and so on, and training programs Senator FULBRIGHT. Let me ask you right there: Why do you speak of the railways and power stations as non-self-liquidating? It seems to me that they are good examples of self-liquidating projects, and the very kind that the International Finance Corporation undertakes. What I thought you meant by a non-self-liquidating project would be health or education, which does not normally make direct financial returns. Mr. REUTHER. Well, power stations and roads, et cetera, are too, in the long run, excepting I don't believe they are quite the attractive field for private investment as direct industrial institutions. Senator FULBRIGHT. I think they are. Many of our railroads in this country were financed by European capital, and subsequently, as you know, it was repaid, and everybody was happy and everybody profited. Take, for example, one of the largest activities in Brazil is the Brazilian Traction, which is largely financed by Canadian and Amer- ican capital. It is a good example of a self-liquidating project, and it is essentially power and transportation. I think you will find many examples of that, if that is what you had in mind. And cer- tainly I am inclined to think that international financing is the proper approach. Let me say one further thing. It is not only the need of those coun- tries that you have to consider, but you also have to consider the at- titude of the Americans themselves and the attitude of the Members TECHNICAL ASSISTANCE PROGRAMS 151 of Congress. Are they in a mood to continue the Marshall plan on a scale such as they did in Europe? I don't believe they are. Mr. REUTHER. Well, I think we have a moral obligation to acquaint them with the fact that it is in our own self-interest to see that the economies of this world are built up, if we wish to find continuing markets for an expanding economy. NEED FOR A PROGRAM THAT CAN BE SUSTAINED Senator FULBRIGHT. I agree with you. What you are talking about now is the most practical and most likely and effective means to achieve that objective. And I think we agree that it is to our interest to bring these countries along, to help them develop. Now, which is the most practical way, the way which has the most appeal, which will enable us to continue doing that, and not just next year, but for 5 or 10 or 20 years? Is it a grant approach, or is there some other approach which would seem more businesslike that we could support and which would be mutually beneficial? That is the very point I would like for you to address yourself to. Mr. REUTHER. The grant approach is required in order for the international banking approach to really work. Senator FULBRIGHT. I would like for you to develop that. Why is that so? I think that is the very point that is in issue, at least, in my mind. Mr. REUTHER. Because I think that unless these countries can be given the kind of assistance that they need in getting their basic facili- ties set up, they are not going to be in a position to really take advan- tage of the offers that are available in getting the various industrial projects established in their countries. I think that private capital has never shown the venturesome spirit in terms of coming in and developing these kinds of basic facilities. Senator FULBRIGHT. This isn't private capital; the International Finance Corporation will start out with public capital. Mr. REUTHER. Whether it is public or private, I believe in the estab- lishment of a special fund which has available the necessary finances that can be made as grants to specific projects that are essential in terms of getting the foundation set for the superstructure that is to follow. And I believe in terms of getting quick action on it, this is the most feasible and the most practical approach. The other way may in the long run get some results, but I believe we have the time element against us. And we need the element of a bold and imagina- tive program that will offer an immediate appeal to the people of these areas. Senator FULBRIGHT. I don't say I disagree with you too much, other than in this element. I think that you will probably fail to get support for that approach from the Congress, whereas I think with the other approach, you are much more likely to attract real support. Therefore, it will be more effective than to try for something that is unlikely to get any support. And another observation I am bound to make is, I don't quite like always this urgency that we have to do something next year. I think that we should take both politically and economically a little longer view, that this is a long struggle with the totalitarians, that neither side wants to go into outright war tomorrow-there are some individ- 152 TECHNICAL ASSISTANCE PROGRAMS uals probably on both sides that think so but I don't think either one wants that. But I think we should take the long-term view. And also an element in my mind is that the program should be a little less ambitious than a long-grant program, and it should be on a scale that we can maintain and which will gradually grow larger. The Finance Corporation would start out with one or two hundred million dollars, and gradually that fund would grow into an unlimited amount, whatever is needed, by an accretion of earnings and contributions, as confidence grows in it. Mr. REUTHER. Your remark, sir, is excellent testimony in favor of the establishment of the SUNFED approach, because it is a long-run approach. We are not operating a fire department. We have got to recognize that the threat is one that has been with us for a long time, and that unless we get started dealing with it at the grassroots we will never make headway, we will always have the emergency fire depart- ment approach to the problem. And what is envisaged in the SUN- FED approach is to commit the world organization and its resources to a long-range attack on what has now become the very source and the hub of Communist power. And we have got to have a long-range approach to it if we are ever to get our head above the water. PRACTICAL POLITICAL SITUATION Senator FULBRIGHT. The Senator on my right says the question is still, Can you get it underway? How can you get it underway? I find relatively little sympathy for it, on the ground that it is a continuation of a grant program, whereas I find considerable interest in the other approach at this time. That is the only difference. I don't think our objectives are different, but it is the evaluation of the practical poli- tical situation as we find it. Mr. REUTHER. All you have to do is authorize $80 million, and the United Nations will be in business in this field. Senator AIKEN. What I really asked was, what do we use for votes? That is what I meant; that is the way I said it. I said, we have the practical situation in front of us. It is all right to have the ideal objec- tive, but we do have to deal with the practicalities. And that is what I meant when I said I probably would be outnumbered if I looked not too kindly upon putting operating programs under the State De- partment, because it is a practical and temporary measure, and the State Department is very likely to get the technical assistance pro- gram. And I am already reconciled to it. Mr. REUTHER. Well, sir, we have no block of votes in our vest pocket that we can pledge to this. But we give you our word that we will do what we can, in concert with church organizations and others across this country, to build support for it. But the essence of leadership at every level whether it is in trade groups, whether in business or in government-the essence of leadership is that we express our hopes and not our fears, and there is nothing that would give such stability around this world as for the United States to step forward boldly now and by an appropriation of this kind demonstrate faith and hope in the future, instead of merely underscoring our fears, as we so fre- quently are forced to do under the pressure of exigencies. Senator FULBRIGHT. I have one further observation. I think, that in your feeling, your idea, that there is no opportunity for loans to TECHNICAL ASSISTANCE PROGRAMS 153 1 countries like South America, you are in error. The only place I agree that you might have a point on that would be the really difficult coun- tries in Southeast Asia, where there is little fabric of industry. I think there are some places where what you say would be applicable. But I can't believe that in all of Central or South America there is not a basis for loans. And I think it is already being demonstrated daily. Mr. REUTHER. Yes, there is a basis for loans. But I would invite you to have a second look at that and talk with key spokesmen of Latin America, and I believe you will find that their views on this coincide with the attitude of the countries in the Middle East and Southeast Asia who are essentially confronted with the same prob- lem. Now, there has been a tremendous investment in Latin America in developing many segments of the economy, but in terms of helping them to develop their own indigenous economy, to be more self- sustaining themselves, there is a serious question south of the border as to whether dollars are doing that. And they would look forward with new hope if a program of this kind were gotten under way. Senator MANSFIELD. Thank you, Mr. Reuther, for this discussion. (The documents Mr. Reuther referred to follow :) Hon. JOHN FOSTER DULLES, Secretary of State, Washington, D. C. FEBRUARY 16, 1955. DEAR SECRETARY DULLES: No one can be more aware than we of the lateness of this appeal addressed to you on the very eve of your departure to attend the SEATO meeting in southeast Asia later this month. We make it only because of what seems to us the desperate importance of having more than defensive and negative military aid and cooperation on the table for discussion at that meeting. It is, of course, vital to discuss and, to the extent possible, to obtain agreement upon practical military plans for preventing or defeating further Communist aggression in southeast Asia as elsewhere in the world. But, in our experience and observation, military defense to be effective urgently needs a bold and massive program of economic aid and cooperation, a positive peace offensive that will make Communist propaganda, infiltration, subversion, and aggression wither at the roots. Speaking frankly, Mr. Secretary, because we believe the time so short and urgent that our common interest in the survival of freedom requires plain speak- ing, it is our feeling that if you go to the SEATO meeting only to discuss a program of military assistance and cooperation, or a program that may have some economic aid and cooperation but only as a minor incidental or feeder operation, the case you present there could be widely misrepresented by Commu- nist propagandists, and we fear perhaps widely accepted by the people of south- east Asia as a proposal that they, who are thousands of miles closer to the pressures and dangers of Communist imperialism, are in effect being urged to form a living shield for our defense. In the 1954 CIO convention, last December, we urged a program of economic aid for Asia, expanding, implementing, and supplementing the point 4 and tech- nical assistance programs. I attach an excerpt from that resolution. The tragic fact is that since then, talk of "a Marshall plan for Asia" has died and plans for any large scale economic aid adequate for the emergency have been abandoned-perhaps postponed is a polite word for it. Beyond the dangers-and the opportunities-of this month's SEATO meeting lie the greater dangers and opportunities of the April meeting of 30 Asian and African nations in Indonesia. Were we to let either meeting pass without offering a positive program for economic, social, and political development, we would be risking irretrievable loss of initiative in this entire area of the world to Communist imperialism. As you know, that imperialism has stepped up its "peace offensive" in recent months and years, offering economic aid, machinery, etc., as part of a package including skillful propaganda, infiltration, and subversion. 154 TECHNICAL ASSISTANCE PROGRAMS In this critical situation, we appeal to you to reconsider the present policy of opposition to SUNFED (The Special United Nations Fund for Economic De- velopment) which, we believe, is the test, the make-or-break issue between the "have" and the "have not" peoples who are members of the United Nations. For 4 years the United States of America and other “have” nations have said "No" to the United Nations proposal for the establishment of SUNFED. It was more than 15 months ago that the Philippine representative in the United Nations spoke these sad and bitter words, of which the three that may be most significant are emphasized : "It is indeed disheartening for the underdeveloped countries to see this, their white hope, wither away under the cold indifference of the metropolitan indus- trial powers" (Miguel Cuaderno, Sr., to the U. N. Economic and Financial Committee, Oct. 21, 1953). Again in 1954 the "have" nations told the "have not" nations that, because of defense expenditures, they could not afford SUNFED and the initial $250 million required. Mr. Secretary, this unbending opposition seems to us to be utter folly, and completely unrealistic, considering our economic strength, to continue to say that we cannot afford our share of $250 million for SUNFED, at a time when we are spending more than $36 billion for military defense and when our economy is operating at more than $30 billion below its potential capacity. We recognize that to announce support for SUNFED now would be a reversal of United States policy. But, precisely for that reason, we think it would have immense value in connection with the SEATO meeting and the April meeting, provided it is followed up by implementing commitments and legislation in the Congress. We recognize that such an announcement would mark a departure from the April 16, 1953, statement by President Eisenhower, promising in effect that as soon as there is less need for economic aid to the underdeveloped countries of the world-when world disarmament is achieved-the United States of America will be willing to give more such aid. Such postponement and denial of our obligations under articles 55 and 56 of the United Nations Charter to take joint and separate action to promote "higher standards of living, full employment, and conditions of economic and social prog- ress and development," seem to us to pave the road to division and despair, par- ticularly among the "have not" nations who comprise a majority of the world's peoples and to whom Communist imperialism is making its most determined. ingenious, and persistent appeals. Raymond Scheyven's 1954 report on SUNFED to the United Nations is one of the most moving affirmations of the indestructible spirit of man ever written. The author, a conservative Belgian banker, undismayed by the continued opposi- tion of most-not all-the "have" nations, summons mankind, particularly the "have" nations, to a new frontier, the wiping out of poverty, and the reduction of disease, ignorance, and fear. The necessary makeready in opening this frontier is SUNFED, the providing of grants for the so-called "non-self-liquidat- ing" developments that must be in place before self-liquidating investments can be made. Unless we quickly adopt such a device as SUNFED, programs such as point 4 and technical assistance will be abortive. Already they tend to keep more peoples alive longer at a lower standard of living. And the gap and tensions between the industrialized and underdeveloped countries will continue to increase. I trust that you will understand that the reason for writing you at such length and in such plain words is our deep conviction that survival itself depends upon balancing military defense now, not later, with economic offense against communism's secret weapons-poverty, disease, ignorance, and fear. Our best wishes will go with you, Mr. Secretary, in your fateful mission to the SEATO meeting. Sincerely yours, VICTOR G. REUTHER, Assistant to the President and Director, Department for International Affairs. [Excerpt from Resolution No. 39 (Foreign Policy), 16th Constitutional Convention of the Congress of Industrial Organizations, Los Angeles, Calif., December 6-10, 1954] “*** CIO welcomes recent evidence of the administration's decision to go beyond military strength to cooperate with other nations in launching through- out Asia a massive economic offensive against want, fear. and insecurity. We TECHNICAL ASSISTANCE PROGRAMS 155 shall urge upon Members of the 84th Congress the importance of adopting bold plans for such a peace offensive, implementing them with adequate funds. This is the most fruitful and economical investment in genuine peace that can be made in the world of today and tomorrow. As millions of men and women now trying to live on incomes of $50 a year or less are able to increase their standards of living, their stake in their Nation, their Government, and freedom will increase. Our success in helping people to help themselves and each other, we believe, will be one of the most shining chapters in American history and will one day be recognized as having shown the way to the positive peace offensive that finally broke the stalemate between slavery and freedom. "We plead then for realistic, unemotional appraisals of Asian problems to the end that, through the agencies of peace and brotherhood, we can avoid atomic warfare, yet win the wholehearted support of the Asian people and achieve a historic victory for democracy. WILL IT BE SUNFED OR UNFED? Department of International Affairs, Congress of Industrial Organizations, Washington, D. C. In view of the accelerating pace of competition between Com- munist exploitation of hunger and our own efforts to eliminate it, what is needed-and quickly-is a clear mandate by the 84th Congress to President Eisenhower, Secretary of State Dulles, FOA Administrator Stassen, Ambassador Lodge, and our delegates to the U. N. to support SUNFED with words and money, now. It is foolish to the point of suicide to put off such economic cooperation until after worldwide disarmament is achieved. It is precisely during the period of tension when disarmament seems im- possible that such positive offensives against poverty and hunger are most needed, most valuable, most powerfully effective in work- ing out of the swamps and jungles of fear and war into the light and confidence needed for peace and disarmament. SUNFED is, indeed, part of the price of world disarmament. SUNFED is part of a positive peace offensive, a way to get off the dime of military defense and make real for mankind the Four Freedoms for which World War II was fought and won. SUNFED (the Special United Nations Fund for Economic Development) is needed to supply grants for basic improvements which, although not self-liquidat- ing, are necessary early parts of a practical rounded development program. Such investments are prime essentials for building up the underdeveloped nations' "human or social overhead capital" (the promotion of health, education, and housing), and the "economic overhead capital" (transport, communications, power, and other public utilities). Until this "makeready" is provided, neither public nor private loans can be fully effective. THE BASIS AND ORIGIN OF THE SUNFED IDEA Ten years ago the United States of America and other nations signed the United Nations Charter, which in articles 55 and 56 pledged the cosigners to take joint and separate action to promote "higher standards of living, full em- ployment, and conditions of economic and social progress and development." The idea of making financial contributions to United Nations organizations operating in the field of economic and social development did not originate among the "have-not" nations. Nor did it originate in the United Nations. It was proposed in the report of the United States International Development Advisory Board, of which Nelson Rockefeller, now Special Assistant to President Eisen- hower was Chairman and Jacob S. Potofsky, Chairman of the CIO Interna- tional Affairs Committee was a member. Under date of March 7, 1951, transmitting the Board's unanimous conclusions and recommendations to President Truman, Mr. Rockefeller said: "Two weeks after the assignment was given us a national emergency was proclaimed. In line with that action the Advisory Board has felt the added responsibility of examining the problems of the underdeveloped areas in rela- tion to mobilization for defense. The more deeply we have studied this rela- 156 TECHNICAL ASSISTANCE PROGRAMS tionship the more impressed we have become with how truly inseparable these problems are "The Board has given careful study to the Gray report and to extensive addi- tional information and material which was brought together for its use. On this basis, the Board has arrived unanimously at the conclusions and recom- mendations which make up our report. We feel that effective cooperation of all free peoples for joining defense and economic and social development is a fundamental requirement for mankind's progress toward peace, freedom, and well-being." On page 1, under the heading "First Things First," the Board reported its feeling that, because of a defense emergency, "it was its added responsibility to ask and examine what is the proper place of international development in re- lation to defense. "As a result of its findings, the Advisory Board feels that strengthening the economies of the underdeveloped regions and an improvement in their living levels must be considered a vital part of our own defense mobilization." "The Advisory Board recognized that the first imperative must be to rebuild sufficient military strength to resist aggression. But the overall strategy adopted by the free world and the disposition of resources to implement that strategy must be sufficiently broad to beat off the threat of social and economic collapse from within as well as the threat of aggression from the outside." The Board recommended: "The fullest use should be made of the United Nations and other international organizations operating in the field of economic and social development. They permit the pooling of skills and techniques of numerous nations, enabling other countries to participate in common international effort * * *. "To finance a portion of the cost of public works which are essential to the underdeveloped countries and which cannot be financed on an ordinary loan basis, the Advisory Board recommends the prompt creation of a new Interna- tional Development Authority in which all the free nations will be invited to participate ***. "The Advisory Board recommends that the subscription of the United States should be $200 million.” 1 THE "HAVE" NATIONS SAY THEY CANNOT NOW AFFORD SUNFED Today, the United States of America and other "metropolitan industrial powers," the "have" nations, persist in blocking SUNFED, a necessary step in implementing their United Nations pledge. The "have" nations, including the United States of America, said on October 14, 1953, that, because of heavy expenditures for military defense, they could not and would not contribute to SUNFED. One week later, the reply of the "have not" nations was voiced by the Philip- pine Representative, Miguel Cuaderno, Sr., addressing the U. N. Economic and Fnancial Committee. He said: "It is indeed disheartening for the underdeveloped countries to see this, their white hope, wither away under the cold indifference of the metropolitan in- dustrial powers." To pigeonhole SUNFED, he added: "would be slamming the door of economic opportunity and development in the faces of hundreds of millions of people throughout the world who have come to regard the United Nations as the instru- ment of their salvation." At that moment, the United States Chamber of Commerce organ Nation's Business, containing an attack on SUNFED, was on the desks of chamber mem- bers. After reporting that "there is as yet no sentiment among the 'have' nations to be voluntary contributors to SUNFED," the magazine added: "Nevertheless, this poses a political question of the first magnitude for the United States. One of the outstanding problems of our time is the disparity between the developed, or 'have,' countries, and those nations that are under- developed, and are have-nots. "Some believe this to be the basic cleavage in the world community, even more profound than that between the Communist and free worlds. These ob- servers point out that the cleavage between the haves and the have-nots was there long before the Communist-Western World division and that it would re- main even if the Communist regime were overthrown next week and rapproche- ment between what is now the Soviet world and the West were effected." 1 Partners in Progress, Simon & Schuster, New York, March 1951., pp. 1, 25, and 73-74. TECHNICAL ASSISTANCE PROGRAMS 157 SUNFED did not "wither away." It was before the U. N. again in 1954. And again, in statements included in the Scheyven report,' the "have" nations, not questioning the need or practicality of SUNFED, pleaded poverty. It is still before the U. N. and before the member nations and their peoples. Although SUNFED is "the white hope" of the underdeveloped countries, out- side those countries it seems to have been the best-kept secret since the Manhat- tan project of World War II. Like that project, SUNFED has tremendous po- tential power. The U. N. Charter and many subsequent studies, reports, and recommendations by U. N. and other agencies say that peace, to be genuine and lasting, must be based upon higher standards of living throughout the world. If this is so, the wealthy "have" nations have been and in 1955 are still telling the "have not" underdeveloped nations that our modern industrial civilization cannot afford to share its steadily increasing abundance, although such sharing is clearly the price of survival. THE ISSUE OF SUNFED IS BEING APPEALED TO THE PEOPLES OF THE "HAVE" NATIONS Will the American people, their Congress and the President continue in 1955 to bow to those who tell us to trim our economic aid policies to fit some arbitrary and demonstrably unnecessary limit on expenditures? If we do, we shall de- fault to alert agents of communism who move into aching areas of poverty in Southeast Asia, the Near and Middle East, Africa, and Latin America. More and more they are offering economic aid, industrial and farm machinery, along with promises of land, bread, and jobs in exchange for support (or acceptance) of a "temporary" dictatorship like the one that has ruled Russia for the past 37 years. In reporting the 1954 veto of SUNFED by the United States and other "have" nations, Mr. Raymond Scheyven, of Belgium, 1953 President of the U. N. Economic and Social Council, said in his final report, dated August 10, 1954, that while he was forced to "conclude that the essential conditions for the establishment of such a fund in the near future do not at present exist," he is optimistic because "the public in the industrialized countries have for some time been becoming in- creasingly aware that the economic development of the underdeveloped countries represents an urgent problem, whose solution would contribute to a relaxation of international tension and the attainment of lasting peace." It is suggested in diplomatic language that several governments are withhold- ing endorsement until their people supply more support-or perhaps leadership is the word. The appeal from the veto runs from the governments to their peoples. This situation, said Mr. Scheyven, "explains the emphasis I have laid in several parts of this report on the importance of informing the world public opinion of the poverty prevailing in the underdeveloped countries and of the urgent need to remedy this state of affairs." 3 With the tapering down of military expenditures, the "have" nations' plea of inability, never valid, has lost much of its plausibility. With the rapid stepup of Communist offers of economic assistance, machinery, etc., the need for early implementation of the SUNFED idea becomes more acute. With the convening on February 23 of the SEATO Conference and in April of a meeting in Indonesia of representatives of 30 of the world's "have not" countries (potentially rich in human and natural resources), the initiative in economic development of underdeveloped countries may pass from the hands of the industrialized ("have") nations and the U. N.-unless the United States, as the richest of the "have" countries, acts quickly to support the SUNFED idea with words and money. WHAT IS SUNFED, AND WHY SHOULD IT HAVE TOP PRIORITY? "Neither private capital nor existing international agencies can ensure the financing of non-self-liquidating investments, "the Scheyven report points out, suggesting that the U. N. should give systematic consideration not only to the 2 Special United Nations Fund for Economic Development, final report by Raymond Scheyven, prepared in pursuance of General Assembly Res. 724B (viii); General Assembly, Official Records: 9th session, supp. No. 19 (9/2728), pp. 15-16. 3 Ibid., p. 21. 4 Ibid., p. 9. 59637-55——11 158 TECHNICAL ASSISTANCE PROGRAMS essential parts of a development program, but to the sequence. It offers this definition of the problem and of SUNFED's role in meeting it : "Any program of economic development, of necessity, contains a proportion of low-yielding and slow-yielding projects which yet are essential preconditions for the high-yielding and rapid-yielding projects. "Such basic projects * * * include investments necessary for the promotion of health, education, and housing-the human or social overhead capital-and of transport, communications, power, and other public utilities—the economic over- head capital. These projects provide little or no yield in foreign exchange, usually furnish low yields in the short run and also generally require a considerable period of time before their yield can be realized in financial terms because their benefits are derived from the more balanced development of the economic activi ties which utilize their services." Continuing, the report explains the strange new word "infrastructure," point- ing out that, unless this infrastructure is built, healthy development is im possible: "If economic progress is to take place at an adequate rate there must be a complex of investments to form what is known as the 'economic and social in- frastructure' of a country. The importance of this infrastructure is plain. "Roads, railways, canals, port installations, and sources of power create oppor- tunities for business enterprise; clearing, irrigation, and drainage make more land available for tillage. "Schools train the labor force and universities the leaders. "Hospitals foster the improvement of health and hygiene. "When the State has sufficient resources at its disposal it usually provides these services and finances these public institutions.” “ The report is careful to state that the expression "non-self-liquidating invest- ments" is an accurate financial term in the sense that they do not produce revenue for the payment of interest and principal, but that "from the general economic standpoint all infrastructure investments, whether social or economic, may be regarded as directly or indirectly self-liquidating, since they all contribute to the short-term or long-term development of the economy." Because the infrastructure is essential to development and because develop- ment is the practical alternative to worsening poverty and resultant social and political turbulence, subversion, aggression, and infiltration in the underdevel- oped areas of the world, the report's assertion would seem to be an understate- ment. Such investment in infrastructure would seem to be not only self-liqui- dating but profitable in the sense that survival is profitable. As infrastructure is built and beneficent upward spirals of development replace present viscious downward spirals, the ratio of infrastructure investment to overall investment can be expected to decline; likewise, the share of investment needed from sources outside the developing country. "Infrastructure investment is necessary in every economy, varying according to the state of development of the economy concerned. Thus, experts consider that in the development of an underdeveloped territory, 60 percent of overall investment must be devoted to the infrastructure during the initial stage, where- as in industrialized countries, where the purpose of such investment is merely to maintain, adapt, and supplement the existing infrastructure, the proportion is roughly the reverse. SUNFED'S ORGANIZATIONAL STRUCTURE REFUTES C. OF C.'S "BLANK CHECK" CHARGE Although Nation's Business, organ of the United States Chamber of Commerce, in October 1953 denounced SUNFED as "your name on a blank check," the fact is that SUNFED's organizational structure would protect the United States of America and other "have" nations against raiding of the fund by "have-not” nations. Here are its four safeguards: (1) Membership is on a year-to-year basis, annually renewable or revoca- ble; (2) The main contributors to the fund would have half the 8 or 12 mem- bers of the governing board; (3) A board member from a country applying for aid would not partici- pate in action on that application; * Ibid., p. 9. A quotation from the Subcommission on Economic Development. Ibid., p. 9. 7 Ibid., p. 9. TECHNICAL ASSISTANCE PROGRAMS 159 1 (4) The Director would cast the deciding vote in the event of a tie (and the United States of America as the heaviest contributor in all probability would name the Director). In practice, these safeguards would be effective insurance against the use of "blank checks." IT IS EASIER FOR SOVEREIGN NATIONS TO TAKE SUGGESTIONS FROM AN INTERNATIONAL BODY Economic development must be accompanied by courageous and intelligent policies that will bring about abandonment of prejudices and archaic customs, adaptations of social and legal institutions, elimination of social and economic discriminations, support for fair and adequate tax systems. These complex and delicate matters, the report points out, require introduc- tion of "structural reforms, while maintaining full respect for the sovereignty of the underdeveloped countries. It might be easier to carry out such structural reforms through an international organization, which is in a better position to spare national susceptibilities. The intervention of any one country in re- forms of this nature would be a very difficult matter, as is illustrated by the reactions which have been aroused whenever lending countries have sought to make their investments conditional upon stipulations which the borrowing coun- tries regarded as infringements of their sovereignty." 8 HOW MUCH CAPITAL IS NEEDED OVERALL? HOW MUCH FOR THE SUNFED PHASE? The $250 millions originally proposed for SUNFED is a minute part of all the capital required for the development of the underdeveloped countries. The estimated overall need of foreign capital of all kinds is more than $10 billions a year; $3 billions of it in grants. The report gives this summary of expert opinion on the need for substantial investment of foreign capital: "United Nations experts have endeavored to estimate the amount of capital which would be required to effect an adequate improvement of the standard of living in the underdeveloped countries. They themselves emphasize that their figures are approximate and are to be regarded as little more than an indi- cation of order of magnitude. Such estimation, moreover, is rendered especially difficult by the necessity of making assumptions and by the inadequacy of statistical information. “According to their calculations the amount of capital needed each year to raise the national per capita income in underdeveloped areas by 2 percent per annum would be something like $19 billions. About $5 billions of this could be provided by domestic savings. A deficit of $14 billions a year would thus remain to be met. "Even bearing in mind that better methods of increasing and utilizing domestic savings could be applied in the underdeveloped countries and that such savings tend to increase as the standard of living rises, the experts estimate that a 2 percent increase in national per capita income is out of the question unless more than $10 billions of capital, $3 billions of which would be grants, is imported annually. "The experts consider this contribution of $10 billion to be within the capacities of the economically developed countries, for it represents some 2 percent of the national income of the countries of Western Europe, Australia, the United States of America, and Canada, the total income of which amounts today to some $500 billion. It should be observed, however, that a transfer of 2 percent of a coun- try's national income represents, in practical terms, a vast operation entailing great financial sacrifice." WE CAN AFFORD SUNFED: IT IS PART OF THE PRICE OF SURVIVAL We can afford SUNFED because we can afford survival. It would have been economical, in terms of money, lives and future security, to have put SUNFED into effect in 1951, when it was first brought before the United Nations. It can be demonstrated in terms of cold economics that the United States can afford to make its full contribution to SUNFED's $250 million, or to a much larger fund. But before getting to that, let us briefly reexamine the explosive factors, human and material, that make SUNFED an immediate imperative. 8 Ibid., p. 8. Ibid., pp. 7-8. 160 TECHNICAL ASSISTANCE PROGRAMS The gaps between the economically advanced countries and the underdeveloped countries are widening, not narrowing. This is because the rate of development is faster in the already developed countries. Richer countries' food surpluses continue to grow and to overhang the market. Although, as FOA Administrator Harold Stassen stated February 17 in testi- mony before the Senate Foreign Relations Committee, poorer countries have in- creased their food production, it is still for the most part inadequate in amount and distribution; they lack funds to buy from the richer countries having surplus food. So-called food surpluses and hunger often exist within the same country be- cause those who are hungry lack money to buy the food. Postwar progress in narrowing the gap between food production and popula- tion growth was halted in 1954-55 and turned slightly downward. "The world production of major food products 1954-55, measured in terms of calories, is about 2 percent below the record of 1953-54," the USDA Foreign Agricultural Service reported January 13, 1955. Part of this decline was manmade, the "have" countries reducing output because of surpluses. Part of it was caused by nature's floods, droughts, and other disasters. Surveying the state of food and agriculture in a report issued in August 1954, FAO pointed out that while world agricultural production increased by nearly 3 percent a year over the preceding 4 years, compared with an annual increase in world population of about 1½ percent, and, while world per capita food production slightly exceeded its prewar level, "marked disparities between regions remain. "Thus per capita production in 1953-54 was about 17 percent greater than before the war in North America and is also appreciably above the prewar level in the Near East, Western Europe, and Africa. On the other hand, in Latin America, the Far East and Oceania per capita production remained substantially less than before the war. "Moreover, the still greater disparities in different parts of the world between the absolute levels of agricultural production, which primarily determine food consumption levels, remain as large as ever. Production per capita is, for example, some 4 to 5 times greater in North America and Oceania than in the Far East, the Near East, and Africa.” As FOA Administrator Stassen's testimony suggested point IV and technical assistance programs may tend to keep more people alive but at a lower standard of living, if not accompanied or quickly followed up by funds for public utilities, power, schools, clinics, and hospitals, all usually requiring in addition to local funds some outside grants-in-aid of the type intended in the SUNFED plan. As Mr. Stassen pointed out, more efficient farming conditions release or dis- place manpower. These men and women must earn wages in order to buy food, once they have been separated from the land. The difference between action and no action is the difference between SUNFED and UNFED. That may not translate into the many tongues of the more than one-half of the world's people who go to bed hungry every night,10 but it is, nevertheless, clearly understood. The words of Philippine Delegate Cuaderno and Nation's Business made this plain. On October 14, 1953, the United States delegate turned thumbs down on SUNFED. This action was held to be in line with President Eisenhower's April 16, 1953, speech which seemed to offer a bold program of international economic cooperation but in application has been interpreted as an either/or policy, that we will put up money either for military defense or increased economic aid, but not both: "The Government is ready to ask its people to join with all nations in devoting a substantial percentage of the savings achieved by disarmament to a fund for world aid and reconstruction." We can afford to contribute our share of SUNFED's $250 million-and much more. We can afford defense expenditures of $1 billion a week ($52 billion a 10 "Fully half of the world's people are still inadequately housed, clothed, and nourished. With the spread of industrialization and knowledge, the demand for better standards of living is increasingly and gradually becoming economically effective. This, together with the unprecedented growth of the world's population, with the wider application of medical science, means that acute shortage could quickly reappear if there were any halt in the steady expansion of world agriculture." P. V. Cardon, FAO Director General, August 1954. TECHNICAL ASSISTANCE PROGRAMS 161 year) and at the same time, contribute to SUNFED and invest in other phases of a rounded development program to the extent of billions a year. Proposed defense expenditures for 1955-56 are $36 billion, down $14 billion from 1953. Had steps been taken to maintain full employment, in 1954 our economy could have produced $30 billion more than it did. In its study, Can We Afford Additional Program for National Security?, pub- lished October 26, 1953, the National Planning Association 11 showed that with our economy operating at full employment levels by 1956 we could add $10 billion to our military and economic aid programs of all kinds, and increase by another $23.5 billion our spending and investment in personal consumption, new plant and equipment, and Government. (We could have increased wages and salaries all along the line, including the pay of Federal employees, not excluding Mem- bers of Congress, and without unbalancing the budget.) In 1955, with abundance in food, coal, oil, other minerals, manufactured goods, services, profits and savings by high-income individuals amounting to so-called surpluses within our own and other "have" nations and with the "have not" nations aware of the practical possibilities of having plenty, too, one luxury we cannot afford is the sort of short-sighted economy that sent the French Third Republic to defeat in 1940 with $2 billion in gold locked in the vaults of the Bank of France. In view of the accelerating pace of competition between Communist exploita- tion of hunger and our own efforts to eliminate it, what is needed-and quickly— is a clear mandate by the 84th Congress to President Eisenhower, Secretary of State Dulles, FOA Administrator Stassen, Ambassador Lodge, and our delegates to the U. N. to support SUNFED with words and money, now. It is foolish to the point of suicide to put off such economic cooperation until after worldwide disarmament is achieved. It is precisely during the period of tension when disarmament seems impossible that such positive offensives against poverty and hunger are most needed, most valuable, most powerfully effective in working out of the swamps and jungles of fear and war into the light and con- fidence needed for peace and disarmament. SUNFED is, indeed, part of the price of world disarmament. SUNFED is part of a positive peace offensive, a way to get off the dime of military defense and make real for mankind the four freedoms for which World War II was fought and won. STATEMENT OF JACOB S. POTOFSKY, CONGRESS OF INDUSTRIAL ORGANIZATIONS Mr. Chairman and members of the committee, we welcome this opportunity to appear here in support of continued and, we hope, expanded United States par- ticipation in technical assistance programs. We do so because we believe they offer a sound basis for a bold, positive peace offensive necessary for the survival of freedom and for progress toward peace and disarmament. Such programs, we believe, are the most practical way to close economic gaps between the "have" and "have not" nations. We and our allies must act with boldness, experience, and sensitivity in narrowing these economic gaps by helping underdeveloped countries to catch up with the farming industrial, and adminis- trative technology of the second half of the 20th century. As we do this we shall be able to ease and remove tensions that are a daily danger to world peace. Unless we do this, tensions will become worse as the gaps widen. Existing technical assistance programs in the underdeveloped areas of the world should, we feel, be strengthened. And, now that demonstrations, training, and pilot operations have succeeded and have inspired millions with new hope and determination, they must be given practical application. This can be done on a large enough scale to be decisive only by adequate provisions for public and private loans and grants-in-aid through the United Nations and regional organizations. To refuse or postpone the next step of putting to work newly acquired tech- nical knowledge and skills is to invite frustration, disappointment, and the loss of priceless time and production. To follow up the successful and inspiring technical assistance programs in underdeveloped countries with financing by loans and grants of projects needed 11 This NPA study, too much ignored but never refuted, was based on an annual improve- ment factor of 2.6 percent, an annual increase in the work force of 700,000 and a work- week of 40.5 hours, the weekly figure at the time of the study. t 162 TECHNICAL ASSISTANCE PROGRAMS to give quick employment to newly acquired knowledge and skills is to prove that the economic cooperation to which we pledged ourselves in articles 55 and 56 of the United Nations Charter can and does work among freemen. Moreover, if taken promptly this second step will make it possible for the 1 billion people of the underdeveloped areas to do more in shorter time to make themselves strong enough to resist and defeat Communist imperialism. Because we can afford survival we can afford both a military defense against aggresion and, simultaneously, our share of an economic and social offensive against poverty, hunger, disease, ignorance, and fear. Both programs are neces- sary for survival. We cannot afford the costly economy of postponing either one. Essential as is strong military defense, simultaneous economic aid and coop- eration will, in the long run, be more productive, more fruitful. They offer the only final solution to and escape from the present cold war and hot arms race in which new crises and new details of potential mass destruction are served to us by radio with our breakfasts. SUCCESS OF PAST AID PROGRAMS Recently attempts have been made to rewrite the history of the past 8 years so as to lump together the Truman plan for aid to Greece and Turkey, the Marshall plan, their present continuation under FOA and United Nations' agencies, NATO and other defense pacts as a multi-billion-dollar bundle of futile "giveaway" programs of little or no value to us or the cause of peace and freedom. A few comments are in order. They are needed to protect past and present programs against smears and future programs against being cut down at a time when they should be strengthened. The Truman plan for military and economic aid to Greece and Turkey saved the peoples, resources, and economies of those countries from the Iron Curtain of Communist imperialism. The Marshall plan supplied the margin that saved Europe from collapse and Communist conquest. On the basis of our firsthand knowledge and observation throughout Europe and North Africa we are convinced that, had it not been for the Marshall plan and its implementation under the bold and imaginative bipartisan leadership of President Truman and the late Senator Vandenberg, Communist imperialism long ago could have reached the Mediterranean and the English Channel. The culture, the skills, the material resources, the scientific, industrial, and agricul- tural facilities and plants of Western Europe would then have been taken behind the Iron Curtain. The industrial might and war-making potential of Communist imperialism would have been greatly strengthened. This, we believe, is the true history and lesson of the past 8 years. International economic cooperation under ERP, ECA, MSA, and now, FOA, has helped to save and strengthen western civilization, democracy and freedom. U. N. agencies have played a vital and increasing role as member nations have recovered from the effects of war. The policy of cooperation that saved Europe has succeeded elsewhere, though unfortunately to a lesser degree. We believe it shortsighted and mistaken to pare down or cut off economic aid except as, and to the extent that, it can be related directly to military defense. All sound economic aid strengthens security. The point IV and technical assistance programs that have been undertaken seem to us to have been the most fruitful immediate and long-run investments that have been made toward meeting our obligations under articles 55 and 56 of the United Nations Charter and for our own national security and survival. We believe the urgent need now is to add to a strengthened technical-assistance program a bold and massive economic-assistance program, using both public and private loans and grants-in-aid through the United Nations. CIO officers and members are intensely proud of the fact that from the time economic cooperation was first proposed we have given it support in words, deeds, and money. Bipartisan action stipulated at the very beginning of the ECA program in 1948 that labor should be included in its administration. Labor's knowledge, training, and experience in protecting and improving work- ing and living standards, in increasing production, in fighting the economic, social, and political conditions in which Communist power takes root and thrives, have been utilized in varying degrees. - TECHNICAL ASSISTANCE PROGRAMS 163 CRITICISM OF PROGRAM ADMINISTRATION It is well known that we have been and are critical of policies, attitudes, and methods used in the administration of the Marshall plan and today in the technical assistance and economic aid programs. We have not hesitated to make criticisms and what we have believed to be constructive suggestions. We have said that there was too great a tendency to pour money in at the top of national economies, relying on the unworkable trickle-down theory to get more purchasing power into the hands of wage earners and working farm people. We have criticized severely the tendency to give aid, comfort, and official approval to reactionary cartel employers who often do business with Com- munist-dominated unions. We have denounced Government officials who stubbornly ignored the Moody- Benton amendments that were intended to assist in channeling aid and offshore contracts to plants in which management is operating on a competitive basis and workers are represented by free democratic trade unions. We renew these criticisms but, in doing so, let no one think that we are pouring out the baby with the bath, that we are damning international eco- nomic cooperation. On the contrary, we believe today as profoundly as we did in 1947 when George C. Marshall addressed our ninth constitutional con- vention that international economic cooperation is the road to the sharing of abundance, to strengthening of freedom, and the attainment of a just peace. Undoubtedly other witnesses have urged and will urge this committee and the Congress to give greater emphasis to certain specific features, agencies, and functions in the technical assistance program. Some may offer suggestions and advice as to the location and methods of administration. SPECIFIC SUGGESTIONS FOR PROGRAM On behalf of CIO, and speaking on the basis of our experience in active cooperation at every step in the programs of the past 7 years, both in Washing- ton and in the countries in which the actual work was being done, we want to use our share of the time and attention of your committee to emphasize and urge 4 points: 1. As already recommended by your committee by Under Secretary of State Hoover, we urge the speedy authorization and appropriation of the $8 million needed to fulfill the United States moral commitments under the United Nations technical assistance program for the second 6 months of the current fiscal year. We understand that the questions about security that moved the 83d Congress to limit funds to the first 6 months have been cleared up. Certainly no time should be lost in meeting our share of the cost for the remainder of the present fiscal year. 2. We hope that recurring press reports of intended administration increases in requests for funds for technical assistance and economic aid for Asia are true. We hope that such increases will be substantial and will not be limited to Asia and other underdeveloped areas in the immediate and direct path of Communist imperialism, but will also provide for similar step-ups in such programs for Latin America, the Near and Middle East, and Africa. Whether or not the administration makes such requests, we urge Congress to make its own examination and evaluation of the need for expanded and strengthened programs of technical assistance, economic cooperation and as- sistance, including public and private loans and grants, not as deferrable items, but as urgent necessities in the world contest between free men and Commu- nist imperialism. We appeal to you then to authorize such programs in scope and amounts sufficiently broad and large enough to be decisive. 3. While these hearings may not be the place to explore the question of the administrative location of our programs of economic cooperation, we want to warn against fragmentation of the entire program or of such parts of it as point IV, technical assistance and economic assistance and cooperation. Par- celing-out of parts to various administrative agencies would invite that danger. We believe the entire economic cooperation program is important enough to be under the direction of an administrator responsible to the President and Congress, and established as an independent agency. We urge most strongly the continuance and enlargement of public representa- tion in the administration of the programs. Labor has taken seriously its re- sponsibilities in such participation and will continue to do so. 164 TECHNICAL ASSISTANCE PROGRAMS 4. We call upon your committee, the Congress and the American people to tear away the curtain of silence that for the past 4 years has surrounded SUN- FED (the Special United Nations' Fund for Economic Development) and to support it with words and money. At this point we ask the committee to include in the record of these hearings a memorandum on SUNFED prepared by the CIO department of international affairs. We also offer for the convenience of the members of the committee and staff, and for the press, copies of the Scheyven report on SUNFED made last August to the United Nations. Many of the citations in our memorandum refer to that report. SCHEYVEN REPORT ON SUNFED The Scheyven report on SUNFED seems to us to be one of the most moving affirmations of the indestructible spirit of man ever written. The author, a conservative Belgian banker, was president of the U. N. Economic and Social Council. In December 1953 the U. N. General Assembly requested him to survey and report on the need and prospects for SUNFED so as to assist the U. N. General Assembly to "facilitate the establishment of such a fund as soon as cir- cumstances permit." Undismayed by the continued opposition of the United States of America and nearly all the "have" nations on the plea of poverty, the 1954 Scheyven report summons mankind, particularly the "have" nations, to a new frontier, the wiping out of poverty and the reduction of hunger, disease, ignorance, and fear. As the report points out in detail, and as we have emphasized in our memo- randum, the "make ready" in opening this frontier is the establishment of the Special United Nations' Fund for Economic Development, the providing of grants to meet part, not all, of the cost of the so-called non-self-liquidating de- velopments that must be in place before self-liquidating investments through private loans, through the international bank, the proposed International Finance Corporation, or the Export-Import Bank can be effective. "Neither private capital nor existing international agencies can ensure the financing of non-self-liquidating investments," the Scheyven report points out, and defines the problem and of SUNFED's role in meeting it: "Any program of economic development, of necessity, contains a proportion of low-yielding and slow-yielding projects which yet are essential preconditions for the high-yielding and rapid-yielding projects. "Such basic projects *** include investments necessary for the promotion of health, education and housing-the human or social overhead capital-and of transport, communications, power and other public utilities-the economic overhead capital. These projects provide little or no yield in foreign exchange, usually furnish low yields in the short run and also generally require a con- siderable period of time before their yield can be realized in financial terms. because their benefits are derived from the more balanced development of the economic activities which utilize their services. "If economic progress is to take place at an adequate rate there must be a complex of investments to form what is known as the economic and social infrastructure of a country. The importance of this infrastructure is plain. "Roads, railways, canals, port installations and sources of power create op- portunities for business enterprise; clearing, irrigation and drainage make more land available for tillage. "Schools train the labor force and universities the leaders. "Hospitals foster the improvement of health and hygiene. "When the State has sufficient resources at its disposal it usually provides these services and finances these public institutions." The report is careful to state that the expression "non-self-liquidating invest- ments" is an accurate financial term in the sense that they do not produce revenue for the payment of interest and principal, but that "from the general economic standpoint all infrastructure investments, whether social or economic, may be regarded as directly or indirectly self-liquidating, since they all contribute to the short-term or long-term development of the economy." INVESTMENT IN INFRASTRUCTURE Because the infrastructure is essential to development and because develop- ment is the practical alternative to worsening poverty and resultant social and political turbulence, subversion, aggression and infiltration in the underdeveloped TECHNICAL ASSISTANCE PROGRAMS 165 areas of the world, we point out in our memorandum that the report's assertion would seem to be an understatement. Such investment in infrastructure would seem to be not only self-liquidating but profitable in the sense that survival is profitable. As infrastructure is built and beneficient upward spirals of development re- place present vicious downward spirals, the ratio of infrastructure investment to overall investment can be expected to decline; likewise, the share of invest- ment needed from sources outside the developing country. "Infrastructure investment is necessary in every economy, varying according to the state of development of the economy concerned. Thus experts consider that in the development of an underdeveloped territory, 60 percent of overall investment must be devoted to the infrastructure during the initial stage, whereas the industralized countries, where the purpose of such investment is merely to maintain, adapt and supplement the existing infrastructure, the pro- portion is roughly the reverse." The report makes it clear that SUNFED would not compete with the Inter- national Bank for Reconstruction and Development. At page 10, it quotes the bank president's endorsement of the SUNFED method. The fund is protected by its own organizational structure against drainage or raiding by "have-not" nations, as we show at page 8 of our memorandum. As the report points out at page 8, reforms in customs, laws and policies and habits of administration required in the industralization of underdeveloped countries can best be suggested to a sovereign state, not by representatives of one nation, but through an international organization, which is in a better posi- tion to spare national susceptibilities. Action to establish such a fund as SUNFED is years overdue. Because I had the privilege of serving as a member of the International Development Advisory Board, whose 1951 findings and recommendations are mentioned in the first section of our memorandum, I want to emphasize in the strongest pos- sible terms the board's deep conviction that "the problems of the underdeveloped areas in relation to mobilization for defense are truly inseparable.” Attached to my statement is the text of Mr. Nelson Rockefeller's foreword to the board's 1951 report. Certain passages in that foreword have been under- lined for emphasis. I call particular attention to the three closing sentences: "We tried to get down to basic values and fundamentals. As we worked, it was clear that we were confronted with two central problems, defense and de- velopment. It was clear that they were indivisible. In seeking the answers to these problems, the individual members of the board found unity and a com- mon cause." As our memorandum states, the basis for SUNFED lies in articles 55 and 56 of the United Nations' Charter, pledging the United States of America and other signatory nations to take joint and separate action to promote "higher stand- ards of living, full employment and conditions of economic and social progress and development." The idea of SUNFED was clearly delineated in the International Develop- ment Advisory Board recommendations which, at page 73, proposed: "To finance a portion of the cost of public works which are essential to the underdeveloped countries and which cannot be financed on an ordinary loan basis, the advisory board recommends the prompt creation of a new interna- tional development authority in which all the free nations will be invited to participate." And, at page 74, the board said: “In the opinion of the advisory board, the possibility of establishing such an international development authority should be explored with other countries at the earliest possible date. Furthermore, the advisory board recommends that the subscription of the United States should be $200,000,000. In the event that the development authority is organized and in a position to function in the fiscal year 1952, the administrator should be authorized to transfer funds to the au- thority out of the appropriated funds to the extent available at the time and should request the remaining funds in his appropriation for the fiscal year 1953." Our hope is that the same urgency expressed then can be recaptured now and that your committee will act to give approval to SUNFED by recommending authorization of the United States share of the proposed amount of $250 million. 166 TECHNICAL ASSISTANCE PROGRAMS FOREWORD¹ (By Nelson A. Rockefeller) One of the tragedies of the period in which we live is the loss of faith and hope. As the last war drew to a close there was a stirring of the people the world over-an awakening that found expression in the formation of the United Nations. Old patterns had been destroyed or broken down, but people believed that a new order of world unity was going to take its place. There was hope and faith that in this new unity of nations the peoples of the world could work together in the common interest of all. The people who had lived for centuries in poverty and sickness and the people of Europe and the United States alike united in a common cause. Today, after 5 years of frustration and disillusionment, where are we? One- third of the people of the world have lost their freedom and are herded to- gether under Soviet imperialism. The remaining two-thirds of the world's population is coming to see that the relentless pressures of military aggression from without and political subversion from within cannot be ignored or ap- peased. They again face the need to defend their freedom. But the free people the world over are awakening to the fact that defense, in and of itself, is not enough—that there must be a positive force as well. Two world wars have been won through the sacrifice of hundreds of thousands of lives, and now it appears, for the second time, the peace might be lost. The defense of freedom is one thing, the use of freedom is another. Perhaps we should be as alive to and aware of the latter as we are of the former. Perhaps they are more closely interrelated than we have realized. It might even be that winning world peace is even more difficult than winning a world war. Clearly nothing can be done now that diverts our energies from the all-im- portant task of military mobilization for defense. Is that enough? Can it alone win a war today? What assurance is there that even if another war were fought and won that we could deal more effectively with the peace thereafter? Does the defense of our freedom preclude the use of our freedom to work for the common interest of all? In simple terms, the Board felt that the free world community just like any other community must have the strength to preserve law and order-without which it cannot live in peace. However, law and order alone are not enough to meet the needs of a people. Their needs can only be met by expanding produc- tion, new business, more jobs, new schools and hospitals, and opportunity for all. The history of the United States is one of an expanding national economy with the productivity of labor increasing steadily at the rate of 2 percent a year throughout. The same must be true of the world community. It, too, requires an expanding economy which creates opportunity and increased earnings, better living conditions, hope and faith in the future. In such an atmosphere of ex- panding economic life free men and free institutions can and will thrive and grow strong. However, the economy of the free world as a whole today is static. The total production of the free world is not sufficient to meet both the defense needs and the human needs. Basic to defense and to human well-being and the promotion of free institu- tions is increased production-not in one part or country alone, but in all parts and in all countries. The Board in its report has tried to map out the road that can lead to this common destiny. Free men the world over must feel the surge of hope and faith that can only come from a united effort toward a common objective and the common objective can only be the peace, freedom, and well-being of all. These were the unanimous conclusions of the International Development Ad- visory Board whose membership includes representatives of business, labor, agri- culture, education, and the professions. International development and the mobilization of economic forces to bring about an expanding world economy in- volve vastly complicated factors. The Board recognized the danger of over- simplification and label thinking, particularly in the light of the necessities of defense. We tried to get down to basic values and fundamentals. As we worked, it was clear that we were confronted with two central problems-defense and development. It was clear that they were indivisible. In seeking the answers to these problems, the individual members of the Board found unity and a common cause. 1 Partners in Progress, a report to President Truman by the International Development Advisory Board, March 1951. TECHNICAL ASSISTANCE PROGRAMS 167 t 1 Senator MANSFIELD. The next witness will be Mr. Thorp. I will remind the witnesses that this committee intends to adjourn at 12 o'clock, so guide yourselves accordingly. Mr. Thorp, I am glad to see you back again. We remember you very well and favorably for your many years of service as Assistant Secretary of State for Economic Affairs. STATEMENT OF WILLARD L. THORP, DIRECTOR OF THE MERRILL CENTER FOR ECONOMICS, PROFESSOR OF ECONOMICS AT AMHERST COLLEGE, AND FORMER ASSISTANT SECRETARY OF STATE FOR ECONOMIC AFFAIRS Mr. THORP. Mr. Chairman and members of the committee, my name is Willard L. Thorp. I am director of the Merrill Center for Eco- nomics, professor of economics at Amherst College, and former Assistant Secretary of State for Economic Affairs. I suppose the main reason why I am here today is because I had the privilege of presenting the original Act for International Develop- ment to the Congress in 1949 and in 1950, and it continues to be a matter of great interest to me. I have a brief statement and I think it will save time if I read it. In the light of some current attitudes, I wish to present three broad propositions to the committee: (1) Technical assistance is more than a program for national defense; (2) The development of the underdeveloped areas requires more from us than expanded private investment; and (3) Technical assistance programs must be operated in close rela- tion to other elements in foreign policy. PROGRAM MORE THAN IMPLEMENT OF DEFENSE To elaborate my first proposition that technical assistance is more than a program for national defense: The technical assistance pro- gram is important because of its contribution to economic develop- ment. Different people see different values to be gained by the United States from economic development of the underdeveloped areas. Some would emphasize our increasing need for raw materials; some would stress the importance of expanding foreign markets for American products; and some would see a great opportunity ultimately for the profitable use of considerable quantities of American capital. Others would regard the American interest in economic development as essen- tially political in character, in that it would strengthen our foreign relations by the continuing act of cooperation and the display of mutual interest and concern with social and economic problems. Still others would emphasize the importance of technical assistance as a vehicle for strengthening the United Nations and the specialized agencies. And a very large group justifies the program simply on humanitarian and moral grounds. These various positions are not contradictory. They represent different justifications for doing the same thing. However, when we begin to describe technical assistance as primarily a defense program, then I believe we get into certain difficulties. When we begin to do 168 TECHNICAL ASSISTANCE PROGRAMS our thinking directly in defense terms, certain conditions to be at- tached to the program may seem reasonable and even certain changes in priorities may follow. The requirements of economic development may yield to notions of increased security. As soon as United States security is recognized as the avowed objective, suspicions and fears arise in the sensitive underdeveloped areas and the program, which should involve easy and enthusiastic cooperation, is made difficult if not actually endangered. I recognize that the technical assistance program was placed in the orbit of mutual security largely for operating reasons, but I think that it was a serious psychological mistake. How much it has affected the judgment of those who have operated the program, I do not know. I do know that it made it easy for the doubters and the critics in other countries to say cynically that this was merely part of the cold war rather than a serious attack on hunger, misery, and despair. Both President Truman and President Eisenhower have stated that the United States would contribute more to economic development if there were a reduction in armaments, that is, less need for defense. Just as better schools or roads in the United States can be said to contri- bute to our national defense, it certainly would seem to be true that stronger economies and increased effective international cooperation will strengthen the defense of the free world. I merely wish to em- phasize that stronger economies and increased cooperation are worthy objectives in their own right, and we should think of economic develop- ment largely in those terms. ECONOMIC DEVELOPMENT COMPLICATED PROCESS The second main point which I should like to make is that economic development is a complicated process and is not achieved by any single prime mover, even though that be private capital. Obviously, there must be an urge to development, there must be raw materials such as resources and labor with which to work, there must be working and fixed capital, there must be technical and organizational skills. These must operate against cultural backgrounds often not prepared or even sympathetic to change, and in situations where the offsetting rate of population increase may be high. It is clear that these various elements in the process of economic de- velopment are interrelated. For example, low productivity means a low national income which makes savings and investment difficult and hampers the improvement of productivity. Illiteracy limits the ef- fectiveness of the labor force which may then have such a low return on its efforts as to prevent the capital investment necessary and the allocation of time to schooling, so illiteracy is maintained. Bad health hampers food production which prevents building strong bodies. Thus the vicious circles tend to maintain the low levels of production and standard of living. There seems to be a present tendency to feel that many of these problems would be solved if only private foreign investment could be encouraged to enter these countries. Supposedly, it would then pro- vide technical knowledge, capital, and management experience. I certainly do not want to belittle the contributions which private foreign investment can make, but I do want to say that it will not possibly be enough. Quite likely, it would contribute to health and education TECHNICAL ASSISTANCE PROGRAMS 169 in its own locality, but these remain activities needing development on a national scale. It may contribute greatly to developing certain agri- cultural specialties for export, but it can hardly accept responsibility for basic agricultural development. In a sense, there are preparatory steps which must be taken by a nation wishing to move into this modern age. Those of us in the van have gradually built up our basis for production over the decades- our transportation system including our roads and our harbors, our power grids and distribution systems, our schools and our hospitals, and our tremendous assortment of skilled and experienced technicians, administrators, executives, and public servants. Furthermore, it is as progress is made in these broader social and economic investments that the opportunities for private investment begin to appear beyond the confines of the extractive industries. In addition to the fact that private foreign investment will be selec- tive as to the type of activity into which it will enter, it should also be noted that it will be selective as to the countries which it enters. The British experience of the last century was that their vast flow of foreign investment was subject to shifting fashions and preferences so far as borrowing countries were concerned. Many things may de- termine these national differences. The inflow of private foreign in- vestment may be a matter of the stage of the country's development, or of the so-called climate for foreign investment, or it may be that the country is in a particularly exposed position geographically or politically, so that higher returns are needed to offset higher risks. It may be that the nation where economic development seems most needed from our national interest point of view, will have least at- tractiveness to the private investor. Secretary Humphrey is quoted as having said in Chicago last Satur- day in discussing economic assistance: We can best serve the cause of the free world by helping its members to help themselves through selective development programs in which private investment can play a major role. I am happy to know that we do have an aid program for Asia of about half a billion dollars. I wish he could have been less grudging about this and been able to say that we were giving all the aid which we felt could be effectively utilized in the economic development of that area. But to suggest that we should focus our attention on "se- lective development programs in which private investment can play a major role" seems to me utterly unrealistic in terms of the problems involved in the underdeveloped areas. It might make some sense if we were talking about Austria or Australia, but what does it mean for Formosa, Thailand, Indonesia, India, and Pakistan. So far as many of the underdeveloped countries are concerned, it is hard to see how private investment can offer any considerable solution to their prob- Îems, and certainly not within the present state of international tension. I am not arguing that private investment cannot be extremely help- ful wherever and whenever it will go abroad, but I am saying that in many cases it won't go unless extraordinary profits are in sight, and in others, any considerable flow of private investment must wait large- ly upon the investment of public capital and the absorption of tech- nical knowledge. If we really are concerned with economic develop- 170 TECHNICAL ASSISTANCE PROGRAMS ment, whether for economic, political, moral, or humanitarian reasons, we cannot leave the job to private foreign investment. ORGANIZATION OF PROGRAM Under my third heading which relates to the organization of the work, I do not want to get into the technical details of public adminis- tration. However, I have certain basic beliefs. I belong to the school which believes that it should be the problem primarily of the Chief Executive as to how he will carry out the duties and responsibilities placed on the executive branch by the Congress. I do not like the easy solution of creating new agencies and then dealing with the new prob- lems created by creating a new coordinating agency. I have always felt that the Secretary of State should be the President's right-hand man in the field of foreign relations. The present trend seems to be toward even more decentralization, and I regret to see it. Foreign policy appears in many separate actions; and consistency and timing are important characteristics difficult to achieve if there is too much decentralization. Technical assistance is but part of the contribution which we can make to economic development, and within the total complex of foreign policy, those elements which are specially related to economic development need special coordination. OPERATION BY STATE DEPARTMENT I am not arguing that the State Department should necessarily oper- ate all foreign programs, although I suspect that its record for opera- tion is much better than most people realize. The post-UNRRA relief program, interim aid, the Greek-Turkish program, the Institute for Inter-American Affairs were all highly successful undertakings. In any event, of course, no specific program can be better than the men who operate it, but I should add that total foreign policy is the sum of separate programs and that much can be gained or lost by the way in which they are put together. I believe that this should be the State Department's responsibility. Senator MANSFIELD. Mr. Thorp, I see you have lost none of your old touch. Senator Fulbright? Senator FULBRIGHT. Mr. Thorp, as far as technical assistance is concerned, I agree with you, for I never was enthusiastic about taking it out of the State Department. Some of the other programs might be different. There is a good deal of criticism on the part of Agri- culture about the State Department interfering with the operations of the supposed surplus commodities abroad, a very complicated subject. I guess you are aware of that particular criticism. Mr. THORP. Senator, this is part of the job of the State Depart- ment. The amazing thing that I learned when I was there is that I spent more time in diplomatic relations with the rest of the United States Government than I did with foreign governments. And that is perfectly reasonable, because the other departments have many operations which impinge on foreign matters. And the State De- partment's job is to bring the foreign implications to the attention of the other departments. So that if you tell me that the State Depart- TECHNICAL ASSISTANCE PROGRAMS 171 ment is in something of a quarrel with the Agriculture Department, I would say that is a sign of real vigor and vitality in the State Department which I am glad to see. INTERNATIONAL FINANCE CORPORATION Senator FULBRIGHT. I don't want to take too much of your time, but you emphasized the difficulties confronting private investment— which I quite agree on. What do you say about the concept of the International Finance Corporation, which is not strictly private, but is Government money? Mr. THORPE. Well, the International Finance Corporation-having listened to the previous discussion, I think I would have to say-is probably not as promising as you seem to regard it, Senator. But I think it can make a contribution. Remember, the International Finance Corporation is an operation in which a subsidiary of the world bank would go into business with private investors in the hope that in time the individual projects would be so successful that it could drop out of them and the private investor partners would take the full responsibility. It has never been clear to me whether the hoped-for attractiveness to the private investor was that he would be able to pyra- mid his return on his equity, in view of the limited return which the Finance Corporation might receive, or whether it was because he would feel safer, having an international agency in with him. But perhaps this isn't important. The important thing is that some projects would get done. The reason I say that it has to be regarded as somewhat limited is that these have to be projects primarily in what would naturally be thought of as the private-investment field. So these would be indus- trial projects—————— Senator FULBRIGHT. Transportation? Mr. THORP. Not so much transportation, power, and things of that sort, as manufacturing and trade projects. The reason that I am not sure that one can put quite so much re- liance on it is that there remain these other basic areas, particularly the educational area and the health area, and the like, which are not in any way going to be helped by the IFC. Senator FULBRIGHT. I agree that they can't be handled all that way. Mr. THORP. There is a real hole, you see, in the programs as they stand at the moment. You can provide technical assistance in these areas. If it is technical assistance which works out a roadbuilding program, they can quite probably borrow from the world bank, or maybe the Export-Import Bank, for the building of roads. If, how- ever, this technical assistance program leads to the necessity of new schools, hospitals-what you described earlier as the type of thing which is not self-liquidating- Senator FULBRIGHT. That is right. Mr. THORP (Continuing). Then we don't have in the present inter- national scheme of things any way of getting that financed except by bilateral arrangement with the United States Government, which might be willing to do it as part of economic assistance or the appli- cation of counterpart funds. 172 TECHNICAL ASSISTANCE PROGRAMS I would say that this is the area in which the SUNFED supporters have their most effective position, namely, that this would be an organization which by grants or by very long term loans could help in these areas where otherwise the underdeveloped countries are lim- ited in getting aid at the moment. MAKING INDIGENOUS CAPITAL AVAILABLE Senator FULBRIGHT. I would like your reaction to this thought, which strikes me quite forcibly in some countries and not in others. I am thinking of countries like those in Asia-Iran, or even India. Actually there is considerable private capital present in those coun- tries, but there is no means of making it available. And because there has been no means and I certainly don't profess to know all the reasons why this money has a tendency either to be exports in the form of diamonds, as we read about, or spent by the occupants of villas on the Riviera. It is not put to use in the country. And one of the functions of this type of organization, I thought, would be to attract the local capital into useful activities. Now, I don't know how big that would be, but it strikes me that in some of those countries it is very substantial. Mr. THORP. Yes, I think this is one of the areas in which both the United States and the United Nations have done quite a lot in sug- gesting ways of making changes in banking arrangements, taxation arrangements, and so forth, that would help; and there are a number of instances that you can find that changes have been made: For example, in Iran, the Shah has turned over a very large percentage of what were the royal lands to private ownership on a smaller scale. He sent his chief forester to the U. N. for a conference on the whole problem of land management. This represented a case in which one of these tremendous accumulations was being broken up. Your question suggests a basic problem that even appears, if I may say so, from time to time in the United States. And that is that the people who are the wealthiest are likely to be the most satisfied with the way things are. And this is perfectly normal. The same thing is true in an underdeveloped country. If you are a person who for one reason or another has built up tremendous wealth and are able to live very happily and are in a country where the Christian-Judean background does not give you a sense of responsibility for other human beings, it may take quite some doing to get your wealth shifted into a more useful social stream. Senator FULBRIGHT. Mr. Thorp, there is a great deal I don't under- stand about these countries. What always struck me, though, as being rather unusual when I read about it, were the people with these large hordes of diamonds. I rather thought that was inspired partly by a sense of insecurity; there was no established method by which the money could be put to use, and they were afraid of being ousted, had a feeling of insecurity, and therefore, they put it in an easily trans- portable form. Is that true or not? Mr. THORP. That is part of it. But there is also the fact that they were so established in the country that they had great sources of income directly and didn't need to have any more. They had all that they could possibly spend, so there was no particular point in being bothered with investment. TECHNICAL ASSISTANCE PROGRAMS 173 Then also it is important to remember that in many of these coun- tries the tradesman, the businessman, and the manufacturer is very low on the social scale. This is a cultural condition that you have to take into account and finally break through. But there always are rank- ings of types of activities in any society. There have been times in the United States when bankers feel that they are low in the ranking. There are times when Congressmen may even feel that they are low in the ranking. We probably rate the businessman higher than is true in most countries. In many of the underdeveloped countries it is true that the person that we would define as a businessman is low on the social scale. And this is part of the educational process that has to be brought to bear on the culture, to show that there is something useful to society that can be done by this group, and to build the group up. Senator FULBRIGHT. I believe that is all. Senator MANSFIELD. Senator Aiken? ASIA AID PROGRAM Senator AIKEN. I want to tell you that since you went up to Amherst I have become a member of the Foreign Relations Committee. I am still a member of the Agriculture Committee. And I am happy to inform you that, if I am not mistaken, the Department of Agriculture is really getting along pretty well these days, in spite of an occasional harsh word or outward irritation that appears here and there. And your reference to the White House responsibility reminds me that even though the departments are getting along very well in comparison with some days of the past, they still require a little coordinating, and that is provided by the White House, very properly. I just have this to note in reference to your testimony this morning. On page 5 of your statement you say : I am happy to know that we do have an aid program for Asia of about half a billion dollars. I wish he could have been less grudging. I don't know whether or not you refer to Secretary Humphrey. Mr. THORP. Yes. I thought his statement was rather apologetic, as though it was because something had slipped by that we had that much. Senator AIKEN. As I recall, the appropriations for mutual security carried $700 million for Indochina alone, and there was provision for transferring that in the event that it could not be spent in Indochina. Also, more elasticity was put in the bill so that there could be transfers from one area to another. I think that should be very helpful, although I can't say whether the transfers have been made or not. I haven't kept up with that. But there is provision for using that money. As I recall, at the time the appropriation bill was passed, we didn't know just what southeast Asia was going to be like. Mr. THORP. I hesitated about putting any figure in at all, except this was the figure that was given in Secretary Humphrey's statement. The trouble with all these figures is that one isn't quite clear as to what is technical assistance, what is economic aid, what is defense support, and what may be tied in with some specific American strategic interest. It is very hard to know how to evaluate it. But in this par- ticular circumstance I had the feeling that probably Secretary Hum- 59637-55-12 1 174 TECHNICAL ASSISTANCE PROGRAMS 3 phrey would present as large a figure as he could, because he was more or less taking the position, you see, that the bold new program for Asia was not in the cards. So I would assume that he would show that we have a pretty good sized program there. But probably it is fairly inclusive. SUPPORT IN EQUIPMENT AND SUPPLIES I might make one statement, if I may, about a point which occurred to me in connection with Mr. Reuther's testimony that perhaps should be tucked in as an added point. One thing that has been learned about technical assistance is that just sending trained people out there is frequently not fully effective. Take Senator Fulbright's illustration. You send a county agent into one of these underdeveloped areas and he advises on the use of some new kind of seed. Now, in the United States we have devices for loans and for providing seeds, and so forth. But back in the under- developed country it may not be so easy, and even though the adviser tells the farmers in some area in Pakistan that a particular seed would improve things greatly, unless this is backed up by some actual pro- vision for the seeds, the program isn't effective. All I am saying is that it is quite clear that the technical assistance program needs to have along with it not just the people but some sup- porting funds for demonstration, or perhaps even for the provision, let us say, of wells, if it turns out that water is the key thing that is required. And therefore one of the things that I would hope would be done as one looks at the technical assistance program, is not to narrow too much the definition of technical assistance, but to make it possible for the people who are going out under technical assistance programs to have what seems reasonable in the way of support in terms of equip- ment and supplies, and so forth. Senator FULBRIGHT. I would certainly agree with that statement that it is a matter of degree. In the cases that I was talking about, if you recall, there came under the program this expensive, complicated combine in Iran. That was going too far, as they had no business having a combine at that stage. OPPOSITE APPROACHES TO PROBLEM OFTEN NECESSARY Mr. THORP. I think another thing that has been learned in connec- tion with economic development is that there are many countries where one almost has to approach the problem from the opposite way that we approach it in the United States. In the United States prog- ress is made by labor-saving devices. We have capital which we can apply. The labor moves to other uses. In many other countries what one really is concerned about is labor-using devices. There the labor is only partially employed, and the problem is how to get more people to work with whatever is available in the way of capital. This means, for instance, that it would be perfectly absurd in India to send our most modern road-building equipment which requires virtually no manpower at all to operate it. That would be silly, be- cause manpower is available, and that equipment would tie up a lot of capital which probably should go into other uses that would be much TECHNICAL ASSISTANCE PROGRAMS 175 more productive. This is an interesting difference in the whole prob- lem that I think should be considered. In many of these countries the programs have to be judged on a somewhat different basis than one would judge a program in the United States. You must judge it in terms of the resources there and the cultural situation there, and not in terms of our normal engi- neering standards. Senator FULBRIGHT. And each country is different from every other country. Mr. THORP. Each country is different. You find some common characteristics, but nevertheless no rubberstamps can be used in a good economic development program. Senator MANSFIELD. Mr. Thorp, I just want to say that this state- ment of yours is extremely well done, and I think Amherst is extreme- ly fortunate to have you on its faculty. Thank you. Mr. Andrew Biemiller, representing the American Federation of Labor, is ill today. His statement will be incorporated in the record at this point. STATEMENT OF Andrew J. BIEMILLER, MEMBER NATIONAL LEGISLATIVE COMMITTEE, AMERICAN FEDERATION OF LABOR The American Federation of Labor has always been enthusiastically in favor of the objectives and philosophy of the technical assistance program. We are convinced that no program is more important to the peace and well-being of the world. Our own country will be strengthened if the economic, social and politi- cal institutions and the moral fiber of the free world are all made stronger. One of the greatest forces against communism is the willingness of America to share freely, without overtones of colonialism or imperialism, the benefits of human progress with other people. In 1949, the first year of the technical assistance program, the convention of the American Federation of Labor said: "Hunger, social injustice, proverty, and despair are the strongest allies of dic- tatorship and war. The surest way of safeguarding democracy, security, and peace is to raise the standards of living of the peoples of the earth. As the lead- ing democratic country and the nation with the highest industrial development, we have the greatest moral and material responsibility for helping the peoples of the world to harness modern technology in the service of human well-being, peaceful social progress, and international harmony. "The struggle between the forces of human freedom and the battalions of totalitarian despotism for the souls and minds of men is fast approaching the hour of decision. The American people are in a privileged position to help ex- pand and improve the economic foundation for the democratic aspirations and cultural progress of the aroused peoples of Asia, Africa, and Latin America. Furthermore, American assistance to the economic and social development of these nations will not only fortify the cause of human liberty, but also enhance our own democratic vitality and prosperity. Hence, help in developing the un- derdeveloped areas is a decisive feature of our country's foreign policy and a powerful aid to the transformation of the U. N. into an effective instrument of world peace. "To improve the productive resources and the conditions of life and labor for more than half of the world's population is a task which involves far more than economic problems. Effective assistance must envisage not only technical aid and the provision of capital. Point IV carries with it social, cultural, and inter- national overtones of major import. Not only capital investment and technical know-how are required. Human training and retraining are absolutely essential. Not only material but human resources will have to be planfully invested." SUGGESTIONS FOR PROGRAM OF TECHNICAL ASSISTANCE The A. F. of L. also made several suggestions for implementing these ideals. They included: 1. Have recipient as well as assisting nations join in the planning. 176 TECHNICAL ASSISTANCE PROGRAMS 2. Wherever possible have more than one nation drawn into the sponsorship, using the United Nations and its specialized agencies as the machinery, pro- vided however, that no veto power should be permitted. 3. No interference in each other's domestic affairs or political life and no violation of sovereignty. 4. Use an ever-increasing number of natives in the program. Help native peoples develop free and democratic trade unions, farmers' and consumers' organizations as well as be trained in industrial, agricultural, and distributive efficiency. 5. Workers must be given a just share of the benefits of rising productivity and efficiency. Workers must be guaranteed the right to join free trade unions and engage in true collective bargaining. Minimum wage standards and decent working conditions in accordance with ILO standards must be established, in- cluding no racial discrimination or forced labor. 6. To avoid the evils of absentee-ownership, control and ownership of im- portant projects should rapidly be placed in the hands of the country aided in accord with the economic forms its own people democratically determine. 7. In order to obtain maximum cooperation of working people and achieve the worthy goals of technical assistance, the respective free trade unions should be represented on all important planning and project commissions. ACCOMPLISHMENTS HAVE NOT REACHED POTENTIAL The Foreign Operations Administration tells us that the point IV program has great accomplishments to its credit. They claim spectacular successes have been achieved in many countries, particularly in the advancement of public health and agricultural techniques. They tell us recipient countries have matched our financial outlays with from 2 to 27 times our contribution. In most instances they inform us, successful projects are now entirely in the hands of the nationals of the assisted countries and the impact of the original project has been felt many times over. But valuable as these programs have been we do not believe they have ever reached their full potential. We do not believe all possible efforts have been made to enlist the full participation and cooperation of native peoples, particularly in the existing trade unions. Nor has the United States given the spiritual inspira- tion and active and consistent leadership, which we are by our tradition and his- tory so well equipped to give, to the colonial and undeveloped areas in their struggles for national independence and a better life. Point IV has come closer than any other program but it has never completely made use of the human resources at its command. Nor have we come forward with an adequate financial program for the technical advancement and economic improvement of the industrially undeveloped countries which could make their raw materials, so necessary to our economy and defense program, available in adequate quantity. In this connection the 1953 convention of the American Federation of Labor said: "The American Federation of Labor, having been among the first to demand that the free world offer the backward national a constructive alternative to communism has consistently and strongly supported the point IV program, and the United Nations technical assistance program. The monumental task which economic development presents cannot be accomplished without the help of the free trade union movement. Nor can its objectives, of elevating living standards and strengthening freedom and democracy, be gained without the encouragement of the development of strong free trade unions in the nations we seek to aid. We have insisted, therefore, that trade union training, workers' education, and the promotion of fair labor standards and full worker participa- tion must be accepted as an essential feature of technical assistance programs. "Capital funds must be made available in greater volume for the purposes of the development program. Private foreign investment, accompanied by strict political and social safeguards against the abuse of power by outside interests, must of course be stimulated and encouraged. But private capital alone cannot do the job, for there are many necessary projects which are inappropriate for private investment and which private capital would not undertake. For these purposes, an International Development Fund, financed by the economically advanced countries, is needed as a source of capital. "We deplore the inadequacy of the funds made available to date for aid to underdeveloped countries. Both TCA and the United States contribution to TECHNICAL ASSISTANCE PROGRAMS 177 the multilateral United Nations technical assistance program should be greatly expanded." In 1954 our convention recommended the international development fund con- cept be extended to include funds for purchase of consumer and other goods on an installment plan, suggesting a fund of $10 billion be established for this purpose. We further recommended an international conference of the free world be called to further this proposal. Our executive council meeting earlier this month reiterated this proposal. The Foreign Operations Administration formed in 1953 has taken over the functions of the Mutual Security Administration, The Technical Cooperation Administration, and the Institute of Inter-American Affairs. Top leaders of the A. F. of L., the CIO, and the railway brotherhoods are serving on a labor ad- visory committee to the FOA. Labor advisers are being appointed to the missions abroad. We believe considerable progress has been made during the past year and that the unification of these agencies has proven of real value. We hope the recognition accorded the trade union centers of the United States will be extended to the free trade unions of all the recipient countries. It is a matter of historical fact that free trade unions are the most dependable and strongest factor in the fight against dictatorship. The unions in all the free countries must be strengthened and encouraged to stand on their own feet. A properly run point IV program can make a significant contribution to this desirable end. In summarizing may we again state: 1. We believe the technical assistance program can do great good and we call for increased appropriations for both bilateral and U. N. technical assistance, including the establishment of an international development fund. 2. The most good can come from establishing contact between individuals and groups who understand the problems involved and we call for full par- ticipation of representatives of the basic economic groups of the peoples involved, particularly the free trade unions. 3. An economic conference of the nations of the free world to devise ways and means of still furthering economic cooperation, including representatives of basic economic groups, would help immeasurably in strengthening the economy of the free world and the resistance to the spread of communism. We urge the Government of the United States take the initiative in calling such a conference. Senator MANSFIELD. The next witness is Rabbi Philip Bernstein, of the American Zionist Committee for Public Affairs. Rabbi Bernstein, will you come up and proceed with your testimony? TESTIMONY OF RABBI PHILIP S. BERNSTEIN, REPRESENTING AMERICAN ZIONIST COMMITTEE FOR PUBLIC AFFAIRS Rabbi BERNSTEIN. Mr. Chairman, I've just returned from an in- tensive 3-week visit to Morocco and Israel. North Africa is now the chief source of immigration into Israel. The condition of Moroccan Jewry and the consequent problems of their resettlement in Israel illustrate the value of the United States technical assistance programs. Moroccan Jews, living in a Moslem country have never been accepted into full citizenship. They have remained a depressed element in the population. Economic and social conditions in the Mellahs, the ghet- toes of Casablanca and Marrakesch, as well as in the many villages in which Jews live, are appalling. The common practice is for a large family to live in a small room devoid of ventilation and sanitation. Trachoma and tinea, and tuberculosis are rife. When one crosses the line between modern Casablanca and the Mellah where 50,000 Jews live, he reverts a millenium in time. And now the tensions between the Arabs and the French have gravely aggravated the problems of the Jews. They are caught in the middle of inflamed passions and violence and have already suf- fered much. On August 3, 1954, seven Jews were massacred by Arabs in the town of Petitjean. Because of this danger to themselves and 178 TECHNICAL ASSISTANCE PROGRAMS their children, because of the historic degradation imposed on them in Morocco, because as they said to me, "Israel now exists," many Mo- roccan Jews now desire to settle in the new Jewish State. At the mo- ment 2,000 a month are leaving. The rate of movement is increasing. Although it is likely and right that a substantial number of Jews will remain in Morocco, it is also probable and understandable that the majority will probably choose complete equality as Jews in Israel. Now then, look at the problem from the Israeli point of view. Here are tens of thousands of Jews entering modern Israel from a backward, depressed level of living. They need hygiene and sanitation. They need technical and occupational reeducation. They need homes, they need work, they need land, they need cattle and tools. No longer is Israel content to gather vast numbers of unselected im- migrants into reception camps and temporary work camps. These were demoralizing and costly in money and morale. A new system has been devised. Today the prospective immigrants are carefully screened in their own villages or cities. They are given such assistance as they may require to make them eligible for immigration. Then when they arrive in Israel they are immediately transferred in family groups to the villages, the colonies, the towns where homes and work are awaiting them. Most of them go down into the Negev, the fabu- lous wasteland of the south. They will move immediately to their own home and go right to work on their own little piece of land. They may already find a cow, machinery, water, available for them. This is practical humanitarianism raised to the level of social statesman- ship. IMPORTANCE OF TECHNICAL ASSISTANCE TO SETTLEMENT There is hardly a stage in this process of settlement in Israel at which American technical assistance has not played an important role. Starting with the land, I have seen dikes, and restraining dams constructed with American technical aid, which spread over large areas of land, the torrential streams rushing down the wadis occa- sionally during the winter. Thus the ground penetration of perhaps a foot of water insures green fields in May and June and crops to sus- tain the settlers. The exchange of technical knowledge, skill, and know-how, have been helpful with the housing problem. As to public health, a group of sanitation experts from Tel Aviv, Haifa, and Jerusalem have come to America to bring back to Israel the benefits of our experience. Israeli and American technicians are breeding Jewish cowboys. A training ranch in northern Galilee is preparing a group of young Israelis to ride herd. Quality stock has been imported to breed with native cattle, grass seed is being provided from a special farm near Ashkalon. Fields of alfalfa are irrigated to sustain the cattle through the dry summer months. Thus, our technical assistance program is helping Israel to become self-sustaining in her meat supply. Public health teams are setting up health centers that enable the new settlers to become productive citizens. Advances in American medicine and public hygiene are quickly related to Israeli needs. There is also investment of faith in the future. The Negev once held a large and prospering population. Now it is desolate. Can it be reclaimed? Here are the natural resources of phosphate, manga- nese, and copper. Once the copper mines of the Negev added to the TECHNICAL ASSISTANCE PROGRAMS 179 wealth of Solomon. Can these resources not be tapped again? And what about oil? Under our technical assistance program an Ameri- can firm is bringing expert knowledge and American experience to bear on these problems and these hopes. Thus the exchange of technical knowledge has been enormously helpful to Israel in increasing production, in exploiting natural re- sources, in the farsighted development of industrial potential, and thus in absorbing large numbers of impoverished immigrants who might otherwise become unsupportable burdens on the new state. HELP URGENTLY NEEDED NOW This help is urgently needed at the present time. Israel has tripled her population in a few years. She has been compelled by Arab in- transigence to devote a large part of her budget to defense. She has been compelled to deal with innumerable economic, poltical, and social problems of the greatest magnitude. American technical assistance confirming the historic friendliness of the United States to Israel, has helped the new state to survive and to raise its standards of living. This has been a cooperative venture. Israel has contributed nearly 4 million pounds in the years 1952-54, when the United States techni- cal assistance provided some $6 million. There is between our experts and hers a constant give and take, a friendly cooperation, a common- sense of contribution to the future. Apart from and perhaps because of the disappointments the Israelis have encountered in other areas, they are particularly grateful for United States economic and technical assistance. There is a warm feeling of appreciation which helps to form a bridge of understanding and good will between the oldest and the youngest, the greatest and the smallest of contemporary democracies. Senator MANSFIELD. Thank you, Rabbi Bernstein. Senator Fulbright? Senator FULBRIGHT. I don't believe I have any questions. I think it is a very fine statement showing what the value of this program can be. I would like to know if you think an institution like the Interna- tional Finance Corporation would have any opportunity to be of as- sistance in Israel? Rabbi BERNSTEIN. I am not qualified to answer that question at the moment, Senator, and I would rather not answer it in an inade- quate way. Senator FULBRIGHT. What you are saying here is that the technical assistance program that we have already developed has been of great assistance in Israel? Rabbi BERNSTEIN. Right. Senator FULBRIGHT. And it still has a part to play, I take it? Rabbi BERNSTEIN. A very important part. Senator FULBRIGHT. I believe that is all. Senator MANSFIELD. Senator Aiken? SITUATION OF REJECTED IMMIGRANTS Senator AIKEN. There is one thing in your testimony, Rabbi, which disturbs me a little bit. I know that Israel is limited as to means and as to land. And I note in your statement you say that in the case of 180 TECHNICAL ASSISTANCE PROGRAMS prospective immigrants, from Morocco, they are carefully screened in their own villages or cities. That must leave quite a lot of them with- out hope, doesnt it? What becomes of those? Do they go from bad to worse, do they find some other place to go, or what does happen to them? Rabbi BERNSTEIN. Well, you are quite right, Senator, in suggesting that that is a very serious problem. Senator AIKEN. I realize you can't take them all. You don't have the land, you don't have the means to move them, and you don't have what it takes to set them up under reasonably decent standards. I was wondering if there is any hope for them. Of course, you might say they haven't any hope now, so they are no worse off. Rabbi BERNSTEIN. I would like you to know that the American Joint Distribution Committee is helping those people as much as its resources make possible. What is happening to them is that where they are in remote villages and in physical danger of life and limb, they are moved into the larger cities, and there they are resettled and rehabilitated in a new environment. Senator AIKEN. And there is a possibility of helping them? Rabbi BERNSTEIN. That would depend on the local situation. There are remote villages in the hills in Morocco where the Jews are cut off from all contact with any other Jews and where in the current situation there is real danger to life. The thing that seems to the responsible leadership is not to keep them in those villages but to move them into larger cities where they can be protected and helped. I might add this: that Israel has a current plan and a contingent plan. If there should be-and heaven forbid-pogroms-and very grave and critical dangers, my own judgment is that many of these restrictions will be set aside and people will be saved. But for the present they are trying to do it in an intelligent, planned, constructive way. Senator AIKEN. Do you think the situation in Morocco is getting worse? Rabbi BERNSTEIN. Well, I have to begin by saying that I don't regard myself as an expert-you can't be in a country like that—and I can just give you an impression. My impression is that the situa- tion-at least so far as Jews are concerned, and so far as the relations between the French and Arabs are concerned-is basically dangerous and unhealthy. That is my personal judgment. Whether it takes a crucial emergency form at the moment is a question. The Jewish leadership assumes that it is not taking that form at this moment, that they have time for a plan, for intelligent, constructive planning. But the basic situation is not healthy; it is explosive. Senator AIKEN. That is all, Mr. Chairman. Senator MANSFIELD. Rabbi Berstein, in your testimony you state that the amount of American technical assistance to Israel has been $6 million, and that the Israeli contribution has been 4 million pounds. What is the rate of the Israeli pound as compared to the dollar? Rabbi BERNSTEIN. The current effective rate is 1.80 pounds to the dollar, and the official rate is 1 pound to the dollar. The effective rate is the one which would determine the ratio in the United States-Israel joint fund. However, this 1.80 rate went into effect only within recent months; formerly it was $2.80 to the pound. It would therefore require a TECHNICAL ASSISTANCE PROGRAMS 181 breakdown by periods of the amounts that make up the total in order to determine the relative contribution, so that I am unable to say at the moment. Senator MANSFIELD. Rabbi Bernstein, the committee wants to thank you for taking your time to come down here. We understand you had difficulty making plane connections, and we are glad that you could get here on time. We are glad to have your report on technical as- sistance at this time. The committee will meet tomorrow morning at 10 o'clock in the Foreign Relations Committee room. The committee is now adjourned. (Whereupon, at 12: 10 p. m., the committee adjourned, to Thursday, February 24, 1955, at 10 a. m.) TECHNICAL ASSISTANCE PROGRAMS THURSDAY, FEBRUARY 24, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The committee met, pursuant to adjournment, at 10: 10 a. m., in the Foreign Relations Committee Room, United States Capitol Build- ing, Senator Mike Mansfield (chairman of the subcommittee) presid- ing. Present: Senators Mike Mansfield, Fulbright, Aiken, and Capehart. Senator MANSFIELD. The committee will come to order. Mrs. A. Paul Hartz, General Federation of Women's Clubs. Proceed in your own way, Mrs. Hartz. STATEMENT OF MRS. A. PAUL HARTZ, CHAIRMAN OF LEGISLATION, GENERAL FEDERATION OF WOMEN'S CLUBS Mrs. HARTZ. Thank you, sir. Mr. Chairman and members of the committee, I am Mrs. A. Paul Hartz, chairman of legislation for the General Federation of Women's Clubs, an international organization composed of 11 million women. The General Federation of Women's Clubs has as an international organization supported these programs because they are in keeping with the basic ideals for which it was chartered by the United States Congress in 1901. The purpose as set out in its charter is— To unite the women's clubs and like organizations throughout the world for the purpose of mutual benefit, and for the promotion of their common interests in education, philanthropy, public welfare, moral values, civic and fine arts. The General Federation of Women's Clubs is concerned with the standard of living of the people in countries that have had less oppor- tunities than some of the more fortunate countries. We believe that the ultimate peace of the world depends upon the physical and moral standard of living of all people. And we believe that the coordinated work on the problems for the technical assistance program have been most effective, and through this work differences are being resolved into a greater feeling of understanding and fellowship among mankind. We believe that a continuous coordinated program is necessary if our Government is to give maximum help to those nations trying to raise their standard of living. It seems the only hope for some na- tions to take their rightful place among the family of nations depends upon aid to help them help themselves. 183 184 TECHNICAL ASSISTANCE PROGRAMS We further believe that the enduring peace of the world depends upon the success of this program of technical assistance. Senator MANSFIELD. Thank you, Mrs. Hartz. Senator Capehart? Senator CAPEHART. I do not believe I have any questions at the moment. Senator MANSFIELD. I have no question, Mrs. Hartz, but the com- mittee is delighted that you are here representing the women's clubs, and we certainly will give consideration to your statement. Thank you very much. Mrs. HARTZ. Thank you. Senator MANSFIELD. Mr. Charles Taft. STATEMENT OF CHARLES TAFT, CHAIRMAN, ADVISORY COMMITTEE ON VOLUNTARY FOREIGN AID Mr. TAFT. Mr. Chairman, I am not sure whether I am invited here as a citizen or as the Chairman of the Advisory Committee on Volun- tary Foreign Aid of the Foreign Operations Administration. I am glad to speak in both capacities, so I do not think I am embarrassing anybody. BACKGROUND OF COMMITTEE The operation of this committee, Advisory Committee on Volun- tary Foreign Aid, began with the Neutrality Act of 1937. It was rec- ognized that gifts for war relief in belligerent countries could be a source of difficulty. The Department of State was called on by that act to regulate solicitation and distribution of these gifts. When the war broke out, the Department of State got swamped, and in the spring of 1941, the Secretary of State asked the President to appoint a committee of citizens. Mr. Joseph E. Davies, Mr. Frederick P. Keppel, and I were designated as the President's War Relief Control Board. We operated until we got into the war, and then se- cured an Executive order and required private agency operations to be licensed thereafter beginning in the summer of 1942. We assisted the organization of the USO, and helped form the national war fund. We ended our operations at the end of the war, but recommended that the present organization, the Advisory Committee on Voluntary Foreign Aid, be set up in the Department of State and the Department. of Agriculture. There had to be licensing of the export of various items in packages or in bulk which the private agencies wished to send, and it was for that reason that we were partly appointed by Agriculture. We have been able, on a voluntary basis, to get all important American private agencies to register with us and to report their receipts and expendi- tures for regular quarterly publication. I think, perhaps, we should give you for the record our last annual report showing the list of agencies, and what they have sent in com- modities or in cash. I think that might be of some interest for the committee's record. We were transferred in July 1953 to the Foreign Operations Ad- ministration. The Committee under whose auspices the Voluntary Foreign Aid Division in the Office for Refugees, Migration and Volun- tary Assistance operates, now consists of eight members, and I am TECHNICAL ASSISTANCE PROGRAMS 185 its chairman. I see that it is now proposed that, perhaps, we go back to the Department of State. We do not mind much. We keep on working the same way whichever we are. It was obvious at the end of the war that we should get away from relief, and encourage rehabilitation projects, and there are quite a few agencies that wished to do this. When the point IV program was sug- gested and put into effect, I am sorry to say that the agencies concerned failed to realize that the missionary movements of the Christian churches had been engaged for a century in exactly this kind of enter- prise. One of the ones I think of is that of Mr. Hatch, under the YMCA in India, who pioneered in developing to a considerable degree the production and distributing of cashew nuts, which you can buy now on every newstand. That was not known before that kind of an operation. It was at least a year before this unusual source of advice and co- operation for point IV was tapped. Our Committee in 1952 published a fairly complete list of the old and the new technical assistance proj- ects of the various private agencies and foundations. This is a copy of it. I do not know whether the committee has this or not. Senator MANSFIELD. We will be glad to have it. Mr. TAFT. I will be glad to give it to you now. We have urged that a similar listing of projects of commercial organizations in this general category should also be made. It has not been done. It is not strictly in our area, but we feel that it is some- thing that should be done. PRIVATE RELIEF OPERATIONS Now, on page two of my statement I have reviewed some of the relief operations that have been conducted. The private agencies were a natural channel for the shipment of agricultural surplus commodities, and our Committee secured the first appropriation for ocean freight on these or similar supplies. Section 409 of the Mutual Security Act of 1954 continues this au- thority which was first given in the ECA Act of 1948 and continued by the Congress in each succeeding year. As a prerequisite to spending funds appropriated by the Congress for this purpose, an agreement is entered into with the host government, providing, as a minimum, for duty-free entry of the supplies and inland transportation to the point of ultimate distribution by the host government. Such agreements provide and sustain a cooperative relationship among the three major participants: the American voluntary groups, the United States Gov- ernment, and the governments of the host countries. During the fiscal year ending June 30, 1954, these voluntary agencies under this subsidy program shipped to 16 countries supplies totaling in value $70.5 mil- lion with the United States paying $4.8 million in ocean freight costs. to move these supplies. Of the $70.5 million total, $44.7 million represented the value of surplus agricultural commodities and $25.8 million was the value of relief and rehabilitation supplies contributed voluntarily to the agencies by the American public. I would only say in summary that in the summer of 1953, the amounts distributed since the end of the war had reached $12 billion. We believe that with the addition of somewhat more commodities this has, by this time, reached at least $2 billion. 186 TECHNICAL ASSISTANCE PROGRAMS Senator CAPEHART. This is what, private sources? Mr. TAFT. This is private sources, or transported and delivered through private sources, that is, private agencies which handle com- modities and distribute them in the foreign country. Senator CAPEHART. You mean commodities furnished by the Gov- ernment? Mr. TAFT. Furnished by the Government, yes; but they have raised much of their own in the way of clothing and other kinds of supplies which they have shipped under the provision of the Mutual Security Act, to which I referred here, which continues the authority for ocean freight payments. Our Committee was the one that got that authority in the first place in 1948. PRIVATE TECHNICAL ASSISTANCE The scope of the voluntary agencies' programs goes beyond the countries participating in the subsidy program described above. They are carrying on programs in some 76 countries and areas of the world, and during the same period, i. e., the year ending June 30, 1954, their combined expenditures, including the value of gifts-in-kind as well as cash, for relief purposes on a worldwide basis, totaled upward of $165 million. Combined expenditures of these agencies during the period July 1, 1954, through December 31, 1954, amount to, approxi- mately $87,500,000. But the contributions which these private groups. are making to our peaceful objectives around the world cannot be measured solely in dollars and cents or material aid. The face-to-face relationships of these devoted Americans in the field, with the peoples of foreign lands, does much to interpret the meaning of America and what we truly stand for, thus countering the evil exploitation of mass misery by the Communist side. Their activities are not limited to material aid alone. They are carrying on services for special groups, children, sick, aged, the handicapped, as well as programs of self-help and rehabilitation in the fields of health, agriculture, education, com- munity betterment and general welfare. They are assisting homeless and uprooted people to find new homes and new hope in more friendly countries around the world. They are, in the most practical sense, carrying on abroad the kind of activities in the field of human rela- tions which the conscience of America has always supported. As you know, the technical cooperation programs, from the begin- ning, have aroused the profound interest of the American people. Those in the United States who have taken the lead in expressing this interest are, besides the great religious groups, educational, farm and labor groups, women's clubs, and other civic organizations. What makes the greatest appeal about the technical cooperation program is self-help, that aspect, among people who are eager to raise their own standards of living. The idea of large-scale grants continuing indefinitely is repugnant to the supporters of the program. What they like is to preserve the dignity of the recipient of this kind of American assistance by the very fact that it is put on a cooperative basis. The voluntary agencies, with which the Foreign Operations Administration is cooperating in the programs, range all the way from the large foundations to small foreign operations often conducted under religious auspices or affiliations. The FOA has been especially eager to identify and stimulate the work of these private groups. TECHNICAL ASSISTANCE PROGRAMS 187 As I said before, these agencies have been conducting small-scale technical assistance activities, in some cases for over a century in the underdeveloped countries. They may be found operating a voca- tional school along the upper Nile; a health clinic in Iraq; an agricul- tural project in India; or a community development project in Latin America. The personnel of these agencies is dedicated to the work of serving and bettering the conditions of mankind regardless of race, creed, or color. They may be found in or will go to the remote areas and villages of these countries, far removed from the capital cities. Their value to the programs being conducted by our Government is that by our cooperation with them, they can and do serve as multipliers of the effects and benefits of technical cooperation. In a sense, the moti- vation of these agencies and the United States Government is the Both they and the Government are doing these things because in the present worldwide struggle between the East and the West it is the basic worth and dignity of the human person which is at stake. same. FOA RELATIONS WITH VOLUNTARY AGENCIES FOA issued a formal policy statement last year in regard to the development of relations with voluntary agencies. The pattern of relations falls into two main categories: (1) Formal or contractual relationships; and (2) informal, noncontractual or simply cooperative relationships. A copy of the policy statement is attached and marked "Exhibit A." [See p. 198.] Since the policy statement was published, FOA has been issuing a periodic status report which shows on a regional basis the types of relationships now in force with voluntary agencies, and those which are in the process of being developed or negotiated. A copy of the latest status report is attached hereto and marked "Exhibit B." [See p. 203.] Of course, it is bound to be partial, but it is a good sample of how the thing operates each month. I am glad to say that the entire FOA is very much aware of the importance of voluntary agencies in cooperation with the technical cooperation programs. After Congress appropriated the funds for the fiscal year 1955, a step was taken to set aside $1 million as a special reserve fund to stim- ulate the participation of voluntary agencies in unusual and experi- mental projects in the technical cooperation programs. This amount is not a ceiling for the contracts which may be entered into with volun- tary agencies for technical cooperation, but more a fund for pilot proj- ects which may be repeated, if successful, in more than one agency or region of the world. FOA has been compiling a roster of voluntary agencies which have expressed an interest or are qualified to participate in the technical cooperation programs. FOA has issued certificates recognizing es- pecially those agencies which in their operations have shown an un- usual interest and spirit of cooperation. I think I might tell you who the members of our committee are. These are noncompensated. Mr. William L. Batt; Mr. Lessing Rosen- wald; Miss Margaret Hickey; Mr. George Schuster; Mr. Edgar Rhoads of the Friends Service Committee; Mr. Elmer Torn of Texas; 188 TECHNICAL ASSISTANCE PROGRAMS : Prof. William I. Meyers of Cornell, dean of the Agricultural School. I am the chairman. Senator MANSFIELD. Thank you, Mr. Taft. We will incorporate, if you desire, the appendixes to your statement this morning. Mr. TAFT. In any way that you wish to do it, sir. We thought you should have it simply for the advice of your committee. Senator MANSFIELD. Senator Capehart? Senator CAPEHART. Do you have any questions? If you do, will you go ahead for just a minute. I will be ready to go ahead in a minute. Senator MANSFIELD. Yes, sir. Mr. Taft, can you make any estimate of the dollar value of the programs of these voluntary agencies? Mr. TAFT. I could give you, perhaps, the contractual amount, but I am not sure how much they put in of their own funds. I am sure they do that, too. Would you like to have us bring that study up-to-date? That might take a little more time. I do not know what your time schedule is on this. Senator MANSFIELD. Well, how much up-to-date is it now? Mr. TAFT. A year ago. Senator MANSFIELD. Yes; if you could bring it up to date we would appreciate it, and it would help us in our consideration; and if it took a matter of a couple of months, it would be all right. Mr. TAFT. I think we can do it faster than that, but I did not know what your time schedule was. BASIC CONCEPT OF PROGRAM Senator MANSFIELD. Mr. Taft, I was pleased to note the remarkable similarity between your testimony this morning and the testimony of Dr. Van Kirk, and Father McGuire, who appeared before this com- mittee last week. I am glad to see such unanimity of feeling in respect to this pro- gram, because it indicates what many of us think is the basic concept on which it is founded. That is, the idea, the point IV program has helped these people to help themselves, and to do it on a cooperative basis; not to impose our ideals on them but to help them raise their standards so they can live longer, live a little better, achieve a little more in the way of security, and thereby become better friends; and, looking at it practically, perhaps become better customers of this country, as well. Mr. TAFT. Senator, I think this reflects a change in the missionary movement itself, which started with the idea that they are all heathen, and all you have to do is put clothes on them and make Americans of them. That certainly is completely out of date. I think all the missionary movements now have a real appreciation of the native culture and background, and attempt to make use of what they feel is the real value in it, and that obviously implies a cooperative approach rather than one which is imposed on any country to which they go. Senator MANSFIELD. Yes. Well, this is, in your opinion, more of a people-to-people program? Mr. TAFT. It is; and many of these missionary movements have-in TECHNICAL ASSISTANCE PROGRAMS 189 fact I think nearly all of them have sought to develop native leader- ship so that when you come to the distribution or local operation you will have some, and in many cases a majority, of native leaders who are doing it even though it may be under the auspices of an American agency. ENCOURAGING WORK OF VOLUNTARY AGENCIES Senator MANSFIELD. Mr. Taft, is there anything, in your opinion, that the Congress or the Government can do to encourage the fine work being done by the voluntary agencies? Mr. TAFT. Well, I think, if I may make one suggestion, and this is, perhaps, not based on too wide an investigation, the necessity for an annual complete justification of the program is one which forces a rather constant amount of paperwork solely for justification purposes, and takes the time of the Government representatives to a pretty substantial degree, which they might better put into cooperation and stimulation of the private agencies, if they had a little more certainty as to the period over which the program would continue. Senator MANSFIELD. Well, now, don't you think in that respect Mr. TAFT. I'm not sure that can be avoided, sir, when you have got an appropriation every year and new Members of the House, par- ticularly, who have to be educated at least every other year on what it is about; and yet I think I would have to say that that is probably the fact, that the annual justification builds up some amount of paper- work. Senator MANSFIELD. That is true. Of course, one of the reasons why some of us, at least, want to see the point IV program put back in the State Department is to get away from this temporary emergency agency idea. Temporary agencies seem to have an idea that they would like to become permanent, and if we put point IV Mr. TAFT. So I have heard. Senator MANSFIELD. So you have been told-back in the State De- partment, then you get away from that year-by-year possibility, at least to some extent. You have it incorporated in an old line depart- ment because it is a part of our foreign policy, and I think probably the work can be done more effectively. But that is just a comment. I do not want to Mr. TAFT. I do not see that it is too different from the cultural exchange or the cultural promotion operations, and I would favor that myself. Senator MANSFIELD. There is a great deal of similarity between them. Senator Capehart? BASIC PROBLEM OF JOBS FOR PEOPLE Senator CAPEHART. I do not know that I have any questions. I have one observation. Maybe you could offer some suggestions on this observation, and that is that we are dealing in point IV primarily with the backward countries. Certainly there is no need for any point IV in England, France, or West Germany, and those countries, so it is dealing primarily with the backward countries. What they need above everything else, of course, is industry and jobs for their people. They need to increase their trade among them- 59637-55- -13 190 TECHNICAL ASSISTANCE PROGRAMS selves, because you certainly cannot help them very much by just trying to give sufficient employment when all that their people have are little boats or goods manufactured in some other countries which they unload. Now, my big complaint about point IV-maybe it is not a com- plaint, but an observation-is that we go into these countries and we teach them how to run tractors and be electricians and a lot of other things. At the same time we discourage them with their stand- ard of living, but they are completely and 100 percent blocked because there is no tractor to drive, no electricity-nothing to practice what you have taught them. There is no job that they can secure, and you leave them, in my observation, flat. I am thoroughly convinced that we should donate our time, all the private capital that we can, and as much credit as the government can furnish, in line with good fiscal policies, to the private enterprise system of these underdeveloped countries. There should be factories to process and manufacture goods, and transportation to transport it, so that they can give jobs to their people, making things to sell among themselves, and not selling particularly to other countries. I do not know how you are ever going to solve the problem unless you solve it on that basis, because it is not going to do much good to teach these people unless they have something to work with. How are you going to solve the problem of these backward countries, until they can find a job for each one of their people? HOW UNDERDEVELOPED COUNTRY DEVELOPS Mr. TAFT. Well, Senator, I think the question you raised is a very basic one, and I think it is one that has not been clear in the minds of the Congress, and, perhaps, of the American people either. This is the whole problem as to how an underdeveloped country develops. It certainly does not develop by putting a steel mill in. Probably the first thing that it has to do is to develop its agriculture, because you find as soon as you put in health measures, which also come early, you reduce the death rate, and the birth rate continue at the same pace. Senator CAPEHART. And you have more people without jobs. Mr. TAFT. Well, it is not a question of jobs; it is a question of food. There is not enough food; and the principal problem is to develop the agriculture fast enough so that it can feed the increasing numbers of people, so that agricultural methods and agricultural education are the first. Senator CAPEHART. I do not want to stop you, but how are you going to feed them if they do not have a job to pay for the food? Mr. TAFT. The first thing we start them with is health, and the second thing is certainly agriculture. But when you start in to devel- oping agriculture you cannot do it by supplying our type of farm machinery, in general, because that takes gasoline, and they have not the foreign exchange to buy the gasoline. One of the best examples that I know of, and what seems to me to be a sound operation, is that which was put on by the Chinese mass education movement under Jimmy Yen, whom some of you, I am sure, will remember. He is the most extraordinary person in the records of Congress because in the last grants made in China for this kind of development he turned back a couple of million dollars. TECHNICAL ASSISTANCE PROGRAMS 191 The Communists then came in before the full effect of that particu- lar project in south China could be seen, but in the experiments that he started in the northern part of China, south of Peiping, he took there people who had only worked in colleges before, who knew noth- ing about the ordinary farmer, and one of them invented a water wheel that could be run by one man instead of two, and that irrigated twice as much ground in the same period, and it only cost $2. This was within their financial capacity. Not only that, but if you tried to jump from some of their rather primitive agricultural methods to a modern tractor, you find also a very vigorous resistance in habits of the people who are involved, who will not make that jump. They want to stay next to something which is not too unrelated to what their fathers and their grandfathers did. Along with that you need education- Senator CAPEHART. There is nothing particularly wrong with that. As a youngster I remember I worked a couple of mules and a walking plow. Everybody in Indiana was driving mules and plows. Mr. TAFT. What I am saying, Senator, is when this program was discussed in the Congress, some of them, whom I will not mention, talked about $50 billion that would be spent for it. You cannot spend this money that way. This is a matter of know-how and showing people and persuading them to do what they should. One of our delegations that went to Liberia or at least to west Africa during the war, found that the major problem was drought. There were certain areas that were swampy and jungle, and they could not get the native to go in because of the fears, and religious fears, in some cases of spirits, and dangers, and so on. The Negro member of that mission was the one who finally per- suaded one of the tribes to make the experiment of clearing the jungle, and to put in their agricultural planting in what had been the swampy areas, where they never did have a drought, and where they could provide enough food to keep the people going who were working on the palm oil and other kinds of products that we had to have during the war. This is the kind of thing where you have to start. DEVELOPING LOCAL CAPITAL Now when you move beyond that, you have to develop also sources of local capital, because they are usually there, but the conditions that keep foreign capital out also keep local capital from going into it. The whole process has been described rather fully in a book that the Twentieth Century Fund has just put out on this problem by Norman Buchanan of the University of California, and Howard Ellis. In fact, I think the fund will probably be glad to send you a copy of it, which analyzes this problem of how you get to the point of where you provide industrial jobs. It is a slow process. It can be speeded up, but you certainly have to start with agriculture and health, and the local community opera- tions, and education. You would not have an industry until you have sufficient education so that you can train supervisors and foremen, and the kind of people that we take for granted, they have not got. Senator CAPEHART. Well, one can agree with that, of course. It is just a question of which comes first, the egg or the hen. Mr. TAFT. I do not think so. This starts with agriculture. * 192 TECHNICAL ASSISTANCE PROGRAMS Senator CAPEHART. It is certainly no good to educate a man if there is no place to start using his education. Mr. TAFT. That is right, but you have to start with agriculture. Senator CAPEHART. The chances are if you do that you make sort of a revolutionist out of him because you educate him and there is no place for him to use it. Mr. TAFT. Well, you may start with agriculture, but you also have to start with some local credit. One of the very bad things in India was that you had the village money lender taking 300 percent interest and keeping these people down forever. When they got in some cooperative banks, or some other methods of financing, we got these people gradually out of debt, so there was some hope for them to build up their own standard. Senator CAPEHART. I am not talking in critical terms. I am trying to find a better way of doing this sort of thing, and I have studied the problem pretty carefully, particularly the Latin American coun- tries. I have come to a very definite conclusion that we ought to be lending them more money on longer terms, from both private enter- prise in America and our own Government, our own Export-Import Bank, to create more jobs for the people down there, and to help them to create more industry, more trade among themselves. I do not see any other way of solving the problem. Now, it is some- thing that will have to be brought along very carefully for a number of years. There are many of them that are now ready to trade and to start offering jobs. I am not saying we ought not to have this. Mr. TAFT. Senator, all I can say is this, if you try to start with an industrial plant, you are certainly getting the cart before the horse. You have to start with agriculture, with transportation, with the development of their own natural resources that are available, out- side. Senator CAPEHART. We ought to go in there and see how many jobs we can create and how we can stimulate business within that country with manufacturing, processing, growing, things where they can give jobs to their own people. Now, that is growing food, that is processing food, that is building highways, building some plants, even though they are very obsolete or small. USING OBSOLETE MACHINE TOOLS For example, one of the things I think we ought to do is to take the obsolete machine tools that the military own in this country and sell them on very, very long terms to these countries. We used these so-called obsolete machines ourselves 25, 30, 40 years ago-if they were good enough for us 40 years ago, they can serve the same purpose in underdeveloped countries. They will build them up to the point where they can get better machine tools. Mr. TAFT. Well, a lot of machine tools are made in Cincinnati, Sen- ator, and I think you had better come in and have them tell you what they think about that. Senator CAPEHART. I think what I am discussing has something to do with this technical program, because unless the end result of this is an increase in their standard of living-and you cannot increase a TECHNICAL ASSISTANCE PROGRAMS 193 man's standard of living until you get him a job at good wages—then we are just whistling in the dark. This whole business must be built around those people eventually having their own industries, in order to trade among themselves. In the United States 95 percent of our business is selling to each other, services and goods, which is something you do not have in these back- ward countries. Mr. TAFT. It was not when we in America started in the first 50 years, or for a long time after. Senator CAPEHART. Of course it was not, Mr. Taft. Mr. TAFT. This is their first 50 years. Senator CAPEHART. I know who financed us, England. Mr. TAFT. We financed ourselves. Senator CAPEHART. We were sent money over here for the primary industry. Mr. TAFT. Oh, no. A steel mill was put in Turkey a good while ago, which has been a white elephant. Senator CAPEHART. I am not talking about steel mills at all. PREREQUISITES FOR INDUSTRIALIZATION Mr. TAFT. I know, but people will think you are talking about steel mills. Brazil is the one which is now insisting on having steel mills. They have got one in, and are trying to get the financing for a second one. Turkey is one of the best examples of an undeveloped country that has grown up, but it was not helped by having a steel mill whose cost of production is so high that it cannot even compete over a very high tariff, with steel going into Turkey. So that all I am trying to emphasize here is the question of the order, the kind of projects that are involved here, which these private agencies are working as to the ones that come first, and a further evi- dence of that is the type of project which the international bank has promoted. It has promoted transportation; it has promoted public utilities; it has promoted the freeing of certain agricultural areas in India, for instance, where they had some very bad, impossible grass problems that had to be taken out, and it cost quite a bit to do it, in order to bring more land into production. I think myself that the international bank operation has been the soundest of any of the projects for the development of underdeveloped countries. But these fit in right with it, and they come first, in gen- eral, before even that one. Senator CAPEHART. Well, that may be true. I am thinking in terms of your organization and your support in going further with this matter. Mr. TAFT. They are not our organization, sir. Senator CAPEHART. And creating- Mr. TAFT. I am chairman of a government committee which tries to cooperate with them, but I assure you they are very private, and if they heard anybody call them my organization, as chairman of this committee, they would blow off like a Roman candle, because they are very strong for their own independence. 194 TECHNICAL ASSISTANCE PROGRAMS Senator CAPEHART. Well, I apologize for that, for the poor choice of words. Mr. TAFT. That is all right. Senator CAPEHART. How shall I refer to them, then? Mr. TAFT. Well, they are the private agencies, and we are the liaison group that keeps them going in their relations to Government. Senator CAPEHART. You are the chairman of it? Mr. TAFT. I am the chairman of the Government committee which cooperates with them. Senator CAPEHART. Then I would like to solicit your cooperation as chairman of the group in this thought that I have, and I am sincere and conscientious about it, that we must concentrate more on creating jobs, industry, and trade within these backward countries-trade among themselves. Otherwise, I do not think we are going to get the job done, because my observation is that the things they need above everything else are trade, jobs and activity to stimulate business among themselves, and that requires more transportation and more power, and more of the things that go to make up business and trade. Mr. TAFT. Well, Senator, if you want to know how our agencies- Senator CAPEHART. I think we must do it and give them money on longer terms, and I think we are going to have to do it with the Ex- port-Import Bank. We are going to have to change many of our laws in this country to permit the insurance companies and banks to loan money which, as you know, the law prohibits us from doing. Mr. TAFT. I would be against their loaning them to the Government. Senator CAPEHART. I was against that, and I always have been. EFFECTIVE USE OF LOANS Mr. TAFT. The problem, then, is whether you have anybody who can receive the loan and use it effectively there. But from the standpoint of the agencies for whom I am speaking, in a sense, today, I would suggest that you look at our exhibit B [see p. 203] to show you what kind of jobs they are working on, and they are working on the type that I have described, rather than that which sets up any sort of major industry. Senator CAPEHART. What page is that? Mr. TAFT. It is this, headed "Foreign Operations Administration." It is this one, Status Report. If you just look at any of these: The first one is agriculture, health, education, and community develop- ment-those are the four I mentioned. You take the next one, and you have got more or less the same kind of thing. If you look on the second page, you will see Young Lebanese Ap- prentice School; equipment for printing, auto mechanics, electricity, forging; and then curriculum improvement, additional equipment, assistance for teachers; instructional equipment; general shop, home economics and crafts; woodworking, improvement of shoemaking, home economics and artificial-flower making. These are the kind of products I assume which they can exchange with each other, but they are not the type that you are thinking of. Senator CAPEHART. Yes, they are. I am thinking in terms of any sort of activity that creates jobs. TECHNICAL ASSISTANCE PROGRAMS 195 1 Mr. TAFT. That is what they are involved with in here, but it is a very small village-type thing, for they cannot get into the other larger type, because it would have to be financed from abroad. Senator CAPEHART. I do not think they should. Mr. TAFT. It is beyond their scope. Senator CAPEHART. They might want to get into it. It might be practical. The chances are that any big industry would not- SCOPE OF PRIVATE AGENCIES Mr. TAFT. Mr. Chairman, I would like to have the record clear on one other factor which is involved here. These private agencies are not worldwide, and ubiquitous. They have gone into certain countries for various reasons in past history, and if we wanted to get them to do something through all the underdeveloped countries, we could not do it because they are not there. All that we can do is to cooperate with the people that are in the countries where they happen to be. So that is not a universal program in quite the sense that the point IV program itself would seek to be. They have operations in certain areas, and where they are, there they will cooperate, but we cannot do a universal job every place. I thought that should be clear because the conversation might imply that they were working in all the countries and in every area. They are not. Senator MANSFIELD. Any more questions, Senator? Senator CAPEHART. I do not believe so. I just wanted to solicit the help of your organization- Mr. TAFT. We will be glad to Senator CAPEHART (continuing). On this idea of "we," as the Government, and our private enterprise in this country, concentrating on doing things that will help them to create jobs and business, and to increase the trade among themselves. Mr. TAFT. Senator, I would like to make one suggestion. Senator CAPEHART. That includes both farming and the whole business. OPERATION OF COMMERCIAL COUNSELOR Mr. TAFT. That has impressed me for some time, and especially during the last year and a half, it has come back to me again, and that is it seems to me the operation of the commercial counselor in the Department of State in the foreign embassies and legations, should certainly include this kind of interest. Now, my impression is, right or wrong Senator CAPEHART. Don't they do it? Mr. TAFT (continuing). That he has been pulled off the promo- tion of exports or imports or foreign investment-I may be wrong, but that is the impression that I definitely get- -and I think that they should have in mind all three kinds of operation, our exports, imports that might be desirable in the United States, and foreign investment that would be for the good of the country where they are stationed. But that simply is a suggestion that the committee would have to explore. Senator CAPEHART. When you say that, do you mean the Depart- ment of Commerce? 196 TECHNICAL ASSISTANCE PROGRAMS 1 Mr. TAFT. No, I say the commercial counselor who is the suggested appointee from the Department of Commerce, but who is in the Foreign Service. Senator CAPEHART. Has been pulled off in these respective countries? Mr. TAFT. I think they do not quite feel they should do it. Maybe I am wrong, but that is the report I have on a somewhat spotty basis. Senator MANSFIELD. Well, Mr. Taft, this committee will make in- quiries and find out just what the information is. Mr. TAFT. Because I think in the points the Senator is interested in, I think that is the place where the push should be. I think in our agencies we should promote the idea in the way the current operations may make possible. I think we are out of the scope of it except in these village type industries which do promote exchange between the villages. Senator CAPEHART. Yes, I understand that. What I was trying to do there, and maybe I used a poor choice of words, I was trying to solicit the cooperation of your group in helping to enlighten our pri- vate enterprise people, as well as the Government, on the necessity for creating and doing the things that will create employment and en- courage trade among their people. Frankly, I think we are falling down on the job. It may well be for one of the reasons you just suggested, that the commercial attachés down there are not properly approaching the subject, and maybe it is due to the Department of Commerce here, I do not know. Mr. TAFT. I would not say it is the Department of Commerce, no. It has been a general policy, I would say. Senator CAPEHART. I do not claim to be an expert, but I just hap- pen to observe that in the United States in a mining town or a one- industry town if that industry goes broke or moves away, that town becomes a ghost town. The people become very poor and there is no business. The merchants have no business, and the town dries up. Why does it dry up? It dries up for lack of jobs. Now, there are just no jobs in these countries. There is not enough trade among themselves. I don't think they can ever give enough jobs to all their people by making goods to sell in the United States or some other place, and I do not think you can ever give all their people jobs by unloading from boats goods that we or some other country makes. I would like to be a party to helping solve that problem which, I think, is so fundamental. You are doing a wonderful thing, it is splendid and should be car- ried out, because your work is primarily education and training. PROMOTING INDIGENOUS INDUSTRY Mr. TAFT. I suppose that you have read the account, and I cannot remember where I saw it myself, of the corporation set up by the Rockefeller brothers to promote this kind of indigenous industry, so to speak. Senator CAPEHART. And they have done a good job in certain spots. Mr. TAFT. But they found some of their own ideas that they started with did not quite work, and some of the ones that did work, they were rather surprised about. TECHNICAL ASSISTANCE PROGRAMS 197 One of them was putting on, if you remember, in Brazil, a milk route where they sold chocolate milk and other dairy products which proved extremely successful; and the second most successful one, per- haps the first now, was the setting up of, you know, Kroger- Senator CAPEHART. The type of stores, the serve-yourself grocery stores? Mr. TAFT. Serve-yourself grocery store. Senator CAPEHART. You say that works? Mr. TAFT. It is going like a house afire. Senator CAPEHART. At Caracas? Mr. TAFT. They tried it in Brazil, too. Now, that gets you into some difficulties, because the smaller mer- chants do not like that any more than they do some times here, but nevertheless, they demonstrated the necessity of developing the ideas of initiative and energy and ingenuity, which are ideas, which are not just money. These are ideas, and they are not easy to put over, or to give to people that are not used to it, so that again you get into the question of education and ideas, rather than just money alone. They come first. Senator CAPEHART. What they need in order to create these jobs or these industries, little ones or big ones, are certain machine tools and equipment that they do not produce in their own country, and they must get them into some other country. Mr. TAFT. Senator, I am not saying anything specific this morning, but you had better talk to the machine-tool people about that one. Senator MANSFIELD. We will make that a project for Senator Cape- hart. Senator CAPEHART. I am interested in that. Why do you say talk to the machine-tool men? Mr. TAFT. Well, the surplus of machine tools is not very much dif- ferent from the surplus of agricultural products. If it upsets normal channels of foreign trade, you are going to find yourself in trouble both with our producers and with the buyers on the other side, or other sellers or the general economic status of the country involved. Senator CAPEHART. Well, your point is that if you sell them obso- lete machines they will not buy new ones; that is the point you are making? Mr. TAFT. I think that is what my friends in Cincinnati would say. Senator CAPEHART. Well, I presume that is true. We are constantly up against these pressure groups. Mr. TAFT. This is not a pressure group. Senator CAPEHART. And the people who are in business. Mr. TAFT. This is not a question of pressure. This is a question of normal channels which you bypassed if you have a government to give them to somebody or put them in on some special basis. Senator CAPEHART. I would never give them anything. I would sell it to them at a price on long terms. Mr. TAFT. Even if you sell them, the question is whether you are upsetting the normal channels or whether there is some way in which you can stimulate the normal channels to do a better job, you see; that is the line of distinction. Senator CAPEHART. Those things are all problems; they are not easy, are they? Mr. TAFT. No sir. 198 TECHNICAL ASSISTANCE PROGRAMS (The exhibits submitted by Mr. Taft are as follows:) EXHIBIT A FOREIGN OPERATIONS ADMINISTRATION MANUAL Subject: Policy and Organization for FOA Relationships With United States Voluntary Agencies on Technical Cooperation Programs. Order No. 261.1 Trans. letter No.: General-84 Effective date: Aug. 16, 1954 Supersedes: TCA Policy Statement, "Relationships With Private, Non-Profit Agencies," May 1, 1953 I. DEFINITIONS The United States agencies which are referred to herein are those private non- profit organizations, including the larger foundations, supported primarily by voluntary contribution, which are conducting rehabilitation and technical assistance work abroad or are interested in conducting programs of international economic and social development. Excluded from this order are United States colleges and universities and commercial organizations, and most professional groups unless they fall within the scope of the foregoing definition. II. BACKGROUND A. The voluntary agency-as an institutional expression of individuals acting through associations of their free choice-exemplifies one of the best traditions of western civilization. Efforts of these agencies abroad are also an expression of good will by means of their aided self-help activities on a people-to-people basis, which though distinct from official United States Government programs, can and do complement and reinforce them. B. Many United States voluntary agencies have successfully carried on foreign technical assistance work for over a century. Lasting contributions of special interest and potential value to the United States bilateral technical cooperation program include the following: (1) educational programs through primary and secondary schools, vocational schools, colleges and universities, and (2) village and urban development projects which raise living standards through commu- nity organization and improved agriculture, health and sanitation techniques, and other self-help projects. During the years, voluntary agencies have estab- lished strong roots and gained the confidence of the local peoples. C. Cooperative relationships between FOA and nonprofit private organizations conducting technical assistance work overseas have enabled both to benefit from the experience of the other. III. POLICY It is the policy of FOA to increase the participation of voluntary agencies in carrying out United States technical cooperation programs to the extent prac- ticable for FOA and desired by these agencies. FOA will accomplish this objec- tive by strengthening its informal cooperative relationships with them and by making more extensive use of contractual arrangements between them and FOA. This policy is based on the following considerations: A. The congressional directive that, "the participation of private agencies and persons shall be sought to the greatest extent practicable. B. It is recognized that many voluntary agencies have made significant con- tributions to the field of social and economic development in many countries of the world and that FOA has much to gain from the experience of these agencies. C. An increasing number of these agencies have expressed interest in cooper- ating with FOA in this field. IV. RELATIONSHIPS FOA relationships with voluntary agencies may take the form of an increased use of their resources under contractual arrangements, or perhaps more im- portantly at this time, a closer working relationship without entering into a formal contractual relation in the development and carrying out of related proj- ects. It is not anticipated that voluntary agencies would undertake, either through contract or cooperative arrangements with FOA, activities which would be coterminous with the total FOA-host government program in a functional field nor in most instances with a category of activity within a functional field. TECHNICAL ASSISTANCE PROGRAMS 199 Rather it is FOA policy to utilize voluntary agencies to an increasing extent in the implementation of those projects or segments of projects for which their objectives, experience, resources, and status as private organizations particu- larly well qualify them. A. Cooperative relationships There are many ways to collaborate and coordinate the programs of FOA and voluntary agencies other than through formal contractual arrangements. 1. USOM's can assist in the development of such noncontractual relation- ships by: (a) Acquainting themselves with the programs of private nonprofit agen- cies United States, third country, and indigenous-within the country. (b) Arranging for regular consultations with the voluntary agencies working in the country for the purpose of exchanging information on pro- gram activities, methods, and techniques. (c) Drawing upon the experience of the voluntary agencies in working with local peoples with respect to their customs, traditions, and aspirations. (d) Encouraging active participation of voluntary agencies in projects of mutual interest. There are many instances in which FOA host government projects can be actively participated in by voluntary agencies on a joint basis. Similarly there are numerous cases in which existing or proposed voluntary agency projects lend themselves to expansion by the active partici- pation of FOA and increased attention by the host country government. In the development of such projects the contributions of the three parties can be determined on the basis of available resources and can include FOA financial participation as in any cooperating country-FOA undertaking. USOM's should follow existing procedures in developing, clearing, and im- plementing these projects. (e) In addition to formal project participation with voluntary agencies, making FOA technical specialists available to visit and assist voluntary agency personnel at their own establishments, such as health centers, voca- tional schools, and the like and encouraging voluntary agency personnel to assist FOA technicians. In instances where supplies and equipment for dem- onstration purposes will assist a voluntary agency's activity or project of interest to FOA and the host country, USOM's can share FOA-owned equip- ment in cooperation with the voluntary agency. In this way the voluntary agencies can serve as multipliers of the technical knowledge provided through FOA. (ƒ) In a review of country needs and in programing, giving considera- tion to the contribution that voluntary agencies can make either independ- ently, or with the help of other voluntary agencies in the United States. In every country, there are many good project opportunities or potential proj- ects which, for one reason or another cannot be financed from FOA funds but which a United States voluntary agency may be willing to support. In addition there may be projects requested by the host government which, due to limitations of funds allocated to the country, are not included in the coun- try's program. In all such cases these project opportunities should be called to the attention of private agencies for their consideration. (g) Making known to FOA/W, as well as to voluntary agencies within a country, project opportunities for dissemination to United States voluntary agency headquarters for their consideration as sole sponsor. Information thus transmitted will not necessarily imply endorsement by FOA of any projects which an agency may develop as a result. 2. FOA/W regional and technical services offices need also to keep informed about the voluntary agencies conducting programs in their regional or func- tional areas in order to carefully appraise their operations and to determine whether FOA projects can be strengthened through the utilization of voluntary agencies. B. Contractual relationships There are ongoing and potential FOA-host country projects which can be effectively carried out by United States voluntary agencies under contract. For example, personnel of voluntary agencies have in numerous countries been working for years to improve the living conditions of the people living in villages remote from the capital cities. Partly as a consequence of increased collaboration with voluntary agencies on a noncontractual basis, contractual relationships are likely to increase. It 200 TECHNICAL ASSISTANCE PROGRAMS is FOA policy to utilize voluntary agencies as contractors to an increasing extent where this is of direct benefit to the United States technical cooperation program. 1. FOA contracts with private nonprofit agencies are subject to regular FOA contracting regulations and procedures. Contracts which provide for financing personal services are subject also to FOA security and orientation requirements. 2. In addition the following criteria must be satisfied: (a) FOA and the host government have determined that the use of a voluntary agency offers an appropriate means to implement an agreed project. (b) The proposed contracting agency is acceptable to the host government and FOA. (c) The agency proposed has demonstrated the necessary competence and experience to perform the required services. (d) No preferential treatment will be given to one voluntary agency or group of agencies. (e) Funds appropriated by FOA will not be used to supplant the normal contribution to the activity by the voluntary agency. FOA funds may be used to extend or hasten an outgoing voluntary agency project or to initiate a new undertaking. (f) The activities performed by the contracting agency will be under the general direction of the FOA mission chief. 3. In those cases in which a formal contractual arrangement with a voluntary agency sponsored by or in any way affiliated with a religious organization is determined by the USOM and FOA/W offices to be a desirable means to imple- ment an FOA-host country project, USOM and FOA offices should ascertain with the Department of State that such formal relationship is consistent with United States policy not to influence the religious preferences of the host nation or to favor particular religious groups and that the contract will not adversely affect United States-host country relations in any foreseeable manner. In some countries, for example, there may be particular situations which are fraught with religious controversy of such sensitivity as to preclude formal contractual rela- tionships with religious organizations for work in those countries. While FOA recognizes that the service activities of voluntary agencies con- tribute in a general sense to their missionary objectives, a distinction has been made between these service activities and direct proselytizing undertakings. If a voluntary agency, to be engaged under contract, is sponsored by or in anyway affiliated with a religious organization, such agency shall agree not to use the contract to further any proselytizing undertakings. The contract shall provide that the agency shall not assign to duty under the contract any personnel who will engage in direct religious proselytizing activities or internal political activity or against whom the host government interposes an objection because of such activities. Should FOA determine a voluntary agency's personnel are directly engaged in proselytizing in the performance of a contract, such determination shall be cause for the removal from overseas assignment of such personnel or the cancellation of the contract. V. FUNCTIONAL RESPONSIBILITIES A. The development and strengthening of FOA relationships with voluntary agencies necessarily involves carefully coordinated action by the USOM's and FOA/W. B. FOA/W: 1. The voluntary foreign aid division (VFA) of the Office of Refugees, Migra- tion, and Voluntary Assistance (AD/REF) has been designated the focal point within FOA/W for the implementation of this policy. VFA serves as the central liaison office for assistance to voluntary agencies having an interest in or desir- ing to develop cooperative relationships with the United States technical coop- eration programs and for assistance to other FOA/W offices and USOM's in ob- taining information about voluntary agencies or in developing cooperative or contractual arrangements with them. The Voluntary Foreign Aid Division's functions in this respect are: (a) To formulate policies and objectives for FOA relationships, cooper- ative and contractual, with voluntary agencies on technical cooperation proj- ects for guidance of FOA/W offices and USOM's. (b) To serve as the central FOA liaison with the voluntary agencies and to develop relationships which will enable FOA to know at an early stage the plans of these organizations in order to avoid duplication and foster supplemental activities between them and FOA. TECHNICAL ASSISTANCE PROGRAMS 201 (c) To develop and maintain a central roster of voluntary agencies which will include data on their objectives, resources, and organization; their current programs; and their capacities to undertake projects in cooperation with FOA. An important portion of this information will be obtained by personal consultations which will provide a two-way exchange and may generate new ideas on forms of joint activities. (d) To analyze overall programs, and procedures, methods of adminis- tration of voluntary agencies to evaluate their effectiveness in attaining basic objectives and to advise FOA/W offices and USOM's in the develop- ment of cooperative or contractual relationships with various agencies. (e) In conjunction with DD/O and DD/S offices, to analyze FOA country programs particularly in the fields of health, agriculture, education (includ- ing vocational education), cottage industry, and community development to determine potential areas of cooperation with voluntary agencies; to advise voluntary agencies of ongoing or potential projects which lend themselves to private financing in order that they may support such projects either financially or in kind as appropriate. (ƒ) In consultation with the appropriate DD/O and DD/S offices, to call to the attention of USOM's voluntary agency activity in their countries and to suggest desirable forms of relationships which might be developed with these agencies. (g) To bring to the attention of regional and technical services offices instances in which benefit may derive from closer relationships with a vol- untary agency to work with the DD/S and DD/O offices having responsibility for the project or program in reaching a decision. (h) To review inquiries from USOM's with regard to voluntary agencies involving both contracts and other forms of relationships; to coordinate with the appropriate DD/O and DD/S offices in replying. (i) To review specific requests from USOM's for the development of contracts or other forms of relationships with voluntary agencies; to partic- ipate with the DD/S offices concerned in the development and negotiation of such contracts or other forms of relationships; and to review and evaluate the implementation of each contract or cooperative arrangement with a voluntary agency. (j) To issue periodic reports on the status of voluntary agency contracts in being and under consideration and on other developments with respect to voluntary agencies. DD/O and DD/S offices will advise the VFA of the agencies with which contracts or cooperative arrangements are in force or contemplated; and any new developments will be reported to VFA hereafter. (k) To arrange from time to time meetings of FOA and voluntary agency representatives to discuss mutual problems and for the exchange of informa- tion regarding technical-cooperation programs. (1) To carry out, as assigned, other duties which are necessary to the orderly and effective development of closer cooperative and contractual relationships with voluntary agencies. In performing the above functions, the Voluntary Foreign Aid Division shall, at all times, secure the full participation and concurrence of the regu- lar organization units listed in V-B-2 below on all aspects affecting the normal functions of such units. Other offices will similarly keep each other and the Voluntary Foreign Aid Division fully informed of any actions they propose regarding voluntary agencies and clear with the VFA prior to taking 2. Other FOA/W offices involved and their primary areas of concern are: action. (a) The country desk and the regional program units covering the country involved. These offices will be concerned with the suitability of the proposed cooperative or contractual relationship in terms of the overall country pro- gram and the availability of funds. (b) The technical services offices which cover the functional fields in- volved. These will be concerned with the scope, soundness, and suitability of the technical content of the activities to be undertaken, and the develop- ment, negotiation, and implementation of cooperative arrangements or con- tracts covering their respective fields. (c) The General Counsel. (d) The Controller. (e) The FOA contract officer (if a contract is involved). 202 TECHNICAL ASSISTANCE PROGRAMS 1 The following offices are concerned with the clearance and general orien- tation of contract personnel : (f) The Office of Personnel. (g) The Office of Personnel Security and Integrity. C. USOM's will exercise the same responsibilities in connection with FOA financed contracts with voluntary agencies as in other FOA contracts. In addi- tion, USOM's should stimulate the development of noncontractual relationships with voluntary agencies by carrying out the functions set forth in section IV-A. VI. PROCEDURES A. Proposals originating in USOM's In the development of cooperative or contractual arrangements between volun- tary agencies and FOA, the following general procedures will be utilized to as- sure that any resulting proposals are given expeditious treatment; that cogni- zance is taken of voluntary agency activities in relation to FOA technical co- operation programs; that any agreements or contracts which may result are properly drawn and effectively implemented; and that agreements or contracts with voluntary agencies are coordinated with the FOA programs. 1. Cooperative and Contractual Relationships.—(a) Inquiries or proposals regarding cooperative or contractual relationships with a voluntary agency to implement a technical cooperation project will be transmitted to FOA/W by the mission. (b) The inquiry or proposal will be reviewed and evaluated by the country desk and transmitted to the action office as defined herein. Where the inquiry or proposal relates to a specific functional field or several functional fields, ac- tion will be taken by the DD/S offices concerned in coordination with VFA. Where the inquiry or proposal is general, i. e., nonfunctional in character, the Voluntary Foreign Aid Division will take action in consultation with the DD/O and DD/S offices concerned. All outgoing communications on relationships with voluntary agencies will be cleared by the DD/O and DD/S offices concerned, the Voluntary Foreign Aid Division, and where appropriate, with the General Coun- sel, the Controller, and the FOA contract officer. (c) VFA and the DD/S offices concerned will consult (1) to determine the feasibility of the cooperative or contractual relationship proposed and (2) if the USOM requests FOA/W to suggest a voluntary agency, to review the avail- ability of voluntary agencies qualified to perform the activity proposed. (d) The action office will transmit to the USOM FOA/W's comments and sug- gestions regarding the proposed undertaking, together with a list of qualified voluntary agencies where appropriate. (e) USOM's will follow their normal procedures in handling noncontractual mutual projects with voluntary agencies. 2. Contractual arrangements.—(a) On receipt of FOA/W comments referred to in 1-d above, USOM's will confer with representatives of the host govern- ment to select the voluntary agency with which they desire to enter into con- tractual negotiations, indicating alternative choices. (b) The action office will contact the United States voluntary agency selected; draw up and clear a contract through the normal FOA/W clearance procedure and with the USOM and the voluntary agency. (c) The contract will be signed by the parties involved and will go into effect. The action office as defined above will be responsible within FOA/W for fol- lowing the contract during its life; receiving, reviewing, and routing reports under it; hearing and adjusting problems encountered by the United States voluntary agency or other parties involved; and arranging any necessary amend- ments, extensions, or terminations. B. Proposals originating with voluntary agencies 1. FOA offices receiving a written or oral inquiry or expression of interest from a voluntary agency with regard to a cooperative or contractual arrange- ment should consult with VFA in determining the action to be taken. 2. The action office as defined in VI-A-1 will prepare a reply to the inquiry, clearing it with appropriate offices of FOA/W. 3. The procedure outlined in VI-A-1 should then be followed from step (b) forward. C. Proposals originating in FOA/W 1. In the review of program or project requests from the field, DD/O and DD/S offices should determine (a) whether the project could be undertaken TECHNICAL ASSISTANCE PROGRAMS 203 equally or better by a voluntary agency under contract; and (b) whether the project could be supplemented to advantage from the point of view of area covered, experiment in alternative methods, or for any other reason by some noncontrac- tual arrangement with a voluntary agency or agencies. The procedure outlined in VI-A-1 should then be followed from step (b) forward. 2. In instances in which VFA initiates consideration of a new relationship with a voluntary agency, the procedure outlined in VI-A-1 should also be followed from step (b) forward. EXHIBIT B FOREIGN OPERATIONS ADMINISTRATION OFFICE FOR REFUGEES, MIGRATION, AND VOLUNTARY ASSISTANCE, VOLUNTARY FOREIGN AID DIVISION, JANUARY 1955 STATUS REPORT Voluntary agency participation in technical cooperation programs-Contract- ual and cooperative relationships in force, completed and under consideration: A. In force: Near East I. CONTRACTUAL RELATIONSHIPS 1. Iran-Near East Foundation.-Varamin Plains rural improvement project including training in agriculture, health, education, and community develop- ment. Dollar amount: Original contract $615,000 to expire October 31, 1954; amended for a 3-month extension with additional funds of $125,000. 2. Iran-Near East Foundation.-Countrywide community development pro- ject. A total of 31 specialists: 10, community development; 10 rural credit; 10 engineering, or one of each for each ostan, and one rural credit supervisor. Also an Iranian administrator of the increase in the tenants share and sponsor- ship of the village councils act. Dollar amount: Approximately $556,000; expiration date of contract, June 30, 1956. 3. Iraq-International Voluntary Services, Inc.-Shaqlawah (Erbil) village improvement project. Program includes agricultural education and demonstra- tion, home and child care, health and sanitation, and basic education at the village level. Dollar amount: Original contract initiated June 30, 1953, with $140,000; amended May 6, 1954, with additional funds of $100,000. 4. Lebanon Joint Project.-USOM-Lebanon Ministry of Social Affairs for Technical Assistance to eight Lebanese private institutions. (a) Young Lebanese Apprentice School: Continuation and phasing out- equipment for printing, auto mechanics, electricity, forging, and like activities, $25,000. (b) Young Women's Christian Association: Project completion and phasing out-curriculum improvement, additional equipment, assistance for teachers, $30,000. (c) Young Women's Moslem Association: Instructional equipment and minor percentage of building costs, $30,000. (d) Druze Orphanage : General shop, home economics, and crafts equipment, $10,000. (e) Moslem Orphanage of Beirut: Printing equipment, woodworking, im- provement of shoemaking, home economics, and artificial flower making, $10,000. (f) Moslem Orphanage of Tripoli: Woodworking, woodcarving, printing, and binding, $15,000. (g) Saint Antione Orphanage of Tripoli: Home economics, first aid and train- ing of village, family living, $10,000. (h) Amelite Society of Beirut: Home economics equipment, health, visual aids, library, and instruction, $10,000. Overall contract total, $140,000. Contract initiated June 14, 1954; expiration date of contract June 14, 1955. South Asia 1. India—American Friends Service Committee.-Rural demonstration and local worker training project near Madhaya Pradesh and Orissa. Includes agri- culture, health and sanitation, home economics, and rural community activities. Dollar amount: Approx. $375,000. Contract initiated June 1951; expiration date June 30, 1956. 1 204 TECHNICAL ASSISTANCE PROGRAMS Latin America 1. Bolivia-International Development Services, Inc.-Implementation of Agri- cultural Credit, a countrywide project. Dollar amount: Approx. $262,000. Contract initiated June 30, 1954; expira- tion date June 30, 1956. B. Completed: Near East 1. Jordan-Near East Foundation.-Project for countrywide survey of approx- imately 150 representative villages to determine needs for community develop- ment at the village level. Dollar amount: Approx. $21,000. Contract initiated October 11, 1954. Con- tract completed December 31, 1954. USOM advised in communication to FOA/W dated December 27, 1954, that completion report is being prepared. Latin America 1. Peru-International Development Services, Inc.-Project for agricultural and economic survey, Mantaro region of Peru, to determine problems and feasi- bility of an area development project. Dollar amount: Approx. $27,034. Contract initiated June 9, 1954; contract completed November 15, 1954. Completion report submitted by IDS to FOA/W. C. Under Consideration: Africa 1. British East Africa-National Catholic Rural Life Conference.—Village de- velopment project proposed: To include health and agriculture programs. USFOTO A-166, January 7, 1955, requesting USOM/London to obtain Colonial Office and East African territorial government approval of project proposal. 2. Ethiopia-Young Women's Christian Association (YWCA).-Educational project proposed: Adult education center for young women. FOA/W to com- municate with USOM in January 1955 requesting information regarding further developments. 3. Italian Somaliland—Mennonite Central Committee.—Health and education project: Proposed by MCC at exploratory conference FOA/W January 4, 1955. 4. Liberia-Unitarian Service Committee, Inc.-Community health project: Plans under consideration by FOA/W and USC for sending 1 or 2 consultants to Liberia to make on-site survey of project requirements. Dollar amount: Estimated at approx. $299,000; for a 3-year period. South Asia 1. Afghanistan-Near East Foundation.-Rural development project: To in- clude testing methods and procedures in rural development; multiple village demonstrations in public health and sanitation, agriculture, education and small scale industry, and to train village-level workers. Contract drafted for con- sideration by FOA/W and NEF. Dollar amount considered: Fiscal year 1955 $70,000; total of $300,000 for 3-year period. 2. Pakistan-International Voluntary Services, Inc.-Village development project: Exploratory conference FOA/W IVS, October 27, 1954; IVS representa- tive discussed project proposal with USOM in December 1954; FOA/W-IVS con- ference scheduled January 14, 1955. Far East 1. Cambodia-Unitarian Service Committee, Inc.-Cooperative education pro- ject: Need for project, confirmed by USOM, TOUSFO A-184, November 4, 1954; conference FOA/W-USC November 15, 1954; USFOTO 7, Phnom Penh, November 29, 1954, for USOM concurrence for sending USC representative to field to de- velop project plans and requirements. 2. Thailand-International Voluntary Services, Inc.-Agricultural Demonstra- tion Project: To be conducted on two agricultural experiment stations, as sug- gested in Bangkok TOUSFO A-392, December 11, 1954. FOA/W USFOTO A-435 to USOM requesting further information regarding project proposal. (This project proposal is in lieu of community development project indicated under consideration in December 1954 status report.) 3. Vietnam-International Voluntary Services, Inc.--Village development pro- ject: Exploratory conference FOA/W-IVS, October 27, 1954. IVS representa- tive discussed possibilities with USOM, December 1954, and advised FOA/W that TECHNICAL ASSISTANCE PROGRAMS 205 commitments of IVS will prevent further immediate consideration of project proposal. (This item to be deleted from subsequent status reports.) 4. Vietnam International Rescue Committee, Inc.-Educational and social service projects: Exploratory conferences FOA/W-IRS November 15 and 24, 1954. Referred to USOM/Saigon USFOTO A-219, November 23, 1954. USOM/S TOUSFO A-282, December 20, 1954 referred draft to IRS representative's pro- posal to FOA/W. Project proposals discussed by FOA/W-IRS-USOM/S repre- sentative January 5, 1955. Additional FOA/W-IRS conference scheduled Jan- uary 11, 1955. A. In force: Near East II. COOPERATIVE RELATIONSHIPS 1. Iran-Iran Foundation.-Nurses training program: Two USOM nurses cooperating in the training of local national nurses at the Iran Foundation Hospital, Shiraz. 2. Jordan-American Friends Service Committee.-Village development in agriculture; five villages near Jerash. USOM and Jordan Ministry of Agricul- ture furnish technical advice, supplies, etc. Principal financing by the Ford Foundation. Far East 1. Taiwan (Formosa)—Aid Refugee Chinese Intellectuals, Inc.-Self-help housing projects, countrywide. ARCI finances own program, USOM provides technical advice. 2. Taiwan (Formosa)-National Catholic Welfare Conference.-Self-help housing projects, countrywide. NCWC financing own program. USOM provides technical advice. Latin America 1. Chile-Cooperative for American Remittances Everywhere (CARE). "CARE has been helpful in the Area with the distribution of toolkits for farmers and carpenters. The USOM has helped this private organization in the dis- tribution, and with the planning of other projects." Reference: USOM/Chile TOUSFO A-218, December 9, 1954. 2. Chile The Maryknoll Fathers.-"Informal but helpful interchange of ideas and information with the Maryknoll Fathers located in the Area has broadened the scope of that mission's (agricultural) program and has brought another voluntary agency into cooperation with the point IV mission and the servicio staff." Reference: USOM/Chile TOUSFO A-218, December 9, 1954. 3. Chile-Rockefeller Foundation.-"The Rockefeller Foundation again visited the area in September and has agreed to work in close collaboration with the program in Chillan. It will do (agricultural) experimental work and use the facilities of the experiment station in Chillan." Reference: USOM/Chile TOUSFO A-218, December 9, 1954. 4. Paraguay-Mennonite Central Committee.-A cooperative arrangement fa- cilitating assignment of MCC personnel to the USOM servicio staff (agriculture). B. Under Consideration: Near East 1. Egypt-Mission de L'Afrique Centrale.-Technical assistance for vocational training school in textile weaving at Aswan. South Asia 1. India-Boys' Town of India.-Referred to USOM/India for investigation. No further action as of December 29, 1954. 2. Nepal-United Medical Mission.-Health-technical assistance for hospital facilities. Referred to USOM/Nepal, USFOTO A-43. No reply as of Decem- ber 29, 1954. 3. Nepal-Father Moran's School.-Assistance for educational project. Re- ferred to USOM/Nepal, USFOTO A-43, no reply as of December 29, 1954. Latin America 1. Haiti―Mennonite Central Committee.—A cooperative arrangement proposed by MCC for assignment of MCC personnel to USOM staff. Exploratory confer- ence FOA/W-MCC January 4, 1955. To be referred to USOM for comment. 2. Paraguay-Mennonite Central Committee.-Cooperative Asuncion-Chaco road construction project desired by MCC. Exploratory conferences held by 59637-55-14 206 TECHNICAL ASSISTANCE PROGRAMS FOA/W-MCC. Also discussed at field level by USOM/Paraguay and MCC rep- resentatives according to USFOTO A-326, December 28, 1954. USOM coopera- tion under consideration for engineering assistance and technical supervision of construction. COMMENTS On December 31, 1954, an airgram containing an advance copy of Manual Order 1095.1 regarding the establishment of a special reserve fund in the amount of $1 million from fiscal year 1955 funds to further FOA policy and to stimulate the participation of voluntary agencies in carrying out United States technical cooperation programs-(Re M. O. 261.1) was sent to USOM in the following areas: Far East, USFOTO CIRC FA-60 Near East, USFOTO CIRC NA-45 Latin America, USFOTO CIRC LA–79 CINCR P Seoul, FOATO A-347 CINCUNC Tokyo, FOATO A-347 Istanbul, USFOTO A–20 Senator MANSFIELD. The next witness is Dr. E. G. McGavran, dean of the University of North Carolina School of Public Health. Take the chair, and proceed in your own way. STATEMENT OF DR. E. G. McGAVRAN, DEAN, SCHOOL OF PUBLIC HEALTH, UNIVERSITY OF NORTH CAROLINA Dr. McGAVRAN. I am Edward G. McGavran, dean of the School of Public Health, University of North Carolina. I have had experience in foreign countries with the Rockefeller Foundation in Egypt and India, with the Association of American Medical Colleges in several Central American countries, with the World Health Organization in eight European countries, and with the Foreign Operations Adminis- tration in Peru. I am representing the University of North Carolina in Chapel Hill, N. C., in regard to a contract the university has with the Foreign Op- erations Administration which involves chiefly one department of our school of public health. CONTRACT IN PERU We were informed about 1 year ago that the National School of Engineering of Peru, in Lima, wished to strengthen its teaching pro- gram in respect to sanitary engineering and had requested assistance in so doing from the University of North Carolina through the Foreign Operations Administration. Upon investigation of this request, we were informed that accept- ance of such activities and obligations was to the best interests of the Government of the United States and would assist our Government in the exercise of its policies in regard to international relations, specif- ically by helping Peru to develop further her own educational institu- tions to better train her own health technicians and so to better meet her own needs, and to stabilize and advance her own economy. As dean of the school of public health, I was asked to visit Peru to determine the feasibility and desirability of the university assuming such an obligation. This I did during 3 weeks of April and May 1954. In my brief visit to Peru I observed the problems and needs of sanitary engineering and public health, discussed with the Peruvian schools their administrators and faculty-as to what they considered TECHNICAL ASSISTANCE PROGRAMS 207 to be their needs and how they felt we might be of assistance in meeting these needs. I also explored the feeling and recommendations of Peruvian Gov- ernment officials and our own FOA representation in Peru. Jointly with all the above-mentioned people, we worked out a contractual plan and program which we felt we could recommend to the University of North Carolina and which was acceptable to all parties concerned in Peru. Upon my return to North Carolina, this contract was presented to the university administration and tentatively approved. We were instructed to get FOA approval in Washington before final approval could be considered by the university. This proved to be a long and tedious process, since some of the provisions of the contract did not fit the usual administrative pattern previously entered into by the FOA. I wish to insert in the record here, our appreciation of the courteous, intelligent, painstaking assistance of all our contacts in the FOA offices. The difficulties were largely legal, technical, and fiscal, in- volving conflicting policies of the Federal Government, our own State government, and the university administration. The contract was finally signed September 21, 1954. By a system of rotation we are able to make available to the National School of Engineering of Peru our ablest professors of sanitary chemistry, sani- tary science, and hydraulics-the three major fields of sanitary engi- neering for 4-month intervals and for shorter intervals (1 month usually) professors of epidemiology and parasitology. Our first faculty member went to Peru on December 7. A second faculty mem- ber went to Peru the latter part of January and the first faculty mem- ber returned February 1. Report of progress at this early stage is premature but satisfactory. It is too soon to indicate how well the project is working or has worked. We must remember that the school year starts in April in the Southern Hemisphere; that present personnel and activities are in preparation of manuals, laboratory techniques, translations, obtaining lab equip- ment, arranging curricula, developing local lab instructors, et cetera. In the National School of Engineering we are dealing with an educa- tional system that is European-based almost entirely upon part-time teachers. Senator CAPEHART. Is the National School of Engineering the Peruvian School? Dr. McGAVRAN. The Peruvian school; yes. We are helping them change to the more typical American system of full-time laboratory instruction. We, of course, feel this is a vastly superior system of instruction and they agree, but such a change is a tremendous undertaking. Academic institutions do not make even the most desirable changes easily or rapidly, and Peruvian univer- sities were established 100 years before any in the North American Continent. In the past 9 years we have had 10 Peruvian engineers taking gradu- ate work in our school who are now in key positions in sanitary engi- neering throughout Peru. They need several hundred sanitary engi- neers to meet the health problems of their growing population and economy. These engineers, we believe, can be most economically and 208 TECHNICAL ASSISTANCE PROGRAMS efficiently trained in their own National School of Engineering. Sani- tation needs are among the chief health needs of their country. We will be in a better position to make suggestions for improvement a year from now. UNIVERSITY ROLE IN TECHNICAL ASSISTANCE PROGRAM In respect to the concept of the role of universities in extending technical assistance to foreign countries, I can speak only for myself and my faculty. We are convinced that the concept is sound. The best way to help countries to help themselves is to strengthen their own educational institutions. Peru needs several hundred sanitary engineers. It would be prohibitively expensive for us to train in this country even half the number they need. The work they must do in sanitation does not require foreign training; in fact, it might be a hindrance to the performance of their work. The supplying of a set number, say 200 sanitary engineers, is not desirable. A constant flow and ever-increasing flow of graduates in sanitary engineering is what they need. The National School of Engineering, of Peru, is capable of meeting this need with the assistance of the University of North Carolina over a relatively short period of time. We also believe that the political and economic stability of Peru, as in other Latin American countries, is dependent upon developing as rapidly as possible a strong middle class, composed of professional workers along with other groups. This is really a crucial matter in many countries composed as they are of a thin upper crust of society and large masses of underprivileged people. Without a strong middle class the field is ripe for communism. We believe that universities can provide more highly skilled and trained technical assistance than can any other organization because of the very nature of educational institutions in this country. Fur- ther, the university provides a continuity, which is impossible for the individual to provide and which is most desirable in such operations. PROBLEM OF ADEQUATE TECHNICAL PERSONNEL The greatest problem facing FOA is in providing an adequate num- ber of people of the caliber and type needed to render technical as- sistance, and at the same time truly represent the United States. The spirit of adventure, the novelty of foreign service, successful work in this country, or even the most sincere desire to do good are not the indexes or criteria for selection of the kind and type of person needed. Universities can make real contributions and can help temporarily if penny-pinching policies are avoided, but neither are they the ultimate answer. In my humble opinion, if we are to hold or maintain the role of world leadership which has been thrust upon us, we must select, prepare, and train foreign servants at whatever cost, who at home and abroad can truly represent the United States, as well as offer and supervise technical assistance. This is no criticism of past performances or of people presently em- ployed by FOA. We have been extremely lucky, but that luck is run- ning out. The urgency, in my opinion, is great for producing the same kind of technical, trained, and selected foreign-service staff for FOA as the State Department has found necessary in its operations, TECHNICAL ASSISTANCE PROGRAMS 209 and which has characterized the successful operation of the British Foreign Service and some of our own international foundation services. Senator MANSFIELD. Thank you, Dr. McGavran. Senator Capehart? Senator CAPEHART. Beginning at the bottom of page 4 and continu- ing on to page 5 of your statement you say: This is really a crucial matter in many countries composed as they are of a thin upper crust of society and large masses of underprivileged people. Without a strong middle class the field is ripe for communism. That gets back to the discussion I had with Mr. Taft. Dr. MCGAVRAN. Exactly. Senator CAPEHART. I suppose I am going to make a great nuisance out of myself in this investigation, as I possibly am on all matters that have to do with loans and grants to foreign countries in the next couple of years, because I am going to have a one-track mind on this idea. I think we ought to concentrate on doing the things that will create jobs in these countries. And you hit upon it in this statement, you said it in a different way. It is the middle-class people who are the workers-who have the little stores and so forth. That is the big weakness in every one of these countries. I don't believe we have concentrated enough upon that subject. You possibly know this. For example, in 2 Sears, Roebuck & Co. stores in Brazil, 1 in Rio and another in San Paulo, 90 percent of everything they sell is produced in Brazil. Many people argue, you are just trying to beat manufacturers up here out of business. That isn't true, because history has proved that the most industrialized countries are our biggest buyers. We export more to Canada and England and West Germany than we do to any place else, because they are highly industrialized. They will buy more in South America as they become more industrialized. I am just try- ing to solicit the help of everybody in what I am trying to do, because the sort of thing that you are doing here is excellent. As you say here, if we can teach those people in our schools they will go back home and be great friends of ours. They will be the leaders and continue our methods. I am making a speech rather than asking a question, Mr. Chairman, but I am going to continue to do it. I may get thrown off of this com- mittee, I may get thrown out, but I am going to continue, because I am so thoroughly sold on the idea. IMPORTANCE OF COMBINED PROGRAM Dr. McGAVRAN. Senator, I think I can certainly agree with you on that. The greater University of North Carolina, along with this contract which is in the whole area, have two other contracts, one with the Textile School of Engineering, with this same National School of Engineering, for developing textile engineers to work in the develop- ment of the whole textile-production program in Peru; and another with the agricultural group. I think the important thing that we see in that is the combina- tion, you don't do any of these things separately without getting into 2 210 TECHNICAL ASSISTANCE PROGRAMS trouble. Actually it is a combined operation. Health goes along with agriculture, and with industry. And the university, in its pro- gram, I am not in a position to speak about these other two contracts, because they are from the school in Raleigh, and it is part of the greater university, but not part of the University at Chapel Hill, so that I can't discuss those particular contracts. Senator MANSFIELD. Doctor, is the National School in Lima a part of the University of San Marcos? Dr. McGAVRAN. No, it is a separate institution. Senator MANSFIELD. Is it a new school? Dr. McGAVRAN. No, it is a separate school in a different part of the city. Senator MANSFIELD. Senator Aiken. Senator AIKEN. No, I think I will learn more by listening than I would by talking, Mr. Chairman. TERMS OF CONTRACT WITH FOA Senator MANSFIELD. Dr. McGavran, what are the terms of this con- tract between the University of North Carolina and the FOA? Dr. McGavran. By that do you wish the budgetary statement of the amount of money involved in it? Senator MANSFIELD. Yes. Dr. MCGAVRAN. The contract calls for 2 years- Senator MANSFIELD. And the details, that is, what rules you adhere to and what stipulations you enter into in connection with such con- tract. Dr. McGAVRAN. The amount of funds involved is $134,000 for a 2-year period. It is divided roughly into three areas. About half of these funds go for the provision of personnel, their transportation, per diem, and the expenses of taking these four or more people to Peru to help with this instructional activity over the months involved in connection with the substitution of personnel for them in the teach- ing program of the University of North Carolina. About one-third of it goes for getting laboratory equipment so that they can start their laboratory instruction; and about one-sixth of it goes for pro- viding fellowships for special training for the laboratory instruction for some of their people who will come to the United States for that purpose. Senator MANSFIELD. Now, Doctor, you mentioned the fact that you are training Peruvian engineers down there in the National Uni- versity. Dr. McGAVRAN. That is right. ADVANTAGES OF TRAINING IN OWN COUNTRY Senator MANSFIELD. What advantages are there, besides those you have mentioned, to training those young men in the National Univer- sity for service in their own country? Dr. McGAVRAN. Well, I think we can perhaps amplify on my state- ment there to this extent, that many of the Peruvian people do not speak English sufficiently well to get training when they come here, the language handicap is very great. It is a good deal better to train for a professional job within the language and culture to which you are accustomed. TECHNICAL ASSISTANCE PROGRAMS 211 Furthermore, after they receive foreign training, whether it be here or in Europe or any place else, they tend to want to locate in the centers of population, Lima particularly. Most of the engineering jobs that need to be done from the health point of view are out in the hinterland. If we can bring them here for special training to this country there would be a tendency then for them to want to remain in the centers of population rather than going out to where the problem is, whereas, when they are trained locally it is much easier and better for them to return to the areas where the real sanitary engineering problems exist. Now, that is a little amplification of my statement. Senator MANSFIELD. Yes. Senator Aiken? CORRELATION OF UNITED NATIONS PROGRAMS Senator AIKEN. Yes, Mr. Chairman, there is one thing I would like to ask Dr. McGavran. Dr. McGavran, how do the operations of the World Health Organi- zation fit into the general health improvement program of Peru? How do they fit into the work which you are doing? Dr. McGAVRAN. Well, the World Health Organization's program is fairly closely correlated with this. Senator AIKEN. They have a program in Peru? Dr. McGAVRAN. I am not sure that there is a separate World Health Organization program in Peru itself. There have been some Rocke- feller programs and several other programs, but I am not sure that there is a World Health program per se there. Senator AIKEN. I think, Mr. Chairman, before we get through with this we ought to find out how the United Nations Organizations are working and how they fit into the bilateral programs which we are carrying on-take the FAO, ILO, and WHO particularly, and the Children's Fund, and so forth. Senator MANSFIELD. Senator Aiken, I think that comes within the purview of this matter. Senator AIKEN. Yes. We can't just go ahead considering bilateral programs as we are primarily doing without at the same time ascer- taining what the United Nations programs are doing, and what they contemplate doing, and how the two programs fit together. There is a field of operations big enough for everybody for some time yet, I am sure of that. It seems to me we ought to find out how to get the maximum benefits out of each program. Senator MANSFIELD. Yes. Dr. McGAVRAN. My impression, Senator, is that the problem that exists is that the technical assistance that is provided through the World Health Organization program is one that is devoid of money, that is, they can provide technical assistance but they can't provide equipment and they can't provide many of the other things which make technical assistance work possible, because of the limited funds they have got. Our own FOA programs which can provide this addi- tional equipment and money are frequently much more effective in these situations. Senator AIKEN. I had the impression that the WHO was contribut- ing a great deal of statistical assistance which could be implemented 212 TECHNICAL ASSISTANCE PROGRAMS by other programs if they are unable to get the money to implement their own ideas. PROBLEM OF PERSONNEL CRUCIAL Dr. McGAVRAN. There is one other point on that which I might make, Mr. Chairman, and that is that this problem of personnel is really the very crucial one. The most difficult task in the world is to give away money or assistance or anything else. It is extremely diffi- cult to do it without producing enmity instead of friendship. And this is universally true in this country as any place else. Therefore it is extremely difficult for FOA to function and really get the kind of friendship which we would expect from such operations. Sometimes it is a little easier for the same friendship to be devel- oped where it comes from an international agency rather than a direct bilateral arrangement. And that is, of course, one of our serious handi- caps and drawbacks in such a program. I don't know of any way to face it unless we face it by getting the kind of personnel who are able to do this—and that is not the run-of-the-mine personnel, because it is a very rare person who can give away money and still keep friends. Senator MANSFIELD. Senator Aiken? Senator AIKEN. That is all, thank you. Senator MANSFIELD. Senator Fulbright? STUDENT EXCHANGE PROGRAM Senator FULBRIGHT. Mr. Chairman, unfortunately I didn't hear his initial statement, and I don't want to repeat questions that I expect have already been answered. There is one point that I do want to mention, and that is this state- ment on page 4 of Dr. McGavran's statement: These engineers, we believe, can be most economically and efficiently trained in their own National School of Engineering. I would like for you to elaborate a little on that with respect to its implications with regard to the exchange of students and profes- sors program. Do you think it would be better to send the teachers out there all together and not bring any students into this country, and so on? Dr. McGAVRAN. No. This was in relationship to the numbers that were involved. I think that the procedure as we have carried it out before is going to have to continue to some extent for the special train- ing and very specialized training which we alone can give. I do not think that the engineering school in Peru will ever be able to give the graduate-type of education which we provide, for example, in the University of North Carolina. But for the main run of the people who are going to have to be trained, the people who are going to have to actually do the legwork and the footwork out there, that can be done by their own school, and it would be much more efficient than to give them, shall we say, postgraduate training here in this country and send them back. Senator CAPEHART. You are thinking in terms of hundreds of in- dividuals? Dr. McGAVRAN. Of hundreds of sanitary engineers that need training. Now, there will still always be a certain number of top specialists who will probably have to get fellowships and scholarships to come to TECHNICAL ASSISTANCE PROGRAMS 213 this country who will be the teachers and the leaders in this area. That will continue. But for the main run of health workers, they are going to have to-not only sanitary engineers but in other fields- they are going to have to be trained locally or else they will never be able to supply the quantities they need. Senator FULBRIGHT. Would you agree that this statement is perti- nent and correct only in regard to the narrow objective of providing engineers, that it does not contribute to any great extent to any better understanding of what the United States is like—that is, the people and its culture and its life? In other words, you are only training engineers, you are not think- ing of, we will say, the cultural or political relationships between the two countries; is that not so? Dr. McGAVRAN. That is right. Senator FULBRIGHT. So there is an added consideration in bringing students and professors to live in North Carolina or Indiana or any- where else in this country in that we hope to give them a greater understanding of what we are trying to do and what kind of people we are? I will put it this way: One objective of the exchange pro- gram is better relationships, and whatever may occur in the academic field is sort of incidental to the main objective. Is that true? Dr. MCGAVRAN. That is correct. And I certainly would agree with you on that. I would feel that part of this program per se does do this very thing; that is, we are having about one-sixth of the funds go to a fellowship program which brings some of these people here for specific instruction and which would involve these cultural factors, but beyond that there will continue to be, I hope, a certain amount of money avail- able for the exceptional leaders in many health fields to come to this country for the cultural and general values, along with the educational values. Senator FULBRIGHT. I didn't think that you meant to leave the implication that there was anything antagonistic between the two programs. As a matter of fact, the exchange program sponsors the sending of professors to teach other professors and students abroad. It does both. And they both have a proper place. Dr. McGAVRAN. I agree. Senator AIKEN. Isn't it true that at the present time some of our better technical schools cannot begin to accept all the foreign students. that would like to attend these schools, highly qualified students? Senator FULBRIGHT. Sure, there is a great deal of trouble about placing them. To use one example now, for several years we have been sending professors to seminars we did it in India and in England and they have quite large classes. We find it is a very efficient way to teach a large number of people. We have been sending 10, I believe, because it is much cheaper to send 10 over there to teach a hundred in the seminar in the summer than to bring a hundred over here. Senator MANSFIELD. Thank you, Dr. McGavran. The next witness will be Dr. Norman Palmer, of the University of Pennsylvania, accompanied by F. H. Morgan. 2 1 214 TECHNICAL ASSISTANCE PROGRAMS STATEMENT OF NORMAN D. PALMER, PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF PENNSYLVANIA, ACCOMPANIED BY HAYDN MORGAN Dr. PALMER. My name is Norman D. Palmer. I am Professor of political science at the University of Pennsylvania. With me this morning is Mr. Haydn Morgan, assistant administrative director of project research and grants at the University of Pennsylvania. I have been invited to make some very brief observations on the technical assistance programs of the United States, with special ref- erence to the role of universities in general in extending technical as- sistance and specifically the extent and nature of the relationships of the University of Pennsylvania with the Government's program. In 1952-53 I spent nearly a year in India, under a Fulbright grant, as a visiting professor at the University of Delhi. My main mission was to help establish a department of political science and interna- tional affairs at this university. I also had an opportunity to visit some 18 Indian universities and many colleges, to confer with Indian political scientists and political leaders, to study political and ad- ministrative problems in India, and to observe the activities of Ameri- can personnel who were associated with the American Embassy, the technical cooperation mission, or the United States Information Serv- ice. During the summer of 1953, while I was making a study of prob- lems of coordination of American operations in Western Europe and of agencies for Western European cooperation, I spent some time in the Mutual Security Agency missions in Rome and Paris. In March 1953 I visited west Pakistan, and in April 1954 I went to Karachi to investigate a proposal that the Wharton School of Finance and Com- merce of the University of Pennsylvania should undertake to give assistance to the University of Karachi in the fields of public and business administration. Mr. Morgan was the chief representative of the University of Pennsylvania in working out the details of the con- tract for this assistance between the university and the Foreign Op- erations Administration. Since the signing of the contract last Sep- tember, I have been serving as coordinator for the project in Pakistan. CONCLUSIONS REACHED ON PROGRAM As an American political scientist who has had an opportunity to spend some time in foreign countries, especially India and Pakistan, and as one who for several years has been teaching and writing on subjects relating to American foreign policy and to Asian affairs, I have quite naturally taken a special interest in the technical assistance programs of the United States and have formed many impressions regarding their objectives, administration, and actual operation; but I am acutely aware that it would be presumptuous on my part to at- tempt to hazard more than the most tentative conclusions, on the basis of my own study and observations, regarding programs of such com- plexity and scope. At the risk of appearing presumptuous and cate- gorical, however, I shall attempt to state a few of the conclusions which I have reached : TECHNICAL ASSISTANCE PROGRAMS 215 1. The concepts underlying the technical assistance programs are sound and right. These programs are in keeping with the traditions, experience, capabilities, interests, and objectives of the United States. Their cost to the American taxpayer is relatively little, and their po- tential significance is very great. They help to advance both the short-range and the long-range ob- jectives of this country. As President Eisenhower has said, these pro- grams are “our most effective counter-measure to Soviet propaganda and the best method by which to create the political and social sta- bility essential to lasting peace. "" 2. I agree wholeheartedly with the President's conviction that "our country's participation in technical cooperation programs must be vigorously advanced." I also believe that these programs should in most cases be associ- ated with programs of development assistance, without which techni- cal assistance alone may be of little avail. In India and Pakistan at the moment the need for both kinds of assistance is very great and very urgent. Relatively small sums made available now, offered in the right spirit and directed tactfully into those parts of the national development programs which most need such assistance, could be of greater value than larger sums at some future date, especially if these larger sums are advanced grudgingly and without a sympathetic understanding of the conditions in the recipient countries. 3. It seems to me that our national interests are definitely served by programs which can help to create greater strength and stability in weak and underdeveloped areas. The effects of such assistance are far more than economic in character. They are rejected in a general uplift in the whole tone of a society and in the attitudes of many peoples. If this analysis is sound, then many of the objections to extending technical assistance to non-Communist countries whose leaders are not at the moment always following policies of which we approve or in which criticism of the United States is particularly prevalent are not pertinent. For this reason, I believe that the United States should extend tech- nical assistance to India as well as to Pakistan. Actually, many of the same problems and difficulties and attitudes which complicate the extension of technical assistance exist in both countries; and more important, the conditions and opportunities which really justify such programs by this country are found to a high degree in India as well as in Pakistan. 4. The extension of technical assistance to a foreign country raises problems which are encountered to a greater degree in other aspects of the foreign-aid program. The relationship between a granting and a recipient country is basically an unhealthy one. By the very nature of the relationship some strings or conditions are created; or at least the sensitive recipi- ent countries seem to have no difficulty in finding such strings. At the worst the United States sometimes finds itself in the absurd posi- tion of apparently trying to force some other country to accept its aid. These observations call attention to the importance of a felt need on the part of possible recipients, and of a decent reticence and tact on the part of American governmental agencies and individuals which 216 TECHNICAL ASSISTANCE PROGRAMS are involved in assistance programs. My feeling is that these agencies and individuals should be firmer than they have been in the past in private discussions and negotiations. ADMINISTRATION AND OPERATIONS 5. On the administration and actual operation of the technical as- sistance programs I have very mixed feelings. I was one of those who regretted the decision to transfer these pro- grams from the Technical Cooperation Administration in the Depart- ment of State to the Foreign Operations Administration, chiefly be- cause I feared that this type of program would be subordinated to programs which gave priority to military aid and that its association, administratively speaking, with military aid programs would give added weight to the standard Communist charge that we were not genuinely interested in giving help to underdeveloped countries for long-range economic development. I can testify that sentiment in India on this point was very strong. However, I have come to believe that the programs of technical and developmental assistance are too important to be assigned to the De- partment of State, which has definite limitations as an operating agency. Possibly some consideration should be given to an administrative separation of the programs of military assistance and defense sup- port, on the one hand, and of technical and developmental assistance, on the other. But I do not think that the various programs now under the supervision of the Foreign Operations Administration should be split up again, and reassigned to different departments, such as State, Defense, and Commerce. 6. On the basis of my own limited observations, my impression is that on the whole the technical-assistance programs are being carried on in the recipient countries in an effective way, in keeping with the objectives of the Act for International Development. In India and Pakistan, with very few exceptions, there seemed to be excellent co- operation between personnel of the American Embassies and the for- eign operation missions. I was greatly impressed with the caliber and the dedication of Americans who are participating in our tech- nical assistance programs in these two countries. Perhaps most of them should have been more familiar with Indian and Pakistani ways of life and patterns of thought, but they seemed to be able to make up for these deficiencies by their friendly interest in their work and in the people with whom they worked. I received the same impression of cooperation and of competence when I visited Bangkok and Manila. 7. In India and Pakistan, and no doubt in many other countries, some of the most effective work in technical cooperation is being done by Americans employed by private agencies, notably the Ford Founda- tion and the Rockefeller Foundation, and by Americans and others who are sent out by the United Nations or by UN agencies which are directly involved in technical cooperation work. The United States Government, in my opinion, should do all it can to encourage these agencies in their work, and to coordinate American and foreign or international techical cooperation programs. TECHNICAL ASSISTANCE PROGRAMS 217 INCREASED PARTICIPATION OF AMERICAN COLLEGES The increased participation of American colleges and universities, through the intercollege contract arrangement, has been a significant new development in the programs of technical cooperation. As of last September 1, 40 distinct contracts with American universities were in operation, and I understand that at the present time the number is nearly 100. These contracts are definitely in keeping with the intent of the Act for International Development, which provided that private agencies should be used in technical assistance programs "to the great- est extent practicable." Each contract creates what has happily been called a sisterhood relationship between an American and a foreign university. This relationship is a healthy one. It gets below the official level, and thereby bypasses certain complications which would otherwise arise. It extends the horizons of both the American and the foreign university. It gives the officials, faculty, and students of a foreign university the feeling that one American university is par- ticularly interested in them. This feeling is important to the broad objectives of the contract. Representatives of the American university who go to the host uni- versity abroad can almost always be sure of a friendly reception-if not so definitely assured of effective cooperation-and they in turn know that their own university stands back of them and that several people back home are devoting a part of their time to providing the personnel, supplies, and assistance which they need. In the foreign country they work with counterparts, who in due course may be sent to the United States for further training. As trainees from the host university come to the American university and as distinguished persons from the host country and/or university visit the American university from time to time, further ties are cemented and greater understanding and appreciation are achieved. Lest this picture becomes too idyllic, I should hasten to add that this kind of relationship is expected to produce tangible as well as intangible results, and Americans who go abroad under intercollege contracts encounter the difficulties and frustrations which are all too familiar to the more experienced personnel in our diplomatic and foreign aid missions. It is hard to recruit personnel of sufficiently high caliber, both as regards competence in the technical fields which are to be developed and as regards adaptability to a foreign environ- ment. There is always the question of the long-range effectiveness of the programs which are being inaugurated with American aid. Will these programs be carried on after the American aid and American personnel are no longer available? Those persons at the American university who are directly involved in the project find that dealing with two Governments and a foreign university thousands of miles away is no easy task. Everything takes more time than seems neces- sary. The conditions and restrictions in an intercollege contract hamper its effective implementation. These conditions and restrictions are probably unavoidable, but they greatly complicate the effort of the American university to carry out a major assignment in a foreign country. 218 TECHNICAL ASSISTANCE PROGRAMS CONTRACT IN PAKISTAN Most of the university contracts call for assistance in the fields of agriculture, health, or basic education. The four other American uni- versities which are operating in Pakistan under intercollege contracts are giving assistance in one or more of these fields. The contract which the University of Pennsylvania has signed with the Foreign Operations Administration for assistance to the University of Karachi and the Government of Pakistan provides for assistance in public and business administration. Mr. Morgan was the chief representative of the University of Penn- sylvania in working out the contract between the university and the University of Pennsylvania. As of July 1, 1955-the beginning of the next academic year- that is, the academic year of the University of Karachi-it is expected that an Institute of Public and Business Ad- ministration will be formally inaugurated at the University of Karachi, Four representatives of the Wharton School of Finance and Com- merce of the University of Pennsylvania are already in Karachi, and three others will be sent out before July 1. Those who are on the scene are already engaged in a multitude of useful activities, including planning for the new institute, lecturing and supervising instruction at the university, working with key people in the Government of Pakistan and in the business community in the development of in- service training programs and in various research activities, and in analyzing the needs for work in public and business administration in Pakistan. Sometimes one wonders whether even the key people in the Government and the business community really appreciate these needs, although when I was in Karachi last April I was given repeated assur- ance on this point. I think the question I ask more than anything else is, do you really want this. Last November a prominent Pakistan businessman who is Chairman of the Pakistan Industrial Finance Corporation wrote to me: The need for the sort of institution you are establishing in Pakistan is very great indeed. A man in robust health may not care for a clinic or a hospital, but he will cry for it when in pain. We have some clever and efficient business people in Pakistan now, but the drought in this direction is going to be very serious in the years to come. A short while ago one of the members of the University of Pennsyl- vania group in Karachi wrote to me very frankly about the obstacles in the way of the development of work in public administration in Pakistan; but he concluded: On the other hand, I am tremendously impressed by the need. I am optimistic that all problems can be worked out if we have strong support at the top when it counts. And it will certainly take time. The "if" in my friend's remarks is a big one, and nothing is more cer- tain than everything "will certainly take time." I could document this latter remark in scores of ways. Only 2 weeks ago, for example, did we receive certain necessary approvals from the Government of Pakistan for sending additional personnel to Karachi, even though these additional personnel were clearly neces- sary to carry out the terms of our contract and even though they were provided for in the budget. These approvals were urgently requested TECHNICAL ASSISTANCE PROGRAMS 219 ་ # nearly 3 months ago. Aside from the usual inertia and general desire not to take responsibility, the main reason for the long delay, in spite of all the efforts of our people in Karachi and of USOM/Karachi and FOA, seemed to be that the few officials who can make decisions in the Government of Pakistan were absorbed in other matters, chiefly arising from recent political developments and specifically from the decision to form a single political unit in West Pakistan. While the question was an important one for us, it raised no issue which had not been evisioned when the contract was signed. COOPERATION OF PARTICIPANTS In spite of some difficulties of this sort, the relations of our people in Karachi to the officials of the university and of the Government of Pakistan have been cooperative and satisfying, and the work seems to be going well on the whole. Our Chief of Party reports that he is receiving every possible cooperation from USOM/Karachi and from the American Embassy-and also from the people in the Ford Founda- tion's Karachi office. I am most happy to have this opportunity to testify that we have received the fullest possible cooperation and understanding from those officials of the Foreign Operations Administration with whom we have had dealings, from the time the proposal was first made to us until this very moment. Where delays and complications have arisen -and they have been numerous-they have been occasioned by the rather complicated nature of an operation of this sort and by the many requirements of clearance and of routing with which anyone connected with the Government is painfully familiar. I might add that the University of Pennsylvania has also signed a contract with the Foreign Operations Administration which pro- vides a small amount of assistance to a program of research and train- ing in the eradication of diseases of cattle in Mexico and Latin Amer- ica. The funds provided by FOA are being used to defray travel ex- penses of personnel of the university's school of veterinary medicine. who go to the Squibbs-Mathieson Laboratory for Veterinary Research of the Ministry of Agriculture and Husbandry of Mexico and the University of Pennsylvania, which is located at Palo Alto, Mex., or to defray travel expenses for Mexican nationals who come to this coun- try in connection with the project. At the present time the University of Pennsylvania is also con- sidering a contract between the Wharton School and an FOA Mexican productivity team for a program which will contribute to the estab- lishment of more advanced productivity practice and education in Mexico. Our contract in Pakistan is for a 3-year period. The Mexican con- tract is for 1 year, with the assumption that it will be renewed. Nat- urally, the provisions of funds beyond the end of the current fiscal year is dependent on appropriations by the Congress. It would cer tainly be most embarrassing to us if these funds for carrying out the commitments under our contracts were not forthcoming. The intercollege contracts are designed to be on a cost basis only, and if our experience is at all typical I think I can say in all honesty that the rewards to the participating universities are other than financial. 220 TECHNICAL ASSISTANCE PROGRAMS If American universities can contribute to a vital part of this coun- try's operations abroad, in a manner which will be in keeping with their nature and their competence, they should surely do so without insisting on making a profit out of the operation. The total cost of the operations in which American colleges and universities are engaged under the intercollege contracts will not be great. I believe I am correct in stating that the total costs of the work which the University of Pennsylvania will carry on in Pakistan over a 3-year period will be less than the cost of one jet fighter. On the whole, I am completely convinced that the increasing partici- pation of American universities in the programs of technical assist- ance, as provided for through the intercollege contracts, is most desir- able, that it will be mutually profitable to American and foreign uni- versities, that it will result in a major contribution to the develop- ment of foreign countries, and that it will help to promote our objec- tives abroad in a manner that is peculiarly in keeping with American initiative and experience. This participation will enrich the technical cooperation program in innumerable ways. I thank you for the opportunity to make this statement. Senator MANSFIELD. Thank you, Dr. Palmer. Senator FULBRIGHT. Dr. Palmer, I think that is a very fine state- ment, it is very thorough, and I can't think of anything you have overlooked. TYPE OF DEVELOPMENT ASSISTANCE NEEDED I would like to elaborate just a little. Under your point 2, I wonder for the benefit of the committee if you could give us a more specific illustration so that we can understand more clearly the type of development assistance that you think should go along with the technical-assistance program, say in India or Pakistan? Dr. PALMER. The problem as I envisage it is somewhat as follows: India now has, and Pakistan will have in the near future, a planned program for economic development. There are aspects of these over- all development programs which I think will greatly benefit from relatively small amounts of development assistance, which are apart from the technical aid given for training, and that sort of thing. We have already been contributing to community-development projects for India, and we are helping in a less organized way in Pakistan. What impresses me, aside from the obvious need for this, and the difficulties of relying wholly upon loans or private investments- which I certainly fully agree should be developed as fully as pos- sible is that there are areas of this sort which loans and private investments apparently can't get into, which are very significant in the development programs of a country. And that is why it seems to me that you do have the need to consider these two together in many cases. Senator FULBRIGHT. What we are trying to do, I think, is to con- sider the two together. Does it make any sense to you that we should look upon the educational aspects the sort of thing you are doing-as technical assistance? It is not reimbursable, and it isn't the sort of activity which can be put on any basis of repayment as an industrial project can. Dr. PALMER. That is true. TECHNICAL ASSISTANCE PROGRAMS 221 Senator FULBRIGHT. What we have been trying to arrive at is some balance between the technical assistance which is a grant, and the other program such as, we will say, a railroad or a dock, which is of a commercial nature. Why shouldn't that be put on a reimbursable basis? Dr. PALMER. I think it should. I think, to the fullest extent possi- ble, the things that you speak of should be on an investment basis. Senator FULBRIGHT. Shouldn't an irrigation project be put on an investment basis? Dr. PALMER. I think that is a somewhat more difficult problem than the other you mentioned. But I am not an expert in the field. Senator FULBRIGHT. A great many of our irrigation projects have been put on such a basis. It is true that they were over a long period and noninterest_bearing, but they are reimbursable. Dr. PALMER. I think to the extent possible they should be put on a reimbursable basis. But, as I say, that is more difficult. Senator FULBRIGHT. It is more difficult than a railroad? Dr. PALMER. Yes. And usually in a country like India the irriga- tion project is tied in with a tremendous multipurpose type of project. Senator FULBRIGHT. That is true, but we have done it and proved that it can be done with the TVA, and in many other places like these projects in the Northwest which combine power and flood control and irrigation. We have patterns which I would hope we might apply. Dr. PALMER. The Government of India has employed directly some very competent American engineers, and they have been helpful in that respect. CONTINUED SUPPORT OF U. N. PROGRAM Senator FULBRIGHT. Would you say that we should continue our support of the United Nations activities in the technical assistance group? Dr. PALMER. Very definitely, sir. The problem, I think, is the rela- tive balance. And, in general, it seems to me that there are two factors which, in a sense, seem to compete against each other. One factor is that if you consider the long-range objectives of these programs of technical assistance, and their relations to our broad national interest, then presumably this type of assistance should be given in the way which best suits the sensitivity, shall we say, of the recipient countries, and in that respect programs funneled through the United Nations seem to be very acceptable. The other factor, which I can't seem to put out of my mind, I call the administrative factor. I am not yet convinced that an interna- tionally administered operation is as effective as one which we have more under control, as it were. I think there is a very serious problem as to the effectiveness of the use of the funds we make available through those programs. I would hope that the grants which have been made to the United Nations technical cooperation program would certainly be continued, but I would have some doubt as to how much additional could be funneled effectively through the U. N. That would be my only reservation. 59637-55-15 222 TECHNICAL ASSISTANCE PROGRAMS ATTITUDE OF RECIPIENT COUNTRIES Senator FULBRIGHT. In point 3 of your statement, you have a good point, that the people who are not following our policies, and we want them to, should be the object of great solicitude. In other words, they, perhaps, as a practical matter, should be cultivated more assidu- ously than our friends in order to extend our own influence; is that what you are saying? Dr. PALMER. I am not sure I go that far. I don't think we should penalize our friends. But on the other hand, it seems to me that it is very important for us to keep in mind what our objectives are with these programs. Senator FULBRIGHT. I was rather impressed by your point on politics. If we don't keep making new friends and don't cultivate our enemies we soon get defeated. It is much the same problem here. We have got to begin cultivating the people who are valuable. We don't penalize our friends, we just don't devote all of our attention to them. Dr. PALMER. I don't think that we should assume that anybody who speaks disparagingly of us is our enemy. Senator FULBRIGHT. I don't think they are enemies; they are just standing off and trying to make up their minds whether or not we are worthy. Dr. PALMER. The difficulty is, sometimes what makes sense to us does not make sense to them, and vice versa. But there are the funda- mental objectives in common. Senator FULBRIGHT. Would you go so far to say that it is possible that the United States doesn't know all the answers here? Dr. PALMER. I would hazard that statement. Senator FULBRIGHT. We should at least have an open mind. Dr. PALMER. That would call for a 50-minute lecture. Senator FULBRIGHT. I think that point that you make is a very good one the reticence that some of them had in accepting aid. It is in the nature of embarrassment to them. They hate to admit that they are incapable of providing for themselves, and in a way, that is a very worthy instinct or characteristic on their part. We shouldn't be too critical because they don't like the role of being a recipient. Dr. PALMER. In a country like India, for example, the attitude toward this type of assistance is a peculiar one. It is not only the facts that you mentioned, but it is also the concept represented by Gandhi's whole attitude toward this matter of outside assistance, and the type of society which has developed in the country. Senator FULBRIGHT. And they are very afraid of any revival of what they call colonialism in a different guise? Dr. PALMER. Which they can see under any bush. Senator FULBRIGHT. That makes them more sensitive. Dr. PALMER. I think we have to recognize that this is a real feeling; it isn't just something that is put on for effect. ADMINISTRATION OF TECHNICAL ASSISTANCE Senator FULBRIGHT. One last point, although there are many that could be raised. Would you clarify your discussion under your point 5 regarding administration of this problem? TECHNICAL ASSISTANCE PROGRAMS 223 Dr. PALMER. I am afraid I asked for trouble under this one, be- cause this is a difficult problem. As you know, the various studies which have been made on this whole problem of foreign aid have come to different conclusions. If you read the Hoover report and some reports of the Brookings Institution you will find a variety of recom- mendations. In one Brookings report you will find that there is no necessary objection to the State Department as an operating agency, whereas a few months before the Brookings recommendations with respect to ECA were of a different type. I realize that there are differences in the two programs. Possibly we do not want to put technical assistance programs on a permanent basis. But it seems to me that whether we call them technical assist- ance, or whatever the term is, we are going to have these types of programs, and they have to be administered. Now, will they be administered by a single agency, which presum- ably would have some definite advantages on the administratíve side, or will they be split up? The point that bothers me very much about the State Department is that there is a danger, it seems to me, of burying the technical assistance programs in the hierarchy of the Department. I think there would be great difficulty in simply putting a program like this administratively in the Department, especially if you try to relate it with assistance, as I have mentioned. It does seem to me that if it is possible to make some kind of fairly clear separation between the essentially military aid types of programs and essentially technical assistance programs and development programs, that would be very helpful. Maybe you can do it in the same agency. I must confess, I am very happy this is your problem and not mine. Senator CAPEHART. That applies to a lot of problems. Senator FULBRIGHT. In other words, that is a very difficult prob- lem, still? Dr. PALMER. Yes, sir. Senator MANSFIELD. Senator Capehart. SUGGESTIONS FOR CREATING JOBS Senator CAPEHART. You have, of course, heard my question on this matter of creating jobs and training in these backward countries. Have you any suggestions on how we might improve it or encourage it? Dr. PALMER. I think a great deal can be done indirectly as well as directly. For example, with regard to jobs in public administration activities in Pakistan, part of the problem, if I may say so, relates to attitudes. That is true both in the Government and in certain parts of the business community, it seems to me. Now, if you change certain attitudes with regard to the role which young Pakistanis, with some confidence, some training, that is, further training, can play in the affairs of their country, then I think that even under present conditions jobs can be found for many. This is one of the great problems with regard to the Institute which we are help- ing to establish in Karachi. Suppose that we do have an institute there, and after a short time we pull out-our job is to work ourselves out of a job as quickly as possible, of course suppose we pull out and then the people who are trained in this institute do not find openings in government or in 224 TECHNICAL ASSISTANCE PROGRAMS business, this could be worse than doing nothing at all, there is no question about that. And therefore, a part of the emphasis will have to be to attempt to exert a useful influence and I mean influence in a tactful and preferably not in a public way. Senator CAPEHART. Take Pakistan, for example. Why don't they have a higher standard of living? Why do they have so many poor people? Why do they have two societies over there, the very rich and the very poor? Dr. PALMER. This goes way back to the conditions existing over many centuries. Senator CAPEHART. What are the reasons for it, and how are you going to correct it? Dr. PALMER. If you are generally familiar with the history of that area you will know that their history has been a troubled one, and they have never had the opportunity that this country had of devel- oping during a period when the industrial revolution was underway. Senator CAPEHART. The answer is that they have no jobs and no trade among themselves? Dr. PALMER. Basically I think that is a very important reason; yes, sir. And I do feel that we should not be too pessimistic about this. I can think of some countries-the Philippines, for example- where already it has been found possible, through various types of programs, to provide more jobs. And it would seem to me that if you develop these activities, through various types of assistance, direct and indirect, and particularly through loans and private initiative, the things through which Americans can presumably make best use of their experience, and do it in the right way, then you can have a very considerable effect, very much so. Senator MANSFIELD. Senator Aiken. AMERICAN-SUPPORTED SCHOOLS ABROAD Senator AIKEN. Dr. Palmer, do you find the established American schools and colleges in these foreign countries of assistance in carry- ing out these programs? Dr. PALMER. Well, of course, the American University in Beirut, as you know- Senator AIKEN. What about Pakistan? Dr. PALMER. I don't know of any American- Senator AIKEN. What about Rawalpindi? Dr. PALMER. You are thinking of colleges? Senator AIKEN. That is right. Dr. PALMER. There are only five universities in Pakistan, but there are some colleges which have had support from American funds. Senator AIKEN. Well, American supported. Dr. PALMER. An outstanding example is Forman Christian College in Lahore. It is undoubtedly one of the premier institutions in the country. And below the college level, some of the finest schools in India are schools like the Woodstock School in Mussoorie and the Mount Herman School in Darjeeling. And a number of colleges are American supported. I think that the most ardent nationalists in those countries would agree that these American and British sponsored schools are among the best. TECHNICAL ASSISTANCE PROGRAMS 225 Senator AIKEN. They could be very useful, could they not, in pro- moting these programs, carrying them out? Dr. PALMER. Actually, you will find that Washington State Col- lege has a large contract for giving assistance in several fields to Pun- jab University and some of the affiliated colleges. Its representatives have worked very closely with Forman Christian and some other colleges which receive considerable support from American sources. Senator AIKEN. That is all. Senator MANSFIELD. Dr. Palmer, I note in your testimony, at page 9, you state: Naturally, the provision of funds beyond the end of the current fiscal year is dependent on appropriations by Congress. It would certainly be most em- barrassing to us if these funds for carrying out the commitments under our contracts were not forthcoming. And on page 4 you state that in the beginning you felt that the point IV programs should be put in the Department of State, but as time went on you changed your mind somewhat. One of the ideas in putting the point IV program back into the De- partment of State is to give it permanence so that you won't have to worry about these commitments under your contracts. Under the present setup you have a temporary agency which, like most tempo- rary agencies in the Government, seems to be bent on making itself into a permanent temporary agency. So I would assume that if we are successful—and the law so states at the present time-in getting point IV back into the State Department, that you will be in a better position financially, and I would think practically as well. RESTRICTIONS OF INTERCOLLEGE CONTRACT Now, on page 6 there is one statement by you, and I quote: The conditions and restrictions in an intercollege contract hamper its effec- tive implementation. Would you mind explaining that? Dr. PALMER. I shall be glad to attempt an answer. And I hope you will understand that the next sentence recognizes that the diffi- culties are probably unavoidable. We have to check and double check every time we make an appoint- ment under the contract in regard to personnel, for example. This is understandable, of course. You want to be sure that the person you send out to a foreign university has a good security clearance in this country. But it does make it very difficult for us. Security clear- ances take a good deal of time, but this is only the beginning of the delays. Before we can send an American professor to Pakistan, we have to get approvals from several people in that country. First, the request has to go to the vice chancellor of the university, and time is required to get it off his desk, and that is no small item. Then, it goes to the Ministry of Education, and more time is re- quired. And then, it probably goes to the Minister of Economic Affairs, and nobody knows what happens to it there. I can speak with some experience on this. These are difficulties which in a sense are inherent in the environment, but I think this is one of the aspects of the general environment that can be improved. Senator MANSFIELD. Would you say that the fault is not so much here in the conduct of the FOA as it is in the other government? 226 TECHNICAL ASSISTANCE PROGRAMS Dr. PALMER. In all fairness, I do not think the fault is with the FOA. Senator MANSFIELD. Not too much paperwork? Dr. PALMER. I don't think so. The most important fault-I would rather not use the word "fault"-the most important restriction is the time required on security clearance. Senator MANSFIELD. I see. Dr. PALMER. That takes time. And if you are going to try to get a top man in, let us say, statistics, to go out on a 2-year assignment, that involves a lot of decision. The type of man we want is not the type who can easily go abroad in the first instance, and to make him wait around until we can find out whether all this can be done, plus the approval of the salary arrangements, and other formalities in- volved, raises many difficulties. And in some cases you may lose the individual, he simply will not take that chance, other things come up, he has other opportunities. LANGUAGE BARRIERS Senator MANSFIELD. Doctor, as to the people you send out to Paki- stan—and this would apply to India as well-there is no language difficulty, because the language is English in the universities? Dr. PALMER. I wouldn't go so far as to say that there is no language difficulty. An American speaking American and not English en- counters, as you know, some difficulty in these countries at first. But basically, there is no difficulty. Most of our work, as you understand, will be in the training of teachers and in work with postgraduate students, as they call them, or honor students in the last 2 years of the undergraduate experience. By that time, these people who have got that far up the educational ladder will have a relatively good competence in English. So it is quite different from the problem in Peru, or many other countries. Senator MANSFIELD. They do teach English in the secondary schools in both India and Pakistan? Dr. PALMER. That is correct, sir. Senator MANSFIELD. Dr. McGavran, may I ask you a question. When you send these faculty members down to Peru, are they versed in the Spanish language? Dr. MCGAVRAN. Some of them are and some are not. We couldn't get all Spanish speakers. We therefore have to have some trans- lators and people who can work with them. And therefore, those members of the faculty down there who are at the university are bi-lingual and can help in that situation. It is a hazard. Senator MANSFIELD. Thank you. Dr. PALMER. Mr. Chairman, I might add that the fact that we have at the University of Pennsylvania the largest program in this area in the country was, as I understand it, one of the points considered in the original approach to our university. It wasn't simply the reputation of the Wharton School. Senator MANSFIELD. You mean you were doing it before the FOA had it? Dr. PALMER. We have had extensive training in language, sociology, anthropology, and so forth, of the area. Senator MANSFIELD. Haven't you had an expedition in the Arabian countries for a number of years? TECHNICAL ASSISTANCE PROGRAMS 227 Dr. PALMER. You are thinking of another branch of the university, the museum. And some of those expeditions have become rather well known because of the discovery of ancient villages, and so on. Senator MANSFIELD. Thank you very much, for your interesting testimony; and also, Mr. Morgan, who accompanied you. The next witness will be Dr. Howard Teaf. Doctor, will you take the chair and proceed? STATEMENT OF HOWARD M. TEAF, JR., PROFESSOR OF ECONOMICS, HAVERFORD COLLEGE, REPRESENTING AMERICAN FRIENDS SERVICE COMMITTEE, ACCOMPANIED BY ALSTON WARING AND MRS. LORRAINE CLEVELAND Dr. TEAF. My name is Howard M. Teaf, Jr.; I am professor of economics at Haverford College, a member of the executive board of the American Friends Service Committee, and chairman of its sub- committee on social and technical assistance. I am speaking in the latter capacity. On the basis of a contract with the Technical Cooperation Adminis- tration, signed in June 1951 and renewed in 1953, the American Friends Service Committee has been carrying on village and agri- cultural development work in two projects in India. We also have similar projects, financed entirely by nongovernmental funds, in El Salvador, Israel, and Jordon, and with American Indians. We can't forget that some parts of the United States need this same kind of assistance. Senator MANSFIELD. Do you mean that some parts of our country are undeveloped and need assistance? Dr. TEAF. I think it is good for our souls to remember that some- times. Last year I visited the projects in India and Jordan, but my observations will be based on our general experience as to those proj- ects which were carried out under FOA contracts. THE PRIVATE AGENCY SUPPLEMENTS GOVERNMENT PROJECTS Governmental projects in the field of technical assistance are essen- tial and important. The role of the voluntary agency is supplementary to that of governments. Whereas the Foreign Operations Admin- istration and United Nations usually send out highly qualified experts to work primarily at the government level, a private organization such as the American Friends Service Committee emphasizes grass- roots work with village people. We send out technically trained per- sonnel, skilled in human relations and willing to live and work in the villages where, in fact, the fundamental changes must take place. In the State of Orissa there is the larger of our projects in India. We have a village-development program operating in 40 villages, using both Indian village health workers and on our staff coworkers of professional rank. In Rasulia, the smaller of the two projects, we have an agricultural development and training project. We believe that one of the contributions of private agencies is to develop, from experience in the villages, ideas and methods which can be of help to those who work at the government level. 1 228 TECHNICAL ASSISTANCE PROGRAMS A We believe that this level of assistance is likely to engender ap- preciation and understanding of the real aims of the people of the United States, rather than suspicion of motives and resentment toward the "rich uncle." That could be a capital U, I guess. People in any locality are initially suspicious of outsiders. For example, when we first began work in the western part of the State of Orissa in India, a survey was conducted by a rural sociologist who had been brought up in the area, in an effort to find out what the local people thought of the newly arrived project personnel. Here was what the sociologist discovered: Some say we will acquire the best lands of the area and start a farm. Some say we will change the caste system and make everybody equal. We will change the religion of the people. Some say we have acquired the American Govern- ment for the purpose of constructing the large dam nearby. Some say we are very high officials delegated by the Government to settle and rule the people of this area. Some say that we have come here to influence the people politically in order to gain votes. It took months of living and working with the people to allay this early fear and distrust. I would like to add that the private agency work at the village level is more likely to develop the self-confidence and the ability, and the will to do for themselves the kind of things that Senator Capehart has been talking about from time to time; while sometimes, I think that Government projects can degenerate, even if they start out on a higher level, into something where they are more likely to be doing for the people rather than to help the people to help themselves. Senator AIKEN. Is that applicable to Asia and the United States, too? Mr. TEAF. I think it is probably applicable in all parts of the world. If somebody does something for you, you might sit back and let him do it. Senator AIKEN. In any part of the world? Mr. TEAF. Yes. VILLAGE DEVELOPMENT INVOLVES FUNDAMENTAL CHANGES The introduction of scientific ideas and new tools into a simple rural society is a very delicate and difficult process, requiring an in- sight into the basic values, attitudes, motivations, and institutions of the host country, and a capacity on the part of the technician to ad- just his techniques and himself to the situation. Community devel- opment is a slow process. Pressure for quick results and statistical proof of success are apt to force a technician to use unwise methods and to put pressure on simple people who have in the past never had a concept of change. One of the people who went over with our first team in India summed it up this way: If you ask a man in Chicago what his city will be like 50 years from now, he wouldn't even try to tell you, but if you ask an Indian villager what his village will be like 50 years from now, he can tell you. Such people are now only beginning to understand that change can come to them and that they themselves can have some part in bringing it about. TECHNICAL ASSISTANCE PROGRAMS 229 The most significant and important evidences of change are often not measurable. Recently a visitor to our Orissa project had occasion to go out with one of the staff members to a village where an improved breed of cocks had been distributed some months earlier. As he and the technician passed from one house to another, several of the vil- lagers told about the success they were having with their new cocks. Then one man came running after them to tell them that his cock was no good at all; that nearly all the eggs were infertile. However, he ended his tale of woe by saying, "Let me have another cock and I will try again." The visitor commented that in his 25 years' experience in India he had never known a villager to come and make an open complaint such as this. It was still more significant that, instead of accepting what had happened as due to some harsh fate against which his own efforts were futile, he was ready to try again. The visitor went on to say, "Incidents of this kind lead me to believe that the whole mentality of the peasants is changing and that they now believe that improve- ment can and must come. "" A TECHNICAL ASSISTANCE PROGRAM REQUIRES LONG-RANGE PLANNING AND FINANCING It is impossible to operate an effective technical assistance program on a year-to-year basis. And right there, I heartily underscore what Norman Palmer said. Work of this nature calls for long-term planning and financing. A private agency starting a development project in a community has a moral obligation to the community to see the project through. We appreciate the fact that our initial contract with TCA was for 2 years and that it was subsequently extended for 3 additional years. Al- though this has given us assurance for a limited period, there has always been a sense of insecurity because of the long-term obligation and uncertainty as to future sources of funds. We recognize that at the end of 5 years we will have only begun our real job. Although we first spoke of our work in terms of a 10-year program, a recent visitor to our project in Orissa has reminded us that it will take a generation. The need for continuity and long-term planning is equally impor- tant for Government programs in this field. We join with the many who believe that technical cooperation by the United States must be kept entirely distinct from military aid and commitments. Aid based on purely humanitarian motives can be expected to create more real ties of friendship and mutual cooper- ation than that which is based on political or military strategy. Hu- manitarian motives are more likely to yield the kind of projects that help people develop social strength. I would add, of course, that humanitarian motives are not incon- sistent with enlightened self-interest, in fact, there usually are ele- ments of self-interest in even the best of humanitarian motives, even if it is only satisfying one's own conscience. ཤ 230 TECHNICAL ASSISTANCE PROGRAMS SUPPORT OF THE UNITED NATIONS TECHNICAL ASSISTANCE PROGRAMS IS VERY IMPORTANT While we have appreciated the working relationship with our own Government, we recognize that the work of the United Nations in certain types of technical assistance activities is much more logical and often more acceptable to recipient countries. This does not mean that efforts of our own Government in this field should be decreased, but that we would encourage more liberal support of the technical assistance program of the United Nations. In conclusion, we must acknowledge that in all countries where we have social and technical assistance projects we have enjoyed a high degree of cooperation from the host governments and from the field staffs of the Foreign Operations Administration and of the United Nations. I have found this very strongly true even where we are not operating with FOA funds, that we lean heavily on the FOA people for technical advice, as for example, in Jordan. Now, we have here today, Alston Waring, who is an agriculturist, a member of our original team in India who was over there for 2 years; and Mrs. Lorraine Cleveland, who is the Administrative head of our technical assistance projects. If there are any technical questions and administrative questions I will refer you to them. Senator MANSFIELD. Thank you, Dr. Teaf. Do you have any questions, Senator Capehart? Senator CAPEHART. I don't believe so. this morning. You heard my comments Dr. TEAF. I would like to add just one thing. Senator CAPEHART. Proceed, sir. CREATION OF JOBS AND TRADE Dr. TEAF. You say you want to make jobs locally, and you point out that you can't rely entirely on international trade, import or export. But you can't sell to people who are one step removed from starvation all the time. It is a vicious circle in a way, and somewhere it has to be broken. If the people have something in the way of a better opportunity for living, they are also better customers, that is one of the so-called secrets of the United States. I think Alston Waring had some experience in the development of small trade in India, I don't know whether it is pertinent. Senator CAPEHART. You agree that you have never solved the prob- lem completely by finding jobs for these people and then letting them create their own trade? Dr. TEAF. It is like the hen and the egg, they come together. Senator CAPEHART. They do, but the point is that you admit that you will never solve the problem until you do create jobs and trade? Dr. TEAF. Jointly with raising the standard of living. Senator CAPEHART. You can't raise the standard of living unless a man has a job. Now, what can be done in addition to stimulate that and encourage it? It seems to me that everything we do ought to be tied in with that. Dr. TEAF. When we are setting up better methods of agriculture we are also creating a demand for fertilizers, for example, and then somebody will develop a small local fertilizer industry, and when we TECHNICAL ASSISTANCE PROGRAMS 231 develop small local industry, we are helping to pull people off the land, where there are too many. They go hand-in-hand. Senator CAPEHART. My point is that that ought to be the ultimate aim, because they will never be self-supporting and enjoy a high standard of living until the great majority of their people are work- ing at constructive jobs and drawing wages. Then they will spend those wages in their own businesses, you see, and create trade. This gentleman here had some experience; how do you think we might do it? SERVICE COMMITTEE PROJECT IN ORISSA Mr. WARING. I can give you the experience that we had in Orissa. The project is dealing in many aspects of agriculture and public health and so forth. And I would back up what was said by a former person, that it is necessary to work from many angles, when we are dealing with the village. Now, we found right away that there was a great deal of under- employment, not a great deal of actual unemployment, but a great deal of underemployment of both agricultural people and—and in our area a very large percentage of the people are weavers, they are hand-loom weavers. Now, these people are being threatened by the mill cloth that is coming into the bazaars to a large extent. But the mill cloth cer- tainly is not able to fulfill the whole need for the Nation, and it drives these people out of an occupation. And then the question is, what would happen to them, at least during the long period of transition? So here was a project that was confronted by the need to do some- thing to stabilize a percentage of the millions of people among whom we were living. We had the backing of both the Government of Orissa and the Government of India in working locally in trying to stabilize that by a number of different methods not to try to drive them into mills, or into central industries, but to improve their tech- nology on a hand-loom basis, the substitution of 1 shuttle for 3 shuttles. The fly shuttle for the thrown shuttle, that is a simple way by which they can increase their effectiveness and maintain a larger productivity. And then, to go further, to help them to obtain larger markets. In other words, a small project such as this one of the American Friends Service Committee can deal with the very problem that you are speak- ing about in helping to stabilize and get more jobs. EXPERIENCE OF FRIENDS COMMITTEE Senator MANSFIELD. Dr. Teaf, how long have the Friends been engaged in technical assistance or point IV work? Dr. TEAF. I don't know how far back you would call them techni- cal assistance projects, but there were projects of this sort in develop- ing local industries which went beyond feeding and relief work that were associated with the Quaker work in Europe after the First World War-for example, in Poland we had a small industry project to help the people make embroideries, and things of that sort, to get a little income to supplement their relief food. Senator MANSFIELD. How long have you been in these states in India you have mentioned? 232 TECHNICAL ASSISTANCE PROGRAMS Dr. TEAF. In India, with specific point IV projects, since 1952; the first time we went in in 1952. Mr. WARING. In Rasulia in 1951. Dr. TEAF. The agreement was signed in 1951. Senator MANSFIELD. What I am trying to get is that the point IV assistance is nothing new as far as the Quakers are concerned? Dr. TEAF. No. In many respects a good many of what started as relief projects, in which the Quakers were involved, and for which the American Friends Service was originally founded in 1917, became what I now would call technical assistance on point IV problems, because of the desire of the service committee to get people on their feet and help themselves, and then pull out. I have always said that the American Friends Service Committee, the day after it en- ters a project, is figuring out how it is going to get out of it. Senator MANSFIELD. That is the idea behind point IV-a basis on which we will get out gradually both as far as financial and ad- ministrative control is concerned, and let the host country take over more and more. It is self-help. Dr. TEAF. That is right. Senator MANSFIELD. You mentioned that the officials in Jordan were quite cooperative-when you went to them they gave you help. Dr. TEAF. Yes. Senator MANSFIELD. Did they ever go to you? Dr. TEAF. I think they are trading information all the time, be- cause of the close relationships that I saw in Jordan particularly. Possibly Mr. Waring could say more about this from his personal experience, but I think that this is a very informal, two-way kind of thing. We are working always with the local government, the FOA people are always working with the local governments. Every- body knows everybody else, trading ideas. The FOA people in Jordan would get us some grapevine stock for planting, and then would be very anxious to see our experiment in getting the people to adopt it, they are watching one another and helping one another that way, without it being a joint project. USING MISSIONARIES EFFECTIVELY Senator MANSFIELD. The reason I raise the question is that we have heard here that the Latin Americans and other folks in some countries stayed pretty close to the capital and didn't go out to see the missionaries, the Protestants and Catholics, many of whom had spent their lives there, to get knowledge to make the program more effective. It would be the subcommittee's hope that the FOA, and the point IV program especially, would take advantage of these people, these fellow nationals of ours who have been out in these countries for many years and know the customs and the conditions and therefore are able to help us inaugurate effectively and carry out a better, more comprehensive program. Dr. TEAF. I think we have had to recognize that there are two func- tions. One of them is an advisory capacity at a very high level. And that necessarily will keep the people closer to the capitals. But they won't learn much until they do get out; I would agree with you on that. TECHNICAL ASSISTANCE PROGRAMS 233 But speaking now again of my own personal experience in Jordan, I was living there at the project for a week in an Arab village, and I can recall that just in that week I think either 4 or 5 people came out there from FOÅ, people in different capacities. The program director and one of the agriculturists and a tree man, all were out there at one time or another-sometimes not professionally, sometimes just to come out and see what was going on out there in our projects. Senator MANSFIELD. One of the things that impressed me about Dr. McGavran's testimony this morning in connection with the train- ing of the engineering students at the National Institute at Peru was his statement to the effect that if you train them in Peru, they go out in the country. They don't just stick to the capital, because their problems are not primarily in the capital, but all over the country, whereas if we take too many students back here they will probably go back and concentrate in the capital and forget the problems out in the country. It is always that part of the economy which decides whether or not a country is going to be good and strong or weak and feeble. Thank you, Dr. Teaf. Senator CAPEHART. Do you think it might be helpful if you changed the name of this and called it job assistance, rather than technical assistance? Wouldn't the common people over there understand what you are talking about, when you are talking about creating jobs for them? Dr. TEAF. I think we lost a great deal when we dropped the word "cooperation." I liked "Technical Cooperation Administration”— I always felt we had a jump on the United Nations because we got it before they could get it, and they had to use "assistance." Then we gave it up ourselves. Senator MANSFIELD. There is no reason why we can't bring it back. Senator CAPEHART. We are talking here about help to create jobs, make work; that is really what a man wants, he either wants his own business or a job. Senator MANSFIELD. The meeting is adjourned. We will meet Monday morning at 10 o'clock in room 457 in the Senate Office Building. (Whereupon, at 12:30 p. m., the hearing was recessed, to reconvene Wednesday, March 2, 1955, at 10 a. m.) TECHNICAL ASSISTANCE PROGRAMS WEDNESDAY, MARCH 2, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS, OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10:00 a. m., in room 457, Senate Office Building, Senator George D. Aiken, pre- siding. Present: Senators Aiken, Mansfield (chairman of the subcommit- tee), Green, and Hickenlooper. Senator AIKEN. The committee will come to order. We will proceed with the hearing on the technical assistance pro- gram. Mr. Loree, chairman of the National Foreign Trade Council. STATEMENT OF ROBERT F. LOREE, CHAIRMAN, NATIONAL FOREIGN TRADE COUNCIL, INC., NEW YORK, N. Y. Senator AIKEN. The committee would be very glad to get your advice on the operations of the technical assistance program. Mr. LOREE. Thank you, sir. My name is Robert F. Loree. I am chairman of the National For- eign Trade Council, which comprises in its membership manu- facturers, merchants, exporters and importers, rail, sea, and air trans- portations, interests, bankers, insurance underwriters, and others inter- ested in the promotion and expansion of the Nation's foreign com- merce. The council is, therefore, interested in the question of technical assistance as it affects economic development throughout the world. ROLE OF GOVERNMENTS CONFINED TO PUBLIC SERVICE The council believes that, in the provision of technical assistance, the role of governments, including that of the United Nations as well as that of the United States, should be confined to the fields of the public services, embracing broadly such areas as health, sanitation, education, public administration, and agricultural techniques. The &im of government should be to create a broad underlying foundation on which the economic development of underdeveloped countries can be based. In the provision of public services of the character indi- cated, governments have demonstrated a capacity to contribute ef- fectively to the progress and well-being of nations. With respect to technical assistance in the fields mentioned, which is extended directly by the United States Government to other coun- tries, the funds provided should be allocated for clearly defined proj- 235 236 TECHNICAL ASSISTANCE PROGRAMS ects, within specified financial limits and restricted to the dollar cur- rency cost only, and subject to adequate controls to assure that the funds will be used for the stated purposes. An effort should be made by our Government to assure that funds contributed by it to the tech- nical assistance program of the United Nations are also restricted, within specified financial limits, to public-service projects in the fields mentioned. PUBLIC FUNDS AND INDUSTRIAL DEVELOPMENT The council is strongly opposed to the diversion of public funds provided for technical assistance to the direct promotion of industrial development of underdeveloped countries. It holds that industrial development can best be achieved through private investment, which not only provides the capital required for such development but car- ries with it the managerial and technical skills essential to the pro- ductive application of the capital invested. In the view of the council, the system of free, private, competitive enterprise, as we know it in the United States, is far superior to other systems in its capacity to produce and distribute the goods and services essential to high and rising living standards. Based upon private ownership, this system has generated the new capital and equipment necessary for an expanding national economy. By its incentives and rewards, it has called forth the initiative and energies which have led to ever-higher levels of productive output in this country. It is a capitalistic system, but it differs from most other capitalistic systems in its genius for bringing its benefits to the many rather than the few. It serves equitably and well the owners, workers, and consumers, at all levels and in all segments of the economy. In the process of doing this, it serves, as no other system can, the welfare of the Nation as a whole. Technical experience and know-how in the industrial field is private property and, in the case of many enterprises, is an integral part of the industrial process with which it is linked and can be effectively em- ployed only as an adjunct to the private capital which brought it into being. Some types of industrial knowledge, however, can be used separately and are for sale on a compensable basis. The United States Government should not provide technical as- sistance for the development of specific industrial enterprises in other countries, whether publicly or privately owned. The great need today is not for the United States Government to provide underdeveloped countries with assitance for industrial development purposes. It is, rather, for the creation in these countries of political and economic conditions conducive to the attraction of private investment capital, both domestic and foreign. Our Government should make it clear that no United States public funds will be made available for economic development projects abroad which, under proper conditions, could be financed by private capital. However, in the case of foreign projects deemed directly essential to our national security, which will not be financed by private capital because of unfavorable investment climates or other hazards, the United States Government may find it necessary to provide funds specifically for such projects. TECHNICAL ASSISTANCE PROGRAMS 237 Official representatives of our Government in foreign countries and those representing this country in the United Nations and its agencies should continuously stress the advantages accruing from the system of free, private, competitive enterprise as we know it in this country, and the part it can play in promoting economic development of under- developed countries. As indicated, the council emphasizes that the technical assistance provided by the United States Government to other free nations should be concentrated in and confined to those areas of activity in which our Government has had long experience and is competent-health, sani- tation, education, public administration, and agricultural techniques. Thus, the technical assistance so provided will act as an encourage- ment, rather than a deterrent, to the economic development appro- priate to private enterprise. In this way the public resources made available by our Government can and will make the most solid con- tribution to the development of economies abroad which will con- tribute to the security and well-being of the peoples of these countries and those of other free nations. Senator AIKEN. Thank you, Mr. Loree. Any questions, Senator Green? ILLUSTRATIONS OF ACTIVITY FOR PRIVATE ENTERPRISE Senator GREEN. Mr. Loree, you referred to the fact that certain activity should be left to private enterprise as distinguished from public. Mr. LOREE. Yes, sir. Senator GREEN. I am asking you to be more specific in stating posi- tively rather than negatively what should be left to private enterprise. Mr. LOREE. All those industrial developments which are not in those fields in which we feel that Government is competent. Take the United Fruit Co.'s business, the growth of bananas, and steel business, and oil business, and things of that nature. Senator GREEN You mean, the Government is helping them? Mr. LOREE. The Government has been helping develop steel plants. Senator GREEN. In what way? Mr. LOREE. In Brazil, it lent the money. Senator GREEN. How much? Mr. LOREE. I can't tell you offhand just how much, but several million dollars. Senator AIKEN. That has been done through the Export-Import Bank, rather than through the technical assistance program; hasn't it? Mr. LOREE. That is right, but it is still United States Government money. Senator GREEN. Give us some other illustrations. Mr. LOREE. As you know, there have been some loans to India for rehabilitation of railroads, and for electrical development, fertilizer plants. Senator GREEN. I think it is wise to get on the record some illus- tration of what you think should be left to private enterprise. Mr. LOREE. Well, I think, generally speaking, all those things that don't fall in the categories that we have mentioned in which our Gov- ernment and other governments have shown competence, that is, sani- 59637-55-16 i 238 TECHNICAL ASSISTANCE PROGRAMS tation and health and public administration and education and agri- cultural techniques. Senator GREEN. Thank you. Senator AIKEN. Senator Mansfield. USE OF EXPORT-IMPORT BANK FUNDS Senator MANSFIELD. Mr. Loree, do you favor the use of Export- Import Bank funds for the development of steel mills in Brazil and other industries in other countries? Mr. LOREE. I think the council feels that there is grave question about the use of Government moneys in any direction, in any form, and from any source, for the development of such industries. Senator MANSFIELD. I note in your testimony that you state that: The council is strongly opposed to the diversion of public funds provided for technical assistance to the direct promotion of industrial development of under- developed countries. It holds that industrial development can best be achieved through private investment, which not only provides the capital required for such development but carries with it the managerial and technical skills essential to the productive application of the capital invested. Let me ask you this: Is private capital willing to invest in the under- developed areas of the world? Mr. LOREE. Yes, I think they are perfectly willing, providing a proper climate is there and the countries indicate they want it and will treat it fairly. INDUCING PRIVATE INVESTMENTS ABROAD Senator MANSFIELD. I suppose you are aware of the fact that under the Mutual Security Act certain guaranties are provided for the pur- pose of inducing and encouraging American private capital to invest in foreign countries with the least possible loss. Do you approve of that particular provision? Mr. LOREE. Well, I think in principle the council is against all ques- tion of Government guaranty. I do know that members of the coun- cil have taken advantage of that provision where certain hazards have been present, and where our country's interests have been indicated, and they have gone ahead with their private investment. I am thinking in one instance of the Otis Elevator Co., which in Germany has put up a plant with such a guaranty and, if I am not mistaken, that was done with not only the consent but the urging of our Government-and there I believe they have taken the guaranty. Senator MANSFIELD. Mr. Loree, some of us on this committee would like to see more private capital invested abroad, but unfortunately there doesn't seem to be the urge on the part of the private-capital people themselves to invest their funds abroad, unless and this is on the basis of testimony which has been presented to the committee in previous years-the Government would in some way guarantee the funds so invested. Mr. LOREE. Well, I think, Senator, there is a grave question in some of our minds as to how rapidly in some of these undeveloped coun- tries capital can be put in profitably and soundly, to the advantage of these countries, whether you do it by Government or whether you do it by private industry. TECHNICAL ASSISTANCE PROGRAMS 239 As Senator Aiken knows, the agricultural development in these countries does not support the extra population that we do in this country. And in some of these countries that have gone ahead with industrial development, they are actually in need of those essential things, having diverted more of their population from agriculture than they ought to have. Senator MANSFIELD. Let's take a look at the other side. You have countries in the southern and southeastern parts of Asia, where we have been told and I believe truthfully-the average span of life is 28 to 31 years, where people do not get enough to eat, where they live in hovels, where they have no security, and nothing in the way of a future. We think it is a good idea to export our know-how through such people as county agents so that they can produce more per acre, and at the same time produce better crops, better types of grain, and so forth. However, that population is going to continue to increase. Where are those people going to find jobs if they don't find them in industry, because the land is very likely overpopulated at the present time? Now, this committee's assignment, as I understand it, is to look at the point IV program, which you have indicated would cover such things as health, sanitation, education, public administration, and agricultural techniques. I can assume that on the basis of that part of your testimony, which was repeated in the beginning and at the end, that you would be in favor of a continuation of the point IV program under the original aspects laid down for such program. Mr. LOREE. That is right, sir. Senator MANSFIELD. That is all, Mr. Chairman. CREATING FAVORABLE CONDITIONS FOR PRIVATE INVESTMENTS ABROAD Senator AIKEN. Mr. Loree, you stated that--and I quote your state- ment- *** it is rather for the creation in these countries of political and economic conditions conducive to the attraction of private-investment capital, both do- mestic and foreign. Do you think the United States Government could or should under- take to create in these countries political and economic conditions conducive to the attraction of private-investment capital? Mr. LOREE. Yes, sir. Senator AIKEN. And how would they do it? Mr. LOREE. I think by treaties. Senator AIKEN. Could we create such political and economic condi- tions in those countries by the same methods? Mr. LOREE. That is right; those kinds of conditions that would attract private capital. Senator AIKEN. Does your organization believe that technical as- sistance is beneficial to foreign trade? Mr. LOREE. Yes, sir; if confined to those things which make for a fundamental condition in the country which will attract private capi- tal. Take Canada, for instance, which has such a climate. Our pri- vate investments in Canada from this country are very large, and are growing very rapidly. 240 TECHNICAL ASSISTANCE PROGRAMS Senator AIKEN. But if technical assistance is beneficial to foreign countries, will technical assistance in the realm of industry and pro- ductivity in those countries be stimulated by foreign trade also? Mr. LOREE. No, sir. I think that Government intervention in the field of industrial development has a deterrent effect, inasmuch as everybody then becomes fearful that their Government is going to do it all, and there is no use of their going in and having their plants taken from them and having competition from Government sources. Senator AIKEN. However, isn't it true that whatever improves the purchasing power of particular foreign countries would naturally stimulate foreign trade? Mr. LOREE. Yes; that is certainly so. But certainly it isn't done as well by government, or it hasn't got the same background-I mean, to really develop industry properly abroad or here, you will have to be sure that it is economically sound and that it will continue to throw off a profit and be of real value to the community in which it is. Now, I think this climate that we talk about is essential not only for foreign capital but for local capital. There are many countries where, as you know, the local funds all go into land and are not used for industrial development. Senator AIKEN. Land and diamonds Mr. LOREE. That is right. Senator AIKEN. And a few other items which are not in general circulation. Mr. LOREE. That is right. Senator AIKEN. Are there any other questions? (No response.) Senator AIKEN. We thank you for your statement, Mr. Loree. It is only by getting the opinion of all groups that this committee can reach logical conclusions as to what we can do in the future on this program, and we are very happy to have your viewpoint presented to us this morning. Mr. LOREE. Thank you very much. Senator AIKEN. Mr. Dean Rusk, president of the Rockefeller Foundation. STATEMENT OF DEAN RUSK, PRESIDENT, THE ROCKEFELLER FOUNDATION, NEW YORK, N. Y. Senator AIKEN. Mr. Rusk, we are very glad to have you with us. Mr. RUSK. Thank you. Mr. Chairman and gentlemen, my name is Dean Rusk. For the past 3 years I have been president of the Rockefeller Foundation in New York. It is a privilege to respond to your invitation to comment upon technical assistance in relation to the work of the Rockefeller Foun- dation abroad. A philanthropy committed by its charter to the pro- motion of "the well-being of mankind throughout the world" is deeply interested in narrowing the gap between man's knowledge and the application of such knowledge to the advancement of his well- being. A second major interest has been the expansion of the reservoir of knowledge itself, both for its own sake and to maintain the intel- lectual capital from which man might draw to meet his needs. If TECHNICAL ASSISTANCE PROGRAMS 241 Z there is anything in our experience accumulated through more than four decades of effort in more than 80 countries and territories out- side the United States which can be helpful or of interest to others, we are glad to share it. Although my remarks are those of a responsible officer of the foun- dation, they do not necessarily represent a single corporate view; other trustees and officers might well emphasize other points. Only in the broadest sense can I hope to reflect a consensus of my associates. Further, with the committee's permission, I should like to confine my remarks largely to the activities of the foundation and lessons which we think we have learned from them. I do not feel qualified to offer a considered evaluation of the technical-assistance program of the Government, and it would be of doubtful propriety for me, representing a tax-exempt organization, to testify for or against any specific legislation which might be before you. Since its founding, in 1913, the Rockefeller Foundation has spent about a third, or approximately $160 million, of its funds abroad. A substantial portion of this amount was in support of work which is similar in important respects to the technical-assistance programs of our own and other governments and of international agencies. Never- theless, there are important differences. An endowed philanthropy, nongovernmental and nonpolitical in character, has special oppor- tunities as well as limitations. Its funds are comparatively small, but it can commit them over a long period of time. It can use its funds with great flexibility to follow promising leads or to meet unexpected difficulties. It can employ trial and error and can accept occasional failures in the interest of important successes. It can support its technical assistance with basic research, either by its own staff and laboratories or through grants to other research institutions. It can offer long-term career opportunities for men who need time to com- bine professional or technical expertness with an understanding knowledge of a foreign environment. It can enter sensitive areas with a minimum of political complication. It can elicit a high degree of cooperation because it seeks no quid pro quo. TECHNICAL ASSISTANCE ACTIVITIES OF FOUNDATION Time allows me to do no more than identify in this statement our present activities of a technical-assistance nature. In outline, we call attention to: (1) A substantial agricultural program aimed at the increased production of basic food crops in Latin America; our principal cen- ters of activity are located in Mexico and Colombia, where we work closely with the Ministries of Agriculture; the more important aspects of the program are now being extended into a few other countries of the hemisphere, with steadily increasing exchanges of information and plant materials with other regions of the world. (2) The initial phase of a fundamental research program on rice, as a possible major contribution to the food potentialities of the rice- eating countries of Asia. (3) Support as opportunity offers for investigations in less conven- tional fields where significant advances might open the way to a more abundant livelihood for man. Examples: marine biology, photo- 242 TECHNICAL ASSISTANCE PROGRAMS synthesis, the physics and chemistry of clouds, and we have under consideration certain proposals in the field of solar energy. (4) The strengthening of medical and public-health training at key institutions which are capable of setting high standards in their own regions and can give advanced training in close relation to the medical and health problems of the region concerned. (5) An active virus research program on lesser-known insect-borne viruses, with its center in the foundation's own laboratory in New York and with field laboratories established in cooperation with local authorities in Trinidad, South Africa, India, Brazil, and California. (6) Underlying all activities related to health and food, extensive support for pure research at the outermost reaches of human knowl- edge in the life sciences. (7) Support for area studies in the United States and for American studies abroad, as a means of increasing understanding and communi- cation across cultural barriers. Examples: Near Eastern studies at Princeton, Southeast Asian studies at Cornell, Far Eastern studies at the University of Washington and Columbia; American studies in Turkey, Japan, Austria, and England. (8) Support for studies of the population problem in the United States, India, Japan, and Formosa. (9) An advanced fellowship program, approximately 250 per year, to enable highly promising scientists and scholars who have completed their formal training to leave their posts for a year or two of further study to fit them for roles in leadership in cooperating institutions or in our own programs. (10) A diversified program of training grants, travel grants, and modest grants in aid for professional advancement-tailored to the needs of the individual case. (11) Technical publications arising from agricultural and virus work of interest to other workers in the field, both here and abroad. OPERATING PRINCIPLES EVOLVED FROM FOUNDATION'S EXPERIENCES It might interest the committee for me to attempt to summarize certain operating principles, or rules of thumb, which have evolved from our experience an experience which has had successes inter- mingled with failures. These operating principles may or may not be applicable to Government programs, but I believe that some of them are. If the summary seems categorical, it is for brevity's sake; each working principle is subject to exceptions and modifications in actual operation. (1) Technical assistance requires time if it is to have a lasting effect; it may require modest and cautious beginnings; willingness to persist for a considerable period is an important element in the initial decision to undertake a technical-assistance task. It required 21 years of interest in yellow fever before a satisfactory vaccine was developed; our agricultural program in Mexico is 12 years old and continues to grow in significance. (2) Technical assistance makes great demands upon the personnel who are to work at it; this means careful selection, stability of appoint- ment, strong backing in the face of discouragement and disappoint- ment, and time to enable such personnel to combine technical expert- 1 TECHNICAL ASSISTANCE PROGRAMS 243 ness with deep and sensitive knowledge of the local situation, includ- ing the local language. (3) Plans for entering upon a technical-assistance task should in- clude plans for withdrawing from it; this means the training of local personnel for the assumption of responsibility, the enlistment of the local authorities and population in serious support of the task, and an emphasis upon working with and not for those receiving technical assistance. (4) Techniques familiar in a technically advanced country must be adapted to the capacities, needs, and cultural environment of the lesser developed country. (5) It is extremely difficult to advance through technical assistance on a narrow front. Health, education, and economic production move together. (6) At crucial points, further advances in technical assistance will require fundamental work in the laboratory; the first answer to yellow fever proved to be wrong; pests developed immunity to DDT; an agri- cultural program involves an endless battle between science and new varieties of pests and diseases. (7) Technical assistance can be effective only where there is a strong local desire to receive it and make use of it. A lack of interest is a more serious obstacle than active opposition, because it results in wasted effort. (8) Technical assistance should be directed toward programs which are within the prospective economic capacity of an underdeveloped country to absorb. Since there are almost unlimited opportunities for effective work within this limitation, there is no need to risk waste through programs beyond the ability of the receiving economy to sustain. (9) The emphasis in technical assistance should be upon quality; if that is achieved, quantity can follow; without first-class perform- ance, an attempt at quantity is likely to fail. (10) Emphasis upon the training of personnel for giving and re- ceiving technical assistance suggests that colleges and universities can play a key role; cooperative relationships between universities of the sending and receiving countries have opened up techniques of great promise. (11) Both sides can learn through technical assistance; the effort pays dividends in the enrichment of American life and culture. (12) Technical assistance results in enduring good will where it is allowed to develop as a spontaneous byproduct; disinterested tech- nical assistance is easier to execute and more satisfying to both sides in the longer run. FOUNDATION-GOVERNMENTAL RELATIONS IN TECHNICAL ASSISTANCE A final comment, Mr. Chairman, about the relation between the work of the Rockefeller Foundation and governmental technical- assistance programs. We are independent but cooperative. Our offi- cers traveling or stationed abroad consult informally with technical- assistance personnel. In order to make sure limited funds count for as much as possible, we take into account in our own planning what is being done by governments and international organizations. 244 TECHNICAL ASSISTANCE PROGRAMS On occasion we get suggestions from official sources about the par- ticular needs or opportunities which might be of interest to us. We cooperate closely with departments of government, both here and abroad, in technical fields such as public health and agriculture. For example, we participate with the Department of Agriculture in its world wheat and corn collections. We keep in touch with interna- tional organizations in the technical-assistance field, lend personnel to them from time to time, and on occasion make them grants. In all of these matters we recognize broad common purposes which make collaboration easy. We would strongly advise against any attempt to coordinate private activity with official programs. Governmental technical assistance has an important function, but so does private effort, whether busi- ness, education, voluntary associations, or foundations. The very diversity of approach and technique is a great asset to the total effort and far overshadows the possibility of waste or overlap. We believe that the public policy which leaves a maximum of free enterprise to nongovernmental effort is soundly based. Thank you, Mr. Chairman. Senator AIKEN. Thank you, Mr. Rusk. Senator Green. Senator GREEN. Let me congratulate you on this very succinct state- ment of your purpose. Mr. RUSK. Thank you. BOTH SIDES CAN LEARN THROUGH TECHNICAL ASSISTANCE Senator GREEN. There are two items which I hope you will amplify for my particular use, and that is No. 11: Both sides can learn through technical assistance; the effort pays dividends in the enrichment of American life and culture. Mr. RUSK. Senator Green, that encompasses a very wide range of possibilities. Surely the economic side, for example, if we and the Mexicans can move together in the fight against wheat rust we our- selves gain tremendously, because prevailing winds in a certain period of the year blow their wheat rust to us, and then we return it to them through prevailing winds in another season, and it would be to the benefit of both countries if we can jointly reduce the impact of rust on wheat. In the medical field, we could not have hoped to succeed in removing the threat of yellow fever in our own country without the participation of literally tens of thousands of individuals, including many scientists in other countries working with us during that period and working in our own laboratories. Futhermore, as Americans, in contact with countries of radically different cultures, whether Indonesia, India, Japan, or wherever, our people bring back with them an understanding of different culture which is rare in this country. If I may digress just a moment, in a purely personal capacity, when I was on active duty in World War II, I was serving in military intel- ligence for a period in Washington, which had particularly to do with countries which had a quite different culture pattern, and it was inter- esting to discover how few people in this country had any understand- ing or did at that time of such places as the Pacific Islands, Burma, TECHNICAL ASSISTANCE PROGRAMS 245 T Indochina, or even India. It was difficult to find more than three people who had any real understanding of Burma. Technical as- sistance, among other things, is bringing Americans into contact with those other countries. When Mr. Walter Gropius, the architect, went to Japan for a visit. under the auspices of the International House in Tokyo, he not only stimulated the Japanese there to a deeper appreciation of their own architectural contributions, but he came back and passed the word around among his own fellow architects that they had a great deal to learn from Japan. And the arts in Indochina, the arts in India, those are some of the things which travel as byproducts of technical assistance. BOUNDARIES OF PRIVATE AND GOVERNMENT TECHNICAL ASSISTANCE Senator GREEN. I think it is very desirable to get these things on the record, because they have a stronger appeal to the American public than other items. The other question I would like to ask is this. In your last para- graph you speak of governmental technical assistance and private activity. How would you yourself define the boundaries? Mr. RUSK. Senator, I am not sure that there is a precise boundary line, because Government is able to do in one way or another most of the things that an organization like a private foundation can do. For example, we ordinarily suppose that Government does not get into pure research, as have the foundations. But Government is beginning to support pure research. We are inclined to believe that the role of the private foundation in technical assistance is best ex- pressed in terms of the training of people, of individuals, where they can be carefully selected and worked with closely during their period of training, followed up after they return to their posts back home, and given continual encouragement through training and travel oppor- tunities, perhaps pieces of equipment, and technical advice on a fol- lowup basis later. We are inclined to think that when long-range commitments are involved that the procedures of the governments themselves impede a long-range commitment, that foundations might well undertake those things which are likely to require a long-range commitment to be made in advance. But I would find it difficult to draw an exact line between the two types of activity. Senator GREEN. I notice the distinction; it seems to be almost an argument against Government interference. Mr. Rusk. It was not so intended, sir. Senator GREEN. But nevertheless you do state those, and Congress has to draft legislation, and somehow or other exactly or broadly define the boundaries. I wondered if you had any helpful suggestions. Mr. RUSK. Senator, it would be a little difficult for me to make sug- gestions about legislation, or the drawing of that boundary. Senator GREEN. It is difficult for us to do it without that. Mr. RUSK. As a tax-exempt organization we are expected not to get into such matters. That is our problem. And we have not given that serious attention. 246 TECHNICAL ASSISTANCE PROGRAMS Senator GREEN. Why not volunteer the facts that we ask for? Mr. Rusk. Really, sir, I have to say that my colleagues and I have not taken this point up for consideration. We keep in touch with the technical assistance programs, but we really haven't given much thought to the dividing line. Senator GREEN. If your colleagues have given it consideration, let us have the benefit of your conclusions. Mr. Rusă. Senator, I would prefer not to, because the Congress expects us not to associate ourselves with specific legislation. Senator GREEN. I am only asking you to develop further the points you have already made. You yourself said you made it very succinct. You could elaborate them. Mr. RUSK. May I give that some thought, and if we can be further helpful in any way, we will be glad to do so. Senator GREEN. We will appreciate it. Mr. RUSK. Thank you, sir. Senator AIKEN. Senator Mansfield? Senator MANSFIELD. Mr. Rusk, it is always a pleasure to have you before this committee. We remember your outstanding work as Assist- ant Secretary of State, and we are delighted that you are before us this morning. I want to say that this is one of the best statements I have ever read on the role of technical assistance. I think that your organiza- tion, the Rockefeller Foundation, was in many respects the precursor of the technical assistance program which found its beginning in Latin America. If my memory serves me correctly, the Rockefeller Foundation has been working in Latin America in agriculture, health, and other projects for many decades now. If my memory is still correct, I believe it was the Rockefeller Foundation which was re- sponsible for eradicating yellow fever from the port of Guayaquil in Ecuador at a time when it was quite dangerous for shipping to go there on account of the possibility of contamination. I have no questions to ask. But I want to say again that this is an excellent statement, and we are happy to have you before this com- mittee today. Mr. Rusk. Thank you, Senator. PRIVATE ORGANIZATIONS' PART IN SUPPLEMENTING GOVERNMENT PROGRAM Senator AIKEN. Do you feel that a large part of our technical- assistance work can be done through foundations and corporations in the foreign field? Mr. RUSK. The foundations whose charters permit them to operate abroad, I feel certain, are likely to want to do so. The principal problem is whether their total effort can be large enough to be of significance at the rate at which you gentlemen would like to see it move. There are so many needs, and a private foundation's funds, even though they seem to be large when we state them, are so small in relation to the total need that I would not suppose that we could substitute for the work that international organizations or official technical-assistance programs are undertaking. We do believe that we can supplement, and that we can on our own initiative and with our own exploration of possibilities, do impor- tant work in addition to what might be done by official organizations. TECHNICAL ASSISTANCE PROGRAMS 247 APPLYING RESULTS OF RESEARCH Senator AIKEN. In your research work in other countries have you learned things which are of great value to the people of those coun- tries, and also the people of our own country. What methods do you have of applying your findings in those foreign countries? How do you get the results of your research to the people of those countries? Mr. Rusk. After about 6 or 8 years of effort in intensive research and training of agricultural personnel in Mexico it began to be clear that we had succeeded in developing important new varieties of corn and wheat well adapted to the Mexican situation and resistant to the particular attacks made upon such plants in that country. The present President of Mexico and his Minister of Agriculture have undertaken an emergency extension program. Mexico organized both a corn commission and a wheat commission, and has undertaken a rural educational program to present these materials and possibili- ties to the farmers in the hope that the farmers will take them up and plant them and get the benefits from them. The education is required, because as you know, just a superior seed will not do the job. The farmer has to know how to plant it and how to treat it in order to get the benefit of the higher yield. So that often the local govern- ment itself undertakes the task of spreading benefit through their own effort. We have a publication program by which we try to pass this information around. We sometimes supply seed material to the technical-assistance programs, or to international organizations who are interested in the work. And, of course, in the case of yellow fever, we made many millions of doses of the vaccine widely available for distribution where there seemed to be a threat of yellow-fever infec- tion. But there are a variety of ways, and we do believe that an organiza- tion like ours, which is directed to the well-being of mankind, recog- nizes a pressure to keep the possibility of practical benefit in the front of our minds. We recently, for example, cooperated with the Central American Governments who, on a cooperative basis, have asked for help from the Mexican and Colombian agricultural programs. And so there they have set up a cooperative agency through which this work can be extended further. Senator AIKEN. In the case of Mexico you have a more advanced government and more advanced country than some of the countries in which we operate technical assistance programs. In the case of Mexico, the government itself can get the beneficial results of your research work to the people. In some of the other countries, however, should not there be a high degree of cooperation between our own technical assistance programs and your foundation in carrying the results of your research to the people there in such manner that it can be applied? Mr. RUSK. I am sure that is an important thing for us to keep in mind, particularly in the new rice research program into which we are now embarking. We have Dr. William Bradfield, of Cornell, a dis- tinguished plant scientist, who is now in Southeast Asia setting up that program. If gains are made, those can be passed along through any agency, including our own technical assistance agency, who might be able to take advantage of it. 248 TECHNICAL ASSISTANCE PROGRAMS C RESULTS OF PROGRAM IN EXPANDING TRADE Senator AIKEN. We have in our own country very practical, hard- headed business people who want to know what this kind of work means to them. Do you have anything, as a measuring stick, which will show to what extent trade between the underdeveloped countries and our own country has been expanded as a result of the type of work that the Rockefeller Foundation or the Government has been doing there? Mr. RUSK. No, Senator, I don't have statistical materials or in- formation bearing directly upon that point. I think that it is pretty clear, however, that as the health, the educational, and economic pro- ductivity of a country rise, it becomes a better supplier of raw ma- terial, a better customer for manufactured products. Senator AIKEN. You are sure in your own mind, however, that these programs do result in expanded business relations between the United States and the countries where you have carried on this work? Mr. RUSK. I have no doubt about it, but as a byproduct. As a mat- ter of fact, on a modest scale, Senator, the Rockefeller Foundation is one of the major purchasers from American industry of all sorts of things for these technical assistance programs. WORK OF FOUNDATION IN CHINA Senator AIKEN. The Rockefeller Foundation did considerable work in China at one time, didn't it? Mr. Rusk. Yes, it did, before the Communists took over. Senator AIKEN. I know in your statement that you point out that the technical assistance training results in increased goodwill. What has happened to the goodwill with the Chinese? Were you invited to stay there, or what happened? Mr. Rusk. No, sir, we were not invited to remain in China after the Communists took over. Many years ago the Rockefeller Founda- tion established the China Medical Board as a totally independent organization, and gave it separate endowment. We have followed its work with interest since then. When the Communists came in they, of course, took over the Peiping Union Medical College, which was the center of that medical work in China. The foreigners were driven out. The local Chinese professional personnel were put through the usual brainwashing operation, and it became quite clear that the new authorities in Peiping were making strenuous effort to eradicate any remnant of good will which was left toward our foundation in the Peiping Medical College. They came forward with most absurd charges of malpractice and abuse of human beings in experimentation and things of that sort, trying to discredit all this organization had been doing for more than 30 years in China. Senator AIKEN. I suppose that it takes an exception to prove all the rules. Mr. RUSK. I am sure that even the goodwill of technical assistance can be overwhelmed by events of that magnitude. PROJECTING PROGRAM INTO FUTURE Senator AIKEN. I notice what you said about the private founda- tion being able to project their work sometimes into the future. Do TECHNICAL ASSISTANCE PROGRAMS 249 you think the work of the technical assistance program, the point IV program, would be improved if our country could also project that work a considerable distance into the future with a reasonable degree of permanency? Mr. RUSK. I am inclined to think, Senator, that if there can be an element of stability it would help, primarily because it would make it possible to recruit highly qualified personnel and put them into a foreign environment and let them become familiar with it, and give you time to train local personnel to take over that work when we are no longer able to support it. Further, in certain instances, for example, in agricultural research— research planning is usefully worked out on a long-term basis. It takes several years to work out the cross-hybridization of various plants, and sometimes the answers are just hard to get, and it takes stubborn and persistent effort. Senator AIKEN. Any questions? Thank you very much. Mr. RUSK. Thank you, Mr. Chairman. Senator AIKEN. The next witness is John C. Lynn, of the American Farm Bureau Federation. STATEMENT OF JOHN C. LYNN, LEGISLATIVE DIRECTOR, AMERICAN FARM BUREAU FEDERATION Mr. LYNN. Thank you, Mr. Chairman. The American Farm Bureau Federation appreciates this opportunity to discuss with this committee the technical assistance program and its relation to the foreign policy of the United States. Farm Bureau is a family organization, financed by membership dues on a voluntary basis without a checkoff. It is an independent, nongovernmental organization of farmers, by farmers, and for farm- ers. It was organized to provide a means whereby farmers can work together and speak with a united voice on the problems which affect them, either as farmers or citizens. At the close of our last fiscal year, November 30, 1954, we had 1,609,461 paid-up member families in 48 States and Puerto Rico. The American Farm Bureau Federation has had a long continuing interest in technical assistance and related programs. We recognize full well that there are forces at work in the world today that make it necessary for the United States to take positive action in order that we may maintain our freedom and perpetuate and promote the freedoms of other nations. The security of America and that of the rest of the free world are inseparable and require building up the collective strength of the free nations through mutual coperation. The challenge to America is to exert the necessary leadership for successfully directing its capabilities to the maintenance of freedom and peace. The United States must demonstrate to the world that a dynamic, expanding, competitive capitalism is a major factor contributing to the more abundant life that people everywhere are seeking. For an economy to be dynamic and expanding, goods and capital must flow freely. This requires world trade and world invest- ment, with governments encouraging private investment and stimu- lating trade as an outlet for the increasing productivity of the world's 250 TECHNICAL ASSISTANCE PROGRAMS farms and factories. This approach requires systematic abandonment of policies directed toward restriction of the production and distribu- tion of goods and services throughout the world. AID SHOULD BE IN THREE DISTINCT PROGRAMS We believe that United States aid for mutual security should be divided into three separate and distinct programs-military aid, economic aid, and technical assistance-each with its own appropria- tion. This will make it possible to expand or diminish any one of these programs without disrupting the others. It has been especially difficult for us to distinguish between eco- nomic aid and technical assistance. I might add parenthetically here, Mr. Chairman, that there has been some progress made in recent budgetary years toward getting this distinction more clear. We believe that these programs should be specifically separated out as far as the budget is concerned so that each program could be analyzed from a budgetary point of view. When we have made suggestions that one or more of these programs should be curtailed, the adminis- trative agencies of Government usually attempt to show how each of the programs is interrelated in such a manner that makes it difficult to reduce one without affecting another. We believe that in some instances the technical assistance program has been used to further expanded economic grant aid. Quoted be- low is our resolution dealing with economic aid. Economic aid should be replaced as rapidly as possible by the expansion of mutually profitable trade. To the extent that economic aid is required, much greater emphasis should be placed on economic development of underdeveloped areas. Economic aid and technical assistance of underdeveloped areas are essential instruments for the expansion of the world economy. Some grants may be justified; however, a great proportion of the economic aid can and should be in the form of self-liquidating investments. EMPHASIS ON TRADE AND DEVELOPING NATURAL RESOURCES We have spent tremendous sums since the end of World War II in the form of grants, primarily monetary grants. No doubt a great deal of good has come from these programs, however, we believe that more lasting good would have been done if greater emphasis had been placed on the expansion of mutually profitable trade and more development of natural resources in the underdeveloped areas. Most countries would prefer to have aid in the form of loans, repayable to the United States over a long peroid of time, either in the form of dollars or strategic materials. Quoted below is our 1955 policy dealing with technical assistance. We favor the continuation and improvement of the technical-assistance pro- gram as an important part of our foreign policy. This program should be de- signed to offer friendly nations technical training and demonstrational services. It should not be another program for the extension of economic grant aid. Technical assistance should be offered to underdeveloped countries to help them increase their production and purchasing power and thereby become par- ticipants in an expanding free-world economy. "Greater emphasis should be given to the development of resources and industries, particularly those which complement the economies of other nations, instead of giving primary emphasis to agricultural development." TECHNICAL ASSISTANCE PROGRAMS 251 As stated before, we favor the technical-assistance program, how- ever, we believe that the amount of money used in this program has been excessive and that in some instances it has been used as another form of economic monetary aid. This program should be designed to offer underdeveloped friendly nations technical training and demon- strational services and should not be another program for the exten- sion of economic or monetary grant aid. We should take a new look at the United States foreign economic policy. The technical-assistance program, which is a part of this policy, should be designed and oriented to take into consideration the real needs of the countries and their relationship to other countries. In our technical-assistance program up to date, the major emphasis has been given to increasing agricultural production. This may have. been a sound approach in some instances, however, we believe that greater emphasis should have been given to the development of re- sources and industries that will more rapidly raise the income and standards of living of the people involved. In many of the so-called underdeveloped areas, particularly in the Far East, it is estimated that about 85 percent of the population are in agriculture. Certainly, these people need more food, however, one of the problems facing many countries is the unemployment in agriculture. In some cases it is estimated that the gross per capita income for the people in agriculture is less than $36 annually, while in nonagricultural pur- suits it is slightly less than $100 annually. Certainly, if we are to pro- mote the economic development of many of these countries, it will be necessary to develop industries that will help to relieve the popula- tion pressure on the land and develop fuller employment, leading to a higher standard of living. REDUCED APPROPRIATIONS We recognize that this committee is not directly concerned with the level of appropriations for the technical-assistance program. How- ever, we wish to state that we believe that if the technical-assistance program is designed to be one of "know-how" and "show-how" and not one for further expansion of economic grant aid, that the dollar appropriation for the United States technical-assistance program could be reduced. There is ample opportunity under the Agricultural Trade Development Act (Public Law 480) for the United States to have available local currencies for which many of these projects can be financed, and we believe, to a much greater advantage, than is done in many instances throughout the world. The next two paragraphs are quoted from our resolution. The United Nations is a force for world peace. Though it has failed to solve some problems, it has succeeded in solving others. Where there is discussion, there is hope. We favor continued financial support of the United Nations and its specialized agencies. However, we insist that these funds be allocated to the specialized agencies in a manner similar to that now being used— and when I say now being used, used in fiscal 1954– and that the funds and program be administered on a decentralized basis. We oppose centralizing the use and administration of funds for specialized agencies in the United Nations. That is quoted from our resolution. 252 TECHNICAL ASSISTANCE PROGRAMS FOOD AND AGRICULTURE ORGANIZATION OF U. N. The United Nations and its specialized agencies have been carry- ing on the technical-assistance program for a great many years. We would like to comment briefly with regard to the technical-assistance program as it relates to the Food and Agricultural Organization of the United Nations. We know of some of the work of FAO in the tech- nical-assistance field, and dollar for dollar expended, FOA is per- haps getting a better job done than is the United States technical- assistance program. The Food and Agriculture Organization has a regular budget of about $6 million, of which the United States contributes about $1.6 million. The authorization for FAO is fixed by Congress at $2 mil- lion. We believe consideration should be given to increasing this authorization. In recent years the FAO has been carrying on what is commonly referred to as the expanded technical assistance program. The United States contribution to this expanded program is about $16 million annually. This represents about 56 percent of the total program. There has been a recent move to centralize the allocation and use of these funds in the United Nations. We believe that FAO is more familiar with the needs for technical assistance in agriculture and that this program should be directed and the funds allocated by FAO, with sufficient coordination between agencies to avoid duplication of effort. We recommend that the Congress indicate clearly its desires in connection with the expanded technical assistance program and that the money appropriate by the United States for this purpose be distributed to the specialized agencies on approximately the same basis as for calendar year 1954 and prior years. We believe it is sound policy for the Congress to indicate its desires with regard to the expenditure of these funds. Over the long period we believe it wise to consider a gradual reduc- tion of funds for the so-called expanded technical assistance program in FAO and a gradual increase in the regular funds available for FAO. This would give other nations an opportunoity for further participation in the expanded program and would permit better planning and administration. We recommend that Congress give consideration to this matter. FARM BUREAU PROJECTS IN TECHNICAL ASSISTANCE The American Farm Bureau Federation has been active in the technical assistance program for many years. During the last 5 years we have sponsored some 500 young farmers for on-the-farm training in the United States for periods ranging from 6 months to a year, whereby they have received technical training in American agricul- ture. We also sponsor many individually and specialized adult groups to study agriculture and cooperative marketing. Only recently the Farm Bureau formalized an agreement with the Foreign Operations Administration whereby we have agreed to pro- vide administrative supervision and work experience for 600 young farmers between ages of 18 and 26 over the next 2-year period. Some 36 countries have indicated an interest in this program; and by the TECHNICAL ASSISTANCE PROGRAMS 253 first of April 1955 we will have placed on farms in some 25 States 165 of these young farmers, who will live with farm families and gain experience, not only in American agricultural techniques but in the American way of life. These young men live in the home of the farm operator and are encouraged to participate in all of the community activities. We believes this program offers a great opportunity for Farm Bureau to participate in the technical assistance program. We plan a fallowup program for 2 years after these young men return to their respective countries in order to be of maximum assistance to them in putting into practice some of the things they have learned while in America. The AFBF-FOA contract provides for the payment to American Farm Bureau of a maximum of $400 per trainee per year. This is to be used to pay the cost of transportation and travel expenses in the United States and for health, accident, and liability insurance on the trainee. It will also be used to effect portions of the direct and indirect costs of personnel, materials, supplies, postage, telephone, telegraph, office space, and so forth. Of this, $165 per trainee per year goes to the participating State farm bureau for the same purposes. We estimate our direct and indirect costs, including the States, will average approximately $650 per trainee per year. During the approximate 11 months the trainees will be on the farm in this country, the farmer-sponsor will pay him $50 per month as well as providing training, board, lodging, and laundry. The trainee is expected to provide adequate work to compensate the farmer. How- ever, each trainee is to have ample opportunity to participate in com- munity affairs, including farm organization meetings, young people's meetings, extension programs, vocational agriculture, 4-H, civic and political meetings, social functions, church and church affairs, and so forth. The idea is to give him a real taste of farm home and com- munity life in the United States. The farmer-sponsor is to pay the American Farm Bureau Federa- tion $20 a month for each month he has a trainee also. During the 2 years of the AFBF-FOA contract this is to be placed in a reserve fund to create a revolving fund for continuing the program after the con- tract is concluded. Selection of the trainees is made by recognized farm organizations in the trainee's home country where there are such organizations and by FOA missions where there are none. Last year Farm Bureau sponsored a 30-day visit of young people to Europe. In January 1955 a group of Farm Bureau leaders left for New Zealand and Australia to study for 6 weeks the agriculture in these countries. They will make short visits to other countries in this area. For the past 2 years we have sponsored a 30-day visit for some 40 Australian farmers to the United States. They visit several States and live with a farm family. Another group will arrive in the United States in April this year. We believe all these programs are worthwhile and contribute greatly to better understanding between nations. We believe nongovern- mental organizations can do a great deal in the technical-assistance field and we shall continue to encourage this activity in Farm Bureau. 59637-55-17 254 TECHNICAL ASSISTANCE PROGRAMS We hope the administrative agencies of Government will encourage more nongovernmental organizations to participate in this type of activity. CAUTION ON OVEREXPENDITURE OF FUNDS We appreciate this opportunity to present our views, and in sum- mary would like to say that we feel that the technical assistance pro- gram is a worthwhile part of the United States foreign economic policy. However, we would caution that an overexpenditure of funds in this program may not be in the best long-time interest of the United States. These programs should be based on the willingness of the participating country to make a contribution, just as our States and counties make a contribution in both money and manpower in the grant-in-aid agricultural research and extension programs. The tech- nical assistance program should be separated from economic grant aid. Perhaps monetary aid will be necessary in some instance to carry out an effective technical assistance program, however, we believe that it should be separately accounted for and clearly shown in the budget. Let's avoid centralization of authority in the hands of the United Nations Secretariat for allocating funds for the FAO expanded tech- nical assistance program. We believe that the Food and Agriculture Organization is quite competent to deal with this matter, and based on the record, will do a better job in the utilization of funds available than if this program is centralized in the United Nation Secretariat. Private organizations can make a real contribution in this field and such activity should be encouraged. Thank you very much, Mr. Chairman. Senator AIKEN. Thank you, Mr. Lynn. Senator Green? SPREAD OF IDEAS Senator GREEN. Thank you for a very interesting presentation. There is one question I would like to ask. In one place you referred to the free countries of the world, I think. And then you spoke later about some 36 countries sending their men here. Are those limited to free countries? Mr. LYNN. That is right. Senator GREEN. Now, in the distribution of human knowledge and know-how, can we limit the spread of these ideas to other countries? Mr. LYNN. Maybe we should get clear our definition of a free coun- try. The free world, that is that part of the world not behind the Iron Curtain, including Red China. Senator GREEN. That is what I assumed you meant. But how can you prevent the spread of ideas, especially scientific discoveries, how can you limit that to any particular part of the world? Mr. LYNN. Senator Green, we wouldn't want to do that. It just so happens that in the agreement with Foreign Operations Adminis- tration we had to limit this to countries in which the Foreign Opera- tions Administration has a program. I agree perfectly with what you say-certainly Poland and Czechoslovakia, and certainly many of these countries behind the Iron Curtain, could gain a great deal, and we would be most happy to include those countries in our program, TECHNICAL ASSISTANCE PROGRAMS 255 particularly the young farmers, if it were possible. It is quite diffi- cult, as you know. Senator GREEN. But it seems to me that the objective is to do mis- sionary work, if you could, by getting the men from those countries over here and showing them what we do, and spreading our ideas. That would help, would it not? Mr. LYNN. Yes. Senator GREEN. Thank you. That is all. Senator AIKEN. Senator Mansfield? APPROPRIATIONS MADE DIRECT TO AGENCIES Senator MANSFIELD. Mr. Lynn, you stated in your testimony that you advocated—or the Farm Bureau advocated-appropriations be- ing made direct to the United Nations specialized agencies. Would you carry that parallel further and also advocate appropriations di- rectly to the United States Government agencies such as the Depart- ment of Agriculture for agricultural activities to be carried on under the technical-assistance program? Mr. LYNN. I am not sure I understand you, Senator Mansfield. Let me make sure that I do. Are you saying that perhaps the Depart- ment of Agriculture should carry on some of the Senator MANSFIELD. No; I am saying that you said, as I under- stood you, that the Farm Bureau would recommend contributions directly to the United Nations specialized agencies such as the Food and Agricultural Organization. Mr. LYNN. That is right. Senator MANSFIELD. I am asking, then, if in line with that partic- ular reasoning, the Farm Bureau would advocate appropriations di- rectly to the United States Department of Agriculture for the carry- ing on of agricultural activities under the technical-assistance pro- gram-in other words, have the Department displace FOA as the supervising agency? Mr. LYNN. I thought that is what you meant, sir. We believe that it is necessary, if we are going to be successful in the bilateral technical- assistance program, to have some coordinating agency. However, I believe if we go back 4 or 5 years at the beginning of the technical- assistance program, it may be that the Agriculture Department, the Foreign Agricultural Service, is perhaps in as good a position as any Government agency we have to carry on the real technical know-how and show-how in the agricultural technical assistance field. We don't have a specific position on this point, Senator Mansfield, but I am sure that it would be pretty well in line with our policies. ADMINISTRATION OF PROGRAM Senator MANSFIELD. Now, you state on page 2 of your statement: We believe that United States aid for mutual security should be divided into three separate and distinct programs-military aid, economic aid, and technical assistance each with its own appropriation. Do I understand you correctly that what you advocate is the setting up of 3 agencies to administer 3 types of aid? Mr. LYNN. No, sir. I think if we go back 3 or 4 years, Senator assistance program, it may be that the Agriculture Department, the 256 TECHNICAL ASSISTANCE PROGRAMS field the appropriation was in the neighborhood of $200 million, I think that we will find that a great portion of that money was spent, not for technical assistance, as we understand it, the know-how and show-how, but was spent for economic aid. As I have stated before, some progress has been made with admin- istrative agencies of Government in getting it separated out. But we firmly believe if it is for the technical-assistance program, as we understand it should be, that $100 million or $105 million that is cur- rently being spent in this field may be too much money. And we have some pretty good information that still we are using a great part of this, a lot of this money, for economic grant aid. Now, it may be necessary to have some of that. But we think that the technicians out in India or Pakistan ought to make a request for such monetary grants as they need to carry on their demonstrational work, whatever it is, in those countries. Senator MANSFIELD. Mr. Chairman, I should like to request that Mr. Lynn furnish us with that information such as he says he has of any funds to be used for technical-assistance programs in the form of economic grants. Will you do that? Mr. LYNN. Yes, sir; we will try. (The information requested is as follows:) The American Farm Bureau Federation believes that the technical-assistance program is a program of know-how and show-how which would parallel the agricultural extension program in the United States. Therefore, with the defi- nition of technical assistance as we understand it, it is quite obvious that the amount of money that has been appropriated by Congress-and in most cases spent by the administrative agencies of Government-is far in excess of the need for a technical-assistance program based on know-how and show-how. following approximate appropriations have been made for the technical-assist- ance program: 1951-52-$237,500,000 1952-53-$202,778,250 1953-54 $105,000,000 The The appropriation for the Federal Extension Service for fiscal 1956 is in the neighborhood of $49 million. When we add to that the State and local monetary appropriations to the Extension Service, we find that the agricultural extension program, including Federal, State and local, amounts to about $100 million annually. Some 12,500 people are employed in the extension program. It is quite obvious to us that in light of these facts and with the number of em- ployees in the technical-assistance program, that it would not be possible to spend the amount of money that has been spent if this program was being car- ried on as a "know how-show how" program such as our Federal, State, and local agricultural extension program. We estimate for example that in 1951-52 fiscal year that out of the $237,500,000 appropriated that as much as 50 percent or more was used for economic aid. This may have been spent for such items as dredging equipment, pumps, seed, fertilizer, machine tools and many other items which the Congress and the ad- ministrative agencies may have intended to include as part of the technical-as- sistance program. However, our point that we have attempted to present dur- ing the past 3 years is that these facilities enumerated above, and others, either in the form of money or material, is economic aid and should be clearly shown as economic aid. PROVIDING WORK EXPERIENCE Senator MANSFIELD. I note also, Mr. Lynn, that on page 6 of your statement you mention the fact that: The Farm Bureau formalized an agreement with the Foreign Operations Ad- ministration whereby we have ageed to provide administrative supervision and work experience for 600 young farmers between the ages of 18 and 26 over the next 2-year period. TECHNICAL ASSISTANCE PROGRAMS 257 Is that correct? Mr. LYNN. That is right. Senator MANSFIELD. That seems to me to be a very sound principle. I wonder, have any agreements been reached between the FOA and the National Grange and Farmers Union to do the same type of work? Mr. LYNN. Not to my knowledge, sir. I think the other farm organizations are cooperating in placing some of these individuals in the Government program, but to my knowledge there is not a formal agreement. APPROPRIATIONS TO SPECIALIZED AGENCIES Senator AIKEN. Mr. Lynn, you suggested that it might be better for the United States to make appropriations directly to the FAO. Wouldn't that perhaps lead to considerable pressure from the other specialized agencies which will try to get the larger share of the total appropriations for themselves? Mr. LYNN. Certainly there must be 2 sides, but, I am sure you are aware of the recent move on the part of the Economic and Social Council of the United Nations, and others, to have these funds central- ized in the United Nations, and some other people, other than the Director General of FAO and all of his advisers, would decide what countries should have an expanded technical-assistance program in agriculture. We submit, sir, that we don't believe in that, we believe in decentral- ization wherever possible. And we believe in, and have great confi- dence in, Vincent Cardon and his staff. We think perhaps they know better how to utilize this money than someone perhaps less familiar with it in the United Nations. As we stated here, Senator Aiken, we think that the amount of money to this expanded technical assistance program should be grad- ually reduced. Senator AIKEN. You mean the FAO technical assistance program, or the United States technical assistance program? Mr. LYNN. I am talking about the United Nations, FAO, and the expanded technical assistance program, where the $16 million is being spent now. Senator AIKEN. We will have to get those alphabetical designa- tions a little more distinct. Mr. LYNN. The Food and Agricultural Organization. Senator AIKEN. You do not advocate increasing our assistance to the FAO technical assistance program in a ratio greater than the other participating nations can keep up; do you? Mr. LYNN. No; I would not. Senator AIKEN. They are already doing that to some extent. Mr. LYNN. We are paying about 56 percent of the bill for the ex- panded technical assistance program in FAO. And in the regular budget that Congress appropriates for FAO is about $1,600,000 for their regular program, which includes a great deal of technical as- sistance. And we think it might be wise, looking to the future, to reduce this $16 million, and at the same time remove the $2 million ceiling that is now being placed on the budget for FAO as far as the United States contribution is concerned, and gradually increase it up, not to replace the $16 million, not that high, but to put it on a more 258 TECHNICAL ASSISTANCE PROGRAMS permanent basis, because this expanded technical assistance program is a year-to-year proposition now. We don't get the most benefit out of these programs, because you can't plan in advance. EXCHANGE OF FARMERS WITH RUSSIA Senator AIKEN. One last question. You pointed out very accu- rately, I believe, the great benefits which are derived by foreign coun- tries, and by our own country, from the exchange of young people for certain periods of the year. You probably noticed that some time ago an Iowa newspaper in a semiserious manner suggested that one solution to our problem and the problems of Russia would be to have Russian farmers visit Iowa farms. If you read the papers this morning you learned that Russia ac- cepted this invitation in full seriousness, and has suggested that they would like to send delegations of their farmers to Iowa-and I pre- sume also to other parts of the United States-to see the way we run our farms. In exchange they would invite delegations of farmers from the United States to visit Russia. Now, I don't suppose that the farm delegations of the United States could visit any country in the world without learning something they didn't know before. Mr. LYNN. I am sure that would be helpful. Senator AIKEN. Do you favor the exchange of farm people with Russia, or do you think the Farm Bureau would favor that sugges- tion at this time? Mr. LYNN. I presume that Farm Bureau would be willing to co- operate in such a project. Senator AIKEN. And do you think the delegation of farm people would be very happy to visit Russia to see how farming operations are conducted over there? Mr. LYNN. I don't know whether you would have as many volun- teers as you might think for a trip, but I am sure that there would be outstanding farmers who would want to see how farmers are doing in Russia. Senator AIKEN. Senator Hickenlooper, any questions of Mr. Lynn? Senator HICKENLOOPER. No, nothing in addition to what has been covered. Senator AIKEN. If not, the next witness will be John A. Baker, representing National Farmers Union. STATEMENT OF JOHN A. BAKER, NATIONAL FARMERS UNION Mr. BAKER. Mr. Chairman and members of the committee, for the record, I am John A. Baker, assistant to the president, National Far- mers Union, for legislative services and research. National Farmers Union is a member of the International Federa- tion of Agricultural Producers, an organization made up of national farm organizations of various countries of the free world. James G. Patton, president of National Farmers Union, is a member of the executive committee of that organization. IFAP, for all of its 10 years, has taken an active interest in improved farm life and increased consumer purchasing power throughout the free world. For many years, Mr. Patton has, also, been a member of the public advisory boards of Economic Cooperation Administration, Mutual TECHNICAL ASSISTANCE PROGRAMS 259 २ Security Administration, and Foreign Operations Administration. Mr. Patton served as a United States delegate to all of the early meetings leading up to the establishment of Food and Agriculture Organization and of the United Nations and has served as a delegate to many of their meetings. I have here, Mr. Chairman, a list of these missions that Mr. Patton has undertaken as president of the National Farmers Union, and with your permission I will submit them for the record. Senator AIKEN. That will be included as part of your testimony. (The list referred to follows:) Public boards to which Mr. James G. Patton, president, National Farmers Union, has been appointed and on which he served: National Advisory Board, National Youth Administration. President Roosevelt appointed. Economic Stabilization Board. Appointed by President Roosevelt. Adviser, United States Delegation, Second Inter-American Conference on Agri- culture, Mexico City, 1942. Appointed by President Roosevelt and Secretary of State. Public Advisory Board, Office of War Mobilization and Reconversion. Appointed by President Roosevelt, confirmed by United States Senate. Adviser to United States Delegation, Inter-American Conference on War and Peace (Chapultepec Conference), Mexico City, March 1945. Appointed by President Roosevelt and Secretary of State. Consultant, United States Delegation, United Nations Conference on Interna- tional Organization, founding meeting of United Nations, San Francisco, 1945. Appointed by President Roosevelt and Secretary of State. Adviser Delegation, United States, founding meeting Food and Agriculture Or- ganization, Quebec, Canada, October 1945. Appointed by President Truman and Secretary of State. Adviser, United States Delegation, FAO, Copenhagen, Denmark, 1946; Geneva, Switzerland, 1947; 1948-50, Washington, D. C.; 1951, Rome, Italy. Appointed by President Truman and Secretary of State. 1948: Public Advisory Board, Economic Cooperation Administration, and later Mutual Security Administration. Appointed by President Truman, confirmed by United States Senate. Member, National Security Resources Board. Appointed by President Truman. Member, Mobilization Policy Board. Charles E. Wilson, Chairman. Appointed by President Truman. Public Advisory Board, Foreign Operations Administration. Appointed by President Eisenhower, 1953. Still serving. All of these positions were cleared for handling security information. In 1941, a member of the Committee To Defend America by Aiding the Allies; chairman, William Allen White. This committee was fought as a war device by Communists and isolationists-Russia was an ally of Germany at that time. The records show that Mr. Patton strongly supported Marshall plan and U. N. action in stopping aggression in Korea. INTEREST IN TECHNICAL ASSISTANCE AND ECONOMIC DEVELOPMENT Mr. BAKER. As a result of this intimate participation in these pro- grams, Mr. Patton and National Farmers Union have gained and maintained an active and informed interest in both United States and U. N. programs of technical assistance and economic development. State and National officials and staff members of Farmers Union have played active roles in the development and conduct of our Nation's programs of technical assistance and foreign economic development. Our participation in these affairs has been grounded upon the direct and manifest interest in them on the part of Farmers Union members and farmers generally, both as citizens and farmers. 260 TECHNICAL ASSISTANCE PROGRAMS f Farmers' basic interest in foreign affairs, economic and political, is grounded upon their deep-seated desire for peace. Farmers are convinced that a permanent peace will be easier of attainment in a world where living standards are rising, where economic growth rather than stagnation gives a basis for hope to replace the feeling of hopelessness generated by generations of chronic poverty. Farmers everywhere, including American farmers, also deeply feel the Biblical injunction to "Love thy neighbor." American farmers want farmers all over the world and people generally to enjoy and to be able to earn a better life and better living. Moreover, American farmers know that they themselves can earn better livings if people in other nations can earn the purchasing power required to buy the commodities we produce. And it is good sense for us to buy from other nations the things they can produce to better advantage than we can. Farmers in America are benefited by eco- nomic growth in other democratic nations as well as in our own. For those reasons, National Farmers Union has strongly supported all United States efforts to promote, encourage, facilitate, and assist economic development and growth in the democratic nations of the world. We have said that we are convinced that these aims could best be attained by the early establishment of a Democratic World Economic Union, composed of nations that would subscribe to the kinds of demo- cratic rights and privileges set forth in the United States Constitution and Bill of Rights. Such an economic union of democratic nations, we feel, could develop and operate the economic development and trade promotion programs that would contribute most to a rapid in- tegration and growth of free world economies. The details of this proposal are spelled out in one of the supplementary statements that we shall file with your committee. UTILIZING AGENCIES OF UNITED NATIONS Until such time as a Democratic World Economic Union can be established and put into operation, we are convinced that the policies of the United States, operating through foreign economic agencies and the United Nations and the specialized agencies, such as Food and Agriculture Organization, should be adapted to coincide as nearly as possible with the kind of economic program for the free world that would be developed if such an economic union were in existence. That is to say, we feel that the largest possible proportion of our foreign economic programs should be implemented through agencies of the United Nations. Further, we are convinced that those parts of these programs that cannot under current conditions be best admin- istered through the United Nations should be carried out as fully as possible through the voluntary private foreign relief organizations such as CARE, registered for that purpose with Foreign Operations Administration. This has two advantages, we feel. First, it helps overcome the appearance, as well as the actuality, of economic imperialism. Sec- ond, we are convinced that we can be more fully assured that the people in other nations who need our economic help most will be more likely to receive it if such programs are administered through private TECHNICAL ASSISTANCE PROGRAMS 261 relief organizations rather than by government to government pro- cedures. With respect to the technical-assistance program of the United Nations, we want to urge using it to the maximum. However, we would suggest that your committee look into a proposition that has come to our attention that may be detracting from the great potential usefulness of the U. N. technical-assistance program. There are some indications that the U. N. technical-assistance pro- gram in nations formerly within the so-called British sphere of in- fluence are currently being dominated by the British foreign office through U. N. personnel. We do not know whether this situation now exists. We merely suggest that your committee look into the matter. I would like to depart very briefly from the prepared statement to say that we are interested in this proposal for a special United Nations fund for economic development, sometimes called SUNFED, which has been before the United Nations since May 1951. By grant SUNFED would supplement local funds and various types of loans for basic public works, power and transportation facilities, health and school personnel, training, building and other services, the prime essentials for economic and social devolepment. I have not had an opportunity personally to study all the details of this SUNFED proposal. However, it is the type of thing which we feel the United States should be doing more of. FAMILY FARMING In closing this brief summary statement, we would like to invite the attention of the committee members to an article in the February issue of Harpers magazine entitled "Why Communism May Fail." The essence of the article is that the Soviet system is most likely to break up because it refuses to recognize the facts of life about family farming. This fact provides a great challenge to America, both domestically and in our foreign economic programs. To quote the author of the article: nam. Perhaps the most dangerous enemy of comunism is the stoic, passive peasant in Eastern Germany, Poland, the Soviet Union itself, China, and Northern Viet- The passive figure of the peasant, trapped in totalitarism, is joined as a potential mortal enemy of communism by the farmers of the free world- notably in the underdeveloped areas and perhaps most notably, at the moment, by the awakening of the Indian peasant. This challenge has been the basis of the deep interest and strong efforts of Mr. Patton and National Farmers Union to insist that a central part of United States foreign economic programs should be to promote agricultural land reform in all its phases, secure land tenure, adequate farm-income programs, development of farmers' purchasing, marketing, and service cooperatives, adequate family farm credit facilities, organization and growth of free farm organi- zations, and the like. The desire of the agricultural producers of the world to become substantial family farmers with secure tenure and decent incomes can be a strong moving force for expansion of democracy and the basis for a secure peace. We feel that agricultural land reform has never been given the important place it deserves in our foreign policy. Further, we feel . t 262 TECHNICAL ASSISTANCE PROGRAMS that emphasis upon it has been reduced markedly in the last 2 years or so. We look on this lessening of emphasis upon agricultural land reform as an adverse and dangerous development in United States foreign economic policy. We urge your committee to make a special study of this matter to determine the extent to which adequate emphasis is being given to the promising avenues of approach to this problem of giving farmers a strong stake in their land and their national survival. If time permitted, we could multiply the examples where successful United States assisted agricultural land reforms have had most de- sirable results-to mention a few: South Korea, Japan, Iran, the Philippines. We think it tragic that the United States has blundered in its approach to this in Egypt. We were deeply concerned that world reaction to the firing of the United States agricultural attaché to Japan, who was so vitally as- sociated with the MacArthur land reform in Japan would be inter- preted as a turning away by our Government from agricultural land reform. Mr. Chairman, we appreciate having had this opportunity to put our views before you on this vital subject. I have brought along several attachments that express our thinking in greater detail than has been possible in this brief statement. I request your permission. to insert them at this point in my testimony. Senator AIKEN. The attachments will be reviewed by the staff and, if there is no objection, will be inserted as a part of your testimony. (The material referred to is on file with the Foreign Relations Committee. Excerpts follow :) FOREIGN ECONOMIC OPERATIONS OF UNITED STATES GOVERNMENT IN FAR AND MIDDLE EAST A report by John A. Baker, legislative secretary, December 23, 1952, to President James G. Patton and the executive board of National Farmers Union During October, November, and December, I made a quick trip to 11 countries of the Far and Middle East. My major purpose was to examine as fully as time permitted the situation in each country with respect to such agrarian institu- tions as farm credit, farm organizations, land-renting arrangements, land sur- vey and title registration, farm marketing and pricing systems, and farmer co- operative enterprises; to survey United States and local governmental efforts to bring about needed reforms; and to make recommendations suggested by my observations that might result in speeding up the implementation of such land reforms. I took advantage of the opportunity afforded by the trip to make, as well, a quick survey of how well present United States foreign economic policies seem to be working out, and the manner in which such programs are being administered by United States personnel in the countries visited. I visited Japan, Taiwan (Formosa), Philippines, Hong Kong, the Associated States of Indochina (Vietnam, Cambodia, and Laos), Thailand (Siam), Pakis- tan, Iraq, and Egypt. Everyone I contacted gave me an unusual opportunity to get firsthand information in each of these countries. I talked with United States Ambassadors, MSA officials and their staff people, top government officials of each of the countries, and private citizens and legislators who are leaders in economic development and land-reform movements. * * * * THE BASIC SITUATION In all of the countries I visited, with the partial exception of Japan, and in some ways, Egypt, there is widespread poverty, hopelessness, and unrest of almost unbelievable intensity. A few illustrative facts will demonstrate. The typical Egyptian or Iraqian farming family of 7 tries to exist throughout the TECHNICAL ASSISTANCE PROGRAMS 263 year on an income of approximately equivalent to less than $100. Try to imagine how you, individually, would struggle through 1953 without savings, with few assets, and an income of only $14, and you can get some idea of the situation. Ninety percent or more of the farm people in Iraq and Egypt have never been to school and can neither read nor write. In the Far East countries, most young people have had at least 2 years of schooling. Another statistic: Of every 1,000 babies that are born in Egypt and Iraq, 600 die before they are 5 years old. Life expectancy varies from 29 to 39 years for men and only slightly higher for women. Poverty is much worse in most ways in Iraq and Egypt than in the far-eastern countries I visited. Very inefficient production methods characterize farming activities and most commercial, industrial, and engineering enterprises. There is generally a very low level of resource development. All of this is locked into place by political, social, and economic institutions that discourage, and largely block, progress of any kind. This is a situation repugnant alike to humanitarian moral principles and to the enlightened best interest of the people of the United States in a world threatened by Russian imperialistic totalitarian materialism of a type older than the pyramids which, nevertheless, dresses up its shams in the language of hope, faith, and evangelism backed by the dreadful strength of an atomic stockpile and the threat of a third world war. THE $64 QUESTION I started my journey with a question ringing in my ears. It had been asked in various forms by countless Farmers Union members and Congressmen: Can the United States lead the democratic nations along paths that will persuade the rest of the world of the wonder-working powers of our belief in individual human dignity and democratic, rather than totalitarian, philosophies of Govern- ment, and thereby eliminate, or reduce, the threat of a third world war, or at worst, be prepared to win it, if it comes? This report is, in essence, the partial answer to that question suggested by firsthand observations and discussions in the countries I visited. The tentative answer I think I found is "Yes, if we go about it intelligently, but so far, we aren't doing nearly as well as we should be able to do." This report is in two parts. The first part is concerned in listing, rather tersely, some 19 general observations concerning United States efforts in the field of international economic and social development. The second part is a country-by-country brief of the progress being made toward needed land reforms. SUGGESTED IMPROVEMENTS IN POINT IV ACTIVITY The United States has over the past several years attempted to find a part of the answer to the $64 question through various point IV programs of eco- nomic and technical assistance to other nations, both through agencies of the United Nations and regional groupings of nations and through direct assistance, nation to nation. A firsthand examination of the results of such efforts in several underdeveloped nations of the Far and Middle East suggest a need for the following improve- ments in our foreign economic operations: 1. The United States has been, and is, working against itself in major ways while temporarily buying time with point IV projects. Examples: Iranian oil dispute; Arabian refugees from Palestine; failure to somehow provide a market for Egyptian cotton, Ceylon rubber, and a more permanent market for Japanese and German manufactured products; specific embargoes against imports of dairy products; the indignity of immigration barriers based on race, religion, and nationality. 2. The United States must recognize, and make clear to other nations, that the common defense against imperialistic communism requires the development in every free nation of a reliable modern defense force capable of repelling aggression and prepared to act in concert with defense forces of other non-Com- munist nations to bring the aggressors to trial before world opinion. This includes the acceptance by the United States of the major financial burden for the acquisition and maintenance of military hardware in most nations outside of Europe. United States foreign economic programs must be geared to this reality. 3. The United States should do everything it can immediately to bring about the establishment of a Democratic World Economic Union, coupled with a 264 TECHNICAL ASSISTANCE PROGRAMS much broader and stronger moral, diplomatic, and financial support of the United Nations and its specialized agencies such as Food and Agriculture Or- ganization, International Bank, International Labor Organization, and World Health Organization, and of various international regional groupings. 4. There is need for a much greater recognition than now exists in United States policy, that a great deal more than just the dispatch of a couple score of Johnny Appleseeds (technical assistants) to a foreign shore is required to do the job of giving some measure of hope for improving conditions to the restless poverty-stricken of the world, particularly in light of the need for build- ing in all of these nations an adequate defense military force. Export of technical know-how falls short in at least two important ways. 5. Almost exclusive emphasis upon improved technology and better produc- tion methods has given a false impression of excessive materialism on the part of the United States as well as being self-defeating, because people will not adopt better methods if the unchanged institutional structure takes the gains away. To correct this, improvement of institutions should be given equal priority with improved techniques. Social ends, human dignity, must have equal billing with better breeds of hogs and the like, if we are to win the struggle for the hearts and minds of mankind. This means lobbying, in the best sense, as well as education. 6. In the underdeveloped countries which I studied, poverty, squalor, illiteracy, and hopelessness are so intense and so firmly encrusted by governmental and private traditions, customs, habits, laws, class structures, inertia, and other institutions, that only the dynamite of dramatic resource development and wider foreign-trade outlets (or of revolution) can blow the society off dead center. This means economic investment in addition to technical assistance. 7. Too much emphasis has been placed, in the point IV program, on the na- tional self-sufficiency of each nation through industrialization, and too little upon the development of favorable trade outlets for such raw materials and manufactured products as these nations can produce at a comparative advan- tage. For example, there appears to be no reason why Taiwan (Formosa) should try to become self-sufficient in sugar, nitroglycerin, or fertilizers, to name a few. 8. Too little recognition of the need for institutional change has often re- sulted in too little attention to the persuasive or lobbying side of United States foreign economic operations. For example, United States fertilizer, irrigation pumps, and cloth-distribution programs have too often resulted in financing a perpetuation of usurious credit arrangements, exploitative landlord-tenant rela- tionships, and monopolistic middleman syndicates. It has been demonstrated, for example, that the Philippine sharecropper actually loses money by buying MSA fertilizer. 9. For the foreseeable future, it is the opinion of this observer that the foreign economic programs of the United States Government should be cen- tralized into a single agency outside the State Department with a head of Cabinet rank. These activities must be freed from the month-to-month, as well as the day-to-day, detailed control of political desks in the State Department. 10. All of the personnel of the United States Government engaged in foreign economic operations should be on the payroll of that independent agency and should be incorporated into a foreign economic career service similar to the for- eign (diplomatic) career service, and the domestic civil service. At present, it is possible for the TCA mission in a country to be made up of, and resemble, a loose collection of 45 separate Washington and stateside United States agencies and departments on whose payrolls the personnel is carried. The bureaucratic jealousies and suspicions thus engendered render coordinated work practically impossible. 11. The "cooperation through organization" approach, such as that utilized by the Joint Commission on Rural Reconstruction in Taiwan (Formosa), the "servicios" of the Institute of Inter-American Affairs in Latin America, the structure used by New Korea Co. in United States military government of South Korea, and similar approaches used by the American International Asso- ciation in Venezuela and Brazil, appears to be a great deal more effective than the participation by hourly or daily renewed invitation, as practiced in most of our foreign economic missions, as a means of getting an underdeveloped economy and society off dead center. The essence of cooperation through organization is that, upon the basis of initial invitation and governmental-level negotiation, one or more new institu- tions are established in the country to be assisted. This new institution, farm TECHNICAL ASSISTANCE PROGRAMS 265 credit agency, development board, or whatever, is not a part of either government exclusively, but a part of both. United States and other government personnel are integrated into a single joint administrative structure instead of being lo- cated "across town" from each other in separate autonomous groups, cooperating, if at all, on a tenuous day-to-day basis across sovereign national boundaries. 12. Many of the desirable resource-development projects needed to put real life into the point IV program, could be wholly or partially self-liquidating if the funds could be advanced at low rates of interest and repayments could be made in local currency rather than in dollars. 13. Too much emphasis has been and is being placed upon the balance of trade of a nation as a criterion of the need for the extension of United States economic cooperation. In Egypt and Thailand, for example, the potential value of these countries as national demonstrations of the value of the point IV approach to other nations in the Arab bloc and in southeast Asia, respectively, should out- weigh considerations of trade-balance position. Whatever favorable balances, as such, underdeveloped countries might temporarily have in the foreseeable future, could be very easily wiped out if the nation chose to use some of its funds to finance government services to only slightly raise the currently very low level of living of their own populations. 14. Pending the working out of broader trade possibilities involved in im- proved production efficiency in European and other manufacturing industries, and of greater emphasis upon merchandising products for sale in United States markets, the United States should explore the feasibility of making raw material purchases, such as cotton in Egypt and rubber in Ceylon, at higher than the world price, for stockpiling and for sale at something less than the world price to other countries of the free world who need and can make use of the material in the joint cooperative effort. 15. The National Security Council, or a replacement agency of similar type, should be greatly strengthened so that it can more adequately coordinate and integrate all United States efforts of overseas areas. This agency should be sup- plied with a public advisory committee, with an augmented secretariat, and with powers of enforcement. 16. The country directors of United States foreign economic missions should be advanced to a grade more nearly commensurate with the importance of their responsibilities. A new grade, equal to that of ambassador but differently desig- nated, should be established for this purpose. 17. Diplomatic and reporting personnel of the regular State Department estab- lishment should not be assigned the additional and secondary duty of foreign- economic operations. To do so, disrupts and weakens both types of work. 18. A few cleverly designed sets of comic cartoon strips, depicting better poul- try selection, better hog management, or a better farm credit system in the local environment, such as I saw in MSA Information Division in Saigon, Vietnam, is worth a great deal more in effectiveness and good will than a million dollars worth of English-language libraries and picture displays of the Empire State Building with three Cadillacs and a Chrysler parked in front, as can be seen in the United States Information Service show windows over the world. LAND-REFORM PROGRESS All around the world, the United States Government is making an effort to encourage various national governments to improve the opportunities of the cul- tivators of the soil and other agricultural producers. This includes such meas- ures as the organization and development of farmers' cooperatives; improvements of farm landlord-tenant relationships; greatly increasing the opportunity of land- less cultivators to become farm owners; improvement of land survey and title- registration laws and administration; encouraging the development of strong independent private farm organizations; instituting equitable taxation of farm- ers; and improving marketing and farm product and supply pricing systems. This activity was supposed to have been given a place of top priority in the United States foreign policy soon after the organization of what was called the Interagency Committee on (International) Land Reform. The major impetus to the movement came from the farm organizations, the land-grant colleges, and specifically from top officials of the United States Department of Agriculture. State Department went along, with lots of foot dragging. They never enthusi- astically accepted the idea or gave it much real push. The State Department public-relations people were particularly scared of the possibility that too much interest on the part of State Department might cause the Secretary of State and 266 TECHNICAL ASSISTANCE PROGRAMS other Department officials to be dragged before Congress as agrarian reformers, which could be then interpreted as softness toward communism. This understandable myopia failed to see that the most militantly anti-Com- munist move that State Department could make would be to give restless, poverty- stricken people a new feeling of hope, some glimmer of a chance to extricate themselves from a debilitating institutional framework without having to resort to the freedom-killing expedient of taking part in Communist-led revolutions. Regardless of this fact, however, the State Department never went the last mile beyond lip service and resolutions support. Security classification of the cables involved precludes the documentation of this statement. Within this framework of not going too far, State Department has done many effective things to en- courage land reform such as the Land Reform Institute at the University of Wisconsin in the fall of 1951, and the sponsoring and support of land-reform resolutions before the United Nations. Mutual Security Administration, however, acted immediately and positively. A full-time staff on land reform was added to the MSA Washington office. A land-reform staff, prepared to assist governments in improving agrarian institu- tions, was added to each country mission where unmet land-reform needs were prevalent. Bureau of Land Management of the Department of Interior alerted its overseas personnel in various TCA missions to look for land-reform possibilities and to be prepared to render aid, where requested. Office of Foreign Agricultural Relations overseas employees embraced the con- cept of land reform with great gusto and have done what they could within the handicaps of the administrative structure of TCA. Not only did Mutual Security Administration give top billing to land reform in terms of policy emphasis and assignment of staff, they also have called in a suc- cession of outsiders to examine land-reform activities in different countries, and to recommend still further improvements. In this connection, I was given an opportunity, in company with Dr. V. Webster Johnson, MSA international land reform expert, and Dr. E. C. Johnson, Deputy Federal Land Bank Commissioner of Farm Credit Administration, to make a careful study of land-reform progress and problems in Taiwan (Formosa), Philip- pines, Vietnam (Indochina), and Thailand. On my own, I continued my study in Iraq and Egypt. At the beginning of our trip, we had an unusual opportunity to interview various Japanese Government officials concerning developments since the transfer of the ownership of rented Japanese farmland from landlords to tenants in the land reform ordered by the United States occupation forces prior to signing of the peace treaty. NATIONAL WORKSHOP ON WORLD ECONOMIC AND SOCIAL DEVELOPMENT, WASHINGTON, D. C. WORKING PAPER-PEACE, ABUNDANCE, DEMOCRACY John A. Baker, National Farmers Union * We urge establishment of an international food and raw-materials reserve to perform the following functions: (a) Prevent extreme price fluctuations in the international market for food and other raw material and encourage expanding production in order to meet the world's increasing foodstuff and other raw-material needs, both in terms of rais- ing existing per-person consumption and of future increased population ; (b) Maintain gainful employment not only in agricultural production, but also in those industries supplying agriculture and engaged in the processing and dis- tribution of agricultural products and other raw materials; (c) Absorb temporary market surpluses of food and other raw materials; (d) Prevent famine and starvation; and (e) Provide for a self-financing operation through the orderly international exchange of raw materials and through the development of an international pro- gram of loans for raw-material development, and for corollary economic development. TECHNICAL ASSISTANCE PROGRAMS 267 The under-developed countries may be divided into two classes, those which have large natural resources but small populations and those which have large populations in comparison with their resources of raw materials. The former are largely in Africa, the Middle East, and Latin America. The latter are largely in Asia. In the countries of small populations and large resources the problem is mainly one of securing outside capital for development, although there is also the prob- lem of raising the level of technical skills of the native population. It is, however, the problem of economic growth of heavily populated under- developed countries with relatively limited natural resources that is most difficult of solution. It is in these countries where will be found the vast number of underclothed and undernourished people who could, through economic de- velopment, earn the means of payment to absorb enormous quantities of food and fiber. These countries need technical assistance and capital if their standards of living and purchasing power are to be substantially raised. It is recognized that, in respect to both technical assistance and capital, agricultural develop- ment will receive important consideration, for agricultural development must go hand in hand with industrial development if the necessary expansion in con- sumer purchasing power is to be achieved. So far as technical assistance is concerned, some progress has already been made through international and national agencies; but much more needs to be done. The problem of capital for development is much more difficult but equally important in this class of country. All of the so-called surplus United States food and fiber production would be but a drop in the bucket, if the democratic nations should agree to use food to finance and make possible the complete elimination of illiteracy by means of nationwide systems of free public schools, including vocational education, for every child. The average per person real income in the United States is upwards of $1,900 per year. This level is approached only by such countries as Switzerland, Canada, Australia, New Zealand, and Sweden. Real income per person in Eng- land is half that of the United States; French per person income two-thirds that of England; and Italian is only two-thirds of French. United States.. England- $1,900 | France_ 950 Italy‒‒‒‒ $625 450 In most of the rest of the world, income and standards of living are very low, averaging $125 per person per year in South and Central America, $75 per person in Africa and Middle East, and $40 per person per year in Asiatic countries. The United States has 7 percent of the world's people, and 50 percent of the world's income. United States produces one-half of the world's radios, three- fourths of its telephones, four-fifths of its automobiles, one-half of the world's power. In all, United States produces each year 75 percent of the world's manu- factured products. Similar figures for the continents of the world are: Africa South America. Asia... Europe outside Russia.. U. S. S. R.………. Continent Percent of Percent of world's world's people income 8.8 2.6 4.5 7.8 53.9 2.0 16.6 16.5 8.1 1.4 If history teaches anything it is that situations of this kind cannot long endure. History has a way of removing barriers and evening off such extremes of economic opportunity. Usually this is brought about when the barbarians storm the walls of ancient Rome and burn and sack the city. This pulls down everybody to the lowest level. It behooves the United States and other industrialized nations to see that the evening-up comes about by expanding economic opportunities in other nations; not through forced reduction of standards in nations with higher incomes. About a third of the world's people live in the United States, Western Europe, and other democratic nations that are relatively well developed and have fairly 268 TECHNICAL ASSISTANCE PROGRAMS high incomes and living standards; another third live in countries behind the so-called Iron Curtain dominated by Soviet Russia and its policy state system of control. The remaining third of the world's people about 900 million of them-live in nations that have not yet made up their minds about democracy. These are the people of South and Central America, southeast Asia, Africa, and the Middle East. Here "stomach communism" holds out a glittering lure with its false promises of enough to eat. These nations have not attained the economic development and higher living standards easily possible with modern technology and organization. Extreme poverty is the rule. The United States must intensify its efforts to assist in the development of a coordinated program of aid to relieve hunger and suffering, and to promote expansion and strengthening of the national economies of the democratic nations in ways that will not destroy the principle of self-determination of peoples. The United States should help these nations to develop economic conditions that will: (a) Create an international community of economic effort for common purposes, avoiding the extremes of either forcing unwanted policies on others as a condition of our help, or of undertaking action ourselves in the absence of appropriate efforts in the countries that participate; (b) Promote material well-being and allow employment, production, trade, and investment in ways that will enrich human life and eliminate economic weaknesses that threaten political stability and inevitable totalitarian imperialism; (c) Afford all democratic nations increasing opportunities for economic growth and improving standards of living in ways which will operate so that economic gains are distributed equitably within countries; and (d) Attract peoples and governments toward the democratic system of political freedom. To attain these objectives we support continued international economic nego- tiation; increased United States contributions to the specialized agencies such as the Food and Agriculture Organization, and expansion of United States foreign economic assistance and of the program by which our advanced tech- nological knowledge is made available to other nations to assist them to increase- the efficiency of production and marketing and to improve their agricultural land tenure systems, eliminate colonialism, and reform their economic and social structures. The operations of an international food and raw materials reserve would generate the purchasing power and stabilize international markets in a manner that would greatly facilitate more rapid economic development in the free world. An international food and raw materials reserve would greatly strengthen the operations of our point IV laws. The mutual security authorization and appropriation acts provide a small amount of United States funds (about $1.5 billion) for loans and grants to other nations to facilitate economic development and expansion and a limited amount of funds (about $200 million) to send United States experts to foreign countries to provide technical assistance or know-how. This act expires June 30, 1955. The United States appropriations to FAO and other specialized U. N. agencies: and limited United States contribution to expanded technical assistance pro- gram of the United Nations and the appropriation was allowed to expire Janu- ary 15, 1955. This appropriation should, of course, be renewed. With an operating food and raw materials reserve, these funds would go a lot further because first they would be augmented by the loans available from sale of buffer stocks. The stabilized international markets would greatly reduce the risks of price fluctuations and thus raise expectations sufficiently to really speed up investment in resource development. The appropriations for this work have been greatly reduced since 1952. Civilian programs have been submerged and intermingled with large military aid programs. Emphasis has been centered on engineering and production techniques and largely shifted away from institutional reform, except that in 1954 the program to help develop labor unions in other countries was reactivated in the summer of 1954 after having been allowed to lapse for a year. TECHNICAL ASSISTANCE PROGRAMS 269 ་ འ་ Attention to organization and development of farmers' cooperatives and farm credit agencies has been continued but at a reduced scope. Work on land tenure improvement and setting up free private farm organizations has largely been curtailed or eliminated. Our Nation must recapture leadership in this vital field. We need to enlist the cooperation of other economically strong nations, preferably under auspices of international organizations. The proposed international food and raw materials reserve is a necessary supplement to the technical assistance programs of the United Nations, the World Bank, and other specialized agencies. Mr. BAKER. Thank you. I shall be most happy to attempt to answer any questions that the members of the committee may wish to ask me. Senator AIKEN. Senator Mansfield. Senator MANSFIELD. Mr. Baker, your testimony is most interesting. How long has the Farmers Union been an advocate of the point IV technical assistance program? Mr. BAKER. We were advocating a point IV type of activity in our farm policy long before the term "point IV" was invented. It dates well back before World War II, as a matter of fact, but with greater emphasis and more understanding, beginning in the middle years of World War II. Senator MANSFIELD. The Farmers Union is interested primarily in what is known as the family type of farm and farm family? Mr. BAKER. That is correct. Senator MANSFIELD. When I say "farm family," there is no family- sized farm family, but it is those types of people that are the main interest of the Farmers Union? Mr. BAKER. Yes. RELATION BETWEEN FOA AND FARMERS UNION Senator MANSFIELD. What relations exist between the FOA and the Farmers Union? I cite as an illustration a point brought out by the previous witness, Mr. Lynn, of the Farm Bureau, who said that an agreement has been formalized by means of which the Farm Bureau would bring in the country a certain number of young farmers, get them placed on farms, and let them get some idea as to how Ameri- can agriculture functions. Has there been a similar arrangement worked out or considered by the FOA and the Farmers' Union? Mr. BAKER. In the past year they have participated on a purely voluntary basis in this type of program through the agricultural producers, without a contract with the United States Government. As I understand it, the contract that you raised the question about is a contract with the Foreign Operations Administration- Senator MANSFIELD. Between the FOA and the Farm Bureau? Mr. BAKER. Yes. I don't remember the exact date, but some year and a half ago we made some exploratory contacts with the Foreign Operations Administration, when the announcement was made that most of this work was going to be done through contract through private organizations. We made some exploratory efforts for about 6 weeks, finding out what, if anything, we were qualified to do on a contract with FOA in connection with the farm assistance program. We have not as yet formalized any contracts of that type with them. 59-637-55-18 270 TECHNICAL ASSISTANCE PROGRAMS Senator MANSFIELD. Has the Farmers Union been responsible for the bringing over of any farmers from other parts of the world to this country? Mr. BAKER. Young farmers between 18 and 23; yes, sir-not in large numbers, not in the numbers contemplated in the other contract; no, sir. Senator MANSFIELD. Do you place them on these family sized farms? Mr. BAKER. Yes, sir. Senator MANSFIELD. For a certain period of time? Mr. BAKER. Yes, sir. Senator MANSFIELD. How many, generally speaking? Mr. BAKER. Well, the ones I met at the bus station on July 4 about a year or so ago at 3 a. m., 1 of them went to Wisconsin, and 1, I be- lieve, to Montana, and 1 spent 6 months in North Dakota, 6 months in Colorado-it was a year operation, except one of the persons asked to stay an additional year in order to attend the short course in the College of Agriculture in the University of Wisconsin. DIRECT ALLOCATION OF APPROPRIATIONS Senator MANSFIELD. Mr. Baker, what is your opinion of the pro- posal advanced by Mr. Lynn to the effect that appropriations should be allocated directly to specialized agencies of the UN rather than through the U. N. Central Account, as is the case at the present time? Mr. BAKER. We do not have a fixed position on that, as far as the program adopted by the national convention is concerned. My per- sonal opinion, and I am sure it is shared by Mr. Patton and by Glen Talbott, Chairman of the Board, is that these programs should be integrated, they should be coordinated, and as far as the U. N. ex- panded technical assistance program is concerned, if the appropria- tion should run to an appropriate body, that it would be incumbent on us to see as a member-the United States as a member-of that super- vising organization-that it is conducted properly. It would seem to me that when we say we want to do something the wrong way, organ- izationally, because we can't do it the right way from the standpoint of subject matter, we are admitting that we are unable to supervise the operation properly. Senator MANSFIELD. Thank you. Senator AIKEN. Senator Hickenlooper? PROPORTION OF BRITISH IN U. N. TECHNICAL ASSISTANCE MISSIONS Senator HICKENLOOPER. Mr. Baker, on page 3 of your statement you refer to the technical assistance program in nations formerly within the so-called British sphere of influence being dominated by the Brit- ish Foreign Office through U. N. personnel. Could you amplify that a bit? Just how do you mean? Mr. BAKER. I would be happy to; yes, sir. We are not at all sure that that is a correct description of the current situation. We are not even sure that it is a correct description of the situation that has ever existed. Our information comes from former employees, rather high- level employees, of the U. N. technical assistance program in such countries as Iran and Iraq and Burma, Afghanistan, Pakistan, and United States employees, plus observations by me personally and TECHNICAL ASSISTANCE PROGRAMS 271 others in visiting these countries, that there seems to be an unusually high proportion of the U. N. technical assistance missions that were made up of former British Foreign Office employees. There were numbers of times when policy discussions took place, I am told, on how the U. N. technical assistance mission should exert its influence in different types of operations within that country, the British For- eign Office influence was quite prevalent. I don't have a list at the moment of the names of personnel in the different leadership brackets of U. N. technical assistance boards, but if I am correctly informed the top guy is a Britisher. The No. 2 man is a Commonwealth fellow. And all interspersed through the organization it is such that if this charge is true, it could be true because of the leadership personnel that has been integrated in there. There seems to be a very careful watching by the British Foreign Office when, say, an American leaves a post in a country formerly in the British sphere of influence, and all kinds of maneuverings start immediately to take place to see to it that a British Foreign Office operator comes in as a replacement in that vacancy. As I said, these things are what you might call-not evidence that we have, they are indications-they are smoke that may indicate that there is fire there. And we don't have the resources for finding out whether this is true or not. We do feel that if it is true, we are not getting the most out of our technical assistance through the U. N. in those countries where it is happening. We feel, not having the resources ourselves to study these things and find out what is correct-we are presenting the problem, if you please, Mr. Chairman, to your subcommittee and urging that you look into it and see whether these fears are grounded or not. Senator HICKENLOOPER. Mr. Baker, I am interested in whether or not you feel that perhaps such British influence has oriented these programs from a political standpoint toward the British Mr. BAKER. That is the implication. Senator HICKENLOOPER. What is the net result? Mr. BAKER. If the thing we fear is true that would be the implica- tion. And we think you ought to give it some rather intensive study and find out. Senator HICKENLOOPER. I am trying to differentiate between the natural impulse of American citizens to advocate American methods, and so on, in an area abroad. I think there is a great tendency for people to be quite loyal to the methods and ideas which they picked up in their own college or area. But I would differentiate between that kind of influence or that kind of conviction and a design or deliberate attempt for political orientation of a particular country, not toward the free systems as a general rule, but toward a particular country. Mr. BAKER. I agree with you fully, Senator Hickenlooper. And that is one of the reasons we are very careful here not to make any charges, if you please, but just to say this: It is something that maybe ought to be looked into. It is quite possible that it might be the over- enthusiasm of American personel that I have had these discussions with that has led them to feel like somebody else was exerting undue influence. 272 TECHNICAL ASSISTANCE PROGRAMS LAND REFORM PROBLEM IN EGYPT Senator HICKENLOOPER. There is one more question, Mr. Chair- man, that I would like to ask Mr. Baker. Just a couple of paragraphs before you conclude your statement, the last sentence of this particular paragraph, you say, "We think it tragic that the United States has blundered in its approach to this"-meaning the land reform prob- lem-"in Egypt." "Now, I wonder if you would amplify how we have blundered in Egypt. In other words, what responsibility did we have or assume in con- nection with land reform in Egypt? I could understand our interest in South Korea, because of military responsibility. I can understand our responsibility in Japan, because we were the conquering nation. I can understand our-let us say our pseudoresponsibility or quasi- responsibility in the Philippines, because of their relationship to us before their independence. I am not so sure about Iran, but I don't understand the statement about our blundering in Egypt. I wonder what responsibility we had that was labeled technical as far as land reform might be concerned in Egypt. Mr. BAKER. I will preface the answer to your question by saying that during the war for a year I was in the agricultural office in the military government in Okinawa, as a naval officer, and then was the deputy director of the land administration in South Korea in 1947 and 1948 when we initiated the successful land reform in South Korea. 1 want to give you one incident that occurred after the North Koreans attacked the South Koreans, at the urging of the Chinese, presumably, and of the Kremlin. IMPORTANCE OF LAND OWNERSHIP You remember when the U. N. forces had been pushed clear back down to the perimeter around Pusan. Just south of the eastern end of that perimeter there is a little town by the name of Pohang where there are some wonderful vineyards, in addition to some riceland of a very high quality, an unirrigated grain production. In that area the old Oriental Development Co. of Japan had bought up or acquired by other means considerable acreages of land, including the vineyard and the brandy factory. Those South Korean tenants during the 35 or so years of Japanese occupation had made themselves a reputa- tion as being troublemakers. They were the kind of tenants that didn't like the Japanese overlordship. They arranged to throw rocks through the windows of the manager's office on the average of every 2 weeks or a month. And when they would catch the manager or the row bosses away from their bodyguards they would throw them down and kick them and throw rocks at them and beat them. After we were managing those properties at the end of World War II those same tenants continued to be troublemakers. However, in 1948 the land which they occupied was sold to them as owners. Apparently the intelligence of the North Koreans-meaning G-2 of the North Koreans-was about 3 years out of date. They had the information, apparently, that these tenants who lived there around Pohang were troublemakers, that they didn't like military occupa- tion, that they were the kind of people that were independent and TECHNICAL ASSISTANCE PROGRAMS 273 didn't like the business of operating the way they had operated for 40 years. The North Koreans arranged to send a landing party around the right flank of the U. N. forces just north of Pohang, with the obvious purpose of linking up with these former troublesome tenants to attack the U. N. forces from the rear, and thereby breach the perimeter around Pohang. It did not take the armed forces of the United Nations to throw that landing party back in the ocean. Those former troublemaking tenants had in the meantime become farm owners, and they threw them back in the ocean themselves. Now, I tell that story because it illustrates the very, very vital im- portance of a farm tenant or a farm laborer in one of these under- developed countries acquiring the ownership of a piece of land. It is vital to those guys, it is right in their hearts, it is in their souls. UNITED STATES TECHNICAL ASSISTANCE IN EGYPT Now, then, in Egypt we did not, as you say, have the same type of legal responsibility for promoting this sort of thing as we had in Korea and Japan and the Philippines. Senator HICKENLOOPER. Did we have any? I am trying to get at where we were deficient in responsibility? Mr. BAKER. The Egyptians in their new government, the so-called new order in Egypt, themselves initiated a land reform, to make the very poverty-ridden Fellahin, the guy that makes about $20 a year income for his family from farming a little plot of land, the most poverty-stricken farmer in the world that I have seen the Egyp- tian Government itself decided that it wanted to do something in the way of land reform. The United States Government played with the idea of sending various folks over to work with them some, but we never did gear into the thing to provide them the technical assist- ance, both from the standpoint of "know-how" to operate a land reform program as well as the agricultural production technical assist- ance that goes with a successful land reform program to where we got any credit at all for assisting the Fellahin of Egypt to become a farm owner. Part of the result of that has been that this program hasn't moved like it could have moved if the United States Government, without doing anything at all with respect to the sovereignty of the Egyptian Government, would have just provided technical assistance, provided a little economic assistance fund, to help that thing move more effec- tively and more efficiently than it has been able to do without our full support. Now, we gave it some support. The fellows in some of the lower ranks, and particularly in the mutual security and foreign operations mission, assisted the lower-ranking Egyptians, but it never did have the complete support, the full support at the top level of our State Department and foreign operations mission in Egypt. If it had been given that full support, we think it would have gone faster, that we would have done something to strengthen the free world more than we have done so far. Senator HICKENLOOPER. Then it is a question of degree or judgment or administration as to the amount of technical assistance we put 274 TECHNICAL ASSISTANCE PROGRAMS in this? I mean, frankly, I am not satisfied with your word "blundered." Mr. BAKER. I would accept the change in that word. It is a little flagrant choice of words. Senator HICKENLOOPER. I would interpret the word "blundered" as meaning that we had a definite responsibility in the course of action which we were morally or legally bound to carry out, and we stupidly just didn't effectuate that responsibility. We may be criticized by some because we were not more vigorous in attempting to force upon them or make available to them technical assistance, but I question the use of the word "blundered." Mr. BAKER. With that connotation in mind, Senator Hickenlooper, I would be quite willing to use a different word. I do, however, agree with you that there was a considerable amount of stupidity involved in our not- Senator HICKENLOOPER. I didn't say that there was stupidity. I said that one might say that we had been stupid. I wouldn't admit it. Mr. BAKER. I say that flatly as my opinion. I was there in De- cember of 1952-and this is not a partisan matter-there was a con- siderable amount of stupidity being exercised with respect to this problem. Mr. Paul Maris- Senator HICKENLOOPER. I was there in 1952-in the fall-a short time, when some of these things were going on. I don't feel that this criticism is justified toward our actions in Egypt. One might go to any number of countries and say, "We have blundered; we have been stupid," because the magnitude of our technical assistance program was not as great as it should have been. I am just trying to get straight where we should be criticized for stupidity and where we should not. Mr. BAKER. Senator, that is a case where the opportunity that we had and the welcome that we had to help us were such that there wasn't any—we just didn't rise to the opportunity that we had, to the challenge that we had in Egypt. Senator HICKENLOOPER. I suggest that one might extend that to India, to Indochina, to Burma, to North Africa, to any one of a num- ber of countries where one could say, "Well, the government will wel- come all technicians we can send in here," and then for various reasons we have to limit the extent of our activity. Mr. BAKER. If the committee is interested in a further and a more detailed consideration of this Egyptian problem that I have just men- tioned, you might be interested in asking Mr. Paul Maris, formerly Director of the Farm Ownership Division of the Farmers' Home Ad- ministration. He has had a great deal more experience with this Egyptian problem than I have. You might be interested in having him appear before you. He was over there on 3 or 4 different occasions trying to get our participation in this problem off to dead center, and it just never did get off. Senator HICKENLOOPER. I think that is all. Mr. BAKER. Mr. Chairman, may I say just one more thing? Senator AIKEN. Yes sir. QUESTION OF ATTITUDE Mr. BAKER. It wasn't so much a question of quantity as it was attitude. We had plenty of quantity over there in terms of people who TECHNICAL ASSISTANCE PROGRAMS 275 could have helped. We just never did because of some kind of block in top policy, never did unleash their ability, we never let them go to work to help the Egyptians and this land reform program. Senator AIKEN. I think it is possible that in the years immediately following the war we gave to foreign countries the equipment which we undoubtedly had as a surplus at the time and this didn't necessarily lend itself to the advantageous operation of small farms. In other words, we sent a great deal of heavy machinery when they could have done better with something more suited to their uses. I have just one question, Mr. Baker, and that is with regard to the placement of young people from foreign countries on American farms. Does the Farmers Union undertake to negotiate with the FOA to do some of this work? Mr. BAKER. Not specifically. They mentioned it to us, but we have never approached them on this exchange of persons for a public contract. Senator AIKEN. It hasn't been discussed? Mr. BAKER. For a public contract; no, sir. Senator AIKEN. But you did cooperate with private agencies in the exchange of young people. Mr. BAKER. Yes, sir; we have. Senator AIKEN. I think that is all. We have one more witness, and the time is getting short. Mr. BAKER. I appreciate the time you have taken to hear our comment. Senator AIKEN. Thank you, Mr. Baker. Mr. Wallace J. Campbell. STATEMENT OF WALLACE J. CAMPBELL, COOPERATIVE LEAGUE OF THE USA, WASHINGTON, D. C. Mr. CAMPBELL. My name is Wallace J. Campbell. I am director of the Washington office of the Cooperative League of the USA, a federa- tion of consumer, service, and purchasing cooperatives serving a mem- bership of nearly 2 million farm and city families. The league also includes in membership the National Rural Electric Cooperative Asso- ciation and the Credit Union National Association which share our interest in this subject. The Cooperative League has been a stanch supporter of the techni- cal-assistance program ever since its inception. Our people are enthu- siastic about the concept of "helping people to help themselves" and believe this program carries that idea forward very effectively. Ap- proval and support of this work is not only stressed repeatedly in the resolutions and official actions taken by our organization and its con- stituent members. This support is one which you can find in almost any part of the country where you talk with people about foreign policy and about America's responsibility overseas. We feel free to say that there is more support for the technical assistance and develop- ment program among our people than for any other part of our for- eign policy developed over the last several years. The Cooperative League also works with a large number of other private organizations which are concerned about technical assistance and development. A very informal group of representatives of more than 20 organizations in the fields of agriculture, labor, church, edu- cation, civic, and cooperative groups have met regularly since the in- 276 TECHNICAL ASSISTANCE PROGRAMS ception of the point IV program to aid in its direction and to support its continued expansion and development. This group held the orig- inal conference on technical assistance at the Shoreham Hotel in 1952 which brought together 1,500 representatives of 300 organizations to study this field. We also sponsored a smaller "workshop" type con- ference on world social and economic development late in January this year which drew together representatives of nearly 90 organiza- tions which have this as a common interest. UNITED STATES PARTICIPATION IN U. N. PROGRAM As a result of our long and continuous study of this program we would like to make several specific suggestions to this committee: 1. We urge increased financial support of the program, both for United States technical assistance and development, and for the tech- nical-assistance program of the United Nations. We strongly urge authorization and appropriation of the $8 million needed to meet the United States share of the United Nations techni- cal-assistance program for the period up to June 30 of this year. Without speedy authorization the U. N. technical-assistance program is likely to be damaged severely. So far the program has been carried forward in this fiscal year on contributions made by the other coun- tries, including the recipient underdeveloped nations; but the United States share pledged by the administration over a year ago has still not been appropriated and is the largest single contribution to the joint United Nations program. We urge that the Congress consider as early as possible the pro- posed 18-month authorization and appropriation which is being sug- gested by the administration, which would put our contributions to the United Nations technical assistance program on a regular basis, making it possible for the United States to participate in the pledg- ing conference held at the U. N. each year without exceeding the amount authorized by the Congress. Of the sixty-odd nations which participate in the U. N. technical assistance program, 13 nations have increased their contributions this year. The American contribution, in our judgment, should keep pace with the growth of the U. N. technical assistance program. There are psychological reasons why the United States should carry only a given percentage of the program through the United Nations. For that reason we urge the Congress to step up the United States tech- nical assistance program and supplement it with adequate economic development funds so that we can meet the challenge of hunger and desperation which face certain of the underdeveloped areas of the world. The United Nations program is, of course, just one part of the over- all program. The largest share is, and, of course, must be, the United States program of technical assistance carried on by our own Govern- ment. This also we support wholeheartedly. ADMINISTRATION OF TECHNICAL ASSISTANCE 2. In the pending reorganization of the program under the action of Congress last year, we urge that the technical assistance and de- velopment program be held together in one agency. TECHNICAL ASSISTANCE PROGRAMS 277 Such reorganization would escape any "fragmentation" of the pro- gram which might destroy its effectiveness. The program, as now being carried forward, gains a tremendous momentum when the work in agriculture, health, education, Government administration and other programs can be coordinated. A parceling-out of these pro- grams might very well lead to duplication and conflict which would be inefficient and, in a sense, a waste of taxpayers' money. 3. We urge operation of the technical assistance and development programs independently of our military and defense support programs. There are many places in the world where a tie-in package of tech- nical assistance and development, conditioned upon military support, makes it impossible for recipient countries to accept our technical aid even though we are anxious to provide it and where, in terms of American world policy, it is to our interest to provide such assistance. A free world is not conditioned solely upon military defense against communism. The Communists have in many areas taken territory without firing a single shot because the economy of those areas has been so undermined that the people cannot withstand the pressure of communism. For organizational reasons, to tie the technical assistance and devel- opment program to a military aid program will, by sheer volume, overwhelm the self-help programs. An additional factor (which per- haps is in the realm of wishful thinking) is important psychologi- cally. The military assistance programs should be temporary in na- ture. The technical assistance work may take a longer time for rais- ing the standards of living in the underdeveloped countries is a long- range operation. USE OF PRIVATE AGENCIES 4. We urge increased use of private voluntary agencies where feasi- ble to supplement the work of the Government and governments in technical assistance development. One of the very important additions made to the International Development Act in the process of its legislative history was the au- thorization for the use of voluntary organizations in the technical assis- tance program. Several very significant experiments have already been made in that connection. These include contracts with the Amer- ican Friends Service Committee which has conducted technical assist- ance projects in Israel, Jordan, and India. The farm organizations have brought young farmers here for study; the Church of the Breth- ren has been exchanging scores of young people from other countries, providing an experience and a "know-how" which is a form of tech- nical assistance. Organizations like the Near East Foundation have performed out- standing service under Government contract. The work of the churches in technical assistance, of course, predated the creation of the Government's program in this field. There are difficulties in providing Government funds to church organizations for their work and exploration, so that field would need very careful and cautious consideration. But there is a willingness and know-how in agricultural and medical missions which might well supplement the Government's program. 278 TECHNICAL ASSISTANCE PROGRAMS L Other nongovernmental organizations, such as the trade unions, the cooperatives and CARE, along with other voluntary agencies have been eager to participate more fully in the technical assistance pro- gram. Let me take CARE as a specific example. It is a cooperative organ- ization owned by the AFL, CIO, National Grange, National Farmers Union, Cooperative League, and the Credit Union National Associa- tion, along with twenty national religious and relief organizations. In its early days the CARE program was devoted entirely to relief. For the past 5 years CARE has conducted a series of extremely inter- esting self-help programs and has provided technical books, plows, hand tools, medical equipment, scientific supplies, etc., in about 40 countries around the world, reaching beyond relief into rehabilita- tion. Recently CARE has set up a special development program in which it plans to aid handicraft industries in many of the countries to market their products so that the people who are trying to help them- selves will find a way to get cash for their efforts. CARE also hopes to undertake a series of community development, resettlement and productive enterprises, all aimed at helping people to help themselves. CARE would be in an ideal position, for example, to contract for the job of organizing rural credit programs in countries where there may be obstacles to governmental work in that field. Our own Government has overlooked important opportunities in not making use of CARE and the other voluntary organizations to the extent that it might. This people-to-people aspect has been supplemented by a very encouraging technical assistance program in the last couple of years where land-grant colleges have taken contracts with the Foreign Õper- ations Administration to conduct the technical assistance programs in many countries. The land-grant colleges cannot truly be called non- governmental organizations, but they are a different kind of govern- mental program which harnesses know-how that is of extreme value. Contracting with private organizations would make it possible to eliminate much of the costly supervision extended to security pro- grams; it could also prevent duplication which may creep into other types of programs. The most important single feature of such con- tract work is that it allows the people employed to operate on 2- or 3-year contracts, giving them much longer continuity than is assured in either the United States or U. N. programs. NEED FOR GREATER CONTINUITY 5. We urge greater continuity in the technical-assistance program. The Act for International Development, under which the technical- assistance program has been carried forward is a part of the permanent legislation enacted by the Congress. The Congress intended to con- sider this work as long-range in character, and yet the year-by-year authorizations and appropriations force the agencies involved to operate on almost a day-to-day basis. We urge that the Congress find a way to make longer-range authorizations even if annual appro- priations must be made to supplement those authorizations. We would advocate, for example, that the Congress look 5 years or even 20 years-ahead in this development program, set out goals for accom- plishment, and then enact authorization for a period as long as the Congress feels it can. This would not only strengthen the program TECHNICAL ASSISTANCE PROGRAMS 279 by making it possible to employ people with a greater sense of security, it would also have an important psychological effect with our allies, particularly in the underdeveloped countries, who would know we mean to stand by them through this dangerous period. 6. We urge that the program be changed from technical assistance and development to technical cooperation and development. At our recent National Workshop on World Social and Economic Development, participated in by about 90 national organization lead- ers, Ambassador Mehta of India made a stirring speech, telling of the great advantages of our technical assistance and development pro- gram in retaining the friendship of India and the Indian people. He made one strong point, however, which we feel is very valid. He declared that for an independent, democratic people seeking to be- come self-supporting, the word "assistance" smacks of charity. In India and in many of the other recipient countries, both the Govern- ment and the peoples themselves provide materials, resources, and manpower to carry forward this program. Mehta said that in reality this is actually a program of technical cooperation rather than tech- nical assistance. He urged that we change the name of the program, and in so doing change the psychological impact in the recipient countries. Actually, technical cooperation is a two-way street. "ASSISTANCE" OR "COOPERATION"? Senator HICKENLOOPER. Excuse me for interrupting you, but I have an appointment at 12: 15. Would you mind an interruption of your statement at this point? Mr. CAMPBELL. That is quite all right. Senator HICKENLOOPER. In connection with the changing of the word "assistance" to the word "cooperation," I would be among the first to say that such a change would be desirable if I were convinced that it in fact would be mutual cooperation. But we can't get away from the idea, can we, that it is in fact assistance? Let's take the case with India. Does India supply technical assist- ance in this country? In other words, we are putting money in, and they cooperate for their own personal benefit in India, therefore, so far as we are concerned it is assistance. Mr. CAMPBELL. Under the United Nations Technical Assistance Program India has 80 Indian nationals who are specialists in various fields in agriculture, health, and so forth, working in other countries. under that program. The head of the Technical Assistance Program for UNESCO is an Indian, a professor, highly educated, but also the kind of a man who will get down and work with his hands. He is head of the entire Technical Assistance Program of UNESCO, which is an outreach of the United States and United Nations work. When you get into the Arab countries, for example, if you can pick someone with an Arab background in one country to move into another country to help them on a program of basic education, for example, you might get better results than if you do it yourself. Dr. Vincent Cardon, who, as you know, spent 40 years in our own Department of Agriculture, and was taken out of retirement to head the Food and Agriculture Organization-told us just a few weeks ago that more than half of the wheat grown in the United States comes from this hard winter wheat that was sent from the Steppes of Rus- * 280 TECHNICAL ASSISTANCE PROGRAMS sia. He pointed out that soybeans are a crop that came into the United States, at least within my own lifetime, from the Orient, and is now a large crop in America. CALLING SITUATION BY PROPER NAME Senator HICKENLOOPER. I think that is very true. And I think the illustration is very appropriate, except to the point where we paid for all the wheat that we got, and we paid for all the soybeans that we got. I am not saying necessarily that these people should pay for everything; I am not saying that. But I believe in calling a situation by its proper name. Now, in this situation we are furnishing all the money for our own people who go abroad on these technical programs under our Amer- ican program, and we are furnishing 55 percent of the money in the United Nations operation. I realize that people hesitate to accept gratuities. But if they accept assistance, I can't see the necessity of changing its name to something it is not. Mr. CAMPBELL. There are some things we can't buy, Senator. For example, in the development of penicillin, which we have used a great deal, not only in our health work, but in agriculture, it was the Scots, as I remember it, who developed penicillin. We were working hard, trying to get it developed here, but it came from them. Another example came in eliminating hoof-and-mouth disease. The Department of Agriculture had been struggling with that prob- lem for a long time, and didn't even have the types identified properly. According to Dr. Cardon the experts were brought in from Denmark to teach us the technical know-how which made it possible for us to eliminate our basic hoof-and-mouth disease problems. Senator HICKENLOOPER. Of course, they haven't eliminated hoof- and-mouth disease in Europe. Mr. CAMPBELL. That is right. Senator HICKENLOOPER. It is still quite prevalent there. And we have succeeded in eliminating it here by killing the cattle, and then by a certain preventative innoculation which has an effect for at least a substantial number of months. Mr. CAMPBELL. I am not opposed to charity or to assistance, Sen- ator. I was chairman of the committee that organized CARE in 1945, and have served as chairman of its executive committee ever since. We have through it distributed about $175 million worth of American relief overseas. I would be the last one to throw stones at the process of relief. But in the same breath I would like to say that no matter how important or effective our charity is-and I think this person-to-person charity has been most effective-it still is not as good as self-help or cooperation. When we went into northern Greece, for example, we found that the 17 villages there had been deprived of all productive tools which the Communist guerrillas had carried away as they retreated. CARE raised money here and took hand tools and small plows and other equipment into those 17 villages to provide every farmer in that area with at least one productive tool. That was much more important than anything else we could do, because we were providing each man with a means of helping himself. Senator HICKENLOOPER. I am not objecting to what we are doing. I have supported the technical cooperation program, but I have always TECHNICAL ASSISTANCE PROGRAMS 281 · "" hoped that it would be more cooperative as far as we are concerned. I have no objection to the continued use of the word "assistance," because I think fundamentally that is what it is. Of course, it is a matter of semantics. Mr. CAMPBELL. Often the recipient countries read into a word some- thing that we don't intend. Senator HICKENLOOPER. Thank you, Mr. Campbell. I am sorry for the interruption. Senator AIKEN. Don't we have to look for our own gain, Mr. Camp- bell, whether you call them cooperative or assistance programs, in helping to make stronger and more democratic governments in some of the countries where we do conduct these programs? Mr. CAMPBELL. That is right. There is a certain legitimate selfish- ness in the conduct of these programs. Senator AIKEN. And we selfishly want the countries that are demo- cratic to remain democratic and to become stronger democratic countries? Mr. CAMPBELL. That is right. Senator AIKEN. All right. Will you proceed? Mr. CAMPBELL. While we are on the subject of cooperation rather than assistance, I would like to point out that the House Subcommittee on the Specialized Agencies of the United Nations made an extremely interesting report a little over a year ago. Congressman Merrow, who headed that study, pointed out that (a) the technical cooperation programs of the U. N. Food and Agriculture Organization are devoted to the abolition of hunger; (b) UNESCO is designed to aid in the elimination of illiteracy; (c) the World Health Organization is de- voted to the elimination of disease; and (d) the International Labor Organization is designed to help eliminate poverty by raising the liv- ing standards. These specialized agencies of the United Nations have proved their practical worth and deserve our continued and expanded support. NEED FOR ECONOMIC DEVELOPMENT 7. We urge that technical cooperation be supplemented by economic development. Technical cooperation in its own right is a very worthwhile pro- gram. The work which has been conducted to date through the programs of the U. N. specialized agencies as well as the United States Government in this field, have been extremely productive. In the long view, however, the expansion of the economies of the less developed countries calls for development where capital supplements technical cooperation, multiplying in many cases the effectiveness of know-how. In our own United States program we already have supplemented technical cooperation with such programs as road construction, port facilities, dams and other energy sources. The work of the Import- Export Bank in this field has provided a channel enabling the United States to stimulate such development. This kind of a unified pro- gram should be supported wholeheartedly. In the United Nations, however, there is a great gap between the program of technical cooperation and the finances which are now available through the World Bank on a government-to-government basis. We probably need 2 or 3 different types of financing agencies 282 TECHNICAL ASSISTANCE PROGRAMS for adequate development. The proposed International Finance Cor- poration would be one of these. The proposed Special United Na- tions Fund for Economic Development (SUNFED) might well be another. One of these agencies would finance self-liquidating proj- ects. The other would be devoted to non-self-liquidating projects which would, however, build the economy of the country to provide a sound basis for self-liquidating projects. Until financial agencies of this kind are created and in action it will be difficult to get private capital to go into many of the countries which could and eventually will use private investment. Our own national organization, the Cooperative League, has sup- ported the technical cooperation programs and its predecessors in the field of economic aid. We represent a very substantial group of tax- payers who have, through their taxes, contributed many millions of dollars to these programs. We will continue to support these pro- grams even if no part or section of the programs are devoted to co- operatives as such. We do feel, however, that in many of the economies throughout the world the organization of cooperative credit, cooperative marketing, and cooperative purchasing associations, as well as certain types of service cooperatives, could be of substantial value to the economies of these countries. Our American cooperatives, which now include nearly 12 million members in their various forms, have been a healthy factor in this free economy. We commend to those responsible for the technical cooperation and development programs the study of the more widespread use of the cooperative technique in helping these people to help themselves. Senator AIKEN. Thank you, Mr. Campbell. There are no questions? At this time I want to thank Chairman Mansfield, the chairman of this subcommittee, for giving me the honor of conducting the hearing this morning. This subject that we are studying is one of extreme importance, and I think it is an honor that we have even a small part in carrying on this program. (Whereupon, at 12: 20 p. m., the subcommittee adjourned.) TECHNICAL ASSISTANCE PROGRAMS THURSDAY, MARCH 3, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10 a. m., in room 457, Senate Office Building, Senator Bourke B. Hickenlooper presiding. Present: Senators Hickenlooper (presiding), Mansfield (chairman of the subcommittee), and Green. Senator HICKENLOOPER. Please come to order. Chairman Mansfield, who must leave the meeting after a while, has asked me to preside this morning. I want to say that we are very pleased to have a trade-union group from West Berlin, Germany, with us this morning. They are here under the exchange program. We are delighted to have you. Will the group please stand so that we can see you? Thank you very much. You are very welcome, indeed, and if we can be of any assistance to you, we stand ready to render it. The first witness this morning is Mr. J. T. Duce, of the Arabian American Oil Co. STATEMENT OF JAMES TERRY DUCE, VICE PRESIDENT, ARABIAN AMERICAN OIL CO. Senator HICKENLOOPER. Mr. Duce, do you have a prepared state- ment? Mr. DUCE. Yes, Senator. Senator HICKENLOOPER. Would you like to read it, put it in the record, or just summarize it? Mr. DUCE. Let me explain my situation this morning. Senator HICKENLOOPER. You may proceed. Mr. DUCE. When we started to discuss this question and I got the letter from the committee here I asked my people in the field to make a report on what they were doing in the way of technical assistance. It only came in yesterday, and it runs to some 35 pages and contains a number of photographs. Now, I haven't been able to reproduce the photographs, but I will give you a copy of them and get some addi- tional copies later on if you wish them. Senator HICKENLOOPER. That will be fine. Mr. DUCE. I have a short statement of my own which I suppose I had better read. 283 284 TECHNICAL ASSISTANCE PROGRAMS Senator HICKENLOOPER. Will that somewhat summarize the longer statement? Mr. DUCE. No; it is a little different, it is my own opinion, part of it. Senator HICKENLOOPER. Do I understand, then, that you would like to file your longer statement and present your own statement? Mr. DUCE. That is right, sir. Senator HICKENLOOPER. Without objection, that will be done. (The material referred to appears on p. 290.) Senator HICKENLOOPER. You may proceed. Mr. DUCE. Thank you very much. We in the Arabian American Oil Co. have only had limited oppor- tunities to observe the operations of the FOA program in the Middle East. Our direct contact with it has been, in the main, with the FOA mission operating in Saudi Arabia which, unfortunately, was closed in October 1954 as a result of political events. By the way, they were not connected with FOA. We have had, however, a long experience with a type of technical assistance project in connection with our own operations in the Al Hasa Province. With your consent I will file a separate and extensive report on these matters. Senator HICKENLOOPER. Without objection it may be filed. [See p. 290.] TECHNICAL ASSISTANCE-LONG-TERM PROJECT Mr. Duce. In Saudi Arabia we have attempted to improve the health, education, and skill of the people in our area of operations. As a result, we have come to a number of conclusions which we believe to be of interest. In the first place, we are firmly convinced that no form of technical or financial assistance should" be considered as a quick cure for the ills of underdeveloped countries. This type of assistance must be a long term project for its effectiveness grows only through the years. No one, no matter how intelligent, is able to absorb, instantly, new techniques and new ideas. In a society such as we have in Saudi Arabia there are innumerable difficulties in the adaptation to new and strange economic and technical patterns. Part of this lies in the folklores of the people-habits of mind and cultural patterns that have existed for a thousand years or more. For instance, in training Saudis as foremen, we have had men refuse at the last minute to take the jobs because it might alienate them from their fellow workers. Such difficulties can only be overcome by a long-term program which embraces basic education together with the creation of opportunities for the use of the new skills. It is my considered opinion that we in America, accustomed as we are to rapid change and quick results, have been too impatient with our FOA technical assistance programs. Let me cite one of the phases of the Saudi Arabian FOA program, namely the development of water resources. Saudi Arabia in a wet year has 3 inches of rain, so water is a most precious resource. A very able group of engineers was furnished by the United States Geological Survey for the water work and undertook an extensive program of field examinations and exploratory well drilling. This program continued from 1950 to 1954 and even in this long period TECHNICAL ASSISTANCE PROGRAMS 285 of time with the employment of the very best scientific methods, it was not possible to achieve more than a good start on the problem of creating sufficient water supplies for the large cities together with such additional supplies as would support a badly needed expansion of food production. One of our preoccupations in such work is to prevent the exhaustion of water resources by overdevelopment. I might add that Saudi Arabia, being the desert it is, is always a food importer. In the field of education too the process is slow when one has to deal with people who are largely illiterate though they have been educated to cope with one of the most rigorous environments in the world the desert. I might add here that when you come to the Bedouin, they remind me very much of the people who went out to the West in the early days. They live in an extremely difficult climate, they are an amusing and interesting people, and when you get to know them they are full of stories. They remind me very much of the mountain man in type. They are good people. The need for highly trained Saudis in government, the professions, and in industry is acute, but until people are trained in the primary grades there can be but few candidates for higher education and specialization. I am glad to say that the Saudi Arabian Government is making notable progress in this direction. Furthermore, this proc- ess cannot be forced and preliminary education cannot be bypassed. Here I might cite the example of the extremely intelligent young man employed first as office boy and then clerk in our organization. A further promotion to shipping clerk was completely unsuccessful due to the young man's lack of any knowledge of geography. This pre- vented him from dealing with the routing of shipments from Norway, Australia, and other places. Needless to say, our training programs are correcting such educational deficiencies. During the last 15 years we have been endeavoring to teach the three R's to our labor force and, at the same time, to educate them in the technical skills. The report I submit covers this question. RECRUITMENT DIFFICULTIES A second difficulty which both we and FOA have experienced is the recruitment of first-grade people to supervise technical assistance programs. A program of technical assistance requires skilled people with a missionary zeal-a dedication to the task, but at the same time imbued with the tact to instruct without offense. Such people are hard to find. In the case of FOA, which requires very large numbers of such people for worldwide programs, the recruitment situation must be acute. The appearance of the United States in a position of inter- national leadership has found us with but a small reservoir of such people to represent us abroad in carrying out the difficult and often delicate tasks connected with technical assistance. We have observed at first hand, too, how in many cases, FOA has been unable to interest topnotch people when candidates come to realize that there will be a delay of many months between acceptance and assignment due to the time consumed for security and other clear- ances. Salary scales and working conditions ofttimes discourage the 59637-55– -19 286 TECHNICAL ASSISTANCE PROGRAMS > better candidates whose capabilities qualify them for other positions where working conditions and outlook are far more attractive. In this connection, the FOA program of assigning certain tasks to private and semiprivate social-service and technical organizations has, we think, been highly successful. We can mention in the Middle East such organizations as International Voluntary Services, Amer- ican Middle East Relief, Near East Foundation, and the Society of Friends. These organizations are very effective because they are able to obtain the services of dedicated people and, in general, tend to operate in specific fields at the village level, instructing the inhabitants in such things as sanitation and agricultural improvement. Govern- ment dollars expended in the support of such substantial private undertakings are, we think, among the most useful. AGRICULTURAL CREDIT I might here further comment on the field of agricultural improve- ment. In the Middle East and in many other areas, farmers are desperately poor. They view with enthusiasm the possibility of using new methods and improved equipment but ways must be found to give them access to the capital with which to buy seeds, fertilizer, and machinery. Agricultural credit is a topic, therefore, which deserves urgent and early consideration. This is, of course, a responsibility of local governments. I might add one thing that we are doing in the Middle East at the present time which is of great interest, and that is, getting the farmers and other people to raise the kind of things that we need in our camps. I think we are spending about $2.5 million this year in purchasing various things like lettuce, fruits, and other things, eggs, which we have standardized, and shipping them down to our camps by air from the north. It has been a very successful program. SUPPLYING LOCAL GOVERNMENTS WITH ADVISORS This brings me to my final comment. In the underdeveloped nations it is most important that local governments themselves come to grips with the problems which we are trying to solve through technical assistance. I believe that the United States Government should make a very special effort to supply local governments with people who can advise them how to undertake technical programs, who can assist in the administration of these programs, and above all, who can convince the leaders in these governments of the benefits to be derived from them. Tubs must stand on their own bottoms. Failure to act quickly and effectively in this area of activity may result in such advisory posts being filled by people who do not like the United States. Being an engineer, I am, of course, most familiar with programs aimed at the development of natural resources. Aramco, purely as a commercial venture, has undertaken an extremely thorough study of the geography, geology, history, and ethnology of the area in which we operate. All of this information has been made available to the Government of Saudi Arabia and we have cooperated with the Saudi Arabian Government in its effort to create an organization of trained people who can receive, understand and make effective use of the data which has been furnished. TECHNICAL ASSISTANCE PROGRAMS 287 We would like to see the Saudi Arabian Government and, in fact, all of the governments of the Middle East, undertake the establish- ment of scientific departments devoted to the study of natural re- sources-water, minerals, fuels, and all other natural occurrences of useful and valuable materials. This is a field in which the technical assistance program can operate fruitfully, namely, in convincing the governments of the vital necessity of natural resources development and assisting in the creation of the necessary technical services to promote such developments. FOA ACTIVITIES IN THE NEAR EAST It is our observation that FOA personnel in the Near East are, in general, capable and dedicated and that they have laid the foundation for future useful operations. If there has not been greater success to date, this may be attributed less to errors on our part than to inability or unwillingness on the part of host governments to give full coopera- tion. This may be attributed largely to dissatisfaction with American policy in the Near East over the last decade. Near Eastern Govern- ments have too frequently believed that FOA is a tool to advance American political policy rather than a disinterested and altruistic aid program. The impression has been current also that the United States Government is endeavoring to impose aid programs on reluctant foreign governments. In one Near Eastern country, the FOA was required to withdraw for wholly irrelevant political reasons. In an- other, it failed to obtain the consent of the government to carry out a program. In another, the government did not-in most fields of endeavor—give the support and leadership to make for successful operations. We like the technical assistance program but we believe it should be a carefully planned long-term affair, not a crash program. It should build up a cadre of carefully selected and trained officers to do its work. One good man is worth a hundred second-raters. Senator HICKENLOOPER. Thank you, Mr. Duce. Senator Green, do you have some questions for Mr. Duce? Senator GREEN. No, sir. Senator HICKENLOOPER. Senator Mansfield? Senator MANSFIELD. No questions, Mr. Chairman. THREE TYPES OF TECHNICAL ASSISTANCE ACTIVITY Senator HICKENLOOPER. Mr. Duce, I have 2 or 3 matters I would like to explore with you in a limited way. It is my impression-and I realize you are talking about Saudi Arabia as one area and not the world in general-that we have three main operations in connection with assistance to people who might be less privileged in the way of modern development. One is what for a long time has been what we might call a missionary movement, that is, foreign missions that have gone into underpriv- ileged areas and have done a very great work in the particular areas in which they have served, a group of dedicated people with a sacri- ficial bent who have done some very great humanitarian things in the field of public health, education, and so on. Mr. DUCE. We had some splendid cases in the gulf. Dr. Harrison is one of them. 288 TECHNICAL ASSISTANCE PROGRAMS Senator HICKENLOOPER. I think we have those in many, many places of the world. But that is one very large area where assistance and education have been given and have been very effective. And then, we have another group activity in various countries. We have had American private enterprise operating where the climate. has been reasonably satisfactory-of course, it has a private motive- which has been able to bring substantial amounts of training, infor- mation, education, and development of natural resources to a number of countries. Would you agree that that is correct? Mr. DUCE. Yes, sir. I think we are an example. I imagine we train 3 people to every 1 we use. Senator HICKENLOOPER. I have used your company's activity in Saudi Arabia as an example of furnishing educational benefits to the areas which you serve. And then, of course, we have the third great area now, which is the Government-sponsored technical aid programs. Now, do you notice any substantial or avoidable conflict among those three particular types of activity in any areas where you have had experience? Mr. DUCE. In Saudi Arabia, certainly not. Of course, we haven't any FOA in Saudi Arabia at the present time, but we have worked closely with FOA in Saudi Arabia, and there has been no clash between anything we are doing and FOA. In the northern countries I would be less able to testify to. How- ever, there has been close cooperation between the FOA people and institutions like the American University at Beirut, which is one of the great institutions out there. In our area, I should say not. Senator HICKENLOOPER. I would class the American University in Beirut as a sort of mission activity, because it was established, I believe, around 1854, through the efforts of an American medical missionary, I think. Mr. DUCE. That is right, sir. And its genesis really goes back fur- ther than that. The founding of the university goes back to 2 mission- aries who went to Malta in 1818 who developed the present Arabic printing font, and they began the founding of an Arabic press, and they inspired people who went on to found Beirut University. It has a long history. LEVEL OF TECHNICAL ASSISTANCE ASSIMILATION Senator HICKENLOOPER. There is one thing in your statement which I have noticed in a number of places in the world. That is a tendency on occasions for technicians to attempt to instill in people the ability to run before they learn to walk. Mr. DUCE. That is right. Senator HICKENLOOPER. In other words, I have gained the impres- sion on occasions and I am not a technician, nor an expert in this field-that we have started in sometimes at too high a level, not realiz- ing the complete inability of the people in general whom we are trying to serve to assimilate what we are talking about, or to put it into effect. We haven't started on the kindergarten level, that is to say, but we have started in at about the seventh grade level in some cases. TECHNICAL ASSISTANCE PROGRAMS 289 • Mr. DUCE. Well, Senator, you know there is a complex you some- times hear about in the Middle East and in India. In our area it is called the effendi complex, and in the India area it is called the babu complex, which is the result of highly educating a man until he becomes a man who doesn't want to work, he wants to be educated and not to touch the great thing about the Americans is that they will work. And that is one difficulty you have with highly educating some of these people without training. Senator HICKENLOOPER. Would you say that in some cases it is an educational arrogance? Mr. DUCE. That is right. Senator HICKENLOOPER. I have noticed that on occasions. Mr. DUCE. But that is disappearing. In our area, of course, people see our own people work, and that is something else. Our people really work out in the field. Senator HICKENLOOPER. Your feeling is that the technical program if properly approached and properly nurtured along will eventually result in very great benefits to the area. Mr. DUCE. Absolutely. Senator HICKENLOOPER. Senator Green? GOVERNMENT ASSISTANCE TO PRIVATE UNDERTAKINGS Senator GREEN. I would like to ask one question in connection with your prepared statement that there are some private and semiprivate social service organizations whose work is valuable. You use this language: "Government dollars expended in the support of such sub- stantial private undertakings are, we think, among the most useful." I would be glad if you would amplify that. Do you mean that the Government should help financially in the missionary work? Mr. DUCE. Senator, I believe the FOA has some contracts with some of these people to do specific things in connection with their work. And it isn't exactly missionary work-let me give you an example of it. You, I think, met out in the Middle East a man by the name of Musa Alami. Now, Musa Alami is an Arab who was driven out of Palestine but has established a big farm near Jericho. We assisted him by drilling some water wells. And he has established a training school for young Palestinian Arabs, a training school in all sorts of skills, and in farming. Now, two men have come from one of the international voluntary services out there, and they are teaching these people how to handle chickens on a large scale. We have supplied the market for the eggs and chickens, we pay a little bit more for them, but we think that is a part of the interest in building up this particular thing. These two young fellows have done a magnificent job there, they are dedicated young men, they are training and introducing a lot of new methods. Now, it is that kind of an activity that I think might well be supported by the United States Government. Senator GREEN. Just how would you define the extent to which the United States Government should help pay the cost of missionaries? Mr. DUCE. Those fellows aren't missionaries. Senator GREEN. Mission work? 290 TECHNICAL ASSISTANCE PROGRAMS Mr. DUCE. It really isn't mission work, it is work with the villages. Senator GREEN. That doesn't answer my question. How far would you go with that? You say, "Government dollars expended in the support of such substantial private undertakings are, we think, among the most useful.” I thought that might be construed as though you were recommend- ing Government subscription of missionary funds. Mr. DUCE. No, except when they are doing a specific job, such as this one that I am talking about, not for missionaries. Senator GREEN. Define a specific job. Mr. DUCE. Well, in this particular case, the specific job was teaching people to raise chickens and to standardize the poultry industry there. That is a specific job, it has nothing to do with converting people for missionary work. That, I think, can be well done by such organiza- tions as that. Senator GREEN. I don't understand, yet, and I would like to benefit by your advice. Part of a missionary's work is to make himself friendly with the people among whom he lives. And he has classes at one time or another in connection with his religious work, as well as his other work. Now, if the United States Government begins to make such con- tributions, it should have a definition as to how far it is going to go in support of these private institutions. Mr. DUCE. Senator, I am suggesting that only as to the carrying out of technical assistance, not as to the missionary work itself. Senator GREEN. You are recommending support for existing insti- tutions doing work in the same way as the Government is doing? Mr. DUCE. They are employed, Senator, in these particular cases as contractors by FOA. I believe that is right. Senator GREEN. That is all. Senator HICKENLOOPER. Any further questions? Thank you, Mr. Duce. We are glad to have your views. REPORT ON ARAMCO TECHNICAL ASSISTANCE IN SAUDI ARABIA (Prepared by the Arabian American Oil Co. for the Subcommittee of the Senate Foreign Relations Committee to Investigate Technical Aid Assistance, March 3, 1955) I. BACKGROUND A. CHARACTER OF ARAMCO OPERATIONS Aramco began work in eastern Saudi Arabia in 1933. The first oil was exported in 1939; but as development was brought practically to a standstill by the Second World War, in 1944 the daily oil production was only about 21,000 barrels. The average daily production for 1954 was 953,000 barrels. The total number of Aramco employees in Saudi Arabia is (January 31, 1955) 21,837. Of these, 14,103 are Saudi Arabians; 3,177 are Americans; 4,557 other nationalities. The variety of skills and professions represented, especially in the American element, is much greater than in a comparable activity in the United States because of the maintenance of supporting services which, in the United States, are either provided by the community or can be purchased from specialized agencies. B. CHARACTER OF THE ENVIRONMENT The oil operations themselves are carried on exclusively in the Eastern Province of Saudi Arabia, including the Rub' al Khali, one of the greatest sand deserts in the world and practically unexplored before Aramco began its operations. The area of the Eastern Province is greater than that of Texas and California TECHNICAL ASSISTANCE PROGRAMS 291 combined; the total population is probably about half a million people. Roughly, half of these are nomadic and the rest are, or were, engaged primarily in agriculture, pearling, and fishing. C. SCOPE OF TECHNICAL ASSISTANCE "Technical assistance" rendered by Aramco is hard to define as it extends from informal conversations answering specific questions of private individuals to projects involving charges paid by the Saudi Arab Government exceeding a million dollars annually. "Technical assistance" is also usually thought of as being "free" assistance and Aramco does expend more than a million dollars annually in providing technical advice and assistance which is essentially free. On the other hand, projects carried on by Aramco which are paid for either by private industry or by the Saudi Government cost several times this amount. The kinds of technical assistance given by Aramco are, with the single excep- tion of agriculture, those in fields in which Aramco, for its own operations, employs technically and professionally competent people. The principal fields in which assistance is given are geological, engineering (both planning and construction), mechanical operation and maintenance, medical, educational, and financial. There are three principal ways by which technical assistance has been made available to the general economy of Saudi Arabia. These are (1) assistance which has resulted from operations which had to be carried on in the develop- ment of the oil industry itself-outstanding examples of this kind of assistance are the industrial training programs and the development of a highway network in eastern Saudi Arabia which is essential to the oil operations but also proves of great benefit and assistance to the general public; (2) services requested and paid for by the Saudi Arab Government; a very great part of the technical services provided by Aramco has been provided at the specific request and at the expense of the Government itself—the outstanding example of this type is the Dammam-Riyadh railroad, built by Aramco for the Government at a cost of some $60 million; (3) technical assistance furnished as a public service by Aramco, primarily the work of the Arab industrial development and the com- munity development divisions of Aramco-the principal and greater part of the work of these divisions is the furnishing of assistance and technical advice to various individuals and organizations in Saudi Arabia, especially in the Eastern Province, the immediate area of Aramco's operations. II. DESCRIPTION OF TYPES OF ASSISTANCE AND RESULTS A. GENERAL Technical assistance in the medical and educational fields is described indi- vidually. Technical assistance to the economy in other fields, however, is lumped together under the title "Industrial, Commercial, and Agricultural" because of lack of clear-cut lines of demarcation. The development of water supplies, for example, is essential to both industry and agriculture. In turn, the development of large agricultural projects is almost as much an industrial and commercial as an agricultural undertaking. The statistics given herein, where they relate to operations which are not carried on by Aramco itself, are estimates. In preparing these statistics, esti- mates of doubtful accuracy have not been included. Hence, the totals of invested capital, annual income, and so on tend to be understated. It should also be borne in mind that this report deals only with those elements of the economy It is on which Aramco operations have had a comparatively direct effect. perfectly obvious that technical assistance passed by Aramco to elements of the public in the immediate area of Aramco's operations have been, in turn, passed on to other elements of the economy farther removed from the oil operations. However, no attempt has been made to estimate the results of this secondary distribution of Aramco assistance, although we feel that it may be considerable. B. MEDICAL Aramco employs 950 people for its medical services, including 52 physicians, 5 dentists, 160 nurses, and 27 technicians. By reason of having available such a large nucleus of professionally trained people, it has been possible to give technical and professional assistance in many medical fields as well as to provide a certain amount of treatment of patients who are not company em- ployees. The specific fields in which medical assistance has been extended in Saudi Arabia are as follows: 292 TECHNICAL ASSISTANCE PROGRAMS (a) Preventive medicine Malaria. Since 1947, Aramco has made a study of malaria in the large oases of the Eastern Province, Qatif and Hofuf, as well as in the Al Kharj area near Riyadh. This has involved epidemiological studies of the disease under oasis conditions and the development of methods for and the carrying out of DDT residual spray programs for malaria control. The actual control programs have been mutual efforts with the Saudi Arab Government in which Aramco has provided the technical and administrative personnel but the main expense, labor and materials, has been borne by the Government at a cost of about $150,000 an- nually. The reduction in reported malaria cases in the Eastern Province has been spectacular up until the end of 1954, when a marked uptrend occurred. The causes of this reversal in trend have not yet been determined. In addition to assisting in this continuing program for the Eastern Province, Aramco technical personnel were requested to help combat a malaria outbreak in Jiddah and Mecca in 1950. A small team of professional and technical personnel was sent to assist the Government team during this unusual outbreak, which was quickly suppressed. Smallpox vaccination.-Malaria survey teams included a smallpox vaccinator for the purpose of vaccinating the inhabitants of villages under survey. By this means, a very high proportion of the population in the area of the malaria control operations has been vaccinated. Under outbreak conditions, vaccinating teams have been sent to infected villages. All Saudi patients entering Aramco hospitals (including nonemployees) have been routinely vaccinated to help control this scourage. Meningitis prophylaxis.-During a meningococcus meningitis outbreak in the coastal towns of Dammam and Al Khobar in 1952, Aramco assisted local Government medical officers in developing a sulfa distribution program which quickly brought the epidemic under control. Health education.-Aramco's production of a motion picture film, The Fly, together with film strip and illustrated brochure and flip-chart is an example of the company's professional health education assistance to the Saudi Arabian Government. This one-half hour color film was produced locally and has an Arabic sound truck. Its aim is to show practical sanitation methods as a basic fly control measure for individual and group action in the community. Health education materials have been developed and supplied to the local representative of the Ministry of Education for use in provincial schools. These items include charts, posters, and brochures on community fly control, leaflets on malaria control, and a series of model lessons on personal hygiene. Educa- tional materials on malaria have been prepared for distribution to villages during the malaria control operations. Assistance to nearby municipalities.-Technical assistance has been rendered to public works officials in both Dammam and Al Khobar on municipal problems concerning public and private water supply, waste and garbage collection and disposal, street cleaning, insect and fly control, and basic regulations for municipal sanitary codes. (b) Curative medicine Development of Government and private hospitals and clinics.-Assistance has been given to both Government officials and to private interests in the develop- ment of hospitals and clinics in the Eastern Province. This assistance has taken the form of preparing actual construction plans for appropriate buildings, pro- viding technical advice on medical supplies and equipment, making cost estimates, and advising on staffing requirements. Active assistance has been given to a group of private physicians who are interested in establishing a private, 75-bed hospital in Al Khobar and to a group of private citizens who are interested in establishing a hospital-clinic facility in Hofuf. Assistance to private practitioners.-Private practitioners in the surrounding towns and villages also receive support and assistance. The Aramco X-ray and laboratory facilities are placed at their disposal. They may consult with Aramco specialists on their medical problems and can make use of the medical library. Aramco clinic and hospital service to the general public.-Aramco operates 340 hospital beds and has clinic facilities capable of treating 50,000 outpatients per month. Current statistics indicate that 51 percent of the hospital beds and 28 percent of the clinic facilities are being devoted to the care and treatment of the general public. These services are either given without charge or are heavily subsidized. In the 5-year period 1955-59, it is estimated that services to the general public will cost Aramco about $8,500,000. TECHNICAL ASSISTANCE PROGRAMS 293 (c) Medical training The medical department operates a Saudi nurses training school in Dhahran. The 3-year curriculum is patterned after nursing schools in the United States. On completion of this curriculum, successful students are sent to Lebanon for 12 years of advanced training and are graduated as fully qualified professional nurses. Eleven Saudi employees have completed this program, 14 are presently in Lebanon, and 67 are in training in Dhahran. (d) Medical research Aramco has entered into a joint research program with the Harvard University School of Public Health to study trachoma with special reference to its diagnosis, epidemiology, modes of transmission, the isolation and propagation of trachoma virus, and the development of a vaccine. The sum of $500,000 has been appro- priated for this purpose. The program began in October 1954, and will extend for 5 years. All insects of medical importance in the area have been collected, studied, and classified. Observation and research are constantly carried on in respect to the results of the malaria control programs and the effectiveness of insecticides, with special attention to the development of resistance by flies and mosquitoes to specific insecticides. Epidemiological studies of schistosomiasis in this area have been carried on for some time. Results of significance obtained in the course of research are transmitted to the Saudi Government and the World Health Organization. (a) Public education C. EDUCATIONAL The Arabs generally have been well instructed, and the religious leaders highly so, in the tenets of the Moslem religion and the law, customs, traditions, and culture which are so closely related to their religion. But, before economic means become available, lay education in Saudi Arabia was confined to the private tutoring of the sons of rich men and rulers, plus some small schools in the Hejaz. In recent years, however, education has been recognized by the Gov-. ernment as a great and pressing need; and already secondary schools in the holy cities of Mecca and Medina have turned out hundreds of boys who have been re- ceiving college education in the Middle East, Europe, and the United States under Government scholarships. The Government has also been making serious efforts to establish an adequate school system in other parts of the country. In the Eastern Province, in which Aramco operates, there are now some 25 elementary schools and 1 secondary school. The secondary school, at Hofuf, was opened in 1948. Of an enrollment of 4,000 to 5,000 in the Al Hasa elementary schools, the great majority, naturally, are in the lower grades. In the current pattern, the majority leave school before the fourth grade. Great emphasis is still given to religious education, but indications are that the curricula are beginning to pro- vide in greater degree for the lay educational requirements of the rapidly developing economy. The rate of expansion of the school system seems to depend more upon the availability of teachers than upon the availability of money or governmental interest. The Government has had to depend largely upon teachers brought in from Egypt, Palestine, and other Arab countries. Recognizing the great need for Saudi teachers for Saudi children, the Government has recently established teacher-training institutions in Mecca, Medina, Taif, and Jiddah in the Hejaz and in Riyadh in the Nejd. A similar institution has been authorized for Hofuf in Al Hasa. The schools are for boys only. Any general approach toward the education of women has still not been made and perhaps is not very near. Many people in the Government have believed for some time that the education of the sons of Aramco's Saudi employees should be the responsibility of Aramco. Aramco, on the other hand, while desirous of assisting in expansion of educa- tional opportunities for Saudis, has not wanted to become involved in public education of Saudi children as an oil company operation. To contribute to edu- cation but at the same time to avoid involvement in grave national and religious issues, Aramco has agreed to build and defray the cost of operating 10 schools in towns of the Eastern Province which will have a total capacity equal to the number of employees' sons of elementary school age. These schools, with a total capacity of 2,400 pupils, will become an integral part of the Government school + 294 TECHNICAL ASSISTANCE PROGRAMS system and will be operated by the Government. Two of these schools are already in operation, others are well along toward completion. All 10 are expected to be in operation by the end of 1955. The total construction costs will be about $1,500,000. (b) The training problem of Aramco Without some knowledge of the facts about the public-school system, Aramco's training problem cannot be properly understood. What is being done now by the Government in the education of children will be of great benefit in the future, and its effect is already felt in the form of a small but increasing number of literate young Saudi Arabs who apply to Aramco for employment. But the great majority of Saudis employed by Aramco have reached adulthood with little or no schooling. Furthermore, the nomadic life of the Bedouins and the simple industries of the towns have given them little in the way of skills or habits which fit them for work in a modern industrial enterprise. This means that their ability to do something useful industrially other than unskilled labor must depend on training offered by Aramco itself. Nevertheless, Aramco has always recognized the need to give Saudis the greatest practicable participation in the work of the enterprise. The company's official and published policy in this regard is: "To offer Saudi employees encouragement and assistance, through improve- ment of both skill and knowledge, to develop their ability to perform company work of all kinds and levels; and to do so in sufficient numbers to provide for the maximum practicable utilization of Saudis in every organizational unit and every type of work." Considering that there are about 14,000 Saudi employees and some 6,500 are currently enrolled in training programs of various kinds, this policy and the situation which inspired it have presented Aramco with a unique and complex educational and training problem. The approach familiar to western countries of educating and training one group of people (the young) as a separate activity while another group (the adults who are already trained) do the work of industry would not be practicable for Aramco. It would mean a period of years before there could be any meaningful Saudi participation in the Aramco enterprise, and meanwhile the trained adults would have to be largely foreigners. This course would not be pleasing to the Saudis even if Aramco chose to follow it. Accordingly, Aramco has had to find a way to lift itself by its bootstraps; to carry on a large part of its work and a large training operation with the same people at the same time. The training of Saudi employees while they work cannot be limited to so-called on-the-job training. The more able Saudis could not get very far without related and even general knowledges which the more complicated and advanced jobs require. Accordingly, the program is designed to supplement job skill training with classroom instruction in related and general knowledges both on assigned company time and in their spare time on a voluntary basis. While this class- room instruction must be limited to essentials in preparing the men for Aramco jobs, the opportunity to progress through elementary, secondary, and college levels of education is open to Saudi employees who have the ability and other qualities necessary for success in potential jobs for which such education is required. 1. General principles: The nature of the Aramco training problem has made it necessary to place the responsibility for Saudi training upon the operating or "line" organization—that is, upon the people for whom the Saudis work. Thus, the responsibility is placd upon people who are ordinarily very busy with other things and whose own training has not been in the training field. There is no other practicable approach in view of all the circumstances. Each organizational unit employing Saudis is expected to have its own training program, designed gradually to replace foreigners in various types of work for which Saudis can be expected to qualify through training in a reasonable number of years. With the staff help available to him, each foreman is expected to formulate a specific plan of action, in writing, for the training and utilization of Saudis in his unit. It is expected to be based upon a study of the workload and an organi- zation of the work of the unit which permits a maximum practicable utilization of workers whose skills and knowledges are necessarily limited to narrow fields. The duties, and skill and knowledge requirements, of the jobs (designated as "whole jobs") for which a fairly high level of general individual competence is needed, have been analyzed. Until a Saudi reaches this level of competence, he may act as a helper or perform certain duties under close supervision. Each TECHNICAL ASSISTANCE PROGRAMS 295 T "whole job" for which a Saudi is being trained is broken down in wage-progress. steps through which the Saudi can progress from the simpler to the more complex duties and responsibilities with an increase in pay as he improves his value to the company. Each succeeding wage-progress step, however, requires a satisfactory performance of duties indicating improved skill or knowledge, or both. The success of Saudi training depends very largely upon the zeal and interest shown by the foreman in the planning and implementation of their individual programs. There are three general types of work for which Saudis are being trained: crafts, operation of plants, and office work. The drilling crews, for example, are largely Saudis. There are, of course, many variations within these types and there are other types of jobs in the storehouses, transportation, dining halls, resi- dential, and community services which are large operations in an oil company which must not only carry on its oil operations but provide most of the support- ing services as well. In all cases, of course, the training falls into the general categories of actual job skills and related knowledges needed for intelligent performance of the job. As varied as the work is, there is a large variation in the training for which the unit training programs provide. In the shops it has been found advantageous to give skill training in shop bays in which trainees can use hand and machine tools under the supervision of full time instructors. In plant operation, the trainees must get most of their experience as helpers in the plants themselves. Drilling crews must be trained in drilling operations. Automobile and truck drivers, crane operators and riggers receive their initial training in a driver's school separately operated for the purpose. In all cases, provision must be made for planned specific training under an instructor, including classroom instruction in related knowledges. Aramco has authorized the use of one-eighth of the working time of Saudis for this purpose. The foremen are allowed great flexibility in the use of this time so long as there is an appropriate balance between work experience, skill training, and classroom instruction. If the needed related knowledge training con- sists of special instruction applicable only to a better understanding of the work being done, classes are usually held in space provided at the job sites. But if the related knowledge needed is in the field of general elementary schooling, the foremen can assign their trainees on a part-time basis to schools operated by the district training division. In the training of clerks, for example, this type of training is of primary importance; but it is also important in the shops and plants for the more complicated jobs in which an understanding of theory and judgment factors are important elements. At the end of 1954, 106 American and more than 400 non-American employees were devoting full time to training in the Aramco organization. In addition, there were 3 American and 189 non-American part-time instructors 2. Types of Training: As already mentioned, responsibility for the develop- ment of Saudi employees is decentralized and placed in the individual organiza- tional units in which the Saudis work. However, as a service for the operating organization, schools in all three districts (principal operating areas) provide classroom instruction in general knowledge (and some special) training of an elementary level. This program, operated by the district training divisions is known as general industrial training, "assigned" and "voluntary." As these names imply, the difference is that employees are assigned to the one during regular working hours and attend the other voluntarily during their spare time. A large number of employees attend both. The courses offered in this program are divided into six levels corresponding approximately to the levels of instruction of elementary schools in the Middle East. As another facet of the general industrial training program, the district training divisions also operate a special program for new records known as prejob training. (a) Assigned General Industrial Training: For the simpler jobs, in which some degree of motor skill is the chief prerequisite, related knowledges are not important. But Aramco's plans for the utilization of Saudis are not limited to the filling of such jobs, and contemplate giving Saudi employees the opportunity and help to rise as high as they can, each according to his ability and interest. Therefore, training in related knowledges is an important element in the training picture. This is true, of course, in any training program. It is differ- ent in Aramco only in that, firstly, we must usually start with elementary 296 TECHNICAL ASSISTANCE PROGRAMS education which, in industrial countries, is ordinarily obtained during child- hood, secondly, we must be selective in concentrating on men who have the necessary interest and ability to progress, and, thirdly, we must limit related knowledge training to essentials in order to provide the numbers of trained employees fast enough to meet the demand. The assignments to the schools are on a part-time basis, generally 1 or 2 hours daily, and must be properly balanced with training and experience appli- cable to the jobs. In many cases (clerical jobs, for example) in which knowl- edge is one of the most important tools of the trade, it is often necessary to fill each job with two men who alternate between half-day periods in school and on the job. The courses being offered by assigned general industrial training, include Arabic, arithmetic, English, general science, typing, drafting, office practice, and hygiene. English and arithmetic have by far the largest enrollments as both are important to a large number of jobs. The reading lessons in both Arabic and English introduce the trainees to much simple scientific, industrial, vocational, and other knowledge of a general nature. (b) Voluntary general industrial training: In contrast to the selectivity exer- cised in assigning employees to the schools during working hours, voluntary general industrial training is open to all Saudi employees who are able to keep up with the requirements of ordinary school progress. There is a natural selec- tion involved, however, since only those who have a real interest in self-improve- ment will devote spare time to this activity. The classes for day workers run from 5:15 until 10 in the evening. About half of the total enrollment is concentrated in the first hour, the period between the close of work and dinner time. Other schedules are available for shift workers. The courses presently being offered reflect the demand and are mostly con- fined to Arabic, arithmetic, English, and typing in both Arabic and English. English is by far the most popular subject and accounts for about half of the total enrollment. In time, as employees advance, both the level and the character of the courses will change. As previously mentioned, many employees attend voluntary classes to supplement the training offered on assigned time. (c) Facilities: During 1955 both Dhahran and Abqaiq districts are being pro- vided with new school buildings to house the general industrial training pro- gram, assigned during the day and voluntary in the evening. Both buildings are of the same design except for size, Abqaiq having 20 classrooms and Dhahran 24. In addition, the buildings will each contain a science laboratory, a library, a large room for general lectures and film projections, a drafting room, a teach- ers' room, and administrative offices. The buildings will be well ventilated and lighted, and air-cooled during the warm months. The Ras Tanura district already has a suitable school building built some years ago. (d) Campaign against illiteracy: Since the year 1953, the Government has carried on a campaign against illiteracy in an effort to improve literacy among the Saudi Arabs in their own language. Aramco has undertaken to provide a program for its employees to assist in the Government campaign. The facilities are separate from those devoted to voluntary general industrial training. Since there are monetary rewards, many employees are attracted who have not enrolled in voluntary training and hence the program helps to fill the literacy gap. The Government supplies the text books and specifies the curriculum; Aramco pro- vides the facilities and operates the schools during the evening hours. The curriculum for this effort is basic, education by the Government continues through 2 years and provides for instruction in Arabic, arithmetic, geography, history, and religion comparable to that provided in the lower grades of the Government elementary schools. The experience in attendance and interest compares favorably with that in similar projects for adult education in America and Europe. Attendance has varied from more than 1,900 to less than 800. There is evidence that approxi- mately 20 percent of those who enrolled will remain in attendance until they have achieved a reasonable degree of literacy. (e) Advanced industrial training: An advanced industrial training center in Dhahran offers training of a secondary school level to Saudi employees drawn from all parts of the company, i. e., from all three districts and the general office. The training is gradually being placed on a cooperative basis, under which the trainees will alternate between periods in school and periods of guided work TECHNICAL ASSISTANCE PROGRAMS 297 experience under their own supervisors. This encourages both the supervisor and the trainee to take the appropriate amount of interest in his development. The numbers ready for this type of advanced training have been small but are expected rapidly to increase in the future. This program serves the same purpose as general industrial training at a more advanced level. It is intended to provide training in knowledges and special training for selected employees who seem to have potential qualities for greater responsibilities or higher level jobs. It can help clerks become accountants, typists become secretaries, or craftsmen or operators to become supervisors. For certain well-qualified employees it also serves as preparation toward eventual college education in the colleges in the Middle East. (f) Nurses' training: Basic training for Saudi male nurses was inaugurated. as a regular part of hospital operations in 1947, and a special school to systemize the training was established in the following year. In 1951, the first group of nine student nurses trained in Dhahran were selected for continuation training at Kennedy Memorial Hospital, Tripoli, Lebanon, as described in the medical section of this report. 3. The development of the Saudi employee-(a) Recruiting and selection: Saudis from various parts of the country report to the Aramco recruiting offices, though naturally the majority are drawn from the immediate area of the com- pany's operations. The Saudi work force is made up of about 20 percent from Bedouin tribes and 80 percent from the towns. Physical fitness is, of course, a prerequisite for employment and physical deficiencies account for a large number of rejects. The minimum employment age is 16, although exact ages are unknown to the majority of Saudis, who do not give birthdays the importance they have in Western countries. Allowing for this inaccuracy, employment age runs ordi- narily between 14 and 25 with exceptions on both sides. Aramco now, fortunately, has a Saudi general classification test, the result of 3 years of research, giving a fairly reliable index of intelligence, defined primarily as job-learning ability. By this means, the Saudis may be grouped into five classes of general aptitude for purposes of predicting their ability to learn and hence the test acts as a valuable aid both in their selection and in guiding them into the most appropriate fields of endeavor. (b) Development as an employee: After completing some preliminary prejob training, the Saudi becomes one of Aramco's work force and a member of a work- ing organization. The emphasis given to training in this memorandum does not mean that Aramco is merely operating a large training school so far as Saudis are concerned. What advancement the Saudis are able to make after employ- ment is a matter of promotion resulting from improved work performance and work value. In this respect, the Aramco situation is not unlike the opportunities for advancement commonly offered in Western industry. The difference is largely one of degree in the extent to which the employer is willing to extend a helping hand to those employees who have an interest in advancement and in the level from which training must start. The Aramco situation is also different in the preference given to one group of employees (the Saudis) in any work at any level which they are qualified to perform. But work performance and value are still the criteria by which the Saudis are judged to merit promotion and not, as in a school, the successful passing of training courses and tests. The Saudi's development is in two essential parts: work experience and speci- fic training. This is unusual in the industrial pattern only in the fact that basic or elementary training and work experience are taking place concurrently rather than in sequence. 1. Work experience: The very act of performing duties under supervision and of having both to adjust to a discipline and to exercise some degree of choice and judgment in performing even simple tasks are in themselves, of course, of educational value to those interested in self-improvement. The quality of supervision, both from the viewpoint of the personal relations between the worker and his boss, and of the competence with which the worker is directed, is, of course, the very heart of Saudi development. Aramco depends largely upon its American employees who are close to the Saudis, and who di- rectly or indirectly supervise their work, to bear the primary responsibility for their development. And in the Aramco situation successful employees must be molded from raw material insofar as industrial experience is concerned. But there is a great deal more at stake than the mere learning of skills and knowl- edge. The more remote, but more important objective, must be to develop Saudis who can not only assist in the oil industry but can contribute to the growth and 298 TECHNICAL ASSISTANCE PROGRAMS improvement of their own society. To do so they must develop a confidence in themselves and a discrimination that will enable them to take advantage of new opportunities while retaining all their innate and traditional love of individual freedom, a particularly difficult task in the midst of the contest of propaganda and ideologies going on today. Given proper supervisory personnel, day-to-day experience on the job can be one of the most valuable kinds of training. 2. Specific training: Related knowledges as well as skill development are pro- vided for in the wage progress steps. Instruction in related knowledge which contributes only to a better understanding of the specific operation for which the Saudi is being trained is usually given at or near the job site, and classrooms for this purpose are now a common part of the picture in Aramco industrial areas. But if the related knowledges required are more general in nature, or if the training needed at any time by various units can be advantageously con- solidated, the foreman or supervisor may assign his men on a part-time basis to assign general industrial training; and herein, from an educational and planning viewpoint, lies the most complex and yet perhaps the most essential part of the overall Aramco training program. What employees should be as- signed to general industrial training, and how much general education should each employee receive? (c) General aspects of knowledge training: Aramco is not in the business of education for general cultural purposes and was not brought to Saudi Arabia for that purpose. Simple literacy, of course, is generally beneficial, and the workers should have enough related knowledges for an understanding of their work; but for the larger proportion of the Aramco jobs not a large amount of general knowledge is needed. This will be increasingly so as Aramco is able to stabilize its operations after a period of rapid expansion and organize its work as much as possible in the American industrial pattern of job simplifica- tion, which will mean greater efficiency for the company and offer the best op- portunity for the majority of the individual Saudi workers. Furthermore, adult education is obviously a different proposition in many respects from the education of children who must go to school whether they like it or not. The Saudi who can find great satisfaction in driving a tractor, for example, or performing a routine, simplified job in a plant or shop, is not likely to be greatly interested in classroom learning. If he is a truck driver by choice, he may willingly acquire enough knowledge to enable him to check his weights and prepare simple forms and even, perhaps, to understand the problems of the care and maintenance of his equipment; but he is not likely to be interested in knowledge for the sake of knowledge as such. On the other hand, the individuals who have the intelligence and other inherent qualities for higher levels of suc- cess are likely to be precisely the individuals who will apply great interest and effort in learning if they have the opportunity. The primary purpose of the general knowledge side of our training program is to give the more able Saudis the opportunity to progress to the limit of their potential, and what this analysis boils down to is that we must be able to identify these individuals as early as possible and preferably while they are still in the raw material stage. If they are to become rounded craftsmen, for example, or perhaps are destined for supervisory, managerial, or professional jobs, we must see that they receive the essential general education as they go along while they are still young both in age and in company service. The process of selection and selectivity must play a large part in the entire Aramco training program. On the one hand, it is wasteful, pointless, and even harmful to offer through surplus training a prospective prize of advancement to an individual who does not have the qualities to succeed beyond his present level. It is better for all concerned to make him happy in a job that suits him. On the other hand, through the process of opportunity and evaluation it is pos- sible for a Saudi to receive successively the essentials of elementary, secondary, and college education to help him qualify for succeeding steps of advancement in the company. As far as the able Saudi employee is concerned, his lack of education in child- hood only means that he will receive the amount of education needed for vocational success a few years later in life. On the other hand, if he should go through the normal process of elementary, secondary, and college education before taking a job in industry, he would still need special training and experience before reaching his potential value as an employee. Our Saudi employees are acquiring special training and experience concurrently with their education. As far as Aramco is concerned, it has a burden of general education which an industrial company does not normally have to provide, but its investment in TECHNICAL ASSISTANCE PROGRAMS 299 employee development is applied to selected individuals who are likely to succeed and be able competently to fill many positions in a Saudi Arabian industry now occupied by foreigners. (d) Training Assignments Outside Saudi Arabia: About 140 Saudi employees have been sent outside the country on training assignments, some of them more than once, since 1948. Some of these assignments have been to training centers for the indoctrination of new American employees, located at Riverhead, Long Island, from 1948 to 1951 and at Sidon, Lebanon, since that time. These assign- ments have involved both duties as Arabic instructors of American employees and special instruction of the Saudis in academic subjects. Ten-week summer-school programs for selected Saudis were inaugurated in 1949, when 40 Saudis were assigned to the American University of Beirut for intensive instruction in academic subjects. This program has been continued in subsequent years and has served the various purposes of special training, of broadening the horizon of the men involved, and of one means of selecting candidates for Aramco's Saudi scholarship program, established in 1951. Under this program, 12 Saudi em- ployees were enrolled at the end of 1954 as undergraduate students at Aleppo College and the American University of Beirut. 4. Summary and Appraisal: An educational and training program of this kind which is closely integrated with industrial operations and administration is not easy either to describe or comprehend, as compared to the usual school system approach. But there has been a unanimous management belief in the import- ance of assisting Saudis to participate in various aspects of the Aramco enter- prise. Many changes and improvements that have been necessary in the guidance of the program have been efforts to correct the imperfections of implementation which could be expected in imposing a complex educational problem upon a very busy operating organization. There are still many imperfections, and gaps are being closed as they are observed. There is still a great deal of room for im- provements in training methodology, including improved training materials, in- structor training and the use of audiovisual and other training aids. However, these refinements can properly be applied only after a process of detailed job analysis and planning which Aramco has been going through in recent years. The enrollment figures in all training programs for Saudis, by yearly averages, since the beginning of 1950 are as follows: 1950 1951 1952 1953 1954 Job skill, assigned GIT, prejob, and other specific training during working hours. 2,699 Supervisory, instructor, and specialized training dur- ing working hours. 3,278 5, 235 6, 319 5, 246 207 333 286 274 114 Total assigned enrollments. 2,906 Voluntary GIT.. 3, 611 5, 521 6, 593 5, 360 860 Campaign against illiteracy. Total enrollments. Minus duplications……… 1, 147 1,374 1, 429 1, 216 1,318 1, 127 3,766 4, 758 6, 895 9,340 7,703 602 482 634 1, 105 1, 228 Net number receiving training. Average number Saudis employed.. 3, 164 4, 276 6, 261 8, 235 6, 475 9, 729 12, 003 14, 242 14, 137 13, 705 Enrollment in programs of that kind varies from time to time and yearly averages do not give a true picture of enrollments at any one time. However, they give the best indication of trends. The drop in enrollments during 1954 is merely a reflection of a more stabilized work force and increased selectivity in training assignments. The results of training are best reflected in the shifts of Saudis from one grade to another. In the Aramco wage ladder, workers in grade 4 are getting into the skilled category, though the skills may be of low degree and are in a narrow field. In grade 5, the skills are of a higher order though still fairly narrow in field, while in grade 6, the workers are expected to be reaching journeyman status or the equivalent. In 1949 a so-called personnel planning committee established goals which were on the optimistic side and were predicated on an assumption that Aramco's further expansion would be at a 300 TECHNICAL ASSISTANCE PROGRAMS very much lower rate, and that operations would be more stabilized than they have proved to be. Nevertheless, it is interesting now to compare the results with the predictions: Grade 6 and above. Grade 5 Grade 4. Total grade 4 and above.. 1 This was actually a midyear goal. End 1953 End 1949, actual End 1954 Goal Actual Goal 1 Actual 80 866 742 975 1, 141 301 2,055 1,373 2,081 1, 843 1,263 1, 727 2, 897 1, 684 3,558 1, 644 4,648 5,012 4, 740 6, 542 In a country in which general education itself is very new it could not be expected that there would be more than a sprinkling of Saudis qualified for higher level jobs requiring a secondary and college education. This is indeed the case, but there are few and the numbers will increase as time goes on. The 12 Saudi employees now taking courses in Middle Eastern colleges are the products of Aramco's own training program supplemented by special prepara- tory-school help from the college. A few Saudis who have received a secondary or college education before employment have joined Aramco, and it is hoped that there will be increasing numbers in the future. The above discussion has concentrated on the problems and methods of indus- trial training in Aramco. A fair question would be "What has this to do with technical assistance to the economy of Saudi Arabia?" The answer lies in the leakage of employees to the general economy. A very high proportion of local Sauui entrepreneurs are ex-Aramco employees. Not only are the rewards for unusual enterprise great in an economy expanding as fast as Saudi Arabia's, but Aramco has deliberately fostered loss of competent employees to local enter- prise in the belief that the gain to the general economy outweighed the incon- venience to company operations. Such employees have been granted leaves of absence so that should they decide to return to Aramco employ they may do so without loss of status. Aramco has no reason to regret or to change this policy, though admittedly there are no statistics available by which to measure the effect on the economy of those men who have been trained by Aramco and have left its employ. D. INDUSTRIAL, COMMERCIAL, AND AGRICULTURAL ASSISTANCE (a) General The two divisions of Aramco directly concerned with providing technical assistance as a major portion of their business are the Arab industrial develop- ment department and the community development division. In addition, how- ever, a great deal of technical assistance is rendered to the economy by reason of the oil operations themselves or on direct specific requests from the Saudi Government. The cost of most of such work for the Government is estimated in advance and approved by the Government for a charge to their account before any work is undertaken other than that which may be necessary to arrive at a reasonably accurate estimate of cost. (b) Technical assistance derived from oil activities (1) Water.-One of the most important byproducts of the oil industry in Saudi Arabia is the increase in understanding and development of the country's water resources. (2) Roads.-The second most important result of the oil operations has been the vast improvement in communications in the Eastern Province. The road network necessary for the oil operations has been of immense benefit to the general public. In addition to the road network itself, the development of water supplies in previously waterless locations as a result of exploration activities has opened areas for grazing which formerly could be frequented by the tribes only in the cooler, rainy seasons of the year. Development of special transportation equipment, combined with the more frequent watering points and a better knowl- edge of the country, has opened up most of the Rub' al Khali, including areas which a few years ago were considered to be impassable. TECHNICAL ASSISTANCE PROGRAMS 301 $ (3) Airstrips.-Numerous airstrips have been located for use in company exploration activities. Most of these strips are used for only a few months and then abandoned. On the other hand, at the oilfields themselves and at large central pump stations more or less permanent airstrips are maintained. These have contributed to improved rapidity of communications to various parts of the Kingdom, particularly for governmental purposes. (4) Maps.-Another important byproduct of the oil activities has been the preparation of accurate maps for very large areas of the peninsula which had been previously unmapped. These maps, together with the establishment of extensive triangulation systems, will undoubtedly become increasingly important and valuable to the Government in the years to come as it carries out its own development schemes. At the request of the Government, a map of the peninsula, based on a compilation of the best data available at the time, was published by Aramco in Arabic and presented to the Government for use in the school system. (5) Water wells. During the course of drilling shallow wells for exploratory purposes, 46 flowing wells have been drilled and left for the use of nomads. other wells have been completed and left in such condition that pumps could be installed upon them should it prove desirable to do so. Pumps have been installed on some of these wells and are being operated either by the Government or by Aramco for Government account. 154 (c) Technical assistance requested by and furnished for the account of the Saudi Government (1) Water.-In addition to the basic geological information which has been furnished to the Government, Aramco has also performed special hydrological surveys for Government account in areas of particular interest to the Govern- ment; namely, around Riyadh, the capital of the country; in certain other areas of the interior; and inland from Jiddah, the principal port on the Red Sea. At the request of the Government and individuals, some 240 water wells have been drilled, most of them in the Riyadh and Al Kharj areas. The great major- ity of these wells has been drilled with equipment supplied by the Government or the individual landowner, sometimes operated by Aramco personnel and some- times by other crews, but all of them under Aramco technical supervision. Not counting those which were drilled by Aramco for geological purposes and turned over to the Government for its use, the estimated capital investment in these wells, largely by the Government, is in excess of $2 million. In addition, the Government pays Aramco about $200,000 annually to operate and maintain some 20 other wells for the benefit of travelers and tribesmen. (2) Agricultural.-Since 1938, the Saudi Government has had an interest in the development of agriculture in the Al Kharj area (about 60 miles south of Riydh, the capital), where comparatively large supplies of water from natural pits can be obtained by pumping. Aramco has provided to the Government a considerable amount of technical advice in respect to the water supply and the method of development of this water. In addition, for some 12 years, Aramco has provided for the operation and maintenance of the whole agricultural devel- opment at Al Kharj, including hiring of American personnel for Government ac- count and complete supervision of the project. Some 3,000 acres are under cul- tivation and about 1,000 men are employed. The farmlands produce somewhat over $2 million worth of products annually at a cost to the Government of about $2½ million for both capital and operating expenses. The annual cost is likely to decrease in the future inasmuch as during the past 2 years the Government has been building up herds of dairy and beef cattle by importation of registered stock from the United States. While main emphasis is on production, the farms are also used to some extent for training and experimental purposes. (3) Industrial. The largest single industrial project undertaken by Aramco on behalf of the Saudi Arab Government is the construction of port facilities and a standard-gage railroad 350 miles in length from Dammam on the Persian Gulf to Riyadh, the capital of the country in Najd, the central province of Saudi Arabia. The railroad, including the pier facilities at Dammam, cost nearly $60 million. The annual income of the railroad and pier is about $7 million. (4) Equipment.-Aramco has rented to the Government, from time to time, specialized construction equipment, such as bulldozers, graders, cranes, and power shovels, at cost. While the amount of equipment rented not only varies widely and is not significant in comparison with such construction projects as the rail- road, the ready availability of the equipment has been extremely useful to the- Saudi Government. 59637-55-20 302 TECHNICAL ASSISTANCE PROGRAMS (5) Expert services.-From time to time Aramco has prepared studies at the request of the Government on subjects varying from the design of a broadcasting station to an outline for a study of desert plants. A good many of these projects have been subsequently dropped, sometimes as a result of the preliminary studies and sometimes because the Government decided the expenditures involved in carrying them out were not worthwhile. (6) Purchasing.-Aramco, in the past, has assisted the Government to a considerable extent in purchasing special equipment of a technical nature, either by providing specifications to the Government or by actually handling the purchases through its own purchasing channels. As the Government builds up its own administration and as more commercial agencies become established in Saudi Arabia, this kind of assistance has decreased significantly. (d) Technical assistance by Aramco initiative (1) General.—Under this heading are described types of assistance which are largely a result of Aramco's own initiative. Aramco desires to see more and more of the supporting activities necessary to the oil business placed in the hands of Saudis and divorced from Aramco with the general purpose of attaining, some time in the future, a relationship between Aramco and the surrounding communities somewhat similar to that existing in the United States between an oil company and the communities in which it is carrying on its business. In addition, Aramco has given technical advice gratuitously to the the Government and the public in fields not related to the oil business where, by reason of its technical studies, it had obtained information which would be of value to the Government or the public. (2) Water. In addition to the information gained through normal geological work connected with the development of oil and through projects undertaken for Government account, Aramco has attempted to keep the Government informed of its views on the development of the water supply of Saudi Arabia, with special emphasis on the need for conservation. Aramco has been especially sensitive on this point because many of its geologists were personally familiar with the waste of water resources that occurred in parts of the United States by failure of the local governments to take adequate measures in time to conserve the supply of artesian water. In addition to preparing reports to the Government setting forth the views of Aramco as to how the water supply should be developed and protected, a full color film, made in Arabia with local Saudi actors and Arabic sound track entitled "Waters of the Desert," was prepared to explain to the Saudi public the origin of ground water, the general principles of artesian flow, and the fundamentals of conservation. (3) Agriculture.—As related above, Aramco has had for a number of years the responsibility for operating the Al Kharj agricultural project for the Saudi Government. Employees of this project are employees of the Saudi Govern- ment, although paid and supervised by Aramco. In order properly to discharge its responsibilities, Aramco has had on its own payroll for the past several years an experienced agriculturist who, in addition to advising management as to the Al Kharj project, has been available for consulting service to the general public and the Government. As a result of his studies, Aramco is now, with the concurrence of the Government, undertaking an engineering study to deter- mine whether the water table of the Qatif Oasis, an area of some 9,000 acres, can be lowered by gravity drainage from its present depth of about 1 foot below the surface to 2 to 3 feet. Results of this study will be made available to the Government so that the Government may, as it wishes, undertake the actual drainage project, should this be feasible. This is a most important pilot-plant kind of investigation. If the area can be drained sufficiently to lower the water table some 2 feet, the way is opened for a vast improvement in agriculture, improvement in the health of the inhabitants, improved conservation of water, and the possibility of introduction of the use of commercial fertilizers and new types of crops. (4) Industrial and commercial.—(a) General: This is the area in which Aramco has concentrated its greatest effort in providing technical assistance to the local economy. The idea of providing such technical assistance has been present from the very early days of Aramco's operations. In 1937-38 three water wells were drilled in Jiddah at Government expense in an attempt to develop a new water supply for the town. However, comparatively little was accomplished until 1945 and in the following year the Arab industrial develop- ment department was established as a distinct organization component. Not only did Aramco wish to provide technical assistance to local people to develop TECHNICAL ASSISTANCE PROGRAMS 303 a local economy which could in large measure support the oil industry, but it became necessary to channel into one department the numerous requests coming from the Saudis themselves for technical assistance on various aspects of new enterprises which were being founded in eastern Saudi Arabia. Initially, efforts were devoted principally to development of basic community services, such as transportation and power, and to bringing into existence a construction industry to support the needs of both Aramco and the rapidly growing communi- ties resulting from expansion of Aramco's activities. Later, the community development division was created to assist in problems which had to do largely with the development of communities as such, their layout, and the creation of suitable housing both for Aramco employees and for those trades and services necessary for the employees. It has been Aramco's policy to encourage the growth and development of local communities and to encourage the ownership by its employees of their own homes within own communities. This in contrast to the policy of construction of artificial company camps in which every phase of the employee's life is dictated by the employer. Aramco has been able to pursue such a policy because its installations are of such a nature they are likely to remain in being for at least two generations, thereby assuring stability of values in the new communities growing up around them. Upon this background, the scope of present technical assistance is described below. Based on the kind and character of assistance given, there are four broad categories: I. Development of construction contractors. II. Direct technical design and operating advice to new individual industrial activities. III. Initial advice, technical or commercial, to smaller, more competitive busi- nesses that, once started, become epidemic. IV. Larger and more technical enterprises given continuing technical advice and assistance and, in some cases, management support. The values of capital investment, capacity, number of employees, and volume of annual business given are only estimates as Aramco has no direct access to the accounts of most of these enterprises. (b) Construction contractors: In category I there are presently about 384 officially registered contractors in the area of Aramco operations. Only 200 of these are currently active. On the average, about 135 are engaged at any one time in work for Aramco. During 1954 there was an average 6,440 workmen employed on work for Aramco alone. In 1954, Aramco payments to contractors amounted to about 32,250,000 Saudi riyals, or $8,600,000. In addition, these and other contractors are active in work for the Saudi Arab Government and the public. It is significant to note that the ability of these contractors and their working forces has improved considerably over past years and they are now able to undertake complete turnkey contracts, supplying supervision as well as labor and material. 1950.... 1951. 1952.... 1953.... TABLE I Average number active contractors Average number contractor employees Total annual payments to Saudi Arab contractors in Saudi riyals 55 95 4,020 6, 340 11, 784, 800 21, 000, 000 149 11.170 47, 495,000 160 8,600 41, 115, 000 135 6, 440 118 7,300 32,273, 343 30, 733, 000 1954.... Average. NOTE.-January 1955: 384 registered contractors, 200 actively working. (c) Individual industrial enterprises: In category II, which includes activities where technical assistance in design of facilities is given, the activity covers 16 general fields and help has been given to at least 129 individual businesses. These have investments or projected plans for investment totaling over 12,500,000 Saudi riyals, or $3,300,000. These enterprises currently employ at least 1,100 people in operations. Additional people are employed in construction but the number of these is not known. The gross annual income of these enterprises is not available in many cases, but the portion that can be estimated totals 48 million Saudi riyals, or $12,800,000. (See table II.) 204 TECHNICAL ASSISTANCE PROGRAMS TABLE II Number of estab- invested Capitol lish- (Saudi Capacity ments riyals) Number of em- ployees Volume of annua! business (Saudi Concrete block plants. Garages Ice plants. Petroleum product distrib- utors: (a) Service stations. (b) Bulk plants.. Laundries. 69 1,500,000 1,300,000 40 tons per day. riyals) 1 200 40 360, 000 87 4,500,000 5,500,000 gallons per month.. 420 5 2 650, 000 150,000 gallons per month... 44, 500, 000 40 3 750, 000 25,000 blocks per day. 50 3, 000, 000 2 555, 000 110 Bottling plants.. 32 560,000 750 cases per day 50 Carpenter shops. 4 60 Water-well drilling con- 5 530,000 82 wells per year. 24 325,000 tractors. Concrete tile plants. 1 20,000 tiles per month. 15 24,000 Machine shops-- 1 * 200, 000 25 Foundry. 1 35 Print shop 1 2 presses. 8 Hospitals 52 2, 000, 000 Farming Individual residence build- ing. (6) (?) Town planning and other assistance to municipali- ties. ¹ One large unit not yet operating. Estimate total employees will be 200 when all are operating. 2 Investment in trucks, trailers, etc. Fixed plant facilities are owned by Aramco and leased to operator on a commission bases. 3 Largest plant, a Coca-Cola plant, is not operating yet. 4 Aramco gave financial as well as technical assistance. 5 Both hospitals are presently in design phase. 6 House designs for about 300 employees' houses and about 200 guaranteed rental units have been prepared 7 Technical assistance has consisted of layout and zoning planning, preliminary studies of streets, sewers and other facilities. (d) Small Commercial Enterprises: Category III covers enterprises which are started by advice from the Arab Industrial Development Department or occa- sionally improved by suggestions but are relatively self-running and self-growing once they are started. Taxi operation is perhaps the most typical example. A few people were encouraged to purchase and operate taxis in the company camps and from this start the business has grown so that every town in this vicinity has a taxi park with large numbers of vehicles for hire. The total number is esti- mated to be several thousand. Ownership in many cases is by individuals and, although no statistics are available, the total capital invested and the number of people employed are considerable. The principal fields covered by these enterprises are: (1) Taxis, (2) trucking, (3) automotive parts stores, (4) wholesale food importers, (5) retail hardware and/or tool stores. (e) Large technical enterprises: Category IV covers more complex or larger enterprises wherein continuing assistance in technical matters or management is required. The development of local power companies is a primary example of this type of enterprise. The development of these companies has turned more upon the generation of concepts of management and administration, which have been far more difficult to explain and obtain acceptance of, than have purely technical matters such as the size and kinds of generators or the design of dis- tribution systems. The impact on the economy, however, of the efforts of intro- ducing new concepts of administration, management, and business organizations may be more important and far-reaching than the advice and assistance given on a more technical level. The known investments or programed investments in enterprises of this kind total 9,500,000 Saudi riyals, or $2,400,000.. Some 290 people are employed and their current gross annual income is estimated to ex- ceed 2 million Saudi riyals, or $530,000. The annual income will increase several fold when present expansion is completed as the demand for service is already in existence. It is probable that the type and size of these kinds of enterprises will even increase more rapidly in the future as the demand for services that can be provided only by these kinds of organizations is growing rapidly. (See table III.) TECHNICAL ASSISTANCE PROGRAMS 305 TABLE III Volume of Number of establish- ments Capital invested (Saudi riyals) annual Capacity Number of employees business (Saudi riyals) Commercial fishing. Dhahran Electric Supply Co. Khobar Electric Co- LPG plants.. 1 Covers motor fishing boats only. 2 Covers fish purchases by Aramco only. 1 14 490,000 **200 2 205, 000 1 3 2, 400, 000 1,300 kilowatts.. 35 4 800,000 1 5 2, 500, 000 290 kilowatts. 15 275,000 3 6 4, 000, 000 3,000 gallons. 40 700, 000 3 Provides capital for 1,200 kilowatts additional capacity. 4 1,700 customers. 5 2,000,000 Saudi riyals capital available for current expansion. 63,300,000 Saudi riyals available for facilities planned or under construction. (f) Summary: Summing up, these 4 categories, to the degree that statistics are available, account for an investment of over 22 million Saudi riyals, or $5,900,000, an annual income of over 82,250,000 Saudi riyals, or $22 million, and the employ- ment of over 7,800 people. It is important to point out again that the above statistics cover only enter- prises which are directly influenced by Aramco's technical-assistance program and which can be estimated with reasonable accuracy. In turn, the activities of these enterprises are observed and copied in part or in whole by others who do not request assistance directly from Aramco; and, thus, the influence has spread over a much greater part of the economy than merely that which is in direct contact with Aramco. Senator HICKENLOOPER. The next witness is Byron Larabee, execu- tive vice president of Firestone Plantations Co. STATEMENT OF BYRON H. LARABEE, EXECUTIVE VICE PRESIDENT, FIRESTONE PLANTATIONS CO. Senator HICKENLOOPER. Will you please be seated, Mr. Larabee. We are glad to have you here this morning, and we will be glad to have your views. Mr. LARABEE. Thank you, sir. Senator HICKENLOOPER. What is your method of presentation? Do you have a prepared statement? Mr. LARABEE. Yes, sir; I have. I have followed the suggestion which was made, that perhaps what would help the committee most is a story of what we have done in Liberia. I have made no observations with reference to the FOA program, but I am quite prepared to answer any questions that anyone would like to ask on the subject. Senator HICKENLOOPER. Would you care to read your statement? Mr. LARABEE. I would like to, sir. Senator HICKENLOOPER. You may proceed, sir. Mr. LARABEE. Thank you. ESTABLISHMENT OF FIRESTONE PLANTATIONS CO. IN LIBERIA The advent of an international scheme for the control of the pro- duction and sale of natural rubber prompted Mr. Harvey S. Fire- stone to insist that Americans produce their own rubber. Harvey S. Firestone, Jr., undertook a world survey of suitable sites, one of which was the Republic of Liberia in West Africa. 306 TECHNICAL ASSISTANCE PROGRAMS The original exploration work for establishing the Firestone planta- tions in Liberia was begun in 1924. This first work having provided encouraging results, other parties were dispatched to Liberia to make soil surveys and draw a general plan of operation. Negotiations with the Liberian Government got underway soon after and continued until a final agreement was reached late in 1926. In the meantime, as an evidence of good faith, a felling, clearing, and planting program was started in 1925, and 748 acres of rubber were planted in 1926; 11,000 acres were cleared, felled, and planted in 1927, and additional acreage has been planted every year since that date. Many legal difficulties cropped up as negotiations with the Liberian Government proceeded. A constitutional prohibition prevented the outright purchase of land by the Firestone Plantations Co. An effec- tive solution came about through the execution of a document which has come to be known as the planting agreement by which the Planta- tions Co. was granted the right to use the areas required for a period of 99 years. Title remains in the Liberian Government and all in- stallations revert to the Government at the end of the lease period. The planting agreement set forth in outline the rights and duties of the Plantations Co. in carrying out its operations in Liberia. The Government granted the company the right to freely export the products of its plantations and to import without duty all materials and equipment necessary to carry on the development and operation of the plantations. The company was permitted to bring into the country foreign employees required to carry on the operation and development of its plantation, and was granted the exclusive use of the areas leased to it. While the planting agreement has been amended from time to time to meet changing conditions, it is in the main basically the same today as it was in 1926, so far as its operating features are concerned. In 1935 the question of tax exemptions arose and the Plantations Co., upon the prepayment of certain land rents and the payment of a sub- stantial sum of money, was granted certain exemptions from taxes and duties. These exemptions continued until the year 1949 when the Firestone Tire & Rubber Co., as lessee under the lease agreement, voluntarily agreed to pay a tax according to a schedule set out in the agreement, should the Government at any time in the future enact an income tax law of general application. Such a tax law was enacted in 1950. Taxes under the agreed schedule have been paid on Firestone Plantations Co. net income since that time. The present rate is 25 percent, which by the way, I believe, is higher than in similar coun- tries. Prior to this change in the tax exemptions, the Plantations Co. had paid various taxes, both on its own behalf and on behalf of its em- ployees, so that in each year of its existence as an active production. unit, the Plantations Co. has made a substantial contribution to the tax income of the Republic. FINANCE CORPORATION'S LOAN TO LIBERIA At the time negotiations were being carried on toward the enact- ment of the planting agreement, Liberia was in the throes of a finan- cial crisis brought on by lack of sufficient revenues to cure a default in her payments on an international loan. Under the provisions of TECHNICAL ASSISTANCE PROGRAMS 307 the underlying loan agreement, a receiver of customs had been in- stalled and little revenues remained for carrying on Government op- erations. Therefore, concurrently with the negotiations being carried on for the execution of the planting agreement, Liberia's financial plight was considered. As a result of this, a corporation known as the Fi- nance Corporation of America was created by Firestone. In 1926 this corporation made a loan to Liberia in the amount of $2,500,000 and agreed to extend a similar credit to her under certain conditions. The agreement under which this loan was made provided for the establishment of a fiscal service in Liberia and set forth pro- visions for accounting, budgetary control, and an effective method for the collection of revenues. In the beginning, interest on the bonds was 7 percent but, through a series of amendatory agreements, the interest rate was lowered to 412 percent. This loan was completely paid on December 31, 1951, well in advance of its 1966 maturity date. At the present time, Firestone has under lease in Liberia 212,000 acres of land situated in three different counties; 85,000 acres of it are planted to rubber trees, and thousands of other acres are utilized for factories, roads, homes for both our Liberian and foreign staff, plantings of oil palms, fruits, and various types of experimental plantings. Our botanical research department utilizes an area of several thousand acres. Several thousand acres are devoted to timber re- serves and, of course, many thousands of acrees are swamp land and areas adjacent to streams which are subjected to seasonal floodings. The labor force employed fluctuates with the season in Liberia. In December 1954 there were 29,281 Liberians on the rolls. Of these, 16,035 were tappers, utilized in tapping 75,472 acres of rubber in bear- ing. The balance of the staff is made up of supervisory, clerical, factory, maintenance, transportation, and other workers engaged in the many phases of this complex operation. Over 300 of them were engaged in health and sanitation work. More than 1,000 were engaged in processing the products of the plantations and several thousand were engaged in preparing new areas and replanting old areas. All of these employees have made available to them medical care, educa- tional and recreational facilities, housing and training programs, free of cost. Their taxes are paid for them by the company and their requirements of staple food and other essential items are sold to them at the same prices which prevailed prior to World War II. SCHOOLS Schools are maintained on the plantations for the children of Liberian staff members through the elementary grades. The course of study is that set by the Liberian department of education and teachers are selected by the same department. However, the school buildings, books, and supplies are furnished by the company. The company houses the teachers and pays their salaries. The Plantations Co.'s department of education operates a vocational training program in which classes are conducted for office personnel and on-the-job * 308 TECHNICAL ASSISTANCE PROGRAMS instruction is given in most of the trades. At the present time some 800 headmen and overseers the secondary supervisory force-are being given both training and refresher courses. An active adult educational program is offered by the Plantations Co. as an additional service to its employees. As a rule, the school buildings located in the most populous areas are in use from about 8 in the morning until 10 at night. Recreation facilities in the form of clubhouses and playing fields are provided. Athletic leagues are in operation and moving pictures are shown throughout the plantations. Groups of native singers, dancers, and acrobats are employed and they move from village to village on a regular schedule. Compensation, under a Government-approved plan, for injury or death as a result of employment has been a part of the company's policy in Liberia for years. As a direct result of an active safety and medical program, the percentage of fatalities and permanent disabili- ties has been substantially reduced. Vacations with pay according to service are given to all employees classified above the common-labor category. Service records are kept for these same employees and awards given on appropriate anni- versaries. I failed to state that we also have an anuity program for these same people-a retirement program. From the beginning of Firestone's operations in Liberia, it has been the policy of the company to assist in the development of the country and the improvement of its economy wherever the same might be done logically within the limits of an industrial enterprise. MEDICAL SERVICE Early in the program, it became apparent that there was a most urgent need for medical service, thus from the beginning one of the major items in Firestone's operating budget was for medical services. From a program claiming but part time of 1 of the 3 or 4 doctors in the country, our medical service has been built up to the point where, at the present time, we operate with a staff of 10 physicians and surgeons, a well-equipped laboratory service and modern equip- ment for the diagnosis of diseases. In this department, we operate a full-time school of nursing and give training for laboratory assist- ants, field dresser service, sanitation workers, and others in the public- health field. At no time since operations began have the services of the medical department been limited to employees of the company and, even in these days of much-expanded Government public-health program in Liberia, roughly 25 percent of those treated at the plan- tations' hospitals and dispensaries are persons having no employment connection with the company. In the earlier days of our operation, the company sponsored a survey in tropical diseases carried on by the late Dr. Richard P. Strong, of Harvard University, and his able group. Later, through the organizations of the American Foundation for Tropical Medi- cine and Harvard Medical School, we financed a program of survey and treatment of African sleeping sickness in Liberia over a 3-year period. In 1947 Mr. Harvey S. Firestone, Jr., made available to the Ameri- can Foundation for Tropical Medicine funds for the establishment of a research institute in tropical medicine in Liberia. This unit, TECHNICAL ASSISTANCE PROGRAMS 309 ་ known as the Liberian Institute, was formally dedicated in January 1952 although it had been in partial operation for a number of months. In the past, the institute has received some assistance from point 4 through the United States Public Health Service. IMPROVED COMMUNICATIONS FACILITIES One of the greatest needs of Liberia from the time of its beginning has been better means of communication within the country. In 1924 there were only three automobiles and a few miles of roads and streets. The existence of the tsetse fly prevented the use of domestic beasts of burden and deprived Liberia of that assistance to her eco- nomic development. The establishment of the first unit of the Fire- stone plantations on the Du River, some 20 miles from Monrovia, brought about the development of that stretch of road and encouraged the acquisition of automobiles by the general public. As the Firestone operation expanded farther away from Monrovia, a road of sorts followed. In the midthirties, Firestone undertook for a nominal amount to reconstruct and improve the road from Monrovia to an area adjacent to the plantations. With this impetus the Government then extended this road farther inland. Following this, district commissioners and chiefs all over the country began the construction of small stretches of road. Gradually, as funds became available, the Government connected these various stretches of roads and bridged the streams in a temporary fashion. During World War II, the United States Army began some road construction, but termination of the war in this area also terminated this project. At the request of the Government of Liberia and the United States Government, Firestone completed this road project to the French border. Firestone also constructed, at its own expense, the first section of the road leading to Harper in the southeastern corner of Liberia. As the roads moved forward, small businesses of all kinds followed and the areas through which the roads passed quickly became more productive of food supplies and materials for export. At the present time, Liberia, with a motor registration over the 1,500 mark, is paving the first section of its main arterial highway. Firestone has trained practically every one of its mechanics, truck- drivers, medical assistants, and construction workers, as well as all of its various technical and mechanical assistants throughout its fac- tories and laboratories. The more forward looking of these people so trained have set themselves up in business or joined with others in carrying on the trades which they have learned. INDEPENDENT LIBERIAN RUBBER INDUSTRY The most dramatic instance, perhaps, of the accomplishment which can be fostered by a combination of financial assistance and example is the rubber-plantation industry which the people of Liberia have created for themselves. As Firestone began the planting of rubber, several of the leading men of the country, including ex-President King and ex-Secretary of the Treasury James Cooper, began the planting of rubber on a small scale. At the same time here and there over the country, Libe- 310 TECHNICAL ASSISTANCE PROGRAMS T rian native farmers secured a few rubber seeds from us and planted a few hundred trees. Soon the research and planting staff of Fire- stone began to receive requests for planting materials as well as ad- vice and aid in the planting and production of rubber. For the past 17 years, this assistance program has been an integral part of the plantations company operation. From this rubber-planting program and the Firestone training programs, there has come to exist in Liberia a small but firm nucleus of independent businessmen and farmers without which, in our opinion, no country can advance and prosper. At the present time, more than 650 independent Liberian rubber planters are producing for the market. During the year 1954, they produced approximately 6 million pounds of rubber. We estimate that this production will probably treble within the next 8 or 10 years. Liberia under the leadership of President Tubman is now making real progress in developing her economy and educating her people. She has enlightened and aggressive leadership. We at Firestone feel a justifiable pride in the progress which Li- beria is making as we believe that we have contributed in a substantial way to the success of their program of development. Senator HICKENLOOPER. Thank you very much, Mr. Larabee. Senator Green? RELATIONS TO LIBERIAN GOVERNMENT Senator GREEN. Mr. Larabee, the company seems to have been ex- ercising a number of functions which are usually exercised by the Government. I am not criticizing this, but I would like to know how far it goes. For instance, does it exercise any of the judicial func- tions of the Government? Mr. LARABEE. No; we exercise no judicial functions. Senator GREEN. Are the laws the same for everyone? Mr. LARABEE. The laws are the same for everyone. Senator GREEN. Has there been any friction between the company and the Government of Liberia on these questions? Mr. LARABEE. None that I know of, sir. In the beginning, of course, there were arguments until we finally got settled into a contract. But as I stated, the contract today is practically the same as when we first began. There is no friction be- tween the Government of Liberia and Firestone Plantations Co. at all. Senator GREEN. Then the company really is a good example to the people of the country in general as to what can be done. Mr. LARABEE. We try to be, let's put it that way. Senator GREEN. And are you emphasizing that? Mr. LARABEE. That is what we are emphasizing. We are emphasiz- ing the things that can be done, for example, by financial assistance- we have given financial assistance to the local farmers, and we have had what we call extended credit programs-it takes 6 years to bring in a rubber plantation, and they have to have financial assistance, both in carrying that on and in getting that into production, buying supplies. We have furnished those things at our cost, and we have also pro- vided them with all the necessary research and maintenance assist- ance. We have a staff of people who inspect their farms and answer their questions for them, tell them how to solve their problems. And we train the native Liberian overseas for them before they begin TECHNICAL ASSISTANCE PROGRAMS 311 production, and we buy their rubber from them at the world market price. Senator GREEN. If the company employees got into a fight, would they be tried by a Liberian court rather than by the company? Mr. LARABEE. There are no company laws, the company is fully under the jurisdiction of the Liberian Government. Senator GREEN. If one of the employees claimed he had an agree- ment with another employee which was enforceable by law, would that be turned over to the Liberian court for decision? Mr. LARABEE. The Liberian Government has courts on the planta- tions, sir, they have their own police force, their own judges, their own constabulary on the plantations. There are no extraterritorial rights-if that is the word we are talking about. Firestone is exempted from no laws except some few with reference to taxation, which I explained, and with the exception of certain duties on equipment and material used in agricultural pursuits. Senator GREEN. What is the form of government in Liberia? Mr. LARABEE. It is a republic, sir, and has been for 107 years. Senator GREEN. Is it divided into states? Mr. LARABEE. No, it is not a federation; it is one state divided into counties. Their government is patterned after that of the United States, they have a senate and a house of representatives, and a su- preme court and secondary judiciary system. The president is elected. Senator GREEN. Is that working pretty well? Mr. LARABEE. It works quite well-maybe not sometimes within our standards, but within theirs it does well. Senator GREEN. Thank you. Senator HICKENLOOPER. Senator Mansfield? TERM OF EMPLOYMENT Senator MANSFIELD. Mr. Larabee, when you hire somebody to go to Liberia, for how long is the contract? Mr. LARABEE. Two years. Senator MANSFIELD. Is that because conditions there are quite dif- ficult and that is the normal period that the company thinks a man should serve? Mr. LARABEE. Well, Senator, you know you sort of get in a rut sometimes. We started with 2 years, 30 years ago, and we still have 2 years. After people have some service we make no great point of whether they come home earlier or later. It is not by reason of health. Liberia is very favorably situated in that regard. While it is a tropical country, we have been keeping weather records for years, and the highest shade temperature we have ever recorded is 97. I wish we could say that for Washington, sir. We have never had a death from tropical diseases—we have never had a death from disease on the plantations since it began, of our foreign staff; we have had 4 people who were killed by accident, 3 of them by drowning and 1 of them was run over by a truck. CROPS GROWN IN LIBERIA Senator MANSFIELD. You have mentioned in your testimony that in a decade you anticipate the local planters will treble their produc- tion of rubber. 312 TECHNICAL ASSISTANCE PROGRAMS Mr. LARABEE. Yes, sir. Senator MANSFIELD. Do you think there is any possibility that because of the interest of Firestone in rubber and the spreading out of the rubber planting idea to the natives of that country it might become a one-crop country? Mr. LARABEE. No, sir. The Government has given a lot of thought to that. They are also encouraging the planting of other crops, and there are plantings being made of oil palms, cocoa, and coffee. You see, as it is part of the rain forest area, it is pretty much of a tree- top country, in that they do better than the annual crops, although they raise other food crops such as vegetables and rice and that sort of thing But the government and the FOA, I might add-the FOA and the Liberian Government jointly have quite a large government re- search station set up now, and they are testing and developing differ- ent types of these plants which I have mentioned, cocoa, coffee, oil palms, and things of that nature. And they are furnishing those to local farmers, and to the people of the tribes, and showing them how to plant them, how to take care of them, and encouraging them to maintain themselves otherwise during the waiting period. Now, that is a difficult thing, because Liberia, itself, has not been able to give financial assistance to these farmers, and there are no types of crop loans or farm loans, or loans of any type that are available. And that is one of the weaknesses of the system. Senator MANSFIELD. Then it is your opinion that the economy of Liberia is quite diversified, and will remain so? Mr. LARABEE. Well, Senator, I would say that in the next 10 years rubber will be the predominant crop, because it already is, and it would be very difficult to catch up with-but the emphasis will not be on rubber solely. RELATIONSHIP OF NATURAL-RUBBER INDUSTRY TO SYNTHETIC-RUBBER INDUSTRY Senator MANSFIELD. Well, now, speaking of rubber and the fact that it will remain the dominant crop, how does this emphasis on native, natural rubber coincide with the development of the synthetic- rubber industry? Mr. LARABEE. Well, I can only say to you what the surveys made both by our Government and by industry indicate. They indicate that there is going to be a growing demand for rubber of all types. And I believe there has been a presidential survey made, made several years ago, which indicated that by 1975, which is not too far away, there would be a shortage, unless there were increased plantings of rubber trees and an increased production of synthetic rubber. Of course, the natural thing that the rubber producer does is replant his old area with higher producing trees. By so doing, he can some- times treble the amount of production from 1 acre of land. Senator MANSFIELD. That is an interesting observation, because some have presented the idea that with the development of a synthetic- rubber industry it would be only a matter of time before some of the natural rubber-producing countries would be affected because they would lose their markets to this new type of rubber, with a consequent depletion in the plantings, for instance, in southeast Asia, TECHNICAL ASSISTANCE PROGRAMS 313 Liberia, parts of Latin America, and elsewhere. But, according to your statement, there will be a continuing need for both synthetic and natural rubber, and by 1975 you anticipate a possible shortage? Mr. LARABEE. My statement with reference to 1975 was based on a survey made for the President of this country by one of the materials study groups which looks into the supply of basic materials. This group was the President's Materials Policy Commission. I think anyone who feels that there is going to be an oversupply of raw material must assume a static economy. One of the magazines I say, has a saying, "Never underestimate the power of a woman." "Never underestimate the power of a jeep, or any piece of automotive In back- equipment," because any place it gets to someone wants one. ward countries very few railroads are built, only to haul large, heavy cargoes; they build roads. The demand for trucks-I am sure Mr. Ford will appreciate this-the demand for trucks and automotive vehicles is constantly increasing, and sales are only held down at the moment by the inability of the people to pay. As the economies of the world expand there will be an almost un- limited demand for automotive equipment and rubber and rubber products. Senator MANSFIELD. It is not a question of production, then, but a question of distribution. Mr. LARABEE. That is right. Senator MANSFIELD. It is a long-time question. LIBERIAN INHABITANTS Now, Mr. Larabee, what is the feeling between the descendants of the Americans who went to Liberia during Monroe's administration. and the natives of Liberia who, I understand, are incorporated in tribes? Have the central authorities, the descendants of the Ameri- cans who have remained in power all this century or so during which Liberia has been an independent state, maintained, on the whole, cor- dial relations with the tribes in the backward areas, or is there friction? Mr. LARABEE. Well, sir, you have to take these things by periods in the history of this country, like any other country. In the time I have been going there—which is 16 years there have been some rather remarkable changes. In the first place, there is no clear line between the descendants of the Americans, freed slaves who went to Liberia, and the natives. There have been many intermarriages. There are native people who have become educated, so-called-I mean, they have left their tribal life and become educated, adopted what are known there as civilized ways-and in this present government, in all branches, there are direct descendants of the native people of the country sitting on the supreme court and all the courts, in the legislature, and in the senate, and in the President's cabinet. There is no friction, as such, that exists between that government and the tribes. But the change, sir, from tribal life to so-called civil- ized life is gradual-and certainly ought to be, because the country is not yet in a position to absorb into an industrial or mechanized society, or even on a farming basis, as we know it, these people. Senator MANSFIELD. In your opinion, then, there is a good deal of sound coordination and understanding and friendship between the descendants of the freed slaves and the original inhabitants of Liberia? 314 TECHNICAL ASSISTANCE PROGRAMS Mr. LARABEE. That is right, sir. That is a correct statement. Senator MANSFIELD. That is all, Mr. Chairman. LAND OWNERSHIP Senator HICKENLOOPER. Mr. Larabee, on the first page of your state- ment, about the fourth line from the bottom, you state: "A constitu- tional prohibition prevented the outright purchase of land by the Firestone Plantations Co." Does that constitutional provision go to the ownership of land or property by foreign groups, or does it extend to citizens in Liberia? Mr. LARABEE. It is a positive statement, sir, that no land shall be owned by any person other than a citizen of Liberia, and no person can be a citizen of Liberia except a person of Negro descent. Senator HICKENLOOPER. So there is freedom of ownership of land by an individual if he is a citizen? Mr. LARABEE. Complete freedom. There have not yet been interpre- tations of the law with reference to a corporation domiciled in the country, and as to whether or not that corporation is a citizen within the meaning of the laws as we have it in this country. Senator HICKENLOOPER. Can you give me an estimate or perhaps you have the information-as to the approximate population of Li- beria, as distinct from the hinterland tribes. That is, the propor- tionate population of Liberia that we might consider to be more sus- ceptible to industrialization? Is there any way you can divide that? Mr. LARABEE. I couldn't define that, sir. The total population is estimated as somewhere about 1,500,000. They are preparing to take their first census with people trained under the FOA program in this country. MEANS OF LIVELIHOOD IN LIBERIA Senator HICKENLOOPER. What I was trying to find out is the divi- sion, if possible, between those who are still, and have continuously been, in a tribal form of economy, and those who are more in the in- dustrialized form of economy, as we might say. Would you say half of the people of Liberia might still be living in a tribal form? Mr. LARABEE. At least; I would say more than that. Senator HICKENLOOPER. Then we have an estimated figure for the purpose of this discussion, that there might be four or five hundred thousand people in Liberia who at the present time are susceptible to industrialization, including farming, which will give me a basis for my next question. I don't want to hold you to a figure, you understand. Mr. LARABEE. I couldn't give you such a figure anyhow, because that difference has not been determined. There are employed-if you take as a guideline those who are employed, gainfully employed for wages, or salaries Senator HICKENLOOPER. Or operate their own plantations, or their own plantings? Mr. LARABEE. Yes, as against those who operate their own planta- tions-I say, if you take as a guideline those people who are employed for wages or salaries, as against those who live in a tribal community where they produce for a tribe it is a communal ownership arrange- ment, you see-setting off from those, those people who have small TECHNICAL ASSISTANCE PROGRAMS 315 farms, and I mean small farms, from which they gain their liveli- hood-I would say that the latter 2 groups, those living in tribal com- munities and those operating their own farms, outnumber those gain- fully employed for salaries or wages somewhere in the order of 4 to 1. Senator HICKENLOOPER. I see. In that period of 1925 to 1927, when Firestone went into Liberia, was there any industrial organization of any size or importance in that country? Mr. LARABEE. No, sir; nothing. There was a rubber plantation planted by a British group, it was about 1,400 acres, but they aban- doned it. Senator HICKENLOOPER. Were there any substantial numbers of scientific people, such as doctors or nurses, accountants, supervisory personnel, or people in the industrial or business field in Liberia at the time Firestone went there? Mr.LARABEE. Sir, at that time, as near as we can reconstruct it, there were about five doctors in the whole country, a country the size of the State of Ohio. There were no hospitals except those private hospi- tals which a doctor might run in his house in connection with his practice. There were no roads, there were only trails. You moved by trail, or you moved by a river, or you moved along the coast. PERSONNEL TRAINED BY FIRESTONE Senator HICKENLOOPER. Now, would you have any figures, or could you give a rough estimate, of the number of supervisory per- sonnel or skilled or semiskilled personnel who have been trained by the Firestone group since 1927? Mr. LARABEE. Well, it would run into the thousands, sir. We have trained—we have about 3,000 so-called classified employees now who are above the common labor category. Those include clerks and stenographers, accountants, mechanics, drivers of vehicles, laboratory people, nurses Senator HICKENLOOPER. What I am trying to find out, Mr. Lara- bee, is the number of people who have gone through that training and what number there is at the moment. Mr. LARABEE. I am attempting to tell you how this thing works. Now, from that trained group we are constantly losing people who go to the Government or who go to start in business on their own. And we run this training program to fill that void. If I had to—and it would be the strictest kind of a guess-if I had to make an estimate of the number of people in the 30 years we have been there whom we have trained to some degree of skill, I would say that it would be 10,000 or more. Senator HICKENLOOPER. Now, would you have any estimate as to how many nurses and doctors have received training during this 30-year period as a result of the stimulus of the Firestone operation? Mr. LARABEE. We do not train doctors; we employ foreign doctors from the United States and Europe. We have trained somewhere around 300 nurses in that time. Senator HICKENLOOPER. And do you have a nurses' training pro- gram going on? Mr. LARABEE. We have a 4-year nurses' training program going on. Senator HICKENLOOPER. And are those citizens of Liberia? 316 TECHNICAL ASSISTANCE PROGRAMS Mr. LARABEE. All citizens of Liberia. Senator HICKENLOOPER. Do you consider it feasible and compatible with the company operations to institute a physicians' training pro- gram? Mr. LARABEE. The Government, itself, has done that. The Gov- ernment has in the United States alone under full scholarship, more than 200 people. And they have trained and have returned to Liberia now, three physicians. I could get the figures for you. I haven't them in mind, but there are quite a number of them in medical schools here. Senator HICKENLOOPER. I take it, then, that in conection with a private industrial or production operation, the techniques and the skills of Liberia over this period have very substantially increased, in numbers? Mr. LARABEE. Compared to what they had it is a very material increase. Senator HICKENLOOPER. From practically nothing to begin with, up to what they have at the moment? Mr. LARABEE. That is right. THE ROLE OF PRIVATE ENTERPRISE Senator HICKENLOOPER. And is it a fair assumption to say that the example of this operation and the contributions which your people have made to help in the fields of sanitation, education, and so on, have given a definite stimulus to the Liberian Government and the Liberian people to go forward under their own power to a greater extent? Mr. LARABEE. Well, if I may quote the leaders of the country, that is my view. Senator HICKENLOOPER. I have supported, and expect to support, proper technical cooperation on the part of our Government with other nations. But, I have also been very much impressed with what I believe to be the very helpful impact of properly conducted private enterprise in some of these less-fortunate countries. I think I have seen some rather startling contributions to the general economy and health and public welfare and education of these coun- tries by private business activities. I think technical cooperation is one of the great ways in which we can contribute, if the activities of Government programs, the humanitarian institutions, and private en- terprise are conducted properly. I think there are examples all over the world where the object of investors is exploitation, whether they are our own investors or those of other countries. I don't say that everything is completely free of exploitation. But I think we have some very outstanding examples in various parts of the world where private investment as a private profit operation has contributed some startling benefits to the localities in which it operates. And from everything I can hear, your company, in connection with its operations, is doing an excellent job in Liberia so far as the people, the economy, and the Government of Liberia are concerned. Mr. LARABEE. Thank you, sir. Senator HICKENLOOPER. Are there any other questions? Thank you, Mr. Larabee. Mr. LARABEE. Thank you, sir. Senator HICKENLOOPER. The next witness is Mr. Henry Ford II. TECHNICAL ASSISTANCE PROGRAMS 317 STATEMENT OF HENRY FORD II, PRESIDENT, FORD MOTOR CO., DEARBORN, MICH. Senator HICKENLOOPER. We are glad to have you here this morning to get the benefit of your experience, and your suggestions. Do you have a prepared statement, Mr. Ford? Mr. FORD. I do, Mr. Chairman, a short one. Senator HICKENLOOPER. How would you like to proceed? Mr. FORD. May I read it? Senator HICKENLOOPER. If you please, sir. Mr. FORD. I was pleased to be asked to express my views to this com- mittee on a program which has become an increasingly important part of our foreign policy. First of all, I'd like to make it clear that I am against giveaway programs. I don't believe any of our problems can be solved by the simple process of ladling out the taxpayers' dollars. We should be hard-headed and businesslike about the way we spend our money either at home or abroad. We should know where and how and why it is being spent, and we should be sure that it is making a substantial con- tribution not only to the people we are trying to help, but to our own national interest. I'd like to make it equally clear that I don't believe in our trying to save the world singlehandedly. But I do believe very much in doing all that we can to help our friends abroad to help themselves—which is what technical assistance means to me. I strongly favor the tech- nical-assistance efforts of our Government and of the United Nations because, in my opinion, they are the most effective and economical ap- proach to building a strong and prosperous free world. And they are not giveaways. As a byproduct of raising the standard of living and per capita income in the underdeveloped countries, moreover, these areas in time become good paying customers for all the things that we and the other manufacturing countries would like to sell them in a free and competitive market. VASTNESS OF PROBLEM OF UNDERDEVELOPED AREAS I sometimes think we have been so preoccupied with the Soviet threat that we fail to recognize the vastness of the problem posed by the underdeveloped areas. We must live with that problem whether or not we succeed in settling our differences with the Soviets. It will become increasingly explosive with the passage of time. Basically, the problem of closing the tremendous gap of living con- ditions between the more and less advanced peoples is one of economic development. It should be based, I believe, primarily on private- capital investment by the more advanced nations. The main job of technical assistance is to pave the way for the flow of private capital and prepare people to absorb the kind of technical knowledge that accompanies capital. As I see it, technical assistance can be divided into two parts: The first is the basic educational job-teaching people how to read and to write, to observe simple rules of diet, sanitation and hygiene, to use simple but modern farming methods, implements, and so on. This kind of technical assistance is mainly a job for governments, at 59637-55-21 318 TECHNICAL ASSISTANCE PROGRAMS least in the beginning stages, and private nonprofit organizations such as churches, educational institutions, and foundations. Since Mr. Don K. Price, of the Ford Foundation, will be appearing this afternoon, I believe, before this committee to tell the story of the foundation's work in this field, I will confine myself to activities other than those of the foundation. The second major area of technical assistance is that of industrializa- tion of introducing modern techniques of manufacturing, engineer- ing, and business administration. Here is an area of vast potentiality for constructive action by pri- vate industry. American firms have been a direct funnel through which the most advanced practices of American management, engi- neering, and design have flowed out all over the world. Much of this information has gone into highly developed countries, of course. It has contributed substantially to economic progress in the Western World, which in turn is passed on to less highly industrialized peoples. EXPERIENCE OF FORD MOTOR CO. IN BRAZIL The Ford Motor Co. for more than a quarter century has been in the business of technical assistance the exchange of ideas and people and skills with its affiliated firms abroad. Let me give you an example from that experience. We have had an assembly plant in Brazil for more than 30 years. We estimate that through the training school established at this plant in 1926 we have helped develop more than 6,000 trained auto mechanics in that country. This fact alone has undoubtedly had an important impact on the economic development of Brazil. This, of course, is not the only impact. Since the first car was assembled in Brazil, the total car and truck population has risen to about 650,000 vehicles. Add to this the great development in subsidiary industries, road construc- tion, and the growth of outlying areas, and you have a concrete exam- ple of how technical assistance can lead ultimately to the development of a national economy. Despite current economic difficulties in Brazil, we are now setting up a truck-manufacturing operation in accordance with a broad plan worked out with the Brazilian Government. Under this plan we hope to increase as rapidly as possible Brazilian manufacture of component parts of Ford trucks assembled in Brazil. We intend to build up com- petent, efficient Brazilian suppliers. We have expanded our local organization in all departments-finance, sales, engineering. Our manufacturing and purchasing people are constantly surveying poten- tial suppliers and basic industries which are needed to back up a Brazilian automotive industry. We are assigning United States technicians to provide technical assistance to Brazilian suppliers. Our technicians have approached this job with a missionary zeal. I'm convinced that most American firms which operate abroad want to be good and constructive citizens wherever they are. We want to be welcome guests. If Ford Motor Co. can help do a better job of improving conditions of life overseas, I can assure you that we and our affiliated firms will cooperate to the best of our ability. TECHNICAL ASSISTANCE PROGRAMS 319 I am sure the same is true of just about every other American company. Of course, here we may be getting ahead of our story, for in many parts of the world it's premature to think about advanced industrial technical assistance. We've got a much more basic job to do before industry can take over. It's in this area of basic education that I think we get to the real heart of technical assistance. In view of the fact that I have had no personal experience with the United States governmental point 4 program, I hesitate to make any specific comment about it except to say that, in principle, I approve of its work in fields such as health, education, and agricul- ture which set the stage, so to speak, for private initiative, capital, and endeavor to follow. I think we must always be careful to obtain the ablest and most representative technicians that we can find, in order that they can be effective exponents, in the very best sense, of this country abroad. I also think the programing should be on a long- rather than short- range basis, carefully developed in accordance with the peculiar needs and resources of the individual underdeveloped country con- cerned and should be coordinated in every phase and at every stage of planning with the other agencies both private and governmen- tal-working in the country. I would like to see the United States Government technical-assistance program gain increasing recogni- tion and support for the valuable work it does in building good will for the United States abroad and in consolidating the free world's strength. U. N. TECHNICAL ASSISTANCE Now I would like to turn to the U. N. program of technical assist- ance, with which I have had some personal contact. I was asked to serve on the American Delegation to the eighth General Assembly of the U. N. in 1953, and I found it an instructive and valuable ex- perience. I went to the U. N., skeptical of what it could do for the United States in this serious business of world affairs. I had pre- viously felt-from what I had read in the newspapers-that it was by far too much of a talk body rather than an action body. I found that a good deal of talking did go on, but I also discovered that beneath the surface and away from press headlines there were some ex- tremely important programs under way. Perhaps the most outstand- ing of these is the technical-assistance program of the U. N. which, although often submerged from public view, assists in providing a broad base for international cooperation. gov- All that I have learned about the achievements of the program to date convinces me that it warrants our continued support. The U. N. program is one which supplies pure technical assistance; that is, it furnishes principally expert know-how but few supplies and equip- ment. It is a much smaller program than the United States ernmental undertaking and costs less than $25 million a year-a re- markably small sum, considering the ambitious job it has taken on. Actually, our contribution has cost us, on the average, from $12 mil- lion to $13 million a year. As a matter of fact, if you add in the local contributions of the receiving countries, the United States share be- comes as little as 22 percent of the total. To date, the U. N. program 320 TECHNICAL ASSISTANCE PROGRAMS has run successful projects in nearly all of the countries that we iden- tify as being part of the free world. More than 4,000 specialists from over 70 countries have gone out to work on such projects as disease control, agricultural improvements, education, and public administration. In many parts of the world, this work has had a significant impact upon standards of living, the economy, and the morale of the people. In the eyes of these people, the United States receives a good deal of credit for the success of this United Nations program. Our country played a leading part in helping to establish the U. N. technical assistance effort, has been its largest contributor, and has supplied over 20 percent of its experts. We have had a predominant role in a program that probably means more to the underdeveloped people than any other single effort to my mind of international co- operation in history. I can't imagine any similar undertaking where the United States would receive so much goodwill for so little. SOVIET PLEDGES TO U. N. TECHNICAL ASSISTANCE To me it is most significant that in 1953 the Soviet Union and some of its satellites finally made pledges to the U. N. technical assistance program. I'm sure the U. S. S. R. has been most unhappy about the success of our point IV and the U. N. technical assistance programs. They have seen these programs grow and work for our side through- out the many underdeveloped countries of the world. On the theory. of "if you can't lick 'em, join 'em," they are now scrambling aboard the bandwagon. They would like very much to unseat our leadership in this im- portant effort. For us to decrease or abandon support of the U. N. program now, simply because the Russians have joined it, would be playing to my mind right into their hands. As the program is set up, it is subject to United States governmental policy and program review through the Technical Assistance Committee and the General Assembly on which we sit and on which the free world has by far the majority of votes. The Russians cannot run the program and they cannot take it away from us. The most they can do is send their experts into some of the underdeveloped countries which have spe- cifically agreed to accept Soviet experts. I don't believe that we should ever be afraid of letting the free world see the Soviet and the American expert side by side. I know that in any fair competition, we will win out. But finally, I should warn that if we fail to contribute and the Soviets do, then we could force the U. N. to rely on rubles instead of dollars and thereby lose leadership by default. Now, I would like to make specific recommendations concerning the U. N. program based on what I saw of it in my experience at the U. N. U. N. FINANCIAL PROBLEMS First, I would like to talk about money. Obviously, no complex international operation involving more than 70 participating countries and 8 international agencies is going to be all milk and honey. There are bound to be stresses and strains. It is a relatively new program and is learning as it goes. Because of TECHNICAL ASSISTANCE PROGRAMS 321 its scope and the versatility of its components, it requires careful planning and coordination at all levels. Planning in economic devel- opment, to be successful, must be long-range. But planning can only be based on the knowledge that the money will be available. The present system of early pledges followed by lagging, paid-in contributions is not satisfactory. The United States has been as remiss as any country in this. In the last 2 fiscal years (1953 and 1954), the Congress has not promptly appropriated the total sums pledged by the United States delegation to the U. N. Although I realize that these pledges were made conditional upon the approval of Congress-and they must be-I feel that I should point out that a delay in payment such as occurred following the Assembly which I attended undermines the stability we are trying to achieve in the program. The bulk of the pledge in this instance was not appropriated until August 1954, 8 months after the beginning of the U. N.'s operating year. Sixty-two other countries, including the Soviet Union, have already announced contributions to the 1955 U. N. technical-assistance pro- gram. To date the United States has been unable either to pledge or contribute to the program for this calendar year. This situation has made it difficult almost impossible for the U. N. program to operate effectively and efficiently. As a matter of fact, if the United States does not soon appropriate funds for 1955, the going U. N. program will have to be drastically curtailed and future planning will be seriously set back. As the largest single contributor in the past, our failure to set the pace tends to undermine the whole effort. I seriously recom- mend, therefore, that the Congress carefully consider the United States role in this program. If you feel, as I do, that our participa- tion is worth while, then we should demonstrate this by being in a position to pledge and pay up promptly on our contributions. If possible, I would also urge that we be able to indicate to the U. N. our proposed pledge for longer than a 1-year period in order that we can look ahead and plan effectively. This, of course, would have to be subject to annual congressional appropriation. I understand that a number of governments have already arranged to contribute on a long-run basis. EXPANSION OF U. N. TECHNICAL ASSISTANCE PROGRAM Second, I believe U. N. technical assistance should be slowly but steadily expanded until it reaches a size approaching something like $50 million a year. I do not believe, however, that all American technical assistance should be turned over to the U. N. The U. N. is not in a position to run an operation of this magnitude. The present program is based on sharing of the resources of many countries. I think this international cooperative aspect is important and I would hate to see it lost by swamping the U. N. with United States funds. I understand that on the average the other contribut- ing countries have already increased their share this year by some- thing like 15 percent. I feel that if we assume real leadership in the annual pledging conference and support the program throughout, undoubtedly we can get more countries to make larger contributions and thereby decrease our own proportionate share of the load. 322 TECHNICAL ASSISTANCE PROGRAMS PROGRAM COORDINATION Third, because of the great number and variety of operations in technical assistance, coordination is always a key question. The U. N. program must be carefully coordinated with bilateral governmental and private programs, such as those undertaken by foundations, to get the best possible use of all resources. For the most part, I think this is being done. During my U. N. experience, I learned that our people are in daily informal touch with international officials at U. N. headquarters, dis- cussing, outlining, and planning the actual country programs. When these programs are carried out in the field, United States and the U. N. personnel again work together on the spot. Some of the changes which the United States has suggested from time to time have already been made in the U. N. program. These include emphasis on country planning and increased coordination. As a result, the program is more effective. In summary, I am convinced technical assistance to underdeveloped areas is very much in our national interest. The U. N. program makes a substantial and inexpensive contribution to this national interest. The 1953 International Development Advisory Board and the Randall Commission have recommended that the United States continue to support the U. N. technical assistance program. The President has strongly urged continued support. My own experience in the U. N. and my personal observation of the program have shown me that here the United States has a sound investment. I strongly commend it for your support. Thank you. Senator HICKENLOOPER. Thank you very much, Mr. Ford. Senator Green? Senator GREEN. I have no questions, but I would like to take this opportunity of thanking you for your very informative and convinc- ing statement. Mr. FORD. Thank you very much, Senator. Senator HICKENLOOPER. Senator Mansfield? Senator MANSFIELD. I also want to commend Mr. Ford for his fine statement. I notice that his opinion coincides with that of the committee, that the best way to help people is to put them in a posi- ion where they are able to help themselves. I am glad to note that he states in his testimony that whether or not we succeed in settling our differences with the Soviets, there is still this problem of technical assistance to underdeveloped countries. I am also glad to see that he thinks the programing should be on a long rather than a short-range basis. AMOUNT OF SOVIET PLEDGE TO U. N. PROGRAM I think that the most significant aspect of the U. N. program in 1953 was that the Soviet Union finally made pledges to it. How much did they pledge? Mr. FORD. I am not sure, in dollars. They pledged rubles, which were not convertible. As I understand it, they supposedly made it possible for someone to come into the Soviet Union to see what was going on. But you know very well what that means. That means you see nothing. TECHNICAL ASSISTANCE PROGRAMS 323 Senator MANSFIELD. That is true. I understood the pledge was 4 million rubles, which, if you translate it into dollars at the Soviet official rate, means $1 million. And I don't know whether even yet they have fulfilled the pledge they have made to furnish that insig- nificant amount to the U. N. technical-assistance programs. Mr. FORD. I think that would be right; the original Soviet pledge was 4 million rubles, which equals $1 million. There have subsequently been two additional pledges in the same amount. Senator MANSFIELD. Do you know if they have come across with the money? Mr. FORD. To the best of my knowledge, they have not. Mr. Chairman, it has been brought to my attention that the money is deposited in a Moscow bank, but thus far has not been used by the U. N. Senator MANSFIELD. That is all, Mr. Chairman. SELF-HELP Senator HICKENLOOPER. Mr. Ford, I agree with my colleagues that you have made a very clear statement, and you have made some very important points. I am especially impressed with your views on the emphasis on self-help. I have heard criticisms on occasions in the past, not as to the program in its entirety, but as to certain localities and instances where the self-help philosophy has not always been emphasized by some of our representatives. It has been emphasized in some cases; it has not in others. And I am very strongly of the opinion that until we generate the self-help idea, we are wasting our time and our efforts. I also want to assure you that a moment ago when I said there were three great types of activity-the missionary type, the private-enter- prise type, and the governmental type-I included the work of the great foundations, one of which is the Ford Foundation, in what I would say is a type of missionary activity. That is, it is a humani- tarian, privately sponsored effort. Are there any further questions? Thank you very much, Mr. Ford. Mr. FORD. Thank you very much, Mr. Chairman. Senator HICKENLOOPER. The next witness is Mr. Ralph E. Smiley, of Booz, Allen & Hamilton. STATEMENT OF RALPH E. SMILEY (PARTNER), BOOZ, ALLEN & HAMILTON Senator HICKENLOOPER. You may proceed, Mr. Smiley. We are glad to have you with us today. Do you have a prepared statement? Mr. SMILEY. I have a prepared statement that I would like to read, if I may. Senator HICKENLOOPER. You may proceed. Mr. SMILEY. The two countries in which our men are providing technical assistance are the Philippines and Egypt. We are handling 2 projects in the Philippines and 1 in Egypt. One of the projects in the Philippines, and the first assignment that we undertook for FOA, is the Bureau of Lands. It is through this bureau that Filipinos can acquire public lands through homesteads, free patent, sales, lease, and other procedures. 324 TECHNICAL ASSISTANCE PROGRAMS 1 Senator HICKENLOOPER. Will you identify yourself as to the firm and your activity? Mr. SMILEY. Our firm of Booz, Allen, and Hamilton is a manage- ment consulting firm of management engineers. We were organized in 1914, and have an organization of about 375 professional people located in 9 offices throughout the United States. Senator HICKENLOOPER. Where is your principal office? Mr. SMILEY. Chicago. Senator HICKENLOOPER. Thank you very much. PHILIPPINE HOMESTEAD PROGRAM PROJECT Mr. SMILEY. After World War II the Philippine Government initiated an extensive homestead program. This program, it was believed, would be one major step toward increasing employment and raising the standard of living of thousands of Filipinos. The program provided for deeding a given tract of land to the family after it had lived on the land 18 months. The response of the Filipinos to this program has been most encouraging. It was reported that nearly a half million families had moved to homestead areas by early 1953. However, as time passed and the families became eligible for the deeds, the major problems of the program became apparent. The establishment of the basic records essential for issuing land patents was reaching such a volume that with the methods used in the past the backlog of cases was increasing at a rate far greater than ever expe- rienced in the islands. In the fall of 1953, the backlog was greater than all the cases processed by the Bureau of Lands in the 52 years of its existence. The homestead program appeared to be headed for failure. The families who had complied with all the requirements and were happy with their new endeavors, found they could not build permanent homes or make other improvements on their property because they could not obtain title to their land. This was due entirely to the lack of modern methods for handling the substantial increase in volume of cases. For the most part, their methods were adequate for handling the volume required in the past but the tremendous increase of cases resulting from the homestead program overtaxed their existing organ- ization and practices. Therefore, in order that the homestead pro- gram, a major factor in the stability of the Philippine economy, would be effective, it was imperative that methods for handling the massive paper work involved be simplified and streamlined. We were invited to provide the necessary technical assistance to the Bureau of Lands to enable it to accelerate the granting of land to qualified applicants. As in all such assignments, we first conducted a preliminary survey. The purpose of the preliminary survey is to determine the specific problem involved, the scope of the work to correct these problems, the practicality of the project, and the caliber of men required to provide the necessary technical assistance. Another objective of the pre- liminary survey is to determine whether the client has and will assign to the project a small group of his personnel to work with us. We strongly believe that the improvement of the operations is not the only objective of such a project. It must also provide for training of the client's personnel from the beginning to carry on the new operations TECHNICAL ASSISTANCE PROGRAMS 325 and to conduct comparable studies in the future as the conditions and operating situations change. Our preliminary survey of the Bureau of Lands satisfied these re- quirements, and based on our findings we developed a detailed pro- gram of the specific steps to be taken in providing the necessary technical assistance. In summary, technical assistance is being provided in the following areas: procedural changes, improved organization, better manage- ment, executive training, mechanization, and improved office layout. We have been working with the Filipinos in these areas for a little over a year. As a result the Bureau of Lands today is issuing more land patents in 1 month than it had issued in a year under former practices. In other words, the technical assistance that the United States has provided the Philippines in this project is currently resulting in over 45,000 more Filipino families being able to obtain their own farms and to become self-supporting in the fiscal year 1955. And this is only the beginning. Currently there is a backlog of over 200,000 applications and the Bureau expects to receive nearly 40,000 new applications in 1955. It is estimated, however, that the Filipinos will be able to increase their performance in issuing land patents under the new methods next year and again the following year and that they will have the backlog reduced to a current level within 5 years. FISCAL OPERATIONS PROJECT IN PHILIPPINES The other assignment we have in the Philippines is providing tech- nical assistance in modernization of budgeting, accounting and audit- ing practices of the Philippine Government. It had been recognized that many of these practices date back to the early 1900's. Improve- ment in these areas is one phase of President Magsaysay's major program to achieve effective and efficient management of the Govern- ment which is so essential to the stability of the Philippine economy. The Philippine Congress in support of this program passed the Revised Budget Act in June 1954. Preparatory to the development of the performance budget, a budget conference was held by the Institute of Public Administration of the University of the Philippines. Fol- lowing this, the Public Administration Division, FOA in Manila, conducted courses in work measurement theory and practice for over 200 budget people. The first step in providing technical assistance by our firm was the development of a basic performance budget system and the prepara- tion of a manual of procedure. This document was used as the basis for extensive training meetings. We held training meetings with budget examiners, the secretaries and under secretaries of all depart- ments, the general staff of armed forces, budget officers and account- ing officers of all departments, and bureau directors and division chiefs of 12 agencies selected as the first group in which to install the performance budgets. In addition, we conducted extensive train- ing of 90 people to serve as a nucleus for the expanded program next year. For the 12 selected agencies that are submitting their budgets this year on a performance basis, we worked with their staffs advising 326 TECHNICAL ASSISTANCE PROGRAMS them of each step to be taken in the formulation of their budgets, checking progress, and appraising achievements. In like manner, we worked with the budget examiners in the budget commission in proces- sing the performance budget of these agencies. While technical assistance under this project has continued for only 6 months, it is apparent that the United States has given the Philippine Government the essential guidance in the first step of achieving im- proved fiscal operations. It has trained a large group of Filipinos in performance budgeting and followed through in helping an example group of 12 agencies prepare their first budgets under the new pro- gram within a half a year after the enabling legislation was passed by the Philippine Congress. CUSTOMS ADMINISTRATION PROJECT IN EGYPT Our third project of technical assistance, the one in Egypt, was started less than 5 months ago. In this country we are assisting its Government in simplifying its customs administration. The new administration in Egypt recognized that to improve the economy of its country it must first improve its Government. Since the revenue from customs is a major item of income of the Government and since the passage of lawful goods, funds, and persons through customs in a prompt and efficient manner can do much to encourage new enterprises in the country which will have a beneficial effect on the economy, it was decided that the customs administration should be the first department to be completely overhauled. The technical assistance required in this project involves a thorough analysis of the organization, methods, and procedures of the customs administration. Our first step in providing this assistance was to have the director of customs select four competent Egyptians to work with us. These four men were given detailed instructions in sound management practices and survey techniques. At first we had them work directly with our men as a means of supplemental training. Then each was given specific assignments to handle under our general supervision and direction. Thus, as a team, our men and the four Egyptians have proceeded to conduct the survey. After we completed our overall appraisal and identified specific areas for improvement, we proceeded on a systematic day-to-day pro- gram to advise the heads of divisions on how to make the improve- ments and to have them follow through and actually install the proposals. Currently there are three divisions making these installations. As each phase is completed, written procedures and practices are pre- pared which will form a manual of operations for the customs admin- istration. The manuals then become the basic guides for carrying out the work of customs and constitutes the textbooks for training of personnel. It is too early in the development of this program to project specific accomplishments. However, it is apparent at this stage that substan- tial time will be saved in clearing items through customs and that improved methods for processing the work will assure greater returns to the Government. TECHNICAL ASSISTANCE PROGRAMS 327 FOA PROGRAMS Based on our limited experience in the two countries, we believe that the programs are sound and extremely beneficial to the countries, and that the respective Governments are appreciative of the technical assistance they are receiving from the United States. Furthermore, from our observations, the FOA program appears to be well managed, and is directed toward achieving the basic objectives set forth in the enabling legislation. Our objective in conducting these technical assistance projects has been to help the people to help themselves. We have provided assist- ance by training, examples, advice, and appraisal. This assistance has been in technical aspects and in management. The primary interest of the local people all too frequently is in the technical aspects because the immediate results of the application of the techniques are readily measurable. However, of equal or greater importance and certainly needed-is management knowhow. Effec- tive management of existing practices often will result in substantial improvement. And new techniques without sound management will not lead to the real potential achievements. We believe that the most significant single factor in the success of business in the United States is management knowhow. Manage- ment is the medium through which all resources of any enterprise, manpower, money and materials are marshaled to achieve a common objective. It is reflected through plans of organization that provide for sound delegation of responsibilities with clear lines of authority and the establishment of effective management controls. COMPETITION AND SHARING OF IMPROVEMENTS Two areas of management concept so much a part of American businessmen's thinking and yet so absent in most underdeveloped countries are competition and sharing of improvements. We have long ago recognized that competition is healthy for busi- ness. It is the sole force which will automatically compel constant. improvement in costs and quality, and which will also compel the sharing of the benefits of industrialization between ownership, labor and the consumer. The concept of lower unit profits to permit higher wages and lower prices of end products which will increase buying power and thereby facilitate mass production, is a key factor in American business philosophy. To achieve the adoption of these con- cepts is most difficult but certainly must be a major objective of an effective technical cooperation program. The standards of living in underdeveloped countries will rise only after the basic principles of a competitive society are accepted and followed by the people of these countries under favorable conditions. for a sound economy. To achieve these objectives may require many steps over a period of years. Technical assistance provided by the United States is, in our opinion, essential to achievement of these objectives. As they are accomplished, the citizens of these underdeveloped countries will be better equipped mentally, physically and economically to assume their proper place and make their appropriate contribution to the way of life for which we stand. 328 TECHNICAL ASSISTANCE PROGRAMS Senator HICKENLOOPER. Thank you, Mr. Smiley, for a very inter- esting and informative statement. Senator Green, do you have any questions? Senator GREEN. No questions. Senator HICKENLOOPER. Senator Mansfield? CONTRACTS WITH FOA Senator MANSFIELD. Mr. Smiley, have you entered into contracts with the FOA for any other countries besides the Philippines and Egypt? Mr. SMILEY. No, sir, Egypt and the Phillippines are the only countries that we have. We have contracts in other countries, but those are private contracts. Senator MANSFIELD. How much does FOA pay you for your ac- tivity in those countries? Mr. SMILEY. They pay us at the standard commercial rate. The work in the Philippines on the Bureau of Lands contract amounts to about $400,000 for 2 years. The other 2 projects amount to ap- proximately $200,000, and run for a period of about 12 months. Senator MANSFIELD. Do you think it is more efficient to do this work by contract or for the FOA to hire its experts and do the work through the agency? Mr. SMILEY. I think it depends a lot upon the type of assignment that is involved. There is work to be done by FOA in these foreign countries that I don't think a firm personnel can do. There are other jobs, such as the work that we are doing here on the Bureau of Lands, or any one of these three that we are talking about here, that I think a firm can do better than the FOA could do by hiring individual em- ployees. And the reason I think we can do better is because we have in our firm a group of people that have made a career of working on management problems. Also I believe the agency would find it most difficult to locate in- dividuals of the caliber required for such projects, who would accept temporary employment as provided by one of these projects. Senator MANSFIELD. How many people do you have attached to the Philippines assignment? Mr. SMILEY. On the 2 assignments in the Philippines we have 11 people; and on the assignment in Egypt we have 5. Senator MANSFIELD. That is all. Senator HICKENLOOPER. Thank you very much, Mr. Smiley, we are glad to have you here. The committee will now stand adjourned. They will meet at 2:30 this afternoon in the Foreign Relations Committee room. That will be an open hearing. (Whereupon, at 12 noon, the committee adjourned, to reconvene at 2:30 p. m. of the same day.) AFTERNOON SESSION Senator MANSFIELD. The committee will come to order; the first witness will be Dr. John S. Badeau. Sit over there, Doctor, and you may start. TECHNICAL ASSISTANCE PROGRAMS 329 STATEMENT OF JOHN S. BADEAU, PRESIDENT, NEAR EAST FOUNDATION Mr. BADEAU. I would like to make it clear that I really come to this hearing in a dual role. On the one hand, I am connected with the Near East Foundation which is, I believe, the oldest American agency devoted exclusively to technical assistance and, therefore, I speak against the background and experience of the Near East Foundation as a technical-assistance organization. I also come as an individual, and shall make some comments of a purely personal nature. Senator MANSFIELD. Proceed, Doctor. Mr. BADEAU. I spent most of my adult life in the Middle East in the field of education. During the war I was in the United States Govern- ment service in the Near East. I returned from living in the Near East only a year and a half ago, and have just come back from a brief trip to the area. Senator MANSFIELD. Are you going to read a prepared statement? Mr. BADEAU. No, I would rather not-I have here a prepared state- ment to which I shall refer, and then add some supplementary remarks. Senator GREEN. Is there anything in your prepared statement that you want to emphasize? Mr. BADEAU. I am going to make some reference, Senator, to what is here, and then add some comments. I understand I am to take 10 minutes those were the instructions that Senator Mansfield gave. I present this statement to the committee and will also make some remarks which are not included in the prepared statement. Speaking first for Near East Foundation, I have had prepared and given to the officer here, a statement of the Near East Foundation, which is a description of the operations carried on by Near East Foundation in the technical-assistance field, and which is also a description of our relationship with the Government FOA opera- tions, chiefly in Iran and, to a lesser extent, in Jordan, where we are contractual agents of FOA. That has all been included in this state- ment which is presented here. "CONTRACTUAL AGENTS” Senator GREEN. Would you mind defining the term "contractual agents" for the record? Mr. BADEAU. The term "contractual agent," in this case, refers to the fact that we have been given certain specific programs of technical assistance to be carried out in conjunction and cooperation with the Foreign Overseas Administration for which that organization pays us an agreed amount. Senator GREEN. How much? Mr. BADEAU. In Iran it is about $600,000 a year; in Jordan we have just completed a survey of the possibilities of village improvement. The original contract was for about $20,000; but since the actual cost of the survey was about $13,000, the remainder was returned to FOA. Senator GREEN. Is this under a written agreement in each case? Mr. BADEAU. Oh, yes, this is under an extremely detailed agreement. Senator GREEN. And tell us specifically just what you are to do. 330 TECHNICAL ASSISTANCE PROGRAMS CONTRACT WITH FOA FOR PROJECT IN IRAN Mr. BADEAU. The agreement precisely defines both the program, the personnel and the compensation. I may say that our involvement in technical assistance in Iran came from the fact that we were operating in Iran as a technical assistance agency prior to the inauguration of point IV. When point IV was set up and started its operation in Iran, the Iranian Government inquired whether we could broaden our opera- tions by cooperation with point IV, as it was then known. At the same time, the point IV agency, started its work, was able to utilize our experience and to build somewhat upon our projects, and they were equally interested that what we were doing should be in- creased. Because of this situation, and particularly because of the re- quest of the Iranian Government, an FOA contract was negotiated. Senator GREEN. And under these agreements are you charged with all the work? Mr. BADEAU. No, we only have charge of the work that is assigned to us. The total program of FOA in Iran is very much larger than our program, but in Iran, as is described in the prepared statement, we have an area of about 300 villages outside of Tehran, in a district known as the Veramin Plain. Here we are conducting pilot projects in a complete program of rural and agricultural development, and in this area, FOA, as such, does not operate except in conjunction with Near East Foundation. We do not operate in the areas where FOA is operating, but our program is defined under the direction and with the cooperation of Mr. Warren, who is the FOA chief of Iran. It is presented to us in the form of a very carefully drafted contract, specifying the size of the operation, the place of the operation, the content of the operation, the type of personnel to be employed, and the amount of money in- volved. Senator GREEN. Excuse my asking all these questions, which may interrupt your presentation. Mr. BADEAU. Yes, certainly. RELATIONSHIP BETWEEN FOA AND FOUNDATION Senator GREEN. I would like to know, if this cooperation between your foundation and FOA proves entirely satisfactory to both parties? Mr. BADEAU. I think it has proved highly satisfactory to all three parties, because in Iran it is interesting that three parties are co- operating in the single overall program of foreign technical assist- ance. These are the United States Government (through FOA) the Iranian Government, the voluntary agency (Near East Foundation in this case) all operating in a single well-coordinated program. Senator GREEN. There is not very much left for the United States Government to do, is there, since your foundation has taken over the projects? Mr. BADEAU. Oh, yes; there is a great deal left for them to do, be- cause their annual operations reach a much wider geographical area than we operate. TECHNICAL ASSISTANCE PROGRAMS 331 Senator GREEN. Geographically? Mr. BADEAU. Yes, geographically very much wider. We only oper- ate in one carefully selected area, where we are running the pilot demonstration. Senator GREEN. I see. Mr. BADEAU. There are certain types of technical assistance that we have not undertaken in Iran, for instance, work for the tribal people. This is being done by United States technical assistance, and is not being done by the Near East Foundation. We operate within the general program of the Foreign Operations Administration, not as an overall agency; we have a specified responsibility. Speaking from the standpoint of Near East Foundation exper- ience and I will emphasize again that Near East Foundation was in the business of technical assistance long before this was a Govern- ment concern, for we have just completed 25 years of service-there are 2 or 3 observations about the general character of technical as- sistance in the area that I think are worth making. I believe our experience of over 25 years has shown that technical assistance, wisely conceived, can actually raise the living standards of Middle Eastern countries permanently. There is always a question as to whether the objective of technical assistance is really being attained, and, as I look back over the history of technical assistance in our organization, I think I can illustrate in a great many instances where a permanent deposit of improved, per- manently improved, local practices has resulted. I take two examples, both from Greece, because we have been at work longer in Greece and, therefore, have had a richer experience there. In 1930- FOUNDATION'S OPERATIONS IN NEAR EAST Senator GREEN. Before you mention the example of Greece, I would like to ask how large is your area? I thought you were operating in Iran? Mr. BADEAU. No; we are now operating, sir, in Greece, Syria, and Iran. In the past 25 years we have been in and out of 10 near eastern countries. I emphasize out as well as in, because it is of the nature of technical assistance that it is a withdrawing operation. We are only working in 3 countries today because we have completed programs in 7 other countries; they have become airborne, if you want to use the expression, and are now self-sustaining. We have therefore with- drawn from them. We have just signed a contract with the Foreign Operations Admin- istration to undertake work in Afghanistan. This has not yet been commenced, but it will be started in a few months time. Negotiations are also going on for the work in Jordan, following the survey we made for the United States Government there. RAISING LIVING STANDARDS—EXAMPLES IN GREECE Now, I come back to this point; in our experience technical assist- ance has demonstrated that, wisely conceived, it can permanently lift living standards. I think the best example of this is the fact that between 1930 and 1940 the Near East Foundation assisted the Govern- ment of Greece to set up its own agricultural county-agent system. 332 TECHNICAL ASSISTANCE PROGRAMS It assisted by running a pilot project adapting American principles to the local situation, training the first group of workers and super- visors and (what was very important) by counseling the appropriate ministries of the Greek Government in directing such an operation. This was completed by about 1938; after 1938 we gradually withdrew from this area, leaving behind a permanent organization in Greece of agricultural county extension work. At the end of the Second World War, when the conditions in Greece. were so bad, this national organization provided the framework by which the economic assistance from the United States could be carried quickly out into the countryside, improving the life of the farmer. Another illustration of such permanent contributions comes from our experience in restoring the cattle industry in Greece. At the end of the Second World War, the cattle industry of Greece and particularly of Macedonia, was almost entirely wiped out, partly by the occupied Nazi armies, partly by guerrilla warfare. We assisted the Greek Government to introduce artificial insemina- tion. In 3 years' time 17,851 cattle had been bred by that process, and well over 10,000 offspring produced. In 4½ years' time the whole program was turned over to the Greek Government; at the present time the cattle industry in Greece has not only been restored, but is of a much higher quality because of the introduction of purebred stock through the practice of artificial insemination. This program is now entirely financed and directed by the Greek Government. Instances of this could be multiplied many fold but they all under- score the fact that, rightly directed, technical assistance is an effec- tive instrument for permanently raising living standards. OBJECTIVES OF TECHNICAL ASSISTANCE-HELPING LOCAL GOVERNMENTS The second observation coming out of our experience in technical assistance is that this permanent raising of living standards is only accomplished, in our opinion, when the clearly defined objective of this assistance is to lead the local government to develop its own services, and to direct, finance, and staff them. The reason why I make this comment is because it seems to me that all programs of technical assistance, private and public, are peculiarly prey to 2 temptations: 1 is the temptation to judge the program pri- marily by its propaganda value, and to look at it essentially as a way of expressing American good will and, therefore, a way of changing the attitude of people toward us. The other is the temptation to bring about standards of improve- ment more quickly than the local economy or the local government can support them; to be too technical, to involve too large a govern- ment organization, to be too involved-too Western, if you will. When these temptations are yielded to, then technical assistance does not fulfill its objective. But when it keeps steadily before it its aim of helping the local government to develop the kind of service that it can finance permanently over a long number of years, then it fulfills the ideals of permanently raising living standards. Every time our organization has departed from this clear principle of helping the government, I believe that we have failed. TECHNICAL ASSISTANCE PROGRAMS 333 PROJECT FAILURES Senator GREEN. Can you give us any illustrations of failure? Mr. BADEAU. I am afraid, sir, I could give you a good many illus- trations of failure. They are always illustrations of where a project is not integrally related to the Government service from the very be- ginning, and therefore it tends to take on independent character and not the character of assisting the Government itself. In one Near Eastern country, at the present moment, we have a pro- gram that I think is not satisfactory, precisely because it has been set in a situation where it is not and has not obtained the relationship with government that makes this contribution possible. It is not due entirely to our fault; it is due somewhat to the political situation, but wherever that arises, either by chance or by failure to program correctly, you do not have the impact; you are giving relief or services instead of technical assistance; do you see? OPERATING STANDARDS Senator GREEN. Are there any fixed standards for setting up these programs? Mr. BADEAU. I think there are fixed procedures, Senator Green. I would not say standards; I think there are fixed procedures, and we have developed a fairly clearcut method which has proved its worth. First, you do not enter a country for technical assistance except with the full invitation of that country's government. You must be wanted. Secondly, you do not enter a country until a contract is drafted between the local government and the Technical Assistance Agency that very carefully specifies the participation of both bodies; what will the government provide, what government ministries will be related to the project, how much money will the government put in; and this leads to the third principle, that you do not undertake tech- nical assistance until the local government is prepared to contribute to it. It may contribute in terms of cash, in terms of personnel, in terms of services, or in terms of relief from other types of taxation. I think an outstanding example of this is in Iran itself. Even during the stormy days of Mossadegh, the Iranian Government was investing almost $60,000 a year in one way and another in the services. of Near East Foundation. These three steps are followed by a final principle; from the very beginning there must be in the minds of both the technical-assistance agency and the Government the concept of a Nationwide program for which the technical-assistance program is merely the pilot or training project. When those conditions are met, it is possible to integrate the work started by the technical-assistance agency into a continuing national practice. Senator GREEN. Well now, where those concepts have been adhered to, have there been any failures in their working out? Mr. BADEAU. No; I cannot think in our experience that there have been any failures when this has been followed. We have had failures when we departed from it. I believe in Turkey we had before the 59637-55-22 334 TECHNICAL ASSISTANCE PROGRAMS war quite a distinct failure because instead of going in through a direct relationship with the Government, we went in through a rela- tionship with another American institution, in this case educational institution, and lacking the link between the educational institution and the Government, what we did did not lead to a national pattern. Where it has been followed carefully and studiously, it has been extraordinarily successful. Senator GREEN. In most cases has it been followed? Mr. BADEAU. With us, yes, sir. Indeed, so great was the integration in Bulgaria that several projects which we instituted in the 1930's for the then Bulgarian Government shortly became national practice and we believe is now part of the Communist national practice that they have continued under the pres- ent government of Bulgaria-which we are sorry is a Communist government. Senator GREEN. It has been continued notwithstanding a change in government? Mr. BADEAU. Yes; I think so. Senator GREEN. Excuse my interruption. ROLE OF PRIVATE AGENCY IN TECHNICAL ASSISTANCE Mr. BADEAU. No; that is quite all right, sir; that is why I am here. I would like to say, in the third place, on the basis of my experience that a private agency has an indispensable role to play in technical assistance, both in addition to and in cooperation with the United States Government technical assistance. The reasons for that are briefly these: As you know, the Near East is an area of particular political tension, a great deal of which, unfortunately, has focused on the United States Government. In- evitably the technical-assistance operation of the United States Gov- ernment takes place in the climate of public opinion as regards the United States Government. A very clear illustration of this is Syria. There was an attempt to institute a technical-assistance program in Syria, which the Syrian Government ultimately refused, because of its irritation over our con- nection with the Arab-Israeli problem, which made it politically im- possible for the Syrian Government to enter into economic relationship with our own Government. Nevertheless, the Syrian Government indicated that they would not only be happy to have Near East Foundation come in (as we did), they were perfectly willing, even anxious, to have Near East Founda- tion utilize American Government funds. Being a private organization we did not place the Government of the country in the position of defending a relationship with another government, with which it had certain political tensions. The fact that we could continue to operate in Iran under Mossadegh, with very hearty cooperation, I think is a further illustration of this fact. In the second place, I think in many ways a private agency can work more intimately with government than a large government agency can. In Iran, for instance, Near East Foundation is really the servant of the Iranian Government. The schools which we operate are Iranian Government schools. The sanitation school, which is training sani- TECHNICAL ASSISTANCE PROGRAMS 335 # tarians is under the Ministry of Health, and as a private organiza- tion we can be utilized by the Government in a way that the service of another government cannot be utilized. FLEXIBILITY OF PRIVATE OPERATIONS Senator GREEN. Give some illustrations to make that clear. Mr. BADEAU. Well, let me go back into another situation slightly different, but which illustrates it. Before the war in Palestine, the Ministry of Education, which was the ministry of the mandatory power, was very dissatisfied with the relationship between the village school and the village. The village school was, in their opinion, too academic, and was not doing enough to increase the agricultural standards of the farmer. Now, the head of the educational system said, "As a Ministry of Education we cannot legally experiment with our own schools. Cer- tainly we cannot ask another government to come in and experiment with our schools, but we can ask Near East Foundation as a private organization to demonstrate some new school methods for us. "" We did that, and established a new curriculum and a relationship by which the village school became truly rural. On the basis of this separate demonstration, the Government of Palestine transformed all of its village schools into that pattern. That is what I mean by a certain flexibility of operating. Or, let me take another illustration. We have just completed for the Government of Greece a demonstration in a rehabilitation opera- tion designed to rehabilitate the Greek peasant whose legs are blown off by land mines. It is a very serious problem in northern Greece. There were thousands of these land mines left during the last war, and the peasant walks in the fields, and steps on one of these mines and both his legs are blown off. Five years ago we set up a rehabilitation center in Athens under Greek auspices, and financed by the Greek Government, in which these people are given physical rehabilitation, are taught a trade and are sent back to their villages as self-supporting. On the basis of this demonstration the Greek Government now plans to take over our well- developed center, and possibly set up 4 or 5 similar centers. We are ready to turn that project over-we were ready to turn it over to the Greek Government in June. When I was in Greece in October however, the Minister of Health said, "Will you please con- tinue your direction of this center for 2 years more, because if you turn this over to the Greek Government we will have to share the responsi- bility of the school with several other ministries, and the sharing it with several other ministries will break down its efficiency. It is easier for us to have you run it in your name with our funds until we have developed a government structure that can preserve it; than it would be for us to run it ourselves." I think we have frequently had a peculiar contribution because of this flexibility in personal relationship. Then I believe, in the fourth place, a private agency often expends money more efficiently. I say this in no criticism of government be- cause I think all government faces this problem, but on the whole, I think the private agency can work harder in spending its money, and gets larger programs out of the same funds. 336 TECHNICAL ASSISTANCE PROGRAMS All of these factors put together make me feel that, while the burden of technical assistance in its largest aspects must always be carried by the United States Government, there is something the private agency can do that is a valuable adjunct and adds to what the Gov- ernment agency does. Those are observations that I make as representing the Near East Foundation. If I may now shift roles, I would like to make two or three observa- tions as an individual living in the Near East for a long time, con- cerned about its life and spending most of my years in its service. SOCIAL DISCONTENT I would like to emphasize again the fact that in my opinion tech- nical assistance is of extreme importance in the Middle East. It is a truism to say that social discontent is the most basic cause for the difficulties of the area, but there are certain aspects of this basic dis- content that I think are inadequately represented, certainly in our press. One is the fact that social discontent lies at the basis of Government stability in the area. One reason why we had a revolution in Egypt, where I was living at the time, was the failure of the Government to have adequate social programs. In Iraq at the present time, the Government is pushing social legis- lation, feeling this is essential if the country is to remain stable. One reason for Mossadegh's intransigent attitude toward Great Britain was his attempts to force through a social program over the protests of landlords. He used the foreign policy crisis again and again to draw the landlords together and then to drive some social legislation through. He had all the Near Eastern leaders recognize that response to the demand for social improvement is now essential to government stability. Therefore, if we are concerned with stable government in the Near East, governments with whom we can do business, I believe it is essential that we assist these governments in developing the social services that will make them stable. RELATIONSHIP TO COMMUNISM In the second place, I think that this social discontent in the Near East is very closely allied to the question of communism. I do not believe, by and large, that the penetration of communism into the great masses of Asia is an ideological problem. We do have some Communist groups in the Near East, but they are found among uni- versity students and dissatisfied politicians. The common man of the countryside, whose social discontent is an important factor in government, is not pro-Communist, and he is not pro-western; he is pro-a-better-living-standard, and therefore, if that better living standard is identified with the Western World, if he is given a stake in the Western World by a better living standard, you talk to him in terms that he can understand. I will give you a very simple illustration that came to me recently. One of our diplomatic representatives in Afghanistan, where I said a moment ago Near East Foundation is about to open operations, told TECHNICAL ASSISTANCE PROGRAMS 337 · me that he was talking with an Afghan farmer, discussing Russia. The farmer said, "I don't know anything about Russia, I don't know anything about communism, Marx and Lenin; I don't know who they are, but I know one thing: the villages over on the other side of the Russian border, which you can see in Afghanistan, all have electric lights in them. Our villages don't have electric lights. We want the electric lights in our villages.' "" I think the issue is as simple as that and, therefore, the direct assist- ance of government to raising living standards not only stabilizes governments, but, I believe, is the only permanent answer against the kind of discontent which may become communistic. We had an experience in the Near East Foundation that directly bears witness to this. About 5 years ago we went into one of the Persian villages assigned to us, which had been a center of Tudeh Party activity (you remember the Tudeh Party is the pro-Communist party in Iran). The village somewhat resented our entrance, but we gradually won our way in and set up a program. A year ago last summer, when I was in Teheran, the Tudeh Party was trying to reorganize itself in preparation for Mossadegh's strug- gle with the Shah, the struggle that he lost. The Tudeh Party organizers came back to this village because the village had slipped, and unbeknownst to us who were operating there or to the official Government representatives of the Iran Government, the villagers took the organizers of the Tudeh Party and turned them over to the police. For 4 years they had experienced a direct better- ment of living standards, very simple but evident, and in the face of this program of betterment, they were not interested in political agitators from the outside. So I believe, as an individual watching in the Near East, that technical assistance is absolutely essential to the stability of the area, and to the capturing of the common man's mind as part of our Western World. LONG-TERM PROGRAMING Then I would say that having observed most of the technical assist- ance operations in the Near East of the United States Government, I believe they have operated under a very real handicap, because of their short-term financing. Inevitably, they live on a yearly appropriation, which is natural. But this tends to mean that they live by a yearly objective, because the planning and the objective cannot outrun the financing. But the fact is that the technical-assistance programs of the Near East cannot be settled in chunks of 1 year each; they might be 3 years; they ought to be 5 years, they might be longer. I believe any detailed study of technical assistance in the Near East will reveal this handicap under which our Government service operates. That, too, stands in sharp contrast to our own organization which, while it lives from hand to mouth on the money it can get, always plans at least 5 years in advance. If technical assistance is going to be made more efficient, I believe it will have to have longer term objec- tives, and longer term financing. This same short-term concept is all too often reflected in its leader- ship. 食 ​338 TECHNICAL ASSISTANCE PROGRAMS ፡ In my opinion, the best technical-assistance program in the entire Near East has been in Iran, where I think it is a magnificent opera- tion. One reason why it has been manificent is because it has had an extremely able director who has been there now, I think, for at least 3 years. Now, in contrast to that, the point IV program in Egypt was very slow getting off the ground because it had 4 country directors in 2 years' time. Every 6 months it had a new director, and having a new director it had very largely to refurnish its staff and redefine its objec- tives. If then we are to be more effective, I think we will have to have longer term financing. A third observation I would like to make as an individual, on our own technical-assistance programs, is that because of the demand for quick impact, something that can be shown (we want to stop com- munism this year, right this year) there is a tendency to have too many projects which are too shallow, and not a few projects which go more deeply. The job of changing the habits of a country's economy is an ex- tremely complicated task, and I think that we have done best when our program has been fairly limited, and when it is cut rather deeply. I think, sir, those are the principal observations I would make. Senator MANSFIELD. Senator Green? Senator GREEN. I have no further questions. Senator MANSFIELD. Dr. Badeau, we thank you very much for your testimony, and your statement will be made a part of the record. (The prepared statement of Mr. Badeau follows:) A STATEMENT BY DR. JOHN S. BADEAU, PRESIDENT OF NEAR EAST FOUNDATION Twenty-five years ago Near East Foundation was launched. The flexible char- acter of its organization and the soundness of its philosophy have made it possible to meet changing conditions successfully, with an ever widening contri- bution to progress. BACKGROUND OF NEAR EAST FOUNDATION The foundation grew out of Near East Relief, which for the 15 preceding years conducted an extensive program for a whole generation of people dispossessed by the First World War. The echo of the words "Near East Relief" still rings in Near Eastern ears. As the end of the relief program neared a survey of the region was made.. This revealed that relief alone was not enough to bring about lasting improve- ment. What was needed was a new type of program aimed at lifting the level of life for the entire population. Near East Foundation was organized to meet this need. Among the basic principles which became the charter of the new organization are the following: The largest single group of people in the Near East are farmers working on the soil. No amount of education for the privileged classes can take the place of service to these people upon whose welfare and standards of living and stabil-- ity of the area rests. Therefore the foundation will specialize in work for the rural and village population while at the same time giving attention to urgent urban needs. * * * For this purpose permanent programs of rural development directed, financed and staffed by Near East governments and communities themselves are essential. No foreign agency can bear the long-term responsibility for betterment; this is a task for the Near East itself. * * The role of foreign agencies is to assist the national agencies of the Near East to undertake their own work. Through demonstration, pilot projects, personnel training, and consultation, the foreign agency can help the Near East launch its own national programs. These statements incorporate the basic ideas and methods of what has now come to be called technical assistance. Near East Foundation was the first major international organization to base its entire operation on these principles.. TECHNICAL ASSISTANCE PROGRAMS 339 It adopted as its slogan, "Help the people to help themselves." This means that the foundation works with, not for, the people. It accomplishes its purpose by simple, practical programs geared to the day by day experience of the Near East villagers. It demonstrates how the people themselves can produce a better, more satisfying life through self-help ideas and methods. Today the founda- tion takes pride in the fact that this basic philosophy, which is its very life, has become an accepted worldwide principle of international service. Twenty-five years of experience have proved that this method succeeds and that it gives the most promising assurance of lasting results. During these years the foundation has worked with the people of 10 Near Eastern countries. In each country it has left some permanent deposit of improvement. Scores of projects have been completed; some have fulfilled their purpose and no longer are needed, others have become a permanent part of the national life depending entirely on local leadership and financial support. Programs started by the foundation as simple pilot projects to demonstrate better practices in health, sanitation, child care, agriculture and community service have spread throughout entire countries. PROGRAM EXAMPLES A demonstration in a group of villages so improved the community life that the Government adopted the same program to include all villages. A health program aimed particularly at eliminating malaria reduced the inci- dence of the disease from 80 percent or more of the population to 4 percent, and taught the people how to control permanently the conditions which produce malaria. A village center featuring health, child care, and recreation was so successful that it became the national pattern and was reproduced by the people them- selves in a number of communities. The village schoolteacher was the focus of a training program in still another country, making the village school the center of a well-rounded program of improvement of village life. These accomplishments typify the methods and aims of the work being carried on today in Greece, Syria, and Iran. LOCAL LEADERSHIP DEVELOPMENT Other aspects of the foundation's service are equally significant and revealing. This type of program calls out and develops local leadership. Today, many projects are entirely in local hands and the outstanding personalities on the field are nationals, not Americans. Stimulation of Government financial assist- ance and community labor multiplies manyfold every dollar contributed from America through the foundation. The examples set and the ideas developed penetrate far beyond the foundation demonstrations. The programs attract of- ficial visitors from other Near East countries and from distant nations which have similar needs. COOPERATION WITH LOCAL GOVERNMENTS AND FOA Finally, one of the most important results attained is that the foundation en- joys the confidence of and works in close cooperation with the governments of Near East countries and with the agencies of the United States Government engaged in technical assistance. Programs have been conducted in cooperation with FOA and its predecessor agencies in Greece, Syria, and Iran. In every instance this has worked to the advantage of Near East Foundation, to the local governments and, we believe, to the United States Government. Today, programs are continuing in Iran and we are negotiating with FOA for contracts in Greece, Afghanistan, and Jordan. Our experience in operating with assistance from United States Government missions has convinced us that we can work together to the mutual benefit of all parties concerned. We believe that Near East Foundation has benefited quite apart from financial assistance in the following ways: 1. We have had access to technical advice and assistance outside of our own limited staff. 2. We have had assistance in securing seeds, materials, insecticides, et cetera, that were not readily available. 3. We have conducted a number of projects cooperatively such as a sanitation school, municipal water projects, forage tests, equipment demonstrations, student aid programs. 340 TECHNICAL ASSISTANCE PROGRAMS - 4. We have been encouraged to maintain our own identity and to conduct our program according to the objectives, ideals, and philosophies of our own organiza- tion. We also believe that benefits have accrued to the United States technical mis- sions in the following ways: 1. Near East Foundation projects have been used as training and briefing centers for both American and nationals of the country. 2. Near East Foundation demonstrations have been used to show important visitors from inside and outside the countries typical technical-assistance projects in operation. 3. Near East Foundation has supplied certain types of technical help and advice not readily available to the mission. 4. The foundation's demonstrations which have proved successful have been drawn on to launch expanded projects throughout the country. 5. The foundation's long experience in conducting technical assistance projects has been undoubtedly of value to the United States Government in formulating its technical assistance programs. ADVANTAGES OF PRIVATE AGENCY WORK IN TECHNICAL ASSISTANCE In presenting this statement on the work of a private agency, Near East Foundation must emphasize that it endorses the efforts of the United States Government in technical assistance and recognizes that only a government can undertake programs of the magnitude that is required to meet the pressing needs of current world problems. At the same time the private agency has certain advantages which include the following: 1. Freedom from suspicion of political motives resulting in a more ready acceptability of its programs both by the people and their government. 2. The opportunity to undertake projects along modest lines until their practicability has been demonstarted. 3. The continuity of effort afforded by a permanent experienced private agency that is not subject to political change. On the basis of our experience in operating with the United States Government missions since World War II, the foundation stands ready to discuss any cooperation efforts in any countries of the Near East where our experience may be useful. Senator MANSFIELD. Mr. Donald K. Price, vice president, Ford Foundation. Will you take the chair, please? Mr. Price, will you read your statement? Mr. PRICE. Yes, sir; if I may; perhaps I could paraphrase a little and shorten it. Senator MANSFIELD. No, read the statement, and then we will ask you questions when you get through. STATEMENT OF DON K. PRICE, JR., VICE PRESIDENT, THE FORD FOUNDATION Mr. PRICE. Senator, I am a vice president of the Ford Foundation, with responsibility for its international programs. This includes the foundation's overseas development program, which generally corres- ponds to the technical assistance activities into which your subcommit- tee is inquiring. I am very glad for the opportunity to give you an account of the foundation's activities. Perhaps I should begin by saying that the foundation has made full public reports on this program which I will make available, in addition to this statement, to the subcommittee and its staff. These statements began late in 1950 with the announcement by the trustees of the future policy and program of the foundation, and each annual report since then has given an account of the overseas development TECHNICAL ASSISTANCE PROGRAMS program. The most recent information will be included in the report for our 1954 fiscal year which is now in the hands of the printer. I will submit a copy of the section dealing with overseas development to the subcommittee staff. GOAL OF FOUNDATION'S TECHNICAL ASSISTANCE ACTIVITIES The first question in which you may be interested this afternoon, I suppose, is: What is the foundation trying to accomplish by its technical assistance activities? When the trustees began this program, it seemed to them that even though there are severe limitations on what a private institution can accomplish in international affairs, it would still be useful for the foundation to do whatever it could to help reduce international tensions and to help contribute to peace and international security. The main responsibility in such matters is undoubtedly in the Government, but nevertheless private business and private educational, scientific, and charitable organizations have something to contribute. As the foundation looked at this problem it seemed clear that the area of the world in which there was at the same time the greatest possibility of progress, and the greatest potential instability, was the area ranging from Turkey on the west to Indonesia on the east-the belt of countries, many of them newly independent, lying across the southern half of Asia. It seemed clear that the foundation would be doing a public service if it could make a contribution toward helping these countries solve their economic and social problems, and develop stable institutions on a free and democratic basis. As I look back on this decision and on the foundation's experience in carrying it out, I see no reason to doubt its wisdom. The competition in Asia is even keener today than in 1950 between the nations which are seeking to solve their political and economic problems by free and democratic methods and those which are fully committed to Communist dictatorship. Senator GREEN. May I interrupt there to ask some questions? Mr. PRICE. Please do, sir. GOVERNMENT VERSUS PRIVATE EXPENDITURES Senator GREEN. You spoke about the private business and private education and charitable organizations which have something to con- tribute, as well as the responsibility of the Government. Do you have any figures showing the proportionate contributions they make? Mr. PRICE. We have-the only ones I have got, sir, are in the House Foreign Affairs Committee publication about a year ago, which I am sure your staff is familiar with. I could simply give you that; I could give you figures of our own operation. Senator GREEN. I know; but can you give us figures on Govern- ment operations, and the others, as a whole? Mr. PRICE. I do not believe I have that before me, and I do not remember them offhand, Senator. I could find them. Senator GREEN. Which is the greater? Mr. PRICE. The Government incomparably. I suppose the Govern- ment operations in the same area where we do business, have been running, if you add technical assistance and economic development, 42 TECHNICAL ASSISTANCE PROGRAMS well, they talk in terms of 200 million, and we talk about 5 million. Senator GREEN. I am not talking about one private organization, but the combined total. Mr. PRICE. I do not know how I could get those figures, sir. I think the Foreign Affairs Committee made an effort to get them and published some. Senator GREEN. I would like to have them. Mr. PRICE. I do not have them with me. I am sure they are available. Senator GREEN. Is there any general agreement as to the division of work or responsibility between the Government and these other organizations? Mr. PRICE. I was going to deal with that in a moment, sir. Would you prefer me to go on, sir? Senator GREEN. Yes; I prefer you to go on now with your regular statement. Mr. PRICE. Yes, sir. FIELDS IN WHICH FOUNDATION OPERATES Then, what did the foundation undertake to do? First of all it sent special missions to the countries in question, and, on the basis of their surveys, decided on the fields in which it would undertake its program. The first field was economic development, especially in the rural areas. This was because the first problem some of these coun- tries had was to increase their food supply. But all of them have to go beyond assuring their mere physical survival to build up the kind of competence required for business and Government stability in the world today. This leads to the other three fields in which the founda- tion's program has concentrated. The second field is education, since newly independent countries obviously needed to increase their degree of literacy and change the nature of their educational systems if they were to fit their people for self-government. The third was public administration, in view of their need for greater competence in ad- ministering their governments. The fourth was social and economic research, since most of these countries lacked the basic elementary techniques by which a modern country studies its own business and agricultural and social problems, and gives its people the basis for making free and informed decisions on public issues. Then, how have we gone about this program? It has not been by engaging in direct operations-we have not conducted research or run schools or built institutions. The foundation's program has con- sisted primarily in making grants for such purposes to public and pri- vate agencies and in enabling them to make use of expert consultants. In making these grants, its basic principle has been to help those who want help, and who will be able to use it to help themselves. We are not inclined to support model projects just to show Asians how things are done in the United States. Instead, we have tried to support projects which are cheap enough, and simple enough, to be taken over and administered by the countries themselves and spread rapidly with local support. We have no de- sire at all to do something that is too elaborate or expensive for a particular community, or which the community does not want-and TECHNICAL ASSISTANCE PROGRAMS 343 want with enough conviction to assure their taking over its support. themselves in a comparatively short period of time. These are not new principles; and, perhaps, I should interject that Dr. Badeau has made that quite clear to you. These are not new principles, they have been accepted over the past few decades by a great many private and voluntary organizations, and I am sure that they are shared in the technical assistance programs of the Government. They are particularly important in a region where the enthusiasm of the people is demanding rapid progress. I hope it is needless to say that the foundation's program is educa- tional, scientific, and charitable in nature and that we do not engage in propaganda or political activity. If I were to try to sum up the theory underlying this program, it would be something like this: We are trying to make available to those nations in Asia and the Near East who want it some of the experience by which the United States has put science and education at the disposal of the great ma- jority of our population. In the United States our system of wide- spread public education and our extension system to bring agriculture and the mechanic arts to every farmer in the country have led to an unequaled distribution of material progress and of political democ- racy among our people. I think there is something in this experience which will be useful to other nations, and from what the foundation. has observed I think other nations want to learn from it. RELATIONSHIP AND COORDINATION WITH OTHER OPERATING AGENCIES In carrying on this program we of course try to keep in touch with other agencies, private and public, that are active in the same field. We have an office in each area where we make technical assistance available, in India, Pakistan, Burma, and Indonesia, and a single office to serve the several countries in the Near East. Each of our overseas representatives, with the aid of a small staff, tries to keep in touch with the needs and opportunities in the field; to know what needs are being met by other private organizations as well as by public agencies; and to recommend to headquarters such grants as the foundation may make, and then follow them to see the way in which the money is spent. I may add there, if I may, Senator, that our representatives are always quite capable of recommending a great many more projects than it would ever be possible for the foundation with its resources to support, so action on their recommendation is by no means auto- matic; we have to make the decisions at headquarters. Senator GREEN. I suppose that during your remarks you are going to give the basis on which you think the Government and your foun- dation and the other foundations ought to share in the activities? Mr. PRICE. I touch on that in the next paragraph, and maybe I will elaborate on it, sir. Senator GREEN. Thank you, sir. Mr. PRICE. We try to avoid competition or duplication with other agencies; we do not want to spend money for purposes that others want to and can accomplish just as well. At the same time we are glad to cooperate with other agencies in a joint approach to certain prob- lems, and here our policy is simply to try to do those things which it is most appropriate for a private agency to do. The foundation finds 344 TECHNICAL ASSISTANCE PROGRAMS that it can take on some jobs that a United States governmental agency finds it difficult to do by reason of the size of its program and the nature of its procedures, or because the foreign country is not willing to take official help on a particular problem. Senator GREEN. Are there many such instances? Mr. PRICE. Yes, sir; if I may give an illustration, in several coun- tries we have done work for national governments by supplying con- sultants to help them work on the top organization of their govern- ment. I do not believe that they would be willing, in general, in those countries, to take such help from the United States Government. EXAMPLE IN PAKISTAN Senator GREEN. Can you give some illustrations? Mr. PRICE. For example, in Pakistan we made it possible for an expert from an American University, who had had extensive govern- mental experience, to become a consultant to the Prime Minister of Pakistan, and he worked there for a considerable number of months in helping prepare a plan for him on how to improve the ad- ministrative system of the top level of the Pakistan Government. Senator GREEN. And you paid his salary and expenses? Mr. PRICE. We paid the salary and expenses; we had no other con- trol over him. He had no authority to report to us. We have no trol over him. He did not make his report to us. It was a report to the Prime Minister of Pakistan, and it was considered confidential, and we do not hold him to account for the details of his recommendations. Senator GREEN. The United States Government could not have done it. Mr. PRICE. I think the Pakistan Government did not ask the United States Government to do it, and I can understand why they did not, because to work in the next room to the Office of the Prime Minister is a fairly delicate relationship, and when an international official relationship is involved that becomes a very awkward business. Senator GREEN. Now, how about the relationship of your founda- tion to the different organizations which make appropriations for similar purposes? How do you divide the work with them? Mr. PRICE. Well, we are a granting agency and not a direct-opera- tions agency, and we have made grants to a considerable variety of other private institutions, many from the United States, who are working in those countries, so we do not distinguish between our functions and theirs in terms of who does what kind of work. We are glad, wherever it seems that our general purposes can best be accomplished that way, to give them the money to advance this program. Senator GREEN. You must make some effort not to encourage dupli- cation. Mr. PRICE. We do our best, and here our main principle is that we have a resident representative and a small staff in each of these countries and that is their main purpose, to find out what needs to be done that others will not do, and recommend only those things in which we would have a particular opportunity, and others would not do it. TECHNICAL ASSISTANCE PROGRAMS 345 May I give an illustration or two? Senator GREEN. I wish you would. EXAMPLES IN INDIA Mr. PRICE. I do not think we can draw a line rigidly on the basis of saying we will not do at all the type of thing that the Government will do. That is to say, the Government's technical assistance program is interested in agriculture and rural development, and so are we. We would rather seek to do the kind of things that, for one reason or another, the Government does not choose to do, or where our help can be more timely and a little more quick, perhaps. In some cases, we give money toward the same projects that the Government could give money toward. We are presently contrib- uting-I do not know whether the final details on this have been ironed out, but I do not think there is any harm to mention it- we are presently in the process of making a grant to the college of agriculture in a certain province in Pakistan where the FOA is also making contributions. We are making contributions toward the type of thing that, under Government rules and the currency regulations and so forth, it is a little bit hard for the Government to do it. Also in India, for example, in the community-developed pro- gram which is, perhaps, the activity of ours which has been the best known, we made some grants. We were not the first ones in this business; in a way we came along after a number of years or even of decades experience, by the Ahallabad Institute, which was a mission- ary college in agricultural development. When the president of the foundation, then Mr. Hoffman, and two of our trustees visited there, it seemed to the Indian Government that (partly on the basis of the techniques that had been developed in this little institution) India might advance its community development and increase its food sup- ply very rapidly if they could get a program started very fast. Their problem was just the same as it would be in many an Ameri- can unit of Government, State, Federal, and local. You do not get this kind of change under way very fast with a novel program. The foundation put a substantial amount of money into a number of community development projects, essentially projects to teach local people completely new techniques of agriculture, health, and com- munity life. The same device, this same general program, was then supported on a much larger scale by the FOA. I do not say this because I say we should get credit for starting things they picked out. Ahallabad started it, and many a technician before them, but we came along, I think, when our help was crucial and strategic, and our work and that of the Federal Government together has done India a very great service. I may add that the greatest proof of accomplishment is that the Indians are now rapidly taking full financial responsibility for this program, even ahead of the schedule which they agreed to when we initiated the program with them. 346 TECHNICAL ASSISTANCE PROGRAMS г CENTRAL COLLECTION OF INFORMATION Senator GREEN. Is there any one place where all this information is collected? Mr. PRICE. Well, our annual reports tell the greater part of the story, Senator. There are a number of volumes written by various people on this. I do not know- Senator GREEN. Was all this information supplied to our Ameri- can Government, for instance? Mr. PRICE. Oh, yes; in India, for example, our office is very closely in touch, I am sure, on almost a day-by-day basis with the Embassy and with the FOA mission. Senator GREEN. And all the other institutions or private organi- zations are similarly doing this? Mr. PRICE. Well, our office, I think, is fairly well known by now, and we try to keep in touch with the other ones. I do not think any single institution can claim to be the clearinghouse or the single source on this. Senator GREEN. Do all the other private organizations do the same? Mr. PRICE. I hope so. The ones I know best do. Certainly to take the one from which we have just heard, we keep in close touch with Dr. Badeau. Senator GREEN. Is all this information coordinated in a single place in the Government or elsewhere? Mr. PRICE. I do not know of any single place; no, sir. I know of several places where private institutions have prepared general re- ports on the experience of American voluntary agencies. There was one special report put out about a year and a half ago on this subject. I forget the precise title, but it was something like the Experience of American Voluntary Agencies Abroad. There was another little book put out called Fifty Years of Techni- cal Assistance, which was written by a staff member of the Public Administration Clearinghouse, which sought to tell the story of the experience of all the voluntary agencies working in this field. Senator GREEN. Are there any regular statements given out or pre- pared, so far as you know, by the Government? Mr. PRICE. Not that I know of; no, sir. Senator GREEN. Don't you think they should be? Mr. PRICE. It would be very helpful to us if they did it. Senator GREEN. It would be helpful to all. Mr. PRICE. Yes. Senator GREEN. It would prevent duplication of effort. Mr. PRICE. No question about it. But I do think, Senator, the main problem of avoiding duplication of effort—the main solution of this problem-lies in the close personal relationships in the field. I do not believe a single publication could do it because it always takes a fair amount of time to get that out and by that time it might be too late. I would have more confidence that duplication could be avoided in any one country if our representative kept closely in touch with the FOA man and with the other private agencies. Senator GREEN. Why should not our Government do it? TECHNICAL ASSISTANCE PROGRAMS 347 # Mr. PRICE. The Government perhaps should do it. I have no ques- tion that, both in the headquarters in Washington and in each coun- try, it would be helpful if the Government would have such a publication. Senator GREEN. That is what I wanted your advice about. Thank you. Dr. WILCOX. Senator Green, I would just like to say in this connec- tion that our staff is completing a study on the contribution of the nongovernmental agencies to the technical-assistance program. That does not completely cover your question. Senator GREEN. Not quite the same because I think there ought to be a regular system so that any time you could find out what the situation was, and the Government could give you such information as it chose, but it ought to have it because of the vast amounts that our Government is spending. They would be governed somewhat, it seems to me, by what others were doing. .Mr. PRICE. I do not think of any publication-I suspect a great effort is made to keep in touch, but I do not think there is any publica- tion that covers that. Senator GREEN. Well, doesn't the Ford Foundation's consideration of what these other private organizations are doing, and what the Government is doing, determine the scope of the foundation's work? Mr. PRICE. Yes, sir; no question about it. Senator MANSFIELD. Proceed. WORK IN COUNTRIES NOT RECEIVING GOVERNMENT ASSISTANCE Mr. PRICE. Then, too, we work in some countries where, for one reason or another, there is no United States Government technical- assistance program at all. In most, however, the foundation staff, while serving as an independent private organization, naturally keeps closely in touch with the United States Government agencies, as well as with other private institutions and with the United Nations, and, I hope, maintains a cordial relationship with them. I would not like to leave you with the impression that everything is always smooth sailing. A program of this sort has all of the difficulties that you might expect if you look at the situations in which it operates. We are cooperating with these countries to help them raise their levels of competence and efficiency. There are tremendous obstacles to their progress and these obstacles are a drag on the effi- ciency of any project that is intended to help them. But if this were not so we would not need to undertake a program of this sort at all. The progress is going to be slower than we would like, and slower than their own leaders would like, even though it may be faster than some of the skeptics will believe. Part of the difficulties come, too, from the way in which we have gone about this work. The Ford Foundation undertook this program because it thought the emergency state of international affairs war- ranted it. It could not look too far ahead in the future as it did so. Obviously in any enterprise you can do a more orderly, thorough, and economical job if you can plan your program over a considerable period and work out your plans accordingly. This may be particu- lary true in an effort to help an underdeveloped country speed up its own progress. Such change is a complex and difficult business, די 348 TECHNICAL ASSISTANCE PROGRAMS and I do not think that an ideal job can be done unless we lay our plans fairly far ahead, and try to develop the kind of training that our own experts need if they are to do a good job under unexpected and difficult conditions. We have had to improvise programs and build up our personnel on the basis of fairly short-term plans. I see no way in which this could have been avoided, but I see no use pretending that it always leads to ideal results. Senator GREEN. This is all for foreign help, is it not? Mr. PRICE. Yes, sir. Senator GREEN. Outside of the United States? Mr. PRICE. I am now talking about our overseas program; that corresponds to the technical assistance programs of the Government. Senator GREEN. But it would not include the islands overseas that are part of the United States? Mr. PRICE. No, sir; we do not have any programs there. NEED FOR QUALIFIED PERSONNEL At the same time, I think that we-in the United States generally as well as in the foundation-will need to give more thought to the question how we can develop the knowledge and competence which is required in the conduct of this kind of program. If the Nation is to be in it for a long time-and the extent to which the land-grant colleges and other private institutions are taking up such activity suggests that this is the case-I think all of us who are involved need to think more about how we can provide more adequate training and more definite career opportunities for the people who are to do the work. American private institutions have been in the business of technical assistance abroad for a long time. Among the projects and insti- tutions which the Ford Foundation is now supporting, many can trace their origin back to the work of American voluntary agencies, some during the mid-19th century. Programs of this sort have done much to demonstrate to the underdeveloped countries that in the United States not all educational, charitable, or scientific activity is controlled by the National Government. If we hope the newly inde- pendent Asian nations will give greater opportunities to private agen- cies of all kinds as they develop their political and economic systems, we would do well to persuade them not only by advocating private enterprise but by setting them an example in the field of technical assistance. I shall be happy to answer any questions that I can, and to supply whatever detailed information may be of use to your subcommittee. Senator MANSFIELD. Thank you, Mr. Price. Senator Green? Senator GREEN. No more questions; thank you. PERSONNEL ENGAGED IN FOUNDATION'S TECHNICAL ASSISTANCE WORK Senator MANSFIELD. Mr. Price, how many people are engaged in this type of work by the Ford Foundation? Mr. PRICE. In this program I think I can be more informative about it if I name them in categories. We have 38 professional staff mem- TECHNICAL ASSISTANCE PROGRAMS 349 bers, including our overseas office and our headquarters. May I refer to some figures here? That 38 includes both our regular staff and the temporary consult- ants that we send abroad at the request of foreign governments. It is actually 19 and 19; 19 are our regular continuing professional staff, a half dozen at headquarters and 2 or 3 in each of the countries. Then, in addition to that we have at headquarters a clerical staff of 10. Then there are personnel employed in the countries abroad, most of whom are indigenous personnel, and that number is 62, and that includes everything from secretaries and clerks to the guards, drivers, and so forth, that are needed in some of these localities. Senator MANSFIELD. And you have been engaged in technical as- sistance programs overseas since 1950? Mr. PRICE. 1951, really. Senator MANSFIELD. 1951. I suppose you have members on your staff who have had prior experience with point IV? Mr. PRICE. Yes, sir. We have a considerable number of our staff members who have had previous experience in various governmental agencies. Our representative in India came from the Department of Agriculture, and before that from Cornell; our representative in Indonesia was formerly with MSA, an MSA mission in Turkey. Our representative in Beirut was formerly at the University of Virginia, and is on leave from there at the present time; and our representative in Karachi was formerly at Oklahoma A. and M., and had some Government Senator MANSFIELD. And I see you have Mr. Iverson here, who was quite effective when the point IV program got started in Latin America. Mr. PRICE. Yes, sir; and I think if it were a question of who knows more in detail about this program, he should be speaking to you in- stead of myself. Senator MANSFIELD. Of course, we all realize, as far as the govern- mental aspects of point IV are concerned, that emphasis can be learned from the Latin American program where it worked very effectively and where the inspiration, if you want to call it that, came from, for the so-called technical assistance program that we have today. We would like to see a return to that original autonomy idea of the original point 4 program, so point 4 would not be mixed up in other programs, so it could maintain its identity, and so that it could function as a long-term series of projects in different parts of the world. SYRIA AND BURMA You state, Mr. Price, on page 5 of your statement: then, too, we work in some countries where, for one reason or another, there is no United States Government technical assistance program at all. What countries are those? Mr. PRICE. Burma and Syria are the two that come quickly to mind. In Burma there was a technical cooperation program, and the Burmese discontinued that agreement. It was one of those situations, and as I understand it, where they wanted, the leaders of the Burmese Gov- ernment, wanted to demonstrate to their own people that they were not accepting too much influence from another government. At the 59637-55-23 350 TECHNICAL ASSISTANCE PROGRAMS same time they have been most cordial toward our foundation, and indeed toward the United States Embassy people who keep up with our activities. Senator MANSFIELD. But they are afraid of military and/or political implications. Mr. PRICE. I think it is very hard for a private citizen to try to state what another government's intentions were. But it is my under- standing that they had rather some of the dislike that many of the Asian leaders have an unwillingness to be too closely connected with any Western nation. Senator MANSFIELD. I understand your reason for answering as you have, Mr. Price, and I will say for the record that it is my under- standing from reading the newspapers, that that may have been the reason or the reasons for the ending of the technical assistance program in Burma. Mr. PRICE. Would you mind my saying something off the record or is that a proper request? Senator MANSFIELD. Off the record. (Discussion off the record.) Senator MANSFIELD. Did you say we have no government program in Syria? Mr. PRICE. That is my understanding, sir, yes. Senator MANSFIELD. Mr. Price, I want to thank you for your fine testimony. This concludes the hearings for this afternoon. We will meet at 10 o'clock tomorrow morning in room 457. Thank you very much. The meeting is adjourned. (Whereupon, at 3:35 p. m. the subcommittee adjourned to recon- vene at 10 a. m., Friday, March 4, 1955.) TECHNICAL ASSISTANCE PROGRAMS FRIDAY, MARCH 4, 1955 UNITED STATES SENATE, SUBCOMMITTEE ON TECHNICAL ASSISTANCE PROGRAMS OF THE COMMITTEE ON FOREIGN RELATIONS, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10 a. m., in room 457, Senate Office Building, Senator Theodore Francis Green presiding. Present: Senators Green (presiding), and Mansfield (chairman of the subcommittee). Senator GREEN. Ladies and gentlemen, this is the last of this series of public hearings on this technical assistance program, and there are a number of speakers who want to be heard. The first witness will be Mr. Bernard Weitzer, Jewish War Vet- erans of the United States. STATEMENT OF BERNARD WEITZER, NATIONAL LEGISLATIVE DIRECTOR, JEWISH WAR VETERANS OF THE UNITED STATES OF AMERICA Mr. WEITZER. Mr. Chairman, on behalf of the Jewish War Veterans of the United States of America, I am happy to express our apprecia- tion for this opportunity to present, once again, our support for the technical assistance program. Our organization came at once to the support of the point IV program when it was first announced in 1949 and has since constantly urged the amplification of the technical assist- ance program conducted by the United States through bilateral agree- ments and the technical assistance program conducted by the United Nations. At our 59th annual national convention, we again passed a resolution on this subject with these resolve clauses: Be it resolved, That the Jewish War Veterans of the United States of America, in convention assembled this 17th day of October 1954, in Richmond, Va., reaffirms its confidence in support of the technical assistance program conducted by the United Nations through bilateral agreements with individual friendly countries and the technical assistance program conducted by the United Nations; and be it further Resolved, That we urge more liberal appropriations for such programs than have been hitherto granted. Our organization has continuously supported the foreign aid pro- grams ever since the Marshall program, later called the Economic Cooperation Administration, still later, the mutual security program, was first proposed. Like all our citizens, we were impelled to this support by a variety of reasons. One of our fundamental reasons 351 352 TECHNICAL ASSISTANCE PROGRAMS was that we recognized in these programs, a real aid to our national security through the strengthening of the economic, political, and social fabric among our friendly world neighbors. NEED FOR BROADENING SCOPE OF PROGRAM It was natural that at the start of these programs our attention was largely focused in Europe. Soon after we recognized the Com- munist threat reached into every corner of the globe. These areas included peoples who needed most of all what the technical-assistance programs could provide. As our bilateral technical-aid agreements and the United Nations technical-aid programs proceeded, the results achieved proved the wisdom of these technical-aid activities. The record of those results has been reported regularly to the Congress. The opening statements before your hearings by Under Secretary of State Herbert Hoover, Jr., and Foreign Operations Administrator Harold E. Stassen have brought you up to date regarding the results and the more effective procedures in the use of the funds which the Congress has appropriated. Great though the achievements have been through these programs, the need for continuing and broadening the effort through larger appropriations and more manpower is pressing. The reduction of infant mortality and the increased production of food made possible by the abatement of disease and improved methods of agriculture are typical benefits among countless other results of these technical-aid programs. There you have, in essence, the basis for the strengthened resistance to the infiltration and subversive activities of the Com- munist threat which is aimed at engulfing our whole concept of the dignity of the individual. Another way, perhaps, to state this concept is to paraphrase President Lincoln's immortal sentence so as to read "government of the people, by the people, for the people shall flourish throughout the earth." I am confident that all will agree that the achievements of such an objective will assure the greatest possible addition to our national security. SPECIFIC SUGGESTIONS FOR IMPROVEMENTS Toward this end the Jewish War Veterans of the United States of America feel justified in urging two steps: First, substantially larger appropriations for United States technical-assistance programs and the technical-aid programs of the United Nations; second, devising a means for assuring a greater degree of continuity to these programs. These steps will make it possible to attract men with the talents which are required and will permit the planning which will produce the maximum results. Time is vital in this race to defeat the Communist threats by means other than military force. In many of these situations military force can be of little help in defeating infiltration and subversive activities. Minor appropriations, interrupted yearly planning, and the resulting postponement and handicaps can spell disaster to our objectives. A doubling of current appropriations and activities for our own tech- nical-assistance programs and those conducted by the United Nations can bring us closer to certainty of avoiding hot wars which will run in cost to tens of billions of dollars and tens of thousands of casualties. TECHNICAL ASSISTANCE PROGRAMS 353 I hope you will agree that the appropriations of the next 5 years, which, under our suggestion, might run approximately a billion dol- lars, would be a considerable saving over the possibilities that lie in not doing the job we are capable of doing through these technical- assistance programs. Thank you. Senator GREEN. Thank you very much. Senator Mansfield, do you have any questions? Senator MANSFIELD. No, Mr. Chairman. I think that is an excellent statement, and I am glad to note that the Jewish War Veterans are in favor of greater continuity of the technical assistance programs, and also a greatly expanded technical assistance program, both car- ried on unilaterally by this country and the United Nations. That's all, Mr. Chairman. Senator GREEN. May I ask a question? Mr. WEITZER. Yes, sir. COMMUNIST THREAT NOT ONLY JUSTIFICATION Senator GREEN. You speak as though the Communist threat were the only purpose of this particular assistance program. Do you or do you not think it will be advisable to have such a program, even if the Communist threat came to an end? Mr. WEITZER. Well, yes, Senator; except that I was emphasizing the fact that, among other reasons, our fundamental reason was national defense. Now, I think for a great variety of ethical reasons, as well as for the improvement of our own well-being in our own country, as well as the improvement in these other countries, I think this program is amply justified. Senator GREEN. I assume that is what you meant, but the only way you mentioned it was through the Communist threat. Mr. WEITZER. I was simply emphasizing the question of our national security and our national defense on which we are spending now some- thing like thirty-five or forty billions of dollars a year, and I think we would cut that, as well as accomplish these other objectives which I mentioned briefly through these technical assistance programs; and, of course, in many places that will earn for us the undying gratitude of these peoples, as well as the fact that they will be able to play a bigger part in adding to the well-being of our kind of civilization in every part of the world. I think that, for example, one of the things that we can accomplish in these countries, as we have accomplished here, is the philosophy of having a bigger pie to divide, instead of everybody fighting for a bigger piece of pie out of the same pie. Now, I think if we can get that kind of a feeling all over the world, we can have a much happier world than the one we live in; but once again I come back to the fact that as a veterans' organization we wanted to testify principally regarding this matter of national defense on which we have urged the Congress many and many a time to spend these billions of dollars, because we would like to see Congress able to cut that down, and we think you will be able to cut that down when we accomplish the results that these technical assistance programs are aimed at. " 354 TECHNICAL ASSISTANCE PROGRAMS Senator GREEN. Thank you very much for your explanation. Mr. WEITZER. Thank you, sir. Senator GREEN. The next witness will be Dr. Maurice Goldberg. Will you explain whom you represent, please? STATEMENT OF DR. MAURICE GOLDBERG, VICE PRESIDENT, B'NAI B'RITH Mr. GOLDBERG. Yes, sir. I am the vice president of B'nai B'rith. I am here to read a state- ment of our president, Mr. Philip M. Klutznick, who is unavoidably called out of the city and unable to be here. B'nai B'rith endorses the objectives and lauds the accomplishments of the mutual security program of the United States, particularly the technical assistance program. We endorse the purpose of the program which is to share knowledge in the areas of health, educa- tion, agriculture and industry. We approve the manner in which the program is being carried out, that is, people working together to achieve a mutually agreed upon objective. Furthermore, the basic financing of this program, one in which the governments involved are jointly obligated by their agreement, engenders a friendship with the United States and, at the same time, does not destroy the self- respect of the nation being helped. We are glad to note that the Congress has made more funds avail- able each year; that more American technicians are working over- seas in the program than ever before, and that under this program more foreign technicians are now studying here in this country than in previous years. We should like to see the Congress continue this program of eco- nomic cooperation. Many nations need more technical aid and out- right financial assistance so that the technical aid can be utilized to a maximum extent. EFFECTIVENESS OF PROGRAM IN ISRAEL We in B'nai B'rith are also interested in the accomplishments of the technical assistance program in the State of Israel. From many of our lay and professional leaders who have visited Israel, we have received first-hand reports regarding the effectiveness, the influence and scope of the United States operations mission in Israel, as the technical assistance program is known in that Middle East democracy. Only recently we received a report describing the construction in Israel of five vocational training centers for immigrants from back- ward countries. These training centers were made possible by the advice and cooperation given by the American technicians and the availability of shop equipment from fhe United States. This voca- tional training project is one of the largest and most important in Israel, and will make possible the training of thousands of skilled industrial workers. In the area of industrial planning, we have received commendatory reports about the survey of Israel's industries made by a team of United States experts. The survey report made by this team has been TECHNICAL ASSISTANCE PROGRAMS 355 ་ • well received by the Israeli Government. We have also received a report regarding the technical assistance program known as Opera- tion Cowboy. This project is designed to make Israel self-sufficient with respect to its meat supplies which are almost entirely imported today. Technicians of both countries are hard at work transforming Israel's barren lands into lush pasturage and in breeding beef cattle suitable for Israel's climatic conditions. TRAINING ISRAELI TECHNICIANS IN UNITED STATES We would like to recommend that more opportunities be made avail- able to train Israeli technicians in the United States. Those who have been trained here and have returned to Israel have become the best ambassadors of goodwill for the United States, spreading Ameri- can democratic ideals in Israel. Israel has made a small beginning in building up a modern civil service. We know that Isreal is very grateful for the services of United States experts in public administration who have advised the fledgling 6-year-old state on matters of job classification, departmental organization, and the like. Our reports indicate that the Israeli people feel a deep gratitude to the people of the United States for this technical assistance. There is no doubt in our minds that the large share of the accomplishments in the technical and economic fields have been due to the technical aid which Israel has received from the American people. We feel that it is important for the United States to strengthen Israel as the one sure bulwark against communism in the Middle East. Israel, as the most highly developed industrial country in the Middle East, will certainly have an influence upon and provide leadership to her neighbors in their economic development, once peace has been achieved in the Middle East. INCREASE IN ECONOMIC STRENGTH OF FREE WORLD In closing, I would like to observe that this worldwide technical assistance program, in our estimation, is a unique one. Unlike many foreign aid projects of the past, it is not merely a handout program. It is based on the worthier and more effective principle of self-help and mutual aid. As we see it, it has enabled many economically underdeveloped areas to develop their resources, raise their standards of living, create new sources of wealth. We believe that this program has resulted in an overall increase in the economic strength of the free world. It has enabled many of the weaker nations better to with- stand and to repel the threat of communism within or outside their borders. Senator GREEN. Thank you very much. Do you have any questions, Senator Mansfield? Senator MANSFIELD. No questions, Mr. Chairman. Senator GREEN. Thank you, sir. Dr. GOLDBERG. Thank you, gentlemen. Senator GREEN. The next witness is Mr. Charles Henry Lee. 356 TECHNICAL ASSISTANCE PROGRAMS STATEMENT OF CHARLES HENRY LEE, MEMBER OF THE NEW YORK BAR AND OVERSEAS TRADE EXECUTIVE Mr. LEE. My name is Charles Henry Lee, and I am a member of the New York bar and an overseas trade executive. I am appearing here, however, in a personal capacity. First of all, I wish to express my sincere thanks to the Subcommit- tee on Technical Assistance Programs of the Committee on Foreign. Relations for the privilege of appearing here today. I am keenly interested in the point IV program, having observed its progress since its inception, first as a Government official concerned with its growth and development and later as a businessman actively engaged in foreign trade. I should like to divide my observations into four categories; first, point IV as a policy; second, the program's content; third, its organi- zation; and finally, its size. POINT IV FROM POLICY STANDPOINT From the policy standpoint, point IV was first enunciated as a basic tenet of our foreign policy in 1949 when President Truman in his inaugural address referred to this concept as: "A bold new program for making the benefits of our scientific advances and industrial prog- ress available for the improvement and growth of underdeveloped areas." This highly dramatic announcement was received with ex- traordinary interest and fired the imagination of people throughout the world. The tremendous initial interest and the opportunity for world leadership that the program offered, in my opinion, has not been sus- tained. It is my belief that the reason why we have not reaped the full measure of benefit that we could and should have from this states- manlike approach to world affairs is that we have failed to place the program in its proper perspective. Neither the people of the United States nor the people of the countries where the program applies have been given a sufficiently clear statement of its purpose and signifi- cance in relation to its proper implementation. Moreover, it has been justified in the eyes of our own people for the most part in the purely negative character of a defense measure against communism. The people of other countries have been justifiably confused by its vacillat- ing and changing development, and its constantly evoked relationship to strategic economic and military aid. The great French historian, de Tocqueville, who has perhaps known us better than any other foreign observer, writing about the United States in 1835, drew admiring attention to an outstanding and pecul- iarly American quality, our strong sense of civic responsibility that was evident even then in every community. In other words, more than a century ago our essentially civil spirit could be recognized even in the then backward areas of our country. Today this continues to be a characteristic distinguishing mark of our way of life. What in- telligent and affluent American industrialist would fail to recognize his civic responsibilities toward the community in which he resides. and especially toward those who are less fortunate. Whether from purely religious or humanitarian motives or as a matter of enlight- ened self-interest, his civic sense compels him to aid his community. TECHNICAL ASSISTANCE PROGRAMS 357 Since World War II our world status has changed radically. We are now 1 of the 2 largest and most powerful nations in the world. As a result we are faced with world responsibilities in a community of nations that are comparable with those that we recognize in the com- munity life within our own land. A distinguished American Ambassador recently described our new position very clearly. He said that the United States position was much like that of a wealthy potentate who lived in a magnificent mansion with fertile lands about which provided everything he needed. Surrounding his property, however, there were many people living in hovels in the most abject poverty. The parallel is obvious. As he said, the potentate could either do something to ameliorate the condi- tions of his underprivileged neighbors, for purely ethical or humani- tarian reasons, or he could consider that unless he did something to assist these other people, it could well be that they could band together and take away from him his own possessions, in which case his assist- ance would merely be a matter of self-preservation. I believe that in originally enunciating point IV we were thinking precisely of our position as a world leader and the new responsibilities to exercise the same type of civic leadership that we accept as a matter of course in our own national life by projecting it into the world community where, as the most powerful and wealthy member thereof, we must demonstrate our capacity and desire to exercise this same civic spirit on a new plane. If this concept were brought home clearly to our people, and the people of other countries realized that this program was nothing more than the projection of our innate civic spirit, for which we are so greatly admired abroad and which represents the generous spirit of the New World, to this new and broader stage, I am convinced that this program could then go forward and do more to reduce and effectively eliminate world tensions than any other single measure. CONTENT OF POINT IV PROGRAM Now, with respect to the content, it is my belief that point IV, as such, should be restricted to cooperative technical assistance in areas that do not in any way conflict with private investment. By that I mean, it should operate in areas that are generally felt to belong to the public domain and represent activities that are politically incon- trovertible. No one can oppose the development of improved health and sanitation conditions in underdeveloped countries. Assistance in vocational education or aid in increasing and improving agricul- tural production are also, for the most part, activities that do not engender political controversy in other nations. Its essence is to teach others how to help themselves. If the program is kept within these confines, its essential spirit and generosity of purpose remain unimpaired but when, as has been the case, it becomes confused with political economic aid, with Export- Import Bank investment guaranties and other economic and strategic considerations, its integrity is watered down or destroyed. Since point IV means so many different things to different people, I believe that it is necessary to either restrict its purposes or to divorce coopera- tive technical assistance, which is the essential ingredient, and give it a new name. 358 TECHNICAL ASSISTANCE PROGRAMS > The heart of point IV is basically the cooperative technical assist- ance technique, and it was precisely the successful development of these programs in Latin America during the past war under the direction of Nelson Rockefeller's Institute of Inter-American Affairs that paved the way and inspired President Truman's celebrated announcement. In cooperative technical assistance we have an admi- rable tool with which to forge a better international climate. Let us use it to the best advantage. ORGANIZATION Now, with respect to the organization: The success of this program depends on two basic factors: (1) well-conceived projects and (2) qualified personnel capable of carrying them out. Undoubtedly the most important consideration is the latter. If this program is to accomplish its objectives successfully then it is essential that there be developed and maintained a corps of professionally qualified indi- viduals capable of carrying it out successfully in other countries. Con- sidering the uncertainties that have surrounded this program and the unstable atmosphere in which the people charged with carrying it out have been compelled to work, it is surprising that good results have been feasible at all. I believe that it is imperative to recognize this program as an essential and bipartisan arm of American foreign policy. The per- sonnel should be given a professional status comparable to that of the Foreign Service. I recognize that it is essential to recruit many specialists for short-time assignments, but, nevertheless, there must be a stable and well-established corps of qualified administrators and operators into which these specialists may be fitted as they are required. As part and parcel of this same consideration, I would say that there must be stability in the location of this program within the framework of our Government. It must not be shifted interminably from one department or agency to another. It is a basic arm of United States foreign policy and should, therefore, be under the aegis of the Department of State, even though not physically located within the Department. My belief is that it should be placed in an expanded Institute of Inter-American Affairs which could administer and carry out these programs in any area. Point IV technical cooperative assist- ance should have a standing of its own within our Government. It should not be confused with other forms of aid which must necessarily happen if it is commingled, as it has been, in some way or another with the ECA and MSA and now FOA. SIZE OF POINT IV PROGRAM Now, with respect to size, I believe this is an item which should be left up to the administrators of this program, who are intimately familiar with conditions in each country, and can, therefore, deter- mine what is the optimum scale in each case. The cost of these pro- grams, in any event, is modest. I should like to offer two comments that I believe are pertinent: First of all, I beileve this program should be operated independently of political considerations affecting other forms of economic and TECHNICAL ASSISTANCE PROGRAMS 359 strategic aid. By this I mean, the size of our technical cooperative assistance should not be measured by such considerations. Hence we should not increase our assistance of this type to a particular south- east Asian country and reduce that to a Latin American nation, simply because strategic considerations are more compelling in the former. Second, I would say that where demonstration equipment is required as part of a technical cooperative program it should be included as part of such program and not tied in with straight economic aid. Con- versely, it should not be included if unnecessary. Thank you. Senator GREEN. Senator Mansfield, any questions? PARTICIPATION IN U. N. PROGRAM Senator MANSFIELD. Mr. Lee, this is a very fine statement. I notice, however, that you make no mention whatsoever of the United Nations technical assistance program. Do you have any comment to make on legislation in that field? Mr. LEE. Senator, thank you for your comment. I would say this: That I feel that since we are a part of the U. N. Organization, we must necessarily cooperate with it, and I think we should participate, therefore, in its technical assistance programs. However, I feel that our major effort should be devoted to our own technical programs. In other words, our major contribution should be to our programs, where it is quite clear what we are doing and where. If there is any credit, we receive it directly. INDEPENDENT STATUS FOR UNILATERAL PROGRAM Senator MANSFIELD. You believe that the point IV unilateral pro- gram, the American program, should be accorded an independent status? That it should be in the Department of State, with conti- nuity of programs and projects, and that it should have its own. personality? Mr. LEE. Exactly. In other words, the hard core of administrators and operators should be on a professional basis, and there should be continuity there. It may be necessary to enlist the services of particular specialists in certain fields, and they can be brought in for temporary periods of time, but I think it is essential that the group, the headquarters group here, and the people who administer the program abroad, should be on a professional status with continuity of service that gives the pro- gram the stability it should have. Senator MANSFIELD. Thank you, Mr. Lee. That is all, Mr. Chairman. Senator GREEN. I want to supplement what Senator Mansfield has said, and congratulate you on an exceptionally well-organized paper. You have said a great deal in a short space, and a great deal that is worthy of careful consideration, and I thank you. Mr. LEE. Thank you, sir. Senator GREEN. The next witness will be Mr. E. Raymond Wilson. Mr. Wilson, you may proceed. 360 TECHNICAL ASSISTANCE PROGRAMS } STATEMENT OF E. RAYMOND WILSON, ON BEHALF OF THE FRIENDS COMMITTEE ON NATIONAL LEGISLATION Mr. WILSON. My name is E. Raymond Wilson. I am executive secretary of the Friends Committee on National Legislation, 104 C Street NE., Washington, D. C., an organization which seeks to repre- sent some of the concerns of Friends, but which does not speak for the whole Society of Friends, whose democratic organization does not lend itself to official spokesmen. Last month, on January 27 and 28, I attended a National Workshop on World Social and Economic Development, held here in Washing- ton. This workshop was planned by about 20 national organizations, and was attended by close to 200 delegates from over 100 farm, labor, business, educational, church, and civic organizations, all of whom have educational, legislative, or working programs in the general area of technical cooperation. The purpose of the conference was to settle into some of the same kind of serious evaluation and critical analysis which your subcommittee is undertaking, and to ask, and try to answer, some of the questions you have been considering, and others. The workshop did not issue statements or pass resolutions-it was not so constituted. I should, however, like to give you my impres- sions of some of the points of concern and substantial agreement which we found at that time. The Friends Committee on National Legisla- tion also is in general sympathy with these views, and I want to empha- size that I am not speaking for any of those delegates or any of the organizations, but trying to reflect some of the major emphases in that conference. I am raising five questions, among many which I would like to ask, and making some very brief comments upon them. Senator GREEN. These are questions you asked yourselves? Mr. WILSON. These we asked ourselves. AIM OF ECONOMIC AND TECHNICAL DEVELOPMENT 1. What is the aim of world economic and technical development? What should be its motivation and driving purpose? To help that part of the human race, about two-thirds of them, who are sick or illiterate or politically or economically disadvantaged, develop their God-given potentialities with what assistance and re- sources the more highly favored nations and areas can share with them. It means primarily helping others help themselves do the things they want to do toward our joint community aspirations and ideals. Programs must be geared to the needs and ability of countries to absorb them. This kind of program must express both a deep and passionate con- cern for people, and a determination that they need not suffer from conditions which are not their fault. We must meet the zeal of the Communists with comparable intensity and vigor, and we're in a race for time. But this must be an effort for people, not just against com- muhism. Nations which participate in this program must be able to maintain their self-respect, their independence and their dignity, and to feel that they are working with the United States and other coun- tries and not being merely worked upon. TECHNICAL ASSISTANCE PROGRAMS 361 ་ CHIEF LIMITING FACTORS 2. What are the chief limiting factors? I believe most of the group felt that the one most serious limiting factor is finding adequately qualified personnel. People are needed who have the technical qualifications for real skill in making some specialized contribution, the ability to work with others, to fit into native culture and customs, the character to express in their lives more than they can say with their tongues, a willingness to spend a sufficient length of time and to identify themselves with the culture, the lan- guage, and the aspirations of the people. Related to the problem of finding qualified and dedicated personnel is the question that has just been emphasized by the previous witness, continuity-continuity of purpose, continuity of appropriations, long- range plans. Without this continuity, the program may be ham- pered by the unwillingness of qualified men and women to wait for 4 to 6 months for clearance, then to go to the field, only to stay for a short period of time. Experts in many programs require a consid- erable period of time to win the confidence of people with whom they work, to develop programs geared to their needs, and to assure con- tinuation of the program after they leave. The need for continuity arises not only in the area of personnel, but in the realm of coherent planning. This is particularly true of the United Nations programs, where doubt has frequently existed as to whether the program will be able to continue from one year to the next, and where even now the expanded technical assistance program is operating totally without United States contributions for the first part of 1955. As a minimum, a program should look ahead 20 years for its goals and 5 years for planning and for financing. MILITARY AND STRATEGIC CONSIDERATIONS 3. What should be the relation to military and strategic considera- tions? The technical cooperation program will be best served by its largest possible divorcement from military considerations and military priori- ties. Psychologically, so far as the peoples who are on the receiving end are concerned, friendship to the United States comes more readily through this kind of economic and technical cooperation given will- ingly and generously through a genuine concern for their welfare, than it does by making assistance contingent upon military alliances or pacts. Economically, the tendency has been for technical cooperation and economic development to get only the crumbs from the appropriations. Taking only the appropriations from the last_Congress, between 72 and 73 percent went for military defense. Even that sum does not include the $6.6 billion interest on the national debt, which is not included in appropriations for current military expenditures, nor about $4 billion for the Veterans' Administration. But the percentage of appropriations for all economic aid other than military support, and all technical cooperation, both the United States and U. N., was only 0.82 of 1 percent of the appropriations of the last Congress. Those of us who urge more general appropriations for technical cooperation and economic aid are sometimes told that these programs 362 TECHNICAL ASSISTANCE PROGRAMS are limited to the funds which countries are able to absorb in a given time. Yet only last month, at the Workshop I have referred to, Mr. Keenleyside, of the U. N. Technical Assistance Board, told us that the U. N. is receiving four times as many requests for help as they can fill. Mr. Connors of UNESCO said that they are receiving twice as many requests as can be filled. RELATIONSHIP TO UNITED NATIONS 4. The question: What proportionate emphasis should be placed on U. N. and United States programs? I don't believe there is any question that most of the groups repre- sented at the Workshop on World Social and Economic Development would want to see the United States program continued and expanded. Yet many of us believe that more and more emphasis should be placed on the multilateral program. Programs operated under United Na- tions auspices can draw on technical personnel from all over the world. They are frequently less susceptable in regard to fears of political or economic exploitation in the minds of people living in underdeveloped areas. United States dollars go further when pooled with contribu- tions from other countries in the U. N. program. Naturally U. N. programs still face difficulties in finding available people who are qualified and in securing adequate financing-and this is particularly true this year when UÑETAP is thus far operating without United States support. One of the soundest ways to develop the United Nations is through increasing cooperation and understand- ing created by common effort in the specialized agencies-which may in turn lead to improved relations in the political realm. Officials of the Food and Agriculture Organization estimate that over half of the human race still goes to bed hungry every night- in spite of some increase in food production, which was referred to by Mr. Stassen earlier in these hearings. Contrary to the optimism expressed by some in the belief that the situation is improving, accord- ing to the final report by Mr. Raymond Scheyven, prepared in pur- suance of General Assembly Resolution 724 B, entitled "Special United Nations Fund for Economic Development": Hunger marches in the van of poverty-not merely occasional hunger due to some exceptional famine, but the daily endemic hunger experienced by more than 1,500 million human beings, more than two-thirds of the human race. Lulled by the amenities of their civilization and by their confidence in progress, some might think that this situation is on the way to improvement. That, unfortunately, is not true; on the contrary, the percentage of the world's popu- lation which is definitely undernourished has risen from 38.6 percent before the war to 59.5 percent today. It is almost incredible that with the tremendous means at our disposal we should have been unable to solve the world food problem at a time when scientific and technical progress have never been more evident. These are the conditions in which the world's population is growing at the rate of 80,000 persons daily, or approximately 30 million annually. Unless ade- quate steps are taken, the problem will merely increase in extent: According to a United Nations study, the population of the world, which was 2,400 million in 1950, might reach 3,600 million in some 30 years. United States agriculture has been revolutionized in the last half century and has many skills and methods which it is sharing—and should continue to share in the science of food production. Couldn't the United States join with other countries in a more vigorous attack on world hunger, specifically through the Food and Agriculture Organization? TECHNICAL ASSISTANCE PROGRAMS 363 Officials of the World Health Organization say it would take about $20 million to wipe out 1 disease in 1 country, malaria in Mexico. The malaria which we have had in the United States in the last 4 years was malaria imported from Mexico or Korea. No nation can be safe so long as some other nation is disease-ridden. The United States should join in a global attack on the major diseases which could be more readily controlled with the scientific information now in our hands and which do not stop at frontiers. CAPITAL INVESTMENT 5. Question: What place does capital investment have in disadvan- taged areas? Isn't technical cooperation enough? There is still a tremendous gap between the needs for capital in- vestment and what is being invested from the more highly developed countries in private capital, economic aid from those countries, and the amount which underdeveloped countries themselves are able to save and invest from their own income. The Scheyven report puts it this way: United Nations experts have endeavored to estimate the amount of capital which would be required to effect an adequate improvement of the standard of living in the underdeveloped countries. They themselves emphasize that their figures are approximate and are to be regarded as little more than an indication of the order of magnitude. Such estimation, moreover, is rendered especially difficult by the necessity of making assumptions and by the inadequacy of sta- tistical information. According to their calculations the amount of capital needed each year to raise the national per capita income in underdeveloped areas by 2 percent per annum would be something like $19 billion. About $5 billion of this could be provided by domestic savings. A deficit of $14 billion a year would thus remain to be met. Even bearing in mind that better methods of increasing and utilizing domestic savings could be applied in the underdeveloped countries and that such savings tend to increase as the standard of living rises, the experts estimate that a 2- percent increase in national per capita income is out of the question unless more than $10 billion of capital, $3 billion of which would be grants, is imported annually. I understand that the International Bank for Reconstruction and Development has mobilized $1 billion in its history of private invest- ment-and perhaps this year they will loan $400 million. They have loaned $2 billion to date. I am matching that over this $14 billion of deficit in terms of possibility of capital for raising the standard of income for two-thirds of the human race who will pretty much decide the longtime conflict between the East and the West, and who are potential customers and suppliers, if we are going to maintain in this country a high standard of income and production and wealth. The Export-Import Bank is also contributing substantially to meet the situation. The proposed International Finance Corpora- tion would do much to encourage further private investment. But all of these programs are limited in the amount of capital they can provide in terms of the risks involved and the guaranties needed before they can move into a situation. There is still a tremendous gap in terms of public and social investment. There are many situations where private industry will not risk its capital-because of the lack of immediate returns of their investment. I am referring to such fields as education, health, public administra- tion, and the building up of transportation and communication facil- 364 TECHNICAL ASSISTANCE PROGRAMS ities. Frequently work of this sort must go on before technical cooperation can be effective, and before private investment finds its great opportunity for adequate return. SUNFED So far the United States has not given its endorsement to SUNFED, the Special United Nations Fund for Economic Develop- ment, which we believe would be one means of providing capital for this development work. What better investment could the United States make than to help in the healthy development of countries like India, Pakistan, Burma, Indonesia, Japan, and Korea, to name only a few; and the names on this list are the countries which have recently emerged to self-government, which have the whole task of providing adequate government and adequate services for their people. The idea of such a fund for development has been linked with world disarmament-that is, the utilization of savings through dis- armament for development. While it is important and imperative to work for universal, national disarmament under enforceable law, we can't wait for that. Technical-cooperation programs and eco- nomic development must be expanded rapidly, even if there is no political progress toward disarmament. Indeed, the improvement of economic standards may help to decrease tensions, and in turn improve the chances for achieving world disarmament. We in the United States have been blessed by God with a bountiful land and climate and natural resources. Most of us are able to enjoy the privileges of democracy with the knowledge that we have-and will continue to have more than enough to eat and to wear and a shelter over our heads. We should-and I believe most Americans want to continue to share generously this bounty with the less for- tunate of the world's people. Senator GREEN. Thank you. Senator Mansfield, any questions? Senator MANSFIELD. No questions, Mr. Chairman, except to state that that is an excellent statement, and we certainly appreciate the witness coming before us and giving us the benefit of his views. Senator GREEN. We are glad to have it to consider, sir. Mr. WILSON. Thank you, sir. Senator GREEN. The next witness is Mr. Michael Straight. Will he come forward, please? STATEMENT OF MICHAEL W. STRAIGHT, ON BEHALF OF AMERICANS FOR DEMOCRATIC ACTION Mr. STRAIGHT. I represent the Americans for Democratic Action, sir. I am a member of their national board. My name is Michael Whitney Straight. My residence is Weynoke, Va. I will be happy to do what you say. I will read the whole state- ment, if you will bear with me, but I would be perfectly happy to skip sections and read other sections. Senator MANSFIELD. May I suggest that Mr. Straight not read the whole thing, but go through to the most important elements in his statement. ג TECHNICAL ASSISTANCE PROGRAMS 365 Senator GREEN. Is that satisfactory? Mr. STRAIGHT. Yes, sir. Senator GREEN. Will you proceed? Mr. STRAIGHT. I have attempted to suggest in the earlier part of my testimony why the organization I represent is wholly in accord with your endeavor in reviewing the basic aspects of the point IV program. I have attempted to indicate what I think the basic purpose of that program is, not so much in the traditional terms in which it has been presented in the past, but in terms of a somewhat more long-range and fundamental approach to the problem of overseas economic aid. I have gone on to deal with two of the questions which are raised in your guiding resolution, to which your attention is directed, and I might read this portion, Mr. Chairman, because I have endeavored here to present information which has perhaps not been stressed as much as some other aspects of the program before your committee. RELATIONSHIP OF UNITED STATES AND U. N. PROGRAMS Among these seven questions, Mr. Chairman, there are 2 that I should like briefly to discuss. The first, in the words of your reso- lution, concerns "the relationship between the technical assistance programs of the United Nations and *** those conducted by the United States." For obvious reasons this question has been given less attention than some others by witnesses appearing before your committee. And yet the U. N. program comes closer than a bilateral effort can to the central purpose of the act. In response to the inspiration of the United States, the United Nations in 1949 brought the technical assistance programs of its spe- cialized agencies into a common fund: the expanded technical assis- tance program. In recruiting its staff, in enacting its program over the opposition of the Communist bloc and in financing its activities with the con- tributions of its members, many of them in blocked currencies, the U. N. faced many complications beyond those that confronted the United States. And yet, after a slow start, the U. N. program is now well-established in 85 countries and territories. Sixty nations belong to the U. N. But 71 nations, including the Vatican and Western Germany, contribute to the U. N. technical assistance program. UNITED STATES CONTRIBUTION FOR 1955 The United States supported the U. N. program from its inception. Three times this year, in his state of the Union message, his message to Congress on foreign economic policy and his budget message, Presi- dent Eisenhower has paid tribute to the importance of the U. N. program. The Foreign Relations Committee of the Senate warmly praised it in its report on the Mutual Security Act of July 13, 1954, granting its superiority in three major respects over a United States program. The International Development Advisory Board in its December 1953 report described the U. N. program as "vital," and expressed the hope that "a significant expansion can take place in the U. N. expanded program of technical assistance." The Commis- 59637-55-24 366 TECHNICAL ASSISTANCE PROGRAMS sion on United States foreign economic policy attached "special im- portance to the strengthening of the technical-assistance work of the United Nations." "2 It was a matter of deep regret to the organization I speak for that the Congress last year disregarded this wise counsel. The Congress, of course, approved the authorizing legislation last August. But it failed to appropriate the $8 million requested by President Eisenhower as half of the United States contribution to the U. N. expanded technical-assistance program for 1955. It also specified that: No commitment for the calendar year 1955 or thereafter shall be pledged on behalf of the United States until the Congress appropriates for said purpose. Three months later, Mr. Chairman, the pledging conference of the U. N. technical-assistance program was held. Afghanistan, El Sal- vador, and the Soviet Union pledged their contributions for 1955. The United States sat on its hands, hands tied by the Congress. Mr. Herbert Hoover, Jr., our Under Secretary of State, has told this committee that- the failure to pledge has hindered planning in the U. N. agencies and seriously slowed the pace of development. His testimony is certainly not an overstatement. The Executive Chairman of the U. N. Technical Assistance Board has declared that: So limited are the present financial resources of the program that it will not be possible to carry on for longer than a few months in 1955 the more than 600 projects now in operation in 70 underdeveloped countries without additional contributions from governments. ✶ ✶✶ The Executive Chairman of the U. N. Board adds: Regardless of the amounts that governments other than the United States may reasonably be expected to pledge, additional United States financial sup- port at the earliest possible date will be essential if the program is not to suffer extreme dislocations from which it may not recover. President Eisenhower has promised to send to the Congress re- quests for appropriations from fiscal 1956 funds of $24 million to cover the last half of the U. N. contribution for this calendar year 1955 and the full contributions for the calendar year 1956. We earnestly hope that Congress will appropriate these funds, and given the opportunity we shall press for their enactment before the appro- priate committees. Here, however, where the long-range aspects of the program are under study, the damage done in 1954 should be noted and its lesson suggested for the future. ADMINISTRATIVE INADEQUACY A principal purpose of the economic-aid program, as I have sug- gested it, is the strengthening of governments in the underdeveloped nations. It is a difficult task. Hugh Keenleyside, Director General of the United Nations Technical Assistance Administration, has written: Of all the characteristics of national underdevelopment, administrative inadequacy is the most prevalent, the most difficult to overcome, and the least likely to be recognized, or, if recognized, to be admitted by the governmental auhorities concerned. TECHNICAL ASSISTANCE PROGRAMS 367 Administrative inadequacy, Mr. Chairman, means among other things an inability to anticipate future needs and to plan ahead. It is best overcome not by textbook learning, but by the example of efficient administration on the part of the U. N. and its leading con- tributor, the United States. Instead, we have held out to the under- developed countries an example of administrative chaos. Between January and August the U. N. program was in constant flux and change, its schedules varied, its studies wasted, its petitioning nations disappointed, and its programs prepared and canceled from month to month as the United States contribution failed to materialize. Then, by the terms of the 1954 legislation, Congress, in effect, forbade the United Nations to plan far ahead and thereby discouraged for- ward-thinking and competent administration in the nations we are endeavoring to strengthen. We recognize, of course, Mr. Chairman, the extent to which one Congress can commit its successors. But we remember that within these limits continuity of aid was assured in the case of the Marshall plan, and we recall with pleasure that Congress has seen fit to enact a permanent authorization in the case of our own technical-assistance program. We urge this committee to turn its substantial talents to consideration of some means by which the authorization of the U. N. program can be placed on a 3- or a 5-year basis. The authorization, we believe, should provide for increasing aid on a moderate scale. RECOMMENDATIONS OF SENATE APPROPRIATIONS COMMITTEE Mr. Chairman, this seems to us to be the key to a more constructive relationship between the United States and the U. N. programs. But one other point on this relationship is suggested by the recommenda- tion of the Senate Committee on Appropriations. The committee, in its report No. 2268, recommended that, prior to new appropriations, the Senate study— all reasonable alternatives to the present system of handling United States participation in the multilateral technical assistance program, including par- ticularly that of making direct appropriations to the international organizations which do the technical assistance work rather than in the form of a blank check to a central fund which is under the control of the United Nations, includ- ing nations controlled or dominated by the U. S. S. R. Mr. Chairman, the motivation of this recommendation is under- standable. But its effect, in the opinion of the experts I have talked to, would be damaging to the best interests of the U. N. and the United States. Y 1 ARGUMENTS AGAINST RECOMMENDATION First, this recommendation would undermine the expanded tech- nical-assistance program and its administrative arm, the Technical Assistance Board. In the opinion of participants and independent observers, this unified direction has been efficient and highly successful. Second, this recommendation would substitute a piecemeal approach for a unified one in technical assistance; thereby ignoring a basic reality in the situation-the interrelation of all forms of technical assistance-agriculture, transportation, administration, health, and others-in the national development programs and needs of under- developed areas. 368 TECHNICAL ASSISTANCE PROGRAMS Third, this recommendation would tend to substitute what we think each underdeveloped nation needs for what the nation itself believes its needs to be. Thereby it would work against the central concept of a program designed to help these nations to help them- selves. Ironically, the proposal to give grants only to those agencies whose membership we dominate and whose policies we control follows pre- cisely the traditional Soviet approach to the U. N. If adopted in full, it would substitute a swap-shop for a world organization, and with that the best hopes of a strong and effective U. N. would disappear. Mr. Chairman, the organization I speak for has expressed its views on most of the seven matters to which the attention of your commit- tee is directed. I would like to limit my further comments to your first and sixth questions: The general level of authorization of funds for the future would enable the programs efficiently to achieve their purposes. And: The relationship between technical (and) economic aid * * * Mr. Chairman, I will summarize the rest of my prepared testi- mony for the reasons that our views are well known to you and that they have been amply covered by other witnesses before your com- mittee. In our They are essentially that a considerable larger scale of technical assistance is possible, and that technical assistance itself is essentially sterile unless accompanied by economic or capital assistance which permits the skills and knowledge which we help these countries to gain, to be applied in worthwhile and fruitful ways that raise pro- duction and step up the development of backyard areas. opinion, both the absorptive capacities of these countries and the ability of the United States to contribute considerably larger funds are plain, and we urge very strongly that this committee give most earnest consideration not only to a long-range concept of technical assistance but also to a unified approach to the problem of develop- ment, in which technical assistance is closely integrated with capital funds and in which the total scope and significance of the program are substantially enlarged. I think that, Mr. Chairman, is a fair summary of my testimony. Senator GREEN. Thank you very much, Mr. Straight. Are there any questions, Senator Mansfield? KESTORING PROGRAM TO STATE DEPARTMENT Senator MANSFIELD. Mr. Straight, I want to compliment you on the very good statement. I have not had a chance to read it all, but I would like to ask a question or two. What do you think of the idea of point IV being restored to the State Department as an arm of the American foreign policy, thus giving both continuity and permanence? Mr. STRAIGHT. Mr. Chairman, the organization I speak for has taken a very strong position on the necessity of maintaining a unified direction to this program. We have read the testimony, we have seen how each department, left to its own, will do a little empire building and claim credit for what it is doing overseas. We understand that, TECHNICAL ASSISTANCE PROGRAMS 369 but we feel very deeply that the heart and spirit of this program depend on unified direction and management; whether that unified direction and management is to be in an independent agency or whether it should be in the State Department is a matter on which I think we have no decisive feeling. We understand the matter is now being reviewed by the President, by Mr. Dodge, and by your com- mittee. At first I felt, myself, very deeply and strongly that to get such a program as this moving required an action agency that it required the kind of spirit and energy brought together by Mr. Hoffman into the old ECA-and that could not be done by the State Department, in which I personally worked for sometime. Now that the program is established, the need is for permanence, as you have pointed out, and for security of personnel, continuity, and recognition of its permanent status. I think there are substan- tial arguments for putting this program in some semiautonomous status within the Department of State. Senator MANSFIELD. Would you agree, Mr. Straight, that if it were kept within the confines of a permanent-temporary agency, such as FOA and its predecessor, that it couldn't look forward with much assurance to a productive future? That it might become complicated with other economic assistance projects and thereby lose its identity and, in so doing, thereby lose its effectiveness as well? Mr. STRAIGHT. That is a very serious point, Senator Mansfield, and you know much more about that than I do. I think your point is very good. The longer we have a so-called temporary agency, the more it looks like a short-time palliative, rather than a long-range, continuing effort on the part of our country. CONTINUATION OF BOTH UNITED STATES AND U. N. PROGRAMS Senator MANSFIELD. I take it, Mr. Straight, that it is the view of your organization that you approve of both the unilateral technical assistance program undertaken by this country and the continuation of strengthening of the United Nations technical assistance program, as well. Mr. STRAIGHT. That is right, sir. We remember that the initial concept, of course, was to shift this program gradually toward the United Nations, because President Truman believed, in principle, in strengthening the United Nations, and because the Congress under- stood, and the Committee on Foreign Relations pointed out, that there are many things that the United Nations can do that this country alone cannot do. For example, a United Nations adviser is seen by a backward coun- try overseas as less of an intrusion on the sovereignty of that country than, let us say, a man representing the Government of the United States. This organization I speak for, the ADA, has in its convention en- dorsed the program known as SUNFED, and it has stood very enthu- siastically for both the United States and U. N. programs, in the belief that, while the U. N. program has obvious advantages, the United States cannot contribute more than a certain proportion without over- weighting the program, and that the limitations on the contributions of other countries set a total limitation to the size of the U. N. program, 370 TECHNICAL ASSISTANCE PROGRAMS which, in our opinion, is below the size of the scope of technical aid. which is needed today. Senator MANSFIELD. I think that is all, Mr. Chairman. Senator GREEN. Thank you, on behalf of my colleague and myself. I have no questions to ask you. Mr. STRAIGHT. Thank you, Senator Green. I appreciate the opportunity. Senator GREEN. The next witness is Mr. Andrew Rice. STATEMENT OF ANDREW E. RICE, EXECUTIVE DIRECTOR OF THE AMERICAN VETERANS COMMITTEE Mr. RICE. Mr. Chairman, my name is Andrew E. Rice. I am the executive director of the American Veterans Committee. Mr. Chairman and members of the subcommittee, the American Veterans Committee has long been an enthusiastic supporter of United States programs of aid to underdeveloped countries. In addition to endorsing Government and intergovernmental programs, we have participated, through the World Veterans Federation, in carrying. out privately organized programs. For example, last month Mr. Douglas Toffelmier of Oakland, Calif., one of this country's leading experts in the field of amputee rehabilitation, left for central Java on a mission jointly sponsored by the United Nations and the World Veterans Federation to develop Indonesia's lone orthopedic rehabili- tation center. Thus America's skills in helping the disabled veteran and civilian are transferred abroad. To this committee, however, I wish to do more than merely restate our support of assistance to underdeveloped countries. In our study of the problem over the past 5 years, certain general principles have emerged which, while I am not at present mandated to give them our unequivocal endorsement, seem to us worthy of most serious con- sideration by this committee. TRAINING MUST BE ACCOMPANIED BY FINANCIAL RESOURCES The first principle is that programs of aid to underdeveloped coun- tries cannot be arbitrarily separated into technical assistance and financial aid. The goal of our programs should be the all-around economic development of an underdeveloped area. Technical know- how must be accompanied by adequate tools and resources to make that know-how productive. This is the way private investment al- ways works; technical skills and financial resources go hand in hand. In the very least-developed countries technical training alone may be necessary before any substantial funds can be usefully employed. But beyond a certain level training alone, without resources to put that training to work productively, can only lead to frustration and disillusionment. I might add here, parenthetically, that this view is completely contrary to the ones put forward last February by the Senate Appro- priations Committee report, which said: If a recipient nation is unable or unwilling to create an atmosphere conducive to private investment, it should not, aside from foreign-policy considerations, devolve upon the United States Government utilizing moneys derived from taxes, to enter these areas with grants in the form of investment capital. TECHNICAL ASSISTANCE PROGRAMS 371 NEED FOR MORE FINANCIAL ASSISTANCE Our second point is that financial assistance on a far larger scale than at present is essential if we are to give the underdeveloped coun- tries any real hope that the widening gap between their standard of living and our own can ever be narrowed. America's productivity is moving ahead rapidly on an average, more than 4 percent per year. Despite our enormous defense expenditures, our standard of living has been rising. Robert Nathan, the well-known economist, and an active member of the American Veterans Committee, has estimated that we could, if we desired, invest some $10 billion a year overseas without in any way affecting our own standard of living. In the light of these facts it becomes almost incredible that our Government has not yet endorsed SUNFED-the Special U. N. Fund for Economic Development. Not only is the economics of this posi- tion faulty, but so is the psychology. To argue that we cannot afford to invest in SUNFED until an enforceable worldwide system of dis- armament has been achieved, is hardly calculated to appeal to the Soviet Union as an argument for such disarmament. PRIVATE CAPITAL INVESTMENTS ABROAD Thirdly, it seems impossible for private enterprise alone to do the job-for reasons which Dr. Willard Thorp very eloquently outlined to this committee. Certainly private investment should be encouraged in every way possible, but as long as our own country offers so many highly profitable investment opportunities itself and overseas invest- ment is generally so risky, capital will not flow freely abroad. More- over, as George Woods of the First Boston Corp. so well pointed out, the- export of investment capital by the nationals of capital deficient countries is a difficult fact to explain away to well informed investors in the United States who are weighing the advantages of investing capital abroad as opposed to making investments at home. Of course, the reference there is to such things as money received in Iran from oil companies being invested in New York in stocks, bonds, and so on. Senator MANSFIELD. Do you say that investments of the oil com- panies abroad return very good dividends? Mr. RICE. To the investors. Senator MANSFIELD. Yes. Mr. RICE. But this refers to local capital. The royalties the oil companies pay in Arabia are not invested in Arabia, they are mostly sent abroad and invested somewhere else, because it is more profitable for Arabians to invest abroad than at home. Senator MANSFIELD. Isn't it true, also, that these oil companies in Arabia and elsewhere have become a little more broadminded and are increasing their investment in the country from which they are extracting resources and making a profit? At the same time, some of the profits go back into those countries, so it can be considered of assistance and development to the country being used for the extrac- tion of such things as oil? Mr. RICE. You are very right, sir, and that is certainly true in Venezuela and other places. 372 TECHNICAL ASSISTANCE PROGRAMS INTERNATIONAL BANK As a subsidiary to this point, I should like to point out that the real channel through which private investment is flowing to under- developed areas today is the International Bank. The bank is selling its bonds on the private money market in all major world financial centers-London, The Hague, Basle, as well as New York-and is having no difficulty at all in disposing of its offerings. Now Secre- tary Humphrey has announced United States support for an Inter- national Finance Corporation, a proposal first put forward by the Nelson Rockefeller board in 1951. Although public funds would be subscribed for the IFC, its loans would go directly to private enter- prises. IFC, which I hope this Congress will support, would thus indirectly give great impetus to private investment. ASSISTANCE SHOULD BE COORDINATED The fourth consideration which seems to us important is that, within reasonable limits, assistance to any underdeveloped area should be coordinated. By this overworked word I mean that all aspects of a nation's or region's economy need to be developed simultaneously. Uneven development is unsound economically. To grow more crops, but not to have the transportation network to get them to market doesn't make sense. This coordinated development approach should extend right down to the village or community level, as in fact is being done in the United States-supported community development projects in India. A corollary of this viewpoint is that, within the United States Government, the administration of aid programs should be centralized. Whether there is an independent operating agency or an operating unit within the Department of State seems relatively unimportant. Either is far preferable, however, to splitting up aid functions among several Federal agencies which makes overall development planning almost impossible. Incidentally, the United Nations has come to realize this: the last General Assembly, by unanimous vote, changed the previous system of allocating technical assistance funds to the specialized agencies, to a country allocation system which emphasizes balanced development. In presenting these four principles, I do not, of course, mean to overlook other important considerations such as the need for long- range planning and, where possible, commitments of funds, the value of people-to-people contacts, the methods of selecting and training United States personnel for overseas assignment, the importance of multilateral programs, and the like. This committee will certainly wish to give full attention to the lessons which the experience of the past 5 years has taught us. LACK OF PUBLIC INTEREST IN AID PROGRAMS I would like, however, to emphasize only one final point. Members of this committee have expressed concern, I know, at what they con- sider the lack of public interest in our aid programs to underdeveloped areas. I will agree that certainly there is a lack of public knowledge, due in part perhaps to the restrictions on a public information program TECHNICAL ASSISTANCE PROGRAMS 373 which Congress wrote into the Mutual Security Act. But more fun- damentally, I believe, such lack of knowledge is because development aid is not newsworthy in the usual sense of that term. Most Ameri- cans are simply uninformed by the news channels on which they rely. Yet where Americans are informed, they have shown solid support for these programs. Through our own great voluntary organizations, such as those testifying before this committee, they have shown such support. I believe in all sincerity that if this Congress expands our Nation's participation in development aid programs, it will find the majority of the American people behind it. Senator MANSFIELD. I have no questions. I simply want to com- pliment Mr. Rice on an excellent statement. Senator GREEN. Thank you very much for your 4 points, perhaps I should say 5 points, that you have presented very clearly. Mr. RICE. Thank you, Mr. Chairman. Senator GREEN. That concludes this hearing, and thank you all very much. (Whereupon, at 11:30 a. m., the current public hearings on the above-entitled matter were closed.) (The following was submitted for the record:) STATEMENT BY C. M. STANLEY, PRESIDENT OF UNITED WORLD FEDERALISTS, INC. My name is C. M. Stanley. I am president of United World Federalists, Inc., a nonprofit, nonpartisan membership organization with offices at 125 Broad Street, New York City. I reside in Muscatine, Iowa, where I am a consulting engineer and a manufacturer. I wish to express my organization's strong support for the program of techni- cal assistance to underdeveloped areas. Our organization is proud of the fact that it supported the first act for inter- national development in 1950. We are proud of the fact that, along with many other fine American organizations, we fought for the inclusion of an authorization for technical assistance through the United Nations. We have not regretted that position. United States technical-assistance pro- grams have for relatively small annual expenditures, enabled us to do a great deal of good, have strengthened our friendships, and have given us the satisfac- tion of helping people to help themselves. At our last UWF general assembly, at the Statler Hotel in Washington in June 1954, we reiterated our support of this program, by adopting the following language as part of our platform: "A broader U. N. program of technical assistance and economic development such as the special U. N. fund for economic development, if it can be set up on an effective scale, so that all nations can become self-supporting * * *. A program of military defense and alliances, while necessary in today's world, is not enough to rally the free nations. To win the minds and hearts of the world's people, we must identify ourselves with their hopes and aspirations for peace and opportunity." There are just a few specific points that I would like to make. First, I am very happy that President Eisenhower has requested the Congress to make a supplemental appropriation of $8 million so that the United States can immediately resume participation in United Nations technical-assistance programs. Second, I am happy that the President has decided to ask the Congress to appropriate United Nations technical-assistance funds for 2 calendar years during the present session of Congress, so that our representatives at pledging sessions of the United Nations will be able to participate effectively and yet leave the initiative in the hands of Congress where it belongs. I hope that the Con- gress will cooperate in this effort to put the whole program on a more business- like basis, so that we can avoid annual emergencies. 374 TECHNICAL ASSISTANCE PROGRAMS NOT AN EMERGENCY MATTER Third, I think it is now generally recognized that this technical-assistance program is not an emergency matter. It will be part of our foreign relations program for many years to come. Its effectiveness could be vastly increased if the Congress would pass a long-term authorization bill, covering both bilateral and multilateral programs, which would make it possible to plan for years in advance. This would enable us to operate more effectively and more economically. It would make it possible to work out integrated plans. It would make it possible to budget more prudently, and it would enable us to plan programs in continuous series, building one upon the other, rather than starting from scratch each time. Congress has found it possible to write long-term authorizations in many other fields, and I am sure it could do it in this field. I have no recommendation to make with respect to the size of the programs. I ask only that, in fixing its size, the Congress take into consideration its very real importance to the Nation. My organization has given support to the creation of a U. N. economic- development fund, like the projected SUNFED, if it can be set up on an effective scale, so that all nations can become self-supporting. I hope that your committee will give very serious consideration to this idea, and will give some guidance to the many citizens groups who are considering it. Technical assistance is unique in that nominal expenditures bring substantial benefits not only to the nation receiving the assistance but also to us. By helping them to help themselves to a healthier and better standard of living we also aid in developing the world markets upon which we become more dependent. Technical assistance is also unique in that our technical-assistance teams are not dealing only with governments-they are dealing with people. There is a very human interchange going on every day, which is giving ordinary people in all parts of the world a chance to deal with Americans as human beings. They are being benefited by that contact and they appreciate it. And we are being benefited by our contacts with these people, too, and I hope we are all humbly grateful for that. STATEMENT BY JOHN R. HOLDEN, NATIONAL LEGISLATIVE DIRECTOR, AMVETS To save your committee's time in the consideration of our Government's technical assistance program, I should like to present the views of AMVETS by means of this letter, rather than in testimony. I should greatly appreciate your inserting this message in the record of the committee's hearings. AMVETS, a congressionally chartered organization composed exclusively of World War II and Korean conflict veterans, have always supported and will continue to support, on a nonpartisan basis, policies on international affairs which we believe are responsive to the needs of the American people in the current world situation. Our obligation to speak and our right to be heard rest, in part, upon the military service which AMVETS have performed in every corner of the world in defense of our security and our free institutions. Accordingly, the most recent national convention of AMVETS adopted a basic policy statement which included the endorsement of a vigorous program of technical assistance to underdeveloped areas. We further recommended that this program should be rooted in an enduring American interest in the well- being of other peoples, and should not be subordinated to tactical moves in the cold war. The detailed views of AMVETS on this subject are contained in the attached policy statement. These views were drafted by our international affairs division and adopted unanimously by the delegates to the last national con- vention. We call your attention specifically to points I to IV. The security of the United States is inescapably linked to the continued survival and independence of those nations who have thus far resisted the yoke of Soviet tyranny. The Communist conspiracy gains its adherents by feigning interest in the economic advancement of the populace. Fertile fields for this false doctrine are found in the vast areas of the world where poverty, misery, and famine are prevalent. Evidence of the success of their methods is pointed up by the fact that communism today embraces 25 percent of the earth's surface, and 32 percent of the world population. Because of the impor- TECHNICAL ASSISTANCE PROGRAMS 375 tance of this program to the security of our own Nation, we view with approval the notable progress that has been made in this field. We respectfully urge that the program of technical assistance be continually emphasized as one of the most important weapons in our foreign economic policy arsenal. INTERNATIONAL AFFAIRS DIVISION, AMVETS-RESOLUTION No. 50, 1954 INTRODUCTORY Events have indicated the soundness of the basic foreign policy proposal adopted and espoused by AMVETS in the international affairs division report adopted at the national convention in 1953. We, therefore, reaffirm and readopt such policy and the report. We strongly reiterate our belief in our obligation to speak and our right to be heard, based upon our service to our country and our interest as citizens of the United States in a peaceful world. Actually, the impact of events during the past year demonstrates the necessity to reemphasize political and economic solutions to world problems in addition to a strong military posture, which, it is our belief, must be maintained if we are to attain a peaceful world. We do so as follows: I. LATIN AMERICA In keeping with the ideals which from the time of the American Revolution have made our Nation a leader for governmental and social advancements in the world, we urge our Government to use every practical and peaceful means at its command to ensure the continuance of political and social democracy in our sister nations of Latin America. We urge every assistance to increase the economic stability and opportunities for freedom of the peoples of these sister nations, who, for too long, have been assumed to be our natural allies without receiving the reciprocal assistance to which their loyalty and mutuality of inter- ests justly entitles them. Specifically we recommend: (a) An immediate expansion of the program of technical and economic assist- ance to our neighbor countries, designed to increase and strengthen their natural affinity for a democratic way of life. (b) Our assistance should be directed to a diversification of the industrial economics of these nations, so that none of them will be dependent upon a one- industry economy for the maintenance of a decent standard of living for all their peoples. (c) We must encourage capital investment in these sister nations under pro- visions which will ensure protection and equal benefits to the investors and the peoples of the country in which investments are made. This can be achieved in part by the expansion and broader utilization of the facilities of the Export- Import and the international banks, and by governmental guaranties. (d) For many years one of the difficult problems of our Latin-American eco- nomic relationships has been the feeling on the part of some of our Latin- American brothers that the price we pay them for raw materials has not always been commensurate with what we charge them for finished products. Measures should be taken to assure Latin-American suppliers of a fair and stable market at prices which will encourage true reciprocity of trade. (e) The United States must make it clear that we will not stand by and permit the imposition of Communist pressure on or the infiltration of the governments of the Western Hemisphere. We can best prevent such infiltration by providing continued proof that the social and economic aspirations of the peoples of the Americas can be realized by democratic processes. II. SOUTHEAST ASIA One of the most pressing problems that will face the free world during the coming year will be the conclusion of a collective security arrangement for southeast Asia, designed to make clear to the Communist aggressors that any attempt at further imperialistic expansion in that area will be resisted by force. We are convinced that the time has now come when the world must draw a strict line of demarcation in this critical area, beyond which further intrusion by international communism will not be permitted. We must be ready to back up our words by deeds. * 376 TECHNICAL ASSISTANCE PROGRAMS However, we are sensible of the necessity that any alliance we join in this area must be broadly based, and include within its membership the largest pos- sible number of governments and people of southeast Asia. Any such alliance can be effective only to the extent that it represents the true interests, hopes, and aspirations of the member peoples. We commend and support the principle of prompt retaliation by our Armed. Forces to Communist provocation. IV. PRIVATE INITIATIVE IN THE FIELDS OF ECONOMIC AND TECHNICAL ASSISTANCE AMVETS continues to urge the utilization of private initiative and investment in economic and technical assistance to underdeveloped countries. AMVETS, therefore, views with approval the effective, unselfish contributions which have been made by the philanthropic foundations of the United States, both in this country and in other free nations, consonant with previous resolutions and policies adopted by AMVETS, to strengthen and extend the American ideal of freedom and democracy through: (1) Research for the elimination of disease and the raising of health. standards; (2) Agriculture research to increase productivity of the land and the world food supply ; (3) Research in economic fields to help attain the highest possible economic stability under the free enterprise system ; (4) Research and participation in the fields of economic and technical assist- ance to the underdeveloped free nations, so that such nations may be able to retain and strengthen their freedom; and (5) The increase of educational facilities and standards under the free- enterprise theory in education, so that man may understand and work in harmony with his fellow man, all for the betterment of mankind, and the establishment of a world peace in which man can live with dignity and freedom. And further, AMVETS urges the philanthropic foundations of the United States to undertake a more intensive and direct participation in the fields of economic and technical assistance in the underdeveloped free countries, since such nongovernmental assistance is the best evidence to the peoples of such countries of the real and direct interest of the people of our country in their well-being and welfare, and is free of any possible challenge that such assistance is motivated by imperialistic designs or desires to influence their governments. At the same time, it serves to prove the real advantage of our own democratic system of life over any competing ideology. V. COLONIALISM We urge the recognition of the truth that the right and ability to govern is not predicated upon race, creed, or color. The United States, in its great tradition of freedom, naturally supports the hopes and aspirations of the non-self-govern- ing peoples who are seeking self-determination and the basic rights of free peoples. Such non-self-governing peoples must be promptly prepared for, and permitted to progressively assume the privileges and obligations of self-govern- ment as quickly as they evidence the capability to do so. VI. MIDDLE EAST In reaffirming our support of the creation of a Middle East defense community, we view with approval and urge the extension of interlocking alliances such as those of Turkey, Greece, and Yugoslavia; and Turkey, Pakistan, and Iran to in- clude Egypt and Israel. We commend Britain, Iran, and Egypt for their sincere interest in world peace which has prompted them to make effective contributions to peace in this area through the British-Iranian oil settlement and the Anglo- Egyptian agreement on Suez. We urge their action as an example to other nations interested in the fostering of an atmosphere which will be conducive to the creation of an effective Middle East defense community. TECHNICAL ASSISTANCE PROGRAMS 377 STATEMENT OF THE AMERICAN ASSOCIATION OF UNIVERSITY WOMEN IN SUPPORT OF TECHNICAL ASSISTANCE PROGRAMS The American Association of University Women strongly supports the con- tinuation and strengthening of technical assistance programs, both bilateral and multilateral. Our support is based on a program of study carried on by the association's local groups since the initiation of technical assistance in 1950. The association is an organization of more than 131,000 women college grad- uates, with over 1,300 local branches organized in the 48 States and Alaska, Hawaii, District of Columbia, and Guam. Its purposes-practical educational work-are carried out through an educational program for members in various fields, including international relations. On the basis of study by local groups, the association in biennial convention adopts a legislative program, which in- cluded, in 1953, support of a constructive foreign policy, and support of measures for effective participation in and strengthening of the United Nations and its affiliated agencies. The AAUW international relations and legislative program committees, in behalf of the association, support the continuance of a sound technical assistance program as an essential element in a constructive foreign policy. REASONS FOR STRONG SUPPORT Our support of the technical assistance program is based on the following considerations: 1. First and foremost we support technical assistance because it is in the self- interest of the United States to help clear up what may be regarded as world slums. Such slums are dangerous to the United States in a literal, physical sense, since contagious disease recognizes no national barriers. They are equally dangerous in breeding dissatisfaction which in turn provides ready converts for Communist pie-in-the-sky promises. The world of 1955 is too small to tolerate indefinitely the gulf in standards of living which separates the average Amer- ican from, say, the average peasant of southeast Asia. Envy of the American standard of living, unless channeled into a constructive course, will jeopardize our national security. Technical assistance is our channel. 2. We support technical assistance because we regard it as preventive diplomacy, which is as much to be preferred over remedial diplomacy as pre- ventive medicine is preferable to remedial medicine. A negative result-immu- nization against communism-is ample reward for our investment. 3. We support technical assistance because the job to be done is too big for the resources of private philanthropy. In the 19th as in the 20th century, the work of American voluntary associations, both religious and secular, often in- cluded projects in public health, education, and agriculture, which were as up to date as next year's technical assistance projects, but there has never been and cannot be a private nongovernmental agency capable of tackling the problem in toto. In the 19th century, a piecemeal approach was feasible; in 1955 piece- meal efforts are wasteful, ineffective, and may do more harm than good. 4. We support technical assistance because we believe no other United States program currently brings in as good a return for money and energy invested. The superb humanitarian achievements of the program are attested to by recipients as well as by neutral observers. For no other program have so many Sauls found conversion to Pauls, as is indicated by the testimony of Senators, businessmen, and others who have inspected United States technical assistance projects. 5. We support technical assistance because the maintenance of confidence in the pledged word of the United States requires it. Congress in passing the basic legislation-the Act for International Development of 1950-announced to the world that the program would be a long-range one. In our view, 5 years is not long range, and interested countries have every reason to assume the pro- gram has not yet run its course. 6. We support technical assistance because as assistance because as a long-range program it develops future customers for the United States and opens up possibilities for American investors. Statistics prove conclusively that highly developed coun- tries provide our best customers, undeveloped areas our poorest market. 7. We support technical assistance because, unless through it the way is paved for Western capital to develop the potentialities of the underdeveloped third of the globe. their resources will be developed and exploited by the Communist bloc. If the Communists perform this task, the price exacted will include control of material resources. A glance at our dependence on Asian-African raw materials is sufficient to convince us of the folly of such a lost opportunity. 378 TECHNICAL ASSISTANCE PROGRAMS 8. We support technical assistance because we believe that the United States county agent and the United States factory manager can for the next genera- tion be the ablest and most welcome assistants our professional diplomats in underdeveloped areas could have. The American Association of University Women looks to the 84th Congress for clarification on the long-range nature of the technical assistance program. We hope that this Congress will send directives to the administrators of technical assistance which would require the drawing up of plans for a 5 year and for a 10-year period. We hope that the Congress at the same time will grant the administrators or technical assistance budget commitments at least 2 years in advance of the program. We regard this as a practice which would improve administration and simplify personnel problems. UNETAP CONTRIBUTIONS The American Association of University Women strongly urges that the United States continue to bear its fair share in the United Nations Expanded Pro- gram of Technical 'Assistance, and that our contribution never again be as delayed as it has been in 1955. We by no means recommend that the United Nations program absorb the entire technical assistance program of the United States, but we urge Congress to offer to keep the United States contribution in the same proportion it now bears to the total UNETAP budget. As other States increase their contribution, let us increase ours, using our 1954 contribution of 55 percent as a base. Our contribution to UNETAP even if given this elastic dimen- sion would never be an impossible burden upon the United States taxpayer. The fact that the U. S. S. R. in 1954 made a pro forma contribution to UNETAP should be taken as the sincerest flattery-imitation. It should not frighten us out of participation in the multilateral program. The United States contribution to UNETAP would be justified if only for the answer which it gives to the charge that our interest in technical assistance is imperialist. In conclusion, the American Association of University Women commends the work of the technical assistance program as it has operated since 1950 and hopes for its expansion and improvement in the years to come. MERIBETH E. CAMERON, Chairman, International Relations Committee. HALLIE FARMER, Chairman, Legislative Program Committee. 1 STATEMENT SUBMITTED BY THE WOMEN'S INTERNATIONAL LEAGUE FOR PEACE AND FREEDOM Throughout its 40-year history, which began at The Hague in 1915 under the leadership of Jane Addams, the Women's International League for Peace and Freedom has striven to promote the use of the world's resources for the benefit of all its people. We believe this sharing of the world's God-given gifts was never more needed than now, nor more essential. The poverty of two-thirds of the world's people is the challenge to today's world. This two-thirds has only 15 percent of the world's income; the remain- ing one-third enjoys 85 percent. The per capita average annual income or this one-third of the world is 12 times as great as the per capita income of the poor two-thirds. The United Nations Department of Economic Affairs stated in its World Economic Report for 1951-52: "Studies in recent years indicate that while world income has grown rapidly it is now even more unequally distributed among countries than in the period immediately preceding 1939, and the last two or three years have done little to alter this general picture of a widening gap between rich and poor countries." This is because the rate of development is faster in the already developed countries, like the United States and Western Europe, than it is in the underdeveloped countries. In fact, according to the same United Nations study, the people of Asia (Asia is the most populous of the underdeveloped areas) ate less and consumed less per person, at least through 1952, than they did before 1939. The reason for this was that the area's popula- tion had increased but even the low pre-1939 levels of production had not been restored. In the United States, in the meantime, food surpluses accumulated and some even were destroyed. At the same time, United States expenditures on arma- ments were around $42 billion a year. Indeed, defense outlays in the leading TECHNICAL ASSISTANCE PROGRAMS 379 industrial countries of Western and Eastern Europe, the United States, and the Soviet Union, in 1951, were at levels equaling or even exceeding the aggregate national income of all the underdeveloped countries combined. Poverty, hunger, and inequality are the roots of the revolutionary turmoil now sweeping the underdeveloped lands, principally Asia and Africa. The "have nots" of the world have learned of the relative abundance enjoyed by the world's "haves," of the technical marvels of science which make it possible for all on this earth to develop higher standards of living and in less time than heretofore. Their determination is to achieve a better life without delay. They reason that the causes of their poverty-their backward technology, de- pendence on production of raw materials, their low productivity, their low and poorly directed domestic investments, poor health, illiteracy, and high birth rates can be lessened by methods already tried and proven in the industrially advanced countries. They reason, too, that their condition is not alone their fault, that they "got that way" with some help from the relatively wealthy countries-who have used the underdeveloped countries as markets, sources of raw materials, investment outlets, even as providers of soldiers in wars. In weighing this problem, the United States should realize the Communists, led by the Soviet Union, did not create the conditions against which Asians and Afri- cans now rebel. The Communists have exploited these conditions, and with some success. The United States should realize that an appreciation of the economic and social problems of underdeveloped nations, together with a willingness to contribute from our immense power and resources to their economic advance- ment, is the surest-and perhaps the only way to strengthen democratic beliefs and practices among these people. But our efforts must be for people, not just against communism. Only by helping these people help themselves, by helping them end conditions they ought not to endure and which are not their fault, can we prevent the revolutionary ferment of Asia and Africa from being absorbed by the Communist movement, led by the Soviet Union. But time is of the essence. We believe Sir John Kotelawala, Prime Minister of Ceylon, stated the case well when he said in Washington December 7, 1954: **** China has improved her economic standard considerably in a few years of communism, while her neighbors are yet lagging behind. If therefore the poorer countries of Asia are not assisted to their feet by the richer countries of the world, and assisted with the least possible delay, the spectacle and example of China would simply be disastrous. There would be many defectious from the free world and democracy would have met its Waterloo in Asia. *** Economic development in Asia must be speeded up with almost supersonic speed." The United States can take justifiable pride in the work it has alrady done toward assisting the underdeveloped areas in their desire for advancement and freedom. The act for International Development, which established the United States point 4 program in 1950, declared it to be the policy of the United States to aid the efforts of people of economically underdeveloped areas to develop their resources to improve their working and living conditions by encouraging the exchange of technical know-how and skills and the flow of investment capital. The point 4 program became primarily a bilateral technical assistance program. But it gave new impetus to the concept of a multilateral United Nations technical assistance program. Such a program had been carried on by the U. N. on a small scale since 1946. Since part of the American point 4 funds were channeled through the U. N., the result was the establishment of a U. N. expanded technical assistance program in June 1950. Financing has been entirely by the participat- ing countries. Though the United States has been the largest individual contrib- utor, the countries that are being helped are themselves putting into the program, in all, twice as much as they are receiving. UNETAP has been the principal multilateral assistance program to which the United States contributes. One of the financial problems confronting UNETAP arises from the fact that the U. N. operates on a calendar while the United States appropriates on a fiscal- year basis. Thus there is a tendency for the United States under the most favor- able circumstances to be 6 months behind in its provision of UNETAP funds. We believe President Eisenhower proposed the only solution in his 1955 budget message, when he asked Congress to authorize the United States contribution to UNETAP for both calendar years 1955 and 1956. Technical assistance is a long-term proposition and should be recognized and handled as such. It would be unfortunate if the United States, on whose initiative UNETAP was started and which has offered leadership, should now forfeit it. We do not believe Congress or the American people want this to happen. It would be partic- ularly unfortunate for the United States to withdraw or reduce its support and 1 380 TECHNICAL ASSISTANCE PROGRAMS leave this field to the Soviet Union, which lately has begun to contribute to UNETAP by default. People in many countries accept aid from the U. N. where they suspect help from a single foreign nation. From a national viewpoint it is more economical for the United States to share the burden of technical assistance and recruitment of technical advisers with other nations. In the long run UNETAP can be a more potent force in human affairs than military power. Despite the success of the technical-assistance programs of the United States, the U. N., and the British Commonwealth (Colombo plan), it is now widely recognized that technical assistance can yield only limited results unless backed by substantial capital investment. Technical assistance is designed to create conditions of better health, better production methods, to create modern skills and greater literacy and knowledge, to create conditions, in other words, which are necessary before the so-called backward countries can develop economically and industrially. Technical assistance lays the necessary groundwork. The development of a balanced economy, requiring usually a large amount of indus- trialization must follow. It is argued that it does little good for technical ex- perts to draw up plans for improving health conditions, for example, unless capital is available to pay for the hospitals, the equipment and medicine, and the training and maintenance of skilled personnel to follow in the wake of technical know-how. But the underdeveloped countries, even with the exertion of maxi- mum domestic effort, have not been able alone to achieve the necessary rates of development. This is seen from the U. N.'s World Economic Survey for 1951-52, cited above, which stated that production in the major underdeveloped countries, far from advancing, in many cases had not been restored even to the low pre- 1939 levels. A study made for the United Nations in 1951 by a group of recognized economic experts, called Measures for the Economic Development of Underdeveloped Coun- tries, estimated that it would take a total yearly expenditure of $19 billion just to raise the standard of living in the underdeveloped countries of the world by 2 percent a year. The experts then subtracted from this the estimated total capital investment possible in these countries through domestic savings, outside private sources and economic aid from more advanced countries. They came up with this significant conclusion: Underdeveloped countries will have to import an additional $10 billion to $14 billion a year of capital from the developed coun- tries to raise their per capita income by 2 percent annually. Most of this, it was said, would be required in Asia. It is significant, we think, that the United States gross national product has been increasing in recent years by about $14 billion a year. Thus, if we gave away only half of this, our income would continue to increase nicely. At the same time we would be providing expanding markets for American goods. But even more important, we would be showing the world that we have the capacity and the humility to use our great resources and power not only to our own advantage but also for the greater human good. At the heart of the beliefs of the world's great religions is the principle that each individual has a responsibility for the well-being of his fellow men. In our view the question is not whether, but how, we shall assist the economic advancement of the less-fortunate countries. A proposal for the creation of a multilateral, multinational development agency has been before the United Nations since about 1949. The plan, popularly known as SUNFED, the Special U. N. Fund for Economic Development, is meant to provide a modest source of public funds-an initial working capital of not less than $250 million has been set-for grants or long-term, low-interest loans for such developments as transport and communications, fuel, power and irriga- tion which, though vital to economic advancement, do not easily attract private capital. Such developments as these are often necessary in the first place to establish profitable private investment opportunities. SUNFED will fill a need which, in the eyes of the underdeveloped countries, is not met by any of the existing lending institutions or of the bilateral programs of capital exporting countries. The International Bank for Reconstruction and Development, for instance, cannot make such grants-in-aid, or, for that matter, loans, which would serve the purpose-for it is limited to financing projects where there is a governmental or central bank guaranty in the recipient country, and a strong prospect of repayment. SUNFED has been strongly supported by underde- veloped countries at the United Nations. Miguel Quaderno, of the Philippines, has called it the "white hope" of the "have not" countries. But it has not been possible to get the fund started, largely because of the reluctance of the princi- pal capital exporting nations, including the United States, to support it. The 1 TECHNICAL ASSISTANCE PROGRAMS 381 > 1 United States feels it cannot contribute a requested $80 million to SUNFED as long as military expenditures continue at their present high level. This $80 million is just over 3 percent of the total military foreign aid appropriated by Congress in 1954. We feel it is particularly unfortunate that our Government has made its contributions to SUNFED contingent upon disarmament because the easing of economic distress and the political tensions and instability that characterize the poverty-stricken areas of the world would do much to create a better world climate which would in itself contribute to achievement of disarmament. The proposed plan for an International Finance Corporation is perhaps a more immediately realizable plan. We are grateful for United States support of this agency and it is our hope that Congress will back up the executive branch in financing the IFC. But it should be emphasized that IFC will not substitute for SUNFED. The purpose of IFC is to underwrite the flow of risk capital from private sources through a liberal loan policy, whereas SUNFED will handle pub- lic funds. The IFC's proposed initial working capital is $100 million. It is interesting and illuminating to contrast the modest sums sought for both the proposed IFC and SUNFED with the multiple billions at which the real need of the underdeveloped countries is known to stand. Indeed, there is a great task to be done. And, as Sir John Kotelawala has said, the need is not only for money, but for "supersonic speed." In considering the way in which United States aid should be administered we have concluded that the present bilateral basis of most of the programs has many disadvantages. Experts believe that far better results can be obtained with the same or even less money if it is channeled through the U. N. rather than through national bilateral programs. They are convinced that in bypass- ing the U. N., the United States is overlooking a weapon in the economic "cold war" which is potentially more effective than all others combined. Despite substantial contributions to some U. N. projects, the United States still channels only a minute fraction of its total overseas aid through the world organiza- tion. The current budget of the Foreign Operations Administration is $5.37 billion (including military and economic aid), as compared to a contribution of less than $100 million to the U. N. for all its activities. The ratio is at least 10 to 1 against the U. N. The experts point out that none of the disadvantages of bilateral aid apply to assistance by the U. N., because all nations, even the smallest and poorest, contribute something to a common pool. Thus they feel no humiliation in draw- ing on a pool. There is no fear of political strings attached, no colonialism involved and no nation is left out. Consequently Communist propaganda can have no effect. The Bible says it is more blessed to give than to receive. It is also more difficult. We urge this subcommittee to recommend that Congress not only con- tinue to participate in multilateral assistance programs, but that it also expand this participation to include support for an investment development fund such as SUNFED and that Congress give generously to the proposed IFC which the administration has already promised to support. We urge the subcommittee's support for related bilateral technical assistance programs such as the United States and Britain now carry on more closely to the United Nations and its specialized agencies and at a greatly expanded rate. We believe and we hope the subcommittee will so recommend that these programs should be long range in scope and that appropriations for them should be handled accordingly. 59637-55– -25 3 ; : INDEX A Page Act for International Development-. 3, 62, 167, 216, 217, 277, 278, 377, 379 Administration (see also Personnel of technical assistance program, long- term approach) 5-6, 44-47, 63-65, 69, 91, 93-94, 98-100, 119-120, 129-130, 137-139, 170–171, 216–217, 222–223, 229, 255–256, 276–277, 358. Administrative costs of FOA_. Administrative reorganization. (See Reorganization.) Advisory Committee on Voluntary Foreign Aid, FOA (see also Taft, Charles, Chairman, testimony by) Afghanistan……. Africa (see also Technicians, number of) ---- Agricultural Trade Development Act__ 38 46 43. 68, 207, 331, 337, 366 28, 163, 191, 274 Agriculture, Department of (see also Butz, Earl L., testimony of). Work in technical assistance. 251 45, 46, 160, 170, 173, 184, 255, 279 Rockefeller Foundation, work with. Agriculture, effort declining in Program in…. 137 244 21, 262 Program in India in___ 64, 176, 190, 239, 251, 320 Program of American Friends Service Committee_‒‒‒ Work of American Farm Bureau Federation in…. Work of National Farmers Union__. Work of Arabian-American Oil Co---- Work of Near East Foundation_ Work of Ford Foundation_____ 125 227, 230, 231 252-253 262-266 300-305 330, 335 319 Agronomists, lack of in participating countries_ 67 Ahallabad Institute__ Aiken, George D., Senator, questions and remarks by. 345 101-104, 106, 108–109, 124–126, 130, 141-146, 152, 173, 179–180, 211, 224– 225, 228, 239–240, 246-249, 257-258, 275, 281. Air Force. (See Defense, Department of.) Airgram (FOA Circular A102)…. 41 Alami, Musa 289 Allen, George V.. Assistant Secretary of State for Near Eastern, South Asian, and African Affairs, testimony by---- 109-126 Amalgamated Clothing Workers.. 133, 134 American Association of University Women, statement of- 377-378 American Farm Bureau Federation. (See Lynn, John C., testimony by.) American Federation of Labor (see also Biemiller, Andrew J., statement by) 46, 278 American Foundation for Tropical Medicine_-. 308 American Friends Service Committee (see also Teaf, Howard M., Jr., testimony of). 277 American Indians_ 227 American Joint Distribution Committee___ 180 American Middle East Relief. 286 American Railroad Association, instructs on railway systems---. 23 1950 census of American Republics (See also Public Law 545 (75th Cong.); Public Law 355 (76th Cong.)) American-supported schools abroad_ American University in Beirut---- 82 88 224 224, 288 383 384 INDEX American Veterans Committee. Page 374-376 (See Rice, Andrew E., testimony by.) American Veterans of World War II. American Zionist Committee for Public Affairs. (See Bernstein, Philip S., Rabbi, representing American Zionist Committee for Public Affairs.) Americans for Democratic Action. (See Straight, Michael W., testimony by.) Amherst College. (See Thorp, Willard L., testimony by.) AMVETS. (See American Veterans of World War II.) Appropriations for technical assistance (see also United Nations technical assistance, United States financial support to). 91, 187, 251, 256, 270, 337, 361 290-305 Arabian-American Oil Co., report on (see also Duce, James Terry, testi- mony by)___ Argonne. (See Atoms for peace program.) Army, United States, road construction in Liberia. Artibonite Valley irrigation and flood control project. (See Haiti.) Asia, aid for. Association of American Medical Colleges__. 309 43, 163, 169, 173 206 37, 82 25 253 Atomic Energy Commission (see also Atoms for peace). Atoms-for-peace program, use of by technical-assistance program. Australia_. B Badeau, John S., president, Near East Foundation_ Testimony by--- Prepared statement by___. Baker, John A., National Farmers Union, testimony by. Bangkok, Thailand___ 343, 346 329-338 338-340 258-275, 266 216 187 36. 2, 3, 66-67, 80-81, Batt, William L., member of Advisory Committee on Voluntary Foreign Aid of FOA. Battle Act__ Benefit to United States of program. 85-87, 92, 93, 111, 112, 123, 135, 140, 167, 243, 244, 248, 281, 352, 374 Bernstein, Philip S., rabbi, representing American Zionist Committee for Public Affairs, testimony by 177-181 t Biemiller, Andrew J., representing the American Federation of Labor, statement by‒‒‒‒ 175-177 Bilateral programs, United States participation in Bill of Rights, United States-- 73, 75, 76, 177, 381 260 B'nai B'rith. (See Goldberg, Dr. Maurice, testimony by.) Bolivia (see also Highway construction) 127-128 Booz, Allen & Hamilton. (See Smiley, Ralph E., testimony by.) Bradfield, Dr. William, of Cornell University. 247 Work of Ford Motor Co. in_ Brazil___ Brazilian Traction, financed largely by Canadian and American capital___ British Foreign Office__. 193, 197, 209, 237, 238. 318 150 261, 270, 271 British Foreign Service. 209 British-sponsored schools abroad_. 224 Brookings Institute, report on aid program 223 Budget, Bureau of. 45 Bulgaria_. 334 Burma. 270, 274, 343, 349 Business organizations. Participation in technical assistance_ Butz, Earl L., Assistant Secretary for Marketing and Foreign Agricul- ture, United States Department of Agriculture, testimony by. 4 61-66 C Cabinet__ 45. Campbell, Wallace J., of the Cooperative League of the United States of America, Washington, D. C., testimony by. 275-282 Canada__ 209€ Value of per capita purchases_. United States private investment in 135 239 INDEX 385 Page 186, 233 83, Capehart, Homer E., Senator, questions and remarks by. 189-197, 207, 209, 212, 223–224, 230-231, Capital investment (see also Foreign investment) 117, 236, 238, 239, 282, 316, 357, 363, 364, 368, 371, 376 72, 73, 176, 317 191, 192, 236, 240, 371 possibility of combining with technical assistance- from within locality receiving aid…_ Cardon, Philip V., Director-General, United Nations Food and Agriculture Organization__. CARE Chamber of Commerce, United States- China, Catholic Welfare work in__. China (Communist)–– mass education movement under Jimmy Yen_- Admission into the United Nations__ China Medical Board_ China Relief Mission……. Church of the Brethren. Soviet technical assistance to_. 63, 160, 257, 279, 280 260, 278, 280 156, 158 126 190, 191 Clay, Lucius, Gen____. Cleveland, Lorraine, of the American Friends Service Committee__ College contracts. Colombia.. Colombo plan--- (See University and college contracts.) 130, 248 118 135, 136 248 126 277 142 230 241, 247 380 45, 196 95 195 99 4, Commerce, Department of (see also Smith, Marshall M., Acting Assistant Secretary of Commerce for International Affairs, testimony by) – promotes private investment____ Commercial counselors in the Department of State in the foreign embassies and legations__ Commission of the Churches on International Affairs_. Communism, technical assistance as a counter to_. 126, 130, 134, 141, 147, 148, 162, 186, 215, 352, 353, 355, 379 In participating countries_ 23, 24, 336, 337 In France and Italy-- 131, 138 Congress of Industrial Organizations (see also Reuther, Victor, represent- ing Congress of Industrial Organizations, testimony by)- 46, 177, 278 excerpt from resolution No. 39, 16th constitutional convention__ 154-155 Constitution of the United States____ 139, 260 Contractual relationships between private voluntary agencies and the FOA (see also Noncontractual relationships between private voluntary agencies and the FOA); Cooperative relationship__ 187, 199–200, 203–205, 329 Contributions, by participating countries__ 28-33, 176 33 179, 180 Cooperative League of the United States of America, Washington, D. C. Cooperative relationship between private voluntary agencies and the FOA Per American per month... By Israel___. (See Campbell, Wallace J., testimony by.) (see also Contractual relationships). Cornell University_ Council on Foreign Economic Policy. Credit Union National Association_. Cuaderno, Miguel, Sr., Philippine representative to the U. N. Customs administration project in Egypt.. D 205-206 349 91 275 156, 160 326 Davies, Joseph E__. Defense, Department of.. Work in technical assistance_. Democratic World Economic Union_ De Tocqueville, French historian__. Development assistance program. Defined In India_ In Pakistan. 184 36, 45, 46, 138 137 260 356 33, 215 35, 36 119, 220 220 386 INDEX Diseases_ Communicable____ Trachoma, tinea, tuberculosis among Moroccan Jews___. In cattle.. Yellow fever__ Hoof-and-mouth Work of Arabian American Oil Co---. Work of Firestone Plantations Co_. In Mexico____ Page 320, 352 81 177 219 242, 243, 244, 246, 247 280 291-293 308-309 363 43, 369 283-290 136 153–154 4 Dodge, Joseph M., chairman of Foreign Economic Council_. Duce, James Terry, vice president, Arabian American Oil Co., testimony by____ Dulles, John Foster, Secretary of State.- Letter from Victor G. Reuther to__ Duration of Technical assistance program D Economic Cooperation Administration. (See Marshall plan.) Ecuador (see also Highway construction)___ East-West Trade Control_. 46 246 Edgerton, Glen E., Managing Director and President, Export-Import Bank, Washington, testimony of___ 66-73 Education, program in (sce also Exchange of students and professors; Latin America, educational program in; Near and Middle East, educa- tional program in; Far East, educational program in; American-sup- ported schools abroad; Names of universities and colleges) –– 20, 21, 64, 190, 196, 317, 319 Possibility of conflict with other international educational programs_ 37 Vocational schools__ 21 Engineering schools___. 21, 206-213 Public administration___. Participation of Department of Health, Education, and Welfare---- 73–81 Rockefeller Foundation program-- 21 242, 247 Work of Arabian-American Oil Co-~-~ Work of Firestone Plantations Co---- Work of the Near East Foundation. 293-300 307-308 335 262, 272, 273, 274, 275, 336 33, 128 187 Work of Booz, Allen & Hamilton with FOA in_ 323, 326-328 Atoms-for-peace program__ Egypt_‒‒‒ Development assistance program in_ Vocational schools on upper Nile in--- Eisenhower, Dwight D., President_. El Salvador__ 3, 89, 160, 168, 366, 373 Engineers, lack of in participating countries (see also National School of Engineering of Peru; Smiley, Ralph E., of Booz, Allen & Hamilton, statement by)-- Ethiopia, program in___ Europe, technical assistance in (see also Marshall plan) Distribution of food in, by churches_ European Office of Economic Affairs_. 25 227, 366 67, 68, 69 90 16, 18 00000000 98 46 European Productivity Agency. (See Organization for European Eco- nomic Cooperation.) Exchange of students and professors (see also Names of specific universi- ties and colleges, i. e., University of North Carolina; Public Law 402 (80th Cong.); Fulbright scholarship program; Smith-Mundt scholar- ship program) 15, 18, 74, 130, 207, 212, 213 Exchange of young farmers. (See Lynn, John C., testimony of.) Expansion of technical-assistance program. (See Improvements sug- gested.) Export-Import Bank (see also Edgerton, Glen E., Managing Director and President, Export-Import Bank). 117, 164, 171, 192, 194, 237, 238, 281, 357, 363, 375 > 387 INDEX 1 ད F Financing of program. (See Appropriations, contributions by participat- ing countries.) Firestone, Harvey S., Jr.---. Firestone Plantations Co. (See Larabee, Byron H., testimony by.) Firestone Tire & Rubber Co. (See Larabee, Byron H., testimony by.) Fiscal operations project in Philippines_. Food, increase in production__ Storage of surpluses program__ Distribution of____ Program in__ Far East, educational program in (see also Technicians, number of hous- ing) ___ Faridabad project in India_. Federal Reserve Bank in New York City. Field projects, execution of by Department of Interior_ Need for coordination in…. Financial stability of participating countries, adverse effect on.. Page 21 36, 262-266 115-116 46 83 91 21, 23 308 325-326 < 18, 20, 125 18 18 Population requirements of Transport of_. 20 23 Food and Agriculture Organization. (See United Nations.) Ford Foundation. (See also Price, Don K., Jr., testimony by). 216, 219 Ford, Henry, II, President, Ford Motor Co., Dearborn, Mich., testimony by____ 317-323 Ford Motor Co. (See Ford, Henry, II, testimony by.) Foreign Economic Council__. 43 Foreign investment by Americans in underdeveloped countries. (See also Capital investment) 88, 94-95, 117, 125, 168, 169, 195, 236, 237 224, 225 Forman, Christian College in Lahore. Foundations, participation in technical assistance by. (See Private organ- izations; Religious organizations; Rusk, Dean, testimony by; Price, K., Jr., testimony by.) France. (See Communism, in France and Italy.) Friends, society of (see also American Friends Service Committee, Wilson, E. Raymond, testimony by). Friends Committee on National Legislation. (See Wilson, E. Raymond, testimony by.) 286 Fulbright, J. W., Senator, questions and remarks by. 104-109, 118-124, 147–152, 170–172. 174-175, 179, 212–213, 220-222 Fulbright scholarship program_. 37, 80, 130 G Gandhi, Mahatma_. In the National Movement_ Gates, Gertrude, coordinating officer for International Relations, Depart- ment of Health, Education and Welfare, testimony by‒‒‒‒ General Federation of Women's Clubs. (See Hartz, A. Paul (Mrs.), chairman of legislation, General Federation of Women's Clubs.) Gibboney, Carl, Director of Foreign Economic Development, Department of Commerce, testimony by.. 222 121, 122 80 93, 94 Goldberg, Dr. Maurice, vice president, B'nai B'rith, testimony by------ 354–355 Grants, transferred to loans, (see also technical cooperation assistance, as distinct from economic grant-in-aid program). Should favor technical assistance over_. Greece____ -- 39-40 91 Aid to--- 331, 332, 335 135, 162, 170, 280 Green, Theodore Francis, Senator, questions and remarks by- 15, 18, 20, 24, 110-112, 237, 244-246, 254-255, 289–290, 329–331, 333- 335, 341-348, 353. Gropius, Walter, architect_. 245 Guatemala, program in_- 24 Development assistance program in_. 33 388 INDEX F H Page Haiti, program in……… Hartz, A. Paul (Mrs.), chairman of legislation, General Federation of Women's Clubs, testimony by--. 67, 71 183-184 Harvard University 308 Health Advisory Committee___ 46 Health and sanitation (see also National School of Engineering of Peru) 21, 64, 164, 176, 178 Work of Rockefeller Foundation in.. 242 Health, Education, and Welfare, Department of_ Funds allotted to by FOA_. 46, 73-81 76 Helmand River Valley. (See Afghanistan Export-Import Bank project in.) Hickenlooper, Bourke B., Senator, questions and remarks by--. 5, 11, 15, 20, 25, 35, 37-41, 44-45, 112–118. 270-274, 279-281, 287-289, 314-316 Hickey, Margaret, member of Advisory Committee on Voluntary Foreign Aid of FOA_. Highway construction__ Export-Import Bank loans to Liberia, Bolivia, and Ecuador for. In Liberia__ 187 66, 143, 164 68 309 Holden, John C., national legislative director, AMVETS, statement of--- 374-376 Homestead program in the Philippines_. Hong Kong, refugees in___. Hoover, Herbert, Jr. (Under Secretary of State)-- Testimony by-. Hoover report--- House Subcommittee on the Specialized Agencies of the United Nations_. Housing, program in India and Near East, Indochina, Far East, Latin America.. Humanitarian motives of technical assistance_ In Israel_. Supported by churches.. Not acceptable in India. Humphrey, George M., Secretary of the Treasury. Hyderabad, India. Hydroelectric power. 324-325 126 43, 136, 352, 366 2-7 223 281 23 178 4, 39, 107, 123, 229 98, 99 111, 112 173, 372 120 66, 68 I Improvements suggested (see also Special United Nations fund for eco- nomic development) 91-94, 99, 128, 163, 175, 176, 177, 208, 216, 217, 236, 242-244, 250-254, 263-265, 276–282, 287, 288, 319, 337, 357, 358, 359, 375, 376. Single unified agency to coordinate the program__ 137, 163, 255, 276–277, 372 Expansion needed_ 143, 352, 362, 364, 375 India (see also Housing; University of Delhi; Woodstock School) 110-126, 136, 138, 172, 185, 187, 193, 213, 214, 215, 216, 221, 222, 226, 227, 229, 231, 232, 237, 274, 279, 289, 343, 345, 347, 372. Increase in food production in…. Development assistance in.. Distribution of food by churches in. British in____ Per capita annual income in__. Value of per capita purchases from United States. Indochina (sce also Public Administration Housing) Distribution of food in, by churches__ Mutual security appropriations for_-_ Indonesia_-_- Students attending the University of the Philippines_ Industry-- State owned___. Indigenous___ 18, 20 33, 220 98 121, 122 124 135 274 98 173 343, 370 21 – 193, 239, 251, 318, 354 93 191, 197, 231 300-305 164-165 Work of Arabian American Oil Co-. Inflation in participating countries. (See Financial stability.) Infrastructure, investment in__. Initiative of country receiving aid_ 18, 25, 40, 117, 224, 243 Insect control___ 63 · 389 INDEX Page 33, 170, 177, 358 90 62 Institute of Inter-American Affairs. Inter-American highway program_. Interdepartmental Committee on Scientific and Cultural Cooperation___ Interior, Department of the (see also Wormser, Felix E., Assistant Secre- tary for Mineral Resources, Lepartment of the Interior, testimony by) –– International Bank for Reconstruction and Development "World Bank". 41, 90, 117, 141, 165, 171, 193, 281, 363, 372, 380 45 40, 78 International Bureau of Education_. International Development Advisory Board, "Nelson Rockefeller Advisory Board". 46, 98, 134, 140, 155, 156, 165, 166, 322, 365, 372 International development fund_. 176, 177 International Educational Exchange Services, Department of State---- 74, 79, 80 International Federation of Agricultural Producers__. International Finance Corporation. 258 141, 141, 149, 150, 151, 152, 164, 171, 179, 282, 363, 372, 381 International Labor Organization__ 77, 78, 176, 211, 281 International Voluntary Services-- 286 24, 172, 262, 270, 272, 329, 330, 331, 333, 334, 337 Iran Iraq Export-Import Bank loan to………. Development of state-owned industries in. Recent rapid development in Health clinic in Irrigation works in Haiti____ in Afghanistan in Punjab, India. in Israel Israel program in_. Italy, programs in (see also Communism in France and Italy). 68 93, 94 124 270 187 66, 164, 221 67 68 126 178 177, 227 178, 179, 354 18 J Japan___. Aid for. Distribution of food in by churches: MacArthur land reform in_____ 245, 262, 272 43 98 262 227, 230, 232, 233 Jewish war veterans of the United States of America. (See Weitzer, Ber- nard, testimony by.) Jordan___ K Keppel, Frederick P.. 184 Klutznick, Philip M., president, B'nai B'rith 354 Korea---- 137, 262, 272, 273 Aid for--- 43, 138 Development assistance program in_-_. Distribution of food in by churches. 35 98 L Labor, Department of Labor, organizations_ Leaders 45 18, 142 46 Organizations in underdeveloped countries (see also Reuther, Victor, representing Congress of Industrial Organizations, testimony by; names of specific organizations, i. e., American Federation of Labor)_ Labor Advisory Committee_. Land-grant colleges (see also University and college contracts). 142, 143, 176 46, 177 62, 63, 65, 278, 348 Larabee, Byron H., executive vice president, Firestone Plantations Co., testimony by 305-316 390 INDEX Page Latin America (see also American Republics, Bureau of Public Roads, Housing, National School for Engineering of Peru, Technicians, num- bers of)-- 21, 126, 127, 130, 131, 136, 139, 142, 153, 163, 192, 208, 219, 241, 246, 349, 358, 375 Financial contribution to program_. Use of social and child welfare officers in. Lederle Laboratories in India. 28.33 75 117 Lee, Charles Henry, member of the New York bar and overseas trade executive, testimony by---- 356-359 Liberia, work of Firestone Plantations Co. in (see also highway con- struction) 305-316 Liberian Institute____ 309 Loans, long-term, under development assistance program. 35, 39-41, 71 "Soft loans" and "hard loans". 41 By Export-Import Bank____ 66 Lodge, Henry Cabot, Jr., Ambassador___ 145 Lodwick, William G., Administrator, Foreign Agricultural Service, De- partment of Agriculture, statement on personnel__. Long-term approach, need for-- 65, 92, 98–99, 128–129, 215, 229, 278–279, 284–285, 337, 349, 358, 361, 365, 367, 368, 369, 372, 374, 377. 66 4, 64, Loree, Robert F., chairman, National Foreign Trade Council, Inc., New York, N. Y., testimony by---. 237-240 Lynn, John C., legislative director, American Farm Bureau Federation, testimony by-- 249-258 Mc McGavran, E. G., dean, School of Public Health, University of North Caro- lina, testimony by---- 206-213 McGuire, Frederick (Rev.), representing the National Catholic Welfare Conference, testimony by. 126-132 M Machine tools___ Malaria. (See Nepal, malaria program in.) Manila, the Philippines-- Mansfield, Mike, Senator, questions and remarks by. 192, 197 216 1-2, 6, 15-16, 18, 28, 33, 36–37, 42-44, 65–66, 70-72, 74–75, 79–81, 86, 92-95, 100-101, 109, 131-132, 137-139, 141, 188-189, 210-211, 225- 226, 231–233, 238-239, 255–257, 269–270, 322–323, 328, 348–350, 359, 368–369, 371. Maris, Paul__ Marshall plan--- 274 18, 40, 88, 91, 126, 134, 135, 136, 137, 139, 149, 150, 162, 185, 223, 258, 351, 358, 367, 369. 279 Mehta, Gaganvihari Lallubhai, Ambassador of India___. Merrill Center for Economics. (See Thorp, Willard L., testimony by.) Mexico--- 219, 241, 242, 247 Meyers, William I., member of Advisory Committee on Voluntary Foreign Aid of FOA and dean of the Agricultural School of Cornell University__ Michigan State University. (See Public administration.) Middle East. (See Near and Middle East.) Military assistance (see also Mutual Security) Military assistance advisory groups…. 188 137, 138, 141, 162, 216, 250 38 Mintener, Bradshaw, Assistant Secretary, Department of Health, Educa- tion, and Welfare, testimony by. 73-79 Moody-Benton amendments___- 163 Morgan, Haydn, assistant administrative director of project research and grants at the University of Pennsylvania__ 214 Morocco, conditions of Jews in____ 177, 178, 180 Relations between French and Arabs in__ 177, 180 Motives of United States. (See Benefit to United States of programs; Humanitarian motives of technical assistance.) Mount Herman School, Darjeeling, India___. 224 $ INDEX 391 Multilateral programs, United States participation in (see also United Na- tions, technical assistance program of; United Nations, Organization of American States) ----- Mutual Security, Act of 1954- Funds for program for 1955. Act___ Agency Page 3, 73, 76–79, 82, 99, 100, 372, 381 3, 90, 91, 185, 186, 365 34 36, 238, 373 137, 162, 177, 214, 259, 349, 358 Nathan, Robert---- N National Advisory Council on International Monetary and Financial Problems-- National Council of the Churches of Christ in the United States. (See Van Kirk, Walter W., testimony of.) National Farmers Union (see also Baker, John A., testimony_by) National Foreign Trade Council, Inc., New York, N. Y. (See Loree, Robert F., testimony of.) 371 71, 91 278 National Grange and Farmers Union_. National Planning Association__-- National Rural Electric Cooperative Association_ National School of Engineering of Peru___. National Security Council_. 257, 278 161 275 206–213, 233 43, 44 National Workshop on World Economic and Social Development, Wash- ington, D. C___. 266-269, 360 Nationalism, rise of in India___. Natural Resources (see also Wormser, Felix E.) 121 286, 287 In India_ 112-113 In Israel____ 179 (See Defense Department of.) Navy. Near and Middle East (see also Technicians, number of housing) 135, 136, 139, 142, 163, 262–266, 284, 286, 287, 289, 336, 337 Educational program in 21 Distribution of food in by churches__ Near East Foundation (see also Badeau, John S.) 98 277, 286 Negev--- 178. Nehru, Jawaharlal, Prime Minister of India__- Nelson Rockefeller Advisory Board. 117, 121 (See International Development Advisory Board.) Nepal, malaria program in---- Netherlands, The, support to SUNFED_ Neutrality Act of 1937_ 16 145 184 New Zealand__ 253 Nile River project. (See Egypt.) Nizam, Ruler of Hyderabad__. 120 Noncontractual relationships between private voluntary agencies and the FOA_-_. 187 Nonregional, definition of----- 36 Operation and maintenance activities, foreign governments reluctant to turn projects over to United States firms__ Operation Cowboy---- Organization. (See Administration.) Organization for European Economic Cooperation__. 69 355 16 Organization of American States, technical assistance program of. 3, 61, 64, 77 Department of Health, Education, and Welfare works with____ 73, 77, 79 Oriental Development Company of Japan__- 272 Osborne, Arthur, international health representative of the Public Health Service. Department of Health, Education, and Welfare, testimony by 80-81 Oshins, Robert L., of Foreign Operations Administration_ Otis Elevator Co., in Germany- 7, 20 238 392 INDEX Pakistan___ Program in____ Aid for--- Р Development of state-owned industries in. Distribution of food in, by churches--. Criticism of program in_ Palestine__. Relief program__ Page 270, 343, 344, 345 38, 214, 215, 216, 223, 224, 225 43, 46, 80, 218, 219, 220 Palmer, Norman D., professor of political science, University of Pennsyl- vania, testimony by--. Pan American Road Congress_ Pan American Sanitary Organization__- 93, 94 98 149 289, 335 138 214-227 88 77 166 258, 261, 270 248 280 26-28, Partners in Progress, a report to President Truman by the International Development Advisory Board, foreword to.. Patton, James G., president of National Farmers Union_ Peiping Union Medical College___. Penicillin__ Personnel of technical assistance programs (see also Technicians). 38, 42-43, 212, 242, 243, 348, 349, 358, 361, 372 Participation of Department of Agriculture in recruitment of Recruitment of.. Participation of Department of Health, Education, and Welfare in recruitment of__. Recruitment by Department of the Interior. Full utilization of needed_. Department of Commerce_-- 62 65-66, 285-286 74, 79–80 84 91 92 120 Personnel of United Nations technical assistance program, difficulty of recruitment__ Peru (see also National School of Engineering of Peru)_. 226 323-326, 328 Philippines (see also Public Law 545 (75th Cong.); Manila) -- 140, 224, 262, 272 Work of Booz, Allen & Hamilton with FOA in___. Potofsky, Jacob, chairman of CIO International Affairs Committee_ 133, 134, 155 Statement of. Testimony by-- 161-166 197 318 340-350 Pressure groups. Price, Don K., Jr., vice president, The Ford Foundation_ Private endowments. (See Religious organizations, Private organizations, names of specific organizations.) Private investment. (See Capital investment, foreign investment.) Private organizations (see also Religious organizations, Taft, Charles, testimony by; Contractual relationships and Noncontractual relation- ships; names of specific organizations) 4,36, 64, 83, 90, 185, 216, 227, 277-278, 286, 288, 289, 290, 318, 334, 335, 343, 346, 347 Problems precipitated by technical assistance (see also Financial stability of participating countries, adverse effect on)- 23, 24, 91, 100, 138, 168, 169, 190, 212, 215, 222, 228, 287 Public Administration Clearing House_. Public administration, program for training in_. Joint training program between Michigan University and the Univer- sity of the Philippines---. Training program in Vietnam, Indochina by Michigan State University_ Public Education Conference_ Public Law 63 (76th Cong.). (See Public Law 545 (75th Cong.) ) Public Law 355 (76th Cong.), authorizing President effect closer relation- ships between American Republics_-- 346 21 21, 25 21 78 62 Public Law 402 (80th Cong.), United States Information and Educational Exchange Act of 1948__ 62, 82 Public Law 545 (75th Cong.), authorizing temporary detail of United States employees to governments of American Republics and Philip- pines___ 62 Publications exchange.. Punjab area, irrigation canals in. Punjab University_ 63 126 225 INDEX 393 Quakers- Q R Page 231, 232 Rabies. (See World Health Organization.) Railroad brotherhoods (see also American Railroad Association) Randall Commission__. Rawalpindi…. Recruitment of personnel. (See Personnel of Technical Assistance Pro- gram.) Refugees in Vietnam. Relief programs- (See Vietnam.) 46, 177 322 224 278 104, 105, 108, 260 As distinct from technical assistance__ Religious organizations, participation in technical assistance (see also Van Kirk, Walter W., testimony of; World Council of Churches; Commission of the Churches on International Affairs; McGuire, Frederick (Rev.) representing the National Catholic Welfare Conference, testimony by; Teaf, Howard M., Jr., American Friends Service Committee, testimony by; Quakers) – 36, 185, 232, 277, 278, 318 Reorganization (see also Reorganization Plan No. 7) Reorganization Plan No. 7-- Reuther, Victor, representing Congress of Industrial Organizations, testi- mony by.. 45, 47, 223 137 133-166 Rhoads, Edgar, member of Advisory Committee on Voluntary Foreign Aid of FOA and member of Friends Service Committee___ 187 Rice, Andrew E., executive director of the American Veterans' Committee, testimony by--- 370-373 Rice in Asia, Rockefeller Foundation research on___. Roads. (See highway construction.) 241, 247 Roberts, Ralph S., Administrative Assistant, Secretary, United States De- partment of Agriculture___ 63 Rockefeller Foundation (see also Rusk, Dean, testimony by) 206, 211, 216 Rossenwald, Lessing, member of Advisory Committee on Voluntary Foreign Aid of FOA___ 187 Rubber. (See Larabee, Byron H., testimony by.) Rusk, Dean, president, the Rockefeller Foundation, New York, N. Y., testimony by Russell, Dr. William, for technical services_ Ruttenberg, Stanly, director of research department of CIO___. S Saudi Arabia, work of Arabian American Oil Co. in_ Scheyven, Raymond of Belgium, article on SUNFED, by Schmidt, Dana Adams, article in New York Times by- Schuster, George, member of Advisory Committee on Voluntary Foreign Aid of FOA.. Sears, Roebuck & Co__ SEATO. (See Southeast Asia Treaty Organization.) Security clearance. Seeds, new kinds of____. Provided in Israel. Work of Rockefeller Foundation in. 240-249 46 133 284, 285, 286, 287, 288 145, 154, 157, 164, 362, 363 43, 44 187 209 226 138 178 247 Self-liquidating projects--- Selling idea to people of United States. Senate Resolution 214 (83d Cong.). 150, 158, 164, 250, 282 129, 356, 372–373 Smiley, Ralph E. of Booz, Allen & Hamilton, statement by--- Smith, Marshall M., Acting Assistant Secretary of Commerce for Interna- tional Affairs, Department of Commerce, testimony by. Smith-Mundt scholarship program 1 323-328 88-95 37, 80, 130 Social security_ 74 Social welfare. 74, 75 South America. (See Latin America; American Republics; and names of specific countries.) 394 INDEX South Pacific Commission. Southeast Asia__ Financial contribution to program.. Southeast Asia Treaty Organization (SEATO) Special projects---- Page 77 135, 136, 138, 139, 153, 375 28-31 136, 153, 157 63 Special United Nations Fund for Economic Development [SUNFED]--- 140–141, 143, 145, 149, 150, 152, 154, 155–161, 164, 172, 261, 282, 362, 364, 369, 371, 374, 380, 381. Squibbs-Mathieson Laboratory for Veterinary Research_ Standard Vacuum oil refinery in Bombay, India___ 219 117 Stanley, C. M., president of United World Federalists, Inc., statement of 373-374 Stassen, Harold E., Director, FOA__ State, Department of Testimony by To assume FOA operations_ As an operating agency 135, 141, 160, 352, 362 7-47 137, 170 5-6, 139, 141, 152, 189, 358, 368 45, 216 74 95 82, 86 Work with Department of Health, Education, and Welfare_ Promoting private investment_ Stockpiling of strategic and critical minerals____ - Straight, Michael W., of Americans for Democratic Action, testimony by 364–370 Strategic and critical minerals. (See Stockpiling of strategic and critical minerals.) Strong, Dr. Richard P., of Harvard University. 308 SUNFED. (See Special United Nations Fund for Economic Development.) Syria 331, 334, 349, 350 Beirut 349 T Taft, Charles, Chairman, Advisory Committee on Voluntary Foreign Aid, FOA, testimony by---- 184-206 & Tariff restrictions on goods sent to foreign countries__ 103 Teaf, Howard M., Jr., professor of economics, Haverford College, repre- senting American Friends Service Committee, testimony by--- Technical cooperation assistance, as distinguished from development assistance 227-233 36 Independent of military or defense considerations. 98, 129, 138, 216, 223, 229, 250, 277, 353, 356, 361 As distinct from economic grant-in-aid program_ Technicians, availability of.. 129, 250, 254, 256, 279, 280, 281 4, 5, 128, 208, 361 Number of__ 8, 9, 16, 17 In Department of Agriculture. 63 Tennessee Valley Authority (TVA) 221 Termination of Foreign Operations Administration. (See State Depart- ment, to assume FOA operation.) Textile School of Engineering in Peru_. 209 Thailand, students attending University of the Philippines (see also Bangkok). 21 Criticism of program in__. 149 Thorp, Willard L., director of the Merrill center for economics, professor of economics at Amherst College and former Assistant Secretary of State for Economic Affairs_ 371 Testimony by-- 167-175 Toffelmier, Douglas Torn, Elmer, member of Advisory Committee on Voluntary Foreign Aid of FOA_. Trade United States with underdeveloped countries- Among underdeveloped countries_. Trade fairs, sponsored by the U. S. S. R‒‒‒ Training of foreign nationals in United States. Part played by Department of Health, Education, and Welfare_ Part played by Department of Interior__. Part played by Department of Commerce_ 370 187 240, 249, 250 3, 66-67, 81, 88, 92, 112, 140, 197, 239 194, 196, 224, 230 136 355 65 84 90