Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

800.00 FA/8–351: Circular airgram

The Secretary of State to Certain Missions Concerned With the Mutual Security Program¹

restricted

Washington, August 3, 1951—2:50 p. m.

Hearings Mutual Security Program before House Foreign Affairs Comite were completed July 31 and began in Foreign Relations Comite Thur, July 26.² Washington witnesses included large number top State, ECA, Defense officials and Harriman. Field officials testifying included: Ambs Spofford, Katz,³ Mr. Batt,⁴ Gens Gruenther,⁵ Kibler,⁶ Arnold,⁷ Frederick,⁸ Mr. Holmes⁹ (Pt. IV, India).

Public witnesses included Messrs. Hoffman, Rockefeller and Voorhees (principally on org), Berle,¹⁰ Clayton,¹¹ Wadsworth (statement on NE Aid), Lipsky¹² and Nathan¹³ (ZOA), Schwartz¹⁴ (UJA), Pickett¹⁵ (Friends), Van Kirk¹⁶ (Wld Council Churches), and Msgr. McMahon.¹⁷

Trip to Europe appeared increase greatly Members’ appreciation complexity problems involved programs, understanding of them. Many assertions by members how well dipl, econ, mil, treas officials overseas worked together. Many favorable comments on calibre officials abroad, all participating agencies and American officials regional organizations. Both Comites much interested in creation new single agency to administer all aid programs (or all econ programs and AMP, but not military end-item asstce) proposed by several public witnesses. Dollar amount of programs questioned strenuously and Bill introduced in House yesterday by Chairman Richards¹⁸ with following cuts: Total cut $700 million. Title I (Eur) mil–265, econ–285; Title II (NEA and Independent Africa) no cut; Title III (SOA and FE): econ–50 millions, UNKRA–100 millions (leaving 12.5 and 50 of FY ‘51 ECA money); Title IV (ARA)–no cut.

Efforts recipient countries and probable duration aid programs received much attention. All Comite members for retaining ECA personnel, many for including all tech coop efforts in any new independent operating agency, however appeared to appreciate need for long-term tech coop programs, long-run encouragement foreign investment.

Other subjects of particular interest to Comites: trade with Soviet bloc (Kem Amendment,¹⁹ Battle Bill, etc.); possible inclusion termination date in legislation. Eur: Portion of econ aid not attributable to armament effort; state of European morale; level and adequacy European contribution defense program; limitations on European effort, especially per capita real incomes and living standards; prospects mil and econ aid to Spain; German contribution defense program; progress toward European integration; resultant incrs intra-Eur exchange; possibilities use presently unused productive capacity; further spreading benefits aid programs to low income group; extent of aid to Yugoslavia and participation by European partners in Yugo aid program; Yugo domestic policies and attitudes toward West; info efforts accompanying aid; Greece-Turkey ties to NATO; size of U.S. troop contribution SHAPE relative European contribution; organization of NATO.

(House Comite) NEA: settlement Iran oil controversy; reintegration Palestine refugees; size of Israel, Arab States programs; refusal Pt. IV by Syrian Govt;

FE: whether or not countries themselves are initiating requests for aid; specific accomplishment of STEM, MAAG programs; effect ceasefire near 38 parallel; efforts other countries re UNKRA; details on cost, nature specific programs. (Comite considering making this data public.)

ARA: bases of selection of countries receiving mil aid; whether Arg, Guat would receive mi] aid; possible dissatisfaction of Govts with size of mil aid, econ aid.

Pt. IV: possibility of overlapping of bilateral and multilateral (UN, Colombo, etc.), ECA and TCA programs; extension service work (eg. India).

Acheson

1. Sent to 67 posts.

2. Hearings occurred before the Senate Foreign Relations Committee on July 26, 27, and 30, and before joint sessions of the Foreign Relations Committee and the Armed Services Committee between July 31 and August 9. These proceedings are recorded in Mutual Security Act of 1951: Hearings before the Committee on Foreign Relations and the Committee on Armed Services of the United States Senate (82d Cong., 1st sess.).

   Five executive sessions on the subject which occurred between August 13 and August 24 are documented in Executive Sessions of the Senate Foreign Relations Committee (Historical Series), vol. III (1951), Part 2.

3. Milton Katz, U.S. Special Representative in Europe, Economic Cooperation Administration.
4. William L. Batt, Chief of the ECA Mission in the United Kingdom; U.S. Representative on the NATO Defense Production Board.
5. Lt. Gen. Alfred M. Gruenther, USA, Chief of Staff to the Supreme Allied Commander, Europe (Eisenhower).
6. Maj. Gen. A. Franklin Kibler, Director, Joint American Military Advisory Group for Europe.
7. Maj. Gen. William H. Arnold, Chief, Joint American Military Mission for Aid to Turkey.
8. Maj. Gen. Robert T. Frederick, Chief, Joint United States Military Aid Group to Greece.
9. Horace Holmes, agriculturalist for the Department of State and the Department of Agriculture.
10. Adolph A. Berle, Jr., Assistant Secretary of State, 1938-1944.
11. William L. Clayton, Assistant Secretary of State (Economic Affairs), 1944— 1946; Under Secretary of State for Economic Affairs, 1946—1947.
12. Louis Lipsky, Chairman, American Zionist Council.
13. Robert Nathan of the American Zionist Council.
14. Joseph J. Schwartz, Executive Vice Chairman, United Jewish Appeal.
15. Clarence E. Pickett, Honorary Secretary, American Friends Service Committee.
16. Walter Van Kirk of the National Council of Churches of Christ in the United States.
17. Msgr. Thomas J. McMahon of the Catholic Near East Welfare Association.
18. Reference is to H.R. 5020, introduced by Representative Richards on August 1. It was not reported by the House Committee on Foreign Affairs. Regarding the position of the Executive Branch on H.R. 5020, see letter from Secretary of State Acheson to Representative Richards, infra.
19. The Third Supplemental Appropriation Act of 1951 (Public Law 45, 82d Cong.) contained an amendment introduced by Senator James P. Kem of Missouri which provided for a ban on economic aid to countries which shipped strategic materials to Communist-bloc countries. For documentation on the implementation of the Kem Amendment, see pp. 993 ff.