be spent for American products than it would for some of it to be used in other countries which might have surpluses?

Would you advise us to write into the legislation, this flat prohibition, in view of our inability to forecast our own harvest and supplies?

Mr. HOOVER. Mr. Judd, of course it is very difficult to anticipate a year and a quarter or a year and a half in advance, all the needs that will arise.

I assume that for the supply of food that is required for this program, we would never be in a position where we could not furnish it from the United States.

The tonnage represents a comparatively small part of even a normal agricultural harvest.

If we had, of course, a universal drought, the situation might arise which you mentioned, but I assume that if we have a situation like that, Congress will be in session and will be able to modify everything.

Chairman EATON. Mr. Fulton.

Mr. FULTON. Mr. Hoover, this act proposes to put funds and food into the countries through the foreign governments as channels, by making contracts with them.

I do not want to sustain the "ins" any government that there may be in any of these countries. I think probably putting the supplies through the channels outlined, might operate to do that very thing.

Do you suggest any other methods of distribution to those countries, through our own people, possibly, or the Red Cross, or some other such agency?

Mr. HOOVER. One must bear in mind that all of these countries have a certain amount of food supply. They are all rationing their population. Whatever the imports are, they must be assimilated into their rationing systems. It is impossible to separate the imports from the domestic supplies.

Therefore, the primary dependence still must be placed on their rationing system and the only thing that we can do by way of control is to determine what would be a sufficiency to them, and then expect the country to see that they carry out distribution honestly. It is to check such action that I suggest there should be no contractural period. If they failed to carry out the very proper conditions which we laid out, then the supplies could be stopped.

Chairman EATON. Mr. Lodge.

Mr. LODGE. Mr. Hoover, do you consider that the four treaties to be considered by the Senate Foreign Relations Committee will have a significant effect with respect to relief and economic needs?

Mr. HOOVER. I have suggested here that the countries who are going to collect reparations should agree to defer those reparations until this food has been paid for.

Chairman EATON. Mr. Colmer.

Mr. COLMER. Mr. Hoover, in one of the suggestions you made you raised two questions: The questions are of those countries that have

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not kept their commitments with this country and also of those countries that are using their wealth to build up their arms.

I am just wondering if you have had opportunity to study the pending bill sufficiently to determine where that is taken care of in that bill?

Mr. HOOVER. I do not think it is possible to make reference to that /subject in this legislation. I only mention here that there is some embarrassment. Naturally we will find ourselves in a difficult situation, and if they have some warning of American attitudes they may be more cooperative. It is a very difficult question. I have not attempted to solve it by legislative formula.

Chairman EATON. Mr. Jackson.

Mr. JACKSON. Mr. Hoover, through your great experience in this field I should like to hear your considered opinion as to whether or not this program, as it is presently contemplated, and with your suggested amendments, can be depended upon to actually deliver this aid down to the grass roots of the recipient countries without undue fear of diversion of the supplies into the black markets of the countries concerned, or the channeling of the aid from the American people past the individuals who need it and into countries totally unrelated to the subject needs?

Mr. HOOVER. There are a number of problems involved in your question: In the first place, I have never found any difficulty about determining whether food is being taken out of a given country. That is a matter of some inspection at the border which is not difficult to arrange. The passing of consequential amounts of food into channels that go over frontiers is not so difficult.

The other questions you raise are factors of good internal administration. If the government is strong, if it is devout and able, none of those questions arise. But they do arise in proportion to the weakness of the government. Therefore it is only possible to get approximate effectiveness, and by determining the monthly need, and only supplying that much per month, and by holding the termination at any moment, we have an instrument by which major ills can be corrected.

Chairman EATON. There seems to be a very large surplus of clothing and food already supplied our Army and not being used, or with any necessity of being used.

Could these be shipped as a part of the relief program?

Mr. HOOVER. I have been searching the Army surpluses and I think we have diverted everything we could lay our hands on to Germans and Austrians. If there are any more about, I would like to know about them.

Chairman EATON. Ladies and gentlemen, we are grateful to you for being here, and we will now go into executive session.

We are sorry to dispense with your delightful company.

(Whereupon, at 11:25 a. m., the committee went into executive session.)

RELIEF ASSISTANCE TO COUNTRIES DEVASTATED

BY WAR

MONDAY, MARCH 3, 1947

HOUSE OF REPRESENTATIVES,
COMMITTEE ON FOREIGN AFFAIRS,

Washington, D. C.

The committee met at 10:30 a. m., Hon. Charles A. Eaton (chairman) presiding, in executive session.

Chairman EATON. I would like to make a little statement before we begin.

You are all familiar with the great new development that has been suddenly brought upon us.

We have reached the point where it is necessary, as I see it, for this great country of ours to make an announcement through the President, of its world policy. We cannot escape that.

So far we have been negotiating on grounds assumed by the other party to the necessary negotiations and on their terms, mainly.

This bill, as we started in on it, is a simple, plain attempt to extend the relief assistance formerly provided by UNRRA, which ceases on the 31st of March, with reference to these five countries.

That is what it is and it involves $350,000,000.

Just what the ultimate result will be as this great new challenge develops, and what the reaction of the American people will be to it, no one can predict. However, we must handle this bill today, in my judgment, against that background.

As far as I am concerned, I would like to see us go through this bill and work out our views. I would like for everyone here to express themselves and take their part.

I must depend on you gentlemen with legal minds for guidance on such matters, and the financial-minded men will be heard from without any doubt.

With that little preliminary, I would say I have asked Mr. Tyler Wood to come up here today. In view of Mr. Hoover's policies that he has left with us, I would like for everybody to say something, take this bill up line by line and modify it.

Mrs. BOLTON. You say there is to be a statement made on our policy. That has not been made so we still are just a little in the dark as to what form that will take, are we not?

Chairman EATON. That you may have no doubt as to the position of your Chairman, I made this statement after the conference, which expresses my views.

"The hour is here, when the United States must announce that it accepts its own destiny as the chief world power. We must fulfill the demands of that position no matter what the costs, if we, especially, along with other peoples, are to survive as freemen."

The issue before the world, members of the committee, is very simple and very, very important. Shall freedom reign or slavery in this wide world, and slavery is now in the saddle.

There is no doubt in the world that if Russia takes over Greece, then Turkey, then Arabia, then India, then comes around to China, Russia will hold the world in the hollow of her hand, and what happens to us will be of enormous and unmeasurable expense and cost, and perhaps an ultimate failure.

The issue in the world today is between freemen and slavery of men, and that issue is going to be fought out and settled.

Mr. BLOOM. Mr. Chairman, answering Mrs. Bolton, the statement that the President is supposed to make either today or Thursday would have nothing to do with the relief measure we have before us today. That would have to do with the situation that exists in Greece and Turkey and has nothing to do with relief.

Mrs. BOLTON. I know that.

Mr. BLOOM. What we have before us is merely a bill for relief.

Mrs. BOLTON. May I suggest to my eminent colleague that the chairman said we should consider this on the basis and background of our whole financial policy.

Chairman EATON. We cannot consider it intelligently any other way, possibly.

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Mr. JUDD. You said this bill merely extends UNRRA; is that right? Chairman EATON. No; it does not extend UNRRA, but UNRRA ceases this month.

Mr. CHIPERFIELD. I was not able to be at the first hearing and only part of the second, so I have not gone into this measure as much as I would have liked.

I thought of it more as a food problem, perhaps with medicine, seed, and fertilizer. But when I go into this so-called secret document, I find we are not only going to furnish food, seed, and medicine, but to the extent that these other countries do not have exchange, we are going to furnish them free all kinds of material they need, such as industrial needs.

All you have to do is read this document and you will find it.

For example, let us take Italy. Besides the foods of which we are going to pay our share, there is coal, industrial oil, cotton, wool, jute, rags, paper, copper and steel products, nickel and tin, and so forth.

In other words, to the extent that they have a deficit and import these products, we pay our share of it.

I think the first thing for us to determine is how far we will go. I wanted to have a bill that would furnish food, seed, and fertilizer, and help starving people, but for us to rebuild these countries, I do not feel I can go that far. I do not disagree with anyone else with a dif ferent opinion, but for myself, when I look into this program that is exactly what we are going to do.

I think now is the time to stop, look, and listen, and at least know where we are going.

Chairman EATON. Mr. Wood is here, and perhaps he can comment on that.

STATEMENT OF TYLER WOOD, DEPUTY TO ASSISTANT SECRETARY OF STATE FOR ECONOMIC AFFAIRS

Mr. JUDD. What is this secret document?

Mr. CHIPERFIELD. It simply shows the imports that are necessary for 1947, and the amount of credit that they have. It then shows a deficit of so many millions, and to make up that deficit they are importing not only food products but products like the type I have related.

Mr. BLOOM. Mr. Judd, those were documents given out at a recent meeting of the committee. Each member received one of those documents. I do not believe you were here at the time.

Mr. JUDD. I was not at that meeting.

Mr. Woop. Mr. Chairman, may I just comment on the question? Mr. Chiperfield asked if there was anything wrong with his statement. There is nothing wrong with his statement as far as the computation of the relief deficit is concerned.

As far as this bill is concerned, however, it is particularly provided that the imports bought with the money, if appropriated, would be confined to food, seeds, fertilizers, and things of that sort. That is the plan-to confine the use of our contribution to the basic essentials of life.

I think it would be a mistake administratively, if you were to confine our help specifically and solely to the three items mentioned by Mr. Chiperfield. The great bulk of our help would go in the form of these items, but, as the program develops, it might be wise to provide small amounts of other basic essentials, such as medicines, clothing, or cotton for the production of clothing, or coal.

Let me discuss briefly the method and reason for our figuring the relief deficit this way. Obviously, any economy, in order to continue operating, must import certain things such as raw materials which the country does not produce itself, or, for example, repair parts for fac

tories.

Let us take a textile factory in Italy: If the Italians cannot make the necessary repair parts to keep that factory going, they must be imported.

The way we went at it was to study very carefully (as Mr. Clayton told you the other day, this study was carried on during a period of from 4 to 6 months) those things which are minimum essentials as imports for these countries to keep them from falling back into economic chaos.

Those other things, Mr. Chiperfield, are listed there.

In each case you will find the imports of food, seed, and fertilizer, with the possible exception of Austria, are greater than the total amount of these relief deficits. I do not think it can be said there is any other proper way to figure this relief deficit than to consider these minimum essential things that must be imported into a country.

We are not, however, proposing those items be bought with the funds which are asked for here.

Chairman EATON. How are they to be bought?

Mr. WOOD. If you will look at these studies you will see that in each case certain exports of the countries concerned can be brought into the calculations.