ASSISTANCE TO GREECE AND TURKEY HEARINGS BEFORE THE COMMITTEE ON FOREIGN AFFAIRS EIGHTIETH CONGRESS FIRST SESSION ON H. R. 2616 A BILL TO PROVIDE FOR ASSISTANCE TO GREECE AND TURKEY MARCH 20, 21, 24, 27, 28, 31, Printed for the use of the Committee on Foreign Affairs ASSISTANCE TO GREECE AND TURKEY THURSDAY, MARCH 20, 1947 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met at 10 a. m., Hon. Charles A. Eaton (chairman), presiding. Chairman EATON. The committee will please be in order. We have before us this morning, H. R. 2616, a bill to provide for assistance to Greece and Turkey. It is the fixed purpose of the Foreign Affairs Committee and of its chairman to completely explore the far-reaching and fundamental national and international issues involved in the foreign policy proposed by the President in his address to Congress on March 12. It is our purpose in these hearings to furnish to the committee, the Congress and to the American people all the pertinent facts upon which a final and intelligent judgment can be reached upon a foreign policy which will affect for good or ill not only our own country but the entire world. We shall be grateful to the press for giving a complete and unbiased report of these hearings for the information of the people of the country. Our first witness is the Acting Secretary of State, the Honorable Dean Acheson. STATEMENT OF HON. DEAN ACHESON, ACTING SECRETARY OF STATE Secretary ACHESON. Three weeks ago the British Government informed the Department of State that as of March 31 it would be obliged to discontinue the financial, economic, and advisory assistance which it has been giving to Greece and Turkey. A few days later we received from the Greek Government an urgent appeal for financial, economic, and expert assistance. Assistance is imperative, says the Greek Government, if Greece is to survive as a free nation. At various times during recent months the Turkish Government has applied to the United States for financial aid, but the Government has not had the facilities for responding to those requests. With the withdrawal of British aid, the needs of Turkey for assistance are greatly increased. Greece and This then is the situation with which we have to deal. Turkey are in urgent need of aid and there is no other country to which they may turn. The President in his message to Congress on 1 March 12 recommended that this Government extend the necessary assistance. The problem with which we are faced has a history and a background. Greece's difficulties are not new. But they have become acute as a result of special circumstances. Long before the war Greece had a hard time making ends meet. Her poverty of natural resources is so great that she has always needed more imports than she could pay for with exports. Only by band-tomouth contriving has she been able to maintain a precarious balance in her international economic position. In the past much of her export trade naturally went to central European markets, particularly to Germany; during the thirties she was forced into closer dependence on Germany through clearing agreements and other instruments of Nazi economic warfare. And then came the Italian invasion, the German invasion, 4 years of cruel enemy occupation, and the scorching of her earth by the retreating enemy. Perhaps no other country in the world has suffered greater destruction of its physical resources than Greece. I should like to focus your attention upon four conditions which were found to exist at the time of Greece's liberation: First, physical destruction had catastrophically impaired Greece's ability to produce, either for home consumption or for export; Second, Greece's entire fiscal system had been destroyed; Third, the Greek civil service and administrative system had been gravely impaired through starvation and by death, undermined by infiltration of undesirable elements, demoralized by infiltration and the resultant scramble for existence; and Fourth, the authority of the Greek state was threatened by several thousand armed men who defied, and continue to defy, it in certain areas of the country. This situation in part grew out of the arming of guerrilla forces during the war of liberation. Many of these people have retained their weapons and certain bands now use them fighting to resolve political differences that might otherwise be peaceably settled. The Greek Government has charged before the Security Council of the United Nations that the insurgent groups operating in northern Greece are assisted from outside Greece by supplies and training in neighboring countries. A Commission appointed by the Security Council of the United Nations is now investigating these charges. In the period of more than 2 years since its liberation Greece has received substantial relief assistance from the United Nations Relief and Rehabilitation Administration. Great Britain has also extended very substantial aid to Greece in an effort to supplement the relief and reconstruction efforts of UNRRA, and to organize and equip the Greek Army. However, at the end of this current month outside assistance to Greece is scheduled to stop. UNRRA is going out of business in Greece and British assistance, for reasons of which you are aware, is about to be discontinued. The cessation of outside aid to Greece means immediate crisis. Unless help is forthcoming from some other quarter, Greece's economy will quickly collapse, very possibly carrying away with it the authority of the Government and its power to maintain order and the essential services. Essential imports for civilians and for the army under the circumstances can continue for only a few weeks. Two weeks ago the dollar resources available to Greece were only $14,000,000, enough for 1 month's imports of food and other essentials from the United States and other countries. If imports should cease, the price of such goods as are available would very rapidly reach astronomical figures. This is inflation. Its result in a country so dependent upon imports would be paralysis of the Government and of economic life. It would also very probably mean the end of Greek freedom and independence. The armed bands in the north, under Communist leadership, are already fighting, Greek against Greek. In the event of economic collapse and government paralysis, these bands would undoubtedly increase in strength until they took over Greece and instituted a totalitarian government similar to those prevailing in countries to the north of Greece. The rule of an armed minority would fasten itself upon the people of Greece. In this critical situation, Greece has urgently asked the United States for help. She requests financial assistance for the following purposes: First, to enable her to carry on essential imports of food, clothing and fuel necessary for the subsistence of her people; second, to enable her to organize and equip her army in such a way that it will be able to restore order throughout her territory; third, to enable her to begin the process of reconstruction by putting her production facilities in order; fourth, finally, Greece requests the aid of experienced American administrative, economic and technical personnel to assure the effective utilization of whatever financial aid may be extended her and to help her to begin the reconstruction of her own economy and public administration. The situation in Turkey is substantially different, but Turkey also needs our help. The Turkish Army has been mobilized since the beginning of World War II and this has put a severe strain upon the national economy. During the war Turkey received substantial assistance from Great Britain and the United States, which helped her to carry this load. Today the Turkish economy is no longer able to carry the full load required for its national defense and at the same time proceed with that economic development which is necessary to keep the country in sound condition. With some help from the United States, and further assistance which Turkey may be able to negotiate with United Nations financial organs, Turkey should be in a position to continue the development of her own resources and increase her productivity, while at the same time maintaining her national defenses at a level necessary to protect her freedom and independence. The crisis in Greece and Turkey confronts us with only two alternatives. We can either grant aid to those countries or we can deny that aid. There is no possibility of putting the responsibility for extending the aid which Greece has asked from the United States on some other nation or upon the United Nations. This becomes clear when we consider the specific problems that confront Greece today and the specific kinds of assistance that Greece has requested from the United Nations on the one hand, and from the United States on the other. Let us consider first the problem arising from outside Greece's borders. Greece has charged before the Security Council that armed |