Secretary HARRIMAN. There may be some items.

Mr. LODGE. May I ask you this, Mr. Secretary: I understand that the Italian wheat deficit is around 25 percent and that we are able to provide only 40 percent of that 25-percent deficit. Is there any plan for providing the balance of that deficit to Italy by providing wheat from other parts of the world?

Secretary HARRIMAN. I cannot give you much information on that. The Italian Government did arrange for a loan from the Argentine to Italy. I am not familiar with just when that grain is going forward. Mr. LODGE. Do you feel, Mr. Secretary, that it is necessary to have a compulsory final date covering the financing provided in this legislation or would you rather leave it open?

Secretary HARRIMAN. You refer to when the money is to be spent? Mr. LODGE. Yes.

Secretary HARRIMAN. I know of no reason for not carrying out the suggestion of the State Department, which I understand is that the moneys are to be used before the end of March. I think the amount is so small-of course I realize it is an enormous amount of money-but it is so small in comparison with their needs that I am sure it will all be spent here, actually spent or committed for before the end of March-I beg your pardon I believe it is June 30, they tell me and it will be spent prior to that time. And as I see it as much flexibility as the Congress is prepared to give an administrative agency I believe is more effective.

And unless the over-all European program improves, these countries will be in the same position in the second quarter of this year as they are now, and there will be some other countries who will be in difficulty as well.

Mr. CHIPERFIELD. Will the gentleman let me ask a question there? Mr. LODGE. Certainly.

Mr. CHPERFIELD. As I understand, if we do not have an over-all program then there are other countries that are going to be in the same condition, and they will have the same needs 6 months from now?

Secretary HARRIMAN. There will be needs in the second quarter. Mr. CHIPERFIELD. How about the next year, and the next year, and the next year?

Secretary HARRIMAN. The European recovery program is designed as a program for helping these people get on their feet and it will be of assistance.

Mr. LODGE. Mr. Secretary, may I ask you this question: I think we came to the conclusion that the final date in the Greek-Turkey bill has been a mistake, and I was wondering what you thought about carrying a time limit.

Secretary HARRIMAN. I think the more flexibility the administrative tive agency, in whom you have confidence, can have the better results you get from the dollars spent.

Mr. LODGE. In other words, you do not believe too strongly about putting in a limitation date?

Secretary HARRIMAN. I think that the greater flexibility that you feel within your responsibility you are able to give to the administrative agency the better. Of course, with the big annual appropriations the money has to be spent or it lapses, I presume.

Mr. LODGE. May I ask you this, Mr. Secretary, with respect to the shipping situation: Is there going to be any difficulty in transporting these items to the various countries?

Secretary HARRIMAN. The Public Committee report on that was clear. There will be increasing difficulties in the tanker situation and they recommend the encouragement of construction of tankers, and I personally think that we ought to go about building some tankers ourselves.

But on cargo vessels we have a large number laid up of the war-built fleet which can be broken out, even a small fraction of those laid up can be broken out to take care of the requirements, and in fact I think those that are in operation today are adequate to take care of the contemplated shipments.

Mr. LODGE. Do you think it would be appropriate to take some of these laid-up Liberty ships and transfer them to Italy in order for them to man these ships and thereby absorb some of their employees and reduce the cost of freight charges in connection with this aid program?

Secretary HARRIMAN. The committee made certain observations about transportation, which I think deserve a lot of consideration, namely, that these countries of Europe have shipbuilding programs today, which they need, and the committee felt, and in fact I think suggested, a reduction of that shipbuilding program and the transfer abroad of some of the Liberty-type ships which we have in such large numbers tied up, and that they then can divert their industries to more urgent needs.

I do believe that under those conditions our interest will be served by the transfer of more of the Liberty-type ships than have been transferred, and that it will not affect the position of our American merchant marine, which I very strongly favor protecting.

If we do not do this the European countries will have to build their own ships, which will be new, of special design for special trades, which will be far more competitive with their own shipping lines, and I do believe that we should have an aggressive program of maintaining our own merchant marine both for trade promotion and for defense, and that would involve the continued construction of new ships, a relatively small number of ships to be constructed, which will keep our shipyards going. I think we should have a Government policy to encourage the orderly current production of ships to the end that they get into the hands of ship operators, ships that are new, well adapted to the trade, because the ship operators are going to have newer and better designed ships and those are the ships we will have to compete with and they will have a competitive advantage.

Mr. LODGE. I am very happy to have that expression of your views. Secretary HARRIMAN. And I do believe that the recommendations of this committee should be given consideration by the Congress as well as consideration to the thought of making some of these Liberty ships available.

Mr. LODGE. I want to agree with you that I too believe that we should protect our merchant marine. I think you are entirely right, that insofar as we have surplus ships it would be far better to let them make use of them, because over here they are not worth more than

$10,000 to $50,000 as scrap, and such a transfer would enable them to make use of them in this particular program.

Secretary HARRIMAN. There is no great advantage in promoting the shipping business of carrying, for a few years, coal to Europe, a trade that we are not going to continue, and it does have in it the idea of increasing the cost, but at the same time may I again, because I want to be careful, say that I am strongly in favor of the maintenance of our liner service, of having a fair share of the world's trade.

Mr. LODGE. I agree with you.

Secretary HARRIMAN. And I have made that recommendation before, and I made the statement among the group there, and I was only quoted as being in favor of selling ships abroad without being quoted as favoring having American liners, and I want to be careful that I am not misunderstood.

Mr. LODGE. At the present time we are very short in liners, are we not?

Secretary HARRIMAN. I think in the liner trade we are in good shape; the tramp service is where we are getting the reduction. I think we have got our liner trade in pretty good shape. I do not have the figures before me, but in order to maintain the liner trade we have got to build new ships, currently, and year by year.

Mr. LODGE. I was under the impression that we were very short in

liners.

Secretary HARRIMAN. I am not talking about passenger ships; in the passenger ships we are very weak.

Mr. LODGE. That is what I was thinking of.

Secretary HARRIMAN. We are very weak, but having been in the shipping business, I use the word "liner" as cargo liners as against tramp vessels. But we are very weak on passenger ships and pasenger ships are essential to carry troops in time of war, and I do believe that we should, at the earliest practical moment, develop and build passenger ships; the sooner the better.

Mr. LODGE. If we do not, our merchant marine is going to be a weak link in our defense in the event of a national emergency.

Secretary HARRIMAN. We have ample laid ships, but we do not have ample high quality vessels; but we have got some good ships of the C type, which are being effectively used in the cargo-line trade. They are becoming outmoded as time goes on.

Mr. LODGE. I wish to ask you one more question: Is it your information that Italy has been receiving, under Public Law 84, the type of flour which she can best use both for bread and for pasta purposes? Secretary HARRIMAN. I do not know that that is true.

Mr. LODGE. I have heard it stated, and I want to verify it, that the type of wheat which we have been sending has not been the type of wheat they can use; apparently the type of wheat best adapted for that purpose is the South Dakota durum wheat, and they have been receiving Kansas wheat which is not suited for that purpose. I wonder if you have any comment to make on that.

Secretary HARRIMAN. I do not have the information available to give, whether most of the wheat that we are exporting is not of the type that is particularly good for macaroni, which the Italians use. Mr. LODGE. They want a certain type——