a very desirable purpose in getting together and submitting to us the long-range program, whereas this is a matter pertaining primarily to these countries. I do not see the necessity for bringing the 16 into this consideration of a purely stopgap matter, despite the great desirability of having them function as they are going to function on the long-range plan.

Secretary MARSHALL. I am inclined to agree with you, sir.

Dr. JUDD. Mr. Secretary, I notice that this is a bill "to promote the general welfare, national interest, and foreign policy of the United States." I assume, therefore, that it is your opinion that if part or all of western Europe were to come under the control of the Communist Parties there in some such way as eastern Europe has been taken over by the Communist Parties in those countries, that would be against the "general welfare, the national interest, and the foreign policy of the United States"; is that correct?

Secretary MARSHALL. That is a pretty large question, the way that you have expressed it. If Europe had been taken over, as you indicated, by the Communist Party, we would not have very much basis for negotiation or discussion.

Dr. JUDD. My question was not if it had been, but if it were to be taken over, in whole or in part. Is it true or not true that this bill is designed to prevent that happening in western Europe, because if it were to happen in western Europe it would be considered against the interests, foreign policy, and general welfare of the United States?

Secretary MARSHALL. Our interest is to maintain peaceful stability and freedom of action by peoples, and we feel that unless we do something like that, freedom of action and stability will vanish and therefore it is highly important we take the action that has been recommended.

Now, going more directly to the phase of your question which has to do with ideologies, our foreign policy is based on certainly the approval of a world in which there is a free choice in Government rather than a dictatorial autocratic or police power of government. We feel in this present situation we should do everything we can to help those nations that favor freedom of action of government and have been the proponents of that in the history of the world, even before our time. Does that answer the question?

Dr. JUDD. Yes; and I agree with the answer.

I would like to ask you this question: Is it your opinion that if China or even if north China and Manchuria were to come under the control of the Chinese Communist Party, it would be contrary to the general welfare, national interest, and foreign policy of the United States?

Secretary MARSHALL. That is my thought.

Dr. JUDD. Well then, do you think the program that I understand from the papers you proposed to the Senate committee yesterday, is adequate to prevent north China and Manchuria from being taken over by the Communist Party?

Secretary MARSHALL. Were you in the room when I answered a similar question?

Dr. JUDD. No; that is why I wanted it for the record here.
Secretary MARSHALL. I will try to repeat myself.

Dr. JUDD. All I had was the newspaper reports.

Secretary MARSHALL. I made a lengthy statement before the committee this morning. I will endeavor to repeat it.

The situation in China is quite a different one from that in the western portions of Europe. We are in western Europe confronted by governments that have been going along without extreme inflation, and under the necessity of importing a great deal in the way of food by the very conditions of their industrial and other set-ups.

Now, they are faced with a situation where they will be unable to pay for imports necessary to maintain the ordinary standards of living. Up until the end of this period, March 31, 1948, that means a termination of, or a great deterioration in, the existing situation.

On the other hand, when you turn to the Chinese phase of the matter you have quite evident to all of us, and particularly to those who have seen it, a chaotic situation and one of extraordinary inflation. Also, a very unhappy people. But they are not threatened with a change at the present time in their import procedure. They have resources to continue that for quite some months, so it is not one of emergency of action before March 31, 1948.

On the other hand, it is very decidedly one where we have found the greatest difficulty in trying to calculate a course where money could be appropriated with, as I put it, a 70 percent probability of effective use in the situation.

Now, that is what we have been trying to develop. We could notand I add this to what I said earlier this morning-find through the ordinary agencies, the Export-Import Bank, any basis for getting ahead with certain enterprises in China which we thought would be helpful, so it is going to be necessary to turn to Congress for action on its part. What we have in mind, very briefly, is in relation to their import program from overseas outside of China, to see what can be done toward a stay of execution in the deterioration of their monetary situation so as to give them a chance, with reasonable action on their part, and very energetic action on their part, to take some measures toward restoring the financial situation.

Now, other moves come in after such action has been taken.

To repeat what I said in the first place, the character of the emergency we are dealing with is quite different as between the European situation and the Chinese situation. One is an immediate, almost cessation of the power to purchase what they have to have for the living of their people; on the other hand, China, under its present importing procedure and its present resources is able to go along to that extent in the way it has been going.

Dr. JUDD. I again agree thoroughly with the Secretary's statement, that the problem in China is not primarily economic. I think the Secretary will agree the problem in China is primarily military.

Does the Secretary think such a proposal as he outlined to the Senate yesterday is adequate to resolve the situation in China, or even to stay further deterioration, as long as the military situation continues to deteriorate? Are there any economic and financial measures we can take which give any hope of remedying that situation until the enormous military drains are reduced?

Secretary MARSHALL. Certainly it is extraordinarily difficult to find anything that will benefit the situation until this extra drain of 70 to 80 percent of the budget for the military effort is reduced. That, of

course, is the destructive factor in the situation, and the problem is how to deal with that.

Dr. JUDD. Yes.

Secretary MARSHALL. What the eventualities will be in connection with that is a very special thing.

Dr. JUDD. What I would like to know is whether the Secretary's proposal, which he said in his statement to the joint committee that he was preparing for early submission, will contain any suggestions as to remedying that which certainly is the root of the problem in China.

Secretary MARSHALL. It probably will not. That will have to be something else.

Dr. JUDD. Are we justified in appropriating the taxpayers' money as a palliative if we are not prepared to attack the real causes.

Secretary MARSHALL. You have stated very well the reason why we could not have proposals in last May and June. We have been searching, as I stated in my previous statement this morning, with almost complete unanimity for some way to help, but that is a very difficult thing to determine, and most of the solutions that I have seen are quite impractical.

Dr. JUDD. Last spring the President at the time he brought in the message on the Greek-Turkish aid bill, said—

I believe it must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures

Some of us asked Mr. Acheson when he was before us whether he thought that applied to the Chinese situation, and he said—

The Chinese Government is not in the position at the present time that the Greek Government is in. It is not approaching collapse; it is not threatened with defeat by the Communists. The war with the Communist is going on much as it bas for the last 20 years.

Is it your opinion that his description of the situation, as given to us last spring, is still accurate?

Secretary MARSHALL. No; I do not think it is. There has been a great deterioration.

Dr. JUDD. If we gave military assistance to the Greeks when they were threatened with subjugation, and the situation in China now approaches that which Greece then had, is there under consideration any proposal for giving military assistance to the Chinese Government similar to that we gave to the Greek Government?

Secretary MARSHALL. We sent 40 officers to Greece with a few men to assist them

Dr. JUDD. We also sent a great deal of ammunition and war material.

Secretary MARSHALL. Will you let me finish my statement, sir? We sent 40 officers to Greece with a few men to help with the ordinary administrative procedure. We also sent certain material to Greece. I do not know the total value of that.

We have in China now some hundreds of officers with the Chinese Army, to assist the Chinese Government in their military organization and in their procedure. I do not know what the total of that military group is, but it approaches 1,000.

Dr. JUDD. Yes.

Secretary MARSHALL. And they have been working very hard, and we have recently authorized them to go ahead with a provisional training center in Formosa. Also, there has been a great deal in the way of material turned over to China. The present issues that we are talking about, ammunition, which was mentioned by you, is another matter that is being handled, and that has been under careful consideration by the State Department and the Army.

Dr. Judd, the difficulties there go far beyond military equipment. I think you are aware of that.

Dr. JUDD. Yes; I am. But those difficulties to which you refer, I think, cannot be resolved without also some military equipment. That is one of the parts of the solution.

May I ask, will the detailed proposal that the Secretary says is under preparation for early submission be submitted in all probability before the Secretary leaves for the Council of Foreign Ministers' meeting?

Secretary MARSHALL. I could not answer that right now, sir. I do not think it will be, sir, but it will be submitted by the time the Congress reconvenes, or earlier.

Dr. JUDD. Reconvenes in January?

Secretary MARSHALL. In the regular session; yes.

Dr. JUDD. Do I understand that with respect to the situation in China there are also two sorts of proposals, an interim proposal to meet the immediate emergencies, financial and otherwise, and also a China-recovery program comparable to the European recovery program?

Secretary MARSHALL. I would not like to discuss that until I have an approved program by the administration to come in here with. All I would be doing would be to tie my hands one way or the other without complete consideration of the factors involved. I can assure you we want to, and I can assure you it is a very difficult thing to do.

Dr. JUDD. I left China a week ago this morning, and while I was there a good many thoughtful and eminent Chinese asked me questions which I had difficulty in answering. They are going through a process of reevaluation of their position just as we are, a reexamination of who are their friends and otherwise.

The question usually came up in such form as this: If the United States takes such a position with respect to European nations which are threatened by Communist minorities and does not take such a position with respect to China when it is threatened by a Communist ninority, why-and these are the five questions:

First, is it because the Chinese are of a different color than the Europeans?

That is the first time that I have heard that raised in China, and it is alarming. Is it a race matter?

Second, is it because the Americans still believe that the Communists in China are not Communists, but just agrarian reformers and patriotic peasants and are not connected in any way with Russia as are the European Communists?

Third, is it because the people of the United States, or its Government, think what happens in China is not as important to it in the long run as what happens in Europe?

Fourth, is it because the people of the United States and its Government do not think the present situation in China is as critical as the situation in western Europe?

Lastly, is it because the Government of China has failed in any way, shape, or form to carry out any commitments it has made to the United States Government, either during or since the war?

I think it is very important that we make clear what our reasons are, or at least which of those it is not. I tried to do that as an individual, but I would like some reinforcement from our Government. For example, flat reassurance that it is not the racial reason.

Secretary MARSHALL. I do not think we would have to try to do that; that would be a rather unusual development. That is one of the propaganda items, and I might mention, Dr. Judd, that if we took up the propaganda matters we would just be turning out that business and abandon all other things.

Dr. JUDD. That is right.

Secretary MARSHALL. There has been no diminution of the thought that stability in China is of great importance to the United States as well as to the world, because it is a very disturbing factor in the world today to have any country in the present condition that exists in China. There is no question about that whatsoever. The opinion is very vigorous on the subject; it all goes back to how and what you can do unless the Chinese Government itself does a great many things.

Now, the people of China have been very critical of their own government. I have been very frank about it. That imposed some very serious difficulties in our approach to the situation. It is one of the most complicated that I have ever seen. And on the occasion of my going to China a great many persons promised me failure before I ever got out there and I did my best to keep pessimism out; I do not know how successful I was, but a great deal has to be done to make it possible for us to do much here; I will grant that.

Dr. JUDD. We have repeatedly told the Chinese Government that unless they do so and so we will not help them. Have we told them that if they do so and so we will help them, with their cooperation? Secretary MARSHALL. I think in effect, yes; certainly I have said that directly.

Dr. JUDD. It is very difficult for the responsible political leaders in that country to throw away the support they have unless they are sure they will get our support in its place. It is very important that we make it clear that if they do meet certain conditions we will certainly come in and help.

I know the difficulties under our form of government in making firm commitments, but how can we expect assurances from the Chinese Government as to what it will do until we give assurances of what we will do.

Secretary MARSHALL. Dr. Judd, I do not wish to get into a discussion of the Chinese Government here in this hearing.

Dr. JUDD. No, and I do not want you to either, but I feel that the situation with respect not only to China but with respect to Korea— Mr. BLOOM (interposing). Mr. Chairman, I object to questions with respect to China as not having any bearing on the legislation before The Secretary has indicated he does not want to get into a con

us.