I do not think I can answer the question so accurately as how that compares with the rate that would be achieved during the first quarter of the 1948 calendar year under the proposed interim-aid bill. My impression is that the interim-aid bill would not, at least, for any great length of time, sustain a higher rate of export as that that would be sustained by the long-range program, but the latter would currently be below the average for this past year.

Dr. JUDD. That is reassuring, Mr. Secretary, to learn that the biggest hump probably will be in the next 4 months. After that it is likely to be at a somewhat lower rate, according to your estimate.

Mr. BISSELL. At least after the first year I would think it would be at a lower rate, sir. I think that you might possibly have this development, that we would have a kind of trough for exports in the first quarter of the next year, and that later in the year, after there is a substantially long-range program, the rate would be somewhat higher than the first quarter, but then certainly not as high as this year. And after the first 12 months, as I have indicated, it would then taper off gradually.

Dr. JUDD. Would your statement apply also to grain exports as well to the total over-all export picture?

Mr. BISSELL. I think that is a question that is hard to answer, because it depends so largely on what grains we have available for export from this country. I think it is the view of the Committee that grain exports will have to be about as large as our capabilities can support throughout the life of any long-range program.

It is also the view of the Committee that this country will not be able to support grain exports over the next fiscal year at the extreme high rate achieved in the past current year.

Dr. JUDD. Does the program contemplate a continuance at the extremely high rate achieved in the last year, assuming that the crops continue at approximately the same high average level of the last few years?

Mr. BISSELL. Well, the allowance made in calculating the cost of the program, which was for a substantially reduced grain export, except after the first year; but I think it is fair to say that in making such allowance for reduced exports the Committee does so because of the conviction that we could not safely and wisely sustain such a high rate, and also that we must keep in mind the requirements of the United States in any such program.

Dr. JUDD. It should be of some reassurance to the people of this country to feel that the Government, regardless of requirements of which we cannot overlook, does not contemplate increasing the exports of grain over the present high rate of exports.

Mr. BISSELL. I think that statement could be made.

Dr. JUDD. And also to the grain markets-and I am interested in preventing further increases in price of wheat-the assurance, or a tentative assurance of that policy, it should be helpful in the grain market, and I think it should be helpful on the farm, because it may prevent some farmers from holding their grain off the market in anticipation of getting still higher prices.

Chairman EATON. The time of the gentleman has expired.

Dr. JUDD. Could the Secretary complete his answer, Mr. Chairman?

Secretary HARRIMAN. May I just say one or two things in response to that question.

Chairman EATON. Yes.

Secretary HARRIMAN. I think we should recognize that as a result of this disastrous crop condition in Europe our present efforts to ship the maximum that we are shipping are very definitely to take care of that distressing situation, and it is for that reason that the President asked the people to cooperate in conservation programs during this period of time-it is definitely an emergency situation.

Now it is impossible to go further and look further ahead, because the crop conditions all over the world affect the situation.

Now just one more sentence on that: The Committee found there was a foreseeable situation in the world's food shortages and the policy of the Government should be directed to assisting in world food production, not only in Europe but elsewhere, in order to take care of the needs that happen to exist.

That is a very important conclusion I would think in terms of the interim policy of assuring our farmers that there will be good reasons for their production, that we have no surplus, also to assist other countries, whether they be South America, the Middle East, or the Far East in increasing their food production.

Chairman EATON. Mrs. Douglas.

Mrs. DOUGLAS. Mr. Secretary, in your report of the Commerce Department, and in the report of the Interior Department, and in its report made to the President by the Council of Economic Advisers, we are informed that the total export surplus is likely to be lower in the future than levels already reached. Nevertheless, each report recommends that steps be taken to check price rises in this country. Should we not in this special session as well as passing the interim relief bill, also take such action as is needed to check inflation?

Secretary HARRIMAN. Of course, the only steps that have been so far taken is the program of voluntary conservation. As you well know, one of the reasons for the President calling Congress was to consider ways and means of combating all of the inflationary problems in this country, and he will present to the Congress his views on that Monday, as I understand it, and until that time comes I would like to defer answering the question, until the President has presented the program. Mrs. DOUGLAS. We must keep the pipe lines open or people will starve in France, Italy, and Austria. That is why we have before us an interim program. We are buying an option on the Marshall plan so that we may have ample time in which to discuss it. We must never lose sight of the impact of such a program upon our own economy even though the exports contemplated in the interim program should not in themselves further effect price rises. Nevertheless anticipation of the larger Marshall plan will in itself affect prices. Should we not therefore take steps at this time to prevent further economic pressures?

Secretary HARRIMAN. Could I put it this way: That the interim program and the long-range program both are estimated to indicate a drain on our economy that will be less than what we have experienced in 1947. But during the year 1947 it has contributed-that has not been the only reason, of course-but it has contributed to inflationary pressures in this country, so that I think, although the drain abroad will be less than we have experienced, the situation is such that con

sideration of the sort you have indicated should be given by the Congress in dealing with inflationary pressures which exist in this country, from the unbalance of production and demand.

Mrs. DOUGLAS. Thank you, Mr. Secretary.

Chairman EATON. Mr. Fulton.

Mr. FULTON. Mr. Secretary, because a life in public service is often given without much expression of appreciation, I would like to say to you, and I think that I am correct in saying that I feel the Committee of which you have been a chairman has rendered a distinguished service both to the Congress and to the American people, and I want you to know that as a citizen I appreciate it.

Secretary HARRIMAN. Mr. Congressman, I appreciate that statement. I was chairman of and participated in the discussions, but as the letter to the President indicates, which you will see in this report, there were 19 men who served and they are the ones to whom your appreciation should be presented to, but I do appreciate it.

Mr. FULTON. They did a fine job. You had some very prominent businessmen of the country, both businessmen as well as economists, and did not feel that there should be a full program presented, and that it should not be on a niggardly basis; otherwise it would result in failure.

Secretary HARRIMAN. They stated that, on the one hand, it would be a mistake to appropriate too much; on the other hand, they pointed out recovery could not be achieved unless there was adequate support. The Committee, of course, included not only businessmen but representatives of labor and those who had spent their lives in agricultural problems, as well as economists and financial people.

Mr. FULTON. In view of some of the reported statements by Mr. Taft, I wanted to see especially what your prominent businessmen on the Committee thought.

Secretary HARRIMAN. Yes. This report, of course, was a unanimous report. And, of course, with 19 men of different backgrounds and points of view, there were very earnest and lengthy discussions. But rather than attempting to come to conclusions on the basis of the lowest common denominator, they stuck to it and compromised their individual opinions and came to a unanimous report, and this is an expression of the unanimous views of the Committee including the businessmen and the other groups.

Mr. FULTON. Let me ask you something about the report. There has been some criticism generally of the fact you did not limit the aid simply to countries which had what we might call straight free-enterprise governments; that aid might also go to governments that had socialistic principles, although they had free enterprise generally. Will you give your comments in answer to that outside criticism?

Secretary HARRIMAN. There is in the report a statement that we should follow the programs in those countries very carefully to satisfy ourselves that the proposals of action in the way of self-help and mutual help, which are included in the Paris report, are accomplished. That is, they felt, a very important aspect of administration. They pointed out, however, it was not our affair as to how these different countries which had free elective systems should carry out their production programs. The net effect of that is that we should not interfere in the free decisions of the people of the different countries in western Europe.

I will be glad to read what they said, but that is the substance of it. You will find it on page 05.

Mr. FULTON. You were then basing your report on the basis they had the freedoms and electoral privileges, rather than the kind of economic system they had?

Secretary HARRIMAN. That is correct.

Mr. FULTON. And you were distinguishing, then, as between not socialism and communism, but as between free governments and police governments?

Secretary HARRIMAN. That is correct. Unfortunately, the word "communism" has been taken away from its idealistic aspects and has come into the category of the police state.

Mr. JAVITS. Mr. Secretary, I would like to join my colleague, Mr. Fulton, in commending you and the committee which you head for the perfectly magnificent report, which will be extremely helpful to us and I know extremely helpful to the country and foreign nations that need that kind of elucidation so badly.

You spoke about food conservation. We understand or were given to understand that present food reserves were relatively low, and that we are probably faced with a long-term food shortage. Does that mean we must establish this voluntary food-conservation effort as a permanent thing, and the sooner we get at that the sooner we will be realistically grappling with the problems we are facing?

Secretary HARRIMAN. There has been some confusion in the public mind, I think, perhaps due to the fact the Food Committee jumped into a program which, under normal circumstances, should have been planned for 3 months, but there was not time to do that. The Emergency Food Citizens Committee is a short-term proposition, but it has been stated a number of times by Mr. Anderson and others that if we are to help Europe in their distress this winter and spring until the crops come in, we must carry through conservation into next

summer.

Mr. JAVITS. Do you not think it is only fair, at a time when you come in here to support a $600,000,000 interim-aid program and are very much alert to the dangers of inflationary pressures on our food prices, that we should couple that right now with a plan for permanent conservation and avowedly for that purpose?

Secretary HARRIMAN. May I beg the privilege of waiting until the President has presented his program to discuss that with you?

Mr. JAVITS. Do you believe the President will deal with that specific point in his message?

Secretary HARRIMAN. I must again beg permission to defer that until the President has spoken. I regret my position, because I would like very much to discuss these questions and interchange views with but I would like to ask that be deferred until after the President has presented his program to you.

you;

Mr. JAVITS. One other point: You mentioned, in response to Mr. Fulton's question, the desirability of not interfering with the political determinations of the countries definitely getting American aid. Does that mean it is contemplated by your Committee that we should or should not require these very same governments, regardless of their composition, to meet the production targets which they and we establish under the European recovery program, and the cooperation targets as between themselves?

Secretary HARRIMAN. The Committee has expressed itself that it feels we should follow the administration of the program; that we should watch the performance and see that real, earnest, and sincere efforts are made to reach those targets-both self-help and mutual help, production, financial help, and so forth-all of which are essential to recovery, and it is our intention to follow them closely. But the manner in which they carry it out is the sovereign responsibility of the people.

Mr. JAVTTS. Is it fair to say, therefore, although we won't endeavor to impose our views as to what kind of political government the country ought to have, we will insist it meet the economic targets?

Secretary HARRIMAN. Yes. The committee makes a distinction between meeting the targets and making sincere efforts to do it; because, with the best of intentions, sometimes for reasons beyond their control their production targets are not met. Sometimes they go over them. But, in principle, that is their view.

Mr. JAVITS. I make a distinction between what we have a right to demand and what we have not, but you join me in the principle? Secretary HARRIMAN. That is exactly right. You have expressed the principle as we understand it.

Mr. LODGE. Mr. Secretary, I would like to associate myself with the compliments accorded to you by my colleagues, and I would like to ask you if you feel that a system of partial price control can succeed or whether, on the other hand, if we approach the problem of price control, we should make it all-inclusive?

Secretary HARRIMAN. I am very anxious to discuss questions like that with you and other members of the committee. but I must really ask that I be given permission to wait until the President presents his point of view on these very pertinent questions which you and your colleagues have asked.

Mr. LODGE. Then may I ask you whether, in connection with the European end of this problem, you feel that once western Europe has achieved a degree of rehabilitation that the agricultural products from eastern Europe will come to match the capital goods from western Europe, and that therefore they will help each other despite the differences in their forms of government?

Secretary HARRIMAN. The Committee deals with that, and I am in agreement with the Committee that there will be trade between eastern and western Europe, in all probability; but it is questionable whether eastern Europe will throw off the amount of commerce so important to western Europe which she used to throw off in the prewar days. So that it is the view of the Committee that the estimates the Paris Conference made on getting quantities of goods from eastern Europe will not be as great, in all probability, as was estimated.

Mr. LODGE. Yet in spite of that fact, there will be a certain amount of barter trade?

Secretary HARRIMAN. There is the belief, which I share, that there will be surpluses which exist or develop which will be offered for trade on a reciprocal barter basis between eastern and western Europe. Mr. LODGE. May I ask, Are you satisfied with the provisions for petroleum, with respect to the export of petroleum products, that they will not in any way handicap the United States Navy?

Secretary HARRIMAN. Well, there is a shortage of petroleum that exists today, which has been aggravated by the shortage of tankers,