irrigation projects. There are things being done and going on there that were not here a year ago or 2 years ago, because of this program. There are 1,600 Americans out there representing what we think are the best impulses of this country to the end that people may be helped to help themselves, and they are helping themselves.

I would like to just circulate, as I talk here, a monthly report from one little nation down in Haiti. It tells about one little community where, in 1947, they had 317 desolate people in it. Because an American engineer saw the possibility of taking some water out of the river and draining some swamps, the whole little valley has been revolutionized and a community of 4,000 people, with several types of income they had in 1947, are living there, and their happiness is reflected there in just an ordinary monthly report that comes in daily to our desk from that particular thing.

This is small. It is chicken feed. It amounts to nothing, but it does hit, and is striking at, the small people where small people live. If I had the time the other day, I would like to have shown you some exhibits here on the simple matter of wool grading. Maybe that is not very large. It does not loom very big in this picture, but one man out in Ethiopia, a new and struggling country, through teaching the grading of wool-just the simple teaching of the grading of wool-increased the income 5 cents a pound on 1 million pounds of wool to a people who have an average income of approximately 10 cents a day. Those people know that this is a program that is helping them, and they know that America has a part in it.

If that is what we are buying with this program, that is what we are getting. If we want rousing hurrahs, waving of flags, or military defense, or something like that, we are not getting it, because this stuff is way below the government. It is working with the people and at the people. It is small stuff in the great total picture.

If I could take you along and let you see the villages where malaria is gone on the Caspian Sea for 4,000 years, malaria was 100 percent incidence in the villages there. In 1 year of combined effortnot ours, but combined effort with the people-we have cut that incidence to less than 20 percent.

In agricultural areas where malaria has been wiped out. Industrial plants where trachoma has been knocked out showed increased production anywhere from 15 to 40 percent as a direct result of the combined efforts of these peoples. The only thing I am saying is that we are working out here with the people with a program that is a permanent part of our foreign policy, to help people to help themselves. We may be falling down in our administration of it. We may not be doing a good job, and we have made every mistake, I guess, that can be in the book, but this is a program which the people of the United States are supporting. It is a program which the little people of the world are taking a part in.

That is the only thing I wanted to say. I just felt I must say that, because we are dealing with fundamentals, and we are not dealing with high pressure or anything else, we are dealing with the simplest thing on earth, among the smallest people on earth.

There are 650 million people in the 35 countries we are working in today.

Mr. WOOD. Mr. Chairman, as Mr. Andrews said, there have been mistakes made, but it is a growing operation, and we are learning

from those mistakes. Some very real achievements are developing

in this program.

Now, if we may go on to the next item, which is the dependent overseas territories request, totaling $25 million.

Dr. FitzGerald is our witness on that subject.

Mr. FULTON. Could I ask for some material to be presented, since I have to leave: I noticed on the materials program that we are continuing the development of zinc exploration and facilities.

With the changed condition in the zinc market, where zinc is in great excess, with the market breaking so badly that they want to have limitations on zinc imports, and with the people in the zinc business wanting price supports to keep up the support of zinc because of oversupply, why should we, under this program, not realize the current situation on zinc in the world and cease putting further money in this program for zinc?

Mr. WOOD. Mr. Fulton, Dr. FitzGerald, I am sure, can speak in more detail on this thing.

Mr. FULTON. I do not want it right here, but I would like that for the record.

Mr. WOOD. Before you leave, I would like to comment on the fact that we are dealing here with a problem which is long-term as well as short-term.

You no doubt read summaries of the Paley report which was gotten out last year. All authorities on the subject agree that the problem of raw materials in the world for the next decade and beyond that is one that ought to be most seriously considered from the standpoint of necessary supplies for the United States.

There is no question that from time to time, as in zinc, or in jute, we may run into periods of some oversupply, and all I would like to urge you, sir, is to consider not only the immediate problem of the present in some of these things, but the longer-range future where all the indications are that the problem of getting adequate supplies of the basic materials of this world for the United States, particularly, with the tremendous capabilities for growth and consumption of raw materials, is something that must not be forgotten or lost sight of.

If you shift around rapidly, due to temporary conditions, you will never get the long-term development upon which we are likely to be so dependent. You do not develop new sources of supply by rushing in at the time those supplies are short, and then cutting off and doing nothing about it when a temporary increase and possible surplus arises. The problem is to try to adjust the short-term and the long-term to a reasonable development over a period of years.

I am not familiar, in detail, with the zinc situation. I do know there is presently an oversupply of zinc. Dr. FitzGerald may be able to give you some figures on the longer-range demand-supply position.

Your point is well taken, but we cannot look entirely at the shortrange aspects of this and forget the longer-range ones.

(The following information has been supplied :)

THE BASIC MATERIALS PROGRAM FOR FISCAL YEAR 1954 AND ZINC PRODUCTION

In connection with the basic materials program for fiscal year 1954, MSA has submitted an illustrative list of projects totaling $50 million, consisting of projects which, on the basis of information available today, MSA would select as most likely to qualify for MSA financing in fiscal year 1954. No project providing direct

ly for increased zinc production is included in this illustrative list. Illustrative projects, that MSA would be likely to undertake in fiscal year 1954, to increase minerals production directly are confined to a major project to increase iron ore production in the Philippines, primarily to increase availabilities in the Asian-Pacific area where it is important to relieve the situation created by Japan's former dependence on supplies from Communist dominated areas; to small projects in the Far East to increase production of manganese, chrome and coking coal; and to a substantial project to increase coal production in Southern Rhodesia in order to develop an essential energy supply required to expand production of copper, cobalt, chrome and asbestos, located for the most part in Northern Rhodesia.

Two of the projects included in the illustrative list of basic materials projects may contribute to an expansion of zinc production several years from now. A project to improve the Port of Nemours in French North Africa is needed to develop phosphate and agricultural exports, as well as to improve access to mineral areas in French North Africa. Zinc is one of the minerals in this area. A relatively small program for engineering work to develop access roads to mineral territories in Thailand will give access to zinc deposits, as well as to strategic tin and tungsten mines. If further study should reveal that either of these projects was likely to result in an immediate and significant expansion of zine production, some other project would be substituted.

Most of the basic materials projects included on the illustrative list are to provide ancillary facilities, such as ports, transportation facilities and electric power which will make it possible to open up new sources of mineral supplies. One of these port projects has already been mentioned, the Port of Nemours. A larger project, for which preparatory work is well advanced, involves the rehabilitation of Lake Victoria ports which is needed to improve the transport system for the whole Central African region and to increase the capacity of the system to handle copper, tin, tungsten, columbite and other mineral products. A rail project, the Sinoia-Kafue cutoff, and the Kafue hydroelectric project are intended to facilitate the increased production of copper and cobalt. Programs for power and transport facilities in French West Africa and French Equatorial Africa are for the increased production of bauxite and of manganese. A transport project in India is designed primarily to facilitate increased movement of coal and iron ore in the trade between India and Japan.

In addition to the illustrative list of basic-materials projects totaling $50 million, MSA submitted a supplemental list of further projects to be explored totaling $96.3 million. Included in this list are two projects which would result directly in an increase of zinc production if they were undertaken. They will not be undertaken in fiscal year 1954, unless there is a radical shift in supply conditions.

Both the mine projects in Germany and Austria, and a hydroelectric development in Tunisia that would permit expanded production of zine, as well as of other metals, were developed during a period when zine was in critically short supply. However, all three projects were deliberately excluded from the illustrative lists of $50 million of basic-materials projects for fiscal year 1954 because there seems to be no immediate need to increase zine production.

However, it should be realized that zinc will probably again be in critically short supply, unless new facilities continue to be developed during the rest of this decade. Therefore, MSA intends to watch conditions and to encourage the building up of a reserve list of projects which might be undertaken at some later time but before the prospective shortage of zinc becomes acute.

MSA's studies indicate that while zinc production has been sufficiently stimulated over the last few years to supply current needs and while some further expansion may be expected on the basis of work already under way, there may be an acute shortage in the 1960's unless new areas are opened up soon. While zinc requirements of the United States and of the rest of the free world are expected to go on growing from year to year, United States mine production of zine is likely to reach a peak and to decline significantly in the foreseeable future. While new mines are hardly needed today, it will probably bee desirable within the next few years to open up new territories containing zinc. In underdeveloped areas the first requirement is likely to be the provision of transportation and power facilities in order that actual mine production may increase some time later.

Mr. FULTON. One of my points, of course, raises the question of whether this current security program is the right vehicle for such development.

The second point is that if this is not the right vehicle, then is it not possible to do these projects under the International Bank for Reconstruction and Development, on a long-range basis.

The next point is this, that where there is not enough money to go around, and the battle of the budget is on in full swing, we, in this Congress, then, should look at the very strategic urgencies, and set aside the ones for future development that cannot be done now, because they cannot all be done at once.

Therefore, my problem here is, when I ask a city of Pittsburgh's size to contribute $1,250,000,000 to the Federal Government, and I am its representative on the Foreign Affairs Committee, I want to look over every one of these items, to see what can be put off to another year, on the basis that it is not now needed, when the budget is so tight.

That brings me to the point where I must balance among the various United States strategic urgencies. I see the United States airplane program being cut by $5 billion, and then I see, on the other hand, aid for zinc expansion in the current fiscal year, with zinc just coming out of our ears. The great problem is what to do with the zinc surplus we already have. Then I find that we are going ahead to invest money to find more zinc and flood the world markets further-it does raise a question.

In addition, when I came back from Germany and found in West Germany a boom that many of our areas in the United States would be delighted to have, and then find we are putting in, for free, further manufacturing facilities for them-for example, aluminum. In my area, where I represent the Aluminum Company of America, we are going to pay taxes for it. I do not think we are using good business judgment.

Mr. Wood. I know of no such plan for Germany. (Discussion off the record.)

STATEMENT OF HON. D. A. FITZGERALD, DEPUTY TO THE

DIRECTOR FOR MUTUAL SECURITY

Mr. FITZGERALD. There is a proposal in the basic materials program. Mr. WOOD. I thought you meant in the regular German program. Mr. FULTON. We are developing through the Aluminum Co. of America a tremendous aluminum plant in northwestern Canada that will be safe from any attacks by Russia or safe from bombing because it will be under mountains. This is private expansion.

The question with me is this: When you have Government expansion program on materials that, in part, has been based on World War II, clearly this program of expansion should be brought up to date in the light of current conditions, regardless of the fact that we have an implied commitment. The reason for my saying that is this: There was an implied commitment that we would build defense plants for World War II, but when it was over, and the need was not there, they were quickly cut back, which hurt many local communities. I would apply the same rules for a decision to this particular program as I would to the straight military program and as I did to the program we had in operation in World War II. Some of us are going to have to cut this budget, because I cannot keep on telling our people that we are laying out all this money for eveything in Timbuktu, when I cannot show

programs to be directly connected with the security of this fine country of ours.

When you say there are these materials in surplus, and a continuing surplus within the foreseeable future so that the market has broken, then I cannot see the justification for them in a national security program, which this bill is.

Mr. WOOD. May I point out, Mr. Fulton, that the new administration has, to the full extent it could, applied exactly this criterion to this program and has cut it down very substantially from what was originally planned. Only last week, you will recall, it discovered further savings of deferrable items amounting to some $404 million. Now, I would be the last to claim that any human being can do this sort of a job perfectly, or that those Members of Congress who are on these committees should not scrutinize every item in the programs, just as you are doing, quite properly and with great value to all concerned.

I do want to point out that the amount of the request for foreign aid this year is the product of a very rigid screening process. It has been very substantially cut as compared to the program originally planned.

Mr. FULTON. The problem is to get enough votes to support the program on the floor. Some of us have been trying hard to find a reasonable basis upon which to support the Mutual Security Program. Unless these items are screened down so that we can say, "None of this is postponable out of this fiscal year," some of us will not be able to support the program.

As you know, I am one of the independents in Congress who make up their own minds and I have frequently put amendments in to cut parts of the foreign-aid program, but in general I have supported the basic principles of the program almost entirely.

If we lose that group of us who are ordinarily for the foreign-aid bill, and if we feel there are things in it which could be postponedas it appears to me would be the case today-then I will not be up here arguing for the program.

Mr. WOOD. I hope if you cannot be here this afternoon, that you will find an opportunity to read the record on these items which Dr. FitzGerald is about to give testimony on.

Mr. FULTON. I would rather have it screened some time as to items of development which could either go into the International Bank for Reconstruction and Development on a long-term basis, and secondly on materials of basic security need which might even within this program be postponed for 1 or 2 or 3 years without too much damage to our security. This criterion would distinguish between basic longtime requirements and immediate urgency needs.

Mr. WOOD. May I suggest, Mr. Fulton, that in the case of both those points, this administration has asked exactly those questions. There is nothing in this program so far as we can make it so, which could be financed and is likely to be financed by the International Bank, the Export-Import Bank or private capital, or which could properly be postponed.

Maybe your judgment in this regard will be different from the judgment of those who carefully and for a long period of time, day and night, tried to answer those questions and tried to screen the program on just that sort of a basis. I did not want you to feel that those questions had not been asked, and asked in a very hard-boiled