Mr. STASSEN. Here you have everything that goes out of the United States that has to be counterbalanced in some way. The orange is the physical goods. It is approximately $16 billion in 1952. Tobacco, wheat, meat, and agriculture commodities, $2.9 billion. Cotton, and so forth, $1.9 billion. Chemicals and medicines, $800 million; metals and minerals, $2.8 billion; miscellaneous (including adjustments), $2.6 billion; and machinery and vehicles, $5.1 billion. The last two categories include defense items.

Here are the physical items that came back in. $11.5 billion, Cotton, sugar, rubber, fish, and agricultural products, $4.5 billion. Wool, hemp, textiles, fibers, $2.4 billion. Chemicals and medicines, $244 million; metals and minerals, $3 billion-that is your big raw material question-machinery and vehicles, $354 million; and miscellaneous, including adjustments, $1.1 billion.

We send out due bills for the earnings on our capital investments and they have to be met-$1.9 billion.

We issued certificates of ownership for reserves in dollar profits invested in the United States by overseas nationals or governments of $1.6 billion, and in the United States we furnished dollar services to foreign citizens and governments of $2.9 billion. Those things have to be met.

Here is how the thing was balanced out: They sent us due bills here for foreign capital over here-$421 million.

Ownership of increased foreign assets by United States private capital. The increase in overseas investment during the year-$896 million. T. Y. R.'s are "thank-you receipts." Those are for private remittances. Those are people sending money there, to relatives overseas, and so forth-$415 million.

Here are dollar services to United States citizens and governments that were performed abroad. That is services to our tourists, services to our armed services, or anything done overseas for a United States national or a United States Government agency that earned dollars overseas. It is 3.8.

They sent us I. O. U.'s and thank-you receipts from United States. loans and grants in the amount of 5.1, and they had to send us $378 million in gold to balance out for the year.

We are building the fiscal year 1954 program on the basis that this will about be the picture in this next fiscal year. We have to study these policies carefully before we can improve them from a trade or foreign capital investment standpoint, but if you step back in these areas, you put an extra squeeze on our Mutual Security Program that will be serious.

Mr. ROOSEVELT. Can we have copies of that chart?

Mr. STASSEN. If you wish.

Mr. VORYS. I complained about not having some stuff in this document today but at page 67 in this document we have the balance of payment figures in general.

Mr. ROOSEVELT. I haven't had a chance to study that yet.

Mr. STASSEN. There is a lot of basic data in that book that just came up to you.

Mr. FULTON. Is that fiscal year or calendar year?

Mr. STASSEN. That is calendar year 1952.

Mrs. KELLY. Could I have my one question now?
Chairman CHIPERFIELD. Yes, indeed.

Mrs. KELLY. Governor, could you tell us to what degree this new program will close this dollar gap?

Mr. STASSEN. We feel that it will supply the balance-of-payments necessary, on a restricted basis, for fiscal year 1954. In other words, no European countries will be able to expand their imports from us but if they keep them at about this level, we will be able to have a reasonably satisfactory transitional year in 1954.

Mrs. KELLY. You mean you will not have a decrease in that $4.5 billion gap?

Mr. STASSEN. No.

Mrs. KELLY. Not at all if this goes through as is?

Mr. STASSEN. We will fill it by off-shore procurement being stepped up, and by a lease agreement on economic aid, and by the overall relations to the rest of the world that are involved in our Mutual Security Program.

Mrs. KELLY. Could you roughly estimate how much you expect to bring that down to?

Mr. STASSEN. Do you mean by off-shore procurement?

Mrs. KELLY. This whole program, in reducing the dollar gap. Will it be down to $2 billion?

Mr. STASSEN. We will not get it down that far in a year; no.

Mr. SMITH. Mr. Dulles said this morning that it did not affect the dollar-gap legislation at all.

Mr. STASSEN. We have built the 1954 Mutual Security Program on a basis of holding steady, while you improve the internal economic picture in the European countries.

Mr. JUDD. I understood that this would not reduce the dollar gap. What you are doing is just filling the dollar gap.

Mr. STASSEN. That is right.

Chairman CHIPERFIELD. We will have to proceed in order, if you do not mind.

Mrs. Church.

Mrs. CHURCH. Thank you, Mr. Chairman. I will try to be brief. Governor, do you think that any amount of aid that we give or any amount of meeting the gap with offshore procurement will suffice to reduce that dollar gap or eliminate it, unless there is action taken within the countries abroad to set their own houses in order..

Mr. STASSEN. It takes action there in those countries and action here, both.

Mrs. CHURCH. Are we making an effort to get some such action? Mr. STASSEN. Yes.

For example, at the OEEC meeting in March, they took steps which helped the flow of goods between each other. That should reflect itself into a better production picture and a better situation. The European coal and steel community, I feel, will be a significant step. In other words, here was one of the first real integrations of an economic nature of a group of European countries. They brought these 6 nations together with a gross steel production of over 40 million tons. If they make progress along those lines, it will help the European picture in relationship to the rest of the world.

Mrs. CHURCH. Going into another field, Mr. Chairman, I would like to ask the Governor how soon he thinks the Congress may expect the plan to reorganize the State Department and the mutual assistance

department. Is there not a plan under way which is going to be sent down to the Congress?

Mr. STASSEN. There has been extensive study of it.

Mrs. CHURCH. You do not know when a report will be ready for the President to send down to the Congress?

Mr. STASSEN. No; I do not. I think it might be quite soon.

Mrs. CHURCH. Is there anything within the provisions of this bill which might possibly be affected by reorganization?

Mr. STASSEN. No; it will fit in.

Mrs. CHURCH. Would the provisions necessitate any change in administrative expense?

Mr. STASSEN. I think you will find a footnote here, footnote 2 and footnote 3, and footnote 6. [Reading:]

These amounts will be transferred to the new information agency if and when— this is on page 12 of your basic data book. You will find footnote 6

These amounts to be transfered to the new information agency if and when the adoption of a new reorganization plan or the passage of legislation creates such agency and vests in it the functions represented by those amounts.

Mrs. CHURCH. Thank you, very much.
Chairman CHIPERFIELD. Mrs. Kelly.

Mrs. KELLY. Governor, you had a tentative program when you went to the NATO conference. Is this the same program or did you have to alter it very much due to your findings in Europe?

Mr. STASSEN. We had a tentative program when we went to the NATO conference. We modified it some during the NATO conference.

Mrs. KELLY. Did you suggest General Ridgway's approval of this at this time or does that come under the military discussion?

Mr. STASSEN. General Ridgway will be personally over here to testify before you. We did confer with him and with other American military people, as well as with the representatives of other countries.

Mrs. KELLY. In past years we so strongly stood for General Eisenhower's recommendations, and I wondered if this was based on the recommendations of his successor.

Mr. STASSEN. I think that you will find that he does approve of the present shaping and forward movement of the program, and of the long-term approach.

Mr. JUDD. Will the gentlewoman yield for just one question?
Mrs. KELLY. Yes.

Mr. JUDD. When you modified them at the NATO meeting, did you modify them up or down?

Mr. STASSEN. Some countries up and some countries down. That is literally true.

Mr. JUDD. Net?

Mr. STASSEN. I think the net was a little bit up.

Mr. JUDD. Thank you.

Mrs. KELLY. Is there anything in this bill for Yugoslavia?

(Discussion off the record.)

Mrs. KELLY. Is that military equipment, end items, or what?

Mr. STASSEN. That is support for their economy. The defense support, economic and everything combined.

Mr. FULTON. Will you yield, please?

Mrs. KELLY. I will yield.

Mr. FULTON. Are there any more jet planes this year in this program for Yugoslavia?

Mr. STASSEN. That is a military detail that I am not familiar with at the present.

Mrs. KELLY. Is that included in "special weapons" by any chance? Mr. STASSEN. Oh, no. It has nothing to do with special weapons. Mrs. KELLY. I want to find out whether it is.

(Discussion off the record.)

Mrs. KELLY. On page 5 of your statement yesterday there is $100 million for exports of wheat, cotton, and so forth.

Is that coming out of our surplus agricultural stock for England? Surplus supplies?

Mr. STASSEN. Yes; it comes out of items of which we have an oversupply. It relates to their purchases with dollars so that it helps their own budget and balance-of-payments picture, but at the same time it draws upon those supplies which we can best afford to send to them.

It is a combination. It is an attempt to combine the United States policies and relate them to the problems of the United Kingdom, so that you get the maximum benefit for them with a minimum net cost to the United States.

Mr. JUDD. But it is not charged up to agriculture. It is charged up to foreign aid.

Mr. FULTON. Would you yield, again?

Mrs. KELLY. I yield.

Mr. FULTON. Would you give us a summary of the use of agricultural surpluses in this program, so that we have it separated off as to how much is being used of the United States agricultural surplus?

Mr. STASSEN. We can summarize how much is purchased out of these appropriations that would otherwise be surplus, if that is what you

mean.

In other words, when is a surplus a surplus? If a country needs wheat and buys it, is that entirely considered a surplus question, or is it a part of the normal wheat movement?

Mr. FULTON. Then, could you do this: Could you, on commodities that have a surplus supply in this country, give us what amounts there will be in this program?

Mr. STASSEN. Yes; we can do that.

(The information requested is as follows:)

Mutual defense financing of surplus agricultural commodities from the United States, July 1, 1952, to May 6, 1953

NOTE. It is expected that the mutual defense financed program for fiscal year 1954 will comprise about the same list of surplus agricultural commodities as those shown above with variations in quantities of individual commodities.

Chairman CHIPERFIELD. Mr. Adair

Mr. ADAIR. Thank you, Mr. Chairman.

Governor, to change the line of questioning very slightly, yesterday in your statement you made a remark-and I do not have the copy here that the taxpayers in France and the United Kingdom are still paying more than the taxpayers in this country. I am now thinking of the costs of this program to the taxpayers of our country.

Could you amplify that statement a little? Do you mean per capita? What was the basis for that statement?

Mr. STASSEN. The basis is that an unskilled worker or a skilled worker or an executive in those two countries will pay out of his income in taxes of all kinds slightly more than the same kind of an unskilled worker, skilled worker or executive in this country would pay in total taxes.

Mr. ADAIR. What do you mean by slightly? Five percent or ten percent? Could you give us an estimate?

Mr. STASSEN. For the unskilled worker our rough estimate is that the United Kingdom worker pays out about 10 percent more of his income in overall taxes, and the French worker pays out about 25 percent more of his income than in the United States.

For the skilled worker the United Kingdom worker pays out 2 percent more, and the French worker pays out about 15 percent more of his income in overall taxes.

For the corporate executive, the United Kingdom executive pays out 23 percent more of his income; the French executive pays out 9 percent

more.

Mr. ROOSEVELT. Will the gentleman yield at that point?

Mr. ADAIR. I yield.

Mr. ROOSEVELT. This is based on if they paid their taxes. Is this based on the tax laws on the books or what they actually pay? Mr. ADAIR. You have anticipated my question.

Mr. ROOSEVELT. This is a perennial question before the committee. Mr. STASSEN. It is based on the actual collections for the average individual in these classifications. It, of course, cannot go into the