matter of whether a certain individual completely evades his taxes, but it does take into account the fact that if some of them evaded their taxes, then the rest of the members of their particular group had to pay a little more than would show on an average basis.

Mr. ADAIR. And the figures for the United Kingdom would be before the reported tax reduction had been taken into account, I assume? Mr. STASSEN. No; these figures are after the reduction. The tax reduction, as we calculate it, will mean a reduction of about 4 percent of their taxes.

Mr. ADAIR. Across the board?

Mr. STASSEN. That is right, an average. It is a small slice of 4 percent off of their taxes to take effect in the United Kingdom.

Mr. JUDD. But is this not another case where figures do not tell the true story? While they pay more money into their government in taxes, they are getting enormously greater amounts back in rent and food subsidies and all sorts of social services from the government. So not what they pay to the government, but their net tax, is the figure that would be significant.

Mr. VORYS. That is pretty well spelled out in this table.

Mr. STASSEN. On page 64 we show how much is for central government, exclusive of social insurance, and how much is for social insurIn other words, you are correct that there is a difference, but it is not a difference sufficient to account for this amount.

ance.

Mr. JUDD. We had this same discussion on the British program a couple of years ago, when we examined what they are getting back in medical services and subsidies on their food and rent-about $2 billion out of a $14 billion total budget for the Government was in food subsidies alone. They were getting back in food subsidies oneseventh of their total tax payments.

Mr. STASSEN. The Chancellor of the Exchequer has given them this little tax reduction, but he has also decreased the subsidies on food, and so forth, hoping to get in enough more imports of food so that he does not then cause a rise in prices.

In other words, he is taking a very intricate step to try to increase productivity in the United Kingdom, decrease the subsidies to the standard of living, slightly decrease taxes and still come out all right for the United Kingdom.

He is operating on, as I say, a very important economy with great skill, and I hope with success, because if he can carry his program out and broaden the gross national product of the United Kingdom, they will be able to carry this very heavy defense burden of theirs without expanded aid from the United States.

Mr. ADAIR. Thank you, Governor.

Because of the shortage of time, I will not stay with that further. I do have one other question: You spoke yesterday about this item of $250 million for special weapons. Did I understand you correctly when I thought I heard you say that that was not for atomic weapons?

Mr. STASSEN. It is not for atomic weapons. Atomic weapons are completely controlled by the Atomic Energy Act and will in no way be affected by this program.

Mr. ADAIR. Will there be subsequent witnesses, to your knowledge, who can discuss that phase of the program with us in more detail?

Mr. STASSEN. The atomic weapons?

Mr. ADAFR. The $250 million special weapons item?

Mr. STASSEN. No; but there is not much detail that you can be given at the present time.

This is the situation: There is a special weapons study, a new weapons study, going on in SHAPE, under General Ridgway, and the report is to come in in July or August. What this provision will mean, therefore, is that when that report comes in, if there are some new and special weapons as to which training or production should start, the President has the authority under the $250 million to start it. When they get such weapons, produced in 3 or 4 years, the President has to make another decision as to whether he will then turn any of them over to any other country.

It is an attempt to save a year on what might be a very critical aspect of the problem of how you employ modern science and modern weapons, to cope with the huge mass and ruthless leaders of the Soviet

area.

Mr. ADAIR. In other words, that is an item really in anticipation, and if these plans do not develop as it is thought they might, it is entirely possible that this $250 million might not be used.

Mr. STASSEN. That is right. In fact, we have drawn the law so that it cannot be used for any other purpose.

Mr. ROOSEVELT. Will the gentleman yield?

Mr. ADAIR. Yes.

Mr. ROOSEVELT. I am somewhat confused at this point. This is a result of a study by SHAPE, which is the NATO countries? Mr. STASSEN. Yes.

Mr. ROOSEVELT. How is the President then going to decide, if the production is going on in other countries, whether to release these new weapons to these same countries?

Mr. STASSEN. The production presumably would go on in the United States, unless it developed that there was a French or other foreign design of a guided missile or other weapon that turned out to be desirable and which you wanted to help produce. Then, under the latter circumstances, the President could still authorize the production, but the law would require that the United States receive title to the product. That is what we did with the Hunter-Hawker aircraft. We would get United States title when the item came off the production line, and then this law would require a new decision by the President before it could be turned over to somebody else. We have in mind that the whole political and military picture may change in 3 or 4 years, so you want to tie your controls on both ends of the line.

Mr. ADAIR. Thank you, Governor, and Mr. Chairman.
Chairman CHIPERFIELD. Mr. Prouty.

Mr. PROUTY. I understand that only a very negligible amount of the offshore procurements for 1952 have already been let. That would indicate the program hasn't been handled very efficiently in the past. Do you think it is going to be stepped up?

Mr. STASSEN. A substantial part of the program projected for this year has already been let, but it has been let in the last month. I don't know just what the totals are, but there was $282,000,000 in these aircraft contracts alone.

There are also some very substantial ammunition contracts recently let in Italy, and I would say in the last month the offshore procurement program has been coming ahead rapidly.

Mr. PROUTY. What do you think about the fixed-price ceiling which restricts our procurement agencies in the awarding of contracts? Is this a realistic approach?

Mr. STASSEN. I think it is undesirably rigid. I think by these combined orders, such as those represented by the aircraft transaction, we can in fact get below American costs in many situations, and we are now below American costs in mine sweepers overseas.

Mr. PROUTY. I asked that question because I had heard offhand some rumor to the effect that it was necessary for the Italian Government to subsidize one or more of its munitions manufacturers, I suppose with counterpart funds, in order that they might be accepted contractors. Mr. STASSEN. That could be.

Mr. PROUTY. If that is true, it certainly doesn't suggest that our present policy is as flexible as it might be.

Mr. STASSEN. When you get into ammunition, just about every country in the world subsidizes it in one form or another.

In other words, if you take our arsenals, how are you ever going to really compute the real costs of ammunition in a United States arsenal? Or take the Ministry of Supply in the United Kingdom. How are you really going to get down to the real cost of producing that ammunition there?

It is very difficult to make comparisons between various countries in the costs of producing ammunition.

Mr. PROUTY. I have several other questions along that line, but I will ask them on another occasion.

Chairman CHIPERFIELD. Mr. Bentley.

Mr. BENTLEY. Thank you, Mr. Chairman.

Governor, in relation to section 501, our contributions to multilateral organizations, do you have the percentage of the budgets of those organizations to be filled by our contributions?

Mr. STASSEN. It varies from one to another. I don't have them all here at the present time.

Mr. BENTLEY. Looking on the last page, 109 of this booklet here, with regard to the United Nations technical assistance fund, I would estimate that we contribute about 57 percent or 58 percent of the budget.

In other words, approximately 12 out of 21 million dollars pledged is pledged by the United States. I am wondering if that percentage would compare with those other organizations that are represented

here.

Mr. STASSEN. Some are more favorable and some are the other way. With respect to infrastructure we are going to pay 41.6 percent of the total for all slices. In the United Nations I think we are currently paying about 38 percent.

Mr. VORYS. That is down to 35 percent now.

Mr. STASSEN. In Korea we are paying much higher than that, of

course.

Mr. BENTLEY. The $70 million is for UNKRA, is it not?
Mr. STASSEN. Yes.

Mr. BENTLEY. Do you feel these proportions can be justified?

Mr. STASSEN. It is like the old question of the community chest in the community. I mean, how much should the man with the greatest means contribute to the community chest? Or it is like the matter of a joint venture of another kind. It is a matter of judgment and a careful reflection as to how far you want to go.

I think the Congress at times has put certain ceilings on-has specified that American funds should not be used beyond a certain percentage in a certain program. I think there is merit to that kind of approach.

Mr. BENTLEY. Would we be able to get the percentages on these five various organizations?

Mr. STASSEN. We will get them up for you. (The information referred to is as follows:)

UNITED STATES SHARE OF MULTILATERAL PROGRAMS

MULTILATERAL TECHNICAL COOPERATION

United Nations Technical Assistance Program

It has been the practice of the executive branch to limit the United States pledge to the United Nations expanded program of technical assistance for each of the first three financial periods of the program to approximately 60 percent of total pledges. The figures appearing on page 109 of the Mutual Security Program for Fiscal Year 1954-Basic Data Supplied by the Executive Branch refer to pledges for calendar year 1953. The United States pledged $12,767,145 toward this total, subject to the appropriation of the additional amount of $4,595,812 previously authorized but not appropriated. This pledge represents 60 percent of the total amount pledged by all governments for 1953.

The United Nations technical assistance goal for contributions for 1954 will be set by the General Assembly later in this calendar year. The goal set for 1953 was $25 million, and it is assumed that governments will be asked by the United Nations General Assembly to contribute toward a total goal for 1954 of about the same magnitude. Governments have pledged a total of $21,278,575 toward the 1953 program. Based on the assumption that pledges from other governments will be approximately the same for 1954 as for 1953, the fiscal year 1954 bill requests $12,750,000 as the United States contribution to the calendar year 1954 program. This amount represents 60 percent of anticipated minimum pledges of $21,250,000 for 1954.

Organization of American States (OAS) Technical Cooperation Program

It has been the practice of the executive branch to limit the United States pledge to the OAS Technical Cooperation Program to 70 percent of total pledges. Of the $13,750,000 requested in the fiscal year 1954 bill for multilateral technical cooperation, the executive branch proposes to pledge $1 million to the OAS Technical Cooperation Program for calendar year 1954, with the above limitation. This amount represents 70 percent of anticipated pledges of approximately $1,428,000 for 1954.

INTERNATIONAL CHILDREN'S WELFARE WORK

During the 1950 session of the United Nations General Assembly, a decision was made to extend the activities of the United Nations International Children's Emergency Fund (UNICEF) through calendar year 1953. United States contributions to the current UNICEF program are being made under a legislative provision which stipulates that these shall not exceed 33% percent of contributions from all governments, including contributions made by governments for the benefit of persons located within territories under their control.

At its fall session of 1953, the General Assembly will consider the future status of the Children's Fund and determine the nature and substance of any new international children's welfare program for the period beginning January 1, 1954. Since it is not possible at this time to anticipate what the new program, either in terms of content or financial needs, will consist of, the proposed United States contribution of $9 million cannot be related to a specific program total. The amount of $9 million being requested does, however, represent an approximate continuation of the level of United States financial support to UNICEF over

the past 3 years, if the Congress appropriates the remaining $9.8 million of authorized funds for the current UNICEF program.

UNITED NATIONS KOREAN RECONSTRUCTION AGENCY (UNKRA)

The United Nations authorized an initial program for UNKRA which called for a budget of $250 million to be met by voluntary contributions in cash and in kind from interested governments. The United States pledged $162.5 million toward this program, an amount which is 65 percent of the total initial budget. The pledge was made subject to the availability of funds as appropriated by the Congress. As of June 30, 1953, the United States will have contributed approximately $51.5 million of its pledge to UNKRA, leaving a balance of approximately $111 million. This latter amount is being requested ($71 million in cash and $40 million in pipeline supplies) for possible payment in the fiscal year 1954, during which year it is anticipated that UNKRA will complete its initial program. As of March 31, 1953, other governments had pledged $43,220,806 toward the initial program, and had contributed $12,860,631 of this amount. Additional payments approximating $6.5 million are expected from other governments during the last quarter of fiscal year 1953.

MOVEMENT OF MIGRANTS

The expenditures of the Intergovernmental Committee for European Migration (ICEM) are divided into two major categories, administrative and operational. The ICEM budget for calendar year 1954 has not yet been set by the Committee. It is estimated, however, that it will be approximately $40,400,000, of which $2,400,000 is for administration and $38 million for operations.

Contributions to the administrative expenses of the Committee are based on a scale agreed to by the governments concerned. The United States share is 33% percent, which amounts to $799,200 in 1954.

Contributions to the operational expenses consist of the following categories: (a) Cash contributions to subsidized movements of migrants and refugees, the costs of which are not reimbursed to the Committee or are only partially reimbursed.

(b) Cash payments in the form of reimbursements by governments or other bodies in full or partial reimbursement for movements which have been effected. These payments are sometimes made in advance against reiumbursements payable at a future date.

(c) Credits to governments for services performed in the processing and reception of migrants, the expenses of which are borne directly by the governments. Emigration countries are credited at a rate of $55 per migrant processed for movement, and immigration countries $20 per migrant.

The total amount which the Committee must obtain from the above 3 sources in order to meet anticipated operational costs, covering the movement of approximately 140,000 migrants in 1954, is estimated at $38 million. Of this amount the United States would have available for contribution $9,200,800. The executive branch has administratively set the condition that the United States share of the operational expenses, up to the maximum availability of the contribution, will be proportionate to the actual movement of migrants accomplished as compared with the total provided for in the plan of operation and reflected in the operational part of the budget.

Chairman CHIPERFIELD. Thank you very much, Governor, and godspeed on your trip.

Mr. STASSEN. I want to thank the committee and commend its members for their very intelligent and probing questions. We will endeavor to follow these specific details through and furnish these reports.

I also do want to say this final word to you. We have been going into this program very thoroughly with the President, and of course you saw his message of yesterday, and I would like to emphasize in closing that, while we are making important cuts, I do believe that our policies can be carried through successfully with the amount we have requested if we manage it carefully and get the cooperation of other countries and do not hit any very serious, unexpected situation.