STATEMENT OF HON C. TYLER WOOD, DEPUTY TO THE DIRECTOR FOR MUTUAL SECURITY

Mr. WOOD. Mr. Chairman, recognizing the fact that this committee wants to get down to the brass tacks of this legislation and that it wants a careful examination of the facts to get through as rapidly as possible, we have planned our presentation to you in what we think is the best way to accomplish those objectives.

These proposals are, of course, subject to your approval and that of the committee.

We have planned this morning, to take up with you, the European area and NATO. We propose to do it in this way:

I have with me now, Assistant Secretary of State Merchant, who will take perhaps 5 minutes, depending on the number of questions that are asked him, to give you not a general discussion of the political situation in this area, at all, but a description of recent political developments that are involved in this program.

Following that, Major General Stewart will give you a brief general summary of the way this program has been developed.

Following that, Dr. FitzGerald will take a few moments to give you a brief picture of the economic situation in this area.

We will then go on, to the extent this committee wishes, with a country-by-country description of the amounts and the purposes for which these amounts are requested.

Chairman CHIPERFIELD. Talking about infrastructure, I want Mr. Richards to know that I am going to get a pipeline that carries water from Lake Michigan to Texas to two sections of the land where we have not been able to get any wheat for the last 4 years. It is just as sensible. I think it would be a good idea, don't you?

Mr. RICHARDS. If it passes through South Carolina.

Mr. WOOD. Mr. Chairman, may I just take a couple of minutes to make a few suggestions which are again designed to speed consideration of these matters?

We are proposing to this committee that we postpone discussions about, and a consideration of, this very important central question of unexpended balances and unobligated amounts until we can schedule a special session with some of the top financial and procurement people of the Department of Defense.

I think it will save the committee's time if we delay its questions on those subjects until we have all the experts here who can answer those questions and can devote one special session to that problem.

Mr. MERROW. That will include both military and economic?
Mr. WOOD. That will, sir.

In all seriousness, I think it will save the time of this committee if we have one session specifically devoted to that question with all the people here who can authoritatively discuss and answer these questions.

Secondly, we are also proposing, if the committee pleases, to have one special session devoted to an explanation, and whatever discussion is necessary, of the legislation, itself. This would include a summary of the provisions of the proposed legislation and their effect. That will save the time of the committee and contribute to an understanding of this legislation which, on its face, looks pretty complicated.

Chairman CHIPERFIELD. Will you tell the committee what your plans are for General Ridgway?

Mr. WOOD. It is proposed to have General Ridgway before this committee next Monday. The suggestion has been made that it would be well for the committee to hear him in open session in the morning. However, General Ridgway has informed us-which I think this committee will fully understand-that he could not respond to all the questions which the members of this committee would ask him entirely and fully in open session. He would be delighted to come before you in an open session and it is suggested that he appear before this committee in closed session the afternoon of that same day.

Chairman CHIPERFIELD. You may proceed.

Mr. WOOD. We also suggest a special meeting devoted to the offshore procurement program and infrastructure. That is also a most important element in this program, and we believe that if presentation on OSP can be made by the experts on that subject at one time, rather than scattered at various points throughout the hearings, it will save the time of the committee and give a clearer understanding and grasp of the subject.

I would like to say further, in this connection, that we have planned, and will present to you, a very brief story on this program. We are, however, ready to go into as much detail as you wish.

We are at your service in that respect. It is the committee which will determine how fast or how slowly we go in presenting the

program.

There is one other thing that I would like to mention. It relates to a subject which has come up in some of the hearings in the Senate committee. It concerns the evaluation reports of these teams of businessmen that have been put before you. There are two main questions that have been asked, and I would like to deal with those for a moment. The first question is this: Is the program which we are laying before you substantially in agreement with the recommendations of these businessmen teams? The answer to that question is "Yes." However, you will note, if you carefully compare the proposed program and the individual reports, that in some cases the teams have recommended amounts which are at variance with the amounts contained in this bill. I, therefore, must reconcile my answer to this fact. Mr. Stassen, on the basis of plans originally made when he first received these reports, met with these teams on the 7th of May and spent the whole of that day with them. I believe, sir, that that question can best be answered by inserting in the record a statement showing in each case where a recommendation as to an amount of aid was made by these teams what the administration has included on an illustrative basis. Governor Stassen did inform the members of the various teams on May 7 of the action he proposed to take.

(The statement referred to appears on p. 465.)

Finally, as to these reports, I wish to make clear just what has been sent to you.

Some of the reports have been sent to you without any editing whatever-without the removal of a word or a comma. Öthers of them have been edited, but I wish to make it clear that nothing has been de

leted solely because it might be embarrassing in any way to the administration or the people who are dealing with this program. We have deleted or edited two categories of items. The first category of items consists of a number of references to, and comments upon, an individual by name under circumstances where the reference or comment might leave certain impressions about that individual, which have no bearing on the administration of the program, but which it would be unfair to the individual to have become generally known.

For example, one of our mission chiefs was dealt with in this way. The team of businessmen said: "This man is a splendid gentleman, he is a man of great competence and fine reputation in his field. He does not have the qualifications that make for a good administrator and, therefore, he has not made a good mission chief."

Then they spell out their reasons and mention the man's name. That man is leaving us. We felt it would be unfair to him and to his reputation to include that material in these reports. We have herefore edited out that sort of statement.

The other category of items consists of certain comments on delicate subjects, such as the attitude of certain individuals in a foreign government, their shortcomings and that sort of thing. Such comments are useful to us, and many of them we were already aware of. However, if such a comment did become public it would be very harmful and most embarrassing to our relationships with the government concerned.

We did want to make these reports available to this committee with as full information as possible, but we thought it wise and advisable to consult on this subject with the Secretary of State and the Secretary of Defense. They felt, as we did, that these two types of things ought to be taken out of these reports. I will merely say to you, in proof of my statement, please look at these reports and see how many frank criticisms of the administration of the program remain in them. If you do, I think you will have confidence that nothing has been removed on the ground that it might be embarrassing to us.

I am sorry to have taken so long, Mr. Chairman, but I thought this explanation would save time.

Now, may I ask Mr. Merchant, to give a brief summary of the major new developments on the European political front and to call attention to their bearing on our proposed program.

Chairman CHIPERFIELD. Mr. Merchant.

STATEMENT OF HON. LIVINGSTON MERCHANT, ASSISTANT SECRETARY OF STATE FOR EUROPEAN AFFAIRS

Mr. MERCHANT. Mr. Chairman and members of the committee, I take my text from the chairman and I gather the text is brevity. I know the Secretary of State has been up here on several occasions recently and also Governor Stassen; so, I will not attempt to replow ground that has already been very thoroughly plowed.

I would like to say a word on the last North Atlantic Conference meeting in Paris last month. NATO, of course, I think all of you would agree, could properly be described as the cornerstone of our policy in western Europe, our policy of defense.

The council meeting last April, in my opinion, was one of the most fruitful and successful that has been held since the birth of the organization 4 years ago. The accomplishments were real and important. Not the least of them I would cite the results of the very free and frank and full discussion in secret session of the nature of the Soviet menace, particularly in the context of the so-called Soviet peace offensive.

From that discussion in the council there arose complete agreement as to the unvarying character of the long-term threat and complete agreement as to the necessity of maintaining and extending the defense effort of the North Atlantic Treaty countries without relaxation.

The practical accomplishments, which seem to me of great importance are the agreement on firm 1953 force goals and tentative agreement as is customary on the force goals for the next successive year; agreement on the general terms under which the 1953 annual review would be conducted in the expectation that by late next fall, agreement would be attained on force goals for the next several successive years; agreement on the 3-year program of infrastructure now, removed from the arena of annual bitter negotiation, a problem which I am sure if Secretary Wilson had had knowledge of or participation in the past, would have been a source of particular relief to him. Finally the signature of the contracts on the multinational aircraft production program in Europe.

I would like to add just one word on the meeting and that is the emphasis of our delegation at the council meeting upon the necessity for longer-term planning and a complete recognition of the inevitable interrelationship between economic capacity to maintain an adequate defensive force in being that is, the necessity for the maintenance on the part of all members of the alliance of a sound and vigorous economy-that recognition by our delegation was very thoughtfully and constructively received by our partners.

The EDC, of course, came up for discussion at that meeting and a resolution urging its prompt ratification was produced by the ministers.

I might just briefly, if the committee wishes, describe the present state of ratification in the six countries which compose that community: Insofar as the Netherlands, Belgium, and Luxembourg are concerned, there would appear to be no difficulty in prospect of the securing of very satisfactory parliamentary majorities in both houses for passage.

What is involved, really, is the pace of legislative action. I think I should emphasize here that the EDC in all six countries is beyond the stage of attempting to secure agreement by governments on what should be done, but it is a problem today of securing parliamentary ratification, and that is a problem which I am sure all of you gentlemen are familiar with and will understand even better than I.

A question has been raised in Belgium on a constitutional aspect of the EDC, but the Prime Minister and the Foreign Minister of Belgium are pushing ahead with ratification and it is not anticipated that that will produce a major difficulty or obstacle.

Luxembourg, of course traditionally associates itself with the foreign policy and actions in the field of foreign policy of Belgium.

In Italy the situation really is, as I believe I either described or forecast a few weeks ago when I was up before this committee

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discussing this same general subject-in Italy the problem essentially is political in that Premier De Gasperi, who is whole heartedly in favor of the EDC as is his entire Cabinet, was unable, due to a filibuster by the Communists in the Senate, to secure ratification by either house before dissolution in anticipation of the national elections which will be held in Italy on June 7 and 8.

There is a constitutional requirement that, I believe it is 20 days, which must elapse after the results of the election are known before the 2 Houses can vote. There will then be, of course, the problem of securing confirmation of the Cabinet, the new Government, and there are certain necessary fiscal bills which must be dealt with at the outset of the session. Nevertheless, we have been assured that the first substantive piece of business considered by both Houses when they assemble will be action on ratification of the EDC treaty.

In Germany and France, as all of you are aware, there are difficulties. There have been a number of obstacles, some of which have already been successfully surmounted. The 6 so-called protocols or agreed interpretations to the treaty have now been approved by all 6 governments and what at one time promised to be real difficulty in 1 or 2 countries at least has been satisfactorily resolved.

In Germany, as you know, the Chancellor received a setback in the Bundesrat 2 or 3 weeks ago when it was voted 20 to 18 that the treaty should not be considered until after the constitutional question which had been raised was settled.

The Chancellor remains confident that he can in the reasonably near future secure the necessary parliamentary action to ratify insofar as Germany is concerned both the EDC treaty and the contractual agreement.

He has not yet divulged the exact parliamentary tactics and strategy upon which he plans to proceed from this point on.

We must recognize the difficulty that does exist as a practical matter in Germany in the form of the approaching German elections. The date has not been set but constitutionally they have to be held not later than September and as in Germany, the Government moves into the atmosphere of an approaching election. As is understandable, should the criticisms of the opposition become more heated and more pointed?

(Discussion off the record.)

Mr. WOOD. To summarize, I would say that we have by no means seen all of the hurdles surmounted. Progress is being made, and we will continue to operate on the assumption that without undue delay, the European Defense Community will come into force.

As you saw undoubtedly from the announcement on Monday, the deputies for the negotiation of the Austrian treaty meeting in London on May 27-and invitations have gone out for that meeting to the Soviet. This is a matter which President Eisenhower in his April 16 speech placed high on the list of concrete situations where, if concrete constructive action was taken by the Soviet Union, we would have tangible evidence of a genuine desire on their part to contribute to a relaxation of tensions.

(Discussion off the record.)

Mr. WOOD. I might also say a word or two on the negotiations in Spain.