Andrews, Stanley, Administrator, Technical Cooperation Administra- Byroade, Hon. Henry A., Assistant Secretary of State for Near East- ern, South Asian, and African Affairs, Department of State----- Cabot, Hon. John M., Assistant Secretary of State for Inter-American Affairs, Department of State--- Cook, Richard F., Program Director, Institute of Inter-American Af- FitzGerald, Hon. D. A., Deputy to the Director for Mutual Security-- Gardiner, Arthur Z., politico-economic adviser, Bureau of Near East- ern, South Asian, and African Affairs, Department of State----- Kersten, Hon. Charles J., a Representative in Congress from the State Loftus, John A., Counselor for Economic Affairs, American Embassy, Wood, Hon. C. Tyler, Deputy to the Director for Mutual Security__. Young, Kenneth T., Director, Office of Near Eastern Affairs, Depart- 1049 Hall, Graham, special assistant to the Assistant Secretary for United Henderson, Joseph S., Chief, Division of International Administra- 1134 Martin, Edwin M., special assistant to the Secretary of State for Mu- Milliken, Otis, officer in charge, United Nations Social Affairs, Bureau 1150 O'Hara, R. E., Office of the Secretary, Department of Defense_-- Russell, Brig. Gen. Sam C., G-4, Department of the Army- Schmeder, Lt. Comdr. C. E., Bureau of Supplies and Accounts, Navy Warren, George L., special assistant to the Assistant Secretary for 1143 Wood, Hon. C. Tyler, Deputy to the Director for Mutual Security 1133, 1185 Efron, Samuel, Assistant General Counsel, Department of Defense---- 1269 Eichholz, Robert B., General Counsel to the Director for Mutual Murphy, John E., Comptroller for the Director for Mutual Security- Wood, Hon. C. Tyler, Deputy to the Director for Mutual Security- MUTUAL SECURITY ACT EXTENSION WEDNESDAY, MARCH 11, 1953 HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, SUBCOMMITTEE ON THE FAR EAST AND THE PACIFIC, Washington, D. C. The subcommittee met, pursuant to call, in executive session, Foreign Affairs Committee Room, United States Capitol, at 10: 50 a. m., Hon. Walter H. Judd (chairman of the subcommittee) presiding. Mr. JUDD. The subcommittee will come to order. I was hoping that all the members of the Subcommittee on the Far East and the Pacific could be here before we started. Mrs. Church and Mr. Lanham are members. For some reason they are not yet here, but I think we should go ahead without them. General Olmsted, it is nice to have you back with us. As I said to the members of the committee, in the notice inviting them to this session, we wanted to have you come before us and give us your observations, impressions, criticisms, or recommendations that would be helpful to us when we have to get down a little later to reviewing the Mutual Security Act. You are able to give us your impressions on the basis of your knowing our committee and what we were trying to do when we passed the legislation. You were with us almost every day during our deliberations last year and because of your recent trip through the Far East, and inasmuch as you have returned to civilian life and will not be here when we have the bill, we have to take advantage of you while you are here. For the benefit of the new members of the committee, I wonder if you would mind giving us a little of your own background so that they will know you as the rest of us do. Then go ahead and make any preliminary statement following which we will ask you questions, if you do not mind. STATEMENT OF MAJ. GEN. GEORGE H. OLMSTED, FORMER DIRECTOR, OFFICE OF MILITARY ASSISTANCE, DEPARTMENT OF DEFENSE General OLMSTED. Mr. Chairman and ladies and gentlemen, I am happy for the opportunity to come and chat with you about this problem. I was educated as a professional soldier and resigned from the Army after a couple of years of active duty. I entered business in Iowa, my home State, was recalled to active duty as a Reserve officer in 1942, and served 412 years largely in the lend-lease type, or the international supply type of operation, both here in Washington and, for the last 18 months, in China. I was returned to inactive status in 1946 and called back in 1950 again to work with the Mutual Defense Assistance Program. I might say that is one of the penalties you pay for getting a specialty in the service, particularly a specialty that is as new and complex as the mutual security concept. I have just returned from a trip to the Far East. Mr. Chairman, perhaps the most useful thing I could do would be to summarize country by country, the impressions, the facts, and perhaps 2 or 3 suggested conclusions. What I am talking about, of course, is a program which you people have largely written. You look to the Mutual Security Agency and the Defense Department to administer it. I think it is fair to state as a conclusion preliminary to my remarks that in the Far East you see the program beginning to pay off. We see the beginning there of the working out of the concept of the Mutual Security Program. I went first to Japan. The Japanese situation in a nutshell is about like this: We are not supplying under MDAP appropriations equipment to the Japanese. Up to now the equipment that has been made available to the Japanese National Police has been funded in the appropriations to the Army. Our only MDAP interest in Japan at this time is in the training category where we are now finalizing the arrangements to bring Japanese military students here to take the courses in our various service schools. For your information the Japanese have an American training group there. They call it the Security Advisory Group. (Discussion off the record.) General OLMSTED. The discussions and negotiations leading up to the bilateral agreement which is required for eligibility under the Mutual Defense Assistance Program are progressing. That, of course, is a State Department responsibility. As soon as that bilateral is executed, then our advisory group will become a MAAG and the implementation of the program from that time on will become a normal MDAP operation comparable to that which we have in the other countries around the world. The Japanese have a rather substantial unused industrial capacity. We have been procuring there several hundred million dollars worth of military equipment for the use of our United States forces in Korea and the ROK's as well. We have also, just this year, initiated negotiations for offshore procurement of military end items using MDAP funds. Our 1953 program is envisaged at something in the neighborhood of 40 to 50 million dollars. Our people there advise us that the Japanese have a capacity unused to make spare parts and ammunition in which we are particularly interested which might run as much as 200 or 300 million dollars. If we can get our offshore procurement up to about that level, we will establish a balance for the Japanese, a balance of payment, imports and exports, that would probably eliminate the necessity of thinking about economic aid in that area. In other words, it would provide the necessary dollar balances to make their economy viable. Now this is an impression only. The Japanese are very much interested in strengthening of their economy. By comparison they are more interested in that than get ting on with their rearmament program. We are telling them, at least from the military side, that our resources, of course, are not unlimited, that our desire, all things being comparable, like price and quality and time of delivery, that our desire would be to place these offshore procurement contracts with the people who are doing the most for themselves, and we are hopeful that perhaps that type of persuasion will be influential in the thinking of the Japanese to get them on faster with their own rearmament. There is no thinking on our part of a Japanese military force beyond the needs for their own internal security. There has been a little bit of interest and activity on the Air and Navy side, but by comparison it is quite modest to the interests and progress that has been made on the Army side. Now that, in a relatively few words, is a summary of my observations about the situation as it now is in Japan. If you would like to stop for questions, fine. If not, I will go on and discuss the situation. Mr. JUDD. What would the committee prefer? My suggestion is that we let him cover the waterfront. Otherwise we will get so bogged down in Japan that we will not get to the other areas. Why do you not go ahead, General, and we will make notes of things to come back to? General OLMSTED. In Korea the MDAP interest there is limited to the training as it is in Japan. The supply of the equipment to the United Nations forces and the Republic of Korea forces comes from the moneys appropriated directly to our military services and not the Mutual Security appropriation. We are doing a perfectly remarkable job in the training of these South Koreans. Eighteen months ago there was no responsible viewpoint in the Pentagon that you could make good soldiers out of these people and today there are twice as many ROK divisions in the line as there are American divisions. In addition to that they have an excellent training establishment where their return students from the United States, with the help of our advisers, have established little counterparts of our Fort Sill, our Fort Benning, our Fort Knox, our Fort Monmouth, and the great bulk of the training now is carried on by their own people, our American personnel simply being there as advisers and to offer guidance. In the ROK divisions and in the ROK units we still have, and at their request, an American adviser down to the battalion level. But our whole training job there is being carried on with something in the neighborhood of 2,300 American officers and men. Now, General Van Fleet told me there, and I think he has said since, he does have in smaller units now and in his training center, sufficient personnel, progressing through their basic and advanced training so that if he is given instruction to do so, or if his successor, General Taylor is, that they can substantially increase the number of ROK units and in a very short period of time. There is another thing being employed in Korea which I think is worthy of their consideration not only there, but everywhere American forces are deployed around the world and that is what they call the KATOUSA plan, the Korean augmentation to the United States Army. (Discussion off the record.) General OLMSTED. Koreans are integrated right in alongside of the American soldiers at the squad level, and they are doing very well. They get some benefits by serving in the American Army and, in addition to that, they are very proud to have the privilege of wearing an American Army patch. Mr. JUDD. Is that above the number of Korean divisions? I visited every one of our unit commanders who told me that they could absorb a greater percent of their unit strength in KATOUSA's without adversely affecting the fighting quality of their units. Now this is the reason why I say that is important. In that concept lies the possibility of having the framework of American leadership augmented with the strength of personnel from our partner countries, but avoiding the charge that we were employing mercenary soldiers. They become a part of our own fighting units. I think the concept is one susceptible of wider application. (Discussion off the record.) General OLMSTED. We, of course, are continuing our program of bringing selected Korean students to the United States. Almost without exception they are standing very high in their classes in our various schools. They are a very earnest lot. I think this: We must accept the fact that the economy of the Republic of Korea cannot continue to carry this military burden without having to have some support, dollarwise, from the United States. The figure now would seem to be somewhere in the neighborhood of $200 million. On the other hand, a Korean soldier costs them about $190 per year for pay and subsistence, whereas a United States GI costs us a little over $3,000 a year. The Koreans are paying that $190. There is a wide spread in the difference of cost. There is also a wide spread in the cost of the initial equipment of a Korean unit. (Discussion off the record.) Mr. PROUTY. Do the KATOUSA's serve under the same conditions as American troops except for pay? General OLMSTED. Yes, the pay, and in the event a KATOUSA becomes a casualty, he ultimately winds up in the Korean medical chain of command rather than ours, although the first aid and clearing station level is standard American service. After he is passed back to the base hospital, if he has to be, he goes to the Korean base hospital rather than to our own. In Formosa, I was very much heartened with the progress that the Nationalists are making. I had served with them during the last war. I have seen them come from very ineffective military organization through the process of training five divisions in India and then having them spearhead the operation in Burma in 1944. They were under the command then of Gen. Sun Li-Rond, who is the overall commander now. A very good general. From the standards of their equipment, the manner in which they maintain it, the physical condition of their troops, they are quite an inspiring lot. General Chase says he can advance them in terms of combat readiness just about as fast as our program or our directive permits. (Discussion off the record.) |