fectiveness of past and present mutual security programs. It represents the product of months of work by the National Security Council, where each of our security objectives was carefully studied, and its importance weighed in relation to the fiscal considerations that the Secretary of the Treasury will discuss with you. It reflects the findings which resulted from the careful, local studies which were recently made by special evaluation teams, comprised of nearly 60 outstanding leaders of American industry and finance, in 12 countries now participating in the program. It mirrors the experience and knowledge which were gained by the Secretaries of State, Defense, and Treasury and myself during our several trips to Europe and particularly in the course of the recent meeting of the North Atlantic Council in Paris. In the second place, as the President has already indicated, we are hopeful, as a result of our present close and careful scrutiny of the present mutual security program, of discovering certain savings in currently appropriated funds which can be applied to reduce somewhat the presently requested authorization for new obligational authority, that is, if the savings are transferred to or to take a part of the $5.8 billion new authority. The exact amount of any real savings can only be determined as we approach the close of the fiscal year. They depend upon the extent to which any of the specific requirements on which present programs were based have been eliminated and not replaced by new, comparable requirements, the extent to which reductions in the originally estimated prices of military equipment have occurred, and other similar factors. In the third place, I should note in passing that the foregoing aggregate figure does not include something under $100 million in local currencies which are already, or will become, available to the United States in the form of counterpart or as contributions by other governments and which are required to carry out the program presented. Finally, I should caution the committees that this is a tight program, as the Secretary of State has stated, and one in which no provision has been made for a number of contingent requirements which, because they are contingent, we felt should not be included. I refer particularly to possible requirements for additional economic assistance in Korea beyond the $71 million, which is included as a contribution to UNKRA (the United Nations Korean Reconstruction Agency), especially if further great increases are to be made in the ROK forces, and to the possible need for aid in averting famine in Pakistan, if that becomes a very large need, and the potential need is now the subject of a special study. I mention these because I think it is important and right for you to know at the very outset precisely what is, and precisely what is not, included in the request for authorization which is now before you. Within this $5.8 billion total, slightly over $4 billion is requested for mutual defense material and training. Of this amount, approximately $2.53 billion is requested for the European area, about $1 billion for the Far East, slightly under $475 million for the Near East, and $20 million for Latin America. Within the $5.8 billion, an additional $995 million is requested over and beyond that $4-billion figure I mentioned for mutual defense ninancing. This portion of the program is designed to assist certain countries in Europe and the Far East in carrying out important defense objectives in a manner which will prevent their own budgets from remaining in disastrous imbalance. Of this amount, $400 million would be utilized for the procurement of equipment, materials, and services which are required by, or are necessary for the support of, forces of France which are located in Indochina and forces of the Associated States of Cambodia, Laos, and Viet-Nam. Of the total amount of $995 million which I referred to for mutual defense financing, $100 million is intended for the manufacture in France of artillery, ammunition, and semiautomatic weapons which are required by, and are to be delivered to, French forces assigned to the North Atlantic Treaty Organization, and another $100 million is designed for the manufacture in the United Kingdom of modern military jet aircraft required by the United Kingdom forces for the defense of the North Atlantic area. The provision of these amounts in the manner indicated, together with $100 million which is requested to finance United States exports to the United Kingdom of certain commodities, particularly wheat, cotton, and lard, of which we have an ample supply, would have these effects: It would mean that direct financing assistance to the United Kingdom would be cut in half from 1953 to 1954. There would be a further reduction anticipated the following year, and early termination of all such assistance is contemplated. The resulting loss in dollars for balance of payments would be partially cushioned by increasing earnings on jet aircraft production and other military materiel contracts with the United States. But this cushioning of the balance of payments loss through increased offshore procurement earnings would not ease or assist the budget of the United Kingdom. For France, approximately 40 percent of the Indochina war would be covered by contributions in various forms from the United States. May I reflect the situation in this manner: In both of these situations, if the average taxpayers of the United Kingdom and of France continue, as they do today, to pay slightly more taxes proportionately than the average taxpayer in the United States, then each country can-the United Kingdom and France-with able management, adjust to the new program reasonably well and effectively carry out their extensive commitments for mutual defense and national security. I am convinced, however, that the amounts recommended are the very minimum which the United States should provide, and these amounts are directly related to the essential objectives of our country as well as theirs. Two hundred and fifty million dollars is requested for mutual special weapons planning. This is a new provision. This does not affect atomic weapons, which are controlled, as you know, by other legislation. It will include only such special weapons as the President may determine, after the study of new weapons now under way by the SHAPE command is completed. Double safeguards, we recommend, should be included in this portion of the law to insure that the security interests of the United States are served. Specifically, it is proposed that the President be responsible for determining, first, the wisdom of initiating the production of specified weapons of this type, and second, the desirability of any physical transfer of equipment, after production, or the provision to provide training. With such safeguards, I am convinced that this $250 million will, in the course of the next 4 or 5 years, prove to be the most important $250 million in the defense portion of the Mutual Security Act. One of our greatest assets in defense is and has been the productive and scientific genius of the free peoples. The objective of NATO defense planning, as of American defense planning, has not been one of matching man for man a potential army of aggression, but rather of making our forces as effective as possible through a combination of training and modern weapons. The special new weapons that are now beginning to enter production or are nearing the completion of development must be a part of that planning if we are to create, with a minimum cost, the most effective defensive shield. We are thus proposing to take at this time those steps that are appropriate that will make possible the sharing with our allies of the industrial and scientific advances that can make our people more safe from attack and our collective armed forces more secure and effective in combat. Smaller amounts are involved in the mutual development and technical progress programs, approximately $315 million for economic aid directed toward development and about $140 million for technical cooperation. Of the $315 million, $30 million represents a request for an authorization, but not at this time for an appropriation, to cover anticipated contributions to UNWRA, the United Nations agency for the relief and resettlement of Arab refugess. These several amounts, totaling $455 million, are predominantly for India and Pakistan, for Southeast Asia, for the Near East, and for Latin America and Africa. These amounts are much less than the direct defense portions contained in the proposal, but the programs which they cover may well prove to be the most important of all in their ultimate long-term effect. India has a well-conceived plan for long-term development now under way. I know some Members of Congress have recently been there. Moderate assistance for 3 years should be anticipated, but only 1 year is included in the 1954 fiscal-year program. The multilateral organizations whose work advances the broad security and humanitarian objectives of the mutual security program together require a little more than $100 million. This amount includes funds for our proposed contributions to the United Nations International Children's Emergency Fund, commonly called UNICEF, United Nations Technical Assistance (UNTA), the Organization of the American States (OAS), the United Nations Korean Reconstruction agency (UNKRA), and the Intergovernmental Committee for European Migration (ICEM). Our support of these programs is in furtherance of President Eisenhower's inaugural statement that "respecting the United Nations as the living sign of all people's hope for peace, we shall strive to make it not merely an eloquent symbol but an effective force." Because of the great humanitarian and economic importance of these international programs to the free world, we must continue to assume leadership in making them succeed. Of these 5 multilateral undertakings, 3 are integral parts of the U. N. system, 1 is solely inter-American, and 1 is organizationally outside of the U. N. framework. The total effort and accomplishments of all of these, however, have come to be regarded by less fortunate people everywhere, as concrete evidence that the leading free nations are willing to back expressions of concern and interest with tangible deeds. I realize that some will sincerely feel that this proposed program cuts too deeply and too sharply into the amount of the previously planned program. I realize that others will sincerely feel that even more drastic reductions should now be made. It is our considered conclusion after careful study that the vital objectives of our country in the mutual security program can be attained through this reduced amount if wisely used in the new program. It is also our considered conclusion that these recommended amounts are urgently needed in the interests of the safety and security of our country. It is our pledge that these funds will be administered with extreme care and that throughout the year every opportunity will be seized for further savings when they can be made without prejudice to our country's objectives. As I have also stated we expect to make moderate but important savings in the 1953 program which is now in the last months of its fiscal year. These savings will be reported to the committees later, and can be credited against the amount now requested for the new program. This new mutual security program in President Eisenhower's administration will have these characteristics: 1. Longer range planning and programing with open discussion of future requirements, subject always to the annual decisions and reviews of Congress. 2. Earlier attainment of strong defense capabilities through more rapid deliveries of critical items and more thorough training of forces in being. 3. Constant insistence on the importance of economic stability and an expanding gross national product among the free nations as the essential foundations for sound defense. 4. Accelerated planning for the use of new weapons for the defense of the free nations against threatening totalitarian thrusts. 5. Full enlistment of the cooperating defensive strength of all nations who oppose the Soviet Communist power. 6. Expanded use of the production capacity of Europe through a combination of United States and multination orders which will permit efficient mass production of NATO arms and the consequent establishment of a better production base in Europe. 7. Steady development of the natural resources and the people's capabilities in the less advanced areas of the free nations. 8. Gradual expansion of fair and profitable trade between the free countries. 9. Broader cooperation with voluntary organizations engaged in similar activities with emphasis on the people-to-people relationship. 10. Increased reliance upon private capital for all phases of economic accomplishment. 11. Alertness and willingness to adjust to any new conditions, in accordance with the President's April 16 address. In other words, we seek a rapid, surefooted climb with our partners to a high plateau of secure preparedness, and then, shoulder-to shoulder, an advance along that plateau toward peace and better living for ourselves and for others. Mr. Chairman, without minimizing the difficulties and obstacles we face, I do have confidence that this mutual security program can be carried through successfully. This confidence is rooted in my deep and abiding faith in the freedom and the inherent dignity of men. It is strengthened by my regard and appreciation for the superb abilities and excellent teamwork of the officials of the administration upon whom so much of this program depends. I refer to the Secretary of State, John Foster Dulles; the Secretary of Defense, Charles Wilson; the Secretary of the Treasury, George Humphrey; and the Director of the Bureau of the Budget, Joseph Dodge. My confidence is fortified further by my knowledge of the high caliber and the devotion to duty of the members of the uniformed services of our country, the Army, Navy, Air Force, and Marines, upon whom so much of our mutual security work depends. It is fed by my conviction of the truly great qualities of the people, and of the leadership, of the other countries with whom we work in the mutual security program. Regardless of the cynics, the defeatists, the timid souls, and the shortsighted ones, let us move forward with faith and determination, with realism and sound planning. Thus will we, in the United States of America, be worthy of our national power and responsibility, and of our opportunity in 1953, under the leadership of President Eisen hower. Thank you, Mr. Chairman and members of the committee. Chairman WILEY. Thank you, Mr. Harold E. Stassen, Director for Mutual Security. We shall now hear from the Honorable Charles E. Wilson, Secretary of Defense. We are glad to see you, sir. If you will, you may carry on in your own way. STATEMENT OF HON. CHARLES E. WILSON, SECRETARY Secretary WILSON. Thank you, sir. Mr. Chairman and members of the committee, late yesterday afternoon I returned from 3 weeks in Europe. Both before and after the NATO meeting in Paris, I visited many of our Army, Navy, and Air Force units and installations in England, France, Germany (including Berlin), Austria, Italy, and North Africa. During various parts of the trip I was accompanied by Secretary of the Army Stevens, Secretary of the Navy Anderson, Assistant Secretary of Defense Nash, and General Bradley, Chairman of the Joint Chiefs of Staff. We have had the benefit of extensive discussions with the commanders of our United States forces in the European theater and with most of the United States military officers who are holding top NATO commands, including General Ridgway, General Gruenther, General Norstad, and Admiral Carney. We visited some of our Air Force bases in England and North Africa, as well as several of the bases in France and Germany where United States Air Force units are presently deployed. We went to a number of our headquarters and |