A negotiating team was sent over to Europe in January 1952 and succeeded in securing the agreement of the NATO countries to lift the taxes on our construction work, on the materials, and the whole long list of very complicated technical taxes. They did an excellent job. In about 6 weeks they secured the bulk of agreements. More agreements have been added since, but I can say to the Congress that with respect to the construction of infrastructure-NATO infrastructure work-the tax problem is not a problem any more. It took us some time to work it out but there is one area in which the NATO countries have, I can say, cooperated very well and in a very difficult area. This tax picture in our area alone is complicated enough but when you get into some of these European countries it is almost beyond understanding. On the side of physical construction we have made up a good deal of the lost time. It got off to a very slow start, it took some time to get construction companies located who could do a good job, some of them were not experienced in the work and had to do their work over again. Here is where we stand as of the end of 1952, after all the projects in the first slice are fully completed. (Discussion off the record.) Mr. NASH. As a concluding note on it, it is our aim at the Paris meeting in April to see if we cannot get the countries to agree and see if SHAPE would not come up and give us for our October meeting, the balance of the infrastructure program. They will tell us how much more they think is needed in the way of physical facilities and give the best estimate of its cost so that governments can plan budgets in advance that will take into account the cost of infrastructure. The program to date involves as you see there, $968 million. I would hesitate to give the committee at this juncture, how much more they are going to tell us it will require to complete the job, because you see that involves a decision on what further forces are going to be brought into being. It is particularly important on the side of airfields. (Discussion off the record.) Mr. NASH. We hope we can get a cost-sharing agreement to that in October and then you will have the infrastructure part of our NATO force buildup taken care of. Mr. SMITH. You will have to get a buildup, won't you? Mr. NASH. We will. By that, Mr. Chairman, I am talking about an agreement that will wind the thing up. It will be more than just an annual increment. That will be in effect, probably taking a 2-year program and getting it agreed to so that you can plan ahead and budget ahead for it, that is the important thing, and not have it treated as has been the case heretofore, as a sort of the tail on the dog coming along after you have been working on the dog itself, when in fact it is really the legs of the dog. It is the part upon which the dog travels. Mr. SMITH. Is it safe to say that when we reach the present objectives of the NATO goals, that when we hit those targets, that that will be about the limit and then the program is to develop your reserves behind that program? Mr. NASH. That is the principal problem, Mr. Chairman. That is what I think General Ridgway will concentrate his attention on when he comes before the committee, to tell you what is needed in the way of the backup for these divisions. This is something with which he is very concerned, particularly on the side of the ammunition reserves which is a problem as you know, around the world. He will concentrate his attention on it. What he wants is effective frontline forces. He is more interested in the effectiveness of them than he is in just numbers. He says he wants to get rid of this numbers racket. There is no magic in what he calls window dressing divisions. What he wants to be able to say is, "The divisions I am talking about are divisions that can fight on the frontline and fight for such and such a period. I do not want them to fight for just 1 day or 2 days or 3 days. I want them to have the stuff to fight with for 60 or 90 days, which is what is estimated will be necessary until reserve replacements could be secured." On that he secured the agreement of the North Atlantic Council in December. They agreed that from here on, what we will concentrate on-I would just like to read this one paragraph-if you will put that chart on entitled "North Atlantic Treaty Organization"-the military committee reported to the Council as follows: (Discussion off the record.) Mr. NASH. Now, that being the guideline that the Military Committee gave to the Council at its interim meeting in Paris, they came out with this conclusion, this guideline for the determinations that have to be made in April. (Discussion off the record.) Mr. NASH. Now, on that note, I would like to conclude by repeating what I started out with and that is that the military have set military requirements and the job of the NATO Council, the Ministers themselves, is to see how much their nations are willing to take on in the direction of meeting those military requirements. (Discussion off the record.) Mr. VORYS. Who is it who figures that there will be half a billion dollars more needed for infrastructure? Mr. NASH. Nobody has figured that out yet, Mr. Vorys. That is right off the top of Nash's head. I am guessing. SACEUR may come out with a recommendation. For building expenses, I need jet fuel lines and I need radar nets, and so forth, which will be included. Not just airfields, but also the things necessary to make airfields fully operational. That is just a guess off the top of my head and maybe it would have been better had I not thrown it at you, but I wanted to give you some sort of a feel as to the end of the road figures. Mr. VORYS. I got a feel out of that. Mr. NASH. Probably SHAPE would scream and say that probably is not nearly enough. (Discussion off the record.) Mr. NASH. I want to emphasize something that I should have brought out earlier, that a good part of this total infrastructure program has to be met on a national basis, barracks and all that sort of thing. It is only common-use facilities that we are talking about in this infrastructure program. Facilities that a number of NATO peo ple will use. Anything that is ascribable to a nation's forces, they have to finance for themselves. But because General Ridgway would fight his planes off all the fields-you cannot say that the fields in France should all be financed by France, because we have a lot of United States forces on those fields, now in peacetime deployment-if you can call these perilous times, peacetimes but in times of war he will have to fight those planes on and off the fields no matter who may be on them in noncombat status. He has to push them around as operational requirements call for. The same thing is true with regard to communications, obviously. That belongs to the whole NATO force and not just to that country where they happen to be located. Mr. VORYS. For instance, on infrastructure, I have in mind a story an Air Force officer told me about a field in Bordeaux where the United States Air Force was encamped on one side of the field and there were empty French barracks on the other side of the field. Mr. NASH. I saw that. I think we got those boys out of there before the cold weather came. Mr. VORYS. Why were they not in that empty French barrack? Mr. NASH. Because they were supposed to be moved out of there very fast. Some of those French barracks go back to the days of Napoleon. They used to be stables in those days, and I think some of our boys would prefer to sleep in a tent than some of those smelly, unsanitary places. I would much prefer some of the winterized tents to some of these old, middle-aged barracks. Mr. SMITH. Are there any further questions? Mr. CARNAHAN. I have no further questions. Mr. PROUTY. I would like to ask one question, Mr. Chairman. (Discussion off the record.) Mr.VORYS. If nobody has a question, I want to make an observation. When you start off your history of this thing with March 17, 1948, in the future you might add this, as to who started this concept. In this committee an additional title for foreign assistance was prepared by our staff and by the State Department providing military aid to Europe on the basis that there was very little security to be accomplished with the Marshall plan. Some of us thought there was no sense in having an economic buildup to create a richer prize for the Communists to take. On the morning of March 17, 1948, word came to this committee that President Truman was coming to the committee room immediately after his speech on the floor, we understood to discuss this proposed title which was drafted and copies of it are here available. And so the committee rushed up here to the committee room immediately after the President finished his speech and we were sitting here waiting for the President and some newspaperman came by and said, "Is the committee having a meeting now?" Somebody leaked it to him and said, "Yes, the President is coming up here right now." This newspaperman said, "Well, that's a funny thing, I saw him go out the back door of the Capitol 20 minutes ago." Now that is the end of the story. Those are facts that can all be corroborated by committee records and staff records. I have repeatedly called the attention of the House to these facts that I have just mentioned. So, on the general concept, it did not start with the Vandenberg resolution as far as Congress is concerned. It started with a proposed title to be placed in the Marshall plan and communicated to the executive branch and with that much of a communication back. I did not know whether you knew that. Mr. NASH. No, sir, I never knew that. Mr. VORYS. Your story about NATO starts in 1950 or 1951. With this committee, NATO starts in the fall of 1949, when we were told what NATO was going to do and what our part of it was going to be. Now it has changed so very much since then-the statements as to what we were to do and what others were to do has changed so much and so often since then that some of us wonder. We do not think we are confused. We think those who have been talking to us are confused. (Discussion off the record.) Mr. NASH. No, sir, that is not the answer to that and I am not going to give you the answer to that. I am going to let General Ridgway come before you and this committee and tell you what he can do with the force he has and expects to have by the end of 1953; how much of a job he thinks he can do with all of the things at his command. Now please, in comparing the relative strengths of air power, do not forget the air power that the United States has in the event a conflict in Europe comes into play. Do not forget the accomplishment of atomic power that is possible now, in an area that we feel quite confident at the present time the United States has a substantial margin of superiority. (Discussion off the record.) Mr. NASH. I tried to be a little more subtle about it in kicking this statement off when I ascribed it in large part to Senator Vandenberg. The fact of the matter is that Senator Vandenberg-and on the basis of the additional history you have given us today-this committee is in large measure the father of the program and General Eisenhower in his capacity as the first Supreme Commander in Europe, gave it the strength to get up off the ground and begin. I say in conclusion that in terms of 2 years-which is all that it is in the time when he went to Europe-only 2 years-is something that we do not have to be pessimistic about. Mr. VORYS. Is it your purpose to go into offshore procurement? Mr. NASH. I will be glad to come back and talk to you about it. Mr. VORYS. Are there any contracts now in force for procurement of ammunition in Europe? Mr. NASH. Yes, sir. $750 million. I should qualify that this way: $200 million were placed in the way of ammunition contracts in Europe last year, 1952. Approximately $550 million of contracts have been, and are now being placed in Europe. Mr. VORYS. Not "are now being." Mr. NASH. Let me tell you what that means. Mr. VORYS. I am allergic to "obligations." Mr. NASH. $300 million of authorization was placed in the hands of our Army procurement officers in December. They put out com petitive bids for all the NATO countries over there. It took 60 days for those bids to come in and be analyzed. General MacMorland came back here with the results of those bids about 3 weeks ago and we approved his going back to Europe to place contracts and we hope he has those contracts pretty well placed by now. Mr. VORYS. Does that include the 200 that you have already placed? Mr. NASH. No, it would be in addition, making a total of $750 million. $200 million has been in process from 6 to 8 months. Mr. VORYS. When you say, "in process" does that indicate there has been any money spent? Mr. NASH. There has been some money spent. Mr. VORYS. In other words, you have a firm contract with a known person? Mr. NASH. We have gotten deliveries. We have, therefore, spent money. But I want to say on that-because you will probably want a lot more details on it when I come back to give you the whole offshore procurement program-it takes some time for these countries abroad to get into production and the amount of actual deliveries to date, I would not say were enormous. Mr. SMITH. I might say to the committee that that problem that Mr. Vorys has just mentioned is one of our four points that we are considering. We have had NATO objectives, the offshore procurement, and also the question of what they are doing in Europe to produce for the program. We can have that information at a later date. I think that is all then, thank you, Mr. Secretary. (Whereupon, at 12: 10 p. m., the subcommittee adjourned to reconvene at the call of the chairman.) |