That is the whole free area. Your recollection is very accurate, Mr. Vorys, and it is a little less than that billion dollars we were talking about.

Mrs. KELLY. On which list is rubber?

Mr. HANSEN. That is on the Battle Act category C list for quantitative control.

Mrs. KELLY. Do you not believe it should be on list I?

Mr. HANSEN. We do not believe it is a primary strategic item. It is subject to quantitative control. Its value lies in the quantity. A little bit of the reason behind that is fairly simple and that is that the Soviet Union has expanded tremendously-unfortunately with our help during the last war-their production of synthetic rubber. They have almost enough synthetic rubber to take care of their needs. That does not mean they can get along without natural rubber completely. They have to use it in certain military end items and in certain other manufactures but they have a stockpile of rubber, also. It is a question of what you affect by stopping this rubber. This rubber represents wheat, and timber, to the United Kingdom and it represents to the southeast Asian countries one of their money crops. The more you cut down on the availability of rubber markets-even in this country-the more chronic become your political, sociological, and economic problems in southeast Asia.

Mr. BATTLE. I know what you say is true but I do not think we should underestimate the importance of rubber. China has just made a 5-year agreement with Ceylon and as I remember it she is paying some 40 percent above the market price. So far as I am concerned, it is a very strategic item.

I am wondering, Governor, if you have in mind a review of the list of strategic items with the possibility of reclassification of such items at least reviewing them to consider reclassification of such items as certain types of ball bearings and rubber and that type of thing.

(Discussion off the record.)

Mrs. BOLTON. Is that all, Mr. Battle?

Mr. BATTLE. I would like to compliment these gentlemen with whom I have been working for a long time and I say we still have a lot to do. Mr. STASSEN. We agree there is much more to be done and we feel some progress has been made.

Mrs. BOLTON (presiding). Are there any other questions?
We want to thank you very much for appearing with us.

(Whereupon, at 4 p. m., the committee adjourned to reconvene at the call of the chairman.)

MUTUAL SECURITY ACT EXTENSION

WEDNESDAY, APRIL 29, 1953

HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, Washington, D. C.

The committee met, pursuant to call, in executive session, Foreign Affairs Committee room, United States Capitol, at 10:40 a. m., Hon. Robert B. Chiperfield (chairman of the committee) presiding.

Chairman CHIPERFIELD. The committee will come to order. Governor, we are glad to have you back, safe and sound. If you care to do so, you may proceed in any way that you like.

STATEMENT OF HON. HAROLD E. STASSEN, DIRECTOR FOR MUTUAL SECURITY

Mr. STASSEN. Thank you, Mr. Chairman.

I am pleased to respond to your invitation to report to you from the standpoint of the Mutual Security Program, on this meeting of the North Atlantic Treaty Organization which has just been held on April 24, 25, and 26, in Paris.

I might make a very brief opening statement and then respond to your questions.

May I say first of all that it is my view that the meeting was a solid success. It marked a significant advance toward the mutual security objectives of our country and it established a sound base for further progress in developing the combined military strength of the free nations of the Atlantic community.

Now, one of the main reasons for its success was the able, affirmative participation of the Secretary of State of the United States, John Foster Dulles, who personally chairmaned the United States delegation and spoke for the delegation in the NATO council meetings. I believe the committee heard his report yesterday and questioned him in that matter.

I will speak today of the specific operations of the Mutual Security Program in relationship to this NATO meeting.

There were six definite results which were obtained in this regard. First-a matter that I believe the Secretary referred to, to some extent of the signing of contracts for the long-term production of the very best type of modern, combat jet aircraft, with substantial participation by a number of NATO members in both their financing and production. The United States commitment is entirely within the previously granted appropriations and previously approved programs of the Congress. That the total group contracts amount to $559 million, of which the United States pays a little bit less than

half. The other participations are by Belgium and the Netherlands which are contributing about $120 million; France, which is putting in around $90 million to $95 million; and Britain, which is undertaking financing to the extent of $70 million to $75 million.

These are contracts for the Hunter-Hawker aircraft of the British, and the Mystere 4, which is the new model of the French plane. The Mystere 2, you may recall, was not considered so satisfactory. The Mystere 4, our Air Force has evaluated as an excellent plane and the Hunter-Hawker, the British model, they have evaluated as being an excellent plane by actual tests of models. They are both swept-back wings, jet planes.

These contracts reflect a part of the new policy we are developing under which we seek to establish a production base in Europe for the multinational production on a sound basis. Our own offshore procurement money joins with money put up by the European countries to get a sound, overall production contract. The United States will obtain specified planes from these contracts in the overall total.

Some parts of some of the Hunter-Hawker's will be produced in Belgium and other parts for the same planes in the Netherlands with, of course, the complete plane being turned out in the United Kingdom. The whole project is fitted together on a basis that production experts say makes a sound program. It is anticipated that additional countries may buy some of these same planes. This means that you have production rolling on an approved plane of this kind.

In undertaking this arrangement, we did have to project the possibility of deliveries all the way up to July 1956.

Mr. MORANO. That is 3 years?

Mr. STASSEN. Three years; that is right. That, of course, means that if anything happens in the interim and this flow of planes cannot go forward to the intended recipients, or used for other MDAP needs, the United States will own these products. We therefore approached our Air Force on the basis of, "Are these planes that you would like to own," and that is the kind of evaluation we got from the Air Force before proceeding.

I will run quickly through the other points.

The second point was an agreement upon a 3-year program subject to the approval of Congress and the other parliaments-and that is right in the agreement-for the construction of essential airfields, communications, and warning networks and related facilities. Such facilities are called infrastructure. The agreement provides for the participation in the financing by everyone of the 14 NATO members. This agreement specifically covers the remainder of what has been referred to earlier as the fourth slice of infrastructure and the entire fifth slice. This is the complete infrastructure job and it involves $770 million worth of construction over this 3-year period. Our part is forty-two and a fraction percent.

When you consider that we are paying approximately 35 percent of the expense of all of the United Nations-the central expense of the whole United Nations-we feel that it was a reasonable, good transaction, under all the circumstances, to get our NATO share down to about 42 percent.

We were particularly anxious that everyone of the 14 nations should come up with some hard cash, and they have. We feel that that is a

step that will lead to better planning and more economical use of the funds in the infrastructure program.

The third solid accomplishment was the adoption of firm force goals for 1953. You will recall that at the December meeting they did not reach a conclusion on firm goals. We now have firm force goals which are within the capabilities of the members, and are within the potential of United States 1953 military armament deliveries, and which will make up the short-falls of December 1952, and will add substantial military strength beyond the 1952 goals.

The fourth important matter was the development of an understanding by our NATO partners of the general nature of our future Mutual Security Program-of the limitations on future United States programs-and the initial shaping of their own plans accordingly. This involved some of them realizing they were not going to get the levels of aid which they had assumed in their own preliminary plans. We will be going into that in detail next week when we come up with our program.

The fifth important matter was the alerting of the members to and a discussion with them on the study now underway by SHAPE of the effect of new and modern weapons upon the defensive capabilities, of Western Europe.

The sixth significant point, as the Secretary undoubtedly emphasized to you yesterday, was the reemphasis to the entire NATO Council of the importance of the European Defense Community Treaty to the defense of every member of the North Atlantic Treaty.

Now I might add, in brief, that the United States delegation also included the Secretary of the Treasury, Mr. George Humphrey, who was extremely helpful through his keen analysis of the financial problems involved and who skillfully promoted the understanding by all of the importance of a sound economy for the long-term strength of NATO.

The Secretary of Defense, Mr. Charles Wilson, was a third member of the United States delegation and he demonstrated his unique grasp of the essentials of defense production. He reported on the deliveries of arms which could be expected during 1953 and counseled wisely on the steps which could be taken to obtain more defense for less money. He particularly reported that with respect to a number of the critical items as to which there had been a delivery lag last December, he could now project larger deliveries during 1953-in some instances doubled deliveries-than projected in the forecast that was made in December 1952.

I am also pleased to report to the committee that the United States delegation was unanimous on every position taken in the NATO Conference, with its own position carefully worked out in advance in delegation meetings and based on thorough staff work by the departments concerned.

It is anticipated that the next meeting of NATO will be in the month of October. I will say very frankly to the committee that there are many difficulties ahead, but much mutual-defense progress has been made and there is a determination and a rising confidence which favorably reflects the effective leadership which President Eisenhower had given in his earlier role in SHAPE and is giving now as exemplified in his April 16, 1953, address, which obviously had been read and studied throughout the NATO membership.