Mr. PETERMAN. That is a very tricky question. Mr. PETERMAN. If you get into some of that Middle Eastern squabble, I would like to see them spelled out before I would give an answer on that, because those people are pretty hard to please and as you know, there is an underlying battle going on down there which interests them more than containing communism, and I am only now paraphrasing the Secretary of State. Mr. FULTON. Then, don't you think it is much better for us at this time not to put specific conditions on the aid to respective countries, but try to deal with the problem as an area and see what would be best economically and militarily to the security of the area as an overall program? Mr. PETERMAN. Militarily I do not know what is planned in this program in the Middle East. I do not think you have to give directives to the Turks any more. They are in this things as deeply as we are. But some of these other people, I believe, even if you gave military aid, for example, to Saudi Arabia, it ought to be in some form of a deal. They are very proud people. I have had a whole afternoon's interview with Prince Feisal, the Foreign Minister, over here not long ago, and it was emphasized to me that they want things done in a trading way and on an equality basis. Mr. FULTON. Would you agree with the approach of this committee, then, if we decide on it finally, that this Middle Eastern program should be an overall program, and should be aimed toward the benefit of all the peoples of the Middle East, without any specific and binding commitments or conditions being attached for each country or each group? Mr. PETERMAN. I think when you give military aid to any country or group, it is a binding commitment. We are not going to give fighting hardware to any government and then have them declare themselves neutral. Unless that is understood, I do not see much point in giving it to them. Give more to those who are willing to stand with us. Give more to the Turks, then. Mr. FULTON. Within the middle eastern program, then, you would have an area of discretion that during the time that fiscal year 1954 expires we could nevertheless make changes between those who cooperate and those who do not cooperate. Mr. PETERMAN. Yes. I would certainly leave myself an out on this thing. Mr. SMITH. Thank you, Mr. Peterman, very much. (The following has been submitted for inclusion in the record :) [From the Philadelphia Inquirer, October 17, 1952] BUNGLED BILLIONS-ANONYMOUS SANTA CLAUS RIDICULED FOR SOFT POLICY (Copyright, 1952, by the Philadelphia Inquirer) There is no definite plan for extricating the American taxpayer from Europe where $17 billion has been invested for global security. Nor from Asia, Africa, any foreign area where, for good, bad, and mediocre measures his money is being spent. It is absolutely certain that militarily, United States forces are not going to be withdrawn from Europe in the foreseeable future. They may be stationed there in considerable numbers and capacities during the lifetime of the present generation. That is the thinking at SHAPE, our NATO control point, where incidentally, the thinking seems clearer than in many of the political-economic councils of our Allies. Such is the outlook for collective defense under the North Atlantic Treaty Organization. As of now, we are expanding, rather than limiting the perimeter of aggressive Communist containment, studding it with more or less permanent bases of air-military-naval operation. The manning, equipping, and maintaining of these and the aforesaid American forces is a continuing drain on the United States budget, but it is besides the economic outlays about which the previous chapters in this series related. We have pledged our future adherence to the NATO program of defense, and the support with force if necessary, of 55 non-Communist members of the United Nations. But the economic giveaway program, otherwise called the Marshall plan and since subheaded "European Recovery, Economic Administration, Mutual Security Assistance," with productivity and technical assistance (point 4) coming up, that is something else again. How long should it last? How much more must we give? Everywhere we inquired on these contingencies came merely a shrug, a smile, or a facetious evasion linked to a remark like: "Well, if we want any friends at all over here, we better get out fairly soon. Nobody likes his keeper." Then came the inevitable incident of the unhappy giver, and his failure to be appreciated, or even thanked. For every story of gratitude, there seemed to be 3 or 4 of the reverse, with numerous recitals of anti-American feeling, snide cracks, resentment and crude behavior candidly conceded. As we listened, there came a wry memory-like the fleeting scent of frying bacon at the camp orienting the lost huntsman in some unfriendly forest. We remembered about Spam in Great Britain. During the late war, one of the staple shipments to the United Kingdom under lend-lease was processed pork products. There were several brands but they all got the name of "Spam," and since under austerity and the bombs, it was easily shipped, and could be served direct from the tin cold or fried, the British had it-and learned to hate it. They ate Spam morning, noon, and teatime, then had it some more for evening snacks. There were more barracks room jokes about Spam than would fill Joe Miller's book. Then the war ended, and President Truman overnight put finish to lend-leaseand Spam. Soon it disappeared from British supplies, and presently those who scoffed were trying to replace it for sandwiches and meals. In no time at all distaste became yearning, then downright hunger. Today, sadly missed and highly regarded again, nobody jests in Britain about Spam. They love it—when they get it. American foreign aid is a complicated problem to administer, and after visiting Austria, Greece, France, and Italy, it is evident that Diogenes with his lantern should be high on Ambassador William H. Draper's MSA staff. We need him for tracking down honest officials among the European politicos. But if no other answers can be given with confidence, this one can: They'll miss us when we're gone. That's for sure. When the Marshall plan was originally conceived, among the end objectives thought out in broad terms by Gen. George C. Marshall, Dean Acheson, and the late Senator Arthur H. Vandenberg and their aids, was that to be successful it must be based upon carefully designed lines that would benefit solid United States interests wherever applied. There were to be definite objectives, in whatever areas the aid was dispensed. But somewhere along the 4-year route of ECA-MSA, these have skidded away, top officials today concede. As Harriman explained the reasons for our allies trading their newly staked steel and ships and other goods to the Soviet Union, he said this was not expected in the original concept. Other ECA leaders have stated again and again that our aid aims should be consistent, worked out with the receiver nations, and regulated with a terminal date in view. All this was broadly outlined at the start, but lost in the shuffle. The very ones who once directed the whole show insist that honesty, efficiency, and certainly realistic application of the aid are fundamentals. These things were not always apparent in Europe of today. In this connection we noted, especially in Great Britain, Germany, and sometimes in Italy, that a realistic campaign, using understandable media, to tell the people about Marshall plan is getting down to levels where it can do some good. "Until lately, however, altogether too much time was spent by our publicrelations people in convincing those who needed no arguments. They overlooked, as did much of the aid dispersal, the little people who were most exposed to poverty, ignorance, and the clutch of communism. Meanwhile, as the billions pour their flood of raw materials, manufactured goods, and lush credits to inflated national budgets, with the "comeback" counterpart forming unexpected backlogs to replace uncollected domestic taxes, unlevied excises, undisciplined currencies, and overheads of the various welfare states, the dividends of dislike and peremptory flashes of high-level asperityM. Pinay's in France is illustrative-have backed Uncle Sam, the anonymous Santa Claus, into a defensive position. Quoting 1 American aid official, who has spent nearly 2 years at serious efforts to help Europe right its economy: "Our policy these days boils down to this: 'Don't make them mad; they might not take our money.' It is this "soft" policy we found in widest disfavor among the very people designated to apply it. One of the topmen in our mission to France, having sought to justify the use of offshore procurement millions, big dips into the French counterpart funds, and further demands by the sensitive French Government leaders, was shocked when in turn we suggested that many citizens of stature in France would welcome a sterner set of aid conditions. Yet that is true. And reflecting upon the things we learned, there remains the question often asked by readers of this series of articles: "Well, what can be done about it?" Some things are being done. With the French, we are now laying down the rules, take or leave them. The Pinay outburst last week, while described by Washington officials as a "play to French pride by snapping at the biggest hound in the pack," came after our people privately advised the French Government to get on the ball. France can dry out plenty of its watered budget, say our officials. It can revamp a particularly ineffective and unfair tax system. It can crack down on the flight of capital to Switzerland by stopping the flow of MSA help to those who siphon it to private bank accounts. They can conscript their soldiers for 2 years, as do the other NATO countries, and quit crying about it. They can see that contracts for United States airfields, etc., are properly carried out, and insist that contractors pay living wages for the workers. In Washington recently we heard from MSA spokesmen definite dissatisfaction with our role, sitting on the facts regarding Austria. Nobody is happy over the "Nervous Nellie" pose, while Drs. Joham and Laendertshammer scoop the cream off our aid funds, put them to private accounts. But when someone suggests matching the Soviet Union's firm military contact, through its continued presence of occupation troops, the question is asked, "But what will Mom say, when her boy is drafted to more of such duty?" Ben H. Thibodeaux, economic chief of the United States Mission in Austria, said 44 percent of ECA investments there went to the Red zone of occupation. The other 56 percent were in areas controlled by United States and Allied troops. The Russians drain off all heavy industrial profits in their zone, use them against the recovery of Austria. Yet top United States authorities in Austria agree they are loath to upset a rickety governmental car, for fear of a Communist coup. Italy's population problem is more difficult to solve, but the United States delegation in the United Nations is currently straddling a debate over African colonies. Minorities from that region want more independence since Libya was declared a free country by U. N. Yet NATO leaders proclaim we must keep those areas under control, and our French friends vehemently charged that trouble-making, oil-seeking outsiders stir up these minorities which they insist are incapable of establishing either political stability or economic self-sufficiency. But those badly developed regions, everyone admits, could sop up much of Italy's overflow. Libya is a prime example of a desolate, inefficient new country, which, like much of Africa, lies open to development-by something besides point 4 and United States tax moneys. Some of the MSA personnel, out of sympathy with American planners who want to quadruple Europe's already rising production, would put on a drive for higher wages, less inflation (by stopping the political banks from printing it in Greece, for example) and new markets. Roving the capitals of Europe, you find that an uncommonly large number of key positions are held by leftist thinkers, by experts qualified by their high positions in labor unions in the United States, or their cleavage to the various do-good agencies of the New Deal, the Fair Deal, the CIO, and the folded up staffs of pinko newspapers here at home. One such gentleman has been promoted from a small United States mission, where he did a notable job in brushing off citizens of that country who could have spread real, pro-American views. Once a Washington journalist, he is now a top "political planner" in Paris, with a deputy. We tried to call on him, but he was always away on "holiday." Our mission to Germany contains one young man entrusted with an important media of Western orientation in West Germany, who confided that thought the Communists would prevail in Berlin some day, it was just a matter of time. Some of the people on our staffs are not even Americans. We met several of British citizenship via expatriate service during the war, usually refugees from the Axis countries, deep dyed with defeatism, but entrusted with spending American taxpayers' funds. This is of a piece with the effort by our friend Agon Schall, in Paris, who spent 2 weeks running from office to office in MSA before he discovered he was getting the "brush-off." His mission? He was trying to put a large empty building at American disposal-absolutely without cost to the United States. But nobody in our Paris establishment would listen to him. We have spent a lot of counterpart moneys-converted dollars on building new ones. In Greece, Dowsley Clark and F. Paul Keppel are doing a remarkable public relations job. Leroy Viara in Vienna, Joe Evans and his staff in London, likewise. Paris has plenty of PRO's, and those we met were most helpful. Still, we find odd ways of spending our 10 percent of the counterpart funds. There was in the Paris headquarters a fantastic psychological test of some 100 questions; all personnel, high or low, had to answer. It sought to make sure they knew enough to be in Europe, yet W. Averill Harriman with one nod dispatches 200 families with furniture, and brings the same number back-no tests whatever. Someone wanted to record all the Marshall plan country Christmas carols, play them willynilly throughout the American scene. "International good will," they said. Messrs. Draper and company said nix. Christmas carols have been recorded and should be available, long before MSA. Moreover, there was a feeling that singing songs at Joe Stalin didn't fit into the NATO scheme. A source of some friction is the difference in pay scale of United States and the noncitizen office personnel. European stenographers, etc., get far less than our people and are not given the extras except for the mess privileges. Some of the United States personnel is admittedly weak, unqualified, and quite often inadequate to the positions they hold. We have a mixed bag of former military government officers, WPA directors, appointees by crony influence, and roving Americans with a yen for foreign exposure. Some are making a terrific try at the job. These in time have succeeded in getting more good than waste from our money; others have gone through the motions, but never qualified for the big handout. This brings up what one top man-he declined to be quoted-said is our No. 1 difficulty in the Marshall plan: It was implemented so quickly, that only a few top men could be placed, and the rest were filled in. We are short-very short, in fact-of dedicated, trained, language-accomplished and oriented foreign servants. We stepped into the British boots without the appetite or many of the tough attributes they had for such a task. We have let clever continentals flimflam us, cajole, bulldoze, and get away with our money, often by bluff. Not many Americans care to leave their centrally heated, beautifully appointed, well-serviced homes and communities. Not for long periods of service. "We should have begun long ago to train scores of young men for this work. Not bring them fresh and green and hope they acquire the knowledge while on the job," one veteran declared. Of course we need a diplomatic equivalent to West Point and Annapolis, where we train those to enforce but not devise our foreign policy. Another thing, again at high level, United States policymakers should listen to protests against our allies trading with the enemy. That is dangerous. It is hurting our own lineup by dissension, and helping the Commies with vitally needed materials. On the positive side, several things are showing up well. The Schuman plan for integrated coal-iron-steel production and distribution is under way. A "green pool" to try and integrate food production is in the works. One of our agricultural projects in Turkey was so successful that this staunch, fighting ally has changed from a grain-importing nation to one with wheat to sell. Highways have been improved and built, and Turkey is moving along fastest of the middle eastern areas. Most important in the private-risk department are the 40 or more capital guarantees issued by the United States Government through MSA. By this process, investors are protected against more "expropriation" such as Mossadegh's on British oil, and the Red comrades' seizures of oil and other properties in Hungary, Rumania, Czechoslovakia, etc. The United States by this method has encouraged Firestone & Co. to back a technique-sharing Phoenix Tire Co. in Hamburg. Otis Elevator has a proposition going for it in Berlin. Johns-Manville Co. has put out equipment and funds in Germany as the West Germans cry for more such financial-industrial help to get them going again. By this method, say MSA officials, wary Americans can be led into putting much back into turbulent Europe and other areas where nationalization and socialism, if not communism in some cases, is a definite risk to private enterprise. Until this private investment gets up courage and faith in our allies, they point out, the United States taxpayers will not get out from under. The overriding question we encountered in Europe is: "How strong is an ally when the guns begin to rumble?" Over our homecoming meal we discussed this with an old friend, the No. 1 briefing officer we correspondents had, Col. B. A. Dickson, the First United States Army's wartime G-2. Wise to the ways of Europeans, he recalled a line from Mr. SMITH. Will you give us your full name and occupation? Mr. SMITH. Your address. Mr. SMYTH. 44 West 44th Street, New York 36. Mr. SMITH. I believe you have a statement which you wish to present, Mr. Smyth, at this time. You may proceed, Mr. Smyth. Mr. SMYTH. May I say before I start that I am just a businessman. I am not a politician, a diplomat, or anything like that. I went to Europe in World War I and it might be difficult for me to remember what to tell you so I have written it down. Mr. JAVITS. May I say, Mr. Smyth, neither do we. Mr. SMYTH. I am glad to see these ladies here because I represented companies from their own towns in Yugoslavia. Through your member, the Honorable Lawrence H. Smith, Representative from the First District, Wisconsin, you have called me here, as I understand, to hear my opinions on the general conditions in Yugoslavia, the value to us of the very large financial and material help we have sent and propose to send to Yugoslavia, and on Tito's reliability to us as an ally. In order to enable you to judge my qualifications to speak to you on these subjects, I'd like to submit the following information about myself to you : 33064-53--62 |