MUTUAL SECURITY APPROPRIATIONS FOR 1954 THURSDAY, JULY 9, 1953 UNITED STATES SENATE, Washington, D. C. The committee met at 10 a. m., pursuant to call, in the Old Supreme Court Room, the Capitol, Hon. Styles Bridges (chairman of the Committee) presiding. Present: Chairman Bridges, Senators Cordon, Saltonstall, Young, Thye, Mundt, Smith, Dworshak, Dirksen, Hayden, McCarran, Maybank, Ellender, McClellan, Robertson, and Magnuson. MUTUAL SECURITY AGENCY OFFICE OF THE DIRECTOR STATEMENT OF HAROLD E. STASSEN, DIRECTOR FOR MUTUAL SECURITY, BEFORE THE APPROPRIATIONS COMMITTEE OF THE UNITED STATES SENATE GENERAL STATEMENT Chairman BRIDGES. The committee will be in order. The authorization bill for mutual security has not been enacted in law. It passed both Houses with different figures, and it is in conference now between the House and the Senate. This is perhaps an unusual procedure for the Appropriations Committee to proceed before we have a definite authorization. But, in order to conserve time and because it is necessary for the Congress to proceed in order to finish its work this year, we are proceeding this morning. The purpose of the hearing is to determine how much of the American taxpayers' money should be appropriated by the Congress for the purpose of financing the foreign-aid program. Among the questions we are going to discuss are: How effective has been the money already spent? What is the present need of the recipient countries? How far can this Government go toward financing this aid program without jeopardizing our own economy? Just what can be done through this program for the mutual security of the free world of which we are the leader? The first witness we have called this morning is Mr. Harold Stassen. Governor, we will be glad to hear from you. You proceed with your statement. The committee from time to time would like to ask you questions. 1 OUTLINE OF APPROPRIATION REQUEST Mr. STASSEN. Thank you, Mr. Chairman. Mr. Chairman and gentlemen of the committee, I wish to thank the committee for the opportunity of appearing before you this morning. I will respond to your questions as you see fit. In making the opening presentation, it is my privilege and responsibility to present for your consideration the broad outlines of the appropriation request for the mutual-security program during fiscal year 1954. This program, in its size, composition, and major objectives, reflects the philosophy and principles of President Eisenhower which he has so often and so eloquently expressed. Its basic purpose is, in his words, "the long-term security of the United States living in the shadow of the Soviet threat." I would like to emphasize that this is not in its prime aspect a foreign-aid program. It is in its prime aspect a security program for the United States and the free nations whose security is essentially indivisible. PROGRAM OBJECTIVE The program objective is peace-peace with justice, peace with freedom, and peace with progress. It seeks to bring about among the free nations mutual strength, mutual confidence, mutual understanding, and mutual progress. The program is a product of the world situation in which we unfortunately find ourselves. It represents one of those measures which is indispensable to the defense of our liberties and to the preservation of the freedom, common heritage, and civilization of our people. Free nations continue to live in peril, and their ability to survive as free nations now depends upon their ability to defend themselves. Before turning to a more detailed analysis of our specific appropriation request, I believe it is important to outline in some detail the fundamental concepts that underlie these requests and the long, painstaking process of analysis and screening that lies behind them. In introducing this particular subject, I can do no better than to quote from President Eisenhower's message to the Congress of May 5, 1953, in which he said the following: The mutual-security program for 1954 has been developed by the new administration after the most careful study and deliberation. All elements of the program have been reviewed in great detail, all proposals subjected to thorough scrutiny. From this study I have come to certain clear conclusions. MAINTENANCE OF ADEQUATE DEFENSES First, the United States and our partners throughout the world must stand ready, for many years if necessary, to build and maintain adequate defenses. Second, to accomplish this objective we must avoid so rapid a military buildup that we seriously dislocate our economies. Military strength is most effective indeed it can be maintained-only if it rests on a solid economic base. Third, we must help the free nations to help themselves in eradicating conditions which corrode and destroy the will for freedom and democracy from within. Fourth, it is necessary to do more in the Far East. We are proposing to make substantial additional resources available to assist the French and the Associated States in their military efforts to defeat the Communist Viet Minh aggression. Fifth, since it is impossible to forecast precisely the year and the moment when the point of maximum military danger may occur, the only prudent course calls for a steady military buildup, with our partners throughout the world, sustained and planned so as to use our joint capabilities with maximum efficiency and minimum strain. The request before you, and the proposed mutual-security program which it is designed to support, results from an exhaustive review of our national-security policies as well as from a detailed evaluation in the operation and effectiveness of past and present mutual-security programs. It reflects months of work in and under the direction of the National Security Council, where each of our security objectives was carefully studied and its importance weighed in relation to domestic fiscal considerations. The request before you also represents an attempt to balance the need for military strength on the part of ourselves and our allies with the equally important objective of maintaining sound economies here and abroad which are capable of sustaining that military strength for an unpredictable future. FINDINGS OF EVALUATION TEAMS The program also takes into account the findings which were made by special evaluation teams comprised of nearly 60 outstanding leaders of American industry and finance in 12 of the major countries now participating in the program. In addition, it has taken into account the experience, knowledge, and the perspective 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 April meeting of the North Atlantic Council in Paris. I might also say that the trip which Secretary Dulles and I made to South Asia and the Middle East strengthened our conviction that the portions of the program proposed for these areas are of the greatest urgency and importance. I have a few charts prepared which emphasize certain points and the reasons for them. With your permission, I might refer to some of them. First of all, on the European defense buildup and the matter of our declining requests for appropriations in that part of the worldif the charts will be put up, the chart on the European defense buildup, I will make some reference to it. (The chart referred to follows:) U.S. APPROPRIATIONS FOR AID TO EUROPE AND EUROPEAN DEFENSE EXPENDITURES While the U.S. contribution has been large, the main cost of the European defense effort has been borne by the Europeans themselves. Title I appropriations for economic and defense support, Titles I and for military Actual appropriations have been adjusted to effectum ✶✶ Reflects estimated savings of $03 billion carry-over from FY 1953 funds |