BUDGET CONDITIONS OF FOREIGN COUNTRIES

Senator MAYBANK. You say that sound economy both at home and abroad is necessary. My information is that many of the countries do not have a balanced budget. Am I correct?

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Mr. STASSEN. Many of them do, but most of them do not. will present to you in the confidential document, including the secret military facts, the details on the budgets of all these countries.

Senator MAYBANK. I am very much interested in having the budgets balanced, but I will delay those questions.

Did you say "confidential"?

Mr. STASSEN. In our classified document which will go before you in your executive sessions, we will have the exact budget and balanceof-payment situations of all these countries.

Senator MAYBANK. I happened to see in the papers about these countries that we just completed, a $10 million deficit. Others have said we are going into another deficit.

Mr. STASSEN. One more thing to have in mind in that connection is that we are turning our program at the present time from the rapid defense buildup that naturally lagged behind the new taxes which were then voted in the last 2 or 3 years to a level-off in the defense approach, a decline in foreign aid. In fact, in this request we present to you, we are are requesting a reduction from the $7.6 billion in President Truman's budget to this $5.2 billion of new appropriations money, which is the largest reduction of any portion of the budget, and of course which must come on down.

Senator MAYBANK. I understand that, but we were told it was to end this year.

Mr. STASSEN. I think that was in connection with the Marshall plan on the economic side and prior to the Korean war which has greatly brought forward the necessity of arms strength throughout the world. In other words, the whole posing of the Soviet threat in the world situation, and the outbreak of the Korean war which demonstrated their willingness to turn to force of arms, made a very major difference in the world-security outlook.

DECLINING PARTICIPATION OF UNITED STATES

This chart indicates the building up of the European defense effort on their own, and the declining participation in that of the United States properly declining. But it shows the European efforts in supporting their divisions, their squadrons, and their naval units coming up quite rapidly, and we feel it will continue to build that strength while we decrease the United States portion in Europe.

One reason that the rapidity of decline of United States support in Europe is not reflected quite as rapidly in the overall total is that the Far East and the Near East have brought new and greater requirements for United States participation in world security.

If I could have the chart on the resources in the world situation and the Soviet picture, I think it emphasizes the importance, from the standpoint of United States national security in the years ahead, of the whole world situation and the impossibility of separating United States security from a concern in each of these major areas of the world that are involved in the mutual-security program.

(The following charts were submitted:)