it with less personnel. Now, has that section 504 (d) to your knowl-edge, been carried out?

Mr. HARRIMAN. Yes. As of the first of January, if I recall it correctly, there were 16 percent less Americans on the MSA Administrative payroll at home and abroad than on August 31, 1951. The larger cut was abroad. And, of course, there were included some additions to some of the newer missions in the Far East. But the over-all administrative cut was 16 percent.

I should point out that I have two responsibilities; one, as coordinator, and one, as the Administrator of MSA. If you add to the total figure the figures for personnel in my own office as coordinator, which I am not sure is quite fair, the overall cut would be 13 percent. Senator SMITH of New Jersey. How would that over-all figure compare with previous ECA figures?

Mr. HARRIMAN. That is what I am saying. That is the over-all cut from ECA.

Senator SMITH of New Jersey. Have you any figures to show how many American personnel are now being paid by MSA funds in Paris, London, and other parts of the world?

Mr. HARRIMAN. I will be glad to put that in the record. As I recall it, there was a substantially greater cut abroad than at home. I think in the office of the special representative it was cut about 25 percent. Some of the missions were cut more than others. In some of the missions there is an even greater need than before to cooperate with the military. Some of our industrial people are very much involved in advising the military about where offshore procurement contracts can be placed and how to get increased productivity. I will be glad to submit the over-all figures abroad for the record.

Senator SMITH of New Jersey. I think we should have them in the record at this point. I am sure on the floor we will be asked about those cuts. There was a good deal of insistence last year that the cuts be made. And with the winding up of ECA we gave a promise to those supporting us that those changes would be made.

Mr. HARRIMAN. I will get the figures, put them in the record, and send a copy to your office.

(The material referred to is inserted on p. 68.)

DETERMINATION OF ECA POWERS AND FUNCTIONS NECESSARY

TO CARRY ON MSA

Senator SMITH of New Jersey. There is another section I also want to ask you about, and that is 502 (c), which says that the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives shall be informed as to which of the powers, functions, and responsibilities as transferred by this subsection are found after June 30, 1952, to carry out the duties con-ferred by section 503. On June 30, 1952, we will wind up the old ECA, and it will be necessary by April 1, 1952, for the President to indicate to our respective committees what duties you should carry on that were previously carried on by the ECA Director.

Mr. HARRIMAN. That will be done very shortly, certainly before the first of April.

Senator SMITH of New Jersey. Then we can figure that that will be taken care of.

I am wondering whether this year we will have to have further legislation redefining your powers based on the recommendation by the President.

Mr. HARRIMAN. No, the draft of the bill which is before you covers the points which require legislative actions.

Senator SMITH of New Jersey. Will you indicate the sections? This is just, again, for housekeeping purposes.

Mr. HARRIMAN. There are a series of changes. Certain powers need to be continued-such as authority to pay the transportaton on CARE packages. I think that last year 503 pretty well did the job, Senator. There are a few minor changes, which have been suggested in the act, which carry out substantially what was in the minds of Congress last year.

Senator SMITH of New Jersey. Well, would this be a fair statement, then, that section 503, which I have before me here, and which defines what your duties or responsibilities shall be after the ECA goes out of existence on June 30, 1952, gives you the necessary power for carrying on the work you have been doing?

Mr. HARRIMAN. That is substantially so. In order to carry on some of these defense support programs-strengthening the economy on Formosa, and in the Philippines and elsewhere in the Far Eastwe are asking for a change in one of the paragraphs. But those are small points. By and large, last year's legislation did the job, sir.

MSA INFORMATION PROGRAM

Senator SMITH of New Jersey. Passing to another subject, Mr. Harriman, to information services. We get rumors all the time that the MSA has one group of information people and the State Department has another group, and the technical cooperating group has another group of information people.

Have we consolidated those, are they all working separately now? Mr. HARRIMAN. Of course, there is no technical cooperation group in any place there is an MSA mission. We are combining in the embassies, step by step-most of it is under way or is about to take place the informaton service of MSA, emphasizing the defense aspect, and the more normal USIS in Europe and USIS around the world. We are taking the best men, putting them together, and developing a unified information service in each embassy.

The character of the work, of the two groups of course, was different. The USIS work was general United States information, whereas the ECA task had been to work with the Europeans in developing and improving an information service among the European countries and other private organizations. We hope by combining the two that we will get the best men from each service. The over-all total will be substantially reduced from last year.

Senator SMITH of New Jersey. You have those representatives, then, coordinating with the gentleman from the State Department?

Mr. HARRIMAN. This comes under Mr. Wilson Compton. And, of course, we have arranged, sir, that Mr. Draper represents the Secretary of State, the Secretary of Defense, and myself, on all NATO and Mutual Security Program affairs, and his office, the Office of the special representative in Paris, will represent all three aspects of our work as it relates to NATO and the Mutual Security program.

He will have one staff, and in each embassy the ambassadors will be the heads of country teams combining all United States elements in the program, so that we will get a coordinated program. I may say that the legislation passed last year has been extremely helpful in carrying out the coordinated program.

ALLOCATION OF MILITARY END-ITEMS FOR DOMESTIC AND FOREIGN ARMAMENT PROGRAMS

Senator SMITH of New Jersey. Now I pass to another subject, Mr. Harriman. I would like to ask you how the military end items are marked for the MSA. Evidence has been brought forward in the past indicating that when production slippages occurred in the United States, the foreign-aid program bore the major brunt of this slippage. In other words, if we were not moving fast in this country, the foreign aid was reduced correspondingly; and we always lean toward building up our own strength here first. The question is whether the allocations are arranged when the contract is first let, or when the goods come off the line and then divide them up.

Mr. HARRIMAN. Allocations are made by the Secretary of Defense. It is more the competing requirements in Korea, and to a lesser extent in Indochina, that have made necessary a slowing up of the program for delivery to Europe. As the President said in his message to Congress, and as has been testified, the NATO is now being given very high priority. It is the present program to deliver to Europe $12 billion of equipment during the present fiscal year and fiscal 1953, in order to catch up on the delays which occurred, as I say, primarily because of Korea, and to some extent due to the slippages in production.

Senator SMITH of New Jersey. Then when you start your program, you do not mark certain things for MSAP and certain other things for other parts of the world, or certain things for the home front. You have to wait until you see your production come out.

Mr. HARRIMAN. The allocations are made month by month, but they are now projected to catch up and carry through with the Lisbon plan, which Senator McMahon spoke of.

Senator SMITH of New Jersey. The reason I asked this question is that I was in Korea in December, and I was told that there were certain shortages there. I asked why there should be shortages at the fighting front, and they said there were certain priorities in Europe. I wondered whether that was true.

Mr. HARRIMAN. This priority was not established until January. Senator SMITH of New Jersey. For Europe?

Mr. HARRIMAN. For the NATO; yes.

Senator SMITH of New Jersey. Then information I had, that there had been some expected receipts of equipment in Korea that did not arrive because they were diverted elsewhere was a mistake?

Mr. HARRIMAN. I can't answer that, sir. I think it would be more appropriate to direct it to the Secretary of Defense.

Senator SMITH of New Jersey. Could you outline the procedure by which the requirements

Mr. HARRIMAN. Of course, may I say that Korea has top priority, of course.

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Senator SMITH of New Jersey. I was assuming that Korea, being the battlefront, would have top priority at the present time. That is why I was surprised by the answer I received when I was there.

PROCEDURE FOR DETERMINING END-ITEM PROGRAM AND COST

Could you outline the procedure by which the requirements for our end-item program were arrived at and the cost figures arrived at? Can we get that from the Department of Defense, the number of tanks, number of airplanes, and so on?

Mr. HARRIMAN. We have a military mission, composed of Army, Air, and Navy personnel in each country. These missions analyze the requirements together with the Defense Establishments of those countries. Then such analysis is checked with General Eisenhower and SHAPE, and these estimates arrived at.

I want to make it plain, however, that the equipment will go to those units which are well organized and well trained. Those will have the highest priority, and under the Lisbon plan, as far as his command is concerned, General Eisenhower and SHAPE will recommend the units, the countries and the units in each country to which the equipment will go. Those units that lag will get it later. Those that are ready will get it first.

Senator SMITH of New Jersey. I assume that in our regular session we will get a breakdown of some of those figures.

Mr. HARRIMAN. We will give those figures in executive session, on a country-by-country basis, both in terms of what each country is producing itself and what this addition means in terms of their having effective forces by the end of this year, and enough for training purposes through 1953.

RATIO OF "DEFENSE SUPPORT" TO "MILITARY ASSISTANCE"

Senator SMITH of New Jersey. Now, in regard to this expression of defense support, which Senator McMahon brought up this morning, and which I am very much interested in, have we developed a ratio formula in percentages or dollar terms between the end item military aid and what we call defense support? I mean, is it 85 percent, 15 percent, 90 percent, 10 percent, or does it vary with the different countries, or in Europe as a whole?

Mr. HARRIMAN. It obviously varies with different countries, but we will try to show you country by country what effect the withholding of defense support would mean to those countries and to their ability to carry out the military programs that they have undertaken. Roughly, it has been estimated that the loss would be two and a half times the $1.4 billion of proposed defense support for the Lisbon plan countries.

Senator SMITH of New Jersey. What you mean by that is that if we do not give this defense support, as you testified to Senator McMahon's question, we will be called upon to meet the same need for military preparedness in these other areas in ways that would cost us that much

more.

Mr. HARRIMAN. If we want the same defense; which, of course, I believe we do.

PURPOSE OF "DEFENSE SUPPORT" IS MILITARY PREPAREDNESS NOT

ECONOMIC RECOVERY

Senator SMITH of New Jersey. Then every figure you have got in the bill you are presenting, that we are building up this year, is directly related to the whole defense program any way you look at it. We are not delving into economic recovery of any countries. You are only putting in the economic items, so to speak, in order to make it possible for those countries to develop their military strength. Is that correct?

Mr. HARRIMAN. This relates to our NATO countries, including Greece and Turkey, but it does not relate to Austria, where, as you know, the situation is different. It also does not relate to certain programs in other parts of the world under the point 4 principle, nor to programs for refugee resettlement in Israel and the Arab states. But as far as NATO countries are concerned, the defense support, while of course it is economic assistance, has a purpose which is entirely different than the Marshall plan, and it is all directed towards making it possible for these countries to carry through the military programs which they have undertaken and agreed to.

Senator SMITH of New Jersey. Then this applies to title I and that portion of title II that applies to Greece and Turkey?

Mr. HARRIMAN. That is right, sir.

Senator SMITH of New Jersey. It probably would not apply to titles III and IV.

Mr. HARRIMAN. All of the defense support for Greece and Turkey is in title I, whereas the military end-item assistance for Greece and Turkey is in title II.

THE MEANING OF "INFRASTRUCTURE”

Senator SMITH of New Jersey. Now, Mr. Harriman, I recall some statement the Secretary of State made, that he did not understand what was meant by this term "infrastructure" which has been used in some of the releases on this whole subject. What does that mean? And is it involved in any way in this bill we are considering now? Have we any responsibility to understand the infrastructure, which frankly I do not understand.

Mr. HARRIMAN. Now, the request for funds for our share of infra structure will be in the military requests.

Senator SMITH of New Jersey. You mean in this legislation? Mr. HARRIMAN. No; in the public works construction budget. Senator SMITH of New Jersey. Oh, the military budget, entirely apart from this.

Mr. HARRIMAN. But in a word, infra structure can be defined as the common facilities which are needed for the common forces to be used by the forces as a whole.

CONTROLS OVER OFFSHORE PROCUREMENT CONTRACTS

Senator SMITH of New Jersey. When we let foreign contracts for construction abroad for some of these military supplies, what in general is our procedure for reviewing such contracts and keeping track of them?