MUTUAL SECURITY ACT OF 1952

THURSDAY, APRIL 3, 1952

UNITED STATES SENATE,

COMMITTEE ON FOREIGN RELATIONS,

EXECUTIVE SESSION

Washington, D. C.

The committee met, pursuant to adjournment, on Wednesday, April 2, 1952, in the committee hearing room, United States Capitol, at 10 a. m., Senator Theodore Francis Green (acting chairman) presiding.

Present: Senators Green (acting chairman), Fulbright, Sparkman, Gillette, Wiley, and Smith of New Jersey.

Present of committee staff: Dr. Wilcox, Mr. Marcy, Mr. Holt. Also present: Philander P. Claxton, Jr., Office of the Assistant Secretary for Congressional Relations, Department of State; Haldore Hanson, Assistant Administrator (South Asia), Technical Cooperation Administration; E. R. Fryer, Assistant Administrator (Near East and Africa), Technical Cooperation Administration; Maurice Levy-Hawes, lieutenant, United States Navy, Office of Military. Assistance, Office of Secretary of Defense; John D. Tomlinson, Adviser, Office of United Nations Economic and Social Affairs, Department of State; and Kenneth R. Iverson, President, The Institute of Inter American Affairs, Regional Office of Technical Cooperation Administration for Latin America.

Senator GREEN. The committee will come to order. Before we proceed with Mr. Wood, I will ask that there be inserted in the record this letter from General Olmsted, dated April 3, 1952.

(The letter dated April 3, 1952, from General Olmsted is as follows:) OFFICE OF THE SECRETARY OF DEFENSE, Washington, D. C., April 3, 1952.

Hon. Toм CONNALLY,

Chairman, Committee on Foreign Relations,

United States Senate.

DEAR MR. CHAIRMAN: During the course of General Bradley's testimony on March 31 before your committee, Senator Green asked the question, “From where do the insurgents in Indonesia get their equipment and what type of equipment do they get?"

From the information available it appears that the majority of the equipment comes from the following sources:

(a) Japanese equipment left in Indonesia at the close of World War II

(b) Insurgent raids on Government forces and depots.

(c) Members of Government forces who defect to the insurgent forces and carry their equipment with them.

(d) A probable small amount of smuggling.

The type of equipment appears to be limited to small arms and ammunition.

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From information available, there does not appear to be any direct Communist supervision over the sources of this equipment.

I am furnishing a copy of this letter to Senator Green for his information.
Very sincerely yours,

GEORGE H. OLMSTED,

Major General, United States Army,
Director, Office of Military Assistance.

Senator GREEN. You may proceed, Mr. Wood.

TESTIMONY OF C. TYLER WOOD, ASSOCIATE DEPUTY DIRECTOR FOR MUTUAL SECURITY; JONATHAN B. BINGHAM, ACTING ADMINISTRATOR, TECHNICAL COOPERATION ADMINISTRATION; STANLEY ANDREWS, CONSULTANT TO SECRETARY OF STATE, POINT IV PROGRAM: AND ARTHUR Z. GARDINER, ECONOMIC ADVISER, BUREAU OF NEAR EASTERN, SOUTH ASIAN, AND AFRICAN AFFAIRS, DEPARTMENT OF STATE

Mr. WOOD. Senator Green, we propose to take up first this morning the program of $76,000,000 for providing necessary imports to the State of Israel, and the program of $65,000,000 for Palestine refugees. Mr. Arthur Gardiner is here to testify and to answer questions on these two subjects. They have been discussed to some extent in previous sessions of the committee, but Mr. Gardiner is the expert on the subject, and it might be useful for the committee to hear his outline of these programs.

Mr. Gardiner, would you again identify yourself for the record, giving your position and title?

Mr. GARDINER. My name is Arthur Z. Gardiner, and I am economic adviser, Bureau of Near Eastern, South Asian and African Affairs, Department of State.

Mr. Chairman, the two programs to which I propose to address myself amount in all to $141,000,000.

Senator GREEN. Where is that $141,000,000?

Mr. GARDINER. It is the $141,000,000, sir

Senator GREEN. It does not appear anywhere.

Mr. GARDINER. $65,000,000 for the Palestine refugee program, and, $76,000,000 for the relief and resettlement of refugees in Israel, pursuant to section 205 of the current act.

Senator SMITH. The Mutual Security Act of 1951, the renewal of which is being considered; is that correct, Mr. Wood?

Mr. WOOD. That is correct.

Mr. GARDINER. The contribution to the Palestine refugee program, the Arab refugee program, is provided for in section 204 of the Mutual Security Act of 1951.

REASON FOR SIZE OF ISRAEL PROGRAM

Senator GREEN. In this connection, will you explain why it is $79,000,000?

Mr. GARDINER. $79,000,000, sir, because in addition to $76,000,000, which it is intended to administer under section 205, there is an additional program of $3,000,000 for technical assistance, which will be administered under the Act for International Development.

Senator GREEN. Now, as a preliminary statement, would you take the main question as to why this figure is so much larger than any of the other countries in the Near East?

Mr. GARDINER. Yes, sir. I wonder if I could very briefly for the record, Senator Green, talk to the background of this problem for 5 minutes and its relation to the program as a whole?

Senator GREEN. If that will be part of the answer to my question. Mr. GARDINER. Both these programs are larger, sir, because in a poor area, an area that is not large in natural resources, there have entered within the last 6 or 7 years a million additional people who have not yet been able to find ways and means to make their living. Senator SMITH. Are those all Jews, or Jews and Arabs?

Mr. GARDINER. The Jews have entered in substantially those numbers, Senator Smith, and in the process Arabs have been displaced. Senator GREEN. That ought to be the net number.

Mr. GARDINER. The net number that has entered, sir, is 1,000,000, people. In the process of their entry, great disturbances have followed, disturbances of population.

Senator GREEN. The population has increased, the net?

Mr. GARDINER. The net increase is of the order of a million people in an area, which, at the close of World War II, included, perhaps, as many as 6,000,000 people all together, most of them leading rather precarious lives.

In that area there has been introduced an additional million people from Europe.

Senator SMITH. That area in the State of Israel?

Mr. GARDINER. That area is, I prefer to identify it, as the mandate of Palestine, Syria, Lebanon, and Jordan, which surround the mandated area.

Now, from the mandate of Palestine there has been carved the State of Israel, but your problem is to find a living, find a way for an additional million people to make a living, in a neighborhood which is not notable for its natural resources.

Senator SMITH. Does that include the displaced Arabs?

Mr. GARDINER. Yes, sir.

Senator SMITH. You are taking care of both problems, the care of the Jews and the displaced Arabs?

Mr. GARDINER. Yes, sir. The intention of this program is to take care of Israelis and Arabs, in turn.

Senator GREEN. If I may interrupt here, because, I think, you are getting confused, you started talking about Israel, and now your answer is about the general region outside of Israel, including that.

Mr. GARDINER. I intended, Senator Green, to make clear that we have two problems.

Senator GREEN. It is not clear on the record. You are switching from one to the other without noting any switch.

Mr. GARDINER. I am sorry, sir.

The reason why we need such substantial sums of money, which was your question, sir, so much larger sums than we asked for for other countries, is that into a poor region there have entered nearly a million people in the last 5 years.

Senator GREEN. Yes; but there are also poorer regions around there where there have been also increases in population by reason. of the expulsion of the Arabs from Israel.

Senator SMITH. They are included?

Mr. GARDINER. They are included, sir, in this.

COMPARATIVE SIZE OF ISRAEL AND ARAB PROGRAM

Senator GREEN. Now, we are switching again. Let us talk to Israel. I said why should that be so much larger than the surrounding countries?

Mr. GARDINER. The program of aid to Israel, sir, of a total of $79,000,000, is rather less than the combined aid proposed to the Arab states and the Arab refugees, which totals $65,000,000 plus $23,500,000 to be administered under the Act of International Development, a total of $88,500,000.

Senator GREEN. That is a very much larger proportion per capita; is it not?

Mr. GARDINER. Per capita the proportion for Israel is very much larger, sir, and the reason for the high per capita requirement for Israel is that there are many hundreds of thousands of people who have arrived in Israel who are not yet fully productive members of society in Israel.

Senator GREEN. Is that not also true of scme of the surrounding countries?

Mr. GARDINER. Yes, sir. I think that another reason why the Israeli program per capita is very much larger is that the Government of Israel is making an attempt to establish European standards of living in that area rather than local standards. You will find, I think

Senator GREEN. You mean that is not true of the surrounding countries?

Mr. GARDINER. The surrounding countries, sir, are countries where you have a situation where the average annual per capita income is rather less than $100, whereas the attempt is being made in Israel to maintain an average per capita income of the equivalent of five or six hundred dollars, and the attempt is also being made in Israel to equip the state with means of production which will enable the population to maintain itself on European standards.

STANDARD OF LIVING GOALS OF ISRAEL AND ARAB STATES

Senator GREEN. If you take that point, then you just transfer the question to this form. Why should the United States attempt to raise the standard of living in Israel so much greater than in the surrounding countries?

Mr. GARDINER. Because, sir, the United States has at least acquiesced in a policy which has led to the introduction of Europeans from displaced-person camps in Germany and elsewhere into Israel, in the hope and expectation that those people would be able to maintain the standards to which they were accustomed, in this new country.

Senator GREEN. Has the United States also acquiesced in the policy of Israel to exclude from the old population a large number and send them to the surrounding countries?

Mr. GARDINER. The United States, sir, has attempted in negotiations with the Israelis and in negotiations in the United Nations to

see that justice was done to the Arab refugees from Palestine, including the retention of the rights of those refugees to repatriation. Those rights which have been asserted in resolutions at the United Nations have not, in fact, been implemented except in respect to à very small number of Arab refugees.

The whole issue of the Arab refugee, sir, is a very sore point, as you know, in the relations of the Near East countries. It is one which has had close attention of the American authorities concerned for the last 4 years; it is the biggest single outstanding obstacle to peace in the area, a problem which this program is intended to help solve. Senator SMITH. You are going to give the Jews a higher standard of living than the Arabs, then, that are kicked out?

Mr. GARDINER. Yes.

Senator SMITH. That is part of the program?

Mr. GARDINER. I would rather say, sir, that we are not going to give them that standard, but the program envisages a higher standard; yes, sir, in terms of dollars, a higher material standard than the Arabs have.

Senator GREEN. `May I follow up that question?

Mr. GARDINER. Please, sir.

Senator GREEN. You say our Government has acquiesced in thẹ bringing into Israel of a million new residents; is that right? Mr. GARDINER. Nearly a million, sir, since the war.

EXPULSION OF ARABS FROM ISRAEL

Senator GREEN. Yes. But has it acquiesced to the same extent in the expulsion of the Arabs from Israel into the surrounding countries? Mr. GARDINER. Senator Green, if I may, sir, I think that is a loaded question. I think the reason for it

Senator GREEN. You unload it, then.

Mr. GARDINER. I will try to unload it; and what I want to unload, sir, is the word "expulsion."

The grave question as to why all these people left is in dispute. They left for a variety of reasons. They were not all expelled. Some fled because there were massacres

Senator GREEN. Because they were massacred?

Mr. GARDINER (continuing). Which were perpetrated by terrorist groups which the Jewish authorities admit occurred, and which they disavow. Others left because they were badly led by their Arab leaders; others left because people do leave when there are contending armies crossing their farms and fields. They just get up and go.

A very close observer of that situation, sir, was Mr. Clarence Pickett, who was formerly secretary of the American Friends Service Committee, and he testified on this subject before the House committee last summer, I think, in a very balanced and very effective way. He says that the blame attaches for this tragedy on many, many people. It is quite fair to ask me if the United States acquiesced in the expulsion of these people from Palestine. That is a loaded question.

Senator GREEN. Yes. But how do you reframe the question? Mr. GARDINER. If you would ask me why these people left, I would reply just as I had, sir, because they left for a variety of reasons.