in taxes, as compared to 33.7 percent for the United Kingdom, 31.0 percent for Austria, 30.7 percent for France, 30.3 percent for Western Germany, 28.3 per cent for the Netherlands.) We believe that claims that economic assistance and technical aid should be curtailed for the coming year, because funds appropriated for similar assistance for the current year have not yet been expended, are without any sound basis in fact. Funds for the current year were late in becoming available; it takes time to develop contracts that will permit of the most productive and effective use of funds. It takes time for complex programs to get under way. The fact that this year's appropriations are not yet fully expended at this date in no way detracts from the need for adequate funds for 1953. Particularly so since the 1952 appropriation for TCA programs became available to the Director of Mutual Security as late as November 1, 1951. Thus, eight months, or twothirds of the fiscal year, remained for the allocation and obligation of point 4 program funds. Thereafter funds were allocated to TCA by the Mutual Security Director on the basis of programs submitted by TCA and approved by him. The first of these allocations for expanded 1952 programs were made in February 1952. By the end of February 1952, $51 million, or about 25 percent of the 1952 budget, had been obligated by TCA. It should be remembered that the allocation of funds to specific country programs depends not only on the approval of the Director for Mutual Security, but also on the conclusion of specific programs and project agreements with some 33 other governments. Negotiation of these agreements is well underway, and the rate of obligation will rise steeply each month as agreements are concluded. By June 30, 1952, it is expected that approximately the full amount appropriated by Congress for TCA-point programs will have been obligated on the basis of carefully worked out agreements, which reflect the needs of the cooperating countries, and their ability to contribute to each project. The process may seem slow, but sound and lasting results cannot be achieved in any other way-certainly not by allocating funds indiscriminately, without careful preparation and acceptance by other governments. It is because we believe in the facts here so briefly outlined, that we beg you to support the full measure of technical and economic aid requested for the Mutual Security Program of 1953. Respectfully submitted. DOROTHY NORMAN, Chairman, American Citizens Committee for Economic Aid Abroad. APPENDIXES APPENDIX I MUTUAL SECURITY AID TO IRAN, SAUDI ARABIA, AND YUGOSLAVIA (The following statement was subsequently submitted by Secretary Acheson in response to Senator Brewster's comments on Iran, Saudi Arabia, and Yugoslavia.) MUTUAL SECURITY AID TO IRAN The Department of State has been deeply concerned about the Iranian oil controversy and the effects which it has had, not only upon the economies of Iran and Great Britain, but upon the entire free world. It fully agrees with Senator Brewster upon the importance of finding an arrangement which will permit the flow of Iranian oil to world markets to be resumed as soon as possible. For this reason the executive branch has endeavored in every way possible to help the parties establish a basis upon which an agreement can be reached. Its efforts have included the mission of Mr. Averell Harriman to Iran and Great Britain in July and August 1951; extended discussions by United States officials, including the President, the Secretary and other senior departmental representatives, with Dr. Mosadeq while he was in this country the latter part of that year; and continuing discussions and communications with British and Iranian representatives in Washington, London, and Tehran since the Iranian nationalization law was enacted on March 20, 1951. The latter have included many discussions and communications at the highest governmental levels in all three countries, including the Prime Ministers and Foreign Ministers of the present and preceding British Governments. The most recent efforts to find a solution have been through the International Bank which, with the approval of both parties to the controversy and with encouragement from the United States, endeavored to bring about agreement for resuming operations on an interim basis. The conversations between the Bank and the Iranian Government were recently recessed and the bank mission returned to the United States, although it may be possible that its negotiations will be resumed. Perhaps indicative of the difficulties is the fact that the bank, a neutral international organization of which both parties are members, has not yet been able to devise an acceptable formula. It is true, as indicated by Senator Brewster, that among the principal problems were those relating to the provision of the large number of foreign technicians which would be required, and to the price at which the oil would be sold to the British interests. These are not, however, the only issues which have thus far prevented an agreement. The issues in this controversy are extremely complex. They involve political considerations of very great importance, in addition to economic consideration and the practical problems involved in running the world's largest refinery and one of its largest oil industries. Also involved is the effect that any agreement would have upon commercial arrangements in other countries. Essentially the problem has been to develop an arrangement under which the Iranian oil industry could be efficiently run; an arrangement which would make it commercially feasible to market Iranian oil; and one which would protect the legitimate interests— legal, economic, and political-of both parties. In a dispute of this nature where emotions run high, and where psychological and political factors often outweigh the economic, there can be no pat solution nor can a formula be evolved which would automatically bring about an immediate lessening of tension. The United States is continuing its efforts to help find a settlement and will do so with all the means at its disposal. In the final analysis, however, the solution must be brought about by the parties themselves, both of whom have enormous stakes involved. The role of the United States has been extraordinarily difficult. While not directly a party to the controversy, we nevertheless have a very great interest. As a friend of both Great Britain and Iran, we have endeavored to be entirely neutral and objective in the advice which we have given, and our views have been stated in a frank ad straightforward manner. The United States has, in fact, gone as far as it properly could in expressing its views to both parties and in urging upon them the necessity for an early settlement. MUTUAL SECURITY AID TO SAUDI ARABIA Aid to Saudi Arabia may be tabulated as follows: fiscal year 1951, $91,000 obligated; fiscal year 1952, $463,000 allocated; fiscal year 1953, $700,000 proposed. Although this technical assistance is an expression of friendliness, it is much more than that; it is an investment in the stability of a very important area of the world. In exchange for it, we expect an accelerated effort on the part of the Saudis toward orderly development of their human and physical resources. It is to our own interest that the country become a strengthened nation which can increasingly be a stabilizing influence in a critical area. It may be asked why the Saudis cannot simply ask us for experts and have us send them a bill. We do not believe that such a procedure can be as successful as an integrated program under which we provide technical assistance for projects which benefit both the Saudis and ourselves but which the Saudis, at this stage in their experience, would not be likely to initiate on their own. Saudi Arabia's tenfold increase in revenues can be viewed as a problem which needs a solution rather than as a reason for not contributing even a small part to a program with mutual advantages. A generation ago, the country was a group of unfederated tribes in provinces loosely controlled by the Ottoman Empire. Today, as an independent nation, one of its greatest needs is the establishment of a monetary and fiscal system adequate to provide for constructive and unwasteful use of these unprecedented revenues. It is to United States interest that an effective financial system be introduced and it is to this end that a group of point 4 fiscal experts is now at work with the Saudis. Four experts-in public finance, banking, budget, and customs-are now in that country and a fifth is being recruited. They represent an investment in a project which the Saudis might not have undertaken on their own and which if not undertaken might prove infinitely more costly to all concerned than the total of their salaries. Another project under way-and, incidentally, the first point 4 project undertaken in any Arab country-concerns underground water resources. Three American geologists with a jeep and a small amount of specialized equipment are now working with the Saudis in the identification of underground water resources which are of vital importance in the life of desert people. Water is often a luxury in this oil rich country. Finding and properly utilizing it is essential to development of the country, though it is a task which, despite increased oil revenues had not been undertaken on an over-all basis previous to the introduction of the point 4 program. Demonstration projects in public health, and in agriculture, are expected to be underway by the end of the current fiscal year and an educational project shortly thereafter. We view these as key projects which can obtain massive results for a relatively small outlay. They are being coordinated in the field by Dr. Samuel Stratton, TCA country director, who is on leave from his post of president of Middlebury College. We do not expect immediate spectacular results but we believe the program will give the Saudis a boost in developing their available resources, and becoming a stable force in the community of nations. Senator Brewster referred to gold and silver exports. Gold and silver have been produced in Saudi Arabia since 1939 by a concessionary company, the Saudi Arabian Mining Syndicate, incorporated in Bahama. The largest share of stock is held by the American Smelting & Refining Co. and the rest by British and Canadian firms, the Saudi Arabian Government and Saudi nationals. Payments by the company to Saudi Arabia in dividends, royalties, and customs fees totaled $2,300,000 from the start of operations in 1939 to June 30, 1951. Virtually all production, approximately $2,500,000 in an active year, is exported. It is reported that unless new deposits are discovered the firm will have to close down within a year. ASSISTANCE TO YUGOSLAVIA United States assistance to Yugoslavia has been predicated not on any liking for or sympathy with the communist regime of Marshal Tito, but directly on our own national interests, as those have been explained to the Congress not only in the course of the present hearings, but in previous hearings (on the Yugoslav Emergency Relief Assistance Act of 1950, for example) and in formal findings by the President, duly notified to the Congress, in connection with the Mutual Defense Assistance Act of 1949, as amended, and the Mutual Security Act of 1951. In all our relations with the Yugoslav regime, from the time we extended recognition to it following the last war to the present, the United States has made it fully clear to the American and Yugoslav peoples as well as to the Yugoslav Government itself that our actions were and are not to be interpreted as implying approval of the policies of the regime, its methods of Communist control, or its failure to implement the guaranties of personal freedom promised its people. As regards religious persecution, at the time of the trial of Archbishop Stepinac as well as on numerous other occasions, the United States Government has not hesitated to express its concern regarding the attitude of the Yugoslav Government. In connection with Senator Brewster's comment on the authority under which food aid was extended to Yugoslavia, it will be recalled that when the drought of 1950 assumed the proportions of a crisis it was considered that the interest of the United States was directly involved. Various agencies sought to take emergency measures to meet the situation in Yugoslavia within both the funds and authority at hand, and within the framework of those acts and policies which had already received congressional approval. The Congress was in recess, and pending such time as it could meet and pass upon a program of food assistance to Yugoslavia, the "stopgap" phase of the food program was instituted. Approximately $6 million of an already existing $15 million Export-Import Bank loan was made available for the purchase of foodstuffs; $16 million of MDAP funds were allocated for assistance to Yugoslavia in accordance with section 408 (c) of the MDAA of 1949, as amended; and $12.2 million of ERP funds were made available under the authority contained in the Economic Cooperation Act. The circumstances were unusual and were possible of handling only to the extent that Congress had granted appropriate emergency and discretionary authority. The question was raised in the Congress during debate on the Emergency Assistance Act. Although ample authority was considered to exist establishing the legality of the "stopgap" program, the Congress when enacting Public Law 897 considered it administratively advisable to appropriate a sum equivalent to the amount made available by ECA. An explanation of the "stopgap" program was set forth in the Congressional Record of Wednesday, December 13, 1950, as well as in the various hearings before the Congress with reference to the Yugoslav Emergency Assistance Act of 1950. As regards the statement that the United States has provided or plans to provide assistance to Yugoslavia approximately $1 billion, the following are the sums, excluding funds for military equipment, which had been provided to Yugoslavia by the United States to date: Grant assistance: I. United States assistance Lend-lease--for military supplies and services (1944-1945)____ $32, 126, 000 6, 500, 000 Yugoslav Emergency Relief Assistance Act of 1950-foodstuffs_ 50, 000, 000 15, 193, 000 29, 000, 000 78, 000, 000 Total grant assistance_. 210, 819, 000 Loan assistance: Export-Import Bank-for raw materials, industrial machinery, and (August 1950) food, as follows: September 1949_ March 1950. August 1950 Total loan assistance... Total United States assistance (excluding contributions 265, 819, 000 1 United States share of tripartite aid program. In the presentation of the Mutual Security Program for fiscal year 1953 an illustrative figure of $78,000,000 is included for defense support to Yugoslavia. In addition, some grant assistance is expected from the United Kingdom and France. |