Mr. KEEFE. The difficulty I have in conceiving this thing is that when you originally obligate money for the purchase of coal, you do it on the theory that England needs so much coal, France needs so much coal, to maintain their productive capacity. Then we suddenly discover we need that coal here, and then we cut off the coal over there. Then what happens to their economy should the whole thing be upset, delayed, and postponed?

Mr. HOFFMAN. I think those things all fall within what I would call normal business risks. We go ahead in the automobile business. and schedule our production, but if we have a coal strike we change our schedule. And I would think in England or anywhere else, when emergencies develop, they would have to adjust themselves to the changed conditions.

Mr. BISSELL. May I say we have had in the case of coal at threeoccasions in the last 2 years, including the present one, where it has been necessary to halt coal shipments very suddenly from the United States, and the effort has been to minimize the hardships by taking account of the stocks on hand in the receiving countries and the like. But that, in itself, is not an entirely new problem, and the machinery has certainly been effective in halting exports on extremely short notice. Mr. KEEFE. This program would require a constant survey? Mr. HOFFMAN. Right.

Mr. KEEFE. Both here and abroad, of the productive capacity and, so far as agriculture is concerned, the feeding end of the situation? Mr. HOFFMAN. That is right.

Mr. KEEFE. The estimates of crop possibilities in England and these other recipient countries must constantly be surveyed in conjunction with the possibilities of world production, including our own, in order to determine this over-all question that the American people are interested in, that is, is this thing going to cause the reimposition of domestic controls here in this country?

Mr. HOFFMAN. Is that a question you are addressing to me?

Mr. KEEFE. No-and is it going to interfere with our own domestic economy to an extent that there is going to be a constant price rise here in America and all that sort of thing.

For instance, I heard the President's speech here on inflation the other day in which he painted a very gloomy, pessimistic future for our own people unless there was a reimposition of controls all along the line. Is this program devised with the idea that such systems of controls as he suggested in his most recent speech on inflation will continually have to become a part of this program?

Mr. HOFFMAN. I have no informed judgment on this question of controls. I think I made my position clear, that I would hope that we could accomplish what we need to accomplish so far as this program is concerned with voluntary controls. That, however, is a problem that I will have to learn more about.

QUESTION AS TO POSSIBLE CONFLICTS BETWEEN REPRESENTATIVES OF ADMINISTRATION AND DEPARTMENT OF STATE

Mr. KEEFE. Is there any possible line of conflict between the State Department in the operation of this program abroad and the authority of the roving ambassador and the other people that are to be appointed in these various countries?

Mr. HOFFMAN. I certainly think there is always opportunity for conflict. I would hope that in the main any differences that might develop would be resolved at the various levels. I do think that our Administration has the great advantage of being beamed to a single objective, and that is recovery. And therefore we can answer questions that come up in the administration of the program on that basis; whereas the State Department would have to take into consideration numerous other policy questions that may be up in a given country.

I am new to this job, but I would certainly hope that we could avoid conflict. But there might very well come a time when there would be some honest differences of opinion that would have to be resolved by the President.

Mr. KEEFE. I am asking the question because of some statements that were made with respect to some conflicts that arose in Greece between Mr. Griswold and our Ambassador to Greece, in the clearance of programs and planning, and all that sort of thing.

Here you have a situation that involves the Army in Germany, where it is under Army control; and you have various ambassadors and diplomatic and consular officers scattered throughout these countries. Then you have a Roving Ambassador of your own charged with certain powers under the basic law. Then you have a certain set-up organizationally to handle this program over there. The State Department itself has prepared a program for you which is supposed to be integrated into your set-up and as you go along, you have authority to change it or modify it as the program develops, I assume. But so far as this committee is concerned, all we have is the program that is here before us.

Mr. LOVETT. Mr. Keefe, may I brief Mr. Hoffman on the GreekTurkish matter so that he will understand the point of your question? Mr. KEEFE. Surely.

Mr. LOVETT. The Greek-Turkish program was covered, I think, by Public Law No. 75. That provided an aid mission to Greece and a military mission to Turkey under the operational control and direction of the State Department. We also had an embassy there. Mr. Keefe's question therefore points out that in order to get a strong operator, he had to have the rank of ambassador, so we had an ambassador running the embassy and we had the aid mission set up separately. As I recall it-this having occurred before I came down here that was necessary in order to get the type of man that was needed.

Conflict initially developed between them. They were both under State Department control.

Mr. Keefe's question, therefore, is aimed at drawing an expression of opinion from you on a situation in which both are not under the same control, as they were in the Greek-Turkish affair. As the Administrator you have a representative abroad and the State Department in connection with its normal representation of this Government and business interests abroad also has representatives. Will this cause conflict? That is the question.

If I may say so, Mr. Keefe, I think Mr. Hoffman's answer is a fair one. Those differences can be composed. We have to get along with every agency in the Government.

CONTRIBUTION OF VARIOUS DEPARTMENTS IN COMPOSITION OF ESTIMATED REQUIREMENTS

Mr. KEEFE. As the matter now stands the situation presented to this committee is that an estimate has been presented by the State Department as to the necessities, which estimate was made up in cooperation with the other agencies of the Government.

Mr. LOVETT. The figures to which you have referred are the product of the executive agencies charged with special functions. For example, the Agriculture figures were prepared by the Department of Agriculture. The figures relating to petroleum, coal, et cetera, were derived from the Department of the Interior. Certain figures on availabilities, and that type of data, came from Commerce. The financial status-balance of trade and other figures-came from the Treasury Department and the National Advisory Council. All those were brought together in this central committee which then accumulated them and put them into these documents as presented

to you.

Mr. NITZE. I think it should be added that the final job of fitting this into the figure of $5,300,000,000 (because the requirements came out larger than $5,300,000,000) was done by the Department of State. Mr. LOVETT. Yes, I will say that. In the period of the interregnum, in order to have the presentation available for this committee, the State Department took the funds covered in the enabling act and attempted to make a provisional distribution, indicating order of magnitude, essentiality, and so forth, simply for the convenience of the Administrator who will have to make the ultimate decision.

Mr. KEEFE. The State Department took this gross total that was made up after the consultation with the other departments of the Government and synchronized it, so to speak, with the program that is now presented here in order to come within the limits of the authorization as passed by the Congress?

Mr. LOVETT. Yes, sir.

Mr. KEEFE. That meant scaling it down?

Mr. NITZE. It meant scaling it down and it had to be done fairly arbitrarily.

Mr. KEEFE. I think, Mr. Chairman, I have no further general questions at this time.

AUTHORITY OF ADMINISTRATOR TO TERMINATE ASSISTANCE TO ANY PARTICIPATING COUNTRY

Mr. WIGGLESWORTH. Mr. Chairman, I would like to point out in connection with termination of assistance, a point that Mr. Keefe raised, that section 118 of the enabling act provides specifically that: The Administrator shall terminate the provision of assistance under this title to any participating country whenever he determines that (1) such country is not adhering to its agreement concluded under section 115, or is diverting from the purposes of this title assistance provided hereunder, and that in the circumstances remedial action other than termination will not more effectively promote the purposes of this title or (2) because of changed conditions, assistance is no longer unsistent with the national interest of the United States.

Then it goes on to provide that

Termination of assistance to any country under this section shall include the termination of deliveries of all supplies scheduled under the aid program for such country and not yet delivered.

So it would seem to me that regardless of what the Department of Commerce or any other department might do, the specific obligation is placed on the Administrator to terminate assistance under those conditions.

The CHAIRMAN. And I would hope that the Administrator would meet that responsibility whenever it arises.

Mr. HOFFMAN. Yes, sir.

OBJECTIVE OF ECA

The CHAIRMAN. Mr. Cannon, you may have the witness.

Mr. CANNON. By way of summary, Mr. Hoffman, what do you consider your job to be? That is, what objective do you hope to attain by the time you relinquish your commission?

Mr. HOFFMAN. We hope we will have contributed toward the prosperity of the western European countries and China to a point where those countries will be quite determined to maintain the democratic way of life.

Mr. MAHON. More able to maintain it?

Mr. HOFFMAN. More able to maintain it; yes, sir. In other words. I think—if I may add to that just a little-we feel that one of the greatest immunities to a foreign ideology is a little prosperity.

Mr. CANNON. In what respects does the program laid out for ECA parallel and in what respects does it differ from UNRRA and lendlease?

Mr. HOFFMAN. Well, I never gave thought to that before. However, it is my impression that lend-lease was a method used during the period of the war to help our allies fight a war. UNRRA, as I remember it, was a relief organization and while relief is a part of this program, as it relates itself to recovery it is relief to that extent. have a program for recovery in these European countries and in China and in that respect you might say that this is in a sense a war to win the peace.

We

Mr. CANNON. Lend-lease then was military and ECA is economic? Mr. HOFFMAN. I should think so; sir, yes. Distinctly so, yes. I think the closer we stick to economic objectives, the better off we will be. I think recovery is our business. If we stick to that and do all we can to help bring it about, and if we are successful, I think we will have had a very important bearing on the future peace of the world.

EXPENDITURES TO DATE FOR RELIEF AND REHABILITATION ABROA D

Mr. CANNON. You may not have made a definite computation of this, but perhaps you could give us an approximate estimate; how much money has been spent up to this time for the purposes for which you are asking this appropriation?

Mr. HOFFMAN. I think I would have to understand that question. more clearly. You mean all that has been spent-for the relief and rehabilitation of European and Asiatic peoples up to date.

Mr. MASON. Loans and gifts run altogether about $12,000,000,000. Mr. HOFFMAN. My recollection is that it was between $12,000,000,000 and $13,000,000,000.

Mr. CANNON. Then the amount that you are asking here today is only a very small percentage of what has already been spent for this purpose?

Mr. HOFFMAN. I would say that there is nothing small about $5,000,000,000.

Mr. CANNON. But, comparatively speaking?

Mr. HOFFMAN. Perhaps a most valid comparison would be this, if I may put it this way. At the time that I appeared before the Senate Foreign Relations Committee and this question of financing came up, I said:

I want you to understand before you consider me seriously for this job that I do not feel that any administrator would be-and certainly I would not be— willing to make any promises that we can get 100 cents to the dollar. We will come as close to that as possible. It might be possible to get 90 cents to the dollar. I think 80 might be more realistic when it comes to getting real value.

Mr. CANNON. Getting back to the subject of my question now, we have already spent considerably more than the amount submitted here for the purposes for which this money is to be spent ; is that right? Mr. HOFFMAN. Yes, sir.

Mr. CANNON. And what we have spent would, to a very large extent, be wasted if we did not continue the program, under the appropriation asked for in this estimate?

Mr. HOFFMAN. That is my opinion, sir.

EFFECT OF FAILURE TO CONTINUE FOREIGN AID

Mr. CANNON. As a matter of fact, what would be the effect of a failure to follow up the large amount that we have already spent with the amount asked here today?

Mr. HOFFMAN. I think we would have to go over that country by country. There are some countries which I think are in very good shape, as brought out this morning. But I think on the over-all, certainly the western European countries would be much more vulnerable to communistic infiltration and perhaps subjugation by Russia if we stopped in our tracks and did nothing. I think that is clear to me. That is my own view.

Mr. CANNON. And such a development would mean, largely, a waste of the large amounts that we have already invested in the attempt to rehabilitate Europe and to maintain democratic governments abroad?

Mr. HOFFMAN. I would think so, sir.

BASIC PURPOSE OF PROGRAM

Mr. CANNON. The purpose of all this expenditure, and especially the expenditureof the $4,245,000,000 is primarily of what? Is your prime purpose the service of the American people, or is your prime object the service of the people abroad?

Mr. HOFFMAN. I can speak only for myself. I think the justification for it lies in the effect it will have on the American people. If I did not believe the program would pay out as far as the American

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