in the summer of 1946 in Paris and is administered by a commission seated in Brussels.

Without going into detail, because that should come from the Army who are the managers of it, at the present time there is in Germany a group of technicians sent over to see whether or not a level of industry recommended by General Clay and General Robertson for the British and agreed to by the British and this country and I think subsequently by the French, is the level which it was expected to be when the arrangement was made I believe last September.

That provides for a recovery which would take about 5 years to fill up the plant capacities presently allowed. I am not able to give you the answer in detail, but there is no question but what Germany, being signatory now to this CEEC multilateral group, will, of course, receive the most careful attention and there is a technical group over there now reviewing the whole business to make sure that we are doing the sensible thing in retaining needed plants.

Mr. CASE. Of course, the answer was given in this committee and in other committees, when the issue was up a few weeks ago, that it made sense to move this stuff from Germany into France and other western European countries so that they could build up that lag of production. But we are working at cross purposes when you have these factories already established, with skilled workers in their vicinity to operate them, in Germany, to try to move them somewhere else.

Mr. LOVETT. I cannot give you a categorical answer to that, but I can give you a fair example. The Germans actually dismantled and took out of Holland the plant, the precise name of which I have forgotten

Mr. CASE (interposing). If we are going to take individual instances, to be sure, that is true; the Germans looted a lot of the countries.

Mr. LOVETT. That type of thing clearly must be restored.

Mr. CASE. The question at issue has not been one of restoring those that were stolen. It was such things as taking the rayon plant which was the most modern rayon plant in all Europe and moving that, a type of plant which had never been in some other country, or taking the ball-bearing plants and breaking them down and distributing them among other nations.

Even if we were to assume that that is part of the War Department policy rather than the State Department policy, although the Army said that they got their instructions from the State Department, the State Department did have something to do with negotiating the Italian treaty which promises $100,000,000 of reparations to Russia,

did it not?

Mr. LOVETT. The State Department is the negotiating agency of the executive branch of this Government. What I am trying to stress is this

Mr. CASE (interposing). Who is going to pay that $100,000,000 to

Russia?

Mr. LOVETT. If you will allow me to finish this answer first, sir: The State Department is the negotiating agency for the executive. branch of the Government and the deals which it negotiates are the agreed deals of the executive branches including the military services

when they have a coequal responsibility or a vital interest in the problem, which we are trying to settle.

Mr. CASE. The State Department has not in any sense disavowed the treaty which proposes to pay $100,000,000 from Italy to Russia, has it?

Mr. LOVETT. No, sir; it has not.

Mr. CASE. Where will Italy get the $100,000,000?

Mr. LOVETT. She will have to get it out of her exports.

Mr. CASE. And we are going to help her build up those exports, are we not?

Mr. LOVETT. Our recovery program is certainly designed to increase her ability to build up her economy.

I think that covers the two main questions.

Mr. CASE. And makes it clear that the United States is to provide the $100,000,000 for paying the Italian reparations to Russia..

PERSONNEL WHO HELPED PREPARE THE PROGRAM

The CHAIRMAN. I have a few questions I would like to ask with reference to the personnel of that group who prepared this program. The first question relates to Faith M. Williams. Her name appears on page 106 of the hearings before the Senate Committee on Foreign Relations. I wonder what part she had in the preparation of this

program.

Mr. LOVETT. Of what department is she an employee?
The CHAIRMAN. The Labor Department.

Mr. NITZE. She had to do with the report on the utilization of manpower in Europe and the movement of people from Italy, where they are unemployed, to France and other places where they are short. That report-I do not remember the number of it--is the last report in a series of reports which were given to all the committees. It had no bearing on the figures at all.

The CHAIRMAN. It did on policy?

Mr. NITZE. They evaluated it. Freeing barriers to the movement of people within Europe was one of the commitments which the 16 countries took to each other and that committee worked on that problem, to see what they were doing.

Mr. KEEFE. May I inquire, what was the name of that woman? The CHAIRMAN. Faith M. Williams.

Mr. KEEFE. And she was assigned from the Labor Department? The CHAIRMAN. Yes. She is on the roll as a labor economist, or is supposed to be a labor economist, P-7.

Mr. KEEFE. And assigned to whom by the Labor Department? The CHAIRMAN. She was assigned to the group that prepared this program.

Mr. NITZE. She was not assigned to any other department. This was a committee which was primarily in the labor field and the Department of Labor was asked to nominate a chairman for it.

Mr. LOVETT. She was an alternate, according to this.
The CHAIRMAN. I understand that.

Mr. KEEFE. She served in this country?

Mr. NITZE. She served in this country on this working group. The CHAIRMAN. The next one I want to ask about is John M. Cassels of the Department of Commerce. His name appears on the

same page. Do you know anything about what part he had in the operation of this group?

Mr. NITZE. As I remember it, he was an alternate on the Correlation Committee and he attended several of our meetings and contributed to the discussions and to the determination of policy. He was from the Commerce Department, as an alternate to their representative. The CHAIRMAN. Was he quite active in their recommendations? Mr. NITZE. He was not very active; he was an alternate. He appeared at certain of the meetings when the member of the Department of Commerce could not appear. As I remember it, he is Chief of the United Kingdom Section.

The CHAIRMAN. He is supposed to be Chief of the British Commonwealth Section.

Mr. NITZE. That is correct, in the Department of Commerce.

The CHAIRMAN. There is a Lewis Bassie, from the Department of Commerce.

Mr. NITZE. As I remember it, he is an adviser to Mr. Harriman, particularly on food problems.

Mr. CAWLEY. That is correct.

The CHAIRMAN. He is more of a personnel man than a food man, is he not?

Mr. NITZE. I have only seen him on food matters.

The CHAIRMAN. Is it true that he has been very active in bringing extreme radicals into the Government?

Mr. NITZE. Not to my knowledge, sir.

Mr. LOVETT. We would have no knowledge of that, Mr. Chairman. Mr. NITZE. He made very great contributions I think on food matters which were the only ones in connection with which I have seen him.

The CHAIRMAN. The next one I have is David Lasser. What was his part in this program?

Mr. NITZE. I was never aware of the fact that he was in it. I never ran into him at all.

Mr. LOVETT. I never heard of him; no, sir.

Mr. NITZE. I believe he is in the Department of Commerce, is he not?

The CHAIRMAN. He is in the Department of Commerce according to this volume.

Mr. LOVETT. As an alternate on the Manpower Committee. We have no information on him at all. I do not know whether he contributed anything or not.

Mr. NITZE. I did not know that he had anything to do with it until I read that book.

The CHAIRMAN. On page 110 there is the name John Lindeman, executive secretary, from the Department of State.

did he have in this operation?

What part

Mr. NITZE. He was secretary of that committee and played a very active part in the committee.

The CHAIRMAN. He is one of those the State Department took over from the OPA.

Mr. NITZE. I was not aware of that.

The CHAIRMAN. Then he was with UNRRA.

Mr. NITZE. He has done very good work.

The CHAIRMAN. And his surveys involved, according to this, onthe-spot investigations in Austria, Yugoslavia, and Greece.

This gentleman is supposed to be antibusiness, considering his record in the OPA; I would not know beyond that.

Mr. NITZE. I have never seen any indication of it in his work in connection with this.

The CHAIRMAN. The next is Katherine Jacobson. She is under the Italian set-up, according to this.

Mr. LOVETT. She was representing the Department of Commerce. The CHAIRMAN. What part did she play in this?

Mr. NITZE. I believe she represented the Department of Commerce on that interdepartmental committee.

Mr. LOVETT. That Committee was made up of a representative of the Federal Reserve Board, a representative of the Treasury Department, a representative of Commerce, and a representative of the State Department.

The CHAIRMAN. Did she play a considerable part in this set-up? Mr. NITZE. Mr. Dowling, who was the chairman of the committee and who is at the Italian desk in the State Department, is thoroughly familiar with all the Italian matters.

Mr. LOVETT. Yes. He is very expert; he is one of the able foreign officers; and I should doubt, Mr. Chairman, whether anyone who did not have the most intimate knowledge of Italy could have contributed a great deal in the present confused situation there. I do not know her particular contribution or whether she was merely there as liaison.

The CHAIRMAN. There was an executive committee on economic foreign policy, and a Miriam Camp, who was a protégée of Mrs. Gardner Means on that committee.

Mr. LOVETT. What was the name of the committee?

The CHAIRMAN. Executive Committee on Economic Foreign Policy. She was from the Department of State.

Mr. NITZE. That committee worked on the question of the relationship of this program to the United Nations. She has been working largely on United Nations matters. I think the bill provides that certain types of reports ought to be made to the United Nations and certain other provisions which affect the United Nations on which the original recommendations were developed by that committee. The CHAIRMAN. What part did she have in that?

Mr. LOVETT. Well, I would judge that it would be a minor one, Mr. Chairman. I do not know of my own personal knowledge, because Stinebower, of the Department of State, is the deputy on the United Nations Economic Committee. So that I should imagine that he would represent the Department's point of view, and I would expect that her part would be minor.

Mr. NITZE. The recommendations of these various committees were in turn reviewed by succeeding committees in the echelon, resulting finally in the recommendation which was made to the Congress.

The CHAIRMAN. I believe that is all I have at the moment.

REASON FOR INCLUDING ICELAND, IRELAND, PORTUGAL, SWITZERLAND, AND SWEDEN IN PROGRAM

Mr. WIGGLESWORTH. This question might more properly come up later, but just in a general way there have been questions asked as to why Iceland and Ireland, Portugal, Switzerland, and Sweden, none of which suffered any direct war damage, are included for expenditure under the over-all program. I do not know whether you care to make any general statement in that connection at this time or not, Mr. Lovett.

Mr. LOVETT. I would like to have Mr. Nitze answer that in some detail, but, generally speaking, what we are dealing with really is western Europe, and we wanted to include all the countries that could help. You remember, originally we anticipated having far more countries included, and as the result of Russia boycotting, her refusal to let Finland and Czechoslovakia join, the 16 nations and western Germany became the participating nations. The purpose is to deal with the problem as a whole, and to deal with it on the basis of mutual aid and self-help, with a European exchange of commodities or finished products in an area which is in one sense indivisible, and we therefore included those countries that could help as well as the countries that needed help.

In the case of Switzerland, that is particularly apparent, because actually Switzerland, as the result of her present favorable circumstance, would, we expect, with the balance of payments in her favor and my recollection of the figure, and I will correct the amount if I am wrong-have $125,000,000 on the right side. We expect that practically all of that will be loaned out to the other countries.

Mr. WIGGLESWORTH. I note that Switzerland is down here for 445.4 million dollars, which apparently is to come out of some financing from the ECA funds.

Mr. LOVETT. That is trade. The figures which we give here, which we attempt to give here, is for the whole European economy, and, in the case of Switzerland, her ability to provide her own funds gives her export-import merchandise balance which ultimately she can use; and that leaves here something like $125,000,000 which we hope and expect she would employ for the help, through extending loans or otherwise, of her neighbors.

Mr. WIGGLESWORTH. Why does she need $445,000,000?

Mr. NITZE. Column 2 indicates those countries which it is expected will pay out of their own earnings.

Now, in the case of Switzerland, she has to buy $445,000,000 worth of trade. Now, you can see that is carried out in the amount shown in the second column; it is indicated that she will pay for her imports entirely out of her resources, export earnings.

Mr. WIGGLESWORTH. That is, imports from all countries?

Mr. NITZE. No; imports only from the Western Hemisphere—just from the Western Hemisphere.

Mr. WIGGLESWORTH. Strictly speaking, neither Switzerland nor Portugal will get any aid?