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S. 1762, MUTUAL SECURITY ACT OF 19511

[Editor's note:-For a number of years many in Congress had been interested in getting an overall picture of U.S. foreign aid programs and activities and had been pressing for omnibus foreign aid legislation. After consultation with the Foreign Relations and Foreign Affairs Committees, the executive branch decided in 1951 to consolidate its foreign aid requests. In a message on May 24, the President asked for authorization of a world-wide program of economic, military, and technical aid, organized on a geographical basis, each area being treated as a unit and the types of aid proposed fitted into its needs and problems. Funds requested in the omnibus bill covered hitherto independently authorized programs for mutual defense assistance, economic assistance for Europe, Point Four, the Institute of Inter-American Affairs, the U.N. Palestine refugee program, Far Eastern economic assistance and other contributions to the United Nations, together with new economic grant aid programs for the Near East and Southeast Asia, and military grant assistance for Latin America. One feature of the legislation proposed was a notable shift in emphasis from economic to military aid. S. 1762 was introduced on June 27. An on-the-spot survey was undertaken in July by a subcommittee chaired by Senator Green, and hearings were held on July 26, 27, 30 and 31, and on August 13, and 6-9. Transcripts of the executive sessions were edited for security reasons and published with the open hearings. Mark-up sessions on the bill are printed here. H.R. 5113, with Senate language substituted, was reported to the Senate on August 27 and passed on August 31. Differences with the House were resolved by October 8 and the bill was signed into law (Public Law 165) on October 10.]

MONDAY, AUGUST 13, 1951

UNITED STATES SENATE,

COMMITTEE ON FOREIGN RELATIONS,
COMMITTEE ON ARMED SERVICES,
Washington, D.C.

The committees met, pursuant to notice, in the Foreign Relations Committee hearing room, U.S. Capitol, at 10:30 a.m., Senator Tom Connally, chairman of the Foreign Relations Committee, presiding.

Present from the Foreign Relations Committee: Senators Connally (chairman), Green, McMahon, Fulbright, Gillette, Sparkman, Smith of New Jersey, Hickenlooper, Lodge, and Brewster.

Present from the Armed Services Committee: Senators Hunt, Stennis, Long, Knowland, and Cain.

Present from the Foreign Relations Committee Staff: Dr. Wilcox, Dr. Kalijarvi, Mr. O'Day, Mr. Marcy, and Mr. Holt.

Present from the Armed Services Committee Staff: Gen. Verne D. Mudge.

1 See appendix B.

(1)

AGREE ON FUNDAMENTALS FIRST

The CHAIRMAN. We will go to the bill then with the Armed Services Committee participating.

I think we ought to have a general discussion before we take up amendments.

Senator SMITH of New Jersey. May I ask one question in connection with this?

Is it our purpose to write our own bill or consider the House bill? The CHAIRMAN. I would prefer to consider the House bill, but it has not passed yet.

Senator LODGE. May I make a suggestion about procedure?

The CHAIRMAN. Yes indeed.

Senator LODGE. I am not going to make a motion, but I would like to throw this out for discussion, that we agree on certain fundamentals here before we start reading any bill paragraph by paragraph. After we have agreed on these fundamentals, then the staff can translate our decisions into legislative language. Then at the next meeting we can read paragraph by paragraph.

I would like to suggest that we settle the question of whether we are going to have a single administrator for foreign assistance or whether we are going to continue with the present system.

The CHAIRMAN. Senator, that is on this list here.

Do you not think that whether we have a single administrator or not, we first ought to decide what we are going to do? Then we will know better whether we should have a single administrator or not.

Senator BREWSTER. If you cut out economic assistance it makes a material difference to the kind of administrative set-up you have. Senator LODGE. I think we ought to consider the amount at the end. That makes a big difference on how you might vote on the amount, how the thing is going to be administered.

I would like to consider the amount at the end myself. Of course, I will abide by the decision of the majority. I do not want to spend too much time, like the Russians, fighting about the agenda.

I think we will proceed better as I suggest.

The CHAIRMAN. I felt we might decide on certain fundamentals as to whether or not we are going to cut military aid, for instance, or whether we are going to do our cutting on the economic aid. That is one of the big questions, as I see it.

Senator LODGE. If the chairman has an order of business, I will be glad to follow it.

SUGGESTED PROCEDURE FOR CONSIDERATION OF S. 1762

The CHAIRMAN. I have nothing along that line expect this paper entitled "Suggested Procedure for Consideration."

Senator LODGE. I do not have that. Let me see that.

They have "Administration" as the first item.

This is the way I feel about it: How are you going to work on the administration of a thing until you know what you are going to administer?

As I understand, you would like to pose the question whether we are going to have economic and military aid or just military.

The CHAIRMAN. Yes.

Senator LODGE. Very well. I am willing to vote on that. That is a logical thing.

Senator MCMAHON. You should determine what the program is going to be before you go into administration. If you cut out all economic aid, that will be one thing.

Senator HICKENLOOPER. The House has not reported their bill yet? Senator BREWSTER. I think they are going to take it up tomorrow. Senator SPARKMAN. No, I think the Defense Housing bill comes up tomorrow. That will follow. They have not finished their report yet. I have seen a copy, but the committee has to meet and approve it.

ECONOMIC AID BREAKDOWN

The CHAIRMAN. Here is a question that we have to decide: When we come to economic aid, there is no breakdown in the bill. By that I mean the bill does not say you have to give so much to any country. We have to determine whether we will undertake a plan of that kind or simply give a lump sum and cut by percentage on all of them.

Senator KNOWLAND. Of course, the military aid does not break it down by countries, does it?

The CHAIRMAN. No.

I am concerned with this economic portion. We are going to leave it up to the administrator as to how much he will give each one of those countries. I do not like that.

POINT FOUR APPROACH

Senator FULBRIGHT. That is the same problem that bothers me. I am much more impressed by the Point Four approach, the approach of Bennett and Holmes, than I am by the approach of the ECA in the Middle Eastern and Southeastern countries.

I would much prefer for us to state, if we do believe that, I would be in favor of increasing Bennett's activities, such as he described in India, and I think we could do the same in Iran. While it is not in the bill, it has been shown what they propose to do in Iran. I do not like it. I think Bennett has been doing a good job for a very small amount of money. There is a total of $35 million this last year.

The CHAIRMAN. It has gone up.

Senator FULBRIGHT. It is $450 million under the ECA program. It is a terrific difference under ECA.

I think Bennett and Holmes made a very good showing as to what they are doing and their approach to it, and I think it will achieve better results in the long run than will the other.

How do we go about putting this in the bill, Mr. Chairman?

The CHAIRMAN. We have to decide whether or not we are going to have a breakdown for each country or else we are going to give them a lump sum and leave it up to the administrator.

If you have a lump sum, you are going to have difficulty about saying that no money should be spent for certain things. Your point was that you were against all those combines and things in Iran. I think you are right.

If we give them a lump sum, they can go ahead and spend it all for the same thing.

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