MINUTES MONDAY, MAY 25, 1953 UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, D.C. The committee met in executive session at 10 a.m. in the com mittee room. Present: Chairman Wiley, Senators Smith, Tobey, Ferguson, Fulbright, Sparkman and Gillette. The committee heard Administration witnesses on unexpended balances, and the matter of East-West Trade. For record of proceedings, see printed hearing. The committee recessed at 1 p.m. (435) MINUTES WEDNESDAY, MAY 27, 1953 UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, D.C. The committee met in executive session at 10 a.m. in the committee room. Present: Chairman Wiley, Senators Smith, Ferguson, Knowland, George, Fullbright and Mansfield. The following nominations were considered by the committee: Michael J. McDermott, of the District of Columbia, to be Ambassador to El Salvador; Arthur Gardner of Michigan, to be Ambassador to Cuba; William T. Pheiffer, of New York, to be Ambassador to the Dominican Republic; R. Douglas Stuart of Illinois, to be Ambassador to Canada. Each of the nominees appeared personally before the committee. Following their appearances the chairman was ordered to report the nominations to the Senate. The chairman instructed that absent members be polled. The committee then returned to a discussion of the mutual security program on the question of unexpended and unobligated balances. Administration witnesses testified. The committee recessed at 1:20 p.m., to meet again at 1:30 p.m. on the mutual security program. Present at the afternoon meeting: Chairman Wiley and Senator Smith. Administration witnesses continued to testify on the mutual security program. For record of proceedings, see printed hearing. The committee recessed at 3:45 p.m. REPORT BY THE SECRETARY OF STATE WEDNESDAY, JUNE 3, 1953 UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, The committee met, pursuant to notice, at 10:30 a.m. in the Foreign Relations Committee room, U.S. Capitol, Senator Alexander Wiley (chairman) presiding. Present: Senators Wiley (chairman), Smith of New Jersey, Hickenlooper, Tobey, Langer, Knowland, George, Green, Fulbright, Sparkman, Humphrey, and Mansfield. Also present: Dr. Wilcox, Dr. Kalijarvi, Mr. O'Day, Mr. Marcy, Mr. Holt, of the committee staff. [The committee first took up certain routine nominations. It then turned to a report from Secretary Dulles on his trip through the Middle East.] The CHAIRMAN. Gentlemen, Secretary Dulles has arrived. Mr. Secretary, we are glad to have you here with us. You have traveled around the world and have come back looking fresher and younger than ever before. It must be that you have had no problems. STATEMENT OF HON. JOHN FOSTER DULLES, SECRETARY OF STATE, ACCOMPANIED BY HENRY A. BYROADE, ASSISTANT SECRETARY OF STATE FOR THE NEAR, MIDDLE EAST AND AFRICA Secretary DULLES. I felt what problems there were I could just bring back maybe for you gentlemen, so I would not need to worry about them. The CHAIRMAN. Will you carry on in your own way and tell us what you think we ought to know, about what you found out. Secretary DULLES. I would take up these countries, not necessarily in the order I visited them, but as they present either distinctive or group problems. LIBYA Libya, in the middle of the Mediterranean area, is a new state which is very considerably influenced by the United Kingdom, and we have a very considerable influence, we have a very important base in Libya, and the British are trying to again enlarge its bases in Libya. Our base arrangement is in pretty good shape, although subject to renegotiation, and in many of these cases we have a sort of side agreement with the country that in return for a base which they give us for nothing, we give a certain amount of economic aid. I am not at all satisfied that the way these things are set up is really the best way, as it leads to misunderstandings because, in theory, the two things are disconnected whereas, in reality, they are supposed to be connected. THE CHAIRMAN. Will you give us a concrete example of what you just mentioned? BASE AND AID ARRANGEMENTS Secretary DULLES. Yes. Libya is a concrete example. They are supposed to give us a base for nothing, but we are supposed to give them at least a million dollars a year in terms of economic aid. Actually, because of a dispute about the type of barracks, we have paid them nothing and have been using them for a year and a half and they have not gotten what they consider to be the minimum return for the base. I recommended to the Defense Department, on my return here Saturday, that we make some payment on account, because their whole economy, which is very fragile, depends on getting from us money, and they consider it quite rude for us to continue to occupy bases and use this space for a year and a half without their getting any quid pro quo. The CHAIRMAN. How long ago was that agreement made? The same situation exists in Arabia, where there is a sort of an economic aid which is looked upon by us as kind of a side agreement. The thought seems to be following a principle of we don't pay for the base, we make a side agreement and we will give them economic aid. Theoretically it is an independent agreement in a legal form, but actually the agreements are connected and it leads to quite frequent misunderstandings, as is the case in Libya today. In the case of Greece, the Minister of Coordination was over here just before I left, and prepared a sort of communique in which he said that we would continue to give economic aid to Greece. I cut that out of the communique at the last minute, and after it had been sent over to Greece it caused quite a little furor. I thought that we were sort of cutting down this economic aid, and I was told that really the deal was that that was a quid pro quo for base rights, and so forth, in Greece, but that we could not publicly connect the two things. Well, that is the only problem we have in Libya. It is an extremely important base. The air people look upon it from the standpoint of a strategic air operation, which is a quiet way of saying atomic bombing of Russia. It is extremely important. It does not show up on that map, but it does on the larger one. Senator SMITH. Don't they figure they are getting any benefit from the joint effort here? Secretary DULLES. No, no benefit to these nomads of the desert of Arabia, but they have got an economy, where they only have a few hundred thousand people in the country, and it is a very important country, and the government will not exist unless it has some ex ternal source of funds. The only thing they have to sell in the world is this strategic position. The CHAIRMAN. How long ago was that agreement made? The CHAIRMAN. Is there a memorandum of it? Secretary DULLES. Is there a memorandum of it? The CHAIRMAN. Yes. Secretary DULLES. Yes, there is a formal written agreement. TERMS HAVE NOT BEEN SETTLED Mr. BYROADE. The agreement has not been ratified yet. Secretary DULLES. It has not been ratified by the Libyan Government, and there is some question about the provisions, and they think they should get more for it, they think they should get $2 million a year. As a matter of fact, I think the military people are quite prepared to evaluate it at 2 million, or quite a bit more because it is an extremely valuable position. Senator MANSFIELD. Why is that not a military problem. It looks like the military should take care of it. Secretary DULLES. We discussed it at the National Security Council meeting earlier, and I think they have the money and can clean the situation up, and will clean it up. It is one of these things that gets down into the bureauracy and everybody thinks the reason for not doing anything is somebody else, but it is creating considerable ill will there, and a feeling that we are not living up to our promises that we extended as a condition for them to grant us these facilities. GREECE I pass on next to Greece, because it is in the same general area. The relationship with Greece is extremely good. They have an excellent government now with [Premier Alexander] Papagos, and a cleaner government than they have had for a long time. Papagos is very loyal to the United States. He is willing, if the Korean war goes on, to send more troops to Korea, and also to give us bases and facilities, there, as we desire. They do expect some economic aid, particularly to help them develop some water power projects which they have there, and I believe that the military will feel it worth while to do so. Senator HUMPHREY. Is that in the Mutual Security budget? Secretary DULLES. Yes. It is not earmarked there, but the funds for that are available on the budget as submitted. Then, if you go on, you get next to the Arab world. EGYPT I might mention first, Egypt. We have gone over there, or have gone with the hope and expectation that quite a little could be built around the foundation of Egypt. The new government of General [Muhammad] Naguib seems to offer considerable promise and maintains a certain prestige in the Arab world. 1 Egyptian Premier and titular head of the 1952 revolution against the monarchy. |