1. Existing law requires the purchasing nation to pay cash in advance, or, "when the President determines it to be in the best interests of the United States," within 60 days after delivery (Mutual Defense Assistance Act, sec. 408 (e) (2)). The pending bill would authorize the President to extend credit terms up to 3 years.

2. Existing law provides that when excess equipment of materials are sold, the price must be at least (1) the cost of rehabilitating or modifying the equipment plus 10 percent of the original gross cost or the scrap value, or (2) the market value, if ascertainable, whichever is greater. The bill eliminates the element of original gross cost and provides that price be computed on the basis of (1) rehabilitation cost plus scrap value, or (2) market value, if ascertainable, whichever is greater. This new formula will result in a lower minimum price in certain cases.

3. Existing law places a limitation of $700 million on the value of contracts for the sale of military equipment that can be outstanding at any one time. There is no limitation in the present bill.

In the judgment of the committee, provision for sale of military equipment to friendly nations has been beneficial. A total of $678 million worth has been sold to 46 countries, with Canada by far the largest purchaser. The changes made in the legislation in the pending bill should further increase the utility of the sales program.

The program is not designed to put the United States Government in the business of selling munitions. On the contrary, it provides a means whereby this Government can check on the military purchases in the United States of other governments. And it further provides a means whereby other friendly governments which are willing to pay for their military equipment can do so.

225. MUTUAL SECURITY ACT OF 1954, AUGUST 26, 1954 (EXCERPT) 1 SEC. 414. MUNITIONS CONTROL.-(a) The President is authorized to control, in furtherance of world peace and the security and foreign policy of the United States, the export and import of arms, ammunition, and implements of war, including technical data relating thereto, other than by a United States Government agency. The President is authorized to designate those articles which shall be considered as arms, ammunition, and implements of war, including technical data relating thereto, for the purposes of this section.

(b) As prescribed in regulations issued under this section, every person who engages in the business of manufacturing, exporting, or importing any arms, ammunition, or implements of war, including technical data relating thereto, designated by the President under subsection (a) shall register with the United States Government agency charged with the administration of this section, and, in addition, shall pay a registration fee which shall be prescribed by such regulations.

(c) Any person who willfully violates any provision of this section or any rule or regulation issued under this section, or who willfully, in a registration or license application, makes any untrue statement of

Public Law 665, 83d Congress, 2d session.

a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, shall upon conviction be fined not more than $25,000 or imprisoned not more than two years, or both.

C. Regional Problems (1945–1956)

(1) Europe

226. REPORT OF THE SENATE COMMITTEE ON FOREIGN RELATIONS ON ASSISTANCE TO GREECE AND TURKEY, APRIL 3, 1947 1 (EXCERPT)

The Committee on Foreign Relations, which has had under consideration the bill (S. 938) to provide for assistance to Greece and Turkey, report the bill with amendments favorably to the Senate and recommend that it do pass.

MAIN PURPOSE OF THE BILL

This bill would authorize the President, when he deems it in the interest of the United States, to extend financial and other assistance to Greece and Turkey. For this purpose an appropriation not to exceed $400,000,000 would be authorized. In general, the assistance contemplated may take the following forms: (1) Financial aid such as loans, grants, and credits; (2) persons in the employ of the United States Government; (3) military personnel for advisory purposes only; (4) articles, services, and information; and (5) instruction and training of personnel in these two countries. Consistent with the sovereign independence of Greece and Turkey, the bill provides adequate safeguards against the improper utilization of the assistance rendered.

BACKGROUND OF THE GREEK-TURKISH ISSUE

The difficult situations in which Greece and Turkey find themselves have been developing over an extended period. For some time it has been evident that without outside assistance these countries would have great difficulty in solving the problems confronting them. It appears from the testimony before the committee that the question of assistance to Greece and Turkey became a matter of urgency for the United States as a result of the decision by the British Government that it could no longer provide the aid it had been giving or had planned to give, and the subsequent urgent appeal by Greece. The decision of the British Government was communicated to the United States Government by notes delivered on February 24, 1947; the request of the Greek Government on March 3.

In Greece there exists an extremely serious economic situation resulting from the destruction which occurred during the invasion and occupation of the country by the enemy and from the disruption of normal economic activities which has been caused by that destruction and by postwar internal armed strife. This armed strife also is in part the result of the events of the war period. During the war, with the aid of the Allies, many thousands of Greeks, organized in armed bands, made incessant war on the enemy. Upon the con

1 U. S. Congress. Senate. Report No. 90, 8 th Congress, 1st session.

clusion of the war most of these Greek irregulars further demonstrated their loyalty to their country by laying down their arms and returning to peaceful pursuits. Communist leaders, however, have been successful in gaining control of a number of guerrilla bands and are endeavoring to use them as instruments for effecting the overthrow of the Government and the establishment of a Communist regime. These armed bands are supported by the small but well-organized and effective Greek Communist Party and its affiliates and appear also to receive assistance and direction fron sources outside Greece. Up to the present the guerrillas have had considerable success creating chaos and uncertainty in various parts of Greece, particularly in the north, and the evidence presented to the committee indicates that the Greek security forces will be unable to restore domestic tranquillity without outside assistance in the form of equipment and supplies. The success of the bands is attributable in part to the demoralization of the population, which has undergone great suffering since the outbreak of the war; to the disorganization of the economy of the country; and to lack of equipment and supplies for the security forces of Greece. The program of aid which the committee recommends to the Congress is designed simultaneously to strengthen the morale of the Greek people, to improve economic conditions, and to make more effective the Greek security forces.

In Turkey there do not exist the internal disorders which are the primary cause of concern in Greece. Turkey, however, is under a severe economic strain which, if long continued, might lead to conditions similar to those now existing in Greece. The strain on the Turkish economy is caused to a large extent by the maintenance of large armed forces which are in need of modernization. Turkey feels herself obligated to maintain relatively large armed forces so long as the severe external pressure under which she labors continues to be applied to her. The immediate objectives of this pressure appear to be to separate certain portions of eastern Turkey from the rest of the country and to abridge Turkish control over the Dardanelles, but the ultimate objective might be to deprive Turkey of her independence. The purpose of the aid to Turkey which is proposed in the bill under consideration is to enable her to take certain necessary steps for strengthening the effectiveness of her security forces without overburdening Turkish economy to such an extent as to endanger its stability. The loss by the Turkish people of confidence in their future might eventually lead to conditions not dissimilar to those now prevailing in Greece.

Your committee finds that the conditions prevailing in Turkey are quite different from those in Greece and that consequently there should be differences in the character of the assistance to be rendered. It is of the opinion, however, that in view of their geographic relationship, the collapse and loss of independence of one of these countries would have most serious effects upon the position of the other. Both countries are striving to progress on the democratic road, and both face difficulties in this endeavor created by forces over which their people have at present no control. The committee believes, therefore, that the matter of assistance to Greece and Turkey constitutes a single problem and that to extend aid at this time to only one of these countries might give rise to events which would seriously threaten the independence of both.

NATURE OF THE MILITARY ASSISTANCE PROPOSED

It has been clearly brought out in the hearings that the military assistance contemplated in the bill will consist only of arms and other supplies for the armed forces of Greece and Turkey, such supplies to be provided on the basis of investigations and recommendations by small military missions sent out by the United States in an advisory capacity. It is proposed solely to help these Governments help themselves and not to assume military responsibilities for them. There is no plan to send to Greece or Turkey combat forces of any nature. The supplies in question are expected to have, in the case of Greece, a maximum value of about $150,000,000 and, in the case of Turkey, about $100,000,000 during the period ending June 30, 1948. They will be designed in each case to meet the specific needs of the Greek and Turkish armed forces as they may be determined by American experts.

Secretary Patterson testified that the material required for Greeceis principally repairs and gasoline for airplanes, weapons and ammunition, vehicles and fuel, clothing and food. In money value, weapons and ammunition account for about one-third; vehicles, fuel, clothing, and food for another one-third; the balance would go for such items as engineering supplies, communications equipment (such as radios, telephones, and wire), mules and horses for use in the mountains, and miscellaneous supplies.

For Turkey the assistance would take the form principally of equipment which Turkey cannot produce, such as antiaircraft weapons, transport equipment, communications equipment, and some railway and port improvements.

The total personnel involved in determining these needs and in supervising the delivery of the equipment will be quite small in number. Testimony heard by the committee indicates that the military mission to Greece would probably not exceed 40 and the naval mission would probably be less than 30.

THE UNITED NATIONS AND THE GREEK-TURKISH PROBLEM

During the course of its hearings, the committee has carefully explored the relationship between the President's proposals and the role of the United Nations.

It has become increasingly clear that by taking the action suggested by the President, the United States will be fulfilling a basic objective of the United Nations Charter-to create conditions of political and economic stability which will preserve the freedom and independence of its members and thus safeguard their sovereign equality. The United Nations was not created to supersede friendly relations between states through assistance from one state to another to carry out the purposes set forth in the Charter.

The Greek Government has requested the assistance of both the United States and the United Nations. At the request of the Greek Government, the Security Council of the United Nations is already dealing with important aspects of the Greek problem. A commission of investigation of the Security Council is concluding an investigation of the disturbed conditions along the northern Greek border. The action taken by the Security Council on the basis of its report should contribute materially to the maintenance of the political independence and the territorial integrity of Greece.

The committee is satisfied that the type of assistance for which Greece and Turkey have asked the United States as a matter of urgency cannot now be furnished by the United Nations. The question is not whether the assistance requested should be granted by the United States or by the United Nations, but whether it shall be granted immediately by the United States. Greece and Turkey stand in need today of equipment and technical assistance for their armed forces if the authority of their Governments and their territorial integrity are to be maintained.

Furthermore, the United Nations is not in a position to furnish the funds so critically needed by Greece to prevent an economic collapse. There is no United Nations agency which can fill the immediate economic vacuum which will be created by the imminent termination of UNRRA and British aid. The United Nations itself has no funds to lend or grant to member nations. The Economic and Social Council is at present primarily an advisory body without resources to make direct financial grants. The International Bank for Reconstruction and Development has not yet begun to make loans; and, if it had, would scarcely regard Greece as a sound credit risk in the present circumstances. The Economic Commission for Europe, which has just been established by the Economic and Social Council for the specific purpose of coordinating reconstruction activities on that continent, cannot begin to function for some time to come. Even if some United Nations body were to recommend economic action on behalf of Greece, the United States is the only country which could provide the bulk of the necessary assistance. For these reasons, the committee has concluded that direct and straightforward aid from the United States is necessary to meet the short-term crisis now confronting Greece.

The proposals made by the President do not preclude longer-range action by United Nations agencies on behalf of Greece. On the contrary, they set the stage for such action. Without the application of first-aid measures today, the gradual restoration of Greece's economic health would be impossible. The bill under consideration should permit Greece to achieve a degree of economic recovery and political stability sufficient to warrant financial assistance from the International Bank. Other types of aid which may eventually be rendered under the auspices of the United Nations are indicated by the comprehensive recommendations of the Food and Agriculture Organization's Mission for Greece. These recommendations include the organization of a United Nations advisory mission whose personnel might be drawn from the United Nations itself and from various specialized international organizations, such as the Food and Agriculture Organization, the International Labor Organization, the World Health Organization, the International Monetary Fund, and the International Bank for Reconstruction and Development.

PROPOSED ASSISTANCE NOT INTERVENTION

The assistance contemplated in this bill has been repeatedly requested by the Greek and Turkish Governments. If we respond to these requests, we cannot be said to be intervening in the affairs of Greece and Turkey, since whatever action we may take will be at their request and with the full agreement of their Governments.

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