TREATIES

Mr. ROONEY. With how many treaties have you been concerned in the past fiscal year?

Mr. FISHER. In the past fiscal year we have drafted 27 treaties and other agreements. Then there were over 130 treaties and agreements prepared in other offices of the department.

Mr. ROONEY. With a staff of 97 people?

Mr. FISHER. That is the treaty unit itself. The treaty unit itself is subdivided into 16 professional and 9 nonprofessional-clerks and stenographers. I was trying to break it down into the various operating functions for you.

Mr. ROONEY. Do you want to make a statement with regard to this requested appropriation of $571,585?

ORGANIZATION AND FUNCTIONS OF THE OFFICE

Mr. FISHER. I can do better by giving the components to you. When you get through with the treaty unit, you reach the Claims Section. The Claims Section handles claims of this Government and others claims presented against us and the presenting of claims to other foreign governments for which we are entitled to reimbursement. That in the budget is seven professionals and four nonprofessionals. It is primarily or at least in large part a service unit. It is run by Ben English, who is an old hand at this, and the best judges of his ability are those people who deal with international claims, and the expressions of a number of those who have worked with him, I think, is a universal recommendation. I know when I became Legal Adviser a few people I had not known before said, "Look, you have an awfully good man down there, Ben English," people who worked with him. They said, "He is a good man. When we come down there, he can give us what information we want."

With those two exceptions, the rest of the organization is designed to follow the organization of the Department. We ourselves are not work initiators; we are a service function. We have men assigned to assist the Deputy Under Secretary for Administration; we have people assigned to assist the Deputy Under Secretary, the Assistant Secretary for Inter-American Affairs, and all of the programs of the Department involving in one way or another legal principles.

You understand that our business is controlled by the extent of the substantive and functional business in the Department. For that reason, this budget represents in a sense a microfilm of the legal aspects of the entire work of the Department.

I think that is the justification, sir.

Mr. PRESTON. Do you advise the UN personnel?

Mr. FISHER. Yes, sir; we do.

Mr. PRESTON. It is gratifying to see your budget stays at the same figure.

Mr. FISHER. We try to do with what we have.

Mr. MARSHALL. How many treaties did you draft or how many items were put in the form of treaties last year in connection with fish and wildlife?

Mr. FISHER. I would have to provide that for the record. In the international field, that is a pretty active subject, but I do not have

the breakdown on that particular subject. If I may supply it for the record, I would certainly like to do so.

Mr. MARSHALL. I would like to see that included in the record. Mr. ROONEY. It shall be inserted in the record at this point. (The material referred to follows:)

WORK PERFORMED BY THE TREATY AFFAIRS STAFF (L/T) OF THE LEGAL ADVISER'S OFFIce During the PERIOD JULY 1949 TO JUNE 1950 ON CONVENTIONS RELATING TO FISH AND WILDLIFE MATTERS

1. Reviewed drafts of four new fishery conventions.

2. Prepared report to the President on the port privileges convention with Canada with a view to the submission of that convention to the Senate for its advice and consent to ratification. This report outlines the general purpose of the convention, gives background information as to the need for the convention, and explains the manner in which it is to operate.

3. Performed depositary functions of the United States with respect to the International Whaling Convention of 1946 and the Northwest Atlantic Fisheries Convention of 1949.

4. Prepared, for signature by the President, full powers authorizing signature of the port privileges convention with Canada, and ratifications of the Northwest Atlantic Fisheries Convention and the tuna conventions with Costa Rica and Mexico. Prepared protocol of exchange of ratifications of tuna convention with Costa Rica and arranged for and participated in the ceremony of such exchange between the Secretary of State and the Ambassador of Costa Rica. Subsequently prepared the President's proclamation of that convention.

5. Participated in formulation of exchange of notes with Costa Rica setting forth understandings respecting the tuna convention with that country.

ASSISTANT SECRETARY FOR ECONOMIC AFFAIRS

WITNESSES

WILLARD L. THORP, ASSISTANT SECRETARY OF STATE FOR ECONOMIC AFFAIRS

CHARLES H. MACE, DIRECTOR, EXECUTIVE STAFF

LEROY D. STINEBOWER, DIRECTOR, OFFICE OF FINANCIAL AND DEVELOPMENT POLICY

CARLISLE H. HUMELSINE, DEPUTY UNDER SECRETARY FOR ADMINISTRATION

EDWARD B. WILBER, BUDGET OFFICER

Mr. ROONEY. The next item is entitled "Economic Affairs" and appears at page 22 of the justifications. The request, which is analyzed on pages 22 and 23 of the justifications, is for an increase of $40,300 above the amount appropriated in the current fiscal year and an increase of nine employees. These pages will be inserted in the record at this point.

(The material referred to follows:)

ASSISTANT SECRETARY FOR ECONOMIC AFFAIRS
Activity: Executive direction and policy formulation

Mr. ROONEY. Do you have a statement with regard to this requested appropriation, Mr. Thorp?

Mr. THORP. Yes, sir; I have.

Mr. ROONEY. We shall be glad to insert it in the record at this point and have you comment upon it.

(The matter referred to is as follows:)

STATEMENT OF THE ASSISTANT SECRETARY, ECONOMIC AFFAIRS

I am here to testify on the needs of the Economic Offices of the Department. The changes which have developed in the international economic situation as a result of the present world crisis have had a sharp impact on the character and emphasis of our work, increasing greatly our problems and responsibilities. I would like to discuss some of these changes and the implications which they have on our work.

Security considerations necessitated the tightening of export controls, an effort calling for close cooperation among the interested agencies of this Government. A wider range of raw materials and manufactured goods was brought under control. These measures were supplemented by intergovernmental consultation which had the objective of working out a system of United States export controls

and friendly government controls that are mutually supporting and of maximum effectiveness. Increasing attention has also been given to the security aspects of the export of industrial technology.

The present world supply situation indicates a shift from prospective surpluses to serious shortages in a number of basic commodities, accompanied by rapid price increases. These shortages are all the more serious in view of the accelerated defense and production requirements of this and other governments. It has been necessary to provide export measures which will assure the most efficient free-world use of these commodities. The upward revision of stockpile objectives has also contributed to supply and procurement problems. The result of these developments has been to increase substantially the number of items subject to control and allocation. This trend will continue as demand from both military and nonmilitary sources expands.

From its nature, the short-supply problem embraces the entire free world and cannot be limited to a regional basis. This problem has been considered over the last few months by the Governments of the United States, the United Kingdom, and France. The result has been to propose to the other nations of the free world the establishment of a series of intergovernmental standing commodity groups, on which the important producing and consumer countries will be represented, to recommend to the governments concerned action required to expand production, conserve supplies, and assure distribution in a manner to achieve most effective utilization of particular short-supply materials.

In the financial and economic development field, we are now faced with the necessity of concentrating on measures of economic defense and the development of economic programs which will make the maximum contribution to the military strength of the free world. The principal line of activity we see ahead will be the development of financial policy in connection with the control of foreign financial transactions. It will be necessary to develop financial policies and techniques to facilitate the mutual defense assistance program. The United States programs of economic aid to various areas of the world will need to be designed increasingly to promote the supply of needed materials to the United States and to relieve the United States of the burden of supplying those areas out of its own domestic supplies, which will be in many respects insufficient to meet the combined demand. There is the related objective of economic assistance programs to combat the influence of communism.

A major objective will be to recast loan policy so that supplies furnished by the United States will make the greatest contribution to the over-all mobilization effort.

In the pursuit of these vital defense objectives and in the carrying out of those programs closely related to our mobilization effort, we have not lost, and we do not intend to lose sight of our long-range commercial and financial objectives. We expect that it will be necessary to reexamine our goal of establishing general convertibility of currencies in the countries because of the situation which now faces the free world. While progress toward convertibility may have to be postponed by some countries, in others, recent considerable shifts in their balance of payments, particularly as regards dollar earnings, appear to have brought the achievement of a substantial degree of convertibility appreciably nearer.

In the trade field, while controls will become increasingly extensive, there will nevertheless continue to be wide areas of international trade moving with reasonable freedom from such controls. Through the trade agreements program and by making the general agreement on tariffs and trade more effective, this Government will continue its efforts to reduce unnecessarily restrictive tariffs and other barriers to production and trade.

In short, our objective is to take all necessary action to bring about maximum mobilization of the economic strength of the free world, but to realize that this does not and should not mean that our long-range goals are to be abandoned. In fact, the long-term foreign economic policy of this Government provides a firm foundation for the future and gives promise of a growing strength of the economies of those countries combating communism.

This balance between our special emergency programs and our long-range policy objectives is to be seen in the work of the Department in the field of cartels and restrictive business practices. Such practices as price fixing, limitations on production, division of markets, and related conduct will unjustifiably add to the burden of defense costs and contribute to inflationary pressures which impair our economic strength. With respect to foreign economic programs and operations, we are participating in interagency coordination to relate domestic control measures to such programs and operations.

We are confronted with the problem of increasing demands on the facilities for international transport and communications. In the field of telecommunications, like many others, we must both carry on our peacetime work and devote new energy to new defense activities. Specifically, the long effort to bring about international acceptance of engineering standards in the use of the radio spectrum must continue in spite of increasing difficulties. At the same time, control of clandestine radio operations and plans for the wartime usage of all international communications facilities must take our urgent attention.

In shipping, a major new element is the activation of the International Maritime Consultative Organization (IMCO). Emergency shipping activities under the North Atlantic Treaty Organization (NATO), the rapidly growing United States merchant marine fleet, and the changing international trade conditions have resulted in additional responsibilities.

The major emphasis in civil aviation continues to be on the obtaining and maintaining of the complex system of rates, routes, facilities, and services essential to the operation of United States aircraft on scheduled and nonscheduled civil and military flights to foreign points. In the present emergency period, the consultations with other agencies and the negotiations with foreign governments have increased in significance and urgency. In addition, the present situation demands concentration upon plans for the mobilization of international civil aviation resources.

The anticipated opening of the Inter-American Highway from the United States to Costa Rica in 1952 requires immediate negotiation of an international agreement to cover bus and truck traffic on the highway.

To carry our the responsibilities of the economic offices we are here requesting 303 positions and $1,784,185, an increase of 9 positions at $40,300 over 1951. This will not provide for many emergency responsibilities now being assigned to the economic area. We are now preparing an emergency supplemental estimate to cover these requirements.

Mr. THORP. Mr. Chairman, if I had been appearing before this committee last summer, I would have been able to give you a very optimistic picture with respect to the world economic situation, because the expansion and recovery which we have been working so hard to achieve in the postwar period was really taking hold. European recovery was moving rapidly; our own balance of payments was steadily improving; foreign countries which are underdeveloped were beginning to show more progress in developing realistic programs; the reciprocal trade program was beginning to show definite results in the removal of quotas, and so on. So I am sorry to have to report, which I am sure you all know, that since last summer the world economic situation has changed tremendously. We are now back in a condition which can be generalized as being a condition of shortages once more in the world.

What has happened, of course, is not only that we and a number of European countries have stepped up in a major way our efforts to rearm and thus have put on the world economy, which it did not have last summer, a tremendous demand for materials. The net result has been not only a shortage of materials but a considerable rise in the price level.

As a result of that sitution, our work in the State Department has multiplied in the economic field so that we are now back to the situation, which we have had at times in the past, of having to work a great deal of overtime and week ends.

The fundamental problems are the problems in the raw-materials field, where we have now set up some international machinery in the hope that it will bring some order into the picture. We also now, having had a steady stream of requests from other countries as to the way in which their economies are being affected by shortages, are having to rethink in terms of assistnce to foreign countries, because