Mr. STEFAN. Does Commerce come in there?

Mr. THORP. Does Commerce come in?

Mr. STEFAN. Yes.

Mr. THORP. Yes, Commerce comes in in connection with the general discussions. There are various experts in Commerce as to what are possible sources and in developing plans for getting these things, but I do not think that Commerce has any part as such in the actual

process.

Mr. STEFAN. I just cannot figure why there should be so many agencies working on this one particular thing.

Mr. THORP. It is not so many agencies. You have the agencies interested, which decide what should be in the stockpile, and you have the purchasing agency, which is the General Services Administration. Then you have the State Department which deals with the Government getting it to facilitate the shipments. Now, I could build up a story where there would be a lot of other agencies involved as well.

Mr. STEFAN. Yes, so could I. You have not mentioned the armed services.

Mr. THORP. Yes, the armed services who are also interested, and then you have also a case where it is a matter of opening up some new deposits in a foreign country where possibly the Export-Import Bank might come into it.

Mr. STEFAN. Are you the only agency that can facilitate these shipments?

Mr. THORP. No, but in terms of dealing with a foreign government where that is a problem we are responsible. Many times there is not any problem with the foreign government, and we do not get into it at all, but in those cases where there is a problem with a foreign government, then that becomes the State Department's responsibility.

ADDITIONAL EMPLOYEES

Mr. STEFAN. Why do you need these nine additional employees, Mr. Thorp? What are they going to do?

Mr. THORP. They will be involved in the stockpiling which we have discussed and also in the whole commodity problem, the problem of sources, and the problems that arise because of the increased shortages of war materials. Take sulfur, for example, and the fact that the three virtual heads of governments who have been here in the last several months have all wanted to talk about sulphur. We have to have somebody in the State Department who can arrange that. They need to know enough about sulphur to know how to bring it into the picture, and that is a question of working with people in many additional agencies.

Mr. STEFAN. And no other agency of government can do that except your agency?

Mr. THORP. There is no other agency of government, I think, to whom Mr. Attlee should go when he comes over here, none other than the State Department. If Mr. Attlee started going all through the United States Government talking to everybody, I think the Government would find itself in a very disorderly way, and the problems I am worried about are the problems that will come from this Government and from foreign governments.

MONETARY AFFAIRS STAFF

Mr. STEFAN. Mr. Thorp, you have a monetary affairs staff in your Bureau?

Mr. THORP. Yes, sir, that is right.

Mr. STEFAN. What do they do?

Mr. THORP. Well, that staff is particularly concerned with problems that relate to foreign exchange and problems relating to the supply and handling of gold in the world. They are essentially concerned with monetary and commercial banking problems.

FOREIGN CREDITS

Mr. STEFAN. Are they concerned with foreign credits?

Mr. THORP. They might be concerned with things like shifting short-term credits in terms of commercial loans, and so forth. Longterm credits becomes the problem of the investment and economic development group.

FOREIGN CREDITS FOR EXPENSES ABROAD

Mr. STEFAN. I do not know whether I should direct this question to you and your monetary staff or not, but it is rather difficult for me to determine exactly how much in foreign credits could be available to the United States for all the expenses abroad. That is a problem that is complicated by the type of agreements, and so forth.

There are all kinds of provisions in treaties, some of them providing specifically for funds to be used for certain purposes. Specifically, I am referring to the counter-part funds. Do you have a staff handling that?

Mr. THORP. Well, we have been involved in negotiating these matters, and we are supposed to be the experts, but actually, I think, in terms of the total amount, and matters of that sort, that Mr. Wilber can give the information..

Mr. STEFAN. Can you tell me how much counter-part funds there are now, the total?

Mr. WILBER. We have a total available of $890,000,000.

Mr. STEFAN. I had $750,000,000.

Mr. WILBER. The balance available as of December 31 for the program was about $750,000,000. I think that is where your figure comes from.

Mr. STEFAN. Yes.

Mr. WILBER. I have the amounts here by countries, of the program that we have already planned, according to the building fund, Fulbright, and for administrative expenses. I will be glad to give you either the total or detail figures.

Mr. STEFAN. About one-third has been earmarked for use in strategic materials. Why could not more of that be earmarked for procurement of strategic materials, outside of what we have for the acquisition of buildings for the Foreign Service?

Mr. WILBER. I believe the strategic materials is a portion of the ECA counter-part funds.

Mr. STEFAN. They get 5 percent.

Mr. WILBER. That is correct. But that is a large sum, in total.

Mr. STEFAN. That still comes within the jurisdiction of your department, Mr. Thorp?

Mr. THORP. Only in that as far as ECA counterpart funds; those come before the National Advisory Council. The ECA presents its program for the use of counterpart funds.

Mr. STEFAN. Will you put in the record the total of counterpart funds?

Mr. WILBER. We will be glad to do that.

Mr. STEFAN. Can you give us the grand total?

Mr. WILBER. The grand total, as of December 31: There was a balance of $750,764,965, from all sources, other than ECA counterpart funds.

Mr. STEFAN. How much of that is obligated?

Mr. WILBER. That is the total cash balance.

Mr. STEFAN. Yes.

Mr. WILBER. Actually against that we have an unexpended balance of allotted funds for the building program, in the amount of $31,082,119.

We have programed against the total for other unallotted projects, in the building fund, of $90,050,000.

We have on the, Fulbright program, an unexpended balance of $52,891,079, and to carry out the balance of the Fulbright program, presently planned, we will require $91,700,000.

Mr. STEFAN. Leaving a balance on hand of how much?

Mr. WILBER. May I add the administrative item there?

Mr. STEFAN. Yes; put that in the record.

Mr. WILBER. The amount programed for future administrative expenses of the Department is $13,118,221, which would leave us unprogramed balance in these funds of $472,000,821.

STRATEGIC STOCKPILING

Mr. CLEVENGER. Mr. Thorp, who is the watchdog of the strategic stockpiling? Does that fall under your office?

Mr. THORP. No; the Munitions Board is responsible for that.

Mr. CLEVENGER. I am thinking specifically of those who authorized the shipment of materials, from stockpile, as someone has been telling us which was quite substantial from these materials, to the Soviet last year, whether that was the Secretary of Commerce or not?

Mr. THORP. Any shipments out of stockpile would be the responsibility of the Munitions Board. The question as to whether any shipments from other sources should be allowed from the United States is the responsibility of the Secretary of Commerce.

Mr. CLEVENGER. I am trying awfully hard, and I have not as yet. received a satisfactory answer to who is responsible.

Now I want to ask you about the use of some of these funds. Would it not be possible to use some of them instead of for instance, on European buildings, whereby rather than having State Department buildings-using the unexpended balances of several hundred million dollars say for airfields?

Mr. THORP. That would depend upon the way in which the particular agreement was worded. In negotiating them with different countries some were pretty specific about limiting the use, because the foreign country was concerned that this might take up a part of its normal trade income.

In other cases it is wide open and it could be used perhaps. I would have to study it case by case. In many instances, of course, it would require an agreement with the foreign country, and they might give us, in many instances, air bases-the local cost is borne by the other government; the only way that we have to meet is, primarily, equipment, and that would have to be paid in dollars.

Mr. CLEVENGER. You would think that in an emergency of the present nature that would be one that would justify inquiry, and I think we would all feel, in this particular emergency, that it is more important to build these defense bases than it is to be putting up expensive buildings which will require maintenance.

Mr. THORP. Yes.

Mr. CLEVENGER. I know I feel, and I think the members of this committee feel, we are getting pretty top-heavy, and that we are getting some rather exclusive housing with the expense of manning the staff.

Mr. THORP. I think one of the difficulties in general agreements of that kind would be in deciding how it is to be used. I am sure there has been a study made, but I have not personally gone into it in each case.

Mr. ROONEY. To clarify the record with respect to the question my distinguished colleague Mr. Stefan asked a while ago: Do you know of any instance where the Chief of Mission of the Foreign Service has complained of actions on the part of the ECA mission?

Mr. THORP. I think that is a little broader than Mr. Stefan's comment, because there certainly have been cases

Mr. ROONEY. This is not comment; it is a question.

Mr. THORP. Mr. Stefan's question related to the development of programs; with respect to the development of programs I do not have and I do not know if there has been any case; certainly no case has been called to my attention, and it would have been if there had been such a difference raised between the two.

Mr. STEFAN. That is the Chief of Mission and the Chief of the ECA?

Mr. THORP. Yes.

Mr. HUMELSINE. May I make a statement off the record?

Mr. ROONEY. Certainly.

(Discussion off the record.)

INTELLIGENCE

WITNESSES

W. PARK ARMSTRONG, SPECIAL ASSISTANT FOR INTELLIGENCE CARLISLE H. HUMELSINE, DEPUTY UNDER SECRETARY FOR ADMINISTRATION

EDWARD B. WILBER, BUDGET OFFICER

Mr. ROONEY. The first item for our consideration this afternoon, gentlemen, is entitled "Special Assistant for Intelligence," which is divided into three subdivisions: One, Office of the Special Assistant; two, Office of Intelligence Research, and three, Office of Libraries and Intelligence Acquisition. These appear at page 30 of the justifications, which page we will insert at this point in the record.

Mr. ROONEY. Mr. Armstrong, do you have a general statement? Mr. ARMSTRONG. I do, Mr. Chairman.

Mr. ROONEY. We shall insert that statement at this point in the record.

(The statement referred to follows:)

STATEMENT OF THE SPECIAL ASSISTANT, INTELLIGENCE

I am the Special Assistant to the Secretary for Intelligence. It is the responsibility of my organization to provide the Department and certain other agencies of the Government with evaluated foreign intelligence in the political, sociological, and certain economic fields. In years past, when I have appeared before this committee, I have felt it my duty to convey, as emphatically as possible, the importance of the Department's intelligence work and the complexities and difficulties of providing sound intelligence service. This year, I think I need not dwell on these points-the needs and the problems are obvious.

Many of you are acquainted with the structure and historical development of our research and intelligence organization. Accordingly, I shall refer only briefly to these matters and devote the bulk of my time to points with which you may not be familiar and which I feel are more important at this time, namely, an account of some of the major tasks which have been carried out by the organization and a description of some of the added responsibilities thrust upon us by the outbreak of hostilities in Korea.

Before doing so, I will say a word about organization. Certain of our responsibilities are discharged within my immediate office. These include, for example, furnishing advice and assistance to the Secretary in his capacity as a member of the National Security Council; the performance of certain specialized and highly classified liaison functions, and the coordination of interdepartmental intelligence