Appropriations and adjusted base for fiscal year 1951 as compared with estimates for 1952-Continued 1 Appropriated in Deficiency Appropriation Act, 1950 (Public Law 583, 81st Cong.), June 29, 1950, to cover expenses in fiscal years 1950 and 1951. Estimate for 1952 included in the item "Mutual assistance, economic and military," under proposed legislation to be submitted at later date. As this table shows, our request of $283.6 million for 1952 is $12.2 million more than the amount available in these appropriations for fiscal year 1951. However, our 1952 request is $69.9 million over the adjusted base for 1951 of $213.7 million. The 1951 base figures have been used in this table to make them comparable to the 1952 appropriation requests. The net increase of $12.2 million in the 1952 request over 1951 appropriations results from decreases of $37 million in certain items and increases in others for new or expanded requirements totaling $49.2 million. The principal items in which there are reductions are: Salaries and expenses, American sections, international commissions_ 4 3 18. 4 For total increases of_____ 49. 2 These requested increases in funds involve a net increase of 2,938 positions. Of these, 2,903 are for the vitally important information and educational exchange program in which the Congress authorized an expansion last year. More personnel are needed to operate the network of world-wide broadcasting facilities, run approximately 173 United States information centers overseas, administer the exchange of persons activities, and disseminate various visual materials such as documentary motion pictures, current news topics, and illustrated pamphlets. Additional new positions to the number of 297 are requested for general program activities of the Department, of which all but 24 are for operations of the Foreign Service overseas. Sixty of the positions requested for the Foreign Service are not new; they are now being financed by German occupation costs. Offsetting part of the personnel increases are a number of decreases, including a reduction of 45 in the International Boundary and Water Commission and 222 in the Philippine Rehabilitation Commission. The 1952 estimates when compared to the adjusted base for the 1951 appropriations show, as I mentioned earlier, an increase of $69.9 million. On this basis there are increases of $76.9 million and reductions of $7 million. The more significant increases are for salaries and expenses, $3.1 million; Foreign Service retirement and disability fund, $4.6 million; emergency fund, $10 million; contributions to international organization, $2.9 million; construction, International Boundary and Water Commission, $10.1 million; and international information and educational activities, $44.8 million. The most significant reduction is that of $6.6 million under the building fund. Our Earlier in the year I had hoped to keep our requests for appropriations for 1952 to something below the amounts available for 1951. However, our expanded efforts to deal with the dangers to our national security resulting from aggressive actions by the Communist governments have made this impractical. The Department and the Foreign Service are a vital part of our defense effort. diplomatic activities, particularly in the UN and regional security organizations, must continue to play an important role in the effort to resolve international difficulties. Mr. Thomas Cabot, the new Director of International Security Affairs, and his organization have been assigned new responsibilities for coordinating and directing the efforts of the agencies of the executive branch in support of our regional and bilateral collective defense arrangements. The Department must also provide assistance to Mr. Charles Wilson and his new Office of Defense Mobilization, by rendering various services such as reporting on commodity requirements for foreign economic programs and providing information on foreign production and raw materials resources. And our information and educational exchange and technical cooperation programs must continue at an expanded rate. The major purposes of the increases over the 1952 base requested under each appropriation are as follows: SALARIES AND EXPENSES, DEPARTMENT OF STATE There is an increase of $374,000 in the "Salaries and expenses" appropriation for the departmental service. This is for 24 additional positions in the regional bureaus and the Bureau of United Nations Affairs and to provide for certain fixed expenses, such as automatic within-grade salary advances and an extra day's pay above the 52-week base. The increase requested for the general program of the Foreign Service totals $2.7 million. These additional funds are required for strengthening field activities at our Foreign Service posts in strategic areas of the Near East and Far East; assisting in the administration of export controls; increased dollar costs resulting from the revaluation of the Polish zloty; loss of preferential telegraphic rates; the financing of operating expenses of consulates in Germany at present being charged to occupation costs; and for the fixed expenses of in-class promotions and the extra-day's pay in excess of the 52week base. REPRESENTATION ALLOWANCES An increase of $325,000 for representation allowances is requested to reduce the out-of-pocket cost to Foreign Service personnel and permit continued and expanded appointment of qualified personnel to responsible positions in the Service without regard to their personal financial status. BUILDING FUND The request of $9 million for acquisition of buildings abroad is a $6.6 million decrease when compared to the 1951 base of $15.6 millions. This request is all in foreign currencies owed the United States and will not result in additional dollar cost to the Government. This appropriation, if approved, will complete, except for $50,000, the currently authorized program for utilization of foreign credits to acquire buildings abroad. To make full utilization of the foreign currencies owed the United States and to reduce the dollar cost for rents and allowances the Department has submitted a legislative proposal to the Bureau of the Budget for providing for an increased authorization for this program. It is anticipated that this proposal will be submitted to the Congress at this session. EMERGENCY FUND An increase of $10 million is requested for emergencies arising in the diplomatic and consular service after adjustment for the nonrecurring item of $675,000 for advances on Koreans claims. Since this fund is for confidential purposes, at your convenience I will request an off-the-record review of our proposed use of this fund with you. CONTRIBUTIONS TO INTERNATIONAL ORGANIZATIONS There is an increase in the appropriation for "Contributions to international organizations" of $2.9 million from the adjusted 1951 base of $27.8 million. However, the request of $30.7 million represents a decrease of $23.7 million from the 1951 appropriation of $54.4 million. The largest item in this decrease is a $25 million decrease in our contribution to the International Refugee Organization. The IRO will formally close on March 31 of this year; the 1951 appropriation is sufficient to meet all liquidation costs. The 1951 appropriation is also adjusted by $1.6 million for unobligated balances resulting from savings in the funds appropriated for the United Nations for the international administration of the city of Jerusalem. The net increase of $2.9 million above the adjusted base results from an increase of $3.2 million in the contribution to the United Nations and small decreases and increases for several specialized agencies of the United Nations. CONSTRUCTION, INTERNATIONAL BOUNDARY AND WATER COMMISSION The increase of $10.2 million for construction by the International Boundary and Water Commission is primarily for work on the Falcon Dam, which is scheduled to be completed by November 1953 as required by our water treaty with Mexico of 1944. INTERNATIONAL INFORMATION AND EDUCATIONAL ACTIVITIES It is proposed to continue the "International information and educational program" at the level of operation which it will attain by the end of this fiscal year. To do so will require an appropriation of $115 million. This sum exceeds by only $3.2 million the total amount provided by regular and supplemental appropriation measures in 1951. However, the 1951 appropriations included $41.3 million in construction funds, whereas the estimates for 1952 cover only operating program requirements. The actual difference in operating costs between the two years, after adjusting for the 1951 construction appropriation and for certain other less significant items, is $44.9 million. This increase is the additional amount necessary to provide for full-year operation of the expanded program which the Department is developing as approved and provided for by the 1951 supplemental appropriation. The "Information and educational exchange" program is a vital part of the defense effort and is fully supported by both the National Security Council and the Department of Defense. The competition to turn foreign populations toward a democratic rather than a communistic philosophy of life is as important as any effort being extended today. Because of the urgency to bring this program to full effectiveness, the Department contemplates the submission, at a later date, of an additional 1951 supplemental estimate to provide for an early completion of the world-wide ring of radio facilities. OTHER PROGRAMS The "Mutual defense-assistance" and "Technical cooperation and development" programs require new authorizing legislation. Appropriation estimates for these programs will be submitted at a later date, as will the request for funds for the costs of occupation of Germany and Austria. All of the recommendations of the Hoover Commission for the reorganization of the Department have been thoroughly studied and the bulk of them put into effect. As you know, the Department has had an intensive study made of the Commission's recommendation to amalgamate the departmental and Foreign Service personnel systems. A report has been prepared on this problem by a com 99 66 mittee composed of Mr. James Rowe, a former member of the Hoover Commission, former Congressman Robert Ramspeck, and Ambassador William De Courcy. The Department has responsibility for directing and coordinating several large world-wide programs, such as "Information and educational exchange,' 'Military assistance," and "Technical cooperation and development." Since the Korean crisis and the expansion of our mobilization program, these world-wide programs have increased in importance and scope. These programs have also had an impact on our organization structure; we must assure the coordination of these overall functional programs with regional bureau administration. I believe we are accomplishing a balance which will insure the obtaining of our over-all program objectives and, through the regional bureaus, tailoring the operation of these programs to meet the particular needs of the individual areas of the world. As the programs develop and we obtain added experience in their administration, some changes may be indicated. However, I believe we are on the right track and that successful and economical implementation is being obtained. In conclusion, it is evident that the international crisis and our defense-mobilization activity have added to the functions and responsibilities of the Department and have greatly increased the pressures on the officials who are carrying them out. All of us are aware that we must do our job as economically as possible. We are trying to make our present budget meet continually expanding requirements. And we are going to eliminate or reduce many desirable but less essential activities to help pay for the emergency programs for which we are responsible. Of course, this is difficult to do when the savings we accomplish by making reductions in normal activities are offset by major increases in the cost of our supplies, equipment, rent, and transportation. We are currently engaged in a complete review of the Department's responsibilities in the defense-mobilization program. It will be impossible to discharge all of these new responsibilities without coming back to you for supplemental funds. However, I want to assure you that the cost of any expanded requirements will be kept to the minimum. I appreciate the opportunity you have given me to present this brief summary of the estimates now before you. I am at your complete disposal during the committee's review of the estimates. My staff will provide any facts and figures not contained in the formal estimates which the committee may desire. Mr. ROONEY. Secretary Humelsine, do you wish at this point to make an extemporaneous statement highlighting the matters under your administration in the State Department? Mr. HUMELSINE. Yes, Mr. Chairman; I would like to make a brief statement. Mr. ROONEY. We shall be glad to hear you. Mr. HUMELSINE. First of all, I would like to say, Mr. Chairman and members of the committee, that I am glad to be here. I hope that you will bear with me. I am a neophyte in this particular role, since this is my first appearance before your committee in this capacity. I am finding real difficulty, I might add, in filling the spot formerly presided over by Mr. Peurifoy, who I know did a fine job for this committee and for the Department of State. I hope that in some small measure I can meet with your approval in this capacity. I would like to give you a brief summary of the budget request that we have made. SUMMARY OF REQUIREMENTS First of all, this request will not cover the complete monetary requirement of the State Department for the fiscal year 1952. We will be up, I am hesitant to say, for some supplemental considerations. This budget was prepared last spring before the outbreak of the Korean hostilities, and it does not reflect the complete requirements of the Department. Mr. ROONEY. Why as far back as last spring? Mr. HUMELSINE. În order to meet the requirements of the Bureau of the Budget and the President in putting together the entire budget for submission to the Congress. In addition to the supplemental that I referred to, the budget estimate does not include the point 4 program, nor the budget estimate for occupied government in Germany and Austria. Those will be submitted later. The over-all total of the Department of State's budget for 1952 is $283,366,476. This represents an increase of $12,200,000 above the appropriations for last year. But, by making that statement, I do not want to mislead the committee, because the $12,200,000 appropriation increase does not actually show the real picture. When the proper adjustments are made, excluding the nonrecurring items, the estimate actually represents a real increase of approximately $69,000,000-it comes closer to $70,000,000, $69,900,000 above the program represented by the adjustments to the 1951 figure. I think I should mention, Mr. Chairman, at this time, the most significant increases in round figures, if that meets with your approval. They are as follows: "International information and educational activities" represents an increase of $45,000,000. "Construction of the Mexican Boundary and Water Commission," $10,000,000. "The emergency fund," $10,000,000. "The Foreign Service retirement fund," $4,500,000. "Salaries and expenses, Department of State," $3,000,000. "Contributions to international organizations," $3,000,000. The most significant decrease is in "Foreign buildings," in the amount of $6.5 million. I have brought today a series of charts which I would like to cover briefly. Mr. ROONEY. We shall be glad to have you exhibit them. Mr. HUMELSINE. This first chart, which we will leave here with the committee, is designed to show the global organizational breakdown of the Department of State, the way it handles the oversea responsibility. Each one of the colors reflects an office in the Department, under a regional Assistant Secretary. For example, the blue area shows the Office of East Coast Affairs in the American Republics area. CHART OF AREAS OF COMMUNIST PENETRATION We have made an overlay, based on intelligence estimates, to show the degree of communistic threat in the whole world situation. The red-the solid red-shows that part of the world which is presently under direct Communist control. The next, which is the vertical cross hatch, shows places where the Communist Party is the major political organization, but does not necessarily control the government. The next is the horizontal cross hatch, which shows where the Communist movement is of importance, by virtue of party activities. The next is the dark-green block, showing where the Communist movements are minor, with the limited influence of Communist trade-unions and other organizations. Then, you see the solid green, which indicates no Communist organization, and where, according to our intelligence estimates, the |