Mr. PRESTON. In such a case who checks on that?

Mr. WILBER. We have an administrative officer who handles that and who is responsible for it.

Mr. PRESTON. But that is not true throughout the State Department?

Mr. WILBER. Yes, sir; as a policy that is true. It may be violated on occasion, but as a policy it is true.

Mr. PRESTON. My information is it is not enforced, and I could produce people, if you insisted, who might express that same view, and who would say in your establishment definitely it is not enforced. If you can assure that it is done, that is all right.

Now, then, you do not have a rule in your shop about how many coffee breaks a person may take; do you?

Mr. MACE. No; we have no rule permitting coffee breaks.

Mr. PRESTON. It is not a rule, as you state, but it is allowed; is it not? If a person wants to get up from his desk and go to the cafeteria and get a cup of coffee nobody says he cannot do that; is not that correct?

Mr. MACE. Yes, sir.

Mr. PRESTON. And if he gets the urge to go three times a day, he goes; does he not?

Mr. MACE. That is right.

Mr. PRESTON. 300 people will consume more man-hours with coffee breaks than the number of man-hours you will get out of the total people you are asking for here, 9 people. So, actually, nine additional people cannot be so important. In other words, if you put the people you have to maximum use they will save more man-hours than those additional nine people will produce. I am not asking anybody to be a slave driver, of course.

OVERTIME

Mr. THORP. I am afraid I have to face that in our operation, Mr. Preston. I have a very real feeling of being a slave driver because the amount of overtime done in the Economic Offices is staggering. The number of men working on Saturdays and the number of people who do not leave until well into the evening is very large. I know that because all of us in the top group are there beyond hours, at those hours, and I must say that I have a sense of being a slave driver such as I never had when I was in private business, and it is a relatively uncomfortable sense because people are supposed to have time off and have vacations. We have great difficulty in working out vacation schedules because of the great burden of work that there is for us to do in the Economic Offices.

Mr. PRESTON. You feel quite guilty about it?

Mr. THORP. It is quite difficult for me to feel that we can achieve what is regarded as proper personnel practice, and while I am not raising the question of governmental overtime, it is very difficult for me to believe that anyone, no matter who, could solve the problem by saying that people now working overtime should absorb this much time.

Mr. PRESTON. Do you know what I believe, Mr. Thorp? I believe that you could take the bit in your teeth and turn to the Department and say, "I am going to reflect some deflation on the job here.

We are going to get right down to earth here, and we are going to retrench," and I think that you could sweep out 10 percent of your personnel and never miss them.

Mr. THORP. I have been responsible for this operation now for almost 6 years, and that has been one of the things I have been concerned about. I have no desire to build up a large staff, but I do have to provide, in getting the job done well, for a sufficient number of qualified men who are responsible officers. We have continually thought in terms of making sure that there was no overlapping with other agencies in the Government and that we were working efficiently with the rest of the State Department. I do not feel that we have had people who are just standing around serving time. We cannot afford that kind of luxury in the Economic Offices.

Mr. PRESTON. The remarks I have made, Mr. Thorp, I hope you realize are not directed at your shop particularly. I think it can be done in any shop in the Government, in any shop, any one of them. You, of course, do not agree with me, and I do not want you to agree unless you do.

Mr. THORP. I would not want to testify about other shops in the Government. I only know my own, and I am very proud of it.

Mr. PRESTON. Let me say one thing to you, Mr. Thorp. I have talked to numerous people in the various departments of the Government, people with whom I have been acquainted for some time, and I would say to them, "I would like to ask you this question my friend, having in mind that I shall never reveal your name: To what extent could your section or department be reduced and yet operate efficiently, just as efficiently as you are supposed to operate." I have had them repeatedly say, "I think frankly we could do with a 10percent reduction in personnel and operate still as efficiently as we are supposed to operate now." Now, they would not say that on the record, but when I asked them that question privately I have had numerous people in Government tell me that, and that leads me to think that you could do that too.

Mr. ROONEY. Mr. Stefan.

PROBLEM OF KEEPING MATERIALS AWAY FROM RUSSIA

Mr. STEFAN. Mr. Thorp, you indicated in your statement that you were concerned mostly with shortages, keeping up our stockpile of strategic material, and at the same time keeping certain materials away from Russia. How do you do that? What does your shop do in connection with that?

Mr. THORP. The problem of keeping materials away from Russia falls into two points, perhaps three, I should say.

The first point is exports to Russia, and in that connection, of course, as you know, the authority with respect to export licenses is in the hands of the Department of Commerce. The Department of Commerce operates with an Adivsory Committee to the Secretary of Commerce in which the Department of Defense, the Department of State, the Department of Interior and the various interested agencies are involved, so that we have participation with the Department of Commerce.

Now, the actual fact is that at the present time our exports to Russia from the United States for this last year were less than $1,000,000. The trade is virtually wiped out.

The exports to all the satellite countries, not counting Yugoslavia were, if I recall correctly, $25,000,000 which are virtually wiped out in terms of what has been true in the past.

Our problem has become essentially a problem of the ineffectiveness of United States action without action by other countries which are the sources of supply to the Soviet Union.

Now, Congress has provided some approaches to that, for example, in the ECA legislation where it has provided that no materials provided from ECA funds may be used in making products which that country in turn has shipped to the Soviet Union or its satellites. We have gone beyond that and have had many discussions in developing parallel controls on the part of European countries. So, that is a second operation and that specifically a State Department responsibility, those negotiations with the other countries.

Now, a third is one which is just now developing in which we have taken the initiative, and that is in connection with raw materials which are in short supply, that there shall be international commodity groups which shall meet with the main producers and the main consumers as members of that group, looking toward determining ways of increasing the production, of eliminating unnecessary uses, and of increasing the flow to the free world as against the flow to the Soviet Union. In those international commodity groups we hope that some countries which at the present time are not related to ECA, countries like Indonesia, or Chile, let us say, will also cooperate, and I propose to add a fourth point.

There is a meeting which has been called of foreign ministers of the Latin-American Republics, which is going to be held here beginning on March 26. We have been working with the Bureau for American Republic Affairs in developing the agenda of the American position in respect to that, and one of the things which we hope to discuss at that time, with this group of foreign ministers, is ways and means of reducing the flow of raw materials to the Soviet Union. This is quite a complicated business and almost covers the whole world in terms of trying to get cooperation from other countries.

Mr. STEFAN. Now you indicate that we have exported to Russia only $1,000,000 worth of material during this past year.

Mr. THORP. Less than $1,000,000 of all products, materials, and manufactured products.

Mr. STEFAN. What is the amount of the exports from Russia and her satellites to the United States?

Mr. THORP. The amount of Russian exports to us last year were about $40,000,000, and I think if you bring the satellites in, it probably runs up to double that amount.

Mr. STEFAN. About $80,000,000?

Mr. THORP. Yes, about $80,000,000. I can check those figures for you exactly, but I think that is about the figure.

Mr. STEFAN. They can get dollars for their exports to the United States with which to make purchases of potential war materials? Mr. THORP. Yes; they can get dollars; and, in considering how important that problem is, Russia, for instance, got something like $40,000,000 from her sales here.

In evaluating that, you have to remember that they are carrying on trade abroad with various other countries. Last year Russia and her satellites sent to Europe about $200,000,000 worth more than they bought from Europe. So that there is a big item of earnings obtained by them, and on top of that is the fact that Russia and her satellites are gold-producing countries, so that they are building up several hundred million dollars each year on gold production. I think you have to conclude that $40,000,000 is not particularly important in terms of the other sources which they have for getting foreign purchasing power.

SHIPMENT OF WAR POTENTIAL TO RUSSIAN SATELLITE

Mr. STEFAN. You have covered point No. 1, our imports from and our exports to satellite countries. What would you say about the consistent report that last year the so-called Marshall-plan countries shipped to Russian satellites over a billion dollars' worth of war potential?

Mr. THORP. Well, I think I would have to say in the first place that I do not think their authority amounted to too much

Mr. STEFAN (interposing). The Commerce figures indicated that, and they were placed in the Congressional Record.

Mr. THORP. A billion dollars last year?

Mr. STEFAN. Yes, in 12 months.

Mr. THORP. I was going to say it was nearer to $800,000,000. Perhaps it is not important.

Mr. STEFAN. This is in your point No. 2, to endeavor to make some arrangements to stop shipping our money and war potential to our potential enemies.

Mr. THORP. We might add to that that some of it is only by a far stretch of the imagination war potential. Some of it is machinery, but a lot of it is clothing and foods. Iceland, for instance, sells a good deal of fish oil, and you get a lot of Swiss products that are not really war products. Our effort has been to get them to restrict on things that were war potential, not merely defense items, but things specifically used for manufacturing defense items. The problem is very difficult because of the Western European countries who in turn get from the Soviet Union and the satellites a number of things which are essential to them, coarse grains and particularly coal. The Polish coal is one of the important sources of coal for Austria and Italy. What we have been trying to do is to work out a basis which will not cut off all trade. We should not be embargoing all of these countries and the Russian satellites because, after all, they are types of trade which are of great value to Western Europe; but we endeavor to get restrictions and embargoes on those items that are military potential, and I think in that part of the trade there has been a very substantial reduction.

MARSHALL-PLAN FUNDS

Mr. STEFAN. That being true, what would you say about these newspaper stories of ECA or Marshall-plan money being used to build factories that manufacture machinery which goes directly to Russia or to the Russian satellites?

Mr. THORP. I would say that is a very unfair way of summarizing what has happened. Of course, ECA money has gone to build factories but, to the extent to which those factories produce items required or stocked for war potential, I believe that there is very little if any of that, depending upon the country and the product, going to Russia and its satellites.

Mr. STEFAN. For your information, we have the fact that those stories are true; that they are using Marshall-plan money for the construction of factories which manufacture war potentials which are sent to Russia and her satellites, and which eventually got into the hands of the Chinese and the North Koreans.

Mr. THORP. I have no information that verifies that statement. Mr. STEFAN. You have not?

Mr. THORP. No.

Mr. STEFAN. All you have to say about that is that Marshall-plan money is being used to build such factories?

Mr. THORP. Yes; that Marshall-plan money is being used to build factories, and I would also want to say that these countries are restricting the flow of things that may be regarded as war potential to Russia.

Mr. STEFAN. You would not deny that some war potentials are going to Russia and Russian satellites from countries that are benefited by United States dollars through ECA?

Mr. THORP. No; I cannot deny that because of the fact that there are some situations-and we have been working very hard on them— where the controls are difficult. Just to make it very specific, there is the difficult situation in Western Germany. Western Germany is an area with a boundary line with Eastern Germany, which is an artificial boundary line. Western Germany has policies, governmental policies, with respect to limiting the items that can go into Eastern Germany or into satellite countries, and so forth; but I would not want to take the position that Western Germany has yet built up an effective way of stopping what virtually is smuggling of items across from Western Germany into Eastern Germany.

We have had discussions about that with the German Government, and they are trying to do what they can to meet the problem, and I am sure that they have done a great deal, but you are asking me if I can make a flat statement that it is being controlled. I have to explain to you, therefore, that there are those things which we do not know about, because it is smuggling of stuff that does not go through any of the normal channels there. It is a very difficult problem. It is like drawing a line somewhere across the United States and then trying to stop goods from flowing across that line.

Mr. STEFAN. What about the United Kingdom shipping war potentials to Russia?

Mr. THORP. I would have to know what the case was and then examine it, because certainly and generally any knowledge we have insofar as we are concerned is that they are not shipping. I think I should, perhaps, make this additional point: That we have been working on this with the European countries for virtually 3 years now. Mr. STEFAN. Your office has handled this business; has it not? Mr. THORP. Yes.

Mr. STEFAN. And there is no other staff in the Department of State that deals with Marshall-plan countries in connection with economic problems?