United States. Congress. House. Committee on Appro.

Foreign aid appropriation bill for 1949 : hearings before the subcommittee of the Committee on Appropriations, House of Representatives, Eightieth Congress, second session (Volume 2) online

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but 1 am not going into that.



17

Fiiiallv in tlieir last column thpv liavo statod tho doficit for tlie
April 1 year as $437,000,000.

Now, we have made for the fiscal year 1949 the nearest comparable
figures. That is, in the first column, taking the lino under "GARIOA,"
we have taken four-fifths of the EGA figure, because theirs was for
15 months and ours is only for 12 months; so it is twelve-fifteenths.
And on the dollar earnings we have similarly taken four-fifths, or the
adjusted 12 months' total. Then we have applied the amount foi- the
GARIOA contribution of $()75, 000, 000. On this basissuch computation
shows a deficit of $427,000,000 for which EGA would need the appro-
priation. That corresponds, as you will see, very closely with the
amount for which EGA is asking. You could not, of course, make a
precise comparison, because the EGA year is from April 1 to March
31, and the year we are talking about is from July 1 to June 30. But
they are substantially the same in principle.

That brings the application of the GARIOA funds into the EGA
program I think very clearly, both as to the detailed items which will
be supplied and the extent of the EGA program which will be met
from the GARIOA funds.

Now, every item which we have included in here which will be
provided for by the GARIOA funds is an item which EGA listed as
an import need for German industrial recovery — every single one.
There are one or two places in which we have included certain amounts
beyond their amounts in GARIOA, ])ut those are the exceptions and
they are minor. One thing is petroleum, where we felt a little more
was needed, and I think there may be a little in fertilizer. But
practically everything is within the EGA program in quantity and, as
I say, is within it as to description.

^ir. WiGGLESWORTH. You gave me some over-all figures previously
breaking down to $1,250,000,000 requested by GARIOA as between
the several countries with comparative figures for the previous year.

Mr. VooRHEES. Yes, sir.

Mr. WiGGLESWORTH. If I Understand vou correctly, we ought to
add to that $1,250,000,000 whatever EGA is goiiig to provide, as
distinct from GARIOA, and compare the total with what the several
countries received in the previous year, to get the picture.

Mr. VooRHEES. To determine it, you would have to make an addi-
tional adjustment.

Mr. WiGGLESWORTH. What is the over all?

ESTIMATE OF OVER-ALL ASSISTANCE TO GERMANY IN FISCAL YEAR 1949

Mr. VooRHEEs. I think 1 can give it to you roughly. For 1949,
taking the nearest $100,000, it is $706,000,000 for Gerniany.

The Ghairman. Do vou mean GARIOA or the other?

Mr. VooRHEEs. GARIOA.

Mr. WiGGLESWORTH. And how much does EGA add to that?

^^r. VooRHEES. $437,000,000.

Mr. WiGGLESWORTH. So it becomes $1,143,000,000 instead of
$706,000,000?

Mr. VooRHEES. Yes, sir. That is pumping in the industrial raw
materials for which there has been previously

Mr. WiGGLESWORTH. That compares with $578,000,000 which
Germany received in the previous year?



18

Mr. Draper. Yes. You have to adjust for the British contribution.

jMr. VooRHEEs. In fiscal year 1949 the British will supply only
about $70,000,000. The British in fiscal year 1948 supphed approx-
imately, roughly, $204,000,000 or $205,000,000. This wiU shrink to
$70,00*0,000 in 1949.

Mr. WiGGLESWORTH. Then, if you add the $70,000,000 of the
British, that means Germany is gomg to have $1,213,000,000 compared
to about $782,000,000 in 1948.

Mr. VooRHEES. Yes, sir. Of course, that is because of the EGA
plan to pump industrial materials into Germany and also utilize
Germany as a market for a great many other products of western
Europe for which otherwise EGA would simply have to give those
countries dollars in order to keep them gomg.

A rather interesting example is this $10,000,000 of Italian fruits and
vegetables going into Germany for which there is no other market.
These were previously used in Germany prior to the war and probably
during the war, but are a type of thing we would never have thought of
buying with the GARIOA appropriation.

Air. Draper. You will see the difference there is exactly $437,000,-
000 from EGA — the difference between the 1.2 billion dollars and the
780 million dollars.

ESTIMATE FOR OTHER OCCUPIED AREAS

Mr. WiGGLESWORTH. Gail you give me similar figures to supple-
ment that previous table you gave me, for Korea, Japan, the Ryukyus,
and Austria?

Mr. VooRHEES. If you take the total GARIOA amount estimated
for Germany for fiscal year 1949, including the British contribution,
and compare the same for 1948 vou will see that, thev are almost
exactly the same. That is, for fiscal year 1948 it was "$578,000,000
plus $204,000,000— roughly $782,000,000— and for the present year
it is $778,000,000.

The Chairman. It is $1,213,000,000?

Mr. Voorhees. I am speaking of GARIOA only. In this year
you must add for Germany, according to the EGA plan, $437,000,000
more.

Mr. Draper. That illustrates the point I made, that the difference
between the two is the EGA appropriation.

Mr. Voorhees. So the total for Germany under the EGA plan,
paper, is almost exactly $1,200,000,000.

^Ir. WiGGLESWORTH. And inasmuch as the British contribution is
dropped from $204,000,000 to $70,000,000, that reflects a correspond-
ing increase in GARIOA?

Mr. Voorhees. Yes, sir. For Japan you will see on the same
sheet I gave you in the column following the one for Germany, taking
the nearest $100,000 figure, that the GARIOA contribution was
$379,000,000 in 1948 and $424,000,000 this year.

Mr. WiGGLESWORTH. That is GARIOA alone?

Mr. Voorhees. That is GARIOA alone; yes, sir.

Mr. WiGGLESWORTH. And, of course, there is no EGA?

Mr. Voorhees. No, sir. For Korea, the corresponding figures are
$116,000,000 and $107,000,000.

Mr. WiGGLESWORTH. There is a small item also for Austria?



19

Mr. Draper. From 8.5 in 1948 to 10.0 in 1949.

Mr. VooRHEEs. That is a different kind of appropriation . The food
for Austria is inchidcd entirely in tlie EGA appropriation and not in
GARIOA. This request is for the cost of military government and
incidental items like that.

Mr. WiGGLESWORTH. Nevertheless, Austria is receiving 1.5 million
dollars more under GARIOA than she did in addition to what is made
available under EGA?

Mr. Draper. That is correct.

Mr. Voorhees. I think there is a change somewhere there. In that
sum Austria was changed to a pay-as-you-go policy under which we
paid for the internal expenses with dollars in order to aid the Austrian
economy ; where as before we had not done that. I think it is a book-
keeping change rather than an actual change in tlie aid fui-nished.

Mr. Keefe. Mr. Draper, I would like to try to understand this
situation initially, before we go into the details of all this business.

As I understand it, the Army is responsible and has a continuing
responsibility to maintain law and order in the occupied areas, to wit,
the American zone in Germany, in Austria, in Japan, in Korea, and
the Ryukyus?

Mr. Draper. Yes, sir.

\Jr. Keefe. Now, so far as that portion of the appropriation is
concerned that relates to Japan, the Ryukyus, and Korea, it is strictly
and directly an army-of-occupation item of expense?

Mr. Draper. As we see it, yes, sir.

Mr. Keefe. Insofar as it relates to the American zone or bizonal
Germany and Austria, it is related and integrated into the EGA
program?

Mr. Draper. In order that there be no duplication and that the
purpose of EGA, to provide those things needed to bring about
economic recovery would be supplied without supplying something
that we were already in a position to supply; yes, sir.

Mr. Keefe. I am trying to limit this, you understand.

relation of GARIOA TO EGA PROGRAM IN AUSTRIA

So far as Austria is concerned, the amount of the GARIOA appro-
priation that is requested is comparatively small and contemplates
only taking care of yoiu- rather small military establishment?

Mr. Draper. That is an approximately correct statement.

Mr. Keefe. And vet Austria is also included within tlie EGA pro-
gram for reconstruction and rehabilitation?

Mr. Draper. Yes, sir. The reason for that difference in approach
goes back to the fact that a year or a year and a half ago an arrange-
ment was made, when it was expected the Austrian peace treaty
would be made promptlj^, that in view of that contemplated action
the State Department woidd take over if the occupation forces with-
drew and their Ambassador and mission were made responsible — I
presume with the approval of this committee — I was not here at the
time — for the food supplies and other relief to be accorded to Austria.
And, while the Army continued to administer it, it became a State
Department function to program and order that food. It still was
the Army's function to actually handle it, because the State Depart-
ment turned over and has continued to turn over the actual procure-



20

ment and shipment to the Army. But, so far as the fiscal department
is concerned, that was in the hands of the State Department.

Unfortunately, the four-power treaty that was anticipated did not
eventuate, and I &m. sure if we had all realized that would happen,
or would not happen, we would not have made that change. Certainly,
speaking for myself, I think it would have been better if that had
not happened, just because you can program two big programs together
better than you can two separate programs. Last week they have been
meeting in London to tr}^ to reach an agreemcTit on the Austrian
treaty. I do not know whether it will be successful. I am afraid not.
But for that reason the Army did not have, for a year or a year and a
half, responsibility for asking you for funds. So, when EGA came
along, they picked up the State Department burden for that purpose.

ECA AND GARIOA PROGRAMS IN GERMANY

Mr. Keefe. Let us confine the picture to Germany. You still have
three zones of occupation?

Mr. Draper. Yes, sir.

Mr. Keefe. There never has been any integration of those three
zones as 3^et?

Mr. Draper. There has been of two of the zones.

Mr. Keefe. I said of the three zones.

Mr. Draper. Yes, sir.

Mr. Keefe. Do you have an integration or working arrangement or
contractual arrangement with the United Kingdom?

Mr. Draper. Yes, sir.

Mr. Keefe. But none with France?

Mr. Draper. That is correct.

Mr. Keefe. Under that arrangement with Great Britain, if you
left ECA out of the program entirely and just considered the appro-
priation for the Army that is here contemplated, we are called upon to
absorb a large portion of the expense that would otherwise be
attributed to Great Britain?

Mr. Draper. Yes, sir.

Mr. Keefe. But we are assuming that expense because she is
maintaining an army of occupation in her zone of occupation?

Mr. Draper. That is correct.

Mr. Keefe. And we have discussed all that situation in previous
hearings?

Mr. Draper. In great detail.

Mr. Keefe. Now, along comes ECA in this pictm*e. The Army
is in there with its civilian government or with whatever it is called?

Air. Draper. It is called a military government. It is largely
civilianized, but it is a military government.

Mr. Keefe. And are cooperating with Great Britain in the zone
of occupation assigned to the United Kingdom or Great Britain, and
the French are occupying their zone.

Mr. Draper. Yes, sir.

Mr. Keefe. Now, does this ECA program contemplate relief
and reconstruction to all three zones?

Mr. Draper. Someone from the State Department, perhaps,
should answer that. I can say I understand there is a certain amount
of assistance for the French zone contemplated in ECA, and I can say
further



21

Mr. Keefe. Well, if 3^011 are going to have reconstruction

Mr. Draper. You have to have it.

Mr. Keefe. And this is a reconstruction and rehabilitation pro-
gram, not merely a feeding program; so that the whole thing wouhl
have to be considered, necessarily, as one integral area. Is not that
true?

Air. Draper. That is correct. Discussions are going on in London
today between the French, British, and ourselves, looking toward a
further integration. I do not anticipate, from what I have heard,
that there will be an actual merger at this time, but we will have a
further integration of the economy of the French zone with the British
and American zones.

Mr. Keefe. I am thinking of the thing in terms of the inclusion of
those occupied areas of Germany which we have been referring to
within the ECA program. In the set-up of the EGA program, the
over-all picture is developed as to the reconstruction needs along with
the feeding needs and everything else of those areas. That is true,
is it not?

Mr. Draper. And the French zone has been taken into it now.

Mr. Keefe. So EGA, if you were not in the picture, would come
before this committee and say: "We need so much money to run this
show and to provide the necessary reconstruction in this entire area?"

Mr. Draper. That is right.

Mr. Keefe. In the over-all picture of what is needed, breaking it
down as to all the various categories that have been submitted to
this committee?

Mr. Draper. That is correct.

consideration of garioa program in computing estimates

FOR ECA

Mr. Keefe. Now, then, in the determination of how much money
EGA was to ask of this committee, they took into consideration the
responsibility of GARIOA?

Mr. Draper. Yes, sir; they deducted that.

Mr. Keefe. In connection with this program?

Mr. Draper. They deducted that before they made their request
to. you for what is needed.

Mr. Keefe. Then what has actually happened, as I understand it,
is you are continuing your program under the funds made available
to GARIOA in the zones of occupation which is apart of the over-all
necessities as originally found by ECA.

Mr. Draper. I believe you have stated it correctly.

Mr. Keefe. And EGA will make up the deficit tlu'ough this ap-
propriation for the necessary funds to complete the program of
reconstruction and feeding that is contemplated m the original over-all
set-up of EGA?

Mr. Draper. I believe you have a very clear picture of it; yes, sir.

TOTAL COST OF ECA PROGRAM

Mr. Keefe. So that people who may read this record — and if
anybody ever does, I shall be somewhat surprised — when it gets into
its final form; assuming anj^bodj^ did, and at least in order that I can



22

understand it as a member of this committee — and I have difficulty
as we go along in orienting mvself sometimes to all of these things —
we were then told that EGA was going to cost $5,222,000,000.

Mr. WiGGLESwoRTH. $5,300,000^,000'.

Mr. Keefe. Well, we got credit for some money that was advanced,
some $50,000,000, did we not?

Mr. NiTZE. The $5,222,000,000 was after deduction of administra-
tive and other expenses of $70,000,000.

Mr. Keefe. I have been told that is what it is going to cost, and
the people I represent have been told that EGA is now going into
Germany and they have included EGA in Germany by taking Ger-
many into the program. As a matter of fact, though, in plain English
that I can understand, it is going to cost a total of $5,300,000,000,
less the deduction, plus the amount that is herein appropriated for
GARIOA in German3^ Is not that true?

Mr. NiTZE. That is true, and that is thoroughly emphasized in all
of the hearings before the authorizmg committees.

Mr. Draper. The fact is it is about $6,000,000,000, including this
and including Germany and the other 16 countries. I believe that
has been made clear. Certainly that is the way the Army has pre-
sented it.

Mr. Keefe. I want to get it clear.

Mr. NiTZE. It was made clear in the original proposal of the execu-
tive branch to Gongress, made clear in the hearings before the Senate,
and made clear to the House Foreign Affairs Gonnnittee, and I think
it is included in the reports of both of the committees.

Mr. Keefe. I think they made recommendations.

Mr. Draper. I thinlv it should be made very clear, because the
country shoidd understand fully what the plan is. As I understand
it, the 5.3 billion dollars is the request the executive departments of
the Government have made for EGA in addition to the amounts con-
templated for GARIOA administered by the Army, approximating
$7,000,000 for bizonal Germany, or a total over-all for the 16 par-
ticipating countries and western Germany of approximately
$6,000,000,000.

Mr. Keefe. Is that for the 15 months' period?

Mr. Draper. That is for the 12 months' period. I would like Mr.
Nitze's confirmation for the record, if that is approximately correct.

Mr. NiT^E. That is correct.

Mr. VooRHEES. The only qualification of that is that the Army
figure is for the 12 months' period beginning July 1, whereas the EGA
year is for the 12 months' peiiod beginning April 1.

Mr. Keefe. Then what we are concerned with here in this present
estimate is, for fiscal year 1949, the amount that GARIOA needs to
carry out the commitments cooperatively with EGA and, tlu'ough the
supplemental of EGA materials that go in there, to maintain the feed-
ing, reconstruction, and development of the German people and their
industries?

Mr. Draper. That is correct.

SUPPLY of calories TO GERMANY

Mr. Keefe. Well, I read in the record this morning that the Senator
from Nebraska had offered yesterday in the Senate a proposal that



23

we guarantee to the civilian population of Germany a minimum intake
requirement of at least 2,000 calories.

Air. Stefan. You are referring to our junior Senator, \lr. Wherry?
Mr. Keefe. Yes.

Mr. Draper. Maybe Mr. Voorhees could comment on that with
respect to what is contemplated in this program. Certainly, there
has been no guaranty..

Mr. Voorhees. If you will turn to page 1154 in the justifications,
there is a very brief summary of the proposed caloric feeding. The
GARI04 imports are estimated to provide 1,050 calories; the supple-
mental funds that EGA has asked for will provide 121 calar^es; the
indigenous production is estimated to provide 1,050 calories, makmg
a total 0x1 an average basis of 2,221 calories.

Now, the spread between the average consumer — this is the
average consumer — and the normal consumer, the normal consumer
being a rather euphonistic impression of the fellow who is at the end
of the line and gets nothing supplemental at all — about 30 percent of
the rationed population do not get any extras — the normal consumer,
on that basis, would get 1,921 calories.

Mr. Stefan. Does that include the voluntary food packages going
in there that supplement this?

Mr. Voorhees. No, sir; that does not include it.
Mr. Keefe. That is just the available calories as a result of these
two programs?

Mr. Voorhees. Yes, sir.

Mr. Draper. Plus the production in Germany.
Mr. Keefe. Plus the indigenous production?
Mr. Draper. Yes.

Mr. Keefe. And, if that goes up, the rations will be supplemented?
Mr. Draper. Yes.

Mr. Voorhees. I think it should be said that this only includes the
rationed population and does not include farmers, who live consider-
ably better.

\h\ Keefe. I understand. Those are self -suppliers.
Mr. Voorhees. Yes. I also want to make clear that there is, of
com-se, a certain amount of food that is off rationing. They have
their own vegetable gardens and this and that. It has been known
that there have been some foods sold on the black market; so they
got some additional food from this source. Mr. Stanley Andrews,
in charge of food over there, has just flown in from Frankfm-t. He
got in last night, and will give you the thing in more detail, Mr. Keefe.
Mr. Keefe. I raised the question only because in reading the Record
this morning I ran across that resolution, and it would seem as though
the projected program would attain the minimum set up in the pro-
posed resolution, assuming it should by any chance become the action
of the Congress.

Mr. Voorhees. We will have, at an early date, a very authoi-itative
report on what the nutritional requirements are. We are sending
over a mission this week of the leading experts in the United States
on nutrition. This mission is headed by the new Surgeon General
of the Public Health Service and will bring back an absolutely autho-
rita.tive report of what is needed nutritionally to supplement their
indigeneous production.



24

Up to date and subject to whatever the Commission may report
and from the knowledge gained by accompanying the Hoover mission
as a member and after having discussed the matter with Air. Hoover
and other experts, the estimate of the need is a minimum of 2,000
calories for the normal consumer.

And then the need is a further spread between the normal consumer
and the average consumer. That is to care for those people who are
going to work hard because they have to have a lot more calories.
For example, a coal miner has got to have 4,000 calories, and similarly
heavy workers have got to have a greater number than the average
of 2,000 calories, otherwise they cannot produce results.

FOOD PRODUCTION AND DISTRIBUTION IN GERMANY

The Chairman. You are showing a little better than a 50 percent
increase in dollar supply. I had assumed, from what I have heard,
that the crop estimates would indicate at least a 50-percent increase
in indigenous production. The normal ration last year was somewhere
around 1,400, as I remember it, and I had rather assumed that the
increase would be more than a 50-percent increase in the ration.

Mr. Draper. Could I ask Colonel Andrews, who just came in, to
comment on that point?

The Chairman. Yes. I am just giving a conclusion that I have
drawn, although I have nothing to base it on; I am just trying to
find out what the facts are.

INCREASE IN PRODUCTION OF INDIGENOUS CROPS IN GERMANY

Mr. Draper. I would like to ask Colonel Andrews to consider the
question for you and give his best judgment, first as to the comparison
of last year's indigenous crop with the next. I have not had an
opportunity to discuss the matter with him. He just came in, and
has not been prompted by me in any respect. First I would like to
have him give you a comparison of last year's crop with the coming
one, and second, to comment on the ration situation and the food
situation as it affects the population today, and also what is his judg-
ment as to the results if this program can be successfully carried out.

Colonel Andrews. May I say that the estimated increase in the
production available for the ration this next year, Mr. Chairman^ is
about 31 percent over that of the current fiscal year from indigenous
foods.

The crop this year is undeniably better than last year. The infor-
mation is in the record here, and the figures being presented would
show about a 31 percent over last year available for the ration. In
other words, we will have that much more stuff that can go into the
ration than we have had in this past year.

It is always a little bit higher than what the Germans themselves
predict, but we estimate that we w^ill be able to collect from produc-
tion for ration 1,050 calories; the Germans feel that 1,012 is all that
we can expect, but it is getting down to a pretty fine point on what
they believe they can do.

I might as well be perfectly frank and say whether we get the 1,050
or the 1,012, or 900 for the ration depends a whole lot on the amount
of stuff we ship in, because if you have a thin situation the pressure



25

is on the population to go out and grab all the food they can for them-
selves.

And I am almost willing to say that if you are able to get an import,
say, of 1,100 the chances are very good that we will get 1,050, or per-
haps a little better, out of the farm economy to go on the ration.

And, this sounds a little bad, but we might as well belly up to the
bar and say so, that if we import, say, 900 the facts are very good that
we will never collect over 700 or 800, for the simple reason that when
you have population on a starvation base ration they are going out
just like you or anybody would and scrounge aroimd for food, in the
black market or every other place imaginable to get what they want.

I can give you a case in point to illustrate what T have in mind:
When T was here the last time you gentlemen heard the report on
sugar that has been bought for shipment to Germany. Now sugar
was almost unobtainable from any source and was only made avail-
able to children under 6 years of age; they were the only ones who got
the sugar.

When the sugar-beet harvest was ready last year, without any cut
in the volume, the people went out and traded what they could for
beets; they went out to the sugar-beet fields, carried a sack on their



Online LibraryUnited States. Congress. House. Committee on ApproForeign aid appropriation bill for 1949 : hearings before the subcommittee of the Committee on Appropriations, House of Representatives, Eightieth Congress, second session (Volume 2) → online text (page 3 of 79)