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Full text of "Department of State bulletin"

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General Policy Page 

United States Policy Toward Asia. By Secre- 
tary Acheson 467 

Tensions Between the United States and the 

Soviet Union. By Secretary Acheson . 473 

U.S. International Air Policies — Annual Re- 
port to the President by the Air Co- 
ordinating Committee, 1949 488 

The Department 

Results of Senator McCarthy's Loyalty 
Charges Harmful to Conduct of Foreign 
Relations — 
Answers to Senator McCarthy: 

Statements by Deputy Under Secretary 

Peurifoy 479 

Statements on Haldore Hanson and 

Esther C. Brunauer 480 

Statement by Esther C. Brunauer . . . 481 
John S. Service Recalled To Answer 

Charges. Statement by Deputy Under 

Secretary Peurifoy 479 

United Nations and Specialized Agencies 

Mrs. Franklin D. Roosevelt Kamed Chair- 
man of Citizens' Committee for U.N. 
Day 481 

Poland Withdraws From International Fund 

and Bank 497 

The United States in the United Nations . . 501 

Occupation Matters 

Control of Government in the Soviet Zone . 482 



Occupation Matters — Continued Page 
Rare Mainz Psalter of 1457, Looted, Re- 
turned to U.S. Zone in Germany . . . 487 
English-Language Newspaper for Schools . . 496 

National Security 

Weapons of Peace for Mutual Defense. By 

James Bruce 498 

Treaty Information 

Tuna Convention With Costa Rica Enters 

Into Force 496 

U.S. Will Not Apply New Press Rates in 

Revised Telegraph Regulations .... 497 

International Organizations and Conferences 

U.S. Delegations: 

International Tin Study Group 500 

Executive Committee and General Council 

(Iro) 500 

The Foreign Service 

Matters Considered by Regional Conference 

of U.S. Envoys in Bangkok 502 

Consular Offices 502 

Second Meeting of American Ambassadors 

in Europe 502 

Confirmations 502 

Publications 

Recent Releases 472 

"Postwar Foreign Policy Preparation, 1939- 
45" Released by the Department of 

State 503 

Corrections 487 



U 3 GOVERNyENT PRINTING OFFICEt ISSO 



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[BASSADOR JESSUP ANSWERS SENATOR 
MCCARTHY'S CHARGES OF "UNUSUAL AFFIN- 
ITY FOR COMMUNIST CAUSES" 316 

<iTER.AMERlt:Ai\ RELATIONS IN PERSPECTIVE • 

Wv i-...U.„l S,..r,./,.rx M.U.T 521 

JIVERSAL, REGIONAL, AND BILATERAL PAT- 
TERNS OF INTERNATIONAL ORGANIZATION • 
By Deputy Under Secretary Ruxk 526 

IGH FREQUENCY BROADCASTING: ANOTHER 
ATTEMPT AT WORLD AGREEMENT • Br .W«r,> 
Louise Smith '>'S3 

THE INTERNATIONAL TRADE AND TRAFFIC IN 

Unm- I»\|{'1 ni • f' f. I II I'nrneroy . ... 507 



For complete contents see back cover 



Vol, XXII, No. 561 
April 3, 1950 



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^.%,..w^^. bulletin 



Vol. XXII, No. 561 • Pubucation 3808 
April 3, 1950 



For sale by the Superintendent of Documents 

U.S. Government Printing Office 

Washington 25, D.C. 

Prick: 

62 issues, domestic $6, foreign $8.60 

Single copy, 20 cents 

The printing of this publication has 

been approved by the Director of the 

Bureau of the Budget (February 18, 1949). 

Note: Contents of this pubUcation are not 
copyrighted and items contained herein may 
be reprinted. Citation of the Departuent 
or State Bulletin as the source will bo 
appreciated. 



The Department of State BULLETIN, 
a weekly publication compiled and 
edited in the Division of Publications, 
Office of Public Affairs, provides the 
public and interested agencies of 
the Government with information on 
developments in the field of foreign 
relations and on the work of the De- 
partment of State and the Foreign 
Service. The BULLETIN includes 
press releases on foreign policy issued 
by the White House and the Depart- 
ment, and statements and addresses 
made by the President and by the 
Secretary of State and other officers 
of the Department, as well as special 
articles on various phases of inter- 
national affairs and the functions of 
the Department. Information is in- 
cluded concerning treaties and in- 
ternational agreements to which the 
United States is or may become a 
party and treaties of general inter- 
national interest. 

Publications of the Department, as 
well as legislative material in the field 
of international relations, are listed 
currently. 



«. S. SUPERINTENDENT Of BOCUUiHU 

APR 21 1950 

THE INTERNATIONAL TRADE AND TRAFFIC IN ARMS 

Its Supervision and Control — III 

hy Leonard H. Pomeroy 



This is the third and ftruil installment of a senes 
of three articles being published in the Depart- 
ment of State Bulletin on this subject. The 
first two articles published in the Bulletin of 
February 6 and March 6, 1950, discussed the me- 
chanics and effectiveness of current adryiinistr-ative 
action, together with certain special problems con- 
nected icith existing control measures. The his- 
torical setting both with respect to the concern of 
the United States Government with regard to the 
manufacture of arms and current United States 
arms export policy is the subject of the present 
article. 

The United States does not regard the interna- 
tional traffic in arms as an incidental part of inter- 
national commerce. This view has prevailed be- 
cause arms have a potential military use and may 
be diverted to bring about conditions of political 
instability. As a part of this concept, the United 
States recognizes that the activities of the arms 
maker as well as those of the intermediate arms 
trader have direct and important implications for 
the continued peaceful relations between nations. 

National laws of different countries provide for 
varying degrees of control over arms production. 
In France, for instance, the arms industry has 
been partially nationalized. In Great Britain, 
firearms and munitions manufacturers must regis- 
ter with the police and are under the close sur- 
veillance and regulation of the Government. In 
the United States, every manufacturer of arms, 
ammunition, and implements of war is legally ob- 
ligated to register with the Secretary of State. 
In so doing, he is required to furnish full informa- 



tion concerning his business organization and his 
foreign and domestic affiliates. He is further re- 
quired to maintain at all times appropriate rec- 
ords of munitions transactions. 

Supervision and control over the trade and 
traffic in arms extends to and directly affects the 
activities of the producer as well as the trader in 
arms. From a historical point of view as well as 
that of current arms-export policy, it is desirable 
to deal first with the problem of effective control 
over the international movement of munitions and 
implements of war because of its relation to the 
production of those articles. 

The United States arms maker has a heavy 
moral responsibility with respect to transactions 
into which he enters to exercise utmost vigilance 
to avoid negotiations which could result in em- 
barrassment to this Government. American arms 
firms of established reputations have come to rec- 
ognize that their own welfare is best served by con- 
sistent adherence to the objectives of the United 
States Government in the fields of foreign policy 
and national defense and to high standards of busi- 
ness ethics. These firms, furthermore, frequently 
find that it is to their advantage to cooperate with 
the Government in order to frustrate threatened 
illegal exports of arms and to furnish the Govern- 
ment with information concerning suspected 
transactions and persons. 

Thus, American private arms producers are or- 
dinarily quite willing to cooperate with the Gov- 
ernment in solving the many problems connected 
with destination control. Such cooperation by 
private firms is helpful in alerting the United 



April 3, 1950 



507 



States Government to possible unlawful ship- 
ments prior to exportation as well as after exporta- 
tion to destinations other than those authorized. 



BACKGROUND OF EARLY DEMAND 

FOR REGULATION OF THE MANUFACTURE 

AND TRADE IN ARMS 

United States legislation, as well as the laws of 
other countries, making arms producers subject 
to government supervision and control, came as a 
result of public indignation over alleged exposures 
of war-provoking activities of international 
armament firms prior to World War I. 

These exposures began with charges made by 
Karl Liebknect before the Reichstag in the spring 
of 1913 against the intrigues of German arma- 
ment firms.' Subsequently, many books and arti- 
cles were written concerning the activities of arms 
producers; the writers presenting voluminous 
factual data in an effort to show that armament 
firms had developed vast international organiza- 
tions, a great number of subsidiaries, and inter- 
locking directorates in many different countries, 
enabling them to dictate prices and stir up war 
sentiment. 

Arms firms were specifically charged with en- 
gaging in the following types of activities : = 

(1) Fomenting war scares and attempting to 
persuade various governments to adopt war poli- 
cies and to increase their armaments; 

(2) attempting to influence public opinion 
through control of the press in their own and for- 
eign countries; 

(3) dissemination of propaganda against in- 
ternational agencies for peace and interference in 
attempts of international conferences to limit 
armaments ; 

(4) dissemination of false reports concerning 
military preparations in various countries; 

(5) recruiting former high officers of defense 
establishiiieiit.s, public officials, and other govern- 
ment employees in order to influence government 
decisions in awarding contracts; 

(G) bribery of government officials. 

' George Seldes, Iron, Blood and Profits, p. !j5. 

' The following books were published about this period : 
J. T. Walton Newbold, How Europe Armed for War (1811- 
191J,), London 1910; 7'Ae War Trust Exposed, London 
191G; George H. Perris, The War Traders, London, 1914; 
Union of Democratic Control, The International Industry 
of War, London 1915. 



Writing in 1919, Lord Wester Wemyss, First 
Sea Lord of the British Admiralty during World 
War I, made the following summarization : 

Every firm engaged in the production of armaments and 
munitions of any kind naturally wants the largest pos- 
sible output. Not only therefore has it a direct interest 
in the inflation of the Navy and Army estimates and in 
war scares, but it is equally to its interest to push its 
foreign business. For the more armaments are increased 
abroad, the more they must be increased at home. The 
interrelation between foreign and home trade In arma- 
ments is one of the most subtle and dangerous features 
of the present system of private production. The evil is 
intensitied by the existence of international armament 
rings, the members of which notoriously play into each 
others' hands. So long as this subterranean conspiracy 
against peace is allowed to continue, the possibility of 
any serious concerted reduction of armaments will be 
remote.' 

Lord Wemyss wrote in the light of his wartime 
experience and 50 years of unparalleled growth 
and amalgamations of armament concerns prior 
to World War I. The immediate result of this un- 
favorable publicity given arms makers was the 
inclusion in the Covenant of the League of Na- 
tions of certain provisions for dealing with the 
weaknesses of the existing system. 

League of Nations Efforts 
To Regulate the Arms Trade 

The Covenant of the League of Nations made it 
encumbent on that organization to take certain 
steps with respect to the arms trade. Article 8, 
section 5 of the Covenant, provided that — 

The members of the League agree that the manufacture 
by private enterprise of munitions and implements of war 
is open to grave objections. The Council shall advise how 
the evil effects attendant upon such manufacture can be 
prevented, due regard being had to the necessities of those 
members of the League which are not able to manufacture 
the munitions and implements necessary for their safety. 

Under article 23, paragraph (d) of the Cove- 
nant, the League of Nations was entrusted — 

with the general supervision of the trade in arms and 
ammunition with the countries in which the control of 
this traffic is necessary in the common interest. 

The St. Germain Convention of 1919 was the 
first post World War I endeavor of the powers in 
this field. Although never becoming effective, 
this convention marks an important milestone in 
the history of the development of the supervision 
and control over the arms trade since it formulated 



"Memorandum on The Production of Armaments, pre- 
sented to the Admiralty in 1919 and cited by Philip Noel- 
Baker, The Private Manufacture of Armaments. 



508 



Deparfmenf of Slate Bulletin 



a comprehensive list of arms of war * ami set a 
pattern of arms-export controls which served as a 
prototype for subsequent enileavoi"S. The refusal 
of the United States to ratify the convention was 
due primarily to its opposition to the provisions 
envisagring international supervision through the 
League of Nations and calling for reports on arms 
exports to signatory States. 

In 1921, the League of Nations assigned the 
problem of devising a system of supervision and 
control over private manufacture of arms and 
arms traffic to the Temporary Mixed Commission. 
In 192-i, the efforts of the Commission resulted 
in a majorit}' and a minority report with respect to 
the manufacture of arms. The majority main- 
tained that "the private manufacture of arms 
must be regarded as a purely national matter, the 
regulation and inspection of which should be left 
to the national authorities" and held that "the 
control of private manufacture should be exclu- 
sively national though based on principles common 
to all countries." The minority opinion recom- 
mended international measures of control.^ 

The Geneva Convention of 1925 was much more 
specific than the Convention of St. Germain in 
defining the subject matter of the arms trade." 
The two provisions which had been the chief ob- 
stacles to obtaining the United States' ratification 
of the St. Germain Convention were omitted from 
this Convention. It was finally ratified by the 
United States in 1934 but did not go into effect 



* In the St. Germain Convention of 1919, the prohibition 
of export without license applied to the following arms of 
war : artillery of all kinds : apparatus for the discharge of 
all kinds of projectiles, explosives or gas diffusing ; flame 
throwers, bombs, grenades, machine guns, and rifled small- 
bore breech-loading weaiions of all kinds, as well as 
ammunition for use with such arms. Separate provision 
was made for firearms and ammunition adapted both to 
warlike and also to other purposes. 

•League doc. A. 16.1921 IX, cited in M. O. Hudson, 
Munitions Industry Report to Congress, 1935, p. 27. 

'The Geneva Convention established five categories of 
arms, ammunition, and implements of war, as follows : 
(1) Arms, ammunition, and implements exclusively de- 
signed for warfare, comprised in the armament of any 
State's armed forces, or capable of only military use with 
the exception of arms, ammunition or implements in- 
cluded In other categories (Twelve subcategories were 
listed) ; (2) arms and ammunition capable of use for 
both military and other purposes (Four subcategories 
were listed) ; (3) vessels of war and their armaments; 
(4) aircraft and their engines; (5) gunpowder and ex- 
plosives. 



because of the failure of several other states to 
take similar action. 



U.S. POLICY FOLLOWING WORLD WAR I 

Arms Traffic Related to Disarmament 

In the period between the First World War and 
the Second, the United States took certain steps 
designed to promote international peace and pub- 
lic order which, though similar in objective, were 
separate from actions taken by the League of 
Nations. Prior to 19.34, the United States re- 
garded international control over the traffic in 
arms as directly related to the broader problem of 
disarmament, and action on this topic was made 
to depend on a general disarmament agreement 
being reached. Although responsive to the strong 
isolationist sentiment of the American public, the 
United States did take the initiative in seeking 
the promotion of peace through disarmament. 
Thus, the United States sponsored the Washington 
Disarmament Conference of 1921 and joined in 
drawing up the Washington Naval Treaty placing 
limitations on certain types of naval armaments. 
It is to be noted that the Disarmament Conference 
in London, which drew up the London Naval 
Treaty of 1930, revealed the unwillingness on the 
part of some of the major powers to cooperate in 
reducing armaments. 

Impact of Local Conflicts on U.S. Policy 

The occurrence of regional wars, having direct 
implications for United States interests abroad on 
the one hand, and the strong isolationist or so- 
called neutrality sentiment in this country on the 
other produced a situation requiring recognition 
of the problems by the United States. 

Since 1905, the United States had applied re- 
strictions on shipments of war materials to certain 
Latin American countries with a view to curtailing 
civil strife and promoting political stability in the 
Western Hemisphere. In 1919, this policy, which 
obtained its legal sanction from the joint resolu- 
tions by Congress of April 22, 1898, and March 13, 
1912, was extended to China. The joint resolu- 
tion of January 31, 1922, repealing the earlier laws 
restated the provisions of the 1912 resolution and 
extended them to apply to countries, such as China, 



April 3, 1950 



509 



in -which the United States then exercised extra- 
territorial jurisdiction. 

In 1928, the United States and other American 
Republics, who joined in signing and ratifying 
the Pan American Convention ' on the Duties and 
Eights of States in the Event of Civil Strife, 
agreed to observe the following rule : 

To forbid the traffic in arms and war material, except 
when Intended for the Government, while the belligerency 
of the rebels has not been recognized, in which latter case 
the rules of neutrality shall be applied, and to prevent 
that within their jurisdiction there will be equipped, 
armed, or adapted for warlike purposes any vessel in- 
tended to operate in favor of the rebellion. 

The Gran Chaco war between Bolivia and Para- 
guay, which had been in progress since 1928, began 
to receive the attention of the international com- 
munity in 1930. In 1932, when repeated efforts 
by the United States in cooiDeration with other 
American Republics and the League of Nations 
had failed to induce the two govenmients to settle 
their differences peacefully, a number of govern- 
ments * agreed to take steps to stop the flow of arms 
to both countries. The joint resolution of May 28, 
1934, was adopted to authorize the imjjosition of 
an embargo on the sale of arms to the belligerents 
in this war. The action of the United States dif- 
fered from that of the League of Nations in that 
the League subsequently lifted the arms embargo 
against Bolivia, retaining it only against Para- 
guay, whereas the United States continued to 
prohibit the sale of arms to both belligerents 
throughout the period of hostilities.* Since 
neither Bolivia nor Paraguay was an arms-pro- 
ducing coimtry, the curtailment of foreign arms 
consignments directly affected the ability of both 
sides to continue the war. 

In the Far East, following the Japanese invasion 
of Manchuria in September 1931, China, on Sep- 
tember 21, appealed to the United States to pre- 
serve the peace in the Far East. Secretary of 



' Signed at Habana, Cuba, on Feb. 20, 1928. 

"On September 1, 1934, the following countries had 
taken effective steps in support of the embargo : The 
United States, Argentina, Australia, Austria, Belgium, 
Brazil, Canada, China, Czechoslovakia, Denmark, France, 
Great Britain, Guatemala, Irish Free State, Italy, Latvia, 
Lithuania, Luxemburg, Mexico, Netherlands, Panama, Po- 
land, Portugal, Spain, Sweden, Switzerland, U. S. S. K., 
and Yugoslavia. 

• The action of the League had been challenged by Bo- 
livia on the ground that its Covenant provided for sanc- 
tions only after naming the aggressor. When Paraguay re- 



State Stimson notified Japan that the invasion of 
Manchuria was of concern to the entire world and 
that it involved the 9-power treaty which the 
United States and Japan had signed in 1922 and 
the Kellogg-Briand Pact of 1926.^° The question 
of the use of an embargo against the aggressor or 
against both belligerents in the Far East war was 
considered by the Department of State in connec- 
tion with proposed legislation in May 1933. Sec- 
retary of State Hull took the position that an 
embargo on arms and ammunition would not be an 
effective means of restoring peace since Japan was 
an important producer of arms and munitions of 
war.^^ 

Arms Traffic Legislation 

As a result of the inability of the major powers 
to agree to negotiate a comprehensive disarma- 
ment pact which would include provisions for 
the regulation of the international trade and traf- 
fic in arms as well as the supervision of the manu- 
facture of arms, the Government of the United 
States began to consider the drafting of compre- 
hensive legislative measures for regulating the 
traffic in arms as a separate problem. 

Several other developments also served to clear 
the way for such legislation. A new wave of arti- 
cles and books exposing the activities of the arms 
makers in trading with belligerent governments 
and in fomenting war scares was published be- 



fused to submit the matters at issue to arbitration as 
proposed by the League, the League recommended an em- 
bargo solely against Paraguay, a recommendation which 
was followed by the members of the League but not by 
the United States. The legality of the embargo imposed 
by the United States was also challenged by Bolivia on 
the ground that it violated the treaty of May 13, 1S58, 
between Bolivia and the United States. Article 6 of that 
treaty contained a standard clause incorporated in treaties 
of that period that no prohibition on the export of articles 
produced or manufactured in the United States shall be 
applied to Bolivia "which shall not equally extend to 
other nations." The American Secretary of State, Cordell 
C. Hull, asserted that since the embargo applied only to 
sales and not to exports, no violation was involved. 

" S. Doc. 55, 72d Cong., 1st scss., pp. .3-5. Note of the 
Chinese Government to the American Government, Septem- 
ber 21, 19.31. Note of the American Secretary of State, 
Henry L. Stimson, to the .Japanese Ambassador, Katsiyii 
Debuchi, September 22, 1931. 

" Memorandum by the Secretary of State, Cordell C. 
Hull, to the Committee on Foreign Relations of the United 
States Senate, May 17, 1933, Peace and ^yar, V. S. Foreign 
Policy 1931-1943. p. 183. 



510 



Department of State Bulletin 



tween 1933 and 1936." Tlie special Senate Com- 
mittee investig;ating tlie iminitions industry dram- 
atized the activities of the munitions makers in 
carrying on trade witli the belligerents. This 
Committee had been appointed to investigate re- 
ported sales of numitions by American manufac- 
turei"s to foreign governments. The Conunittee, 
functioning under the chairmanship of Gerald P. 
Nye, Republican Senator from North Dakota, did 
not stop there, however, but enlarged the scope 
of its inquiry into an attempt to prove that the 
United States had been drawn into World War I 
by American bankers and munitions makers. In 
so doing, it completely ignored such basic reasons 
for our entry into that vrar as the sinking of 
American ships with consequent loss of American 
lives; and the threats posed by a victorious Ger- 
many to the United States, the rule of law, and 
the American way of life. 

The work of this Conmiittee resulted in deepen- 
ing the isolationist sentiment throughout the na- 
tion and in spurring legislation to deprive the 
executive branch of the Government of all discre- 
tion in dealing with warring nations. 

Notwithstanding the known difficulties in ob- 
taining adequate legislation at this time, the 
Administration pushed vigorously for legislation 
to prevent the shipment of arms to aggressor na- 
tions. There was urgent need for such legislation 
for two reasons. First, to enable the Government 
to implement the Geneva Arms Traffic Convention 
which was ratified by the United States in 1934, 
assuming that it would be put in effect. Secondly, 
to support the action taken by the United States 
representative, Norman Davis, at the Geneva Dis- 
armament Convention of 1933. Mr. Davis had 
stated that the United States would refrain from 
any action tending to defeat a collective effort of 
the nations of the world against a nation guilty of 
a breach of the peace in violation of its interna- 
tional obligations, provided that all nations, in 
conference, determined that such nation was guilty 
and this country concurred in their judgment." 

The impetus toward the enactment of national 
measures to regulate the trade and traffic in arms 



"^ The following were among the books and publications 
appearing on this subject : Engelbrect and Hiinighen, Mer- 
chants of Death, New York, 1934; Fenner Brockway, The 
Bloody Traffic, London, 1933 ; George ScUles, Iron, Blood 
and Profits, New York, 19.'54 ; Philip Noel-Baker, The Pri- 
vate Manufacture of Armaments, London, 1936. 

"Cordell Hull, Memoirs, p. 728. 



was further accelerated by the occurrence at this 
time of several regional conflicts. 

In addition to the Sino-Japanese war over Man- 
churia and the Gran Chaco war, the impending 
Italo-Ethiopian war promised to result in com- 
plicated questions of the rights and security of 
United States citizens and their property. 

The First Neutrality Act 

Because of the real need for legislative authority 
to prohibit arms shipments and because of the 
strong isolationist trend, the administration was 
obliged to accept the first neutrality act, the joint 
resolution approved August 31, 1935, with its in- 
flexible provisions requiring the establishment of 
an arms embargo against all belligerents upon the 
outbreak of war without discrimination as between 
aggressor nations and their victims. The First 
Neutrality Act however had the virtue of provid- 
ing a legal beginning for a national system of 
regulating the traffic in arms. It was, further- 
more, recognized that any embargo in the forth- 
coming Italo-Ethiopian war would affect Italy, 
the aggi-essor, much more adversely than Ethiopia 
in as much as Ethiopia had no ships to carry arms 
and no money with which to purchase arms and 
munitions. 

Since the 1935 Act was in the nature of stopgap 
legislation which would expire after 6 months, 
reliance was placed on the possibility that more 
elastic provisions might be included in the more 
permanent legislation scheduled for February 
1936. Secretary of State Hull in a radio address 
of November 6, 1935, pointed out that there were 
many difficulties inherent in any effort to lay down 
by legislative enactment inelastic rules or regula- 
tions to be applied to every situation that may 
arise. He said, "Our foreign policy would indeed 
be a weak one if it began or ended with the an- 
nouncement of a neutral position on the outbreak 
of a foreign war. I conceive it to be our duty and 
in the interest of our country and of humanity, not 
only to remain aloof from disputes and conflicts 
with which we have no direct concern, but also to 
use our influence in any appropriate way to bring 
about the peaceful settlement of international 
differences." " 

The Second Neutrality Act 

The joint resolution of February 29, 1936, con- 
tinued the same inflexible provisions of the first 

" Press releases of Nov. 9, 1935, p. 369. 



April 3, 1950 



511 



neutrality act with the single exception that it 
permitted the President to determine the existence 
of a state of war. Because of this change, the 
neutrality act was not applied to the undeclared 
Sino-Japanese war. It was apparent that such 
an embargo would not be effective in restoring 
peace and would affect China more adversely than 
Japan, because Japan could supply her needs out 
of her own industries whereas China was depend- 
ent upon imports. 

Constitutional Doubts Removed 

On December 21, 1936, the Supreme Court in the 
case of the United States vs. Curtis Wright Ex- 
port Corporation et al. sustained the validity of 
the joint resolution of May 28, 1934, otherwise 
known as the "Chaco Embargo Act," and in so 
doing pointed out that the doctrine of enumerated 
and implied powers did not constitute any limita- 
tion in the field of international relations where 
the powers of the President, as the spokesman for 
the nation, were implicit. "Moreover," said the 
Court, "he, not Congress, has the better opportu- 
nity of knowing the conditions which prevail in 
foreign countries, and especially is this true in 
time of war." " 

Embargo on Arms for Spain 

The First Neutrality Act had contained an em- 
bargo section on the exports of arms, ammunition, 
and implements of war designed for the Italo- 
Ethiopean conflict. Its repeal on June 20, 1936, 
left this country without any legal basis for action 
to embargo arms shipments to Spain on the out- 
break of the Spanish Civil War in July of 1936. 
The assistance afforded the opposing sides by other 
European powers threatened to broaden the con- 
flict into a general European war. This develop- 
ment resulted in a strong sentiment in the United 
States favoring the curtailment of arms to Spain. 

Although the Second Neutrality Act was due 
to be replaced by new neutrality legislation, the 
urgency created by the Spanish Civil War called 
for special emergency legislation; such legisla- 
tion was enacted on January 8, 1937. The De- 
partment of State, at that time, had one of its 
early experiences with concerted action by arms 
traffickers to circumvent the arms embargo by var- 
ious means, including the use of false destinations 
and consignees. In some instances, forged requests 
for licenses were presented ostensibly on behalf 

" 22!) U.S. 304, 57 Sup. Ct. 216 (1936) . 



of governments who, upon inquiry, disclaimed any 
knowledge of the matter. 

The Third Neutrality Act 

The joint resolution of May 1, 1937, contained a 
provision designed to take care of cases such as 
the Spanish Civil War, and granted permissive 
authority to the President in regard to some new 
provisions while retaining most of the mandatory 
provisions of the 1936 Act ; consequently, like the 
previous neutrality acts, the issuance or nonissu- 
ance of export licenses was extremely limited by 
the inflexible provisions of the act. 

The Fourth Neutrality Act 

The joint resolution of November 4, 1939, 
omitted the arms-embargo provisions and substi- 
tuted therefor so-called cash and carry provisions, 
requiring materials to be paid for before delivery 
and carried in foreign vessels. By subsequent 
action. Congress eliminated the cash and carry 
provisions of the act. The authority to deny 
licenses, however, was limited to the instances in 
which the exportation would violate a law of the 
United States or a treaty to which the United 
States is a party. 

The removal of the embargo provisions from 
the Neutrality Act eliminated certain disabilities 
which stood in the way of the desire of the ad- 
ministration to make its material resources, manu- 
facturing facilities, and military equipment avail- 
able to the Western European nations. 

Informal or "Moral" Embargoes 

The use of aircraft by the armies of Japan and 
certain other countries for attack upon civilian 
populations and the absence of legal authority to 
impose an embargo as a sanction against aggressor 
states caused the Administration to resort to the 
informal or "moral" embargo. The term referred 
to a policy of discouraging American exporters 
from exporting aircraft equipment and aircraft 
armaments to certain countries. In essence, it 
consisted of an appeal to the exporter on grounds 
of patriotism and ethical conduct to refrain from 
applying for a license or insisting upon the issu- 
ance of a license to export aircraft and aircraft 
equipment to those countries. Though without 
legal basis, "moral" embargoes were observed by 
most established expoi-ters. However, as a result 
of the declaration of a moral embargo, there were 



512 



Department of State Bulletin 



no exports of aircraft to Japan after January 
1939. 

Tliis type of embargo was used to prevent air- 
craft equipment from going to Japan as an indi- 
cation of the indignation of the American people 
at the indiscriminate bombing of Chinese cities 
and as a means of preventing American arms from 
adding to Japan's military strength. The em- 
bargo provisions of the Neutrality Act were not 
applied to Japan and China because neither of 
these countries had formally declared war on each 
other and because the President, fearing that an 
embargo would hurt China more than Japan, 
never found a war to exist. In December 1939 
following the invasion of Finland by the Russian 
army, a "moral" embargo was instituted on air- 
craft shipments to the Soviet Union. This em- 
bargo was continued in effect until January 21, 
1941. 

The National Defense Act 

The enactment of the act of July 2, 1940, pro- 
vided the President with the authority he had 
lacked in effectuating his arms policies.^^ In im- 
plementation of this act, the President on July 2, 
1940, issued a proclamation empowering the Sec- 
retary of State to issue or refuse to issue licenses 
in accordance with such rules or regulations as the 
President should prescribe in the interest of the 
national defense. The act was extended by 
amendments to 1949. Pursuant to the authority 
conferred by this act, the Government was able to 
restrict the export of arms to the Middle East in 
support of the United Nations resolutions of May 
29 and July 15, 1948. 

Lend Lease and Reciprocal Aid 

On March 11, 1941, Congress enacted the Lend 
Lease Act authorizing the United States Govern- 
ment to ship war supplies to Great Britain and 
her allies. When this country entered the war 
the reciprocal aspects of lend lease became increas- 
inglj' apparent, each government cooperated in 
making its resources and productive capacity 
available for the efficient prosecution of the war. 
Essential supplies and combat items were fur- 
nished as mutual aid to the armed forces of other 
nations united in fighting the common enemy. 

Executive agreements were negotiated with the 
respective governments setting forth the prin- 

" The Act of July 2, 1940, has also been referred to as 
the Export Control Act of 1940. 



ciples which would govern the arrangements by 
which joint resources could be utilized most effec- 
tively. Although each government retained the 
right of final decision in the light of its own poten- 
tialities and responsibilities, it was agreed that 
decisions as to the most effective use of resources 
should, as far as po.ssible, be made in common, 
pursuant to the common plans for winning the 
war.'' 

The Export Control Act of 1949 

The Act of July 2, 1940 which had been contin- 
ued in effect by amendments until 1949 in that year 
was replaced by the enactment of the Export Con- 
trol Act of 1949. This act authorized the Presi- 
dent to restrict exports if required to further the 
foreign policy of the United States, to aid in ful- 
filling its international responsibilities, and to 
protect its national security.^' 

The National Defense Act of 1940 and the Ex- 
port Control Act of 1949 provided a firm legal 
basis for effectuating the Administration's policies 
pertaining to aircraft exports as well as other arms 
export without reliance on such measures as the 
"moral" embargo. 



COMPARISON OF PRESENT 
AND PREWAR CONTROLS 

Under the neutrality acts, the National Muni- 
tions Control Board has had the responsibility of 
recommending to the President the specific items 
to be included within the definition of arms, am- 
munition, and implements of war. Since World 
War II, there has been a division of responsibility 
with respect to exports. As discussed earlier in 
these articles, the export control of arms, am- 
munition, and implements of war, because of their 
peculiar nature and because of their immediate im- 
portance to national and international security 
and the critical relationship of such exports to 

" Twenty-second report on lend-lease operations, Ex- 
change of Notes, dated September 3, 1942, between tlie 
British Ambassador, Viscount Halifax and the American 
Secretary of State, Cordell C. Hull. 

"Public Law 11 — 81st Cong., 1st sess., sec. 2 of the act 
provides "The Congress hereby declares that it is the 
policy of the United States to use export controls to the 
extent necessary (a) to protect the domestic economy from 
the excessive drain of scarce materials and to reduce the 
inflationary impact of abnormal foreign demand; (b) to 
further the foreign policy of the United States and to aid in 
fuifllling its international responsibilities; and (c) to 
exercise the necessary vigilance over exports from the 
standpoint of their signiflcance to the national security." 



April 3, 1950 



513 



foreign relations, has remained in the Department 
of State. The Department of Commerce has 
jurisdiction with respect to certain other com- 
modities whose exportation is usually controlled 
for strategic and economic reasons. 

The demands of total war and new technological 
developments have, furthermore, brought about a 
separation in the administrative exercise of con- 
trol for two types of items. First, the National 
Defense Act of July 2, 1940, extended the export- 
control authority to a great many additional 
items. Although not considered as appropriately 
in the munitions list, some of these were related to 
munitions and implements of war, and others 
were controlled under the act because they were 
in short supply or for other strategic reasons. 
The control function with respect to these items 
was first assigned to the Board of Economic War- 
ware, operating under the policy direction of the 
Secretary of State, from October 11, 1911, to June 
24, 1943. Tlirough subsequent administrative re- 
organizations, the administration of such export 
controls came to be placed under the Secretary of 
Commerce. 

Second, the development of atomic energy and 
atomic weapons has resulted in the separate ad- 
ministrative operation of such controls under the 
Atomic Energy Commission. The complex scien- 
tific and technical aspects of atomic materials and 
the secrecy necessary to prevent unauthorized dis- 
closure of information were amone the reasons 
which led to the establisliment of separate adminis- 
trative operations under the Atomic Energy Com- 
mission of Controls on fissionable or related mate- 
rials. 

Presidential Proclamation 2776, eflFective April 
15, 1948, defining arms, ammunition, and imple- 
ments of war, included two new categories, thereby 
increasing the number of categories from 9 to 11. 
One of the new categories included fire-control 
equipment and the other miscellaneous military 
items, such as military radar and recently de- 
veloped articles used in warfare. 

The articles listed in these categories were in- 
cluded in the Proclamation because it was realized 
that they were essentially noncommercial or be- 
cause they had been especially adapted for mili- 
tary use during the war. 

Arms Traffic Controls 

Since there is now adequate legal basis for 
administrative action to implement the Govern- 



ment's arms-export policies, it is no longer neces- 
sary, in the great majority of cases, to resort to 
informal or moral suasion techniques. Also, plans 
of a broad and firm basis for handling export 
applications places this Government in a better 
position to cooperate with other governments in 
preventing clandestine and illegal shipments. 
The existence of a legal obligation, moreover, 
tends to equalize the situation as between the 
reputable exporter and the unscrupulous arms 
trafficker so that the exporter abiding by the an- 
nounced policy of this Government no longer is 
placed at a competitive disadvantage by so doing. 
With the establisliment of a firm legal basis for 
arms-export controls, it also has become possible 
to formulate definite policies and procedures to 
reduce the incentives and opportimities to violate 
the export-control laws. For instance, the scrap 
warranty policy adopted by this Government 
with regard to the sale of surplus military equip- 
ment prevented such equipment from being pur- 
chased by speculators for the export trade.^^ The 
operations of the speculator in export licenses 
which flourished in the prewar period, are now 
severely restricted by rigid requirements of the 
Munitions Division in the Department of State. 
As a prerequisite to the issuance of a license, the 
exporter must show the seller in possession of a 
firm order from the prospective purchaser. He 
must also show that the goods are immediately 
available for export. 



Statutory Authority in Relation 

to Our International Responsibilities 

In the prewar period, the neutrality laws were 
the principal legislative authority for the system 
of arms-export controls. The law compelled the 
issuance of export licenses unless the shipment 
violated a law of the land or a treaty to which the 
United States was a party. The rigidity of the 
neutrality acts prevented the system of licensing 
arms-export shipments from serving eflFectively as 
an instrument of our foreign policy at a time when 
careful discrimination was required in the appli- 
cation of export controls over arms shipments to 
discourage armed aggression and encourage con- 
ditions of international stability. 

Today, the added authority goes far toward 
enabling this Government to implement its obli- 

" See (iisonssion of sci-ap wanauty provisions in the 
second article, Bulletin, Mar. C, 1950, p. 3")!). 



514 



Deparfmenf of State Bulletin 



gations as a member of the United Nations as well 
as its arms export policy in general. 

The membership of the ITnited States in regional 
pacts such as the Kio and Atlantic pacts and the 
passage by Congress of military assistance pro- 
grams such as tlie Greek-Turkisli Aid Program 
and the Mutual Defense Assistance Program pro- 
vides a new framework for the consideration of 
the requests of foreign governments for military 
assistance from the United States Goverimient. 
It is obvious that the changed world outlook has 
an important bearing on the consideration given 
these requests. For this reason also, arms exports 
have been subject to more careful review than was 
necessary in the prewar situation. 

As presently drawn, the Export Control Act of 
1949 is limited in duration to June 30, 1951. 
Studies are being undertaken to endeavor to obtain 
permanent legislation for export controls on arms, 
ammunition, and implements of war reflecting the 
general interest of the United States in interna- 
tional order and stability rather than in the limited 
concept of neutrality. 

Current Arms Export Policies 

The current criteria of arms-export policies were 
set forth briefly in the first article of this series. 
It was pointed out that it is consistent with the 
long-range policy of the United States to permit 
other nations friendly to the United States to ob- 
tain militar}' equipment in the United States not 
required by this Government when needed by those 
nations for their legitimate self-defense purposes. 
Conversely, the United States does not favor the 
export of arms, ammunition, and implements of 
war to countries whose actions appear likely to 
endanger international peace and security either 
universally or with respect to particular regions. 
For this reason, the Government of the United 
States has taken positive action to prevent the 
diversion of arms shipments to destinations in 
Eastern Europe where they could conceivably be- 
come available to the guerrilla forces operating on 
borders of Greece. Furthermore, the Govern- 
ment of the United States is prepared to control 
the exports of arms in such a way as to support, in 
cooperation with otlier member nations, any pre- 
ventive or enforcement action taken by the United 
Nations. It is of interest to note that actions by 
the United States with respect to exports of arms 
to the Near East or India and Pakistan were 
directly linked to actions by the United Nations 



concerning disputes in those areas. 

Illustrative of the sweeping steps recently taken 
by this country to bring about conditions which 
can preserve tlic independence of nations friendly 
to the United States are the ratification of the 
North Atlantic pact and the enactment of the 
Mutual Defense Assistance Act. In the Western 
Hemisphere also, the United States has partici- 
pated with the nations signatory to the Rio pact 
to organize and lend vitality to such institutions 
as the Council on the Organization of American 
States and Inter-American Peace Committee, in- 
stitutions which were organized to facilitate 
friendly consultations between states with respect 
to mutual problems and disputes and to counter 
the disrujitive influences of the activities of revolu- 
tionary groups. 

Arms-export policies are constantly reevaluated 
and modified as required by the changing world 
situation. Many basic principles of arms-export 
policies are however, continued, essentially as they 
have been consistently practiced by the United 
States over the past several decades. Thus, the 
existence of domestic violence in any country may 
result in certain limitations on the export of arms 
to that country, depending on the surrounding cir- 
cumstances and the proximity of the foreign coun- 
try to the United States. Arms needed by the 
recognized government of a friendly nation to 
maintain internal order in the reasonable and 
legitimate exercise of constituted authority are 
generally permitted to be exported, assuming that 
they do not interfere with United States Govern- 
ment procurement. 

The arms involved in the illicit traflGic in arms is 
usually destined for revolutionary factions or 
groups. Therefore, as has already been set forth, 
the activities of the irresponsible arms trafficker 
are frowned upon, and every effort is made to close 
illicit channels of arms exports. 

In accordance with its established policy, this 
country, moreover, seeks to encourage the habit of 
peaceful and constitutional political changes in 
friendly nations and, conversely, to discourage 
revolutions by preventing the exportation of arms 
destined for dissident groups within their borders 
or operating from bases located in other countries. 

CONCLUSION 

Between "World War I and II, American 
arms-export policies were influenced by the strong 

(Continued on page 520) 



April 3, 1950 



515 



Ambassador Jessup Answers Senator McCarthy's 
Charges of "Unusual Affinity for Communist Causes"' 



STATES INSINUATIONS REVEAL SHOCKING 
DISREGARD FOR COUNTRY'S INTERESTS 



Mr. Chairman, I greatly appreciate the oppor- 
tunity that your Committee has given me to ap- 
pear before you in connection with the charges 
and insinuations which have been made against 
me by Senator McCarthy. On March 8, Senator 
McCartliy made the following statement to this 
Committee, which I quote from pages 71 and 72 
of the record : 

Although I shall discuss the unusual affinity of Mr. 
Philip C. Jessup of the State Department for Communist 
causes later in this inquiry, I think it pertinent to note 
that this gentleman now formulating top-flight policy in 
the Far East affecting half the civilized world was also 
a sponsor of the American-Russian Institute. 

No one can be loyal to communism and also loyal 
to the United States. This attack on me by Sena- 
tor McCarthy is obviously intended to give the 
impression that I am disloyal to the United States. 
When Senator McCarthy made that statement, I 
was in Pakistan completing an official mission 
throughout the countries of Asia. This mission 
was carried out as part of the effort this country 
is making to strengthen the free and democratic 
forces in Asia and the capacity of free Asia to 
resist subversive or antidemocratic forces. 

During the cour.se of this mission, it was my 
duty to speak on behalf of the Government of 
tlie United States to the Chiefs of State, Prime 
]\Iinisters, Foreign Ministers, and other high offi- 
cials of almost all of the countries of that area. 
In the course of that mission, I also made various 
public statements in an attempt to make clear to 
the peoples of the East that the solution of their 
problems does not lie in the false hopes dangled 
before them by the agents of Communist greed and 
imperialism. 

For example, at New Delhi, on February 23, 
1950, 1 issued this statement to the press : 

Since the end of the Second World War, history has 

' A statement made before a Subcommittee of the Senate 
Committee on Foreign Relations on Mar. L'O, ]950, and 
released to the press ou the same date. 

516 



recorded the extension of a new imperialism that has 
brought more than a dozen countries under the domina- 
tion of a single expanding power. The device used by 
this expanding power in extending its imperialism is to 
hold out the glittering promises of communism as a beacon 
light for the rescue of peoples who are sufEering from 
economic underdevelopment or who are trying to remove 
the shackles of the old traditional kinds of colonialism. 
However, where commimlsm gains control, it becomes 
immediately apparent that the peoples are not allowed 
to determine their own future, but must conform to a 
single policy laid down in Moscow. 

. . . Communism is hostile to what the Asian people 
want to do and what we want to help them to do — 
which is to develop the stability of their new countries 
and to develop their resources and their technical skills 
so that they are not subject to penetration, either through 
ignorance or distress or because they succumb to the false 
promises of the Communists. 

If Senator McCarthy's innuendoes were true, 
the representatives of the foreign governments 
with whom I spoke would be entitled to believe 
that my statements to them were deceitful and 
fraudulent. They would be entitled to believe 
that no confidence should be placed in the declara- 
tions which I made on behalf of our Government. 
If it were true that the President and the Secretary 
of State had sent on such a mission a person who 
was a traitor to his own government, they might 
well feel that they could place no confidence in the 
statements made by any of the representatives of 
the United States abroad. 

It may be relatively unimj)ortant whether the 
character of a single American citizen is black- 
ened and his name is brought into disrepute, but, 
in the i)resent serious situation of international 
relations tliroughout the world today, it is a ques- 
tion of the utmost gravity when an official hokling 
the rank of Ambassador at Large of the United 
States of America is held up before the eyes of the 
rest of the world as a liar and traitor. I am aware, 
Mr. Chairman, that Senator McCarthy has not 
used those words. But if his insinuations were 
true, these words would certainly be appropriate. 

It is impossible for aJiyone to estimate-the harm- 

Department of State Bulletin 



ful effect that these innuendoes have had on the 
success of my mission and tlie foreign policy of 
the United States. It is clear that, if those in- 
sinuations i-emain unanswered, they will further 
weaken the United States in its conffict with world 
commimism. For that reason, I flew back from 
Europe and asked this opportunity to be heard 
by tins Committee. 

' It is obvious that an individual holding the 
high position of Senator of the United States 
would not venture in this wa^ to undermine the 
position of the United States in its relations with 
the rest of the world unless there was some reason 
for doing so. I have tried to figure out what the 
reason behind this attack might be. 

I suppose that if I chose to follow the tactics 
whicli you gentlemen have witnessed in recent 
weeks, t would start with the hypothesis that this 
action was Communist-inspired. It so happens 
that, so far as I know, the only other attack upon 
my integrity during the course of my trip in Asia 
was made by Peiping Communist organs, and by 
Izvestia. the official publication of the Soviet 
Union in Moscow. On March 3, Izvestia attacked 
me in the following manner : 

At a press conference arranged on Febniary 23 in 
Delhi, Jessup set out to obtain a change of view in Indian 
public opinion. Jessup brought into action all kinds of 
means : Flattery and the publicizing of American "assist- 
ance to backward regions" and most of all, of course, 
slanderous fabrications against the U.S.S.ll. ... In 
general, Jessup tried with all his might but he had little 
success. Tlie imperialistic aggressive character of the 
policy of the United States throughout the world, and in 
Asia in particular, is so evident that no hyijocritical 
speeches and anti-Communist phillipics could hide it. 

So, you see, while I was on this mission, I was 
attacked by two sources, Izvestia and Senator 
McCarthy. Anyone who believes in the concept 
of guilt by association might draw some startling 
conclusions from this fact. However, I do not be- 
lieve in the concept of guilt by association. More- 
over, I do believe that anyone who, without ade- 
quate proof, levels a charge of conscious or igno- 
rant sujiport of communism at a member of the 
United States Senate — or at an official of the 
United States Government — is irresponsible. I 
have no evidence that Senator McCarthy was mo- 
tivated by a desire to assist the international Com- 
munist movement even though his words and 
actions have had that effect. I, therefore, reject 
this first possibility concerning the reasons for the 
insinuations made against me. 

A second possibility might be that such an at- 
tempt to discredit the position of the United States 
in its relations with the other free countries of 
the world was inspired by sheer partisanship. It 
is hard to believe that anyone holding the position 
of a Member of either House of Congress of the 
United States would so subordinate the interests 
of his country to sheer partisan advantage, I am 
sure no one of our major parties would do so. I 
shall, therefore, pass on to a third possibility. 



The third possibility might be that the person 
bringing these charges had made a careful in- 
vestigation and was convinced they were true and 
so serious that they ought to he made public even 
before tlie individual concerned had oeen asked 
for his side of the story. 

Are these charges and insinuations true ? Sena- 
tor McCarthy asserts that I was a "sponsor" of 
the American-Russian Institute, It is true that 
my name appears on a list of the sponsors of a 
dinner given by the American-Russian Institute, 
but not as a sponsor of the organization itself. 
The dinner in question was one given on May 7, 
194C, on the occasion of the presentation of its first 
annual award to Franklin D, Roosevelt which 
was accepted on behalf of his family. Senator 
McCarthy pointed out that the names of Howard 
Fast, Saul Mills, Ella Winter, John Howard Law- 
son, and Langston Hughes also appeared on this 
list. He did not point out that appi'oximatel}' 
100 people were named on this list of sponsors and 
that it also included the names of H. V. Kalten- 
born, George Fielding Eliot, Dean Christian Gauss 
of Princeton, and Mary Emma Wooley, former 
president of Holyoke. The entire list is already 
in evidence as an exhibit of this Committee, and 
the Committee can make its own judgment as to 
the caliber and variety of the people who are on it. 
A search of my files has failed to reveal any in- 
formation concerning this incident, nor do I re- 
member attending the dinner. From approxi- 
mately February to June of 1946, 1 was seriously 
ill in a hospital in New York City, so it is unlikely 
that I attended, 

I do recall, however, that I was asked by Mr. 
William Lancaster, a prominent New York lawyer, 
to permit my name to be used as a sponsor of a 
dinner which was to be held on October 19, 1944. 
I had met Mr. Lancaster, particularly through his 
activities on the Foreign Policy Association, at a 
time when Gen. Frank McCoy was President and 
Senator Alexander Smith and I were members of 
the Board. I accepted, but was unable to attend 
the dinner. I shall be glad to make the entire list 
of approximately 250 sponsoi-s available to the 
Committee. 

It is utterly irrelevant to the charges or in- 
sinuations that I or anyone else agi'eed to sponsor 
dinners of the American-Russian Institute of New 
York City in 1944 or 194G. There was no reason 
why a loyal American should not have done so. 
The Attorney General expressly excluded the 
American-Russian Institute of New York from 
the first lists of subversive organizations which 
were published and did not include it until April 
21, 1949. The Committee may be interested in 
knowing that I turned down invitations to speak 
at dinners held by this organization in both 1948 
and 1949. 

During the course of my life, I have participated 
in many organizations. These organizations have 
been of a type that one would normally associate 



Apr/; 3, 1950 



517 



with a person of my outlook and interests. They 
include the American Philosophical Society 
founded by Benjamin Franklin, the Foreign Pol- 
icy Association, the American Society of Interna- 
tional Law, the Sigma Phi Society, the Carnegie 
Endowment for International Peace, the Ameri- 
can Bar Association, and the American Legion. 
From 1933 to 1946, I was closely associated with 
the Institute of Pacific Relations. I am proud 
of my association with that organization which 
was founded by a group of leading businessmen 
and scholars in Honolulu sometime in the mid- 
twenties for the purpose of increasing knowledge 
and friendship among the peoples of the Pacific 
area. Despite the controversy which has oc- 
casionally surrounded it, it has continued to dis- 
charge the functions for which it was created. 
Although there is still much to be done in increas- 
ing the knowledge of the American people about 
countries of the Pacific area, the Institute has made 
a real contribution to the advance which has been 
made in this field during the last 25 years. 

I first became associated with it in 1933 when the 
late Newton D. Baker was its chairman. It is 
necessary to explain that the Institute of Pacific 
Relations is an international organization com- 
posed of national councils in countries touching 
upon or having close interests in the Pacific area. 
My first contact with the organization was to at- 
tend, in 1933, one of the periodic international 
conferences which have been held by the organ- 
ization. In those meetings, leaders of business 
and banking, former high officials of government, 
journalists, labor leaders, researchers, and teachers 
from all of the Pacific countries have met for a 
common study of the problems of the area. Many 
of the leading figures whom I have since met in 
the United Nations I first met through my con- 
nection with the Institute of Pacific Relations in- 
cluding Mrs. Pandit, presently Indian Ambassa- 
dor to the United States, and Dr. Hu Shih, the 
great Chinese philosopher who was former Clii- 
nese Ambassador in Washington. As indicative of 
the type of persoimel attending these conferences, 
I should also like to refer to the one held in Hot 
Springs, Virginia, in 1945, at which I was Chair- 
man of the American delegation and Admiral 
Thomas C. Hart, later United States Senator from 
Connecticut, was Vice Chairman. 

I was a member of the Board of Trustees of the 
American Council from about 1933 until my resig- 
nation because of health and pressure of other 
work in 1946. I was Chairman of the Board of 
Trustees of the American Council during 1939 and 
1940. I wa.s the Chairman of the Pacific Council 
from 1939 to 1942. I have also at various times 
served as a member of the Executive Committee 
of the American Council and, in 1944, as Chairman 
of the Research Advisory Committee. I was suc- 
ceeded as Chairman of the American Council by 
the late Dr. Ray Lyman Wilbur, President of 
Stanford University, wlio was succeeded by 
Robert G. Sproul, President of the University of 

518 



California, and now by Gerard Swope, Honorary 
President of the General Electric Company. 
Throughout my connection with the Institute, the 
Board of Trustees has included leadei-s of Amer- 
ican business, finance, and academic and public 
life. 

I would assume that anyone who was interested 
in inquiring into what I had done and what I have 
stood for would be interested in my entire life and 
background. An inquiry into my background 
would have shown that my ancestors came to this 
country from England in the seventeenth century 
and settled on Long Island and in Pennsylvania 
and new England. My great-grandfather, Judge 
William Jessup of Montrose, Pennsylvania, was a 
delegate to the Republican Convention of 1860, 
which nominated Abraham Lincoln for the presi- 
dency. He was chairman of the committee which 
drafted the platform upon which Lincoln was 
elected. A great-grandfather on my mother's 
side, John M. Butler, as a Pemisylvania delegate, 
cast his vote for Lincoln at that same convention. 
My father was a lawyer in New York City and a 
lay leader in the Presbyterian Church. On my 
mother's side, my foi'ebears were Irish and also 
among the early settlers of tliis country. 

While the Bolshevik revolution was gaining 
control in Russia, I was serving as a private in the 
107th Infantry in the AEF in France. Shortly 
after the Armistice, I returned to Hamilton Col- 
lege in Central New York to finish my education, 
which had been interrupted by my enlistment in 
the Army. 

One hears in these days that some individuals 
have been misled during their college years to 
espouse radical doctrines, including the Com- 
munist philosophy. If I had developed any 
I'adical tendencies in that period, they presumably 
would have been revealed in my immediately sub- 
sequent activities. Actually, on leaving college 
I took a position as Assistant to the President of 
the First National Bank of Utica, New York. I 
remained with the bank for 2 years, subsequently 
becoming Assistant Cashier. During those 2 
years in Utica, I was also superintendent of the 
Sunday School of the First Presbyterian Church 
and Commander of a local post of the American 
Legion. I am still a member of the American 
Legion. 

In July 1921, I married Lois Walcott Kellogg, 
whose ancestors were also of English and Dutch 
pioneer stock and whose mother was a sister of i 
the late Frederic C. Walcott, United States Sena- 
tor from Connecticut. 

During my service in the Army, I had developed [ 
an overwhelming desii-e to devote my life to pro- 
moting the cause of international peace, and, with 
this jiurpose in mind, I resigned my position at 
the bank soon after my marriage and entei'ed the 
Columbia University Law School. At this stage, 
as later in my life, I had the privilege of securing 
the advice of the late Elihu Root, who had lived 
on the campus of Hamilton College and whom I 

Department of State Bulletin 



came to know there. After 2 years at Columbia, 
I transferred to Yale University and received mv 
LL.B. degree in 1924. Immecliately afterward, 
I secured a position as Assistant to the Solicitor 
in the Department of State and served in this 
capacity for a year before }?oing back to Columbia 
as lecturer in interiuxtional law. I have been on 
the Columbia faculty ever since. I am now on 
leave from my present position as Hamilton Pro- 
fessor of International Law and Diplomacy. 

In 1925-26, when the Senate of the tJnited 
States was considering again the question of 
American accession to the World Court, I served 
as personal research assistant to the late Senator 
Irving Lenroot of Wisconsin. 

In 1929. Mr. Elihu Boot was asked by Secre- 
tai-y of State Kellogg to represent the United 
States at a Conference of Jurists in Geneva, at 
which the question of United States accession to 
the Statute of the World Court was considered. 
Mr. Root, whose views about Russian commu- 
nism are certainly a matter of public record, in- 
vited me to go along with him as his assistant. I 
am proud to say that I continued to enjoy Mr. 
Root's confidence and friendship until his death in 
1937. Not long after I had accompanied him to 
the Conference of Jurists, he authorized me to 
write his biography, and I spent a good deal of 
my time between 1931 and 1937 on its preparation. 
The biography was published in 1937 and covers 
the wide range of American law, business, politics, 
and diplomacy which filled the life of that very 
great American statesman and leader, both of the 
American Bar and the Republican Party. In 
1930, Mr. Harry Guggenheim, who had just been 
appointed by President Hoover as United States 
Ambassador to Cuba, invited me to go to Cuba 
with him as his personal legal adviser. I served 
with him there for about 9 months. 

After several years back at Columbia, I was 
called back into public service by Governor (now 
Senator) Herbert J. Lehman, who, in 1943, asked 
me to come to Washington as Chief of the Division 
of Training and Personnel in the Office of Foreign 
Relief and Rehabilitation Operations wliich he 
was then organizing. In December of that year, I 
served as Assistant Secretary General of the First 
Conference of the United Nations Relief and Re- 
habilitation Administration (Unrr.\), and, in 
1944, I served in a similar capacity at the United 
Nations Monetary and Financial Conference at 
Bretton Woods. 

Meanwhile, during a period from 1942 to 1945, 
I was the Associate Director of the Naval School 
of Military Government and Administration es- 
tablished at Columbia University at the request 
of the United States Navy Department. In that 
school, we trained some 500 officers for service in 
occupied areas in the Pacific area. During part 
of that time, I was also serving as consultant to 
the Nav}' Department in Washington, as a lec- 
turer at the Army School of Military Government 
at the University of Virginia, and as a lecturer at 

Aprit 3, 7950 



the Navy War College at Newpoit. I had pre- 
viously lectured at the Navy War College in 1931, 
1939, and 1941. I might add that, since the war, 
I have also delivered two lectures at the National 
War College in Wasiun";ton, and, in 1948, was 
invited to become a member of the Nation;il War 
College staff. I was unable to accept this appoint- 
ment because of my duties with the Department of 
State. 

Just before the San Francisco conference, in 
1945, the then Solicitor General, Mr. Charles Fahy, 
and I served, together with Mr. Green Hackworth, 
as a member of a conmiittee of jurists who pre- 
pared a preliminary draft of the statute of the 
International Court of Justice. I then served 
with the United States delegation to the United 
Nations Conference at San Francisco as an assist- 
ant on judicial organization and, thereafter, con- 
tinued as a consultant to the Department of State. 
In 1947, 1 was appointed as the United States mem- 
ber of a United Nations committee on the codifica- 
tion and development of international law. 

On January 3, 1948, I was appointed Deputy 
United States representative on tlie Interim Com- 
mittee of the General Assembly of the United Na- 
tions. On April 14, 1948, my appointment as 
United States representative to the second special 
session of the United Nations General Assembly 
was confirmed by the United States Senate. On 
June 1, 1948, the Senate confirmed my appoint- 
ment as Deputy United States representative in 
the United Nations Security Council. On March 
1, 1949, my appointments as United States Am- 
bassador at Large and also as United States rep- 
resentative to the third regular session of the 
General Assembly were confirmed by the Senate, 
and, last September 26th, I was again confirmed 
by the Senate as a United States representative to 
the fourth regular session of the General Assembly. 

So much for the record of my career. It does 
not read like the record of a Communist, a pro- 
Communist, or a fellow-traveler. 

At the beginning of my statement, I said that 
the insinuations which had been leveled against 
me had the effect of impairing the confidence of 
other governments in the United States and its 
representatives. I made that statement because 
it would be impossible to reconcile the actions 
I have taken botli in the course of my recent trip 
to Asia and in the course of the last 2 years with 
the Department of State with "an unusual affinity 
for Communist causes." I shall submit to the 
Committee for insertion in the record a collection 
of extracts from statements which I have made on 
the subject of communism. Merely by way of 
illustration, I would like to read from a statement 
which I made in the Political Committee of the 
General Assembly last December in the debate on 
China. There I said : 

... I hope, Mr. Chairman, it will be crystal clear that 
the United States policy is ngainst imperialism every- 
where. We flatly reject it for ourselves and we con- 
demn It when practiced by any other state. We condemn 

519 



it specifically as revealed in the Soviet-Russian continua- 
tion of Tsarist-Russian imiierialism in tlie Far East. Our 
concern is that China, India, and all Asia be safeguarded 
against Soviet-Russia or any other aggression. 

I believe that I should be judged not merely by 
what I have said but also by what I have done. 
I have already indicated that I have had the honor 
of representing the United States in the Security 
Council of the United Nations, in the Interim 
Committee of the General Assembly of the United 
Nations, and in one special and two regular ses- 
sions of the General Assembly. The proceedings 
of these bodies are public and their records are 
published. 

Among the international matters with which I 
have been called upon to deal for the United States 
are those of Korea, where the efforts of the United 
Nations to unify and give independence to that 
country encountered boycott and obstruction from 
the Soviet Union, the lifting of the Berlin block- 
ade, in which I had the good fortune to play a 
part, the attempts of the United Nations to pre- 
serve the independence of China, and the disposi- 
tion of the Italian colonies in North Africa. 
Another case that I might mention is that of Indo- 
nesia, where it has been the aim of the United 
States to encourage the Indonesian national gov- 
ernment, the government of which has shown its 
ability effectively to cope with Indonesian com- 
munism. 

In these matters, as in others, the Soviet Union 
opposed the settlements supported by the United 
States and other members of the United Nations. 
I have defended the position of the United States 
and fought the obstructive tactics of the Soviet 
Union and its Communist satellites. It is not for 
me to judge whether I have done well. I do assert 
that it cannot be denied that the record reveals 
complete devotion to the interests of the United 
States and our way of life and uncompromising 
hostility to international communism and all that 
it stands for. 

Although I believe I have made it clear from 
what I have already said. I wish to repeat categori- 
cally ancl without qualification that I am not a 
Communist and never have been a Communist. I 
am not and never have been a Communist sym- 
pathizer. I have never knowingly supported or 
promoted any movement or organization which I 
knew had as its objective the furtherance of Com- 
munist objectives. Although I cannot claim to 
have any detailed knowledge of the process, I 
wholeheartedly sujjport tlie efforts of those whose 
official responsibility it is to see that Communists 
or Commiuiist sympathizers are kept out of our 
Government. 

Mr. Chairman, as I have attempted conscien- 
tiously to review the record of my activities, I have 



perhaps been prejudiced by my own inner knowl- 
edge that Senator McCarthy's charges and insinu- 
ations are utterly false. But I submit that any 
sincere person would have concluded from a review 
of tlie record that it does not offer the slightest 
iota of proof that I have "an unusual affinity for 
Communist causes." I therefore conclude that 
Senator McCarthy's charges and insinuations are 
not only false but utterly irresponsible and under 
the circumstances reveal a shocking disregard for 
the interests of our country. 

Mr. Chairman, if these insinuations affected me 
alone, they would perhaps not be a matter of any 
great importance, except to me, my family, and my 
friends. But these insinuations, and the manner 
in which they were put forward, have had an effect 
upon 150 million Americans and all the people in 
the world who are striving for peace. I know I 
do not have to tell the members of this Committee 
of the serious situation which exists in the world 
today. You know that the stakes are high. The 
United States is in the midst of a struggle for 
peace. "We are opposed by the efforts of a dia- 
bolically clever and well-organized Communist 
organization which is seeking to destroy our democ- 
racy. If we are to succeed in our struggle, we 
must forego all partisanship and all partisan polit- 
ical adventures. If we are to succeed, we must 
show to our friends in the free world that we are 
not divided in our counsels but that we are united 
in our determination to promote the cause of peace 
and to pursue the wisest policy which our united 
genius can devise. If we are to succeed, we must 
all dedicate ourselves to the cause of peace with 
devotion and unity of purpose. For my part, 
that is my one and only thought. 

Traffic in Arms (Continued from page 515) 
isolationist sentiment in Congress and throughout 
the country which caused this country to adopt the 
concept of "strict" neutrality and a separate ap- 
proach from that of the League of Nations to the 
problem of world peace. In the 1940's, the threat 
to our national security resulted in the abandon- 
ment of our neutrality position and in the dele- 
gation of broader powers to the executive branch 
with respect to arms-export controls. 

As a consequence of recent developments here 
and abroad, it appears unthinkable that the United 
States will ever revert to unregulated anns traffic. 
In fact, it is probable that arms-export controls 
will be strengthened in order to implement and 
make more effective general American foreign 
policy. 



520 



Department of State Bulletin 



Inter-American Relations in Perspective 



hy Edward G. Miller, Jr. 

Assistant Secretary for Inter- American Affairs ^ 



Since I took office last June I have visited 15 of 
the 20 republics of Latin America. In every coun- 
try in South America and the Caribbean, I have 
talked with the people and with their leaders. 
And I have talivcd wiih our own citizens residing 
in these countries. My visits have given me a 
unique opportunity to examine our problems at 
first hand and to think about our relations with 
these countries and their people. 

Common Interests 

Our national interest in Latin America seems 
clear to me. As neighbors all of us must get along 
with one another. We have a common interest in 
the security of our hemisphere. 

During these visits of mine, I have been im- 
pressed by the community of interest which is our 
inter-American heritage. I have fortified my 
own faith in our ability to work together. In the 
Organization of American States, we have ma- 
chinery for the discharge of our common business. 
In the treaty of Rio de Janeiro, we have agreed to 
act together for the maintenance of our common 
peace and security. Experience shows clearly 
that we need the other American Republics and 
that they need us. This was proved during the 
last war through the pooling of our efforts and 
resources. 

But there is a deeper consideration that must 
govern our attitude. Our way of life is on trial 
m this hemisphei'e. We are called upon to justify 
our faith in the unlimited possibilities of the indi- 
vidual. 

Today we are especially concerned with improv- 
ing material standards of living in the Americas. 
Our policy is to lend our strength to our neighbors 
for this purpose. But there are limits to what we 
can do. The other American Republics are sover- 
eign and independent countries. 

' An address made before the fourth Annual Bulletin 
Forum in Philadelphia, Pa. on Mar. 22, 1950, and released 
to the press on the same date. 

AprW 3, 1950 

870417—50 3 



They are our equals under the law of nations. 
Each is as much responsible for the solution of its 
own domestic problems as we are for the solution 
of ours. It is not our function to run their affairs 
or to be officious. If, in dealing with tlieir own 
problems, they seek cooperation from us tliat we 
can properly furnish, we shall try to furnish it. 
But we cannot ourselves solve their problems, and 
there is no use of our even trying to cooperate ex- 
cept on the basis of what they themselves are doing 
to solve them. 

Misconceptions About U.S. 

There is a great deal of confusion in the other 
American Republics — and in the United States as 
well — about what the attitude and purposes of the 
United States really are — about what we are doing, 
about what we ought to be doing or not doing. 
One misconception that you run into is that the 
United States because of its size and prosperity 
is responsible for solving the problems of tlie other 
American Republics and that when they have 
difficulties the United States is to blame. An 
obsession has grown up here and abroad about 
American financial assistance. It has become 
dogma in some circles that the United States is 
under a continuing obligation to help other nations. 

Now the fact is that we have, in the past few 
years, taken the initiative to strengthen other 
countries through financial and technical meas- 
ures. That initiative today is represented by, and 
in part, by the International Bank and Fund, the 
Export-Import Bank, and the Institute of Inter- 
American Affairs. AVe have not taken that initia- 
tive, however, in the discharge of any particular 
obligation to any particular country. We have 
done it because of the identification of our own 
national interest with tlie general welfare of the 
community. 

We are innnediately concerned, however, with 
correcting a dangerously unbalanced economic 
situation oy helping our neighbors increase their 

521 



own production on a rational basis. Some idea of 
the degree of imbalance is indicated by the fact 
that the United States, with less than 7 percent 
of the world's population, is today producing over 
40 percent of the world's goods. 

This unbalance is just as much against our in- 
terests as against those of the other countries. 
Obviously we serve our own interest by promoting 
increased productivity in Latin America. Finan- 
cial cooperation is one of the means to this end, but 
it is not an end in itself. We and the other nations 
of this hemisphere must look at financial assist- 
ance in its proper perspective. The problem of 
increasing production is not one of dollars alone. 
It is a problem rather of men, of resources, of 
skills, and of ideas. Until these are allowed to 
play their true part, we are not going to accom- 
plish very much. 

Another source of confusion is the claim that 
because we are meeting particular emergencies in 
one part of the world through cooperative meas- 
ures we ai'e therefore obligated to cooperate on a 
similar scale in other areas, even though condi- 
tions are quite different. We are under no such 
obligation. Moreover, what we have clone to meet 
emergencies in the Eastern Hemisphere has not 
prevented us from continuing our cooperation 
with the countries of the Western Hemisphere. 



In the past 2 months, I have participated in 
conferences at Habana and Rio de Janeiro at- 
tended by our Ambassadors in the other American 
Republics. At these conferences, we decided that 
our programs of cooperation must be planned in 
terms of the over-all situation in each country. 
Our cooperation can be effective only wliere there 
is a genuine mobilization of effort in the other 
country. This point of view will be put forward 
by our delegation at the special session of the 
Inter-American Economic and Social Council 
which convened this week in Washington. 

The bipartisan legislation now before Congress 
to give effect to the Point 4 Program, known as 
the Kee-Herter Bill, also expresses this point of 
view. It contains one provision which may be 
most useful in making this over-all approach effec- 
tive. I refer to the device of joint commissions 
to be set up at the request of other countries to 
work out programs for economic development. 
These would be permanent commissions concerned 
with the various aspects of our relations with the 
other countries relating to economic development. 
But miracles are not to oe expected in this immense 
task of development, and we cannot look forward 
to immediate transformation of the economy of 
any country. Wliat is needed more than anything 
else is persistence of purpose and effort. 



Inherent Differences 

Another point I want to make clear is that, even 
within the Western Hemisphere, our policy of 
cooperation cannot possibly be uniform in its ap- 
plication country by country. For one thing, the 
differences between the nations of the American 
community are striking. 

Ten days ago I was in Brazil, a country larger 
than the United States. Just before that I was in 
Uruguay, with an area somewhat less than that 
of Nebraska. I have visited countries with cul- 
tures as different as those of Haiti and Argentina. 
In Brazil the language is Portuguese; in Haiti, 
French. Paraguay is virtually bilingual, as al- 
most everyone speaks the native Guarani in addi- 
tion to Spanish. In the other countries, Spanish 
is the language. 

Some countries are badly overcrowded; some 
are almost empty. Some are rich; some are poor. 
Some have developed industries; others are pri- 
marily agi'icultural. Some wish to attract foreign 
capital ; others see no advantage in doing so. Our 
cooperative programs must therefore be adjusted 
to the conditions of the different countries. They 
must, in particular, be adjusted to the degree of 
self-help which the coimtries themselves apply. 
Some of them have immense possibilities for in- 
creased production but are not meeting the chal- 
lenge of those possibilities. This naturally limits 
what we can do to cooperate with them. Others 
are making an aggressive attack on the problem 
of their own production and, consequently, are 
getting more cooperation from us. 



The Example of Puerto Rico 

Recently, I saw a most inspiring example of 
what a dynamic and high-minded government can 
do to elevate its people. It was in my native island 
of Puerto Rico, which today, as an associated part 
of the United States, has its own independently 
elected governor and legislature. The adminis- 
tration of Governor Munoz Marin is not sitting 
back and deploring the dire economic and social 
situation in that overcrowded island. On the con- 
trary, the Government of Puerto Rico is aggres- 
sively administering a program of development, 
partly through the aid of public funds but pri- 
marily through bold and far-sighted measures for 
attracting private capital. 

Governor Munoz Marin told me that each j'ear 
there are approximately 26 billion doHars of new 
investment in the continental United States. He 
feels that the task of his Government is to try to 
attract some portion of this investment to Puerto 
Rico and that if it is successful in attracting even 
one-fourth of one percent of this amount, the 
economy of Puerto Rico can be radically trans- 
formed in a few years. This example might well 
be studied by countries with similar problems. 

Basis of Friendship 

Wlien I speak of our attitude toward other 
American Republics and our cooperation with 
them, I am reminded that the questions most fre- 
quently asked me when I return from a trip like 
my last one are: "What do the people of the other 



522 



Department of State Bulletin 



countrips think of us? Is there ii solid enough 
friendship to form the basis for real cooperation T' 
My answer is that by and hirge they do like and 
respect us, that such a basis of friendship does 
exist. Obviously, there are exceptions in detail 
and often we are validly criticized for errors of 
omission and commission. Our size and strength 
make us a natuial target, especially for those who 
would sliift the blame for local dillicultics or who 
confuse details with the totality of our relations. 
We are prepared to take this kind of criticism in 
our stride as one of the expected obstacles in the 
conduct of our international relations. We will 
not allow it to deflect us from administering those 
relations accordinji to the interests of our country 
as we see them. However, let no one confuse our 
restraint with docility. Bad faith, deliberate niis- 
struction and hostility, where they occur, are 
bound to injure our relations with the comitry 
concerned. The job of creating good relations is 
not ours alone. 

We naturally seek to spread understanding of 
our motives. This is the purpose of our informa- 
tion programs. The extent to which we realize 
understanding tests the effectiveness of our coop- 
eration. In the progressive city of Sao Paulo, 
Brazil, the state and mimicipal governments on 
the day I was there donated a parcel of land worth 
almost 300 thousand dollars for the expansion of 
the Brazil-United States Cultural Institute. We 
might ponder this real example of international 
friendship. To mj' mind it represents a more 
typical attitude than such resentment and criti- 
cism of us as also find expression. 

I have spoken of the need for each country to 
assume the responsibility that belongs to it alone. 
I have spoken of the need to base our inter- Amer- 
ican cooperation on the active programs of self- 
help that each country undertakes for itself. I 
have spoken of the friendship and trust that are 
indispensable to cooperation. These are the ele- 
ments. Let us now clear our minds of fantasies, 
false notions, and imagined grievances. We have 
the tools, in this hemisphere, to prove the effective- 
ness of our way of life. It means hard work, 
patience, and good will. I suggest that we go 
forward on that basis. 



Consular Convention With 
Costa Rica Enters Into Force 

[Released to the press March 22'i 

On March 19, 1950, the President issued his 
proclamation of the consular convention between 
the United States and Costa Rica, which entered 



into force on that day, the thirtieth day after the 
day of the exchange of instruments of ratification, 
in accordance with article XV of the convention. 

The convention was signed at San Jose on Janu- 
ary 12, 1918, by the Uniled States Charge 
d'Affaires ad iterim and the Costa Kican Secretary 
of State in ciiarge of Foreign Relations. The ad- 
vice and consent of the Uniled States Senate to 
ratification of the convention was given on August 
17, 1949, and the convention was ratified for the 
United States on September 2, 1919. The respec- 
tive ratifications of the United States and Costa 
Rica were exchanged at San Jose on February 17, 
1950. 

The convention, which was developed after ex- 
tensive study and negotiation, establishes a formal 
reciprocal basis for the exchange of consular of- 
ficers between the two countries, an exchange 
which has taken place heretofore on the basis of 
custom and usage, and defines rights and duties 
covering such matters as privileges and immuni- 
ties with respect to taxation and import duties, 
consular authority in connection with the settle- 
ment of decedents' estates, representation by con- 
sular officers of their countrymen, authentication 
and notarization of documents, and shipping and 
merchant-marine problems such as salvage and 
personnel. 



U.S. Endorses Report of 
Caribbean Investigation Committee 

Statement hy Secreta-ry Acheson 
[Released to the press March 22] 

The United States gives full support to the con- 
clusions and recommendations i^resented by the 
Caribbean Investigating Committee to the Council 
of the Organization of American States, acting 
provisionally as the Organ of Consultation under 
the Rio treaty. The Committee, on which a rep- 
resentative of the United States was privileged to 
serve along with representatives from four other 
American Republics, carried on its investigations 
in a thorough and objective manner. 

The resolutions which the Committee has rec- 
ommended be adopted by the Organ of Consulta- 
tion reflect a mature and consti'uctive considera- 
tion of the facts and causes involved in the situa- 
tion which the Committee was asked to investigate. 
I am confident that the Organization of American 
States, through its action in this case, will take a 
great step forward in the cause of peace and se- 
curity and, thereby, importantly strengthen the 
basis of inter- American solidarity and friendship. 



April 3, ?950 



523 



General License Concerning 
Assets in Balkans Revoked 

On February 24, 1950, Attorney General J. 
Howard McGrath announced the revocation of 
General License No. 32A which permitted limited 
monthly remittances from blocked accounts to per- 
sons within Bulgaria, Hungary, or Rumania who 
are citizens or subjects of any such country and 
who are the beneficial owners of such accounts. 
That license, as he pointed out, was revoked pend- 
ing a governmental decision as to the disposition 
to be made of blocked assets of nationals of Bul- 
garia, Hungary, and Rumania in accordance with 
the treaties of peace with those countries. 

Numerous inquiries have been directed to the 
Office of Alien Property, Department of Justice, 
as to whether the action described in the Attorney 
General's announcement had any effect either on 
assets in the United States of nationals of Bul- 
garia, Hungary, and Rumania which are not 
blocked at the present time or on assets which may 
be required in the future by such nationals. 

Harold I. Baynton, Acting Director, Office of 
Alien Property, emphasizes that existing assets 
in the United States of nationals of Bulgaria, 
Hungary, and Rumania which have been un- 
blocked under either general or special license or 
assets of those nationals which may be acquired in 
the future and which would be free under Gen- 
eral License No. 94 are in no way affected by the 
revocation of General License No. 32A. The 
effect of the revocation is to prevent those owners 
of assets now blocked, who live in Bulgaria, 
Hungary, or Rumania and who are citizens of any 
such country, from using such assets in the limited 
amounts formerly permitted under General 
License No. 32A. 



Pan American Day, 1950 

A PROCLAMATION' 

Whereas this year marks the sixtieth anniver- 
sary of the founding of the Pan American Union, 
which now functions as the General Secretariat 
of the Organization of American States; and 

Wheiu3as April 14 is customarily designated as 
"Pan American Day" in each of the republics of 
this Hemisphere, as a commemorative symbol of 
tiie bonds of friendship among the peoples of the 
Americas; and 

Whereas it is fitting to call attention to the high 
purposes insijiring the American republics in their 
collaboration, through the Organization of Amer- 
ican States, toward the solution of their common 

' Pioe. 2877, 15 Fed. Reg. 1629. 



problems and the maintenance of their peace and 
security : 

Now, therefore, I, Harry S. Truman, Presi- 
dent of the United States of America, do hereby 
proclaim Friday, April 14, 1950, as Pan American 
Day ; and I direct the appropriate officials of the 
Govermnent to have the flag of the United States 
displayed on all public buildings on that day. 

I also invite the Governors of the States, Terri- 
tories, and possessions of the United States and the 
ajjpropriate officials of municipalities and other 
political subdivisions, to issue proclamations or 
take other suitable action with respect to Pan 
American Day. And I call upon the schools, 
churches, and civic organizations, and the people 
of the United States generally, to observe the day 
with api^roiDriate ceremonies, thereby giving ex- 
pression to the cordial sentiments entertained by 
the Government and people of the United States 
for the Governments and jaeoples of the other 
American republics. 

In witness whereof, I have hereunto set my 
hand and caused the Seal of the United States of 
America to be affixed. 

Done at the City of Washington this eighteenth 

day of March in the year of our Lord nineteen 

hundred and fifty, and of the Independ- 

[seal] ence of the United States of America 

the one hundred and seventy-fourth. 



Harry S. Truman 



By the President : 
Dean G. Acheson 
Secretary of State. 



Switzerland To Represent 
U.S. Interests in Bulgaria 

[Released to the press March 22] 

Notice is hereby given that following the cessa- 
tion of diplomatic relations between the Govern- 
ment of the United States of America and the 
Government of the Peoples' Republic of Bulgaria, 
the Government of Switzerland assumed the pro- 
tection of American interests in Bulgaria and the 
Govermnent of Poland assumed the protection of 
Bulgarian interests in the United States of 
America. Notice is further given that all matters 
relating to American interests in Bulgaria or 
Bulgarian interests in the United States of 
America should henceforth be directed to the 
Division of Protective Services of the Office of 
Consular Affairs, Department of State, Washing- 
ton 25, D.C. 



524 



Department of State Bulletin 



Halibut Convention With Canada 

[Released to the press March 2^1 

The Department of State announced signature 
today of a convention between the United States 
ami Canada for the extension of port privileges to 
halibut fishing vessels on the Pacific Coast of the 
two countries. 

The United States Ambassador, Laurence A. 
Steinhardt, and the Canadian Minister of Fish- 
eries, R. W. Mayhew, signed the convention in 
Ottawa. 

Under the terms of this agreement, Canada will 
grant to United States halibut fishing vessels the 
privilege of landing catches and obtaining sup- 
plies, repairs, and equipment in Canadian ports 
on the Pacific Coast. In return, tlie United States 
will grant the same privilege to Canadian halibut 
fishing vessels in Pacific Coast ports of Alaska 
and the continental United States. 

This convention puts on a permanent basis an 
arrangement which has been made year by year 
in the past. 



Shanghai Communists Delay 
Evacuees From China 

[Released to the press March 20] 

The American President Lines today informed 
the Department of State that local Chinese Com- 
munist authorities in the Shanghai Foreign Trade 
Bureau have refused permission for shallow-draft 
LST vessels under commercial chai'ter to the APL 
and manned by civilian APL crews to enter 
Shanghai for the purpose of ferrying evacuees to 
the liner S. S. General Gordon at safe anchorage 
outside the Yangtze estuary. Shallow-draft ves- 
sels are required to navigate the shallow north 
channel of the Yangtze because the main channel 
has been mined and is unsafe. 

Although the detailed written reply of the 
Shanghai authorities to this request is not yet 
available, it would appear that tentative refusal 
is based on unwarranted apprehensions of local 
authorities that these vessels ai'e not commercial 
ships. This is not the case. In view of the steps 
which Shanghai authorities had taken to expedite 
granting of a large number of exit permits, in 
view of the announcement of the top Chinese Com- 
munist authorities at Peiping that they wished to 
facilitate the departure of American official per- 
sonnel, and in view of the earlier indication from 
Shanghai authorities to the APL agent there of 
their agreement in principle to this operation, the 
Department is instructing United States officials 
there to seek at once a reconsideration. 



Almost 2,000 foreigners of various nationalities, 
including American diplomatic and consular offi- 
cials from Nanking ami Siianghai and many 
invalids and others urgently desiring to depart 
from the isolated port of Shanghai, had expected 
to leave by this means sometime in the course of 
this week. Approximately 310 Americans are 
involved. 

The two LST's are en route to Shanghai while 
the General Gordon, which was scheduled to leave 
Hong Kong yesterday for the i-cndczvoiis off the 
Yangtze, will remain in Hong Kong pending 
further decisions. The LST's will remain out- 
side Chinese territorial waters awaiting entry 
clearances. 



Japan-Burma Trade Agreement 

[Released to the press in Tokyo March 21] 

General MacArthur today announced a trade 
agreement between Japan and Burma ; provisions 
for the exchange of 49 million dollars (17.5 mil- 
lion pounds sterling) . of goods during calendar 
year 1950 has been ratified. 

ScAP officials stated this is first formal trade 
agreement between the recently established gov- 
ernment of the Republic of the Union of Burma 
and Japan. They said it is anticipated trade 
resulting from this agreement will be instrumental 
in the economic rehabilitation and development 
of both countries. 

The new agreement was negotiated in January 
1950 at trade conference held in Tokyo between 
Burmese Trade Mission headed by U Thet Su, 
Chairman of the Burmese State Agricultural 
Marketing Board and representatives of Scap. 
Japanese Government officials attended the con- 
ference as observers. 

In general, the new agreement provides for 
balanced trade between the two areas at the high- 
est practicable level. Trade will be conducted on 
a pound sterling basis in accordance with provi- 
sions of the over-all payments arrangement cur- 
rently in force between Japan and the sterling area 
to which Burma is a signatory. 

The new trade plan for the calendar year 1950 
provides for exchange of variety of goods. Jap- 
anese principal imports from Burma will be rice, 
crude rubber, gram (chickpeas), raw cotton, 
maize, teak, beans, tung oil, lacquer, cotton seed, 
sticklac, and other raw materials. Japanese prin- 
cipal items of export to Burma will include tex- 
tiles, building materials, small-scale cottage in- 
dustry equipment, machinery and equipment, 
rubber manufactures, cement, food, enamel- 
ware, aluminum ware, and other miscellaneous 
commodities. 



April 3, 1950 



525 



INTERNATIONAL ORGANIZATIONS AND CONFERENCES 



Universal, Regional, and Bilateral Patterns of International Organization 



Statement hy Deputy Under Secretary Rush ^ 



Mr. Chairman and Members of the Subcom- 
mittee : I appreciate very much the opportunity to 
appear for the Department of State at this par- 
ticular stage in these hearings. The Subcommit- 
tee has now had tlie views of the proponents of 
the various resohitions before it, each of which ad- 
vocates furtlier action of one sort or another to 
extend our participation in international organ- 
ization. 

Two impressive facts have emerged from the 
testimony thus far. One is tliat the proponents 
of the resolutions before you share a sense of the 
inadequacy of mankind's present political ar- 
rangements and a sense of urgency with respect to 
more effective action in building a world security 
system. The other is that the only serious criti- 
cism of existing international machinery comes 
from those who wish to have us participate more 
rather than less. It may be significant that there 
is no resolution before the Committee calling for 
us to withdraw from our iiiteniational responsi- 
bilities — nor is there any significant organized 
opinion in the country which takes that view. I 
take that to mean that the people of this country 
have reached a basic understanding that the fate of 
this nation is interwoven with events beyond our 
borders and that our safety, liberty, and well-be- 
ing require us to act as a part of the world 
about us. 



Only a fool could close his mind to the possi- 
bility that we may need to take further steps in 
the field of international organization. We are 
not hei'c to enter a blind defense of a status quo. 
The postwar world is neither secure nor stable, nor 

' Made before the Senate Committee on Foreign Rela- 
tions on Feb. 1,5, 1950. 



are its peoples free and adequately fed. Sovereign 
states have been reluctant to yield enough of their 
freedom of action to insure the safety of us all. 
The scars of the devastation of World War II 
have not been healed. Shifting power alinements 
and struggles for power advantage continue to 
cast a shadow over the more constructive efforts 
to work together across national frontiers. In 
great areas of the world, population is pressing 
hard against the ceilings of available foodstuffs. 
We who can produce so much find it difficult to 
work out a rational basis upon which we can ex- 
change our wealth for the wealth of othei-s — to our 
mutual advantage. The great national, political, 
and social revolutions touched off in the Westei-n 
world in the eighteenth and nineteenth centuries 
continue to force fundamental change in many 
parts of the world. The counterrevolution and 
reaction of international communism has not only 
become an effective tool for the extension of the 
power of the Russian state but in certain areas it 
is rebuilding the institutions of tyranny and sup- 
pression against which men have been struggling 
for centuries. A world which is being forcibly 
united by technical development is divided by stul>- 
born traditions, racial animosities and barriers of J 
language, religion, and custom. The breath-tak-j 
ing pace at which the boundaries of human knowl- 
edge and technical capacity are being smashed isj 
not matched by our ability to organize man to deal_ 
with the problems of his own creation. As it has 
been well put by others, our central problem is 
whether man wlio knows so much is wise enough 
to survive. 

If it is foolish to close our minds to change, it 
would be equally foolish for us not to hold tena- 
ciously to the gains which we have already made 
and not to take account of the lessons of our recent 



526 



Department of Sfa/e Bulletin 



experience. I shall show in a few moments (hat 
wo have come a very lonj^ way in the work of the 
United Nations. That structure has been power- 
fuliv reinfoived by sucli regional arrangements 
as the Kio Pact and the North Atlantic Pact. It 
would lie disastrous, if by turning in any irrespon- 
sible or whimsical fashion to new forms of organi- 
zation or glittering formulae for perfection, wo 
wei-e to set oui-selves back. Almost all of the pro- 
ponents of the resolutions before us have stated 
their strong support for the United Nations and 
have disclaimed any intention or desire to weaken 
it in any way. But as the people of the country 
consider what our attitude shall be toward these 
proposals, we nuist bear in mind that, by ill-consid- 
ered action, we can inflict unintentional damage 
and destroy what we think we are trying to save. 
The power and influence of the United States im- 
poses upon us a very great responsibility; our 
action or our inaction can profoundly affect the 
course of events in the rest of the world. 

We should do irreparable harm if we should 
come forward with bold proposals for radically 
new international organization without satisfac- 
tory answers to some very fundamental questions. 

Exactly what is it we are proposingUiat we and 
others do? Wliat is it we want? What do we 
have in mind? Do we oui-selves understand the 
full implications of the course we have in mind? 
Are we acting from sober reflection or from hys- 
teria, fear, or lack of understanding of our situa- 
tion? Are we prepared to persevere in the new 
course? Are we willing to pay the costs? Have 
we considered the matter carefully from the point 
of view of other nations? "Wliich of our existing 
problems would be solved or brought substantially 
near solution if the new course were adopted — 
or which of the threats now hanging over the world 
would be magnified and made more difficult to 
handle? What procedures, both within our own 
constitutional system and in the international field, 
must we follow if we are to go forward under the 
new proposal? These are important questions 
whatever our proposals, but they are vital if we 
are to consider whether we shall place in the hands 
of others the power to dispose of the manpower 
and the resources of the United States. 

What do we Americans want in this twentieth 
centurj' in our relations with the rest of the world? 
What IS our foreign policy ? In one sense, it can- 
not be stated. This great nation, rich, sprawling, 
and diverse, will not allow its foreign policy to be 
compressed into a few words by a handful of 
people in AVashington. In another sense, our 
foreign policy is known and understood by our 
citizens throughout the land. A well-considered 
and convenient statement of our basic policy is 
found in the Preamble and in articles 1 and 2 of the 
Charter of the United Nations. ... A reading 
would remind us, however, that the purposes and 
principles written into the Charter while we were 
still facing trial by fire in the recent war do iii 

April 3, 1950 



fact reflect the basic principles and the loftiest 
aspirations of the American people. . . . 

The emphasis in these hearings has not been 
upon a restatement of our broad purposes but upon 
how we can translate them into accomplished fact. 
We shall never conqjletely realize all our purposes. 
It is a part of our nature to aspire to goals beyond 
our immediate reacii and not to be satisfied so long 
as important jobs remain to be done. As we solve 
some problems, others will arise to take their place. 
Some we shall not readily solve and may have to 
endure for a considerable period. 



THE TASK AHEAD 

Again, it is characteristic for us to continue to 
point toward the future — to apply our energy 
and intelligence toward the problems ahead of us 
rather than to spend our time in contemplation of 
past successes or matters behind us. This tend- 
ency to turn to the next task ahead is entirely 
wholesome, provided it does not make pessimists 
of us all. If we are to assess our situation ac- 
curately and are to sunnnon the hope and faith 
we need for the job ahead, perhaps we should 
pause on rare occasions and borrow encourage- 
ment from the record of the ]iast. Time does not 
permit a complete analysis of the recent record, 
but it is not unimportant that the blockade of 
Berlin of a year ago was removed, the fighting in 
Indonesia gave way to a statesmanlike agreement, 
that the troublesome issues of Palestine are in the 
process of peaceful settlement with no real likeli- 
hood of a resumption of fighting, that guerrilla 
operations in Greece have been overcome and that 
Greek effort can be increasingly devoted to the 
long-needed reconstruction of the country, that the 
North Atlantic community is organizing itself 
strongly for its mutual defense, that the Western 
European economy is daily becoming stronger and 
more vigorous, and that significant steps are being 
taken to integrate Western Germany and Japan 
into the family of nations on a peaceful and co- 
operative basis. I cite these not to stinudate a 
false optimism but to point out that much con- 
structive work is going on continuously all about 
us. 

As we turn to matters ahead of us, we see an 
agenda of formidable problems. We do not have 
international control of atomic energy and are 
confronted with competition in atomic weapons. 
We have not resolved the formidable gap between 
our exports and our imports. We have not 
reached a satisfactory peace settlement for Ger- 
many, Japan, or even Austria and a reintegration 
of those peoples back into the community of na- 
tions. The peoples of Asia have not yet achieved 
stability in their effort to build free societies of 
their own and are being directly threatened by the 
counterrevolutionary and reactionary forces of 
international communism with subjection to the 

527 



interests of the Russian state. The world has not 
yet found a satisfactory basis on which relations 
with the Soviet Union can be conducted, nor a 
means for insuring that the Soviet Union will 
respect tlie conduct required of all states if there 
is to be peace. 

There are many other questions before us but 
those which have just been named are of major 
importance and bear directly upon the issues 
which are being discussed in these hearings. It 
becomes not only pertinent but necessary to con- 
sider how we are to get at these problems, even 
though we may not have complete solutions. It 
has been evident from the hearings thus far that 
the Subcommittee is not so much concerned with 
theoretical problems of forms and organization as 
with practical problems imposed upon us by 
urgent issues of foreign policy. 



WHAT ARE THE SOLUTIONS? 

It will be seen at a glance that the important 
problems before us are not likely to submit to a 
single method or to a single organizational de- 
vice. The effort of the United States in the post- 
war world has been applied on a broad front, in 
a bold and creative manner, advancing where it is 
possible to advance and searching out alternative 
means where obstacles bar the way. We have 
emphasized and strongly supported the United 
Nations as the organization of the world commu- 
nity and have worked in it to resolve problems of 
general interest and concern. We have dealt with 
other questions of a regional character in regional 
organizations, particularly in the inter-American 
system and in the North Atlantic community. 
The great mass of the daily conduct of our foreigii 
relations continues to be on a bilateral basis, direct 
between government and government. This com- 
bination of general, regional, and bilateral effort is 
not the result of theoretical analysis but is required 
for the orderly conduct of our business. A brief 
examination of some of our experience in using 
general, regional, and bilateral procedures might 
be useful in considering some of the issues de- 
veloped in these hearings. 



We will continue to give unfaltering support to tlie 
United Nations and related agencies, and we will continue 
to search for ways to strengthen their authority and in- 
crease their effectiveness. 

. . . Apart from the Soviet bloc, for the mo- 
ment, it is fair to say that the membership of the 
United Nations is making a persistent and honest 
effort, in hundreds of matters which come before 
that organization each year, to carry out the pur- 
poses of the Charter. No single nation, including 
our own, has fully measured up to the high stand- 
ards of the Charter — but that has not been ex- 
pected. Wliat has been accepted as a general obli- 
gation is to try by practical steps, within available 
means, each in his own way, to contribute to the 
objectives established. . . . 

However cynical we may believe that effort 
becomes on many issues, it is noteworthy that even 
the Soviet Union acknowledges in this somewhat 
left-handed fashion, the moral and political au- 
thority of the Charter among the i)eoples of the 
world. 

This world-wide acceptance of principles which 
are central to our own foreign policy is a tremen- 
dous asset which the United States must carefully 
nourish. It provides the basis for a solidarity of 
the world community which could not readily be 
brought about through propaganda, diplomatic 
negotiation, or other available means. . . . 

The Charter has been drafted ; it has been signed 
and placed in effect; it provides a basic structure 
for the constructive consolidation of the world 
community. It is a fair question to ask whether, 
if we now embark upon an effort to redistribute 
governmental power in a fundamental way, we 
would not now unleash divisive and disruptive 
forces of diverse interests and cultures at the very 
moment when solidarity is of the greatest possible 
urgency. 

It should be noted that the Charter is our basic 
over-all agreement with the Soviet Union. It was 
negotiated in detail with great care at a time when 
we and they were fighting a common enemy. It 
contained provisions whicTi, if loyally carried out, 
would insure the peace. . . . 



The United Nations and the Charter 

When we turn to the United Nations and its 
Charter we are conscious of tlie dominant role 
whicli support for the United Nations has played 
in our foreign policy. As a treaty aproved for 
ratification by a vote of 89 to 2 in the Senate, it is 
a part of the supreme law of our land. A more 
effective use of the United Nations was the theme 
of tlie Vandenberg resolution passed by the Senate 
on June 11, 1948, by a vote of G4 to 4. President 
Truman, in his inaugural address, outlined our 
program for peace and freedom and stated in his 
first point that: 



ASSESSING WORK OF UNITED NATIONS 

When one attempts to assess the work of the 
United Nations system up to this point, one dis- 
covers that the story is difficult to tell. The 
United Nations has long since outgrown the possi- 
bilities of a short and simple account. I am con- 
vinced that at least some of the discouragement 
and some of the cj-nicism which has found expres- 
sion resvdts from a lack of understanding or even 
of information about its activities. . . . This 
nuiterial is available in the publications of the 
United Nations as well as in materials supplied by 
the Department of State and by many of our lead- 
ing private organizations who arc performing a 



528 



Department of State Bulletin 



splendid service in tlieir publications. The De- 
piirtnient of State will be is.suin<; shortly two or 
three publications which should be of material 
help to those who are seeking information in this 
lield. ... 

Tlie i)rincipal issues raised in discussing the 
resolutions now before the Subcouunittee concern 
political and security matters. If we are con- 
sidering any major changes in existing arrange- 
ments, we should at least understand how far we 
have come thus far in this tield. The United 
Nations has done much more than mobilize world 
opinion in supjiort of the Charter and against 
aggression. It has provided in a series of impor- 
tant cases effective machinery for settling disputes 
whicli had in them the possibilities of major war. 
In a number of cases, the United Nations has taken 
hold of actual fighting and has brought the parties 
to a peaceful conclusion. In a number of these 
cases the Great Powers themselves were directly 
involved. Out of the experience with Iran, Syria 
and Lebanon, Indonesia. Berlin, Greece, Palestine, 
Kashmir, and Korea, the United Nations has 
solved man}- of the technical problems involved 
in peaceful settlement and has developed great 
flexibility in its procedures in order to get on with 
its task. Thus far, fighting has been prevented 
or isolated and stopped. The Secretary-General 
of the United Nations has estimated that in this 
way the United Nations has helped in stopping 
hostilities which would have directly affected 500 
million people. 

It has been said that in many of these disputes 
"credit" cannot be given to the United Nations be- 
cause other factors played a major role. That is 
true, but the principal role of the United Nations 
is to maintain the peace. It must act on the one 
hand to overcome factors making for war and on 
the other hand it must take full advantage of all 
factors contributing to the settlement, including 
the determination of many of its members to act in 
support of peace. If a settlement is reached and 
peace is maintained, the credit and prestige of the 
United Nations will take care of itself. 

PROCESS OF PEACEFUL SETTLEMENT 

Some have stated that the United Nations is 
helpless in maintaining the peace because it has 
no police force and that the result is excessive and 
fruitless debate. That conclusion is tempting but 
a little naive. A realistic assessment of the proper 
role of force and negotiation in the settlement of 
disputes will show that a readily available police 
force is not necessarily a magical panacea. Dis- 
putes come about in situations where emotions are 
high, where public opinion is inflamed, where na- 
tional prestige has been engaged, and where the 
parties have made commitments from which it is 
difficult for them to extricate themselves. The role 
of negotiation and debate is to reduce the fever, to 
find common points of agreement, to introduce the 



calming effect of impartial opinion, to mobilize 
world opinion against the overreaching and ex- 
cessive view, to bring the contestants into direct 
touch with each other, to allow public opinion in 
the disputing countries to subside and to place 
upon the United Nations as a group political re- 
sponsibility for results for which the parties could 
not readily accept political responsibility. These 
are the processes which are familiar to civilized 
peoples in both their foreign and domestic affairs 
and are the badge of sophistication. The onlooker 
may become bored with tedious debate or a suc- 
cession of procedural resolutions, or may become 
scornful of connnissions and subcommissions and 
mediators and observers, but these processes are 
planned instruments for preventing war and 
settling disputes. It is important that those who 
live in compliance with the Charter be strong 
enough to discourage or resist aggression. But it 
does not follow that a succession of disputes, even 
some which involve outbreaks of fighting, could 
be readily settled by the employment of military 
means. If Hindu and Moslem or Jew and Arab 
are to learn to live together in peace, they must do 
so through the difficult processes of adjustment 
and mutual understanding and not through mili- 
tary occupation. 

It might be said that we are talking about the 
little troubles and not the big one, our relations 
with the Soviet Union. Nevertheless, it makes a 
great difference to the peace and stability of the 
world that such issues as Indonesia, Kashmir, Pal- 
estine, Greece, Korea, and others yield, even if 
slowly, to the processes of peaceful settlement. 
The parliamentary veto of the Soviet Union in the 
Security Council has not been able to block effec- 
tive action in many situations. The United Na- 
tions has developed alternative machinery by 
which it can proceed with the settlement of dis- 
putes despite a veto, except where the Soviet 
Union holds in fact a veto on the ground. Wliere 
the active participation and assistance of the 
Soviet Union has not been required, the United 
Nations has been able to get on with its job. 
Where the direct participation and cooperation 
of the Soviet Union is essential to a satisfactory 
result, its work has been frustrated and disap- 
pointing. 

RELATIONS WITH THE SOVIET UNION 

Let us turn now to one of our central problems, 
the nature of our relationship with the Soviet 
Union. There would be no special problem here if 
the Soviet Union should comply with agreements 
already made and accept standards generally 
adopted by the world community. The problem 
lies in the conduct of the Soviet Union. We can 
speculate whether tliis conduct derives from theory 
or doctrine, or from the tendency of totalitarian 
regimes to unleash forces which even they cannot 
control, or from fears or ambitions arising from 
information gi'ossly distorted by the macliinery 



April 3, 1950 



529 



through -which it passes on the way to the Kremlin, 
or from historical ambitions of a Russian national 
state, or from other factors. The tangible, con- 
crete problem is the conduct itself and that conduct 
is not consistent with the Charter of the United 
Nations nor with the requirements of a just and 
duraljle peace among a system of national states. 
In our efforts to deal with this situation, there are 
a number of fundamental factors which we must 
keep in mind. 

In the first place, we should not use their con- 
duct as a standard for our own, nor should our 
effort be merely one of reaction to the latest moves 
of the Kremlin. The great mass of our foreign 

Eolicy is directed toward the constructive job of 
uilding, in cooperation with others, the kind of 
world in which we should like to live. If effort 
must be diverted to deal with a special threat 
created by the Soviet Union, it should be recog- 
nized as an essential diversion, but nevertheless a 
diversion. The cold war was forced upon us, but 
it cannot be adequately met by direct counteraction 
alone. The real answer to the cold war is the suc- 
cessful pursuit of the constructive tasks which are 
basic to our policy. In the long run, our strength 
will depend upon our loyalty to our basic prin- 
ciples and to joint action with others who share 
them. 

Next, we are prepared to discuss outstanding 
issues with the Soviet Union and to leave all pos- 
sible doors open for an exchange of views. We are 
not prepared, as has been stated many times, to 
sit down in a corner with another Great Power 
and dispose of the basic interests of other govern- 
ments or peoples behind their backs. We have 
insisted upon the proper forum for discussion be- 
cause we believe that we cannot build for the 
future unless those who have genuine interests in 
a matter can be heard and can take part in the final 
decision. The record of the past 8 years will show 
the unusual effort which has been made by the 
United States and the Western world in taking 
the initiative to find possible points of understand- 
ing with the Soviet Union. The initiative from 
the West has been continuous and persistent. 
There have been remarkably few instances of an 
initiative on the part of the Soviet Union to find 
common points of contact with the rest. The door 
to negotiation is always open on our side. It has 
been said that the United Nations itself is a house 
of a thousand doors. And there remain the ordi- 
nary channels of diplomacy. 

When the record of agreement is analyzed, it 
will be seen, as stated by the Secretary of State, 

. . . that agreements reached with the Soviet Government 
are useful when these aRreements register facts or a situa- 
tion wliich exists and that they are not useful when tliey 
are merely agreements which do not register the existing 
facts. 

While we seek agreements in appropriate forums, 
we must continue to work to create conditions in 
which Soviet self-interest will bring them to con- 



duct which is acceptable to the rest of the world. 
That effort is exerted across a wide range of prob- 
lems and a diversity of techniques. 

The foregoing considerations apply primarily 
to the political and security activity of the United 
Nations structure. It is basic to the Charter that 
its members seek to establish the conditions of 
peace wliich come from economic well-being, social 
betterment, the enlargement of the field of human 
liberty, and the application of the concept of 
trusteeship to certain non-self-governing peo- 
ples. Time does not permit a detailed examina- 
tion of these activities but supplementary state- 
ments or materials could be made available if the 
Subcommittee considers it desirable. 

Regional Association 

If we have strongly supported the United Na- 
tions system, we have also participated vigorously 
and actively in the development of another in- 
strument to bring us nearer our goals of peace, 
freedom, and economic well-being in regional 
association. The Charter itself envisaged such 
regional developments. The Vandenberg resolu- 
tion pointed specifically to the desirability of pro- 
gressive utilization of the regional concept. The 
basic necessities of our situation both in the Amer- 
ican hemisphere and, in the North Atlantic, made 
it essential that we and other peoples who want 
the same things take additional steps to make 
ourselves strong enough to resist forces of aggres- 
sion. No nation is strong enough to do this alone. 
The strength of free men does not lie in military 
force alone but in a combination of moral and ma- 
terial strength derived from basic principles, free 
democratic institutions, free exercise of the right 
to differ, and a free economic and social system. 
To realize that strength it is essential to develop 
unity of purpose and action, particularly when 
freedom is threatened by totalitarian unity. The 
development of moral and material force and effec- 
tive unity requires action at every level; local, 
national, and regional, as well as universal. 

Until comparatively recently, we were accus- 
tomed to dealing with our problems in terms of 
the authority and power of the national state. It 
is becoming increasingly clear that a world of un- 
regulated national sovereignties is unable to deal 
with present conditions. The trend of events is 
impelling us toward closer international associa- 
tion. In the Soviet orbit, the process is imposed 
by dictatorship ; in the free world, it is developing 
more slowly, but more surely, by the agreement 
of free men. This trend naturally develops 
fastest among nations having the greatest com- 
nuniity of interest and principles. It has long 
been evident in the Americas and more recently in 
Western Europe and in the North Atlantic com- 
nnuiity and is beginning to find expression in other 
parts of the world. 



530 



Department of State Bulletin 



ARRANGEMENTS AMONG WESTERN POWERS 

In tlio Aiuericas, tlie rnited States has realized 
for 1"J5 years that any attempt by an outside power 
to impose its way of life on any American nation 
wouhi be in elFect an attack upon our way of life. 
In 1!>47, all the American Republics recorded in the 
Rio Treaty their realization of the fact that an 
attack on any one would be an attack upon each 
one. In 194{). tlie United States, Canada, and 10 
free European nations reco<xnized in the North 
Atlantic Treaty that an attack upon any one of 
them would be in fact an attack upon them all. 
The Semite ratified both treaties by overwhelming 
majorities. The Congress went further, in the 
Mutual Defense Assistance Act of 1949, by requir- 
ing that American military assistance be used to 
promote the "integrated defense of the North 
Atlantic area." 

In Europe, the three nations of Belgium, Nether- 
lands, and Luxembourg have agreed to form and 
are laboriously perfecting an economic union. 
Those three governments, with France and the 
United Kingdom, have entered into the Brussels 
Treaty which, like tlie Rio and North Atlantic 
Treaties, recognizes that an attack on one is an 
attack on all. In the Council of Europe, a dozen 
European countries are seeking new means of deal- 
ing with pi'oblems which are more of European 
than of national concern. In the Organization for 
European Economic Cooperation, pi-ogi'ess, more 
limited than we would like to see but still progress, 
is being made in dealing with the complex practical 
problems which must be solved in breaking down 
excessive national barriers to the movement of 
goods and money. 

These are not the only special groupings which 
arise out of genuine identity of interest. We have 
long been familiar with the voluntary association 
of the British Commonwealth of Nations. We 
oui"selves have a special relationship with the 
Pliilippines. Trends toward the recognition of 
a community of interest are evident in the Middle 
East, in Southern and Southeast Asia and in the 
Pacific. We have expressed, on a number of oc- 
casions, our sympathy for the development of 
regional groupings wliich are consistent with the 
purposes and principles of the Charter and whose 
members are prepared to act in support of peace. 

I cite these steps, far-reaching as they would 
have appeared a very few yeare ago, not as final 
answers in themselves but as steps on a clear 
path. We need many further steps, and some 
of them may be very reaching. The important 
thing is that they be right. All of us are con- 
fronted day by day with pressing practical prob- 
lems of which the solutions cannot wait for the 
development of dramatic new institutions. It is 
easy to overemphasize the importance of institu- 
tional change. The basic problems, economic, 
political, and military, must be solved in any 
event, and they must be solved by whatever means 
are available. If new institutions are required to 



meet our situation, we should use them, but it 
does not follow tliat we meet our situation by 
proposing institutional change. 

QUESTION OF MEMBERSHIP 

One of the most difficult problems in any new 
international arrangement is the question of mem- 
bership. The smaller and more closely related 
tlie group the easier it is to make progress but the 
greater the problem of those who are excluded. 
We can and do work out the answers to many prob- 
lems with our nei<^libor, Canada, with comparative 
ease. Between tlie Canadians and ourselves, the 
community of interest and of approach is clear. 
But all of our relations with Canada are colored 
by the relations each of us has with other countries. 
The tighter and more far-reaching the arrange- 
ment, the more serious the problem of member- 
ship becomes. The use of different arrangements, 
witli different membership, to deal with different 
problems is valuable in preventing sharp distinc- 
tion between the "in's" and "out's." 

While common interest offers the best basis for 
sound and practical progress toward closer intei"- 
national association, all steps in this direction must 
be consistent with and serve to facilitate achieve- 
ment of the purposes and principles of the United 
Nations. 



Bilateral Relations 

In addition to our activities in the United 
Nations and in important regional groupings, we 
continue to conduct a great mass of our business 
through bilateral relations with more than 70 
governments. These involve questions of trade 
and travel, private investment and governmental 
assistance, and countless matters of daily business 
which affect us all. 

Mr. Chairman, we cannot select a bilateral, a 
regional, or a universal pattern for exclusive use. 
The conduct of our foreign relations involves such 
mass and complexity that all methods and all ap- 
proaches must be fully utilized. We can under- 
stand that one group of citizens might wish to 
emphasize one approach and others may wish to 
urge another. But government, which is respon- 
sible for acting across the board in the national 
interest, must use tiiem all. They are closely inter- 
related and mutually dependent. The economic 
problems of Western Europe involve dollar and 
sterling problems far beyond the confines of the 
North Atlantic; they involve relations between 
manufacturing nations and primary producers, 
between competitive and complementary econo- 
mies. The United Nations system itself is power- 
fully strengthened and reinforced by the develop- 
ment of the inter-American system and the North 
Atlantic community. The successful performance 
of the United Nations, in turn, depends upon con- 
stant consultation and collaboration between many 
governments on a bilateral basis. Our bilateral 



April 3, 1950 



531 



relations with a number of nations have become 
more intimate and mutually beneficial through 
daily association in common efforts in the United 
Nations. At times we may be able to move more 
rapidly in one sphere than in another. The sum 
total of these efforts is required to move us ahead, 
each consistent with and supporting the other and 
all directed toward the same goals. 

Direct Contacts by Private Citizens 

It should be noted, in passing, that governmen- 
tal action is not the sum total of our foreign 
relations. Millions of our private citizens are in 
direct contact with men and women beyond our 
borders, in business, in schools, in professions, in 
missions, in personal friendships and family as- 
sociations, and in the infinite ways in which the 
peoples of the world break through national 
frontiers. This direct action by our people has 
much to do with the shaping of our foreign policy 
and the opinion of others as to our purposes and 
our aims. 

LEGISLATIVE PROBLEMS 

The great diversity of our effort is well illus- 
trated by a brief reference to the legislative prob- 
lems in the field of foreign affairs now before the 
Congress. The effort to strengthen the United 
Nations and its related agencies is represented by 
the charter of the International Trade Organiza- 
tion, by the Point 4 Program, by Palestine Kefugee 
legislation, by proposals to lift certain ceilings on 
United States contributions to international or- 
ganizations, by the Convention on Privileges and 
Inununities of the United Nations, by the proposed 
Genocide Convention, and others. 

Current legislative measures designed to 
strengthen the free world include renewal of the 
Mutual Defense Assistance Program, continua- 
tion of the Economic Cooperation Act, the charter 
of the Organization of the American States, and 
legislation to provide privileges and immunities 
for members of the Council of the Organization of 
American States. There are a considerable num- 
ber of items before the Congress which affect our 
bilateral relations with other countries, such as 
tuna conventions with Mexico and Costa Rica, 
legislation to provide aid to destitute Americans 
abroad, Ecuadoran earthquake relief, a number 
of agreements between ourselves and Mexico and 
Canada arising from our status as neighbors, and 
on through a l<mg list of others — many of a routine 
and undramatic character, but all filling an impor- 
tant place in the total impact of our foreign policy. 

In conclusion, Mr. Chairman, we shall follow 
with great attention what is .said both in these 
hearings and in the larger debate throughout the 
country. We shall take an active public part in 
bringing out the issues and identifying the major 
questions. As a part of our regular work in the 



Department we shall continually reassess the sit- 
uation with respect to international organizations 
and shall consult continuously with Members of 
the Congress, other parts of the executive branch 
and private persons and organizations. The pro- 
posals before j'ou represent a considerable matur- 
ing of thought over similar proposals of a year or 
two ago and we have no doubt but that this process 
of refinement and development will continue. It 
may be that some of the proposals which now 
appear to diverge in important respects may be 
joined in the course of further discussion. 

The President and the Congress will be giving 
the most serious and careful consideration to our 
attitude on amendments to the Charter of the 
United Nations in connection with the review 
called for in the Charter itself. . . . The issues 
which will be before us require no less care and 
attention; in fact, many of them are even more 
fundamental in character, than those which we 
confronted at the time of the drafting of the pres- 
ent Charter. Although it may now appear that 
the date originally indicated in the Charter (1955- 
56) is a long way off, the intervening time could 
be fully and profitably used. Nor can we be cer- 
tain that the question of Charter amendment 
might not be seriously raised before that date. 

We earnestly hope that those who are presently 
supporting important changes in our present 
structure of one kind or another will agree that 
foreign policy action cannot await a final deter- 
mination on forms of organization. We shall 
never be in a final or frozen position with respect 
to formal organization. 

Our present task stems from the heavy respon- 
sibilities which we, as a nation, have had thrust 
upon us — responsibilities to which we are un- 
accustomed, which we have not particularly 
sought, for which we have not been fully prepared. 
We must strongly support the United Nations as 
an indispensable oi'ganization of the entire world 
community and attempt to build there the world 
solidarity which will cause each member to recog- 
nize that loyalty to the Charter is an expression 
of realistic self-interest. We must, in our great 
regional associations, continue to work for the se- 
curity, stability, and well-being of free peoples. 
In our direct contacts with other nations and 
peoples, we must place our relations on a friendly 
basis, use our energy and our encouragement to 
strengthen the forces of democracy and to support 
American interests in every practicable way. 

Our idealism and our practical interests require 
the same policy and action on our part. The Ex- 
ecutive, the Congress, and the public have impor- 
tant roles to play. We shall need unit}' and per- 
severance, imagination, and steady nerves as never 
before. Surely, we shall find a way to act together 
as a nation even as we debate among ourselves 
what our further steps should be. This unity 
of our own can be translated info the unity of 
a free world, where we must look for our safety, 
our liberty, and our well-being. 



532 



Deparfmenf of State Bulletin 



High Frequency Broadcasting 



ANOTHER ATTEMPT AT WORLD AGREEMENT 



by Marie Louise Smith 



The third attempt since the end of the war 
to reach an international agreement on high fre- 
quency broadcasting will be made at the World 
High Frequency Broadcasting Conference in 
Florence, commencing April 1. This is one of a 
series of conferences provided for by the Inter- 
national Telecommunication Union (Itu) to 
deal with the assignment of high frequencies ^ to 
the short-wave broadcasting stations of the world 
and the conditions for their use. 

The problem of securing appropriate f requencie? 
in sufficient number to satisfy the requirements of 
even the principal international broadcasters, 
which was already serious 10 years ago, has in- 
creased both in magnitude and complexity since 
the end of World War II. 

Before the war less than 20 countries engaged 
in high frequency broadcasting. By the time of 
the Atlantic City conferences in 1947, 77 nations 
either were actively engaged in high frequency 
broadcasting or had indicated an intention to enter 
the field as soon as facilities could be erected and 
frequencies obtained for their operation. During 
the war years, hundreds of new stations were 
placed in operation all over the world without 
agreement or coordination between countries con- 
cerning the use of frequency assignments to avoid 
excessive interference between stations. Although 
some of these stations utilized frequencies desig- 
nated for high frequency broadcasting under the 



' The term "high frequency broadcasting" refers to 
radio transmissions in the 6-26 mc. region of the radio 
spectrum. Generally, high frequencies are \ised for inter- 
national broadcasting services such as the Voice of Amer- 
ica and the British Broadcasting Corporation. However, 
some are used for inK-rnal broadcasting by the U.S.S.R., 
India, and Brazil. Various technical, geographic, and 
economic factors account for this deviation from the nor- 
mal use of the long-distance frequencies. Earlier confer- 
ences on this problem were held in Atlantic City in 1047 
and in Mexico City from late 1948 through the early 
months of 1949. 



Cairo Radio Regulations of 1938, many others dis- 
regaixJed the Cairo list and utilized those which 
had been allocated for the use of other radio com- 
munication services. This haphazard develop- 
ment lias produced interference between stations 
to an extent that in some cases borders upon the 
intolerable. 

The need for international sharing of broad- 
casting frequencies was recognized at the Cairo 
radio conference in 1938 and a committee was ap- 
pointed to study the problem. Nothing construc- 
tive was done, however, in the matter of time 
sharing or the simultaneous sharing of short- 
distance frequencies under sound technical ar- 
rangements. 

A world broadcasting conference to deal with 
the problem did not take place because of the war. 
During the course of the war, efforts to obtain 
international cooperation in the use of broadcast- 
ing frequencies were confined to the groups of 
allied belligerents. Even these efforts ceased with 
the end of hostilities. Drastic corrective action 
is now required in the interest of all countries 
seriously concerned with this type of broadcasting. 

Tlie radio regulations annexed to the Interna- 
tional Telecommunication convention of Atlantic 
City of 1947 designate the blocks of frequencies 
that are now available for high frequency broad- 
casting and for each of the other communication 
services. The definitive task of assigning specific 
frequencies country by country and station by sta- 
tion was left to further international conferences 
to be convened for this purpose under the general 
regulations of the Ixr. Provision was made for 
the first of these conferences to meet in Atlantic 
City during August and September 1947 to de- 
velop a service agreement containing an accept- 
able frequency assignment plan and to decide upon 
appropriate measures for implementation of such 
a plan. 

Originally intended to be a full-scale conference 



April 3, J 950 



533 



to deal with numerous aspects of international 
high frequency broadcasting, Atlantic City turned 
out to be a limited agenda conference largely ex- 
ploratory in nature. The 70-odd countries repre- 
sented did recognize that if high frequency broad- 
casting is to continue to be an effective instrument 
of international information, the frequencies 
■would have to be assigned in accordance with a 
plan which would be acceptable to a majority of 
the nations of the world. The need for interna- 
tional frequency sharing was unanimously reaf- 
firmed as well as the need for the adoption of 
sound engineering and other teclmical standards 
governing the operation of high frequency broad- 
casting.^ 

It was decided at Atlantic City that a full-scale 
conference to undertake this task would be held at 
Mexico City beginning in October 1948. An 
agenda was adopted for this conference.^ Provi- 
sion was made for a five-country Planning Com- 
mittee, composed of representatives of the United 
States, United Kingdom, India, U.S.S.R., and 
Mexico, to review the statements of broadcasting 
frequency requirements submitted by the countries 
at Atlantic City and to prepare a draft interna- 
tional high frequency broadcasting plan. The 
committee also was to prepare recommendations 
regarding the appropriate organization to ad- 
minister the plan and the date it should go into 
effect. 

The Planning Committee held two sessions, the 
first in Geneva from March 22 to May 29, 1948, and 
the other in Mexico City from September 13 to 
October 22, 1948. It assembled the requirements 
submitted by the Itu countries and made technical 
studies but could not agree upon a basis for assign- 
ing frequencies, principally because the require- 
ments submitted totaled about 3 times the fre- 
quency space available for assignment. The vari- 



^ Reservations to the final report of the Atlantic City 
Broadcasting Conference were talien by Portugal, France, 
and the U.S.S.R. Nevertheless, it was felt that the con- 
ference was successful and that the principles established 
and conclusions reached would go far toward helping 
formulate an international plan for high frequency broad- 
casting. 

' The agenda for the Mexico City conference included : 
1. consideration of a draft assignment plan prepared in 
accordance with the decisions of the Atlantic City con- 
ferences ; 2. consideration of the question of priorities with 
due regard to any needs for adjustment brought to light 
by the work of the Planning Committee ; .3. reexamination 
of general and technical principles and data in the light 
of any new developments since the Atlantic City confer- 
ence, with a view to establishing the basis of a final fre- 
quency assignment plan ; 4. preparation of the final plan 
for the assignment of frequencies to specific high frequency 
broadcasting stations; 5. consideration of nietliods to be 
adopted and steps to be taken to implement this plan ; 6. 
consideration of future lines of development of high fre- 
quency broadcasting services and technical methods of pro- 
gramme exchange, in the light of the latest technical 
advances; 7. consideration of documents left pending of 
receiving incomplete consideration at the Atlantic City 
conference. No changes were made in the agenda during 
the course of the Mexico City conference. 



ous countries requested a total of approximately 
15,000 cliannel hours whereas the total number of 
channel liours available for assignment in the 
bands alloted is approximately 6,500 during rela- 
tively favorable propagation periods. Many of 
the requirements submitted did not represent 
broadcasting then on the air or which might be 
expected to begin within the near future; instead, 
they represented long-range hopes and aspira- 
tions. Some countries inflated requirements in 
order to be in a more favorable bargaining posi- 
tion when negotiations commenced on the assign- 
ments to specific countries and stations. The Pre- 
paratory Committee was able to deal with a draft 
frequency assigmnent plan for only one of the 
nine phases of the sunspot cycle. It never did get 
to the questions of administration or implementa- 
tion date for an assigmnent plan. 

Approximately 65 countries were represented at 
the second International High Frequency Broad- 
casting Conference, which met in Mexico City 
from October 22, 1948, through April 9, 1949. The 
conference was stormy from the outset and 
dragged far beyond the original target date for 
termination. It was virtually impossible to find 
any generally acceptable basis for formulation of 
a frequency assignment plan. The difficulties en- 
countered by the Planning Committee were in- 
tensified in deciding which of the requirements 
submitted by the participating countries should 
be included in such a plan. The differences in 
views concerning the most appropriate approach 
to be used in meeting this basic problem consti- 
tuted the major stumbling block of both the 
Planning Committee meetings and the Mexico 
City conference. The difficulties were further 
aggravated by the undercurrent of dissension in 
trying to reconcile the demands of the larger users 
with the desires of the small powers. 

A virtual stalemate developed over the diver- 
gent proposals advanced by the United States and 
the U.S.S.E. Neither met with general approval 
although for quite different reasons. The Soviet 
plan was particularly favorable to the Soviet bloc 
and quite unfavorable to the non-Soviet coun- 
tries — especially the smaller ones. Obviously, it 
would have given the Soviets a dominant position 
in the propaganda field and was aimed at political 
ends broader than the scope of the conference. 
On the other hand, the United States contended 
that in order to satisfy the largest number of 
countries, it was essential that the big users of the 
frequency hours accept assignments representing 
drastic reductions in their submitted requirements. 
This arrangement would have necessitated sub- 
stantial cut back in the requirements of the 
United States, United Kingdom, U.S.S.R., France, 
India, and the colonial possessions and territories. 
Not unexpectedly, this plan did not receive the 
support of the large users. The designation of 
an implementing organization proved to be ex- 
tremely contentious, and after much debate, it was 



534 



Department of Sfafe Bulletin 



decided to defer action on this issue to the Admin- 
istrative Council of the Itu. 

The iifrreenient finally put to<rcther at Mexico 
City incliuled a basic plan applicable to a 3-month 
period in the 11-year sunspot cycle; provided 
for a Technical Plan Committee to project it into 
an over-all progi-am covering a 5-year period, 
maintainiTitr the same proportional relationship 
of assi«!;nments between all the countries covered 
by the basic plan ; and provided for the resump- 
tion of the conference at a later date in Italy to 
approve or disapprove the additional phases de- 
veloped by the Committee. 

The final act, which covered a frequency assign- 
ment plan for the June median season, was signed 
by r)0 countries — the majority with reservations. 
The United States did not accept the agreement. 
Other countries abstaining were the U.S.S.R., 
Bvelorussia. the Ukraine, Poland, Czechoslovakia, 
Htungary. Rumania, Yugoslavia, Albania, Fin- 
land, Chile, Guatemala, El Salvador, Burma, and 
Siam. The vote for United States territories was 
withheld. 

Although the United States had taken the lead 
in advocating a frequency sharing plan based on 
sound engineering standards and within the 
framework of the Atlantic City agreements, we 
did not feel that the plan agreed upon for the 
June median afforded an equitable or satisfactory 
basis for a full agreement. An analysis of the 
plan shows conclusively that our broadcasting in- 
terests are not protected, that the June median 
plan does not provide an equitable basis for a com- 
plete plan, and that the United States does not 
receive a broadcasting service comparable to that 
of any other country. 

The relative channel hour assignments provided 
for the major countries are as follows: the 
U.S.S.R 660 (plus 120 for the Ukraine and 
Byelorussia) ; the United Kingdom 437 ; India 
350 ; France 235 ; and the United States 202. The 
fact that a considerable number of these channel 
hours are assigned to the 21 mc. band does not 
eliminate the inequity of the Soviet assignments. 
The assignment of 202 frequency hours to the 
United States represents a reduction of 30 percent 
from the present level of frequency usage and 
almost a 50 pei'cent reduction from our require- 
ments as originally submitted. Adequate provi- 
sion is not made for expansion of our present 
reduced program services and fails to provide fre- 
quencies for private broadcasting authorized un- 
der existing legislation. Finally, it fails to meet 
minimum United States requirements for relay 
services from Manila, Tangier, Munich, and 
Hawaii. 

The failure of the Mexico City conference to 
complete its assigned tasks, after the impetus of 
the Atlantic City accomplishments, has provoked 
concern among leaders in this field, who have 
worked zealously toward closer international col- 
laboration in communication matters. However, 

April 3, 1950 



it should be borne in mind that high frequency 
broadcasting is one of the newer services, and its 
potentialities aiul implications are not yet fully 
appreciated even by other radio services. This 
action was the first effort on a world-wide basis to 
bring order into a service that has developed pretty 
much in an unrestricted fashion. The technical 
complexities of the undertaking are of astounding 
proportions : Political elements were also brought 
into full play in an essentially technical confer- 
ence — particularly in the positions taken by the 
Soviet bloc and by the delegations of other coun- 
tries with respect to the Soviet bloc. Finally, con- 
tinued Soviet jannning both of the Voice of 
America and BBC broadcasting throughout the 
confei'ence was not conducive to a harmonious 
atmosphere for an undertaking requiring consid- 
erable compromise and understanding on all sides. 
The extensive educational value of the work of the 
conference is conceded as an important step in 
the efforts to arrive at a genuinely sound basis for 
use of the high frequencies in broadcasting. 

If the deficiencies in the Mexico City plan could 
be corrected in the plans for other seasons of the 
sunspot cycle, the United States would not view 
the situation in such a serious vein. However, it 
has been projected, unmodified by the Technical 
Plan Committee, into a final plan to cover a 5-year 
period. This plan, which may serve as the basis 
for the Florence conference, is considered very 
unsatisfactory even by most of the countries rep- 
resented on the committee. The United States 
was not eligible for participation as a member of 
the committee by virtue of having neither signed 
nor approved the Mexico City agreement. Our 
observers followed closely every working session 
of the Committee, which met in Paris from June- 
December 1949. 

Throughout these successive efforts, the United 
States has remained firm in the policy of support- 
ing and even urging planned usage of the high 
frequency broadcasting band on the basis of equi- 
table and practical distribution of channel hours. 
Our deep interest and willingness to cooperate in 
all efforts to formulate a frequency assignment 
plan for high frequency broadcasting purposes 
has been repeatedly affirmed. 

Both the Mexico City and Florence conferences 
are an integral part of the Atlantic City concept 
for planned usage of the radio spectrum to which 
the United States stands firmly committed. Be- 
cause of the increasing significance of high fre- 
quency broadcasting in our foreign relations, we 
have a vital stake in achieving concrete results in 
the form of an acceptable plan. It is felt that if 
there is no broadcast assignment plan, the whole 
structure of international cooperation in the tele- 
communication field, as embodied in the Atlantic 
City Telecommunication Convention of 1947, 
might be jeopardized. A fresh perspective by the 
countries represented at the Florence meeting 
could contribute materially to some practical co- 
operative arrangement in this field. 

535 



U.S. Delegations 

to International Conferences 

Inter-American Economic and Social Council 

Announcement was made on March 1 of the 
United States delegation to the extraordinary ses- 
sion of the Inter-American Economic and Social 
Council which convened at Washington on March 
20.1 

The President has now designated Walter J. 
Donnelly, United States Ambassador to Venezu- 
ela, as an additional alternate delegate to this 
meeting. The United States delegation to this 
session is composed also of the following : 

Advisers 

James C. Corliss, Assistant Economic and Finance Ad- 
viser, Bureau of Inter-American Affairs, Department 
of State 

Isaiaii Frank, Adviser, Commercial Policy Staff, Office of 
International Trade Policy, Office of the Assistant 
Secretary for Economic Affairs, Department of State 

Louis J. Halle, Special Adviser on Technical Cooperation, 
Bureau of Inter-American Affairs, Department of 
State 

John S. Hooker, United States Alternate Executive Di- 
rector, International Bank for Reconstruction and 
Development and International Monetary Fund 

Edmund H. Kellogg, Acting Officer in Charge, Economic 
Affairs, Office of United Nations Economic and Social 
Affairs, Bureau of United Nations Affairs, Depart- 
ment of State 

Herbert K. May, Acting Chief, Latin American Section, 
Division of International Finance, Department of the 
Treasury 

Dillon S. Myer, President, Institute of Inter-American 
Affairs 

George N. Monsma, Officer in Charge, International Or- 
ganization Affairs, Bureau of Inter- American Affairs, 
Department of State 

Thomas D. O'Keefe, Special Assistant to the Secretary, 
Department of Commerce 

Fred J. Kossiter, Associate Director, Office of Foreign 
Agricultural Relations, Department of Agriculture 

Walter C. Sauer, Vice President, Export-Import Bank 
of Washington 

Leslie A. Wheeler, Director, Interim Office for Technical 
Cooperation and Development, Office of the Assistant 
Secretary for Economic Affairs, Department of State 

Ivan B. White, Economic and Finance Adviser, Bureau 
of Inter-American Affairs, Department of State 

Seoretarj/ 

David DeL. Jones, Division of International Conferences, 
Bureau of United Nations Affairs, Department of 
State. 



ICAO Telecommunication Meeting 

On March 21 the Department of State an- 
nounced tlie United States delegation to the Inter- 
national Civil Aviation Organization (Icao) 
Special African-Indian Ocean and Middle East 
Regional Communication Conmiittee Meetings on 
Aeronautical Fixed Telecommunication Services 
and on Frequency Assignment Planning opening 
at Paris. The delegation is as follows : 



' Bulletin of Mar. 13, 1950, p. 417. 



Delegation and Chairman 

Harlan E. Hall, Aeronautical Communications Specialist, 
Civil Aeronautics Administration, Department of 
Commerce 

Alternate Delegate and Vice-Chairman 

James D. Durkee, Chief, International Branch, Aviation 
Division, Federal Communications Commission 

Advisers 

Alick B. Currie, Aeronautical Communications Specialist, 
Civil Aeronautics Administration, Department of 
Commerce 

Capt. Kenneth R. Edwards, USAF, Headquarters, Military 
Air Transport Service, Andrews Air Force Base 

Floyd Hermansen, Pan American World Airways, Inc., 
LaGuardia Airport, New York City 

Capt. William N. Manley, USAF, Assistant Communica- 
tions Officer, Headquarters USAFE, Wiesbaden, 
Germany 

Col. David C. G. Schlenker, USAF, Communications Offi- 
cer, Headquarters USAFE, Wiesbaden, Germany 

Capt. Justus W. Smith, USAF, Assistant Communications 
Officer, Headquarters USAFE, Wiesbaden, Germany 

These special meetings are being convened by the 
IcAO Council and are expected to be in session ap- 
proximately 3 weeks. The United States Govern- 
ment is vitally interested in these combined 
meetings because United States aircraft operate 
in the African-Indian Ocean and Middle East 
regions. 

On the agenda for the meeting on fixed telecom- 
munication services are the compilation of infor- 
mation concerning aircraft movement in and 
through the two regions and determination of 
the deficiencies in the existing aeronautical fixed 
telecommunications network. The Frequency As- 
signment Planning Meeting will consider a coor- 
dinated plan of radio frequency assignments to 
aeronautical stations serving the major world air 
routes traversing the regions and a plan of radio 
frequency assignments for special aeronautical mo- 
bile services. 



Commission on Human Rights 

On March 22, the Department of State an- 
nounced that Mrs. Franklin D. Roosevelt, the 
United States representative on tlie United Nations 
Commission on Human Rights will attend the 
sixth session of the Commission, scheduled to meet 
at Lake Success, March 27-May 20. Advisers 
designated to assist this Government's represen- 
tative are : 

Herzel Plaine, Special Assistant to the Attorney General, 
Department of Justice 

James Simsarian, Office of United Nations Economic and 
Social Affairs, Department of State 

Marjorie Whiteman, Office of the Legal Adviser, Depart- 
ment of State 

The Conunission at its forthcoming session will 
have as its major objective the revision of the draft 
International Covenant on Human Rights and the 
preparation of measures for its implementation. 



536 



Department of State Bulletin 



Terms of Reference for U.N. Representative 
in lndia-Pal(istan Negotiations 



U.N. doc. S/14fi9 

Resolution adopted Mar. 14, 1950 

Having received and noted the reports of the United 
Nations Commission for Indiu and Pakistan, established 
by the resolutions of 20 January and 21 April 1948; 

HA^^No ALSO kecetved and noted the report of General 
A. G. L. McNaughton on the outcome of liis discussions 
with the representatives of India and Pakistan which 
were initiated in pursuance of the decision taken by the 
Security Council ou 17 December 1949; 

Commending the Governments of India and Pakistan 
for their statesmanlike action in reaching the agree- 
ments embodied in the United Nations Commission's 
resolutions of 13 August 1948 and 5 January 1949 for a 
cease fire, for the demilitarization of the State of Jammu 
and Kashmir and for the determination of its final dis- 
position in accordance with the will of the people through 
the democratic method of a free and impartial plebiscite 
and commending the parties in particular for their action 
Id partially implementing these resolutions by 

(1) The cessation of hostilities effected 1 January 1949 

(2) The establishment of a cease fire line on 27 July 
1949 and 

(3) The agreement that Fleet Admiral Chester W. 
Nimitz shall be Plebiscite Administrator, 

Considering that the resolution of the outstanding 
difficulties should be based upon the substantial measure 
of agreement on fundamental principles already reached, 
and that steps should be taken forthwith for the demili- 
tarization of the State and for the expeditious determina- 
tion of its future in accordance with the freely expressed 
will of the inhabitants ; 

The Securitij Council, 

1. Calls upon the Governments of India and Pakistan 
to make immediate arrangements, wthout prejudice to 
their rights or claims and with due regard to the require- 
ments of law and order, to prepare and execute within a 
period of five months from the date of this resolution a pro- 
gramme of demilitarization on the basis of the principles 
of paragraph 2 of General McNaughton's proposal or of 
such modifications of those principles as may be mutually 
agreed ; 

2. Decides to appoint a United Nations Representative 
for the following purposes who shall have authority to 



perform his functions in such place or places as he may 
deem appropriate : 

(a) to assist in the preparation and to supervise the 
implementation of the programme of demilitarization 
referred to above and to interpret the agreements reached 
by the parties for demilitarization, 

(b) to place himself at the disposal of the Govern- 
ments of India and Pakistan and to place before those 
Governments or the Security Council any suggestions 
which, in his opinion, are likely to contribute to the 
expeditious and enduring solution of the dispute which 
has arisen between the two Governments in regard to the 
States of Jammu and Kashmir, 

(c) to exercise all of the powers and responsibilities 
devolving upon the United Nations Commission by reason 
of existing resolutions of the Security Council and by 
reason of the agreement of the parties embodied in the 
resolutions of the United Nations Conmiission of 13 Au- 
gust 1948 and 5 January 1949, 

(d) to arrange at the appropriate stage of demili- 
tarization for the assumption by the Plebiscite Adminis- 
trator of the functions assigned to the latter under 
agreements made between the parties, 

(e) to report to the Security Council as he may con- 
sider necessary submitting his conclusions and any 
recommendations which he may desire to make ; 

3. Requests the two Governments to take all necessary 
precautions to ensure that their agreements regarding the 
cease fire shall continue to be faithfully observed, and 
calls upon them to take all possible measures to ensure 
the creation and maintenance of an atmosphere favourable 
to the promotion of further negotiations ; 

4. Extends its best thanks to the members of the United 
Nations Commission for India and Pakistan and to Gen- 
eral A. G. L. McNaughton for their arduous and fruitful 
labours ; 

5. Agrees that the United Nations Commission for India 
and Pakistan shall be terminated, and decides that this 
shall take place one month after both parties have in- 
formed the United Nations Representative of their ac- 
ceptance of the transfer to him of the powers and 
re.sponsibilities of the United Nations Commission re- 
ferred to in paragraph 2(c) above. 



April 3, 1950 



537 



The United States in the United Nations 



[March 25-31] 



Transport and Communications Commission 

Opening its fourth session at Lake Success on 
March 27, the Transport and Communications 
Commission approved a 12-item agenda, inchiding 
such subjects as existing barriers to the inter- 
national transport of goods; the unification of 
maritime tonnage measurement; coordination of 
inland transport; and action in the field of inter- 
national road transport. J. J. Oyevaar (Nether- 
lands) was reelected chairman. At the opening 
of the first meeting the Soviet representative 
moved that the "Kuomintang Representative" be 
expelled. The chairman ruling that the motion 
was out of order was sustained; whereupon, the 
U.S.S.R., Czechoslovak, and Polish representa- 
tives walked out. 

Two proposals concerning the question of bar- 
riers to the international transport of goods were 
accepted in principle by the Commission. One in- 
volved a suggestion that the Secretary-General 
indicate to governments the desirability of pro- 
ceeding, on national basis, with consideration of 
customs simplification measures. The second ex- 
pressed approval of the work of the International 
Civil Aviation Organization (Icao) in reducing 
barriers to international transport by air. Gov- 
ernments would be urged to take further action 
wherever possible, to incorporate in their national 
regulations Icao's standards and recommended 
practices in this respect, and to eliminate as many 
deviations as possible. 

Turning to the four maritime items, the Com- 
mission noted the Secretariat's report dealing with 
the pollution of sea water by oil and agreed to 
ask the Secretariat to draft a resolution for adop- 
tion by the Commission, asking governments 
whether, pending the coming into being of the 
Intergovernmental Maritime Consultative Organ- 
ization (Imco), further steps should be taken to 
deal with this problem, including the possible con- 
vening of a group of experts. The resolution 
would also ask the views of governments as to 
whether the League of Nations draft convention 
is adequate as a basis for consideration and if the 
oil ])roblem might be expanded to include the 
pollution of sea water by atomic waste when this 
is used by ships as a means of propulsion. 

Noting that only tlie United Kingdom, Canada, 
and the Netherlands have so far ratified the Imco 
Convention, the Connnission agreed to a resolu- 
tion expressing the hope that Imco would soon 



be established. Twenty-one countries "of which 
seven shall have a total tonnage of not less than 
1 million gross tons of shipping" must accept the 
Convention before the Organization can come into 
being. The item on "Unification of Maritime 
Tonnage Measurement" was referred to the Imco. 
Since there were only two replies to the Secretary- 
General's request for views on "Problems of Mari- 
time Shipping Affecting Latin America," this item 
was dropped from the agenda, with the under- 
standing that the Economic and Social Council 
would be advised that the matter could best be 
handled by the Economic Commission for Latin 
America or some other inter- American body. 

After discussing the problem of coordinating 
inland transport, the Commission agreed in prin- 
ciple to recommend that the regional commissions 
continue their activities in this field, and also to 
ask the Secretariat to continue its study and report 
to the next session, wliether the governments 
should be approached directly. 

The Commission agi'eed to request the Secre- 
tary-General to appoint a group of not more than 
seven experts to study the problem of establishing 
a common world-wide system of road signs and 
signals, to prepare a draft convention embodying 
such a system, and to report to the next session. 
The Commission also expressed satisfaction with 
the road traffic convention, the protocol on road 
signs and signals, and the three customs conven- 
tions which had been concluded by the United Na- 
tions Conference on Road and Motor Transport. 

After noting the Secretary-General's report on 
the progi-ess made bv member governments in re- 
ducing and simplifying passport and fi'ontier 
formalities by means of bilateral and multilateral 
agreements, the Commission accepted the Secre- 
tariat's suggestion that a further inquiry on this 
matter be made of the member governments be- 
fore the next session of the Commission. 

Commission on Human Rights 

Tlie sixth session of the 18-meinber Commission 
on Human Rights opened at Lake Success March 
27. The Commission unanimously reelected Mrs. 
Franklin U. Roosevelt as chairman and adopted 
its agenda of 15 items. 

At the oi)ening of the session, the Soviet repre- 
sentative moved that the "re])resentative of the 
Kuomintang" be excluded. Following a vote in 
which the Commission upheld the chairman's rul- 
ing that tlio motion was out of order, the Soviet 
representative declared he would not participate 



538 



Department of State Bulletin 



in the work of the session nor would liis govern- 
ment recofrni/'P the decision of the Conunission 
and tlien left the chamber. 

Prior to its conveninji, Mrs. Roosevelt enrpha- 
sized the importance of this session of the Com- 
mission. She explained that the Commission 
would have before it the draft of an International 
Covenant on Human Rifilits and the comments of 
member governments on tliis draft. The United 
States hoped, she said, that tlie Commission could 
complete the Covenant at this session, so that it 
could be forwarded for approval to the summer 
meeting of the Economic and Social Council and 
to the General Assembly in the fall and be placed 
before all governments for consideration and rati- 
fication before the end of this year. 

"The Covenant," Mrs. Roosevelt continued, "is 
being drafted in the form of a treaty to be legally 
binding on countries which ratify it. It will give 
substance to the fii"st fifteen basic civil and politi- 
cal rights set forth in the Universal Declaration 
of Human Rights approved by the General Assem- 
bly in December 1948. The Declaration set an 
objective; the Covenant moves toward that 
objective. The nations which sign and ratify the 
Covenant will pledge themselves, in the most sol- 
emn public fashion, to enforce certain standards 
for the people in their countries." 

International Refugee Organization 

The General Council of the International Refu- 
gee Organization (Iro) concluded its fifth session 
on March 23 at Geneva. At the meeting, the Di- 
rector-General reported that negotiations were 
concluded, particularly with the Western Euro- 
pean governments, for the transfer, before the 
final termination of all Iro services on March 31, 
1951, of Iro responsibilities regarding refugees 
and displaced persons remaining in their terri- 
tories. The Council, in the interest of securing 
the maximum resettlement of approximately 150,- 
000 persons in the extended period after June 30, 
1950, authorized the Director-General within the 
limits of available resources to maintain in camps 
pending resettlement those for whom clear pros- 
pects of resettlement were available and who 
would qualify under continuing resettlement 
schemes. The Council also voted to send a com- 
mimication to the United Nations stating that 
certain provisions of the Iro Constitution, regard- 
ing the protection of refugees under the auspices 
of the High Commissioner for Refugees, who will 
assume office on January 1, 1951, appeared no 
longer applicable in the light of the present day 
situation. This communication would urge that 
the High Commissioner be instructed not to apply 
the listed provisions of the Iro Constitution in the 
performance of his functions and further not to 
apply any decisions previously made by the Iro 
restricting its services to refugees and displaced 



persons for purely financial or administrative 
reasons. 

The Council examined the financial report and 
urged the administration and the external audi- 
tors to present, in the future, more readable 
reports wliich would show currently the exact 
iiiumcial position of the organization in order that 
the Council might insure that all of its available 
resources would be applied to the tasks facing Iro 
before its final termination on March 31, 1951. 

At the meeting, tlie Director-(icneral rejwited 
substantial progress in making provisions for the 
permanent care of those i-ef ugees who will require 
institutional treatment after the termination of 
Iro. In this connection, the French Government 
announced its willingness to accept 900 aged per- 
sons now resident in Germany for permanent care. 

Trusteeship Council 

After nearly 4 weeks of consideration, the Trus- 
teeship Council completed, on March 31, its third 
reading of the draft statute for Jerusalem and 
scheduled the final vote on the statute as a whole 
for April 4. Article 41, the last one to be ap- 
proved, provides that the statute will come into 
force at a date to be determined by a resolution 
of the Council. This text, proposed by Belgium, 
was favored by the United States, Australia, the 
Dominican Republic, and France ; it was opposed 
only by Iraq, but Argentina, China, New Zealand, 
the Philippines, and the United Kingdom ab- 
stained in the vote. 

On March 28, the Council adopted an omnibus 
resolution sponsored jointly by the United States 
and Iraq relating to five General Assembly resolu- 
tions concerning Trust Territories. This resolu- 
tion takes note of the General Assembly's recom- 
mendations on petitions and visitinf^ missions and 
political, economic, social, and educational ad- 
vancement in the Trust Territories. It defers 
action on migrant labor and penal sanctions pend- 
ing expert advice from the International Labor 
Organization, recommends abolition or corporal 
punishment and whipping, urges that the adminis- 
tering authorities insure that no discriminatory 
laws or practices exist in the Trust Territories, 
and that steps be taken to implement the Assembly 
resolutions in question. 

A Chinese-Philippine proposal that the United 
Nations flag be flown over Trust Territories side 
by side with the flag of the administering authority 
was rejected on March 30. The United States, the 
Dominican Republic, and Iraq, joined the sponsors 
in supporting it, while Argentina abstained, and 
Australia, Belgium, France, New Zealand, and 
the United Kingdom voted negatively. 

The annual reports on the Trust Territories of 
the Cameroons under British and French adminis- 
tration were given final approval by the Council 
on March 31. 



April 3, 1950 



539 



Calendar of International Meetings' 



Adjourned During March 






United Nations: 






Economic and Social Council: Tenth Session 


Lake Success 


Feb. 7- Mar. 6 


Conference on Declaration of Death of Missing Persons .... 


Lake Success 


Mar. 15- 


IcAO (International Civil Aviation Organization) : 






Meteorological Division: Third Session 


Paris 


Feb. 14-Mar. 25 


Ilo (International Labor Organization) : 






Governing Body: 111th Session 


Geneva 


Feb. 27-Mar. 11 


International Conference of Experts on Pneumoconiosis .... 


Sydney 


Feb. 28-Mar. 1 1 


Itu (International Telecommunication Union) : 






Technical Plan Committee of the International High Frequency 


Florence 


Mar. 1-31 


Broadcasting Conference: Second Session. 






Iro (International Refugee Organization) : 






General Council: Fifth Session 


Geneva 


Mar 8-23 


Executive Committee: Seventh Session 


Geneva 

London 


Mar 14-22 


Wheat Council, International: Second Session 


Mar. 13-15 


In Session as of March 31, 19S0 






Council of Foreign Ministers: 






Deputies for Austria 


London 


Jan 9- 


United Nations: 






Trusteeship Council: Sixth Session 


Goneva. . . 


Jan 19- 


Economic and Social Council: 






Transport and Communications Commission: Fourth Session. 


Lake Success 


Mar. 27- 


Human Rights Commission: Sixth Session 


Oeneva ... .... 


Mar 27- 


IcAO (International Civil Aviation Organization): 






Council: Ninth Session 


Montreal 

Paris 


Jan 24- 


Special African-Indian Ocean and Middle East, Regional Com- 


Mar. 21- 


munications Committee. 






Port-au-Prince Bicentennial Exposition 


Port-au-Prince 


Feb. 12- 


Gatt (General Agreement on Tariffs and Trade) : 






Fourth Session of Contracting Parties 


Geneva 


Feb 2a- 


Technical and Economic Assistance Mission 


Southeast Asia 

The Hague 


Feb 2&- 


International Court of Justice 


Mar. 1- 


Ilo (International Labor Organization) : 




Committee of Experts on the Application of Conventions . . . 


Geneva 


Mar. 20- 


Inter-American Economic and Social Council: Extraordinary Ses- 


Washington 


Mar. 20- 


International Tin Study Group: Fifteenth Session 


Paris 


Mar. 22- 


Itu (International Telecommunication Union) : 






International Radio Consultative Committee: Study Group 11 


New York, Philadelphia, 




(Television) (Demonstrations) . 


Washington 


Mar. 27- 


Scheduled April 1-June 30, 1950 






Itu (International Telecommunication Union): 






Third International High Frequency Broadcasting Conference . 


Florence 


Apr. 1- • 


International Radio Consultative Committee: 






Study Group 11 (Television) (Demonstrations) 


France 


Apr. 20- 


Study Group 11 (Television) (Demonstrations) 


Netherlands 


Apr. 24- 


Study Group 11 (Television) (Demonstration.s) 


United Kingdom 


Apr. 27- 


Study Group 11 (Television) (Formal Meeting) 


United Kingdom 


May 5- 



Prepared in the Division of International Conferences, Department of State. 



540 



DepartmenI of Sfate Bulletin 



Calendar of International Meetings — Continued 



Scheduled April 1-June 30, 1950— Continued 
Fao (Food aiui Agriculture Organization): 

Far East Technical Meeting on Timber Grading and Standard- 
ization. 

International Poplar Commission: Fourth Session 

Latin American Conference on Control of Infestation of Stored 
Products. 

Indo-Pacific Fisheries Council 

Council: Ninth Session 

Latin American Nutrition Conference: Second Session 

International Phytopathological Conference 

United Nations; 

Economic and Social Council: 

Social Commission: Sixth Session 

Economic Commission for Europe: Timber Committee . . . 

Commission on Narcotic Drugs: Fifth Session 

Subcommission on Economic Development: Fourth Session . 
Economic Commission for Asia and the Far East — Subcom- 
mittee on Iron and Steel: Third Meeting. 

Technical Assistance Conference 

Subcommission on Employment and Economic StabiUty: 

Fourth Session. 
Commission on the Status of Women: Fourth Session . . . 

Statistical Commission: Fifth Session 

Economic Commission for Asia and the Far East: Committee 

on Industry Trade. 
Subcommission on Freedom of Information and of the Press: 

Fourth Session. 
Economic Commission for Asia and the Far East: Sixth 
Session. 

Population Commission: Fifth Session 

Economic Commission for Latin America: Third Session . . 

Economic Commission for Europe: Fifth Session 

Economic Commission for Asia and the Far East: Committee 
of the Whole. 

Advisory Council for Libya 

Relief and Works Agency for Palestine Refugees in the Near 

East: Advisory Commission: First Session 

International Law Commission: Second Session 

Permanent Central Opium Board: 55th Session 

Narcotic Drugs Supervisory Body: 34th Session 

Trusteeship Council: Seventh Session 

Architects, Seventh Pan American Congress of 

ICAO (International Civil Aviation Organization) : 

Caribbean, South American and South Atlantic Frequency 
Meetings. 

Second Caribbean Regional Air Navigation Meeting 

Southeast Asia Frequency Meeting 

Legal Committee: Sixth Session 

Assembly: Fourth Session 

Council: Tenth Session 

Ilo (International Labor Organization) : 

Industrial Committee on Chemicals: Second Session 

Migration, Preliminary Meeting of Representatives of Govern- 
ments and Specialized Agencies on. 

Governing Body: 112th Session 

Thirty-third International Labor Conference 

Milan International Trade Fair 

Lyon International Fair 

•Tentative 



Dalat, Indochina . 

Geneva 

San Jos6 

Cronulla, Australia 

Rome 

Rio de Janeiro . . 
Rio de Janeiro . . 

Lake Success . . . 

Geneva 

Lake Success . . . 
Lake Success . . . 
Calcutta 

Lake Success . . . 
Lake Success . . . 

Lake Success . . . 
Lake Success . . . 
Bangkok 

Montevideo . . . 

Bangkok 

Lake Success . . . 
Montevideo . . . 

Geneva 

Bangkok* . . . . 

Geneva 

Geneva 

Geneva 

Geneva 

Geneva 

Lake Success . . . 
Habana 

Habana 

Habana 

New Delhi . . . 
Montreal .... 
Montreal .... 
Montreal .... 

Geneva 

Geneva 

Geneva 

Geneva 

Milan 

Lyon 



Apr. 3- 



Apr. 18- 


Apr. 17- 


Apr. 17- 


May 8- 


June 5- 


June 5- 


Apr. 3- 


Apr. 3- 


Apr. 10- 


Apr. 17- 


April 


April or May 


May 8*- 


Mav 8- 


May 8- 


May 9- 



Mav 15- 



May 16- 



May 22- 


May 29- 


May 29- 


M ay- 


Apr. 4 


April 17 


June 5- 


June 14*- 


June 22- 


June 


Apr. 10- 


Apr. 11- 


Apr. 11- 


Apr. 18- 


May 30- 


May 30- 


May 


Apr. 11- 


Apr. 25- 


May 26- 


June 7- 


Apr. 12- 


Apr. 15- 



April 3, ?950 



541 



Calendar of International Meetings — Continued 



Scheduled April 1-June 30, 1950 — Continued 

Rhine, Meeting of the Central Commission for Navigation of the . 

Health Congress of the Royal Sanitary Institute 

South Pacific Conference: First Session 

Brussels International Fair 

Broadcasting Conference, Third North American Regional: 
Second Session. 

Sesquicentennial Celebration, National Capital 

Cotton Standards Agreement Meeting, Universal 

Municipalities, Third Meeting of the Inter-American Con- 
gress of. 

Rubber Study Group: Seventh Session 

Who (World Health Organization) : 

Third World Health Assembly 

Executive Board: Sixth Session 

Seed Testing Association, Congress of the International . . . . 

South Pacific Commission: Fifth Session 

Obstetrics and Gynecology, Fourth American and Third Inter- 
national Congresses on. 
UNESCO (United Nations Educational, Scientific and Cultural 
Organization) : 

Executive Board: 20th Session 

General Conference: Fifth Session 

Seminar on Adult Education 

Upu (Universal Postal Union) : Meeting of the Executive and 

Liaison Committee. 
Cotton Advisory Committee, International: Ninth Meeting. . . . 

Canadian International Trade Fair, Third 

North Atlantic Council: Fourth Session 

Sanitary Organization, Pan American: Tenth Meeting of the 

Executive Committee. 
Deaf and Dumb, International Congress for Education of the . . . 
Weights and Measures, Biennial Session of the International 
Committee on. 

Ornithological Congress, Tenth International 

Electric Systems, International Conference on Large High Ten- 
sion: Thirteenth Biennial Session. 

Housing and Town Planning, International Congress for 

Art, 25th Biennial Exhibition of 

Caribbean Commission: Tenth Meeting 

Dental Schools, Meeting of American Association of 



Strasbourg 

Eastbourne, England . 
Suva, Fiji Islands. . . 

Brussels 

United States .... 

Washington 

Washington 

New Orleans 

Brussels 

Geneva 

Geneva 

Washington 

Suva, Fiji Islands. . . 
New York City . . . 

Florence 

Florence 

Austria 

Montreux 

Washington 

Toronto 

The Hague 

Washington 

Groningen, Netherlands 
Sevres 

Upsala, Sweden. . . . 
Paris 

Europe 

Venice 

Martinique 

Toronto 



Apr. 18- 
Apr. 24-28 
Apr. 24- 
Apr. 29- 
April 

April 
May 1- 
May 1- 

May 2- 

May 7- 
May 
May 8- 
May 13- 
May 14- 



May 15- 
May 22- 
June 18- 
May 15- 

May 22- 

May 29- 

May- 

May- 

June 5- 
June 6- 

June 10- 
June 29- 

June 
June 
June 
June 



THE CONGRESS 



Legislation 

Reports To Be Made To Congress. Letter from the Clerk 
of the House of Representatives transmitting a list of 
reports which it is the duty of any ofliccr or department 
to make to Congress. H. Doc. 415, 81st Cong., 2d sess. 
37 pp. 

Twenty-ninth Report to Congress On Lend-Lease Oper- 

542 



ations. Message from the President of the United States 
transmitting the twenty-ninth report to the Congress on 
lend-lease operations, for the quarter ending June 30, 1949. 
Lend-Lease Settlement with Etliiopia, Final Lend-Lease 
Payments by Dominican Republic and Venezuela, Patent 
Interchange with United Kingdom, Lend-Lease Fiscal 
Operations March 11, 1941, through June 30, 1949. H. Doc. 
436, Slst Cong., 2d sess., v, 41 pp. 

Twentieth Quarterly Report to Congress on Operations of 
United Nations Relief and Rehahilitation Administration. 
Message from the President of the United States trans- 
mitting ... for the period from April 1, 1949, througli 
June 30, 1949, pursuant to Public Law 267, Seventy-eighth 
Congress. H. Doc. 437, Slst Cong., 2d se.ss. 2 pp. 

Report Concerning Retirement and Disal)ility Fund. 
Foreign Service. Message from the President of the 
United States . . . H. Doc. 438, Slst Cong., 2d sess. 2 pp. 

Department of State Bulletin 



PUBLICATIONS 



Recent Releases 

For sale bi/ the iSiipcnittcndeut of Documents, Oovemment 
Printiny O/flce. Wasliiiigtoii iii, B.C. Address requests di- 
rect to the Superintendent of Poeumcnts, except in the case 
of free publications, which man be obtained from the 
Department of Slate. 

Anthropological Research and Investigation: Cooperative 
Progrram in Mexico. Treaties aud Other International 
Acts Series 11»U1. Pub. 3G2«. 14 pp. 5^ 

Agreement between the United States and Mexico — 
Effected by exchange of notes, signed at Washington 
June 21. l',)4!); entered into force June 21, 1949; opera- 
tive retroactively from July 1, 1948. And Agree- 
ment — Effected by exchange of notes, signed at Mexico 
December 4, 1943, and April 19, 1944; entered into 
force April 19, 1944. 

Exchange of OSScial Publications. Treaties and Other In- 
ternational Acts Series 1971. I'ub. 3659. 3 pp. Si*. 

Agreement between the United States and Denmark — 
Effected by exhange of notes, signed at Copenhagen 
July 27 and August 1, 1949 ; entered into force August 
1, 1949. 

United States Commission for Cultaral Exchange With 
Iran. Treaties and Other International Acts Series 1973. 
Pub. 3665. 11 pp. 5!?. 

Agreement between the United States and Iran. — 
Signed at Tehran September 1, 1949; entered into 
force September 1, 15H9. 

Transfer of Certain Military Reservations to the Philip- 
pines. Treaties and Other International Acts Series 19^. 
Pub. 3070. 12 pp. 5«f. 

Agreement between the United States and the Re- 
public of the Philippines — Effected by exchange of 
notes, signed at Manila May 14 and 16, 1949 ; entered 
into force May 1(5, 1949, operative retroactively 
March 27, 1949. 

Communication System: Operation and Maintenance of 
Land Lines Between Edmonton, Alberta, and Fairbanks, 
Alaska. Treaties and Other International Acts Series 
1966. Pub. 3671. 5 pp. 5<t. 

Agreement between the United States and Canada — 
Effected by exchange of notes, signed at Washington 
March 1 and 31, 1948 ; entered into force March 31, 
1948. 

Health and Sanitation: Cooperative Program in Vene- 
zuela. Treaties and Other International Acts Series 1974. 
Pub. 3677. 8 pp. 5^. 

Agreement between the United States and Venezuela, 
extending and modifying agreement of February 18, 
1943, as extended and modified — Effected by exchange 
of notes, signed at Caracas March 4 and 9, 1949; 
entered into force March 9, 1949, operative retro- 
actively from June 30, 1948. 

Relief Supplies and Packages for the British/United 
States Zone, Free Territory of Trieste: Duty-Free Entry 
Payment of Transportation Charges. Treaties and Other 
International Acts Series 1978. Pub. 3681. 4 pp. 5(J. 

Agreement between the United States and the Brit- 



ish/United States Zone, Free Territory of Trieste — 
Signed at Trieste February 11, 1949; entered Into 
force February 11, 1949. 

Air Transport Services. Treaties and Other International 
Acts Series 1979. Pub. 3683. 4 pp. 5^. 

Provisional agreement between the United States and 
Korea — Effected by exchange of notes, signed at 
Seoul June 24 and 29, 1049; entered into force June 
29, 1949. 

Foreign Service List, January 1, 1950. Pub. 3689. 103 pp. 
30<; a copy ; $1.00 a year domestic, $2 a year foreign. 

Lists officers in the American Foreign Service, their 
classification, assignments, etc. 

Air Transport Services. Treaties and Other International 
Acts Series 1983. Pub. 3091. 8 pp. 5^. 

Agreement between the United States and Burma — 
Signed at Kangoou September 28, 1949 ; entered into 
force September 28, 1949. 

Information for Bearers of Passports, January 1, 1950. 
Passport Series 12. Pub. 3703. 91 pp. Limited distribu- 
tion. 

Contains facts on loss of nationality ; status of 
American citizens in certain countries with which 
naturalization treaties are in force ; and general 
information on passports. 

Passport Visa Fees. Treaties and Other International 
Acts Series 1988. Pub. 3700. 5 pp. 5^. 

Arrangement between the United States and Austria — 
Effected by exchange of notes, dated at Vienna June 
10 and 28 and July 12, 1949 ; entered into force July 
15, 1949. 

Questions and Answers About the United Nations. Inter- 
national Organization and Conference Series III, 45. Pub. 
3712. 28 pp. Out of print. 

Questions and answers concerning the status and de- 
velopment of international cooperation. 

The Seal of the Department of State. Department and 
Foreign Service 11. Pub. 3713. 3 pp. [Buixetin Re- 
print] . Free. 

Article by Richard S. Patterson giving the history of 
the seal of the Department of State. 

Publications on Economics. Pub. 3726. 4 pp. Free. 

Lists and briefly describes available Department of 
State publications relating to economics ; lists area 
distribution centers for these publications. 

U.S. National Commission UNESCO News, February 
1950. Pub. 3733. 10 pp. 10<4 a copy ; $1 a year domestic, 
$1.35 a year foreign. 

The monthly publication of the United States National 
Commission for Unesco. 

Food and People. International Organization and Con- 
ference Series IV. Pub. 3736. 3 pp. Free. 

Pamphlet outlining food problem as a major topic 
(UNESCO and Fao) for group study and discussion. 

Crisis in Asia — An Examination of U.S. Policy. Far 

Eastern Series, 32. Pub. 3747. 8 pp. Free. [Buixetin 
Reprint] 

Remarks by Secretary Acheson made before the Na- 
tional Press Club, Washington, D.C., on January 12, 
1950 concerning the relations of the peoples of tlie 
United States and tlie peoples of Asia in the light of 
their emerging independence. 



April 3, 1950 



543 



'wyyi^^e/)^ 



General Policy Page 

Inter-American Relations in Perspective. 

By Edward G. Miller, Jr 521 

U.S. Endorses Report of Caribbean Investi- 
gation Committee. Statement by Sec- 
retary Acheson 523 

Pan American Day, 1950: A Proclamation . . 524 
Switzerland To Represent U.S. Interests in 

Bulgaria 524 

Shanghai Communists Delay Evacuees From 

China 525 

The United Nations and 
Specialized Agencies 

Universal, Regional, and Bilateral Patterns 
of International Organization. State- 
ment by Deputy Under Secretary 
Rusk 526 

Terms of Reference for U.N. Representative 

in India-Pakistan Negotiations .... 537 

The United States in the United Nations . . 538 

Economic Affairs 

General License Concerning Assets in Balkans 

Revoked 624 

High Frequency Broadcasting — Another 
Attempt at World Agreement. By Marie 
Louise Smith 533 

Treaty Information 

Consular Convention With Costa Rica Enters 

Into Force 523 



Treaty Information — Continued page 

Halibut Convention With Canada 625 

Japan-Burma Trade Agreement 525 

The Department 

Ambassador Jessup Answers Senator Mc- 
Carthy's Charges of "Unusual AfHnity 
for Communist Causes" — States Insinu- 
ations Reveal Shocking Disregard for 
Country's Interests 516 

National Security 

The International Trade and Traffic in Arms: 
Its Supervision and Control — III. By 
Leonard H. Pomeroy 507 

Occupation Matters 

Japan-Burma Trade Agreement 625 

International Organizations 
and Conferences 

U.S. Delegations to: 

Inter-American Economic and Social 

Council 536 

IcAO Telecommunication Meeting .... 536 

Commission on Human Rights 536 

Calendar of International Meetings . . . 540 

The Congress 

Legislation 542 

Publications 

Recent Releases 543 



%onivimU(yy^ 



Marie Louise Smith, author of the article on high frequency broad- 
casting, is policy reports officer, OflBce of Transport and Communica- 
tions Policy, Department of State. 

Leonard H. Pomeroy, author of the article on international trade 
and traffic in arms, is compliance ollicer in the Munitions Division. 



U. S. GOVERNMENT PRIMING OFFICE: I9B0 



tJne/ zlfeha/yt^neni/ xw Cnat& 




L.NDLKDLVLLOi'KU AREAS AS MEASUUJi 
OF NATIOiNAL SECURITY • Statement hy Secretary 
Acheson 552 

OBJECTIVES OF U.S. POLICIES TOWARD ASIA • By 

Anibaasador Ijoy W. Henderson 562 

DEPARTMENT OFFICERS ANSWER CHARGES MADE 
BY SENATOR .McCARTHY: 

Statement by Esther Caukin Bruuauer 574 

Statement by Haldore Hanson 577 

ALLIED WATCH ON THE RHINE • By Hayne» Mahoney . 547 



For complete contents see back cover 



Vol. XXII, No. 562 
April 10, 1950 




,jVi«"'' o. 




M, 



e 



z/^efut/r&nent ^ i/ia(e A_/ LI 1 1 \D L 1 1 1 



Vol. XXII, No. 562 • Publication 3814 
April 10, 1950 



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M. S. SUPERINiEWENT Of BOCUMtlin 

APR 27 1950 



ALLIED WATCH ON THE RHINE 



by Haynes Mahoney^ Staff Writer 

Public Relations Division, Office of Public Affairs, HICOG 



On the last three Thursdays of each month, the 
United States High Commissioner for Germany, 
John J. McCloy, and his British and French 
counterparts, General Sir Brian H. Robertson and 
Andre Frangois-Poncet, flanked by a score of their 
advisei-s and expei-ts, gather around a large cir- 
cular table in the softlj--lit "Marble Room" of a 
mountaintop hotel overlooking the Rhine. When 
they open discussion on the first point of their 
agenda, they set in motion the highest Allied au- 
thority in western Germany. 

The three high commissioners, their deputies, 
advisers and more than 100 secretariat personnel 
of the three countries, form the Allied High Com- 
mission for Germany. A complex organization 
which overflows the five stories, the annex and 
garage of the Petersberg hotel, the High Commis- 
sion (HICOM) must consolidate the policies of 
the three occupying powers with due consideration 
to the views of the German federal government 
and the changing conditions in Germany as re- 
ported through the field organization of each high 
commissioner. It must finally produce the Allied 
legislation and guidance to the German federal 
and state governments necessary to carrying out 
the terms of the Occupation Statute. 

Sj"mbolic of its supreme authority. High Com- 
mission headquarters in the rambling white 
Petersberg is visible for miles up and down the 
Rhine valley. From its roof fly the Stars and 
Stripes, French Tricoleur and British Union Jack, 



' Reprinted from Information Bunetin, OflBce of the 
High Commissioner for Germany, Mar. 1950, p. 7. 



with the colors of the high commissioner serving 
as chairman for the month on the middle staff. 

Built in 1886, the Petersberg was formerly an 
exclusive resort for many distinguished and 
wealthy travelers of the world. It is now devoted 
exclusively to tripartite operations. Its bedrooms, 
lounges and dining rooms have been converted 
into conference rooms and offices for the high 
commissioners, their advisers and the Allied Gen- 
eral Secretariat staff. 

The federal German capitol is located a few 
miles down the river at Bonn, and the area around 
Bonn and the Petersberg is an international en- 
clave administered jointly by the three Occupa- 
tion Powers. Each high commissioner maintains 
a separate headquarters nearby — the British at 
Wahn a few miles to the north, the French in a 
former hotel in Dreesen, across the Rhine from the 
Petersberg, while the Americans have renovated 
a large residential building in the nearby village 
of Mehlem. 

The meetings of the three high commissioners 
represent the fruition of Allied policy towards 
Germany established nearly two years ago in Lon- 
don. In the winter and spring of 1948, the for- 
eign ministers of America, Britain, France and the 
Benelux countries met in the British capital to 
decide what should be done about Germany. The 
country was stagnating economically and creating 
new financial burdens on the occupying powers. 
Miserable living conditions were threatening 
democratic trends which it was hoped would take 
root in the ruins of the Third Reich. 

The principal reason for tiiis dangerous situa- 



April 10, 1950 



547 



tion was the breakdown of four power control due 
to Soviet intransigence. The Russians had re- 
fused to join with the Western Powers in treat- 
ing the country as an economic unit; they had 
ballfed at currency reform, had turned down pro- 
posals for free elections of a new German govern- 
ment, in short, had completely obstructed the 
movement to unify Germany except under their 
own terms, which would mean Communist domi- 
nation of the country. 

At London the foreign ministers agreed, and 
their governments approved, a new and more con- 
structive policy for at least the two-thirds of 
Germany which lay outside of the Iron Curtain. 
It was decided that the three western zones would 
be unified as a federal republic with a democratic 
government until such time as a way could be 
found to bring the eastern zone into the federation. 
At the same time, to provide security for western 
Europe, an International Authority was proposed 
for the Ruhr, industrial heart of Germany, in 
which the Western Powers, Benelux countries and 
Federal Republic would participate. 

As the first step, a drastic curren,cy reform was 
effected in the three western zones in June 1948, 
which gave the economy a tremendous lift toward 
recovery. This resulted in the blockade of Berlin 
by the Soviets and the Allied counter-blockade of 
eastern Germany. While the Anglo-American 
airlift was defeating Russian efforts to freeze the 
Western Powers out of Berlin, the western Ger- 
man states convened a constitutional assembly in 
Bonn. The "Basic Law" or constitution for the 
federation was drafted during the course of six 
months and ratified by the German states in the 
summer of 1949. In August democratic elections 
were held and on Sept. 21 the government of the 
Federal Republic of Germany was installed. 

On the same date Military Government was 
ended, the Allied High Commission was activated, 
and the Occuiiation Statute came into force. De- 
veloped by the three Western Powers while the 
federal constitution was being drafted, the Occu- 
pation Statute became the basic charter for Allied 
operations in Germany, defining the powers of the 
Occupation Authorities vis-a-vis those of the fed- 
eral government. It gi'anted the Germans more 
independence and responsibility for their own 
affairs than they had had since the end of the war. 

Basically, the statute allows the federal govern- 
ment full authority over all domestic affairs, with 
a few exceptions in so-called reserved fields, pri- 



marily with respect to disarmament, reparations, 
decartelization and respect for the Basic Law and 
state constitutions. The Occupation Powers re- 
tain the authority to supervise western German 
foreign relations, foreign trade and internal eco- 
nomic activities to the extent necessary to assure, 
the best utilization of German resources with a 
minimum of external assistance. 

The High Commission also has the right to dis- 
approve federal or state legislation within 21 days 
after its transmittal to the Occupation Authorities, 
and to intervene if necessary to preserve security 
or democratic government or in pursuance of in- 
ternational obligations. 

To implement the Occupation Statute, the Allied 
High Commission is organized to provide for uni- 
form Allied pplicy in all three zones of western 
Germany. At its head is the Coimcil, comprised 
of the three High Commissioners or, in their ab- 
sence, their deputies, Maj. Gen. George P. Hays 
(U. S.), Christopher E. Steel (British) and Ar- 
mand Berard (French). 

The High Commissioners and their deputies 
have a rich and varied background in government, 
diplomacy and German affairs. United States 
High Commissioner McCloy was assigned to im- 
cover German responsibility for the famous "Black 
Tom" explosion during World War I, becoming 
an authority on German espionage and sabotage- 
Having served as assistant secretary of war, he 
came to his position in Germany from the presi- 
dency of the World Bank. 

General Robertson, Britain's high commissioner, 
had served as British military governor for Ger- 
many for two years prior to his present appoint- 
ment. 

A career diplomat, Mr. Frangois-Poncet had 
been France's ambassador to Germany before the 
war, now serves as France's highest authority on 
the High Commission. 

From command of the wartime 10th Mountain 
Division which fought its way up through Ital}', 
General Hays assumed in 1947 the job of deputy 
military governor under Gen. Lucius D. Clay, and 
now serves as Deputy United States High Com- 
missioner. His British counterpart, Christopher 
Steel, brings with him a background as British 
political adviser to SHAEF in 1945, and as polit- 
ical adviser to the British Military Government 
in 1947. French Deputy High Commissioner 
Berard is, like his chief, a long-time diplomat who 



548 



Department of State Bulletin 



had five years' service in Berlin during the early 
1930's. 

■ Beneath the Council are nine permanent tri- 
partite commissionei"s in the respective fields. 

The deputies sit as the General Committee to 
consider procedural and administrative business 
of the High Commission and to deal with matters 
not falling specifically to the other committees. In 
some instances, the General Conmiittee, rather than 
the Council, is asked to resolve disagi'eements aris- 
ing in the other conunittees. 

The Political Affairs Committee, consisting of 
the three political advisers, is concerned with all 
political and foreign affaii-s of the German federal 
and state governments coming witliin the com- 
petence of the Council. 

A Foreign Trade and Exchange Committee, 
comprised of the economic and finance advisers, 
guides the foreign trade policies of the German 
authorities. 

The committee members are automatically di- 
rectors of the Joint Export-Import Agency until 
its liquidation. 

The Economics Committee, comprised of the 
economic advisers, observes German economic pol- 
icies and advises the Council in exercising its re- 
served powers in this field, including decarteliza- 
tion and deconcentration of German industry. 

The three finance advisers form the Finance 
Committee, which observes German financial pol- 
icies and advises the Council in exercising its pow- 
ers under the Occupation Statute in this field. 

The Law Committee, comprised of the legal 
advisers, provides the Coimcil and its committees 
with advice on legal and judicial affairs arising 
out of the work of the High Commission. 

A Special Committee for the Review of German 
Legislation (both federal and state) is comprised 
of representatives of the legal and political staffs 
of the high commissioners. This committee must 
review all German legislation in sufficient time so 
that final action can be taken within 21 days of its 
receipt from the German authorities. If disap- 
proval is recommended, the Council itself must 
make the decision. 

A ninth agency, the Military Security Board, 
handles all maters of demilitarization, disarma- 
ment, and prohibitions and limitations on industry 
and scientific research. This agency, currently lo- 
cated in Berlin, is scheduled to move to Coblenz 
this spring. 

The High Commission charter also provides for 



the formation of subcommittees and subordinate 
agencies, usually concerned with more specific 
fields under the permanent committees. 

Currently there are about 25 of these subordinate 
agencies, such as the Coal and Steel Control 
Groups which report through the Economics Com- 
mittee, the Combined Travel Board and an Infor- 
mation and Cultural Affairs Subcommittee under 
the Political Committee, the Public Safety Sub- 
committee, the Civil Aviation Board under the 
General Committee, and so on. 

Holding the key to smootli operation of the High 
Commission is the Allied General Secretariat, a 
three-power body which receives and dispatches 
all couununications for the High Commission, pre- 
pares agendas, keeps minutes, provides briefs and 
background material to the members of the Coun- 
cil and committees, and acts as the channel of 
communications between the High Commission, 
the German federal government, the state com- 
missioners,- and all outside agencies. 

The Secretariat consists of the three national 
secretaries and their staffs. Joseph E. Slater, the 
United States secretary, had previously served as 
secretary of OMGUS' Economics Division and as- 
sistant United States secretary with the Allied 
Control Council in Berlin and also with the United 
Nations planning staff. Leo Handley-Derry, the 
British secretary, had been secretary of the Bi- 
zonal Delegation to the Oeec in Paris. Lt. Col. 
G. P. Glain, the French secretary, had been French 
secretary with the Allied Control Council. 

These three take turns discharging the duties of 
secretary-general as the chairmanship of the Coun- 
cil rotates monthly. Apart from their duties in 
servicing tripartite meetings, their primary re- 
sponsibility is to coordinate among themselves and 
with their national elements every communication 
issued in the name of the Allied High Commission. 
This, of course, involves work in the French and 
English languages on all papers and in German 
as well on those received from or destined for 
German agencies. 

The Secretariat includes also a Liaison and 
Protocol Section, an Allied Central Statistical Of- 
fice and a tripartite archivist. 

Most of the work of the High Commission is 
referred first to the appropriate committee or sub- 



' The official term is "Land Commissioners," but to avoid 
confusion with the American word meaning Earth, the 
German "Land" is translated in this article to "State." 



April 10, 1950 



549 



committee for preliminary discussion. Often 
these subordinate agencies reach complete agree- 
ment and the decision is referred to the Council 
only for formal review and official promulgation. 
In less important matters the committee them- 
selves may communicate their decisions directly 
to the federal government or state commissioner 
concerned. 

In cases of disagreement on the committee level 
the subject is passed on to the General Committee 
or to the Council with a statement of the positions 
of the three powers. Usually the high commis- 
sioners, with their broader authority to modify 
policy, arrive at agreement. The majority rule 
applies on voting except that amendments to the 
Basic Law must be approved by unanimous agree- 
ment. A dissenting member of the Council may, 
however, appeal a decision to liis government in 
certain fields. 

In addition to tlie formal Council meetings on 
Thursdays, the high commissioners often convene 
for informal sessions and also meet frequently 
with the German chancellor. Committees and sub- 
committees are usually in weekly session while the 
United States, British and French heads of the 
Secretariat confer at least daily and on many oc- 
casions have several separate meetings daily to 
direct the complicated operations of their 
organization. 

Thus some 200 American, British and French 
officials are associated weekly in the conferences 
and meetings necessary to exercising efficient and 
continuous tripartite control of western Germany. 
Members of the federal cabinet and other German 
ex^oerts are consulted from time to time either for- 
mally or informally. 

Illustrative of the activity of the Allied High 
Commission is the fact that 283 meetings took 
place in the first three months, exclusive of Mili- 
tary Security Board and Secretariat meetings. 

In this manner the major Allied policies in 
western Germany are established by the High 
Commission and carried out uniformly through- 
out the three occupation zones. The zones remain 
important primarily as areas of responsibility of 
the respective high commissioners and for the lo- 
cation of occupation troops. Each high commis- 
sioner is authorized under the Charter to take 
unilateral action only in a few reserved fields, such 
as : maintenance of law and order if German au- 
thorities are unable to do so; protection of the 
prestige and security of the Occupation Forces; 



operation of Allied courts and care of prisoners 
sentenced by them. Even in these fields, the high 
commissioner is required to coordinate his policies 
in so far as possible with those of the other high 
commissioners. 

Significantly, the High Commission charter 
states that the High Commission will be repre- 
sented in each state of the western zones by an 
Allied state commissioner who shall be solely re- 
sponsible to the Council for insuring due compli- 
ance on the part of the German state authorities 
with the Coimcil's decisions and directives. In 
effect, this makes the state commissioner accounta- 
ble to the Council for all tripartite matters in his 
state, rather than resjionsible only to his own high 
commissioner. 

As a further quarantee of uniform tripartite op- 
erations in the three zones, each high commissioner 
is authorized to delegate state observers with small 
staffs to state commissioners of the other two zones 
for consultation and advice. 

The first few months of Allied High Commis- 
sion operations have been arduous and difficult. A 
great amount of Military Government legislation 
had to be reviewed and extended or dropped; 
policies under the Occupation Statute had to be 
defined ; new procedures, the authority and respon- 
sibilities of the state commissioners, the transfer 
of most JEIA functions to the federal government, 
the establislunent of occupation costs budget and 
a host of other problems incident to the develop- 
ment of the new civilian control of Germany con- 
fronted the Allied High Commission during its 
first months. 

In addition to the routine current activities 
there were such important problems as the review 
of federal and state legislation, the authorization 
of the federal government to join international 
organizations; the accreditation of foreign mis- 
sions; consideration of numerous petitions from 
the federal government on dismantling and other 
questions, and so on. 

Several particularly urgent problems have also 
confronted the High Commission which required 
night sessions and frequent contact with Washing- 
ton, London and Paris for policy guidance. One 
of those was the revaluation of the Deutsche mark, 
and anotlier was the conduct of negotiations with 
Dr. Konrad Adenauer, federal chancellor, in car- 
rying out the foreign ministers' agi-eements in 
Paris during November. Tlie latter subsequently 
resulted in the Petersberg Protocol of Nov. 22. 



550 



Deparlment of State Bulletin 



This agreement is a nianifestation of the new 
spirit of occupation policies which is beginning to 
be felt uniformly throughout the Feileral Republic. 
The old emphasis on restriction and control is now 
being relaxed and replaced by the positive policy 
of aiding tJermany to earn a respected place among 
the democratic nations. 

In accordance with its pledge, the Federal Re- 
jmblic lias now joined the International Authority 
for the Ruhr. It has agreed to cooperate with the 
Military Security Board, to liberalize the structure 
of government and to guard against any revival of 
totalitarianism. These security guaranties should 
serve to calm European fears and give the high 
commissioners greater latitude in aiding Ger- 
maTiy's reconstruction and further extending the 
authority of the federal government. 

The Allies are to permit the re-establishment of 
consular and commercial relations with other na- 
tions, and plans are already proceeding for the 
immediate establishment of such consulates in the 
United States, the United Kingdom and France. 

The participation of Germany in international 
organizations through which she can contribute to 
the general welfare are also to he promoted. Al- 
ready within recent weeks the High Commission 
has allowed Germany to join the Organization for 
European Economic Cooperation (Oeec), the 
European Customs Union Study Group, to attend 
certain International Labor Organizations (Ilo) 



conferences, and to consummate a bilateral agree- 
ment on ECA aid with the United States govern- 
ment. Negotiations are also going forward with 
regard to membership in several other interna- 
tional organizations. 

Internally, most of the controls over press, poli- 
tics, education, labor and economics have been re- 
laxed. After a year the Occupation Statute will 
be revised to determine what further authority may 
be extended to the federal government. 

When the high commissionei's meet in the lofty 
Petersberg to render decisions and to issue instruc- 
tions implementing the neve constructive policies, 
they are not conducting an "ivory tower" opera- 
tion. Through their field officers, state commis- 
sions and headquarters staffs, tlie high commis- 
sioners will observe the political and economic 
progress of the Federal Republic during the com- 
ing year. Western Germany must prove its al- 
legiance to democratic principles and its sincerity 
in contributing to the recovery of Europe. 

From the windows of their offices on the second 
floor of the Petersberg, the three Allied leaders can 
look down on the broad reaches of the Rhine 1,000 
feet below. In effect they have mounted a new 
watch on the Rhine — a cautions but hopeful 
watch — with the objective that no military invader 
or foreign occupier will ever have to maintain vigil 
here again. 



THE CONGRESS 



Legislation 

International Wheat Agreement Act of 1949. H. Kept. 
1395, 81st Cong., 1st sess. 8 pp. 

Printing as a Document, a Manuscript Entitled "A 
Decade of American Foreign Policy : Basic Documents, 
1941-49," Relating to American International Relations. 
H. Rept. 14.56, 81st Cong., 1st sess. 1 p. 

Settlement of Certain Finnish Claims. H. Rept. 1457, 
81st Cong., 1st sess. 20 pp. 

Authorizing the Joint Committee on Atomic Energy To 
Have Printed .")0,000 Copies of Senate Repart 1169. H. 
Rept. 14C4. 81st Cong., 1st sess. 1 p. 

S.vnthetic Rubber. Message from the President of the 
United States transmitting synthetic rubber recommenda- 
tions of the President, together with a report on main- 
tenance of the synthetic rubber industry in the United 
States and disposal of government-owned syntlietic rubber 
facilities from the Assistant to the President. H. Doc. 448, 
.Slst Cong.. 2d sess. iii, 121 pp. 



Second Annual Report for the Philippine Alien Property 
Administration. Message from the President of the United 
States transmitting the .second annual report for the 
Philippine Alien Property Administration for the fiscal year 
ended June 30, 1948. H. Doc. 449, 81st Cong., 2d sess. 
V, 69 pp. 

Supplemental Estimates of Appropriation and Public 
Debt Authorization for Various Agencies in the Executive 
Branch and the District of Columbia. Communication 
from the President of the United States transmitting . . . 
H. Doc. 457, 81st Cong., 2d sess. 9 pp. 

Contribution by the United States to the United Nations 
Relief and Works Agency for Palestine Refugees in the 
Near East. Communication from the President of the 
United States transmitting . . . H. Doc. 459, 81st Cong., 
2d sess. 3 pp. 

Report of the Air Coordinating Committee. Message 
from the President of tlie United States transmitting the 
annual report of the Air Coordinating Committee for the 
calendar year 1949. H. Doc. 476, 81st Cong., 2d sess. 
v, IS pp. 

Estimate of .Appropriation, in Form of an Amendment 
to the Budget, for Expenses of the European Recovery 
Program. Communication from the President of the 
United States transmitting estimate of appropriation for 
the fiscal year 1951, in the amount of $2,950,000,000 . . . 
H. Doc. 479, 81st Cong., 2d sess. 3 pp. 

Suspension of Deportation of Certain Aliens. H. Rept. 
1542, 81st Cong., 2d se.ss. [To Accompany S. Con. Res. 34] 
2 pp. 



April 10, 7950 



551 



Aid to Underdeveloped Areas As Measure of National Security 



Statement hy Secretary Acheson ^ 



]Mr. Chairman, Members of the Committee: 
I am glad to have this chance to discuss with you 
the legislation entitled an "Act for International 
Development." 

Four Courses of Action 

This proposed measure is the underlying legis- 
lative authority for carrying out a progi-am to 
assist tlie people of the underdeveloped areas of 
the world in their efforts to develop their economic 
resources. It is an integi'al part of a general pro- 
gram outlined by the President as a basis for as- 
suring peace and personal freedom in the world. 
This program contained four interrelated courses 
of action. The first course is the continuing of 
our unfaltering support of the United Nations and 
its related agencies. The second course is the con- 
tinuing of our programs for world economic recov- 
ery. The third is the strengthening of freedom- 
loving nations against tlie dangers of aggi'ession 
by providing military advice, and equipment to 
those nations which will cooperate with us in the 
maintenance of peace and security. The fourth 
course of action is the program which you are now 
considering. It involves making available to 
peace-loving peoples the benefits of our technical 
knowledge and skills. It also involves coopera- 
tion with other free nations in fostering capital 
investment in areas needing development. Its 
aim is to help the free peoples of the world 
through their own efforts to produce the things 
they need for a decent life. 

The legislation before you is the product of more 
than a year of careful study in which 43 agencies 
of the Federal Government have participated. It 
is the product also of consultation with interested 
members of the Congress and with leading mem- 
bers of business and labor and scientific groups. I 

' Made before the Senate Committee on Foreign Rela- 
tions on the Point 4 legislation on Mar. 30, 1950, and re- 
leased to the press on the same date. 



would say that it represents the best combined 
judgment of all who were concerned in shaping it. 

As you know, this legislation does two things : 
It establishes the objectives and the broad policy 
to guide the whole program of American aid to 
underdeveloped areas, and it authorizes the Presi- 
dent to carry out that part of the program dealing 
with technical cooperation. 

As this Committee well knows, the activities px'o- 
posed are not new. For many years Americans 
have been sharing technical skills with other 
peoples and investing their capital abroad. This 
is part of the American experience. It is in the 
American tradition. 

Wliy, then, did the President propose to raise 
these activities to the level of a national policy and 
a great national enterprise? Why did he single 
out this policy and this enterprise as one of the 
four cardinal aims of American foreign policy? 

Only by answering these questions can we, in 
my opinion, appreciate the overriding importance 
of the legislation that is before you. 

Today, democracy is on trial for its life. The 
free way of life is under attack in every part of 
the world, including those areas of the world which 
we call "underdeveloped." 

These areas include parts of Latin America, 
Africa, the Middle East, and the Far East where 
two-thirds of the world's people live, many of them 
in the shadow of hunger, poverty, and disease. 

Increasing numbers of these peojile no longer 
accept poverty as an inevitable fact of life. They 
are becoming aware of the gap between their living 
standards and those in the more highly developed 
countries. They are looking for a way out of their 
misery. They are not concerned with abstract 
ideas of democracy or communism. They are in- 
terested in practical solutions to their problems in 
terms of food, shelter, and a decent livelihood. 
When the Communists offer quick and easy reme- 
dies for all (heir ills, they make a strong appeal to 
these people. 



552 



Department of State Bulletin 



Basis of Security 

These are the facts we must face. What do 
thev mean to our national security ? To the peace 
and well-beinj; and freedom of the American 
people, in short, to the fundamental aims of our 
foreign policy? 

We are spending billions for militai'v defense — 
as we must. We are spending other billions for 
economic reconstruction in Europe and vital points 
in the Far East — as we must. We are organizing 
joint defense through the North Atlantic Treaty 
and the Military Assistance Program. We are 
organizing joint action to remove trade barriers 
through tariff and reciprocal trade agreements and 
through the International Trade Organization. 
We are attempting to remove the causes of interna- 
tional friction and misunderstanding by playing 
an active role in the United Nations. 

All the things we do are, in the last analysis, 
measures of national securit}' — the broadest kind 
of security for our free and democratic way of 
life. 

This legislation that is before you, this "Act for 
International Development" has the same broad 
purpose. In a very real sense, it is a security 
measure. And as a security measure, it is an 
essential arm of our foreign policy. For our mili- 
tary and economic security is vitally dependent on 
the economic security of other peoples. 

But our foreign policy is not based on security 
alone. We have never been satisfied merely to 
resist a threat — of communism or any other "ism." 
Our policy is broader than this. It is essentially 
constructive. It is based on the assumption that, 
in the world today, our own welfare is closely re- 
lated to that of other peoples. We can participate 
in this kind of a program because it serves both 
the interest of other peoples and our own interest 
as well. 

Economic development will bring us certain 
practical material benefits. It will open up new 
sources of materials and goods we need, and new 
markets for the products of our farms and fac- 
tories. Our friends in Europe, who depend far 
more than we do on foreign goods and markets, 
will benefit in similar ways. The volume of world 
trade will inevitably expand. 

And finally, the peoples of the underdeveloped 
areas will begin to see new opportunities for a 
better life, and they will associate those oppor- 
tunities in their minds with the helping hand of 
the American people. Even more important, they 
will associate economic progress with an approach 
to the problems of daily life that preserves and en- 
larges the initiative, dignity, and freedom of the 
individual. 

The bill now before you establishes economic 
development of underdeveloped areas for the first 
time as a national policy. Its purpose is to en- 
courage the exchange of technical skills and pro- 
mote the flow of private investment capital where 
these skills and capital can help to raise standards 



of living, create new wealth, increase productivity, 
and expand purchasing power. 

There are other conditions. American aid will 
be furnished only where it contributes to the 
development of a balanced economy. It may go 
only where it is actually needed, and where the 
country receiving it cannot provide skills and 
capital for itself. 

Most of the capital needed for economic devel- 
opment must come from the underdeveloped areas 
themselves. However, foreign capital will be 
needed from three main sources : from private in- 
vestors, from the International Bank for Recon- 
struction and Development, and from the Export- 
Import Bank. The latter two should supplement, 
not compete with private capital. They should 
finance projects, such as transportation and irri- 
gation, wliich are foundations for economic de- 
velopment and which are not ordinarily attrac- 
tive to i^rivate investment. We put primary em- 
phasis, however, on the need for stimulating an 
expansion of private investment not only to pro- 
vide capital but also to provide the technical and 
managerial skills that come with capital. 



Confldence for Capital Investment 

On the subject of capital investment, the bill 
makes some important findings. It recognizes that 
if investment is to do its job, the people of these 
underdeveloped areas must have confidence that 
foreign investors will not squander their natural 
resources, will pay taxes, will obey the local laws, 
and will provide decent wages and working con- 
ditions. 

At the same time, it recognizes the fact that 
investors must have confidence that their property 
will not be confiscated without fair compensation, 
that they can take their legitimate profits and their 
capital out of the country, and that they can have 
reasonable freedom to manage their business, sub- 
ject to local laws that apply to everybody equally. 

This, in a nutshell, is the essence of the invest- 
ment problem, and as j'ou see, it is a problem of 
confidence. I don't think there is any quick or 
easy solution to this problem. We are, however, 
taking steps which seem likely to help solve it. 
We are negotiating for treaties with other coun- 
tries which will protect our investors from some 
of the risks I have mentioned. But protection 
from some of the risks cannot be provided by 
treaty no matter how sincere the intentions of the 
participating governments. Therefore, a bill has 
been introduced and favorably reported by the 
Senate Banking and Currency Committee, which 
would permit the Export-Import Bank to sell cer- 
tain kinds of guaranties, in other words, insurance 
to investors; specifically against expropriation, 
confiscation, and seizure, and against inability to 
convert local currencies. AVe are trying to work 
out proposals to amend our tax laws to give some 
measure of tax relief as an added incentive to 



Apr/7 JO, 7950 



553 



investors. We are also trying to make treaties 
to avoid the hardship of double taxation. 

But when you put all these things together, I 
think you will find that there is no foolproof way 
of guaranteeing investors against the variety of 
nonbusiness risks that they face in many parts of 
the world today. 

Broadening Technical Cooperation 

Fortunately, we can go ahead with a program 
of technical cooperation, while we are trying to 
develop what the economists call a "favorable cli- 
mate" for investment. In fact, it seems clear that 
one of the best possible ways to help create that 
climate is to get on just as energetically as possible 
with technical cooperation. 

As you know, the United States Government has 
been in the business of technical cooperation for 
10 years. Most of the work has been concentrated 
in Latin America. A little has been done in the 
Far East. Now, this bill authorizes the President 
to do three important and necessary things. 

First, it authorizes him to expand the work and 
to spread it to other underdeveloped areas where 
the right conditions prevail. 

Second, it authorizes him to coordinate all the 
work of our Government in this field. 

Third, the President may contribute funds and 
personnel to the United Nations and to other inter- 
national organizations for such technical cooper- 
ation progi'ams as he is convinced they can carry 
on as well as we can, or better. 

Now, I think there are obvious advantages in 
giving vigorous support to the work of the United 
Nations in this field. Anything that gives the 
organization gi-eater authority and experience is 
good for the United Nations and good for us. 
There are other compelling reasons. The United 
Nations and particularly the related agencies 
like World Health and Food and Agriculture 
Organizations are set up to do certain things we 
cannot do. 

They can, for example, mobilize the resources of 
many countries, some of which have skills that we 
don't have. We certainly do not claim to have a 
monopoly of skills, nor do we flatter ourselves that 
we are superior in all fields. The Norwegians, for 
example, are expert in the science of fishery, and 
our technical people are glad to admit that they 
have much to learn from foreign technicians. 

Moreover, some of the members of the United 
Nations are closer to the i^roblems of the underde- 
veloped peoples than we are. Just because some 
of them are less advanced, technically, than we, 
they have a better understanding of the basic needs 
of these people. 

We need have no fear in contributing to the 
United Nations technical cooperation programs, 
since we ourselves are well represented in the 
United Nations agencies and will cooperate with 



other contributing nations in keeping watch over 
the programs. It should be remembered that our 
contributions to the work of the United Nations 
and its agencies are purely voluntary and that 
their continuation and size will depend on the 
effectiveness of the programs to which they are 
applied. 

There is one more aspect of the program which 
deserves special attention. The gi-eat experience 
and fine work of private groups and individuals 
has been fully recognized in drafting this pro- 
gram, and the bill provides that their participa- 
tion shall be sought to the gi'eatest extent. 

I think there is a pretty widely held idea that 
we are going to builcl large mills, mines, and fac- 
tories for these underdeveloped peoples. This is 
not true. In most cases what we need to do and 
what we are going to do is to try to help these 
people satisfy their growing desire to learn to do 
things for themselves which will lighten their 
burden of poverty. A remarkable thing about this 
kind of help is that you can get big results by 
making a comparatively small outlay of dollars 
for the services of skilled people. 

Examples of Technical Assistance 

Let me give you some examples, based on what 
we have been doing. 

In the San Andres Valley in El Salvador, there 
is an agricultural experiment station in which 
some American technical experts work side by side 
with local technicians. A farmer, troubled by 
poor crops, came to this station for advice. One 
of these specialists studied conditions on the farm 
and recommended the use of sodium nitrate fer- 
tilizer. Following his advice, the farmer reported 
that his corn yield had been tripled. Now, this is 
a simple story and the kind of advice offered 
would not seem very advanced to an American 
farmer. But the point is, that for the farmer in 
El Salvador it brought all the best of modern 
knowledge. Repeated many hundreds of times, 
this kind of help can change the lives of many 
people. 

Another example: the Institute of Inter-x\mer- 
ican Affairs has been collaborating with the Bra- 
zilian Government, which is vitally interested in 
economic development, in the Amazon Valley of 
Brazil. When we went into that area, which is 
two-thirds the size of the United States, only two 
cities had safe water supplies. Typhoid fever and 
dysentery were all over the valley, and cliildren 
were dying off in a shocking manner. A few ex- 
perienced sanitation engineers went in there and 
showed the people how to plan and build safe 
water systems. The results in Aimores, a little 
town of .5,000 inhabitants, are typical of what has 
been accomplished. These jjcojile used to have 
from 20 to JJO cases of typhoid a year not to men- 
tion the other diseases from polluted water. Thej- 
built a small, economical public water system, 



554 



Department of State Bulletin 



uiulcr expert fiuidiiiioe, and tlie next j^eiir not a 
sinjjle ease of typhoid developed. 

The Brazilian Government also invited three 
American jrovernment <j;eolo<rists to help their own 
experts locate new tlejHisits of stratej^ic materials. 
This comparatively trivial investment in technical 
ability has ivsulted in nncoverinj; two of the 
lai<iest deposits of inanp;anese in the Western 
Hemisphere, of untold value. 

One of the jrivatest needs in the underdeveloped 
areas is to train people in the simple basic practices 
of public administration. AVe can, for example, 
helj) ^H'ople from those areas in such things as 
t«chni(iues of census taking and keeping vital 
statistics. You don't need investment capital to 
do these things. You need some skilled people, 
people who literally talk the language of the coun- 
try with which they are working. 

To get the technical cooperation program 
rolling, we are going to have to comb the Ignited 
States for people with all kinds of skills. They 
don't all need to be top authorities in their fields. 
This work should appeal to young people with 
some comjietence and expei"ience. I suspect we 
will find hundreds of good people in state and 
municipal governments, on farms, in schools and 
universities, factories and private research organ- 
izations. The problem is to seek out these people, 
give them a little extra training, and persuade 
them to go abroad in the service of their country. 

Cost of the Program 

I want to talk briefly about the cost of the Point 
4 enterprise. We are requesting a total authoriza- 
tion of 45 million dollare for the first fiscal year, 
ending June 30. 1951. Of this, 10 million dollars 
has been included in the President's budget for 
technical assistance activities under the Institute 
of Inter- American Affairs and the Information 
and Educational Exchange Act of 1948. Thirty- 
five million dollars is requested for new activities. 

This figure is a result of vei"y careful planning 
on the part of agencies of the United States Gov- 
ernment which have been participating in this kind 
of activity in the past. It takes into consideration 
the excellent experience which the Institute of 
Inter-American Affairs and other agencies have 
had in Latin America. It is based on a careful 
study of the most urgent problems of the areas 
involved after consultation with representatives 
of those countries and an appraisal of the number 
and type of experts which could be I'ecruited and 
effectively organized in the various fields of 
activity. 

In ail honesty, I wish we could effectively spend 
more. I say this because I know of no better in- 
vestment for the jYnierican people at this time. 
Any action reducing this amount would, in my 
opinion, have two most unfortunate results. It 
would undoubtedly be interpreted by the peoples 
of the free countries of Asia, the Middle East, and 



other underdeveloped areiis as indicating a lack 
of interest in a program upon which they have 
been putting very gieat hopes. It would also seri- 
ously handicap the undertaking of specific activi- 
ties which can effectively be organized during the 
coming year. 

By its very nature, this is not and never will be 
a big-money enterprise. It is cooperative which 
means that a considerable part of the expense 
should be borne by the countries with which we 
work. It involves salaries and expenses of peo- 
ple — not vast purchases of machinery and raw 
materials. Its objective is to show other people 
how to meet their own needs, not to attempt to 
meet those needs ourselves. For this reason, cost 
of technical cooperation will always be modest, 
compared with the cost of other types of foreign 
aid ]>rograms. 

I want to make one last observation. We talk 
about this program as a long-term business, which 
it must be. But the fact is, we are not going to 
have to wait long to get results. Some results 
can be seen in a year, as in the little town of 
Aimores. Others may take 5 or 10 years or even 
longer to produce tangible benefits. 

Well, 10 years is a minute in the life of a nation 
and less than a second in the life of a civilization. 
The fight for freedom and democracy has been 
going on for more than 2,000 years. It will not 
be won in a decade. The question that concerns 
us is whether it will be going our way 10 years from 
now. And part of the answer, I am convinced, 
lies in the energy, the skill, and the faith we put 
into this Point 4 Program. 

Here, indeed, is a chance to prove that our civil- 
ization which has grown to vigor and maturity 
with the help of science, can bend science to its 
will — not to desti'oy but to serve humanity. 



Views on Sterling-Dollar Oil 
Problem Presented to British 

[Released to the press March 29] 

The State Department this afternoon delivered 
to representatives of the British Embassy a mem- 
orandum on the "Sterling-Dollar Oil Problem." 
This memorandum reviews briefly the underlying 
factors of importance to the United States Govern- 
ment in its consideration of this matter. It then 
proposes certain modifications of the proposals 
previously made by the British. It is the United 
States view that, with such modifications, a gen- 
ei'ally acceptable framework will be provided for 
the American companies concerned to develop sat- 
isfactory arrangements with the appropriate 
British authorities. 

The British representatives are transmitting 
the memorandum to London. 



April 10, 1950 



555 



Precapitulation Bank Accounts in Berlin Owned by U.S. Citizens 



[Released to the press March 28] 



United States citizens who had reichsmark ac- 
counts with financial institutions in Greater Berlin 
(including the Soviet sector) as of May 9, 1945, 
were reminded today by the State Department 
that their accounts may now be eligible for con- 
version into deutsche marks and that applications 
for such conversion must be filed with designated 
offices in Berlin before June 30, 1950. 

Unlike the Western zones of Germany where 
the banks opened for normal business soon after 
the end of hostilities, the 150 banks in Berlin were 
closed immediately upon the capitulation of the 
city and were not allowed to reopen. Therefore, 
the only accounts currently active in Berlin are 
those which have been built up since the capitula- 
tion and the beginning of the Allied occupation. 

The preoccupation balances may now be recre- 
ited and converted to deutsche mark balances at 
che rate of 20 to 1, according to re";ulation No. 19 
issued pursuant to the Second Ordinance on cur- 
rency reform of July 4, 1948. 

This regulation was authorized by the United 
States, British, and French Commandants in Ber- 
lin and became effective December 31, 1949. 

Application forms may be obtained by account 
holders, their heirs, or their legal representatives 
■from designated offices. The completed forms 
should be mailed to one of these offices, together 
with available documentary evidence substan- 
tiating the claim. It is particularly important to 
submit savings books and postal cb'^cking account 
confirmations. Persons enclosing such documenta- 
tion are advised to forward their applications by 
registered mail. Applicants who have several 
accounts eligible for conversion must submit sep- 
arate applications for each account. 

Applicants should also indicate in which of the 
currently operative financial institutions they wish 
to be credited with the balances arising from the 
conversion of their precapitulation accounts. In 
this connection, the "specified area" referred to in 
paragraphs 1 (1) (a) 2 and 3 of the regulations 
comprises the American, British, and French sec- 
tors of Berlin, 

A charge of 1 percent of the converted balance, 
but not less than .25 deutsche mark will be de- 

556 



ducted from the converted accounts by the new 
depositories. 

No applications should be submitted for con- 
version of amounts of less than 20 reichsmarks 
since the new balance resulting from conversion of 
such small amounts would not be large enough to 
warrant the cost of conversion. 

REGULATION NO. 19 

Pursuant to the Second Ordinance for Monetary 
Reform of ^ July 1948 

{Conversion Ordinance) 

{Uraltkonten-Bestimmiong) 

Whereas, paragraph 8 of the Second Ordinance for 
Monetary Reform dated 4 July 1948 provides that the 
Reichsmark credit balances resulting from deposits made 
before 9 Jlay 1945 will be disposed of as may be deter- 
mined hereafter, and 

Whereas, the accounts of Reichsmarks held in Berlin 
before 9 May 1945 have not been converted as has been 
done in the Western Zones, and considering the particular 
situation of Berlin and the diflBculties arising therefrom, 
and whilst the future determination of the accounts not 
covered by this Regulation is under consideration, 
It Is Hereby Ordered as Follows: 

1. (1) Credit balances maintained prior to 9 May 1945 
(pre-occupation credit balances) at a Financial Institution 
in Greater Berlin in the meaning of the law on credit 
transactions (Gesetz ueber das Kreditwesen) of 25 Sep- 
tember 1939 (Reichs Gazette I page 1955) or at the 
Deutsche Reichsbank Berlin, the Deutsche Golddiskont- 
bank Berlin or with the Postscheckamt Berlin will be 
converted into Deutsche Mark at the rate of 20 to 1, if 
the creditor 

(a) had his residence, seat of place of business in the 
specified area on 1 October 1949 ; 

(b) or, on 1 October 1949 was a United Nations National 
as listed in the Schedule attached to the Conversion 
Ordinance of July 4, liMS, or a national of a State not 
having been at war at any time from 1 September 1939, 
with any of the United Nations. 

Transfers or assignments of Reichsmark pre-occupa- 
tion credit balances will only be recognizofl for the con- 
version If they have been effected prior to 1 October 1949, 
before an authority or a notary public, or if they have 
been made known to the respective Financial Institution 
up to that date. 

(2) The amounts entered prior to 9 May 194,5, into a 
postal savings bank passbook valid at the time rank 
equally with the credit balances mentioned in par. (1). 

Department of State Bulletin 



(3) The settlement provided for in par. (1) does not 
Include : 

(a) pre-occ'upation credit balances of Financial Instl- 
tntions in the meaning of the law on credit transactions 
of September 25, 1939 ; 

(b) pre-occupation credit balances of those persons and 
associations mentioned in par. 1 (1) (c) of the Conver- 
sion Ordinance; 

(c) pre-occupation credit balances of agencies men- 
tioned in par. 1 (1) (e) I and II of the Conversion Ordi- 
nance and of those agencies tliat received a first supply. 

(4) Claims arising from the conversion of pre-occupa- 
tion credit balances can only be considered if claims are 
not being lodged on account of settlements in accordance 
with par. 7 (f) of the order No. 111/48 of the Soviet 
Militai-y .\dniiiiistnition in (JiMin.iny ciinceruing the im- 
plementation of the Monetary Reform in the Soviet Occu- 
pation Zone of Germany ( Central Official Gazette for the 
Soviet Zone 1948, page 217). 

(5) Debit and credit balances at one and the same 
Financial institutions shall be charged against one 
another, in so far as claims have been extingtiished 
through payment Iwfore the coming into force of this 
Regulation, no clearing will be effected. Detailed instruc- 
tions in this direction will be given by the Berliner 
Zentralbank. 

2. The claims on strength of par. 1 (1) shall be 
lodged until June 30, ISl.^O, at the latest, with the admin- 
istrative agency of the account keeping institution situ- 
ated in the specified area, in the case of postal cheques 
or postal savings bank credit balances at the Post- 
scheckamt Berlin-West. In so far as the claim canuot be 
justified by the books of tlie account keeping bank, the 
account-holder has to furnish appropriate documentary 
proof of the existence and the extent of the pre-occupa- 
tion credit balance. 

3. The credit balance converted into Deutsche Mark will 
be credited in an account at a licensed Financial Institu- 
tion to be named by the person entitled (paragraph 6 (b) 
of the Ordinance for the Establishment of the Berliner 
Zentralbank) in the specified area. 

4. The amounts converted in accordance with par. 1 
(1) can be disposed of as follows : 

(1) Savings credit balances will become due by three 
equal annual installments. The first installment may 
be disposed of one month after the amount has been 
credited in an account as per par. 3. The subsequent 
installment will become due every 1st of April of 1951 and 
1952. The credit balances will bear interest until April 1, 
1952, at the rate of 1 percent p. a. above the rate of inter- 
est for ordinary savings credit balances but not exceeding 
3 percent p. a. 

(2) Credit balances on trajisfer accounts (Girogut- 
haben) will become due by three equal annual install- 
ments. The first installment may be disposed of one 
month after the amount has been credited in an account 
as per par. 3. The subsequent installments will fall due 
on every first of April 1951 to 19.52. Until April 1, 1952, 
the credit balances will bear interest at the rate of 1 
percent p. a. above the rate of interest on ordinary bank 
deposits but not exceeding 2'/. percent p. a. 

(3) As from the 2d installment the payment of credit 
balances on savings and transfer accounts may, at the 
discretion of the Berliner Zentralbank, be made dependent 
upon proof being furnished that they are used for produc- 
tive purposes. 

5. (1) Upon request, the Financial Institutions which 
make the credit entry in the account as per par. 3 will be 
allocated, to the extent of liabilities accruing therefrom, 
an equalization claim against the Territorial Entity of 
Greater Berlin bearing interest at the rate of 3 percent 
p. a. 

(2) To the extent that pre-occupation credit balances 
will be converted under this Regulation and equalization 
claims be allocated in turn, the Magistrat of Greater Ber- 



lin will have a claim against the Financial Institutions 
which kept the pre-occupation account. 

6. (1) Any i)erscin who by false or Incomplete state- 
ments intentionally procures 

(a) any exchange of a pre-occ\ipatiou credit balance 
into Deutsche Mark contrary to any provision of this Regu- 
lation or any implementing provision made thereunder, 
and 

(b) any person who, with knowledge that he Is acting 
contrary to any provision of this Regulation or to any 
implementing provision made thereunder converts any pre- 
occupation credit balance into Deutsche Mark 

shall he liable on conviction to a term of imprisonment 
not exceeding five years or to a flue not exceeding fifty 
thousand Deutsche Mark or both. 

(2) An attempt is punishable. 

(3) Other violations of any provision of this Regula- 
tion or of any implementing provisions made thereunder, 
including negligent violations, will be punished by a fine 
not exceeding DM ten thousand. Offenders will be prose- 
cuted only upon request of the Berliner Zentralbank. 

(4) German Courts may exercise jurisdiction in re-spect 
to offenses under this Regulation subject to the limitations 
imposed by Military Government Laws and Orders. 

7. The Berliner Zentralbank will issue the necessary im- 
plementing and supplementing provisions pursuant to this 
Regulation. 

8. The German text of this Regulation and of any im- 
plementing and supplementing provisions issued there- 
under is the official text. 

9. This Regulation shall become effective on 31 Decem- 
ber 1949. 



LIST OF ADMINISTRATIVE OFFICES 
OF THE CLOSED BANKS 

(Application blanks for the conversion of pre-occu- 
pation balances may be obtained from any of these offices, 
and completed applications should be returned to one of 
these offices.) 

1. Aktiengesellsehaft fur Anstaltskredit, Dahlem, Reichen- 

steiner Weg 24 

2. Allgemeine Deutsche Credit-Anstalt, Neukolln, Selkestr. 

17 

3. Allgemeine Warenfinanzierungs-Gesellschaft m. b. H., 

Wilmersdorf, Euhrstrasse 2 

4. Allegmeine Wirtschaftsbank AG., W. 15, Lietzenburger 

Str. 30 

5. Auslands-Inkasso-Bank G. m. b. H., Wilmersdorf, Zahr- 

inger Str. 26 

6. Backereinkauf- und Backerhank Gros-Berlin e. G. m. b. 

H., SW 61, Mehringdanim 57 

7. Bank der Deutschen Arbeit Aktiengesellsehaft, Wit- 

tenau, Hauptstr. 20. 

8. Bank der Deutschen Luftfahrt Aktiengesellsehaft, 

Friedenau, Wielandstr. 30 

9. Bank fur Brau-Iudustrie, Charlottenburg 2, Uhlandstr. 

11 

10. Bank fur Landwirtschaft, SW 11, Dessauer Str. 26 

11. Bansa & Co., W 15, Kurfurstendamm 173/174 

12. Georg von Bargen, Charlottenburg 5, Spandauer Str. 1 

13. Adolf Becker, Charlottenburg 2, .Tebensstr. 1, Aufg. IV 

14. Bercht & Sohn, Mariendorf, Bosensteinweg 12 

15. Bankgeschaft Berger & Co., Charlottenburg 2, Carmer- 
str. 4 

16. Berliner Handels-Gesellschaft, Schmargendorf, Au- 
guste-Viktoria-Str. 66 

17. Berliner Hypothckenbankverein (Stadtschaft), 2035, 
Am Karlsbad 10 

18. Berliner Pfandbrief-Amt (Berliner Stadtschaft), W 
35, Am Karlsbad 10 



April 10, 1950 



557 



19. 

20. 
21. 

22. 
23. 

24. 

25. 

26. 

27. 

28. 

29. 

30. 

31. 

32. 
33. 

34. 

35. 



37. 

38. 

39. 

40. 

41. 

42. 

43. 

44. 

45. 

46. 

47. 

48. 

49. 

50. 

51. 

52. 

53. 

54. 

55. 

56. 
57. 

58, 

59 



Berliner Stadtbank— Girozentrale der Stadt Berlin—, 
Wilmersdorf, Berliner Str. 40 
Gebr. Berlinieke, Lankwitz, Kaulbachstr. 33/35 
Brandenburglsche Provinzialbank und Girozentrale i. 
L., W 35, Am Karlsbad 4/5 

Max D. Breitkopf, Litchterfelde West, Augiistastr. 10 
Britzer Volksbank e. G. m. b. H., Britz, Chausseestr. 

35a 

Central-Landschafts-Bank, Schlachtensee, Terrassen- 

str. 25 „ . ,_ 

Central-Landschafts-Direktion fur die Preussischen 

Staaten, Friedenau, Rubensstr. 64 
Comes & Co., Charlottenburg 2, Sophienstr. 10 
Commerz bank, Friedenau, Sarrazinstr. 11-15 
Darlehnskasse der Beamten der Reichsversicherung- 
sanstalt fur Angestellte e. G. m. b. H., Wilmersdorf, 
Ruhrstr. 2 ^ . . . ., 

Delbruck Schickler & Co., Nikolassee, Prinz-Fnednch- 

Leopold Str. 40 , .^^ , 

Deutsch-Assiatische Bank, i. Hs. Deutsche Bank Depka 

L 3, Tempelhof, Tempelhofer Damm 
Deutsche Apothekerbank e. G. m. b. H., Schlachtensee, 

Lagardestr. 26a 

Deutsche Bank, W 30, Viktoria-Luise-Platz 9 
Deutsche Bau- und Bodenbank Aktiengesellschaft, 

Charlottenburg 2, Uhlandstr. 6 
Deutsche Beamten-Zentralbank G. m. b. H., Frohnau, 

Zerndorfer Weg 55 „».*■. 

Deutsche Centralbodenkredit - Aktiengesellschaft, 

Charlottenburg 2, Uhlandstr. 7/8 „....,., 

Deutsche EfCecten- und Wechsel-Bank, W lo, Lietzen- 

burger Str. 36 „ ^ .^ ^, 

Deutsche Gartenbau-Kredit-Aktiengesellschaft, Char- 
lottenburg 4, Schluterstr. 38 ^ , . , ^. 

Deutsche Genossenschafts-Hypothekenbank Aktien- 
gesellschaft, Charlottenburg 2, Jebensstr. 1 

Deutsche Gesellschaft fur offentliche Arbeiten Aktien- 
gesellschaft, Charlottenburg 2, Uhlandstr. 6 

Deutsche Gewerbe- und Landkreditbank A. G., W 35, 
Potsdamer Str. 192 

Deutsche Girozentrale-Deutsche Kommunalbank-, 
Charlottenburg 4, Schluterstr. 37 
Deutsche Golddiskontbank, Charlottenburg, Berliner 

Str. 153 . „ „ v. **x 

Deutsche Hypothekenbank (Actien-Gesellschaft), 

Grunewald, Hohenzollerndamm 150 
Deutsche Industriebank, Dahlem, Clay-Allee, Ecke 

Konigin-Luise-Strasse 

Deutsche Kreditsicherung Kommanditgesellschaft, 

Dahlem, Wachtelstr 8 

Deutsche Kredit- und Handelsgesellschaft Aktien- 
gesellschaft, W 15, Kurfurstendamm 52, V 
Deutsche Landerbank Aktiengesellschaft, Lichterfelde 

West, Unter den Eichen 91 
Deutsche Landesbankenzentrale Aktiengesellschaft, 

Cfiarlottenburg 4, Schluterstr 42 
Deutsche Landesrentenbank, Dahlem, Schwendener 

Str. 1 

Deutsche Landvold-Bank Aktiengesellschaft, Wilmers- 
dorf, Saehsische Strasse 42 

Deutsche Pachtbank e. G. m. b. H., Charlottenburg 4, 
Schluterstr. 39, III 

Deutsche Privat-SchifCer-Bank e. G. m. b. H., N 65, 
Westhafen, bei Transport-Genossenschaft. 
Deutsche Reichsbank, Charlottenburg, Berliner Str. 

153 

Deutsche Rentenbank-Kreditanstalt (Landwirtschaft- 
liche Zentralbank), Charlottenburg 4, Schluterstr. 38 
Deutsche Schiffspfandbriefbank A. G., W 35, Schone- 
berger Ufer 67a 

Deutsche Siedlungsbank, W 35, Hitzigallee 26/28 
Deutsche Ueberseeische Bank, Friedenau, Rheinstr. 
45 

Deutsche Unionbank Aktiengesellschaft, Steglitz, 
Schildhornstr. 72 

Deutsche Verkehrs-Kredit-Bank A. G., Dahlem, Clay- 
Allee 30 



558 



60. Deutsche Wohnstatten-Hypothekenbank A. G., Grune- 

wald, Hohenzollerndamm 46 

61. Deutsche Zentralgenossenschaftskasse, Schoneberg, 

Martin-Luther-Str. 58 

62. Deutsch-Sudamerikanische Bank Aktiengesellschaft, 

Wilmersdorf, Zahringer Str 26 

63. Dresdner Bank, Charlottenburg 2, Uhlandstr. 11 

64. Edekabank e. G. m. b. H., Wilmersdorf, Babelsberger 

Str. 40/41 

65. Exportkreditbank Aktiengesellschaft, Waidmannslust, 

Nimrodstr. 91 
66 H. F. Fetschow & Sohn, Charlottenburg, Niebuhrstr. 
75 

67. Finanzierungsgesellschaft fur Industrielieferungen 
A. G., W 15 Lietzenburger Str 14 

68. Finanzierungsgesellschaft fur Landmaschinen Aktien- 

gesellschaft, W 15, Lietzenburger Str. 14 

69. Donald Ilatow, W 15, Lietzenburger Str. 36 

70. A. Fricke & Co., Bankgeschaft, Wilmersdorf, Nas- 

sauische Str. 6 

71. Georg Fromberg & Co. Aktiengesellschaft, W 35, Pots- 
damer Str. 131, I 

72. Gebruder George, Charlottenburg 9, Holderlinstr. 12 

73. Gessellschaft fur Handels- und Industrie kredit, Wil- 

mersdorf, Warneekstrasse 6 

74. Getreide-Kreditbank A. G., Wilmersdorf, Fehrbelliner 
Platz 3 

75. Gildemeister & Co., Dahlem, Clay-Allee 26/28 

76. Globus-Bank Aktiengesellschaft, Halensee, Joachim- 

Friedrieh-Str. 52 

77. Grundbesitz und Handelsbank A. G. i. L., Grunewald, 
Bismarckallee 26 

78. Hagen & Co. i. L., Grunewald, Bismarckallee 26 

79. Hamel & Co., Landwitz, Corneliusstr. 22 

80. Handels-Kredit-Aktiengesellschaft, W 15, Saehsische 

Str. 6 

81. Hardt & Co., Dahlem, Helfferiehstr. 12 

82. Hardy & Co. G. m. b. H., Wilmerdsdorf, Fehrebelliner 

Platz 2 

83. G. Haslinger Sohne, Wilmersdorf, Ahrweiler Str. 23 

84. V. Heinz, Tecklenburg & Co., Grunewald, Salzbrunner 

Str. 25 

85. Hilfskasse gemeinnutziger Wohlfarhtseinrichtungen 

Deutschlands GmbH., Dahlem, Reichensteiner Weg 24 

86. Jacquier & Securius, W 15, Meinekestr. 26 

87. Kabel & Co., SW 11, Dessauer Str. 32 

88. Alfons Kassel, Wilmersdorf, Am Volkspark 87a 

89. Koehler & Ihlenfeldt, Wilmersdorf, Kaisen'latz 17. 

90. Ernst Kohlt. Nikolassee, Paul-Krause-Str. 3a 

91. Kopenicker Bank e. G. m. b. H., Leitstelle West, Neu- 

kolln, Karl-Marx-Strasse 15 

92. Kreditbank Privater Leihhausbetriebe e. G. m. b. H., 
Neukolln, Hermannstrasse 106/7 

93. Oswald Kruber, Waidmannslust, Boudickstr. 22 

94. Kunden-Kredit-Genossenschaft fur Spandau und Um- 
gegend e.G.m.b.H., Spandau, Falkenhagener Str. 37 

95. Kur- und Neumarkische Ritterschaftliche Darlehns- 

Kasse, Schlachtensee, Terrassenstr. 25 

96. Landschaftliche Bank fur Brandenburg (Central- 

Landschafts-Bank), Schlachtensee. Terrassenstr. 25 

97. Landwirtschaftliche Spar- und Darlehnsbank Kurmark 

e.G.m.b.H., Templehof, Kaiser-Wilhelm-Str. 55e 

98. Landwirtschafts- und Gewerbebank e.G.m.b.H., Kla- 

dow, Strasse 107 

99. J. Loewenherz, Charlottenburg 4, Cahlmannstr. 23 

100. Otto Markiewicz, Lichterfelde-Ost, Berliner Str. 155a 

101. F. Meissner & Co. Nachf., Charlottenburg 5, Kantstr. 
75 

102. Merck, Finck & Co., Steglitz, Peschkestr. 10 

103. E. J. Meyer, W 30, Maienstr. 3 

104. Th. Ernst Neumann, Schoneberg, Badensche Str. 7 

105. Karl Papenberg Bank Kommanditgesellschaft, W 30, 
Goltzstr. 38 

106. Hans W. Petersen, Zehlendorf.Winfriedstr. 13 

107. W. Pohle & Co., Grunewald, Konig.salle 19 

108. Fritz Pontow, Lichterfelde West, Tulpenstr. 5 

Department of Sfofe Bw//ef/n 



101). 
110. 

111. 

112. 
113. 
114. 
115. 

lie. 

117. 
118. 
119. 
120. 

121. 
122 



123. 

124. 

125. 
126. 

127. 

128. 

129. 

130. 

131. 

132. 

133. 
134. 

135. 

136. 

137, 

138, 

139, 

140. 
141, 

142 

143 

144. 



Post-, Spur- w. Darlehnsverein, Clmrlotteiiburg 9, 
Deruburgstr. 50 

Wilhelm Praoilt'l & Co., W 15, Kurfur.stondaiiitn 54 
rreus.-iiclio Lniuli'spfiiiulbrii'famlstalt, W 50, Augs- 
burgor Str. 6S, iltlis. Ill 

rreussiscbo Staatsbaiik (Seehandlung), Charlotten- 
burg, Kasanenstr. 7/8 

Preussiscbe Zentralstndtsebatt, Schoneberg, Ba- 
denst'be Str. 2 
Keichs-Kredit-Gesellscbaft A. G., W 15, Lletzeiiburgpr 

Str. 3(5 

A. Rei.ssner Solino, Scbmargendorf, Kosener Str. 8 

Hans Koeber KouuuaiulitwscUscliaft, Cbarlottenburg 
4. Mommst>nstras.-;o 9. II 

Fritz G. Samlaiul, GnuiowaUl, Fraiizi.'iisl>ader Str. 34 

Scbeurmanii & Co.. W 15, Kurfursteiulanim 5(> 

Ricbard Sc-hreib, Charlotteuburg 5, Witzlotieiiiilatz 5 

Uiuis Sixtiis & Co., Temijelbof, Manfred-v.-Uiebt- 
bofen-Str. 19 

Spandauer Bank e. G. ni. b. H., Spandau, Marktplatz 1 

Sparkasse der Stadt Berlin West, Wilinersdorf, Ber- 
liner Str. 40 und folgende West-Berliner Zweigstellen ; 
NW 87, Huttenstr. 72 : W 35, Potsdanier Str. 1(K) ; N 
65, MuUer.str. 130; SW 61, Obentraut.str. 2/Mehring- 
damm 10: SO 36, Kottbusser Str. 8; Cbarlottenburg, 
Kantstr. 17; Cbarlottenburg, Reicbskanzlerplatz 8; 
Spandau. Brunsbuttler Damm 15 : Wilmersdorf , Ber- 
liner Str. 40; Zehlendorf, Teltower Dauim 21; Schone- 
berg, Rudolf-Wilde-Platz Ratbaus; Steglitz, Scbloss 
Str. 36; Lisbterfelde, Gardesehutzenweg 142; Licbter- 
felde, Lankwitzer Str. 24; Tempelbof, Tempelbofer 
Damm 149/150; NeukoUn, Karl-Marx-Str. 107; Neu- 
koUn, Hermannstr. 162/63 ; SW 29, Hermannplatz 5/6 ; 
Reinickendorf, Residenzstr. 39; Tegel, ScbUeperstr. 
76; Hermsdorf, Heinsestr. 38/40 

Sparkasse des Kreises Teltow, Steglitz, Albrechtstr. 
28 

Spar- und Kreditbank evangelisch-freikircbl. Ge- 
meinde e. G. ni. b. H.. Lichterfelde. Weddingenweg 60 

Karl W. Spiegel, Friedenau, Wiesbadener Str. 3 

Sponholz, Ehestadt & Scbroder Bankkommondit- 
gesellschaft, Cbarlottenburg 2, Ublandstr. 11 

Sponholz & Co. Bank-Kommanditgesellschaft, W 35, 
Potsdamer Str. 141 

Stadtscbaft der Mark Brandenburg, W 35, Schone- 
berger Ufer C5 

August Tbyssen-Bank A. G., W 15, Kurfur.stendamm 
56 

Treubau Aktiengesellsebaft fur Bauflnanzierungen 
im Deutschen Reiche, Dahlem, Ehrenbergstr. 27 

Umschuldungsverband deutscber Gemeinden (Um- 
scbuldungsverband), Cbarlottenburg, Fasanenstr. 7/8 

Verkaufskredit-Bank Aktiengesellsebaft, Dahlem, 
Clay-AUee, Feke Konigin-Luise-Str. (Deutsche Indus- 
triebank) 

J. H. Vogeler & Co., Zehlendorf, Dablemer Weg la 

Volksbank Berlln-Friendricbstadt e. G. m. b. H., W 15, 
Lietzenburger Strasse 14 

Volksbank Cbarlottenburg e. G. m. b. H., W 62, Wit- 
tenbergplatz 2 

Volksbank Friedenau-Schoneberg e. G. m. b. H., 
Friedenau, Scbmargendorfer Str. 6 

Volksbank Gesundbrunnen e. G. m. b. H., N 20, Badstr. 
20 

Volksbank Licbtenrade e. G. m. b. H., Lichtenrade, 
Babnbofstr. 17 

Volksbank Mariendorf e. G. m. b. H., Mariendorf, 
Hochgallweg 13 

Volksbank Moabit e. G. m. b. H., NW 21, Turmstr. 77 

Volksbank Spandau e. G. m. b. H., Spandau, Moritzstr. 
23 

Volksbank Steglitz e. G. m. b. H., Steglitz, Kuhligks- 
hof 3 

Volksbank Wannsee e. G. m. b. H., Wannsee, Chausee- 
str. 13 

Volksbank Wilmersdorf e. G. m. b. H., Cbarlottenburg, 
Kantstr. 116. Anmeldestellen fur Postseheck-Konten 



und Poslsparkassen-Konten sind die Postamter im 

Wolinbezirk. 



THE NEW FINANCIAL INSTITUTIONS 

(These firms are currentl.v in operation and may be 
designated as depositories for converted balances.) 

1. Bankgescbaft Marx & Co., Chariot lenburg, Carmcrstr. 4 

2. BaiUvgesellscbaft Berlin A. (J. (fruber: Bankbaus Hol- 

beck K. G.), Friedenau, Rbein.strasse 55. 

3. Berliner Bank fur Handel uud Industrie A. G., Char- 

iottt'iiliurf,', Kant-strasse 17/Kcke Ublandstrasse, 
sowie nachsteliende iJeixjsitenkassen : Schoneberg, 
Hauptstrasse 19; Tempelbof, Tempelbofer Damm 138; 
Zehlendof, Teltower Damm 27 ; Friedenau, Ubein- 
strasse 2; NW 21, Stromstrasse 58; SW 29, Kottbuser 
Damm 79 ; N 65, Mullerstrasse 6 ; Spandau, Karl- 
Schurz-Strasse 31. 

4. Berliner liau- und Bodenbank A. G., Cbarlottenburg, 

Ublandstrasse 6. 

5. Berliner DLsconto Bank A. G., W 35, Potsdamer Strasse 

131, sowie nacbstebende Dei)ositenkassen : Cbarlot- 
tenburg 4, Bisniarckstr. 68 ; Friedenau, Kheinstrasse 
4.5/46; Tempelbof. Tempelbofer Damm 126; W 15, 
Kurfurstendamm 217. 

6. Berliner Handels-Bank A. G. (fruber: Berliner 

Handels-Bank Berckemeyer und Broege K. G.), 
Schmargendorf, Augu.sta-Viktoria-Strasse 66. 

7. Berliner Stadtkontor West mit nachstehenden ge- 

schaftsstellen : Cbarlottenburg 4, Bismarckstrasse 
48-52 ; W 15, Kurfurstendamm 59/00 ; Cbarlottenburg 
9, Kaiserdamm 95; Friedenau, Rbeinstrasse 1 (Rat- 
baus) ; SW 61, Mehringdamm eO-22; SO 36, Kope- 
nicker Strasse 1 : SW 68. Oranienstrasse 58 (Moritz- 
platz) ; Neukolln, Gandhoferstrasse 2; Neukolln, 
Karl-Marx-Strasse 1 (Hermannplatz) ; Neukolln, 
Hermannstrasse 148 ; Neukolln, Hermannstrasse 212 ; 
Reinickendorf Ost, Hauptstrasse 40 ; Reinickendorf 
West, Scbarnweberstrasse 67 ; Hermsdorf, Waldsee- 
weg 3 ; Tegel, Berliner Strasse 91 ; Wittenau, Oranien- 
burger Strasse 205 ; Schoneberg, Innsbrucker Strasse 
35 ; Schoneberg, Kaiser-Wilhelm-Platz 3 ; Schoneberg, 
Bayeriscber Platz 9; W 30, Motzstrasse 54; Spandau, 
Askanierring 179/80; Spandau, I'icbelsdorfer Strasse 
92 ; Siemensstadt, Reicbsstrasse 20 ; Steglitz, Schloss 
Strasse 36; Lichterfelde West, Baseler Strasse 3; 
Lichterfelde Ost, .Jungfernstieg 26a ; Tempelbof, 
Templehofer Damm 143; Mariendorf, Mariendorfer 
Damm 82 ; Licbtenrade, Bahnbofstrasse 19 ; Marien- 
dorf ( Fruchthof ) , Ratbausstra.sse 42-49 ; NW 40, Alt- 
Moabit 109 ; W 35, Potsdamer Strasse 71 ; N 05, Mul- 
lerstrasse 146/47 ; N 20, Prinzenallee 81 ; Wilmersdorf, 
Ublandstr. 122; Halensee; Kurfurstendamm 130; W 
15, Kaiserallee 1-12 ; Schmargendorf, Warnemunder 
Strasse 1 ; Zehlendorf, Teltower Damm 16-18 ; Niko- 
lassee, Hobenzollernplatz 5 (Rathaus). 

8. Berliner Volksbank eGmbH., W 30, Wittenbergplatz 2 ; 

Britz, Cbausseestrasse 35a; N 20, I'.adstrasse 20; 
Licbtenrade, Bahnbofstrasse 17 ; Mariendorf, Marien- 
dorfer Damm 77 ; NW 21, Turmstrasse 77 ; Neukolln, 
Karl-Marx-Strasse 15 ; Spandau. Moritzstrasse 23 ; 
Steglitz, Kubligksbofstrasse 3 ; Tempelliof, Tempel- 
bofer Damm 182-184 ; Wann.see, Cbausseestrasse 13. 

9. Ernst Decot, W 30, Kurfurstendamm 234. 

10. Genossenscbaftsbank Scboneberg-Friedenau eGmbH., 
Friedenau, Scbmargendorfer Strasse (!. 

11. Outtebtag & Goldscbmidt, W 15, Kurfurstendamm 213. 

12. Heinz Henschel Bankgescbaft (f ruber Ilanscbel & 

Sobn), Steglitz, Schloss Strasse 93. 
.13. Han.s-Karl von Jena, Bankgescbaft, Cbarlottenburg, 
Holilerlinstrasse 12. 

14. Kreditbank fur Gartenbau und Landwirtschaft KGaA., 

Cbarlottenburg, Scbluterstrasse 38. 

15. Kurth & Co. Bank-Kommanditgesellscbaft, Zehlendorf, 
Konigstrasse 1. 



April 10, 1950 



559 



16. Leising & Co., W 30, Budapester Strasse 42-46. 

17. Neuendorf & Co. KO., Bankgeschaft, Lankwitz, Cor- 
neliusstrasse 22. 

18. Postscheckamt Berlin West, Charlottenburg, Dern- 
burgstrasse 50. 

19. Otto Scheurmann Bank-Kommanditgesellschaft, W 15, 
Kurfurstendamm 56. 

20. Sparkasse der Stadt Berlin We.st, Wilmersdorf, Ber- 
liner Strasse 40, mit folgenden Spar- und Girokassen : 
NW 87, Huttenstrasse 72 ; W 35, Potsdamer Strasse 
100; N 65, MuUerstrasse 130; SW 61, Obentraut- 
strasse 2/Meliringdamm 10 ; SO 36 Kottbusser Strasse 
8; Charlottenburg, Kantstrasse 17; Charlottenburg, 
Reichskanzlerplatz 8; Spandau, Brunsbutteler Damm 
15 ; Wilmersdorf, Berliner Strasse 40 ; Zehlendorf , 
Teltower Damm 21 ; Schoneberg, Rudolph-Wilde-Platz, 
Rathaus ; Steglitz, Sehlossstrasse 36; Lichterfelde, 
Gardeschutzenweg 142 ; Lichterfelde, Lankwitzer 
Strasse 24 ; Tempelhof , Tempelhof er Damm 149/150 ; 
Neukolln, Karl-Marx-Strasse 107 ; Neukollu, Hermann- 
strasse 162/163 ; SW 29, Hermannplatz 5/6 ; Reinick- 
endorf, Residenzstrasse 39; Tegel, Schlieperstrasse 
76; Hermsdorf, Heinsestrasse 38-40. 

21. Spar- und Darlehnsverein der Berliner Postangehori- 
gen, Charlottenburg, Dernburgstrasse 50. 

22. Hans Weber KGaA., W 30, Kurfurstendamm 14/15. 



Application for Securities of Non- 
German Origin in Western Germany 

[Released to the press Mareh SO] 

DATE FOR DEADLINE ANNOUNCED 

In view of the nearness of the deadline for ap- 
plication for release of cnrrencies and securities 
covered by the Allied High Commission announce- 
ment of March 24, 19.50, the Dejiartment of State 
today called attention to that announcement. 

Persons or corporations are requested urgently to 
submit their application for release of the cur- 
rencies- and securities to the authorities specified 
in the press release before June 30, 1950, if they 
have not heretofore done so. 



HIGH COMMISSION ANNOUNCEMENT 
OF MARCH 24, 1950 

The Allied High Commission today announced : 

1. Under the terms of a press release issued jointly on 
September 1, 1948 by the United States, United Kingdom 
and French military governments, all persons not subject 
to Control Council Law No. 5 who own non-German cur- 
rencies or securities in currency not of German issue held 
by the Military Governments under the provisions of 
Military Government Law number ,53, were invited to 
submit application for the recognition of their title to 
such currencies or securities. Applications could be filed 
with the appropriate office of Military Government up to 
December 31, 1948. 

2. Under an agreement of the Allied High Commission 
the time limit for submission of such aiiplicalions has 
been extended to .Tune 30, lO.'iO. Api)lications which have 
already been submitted need not be repeated. 



3. In announcing this extended period for submission of 
applications, the Allied High Commission draws attention 
to the fact that persons (natural and juristic) in tbe fol- 
lowing categories are included within the definition or 
"persons not subject to Control Council law number 5." 

(a) German citizens outside Germany, if they submit 
proof that they have been residing outside Germany since 
before September 1, 1939 and did not aid Germany during 
the war. A certificate from a governmental authority in 
the country or countries of residence establishing the 
above must be submitted with the application ; 

(b) Corporations organized under the laws of any 
country other than Germany, regardless of the percentage 
of German interest, if any, in such corporations. Corpora- 
tions sliould present evidence of the amount of non-Ger- 
man interest. 

4. The Allied High Commission also announces that it 
is prepared to consider applications from victims of Nazi 
persecution resident in Germany, provided evidence is 
submitted : 

(i) That such persons were deprived of liberty pursuant 
to any German law, decree or regulation di.?criminating 
against religious or racial groups or other organizations, 
and 

(ii) That such persons did not enjoy full rights of 
German citizenship at any time between September 1, 1939 
and the abrogation of such law, decree or regulation, and 

(iii) That .such persons did not act against the Allied 
cause during the war, and 

(iv) That their cases merit favorable consideration. 

5. Consideration will also be given to applications from 
corporations in Germany which are 25 percent or more 
beneficially owned by United Nations nationals or victims 
of Nazi persecution as defined in paragraph 4 above, or 
which present proof of treatment by Germany as enemy 
or under enemy control. 

6. Filing of a claim with the Allied High Commission 
does not imply recognition of title, or that title will sub- 
sequently be recognized. Moreover, recognition of title 
by the Allied High Commission does not imply recognition 
of the applicant's claim by the country of issue or the 
current validity of securities or currencies in the country 
of issue. 

7. A person desiring recognition of title to securities 
or currencies will lie required to submit evidence to demon- 
strate exclusive ownership of the currencies and securities 
involved and the freedom of such currencies and securities 
from claims for external or internal restitutions. 

8. External restitution claims are those filed by govern- 
ments eligible for restitution to cover property removed 
from such countries during their occupation by Germany. 
Exemption from external restitution may be shown by sub- 
mission of proof that the property has been owned ex- 
clusively since Septemlier 1, 1939 and was not removed 
from a country occupied by the Germans during the 
German occupation. Internal restitution claims are those 
filed by persons for recovery of property taken from them 
under duress in Germany for racial, religious or political 
reasons at any time after January 30, 1933. Exemption 
from internal restitution may be shown by proof of con- 
tinuous ownership since that date. 

0. The Allied High Commission has further agreed to 
permit removal from Germany of foreign currencies and 
foreign securities title to which has been recognized when 
the recognized owner is not a resident of Germany. 

10. Applications should be addressed in the United 
States Zone of occuiiation to: Ofiice of the United States 
High Commissioner for Germany, Office of Economic 
Affairs, Finance Division, Foreign Securities Section, Al'O 
742. 

In the British Zone of occupation to ; HQ, Investigation 
Branch, Finance Division, HQ, R/B Duesseldorf, 318 HQ, 
CCG, (BE),BAOR4. 

In the Frencli Zone of occupation to: Caisse Central 
des Titres Etrangercs, Landau, Pfalz. 



560 



Department of Stale Bulletin 



U.S.S.R. Asked To Reinstitute 
Diplomatic Discount Rates 

[Releaaed to the press March «7] 

The following is the text of a note delivered to 
the Soviet Ministry of Foreign Affairs in Moscow 
on March 24, 1950: 

Excellency, I have the honor, on instructions 
to refer to Your Excellency's circular note of 
February 28, 1950, advising the Embassy that the 
Council' of Ministers of the Union of Soviet 
Socialist Republics has decreed that the special 
discount arrangement under which diplomatic 
representatives in the Soviet Union may buy rubles 
with foreign currencies in limited quantities is 
established at reduced level for the period March 
1 through June 30, 1950, and will be abolished 
from July 1, 1950. 

Tlie Government of the United States cannot 
accept the reasons advanced in your circular note 
of February 28 as justifying the indicated reduc- 
tion and early abolition of the special diplomatic 
discount arrangement. Need for such special ar- 
rangement was recognized by the Soviet Govern- 
ment itself through adoption of the original 
preferential rate in 1941 in an effort to equalize the 
purchasing power of the ruble with prevailing 
world prices. The need for such an arrangement 
still exists. Although the concept of an exchange 
rate for the ruble in the accepted sense is, of course, 
purely fictitious so long as the ruble is not an in- 
ternationally traded currency; nevertheless, it is 
possible to make a comparison of prices paid by 
members of the Soviet Embassy staff in Washing- 
ton with prices paid by United States Embassy 
personnel in Moscow. Despite some reduction in 
the Soviet price level since December 1947, prices 
in Moscow are extremely high relative to prices 
in "Washington. For example, white bread from 
first grade flour was approximately 24 cents per 
kilo in Washington in December 1947 and is cur- 
rently 26 cents per kilo. In Moscow white bread 
from first grade flour was 7 rubles per kilo in De- 
cember 1947 and now, after recent ]>rice reductions, 
is 5.60 rubles per kilo. At the discount rate of 8 
rubles per dollar then established, the Moscow 
price of white bread in December 1947 was equiva- 



f 



lent to over 87 cents per kilo as compared with 24 
cents per kilo in Wasliington. The present Mos- 
cow price of white bread on the 4 ruble per dollar 
basis available to dii)lomatic representatives after 
June 30, 1950 is equivalent to $1.40 per kilo as 
compared with (he current Wasliington price of 26 
cents per kilo. At tlie 8 rubles per dollar discount 
rate, the Moscow price of butter was equivalent to 
$8 per kilo in December 1947, as compared with 
the Washington price of from $1.71 to $1.87. The 
present Moscow prices for butter on the 4 ruble 
er dollar basis are equivalent to from $8.58 to 
11.03 per kilo as compared with the current 
Washington price of $1.52 per kilo. Attention is 
also invited to the fact that price reductions re- 
cently announced do not include any reductions 
in such cost of living items as rent. These and 
additional comparisons contained in the appendix 
of this note show conclusively that in view of the 
continued low purchasing power of the ruble, the 
abolition or reduction of the preferential rate for 
diplomatic representatives is completely unjusti- 
fied. 

It is also stated that the buying power of the 
United States dollar has declined because of a 
continuing rise in living costs in the United States. 
The index of the cost of living in the United States 
published in the monthly bulletin of statistics of 
the United Nations stood at exactly the same figure 
in December 1947 when the diplomatic discount 
basis was reduced from 12 to 8 rubles per dollar 
as it did in January 1950, the most recent month 
for which a figure has been published. Since the 
cost of living was the same in the United States 
on these dates, no basis exists for justifying a re- 
duction in the diplomatic discount rate from 8 to 
4 rubles per dollar on grounds of a living cost 
increase in the United States. 

The Government of the United States accord- 
ingly wishes to reiterate that it finds no basis for 
the contentions of the Soviet Government in its 
circular note of February 28 that the reduction and 
abolition of the diplomatic discount rate is justi- 
fied and requests that this rate be promptly rein- 
stituted. 

Accept [etc.] 

Walworth Barbour 

Charge D'' A f aires Ad Interim 



APPENDIX 



Item 

White Bread (kilo) 
Milk fluid riiter) 
Beef first grade (kilos) 
Butter (kilo) 
Tea (kilo) 
Coffee (kilo) 



Present 
Dollar 
Price, 
Washing- 
ton 

26^ 

20(' 

$1.39 

$1.52 

$1.39 

$1.54 



Dec. 1947 Dollar 
Price, Washing- 
ton 

23. 5(1 to 24.3(f 
20.1(' to 22.8(1 
$1.30 to $1.52 
$1.71 to $1.87 
$2 20 
84^9^ to $1.12 





Dec. 1947 




Dec. 1947 




Ruble 


Present Price Mos- 


Price Mos- 


Present Ruble 


Price, 


cow in Dollars at 


cow in Dol- 


Price, Moscow 


Moscow 


4 to 1 


lars at 8 to 1 


5.60R 


7R 


$1.40 


f>.7.5i 


3.78R 


3 to 4R 


94.5(S 


37M to 50^ 


24.3R 


30R 


$6,075 


$3.75 


34.3Rto44.1R 


64 R 


$8,575 to $11,025 


$8.00 


162R 


160R 


.$40.50 


$20.00 


79.2R 


75R 


$19.80 


$9,375 



April 10, 1950 

880445— BO— 



561 



Objectives of U.S. Policies Toward Asia 



&y Ambassador Loy W. Henderson ^ 



I appreciate the courtesy of the Indian Council 
of World Affairs in inviting me to discuss with its 
members and guests certain aspects of the policies 
of the United States with regard to Asia. Mem- 
bers of the Council are, in general, so well-in- 
formed regarding matters pertaining to Asia, in- 
cluding relations between United States and Asia, 
that I fear that what I have to say may not add 
appreciably to their store of knowledge. 

Nevertheless, I hope that our talk this afternoon 
may enable some of them to obtain a somewhat 
more clear understanding of the feelings of my 
countrymen toward Asia and of the manner in 
which these feelings find expression of policies of 
my Government. A government constituted like 
that of the United States can, for no great length 
of time, pursue any foreign policy which does not 
reflect the interests, desires, fears, and hope-s of the 
people from whom it derives its authority. 

Most people of the United States, or their an- 
cestors, migi'ated from Europe to America at some 
time during the last 300 years in search of free- 
doms or opportunities which they had failed to 
find in various countries of their origin. The re- 
lation between the people of the United States 
and the continent of their origin had been com- 
paratively close. Their language was of Euro- 
pean origin, and they inherited much of the culture 
and tradition of Europe. Furthermore, Europe, 
from a geographical point of view, was more easily 
accessible than any of the other continents, and it 
was possible for Americans to travel freely and 
safely on that continent without inconvenience or 
discomfort. 

On the other hand, Asia was more remote from 
North America than any other continent. Travel 
between North America and Asia was not always 
agreeable. The governments of some parts of 
Asia did not particularly welcome foreigner. In 



' Exocrpts from an address mnde before the Indian Coun- 
cil of World Affairs at New Delhi on Mar. 27, 1950, and 
released to the press on the same date. 



other parts, peoples had lost their freedom and 
were under the domination of foreign powers 
which did not look kindly upon the development 
of close relations between their colonial peoples 
and other independent countries. In such circum- 
stances it has been only natural that the peoples of 
the United States have had comparatively close 
relations with the countries of Europe and have 
had better understanding of the culture and tradi- 
tion of Europe than those of Asia. 

During the last 50 years, as improved means of 
communication transformed a sprawling world 
into a relatively small community of nations and 
as natural artificial barriers to intercourse between 
the United States and Asia disappeared, the in- 
terest of the people of the United States in those 
of Asia began to grow. The people of the United 
States feel that they have much to learn from the 
ancient civilizations of Asia and, on their own part, 
are glad to place at the disposal of Asia the results 
of their own experiences and experiments in tech- 
nical, economic, and cultural fields. 

Global Character of U.S. Policies 

It should be borne in mind, in considering vari- 
ous policies of the United States in respect to 
Asia, that the United States does not pursue one 
set of policies with regard to the Americas or 
Europe and another with regard to Asia. 

The foreign poHcies of the United States by 
force of circumstances have become global in 
character. Tlie membership of most of the coun- 
tries of tlie world in the United Nations operating 
under a charter setting forth universal principles 
of conduct is evidence of the fact that no longer 
can any nation justify the application of one code 
of international morality to the peoples of one 
continent and another code to those of another. 
The United States, therefore, approaches special 
situations and problems in Asia from the point of 
view of its general foreign policies. 



562 



Department of State Bulletin 



Handicaps In Realizing Objectives 

A iuiinl)t>r of factors liandicaps or partially otr- 
sets the etl'orts of the United States to realize its 
forci<j;n i)oli<,'y objectives in Asia, just as similar 
or other factors render the success of its foreijjn 
policies diflicult with respect to other continents. 
In regard to Asia, some of these factors ilow from 
inadequacies or inabilities, so far as the United 
States itself is concerned. For instance, deficiency 
of knowledge and undei-standing, on the part of 
large sections of the American people, of the 
points of view and the particular problems of 
various peoples of Asia sometimes results in lack 
of action, when action should be taken, or in the 
wrong kind of action. Only by a more intensive 
exchange of information and by establishment of 
more numerous and broader contacts between the 
peoples of the United States and those of Asia 
can this deficiency be overcome. 

Insufficiency of human and natural resources in 
the United States in the face of the world-wi(l(> 
demand being made upon them renders it impos- 
sible sometimes for the United States to give as 
much technical and economic aid to the countries 
of Asia and of other continents as it would like to 
extend. The United States is sincerely endeavor- 
ing to utilize such resources as it possesses in a 
manner tliat they will yield the maximum effective 
results in the attainment of its foreign-policy 
objectives. 

Some of the factors which serve to vitiate the 
efforts of the United States to carry out its foreign 
policy as far as Asia is concerned find their origin 
in fhe attitudes of sections of the population of 
various Asian countries. For instance, in some 
parts of Asia, for historic reasons, which time does 
not permit me to dwell upon here, many of the 
people show a high degree of sensitivity at any 
action on the part of foreigners which might even 
remotely be construed as an effort to influence the 
conduct of their internal affairs or of their rela- 
tions with other countries. This sensitivity in 
some instances is so acute that the United States 
hesitates to take or suggest certain measures which 
might be helpful for fear that such action may do 
more harm than good. 

Elements of Mistrust of U.S. Motives 

Then, just as many Americans are lacking in a 
knowledge and understanding of the peoples of 
Asia there are numerous persons and groups in 
Asia who are not acquainted with the people of 
the United States and who, therefore, frequently 
misjudge and distrust their motives. There are, 
for instance, still many people in Asia who are 
sincerely convinced tliat efforts on the part of the 
United States to extend technical or financial aid 
are prompted not by a desire for a peaceful, or- 
derly progressive world but by some kind of 
economic imperialism. 

There are other people who really believe that 



action taken by the United States through the 
United Nations or througli oIIut clianncls for the 
))urpose of ell'i'ctiiig peaceful settlements of dis- 
putes and dissipating hatreds and rivalries are 
motivated by great powei' politics and selfish con- 
siderations. It is obvious that so long as this lack 
of understanding and constant distrust exists the 
constructive efforts of the United Slates so far as 
Asia is concerned will continue to be handicapped. 

There are also in various parts of Asia influen- 
tial groups who apparently do understand and 
appreciate the objectives of the United States with 
regard to Asia but who shrink from close cooper- 
ation with the United States lest such coojieration 
create hostility toward them on the part of power- 
ful forces of the world which feed on human pov- 
erty and suffering, which rely on force and terror 
to achieve their ends and which look with disfavor 
upon any association of free nations that might be 
effective in overcoming poverty, liquidating strife, 
or discouraging aggression. 

The existence in various areas of national, re- 
ligious, race, class, and other animosities also 
renders diflicult efforts to bring about a prosperous, 
peaceful, free, and progressive Asia. Tliese ani- 
mosities, some of which have an historical basis 
and some of which are of a comparatively recent 
artificial creation, at times, so obsess the minds of 
men that they lose all perspective and fail to act as 
rational human beings. Hatred is a destructive 
rather than a constructive emotion and, therefore, 
is one of the most effective weapons of those world 
forces, the objectives of which, in Asia and else- 
where, are diametrically opposed to those of the 
United States. It is the policy of these forces 
continually to fan these hatreds and to encourage 
their expression through violence and terror. 

It seems hardly necessary, in view of what I 
have already said, for me to state that the United 
States has no territorial ambitions with regard to 
Asia and no desire to obtain for itself any special 
political or economic position in Asia. As a re- 
sult of the war, the United States found itself, 
however, in occupation of two areas of Asia, 
namely. South Korea and Japan. The United 
States" withdrew its forces from South Korea as 
soon as a representative government could be es- 
tablished, and its main interest with regard to that 
war-stricken country at the present time is to aid 
its people to maintain their indei^endence and to 
assist in laying the basis for a democratic, self- 
supporting, and self-respecting state which can 
contribute to the stability and prosperity of a 
peaceful Asia. 

A\nien, in 19-15, the military forces of the United 
States and of its Allies entered Japan, their mosii 
urgent task necessarily was to dismantle Japan's 
powerful military machine and to destroy Japa- 
nese war jxjtentials in order to make sure that 
Japanese militarists would not be in a position to 
threaten world peace. This task has been prac- 
tically completed. Concurrently, with the execu- 



April 10, 1950 



563 



tion of this task, the United States and other 
occupying powers have been endeavoring to assist 
the Japanese people in rehabilitating themselves 
and in preparing Japan for its place as a peaceful 
and respected member of the international com- 
munity. 

Policies Toward Far Eastern Countries 

JAPAN 

They have tried to make the Japanese people 
understand the hon-or of vpar, the stupidity of 
theories of racial or national superiority, and the 
dangers inherent in irresponsible autocracy and 
militarism. They have encouraged the introduc- 
tion of governmental reforms, including the 
drawing up of a constitution along democratic 
lines. 

In the economic field, during the period of occu- 
pation, there has been carried on in Japan a 
democratic program involving the abolition of the 
so-called Zaibatsu economic oligarchy, the estab- 
lishment of a free and healthy system of economic 
enterprise, the development of a strong and sound 
free trade union labor movement, and a land re- 
form. Attempts are being made to solve one of 
Japan's most serious problems in the present inter- 
national situation, namely, the rehabilitation of 
the Japanese economy on a self-supporting basis. 
Since Japan must import a minimum of 3 million 
tons of foodstuffs annually in order to feed its 
population, ways and means are being sought for 
increasing Japan's exports without unduly dis- 
turbing existing trade channels. Considerable 
progress is being made in this direction. 

It is the view of the United States that Japan's 
continued success with democratic government 
depends primarily on that nation's ability to sus- 
tain itself economically as well as on the extent to 
which the remaining free democratic nations of 
the world will accept and cooperate with Japan in 
the mutual task of preserving peace and demo- 
cratic principles. The United States, therefore, 
hopes that the new Japan will gradually be ac- 
cepted as another democratic nation working for 
the same freedoms, for the same betterment of 
mankind, and for the same high ideals which all 
democratic countries are seeking to uphold. 

The United States does not desire to continue 
indefinitely in Japan as an occupying power. For 
some time, it has felt that the conclusion of a peace 
treaty with Japan is an urgent matter. Some 2 
years ago, it proposed a preliminary conference 
for the setting up of procedure for the negotiation 
of such a treaty. 

Unfortunately, progress, thus far, has been 
blocked by the failure to reach an agreement with 
the Soviet Union as to what powers should par- 
ticipate in the negotiation. The Soviet Union 
has insisted that the Japanese peace treaty is a 
matter for primary consideration by the Council 



of Foreign Ministers where each power has a veto ; 
whereas, the United States and various other 
powers have taken the view that all 13 member 
nations of the Far Eastern Commission, including 
India, should have an equal right of participation. 
Unfortunately, no way has yet been found out of 
this deadlock. 

I would be lacking in frankness if I should give 
the impression that the United States, after having 
participated in disarming Japan, has any intention 
with or without a peace treaty of withdrawing 
from that country under conditions which would 
leave it defenseless before an aggressively inclined 
neighbor which has too frequently demonstrated 
that it follows a policy of expansion wherever it 
finds weakness. 



THE PHILIPPINES 



Similarly, it is not the intention of the United 
States to remain quiescent in case any aggi'essive 
power should attack the Philippines. The United 
States feels a deep responsibility for this young 
republic. For years it pursued a policy of de- 
veloping the Philippine people for their eventual 
independence, and it has followed, with sympa- 
thetic interest, the progress of the Philippines as 
an independent country. Few countries suffered 
more than the Philippines from the ravages of the 
war. The United States has given them extensive 
economic aid since the war, and, by mutual agree- 
ment, it has established military bases in the Phil- 
ippines for our common defense against armed 
aggression. 

Although the Philippines, at the present time, 
do not seem to be in danger of an armed attack 
from without, they still have enormous economic 
difSculties to overcome. The economic future of 
the Philippines now depends primarily upon the 
efforts of the Philippine Government and of the 
people themselves. The United States, however, 
is prepared to consider how it can best assist these 
efforts. 



INDONESIA 

The Asian country which has most recently 
joined the international community as an inde- 
pendent nation is Indonesia. The United States 
devoted much effort to the end that the birth of 
this new nation should be achieved with as little 
human suffering as possible and should take place 
without the creation of deep-seated hatreds of last- 
ing vindictiveness. 

The United States and the other nations, assum- 
ing a similar position in this respect, have been, 
at times, during the last 2 years, victims of mis- 
representation and of misguided and, at times, 
malicious criticism. The world can be thankful 
primarily to the high statesmanship of the leaders 
of Indonesia and the Netherlands for the example 
of patience, perseverance, and courage which they 



564 



Department of State Bulletin 



displayed in brinpin" to a close a dispute whicli 
was painful to fiicnils of both parties and a men- 
ace to the peace. Immediately followinji estab- 
lishment of Indonesian indei)eudence, the United 
States, at the request of the new <iovernnient, 
extended to it throufih the Ex|)oit-Imp()it Bank 
considerable financial assistance. This assistance 
is being granted directly because the needs of 
Indonesia are so specific and so urgent that they 
cannot brook the delays which would be encoun- 
tered before they could be met through the existing 
international agencies. 



SOUTHEAST ASIA 

The United States also is deeply interested in 
the welfare and development of the peoples of 
other countries of Southeast Asia — namely, those 
of Thailand, Indochina, Malaya, and Burma. It 
is its belief that the British liave been and are 
conscientiously discharging their responsibilities 
so far as the people of Malaya are concerned. It 
feels that the British are aiding them to prepare 
for a fuller degree of self-government and, at the 
same time, are protecting them from the ruthless 
terrorists who, if not checked, would engxilf the 
whole country in a cniel, bloody, senseless tyranny. 

Since the conclusion of the war, Thailand has 
made marked progress in the direction of economic 
stability. It is the hope of the United States that 
it will be able peaceably to continue to develop its 
resources, to improve the lot of its people, and to 
maintain its political independence and territorial 
integrity. The United States is ready to give it 
appropi-iate assistance in this direction. 



VIET NAM 

The United States some weeks ago extended 
recognition to Viet Nam, Laos, and Cambodia. 

The United States is convinced that the Bao Dai 
Government of Viet Nam reflects more accurately 
than any rival claimants to power in Viet Nam the 
nationalist aspirations of the people of that 
country. It hopes, by its policies with regard to 
Viet Nam, to contribute to the peaceful progress 
of Viet Namese people toward the realization of 
the fruits of self-government. The Soviet Union 
and Communist China have already recognized as 
the government a group headed by a well-known 
Moscow-trained Communist. It is somewhat diffi- 
cult for a man to serve two masters. It is impos- 
sible, in the opinion of the United States, for a 
Communist in the Moscow sense of the term to be 
a genuine nationalist. My Government is con- 
vinced that any movement headed by a Moscow- 
recognized Communist such as Ho Chi Minh must 
be in the direction of subservience to a foreign 
state, not in that of independence or self-govern- 
ment. My (lovernment felt, therefore, that Bao 
Dai offered more opportunity to the Viet Namese 
people to develop their own national life than a 



leader who, in accordance with his political creed, 
must obey the orders of international communism. 



BURMA 

Of all the new states of Asia, with the possible 
exception of Korea, Burma has suffered the great- 
est vicissitudes. Severely damaged by war, it be- 
came independent before these damages were re- 
paired and before its economy had recovered from 
the effects of military occupation. This series of 
terroristic acts deprived it of some of its most able 
leaders ; and internal strife has added to the misery 
already existing as a result of world war. Never- 
theless, the Burmese leaders and people have dis- 
played both courage and tenacity in their efforts 
to maintain the integrity of their country. Al- 
though the Burmese, in general, have been at- 
tempting to solve their problems in their own way, 
it is my understanding that they have been looking 
to some of the members of the Commonwealth for 
a certain amount of economic and other assistance 
and that some such assistance is being extended to 
them. It is also my understanding that Burmese 
leaders have recently expressed hope for assistance 
from the United States. I am not aware of the 
specific needs of Burma from the United States or 
of the extent to which the United States might 
be able to assist Burma just now. There can be no 
doubt, however, of the desire of the United States 
to do what it can in the circumstances to assist the 
Government and people of Burma in keeping their 
ship of state on a level keel. 



CHINA 

I do not have the time in this brief talk to do 
justice to the complicated important problems of 
the current policies of the United States with re- 
gard to China. I shall therefore merely touch on 
that problem in passing. The Govermnent of the 
United States has not recognized the Communist 
government set up in Peiping as the Government 
of China. It has not failed to do so because the 
Peiping Government is composed largely of Com- 
munists; neither is its failure to extend recogni- 
tion based on a contention that that government 
has not succeeded in obtaining control over most 
of those areas of China which are not directly or 
indirectly under the control of the Soviet Union. 

The United States cannot give serious considera- 
tion to the recognition of the Peiping regime in 
view of the manner in which the latter has treated 
American consular representatives and United 
States business representatives in areas under its 
control until that government has given a clearer 
indication of its intention to live up to its inter- 
national obligations and to treat American diplo- 
matic and consular representatives and otlier 
American nationals in a manner prescribed by 
international custom established after a hundred 
years of experience in international intercourse. 



April 10, 1950 



565 



The doubts of the United States with regard to 
the independence of action of the Peiping Govern- 
ment are strengthened by the complacency with 
which that government seems to regard the dis- 
membering of China. My Government continues, 
in the meantime, to cherish deepest feelings of 
friendshi]) for the Chinese people and feels con- 
cern for the integrity and independence of China. 



INDIA 



Since my arrival in India, I have made a nurnber 
of talks relating to the policies of the United 
States in respect to India. 

I shall not, therefore, attempt to include a dis- 
cussion of the particular relations between our two 
countries — a subject which is so important to all 
of us that it cannot propeily be treated in a survey 
of this kind. I should like, however, to stress the 
fact that at no time in our history have the people 
and Government of the United States had a deeper 
interest in or warmer feelings of friendship for 
the Government and people of India than they 
have at present. 

There is growing daily in the United States a 
better understanding of the high aspirations of 
India and of the difficult and complicated problems 
which must be overcome in the attainment of such 
aspirations. The Ajnerican Government and peo- 
ple wish to do what is proper, effective, and pos- 
sible to be of assistance. They realize, however, 
that India's problems are of a character wliich can 
be solved basically only by the Government and 
people of India, and they have confidence that 
India is equal to the tasks before it. 

During recent weeks, there have been current in 
New Delhi rumors to the effect that there is a grow- 
ing coolness on the part of the Government and 
people of the United States toward India. I un- 
derstand that these rumors have come to the atten- 
tion of a number of members of the Council. I am 
told that some of my friends who are inclined to 
believe in the truth of these rumors submit as evi- 
dence of this growing coolness various articles 
which have appeared in the American press criti- 
cizing the position taken by India with regard to 
various international problems. The fact that the 
United States representatives in the Security 
Council have also not always seen eye to eye with 
those of India is also advanced as evidence of a 
lack of friendliness on the part of the American 
Government toward India. 

I refer to these rumors with some hesitation 
since I am sure that most of you and, in fact, most 
Indians who have been following international 
developments give no credence to them. The ma- 
jority of you are aware that, in a democratic coun- 
try, the press is free to criticize, from time to time, 
the policies of its own government as well as those 
of various foreign governments. Some of this 
criticism is constructive ; some of it, unfortunately, 



is not helpful. A careful study of all of the ar- 
ticles relating to India which have appeared in the 
American press during the last few months, I am 
convinced, would indicate a friendly attitude and 
a desire for greater understanding between our 
two countries. Similarly, it is not likely that our 
two Governments should always regard interna- 
tional problems from precisely the same point of 
view. The fact that, with respect to some point 
or other, the Government of the United States 
may not have been in full agreement with the Gov- 
ernment of India in the United Nations should not 
be interpreted as an indication that the attitude 
of the United States with regard to India is grow- 
ing unfriendly. 

The United States, like India, is really trying 
to make decisions on the basis of merit with regard 
to each international problem which presents it- 
self to the United Nations. Like India, we try 
not to permit considerations of friendship or close 
association to influence such decisions. It is a 
matter of record that from time to time sharp 
differences arise with respect to particular prob- 
lems between the United States and countries with 
which it has a long history of friendship and 
cooperation. Such differences, however, are not 
allowed to affect the general relations between the 
United States and these countries. 



Security Measures Against Aggression 

I am sure from conversations which I have had 
with some of my friends who are here this after- 
noon that they are thinking somewhat as follows: 
We have no criticism of the foreign policies of the 
United States as outlined but if the United States 
is really pursuing a policy of i)eace why does 
it have the atomic bomb and why is it develop- 
ing the hydrogen bomb? A peace-loving state 
should have nothing to do with instruments of 
destruction. 

My answer is that these bombs, as well as other 
equally terrifying weapons, are just as abhorrent 
to the United States as they are to India. Tlie 
United States, however, may not be the only comi- 
try capable of producing them. For quite a num- 
ber of yeai-s, other powers have been concentrating 
their efforts to manufacture weapons of this kind. 
So long as there is a possibility that forces of ag- 
gression may be developing these instruments of 
ma.ss destruction, the United States caimot afford 
to fall behind. 

It would be a gross betrayal of the free peoples 
of the world, including those of the United States, 
foi- the American Government to pursue a policy 
which might result in a situation in which the sole 
possessors of these weapons would be countries 
which would not hesitate to use them for the pur- 
pose of reducing the whole world to a kind of 
serfdom which prevails among those nations over 



566 



Department of State Bulletin 



whom they have already succeeded in obtaining 
doinination. 

In order to prevent the use of atomic energy in 
the destruction of mankind, the United States lias 
proposed several years ago that, under the auspices 
of the United Nations, there be international con- 
trol of atomic materials and of (he operation of 
atomic plants. Unfortunately, tiie Soviet Union 
has not agreed to this suggestion. The United 
States therefore has no choice other than to con- 
tinue to develop these deadly weapons. 

It is significant, in this connection, that no 
neighlK)rs of the United States have indicated 
fe4ir that it might take advantage of its possession 
of atomic weapons in order to enforce its will upon 
them or to deprive them of their freedom. 

A pix)minent member of the United States Sen- 
ate in commenting upon the decision of the Presi- 
dent that the Atomic Energy Connnission should 
continue its work on atomic weapons, including 
the hydrogen bomb, summarized the feelings of 
most Americans when he said, 

The country has no alternative except to build the hydro- 
gen bomb. We have tried to get international control of 
these bomb weapons with accompanying rigid inspection 
to see that the agreement is carried out. We have been 
unsuccessful in this quest. Therefore we must provide 
for our own security weapons at least equal and we hope 
superior to those of any conceivable would-be aggressor. 
In the present circumstances this is the surest way to pre- 
vent an attack upon us. Our failure to build while other 
nations are building the hydrogen bomb conceivably could 
put us at the nicny of a foreign power and destroy at once 
our own security as well as dismember the democratic 
liberty-loving world. However, while we are doing this 
we should keep the door open for control of these mass- 
destruction weapons with a rigid inspection that would 
give us the security we must have. 

I am sure that, although some of the coimtries of 
the free world may disagree with various aspects 
of the policies of the United States in respect to 
Asia, the majority of them within the limits im- 
posed upon them by force of geogi-aphical, eco- 
nomic, and other factors are in general following 
policies similar to those which I have tried to out- 
line. The United States does not have the power, 
the influence, the resources, or the ability to attain 
singlehanded the objectives of its policies with 
regard to Asia. It is not endeavoring so to do. 

It depends upon the cooperation of all those in 
Asia as well as in other continents who feel that 
it would be unspeakably tragic if the peoples of 
Asia, after having made so gallant a struggle for 
the realization of their right to national existence 
and after having attained a position which would 
enable them to shape their own destinies, be forced 
under a new tyranny much more ruthless and total 
than any that they have hitherto experienced. 



Radio Stations in U.S. Area 

in Germany Shift to New Frequencies 

[Released to the press March IS] 

All radio broadcasting services in the United 
States area of control in Germany will shift to a 
new pattern of frequencies beginning March 15, 
1950. The pattern of frequencies arranged for the 
United States area of control in Germany should 
not be confused with the Copenhagen Plan, which 
goes into effect on the same day and provides for 
the redistribution of medium- and long-wave 
broadcasting frequencies throughout most of 
Europe, 

The shift in frequencies in the United States 
area of control of Germany moves to new wave 
lengths the operations of the established radio sta- 
tions in the United States area of control in Ger- 
many, together with the radio broadcasting serv- 
ices necessary for the Occupation Forces and the 
Voice of America relays. Under the Copenhagen 
Plan, the frequencies used for these broadcasts 
would have been, for the most part, withdrawn 
from Germany and distributed among other Euro- 
pean areas. The United States considers it is im- 
portant that the jjeople of Europe be given access 
to all possible radio services and feels that the 
significance of the free flow of information in 
the development of democratic institutions and 
the conditions favorable to an enduring peace can- 
not be overestimated. 

In the summer of 1948, representatives of most 
European nations gathered in Copenhagen. They 
drafted a plan now known as the Copenhagen 
Plan which calls for a redi.stribution of European 
radio broadcast frequencies. Germany was with- 
out representation at the Conference. The United 
States was invited to attend but only in the ca- 
pacity of an observer. The Conference failed to 
take into account the minimum essential require- 
ments for radio broadcasting in the United States 
area of control in Germany, and the United States 
announced that it did not feel bound to the ob- 
servation of the Copenhagen Plan. 

Since the summer of 1948, the United States has 
made every effort to contribute to an equitable solu- 
tion of the problem of allocating European fre- 
quencies. The new pattern of frequencies which 
will be used in the United States area of control 
in Germany after March 14, 1950, is expected to 
represent a number of agreements which the 
United States is negotiating. They include the 
shared use of certain frequencies with other Euro- 
pean nations. The United States is prepared to 
continue its efforts in the search for arrangements 
which will protect the interests of all parties 
concerned. 



Apr/7 10, 7950 



567 



Soviets Exploit Sinkiang 
Oil and IVIineral Resources 

Statement ly Secretary Acheson 
[Released to the press March 31] 

Several weeks ago, I emphasized Soviet moves 
against China's border provinces as one of the 
most significant developments in Asia today. 
Wlien the texts of the Sino-Soviet agreements con- 
cluded in Moscow were announced, I pointed out 
that the important thing was not the provisions in 
them but the results which would flow from them. 

The recent announcement in the Soviet press of 
the setting up of two joint companies to exploit 
the oil and mineral resources of Sinkiang Province 
gives further point to what I said. We now see 
the apparent resumption on a grand scale of the 
process of detachment of Sinkiang Province, a 
process begun years ago and interrupted only 
briefly during the most desperate period of the 
last war. The device now being employed is that 
of the joint stock company, now familiar as an 
instrument of Soviet economic penetration and 
control in Manchuria and Eastern Europe. It 
seems clear that the effect of one of the unpub- 
lished agreements arrived at in Moscow last winter 
was to award the U.S.S.E. pre-eminent rights in 
China's strategic western province. 

The peoples of Asia will be interested to note 
that, under the terms of the agreements, as an- 
nounced, one-half of the rnineral and petroleum 
production accomplished will go to the U.S.S.R., 
leaving only one-half for the use of impoverished 
China. Evidently, Soviet economic "aid" is not 
cheaply bought, requiring, as we see in this case, 
both impairment of sovereignty and relinquish- 
ment of 50 percent of current production. 



Evacuation of Americans 
From Shanghai 

Statement hy Secretary Acheson 
[Released to the press March SI] 

Every effort is being made to carry out the evac- 
uation of American citizens from Shanghai. We 
are hopeful that it will be completed shortly. 

Shanghai authorities refused permission for the 
LST's to be used as shuttle craft on the Yangtze to 
carry passengers and cargo from Shanghai to the 
General Gordon which was unable to enter the 
Yangtze because of the danger of mines. 

Our consul general, together with the American 
President Lines' agent in Shanghai, then worked 



out a local plan to charter two shallow draft 
Chinese-owned ships to ferry passengers down the 
Yangtze to the Gordon; but, by the time this plan 
had been worked out, the General Gordon was al- 
ready en route to Honolulu, where she arrived to- 
day on her regular schedule. 

Since it would cost almost one-half million dol- 
lars to turn the Gordon back to Shanghai, it is not 
considered feasible to do so. Since the two LST's 
also cannot be used, we have today ordered their 
return to Japan. 

We are now making arrangements in Manila to 
charter three commercial ships, two flying the 
Philippine flag and one under Panamanian regis- 
try. These ships will rendezvous off the Yangtze 
for the transfer of passengers and cargo from the 
Chinese ships. 

These arrangements, of course, are subject to 
securing the approval of the Chinese Communist 
authorities in Shanghai for this operation. We 
assume they will approve and, accordingly, are 
proceeding with the plan as I have outlined it. 



U.S. and U.K. Discuss Administration 
for Canton and Enderbury Islands 

[Released to the press March 27] 

Representatives of the United Kingdom and 
the United States met in Washington today to dis- 
cuss the establishment of a system of joint admin- 
istration for Canton and Enderbury Islands. The 
meeting is expected to continue through March 29. 

The Government of the United States and the 
Government of the United Kingdom, without 
prejudice to their respective claims to Canton and 
Enderbury Islands, agreed, on April 6, 1939, to a 
joint control over these islands for a period of 50 
years. This agreement also provided that the ad- 
ministration of the islands should be determined 
by the two Governments in consultation as occa- 
sion might require. 

Sir Brian Freeston, British High Commissioner 
for the Western Pacific and Governor of Fiji, 
heads the United Kingdom delegation which is 
composed of K. K. Thompson, Colonial Attache 
British Embassy, J. E. S. Fawcett, Legal Adviser, 
Britisli Embassy, D. C. Tebbit, Second Secretary, 
British Embassy. 

The United States is represented by Conrad E. 
Snow, Chairman, Department of State, William 
R. Vallance, Department of State, J. Harold Shul- 
law, Department of State, Mrs. Shirley Boskey, 
Department of the Interior, Franklin S. Pollak, 
Department of Justice, R. D. McCree, Depart- 
ment of Commerce, C. O. Schick, Department of 
Connnerce, and Matthew J. Marks, Department 
of the Treasury. 



568 



Deparfmenf of State Bulletin 



INTERNATIONAL ORGANIZATIONS AND CONFERENCES 



NAC Invited To Meet at London 

[Released to the: press March ^S] 

The Department of State has been actively con- 
sidering for some time the possibility of a meeting 
of the North Atlantic Council (N.vc) in Europe 
with Foreign Ministers attending. Representa- 
tives of other North Atlantic Treaty nations have, 
on several occasions, during the past few months, 
communicated with Secretary' Acheson as to the 
possibility of such a meeting in the spring. Mr. 
Bevin has communicated to the Secretary, as the 
first j-ear chairman of the Council, an invitation 
for the Council to meet in London, probably in 
May. 

Yesterday, there was a meeting here of the In- 
ternational Working Group which serves the 
Council, and Mr. Bevin's invitation was communi- 
cated to the representatives of the other North 
Atlantic Treaty nations. It was proposed by the 
United States representative that Mr. Bevin's 
invitation be accepted and that the Council meet 
in London about the middle of Maj'. It is ex- 
pected that the views of all member nations will 
be received shortly as to the desirability of a Coun- 
cil meeting and as to location and exact date. 

In view of the desire of Mr. Bevin, Mr. Schu- 
man, and the Secretary to meet as often as is useful 
and convenient, they will take the opportunity 
affoi-ded by the Council meeting to conduct discus- 
sions on certain other problems of mutual concern. 



Tin Study Group Estimates 

Future Production and Consumption 

[Released to the press March SO] 

The International Tin Study Group met in 
Paris during the last week under the chairmanship 
of Georges Peter, Director of Economic Affairs at 
the Ministry for French Overseas Territories. 
The Group included representatives from Bel- 
gimn, Bolivia, British colonial and dependent ter- 
ritories, Canada, China, Czechoslovakia, France, 
India, Indonesia, Italy, the Netherlands, Thailand, 
the United Kingdom, and the United States, and 



observers from the United Nations, the Organiza- 
tion for European Economic Cooperation, and the 
Tin Research Institute. Clarence Nichols on the 
Economic Resources and Security Staff Depart- 
ment of State, was the United States delegate. 

The Group examined the future position of the 
tin industry and the likely trends in its production 
and consumption under assumed conditions. It 
estimated tliat world production, which had been 
161,000 long tons in 1949, would be 172,000 tons in 
1950, 191,000 tons in 1951 and 199,000 tons in 1952. 
In these estimates, it was assiuned that conditions 
conducive to full production and also political and 
social stability in the main producing countries 
would exist; it further assumed only production 
from plant and equipment already in operation, 
under rehabilitation and under commitment. 

Unrestricted consumption of tin for commercial 
purposes under full industrial production was esti- 
mated at 127,000 long tons in 1950, 136,000 tons 
in 1951, and 140,000 tons in 1952. World consump- 
tion of tin, in 1949, had been 118,000 tons. 

These estimates of production and consumption 
did not take account of the U.S.S.R., whose posi- 
tion is not known. Only nominal production and 
consumption figures were included for China. 

The estimates showed, therefore, that there 
might be an excess of production over consump- 
tion for commercial purposes of about 45,000 tons 
in 1950 and higher figures later. On the other 
hand, it appeared very likely that for some time 
(although the Group could not indicate for how 
long ahead) substantial tonnages of tin would be 
absorbed by the United States for strategic stock- 
piling purposes over and above the demand for 
commercial purposes. 

The Group also considered a draft international 
tin agreement drawn up by a working party in 
November, 1949, the objective of which was to at- 
tain a degree of equilibrium between supply and 
demand in general harmony with the principles 
of the Habana charter. The Group amended and 
modified this draft agreement in numy respects as 
regards its general provisions as well as its de- 
tailed provisions for the control of exports and a 
buffer stock. 

The Group did not reach unanimous agreement 
concerning future steps. The Group, by a ma- 
jority, adopted a resolution requesting the Secre- 
tary-General of the United Nations to convene, 



April 10, 1950 



569 



in accordance with the ijrovisions of the Habana 
charter, a United Nations conference at any early 
date to which all members of the United Nations 
would be invited in order to discuss a commodity- 
control agreement on tin. Nine members (Aus- 
tralia, Belgium, Bolivia, British colonial and 
dependent territories, Canada, India, the Nether- 
lands, the United Kingdom, and Indonesia) sup- 
ported the resolution. Three members (China, 
Thailand, and France) abstained. Two members 
(Italy and Czechoslovakia) were not present at 
the final session and took no part in the considera- 
tion of the resolution. "W^iile none of the govern- 
ments at this stage is committed to any text, the 
draft agi-eement prepared by the Study Group will 
be submitted by the Study Group to the Secretary- 
General of the United Nations as the basis for dis- 
cussion at such a conference and will be published 
by the secretariat of the Study Group in the near 
future. 



South Pacific Conference 

The Department of State announced on March 
31 that South Seas Islanders — representatives of 
various Pacific island peoples, Samoans, Fijians, 
Solomon, and New Guinea islanders — will hold a 
conference, April 25-May 6, at Suva, capit^al of 
Fiji, to discuss common problems of health, village 
schooling, and their general economic and social 
welfare. 

This South Pacific Conference is unique in that, 
for the fii-st time in history, representatives of the 
various territories of the region are meeting to- 
gether to consider their mutual problems and to 
make recommendations for solving these problems 
on a regional basis. The convening of such a 
conference has been made possible through the 
collaborative efforts of the six Metropolitan Gov- 
ernments which are members of the South Pacific 
Commission. 

This Commission was established in 1948 as a 
consultative and advisory body to the six Govern- 
ments with non-self-governing territories in the 
Soutli Seas area — Australia, France, Netherlands, 
New Zealand, United Kingdom, and the United 
States. 

The South Pacific Conference is an auxiliary 
body to the Commission and was provided for by 
the terms of the agreement establishing the Com- 
mission in order to associate with the work of the 
Commission representatives of the local inliab- 
itants and official and nonofficial institutions in 
the territories of the area. The agreement states 
that a session of the Conference shall be convoked 
within 2 years after the agreement comes into 
force, and after that, at 3-year intervals. The 
Conference will be convened at such intervals in 
one of the territories within the scope of the Com- 
mission, and the chairman of each session will be 



one of the Commissioners of the Government in 
whose territory the session is held. Sir Brian 
Freeston, K.C.M.G., O.B.E., Senior Commissioner 
for the United Kingdom, British High Commis- 
sioner for the Western Pacific and Governor of 
Fiji, will preside at this first session. 

The one United States possession which falls 
within the scope of the South Pacific Commission 
is American Samoa. The delegates to attend tliis 
first meeting from American Samoa were selected 
bytheFono (Island Legislature) of that territory 
and consists of two of the senior chiefs. High 
Chief Tuitele and High Chief Tufele. Advisers 
will be High Talking Chief Tuiasosopo and Lt. 
E. V. P. Home, USN, Assistant Attorney Gen- 
eral for the Island. 

In addition to the 15 non-self-goveniing terri- 
tories (Papua, New Guinea, Nauru, Western 
Samoa, Cook Islands, Tokelau Islands, New Cale- 
donia and dependencies, French Oceanic Estab- 
lishments, Fiji, British Solomon Island Protector- 
ate, Condiminium of New Hebrides, Gilbert 
Islands, Ellice Islands, Netherlands New Guinea, 
and American Samoa) , the independent Kingdom 
of Tonga will send a delegation. 

Meetings will be held at Nasinu Training Col- 
lege. One interesting feature of the Conference 
will be the exhibits brought to the meeting by the 
delegates which will enable the various groups to 
become acquainted with each other's ways of liv- 
ing. Tlie exhibits will generally be limited to 
portable items such as fishing tackle, tools, maps, 
photographs, and films. Any such exhibits 
donated by the delegates will form part of the 
Commission's library-museum. 

English and French will be the official languages 
of the Conference. Various delegations are bring- 
ing their own interpreters to translate into the 
dialects of the region. 

The Conference will have three main topics for 
consideration and papers are, in some instances, 
being prepared by the delegates themselves. All 
of the subjects will be presented by the delegates. 

The main topics of discussion are: Public 
health — (mosquito control and the healthy vil- 
lage) ; social development — (the village school, 
vocational training, and cooperative societies) ; 
economic development — (fisheries methods, im- 
provement and diversification of food and export 
crops). 

The last item on the agenda will give the dele- 
gates the opportunity to propose subjects for the 
next session of the Conference. 

The Conference will be followed by the fifth 
session of the South Pacific Commission at which 
recommendations made by the Conference will be 
considered. 

The two United States Commissioners, Dr. 
Felix M. Keesing of Stanford University, and 
Milton Shalleck, attorney of New York City, will 
attend the Conference as observers. Robert R. 
Robbins, Acting Director of the Office of Depend- 



570 



Department of State Bulletin 



pnt Area Affairs, Department of State, and Claude 
G. Ross, American consul at Noumea, New Cale- 
donia, will attend as advisers. 

In addition, representatives of the United Na- 
tions and its specialized ajjencies and of scientific 
and mission bodies have been invited as observers. 
Dr. Harold J. CooHd<ie, Executive Secretary of the 
Pacilic Science Board. National Research Council, 
will represent United States science at the Con- 
ference. 



U.S. To Apply to GATT for 
Waiver on Potatoes 

[Released to the press March 2^] 

The Department of State announced today that 
the Interdepartmental Committee on Trade Agi'ee- 
ments has recommended that application be made 
immediately to the Contracting Parties to the Gen- 
eral A<rreement on Tariffs and Trade, at the fourth 
session now meeting in Geneva, Switzerland, under 
the provisions of article XXV, paragraph 5 (a), 
of the General Agreement, for a temporary waiver 



with respect to the United States tariff obligation 
concerning the importation into the United States 
of white or Irish potatoes, other than certified 
seed potatoes. 

Under the agreement, as it now stands, table po- 
tatoes in addition to the normal 1 million-bushel 
tariff quohi are permitted entry at the taiiff-quota 
rate of 1)7.!} cents (the nonipiola rate is 7'> cents) 
per 100 i)oiinds by the amount that the September 
1 crop estimate of the United States Department of 
Agriculture is less than 350 million bushels. 

It is proposed that, under the contemplated 
change, for the crop year 19.'')0-.51, this figure be 
reduced to 3;5r) million bushels, which is the United 
StatesDepartmentof Agriculture production goal, 
so that additional quantities above the normal 
tariff quota need not be permitted entry at the 
37.5 cent rate unless the September 1 estiniate falls 
below 335 million bushels. 

Any views of interested persons or groups with 
regard to this application should be submitted im- 
mediately to the Conmiittee for Reciprocity In- 
formation, which is the committee established to 
receive views on trade-agi-eement matters. All 
communications on this matter should be addressed 
to : The Chairman, Committee for Reciprocity In- 
formation, Tariff Commission Building, Washing- 
ton 25, D. C. 



U.S. Delegations to International Conferences 



High Frequency Broadcasting 

On April 1, the Department of State announced 
that the following United States delegation has 
been designated to attend the International Tele- 
communication Union (Itu) International High 
Frequency Broadcasting Conference which con- 
vened at Florence, Italy today : 

Chairman 

J. Paul Barringer, deputy director, Office of Transport and 
Communication Policy, Department of State 

Vice Chairmen 

Fred H. Trimmer, chief, Broadcast Frequency Unit, Pro- 
gram Planning and Evaluation Staff, Department of 
State 

Harvey B. Otterman, associate chief, Telecommunication 
Policy Staff, Department of State 

Advisers 

Harden G. Cooke, consultant. International Telecommuni- 
cations, Department of Defense 

Louis A. De La Fleur, assistant chief, Frequency Alloca- 
tion and Treaty Division, Bureau of Engineering, 
Federal Communications Commission 



Julia M. Gilbert, chief. International Report and Records 
Section, Frequency Allocation and Treaty Division, 
Bureau of Engineering, Federal Communications 
Commission 

Morton Glatzer, assistant chief. Division of International 
Broadcasting, Department of State 

Bartley P. Gordon, American consul, Rotterdam, Nether- 
lands 

Jack W. Herbstreit, chief, Tropospberic Propagation Re- 
search Section, Central Radio Propagation Labora- 
tory, National Bureau of Standards, Department of 
Commerce 

Raymond Kaplan, radio engineer. Division of Interna- 
tional Broadcasting, Department of State 

Roger C. Legge, Jr., propagation analyst, Division of In- 
ternational Broadcasting, Department of State 

Kenneth W. Miller, chief, .\pplications Branch, Television 
Broadcasting Division, Bureau of Engineering, Fed- 
eral Communications Commission 

A. Prose Walker, chief. Allocations Branch, Television 
Broadcasting Division, Bureau of Engineering, Fed- 
eral Communications Commission 

Secretary of Delegation 

Lyle L. Schmitter, Division of International Conferences, 
Department of State 



Apri\ TO, T950 



571 



Provisions of the International Telecommuni- 
;ation Convention of 1947 stipulated that certain 
bands within the radio spectrum should be allo- 
cated for use in high frequency broadcasting. 
The Conference to be convened at Florence will 
consider certain frequency assignment plans which 
have been developed in an effort to provide for the 
equitable distribution of the available space in 
those bands among the nations of the world. If 
agreement is reached at the Conference, a high 
frequency assignment plan will be presented to an 
Extraordinary Administrative Conference which 
will be held at Geneva in September to adopt a 
frequency list for all services. 

Work on the formulation of an assignment plan 
for use in connection with high frequency broad- 
casting was initiated at an International Confer- 
ence on High Frequency Broadcasting held at At- 
lantic City7 New Jersey, August 16-September 2, 
1947. This Conference organized a Planning 
Committee to draft some frequency plans to be 
presented to another full conference to be held in 
Mexico in 1948. The planning Committee met in 
Geneva from March until May 1948 and again at 
Mexico City in October 1948 immediately preced- 
ing the opening of the full conference. 

The Mexico City High Frequency Broadcasting 
Conference, whicli extended from October 1948 to 
April 1949, resulted in the formulation of a partial 
plan (known as the "Mexico City Plan"). This 
plan was not acceptable, however, to the United 
States. The Mexico City conference also estab- 
lished a Technical Plan Committee to further de- 
velop the partial plan formulated at the Mexico 
City conference. This Technical Plan Committee 
met in Paris during the suinmer of 1949 and has 
been meeting again in Florence during the past 
month. 

The formulation of an equitable plan of fre- 
quency distribution is of prime importance to the 
United States as well as to the other countries of 
the world, for only a limited number of frequen- 
cies are suitable for international communications. 
Of this number, a small percentage have been 
allocated by international agreement for high fre- 
quency broadcasting, while the remainder of the 
frequencies suitable for long-distance coinmunica- 
tion have been allocated to services dealing with 
aeronautical needs, maritime needs, radio amateur 
activities, and press and message transmissions 
(mainly in Morse code). As a result of the scar- 
city of frequencies suitable for long distance trans- 
mission, almost every country of the world has 
displayed considerable interest in obtaining its 
share of the short wave broadcasting frequencies. 
While the United States offered at the Mexico 
City High Frequency Broadcasting Conference 
to reduce its own requirements if the other coun- 
tries of the M'orld would reduce their demands 
proportionately, most countries refused to partici- 



pate in such a reduction. The Mexico City Plan. 
was not acceptable to the United States for this 
reason. 

It is anticipated that most of the 81 member 
nations of the International Telecommunication 
Union will attend the forthcoming High Fre- 
quency Broadcasting Conference at Florence. 

U.N. Transport and Communications Commission 

The Department of State announced on March 
27 that George P. Baker, United States represen- 
tative on the United Nations Transport and 
Communications Commission, will attend that 
Commission's fourth session which convenes at 
Lake Success on March 27. Designated to assist 
him as advisers are: 

John M. Gates, Jr., Acting Officer in Charge, United Na- 
tions Cultural and Human Rights Affairs, Office of 
United Nations Economic and Social Affairs, Depart- 
ment of State 

Edmund H. Kellogg, Acting Officer in Charge, United Na- 
tions Economic Affairs, Office of United Nations 
Economic and Social Affairs, Department of State 

Henry H. Kelly, Chief, Inland Transport Policy Staff, 
Department of State 

The Transport and Communications Commis- 
sion, one of nine functional commissions of the 
United Nations Economic and Social Council was 
established in May 1946. Fifteen member gov- 
ernments of the United Nations are members of 
the Commission. 

The provisional agenda for the fourth session 
provides for the consideration, among other 
things, of such subjects as barriers to the interna- 
tional transport of goods; unification of maritime 
tonnage measurement; problems of maritime 
shipping affecting Latin America; transport sta- 
tistics; coordination of inland transport; and 
international road transport. 



John Sherman Cooper To Serve 
as Consultant to Secretary 

On March 28, the Department of State an- 
nounced that, at the request of the President and 
the Secretary of State, John Sherman Cooper, 
former Senator from Kentucky and former 
United States representative at the fourth regular 
meeting of the General Assembly of the United 
Nations, has agreed to serve as a consultant to the 
Secretary of State in connection with the proposed 
meetings of the North Atlantic Pact Council and 
the discussions to be held in London in May. 

Mr. Cooper will assist in the Departmenrs prep- 
arations for these conferences and will accompany 
the Secretary of State to Europe. 



572 



Department of State Bulletin 



The United States in the United Nations 



[April 1-7] 

International Court of Justice 

The International Court of Justice at The Hague 
delivered, on March ;3(), an advisory opinion on 
the interpretation of the peace treaties with Bul- 
<iaria, Hungary, and Riunania. By 11 votes in 
favor to 3 opposed, the Court answered in the 
affirmative the first two questions referred to it 
by the General Assembly in connection with the 
alleged violations of human rights in Bulgaria, 
Hungary, and Rumania. 

The questions asked were (1) whether diplo- 
matic exchanges between Bulgaria, Hungary, and 
Rumania, and certain signatories to the Treaties of 
Peace with these three countries, disclose the ex- 
istence of disputes subject to the treaty provisions 
for the settlement of disputes and (2) if so, 
whether Bulgaria, Hungary, and Rumania are 
obliged to carry out the relevant treaty provisions, 
including the appointment of their representa- 
tives to the Treaty Commissions mentioned in 
these provisions. Judge Winiarski, Judge Zoricic, 
and Judge Kaylor filed dissenting opinions, in 
which they maintained that the Court could not 
properly answer tlie General Assembly's questions. 

The other two questions in this connection asked 
by the General Assemblj' will be considered by the 
Court if, at the end of 30 days, the Secretary -Gen- 
eral notifies the Court that the three governments 
concerned have failed to notify liim that they 
have appointed representatives to the Treaty 
Commission. 

The third question asks whether in the case of 
one party failing to appoint its representative, the 
Secretary-General would be authorized to appoint 
the third member of the Commission upon the 
request of the other party to a dispute. In the 
event of an affirmative reply to this question, the 
Assembly asked in its fourth question whether a 
Commission consisting of one national repre- 
sentative and a third member appointed by the 
Secretary-General would be competent to make a 
definitive and binding decision in settlement of a 
dispute. 

Trusteeship Council 

With the final vote approving the Jerusalem 
statute as a whole, the Trusteeship Council com- 
pleted its sixth session on April 4 in Geneva. All 
members voted in favor of the statute except the 



United Kingdom and the United States, which 
abstained. 

United States Ambassador Francis B. Sayr^ 
explained his vote by recalling that the United 
States had voted favorably on many individual 
articles of the statute but had certain reservations 
on a number of others. 

Immediately following the statute's approval, a 
resolution sponsored jointly by tlie United States, 
Australia, Belgium, and the Philippines was intro- 
duced. This resolution, approved by a vote of 10-0 
with the United Kingdom abstaining, requests 
Council President Roger Garreau to transmit the 
statute to the present occupants of Jerusalem 
(Israel and Jordan) to request their co<meration 
and to report on these matters to the Council's 
seventh session, scheduled to convene on June 1. 

An Iraqi-Egyptian proposal requesting the 
Council President to revise the draft instructions 
to the Governor of Jerusalem was rejected. 

Social Commission 

The sixth session of the 18-member Social Com- 
mission opened April 3 at Lake Success. After 
electing Dr. Jose A. Correa (Ecuador) as Chair- 
man, the Commission adopted a 1-1-item agenda, 
which includes such items as the long-range work 
program of the Commission — migration, social 
rehabilitation of the physically handicapped, fam- 
ily welfare, and prevention of crime and the treat- 
ment of offenders. In keeping with the pattern 
followed in other United Nations bodies, the Soviet 
and Polish representatives declined to participate 
in the work of the Commission, after they failed in 
their effort to have the "Kuomintang" representa- 
tive expulsed. 

In introducing the Secretary-General's report, 
Mrs. Alva Myrdal, Director of the United Nations 
Social Affairs Department, explained that the pre- 
paratory experimental period of United Nations 
work in the social field, which was already a "con- 
firmed success," was past and that planning for a 
permanent action program was now needed. 

A final decision on the long-range work pro- 
gram is to be taken later in the session. Mean- 
while, a committee, comprising the United States, 
South Africa, New Zealand, was named to prepare 
a tentative program based on the Secretary-Gen- 
eral's report and the Commission's discussion of it. 



April 10, 1950 



573 



Department Officers Answer Charges Made by Senator McCarthy 



STATEMENT BY ESTHER CAUKIN BRUNAUERi 

My name is Esther Caukin Brunauer. I live, 
with my husband and our two children, at 3417 
Quebec Street NW., Washington, D.C. I am an 
officer of the Department of State; my present 
position is Assistant Director for Policy Liaison of 
the UNESCO Relations Staff. I came to the Depart- 
ment in 1944, after 17 years of continuous service 
on the staff of the American Association of Uni- 
versity Women as Associate in International Edu- 
cation. I am a native of California. My ances- 
tors for several generations back — Caukins, Black- 
wells, Reillys, Welches, Tates, Bushes, Upsons, and 
Smiths — were part and parcel of the growth of 
America. None of them became rich or famous, 
but they were steadfast and loyal citizens, with 
high standards of personal conduct and with the 
habit of speaking their minds freely and openly. 
I come before you today to avail myself of the 
oj^portunity you have given me, in accordance with 
my request, to speak my mind freely and openly 
in reply to charges made against me by a Senator of 
the United States — charges made in violation of 
the traditions of fairness which are among our 
oldest heritages. 

My first notice that charges might be made 
against me came on February 11 when I was called 
by a reporter who said that Senator McCarthy, in 
an off-the-recorcl press conference, had mentioned 
my name as one of four cases that he intended later 
to make public in connection with the claim which 
he was making oil a speaking tour that there were 
Connnunists in the Department of State. As a 
result of this warning, I read very carefully the 
list of numbered cases whicli Senator McCarthy 
read on the Senate floor on February 20. On the 
second reading, I observed that No. 47 contained 
a reference to a husband in tlie Navy Department 
and a date of employment which coincided with 
my own. I, therefore, assumed that I was No. 
47 although the "facts" contained in No. 47 con- 
sisted so largely of innuendoes and veiled refer- 
ences that it would be impossible to say whether 
they were intended to apply to me or to anyone 



'Made before a Subcommittee of the Senate Committee 
on Foreign Relations on Mar. 27, 1950, and released to 
the press on the same date. 



else. Then, on March 13, 1 was informed by news- 
papei'men that I had been mentioned by Senator 
McCarthy before this Subcommittee as one of the 
cases which he claimed proved his contention that 
there were persons in the State Department who 
were disloyal to the United States. 

Mr. Chairman, I am a loyal American. I am 
not a Communist and never have been a Com- 
munist. I have never engaged in Communist ac- 
tivities. I am not a Communist sympathizer and 
never have been a Communist sympathizer. I do 
not have, and I never have had, any sympathy for 
any doctrine which conflicts with the basic prin- 
ciples of our American democracy. I support the 
President's loyalty program and have been cleared 
under that program. I have enough confidence in 
the strength of our American institutions to be- 
lieve that Communists and their sympathizers can 
be kept out of our Government without violating 
the traditional American principles of decency 
and fair play. Before I was given a hearing, my 
name was first divulged as one who was about to 
be attacked and then I was publicly branded as dis- 
loyal without having had an opportunity to speak 
in my own defense. In fact, Senator McCarthy 
said on March 13 that I presented such a danger 
to the country that my case should be the "very 
first case" to be investigated by this Committee. 

I am aware, Mr. Chairman, that after this state- 
ment about me had reverberated in the headlines 
for a few days I lost my priority and there is now 
another case which Senator McCarthy claims is 
the number one case, upon which he is willing to 
stand or fall. 

I do not exaggerate in saying that in this hearing 
my reputation is at stake. I am aware that no- 
wliero in his public statements did Senator Mc- 
Carthy actually apply the word "disloyal" to me, 
but his insinuations were plain and the news- 
papers, though they have been fair, were quick to 
see what he had in mind. I appreciate the oppor- 
tunity which this Committee is giving me to 
answer these charges, but no matter how satis- 
factory my answers may be to this Committee the 
news of the denial may never catch up with the 
accusation. The effects of these insinuations have 
not been limited to the press. In my household 
there are two small cliildren and an elderly grand- 



574 



Deparfmenf of State Bulletin 



mother, besides myself and my husband. "We are 
all upset ami bewildered. Since March 13th, we 
have received anonyiuous teleplione calls, accom- 
panied by threats and profanity, with such advice 
as "Get out of this nei<iliborhood, you Cotninunists, 
or you will be carried out in a box." All of you 
who have families will lealize the effect thi.s has 
on the atmosphere of a home — you know how you 
■would feel if it were happening in your home. 
Senator McCarthy may have his own reasons for 
what he has done and the way he has done it, but 
I will never be able to understand them. 

Senator McCarthy began his attack on me by 
saying that I was "the first assistant to Alger Hiss 
in the San Francisco Conference." This is an 
advanced form of guilt by iussociation. Moreover, 
it is incorrect. I had no personal or official con- 
tact with Mr. Hiss at San Francisco. At the San 
Francisco conference, I was a technical adviser in 
the delegation of the United States. Mr. Hiss 
was the Secretary General of the Conference and 
was not a member of our delegation. Although I 
was not an assistant to Mr. Hiss, I was an assist- 
ant and adviser to the late Congi'essman Bloom, 
who was one of the United States representatives 
there. In Washington, my work, up until Febru- 
ary 1946, was in the Office of Special Political 
Affairs. I was about the fourth in line in one of 
the divisions of this Office. A few months after 
I started this work. Mr. Hiss began his connection 
with the Office, first as Deputy Director and then 
as Director. My contacts with Mr. Hiss in this 
work were infrequent and routine. 

Senator McCarthy also charges that I was in- 
strumental in committing the American Associa- 
tion of University Women to various front enter- 
prises "particularly in the so-called consumer 
field." He refers particularly to an instance re- 
ported in the New York Times of April 27, 1943, 
in which "The American Association of University 
Women joined with the Consumers' Union, The 
League of Women Shoppers, and other completely 
controlled Communist fronts." The Senator went 
on to say that I took this action knowingly and 
was not mistaken about what I was doing. The 
Senator, however, is badly mistaken. I believe the 
Chairman already has in his hands a letter ad- 
dressed to him from Kathryn McHale, General 
Director of the American Association of Uni- 
versity Women, in which she states, "at no time 
did ili"s. Brunauer have any connection with the 
Association's consumer program." 

The rejiort in the New York Times to which Sen- 
ator ilcCarthy referred obliquely, but did not 
quote, lists a total of 15 women's organizations 
who strongly urged grade labeling of canned fruits 
and vegetables as a means of making price control 
more effective. The Senator mentioned by name 
the only two organizations which were ever offi- 
cially cited as Communist controlled. Senator 
McCarthy did not read the entire list of these 
organizations, which included such bodies as the 



American Home Economics Association and the 
Young AVomen's Christian Association. The en- 
tire list is available to the Committee. 

Senator McCarthy has also charged that I pre- 
sided at a Washington meeting of Friends of the 
Soviet Union in 193G and that Myra Page spoke 
at that meeting. I do not recall that meeting and 
I have no recollection of ever meeting Miss Page, 
but I have ascertained that I did preside and Mjiss 
Page spoke on "Wlio Rules in Soviet Russia." As 
has been indicated in tlie letter from Miss McHale 
to the Chairman, to which I referred a few min- 
utes ago, my position with the American Associa- 
tion of University Women was that of Associate 
in International Education and Relations. In that 
capacity, it was part of my job to attend and pre- 
side upon occasions at meetings of numerous or- 
ganizations in this field. In 1936, the attitude of 
most Americans toward the Soviet Union was 
friendly and hopeful. I had no way of ascertain- 
ing then that the organization called the American 
Friends of the Soviet Union would at some later 
time be declared subversive. I was never a member 
of that organization, and it was not considered 
reprehensible or a sign of disloyalty for American 
citizens to attend lectures on conditions in Soviet 
Russia, even if made by Soviet sympathizers. 

Senator McCarthy next charges that I signed 
a Call to the Annual Meeting of the American 
Youth Congress held in July 1939. I did sign 
this Call and I invite your attention to the creed 
which was adopted at the meeting. The ci-eed 
contains a pledge to "seek progress only within 
the framework of the American system of gov- 
ernment" and to "oppose all undemocratic tenden- 
cies and all forms of dictatorship." I was one of 
110 signers. The other signers included persons 
who were active in women's organizations, health 
organizations, educational institutions, social serv- 
ice organizations, and religious gi-oups. I believe 
this Committee will be particulai'ly interested in 
the signers who were active in public life. These 
included Senator Capper of Kansas, Senator Lo- 
gan of Kentucky, Senator Murray of Montana, 
and Senator Wagner of New York. They also in- 
cludecl Representative Coffee of Washington, 
Representative Dunn of Pennsylvania, Represen- 
tative Ford of California, Representative Fries of 
Illinois, Representative Geyer of California, Rep- 
resentative Izak of California, Governor Bottolf- 
sen of Idaho, Governor Dickenson of Michigan, 
Governor Jones of Arizona, Governor Moses of 
North Dakota, and Governor Olson of California. 
They also included two members of the Cabinet, 
Postmaster General Farley and Secretary of In- 
terior Ickes. My recollection of this Call is that 
it represented an attempt of the liberals to capture 
the leader-ship of the American Youth organiza- 
tions. The fact that the American Youth Con- 
gress has been cited by the Attorney General as a 
subversive organization is an indication that we 
failed, but if we are to be criticized it is perhaps 



April 10, J 950 



575 



because we were not active and aggressive enough 
to succeed. At least we tried. 

The Senator states that I was active in the 
launching of the American Union for Concerted 
Peace Efforts. That is true and I am proud of 
the fact. 

He states that the American Union for Con- 
certed Peace Efforts was cited as a Communist- 
front organization. That is less than a half-truth, 
It was, in fact, cited by the Dies Committee on 
March 29, 1944, but not as a Communist-front 
organization. It was cited as "an organization 
with the same aims as the American Congress for 
Peace and Democi-acy, a Communist-front advo- 
cating collective security prior to the signing of 
the Stalin-Hitler Pact" of 1939. The American 
Union for Concerted Peace Efforts did advocate 
collective security. So did the loyal members of 
the League of Nations. So do all the loyal mem- 
bers of the present United Nations. These aims 
appear to have been shared by the American Con- 
gress for Peace and Democracy up to the time of 
the Stalin-Hitler Pact. No other aims were 
shared by that organization and the American 
Uhion for Concerted Peace Efforts. These aims 
were, of course, abandoned by the Communists, 
according to the party line, upon the announce- 
ment of the Pact. They were not abandoned by 
the American Union for Concerted Peace Efforts; 
on the contrary they were intensified. 

The Senator states that the leader of the Ameri- 
can Union for Concerted Peace Efforts was the 
editor of the Daily Worker. Tliis is entirely false. 
The editor of the Daily Worker was a member of 
the Executive Committee of the American Con- 
gress for Peace and Democracy. Neither he nor 
any other Communist played any part in the direc- 
tion of the American Union for Concerted Peace 
Efforts. The Chairman of the Executive Com- 
mittee of the American Union for Concerted Peace 
Efforts was Dr. Clark M. Eichelberger, at that 
time President of the American Association for 
the League of Nations and now President of the 
American Association for the United Nations. 
The fifteen other members of the Executive Com- 
mittee, including myself, were persons of known 
loyalty to the United States. There were no Com- 
munists in this group. The American Uiiion for 
Concerted Peace Efforts was succeeded by the Wil- 
liam Allen 'WHiite Committee to Defend America 
by Aiding the Allies. The work of this Com- 
mittee, in combating the Communist Party line, 
is well known. I was one of the founders of this 
Committee. 

Mr. Chairman, I think I have answered Senator 
McCarthy's charges against me. If any of my 
answers is not entirely clear, I should be glad to 
supplement them to the best of my ability. I 
would like to present a group of letters which I 
have been requested to deliver to the Chairman. 

I offer also a list of my publications. It is pos- 



sible that a very brief summary of the high points 
in my career may save time in the end. 

I was born and brought up in the State of Cali- 
fornia. I received my Ph.D. at Stanford Uni- 
versity in 1927 in History and Political Science. 
My principal interest since my graduation has 
been in international relations. My first job was 
in that field. It lasted 17 years. It was with 
the American Association of University Women. 
I have been in the Department of State ever since. 

One of my most important projects for the 
American Association of University Women may 
be considered to deserve special mention. This 
was a study of national defense in relation to 
foreign policy which was undertaken by the Na- 
tional Committee on the Cause and Cure of War 
under a commission of which I was chairman. 
The report, entitled National Defense^ Institutions, 
Concepts, Policies, was published in 1937 by the 
Women's Press of the YWCA. After that, the 
Commission reported annually on the problems of 
the national defense establishment which were 
important in the ever more critical international 
situation. Admiral Standley, who was then Chief 
of Naval Operations, has stated to me that he con- 
siders that this study was largely responsible for 
converting various pacifistic organizations in this 
country and thus making possible an immediate 
program of rearmament. 

In this regard, I think the Committee will also 
be interested in the part that I played in the inter- 
national activities of the American Association of 
University Women during the critical period of 
1939-41, the period of the Stalin-Hitler Friend- 
ship Pact. These activities culminated in the 
resolution of May 8, 1941, adopted by the Biennial 
Convention of the Association in which they voted 
for: 

Recognition of a common cause with all nations resist- 
ing totalitarian aggression and furnishing of whatever 
aid we can give to make this resistance effective. 

This was in direct opposition to the Communist 
line at that time. Of course, I don't want the 
Committee to believe that I did all this single- 
handed. I was a staff member, but it was a 
development of opinion in which I participated 
and of which I am proud. 

Between 1941 and the beginning of 1946, there 
is nothing of particular interest to this Committee 
in my career except my work with Mi'. Bloom at 
San Francisco in 1945. In February 1946, I was 
designated representative of the United States on 
the Preparatory Commission for Unesco. In my 
work with Unesco, I have attended sessions of the 
general conferences at Paris, Mexico City, and 
Beirut. Those who have worked with me could 
tell you that I have been diligent in devising ways 
to thwart the attempts of Communists to use 
Unesco for their own purposes. 

Milton Eisenhower, President of Kansas State 
College, was at those conferences as a delegate. 



576 



Department of Slate BuUelin 



He has iisked me to deliver a letter to you, Mr. 
Cliairmaii, in wliicli he is kiiul enoujih to make the 
followiiig statement regarding my work : 

I would say that the present ideolotilcal warfare in tlie 
world is Doctor Brnnaiier's chief concern, and in this she 
is constantly workiiis to uphold United States policy, as 
well as the democratic philosophy generally, and to de- 
feat the devious and clover tactics of the Russians and 
their satellites. At the .Mexico City conference In 1047, 
for example, she spent a f\ill menth in counteracting the 
efforts of the Uussian-dominated Polish delcRation to pin 
the tas of ••warmonger" on the Western democracies, and 
esi>ecially on the United States. She worked with de- 
votion, precision, and effect. She was completely sincere 
in all she did. 

I would like to refer briefly to the charges made 
by Senator McCarthy against my husband, Dr. 
Stephen Bninauer. As to my hus\)and's past, his 
Communist connections existed a very long time 
ago, more than 20 years ago, in fact. He came to 
this country at the age of 18 as an immigi-ant. 
He was without friends, without money, and with- 
out a command of the language. He was eager for 
American companionship, but this was largely de- 
nied him. His need for friends and companions 
was filled, in his first years here, by a group of 
young people of similar national origin who spoke 
the same language, and these people unfortunately 
were largely Communists. They brought him into 
the Hungarian section of the Young Workers 
League. After about 3 years, he began to under- 
stand the operations of the Communist movement 
more clearly and to see more clearly its conflict 
with American institutions. He dropped out of 
the Young Workers League early in 1927 and has 
not been a member of any Communist group since 
that time. His association with individuals in the 
Communist movement diminished rapidly after he 
came to Washington in 1928. By 1932, he' had been 
denounced by the Comminiists as a deserter from 
their cause. 

My husband is a loyal American. He has de- 
voted himself to our national defense, and his posi- 
tive contributions have been widely recognized. 
My husband is an outspoken opponent of commu- 
nism. He has done whatever lay -within his power 
to thwart the Communists. We have as a neighbor 
and are privileged to have as a friend one of your 
former colleagues. Senator Joseph H. Ball. He 
has asked me to present a letter to the Chairman 
and I would like to do so now. I would like to 
quote the last few lines of the letter : 

As you know, Stephen Brunauer was born in Hungary 
and spent his youth there. Many of his boyhood friends 
have been victims of Communist dictatorship. He is per- 
haps the most violently anti-Communist i>erson I know. 

I have no he.sitation in vouching for the complete loyalty 
of Stephen and Esther Brunauer to the United States 
and to our way of life. 



STATEMENT BY HALDORE HANSON' 

Mh. Cii.muman : I appreciate tiie opportunity to 
appear before your Conmiittee. 

On March 13, Senator McCarthy testified before 
this Committee that I had "pro-Communist pro- 
clivities" and that I was a man with "a mission 
to communize the world." He even compared a 
book I once wrote with Hitler's "Mein Kampf." 

Mr. Chairman, "Communist" is the nastiest 
word in (lie American vocabularj' today. In this 
country, it stands for an individual who is a sneak, 
a thief, a liar, a traitor. It makes no difference 
whether you qualify the word and say a man is 
pro-Conmiunist, or has an aflinity for communism, 
or has pro-Communist proclivities. They all mean 
that he is the dirtiest, lowest type of man. 

I deeply resent this attack upon my loyalty. I 
wish to state now, under oath, that I am not a 
Communist. I have never been a Communist. I 
have never belonged to an organization cited by 
the Attorney General as being a Communist-front 
organization. I have never knowingly associated 
with an espionage agent of a foreign power. I 
have never advocated the Communist form of gov- 
ernment anywhere, at any time, for any people. 

I have never committed any act which was disloyal 
to the United States. 

If Senator McCarthy will say directly what he 
has insinuated, if he will call me a Communist in 
that kind of direct American English which Mid- 
Avesterners are accustomed to using, and say it 
without the benefit of Senatorial immunity, I as- 
sure him that he will be called upon to answer to 
me in a court of justice at the earliest practicable 
moment. 

On what does Senator McCarthy base his serious 
charges that I have pro-Communist proclivities 
and that I have a mission to communize the world ? 
Does he base these charges on evidence that I am 
a member of the Communist Party ? Does he claim 
to have evidence that I have been associated with 
organizations which have been designated by the 
Attorney General as Communist fronts? Does 
he have any evidence that I have followed the 
Communist Party line in its slavish adherence to 
the needs of Soviet foreign policy during the past 

II years? Surely a man with a mission to com- 
munize the world would have performed some 
overt service for the Communist Party during this 
period. The reason Senator McCarthy does not 
have this evidence is because it does not exist. I 



' Made before a Subcommittee of the Senate Committee 
on Foreign Relations on Mar. 28, 1930, and released to the 
press on the same date. 



April 10, 1950 



577 



am confident that an investigation of my political 
philosophy and my moi'al character will convince 
you that both compare favorably with those of any 
loyal American who is conscious of his duties of 
citizenship and is striving to live honorably in his 
community. 

An examination of my record will disprove 
Senator McCarthy's accusations. That record has 
been examined by the Government through a com- 
prehensive FBI investigation comiileted in 1948 
under the President's government-wide loyalty 
procedures. My activities in China as well as in 
the United States were covered, and my writings 
were reviewed. Senator McCarthy produced no 
new facts before this Committee which were not 
available to those investigators. In fact, he pro- 
duced nothing that I hadn't put in a public library. 
After the FBI investigation, I was given a com- 
jilete clearance by the Department of State. 

In the course of these investigations, I made 
available to the officers concerned not only a full 
file of my public writings but even a personal diary 
which I had kept during the entire period that I 
was with the Chinese Communists. 

Mr. Chairman, I wholeheartedly believe in the 
President's loyalty program, and I want to help 
in every possible way to maintain the public's con- 
fidence in the loyalty of its servants. 

I believe that subversives can be ferreted out of 
the Government by the quiet, sober, thorough 
methods now used by the FBI. The kind of public 
denunciation, labeling, and hate-mongering with 
which we now are dealing is alien to the traditions 
of the United States and more closely resembles 
the purges of another political system. 

Mr. C'hairman, let me tell you what the impact 
was on me when my picture suddenly appeared in 
the newspapers under the caption '"'Red in State 
Department." 

On March 13, without any warning or oppor- 
tunity to present my side of the case, I was called 
out of a meeting and told that Senator McCarthy 
had named me to this Committee as one of the cases 
which he claimed would prove his charge that 
there were Communists in the State Department. 

I spent the rest of that day and practically all of 
the following day answering queries from the 
jjress and radio. 

By the third day, I acquii'ed a false feeling of 
optimism that came from reading and listening to 
viewpoints that coincided with my own. Many 
editorials said Senator McCarthy had not proved 
his case. So did many columnists and connnen- 
tators. Telegrams and letters from my personal 
friends told me it was ridiculous. Colleagues in 
the State Department told me not to worry abovit 
it. I thought that by the end of the week it would 
be forgotten, hoping that reasonable people who 
read the newspapers would know the charges were 
not true. 

That was the point at which I got my second 
shock. I went to see an elderly neighbor about 



helping me with some fencing on a farm I own in 
Virginia. 

He told me that the day before he had been 
standing at this mail box when several other neigh- 
bors stopped by. One said, "Could you believe it, 
that we have had a Russian spy living in our 
neighborhood all these years and didn't know it?" 

I went on to the home of the man who has been 
feeding my cattle this winter. He said he had 
been asked by a lumiber of persons in Leesburg, the 
county seat, whether he intended to keep on work- 
ing for "that Communist." 

From a housewife in the village near my farm, 
]\Irs. Hanson got word of a petition being circu- 
lated, calling my family undesirable and asking 
us to get out of the community. I have since veri- 
fied this report from several sources. 

My latest information of this kind concerns a 
meeting of a counti-y agricultural committee at 
Leesburg at which a Virginia State official from 
Richmond, in the presence of a number of farmers, 
denounced the growing number of Communists in 
government and named me as one of them. As far 
as I know, he had never heard of me until Senator 
McCarthy's charges. 

I do not recount these facts to appeal for 
sympathy. The farming connnunity in which I 
live consists of no more than 50 families. It is 
noted for its active church and PTA. It is a good 
American community. I want you to know what 
is happening in this one community. It may be 
happening in other communities across the land. 
I learned one thing from these experiences. To 
many loyal Americans, who have read the asser- 
tions about Communists still in the Government, 
any American whose name a]3pears in the news- 
papers charged with being a Communist is guilty 
until proved innocent. 

I deeply resent the action of a United States 
Senator, shielded by his Congressional immunity, 
who makes charges without investigation and thus 
starts a ground swell of hate. 

Senator McCarthy recommended that this Com- 
mittee examine my background and philosophy. 
I would like to submit fuller information on this 
subject than Senator McCarthy was able to quote 
from the Department of State Register. 

My Norwegian grandparents came to this coun- 
try about 1870 and settled in the little town of 
Sparta, Wisconsin, a little over 100 miles from 
Senator McCarthy's home town. The family home 
there is still occupied by Hansons. Various uncles, 
cousins, and nephews of mine, including Thomp- 
sons, Olsons, and Lundquists, are scattered in many 
towns of Wisconsin. 

My father aiid mother settled in the neighboring 
State of INIinnesota, where I was born in the iron- 
mining town of Virginia, Minnesota, the second of 
five children. I went to public school in Duluth, 
Minnesota. 

I was active in the YIMCA from the age of 10. 
I went to YMCA .summer camps and was presi- 



578 



Depatimeni of State Bulletin 



(lent of the Hi-Y Club duriiifi my liigh school 
years. From the age of 12 I was a Boy Scout. 
I became an Eagle Scout, a Boy Scout Camp 
Counselor, and served as Scout Master during my 
first year of college. I was active in the Presby- 
terian Church, of which all my immediate family 
were nicmbers. My father was a Sunday School 
superintendent. 

During my senior year in high school, I was 
awarded a sununer in Eui'opo as a result of an 
essay contest sponsored by a boys' magazine. The 
award included only my travel expenses from 
New York City to Europe and back to New York. 
I recall I went through a period of some uncer- 
tainty when I was unable to raise the necessary 
travel costs to New York, but a neighbor, an arclii- 
tect for the United States Steel Corporation, ar- 
ranged for me to travel down the Great Lakes and 
back on one of the compajiy's ore boats. I was 
then able to spend several months visiting in 
European homes, mainly in Scandinavia. 

I attended Duluth Junior College for a year and 
Carleton College at Northfield, Minnesota for 3 
years. By means of scholarships, a job waiting 
on table, and loans, I was able to finish my college 
education during the depression. I majored in 
historj- and political science. I was a debater 
and on the track squad. I was elected to Phi Beta 
Kappa. 

Carleton College for 40 years has maintained an 
afHliation with a Chinese high school, called Carle- 
ton-in-China, located in Shansi Province. I sup- 
]50se it was through hearing about this school that 
I became interested in Cliina. Before I decided 
to go there, I talked it over with a newspaper man, 
Jeff Jones, of the Minneapolis Star, and with Dr. 
Walter Judd, then doing medical research at Mayo 
Clinic. Both encouraged me. After graduation 
in 1934, 1 borrowed a small amount of money and 
made my way to Peiping, China. 

At fii-st, I lived with a retired Chinese Minister 
of Finance, working as a secretaiy and teaching 
in a YMCA college. I studied Chinese. That 
j-ear the Japanese Army was already holding 
maneuvers along the railroads east of Peiping, 
under an old treaty right, and there were a number 
of shooting incidents. 

My second year in Peiping, I held several teach- 
ing positions and began free lance writing for pub- 
lications in Shanghai. I spent the winter and 
summer vacations traveling through 14 Chinese 
provinces and writing articles for magazines in 
China. During that year the Japanese Army 
smashed the Chinese Government authority over 
the customs service in North China, by sending 
gangs of thugs to beat up the Chinese railroad 
guards. 

My third year, I taught English at Central 
China College, one of the 13 Christian colleges in 
China. I worked simultaneously as a "string" 
correspondent for the Associated Press and wrote 
editorials for the Hankow Herald. That was the 



year that Chiang Kai-shek was kidnapped, a truce 
was reached in the civil war. and the Chinese Com- 
munists agreed to fight against the Japanese under 
the leadership of Chiang Kai-shek. 

I have recently looked over my writing files for 3 
years 1934 to 1937, inunediatcly preceding the in- 
vasion. There are some (iOO pages of articles, 
mostly contributed to pul)lications in China. I 
was preoccupied with two subjects: one was the 
menace of the Jai)ancso invasion; the other was 
the appalling social problems of China. I wrote 
articles about Chiang Kai-shek's military prepa- 
ration, about the railroad network for defense, and 
about the Japanese battle over the customs. I also 
wrote about famines, flood control, the opium 
trade, the land tax, and experiments with new 
crops. I wrote no article about the Communists. 

Then came the war. When the invasion began, 
on July 7, 1937, it was no surprise. Our small 
American community in China had witnessed 
years of Japanese Army arrogance, bullying, and 
deceit No normal American in China in 193^ 
could avoid a feeling of bitterness toward Japan 
and an eagerness for successful Chinese resistance. 
That was the big political issue. It was the mam 
topic of conversation. It was the principal story 
for newspaper men. 

Two weeks before the war started, I returned to 
Peiping, hoping to be around when the shooting 
started!" For those 2 weeks, I assisted a Japanese 
resistance magazine and did feature writing for 
the Peking Chronicle. I was out at the Marco 
Polo Bridge on the morning of the incident. I 
was assigned thereafter as a full time correspond- 
ent of the Associated Press and covered almost 
every front in China. 

I returned to the United States m January 1939. 
During that year, I was married to Bernice Brovrn 
of Chicago, who had been a fellow student m 
college and later had served as a teacher at Carle- 
ton-in-China. We now have two children: a 
daughter, 4, and a son, 1. 

I rejoined the Associated Press at Chicago m 
1939, on the dav that Hitler invaded Poland, and 
served as a staflf writer and editor until shortly 
after Pearl Harbor. During this period, I studied 
French and German at the Berlitz School in Chi- 
cago, hoping that the AP would send me into the 
European war zone. 

In February 1942, I entered the Government. 
It happened this way : The AP assigned me to 
cover a meeting of the American Historical Asso- 
ciation in Chicago during the Christmas holiday 
season in 1941. I encountered a number of pro- 
fessoi-s who had lived in China. They told me 
that both the State Department and the Coordi- 
nator of Information were looking for people with 
China background. I wrote to both. I found that 
the State Department was primarily interested in 
someone to recruit civilian advisers for the Chinese 
Government and wanted a per-son with a current 
knowledge of conditions in west China where Gen- 



April ?0, 1950 



579 



eral Chiang Kai-shek was making his war base. 
I was hired by the Department to undertake that 
assignment. I would like to submit, as an exhibit, 
a list of the jobs I have since held in the Depart- 
ment and the work I have done. 

Without going into such details at this time, I 
should like, however, to correct a few false impres- 
sions given by Senator McCarthy. 

In discussing my work with the Far East branch 
of the FYiblic Affairs Overseas Program Staff in 
1947-48, he implied that in this capacity I was 
responsible for political policies. That staff was 
entirely concerned with the Department's Far 
Eastern information program, not with the formu- 
lation of policies. 

During my 8 years in the Department, I 
have never been assigned to the Bureau of Far 
Eastern Affairs, which is responsible for our politi- 
cal policies in that area; nor have I ever held a 
position which involved any responsibility for 
such policies or in which my advice on such policies 
was asked. 

Also, in discussing my present work with the 
Interim Office of Technical Cooperation and 
Development, Senator McCarthy quoted from the 
Departmental announcement of the creation of 
this office a set of responsibilities which he said 
were those of my division. He was quoting, how- 
ever, the responsibilities of the Office Director, a 
position now filled by a Class One Foreign Service 
officer and to be filled under the new legislation by 
an Administrator appointed by the President and 
confirmed by the Senate. 

Senator McCarthy then read another set of re- 
sponsibilities which in actuality are those of not 
one, but three Assistant Secretaries of State for 
the various regional bureaus — i.e., Assistant Secre- 
taries Butterworth, McGhee, and Miller — and 
concluded : 

This is all to be done by the unit to which Hanson has 
been assigned as Chief. 

I appreciate the promotion. My role is actually 
of a more humble nature. 

My only major private interest today, outside 
the Department of State, is the management of a 
270-acre cattle farm in Loudon County, Virginia, 
which I bought in 1945. Last year, I fattened 60 
head of cattle and produced approximately 100 
hogs. I have spent from 40 to GO days a year, in- 
cluding most weekends and all my vacations, work- 
ing on this farm, putting up new fences, repairing 
buildings, and helping with the animals. I live 
there with my family 7 or 8 months of the year and 
commute to Washington. 

My wife has been in real estate work, between 
babies, and her earnings helped to pay for a new 
silo and two cattle ponds at the farm. 

If I have any "mission," other than trying to do 
a good job at my work, it is to make tiiat a model 
farm which will pay back the substantial amount 
invested in new buildings and fences. 



I should now like, Mr. Chairman, to take up 
some of the specific items which Senator McCarthy 
cited as evidence. 

I take first his reference to my newspaper dis- 
patches which were smuggled out of guerrilla ter- 
ritory by arrangement with Chinese Communist 
generals. 

Senator McCarthy neglects to state that I was 
with the Communist Army by assignment as a war 
correspondent of the Associated Press, that this 
was during the Japanese invasion of China ; that, 
at the time, the Chinese Communists had signed a 
truce with Chiang Kai-shek and were fighting 
against the Japanese under the supreme command 
of Chiang Kai-shek. 

As a reporter, I found that the Chinese Com- 
munists were putting up a good fight against the 
Japanese, and I wrote about them as I saw them. 

Now, it is grossly misleading to take objective 
journalistic reports about the Chinese Communists 
in 1938, at the time of a United Front with Chiang 
Kai-shek against Japan, and to deduce from them 
my attitude toward the Chinese Communists 11 
years later, in the midst of a cold war between the 
democracies and world communism. 

I hesitate to draw such a comparison, but the 
Senator could conclude with equal logic that Wins- 
ton Churchill is guilty of pro-Communist pro- 
clivities because, back in November 1943 he said : 

That monstrous juggernaut engine of German might 
and tyranny has been beaten and broken, outfought and 
outmaueuvered by Russian valor, generalship and science. 

There is no question in my mind that, since V-J 
Day, the Chinese Communists have been guided 
by their joint interests with the international Com- 
munist movement. 

Incidentally, Senator McCarthy stated under 
oath tliat I had spent 2 years with the Chinese 
Communists. Actually, as my book shows, it was 
4 months. 

Senator McCarthy also concluded that the mere 
fact I was able to travel with Chinese Communist 
troops was evidence that I was pro-Communist. 
I went to Chinese Communist territory because I 
was ordered there by Associated Press and also 
because as a good newspaper man I wanted to go 
where the news was. It makes no more sense to 
say that I was pro-Communist because I spent 4 
months behind the Chinese Communist lines than 
to say that I was pro-Japanese because I spent 11 
months behind the Japanese lines. I was later 
cleared by Chiang Kai-shek's army intelligence 
for an assignment at his General Staff Head- 
quarters, living in the same hotel with the staff. 

If there had been anything pro-Communist 
about those dispatches of mine, I am sure my own 
AP superiors would have been the first to protest. 
I looked in my AP file for that period and fomid a 
letter from my New York office dated November 
30, 1938. It is signed by John. Evans, Chief of 
the AP foreign service. It reads in part: 



580 



Department of State Bulletin 



I send you my own and others' compliments on the 
guerrilla stories. The attached clipping shows how a 
half dozen of your stories were dovetailed to make two 
long stories in the Sunday Service. You know that Mc- 
Daniel had a hand in shaping up your notes and messages. 

The stories were used widely and attracted such atten- 
tion that Readers Diycst asked to reprint them .... 

The page from Time is another proof of general interest 
In the human narrative you pulled out of interior China. 
The world is somewhat tired of war communiques but it 
welcomes a fresh view of life behind the lines and the blood 
and iron that carries on the war. 

I received a further letter from the Associated 
Press office in New York dated December 13, 11)38. 
It was signed by the General Manager, Kent 
Cooper. Sir. Cooper described the arrangements 
with Readers Digest for publishing some of my 
stories on the guerrillas and concluded : 

May I add my personal congratulations to you on the 
excellence of your work in this connection? 

Now, tlie book about which Senator McCarthy 
spoke is entitled Humane Endeavor, The Story of 
the China War. It is a book of 380 pages, pub- 
lished in the fall of 1939 by Farrar and Rhinehart. 

It was my first and, so far, my only book. It 
was published when I was 27 years old. It is not 
a great book. It did not sell well. I consoled 
myself at the time that its publication was almost 
simultaneous with Hitler's invasion of Poland, a 
fact which focused attention on Europe. 

The book attempted to give a balanced picture 
of the China war. I devoted 12 chapters to my 
experiences with the Japanese Army, 9 chapters to 
my experiences with the Communist guerrillas, 
and 10 chapters to the military and economic effort 
of Chiang Kai-shek's Nationalist forces. 

But I don't believe the excerpts chosen by Sen- 
ator McCarthy give a balanced picture of my book. 

For example, Senator McCarthy used the fol- 
lowing characterizations in an attempt to show my 
pro-Communist feelings : 

General Ho Lung : He is a living picture of Rhett Butler 
from the pages of "Gone With the Wind." 

General P'eng Teh-huai : A most rigid disciplinarian and 
the most f>ersistent student of world affairs. 

Mao Tze-tung : The least pretentious man in Yenan and 
the most admired. 

And for the group: My attitude toward Communist 
China's leaders was a mixture of respect for their per.sonal 
integrity and a resentment of their suspiciousnes.s. They 
Impressed me as a group of hard-headed straight-shooting 
realists. 

Incidentally, that was a misquotation by Senator 
McCarthy. What I wrote was "hard-headed, 
hard-shooting realists." 

If the Committee will turn to the section of the 
book devoted to Chiang Kai-shek's government 
and armies, it will find even more favorable refer- 
ences to Nationalist leaders. 

For example, I referred to "the progress toward 
honest government which Chiang Kai-shek is pro- 
moting in China." And here are some other such 
references : 



Chang Chun, governor of Chiang Kai-shek's war base: 
"A reputation for integrity, diplomacy, and absolute 
loyalty." 

Madame Chiang Kai-shek: After a de.scriptlon of her 
war orphanages— "Such a development Is extraordinary in 
China where people have so long been Indifferent to the 
welfare of the lower classes. The credit must go to the 
Madamissinio and her American Ideas of philanthropy." 

Dr. F. C. Yen, Chiang Kai-shek's MlnLster of Health: 
"As fearless u crusader against quackery as Dr. Morris 
Flslibein of the American Medical Association Journal." 

Dr. Wong Wen-hao, Chiang Kai-shek's Director of 
Economies: "An able executive and an excellent Judge 
of men. . . . One of Wong's first acts In office was to insti- 
tute into the government an able group of professors from 
Feiping and Tientsin. This little clique of nonpartisans 
included Dr. T. F. Tsiang, recent Ambassador to Russia; 
Dr. Uu Shih, Ambas.sador to the United Slates; and a 
score of scientific experts in engineering, mining and agri- 
culture. The scientists of this group now form a brain 
trust for the Ministry of Economics, . . ." 

This book is a report of what I saw, what I was 
told, and what I recorded as accurately as I could 
at the time. 

No author is a competent witnei3s regarding his 
own book. I think it is pertinent what the news- 
papers and book reviewers had to say about this 
book at the time of its publication. Surely, if this 
book had been biased, some reviewer would have 
said that it was pro-Communist, or that "here is 
a man with a mission to communize the world." 

I have about 100 clippings, the kind of thing 
that a first author generally keeps in a scrapbook 
in the attic. I will skip mere literary criticism 
and give you the comments which will help you 
to judge my objectivity. 

The Associated Press, September 10, 1939, signed by John 
Selby :: 

Hanson is that priceless thing, a good and objective 
reporter ... He comes to some reasonable conclusions 
about the fracas in the East, now overshadowed by the 
geographically nearer drama on the European stage . . . 
The author has, first, an eye for the colorful fact. He 
has sympathy without sentimentality. 

Philadelphia Inquirer, December 13, 1939, signed by 
Alexander Kendrick : 

All the other books on the Chinese war, and there have 
been many, have simply kept the seat warm for Mr. Han- 
son, who was the Associated Press correspondent in North 
China from the time of the Marco Polo bridge "incident" 
in 1937 until a few months ago. Han.son's news accounts, 
as any copyreader knows, have been a model of unbiased 
understanding, and vivid reporting. Now, reading his 
book, the first full and comprehensive account of the long 
war, it is easy to see why he made such an excellent job 
of things. 

The Herald, Durham, North Carolina, December 17, 
1939: 

Haldore Hanson's new book on the Sino-Japanese con- 
flict does not preach any doctrines; It does not seek to 
warn us of any danger which might come to us out of the 
Chinese nightmare. His job is a piece of straight report- 
ing, like his newspaper work for the Associated Press, and 
he has done it well. 

The News and Courier, Charleston, South Carolina, 
January 7, 1940 : 



April 10, 1950 



581 



By far the best of the personal experience stories that 
has come out of the China war is "Humane Endeavor" by 
Haldore Hanson . . . Hanson, although frankly critical 
of Japan and sympathetic toward China, nevertheless re- 
veals China's vast military impotency ; the treachery of 
some grafting generals, and the lack of support given to 
the Chinese Communist army — which all writers seem to 
agree has the best miUtary record of any combatant unit 
on the Chinese side. 

Chicago Trihune, December 13, 1939 : 

Just at the time when Russia's excursion into Western 
imperialism is indirectly spotlighting the Chinese- 
Japanese stalemate, Haldore Hanson, a young war cor- 
respondent, gives us an exciting three-dimensional pano- 
rama of that eastern conflict. 

Hanson went to Japan and China in 1934 as a steerage 
passenger, found friends among tlie natives, ate their food, 
learned their language, eventually taught their children. 
When war came he understood the strangely dissimilar 
philosophies that liad so much to do with shaping its 
course ... He was first to get into the guerrilla territory. 
Free lance newspaper work had given him a background 
of Information about China and Japan that lend authentic- 
ity to his reports. 

In commenting on the book, Senator McCarthy 
used partial quotation from it as a basis for the 
statement that "this young man has a criminal 
record in China where he was arrested, not by the 
Communists, but by the anti-Communists." 

I have never been arrested by anti-Communist 
officials of the Chinese Government. I have never 
been arrested by any otlier kind of officials of the 
Chinese Government. My only arrests in China 
were by the Japanese Army military police, when 
I tried to investigate atrocities. 

Senator McCarthy's false statement that I was 
arrested by anti-Communist officials is based on a 
careless quotation from page 349 of my book. I 
was talking about actions which threatened 
Chinese unity and might lead to a reopening of 
the civil war in the midst of the Japanese invasion. 
This passage in my book reads : 

Anti-Red officials witliin the government were taking 
every possible opportunity for indirect attacks upon the 
Communists. Local police made raids in a dozen cities 
upon book shops that handled Communist publications. 
Leaders of the Communist youth corps were arrested by 
military officers at Hankow. I myself was the victim of 
one of these incidents and found that local officials were 
the instigators. 

That is what Senator McCarthy read to this 
Committee, but the very next sentence goes on to 
explain what the incident was. It reads : 

When I arrived in Sian from guerrilla territory and told 
the police that I was proceeding to the Communist head- 
quarters at Yenan, my American passport was seized and 
held for 9 days. 

Let me add that after my passport was returned 
to me by direction of the Chinese Foreign Office, 
the official who seized my passport gave an official 
dinner in my honor attended by other high officials 
at Sian and he issued a public apology. 

Wliatever the circumstances might have been, 
however, one would expect that a United States 
Senator would at least read those two or three 



sentences twice, and perhaps even make a little 
inquiry about them, before publicly branding an 
American citizen a criminal. 

Mr. Chairman, I have noted in Senator Mc- 
Carthy's statement before this Committee numer- 
ous errors in quoting from documents. I mean 
textual misquotations. In my experiences with a 
press association, if a reporter made one factual 
error, he was required to explain the circumstances 
to the city editor. If the error was of a character 
which might be libelous, the bureau chief was re- 
quired to report to New York on the circumstances. 
One libelous error could ruin a newspaper man. 
If Senator McCarthy were a newspaper man, he 
almost certainly would be fired for writing the 
story he gave this Committee. 

Senator McCarthy cites three other writing 
activities which he believes will show that I am 
"a man with a mission to communize the world." 
They are: 

1. That I was a contributor to Pacific Affairs. 

2. That I wrote for the magazine Arnerasia. 

3. That I was running a Communist magazine 
in Peiping when the Japanese-Chinese war broke 
out. 

There were only a few American magazines 
devoted to Far Eastern affairs when I was writing 
about China. Among those few were Pacific 
Affaij's put out by the Institute of Pacific Rela- 
tions, and another was Amerasia. What was more 
natural than that I should offer articles for sale to 
these magazines? I sold two to Pacific Affairs 
and two to Amerasia. The Amerasia articles were 
chapters from my book, adapted for magazine use. 

Senator McCarthy has played up the association 
of these magazines with a doubtful character or 
two, and has played down their connection with 
eminently respectable American citizens. And 
having in this manner associated the magazines 
with communism, or disloyalty, or illegality, he 
has tied me to the same stump by pointing out that 
I sold articles to those magazines. 

When I sold my few articles to Pa-ci-fic Affairs 
and Amerasia they were eminently respectable 
journals, dealing with Far Eastern matters, and 
they carried articles by leading scholars on Far 
Eastern affairs. Pacific Affairs stiWdo^s. Anier- 
asiu is dead. But that is beside the point. The 
point is that if we have got to the point in America 
where writers must assume responsibility for the 
political opinions, the morals, and the public activ- 
ities which all of the editors or owners, or stock- 
holders or writers that magazines may hold or 
later develop — then we have traveled far indeed 
from those basic principles upon which this coun- 
try was founded. For my part, I do not believe 
that we have reached this point. I believe that 
base and loose charges of this sort, and those who 
prefer them, will receive the scorn and contempt 
of the American people that they deserve. 

In connection witli my Amera-'<ia writings, Sen- 



582 



Department of State Bulletin 



ntor McCartliy stated that Pliilip Jaffe, the editor, 
was ''arrested, indicted, and found fjuilty of hav- 
ing been in ille<ial possession of several luuidred 
secret documents from the State, Navy, War, and 
otlier Government Department files." The arrest 
of Mr. Jaffe took place years after I sold two 
articles to him. 

Let me say one further word about Senator 
McCarthy's charge that I "was running a Conmiu- 
nist magazine in Peiping when the Japanese-Chi- 
nese war broke out." Tlie Senator apparently is 
referring to a Chinese magazine devoted to resis- 
tance against Japan. The name of the magazine 
was Democracy. It appeared twice a month for 
3 months in the spring of 1937. My name was on 
the Board of Editors for two issues, and I attended 
one board meeting. On the Board of Editors were 
four professors from Yen-Ching University, three 
newspaper writers, and one social welfare worker 
at the Peiping Union Medical College. Not one 
of these, to my knowledge, was a Communist. 

One that I knew of, however, was a member of 
Chiang Kai-shek's Executive Committee in the 
Nationalist Party. The aim of the magazine was 
to promote a united front against Japanese inva- 
sion ; and. with all due respect to Senator Mc- 
Carthy, I submit that that was a laudable effort. 

Mr. Chairman, I am a young man. I am not a 
national figure. My friends and associates are not 
national figures. I have tried to bring the best 
testimonial that is at my disposal — ^my own story 
of my life and what I have stood for. 

I am a loyal American and I believe that I am 
entitled to have the Committee say so. I deeply 
ajipreciate its attention. But the corrective action 
of this Committee cannot attain the same head- 
lines, reach the same people, or fully counteract 
the suspicions and hatreds which Senator Mc- 
Carthy's charges have unleashed. Congressional 
inmiunity may protect him from lawsuit, but it 
will not save him from moral accountability. 



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583 



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Discount Rates 561 

Objectives of U.S. Policies Toward Asia. 

By Ambassador Loy W. Henderson . . 562 
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Resources. Statement by Secretary 

Acheson 568 

Evacuation of Americans From Shanghai. 

Statement by Secretary Acheson. . . . 568 
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Occupation Matters 

Allied Watch on the Rhine. By Haynes 

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O; S. SUPERINTFNDFNT OF DOCUMENTS 

MAY 4 1950 
The German Problem and Its Solution 

by John J. McCloy, U.S. High Commissioner for Germany ^ 



Our friendships here symbolize tlie links be- 
tween our two countries. Those links have been 
greatly strenjjthened by the war and the events 
since its end. Those events have also demonstrated 
our vital concern in Europe. Together with our 
European neighbors, we have embarked through 
the Marshall Plan and the Atlantic pact on a joint 
program to provide for the common defense and 
promote the general economic welfare. 

In the occupation of Germany, we are engaged 
in still another part of this joint task. Tonight, 
I want to give you my thoughts on this German 
problem and its solution. 

When the fighting ended, we had hoped that the 
four Allies could work together in healing the deep 
wounds of tyranny and war. Instead, each year 
the Kremlin has sought to widen the gap between 
East and West. 

In Germany, the contest has taken dramatic 
form. The Soviets have constantly frustrated the 
determined efforts of the Western Allies to pre- 
serve -i-power unity. The Soviet rulers have ma- 
neuvered only to subjugate Germany into vas- 
salage. 

In this drive, the Soviets are again using in 
Germany the very methods the Xazis used such a 
short time ago — marching youth, mammoth meet- 
ings, appeals to militarism and the national front, 
violent abuse of opponents, and constant purges. 
Despite their solemn pledge to outlaw German 
militarism, they are training a German army in 
the Eastern zone under the guise of a police force. 

The Soviet campaign aims first of all at Berlin. 
The course of that campaign has been tortuous. 
First, they sacked the city, then they wooed it, next 
they sought to starve it. Now, talking of freedom, 
they threaten, with the help of their puppet re- 
gime, to force Berlin into submission by a new 
application of totalitarian methods. 



'An .ifldress deliverod before the Pilgrims' Society, 
London, Apr. 4, 1950, and released to the press on the 
same date. 



Berlin — A Democratic Outpost 

The Soviet pressure to absorb Berlin and force 
us out is strong proof of the challenge of Western 
ideals. As an outpost behind the Iron Curtain, 
Berlin is a constant reminder to the satellite peo- 
ples of the possibility of a different way of life — 
a reminder which no amount of propaganda can 
erase, a reminder which the Soviets recognize as 
a standing threat to their coercive system. 

The Communists wull not succeed in taking over 
the city of Berlin. The free men and women of 
the city will not permit it, and we will not permit 
it. The British, the French, and the Americans 
are fully determined and fully united. We shall 
stay in JBerlin. 

Counteracting Soviet pressure is vital, but it 
does not solve the German problem. Now, what 
is our common policy in Germany ? All of us want 
to prevent Germany from again becoming a men- 
ace. In seeking to attain this goal, we have been 
following two main roads. 



Policy in Germany 

First, to prohibit institutions and activities dan- 
gerous to peace. 

Second, to encourage a truly democratic society. 

On the first point, in the interest of security, our 
fixed policy has been to impose and maintain effec- 
tive controls against the revival of a German war 
machine. This we intend to do until the evidence 
convinces us that progressive forces have strongly 
established themselves in the political and eco- 
nomic life of Germany. In order to foster the 
growth of democratic practices and attitude, the 
German people and their elected governments have 
been granted substantial powers and responsibili- 
ties. But even so, we have retained important 
security controls, and, in the event of a real threat, 
we can resume all or part of the authority we have 
relinquished. 

Wisely acbninistered, these various forms of 
control can serve as important safeguards of the 



April 17, 1950 



587 



peace, and there is no gainsaying the fact that 
Germany still gives evidence of the need for re- 
strictions and controls. 

But restraints alone are not enough. Our 
greater hope must lie in constructive efforts to 
strengthen the progressive forces in German life. 
We do not aim to remake Germany in our own 
image, but we do seek to encourage Germans of 
good will to build a vigorous, democratic state. 

In its history, Germany has produced many 
creative figures. But for too long, the world has 
suffered from the destructive side of the German 
character. In justice to herself and the world, 
Germany must display to this and coming genera- 
tions the peaceful, creative side of her genius. 
This is the great challenge. Only the Germans 
can meet it, but we can do much to help them. 

In short, our German program seeks to achieve 
security by restricting the power to make war 
and by encouraging the growth of democracy. 
This twofold progi'am is wise and necessary. 
Nevertheless, in my judgment, it is only half the 
remedy. The other half must be a united Europe 
of which Germany must be a part. 

Need for a United Europe 

The need for a united Europe is made more 
urgent by the threat from the East, but it would 
still be present even without that threat. The 
fact is, we cannot solve the German problem with- 
out fitting it into the larger context of a united 
Europe. Only within that context do I see the 
opportunity to direct the economic, political, and 
spiritual forces of Germany into healthy and 
peaceful channels. 

Time does not permit me to develop in detail 
the reasons which lead me to this conclusion. But 
I do wish to suggest some of the main considera- 
tions. First, let us look for a moment at the 
economic facts. These are critical : with only half 
the area of prewar Germany, the Federal Repub- 
lic has 70 percent of Germany's prewar popula- 
tion, including over 9 million refugees from the 
East. I hope we shall be successful in our efforts 
to unite Germany but even with unity in order 
to support that population Germany must rely on 
industrial output even more heavily than she did 
before the war. 

Without the solution of these basic economic 
problems, democratic forces may not ba able to 
retain power and exercise influence in Germany. 
It is essential then to build an economy strong 
enough to support its larger population. Yet this 
may require an economy strong enough to be a 
potential threat to the security of its neighbors. 
The dilemma must be solved. 

This, I am convinced, can be accomplished only 
by assimilating Germany into a broader European 
community. Only thus can Germany and Europe 
produce the goods and services necessary for a 
prosperous and secure future. 

These economic factors lead directly to the po- 



litical. To insure the freer flow of trade and the 
development of European markets will require ef- 
fective political machinery. Moreover, centuries 
of European conflict demonstrate the need for an 
agency adequate to restrain nationalistic forces. 
To be specific, after two world wars, Germany's 
neighbors today fear the rebuilding of a strong 
German economy unless some over-all rule of law 
protects them against its use for ruthless aggres- 
sion. 

There is a third aspect of the problem which 
may be the most important : the psychological or 
spiritual factor. Man seeks loyalties and ideals 
to which he can dedicate himself and which will 
give meaning to his daily life. In an earlier day, 
national states provided sufficient scope for this 
need. Today, this is no longer true. Certainly in 
Germany many youn^ men and women feel that 
their lives are blocked by a dead end. The cause 
is not only the physical or economic condition of 
their country. The difficulty is rather that no goal 
or concept seems to inspire hope or to evoke dedica- 
tion. Without such a hope, without a wider hori- 
zon, they will become victims of the demagogue. 
But, with such a hope, they may create a free 
society. 

In short, the crucial need is for a genuine Euro- 
pean community. The demands of security, of 
economic, and of spiritual health, all call for the 
same solution. Events press us to this solution 
and by "events" I do not mean merely the East- 
West split, but the deeper moral, political, and 
economic forces that surge in Europe today. 

Prompt Action Necessary 

Many factors call for prompt action. Today, 
the West has the opportunity to unite for its own 
defense. Tomorrow may be too late. Today, Ger- 
many is still in a formative stage and, I believe, 
wants to join in a united Europe. Tomorrow, the 
situation in Germany and in other European coun- 
tries may have taken a turn which will make action 
more difficult. Today, the idea of a European 
community has a strong hold on the minds of the 
common people throughout the continent. To- 
morrow, if steps have not been taken to make this 
idea a reality, those hopes may be dashed and sup- 
port for the program may be dissipated. Today, 
the United States is firmly committed to help Eu- 
rope and has shown in many ways its interest in 
the development of a European community. To- 
morrow, if action has not been taken toward that 
goal, tliat interest may be succeeded by a sense 
of frustration. 

Finally, in the last 10 years, in war and peace, 
the leaders and peoples of Europe have been learn- 
ing to work together on many joint projects. 
These skills and attitudes can form the firm base 
for the next step toward a real community. 

At the same time, every thoughtful person must 
recognize the tremendous obstacles in the path of 
European unity. No friend of Britain, aware of 



588 



Department of State Bulletin 



her probloiiis, would dare urge any step wliicli 
niiglit prejudice Britain's existence or impair her 
position as a leader of nations. The United States, 
too, will have to do its share. So it is with full 
appreciation of the difliculties involved that I say 
no pennanent solution of the German problem 
seems possible without an effective European 
union. 

Experience between the two wars and since 
teaches us that palliatives will not do. And there 
is good reason to believe the problem can be solved. 
Tlie courage and energy so magnificently displayed 
in the war can be enlisted in the creative task of 
building a strong European community. The 
European tradition is a heritage which the world 
cannot afford to lose. That heritage can best be 
preserved by making Europe a vital outlet for the 
energies of its young men and women. 



This concept of a new Western Europe is our 
best hope for peace. It is a threat to no one. Its 
very existence will reduce the danger of armed 
conflict; its riglitful power will check the ruthless 
plans of ambitious men ; and its democratic nature 
will preclude any aggressive action on its own 
part. 

Three hundred 3-ears ago, a member of Brad- 
ford's company wrote back to England after the 
first harsh winter in Plymouth colony. He was 
able to weigh those hardships against tKe spiritual 
goal of the Pilgrims. He wrote : "It is not with 
us as with other men whom small things can dis- 
courage, or small discontentments cause to wish 
themselves at home again." We too must measure 
our difficulties in the light of our own purposes. 
If we carry in our hearts this spirit of the Pil- 
grims, we may also count as small the obstacles to 
our own high goals. 



A Two- Year Record of Recovery 



hy Secretary Acheson ' 



Two j^ears ago the American people, acting 
through their Congress and the President, began 
a "heroic adventure" with the people of Europe. 
The phrase is not mine — it belongs to that valiant 
worker for peace. Senator Vandenberg. I know 
his heart is with General Marshall, Mr. Hoffman, 
his colleagues of the Senate and House, and the 
men and women of the Economic Cooperation Ad- 
ministration in this celebration of the second an- 
niversary of the program to which they have all 
made vital contributions. 

Looking back, why did we begin this venture? 
The war had left the people of Europe nearly 
prostrate. It would have been difficult, perhaps 
impossible, for them to rise by their own efforts, 
and we in i\jnerica knew that a peaceful and hope- 
ful future could not be won for us or for them 
until Europe once more stood proudly on its own 
feet. 

We did not limit the scope of our offer of 
cooperation. 

The sufferings and the destruction left by the 
war were not confined to any one area. All over 
the continent people were longing to rebuild a 
useful and orderly existence after the long misery 

'An addres.s delivered before officials and represent- 
atives of the European Recovery Program in Washington, 
D.C., Apr. 3, 1050, and released to the press on the same 
date. 



and violence of the war. They wanted to restore 
their homes and farms and workshops. They 
wanted to plan for the futures of themselves and 
their families ; they wanted to move toward a more 
promising day, toward a world in which peace 
might endure. 

The Recovery Blueprint 

We in America wanted this too. And so Gen- 
eral Marshall proposed that all European coim- 
tries should participate in a joint recovery 
program, to which each would contribute in the 
measure of its ability. In this way and with our 
aid, we hoped that the weak and war-wracked 
organism of Europe could regain strength and 
health. 

We were rebuffed by a small group of men who 
stood to profit from Europe's misery and who 
have never viewed the United States with anything 
but envy and hostility. More important, the 
principle of international cooperation was scorned. 
As a result of an arbitrary and selfish attitude on 
the pait of some, the program was limited to that 
half of Europe where men were at liberty to choose 
the path of cooperation. 

Within that half of Europe, the recovery plan 
has now operated for 2 years under the directioa 
of the European countries, working with Mr. Hoff- 



Apti\ 17, 1950 



589 



man and Mr. Harriman and the splendid team they 
have organized and led. This combination has 
been unbeatable. This has been the kind of a con- 
structive job that arouses the enthusiasm and spirit 
and devotion of free men. 

Production Mirrors Success 

Great progress has been made in Western Eu- 
rope. Over-all industrial production in 1949 was 
15 percent above the 1938 level. Coal production 
was 434 million metric tons in 1949 — in 1948 it was 
398 million tons. Steel output in 1949 was 46 
million metric tons — one-sixth more than in 1948. 
The production of bread grains has risen by more 
than half in the period from 1947 to 1949. 

And these gains will continue, for the farmers 
and workers have more and better tools and ma- 
chines. In 1949 the average factory worker piro- 
duced 25 pei'cent more than he did in 1947. 

It would be incomplete if I spoke of European 
recovery as though it mattered only to that one 
continent. Western Europe is one of the world's 
great workshops and one of the world's great mar- 
kets. The recovery which has been made there 
has extended its influence to many other coun- 
tries — to the countries of South America, to Af- 
rica, and to Southern Asia. It is gi'eatly to the 
interest of all of us to have Western Europe strong 
and healthy. 

This illustrates what has been accomplished 
through the Marshall Plan. This is the exciting 
record of recovery. These statistics are alive with 
hope. 

Triumph of Cooperation 

The progress that has been made is a triumph 
of man's ingenuity, of man's will, of man's con- 
fidence in the power of free institutions. It is not 
a triumph for any one nation, or for any one class, 
but a triumph of cooperation. 

We are proud of our contribution. We have 
supplied a great deal of assistance to this coopera- 
tive effort. But our contribution has been only 
the "something extra"' that was needed. It has 
added the vital margin to the efforts and resources 
of the people of Europe themselves. 

When the European Eecovery Program began, 
the Communists filled the air with dire predictions 
that the European countries could not cooperate 
in this way without its ending in their domination 
by the United States. The experience of the Euro- 
pean Recovery Program has shown how dishonest 
and insubstantial this propaganda was. No coun- 
try has lost anything but poverty; no country has 
gained domination, but all have gained in self- 
respect and have won a new confidence and a 
strengthened independence. Meanwhile, the peo- 
ples of Eastern Europe and China have learned 
that there is indeed a part of the world where the 
harvest of collaboration is a bitter fruit. 



Looking to the Future 

Now, as we look forward, what facts do we 
want to call to mind? 

First of all, we must remind ourselves that the 
real test of stamina is how we do in the long middle 
stretch of the race. Here is where staying power 
has to come in to take over the initial enthusiasm. 
Eighteen countries are cooperating in the most 
exciting thing that is happening in the world. 

Second, the recovery of production — which was 
the first great object of the program — was diffi- 
cult and arduous, but it was easier in many ways 
than the recovery of trade — the second great ob- 
ject of the program. To restore satisfactory levels 
of trade, the European countries have to overcome 
maladjustments arising from the economic effects 
of two great wars and difficulties stemming from 
political and economic conditions deeply rooted in 
their history. 

The revival of production was mainly a national 
problem, which required a great national effort 
and some outside assistance. The recovery of 
trade, however, is largely an international prob- 
lem, requiring a high degi-ee of cooperative give 
and take and difficult, even painful, adjustments. 
We are aware that it is difficult for the goverimients 
of the participating countries, faced with large 
needs and inadequate reserves, to risk in practice 
what their own self-interest commends. 

We also recognize that trade is a two-way street, 
for us as well as for them, and that we bear a large 
responsibility for achieving a satisfactory balanc- 
ing of our trade with Europe and the world. We 
are vigorously' addressing ourselves to this prob- 
lem, which is of vital interest to our farmers and 
workers and businessmen. Together with the par- 
ticipating countries, we have to lay solid founda- 
tions during the coming period for the future. 
We are going to have to continue to cooperate in 
many ways, to draw more closely together, to co- 
oi'dinate our economic policies, if we are to build a 
system that works. 

Finally, we must remind ourselves that the 
answer to the forces opjjosing recovery is the same 
which we — the United States and the participat- 
ing countries — gave in 1947, namely, to proceed 
confidently, seriously, deliberately to the construc- 
tive work at hand. Peace is what men make it and 
the only way to win it is to plug away at it. 

The European Recovery Program lights a path 
to a future to which men can look M'ith confi- 
dence for peace and order in a system based on free- 
dom and justice. We in America continue to 
regret that the bright hope of progress along this 
path must be confined to half of Europe. We re- 
gret that it has not yet ]n-oved possible for all the 
peoples of Europe, to shake off the shackles of 
bitterness and violence and to join hands in the cre- 
ation of a better world. We regret, but we do not 
despair, for the fear of a few will yet succumb 
to the hope and the strength and the determination 
of the many. 



590 



Department of State Bulletin 



The Future of Foreign Trade 



by Willard L. Thorp, Assistant Secretary for Economic Affairs ' 



Any similarity between foreign trade before the 
war and during the postwar period is hirgely 
coincidental. At the end of the war, many for- 
eign countries found themselves with new import 
requirements. For example, Europe had to im- 
port from us many millions of tons of coal, and 
France and Germany imported wheat by the ship- 
load. We even sent rice to Japan. Sources of 
supplj' also were shifted ; for example, rubber was 
no longer an exclusive product of the tropics but 
could be manufactured in the United States in 
synthetic foiun, and huge oil reserves have been 
discovered and developed in the Middle East. 

The ability to make payment for imports by 
the various countries also changed tremendously. 
The United States greatly increased its capacity 
to produce and its position as a creditor nation 
while European countries found themselves with 
drastically reduced foreign investments, increased 
foreign obligations, and reduced productive ca- 
pacity. Such important factors in international 
economics as tourism and shipping faced the nec- 
essity of reconstruction from the war's devasta- 
tion. 

There is another important change from the pre- 
war picture. Because of the pressing demand for 
imported goods and their limited ability to pay 
for them, many countries continued their war con- 
trols or established new ones over foreign trade 
and foreign exchange. Import and export licenses 
became as familiar as bills of lading. In fact, the 
over-all pattern of controls was much more exten- 
sive than prewar. Even those countries which 
emerged from the war in strong financial condi- 
tion, such as Sweden, Brazil, Mexico, and Canada, 
saw their reserves dwindle under the pressure of 
the demand for imported goods until they had to 
join the list of countries where import restrictions 
were necessary. 

' Made liofnre the Sopii'ty of the Plasties Industry at 
Chicago, III., on Mar. 30, 1050, and released to the press on 
the same date. 



Effects of a Continuing Financial Assistance 

Among all these changed circumstances, the 
most important postwar element has been the con- 
tinuing extraordinary financial assistance ex- 
tended to other countries by the United States. It 
was this which made possible the tremendous vol- 
ume of American exports so needed for postwar 
relief and recovery. In 1947, the United States 
shipped abroad l-i.4 billion dollars of commodities, 
an all-time peacetime record. In that year, the 
gap between our merchandise exports and our 
merchandise imports was 8.7 billion dollars, made 
up largely by American assistance plus the liquida- 
tion of certain assets which still remained in the 
possession of foreign countries. In 1948, our ex- 
ports dropped by about 2 billion dollars, imports 
increased, and the merchandise gap dropped to 
slightly over 5.4 billion dollars. In 1949, both 
exports and imports fell by about half a billion, 
and the merchandise dollar gap was cut to slightly 
below 5.3 billion dollars. As compared with 1947, 
American commodity exports in 1949 were down 
2.5 billion dollars, and commodity imports had 
increased by slightly less than 1.0 billion dollars. 

Developments in the Trade Pattern 

These annual figures for 1949 do not clearly 
disclose the more recent developments in the trade 
pattern. The decline in 1949 took place in the last 
half of the year, particularly in the record of ex- 
ports. Although no single nuMith is a reliable 
indicator in foreign trade matters, our exports in 
January 1950 were the lowest since October 1946. 
Imports in January, on the other hand, have been 
exceeded in only 4 months since the end of the war. 

The actual movement of goods, recorded in the 
import and export statistics, is always the result 
of influences at work months before, when plans 
were made and orders placed. At least three nega- 
tive factors were at work in early 1949 which 
affected trade in the latter part of the year. First 



Apr]] 17, 1950 



591 



was our own business recession, which, being 
largely an inventory adjustment, involved the 
postponement of purchases abroad as well as at 
home. Second was the rapid weakening of the 
British financial position which led to their pro- 
gi-am to cut sterling-area dollar purchases by 25 
percent and to the devaluation of the pound 
sterling, followed rapidly by many other cur- 
rencies. Third was the recognition by several 
Latin American countries that they had overdrawn 
on their commercial credit and had to curtail im- 
ports until they could reduce their heavy backlog 
of short-term obligations. Of these elements, our 
recession is long since over, the British financial 
situation is greatly improved, and the backlogs are 
now being paid off. The devaluation remains, 
however, as an important element in affecting the 
1950 record. 

The determining factor in the volimie of trade 
anywhere is the ability of the customers to buy. 
Our export trade clearly depends upon the ability 
of other countries to buy from us. The demands 
by foreign purchasers for our goods are so gi'eat 
that, even when substitute sources can be found 
for certain goods, they merely shift the use of 
their hard-currency purchasing power to other 
items. From a national point of view, there is no 
real discrimination against the dollar today al- 
though restrictions are placed against some Ameri- 
can goods in order to make possible the purchase 
of other American goods. The only competing 
use for dollars is the strengthening of financial 
reserves and few countries can afford this use, 
as yet. 

Obtaining Supply of Dollars 

If the supply of dollars in customers' hands is 
so important, let us look at the way they are ob- 
tained. The largest source of dollars in the hands 
of foreign countries in 1949 was payments by 
American purchasers for foreign products. Im- 
ports have been slowly increasing year-by-year 
since the end of the war. Although there was a 
decline in mid-1949, the figures for the last 3 
months, November through January, were about 
equal to those in the same period 12 months be- 
fore, a decline in imports from Asia being offset 
by an increase from our southern neighbors. Since 
prices are lower, this means that the quantity of 
imports is actually higher than a year ago. 

THE MERCHANDISE TRADE 

Three fairly new factors are at work to increase 
our imports. First is the devaluation of curren- 
cies, which tended to cut foreign prices in terms 
of dollars. Second is the new and vigorous efforts 
which are now being made by foreign countries 
and foreign business men to understand and to sell 
in the American market. Third is the increasing 
recognition within the United States that we are 
now a great creditor nation and that that fact 



has an important bearing on our trade policies. 
We cannot continue to sell our goods abroad, or 
receive a return on our investments and the credit 
obligations due us, unless foreign countries in 
some way or other can obtain the necessary hard 
currency to make these isayments. 

THE NONMERCHANDISE TRADE 

But merchandise trade is not the only export 
we have, nor is it the only way in which dollars 
are earned. The preliminary figures for 1949 show 
that our creditor position required payments to us 
of over 1 billion dollars on foreign investments, 
a return on capital previously exported. This, 
then, was a burden upon the dollar supply abroad. 
On the other hand, with respect to the various 
invisible service items such as shipping, insurance, 
and tourism we bought more than we sold, giving 
foreign countries a net of slightly over 200 million 
dollars. Over 400 million dollars went abroad as 
gifts and inunigrant remittances and over 1 billion 
dollars as net long-term capital investment. 

FOREIGN TRAVEL 

Looking ahead, it is possible that foreign-pur- 
chasing power can be increased by developments 
among these nonmerchandise items. Certainly, 
there is room for a great expansion in foreign 
travel, and there are tremendous possibilities for 
American investment abroad. But travel is de- 
pendent upon facilities, ships, planes, and hotels. 
And investment abroad faces special difficulties 
and hazards. The flow of private capital to other 
coimtries will not increase unless investors feel 
assured of a reasonable business opportunity and 
of fair treatment. 

GOVERNMENTAL ASSISTANCE 

Finally, we have been making the equivalent 
of dollars available to foreign countries through 
extraordinary governmental assistance — that is, 
by making goods available without requiring dol- 
lar payment from abroad. Recognizing tlie needs 
of the potswar situation, we have been financing a 
substantial part of our exports through federal 
appropriation. This element in our balance of 
payments has been at a level of 5 to (i billion dol- 
lars a year but is clearly sclieduled to decline. The 
EGA authorization which was proposed to Con- 
gress by the President was more than 1 billion 
dollars less than the appropriation of last year. 

Balancing Exports With Imports 

I Iiave now outlined the eleuionts in the problem. 
Disregarding the lesser items, our exports of goods 
and services stand on one side of the ledger. On 
the other side, are our imports of goods and serv- 
ices, our foreign investment, and our foreign 
assistance. The two sides of the ledger will always 



592 



Department of State Bulletin 



balance. In the final analysis, if any one of these 
items ciianges, some other items nuist chanpe as 
well. Our foreign international relationships are 
subject to double-entry bookkeeping^. 

It is of great importance to us and to otlier 
countries as to the pattern which the new balance 
will eventually take. Neither we nor they are 
eager to maintain a substantial foreign assistance 
program in tlie form of unilateral grants. Most 
nations, like most individuals, prefer economic 
independence. But the decline in this element in 
the balance inevitably must be matched by an ad- 
justment elsewhere — in lower exports, larger im- 
ports, or greater foreign investment, or some of all 
three. Each of these items, in turn, has many 
other intluences playing upon it. One important 
influence is the level of domestic business in the 
United States — a decline, for example, would not 
only reduce our purchases of foreign raw materials 
but, if history repeats itself, would stimulate the 
cry for pi-otection against the import of manufac- 
tured products. Another influence from outside 
the trade field is the extent to which other countries 
will assure decent treatment of foreign investors 
through the medium of commercial and investment 
treaties. 

A drastic curtailment of exports by several bil- 
lion dollars a year could hui't many American 
industries and agricultural groups severely. It 
would slacken the rate of progress which other 
countries are making with raw materials and ma- 
chinery from the United States. Economic expan- 
sion is always better than contraction. 

Adjustments To Be Made 

But if we wish to avoid contraction, we must 
work hard at the problem. There clearly is some 
adjustment which will be made. This is not an 
imaginary problem. Xo one has invented it, and 
no one can make it disappear. It is part of the 
tremendous postwar adjustment required by a 
new set of basic economic conditions. 

In an economic system such as ours, we could not 
bring about any particular and exact adjustment, 
even if there were no foreign elements in the prob- 
lem. But we can greatly influence the form the 
adjustment will take. Our policies must be such 
as to help the achievement of the best relationship 
from all points of view among the various entries 
in the ledger. There is no single formula, nor any 
way of predicting what the future holds. But it 
seems to me that certain lines of approach should 
be evident — that we should endeavor as a nation 
to find ways and means of facilitating increased 
imports of both goods and services into this coun- 
try and to seek ways and means of facilitating 
increased foreign investment. 

There can be no doubt but that the problem 
would be further eased if trade about the world 
were not so limited by controls. But as long as 
trade is out of balance, the controls appear to be 



necessary. This is a form of vicious circle. The 
goal toward which all nations must work is very 
clear — one where international transactions take 
place with as little arbitrary interference as possi- 
ble. This is the objective which underlies our 
foreign economic policy and is the heart of the 
principles in the charter of the International 
Trade Organization, now before Congress for rati- 
fication. Already, in recent montiis, our trade bal- 
ance in this hemisphere has reached a point wliere 
imports are slightly more than exjjorts; while for 
Eurojie, Asia, and Africa, in each case our mer- 
chandise exports have exceeded our imports. The 
possibilities of multilateral trade are becoming 
increasingly apparent. 

These possibilities are, as yet, far from realiza- 
tion. Controls and restrictions have a tendency 
to perpetuate themselves. To win freedom for the 
trading world from this maze of restriction and 
red tape requires vigorous and sustained effort by 
the United States. If we, the foremost exponent 
of multilateral trade and private investment, fail 
to ratify the charter of the International Trade 
Organization and if we are unwilling to adjust our 
policies to the facts of our new position as a credi- 
tor nation, the chances of reestablishing a multi- 
lateral trading world will be dim indeed. 

The economic progress made since the end of 
the war has been tremendous. The period of acute 
shortages has come to an end. Today's interna- 
tional economic problems lie in the field of trade. 
That is why this problem of balance of payments 
is of crucial importance. We nnist not think of 
these problems in a narrow frame. The policies 
which will shape the future of our foreign trade 
must be considered not only in domestic out also 
in international terms. It is important that the 
essentials of the problem be understood by every- 
one. The way in which the problem is solved may 
work to tear down all we have accomplished, or it 
can add constructively to strengthening the free 
nations of the world. 



Japanese Officials To Study 
UNESCO in United States 

The Department of State announced on ilarch 
21 that Iwao Nishimura, Chief of Liaison and 
UxEsco Section of the Ministry of Education; 
Tatsua Fukai, Chief, Uxesco Sub-Section, Liaison 
and UNESCO Sub-Section, Minister's Secretariat, 
Ministry of Education; and Kenichiro Yoshida, 
Chief International Cultural Section, Ministry of 
Foreign Affairs are recipients of grants-in-aid 
from the Department in cooperation with the De- 
partment of the Army and are visiting the United 
States for a period of 60 days for the purpose of 
studying activities organized in the interests of 
UNESCO in this country. 



April 17, 1950 



593 



Anniversary of Signing of North Atlantic Treaty 



Statement Ijy Secretary Acheson 



[Released to the pi'ess April 4] 



It is api^ropriate today for Americans to con- 
sider seriously the responsibilities which rest on 
the United States as a member of the international 
commnnity. It is appropriate because exactly 1 
year ago, on April 4, 1949, we joined with 11 
other Jsorth Atlantic nations in signing the North 
Atlantic Treaty. 

The objective of the North Atlantic Treaty is 
the promotion of peace in accord with the purpose 
and principles of the Charter of the United Na- 
tions. The Treaty seeks to prevent war by stop- 
ping it before it starts, by making it clear to any 
potential aggressor that war would not pay, and 
that the North Atlantic nations will not be divided 
and then swallowed piecemeal. This Treaty is not 
directed against any nation; it is directed solel}^ 
against aggression. If any nation alleges that the 
Treaty is directed against it, then we must conclude 
that that nation harbors aggressive designs. . . . 
for the treaty provides for no military action 
except in the case of an attack against one of its 
members. 

Under the Treaty, we are helping and shall con- 
tinue to help the other North Atlantic nations in 
building our collective defensive strength. The 
Mutual Defense Assistance Act of 1949 was a first 
step in implementing the concept of common de- 
fense under the jirinciple of self-help and mutual 
aid embodied in the North Atlantic Treaty. Mili- 
tary assistance under this legislation already is 
going to North Atlantic Treaty nations. It is 
anticipated that, shortly, the Congress will be 
asked for additional authorization to extend fur- 
ther military assistance. 

We nuist realize that onr European friends in 
the Treaty are similarly contributing to tlie com- 
mon defense. They have made encouraging prog- 
ress toward economic recovery, but they still have 
a diHicult task ahead and can build defensive 
strength only as fast as their economic and finan- 



cial condition will allow. They must have our 
continued help. 

Much progi-ess has been made under the North 
Atlantic Treaty since it was signed a year ago and 
ratified by all signatories a few months thereafter. 
The initial task was that of establishing an organ- 
ization. The major part of this organization was 
established and functioning by November of last 
year. The next step was to get on with the job of 
preparing plans for the common defense. Repre- 
sentatives of all the Treaty nations have ener- 
getically pursued this task, and much progress 
has been made in the very short time which has 
elapsed. A spirit of real cooperation has mani- 
fested itself, and common defense plans are becom- 
ing a reality. 

But the Treaty nations must work toward even 
closer association in the North Atlantic connnu- 
nity in oi'der to help maintain international secu- 
rity and achieve a higher state of well-being. We 
must develop the Treaty to its full effectiveness 
as a positive influence for peace. These efforts, 
combined with our efforts in other areas, are a 
necessary supplement to our fundamental policy 
of full support of the United Nations in its efforts 
to achieve international peace and security. 

The fact that we signed tlie Treaty and that 
subsequently the Senate gave overwhehning con- 
sent to its ratification is evidence of the determina- 
tion of the American people to work for peace. 
We must realize the fortunate position whicli the 
United States enjoys today. We must realize that 
the continuation of our prosperity and well-being 
depends on like-minded nations being able to main- 
tain their freedom and democratic institutions. 
We must do our utmost to support their freedom 
and democratic institutions and to ensure that 
international peace and security are maintained. 
Tliat is our responsibility to ourselves and our 
responsibility as a member of the international 
conmiunity. 



594 



Department of State Bulletin 



Answers to Czechoslovak Protests Against Treatment 
of Citizens Landing in U.S. Zone of Germany 

[Rclcuscd to the press April 6] 



The American Einhaasy in Praha received from 
the Czechoslovak Ministry of Foreign Affairs two 
notes dated March JO, 1950, with reference to the 
recent landing at Erding Field near Munich in 
the United States zone of Germany of three Czech- 
oslovak Airlines planes ivith 85 persons aboard 
from Czechoslovakia. In one of these notes, eight 
persons who allegedly planned the flight to Ger- 
many were charged with having committed on 
hoard the three planes the crimes of endangering 
the lives of memJbers of the crew and passengers, 
unjustified limitation of personal freedom, dan- 
gerous threatening, and violently kidnapping 
Czechoslovak citizens and carrying them over the 
frontier. The note requested the extradition to 
the Czechoslovak authorities of the eight indi- 
viduals named '''as common criminals for penal 
frosecutianp 



U. S. NOTE TO CZECHOSLOVAKIA 

On April 6, the Ainerican Embassy transmitted 
to the Ministry of Foreign Affairs a note in re- 
sponse, the text of which is given below : 

In reply the Embassy has the honor, under in- 
structions of its Government, to communicate the 
following : 

The Ministry will doubtless realize that no basis 
in law exists for making or complying with its 
request for extradition of the individuals named 
"as common criminals for penal prosecution." 
The treaties now in force between the United 
States and Czechoslovak Governments cannot be 
considered applicable to the question of returning 
from the United States Zone of Germany any of 
those accused by the Czechoslovak Government. 
Tlie principles of international law recognize no 
right to extradition in tlie absence of treaty. The 
United States authorities are, accordingly, under 
no obligation to surrender the persons requested. 



It is clear that these individuals fled Czechoslo- 
vakia for political reasons by whatever means they 
could find to escape. It has never been the practice 
of the United States Government to take action 
which would have the effect of subjecting political 
offenders to criminal jurisdiction. The position of 
the United States Government on the extradition 
of political offenders was stated by Secretary of 
State Marcy in the Koszta case on September 26, 
1853 as follows : 

"To surrender political offenders ... is not a 
duty; but, on the contrary, compliance with such 
a demand would be considered a dishonorable sub- 
serviency to a foreign power, and an act meriting 
the reprobation of mankind." The United States 
Government, therefore, sees no reason to assist in 
the enforcement of Czechoslovak internal law by 
returning the accused in this case. 

As a matter of comitj', the United States au- 
thorities endeavored, of course, to return to Czech- 
oslovakia, as promptly as all necessary arrange- 
ments could be completed, persons from the planes 
who expressed a desire to return. Tlie United 
States Government will continue strictly to ob- 
serve such standards of international conduct. 
Comity, on the other hand, could not reasonably 
be construed to require the United States authori- 
ties to arrange for the return of those persons who 
were resolved to remain. In accordance with hu- 
manitarian principles, the latter have been given 
the right of political asylum. 



Following is the text of a note dated Apnl 6 
frojn the American Embassy at Praha to the Min- 
istry of Foreign Affairs in response to a note dated 
March 30 protesting against the interrogation and 
general treatment of certain Czechoslovak citizens 
who landed in the United States zone of Germany 
on March 34 : 

The American Embassy presents its compli- 
ments to the Czechoslovak Ministry of Foreign 



April 17, 1950 



595 



Affairs and has the honor to acknowledge receipt 
of the Ministry's note dated March 30, 1950, pro- 
testing against the interrogation and general 
treatment of certain Czechoslovak citizens who 
landed in three Czechoslovak aircraft at the 
United States military airport in Germany on 
March 24 and demanding the punisliment of the 
American officials concerned. The Ministry's note 
has been forwarded to the appropriate United 
States military authorities in Germany for in- 
vestigation and comment, but, in the meantime, 
the Embassy has been instructed to transmit the 
following observations on the statements con- 
tained in the Ministry's note in question. 

The Ministry complains that the Czechoslovak 
Consul General at ilunich was advised of the 
arrival of three Czechoslovak planes only 36 hours 
after their illegal and unauthorized landing at 
Erding Military Airport and that a further 8 
hours elapsed before the Consul General was able 
to see the Czechoslovak citizens. The Embassy is 
pleased to receive this information and exjDress 
the hope that this action will be used as a precedent 
by the Czechoslovak authorities in the future. To 
cite only three random but typical instances of the 
difficulties encountered by Embassy consular offi- 
cers in their attempts to see American citizens un- 
der detention in Czechoslovakia, reference is made 
to the Embassy's note of October 7, 1949,' and the 
Ministry's reply of October 18, 1949,' in regard 
to the American citizen Savel Kliachko, who was 
detained by the Czechoslovak security organs for 
5 days during which time he was not allowed to 
communicate with the Embassy nor was the Em- 
bassy informed of his detention ; to the Embassy's 
constant efforts to interview two American sol- 
diers. Privates Hill and Jones, who entered 
Czechslovakia illegally on December 9, 1948, which 
efforts were not successful until April 5, 1949 ; and 
to the Embassy's recent requests to be permitted 
to see two young Mormon missionaries who were 
seized and imprisoned by the Czechoslovak au- 
thorities on January 28 and held for over 4 weeks 
during which, prior to the moment of their ex- 
pulsion, all consular access was denied them. 

The Ministry also complains that the American 
authorities, without reason, refused to permit the 
travel from Munich to Czechoslovakia of certain 
of the Czechoslovak citizens who arrived on the 
three planes on a collective passport issued by the 
Czechoslovak Consul General. The Embassy is 
not aware of any principles or rules of interna- 
tional law which would permit a country unilat- 
erally to prescribe the type of travel documents 
which are acceptable for travel by its citizens in 
another country. 

The Ministry complains against the fact that 
the Czechoslovak citizens in question were interro- 
gated upon their arrival, basing this complaint 
upon the fact that certain of these Czechoslovak 



' Not priiitod. 
596 



citizens had no intention of entering territory oc- 
cupied by the United States, nor of remaining 
there. The Embassy is unaware of any provisions 
of international law which would prohibit the 
appropriate authorities of a territory from inter- 
rogating citizens of another country entering that 
territory legally or illegally, voluntarily or invol- 
untarily. In the case in question, an illegal entry 
was involved, and the Embassy fails to understand 
how the motives and circumstances of entry could 
have been determined except through interroga- 
tion. 

The Ministry makes certain complaints in re- 
gard to the manner and form in which the interro- 
gation was carried out : 

Exception is taken to the fact that the questions 
were asked by members of the CIC rather than 
"regular security organs of the American occupa- 
tion administration." The Embassy is unaware of 
any provisions of international law which permit 
a nation to designate the organs of another country 
competent to interrogate citizens of the first coun- 
try illegally entering territory under the control 
of the second country. 

The IMinistry complains that Mr. Karel Nejepin- 
sky refused to leave the Czechoslovak plane in 
which he was a passenger after it had landed at 
Erding, that he was forcibly removed from the 
plane and that in the course of this removal his 
hand was hurt and his coat was torn. The Em- 
bassy regrets that this incident occurred but points 
out, subject to possible further comment upon 
receipt of information from American authorities 
in Germany, that the incident apparently resulted 
from the refusal of a Czechoslovak citizen to con- 
form to the instructions and regulations of the 
authorities in control of a United States militarj' 
airport which he had illegally penetrated. The 
Embassy also notes that Mr. Nejepinsky was "re- 
leased from prison at the intervention of the Czech- 
oslovak Consul General" and expresses the hope 
that the responsive attitude of the United States 
authorities in Germany to the representations of 
the Consul General will be reciprocated by the 
Czechoslovak authorities in connection with sim- 
ilar representations which may be made to them 
by American consular officers in Czechoslovakia 
on behalf of American citizens in ditKculties in this 
country. 

The Embassy will not fail to communicate with 
the Ministry in regard to this matter upon receipt 
of further instructions from its government. 

With reference to the Ministry's note of March 
25, 1950, requesting the return of the three airci-aft 
in question and clearance for the flight of an air- 
craft of the Czechoslovak airlines to Erding in 
order to transport the crews that will take over the 
three planes, the Embassy has been authorized to 
inform the Ministry that these planes will be re- 
leased in due course as soon as an investigation of 
all aspects of the case has been completed by the 
pertinent authorities. At such time as the planes 

Department of State Bulletin 



arc released, tlie requested clenrance will be 
granted, hut the Kuibussy lias been authorized to 
adil that should tlie Czechoslovak (Toverniuent for 
any reason not wish to send another aircraft and 
crews to (lerniany, the United States Air Force 
would be happy as a measure of friendly collabo- 
ration to provide, on request, crews and to deliver 
the planes to Praha. 

In as much as the Ministry's note of March 30 
imder acknowledgment was made public by the 
Czechoslovak authorities, the Embassy i-equests 
that they likewise publisli the text of tliis reply. 



CZECHOSLOVAK NOTES TO U. S. 

The Ministry of Foreign Ailairs has the honor 
to advise the Embassy of the United States of 
America of the following facts in connection with 
the flight of three Czechoslovak aircraft and with 
their landing on a United States military airport 
in Germany : 

The flight of three Czechoslovak airplanes car- 
rying out regular civilian transport on inner-state 
lines from Brno, Ostrava, and Bratislava to Praha 
was an action prepared beforehand by a terrorist 
group of marauders. This action of a flight across 
the state frontiers, which had been agreed to and 
prepared beforehand was carried out by commit- 
ting penal acts qualified as criminal by the exist- 
ing Czechoslovak laws as well as by the laws of all 
civilized states. 

Of the crew of the first of the mentioned planes 
Vit Angetter and Kamil Mraz. both former mem- 
bers of the British Air Force, forced the pilot with 
loaded revolvers to change the direction of the 
flight. "UHien the pilot was reluctant to comply 
they violently removed him from his seat and tied 
him up. They did the same to the remaining two 
members of the crew. In this way they committed 
the penal act of endangering the lives of the mem- 
bers of the crew and of the passengers [Section 
33.5 of the Penal Code], the unjustified limitation 
of personal freedom [Section 93 of the Penal Code] 
and of dangerous threatening [Section 09 of the 
Penal Code]. Moreover, they committed the act 
of violently kidnapping Czechoslovak citizens and 
carrying them over the frontier [Section 90 of the 
Penal Code] and this of the members of the crew 
as well as of the passengers with the exception of 
those few people, with whom they had been in 
agreement beforehand. All the above-mentioned 
therefore committed criminal acts according to 
existing Czechoslovak laws. 

As the place of crime was on board of a Czecho- 
slovak airplane, these crimes were committed on 
Czechoslovak sovereign territory. 

In both further cases the members of the group 
of marauders acted similarly and committed the 
same crimes. 

In the airi)lane on the route Ostrava-Praha the 



members of the crew Captain Svetlik and the em- 
jiloyee of the Czechoslovak Airlines Viktor 
PoDelka, both former members of the British 
Air Foire, violently forced the pilot to change the 
direction of the fliglit. AVlien the latter resolutely 
refused to comply, they tied him up and with the 
helj) of "robot" construction directed the flight 
toward the American occupation zone in Germany. 
They then tied up the remaining members of the 
crew, the mechanic and radio-telegraphist. In this 
way they committed penal acts qualified accord- 
ing to Czechoslovak law as penal acts of endanger- 
ing the lives of the crew and of the passengers 
[Section 33,5 of the Penal Code], and as unjustified 
limitation of personal freedom [Section 93 of the 
Penal Code] and as dangerous threatening [Sec- 
tion 99 of the Penal Code] and the penal act of 
violently kidnapping Czechoslovak citizens and of 
carrying them over the frontier [Section 90 of 
the Penal Code], and this of the members of the 
crew as well as of the passengers with the excep- 
tion of one person, who was in agreement with the 
aforementioned. 

In the third plane flying on the route Bratislava- 
Praha the members of the crew Captain Oldrich 
Dolezal, Borivoj Smid, Stanislav Sacha, and Jan 
Kralovansky, through their beforehand agreed- 
upon action, committed criminal acts, qualified ac- 
cording to existing Czechoslovak laws as the penal 
acts: of endangering the lives of the passengers 
[Section 335 of the Penal Code] and of their vio- 
lent kidnapping [Section 90 of the Penal Code] 
with the exception of two of the passengers who 
had beforehand been in agreement with the perpe- 
trators of this action. 

Both these latter cases took place on board of 
Czechoslovak airplanes, therefore on Czechoslovak 
sovereign territory. 

The above-mentioned facts confirmed by the 
victims of the kidnapping in their capacity of eye 
witnesses form the factual basis of penal acts quali- 
fied according to existing Czechoslovak laws as 
criminal acts. As these crimes were committed on 
board of Czechoslovak airplanes, representing 
Czechoslovak sovereign territory, the Ministry of 
Foreign Affairs requests the Embassy of the United 
States of America that : 

Vit Angetter, Kamil Mraz, Vladimir Svetlik, 
Viktor Popelka, Oldrich Dolezal, Borivoj Smid, 
Stanislav Sacha and Jan Kralovansky 

be extradited to the Czechoslovak authorities as 
common criminals for penal prosecution. 

The Ministry of Foreign Affairs avails itself 
of this opportunity to renew to the Embassy of the 
United States of America the assurance of its con- 
sideration. 

Praha, March 30, 1950 



The Ministry of Foreign Affairs has the honor 
to advise the Embassy of the United States of 
America of the following facts concerning the 



April 17. 1950 



597 



flio-ht of three Czechoslovak aircraft and their 
landing on a United States military airport in 
Germany : 

The Ministry of Foreign Affairs mainly wishes 
to point out the attitude of the American occupa.- 
tion authorities in Germany toward Czechoslovak 
citizens as well as toward the whole of this clear 

matter. ^ . - i • i 

The Ministry of Foreign Affairs further wishes 
to advise of the facts pertaining to the interro- 
o-ation of Czechoslovak citizens on the territory 
occupied by the United States in Germany and 
this as well as to its antilegal character and its 
whole manner and form. 

The Ministry of Foreign Affairs points out tacts 
proving the absolute unwillingness of the Ameri- 
can authorities toward a rapid and smooth settle- 
ment of the whole matter : 

The Czechoslovak Consulate General in Munich 
was advised by the American occupation adminis- 
tration of the arrival of three Czechoslovak air- 
planes carrying on board Czechoslovak citizens, 
kidnapped against their knowledge and volition 
over Czechoslovak frontiers, only 36 hours after 
their having landed on the United States military 
airport at Erding. The Ministry further points 
out the intentional delays and obstructions which 
the Czechoslovak Consul General in Munich met 
with, this in the matter of contacting the kid- 
napped Czechoslovak citizens— he was only able 
to do so 8 hours after having been advised of 
their arrival— as well as in the negotiations con- 
cerning their return to the Czechoslovak Eepublic, 
when the American authorities without reason re- 
fusecl to give their permission for their return on 
a regular collective passport issued by the Czecho- 
slovak Consulate General, and while realizing that 
travelers on inner-state lines do not carry pass- 
ports, they were only willing to grant permission 
to leave on individual passports. 

The Ministry protests against this attitude and 
way of acting of the organs and authorities of the 
United States. 

The Ministry of Foreign Affairs further ex- 
presses its surprise and regret at the fact that the 
criminal agents of the attack and of the mass kid- 
napping, at their arrival, were not held by the 
American security organs as might have been 
expected in every civilized country, but that on 
the contrary they were given a friendly welcome 
and that they were treated much more favorably 
than the victims of their crimes. 

As far as the interrogation of the kidnapped 
Czechoslovak citizens is concerned, the Ministry 
of Foreign Affairs mentions the following facts 
concerning its antilegal character as well as its 
form and manner. 

No legal basis or presuppositions were given for 
the interrogation of Czechoslovak citizens, not 
even according to United States laws. The 
Czechoslovak citizens were brought into Germany 

598 



against their own volition and knowledge by the 
criminal action of a few individuals. They imme- 
diately declared that they wished to return home 
instantly. They therefore found themselves in 
this situation involuntarily and they had no in- 
tention of entering territory occupied by the 
United States of America, nor of remaining there. 
They therefore should not have had to undergo 
interrogation. The fact that they underwent in- 
terrogation represents an antilegal act on the part 
of the American organs and authorities. 

As far as the manner and the form in which the 
interrogation was carried out are concerned, as 
well as the manner in which the kidnapped Czecho- 
slovak citizens were treated, the Ministry of For- 
eign Affairs mentions the following facts : 

The interrogation was not carried out by regular 
security organs of the American Occupation Ad- 
ministration, but by members of the CIC. Dur- 
ing the interrogations they asked Czechoslovak 
citizens about circumstances that had no connec- 
tion whatsoever with their involuntary landing 
and presence on territory occupied by the United 
States of America. 

Karel Nejepinsky, Jan Eeznicek, Leopold Thur- 
ner, and others were particularly asked about their 
employment in the Czechoslovak Republic, about 
the branch of their work, and the manner of its 
execution, about their political adherence, about 
military conditions in Czechoslovakia, about 
their superiors and about a whole lot of details 
concerning the activity of all those being interro- 
gated. They were asked whether they wished to 
remain in Germany as refugees and when they 
declared that they wished to return home, efforts 
were made to persuade them not to do so. 

When the Czechoslovak citizens proudly insisted 
in their initial attitude, the interrogators changed 
their manner and proceeded to use threats and 
other forms of pressure. They particularly exer- 
cised pressure on the members of the crews, who 
resolutely insisted on their return. At the begin- 
ning they promised them well-paid jobs, they \yere 
persuading them to stay, then they tried to intimi- 
date them and finally used threats should they 
wish to return. 

As far as the form of interrogation is concerned 
it is necessary to mention the case of Vaclav Kolar. 
He was interrogated in a manner which had lastly 
shown itself in the methods of interrogation of the 
infamous criminal Gestapo. During the interro- 
gation he had to stand with his arms raised and 
with his face toward the wall. The reason for this 
was that Vaclav Kolar had protested against the 
manner in which the American organs treated 
Czechoslovak citizens. 

In order to complete the picture, of how Czecho- 
slovak citizens were treated, it is necessary to point 
out that the luggage and personal documents of all 
Czechoslovak citizens wishing to return home were 
antilegally taken away from them and they had 
to undergo a personal examination. Their lug- 

Deparfmenf of State Bulletin 



tjage ami ilocuinents also were (horuuglily exaiu- 
iiied. Tliese were returned to them in a disordered 
state in spite of many i>r<>tos(s ami after a lenirtliy 
Jiroeedure only shortly before their departure for 
Czechoslovakia on Tuesday morninii. the i!Sth of 
this month. The investifiatinfi organs did not 
stop at violatiiiir rip;iits coneerninfi; human free- 
dom, ineludiufi the limitation of personal liberty. 

Two particularly marked cases are a proof of 
tlie violation of personal freedom and projjerty. 
The Member of rarliament for the Czechoslovak 
Socialist Party, Antonin Fiala, had his parlia- 
mentary card taken awa\' from him tou:ether with 
all his other documents. All the slicets were torn 
out of this card, and he was only i-eturned the 
cover. The torn-out sheets were then returned 
to him torn up together with the other things 
which had been taken away from him. 

The second marked case is that of Karel Neje- 
pinsky. Nejepinsky refused to leave Czechoslovak 
sovereign territory — he did not wish to leave the 
Czechoslovak airplane. Although they had not 
the slightest reason for this action and mainly no 
right to do so, the American organs dragged him 
out of the airplane b}' violence. By being handled 
in this way he was wounded in the hand, and his 
coat was torn. In spite of the protests of his 
fellow travelers he was separated from them and 
antilegnlly and without reason deprived of his 
personal freedom and lield in prison. During the 
interrogation which again was carried out with 
unheard of methods, he was forced to undergo a 
personal examination and all his effects were taken 
away from him. When he refused to reply as to 
his activity in Czechoslovakia, about his job, about 
the conditions of the enterprise in which he 
worked, he was threatened with being sent into a 
camp where there would be Germans who had 
been transferred from Czechoslovakia and with 
being put under the supervision of a German Com- 
mander who had purportedly also been transferred 
from Czechoslovakia. Then the German who was 
supposedlj' the commander of the camp with which 
they threatened Nejepinsky was called into the 
interrogation, and in the presence of the American 
organs began to interrogate Nejepinsky as to his 
attitude toward the transfer of Germans from the 
Czechoslovak Republic. Wlien Nejepinsky re- 
plied that he agreed with the transfer and this 
was carried out not only in accordance with but 
directly on the basis of the decisions taken by the 
three Great Powers at Potsdam, the interrogators 
started again to threaten him and he was taken to 
prison imdei- armed guard. 

In prison the interrogations were repeated sev- 
eral tmies. He was only released from prison at 
the intervention of the Czechoslovak Consul Gen- 
ei'al, who personally went to the prison in question. 
His i^ersonal property was returned to him in a 



disordered state at the same time when the prop- 
erty of the other Czechoslovak citizens was re- 
turned to them. 

The Ministry of Foreign Affairs protests most 
strongly — first against the antilegal act of the in- 
terrogation of Czechoslovak citizens, and particu- 
larly against its form and manner. The Ministry 
protests most strongly against the manner in which 
the occupation authorities and organs of the 
United States treated Czechoslovak citizens, in 
this way violating the most fundamental hunum 
rights. This form is in contradiction to and vio- 
lates the most fundamental rules of international 
law and is only a too actual reminder of the meth- 
ods of the Gestapo. 

The Ministry of Foreign Affairs further de- 
mands the punishment of those executive organs 
which committed the actions mentioned in the 
present note, who abused their position and ofiice 
and in this way made use of the state of distress 
of Czechoslovak citizens. 

The Ministry of Foreign Affairs avails itself 
of this opportunity to renew to the Embassy of the 
United States of America the assurance of its 
consideration. 

Praha, March 30, 1950. 



Passports To Be Issued 
for Travel to Yugoslavia 

[Released to the press April 4] 

In view of the understanding reached with 
Yugoslavia which became effective on April 1, 
1950, clarifying the status of American citizens 
of Yugoslav origin who visit that country, the 
Department of State announced today that Ameri- 
can passports will now be freely issued for travel 
to Yugoslavia. 

Under the new agreement, which has been made 
with Yugoslavia, that country will readily grant 
exit permits to American citizens of Yugoshiv ori- 
gin who are in possession of American passports 
bearing Yugoslav visas. Persons to whom Amer- 
ican passports are issued for travel to Yugoslavia 
should apply to a Yugoslav consul for a visa. This 
is particularly true of American citizens of Yugo- 
slav origin. This latter category should not im- 
dcrtake to travel to Yugoslavia with other than 
American documentation. If they are dual na- 
tionals, that is, persons who possess ])oth American 
and Yugoslav nationalit}', they should not provide 
themselves with Yugoslav passports. 

The Department and American Foreign Service 
officers abroad are discontinuing the use of the 
restrictive stamp which had the effect of invalidat- 
ing the documents for travel in Yugoslavia. 



April 17, 1950 



599 



Greece Urged To Increase Productive Capacity 



[Released to the press April 4] 



The following is the text of a note sent hy Ambassador 
Henry F. Orady on March SI, 1950, to Prime Minister 
Sophocles Venizelos: 

Excellency : I feel obliged to bring to the atten- 
tion of yourself, the new Parliament, and the 
Greek people the fact that a critical period has 
been reached in the recovery of Greece. American 
aid was designed not only to help establish peace 
but to meet the basic needs of the people for food 
and clotliing. It was intended also to create new 
productive enterprises which, by employing more 
fully the willing labor of the people and the nat- 
ural resources of the country, would improve the 
lot of the people and would render Greece inde- 
pendent of foreign aid in the future. 

The first two objectives, those of military se- 
curity and relief from disti-ess, have been attained. 
The physical reconstruction stage of Greek recov- 
ery has proceeded well. But the effort to make 
Greece self-sustaining and independent of foreign 
aid, to develop a power program, to establish new 
industries, and to improve agriculture, has hardly 
begun. This results partly from the tragic guer- 
rilla war. But it should also be frankly recog- 
nized that an important reason for the delay has 
been a less than satisfactory performance by the 
Greek Government in its conduct of economic af- 
fairs. Only 27 months remain in which the Greek 
Government may take advantage of the Ameri- 
can aid made available through the Marshall 
Plan. This short time permits no further delay. 

It seems to me self-evident that the Greek people 
are most anxious to improve their economic posi- 
tion but that this can be accomplished only by 
increasing the productive capacity of the country. 

I believe that this desire for economic better- 
ment was a paramount consideration of the Greek 
people when, on March 5, they chose a new parlia- 
ment in free elections that won the respect of the 
entire democratic world. Tlic American represen- 
tatives in Greece have scrupulously refrained from 
any attempt to influence either the outcome of the 
election or the formation of a new government 
based on this fresh mandate of the people. The 



American people, however, are entitled to expect, 
and do expect, that any Greek Government which 
hopes to continue to receive the aid which they 
have generously offered will utilize this assistance 
to tlie fullest degree. In my opinion, only a stable 
and efficient government supported by the people 
and by Parliament will be able to act with the 
courage and the firmness of long-term policy 
which are essential to the wise use of the aid of- 
fered by the American people. Irresponsible talk 
of adjourning Parliament or of new elections, be- 
fore the new Parliament had had an opportunity 
to rise to its responsibility, can only create a cli- 
mate of political and economic uncertainty which 
may do grave damage to the country's future. 

The undertaking of a program of large-scale 
investment, which must necessarily be compressed 
into a short period of time, will present many prob- 
lems which can be solved only by a gbvernment 
which has a consistent policy and which is pre- 
pared to act with great courage. Temporary 
sacrifices must be made for the sake of future bene- 
fits. Many of these sacrifices will be unpopular 
with local minorities, especially if the people are 
not convinced that the sacrifices are being equally 
shared. If funds are to be available for financing 
an ambitious program of new electric power 
plants, new industries to provide employment, 
and the irrigation and improvement of the land, 
then rigorous economy in other government ex- 
penditures will be essential. 

It will be necessary to continue the planned re- 
duction of the armed forces, to curtail subsidies, 
and to make many other saving.s. I am confident 
that, if the issues are properly presented to the 
people, they will readily choose new opportunities 
for employment in preference to special privileges 
which canonly result in continuing budget deficits. 
Nevertheless, these will not be easy decisions, and 
only a government which can secure and maintain 
public confidence by its boldness and by its devo- 
tion to tlie ])ublic interest can be expected to exe- 
cute the reconstruction stage of Greek recovery. 
We earnestly hope the Greek Government wiU meet 
this challenge. 



600 



Department of State BuUetin 



The chief of the ECA mission to Greece and I are 
in complete accord that, pursuant to the obliga- 
tions imposed upon us by the Congress of the 
United States, we cannot conscientiously approve 
the conunitment of American funds for contem- 
plated new i)rojects until tlie Greek Goveriunent 
lias made basic and binding decisions which will 
assure the success of the purposes for which the 
funds are intended. Foremost among these proj- 
ects are those which contemplate the construction 
of four new electric power plants wluch would 
more than double the present generation of elec- 
tricity in Greece and which would bring cheap 
electric power to many areas of Greece foi- the 
first time. The desirability of these new plants 
is beyond question. They are the keystone to the 
further industrial and agricultural development of 
Greece. 

When Mr. Porter was recently in Washington, 
he received the apjiroval of EOA headquarters for 
tlie allotment of American aid necessary to their 
construction, subject to the judgment of the Amer- 
ican mission here as to the financial capacity of the 
Greek Government to embark on a program of this 
magnitude. The hard truth, however, is that, 
while the dollars and other foreign exchange 
neecled for the electric power program are avail- 
able, the Greek Government, at the present time, 
does not have the drachmae to pay the local costs 
of construction. The drachmae which should be 
available for this purpose are presently required 
to meet the deficit in the government budget which 
results from excessive spending. 

Whether or not all or some of the contemplated 
power plants can be begun in time to take advan- 
tage of American aid is a matter that depends 
solely upon decisions to be made by the Greek 
Government and the Greek Parliament within the 
next few weeks. The decisions which need to be 
made are of two kinds. The first are those which 
relate to the adoption of an adequate financial plan 
which the government will follow. The second 
are those which should result in a wide and far- 
reaching improvement in government efficiency. 

An adequate financial plan should include meas- 
ures which will sharply curtail government spend- 
ing on current account, including the armed forces, 
in order to provide funds for capital investment. 
The financial plan should establish a ceiling on the 
debt which the Government may incur by borrow- 
ing from the Bank of Greece or by other means. 
No change in this debt ceiling should be possible 
without express authority of Parliament. Sub- 
sidies should be curtailed. Government enter- 
prises, such as the state-owned railways which 
are a drain on the budget, and the Agricultural 
Bank, which incurs a deficit in spite of excessive 
charges to farmers for fertilizer and for loans, 



should be put on a self-supi)orting basis, while, at 
the same time, reducing costs to the users of their 
services. 

The tax system should be simplified and ration- 
alized, and ta.xes due should be fully collected, to 
the end that government revenues will be in- 
creased, the investment of private capital will l)e 
encouraged, and social justice will result from 
each citizen i)aying his fair share of taxes. A 
major improvement in government efliciency is 
essential to a proper administration of the aid 
which is offered. The improvement should include 
the establishment of a Cabinet with a niininnun 
of government Ministries, a greater decentraliza- 
tion of responsibility to nionarchs, and the enact- 
ment of a civil service code to replace the one 
recently declared invalid because it had not re- 
ceived parliamentai-y approval. 

In order to foster self-help and local initiative, 
it is advisable that elections of local officials, which 
have not taken place for 14 j'ears, should be con- 
sidered for the very near future. To administer 
whatever electric power program that maj' be un- 
dertaken, a special agency should be established, 
independent of politics, and with a tenure for its 
officials long enough to cover the period of con- 
struction and initial operation. 

The foregoing measures, which we regard as 
essential to the successful fulfillment of a major 
capital investment program, should, it seems to 
me, be proposed by the Greek Government to the 
Parliament at the earliest possible date. The Par- 
liament, of course, may modify, enact, or reject all 
measures proposed to it, in accordance with what 
the deputies believe to be the will of the people. 
But we in the American missions regard parlia- 
mentary approval of major recovery measures to 
be essential not oiUy as a validation of the demo- 
cratic process of government but as an assurance 
that the hard tasks of reconstruction have the 
willing support of the sovereign Greek people. 

It is in the hands of the Greek Government and 
the Greek Parliament to decide whether or not 
they wish to continue to receive American aid and, 
hence, to accept the responsibilities which will 
attain its purpose. It is the obligation and inten- 
tion of the American Govermnent with regard to 
all Marshall aid countries to decide whether or 
not the performance of the recipient government, 
whether Greek or any other, justifies a continuance 
of the aid on the scale heretofore contemplated. 

I trust that this clear statement of the American 
concern in the Greek recovery will receive the 
earnest consideration of the Greek people and their 
representatives and that decisions to proceed 
boldly with an ambitious reconstruction effort will 
be taken quickly by the new Parliament. 
Accept [etc.] 



April 17, 1950 

881-103—50— 



601 



U.S. Concerned Over Korea's 
Mounting Inflation 

[Released to the press April 7] 

The foUowinff is the text of an aide-memoire 
handed to the Korean Ambassador on April 3 hy 
the Assistant Secretary-designate for Far Eastern 
Affairs. This text has already been made pvhlic 
iy the Korean Government in Seoul: 

Tlie Secretary of State wishes to take this op- 
portunity to express to His Excellency the Am- 
bassador of the Republic of Korea, prior to the 
latter's return to Seoul, the deep concern of this 
Government over the mounting inflation in Korea. 
The Secretary of State wishes His Excellency to 
convey to the President of the Republic of Korea 
the view of this Government that the communica- 
tion of March 4, 1950, from the Korean Prime 
Minister to the Chief of the Economic Cooper- 
ation Mission in Korea,^ in which the view was 
expressed that there is no serious problem of in- 
flation in Korea, but rather a threat of deflation, in- 
dicates a lack of comprehension on the part of the 
Korean Government of the seriousness of the prob- 
lem and an unwillingness to take the drastic meas- 
ures required to curb the growing inflation. 

It is the judgment of this Government that the 
financial situation in Korea has already reached 
critical proportions and that, unless this progres- 
sive inflation is curbed in the none too distant fu- 
ture, it cannot but seriously impair Korea's ability 
to utilize effectively the economic assistance pro- 
vided by the Economic Cooperation Administra- 
tion. Government expenditures have been vastly 
expanded by bank overdrafts without reference to 
limits set by an approved budget. Tax collec- 
tions have not been increased, aid goods have been 
underpriced, and governmental subsidies have been 
expanded. The dangerous practice of voluntary 
contributions has been used as an inefficient substi- 
tute for a sound taxation system. These uneco- 
nomic practices have, in turn, served to expand the 
currency in circulation, unbalance the Korean na- 
tional budget, and cause a sharfj rise in wholesale 
and retail prices, thereby strengthening the grow- 
ing forces of inflation. 

Tlie Secretary of State must inform His Excel- 
lency that, unless the Korean Government is able 
to take satisfactory and effective measures to 
counter these inflationary forces, it will be neces- 
sary to reexamine, and perhaps to make adjust- 
ments in, the Economic Cooperation Administra- 
tion's assistance program in Korea. 

The Secretary of State wishes to inform His Ex- 
cellency in this connection that the American Am- 
bassador in Seoul is being recalled for consultation 

' Not here printed. 



within the next few days regarding the critical 

{)roblems arising out of the growing inflation in 
iorea. 

Of equal concern to this Government, are the 
reported intentions of the Korean Government, as 
proposed by the President of the Republic of Korea 
in a message to the National Assembly on March 31, 
to postpone the general elections from the coming 
May until sometime in November. The Secretary 
of State wishes to draw to His Excellency's atten- 
tion the fact that United States aid, both military 
and economic, to the Republic of Korea has been 
predicated upon the existence and growth of dem- 
ocratic institutions within the Republic. Free, 
popular elections, in accordance with the consti- 
tution and other basic laws of the Republic, are the 
foundation of those democratic institutions. The 
holding of the elections as scheduled and provided 
for by the basic laws of the Republic appears to this 
Government as equally urgent with the taking of 
necessary measures for the countering of the infla- 
tionary forces already discussed. 

President of Chile To Visit 
in the United States 

On March 17, 1950, the Department of State 
announced the prom-am for the visit of Gabriel 
Gonzalez Videla, President of the Republic of 
Chile, who will arrive in Washington on April 12. 
The President will be accompanied by Seiiora de 
Gonzalez Videla. 

Animal Husbandry Specialist 
To Visit Colombia 

Daniel H. Chavez of Albuquerque, New Mexico, 
has been awarded a grant by the Department of 
State to serve as a visiting professor of animal 
husbandry at the School of Agriculture, Medellin, 
Colombia, for a year, beginnig in February 1950. 

K. G. Wakim, Physiologist 
To Visit in Syria 

Dr. K. G. Wakim, professor of physiology at the 
Mayo Foundation and ]Medical Research Consul- 
tant at the Mayo Clinic, Rochester, Minnesota, has 
been awarded a grant by the Department of State 
in cooperation with the Mayo Foundation and 
Clinic to serve as a visiting professor at the Na- 
tional University of Syria at Damascus. This is 
the first grant awarded to a visiting professor for 
an assignment in the Eastern Hemisphere under 
the exchange-of-persons program authorized by 
the Smith-Mundt Act. Dr. Wakim left New 
York on March 21 for Damascus where he will 
remain for approximately 3 months. 



602 



Department of State Bulletin 



Foreign Assistance Act of 1950: 
A Major Blow for Peace 

Letter From the Prenidenf to John Kee, Chairman 
of House Committee on Foreign Affairs 

March 25, 1950 

My dear Mr. Chairman : I understand that the 
House of Kepresentatives will soon consider the 
Foreign Assistance Act of 1950. I believe the 
Congress of tiie United States has an opportunity 
to strike a major blow for peace on behalf of people 
ever J' where by taking rapid and favorable action 
on this legislation. 

Approval of this measure will give renewed 
hope and vigor to people everywhere who are 
working to achieve their economic independence 
and maintain their political freedom. Passage of 
this act will strengthen all nations threatened with 
intimidation, subvei'sion, or direct aggression. 

It is in the interest of each American that there 
be a far greater measure of well-being in other 
lands. Other countries must be able to produce 
and procure from us and each other those things 
which will enable their people to have the food, 
health, and housing necessary to maintain eco- 
nomic and political stability. 

Poverty, misery, and insecurity are the condi- 
tions on which communism thrives. Freedom- 
loving peoples can eliminate these conditions only 
by joining their knowledge and resources in a 
gi-eat cooperative effort. 

The Foreign Assistance Act will authorize con- 
tinued economic aid to the Marshall Plan countries 
in Europe and to the Republic of Korea to enable 
them, through their own efforts, to establish self- 
supporting economies. It will authorize aid 
where needed to those free countries in the general 
area of China whose survival is threatened by the 
imminent danger of Communist infiltration. 
This act will provide authority for a major effort 
to assist the peoples of Southeast Asia. 

It will provide for participation in the United 
Nations effort to solve the serious problem of the 
Palestine refugees. Satisfactory solution of this 
problem is fundamental to permanent peace in the 
Near East. 

The act will authorize the carrying forward of 
the vital program of technical and other assistance 
to underdeveloped countries which was the fourth 
point in my inaugural address. This will provide 
the peoples in underdeveloped areas of Asia, the 
Middle East, and other parts of the world the hope 
and the tools they need to achieve and maintain 
real freedom for themselves. 

The program called for by this act is the mini- 
mum consistent with the interest of the United 
States and our efforts to achieve a peaceful world. 
Failure to enact it in its full amount would do 
irreparable damage. We cannot live isolated in 
relative wealth and abundance. We cannot ignore 



the urgoni jiroblems of other peoples or threats to 
their independence. 

These measures are not acts of charity. Neither 
are they a waste of the resources of the United 
States. Tliey are, iiuleed, the keystone of our pro- 
tection against the destruction of another war and 
against the terrible weapons of this atomic age. 
Our armed forces can afford us a measure of de- 
fense, but real security for our Nation and all the 
rest of mankind can come only from building the 
kind of world where men can live together in 
peace. 

The United States turned its back upon the rest 
of the woild after the first world war. Some 
twenty years later, we found that we had to fight 
another world war. We cannot afford to follow 
that course again. We will save nothing if we 
ignore the needs of other nations now only to find 
that the result is World War III. 

Passage of this act will enable us in company 
with other nations to move ;i long step forward in 
our offensive for freedom and for peace. It will 
bring appreciably nearer the goal all freedom- 
loving peoples seek — a peace whei'e all nations live 
in equality and mutual respect. It will be tangible 
evidence of our determination to achieve this kind 
of peace — evidence which will be understood by 
every nation in the world. 
Sincerely yours, 

Harry S. Truman 



Japanese Foreign Office 
Officials To Study U.S. Methods 

[Released to the press March 22] 

A group of six Japanese Foreign Office officials 
have recently arrived in the United States as the 
recipients of a grant-in-aid from the Department 
of State in cooperation with the Department of 
the Army for a stay of 2i/4 months to study the 
organization of the Department of State, imple- 
mentation of the Foreign Service Act of 1947, 
formulation of American international trade poli- 
cies, management of international cultural rela- 
tions, consular affairs, relations between the De- 
partment of State and other governmental agen- 
cies and legislative branches, and activities of the 
United Nations. 

The group is composed of: Masato Fujisaki, 
Michitoshi Takahashi, Torao Ushiroku, Shigezo 
Yoshikawa, Shizuo Saito, and Bunishichi Hoshi. 
All are foreign office officials in Tokyo. 

Messrs. Fujisaki, Takahashi, Ushiroku, Yoshi- 
kawa, Saito, and Hoshi will visit various cities 
while in the United States to observe the operation 
of governmental and cultural organizations and 
confer with leaders in these fields. 



April 17, 1950 



603 



INTERNATIONAL ORGANIZATIONS AND CONFERENCES 



FULL EMPLOYMENT ACTION 



National and International Measures 



Summary hy Ruth S. Donahue 



Pursuant to a resolution passed by the Economic 
and Social Council in August 1949 when a discus- 
sion of full employment revealed great concern at 
the down trend that had taken place during the 
latter part of 1948 and early 1949, the Secretary- 
General of the United Nations named a group of 
experts to prepare for subsequent consideration of 
the Council a report on national and international 
measures required to achieve full employment. 
This group was composed of John Maurice Clark, 
professor of economics at Columbia University, 
New York, who worked in association with Arthur 
Smithies, professor of economics at Harvard Uni- 
versity; Nicholas Kaldor, fellow of King's Col- 
lege, Cambridge Univereity, England; Pierre Uri, 
economic and financial adviser to the Commissariat 
general du Plan, Paris; and E. Ronald Walker, 
economic adviser to the Australian Department of 
Economic Affairs. Mr. Walker served as chair- 
man. In preparing the report, the experts acted 
in their personal capacities and their recommenda- 
tions, which were unanimous, are put forward on 
their own responsibilities. 

In accordance with the Ecosoc resolution, 
copies of the report were transmitted to all mem- 
ber governments. In January 1950, the Economic 
and Employment Commission, as requested by the 
Council, examined the report and transmitted to 
the Council its comments and recommendations for 



action. Although many members of the Economic 
and Employment Commission registered agree- 
ment with the general objectives and with numer- 
ous recommendations therein, questions were 
raised concerning some of the proposals. 

The Economic and Social Council voted on Feb- 
ruary 21, 1950, to refer the report to member gov- 
ernments for study and to invite the members of 
Ecosoc to express their views on the experts' 
proposals, or to submit any alternative proposals 
they may have for solving unemployment prob- 
lems, to the next Ecosoc meeting at Geneva in 
July-August 1950. Meanwhile, the Secretary- 
General of the United Nations, at the request of 
the Council, is continuing to collect reports from 
governments on measures taken to achieve full em- 
ployment. The release of regular analytical sum- 
maries of these reports will begin in July-August 
1950. 

Without attempting to make any forecasts as to 
the world economic situation, the experts outline 
the necessary steps which should be taken — do- 
mestically and internationally — so that policies for 
maintenance of full employment may be imple- 
mented as the occasion arises. The measures 
recommended, the experts assert, are consistent 
with the institutions in free enterprise economies 
although a good deal of government action is in- 
volved. The plans proposed leave to each govern- 



604 



Departmenf of State Bulletin 



niont the definition of the level of employment 
wliich it proposes to maintain. 

Recommendations are based on the premise tliat 
memhei- jjovornmcnts are obli<j;aled to take action 
under the full employment pledge in the United 
Nations Charter in which ''all members pledge 
themselves to take joint and separate action in 
cooperation with the Organization for the achieve- 
ment of (a) higher standards of living, full em- 
ployment and conditions of economic and social 
progress and development . . ." 

General Aspects of the Report 

The experts confined themselves primarily to a 
consideration of unemployment that has resulted 
from a deficiency of effective demand, which they 
regard as the major cause of unemployment in 
industrialized countries. Unemployment that has 
resulted from the lack of capital equipment or 
from structural features of the economy are noted 
only in passing. The experts regard the instabil- 
ity of private investment, including investment in 
plant and equipment, business inventories, and 
residential construction, as the primary factor re- 
sponsible for cj'clical fluctuations. The report is 
based on the assumption that the methods to be 
used for economic stabilization will differ in vari- 
ous countries because suitable policies will depend 
upon the degree of planning and control that is 
to be adopted. It envisages no satisfactory solu- 
tion of the world full-employment problem and 
no real improvement in the world-trading system 
unless the chronic dollar shortage is attacked at its 
roots and on a world-wide basis. It also states 
that much depends on the policies of the United 
States — particularly its policies with respect to 
maintaining full employment and its tariff or other 
trade restricting policies. It observes that even 
the moderate decline in the United States between 
the fourth quarter of 1948 and the second quarter 
of 1949 affected the economies of other countries. 
Thus, there is need for national and international 
action to permit the flow of trade and payments 
to continue in the face of fluctuations in the effec- 
tive demand in particular countries. 

The experts believe that policies of economic 
development and policies of full employment are 
essential complements of each other and that the 
pursuit of full employment policies by industrial- 
ized countries would in itself be of gi-eat benefit 
to the underdeveloped countries. One of the great- 
est needs of the underdeveloped countries is for 



capital and techniques which they require to pro- 
vide more pro(hictive employment for their pop- 
ulations. However, since Ecosoc had made a 
separate provision for extensive studies of the 
problem of economic development, the expeits' 
report did not attempt to deal extensively with 
economic development as such, but this problem, 
and its relation to full employment, was kept con- 
tinuously in mind in framing the recommenda- 
tions. 

The first requirement for a successful full em- 
ployment policy, the experts point out, is for gov- 
ernments to establish a full employment target 
that will provide a guidepost for their policy. 
This target should be expressed in terms of per- 
centages of wage earners out of work and seeking 
work; with proper allowance for the full-time 
equivalent of the hours of work lost by persons 
who are working on short time but who are willing 
and able to work full time. 

The wide differences in the economic organiza- 
tion of various countries, the experts point out, 
make it impossible to lay down a uniform domestic 
full employment policy that all countries should 
follow. But there should be one common feature 
of all stabilization policies, and that is that meas- 
ures to offset economic fluctuations should be pre- 
pared in advance and should come into effect 
without delay as soon as the actual course of events 
shows that action is needed. Full-employment 
policies involving increases in aggregate demand 
increase the general responsibility of governments 
for maintaining the stability of the price level. 
Therefore, the experts believe that governments 
can and should take steps to avoid inflation at the 
same time as they can and should take steps to 
avoid unemployment. 

The Problem of Effective Demand 

The report explains the importance of effective 
demand. The problem is not merely that of an 
insufficiency of effective demand but its inherent 
instability, which gives rise to fluctuations of a 
cyclical character in income and employment. The 
largest factor causing cyclical fluctuations is the 
instability of the level of private investment, in- 
cluding investment in plant and equipment, busi- 
ness inventories, and residential construction, but 
variations in consumer spending and in govern- 
ment spending also contribute. 

The problem of maintaining effective demand 
has two main aspects : how to secure stability and 



April 17, 1950 



605 



how to secure an adequate level of spending. The 
problem of stability, in principle, could be ap- 
proached in two different ways: (1) by stabilizing 
the level of demand directly in those sectors of 
the economy which are primarily responsible for 
the fluctuations; and (2) by neutralizing the effect 
of such fluctuations through compensating varia- 
tions in the rate of expenditure on other goods 
and services. 

In private enterprise economies, stability in the 
level of private investment could be promoted only 
by methods of indirect control such as through 
variation of interest rates and other conditions of 
credit. Timing of jjrivate investment can also 
be influenced through special tax incentives. The 
second method of stabilizing the rate of investment 
consists in offsetting fluctuations in private invest- 
ment by countervailing fluctuations in public in- 
vestment. Economies that make widespread use 
of central planning and control are obviously bet- 
ter prepared to employ the second method tlian 
private enterprise economies relying much less on 
direct government action. However, with prop- 
erly thought-out methods and sufficient prepara- 
tion, the experts believe that private enterprise 
economies can accomplish far more in this direc- 
tion than was thought feasible in the past and 
without impairing the essentials of the price- 
directed economies. Variations in the rates of 
taxation appear to offer for many countries a most 
effective and prompt method for maintaining the 
level of effective demand in the economy. 

Any country which suffers a fall in its effective 
demand will tend to create a favorable balance in 
its foreign transactions since, normally, its exports 
will not fall so sharply as its imports. Conversely, 
if a country takes steps to increase effective de- 
mand in its own territory, it will tend to face an 
unfavorable balance in its foreign transactions. 
Therefore, from the point of view of any single 
country, there may be a serious conflict of interest 
between the requirements of domestic prosperity 
and stability and the requirements of maintaining 
an international balance. Countries which allow 
the level of their effective demand and the level of 
their employment to fall, or which pursue restric- 
tionist monetary and financial policies, exert a 
depressive influence on the level of activity in the 
rest of the world; but, at the same time, they tend 
to accumulate claims against the rest of the world 
and, thus, augment their own financial strength. 
Conversely, countries which pursue expansionist 



policies and raise the level of employment in their 
own territory exert a stimulating influence on the 
level of activity in the rest of the world but are 
likely to face deficits m their international bal- 
ance of payments and, thus, to weaken their exter- 
nal financial position. 

The possibility of maintaining a relatively free 
system of international trade may be compromised 
not only by the failure of some countries to pursue 
full employment policies but also by the jfailure 
of others to avoid inflationary tendencies. It is 
tlie nature of these international repercussions 
wliich makes the question of domestic economic 
policies a matter of international concern. The 
influence which the level of effective demand in 
one particular country exerts upon the prosperity 
of others depends essentially upon two factors: 
Its share in world trade and the extent to which 
its purchases of goods and services from other 
countries are likely to vary as a result of changes 
in its domestic situation. 

Although the return to currency convertibility, 
with the resultiint multilateralism, is the declared 
aim of a great majority of nations, the experts say 
it is important to realize that successful attainment 
of that objective must be preceded by full employ- 
ment. The report argues, therefore, that the es- 
sential prerequisites for a sound international 
system are the successful pursuit of domestic full 
employment policies and the adoption of special 
measures for stabilizing the international flow of 
payments. 

The objective of full employment policy, in its 
international aspects, is to create conditions under 
which any particular country will behave in its 
international economic relations so as not to pre- 
vent other countries from maintaining the stabil- 
ity and prosperity of their economies. Attainment 
of this objective requires both the achievement of 
full employment and the maintenance of equilib- 
rium in the balances of payments of individual 
countries. 

The experts believe that the establishment of 
the kind of over-all international economic equi- 
librium and stability which would enable countries 
successfully to maintain their economies at a stable 
and prosperous level depend upon three major 
requirements: (1) The first requirement is that 
some method be devised for ascertaining the gen- 
eral policies of the countries with respect to the 
ways in which they intend to reestablish balance 
in their international transactions so that all coun- 



606 



Department of State Bulletin 



tries may be eiuibled to envisage the kind of eco- 
nomic adjustments which tliey will need to make 
in order to bring tiiemselves into line with the 
future pattern and structure of world trade. (2) 
The second requirement is that lending countries 
should stabilize the flow of their international 
investment over considerable periods and that ap- 
propriate international measures be taken for facil- 
itating this process. (3) The third major require- 
ment is that some procedure be introduced whereby 
the international propagation of cyclical fluctua- 
tions and a consequent cumulative contraction in 
world trade may be most effectively prevented. 

Domestic Measures Recommended 

The report recommends that each member gov- 
ernment sliould take early action along the follow- 
ing lines: 

1. A full employment target should be adopted 
and announced which will be the standard to which 
national employment stabilization measures will 
be directed. In industrialized countries, targets 
should be defined in terms of unemployment rather 
than employment, and should be expressed in terms 
of the smallest percentage of unemployment of 
wage earnei-s which the country in question can 
reasonably hope to maintain in the light of sea- 
sonal movements and in the liglit of structural 
changes in the economy, which inevitably give rise 
to some temporary unemployment that cannot be 
eliminated through public policy. According to 
the circumstances of each country, this target may 
be defined as a range rather than an exact figure 
(e.g. from 2 to 4 percent or from 3 to 5 percent of 
the vi'age earners). The term "unemployment" 
should include all workers without work and seek- 
ing work as wage earnei'S and should include an 
allowance for the full-time equivalent of time lost 
by all wage earners working part time but willing 
and able to work full time. In countries where 
industrial development is not far advanced and 
where workers who lose their jobs in industry are 
absorbed in agricultural pursuits, it may be desir- 
able to define the target in terms of the volume of 
industrial employment rather than in terms of 
percentage of unemployment. In that case, the 
target figure could be raised year by year in accord- 
ance with industrial growth. 

2. A comprehensive program should be an- 
nounced with regai'd to fiscal and monetary poli- 
cies, investment and production planning, and 
wage and price policies. This program should 



include adaptation of the fiscal policy of the state 
to tlic needs of full employment; measures to con- 
trol the rate of private investment; planning of 
public investment ; measures to stimulate consump- 
tion, such as changing the incidence of taxation 
and lowering its level; expanding programs of 
social security and transfer payments; raising 
standards of social expenditures, such as educa- 
tion and health; price control; and measures for 
maintaining incomes in agriculture. 

3. An appropriate system of mandatory com- 
pensatory measures should be adopted and an- 
nounced. These would be applied to expand 
effective demand and would be automatically ap- 
plied should the stabilization program fail to 
prevent unemployment from exceeding the target 
limit by a predetermined amount for 3 successive 
months. It is essential, the experts believe, that 
methods be devised whereby countermeasures come 
into effect at an early stage on an automatic basis. 
The automatic compensatory measures should 
embody the following necessary features: first, 
they should be capable of raising effective demand 
promptly throughout the economy; second, they 
should be of a quantitative nature so that their 
effect on demand and employment could be esti- 
mated with a fair degree of reliability ; third, their 
quantitative magnitude should be sufficient to re- 
duce the level of unemployment (taking into ac- 
count both primary and secondary effects) to the 
mean percentage of the full-employment range. 
The detailed design of automatic compensatory 
measures should be undertaken by each countiy 
in the light of its own economic structure and the 
possibilities afforded by its fiscal and administra- 
tive systems. 

In industrially advanced countries, the most 
appropriate method would be to make advance 
legislative provisions for alternative tax sc'hed- 
ules, the lower of which could come into operation 
in circumstances defined in the legislation. The 
most suitable tax for this purpose in those coun- 
tries is the i>ersonal income tax on earned incomes, 
and the legislative provision should be either for 
alternative rates of such taxation or for alterna- 
tive levels exemptions. Similarly, social security 
contributions could be varied and advance legis- 
lative authorization could be given for their com- 
plete suspension in prescribed circumstances. Or 
legislation might be enacted under which the or- 
dinary social security contribution is automat- 
ically reversed and replaced by period payments 



April 17, 1950 



607 



to both employers and employees on a predeter- 
mined basis. In countries where neither the per- 
sonal income tax nor the social security system are 
widely developed, an analogous system could be 
introduced in the form of predetermined varia- 
tions in the general sales or purchase taxes. Com- 
pulsoi'y savings arising out of war or compensa- 
tions for war damage could be legislatively so 
adapted that their release is made dependent on 
similar predefined circumstances. Some coun- 
tries may find it possible to incorporate a counter- 
cyclical public works program into an automatic 
compensatory scheme although it might be difficult 
to vary the program rapidly enough for this pur- 
pose. At any rate, a i^ublic-worlvs program should 
be a highly important part of a general and con- 
tinuing stabilization program. 

4. The nature of policies that will be adopted to 
maintain price stability and combat inflationary 
tendencies should be announced. If price stabili- 
zation policies are to be effective and the general 
full-employment objective preserved, it is essential 
that the government be ready to employ a wide 
variety of measures for dealing with price infla- 
tion. According to their political and economic 
institutions, some countries may wish to rely more 
on indirect types of control, while others would 
make a more widespread use of direct controls. 
In both cases, the measures need to be adapted to 
the particular cause of the rise in prices, and it 
would not, therefore, be possible to legislate in 
advance for any general measure that should auto- 
matically come into operation in the case of infla- 
tion. It is essential, however, that the government 
should take such action, appropriate to each par- 
ticular situation, for the preservation of price sta- 
bility, as will check inflationary tendencies without 
allowing an increase in unemployment above the 
limit of the full employment target. 

5. Legislative procedures, administrative organ- 
ization, and statistical services should be adapted 
to the implementation of the full-employment pro- 
gram. Implementation of a full-employment pol- 
icy along the lines of these recommendations would 
not require any alteration in the political system 
and institutions of any country, but each govern- 
ment should review its organization and proced- 
ures with a view to adapting them to facilitate the 
preparation and execution of the measures. Some 
countries would have to adopt enabling legisla- 
tion. All countries should review their adminis- 
trative organization to insure a coordination of 



programs with responsibility clearly concentrated 
in the appropriate executive organ of the govern- 
ment. Governments must have at their disposal 
analyses of the trends of the economic situation, 
and there is a great need for improvement in the 
collection and analysis of the statistical material 
necessary for the guidance of full-employment 
policies. 

International Measures Recommended 

Kecommendations in the international field serve 
three main purposes : creation of a workable sys- 
tem of international trade for a stable and expand- 
ing world economy, thereby jiroviding conditions 
required for elimination of undue trade barriers 
and for restoration of convertibility of currencies ; 
acceleration of orderly economic development of 
underdeveloped areas ; and prevention of interna- 
tional propagation of fluctuations in effective de- 
mand. It is reconamended that early action be 
taken as follows : 

1. A program should be established, through the 
auspices of the Economic and Social Council, to 
eliminate present structural disequilibrium in 
world trade. The experts recommended that 
Ecosoc convene a meeting of interested govern- 
ments to develop a joint program in this regard 
and to consult together on the adjustments in do- 
mestic and external policies that are required. 
Participating countries should set targets for the 
main items for their balances of payments, indicat- 
ing how they hope to restore their over-all finan- 
cial equilibrium within the period. The countries 
should meet at frequent intervals to adjust their 
targets and, as appropriate, make specific agree- 
ments on major factors of common concern. Coun- 
tries having deficits in their balances of payments 
should undertake, as their main obligation, reduc- 
tion of internal inflationary pressures which com- 
promise their ability to export and aggravate their 
need to import, to adjust their exchange rates when 
expansion of expoi'ts is hampered by overvaluation 
of their currencies, and to adjust their produc- 
tion structure as the external market situation re- 
quires. Countries having "surpluses" in their bal- 
ances of payments should undertake as their main 
obligations that a decrease in their exports or a 
rise in their imports not give rise to internal dis- 
locations which, in turn, generate reduced imports 
with larger export surpluses; to reduce or remove 
restrictions on imports and to refrain from unduly 
encouraging exports. It is further recommended 



608 



Department of State Bulletin 



that Ecosoc establish an expert advisory commis- 
sion to do the detailed work in fornuilatiiig tarjicts 
and suggesting teclmical needs for coordinating 
national policies, to call the attention of the gov- 
ernments to the problems arising, and to report to 
the Council on progress made. 

2. A stable flow of international investment 
shoidd be created at a level appropriate to the 
needs of the underdeveloped areas of the world 
and to the capacity of the lending countries. It is 
recommended that the articles of agreement of the 
International Bank for Reconstruction and Devel- 
opment be amended to permit the Bank to lend to 
underdeveloped countries for the general purpose 
of over-all development programs, as a normal 
procedure. Lending countries should fix annual 
targets for long-term international improvement 
for 5-year periods covering both private and pub- 
lic net investment and should report to the Inter- 
national Bank each G months any deficiency in 
their actual international lending as compared to 
the target. The Bank should be enabled to use 
the funds thus borrowed from governments for the 
purpose of lending to other governments. This 
operation would be conducted by a new and sep- 
arate department of the Bank which would have no 
recourse to the Bank's capital or its other resources 
arising from the performance of its present func- 
tions. 

3. International trade should be stabilized by 



maintaining external disbursements on current 
account in tlie face of internal ilucl nations of eflfec- 
t ive demand. This would be accomplished, in part, 
by the preceding reconunendation on investment. 
The experts further propose, in tiiis regard, that 
any country whose imports diminish because of a 
failure to maintain full employment should be 
required to deposit with the International Mone- 
tary Fund an amount of its currency approxi- 
mately equal to the decrease in imports resulting 
from its recession minus the decrease in its ex- 
ports. These changes would normally be measured 
from the preceding year. These funds would be 
available to otlier countries to replenish their mon- 
etary reserves so that they could continue the vol- 
ume of their imports at approximately the former 
level, notwithstanding the decline of their exports 
to the country suffering a recession. They would 
be enabled to do this by purchasing the currency 
which the country suffering the recession has de- 
posited with the Fund with their own currencies. 
Although this would not maintain the current ex- 
port of the recession counti-y's suppliers, it would 
maintain their international liquidity. Thus, coun- 
tries failing to maintain full employment and suf- 
fering a recession would be cushioning other coun- 
tries against the effects upon them of this failure ; 
also, the country suffering the recession would be 
benefited since the demand for its own exports 
would be maintained at least in part. 




Recent Releases 

For sale bti the Superintendent of Documents, Oovernment 
Printing Office, Washington 25, D. C. Address requests 
direct to the Superintendent of Documents, except in the 
case of free publications, ichich may 6e obtained from the 
Department of State. 

Universal Declaration of Human Rights. International 
Orguaizntioii and Conference Series III, 20. Pub. 3381. 
6 pp. 5^. 

Revised text of statement of principles approved as 
a common standard of achievement for all peoples 
and all nations — by the General .\ssembly at its ple- 
nary meeting on December 10, 1948. 

Postwar Foreign Policy Preparation, 1939-1945. General 
Foreign Policy Series 1.5. Pub. 3580. 726 pp. §2.25. 

A record of the structure and conduct of the extra- 
ordinary preparation of our postwar foreign policy 
as made in the Department of State during World 
War II. 



Education: Cooperative Program in Paraguay. Treaties 
and Other Interuational Acts Series 1".)91. Pub. 3711. 3 
pp. 5(f. 

Agreement between the United States and Paraguay 
amending and extending agreement of March 8, 1V)4!) — 
Effected by exchange of notes signed at Asuncion 
July 26 and August 30, 1949; entered into force 
September 1, 1949, operative retroactively July 1, 
1949. 

Weather Stations: Cooperative Program in Mexico. 

Treaties and Other International Acts Series 1989. Pub. 

3717. 13 pp. 50. 

Agreement between the United States and Mexico 
amending and extending agreement of October 13 and 
30 and November 10, 1942 — Effected by exchanges of 
notes signed at Mexico, D.F., May 12, June 16, 21 and 
28, 1945; entered into force July 1, 1945; and agree- 
ment effected by exchanges of notes — Signed at 
Mexico, D.F., October 13 and 20 and November 10, 
1942 ; entered into force November 10, 1942. 

Weather Stations: Cooperative Program in Mexico. 

Treaties and Other International Acts Series 1995. Pub. 

3718. 8 pp. 5t 

Agreement between the United States and Mexico 
superseding previous agreements — Effected by ex- 
change of notes, signed at Mexico, D.F., March 29 
and August 15, 1949 ; entered into force October 20, 
1949, operative retroactively from July 1, 1948. 



April 17, 1950 



609 



Second I titer- American Statistical Congress 



l>y Stuart A. Eice, Chairman, U.S. Delegation 



At the invitation of the Government of Colom- 
bia, the Second Inter- American Statistical Con- 
gress was convened by the Inter-American 
Statistical Institute (Iasi) at Bogota, January 
16-27, 1950. The Iasi Executive Committee and 
the Second General Assembly met during the 
same period. The third session of tlie Iasi Com- 
mittee on the 1950 Census of the Americas (Cota) 
was also held in Bogota, January 9-21. The 
general purposes of the Congress and related 
meetings were to give consideration to ways and 
means by wliich statistical methodology and skills, 
and the administrative facilities and procedures to 
implement tliem, may be more fully developed in 
the nations of tlie Western Hemispliere, in order to 
serve better both national and international needs 
for statistical information. 



Background 

Tlie Inter-American Statistical Institute was 
founded during the Eighth American Scientific 
Congress in Washington, in May 1940, by Western 
Hemisphere members of the International Statis- 
tical Institute. It is composed of individual titu- 
lar (or elected) and ex officio members and insti- 
tutional members (including governments). Its 
purposes and functions are : to stimulate improved 
methods of collection, tabulation, analysis, and 
publication of statistics; to provide a medium for 
professional statistical collaboration ; to encourage 
improvements in comparability of economic and 
social statistics; and to cooperate with national 
and international statistical organizations. Under 
an agreement with the Organization of American 
States (Oas), Iasi will become affiliated on July 
1, 1950, witli Oas as an Inter-American specialized 
organization, and its secretariat will become the 
Statistical Division of the Pan American Union. 

Tlie First Inter- American Statistical Congress 
was held in Washington in September 1947^ in 



conjunction with the World Statistical Congress 
convened by the United Nations, the 25th session 
of the International Statistical Institute, and 
meetings of other international organizations in 
related fields, which together composed the Inter- 
national Statistical Conferences. The first meet- 
ing of the Cota was also held then to lay the basis 
for agreement upon plans and specifications to be 
followed in national censuses exi:)ected to be luider- 
taken throughout the Western Hemisphere in 
1950. 

All except two (El Salvador and Honduras) of 
the 22 countries of the Western Hemisphere were 
represented at the Congress in Bogota by official 
delegates or other participants.- A dozen inter- 
national organizations, including the United Na- 
tions, the Organization of American States, 
International Labor Organization, Food and 
Agriculture Organization, United Nations Edu- 
cational, Scientific and Cultural Organization, and 
the International Monetary Fund, were also repre- 
sented. Altogether nearly 150 participants were 
registered at the Congress, of whom more than 
100 were from countries other than Colombia. 
Many of the delegates from Latin American coun- 
tries were persons who had received training in 
statistics in the United States under cooperative 
technical assistance projects. 

Organization 

The progi-am for the Congress was organized 
around four broad subjects, for each of which a 
working grouj) of delegates and participants was 
constituted. Their functions were to formulate 
specific i>roposals and draft resolutions for con- 
sideration in plenary sessions. The working 
groups in turn were subdivided and dealt with the 
following topics : 



' Bulletin of Dec. 7, 1947, p. 1084. 
610 



^ For the U.S. delegation see Bulletin of Jan. 23, 1950, 
]). 141. 

Department of State Bulletin 



I. Statistical organization and administration : 

(1) Iasi striu'tiiro and operation within the 
Orfranization of Anioricaii States; regional oi"- 
ojani/atioiis within tlio international statistical 
framework; ('2) National tecluiical participation 
in international statistical activities; (3) National 
focal points as tools of statistical administration. 

II. Statistical education and training: 

(1) Statistical teaching; (2) Statistical vocabu- 
lary; (3) Sampling and statistical methodology. 

III. Demographic and social statistics: 

(1) International migration statistics; (2) In- 
ternational ilevelojiments in vital and health 
statistics; (.'}) Educational and cultural statistics; 

(4) Occupational classification. 

IV. Economic and financial statistics: 

( 1 ) Kelating current national statistics to 1950 
census results; (2) Agricultural statistics; (3) 
Foreign trade statistics; (4) Intlustrial statistics; 

(5) Economic and financial statistics (including 
national income and social accounts). 

After adoption by the working groups, proposals 
were reviewed in a plenary session of the Congress 
and upon adoption in substance were referred for 
editing to the Resolutions Committee. This com- 
mittee was composed of the chairman and secre- 
tary of each of the four working groups, the chair- 
man and secretarj' of Cota, the Secretary General 
of Iasi (ex officio), and a repi'esentative of the 
Executive Committee of Iasi. A total of 30 draft 
resolutions thus formulated (not including resolu- 
tions of Cota) were considered and adopted by 
the Congress at a closing plenary session. It is 
possible to give here only a brief indication of the 
substance of these resolutions. The full texts will 
be published in a forthcoming issue of Estadistica, 
the quarterly journal of Iasi; full proceedings of 
the Congress will also be published by the Institute 
in a separate volume. 



Recommendations 

In the field of statistical organization and ad- 
ministration the Congress adopted recommenda- 
tions aiming at (1) improved coordination of na- 
tional statistical programs through centralization 
of responsibility and authority for planning, de- 
velopment of standards, allocation of specific sta- 
tistical activities, avoidance of gaps in availability 
of data, and prevention of overlapping and dupli- 
cation; (2) more effective cooperation between 
national governments and international organiza- 
tions in the development of international statis- 
tical standards and ])i'ograms; (3) defining more 
precisely the role of Iasi in relation to the respon- 
sibilities of United Nations and other interna- 
tional organizations; (4) establishment within 
Iasi of a new Connnittee on Improvement of Na- 



tional Statistics (Coins) ; and (5) the encourage- 
ment and further strengtiiening of national focal 
points which have been designated in a number of 
couiUries to facilitate international exchange of 
statistical materials and information. 

Specific measures for the improvement of sta- 
tistical education and training were recommended 
by the Congress in a sei-ies of resolutions dealing 
with (1) organization of statistical teaching; (2) 
preparation of mininunu standards for plans of 
study for different types of statistical courses; (3) 
promotion of efforts to make available needed 
statistical textbooks in different languages; (4) 
more effective collaboration between universities 
and public statistical services; (5) the problem of 
adequate pay and job security for statistical per- 
sonnel; ((5) the provision of fellowships and other 
forms of subsidies, exchange of teachers, and other 
measures to encourage the training of teachers of 
statistics; and (7) the preparation and publication 
for general use of a multilingual vocabulary of 
statistical terms. Increased support for existing 
geographic and cartographic services and meas- 
ures to promote more widespread utilization of 
scientific methods of statistical sampling were also 
recommended. 

In a group of resolutions dealing with various 
aspects of demographic and social statistics, the 
Congress formulated recommendations concern- 
ing (1) the application of 1950 census data to 
current national series of population estimates, 
vital statistics rates, life tables, and migration ; (2) 
improvement and development of vital and health 
statistics; (3) standanls and definitions for statis- 
tics of education and literacy and steps to improve 
such measures as well as other cultural statistics; 
(4) the development and improvement of occupa- 
tional classification systems for population cen- 
suses and other purposes and the maintenance of 
comparability between occupational classification 
systems used in various statistical fields; (5) pro- 
posals for standardizing definitions and methods 
of enumerating industrial or social status groups 
in population censuses; and (6) the development 
and improvement of labor statistics in countries of 
the Western Hemisphere. 

In the field of economic statistics, the Congress 
adopted a series of resolutions making specific rec- 
ommendations for the development and improve- 
ment of national statistics on a number of 
important subjects, including steps to integrate 
current statistical programs with the inr)0 census 
program. Recommendations on agricultural sta- 
tistics included a "minimum list of topics" which 
all countries of the Western Hemisphere were 
urged to adopt for their current agricultural series, 
as well as a more extensive list suggested to the 
countries for study. Minimum standards were 
also recommended for current series of industrial 
statistics. Recommendations concerning statistics 
of public finance, money and banking, balance of 
payments, national income, and agricultural credit 
were accompanied by ajipcndixes, "included for in- 



Apnl 17, 1950 



611 



formation and technical reference," presenting 
comments and suggestions as to topics which might 
be inchided, definitions, and other questions. A 
resolution on foreign trade statistics dealt with 
steps toward the application of international 
standards to foreign trade data, recommending 
adoption by countries of the Western Hemisphere 
of the proposed standard list of commodities for 
international trade statistics which is being de- 
veloped by the United Nations. 

The Congress accepted the invitation of the 
Chilean Government to hold the Third Inter- 
American Statistical Congress in Chile in 1953 
(subject to such conditions as may be inherent in 
the agreement of affiliation between the Inter- 
American Statistical Institute and the Organiza- 
tion of American States) . 

Executive Committee 

The Executive Committee prepared or approved 
a variety of recommendations upon Iasi affairs; 
reviewed the relations of Iasi to the Oas and other 
intergovernmental organizations; approved a 
program for the coordination and improvement, of 
statistics in the Western Hemisphere; appointed 
various committees ; reviewed the auditor's report 
and the budget of Iasi ; and handled a miscellany 
of other business. Of special interest was the 
development of a formula acceptable to the Do- 
minion of Canada which would permit that nation 
to retain its membership in Iasi when the latter 
assumes its new relations to the Organization of 
American States, of which Canada is not a 
member. 

The General Assembly received reports and 
recommendations of the Executive Committee, 
taking suitable action thereon: and elected officers 
of Iasi for terms to run until the next General 
Assembly. Roberto Vergara of Chile was elected 
President ; and Carmen Miro of Panama, Manuel 
Perez Guerrero of Venezuela, Luis E. Laso Itur- 
ralde of Ecuador, and Herbert Marshall of Canada 
were elected Vice Presidents. The Executive 
Committee was instructed to review the Iasi 
statutes with a view to the possibility of proposing 
amendments to permit longer periods of service 
upon the Executive Committee than the two con- 
secutive terms that are now authorized. 

Census of the Americas 

The primary objective of the Cota session was 
to determine uniform minimum standards of tabu- 
lation of data from the 1950 census program. 
Agreement was reached on a series of resolutions 
dealing with demographic and economic aspects 



of the population censuses and with economic 
aspects of the censuses of agriculture, housing, 
business, and industry. The recommendations 
covered the class intervals and cross classifications 
to be used in tabulations of data on all the topics in 
the minimum list of subjects previously approved. 
In addition, suggestions were made for optional 
tabulations for inclusion in the census programs 
of countries which are able to make them. 

Conclusions 

The results of the Congress and related meetings 
comprise a notable series of forward steps toward 
fuller agreement and understanding among the 
American nations upon statistical standards and 
the main lines of development to be followed in the 
further improvement of statistical services. 
Moreover, the meetings developed a spirit of team- 
work and understanding among the participants 
which may have even gi-eater and more lasting sig- 
nificance in fostering international cooperation. 
The meetings were regarded by the government, 
the public, and the press of Colombia as having 
transcendent importance for that country and the 
nations of the Western Hemisphere generally. 



Soviets and Satellites Protest 
Seating of Chinese Nationalists 
at High Frequency Conference 

[Released to the press April 41 

Members of the Soviet and satellite delegations 
today walked out of the Florence, Italy, High Fre- 
quency Broadcasting Conference of the Interna- 
tional Telecommunication Union in protest against 
seating of the Chinese Nationalist delegation. 

The Conference, which was called to discuss the 
planned usage of high frequency broadcasting 
channels, rejected a Soviet motion to unseat the 
Chinese delegates. Thereupon, the Soviet and 
satellite delegations refused to participate further 
in the proceedings. 

The Russians tried to unseat the Chinese delega- 
tion at yesterday's opening plenary session but 
were opposed by the United States on the grounds 
that the question was not within the province of 
the Conference. The Russians insisted, however, 
on a Conference decision. 

According to members of the United States dele- 
gation, the position of the United States is to im- 
l)lement the Atlantic City convention for i)lanned 
usage of the high frequency spectrum with or with- 
out participation by the Soviet Union. 



612 



Department of State Bulletin 



Contracting Parties to GATT End Fourth Session 



[Released to the press April 5] 



The fourtli session of the Contracting Parties to 
the General Agreement on Tariffs and Trade, 
which began at Geneva on February 23, 1950, ended 
yesterday with the eoncUision of a long agenda 
covering the routine operation of the agreement, 
plans for a third round of tariff negotiations be- 
ginning in September of this year, and a searching 
examination of the trade practices of participating 
governments and their effect on the general reduc- 
tion of barriers to international trade, which is the 
basic objective of the agreement. At the session of 
the Contracting Parties just ended, more govern- 
ments were represented, as Contractina: Parties or 
observers, tlian at any preceding session. Two 
governments, Indonesia and Greece, became Con- 
tracting Parties to the agreement during this ses- 
sion, bringing the total number of Contracting 
Parties to 26. Also attending the meeting were ob- 
servers from six other governments, which are in 
process of acceding as a result of the second round 
of tariff negotiations conducted last year at An- 
necy, France, and from three additional govern- 
ments which expect to participate in the third 
round of tariff negotiations and to accede if these 
negotiations are successful. Observers also at- 
tended from the International Monetary Fund and 
from the Organization for European Economic 
Cooperation. During the session, notice of with- 
drawal from the agreement was received from the 
Nationalist Government of China. 

Next Session 

The session just ended decided upon Torquay, 
England, as the site for the third round of tariff 
negotiations, to begin on September 28 of this year. 
These negotiations will proceed among the present 
Contracting Parties as well as with newly acceding 
governments. In setting the stage for the forth- 
coming third round of tariff negotiations, the 
Contracting Parties took pains to insure that the 
third round should not be used as a medimn for 
raising tariffs, even though the technical right 
exists for each Contracting Party to adjust indi- 
vidual rates after January 1, 1951. To this end, 
the Contracting Parties considered a proposal to 
extend from January 1, 1951, to January 1, 1954, 



the date in article XXVIII after which a Con- 
tracting Party may withdraw ]iarticular conces- 
sions following negotiations with interested Con- 
tracting Parties. It was decided, however, to post- 
pone final action on the proposal until the end of 
the Torquay negotiations. They also reaffirmed 
the negotiating rule followed at previous negotia- 
tions to the effect that the binding of a low rate of 
duty should be considered equivalent to the reduc- 
tion of a high rate. 

Import and Export Controls 

Among the most important work of the fourth 
session was an examination of the present opera- 
tion of import and export controls of participat- 
ing countries in order to assure that the basic obli- 
gations of the agreement are being complied with 
and to find means of hastening the end of postwar 
restrictive measures and the earlier achievement 
of the trade objectives of the agreement. In this 
connection, the Contracting Parties examined cer- 
tain types of export and import restrictions which 
are being imposed for the purpose of protecting 
domestic industry or promoting exports. In the 
field of export restrictions, four types were exam- 
ined, namely : 

1. Those export restrictions used by one country 
for the purpose of obtaining the relaxation of an- 
other country's import restrictions. 

2. Those export restrictions imposed by one 
country to obtain a relaxation of another country's 
export restrictions on connnodities in short supply 
or to obtain an advantage in the procurement from 
another country of such commodities. 

3. Restrictions imposed by a country on the ex- 
port of raw materials in order to protect or pro- 
mote a domestic fabricating industry. 

4. Export restrictions used by a country to avoid 
price competition among its exporters. 

There was general agreement among the Con- 
tracting Parties that, with certain minor excep- 
tions, tlie use of sucli export restrictions for the 
purposes indicated was not in accordance with the 
General Agreement. 



April 17, 7950 



613 



In the field of import restrictions, it was rec- 
ognized that even where such restrictions are 
imposed for balanoe-of-payments reasons, tliere 
could be an incidental protective effect which was 
not intended at the time they were imposed. The 
countries agreed that every effort should be made 
to minimize this protective effect to facilitate the 
removal of these restrictions as rapidly as balance- 
of-payments conditions permit. Member coun- 
tries were urged to avoid encouragement of in- 
vestment in enterprises which could not survive 
without protection when the balance-of-payments 
reasons for such protection have disappeared. 
They were urged to take every opportunity to 
impress upon producers who are protected by such 
restrictions the fact that these restrictions are not 
permanent. Countries were asked to administer 
such restrictions as are necessary on a flexible basis 
and to adjust tliem to changing circumstances. 
There was agreement that, where quotas are neces- 
sary, these should preferably be nonbilateral and 
should apply without discrimination to as many 
countries as possible. 

Several specific types of misuse of import re- 
strictions were cited as inconsistent with the 
General Agreement. Among these was the main- 
tenance by a country of balance-of-payments re- 
strictions which gave priority to imports of 
particular products on the basis of the competi- 
tiveness or noncomi^etitiveness of such imports 
with a domestic industry. Another type of misuse 
is the imposition by a country of administrative 
obstacles to the full utilization of import quotas 
in order to afford protection to a domestic indus- 
try. Finally, the use was condemned of import 
restrictions as a means of retaliation against a 
country which has refused to conclude a bilateral 
trade agreement with the country concerned. 

The Contracting Parties agreed, in conclusion, 
that each country should review its present system 
of quantitative import and export restrictions in 
the light of the discussions carried on during this 
meeting and of the conclusions reached. They also 
I'ecommended to each country that every effort be 
made to acquaint those officials responsible for the 
administration of quantitative restrictions or the 
negotiation of trade agreements with the conclu- 
sions reached at tliis meeting and with the specific 
provisions of the General Agi-eement in order that 
such types of restrictions as are not consistent with 
these conclusions or these provisions may be 
eliminated. 

Balance-of-Payments Restrictions 

The Contracting Parties also prepared the first 
of a series of annual reports, describing and assess- 
ing existing discriminatory balance-of-payments 
trade restric't ions. One of tlie objectives of this re- 
port is to examine the effects of import and export 
restrictions in encouraging the development of un- 



economic industries, thus rendering more difficult 
the aim of abolishing bilateralism and restoring in- 
ternational competition in trade. This report, 
which will be published in the near future, indi- 
cates that, while marked advances have recently 
been made by many countries in meeting their bal- 
ance-of-payments problems by increased produc- 
tion and exports, it is still evident that they have 
not been able to earn the amounts of some cur- 
rencies, notably United States dollars and certain 
other convertible currencies, which their importers 
would desire to expend under a regime of nondis- 
criminatory importation. The countries con- 
cerned, therefore, have found it necessary to hus- 
band their dollar earnings to be used for essential 
purchases in the so-called hard-currency areas, 
while i^ermitting their importers a much greater 
degree of freedom in the importation of goods from 
the soft-currency areas. 

Mindful of the fact that the General Agreement 
contains many important provisions aimed at 
avoiding the misuse of discriminatory import meas- 
ures and limiting any longer-term adverse effects 
of such practices, the Contracting Parties ex- 
amined, on a country-by-country basis, the import 
procedures of the countries taking advantage of 
these transitional period arrangements. Since the 
agreement contemplates that comparative prices 
will continue to play an important role in deter- 
mining the source of imports, even in the case of 
countries exercising the right to limit hard-cur- 
rency imports, considerable attention was given to 
administrative devices employed to carry out this 
objective. Many countries stated that they placed 
considerable importance on prices and other com- 
mercial considerations in administering their li- 
censing procedures in order that the discrimination 
would not result in disadvantageous transactions, 
though it had frequently been necessary for certain 
countries to pay higher prices in soft-currency 
areas in order to conserve their hard-currency re- 
sources for more essential purchases. 

Bilateral Trade Patterns 

The Contracting Parties also analyzed the effects 
of bilateral arrangements on international trade 
patterns. It was concluded that, though increases 
in production and currency devaluation have 
somewhat mitigated the effects of bilateralism, 
there remains the danger that bilateral arrange- 
ments together with continuing relatively high 
prices in certain soft-currency markets may attract 
goods which might otherwise have found a dollar 
market and tluis have served to reduce balance-of- 
payments difficulties. It was also noted that sev- 
eral countries consider that their cxjjorts have been 
advei'sely affected to an important degree by these 
arrangements. This was particularly em]ihasized 
by countries imposing no discriminatory restric- 
tions and by those applying such restrictions to a 
relatively small ])ortion of their total imports. 



614 



Department of State Bulletin 



SpecialJProblems 

Aldiiii with other husiiipss. the Contracting 
Part ios <rranted a request bj^ the United States con- 
cerniiifj tlie importation of potatoes, examined and 
made reeommendations on a comphiint by Chile 
a<:;ainst an Australian fertilizer subsidy^ ])repared 
a protocol of rectifications, correcting errors in the 
text of certain portions of the tariff schedules at- 
tached to the agreement, and took action on appli- 
cations by certain countries to permit the use of 
special measures for their economic develo])ment. 

The release granted to tlie United States permits 
the Ignited States to alter the figure in its tariff 
schedule which determines the quantit}' of potatoes 
which may be imported at the lower rate of duty 
negotiated in 1947. Under the waiver, the United 
States may limit the importation of table-stock po- 
tatoes into the United States at the reduced rate 
to 1 million bushels, plus any amount by which the 
domestic crop in 1050 should fall below 335 million 
bushels instead of 3.")0 million as provided in the 
agreement. 

The com])laint of Chile was against the contin- 
uation by Australia of a subsidy on imported am- 
monium sulphate after the removal of a similar 
subsid}- on imported sodium nitrate, a product of 
Chile. While determining that the Australian 
action was not in violation of the agreement, the 
Contracting Parties took into consideration the 
fact that both subsidies had been in effect at the 
time that Australia granted a concession on sodium 
nitrate in the tariff negotiations in 19-17 and recom- 
mended an adjustment of the matter by Australia 
that would remove the competitive inequality cre- 
ated l)y Australia's action. 

After considering applications to permit special 
measures for economic development purposes, the 
Contracting Parties granted an application from 
Ceylon for permission to regulate the importation 
of cotton verties, or sarongs, in order to encourage 
the development of a local industry. A similar 
application from Syria and Lebanon, covering silk 
fabrics and hosiery, was rejected because certain 
information necessary to determine whether the 
proposed measures meet the criteria of the agi'ee- 
ment had not been supplied. Action on an appli- 
cation from Haiti for a release to cover a measure 
for protection of its tobacco-products industry was 
scheduled for consideration at the next session. 

At the close of the conference, the delegate of the 
United States made a brief statement to the effect, 
that the United States still considered it important 
that the Contracting Parties devise a method of 
extending most-favored-nation treatment to Japan 
on a reciprocal basis and that the United States 
may raise this issue during the next session of the 
Contracting Parties at Torquay. 



International Study Group Has 
TV Demonstrations 

On March 27, there will be convened at New 
York a meeting of representatives of approxi- 
mately 20 nations for the purpose of viewing 
United States demonstrations of television stand- 
ards, practices, and equipment possibilities of 
ITnited States designed aiul ])roduced equipment. 
In connection with these demonstrations, tlie group 
will move from New York to Philadelphia anil 
Washington for the purjiose of examining the 
latest developments in television in laboratories 
atul factories in those areas. These demonstra- 
tions constitute the United States portion of a 
series of demonstrations which will occur succes- 
sively in the United States, France, the Nether- 
lands, and the United Kingdom. All four demon- 
strations are part of the work of Study Group 11 
of the International Radio Consultative Commit- 
tee (Ccir), a suborgan of the International Tele- 
conuiiunication Union charged with the study of 
technical radio and television questions. 

It is the purpose of the United States demon- 
strations to show in full technical detail the cur- 
rently used United States systems for the purpose 
of permitting the engineers attending from the 
various nations to decide for themselves which of 
the several television systems is the best. The 
demonstrations in the other countries will be for 
the same purpose. 

Following the four demonstrations there will be 
a meeting in London of Study Group 11 which it 
is hoped may determine and recommend to the next 
Ccir Plenary Assembly, scheduled to be held at 
Praha, Czechoslovakia, in ISfarch 1951, those stand- 
ards which appear to be the best from the stand- 
point of the viewer, giving due consideration to 
economic factors. Such standards, if adopted by 
the Ccir P'lenary Assembly, would serve as guides 
for each member nation of the International Tele- 
communication Union in determining its own 
television practices. In addition, the adoption of 
such a set of standards would prove to be a valu- 
able factor in providing for long-range interna- 
tional exchange of television programs, would 
simplify the radio freqtiency assignment problem, 
and would enable manufacturers of all countries 
engaged in the production of television transmit- 
ting and receiving equipment to proceed with 
greater assurance l)ecause of the certainty arising 
from such standardization. 

In coimection with this subject, Study Groups 6 
and 10 of the International Radio Consultative 
Committee held joint meetings in Washington 
from March 13-24. Their discussions contributed 
broadly toward world-w'ide agreement on the solu- 
tion of technical radio problems, especially the role 
played by the complexities of radio wave behavior. 



April 17, 1950 



615 



United States Delegations to International Conferences 



U.N. Council on Libya 

The Department of State announced on April 3 
that Lewis Clark, Foreign Service officer with the 
rank of Career Minister, will be the United btates 
representative on the United Nations Council on 
Libya The Government representatives on the 
Council are scheduled to meet at Geneva beginning 
April 4, 1950. Assisting Mr. Clark as adviser will 
be Marion J. Rice, Foreign Service Staii otticer, 
Department of State. -,-r ., i xt x- 

The Council, provided for by United Nations 
General Assembly Resolution 289 of November 21, 
1949, was established to aid and advise the United 
Nations Commissioner in Libya m assisting the 
people of Libya to formulate a constitution and 
to establish, not later than January 1, 1952, an 
independent government. 

The Council consists of one representative each 
from Egypt, France, Italy, Pakistan, the United 
Kino-dom, and the United States; one representa- 
tive of the people from each of the tliree regions 
(Cyrenaica, Tripohtania, and the Fezzan) ot 
Libya; and one representative of the minorities 

"Vhe General Assembly resolution provides that 
the Administering Powers, in cooperation with the 
Commissioner, initiate immediately all necessary 
steps for the transfer of power to a duly consti- 
tuted independent government ; administer the ter- 
ritories for the purpose of assisting in the estab- 
lishment of Libyan unity and independence; coop- 
erate in the formation of governmental institu- 
tions; and make an annual report to the General 
Assembly on the steps taken to implement these 
recommendations. . 

Under article 23 of the treaty of peace witli 
Italy, signed on February 10, 1947, Italy renounced 
all right and title to her former territorial posses- 
sions in Africa, namely, Libya, Eritrea, and Italian 
Somaliland. It was established that pendiiig then- 
final disposal— to be determined jointly by France, 
UK U.S.S.R., and United States through the 
Council of Foreign Ministers— they would remain 
under the administrations existing when the treaty 
was signed, i. e., French, with respect to the Fezzan, 
and the United Kingdom with respect to all the 
other territories involved. 



616 



The treaty provided further that deputies of the 
Foreign Ministers should consider the problem 
and make appropriate recommendations. In this 
connection, the deputies established a 4-power 
Commission of Investigation which was sent to 
Africa in November 1947 to collect necessary data 
on economic and social conditions and to determine 
the views of local inhabitants on their future status. 
The findings of the Commission, together with 
recommendations of the deputies, were considered 
by the Council of Foreign Ministers at a special 
session at Paris in September 1948. Since the 
Council of Foreign Ministers failed to reach agree- 
ment at that time, the matter was referred, m ac- 
cordance with annex XI to the treaty, to the United 
Nations General Assembly, which examined the 
Italian colony question during the second part ot 
the third regular session (Lake Success, April- 
May 1949 ) but reached no definite conclusion. 

The matter was again considered at the fourth 
session of the General Assembly (Lake Success; 
September-December 1949), when the resolution 
creating the Commissioner and the Council was 
appi'oved. 

Sixth Session U.N. Social Commission 

The DeiDartment of State announced on April 
3 the United States delegation to the sixth session 
of the United Nations Social Commission which 
convened at Lake Success that date Arthur J. 
Altmeyer and Jane M. Hoey, United States repre- 
sentative and alternate representative, respec- 
tively, on the Social Commission, will attend tlie 
meeting. The following advisers have been desig- 
nated to assist them: 
Roger W Grant. Jr., Office of United Nations Economic 

and Social Affairs, Department of State 
Louis K. Hyde, Jr., United States Mission to the United 

Doro^hv^Lallv, Technical Assistant to the Commissioner 
for Social Security, Federal Security Agency 
The Social Commission, established in June 
1946, is one of the nine permanent functional com- 
missions of the United Nations Economic and 
Social Council. It advises the Council on mat- 
ters in the social field and is concerned with advi- 

Deparfment of Sfafe Bulletin 



sory services to povernmejits in social welfare 
matters; fuiiiily, youth, iiiul child welfare; welfare 
of special frrouj)^ such as aiicil. physically haiuli- 
capped. and inii;rants; social aspects of housin<; 
and town and country planning:; nud prevention 
and treatment of crime. The Commission's mem- 
bership is comprised of 18 United Nations mem- 
ber governments. 

Among the topics which will be considered at 
the session are : migration, advisorj' social welfare 
services; social rehabilitation of the physically 
handicai)ped; family, youth, and child welfare; 
prevention of crime and treatment of offenders; 
and social projects which can be provided by the 
United Nations, upon request, as parts of the pro- 
gram of technical assistance for economic 
development. 



Caribbean Regional Air Navigation (ICAO> 

The Department of State announced on April 6 
that the following delegation will represent the 
United States Government at the International 
Civil Aviation Organization (Icao) Second Carib- 
bean Regional Air Navigation Meeting and the 
IcAo Special Combined Frequency Assignment 
Planning Meeting of the Caribbean, South Ameri- 
can, and South Atlantic regions, which are to be 
held concurrently beginning April 11 at Habana. 

Delegate and Chairman 

P. DeForrest McKeel, Acting Chief, Interuational Civil 
Aviation Organization Office, Civil Aeronautics Ad- 
ministration, Department of Commerce 

Alternate Delegates 

James F. Angler, Airdromes Air Routes and Ground Aids 
Specialist, Civil Aeronautics Administration, Depart- 
ment of Commerce 

John R. Evans, Assistant Chief, Aviation Division, Fed- 
eral Communications Commission 

Donald C. House, Assistant Chief, International Aviation 
Section, United States Weather Bureau, Department 
of Commerce 

Gordon C. Pearson, Airways Operations Consultant, Civil 
Aeronautics Administration, Department of Commerce 

Gilbert V. Tribbett, Adviser, International Flight Opera- 
tions Standards, Civil Aeronautics Administration, 
Department of Commerce 

Commander Clement Vaughn, Search and Rescue Agency, 
United States Coast Guard, Department of the 
Treasury- 
Edward A. Westlake, Acting International Civil Aviation 
Organization, Air Traffic Control Regional Represen- 
tative, Civil Aeronautics Administration, Department 
of Commerce 

Advisers 

E. Thomas Burnard, Air Transport Association, 1107 ICth 
Street, NW., Washington, D. C. 

William T. Deason, Air Traffic Control Specialist, Second 
Region, Civil Aeronautics Administration, 84 Marietta 
Street NAV., Atlanta, Ga. 

Herbert B. Duckworth, Flight Operations Specialist, Bu- 
reau of Safety Regulations, Civil Aeronautics Board, 
Department of Commerce 

John Durkovic, Aeronautical Radio, Inc., 1108 16th Street, 
NW., Washington, D.C. 



Lt. Conidr. Benjamin F. Eiigel, Comnuinleatlons Division, 
UnitiHl States Coast Guard, Department of the 
Treasury 

Lt. M. E. Fox, Department of the Navy, Department of 
Defense 

Raymond L. Ilarrell, Tele<Minitnunleations AltaclK-, Ameri- 
can Embassy, Ual)ana, Cuba 

Maj. Grove C. Jnlinson, Assistant Chief, International 
Civil Aviation Organization Brancli, Civil Aeronau- 
tics Division, Plans Directorate, IId(itrs., MATS, De- 
partment of the Air Force, Department of Defense 

Allison B. Menliennick, (^hief, Overseas Communications, 
Civil .\eronautics Administration, Department of 
Commerce 

Donald Mitchell, Chief, Technical Brancli, Aviation Divi- 
sion, Federal C<imniuuications Commission 

C. A. Petry, Aeronautical Radio, Inc., 1108 16lh Street, 
NW., Washington, D.C. 

Edmond V. Shores, Aeronautical Communications Special- 
ist, Civil Aeronautics Administraticjn, Department of 
Commerce 

Wilmer L. Thompson, Official in Charge, Weather Bureau 
Airport Station, Box 840, Miami 48, Fla. 

Secretary 

John Frazer, Jr., Technical Branch, Division of Interna- 
tional Conferences, Department of State 

The forthcoming Air Navigation Meeting will 
review the progress made by the countries of the 
IcAO Caribbean region in carrying out recommen- 
dations made by the First Caribbean Regional Air 
Navigation Meeting, held at Washington, August 
26-September 13, 1946, with respect to air-traffic 
control; aviation communications; aviation mete- 
orology; search and rescue; and aerodi'omes, air 
routes, and ground aids. It is expected that studies 
of recent developments in these technical fields 
of aviation activity, as well as of scheduled and 
nonscheduled aviation operations in the Caribbean 
region, will lead to the revision and elaboration 
of the regional plan formulated at the 194G meet- 
ing, together with recommendations regarding the 
improvement or establishment of specihc air navi- 
gation facilities and procedures in order to increase 
the efficiency and safety of civil aviation opera- 
tions in the region. 

The Special Frequency Assignment Planning 
Meeting will prepare a coordinated plan of radio 
frequency assigimients to aeronautical stations 
serving the major world air routes traversing the 
Icao Caribbean, South American, and South At- 
lantic regions; a coordinated plan of radio fre- 
quency assignments to aeronautical stations 
serving the regional and domestic air routes within 
the three regions; and a plan of radio frequency 
assignments for special aeronautical mobile serv- 
ices, such as those for broadcasting meteorological 
data to aircraft. This is one in a series of special 
regional frequency assignment planning meetings 
to be called by Icao to enable the countries of the 
various Icao regions to develop radio frequency 
assignment plans on the basis of the Aeronautical 
Mobile "R" Service Frequency Allotment Plan 
formulated at the International Telecommunica- 
tion Union (Itu) International Administrative 
Aeronautical Radio Conference held at Geneva, 
August 1-October 14, 1949. 



AptW 17, 1950 



617 



The United States in the United Nations 



[April 8-14] 

Kashmir 

The Security Council, on April 12, approved 
the appointment of Sir Owen Dixon, a judge of 
the Australian Supreme Court, as United Nations 
Kepresentative in Kashmir, in accordance with 
the resolution adopted by the Security Council 
on March 14, 1950. The vote was eight to none, 
with India and Yugoslavia abstaining. The 
representative of India, M. Gopala Menon, ab- 
stained because India is a party to the Kashmir 
dispute and, therefore, should not participate m 
the voting. 

The President of the Council, Mahmoud Bey 
Fawzi (Egypt), appealed to the Security Coun- 
cil, particularly to its permanent members, to re- 
double their efforts to reach agreement instead of 
perpetuating disagreement. He asserted that ob- 
viously the Council had so far failed adequately 
to fulfill its responsibilities under the Charter 
with respect to peace and security. Although some 
great efforts had been made by tlie Security Coun- 
cil and other United Nations organs, the President 
noted that such efforts had been too often stale- 
mated especially by the lack of agi-eement "be- 
tween permanent members." 

Social Commission 

The Social Commission, in the second week of its 
sixth session, was primarily concerned with a dis- 
cussion of the United Nations program of social 
welfare services. More than 3 years ago certain 
advisory functions formerly carried on by Unrra 
were transferred to the United Nations. Before 
the Commission was a progress report of the Sec- 
retary-General summarizing these services, which 
include providing experienced social welfare ex- 
perts to countries needing assistance, granting fel- 
lowships to government-sponsored social welfare 
officials, holding regional seminars for exchanging 
information and techniques, and demonstration of 
new technical methods such as those used in the 
rehabilitation of physically handicapped persons. 
The Secretary-General also submitted to the 
Commission recommendations concerning future 
programs. He suggested methods for evaluating 
a country's needs and appraisal of the services 
rendered, the use of comprehensive demonstration 
teams, and the expansion of the present fellow- 
ship program for scholarship grants. 

618 



The Commission next turned to a review of 
the terms of the General Assembly resolution 
under which Unrra's functions were transferred 
to the United Nations in 1916; the General As- 
sembly in 1949 authorized the Secretary-General 
to place those functions on a continuing, instead 
of a year-to-year, basis. . 

The United States representative, Arthur J. 
\ltmever, pointed out that the original resolu- 
tion w^as designed to meet temporary emergency 
needs and that the Commission had been instructed 
to prepare a revised resolution broadening the 
activities on a continuing basis. A revised reso- 
lution was unanimously adopted on April 14, 
too-ether with a recommendation to the l^conomic 
and Social Council that it be submitted to the 
General Assembly. 

Transport and Communications 
Commission 

The Transport and Communications Commis- 
sion concluded its fourth session on April 4. 
After considering the question of obtaining com- 
parable transport statistics, the Commission 
approved a draft resolution recommending that 
statistics on transport by rail, road, sea, inland 
waterwavs, and civil aviation be compiled by each 
country in which such traffic exists. 

llso approved was an amended United States 
draft resolution on the question of implementing 
the decision of the Atlantic City Telecommunica- 
tion Conference of 1917 on the need for arriving 
at an orderly arrangement of radio Irequencies 
throuo-h the convening of an Extraordinary Kadio 
Conference, which has been called by the inter- 
national Telecommunication Union for Septem- 
ber 1, 1950. The resolution states that communi- 
cations by radio may become '4iopelessly 
disrupted" through interference if the Conference 
is not successful, and, therefore, it directs the 
Secretarv-General to request member governments 
to f^ive the matter the most careful consideration 
to insure the successful conclusion ot the 

Conference. , , ■ •■ 

The Commission also adopted a series of reso- 
lutions on barriers to international transport ot 
o-oods, coordination of inland transport, ratihca- 
fion of the Convention on the Intergovernmental 
Maritime ConsuUative Organization, the applica- 
tion of certain nongovernmental organizations tor 
consultative status, international road transport, 
and a unified system of road signs and signals. 

Department of State Bulletin 



The Work of the Department of State 

in Carrying Out the President's Loyalty Program 



Statement by Brig. Gen. Conrad E. Snow, Res.^ 



Mr. Chairman : The Loyalty Security Board of 
the Department of State, of which I am chairman, 
is the organ of the Department to which are re- 
ferred all reports from the FBI of full field inves- 
tigations of Department employees for determina- 
tion as to loyalty and security risk. Its decisions 
are post-audited hj the Loyalty Review Board 
of the Civil Service Commission, of which Seth W. 
Ricliardson is chairman, and, to that Review 
Board, go appeals from adverse decisions of the 
Loyalty Security Board. Both Boards are part 
of the President's Loyalty Program, initiated on 
March 21, 1947, by Executive Order 9835. 

Executive Order 9835 

The purpose of Executive Order 9835 was stated 
to be: to assure (a) that persons employed in the 
Federal service are of complete and unswerving 
loj-alty to the United States; (b) that the United 
States afford maximum protection against infiltra- 
tion of disloj-al persons into the ranks of its em- 
ployees; and, at the same time, (c) that there be 
given equal protection to the loyal emjjloyees of 
the United States from unfounded accusations of 
disloyalty. 

The Executive order itself stated the standard 
for the removal from employment of an employee 
on grounds relating to loyalty, which must be 
applied by both Boards. It is "that, on all the 
evidence, reasonable grounds exist for belief that 
the person involved is disloyal to the Government 
of the United States." The Executive order sets 
forth various activities and associations, which, 
if present, may be considered in connection with 
the determination of disloyalty. They are: 

(a) Sabotage or espionage, — or knowingly asso- 
ciating with spies or saboteurs; 

' Made before a Subcommittee of the Senate Foreign 
Relations Committee on Apr. i5, lO.'JO, and released to the 
press on the same date. 



(b) Treason or sedition, — or advocacy thereof; 

(c) Advocacy of revolution, or of force or vio- 
lence to alter the constitutional form of Govern- 
ment of the United States; 

(d) Intentional unauthorized disclosure of 
documents or information of a confidential or non- 
public character obtained as a result of employ- 
ment by the Government of the United States; 

(e) Performance of duties, or otherwise acting, 
so as to sei-ve the interests of another government 
in prefei'ence to the interests of the United States; 

(f) Membership in, afliliation with, or sym- 
pathetic association with, any organization or 
group of persons, which has been designated by 
the Attorney General as totalitarian. Fascist, Com- 
munist, or subversive, or as having adopted a 
policy of advocating or approving violence, either 
to deny to other persons their rights under the 
Constitution, or to seek to alter the form of Gov- 
ernment of the United States. 

Some of these activities, were we to find them, 
would by their very definition necessarily involve 
disloyalty to the United States,— as to wit, espio- 
nage, treason, sedition, revolution. Some of the 
associations, on the otlier hand, are only evidence 
on the issue of disloyalty. Tlie President, for in- 
stance, in a statement to the press of November 
14, 1947, said Avith reference to the Attorney Gen- 
eral's list: "iSIembership in an organization is 
simply one piece of evidence which may or may 
not be helpful in arriving at a conclusion as to 
the action which is to be taken in a particular 
case." This was reaflirmed by the Attorney Gen- 
eral, who added that "Guilt by association has 
never been one of the principles of American 
jurisprudence." 

Membership in Communist Party 

What the President said, however, and what the 
Attorney General said, is not ai)plicable to mem- 
bership "in the Communist Party. Under sec. 9A 



April 17, 1950 



619 



of the Hatch Act, of August 21, 1939, it is unlawful 
for any Federal employee to have membership m 
any or"-anization advocating the overthrow of the 
constitutional form of Government of the United 
States. On February 5, 19-13, under Executive 
Order 9300,-4 years before Executive Order 9835, 
the Department of Justice disseminated among 
Government agencies a list of organizations which 
were subversive under the terms of the Hatch Act. 
This list included the Communist Party of the 
U.S.A. This was reaffirmed by the Attorney Gen- 
eral on May 27, 1948. Accordingly, were the Loy- 
alty Security Board to find in the Department of 
State a member of the Communist Party, his mem- 
bership would not be merely evidence of dis- 
loyalty ; the dismissal of that employee would be 
mandatory. 

Acting under Executive Order 9835. after ap- 
propriafe investigation, the Attorney General, on 
November 24, 1947, transmitted to the Loyalty 
Review Board, a list of organizations which was 
disseminated to the Department on December 4, 
1947 An additional list was disseminated on May 
28, 1948; and on September 21, 1948, the Attorney 
General furnished a consolidated list which con- 
tained the names of all the organizations previ- 
ously designated and segregated into categories as 
totalitarian. Fascist, Communist, subversive, advo- 
cating force or violence to deny others their con- 
stitutional rights, or seeking to alter the forni of 
Government of the United States by unconstitu- 
tional means. These lists include all the so-called 
"front organizations," generally designed to trap 
the unwary liberal-minded individual and not all, 
by any means, either infiltrated or controlled by 
Communists from the outset of their existence. I 
mention this particularly because in considering 
membership in. affiliation with, or sympathetic 
association with such organizations, the Boards 
have to take judicial notice of the fact that the 
characterization of these organizations by the At- 
torney General was first publicized to the em- 
ployees of the Department, in some cases on 
November 24, 1947, in other cases on May 28, 1948. 
Membership or other association with these organi- 
zations in the late 30's and early 40's has, there- 
fore, to be considered with some circumspection as 
evidence of disloyalty or of security risk. 

McCarran Rider 

The problem of the State Department in imple- 
menting the President's Loyalty Program was 
facilitated by the fact that the Secretary of State 
has been granted by Congress, in the so-called 
McCarran Rider of the 79th Congress, and repeat- 
edly in subsequent appropriation acts, the power 
in 'his absolute discretion to terminate employ- 
ment whenever he shall deem such termination 
necessary or advisable in the interest of the United 
States. This power of summary dismissal is the 
basis of the right of the Secretary to dismiss on 

620 



account of security risk, without having to resort 
to a determination, that on all the evidence reason- 
able grounds exist for belief that the employee is 
disloyal. 

Acting in accordance with this power oi sum- 
mary dismissal, and 5 months before the organiza- 
tion of the Loyalty Review Board, the Secretary 
of State, General Marshall, on July 9, 1947, ap- 
pointed a Personnel Security Board, of which I 
was appointed chairman, and Maynard Barnes 
and Darrell St. Claire members. Both of the latter 
two have since left the Department but only after 
a considerable service on the Board. The Secre- 
tary also designated four categories of employees 
as security risks : to wit — 

(a) A person engaging in, supporting, or advo- 
cating treason, subversion, or sedition, or who is 
a member of, affiliated with or in sympathetic as- 
sociation with the Communist, Nazi, or Fascist 
Party, or of any party which seeks to alter the 
form of Government of the United States by un- 
constitutional means, — or a person who consist- 
ently believes in or supports the ideologies and 
policies of such a party. 

(b) A person who is engaged in espionage, or 
who is acting directly or indirectly under the in- 
structions of a foreign goveriunent, or who delib- 
erately performs his duties or otherwise acts to 
serve the interest of another government in pref- 
erence to the interests of the United States. 

(c) A person who has knowingly divulged clas- 
sified information without authority and with the 
knowledge or belief that it will be transmitted to 
agents of a foreign government or who is so con- 
sistently irresponsible in the handling of classified 
information as to compel the conclusion of extreme 
lack of care or judgment. 

(d) A person who has habitual or close associa- 
tion with persons known or believed to be in catjj- 
o-ories (a) or (b) to an extent which would justify 
the conclusions that he might, through such asso- 
ciation, divulge such classified information without 
authority. 

Standards for Loyalty Program 

Under these security principles of the Depart- 
ment of State, adopted in 1947, it will be seen that 
the Personnel Security Board had to apply a stand- 
ard much stricter than that prescribed for the Loy- 
alty Program. Not only Communists were pre- 
scribed as security risks, or persons affiliated with, 
or in sympathetic association with the Communist 
Party,"or who consistently believed in or supported 
the ideologies and policies of the Communist 
Party, but even persons who had habitual or close 
association with such persons, so as to justify the 
conclusion that thov mig'ht voluntarily or invol- 
untarily divulge classified information without 

authority. . 

The President's Loyalty Program was put into 

Department of State Bulletin 



effoct on Deconibor 17. 1047, by tlie issuance b}' the 
Loyalty Iteview Board, under iSeth W. Ivichaidson 
as cliairnian, of five directives, one requiring the 
establishment of Depai'tniental Lo_valty Boards, 
and four reguhitino: the initial consideration of 
loj'alty cases by such Boards, the manner of con- 
ducting liearings, and the determinations by the 
Boards and the matter of appeals from their deci- 
sions. The State Department promptly followed 
suit, by adopting the Loyalty btandards of Exec- 
utive Order l)S35, and transforming the Personnel 
Security Board, with the same membership, into 
the Loyalty Security Board, with the functions of 
applying both the loyalty standards of the Execu- 
tive order and the security principles of the De- 
partment of State. These are the standards that 
have a])plied ever since and apply today. 

The Loyalty Security Board is not an investiga- 
tory body. It performs a judicial function, and 
the basis for action on its part is always a report 
from the FBI. The FBI, in its name check of all 
the employees of the State Department, has found 
itself in possession of certain derogatory informa- 
tion regarding an employee and has, consequently, 
conducted a full field investigation and submitted 
its report to the Department. The report is ex- 
ceedingly complete in most cases, — it covers the life 
lustory of the employee, from his college days and 
in some cases high school days to the present. 
Everyone who remembers the employee, and many 
who don't, has been contacted, — neighbors, teach- 
ers, friends, enemies, and associates. Everything 
they say is put down — whether it bears on loyalty 
or security. Most of the information is imparted 
to the FBI agent in confidence, and the greater 
part of the witnesses refuse to sign statements or 
to appear before a loyalty board. Many of the 
witnesses are anonymous to the Board, and are 
designated in the report simply by letters and 
numbers, with some suggestion either that their 
reliability is unknown, or that they have hitherto 
been found to be reliable. The good is reported 
as fully as the bad. The report, of course, partic- 
ularly in the field of association with other persons, 
contains derogatory information regarding these 
other persons, with supporting testimony. The 
reports are completely objective, — they make no 
attempt to evaluate the information, derogatory 
or otherwise, and draw no conclusions on the evi- 
dence. 

These FBI reports are submitted to the Loyalty 
Security Board in triplicate and are at once passed 
to a panel of .3 out of the 9 members of the Board 
selected by the legal officer of the Board on the 
basis of availability. Each member of the panel 
reads the report by himself and makes up his own 
mind as to the action indicated. Then, a meeting 
of the panel is held, and, under the regulations of 
the Loj'alty Review Board, the Board may come 
to any one of four conclusions : 

(a) it may conclude that in some respect the 



FBI report is incomplete and refer the report back 
to tlu' FBI for further investigation; 

(b) it may direct a written interrogatory to the 
employee but may not question him otlierwise; 

(c) it may maKe a finding clearly favorable to 
the employee; l)ecause of the full nature of the 
FBI reports this is possible in a large proportion 
of the cases ; 

(d) it may propose removal action, which is 
done by a notice to the employee -in writing stating 
the charges in factual detail. The employee, either 
in writing or orally, is informed of the names of 
all organizations with which he is accused of hav- 
ing been connected and of all persons with whom 
he is charged with associating. 

In case the panel decides to make charges of 
disloyalty or of security risk, the employee is 
entitled to reply in writing or to have an admin- 
istrative hearing, at which he may appear per- 
sonally, be represented by counsel of his own 
choosing, and present evidence. If a hearing is 
required, no one is present besides the Board, its 
legal officer, the stenographer, the employee, his 
counsel, and the witness who is testifying. A com- 
plete transcript is made of the hearing and is 
added to the file in the case. The Board is required 
and makes every effort to conduct the hearing with 
fairness, impartiality, and cooperativeness. It is 
an administrative hearing, not a prosecution. 

After the hearing, the jianel meets in executive 
session to decide the case. The regulations require 
that, in its determination, it shall state merely the 
action taken, which may be either: (a) to clear 
the employee, (b) that on all the evidence, reason- 
able grounds exist for belief that the person is 
disloyal, or (c) to recommend dismissal as a se- 
curity risk. If the decision is adverse, the em- 
ployee has an appeal to the Secretary of State or 
to a person designated by him. The Board has 
never been reversed on appeal. Every decision of 
the Board goes to Mr. Peurifoy, Deputy Under 
Secretary for Administration, for further action. 
The Administrative Office has never failed to ex- 
ecute an adverse decision of the Board. 



Civil Service Review 

Every loyalty determination by a panel of the 
Board goes from the Administrative Office to the 
Loyalty Review Board of the Civil Service Com- 
mission for post-audit. The Review Board per- 
mits itself any one of four actions : 

(a) It may affirm the determination of the 
Loyalty Security Board. 

(b) In case the Loyalty Security Board has 
decided the case without preferring charges, it 
may remand the case for charges and a hearing. 

(c) In case the Loyalty Security Board has 
decided the case without interrogation, it may re- 
mand the case for an interrogatory. 

(d) It may hold a hearing itself and either af- 



April 17, J 950 



621 



fii-m or reverse the decision of the Loyalty Security 
Board. 

Since 1947, as of March 1, 1950, the Loyalty Se- 
curity Board of tlie State Department has deter- 
mined 246 loyalty cases ; 199 of the cases have been 
post-audited by the Loyalty Review Board. Out 
of the 199 cases post-audited, three cases have been 
remanded for an interrogatory, one case has been 
remanded for a hearing, and no cases have been 
reversed. The Board has held 30 loyalty hearings. 
Of the 246 loyalty cases, it has found two employ- 
ees to be security risks ; and five have resigned with 
charges pending. 

I have served continuously as chairman of the 



Board and have participated as a member of the 
panel in 85 percent of the cases. I have sat on 
most of the hearings. I have tried to give every 
case my most careful and judicial consideration; I 
am sure that the other members of the Board have 
done likewise. If there are any Communists in 
the State Department, the Loyalty Security Board 
is uninformed of their existence. 

It would not be appropriate for me to discuss 
the individual cases mentioned by Senator Mc- 
Carthy in view of the fact that the President has 
committed the entire list to the Loyalty Review 
Board for a re-review. Any discussion by me or 
by my Board of individual cases would presume 
on this function of the Loyalty Review Board. 



The President Refuses To Disclose Confidenitial Loyalty Files 

[Released to the press iy the White Souse April S] 



The President today sent the following letter to Sena- 
tor Millard E. Tydings, Chairman, Siihcommittee on Loy- 
alty of State Department Employees, Committee on 
Foreign Relations: 

Dear Senator Tydings : The Secretary of State, 
the Attorney General, and the Chairman of the 
Civil Service Commission have referred to me the 
matter of the subpoenas which have been served on 
them, directing them to appear on April 4, 1950, 
before the Subcommittee established by the Com- 
mittee on Foreign Relations of the Senate, pursu- 
ant to S. Res. 231, 81st Congress, and to produce 
various documents and papers relating to a number 
of persons whose names appear on a confidential 
list attached to each subpoena. 

In my letter to you of March 28, 1950. I stated 
the reasons why the confidential loyalty files of 
Government employees should not be produced. I 
should like at this time to restate those reasons 
brieflj'. 

The disclosure of these files would seriously 
prejudice the future effectiveness and usefulness of 
the Federal Bureau of Investigation as an investi- 
gative agency ; the embarrassment, and even dan- 
ger, to those who have given confidential informa- 
tion cannot be overemphasized. Disclosure Avould 
not only deprive the Federal Bureau of Investi- 
gation and other investigative agencies of the Gov- 
ernment of the availability of those confidential 
informants in tlie future, jjut would also gravely 
impair their ability to gathei- confidential informa- 
tion from other sources as well. 

The employee loyalty program depends upon 
the investigative services of the Federal Bureau of 
Investigation. The disclosure of the files would, 



therefore, result in serious harm to that program. 
Such disclosure, instead of helping to keep disloyal 
people out of the Government service, would im- 
pair the very effective means we now have for 
accomplishing that purpose. 

The investigative files of the Federal Bureau of 
Investigation do not contain proven information 
alone. They include any unverified charges and 
allegations, leads and suspicions. Disclosure of 
the files would, therefore, result in serious injustice 
to, and damage to the reputations of, many inno- 
cent persons. 

The reasons wliy disclosure of the files would be 
contrary to the public interest were more fully 
stated by the Director of the Federal Bureau of In- 
vestigation when he testified before your Subcom- 
mittee on March 27, 1950. The Attorney General 
at the same time not only fully stated the reasons 
of public policy which compel the maintenance of 
the confidential nature of the files, but also dis- 
cussed the Constitutional precedents which sup- 
port without any question my authority to take the 
position I have in this matter. 

The authority of the President in this regard 
has been recognized since the beginnings of our 
Government. Our first President and his Cabinet, 
in considering the first request made by a House of 
Congress for Executive papers, concluded that 
while the Congress might call for papers generally, 
the Executive ought to comnnuiicate only such pa- 
]">ers as the public good would ])ermit. and ought 
to refuse those the disclosure of M-hich would be 
contrary to the public interest. 

No President has ever comjilied with an order of 
the Legislative Branch directing the Executive 



622 



Department of State Bulletin 



Branch to produce confidential documents, the 
disclosures of which was consiilered hy the Presi- 
dent to be contrary to the public interest. Tlie 
Presidents who have had to meet that issue are 
numerous, and they have uniformly rejected such 
encroacliments on the Constitutional power of the 
President. George Washington, James Monroe, 
Andrew Jackson, and Grover Cleveland are only 
a few of the Presidents who have followed this 
course. In our own lifetime, William Howard 
Taft, in his book "The Chief Magistrate," allirmed 
his faith in the Constitutional power of the Presi- 
dent on this issue. And also within this century, 
Attorneys General serving in the Cabinets of Pres- 
idents Tlieodore Roosevelt, Taft, Wilson, Coolidge 
and Franklin D. Roosevelt, have restated the re- 
sponsibility of the Executive Branch to maintain 
the integi'i'ty of confidential information when its 
disclosure would be contrary to the public interest. 
I would be derelict in my duty if I failed to do so. 

I have felt obliged, therefore, to direct the Sec- 
retary of State, the Attorney General and the 
Chairman of the Civil Service Commission not to 
comply with your subpoenas. 

As I have already informed you, I wish to coop- 
erate with j'our Subcommittee in every reasonable 
way, and for that reason I have asked the biparti- 
san Loyalty Review Board to make an independ- 
ent review of the loyalty cases before your 
Subcommittee. 

Sincerely yours, 

Harry S. Truman 



Ambassador Jessup Answers 
McCarthy's Charge on Field's 
Donations to Learned Society 

Statement hy Philip C. Jessup ^ 
[Released to the press April 3] 

I believe a comment is appropriate on Senator 
McCarthy's latest insinuations that the American 
Council of tlie Institute of Pacific Relations, in ac- 
cepting donations from Frederick Vanderbilt 
Field, had shown that it was being paid to peddle 
the Communist Party line. 

But first, it is again necessary to correct a mis- 
statement of fact by Senator McCarthy. Senator 
McCarthy said tliat the American Council of the 
Institute of Pacific Relations "was largely con- 
trolled by Mr. Jessup." Actually, during the years 
in which these donations were made, 1942 and 1943, 
I had ceased to be chairman of the American 
Council of the Institute of Pacific Relations. I 



was still a member of the Board of Trustees which 
had about ;■")() members. 

At tliat time. Dr. Robert Gordon Sproul, presi- 
dent of the University of California, was chair- 
man of the American Council of the Institute of 
Pacific Relations; Francis Harmon was treasurer; 
and AVilliani R. Herod, now president of the Inter- 
national General Electric Company, was chairman 
of the Finance Committee. During that period, 
Juan Trippe, i)residentof Pan American Airways, 
and Henry Luce of Ti?ne and Life were sponsors 
of a drive for funds on behalf of the American 
Council of the Institute of Pacific Relations. 
Surely these gentlemen would never have accci)ted 
payments from Mr. Field or anyone else for "sell- 
ing the Communist Party Line." Neitlier would 
I if I had been in control. 

Tliese contributions, according to Senator Mc- 
Carthys own figures, total only $3,.'500 as com- 
pared with total expenses for the 2-year period of 
approxmiately $200,000. About half of the 
amount was met by contributions from the Rocke- 
feller Foundation and Carnegie Corporation. 
Generous donations by large industrial concerns 
made up a large portion of the remainder. 



Ambassador Steinhardt Killed 
in Plane Crash in Canada 

Statement by Secretary Acheson 
[Released to the press March 28] 

I was deeply shocked and saddened to hear of 
the death this morning of the Honorable Laurence 
A. Steinhardt, the United States Ambassador to 
Canada, in a plane crash near Ottawa.^ 

Mr. Steinhardt served witli distinction at a 
number of important diplomatic posts since 1933, 
and, at the time of his death, was ably representing 
the United States in Canada. His devotion to 
duty and his keen intelligence enabled him to make 
a most valuable contribution to the conduct of our 
foreign relations in the critical years during which 
he served his country. In his last assignment, he 
worked conscientiously for the maintenance and 
strengthening of the bonds of friendship between 
the United States and Canada. 

Throughout our association, I had a profound 
admiration for his sincerity and his integrity. I 
know that my sorrow in his untimely death is 
shared by his many friends both in this country 
and abi-oad who recognized and appreciated his 
ability. 



' Made in response to a telejrram dated Apr. 1, 1950, 
from Senator .Joseph McCarthy to Secretary Acheson. 



' For texts of condolences from L. f. St. Laurent, 
Canadian Prime Minister, to the President and from 
H. H. Wrong, Canadian Ambassador to the United States, 
to Secretary Aclieson, see Department of State pre.ss re^ 
leases 201 ami 292, Mar. 28, lOfjO, respectively. 



April 17, 1950 



623 



^<yrUewl^ 



General Policy Page 

Answers to Czechoslovak Protests Against 
Treatment of Citizens Landing in U.S. 
Zone of Germany: 

U.S. Notes 595 

Czeclioslovak Notes 597 

Greece Urged To Increase Productive Ca- 
pacity 600 

President of Chile To Visit in the United 

States 602 

Economic Affairs 

The Future of Foreign Trade. By Willard 

L. Thorp 591 

U.S. Concerned Over Korea's Mounting In- 
flation 602 

Full Employment Action — National and In- 
ternational Measures. Summary by 
Ruth S. Donahue 604 

Treaty Information 

Anniversary of Signing of North Atlantic 
Treaty. Statement by Secretary Ache- 
son 594 

The United Nations and 
Specialized Agencies 

The United States in the United Nations . 618 

International Information and 
Cultural Affairs 

Japanese Officials To Study Unesco in the 

United States 593 

Animal Husbandry Specialist to Visit Colom- 
bia 602 

K. G. Wakim, Physiologist, to Visit in 

Syria 602 

Japanese Foreign Office Officials To Study 

U.S. Methods 603 

Occupation Matters 

The German Problem and Its Solution. By 

John J. McCloy 587 



Technical Assistance ^b^^ 
A Two- Year Record of Recovery. By Sec- 
retary Acheson 589 

Foreign Assistance Act of 1950: A Major 
Blow for Peace. Letter From the Presi- 
dent to John Kee 603 

International Organizations 
and Conferences 

Soviets and Satellites Protest Seating of 
Chinese Nationalists at High Frequency 

Conference 612 

Contracting Parties to Gatt End Fourth 

Session 613 

International Study Group Has TV Demon- 
strations 615 

U.S. Delegations: 

U.N. Council on Libya 616 

Sixth Session U.N. Social Commission . . 616 
Caribbean Regional Air Navigation 

(IcAo) 617 

Second Inter-American Statistical Con- 
gress. By Stuart A. Rice 610 

The Department 

Passports To Be Issued for Travel to Yugo- 
slavia 599 

The Work of the Department of State in 
Carrying Out the President's Loyalty 
Program. By Brig. Gen. Conrad E. 
Snow, Res 619 

The President Refuses To Disclose Confiden- 
tial Loyalty Files 622 

Ambassador Jessup Answers McCarthy's 
Charge on Field's Donations to Learned 
Society 623 

The Foreign Service 

Ambassador Steinhardt Killed in Plane Crash 
in Canada. Statement by Secretary 
Acheson 623 

Publications 

Recent Releases 609 



my^if}mtdc^ 



Ruth S. DoDcilnic, author of the summary on national and 
international measures for full employment, is Special Assistant 
to the Assistant Secretary for Economic Affairs. 

Stuart A. Rice, author of the article on the Inter-American 
Statistical Congress, is Assistant Director in Charge of Statisti- 
cal Standards, Bureau of the Budget. Mr. Kice served as 
chairman of the United States delegation to the Congress. 



U. S. GOVIRNMENT PRINTINO OFFICII 1*19 



i 



tJ/i€/ zl)eha/)(ime7i// /w t/iafe^ 




REPORT TO THE AMERICAN PEOPLE ON TTTF V K^x 

EAST • By Ambastador Philip C. JcHsup . '>27 

THE AMERICAN PEOPLE'S PART IN U.S. FOREIGN 

POLICY • By Asaistant Secretary Barn' 646 



\M*IA. 1? Ul lIMEUiNAllONAL PETKULEIj.M 

POLICY • By Asaiatant Secretary Thorp 640 



THE HABANA CHARTER FOR AN ITO: EMPLOY- 
MENT AM) ECONOMIC ACTIVITY; ECONOMIC 
DKVFI.OP-MF.NT AND RFrONSTRI'CTION 634 



For complete contents see hack cover 



Vol. XXIT, 1^6. S(k 
April 24, 1951 





"■•»«• o* 



^^^v^. bulletin 



Vol. XXII, No. 564 • Publication 3826 
April 24, 1950 



For sale by the Superintendent of Documents 

U.S. Government Printing Office 

Washington 25, D.C. 

Price: 

62 issues, domestic $6, foreign $8.50 
Single copy, 20 cents 

The printing of this publication has 
been approved by the Director of the 
Bureau of the Budget (February 18, 
1949). 

Note: Contents of this publication are not 
copyrighted and items contained herein may 
be reprinted. Citation of the Department 
or State Bdlletln as the source will be 
appreciated. 



The Department of State BULLETIN, 
a weekly publication compiled and 
edited in the Division of Publications, 
Office of Public Affairs, provides the 
public and interested agencies of 
tlie Government with information on 
developments in the field of foreign 
relations and on the work of the De- 
partment of State and the Foreign 
Service. The BULLETIN includes 
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by the White House and the Depart- 
ment, and statements and addresses 
made by the President and by the 
Secretary of State and other officers 
of the Department, as well as special 
articles on various phases of inter- 
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the Department. Information is in- 
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United States is or may become a 
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Publications of the Department, as 
well as legislative material in the field 
of international relations, are listed 
currently. 



U. S. SUPERINTENDENT OF DOCUMENTS 

MAY 4 1950 
Report to the American People on the Far East 



hy Avibassador Philip C. Jessup * 



Last December, Secretary Acheson asked me to 
go on a fact-finding trip to the Far East. I left 
Washington on December 15 and returned exactly 
3 months later, on March 15. 

Since my return, I have reported my observa- 
tions to the President and the Secretary of State. 
I have reported to the Senate Foreign Relations 
Committee and the House Foreign Affairs Com- 
mittee. Tonight, I want to report to the Ameri- 
can people. 

It was quite a trip. We flew more than 26,000 
miles over Asia, and visited 14 Eastern countries. 
In each of these countries, I consulted, of course, 
with our American diplomatic representatives, as 
well as with American businessmen and mission- 
aries. I also talked with heads of states, with 
Prime Ministers, with politicians, businessmen, 
educators, and other leading citizens of the coun- 
tries themselves. 

Tonight, I want to give you some of the out- 
standing facts and impressions that I brought 
back with me. 

There is no need for me to tell you that what 
is going on in Asia is of tremendous importance 
to the United States. I think most Americans 
realize that. I think they realize that Asia is 
important not only because Soviet communism is 
clearly out to capture and colonize the continent. 
Asia was important before Soviet communism be- 
gan and will be important after it passes from the 
scene. Nor is Asia important only because of the 
vast material and human resources that Asia pos- 
sesses. Asia is important also because tremendous 
and hopeful things are happening there; because 
a great continent and great peoples are anxious 
to build not only a free but also an abundant so- 
ciety. And that awakening has a profound mean- 
ing for us, since we live by those same ideas. 



' An address made over the American Broadcasting 
Company on Apr. 13, 1950, and released to the press on 
the same date. 



Critical Problems 

Let me describe to you some of the critical prob- 
lems that the people of Asia face. One of the most 
serious is the problem of violence. I am not 
speaking now of China, because, unfortunately, 
I was not able to travel in that unhappy country. 
But, m most of the areas I visited, there is a very 
serious problem of violence. 

You cannot go around these countries without 
realizing that you are in a war situation. In many 
of these countries there is fighting going on, some- 
where, at least part of the time. You can feel 
the effects of this wherever you are, and you can 
see the signs of it. 

In Korea, for example, the boundary on the 38th 
parallel, between the free Republic of South 
Korea and the part still under Soviet control, is a 
real front line. There is constant fighting be- 
tween the South Korean Army and bands that 
infiltrate the country from the North. There 
are very real battles, involving perhaps one or 
two thousand men. 

When you go to this boundary, as I did, you 
go very well protected. You see troop movements, 
fortifications, and prisoners of war. And you 
can feel the tension. 

In Indochina you are obviously in a war situa- 
tion. There, you have a Communist rebellion led 
by Moscow-trained Ho-Chi Minh which is capi- 
talizing on the nationalist anti-French sentiment 
of a large number of people. He has set up what 
he calls a government in the North, and controls 
a considerable area of the country, although he 
has no capital and no regular government. You 
get used to moving around among soldiers, and 
barbed wire, and road blocks. You travel with 
an escort of jeeps filled with armed guards, along 
roads lined with observation towers and tanks. 
You find the same situation in Malaya. Even in 
Singapore, where there are no signs of war, you 
are constantly aware of the guerrilla fighting that 



April 24, 1950 



627 



is going on in the back country. The newspapers 
have daily casualty lists. 

In Burma, there is actually a civil war going on 
among five different factions. Fighting is con- 
tinuous on a number of fronts. In Rangoon, the 
capital, again you see barbed wire entanglements 
and machine gun emplacements. 

In all of these countries, as well as in Indonesia 
and tlie Philippines, the government of the coun- 
try is fighting armed, organized resistance. This 
situation forces the governments to divert money, 
manpower, and energy to military operations. It 
is holding up the economic and social develop- 
ment of the country. It is seriously interfering 
with the normal daily life of the people. That is 
a fundamental fact we must take into account in 
our relations with these countries and our policies 
toward them. 

India-Pakistan Talks 

The several disputes between India and Paki- 
stan have created another critical situation. Here 
you have two great new countries — new in terms 
of their independence — which have been at swords 
point for many months. Trade between them, 
trade on which both countries depend for their 
very existence, is practically at a standstill. More 
seriously, tension and ill will led in recent months 
to communal disturbances in the Pakistan pro- 
vince of East Bengal and the Indian province of 
West Bengal which seemed to be leading these two 
countries into a position in which a false move 
on either side might have led to war. Fortu- 
nately, for India and Pakistan, and for the peace 
of Asia, the Prime Ministers of these two coun- 
tries realized that the trend to disaster must be 
reversed. They met in New Delhi last week and, 
as has since been announced, they reached agree- 
ment on a charter for the protection of minorities 
in their two countries. It may be hoped that this 
achievement of high statesmanship will mark 
the beginning of a new era of improving relations 
between the two neighbors of the subcontinent. 

Progress has also been made in another major 
dispute between India and Pakistan. Last month 
the Security Council of the United Nations 
adopted a resolution calling upon the two coun- 
tries to demilitarize the princely state of Jammu 
and Kashmir which has been the subject of dis- 

gute between them for over 2 years. India and 
'akistan have accepted this resolution, and, yes- 
terday, the Security Council designated Sir Owen 
Dixon, Justice of the High Court of Australia, as 
the United Nations representative to assist the two 
governments in giving effect to the resolution. 

In the dispute between India and Pakistan, you 
have had a growing possibility of war between 
two countries. In Southeast Asia, you have the 
fact of internal disorder. These are two different 
kinds of situations, but, in both cases, there is 
violence and fear of violence which is preventing 
the normal development of these countries. 



Weakness of Asian Governments 

Now, there is another problem that was brought 
home to me on my fact-finding expedition, and 
that is the problem of the relative weakness of 
the governments of most of the countries of Asia. 
It seems to me important to have a sympathetic 
understanding of this problem so that we know 
what we are dealing with. 

AVe sometimes forget that most of these Asian 
countries have had no experience and very little 
understanding of what we call independent demo- 
cratic government. Some of them are learning. 
Some are making great progress. 

Remember, there are seven new countries in 
Asia which are just beginning to learn to govern 
themselves. They have centuries of dependence 
behind them. Some of them have the experience 
of the Japanese police state rule to unlearn. 

In evei'y one of these countries, there are some 
experienced and responsible leaders. But it takes 
more than leaders to administer a government. 
And, in many cases, there is a great gap between 
the leaders and the people — a gap that needs to be 
filled with competent administrators who under- 
stand how a government works. 

In everv one of these countries, the people are 
very sensitive. They don't want to be run by 
somebody else. They say, "We are free. We will 
run our o\\'n affairs." They are anti-colonial. 
That is the frame of mind in which they accept 
outside assistance. And I think it is significant 
that, for example, the Indonesians are using Dutch 
advisers, and that the Burmese are receiving some 
assistance from the Commonwealth. But na- 
tional pride and independence are the most im- 
portant factors in their attitude. We have to 
remember this if we are to help these people build 
representative and responsible governments. 

Pride In National Cultures 

I was struck almost everywhere by the way in 
which national pride showed itself in terms of 
education. Even in the middle of a war situation, 
you find these people building new schools and 
colleges, and you find everywhere more students 
than you can handle. As one who has spent 
nearly half my life teaching in a university, this 
part of the picture had a special personal interest 
for me. 

When I was in Hanoi, in Indochina, I attended 
the opening ceremony of the new College of 
Letters of the University there. This new col- 
lege is the only one in which all subjects are taught 
in the native language of "Viet Nam. This was 
made possible by the agreement with the French 
signed last December, an agreement recognizing 
the right of the people of Viet Nam to organize 
their own universities. 

The Under Secretary of Education spoke with 
great pride of the national culture of Viet Nam. 
But he told the students, "You will learn foreign 



628 



Department of State Bulletin 



languages and literatures. Our people have be- 
gun to enter into international liie and will need 
extensive relations." 

He also made a little speech to nie, in which ho 
said : "I hope when you are back in your country, 
you will not forget this simple ceremony. I also 
iiope that this College of Letters and many other 
schools of our country will have close relations 
■with the schools of America for cultural ex- 
changes." 

I had the jirivilege of speaking also to the stu- 
dents and faculties of the Universities at Manila 
and Seoul. They understand and respond to 
references to our great university tradition of aca- 
demic freedom exercised in the spirit of the search 
for truth. 

I mention these examples of the strong urge 
among these newly independent people to learn, 
and to learn in their own way, in keeping with 
their national pride, but linked in the common 
bond of the free world's devotion to the spread of 
knowledge. So when it comes to developmg their 
resources of food and minerals, when it comes to 
establishing their governments on a firm basis, it 
is not the urge or even in many cases the knowl- 
edge that is lacking. It is the necessary concen- 
tration on public order, on putting down insurrec- 
tion or civil war, or preventing invasion. That 
is their main problem at the moment. 

Situations for Communist Footholds 

You may have noticed that I have not talked 
so far in terms of the Communist threat in Asia, 
and for a good reason. Each of the free coun- 
tries of Asia has its own special problem in deal- 
ing with conununism. The nature of the threat 
varies, and it is not possible to make accurate 
generalizations about the whole area. However, 
it is possible to identify certain weaknesses on 
which communism thrives and to see also the 
strong points which offer effective resistance to 
communism. 

The existence of internal disorder and the in- 
experience of governments are points of weakness. 
So is the intense poverty of the people, and 
their gi'owing sense of discontent witli their con- 
ditions of life. To offset these, you have the 
immense strength of the desire for independence, 
the awakening of national pride, and the stub- 
born resistance to interference from outside. 

During my travels, I became aware of two other 
situations which offer the Communists a foothold 
in these free countries. One is the presence of a 
common frontier with Communist-controlled ter- 
ritories. You have these common frontiers in In- 
dochina and Burma, and, in both of these coun- 
tries, there is an ever present fear of infiltration 
over the border, as well as the threat of possible 
invasion. You have the same situation in Korea, 
and, as I have said, the boundary has become the 
I front line in an actual shooting war. 

The other situation which might offer the Com- 



munists a foothold, i)erhaps in a few places, is the 
existence of large Cliinese minorities in Southeast 
Asia. These minorities have existed for genera- 
tions. Most of them are respectable hard-work- 
ing people, laborers, merchants and property 
owners. The Communist domination of China 
puts them as well as the countries of their adoption 
in a difllcult position. The Communist masters 
of China have been quick to take advantage of this 
situation. Their propaganda paints a glowing 
picture of the benefits whicli they allege that com- 
munism has brought to China. The blackmail 
says to them : "You have relatives and friends in 
China. If you want them to live and prosper, 
join your local Communist movement and help 
to spread the gospel — or else." 

Action Needed Toward Asia 

Now it seems to me that these problems point 
to several kinds of action which we need to take 
in Asia. One kind of action is to help the free 
people of Asia and their governments to restore 
domestic peace. This is not as big a job as it may 
sound. What they need is not large amounts of 
military material, but key bits of equipment, such 
as rifles for their constabulary, or communications 
equipment, radios, jeeps, or small boats to enable 
their police or militia to move about in time to 
meet the kind of guerrilla attacks that are dis- 
rupting most of these countries. 

Now, the other kind of action — and this can and 
must go on at the same time — is to help these 
people to raise their standards of life. One direct 
and effective answer to their poverty is in our 
program of technical cooperation, which is now 
before the Congress, the program which the Pres- 
ident listed as Point 4 in his inaugural address. 

I have been tremendously struck with the results 
of this kind of work, as it was carried on under the 
ECA in China, and as it is still going on in For- 
mosa. It went at specific things, like the control 
of cattle diseases and pests, like the use of new 
seeds and fertilizers to produce larger crops. 

When I talked about this work in several other 
countries, people said, "That's exactly the kind of 
thing we would like to do." They didn't know 
about this particular work, but it fitted in with 
their picture. 

This Point 4 Program takes a very small amount 
of money and a small number of people. It takes 
patience. And it takes, particularly, an under- 
standing of the special problems of the people in 
the country where our experts are working. 

I went out to Asia strongly convinced of the 
value of technical aid as an arm of American for- 
eign policy. I came back a hundred times more 
strongly convinced. I wish I could fully com- 
municate this conviction to you, but you have to 
see for yourselves before you can fully understand 
how much these people need and want the skills 
and the knowledge we can bring to them. 

In this connection, I think you should know 



April 24, 1950 



629 



that, in this part of the world, we have an enor- 
mous reservoir of pro-United States sentiment on 
which to build. There is feeling against the West, 
to be sure. There is a tremendous feeling against 
the old colonialism that they connect in their 
minds with the West. There is some suspicion 
of our motives. But, on the whole, there is a vast 
respect for the United States and a vast amount 
of confidence in the United States. 

Now, I mentioned this friendly sentiment as 
something on which we can build, and I mean that 
literally. You cannot rely on sentiment — you 
have got to build on it. 

Everywhere I went on my journey, in every 
single country, people asked me with almost 
pathetic earnestness : "Can we count on help from 
the United States? Do the American people 
really understand our desire for independence, 
and will they back up our independence?" 

And I answered, I think, truthfully, "The 
United States does stand for independence ; it be- 
lieves in independence. It will help people who 
are determined to work and fight for their inde- 
pendence. It does help free people to remain 
free. It does help people who help themselves." 

The policy of tne United States toward these 
countries of Asia is a positive and a concrete 
policy. It has form and substance. More than 
that, it is not a static but a developing policy, and 
it is developing along very clear lines. It re- 
quires the wholehearted and enthusiastic support 
of the American people. 

During the past 3 months. Secretary Acheson 
has outlined our policy on a number of occasions. 
And I think it is worth summarizing tonight. 

First, the United States believes that every peo- 
ple has the right to be independent, to govern it- 
self, and to work out its own problems in its own 
way. We have demonstrated this belief as, for 
example, in our relations with the Philippines, 
with the Republic of Korea, and with the United 
States of Indonesia. 

Second, the United States believes in the in- 
stitution of democratic government and encour- 
ages the practice of democratic government 
wherever it is possible to do so. We have done 
this in Germany and Japan. We feel that the 
Japanese people have progressed to a point where 
they deserve a peace treaty which will give them 
responsibility for managing their own afFairs, 
with certain necessary safeguards. 

Third, the United States believes that free peo- 
ple who are determined to maintain their inde- 
pendence are entitled to military aid which will 
help them to remain free. We have provided 
such aid to the Philippines and Korea and will 
continue to provide it under similar conditions. 

Fourth, the United States, within the limits of 
its resources, gives economic aid, in the form of 
loans and technical assistance, where such aid is 
wanted and can help people to help themselves. 
An example of such aid is the recent Export- 
Import Bank loan to Indonesia and the program 



of technical assistance which we introduced with 
great success in China, Formosa, and Korea 
through the Economic Cooperation Administra- 
tion. 

Fifth, we shall continue to carry on a vigorous 
information program to make known the purposes 
and policies of the United States and to counter 
the campaign of misinformation and libel that 
the Communists are waging not only among their 
captive people but among the free people who 
are our friends and partners. 

Sixth, we shall continue to work through the 
United Nations as well as through direct diplo- 
matic channels to encourage the settlement of 
disputes that endanger peace and stability. We 
are hopeful that the progress now being made 
between the Governments of India and Pakistan 
will lead to a full and friendly understanding be- 
tween those two great nations. 

I believe there are two necessary conditions for 
the success of the policies I have outlined. One 
condition, it seems to me, is a cool and unwaver- 
ing determination on our part to go forward in the 
face of the many difficulties and discouragements 
that are bound to arise. 

The second condition is an ever growing under- 
standing, on our part, of the realities of life in 
Asia. There is no quick or easy way to acquire 
an understanding of the complex problems of the 
Orient. But there is no substitute for under- 
standing. It is the basis of our democratic 
foreign policy. It is at the very root of our 
democratic faith. 



Evacuation of Americans in Slianghai 
by Sea Abandoned 

Statement hy Secretary Acheson 
[Released to the press April 12] 

The Chinese Communists have not yet granted 
clearance of ships for the proposed evacuation 
from Shanghai. At the same time, the National 
Government has informed us that, for military 
reasons, it can no longer delay the mining of the 
North Channel. Accordingly, all plans for an 
evacuation by sea from Shanghai at this time have 
been abandoned. 

The Department started planning for the 
Slianghai evacuation in mid-January, following 
the announcement of the closure of all official 
establishments in Communist China and the with- 
drawal of official American personnel. At the 
same time, the Department stated that facilities 
would be made available at the time of withdrawal 
of official personnel for all American citizens 
desiring to leave. 

The use of planes, trains, and small coastal 
steamers for exit from Shanghai was thoroughly 



630 



Department of Slate Bulletin 



investigated. The Communist authorities refused 
permission for tlie use of commercial planes or for 
travel by rail to other ports. The owners of the 
coastal steamers refused to risk them in the narrow 
North Channel of the Yangtze which was the only 
channel clear of mines. 

On February 10, the Department sought other 
shallow-draft vessels for use in navigating the 
North Channel. Finally, with oral assurances 
that the Shanghai authorities approved in prin- 
ciple the use of shallow-draft vessels to lerry 
passengers to larger ships off the Yangtze estuary, 
the American President Lines arranged, with the 
approval and support of the Department, to char- 
ter and man two LST's. Crews for these ships 
were flown from the West Coast to Japan. The 
LST's sailed for Shanghai and waited over a week 
outside territorial waters for permission to enter 
Shanghai. These ships were to rendezvous with 
the liner General Gordon on March 20. The De- 
partment expended almost half a million dollars 
in support of this operation only to have the 
Communists refuse permission for the use of the 
LST's. 

■\Vlien this plan finally collapsed, the Depart- 
ment authorized Shanghai to continue its search 
for other means. A Chinese-owned river steamer 
was finally found in Shanghai which could be 
chartered for the shuttle operation. An addi- 
tional ship to carry baggage and cargo also was 
available. The Communists refused to permit 
these ships to rendezvous with the LST's but in- 
dicated approval would be forthcoming if they 
were used to rendezvous with commercial ships. 
Accordingly, we immediately took steps to locate 
suitable commercial ships in Far East waters. 
Several ships were found to be available, but they 
proved unsuitable for the large evacuation opera- 
tion. A Dutch ship was found in Japanese 
waters, but its Shanghai agent did not consider 
the plan feasible. Consequently, that plan had 
to be dropped in favor of the use of the An King, 
a British vessel in Hong Kong, which had been 
alerted by the British authorities to assist in the 
evacuation operation. 

Since over 450 British subjects wished to evac- 
uate, in addition to the 300 Americans, and since 
the Chinese river steamer could accommodate only 
450 per trip, it would have required two ferry trips 
to evacuate the British and American citizens. In 
addition, reports from Shanghai indicated it would 
reqiiire 2 to 5 days to arrange customs clearance 
and loading after final permission had been ob- 
tained for the ferry operation. 

This would have carried the evacuation opera- 
tion almost one full week beyond the deadline set 
by the Nationalists, even if permission had been 
granted at once by the Shanghai authorities. 

It is now too late to try to carry through this 
plan since any attempt to run through the mine 
fields would entail serious risks. 

The Department will continue every effort to 
assist Americans to get out of Shanghai. Wliile it 

Aptil 24, 1950 



is premature at the moment to state what can be 
done, renewed efforts will be made to obtain from 
Communist authorities permission for travel by 
rail either to a North China port or to Honp Kong, 
where shipping facilities can be made available. 

All of our official personnel from Peiping and 
Tientsin will be en route out of China by the end of 
tlie week. Consul General O. Edmuncf Clubb and 
the last members of this staff are leavin" Peiping 
today and are scheduled to sail on Friday from 
Tientsin via Tangku Bar. Consul Alfred T. Well- 
born and his assistant will leave Tientsin also on 
Friday. 



Department Encouraged 
by India-Pakistan Tall(s 

Statement hy Secretary Acheson 
[Released to the press April 12] 

The successful conclusion of the New Delhi 
talks between Prime Minister Nehru of India and 
Prime Minister Liaquat Ali Khan of Pakistan is 
highly gratifying. The announcement that the 
two Prime Ministers plan to meet again from time 
to time is an added source of encouragement. 

I am confident that this demonstration of 
statesmanship by Mr. Nehru and Mr. Liaquat Ali 
Khan will mark the beginning of better relations 
between their two countries. It is a real pleasure 
to congratulate the two Prime Ministers and their 
respective countries which are fortunate in having 
in these difiicult times leaders of such stature. 



THE CONGRESS 



Legislation 

Authorizing the Committee on Expenditures in the Exec- 
utive Departments to Employ Assistants and Make Ex- 
penditures in Studying Relationships of the United States 
with States and Certain International Organizations. 
S. Kept. 1210, 81st Cong., 2d sess. [To accompany S. Kes. 

Amending the Displaced Persons Act of 19-18. S. Kept. 
1237, 81st Cong., 2d sess. [To accompany H. R. 4567] 

Amending the Displaced Persons Act of 19-18. S. Rept 
1237, Part 2, 81st Cong., 2d sess. [To accompany H. R. 
4567] 14 pp. ^ _,. , 

Authorizing the President to Appoint Lt. Col. Charles 
H Bonestcel as Executive Director of the European Co- 
ordinating Committee Under the Mutual Defense Assist- 
ance Act of 1040, Without Affecting His Military Status 
and Perquisites. S. Rept. 1238, 8l8t Cong., 2d sess. [To 
accompany S. 2011] 2 pp. 



(Continued on page 653) 



631 



Attack Against USIE Work at Praha Protested 



UNFOUNDED ATTACK BY IVAN ELBL 

{Released to the press April 12] 

Following is the text of a note transmitted today bp 
the United States Embassy in Praha to the Czechoslovak 
Ministry of Foreign Afairs. 

The American Embassy presents its compli- 
ments to the Czechoslovak Ministry for Foreign 
Affairs and has the honor to refer to tlie statement 
of Mr. Ivan Elbl, a former employee of the Em- 
bassy, which was distributed by the official Czecho- 
slovak News Agency and appeared in all Praha 
IDapers on April 12. 

As the Ministry was informally advised at the 
time, Elbl was arrested by Czechoslovak security 
organs on the morning of April 6 and, so far as 
the Embassy is aware, was not released until the 
afternoon of April 7. It is obvious that this fact 
raises serious question as to the validity of the 
Elbl statement. 

In his statement, Elbl makes various comments 
regarding the direction and activities of the United 
States Information Service library, material avail- 
able there, and persons who patronize the library. 
As the Ministry is aware, the library and its fa- 
cilities are open to the general public on a non- 
discriminatory basis and its books, films, and other 
materials are used by and loaned not only to in- 
dividual Czechoslovak citizens but also to Czecho- 
slovak officials and semi-official organizations. 
The Czechoslovak police and censorship au- 
thorities are fully and currently aware of the ma- 
terial in the library, and nothing is available there 
to which they express objection. In fact, the 
Ministry is aware from the Embassy's yet un- 
acknowledged note no. 106 of December 30, 1949,^ 
protesting against the official censorship suppres- 
sion of certani issues of the daily language bulletin 
of the United States Information Service, this 
bulletin is censored by Czech authorities and ap- 
proved by them before it is allowed to be 
distributed. 

In his statement, Elbl expresses the opinion 
that "either this honorable road — the road with 
the people not only of our republic, but with peace- 
loving people of the whole world — or the road 
against peace, the road of treason in conjunction 

' Not printed. 



with the mortal enemies of mankind, who today 
are represented by American imperialism. There 
is no other road either for me or for my other 
fellow citizens in similar services with capitalist 
representative officers and institutions." 

As the American Embassy operates in Praha 
on the basis of diplomatic relations existing be- 
tween Czechoslovakia and the United States Gov- 
ernments under the established principles of inter- 
national law, it is indeed surprising that the official 
Czechoslovak News Agency would distribute and 
the official organ of Czechoslovak Communist 
Party and other officially sanctioned newspapers 
would publish a statement which in effect accuses 
any Czechoslovak citizen employed by the Ameri- 
can Embassy of being a traitor to his country. 

In the light of the above, the Embassy expresses 
surprise at the official distribution and publication 
of the Elbl statement and requests that the Czecho- 
slovak Government promptly: 

1. Give comparable publicity to an official state- 
ment correcting the inaccuracies and unwarranted 
implications of the Elbl statement, and 

2. Convey to the Embassy assurances that in 
accordance with established international proce- 
dure, the Czechoslovak Government has no objec- 
tions to the employment by the Embassy of 
Czechoslovak citizens, does not consider them 
traitors to their country, and will not discriminate 
against them or otherwise penalize them because of 
their employment by the Embassy. 



DETENTION OF FORMER EMPLOYEES 
BY SECURITY POLICE 

{Released to the press April 141 

The events of the past few days clearly indicate 
that the Czechoslovak Government in dealing with 
former employees of the American Embassy in 
Pralui has launched a propaganda attack against 
the Embassy designated to discredit the United 
States Information Service in Czechoslovakia in 
its efforts to promote cultural exchange and 
friendly understanding. 

The attack first took the form of widely dis- 



632 



Department of State Bulletin 



seminated statements attributed to two former em- 
ployees of the Embassy. These statements jiave 
an altogether false inijiression of the operations 
and functions of the United States Information 
Service. The employees resigned and issued the 
statements oidy after a period of detention by the 
security police. 

Thereafter two other employees, who had been 
in the hands of the security police for approxi- 
mately 1 month, were placed on trial and report- 
edly sentenced to long terms of imprisonment on 
charges of espionage and subversive activities 
under the direction of the Embassy's press attache, 
Joseph C. Kolarek. 

The trial itself may be considered to constitute 
an indictment by the Czechoslovak Government, 
for its own purposes, of the Embassy and the 
United States cultural and information activi- 
ties — activities departing in no way from those 
which nations are accustomed to regard as a 
normal and legitimate function in diplomatic rela- 
tions and in the maintenance of friendly contact 
between countries throughout the world. 

This deliberately planned propaganda attack 
against the United States Information Service is 
viewed with grave concern by the United States 
Government and the American people, since it 
raises doubts concerning the desire of the Czecho- 
slovak Government to continue cultural ties and 
the free exchange of information between the 
people of Czechoslovakia and the peoples of other 
countries. 

The aim of the United States Information 
program is to present a true and accurate picture 
of the United States to the people of the world, 
on the assumption that international cooperation 
arises from mutual understanding. The activities 
of the United States Information Service have 
been developed for the purpose of furthering 
mutual understanding between nations through 
the free exchange ot information and cultural 
materials as a road to peace. The present govei-n- 
ment of Czechoslovakia now takes steps indirectly 
to denounce these activities contributing to inter- 
national accord in spite of the repeated profes- 
sions of that government in behalf of world peace. 

The people of Czechoslovakia have always 
sought to maintain close cultural contacts with 
many countries including the United States. 
They have demonstrated their continued desire 
to do so by their spontaneous and sustained inter- 
est in utilizing the United States Information 
Service facilities in Czechoslovakia. In the past, 
the Czechoslovak Government itself has expressed 
support in principle of the United Nations pro- 
grams fostering greater cultural exchange and 
freedom of information. 

During the Nazi occupation of Czechoslovakia, 
its people were deprived of their traditional cul- 
tural links with the outside world. After the war, 
they were anxious to renew these contacts. It is 
hoped that the present Government will refrain 



from taking steps which would circumscribe still 
further the opnortimities of Czechoslovakia to in- 
crease the understanding of the United States. 
The United States Government is reluctant to be- 
lieve that the Czechaslovak authorities would 
willfully .set out to lead the Czechoslovak people 
into the type of cultural isolation to which they 
were condemned during the last war. 



German Lawmakers Visit U.S. 



The Department of State announced on April 
14 that 13 members of the Bundestag (lower house 
of Parliament) of the German Federal Republic 
are scheduled to arrive in Wasliington on April 
18 from Bonn for a month's tour and study of the 
United States under the auspices of the Depart- 
ment's exchange progi-am which is designed to 
offer first-hand observation of American demo- 
cratic processes.^ It marks the first visit of 
German federal lawmakers to this country since 
the war. 

The Bundestag members will remain in Wash- 
ington approximately 15 days observing the 
United States Government in action, then leave for 
a tour of the nation, to include such points as the 
TVA, Detroit, New York City to study city gov- 
ernment and the United Nations headquarters, 
Harvard University, and Albany, N.Y., to study 
state government. 

The nation-wide tour will be under the direc- 
tion of the Governmental Affairs Panel of the 
Commission on the Occupied Areas of the Ameri- 
can Council on Education. This panel is com- 
posed of outstanding American political scientists. 



Visit of Turkisli Educator 



Emin Hekimgil, chief of the Foreign Cultural 
Affairs Division of the Ministry of National Ed- 
ucation, and General Secretary of the Turkish 
National Commission for Unesco. has arrived in 
Washington for a brief visit after spending a few 
days in New York. 

The purpose of his trip, which has been made 
possible through a grant-in-aid awarded by the 
Department of State, is to visit a series of cities to 
observe universities, colleges, and schools and to 
confer with colleagues in his field. He is especially 
interested in teachers' training colleges and in the 
fields of adult and audiovisual education. 



' For the itinerary of the group and for biographic 
sl£etches of the members of the gronp, see Department of 
State press release 364 of Apr. 14, 1950. 



April 24, 1950 



633 



Habana Charter for an International Trade Organization 



EMPLOYMENT AND ECONOMIC ACTIVITY 

Chapter II 

Chapter II establishes principles that members 
will follow in their attempts to maintain a high 
level of employment in all countries. The basic 
principle is that each member will solve its own 
employment problem, and in so doing, it will try 
to avoid measures that create unemployment for 
other countries. This principle was expressed in 
the original United States Proposals of December 
1945, in these words : 

Every country will seek so to manage its own affairs that 
its business life will be free from violent depressions. 
The object of international action should be to insure 
that these national efforts reinforce each other and do not 
cancel out. 

National Policies 

The core of this chapter is article 3 which says 
that each member shall take action designed to 
achieve — 

full and productive employment . . . through measures 
appropriate to its political, economic and social 
institutions. 

Such measures must be consistent with the char- 
ter principles and must seek to avoid balance-of- 
payment difficulties for other countries. Accept- 
ance of these principles by many countries, coupled 
with their expressed determination to put these 
principles into operation, represents a significant 
step toward avoiding world unemployment. 

Each member is the judge of the specific meas- 
ures that it will take to carry out these commit- 
ments. Each member is free to choose only those 
measures that, in its opinion, are appropriate to its 
own institutions. The United States will meet its 
obligations under article 3 primarily through the 
United States Employment Act of 1946. This act 
expresses our domestic policy "to promote maxi- 
mum employment, production and purchasing 

Editor's Note: In this and succeeding issues of the 
Bui-LKTiN will appear summaries of the various chapters 
of the charter for an Ito. 



power" in a manner calculated "to foster and pro- 
mote free competitive enterprise" and taking into 
account the "needs and obligations and other con- 
siderations of national policy." Among these 
"obligations" are those under the United Nations 
Charter (arts. 55 and 56), whereby members 
"pledge themselves to take joint and separate 
action" to "promote higher standards of living, 
full employment, and conditions of economic and 
social progress and development" ; and under the 
articles of agreement of the International Fund 
(art. 1) whereby members agree to the objectives 
of "orderly exchange arrangements among mem- 
bers," and "the expansion and balanced growth of 
international trade ... to contribute thereby to 
the promotion and maintenance of high levels of 
employment." 

Balance-of-Payment Measures 

The other provisions of this chapter refer 
chiefly to action by individual members; a few 
I'elate to action by the Ito. Among the principal 
undertakings by members are the following. If 
a member persistently exports more than it im- 
ports, and if this is significantly related to the 
fact that another member is having balance-of- 
payment difficulties which make it difficult for 
the other member to maintain full emplo3'ment, 
the first member must make its "full contribution" 
and the other member must take "appropriate ac- 
tion" to correct the situation (art. 4). This 
means, in effect, that the exporting and the im- 
porting countries will work together to solve their 
balance-of-payment problem. Each is the judge 
as to the specific steps that it might take but both 
are committed to the principle of a cooperative so- 
lution. 

For example, the exporting country might lower 
its tariff rates to stimulate imports; or it might 
refrain from export subsidies, if any ; oi- it might 
vote in the International Fund that the other 
country has a balance-of-payment difficulty which 
would entitle the other country under the charter 
to impose import quotas; or it might vote in the 
International Fund to permit the other country 



634 



Department of Stale Bulletin 



to adjust its exchange rates to correspond with 
tlie actual purchasing power of its currency. Also, 
the exporting country could refuse to do these 
things if it felt that the importing country was 
not taking "appropriate action'' to solve its own 
financial problems. In general, it is desirable to 
try to solve these balance-of-paymcnt problems by 
increasing imports rather than decreasing exports, 
since the latter method shrinks trade and causes 
unemployment. Nothing in this article would re- 
quire this Government to impose export quotas, 
or to finance imports, or to lend funds to other 
countries to sustain our exports, or to engage in 
"governmental planning." 



Chapter I. Purpose and Objectives 

Article 1 

Recognizing the determination of tbe United Na- 
tions to create conditions of stability and well- 
being which are necessary for peaceful and friendly 
relations among nations, 

The Parties to this Charter undertake in the 
fields of trade and employment to co-operate with 
one another and with the United Nations 

For the Purpose of 

Realizing the aims set forth in the Charter of the 
United Nations, particularly the attainment of the 
higher standards of living, full employment and 
conditions of economic and social progress and 
development, envisaged in Article 55 of that Charter. 

To THIS END they pledge themselves, individually 
and collectively, to promote national and interna- 
tional action designed to attain the following ob- 
jectives : 

1. To assure a large and steadily growing volume 
of real income and effective demand, to increase the 
production, consumption and exchange of goods, 
and thus to contribute to a balanced and expand- 
ing world economy. 

2. To foster and assist industrial and general eco- 
nomic development, particularly of those countries 
which are still in the early stages of industrial 
development, and to encourage the international 
flow of capital for productive investment, 

3. To further the enjoyment by all countries, on 
equal terms, of access to the markets, products and 
productive facilities which are needed for their eco- 
nomic prosperity and development. 

4. To promote on a reciprocal and mutually ad- 
vantageous basis tlie reduction of tariffs and other 
barriers to trade and the elimination of discrimina- 
tory treatment in international commerce. 

5. To enable countries, by increasing the oppor- 
tunities for their trade and economic development, 
to abstain from measures which would disrupt world 
commerce, reduce productive employment or retard 
economic progress. 

6. To facilitate through the promotion of mutual 
understanding, consultation and co-operation the 
solution of problems relating to international trade 
in the fields of employment, economic development, 
commercial policy, business practices and commod- 
ity policy. 

Accordingly they hereby establish the interna- 
tional TRADE ORGANIZATION through which they shall 
co-operate as Members to achieve the purpose and 
the objectives set forth in this Article. 



Fair Labor Standards 

Members agi-ee to cooperate with the Economic 
and Social Coimcil, the International Bank, the 
International Fund, and the International Labor 
Ollico in connection with the functions which their 
charters set for them, since all of their activities 
have a bearing on the employment problem. Mem- 
bers recognize the importance to all of them that 
each should maintain fair labor standards, par- 
ticularly in production for export. Wlien dif- 
ferences of opinion concerning fair labor stand- 
ards are brought to the Ito, the latter must co- 
operate with the International Labor Organiza- 
tion. This fair labor provision will contribute, 
in some measure, to raising foreign labor stand- 
ards more nearly to our level, thereby promoting 
a fairer basis of trade competition. Members 
also agree to cooperate with the Economic and 
Social Council in the collection of statistics, in 
the making of employment studies, and in con- 
sultation with each other or with other inter- 
national agencies concerning emploj'ment ques- 
tions. 

Safeguards 

The Ito has no direct function, under this chap- 
ter, to insure full employment. It does have an 
important responsibility to determine whether or 
not a member may use various safeguards under 
other provisions of the charter (especially in chap- 
ters IV and VIII) to protect its economy in case 
of severe depressions when other countries fail 
to meet the employment objectives of chapter 
II. The procedure would be as follows. If a 
member feels that benefits accruing to it under the 
employment chapter are being nullified by the 
existence of a particular situation, such as a de- 
pression, it may (after consultation with the mem- 
bers concerned) request the Ito for a "satisfac- 
tory adjustment'' of the matter (art. 93). 

Wlien the Ito acts upon the request, it must 
take account of the member's need to take action 
within the provisions of the charter to safeguard 
its economy, and it must give special consideration 
to the effect upon a member of a loss of its export 
market in other countries through a depression 
(art. 6). The charter does not say that a depres- 
sion exempts a member from its charter obliga- 
tions. It says that the Ito, in applying the 
safeguard provisions of the charter, must take 
into consideration the actual effects of the depres- 
sion. It would hardly be practicable to do other- 
wise. The Ito would then decide (by majority 
vote) whether or not to permit the applicant 
member to utilize certain safeguard provisions of 
the charter. Among these safeguard provisions 
are the following : 

1. Release from obligations or the grant of con- 
cessions to other members "to the extent and upon 
such conditions as it [the Ito] considers appro- 
priate and compensatory, having regard to the 



April 24, 1950 



635 



benefit which has been nullified or impaired" (art. 
95 (3)). 

2. Permission to use import quotas (art. 21) if 
the Ito, after consultation and agi-eement by the 
International Fund, finds that the applicant mem- 
ber is in imminent danger of a loss of monetary 
reserves, or is in balance-of -payment difficulties. 

If the Ito authorized an applicant member to 
utilize charter safeguards, because other members 
suffering from a depression had not met the char- 
ter employment objectives, the Ito would not have 
legal authority to require the depression members 
to change their employment policies. The Ito 
would have legal authority onlv to permit the 
applicant meniber to utilize safeguards to pro- 
tect itself against the depression influences of 
those members. If the applicant member utilized 
safeguard provisions to impose quotas or higher 
tariffs, the depression members, if they considered 
themselves injured by such action, would be free 
to leave the Ito after GO days notice. 

Exchanging Information 

The Ito has certain other functions under chap- 
ter II. Among these are : to initiate consultation 
among members with a view to arriving at con- 
certed measures to check an international depres- 
sion; to facilitate among members the exchange 
of information and views concemiiig employment 
questions; to cooperate with the Economic and 
Social Council in collecting statistics, making 
studies, and consulting on employment matters; 
and when disputes regarding labor standards are 
referred to it, to cooperate with the International 
Labor Office. 



ECONOMIC DEVELOPMENT 
AND RECONSTRUCTION 

Chapter III 

Chapter III contains measures to promote the 
economic development of the underdeveloped 
countries and of the war-devastated countries. A 
procedure is established for members, in the in- 
terests of economic development and recon- 
struction : 

(1) To cooperate in the exchange of "capital 
funds, materials, modem equipment and tech- 
nology, and technical and managerial skills." 

(2) To obtain limited release from their com- 
mitments under the charter and under trade agree- 
ments made in connection with the cliarter for 
example, the General Agreement on Tariffs and 
Trade (Gatt), on individual products, subject to 
certain safeguards. 

(3) To make new preferential agreements cov- 
ering individual products, subject to certain safe- 
guards. 



There are no provisions in Gatt concerning the 
exchange of facilities for economic development, 
but article 18 of Gatt has a release procedure for 
purposes of economic development that resembles 
the charter procedure. 

Cooperation in Exchange of Capital Funds, 
Materials, Technology, etc. (Arts. 8-12) 

First, all members agree, in principle, to co- 
operate within the limits of their power 

in providing or arranging for the provision of capital 
funds, modern eciuipment and technology, and technical 
and managerial sliills. 

This provision does not mean that a member obli- 
gates itself specifically to supply capital or equip- 
ment to an underdeveloped country, nor that the 
underdeveloped member obligates itself specifi- 
cally to accept capital or equipment from the 
capital-investing countries. In fact, amendments 
to this effect were specifically rejected at the 
Habana conference. It does mean that members 
will cooperate to the best of their ability to work 
out common solutions to such problems in a way 
that will be advantageous to all parties. Each 
member is the judge of the actual steps that it 
might consider practicable in carrying out this 
principle. Second, members that possess capital, 
equipment, and technology undertake not to im- 
pose "unreasonable or unjustifiable impediments" 
to prevent other members from obtaining such 
facilities "on equitable terms." Third, members 
that accept such facilities agree not to take "un- 
reasonable or unjustifiable action" injurious to 
the countries that supply such facilities. Fourth, 
the Ito may recommend bilateral or multilateral 
agreements to implement in greater detail these 
principles. Such agreements must assure "just 
and equitable treatment" for the facilities brought 
from one member to another. Such agreements 
must give "due regard to the needs of all mem- 
bers," i. e., to both the country that supplies and 
the one that receives such facilities. Each mem- 
ber is the judge as to whether it will enter sucli an 
agreement. 

Additional commitments pertain to foreign in- 
vestments. The receiving country has the right 
to prescribe "on just terms" requirements as to 
ownership of existing and future foreign invest- 
ments and to insure that such investments are not 
used to interfere in its internal affairs. The "just 
terms" phraseology of the charter parallels the 
"just compensation" of the fifth amendment of the 
United States Constitution. Sovereign countries, 
including the United States, have always insisted 
upon the right of determining requirements of 
ownership as an essential element of tlieir sover- 
eignty. The country receiving foreign invest- 
ments obligates itself to give "adequate security 
for existing and future investments" and to give 
"due regard to the desirability of avoiding dis- 
crimination as between foreign investments." 
This article does not guarantee American invest- 



636 



Department of State Bulletin 



ments freedom from expropriation, nor full con- 
vertibility of compensation in case of expropria- 
tion (as we would like). The article, however, 
represents an advance over the existing situation 
for it requires all members — including those which 
have held that a foreign investor had no right of 
appeal beyond the courts of the country where the 
investment was located — to ^ve "adequate se- 
curity for existing and future investments." Un- 
der this article an appeal could be taken to the 
Ito, and if the Ito decides that the commitment 
was violated, other countries would be free to 
withdraw tariff concessions and other charter ben- 
efits from the offending country. An appeal on 
legal issues might be carried to the International 
Court of Justice. There is thus provided for the 
first time the right to bring before an international 
tribunal cases involving the treatment of Ameri- 
can investments abroad. The foregoing commit- 
ments on foreign investments are minimum stand- 
ards. Members, if they wish, may make bilateral 
or multilateral agi'eements to implement these 
commitments in more specific terms. 

Another provision of interest to underdevel- 
oped countries is that the Ito, at the request of a 
member, may study that member's resources and 
may give it technical advice concerning particular 
projects of economic development. Such advice 
would be at the request of a member, on terms 
agreed upon between the Ito and the member, and 
the cost would normally be borne by the member. 

Release From Charter Commitments 
on Individual Products 

The charter establishes a release procedure 
whereby a member may obtain on individual prod- 
ucts limited releases from its Gatt and charter 
obligations for purposes of economic development 
and reconstruction. This release procedure con- 
tains safeguards so it will not be used in such a 
way as to nullify the charter goal of an over-all 
reduction of world trade barriers. 

General. — The release procedure differs as to 
whether or not it relates to a product already in- 
cluded in a trade agreement made under charter 
auspices (e. g., Gatt). 

If the product has been included in a trade 
agreement, the Ito may grant a release only after 
obtaining the "substantial agreement" of all mate- 
rially affected" members that are parties to the 
trade agreement. 

If the product has not been included in a trade 
agreement, the Ito must grant a release from char- 
ter obligations (e.g., permission to impose quotas) 
if it decides that the application falls in a certain 
category and meets certain prescribed conditions 
(art. 13 (7) ). Otherwise, it must grant a release 
if all affected members agree ; and it may grant a 
release if a "materially affected" member objects, 
but only after special investigation of the effects 
of the measure on international trade and on the 
standard of living of the applicant. 



If the release is on a product in a trade agree- 
ment, other members parties to the trade agree- 
ment, after consultation with Ito (and if Iro does 
not disapprove), may withdraw substantially 
equivalent concessions from the applicant mem- 
ber. If the release is on a product not in a trade 
agreement, the compensatory adjustment might 
be reached either in direct negotiation between the 
applicant member and the materially affected 
members, or it might be fixed bv the Ito in deter- 
mining the conditions of the release. 

In all cases, the nature and duration of the re- 
leases must conform either to the agreement 
reached between the applicant member and the 
materially affected members or to the limitations 
imposed by the Ito in granting the release. 

Form of Release Procedure (art. 13) . — A more 
detailed explanation of the release procedure 
follows : 

(1) If the product is already included in a trade 
agreement concluded under Charter auspices : 

(a) and if the applicant member wants to 
raise its tariff rate ou the product in question (the 
tariff increase not being forbidden by the charter 
unless it violates a trade agreement), it must ob- 
tain the prior consent of either 

(i) all the other parties which have con- 
tractual rights in the concession in question under 
that trade agreement; or 

(ii) the Ito, which may grant the release 
(acting by simple majority vote, on a time sched- 
ule fixed by consultation between the Ito and the 
applicant) only after the Ito has determined from 
among the parties that have contractual rights in 
the concession in question, those that would be 
"materially affected" by the proposed measure, 
and only after "substantial agreement" has been 
reached by those "materially affected" members, 
and only in accordance with the terms that the 
"materially affected" members have agreed upon 
in their negotiations to reach "substantial 
agreement" ; 

(b) but, if the applicant member wants to 
impose an import quota on the product in question 
(import quotas being prohibited by the charter, 
except in certain circumstances specifically indi- 
cated), it must obtain the prior consent of the Ito, 
under the same procedure as described under (a), 
(ii) above and subject to the additional require- 
ment that the Ito must give adequate opportunity 
for all Ito members that it considers to be "ma- 
terially affected" by such action to express their 
views. 

(2) If the product is not included in a trade 
agreement concluded under charter auspices: 

(a) and if the applicant member wants to 
raise its tariff rate on the product in question, it 
may do so without having to obtain the consent 
of either the Ito or its membere, because tariff 
increases per se are not prohibited by the charter; 



April 24, J 950 



637 



(b) but if the applicant member wants to im- 
pose an import quota on the product in question, 
it must obtain the prior consent of Ito (acting by 
simple majority vote, within 90 days of the appli- 
cation unless the period has been extended by con- 
sultation with the applicant member). The Ito 
procedure in arriving at a decision differs accord- 
ing to the nature of the case : 

(i) if the Ito decides (by simple majority 
vote) that the application falls in any of the fol- 
lowing categories, it "shall grant the necessary re- 
lease for a specified period." These categories 
include : measures to protect a simple industry es- 
tablished between January 1, 1939 and March 24, 
1948 ; measures to promote an industry for proc- 
essing local raw materials of w'hich exports have 
been reduced as a result of foreign restrictions; 
measures to promote an industry for processing 
local raw materials that might otherwise be wasted, 
when such action is unlikely to have a harmful 



Why Is an ITO Needed? 

Before World War II, international trade was 
hampered by restrictive devices that prevented an 
expansion of world trade. Countries resorted to 
unilateral action without regard to the effect of 
their actions on the economies of other nations, 
which led to retaliation and resulted in economic 
warfare. At the end of World War II, the economic 
situation of a large part of the world was in chaos. 
Destruction of the tools for peacetime production 
meant lack of the most basic supplies for domestic 
consumption and in many areas virtually no goods 
for export were available which could be traded for 
essential items obtainable only from abroad, and 
particularly from the United States. 

As a result, most countries adopted even more 
rigid governmental controls to insure that only 
the most necessary imports were bought with the 
fast diminishing foreign currency available to them. 
They employed import quotas, foreign exchange 
controls, import licensing systems, discriminatory 
bilateral and barter deals, state-trading devices, 
tariff increases, and other restrictive devices. 

The Ito seeks, by cooperative agreement, to relax 
these barriers, to avert economic warfare, and to 
pave the way for an expansion of world trade. 



effect in the long run on international trade; the 
measures must not be more restrictive of inter- 
national trade than any other measures permis- 
sible under the charter and the measures must be 
suitable in view of the applicant's need for eco- 
nomic development or reconstruction. Moreover, 
there are certain other limitations applicable to 
this category of measures. The Ito must not 
concur in such measures if they are likely to cause 
serious prejudice to the exports of a primary com- 
modity on which the economy of another country 
is highly dependent. The particular release 
granted by Ito is not renewable at the end of the 
initial period under this provision, i.e., it could 
be renewed only under procedure (ii) below. 
Also, the applicant member must apply these 



measures "in such a way as to avoid unnecessary 
damage to the commercial or economic interests 
of any other member" ; 

(ii) if the application does not fall in the 
above category, the Ito must consult all "ma- 
terially affected" members. If all "materially af- 
fected" members agree, it must grant the release ; 
or if any "materially affected" member objects, the 
Ito must examine the proposed measure in the 
light of its long-run effect on international trade 
and on the standard of living of the applicant 
member. The Ito may then release the member, 
subject to such limitations as it may impose. 

Transitional Measures (art. H). — Whereas 
article 13 sets up procedures whereby a member 
may seek Ito ajiproval for proposed new measures 
for economic development and reconstruction 
(which would otherwise be prohibited under the 
charter), article 14 establishes a transitional pro- 
cedure for seeking approval for existing meastires 
for economic development and reconstruction 
which members have in effect when they join the 
Ito (and which would otherwise be prohibited un- 
der the charter) . Generally speaking, such meas- 
ures, as regard products vtpon which tariff conces- 
sions have not been made under Gatt, may be con- 
tinued in effect if they are nondiscriminatory and 
if advance notice is given — but they are subject to 
a kind of post-audit of Ito, i.e., they are subject to 
i-eview and possible disapproval by Ito on the 
same basis as though the request had been sub- 
mitted as a new measure under article 13. The re- 
view and decision by Ito must be given within 12 
months after a member enters the Ito (except if 
the permission had already been granted by the 
Gatt contracting parties, the charter says that 
the Ito may review the decision if it desires, but 
it does not specify a time limit for the review). 
If the Ito renders an adverse decision, the appli- 
cant member is obligated to withdraw the pro- 
tective measure ( allowance being made for a period 
of time in which to make the modification or 
withdrawal). 

This special transitional procedure of article 14 
may be used only for products upon wliich no 
concession has been granted under Gatt. If a 
member had granted a concession on the product 
under Gatt, it wovild not be allowed under the 
charter to retain, for purposes of economic de- 
velopment, protective measures on that product 
which are prohibited by the charter (such as im- 
port quotas for development purposes). The 
United States is not substantially affected by this 
article, and we have not submitted to the Gatt 
contracting parties any list of protective meas- 
ures that, although in conflict with the charter, 
we wish to retain for development purposes. 

New Preferential Agreements 
on' Individual Products 

Members may make new preferential agree- 
ments on individual products for purposes of eco- 



638 



Department of Stale Bulletin 



What Will the ITO Cost? 

Tlie cost of Ito will be small because the only 
exiH'iise will be for administrative purposes. It is 
neither provided nor intended that Ito shall have 
funds for lending to Its members or for any other 
similar purposes. 

From the standpoint of dollars and cents, Ito will 
yield returns niany times greater tliiin its cost to 
the United States. The Iro will (a) benefit directly 
those brandies of American agriculture and in- 
dustry that must export, (b) benefit consumers and 
consuming industries in this country that depend 
upon foreign sources for their raw materials, and 
(c) help other countries support themselves, thereby 
reducing their need for American grants and loans. 
The Ito thus offers a substantial bargain to the 
American taxpayer. 



nomic development, with the prior consent of the 
Ito, normally by a two-thirds majority vote except 
in certain cases where a simple majority vote is 
sufficient. 

The conditions under which the Ito may ap- 
prove a new preferential agreement by simple 
majority vote are as follows : 

(1) First, six conditions must be met under 
paragraph 4, as follows : The agreement must be 
between neighboring countries, or countries in the 
same economic region — the latter not being de- 
pendent upon proximity but upon the economic 
integration of the countries concerned. The pref- 
ence must be necessary to insure a sound and ade- 
quate market for the new product. If the party 
to the agreement that receives a preference should 
grant a preference to the other, as compensation, 
these preferences are subject to the same rules as 
all other preferences in the agreement. The agree- 
ment must be open to other members which may 
be able to qualify under the charter requirements. 
It must be for a definite period not longer than 
10 years, subject to renewal. The parties to the 
agreement must establish as between themselves 
either low duties or free entry for the product in 
question. 

(2) Second, assuming that the proposed agree- 
ment meets the above conditions: 

(a) if it is not likely to cause substantial in- 
jury to the export trade of another member, the 
Ito must permit the proposed agreement — pro- 
vided, however, that it is "not likely to jeopardize 
the economic position of a member in world 
trade" ; 

(b) but if it is likely to cause substantial 
injury to the export trade of another member, 
the Ito must permit the proposed agreement if 
and when the applicant member and the injured 
members reach an "agreement"; if they do not 
reach an agreement within 2 months, the Ito may 
authorize the proposed agreement and fix a "fair 
compensation" for the injured member. The in- 

hptW 24, 1950 



jured member could resort to chapter VIII if not 
satisfied with the "fair compensation"; 

(c) and, if the Ito finds that the proposed 
agreement "is likely to jeopardize the economic 
position of a member in world trade", it must not 
permit the proposed agreement unless the parties 
to the agreement have reached a "mutually satis- 
factory understanding" with the injured member. 

(3) AVhen the Ito apju-oves new preferential 
agreements by simple majority vote, it may re- 
quire as a condition of its approval a reduction 
in the unbound MFN rate if any other affected 
member considers the MFN rate excessive. (If 
an applicant member seeks to establish the prefer- 
ential margin by increasing a bound MFN rate, it 
would have to resort to article 13 (3) which re- 
quires either consent of all parties to the agreement 
or consent of Ito after obtaining "substantial 
agreement" from till "materially affected" parties 
to the agreement.) 

(4) If the Ito finds that parties to a prospective 
preferential agreement have obtained the consent 
to make such an agreement from countries that 
supplied at least two-thirds of their imports be- 
fore November 21, 1947, the Ito must authorize 
the agreement, unless it finds that the exports of 
a member that has not given its consent are 
threatened with "substantial injury," in which case 
the Ito may grant the consent only if the appli- 
cant and the injured member reach an understand- 
ing or, in the absence of an understanding, if the 
Ito grants "fair compensation" to the injured 
member. 



U.N. Documents: 

A Selected Bibliography^ 

Economic and Social Council 

United Nations Appeal for Children. Report of the Sec- 
retary-General. E/1589, January 17, 1950. 14 pp. 
mimeo. 

Proceeds of Sale of UNRRA Supplies. Report of the 
Secretary-General. E/1590, January 17, 1950. 48 pp. 
mimeo. 

Trade Union Rights (Freedom of Association). Com- 
munication from the Director General of the Interna- 
tional Labour Office. E/1595, January 27, 1950. 
6 pp. mimeo. 

' Printed materials may be secured in the United States 
from the International Documents Ser\'lce, Columbia Uni- 
versity Press, 2960 Broadway, New Tork 27, N.Y. Other 
materials (mimeographed or processed documents) may 
be consulted at certain designated libraries in the United 
States. 

The United Nations Secretariat has established an Offi- 
cial Records series for the General Assembly, the Security 
Council, the Economic and Social Council, the Trusteeship 
Council, and the Atomic Energy Commission ; which in- 
cludes summaries of proceedings, resolutions, and reports 
of the various commissions and committees. Publications 
in the Official Records series will not be listed in this 
department as heretofore, but information on securing 
subscriptions to the .series may be obtained from the In- 
ternational Documents Service. 

639 



Aspects off International Petroleum Policy' 



Stated most generally, the Department of 
State's interest in petrolemn derives from its re- 
sponsibilities for the conduct of our foreign rela- 
tions. Oil is essential to the economic well-being 
of most countries. The value of oil moving in in- 
ternational trade exceeds that of any other com- 
modity. Oil enters into our foreign trade, both on 
the import and export side. In an emergency, as- 
suming no material change in domestic supply and 
demand, we shall need large quantities of oil pro- 
duced outside of the United States. 

Oil production is of predominant significance to 
certain countries and areas, notably Venezuela and 
the Middle East. Its development and sale ac- 
counted for 26 percent of the total direct United 
States private foreign investment existing abroad 
at the end of 1948 and for 75 to 80 percent of such 
new investments made in the past 3 years. It is on 
the operations and investments of oil companies 
that the economic development of the oil-produc- 
ing areas largely depends. 

Even if there were no American company inter- 
est in the large and important foreign oil indus- 
try, petroleum would, nevertheless, affect foi'eign 
relations and, therefore, be of interest to the De- 
partment. It is even more the case because 
American oil companies have such extensive and 
widespread interests in all phases of the foreign 
oil industry. The relations of American oil com- 
panies in producing countries are usually with 
governments, and their marketing operations are 
extensively subject to decisions by foreign gov- 
ernments affecting imports and sales. 

In a very real sense, therefore, oil and the opera- 
tions of oil companies affect foreign relations. 
And in view of the complex and interrelated na- 
ture of the international oil trade, any significant 
action affecting the foreign or domestic activities 
of the United States oil industry has extensive 
economic repercussions upon our foreign economic 
and political interests. 

As this general statement is illustrated by my 
later comments on specific points of your inquiry, 

' Substance of a statement made liy Willard L. Thorp, 
Assistant Secretary for Economic Affairs before the spe- 
cial subcommittee on petroleum of the House Committee 
on Interstate and Foreign Commerce on Apr. 5, 1050, ami 
released to the pnjss on the same date. 

640 



I shall not discuss it further in my prepared state- 
ment. An elaborate presentation of pertinent facts 
has been set forth previously, particularly in the 
publication "Oil Concessions m Foreign Coun- 
tries," - in the hearings in June 1945 pursuant to 
Senate Resolution 36 concerning "American Pe- 
troleum Interests in Foreign Countries," and in 
my later statement on February 5, 1948, before , 
the Petroleum Subcommittee of the House Com- 
mittee on Armed Services. 

I might say before leaving this point that the 
Department's necessary interest in the foreign as- 
pects of American oil operations, and in the effect 
on our foreign relations of decisions regarding 
petroleum, should not be interpreted, as it some- 
times seems to be, as an indication of a lack of 
interest in the domestic industry. That is not the 
case. We believe, however, it is essential that our 
position on oil questions, as on other questions, be 
based on the total national interest which is fre- 
quently a broader concept than the special interests 
of particular segments of the United States econ- 
omy. We also believe that American concerns op- 
erating in foi'eign areas are no less American 
because they operate abroad. Both as corpora- 
tions and as employers of American citizens, their 
example, their activities, and their contributions 
to industrial development and economic well-being 
abroad may be more influential in promoting a 
democratic way of life and free enterprise than 
any governmental actions. American business 
interests abroad, of which the United States petro- 
leum industry is the largest, deserve and should 
receive the strong support of the Government. 

It seems to me that I might speak briefly on 
the extent, location, and importance of the foreign 
oil interests of American nationals, on the closely 
related import and sterling-dollar oil problems, 
and finally on the proposal to establish a Petroleum 
Policy Council. 

Extent, Location, and Importance of American 
Petroleum Interests in Foreign Countries 

Outside of tiie United States and Russia, the 
inijiortant oil producing areas are Venezuela, the 
Middle East, and Indonesia. Mexico also produces 

■ H. Doc. 07, GSth Cong., 1st soss. 

Department of State Bulletin 



a substantial amount of oil, and Canada is poten- 
tially very promisin<^. 

United States companies produce roughly two- 
thirds of Venezuela's output, about 45 percent of 
the Middle East output, and about 38 percent of 
the output in Indonesia. They have a substantial 
interest in the Canadian developments but rela- 
tively minor interests in Mexico at this time. In 
1949, they produced about 50 percent of the oil 
produced outside of the United States and Eastern 
Europe. According to a recognized authority, they 
controlled at the beginning of 1949 reserves of 
about 71-2 billion barrels in South America, 10 
billion in the Middle East, and probably 1 billion 
barrels elsewhere. The total is undoubtedly higher 
today. It is equivalent to about 45 percent of the 
world total outside the United States and slightly 
less than the total proved reserves of the United 
States. 

American companies distribute about 40 percent 
of the oil sold abroad. In production, refining, 
and distribution facilities they had invested over 3 
billion dollars abroad by the end of 1948. Over 
500 million dollars was invested each year in 1947 
and 1948, and probably as much in 1949. The flow 
of new capital and the dollar payments for oil I'oy- 
alties and wages have been highly important in 
supporting and developing the economic life in the 
producing areas. They have made possible, or the 
companies have been directly responsible for, con- 
struction of harbor facilities, roads, railroads, hos- 
pitals, schools, agricultural development, and 
health and sanitation projects. 

In the strategically located Middle East, the 
United States has an important interest in a con- 
tinuing political and economic stability. Political 
stability is to a large degree dependent on the 
economic well-being of the area. The general eco- 
nomic well-being depends in turn largely on oil 
operations in which American companies have 
extensive interests. In Latin America, our oil 
companies have close at hand the additional oil 
which other witnesses before other committees 
have testified would be needed in an emergency. 
At the same time, oil operations in Venezuela have 
made possible not only a high level of trade with 
the United States (I/2 billion dollars worth of 
United States exports last year) but have been 
an outstanding example of the merits of free en- 
terprise working in a free economy. It would be 
substantial loss in a commercial, political, and 
strategic sense and seriously harmful to our na- 
tional interest if the overseas petroleum operations 
of American companies should be seriously cur- 
tailed. 

Oil Imports 

The question of oil imports naturally raises some 
issues which are not easily resolved. The oil in- 
dustry is one in which imports and exports have 
been an important factor in its growth and devel- 

April 24, 7950 

882807—50 3 



opmenl, anil few would question that imports have 
a place in our oil economy. What seems to be at 
issue is their ai)propriate level. But in ccmsider- 
ing this question, it is frequently overlooked that 
the bulk of our oil imports are drawn from the 
foreign operations of American oil companies, who 
have American stockholders, pay United States 
taxes, employ American personnel, buy substan- 
tia! quantities of American equipment, require 
militarily important tankere, and own crude oil 
reserves and facilities ovei-seas from which large 
supplies of oil were drawn in the last emergency 
and would be drawn in anot lier emergency. These 
overseas interests of American oil companies are 
a decided national asset and are a matter of con- 
cern to the Department. 

Until December 1948, when both domestic pro- 
duction and imports reached their highest levels 
up to that time, it is not believed that oil imports 
had constituted any problem. Demand had sub- 
stantially outstripi)ed supply during the war 
years, and it took time for production to catch 
up. Even as late as (he winter of 1947-48, we had 
an oil shortage in this country. But during 1948 
production finally overtook clemand, large quan- 
tities of oil went to increase stocks, and, early in 
1949, the first production cuts were put into effect. 

The Department of State has no doubts about 
the need for a strong and active domestic oil in- 
dustry. The Department would cooperate fully 
in measures necessary to prevent serious injury 
should imports threaten the domestic industry. 
But after considerable study of this problem over 
the past 18 months, the Department is unable to 
conclude that the domestic industry has been seri- 
ously injured bj imports to date or is threatened 
with serious injury by those expected in the near 
future. 

The facts, as we understand them, are that, de- 
spite a reduction in domestic production, the petro- 
leum industry was operating in 1949, and will be 
in 1950, at a very high level, generally second only 
to the exceptional levels of 1948 and even in excess 
of those levels in some of the most important re- 
spects indicative of the industry's vigor and well- 
being. 

Despite a reduction of 8.4 percent in domestic 
production in 1949 compared to 1948 (or a decline 
of 11.3 percent from the peak level of December 
1948), the 1949 output was 50 percent above the 
1935-39 average. It was about equal to the 1947 
output, which was the second highest annual pro- 
duction in United States history and which, at 
the time, was considered a very successful record. 
It is frequently overlooked in making comparisons 
with 1948 that stock additions in that year were 
nearly 300,000 barrels daily, or more than 5 per- 
cent of production. Stockbuilding was necessary 
at the time but could not have been expected to 
continue indefinitely. In 1949, there was a small 
decline in stocks in contrast to the substantial addi- 
tions in the previous year. In 1949, when produc- 

641 



tion was 466,000 barrels daily less than in 1948, 
the discontinuance of nearly 300,000 barrels daily 
of stock additions was more important in the cur- 
tailment of domestic production than imports, 
which increased only 125,000 barrels daily in the 
same period. Another factor in the decline was a 
decrease of some 40,000 barrels daily in exports. 
Notwithstanding these changes, it is probable that 
there would have been less concern about imports 
had domestic demand advanced even moderately, 
as it normally does, instead of remaining static 
as it did because of the mild winter months in 
1949 and the industrial recession in midyear. 

Notwithstanding the fact that 1949 was the sec- 
ond best rather than the best year, it is relevant to 
note what was happening in regard to some of the 
other measures of the well-being of the domestic 
industry. In regard to drilling activity, according 
to industry trade journals, 1949 was within 2 per- 
cent of the record 1948 in the number of wells 
drilled. It was in excess of any previous year in 
footage drilled and wildcat completions. The 
forecast for 1950 by the same sources indicates a 
continuance of drilling activity at approximately 
the 1949 levels. 

In the matter of prices of crude oil, 1949 was 
within 2 percent of the 1948 level, 30 percent 
above 1947, 140 percent above the 1935-39 average, 
and was the second highest year since 1920. 

In the matter of employment, according to the 
Bureau of Labor statistics, average monthly em- 
ployment of production and related workers in 
the crude oil and natural gas production industry 
in 1949 was practically the same as in 1948. In 
1949, the average hours of work and wages were 
slightly above the average of 1948. If drillers, 
rig builders, and some white collar employees; 
connected with the production of crude oil and 
natural gas are included, employment in 1949 
averaged slightly higher than in 1948. 

Profit data are not readily available for 1949 
for any large segment of the oil production branch 
of the industry. Any conclusions in regard to 
profits must therefore be based upon the returns 
of a small number of companies and upon certain 
important indices that directly relate to income. 
Costs were undoubtedly higher, but production 
having been about equal in 1949 to production in 
1947 and the crude oil price on the average hav- 
ing been about 30 percent higher in 1949 than in 
1947, income should not have fallen below and 
was probably much above the 1947 levels, which 
were then regarded as highly satisfactory and 
were well above any of the 15 previous years' 
returns to the industry. It is generally concluded, 
and the records of several companies whose re- 
turns have recently been published, support the 
view that income in 1949 was exceeded only by 
the very high levels of 1948. 

Since December 1948, partly because imports 
have been available, the United States has devel- 
oped a reserve productive capacity of nearly a mil- 



lion barrels a day, which is a security asset of con- 
siderable value, an asset which we enjoyed in pre- 
war days but did not have at the end of 1948 when 
record production was attained. 

You have certainly had it called to your atten- 
tion that the reduction in domestic production was 
substantially more severe in Texas in 1949 than 
elsewhere in the nation. Over 90 percent of the 
466,000 barrel decline was in that State alone. In 
percentages, Texas declined about 17.3 percent 
from 1948 levels; whereas, all other States as a 
group declined about 1 percent. No other State 
declined as much as Texas, and some increased pro- 
duction relative to 1948. Notwithstanding the de- 
cline, drilling activity in Texas was the highest 
since 1937, and in terms of wildcats, total footage 
and total completions were well above 1948. Em- 
ployment was higher in Texas in 1949 than in 
1948. Prices for Texas oil were virtually un- 
changed. 

The emphasis of my statement has been on the 
1949 record, which for the sake of brevity I have 
discussed in terms of averages. We are aware of 
the shortcomings of averages, but our study of 
the more detailed statistics indicates, in our view, 
that they support the conclusions we have pre- 
sented. Statistics are available for only 1 or 2 
months of 1950 regarding most activities of the 
oil industry and are insufficient for any general 
conclusions. Forecasts by the Bureau of Mines 
and authoritative trade sources regarding 1950 
support the conclusion that imports do not threaten 
serious injury to the domestic producer. Imports 
for the first 6 months, according to the principal 
importers, are expected to equal 750,000 barrels a 
day, notwithstanding the record imports of 885,000 
barrels daily in January. The 750,000 barrel level 
is approximately the level which imports reached 
in the last quarter of 1940. Demand is expected 
to be somewhat higher in 1950 than in 1949. (In 
the first quarter of 1950, it was apparently well 
above last year.) Drilling programs are said to 
be about the same as last year, indicative of con- 
tinuing activity at high levels. 

There are two other aspects of the import ques- 
tion which I should like to mention briefly. One 
concerns the nature of our imports, and the other, 
the extent to which a high level of United States 
exports to Venezuela depends on United States 
imports of oil. 

As a rough generalization, about two-thirds of 
our imports consist of crude oil, and the remainder, 
of heavy fuel oil. The latter product is needed in 
the Eastern United States where its consumption 
is particularly heavy. The total demand in the 
area, for onshore purposes, foreign trade bunkers 
and export, cannot normally be met economically 
from domestic output in the East and Gulf Coast 
areas. The National Petrolemn Council's Com- 
mittee on Imports has pointed out that heavy fuel 
oil imports are to a considerable extent offset by 
offshore shipments, largely as bunkers. Without 



642 



Department of State Bulletin 



imports of this particular product, it seems safe 
to say, that the domestic price woukl increase sub- 
stantially with consequent loss of markets to other 
fuels and resultant cost increases for metropolitan 
utilities, shippiiifr companies, and other major 
consumers, notwithstanding the ability of some 
to convert to other fuels. 

The etfects of a substantial limitation of imports 
would be felt by the American companies produc- 
ing abroad and their stockliolders. A limitation 
of imports to 5 percent of consumption would, for 
example, reduce their sales which are about 90 per- 
cent of total imports by about 360,000 barrels 
daily, assuming a quota of 300,000 barrels com- 
pared with an import level of 750,000 barrels daily. 
Such a reduction would be about 5 times as great 
as the amount affected by the present sterling area 
restrictions which have occasioned so much recent 
criticism. In addition, American export interests 
whose foreign sales depend to a substantial degree 
on the dollar income of oil producing countries 
would also be adversely affected. The most im- 
portant such case is Venezuela. Ninety percent 
of Venezuela's foreign exchange is derived from 
oil operations. Forty percent of Venezuela's pro- 
duction is exported directly or indirectly to the 
United States, principally by American compan- 
ies. Venezuela is our fourth largest export market 
and the second largest on a cash basis. Export 
sales in 1948 and 1949 of a wide variety of goods 
from many states were over 500 million dollars 
in each year and substantially in excess of the value 
of United States imports from Venezuela. It is 
thus important to keep in mind that action against 
American oil companies in Venezuela would have 
additional repercussions in terms of lower sales of 
the variety of things which other Americans cur- 
rently sell to Venezuela. 



Sterling-Dollar Oil Problem 

The sterling-dollar oil problem is connected with 
both of the topics to which I have referred. An 
extension of the difficulties represented in the prob- 
lem would have serious effects on American oil 
production abroad. The fear has also been ex- 
pressed that unless the problem is solved, Ameri- 
can companies will be forced to sell more in the 
United States, thus intensifying the import 
problem. 

The sterling-dollar oil problem develops out of 
the following series of facts. Oil is one of the 
principal imports of most foreign countries. 
American companies normally supply 40-50 per- 
cent of such imports and receive dollars for them. 
Virtually all countries are short of dollars either 
in an absolute sense or relative to soft currencies. 
In the sterling area, for example, the gold and 
dollar deficit in 1949 amoimted to 1.5 billion dol- 
lars. The net deficit on oil account was about 45 
percent of the total. Sterling oil, i.e., oil which 
can be purchased for sterling, is becoming increas- 



ingly available in sufficient quantities to permit 
some substitution of it in the .sterling area and 
third countries for their normal purchases of 
dollar oil. 

Sterling area import restrictions have jjlaced 
limits on the amount of United States company oil 
sales in sterling area markets while, in third coun- 
tries, companies are not permitted to sell oil for 
sterling because the British would have to convert 
that sterling into dollars under the Anglo-Ameri- 
can financial agreement of 1945. If sucli sales 
were permitted, the British would be paying dol- 
lars on behalf of third countries for imports of 
American company oil. This they cannot afford. 
American companies are, therefore, unable to com- 
pete on the same currency terms with British com- 
panies to maintain and exnand their sales abroad. 

The need of the nondollar area to save dollars 
is generally recognized. The central issue in tliis 
sterling-dollar oil problem, therefore, is how and 
to what extent dollar expenditures of the non- 
dollar area for oil can be reduced without serious 
injury to the commercial interests of American 
companies and to any United States political and 
strategic interests which may be involved. 

The United States has recognized that balance- 
of-payments difficulties may make it impossible for 
a nation to import all of the dollar products it 
might otherwise take, and the United States has 
agreed that trade discrimination against dollar 
products may be necessary to conserve a nation's 
supply of dollars. 

In the sterling-dollar oil case, it has been the 
United States view that discrimination against 
United States company oil is not justified in any 
case where an equivalent dollar saving can be 
achieved by adjustments in the operations of 
United States oil companies. 

British company oil is produced primarily not 
in the United Kingdom or in the sterling area, but, 
in third countries. Consequently, royalties, taxes, 
and certain local costs are paid largely in dollars. 
British companies are further dependent on im- 
ports of certain supplies and equipment from the 
dollar area. There is thus a substantial and un- 
avoidable part of British production costs which is 
incurred in dollars. This factor is the one which 
may be the most important in finding a solution 
making possible dollar saving to oil importing 
countries without the necessity of a large displace- 
ment of dollar oil in world markets. 

This problem developed during the past year. 
The first important quantity of American oil af- 
fected was in the case of Argentina where the 
British undertook, in the Anglo-Argentine Agree- 
ment signed in June 1949, to make available for 
sterling payment virtually all of Argentina's im- 
port requirements, about 40,000 barrels per day of 
which had formerly been supplied by American 
companies and which had represented about 42 
percent of Argentina's oil imports. In November, 
the British announced that they would have avail- 



Apri'f 24, 1950 



643 



able in 1950 an additional 4,000,000 tons, or about 
75,000 barrels daily of sterling oil surplus to the 
marketing requirements of British companies as 
they existed at that time and that effective Janu- 
ary 1, 1950, in order to save dollars, this oil would 
be substituted for an equivalent amount of oil 
being purchased from American companies. The 
effective date of this action was postponed to Feb- 
ruary 15. Its effect was to eliminate all the fuel 
oil formerly supplied to the sterling area by 
American companies and y^ of the gasoline for- 
merly supplied by them to the United Kingdom. 
With additional displacements in other markets, 
it is estimated that sterling oil has now displaced 
about 135,000 barrels daily of dollar oil. This is 
equivalent to about 9 percent of the total overseas 
production of American companies. 

This Government is seriously concerned not only 
in regard to the current displacement but also in 
regard to continuing and increasing displacement. 
While time would be required for the construction 
of facilities and large sums would be needed for 
investment in these facilities, the extent of British 
oil resources is such as to place no effective limit 
on the amount of displacement of dollar oil in 
foreign markets, so long as present exchange and 
trade controls exist. The reason for our concern 
regarding such displacement is suggested by my 
earlier reference to the commercial, political, and 
strategic value of American oil concessions and 
facilities overseas. 

We have been talking with the British since last 
September regarding this problem with interrup- 
tions to permit them or us to consider the other's 
views, to prepare additional position papers, and, 
in our case, to consult with various agencies of 
government and the affected United States 
companies. 

In February, the British submitted proposals 
involving substitution of up to 4 million tons of 
United States company oil by British company oil 
in the sterling area but providing the possibility 
of additional sales by United States companies in 
the sterling area and in third country markets 
under certain conditions which would insure the 
British against any dollar cost on account of such 
additional sales. The United States, on March 29, 
after carefully considering the British proposals, 
presented a memorandum suggesting modifica- 
tions of these proposals which, if accepted, would 
provide a solution permitting dollar savings to 
the British and the retention of outlets for Ameri- 
can company oil. In essence, these modifications 
suggest that American companies be permitted to 
compete to sell oil for sterling in the sterling area 
and in third markets to the extent that their own 
oil has been displaced or would otherwise be dis- 
placed by sterling oil. For such sales, they would 
receive in dollars the average dollar cost of pro- 
ducing an equivalent amount of sterling oil, and 
the remaining sterling would have to be used for 
certain types of expenditures in the sterling area. 



It could not be accumulated in burdensome 
amounts. 

It should be pointed out, however, that, while 
the American companies would be expected to ad- 
just their operations to reduce their dollar costs 
on amounts sold under these proposals, they would 
still receive dollars equivalent to 100 percent of 
the value of their sales in the sterling area and 
elsewhere not affected by displacement. Since 91 
percent of the overseas production of United States 
companies is not now affected by such displace- 
ment, the adjustments which may be necessary 
under the proposals currently relate to only some 
9 percent of their overseas operations. 

In our view, the proposal should go far to meet 
the British problem, since, under it, they will save 
the same amount of dollars as it would be possible 
to save by substituting British company oil, that 
is, approximately 50 million dollars, on an annual 
basis and at the same time they would have as- 
surance against indirect or eventual dollar drain 
through the provisions with regard to sterling 
accumulations. This approach is helpful to the 
American companies, which have in general rec- 
ognized the dollar difficulties of the British and 
their possibilities of saving dollars on oil account. 

Petroleum Policy Committee 

The foregoing problems, as is true of many other 
matters involving petroleum, require the collab- 
oration of several different agencies of govern- 
ment. It is my understanding that the committee 
is interested in obtaining the views of the various 
departments regarding the degree to which collab- 
oration on petroleum problems is successful, and, 
in particular, views regarding the petroleum 
policy council pi'oposed in H. E. 6047. 

We agree fully regarding the desirability, and, 
in fact, the necessity, of attaining the objectives 
given as the basis for the proposal to establish the 
petroleum policy coimcil. We are also conscious 
that the coordination among Departments and 
the collaboration in regard to various problems is 
not as effective as it might be. Nevertheless, the 
Department questions whether it is necessary to 
establish a separate petroleum policy council by 
law to acliieve these aims. And the Department 
doubts that it is advisable to do so. 

On the point of necessity for such a council, it 
seems to the Department that machinery already 
exists within the Executive Branch for accom- 
plishing substantially the same purposes as those 
set out in the bill. Furthermore, this machinery 
can be improved within existing executive author- 
ity. It can be changed as experience indicates it 
to be necessary. The agencies which would be rep- 
resented on the proposed Petroleum Policy Coun- 
cil are all included on both of the principal 
interdepartmental petroleum committees which 
are functioning today — one, the Interdepartmental 
Petroleimi Committee mider the chairmanship of 



644 



Deparfmeni of State Bulletin 



the Department of the Interior, the other, the In- 
ternational Petroleum Policy Committee under 
the chairmanship of the Depai'tment of State. 
They are also represented on the temporary com- 
mittees established from time to time to deal with 
particular problems. 

The proposed Petroleum Policy Council would, 
therefore in essence, involve the same agencies 
which work together today with no additional fac- 
tor which would insure that the personnel in- 
volved would work any more or less satisfactorily 
in one committee than in the other. In the final 
analysis, the principal factor in the success of any 
departmental coordination is the ability and will- 
ingness of the individuals concerned to work to- 
gether with full consciousness of the problems 
and responsibilities of the different agencies. 

On the point of the advisability of establishing 
such a council, there are two factors which make 
us doubtful about the proposal. The first is based 
on the possibility that the proposed Petroleum 
Policy Council would be a supra agency imposed 
on the various agencies and able to dictate courses 
of action in regard to the various matters for 
which particular departments have prime respon- 
sibility and regarding which they would be ex- 
Eected to have major interests and initiative. To 
e more concrete, foreign petroleum policies are 
dealt with by the Department of State within the 
framework of this Government's foreign policy. 
The Department of Interior, the National Military 
Establishment, and other agencies have, and 
should have, prime responsibility for particular 
petroleum matters in the field of their general re- 
sponsibilities. Admittedly, oil policies even when 
they involve responsibilities of one agency to a 
predominant degree, should not be formulated and 
put into practice without concern for the related 
interests of other agencies. But it is important 
that the initiative and authority of particular 
agencies not be jeopardized by the transfer of 
policy decisions to an agency, such as the proposed 
petroleum council, in which those departments 
having predominant interests in particular ques- 
tions could have a subordinate role in decisions 
regarding them. We feel that such a situation 
could result in a serious interference in the dis- 
charge of an agency's general responsibilities. 



Wo question also whetiier the mandatory re- 
quirement that industry and State recommenda- 
tions bo obtained on all questions of policy which 
would aflect their respective interests would per- 
mit prompt and effective determination of policy, 
especially in cases when ([uick action might be 
necessary. 

We believe, too, that the establishment of this 
council would establish an unfortunate precedent 
for the creation of other commodity councils lead- 
ing to a multiplication of commodity agencies 
M'ith authority overlapping that of existing de- 
partment with a risk of confusion and waste of 
personnel, which it is desirable to avoid. 

The extensive study of the Hoover Commission 
appears generally to support the points raised 
above. The prospect of still another petroleum 
unit with "experts, assistants, special agents, ex- 
aminers, attorneys, and other employees or agen- 
cies" is certainly inconsistent with the economy 
objectives of the investigation's report. Further- 
more, certain specific recommendations and obser- 
vations were made in the report on Foreign Af- 
fairs which merit careful attention in considering 
the proposal under discussion. The Commission 
noted that, "Each time the Congress creates a new 
agency with the power to employ a specified in- 
strument of foreign policy, it weakens the execu- 
tive establishment as a whole." The Committee 
concluded that, "Effective administration is not 
achieved by establishing by legislation the precise 
functions and membei'ship of coordinating and 
advisory bodies within the executive branch. ' Al- 
though a certain degree of flexibility could be 
achieved in function and membership of the pro- 
posed Council, the further observation of the Com- 
mittee seems to be applicable that such machinery 
"tends to obscure the responsibility for making 
executive decisions, to make each of the bodies 
acquire the aspects of a new agency, and to en- 
courage other interdepartmental groups to seek 
formal Congressional sanction." 

You may be sure that the Department believes 
earnestly in the desirability of better coordination 
between Departments on petroleum questions and 
will work wholeheartedly toward this objective 
which we believe fully attainable within the frame- 
work of existing authority. 



April 24, J 950 



645 



INTERNATIONAL ORGANIZATIONS AND CONFERENCES 



The American People's Part In U.S. Foreign Policy 



hy Edward TF. Barrett^ Assistant Secretary for Public Affairs'^ 



I would like to recall some facts about American 
foreign policy with which you are already famil- 
iar. I think that this is worth doing, because 
I believe that it is only a continuing examination 
of the obvious and the familiar that we arrive at 
what is useful and new. Consider the atom : It 
was familiar to us — or so we thought — for a long, 
long time. But by dint of persistent study of a 
familiar impasse — which was that the atom could 
not be split — we finally came up with the discovery 
that it could be split. And we split it. 

I think that there is a real possibility that if we 
keep on examining the familiar obstacles to peace 
and security, someone may yet discover something 
that no one else has noticed — a way to split them, 
a way to overcome them. 

A main source of our difficulties in seeking 
world peace and security is the refusal of the 
Soviet Union and its satellites to cooperate with 
the free nations, and the insistence of the Soviet 
Union in pursuing an expansionist, aggi'essive 
policy. 

The Berlin airlift showed us a possible way of 
expanding the area of workable agreements with 
the Soviet Union — that of giving the U.S.S.K. 
no practicable alternative but to abide by its agree- 
ments. It is a way, however, which can be pur- 
sued only by the direct action of the United States 
Government and other free governments working 
together. It is not an approach to the solution 
of East- West tensions which oifers opportunity 
for direct action by the United States National 
Commission or by Unesco itself. 

Commimist policies, however, are by no means 



' An address made before the National Commission for 
UNESCO at Washington on Apr. 13, 1050, and released to the 
press on the same date. 



the only obstacle between us and our goal of put- 
ting the United Nations Charter into fuller 
operation. 

Lack of Unity 

There is not enough unity within the non-Com- 
mmiist world. This world includes a gi-oup of 
strong, democratic nations which are pulling to- 
gether; others which are weaker and less con- 
vinced of the need to bear down in a common 
cause ; and still others with hardly better than a 
neutral attitude toward the struggle between the 
advocates of a totalitarian way of life and the 
advocates of a free, democratic way of life. There 
are many non-Communist countries so burdened 
with domestic and regional difficulties that the 
issue of a totalitarian versus a free world society 
seems very remote. They do not realize that they 
are part of the battleground on which the struggle 
for the allegiance of man is going forward. 

Even among the leading nations of the free 
world, we still do not have nearly the unity of 
purpose and action which is needed. 

We must come to closer agreement on policies 
and programs for the solution of world problems 
and mobilize more ])ower in carrying them out. 
We must work together to increase mutual under- 
standing with the "marginal" countries — those not 
yet convinced of their own stake in the world 
contest between oppression and freedom — and 
convince them that their own good lies on the side 
of freedom. In the words of Prime Minister 
Nehru, we must convince these other nations that 
democracy is the way of life that will "deliver the 
goods, both materially and spiritually." And we 
must make them understand the accompanying 



646 



Department of State Bulletin 



need for them to collaborate in establishing a 
democratic world society. 

Hei-e lies a gvont opportunity for the National 
Commission and for Unesco — that of winninij; tiie 
informed sui)port of the American and of other 
peoples and mobilizing their support more eli'ec- 
tively behind policies and programs whicli can 
bring peace and security nearer. If we are to get 
where we all want to get in carrying out the pur- 
poses of the United ^(ations, the member nations 
must have the backing of their peoples. To get 
that backing, and the necessary determination to 
make the United Nations succeed, requires a mass 
education program which will tax the abilities of 
governments, of international agencies, and of 
private organizations put together. We must face 
the fact that the United Nations and its aims still 
seem remote to most of the world's peoples. The 
United Nations has hardly begun to reach them 
in terms of their own dailj^ lives. We must all 
work together to establish that vital contact be- 
tween the United Nations and the peoples of the 
world. I would like to comment on some ways in 
which the United States is approaching these 
needs and some new trends which we are develop- 
ing in our methods of working. 

Affirmative Program for Free World 

Such actions as in the Berlin blockade and aid 
to Turkej' and Gi'eece are intended to remove im- 
mediate threats to peace and to contain and pre- 
vent the development of other threats, thus 
prolonging the "breathing space"' in which to 
solidify security and international cooperation. 

We are also joining in activities of an entirely 
different order. These measures, as in our sup- 
port of the United Nations, and our cooperation 
with other countries as in the European Recovery 
Program and in Point 4, are not a reply to Com- 
munist policies and propaganda but an affirma- 
tive i^rogi-am offered to the free world. The 
success of this program of construction will ulti- 
mately put a fatal crimp in Communist schemes 
of ruling the world, but that will be a byproduct; 
that is not the single objective of what we are 
doing. If the Soviet bloc should miraculously 
alter overnight into free, democratic, cooperative 
nations, we should not change what we are doing, 
except to expand our cooperation and our aid to 
include them also. Indeed, we have already made 
that offer, in good faith, only to see the Iron Cur- 
tain pinned down more anxiously. This is an 
important fact for us to keep in mind and to im- 
press on the rest of the world. We are doing what 
we are doing in order to preserve a climate of free- 
dom and opportunity in tlie world for others and 
for ourselves. We are convinced that the only way 
to keep that climate is by building a new kind of 
world society, democratic in spirit and practice. 

We want the American people and all other 
peoples of the non-Communist world to catch the 
vision of themselves as the fellow citizens of a 

April 24, 1950 



truly free world, cooperating with each other in 
peace and friendship. In the United Nations, we 
already have the organization througii which to 
carry out the affairs of that kind of world. If 
wo succeed in establishing that kind of world— 
and wo sliall succeed— totalitarianism will be by- 
passed and left to collapse far behind the line of 
battle against the true enemies of man — disease, 
poverty, ignorance, and injustice. With increased 
understanding of the reasons for our policies and 
the nature of our goals, the American people will 
act with miity to support them. 

It is equally imperative to give other peoples 
a better understanding of the United States and 
for us to have better understanding of them. This 
is the reason for the world-wide information pro- 
grams which we conduct through the radio Voice 
of America, our wireless information services, our 
exchange of persons, and other cultural exchange 
progi-ams. We are going among other peoples 
and bringing many of them here so that they may 
get to know us as we really are, and we may get 
to know them. Out of this kind of mutual un- 
derstanding, grows mutual trust and a greater 
capacity to work together. 



Strengthening UNESCO's Wori< 

In this matter of gaining the understanding and 
support of the American and of other peoples in 
the needs and purposes of the free world, it is 
wholly fitting and necessary that the United 
States should do everything in its power to 
strengthen Unesco's work. We are in the happy 
position of knowing that Unesco's services in 
improving international understanding will also 
serve to advance the national interests of all mem- 
bers of the free community of nations, including 
the United States. The aims of the Unesco 
Constitution exactly express our aspirations for 
the world. 

There are additional reasons for our interest in 
seeing an expansion in the work of the National 
Commission and of Unesco in the fields of cultural 
exchange and circulation of information. First, 
such exchanges offer one of the most immediate 
ways in which the American people can take an 
active part in carrying out our foreign policy. 
To the extent that the National Commission can 
step up such activities, they will broaden this op- 
portunity for participation by individual Ameri- 
can citizens. 

Second, we place a great value on a factual ex- 
change with other peoples, and let me stress that 
word factual. We want other peoples to get an 
undistorted picture of us and we want to get an 
undistorted picture of tliem. We are willing to 
settle for the kind of factual exchange of infor- 
mation that Unesco can provide as an objective, 
impartial international body following the prin- 
ciples laid down in its constitution. 

I repeat, therefore, that the United States has 
strong reasons for giving strong support to the 

647 



broadening of Unesco's work in cultural exchange, 
in education, in the exchange of accurate informa- 
tion between the free peoples of the world. Nat- 
urally, the United States has important work of 
this sort to do on its own, and we are doing it. 

In fact, we are now preparing major proposals 
in this field for submission to the responsible au- 
thorities. They will embrace important new steps 
for increasing the effectiveness of the Voice of 
America, of our international information opera- 
tion, and of our educational exchange program. 

All that I have just been discussing bears di- 
rectly on a very important resolution which Sen- 
ator Benton submitted to the Executive Commit- 
tee of the National Commission. The Executive 
Committee began consideration of this resolution 
last November. The purpose of the resolution 
was to broaden the use of educational, scientific, 
and cultural factors for Unesco's purposes. 



Appraisal of U.S. Educational 
and Cultural Policies 

After 2 months of study, the Executive Com- 
mittee again considered this resolution at its meet- 
ing in January of this year. There, the Commit- 
tee agreed that its interest in the use of the 
resources of education, science, and culture for 
building better understanding between peoples 
went even beyond Unesco's program. The Com- 
mittee, therefore, asked that the Department of 
State undertake, at the highest level, a comprehen- 
sive appraisal of the role of educational, scientific, 
and cultural factors in the foreign policy of the 
United States and in the conduct of international 
relations. 

In early March, this resolution was discussed by 
George Stoddard and key officials within the De- 
partment. All present I'ecognized that this re- 
quest on the part of the Executive Committee was 
timely and shoukl be productive of a useful result. 
The Department has accepted the recommendation 
of the Executive Coimnittee that such an appraisal 
be made and the Executive Committee will be kept 
informed as we progress. 

It is evident that, in asking that such an ap- 
praisal be made, the Executive Committee had in 
mind greater utilization of educational, scientific, 
and cultural factors in the conduct of our foreign 
relations. I hope one result of such an appraisal 
may be to discover additional ways to employ these 
factors to build better relations between our own 
country and other countries, as well as useful di- 
rections in which we can expand present cultural 
and informational activities. 

UNESCO's Activities in Mass Communications 

Without attempting to review the many success- 
ful activities which Unesco is conducting, I do 
want to mention two which have particularly im- 
pressed me. 

It seems to me that Unesco's International Book 



Coupon Scheme is a very ingenious way of aiding 
soft-currency countries to get publications tliey 
need from hard-currency countries. It was a 
brilliant thought that Unesco could act as a banker 
and issue coupons to overcome the existing ob- 
stacles of exchange. The fact that $428,000 worth 
of these coupons have now been allocated to 16 
countries — including $72,000 in gift coupons from 
UNESCO's Reconstruction Fund — testifies to the 
success of the plan. That success has already jus- 
tified the extension of the plan to certain kinds of 
scientific equipment and educational films — and 
the first shipment of film coupons, I am told, is 
already on its way to India. 

The other Unesco venture — a most important 
one — is its audiovisual agreement w'hich seeks to 
reduce the barriers to the free movement of edu- 
cational, scientific, and cultural materials. Six- 
teen countries have now signed this agreement, 
and the United States takes pride in having been 
the first signer and in having encouraged other ■ 
nations to join in support of the agreement. If I 
and when 10 governments ratify this convention 
by legislative action, the agi-eement will go into 
effect among the signatories — and I have little 
doubt that it will lead to broader and more signifi- 
cant agreements in the future. 

With these two programs, Unesco has sought 
to break down barriers in the fields in which I 
am particulai'ly interested. It also has made con- 
tributions of value in the field of educational ex- 
change — another of the areas with which my office 
is concerned. 

Many of the services now being made avail- 
able — such as the Unesco World Review and the 
Unesco Features — are especially important for 
the radio and press in certain parts of the world, 
which do not have the facilities available in our 
own country. But these services are of vital un- 
portance to all nations and should be continued 
and expanded. 

These developments are to Unesco's credit. 
However, they do not alter the fact that Unesco 
has made only a beginning in accepting its re- 
sponsibility in the fields of mass communications. 

Need for Wider UNESCO Program 

My deep interest in Unesco, my faith in its 
ideals, my conviction that it can play a vital role 
in the world today — all these are known. But I 
say to you frankly that I do not think Unesco 
has thus far measured up to what Director Gen- 
eral Torres Bodet called "its noble mission." I 
hope the delegations of the free commumty of 
nations which will assemble at the Unesco confer- 
ence at Florence, will determine that Unesco shall 
make this "noble mission" into much more than 
a phrase. 

To carry out this mission, Unesco must have a 
program and a plan of action looking, not only to 
the distant peace, but also to the immediate prob- 
lems which divide the world and threaten the 



648 



Department of State Bulletin 



rights and freedoms wliicli give meaning to the 
Unesco Constitution. 

Unfortunately, Unesco cannot reach all the 
peoiile of the world. In some countries, the door 
IS closed to its message, and its voice is altogether 
too weak to reach effectively the masses of the 
people. Therefore, its voice must be strengthened. 
I hope an important and consti-uctive feature of 
the forthcoming general confei-ence will be to 
strengthen vei-y greatly the means by which 
Unesco transmits its message to the world. 

Here in the United States, we are witnessing 
the benefits of Unksco's influence. We recognize 
the value of the educational activities which the 
National Commission is sponsoring here. It is 
of both practical and historical importance that 
today, in primary and secondary schools, col- 
leges and universities, millions of American stu- 
dents are studying the United Nations, getting to 
know something of international relations and 
seriously undertaking the job of understanding 
' the traditions and ways of life of other people. 
The similar studies being conducted by organiza- 
tions, clubs, and community groups are of equal 
importance. Out of this education, we are bound 
to derive more unity among the American people 
in support of policies and programs for the 
strengthening of the free world. We can expect 
the American people to take a more active interest 
and a more active part in our foreign policy. 

Public Participation in Foreign Policy 

The importance of this public participation is 
clear enough when we realize that, in the total 
aspect of our diplomacy, the whole United States 
is acting before the world as its own representa- 
tive. People abroad look at everything we say 
and do, in trying to understand us and to antici- 
pate our probable attitudes. We need to demon- 
strate to the rest of the world, therefore: 

That we are miited behind a generous policy 
toward others; 

That we are in earnest about building inter- 
national cooperation; 

That we have at home the strong democracy 
which we advocate for others. 

That we will work, in cooperation with every 
nation willing to join in a common eifort, for the 
removal of every kind of barrier to the inter- 
change of ideas, of persons, of materials, of goods, 
and services. Yes, that we genuinely seek full 
and free communication and exchange with all 
peoples of good will, in whatever pai't of the 
world they live. 

In this task, the National Commission for 
Unesco has a vital part to play — both as it works 
with the American people on Unesco's tasks in 
this country and as it advises our Government on 
Unesco's role in execution of this job. 

At the outset of your meeting, we have reviewed 
some of the familiar problems. This meeting will 
be directed towai'd developing new and useful 



ideas for application here at home and, through 
Unesco, in all parts of the world. 

The work the Conmiission has done during the 
past 6 months, particularly thruiigli its working 
committees, gives promise that, out of this meet- 
ing, will come important new decisions for the 
Commission itself, and fresh ideas for making 
Unesco's program contribute more effectively to 
Unesco's goals. 



John B. Blandford, Jr. Assumes 
Near East Advisory Commission Post 

John B. Blandford, Jr., was sworn in on March 

24 as United States representative on the Advisory 
Commission of the United Nations Kelief and 
Works Agency for Palestine Refugees in the Near 
East. His nomination for this position was sub- 
mitted by the President to the isenate on March 
4. It was confirmed on March IG. The appoint- 
ment carries with it the personal rank of Ambas- 
sador. 

The United Nations Palestine Relief and Works 
Agency (Unpra) was established by the General 
Assembly of the United Nations in its resolution 
of December 8, 1949. The purpose of the organi- 
zation is to cai'ry forward relief measures initiated 
over a year ago by the United Nations Refugee 
Relief Organization and to facilitate the rehabili- 
tation of some 700,000 Palestine refugees through 
works projects. The formation of this agency was 
recommended by the United Nations Economic 
Survey Mission, headed by Gordon R. Clapp, 
Chairman of the Board of Directors of the Ten- 
nessee Valley Authority. This mission made a 
study of economic dislocations arising from recent 
hostilities in the Near East. 

The Unpra Advisory Commission has already 
held several informal meetings in New York and 
will convene in its first formal session on April 17 
at Geneva. Ambassador Blandford expects to de- 
part for Geneva in early April, stopping en route 
at London and Paris. At Geneva, discussions will 
also be held with representatives of the World 
Health Organization, the International Refugee 
Organization, the Palestine Conciliation Commis- 
sion, and other interested parties. 

The director of the Unpra program, recently ap- 
pointed by United Nations Secretary-General 
Trygve Lie, is Maj. Gen. Howard Kennedy of 
Canada. He is presently in Washington holding 
conversations with Ambassador Blandford and 
others interested in the Palestine refugee program. 
Countries which have representatives on the Ad- 
visory Commission include the United Kingdom, 
France, and Turkey as well as the United States. 
Legislation authorizing United States' financial 

Earticipation in the Unpra program is presently 
efore Congress, included in the so-called "omni- 
bus" appropriations bill. 



April 24, 1950 



649 



Closing of I liter- American ECOSOC 



Remarhs iy Edward G. Miller 

Assistant Secretary for Inter- American Aifairs ' 



This extraordinary session of the Inter- Ameri- 
can Economic and Social Council has been, while 
not one of the most spectacular certainly one of 
the most harmonious conferences ever held with 
regard to economic relations of the American 
states. 

Although we have reached no unexpected nor 
surprisingly new decisions, we have achieved what, 
in the long run, is more important: We have 
learned to know one another and have discussed 
our problems frankly and freely ; we have cleared 
the atmosphere. In the nature of things, great 
decisions are not always to be expected. In fact, 
they could not invariably be made at every such 
gathering. 

It is always important, however, for responsible 
leaders in our respective countries to get together, 
to become personally acquainted. That kind of 
acquaintance leads to confidence and eliminates 
suspicion. 

The problems with which we deal in lA-Ecosoc 
are not of such nature as to lend themselves to 
quick and easy solutions ; but they do become more 
understandable and more susceptible of solution 
when looked at together and considered in com- 
mon. Far-reaching decisions that were necessary 
with regard to some of these problems had already 
been arrived at during previous international con- 
ferences. Others are still under consideration. 
Wliat is called for now is hard work in the use and 
appliance of existing instruments and techniques 
oi cooperation. The most efficient application of 
these is a pressing necessity. 

It is a fact that in our sessions here we have 
been unable to come up with a unanimous economic 
agreement. But this does not imply, by any 
means, that our efforts to this end have been in 
vain. In discussions here, as I have said, we have 
come to understand one another's problems and 



' Made at the Pan American Union at Wasliinjjton on 
Apr. 10, 1950, and released to the press on the same date. 



difficulties. We may also learn through multi- 
lateral consultations of this kind that some types 
of problems, particularly in the economic field, can 
perhaps best be dealt with bilaterally, according 
to the needs and conditions of particular countries. 

With regard to one item on our agenda, the 
Buenos Aires Economic Conference, commentaries 
in the press and elsewhere have reflected a great 
deal of confusion on the subject. There has been 
some tendency to attribute many of the economic 
ills of the hemisphere to the delay in holding that 
Conference. There has been a tendency also to 
blame the United States because the Conference 
has not yet been held. I would like to make my 
Government's position perfectly clear. We would 
be delighted to attend any conference, anywhere, 
anytime, provided only that we knew what we were 
going to talk about once we got there. It is basic 
to the success of a conference that its substantive 
objectives be clear and that there be substantial 
agreement as to the desirability of these objectives 
as well as a reasonable prospect of attaining them. 
It is an incontrovertible fact that the huge, com- 
plicated problem of economic development does 
not lend itself to solution through the mere hold- 
ing of conferences nor the passing of resolutions. 

One positive and important accomplishment of 
our present session has been the evolution of a 
cooperative teclinical assistance program. Per- 
haps the greatest achievement in this connec- 
tion has been to emphasize the concept that this 
is a program of real cooperation in which all 
countries can, and many already do, cooperate. 

When I was at Cochabamba, Bolivia, last year 
I was taken out to see a large dam — represa — that 
had been constructed with Mexican technical as- 
sistance. At a steel mill in Chile, at Huachipato, 
it was likewise inspiring to see a big dock which 
has been constructed under the direction of a 
Cuban foreman and Peruvian technicians for a 
United States company which has its headquarters 
in Cuba. There is no reason why such coopera- 



650 



Deparfment of State Bulletin 



tion as this should not be extended. Rather, 
there is every reason why it should be. The ex- 
panded program to be carried out through the 
lA-Ecosoc will be especially significant in ex- 
tending technical assistance in the fields of com- 
mon interest. 

My native island of Puerto Rico has a great 
contribution to make along these lines. For the 
United States delegation, it has been a special 
satisfaction to have our Puerto Rican colleague, 
Rafael Pico, as a member of the group. I myself 
first met Dr. Pico last year on board a plane. I 
was returning from South America, and he was 
on his way back from El Salvador where he had 
been acting as consultant on a housing project. 

This present Conference has amply proved the 
wisdom of the Secretary General of the Organiza- 
tion of American States in having suggested that 
provision be made in the statutes for extraordi- 
nary sessions of lA-Ecosoc. Our dele<^ation is 
in favor of holding a get-together of this nature 
every year. "We believe that this would help build 
up the agency into an effective instrument of eco- 
nomic cooperation. 

Undoubtedly, much of the success of this Con- 
ference has been due to the extraordinary distinc- 
tion and ability of the delegations. The presence 
at the session during these weeks of men of such 
calibre has been a stimulating influence toward 
progress in inter- American relations, both within 
and without the Conference meetings themselves. 

A spirit of mutual cooperation has animated 
all our sessions. No small part of the credit for 
this is due to the outstanding work of President 
Cereijo and of the other officials of the Conference. 
And now, permit me to depart momentarily from 
my exclusively national character. I wish to ex- 
press in the name of all the delegations, and at 
their request, our collective thanks to President 
Cereijo for his splendid work in organizing and 
heading this special session, to the Secretary Gen- 
eral for his unfailing and invaluable assistance 
throughout, and to the Secretariat for its excellent 
work of preparation and in servicing the meet- 
ings. We think, too, that a special word of grati- 
tude is due those committees which put in long 
hours of work day after day in order to achieve 
results. 

In our common history in this hemisphere, our 
21 nations have found that one of the most suc- 
cessful methods of dealing with social and eco- 
nomic problems is to act together for the common 
good. It is because we all believe that, that this 
extraordinary session was held; and it is my con- 
viction that during its discussions, in expressing 
our own views and hearing those of others, we have 
benefited alike. We have been working together 
in an atmosphere of utmost congeniality, and we 
are the better friends and the better neighbors in 
consequence. Undoubtedly the way out of our 
difficulties is an uphill road. But it leads to the 
broad horizons of the future, and we are taking it 
together. 



Two Members of Congress Named 
to UNESCO National Commission 

Senator Margaret Chase Smith of Maine and 
Representative Mike Mansfield of Montana have 
been appointed to the United States National Com- 
mission for Unksco, the Secretary of State an- 
nounced on April 11. 

Tlie National Commission is an advisory body 
to the Goveriiment on matters pertaining to the 
United Nations Educational, Scientific and Cul- 
tural Organization. Senator Smith and Repre- 
sentative Mansfield are expected to attend the semi- 
annual meeting of the National Commission in 
Washington April 13, 14, and 15. 

The new members will replace Senator James 
E. Murray of Montana, and Representative Ches- 
ter E. Merrow of New Hampshire whose 3-year 
terms on the Commission have expired. Secretary 
of State Acheson has expressed "deep apprecia- 
tion for the very real contribution" which the re- 
tiring members have made "to the initial success 
of UNESCO and the National Commission." 

The United States National Commission for 
UNESCO is composed of 100 members, GO of whom 
are representatives of national voluntary organi- 
zations interested in educational, scientific, and 
cultural matters. The remaining 40, appointed by 
the Secretary of State, are selected for outstand- 
ing achievements in fields related to Unzsco's 
broad range of activities. 



Plans for North Atlantic Council 
and Big Three Meetings 

Statement hy Secretary Acheson 
[Released to the press April 12] 

We have asked the Foreign Ministers of the 
North Atlantic Treaty nations to confirm the dates 
May 15-17, inclusive, for a session of the North 
Atlantic Council at London. 

My tentative plans are to go to Paris for talks 
with Mr. Schuman on May 8. I will then proceed 
to London for talks with Mr. Bevin. Mr. Schu- 
man will join us there for further discussions. 

Although the composition of the United States 
delegation for those conferences has not been 
finally determined, the principal officials who will 
accompany me are Ambassador-at-Large Philip 
C. Jessup, Senator John Sherman Cooper, and 
Assistant Secretary of State for Europe George 
W. Perkins. 

We are at present working with the other na- 
tions on the agenda for these meetings; therefore, 
I cannot comment on those questions which may 
be discussed. 



April 24, 1950 



651 



U.S. Delegations to International Conferences 



ILO Chemical Committee 

The Department of State announced on April 
1 the composition of the United States delegation 
to the second session of the Chemical Industries 
Committee of the International Labor Organiza- 
tion, which is scheduled to convene at Geneva, on 
April 11. The delegation is tripartite, composed 
of representatives of the Government, employers, 
and workers of the United States, as follows : 

Government Eepeesentatives 

Delegates 

Mrs. Clara M. Beyer, Associate Director, Bureau of Labor 

Standards, Department of Labor 
Charles Concannon, Chief, Chemicals Branch, Office of 

International Trade, Department of Commerce 

Adviser 

Alvin Roseman, United States Representative for Special- 
ized Agency Affairs at Geneva 

Emfloteeb' Repbesentatives 

Delegates 

Tom C. Clark, Chairman, Employee Relations Committee, 

Air Reduction Company, New York 
Hovpard Huston, Assistant to the President, American 

Cyanamid Company, New York 

WoEKERS' Repbesentatives 
Delegates 

H. A. Bradley, President, International Chemical Work- 
ers Union, Akron, Ohio 

Marshall Shafer, Vice President, International Chemical 
Workers Union, Los Angeles 

At its first session, held at Paris, April 7-lG, 
1948, the Chemical Industries Committee of the 
International Labor Organization adopted resolu- 
tions which, among other things, requested the 
International Labor Office to prepare a draft spe- 
cial safety code for the chemical industries. The 
Office was requested to give due consideration in 
preparing the code to technical and medical means 
of preventing accidents and industrial diseases, 
adequate psychological training of workers, more 
effective collaboration between management and 
workers in individual undertakings for the appli- 
cation of safety rules, the teaching of safety in 
technical schools, and the setting up in each coun- 



try of a central research institute and research 
laboratories. 

The Committee will consider at its forthcoming 
session a report which will deal in particular with 
(1) the action taken by various countries in the 
light of the resolutions adopted at the Committee's 
first session, (2) the steps taken by the Interna- 
tional Labor Office to follow up the studies and in- 
quiries proposed by the Committee, and (3) recent 
developments affecting the chemical industries. 
In addition, the Committee will make a study of 
safety and hygiene in the chemical industries, and 
of special aspects of the organization of working 
hours in the chemical industries. 

Pan American Congress of Architects 

The Department of State announced on April 
5 that the United States will be represented at the 
Seventh Pan American Congress of Architects, to 
be held at Habana, April 10-16, 1950, by the fol- 
lowing delegation: 

Chairman 

Ralph Walker, president, American Institute of Archi- 
tects, Voorhees, Walker, Foley and Smith, Architects, 
101 Park Avenue, N'ew York City 

Vice Chairman 

Glenn Stanton, first vice president, American Institute of 
Architects, practicing architect, 20S SW. Starks 
Street, Portland, Oreg. 

Delegates 

Julian Berla, Berla and Abel, 1636 Connecticut Avenue, 

NW, Washington, D.C. 
H. Errol Cofln. Colin and Cofln, architects, 125 East 46th 

Street, New York City 
Samuel Inman Cooper, C<ioper, Bond and Cooper, Inc., 

501-507 Henry Grady Building, Atlanta, Ga. 
Rockwell K. DuMoulin, architectural engineer. Institute 

of Inter-American Affairs 
Kenneth Franzheim, practicing architect, 2306 Crawford 

Street, Houston, Tex. 
C. Herrick Hammond, state architect. State of Illinois, 

53 West Jackson Boulevard, Chicago, 111. 
Arthur H. Keys, Jr., practicing architect, 1833 Jefferson 

Place, NW, Washington, D.C. 
Donald R. Laidig, International Housing Adviser, Office 

of the Administrator, Housing and Home Finance 

Agency 
Julian Clarence Levi, Taylor and Levi, 105 West 40th 

Street, New York City 



652 



Department of State Bulletin 



Alfred B. Tiirkor. practicing nrcliltect, 2921 SW 27th 

Avenue, Miami, Kla. 
Nicholas Sattcrlee, practicing architect, 2903 Que Street, 

N\V., Washington, D.C. 
Marshall A. Shaffer, chief, Technical Service Branch, 

Division of Hospital Facilities, I'uhlic Health Service 
Ross Shuniaker, dean. School of Architecture, North 

Carolina State College, Italclgh, N. C. 
Louis Skidmore, Skidmore, Owings and Merrill, 5 East 

ruth Street, Xew York City 
Chloethiel Woodard Smith, practicing architect, 814 

Seventeenth Street, NW., Washington, D.C. 

The Govormnents of the American Republics, 
togetlier with architects and associations of archi- 
tects in the American countries, have been invited 
by the Government of Cuba to participate in this 
Seventh Congress. The United States has par- 
ticipated in tlie six previous Congresses in this 
series, which was initiated in 1920 to enable the 
architects of the American countries to render 
greater services to the public, to the profession, 
and to the governments of their respective coun- 
tries as a result of consideration of problems of 
education, ethics, and practices relating to archi- 
tecture, as well as the relationship of the architect 
to the structure of contemporary civilization. 

Among the subjects which will be considered 
by the forthcoming Congress are: architectural 
training; urban planning; the evolution of con- 
temporary architecture; building problems of a 
social and financial nature; construction tech- 
niques; and the professional practice of the 
architect in relation to existing laws. Concur- 
rently with the Congress, there will be held a Pan 
Ajnerican Exhibition of Architecture and Plan- 
ning and an Exposition of Materials and Products 
Related to Construction. 

Regional Economic Conference 
To Be Held in Tokyo 

The Department of State announced on April 10 
that officials of the United States Government 
from "Washington and posts in South and East 
Asia will attend a conference in Tokyo, Japan, 
from April 17-22 to discuss trade and related prob- 
lems affecting the Far East. 

The conference is, in general, similar in purpose 
to meetings of American officials held periodically 
in various other regions of the world. Although 
in this instance located in Tokyo, the conference 
will be devoted to economic problems of the entire 
area. 

Chairman for the Conference 

William J. Sebald, Acting United States Political Adviser 
to Supreme Commander for Allied Powers, Japan 

Other officials 

Thomas R. Blaisdell, Jr., Assistant Secretary of Commerce 

Thomas R. Wilson, Director, Areas Division, Oflice of 

International Trade, Department of Commerce 



Carl Boohrlnger, Counselor for Economic Affairs, Office of 
United Slates Political Adviser, Tokyo 

MacKciizic Stevens, Director, Trade and Finance Divi- 
sion. Economic Cooperation Administration Mission, 
Seoul, Korea 

Merrill W. Ahbey, Agricultural Attach^, American Em- 
bassy, Maidla 

William W. Dlehl, Treasury Representative, Office of the 
United States Political Adviser, Tokyo 

Captain Joseph H. Burger, United States Marltlmt; Com- 
mission Representative for Japan, Yokohama 

C. Thayer White, Ollice of Northeast Asian Affairs, De- 
partment of State 

William J. Stibravy, OlFice of Financial and Development 
Policy, Department of State 

Philip L. Kelser, Office of South Asian Affairs, Department 
of State 

Owen L. Dawson, Counselor for Economic Affairs, Ameri- 
can Embassy, Seoul, Korea 

William O. Anderson, Assistant Commercial Attach^, 
American Embassy, Bangkok, Thailand 

David Klein, Third Secretary and Vice Consul, American 
Embassy, Rangoon, Burma 

Franklin W. Wolf, Counselor for Economic Affairs, Ameri- 
can Embassy, Karaihi, Pakistan 

Evett D. Hester, Counselor for Economic Affairs, Ameri- 
can Embassy, Manila 

Don V. Catlett, Second Secretary and Consul, American 
Legation, Saigon, Viet Nam 

Emory C. Swank, Second Secretary, American Embassy, 
Djakarta, Indonesia 

Arthur H. Rosen, Vice Counsul, Taipei, Formosa 

Ralph H. Hunt, Consul, Hong Kong 

Peyton Kerr, First Secretary, American Embassy, New 
Delhi, India 

A. Bland Calder, Consul, Singapore 

Possibly an Economic Cooperation Administra- 
tion field representative from Taipei, Formosa will 
attend. 



Legislation — Continued from page 631 

Claims of Certain Officers and Employees of the Foreign 
Service. S. Rept. 1245, 81st Cong., 2d sess. [To accom- 
pany H. R. 410G] 16 pp. 

Enabling the President to Obligate Funds Heretofore 
Appropriated for Assistance in Certain Areas in China 
Until June 30, 1950. S. Rept. 1251, 81st Cong., 2d sess. 
[To accompany S. 2845] 5 pp. 

Certain Cases in Which the Attorney General Had Sus- 
pended Deportation. S. Rept. 12.53, 81st Cong., 2d sess. 
[To accompany S. Con. Res. 73] 2 pp. 

United States Relations with International Organiza- 
tions: IV. United States Participation in International 
Organizations During the Fiscal Year Ending ,Tune 30, 
1949. Report of the Committee on Expenditures in the 
Executive Departments . . . S. Rept. 1274, 81st Cong., 
2d sess. iv, 71 pp. 

Authorization of a Contribution by the United States to 
the United Nations Relief and Works Agency for Palestine 
Refugees in the Near East. S. Rept. 1275, 81st Cong., 
2d sess. [To accompany S. J. Res. 153] 15 pp. 

Authorizing the Acceptance of Foreign Decorations for 
Participation in the P.erlin Airlift. S. Rept. 1277, 81st 
Cong., 2d sess. [To accompany S. 28.")3] 2 pp. 

Certain Cases In Which the Attorney General Had Sus- 
pended Deportation. S. Rent. 1315, 81st Cong., 2d sess. 
[To accompany S. Con. Res. 75] 2 pp. 

Certain Cases in Which the Attorney General Had Sus- 
pended Deportation. S. Rept. 131fi, 81st Cong., 2d sess. 
[To accompany S. Con. Res. 76] 2 pp. 



AprU 24, 1950 



653 



The United States in the United Nations 



International Children's Emergency Fund 

[AprU 15-21] 

The Social Commission centered its attention 
this week on a discussion of possible long-range 
international activities to meet the continuing 
needs of children. In addition to the Secretary- 
GeneraFs report on this subject, the Commission 
had before it two resolutions submitted respec- 
tively by the United States and jointly by Brazil, 
France, India, Turkey, and Yugoslavia, and a 
third compromise resolution presented by Canada. 

The United States had proposed that the United 
Nations undertake a continuing, long-range pro- 
gram of technical aid to governments on behalf 
of children rather than prolong the life of 
the International Children's Emergency Fund 
(Unicef). As stated in the plan, "the postwar 
emergency for which the United Nations Interna- 
tional Children's Emergency Fund was primarily 
created is terminating" and "direct assistance to 
government programs holds the greatest promise 
for improving the conditions of children on a con- 
tinuing basis." The following types of activities 
for children were encompassed in this program. 
These included (1) direct assistance to the govern- 
ment programs in the form of a combination of 
technical aid and supplies for demonstration proj- 
ects; (2) the promotion of adequate standards 
of nutrition; (3) the promotion of child health 
and education; (4) development of services con- 
cerned with vocational guidance and training and 
conditions of employment; (5) development of 
social services for children, particularly those 
who are handicapped socially, physically, or 
mentally; (6) special emergency assistance in the 
event of catastrophes such as the earthquake in 
Ecuador in the summer of 1949; and (7) coordi- 
nation of international activities in the social and 
economic field affecting children under the direc- 
tion of the Economic and Social Council. 

A United Nations Children's Board would be 
established "to carry out joint planning and co- 
oi'dination of children's work with special em- 
phasis on technical aid programs for children on 
an expanded basis." The Board would be com- 
posed of the members of the Social Commission, 
with four additional governments elected by the 
Council. The program would be financed by an 
increase in the regular United Nations budget, 



supplemented by voluntary contributions from 
governments, organizations, and individuals. 

In discussing this proposal. United States Rep- 
resentative Arthur J. Altmeyer pointed out the 
impossibility of undertaking "mass feeding" pro- 
grams for children on a universal basis and the 
interrelationship of the various needs of children. 
He explained that "we are not considering an 
abrupt termination of the sort of activity carried 
on by Unicef today," but of a more, rather than 
less, comprehensive program, in which the use of 
supplies would serve the "double purpose" of keep- 
ing children alive while demonstrating to the in- 
dividual country "the best social organization so 
that more children can be kept alive in the future." 
Following the Commission's rejection of the 
United States proposal, on April 20, Mr. Altmeyer 
stated that its substance would be reintroduced in 
the Economic and Social Council. 

The joint five-nation proposal now under con- 
sideration in the Commission calls for the un- 
interrupted continuation and extension of the 
activities of Unicef, these activities to be financed, 
as now, by voluntary contributions from public or 
private sources. The administrative expenses of 
the Fund, which would retain its present name, 
would, however, be included in the regular U.N. 
budget. Commission consideration of this reso- 
lution has already resulted in the adoption of 
Canadian amendments to distinguish between 
urgent relief and the long-term needs and also in 
agreement on the establishment of a United 
Nations Children's Board along the lines of the 
United States proposal. 

Indigent Aliens 

After a general discussion earlier in the week 
of assistance to indigent aliens, the Commission 
decided to postpone action on the Secretary-Gen- 
eral's proposals for an international convention 
dealing with this problem until further connnents 
are received from governments, appropriate spe- 
cialized agencies, and nongovernmental organiza- 
tions. The Commission also recommended that 
the Economic and Social Council ask governments, 
in the meantime, to consider the matter of accord- 
ing social assistance to indigent aliens equal to 
that accorded nationals and to refrain from de- 
porting them solely because of indigence. 



654 



Department of State Bulletin 



Senator McCarthy Discards First Charges and Shifts to Innuendo 



STATEMENT BY DEPUTY UNDER SECRETARY 
PEURIFOY 

[Released to the press April S] 

Commenting upon a speech ty Scneitor Joseph R. 
McCarthy at Passaic, New Jersey, Deputy Under Secretary 
of State, John E. Pcurifoy, issued the following statement : 

The Senator roared like a lion when he wore the 
cloak of Congressional immunity. Now he dis- 
cards his immunity, strikes the pose of a hero, and 
bleats like a lamb. When he dropped his cloak of 
inmnmity, he also dropped the substance of his 
first charges. 

The State Department officer whom Senator 
McCarthy first charged with "an unusual affinity 
for Communist causes" is now a man who was once 
connected with an organization the Senator 
doesn't like. 

The man whom Senator McCarthy first tried to 
label as one of a group of "card-carrying Com- 
munists'' now is described in carefully phrased 
innuendo. In that innuendo, the Senator conceals 
the fact that this man was reinstated in the De- 
partment by former Secretary Byrnes and Under 
Secretary Grew, both of whose letters on the sub- 
ject have been made public. As the Senator should 
know, this case is now being reviewed by the Presi- 
dent's Loyalty Eeview Board. 

LETTER FROM OWI FILES 

MADE AVAILABLE TO SENATOR MCCARTHY 

[Released to the press April 10] 

Text of Letter from Deputy Under Secretary Peurifoy 
to Senator McCarthy. 

April JO, 1950 

Dear Senator McCarthy: Your telegram of 
April 9, 1950 to the Secretary of State has been 
referred to me. I am enclosing a copy of my state- 
ment to wliich you refer. You will observe that 
it contains certain facts of record concerning Mr. 
Jessup and Mr. Service. No reference was made 
to Mr. Lattimore. This was not because of any 
intention to reflect on Mr. Lattimore but was be- 
cause, in as much as Mr. Lattimore is not connected 
with the State Department, it seemed appropriate 

April 24, 1950 



that any statement with respect to him should 
come from Mr. Lattimore himself or his attorneys. 
In your telegram you again referred to a por- 
tion of a letter which Mr. Lattimore sent to Mr. 
Joseph Barnes in connection with the operations 
of the Oflice of War Information. Previously, you 
quoted from the same portion of this letter. The 
Department acquired the files of the Office of War 
Information after the war. In as much as it may 
be possible that you have only an excerpt from this 
letter, I am enclosing a copy of the entire text, 
which has been declassified since you read the 
excerpt from it. 

Sincerely yours. 



John E. Pettrifot 



Enclosures : 

1. Copy of statement 

2. Copy of letter to Mr. Barnes 



Text Of letter addressed to Joseph Barnes, Office of War 
Information, 22^ West 57th Street, New York, New York 
from Owen Lattimore, Director, Pacific Operations, Office 
of War Information, 111 Sutter Street, San Francisco, 
California. 

June 16, 1943 

In your capacity as a member of our Personnel 
Security Committee there are certain things which 
you ought to know about Chinese personnel. It 
is a delicate matter for me to tell you about these 
things because of my recent official connection 
with Generalissimo Chiang Kai-shek. For that 
reason I am marking this communication secret. 

Wlien we recently reduced the number of our 
Chinese staff in New York it was quite obvious 
that there was going to be trouble and that this 
trouble would take the form of accusations against 
the remaining personnel. The fact is that certain 
of the personnel with whose services we dispensed 
had connections outside the office. This leads di- 
rectly into the main question. It is extremely 
important from the point of view of security that 
intelligence information should not leak out of 
our office through our Chinese personnel. It is 
an open secret in Washington that the security of 
various Chinese agencies there is deplorable. Any 
pipeline from our office to any of those agencies 
is not a pipeline but practically an open conduit. 

655 



Howevei", it is not only a question of Chinese 
Government agencies. There is also a well-organ- 
ized and well-financed organization among the 
Chinese in this country connected with Wang 
Ching-wei, the Japanese puppet. This can te 
traced back to the history of tlie Chinese revolu- 
tion as a whole. To present it in the fewest pos- 
sible words : Sun Yat-sen was largely financed for 
many years by Chinese living abroad. Not only 
Sun Yat-sen but Wang Ching-wei had close con- 
nections among the overseas Chinese. However 
much he is a traitor now the fact must be recog- 
nized that Wang Ching-wei is a veteran of Chinese 
politics with connections which he has nourished 
for many years among Chinese communications 
abroad including those in the United States. 

Chinese in the United States come almost exclu- 
sively from a few localities on the coast of China, 
practically every one of which is now occupied 
by the Japanese. Thus these Chinese in America 
have both family connections and financial in- 
vestments which are under the control of the Japa- 
nese, and because of his years of political organiz- 
ing work Wang Ching-wei knows all of these 
connections and can apply pressure through them. 

On the other side there is a special organization 
within the Kuomintang or Chinese Nationalist 
Party at Chungking which is charged with main- 
taining political and financial connections with 
Chinese overseas. This Overseas Bureau also has a 
detailed knowledge of the Chinese communities in 
America and is able to apply pressure. Thus there 
is a very intense conflict going on evei-y day in 
every Chinatown in America between the Wang 
Ching-wei agents and those of the Kuomintang. 
It must be remembered that while the Kuomintang 
is able to operate in a private way as a political 
party among Cliinese residents in America, it is 
also the party which "owns" the Chinese Govern- 
ment and is thus able to make use of Chinese 
Government agencies. 

Thirdly, there are numerous Chinese in Amer- 
ica who are politically unaffiliated. There are of 
course Communists iDut they have neither the 
money nor the organization of the Wang Ching- 
wei and Kuomintang groups. The genuinely un- 
affiliated Chinese are a curious compound product 
of Chinese politics and the American environ- 
ment. They tend to be intensely loyal to China 
as a country, without conceiving that the Kuomin- 
tang or any other political organization has a 
monopoly right to control of their thoughts 
and actions. They are like Americans; they like 
to give their political allegiance, not to have it 
demanded of them. They are reluctant to support 
a regimented series of causes laid down for them 
under orders; like Americans, they often give 
moral and financial support to a scattered number 
of causes some of which may even conflict with 
each other to a certain extent. 

The conflict between the Wang Ching-wei or- 
ganizing group and the Kuomintang organizing 



group in America can not be fought out in the 
open. Both sides have very good reasons for not 
courting publicity. Each is anxious to bring into 
its fold as many of the unaffiliated Chinese as pos- 
sible. Each is also anxious not to be exposed as 
an "un-American" organization or a foreign politi- 
cal group working on American soil. Both of 
them accordingly find it very good tactics, not only 
to cover up themselves but to put pressure on those 
whom they are trying to bring under their control, 
to accuse unaffiliated Chinese of being Commu- 
nists. This is an accusation which covers up the 
accuser at the same time that it puts pressure on 
the accused. 

One of the outstanding rallying points of the 
unaffiliated Chinese in America is the New China 
DaUy News in New York. This is controlled by 
an organization of laundrymen. I understand 
that the shareholdei-s number two or three thou- 
sand and that they take an active interest in the 
newspaper. The essential thing about these laun- 
drj^men is that in the nature of their business they 
are independent small business men. This means 
that they are on the one hand fairly well-insured 
against Communist ideology, since the small busi- 
ness man of whatever nationality is likely to be 
a man who has made his way by his own initiative 
and enterprise and is therefore extremely suspi- 
cious of collectivist economic theories. On the 
other hand, these Chinese small business proprie- 
tors are reluctant to submit themselves unques- 
tionably to the control of the vested interests which 
have grown up in China in association with the 
dominant Kuomintang. The New China Daily 
News would probably not come under much pres- 
sure if it were not for the fact that it is one of the 
best edited Chinese papers in America with a 
growing circulation. It does not need to be sub- 
sidized or supported by a patron like many, per- 
haps the majority, of Chinese papers. It pays 
dividends on its own merits. A number of Chi- 
nese languauge papers in America receive subsi- 
dies from the Kuomintang. At least two, and 
perhaps three, receive subsidies from the Wang 
Ching-wei group. One or two others trace back to 
the group within the Kuomintang, which was at 
one time headed by the late Hu Han-min, a leader 
of a right-wing faction within the Kuomintang. 
The Hu Han-min group, though once regarded as 
right-wing conservatives, are now regarded in 
China as "old fashioned liberals" — liberal, so to 
speak, short of the New Deal. They are less bit- 
terly involved in Chinatown politics than the 
Wang Ching-wei and Kuomintang groups. The 
two latter, which are engaged in handing out care- 
fully colored news and doctored editorial policies, 
are intensely jealous of and hostile to an unaffili- 
ated i^apcr like the New China, Daily News which, 
so to speak, flaunts its sins by being so readable 
that the Chinese public in America buys it for its 
own sake. 

It would be rash to say that there are no Com- 



656 



Department of State Bulletin 



niuiiists comiected with the Nem China Daily 
Newx. Here it is necessary to consider another 
peculiarity of the politics or Chinese living out of 
China, 'fhese Chinese are far from being tied to 
the chariot wheels of Moscow ; but when it comes 
to resisting the trend toward totalitarian regimen- 
tation within China they are often willing to sup- 
port parts of the program advocated by the Chi- 
nese Communists within China. This is so much 
a part of the pattern of politics of Chinese living 
out of China that it is not uncommon to find 
wealthy men, even millionaires, supporting the 
program of the Chinese Communists in whole or in 
part. This was, for instance, conspicuous in Ma- 
laya before the fall of Singapore. For such pros- 
perous and independent Cliinese it was a question 
either of backing their independent judgment of 
the steps that needed to be taken toward creating 
a working democracy within China, or of paying 
financial tribute to the Kuomintang, which some- 
times tends to be autocratic, and not infrequently 
spurns advice from Chinese abroad at the same 
time that it demands their financial contributions. 

In the specific setting of America, it is the in- 
dependent small business man — like the laundry- 
man — rather than the very few wealthy merchants, 
who most conspicuously maintain this tradition of 
political independence. In America, some of the 
most wealthy individuals are either committed to 
Wang Ching-wei and his puppet Japanese party 
or at least are hedging until they have a better idea 
of how the war is finally going to turn out. 

In the circumstances we have to be extremely 
careful about our Chinese personnel. While we 
need to avoid recruiting any Chinese Communists 
we must be careful not to be frightened out of 
hiring people who have loosely been accused of 
being Communists. We have to be at least equally 
careful of not hiring people who are pipelines to 
the Wang Ching-wei group or to one or other of 
the main factions within the Kuomintang. After 
all, as an American Government agency we should 
deal with the Chinese Government or regular agen- 
cies of the Chinese Government, but should not 
get in the position of committing ourselves to the 
Kuomintang, the political party which controls 
the Chinese Government, as if it were itself the 
Chinese Government. You will recognize both the 
importance of this proposition and the delicacy 
which it requires on the operational level. 

For our purposes, it is wise to recruit as many 
unaffiliated Chinese as we can, to pick people whose 
loj'alty will be reasonably assured on the one hand 
by the salaries which we pay them and on the 
other hand by the fact that they do not receive 
salaries or subsidies from somewhere else. 

Mr. Chi and Mr. Chew Hong, both of our New 
York office, conform excellently to these require- 
ments. Mr. Chi I have known for many years. 
Until his family estates were occupied by the 
Japanese, he was a wealthy landlord. He was 
brought up in the older scholastic tradition in 



China, before the spread of modern western edu- 
cation, but at the .same time he is keenly interested 
in the national unification of China and the orderly 
development of a stable political organization 
there. I know by long experience that he is any- 
thing but a Conununist; I also know tliat because 
of his seniority, his background of independent 
wealth, and his superior mentality he is not a man 
to be pushed around by i)arty bureaucrats. Chew 
Hong is a much younger man, but one whom Dr. 
Chi trusts and of whose integrity he is convinced. 
There is something in their relationship of the old 
Chinese standards of disciple and master. As long 
as Dr. Chi stands in the relationship of loyal 
friendship to me and the loyalty of an honest em- 
ployee of an American (io\ernment agency, there 
will be no dilHculty with either man, no irresponsi- 
ble playing with Chinese politics, and no leakage 
to any Chinese faction. 

The retention of both men is therefore a guaran- 
tee to the secrecy and security of the work of OWI 
as well as a gauarantee of the confident fulfillment 
of directives. I urge you not to be high-pressured 
into getting rid of either man. I know that both 
men may be subjected to attacks. Given the time 
to work on it, I could undoubtedly trace such 
attacks to their origin and give you the full details. 
I doubt whether the Personnel Security Commit- 
tee of OWI would be able to trace such attacks, 
rooted in the intricacies of Chinese factional poli- 
tics, to their source; but I should not like to see us 
placed in a position where, after getting rid of 
people now attached, we would be forced to hire 
people who would actually be nominees of factions 
not under our control. 

It is for this reason that I have written this long 
letter to urge you to report to our Personnel Secu- 
rity Committee the necessity for exercising pro- 
nounced agnosticism when any of our Chinese 
personnel are attacked. 

In the meantime I am doing my best to check 
over our Chinese personnel in San Francisco. 

Once more I urge you to observe the strictest 
confidence in acting on this letter, because in cer- 
tain quarters it might be considered that I am 
under a moral obligation to see that OWI is staffed 
with Chinese who take their orders from some 
source other than the American Government. 
Yours, 

O^VE^" Lattimore, 
Director, Pacific Operations 

TELEGRAM TO SECRETARY ACHESON 
FROM SENATOR MCCARTHY 

I was shocked to learn that the State Department 
sprang to the defense of Owen Lattimore yester- 
day after I publicly reviewed some of tlie evidence 
in his case. I pointed out that the following facts 
had been proved beyond any doubt in the Latti- 
more case and without the aid of any of the Gov- 
ernment's files: 



April 24, 1950 



657 



1. That in 1943 while director of Pacific opera- 
tions of the OWI, [Office of War Information] he 
issued secret orders for the discharge of all em- 
ployes loyal to Chiang Kai-shek and that they 
be replaced by Chinese connected with a Commu- 
nist publication and that this sabotage of Chiang 
Kai-shek was at a time when the lives of a vast 
number of Americans in the Pacific depended on 
the success of Chiang's army ; 

2. That he has been secretly shaping our foreign 
policy to put into effect the Communist program 
for Asia. Part of the evidence was secret instruc- 
tions from Lattimore to the State Department 
which were requested by you as a guide for 
Ambassador-at-Large [Philip C] Jessup, which 
document might well have been prepared by the 
Soviet Foreign Office in that it complies with every 
basic plan for Soviet Russia's conquest of Asia and 
the Pacific. 

Do you deny, Mr. Secretary, that regardless of 
whether Mr. Lattimore is a Russian agent he has 
done exactly what would be expected of an 
agent in (1) secretly sabotaging our anti-Commu- 
nist ally in the war and (2) secretly shaping our 
foreign policy along the identical lines of the 
Communist program? 

Strangely, the State Department says "bleating 
like a lamb" and Lattimore says "weaseling" be- 
cause yesterday I did not state that he had re- 
ceived thirty pieces of silver for the above job. 

Do you deny, Mr. Acheson, that the only missing 
link in the Lattimore case is proof of either mem- 
bership in the Communist party or payment by 
the party and that if such proof is forthcoming 
then Lattimore can truly be labeled as Russia's top 
agent in this coimtry ? All of this has been stated 
in public without benefit of senatorial immunity. 

If one word of it is not true, I suggest that Mr. 
Lattimore start that libel suit which your man 
[John E.] Peurifoy and Lattimore's lawyers 
have been so loudly threatening. 

In connection with the State Department's pub- 
lic vilification of me for refusing at this particular 
point to publicly supply this missing link before 
my witnesses appear and without benefit of the 
files, I call your attention to the fact that I would 
immediately repeat in public every word said on 
the Senate floor in his case if the files, upon which 
those statements were based, were made available 
to the committee or to me in any subsequent court 
case. Senator Hickenlooper thereupon asked Mr. 
Lattimore if he would request that his files be made 
available, at which time Mr. Lattimore stated he 
would refuse to do so. 

Lattimore's lack of sincerity is clearly indicated 
by his refusal to request that his files be made 
available. 

Joe McCarthy. 



Assistant Secretary Barrett 
Scores McCarthy Charges 

Assistant Secretary Barrett prefaced his formal address 
to the UNESCO National Commission, today, with the 
following remarks: 

Before getting into broader subjects, I think I 
owe it to you to speak briefly and bluntly on the 
headlines of the last few weeks about State De- 
partment employees. 

As members of this National Commission, you 
have demonstrated your confidence not only in 
Unesco but also in your Government's Depart- 
ment of State. Accordingly, you are entitled to 
a report. 

On February 9, at "Wheeling, West Virginia, 
Senator Joseph McCarthy said in a speech — and I 
quote from the text which he himself supplied at 
the time : 

I have here in my hands a list of 205 ... a list of 
names that were made known to the Secretary of State 
as being members of the Communist Party and who 
nevertheless are still worliing and shaping policy in the 
State Department. 

The Department asked the Senator for informa- 
tion on these 205 so-called known Communists. 
He supplied none. 

By the time he got to Salt Lake City for another 
speech, the Senator charged there were only 57 so- 
called Communists. A couple of days later, he 
used the figure 220. Then he changed this figure 
to 206. Next, it was 81 — including the so-called 
"Big Three" who've never been heard of again. 
Then it was 106. 

And, finally, after charging — and failing to 
support his charges — that there are 205, or 57, or 
220, or 206, or 81, or 106 Communists or security 
risks in the Department, and after dragging 
various names through the gutter, he boldly an- 
nounced that he would stand or fall on his ability 
to prove that there was just one. 

To date, he seems to have proved nothing about 
the one person he named. Moreover, that person 
is not connected with the State Department. The 
Senator's statement that the individual concerned, 
has, or until recently had, a desk in the State De- 
partment is utterly untrue. 

Meanwhile he doesn't say what has happened 
to his original charge about 205 "known Com- 
munists" — a charge that did great damage at home 
and abroad. 

Since coming to the State Department 7 weeks 
ago, from the post of Editorial Director of News- 
week magazine, I have taken a good look into the 
loyalty-checking machinery of this Department. 
Here is what I found : 

For 2% years, the Department has had a most 
thorough mechanism, cooperating closely with the 
Federal Bureau of Investigation, and supervised 



658 



Department of State Bulletin 



by John Peurifoy, -whose complete loyalty has 
never been questioned. 

The Department's investigating division is 
headed by Donald Nicholson, formerly of the FBI. 
Its Loyalty Security Board is chaired by General 
Conrad Snow of New Hampshire, an able gentle- 
man of unquestioned integrity — and, incidentally, 
a Republican. 

Finally, the amazingly thorough work that these 
gentlemen do is regularly and carefully reviewed 
by the President's Loyalty Review Board. This 
Board, as you probably know, is headed by Seth 
Richardson, who served as Assistant United States 
Attorney General under President Hoover and 
acquired a nation-wide reputation as counsel for 
the Pearl Harbor investigation. 

If there is in the United States, either inside 
or outside of the Government, a more thorough, 
more sound, or more responsible loyalty checking 
system, I don't know where it is. 

Against this background, let me say that any 
Senator or any citizen should take responsible 
action if he has reason to believe his Government 
has one or more disloyal employees. But let me 
add that the Senator's unique tactics in recent 
weeks have constituted the most shockingly irre- 
sponsible performance that I have seen in many 
years. 



The Secretary Expresses Appreciation 
to Far Eastern Consultants 

[Released to the press April 5] 

Following is the text of identical letters dated April 5, 
1950, from Secretary Acheson to Raymond B. Fosdick and 
Everett A'. Case. 

I should like to express my deep appreciation to 
you for the outstanding service which you have 
rendered to the Department of State and to me 
personally in acting as Consultant on Far Eastern 
policy during the fall of last year. 

We are confronted by profound changes in the 
Far East arising in large measure from the demand 
of the peoples of that area to govern their own 
affairs and to improve their economic and social 
conditions, but influenced also by the renewal of 
intense Russian imperialist pressure on that part 
of the world. These changes have made it desir- 
able for the United States to reexamine its policy 
in the Far East and the President and I thought 
it wise to associate with the Department of State 
in this reexamination advisers of such stature, ex- 
perience, and objectivity as iVmbassador to Jessup, 
Mr. Case [Fosdick] , and yourself. 



We have not asked you to submit a report, but 
we have asked you to join with us in tne State 
Department in an appraisal of the situation in the 
whole area of East and South Asia and of the con- 
tribution which the United States might make, 
in collaboration with the nations of that area and 
of other nations deeply interested therein, to the 
development of political and economic progress 
and stability in the area. You have labored most 
diligently and earnestly to this end. You have 
carefully reviewed our policy in each country and 
territory of South and East Asia with the compe- 
tent officers of the State Department and other 
agencies of the Government. You have met with 
many persons in private life whose experience in 
the Far East made their advice significant and 
have solicited and received by letter the views of 
many additional experts whom you could not see 
personally. You have discussed these problems 
with numerous Members of Congress particularly 
concerned with or interested in the Far East. The 
various views which have emerged from your con- 
sultations will be carefully weighed in the develop- 
ment of the policy which this Government will pur- 
sue in grappling with the problems of the Far 
East during commg months and such success as we 
may achieve will owe much to your wise counsel. 
You and your associates and I agree, however, that 
the problems of Asia are problems of deep-seated 
character which cannot be solved quickly and foi; 
which no easy panaceas can be found. They will 
be with us for many years and can be resolved in 
the end only by a combination of patience, under- 
standing, and firmness. 

It is with the greatest regret that I acceded to 
your desire and that of Mr. Case [Fosdick] to re- 
turn to your normal responsibilities in November 
and to bring to a close your period of intensive 
consultation with me and the other officers of the 
Department of State. You gave generously of 
your time and energy, but I should warn you that 
we may call on you from time to time in the future 
to rejoin us for further consultation. 

Allow me once more to express my appreciation 
of the high service which you have rendered to our 
Government and our coimtry. 



Joseph B. Phillips as Consultant 
On Public Affairs 

Joseph B. Phillips, writer and lecturer on for- 
eign affairs, was sworn into office on April 11 as a 
special consultant on the staff of Assistant Secre- 
tary for Public Affairs Edward W. Barrett. 



April 24, 1950 



659 



Archival 'and Records Functions 
Transferred to General Services 
Administration 

To the Congress of the United States: 

I transmit herewith Reorganization Plan No. 20 
of 1950, prepared in accordance with the pro- 
visions of the Reorganization Act of 1949. This 
plan transfers from the Secretary of State to the 
Administrator of General Services a number of 
functions which have no connection with foreign 
affairs but bear a close relation to the archival 
and records functions of the General Services 
Administration. 

Since its establishment in 1789 the Department 
of State has performed certain routine secretarial 
and record-keeping functions for the Federal Gov- 
ernment which are entirely extraneous to its basic 
mission with respect to the conduct of foreign re- 
lations. Wliile these activities do not properly 
belong in the Department, they were assigned to 
it ancl continued under its jurisdiction for want of 
an appropriate agency for their performance. At 
present these functions consist of the preservation 
and publication of laws, the preparation and pub- 
lication of the Statutes at Large, the certification 
and publication of Constitutional amendments, 
the receipt and preservation of certificates of Presi- 
dential Electors and of electoral votes, and the 
compilation and publication of Territorial papers. 

Through The National Archives and Records 
Service the General Services Administration is 
especially staffed and equipped for the conduct of 
activities of these types. It is the principal cus- 
todian of the official records of the Government. 
Under the Federal Register Act and the Adminis- 
trative Procedure Act, it preserves and publishes 
in the Federal Register the Executive orders, 
proclamations, and other principal executive doc- 
uments and it codifies and publishes the rules 
and regulations promulgated by the various 
departments and agencies. This work is gener- 
ally similar in nature to, and much greater in 
volume than, that performed by the Department 
of State with respect to Constitutional amend- 
ments, laws, and proclamations. Consequently, 
the consolidation of these activities of the State 
Department with the archival and records activi- 
ties of the General Services Administration 
should make for greater efficiency and economy. 
The plan, liowever, does not transfer the custody 
and publication of treaties and international agree- 
ments since they are matters of special concern 
to the Department of State, and it is the agency 
most competent to edit such documents. 

The handling of the certificates of Presidential 
Electors and the compilation and publication of 
Territorial papers also more appropriately belong 
in the General Services Administration. The first 
is largely a matter of record-keejung and the 
second of archival research. The preparation of 



the Territorial papers involves the compilation 
and editing of official documents of the various 
Territories formerly existing within the United 
States. The greater part of this material is now 
in the National Archives and the work involved 
is generally similar to that being performed by it 
with i-espect to other groups of public records. 

In addition, the plan abolishes two statutory 
duties of the Secretary of State which have become 
obsolete. The first is the duty of procuring copies 
of all State statutes as provided in the Act of 
September 23, 1789 (R. S. 206) . Inasmuch as the 
Library of Congress now has a complete collection 
of the State laws, it is no longer necessary for the 
Department of State to maintain a complete col- 
lection. The second is the requirement, imposed 
by the Act of July 31, 1876 (19 Stat. 105), as 
amended, that the Secretary of State publish 
proclamations and treaties in a newspaper in the 
District of Columbia. This is now unnnecessary 
since proclamations are published in the Federal 
Register and treaties are made available currently 
in slip form in the Treaties and other Interna- 
tional Acts Series. 

After investigation I have found and hereby de- 
clare that each reorganization included in this 
plan is necessary to accomplish one or more of the 
purposes set forth in section 2 (a) of the Reor- 
ganization Act of 1949. 

The transfers provided by this plan will relieve 
the State Department of a number of functions 
that have no relation to its primary purpose and 
place them in an agency especially designed for 
the performance of such activities. Until these 
functions are incorporated in the operations of 
the General Services Administration, it will not, 
of course, be practicable to determine the econo- 
mies attributable to their transfer, but it is reason- 
able to expect modest yet worthwhile savings to 
be achieved. 



Thk "White HotrsE 
March 13, 1950. 



Haeby S. Truman 



REORGANIZATION PLAN NO. 20 OF 1950 ^ 

statutes at Large and Other Matters 

Section 1. Functions transferred from Department of 
State to Administrator of General Services. — There are 
hereby transferred to the Administrator of General Serv- 
ices the functions of the Secretary of State and the De- 
partment of State with respect to : 

(a) The receipt and preservation of the original copies 
of bills, orders, resolutions and votes (R. S. 204, as 
amended) ; 

(b) The publication of acts and joint resolutions In 
slip form and tlie compilation, editing, indexing, and pub- 
lication of the United States Statutes at Large, except such 

'Preparo<l by the President and transmitted to the 
Senate and the House of Representatives in Congress 
assembled, Mar. 1.3, 1950, pursuant to the provisions of 
Che Reorganization Act of 1940, approved .Tune 20, 1949. 



660 



Department of State Bulletin 



functions with respwt to treaties and other International 
aKreements (1 U. S. C. 112: U. S. 1104, as amended: R. S. 
210, as amended : R. S. 380.'). ns amended ; R. S. 38(X1, as 
amended : Aet of Jan. 12. 1895, 28 Stat. 000 and 615, as 
amended : Act of April 12, 1004, 33 Stat. 587) : 

(c) The certification and publication of amendments 
to the Constitution of the United States (R. S. 20.')) and 
the preservation of such amendments: 

(d) Certificates of appointment of the electors of the 
President and Vice President and certificates of the votes 
of such electors for President and Vice President (3 
U. S. C. 6, 11-13) ; and 

(e) The collection, cop3-lnR. arranging, editing, copy 
reading, and Indexing of the official papers of the Terri- 
tories (Act of March 3. 1925. 43 Stat. 1104, as amended; 
Act of July 31, 194.'), 59 Stat. 510). 

Sec. 2. Abolition of functions.— (a) The duty of the 
Secretary of State of procuring copies of all statutes of 
the several States Is hereby abolished, but this shall not 
limit his authority to procure copies of such State sta- 
tutes as mav be needed in the performance of his func- 
tions (R. S."206). 

(b) The duty of the Secretary of State of publishing 
Executive proclamations and treaties in a nevpspaper in 
the District of Columbia is hereby abolished (Act of July 
31, 187C, 19 Stat. 105, as amended, 44 U. S. C. 321). 

Sec. 3. Performance of transferred functions. — The Ad- 
ministrator of General Services may from time to time 
make such provisions as he shall deem appropriate author- 
izing the performance by any other officer, or by any 
agency or employee, of the General Services Administra- 
tion of any function transferred to such Administrator 
by the provisions of this reorganization plan. 

Sec. 4. Transfer of records, property, personnel, and 
funds. — There are hereby transferred to the Genera! Serv- 
ices Administration, to be used, employed, and expended 
in connection with the functions transferred by the 
provisions of this reorganization plan, the records and 
property now being used or held in connection with such 
functions, the personnel employed in connection with 
such functions, and the unexpended balances of appro- 
priations, allocations, and other funds available or to 
be made available for use in connection with such func- 
tions. Such further measures and dispositions as the 
Director of the Bureau of the Budget shall determine to 
be necessary in order to effectuate the transfers provided 
for in this section shall be carried out in such manner 
as the Director shall direct and by such agencies as he 
shall designate. 



William T. Stone Denies 
Interceding in Wheeler Case 

[Released to the press AprU IS] 

The Department has been questioned about a story 'by 
Millard Edwards in today's Times-Herald, alleging that 
in 19^5 William T. Stone "interceded" for Oeorge 8. 
Wheeler in a ease pending before a "Truman loyalty 
board." Mr. Stone categorically denies this charge in the 
folloxcing statement: 

I categorically deny that I interceded for Mr. 
Wheeler in any way. I never made any statement 
that Mr. Wheeler was "unquestionably loyal." 

At the time this case arose, I was the Foreign 
Economic Administration's representative in Lon- 
don, and the FEA was an independent govern- 
ment agency. 

I had never known Mr. Wheeler prior to his 



arrival in London as a civilian employee of FEA 
assigned to the Supreme Ilciidcjuarters Allied Ex- 
peditionary Forces (SHAEF). 

After the case against Mr. Wlieeler had devel- 
oped before the Civil Service Commission in Wash- 
ington, I was asked by David Morse, then of the 
Allied Military Control Commis.ssion, if I could 
vouch for Mr. Wlieeler. I replied that I could 
not, as I had met him only on the occasion of his 
arrival in London. 

Aslvcd by Mr. Morse if I knew of any reason why 
Mr. Wlieeler should not remain in London pencf- 
ing review of his case, by the Civil Service 
Commission, I replied, after consultation with 
Washington, that, to the best of my knowledge, the 
Foreign Economic Administration believed there 
would be no risk in his remaining there. 

I had no further connection with the case. 

This case arose in January 1045, 4 months be- 
fore the inauguration of President Truman and 
2 years before the initiation of the Truman 
Loyalty Program. 

Although Mr. Wheeler was one of a group of 
the Foreign Economic Administration employees 
in Germany who, in September 1945, were trans- 
ferred temporarily to the rolls of the Department 
of State, that whole group was transferred to the 
War Department in February 1946, and in fact 
Mr. Wlieeler's transfer to the War Department 
was even earlier — in December 1945. 

At no time has Mr. Wlieeler's case been con- 
sidered by a security or loyalty board within the 
Department of State, inasmuch as during his brief 
connection with the Department the matter was 
under the jurisdiction of the Civil Service Com- 
mission. 



Departmental Status of 
Ambossador Jessup, John S. Cooper, 
and John Foster Dulles 

Statement hy Secretary Acheson 

[Released to the press April 6] 

In order to clear up a number of questions which have 
been asked by the press about the status of Amba-isador- 
at-Large Philip C. Jessup, John 8. Cooper, and John Foster 
Dulles, the folloicing statement is made by the Secretary 
of State after clearance teith the President and his con- 
currence: 

As announced on March 27, 1950, Ambassador 
Philip C. Jessup will remain at his post as Ambas- 
sador-at-Large for the time being. The subject 
of a possible successor is under consideration. In 
addition to his other duties, he will share with 
Under Secretary of State Webb some of the coor- 
dinating responsibilities previously assigned to 
Deputy Under Secretary of State Dean Rusk. He 
will assist in the preparation of materials for the 



April 24, 1950 



661 



forthcoming meetings of the North Atlantic Pact 
Council and the discussions to be held in London 
in May and will accompany the Secretary of State 
to these conferences. Prior to the beginning of 
these conferences, he will go to Europe as the 
senior member of an advance party to engage in 
preliminary discussions and make the necessary 
advance arrangements. 

As announced on March 27, 1950, Mr. John Sher- 
man Cooper has agreed to serve as consultant to the 
Secretary of State in connection with the forth- 
coming meetings of the North Atlantic Pact Coun- 
cil and the discussions to be held in London in May. 

As announced today, Mr. John Foster Dulles 
has agreed to serve as a consultant to the Secre- 
tary of State on broad problems in the field of 
foreign affairs and on specific lines of action which 
this Government should follow. It is not expected 
that he will participate in the forthcoming con- 
ferences to be held in Europe. It is expected that 
the Secretary of State and. Mr. Dulles will confer 
at an early date and agree on the specific matters 
to be assigned to Mr. Dulles for his early attention. 



John Foster Dulles Appointed 
Consultant to the Secretary 

At the request of the President and the Secretary 
of State, John Foster Dulles has agreed to serve 
as consultant to the Secretary of State. 

In this capacity, Mr. Dulles will advise Secre- 
tary Acheson on broad problems in the field of 
foreign affairs and on specific lines of action which 
this Government should follow. His work will 
not be confined to any specific area of the world. 
His broad background and wealth of experience 
qualify him for consideration of problems in Eu- 
rope, the Far East, and other areas of the world, 
as well as problems affecting the work of the 
United Nations. 

Mr. Dulles, whose cooperation has been ex- 
tremely valuable to the Department in the past, 
will assume his duties in about 2 weeks. 

Mr. Dulles has been associated with the United 
Nations since 1945 when he served as a member 
of the United States delegation to the San Fran- 
cisco conference, and he has represented his Gov- 
ernment at most of the regular sessions of the 
General Assembly. 

Mr. Dulles served as a member of the United 
States delegation to the San Francisco Conference 
on World Organization in 1945 which drafted the 
Charter of the United Nations. In 1945, he at- 
tended the first meeting of the Council of Foreign 
Ministers as adviser to Secretary of State Byrnes. 
In 1947, he attended the Moscow and London meet- 
ings of the Council of Foreign Ministers as ad- 
viser to Secretary of State Marshall. He served 
as an adviser to Secretary Acheson at the meeting 
of the Council of Foreign Ministers at Paris in 
1949. 



PUBLICATIONS 



Recent Releases 

For sale by the Superintendent of Documents, Govern- 
ment Printing Office, Washington 25, D. C. Address re- 
quests direct to the Superintendent of Documents, except 
in the case of free publications, which may be obtained 
from the Department of State. 

General Agreement on Tariffs and Trade. Treaties and 
Other International Acts Series 1888. Pub. 3482. 8 
pp. 50. 

Agreement between the United States and other gov- 
ernments ; Second Protocol of Rectifications to the 
Agreement of October 30, 1947 — Signed at Geneva 
September 14, 1948 ; entered into force September 14, 
1948. 

Health and Sanitation: Cooperative Program in Hon- 
duras. Treaties and Other International Acts Series 
1980. Pub. 3684. 10 pp. 50. 

Agreement between the United States and Honduras 
extending and modifying agreement of July 8, 1942, 
as extended and modified — Effected by exchange of 
notes signed at Tegucigalpa June 28 and July 6, 1948; 
entered into force July 6, 1948, operative retroactively 
from June 30, 1948. 

Double Taxation : Taxes on Estates and Inheritances and 
Income. Treaties and Other International Acts Series 
1982. Pub. 3690. 36 pp. 150. 

Convention and supplementary protocol between the 
United States and France — Signed at Paris October 
18, 1946 ; and supplementary protocol signed at Wash- 
ington May 17, 1948 ; proclaimed by the President of 
the United States October 27, 1949. 

Passport Visa Fees. Treaties and Other International 
Acts Series 1987. Pub. 3704. 3 pp. 5^. 

Arrangement between the United States and France — 
Effected by exchange of notes dated at Paris March 
16 and 31, 1949; entered into force March 31, 1949. 

Passport Visa Fees. Treaties and Other International 
Acts Series 1990. Pub. 3709. 2 pp. 5«J. 

Agreement between the United States and Greece — 
Effected by exchange of notes dated at Athens March 
4 and July 22, 1949 ; entered into force July 22, 1949. 

Point Four: Cooperative Program for Aid in the Devel- 
opment of Economically Underveloped Areas. E<;o- 
nomic Cooperation Series 24. Pub. 3719. 167 pp. 40«(. 

Includes comprehensive discussion of nature, purposes 
and benefits, and scope of the program with appen- 
dixes and tables. 

Food Production: Cooperative Program in Costa Rica. 

Treaties and Other International Acts Series 1992. Pub. 
3720. 4 pp. 5^. 

Agreement between the United States and Costa Rica 
extending agreement of February 20 and 27, 1948 — 
Effected by exchange of notes, signed at San Jos6 
August 27 and October 5, 1948; entered into force 
October 5, 1948, operative retroactively from June 
30, 1948. 



662 



Department of State Bulletin 



Food Production: Cooperative ProKram in Peru. Treaties 
aud Other International Acts Series 1003. Pub. 3721. 3 
pp. 5^. 

Agreement between the United States and Peru, 
modifying and estendin;; agreement of May 19 and 
20, 1943, as modified and extended— EtTected by ex- 
change of notes, signed at Lima August 17 and 18, 
1949 ; entered Into force August 18, operative retro- 
actively from June 30, 1949. 

United States Educational Foundation in Australia. 

Treaties and Other International Acts Series 1994. Pub. 
3725. 9 pp. 50. 

Agreement between the United States and Australia — 
Signed at Canberra November 26, 1949 ; entered Into 
force November 26, 1949. 

Publications of the Department of State, January 1, 1950. 
Pub. 3728. 41 pp. 

A semiannual list cumulative from January 1, 1948. 

Regulation of Production and Marketing of Sugar. 
Treaties and Other International Acts Series 1997. Pub. 
3730. 5 pp. 5<f. 

Protocol between the United States and other gov- 
ernments, prolonging the international agreement of 
May 6, 1937— Signed at London August 31, 1948 ; oi)- 
erative September 1, 194S. 

Health and Sanitation: Cooperative Program in Colom- 
bia. Treaties and Other International Acts Series 1998. 
Pub. 3732. 5 pp. 50. 

Agreement between the United States and Colombia, 
modifying and extending agreement of October 23, 
1942, as amended and extended — Effected by exchange 
of notes, signed at Bogota July 26 and 28, 1949 ; en- 
tered into force August 4, 1949, operative retroactively 
from June 30, 1949. 

Patterns of Cooperation. International Organization and 
Conference Series I, 9. Pub. 3735. 130 pp. 

Comprehensive survey of achievements of interna- 
tional organizations in the economic and social field. 
Includes pictures and organization chart. 

World Agriculture Looks to FAO for Leadership. Inter- 
national Organization and Conference Series IV, Food and 
Agricultural Organization 1. Pub. 3746. 10 pp. Free. 
[Bulletin Reprint] 

Article by Charles F. Brannan on problems confront- 
ing the Conference and actions taken by the three 
Commissions. 

Economic Cooperation With the United Kingdom, Under 
Public Law 472 — 80th Congress, as amended. Treaties 
and Other International Acts Series 2036. Pub. 3764. 10 
pp. 5«f. 

Agreement between the United States and the United 
Kingdom of Great Britain and Northern Ireland, 
amending agreement of July 6, 1948 — Effected by 
exchange of notes, signed at Washington January 3, 
1950 ; entered into force January 3, 1950. 

The Future of Germany. European and British Com- 
monwealth Series 14. Pub. 3779. 21 pp. Free. [Bulletin 
Reprint] 

Address made at Stuttgart, Germany, February 6, 
1950, at the Amerika Haus, and an address made 
over the NBC network, Washington, January 23, 
1950, discussing developments in Germany, and the 
chief objectives in our German policy. 

April 24, 1950 



" Germany, 1947-49: 

The Story in Documents" Released 

[Released to the press April 10] 

The Department of State released today Ger- 
many, 1947-49: The Story in Documcntn, which 
outhnes American policy toward Germany and 
pertinent developments in Germany during the pe- 
riod January 1947 to September 1949. This period 
embraces the rise and decline of 4-power consid- 
eration of the German problem, the results of 
Soviet intransigence respecting Germany, the es- 
tablishment of the Federal Republic in Germany, 
the termination of Military Government in the 
Western zone, the entry into force of the Occu- 
pation Statute, and the institution of the Allied 
High Commission in September 1949. 

The documents contained in this 677-page vol- 
ume include international agreements, directives, 
policy addresses, and press statements, as well as 
reports by the President, by officials of the Depart- 
ments of State and the Army, by the Joint Chiefs 
of Staff, and by other Governmental agencies. In 
the four parts of the volume — (1) "Basic Prin- 
ciples and Objectives"; (2) "Political Develop- 
ments," (3) "Economic Develojiments," and (4) 
"Educational, Informational, Cultural, and Re- 
ligious Developments"— the documents are ar- 
ranged chronologically within subgroups. Two 
lists at the beginning of the book provide chrono- 
logical and topical guides to the contents. 

Although these documents have appeared in 
various published forms, principally for official 
use, many have been limited in distribution and 
not readily accessible for public use (for example, 
various laws of the Allied Control Council, of the 
United States Military Government, and of the 
German states). They are presented for the first 
time in a comprehensive, topical arrangement for 
the information of the general public and for con- 
venient reference purposes. 

Earlier documentation on occupation policy re- 
specting Germany was published by tlie Depart- 
ment of State in Occupation of Germany: Policy 
and Progress, 1945-46 (publication 2783, released 
August 1947). A few documents of this period 
are included in the present volume because of their 
continuing relation to the later period, such as the 
Protocols of the 1945 Yalta and Potsdam Confer- 
ences, the Directive to the Commander in Chief of 
the United States Forces of Occupation, and the 
Stuttgart address of Secretary Byrnes. 

The comjiilation was prepared by Velma Hast- 
ings Cassidy of the Division of Historical Policy, 
Office of Public Affairs, with the collaboration of 
the Bureau of German Affairs and the Division 
of Publications. 

Copies may be obtained from the Superintend- 
ent of Documents, United States Government 
Printing Office, Washington 25, D.C. for $3.25. 

663 



General Policy 

Report to the American People on the Far 
East. By Ambassador Philip C. Jessup . 

Evacuation of Americans in Shanghai by Sea 
Abandoned. Statement by Secretary 
Acheson 

Department Encouraged by India-Pakistan 
Talks. Statement by Secretary Ache- 
son 

Attack Against USIE Work at Praha Pro- 
tested: 
Unfounded Attack by Ivan Elbl .... 
Detention of Former Employees by Se- 
curity Police 

The American People's in U.S. Foreign 
Policy. By Edward W. Barrett, As- 
sistant Secretary for Public Affairs . . . 



Page 



627 



630 



631 



632 
632 



646 



Treaty Information 

Habana Charter for an International Trade 
Organization: 

Employment and Economic Activity . . 634 
Economic Development and Reconstruc- 
tion 636 

Economic Affairs 

Aspects of International Petroleum Policy . 640 

International Information and 
Cultural Affairs 

Attack Against USIE Work at Praha Pro- 
tested; 

Unfounded Attack by Ivan Elbl .... 632 
Detention of Former Employees by Se- 
curity Police 632 

German Lawmakers Visit United States . . 633 

Visit of Turkish Educator 633 

The United Nations and 
Specialized Agencies 

U.N. Documents: A Selected Bibhography . 639 
The United States in the United Nations . . 654 

National Security 

Plans for North Atlantic Council and Big 
Three Meetings. Statement by Secre- 
tary Acheson 651 



International Organizations F^e* 

and Conferences 

The American People's Part in U.S. Foreign 
Policy. By Edward W. Barrett, Assis- 
tant Secretary for Public Affairs . . . 646 

Two Members of Congress Named to Unesco 

National Commission 651 

Plans for North Atlantic Council and Big 
Three Meetings. Statement by Secre- 
tary Acheson 651 

Closing of Inter-American Ecosoc. Re- 
marks by Assistant Secretary Miller . . 650 

Regional Economic Conference To Be Held in 

Tokyo 653 

U.S. Delegations: 

Ilo Chemical Committee 652 

Pan American Congress of Architects . . 652 

The Department 

John B. Blandford, Jr. Assumes Near East 

Advisory Commission Post 649 

Senator McCarthy Discards First Charges 
and Shifts to Innuendo: 
Statement by Deputy Under Secretary 

Peurifoy 655 

Letter From OWI Files Made Available to 
Senator McCarthy. Text of Letter 
From Deputy Under Secretary Peuri- 
foy to Senator McCarthy 655 

Telegram to Secretary Acheson From 

Senator McCarthy 667 

Assistant Secretary Barrett Scores McCarthy 

Charges 658 

The Secretary Expresses Appreciation to Far 

Eastern Consultants 659 

Joseph B. Phillips As Consultant on Public 

Affairs 659 

Archival and Records Functions Transferred 

to General Services Administration . . 660 
Reorganization Plan No. 20 of 1950 .... 660 
William "T. Stone Denies Interceding in 

Wheeler Case 661 

Departmental Status of Ambassador Jessup, 
John S. Cooper, and John Foster Dulles. 
Statement by Secretary Acheson . . . 661 
John Foster Dulles Appointed Consultant to 

the Secretary 662 

The Congress 

Legislation 631 

Publications 

Recent Releases 662 

"Germany, 1947-49: The Story in Docu- 
ments" Released 663 



». I. GOVERNMENT HINTINO OFPlCti l»10 



^/i€/ ^eha'}it't7ten(/ ^a^ Cnate/ 






U.S.S.R. FIRES ON U.S. NAVY PLANE 667 

THREATS TO DEMOCRACY AND ITS WAY OF 

LIFE • By Secretary Acheaon 673 

GOING FORWARD WITH A CAMPAIGN OF TRUTH . 

By President Truman 669 

THE rrO CHARTER— A CODE OF FAIR TRADE 

PRACTICES • Statement by Secretary Acheson . . . 689 



For complete contents see back cover 



Vol. XXII, No. 565 
May 1, 1950 





^. a^w^r.. bulletin 



Vol. XXII, No. 565 • Publication 3832 
Ma\ 1, 1950 



For sale by the Superintendent of Documents 

U.S. Government Printing Ofiice 

Washington 25, D.C. 

Price: 

£2 issues, domestic $6, foreign $8.60 

Single copy, 20 cents 

The printing of this publication has 
been approved by the Director of the 
Bureau of the Budget (February 18, 1849). 

Note: Contents of this publication are not 
copyrighted and items conUiined herein may 
be reprinted. Citation of the Department 
or State Bct.i.etin as the source will be 
appreciated. 



The Department of State BULLETIN, 
a weekly publication compiled and 
edited in the Division of Publications, 
Office of Public Affairs, provides the 
public and interested agencies of 
the Government with information on 
developments in the field of foreign 
relations and on the work of the De- 
partment of State and the Foreign 
Service. The BULLETIN includes 
press releases on foreign policy issued 
by the White House and the Depart- 
ment, and statements and addresses 
made by the President and by the 
Secretary of State and other officers 
of the Department, as well as special 
articles on various phases of inter- 
national affairs and the functions of 
the Department. Information is in- 
cluded concerning treaties and in- 
ternational agreements to which the 
United States is or may become a 
party and treaties of general inter- 
national interest. 

Publications of the Department, as 
well as legislative material in the field 
of internatioruil relations, are listed 
currently. 



U.S.S.R. FIRES ON U.S. NAVY PLANE 



U.S. Asks Thorough Investigation and Appropriate Indemnity 



EXCHANGE OF NOTES 

The followhiff is the text of a note dated April 18, 1950, 
from Ambassador Alan O. Kirk to the Soviet Minister for 
Foreign Affairs. 

[Released to the press April 18] 

The Ambassador of the United States of 
America presents his compliments to the Minister 
for Foreign Affaire of the Union of Soviet Social- 
ist Republics and, with reference to the note of 
the Ministry of Foreign Affairs of April 11, 1950, 
has the honor to state that the only American mili- 
tary aircraft which was in the air in the Baltic 
area on April 8, 1950, was a United States Navy 
Privateer airplane which disappeared on that date 
and no trace of its crew has since been found. 

The United States Navy airplane carried ten 
persons. It was wholly unarmed. It left Wies- 
baden at 10: 31 a. m. Greenwich time for a flight 
over the Baltic Sea and two and one-half hours 
later reported by radio crossing the coast line of 
the British Zone of Germany. All American 
military aircraft operate under strict instructions 
to avoid flying over any foreign territory in the 
absence of express permission for such a flight 
from the appropriate foreign government. The 
investigation conducted by the United States 
Government has convinced it that the United 
States Navy airplane in question complied strictly 
with these instructions and did not fly over any 
Soviet or Soviet-occupied territory or territorial 
waters adjacent thereto. 

In the Ministry's communication under refer- 
ence the Soviet Government acknowledges that 
one of its fighter aircraft fired upon an American 



plane on April 8, 1950, at 5 : 30 p. m. Moscow time. 
In view of the fact that the only American mili- 
tary airplane which was in the air in the Baltic 
area on that date was the unarmed United States 
Navy airplane mentioned above and that this air- 
plane was at no time after it crossed the coast line 
of Germany over any foreign territory or tem- 
torial waters, it must be concluded that Soviet 
military aircraft fired upon an unarmed Ameri- 
can plane over the open sea, following which the 
American airplane was lost. 

The Ambassador of the United States has been 
instructed to protest in the most solemn manner 
against this violation of international law and 
of the most elementary rules of peaceful conduct 
between nations. The United States Government 
demands that the Soviet Government institute a 
prompt and thorough investigation of this matter 
in order that the facts set forth above may be con- 
firmed to its satisfaction. The United States 
Government further demands that the most strict 
and categorical instructions be issued to the Soviet 
Air Force that there be no repetition, under what- 
ever pretext, of incidents of this kind which are 
so clearly calculated to magnify the difficulties of 
maintaining peaceful and correct international 
relationships. 

The United States Government confidently ex- 
pects that, when its investigation is completed, the 
Soviet Government will express its regret for the 
unlawful and provocative behavior of its aviators, 
will see to it that those responsible for this action 
are promptly and severely punished, and will, in 
accordance with established custom among peace- 
loving nations, pay appropriate idemnity for the 



May 1, 1950 



I). S. SUPERINTENDENT OF DOCUMENT^ 



667 



1 i » "1 1 1 ::: i \ 



unprovoked destruction of American lives and 
property. 



The foUotoing is a translation of a note handed on April 
11, 1950, to Ambassador Kirk from the Soviet Minister for 
Foreign Affairs, Andrei Vyshinsky. 

The Government of the Union of Soviet So- 
cialist Republics considers it necessary to state 
the following to the Government of the United 
States of America : 

According to verified data, on 8 April this year 
at 17 hours 39 minutes, there was observed south 
of Libava (Libau) a four-motored military air- 
plane B-29 (Flying Fortress) with American 
identification signs, which went into territory of 
the Soviet Union for 21 kilometers. As the Amer- 
ican airplane continued going deeper into Soviet 
territory, a flight of Soviet fighters arose from a 
nearby airdrome, demanding that the American 
airplane follow them for landing at the airdrome. 
The American airplane not only did not submit 
to this demand but opened fire on the Soviet air- 
planes. In view of this, the leading Soviet fighter 
was compelled to return fire, after which the Amer- 
ican airplane turned towj^rd the sea and disap- 
peared. 

The Soviet Government states a resolute protest 
to the Government of the United States of America 
against the gross violation of the Soviet border by 
an American military airplane, which is at the 
same time an unheard of violation of elementary 
standards of International Law. 

Moscx)W, 11 April 1950. 



STATEMENT BY SECRETARY ACHESON 

[Released to the press April 21] 

Ambassador Alan G. Kirk has notified us that 
he saw Foreign Minister Vyshinski at noon today 
at the latter's request, at which time the Foreign 
Minister handed him a note in reply to ours of 
April 18 concerning the loss of the American 
naval airplane in the Baltic area. 

We have just received the full text of the note 
which is being studied. Until the full contents 
of the note are examined by Departmental 
officials, I cannot, of course, make any full state- 
ment with regard to this Government's future 
course of action. 



A brief perusal of the note indicates, however, 
that the Soviet Government continues to defend 
its fictitious allegations that a B-29 airplane 
violated Soviet territory and fired at Soviet fighter 
aircraft. As you know, this Government had in- 
formed the Soviet Government that the only 
American military aircraft in the air in the Baltic 
area on April 8, 1950, was an unarmed United 
States Navy Privateer airplane. 

It seems obvious that the Soviet Government 
has made no attempt to institute a real investiga- 
tion of the matter in accordance with our request. 
. Until the Soviet note can be examined by the 
Department, I do not wish to make any further 
comment with regard to it except to say that there 
does not appear to be any new information in the 
note which would cause this Government to alter 
its position as set forth in its note of April 18. 



STATEMENT BY MICHAEL J. McDERMOTT 
CHIEF PRESS OFFICER 

[Released to the press April 18] 

The American Ambassador at Moscow has pre- 
sented to the Soviet Ministry of Foreign Affairs 
tlie United States Government's reply to the recent 
Soviet protest against an alleged violation of So- 
viet occupied territory by an American aircraft. 
The American reply corrects the distortions of 
fact which the Soviet Government has injected 
into the incident and puts the matter in its true 
light as an attack against unarmed Americans. 

After investigation it has been determined that 
the facts of the matter are as follows : An unarmed 
American Navy plane with 10 persons aboard was 
shot down by Soviet fighter planes over the open 
waters of the Baltic Sea. No survivors have been 
found despite an extensive search. 

The Scandinavian countries have been very 
helpful and cooperative in the humanitarian res- 
cue work undertaken in connection with the dis- 
appearance of this plane. The American Govern- 
ment is deeply grateful for their assistance, which 
has rendered possible the thorough search under- 
taken throughout the past week. By contrast, 
there has not been the slightest evidence of any 
concern on the part of the Soviet Goverimient over 
the fate of our plane and its personnel. This 
seems an astonishing lack of common international 
courtesy and an unusual disregard for the loss of 
human life. 

(Continued on page 69S) 



668 



Department of Sfafe Bulletin 



GOING FORWARD WITH A CAMPAIGN OF TRUTH 



Address by President Truman ' 



Mr. Chairman, Distingcisiied Guests, Mem- 

nERS OF THE AmEKICAN SoCIETY OF NEWSPAPER 

Editors : I am happy to be here today with this 
group of editors. You and I have a great many 
important problems in common, and one of the 
most important of these is the responsibility we 
share in helping to make the foreign policj' of 
the United States of America. That is why I am 
going to take this opportunity to discuss with you 
some aspects of that policy. 

Responsibilities of the Press 

No group of men in this country is of greater 
importance to our foreign policy than the group 
your society represents. 

In a democracy, foreign policy is based on the 
decisions of the people. 

One vital function of a free press is to present 
the facts on which the citizens of a democracy 
can base their decisions. You are a link between 
the American people and world affairs. If you 
inform the people well and completelj', their de- 
cisions will be good. If you misinform them, 
their decisions will be bad ; our country will suffer 
and the world will suffer. 

You cannot make up people's minds for them. 
"\Miat you can do is to give them the facts they 
need to make up their own minds. That is a 
tremendous responsibility. 

Most of you are meeting that responsibility 
well — but I am sorry to say a few are meeting it 
badl}'. Foreign policy is not a matter for partisan 
presentation. The facts about Europe or Asia 

' Made before a meeting of the American Society of 
Newspaper Editors in Washington on Apr. 20, 1950, and 
released to the press on the same date. 



should not be twisted to conform to one side or 
the other of a political dispute. Twisting the 
facts might change the course of an election at 
home, but it would certainly damage our country's 
program abroad. 

In many other countries today, the papers print 
about foreign affairs only what their governments 
tell them to print. They can't add anything, or 
cut anything. In the democracies, the papers 
have a free hand. Only in a democracy is there 
such mutual trust and confidence among citizens 
that a private group is given such an all-important 
role in determining what the Nation as a whole 
shall do. There is too much nonsense about 
striped trousers in foreign affairs. Far more in- 
fluence is exerted by the baggy pants of the 
managing editor. 

There has never been a time in our history when 
there was so great a need for our citizens to be 
informed and to understand what is happening 
in the world. 

The cause of freedom is being challenged 
throughout the world today by the forces of im- 
perialistic communism. This is a struggle, above 
all else, for the minds of men. Propaganda is 
one of the most powerful weapons the Communists 
have in this struggle. Deceit, distortion, and lies 
are systematically used by them as a matter of 
deliberate policy. 

This propaganda can be overcome by truth — 
plain, simple, unvarnished truth — presented by 
newspapers, radio, and other sources that the peo- 
ple trust. If the people are not told the trutli, or 
if they do not have confidence in the accuracy and 
fairness of the press, they have no defense against 
falsehoods. But if they are given the true facts, 



May 1, 1950 



669 



these falsehoods become laughable instead of 
dangerous. 

We can have confidence that the free press of 
the United States and most of the other free na- 
tions will keep us from being deceived by Com- 
munist propaganda. But in other parts of the 
world, the struggle between falsehood and truth 
is far more intense and dangerous. 

False Promise of Communism 

Communist propaganda is so false, so crude, so 
blatant, that we wonder how men can be swayed 
by it. We forget that most of the people to whom 
it Ls directed do not have free access to accurate 
information. We forget that they do not hear 
our broadcasts or read impartial newspapers. We 
forget that they do not have a chance to learn 
the truth by traveling abroad or by talking freely 
to travelers in their own countries. 

All too often the people who are subject to Com- 
munist propaganda do not know Americans, or 
citizens of the other free nations, as we really are. 
They do not know us as farmers or as workers. 
They do not know us as people having hopes and 
problems like their own. Our way of life is 
something strange to them. They do not even 
know what we mean when we say "democracy." 

This presents one of the greatest tasks facing 
the free nations today. That task is nothing less 
than to meet false propaganda with truth all 
around the globe. Everywhere that the propa- 
ganda of Communist totalitarianism is spread, 
we must meet it and overcome it with honest in- 
formation about freedom and democracy. 

In recent years, there has been tremendous prog- 
ress all over the world in education and the ex- 
change of ideas. This progress has stirred men 
everywhere to new desires and new ambitions. 
They want greater knowledge, they want better 
lives, they want to be masters of their own affairs. 
We have helped and encouraged these people, 
but the Communists have seized upon their de- 
sires and ambitions and are seeking to exploit 
them for their own selfish purposes. 

In the Far East, for example, millions are rest- 
lessly seeking to break away from the conditions 
of poverty and misery that have surrounded them 
in the past. The Communists understand this 
situation very well. They are trying to move in 
and take advantage of these aspirations. They 
are making glittering promises about the benefits 
of communism. They reach directly to the peas- 



ant or the villager in these vast areas and talk to 
him directly in his own tongue about the things 
he has learned to desire. They say that they can 
get these things for him. And too often he hears 
no voice from our side to dispute them. 

We know how false these Communist promises 
are. But it is not enough for us to know this. 
Unless we get the real story across to people in 
other countries, we will lose the battle for men's 
minds by default. 

The Communist propaganda portrays the So- 
viet Union as the world's foremost advocate of 
peace and the protector of defenseless peoples. 
The contradiction between what the Communist 
leaders have promised and what they have actu- 
ally done is so startling that we are amazed that I 
anyone can be deceived. In Berlin, in Czecho- 
slovakia, in the Balkans, in the Far East, they 
have proved, time after time, that their talk about 
peace is only a cloak for imperialism. But their 
intended victims will not learn these facts from 
Soviet propaganda. We are the ones who must 
make sure that the truth about communism is 
known everywhere. 

Discrediting Free Nations 

At the same time, we must overcome the con- 
stant stream of slander and vilification that the 
Communists pour out in an effort to discredit the 
United States and other free nations. 

Soviet propaganda constantly reviles the United 
States as a nation of "warmongers" and "imperial- 
ists." You and I know how absurd that is. We 
know that the United States is wholly dedicated 
to the cause of peace. We have no purpose of go- 
ing to war except in defense of freedom. Our 
actions demonstrate that we mean exactly what we 
say. But when men throughout the world are 
making their choice between communism and de- 
mocracy, the important thing is not what we know 
about our purposes and our actions — the important 
thing is what they know. 

Communist propaganda also seeks to destroy our 
influence in the world by saying the American 
economy is weak and about to collapse. We know 
this is preposterous. The industrial production 
of the United States is equal to that of the rest of 
the world combined. Our agricultural production 
is more than adequate for our needs. Our people 
enjoy the highest standard of living in the world's 
history. Our economic strength is the bulwark of 
the free world. 



670 



Deporfmenf of State Bulletin 



From every standpoint, our free way of life is 
vastly superior to the system of oppression which 
the Communists seek to impose upon mankind. 
In many parts of the world, however, where men 
must choose between freedom and communism, 
the true story is going untold. 

We cannot run the risk that nations may be 
lost to the cause of freedom because their people 
do not know the facts. 

Extending Democratic Freedoms 

I am con\nnced that we should greatly extend 
and strengthen our efforts for making the truth 
known to people in all the world. 

Most of us have recognized for years, of course, 
how important it is to spread the truth about free- 
dom and democracy. We are already doing some 
very good work — through the Voice of America 
and the United States information offices and li- 
braries in many parts of the world, through the 
exchange of students, through the United Nations 
and its affiliated organizations, and in other ways. 
But events have shown, I believe, that we need to 
do much more, both ourselves and in collaboration 
with the other free nations. We must use every 
means at our command, private as well as govern- 
mental, to get the truth to other peoples. 

Private groups and organizations have an im- 
portant part to play. Our labor unions have al- 
read}' done fine work in communicating with labor 
in Europe, in Latin America, and elsewhere. The 
story of free American labor, told by American 
trade unionists, is a better weapon against Com- 
I munist propaganda among workers in other coun- 
tries than any number of speeches by government 
officials. 

The same principle applies to other groups. 
Tlie best waj' for farmers in other countries to 
find out about us is to talk directly with our own 
farmers. Our businessmen can speak directly to 
businessmen abroad. We need to promote much 
more direct contact between our people and those 
of other countries. 

We should encourage many more people from 
other countries to visit us here, to see for them- 
selves what is true and what is not true about our 
country. We should find more opportunities for 
foreign students to study in our schools and uni- 
versities. They will learn here the skills and tech- 
niques needed in their own countries. They will 
also see at first hand the rights and duties of citi- 
zens in our land of democratic institutions. 



Our colleges should train more Americans to 
go abroad as teachers, especially to teach modem 
methods of farming, industry, and public health — 
and, by example, to teach our concepts of de- 
mocracy. The notable record of our many chari- 
table and religious organizations who .send teachers 
abroad is proof of what can be done. 

Another major part of our effort must be carried 
out through our great public information chan- 
nels — newspapers and magazines, radio, and mo- 
tion pictures. We must strive constantly to break 
down or leap over barriers to free communication 
wherever they exist. We must make full use of 
every effective means of communicating informa- 
tion, in simple, understandable form, to people 
whose backgrounds and cultures are different from 
ours. 

This poses an enormous challenge to groups 
such as yours, a challenge which can be met only 
by extraordinary inventiveness and enterprise. 
I am confident that the American press can and 
will make a tremendously useful contribution to- 
ward finding new solutions. 

The Government's programs for telling the 
truth about the United States to the peoples of 
the world also need constant improvement. Our 
present overseas information and educational ex- 
change program is getting results. For example, 
the Voice of America has been carrying to peo- 
ple behind the Iron Curtain the true story of world 
events. It has been so successful that the Soviet 
Government is using a vast amount of costly equip- 
ment in an attempt to drown out our broadcasts 
by jamming. We must devise ways to break 
through that jamming and get our message across. 
And we must improve and strengthen our whole 
range of information and educational services. 

This is not a conclusion reached by Government 
officials alone. We have had the valuable aid of 
the United States Advisory Commission on Infor- 
mation created by the Congress. Your own so- 
ciety is ably represented on that Commission by 
Murk Ethridge and Erwin D. Canham. The 
members of the Commission have given intensive 
study to the overseas information program and 
have made repeated recommendations that it be 
substantially expanded. Similar reconnnenda- 
tions for the exchange program have been made 
by the Advisory Commission on Education, 
headed by Dr. Harvie Branscomb. I have been 
glad to see that many Members of the Congress 
have urged an improved and expanded program 



May 1, 1950 



671 



in these fields — as shown, for example, by the reso- 
lution introduced recently by Senator Benton for 
himself and a number of his colleagues. 

Because of the pressing need to increase our ef- 
forts along this line, I have directed the Secretary 
of State to plan a strengthened and more effective 
national effort to use the great power of truth in 
working for peace. This effort will require the 
imagination and energies of private individuals 
and groups throughout the country. We shall 
need to use fully all the private and governmental 
means that have proved successful so far — and to 
discover and employ new ones. 

Reaching Upward Through Truth 

Our task is to present the truth to the millions 
of people who are uninformed or misinformed or 
unconvinced. Our task is to reach them in their 
daily lives, as they work and learn. We must be 
alert, ingenious, and diligent in reaching peoples 
of other countries, whatever their educational and 
cultural backgrounds may be. Our task is to show 
them that freedom is the way to economic and so- 
cial advancement, the way to political independ- 
ence, the way to strength, happiness, and peace. 

This task is not separate and distinct from other 



elements of our foreign policy. It is a necessary 
part of all we are doing to build a peaceful world. 
It is as important as armed strength or economic 
aid. The Marshall Plan, military aid, Point 4 — 
these and other programs depend for their success 
on the understanding and support of our own citi- 
zens and those of other countries. 

We must make ourselves known as we really 
are — not as Communist propaganda pictures us. 
We must pool our efforts with those of the other 
free peoples in a sustained, intensified program to 
promote the cause of freedom against the propa- 
ganda of slavery. We must make ourselves heard 
round the world in a great campaign of truth. 

We have tremendous advantages in the struggle 
for men's minds and loyalties. We have truth 
and freedom on our side. The appeal of free in- 
stitutions and self-government springs from the 
deepest and noblest aspirations of mankind. It 
is based on every man's desire for liberty and op- 
portunity. It is based on every man's wish to be 
self-reliant and to shape his own destiny. 

As we go forward with our campaign of truth, 
we will make lasting progi-ess toward the kind of 
world we seek — a world in which men and nations 
live not as enemies but as brothers. 



THE CONGRESS 



Legislation 

International Technical Cooperation Act of 1949 ("Point 
IV" Program) : Hearings before the Committee on For- 
eign Affairs, House of Representatives, 81st Cong., 2d 
sess., on H. R. 5615, a bill to promote the foreign iwlicy 
of the United States and to authorize participation in a 
cooperative endeavor for assisting in the development of 
economically underdeveloped areas of the vporld ; Sep- 
tember 27, 28, 30, October 3, 4, 5, G, and 7, 1949. iv, 360 
pp. [Indexed.] 

Act for International Development ("Point IV" Pro- 
gram) : Hearings before the Committee on Foreign Af- 
fairs, House of Representatives, 81st Cong., 1st and 2d 
sess., on H. R. 5015, H. R. 0026, H. R. 6834, H. R. 6835, 
and H. R. 7346, bills to promote the foreign policy of 
the United States and to authorize participation in a 
cooperative endeavor for assisting in the development of 
economically underdeveloped areas of the vforld ; Part 
2, January 12, 13, and 17, 1950. vi, 524 pp. x. [Indexed.] 

Act for International Development: Hearings before 
the Committee on Foreign Relations, United States Senate, 
8lKt Cong., 2d sess., on an act for international develop- 
ment; March 30 and April 3, 1950. iii, 124 pp. [Depart- 
ment of State, pp. 3-39.] 

To Amend the Economic Cooperation Act of 1948, as 
Amended : Hearings before the Committee on Foreign 



Affairs, House of Representatives, 81st Cong., 2d sess. on 
H. R. 7378, a bill to amend the economic cooperation act 
of 1948, as amended; Part 1, February 21, 22, 24, 28, 
March 1, 2, 1950. iv, 243 pp., xvii. [Indexed.] 

— H. R. 7378 and H. R. 7797 . . . Part 2, March 3, 
7, 8, 9, 10, 14, 15, 1950. v, pp. 254-616, xxi. [Indexed.] 

Extension of European Recover.v — 1950 : Hearings be- 
fore the Committee on Foreign Relations, United States 
Senate, 81st Cong., 2d sess., on S. 3101, a bill to amend 
the Economic Cooperation Act of 1948, as amended ; Feb- 
ruary 21, 22, 23, 24, 27, 28, and March 3 and 7, 1950. iii, 
413 pp. [Department of State, pp. 13-17, 93-110, 355- 
303.] 

Foreign Aid Appropriations for 1951 : Hearings before 
the subcommittee of the Committee on Appropriations, 
House of Representatives, 81st Cong., 2d sess. ii, 684 pp. 
[Indexed.] 

Department of State Appropriations for 1951 : Hearings 
before the subcommittee of the Committee on Appropria- 
tions, House of Representatives, 81st Cong., 2d sess. ; Part 
1. ii, pp. 517-963. 

January 19.50 Economic Report of the President: Hear- 
ings before the Joint Comimttee on the Economic Report, 
Congress of talie United States, Slst Cong., 2d sess., 
pursuant to Sec. 5 (A) of Public Lav? 304 (79th Congress) ; 
January 17, 18, 19, 20, 1950. iii, 297 pp. 

Proposing an Amendment to the Constitution of the 
United States for the Election of President and Vice 
President. II. Rept. 1858, 81st Cong., 2d sess.. To accom- 
pany S. J. Res. 2. 5 pp. 

Preparatory Commission for the International Refugee 
Organization. H. Rept. 1870, Slst Cong., 2d sess.. To 
accompany H. R. 5863. 6 pp. 

Permitting .Acceptance of Foreign Decorations for Par- 
ticipation in the Berlin Airlift. H. Rept. 1878, 81st Cong., 
2d sess.. To accompany H. R. 6820. 3 pp. 



672 



Deparfmenf of State Bulletin 



THREATS TO DEMOCRACY AND ITS WAY OF LIFE 



Address hy Secretary Acheson ' 



Tonight. I would like to discuss with you the 
thin": that is most important to all of us: the 
well-being and hajipiness and security of the 
United States. 

I ask you to put aside, for the moment, all con- 
siderations that are less important, to forget all 
differences of opinion that are less than vital, and 
to consider with me this most important problem 
of the security and well-being of our country. 

We are faced with a threat — in all sober truth 
I say this — we are faced with a threat not only 
to our country but also to the civilization in which 
we live and to the whole physical environment in 
which that civilization can exist. This threat is 
the principal problem that confronts the whole 
United States in the world today. 

To understand this threat to our country and 
our civilization, we have to go back 200 years and 
examine the ideas on which the United States was 
founded. We could go back more than 2,000 
years, to the very beginning of Western civiliza- 
tion. For more than 2,000 years, the ideas we 
inherited, and live by today, have been fought 
over, have been suppressed, and have been reborn 
in the minds of men. 

The adventurous people who settled the eastern 
shores of North America in the seventeenth and 
eighteenth centuries brought with them certain 
ideas whicli had come down to them through the 
whole stormy history of civilization. The first 
of those ideas was freedom — freedom of the mind 
and spirit, the most dynamic and adventurous 
idea ever to seize the mind of man. It drove 
men — and it continues to drive men — to inquire 

' Delivered before the American Society of Newspaper 
Editors, Wasliington, D.C., Apr. 22, 1950, and released to 
the press on the same date. 



into the relation between man and God ; to study 
the nature of the universe ; to explore the purpose 
of human society. 

Every thought we have in our minds, every re- 
lationship we have in our private lives, every insti- 
tution under which we live, all of modern science 
has been moulded, and in many cases created, by 
the exercise of the freedom of the human mind. 

The second principle on which this country was 
built is the idea of diversity. If you have free- 
dom of the mind, you are bound to have diversity, 
and you are bound to welcome it. We welcome 
people who think differently from ourselves. We 
welcome people with new ideas. We will not be 
chained to ideas of the past. We resist conform- 
ity. We refuse to be crammed into a single nar- 
row pattern. 

These ideas, freedom and diversity, have sur- 
vived and flourished here in the United States 
because we accept and practice a third idea — and 
that is tolerance. We say, and we believe, "My 
freedom, my right to be different, depends on 
yours. I can be free only to the extent that you 
are free too." 

The only limitation we put upon the exercise of 
freedom is that each of us must use it so that others 
can have the same right. I must exercise my free- 
dom in such a way that it does not interfere with 
your freedom. 

So it is these great concepts that have under- 
lain the whole development of our civilization, not 
as mere abstract thoughts but as the very life 
blood, the dynamic push, which has created the 
civilization we know. 

The threat we are facing is to these great con- 
cepts. It comes from a system which denies every 
premise we hold valid. 



May J, J950 



673 



Soviet communism does not permit divereity of 
ideas. Freedom, this doctrine says, is an evil 
thing. It says that people who exercise freedom 
of thought, people who dare to depart from the 
doctrine laid down in the Kremlin in Moscow 
are criminals. It puts such people behind bars, 
or it puts them to death. 

Now this threat of Soviet communism would 
be serious enough if it were just the old idea of 
tyranny that was challenging our idea of freedom. 
It is that, but it is infinitely more than that. 

This fanatical doctrine dominates one of the 
great states in this world, a state which, with its 
satellites, conti'ols the lives of hundreds of millions 
of people, and which today possesses the largest 
military establishment in existence. 

That would be serious enough. But, it is even 
more serious than that, because those who hold 
and practice this doctrine pick out our country as 
the principal target of their attack. From their 
point of view they pick it out rightly. It is our 
country, with its belief in freedom and tolerance, 
its great productive power, its tremendous vital- 
ity, whicli stands between the Kremlin and do- 
minion over the entire world. We must not forget 
that it is we, the American people, who have been 
picked out as the princijjal target of the Soviet 
Communists. 

Added to all this is the fact that these people 
use the great resources of modern science, particu- 
larly those that have to do with an understanding 
of the liuman mind, to pervert the human mind. 
They resort to every trick, to every insidious and 
brutal device to destroy what we think is essen- 
tial — the self-respect of the individual, the integ- 
rity of his mind and spirit. 

What do we mean when we say that our country 
is the principal target of Soviet communism ? We 
mean that the Soviet authorities would use, and 
gladly use, any means at their command to weaken 
and to liarm us. Although, they have not thought 
it wise to use military force against us, they are 
trying otlier methods. One method is the attempt 
to confuse and divide the American people. 

If the United States can be confused and di- 
vided; if it can be made to doubt the desirability 
of helping other free nations; if it can be brought 
to doubt the desirability of maintaining its own 
defenses; if we cease to be rational and resolute; 
if we can be brought to doubt one another — then 
we will be softened up. Then, we will be too 
weak to stand up to Communist thrusts in other 



parts of the world, and too divided and confused 
to stand up to Communist infiltration at home. 
To create that situation is one of the main objec- 
tives of the people in the Kremlin. 

They have another objective, which is to pick 
off members of the free conununity of nations one 
by one. They do that partly to add to their power. 
But, they have another important purpose and 
that is to build up the idea that communism is in- 
evitable, that it is the "wave of the future." 

They believe that that gives other countries a 
sense of fright and hopelessness. They think that 
if they can spread this idea of a Communist world 
closing in on us, then we will begin to get rattled, 
and some people will move in one direction and 
otliers will move in another direction, and the 
United States will be torn apart. 

The men in the Kremlin have another clear ob- 
jective, and that is to change the balance of pro- 
ductive power in the world. At present, that 
balance is very strongly against them, but that 
would not be so if they could get control in West- 
ern Europe and in Japan. 

So I say to you — make no mistake about it : We 
are faced with a challenge and a threat to the very 
basis of our civilization and to the very safety of 
the free world, the only kind of world in which 
that civilization can exist. 

Now, in this situation, we have a great many 
suggestions and proposals put forward by leaders 
of American life, and by citizens who are con- 
cerned — and rightly concerned — about the uneasy 
and troubled state of our world. It is a good 
thing that people are thinking about these prob- 
lems and suggesting ways to meet them. The 
only point I want to make about these proposals 
is that, while some of them are practical and 
others are not, no single proposal is the whole an- 
swer to our problems. No one of them is the 
answer because there is no one answer. There is 
no one solution to the problems I have described 
to you. There is no quick or easy way to subdue 
an evil force. There is no miracle that will make 
it disappear from the earth. 

Having recognized this truth, we need not for 
a moment be discouraged or downhearted. We 
luive open to us, and we are now pursuing, many 
lines of action that will meet the challenge con- 
fronting us. May I mention six lines of action. 

Our first line of action — and this seems to me 
the basis of all the others I shall discuss — is to 
demonstrate that our own faith in freedom is a 



674 



Deparfmenf of Sfate Bullel'm 



buniinfr and a fighting faith. We are ohiUlien 
of freedom. We cannot be safe except in an en- 
vironment of freedom. We believe in freedom as 
finulamentally as we believe anything in this 
world. We believe in it for everyone in our coun- 
try. And, we don't restrict this belief to freedom 
for ourselves. We believe that all people in the 
world are entitled to as much freedom, to develop 
in their own way, as we want ourselves. 

If we are clear about this, if we are full of 
passion about this, then we have in our hearts and 
minds the most dynamic and revolutionary con- 
cept in human history, and one which properly 
strikes terror to every dictator, to every tyrant 
who would attempt to regiment and depress men 
anywhere. 

TVliy do I put a strong belief in freedom first 
in the order of an American program of action? 
Because it is fundamental, because the second line 
of action flows from it. As tlie President said 
to you so forcefully on Thursday, the United 
States must, with a thousand voices and with all 
the resources of modern science, preach this doc- 
trine throughout the world. The world must hear 
what America is about, what America believes, 
what freedom is, what it has done for many, what 
it can do for all. 

We must use every means we know to com- 
municate the value of freedom to the four corners 
of the earth. Our message must go out through 
leaflets, through our free press, radio programs, 
and films, through exchange of students and 
teachers with other countries, and through a hun- 
dred other ways. And, this doctrine of freedom 
will carry conviction, because it comes not out of 
the Government alone but also out of the hearts 
and souls of the people of the United States. 
Because it is the authentic voice of America, free- 
dom will ring around the world. President Tru- 
man has told you of his plans for an expanded 
information program — a campaign of truth. I 
know we can count on your help in this, because 
the turning point in the whole information pro- 
gram dates from the action of this very Association 
just 3 years ago. 

Thirdly, it is not enough that one should have 
a faith and should make that faith articulate. It 
is also essential that we, and those who think like 
us, should have the power to make safe the area in 
which we carry that faith into action. This means 
that we must look to our defenses. It means that 
we must organize our defenses wisely and pru- 



dently, with all the ingenuity and all the methods 
in which we are best versetl to make ourselves 
strong. 

Eveiy element of promise is present in our 
situation. We have tiie ingenuity; we have the 
productive power; we have the determination; we 
have the resources. But, this is not a subject on 
which I am competent to dwell at length. The 
President's chief advisers in this field are our 
Secretary of Defense and our service secretaries, 
in whom we can have complete faith and 
confidence. 

Fourthly, beyond faith and preachment and 
defense there lies the necessity of translating all 
of these into terms of the daily lives of hundreds 
of millions of peoples who live in this free world 
of ours. I am talking about the effort we are 
now making to help create a better material life 
for ourselves and for other people in many parts 
of the world. 

One part of this effort has to do with setting 
in operation again the great workshops of the 
free world. Since the end of the war, we have 
worked steadily at this problem and we have had 
a vast measure of success. The chimneys of these 
factories are smoking again ; raw materials are 
moving into them; finished goods are moving out. 
Hundreds of millions of people .see the specter 
of insecurity in their daily lives being pushed 
further back. 

Another part of this effort to develop the eco- 
nomic conditions for freedom is to help create 
new workshops, new crops, new wealth in places 
where they have not existed before. That is the 
purpose of the President's program of technical 
assistance for underdeveloped areas, now before 
the Congress. 

As you know, there are great areas of the world 
where people are living in a state of extreme 
poverty that is almost impossible for us to 
imagine. Millions of these people are not content 
any more to accept these conditions of poverty for 
themselves or their children. They are looking 
for a way out. That is a good thing. The will to 
change is half the battle. But, the question is 
whether these people will choose a way out that 
leads to freedom. The question is whether they 
will move ahead in the free world with us. If we 
want them to move in the direction of freedom, 
we must help them. 

It is as simple as that — but it is tremendously 
important to the United States, to our security 



May h 1950 



675 



and well-being. And so, we must put a great 
effort behind this program. 

Now while we are helping to get workshops 
going — old and new — and to get people produc- 
ing in Europe and other parts of the world, we 
have to do still another thing. And that is to 
develop a sensible system of trade to exchange the 
goods which are being and will be produced. This 
free world of ours can't operate if people are 
cooped up within narrow national limits, if they 
are not able to move about freely and exchange 
their goods, their services, and their ideas and 
knowledge. Building up an orderly and free sys- 
tem of exchange is what we mean when we talk 
about expanding world trade. To develop a sen- 
sible system of exchange, we must push ahead 
with such things as the International Trade 
Organization, and reciprocal trade agreements. 

We are going to have to make a great national 
effort, also, to get our own trade with the rest of 
the world into balance, to get out of the situation 
where we are selling abroad much more than we 
are buying and making up the difference out of 
the pockets of American taxpayers. Nobody here 
or abroad wants that situation to continue in- 
definitely. As part of the remedy, we shall have 
to buy more from abroad, and that will demand a 
concerted national effort. 

The fifth line of action is in the political field. 
In this political field, we have so far only 
scratched Qie surface of what can be done to bring 
the free world closer together, to make it stronger 
and more secure and more effective. 

There are many ways of organizing the free 
world for common action and many different 
opinions on how it should be done. But, I think 
it is important in this hour of danger to concen- 
trate our minds and our energies on using the 
machinery we have at hand, on expanding it, and 
making it work. When you look over the field, 
you will see that we now have created a great deal 
of good machinery. 

There is the whole machinery of the United 
Nations which we are continually learning to use 
more effectively. Within the framework of the 
United Nations, we have other machinery, like 
the North Atlantic Treaty, and the Organization 
of American States. 

The free nations of Europe have banded to- 
gether in the Council of Europe, in the Marshall 
Plan organization, and in a smaller group known 
as Western Union. We can work with all of 



these organizations. We can use whichever is 
best suited to accomplish a particular purpose. 
What we need to do is to expand the machinery 
we have, to improve it, to use it with boldness and 
imagination, and, where necessary, to supplement 
it with new machinery. 

Now, our program of action would not be com- 
plete if I did not go on to a sixth field, and that 
is the area of our relations with the Soviet Union 
and the countries that have fallen under Commu- 
nist control. In this field, as in our relations with 
the free nations, we have the machinery of nego- 
tiation at hand. In the United Nations we have 
a dozen or more conference tables, at which our 
differences could be thrashed out, where unfor- 
tunately the Soviet chair stands empty at the pres- 
ent time. We shall go on trying to find a common 
ground for agreement, not perfect or eternal agree- 
ment, but, at least, a better arrangement for living 
together in greater safety. 

But, one thing is clear. There can be no agree- 
ment, there can be no approach to agreement unless 
one idea is done away with, and that is the idea 
of aggression. And that word "aggression" in- 
cludes not only military attack, but propaganda 
warfare and the secret undermining of free coun- 
tries from within. 

We do not propose to subvert the Soviet Union. 
We shall not attempt to undermine Soviet inde- 
pendence. And, we are just as determined that 
communism shall not by hook or crook or trickery 
undermine our country or any other free country 
that desires to maintain its freedom. That real 
and present threat of aggression stands in the way 
of every attempt at understanding with the Soviet 
Union. For it has been wisely said that there can 
be no greater disagreement than when someone 
wants to eliminate your existence altogether. 

If, as, and when that idea of aggression, by one 
means or another, can be ruled out of our relations 
with the Soviet Union, then the greatest single 
obstacle to agreement will be out of the way. As 
the results of our actions become clear and the free 
world becomes stronger, it will, I believe, become 
progressively easier to get agi'eements with the 
Soviet Union. 

These, then, are the main lines of action by the 
Government and people of the United States in 
dealing with their present danger. Now, you may 
be thinking, "Well, that's the story." But that is 
only the beginning of the story. 

On several occasions lately, I have used the 



676 



Department of Stale Bulletin 



phrase "total diplomacy" to describe a method of 
dealing with our problems. Let me explain again 
what I mean by "total diplomacy." 

I mean, first, that there is no longer any differ- 
ence between foreign questions and domestic ques- 
tions. They are all parts of the same question. 
When we consider any matter, whether it is the 
size of the budget or the amount of taxes we pay, 
or the regulation of our commerce, or the regula- 
tion of immigration, or military policy, or foreign 
aid. it is all part of the same thing. 

Every one of these things is a part of the prob- 
lem of our national safety, and every part of the 
problem is serious. 

All the problems of the United States are related 
to the problem of preserving its existence as the 
kind of a country which we know and love. 

When we understand this fact of the wholeness 
of our problem then we nmst go further and act on 
our understanding. 

In the last few years, the President has devel- 
oped methods by which all parts of the executive 
branch of the Government can be pulled together 
on all questions in the light of this total problem. 
Under the President's leadership — the State De- 
partment, the Treasury Department, the Defense 
Establishment, Agriculture, Labor, and all the 
others — have been brought into focus on the great 
problem of our national security. 

There must also be a close working together not 
only between the Congress and the Executive but 
also between both parties in the Congress and the 
Executive. 

That does not mean that a strong opposition is 
not essential. It is. Our two-party system is in- 
herent in our form of government. There is 
plenty of room for difference of opinion as to 
how this or that should be done. There is room 
for views strongly held and wisely debated. There 
is room for criticism. But, there is also room for 
a final consensus of opinion. We must work to- 
ward consensus of opinion; we must broaden the 
area of agreement so that the Congress and the 
Executive — both parties of the Congress and the 
Executive — will view every problem and deal with 
every problem as part of the total problem. 

What makes this possible is a common loyalty 
to our democratic institutions. We cannot use 
position or influence for the purpose of getting 
some personal or some partisan advantage with- 
out being disloyal to the institution of democratic 
government. 



But, more than the institution of democratic 
government is at stake. The threat, as I have 
said, is to our civilization, and each of us is a 
bearer of that civilization. And, therefore, each 
of us lias a part to play in this total diplomacy. 

Today, the whole United States is acting before 
the world as its own representative. In the old 
days, relations between countries were carried on 
by diplomats. In the old days, a man who held 
my office used to write out in beautiful script in- 
structions to a minister who represented the 
United States abroad in London, or Paris, or, 
Brussels, or Peking. And, those instructions 
where put on a sailing ship, and they took weeks 
to cross the ocean. And, the American Minister 
who received them put on his black knee breeches, 
and he walked to the palace or the foreign office, 
and he read what his Secretary of State in Wash- 
ington had written, and tliat was the United States 
speaking to some government in Europe or Asia. 

Now, all that is changed. Today, we all repre- 
sent the United States. Everything that hap- 
pens in this country can be flashed in a second to 
the uttermost reaches of the world. Today, in a 
very real sense, the United States represents itself 
to the world. The world hears speeches which are 
made in the Congress. The world hears what is 
said over our radio. The world reads what is 
said in our press. If there are acts or words of 
violence, discrimination, and irresponsibility, the 
world sees and hears them. If there are acts or 
words of justice, understanding, and sober deter- 
mination, the woi'ld sees and hears them also. 

America speaks with a thousand voices. All 
the views of our labor leaders, our business leaders, 
our church leaders, our educational leaders, our 
leaders of women's and men's groups and clubs — 
all the things they do and say flash around the 
world. Everything that we do or say enters into 
the picture of America which is seen abroad. For- 
eign nations are continually watching to see 
whether the United States is cool, whether it is 
determined, whether it is strong, w-hether it will 
go through with its intentions. To make up their 
minds, they look at everything which is happening 
in the whole country. 

What will the world see ? The thought that I 
want to leave with you is that each of us bears a 
measure of responsibility for the answer. Each 
one of us can make our countiy seen as it truly 
is — determined to do its part to carry the free 
world forward to strength and security. 



May I, 1950 



677 



Making the Point 4 Program Work 



hy Leslie A. Wheeler 

Director, Interim Ofice for Technical Assistance ^ 



Considerably more than a year has elapsed since 
President Truman, in his inaugural address, enun- 
ciated his now famous Point 4. While the neces- 
sary legislative authorization and appropriations 
have not yet been approved by the Congi'ess, a 
great deal of constructive planning has been done 
in the Department of State in consultation with 
other agencies of the Government and with interna- 
tional organizations which should make it possible 
to get the program jDromptly underway on July 1. 

House and Senate Versions 

I should like to indicate some of the problems 
that will have to be overcome in the successful 
implementation of Point 4 and also to give some 
idea of the results that may be expected. Before 
doing this, however, I think it will be useful to 
indicate briefly the present legislative situation. 
The House of Representatives has passed as a part 
of an omnibus foreign aid bill an authorization 
for Point 4, and the Senate Foreign Relations 
Committee reported favorably and unanimously 
another version of such an authorization. It is 
important to note the main differences and similar- 
ities in these two versions. 



DIFFERENCES 

Tlie main differences between the two bills may 
be listed as follows : 

1. The House bill provides an authorization fot 
the first year's operations of 25 million dollars. 

The Senate bill authorizes 45 million dollars, 
which was the amount recommended by the Ad- 
ministration. 

2. The House bill lays down certain policies and 
makes certain findings of fact in regard to the 



' Address made before tlie Conference on Point 4 of the 
Institute for Iiiter-Anieriean Affairs of the University 
of Delaware, Newark, Del. ou Apr. 10, 1950, and released 
to the press on the same date. 



stimulation of private capital investment in under- 
developed countries. 

The Senate bill omits all reference to private 
investment and is confined strictly to authoriza- 
tion for the transfer of technical knowledge and 
skills to underdeveloped countries. 

3. The House bill provides for a public advisory 
board to advise the President on the operations of 
the progi-am. 

The Senate bill contains no reference to such a 
board. 

4. The House bill contains no stipulation as to 
termination of the legislation. 

The Senate bill limits the authorization to 5 
yeai's unless specifically renewed by the Congi-ess. 

SIMILARITIES 

These are the principal differences. There are, 
however, important similarities : 

1. Both bills declare it to be the policy of the 
United States to aid the people of economically 
underdeveloped countries to develop their re- 
sources and improve their living conditions by an 
exchange of technical knowledge and skills. 

2. Both bills provide that the United Nations 
and its specialized agencies and the Organization 
of American States may be used in achieving the 
purposes of the legislation. 

3. Both bills authorize bilateral technical coop- 
eration programs between the United States and 
individual foreign countries to be carried out un- 
der the auspices of appropriate United States Gov- 
ernment agencies and with the participation of 
private agencies and persons. 

4. Both bills stipulate certain criteria to be con- 
sidered by the President in making assistance 
available to individual countries through bilateral 
programs sucli as, for instance, the payment by 
tlic other countries of fair shares of the cost, and 
the provision of necessary information and pub- 
licity. 

5. Both bills provide for the appointment by the 



678 



Department of Stale Bulletin 



President of nn ivdministnitor to be responsible 
for phinnin<i. inii)lenR'Mtin<i, aiul nianagin^j; the 
program authorized by tiie legislution — but leaves 
it oi)en as to whether or not the administrator will 
be located in an exist in<j afjenoy. At the same 
time, both bills specitioally authorize the President 
to exercise any power or authority conferred on 
him by the legislation through the Secretary of 
State or through any other ofKcer or employee of 
the United States Government. 

While the Senate bill still has to be passed upon 
by that body and the resulting Senate and House 
versions will have to be reconciled in conference 
and actual appropriations subsequently granted, 
the probability is that a Point 4 Program will be 
able actually to get under way on July 1. 

Problems To Be Met 

On the basis of this assumption, I should like to 
point out what seem to me to be the principal prob- 
lems that will be encountered in the successful 
carrying out of this legislation. 

COORDINATING THE PROGRAM 

First of all, it has been noted that technical co- 
operation will be carried out both through the 
United Nations and its organizations and through 
bilateral United States projects. It is not possible 
to say, at this moment, to what extent one channel 
will be used as compared with the other. It may 
be pointed out, however, that a special interna- 
tional conference has been called by the Secretary- 
General of the United Nations for the middle of 
May at which time countries will be invited to 
make their contributions to a special fund which 
will be used by the United Nations and the special- 
ized agencies to carry out their part of this pro- 
gram. In this connection, it may also be noted that 
it has already been decided that the proportions of 
the first 10 million dollars contributed to this spe- 
cial fund have alreadj' been determined; namely, 
29 percent to the Food and Agriculture Organiza- 
tion ; 23 percent to the United Nations Secretariat; 
22 percent to the World Health Organization ; 14 
percent to the United Nations Educational, Cul- 
tural and Scientific Organization; 11 percent to 
the International Labor Organization ; and 1 per- 
cent to the International Civil Aviation Organi- 
zation. It is of interest in this connection also to 
note that in the i)lanning that has been done by the 
Department of State and other Government agen- 
cies with respect to bilateral programs that the 
proportional emphasis runs very much the same 
as is indicated b}' these United Nations percent- 
ages; namely, that assistance in agriculture, 
health, and education will be given high priority. 

Naturally, the existence of these two sets of pro- 
grams through the United Nations and through 
United States bilateral arrangements raise im- 
portant questions of coordination. It may turn 
out that this problem is smaller than appears on 



tlie surface because it must be remembered that 
both the United Nations and the United States 
programs will Ih> based on actual requests from 
individual countries. In other words, the coun- 
tries themselves have the option of deciding 
whether they want the work done through the 
United Nations organizations or through the 
United States. Furthermore, with ac-tual experi- 
ence it may turn out that certain types of activi- 
ties will be found more suitable for the United 
Nations while others may be fouiul more suitable 
for bilateral projects. In that ca.se, certain cri- 
tei-ia can be established which will be valuable 
in avoiding duplication luid achieving coordina- 
tion. Another point to be remembered in this 
connection is that the United States participates 
actively in the planning of work in each of the 
United Nations organizations. Another possible 
point of coordination will be through the Ameri- 
can Embassies in each of the countries. They will 
be able to give advice as to the interests of the 
countries themselves in particular kinds of work. 
While on this point it may be worth mentioning 
that there is also a problem of coordination within 
the United Nations organizations themselves and 
within the United States agencies that will be con- 
cerned with this program. Probably the most 
hopeful thing that can be said about this whole 
question of coordination is that there is good will 
on both sides. That is to say, in both the United 
Nations and in the United States agencies con- 
cerned with the problem, there is a desire to work 
out the vast arrangements possible for achieving 
the results desired. 

RESOURCES AND PERSONNEL 

A second general problem will be concerned 
with the effective tapping of the technical re- 
sources within the United States for the bilateral 
operations. It is planned that both nongovern- 
mental and governmental resources will be called 
upon. Indeed, it is not possible to visualize a 
successful operation of the bilateral program with- 
out drawing upon both governmental and non- 
governmental institutions and personnel. It is 
probable, however, that the responsibility for 
mobilizing such resources and personnel will be 
divided between the various United States Gov- 
ernment agencies which have the subject-matter 
responsibility. For example, the United States 
Department of Agriculture may be called upon to 
carry out bilateral agricultural ])rojects with the 
understanding that it may call upon agricultural 
colleges and teclinical agricultural institutions for 
assistance. It might, in certain instances, con- 
tract with other agencies and institutions to get 
a better job done in a particular country. 

Finally, there is the general problem of recruit- 
ing capable and effective personnel. This means 
individuals possessing not only the necessary tech- 
nical competence but the personal qualifications 
necessary for doing this kind of work in the for- 



May 1, 7950 



679 



eign field. This will be the principal problem 
that will have to be met by both the United Na- 
tions and United States agencies. From the point 
of view of this general problem, it would appear 
that the United Nations has a certain advantage in 
view of the fact that it will be in a position to 
draw upon experts from all parts of the world, 
while United States bilateral operations will rely 
predominantly, if not entirely, on United States 
citizens. On the other hand, the United States bi- 
lateral operations may be benefited by the fact 
that there is a tremendous variety of technical 
expertness in United States Government and 
United States private organizations which can be 
drawn upon for such bilateral projects. 

BILATERAL EXAMPLES 

So much for a brief survey of the principal prob- 
lems that are likely to be encountered. I should 
like now to turn to a discussion of the kind of 
results that may be expected in the carrying out 
of this program. Fortunately, this is not entirely 
a matter of guesswork. The United States Gov- 
ernment has had considerable experience in Latin 
America with bilateral technical cooperation proj- 
ects which gives us a very good idea of the kind 
of results that can be obtained. 

Mexican Corn Commission. — I should like to 
start first with a project with which I happen to 
be most familiar. And one wliich, incidentally, 
does not involve directly either the United States 
Government or the United Nations. This is a 
cooperative project between the Rockefeller Foun- 
dation and the Mexican Department of Agricul- 
ture for the selection and breeding of better seed 
corn with special emphasis on hybrid seed. This 
project has been going on in Mexico for 8 Or 9 
years. It has involved a tremendous amount of 
work in the field of seed selection and breeding. 
It has achieved practical results in producing 
seed that yields substantially more per acre than 
the indigenous varieties. It has also involved the 
establishment of a new governmental organization 
in Mexico — the Comision del Maiz or Corn Com- 
mission — which has the responsibility for distrib- 
uting to the farmers the seed which has been 
produced by the technicians of the Rockefeller 
Foundation. Technicians are also working on im- 
proved seed for wheat and beans and are well on 
the way to the development of a first-class agri- 
cultural experiment station associated with the 
principal agricultural college of Mexico. At pres- 
ent, farmers throughout the higher zones in Mexico 
are beginning to receive and to use these improved 
seeds, and definite results are appearing in the 
form of much higher yields. Beyond that I think 
it is significant that the Corn Commission is mak- 
ing an effective start toward the development in 
Mexico of an agricultural extension service, be- 
cause the work done by the Commission deals not 
only with distribution of seed but also gives farm- 



ers advice as to cultural practices and as to disease 
and pest control. 

Sanitation for Chile. — An excellent example of 
wholly bilateral technical cooperation with an- 
other government is the sanitation work carried 
on by the Institute of Inter-American Affairs in 
South America. A good water supply and sani- 
tary sewage system are, of course, particularly J 
important for sound health and human efhciency. \ 
Yet, even in North Santiago, Chile, a section of 
the city with 200,000 people has been without 
adequate sanitation. Most of those in this section 
are workers who have suffered from disease and 
malnutrition. 

In 1944, the Institute and the Chilean Depart- 
ment of Public Works began to construct a sewage 
system here. The total cost of the project will be 
some 60 million pesos, more than half furnished 
by the Chilean Government. It will involve about 
144 miles of sewers with 27 miles of house connec- 
tions. It is being built in four sections. When 
completed it will not only improve living condi- 
tions of the people but will also redeem a large 
area for industrial purposes, as well as reclaim 
100,000 acres for gardens and vegetable growing 
which contamination of the irrigation water has 
hitherto made worthless. 

Incidentally, upon completion of one of the sys- 
tem's sections not long ago, the people arranged a 
popular demonstration without consulting their 
own government or our Embassy. They erected 
a stone monument with a marble inset explaining 
their debt to the United States. A demonstrative 
crowd then held an impressive ceremony at which 
military bands played and a lai'ge Chilean choir 
sang the Star Spangled Banner in perfect English. 
In other words, these people understood the bene- 
fits which can be obtained when democratic nations 
work together. 

Cuban Agriculture. — Turning again to the field 
of agriculture, an excellent example of effective 
technical cooperation is found in the work started 
7 years ago in a cooperative project between the 
United States Department of Agriculture and the 
Government of Cuba to develop a new fiber which 
could be used as a substitute for jute in the manu- 
facture of bagging. 

The fiber is called kenaf. In the beginning, the 
work was done very largely by two technicians 
sent to Cuba by the Department of Agriculture 
together with the assistants assigned by the Cuban 
Government, but, over the 7 j^ears, the project has 
attracted the attention and cooperation of an 
American machinery manufacturer, a trade asso- 
ciation, and the University of Florida. All of 
these working together have achieved practical 
results. Last year, several commercial producers 
planted about 1,000 acres of kenaf in Cuba. Since 
the kenaf growing season is the slack sugar season 
it fits very well into the Cuban economy, providing 
employment for workers in a season when they 
otherwise have little to do. The development of 



680 



Department of State Bulletin 



this fiber has ah-eady spread to El Salvador on a 
coninunria! basis and is being tried experimen- 
tally in the Republic of Haiti. 

I could go on to describe other illustrations of 
cooperation in agricultural experiment stations, of 
cooi)eration in geological anil minin"; surveys, of 
cooperation in the clevelopment of fisheries, and 
in other fields. In all of these cases, concrete and 
beneficial results have been achieved. The best 
indication of this, it seems to me, lies in the fact 
tliat the countries concerned have been paying a 
steadily increasing share of the expense of this 
technical work them.'^elves. 

On the basis of this not inconsiderable experi- 
ence in Latin America, I venture to draw certain 
basic conclusions. In the first place, in order to 
achieve results of a practical nature, long-term 
effort is needed and by long-term I mean periods 
ranging upward from 2 years. In the second 
[)lace, it is necessary, if our objective is to be 
acliieved, to secure tlie enthusiastic cooperation of 
the governments in the countries in which techni- 
cal cooperation projects are attempted. AVe must 
not lose sight of the fact that the basic aim is to 
help others to help themselves. This means that 
we must work toward the development of technical 



and administrative competence in the citizens of 
these countries so that they can carry on (he work 
after the foreign technicians leave. In this con- 
nection, the sending of trainees to the United 
States and to other more developed countries, as 
is contemplated in both the United Nations and 
United States programs, will prove very impor- 
tant. Finally, and perhaps most important of all, 
it is essential to secure capable, persevei'iiig experts 
who arc temperamentally suited for work in these 
underdeveloped countries and who are willing to 
work steadily and patiently in not too favorable 
environments to get their individual jobs done. 
Gencial surveys and short-term visits of liighly 
specialized experts may be very useful in getting 
particular projects started and in filling in gaps 
in technical "know-how" as they appear as the 
work develops. But the real results depend on 
steady long-term hard work of foreign technicians 
in the field. 

Indeed, if we get that kind of technicians, we 
will get the necessary cooperation of the govern- 
ments, and, slowly but surely, the great ideal ex- 
pressed in the fourth point of President Truman's 
inaugural address will, in fact, be realized on a 
workl-wide basis. 



The Proposed European Payments Union ^ 



1. The Use of European Resources 
and Intra-European Trade 

One of the urgent problems that confronted the 
EGA at the very beginning of the jNIarshall Plan 
in the summer of 19i8 was that of freeing trade 
among the participating countries from the many 
restrictions, especially exchange controls of vari- 
ous forms, that were strangling it. Only through 
an expanded trade could the Europeans make the 
fullest possible use of their resoui'ces by supplying 
one another with the goods and services they could 
produce. Clearly, the moi'e use the Europeans 
could make of their own resources the more rapid 
could be the pace of recovery and the lighter would 
be the burden on the United States. 

The most severe restrictions on trade among the 
Western European countries grew out of the dol- 
lar shortage. Any European country which buys 
more from one of its neighbors than it is able to 
sell to that neighbor has to find some way of pay- 
ing for the difference. Prior to the European Re- 
covery Program, this usually meant a payment in 
gold or dollars. Practicallj' every country was 

' S. Doc. 144, 81st Cong., 2d sess., pp. 1-5. 



reluctant to pay out dollars in order to make pur- 
chases in Europe and other soft-currency areas. 
The result was a general tendency to restrict im- 
ports by imposing exchange controls and quantita- 
tive restrictions on trade. 

For instance, Belgium has traditionally been an 
exporter of steel; Greece and Norway have to 
import it. Yet, Greece cannot sell enough olive 
oil, tobacco, and fruit to Belgium; and Norway 
cannot sell enough fish, lumber, and paper pulp to 
pay for the steel and all the other goods it wishes 
to buy in Belgium. Therefore, under the condi- 
tions prevailing at the beginning of the Marshall 
Plan, these two countries might have had to use 
their EGA aid to buy steel in the United States 
at a time when the steel could have been produced 
in Europe. Obviously, this would have increased 
tlie cost of the recovery progi-am. The only other 
coiirse that the Greeks and Norwegians might have 
followed was that of restricting the importation 
of most goods from Belgium so as to save their 
earnings of Belgian currency for such highly es- 
sential items as steel. Either way, European trade 
was stifled, European resources were not put to 
their best uses and recovery was impeded. 

Given the nature of this situation, the quickest 



May 1, 1950 



681 



way to stimulate an expansion of European trade 
and, thus, a fuller use of European resources was 
to provide the means whereby any participating 
country could pay for the excess of its purchases 
from its neighbors over its sales to the same 
neighbors. 

2. Offshore Purchases 

The first device that was employed to accom- 
plish this purpose was to allow each participating 
country to use its EGA dollars to buy goods in 
other participating countries. To use the previous 
example, Greece and Norway would pay for as 
large a part as possible of their purchases in Bel- 
gium with their own earnings of Belgian francs. 
The balance of their purchases they would pay for 
with EGA dollars. The dollars that the Belgians 
earned from their neighbors in this fashion could 
then be used to finance imports into Belgium from 
the dollar area. In this way, these dollars were 
used twice: once to finance purchases in Belgium 
by other European countries and a second time to 
help cover Belgium's dollar deficit. Since the dol- 
lars would otherwise have gone directly to Belgium 
for the latter purposes, there was, of course, no in- 
crease in the amount of aid required. 

Offshore purchases with EGA dollars were an 
effective emergency method of preventing the 
further shrinkage of European trade. But this 
method had disadvantages. The fact that EGA 
dollars could be used in this fashion led more and 
more sellers, often with the support of their gov- 
ernments, to insist on payment in dollars. In this 
way the countries tried to earn dollars from one 
another. Often prices quoted in dollar transac- 
tions were lower than the prices asked for the same 
goods by the same seller when they were sold for 
European currencies. If long continued, there- 
fore, this practice would have disrupted trade 
in Europe, even though, initially, it acted as a 
stimulant. 

3. The Intra-European Payments Plan 

In September 1948, therefore, a second and more 
effective arrangement was devised which was 
called the Intra-European Payments Plan. Its 
basic principle is simple. A part of the EGA dol- 
lar aid to each creditor country, which it needs to 
pay for its necessary imports from the dollar area, 
is given only on condition that the recipient coun- 
try extend grants-in-aid of the same amount in its 
own currency to the other participating countries 
with which it has a trade surplus. (This part of 
tlie aid is called conditional aid.) In this way, the 
debtor country receives a grant, which is called 
a drawing right, in the currency of each country 
with which it has a trade deficit. Stated in terms 
of the earlier example, Belgium receives EGA dol- 
lar financing (as conditional aid) to pay for goods 
and services from the United States and elsewhere 
in the dollar area on condition that it make a grant 



of Belgium francs to Greece with which Greece 
can buy steel in Belgium. 

The Intra-European Payments Plan has made 
a major contribution toward the freeing of Euro- 
pean trade and, consequently, the better use of 
European resources. By financing trade deficits, 
it has removed, or weakened, the incentive of each 
country to husband its, dollars, or to earn dollars 
from its neighbors, by restricting its imports from 
them. But it is based on a series of bilateral ar- 
rangements between pairs of countries. The draw- 
ing rights that Belgium gives Greece can (except 
for a small portion) be used only in Belgium. 
Greece cannot shop around and buy its steel in the 
cheapest market in Europe. Moreover, the present 
payments plan does not furnish enough stimulus 
to the individual countries to bring their trade into 
balance. Accordingly, it is time to take a further 
step through the creation of a European Payments 
Union which will make European currencies freely 
convertible into one another (for current as dis- 
tinguished from capital transactions) and thus 
facilitate a further dismantling of restrictions on 
trade among the participating countries. 

4. European Payments Union 

The fundamentals of the proposed Payments 
Union are similar to those of the present payments 
plan but the mechanics of the operation will be 
quite different. The Payments Union will not be 
a device for underwriting EurojDean currencies or 
protecting overvalued currencies. Its basic func- 
tion, like that of the present payments plan and 
the earlier offshore purchases, will be to provide 
the means whereby a debtor counti-y can cover 
the deficit in its trade with its neighbors without 
having to make full payment in gold or dollars. 
Europe's internal trade is not yet in balance. 
Some countries still have to buy more from their 
neighbors than they sell to them. These countries 
must still have help in financing their trade deficits 
if they are to feel free to eliminate trade restric- 
tions. 

The operation of the Payments Union will not 
change either the amount of aid needed, or the pur- 
poses for which EGA dollars are ultimately used 
by the Europeans. The EGA dollars which are 
used to support its operations (and which corre- 
spond to the conditional aid of the Intra-European 
Payments Plan) will find their way to the countries 
that turn out to be creditors in their trade with 
the rest of Western Europe to be used by those 
countries to buy the goods and services they must 
have from the dollar area. The only difference is 
that, under the proposed amendment, assistance 
may be furnished to the participating countries 
indirectly thi'ough the Payments Union and may 
be in the form of dollars not eai'marked for the 
purchase by the recipient country of pai'ticular 
goods and services. 

This new Payments Union will be an improve- 



682 



Department of State Bulletin 



ment over the old Intra-European Payments Plan 
in two important respects. 

The first is tliat it will permit trade to bo con- 
ducted within Europe on a truly multilateral basis. 
The Payments Union will be, in effect, a clearing 
house of which all the central banks of the partici- 
pating countries will be members and through 
which they will be able to settle their accounts with 
one another. Even at the present time, indiviilual 
private transactions between the citizens of any 
two countries are offset against one another by 
their two central banks so that only a single pay- 
ment from one to the other is necessary. In the 
Payments Union this clearing house operation will 
be carried a step further. Each country's deficits 
with some of its neighbors will be ofliset against 
its surpluses with others so that only a single net 
settlement between its central bank and the clear- 
ing house will be necessary. In this way an enor- 
mous volume of transactions can be handled with 
minimum payments between countries. 

The financing of trade deficits through the Pay- 
ments Union will also be done entirely on a multi- 
lateral basis. A countrj' that is a debtor in its 
trade with other European countries, instead of 
receiving drawing rights consisting of fixed 
amounts of the currencies of each of its prospective 
creditors (as in the present plan), will have the 
right to draw upon the central clearing house for 
any European currency it needs to make purchases 
from its neighbors. There will, of course, be a 
limit to the total amount a country may borrow in 
all currencies. A creditor country, instead of sup- 
plying drawing rights consisting of fixed amounts 
of its own currency directly to various prospective 
debtor countries, will provide its own currency to 
the clearing house as needed, up to a stated limit. 
To refer once more to the earlier example, Greece 
will be able to choose freely whether it will draw 
on the clearing house for Belgian francs to buy 
its steel in Belgium, or in German marks to buy 
its steel in Germany, or in pounds sterling to 
buy its steel in Britain. 

In such a completely flexible system, it will be 
impossible to predict in advance the exact amount 
that any particular debtor country will need to 
obtain from the Payments Union or that any par- 
ticular creditor will need to furnish to it. There- 
fore, it will not be possible to allocate in advance 
a definite sum of EGA conditional aid to each 
country that will be a creditor. Instead, dollars 
can be paid to the creditor country only when it 
actually has to supply its own currency to the 
clearing house. Thus neither the countries that 
will ultimately receive these dollars, nor the 
amounts they will receive, nor the time during the 
year when the payments will be made, can be 
accurately foreseen. It is proposed, therefore, 
that a considerable part of the EGA funds re- 
quired for the financing of European trade deficits 



be granted as aid to the Payments Union and, in 
effect, earned from the clearing house by the 
creditor countries. It is for this reason that the 
EGA seeks tlie authority to furnish a part of the 
aid to Europe next year by means of the transfer 
of dollars through a central institution of this 
character. 

The second major change and improvement in 
the new Payments Union (as compared with the 
present payments plan) is that the trade deficits 
that develop among the European countries will 
be paid for only partly with EGA aid in the man- 
ner just described. The balance will be paid for 
partly out of the dollar resources of the countries 
themselves and partly out of funds loaned to the 
Payments Union by the creditors without any 
relation to EGA aid. 

Whenever a country turns out to be a debtor — 
that is, whenever it buys more from its neighbors 
than it sells to them — it will have to meet part of 
the deficit thus incurred by the payment of its own 
gold or dollars to the Payments Union (unless its 
deficit is held within fixed limits or is of a purely 
seasonal chai-acter). Whenever a country turns 
out to be a creditor — that is, when it sells more 
to its neighbors than it buys from them — it will 
receive payment to cover this trading surplus only 
partly in gold or dollars. The balance due will 
remain simply as a debt in European currencies 
owed to the creditor country by the clearing house. 

The advantage of requiring debtors to make part 
payment in gold or dollars and creditors to finance 
a part of their exports with loans is that the Euro- 
pean countries are in this way given a strong 
incentive to bring their trade into a reasonable 
balance. The debtor's obligation to cover a part 
of its trade deficit in hard money gives it an incen- 
tive to reduce the size of its trade deficit. Likewise 
the creditor, having to finance a part of its export 
surplus by exetnding credits will be more willing 
to import from its neighbors and thus bring its 
trade more nearly into balance. It is in this way 
that the operation of the Payments Union will 
help to cure the disease and not merely to alleviate 
its symptoms. 

Moreover, a payments union that operates in 
this manner can j^repare the way for the end of 
EGA aid. By 1952 the trade surpluses and deficits 
among the European countries will have to be 
small enough to be financed entirely by a combi- 
nation of credits and gold and dollar payments 
through a central institution without the help of 
any EGA funds. The establishment of the Pay- 
ments Union is a significant step in this direction. 
After its first year of operation, it can be modified 
in such a way as to reduce its dependence on EGA 
funds. We hope that, by the end of the ERP, it 
can operate as an independent institution financed 
entirely out of European resources. 



May 1, 1950 



683 



U.S. Closes Information Libraries in Czechoslovakia 



U.S. ASKS CZECHOSLOVAKIA 
TO CLOSE CHICAGO CONSULATE 



[Released to the press April 21] 



STATEMENT BY SECRETARY ACHESON 

Our notes, together with Miss Kosinak's affi- 
davit, speak for themselves, and I have only one 
thing to add to them : That is, to observe that so 
far as broadcasts to the Soviet orbit are concerned, 
the Voice of America and, indeed, the informa- 
tion distributed by USIE in Czechoslovakia serve 
only as the channels through which the American 
people and their Government speak to the peoples 
in that area. 

In fulfilling this mission, the Voice of America 
and USIE agencies in Czechoslovakia carry those 
news reports and editorial comments available to 
any citizen of a free country. 

If free information becomes dangerous to a 
totalitarian regime, it is not the fault of the 
United States nor of the USIE, but of the regime 
itself. The quarrel of the Czechoslovak Govern- 
ment, therefore, is not with the Voice of America 
nor with the USIE. Its quarrel is with the truth. 

U.S. NOTES TO CZECHOSLOVAKIA 

Text of a note transmitted today hy the American 
A7nbassador in Praha to the Czechoslovak Ministry of 
Foreign Affairs and subsequently released to the press 
in Praha. The same communication has also been traus- 
mitted to the Czechoslovak Embassy in Washington. 

The American Embassy presents its compli- 
ments to the Czechoslovak Ministry of Foreign 
Affaii-s and has the honor to refer to its note dated 
April 19, 1950 demanding that the United States 
Information Service libraries of the Embassy in 
Praha and the Consulate General in Bratislava be 
closed immediately and that the United States 
press attache, Joseph C. Kolarek, be recalled. 

The United States Govermnent considers the 
demand for the closing of the United States In- 
formation Service libraries and the recall of the 
United States press attache as utterly unwarranted 
and based on demonstrably untrue charges. These 
offices of the Embassy and Consulate (ieneral have 
confined their cultural and information activities 



to efforts to promote mutual understanding and 
friendship between the people of Czechoslovakia 
and the people of the United States. Such ac- 
tivities have departed in no way from the legiti- 
mate functions of diplomatic and consular estab- 
lishments in the cultural and information fields. 

The United States Government, therefore, 
strongly rejects the allegations of the Czecho- 
slovak Government made directly or indirectly 
that Mr. Kolarek, other American official repre- 
sentatives, or Czechoslovak employees were en- 
gaged in any improper activities in the pursuit 
of their duties. Mr. Kolai'ek concerned himself 
only with his official functions relating to press, 
information, and cultural affairs and never acted 
in any way which might be legarded as abuse 
of his diplomatic office. In view of the allegations 
of the Czechoslovak authorities, the United States 
Government can only conclude that the Czecho- 
slovak Government does not adhere to the diplo- 
matic practices normally observed by the com- 
munity of nations. 

The methods employed by the Czechoslovak au- 
thorities to obtain a pretext for this provocative 
action will themselves refute the charges before 
the judgment of world opinion. Thus, the state- 
ments of the Czechoslovak citizens, Ivan Elbl and 
Ruzena Soumarova, against the United States In- 
formation Service library in Praha were produced 
and cited by the Czechoslovak authorities only 
after these two former local employees of the 
library were arrested on April 6 and subjected to 
police pressure for 36 hours prior to their resigna- 
tion. The Czechoslovak authorities also cited the 
declarations of Lubomir Eisner and Dagmar 
Kacerovska, two other Czechoslovak citizens 
formerly employed by the library, who were con- 
victed of espionage and plotting against the 
Czechoslovak Republic in a so-called trial and 
sentenced to 18 and 15 years of imprisonment 
respectively. Such "confessions" as were ob- 
tained from these unfortunate victims of police 
action resulted only after they had been arrested 



684 



Departmenf of Sfate Bulletin 



and processed for approximately one month prior 

to the trial. 

The complete wortlilessncss of such charges as 
are contained in these statements is demonstrated 
by the facts set forth in the affidavit of the director 
of tlie XTnited States Information Service library 
at Praha, Miss Katharine Kosinak, a copy of wliich 
was enclosed in the Embassy's note of April 17. 
Tliis affidavit makes abundantly clear how the 
Czechslovak police tried to intimidate an Ameri- 
can citizen in the official employ of the Embassy 
and exploit a personal relationship in the effort 
to build a propa<;anda case, by any means whatso- 
ever, against the Unitecl States Information 
Service and the Embassy. This affidavit reveals 
the hollowness of these charges and the improper 
conduct of the Czechoslovak police. 

The note of the Ministry asserts that the United 
States Information Service libraries have func- 
tioned without legal title. The United States 
Government does not accept this unusual concep- 
tion of international relations. The United States 
Information Service libraries of the Embassy in 
Praha and the Consulate General in Bratislava 
were established in Czechoslovakia as in other 
countries as an integral component of the official 
representation of the United States. Such cultural 
and information functions are carried on without 
special agreement as a universal element in the 
diplomatic life of nations today. 

The Czechoslovak Government never contested 
this principle until it felt obliged to seek excuses 
for its attempt, in accordance with an emei'ging 
pattern of procedure among the Communist-domi- 
nated countries of Eastern Europe, to isolate the 
Czechoslovak people from the outer world. The 
United States and other countries can only infer 
that the present government by its demand to close 
the libraries reveals its fear of the free exchange 
of information and the maintenance of free cul- 
tural contacts with other peoples. It is only too 
evident that the present government is moved by 
fear to impose barriers to the entry of truth from 
abroad and to the free inquiry of minds at home. 
This obvious fear of truth is not in the tradition 
of the Czechoslovak people, who have shown 
throughout their history a stubborn aversion to 
attempts at thought control. The Government, 
and people of the United States are convinced that 
such efforts of the Czechoslovak Government to 
repress freedom of thought and the desire for 
impartial information will never stand the test of 
time in the modern world. 

It is, likewise, obvious that the Czechoslovak 
Government's professions in behalf of world peace 
and mutual understanding between nations lack 
any meaning and constitute, on the contrary, a 
systematic campaign to mislead the public of 
Czechoslovakia and other countries. The United 
States Government is reluctantly obliged to con- 
clude tliat tlie Czechoslovak Government no longer 
cares whether it observes diplomatic principles and 
the convention of courtesy in international life. 

May 1, 1950 



The United States Government is obliged to 
comply with (lie Ministry's dciuand tiiat itclo.se its 
information libraries in Czeclioslovakia and recall 
the press attache, Mr. Kolarck. The Czechoslo- 
vak Government must, however, expect that its 
action cannot escape serious consequences affecting 
various aspects of the relations between tlie two 
governments. The attitude of tiie Czechoslovak 
authorities compels the United States Government 
to review the scope of activities of Czechoslovak 
establisliments in the United States. Since the 
Czechoslovak Government has unjustifiably in- 
sisted on the curtailment of the normal diplomatic 
and consular functions of the United States in 
Czechoslovakia it will understand the request 
made herewith, as an immediate result of that 
review, that it close its Considate General in Chi- 
cago, Illinois, not later than May 1, 1950. 



Following is the text of a note together vHth the text of 
an attached affldavit transmitted on April 15, 1950, by the 
Amer-ican Embassy in Praha to the Czechoslovak Min- 
istry of Forviiin Affairs and released to the press today 
ill. I'raha. The affldavit executed by Miss Katharine 
Kosmak, attaehi of the Embassy and director of the 
library of the United fitates InfornuUion Service in Praha, 
reveals the attempt of the Czechoslovak authorities to 
exploit a private and personal relationship for their o\on 
political purposes and the improper conduct of the 
Czechoslovak security police in connection with the cam- 
paifin to close the United States Information Service li- 
braries in Czechoslovakia: 

The American Embassy presents its compli- 
ments to the Czechoslovak Ministry of Foreign 
Affairs and has the honor to refer to the Embassy's 
note No. 282, April 12 regarding the distribution 
by the official Czechoslovak News Agency and the 
publication on April 12 of the statement by Ivan 
Elbl, a former employee of the Embassy. 

In this connection, there is enclosed a copy of 
an affidavit executed by Miss Katliarine Kosmak, 
attache of the Embassy and director of the United 
States Information Service library, Praha. It 
will be noted from this affidavit that the Czecho- 
slovak state security organizations have acted in a 
manner which is not only altogether improper in 
regard to a diplomatic officer of a foreign Embassy 
in Praha but in disregard of the most funda- 
mental human rights and the most elementary re- 
spect for personal relationship. 

The Embassy expects that the Ministry will 
take appropriate steps in this matter, including 
the tendering of a suitable apology to the officer 
in question. 



AFFIDAVIT OF MISS KATHARINE KOSMAK 

Ivan Elbl, an employee of the United States In- 
formation Service library, was arrested in my 
presence at 8 : 45 a.m., Thursday, April 6. About 
midnight the same night, he telephoned me. His 
voice sounded very strange, but he told me he was 

685 



all right and that he would call me again the fol- 
lowing day. 

About 2:30 p.m., Friday, April 7, Mr. Elbl 
called at my apartment. He stated that he had 
been instructed to translate for me a statement 
which he had signed and to ask me two questions. 
The statement was essentially the same as that 
made public on April 12 except that it included 
a definition of my own aims and actions as li- 
brarian which was in itself accurate. Elbl told 
me that presumably because I was not considered a 
"spy" by the police they were giving me the privi- 
lege of hearing the statement before publication 
and of deciding whether or not I wished to be left 
out of it entirely. To this I replied I would like 
to have the references to me omitted from the 
statement because they implied a conflict between 
Joseph C. Kolarek and me which does not exist. 

Elbl then referred to the fact that he had asked 
me to marry him and said that he had been in- 
structed to bring back a statement of my own 
as to whether, after the publication of his public 
letter, I would still marry him. To this I replied 
that my personal feeling for him remained un- 
changed but if I married him now or at any time 
I would do so on my own terms. 

Elbl left my apartment about four o'clock. 
About 9 : 30 the same evening he called at my 
apartment again, accompanied by two gentlemen 
whom I was given to understand were agents of 
the Czechoslovak state security organs. These 
men, during a long conversation which followed, 
said the message I had given Elbl to bring back to 
them was unrealistic; that I must know that if 
Elbl married me they would never let him leave 
the country legally and would see that he did not 
leave legally. By indirection they attempted to 
persuade me to marry Elbl, renounce my Amer- 
ican citizenship, and live in Czechoslovakia. 
They also made veiled references to disciplinary 
action which would undoubtedly be taken against 
me by the American Government. 

Although I bitterly resented this open use of 
fear and threats to attempt to utilize personal 
human relationship for political purposes, I did 
not trust myself to make a full statement of my 
views at the time because of my sympathy for 
Elbl's situation and because of my understandably 
emotional state of mind. The essence of my re- 
plies to the Czechoslovak security organization 
agents was, therefore, to the effect that, in my 
country, people immediately concerned in mar- 
riage make the decision, and I, therefore, wished 
to be allowed to come to an understanding with 
Elbl between ourselves and at leisure. 

Since the interview, I have had no further 
approaches from the security agents. 

As I will not be intimidated by threats of what- 
ever character to my personal reputation, or 
threats to my personal happiness, into allowing 
these activities to be falsified or betrayed, I make 
this affidavit in order to clarify the situation and 



specifically to expose the efforts of representa- 
tives of the Czechoslovak Government to utilize a 
personal relationship for the purpose of forcing 
me to misrepresent the objectives and activities of 
the United States Information Service in Praha. 



Filing for Settlement of 
Property Claims in Germany 

[Released to the press April IS] 

The Department of State announced today that 
the Office of the United States High Commissioner 
for Germany has requested that all persons and 
organizations with claims for the restitution of 
identifiable property under Military Government 
Law No. 59 should address all con-espondence, 
either on queries or for new information, to the 
individual German Land Restitution Agency han- 
dling the case in order to expedite settlement of 
their claims. 

The Central Filing Agency at Bad Nauheim, 
which was opened in December 1947 to receive 
claims for restitution from individuals who were 
deprived of their property for racial, religious, 
or political reasons, has received and processed 
more than 220,000 petitions, 105,000 reports, and 
more than 100,000 pieces of mail. Notwithstand- 
ing that the United States Zone Restitution Law 
set a deadline of December 31, 1948, for the filing 
of claims, the Central Filing Agency has con- 
tinued to receive from all parts of the world cor- 
respondence containing new petitions, new infor- 
mation to support pending petitions, and inquiries 
seeking advice on property. 

Law No. 3 of the United States High Commis- 
sioner for Germany (Amendment No. 4 to Military 
Government Law No. 59) provided that after Feb- 
ruary 28, 1950, the Central Filing Agency shall 
no longer process or analyze correspondence. Cor- 
respondence received by the Central Filing Agency 
after that date which indicates on its face a 
clear relationship to a pending petition will be 
forwarded to the appropriate Land Restitution 
Agency. The full text of Law No. 3 amending 
Military Government Law No. 59 has been re- 
printed in the Federal Register, volume 15, num- 
ber 53, March 18, 1950. 

Correspondence not indicating on its face such 
relationship, which in the opinion of the Central 
Filing Agency may be relevant to the General 
Claims Laws of the several Laender, will be for- 
warded to the Bayrisches Landesentschaedigung- 
samt in Munich. 

The amendment is not operative in Berlin, where 
petitions may be filed until June 30, 1950. 

The Central Filing Agency will continue to op- 
erate, under American supervision, as a perma- 
nent archives group with a small staff. 



686 



Department of State Bulletin 



Developments in Proposed Revision 
of the Montreux Convention 

Statement by Secretary Acheson 
[Released to the press April 21] 

Mr. McDennott tells iiic that ii number of you 
have asked for comment on the demand made by 
the newspaper Red Fleet, the or^an of the Soviet 
Navy Ministry, that the Montreux Convention of 
193C) be revised. 

The Department does not Icnow of any formal 
proposals made by the Soviet Union for the revi- 
sion of the Montreux Convention subsequent to 
the exchange of views which took place in 194t) 
between the Turkish and Soviet Governments. I, 
therefore, do not think that I should comment on 
the observations of Bed Fleet. However, it may 
be of interest to you to summarize briefly the more 
important developments that have occurred in 
connection with this problem since the conclusion 
of World War II : 

In a note of November 2, 1945, to the Turkish 
Government, this Government called attention to 
the agreement between the United States, Great 
Britain, and the Soviet Union at Potsdam to the 
effect that the Montreux Convention required revi- 
sion and that the matter should be the subject of 
direct conversations between each of the three gov- 
ernments and the Turkish Government. It set 
forth the following principles as a basis for an 
equitable solution of the question of the Straits : 

1. The Straits to be opened to the merchant 
vessels of all nations at all times. 

2. The Straits to be opened to the transit of the 
warships of Black Sea powers at all times. 

3. Save for an agreed limited tonnage in time of 
peace, passage through the Straits to be denied to 
the warships of non-Black Sea powers at all times 
except with the specific consent of the Black Sea 
powers or except when acting under the authority 
of the United Nations. 

•4. Certain changes to modernize the Montreux 
Convention. 

The Turkish Government accepted this note as 
a basis of discussion, and the British Government 
also indicated that it was agreeable to the Ameri- 
can pi'oposals. 

In 1946, the Soviet Government proposed to the 
Turkish Government a "new regime" for the 
Straits, setting forth, in addition to three princi- 
ples, which were in general agreement with the 
first three principles of this Government's note, 
the principles that the establishment of a regime 
of the Straits should come under the competence 
of Turkey and other Black Sea powers and that 
a joint Turko-Soviet system for defense of the 
Straits should be organized. 

The Turkish Government informed the Soviet 
Government that it was unwilling to accept these 



latter two principles and considered as incom- 
patible with its sovereignty antl security the pro- 
posal for joint Turko-Sovii't defense of the Straits. 

The United States, in a note to the Soviet Gov- 
ernment on August 19, 194(;, also expressed the 
view that the establishment of a regime of the 
Straits was not the exclusive concern of the Black 
Sea powers and declared that Turkey should re- 
main primarily responsible for the defense of the 
Straits. 

In a second exchange of notes with the Soviet 
Government in October 1940, the Turkish Govern- 
ment expressed doubt as to the usefulness and 
advisability of a continued exchange of views by 
correspondence and declared its readiness to attend 
a conference for revision of the Straits Convention 
at which representatives of the Soviet Union, the 
United States, Great Britain, France, and signa- 
tories of the Montreux Convention, with the ex- 
ception of Japan, would attend. The British and 
Auierican Governments have likewise expressed 
their willingness to participate in such a confer- 
ence. There the matter stands. 



House Resolution on Return 
of Greek Children Praised 

Letter From the President 
to the Speaker of the House 

[Released to the press by the White Bouse April 19] 

April 18, 1950 

Mr DEAR Mr. Speaker: I fully share the con- 
cern of the House of Representatives for the 
thousands of children removed from Greece to 
eastern Europe by the Communist guerrilla forces, 
and I welcome the adoption of House Resolution 
514 of March 22, 1950, calling for the speedy 
return of these childi'en to tlieir homes and 
homeland. 

The rights of children and parents to share the 
pi'otection, comradeship and beneficent influence 
of a family home are fundamental and have been 
implicitly recognized, in the case of the Greek 
children, in two unanimous resolutions of the 
United Nations General Assembly. It is morally 
inadmissible that political considerations or tech- 
nical difficulties should be allowed to stand in the 
way of the reunion of these children with their 
parents. 

The Executive Branch of the Government has 
been persistent in its endeavors to secure effective 
compliance with the United Nations resolutions in 
this case. These efforts will not be relaxed until 
the Greek children are back in their homes. 
Very sincerely yours, 

Habry S. Truman 



May ?, 1950 



687 



U.S. Praised for Work 

in Repatriating Greel( Cliildren 

[Released to the press April 12] 

The following is an exchange of correspondence between 
the Apostolic Delegate, A. O. Cicognani, Arclibishop of 
Laodicea, and Secretary of State Acheson regarding the 
Greek children in Eastern Europe. 

February 17, 1950 

My Dear Mr. Acheson : I have been directed by 
the Acting Secretary of State of the Holy See to 
express to the Government of the United States 
the profound appreciation of the Holy See for the 
work accomplished by the United States in regard 
to the question of the Greek children taken from 
their families by the Communist guerrilla soldiers 
in Greece. 

Unfortunately the deliberations of the United 
Nations on more than one occasion during 1948 
and 19i9 in regard to this question have not yet 
attained anj' practical result, unless perhaps that 
of arousing the human and Christian conscience 
of the world to the gravity of the situation. 

The Holy Father has taken occasion repeatedly 
in i^ast public discourses to allude to the sufferings 
of innumerable Greek families on this account, 
and His Holiness has also taken measures to render 
assistance to the children of that nation. The 
Supreme Pontiff has been deeply gratified by the 
noble efforts of the representatives of various Gov- 
ernments to the United Nations for the return of 
these children to their families as required in 
justice. 

It is the hojie of His Holiness that this sad 
problem will continue to be treated as one of im- 
portance and actuality by interested Governments, 
and no opportunity or means useful to the attain- 
ment of the noble purpose will be overlooked. 

With sentiments of highest consideration and 
kind personal regards, I remain 
Your very sincerely, 

A. G. Cicognani 



April 5, 1950 
My Dear Archbishop : I was most appreciative 
of your letter of February 17, 1950, concerning the 
plight of the thousands of children removed from 
Greece to the countries of eastern Europe during 
the course of the recent Greek guerrilla warfare. 

As you know, the President has pledged the 
utmost support of this Government to the efforts 
of the United Nations and the international Red 
Cross agencies to bring about the repatriation of 
these children to their homes. A resolution 
adopted by the House of Representatives on March 
22 expressed the deep interest of that body in this 
question. 

The prolonged delay by the receiving countries 
in giving effect to the two resolutions of the United 



Nations General Assembly, which they supported 
and which called for the children's repatriation, 
is a matter of concern to this Government. As 
you are perhaps aware, invitations were recently 
extended to the national Red Cross societies of 
Greece and the receiving countries to discuss the 
problem at international Red Cross headquarters 
at Geneva, but none of these societies, except that 
of Greece, accepted the invitation or was present 
at the meeting. Equally disturbing are the fre- 
quent statements in the controlled press of the 
eastern European countries that the children will 
not be returned to Greece except under certain 
political conditions and for specific political 
purposes. 

This Government will, nevertheless, continue 
to insist that the reunion of these thousands of 
children with their families is solely a humani- 
tarian objective which must not be obscured or 
delayed by political issues or teclinicalities. 

I am confident that the high moral authority 
which His Holiness is bringing to this cause will be 
most helpful in the circumstances. 
Sincerely yours, 

Dean Acheson 



A-pril 7, 1950 
My Dear Mr. Secretary : I wish gratefully to 
acknowledge your kind letter of April 5th, in 
reference to the plight of children removed from 
Greece to Eastern European countries during the 
recent guerrilla warfare. 

It is most gratifying to learn of the continued 
interest of the Government of the United States in 
this humanitarian jDroblem, and it will be a pleas- 
ure for me to inform accordingly the Secretariat 
of State of His Holiness. 

With sentiments of highest consideration and 
kind personal regards, I remain 
Yours very sincerely, 

A. G. Cicognani 



Visit of Paraguayan Lawyer 

Manuel Gill Morlis, Paraguayan lawyer, who 
is president of the Rotary Club of Asuncion, Para- 
guay, and alternate on the Governing Boaixl of the 
Centro Cultural Paraguayo-Americano, arrived 
in the United States, on April ;?, 1950, as the re- 
cipient of a grant-in-aid from the Department of 
State under the program of exchange of persons. 

Mr. Morlis is in the United States to study Ro- 
tary Clubs and similar civic and cultural organi- 
zations and to confer with leaders in these 
organizations. 



688 



Department of State Bulletin 



The ITO Charter — A Code of Fair Trade Practices 



Statement by Secretary Acheson'^ 



You have before you tlie question of United 
States membership in the proposed International 
Trade Organization. Tlie purpose of the pro- 
posed Organization is to promote international 
trade. The cliarter of the Organization estab- 
lishes, for the first time, a comprehensive code of 
international fair trade practices. The Organi- 
zation, to be established within the United Nations 
structure, will provide a forum where nations can 
bring their trade grievances and settle their trade 
problems. 

The code of fair trade practices set forth in the 
charter is a code designed to help achieve an in- 
ternational trading system in which traders may 
buy and sell where they please — the system econo- 
mists call "multilatei'al trade"' — the system under 
which private enterprise and free competition has 
the best change to prosper. 

Origin of the Charter 

This alinement with basic United States prin- 
ciples did not just happen. The United States 
took the lead in urging the United Nations to bring 
together representatives of 54 nations to work out 
an agreed charter. We provided the original doc- 
ument which they used as the basis of their de- 
liberations. We did this because we believed that 
the world would not achieve economic recover}' 
and world peace unless the unhealthy and chaotic 
conditions of international trade, resulting from 
two world wars and a serious depression, could be 
improved. It was clear that the growth of all 
sorts of new devices to restrict and channel trade 
would continue unabated if each country tried to 
solve its economic problems at the expense of 
others. Only by joint effort by many countries, 
could we hope to alter the trend toward diminish- 
ing trade and bilateralism. 

The United States is the leading exponent of 



' Made before the House Committee on Foreign Affairs 
on Apr. 19, 1950, and released to the press on the same date. 



free enterprise and free competition. The United 
States is a leading advocate of the advantages of 
multilateral trade. The United States believes 
in the cooperative approach to the settlement of 
international problems. 

ITO as a Test of Leadership 

It is not enough to believe and to advocate. 
American leadership in world affairs has always 
depended on our willingness to translate belief 
into action, to practice what we preach. In a 
real and practical way, American action with re- 
spect to the International Trade Organization is a 
test of our leadership. It is a demonstration not 
only to ourselves but to all other free peoples that 
we really believe in free enterprise, competition, 
and multilateral trade. Such a practical demon- 
stration is sorely needed at this time when free- 
dom is hanging in the balance in many parts of 
the world and millions of people are looking in 
our direction for assurance that we really mean 
what we say. 

We have learned the bitter lesson that freedom 
is often a fragile thing — that it maj' wither, espe- 
cially when its roots are shallow, under the stress 
of privation and economic crisis. It is where the 
people of a free nation can see the prospect of 
achieving a fuller and more satisfying material 
existence that the institutions of freedom are most 
likely to be secure and the advocates of peace are 
most likely to hold firmly tlie reins of government. 

The European nations have made great strides 
toward restoration of their production and eco- 
nomic health by their own efforts and with our 
help through the European Recovery Program. 
They need to do much more. 

In the Point 4 Program, we hope to help in the 
long process of building production and bringing 
about laigher standards of living in underde- 
veloped areas. 

But increase in production is not enough. 
Countries must be able to exchange the goods they 
produce for the goods of others which the}- need. 



May 1, 1950 



689 



In other words, production and trade are two 
sides of the same coin, both necessary to its value. 

If the European countries are to retain the 
ground they have gained and stand on their own 
feet, they must be able to trade as freely as possi- 
ble with each other, with us, and with the rest 
of the world. 

If the underdeveloped countries are to grow in 
economic strength, they must have the greatest 
possible access to the supplies and markets of the 
rest of the world. 

If the United States is to remain strong and 
prosperous and secure, it needs a healthy and ex- 
panding export and import trade. 

If the channels of world trade are not cleared, 
the economic recovery and the economic develop- 
ment of other countries will be impeded : our own 
goods will not be able to find markets abroad ; we 
will be hindered in our efforts to get many of the 
things we need or want from abroad; and eco- 
nomic frictions between nations will be generated 
as they vie with each other in the manipulation 
of restrictions on each other's trade. 

Purpose of the Charter 

What is the purpose of this charter ? What does 
it do? 

The purpose of the charter is to help expand 
international trade and, thus, to contribute to 
higher standardis of living, to greater production 
and wider distribution and consumption of goods 
and services, and to economic and political stabil- 
ity throughout the world. 

It does three things. It establishes a code of 
principles to guide action in a variety of inter- 
national economic relations. It creates a mecha- 
nism, the International Trade Organization, 
within the United Nations family, to serve as a 
forum for the international consideration and so- 
lution of trade policy problems. It obligates its 
members to consult about their international trade 
policies before they act. 

I do not propose to describe the charter in de- 
tail. This will be done by witnesses who follow 
me. But I would like to outline its main features. 

Main Features 

The core of the charter is the chapter on Com- 
mercial Policy (chapter IV). That chapter con- 
tains the underlying principles of the document. 
The other chapters, for the most part, complement 
or qualify those central principles. These prin- 
ciples are : 

First, the familiar principle of most-favored- 
nation treatment; that is, that no country should 
give special favors to the trade of another country 
but should treat all alike (article 16). This prin- 
ciple has been an integral part of our commercial 
policy for over a quarter of a century. 

Second, the principle that countries should be 

690 



prepared to negotiate with each other for the selec- 
tive reduction of tariffs and for the elimination 
of tariff preferences (article 17). This prin- 
ciple is already embodied, so far as the United 
States is concerned, in the Reciprocal Trade 
Agreements Act. 

Third, the principle that any barriers to trade 
or limitations on imports should be openly concen- 
trated at the customs frontier. This means that 
after imported goods cross the frontier, they 
should receive the same treatment as domestic 
goods and that tariff concessions should not be 
nullified by internal taxes or regulations which 
discriminate against imported goods (article 18). 

Fourth, the principle that the "invisible tariff" 
of conf usintf and complicated customs regulations, 
often more Durdensome to trade than actual tariff 
rates, should be lowered by simplification (sec- 
tion E) . 

Fifth, the principle that quotas should not be 
used for protective purposes but should be limited 
to use in certain specified situations and that their 
use must be subject to international control and 
scrutiny (article 20). 

These principles, if accepted and put into opera- 
tion, will gi-eatly improve the opportunities of 
businessmen and producers of the various coun- 
tries to sell their goods to each other on a com- 
petitive basis. 

Dealing With Monopoly and Cartel 

It was apparent, however, that the commercial 
policy princijiles and commitments of the charter 
could not do the job alone. In certain cases, ex- 
perience has shown that monopoly and cartel 
agreements between private business groups have 
prevented competition in international trade as 
effectively as barriers imposed by governments. 
In the United States we deal with these practices 
under the antitrust laws. But until the Habana 
conference, there has never been any effort to 
establish machinery for dealing with this problem 
internationally. 

The chapter on restrictive business practices 
(chapter V) defines certain practices likely to be 
harmful and contains commitments by the mem- 
ber nations to take necessary action under their 
own laws to eliminate practices found to be in- 
jurious. I think you have already received a letter 
from the Attorney General expressing his satis- 
faction with these provisions. 

The provisions of the charter on commercial 
policy and cartels are designed to deal with situa- 
tions in which the normal competitive forces of 
the market place, if allowed to operate without 
restrictions, will usually deal satisfactorily with 
the problem. 

Special Measures in the Charter 

In one important area of international trade, 
however, special measures may be required. This 

Department of State Bulletin 



is the urea of primary commodities whore burden- 
some surpluses may develop wliic-h would create 
widespread hardship in the absence of some action 
by governments and where the normal forces of 
the market place do not operate effectively to give 
relief. In our domestic legislation, for example 
our farm program, we have recognized the special 
problems which often confront our producers of 
primary protlucts. The charter similarly recog- 
nizes that special measures may be required for 
these pi-oilucts in international trade. It, there- 
fore, defines circumstances under which commod- 
ity agreements, like the wheat agreement for ex- 
ample, may be entered into between governments 
and sets up standards for such agreements, de- 
signed to guard against some undesirable features 
■which have characterized such agreements in the 
past. For example, in the past such agreements 
usually were between producers only. Under the 
charter, consuming countries would have to have 
equal representation (chapter VI ) . 

Moreover, the charter recognizes that action to 
remove barriers to the movement of goods will be 
futile unless there are goods to move and purchas- 
ing power with which to buy them. People who 
are unemployed do not buy the products of their 
own or other countries. Countries in a primitive 
state of development do not provide substantial 
markets for the goods of other countries. Nor do 
they produce enough products for their own citi- 
zens and those of other countries to buy. There- 
fore, the charter deals with certain aspects of 
employment and economic development (chap- 
ters it and III). 

In the field of employment, chapter II commits 
the member countries to use their best efforts ac- 
cording to tlieir own constitutional procedures 
to achieve and maintain full and productive em- 
ployment within their borders. An example of 
the kind of action which might be taken is our 
own Employment Act of 19-1:6. 

Chapter III of the charter gives the organiza- 
tion certain functions in the field of economic de- 
velopment and contains provisions to help the flow 
of technological information and skills and pri- 
vate capital into areas which need and can use 
them. It provides for the making of studies, the 
furnishing of information, the encouragement of 
commercial treaties. It also provides safeguards 
against certain abuses of foreign investment which 
have unhappily taken place in the past. 

These are the principal substantive provisions 
of the charter. Some changes in domestic laws 
will be required for full compliance with it. 
These changes, however, for the United States, 
are relatively few in number. 

The Character of the Charter 

In working out the charter, a fundamental 
choice had to be made at the outset as to the 
character of the document. Was it to embody a 
set of principles which the member countries would 



like to see adopted as a long-term objective, even 
though not all of them could be fully applied under 
present conditions^ Or was it to be confined to 
rules that all members could apply fully right 
away? To put it another way, was the charter 
designed to provide objectives, to set a direction 
for the future, to ])rovide something to work 
toward, or was it to accept the pteiiiise that the 
present chaotic conditions of worUl trade were 
here to stay and just try to make the best of it'^ 

To state the alternatives gives the answer as 
to which should be chosen. We took the first, of 
course, and set out to draft a charter which would 
establish the rules as we would like to see them and 
would make allowance for the cases in which 
everyone agreed that the rules could not be applied 
without qualification. Those allowances, which 
are necessary for us as well as for other countries, 
are the "exceptions" about which there has been 
considerable public discussion. 

Many of the commitments of the charter, even 
under today's economic conditions, can be im- 
mediately put into full effect. These commit- 
ments include those dealing with negotiations for 
the reduction of tariffs and elimination of pref- 
erences, the abolition of discriminatory internal 
taxes and regulations, the simplification and pub- 
lication of customs regulations, the negotiation 
and operation of commodity agi-eements, the limi- 
tations on cartel activties and others. 



Certain Qualifications 

Other commitments contain qualifications, 
because their immediate unconditional application 
would not be possible at this time. 



USE OF QUOTAS 

For example, the members of the Ito will agree 
as a general principle, to abandon the use of quotas. 
But. at the pi'esent time, it is inescapably necessary 
for many, if not most, countries to budget their 
foreign purchases. Therefore, the charter pro- 
vides that when countries are in real balance-of- 
payments difficulties, i.e., short of dollai-s or other 
foreign currencies, they may use quotas to limit 
their expenditures of foreign exchange. When 
the circumstances which the charter recognizes 
as justifying the use of such restrictions have been 
corrected, members must abandon them. 

Other commitments may require special treat- 
ment under particular circumstances. 

TARIFF RATES 

Under certain circumstances, for example, a 
tariff rate, negotiated under the commitment of 
members to negotiate for the reduction of their 
tariffs, may cause or threaten unex])ecte(l injury 
to a domestic industry. The charter provides 
that under such circumstances the country grant- 
ing that concession may withdraw or modify it 



May I, 1950 



691 



to the extent necessary to prevent such injury. 
This provision is patterned on the escape clause 
which the United States inchides in trade agree- 
ments negotiated under the Reciprocal Trade 
Agreements Act. 

National security at times requires measures 
which would not conform to the general principles 
which would normally be applied under the 
charter. An exception is, therefore, provided to 
peimit action by member countries necessary for 
their national security. 

Without exceptions of this kind, members of 
the Organization, ourselves included, could not 
accept the commitments of the charter. The ex- 
ceptions are carefully defined and are agreed to 
by all. Their use is subject to scrutiny by the 
Organization. If abused, the members may 
complain to the organization. 



Proposed Structure 

Finally the charter establishes an international 
organization in which problems arising out of 
trade relationships can be discussed and solutions 
reached. It will be a specialized agency of the 
United Nations. Its proposed structure is similar 
to that of the other specialized agencies. 

The Organization will be financed by contribu- 
tions from the members. The scale of contribu- 
tions will be determined by the Conference under 
the principles applied by the United Nations. 

The charter will come into effect when it is ac- 
cepted by 20 governments. Only two have ratified 
it to date. The others are all waiting to see what 
the United States does. No such organization can 
hope to function successfully without the full sup- 
port of the United States if for no other reason 
than that the United States alone accounts for 
about 50 percent of the world's industrial pro- 
ductive capacity, about 20 percent of its agricul- 
tural capacity and about 20 percent of world trade. 

Mr. Thorp will give you a more detailed descrip- 
tion of the charter with some charts which I be- 
lieve will be helpful. But before I close, there are 
some points of general significance which I would 
like to stress and to urge you to keep in mind 
throughout your consideration of this document. 

Points of General Significance 

First of all, this charter represents agi-eement 
of the representatives of 54 nations on a code of 
principles to be applied in the conduct of their 
international trade. These principles are not mere 
generalities. They are sufficiently precise to be 
guides for action. And they cover a very wide 
range of trade relationships. To have reached 
agreement on the articles dealing, for example, 
with customs procedures alone, or those dealing 
with restrictive business practices alone, would 
have been a very considerable achievement. To 

692 



have reached agreement over so wide a range of 
trade relationships is unprecedented. It required 
over 2 years of international negotiation and study 
and more years of prior preparation. Therefore, 
the charter is a document developed with unusual 
care and thoroughness. 

Second, the charter represents acceptance by the 
representatives of 54 nations of the principle of 
consultation before action, where action affects 
another's interest, rather than the principle of 
unilateral action followed by retaliation. It pro- 
vides for an organization to serve as a conference 
room for discussion and solution of trade problems 
and an impartial mediator and arbiter in trade 
disputes. 

I cannot stress too strongly the importance of 
this combination of agreed principles and the ob- 
ligation and mechanism of consultation. Each 
nation can proceed more confidently in reduction 
of its barriers to trade if it knows "that other na- 
tions are committed to travel the same road, that 
it will be consulted before action is taken which 
may adversely affect its interests, and that it can 
bring problems up for discussion and public scru- 
tiny in an impartial forum. 

The sanctions of this Organization are not the 
sanctions of force, or of power to direct action by 
member nations, or of the power to spend money, 
for it will have no money to spend. Btit it has 
sanctions. Its sanctions stem from the voluntary 
agreement of its members to abide by certain 
rules, and include the power to bring up for open 
discussion and public scrutiny cases of failure to 
abide by that agreement and the power to release 
members from their obligations under the charter 
to another member which is found by the Organ- 
ization to have failed to abide by its agreement. 

Third, the fact of agreement over so wide an 
area of trade relationships is, as I have said, most 
remarkable and most heartening. Equally heart- 
ening and equally important is the fact that we 
have this agreement now, while trade patterns and 
policies are still in the making, and there is still a 
choice as to the direction in which nations will 
move. Action now is needed. We cannot afford 
to wait in the vain hope that, at some future time, 
economic conditions will be more favorable to 
getting a better agreement. 

By joining the Ito, member nations will accept 
the principles of nondiscriminatory, competitive, 
multilateral trade, governed primarily by the 
forces of the market place. These are the prin- 
ciples in which the United States believes and 
which it has advocated. Only if these principles 
are accepted and widely lived up to can the pri- 
vate trader have a I'eal opportunity to conduct his 
business on a fair, competitive basis. The fact of 
commitment to these principles will influence 
every decision of member nations in developing 
their trade policies. In this way, the charter can 
have a profound influence on the future course 
and form of international trade. 

Department of State Bulletin 



Limitations of the Charter 

It is important to recognize the liniitiitions of 
the document a.s well as its advantages. Let nie 
make it clear at once that the charter is not pre- 
sented to you as a panacea or a cure-all or a final 
solution to our trade problems. It does not im- 
mediately or completely remove all rigid quota 
controls on trade or all trade discriminations. 
Obviously it cannot. It is designed to make a 
beginning and to provide the means of further 
progress in dealing with the disturbed and difti- 
cult conditions which exist today and in bringing 
about more normal conditions. 

Moreover, since the charter represents the 
agreement of representatives of 5-4 nations and is 
designed as a means of helpin<j them to trade 
harmoniously with each other, it is not written 
exactly as the United States, or any other one 
nation would have written it. The framers of 
the charter knew that economic difficulties and 
differences in national systems and points of view 
could not be legislated out of existence. 

Meaning of Charter to International Trade 

The meaning of the charter is, therefore, not 
any automatic guaranty of quick and complete 
results. It is rather in the fact that it represents 
agreement on objectives, that, b}' accepting it, 
members will agree to take many steps now pos- 
sible to put those objectives into effect, and that 
it provides the means for members to take further 
steps along the right road. 

The questions we must ask of the charter are 
whether it will improve today's trading condi- 
tions, whether it sets us in the right direction, and 
whether we and the world will be better off with it 
than without it. 

I am persuaded that the reopening of the chan- 
nels of international trade is basic to the building 
of a prosperous and peaceful world. I am con- 
vinced that reopening of the channels of inter- 
national trade can only be accomplished by 
cooperative action among a large number of coun- 
tries. Wide international agreement upon the 
rules which the charter embodies and wide mem- 
bership in the Organization which it would estab- 
lish can make a material contribution to the 
expansion of international trade. This action ob- 
viously cannot be effective without the active par- 
ticipation and support of the United States. 

As I said at the opening of my statement, we 
are the leading exponent of multilateralism, free 
competition, and private enterprise in the world 
today. We believe that private enterprise has 
more to contribute to the world than any other 
economic system. Therefore, our consistent pol- 
icy is to put our full energies behind any inter- 
national effort which can help to create conditions 
in the world in which the private trader can buy 
and sell where he pleases and where he thinks it 
will be to his best advantage. 

The Ito is conceived in this central philosophy. 

May 1, 1950 



It is essentially a limitation upon the exercise by 
governments of tiieir power to restrict and con- 
trol trade. It would not abolisii all interferences. 
Of course not. But it would aliolisli many, re- 
duce others, and limit still otheis to precisely de- 
fined areas. And, thereby, it can provide a greater 
opportunity for the private trader. 

Other countries are now waiting to see whether 
the United States accepts or rejects the charter. 
The choice, therefore, which the Congress is about 
to make is not only whether tlie United States will 
accept membership in the International Trade 
Organization but whether there will be an Inter- 
natioiuil Trade Organization. 

We arc engaged in a great cooperative effort 
with other countries to raise standards of living 
throughout the world and to achieve political 
stability and peace. Our effort has many facets, 
political, economic, financial, military. All are 
interrelated. Each supports the others. 

We are also engaged in a struggle between two 
ways of life, two systems of thought and philos- 
ophy as different as the poles are wide apart. 
Millions of people are watching this struggle to 
see which system and way of life will work the 
best and do the most to provide a decent life for 
the individual. To the extent that we can work 
effectively with other nations of like mind to make 
our system work, our hand will be strengthened 
in that struggle. An effective cooperative mecha- 
nism in the basic field of trade can immeasurably 
strengthen us and other freedom-loving nations 
in our effort to establish the kind of world order 
in which we can live in peace and pursue our way 
of life without fear that it will be overthrown. 

The Ito charter will be an effective additional 
means to this end which we all desire. I, there- 
fore, urge the Congress to authorize United States 
acceptance of membership in the organization 
which this charter would establish. 



-Con. from page 668 



U.S.S.R Fires on U.S. Plane- 
Moreover, the Soviet Government has thus far 
shown no sign of regret for its attack against an 
American aircraft. Instead, it has taken an ag- 
gressive tone and attempted to justify its action 
by impossible allegations. It has charged that the 
American aircraft fired first, when the American 
plane had nothing with which to shoot and was 
too slow a craft to attack fighters. Moreover, it 
has attempted further to confuse the issue with 
false propaganda claims and diatribes against the 
United States in the controlled Soviet press. 

This attitude of the Soviet Government shows 
clearly the insincerity of its oft-proclaimed desire 
for peaceful relations with the United States and 
the non-Soviet world in general. The cause of 
peace is not furthered when the U.S.S.R. osten- 
tatiously decorates Soviet airmen in a manner 
calculated to give the impression that they are 
being rewarded for shooting down a defenseless 
American plane. 

693 



Provisions in Trade Agreement With Costa Rica Waived 



[Released to the press April 5] 



Notes were exchanged yesterday between tlie De- 
partment of State and the Embassy of Costa Rica 
pursuant to which the Government of the United 
States has agreed to waive, for a period of 1 year, 
beginning April 1, 1950, the provisions of article I 
of the existing trade agi-eement between the two 
countries, in order that Costa Rica may apply to 
import from the United States of articles included 
in schedule I of the trade agreement certain multi- 
ple exchange surcharges which are provided for in 
legislation promulgated at San Jose, Costa Rica, 
on April 1. 

Article I of the trade agreement reads: 

Articles the growth, produce or manufacture of the 
United States of America, enumerated and described in 
Schedule I annexed to this Agreement and made a part 
thereof, shall, on their importation into the Republic of 
Costa Rica, be exempt from ordinary customs duties in 
excess of those set forth in the said Schedule. Tlie said 
articles shall also be exempt from all other duties, taxes, 
fees, charges or exactions, imposed on or in connection 
with importation, in excess of those imposed on the day 
of the signature of this Agreement or required to be im- 
posed thereafter under laws of the Republic of Costa Rica 
in force on the day of the signature of this Agreement. 

TEXT OF THE U.S. NOTE 

Excellency : I have the honor to refer to con- 
versations which have taken place between repre- 
sentatives of the Governments of the United States 
of America and the Republic of Costa Rica with 
regard to the fact that the Government of Costa 
Rica has been impelled by its present foreign ex- 
change position to enact a "Law for the Control of 
ointernational Transactions," which, as promul- 
gated on April 1, 1950, includes provisions for the 
imposition of multiple exchange surcharges. In 
the course of the conversations, reference was 
made to the respect of the Government of Costa 
Rica for its international obligations, resulting in 
a desire on its part to maintain the existing trade 
agi-eement with the United States of America 
which was signed at San Jose on November 28, 
1936, and entered into force on August 2, 1937. 

In view of the fact that, as applied to imports 
from the United States of America, of products 
listed in Schedule I of the trade agreement, the 
multiple exchange surcharges are in conflict with 



Article I of the trade agreement, the Government 
of Costa Rica has requested the Government of 
the United States of America to agree to a waiver 
of Article I during the emergency period for 
which the measure is intended to provide. 

Recognizing the problem confronting the Gov- 
ernment of Costa Rica, the Government of the 
United States of America agrees that, for a period 
of one year, beginning April 1, 1950, it will waive 
the provisions of Article I of the above-mentioned 
trade agreement in respect of the application of 
the multiple exchange surcharges in question to 
imports from the United States of America of 
articles included in Schedule I of the trade agree- 
ment. 

The Government of the United States of America 
considers that its agreement to the waiver of 
Article I is a temporary expedient to permit the 
maintenance of the trade agreement while the Gov- 
ernment of Costa Rica seeks a solution of its finan- 
cial difficulties which will not be in conflict with 
Article I. 

The Government of the United States of 
America reserves the right to revoke the waiver of 
Article I upon 30 days' written notice to the Gov- 
ernment of Costa Rica if the multiple exchange 
surcharges are used for purposes other than those 
referred to in the preceding paragraph. 

If the Government of Costa Rica concurs in the 
foregoing, this note, and Your Excellency's reply 
thereto, will constitute an agreement between our 
two Governments, effective upon receipt of Your 
Excellency's note. 

Accept [etc.] 

For the Secretary of State : 

Edward G. Miller, Jr. 

TEXT OF THE COSTA RICAN NOTE 

[Translation] J^pril ^^ JQSO 

Excellency: I have the honor to acknowledge 
the receipt of Your Excellency's note of April 4, 
1950 in which reference is made to conversations 
which have taken place between representatives of 
the Governments of tlie Republic of Costa Rica 
and of the United States of America with regard 
to the fact that the Government of Costa Rica has 



694 



Department of Stale Bulletin 



been iiiipellod by its present foreign exchiinge 
position to enact a ''Law for the Control of Inter- 
national Transactions" which, as pronml-jated on 
April 1, 1!).")(). includes provisions for the imposi- 
tion of nndtiple exchanjie surcharges. 

I am pleased to inform Your Excellency that 
the Government of Costa Rica confirms that the 
terms of the understanding; it has reached with the 
United States Government are those expressed in 
your note of April 4, 1!)5(). and that j'our note, to- 
gether with this reply, constitute an agreement 
between our two Governments. 

It is the firm belief of the Government of Costa 
Rica that the ajiplication of the new exchange 
legislation will enable it to arrive sooner at a 
satisfactory solution of its financial diflicultics, to 
deal more effectively with inflationary forces, to 
provide for the eventual elimination of arrears in 
its international ]):iyments, and to strengthen its 
foreign exchange reserves. 

It has been gratifying to my Government to ob- 
sei-ve the good willand the understanding of its 
problems that have been demonstrated by the rep- 
resentatives of the United States Government with 
whom those problems have been discussed. 

Accept [etc.] 

Mario Echandi 



U.S.-Dominican Tariff Concessions 

The tariff concessions which the Dominican Re- 
public initially negotiated with the United States 
at Annecy, France, in 1949, and certain of the tariff 
concessions which the United States initially ne- 
gotiated with the Dominican Republic will become 
effective on May 19, 1950.^ 

The Dominican Republic on April 19, 1950, 
signed the Annecy Protocol of Terms of Accession 
to the General Agreement on Tariffs and Trade 
and has taken the other steps necessary to become 
a contracting party to the agreement. Under the 
pro%'isions of the protocol, the two governments are 
obligated to make their concessions effective 30 
days after these actions have been taken. 

The Dominican Republic is the fourth among 
the 10 new acceding countries which negotiated at 
Annecy to take this action. Haiti, Greece, and 
Sweden are the other three countries. 

Reductions in duty were granted to the United 
States by the Dominican Republic on such i)rod- 
ucts as prepared cereals of oats, unsweetened bread, 
biscuits and crackers, hops, canned fruits, leaf and 
shredded cigarette tobacco, radio transmitting and 
receiving apparatus, radio phonographs, other 
phonographs, photographic cameras, sugarcane 
harvesting machinery and parts, woven wire for 
fences, varnishes, driers, lacquers and stains, glass- 
ware, fountain pens, and unexposed photographic 

' For a list of the tariff concessions p-anted, see Depart- 
ment of State press release 381 of Apr. 20, 1950. 

May 1, 1950 



films. Present duties or duty-free treatment were 
bound on such prmlucts as wheat, wheat flour, 
malt, raw cotton, fre.sh fruits and berries, business 
nuichines, electrical apparatus, agricultural ma- 
chinery and implements, printing machinery, 
paper, printed matter, certain cotton fabrics, phar- 
maceutical products, certain fertilizers, and auto- 
mobile and truck tires. 



Canadian-U.S. Weather 
Stations To Be Resupplied 

The Department of State announced on April 6 
that the annual spring resupply of the Canadian- 
United States Arctic Weather "Stations, in which 
the Koyal Canadian Air Force will this year coop- 
erate with the United States Air Force, is now 
under way. 

This air-transport operation to the weather sta- 
tions in the north of the Canadian Arctic islands 
established jointly by the Meteorological Division 
of the Canadian Dei)artment of Transport and the 
United States Weather Bureau will be carried out 
from the Central Joint AVeather Station at Reso- 
lute Bay, Cornwallis Island. It will include the 
establishment of another joint weather station — 
the most northerly in North America — at the 
northeastern tip of Ellesmere Island. 

The supplies to be transported include provi- 
sions, scientific instruments, and fuel oil moved by 
ship to Resolute last summer. These will be de- 
livered to the joint stations at Mould Bay, Prince 
Patrick Island; Isachsen, Ellef Kingnes Island; 
and Eureka on the west coast of Ellesmere Island. 
The spring airlift will continue until the end of 
April or early in May. 

The joint stations are each staffed by a Canadian 
ofhcer- in -charge and equal numbers of United 
States and Canadian Weather Service personnel. 
Replacement staffs will take up their duties this 
spring when the stations are resuj^plied. Weather 
rejiorts from the Joint Arctic Weather Stations 
are transmitted 4 times daily by radio to Edmon- 
ton, Alberta, and teletyped from there for distribu- 
tion to forecast centers on the North American 
Continent. They also receive world-wide distribu- 
tion. • TTT ^1 

Since the inception of the Joint Arctic Weather 
Station Programme in 1947, the United State.s Air 
Force has carried out the airlift to the four joint 
stations at present established. This spring, the 
USAF is using C-47, C-82, and C-54 planes <^ 
the Military Air Transport Service, and the RCAF 
is participa"ting with a North Star Transport from 
426 Squadron, Dorval, P. Q. The scale of RCAF 
participation in the supply of the Joint Weather 
Stations by air will be increased in 1951. It is 
expected that the RCAF will take over full re- 
sponsibility for the work in 1952. 

695 



The Quality of American Patriotism 



Remarks hy Secretary Acheson ' 



The feelings which I have at being with you 
here this evening spring from the roots of my life. 
Here my parents came to live and work among yon 
nearly 60 years ago. Into this community and 
this church they have poured two lives of cease- 
less devotion. Here my brother and sister and I 
were born, and spent our youth, in that quiet past 
which now seems another world. Out of this soil 
I grew. It has entered into me and is a part of 
me as I am of it. 

This bond between a man and the early sur- 
roundings which molded and shaped him is not 
only the strongest of ties ; it is one which becomes 
more important than ever to us in this age when 
human problems on a wider scale have become so 
vast and so baffling. The first youthful knowledge 
of human relationships, in which the path of duty 
was recognizable and in which moral values were 
plain, is for many of us one of the few fixed points 
in the turmoil and confusion of the world today. 

Without these fixed points, we would have 
nothing to hold onto. If these familiar objects 
and values which surround us here, and which give 
to this place its character, are not real, then 
nothing is real. If they are not valid, then there 
is no validity in the assumptions of our national 
life. Those of us whose fate it is to occupy our- 
selves with national affairs may apply ourselves 
as we like in that whirlpool of activity, but make 
no mistake about it: it is this source — the neigh- 
borhood and the community, as we knew them and 
recollect them — to which we must return for the 
inspiration and the faith to sustain our effort. 
Without it there is no substance in what we do. 

We in this parish have heard many times the 
words, "In my Father's house are many mansions." 
In this country of ours, there are many home 
towns. They are not all alike in their traditions 
and outlook. It is not necessary that they should 
be. The glory of our country lies in its ability 



' Made on the occasion of the 200th anniversary of the 
Holy Trinity Parish at Middletown, Conn., on Apr. 17, 
1950, and I'eleased to the press on the same date. 



to accept and reconcile diversity. Local differ- 
ences in origin are not clashing elements. They 
are complementary and mutually sustaining in a 
way that is possible only in a free society. For 
that reason, one American's pride in his home en- 
vironment is a thing that every other American 
understands and approves, whether or not that 
environment is his own. And behind all the good- 
natured rivalry and boasting which we like to 
attach to our local origin, is the recognition that 
the experience of growing up in any American 
community, from Connecticut to California, con- 
stitutes the indelible stamp of nationality. This 
is why when from one American impulse or 
another we move to other areas, other States, we 
find ourselves at ease and at home. This is what 
makes us Americans. 

There are few communities that can look back 
on a longer and deeper participation in the mold- 
ing of the national tradition than Middletown. 
This parish is 200 years old today. But the com- 
munity in which it is centered predates it by 
exactly a century. In the fall of this year you 
will be celebrating its three hundredth anniver- 
sary. Our fellow townsman and distinguished 
American historian, John Fiske, described it in 
1900 as "the very central home and nursing place 
of the ideas and institutions which today consti- 
tute the chief greatness of America." These are 
deep roots and impressive ones. 

It is not strange that this was so. Life in the 
Connecticut Valley three centuries ago bred 
strong and self-reliant men and women. The 
Valley was the gateway to the West — which 
meant western Massachusetts — to the frontier at 
Springfield and Deerfield with all its dangers — 
to the land beyond in Vermont and New Hamp- 
shire. Eleazor Wheelock went up the Valley 
from New Haven to teach the Indians at Hanover. 
The route to this new country followed the great 
river. There were many stout hearts to take it. 

As the years moved on, men of the Valley began 
to look down the river and beyond the Sound and 



696 



Department of State Bulletin 



the ocean to China. Ships began to sail to the 
Far East and back again, up the river, with silk, 
tea, and furs. Many of you can remember the 
customs house which still stood on Main Street 
when I was a boy. And the old houses on High 
Street bear witness that the adventurous spirits 
who sailed these ships were good traders. 

All of this, as I have said, bred strong char- 
acters. And not only strong characters but opin- 
ionated and contentious ones. These were no 
men — or women either — to take their opinions 
and beliefs ready-made from anyone else. An 
early order of the General Court of Connecticut, 
referring to the citizens of Middletown, took spe- 
cial note of what it called "the unsuitableness in 
their spirits."' 

So it was not always easy for them to agree 
among themselves, any more than it is for us 
today. Issues were vigorously and stubbornly 
contested. But it was characteristic of them that 
in the end they always found some practical 
settlement. 

At the two hundred and fiftieth anniversary 
celebration of the town, in 1900, the Reverend 
Frederick Green, then pastor of the South Con- 
gregational Church, told of the dispute over the 
location of the Third Meeting House. "There 
was so much danger of friction," he said, "between 
those living on what they called the west and 
north and east sides of the square bounded by 
Main and High Streets, that it was decided to 
leave the question of the site to the Lord's decision 
by means of the lot. And the lot having fallen 
upon the south corner, where no one desired it, 
thev bowed to the Lord's will and built at the head 
of Church Street." 

Tolerance, in particular, did not come easily or 
quickly to these early settlers. When this parish 
was founded on that Easter Monday, in 1750, it 
was not easy for its members even to get a permit 
to build an Anglican church in the community. 
On the third try, they were given the swampiest 
spot in town, where many of the city fathers 
thought no church could be built. Yet persist- 
ence and determination seem, as so often in Amer- 
ican life, to have triumphed without bitterness. 
We are told that when the problems of terrain had 
been conquered the completion of the frame of 
the first church building was marked by a cheer 
which could be heard a mile away. 

The qualities which make possible a free life 
in a free country — self-reliance, self-respect, and 
respect for the rights and opinions of others — were 
obviously not brought here as a finished product 
by the early settlers. They had to be built up 
slowly, beginning with the very foundations, like 
tliat first church building — despite the unfirm, and 
at first glance, unpromising terrain of human re- 
calcitrance which had to underlie them. They 
were forged in the great and unique experience 
of American national life. They are still being 
forged there today. And perhaps the greatest 
task of our time is to see that all this, which it 

May J, 7950 



took so many generations to create, is not lost in 
a single generation — that, on the contrary, we con- 
tinue to add our own contributions to this edifice 
of freedom which will never be entirely finished 
and which is being so sorely tested today. 

It is fashionable nowadays to interpret the state 
of mind of the American people to explain what 
they are like, what they are thinking, wliat they 
intend. Perhaps, because I was born ami bred in 
New England, I am inclined to be skeptical of such 
pretensions. In New England, we don't think of 
the American people as a vast human herd having 
herd opinions which can be summed up in a sen- 
tence or a slogan. We think of them rather as 
individuals having, each of them, an oi)inion of 
his own. We regard it indeed as the distinguishing 
characteristic of American society that men here 
are individuals who make uj) their individual 
minds and think and speak as they please answer- 
able only to their consciences and their God. That 
distinguishing American characteristic is, as we 
see it, the contribution of those founders of these 
States who built their houses in the wilderness 
because freedom of mind and freedom of con- 
science were worth more to them than all the rest 
together. 

But it is not only because New Englanders bred 
the passion for individual freedom into the Ameri- 
can bone that we respect men who think for them- 
selves, we respect them also because we have 
learned by long experience that men who make 
up their minds for themselves are stronger than 
other men and more reliable in time of trouble. 
We like that quality in a man. We even like it 
in a neighbor whose opinions differ from our own 
and who holds to them, as New England neigh- 
bors sometimes do, with what seems to us on oc- 
casions like obstinate stubbornness. We respect a 
man who knows what he thinks because it is he — 
not someone else — who thinks it. And we have 
confidence in a country in which men like that 
still live. 

It is for that reason, I think, that we New Eng- 
landers, dour and skeptical as we are thought to 
be, believe so profoundly in this country and its 
future. We may have our reservations about one 
administration or another, and we may believe 
that this party or that is taking us down the road 
to ruin, but we never doubt in our hearts that the 
fundamental strength of the American people, the 
strength of a nation of individuals in which men 
think and speak for themselves, will surmount 
all difficulties. And as to that, in my opinion, we 
are right. 

This thought has peculiar force here in the 
Connecticut River Valley by virtue of the changes 
which have taken place over these 300 years. The 
descendants of those early settlers constitute to- 
day only one element of the inhabitants of the 
Valley. They have been steadily joined by new 
arrivals. Those new arrivals had different back- 
grounds, different religions, and different i)olitical 
origins. They were from Ireland and Poland. 

697 



There were Italians, Germans, and Swedes — and 
may I add at least one Canadian. In 1940, almost 
20 percent of the people in the State were foreign- 
born. 

My own parents, like those of many of you here 
tonight, belonged to that 20 percent of our people 
who had come here from other countries. Yet so 
strong was the yeast of Connecticut life that it 
leavened the whole and in almost no time at all 
the newcomers were New Englanders to the core — 
making their own way, shouldering responsi- 
bilities, strongly holding and expressing their 
own opinions. 

One of my earliest memories is of walking with 
my father, the first thing in the morning, from 
the house on Broad Street to the post office. We 
would go down the boardwalk behind the house, 
jjast the church, and then along the block on Main 
Street to the old brownstone building. It was not 
all joy. For the second store on Main Street was 
Mr. Walsh's harness store. He would be standing 
in the doorway beside the great wooden horse, 
which in some way I thought was the one Ulysses 
had made. Mr. Walsh seemed to me Jove-like, 
with his gray beard covering the top of his work- 
ing apron, and infinitely old — although I imagine 
that he was younger than I am now. 

Then would begin what was a combination of 
the 8 o'clock news of the world today, a Capitol 
Cloakroom, and Town Meeting of the Air. Cus- 
tomers and passers-by joined in. Every subject 
was taken to pieces, sometimes put together again, 
and sometimes just left lying around — wars, 
politics, the Irish question, the tariff question, 
Queen Victoria's Diamond Jubilee, and the sad 
propensity of mankind for strong liquors and the 
best method for the control thereof. Everyone 
had strong opinions on nearly all subjects, and 
some apparently believed that all facts were cre- 
ated free and equal. 

]\Iy legs would begin to ache, and my spirits sag 
with them. To pull at my father's coat involved 
hazards not to be lightly risked, and I would end 
up sitting sadly on the platform of the wooden 
horse. Fast time for those two blocks from the 
house to the post office was an hour. But it was 
making New Englanders of all of us. 

It was making more than New Englanders, in 
fact : it was making Americans. For in the life 
of this place, and of many others like it, there was 
embodied something which has always seemed to 
me to be the essence of Americanism — the recog- 
nition of individuality as the foundation of human 
society, the respect by the groups for the human 
individual, regardless of his origin or his station 
in life, and as a qidd pro quo for that respect, the 
acknowledgment by the individual of his share of 
responsibility for his own fortunes and for the 
fortunes of the community. 

Through the operation of these qualities, the 
foundations of society have come to rest in 
America on the voluntaiy participation of the in- 



dividual in the activity of the group, with the 
recognition that the structure will stand or fall 
with the quality of his participation. It is these 
things : this recognition of the individual digiaity 
by the community and this recognition of his own 
responsibility by the individual, that stand out to 
me as the essential characteristics of this com- 
munity in which I grew up and which, to my mind, 
give meaning and purpose to the great struggles 
of national policy in which our people are now 
engaged. 

The connection between these two things is inti- 
mate and luibreakable. The quality of American 
patriotism — the quality of the American's atti- 
tude toward his national community — is not only 
linked with the relationship of the individual to 
the community in which he resides : it stems from 
that relation, it draws its strength from it. And 
it is this which gives us the conviction of the jus- 
tice and the terrible urgency of our national cause. 

It is our glory and our pride that our attitude 
toward our country springs from our individual 
experiences, from the impressions of our child- 
hood, from the moral convictions which we picked 
up on these streets and in these schools and 
churches, and not from an imposed political 
doctrine. This gives us a sti-ength in our national 
purposes which is rarely revealed on the surface 
of our public life except in times of national crisis. 
There are other parts of the world where the 
centralized power of the state is an impressive 
crust, concealing a vast pulp of human misery 
and helplessness. We spurn that type of impres- 
siveness. We rejoice in the fact that the real 
elements of our immense strength are present here, 
where they are perhaps least conspicuous: at the 
foundations of our society, in the homes and the 
shaded streets of many tens of thousands of 
quiet and decent and God-fearing American 
communities. 

It is this thought that carries many of us now, 
as it has carried many of our predecessors, through 
moments which, without it, might shake the 
strongest faith and the strongest resolve. It is 
this thought which gives us calmness and strength 
of spirit amid the tumult and the shouting, like 
a glimpse of the stars through a break in the 
clouds. 

Visit of Honduran Publisher 

Alejandro Castro (hijo) publisher of the weekly 
magazine, Rcvuta Tegucigalpa^ has arrived in 
Washington to begin a 3-month visit in the 
United States for the purpose of conferring with 
colleagues in his field. His visit has been made 
possible through a grant-in-aid awarded by the 
Department of State under the program of ex- 
change of persons. Mr. Castro will remain in 
Washington for a period of 2 weeks after which 
he will visit various cities in order to consult 
with si)ecialists in the newspai)er field. 



698 



Department of State Bulletin 



U.S. and Belgium IVIake Surplus 
Property Available to NAC Countries 

On April 20, tlu' I'liitod Stall's luul Belfxiuin 
sigiunl an af^reiMuonl that tlie ivniainiiij; pix)p- 
erty i)f Fnited States surplus orifjin, previously 
acquired by Bel'jium and in wliich there still 
remains a joint United States-Belgian interest, 
will be made available without cost to Noi-th 
Atlantic Treaty countries to meet military supply 
deficiencies. 

In effecting: this agreement, both governments 
have taken full cognizance of tlieir self-help and 
mutual aid pledges under the North Atlantic 
Treaty and under the Mutual Defense Assistance 
Agreement of January 27, IDaO. They also recog- 
nize the mutual benefits to be derived through 
utilization of this property to maintain and in- 
crease an individual and collective capacity for 
defense in furtherance of the objectives of the 
North Atlantic Treaty. 

The value of the i)roperty involved, which in- 
cludes many categories of military equipment, is 
approximately 30 million dollars. It will be avail- 
able immediately for distribution in accordance 
with recommendations made by the Military Sup- 
ply and Production Board of the North Atlantic 
Treaty Organization. 

The Government of Belgium has given consid- 
erable time and effort to the rehabilitation, storing, 
and cataloging of this equipment. The Govern- 
ment of Belgium will continue to maintain the 
Office d'Aide Mutuelle (Office of Mutual Aid), 
which is thoroughly familiar with these stocks, 
to assist in turning them over to recipient 
countries. 

Tlie Government of Belgium agrees to transfer 
the property to the recipient Government without 
cost except for actual packing and transportation. 

The agreement was signed by Under Secretary 
of State James Webb and Baron Silvercruys, 
Ambassador of Belgium. Mr. Webb made the 
following statement : 

The action of the Government of Belgium in 
making available equipment in joint cooperation 
with the United States to meet supply require- 
ments of its partners in the North Atlantic Treaty 
serves as further implementation of the ])rinciple 
of mutual aid embodied in the Treaty. It attests 
the vitality of the collective effort of the free 
nations of the Atlantic community for joint 
defense. 

I am sure, Mr. Ambassador, that the assistance 
being provided so generously by your Government 
will be received in the same manner as the aid 
which will be supplied for the common defense by 
others of our Treaty partners — with appreciation 
by nations which are united in a firm purpose to 
preserve freedom and justify hopes for a lasting 
peace. 



Baron Silvercruys said in reply: 

This arrangement, Mr. Secretary, is but another 
proof of the co()i)eration between our two Govern- 
ments. 

Based as it is on the undei-standing of their 
nuitual obligations, the agreement beai-s witness 
to their readiness to upliold the principles which 
are the root of the Atlantic Pact. It will serve the 
connnon purpose of defense and it will contribute 
therefore to the preservation of freedom and to 
the maintenance of peace. 



President Gonzalez Videla 
of Chile Visits Washington 

Remarks hy President Trwman ^ 

{Released to the press hy the White House April IS] 

It is with sincere pleasure, Mr. President, that 
I welcome you to the United States. We shall do 
our utmost to make your stay among us pleasant 
and interesting. 

I am happy to welcome you as the Chief Execu- 
tive of a sister republic whose citizens have con- 
stantly been inspired by devotion to the democratic 
principles that we cherish here. Your arrival 
symbolizes the traditional and warm friendship 
that has long existed between our two countries. 

It is a source of satisfaction that, in the spirit 
of friendly cooperation and inter-American soli- 
darity, Chile and the United States are continuing 
their efforts to assure the security and peace of 
the world. Our countries are motivated by the 
same concern for individual freedom and human 
welfare. 

We in the United States are honored by your 
visit and heartily extend our sincere good wishes 
to you personally and for the prosperity of the 
people of your country. 

Welcome, Mr. President ! 



Statement hy Secretary Acheson 
[Released to the press April 12] 

I look forward with great pleasure to the visit 
of the President of Chile, Gabriel Gonzalez Videla. 
The President, together with his wife and a small 
group including the Foreign Minister of Chile, 
Horacio Walker, arrived in Washington this after- 
noon. This visit is a concrete affirmation of the 
close and friendly relations existing between the 
United States and Chile. It is hoped that the visit 
will result in even closer ties and broader under- 
standing between peoples of the two countries. 

' Made nt the Washlnorton National Airport upon the 
arrival of the President of Chile. 



May 1, 1950 



699 



The Challenge of Education 



hv Hmoland H. Sargeant 

Deputy Assistant Secretary for Public Affairs ^ 



The Educator as Citizen 

In the United States the educator is the natural 
link between today and tomorrow. It is largely 
the teacher on whom we depend to develop a broad 
understanding of the world's problems in tomor- 
row's citizens. We have given him a heavy bur- 
den, yet only too often we fail to reward his 
devotion and to recognize his difficulties. His sub- 
ject matter requires the most delicate handling. 
New facts and events change his pi'oblem every 
day. He has no simple proofs of our theories and 
no infallible answers. 

In the United States, the teacher carries a double 
load. As an adult citizen, he must cope with to- 
day's problems, today's anxieties, and, perhaps, 
with today's pessimism. But as soon as he steps 
into a classroom, his main concern must be with 
tomorrow. He must nourish the hope of a stable 
future, point toward it, teach toward it, no matter 
what the disappointments of today. If he trans- 
fers to his students the basic belief that this will 
turn out to be a livable kind of world, that the 
fundamentals of democracy can be preserved, that 
moral order can be established on a universal basis, 
he will be performing a most distinguished and 
vital service for our democratic way of life. 

The student needs the raw materials for his 
spiritual and mental growth. He needs to know 
the real issues in today's world, but he must also 
be able to place them in a context of reasonable 
hope and confidence. He must find himself in the 
idea of a free society as against a slave society. 
He must feel his freedom as a citizen in contrast 
to fear of a Secret Police, the dread knock on the 
door at night. He must judge his freedom of 
worship as against religious persecution. He must 
use his freedom of mind to understand the dan- 
gers of a state-imposed thought control. He must 

'Excerpts from an aiklress made before the National 
Catholic Educational Association in New Orleans, La. on 
Apr. 11, 1950, and released to the press on the same date. 
For full text, see Department of State press release 335. 



see clearly the contrast between his economic free- 
dom and the controlled starvation clamped down 
upon his counterparts in so many of the totalitar- 
ian countries. 

There is no need to soften or disguise these burn- 
ing issues of our time. Thev focus naturally into 
an active and practical belief in our democratic 
principles. I am convinced that when the facts 
are known and their meaning made clear, the men 
of today — and the children who will be the men 
of tomorrow — will make a sound choice. 



Tragedy in Europe 

As educators and as citizens our responsibilities 
have a wide range. Youth all over the world needs 
to understand what is at stake today. The aim of 
the police state, past and present, is to make men 
and children immune to the idea of freedom. I 
happened to be in Europe at the time when Hitler 
and Mussolini were in control of the German and 
the Italian educational systems. I had at least a 
short glance at the kind of training, in the German 
Jugend and the Italian Giovani d'ltalia, that turns 
the minds of children away from friendliness and 
understanding, and builds, instead, a fierce hos- 
tility. Those children went goose-stepping from 
one school to the next, arrogant in the belief that 
they were superior creatures destined, literally, to 
conquer the world. Today that generation, or 
what is left of it, is in a pitiful confusion. It has 
to begin all over again. We can be certain that in 
Western Germany, in Italy, and in Jai)an, educa- 
tion for international understanding will be a long 
and difficult job. 

In the meantime, the tragedy of miseducation is 
being enacted again in Eastern Europe and the 
Soviet Union. In Russia, the Komsomolsk is 
serving the same purpose that the Jugend served 
in Germany. One can see the totalitarian pattern. 
It is not an accidental one. In Czechoslovakia, the 
Communist minority now in control has begun to 



700 



Department of State Bulletin 



concentrate on education and training. It has 
completed the initial stage of taking over the edu- 
cational system. All universities have been purged 
of teachers who refused to conform to Communist 
dogma. In the secondary schools, an estimated 
30 percent of the teachers lost their jobs in the 
first 21 months of the new regime. Everywhere, 
students were questioned to determine their po- 
litical reliability. It is known that at least 10,000 
university students were found to be "unfit" for 
higher education. Under a new law, the text- 
books have been completely revised, and true to 
form, the Russian language made compulsory in 
the schools. 

Where are these measures leading? Given 
enough time, is it not possible that the majority 
of people in the Russian orbit can be so indoctri- 
nated that they will have neither desire nor under- 
standing of freedom? Can mind and character 
be machined to a set response? The experiment 
is now going on behind the Iron Curtain. 



The Teacher's Crucial World 

We have each of us a responsibility in that 
experiment, for no man, in the words of John 
Donne, is an island entire unto himself. There is 
much we can do here at home and overseas. I am 
heartened to see that school children in the United 
States are learning about Unesco, about the United 
Nations and have their exchange programs with 
the children of other lands. That is one way. We 
can help even more directly. Recently, a friend of 
mine had this experience while traveling in Europe. 
He happened to mention to a group over there that 
our sessions of the Congress begin each day with 
a prayer by a Congressional chaplain. That fact 
amazed his audience, and everywhere he went he 
could create the same interest by repeating it. 
The United States has been pictured in many 
ai'eas as a materialistic nation without a moral or 
spiritual unity. We here at home, and especially 
our teachers, have the job of bringing to the surface 
our deep-rooted morality. 

The task before the American educator is one 
which demands our deepest respect and our fullest 
aid. His is a crucial role in our national defense 
against a danger that is greater than the danger 
from weapons or armies. If it is allowed to 
spread, or to go unchecked, no amount of weapons 
or armies of our own will bring us the world we 
want. 

That danger is the willful attempt to enslave the 
human mind, to make it immune to freedom. By 
accepting the challenge to counteract that danger, 
and by working to eliminate it, our teachers can 
become the strongest link between today and a safe 
tomorrow. 



Soviet Note on Trieste Awaited 

Statement by Secretary Acheson 
[Released to the press April 21] 

The Department has not yet received the full 
text of the Soviet note alleging that this Govern- 
ment is violating the terms of the Italian peace 
treaty with respect to Trieste. 

We have had only a summary of the Soviet note 
and are awaiting the full text before preparing 
our reply. From what we have received, it seems 
that the Soviet note is a repetition of a number 
of out-worn arguments with the addition of some 
new and wholly false allegations of violations of 
the Italian peace treaty. Coming at this time, 
such repetition can only be taken as an attempt, 
under the guise of concern for legality, to disrupt 
efforts to achieve a solution of the question among 
the parties most directly concerned. 

The allegations that Allied authorities in Trieste 
are suppressing guaranteed human rights and lib- 
erties and that they are establishing a military 
and naval base are nonsense, as is apparent from 
the regular reports of the Anglo-American admin- 
istration to the Security Council and as anyone 
who has been to Trieste can plainly see for himself. 

British and United States troops are in Trieste 
in complete conformity with the obligations of the 
Italian peace treaty that the Free Territory of 
Trieste shall continue to be administered by the 
Allied Military Commands within their respective 
zones, pending assumption of office by a governor. 
It is on the record that we made every effort to 
reach agreement on the appointment of a governor 
until the peace treaty provisions establishing the 
Free Territory were proved unworkable. Since 
then, as the Soviet Government well knows, we 
have consistently sought a constructive settlement 
of this question in the interests of peace and 
stability. 



Department Officers Confer 
Witli Britisli and Frencti Officials 

The Department of State announced on April 20 
that Philip C. Jessup, Ambassador-at-Large, and 
George W. Perkins, Assistant Secretary of State 
for European Affairs, accompanied by a few De- 
partmental officers, will depart for London this 
week to undertake preliminary discussions, at the 
request of Secretary of State Dean Acheson, with 
British and French oflicials. They will prepare 
the way for the discussions Secretary Acheson will 
have in May. 



May I, 1950 



701 



The United States in tlie United Nations 



[April 22-28] 

Conventional Armaments 

Meeting for the first time since August 1, 1949, 
the Commission for Conventional Armaments on 
April 27 decided to ask its working committee to 
continue with its progi'am of \york, the next item 
being development of adequate safeguards for dis- 
armament. This decision resulted from a United 
States suggestion to refer to the working commit- 
tee Security Council and General Assembly resolu- 
tions which, in effect, asked the Commission to con- 
tinue its study of the regulation and reduction of 
conventional armaments and armed forces in 
accordance with its plan of work. The working 
committee is to report to the Commission by July 
15. 

Following the pattern in other United Nations 
organs, the Soviet representative left the meeting 
after liis proposal to exclude the "Kuomintang 
Group's Representative" was defeated. 

Sub-Commission on Economic Development 

The fourth session of the Sub-Commission on 
Economic Development opened April 17 at Lake 
Success, with the formulation of practical recom- 
mendations for financing economic development of 
underdeveloped countries as its primary task. 
The Commission, composed of seven experts act- 
ing in their personal capacity, will submit its 
recommendations to the Economic and Social 
Council for consideration at the session opening 
in Geneva on July 3, 1950. 

The experts from the U.S.S.R. and from Czech- 
oslovakia left the meeting when the former's pro- 
posal for the exclusion of the "Kuomintang" 
expert was voted out of order. Following the 
walk-out, the Commission unanimously reelected 
V. K. R. V. Rao as Chairman. The United States 
expert on the Commission is Beardsley Ruml, with 
August Maffry as his alternate. 

After an exchange of views on the procedure to 
be followed in its deliberations, the Sub-Commis- 
sion agreed to consider five aspects of the problem 
before it: These are (1) limits of domestic financ- 
ing for economic development; (2) place of for- 
eign financing; (3) sources of foreign financing; 



(4) private foreign investment^ and (5) long- 
term, low-cost financing for projects not suitable 
for private capital investment. 

Following a period of general debate, in which 
representatives of certain specialized agencies and 
nongovernmental organizations participated, the 
Sub-Commission convened on April 20 as an in- 
formal working group to formulate tentative 
recommendations. It plans to spend a week in 
Washington consulting with officials of the Inter- 
national Bank for Reconstruction and Develop- 
ment, the International Monetary Fund, the Ex- 
port-Import Bank, Congressional and Adminis- 
tration sponsors of the "Anti-Depression Bill," 
and officials concerned with the Technical Assist- 
ance Program. 

Social Commission 

Concluding its prolonged debate on long-range 
activities for children, the Social Commission on 
April 21 recommended that the Economic and 
Social Council "take all necessary steps to en- 
sure the uninterrupted continuation and develop- 
ment of the activities of the International Chil- 
dren's Fund." The resolution, based on a joint 
French- Yugoslav-Brazilian-Turkish-Indian res- 
olution, provides for the establishment of a United 
Nations Children's Board, composed of the mem- 
bers of the Social Commission and other govern- 
ments designated by the Economic and Social 
Council, which will formulate the Fund's poli- 
cies. It will be assisted bj' a Program Connuittee 
of seven or nine members of the Board. The 
Board will be responsible for close collaboration 
by the Fund with the specialized agencies and 
nongovernmental organizations concerned with 
children. Administrative expenses will be covered 
by the normal United Nations budget, while the 
operational activities will be financed by volun- 
tary contributions. 

Previously, the Commission had rejected a 
United States proposal that the United Nations 
undertake n continuing, long-range program of 
technical aid to governments on behalf of chil- 
dren rather than continue the International Chil- 
dren's Emergency Fund. United States repre- 



702 



Department of State Bulletin 



tentative, Arthur J. Altmeyer, in explaiuinj; his 
vote ujiainst tlie resolution adopted said that the 
United States does not consider that the ("onunis- 
sion's reconunendations present a suitabU' instru- 
ment for ac'ooniplishinfj; an effective projjrain for 
children throughout the world. The resolution, 
he said, fails to outline a carefully conceived pro- 
gram, a carefully conceived plan of administra- 
tion, or an effective plan of financing. 

After discussing a rei)ort of the Secretary-Gen- 
eral on the basic features of legislative and other 
existing measures for the beneht of the aged, the 
C'onnnission decided on April 124 to request the 
Secretary-General "to initiate an integrated work 
program of research, studies, antl action for pro- 
moting the welfare of aged pei-sons." It sug- 
gested postponement of any decision on the ad- 
visability of a declaration on old-age rights until 
the necessary preparatory studies and reports had 
been completed. 

The Commission then turned to a discussion of 
an international program for the social rehabili- 
tation of the physically handicapped, including 
the blind. Jane Hoey, alternate United States 
representative, expressed the "genuine interest 
of the United States" in such a program. She 
stressed, however, the importance of carefully de- 
fining "the scope of the rehabilitation program we 
undertake," and pointed out that United Nations 
facilities in this field "now include advisory social 
welfare services, experience in holding seminars 
and administering fellowships, and the furnishing 
of supplies."' The United States, she said, further 
recommends that a staff of experts be employed to 
develop "a comprehensive rehabilitation program 
with the objective, first, of preventing disability, 
and also of restoring and treating those who have 
become disabled, and of providing education, vo- 
cation, and social guidance." She further stated 
that for this purpose the United States is will- 
ing "to agree to some increase in funds." A joint 
United States-Bolivian-Canadian resolution, ap- 
proved bj' the Commission on April 26, mentions 
the desirabilit}' of the development of a broad co- 
ordinated program in this field by the United Na- 
tions, the sjiecialized agencies, and the Interna- 
tional Children's Emergency Fund. It requests 
the Secretary-General to provide various specific 
services "in so far as budget permits." 

On April 27, the Commission adopted a United 
States-United Kingdom resolution noting a report 
of the Secretary-General on the establishment of 
a Far Eastern Bureau to combat traffic in persons 
and requested him to consult the governments in 
the region with a view to calling a conference to 
examine this problem. The Secretary-General 
was also asked to make available to Far Eastern 
governments requesting such service an expert con- 
sultant in this field. 



Human Rights Commltdon 

The Human Rights Commission, under the 
chairmanship of Mrs. Franklin I). lioosevelt, on 
April 25 interrupted its article-by-article consid- 
eration of the draft International Covenant on 
Human Rigiits to discuss methods of implementa- 
tion of the Covenant. Speaking in support of a 
joint United States-United Kingdom i)ropo.sal to 
provide in the Covenant for a i)rocedure under 
which one ratifying state could bring charges of 
covenant violation against another ratifying state, 
with ad hoc connnittees performing fact-finding 
functions, Mi-s. Roosevelt pointed out the impor- 
tance of achieving substantive progress on imple- 
mentation at this session. She cautioned, how- 
ever, against an attempt to "over-reach that which 
we can reasonably accomplish initially and thereby 
endanger the progress the United "Nations has 
made so far in the field of human rights." Mrs. 
Hanso Mehta, Indian representative, urged that a 
permanent international body to assure implemen- 
tation be created in a separate instrument, while 
several representatives of nongovernmental or- 
ganizations advocated the establishment of a mech- 
anism that would permit individuals or groups, as 
well as states, to make complaints concerning 
alleged human rights violations. Pending re- 
sumption of debate on this topic after sufficient 
time has been allowed for study of the various 
proposals, the Connnission again turned to exam- 
ination of the individual Covenant articles. 

Some of the main articles already given pro- 
visional approval by the Commission relate to the 
right to life, slavery, arbitrary arrest, right to fair 
trial, liberty of movement, freedom of beliefs, 
freedom of assembly, freedom of association, and 
freedom of information. 

After extended debate on article 5 (right to 
life), a United Kingdom formula for a detailed 
enumeration of exceptions was defeated in favor 
of a more general approach, suported by the 
United States. Similarly, the United Kingdom 
favored enumeration in article 17 of specific limi- 
tations on the right of freedom of information. 
However, as advocated by the United States, the 
text as provisionally adopted contains only gen- 
eral limitations. 

On April 2G, the Connnission adopted a resolu- 
tion recommending through the Economic and 
Social Council that the fifth session of the General 
Assembly prweed with the elaboration of a spe- 
cial freedom of information convention. The 
United States opposed this action on the grounds 
that the Commission, not having considered this 
convention, was not in a position to j>ass nj^on its 
merits, (ireece also o]iposed the resolution, pro- 
|)os(h1 jointly by Egypt, France, Lebanon, and 
India, while Belgium and Australia abstained in 
the vote. 



Nia^ 1, 1950 



703 



^{yyvCe/rU^ 



General Policy Page 

U.S.S.R. Fires on U.S. Navy Plane— U.S. 
Asks Thorough Investigation and Appro- 
priate Indemnity: 

Exchange of Notes 667 

Statement by Secretary Acheson .... 668 
Statement by Michael J. McDermott, 

Chief Press Officer 668 

Going Forward With a Campaign of Truth. 

Address by President Truman .... 669 

Threats to Democracy and Its Way of Life. 

By Secretary Acheson 673 

The Proposed European Payments Union . . 681 

House Resolution on Return of Greek Chil- 
dren Praised. Letter From the President 
to the Speaker of the House 687 

U.S. Praised for Work in Repatriating Greek 

Children 688 

The Quality of American Patriotism. Re- 
marks by Secretary Acheson 696 

President Gonzalez Videla of Chile Visits 
Washington : 

Remarks by President Truman 699 

Statement by Secretary Acheson .... 699 

Soviet Note on Trieste Awaited. Statement 

by Secretary Acheson 701 

Department Officers Confer With British and 

French Officials 701 

Treaty Information 

Developments in Proposed Revision of the 
Montreux Convention. Statement by 
Secretary Acheson 687 

The Ito Charter — A Code of Fair Trade 
Practices. Statement by Secretary 
Acheson 689 



Treaty Information — Continued Page 
Provisions in Trade Agreement With Costa 

Rica Waived 694 

U.S.-Dominican Tariff Concessions .... 695 

Technical Assistance 

Making the Point 4 Program Work. By Leslie 
A. Wheeler, Director, Interim Office for 
Technical Assistance 678 

The United Nations and 
Specialized Agencies 

The United States in the United Nations . . 702 

Economic Affairs 

Filing for Settlement of Property Claims in 

Germany 686 

Canadian-U.S. Weather Stations To Be 

Resupplied 695 

U.S. and Belgium Make Surplus Property 

Available to Nac Countries 699 

international Information and 
Cultural Affairs 

U.S. Closes Information Libraries in Czecho- 
slovakia — U.S. Asks Czechoslovakia To 
Close Chicago Consulate:- 
Statement by Secretary Acheson .... 684 

U.S.Notes to Czechoslovakia 684 

Affidavit of Katherine Kosmak 685 

Visit of Paraguayan Lawyer. 688 

Visit of Honduran Publisher 698 

The Challenge of Education. By Rowland 
H. Sargeant, Deputy Assistant Secretary 
for Public Affairs 700 

The Congress 

Legislation 672 



International Organizations and Conferences 

The calendar for international organizations and conferences 
as well as items on such activities and developments, which 
usually appears in the Bulletin, will appear in the next issue. 



U. S GOVERNMENT PRINTING OFFICE; I9B0 



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For complete contents see back cover 



May 8, 195U 





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bulletin 

Vol. XXII, No. 566 • Pubucation 3840 
May 8, 1950 



For Bale b; the Superintendent of Documents 

0.8. aovemment Printing OflSce 

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Pbics: 

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1949). 

Note: Contents of this publication are not 
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The Department of State BULLETIN, 
a weekly publication compiled and 
edited in the Division of Publications, 
Office of Public Affairs, provides the 
public and interested agencies of 
the Government tcith infornuition on 
developments in the field of foreign 
relations and on the work of the De- 
partment of State and the Foreign 
Service. The BULLETIN includes 
press releases on foreign policy issued 
by the White House and the Depart- 
ment, and statements and addresses 
made by the President and by the 
Secretary of State and other officers 
of the Department, as ujell as special 
articles on various phases of inter- 
national affairs and the functions of 
the Department. Information is in- 
cluded concerning treaties and in- 
ternational agreements to which the 
United States is or may become a 
party and treaties of general inter' 
national interest. 

Publications of the Department, as 
well as legislative material in the field 
of internatioruil relations, are listed 
currently. 



New Aspects of American Foreign Policy 



hy John Foster Dulles ^ 



Foreign policy is, for the United States, some- 
thing very different from what it used to be. 

That is demonstrable by statistics. The State 
Department started out with a total personnel of 
six, of whom one was on part time. The total 
foreign service pei'sonnel was 17. By the begin- 
ning of this century the State Department staff 
had grown to about 750 and the foreign service 
personnel to about 1,000. Today there are over 
6,000 people in the State Department and over 
15,000 persons in the foreign service. Last month, 
the Department handled approximately 25,000 
telegrams and 250,000 official written communi- 
cations. 

Growth of United States Power 

The change illustrated by these figures is easily 
explained. Until the turn of this century, the 
United States was one of the "small" powei's. 
We were principally concerned with preserving 
independence at home and gaining trading op- 
portunities abroad as against the ambitions of the 
"great" military powers such as Spain, Russia, 
France, England, and Germany. We had the 
Monroe Doctrine to meet the menace of Russian 
encroachment along the Pacific Coast and the pos- 
sible expansion of the Holy Alliance to this hemi- 
sphere. Later, we developed China policies de- 
signed to provide an "open door" for our mer- 
chants and traders in the East. In the main, we 
asked only to be let alone and to be free from en- 
tanglement in great power politics. 

Tliat is still what we should like. But it is no 
longer possible. United States power has stead- 
ily grown; that of others has declined so that 
today, the United States has predominant power 
in much of the world. That power comes at a 
time when there is loose in the world a gi-eat 

' An address made before the American Society of Inter- 
national law at Washington, D. C, on Apr. 27, 1950, and 
released to tiie press on the same date. Mr. Dulles is 
Consultant to Secretary Acheson. 

May 8, 1950 



terror — the black plague of Soviet communism. 
It is an aggressive force, operating ruthlessly in 
accordance with a carefully prepared and su- 
perbly implemented program which, in a single 
generation, has brought a small Communist group 
into control over one-third of the world's popula- 
tion. That offensive is still in full swing. The 
fate of the 800 million peoples now captive and 
of the hundreds of millions more who are men- 
aced depends almost wholly upon what the United 
States does. Also, unless we do something effec- 
tive to preserve and restore liberty for others, we 
shall surely lose it ourselves. Those who would 
have the United States pursue isolationist poli- 
cies are, whatever they say, the de facto accom- 
plices of Soviet communism in its announced pro- 
gram of encircling and isolating the United States 
so that it can be strangled into submission. We 
can save freedom for ourselves only as we engage 
in the greater effort of saving human freedom 
everywhere. 

Change in Behavior Since World War II 

The American people and their representatives 
in Government have generally accepted their pres- 
ent-world responsibilities. The contrast between 
the present postwar period and that following the 
First World War is little short of amazing. 

Then, the American people were soft, undis- 
ciplined, and unrealistic. We virtually ceased to 
maintain a military establishment, not as a matter 
of principle, but because we found it inconveni- 
ently expensive. We adopted an attitude of il- 
lusory aloofness. We failed to join the League of 
Nations, and we sought to enclose our economy and 
be an oasis of prosperity in a world of misery. 
Many were fascinated by the peaceful prospect 
that could be painted with words, such as those 
in the Kellogg-Briand Pact, and thought that 
great results could be accomplished quickly, with- 
out hard work. 

The American people have behaved differently 
since World War II. AVe have not elapsed into a 

717 



state of supineness. We are maintaining a power- 
ful military establishment, even though that in- 
volves substantial sacrifices. We have achieved a 
high level of peacetime productivity and have 
shown a willingness to share it with others. We 
have greatly lowered tariff barriers. Since hos- 
tilities ended, we have made available to other 
countries about 30 billion dollars through grants 
or loans and have thereby provided many nations 
with the economic margin for the survival of 
their people. We took the lead in creating the 
United Nations and in building security pacts for 
the Americas and the North Atlantic countries. 
We have, in all three of these efforts, abated some 
of our sovereignty in the interest of collective 
order. 

That is a record of which we can be proud. It 
must, however, in all frankness, be recognized that 
much more remains to be done if our policies are 
to be adequate. We have made a good beginning. 
But events have moved so rapidly that policies, 
which seemed adequate when they were launched, 
no longer serve the present need. 

Emerging of New National Forces 

Our first great postwar policy was reliance upon 
the United Nations. That, it was often said, was 
to be a cornerstone of United States foreign policy. 
Exaggerated hopes that attended the launching 
of the United Nations have not been realized. The 
American people feel disillusioned, and even 
within the United Nations itself there has been a 
creeping sense of frustration. 

Those who know the United Nations best have 
not lost the faith and hope that they had at San 
Francisco. But they know that these hopes cannot 
be realized unless the United Nations is invig- 
orated. The fact is that the Charter and member- 
ship of the United Nations are already dated. 
They are dated 1945. That is only 5 years ago, 
but it is 5 years during which much has happened. 
Many new national forces have emerged. An 
atomic age has dawned. Since the world has not 
stood still, so the United Nations should not stand 
still. It is time to start planning a General Con- 
ference to review the Charter. 

Regional Security of the Americas 

Our second great postwar policy related to this 
American hemisphere. We wanted to join with 
other American states to replace the unilateral 
Monroe Doctrine with an association of equals, co- 
operating in the great task of maintaining regional 
order and security. The Rio pact was concluded 
on September 2, 1947. It was then hailed as a 
great development, which indeed it was. But of 
the 21 nations which have signed the Rio pact, 
five, namely, Argentina, Bolivia, Ecuador, Guate- 
mala, and Peru, have failed to ratify their 
signature. 

Because two-thirds of the signatories have rati- 



fied the treaty, it is in effect. Indeed, it has al- 
ready been put to work and has shown that it is 
well-devised to promote security and order as be- 
tween the parties. But the treaty can never real- 
ize its large possibilities if important American 
states fail to become parties. 

We are loathe to believe that there are nations 
of this hemisphere which are uninterested in the 
Rio pact pledge of "one for all and all for one" 
and which do not want ties that will bind all the 
American nations into a vigorous, fraternal asso- 
ciation. But if that really be the fact, it is better 
to learn it now rather than later so that we may, 
in time, devise new policies which will take ac- 
count of the realities of this hemisphere. 

Policies With Western Europe 

We developed a series of vitally important pol- 
icies dealing with Western Europe. The loan to 
Britain, made in 1946, was shortly followed by the 
European Recovery Plan, by the North Atlantic 
Treaty, and by the Military Assistance Program. 
These have prevented a postwar collapse which 
would have brought Soviet communism to the 
shores of the North Atlantic. Our aid, economic 
and now military, has been like an oxygen tent. 
It has preserved the life of the free institutions of 
the West. That is a great thing, for while there 
is life, there is hope. But that hope has not yet 
been transfoi-med into a clear-cut program for re- 
storing permanent health and vigor to peoples 
who collectively possess enormous human and ma- 
terial resources but who are prevented, by divi- 
sions and separations, from translating these great 
potentialities into realities. Neither have we 
found the way to provide the German people with 
security and opportunity in peaceful association 
with the other free peoples of the West. 

These are among the tasks that will confront 
the Foreign Ministers who will meet next month 
in London. 

Postwar Policies With Asia 

As regards Asia, we have still to define and de- 
velop our postwar policies. In no other area 
have events been so disconcerting. United States 
policy in the East has traditionally rested on the 
foundation of friendly relations with China. 
Throughout the Second World War, the United 
States Government took it for granted that vic- 
tory would mean a friendly China free from dom- 
ination by any alien, unfriendly despotism. On 
that assumption, we did much to build up the pres- 
tige of China and to insure it "great power" status 
in the United Nations and the Council of Foreign 
Ministers. After the war, the policy collapsed. 
]\fost of China is under a Communist government 
which today spearheads the Soviet Communist 
policy of inciting peoples of Soviet Asia and the 
Pacific to violent revolution against their existing 



718 



Department of State Bulletin 



governments on the theory that these governments 
are merely the ''hickies" of the West. 

Nearly ;") years have gone bj' since tlie Japanese 
surrendered, anil there is increasin<' need for a 
profrram for brinirinj; peace and self-government 
to the Japanese people. 

So. a.s we look over United States policies, 
whether in relation to the United Nations or the 
Americas or Europe or Asia, we are compelled to 
recognize that jiaat policies, which once seemed 
adequate and even bold and imaginative, have been 
overtaken by the onrush of events. 

Unpartisan Nature of Foreign Affairs 

This, I can testify, is realized by those who have 
primary responsibility for the conduct of our for- 
eign relations. It is my conviction that the Amer- 
ican people are. in this respect, served by loyal 
and capable Americans who are unpartisan in 
relation to foreign affairs and who will increas- 
ingly demonsti-ate their right to public confidence 
in this field. 

It is important, indeed vital, that this should 
happen; for our foreign policies will not be ade- 
quate unless they derive from such unity here at 
home as will lead foreign peoples and governments 
to feel that our foreign policies have dependable 
continuity. 

We easily forget that the quality of continuity 
is an ingredient essential to success. A majority 
of the still free nations of the world are more im- 
mediately exposed than we are to the danger of 
Soviet communism. If there should be a shooting 
war, we might be a primary target. But it is the 
general opinion that a shooting war is neither 
imminent nor inevitable. Wliat is in progress is 
an aggression implemented by fraudulent propa- 
ganda, terrorism, and civil violence whereby 
Soviet communism tries to break down the effec- 
tive functioning of non-Communist governments 
so that local Communist bands can seize the gov- 
ernmental power and transform the nation into 
a Soviet satellite. 

Pressures of Soviet Communism 

The leaders of Soviet communism frankly recog- 
nize that the United States is not likely to be con- 
quered by these means. Therefore, we are to be 
closely encircled and weakened for a final blow. 
That encirclement endangers, in the first instance, 
countries which are geographically close to Soviet^ 
communism or which are economically distressed 
or which are only now beginning to learn the way 
to operate a representative government. So, it is 
that in Asia, the Near East, and Europe there are 
many governments, and himdreds of millions of 
people, who live under an imminent menace. 
Their governments are often sorely tempted to trj' 
to make the best terms that they can with Soviet 
communism. If they do not do so, it is only be- 
cause thev have faith that the United States wiU 



have policies which are both strong and dependa- 
ble for the future. 

During the fall of 1948, General Marshall and 
I were together in Paris at the meetiiigs of the 
United Nations. He, as Secretary of State, was 
spokesman for President Truman, and I was act- 
ing as representative of the Kepublican candidate 
for President, Governor Dewey. The Soviet 
Union was then exerting strong pressures all 
around the periphery of its area of control. The 
blockade of Berlin was one instance. I was, at 
that time, called upon by the representatives of 
many foreign governments which felt themselves 
particularly exposed to the Soviet Communist 
menace. They sought from me assurance that, if 
the Kepublicans came into executive power, they 
could count upon a continuity of the United States 
policies upon which they had so far relied. I was 
in a position to give them those assurances on 
behalf of the Republican candidate for President. 
As additional assurance, there stood in the Senate 
the commanding figure of Senator Vandenberg 
who had himself played a great part in formu- 
lating the policies to which these foreign govern- 
ments looked for support. 

The result was that the free governments stood 
firm. There were no panicky surrenders which, 
if they had occurred, would have rapidly advanced 
the close encirclement of the United States. 

It was then indelibly impressed upon me that, 
in these dangerous times, it is vitally important 
for the safety and welfare of the United States 
that foreign policies should reflect national unity 
so that the foreign governments which are at the 
moment in most imminent danger will feel that 
these policies can be relied upon to persist, irre- 
spective of election results in the United States 
which might change the political complexion of 
the Congress or of the Presidency. 

During past months, an unfortunate combina- 
tion of circumstances has produced a superficial 
disunity here which raised doubt abroad as to 
whether our national attitudes are dependable and 
whether we can develop the more incisive policies 
required to meet the mounting offensive of Soviet 
communism. Such doubts spell danger to the 
United States. 

That danger has fortunately been sensed by the 
people and their representatives. The American 
people have shown that they do not want to be 
divisive to a degree that will increase the danger. 
The President, who has the primary responsibility 
for the conduct of foreign policy, has acted to show 
his concern to end disunity in relation to foreign 
affairs ; and Republicans, in and out of Congress, 
have responded. 

Society Witliout Enforced Conformity 

To create the necessary political unity will re- 
quire some self-restraint in exercising political 
freedoms and in indulging in political controversy. 



May 8, 1950 



719 



It is, however, only in such ways that freedom is 
secured. As George Washington said : 

Individuals entering into society, must give up a share 
of liberty to preserve the rest. The magnitude of the 
sacriiice must depend as well on situation and circum- 
stance, as on the object to be obtained. 

At the present time, the "object to be obtained" 
is no less than the preservation of our free insti- 
tutions. The "situation and circumstance" are as 
perilous as any our nation has faced. Even so, 
the unity now sought would have neither the pur- 
pose nor result of making our society one of con- 
formity. Neither would we abandon the two-party 
sj'stem. It is Soviet communism which believes 
in and would impose a society of conformity and a 
one-party system. The unity we seek is only what 
is needed to preserve a society of diversity and 
of political choice as against that grave totali- 
tarian threat. We sacrifice diversity only to the 
degree needed to preserve diversity. 

The kind of unity we seek here at home is pre- 
cisely the same kind of unity which we seek as 
between the free nations of the world. We do 
not want the society of nations to become a society 
of conformity. On the contrary, we want a world 
society where there can be diversity. 

A few days ago, Pravda, in a leading article, 
attacked Secretary Acheson's California speeches 
and accused the United States "of a policy of gross 
intervention in the domestic affairs of other coun- 
tries, of the imposition of its will on other states — 
an imposition that leaves nothing of national sov- 
ereignty and economic independence in the Mar- 
shallized countries." 

Nothing could be further from the truth. The 
world society we want, just as the domestic so- 
ciety we want, is a society where there is no en- 
forced conformity; where neither the United 
States nor any other nation will impose on others 
its ideals or practices. 

It is because the Soviet Communist creed does 
not tolerate diversity that normal international 
relations are difficult. It seeks by civil violence to 
destroy any government that does not conform to 
what it prescribes. It denies even to communistic 
Yugoslavia the right to be communistic in its own 
distinctive way. 

We, for our part, invite unity, but the unity we 
invite is the unity needed for a common defense of 
the right to be different. Also, we recognize that 
cooperation may find expression in many ways. 
It is not necessary to bind all of the nations to- 
gether in military pacts or political unions of an 
identical pattern. The form of cooperation suit- 
able for the Americas or for Western Europe is 
not necessarily applicable to Finland or Sweden 
or India. Every free nation can contribute, some- 
times in a distinctive way, to an effective compo- 
site strength of nations determined to preserve 
a world of society of liberty and tolerance. 

We can be encouraged that we are finding at 
home and abroad this basic unity and that we are 



building on it. That is good. However, let us 
never forget that organization is never an end 
in itself, it is a means for action. 

The need today is for action that dramatizes the 
capacity of the free world to defend itself and to 
enlarge itself. That is what the American people 
expect, and that is what they have a right to ex- 
pect. 



Efforts To IVIaintain 

a Bipartisan Foreign Policy 

Statement hy the President 

[Released to the press Jjy the ^yhitc House April 18'\ 

I have had a very satisfactory talk with Secre- 
tary Acheson and Senator Bridges, who is the 
ranking Republican of the Senate in Senator Van- 
denberg's absence. We discussed a number of the 
more important problems facing this nation in the 
field of foreign relations and also some of the prob 
lems involved in finding a workable means for 
keeping the Republican minority informed cur- 
rently. On my instructions, Secretary Acheson 
has previously consulted with Senator Connally 
as well as with Senator Vandenberg and other 
Democratic and Republican Members of Congress. 
In addition to the discussions I have had with 
Senator Bridges, I have also talked personally 
with Members of the Senate of both parties. I 
expect to obtain the views of still others on this 
subject. 

With the problems facing the United States in 
the field of foreign relations, it is most important 
that every effort be made to maintain a true bipar- 
tisan foreign policy. It will be my purpose as well 
as that of Secretary Acheson not only to keep the 
Members of the minority currently informed, but 
to solicit their views and take them into serious 
account in both the formulation and implementa- 
tion of our foreign policy. 



True Bipartisan Foreign Policy 
Aided by Subcommittee Plan 

Statement hy President Truman 

[Released to the press ty the White Souse April 27] 

I asked Secretary Acheson and Senator Con- 
nally to call on me this morning for the purpose of 
canvassing in general the efforts that we are all 
making to devise ways of bringing about a true bi- 
partisan approach to the consideration of our 
foreign policies. 



720 



Department of State Bulletin 



I have been particularly interested in Senator 
Connully's plan to set up eight subcommittees of 
the Foreifrn delations Committee, which subcom- 
mittee groups will correspond with the organiza- 
tional structure of the State Department. This 
new procedure is a decided step forward in the 
matter of keeping the Committee, and, through 
the Committee, the Senate, currently informed of 
State Department attitudes toward pending for- 
eign policy issues. 

This new approach will serve not only to pro- 
vide mechanics for free interchange of informa- 
tion between State Dejiartnieiit representatives 
and tlie Senate Foreign Kelations Committee, but 
it will have the added advantage of quickening an 
interest on the pai-t of the various consultative sub- 
committees in the particular areas of the world or 
the State Department functions for which they are 
given specific responsibility in this new committee 
organizational arrangement. 

I hope that tlie Foreign Affairs Committee of 
the House of Representatives will see fit to adopt 
a somewhat similar pattern, in order that we may 
bring about greater understanding and confidence 
between State Department representatives and the 
Members of the Congress who represent the House 
and the Senate in the various fields of State De- 
partment operations. 



Developing Bipartisan Foreign Policy 

Statement by John Foster Dulles 
[Released to the press April 2^] 

From now on, I expect to give most of my time 
to ni}- new duties as consultant to the Secretary of 
State. It is too early to know exactly what I shall 
be doing or on what matters the Secretary may 
particularly want my advice. As was said in the 
State Department's release of April 6, 1950,^ the 
President and the Secretary of State asked me 
to be available to advise the Secretary of State "on 
broad problems in the field of foreign affairs and 
on specific lines of action which this Government 
should follow." 

I shall contribute as best I can to the common 
goal of foreign policies which, so far as lies with- 
in our power, will both preserve peace and also 
provide a world in which free institutions can have 
a vigorous growth. If the United States has such 



' Bulletin, Apr. 24, l&oO, p. 662. 



foreign policies, then I know that they will com- 
manil the confidence and supi)ort of the over- 
whelming majority of the American people and 
of their representatives in Congress. If United 
States foreign i)olicies do not measure up to that 
standard, then they do not deserve that support. 

I do not, for a moment, consider that my pres- 
ence in the State Department as Adviser to the 
Secretary of State automatically assures policies 
that will deserve Republican support. I do think 
that former Senator Cooper and myself, who have 
served as Republicans in Congress, will find ways 
to bring to Republicans, in and out of Congress, a 
better understanding of our foreign policies, so 
that they can better judge the adequacy of those 
policies. I feel confident that our efforts, in this 
respect, will be sympathetically welcomed by Re- 
publicans who have, in the past, given ample proof 
that they are not allergic to bipartisanship in for- 
eign policy. 

While, as I say, the presence of Senator Cooper 
and myself in the State Department should not 
stifle independent scrutiny and constructive com- 
ment by Republicans, I do believe that Republi- 
cans will be responsive, as the Democratic admin- 
istration has been responsive, to the critical need 
of developing foreign policies which will be in- 
cisive and adequate and which will command 
united support. 

The free world cannot survive unless it can 
present a united front to the aggressive and ex- 
panding challenge of the Communist world. I 
realize that there is no strength in unity that is 
artificial. Unity is achieved only by policies and 
efforts that, in fact, bind people together. If we 
have war, no one doubts that we would have unity 
both at home and with our allies. I am confident 
that if we can achieve that unity now, we will not 
have war. As I said in my book War or Peace, 
"while we are yet at peace, let us mobilize the po- 
tentialities which we usually reserve for war. 

I am here in Washington because the President 
and Secretary of State have offered me what seems 
to be an opportunity to practice what I preached. 
That, I know, is the spirit also of Senator Cooper. 
It is a spirit which needs to pervade this nation 
fi-om top to bottom if peace and fundamental hu- 
man freedoms are to survive. 

In the past, the American people have always 
developed a unity of purpose which has enabled 
them to repel successfully the successive challenges 
which come inevitably to every nation. I am 
confident that we are again developing the spirit 
which will enable us, in fellowship with other free 
peoples, to meet the challenge of our time. 



May a, 1950 

884582— Sa 



721 



The Habana Charter for an International Trade Organization 



COMMERCIAL POLICY 

Chapter IV 

Section A. Tariffs, Preferences, 
and Internal Taxation and Regulation 

This section (arts. 16-19) is one of the most im- 
portant parts of the charter. It lays down basic 
rules of (a) nondiscrimination (i.e. most-favored- 
nation treatment) with regard to tariffs and cus- 
toms matters generally, (b) negotiations by the 
members directed to the substantial reduction of 
tariffs and the elimination of preferences, and (c) 
banning the use of internal taxes and regulations 
as a substitute for tai'iff protection. 

Most-Favored-Nation Treatment 

One of the key principles on which the charter 
is founded is tliat nations shall conduct their com- 
mercial relations with each other on the general 
basis of nondiscrimination. Accordingly, article 
16 requires tliat each member of the Ito shall give 
equal treatment to all other members with respect 
to customs duties and charges, rules and for- 
malities in connection with importation and ex- 
portation, and internal taxes and other internal 
regulations. The article thus incorporates 
the unconditional most-favored-nation principle 
(MFN) which since 1923 has been the general 
policy of the United States in its commercial 
treaties and agi-eements. Although certain long- 
standing and deeply rooted preferential systems 
are excepted from the general rule of nondiscrimi- 
nation pending their elimination by negotiation as 
required under article 17, the article provides that 
these existing preferences may not be deepened 
and no new preferences may be created. 

Reduction of Tariffs 

and Elimination of Preferences 

Article 17 sets forth a second rule of basic im- 
portance, namely, that members of the Ito must 
enter into and carry out negotiations directed to 
the substantial reduction of the general level of 

Editor's Note : This summary is the second in a series. 

722 



tariffs and the elimination of existing preferences. 
These negotiations are to be carried out on a selec- 
tive, product-by-product basis and conducted in 
such a way that reductions in nonpref erential rates 
of duty will limit, reduce, or eliminate the dis- 
criminations in favor of the countries entitled to 
preferential rates. The provisions of this article 
were followed in the negotiations of the General 
Agreement on Tariffs and Trade concluded at 
Geneva in October 191:7 and under which 23 coun- 
tries have already made great progress in carrying 
out the aims of this article. 

National Treatment on Internal Taxation 

Article 18 lays down a third fundamental rule, 
namely that members of the Ito must not resort to 
internal measures which would nullify tariff con- 
cessions — in other words, internal taxes and other 
internal regulations should not be used as a sub- 
stitute for tariff protection. The article provides 
generally that internal taxes and other internal 
regulations applicable to imported products must 
not be more burdensome than those applicable to 
directly competitive domestic products. An im- 
portant provision in the article will prevent mem- 
bers from adopting in the future internal quanti- 
tative or "mixing" regulations which require the 
use or consumption of a specified minimum of 
domestic products. This device, while employed 
onlj' to a limited extent at present, is an extremely 
effective method of restricting trade and threatens 
to become widespread unless countries agree to 
refrain from adopting further measures of this 
kind in the future. Although the article permits 
the continuance of existing ''mixing" regulations, 
it prevents them from being made more restrictive 
against imports and subjects them to negotiation 
for their relaxation as in the case of tariffs under 
article 17. 

Special Provisions 

Special provisions have been included in the 
charter to deal with internal regulations affecting 
motion picture films. Article 19 which covers 
this subject was worked out on the assumption that 

Department of State Bulletin 



the economic peculiarities of the fihn trade make 
import duties geiu-niliy an unsuitable or inade- 
quate device for atl'ording lejritimate protection 
to a domestic film industry. As a counterpart of 
imjwrt duties, therefore, this article establishes for 
the film trade alone an approved protective device 
in the form of screen quotas which reserve a por- 
tion of screen time for domestic films; such screen 
quotas are subject to nej^otiation in the same man- 
ner as tariffs. An important feature of article 19 
is the provision (hat screen time not reserved for 
domestic films may not be allocated among foreign 
sources of supply (with a minor exception in case 
of an allocation to a foreign source in effect on 
April 10, 1947). In a word, this article means 
that a member may adopt screen quotas but no 
other type of internal quantitative regulation or 
discriminatory internal tax in order to protect 
its domestic motion picture industry. 

Section B. Quantitative Restrictions and Related 
Exchange Matters 

Of the various obstacles to international trade, 
quantitative restrictions, commonly referred to as 
quotas or "QR's," are one of the most serious. A 
quota limits the quantity of a commodity which 
may be imported or exported, as the case may be, 
to a specified amount ; the importation or expor- 
tation of quantities in excess of that amount is 
prohibited. Quotas thus kill competition and 
prevent price and other market forces from exer- 
cising an equilibrating effect, since no matter 
what price changes may occur between, for ex- 
ample, the imported and the domestic commodity, 
the importation of quantities above the quota ceil- 
ings is forbidden. Quotas, in addition, tend to 
put the government into business witli the gov- 
ernment rather than private business determining 
the commodities and amounts which may be ex- 
ported or imported. They generally involve 
elaborate governmental intervention because they 
usually require the allocation of quotas among 
domestic exporters and importers. Furthermore, 
the determination of the goods and quantities to 
be permitted to flow in international trade tends 
to become the subject of bargaining between gov- 
ernments. In addition, quotas invite the attempt 
by interested pressure groups to influence the de- 
cision of governments as to the goods and quanti- 
ties which shall be permitted to be imported or 
exported. 

For these reasons, section B seeks to limit the 
use of quantitative restrictions. The charter 
recognizes, however, that there are certain special 
situations in which the use of quotas is both neces- 
sary and justifiable, and section B thus attempts 
to define and circumscribe some of the particular 
circumstances in which resort to quotas is per- 
missible. In this connection, note should be taken 
of articles 13, 45, and 99 which also specify par- 
ticular conditions under which quotas may be 
used. 



General Elimination of "QR's" 

Article 20 of the charter lays down the basic 
rule regarding quotas, namely that tiiey are pro- 
hibited. A number of specific exceptions to this 
general rule are then prescribed. Of these ex- 
cejitions, perhaps the most important is that 
permitting the use of import quotas on agricul- 
tural and fisheries products where they are neces- 
sary to the enforcement of domestic marketing or 
production restriction programs or for the re- 
moval of temporary surpluses. Quantitative 
restrictions on exports are also permitted in con- 
nection with the prevention or relief of critical 
shortages of foodstuffs and other essential items. 
QR's on both exports and imports are permitted 
in connection with the application of standards 
or regulations for the classification, grading, or 
marketing of commodities in international trade; 
and in connection with the restriction of produc- 
tion of animal products whose output is directly 
dependent on imported products. In connection 
with import restrictions on agricultural and fish- 
eries products, the article provides a number of 
rules designed to safeguard the interests of mem- 
bers, including rules relating to the import of 
items of which domestic supplies are available 
only seasonally, requirements for advance notice 
and opportunity for prior consultation regarding 
such import restrictions, requirements for public 
notice of the quantity or value permitted to be 
imported, and provision for preventing use of 
such quotas to decrease the share of imports in 
the domestic market. 



Safeguarding Balance of Payments 

Article 21 permits a member to impose import 
restrictions to safeguard its external financial 
position and balance of payments, that is to fore- 
stall the imminent threat of, or to stop, a serious 
decline in its monetary reserves or, if the member 
has very low reserves, to achieve a reasonable rate 
of increase in its reserves. Restrictions ap- 
plied for such purposes must be relaxed as the 
extei-nal financial position of the country con- 
cerned improves. Provision is made for the im- 
portation in such circumstances of minimum 
quantities and the avoidance of unnecessary dam- 
age to the commercial or economic interests of 
other members. Although the right of a member 
to maintain its domestic policies (even if they are 
responsible for the member's financial difficulties) 
and to give priority to the importation of more 
essential commodities is recognized, the obligation 
of the member to pay due regard for the need of 
restoring equilibrium in its balance of payments 
and assuring an economic use of resources is also 
specified. Consultation is provided for with re- 
spect to the maintenance, intensification, or insti- 
tution of import restrictions for balance-of-pay- 
ments reasons. A procedure is established for 
questioning and securing the removal of restric- 



Ma/ 8, 1950 



723 



tions which may be applied inconsistently with the 
relevant provisions of this and other articles. 
Provision is also made for initiating discussions 
to consider measures for the removal of the under- 
lying causes of any general disequilibrium which 
may be restricting international trade. 

Nondiscriminatory Administration 
of "QR's" and Exceptions 

Article 22 provides for the nondiscriminatory 
administration of such quantitative restrictions as 
are applied. It thus prohibits the application of 
quantitative restrictions against one member un- 
less the}' are similarly applied against all other 
coimtries whether or not members. Rules are 
specified with a view to assuring, in the event im- 
port restrictions are applied, a distribution of 
trade in the product concerned approaching as 
closely as possible the shares which the members 
would be likely to have in the absence of restric- 
tions. These rules include provision for fixing 
total quotas wherever practicable and giving notice 
of their amounts and for allocating quotas among 
supplying countries either by agreement or on the 
basis of shares supplied in a previous representa- 
tive period, due account being taken of any special 
factors which may have affected or may be affecting 
the trade in the product concerned. Provision is 
also made for furnishing relevant information 
concerning the administration of import restric- 
tions involving the granting of import licenses, 
giving public notice of the quantity or value which 
may be imported during a specified period where 
quotas are fixed, and promptly informing supply- 
ing countries of the quotas which may have been 
allocated to them. Special provision is made for 
supplies en route at the time public notice of the 
quota may have been given. The article recog- 
nizes the right of a member initially to select the 
representative period and appraise the special 
factors involved in connection with the establish- 
ment of import restrictions. At the same time, 
however, the article specifies an obligation on such 
a member to consult promptly, upon the request of 
any other substantially interested member, regard- 
ing these matters and other aspects relating to the 
allocation and utilization of the quotas con- 
cerned. Provision is made for the application of 
the provisions of the article to tariff quotas and, of 
the principles of the article in so far as applicable, 
to export restrictions. 

Article 23 defines a number of exceptions to the 
general rule of nondiscrimination prescribed in 
article 22 for the administration of such QR's as 
are permitted. The article thus permits the appli- 
cation of discriminatory import restrictions for 
balance-of-payments reasons provided the rcstnc- 
tions satisfy the criteria specified in the article. 
The policies followed in applying such restrictions 
must, in addition, be designed to promote the 
maximum development of multilateral trade possi- 
ble and to hasten the attainment of a financial 



position which will not require such measures. 
Furthermore, such discriminatory restrictions 
may, with relatively minor exception, be applied 
only during the postwar transition period of the 
country aj^plying the restrictions. (The period 
is fixed under the articles of agreement of the 
International Monetary Fund.) Provision is also 
made for review of the discriminations and con- 
sultation with a view to limiting or terminating 
them when they are no longer justifiable. In 
addition to the restrictions referred to above, the 
article also permits discriminatory restrictions in 
the following cases : (a) where the restrictions are 
applied to a small part of a member's foreign trade 
and the benefits derived by the member or mem- 
bers concerned substantially outweigh any injury 
which other members may incur; (b) where the 
restrictions are applied by countries having a com- 
mon quota in the International Monetary Fund; 
(c) where they are to assist another country whose 
economy has been disrupted by war; (d) where 
they are used by a country in balance-of-payments 
difficulties to direct its exports so as to increase its 
earnings of currencies which it can use without 
discriminating; (e) where they are equivalent to 
restrictions authorized under the "scarce cur- 
rency" provisions of the Fund agreement ; and (f ) 
where they are applied under certain very limited 
preferential arrangements existing in the United 
Kingdom pending negotiations to eliminate them 
or to replace them by tariff preferences. 

Relation to Fund 

Article 24 defines the relationship of the Ito 
with the Fund to insure a coordinated policy be- 
tween the two organizations in matters of mutual 
interest. The article thus enjoins the Ito to co- 
operate with the Fund in order to achieve a 
coordinated policy with respect to exchange ques- 
tions falling in the purview of the Fund and trade 
questions falling within the jurisdiction of the Ito. 
The Organization is required to consult with the 
Fund in cases involving monetary reserves, bal- 
ance of payments, or foreign exchange arrange- 
ments. In such consultation, the Organization is 
required to accept the findings and determinations 
of the Fund with respect to the financial aspects 
of tlie problems under consideration. Further- 
more, members of the Ito are prohibited from 
frustrating, by exchange action, the intent of the 
provisions of this section of the charter dealing 
with quantitative restrictions and related ex- 
change matters; similarly, they are prohibited 
from frustrating, by trade action, the intent of 
the provisions of the Fund agreement. As an 
additional measure for insuring coordinated 
policy between the Ito and the Fund, those mem- 
bers of the Ito whicli are not members of the Fund 
must, with relatively minor exception, either be- 
come Fund members or conclude a special ex- 
change agreement which will provide that the 
objectives of the charter will not be frustrated by 



724 



Departmsnt of State Bulletin 



exchange action by the members concerned. The 
article specifically recojinizes the ri<;ht of a mem- 
ber to use exi'liaufie controls or restrictions per- 
mitted by the Fund ajzreeniont or by a special 
exchanjre agreement, antl to employ trade controls 
or restrictions for the purpose of implementing 
such exchange measures. 

Section C. Subsidies 

Section C sets forth rules and conditions under 
which members may use either direct or indirect 
subsidies which operate to inci'ease their exports 
or decrease their imports of any commodity, in- 
cluding not only direct payments to encourage ex- 
ports or production but also any form of pro- 
ducer's income or price support. 

Subsidies in General 

A member maintaining or granting subsidies 
affecting the volume of its exports or imports is 
required to notify the Organization in writing con- 
cerning the kin'd, amount, and probable conse- 
quences of each subsidy and also to state the 
reasons for granting it. 

A member granting such a subsidy is further 
required to discuss with the Organization or with 
another member that considers its interests 
seriously prejudiced the possibility of modifying 
the subsidy in question. 

Export Subsidies 

Additional rules and conditions are provided 
for the use of export subsidies, and different treat- 
ment is accorded to the export subsidization of 
primary as contrasted with nonprimary com- 
modities. A primary commodity is considered 
any agricultural, forest, or fishiiig product, or any 
mineral in its natural form or in such processed 
form as is usually required for marketing in sub- 
stantial volume for international trade (chap. 
VI, art. 56, (1) ). All commodities not conform- 
ing to this definition are nonprimary. Any sub- 
sidy or system which results in the sale of any 
product for export at a price lower than a com- 
parable price charged to buyers in the domestic 
market is subject to the rules governing export 
subsidies. 

All members are forbidden to subsidize the ex- 
port of any commodity, but this restriction is 
relaxed under certain conditions and with certain 
limitations in the case of primary commodities 
and in effect applies mainly to nonprimary 
commodities. 

Members are required to comply with the ban 
on export subsidies at the earliest practical date 
but not later than 2 years from the date the charter 
enters into force. Should a member consider that 
its interest require the continuation of a subsidy 
beyond that date, it may give notice in writing 



to the Organization, present its case, aiul request 
a specific extension of the period. The Organiza- 
tion will determine whetlier or not the period 
should be extended and, if permitted, on what 
terms. 

In comparing the export price with the domestic 
price of the commodity, due allowance is permitted 
for connnercial differences affecting price com- 
parability. The exemption of products exported 
from duties or taxes levied on like products for 
domestic use is not forbidden. Payments to pro- 
ducers out of the proceeds of duties or taxes are 
considered a form of domestic production subsidy 
rather than an export subsidy. 

Any member may subsidize exports of any com- 
modity to the extent necessary to offset a subsidy 
granted by a nonmember. However, if such 
action injures other members an effort must be 
made to reach a satisfactory adjustment through 
consultation. 

Rules and Conditions for 

Export Subsidization of Primary Commodities 

Provisional exemption from the ban on export 
subsidies is provided so that a member may grant 
an export subsidy on a primary commodity with- 
out the prior approval of the Organization if that 
member considers its interests require such action. 
The members concerned with a problem in interna- 
tional trade in a primary commodity are expected 
to consider whether or not an intergovernmental 
agreement would be an appropriate solution. The 
procedures required for the negotiation of an in- 
tergovernmental agreement in respect to a primary 
commodity (set forth in chap. VI) may be ini- 
tiated either by a member which considers its in- 
terests seriously prejudiced by compliance with 
the ban on export subsidies or by a member which 
considers its interests seriously prejudiced by a 
subsidy granted by another member. If such pro- 
cedures are initiated, a member granting an export 
subsidy on the primary commodity involved must 
cooperate at all times in efforts to negotiate an 
intergovernmental agreement. Furthermore, a 
member may not change its subsidization program 
during a conference called by the Organization for 
the purpose of negotiating an intergovernmental 
commodity agreement. 

If an effort to negotiate an intergovernmental 
commodity agreement, under the procedures set 
forth in chapter VI, is initiated but does not suc- 
ceed within a reasonable period of time, or if it 
does not appear that the negotiation of a com- 
modity agreement would effect the desired result, 
a member may continue to subsidize the export of 
a primary commodity without prior approval of 
the Organization in case it considers that its in- 
terests would be seriously prejudiced without 
such action. 

Although, under certain circumstances, exemp- 



May 8, 1950 



725 



tion is permitted with respect to export subsidiza- 
tion of primary commodities, a member granting 
any such subsidy may not thereby acquire more 
than an equitable share of world trade in the com- 
modity concerned. Furtliermore, a member 
granting an export subsidy on a primary com- 
modity is required to consult promptly with any 
other member which considers its interests prej- 
udiced by such subsidization. If, after a reason- 
able jjeriod for consultation, no understanding is 
reached the Organization is then required to de- 
termine the equitable shai-e of the world market of 
the member granting the subsidy and that member 
is required to conform to such determination; that 
is, to modify its subsidy if necessary. 

In determining an equitable share of world 
trade for a member granting an export subsidy, 
the Organization is instructed to take into account 
any factor affecting world trade in the commodity, 
past and present, and particularly (a) the mem- 
ber's share during a previous representative 
period; (b) whether or not the member's share is 
so small as to make the subsidy of minor signifi- 
cance; (c) the relative importance of the export 
trade in the commodity in the economies of all the 
members concerned; (d) the existence of price 
stabilization systems which permit exemption 
from the ban on export subsidies ; and (e) whether 
or not the subsidy makes expansion of production 
unduly difficult in areas able to furnish large 
quantities of the commodity to the world market 
in the most effective and economical manner. 

A further provision is made for exemption from 
the ban on export subsidization. An export sub- 
sidy is not forbidden if it is a part of a member's 
program for stabilizing the domestic price of a 
primary commodity, providing the Organization 
determines (1) that the program operates in such 
manner that the export price may at times be 
above, although at other times below, the domestic 
price and (2) that the subsidy does not seriously 
prejudice the interests of other members. 

Section D. State Trading and Related Matters 

In recent years, for a variety of reasons, there 
has been an increase in the conduct of trade by 
state-owned or state-controlled organizations or 
by private organizations which have been granted 
special privileges by a government and which, 
therefore, act in effect as government agencies. 
Although it is clear that the conduct of trade by 
a government is in general contrary to American 
trade practices, it must be recognized that any 
country may if it chooses so conduct its trade, or 
a portion thereof. The purpose of including in 
the Ito charter a section on state trading is to 
assure that when government operations in foreign 
trade are undertaken, they shall not function in 
such a manner as to render ineffective the com- 
mitments on commercial policy made elsewhere in 
the charter. It is possible, for example, for a state- 
trading organization to nullify the benefits of 



tariff reductions simply by failing to buy at all ; 
state conduct of trade can also avoid the formal 
use of quantitative restrictions but can bring 
about the same results, again by failure to buy 
or sell ; and discriminatory trade practices can be 
put into effect by a state organization with rela- 
tive ease, because it may decide to favor certain 
sources of supply or markets for other than com- 
mercial reasons. 

Nondiscrimination and Expansion of Trade 

It was, therefore, considered essential to include 
in the charter a pledge by all members that in 
their conduct of state trading they would be 
governed by the commercial considerations appli- 
cable to private concerns. Members are also re- 
quired by article 29 to afford potential buyers and 
sellers in other countries a reasonable opportunity 
to compete for the business of a state-trading 
enterprise. Thus article 29 is in effect a supple- 
ment to article 16, dealing with nondiscriminatory 
treatment, and it covers the application of the 
principles of articles 16 in the field of state trading. 
In like fashion, article 31 is closely related to 
article 17, which deals with the reduction of tariffs 
and the elimination of preferences. Thus by the 
terms of article 31, members are required to nego- 
tiate concerning the degree of protection afforded 
to domestic producei-s of a monopolized product, 
in the same manner, where appropriate, as is pre- 
scribed by article 17 for tariff negotiations. 
Wliere this method is not appropriate, other types 
of arrangements with the same effect may be nego- 
tiated. Furthermore, where the country main- 
taining the monopoly has granted a reduction or 
a binding in the tariff rate on the product con- 
cerned, article 31 prevents it from applying any 
higher margin of protection through resale, mark- 
up, or otherwise. In the case of an export monop- 
oly, the member maintaining it is also required 
to negotiate for the reduction of such barriers to 
exports as might operate to benefit domestic users 
of the monopolized product, in comparison to 
potential foreign users. _^ 

There is also a requirement in article 31 which 
parallels the other provisions of the charter deal- 
ing with quantitative restrictions. Thus a mern- 
ber is obligated to purchase and offer for domestic 
sale enough of a monopolized product to satisfy 
fully domestic demand for the import, with allow- 
ance being made for rationing. It should be clear 
from the above that, although the form of nego- 
tiation provided for in article 31 is new and un- 
te.sted, a tariff concession granted by a country 
maintaining a monopoly may not be nullified by 
protection afforded through the operation of the 
monopoly. 

The purpose of this section is, therefore, to 
place state trading in the same framework as gov- 
ernment regulation of private trade, so that the 
same principles govern in both cases. Essentially 
there are two principles involved : nondiscrimina- 



726 



Department of State Bulletin 



tion and the expansion of trade through the re- 
duction or limitation of barriers. These are 
covered by two of the articles in the section, as 
noted in the preceding paragraph. The other two 
articles deal with special topics of a related nature. 
Article 30, for example, covers marketing organi- 
zations such as are maintained by a number of 
countries, partially for regulatory purposes and 
partially lor buying and selling. Here it is 
stated that such organizations are subject to the 
rules of article 29 only when they are engaged in 
purchases and sales and that otherwise they are 
subject to the other provisions of the charter. 

Liquidation of Certain Stocks 

The fourth article in section D was included 
because some governments are engaged in acquir- 
ing stock piles of goods for noncommercial pur- 
poses, and there was concern over the possibility 
that such a government might decide to release 
such stocks in a manner which would upset world 
markets in the products involved, bringing injury 
to producers and consumers. Article 32 conse- 
quently requires that membere intending to liqui- 
date stocks acquired for noncommercial purposes 
give public notice, and, if requested, consult with 
interested members and the Organization. 

The inclusion of the state-trading articles in the 
charter should be of substantial benefit to private 
enterprise countries, because this is the first time 
state-trading countries have considered accepting 
commitments involving any restraint on state- 
trading activities. 

Section E. General Commercial Provisions 

This section covers the field of customs admin- 
istration and related matters, sometimes referred 
to as "invisible tariffs," or simply the red tape 
which an importer must go through in importing 
goods. These articles (arts. 33 to 39) are some- 
times called the "technical" articles. 



Freedom of Transit and Antidumping 

Article 33 spells out the principle of freedom of 
transit for goods and their means of transport via 
routes convenient for international traffic. Traffic 
in transit is not to be subject to special transit 
duties or unnecessary delays or restrictions. All 
regulations dealing with transit are to be reason- 
able. Nondiscriminatory treatment of transit 
trade as between member countries is also required. 

Article 34, although condemning injurious price 
dumping, sets out rules designed to prevent the 
misuse of antidumping and countervailing meas- 
ures to hamper normal competition in interna- 
tional trade. The article limits the use of anti- 
dumping and countervailing duties in scope and 
amount to the purpose of otisetting price dumping 
and subsidies and provides that such special duties 
may not be imposed unless the effect of the dump- 



ing or subsidization would cause or threaten mate- 
rial injury to an industry in a member country. 

Valuation for Customs Purposes 

The provisions of article 35, which are designed 
to assure that fair valuation systems will be used 
in assessing ad valorem duties, are of great impor- 
tance to traders. They set forth the principle that 
the values to ha used should be based on the actual 
value of the kind of goods imported and not on 
arbitrary or fictitious values nor on the values of 
domestic goods. Provision is made for the co- 
operation of member countries through the Ito 
looking toward the eventual standardization, so 
far as practicable, of definitions of value and valu- 
ation methods and procedures. The article estab- 
lishes fair rules for the conversion of currencies in 
assessing ad valorem duties and provides that 
whatever valuation method is used oy a country, 
the methods and bases for determining value for 
customs purposes should be stable and should be 
given sufficient publicity to enable traders to esti- 
mate with reasonable certainty what the value will 
be. 

For