Full text of "Report to Congress on the mutual security program"

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itrona and free world

for the six months ending
June 30, 1052

Second Report j Congress

on the
Mutual Security Program

for a strong and free world

June 30, 1952

For sale by the Superintendent of Documents, U. S. Government Printing Office
Washington 25, D. C. - Price 30 cents

PRESIDENT'S LETTER OF TRANSMITTAL

To the Congress of the United States :

I am transmitting herewith the Second Report on the Mutual Security
Program, covering operations during the first 6 months of 1952 in furtherance
of the purposes of the Mutual Security Act of 1951 (Public Law 165, 82d
Cong.). The report reviews the steps that we have taken with other nations
to work for peace and security.

The Mutual Security Program is a positive program for peace. It is
absolutely essential to the security of the United States. At a time when one
nation is bent upon world conquest — as the Soviet Union is today — other na-
tions, large or small, have but two real choices: To pay the ransom of ap-
peasement or to pay the price of building together sufficient strength — military,
economic, political, and moral strength — to keep the peace. The United
States and other free nations have chosen to build up their strength. That is
what the Mutual Security Program is all about.

During the 6-month period reviewed in this report, real progress was
made in strengthening the free world. Although much remains to be done,
we are heading in the right direction. If we keep on, if each of the partners
in this joint effort makes every effort to meet problems in a sensible manner,
we shall eventually reach our goal of a secure, peaceful, and confident world.

The White House,

November 18, 1952.

Ill

CONTENTS

Page

President's Letter of Transmittal in

Chapter I. A Positive Program 1

II. Europe 4

III. The Near East and Africa 18

IV. Asia and the Pacific 24

V. American Eepublics 35

VI. Other Parts of the Program 40

CHAPTER I

A Positive Program

HP HE purpose of this report is to provide, as
-*- stipulated by law, a semiannual review of the
progress of the Mutual Security Program. This
is a flexible program to help in bringing peace
and progress to a world threatened by war and
subversion.

The Mutual Security Program has roots in the
past as well as prospects for the future. Its roots
lie in the decision of the American people to avoid
the mistakes that helped make possible World
War II : a decision not to sit by and watch totali-
tarianism, using the ancient strategy of "divide
and conquer," march from conquest to conquest.
This decision led the United States to use its in-
fluence within the United Nations to support Iran
against heavy pressure from across its northern
frontier ; to aid the Greek and Turkish nations in
defending themselves against insurrection and
military threat; to build and maintain the amaz-
ing airlift that saved Berlin from strangulation
by the Soviet Union ; to conceive, finance, and ad-
minister an unprecedented program of economic
aid that saved Western Europe from bankruptcy
and chaos; to join with other democracies of the
Atlantic World in the first combined military
headquarters in the peacetime history of the
world; to make a unique treaty of peace and
friendship with the defeated ex-enemy Japan; to
build collective defenses in Latin America and the
Pacific; to send needed aid to the countries of
Southeast Asia threatened with loss of their newly
won independence; to sponsor the creative and
positive idea of technical assistance to the great
areas of the world whose resources are relatively
undeveloped; and, in Korea, to lead the United
Nations in successful defense of the principle of
freedom from unprovoked aggression. All this,
and more, has been carried out by the United
States in addition to constant and patient support
of the United Nations and its specialized agencies.
In October 1951, the major elements of these

activities were gathered into a single program
appropriately described as the Mutual Security
Program.

Since the last report was made in March 1952 —
covering the first months of Mutual Security op-
erations— the Congress has provided authority
and funds to carry on the Mutual Security Pro-
gram for another year. The funds requested by
the Executive Branch were reduced by 18 percent,
and the Congress added certain conditions and
made certain alterations in the Program.

Nevertheless, the Mutual Security Act of 1952
provides for the continuation on a substantial
scale of the basic elements in the United States
program to prevent war and to stimulate orderly
and evolutionary development of the world society
along progressive and democratic lines. As such
it must be examined alongside our own national
defense program and within the context of the
world picture in which social upheaval can merge
into cold war and cold war erupt into hot war.

The geographic scope of the Program ranges
from Western Europe to Latin America to Africa
to the Near East, South Asia and around to For-
mosa ; its functions range from furnishing equip-
ment to support French and Indochinese troops
fighting Communist insurrection in the delta land
of northern Vietnam to the resettlement of Arab
refugees in the Near East, to advice on hygiene
in the Andes, and on tax collection in the Philip-
pines; it deals in products ranging from jet air-
craft to hybrid corn seed ; its techniques are many
and varied. It is in the light of the cold war and
of the many places and many ways in which our
security is threatened by naked aggression, by in-
ternal revolt, by violent social upheaval, and by
chronic social injustice that the various parts of
this Program take on coherence and direction.
This is recognized in the statement that the pur-
pose of the act is "to maintain the security and to
promote the foreign policy of the United States by

authorizing military, economic, and technical as-
sistance to friendly countries to strengthen the
mutual security and individual and collective de-
fenses of the free world, to develop their resources
in the interest of their security and independence
and the national interest of the United States and
to facilitate the effective participation of those
countries in the United Nations system for collec-
tive security."

If the program is varied, so are the results
which, together, constitute a catalog of steady
progress toward military security, toward eco-
nomic strength, toward political and social sta-
bility, toward steadier morale, toward progressive
development of resources through mutual effort.
The period from January 1 through June 30, 1952,
brought the following highlights in progress
toward our national and international goal of
peace and progress :

I Under the historic agreement of the NATO
Council in Lisbon last February, the member
nations moved forward to increase substantially
the NATO forces trained and equipped to with-
stand aggression. Budgets have been increased,
recruitment stepped up, training improved,
supplies of equipment increased, and the ground-
work has been laid for an industrial mobilization
base in Europe capable of supporting a large-
scale military effort. Despite many difficulties,
some foreseen and others unforeseen, major
progress had been made by midyear toward the
ambitious goals established at the Lisbon confer-
ence for the end of 1952.

^ The European economy continued to produce
at an over-all high level. Coal production im-
proved, steel output continued at peak rates, and
inflationary pressures were curbed to the point
where living costs, although very high, remained
generally stationary. This relatively satisfactory
production performance was, however, accom-
panied by a continuation of a deficit in Western
Europe's merchandise trade balance. There was
a further sharp drop in Britain's gold and hard
currency reserves, although the rate of loss was
slowed considerably in the second quarter of the
year.

^ Western Europe moved closer to a realization of
the ancient dream of European unification. Final

steps were taken for the creation of a six-nation
Coal and Steel Community, including the Federal
Eepublic of Germany ; a treaty calling for the es-
tablishment of a European Defense Community
among the same six nations was signed and is to be
sent to their parliaments for ratification ; the Eu-
ropean Payments Union was extended for another
year; the Organization for European Economic
Cooperation continued to work for joint action in
the economic and financial affairs of Western Eu-
rope and of the Atlantic Community; and Eu-
ropeans expressed an increasing desire for early
consideration of a Western European political
community.

In the troubled Near East, the United States
continued to assist, with equipment and training
programs, the armed forces of Greece, Turkey,
and Iran. Technical cooperation in agriculture,
health, education, public administration, and other
fields were under way in ten countries of the
Near East and northern Africa. Some progress
was made in the programs for refugees from
Palestine and immigrants into Israel.

► In South Asia — India, Pakistan, Afghanistan,
and Nepal — vital projects for expanding food
supplies and promoting economic development are
under way. During the period covered by this
report, United States aid provided technical and
related assistance to the governments of the area
in coping with their problems of poverty and
rapid population growth and in meeting the dan-
gers of social and political upheaval.

► In Asia and the Pacific, Communist aggres-
sion has been stalled since 1950. While the United
Nations forces fought and negotiated in Korea,
the Chinese Nationalists on Formosa were
strengthened by the arrival of American equip-
ment and a marked improvement in training ; the
French and the peoples of the Associated States
of Indochina, with material help from the United
States, held the Communist forces to a standstill
in Indochina ; and the armed forces of the Philip-
pines moved in strong pursuit of the Communist-
inspired Huk insurrectionists. In Formosa, Bur-
ma, Indochina, Indonesia, the Philippines, and
Thailand, the assistance program brought help in
the fight against hunger and disease and illiter-

acy — the conditions which lead hopeless people to
desperate political choices. Support also was
given to the development of production of basic
materials needed for an expanding economy in the
United States and in the free world.

► Arrangements were completed for the first
shipment of military grant assistance to some of
the American Republics which need help in carry-
ing out the build-up of Western Hemisphere de-
fense forces. In addition, carrying forward the
program initiated 10 years ago, the Technical Co-
operation Administration, during the first 6
months of 1952, continued to participate in joint
projects to raise the levels of health, agriculture,
and education in 19 of the Latin American
countries.

Many of the major steps of the 6 months under
review have been difficult and time-consuming.
Deliveries of American military equipment to
Europe fell below earlier expectations ; the period
of military conscription in some European coun-
tries was less than had been hoped for ; some areas
of the world were in a state of acute unrest; and
the problems of the underdeveloped areas re-
mained formidable. The ultimate success of cer-
tain crucial steps — such as ratification of the
treaty to create the European Defense Commu-
nity— is not yet fully assured. There are obstacles
and, no doubt, disappointments ahead. Much still

remains to be done before the goals of the free
world are safely reached.

A close analysis of the results of the Mutual
Security Program during the first half of 1952 —
especially when these are viewed in the context of
the postwar years — shows a clear and heartening
trend toward greater security and greater pros-
pects for human progress through evolutionary
processes.

It is not possible to predict the exact nature of
future problems nor to make rigid plans to meet
them. Flexibility of plans and adaptability in
operations are central elements in any intelligent
effort to meet problems as complex and explosive
as those dealt with by the Mutual Security Pro-
gram. A world-wide conspiracy backed by a
powerful nation cannot be dissipated easily or
cheaply. The economic and social ills of centuries
cannot be cured overnight. The success of the
policies of the United States depends not only
upon the wisdom of those policies, but also upon
the patience and understanding necessary to give
those policies time and opportunity to bear fruit.

The Mutual Security Program is a positive at-
tempt by the American people to deal with the
threat of the international Communist conspiracy
and the threat of chaos from social and political
violence. Progress — enough to justify cautious
optimism — has been made. The main actions of
the first 6 months of 1952 are set forth in the
chapters that follow.

227419—52-

CHAPTER II

Europe

The Defense Build-up
in Europe

rpHE first 6 months of 1952 represented a pe-
-*• riod of great importance in organizing and
building the defenses of Western Europe. Much
progress was made in translating defense plans
into actual military strength. Progress was made
also in mobilizing the economies of Western Eu-
rope to enable effective support of the growing
military power. By the end of June, although
much remained to be done, the Western Powers
were better prepared to resist aggression in Eu-
rope than they had been in January.

The Mutual Security Program in Europe dur-
ing this 6-month period centered on the collective
defense build-up of the North Atlantic Treaty
Organization. In February, the North Atlantic
Council met at Lisbon. A firm plan of common
action was adopted to provide the maximum fea-
sible build-up of defensive strength during the cal-
endar year 1952, including a foundation for ex-
pansion toward progressively larger force goals
for 1953 and 1954. This agreement was the cul-
mination of an intensive review of the military
requirements for adequate defense and of the po-
litical and economic capabilities of each NATO
partner to meet its share of these requirements.

As integral parts of this plan for mutual secu-
rity the Council at Lisbon gave NATO endorse-
ment to the principle of a European Defense
Community and to a West German military con-
tribution within the EDO Through the EDC the
German contribution will be geared directly into
the NATO military arrangements. Other action
was also taken : Turkey and Greece were admitted
into the NATO partnership; NATO's executive
structure was reorganized ; and a plan was adopted
to finance urgently required airfields and com-
munication systems for NATO's armed forces.

Organization for Defense

European Defense Force and German Partner-
ship.— On May 26 and 27, 1952, were signed the
Contractual Arrangements with the Federal Ee-
public of Germany J and the Treaty establishing
the European Defense Community.2 These two
agreements — subject to legislative ratification
by each of the countries concerned — were
outstanding landmarks on the road to strength-
ening and unifying Europe. They represent the
means for bringing Western Germany and its
resources into the common defense structure, as
well as into association with the new political
and economic community of Western Europe.
It was known that the process of ratification
might be difficult. Fears of revived German mili-
tarism existed in Western Europe; the German
Republic was subject to pressure from the East;
nevertheless, it was expected that ratification
would be achieved.

Through these agreements, Western Germany
was given virtually complete autonomy in foreign
and domestic affairs, with the following impor-
tant reservations : The Federal Eepublic would not
have the right to make a separate peace treaty
with the Soviet Union; the other three powers
retained the right to intervene if the stability of
the German Government should be threatened by
an internal uprising; and restrictions (subject to
exceptions which might be permitted by the EDC)
were placed on the production of heavy military
equipment. The agreement also covered the
terms of a contribution of West German forces to>
Western defense. It was expected that Western
Germany, within the restrictions on military pro-
duction agreed to in the peace contract, would in-

1 Federal Republic of Germany, France, the United
Kingdom, and the United States.

2 Belgium, France, the Federal Republic of Germany,
Italy, Luxembourg, and the Netherlands.

creasingly be able to assume the burden of the pro-
duction of needed equipment.

Present plans for the EDC call for a European
Air Force and a European Ground Force com-
posed of divisions from France, Italy, Germany,
Belgium, the Netherlands, and Luxembourg.
These divisions, slightly smaller than United
States divisions and called "groupements," are to
be integrated at the army corps level, each corps
consisting of three or four divisions of different
nationalities. This integrated European Defense
Force will be subject to the political control of the
European Defense Community. The EDC 'will
include an Executive Commission, a Council of
Ministers, an Assembly, and a Court of Justice.
The Executive Commission will be the principal
executive agency for the EDC with responsibility
for organization of the defense forces, prepara-
tion of the budget, production of military equip-
ment, direction of special military schools, and
other matters. The Council of Ministers is ex-
pected to have authority to issue the general direc-
tives which will govern the activities of the Exec-
utive Commission.

The forces composing the European Defense
Force are to be assigned to the NATO command
of General Eidgway. The EDC forces will thus
serve alongside United States, British, and other
NATO forces in the defense of Western Europe.

Admission of Greece and Turkey to NATO. —
At the Lisbon meeting, in February, of the North
Atlantic Council, Greece and Turkey were for-
mally accepted into NATO, their membership
having been jH'eviously approved by the original
members.3 Greece and Turkey are important
allies. Their inclusion in NATO added very sub-
stantial fighting forces already trained and
equipped. Their geographical position is stra-
tegically important in protecting a flank of West-
ern defense. Their enthusiasm in joining NATO
represented evidence of NATO's growing prestige
and strength.

NATO Reorganisation. — The North Atlantic
Council, although continuing to hold periodic
ministerial meetings, now functions in perma-
nent session through permanent representatives.
The Council, on April 4, 1952, assumed responsi-
bility for the task hitherto performed by the Coun-
cil Deputies, the Defense Production Board, and
the Financial and Economic Board. The staffs of

these civilian agencies of NATO have been inte-
grated into a single International Staff operating
on a continuing basis under the new Secretary-
General, Lord Ismay.

These changes in organization reflected a transi-
tion from the original committee-type structure
to a permanent executive-type organization, a
shift of functions from committees — which repre-
sented all member nations and met intermit-
tently— to integrated staff units operating on a
continuing basis.

NATO headquarters were moved from London
to Paris in May 1952. This move facilitated the
operations of the North Atlantic Council, particu-
larly in its relations with other international
organizations whose work is closely related to that
of the Treaty organization.

The Annual Review. — In the last months of
1951, NATO conducted its first general review of
progress in the defense build-up. A Temporary
Council Committee, under the chairmanship of
the United States member, Mr. W. Averell Harri-
man, was created for this purpose. Military goals
were reviewed by the Temporary Council Commit-
tee in relation to the economic capabilities of the
NATO countries, and were reshaped to meet these
capabilities.

At Lisbon, in February 1952, when the struc-
tural reorganization of NATO was decided, it
was also determined that the reviewing process
would be placed on a continuing basis, and that
annual reviews should be undertaken by the per-
manent organization — rather than by provisional
committees such as the Temporary Council Com-
mittee. It was decided to hold the next such re-
view in the fall of 1952.

United States Special Representative for Eu-
rope.— In January 1952, the President designated
Mr. William H. Draper as United States Special
Representative in Europe. Ambassador Draper
is the senior United States civilian representative
in Europe responsible for both NATO and Mu-
tual Security Program matters. He is the United
States Permanent Representative on the North
Atlantic Council; he acts for the Secretary of
State in Europe in dealing with NATO multi-
lateral policy affairs; he acts for the Secretary of
Defense in relationship to NATO and Mutual

a Belgium, Canada, Denmark, France, Iceland, Italy,
Luxembourg, the Netherlands, Norway, Portugal, the
United Kingdom, and the United States.

Security Program matters in Europe for which
the Secretary of Defense is responsible; he acts
for the Director for Mutual Security and, in con-
nection with certain financial matters, for the Sec-
retary of the Treasury ; and he is responsible for
the general supervision over the European ac-
tivities of the Mutual Security Agency. The ap-
pointment of Ambassador Draper has done much
to provide more effective coordination of the Mu-
tual Security Program in Europe.

Report of Supreme Allied
Commander, Europe

On April 2, 1952, General Eisenhower, in his
First Annual Report as Supreme Allied Com-
mander, Europe, compared the situation in 1952
with what had been the situation a year earlier,
when the Supreme Headquarters Allied Powers,
Europe, (SHAPE) was set up in Paris. Gen-
eral Eisenhower reported that in 1951, "From all
information presented, it was clear that the dif-
ficulties facing the new enterprise were manifold.
Problems and the doubt they bred were on every
side. . . .

"There was serious question as to the state of
public morale among the European members of
the North Atlantic Treaty Organization. They
were living daily under the shadow of a powerful
Soviet striking force, stationed in Eastern Ger-
many and Poland, and possessing the obvious
capability of overrunning much of Europe. It
was extremely difficult for the average European
to see any future in an attempt to build defensive
forces which might offset this real and formida-
ble threat. There seemed to be too much of a
lead to be overtaken. . . .

"Everywhere we turned we ran into political
and economic factors. One thing was clear:
nothing would be gained and much lost through
any substantial lowering of the already low stand-
ard of living in Europe. Our central problem was
one of morale — the spirit of man . . . No man
will fight unless he feels he has something worth
fighting for. Next, then, is the factor of the
strength of the supporting economy. Unless the
economy can safely carry the military establish-
ment, whatever force of this nature a nation
might create is worse than useless in a crisis. Since
behind it there is nothing, it will only disinte-
grate."

General Eisenhower concluded that despite "the
manifold difficulties and shortcomings of oui
joint effort to date" the partners in the North
Atlantic Treaty had "made progress in all aspects
of security."

Progress Toward
European Integration

It has been a repeatedly expressed policy of the
United States Government to encourage politica
and economic integration in Europe and to under
take or suppox*t measures which would provide the
framework for a dynamic European economy, im
proved living standards, and strong military de
fenses. Cooperative efforts within the NATC
structure have encouraged the development o1
joint programs and common institutions in Eu
rope. Such integration has added to the strengtl
of NATO. In the Council of Europe, the Schu
man Plan, the Organization for European Eco
nomic Cooperation (OEEC), the European Pay
ments Union (EPU), and the European Defenst
Community, the nations of Western Europe hav<
taken steps which demonstrate their ability anc
willingness to work together toward an integratec
solution of their common problems.

In the Treaty to create a European Defense
Community, provision was made for the Assembly
of the Defense Community to prepare proposals
for the formation of a European Political Com-
munity. The desire of the Europeans to press
ahead toward this goal without waiting for the
formation of the Defense Community was made
evident at the May 1952 session of the Council
of Europe Assembly. The Assembly recom-
mended that either the Schuman Plan Assembly
or those members of the Council of Europe
Assembly willing to join a political authority,
take on this task immediately. This proposal
was referred to the Foreign Ministers of the six
EDC countries for consideration, and they agreed
that the Schuman Plan Assembly undertake the
preparation of a draft constitution for the Euro-
pean Political Community.4

The Schuman Plan for joining together the coal
and the steel industries of France, Western Ger-

4 For this purpose a subcommittee of the Schuman
Plan Assembly was established in Strasbourg in Septembei
1952. The subcommittee was expected to complete the
draft constitution by March 1953.

many, Belgium, Luxembourg, the Netherlands,
and Italy meant the creation of a single competi-
tive market in coal and steel, and involved, on the
part of these free nations, an unprecedented merg-
ing of national sovereignties into an international
authority with supernational powers.5 The
©EEC and the EPU, with active and continuing
support from the United States, have helped to
create the climate necessary for economic stability
and have laid the foundation for joint action in
Europe's economic and financial affairs. On June
30, 1952, an agreement was arrived at to extend
the EPU for another year.

These are the most outstanding achievements
in European economic and political integration
which took place during the first 6 months of
1952. Many risks were involved — risks within
certain nations of further aggravating internal
strains, and risks of provoking external threats.
The risks were taken in large part because of con-
fidence that the United States would not retreat
from its policy of helping to develop security on a
mutual basis.

Economic Conditions
in Western Europe

During the first 6 months of 1952, conditions of
production, supply, and prices developed favor-
ably within Western Europe as a whole. The
foreign trade position of Western Europe, how-
ever, did not improve.

After making gains during 1950, Western
Europe's merchandise trade balance with the
rest of the world deteriorated in 1951 and re-
mained serious during the first half of 1952. Dur-
ing this last period, the area's trade deficit ranged
between $440 million and $590 million monthly,
contrasted with a deficit which averaged $280 mil-
lion a month in the final quarter of 1950. Partly
as a result of these adverse trade developments,
Western Europe's gold and dollar holdings fell
again, with the sharp decline of the first three
months of 1952 only partially offset by the slow
recovery between March and June.

Most of the losses stemmed from the shrinkage
in the United Kingdom's hard currency reserves,
although these losses were slowed considerably in
the second quarter of 1952. By June 30, 1952,

1 Ratification by all the members having been completed,
the Schuman Plan went into effect on July 25, 1952.

Britain's gold and short-term dollar assets had
fallen to $1.7 billion, a drop of $2.2 billion since
June 1951. The persistence of a substantial
deficit in Britain's trade with the dollar
area, a deficit in the dollar trade of the overseas
sterling area, and a continuing deficit position in
the European Payments Union constituted the
main forces responsible for this substantial loss.

On the favorable side, total production in
Western Europe continued at high levels. Al-
though there was some decline in the output of
consumer goods for domestic markets, there was
a rise in investment programs and in production
for defense. The coal situation in Western
Europe, although remaining critical during the
first 6 months of 1952, was greatly improved over
1951. Several factors contributed to the improve-
ment : a small increase in coal output, a mild win-
ter, and less dependence upon coal because of
greater output of petroleum products and of
hydroelectric power. The production of crude
steel during the first half of 1952 was maintained
at a peak level of 5 million metric tons a month.

Perhaps the most encouraging aspect of
Europe's economic situation during the first 6
months of 1952 was the curbing of inflationary
pressures. Living costs in Europe, although re-
maining at the highest point in recent periods, in
general showed little change.

Contributions for Defense

Most of the Mutual Security Program in Europe
is geared to the NATO defense build-up — the cre-
ation by 13 other nations and the United States
of a balanced, collective defense force capable of
deterring aggression, or, should aggression occur,
of resisting it successfully. The United States
has committed certain Army, Navy, and Air Force
units to the defense forces in Western Europe.
We are, in addition, supplying our allies with mili-
tary equipment and training, with raw materials
and other commodities in support of their defense
efforts — all to help carry out specific plans for the
build-up of the defense forces of NATO. The
European countries themselves provide more than
90 percent of the troops called for under the
NATO defense plans, with each country supply-
ing the pay, maintenance, clothing, and housing
for its own troops, and much of the equipment.

Forces for NATO. — As a result of agreements
reached at Lisbon in February 1952, the goals for

NATO forces, excluding Greece and Turkey, were
set at 50 divisions (25 active and available and 25
in reserve status but capable of activation within
30 days) , 4,000 aircraft, and a naval force of about
1,600 vessels. These goals were to be achieved by
December 31, 1952. In April 1952, General Eisen-
hower reported that the almost 30 divisions in
being or readily mobilizable in Europe at that
time marked an improvement in the defense capa-
bilities of NATO. As of June 30, 1952, it appeared
that there would be some delay in reaching the
goals set at Lisbon, especially in bringing the re-
serve divisions up to full standards of organiza-
tion, training, and equipment. Such delays,
however, were not considered to be of major sig-
nificance and did not involve basic changes in the
plans for the military build-up. The forces avail-
able to the Supreme Allied Commander, Europe,
from European NATO nations will continue to
increase. After ratification of the treaty concern-
ing the European Defense Community, these
NATO forces will be augmented by German units.
In addition there will be available forces from
Greece and Turkey.

Military Production Rises In Western Europe

THE KEY ITEMS

Tanks

Anti-tank mines

Jet aircraft

Jet engines

Rifles

Sub-machine guns

Small arms ammunition

Mortars

£\

Rockets

U*s

Radar equipment

■J
C

Minesweepers

Destroyer escorts

j;:-:';::::7^j

Jeeps

Military vehicles

Communications equipment

Depth charges

On January 30, 1952, Admiral Lynde McCor-
mick, United States Navy, was appointed Supreme
Allied Commander, Atlantic ( SACLANT ) . This
was the second step in the activation of the mili-
tary command structure of the NATO, the first
step having been the appointment on December 21,
1950, of General of the Army Dwight D. Eisen-
hower as the Supreme Allied Commander, Europe
(SACEUR). SACLANT and SACEUR are co-
equal commanders and both report to a common
superior, the NATO Standing Group. On May
30, 1952, General Matthew B. Ridgway succeeded
General Eisenhower as Supreme Allied Com-
mander, Europe.

Military Equipment. — The major part of the
funds appropriated by Congress for the Mutual
Security Program in Europe is for military as-
sistance. From the start of the military assistance
program in 1949 to June 30, 1952, military assist-
ance funds allocated to the Department of Defense
for use in Europe totaled $9.2 billion.

The procurement of equipment for the military
assistance program is integrated with the normal

THE TREND'

( Index, 1948-49 '1 00)

illli

(949*60 1950-51 l$5l~5& 1952*53

1 Based o
NATO t

expenditures for leH-f-rv
unifies and Germany.

ced production of i

Domestic Economic Indicators Show Progress In Western Europe . . .

Industrial Production Is High Wholesale Prices Are Falling

ISO
140

(Index 1948=100)'

>\ /*"*"

130
120

110

1 Not od[usied for jeosono

1 variation.

100

I 1 ,

1 .

1950

1951

1952

(Index 1948=100)

1950

1951

1952

But Foreign Trade Position Is Weak

Trad

e Gap Is Wide

(Dollar Equivalents, In Billions) *.

Imports

I»

1.5

><jk i^X'Y Vj^Y\x*v"+\\\V'

^^»

itl

^fiMmM^^

0.5

W§&

Exports

mImL|,

1950

, 1 1 i , 1 , , i i ,

1951

, , 1 , ,
1952

U. K. Hard Currency Holdings Are Down

(In Billions Of Dollars)

Gold And Short-Term Dollar Assets

1950

1951

1952

Department of Defense procurement of military
items and thus has contributed to maintaining a
broad mobilization base in the United States. Ma-
teriel is procured from both domestic and foreign
sources.

The total value of shipments to the Western
European countries (from the beginning of the
military assistance program through June 30,
1952) amounted to $1.8 billion, of which $667 mil-
lion was shipped in the period covered by this
report. Security prevents publication of details
of shipments by area, but on a global basis the
major items shipped included :

Army :

Radios and radar 15, 064

Tanks and combat vehicles 12, 002

Motor transport vehicles 58,973

Small arms and machine guns 1,098,517

Artillery 13, 594

Ammunition :

Small arms and machine guns

(rounds) 427,295,000

Artillery (rounds) 9,787,000

Navy:

Vessels 377

Aircraft 464

Air Force:

Aircraft 1, 715

Military Aid Shipments Rose Substantially
In The First Half Of 1952

(Millions Of Dollars)

Total Shipments
$2.5 Billion

Asia and Pacific

-Near East ond Africa

/I3r"

Asia and Pacific

Near Easf and Africa

II I! f

!0 30 10

1950

§mm m

20 30

1951

1952

The President, in January 1952, directed that
military equipment be allocated by the Depart-
ment of Defense in a manner which would assure
the adequate equipping of United States forces
in Europe, of NATO forces, and the forces of
other allies which in the case of war would be
most likely to be first engaged with the enemy.

Deliveries at the end of June 1952 were consider-
ably behind the forecasts made at the beginning
of the year. Continuance of Korean requirements
and delays in United States munitions production
generally have been the principal factors which
delayed an increase in the amount of materiel
available for assistance to our European allies.
While lags in deliveries during the first 6 months
of 1952 did not have a serious impact on the rate of
activation of forces in Europe, it became increas-
ingly urgent to accelerate deliveries ; steps to this
end were undertaken.

European Defense Expenditures. — During the
6 months covered by this report, it is estimated
that defense expenditures of the European NATO
countries increased more than 50 percent over the
first 6 months of 1951 and, at annual rates, were
about double the rate in fiscal year 1950. In the
6 months under review, expenditures for pay and
allowances of the armed services were about one-
third higher than in the corresponding period of
1951 ; hard goods expenditures more than doubled.
Even when allowance is made for increases in
cost, the rise in European defense expenditures,
both for the armed services and the supporting
industries, reflected a substantial growth in the
military strength of the European partners in the
North Atlantic Treaty Organization.

Offshore Procurement. — A program of offshore
procurement of military equipment for the forces
of our allies, mostly in Europe, was started toward
the end of 1951. The phrase "offshore procure-
ment" means that military supplies and equip-
ment— paid for by the United States — are pro-
duced in countries other than the United States.
During the first 6 months of 1952, the United
States Government began, and in most cases com-
pleted, negotiations of broad intergovernmental
understandings with the countries involved in the

European Defense Expenditures' Have More
Than Doubled Since Korea

(Dollar Equivalents, In Billions)

1949-50 1950-51 1951-52 1952-53

(Est.)
1 NATO countries.

offshore procurement program. These under-
standings make up a framework of administra-
tive, financial, and legal arrangements for the
negotiation of contracts. Such contracts are ne-
gotiated either with private manufacturers in for-
eign nations or government agencies of the coun-
tries concerned. The bulk of offshore procurement
contracts have been let in Europe.

In Europe, the offshore procurement program
assists in the development, during the defense
build-up period, of European military production
capacity which would otherwise be limited by the
size of the European defense budgets. Those off-
shore contracts let in Europe to meet continuing
requirements for maintenance and replacement
parts of United States equipment help to keep
active the European industrial base.

Through June 30, 1952, there had been let in
Europe a total of approximately $621 million
worth of offshore contracts to be paid for out of
Mutual Security Program funds. These contracts
are distributed by country as follows :

,~, . - . __ j. . Value of contracts

Country of contract : (i„ miUions of dollars)

Belgium/ Luxembourg $17. 9

Denmark 5. 9

France - 332. 8

Germany 5. 0

Greece 11. 5

Italy 138. 7

Netherlands 38. 0

Norway 5. 8

Switzerland (*)

United Kingdom 65. 2

Total 620. 8

*Less that $50,000.

Iii general, offshore procurement contracts were
for naval vessels, electronics equipment, ammuni-
tion, and spare parts. Inasmuch as the majority
of the contracts were not signed until the latter
nart of the period covered by this report, only
modest deliveries had been made by the end of
June 1952.

As deliveries are made on items contracted for
under the offshore procurement program, pay-
ments are made in dollars. This flow of dollars
to Europe can be useful in supporting the defense
programs of participating countries. However,
because payments are ordinarily not made until
deliveries take place, there is normally a consider-
able period between the time contracts are let and

the time when dollars accrue to Europe. In the
case of France, however, exceptional arrange-
ments have been made whereby the Export-Import
Bank advances dollars to be repaid later when
deliveries take place. Except for France, even if
program goals are met, it is estimated that dollar
payments — resulting from contracts let during the
first 6 months of 1952 — will amount to only about
$100 million during the succeeding 12 months.

Defense Support. — Additional assistance to
Europe to enable the NATO nations to make ade-
quate contributions to the common defense effort
is supplied by the United States through the pro-
gram of defense support. Mutual Security Pro-
gram funds are used to pay for commodities, the
use of which by European nations will further the
European military effort. Defense support funds
are used to pay for the extra margin of additional
resources which the European economies need.
These are resources which the European nations
do not have in sufficient quantity, which — for the
most part — are obtainable only from the United
States and must be paid for in dollars, and which
European countries cannot pay for out of the
dollars they earn in international trade.

During the first 6 months of 1952, the total value
of shipments (for defense support and economic
aid) to Western Europe (including Greece, Tur-
key, Austria, and Yugoslavia) was $924 million.
The value of paid shipments for the entire fiscal
year ending June 30, 1952, amounted to $1,886
million.

The defense support program provided metals
used in military equipment; chemicals used in the
production of ammunition; industrial and heavy
construction equipment used in industries essen-
tial to the defense effort and used for the construc-
tion of military facilities. However, a substantial
proportion of the commodities furnished through
the defense support program is made up of essen-
tial basic commodities, such as cotton, food, and
coal. If the European nations had to pay for
these items from dollars earned through Euro-
pean exports, they would have to devote manpower
and industrial resources to their export trade and
would be unable to devote this manpower and
these industrial resources to the defense build-up.

Counterpart Funds. — In each country where
assistance is provided by the Mutual Security
Agency, there is created a special account known

227419— sa-

The Defense Support Program For Europe Is Made Up Mainly Of
Industrial Equipment And Materials

(Millions Of Dollars)

pfPaidfi;

: Shipments §

1 $924 s§

Million

Fuel, Raw Materials,
Machinery and Vehicles

January-June 1952

Food, Feed, and Fertilizer

Other

1 Include! payments for freight, services, and EPU.

2 Includes Belgium-Luxembourg, Denmark, Iceland, Norway, and Portugal.

as the counterpart fund. This account is built up
primarily from funds obtained from business
firms in that country which import goods financed
by the Mutual Security Agency. Under the terms
of the Mutual Security Act, each government is
required to make deposits equal to the value of
grant aid furnished by the United States. Five
percent of the counterpart funds in each country
was reserved for use by the United States for pur-
poses such as payment of administrative expenses
of the Mutual Security Program, for information
programs, and strategic materials programs. Use
of the balance of these funds by the governments of
various European nations is subject to the concur-
rence of the United States. The primary objective
in directing the use of new counterpart funds dur-
ing the period under review was to advance the
defense build-up of the NATO countries. Coun-
terpart funds have been earmarked for use di-
rectly in European defense programs and for ex-
panding defense-supporting industries. From
January 1, 1952, through June 30, 1952, the Mu-
tual Security Agency released the equivalent of

$906 million for use by the participating coun-
tries. For the entire fiscal year ending June 30,
1952, releases of counterpart amounted to $1,665
million.

The Mutual Security Act of 1951 required that
agreements with participating countries be entered
into with respect to the use of counterpart funds,
so that "the equivalent of not less than $500,000,-
000 of such funds shall be used exclusively for
military production, construction, equipment, and
materiel in such countries." Negotiations for such
agreements were entered into immediately after
enactment of the Mutual Security Act in October
1951. By June 30, 1952, the agreements provided
for the earmarking, for military use, of more than
$850 million in Europe alone. The bulk of such
funds are to be used to pay for the production and
procurement of major military items, such as air-
craft, combat vehicles, ships, ammunition, and
electronics equipment.

In addition to counterpart funds going directly
for defense production and construction, substan-
tial amounts of counterpart funds were used to

How European Counterpart Works

Five Percent Is Set Aside For The
United States To Pay For:

• Administrative Expenses
•Information Programs

• Strategic Materials

1 Tlie Mutual Security Act of 1952 increased the poriion reserved for u*e by the
United Slates to not lew lhan 10 percent for funds obligated after June 19, 1952.

promote defense-supporting industries and to
build housing for workers. Funds were released
for monetary and financial stabilization in accord-
ance with prior commitments. Counterpart funds
set aside for use by the United States amounted
to $37 million during the first 6 months of 1952.
The cumulative total for the entire fiscal year
ending June 30, 1952, amounted to $85 million.

Military Technical and Training Program. —
The United States supplies to our allies, as impor-
tant adjuncts to the program of furnishing mili-
tary supplies and equipment, programs of mili-
tary technical training to insure efficient mainte-
nance and use of weapons delivered from the
United States. Although this training empha-
sizes the operation and maintenance of United
States equipment, the program is not limited ex-
clusively to this type of training, but includes
instruction also in tactical application of the
equipment. The military training program is di-

vided into four parts : ( 1 ) student training under
European command ; (2) student training in the
United States by the United States Armed Forces ;
(3) on-the-spot training by mobile United States
training teams; (4) certain special instructions,
delivery of necessary technical training manuals,
and other forms of technical training assistance
provided by the Military Assistance Advisory
Group stationed in each country.

Infrastructure. — The United States participates
with other NATO nations in financing the cost of
certain fixed military facilities which are needed
for effective defense and which are used jointly by
the integrated combat forces. Known technically
as "infrastructure," this military construction in-
cludes headquarters, airfields, and communica-
tions systems. Minimum standards for infra-
structure are developed by SHAPE. If any na-
tion wishes or requires higher standards for its

Over $1.6 Billion Of Counterpart Funds Were
Released To European Countries During
The Year Ending June 30, 1952

tary Uses

Other Releases Support
the Defense Build-up

Monufacturing .Transportation, Agriculture Mining Miscellaneous

Communication,
and Utilities

Promotion of Production

own forces, that nation will bear the additional
cost.

During the first 6 months of 1952, the United
States obligated $220 million for the infra-
structure program. For all countries, the total
cost of infrastructure from the beginning of the
program in the latter part of 1951 through the
calendar year 1952 is estimated at $740 million.
The United States total share is $288 million, of
which $168 million was earmarked out of Mutual
Security Program funds available during the first
6 months of 1952.

Tax Relief Agreements. — Section 521 of the
Mutual Security Act of 1951 placed a prohibition
iipon the use of funds (appropriated under Title
I of the Act) for the payment of taxes in connec-
tion with the United States participation in ac-
quiring or constructing defense facilities in for-
eign countries. In order to comply with this pro-
vision, the Executive Branch immediately began

the negotiation of tax-relief agreements with each
of the countries concerned. As an interim meas-
ure, pending completion of the negotiations, with-
holding arrangements were effected to insure that
no tax payments would be made in connection with
United States financing of infrastructure pro-
grams and United States purchases under the off-
shore procurement program.

In March 1952, the negotiations had been com-
pleted and agreements were signed with each of
the following countries: Belgium, Denmark,
France, Italy, Iceland, Luxembourg, the Nether-
lands, Norway, and the United Kingdom. Each
agreement lists specific taxes from which the
United States will obtain exemption and pro-
vides also for exemption from any other similar
taxes which in the future may become applica-
ble to the United States expenditures. The tax
relief provided for in the agreements applies
not only to the United States expenditures for
infrastructure, as called for in the Act, but also
to all other United States expenditures for the
common defense in Europe, such as offshore pro-
curement for NATO forces and direct purchases
in Europe for the Armed Forces of the United
States.

Other European Programs

Austria

Austria remains subject to four-power occupa-
tion and has been suffering since 1945 from con-
tinued exploitation in the eastern zone by the
Soviet authorities. Austria's strategic position
for the defense of Western Europe, and the im-
portance of creating in Austria conditions which
will maintain that country as a politically free
and independent nation with a strong and self-
supporting economy, have made necessary con-
tinued economic assistance from the United
States.

Economic progress in Austria has been ham-
pered by the scarcity of natural resources and
underdevelopment of existing resources, condi-
tions which have made for a persistent deficit in
Austria's balance of payments on international
trade accounts. In addition, Austria has suffered
from severe inflation, from the drain of resources
by Soviet occupation authorities, and from de-

terioration of trade with Eastern Europe, trade
upon which Austria had long been dependent.
Economic aid from the United States has been
used to assist the Austrians in gearing their econ-
omy to closer association with Western Europe
and to encourage further progress toward self-
support.

During the 6 months ending June 30, 1952, the
United States allotted $42 million to Austria. For
the entire fiscal year ending in June 1952, the
United States authorized a total of $116 million
worth of aid to Austria, of which $35 million
financed Austria's deficit with the European Pay-
ments Union and $81 million was for goods and
services. Among the principal commodities were
grain, fuel, and textile fibers.

A serious problem in Austria stems from the
prevalence of restrictive business practices and a
general absence of competition; the consequent
limitations on production and maintenance of high
price levels adversely affect both the domestic econ-
omy and export trade. The United States Gov-
ernment has stressed to the Austrian Government
the importance of effective action to develop a less
restrictive economic structure.

Spain

The Congress has authorized $162.5 million to
be made available for aid to Spain : $62.5 million
in loans (authorized by the Congress in 1950) , and
$100 million appropriated under the Mutual Secu-
rity Appropriations Act of 1951 for economic,
technical, and military assistance. The $62.5 mil-
lion loan program had been virtually completed
by June 30, 1952. As of the same time, no agree-
ment had been reached with Spain concerning the
terms under which economic, technical and mili-
tary assistance might be furnished ; however, nego-
tiations continued.

Yugoslavia

Because of its important strategic position and
because of its political and military potential in
meeting the Soviet threat, the United States,
France, and the United Kingdom established a
tripartite aid program for Yugoslavia. This as-
sistance is aimed, in part, at helping Yugoslavia
to overcome the economic difficulties created by the
severance of relations with the Soviet Union and
its satellites, and, in part, at assisting Yugoslavia

to maintain armed forces of a size adequate for
self-defense. During the first 6 months of 1952,
the United States share of aid to Yugoslavia under
the tripartite program amounted to $48 million.
For the year ending June 30, 1952, there was al-
lotted to Yugoslavia under the tripartite aid pro-
gram $122 million, of which $80 million was pro-
vided by the United States.

In addition, the United States has furnished
Yugoslavia with a considerable quantity of mili-
tary end-items to help that nation build up a bal-
anced and effective fighting force. Items provided
included communications equipment, combat ve-
hicles, artillery, small arms and ammunition,
equipment for modernizing existing vessels, and
aircraft.

Ireland

Although direct economic aid to Ireland was
suspended on May 1, 1951, after the major objec-
tives of such assistance had been accomplished,
certain activities continued. However, because
Ireland was unwilling to subscribe to the purposes
of the Economic Cooperation Act as revised by the
Mutual Security Act of 1951, aid to Ireland — con-
sisting mainly of technical assistance — was sus-
pended on January 8, 1952, as required by law.

Loans

Section 522 of the Mutual Security Act of 1951
provided that not less than 10 percent of the aid
furnished through the Mutual Security Agency in
the fiscal year 1952 should be in the form of loans.
The total amount of aid subject to this provision
was $1,645.1 million, including Mutual Security
Agency activity under all titles of the Act; $165.3
million of this assistance has been negotiated on a
loan basis. Nine European countries — Denmark,
France, Germany, Iceland, Italy, the Netherlands,
Norway, Turkey, and the United Kingdom — re-
ceived a portion of their assistance in the form of
loans ; assistance to all other countries was entirely
on a grant basis.

The decision to place loans totaling slightly
more than the minimum statutory requirement,
the actual distribution of the loans by country, and
the terms of the loans were made in consultation
with the National Advisory Council on Inter-
national Monetary and Financial Problems
(NAC).

Transfers

The Mutual Security Act of 1951 provided
[Section 101(b)] that up to 10 percent of
the total value of the Title I (Europe) ap-
propriation could be transferred between the
appropriation for direct military aid and that
for defense support assistance. In recognition of
the uncertainty that attaches to estimates of re-
quirements to be met under each type of aid, and in
recognition of the fact that defense support aid
and direct military assistance both serve the same
objective of building up the defense forces of the
European countries, the Congress provided this
limited flexibility to be used when determined by
the President to be necessary for achieving the
purpose of the Mutual Security Act.

A total of $478.2 million was transferred by the
President on February 5, 1952, from the military
appropriation to the defense support appropria-
tion, upon the recommendation of the Secretary of
State, the Secretary of the Treasury, the Secretary
of Defense, and the Director for Mutual Security.
In notifying the chairmen of the appropriate Con-
gressional committees of this decision, the Presi-
dent stated that he was satisfied that this transfer
of funds would in fact contribute more to military
strength in Europe than if the same funds were
to be used to procure military equipment for de-
livery to the countries concerned, and that the
military effort on the part of the recipient coun-
tries which would be made possible by the transfer
would be considerably larger than the amount of
the funds transferred.

Over half of the funds transferred, $300 million,
were allotted to Britain to assist that country in
meeting its urgent defense requirements for ma-
terials and machinery vital to the British defense
program, and at the same time to help retard the
rapid drain of Britain's reserves of gold and
dollars. In the spring of 1951, when the Mutual
Security Program was presented to the Congress,
no defense support assistance had been programed
for Britain. Although a strong external financial
position had prevailed in Britain for the preced-
ing 18 months, it was pointed out that there
were serious uncertainties in the British balance
of payments situation which could create a sub-
stantial need in Britain for defense support. By
the end of 1951, it had become apparent that
such assistance was urgently required. In weigh-

ing the requirements of Britain against the other
requirements of the Mutual Security Program, it
was estimated that for Britain to earn or save an
amount of dollars equal to the $300 million trans-
ferred, Britain would have to make a reduction of
more than twice that amount in her defense pro-
gram. The $300 million was used to cover such
necessary imports as steel, aluminum, nickel,
sulphur, copper, petroleum products and other raw
materials and components related to the defense
program. In addition, the British agreed to sup-
ply the equivalent sterling counterpart to their
defense production program.

The French campaign against the Communist
forces in the Indochina war was supported in-
directly by $100 million of the transferred funds.
The French Government, because of dollar short-
ages, was faced at the end of 1951 with the neces-
sity of drastic reductions in her dollar imports.
Such a reduction in the French import program
would have seriously and adversely affected total
French production and the financial stability of
the country, and would have forced a reduction in
the French defense production program substan-
tially larger than the value of the imports that
would have to be eliminated from the French pro-
gram. It was decided to provide directly to
France an additional $100 million in defense sup-
port ; and the counterpart of this $100 million was
directed to the procurement of supplies for the
campaign in Indochina.

Greece, Turkey, and Yugoslavia together re-
ceived the remaining $78 million transferred, to
permit those countries to carry out larger defense
efforts than would have been possible otherwise.
Another transfer of funds — from the Title 1
(Europe) military assistance appropriation to the
Title III (Asia and Pacific) military assistance
appropriation — was made in support of the war
against Communist insurrection in Indochina.
This transfer between areas was made under the
authority of Section 513 of the Mutual Security
Act of 1951. This section authorized the Presi-
dent to transfer up to 10 percent of the funds
appropriated under one title of the act to any other
title in order to furnish assistance of the same
kind to a different area. The transfer of $153
million from the Title I military assistance appro-
priation to the Title III military assistance ap-
propriation was made on May 5, 1952. These

funds were used to provide, in Indochina, equip-
ment and other supplies to the French forces and
the forces of the three associated states of Indo-
china.

Both of the transfers referred to above, that
between the European and the Asian Titles of
the act, and that between the military and the
defense support sections of the European Title, re-
flect the vital relation between the various por-
tions of the Mutual Security Program in all parts
of the world.

Migration

Encouraging progress has been made toward
meeting the problem of surplus population exist-
ing in certain countries of Western Europe and
Greece. In the period covered by this report, five
additional countries (Denmark, Israel, Paraguay,
Sweden, and Venezuela) have joined the Provi-
sional Intergovernmental Committee for the
Movements of Migrants from Europe
(PICMME) , bring the total to 20 members.6 In
addition, a number of other countries are inter-
ested in becoming members of the organization.
The goal for movement of migrants from Western
Europe to new homes overseas during the cal-
endar year 1952 was raised from 115,000 to
137,000. A budget of $41.4 million was adopted
for the first year of operation, to winch the United
States is making a direct contribution of $10 mil-
lion as specifically authorized by the Congress
under the Mutual Security Act of 1951. As of
June 30, 1952, the United States had paid $5 mil-
lion to the Committee. Additional payments will
be made periodically after full consideration of
the contributions of other member governments.

In the period from January 1 to June 30, 1952,
the Committee moved approximately 50,500

migrants.

The projected movement of migrants for the
calendar year 1952 is as follows:

From—

To—

Austria

German}7

Greece

Italy-Trieste

Netherlands

16, 000
67, 000
4,000
35, 000
15, 000

Australia
Canada

Latin America

New Zealand

United States

25, 000

40, 000

31, 000

3,000

1 38, 000

137, 000

"Australia, Austria, Belgium, Bolivia, Brazil, Canada,
Chile, Denmark, France, Germany, Greece, Israel, Italy,
Luxembourg, Netherlands, Paraguay, Sweden, Switzer-
land, the United States, and Venezuela.

1 Represents ethnic Germans and displaced persons
entering the United States under the provisions of the
United States Displaced Persons Act of 1948, as amended.

Escapee Program

On March 22, 1952, the President, acting under
the provisions of Section 101 (a) (1) of the Mu-
tual Security Act of 1951, authorized a limited
program of $4.3 million for supplemental care
and resettlement assistance for escapees from cer-
tain countries behind the Iron Curtain. Respon-
sibility for carrying out the program has been as-
signed to the Department of State. The program
has the limited objectives of improving the living
conditions offered escapees, and of giving assist-
ance in resettlement.

A small Washington organization has been es-
tablished in the Department of State, and the field
operations will be carried out by teams established
within the diplomatic missions in Western Ger-
many, Austria, Trieste, Italy, Greece, and Turkey.
By contract with PICMME, plans have been de-
veloped for the overseas resettlement of up to
14,000 escapees, and movements already had com-
menced under this arrangement by June 30, 1952.

CHAPTER III

The Near East and Africa

f^ REECE, Turkey, Iran, the Arab States
^-f (Egypt, Iraq, Jordan, Lebanon, Saudi Ara-
bia, Syria, and Yemen) , the independent countries
of North Africa (Ethiopia, Liberia, Libya), and
Israel are the 14 nations which were eligible to
receive aid under Title II (Near East and Africa)
of the Mutual Security Act.

Military Aid Program

Military assistance under the Mutual Security
Program was supplied to three countries during
the first 6 months of 1952: Greece, Turkey, and
Iran. The strategic location of these nations
makes their defense important to the security of
the free world. Military assistance has been pro-
vided to Greece and Turkey since 1947 and to Iran
since 1950. The value of military aid shipped to
these three countries during the first 6 months of
1952 amounted to $106 million. The total value of
shipments to these nations since the start of the
Mutual Defense Assistance Program in 1949
through the end of June 1952 amounted to $320.9
millions.

Military aid from the United States has en-
abled Greece and Turkey to make extensive im-
provements in the organization and equipment of
their armed forces. Greece and Turkey have con-
tributed armed forces not only to the strength of
NATO, but also to the United Nations combat
forces in Korea, where a battalion of Greek in-
fantry and a Turkish regimental combat team
have distinguished themselves in battle.

The military assistance program for Iran dur-
ing the first 6 months of 1952 was of modest pro-
portions and consisted mainly of equipment to
modernize the existing armed forces. Under the
provisions of section 511 (a) of the Mutual Secu-

rity Act of 1951, it was necessary to hold in abey-
ance all shipments of military materiel to Iran
from January 8, 1952, until April 24, 1952, when
the assurances required from that nation were re-
ceived, and shipments resumed.

Technical Assistance
Program

Technical assistance (Point 4) programs are
conducted by the Technical Cooperation Admin-
istration (TCA) in 10 of the 14 nations in this
area. (Of the remaining four nations, two —
Greece and Turkey — are included under Europe
for purposes of economic and technical assistance,
and two — Syria and Yemen — had not concluded
at the end of June 1952 the agreements which en-
able this type of assistance to be started or con-
tinued.) In the Near East and Africa, with the
exception of Liberia, comprehensive programs
have been under way only since 1951. American
aid under the Point 4 Program is supplied only
upon request.

In the underdeveloped nations, the aim of the
Point 4 Program is to assure economic and politi-
cal stability by showing the men and women of
these nations how their own efforts can result in
conditions of reasonable economic and social prog-
ress. Those who can see progress actually grow-
ing as a result of the working of democratic pro-
grams are less likely to be attracted by the blue-sky
promises of fanatics.

The programs vary in emphasis from country
to country, depending upon the most urgent need
which must be met. In all countries in the Near
East and Africa Point 4 Programs are aimed at
raising the levels of education and health, and
increasing the supply of food and improving its

distribution. About half of the funds for the
Point 4 Program for this area were devoted to
improving the food situation.

Agriculture

In Iran, agricultural technicians are working
out of 10 regional headquarters — along with tech-
nicians in public health, education, and other
fields — advising, demonstrating, and, in the
"county-agent" tradition, training local farmers.

Sixty tons of seed wheat of improved local va-
rieties were distributed in the Tehran region in
return for poor seed wheat used by local farmers.
The poor wheat was sold for feed and the proceeds
used to buy additional wheat of the improved
varieties. In the spring of 1952, seeds of various
vegetables, forage crops, and sugar beets were im-
ported from the United States for testing and
demonstration in Iran. Similarly, bulls, chickens,
and other farm animals have been imported as
part of the program to improve the livestock of
the country. Artificial insemination is being em-
ployed in Iran for the first time in a breed-im-
provement program. Communist and other op-
position elements have sought to ridicule this pro-
gram, but in spite of, if not because of, the
publicity they gave it, the farmers of Iran have
shown great enthusiasm for the program.

Various adaptations of the American agricul-
tural college and extension systems are being em-
ployed in an effort to put into practical use by
farmers all over the Near East the benefits of
modern knowledge and research.

In Ethiopia, a country with one of the greatest
potentials for agricultural expansion in the world,
work continued toward establishing an Imperial
Institute of Agriculture. Oklahoma A. and M.
College — working under a Point 4 contract —
undertook to provide faculty members and direc-
tion in the first years. Modeled along American
land-grant college lines, the school, when com-
pleted, will carry teaching, training, research, and
extension to all corners of the country.

The Booker T. Washington Agricultural and
Industrial Institute in Liberia was expanded to
provide training in agriculture and in other voca-
tional fields, equipping Liberians to take over the
research and extension work now being carried on
by American specialists. These specialists have

already restored many Liberian cacao groves
which had been allowed to go back to jungle dur-
ing World War II. They have shown Liberian
growers how to meet the requirements of the
United States food and drug laws. As a result,
United States cocoa processors have for the first
time begun to make extensive use of the Liberian
product — about 300 tons in 1951. In 1950, im-
ports were only 800,000 pounds. Through the
Point 4 Program, total acreage of cacao trees has
been increased substantially and now amounts to
nearly 22,000 acres.

In Libya, programs of agricultural extension,
education, and reforestation continued. United
States technical experts gave help in improving
sheep and wool production, including instruction
in grading and marketing of fleeces. The Libyan
Government received aid to settle nomadic tribes
on farms which were left by the Italians in the
Barci Plain area, the richest agricultural section
of the country. American "county agents" will
soon be working in 12 regions of the country.

Marketing practices are as important as pro-
duction methods in developing the commercial
possibilities of agriculture. As an example of
what can be accomplished, in Lebanon citrus pro-
ducers and shippers were shown how to increase
their returns and prevent losses by better market-
ing. Through demonstration of modern methods
of picking, sorting, grading, wrapping, packing,
and shipping, losses already have been reduced
substantially and returns have been increased,
with practically no expenditure for new equip-
ment.

Water is the key factor in food production
throughout the Near East where millions of acres
receive little or no rainfall, and human life de-
pends on irrigation facilities of every conceivable
kind.

In Egypt, for example, over 97 percent of the
land area is desert waste. The less than 3 percent
that is cultivated is watered solely by the Nile,
whose mouth is 2,000 miles down river from the
nearest tributary. Point 4 geologists in Egypt
helped locate sites for wells and catch basins.
Similarly, a large well-drilling program got under
way in Iran, with smaller programs in Saudi
Arabia, Libya, Jordan, and other countries.

An American engineer has been engaged to serve

227419—52-

Greater Development Of Land Resources Can Speed Progress In The Near East

PERCENT OF LAND
UNDER CULTIVATION

United States

2.3 Acres Per Person

CULTIVATED ACRES

PER CAPITA OF

POPULATION

on the Iraqi Development Board, set up in 1950
to utilize a large part of the country's oil revenues
in a 5-year program of general development, with
special emphasis upon development of Tigris and
Euphrates valley. It is estimated that 7 million
acres now barren and dry can ultimately be
brought into production through irrigation.

In Lebanon, work continued on plans for the
harnessing of the waters of the Litani Eiver, the
principal natural resource of the nation, with com-
pletion of most of the preconstruction surveys and
plans for the Zarka power unit, the Karsoun Dam,
and the Bisri tunnel and power plant.

Food supply was also being increased through
measures to prevent waste and destruction. One
of the greatest of all food destroyers — the desert
locust — was, and is being, subjected to continuous,
effective attack from ground and air.

Point 4 entomologists — assisted by the United
Nations Food and Agricultural Organization and
the British Desert Locust Control — worked with
pilots, planes, and the ground-control organiza-
tions of the various countries to fight locusts in
1952, as in 1951. The 1952 locust invasion is said
to be the worst in a century — marking the mid-
point of one of the cycles of heavy infestation
which occur from time to time. More than a

dozen nations worked together to wipe out the
swarms before great damage was done to crops —
damage which ranges from $80 million to more
than $200 million in a single year.

The total cost of America's contribution to fight-
ing locusts throughout the region from Central
Africa to the east of India was some $400,000 in
1951 and about $470,000 in 1952. Most of this was
for contracts with American flying services,
planes, and aldrin — an American insecticide be-
coming standard for air-spraying of locusts in the
Middle East.

A constant threat to grain crops in parts of the
Near East is another destructive pest — the sen — a
small bug which does its damage by sucking the
young stalks and the immature grain, and cutting
yields by as much as 50 percent if infestation oc-
curs over wide areas. A recent demonstration of
hand-and-power spraying of wheat fields in Iran
showed that fields were 100 percent resistant to the
pest after treatment with DDT and parcium so-
lutions. This work, in which the Technical Coop-
eration Administration and the Near East Foun-
dation are cooperating, has been expanded in Iran
into a nation-wide campaign against the sen. The
value of the grain saved is many times the cost of
treatment.

Locust Invasions Threaten Food-Short Areas

The International Locust Control Program Aims to Avert Disastrous
Crop Damage in Africa, the Middle East, and South Asia.

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Health

Closely related to the matter of increasing food
supply is improvement of health conditions
throughout the Middle East. Activities in public
health and sanitation are under way in most of the
countries of the Near East and independent
Africa, with emphasis on training a nucleus of
competent local nationals and on setting up local
public health organizations. Most of the actual
health work under Point 4 is preventive and dem-
onstrational in nature. Except in Israel, which
has the highest ratio of physicians to population
in the world, health facilities are poor, widely
scattered, and inadequate.

In Iran, the regional health-and-sanitation
teams have concentrated special attention on ma-
laria— one of the most widely prevalent of all dis-
eases in the area. During the calendar year 1951,

a total of 450 tons of DDT was furnished under
Point 4 Programs. In cooperation with the Min-
istry of Health, about 9,000 villages were sprayed,
building by building, and some 3,500,000 people
were protected. The work continued on an even
greater scale in 1952.

Among other health activities in Iran, two ty-
phoid epidemics were arrested by immunization
and application of sanitation procedures, a large
number of children were given X-ray treatment
for ringworm of the scalp, villages have been
dusted to prevent the spread of insect-borne ty-
phus, and training classes were conducted
throughout the country for village physicians,
nurses-aides and midwives, and sanitation work-
ers. A number of Iranian doctors, sanitary engi-
neers, and technicians are being given postgradu-
ate study in the United States.

The health program in Liberia was started sev-
eral years ago by the United States Public Health
Service and continued under Point 4. It includes,
among its many activities, a country-wide pro-
gram of swamp clearance, drainage, and DDT-
spraying to control malaria ; operation of an out-
patient clinic in Monrovia; a diagnostic labora-
tory, which also serves as a training center for
Liberian laboratory technicians ; a school for both
graduate and practical nurses; a research insti-
tute working on tropical diseases indigenous to
the region, and campaigns against yaws, dysen-
tery, sleeping sickness, and other diseases. In this
program, 11 American doctors, nurses, and other
technicians work in association with more than
300 Liberians.

Education

Point 4 activities in the Near East involve a
wide range of other technical fields, all related in
one way or another to the economic development
of the region, including education and public
administration.

Saudi Arabia until recently had no effective sys-
tem of financial administration and currency. In
making effective use of oil earnings for the gen-
eral economic development of the country, the first
step was to establish a budgetary and banking
system, and measures for fiscal control, with
trained people to administer them. At the re-
quest of the Saudi Arabian Government, a team
of American fiscal experts made a thorough study
of the country's finances. Acting upon the recom-
mendations of this team, Saudi Arabia estab-
lished a monetary agency to manage the currency
and handle the revenues and expenditures of the
country. An American expert has been hired to
direct the new agency through its early stages.
Point 4 experts were employed to advise on the
country's customs and tariff systems, to help in-
stall accounting and bookkeeping practices, and
to improve other government services.

At the American University of Beirut, 120
Arab nationals, under Point 4 scholarships, were
recently graduated from a special course of train-
ing for economic development work and public
service in their own countries. The American
University of Beirut expanded its faculty to pro-
vide courses in agriculture, public health, public
administration, and business.

At the end of June 1952, 84 foreign nationals
from the countries of the Near East and Northern
Africa were in the United States under Point 4
training grants. Of these, 17 were from Egypt,
21 from Iran, 24 from Iraq, 10 from Israel, 2
from Jordan, 4 from Lebanon, 5 from Liberia,
and 1 from Libya. All these trainees are either
leaders in the affairs of their nation, or are techni-
cal workers preparing for some field of general
economic development or for public service.

Special Programs

In addition to the usual program of technical
cooperation assistance, the United States has
furnished aid to Israel for the purposes of gen-
eral economic development and for the relief and
resettlement of refugees. During the year ending
June 30, 1952, $13.5 million of aid was programed
to improve transportation, to develop power re-
sources, to assist in various irrigation projects,
and to encourage the growth of industry.

In addition, the $50 million appropriated by the
United States Congress for relief and resettlement
was administered under two distinct but corre-
lated activities. The relief aspects necessitated
the provision for the added refugee population of
basic consumer goods, including wheat, seeds, fats
and oils, raw cotton, leather, fuel, and fodders.
In connection with the resettlement program, nec-
essary imports included steel for housing, pipes
for irrigation, electric power equipment, and spare
parts for agricultural machinery.

Technical cooperation was closely linked to the
resettlement program with assistance in the field
of vocational education, emphasizing the teaching
of skills to large refugee groups, in addition to
on-the-job training for industrial apprentices.
American technicians also aided in the develop-
ment of mineral resources such as the potash and
phosphate deposits in the Dead Sea area and the
low-grade copper and manganese of the Negeb.

All three programs, as correlated, were aimed
at providing the basic essentials of life to the
people of Israel and to help develop a firm eco-
nomic base which will lead to the country's even-
tual self-support.

Palestine Refugee Program. — During the first
6 months of 1952, the United States worked
through the United Nations Belief and Works

Agency for Palestine Eefugees to provide food,
shelter, and medical attention for the 850,000 Arab
refugees still on relief roles, and to press forward
with programs designed to assist the refugees to
become self-sustaining members of society.

Indications of an increased willingness in sev-
eral Near Eastern areas to accept skilled refugees
led to a greater emphasis on screening refugee
workers with experience in useful trades and plac-
ing them in jobs where they could support them-
selves. Vocational training programs were de-
veloped to assist additional refugees to find their
places in the economies of the Near East. Ar-
rangements were worked out with the Jordan Gov-

ernment whereby the United Nations Relief and
Works Agency would advance additional capital
to the Jordan Development Bank, which in turn
would lend money to refugees with trade and
manufacturing capabilities to enable them to
start small businesses. Arrangements to pro-
vide capital assistance for refugee enterprises
were under discussion with other governments.
For these programs, the United States made
available the $50 million appropriated for the
fiscal year 1952 toward the total budget of $77
million recommended by the United Nations
agency. Contributions of over $22 million were
made by other governments.

CHAPTER IV

Asia and the Pacific

TEN nations in the Asian and the Pacific area
received assistance under the Mutual Security
Program during the first 6 months of 1952. Four
of those nations are in South Asia (India, Paki-
stan, Afghanistan, and Nepal) and six are in
Southeast Asia and the Far East (the Associated
States of Indochina, Burma, Indonesia, the Philip-
pines, the Republic of China on Formosa, and
Thailand).

Military Aid Program

Military assistance was supplied to the Asso-
ciated States of Indochina, the Republic of China
on Formosa, the Philippines, and Thailand.1
Equipment and training were provided to assist
those nations to develop defense forces capable of
maintaining internal security and of discouraging
attack by an external aggressor.

In the area of Asia and the Pacific, Communist
activity takes the form of open military measures
in addition to nonmilitary forms of subversion.
Armed communist forces have been active not only
in Korea — where they were assisted by Chinese
Communist aggressors — but also in Indochina, in
Malaya, and in the Philippines.

During the first 6 months of 1952, materiel
valued at $107 million was shipped from the
United States to the four nations in the Pacific
area receiving military assistance. From the start

1 Although there was no military assistance program for
Indonesia during the fiscal year ending June 30, 1952,
some deliveries of military equipment took place as a
result of a small program undertaken earlier under the
Mutual Defense Assistance Program. The deliveries, al-
though small, were important in arming the national
mobile police of Indonesia. Deliveries of vehicles and
light arms have enabled the National police to assist the
Government of Indonesia in maintaining peace and secu-
rity. The materiel program for Indonesia is 63 percent
completed.

of military assistance programs for this area in
1949 until the end of June 1952, a total of $1,171
million worth of aid has been programed, of which
$336 million has been shipped. Total shipments
through the end of June 1952 amounted to 518,150
measurement tons, of which approximately 200,-
000 tons were shipped during the period covered
by this report.

Indochina. — Military assistance to the armed
forces of the French Union and the armed forces
of the Associated States of Indochina continued
on a high priority basis during the first 6 months
of 1952. Deliveries during this period included
large numbers of vehicles, artillery pieces, com-
munications equipment, landing craft, and certain
vitally required aircraft. These deliveries, and
the effect upon military operations, have been of
major importance in improving the military situa-
tion in Indochina.

Increasing emphasis was placed on building up
the national armies of the Associated States of
Indochina. In the struggle to prevent these new
nations from being taken over by Communist
armies, the assistance and tutelage of French mili-
tary forces have been invaluable to the national
armies of the Associated States, and this assist-
ance will be necessary for some time. Eventually,
however, the new national armies should be able
to take over an increasing share of the burden of
protecting their fellow countrymen from Com-
munist attack. As the national armies become
stronger, the French will be able to transfer
from Indochina to Europe the trained profes-
sional officers, noncommissioned officers, and en-
listed men who are much needed for the build-up
of NATO forces.

The Republic of China on Formosa. — De-
liveries of military equipment to the Republic of
China on Formosa were accelerated during the
first 6 months of 1952. In May and June, deliv-

eries showed a marked upswing and included air-
craft, vehicles, artillery, and communications
equipment. Military aid to the Republic of China
is supervised, as elsewhere, by a United States
Military Assistance Advisory Group. One of the
largest of such groups is in Formosa. It not only
supervises the supply of needed equipment but is
active also in the field of military training. It
has given advice on reorganization of the Chinese
Nationalist armed forces, on building the defenses
of Formosa, and on ground-force field maneuvers
and joint maneuvers between the various Chinese
armed services which took place during the first
6 months of 1952.

The Philippines. — Increased deliveries of equip-
ment to the Philippine armed forces assisted in
the disorganization of the Huk insurrection which
had been aided and, in part, led by Communists.
Although much had been accomplished in putting
down the Huks, there remain disorganized but
dangerously large bands of Huk guerrillas which
still have power to harass and destroy peaceful
communities and to terrorize by assassination.

Thailand. — Deliveries of military equipment
during the first 6 months of 1952 enabled Thai-
land to continue the process of modernizing sev-
eral battalion combat teams and to give training
to its small but efficient air force. Military as-
sistance from the United States has enabled the
Thais to equip and to maintain one battalion of
troops in Korea under the United Nations Com-
mand.

Economic and Technical
Assistance Program

During the period covered by this report, eco-
nomic and technical aid to India, Pakistan, Af-
ghanistan, and Nepal (the countries in South
Asia) was administered by the Technical Cooper-
ation Administration in the Department of State ;
similar aid to the Associated States of Indochina,
Burma, Indonesia, the Philippines, the Eepublic
of China on Formosa, and Thailand (Southeast
Asia) was administered by the Mutual Security
Agency.2

2 As a result of the provisions of Sec. 503 of the Mutual
Security Act of 1951, programs for Burma and Indonesia
are to be administered in the future by the Technical Co-
operation Administration under the provisions of the Act

Economic and technical assistance from the
United States is designed to strengthen the ability
of governments of the various nations in South
Asia and Southeast Asia to carry on essential gov-
ernmental functions, to support the build-up of
military and police forces, and to help the achieve-
ment of greater and more diversified production,
including production of strategic materials needed
by other nations of the free world. The programs
are aimed at developing trained leaders and tech-
nicians, at establishing adequate public services
in fields such as health, agriculture, education,
transportation, and communications. The pro-
grams also are aimed at creating conditions which
will attract private enterprise and private invest-
ment.

South Asia

More than one-third of all the people in the non-
Communist world — about 465 million — live in the
South Asian countries of India, Pakistan, Af-
ghanistan, and Nepal.

In South Asia, the Communists have sought to
exploit social unrest, to weaken domestic govern-
ments, and to turn the non-Communistic popula-
tion against their governmental leaders. Local
Communist agitators, with help from the Soviet
Union, have tried to convince the people of South
Asia that the only way to rid themselves of the
accumulated grievances of the past and the frus-
trations of the present is to join the Soviet bloc.

There is, however, in the nations of South Asia
a substantial reservoir of good will toward the
United States. This nation is regarded as a friend
who is willing to share knowledge and skills to
assist the nations of South Asia in their efforts to
achieve conditions of economic and social prog-
ress, progress which must be made if deterioration
in the present political situation is to be prevented.

The Point 4 Program is extending American
cooperation to all four of the South Asian coun-
tries in their drive for economic progress. The
work is under the direction of the Asian Develop-
ment Service, the regional operating agency of the
Technical Cooperation Administration.

for International Development. During the month of
June 1952, arrangements were completed for the change-
over which became effective July 1. No major change
in the nature of the program for these two countries
was contemplated.

The population of India is the largest of any
nation in the free world; that of Pakistan, the
third largest. Both nations have achieved polit-
ical independence within the past 6 years. Both
nations, under democratic governments, are em-
barked upon ambitious and energetic programs of
economic development.

India. — India has great potentials for develop-
ing its resources of land, water, and minerals, and
is staking a major portion of its available capital,
its borrowing capacity, and its technical resources
on a 6-year development plan.

The greatest need in India is to increase supplies
of food to take care of its increasing population.
The United States and India are engaged in one
of the largest cooperative efforts ever undertaken
by two nations for economic development. A
community development program has been started
which will directly affect 11 million people in
16,500 Indian villages. The aim of this develop-

ment program is not only to increase food produc-
tion but, in addition, to improve conditions of life
in the Indian villages through measures to in-
crease the levels of health, education, and com-
munity services.

In this development program, projects are to
be modeled on the general lines of the Etawah
demonstration — an extension program, carried on
by American and Indian agriculturalists, which
resulted in a 46-percent increase in crop produc-
tion in 3 years. Schools were started, health and
sanitation conditions improved, roads built, and a
general boost in business activity resulted from
teaching, demonstration, and local organization of
activities in the villages.

To carry on the new community development
program, over 7,000 Indian workers are being
trained; they will be assisted by 120 Americans,
technicians, and administrators. The first of 55
community development projects are under way.

The Community Development Program In India

More Food

Better Living Conditions

If&fr*

55 projects under Point 4 sponsorship will have a direct effect on the farming
and living conditions of 11 million people in 16,500 villages.

• Local Labor

• Buildings

• Local Supplies

• Contracting
Services

• Local
Transportation

AGRICULTURAL DEVELOPMENT
Farm Demonstration Projects
Land Reclamation
Irrigation

Commercial Fertilizers
Quality Seeds
Improved Implements
Inland Fisheries
Credit Facilities

FREE EDUCATION
Elementary Schools
Vocational Schools
Adult Literacy Schools
Library Services

• Technical
Services

• Fertilizer

• Industrial
Materials

• Machinery

• Seeds

HEALTH ACTIVITIES

Disease Control

Sanitation

Clean Drinking Water

Health Clinics

COMMUNITY SERVICE CENTERS

Crop Storage
Marketing Centers
Veterinary Services
Health Centers
Machinery Maintenance

SMALL-SCALE INDUSTRIES
Small Tool Production
Sawmills
Brick Kilns
Raw Materials
Home Building

• Training
Centers

. 150,000 Acres - - .

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*"*<W. « 200,000 People

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After 3 years of joint operation, all 55 will be
taken over and operated entirely by the people
and Government of India.

The United States contribution, through the
Point 4 Program, to this vast undertaking consists
of the salaries, expenses, and equipment of the
120 American technicians, and, in addition, of
essential supplies and equipment for the pro-
gram— supplies which cannot be obtained in India
and for which dollar funds are needed. The con-
tribution of the United States amounted to about
$25 million at the end of June 1952. The Govern-
ment of India is putting up, in rupees, the equiva-
lent of almost $77 million which will pay the
salaries of the 7,000 Indian workers and all local
expenses of the project, including buildings, local
transportation, services of local contractors, and
similar expenses. The Ford Foundation is also
cooperating in this undertaking. It is assisting the
Indian Government to operate 30 training centers
to provide training for those who will work in the
villages and is paying all the capital costs involved
in this training.

The community development program in India
has five major parts :

1. Development of food and agricultural
resources. — This part of the program will take the
form of demonstration farms — including the use
of commercial fertilizer and high quality seeds
and use of improved farm implements, land recla-
mation, irrigation, the operation of credit facili-
ties, and the development of inland fisheries.

2. Free Education. — This has been scheduled
not only for elementary and secondary schools but
also for vocational schools, literacy classes for
adults, and free library services.

3. Improved Health. — In addition to health
clinics and public health measures to control dis-
eases, this part of the program calls for increas-
ing emphasis on improving sanitary conditions
and on obtaining and using clean drinking water.

4. Community Service Centers. — The plans for
these centers call for adequate facilities for
storing and marketing crops, veterinary services,
and centers for the maintenance of farm ma-
chinery.

5. Small-Scale Industry. — For 6 of the 55 proj-
ects, plans have been made for the development,
with Indian funds, of small-scale industries which
will employ surplus labor in producing simple

tools, building materials, and other supplies and
equipment needed for the entire program.

Less than half of the Point 4 funds for India —
$25 million out of a total of $54 million — are
allocated directly to the community development
program. Most of the remaining funds went
to projects connected with and supporting
the community development program including
$6.6 million for fertilizer, $9.4 million for steel
and equipment for wells, $2.2 million for iron and
steel to be used in making farm implements.
Other uses of the Point 4 fund in India were:
helping to complete irrigation works; developing
commercial fisheries in order to help meet the need
for protein food; controlling locusts; reclaiming
land made useless by the growth of Kans grass;
making soil surveys, and working to control ma-
laria.

India Grain Program. — From January to June
1952, the shipment of $63.1 million worth of wheat
and grain sorghums was authorized under the
"loan-aid" program to alleviate famine in India.
This brought total authorizations to $190 million —
the amount provided by the Congress — exclusive
of an additional $4.5 million of aid extended
earlier on a grant basis. Over 90 percent of the
grain has been shipped and paid for.

Pakistan. — In Pakistan, a development program
has been undertaken which is similar to the pro-
gram in India. During its first year, this pro-
gram was scheduled to be in operation in 1,000
villages and to affect the lives of some 600,000
people. The costs of the development program in
Pakistan during its first stages were jointly shared
by the United States — which is contributing about
$10.7 million in Point 4 funds — and the govern-
ment of Pakistan, which is putting up more than
that amount in rupees.

Plans have been worked out for teams of Amer-
ican and Pakistani technicians to help people in
the villages to improve their production of crops
and livestock, to better their conditions of health
and sanitation, and to develop their facilities for
basic education and vocational training. Planned
also was help to be given in the establishment of
three types of cooperatives — marketing, purchas-
ing, and credit.

During the first half of 1952, work was started
to meet the urgent need in East Pakistan for
transportation facilities. In the valleys of the

Ganges and Brahmaputra rivers, floods had swept
away roads and bridges and left thousands of
farmers in hundreds of villages cut off from mar-
kets.

The United States, through the Point 4 Pro-
gram, agreed to supply Pakistan with 10,000 tons
of fertilizer to use in farm demonstration projects.
During the first year of use, for every ton of fer-
tilizer properly applied, grain production should
rise by 2 tons. In addition, the Point 4 Program
in Pakistan provided technical advice and finan-
cial assistance to start a fertilizer factory which
will produce 50,000 tons of ammonium sulfate a
year.

Among other activities undertaken in Pakistan
during the first 6 months of 1952 were such varied
projects as the initiation of forestry research lab-
oratories to teach timber conservation and refor-
estation, and better methods of timber extraction
and utilization; preliminary work toward the es-
tablishment in Pakistan of a banking system sim-
ilar to the Federal Reserve System of the United
States; and the establishment of a central statis-
tical bureau.

Afghanistan. — In Afghanistan, the Point 4 Pro-
gram took the form of advice to the Afghanistan
Ministry of Mines on how to increase the output
of coal mines and assistance in more effective
marketing and utilization of coal. Technicians
from the United States helped to install better
safety methods and more efficient production
methods. The coal mines of Afghanistan are
slope mines. Until recently the only way to get
the coal out was in baskets — on the heads of coal
miners who had to walk 1,000 to 5,000 feet up the
slopes from the face of the mine to the entrance.
In one such mine, Point 4 technicians helped the
government of Afghanistan to install a Diesel-
powered hoist-and-scoop to haul the coal out, leav-
ing the miners free to work at the face. Measures
such as these are a long way from "modernization"
of the Afghanistan coal mines ; they are, however,
a start. In Afghanistan, as elsewhere, once such
starts are made with United States assistance,
and favorable results are apparent, the programs
are taken up and continued by people in the coun-
try concerned.

The Technical Cooperation Administration and
the Afghan Government were working out plans
for a joint program to make the best use of land

soon to be brought under cultivation by new water
control facilities in the Helmand river valley.

Nepal. — In Nepal, specialists in agriculture
from the United States were assisting the Govern-
ment of Nepal to set up a program of agricultural
education. The United States technicians trained
Nepalese to continue and enlarge the program.
Similar cooperative activity in the fields of health
and sanitation was started.

As part of the program to assist underdeveloped
nations to increase their economic well-being by
development of their natural resources, an Ameri-
can mining engineer, working for the Point 4 Pro-
gram, began work to evaluate the deposits known
to exist in Nepal of lead, zinc, cobalt, gold, and
copper as well as salt and limestone, and to rec-
ommend methods for developing these resources
on a commercial basis.

Southeast Asia

In Southeast Asia (the Associated States of
Indochina, Burma, Indonesia, the Philippines, the
Republic of China on Formosa, and Thailand),
economic and technical assistance from the United
States has been administered by the Mutual Se-
curity Agency. The objective of such assistance
is to help these nations build the economic founda-
tions of independence.

Among the needs of the nations in Southeast
Asia are the development of trained leaders and
technicians, the establishment of adequate pub-
lic services in fields such as health, agriculture,
education, transportation, and communications.
Needed also are means to open the way for encour-
aging private enterprise and private investment.

In Southeast Asia, the Mutual Security Pro-
gram has supplied technical assistance to demon-
strate methods of increasing agricultural yields,
to establish needed manufacturing industries, to
start practices which lead to better health and san-
itation, and to train the citizens of the various na-
tions in needed skills. In addition, the Mutual
Security Program has financed the import of es-
sential commodities such as fertilizer, raw cotton,
bread grains, machinery, and chemicals which are
needed to increase the productive capacity of the
nations concerned, to reduce threats of inflation
caused by military programs, and to improve basic
economic facilities.

The Free World Needs The Raw Materials And Food Of Southeast Asia

PACIFIC OCEAN

COPRA

The Philippines

ABACA

PETROLEUM

RUBBER

During the first 6 months of 1952, payments of
$73.6 million were made by the Mutual Security
Agency for goods and services supplied by the
United States to Southeast Asia. Between June
5, 1950 (the date of enactment of the China Area
Aid Act of 1950) and June 30, 1952, a total of
$330.5 million was made available to the Mutual
Security Agency, and its predecessor, the Eco-
nomic Cooperation Administration, for the pro-
gram in Southeast Asia. By the end of June
1952, the entire amount of funds had been ear-
marked for specific assistance, and actual pay-
ments of $177 million had been made.

The Associated States of Indochina. — In the
Associated States of Indochina the major aim
of the programs of technical and economic as-
sistance is to complement the program of mili-
tary assistance. Many projects for improving
economic and social conditions are of direct as-
sistance to the military effort in Indochina. High-

ways and ports, needed for military as well as
civilian use, were rehabilitated or improved dur-
ing the first 6 months of 1952. Help was given to
increase production of food and clothing. In
addition, medicine, food and clothing were sup-
plied for emergency relief of war refugees.
During the latter part of the period under review,
the emphasis of measures for refugee relief were
shifted from the provision and distribution of
vital necessities to longer-term projects. A start
was made in locating refugees on abandoned farm
lands and employing them in small industry.

By helping the people of Indochina to achieve
better health, more food, and economic stability,
the economic and technical assistance programs
of the Mutual Security Agency helped to
strengthen the will and ability of the Indochinese
to fight the Communist insurgents, and in this way
the program aided the military effort.

The Economic Program For Southeast Asia

Technical Assistance ....

Mass Educ Specialists
Vocational Advisory

1 Engineer;

'vationists etc

Malanologists

Sanitary Engineers
Public Health Nurses
Pathologists
Pharmacologists
Health Educators etc

319 Technical Experts Were Sent
To Southeast Asia Thru June 30,1952'

And Supplies

Paid Shipments2
June 5,1950 Thru June 30, 1952

( Millions Of Dollars)
10 20 30

Cotton

Machinery
8 Vehicles

Pots a
Oils

Basic
Textiles

Petroleum
a Products

Iron a Steel

I InclMtd. Items)

Chemicals a
Related Prods.

Bread
Grains

1 Alio, 315 local people wee brought from countries tor training, r

2 Excludes $17 million for freight and t

In the field of health, much progress was made
in controlling the eye disease trachoma, which, if
not treated, causes blindness. Of the iy2 million
cases of this disease existing in Indochina, more
than 200,000 have already been arrested or cured.

Programs have been undertaken to improve and
increase food production through irrigation and
through better fertilization. In one irrigation
project, the Sontay project in Tonkin, an invest-
ment of $75,000 worth of Diesel engines and ac-
cessory equipment — supplied by the Mutual
Security Agency — brought 25,000 acres of rice
land under irrigation. As a result, the area can

now produce two crops of rice a year instead of
one. Work is under way to rehabilitate an addi-
tional 45,000 acres of rice land.

In 1951, about 14,500 tons of fertilizer were dis-
tributed to 500,000 farm families. Use of the
fertilizer made possible an increase of 100,000 tons
of food crops and demonstrated to the Indochinese
farmers the value of better fertilizing methods.
Approximately 8,500 tons of fertilizer — to be used
almost exclusively on rice — were scheduled for
distribution in 1952.

Burma. — One of the principal problems in
Burma is the need to increase the output of rice.
Before World War II, Burma was the world's
largest exporter of rice. However, during the
postwar years shipments of rice from Burma to
other countries have been less than one-half of
prewar.

The Mutual Security Agency continued, during
the first half of 1952, its work with the Burmese
Government on ways to increase the output of rice
through improvements in seed, and control of in-
sects and plant diseases. In addition, assistance
was furnished to improve techniques of processing
and storing rice and in these ways to assure an
increase in the amount of rice available for con-
sumption. Additional measures such as the reha-
bilitation of Burmese ports, especially Rangoon,
and a general improvement of transportation
facilities, are aiding in the program to step up
rice exports.

In the industrial field, a comprehensive economic
and engineering survey continued; this was fi-
nanced by the Mutual Security Agency. The
objective of the survey is to determine the best
means for developing mining, transportation,
communications, and industry in Burma. The
final result of the survey — a preliminary report
has already been issued and is under study — was
scheduled to serve as the basis for working out
part of a program to develop Burmese resources
during an 8-year period.

Although aid to Burma was suspended during
most of January and part of February 1952, pend-
ing completion of negotiations for assurances re-
quired by Section 511 of the Mutual Security Act
of 1951, the program thereafter was continued, and
substantial progress was made, particularly in the
fields of health and agriculture.

Indonesia. — Since obtaining its independence,
Indonesia has made great efforts to train tech-
nicians to administer its vast territories, to achieve
higher standards of health, to develop more edu-
cational facilities, and to acquire better production
methods. Assistance from the United States un-
der the Mutual Security Program has been de-
signed to mesh with the development programs
of the Republic of Indonesia.

During the period under review, agricultural
technicians from the United States worked with
the rice farmers of Indonesia to demonstrate the
use of fertilizer and to assist in the reclamation of
swamp land for use in cultivating rice. Other
programs to increase the production of agricul-
tural products involved the distribution of im-
proved hand tools, the supplying of simple equip-
ment for processing sugar cane and rubber on
small plantations, and technical assistance to im-
prove the strains of food plants and to control
the diseases of plants and livestock. Assistance
was given also in strengthening services provided
by village cooperatives, services such as provision
of credit and the pooling of marketing or
purchasing.

Indonesia suffers from a serious shortage of
protein foods. To help remedy this situation, the
Mutual Security Agency provided Diesel-powered
fishing boats which assisted the Indonesian fisher-
men to quadruple their catch. Some 75 of these
Diesel-engined boats, plus an additional 100 Diesel
engines for use in Indonesian-built vessels, were
provided by the Mutual Security Agency. These
boats and engines were expected to cause an in-
crease of nearly 9 million pounds a year in the
fish catch. Results have already been substantial,
and the Indonesians, having seen what can be done
with modernization of their fishing fleet, have
planned to undertake their own program for
power-driven boats, with only marginal aid from
the United States.

In the fields of health and education, substantial
progress was made in controlling malaria ; schools
to train nurses were set up; instructors were sup-
plied to train Indonesians to become teachers of
the English language. (In Indonesia, English has
replaced Dutch as the official foreign language.)

To help Indonesia with its industrial problems,
a firm of American engineering consultants was
employed under a contract financed by the Mutual

Security Agency and has been working with the
Indonesian Government in the fields of transpor-
tation, rehabilitation of ports and railroads and
industrial development.

Philippines. — The Mutual Security Agency is
working with the Government of the Philippines
in carrying on an economic program emphasizing
increased production of agricultural commodities.
In the first 6 months of 1952, work continued on
programs to bring more farm areas under irriga-
tion, to improve methods of applying fertilizer
and to bring about the use of agricultural tech-
niques which result in greater yields per acre.
Progress was made in checking the spread of
mosaic disease — a disease which reduces the pro-
duction of abaca, the plant which yields manila
hemp. During the period under review, the
Mutual Security Agency supplied funds which
enabled the University of the Philippines to sign
a contract with Cornell University to provide
technical assistance to the College of Agriculture
in the University of the Philippines.

Progress continued in the working out of home-
steader programs. On the Island of Mindanao,
extensive tracts of arable land are being opened
for settlement. To assist in this process, the
Mutual Security Agency has helped the Philippine
Government to develop roads, to establish meas-
ures for the control of malaria, and to simplify
procedures for title registration. Surveying
parties were sent out to classify and subdivide
the tracts in order to speed the opening of land
to homesteaders. When complete, this home-
steader project will provide an opportunity for
peojile to move from overcrowded areas and will
provide, to thousands of Filipino families, in-
creased means of self-support.

Through other projects designed to raise the
level of health, the Mutual Security Agency pro-
vided aid to rehabilitate hospitals, to increase the
availability of medical attention, and to establish
programs to train Filipinos to carry on activities
needed in the field of public health.

Republic of China on Formosa. — During the
first 6 months of 1952, the Mutual Security Agency
supplied to the Republic of China on Formosa
materials, equipment and technical aid in order
to achieve a threefold goal: (1) to support the
military effort; (2) to hold down inflationary

pressures; and (3) to increase production and ex-
pand needed industries and- public services.

During the first 6 months of 1952, $45 million
was paid for supplies and services supplied to
Formosa under programs approved by the Mutual
Security Agency. During the 12-month period
ending June 30, 1952, a total of $81.5 million was
obligated for the economic program on Formosa.
This amount was about 49 percent of the total
for this type of aid to the countries of the Asia
and Pacific area.

Many of the materials shipped to Formosa are
called "common-use items" — that is, items which
can be used by the military forces and the civilian
population. Aside from the "common-use items,"
most of the commodities sent to Formosa were
intended to assist that country to increase its
agricultural and industrial production. Fertil-
izer was provided to increase the output of rice
and sugar cane; raw cotton and machinery were
sent to develop the textile industry; machinery
was sent to aid in the development of the cement
industry; and construction equipment was pro-
vided to assist in the building of highways, rail-
roads, harbors and electric power plants.

During the first 6 months of 1952, a number of
important projects were completed. In Hsinchu,
on the northwest coast of Formosa, the construc-
tion of an electric power substation was finished.
This substation now adds power capacity which
was needed for the operation of the fertilizer
plant and other industrial installations in the
area. At the Port of Kaohsiung, the best deep-
water pier on Formosa has been rebuilt with the
assistance of counterpart funds released by the
Mutual Security Agency. To improve the trans-
portation system in Formosa, a bridge, 6,500 feet
long, is being erected at Silo. The first 20 steel
spans — in a series of 31 — were put in place. When
complete, this bridge will link the northern and
southern highway systems of Formosa.

The Joint Commission on Rural Reconstruction
continued its program in the farm areas of For-
mosa. Among the activities carried on by the
Joint Commission were the distribution of im-
proved rice seeds, the rehabilitation of warehouses
belonging to farmers' associations, projects for
increased irrigation of land, sales of public land
to those who had been tenant farmers, reforesta-
tion, and the planting of windbreaks.

As a result of activities undertaken by the
Chinese Government and of assistance supplied
by the Mutual Security Agency, there was some
improvement in the economic situation in For-
mosa during the first 6 months of 1952, and en-
couraging progress was made in controlling
inflation. However, Formosa will face for a long
time to come the problem of supporting an
abnormally heavy military burden. Military
costs account for 80 percent of the national
budget, and for nearly 50 percent of the con-
solidated national, provincial and local govern-
ment budgets. In addition, Formosa must cope
with the needs of a steadily increasing population.
Solution of this problem is made more difficult
because almost all of the arable land is now in
use, and there is little opportunity for internal
migration or emigration to relieve the pressure
of the growing population.

Thailand. — A large proportion of the program
which the Mutual Security Agency carried on in
Thailand during the first 6 months of 1952 con-
sisted of technical assistance projects, including
the services of American technical experts and the
training of the citizens of Thailand.

To increase the production of food, especially
rice, work continued on a series of irrigation proj-
ects in the northeast region of Thailand. As a re-
sult of more irrigation, an increase of 24,000
metric tons of rice was expected in the year end-
ing June 30, 1952 — this in addition to an increase
of 10,000 metric tons which had been achieved in
the year which ended in June 1951. As another
means of increasing the supply of rice, large-scale
plant breeding experiments continued. Through
these and other measures, it was anticipated that
the exjjorts of rice from Thailand will increase
by about 1 million tons a year.

To improve the health of the population, many
citizens of Thailand have received training in
esential public services, not only in cities, but also
in the country. For example, work continued on
the program to train men and women in the con-
trol of trachoma and other inflammatory eye dis-
eases which afflict large portions of the population.
Under similar programs, many hundred Thais
have been trained in the control of malaria.

To help the Thai Government carry on essential
governmental functions and to train its own ad-
ministrators, the Mutual Security Agency ini-

MSA Has Released $116 Million Of
Far East Counterpart Funds

For The Period June 5, 1950-June 30, 1952

(Dollar Equivalents, In Millions)
10

Military
Construction
6V Materiel

Transportation,
Power, 8 Other
Public Works

Agriculture,
Forestry, 8
Fisheries

Joint Commission
On Rural
Reconstruction

Public Health

Public
Administration

Education 1

Emergency
Relief

General
Engineering

Handicraft, Manu-
factures, Mining,
8 Other Industry

Technical
Assistance 8r
Miscellaneous

1 Primarily adult and vocational education

2 No For East counterpart released lo Indonesia at of June 30, 1952.

tiated a program of public administration under
which the Thai Government will receive advice
and assistance from American experts in the fields
of budget preparation, civil service procedures,
and taxation. Provision was made also for Thais
to receive training in the United States.

Counterpart Funds. — The provision of the
Mutual Security Act of 1951 regarding the de-
velopment and use of counterpart funds 3 applies,
with some variations, to the Far East as well as
to Europe. All the countries deposit local cur-
rency in a special account from which withdrawals
can be made for mutually agreed purposes. De-
posit requirements, however, have been tailored to
conditions existing in the particular countries.
In the case of Thailand, all counterpart deposits
are commensurate to the value of MSA aid and
are derived directly from the Government budget.
On the other hand, certain countries in the Far
East, particularly Formosa and the Associated

3 See page 11.

States of Indochina, are confronted with serious
budgetary deficits, and in these countries the Mu-
tual Security Agency finances the importation of
commodities essential to the economy which are
then sold in the domestic markets. The local cur-
rency obtained from these sales is placed in the
special counterpart accounts and thus finances
local expenditures without generating inflationary
pressure. Further, such imports also ease the dol-
lar shortages in these countries.

From the start of the Far East program on
June 5, 1950, to June 30, 1952, the Far Eastern
countries have deposited the equivalent of $136
million in their counterpart accounts. The equiv-
alent of $4 million (about 3 percent of deposits)
has been transferred to United States disbursing
officers for use in meeting MSA administrative
costs payable in local currencies. A total of $132
million remained to finance development pro-
grams of the depositing countries.

During the period January 1 through June 30,
1952, the Mutual Security Agency released the
equivalent of $65 million from the counterpart ac-
counts to finance approved projects in the Far
Eastern countries — bringing to $116 million the
amount released since the inception of the
program.

In the Associated States of Indochina, counter-
part funds have been released for the maintenance
and repair of highways and other public works —
many of which serve military as well as civilian
needs — and to help pay the local expenses of proj-
ects in the fields of agriculture and public health.
Substantial amounts of counterpart have been
used to provide food, clothing, and temporary em-
ployment for war refugees.

In Burma, almost one-half of the counterpart
funds released by June 30, 1952, had been used to
help pay for low-cost housing and the rehabilita-
tion of the port of Rangoon. Other counterpart
funds were used to pay for the local costs of im-
portant health programs.

In Indonesia, as of June 30, 1952, no funds had
been released from the Indonesian counterpart
account. At that time, discussions were under way
between the United States and the Government of
Indonesia concerning a program to make use of the
counterpart funds built up as a result of aid re-
ceived by Indonesia while that nation was a de-
pendency of the Netherlands.

In the Philippines, most of the counterpart
funds released by the Mutual Security Agency
were used to assist in land settlement, rural devel-
opment and increasing agricultural production.

In the Republic of China on Formosa, counter-
part funds have been used extensively to pay for
the construction of military installations and for
the production and procurement of materiel for
the armed forces.

In Thailand, most of the counterpart funds were
used to help pay for programs to increase the pro-
duction of food and programs to raise the level
of health.

Korean Relief and Rehabilitation

It is the established policy of the United
States to provide economic assistance for the
Republic of Korea by making contributions to the
United Nations Korean Reconstruction Agency
(UNKRA) which was established in December
1950 by the General Assembly of the United
Nations to provide relief and rehabilitation in
Korea. The over-all purpose of UNKRA's
economic assistance program is to help the Korean
people in their own efforts, first to provide the
basic necessities of life and then to restore a self-
sustaining economy.

During the continuance of hostilities in Korea,
the Unified Command has the primary responsi-
bility for emergency direct civilian relief. After
the cessation of hostilities, and as soon as military

circumstances permit, such responsibility will be
transferred to UNKRA in addition to its present
responsibility for longer term rehabilitation.

Projects which have been either instituted or
completed by UNKRA include the provision of
fishing nets urgently needed for augmenting the
food supply, and the importation of poultry and
farm animals. In addition, UNKRA is employ-
ing and paying staff personnel being furnished to
the United Nations Civil Assistance Command
during the period while that Command is respon-
sible for emergency direct civilian relief. In this
way, UNKRA is able to give immediate help in
this program of emergency relief, as well as to in-
sure an efficient and swift change-over when
UNKRA assumes responsibility for such relief.

The United States representatives to the Gen-
eral Assembly of the United Nations have
pledged, and the Congress has authorized the
contribution of $162.5 million as the United States
share of the initial $250 million planning budget
of UNKRA. Against the United States contri-
bution of $162.5 million, the Congress has author-
ized $45 million in new funds, reappropriated
$51.5 million carryover of unobligated ECA funds,
and authorized the turn-over of supplies in the
military pipeline to UNKRA which to date has
an estimated value of $66 million. Of the amount
pledged by the United States, $10 million was
disbursed to UNKRA in the year ending June 30,
1952.

CHAPTER V

American Republics

'"P HE objective of the Mutual Security Program
-*- in Latin America is to assist in the development
of strong, self-reliant, and freedom-loving na-
tions, able and willing to cooperate in building a
strong, peaceful and free world. Aid from the
United States is helping to increase productivity,
to raise living standards, and to build political,
economic, and military strength.

Basic weaknesses in Latin America today make
for political and social instability. The size of
the population of Latin America is roughly equal
to that of the United States. The level of well-
being is not. The people of Latin America are
determined to eradicate conditions of poverty,
ignorance, and sickness.

Through the Mutual Security Program, the
United States is helping these nations attack their
basic problems. Military assistance to Latin
America is furnishing additional materiel and
training to permit these countries to fulfill their
role in the common defense of this hemisphere.
Programs of technical cooperation — through im-
proving productivity and improving the ability
to make effective use of resources — help attack the
causes of unrest.

Military Assistance

Under the Mutual Security Act of 1951, the
Congress provided $38.2 million for "grant aid" —
as distinguished from "reimbursable aid" — for
military assistance to the American Republics.
The Act provides that such "grant" assistance may
be furnished only after a finding by the Presi-
dent that plans for the defense of this hemisphere
require the participation of other American Re-
publics in missions important to such defense,
such as protection of sea lanes and lines of com-
munication and the defense of strategic areas
against sea and air attack.

Early in December 1951, the President made his
finding that the plans for the defense of the hemi-
sphere required the participation of certain other
American Republics in missions important to that
defense. At the same time, the President author-
ized the initiation of negotiations with the gov-
ernments of any of the countries he named for
the purpose of concluding bilateral agreements
to make these countries eligible for grant military
aid. Negotiations were initiated in January and
early February with the governments of Brazil,
Chile, Colombia, Cuba, Ecuador, Mexico, and
Peru, and in late March with Uruguay. At the
end of June 1952, the status of bilateral military
agreements was as follows :

Country

Date signed

Effective date

Ecuador

Peru _ _

Cuba .

Brazil

Feb. 20, 1952
Feb. 22, 1952
Mar. 7, 1952
Mar. 15, 1952
Apr. 9, 1952
Apr. 17, 1952
June 30, 1952

Feb. 20, 1952.
Apr. 26, 1952.
Mar. 7, 1952.
When ratified.

Chile

Colombia

Uruguay.

When ratified.
Apr. 17, 1952.
When ratified.

The Latin American Republics are partici-
pating financially in this hemispheric program of
military build-up. As of June 30, 1952, orders
for the purchase — under Section 408 (e) of the
Mutual Defense Assistance Act of 1949, as
amended — of approximately $41.8 million of mili-
tary equipment had been received from these
countries. Furthermore, most of the Latin
American countries have entered into contracts
for United States training missions to advise and
assist their military establishments. The expenses
of these missions, except for the pay of United
States military personnel, are borne by the partici-
pating countries.

Technical Cooperation
Assistance

The program of technical assistance in Latin
America has been the model for Point 4 activities
in the rest of the world. The program started
10 years ago and is now carried on by the Tech-
nical Cooperation Administration through its In-
stitute of Inter- American Affairs (IIAA) in the
Department of State. Since 1942, the chief pur-
pose of technical cooperation in Latin America
has been to teach people how to fight disease, how
to install sanitary facilities, how to grow more and
better food, how to improve school systems, and
how to acquire vocational skills.

During the first 6 months of 1952, programs
were carried on in 19 of the Latin American
countries : Bolivia, Brazil, Chile, Colombia, Costa
Rica, Cuba, Dominican Republic, Ecuador, El
Salvador, Guatemala, Haiti, Honduras, Mexico,
Nicaragua, Panama, Panaguay, Peru, Uruguay,
and Venezuela. In addition to basic programs in
the fields of health, sanitation, food supply and
education, activities under the Point 4 Program
now include technical assistance in developing

natural resources, housing, transportation and
communications, industrial and managerial tech-
niques, public administration, and other activities
important to economic development.

Technicians from the United States supervise
the setting up and operation of each Point 4 proj-
ect until such time as nationals of the various
Latin American countries are able to assume com-
plete responsibility.

Between January 1 and June 30, 1952, a total
of 170 additional technicians were assigned to
Latin America. Among them were 41 experts in
agriculture and natural resources; 36 specialists
in the fields of health, welfare and housing; 23
educator's; 14 specialists in other fields, including
tariff and customs, census, public administration,
transportation and industry; 11 program officers;
16 staff members of joint economic commissions;
and 29 administrative staff members.

In order to carry out the policy of the United
States of developing integrated country-wide de-
velopment programs in each country in which
Point 4 operates, the position of country director
of technical cooperation was established to super
vise all Point 4 activities in the country. During

Point Four Is A Partnership Arrangement

The Latin American Republics Have Steadily Increased Their Share Of Project Costs As The Programs Mature

(Millions Of Dollars)

Continuation of
Old Programs ~

Contributions to IIAA Projects

1952 Program
$46 9 Million

1943

1 Acluol obligations incurred for all Point Four programs. Under the
reorganization of The Institute of Inter-American Affairt, this Agency
■ : responsible for all technical assistance activities in Latin America.

the first 6 months of 1952, directors of technical
cooperation have been appointed to the following
countries : Bolivia, Brazil, Chile, Colombia, Costa
Rica, Dominican Republic, Ecuador, El Salvador,
Haiti, Honduras, Mexico, Nicaragua, Panama,
Paraguay, Peru, and Uruguay.

An important part of the Point 4 Program is
the training of local nationals to take over the
operation of individual programs. In coopera-
tion with United States Government agencies,
grants for advance training in the United States
are regularly made to qualified Latin Americans.
During the first 6 months of 1952, for example,
232 training grants were approved in the fields
of agricultural and natural resources research and
development. These authorizations include train-
ing in such fields as agricultural mechanization,
grain storage, fuel technology, entomology, fish-
eries administration, forestry, economic geology,
agricultural statistics, rubber research, irrigation,
and soil conservation.

During the first half of 1952, 124 grants were
approved for Latin American educators for ad-
vanced training in the United States. The Insti-
tute of Inter-American Affairs, assisted by the
University of Maryland, is conducting an experi-
ment in Point 4 cooperation in which 27 of the
teacher trainees from rural elementary schools
of Peru, Bolivia, and Ecuador are participating.
The project embodies a cooperative workshop in
which the teachers, with the help of faculty mem-
bers from the University of Maryland, work to-
gether to gain a better understanding of the needs
of children in their own home communities.

In the fields of health, welfare, and housing,
128 citizens of Latin American nations received
training grants under the Point 4 Program in the
first 6 months of 1952. Those receiving ad-
vanced training include doctors, nurses, and lab-
oratory technicians. There are also 290 trainees
in the fields of government administration and
technical services. Thus, the total number of
trainees authorized for this 6-month period is 774.

The new cooperative housing program spon-
sored by Point 4 accomplished tangible results.
Work in the earthquake-devastated areas of
Ecuador supplies a good example. In the prov-
inces of Tungurahua, Cotopaxi, and Chimboraso,

the cooperative Servicio,1 which is Ecuador's op-
erating agency for the technical assistance pro-
gram, directed the planning and construction of
new facilities to house ultimately 4,500 families.
It continued work already started by the Pan
American Union and Ecuador's agency in charge
of construction in the cities of Ambato, Pillaro,
and Pelileo and, in addition, is preparing to work
in other communities.

Funds for the housing program in Ecuador
were received both directly from the government
of Ecuador and from the Export-Import Bank,
which set up a credit of $800,000 to be used for
imported materials needed to build and equip the
dwellings that are being constructed. The coop-
erative Servicio was requested to assume the re-
sponsibility for planning and developing the
remaining portions of the reconstruction pro-
gram, including general community facilities such
as schools, health centers, and public laundries.

An educational project now being carried on
in Honduras indicates the community of interests
in the fields of agriculture, housing, and educa-
tion. An agricultural school is being provided
at Catacamas. The school is being set up under
the direction of the Honduras Ministry of Agri-
culture to teach improved agricultural methods.
Housing technicians are planning and will super-
vise the building of the school. The United
States was asked to provide, under the Point 4
Program, a director of education and to assist in
developing the curriculum.

Other outstanding education projects in Hon-
duras included the building of a new rural normal
school and the establishment of a series of work-
shops in which selected groups of rural elementary
teachers have been taught better teaching methods.

Modern agricultural knowledge and training is
being applied through Point 4 in developing vast
areas that have been little disturbed by hoe and
machete in hundreds of years. These activities
run the gamut of resource development — geology
and mining, water power, irrigation, land manage-
ment, and various combinations of agricultural
operations.

1 The Servicio is a joint administrative body composed
of experts of both nations.

On the eastern slope of the Andes Mountains
in South America, surveys have been started for
the development of resources that could provide
rich, fertile, irrigated farms, hydroelectric power
and diverse industrial development. In Central
America and in the Caribbean area, fundamental
changes in the utilization of natural resources are
also taking place.

In Paraguay, prior to 1947 there was neither a
commercial nor a governmental source of seeds.
Year after year the best crops were sold, leaving
weakened plants to produce the seed for the coming
year. The quality of crops therefore degenerated.
In 1947, the Institute of Inter- American Affairs
made approximately 50,000 pounds of healthy
new seeds available. By 1952, more than 4 mil-
lion pounds of 87 varieties of improved seeds.
for major crops were being distributed annually
to more than 10,000 farmers.

In Guanacaste Peninsula and Tempesque Valley
in Costa Rica, in Pucallpa on the eastern slope of
the Peruvian Andes, in Brazil's fertile Sao Fran-
cisco Valley and in Paraguay's Piribebuy, pilot
projects have been started which are pointing the
way to a new agricultural economy.

In other countries, projects are beginning to
meet specific problems, such as the Artibonite Val-
ley development in heavily populated Haiti where
the gap between crop production and food needs
is being narrowed. Because of the need for using
every foot of cropland to feed more than 3 million
people in that tiny, Vermont-sized country, farms
in the Artibonite Valley were abused and over-
worked to the point of uselessness.

Aided by the Institute, the Bois Dehors experi-
mental and demonstration farm applied today's
modern practices— first on 200 acres of rice land.
And, as the hard-working Haitians produced
more, 400 acres were taken over. Now farmers
on 2,000 adjoining acres have learned that hunger
is not a necessary part of life.

In Brazil, a Joint Brazil-United States Com-
mission for Economic Development has been set
up. It has two functions : (1) it studies the devel-
opment needs of Brazil and makes recommenda-
tions for a well-rounded program; (2) it acts as
the planning and programing agency for the
bilateral Point 4 program. In the latter function,
individual projects of technical cooperation,

through the Institute of Inter- American Affairs,,
comprise one of the most diverse and extensive
country programs. The present head of the
United States section of the Joint Commission
also serves as the Institute of Inter-American
Affairs Director of Technical Cooperation in
Brazil.

The Joint Commission is trying to fulfill the
objectives outlined by a precedent-setting joint
survey on how two nations can cooperate for
economic development and mutual security. Since
its inception as a working body in July of 1951, the
Joint Commission has recommended loans to the
World Bank and the Export-Import Bank princi-
pally for railroad and power development. Loans
have already been granted to the extent of approxi-
mately $100 million. The over-all value of pro-
jects recommended in hardly more than a year,
including local financing, indicates that substan-
tial progress has been made.

Looking forward to the time when it will not
need such a joint operation, Brazil recently
established the National Bank for Economic De-
velopment, which is expected to call upon Point 4
advisers to provide technical assistance for fur-
ther development. The Brazilian Bank will pro-
vide the local currency financing while the Ex-
port-Import Bank of Washington and the Inter-
national Bank for Reconstruction and Develop-
ment will be asked to provide loans as in the past.

In Latin America, as in other areas of the world,
many other departments of the United States
Government are helping to carry on the Point 4
Program :

The Department of Agriculture provides tech-
nical assistance in all phases of agriculture.

The Department of Commerce provides tech-
nical assistance in civil aviation, maritime admin-
istration, statistics, highways, government weather
services, testing and standards, mapping and sur-
veying, patent office organization, and small in-
dustry development. Training in these fields is
also provided by the Department of Commerce.

The Department of Labor provides technical
assistance in the fields of industrial safety, labor
law administration, apprenticeship training in
various industries, labor-management relations,
labor standards, and workers' education.

The Department of the Interior is directly in- The Federal Security Agency is active in the

solved in the Institute of Inter-American Affairs area of community planning and public health

training program, through arrangements made for training.

training nationals in Puerto Rico. It is also as- The Bureau of the Budget handles the trainees
sisting in the fields of geology, mineralogy, hydro- in public administration. Included in that gen-
electric power, sources of water supply, and rec- eral category is training in such fields as fiscal
lamation. and personnel administration.

CHAPTER VI

Other Parts of the Program

ANUMBEK of activities under the Mutual Se-
curity Program cannot properly be grouped
on a regional basis. A report on these activities
is contained in this section.

The Benton Amendment

In enacting legislation for the Mutual Security
Program, Congress set forth its policy that the
Program be administered in such a way as to
promote the participation of private free enter-
prise abroad, discourage monopolistic business
practices, and encourage the development of free
labor unions. This triple policy, which is popu-
larly referred to as the Benton amendment, is
being carried forward along several lines of
action.1

Encouragement of Free Enterprise. — In Feb-
ruary 1952, an Interagency Committee for Private
Participation in Foreign Economic Development
was formed for the two general purposes of ad-
vising the Director on carrying out the policy of
Congress and of facilitating cooperation among
the various agencies whose activities can con-
tribute to achieving the objectives of this policy.

The following agencies are represented on the
committee: the Departments of State (including
the Technical Cooperation Administration),
Treasury, Defense, Interior, Agriculture, Com-
merce, and Labor, the Office of the Director for
Mutual Security, the Mutual Security Agency, the
Defense Materials Production Agency, the Securi-
ties and Exchange Commission, and, in an asso-
ciate capacity, the International Bank for Recon-

"To carry out the purposes of the Benton amendment,
the Mutual Security Act of 1952 provides for the estab-
lishment of a revolving fund of $100 million of local cur-
rency counterpart funds. This provision is known as the
Moody amendment.

struction and Development. The belief is quite
generally held among members of the committee
that the greatest hope for decreasing the obstacles
to the flow of capital lies within the control of the
capital-deficit countries themselves. The commit-
tee has recommended, after extensive discussion,
that the Mutual Security Agency and the Techni-
cal Cooperation Administration, with the coopera-
tion of the Departments of State and Commerce,
initiate intensified programs in a few selected
countries for encouragement of private enterprise.
On the basis of the results obtained, an appraisal
can be made of the effectiveness of various tech-
niques. Countries to be selected would be repre-
sentative of different types of underdeveloped
areas and would be countries which themselves
desire and request such activity.2

The Interagency Committee has been giving its
support to the recent activities of the Organization
for European Economic Cooperation in the field
of encouraging private enterprise. An OEEC
committee of private experts has been working in
Paris to report and make recommendations to the
Organization and its member countries concerning
the encouragement of private capital investment
in the African territories south of the Sahara.3
Three representatives were sent from the United
States. The report was scheduled to be completed
during the last half of 1952.

The Mutual Security Agency and the Technical
Cooperation Administration have been conducting
an international "Contact Clearing House" service
to stimulate an increase in the investment of

2 As of September 1952, arrangements were being made
for several such trial programs.

3 During the summer of 1952, discussions were started
with the governments of two European nations to see
how such cooperative efforts might be carried on most
effectively.

American private capital in other nations. This

service informs, encourages, and helps United

States investors to explore investment possibilities

Discouragement of Restrictive Practices. — The

Mutual Security Program includes a number of
broad efforts both to provide greater incentives
for competition and to discourage the growth
of monopolistic business practices in Europe.

Considerable progress has been made in the de-
velopment both of official and public support
abroad for action to meet the problem of restric-
tive business practices and to create more com-
petitive economies. As indicated in the Depart-
ment of State's report to the Senate Select
Committee on Small Business on "Foreign Legis-
lation Concerning Monopoly and Cartel Prac-
tices", practically every European country is
giving more serious consideration to these prob-
lems than ever before. Most of them are actively
considering, or have recently enacted, some form
of antitrust legislation.

This development is due in considerable meas-
ure to the repeated efforts of the United States
in constantly stressing the need for developing
more competitive and productive European econo-
mies. Officials of the Department of State and the
Mutual Security Agency, both in the United States
and in Europe, have contributed to the building
up of this interest over a long period of time and in
many different ways. They have discussed re-
strictive business practices in connection with such
international projects as the Havana Charter and
the Schuman Plan, in connection with United
States aid, in speeches and informational releases,
and in general conversations with foreign officials
and private citizens. The statement of congres-
sional policy contained in the Benton amendment
has been of great value in providing support for
programs to eliminate restrictive business prac-
tices and develop more competitive European
economies.

By supporting the European Payments Union,
the program for trade liberalization, the Schuman
Plan, and like measures to promote European inte-
gration, the United States contributes to the elimi-
nation of a network of currency restrictions and
the lowering of trade barriers between nations.
Such measures help open European markets to
the forces of competition and free enterprise.

Several projects in the Mutual Security
Agency's technical assistance program support the
development of national legislation to curb cartels.
Special teams, studying the legal, economic, and
other phases of this subject have come to the
United States from Germany and France, and a
special inquiry into the relationship of monopoly
to fair trading practices was conducted by a
British economist. The United States, in procur-
ing strategic materials abroad, has sought to de-
velop sources of supply free from cartel domina-
tion. Wherever possible, the Mutual Security
Program has been administered to help eliminate
restrictive agreements that hold back economic
expansion.

Instructions have been issued that the offshore
procurement program be administered to encour-
age as much as practicable free enterprise and the
development and strengthening of free labor union
movements. Procurement officers have been re-
quested to report fully on their experience with
these instructions in order that new and improved
techniques may be formulated. Representatives
of the United States Government have been in-
structed to inform the various foreign govern-
ments of the importance which the United States
attaches to the avoidance of restrictive business
practices and have been requested to report on evi-
dences of such practices.

Procurement officers have been instructed to use
channels of procurement which reduce the risk of
prices being inflated, deliveries hampered, or pro-
duction impeded by restrictive business practices.
Furthermore, they have been instructed that com-
petitive business should be solicited from all suit-
able sources and that negotiations should be
carried on where possible with individual firms
rather than with trade associations or joint sales
offices.

The Production Assistance Program. — The
production assistance program of the Mutual
Security Agency is designed to further the objec-
tives of the Benton amendment as reinforced by
the Moody amendment — to encourage free com-
petitive enterprise, to strengthen free-trade
unions, and to foster a more favorable climate for
private investment. Adoption of such programs
will enable the Europeans to achieve more dy-
namic economies and higher standards of living
for all. If these changes are to come, they can-

not be imposed from without nor from above.
They must flow from voluntary action. An ex-
panding, dynamic economy implies an acceptance
of the philosophy of risk and an awareness on the
part of all concerned of the key role that competi-
tion plays in such an economy. It is only to the
extent that the concept of competitive enterprise
is accepted that capitalism as we know it in Amer-
ica (based on ever higher levels of technology,
productivity, and wages, and on low prices, high
turnover, and low unit costs) can effectively func-
tion. The attainment of the objectives of the
Benton amendment therefore is fundamentally a
question of changing basic attitudes. It is a task
which by its nature must largely be done by Euro-
peans for Europeans. The Mutual Security
Agency can only lend its encouragement and
assistance.

The production assistance program, which ac-
quired further momentum in the first 6 months of
1952, involves six phases. These phases will over-
lap and will not be mutually exclusive in point of
time; in fact the first, and to an even greater ex-
tent the second, will continue through all the
others. To discuss each phase separately, how-
ever, assists in understanding the general course
of the development the Mutual Security Agency
is supporting. In some countries, the process has
hardly begun; in others, a good start has been
made. The six phases are outlined below :

1. The creation of receptive attitudes towards
the objectives of the Benton amendment among
influential segments of the population of each
country concerned; the opening of minds to the
advantages of a competitiye economy; and the
arousing of an awareness of the fact that expand-
ing dynamic economies are not only desirable but
also are possible of attainment in Europe. This
problem is being attacked through technical as-
sistance supplemented by informational activities.
Many technical assistance projects to support the
European productivity program moved forward
in the first half of 1952. Approximately $10 mil-
lion was approved for 310 separate projects.
These projects included the exchange of specialists
of all types between the United States and Europe.
Among these were about 170 leaders, technicians,
and rank-and-file members of non-Communist
unions in Europe who visited the United States

to observe at first hand the operations of Amer-
ican unions and constructive collective bargaining.

2. Concurrently (and facilitated, it is hoped, by
changing attitudes) taking appropriate action to-
wards encouraging the elimination of legal, in-
stitutional, and other obstacles to an expanding
economy.

3. The creation of permanent national institu-
tions within each country (and probably, under
appropriate sponsorship, international European
institutions as well) which in each case will have
that support of government, business and labor
which is necessary to assure effective action in
fostering the development of a dynamic expand-
ing economy. Such institutions have been estab-
lished in France, Germany, Austria, Italy, Bel-
gium, the Netherlands, and Denmark. In the
United Kingdom, a new British Productivity
Council is being established as an outgrowth of
the Anglo-American Council on Productivity
which on June 30, 1952 ended nearly 4 years of
successful operation after sponsoring the visits
to the United States of 46 teams, representing a
cross-section of British management and labor.
During the first half of 1952, much was accom-
plished to strengthen those institutions which are
usually known as "Productivity Centers." In
April, for instance, the Austrian Productivity
Center was formally reorganized to give national
organizations of employers and werkers equal
voice in its operations and otherwise to enlarge
its scope. It is expected that the Moody amend-
ment will provide an additional stimulus to assure
that these institutions will be fortified to play, in
the future, a more positive role in the productivity
effort, and to continue the effort beyond the period
of United States aid.

4. The creation within European industry of in-
dividual plant projects which will demonstrate to
all the advantages of high productivity. The bene-
fits will be shared out — to management, in higher
profits; to labor, in increased wages; and to the
consumer, in lower prices. This will be done by
locating those firms willing to step outside of the
established pattern; showing them through tech-
nical assistance how they may raise their produc-
tivity and share the benefits ; making this possible
by assuring, to the extent feasible, that they are
not harassed unfairly by their competitors in ob-
taining this objective, and that any necessary ti- |*'
nancing is available at reasonable rates. In

France, a number of projects, involving commit-
ments by individual firms to share benefits, got
under way in the first 6 months of 1952.

In this fourth phase and the following phases,
although the Mutual Security Agency will use its
influence and lend its support, the basic motiva-
tion must come from within the several countries.
It is recognized that, at best, individual plant
projects can embrace only a very small segment of
the business community, perhaps less than one per-
cent, within any country, because of limitation in
the number of qualified technicians available to
assist the plants.

5. In the fifth phase, it is expected that, with
United States encouragement and with the sup-
port of the national productivity institutions,
other forward-looking entrepreneurs — having seen
the results accomplished in the demonstration
projects — will undertake similar programs. This
phase may begin in several countries as early as
1954.

6. In the sixth phase, it is expected that the rest
of the industry will be forced by competition to
act more dynamically. In most countries, it will
probably be 10 to 20 years before this takes place.

It is recognized, of course, that this plan may de-
velop somewhat differently than is outlined above.
Modifications to meet special situations will be
dictated by circumstance and experience as time
2;oes on. However, experience to date tends to
onfirm the opinion that no other program offers
a, better prospect of success. The stakes are large,
and the required investment in money and effort
is small in relation to the total investment in Euro-
pean economic and defense support. If the pro-
duction assistance program succeeds, the gains will
oe tremendous not only in terms of defense but
dso in establishing stable economies and removing
>r minimizing the need for continued financial
upport to Europe.

Consultation With Labor Specialists. — Labor
tmcers in the European missions of the Mutual
Security Agency were called on to help Defense
department procurement officers take into account
he labor aspects of offshore contract placement,
^his type of coordination started in Italy, and im-
ortant steps were being taken to effect similar
rocedures in placing offshore procurement con-
racts in France, Belgium, and the Netherlands.
I addition, all contracts contain a provision that

contractors comply with country laws and regu-
lations governing minimum standards on wages,
working conditions, and industrial relations.

In Southeast Asia, labor specialists in several of
the Special Technical and Economic Missions are
actively developing programs in labor education,
union organization, labor legislation, employment
security, and workers' housing.

Investment Guaranties

The investment guaranty program, as origi-
nally authorized under the Economic Cooperation
Act of 1948, afforded protection against incon-
vertibility of foreign currency receipts to new
private American investments in Western Europe
and its dependencies. The act was amended in
1950 to provide for the issuance of guaranties
against loss from expropriation or confiscation by
foreign governments, and the Mutual Security
Act of 1951 extended the geographic scope of the
program to include the Near East and Africa,
Asia and the Pacific, and the American Republics.
The Philippines and China (Formosa) are among
the new countries included in this program, and
negotiations are under way to make it available
for other underdeveloped areas. New procedures
now being developed will make it possible for the
investment guaranty program to extend its cov-
erage to ( 1 ) loans from United States banks and
other financial institutions to similar foreign in-
stitutions which will re-lend such funds to quali-
fied local enterprises, and (2) guaranty of com-
mitments to revolving funds which will be used
to finance on a continuing basis transactions cov-
ering the export of essential commodities.

During the period covered by this report, agree-
ments initiating or expanding the guaranty pro-
gram were concluded with 7 countries, making a
total of 13 countries 4 in which the guaranty pro-
gram was operative on June 30, 1952.

Industrial Investment Guaranties. — To further
the intent of Congress that the guaranty program
be used to promote the broad Point 4 Program
objectives in underdeveloped areas, the Mutual
Security Agency announced its readiness to take
applications for the guaranty of any United States

4 The 13 countries were : Austria, Belgium, China (For-
mosa), France, Germany (Federal Republic), Greece,
Italy, the Netherlands, Norway, the Philippines, Turkey,
the United Kingdom, and Yugoslavia.

investment abroad which may contribute to the
economic development of these areas. With this
announcement and supporting informational data,
the Mutual Security Agency intensified its efforts
to make the benefits of the guaranty program more
widely known in private business and financial
circles. For example, during the latter half of
June 1952, information concerning the program
was sent to over 3,000 banks, investment concerns,
commercial associations, and industrial firms.

In the first 6 months of 1952, six industrial
investment guaranties for a total of $4.5 million
were issued; all insured convertibility of foreign
currency receipts.

From October 1948 to June 30, 1952, industrial
guaranties issued covering new investments
amounted to $38 million, of which $36.7 million
covered the risks of inconvertibility of foreign
currency receipts, and $1.3 million the risk of loss
through expropriation or confiscation. Total fees
collected amounted to $0.6 million. No disburse-
ments have been required pursuant to industrial
guaranty contracts.

During the calendar year 1951, the Department
of State completed the negotiation treaties con-
taining provisions designed to encourage the flow
of private investment with six countries : Colom-
bia, Denmark, Greece, Israel, Ethiopia, and
Italy — all of which are participating in the
Mutual Security Program. None of these treaties
has, however, entered into force. Although they
have been before the Senate for several months,
that body has not yet acted upon them. The
Department of State now has in progress negotia-
tions for similar treaties with about a dozen
countries, practically all of which are participat-
ing in mutual security programs.

Informational Media Guaranties. — Informa-
tional media guaranties insure convertibility into
dollars of United States investors' earnings from
approved investments in the publication and dis-
tribution of informational media in participating
countries which do not make dollar exchange
available for the transfer of earnings from such
activities. This facilitates distribution abroad
of representative types of American literature,
scientific and technical works, and motion pictures.

By June 30, 1952, such guaranties issued totaled
$13.1 million, for which fees amounting to $0.2

million were collected. Payments for conversion
of foreign currency earnings covered by these
guaranties totaled $6.6 million at the end of June
1952. The foreign currencies acquired by the
United States as a result of these transactions are
depositied to the account of the U. S. Treasury
in the respective foreign countries and are avail-
able to meet overseas expenses of the Government.
During the period covered by this report, the in-
formational media guaranty program was ex-
tended to the Philippines, Israel, and Yugoslavia.
The Mutual Security Agency's authority tc
issue informational media guaranties was trans
ferred on June 30, 1952, to the Department oj
State by Executive Order 10368.

Small Business Program

During the first half of 1952, the Mutual Secu
rity Agency, through the Office of Small Business
continued to aid small American enterprises ii
securing an equitable share of the contracts an
thorized by the Mutual Security Agency.

The Mutual Security Act of 1952 extended thi
assistance to include contracts authorized by th
Technical Cooperation Administration under th
Point 4 Program.

Steps were taken with the Far East Specif
Technical and Economic Missions to strengthe
small business activities. The missions are no
submitting directly to the Mutual Security Agenc
Office of Small Business in Washington copies (
their requests for materials. By receiving the:
requests prior to their actual approval, the Offii
of Small Business can prepare more specific i:
formation as to quantity, types, and uses of tl
commodities to be purchased in the United State

The Transatlantic Licensing Program encou
ages firms, both in the United States and abroad,
"export" their industrial patents, processes, tec
niques, and capital instead of their physical pro
uct. The Office of Small Business acts as an i
termediary through the "Contact Clearing Hous
at Paris and Washington to effect contacts betwe
European and American firms interested in explc
ing licensing or partnership arrangements
mutual benefit. Once contact is made, the fm
tion of the Small Business Office ends, and the i

terested firms may then enter into negotiations
through regular business channels,

Studies indicate that about one-fifth of the pay-
ments for contracts financed by the Mutual Se-
curity Agency are known to go directly to small
manufacturing firms. This percentage does not
include a considerable volume of business done by
small companies through subcontracts, nor does
it include orders placed with small business by
export agents and other middlemen. Steps have
been taken to ascertain to as great a degree as
possible this unknown volume of business being
conducted by small firms. Exporters and other
middlemen have been requested to indicate the
name of their primary supplier on the forms filed
for Mutual Security Agency payments.

Strategic Materials Program

The United States and its allies in the free
world depend, either wholly or in part, on outside
sources for certain minerals, fibers, and oils.
These types of raw materials are vital to the

production of the military weapons and equip-
ment needed to meet current defense goals.

The strategic materials program carried on by
the Mutual Security Agency in the countries of
Western Europe and in their overseas territories
is helping not only to increase output from exist-
ing sources of critical materials but also to develop
new sources. The additional production will both
augment world supplies and build up the United
States strategic materials reserve. The United
States stockpile is being increased also through
direct purchases made with counterpart funds.

Since December 1951, the Defense Materials
Procurement Agency has acted on behalf of the
Mutual Security Agency as its agent in carrying
out operations under the strategic materials pro-
gram. The Defense Materials Procurement
Agency was established in order to centralize in
one agency the responsibility for procuring and
expanding the production, at home and abroad, of
strategic materials needed by the United States.

The Mutual Security Agency has made dollars
and counterpart funds available to the Defense

Strategic Materials Development Projects Expand Free World Resources

MSA/ECA Commitments, As Of June 30, 1952
1

1 Repayoble in lead/zinc

Materials Procurement Agency in order to meet
obligations on certain contracts signed prior to
December 1951 by either the Mutual Security
Agency or its predecessor, the Economic Coopera-
tion Administration. Funds were also transferred
to the Defense Materials Procurement Agency
to initiate new contracts approved by the Mutual
Security Agency for the purchase and develop-
ment of strategic materials. Such contracts were
approved primarily to facilitate stockpiling for
the United States.

From April 1948 through June 30, 1952, the
equivalent of approximately $83 million in
counterpart funds was committed for the pur-
chase of certain strategic materials — rubber, sisal,
bauxite, mercury, copper, industrial diamonds,
and cobalt— for delivery to the United States
stockpile.

As of June 30, 1952, contracts for materials de-
velopment projects had committed $33 million of
Mutual Security Agency funds and the equivalent
of $105 million in counterpart. The bulk of these
funds are provided on a loan basis. The dollars
supplied by the Mutual Security Agency are used
to pay for American equipment and services;
counterpart funds pay for necessary local expenses
incurred in connection with the projects.

Loans made by the Mutual Security Agency
for the development of strategic materials are re-
payable, with interest, in shipments of the ma-
terial being developed. The United States also
generally retains an option to purchase additional
quantities of the materials produced.

Development projects are necessarily spread
over a long period, and a level of production suf-
ficient to allow repayment in kind takes time to
achieve. For this reason, few contracts called for
deliveries to start before 1952. Initial repay-
ments of aluminum, lead, and industrial diamonds
have been received and transferred to the United
States stockpile. The total value of these mate-
rials was slightly over one million dollars. Addi-
tional quantities of these and other materials are
scheduled for repayment this year. •

Deliveries through June 30, 1952 against pur-
chase contracts— contrasted with developmental
contracts— totaled $75.6 million and included in-
dustrial diamonds, crude rubber, bauxite, sisal,
palm oil, mercury, and lead.

Compliance With the 50-50
American Flag Provision

At least 50 percent of the goods sent abroad
under programs developed by the Mutual Security
Agency must, by law, be carried in American-flag
commercial vessels. The percentage is computed
separately for dry-bulk cargoes, dry-cargo liners,
and frankers. During the fiscal year 1952, Ameri-
can-flag participation in the dry-bulk cargo and
liner categories met legal requirements.

Shipment reports (for liftings between July 1,
1951 and June 30, 1952) show that 10.1 million
tons of dry-bulk cargo left the United States for
Europe; 79 percent of this tonnage moved in
American-flag vessels. In dry-cargo liners, 2.1
million tons were lifted, with American-flag ves-
sels accounting for 54 percent of the tonnage.
Cargo liftings for the Far East more than met the
50-50 requirements. During this same period,
American-flag tankers were unavailable at terms
and conditions which the Mutual Security Agency
considered reasonable. Therefore, the Mutual
Security Agency continued to apply the non-
availability clause5 exempting such tanker ship-
ments from the 50-50 American-flag provision.

Through June 30, 1952, American-flag commer-
cial vessels had carried 71 percent of all military
items shipped under the Mutual Defense Assist-
ance Program.

Homebound cargoes of strategic materials
financed by the Mutual Security Agency (either
with dollars or counterpart funds) must be trans-
ported in accordance with the 50-50 American-flag
shipping requirement. Since July 1, 1951, a total
of 65 percent of all such cargoes arriving in the
United States came in American-flag liners
There were no tramp or tanker shipments during
this period.

Voluntary Relief Shipments

The Mutual Security Agency, continuing a pro-
gram initiated under the Economic Cooperatior
Act of 1948, subsidized the ocean transportation
costs of relief supplies and packages sent by indi-
viduals and voluntary nonprofit relief agencies tc
certain countries. These goods enter duty-free.

''Section 111 (a) (2) of Pub. Law 472, 80th Cong., as
amended.

and transportation within the country of destina-
tion is covered from local currency counterpart
funds.

From July 1948 through June 1 952, subsidy pay-
ments for voluntary relief shipments totaled over
$25 million. Parcel post relief packages sent by
individual donors over the 4-year period ac-
count for 72 percent of this amount.

During the last 2 years, primarily because of
generally improved economic conditions in
Europe, individual shipments through parcel post
declined steadily. Over half of subsidy payments
in the first 6 months of 1952 were made to volun-
tary nonprofit relief agencies. Most of these
agency shipments went to Greece, Germany, and
Italy ; a large part of the supplies sent to Germany
went to refugees and displaced persons.

The authority of the Mutual Security Agency to
pay ocean freight subsidies ended June 30, 1952,
since the President determined that such authority
was not required to enable the Director for Mutual
Security to carry out his responsibilities under the
Mutual Security Act of 1951. Under Public Law
400, Eighty-second Congress, however, a program
of relief shipment subsidies has been authorized
and will be administered by the Department of
State,

United Nations Expanded Program
of Technical Assistance

Sixty-five countries (10 more than in 1950-51)
have pledged approximately $19 million to sup-
port the 1952 United Nations expanded program
of technical assistance. Since the amount
pledged is for a 12-month period, it represents an
increase of over 40 percent over the $20.1 million
pledged for the first financial period, which was
18 months (July 1950-December 1951). As of
June 30, 1952, $19.4 million of the pledges for the
first period had been paid up; the outstanding
balance of $647,208 was expected to be received
within the next few months. In May 1952, the
United States paid $6 million of its pledge of $11.4
million. The United States pledge represents ap-
proximately 60 percent of the total pledges for the
1952 program.

Under this United Nations program, over
1,000 technical experts from 61 countries in a
wide variety of fields of activity have been sent
out to 55 underdeveloped countries and territories

at the request of the governments concerned. In
addition, more than 1,000 people from 69 coun-
tries and territories have been placed in tech-
nical training institutions or otherwise provided
with training, study or observation facilities in
countries other than their own. These figures take
no account of United Nations assistance in the ex-
pansion of regional schools and seminars all over
the world. The program is rapidly gaining mo-
mentum as the volume of requests for assistance
increases and the operating procedures are
perfected.

Representatives of the United Nations techni-
cal assistance program are now working in 20
countries assisting the governments in developing
country programs, harmonizing the work of the
organizations in the field, advising on the selection
of trainees, and acting as the channel of liaison at
the working level with bilateral and regional or-
ganizations rendering technical assistance.

While some projects are designed to meet specific
problems over a limited period, countries are in-
creasingly asking for assistance in projects which
will be extended over a number of years.

Program of Technical Cooperation of
the Organization of American States

The Inter- American Economic and Social Coun-
cil on January 31, 1952, approved a program for
1952 consisting of 11 projects costing $1.6 million.
This program is mainly a continuation of the pro-
gram commenced in 1951.

The projects now in operation include control
of hoof-and-mouth disease, housing research, the
teaching of agriculture extension methods, and
training on administration of children's services.
As of June 30, 1952, the United States had paid
$300,000 on the 1952 program. Additional pay-
ments by the United States are conditional upon
payments made by other nations participating in
the program.

Reimbursable Military Assistance

Authority. — Reimbursable military assistance is
provided under the authority of section 408 (e)
of the Mutual Defense Assistance Act of 1949, as
amended. Under this section, the President is au-
thorized to transfer, or enter into contracts for the
procurement or transfer of, equipment, materials,

or services to certain nations, without cost to the
United States. Assistance in this form is charac-
teristic of the basic philosophy of the Mutual De-
fense Assistance Program as a whole. It provides
a means whereby the United States can help the
friendly nations of the world to help themselves.
Requests from nations for assistance in this form
can be merged with the over-all procurement pro-
grams of the military departments, thus avoiding
conflicting demands on the productive capacity of
the United States.

Method of Payment. — The original provisions
for reimbursable military assistance stipulated
that "the full cost, actual or estimated, for the
equipment, materials, or services ordered, shall
have been made available to the United States."
This provision worked a hardship in two ways:
(1) it required full acquisition price for excess
equipment, and (2) where items were procured
on long-lead time contracts, it immobilized large
sums of scarce dollar resources of friendly nations.
The stipulation concerning payment was subse-
quently amended to specify that fair value for
excess equipment, or materials, may not be less
than gross cost of repair or rehabilitation, plus 10
per centum of the original gross cost, the scrap
value, or the market value, if ascertainable, which-
ever is greater, and to allow for the "deposit" of
a "dependable undertaking" in lieu of the full
amount of cash when an order is placed for equip-
ment or materials requiring procurement.6

Many of the items being furnished to friendly
nations under the reimbursable assistance provi-
sion of the act require a long time to manufacture.
It may be 2 years, for example, between the time

6 The Mutual Security Act of 1952 makes two additional
changes concerning methods of payment: (1) estab-
lishes a waiver procedure whereby the United States
may dispense with payment prior to delivery in certain
selected cases and collect within 60 days of delivery on
the basis of billing therefor, and (2) extends the "de-
pendable undertaking" provision to include repair or re-
habilitation of equipment supplied from military stocks.
This procedure will now enable the Department of De-
fense to sell equipment to large purchasers on what might
be termed a commercial basis, without the strict require-
ment of payment before delivery, and also permits the
initiation of rehabilitation and repair work for a foreign
government without first receiving the full amount of
the contract in advance.

a firm order is placed by a purchasing nation and
the delivery of the final item by the manufacturer.

Based on the "dependable undertaking" of the
purchasing government to pay the full amount re-
quired and before delivery, the United States pro-
ceeds with the placing of contracts for the pro-
curement of the required items. The Mutual De-
fense Assistance Act of 1949, as amended, limited
the amount of such contracts which could be out-
standing at any one time to $100 million. The
Mutual Security Act of 1951 increased this ceil-
ing to $500 million and the Mutual Security Act
of 1952 to $700 million. These increases have
been necessary to enable a number of foreign gov-
ernments to submit substantial orders for long-
lead time items. At the end of June 1952, pro-
curement valued at approximately $350 million
had been initiated under this method. About $80
million has been made available for purposes of
liquidation of this contractual obligational au-
thority. Additional requirements for the use of
approximately $33 million in contractual obliga-
tional authority are pending as of June 30, 1952.

Progress. — Through the end of June 1952, of
the 1,057 requests for reimbursable military as-
sistance received from 49 countries, 601 had re-
sulted in contracts with 33 foreign governments
amounting to approximately $550 million. One
hundred forty-nine requests have either been can-
celed or withdrawn. Three hundred and seven
requests for materiel valued at approximately
$930 million are outstanding, having not yet been
contracted for by the foreign government. In-
cluded in the materiel contracted for are 6 light
cruisers, 5 destroyer escorts, 3 patrol frigates, 188
aircraft, 530 medium tanks, together with such
other items as motor transport vehicles, weapons,
ammunition, and electronic equipment. Within
the 6-month period covered by this report, 85 re-
quests from 18 countries valued at approximately
$200 million were received. Deliveries through
June 1952 had been made to 33 countries and were
valued at over $92 million; of this amount, $27
million was delivered in the 6-month period end-
ing in June. Excess property is included in the
above values on a sales price basis. The excess
property, in terms of original acquisition cost
actually contracted for, is approximately $173
million, with $149 million delivered.

U. S. GOVERNMENT PRINTING OFFICE: 195?

fts

<-"7

' — ■> / SI 3

SECOND REPORT TO CONGRESS

on the

Mutual Security
Program

JAN 6 - 1953

SUPPLEMENT

Statistical Data Relating to the
Mutual Security Program, as of June 30, 1952

SECOND
REPORT TO CONGRESS

on the

MUTUAL SECURITY
PROGRAM

SUPPLEMENT

Statistical Data Relating to the
Mutual Security Program, as of June 30, 1952

r0r gale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C.

Price 20 cents

CONTENTS

Part A. Fiscal Statements Page

Table A-l. Status of Allocations and Approved Programs for Military, Economic,

and Technical Assistance, by Agency, as of June 30, 1952 1

Table A-2. Status of Obligations and Expenditures for Military, Economic, and

Technical Assistance, by Agency, as of June 30, 1952 1

Table A-3. Status of Appropriations, by Type of Assistance, Agency, and Title, for

Fiscal Years 1948-52, as of June 30, 1952 2

Part B. Military Assistance Program

Table B-l. Value of Military Program, by Title and Agency, Cumulative Through
June 30, 1952, and Value of Military Shipments, by Recipient Area and by Agency,
January 1-June 30, 1952, Fiscal Year 1952, and Cumulative Through June 30,
1952 3

Table B-2. Quantities of Major Military Items Shipped, by Service, January 1-

June 30, 1952, Fiscal Year 1952, and Cumulative Through June 30, 1952 3

Part C. European Defense Support and Economic Program

Table C-l. Allotment Summary, by Recipient Country and Source of Funds, April 3,

1948-June 30, 1952 4

Table C-2. Procurement Authorizations, and Paid Shipments, by Country of Destina-
tion, and Major Category of Assistance, for the Period January 1-June 30, 1952.. 5

Table C-3. Summary of Procurement Authorizations, and Paid Shipments, by Com-
modity Group and Country of Destination, July 1, 1951-June30, 1952 6

Table C-4. Summary of Procurement Authorizations, and Paid Shipments, by
Commodity Group and Country of Destination, Cumulative, April 3, 1948-June 30,
1952 8

Table C-5. Technical Assistance Authorizations and Expenditures, by Field of

Activity and Participating Country, Cumulative, April 3, 1948-June 30, 1952 10

Table C-6. Value of Industrial Guaranties Issued, by Type of Project and Country
of Investment, and Value of Reductions in Liability, by Type and Country, Cumula-
tive, April 3, 1948-June 30, 1952 10

Table C-7. Value of Informational Media Guaranties Issued, by Media and Country,
and Reductions in Liability, by Type and Country, Cumulative, April 3, 1948-
June 30, 1952 11

Table C-8. Approved Loans, as of June 30, 1952, by Country and Fiscal Year 11

Table C-9. MSA Expenditures for Freight Subsidies on Voluntary Relief Supplies

and Parcel Post Packages, Cumulative, July 1, 1948-June 30, 1952 12

Table C-10. Spanish Loan Program, MSA Approvals, Loans Signed, and Expendi-
tures, by Type of Project, Cumulative, September 6, 1950-June 30, 1952, and
Fiscal Year 1952 12

Table C-ll. Status of European Local Currency Counterpart Accounts, by Coun-
try, Cumulative, April 3, 1948-June 30, 1952 13

Table C-12. MSA/ECA Approvals for Withdrawal of European Counterpart Funds
Available for Country Use, by Purpose and Country, Cumulative, April 3, 1948-
June 30, 1952 13

Table C-13. MSA Approvals for Withdrawal of European Counterpart Funds

Available for Country Use, by Purpose and Country, July 1, 1951-June30, 1952. 14

Table C-14. Status of United States Portion of European Counterpart Funds,

by Country, Cumulative, April 3, 1948-June 30, 1952 14

Table C-15. Status of United States Portion of European Counterpart Funds, by

Country, July 1, 1951-June 30, 1952 15

Part D. Far East Economic and Technical Assistance Program Page
Table D-l. Allotment Summary, by Recipient Country and Fiscal Year, June 5,

1950-June 30, 1952 16

Table D-2. Authorizations and Paid Shipments, by Major Category of Assistance

and Country of Destination, for the Period January 1-June 30, 1952 16

Table D-3. Summary of Authorizations, and Paid Shipments, by Commodity Group

and Country of Destination, July 1, 1951-June 30, 1952 17

Table D-4. Summary of Authorizations, and Paid Shipments, by Commodity Group

and Country of Destination, Cumulative, June 5, 1950-June 30, 1952 18

Table D-5. India Program, Procurement Authorizations, and Paid Shipments, by

Commodity Group, Cumulative, September 9, 1950-June 30, 1952 19

Table D-6. Status of Far East Local Currency Counterpart Funds, Cumulative,

June 5, 1950-June 30, 1952 . 19

Table D-7. Status of Far East Local Currency Counterpart Funds for United States

Use, Cumulative, June 5, 1950-June 30, 1952 19

Part E. Technical Cooperation Administration Program

Table E-l. Value of Program, by Type of Activity, and by Country and Area, Fiscal

Years 1951 and 1952, as of June 30, 1952 20

Table E-2. Number of United States Personnel in the Field, by Type of Activity,

and by Country and Area, as of June 30, 1952 21

Table E-3. Number of Foreign Nationals Training in the United States under the
TCA Point 4 Program, by Country of Origin, and by Supervising Agency, as of
June 30, 1952 22

Table E-4. Funds Authorized, and Obligated for Bilateral Programs under the TCA
Point 4 Program, Including Institute of Inter-American Affairs Programs, by
Country, for Fiscal Years 1951 and 1952, as of June 30, 1952 23

Part F. Economic Indicators

Table F-l. Industrial Production Indexes for Western Europe, 1938 and 1949-52.. 24

Table F-2. Steel Production in Western Europe, 1938 and 1948-52 24

Table F-3. Coal Production in Western Europe, 1938 and 1948-52 24

Table F-4. Electricity Production in Western Europe, 1938 and 1948-52 25

Table F-5. Gold and Short-Term Dollar Assets of OEEC Countries and Spain,

1938 and 1948-52 25

Table F-6. Wholesale Price Indexes for Western Europe, 1938 and 1949-52 26

Table F-7. Cost of Living Indexes for Western Europe, 1938 and 1949-52 26

Table F-8. Combined Foreign Trade of OEEC Countries, Indexes of Volume and

Monthly Averages of Value, 1938 and 1948-52 27

Table F-9. Combined Foreign Trade of OEEC Countries (Metropolitan), by Major

Areas, 1938 and 1948-52 27

Table F-10. General Economic Data for Selected Countries of the Near East and

Africa 28

Table F-ll. General Economic Data for Selected Countries of Southeast Asia 30

Table F-12. General Economic Data for Selected Countries of South Asia 31

Table F-13. General Economic Data for Selected Countries of Latin America 32

PART A

Fiscal Statements

Table A-l. — Status of Allocations and Approved Programs for Military,
Economic, and Technical Assistance, by Agency, as of June 30, 1952 '

[Thousands of dollars]

Agency

Fiscal
year

Allocations

Approved
programs

Total

Mutual Security Agency a.

Department of Defense. ._

Department of State *

Department of Agriculture

Department of Commerce

Office of Director for Mutual Security.

194S-52

1948-52

1960-52

1950-52

1951

1952

25, 900, 099. 1

25, 917, 642. 3

14, 127, 217. 3

I 11, 422, 060. 2

» 335, 259. 2

15,015.8

46.5

500.1

14, 127, 217. 3

11, 433, 557. 4

341, 305. 2

15. 015. 8

46.5

500.1

1 Includes administrative expenses.

' Includes activity under predecessor agency— the Economic Cooperation Administration.
3 Excludes reimbursements of $2,017.0 thousand.

* Includes the Technical Cooperation Administration for fiscal years 1951 and 1952.
J Includes $787.0 thousand to be withdrawn upon completion of accounting adjustments. Excludes
reimbursements of $1,268.6 thousand.

Table A-2. — Status of Obligations and Expenditures for Military, Economic,
and Technical Assistance, by Agency, as of June 30, 1952 '

[Thousands of dollars]

Agency

Fiscal
year

Obligations

Expenditures

Total

Mutual Security Agency 2 -

Department of Defense. _

Department of State 3

Department of Agriculture

Department of Commerce

Office of Director for Mutual Security

1948-52

1950-52

1951

1952

25, 505, 863. 1

16, 224, 033. 1

14,113,778.9

11.046,742.3

329, 938. 8

15, 012. 8

8.8

381.5

12, 796, 403. 8

3, 223, 842. 7

188,430.6

15, 002. 8

7.5

345.7

1 Includes administrative expenses.

2 Includes activity under predecessor agency — the Economic Cooperation Administration. Data
on programs financed by MSA from military assistance funds after July 1, 1950, are commingled with
other MSA data, included in the tables of Part C and Part D of this report.

3 Includes Technical Cooperation Administration for fiscal years 1951 and 1952.

= 3

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PART B

Military Assistance Program

Table B-l. — Value of Military Program,1 by Title and Agency, Cumulative
Through June 30, 1952, and Value of Military Shipments, by Recipient Area and
by Agency, Jan. 1-June 30, 1952, Fiscal Year 1952, and Cumulative Through
June 30, 1952

[Millions of dollars]

Recipient area

Program,
cumulative

through
June 30, 1952

Shipments

Cumulative

through
June 30, 1952

Fiscal year
1952

Jan. 1-June
30, 1952

Total _.

Europe

Near East and Africa

Asia and the Pacific

American Republics

Agency

Total

Department of Defense 2

Department of the Army

Department of the Navy

Department of the Air Force

Mutual Security Agency 3

Department of Agriculture

11,350.0

2, 614. 3

1,462.2

915.

9, 179. 2

910.6

1, 172. 1

88.1

1,951.2

326.2

336.7

1, 105. 2

163.4

193.4

702.6

106.1

106.8

11,350.0

2, 614. 3

1, 462. 2

915.7

11,047.2
6, 250. 5
1, SiS. 8
S, 252. 9
289.2
13.6

2, 479. 3

1,554.1

516.7

408.5

121.4

13.6

1, 358. 1
877.7
218.1
262. S
104.1

879.9
558.0
1S9.1
182.8
35.8

' Includes Mutual Defense Assistance Program funds transferred to the Mutual Security Agency and the
Department of Agriculture for the purpose of financing the procurement of " common use' ' items and materials
which assist the expansion of military production.

3 Amounts shown include value of military equipment and supplies to be furnished exclusive of charges
for repair and rehabilitation of excess stocks and packing, handling, and transportation. Value of excess
stocks included.

3 Includes activity under predecessor agency — the Economic Cooperation Administration. Data on
programs financed by MSA from military assistance funds after July 1, 1950, are commingled with other
MSA data, included in the tables of Part C and Part D of this report.

Table B-2. — Quantities of Major Military Items Shipped, by Service, Jan. 1-
June 30, 1952, Fiscal Year 1952, and Cumulative Through June 30, 1952

Service and item

Unit of
quantity

Total,

cumulative

through

June 30,

1952

Fiscal year
1952

Jan. 1-

June 30,

1952

Department of the Army:

Number

15,064

12, 002
58, 973

1, 098, 517

13, 594
427. 295

9,787

377
464

1,715

8,118
5,710
40, 621

731, 476
7,051

253,839

3,837

189
223

1,050

6,074

4.692

do .-

29, 116

428, 209

2,706

Ammunition — small arms and machine guns. . . .

Thousands of
rounds,
do

187, 195
1,644

Department of the Navy:

Number

do --.

Department of the Air Force:

do ..

763

PART C

European Defense Support and Economic Program

Table C-l. — Allotment Summary, by Recipient Country and Source of Funds,1 Apr. 3, 1948-June 30, 1952

[Millions of dollars]

Total

Recipient country

Period and program

Austria

Belgium-
Luxem-
bourg

Den-
mark

France

Germany
(Federal
Republic)

Greece

Iceland

Ireland

Italy

Grand total, Apr. 3, 1948-June 30, 1952

13,368.2

676.8

555.5

271.4

2, 706. 3

1, 389. 0

693.9

29.2

146.2

1, 475. 0

MSA/ECA

13,106.6
261.6

676.8

546.6
8.9

270.9
.5

2, 651. 5
54.8

1, 389. 0

693.9

29.2

146.2

1, 437. 9

MDAP1

37.1

r_.

Total, Apr. 3, 1948-June 30, 1951 »

11,882.0

560.8

546.6

257.4

2, 444. 8

> 1, 297. 3

515.1

23.7

146.2

1, 315. 4

ECA-

11, 664. 7
217.3

560.8

546.6
(«)

256.9
.5

2,401.0
43.8

1, 297. 3

515.1

23.7

146.2

1, 297. 5
17.9

MDAP..-

Total, July 1, 1951-June 30, 1952

1, 486. 2

116.0

8.9

14.0

261.5

91.7

178.8

5.5

159.3

MSA/ECA

1,441.9
44.3

116.0

14.0

250.5
11.0

91.7

178.8

5.5

140.1

MDAP

8.9

19.2

Net aid,' Apr. 3, 1948-June 30, 1952.

' 13, 368. 2

909.1

109.4

297.0

2, 990. 3

1, 290. 7

1,015.1

29.7

146.2

1, 388. 5

Recipient country — Continued

Period and program

Netherlands and
Indonesia

Norway

Portugal

Sweden

Trieste

Turkey

United
Kingdom

Yugo-
slavia

Prepaid
freight
account

European

Payments

Union —

capital

fund

Nether-
lands

Indo-
nesia 8

Grand total, Apr. 3, 1948-June 30,
1952

977.3

101.4

253.5

50.5

107.1

32.6

222.5

3. 175. 9

109.3

33.5

361.4

MSA/ECA

976.3
1.0

101.4

243.3
10.2

50.5

107.1

32.6

214.7
7.8

3, 063. 6
112.3

80.3
29.0

33.5

361.4

MDAP ! __.

Total, Apr. 3, 1948-June 30, 1951'

877.3

101.4

236.7

50.5

118.5

33.0

152.5

2, 825. 9

29.0

350.0

ECA

876.3
1.0

101.4

231.7
5.0

50.5

118.5

33.0

144.7
7.8

2. 713. 6
112.3

350.0

MDAP

29.0

Total, July 1, 1951-June 30, 1952

100.0

16.8

-11.4

70.0

350.0

80.3

33.5

11.4

MSA/ECA

100.0

11.6
5.2

» -11.4

70.0

350.0

80.3

33.5

11.4

MDAP

Net aid,' Apr. 3, 1948-June 30, 1952.

1, 124. 3

132.2

437.2

60.2

20.4

37.5

301.7

2, 699. 1

109.3

33.5

361.4

■In addition to these "Supply Program" allotments, certain amounts
were programed for technical assistance, strategic materials development,
and ocean freight on voluntary relief supplies.

3 Mutual Defense Assistance Program military production funds trans-
ferred to the Economic Cooperation Administration beginning July 1, 1950.

a Revised to incorporate adjustments made to June 30, 1952. Includes
allotments for overseas territory development. Includes advance allot-
ments against fiscal year 1952 program funds: Austria, $4.0 million; France,
$10.0 million; Germany, $14.3 million; and Italy, $3.2 million.

' Excludes Government and Relief in Occupied Areas (GARIOA) Pro-
gram.

» MDAP funds $2.0 thousand.

' Net aid: Allotments adjusted upward to reflect intra-European drawing

rights utilized and initial credit positions under EPU, and downward to
reflect intra-European drawing rights extended and initial debit positions
under EPU.

7 Initial position credits under EPU exceed initial position debits covered
by conditional aid by 124.8 million units of account and therefore total net
aid of individual countries will exceed this total by that amount.

8 Assistance received by Indonesia from European Program funds allotted
to the Netherlands in 1948 and 1949 prior to transfer of sovereignty in De-
cember 1949.

9 Reflects a reduction of $11.4 million in conditional aid to Sweden — a
portion of Sweden's fiscal 1951 allotment. A like amount was allotted to
EPU in fiscal year 1952 to offset the reduction in Sweden's grant to EPU

Table C-2. — Procurement Authorizations, and Paid Shipments, by Country of Destination, and Major Category of

Assistance, for the Period Jan. 1-June 30, 1952 '

^Thousands of dollars]

Total

Country of destination

Item

Austria

Belgium-
Luxem-
bourg

Denmark

France

Germany
(Fed.
Rep.)

Greece

Iceland

Ireland

PROCUREMENT AUTHORIZATIONS

1, 084, 369

43, 677

9.250

5, 1S5

211, 829

73,083

83,910

2.838

902, 252

25, 912

10, 760

5,100

178, 874

66, 127

40, 072

183

292, 347
622, 33S
-12,434

25, 978

260

-325

-339

11,501

-402

1,927

3,182

-9

50.661
130, 096
-1,883

51, 402
16, 462
-1, 737

43,642
-1, 332
-2,239

-88
275
-4

8,118
-216
83,112
11, 395
-9, 000
88, 708

924, 223

-51

-466

17
-291

4,565
200
33, 100
(')
(>)
5,973

76, 517

255

12.000
(»)
(»)

5,815

66, 190

2,400

(J)

(*)

(>)

(')

-1, 509

9,157

(•)
(>)

3,981

(')
(»)
33, 421

248, 469

(')

(*)
7,230

30, 082

PAID SHIPMENTS

3,906

149

760, 694

43,354

8,307

3,533

215, 142

27, 869

51, 718

1,298

149

201, 796
566, 997
-8, 098

29, 840

13, 824

-310

-373
9,082
-402

243

3,388

-98

53, 896
162, 622
-1.376

21, 731
6,443
-304

34, 695

17, 997

-974

1,292

-4

149

7,717

150

64, 765

11, 395

79, 501

2,097

766

1,114

149

16, 810

(>)

6,726

262

9,997
(»)
12,832

2,346
(>)

(')
851

448

(»)

31,230

1,447

Country of destination

—Continued

Item

Italy

Nether-
lands

Norway

Portugal

Sweden

Trieste

Turkey

United
Kingdom

Yugo-
slavia

PROCUREMENT AUTHORIZATIONS

162, 988

79,643

12, 714

832

-8, 460

-1, 001

44,974

310, 835

49, 677

137, 213

74, 820

12, 022

892

-8, 460

-483

14, 221

298, 278

46, 722

70, 425
71,251
-4, 462

29,199

46, 366

-744

4,624
7.609
-211

750
191
-49

-1

-8, 295
-165

-210

-274

14, 182

-11

298, 298

-9

14, 338

32, 569

-184

981

-9

-60

2,885

-1

-125

25, 500
(3)
(»)
2,368

45, 006

10, 112
(')
(')
2,446

222, 022

(')
(')
24, 794

100, 783

m
(»)

4,832
48, 810

(>)

817

10, 052

(»)

(»)
(•)

-519

-164

(.')

2,955

PAID SHIPMENTS

4,297

-3, 493

47,064

81, 918

45, 492

9,667

4,292

-3, 493

-197

16,636

211,369

43,643

10, 717
75, 019
-3,817

26, 507

19, 591

-606

3,867
6,002
-202

-1

-3, 327

-165

-220

3,630

207, 517

222

17,255

4,336
-44

16,636

26,406

-18

1,493

290

1,607

25, 500
1,263

10, 112
460

(J)
17, 372

3,027

384

(»)

3,422

i Data represent net authorizations and paid shipments (program expenditures) during the period— increases less decreases; negative figures occur when
the value of all decreases, including the adjustment of prior year accounts, is greater than the value of all increases. Expenditures during a period may exceed
authorizations to the extent that such expenditures include payments for goods authorized in prior periods.

* Not applicable.

Table C-3. — Summary of Procurement Authorizations, and Paid Shipments, by Commodity Group and Country of

Destination, July 1, 1951-June 30, 1952 >

[Thousands of dollars]

Total

Country of destination

Commodity or service

Austria

Belgium-
Luxem-
bourg

Den-
mark

France

Germany
(Fed.
Rep.)

Greece

Iceland

Ireland

Italy

PROCUREMENT AUTHORIZATIONS

1, 485, 905

116,021

8,963

13, 997

261, 479

91, 698

178, 806

5,510

160, 402

Commodity total _ _ . .

1, 059, 366

63, 758

8,633

8,912

214, 077

78, 825

64, 361

1,215

132, 691

383, 466
690, 524
-14,624

54, 527
9,677
-446

-1,429
10, 144

-82

1,772

6,934

206

53, 323
163, 264
-2, 510

70, 299
11, 740
-3, 214

60, 200

6,364

-2, 204

1,192

-14

-5

-87

70, 761
67, 793
-5, 863

Industrial commodities..

7,160

-216

239, 500

11,395

33, 500

135, 199

-50

-779

-83
-291

4,675
200
103. 100
(2)
(2)
6, 470

259

354

35, 000

(2)

(2)
17, 314

3,900
(2)
(2)
135

(2)
(2)
380

CO
(2)
5,085

48, 180

C-)
CO
13, 247

(!)

(2)

27, 357

PAID SHIPMENTS 3

1, 885, 597

148, 164

24, 143

32, 476

470, 370

147,211

196, 665

9,005

7,437

214,332

1, 460, 188

88,323

23, 166

26,128

394, 571

127, 311

100, 973

3,955

7,437

181, 995

518, 769
955, 486
-14.066

58, 211

30, 703

-591

2,806

20, 765

-405

7,127

19, 111

-110

91, 226
305, 992
-2, 646

93. 085
36, 062
-1,836

70, 446
31, 528
-1,001

300
3,673

-17

5,249
2,187

60, 378

127, 682

-6,065

Technical services

14, 697

779

218, 876

11,395

179, 661

34, 130
(2)
25, 704

4,747
114

1,253
5

2,124

249

82, 716

CO
10, 603

388

4,530
CO
132

2,634

240

Assistance via European Payments Union

CO
737

CO
6,349

70, 937

CO
18, 642

(2)

Ocean freight... ...

29, 703

Commodity detail

302, 186

50, 991

2,412

3,497

49, 742

71,003

70, 449

300

3,552

3,565

Bread grains

177, 318
57, 260
22, 824
16, 759
7,012
21,013

25, 957

17, 060

3,644

4,211

-3

122

216
402
-16
963
773
74

39, 695
9,611

49,154

11,691

9,104

791

38, 081
1, 225

10,095

-3

6,244

14, 807

1,312
2,240

1,843

1,114

-7
442

Other.

3,497

263

210

605

Fuel ._

325, 140

13, 022

1,310

12, 737

154, 708

13, 006

4,773

575

234

46, 845

211,844
113, 296

617
12, 405

1,310

5,750
6,987

86, 370
68, 337

13, 006

4,689
85

575

234

33, 034

Coal and related fuels

13, 811

Raw materials and semifinished products

492, 351

12, 713

5,382

4,652

92, 825

22, 694

9,292

712

927

72, 061

Cotton

157, 483
134, 886
83, 577
35, 450
19, 465
15, 876
15, 587

14, 085

15, 943

6,152
743
643

1,707
346
757
599

1,767

-102

""1,501

1,748
165
260
962
162
685

1,880

883

1,556

208

09
25

37, 190
18, 548
6,087
14, 005
3,859
5,053
4,154
2,996
933

5,845
5,800

446
1,406
1,562

916
5,108

171
1,439

-931

2,011

3,542

974

703

55, 749

133

101
21

274
62

6.853

2,263

2,029

908

3,818

100

156

660
2,316

93
29

Other

1,092

Machinery and vehicles

275, 985

10, 241

13,309

3,600

88, 349

5,796

12, 985

2,368

1,026

61, 135

Machinery and equipment ..

237, 831

20, 127

13,363

4,665

10,119
123

6,232

6,641

433

2,151
1,449

74. 360
2,407
9,784
1,798

5,796

11, 335

1,540

100

2,340
28

606
420

60, 816

224

Miscellaneous and unclassified ' . .

64, 526

1,355

753

1,641

8,947

14, 813

3,474

1,698
1,698

-1,611

Tobacco

54, 398
10, 127

1,000
355

425
328

1,720

-78

4,281
4,666

16, 035
-1, 223

Other'

3,474

-1, 631

See footnotes at end of table.

Table C-3. — Summary of Procurement Authorizations, and Paid Shipments, by Commodity Group and Country of

Destination, July 1, 1951-June 30, 1952 — Continued

[Thousands of dollars]

Country of destination

— Continued

Commodity or service

Netherlands and
Indonesia

Norway

Portugal

Sweden

Trieste

Turkey

United
King-
dom

Nether-
lands

Indo-
nesia s

slavia

PROCUREMENT AUTHORIZATIONS

100,011

16, 880

-1

-11,341

-1,519

68, 633

350, 134

81,337

94, 070

15, 698

-11,341

-1,000

15, 196

297, 698

76, 513

42, 305

52, 025

-250

4, 558

11,548

-408

738
-502
-177

-1

-11,222

-119

-249
-727
-24

15,157
-11

-759

297,916

542

27, 339
49, 359

-53

—184

-481

-60

"3,385

-10

-125

47. 500
(2)
(2)
2,551

50, 000
(2)
(2)
2,446

(?)

(2)
6,422

(2>
(2)

(2)
1,307

(2)
(2)

(2)
(2>
-519

(')
4,824

PAID SHIPMENTS »

105,093

-1

31,893

9,615

4,620

1,899

85, 396

301,397

84,486

97, 748

-1

30, 913

9, 375

4,620

1,309

32, 495

250, 497

79, 372

56, 926

41,597

-776

11,941

19, 420

-448

-1
4,786
-165

-762

2,112

-42

5
32, 489

27, 501

222, 774

222

34, 332
45, 058

-1

9,546
-170

474

2,930

141

171

47, 500
(2)
2,472

50, 000
(2)
759

(2)
6,871

(?)

809

(2)
239

(2)

(?)
590

(2>

Commodity detail

30, 535

8,931

-8

2,198

m :•!

5, 013

8,814
15,037

8,613
-5

2,363

1 271

-2

6,051

325

-24

3,242

Meat

Other

634

-1

-163

500

Fuel...

6,294

7,208

752

3,197

1,857

490

37, 479

20,653

6,294

6,908
300

752

3,197

1,857

490

37, 479

9,282
11,371

44, 782

6,277

1,599

769

-739

8,323

158, 872

Cotton... _____ _ _ _ _ . __ _

24, 472

5,748

8,829

1,177

3,133

571

746

154

1,435

2,278

-1

-754

-96
93. 208
46, 964
520
6,725
6, 826
1,476
1,758
1,491

27,923

293

886
3,573

1
7

1,522
2

289
231

8,201

5,376

823

222

251

341

1,395

727

-1

3,563

2,647

Other

15,087

-1

6,141

7,085

820

231

21,167

25, 375

11,679

512

2,731

166

-1

6,050

-14

4,860
16

726
93

231

14, 020
6,776

25, 350
25

Motor vehicles, engines, and parts .... _ _ ..

109

Aircraft, entrines, and parts. _ __ _ _ ..

Other transportation equipment .

2,209

370

Miscellaneous and unclassified 4

1,050

2,356

-60

-165

-33

2,509

26, 573

Tobacco . __ ___ _

1,436
-386

2,370
-15

25, 414
1,158

Other'

-60

-165

-33

2,509

1 Data represent authorizations during the period— increases less decreases; negative figures occur when the value of all decreases, including the adjustment
of prior year accounts, is greater than the value of all increases. Expenditures during a period may exceed authorizations to the extent that such expenditures
include payments for goods authorized in prior periods.

2 Not applicable.

3 MSA expenditures supplemented by movement reports from U. S. Government agencies; total paid shipments are less than actual movements because
of the time required for receipt and processing of documents requesting payment. Data represent all program expenditures during the period regardless of the
source of funds by fiscal year.

* Includes refunds for unclassified commodities.

a Assistance received by Indonesia from European Program funds allotted to the Netherlands in 1948 and 1949 prior to transfer of sovereignty in December
1949.

Table C-4. — Summary of Procurement Authorizations, and Paid Shipments, by Commodity Group and Country of

Destination, Cumulative, Apr. 3, 1948-June 30, 1952

[Millions of dollars]

Total

Country of destination

Commodity or service

Austria

Belgium-
Luxem-
bourg

Den-
mark

France

Germany
(Fed.
Rep.)

Greece

Iceland

Ireland

ItaJy

PROCUREMENT AUTHORIZATION'S

13, 365. 4

676.8

555.5

271.4

2. 706. 3

1, 389. 0

693.9

29.2

146.2

1, 474. 4

11,684.2

553.0

528.5

259.6

2, 330. 8

1, 271. 8

503.3

21.5

144.4

1, 309. 2

5, 539. 7

6,167.0

-22.5

396.4

157.4

-.8

171.1

357.9

-.4

118.0

142.1

-.5

707.0

1,627.6

-3.8

979.2
296.3
-3.7-

337.1
168.4
-2.3

6.4
15.2

105.2
39.2

638.0

679.0

—7.8

60.9
9.1

277.8

361.4

33.5

938.5

14.9
2.0

2.0
.2

8.8

128.4

(')

52.9

11.2

1.4

45.0
M

(')
78.7

6.9

(')
(')

(')
(')
25.5

P)
(')
11.8

358.6

114.9

8
1.8

(1)

(')
154.0

PAID SHIPMENTS *

12, 272. 4

639.4

529.7

263.3

2, 533. 5

1. 307. 4

577.1

25.7

146.2

1, 240. 9

10, 765. 0

523.9

502.9

251.9

2, 180. 0

1, 199. 5

443.5

18.3

144.4

1, 099. 1

5, 348. 4

5, 436. 8

-20.2

381.0

143.7

-.7

171.1
332.3

-.4

115.8

136.6

-.6

699.5

1, 484. 1

-3.6

937.9
265. 0
-3.4

303.7
140.9
-1.0

6.4
11.9

105.2
39.2

571.9

534.9

—7.7

44.5
8.9
230.1
361.4
862.5

10.8
2.0

1.7
.2

6.4

82.7

(')

44.0

7.7

1.4

43.0
72.5

6.8

(')
.1

(')
25.3

11.4

340.7

(')
106.0

(')
1.8

(')

134.1

Commodity detail

3, 339. 3

320.3

147.0

76.9

292.0

575.3

292.3

6.3

69.1

225.2

1, 737. 1
427.6
352.0
303.3
130.2
389.2

164.8
53.7
59.6
16.2
4.4
21.6

54.0
6.0
24.0
14.2
10.7
38.0

5.6
20.4
15.5

119.3
56.9
65.8
12.5
1.1
36.5

218.3
162.6
88.5
53.3
18.5
34.2

172.2
4.8
5.7
39.3
15.1
55.3

1.7

20.2

46.5

1.5

196.0

2.8

.8
.3

17.3

.2
35.2

Other

3.5

9.1

Fuel _

1, 724. 3

40.2

61.1

66.6

659.7

54.8

25.9

1.7

13.3

214.6

1, 326. 3
398.0

3.5
36.7

59.0
2.1

55.6
10.9

426.4
233.3

54.8

25.3
.6

1.7

13.3

128.9

85.7

3, 577. 9

96.9

95.1

51.5

719.1

447.0

52.2

2.3

14.2

430.2

1, 456. 8
741.5
334.5
276.8
136.3
121.4
121.3
119.9
269.4

44.0
9.1
6.6
14.1
2.4
.8
.4
1.0
18.5

6.6

U.4,
27.3
19.7
3.5
2.6
6.5
13.9

18.3

13.4

13.7

1.4

369.3

144.3

46.4

80.0

18.4

7.6

9.1

6.1

37.7

255.3
41.8

3.3
19.5
23.9

6.4
17.2

6.5
73.2

9.0
2.3

10.9
13.8

339.0

37.9

2.1

18.1

16.1

1.3

1.4
6.0
7.5

.7
.7
.1
.1

1.9
4.9
3.6
1.0

5.3

3.9

3.8

1.0

Other

8.3

1, 573. 4

53.7

175.6

37.7

463.2

36.9

61.3

7.7

10.8

220.0

1, 220. 0

211.5

91.7

50.3

51.8
1.3

73.7

97.1

4.1

29.1

6.9

353.7
18.7
51.9
38.8

31.1
5.2

47.0

13.4

6.5
.6

6.8
3.9

215.0

Aircraft, engines, and parts

4.5

Miscellaneous and unclassified 3

550.0

12.6

24.1

19.2

46.0

85.5

11.9

37.0

9.1

Tobacco.

456.5
93.5

10.2
2.4

15.9
8.3

17.7
1.5

22.2
23.8

76.2
9.3

35.7
1.3

5.1

Others

11.9

4.0

See footnotes at end of table.

Table C-4. — Summary of Procurement Authorizations, and Paid Shipments, by Commodity Group and Country of

Destination, Cumulative, Apr. 3, 1948-June 30, 1952 — Continued

[Millions of dollars]

Country of destination

—Continued

Commodity or service

Netherlands and
Indonesia

Norway

Portugal

Sweden

Trieste

Turkey

United
King-
dom

Yugo-

Nether-
lands

Indo-
nesia '

slavia

PROCUREMENT AUTHORIZATIONS

977.3

101.4

253.5

50.5

107.1

31.9

221.1

3, 175. 9

109.2

942.6

101.4

248.4

48.0

107.1

26.8

146.5

3,038.3

102.9

466.4
477.2
-1.0

25.1
76.3

110.2

138.8

-.5

19.8
28.4
-.2

1.6

105.6

-.2

11.3
15.6

15.6
130.9

1, 394. 1

1, 645. 2

-1.1

37.2

65.9

Unclassified commodity adjustments . .

-.2

1.9

2.5

1.1
.4

12.3

7.9
2.0

50.0
(0
P)

77.7

47.5
P)
P)

14.8

(')
(')
30.2

(')

(0
(')
3.6

(')
2.4

0)
5.1

(')

Ocean freight- ... . . - - - ---

6.3

PAID SHIPMENTS 2

905.6

101.4

231.1

41.5

107.1

31.8

172.8

2, 969. 7

873.4

101.4

227.2

39.7

107.1

26.7

110.3

2, 834. 0

451.9

422.5

-.9

25.1
76.3

105.6

122.1

-.5

19.0
20.8
-.2

1.6

105.6

-.2

11.3
15.4

12.8
97.4

1, 392. 1

1, 442. 8

-.8

36.5

Unclassified commodity refunds.. .

1.4
2.5

1.1
.4

7.0

8.0
2.0

50.0
P)

75.7

47.5
P)
8.0

CO
28.3

(')

2.5

(')
1.7

(')

5.1

Commodity detail

303.5

23.7

85.5

19.0

10.9

12.8

874.4

5.0

149.2
56.0
49.1
29.7

4.4
15.1

3.9

46.8
18.0
10.6
2.8

19.0

7.0

12.8

544.8

1.3

2.5

9.3

134.4

75.5

110.4

3.2

.1
1.4

Other - -

19.7

7.3

81.1

37.0

8.4

63.0

13.3

3.0

359.6

20.8

64.8
16.3

36.7
.3

8.4

63.0

12.7
.6

3.0

359.6

9.3

11.5'

305.0

63.0

58.8

1.9

21.2

1.7

13.0

1, 151. 4

53.4

115.3

50.3

69.8

21.5

8.9

7.3

6.8

24.2

1.2
1.2
.6

1.9
6.5
30.9
2.7
1.9
9.8

1.6
2.4
.5.5
3.9
.4
2.3

.2
.2
.3
.3

265.4
429.1
97.7
64.9
60.1
9.2
79.4
79.8
65.8

30.1
1.2
8.2
5.4

.9
3.2

4.5

1.6
.1

58.4

3.6

1.1
4.0

.5
.1

.7
.1

5.1

5.0

150.1

14.3

29.0

10.4

22.1

77.1

201.7

1.3

84.2

34.8

28.7

2.5

5.6

8.7

26.4
1.1
1.0
.4

7.5
.5

18.9

3.1

63.7
12.7

197.2
3.3

1.2

Aircraft, engines, and parts ...

Other transportation equipment. _. _ _

2.5

1.1

33.7

16.9

4.3

246.9

22.4
11.2

15.7
1.2

235.5
11.5

Other' _...

■7

4.3

1 Not applicable.

' MSA/ECA expenditures supplemented by movement reports from U. S. Government agencies; total paid shipments are less than actual movements be-
cause of the time required for receipt and processing of documents requesting payment.

3 Includes refunds for unclassified commodities.

* Assistance received by Indonesia from European Program funds allotted to the Netherlands in 1948 and 1949 prior to transfer of sovereignty in December
1949.

Table C-5. — Technical Assistance Authorizations and Expenditures,1 bv Field of Activity and Participating Country,

Cumulative, Apr. 3, 1948-June 30, 1952

[Thousands of dollars)

Total
authori-
zations

Expenditures by field of activity

Country

Total

Industrial
produc-
tivity

Agricul-
tural

produc-
tivity

Public
adminis-
tration

Trans-
portation
and com-
munica-
tion

Man-
power
utiliza-
tion

Market-
ing

Devel-
opment
of over-
seas ter-
ritories

Tourism

Operating
costs

43, 606. 0

24, 993. 0

10, 181. 8

4, 288. 5

2, 140. 7

1, 986. 4

1. 345. 2

440.4

275.7

144.6

4, 190. 7

939.9

615.3

1,142.5

3, 397. 2

1,370.2

8, 179. 9

140.1

1, 314. 4

2,021.0

1,136.8

1,366.6

807.0

134.4

150.0

3, 370. 9

5,314.5

131.9

1,187.4

6, 559. 6

1, 737. 9

2, 588. 6

225.1
288.3
608.2

2, 555. 2
636.2

6, 818. 0
76.3
288.1
669.7
538.4
450.2
59.5
106.3

112.2
121.6
242.8

1, 486. 8
167.5

2, 344. 3

34.1

71.9

364.8

206.3

247.0

9.6

51.8

67.5

50.4

272.3

318.6

162.1

1, 100. 8

19.7

82.6

126.5

190.6

141.6

30.4

26.3

7.1

2.8

22.8

67.4

1, 662. 1

5.7

8.0

53.8

11.9

1.0

3.7

1.8

15.6
8.1
9.3

80.4

61.8
328.2

11.5

4.2
13.6
14.7
32.5
21.3
239.7

16.6

79.2

5.5

53.9

14.9

10.8

27.5

82.5

1,056.6

50.1

533.7

73.6

29.7

56.4

5.2

26.1
27.7

12.6
6.4

54.0
5.6

32.9

Italy

20.4
22.4
8.5

6.8

4.0

57.7

103.0

10.9

41.1

5.4

10.1

1.9

17.5

8.3

Turkey -..

1, 900. 3

2, 589. 5

21.3

189.5

3, 099. 0

1, 067. 7
3 2, 806. 5

507.2

2, 102. 0

2.0

189.5
1,835.3

86.0

659.1
161.8
18.0

165.8
1.1

491.9

15.0

1.3

76.4

7.9

33.3

117.8

1.5

149.2

OEEC

212.1
648.0

75.8
50.8

157.9
73.5

593.9
159.8

20.7
41.0

3.1

53.9

146.4

8.6

Operating costs, unassigned by field of

2, 806. 5

1 Includes Mutual Defense Assistance Program funds transferred to ECA.

2 Costs incurred prior to assignment to specific country projects. Includes $271.0 thousand authorized and $33.4 thousand expended for MSA contracts with
private organizations.

3 Temporarily in excess of recorded authorizations.

Table C-6. — Value of Industrial Guaranties Issued, by Type of Project and Country of Investment, and Value of
Reductions in Liability, by Type and Country, Cumulative, Apr. 3, 1948-June 30, 1952

[Thousands of dollars]

Type of project or reduction

Total

France

Germany
(Fed. Rep.)

Italy

Nether-
lands

Turkey

United
Kingdom

37, 978. 9

3,596.0

3, 259. 1

20, 616. 3

175.0

2, 808. 3

7, 524. 2

36,151.5

3, 046. 0

1,981.7

20, 616. 3

175.0

2, 808. 3

7, 524. 2

87.5

75.0

175.0

258.8

8, 085. 7

19,117.5

1,841.7

90.0

299.0

3, 158. 0

1,180.4

1,300.0

17.5

465.5

87.5

75.0

175.0

258.8

451.4

1,331.0

19,117.5

2, 808. 3

3, 495. 0

1,841.7

70.0

20.0

299.0

921.5
1,120.1

140.0

2, 096. 5

60.3

1,300.0

17.5
465.5

1, 277. 4

1, 052. 4
225.0

1,052.4
225.0

550.0

Engineering: petroleum refininp

550.0

4, 263. 4

414.1

65.0

2, 700. 0

156.7

927.6

1,869.3

1, 538. 8

855.3

114.1
300.0

1, 689. 7
930.0
80.3

38.4
118.3

27.1

65.0

125.5

775.0

Net outstanding guaranties

33, 715. 5

3,181.9

3, 194. 1

17,916.3

18.3

2, 808. 3

6, 596. 6

• Fees collected by MSA/ECA for guaranties issued amounted to $622.6 thousand.

• Conversions of investors' foreign currency receipts into dollars through regular banking channels. Such conversions must be reported by the insured and
serve to reduce the liability of the U.S. Government.

Table C-7.-

- Value of Informational Media Guaranties Issued, by Media and Country, and Reductions in Liability, by
Type and Country, Cumulative, Apr. 3, 1948-June 30, 1952

[Thousands of dollars]

Type of media or reduction

Total

Austria

France

Germany
(Fed. Rep.)

Italy

Nether-
lands

Norway

Yugoslavia

13, 073. 8

261.0

212.1

10,111.9

83.3

2, 034. 1

323.3

48.0

6, 547. 1

3, 374. 2

2, 862. 8

289.7

6,519.1

2, 063. 9

1,271.6

257.4

28.0
295.3

177.2
55.3
28.5

27.9
55.4

809.9

1,220.4

3.8

212.1

48.0

9, 257. 6

177.2

88.1

7, 557. 1

83.3

1,199.3

152.8

6,611.6

1,831.0

743.2

71.8

117.3

56.5

3.4

51.6
18.4
16.0
2.1

5,615.5

1,321.7

557.4

62.4

9.3
74.0

708.7

329.6

153.7

7.3

109.2
30.9
12.7

3,816.2

83.9

124.1

2, 554. 8

834.9

170.6

48.0

' Applications pending and active total $4,374.8 thousand. Total fees collected amounted to $199.7 thousand.

2 Dollar payments of foreign currency earnings effected through regular banking channels. Such payments must be reported by the insured publishers
and producers and serve to reduce the liability of the U. S. Government.

Table C-8. — Approved Loans, as of June 30, 1952, by Country and Fiscal Year

[Millions of dollars]

Total

Fiscal year

Country

Apr. 3, 1948-
June 30, 1949

Julvl, 1949-
June 30, 1950

July 1,1950-
June 30, 1951

July 1,1951-
June 30, 1952

Total i

1, 306. 0

972.3

143.7

24.7

165.3

68.1
33.3

225.6
16.9
5.3

128.2
95.6

166.7
39.2
36.7
20.4
85.2

384.8

50.9
31.0
172.0

U.7

3 15.5

2.3

10.4

43.2

16.9

2.3

86.3

67.0

146.7

35.0

2.0

41.9

6.0

4.0

1.0

Italy

22.6

16.0

4.2

27.5,

9.2

20.4
38.0
322.7

<36.0
14.2

11.2

47.9

1 Excludes $50.2 million loan to Spain. Spanish loan program is reported separately in Table C-1C.

2 $1.7 million from the Special Reserve Fund for Overseas Territory Development.

3 $6.3 million from the Special Reserve Fund for Overseas Territory Development brought forward from 1949-50 fiscal year funds.
* Includes $1.2 million for technical assistance projects.

Table C-9. — MSA Expenditures for Freight Subsidies on Voluntarj' Relief Supplies and Parcel Post Packages, Cumulative,

July 1, 1948- June 30, 1952

Total

MSA subsidy

Total

Total weight of shipments subsidized

Country of destination

Parcel post
packages

Supplies sent

by voluntary

agencies

Supplies sent
through com-
mercial
channels

Parcel post
packages

Supplies sent

by voluntary

agencies

Supplies sent
through com-
mercial
channels

[Thousands of dollars]

[Thousands of pounds]

» 25, 237. 8

U8,175.0

6, 876. 4

186.4

867, 344

452, 922

399, 177

15,245

24, 757. 6

18, 094. 0

6,477.3

186.4

848, 326

452, 350

380, 731

15,245

1,140.3

38.4

1,040.3

11,308.8

1,263.9

7, 098. 4

230.2

6.7

86.1

2, 544. 4

600.3
31.9

719.4
8, 062. 9

651.4
5, 505. 1

190.9

539.7

6.5

320.6

3, 137. 8

612.1

1, 592. 6

39.3

6.7

70.2

151.8

45, 159

1,156

35,554

399, 407

32, 378

248, 801

7,388

264

3,600

74, 619

15,008

797

17, 985

201, 572

16, 286

137, 628

4,774

30, 134

359

17,545

189, 875

16,052

111,138

2,611

264

3,202

9,551

108.2

Germany (Federal Republic)

7,960
40

Italy

15.9
2,316.1

398
57, 903

76.5

7,165

China' -

277.6
34.2
110.3

10.7

266.9
34.2
98.1

13, 290
2,415
3,312

268

13,023
2,415
3,008

12.2

304

i The subsidy program was in effect June 30, 1952, for the following countries: Austria, Italy, Trieste, and China— all three types of subsidy; France, Ger-
many, Greece, Norway, and India— shipments by voluntary agencies only. MSA authority to pay ocean freight subsidies ended June 30, 1952. Under Public
Law 400, 82d Cong., a program of relief shipment subsidies has been authorized and will be administered by the Department of State.

2 Includes $58.2 thousand for Post Office administrative expenses reimbursed by MSA.

3 Subsidy payments made only on shipments to "areas deemed eligible."

* Freight subsidies to Korea were discontinued after the Presidential letter of Sept. 29, 1950 relieved ECA of its responsibilities in Korea.

Table C-10-

-Spanish Loan Program, MSA Approvals, Loans Signed, and Expenditures, by Type of Project, Cumulative,
Sept. 6, 1950-June 30, 1952, and Fiscal Year 1952

nousands of dollars]

Cumulative through June 30, 1952

Fiscal year 1952

Type of project

Approved
by MSA

Loan agree-
ments signed

Expendi-
tures

Approved
by MSA

Loan agree-
ments signed

Expendi-
tures

Total. ,

52,688

50,188

23,662

31, 988

32. 988

23,662

27,488

25,488

2,797

26,788

24,788

2,797

7.500
6,751
6,700
4, 831
1,706

7,500
4,751
6,700
4,831
1,706

1,432

1,336

7,500
6,751
6,000
4,831
1,706

7,500
4,751
6,000
4,831
1,706

1,432

Electric power plants. _

Plants (fertilizer and steel) ._ _

1,336
29

25. 200

24,700

20, 866

5,200

8,200

20, 866

Wheat

7,250
5,000
3,500
3,600
3,450
2, 000
500

7.250
5.000
3,500
3,500
3.450
2,000

7,222
5,000
2,773
3,500
2,371

2.250

2,250

7,222

5,000

Coal

3,500

2, 773

3,500

450

2.000

500

450
2,000

2,371

Tlnplate . ..

Note.— Public Law 759, 81st Cong., approved Sept. 6, 1950, authorized loan assistance to Spain up to a maximum of $62.5 million. ECA issued 3 notes
to the Treasury Deoartment totaling $62.5 million during the fiscal year 1951. Public Law 249, 82d Cong., approved Oct. 31, 1951, appropriated $100 million
for economic, technical, and military assistance to Spain "in the discretion of the President." This amount was increased to $125 million by Public Law 400
82d Cong., approved June 20, 1952. As of June 30, 1952, negotiations were proceeding between the United States and thfe Government of Spain concerning the
terms under which the latter assistance would be furnished.

Table C-ll. — Status of European Local Currency Counterpart Accounts, by Country, Cumulative, Apr. 3, 1948-

June 30, 1952

(Dollars and dollar equivalents of the local currencies, in millions of dollars]

Country

Total

Austria

Belgium-Luxembourg

Denmark

France

Germany (Federal Republic)
Greece

Iceland

Ireland--

Italy. —

Netherlands _ _.

Indonesia _.

Norway

Portugal.-

Trieste _

Turkey

United Kingdom

Yugoslavia

Funds governed by MSA/ECA legislation

MSA/EC A
dollar
expendi-
tures
requiring
counterpart

10, 826. 0

871.8
25.6

257.3
2, 562. 4
1, 346. 2

905.0

20.9
18.2

1, 059. 1
902.5

» 114.9
365.6

21.2
36.7
143.7

2, 088. 0

86.9

Deposits

10, 599. !

847.1
25.9

257.3
2, 533. 2
1, 346. 2

893.8

20.4

18.2

1, 040. 8

888.0

114.9

364.9

21.2
36.1
134.4
1, 983. 9
73.5

Adjusted dollar equivalents of
deposits •

Total

9, 829. 4

699.6

25.5

225.1

2, 508. 2

» 1, 140. 0

847.2

19.0

18.2

1, 010. 3

815.9
48.2

351.3

20.6

35.6

134. 4

1,890.9

39.4

Reserved

for use by

the United

States

474.6

32.1

1.5

11.3

112.8
60.8
40.5

1.0

51.3

40.0

4.8

16.6

1.2

1.8

6.0

90.0

2.0

Available

for use by

recipient

country

9, 354. 8

667.5
24.0

213.8
2, 395. 4
1, 079. 2

806.7

18.0
17.3
959.0
775.9
43.4
334.7

19.4

33.8

128.4

1, 800. 9

37.4

Deposits

under other

public

laws a

597.5

308.9
"~~3.~6

173.2

Total

available

for country

use

9, 952. 3

779.6
24.0

213.8
2, 704. 3
1, 079. 2

809.7

18.0

17.3

1, 132. 2

775.9

•43.4

334.7

19.4
34.1
128.4

Approved
for with-
drawal

8, 651. 3

527.3
3.8

204.1
2, 702. 8
1, 009. 1

361.1

5.8
W

1, 042. 4
547.6

301.1

18.4

32.3

128.4

1. 762. 8

4.3

With-
drawals

526.7
2.3

118.9
2, 702. 8
1, 008. 0

361.1

5.8

i, 026. 8
505.7

200.9

18.4

31.2

128.4

1, 762. S

1 Adjusted for revisions in exchange rates.

2 Unencumbered portions of deposits under Public Laws 84 and 389, 80th
Cong., subject to MSA/ECA approval for release. Includes certain miscella-
neous deposits in the Greek special account but excludes GARIOA counter-
part funds.

3 After transfer of the equivalent of $109.4 million to the GARIOA counter-
part account in Germany.

* Less than $50 thousand.

5 Aid furnished from European Program funds only.
8 As of July 1, 1952, responsibility for administration of the Indonesia
program was transferred to the Technical Cooperation Administration.

Table C-12. — MSA/ECA Approvals for Withdrawal of European Counterpart Funds Available for Country Use,1 by

Purpose and Country, Cumulative, Apr. 3, 1948- June 30, 1952

[Dollar equivalents of the local currencies, in millions of dollars]

Total ap-
proved

for with-
drawal

Purpose of approval 2

Promotion of production

Monetary

and
financial
stabili-
zation

Housing

and
public
build-
ings

Military
construc-
tion, pro-
duction

and
procure-
ment

Country

Total

Electric,

gas and

other

power

facilities

Transpor-
tation
and
commu-
nication
facilities

Agricul-
ture

Manufac-
turing

Mining

Other
produc-
tion

Other

Total

8,651.3

4, 466. 3

1, 025. 5

957.5

817.6

681.7

481.8

502.2

2,583.3

767.5

460.9

Austria..

527.3
3.8

204.1
2, 702. 8
1, 009. 1

361.1

5.8

1,042,4

547. 6

301.1

18.4

32.3

128.4

1, 762. 8

4.3

399.5
3.8

62.4

1,925.6

753.7

162.8

5.8

823.8

212.8

8.4

16.0

32.2

57.0

2.2

76.5

108.6

58.3

1.4

11.2

234.1

70.7

52.4

123.7

24.3

8.1

2.4

41.1

69.1

103.1

23.8

85.0

26.9

15 9

Belgium-Luxembourg

.6
738.4
182.6

9.8
4.6
1.0

2.8
294.2
86.8

55.1

6.7
249.2
218.7

17.0

1.2

22.6

32.3

130.1
171.4

9.4

283.9

340.6
91.8

4.7

314.4
97.7

65.3

Germany (Federal Republic)

157.7

Greece .._

9.5

123 5

Iceland _

Italy

348.9
13.6
2.7

1.0
29.9
13.9

204.8
166.5

246.5
.4

172.7
88.1

Netherlands.

197.4
292.7

46.3

3 0

Norway.

5.7

Portugal

11.4

2.6

1.0
1.3

8.0

2.4

Trieste

1.0

4.6
2.0
.1

15.2
.2
.2

14.7

60.4

47.5

3.9

1, 706. 7

' Represents deposits under Public Law 472, 80th Cong., as amended, and the equivalent of $589.3 million of counterpart funds deposited under Public
Laws 84 and 389, 80th Cong.

2 Reflects revisions of June 30, 1952 data made through September 30, 1952.

Table C-13. — MSA Approvals for Withdrawal of European Counterpart Funds ' Available for Countrv Use, bv Purpose

and Country, July 1, 1951-June 30, 1952

[Dollar equivalents of the local currencies, in millions of dollarsl

Balance

available

July 1,

1951

Deposits

July 1.

1951-June

30, 1952

Total
available
for ap-
proval

Total
approved
for with-
drawal

Purpose of approval z

Promotion of production

Mone-
tary and
financial
stabiliza-
tion

Housing

and
public
build-
ings

Military
construc-
tion, pro-
duction

and
procure-
ment

Country

Total

Transpor-
tation,
commu-
nications
and util-
ities

Agri-
culture

Manu-
factur-
ing

Other
produc-
tion

Other

Total

1. 395. 2

1, 570. 8

2, 966. 0

1, 665. 0

598.1

169.3

161.7

109.1

157.9

394.0

182.7

460.9

29.5

208.1

58.8

17.1

88.0

268.5

9.7
6.6
152.8
375.3
<42. 5
103.8

1.3

1.9

33.7

27.1

151.9
21.7
36.1
405.7
148.5
212.4

7.4

10.6

214.7

97.4

30.0

2.7
5.8

60.5
126.9

37.4

360.0
21.8
94.9
422.8
236.5
480.9

17.1

17.2

367.5

472.7

43.4

133.8

4.0
7.7

94.2
154.0

37.4

107.7
1.6

85.2
421.3
166.4

32.3

4.9
(•)

277.7
244.4

104.3

1.6

34.0

55.8

124.3
13.6

4.9
W
220.6

36.8

18.6
1.2
2.4

12.1

.2
11.7

«
105.4

36.1

.1
14.2
42.2

8.5

1.2
2.0

12.8
.4
31.2
23.1
43.6
-15.0

5.3

-1.9

6.4

38.3

8.4

3.7

41.8

9.4
283.9

81.6

41.0

4.2

1.1

9.5

5.0

47.1

Italy

66.1

48.2

8.9

197.4

46.3

100.2

3.0

5.9

94.2

116.0

4.3

8.4

5.8

22.8

1.0

2.7

.8
4.8
1.0

5.7

-1.5

8.9

91.8

9.4

.1
.2

1.0

3.5

2.4

Turkey..

60.4

47.5

3.9

11.0

63.0

4.5

' Represents deposits under Public Law 472, 80th Cong., as amended, and the equivalent of $21.7 million of counterpart funds deposited under Public Laws
84 and 389, 80th Cong.

2 Reflects revisions of June 30, 1952 data made through September 30, 1952.

s Less than $50 thousand.

* Counterpart of aid furnished from European Program funds.

Table C-14. — Status of United States Portion of European Counterpart Funds,1 bv Countrv, Cumulative, Apr. 3, 1948-

June 30, 1952

[Dollar equivalents of the local currencies, in thousands of dollars]

Available for United States use

Obligations

Transfers

to U. S.

Treasury3

Unobli-

Country

Deposits 3

Transfers
between
Missions

Net
available

Total

Strategic
materials

Informa-
tion and
other

Adminis-
tration

Technical
assistance
operating
expenses

gated al-
locations
to

DMPAi

Total

474, 542

304. 067

188, 159

62, 499

51, 317

2,092

74, 281

13, 372

32. 118
1,451
11. 342
112. 835
60,749
40,515

962
915
51, 312
39. 996
4,836
16, 557

1,218
1.779
5, 975
89, 959
2,023

32. 118
1, 451
11, 342
116, 795
58,168
40, 515

962
915

51, 712
38. 417
4.836
16, 557

1,418
1.379
5, 975
89, 959
2.023

6,621
824

4,568
81. 757
38, 691

8,810

110

391

43, 927

14, 046

4,385

14, 553

885

467

2,550

81. 170

312

1,151

2,662
31, 093
27, 857

5,391

4,000

116

834

21, 735

7,927

1,300

21, 515

1,737

253

44
216
857

1,874
24

1,449

693

990

27, 653

2,900

2,116

101

326

5,456

1,259

1,170

727

572

251

1,616

3,750

288

1,276

17
150
73
30

14, 022
84
1,791
5 23, 920
2,013
16, 737

409

25
4,595
3,283

5,073

3,960
-2, 581

998

3.311

2,059

104

Italy

400
-1, 579

16, 806
10. 977
3,173
13, 525

266

337

192

1,076

286

794

2,146

" 2, 959

141

200
-400

61
75, 197

16
349

211

United Kingdom.

1,087

11 Represents deposits under Public Law 472, 80th Congress, as amended.

2 Includes interest received ou bank deposits.

3 Includes transfers to TJ. S. Treasury, other U. S. Government agencies and
MSA Far East Program, but excludes temporary advances to Mutual
Defense Assistance Program (MDAP) and U. S. Information Service (USIS).

4 Allocated to Defense Materials Procurement Agency (DMPA) for
strategic materials.

s Includes transfer to MSA/ECA Far East Program: France, $864 thousand;
and United Kingdom, $2 001 thousand.

fl As of July 1, 1952, administration of the Indonesia program was trans-
ferred to the Technical Cooperation Administration. The unexpended
balance of the United States portion of Indonesian counterpart funds was
also transferred to TCA.

Table C-15.— Status of United States Portion of European Counterpart Funds,1 by Country, July 1, 1951-June 30, 1952

[Dollar equivalents of the local currencies, in thousands of dollars]

Country

Unob-
ligated
balance
July 1,
1951

Deposits
July 1,

1951-June
30, 1952

Transfers
between
Missions

Net
available

for

United

States use

Obligations

Total

Strategic
materials

Admin-
istration

Informa-
tion and
other

Technical
assistance
operating
expenses

Transfers
to U. S.
Treas-
ury *

Unob-
ligated
alloca-
tions to
DMPA<

Total

Austria

Belgium-Luxembourg

Denmark

France

Germany (Federal Republic)

Greece

Iceland

Ireland

Italy

Netherlands

Indonesia a

Norway

Portugal

Trieste

Turkey

United Kingdom

Yugoslavia

150, 883

85, 113

235, 996

117,049

81, 755

16, 910

16, 292

2,092

22, 753

13, 372

10, 615

5,988

16, 282

31, 297

21, 058

193

143

4,194

20, 013

1,404

9,681

336

2,228

27, 326

(')

7,740

5 948

1,897

21,588

10, 905

11,095

485

566

11,365

5,132

1,582

337

294

2,398

6,711

2,023

3,960
-2, 581

400
-1, 579

200
-400

18, 355

988

7,885

41, 830

39, 621

32, 153

678

709

15, 959

23, 566

1,450

11, 263

622

230

4,626

34, 037

2,023

2,736

361

2,816

29, 982

22,144

5,115

185

12,054

2,222

999

10, 182

375

109

1,201

26, 222

312

1,151

2,100
13, 551
19, 402

3,918

6,487
1,077

9,912
175

23, 982

358
273
324

8,767

1,045
606
26
148

1,590
395
958
182
184
47
630

1,089

1,206

310

6,388

1,690

588

3,827

677

555

802

1,276

150

4,144
84
86

730

12, 070

201
25

715

257

5,073

3,311
2,059

104
337
192

153

16
349

2,146

1,985

141

211

1,087

1 Represents deposits under Public Law 472, 80th Congress, as amended.

2 Includes interest on bank deposits.

3 Includes transfers to U. S. Treasury, other U. S. Government agencies
and MSA Far East Program, but excludes temporary advances to MDAP
and USIS.

< Allocated to the Defense Materials Procurement Agency (DMPA) for
strategic materials.

' Balance of deposits after deducting advances repaid equivalent to $200
thousand.

8 Aid furnished from European Program funds.

7 The equivalent of $90 thousand of advance deposits made prior to June 30,
1951, is included in fiscal 1952 deposits.

PART D

Far East Economic and Technical Assistance Program

Table D-l. — Allotment Summary, by Recipient Country and Fiscal Year, June 5, 1950-June 30. 1952

[Thousands of dollars]

Total

Recipient country

General ac-
count and
Far East
inventory '

Period

Burma 2

China
(Formosa)

Indochina,

Associated

States

Indonesian
Republic 3

Philippines

Thailand

Total, June 5, 1950-June 30, 1952

330, 457

24, 400

179, 514 (3 5, 900)

47, 039 (< 745)

15, 973

47,000

15. 870

661

June 5, 1950-June 30, 1951.

163, 447
167, 010

10, 400
14, 000

98. 034 (3 5, 413)
81, 480 (» 487)

22. 478 (< 750)
24, 561 (< -5)

7, 973
8,000

15, 000
32, 000

8,876
6.994

686

July 1, 1951-June 30, 1952 ...

-25

> Mainly for services provided by the U. S. Public Health Service in connection with health problems common to several countries, not assignable to
specific country.

' Responsibility for administration of the programs for Burma and Indonesia was transferred to the Technical Cooperation Administration as of July 1, 1952.
3 Portion of funds made available, from obligations originating with ECA's China Program prior to June 5, 1950.
* Portion of funds made available from Mutual Defense Assistance Program.

Table D-2. — Authorizations and Paid Shipments, bv Major Category of Assistance and Country of Destination, for the

Period Jan. 1-June 30, 1952 »

[Thousands of dollars]

Total

Country of destination

Commodity or service

Burma

China
(Formosa)

Indochina,
Associated

States

Indonesian
Republic

Philip-
pines

Thailand

General ac-
count and
Far East
inventory a

AUTHORIZATIONS

83,312

8.822

31,021

13, 058

6,050

19, 969

4,232

160

73,238

6,301

27, 733

11, 539

4,664

19, 498

3,511

-8

11, 248

62,017

-26

-286
6,587

7,087
20, 646

3,762

7,786

-10

292
4,373

273

19, 242

-16

120
3,390

-8

1,344
5,285
3,445

475
2,046

522

467

2,299

377

1,095

299
1,087

-74

469

28
718
-25

121

PAID SHIPMENTS

73, 922

4,539

45,164

11, 242

3.332

7,325

2,037

283

65, 376

3,808

40, 273

10, 221

2,916

6,754

1,411

-7

31, 732
33, 651

-8

1,267
2,541

22, 969

17, 305

-2

3,464
6,757

907
2,009

3,082

3,678

-6

42
1,369

-7

Unclassified commodity refunds

1,420
2,008
5,118

525

205

385

227

4,280

60
146
815

292
125
-1

500

543

262

1 Data represent net authorizations and expenditures during the period— increases less decreases: negative figures occur when the value of all decreases,
including the adjustment of prior year accounts, is greater than the value of all increases. Expenditures during a period may exceed authorizations to the
extent that such expenditures include payments for goods authorized in prior periods.

2 Mainly for services provided by the U. S. Public Health Service in connection with health problems common to several countries, not assignable to
specific country.

Table D-3. — Summary of Authorizations, and Paid Shipments, bv Commodity Group and Country of Destination,

July 1, 1951-June 30, 1952 >

[Thousands of dollars

Total

Country of destination

General
account
and Far
East in
ventory !

Commodity or service

Burma

China
(For-
mosa)

Indo-
china,
Asso-
ciated
States

Indo-
nesian
Republic

Philip-
pines >

Thai-
land

AUTHORIZATIONS

167, 014

14, 000

81, 480

24,564

8,000

32,000

6,994

—25

147, 765

10, 094

72, 593

21, 845

6,532

31, 191

5,949

—440

50, 885

97, 079

-190

-8

2,189
7,304
9,756

147, 002

1,286
8,808

37, 735
34, 860

6,108

15, 926

-190

1,331
5,202

4,305
26, 893

120
5,829

—440

-2

376

834
7,676

90, 478

-6

-73
806
76

12, 020

1,475
2,431

584

2,089

* 21, 969

299

1,174

-5

5,899

-99

1,224

-80

6,188

164

PAID SHIPMENT9

9,994

453

133, 117

8,890

82,643

20, 119

5,144

11,274

5,147

67, 662

65, 345

118

-8

2,493
2,655
8,737

60,274

1,587
7,303

53, 544
29, 000

6,145

13, 958

1,045
4,099

5.298
5,982

5,003

102

-2

629

340

6,967

42, 274

-6

670

4,953

792

295

134

181

1,535

1,937

495

173

1,045

190
729
121

186

267

Commodity detail

34, 397
6,139
5,848
1,536
1,145
1,209

28, 130
6,139

5,848

303

1,045

4,856

1,536

1,053
1,103

92
5

Other

Fuel -.- - -

7,991

6,087

1,864

7,980
11

6,087

1,864

50, 787

6,133

28, 994

8,669

1,830

3,843

1,318

16, 120
11, 085
8,609
7,536
2,399
1,992
1,323
1,724

1,663

1,972

649

1,600

10, 570
7,187
2,224
4,511
2,081
331
878
1,212

3,675
1,430
3,074

171
94

164

312

491
989
107
1
1,389
445
109

4
832
481

841
766
223

Iron and steel mill materials and products, including ferro-alloys

107

Other

342

17, 729

1,620

3,935

5,632

1,485

1,891

3,166

11,475
4,351
1,903

1,312
308

3,122
449
364

2,700

2,686

245

839

1,240
651

2,261
257
647

646

6,335

1,113

1,252

2,028

784

548

610

2,028
1,234
3.073

410

157
701
394

757
533
737

249

109

345

Other...

703

535

438

265

1 Data represent net authorizations and expenditures during the period-
increases less decreases; negative figures occur when the value of all decreases,
including the adjustment of prior year accounts, is greater than the value of
all increases. Expenditures during a period may exceed authorizations to
the extent that such expenditures include payments for goods authorized in
prior periods.

3 Mainly for services provided by the TJ. S. Public Health Service in con-
nection with health problems common to several countries, not assignable to
specific country.

a Excludes $2,300 thousand authorized and $399 thousand expended under
a special Philippine program for miscellaneous commodities involving the
use of Joint United States Military Assistance Group (JUSMAG) dollars
for which the Philippine Government, with MSA approval, has advanced
an equivalent amount of pesos from existing counterpart funds.

4 Includes expenditures totaling $213 thousand financed by ECA with
Mutual Defense Assistance Program funds.

Table D-4- — Summary of Authorizations, and Paid Shipments, by Commodity Group and Country of Destination,

Cumulative, June 5, 1950-June 30, 1952

[Thousands of dollars]

Total

Country of destination

Commodity or service

Burma

China '
(For-
mosa)

Indo-
china,

Asso-
ciated
States '

Indo-
nesian
Republic'

Philip-
pines

Thai-
land

General
Account *

AUTHORIZATIONS

330, 456

24, 400

179, 514

47, 038

15, 973

' 47, 000

15, 870

661

296, 984

18, 918

163, 547

42, 348

13, 487

45, 116

13, 567

111,075

185, 865

1,602
17, 316

89, 762

73, 785

-2

10, 285

32, 013

1,406
12, 082

7,896

37, 227

-6

125
13, 442

16, 224

17, 248

5,382
100

2,977
12, 989

922
3,768

2,391
95

1,808
76

2,083
220

661

Field of activity

948

26, 692

76,901

43. 942

9,608

4,284

6,035

3,661

148, 458

9,929

948

7,301

2.487

6,368

3,962
3,699
6,991
1,545
1,950
1,127
1,150
3,924
53

731

42, 607

16, 062

4,748

1,384

208

381

107. 171

6,220

3.992
6,626

561
1,523

950
2,098

134

5,621

16, 566

9,458

672

4,624
4,916
4,499
1,101

461

363

1,214

25, 264

3,075

1,823

561

12, 099

200

355

129

246

PAID SHIPMENTS

177. 225

10, 246

116,078

25, 285

6,099

12, 021

6.867

630

159, 830

9,040

105, 664

22, 969

5,184

— 11.274

5,699

89. 977

69. 743

110

1,587
7,454

74, 303

31, 363

-2

7,698

15, 256

1,045
4,139

5.298

5,982

-6

5. 550

102

6,063
11,332

1,166
40

1,303
9,110

402
1,914

823
93

738
9

1,002
166

630

Commodity detail

63, 092

54, 638

2,386

1,045

4,953

36, 973
12, 771
9,346
1, 536
1,145
1,321

30, 364
12. 771
9,346

641

1,045

4,856

1,536

1,053
1,103

92
5

Other. .

209

Fuel

9,927

7,638

2,232

9,910
17

7,638

2,232

61, 526

6,219

37,900

10, 117

1,869

3,843

1,579

25. 317
11,085
9,402
7,590
2,400
2.016
3.716

1,563

1,972

718

1,500

18, 664
7,187
2,311
4.566
2,081
331
2,760

4,779
1,430
3.412
171
94
171
60

312
491
989
107
1
1,389
554

1,092

481

880
766
223

Iron and steel mill materials and products, including ferro-alloys. .

125
342

Other

18, 451

1,653

3,935

6,053

1,486

1,891

3,433

11,914
4,633
1.903

1,312
341

3,122
449
364

2,949

2, 858

246

840

1,240
651

2,451
335

647

Other...

646

6,834

1,144

1,553

2,182

784

548

624

2,072
1,535
3,228

414

157

1,001

394

795
533
853

250

109

346

Other

730

535

439

277

1 The data shown exclude authomations and expenditures for China
(including Formosa) from ECA funds prior to June 5, 1950, but include
authorizations and expenditures against unutilized funds released from pre-
vious programs for China.

2 Includes authorizations totaling $745 thousand issued, and expenditures
totaling $494 thousand financed by ECA with Mutual Defense Assistance
Program funds.

3 Excludes procurement authorizations and expenditures for Indonesia
from European Program funds allotted to the Netherlands in 1948 and 1949.

* To be used for services provided by the TJ. S. Public Health Service in
connection with health problems common to several countries, not assignable
by specific country.

s Excludes $2,300 thousand authorized and $399 thousand expended under
a special Philippine program for miscellaneous commodities involving the
use of Joint United States Military Assistance Group (JTJSMAG) dollars
for which the Philippine Government, with MS A/EC A approval, has ad-
vanced an equivalent amount of pesos from existing counterpart funds.

Table D-5. — India Program,1 Procurement Authorizations, and Paid Shipments, by Commodity Group, Cumulative,

Sept. 9, 1950-June 30, 1952

[Thousands of dollars]

Commodity group

Procurement
authoriza-
tions

Paid ship-
ments

194, 500

176,328

194, 500

194, 500
194, 500

176, 328
176, 328

Commodity detail

170,423

128, 597

41, 826

2 24, 076

153,040
153, 040

Wheat

Unclassified _ . _ _ _

'- 23, 288

i Authorizations and expenditures pursuant to India Emergency Food Aid Act of 1951, Public Law 48, 82d Cong., June 15, 1951, and Presidential letter
Sept. 9, 1950.

► 3 Includes $4,500 thousand authorized and expended, completing payments on authorizations for grain sorghums issued against funds appropriated to
ECA for "the general area of China," as directed by Presidential letter dated Sept. 9, 1950.

Table D-6. — Status of Far East Local Currency Counterpart Funds, Cumulative, June 5, 1950-June 30, 1952

[Dollar equivalents of the local currencies, in thousands of dollars]

Item

Total

Burma l

China
(Formosa) !

Indochina,
Associated

States

Indonesian
Republic '

Philippines

Thailand

136, 059

2,943

94, 170

15,624

* 4, 277

14, 575

4,470

4,145
131, 914

412
2,531

1,819
92, 351

776
14, 848

662
13,913

4,277

116, 379

2,165

82, 540

i 22, 802

7,020

Military construction and materiel..

34, 479

26, 123

24, 193

12, 950

5,963

3,856

3,302

1,663

1,573

1,107

1,170

34, 479

15, 676

14, 221

12, 950

859

2,343

743

918

240

979
160

9,358
4,110

69
5,026

676

Public health

608

3,486
2,441

849
1,634

290
1

633

1,239
550
14

548

75
188
67

1 Responsibility for administration of the programs for Burma and Indo-
nesia was transferred to the Technical Cooperation Administration as of
July 1, 1952.

2 Includes new Taiwan dollars deposited in the special account on Formosa
for aid furnished under the China Program prior to June 5, 1950. Excludes
mainland deposits and proceeds of sales of goods safehavened at Hong Kong
at_the time of evacuation.

3 Excludes an unused balance of European Program counterpart funds
equivalent to $43,421 thousand. These funds were deposited for grant aid
furnished under the European Program while Indonesia was a dependency
of the Netherlands.

* Approvals exceed available funds and are subject to future deposits.

Table D-7.

-Status of Far East Local Currency Counterpart Funds for United States Use, Cumulative, June 5, 1950-
June 30, 1952

[Dollar equivalents of the local currencies, in thousands of dollars]

Item

Total

Burma '

China
(Formosa)

Indochina,
Associated

States

Indonesian
Republic '

Philip-
pines

Thailand

Other

MSA
offices

7,919

795

1,381

1,937

1,838

825

615

3,683
4,236

412
383

1,325
56

776
1,161

662
163

5118
107

1,838

6,165

629

1,256

1,348

2 1,386

750

514

282

5,783
345
37

614
15
(')

1,241
15
(<)

1,078

265

1,344
10
32

742

482
32

Information ...

Special services a _ _ ...

i Unexpended balances available to the United States as of June 30, 1952,
were transferred to the Technical Cooperation Administration in conjunc-
tion with the transfer of the Burma and Indonesia programs.

2 Excludes the equivalent of $3,173 thousand expended for strategic mate-
rials while Indonesia was a dependency of the Netherlands.

3 Includes advances for technical assistance.
* Less than $500.

Table E-l.

PART E

Technical Cooperation Administration Program

-Value of Program, by Tvpe of Activity, and bv Country and Area, Fiscal Years 1951 and 1952, as of

June 30, 1952

(Thousands of dollars]

Country and area

Total

Agriculture,
forestry,

and
fisheries

Health,
welfare,

and
housing

Industry
and labor

Education

Natural
resources

Economic
develop-
ment

Trans-
porta-
tion and

com-
munica-
tions

Govern-
ment
adminis-
tration

and
services

' 207, 686. 8

79, 543. 3

21.375.6

18, 980. 7

15, 138. 0

11,876.6

5, 953. 2

3, 823. 0

896.2

' 110, 720. 3

30, 655. 5

9, 047. 6

4, 552. 2

7, 719. 2

5,031.7

2, 870. 5

623.8

219.7

743.9

1,231.6

26, 694. 5

763.7

14,930.6

50, 000. 0

5, 020. 3

4, 052. 0

2, 045. 8

1,839.4

461.5

88.1

2, 849. 0

237.6

2 880. 0

11,528.0

227.6
13, 536. 2

234.0

3.0

6, 065. 7

107.1

36.3

33.6

36.2

100.0

3. 792. 2

72.3
575.3

40.0
91.4
510.3
170.9
83.8

123.0
157.2
492.8
146.7
501.1

17.5

22.0

3, 977. 5

18.4

154.9

315.5
15.8
33.9

12.4

4.9

9.1

1, 753. 8

900.3

270.3

532.3

48.0

620.6
630.6
475.3
129.0
25.2

231.2
136.3

448.1

286.8

137.2

846.5

12.4

88.1

1,324.1

1, 662. 0

1, 823. 9

293.1

145.3

21). 0

118.3
223.7
762.5
186.3
100.0

130.0
38.1
69.5

56.3

12.2

37.9

64.9

Regional - - -

741.4

720.8

58.9

3.5

66, 600. 4

37, 480. 6

3, 458. 3

14, 037. 4

1,738.9

5,591.0

1, 530. 9

2. 674. 9

88.4

425.1
40.3
18.2
54,451.8
32.9
270.0
11,1S4.3
177.8

57.2

18.2

34, 315. 5

1.0

63.3

3, 024. 9

93.7

113.2
39.8

148.5

12.5

2. 088. 1

9, 384. 3
.1

621.6
31.8

5, 342. 4

1,207.0

1, 456. 3

36.6

145.8
1, 130. 7

55.6
44.5

.7
310.7

4.6
1.214.0

4, 653. 0

754.7
177.8

51.8

30, 266. 0

11,407.2

8, 869. 7

391.1

5, 679. 9

1, 253. 9

1,551.8

524.3

588.1

2, 126. 0
4,174.3
1, 592. 8
1, 062. 0
1,871.0
223.2
358.8

1, 976. 5
795.3
492.5

1,311.4
989.2

1,195.2
884.2

1,811.9

2, 837. 4

3, 478. 3
636.0
343.2

2, 106. 8

660.2

525.5

728.7

311.8

1,370.2

218.5

67.9

597.4

354.0

300.9

769.1

392.4

150.3

241.5

925.6

1, 066. 3

1, 780. 2

340.9

12.7

593.1

618.2
1, 352. 5
654.3
594.1
363.8
3.2

640.5
846.7
30.5

84.7
539.5
10.9
48.2
3.3

40.3
777.0
68.9
41.6
38.0

73.9
12.1
8.6
57.3
47.2

8.2

82.3
72.6
2.6

38.7

Chile —

18.3

6.4

48.5

1.0

271.0

441.0

45.4

8.8

19.9
25.9
32.5

766.9
343.9
182.5
487.6
284.2
555.0
254.1
318.2
418.5
717.2
104.8
262.5
588.2

26.8
14.1

19.0

88.6
.8

10.9

El Salvador

4.6

38.7
31.5
27.1
13.8
29.5
151.9
52.5
24.1

16.0

1.0

53.5
3.3

224.4

6.9
384.7
53.4

19.0
7.6

29.8

17.0

306.2
482.1
1, 064. 6
785.0
131.8

11.9

55.0
25.3
37.9

1.5

Paraguay _.

12.0

21.3

81.8
.2

77.5
23.7

18.7

15.5

68.0
23.0

103.7

401.9

138.6

258.3

1 Includes Israel Relief not broken by activity.
^Includes consumers goods.

Table E-2.-

-Number of United States Personnel in the Field, by Type of Activity, and by Country and Area, as of

June 30, 1952

Country and area

Total

Agricul-
ture,
forestry,
and fish-
eries

Economic
develop-
ment

Health,
welfare,

and
housing

Education

Natural
resources

Govern-
ment
adminis-
tration

and
services

Industry
and labor

Trans-
portation
and com-
munica-
tions

Grand total __

972

314

214

183

104

343

122

124

15
7
1

33
2

18
4

4
4

3
1
2

1
1
6
3

4
21
6
2
3

6
14
6

Regional . ..

104

4
15

11
1

3
5

525

208

113

39
81
17
25
29
6
6
34
20
10
18
20
27
19
28
39
54
10
3
40

21
4
2
3

25
3
6
4

10
13
1

4
6

Brazil.

1
2

4
1
1

Cuba

2
3
3

1
9

8
5
2
6
2
9
3
6
7
10
2
3
7

Haiti

3
3
2
2
3
5
4
2

11
1

4
9
6

1
4

Note.— Total TCA field employment as of Dec. 31, 1951, was 1,724, including the 972 employees listed above, 111 employees of United States diplomatic
missions engaged in Point 4 activities, 18 American teachers at foreign educational institutions, and 623 local employees. In addition, 11,287 local employees
were engaged in Servicio programs in the American Republics, financed jointly by Point 4 and the host governments.

Table E-3. — Number of Foreign Nationals Training in the United States under
the TCA Point 4 Program, bv Country of Origin, and by Supervising Agencv,
as of June 30, 1952

Country of origin

Trainees

and
leaders

Country of origin

Trainees

and
leaders

Grand total___

American Republics, total

Bolivia

Brazil

Chile

Colombia

Costa Rica

Cuba

Ecuador

El Salvador.

Haiti

Honduras

Mexico

Nicaragua

Panama

Paraguay

Peru

Uruguav

Venezuela

Near East and Africa, total

Egypt

Iran

Iraq

Israel

Jordan

Lebanon

Liberia

Libya

South Asia, total

Afghanistan

Ceylon

India

Nepal

Pakistan

17
21
24
10
2
4
5
1

BY SUPERVISING AGENCY 2

Trainees

and
leaders

Total

Department of Agriculture

Federal Security Agency

Institute of Inter-American Affairs

Department, of the Interior

Department of Commerce _ _!

Department of Labor

Bureau of the Budget

Federal Communications Commission
Housing and Home Finance Agency..

87
66
56
38
17
10
1

i Includes 13 trainees studying in Puerto Rico.

■ In addition to these supervising agencies, the following U. S. Government agencies were participating
in the TCA Point 4 Program: Tennessee Valley Authority, Post Office Department, and the Department of
the Army.

Table E-4. — Funds Authorized, and Obligated for Bilateral Programs under the
TCA Point -1 Program, Including Institute of Inter-American Affairs Programs,
by Country, for Fiscal Years 1951 and 1952, as of June 30, 1952

[Thousands of dollars]

Authorized

Obligated

Country

Total

Fiscal year
1951

Fiscal year
1952

Total

207, 586. 8

16, 039. 5

191, 547. 3

200, 186. 2

30, 266. 0

10, 894. 8

19, 371. 2

27, 811. 1

2, 126. 0
4, 174. 3
1, 592. 8

1, 062. 0
1,871.0

223.2
358.8

1, 976. 5
795. 3
492.5

1,311.4
989.2

1,195.2
884.2

1,811.9

2, 837. 4

3, 478. 3
636.0
343.2

2, 106. 8

571.1

1. 342. 7

413.6

302.6

552. 6

64.5

131.9

568. 5

223.9

284.4

609.9

303.7

467.1

278.0

469.3

1, 230. 3

1, 609. 2

213.3

198.8

1, 059. 4

1, 554. 9

2, 831. 6
1,179.2

759.4

1,318.4

158.7

226.9

1, 408. 0

571.4

208.1

701.5

685.5

728.1

606.2

1,342.6

1, 607. 1

1, 869. 1

422.7

144.4

1, 047. 4

1, 964. 9

3, 813. 0

Chile

1, 502. 4

1,018.6

1, 819. 5

Cuba

209.2

347.1

1, 950. 2

El Salvador

742.4

470.8

Haiti

1, 190. 1

924.2

1, 097. 3

811.3

1,763.4

2, 240. 8

3, 281. 2

571.4

324.2

1, 849. 1

177, 320. 8

5, 144. 7

172, 176. 1

172, 375. 1

425.1

40.3

18.2

743.9

1,231.6

54. 451. 8

32.9

26, 694. 5

763.7

14, 930. 6

50, 000. 0

5, 020. 3

4, 052. 0

2, 045. 8

1, 839. 4

270.0

11, 184. 3

461.5

88.1

3. 026. 8

76.5
14.2

348.6

26.1

18.2

639.0

1,181.6

53, 800. 0

30.0

25, 102. 9

750.9

14, 843. 8

50, 000. 0

4, 884. 7

3, 948. 0

1, 218. 4

1, 684. 8

225.1

10, 705. 6

370.4

321.8

36.1

46.1

104.9

50.0

651.8

2.9

1,591.6

12.8

86.8

485.4

1, 199. 5

53, 393. 9

32.1

25, 200. 0

467.4

14,561.7

50, 000. 0

135.6
104.0
827.4
154. 6
44.9
478.7
91.1
88.1
628.8

4,849.9

3, 619. 3

Liberia ...--.

Libya.

Nepal _

Pakistan

1, 857. 7

1, 704. 8

234.9

11,026.8

345.5

88.1

2, 398. 0

2. 904. 1

PART F

Economic Indicators

Table F-l. — Industrial Production Indexes for Western Europe, 1938 and 1949-52

[1948=100]

Country

Total

Austria

Belgium

Denmark

Prance

Germany (Fed. Eep.)

Greece

Ireland

Italy

Luxembourg

Netherlands

Norway.

Sweden

Turkey. _

United Kingdom

100

118
82
77
90

132
74

101
72

1949

133
100
107
110
144

119
114
110
95
112

108
105
105
107

158
102
118
111
182

150
126
126
100
123

117
110
108
116

137

179
117
121
125
218

172
131
144
122
129

123
114
113
120

1950

1st qtr. 2d qtr. 3d qtr. 4th qtr

119

148
98
114
109
155

128
120
118
91
116

122
110
105
117

123

155
100
122
112
171

141
130
125
96
120

120
113
108
116

120

158
98
111
103

187

158
125
122
101
124

103
99
106
110

171
113
126
121
214

172
131
138
111
135

124
117
113
124

1st qtr. 2d qtr. 3d qtr. 4th qtr.

136

165
116
127
124
208

161
124
143
118
133

127
116
107
120

184
120
125
130
219

171
138
148
122
130

126
119
114
122

183
113
110
115
211

173
128
140
124
121

113
103
108
114

186
119
121
131
233

181
133
146
125
132

125
119
123
122

1st qtr. 2d qtr.

180
116
117
137
220

173
128
143
127
127

130
116
(')

123

183
114
118
134
228

168
129
146
122
128

127
119

(')

1 Not available.

Table F-2. — Steel Production in Western Europe, 1938 and 1948-52
[Monthly average, in thousands of metric tons]

Country

1938

1948

1949

1950

1951

1952

1st qtr.

2d qtr.

3d qtr.

4th qtr.

1st qtr.

2d qtr.

Total i

3,755

3,342

3,908

4,249

4,701

4,533

4,788

4,583

4,920

5,047

4,996

Austria..

310

731

1,492

194

81
880

54
530
705
463
177
105
1,260

70
510
907
763
171
114
1,318

79
518
879
1,010
197
121
1,380
65

673

1,036

1,125

253

125

1,325

650

1,006

1,004

222

121

1,391

677

1,039

1,143

262

128

1,371

669

1,000

1,160

254

111

1,207

698

1,099

1,194

276

140

1,328

709

1,122

1,270

289

140

1,353

Belgium-Luxembourg

657

France (including the Saar)

1,139

Germany (Fed. Eep.)

1,240
298

Italy....

141

1,363

Other

1 Figures do not necessarily add to the total, due to rounding.

Table F-3. — Coal Production in Western Europe, 1938 and 1948-52

IMonthly average, in millions of metric tons]

Country

1938

1948

1949

1950

1951

1952

1st qtr.

2d qtr.

3d qtr.

4th qtr.

1st qtr.

2d qtr.

Total'

39.8

33.2

36.2

36.8

38.5

38.6

39.5

36.6

40.3

40.9

Belgium

2.5

11.4

5.1

1.1

19.2

2.2
7.3
4.6
0.9
17.7
.5

2.3
8.6
5.5
1.0
18.2
.6

2.3
9.2
5.5
1.0
18.3
.5

2.5
9.9
5.7
1.0
18.8
.6

2.4
9.9
5.9
1.1
19.0
.6

2.6
9.8
5.8
1.0
19.2
.6

2.3
9.7
5.5
1.0
17.5
.6

2.7

10.2

5.9

1.0

19.5

2.7
10.6
6.2
1.1
19.9
.6

Germany (Fed. Rep.)

9.7

France (including the Saar) . . .

5.7

Netherlands.., ._

United Kingdom

1.0

19.1

Other

1 Figures do not necessarily add to the total, due to rounding.

Table F-4 — Electricity Production in Western Europe, 1938 and 1948-52
[Monthly average, in billions of kilowatt-hours]

Country

1938

1948

1949

1950

1951

1952

1st qtr.

2d qtr.

3d qtr.

4th qtr.

1st qtr.

2d qtr.

Total'. _

10.5

15.4

16.6

18.8

21.0

21.2

20.2

19.9

22.5

23.2

20.8

.2
.4
1.5
2.7
1.3

.2
.8
.7
.4
2.0
.2

2.4

2.6

1.9

.3
1.0
1.2

.7
3.9

2.5

3.2

1.7

.4
1.3
1.3

.6
4.1

2.7

3.7

2.1

.5
1.4
1.5

.8
4.6

3.1

4.3

2.5

.5
1.4
1.6

.9
5.0

3.2

4.2

2.2

.5
1.5
1.7

.7
5.6

3.1

4.0

2.4

.4
1.4
1.6

.9
4.7

.8
2.9

4.2
2.5

.4
1.4
1.5
1.0
4.2

3.4

4.7
2.4

.6
1.5
1.7

.8
5.5

3.5

4.8
2.4

.5
1.7
1.8

.8
5.9

3.2

4.2

Italy

2.5

Netherlands- _

1.5

1.6

1.0

4.5

Other

1 Figures do not necessarily add to the total, due to rounding.

Table F-5— Gold and Short-Term Dollar Assets of OEEC Countries and Spain, 1938 and 1948-52

[Millions of dollars]

Country

1938
Dec.

1948
Dec.

1949

1950

1951

1952

Sept.

Dec.

June

Dec.

Mar.

June

Sept.

Dec.

Mar.

June

828

2.952

219

216

1,057

420

(s)

62
838

77
794
179

27
2

29
428
290
130
291
130
180
1,836

92
935

64
734
148

30
4

32
542
328
112
232
132
174
1,425

92
913

70
740
149

36
4

32
560
366
120
234
160
164
1,688

85
871

67
787
228

44
3

32
543
457
117
228
184
162
2,422

92
846

76
835
222

36
3

26
577
505

257

205

164

3,300

95
882
2 79
827
242

38
3

26
568
510
104
275
218
167
3,758

94
845
2 76
877
357

44
3

26
538
446
110
283
228
162
3,867

107
908
2 76
836
503

45
5

33
567
446
153
306
217
162
3,269

107
898
2 76
902
434

49
5

33
641
465
150
331
224
165
2,335

106
901

2 70

890
390

50
5

33
646
490
154
341
276
161
1,700

102

969

2 65

938

545

621

547

145

340

281

171

1,685

(s)

5,293
52

4,984
28

5,328
37

6,230
94

7,238
165

7,792
254

7,956
220

7,642
230

6,815
76

6,213
35

6,498

918

5,345
1,886

5,012
1,999

5,365
2,021

6,324
2,154

7,403
2,023

8,046
1,953

8,176
1,960

7,872
1,958

6,891
1,973

6,248
1,976

6,555

2,009

(s)

7,231

7,011

7,386

8,478

9,426

9,999

10, 136

9,830

8,864

8,224

8,564

OEEC countries — grand total (including United
Kingdom and dependencies private dollar

7,596

7,380

7,726

8,836

9,807

(?)

10, 510

(s)

9,471

(s)

9,204

(s)

125

121

127

120

132

128

129

125

128

129

1 Includes overseas territories.

2 Exclusive of official gold holdings not publicly reported. Allowance for
such holdings is made in "adjustments".

3 Includes dollar holdings of Americans residing in Germany, except in
prewar period.

* Exchange Equalization Account official holdings of gold, United States
and Canadian dollars, as reported by British Government. Excludes pri-
vate United States and Canadian dollar holdings. U. S. Treasury and Fed-

eral Reserve Board estimates including private dollar holding of the United
Kingdom and dependencies, but excluding Canadian dollars, amounted to
$2,780 million in June 1950; $3,681 million in December 1950; $4,241 million in
June 1951, $2,942 in December 1951, and $2,325 in June 1952.

5 Not available.

8 Adjustments include unpublished official gold holdings for France,
Netherlands, and Denmark.

' Canadian dollar holdings of United Kingdom are excluded.

Table F-6. — Wholesale Price Indexes for Western Europe, 1938 and 1949-52

[1948=100]

Country

1938

1949
Sept.

1950

1951

1952

June

Dec.

Mar.

June

Sept.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

Austria _ . .

31
•26
44
6
63

0.3
43

2
36

42
52
46
21
46

133
93
101
114
122

114
98
90
103
102

103
101
94
105
105

155
94
111
116
126

110
104
86
115
113

101
104
90
92
117

180
113
129
135
146

128
113
100
128
128

100
118
101
101
133

206
123
142
150
159

137
119
105
144
136

110
134
107
111
143

222
122
154
154
156

130
122
103
145
147

110
143
105
101
146

242
120
148
154
159

130
123
100
142

147

111
143
103
99

148

258
123
151
170
166

134
128
100
145
149

117
149
105
106
151

257
123
151
171
166

138
128
99
145
150

117
150
105
106
153

254
121
150
170
164

141
127
99
145
150

118
150
104
106

150

254
118
148
167
164

142
127
98
143
150

118
150
103
104

152

256
116
146
164
165

136
129
97
142
149

117
150
102
106

150

260
115
143
162
167

136
128
95
140
149

116
150
102
106
149

259

Italy

1 1936-38 average.

2 Represents free market prices of 20 commodities in Athens.

Table F-7. — Cost of Living Indexes for Western Europe, 1938 and 1949-52

[1948=100]

Country

1938

1949
Sept.

1950

1951

1952

June

Dec.

Mar.

June

Sept.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

31
27
60
6

62
(J)
<31

2
49
63
52

61
61
29

136
96
101
100

97
115
102
101

101
105
101
104

102
99
111

104

141
93
106
107

95
119
119
103

100
115
105

101

103
97
104

106

158
97
113
117

95
131
139
103

103
120
112

101

108
99
102

108

168

104

173
106

199
106

220
107

220
108
122

146

107
146
168

218
108

217
107

213
106
122
147

107
148
171

214
105

Denmark _ _ ___

France '.

124

101
142
145
104

107
124
115
102

117
100
103
111

129

105
139
153
110

111
129
124

122
102
101
116

133

103
137
162
112

111
129
126
101

124
104
102
119

143

106
144
165

114

112
127
127
101

126
105
106
121

149

107
148
170

148

107
150
171
115

113
128
130

100

128
105
108

124

145

108
148
172

143

Germany (Bizone) '

106

Greece2 ___ __

148

Ireland __.

116

Italy

111
128
129

101

127
105
107
123

113
128
130
100

127
105
107
124

114
128
131

100

130
104
110
126

114
127
131

130
105
109
126

115

131

Switzerland

105

Turkey

108

United Kingdom

128

1 1949=100.

2 Cost of living in Athens.

3 Not available.

< January-March 1939.

Table F-8. — Combined Foreign Trade of OEEC Countries, Indexes of Volume and Monthly Averages of Value, 1938

and 1948-52

■Period

1948

1949 _

1950

1951 _

1950:

First quarter..
Second quarter.
Third quarter . .
Fourth quarter

1951:

First quarter..
Second quarter.
Third quarter-
Fourth quarter

1952:

First quarter..
Second quarter.

Volume of trade
[1948=100]

Intra-
EEP

136
100
124
173
189

154
158
171

190
192
180
193

182
175

Imports
from rest
of world

116
100
104
100
112

101
104
94
100

107
112
113
114

117
109

Exports
to rest
of world

107
100
118
144
169

127
130
139
173

156
172
169
177

170
157

Total
imports

1,022
2,052
2,070
2,018
2,782

1,888
1,968
1,928
2,286

2,577
2,918
2,864
2,873

2,964
2,720

Value of trade
[Monthly average, in millions of United States dollar equivalents]

Total
exports

762
1,403
1,569
1,645
2,266

1,455
1,493
1,597
2,034

2,022
2,267
2,285
2,488

2,415
2,207

Intra-
ERP

384
633
721
811
1,061

722
738
789
996

1,012
1,084
1,065
1,187

1,120
1,041

Trade with all areas, except
metropolitan

Imports

624
1,396
1,342
1,201
1,722

1, 145
1,206
1,136
1,318

1,554
1,839
1,786
1,711

1,827
1,659

Exports

378
770

833
1,179

733

755

1,038

1,010
1,183
1,221
1,301

1,295
1,166

Trade
balance

-246
-626
-494
-368
-543

-412
-451

-2S0

-544
-656
-565
-410

-532
-493

Trade with Western
Hemisphere

Imports

243
672
602
477
670

465
483
463

510
707
753
708

743
650

Exports

106
211
206
251
360

204
208
253

322
380
368
371

343
339

Trade
balance

-137
-461

-226
-310

-261
-275
-210
-156

-188
-327
-385
-337

-400
-311

Table F-9. — Combined Foreign Trade of OEEC Countries (Metropolitan), by Major Areas, 1938 and 1948-52

[Monthly average, in millions of TJ. S. dollar equivalents]

Non-OEEC areas

OEEC areas

Period

Total

United
States

Canada

Latin
America

Eastern
Europe

Sterling

Other

Total

Metro-
politan
areas

Overseas
territories

EXPORTS

1938

327
587
632
631
885

544
570
627
788

767
892
918
964

952
843

40
78
66
101
151

71
74
110

150

152
160
144
148

153
145

13
30
31
37
45

29
35
38

36
52
50
40

33
39

54
104
108
113
165

104
99
105
146

133
169
173
183

157
156

75
78
94
79
107

78
80
72

85
101
115

126

130
120

78
203
223
197
279

170
184
199
234

232

260
300
325

328

228

67
94
110
104
139

92
98
103
125

129

150
136
141

152
155

437

818

936

1,013

1,381

912

925

970

1,247

1,254
1,375
1,368
1, 525

1,463
1,364

384
633
721
811
1,087

722
738
789
996

1,012
1,084
1.065
1,187

1,120
1.041

1948

185

1949 ..

215

1950

202

1951

294

1950:

190

187

Third quarter _

181

251

1951:

242

Second quarter . ...

291

Third quarter ._

303

338

1952:

343

323

IMPORTS

1938

537
1,152
1,160

945
1,344

913

946

900

1,024

1,207
1,433
1,416
1,321

1,414
1,253

113
374
371
261
369

284
267
241
254

297
386
383
408

449
358

43
97
89
57
93

51
55
58
61

116

121

103
129

87
201
142
158
209

129
161
164

178

157
244
254
182

190
164

98
113
112

135

92
84
94
98

110
115
153
161

144
124

122
229
242
230
319

223
227
213
259

351
361
305
257

316
291

74
138
144
147
221

134
152
130
171

236

250
205
192

212
187

485

901

970

1,072

1,464

973

1,023
1.029
1,262

1,370
1, 485
1,449
1, 553

1,550
1,467

398
656
728
816
1,086

743
762
792
968

1,023
1,079
1,078
1,163

1,137
1.061

1948

245

1949...

242

1950

256

1951...

379

1950:

230

261

237

294

1951:

347

406

371

390

1952:

413

406

Table F-10. — General Economic Data for Selected Countries of the Near East and Africa

Egypt

Ethiopia

Item

1938

1950

Item

1938

1950

General:

386
20, 439

104

503.7
610.9

386.5
178.2

36.3
44.3

104

145
113
95

General:

350

i 16, 008

3 88

151.1
185.2

3 375. 4
3 99.5

3.6
12.3

09
(?)

(2)

•12.0
W

15, 000

Production:

Agricultural production, FAO index (1948=100)

International trade and payments:

Total exports (millions of U. S. dollars).

International trade and payments:

Total exports (millions of U. S. dollars)

Total imports (millions of U. S. dollars)..

Commodity exports:

<27.3
<29.9

18.7

Commodity exports:

Cereal, Sour, pulses (thousands of metric tons) ..
United States trade (millions of U. S. dollars) :

38.1

3.5

3.4

Price indexes (1948= 100) :

Cost of living (Cairo) . . .. ...

Wholesale prices (export goods) :

Rice.. -.-

Iran

Iraq

Item

1938

1950

Item

1938

1950 .

General:

628

18, 772

128

« 528. 5
'286.8

473. 5
13.8
8.2
5.3
3.0

6.3
89.2

General:

168

1 16, 200
41

' 156. 0
'85.0

114.4
6.4
5.4
5.6
3.2

3.4
6.4

17
15

« 3, 700

106

68.4
45.8

» 204. S

3 174. 1

50.4

•2.7
4.2

11 22
"19

5,100

Production:

Crude petroleum C1948— 100)

Production:

Crude petroleum (1948 — 100)

159

International trade and payments (millions of U. S.

International trade and payments:

124.9

Total imports (millions of U. S. dollars)

Commodity exports:

105.3

462.2

212.0

Crude petroleum (millions of U. S. dollars)

United States trade (millions of U. S. dollars):

63.3

o io 2.0

i° 18. 6

United States trade:

Price indexes (1949=100):

103

Price indexes (1948=100):

1 1937.

2 Not available.

3 Average for 1934-38.

* Fiscal year ended September 10.

> Unofficial estimate for 1934-38 average.

'1941.

' 1937-38.

» 1949-50.

9 Does not include petroleum.

in 1949.

n December 1938-August 1939.

» 1939.

Table F-10. — General Economic Data for Selected Countries of the Near East and Africa — Continued

Israel

Item

General:

Area (1,000 square miles)

Population (thousands)

International trade and payments:

Total exports (millions of U. S. dollars)

Total imports (millions of U. S. dollars)

Commodity exports:

Citrus fruits (thousands of metric tons)

Diamonds, cut and polished (millions of U. S.

dollars)

United States trade (millions of U . S. dollars):

Exports to the United States

Imports from the United States

Price and wage indexes (1948=100):

Wholesale prices

Cost of living

Wages

Employment index (manufacturing) (194S=100)

1938 "

(?)

24.4
55.5

' 300. 1

.6
4.7

22
"30

' 18
'76

Lebanon

Item

General:

Area (1,000 square miles)

Population (thousands)

International trade and payments (millions of U. S.
dollars) :

Total exports

Total imports

Commodity exports:

Wool, raw

Legumes and root crops

Fruits, edible

United States trade:

Exports to the United States

Imports from the United States. .-

Price indexes at Beirut (1948=100):

Wholesale prices (all goods)

Cost of living

»4. 6
» 19. 0

'0.5

20.4

".3

'0.5
»1.8

« 13

"20

1950

35.3
287.3

167.2

8.8

8.3
105.5

95
126
139

1950

4
1,257

21 25. 9
21 143. 3

2.5
2.0

2.2

212.7
21 16. 7

76
87

Jordan

Item

General:

Area (1,000 square miles)

Population (thousands)

International trade and payments (millions of U. S.
dollars) :

Total exports _

Total imports

Commodity exports:

Oil seeds and vegetable oils.

Wheat _

Wool

United States trade:

Exports to the United States

Imports from the United States

Liberia

Item

General:

Area (1,000 square miles)

Population (thousands)

International trade and payments:

Total exports (millions of U. S. dollars)

Total imports (millions of U. S. dollars)

Commodity exports:

Rubber (thousands of metric tons)

Palm kernels ("thousands of metric tons) _ . .

United States trade (millions of U. S. dollars) :

Exports to the United States

Imports from the United States

"300

2.8
6.4

(')

1.6

(18)

(!)
(!)

1938

(2)

1.9
2.2

'1.6
8.7

1 0
.9

1950

»37
" 1,300

12.6
36.4

.8
.8

(')

1.4

1950

1 1. 000

22 16.3
22 10.4

31.6

23 19. 7

!13.9
7.4

13 Present State of Israel established in 1947. Statistics shown for 1938 are
for Palestine.

u Includes 2,400 square miles, the incorporated segment of Palestine.

» 1951.

io UN estimate for 1937.

" Department of State estimate, UN estimate is 619,000.

i' Less than $50,000.

io Department of State estimate. UN estimate is 1,648,000. No Arm
figures are now available, but a census is in progress.

2° 1939. Lebanon share imputed to be 25 percent of the exports and 50
percent of the imports of the Syro- Lebanese Customs Union.
2i April 1950-March 1951.
22 Sept. 1, 1949- Aug. 31, 1950.
2' UN estimate.
2' June 1939.
25 June-August.

Table F-10. — General Economic Data for Selected Countries of the Near East and Africa — Continued

Libya

Item

General:

Area (1,000 square miles)

Population (thousands)

International trade and payments: 2»

Total exports (thousands of U. S. dollars). ..

Total imports (thousands of U. S. dollars)

Commodity exports:

Livecattle(thousandhead)

B arley (thousand metric ton)

Sponges (thousands of U. S. dollars)

United States trade (thousands of U. S. dollars):

Exports to the United States

Imports from the United States

Syria

Item

1938

5,732
46, 401

31 .4

312.2

406

541

General:

Area (1,000 square miles).

Population (thousands)

International trade and payments:

Total exports (millions of U. S. dollars).

Total imports (millions of U. S. dollars)

Commodity exports:

Textiles and textile materials, including clothing
(millions of U. S. dollars)

Vegetable products (millions of U. S. dollars). ..

Wheat (thousands of metric tons)

United States trade (millions of U. S. dollars):

Exports to the United States

Imports from the United States

1938

(2)

» 13. 7

20.7

3.8

4.1
« 13. 8

3< 1.4
31 1.4

687
»' 1, 124

12, 186
19, 739

5.1
35.5
970

141

1950

66
» 3, 228

" 25. 7
i°116.8

"5.8
" 12. 2
215.6

Saudi Arabia

Item

General:

Area (1,000 square miles)

Population (thousands)

International trade and payments:

Total exports (millions of U. S. dollars).

Total imports (millions of U. S. dollars)

Commodity exports:

Petroleum (1,000 barrels)

Gold (1,000 troy ounces)

Silver (1,000 troy ounces)

United States trade (millions of U. S. dollars):

Exports to the United States

Imports from the United States

(2)

(2)
(2>

(2)

(?)

(2)

» 1,000
2« 6, 000

(2)
so 85. 0

199, 546
66
124

(2)
so 35. 0

2« Area of Arabian Peninsula.
27 Census of 1936.
» 1947.

2" Includes interterritorial trade among Tripolitania, Cyrenaica, and the
Fezzan.
30 Estimated.

3' Average for 1935-38.

" UN estimate. Department of State estimate is 3,478,000. Neither figure
includes 300,000 nomadic tribesmen nor 83,000 Arab refugees.
" Average for 1937-38.
>< Includes Lebanon. Average for 1934-38.

Table F-ll. — General Economic Data for Selected Countries of Southeast Asia

Unit

Burma

Indochina,

Associated

States

Indonesia

Philippines

Formosa

Thailand

Pre-
war '

1951

Pre-
war !

1951

Pre-
war l

1951

Pre-
war l

1951

Pre-
war •

1951

Pre-
war '

1951

Miscellaneous:

Thousands of square
miles.

16.2

193
91

262

18.8

206

143

23.5

105
63

287

28.5

132
2211

68.0

546

274

506

583

75.0

1,258
805

525

15.8

152
109

237

116
20.3

409

475

772

5.7

127
93

9.0

98
143

14.8

88
57

200

18.5

Foreign trade:

Millions of dollars

2 270

Total imports

Commodity exports:

2 195

Thousands of metric
tons.
do

3,048
10
2

1,323
2 10

1,547
45

360

252

312

1,325
36
17

1,625

473

1,365

115

23
69

793
2 31
229

266

162

151

2 114

2 11

871
126
85

10
16

24
23

100

624
284
350

31
33

99
94
116

831
2
1

118
80

M00

284

48
42

s 1, 478

United States trade:

28
24

112
120
82

7
3

4
2

<2
<2

100

15
27

< 116

* 104

3
10

137

States.

4
8

28
25
100

States.
Japanese trade: 3

. do

Cost of living:

1948—100 .

110

Food

8
100

7,260

189
99

7,440

Agricultural production:
Industrial production:

Petroleum (crude)

Prewar=100

Thousands of metric
tons.
do

100

176

235
2,308

212
624

150
26

299
2 159

146
1,953

389
1,657

Coal

1,373

2 799

1 1937 or near to that year.

2 1950.

2 Prewar figures for Japan include trade with Korea and Formosa.

< 1949=100.

■ General wholesale price index, based on January-June 1937=100.

Table F-12. — General Economic Data for Selected Countries of South Asia

Unit

Ceylon

India '

Pakistan '

Afghanistan

Nepal

Item

Pre-
war'

1951

Pre-
war 3

1951

Pre-
war2

1951

Pre-
war '

1950

Pre-
war'

1950S

Miscellaneous:

Thousands of square
miles.

5.8

125
89

73
68

7.7

401
328

138

104
112

307.4

711
666

150

1,200

364,0

1,559
2,029

202

67.6

360
76.0

529

518

11.0

34
28

251

12.0

38
20

6.0

5
8

7.0

Foreign trade:

Millions of dollars

Commodity exports:

Thousands of metric
tons.
do

do -

661

843
1,028
1,017

233

157

738

<542

766

<207
<588

Jute:

.. do

3 4

2,000

10.0

5.0

2,440
11.0

5.5

Wool-

1
0.5

do . .-

0.8

Fats.

United States trade:

.... do

21
2

1
6

6 42
«39
100
186

49
19

109
112
148
222

96
44

68
83

100

23,731

297
463

34
47

109
115
102

23, 814

107
850

34, 900
1,848

100

7,728

44
38

<44
<52

'99

108

8,335

21
4

(!)

(8)

Japanese trade: 5

---. do

Cost of living:

WiS -100

Food.. . . .

do .

Prewar— 100

Thousands of metric

tons.
1948-100.

Thousands of metric
tons.
.do....

1,286

25,400
1,668

Coal

516

1 India prewar trade figures include territory now Pakistan.

2 1937 or near to that year, except trade data for Afghanistan which are
1939.

3 Commodity export data are for 1944-45, the latest period available. The
jute figures are in millions of dollars.

* 1950.

fi Prewar figures for Japan include trade with Korea and Formosa.

8 August-December 1939.

1 April 1948-March 1949=100.

8 Negligible.

Table F-13. — General Economic Data for Selected Countries of Latin America

Country

[Thou-
sands of
square
miles]

MIDDLE AMERICA

Costa Rica

Cuba

Dominican Republic

El Salvador

Guatemala

Haiti

Honduras

Mexico

Nicaragua

Panama

SOOTH AMERICA

Bolivia

Brazil

Chile

Colombia

Ecuador —

Paraguay

Peru

Uruguay

Venezuela

20
44
19
13
42

11
59
760
57
29

286
440
106

157

482

352

Population

Pre-
war '

1950

[Thousands]

599
4,359
1,586
1,649
2,088

1,020

18, 737

926

575

3,327
38, 685
4,754
8,531
2,782

934

6,695
2,080
3,415

801
5,348
2,121
1,859
2,803

3,112

1,534

25, 368

1,053

801

3,019
52, 124

5,809
11,260

3,077

1,406
8,405
2,365
4,924

Foreign trade

Total exports

Pre-
war !

Total imports

Pre-
war l

Trade with United States

Exports to
United States

Pre-
war J

Imports from
United States

Pre-
war !

1950

[Millions of United States dollar equivalents

10.1

34.7

12.6

46.0

4.6

24.6

6.2

142.7

642.0

106.0

515.0

108.4

379.7

75.2

14.3

83.5

11.3

«32.0

4.6

36.5

6.1

10.9

69.5

9.1

47.2

6.8

59.9

4.3

16.3

67.6

16.8

71.2

11.3

60.2

7.5

6.5

38.5

7.6

36.2

3.0

21.5

4.3

8.2

21.7

10.3

34.2

7.1

15.1

6.3

195.9

501.4

115.5

509.0

132.0

433.2

66.6

5.9

34.6

5.1

25.3

4.0

24.2

3.1

7.7

10.1

17.7

67.0

3.4

9.3

10.1

32.2

94.1

25.0

55.8

1.1

65.7

6.6

295.6

1, 346. 5

294.6

1, 097. 9

101.5

734.3

71.3

141.5

293.7

102.7

247.9

22.1

153.3

28.6

81.2

393.6

89.1

362.6

42.6

325.4

44.4

12.6

64.4

11.0

41.6

4.7

35.7

3.8

7.0

54.3

7.6

27.5

1.7

76.7

193.7

58.3

187.0

20.6

50.8

20.0

61.7

191.6

61.6

204.7

2.4

129.5

7.2

178.6

1, 167. 6

97.5

539.5

6 37. 2

» 332. 0

54.9

30.9
407.5
»32.0
31.6
48.7

27.6

26.9

429.6

20.6

44.4

23.6
379.1
118.5
240.8

27.8

6.4
30.9
39.2
367.4

Wholesale
prices

Pre-
war i

Cost of
living ^

Pre-
war J

1951

[Index, 1948=100]

117

(a>

<37

<»>

143

(')

113

(3)

(=0

<»)

(»)

146

136

* 19

(')

(3)

151

<>)

168

<•>

(')

182

186

(>>

100

«49

127
<84
105
99
120

123
•129

«94

158
112
159
141

272
139
110
<99

' 1938 or near to that year.

2 Data are for the principal city in each country, except data for Cuba
which are based on food only for the entire country.

3 Not available.

* Food only.

5 Estimated.

6 Direct exports to the United States only. Reexports to the United States
from Curacao and Aruba are substantial.

U. S. GOVERNMENT PRINTING OFFICE: 1952

or a

ona an

tee

world

Third Report to Congress

for the six months ended
December 31, 1932

Third Report to Congress

on the
Mutual Security Program

. for a strong and free world

December 31, 1952

For sale by the Superintendent of Documents, U. S. Government Printing Office
Washington 25, D. C. - Price 20 cents

CONTENTS

Page

President's Letter of Transmittal v

The Mutual Security Program During the Last Six Months of 1952 1

Europe 1

The Near East and Africa 8

Asia and the Pacific 10

American Republics 13

Other Parts of the Mutual Security Program 14

III

PRESIDENT'S LETTER OP TRANSMITTAL

To the Congress of the United States :

I am transmitting herewith a report on the operations of the Mutual
Security Program covering the period from July 1 to December 31, 1952, insofar
as statistics are available at this date. Since this is the last such report that
I shall furnish to the Congress, I am taking this opportunity to review, in
broad outline, the origins of the program, its accomplishments, and the kind
of policy decisions that it will present to the new Administration and Congress.

In October 1951, the Congress combined most of the major aspects of our
international programs in the fields of defense, economic development, and
technical assistance into one statute authorizing the Mutual Security Program.

The story of this program and its predecessors is the story of a crowded
and dangerous period — a period of historic decisions. And mirrored in the
evolution of this program is the story of a great national awakening, of a
people in reluctant transition from wishful thinking to a firm acceptance of
the responsibilities of free- world leadership.

There is no need here to recall the state of the world at the end of
hostilities — the destruction, the dislocations, the misery, and the demoralization
of great areas and great segments of humanity. It was natural that American
sympathy should go out to peoples everywhere suffering from the aftermath
of history's most destructive war — and that our sympathy should be expressed
in the form of generous assistance to the hungry and the sick and the displaced.

We already knew from painful experience that what happens in the rest
of the world necessarily affects our own domestic life ; that we cannot live secure
and prosperous, isolated from a world community that is insecure and depressed.
But not long after the end of the war we found that the problem was more than
just physical relief from disaster. Gradually we realized that the world was
suffering not only from the wreckage and wastage of war, but from deep social
unrest — and from the predatory acts and intentions of a former ally.

In 1947 we were faced with a great decision. The British could no longer
afford to carry the burden of support to the Greek nation in its fight against
communist insurrection. On March 12, 1947, I addressed the Congress and
explained the urgent need for a program of military and economic aid to Greece
and Turkey, which was also under communist pressure. In that address, I
reminded the Congress that the problems of Greece and Turkey were parts of a
fundamental challenge facing the American people, and I said :

I believe that it must be the policy of the United States to support free peoples who are
resisting attempted subjugation by armed minorities or by outside pressures.

I believe that we must assist free peoples to work out their own destinies in their own
way.

I believe that our help should be primarily through economic and financial aid which
is essential to economic stability and orderly political processes.

The implications of these propositions soon became clear, as did the next
steps that needed to be taken on the difficult course upon which we were em-
barked. The scattered aid that we were giving — to Greece and Turkey and
China in the form of military and economic aid, to France and Italy and
Austria in the form of grant economic assistance, to Great Britain in the form
of a loan, and to many countries through support of the United Nations special
agencies — clearly was not adequate in amount or in form.

For in early 1948 — just 5 years ago — large areas of Greece were still held
by the still-powerful communist forces.

Across the Adriatic Sea from Greece, 5 years ago, a new democratic govern-
ment in Italy faced an election in a chaotic country — an election which, it was
widely feared, might be won by the communists.

Across the Alps in France, there were unemployment and increasing
hunger, black-markets and strikes — and bankruptcy ahead.

On the other side of the English Channel, the British people were strug-
gling against terrible odds to repair the dreadful damage of war and to feed
a population which grows about one-third of the food it needs.

Western Germany lay prostrate and the Kremlin was completing its
plans to drive the Western Allies out of Berlin.

The peoples of Western Europe, aided by stop-gap American help, had
made a gallant effort to get up and stand on their own feet after the end of
World War II, but the odds were too great. The inescapable fact was that
they did not have and could not earn the dollars they needed to buy the things
that were required to restore economic and social order in time to prevent
chaos. In desperation, they were forced to seek relief in nationalistic economic
and financial restrictions which, in the end, could only make the situation worse.

It was a situation that was made to order for the Kremlin — and the Krem-
lin made the most of it by promoting strikes and riots, by sabotaging recovery
through its puppet communist parties, by political maneuver, and by massive
injections of propaganda. It looked as if Western Europe might well fall to
the communists through economic and political collapse.

That, in broadest outline, was the state of Europe and its dependencies,
and it bade no good for the peace of the world nor for the security of the
United States.

Elsewhere in the world, the symptoms were not less alarming. The forces
of Nationalist China were giving way before the communists; fighting was
under way in Indochina ; there was violence in Burma and in Malaya ; in Indo-
nesia a new state was emerging with difficulty and uncertainty ; the sub-con-
tinent of India had been divided and the long struggle for national security
and stability was just beginning; Iran and Turkey were still subject to Soviet
pressure. There were other areas of danger and potential danger in the Middle
East, North Africa, and elsewhere.

The threat that this posed to the security of the United States needs no
emphasis.

On both sides of the Atlantic the realization was growing that the problem
of restoring economic and social stability in Europe could not be solved cheaply
or quickly — nor by separate national efforts. What was required was a sus-
tained cooperative undertaking. The groundwork for this was laid in an
address in June 1947, by Secretary of State Marshall. He said that if the
nations of Europe would come together and prepare a plan of self-help and
mutual aid, the United States was prepared to provide the critical margin

needed for a successful recovery program. He specifically stated : "It is logical
that the United States should do whatever it is able to do to assist in the return
of normal economic health in the world, without which there can be no political
stability and no assured peace. Our policy is directed not against any country
or doctrine, but against hunger, poverty, desperation, and chaos." That
meant — among other things — that if the Soviet Union were prepared to enter
into a cooperative international program of economic recovery, the United
States would help in that endeavor.

This put Soviet policy to the test, and it soon became clear what the real
Soviet intentions were with respect to Western Europe. When the then For-
eign Ministers of the United Kingdom and France issued invitations to all of
the governments of Europe to meet and discuss the implications of this Ameri-
can proposal, Mr. Molotov came to the conference, denounced the whole idea,
and walked out to set up the Cominform which promptly set out to sabotage
the recovery of Western Europe. The Soviet-dominated nations of Eastern
Europe were forbidden by the Kremlin to participate in the European Kecovery
Program, but 18 nations enthusiastically went ahead with this unprecedented
international venture. By spring of 1948 the Congress had enacted the Eco-
nomic Cooperation Act which got the Program under way and a scant 2 years
later, these things had happened :

^ The industrial production of Western Europe had greatly exceeded
prewar levels, and agricultural production had almost recovered.

^ The dollar deficit in the balance of payments of all the 18 countries
participating in the recovery program had been reduced from $7 billion in
1947 to less than $2 billion in 1950.

^ Trade among the participating countries had more than doubled.

^ With the exception of Italy, Germany, and Belgium there was virtually
full employment.

^ Rationing of almost all consumer items had been abolished and recourse
to black markets for the necessities of life had been virtually eliminated.
Relative industrial peace had been established.

Measured by all indexes — parliamentary strength, party membership,
membership in communist trade unions, circulation of party newspapers,
et cetera — communist strength in Western Europe was on the wane.

The Organization for European Economic Cooperation was providing
general direction to the recovery program on a basis of unprecedented inter-
national cooperation ; Belgium, the Netherlands, and Luxembourg were forging
an economic union ; the Council of Europe had been established ; and the idea
of European unification was gaining ground.

The principle of common defense of the West was accepted arid the first
great organizational steps were taken. In 1948, the United Kingdom, France,
Belgium, the Netherlands, and Luxembourg concluded a defense treaty and
established central headquarters in France. In April 1949, the North
Atlantic Treaty Organization had been established linking together the
greatest potential aggregation of military power, industrial strength, and
human skills ever brought together in a common enterprise. Shortly there-
after, the Congress enacted the Mutual Defense Assistance Act to contribute
to a moderate increase in the military defenses of the free world.

The statistical story of physical recovery during the first two years of
the European Recovery Program was deeply impressive. But more important
than exact quantitative measurements was the reversal of trends toward eco-

VII

nomic deterioration, political weakness, and spiritual despair and the emer-
gence of trends toward economic growth, political strength, and spiritual
hope. By far the major part of this record was due to the efforts of the
Europeans and the vitality and imagination of European statesmanship. The
role of the United States was to supply the missing elements without which
the Program could not be undertaken.

All this was accomplished in spite of every effort — diplomatic pressure,
political intrigue, propaganda onslaught, and actual sabotage — on the pax*t of
the communist parties of Western Europe to wreck this Program.

In short, by 1950, the Kremlin's plot to take over Western Europe had been
f rustrated : the nations of Western Europe were still free, still democratic, and
had new hopes and a new faith in the future. There was no longer any great
likelihood that Western Europe would collapse internally and fall into the
arms of the Kremlin.

Meanwhile China had fallen to the communists and the Nationalist
Chinese had retreated to Formosa. The China Aid Program, conducted by
the Economic Cooperation Administration, was continued in Formosa and,
under special authorization, funds from that Program were used in other
Far Eastern countries which were either subject to direct or indirect communist
attack or were in economic difficulties. In addition, the Mutual Defense Assist-
ance Act had made funds available to provide military equipment required by
these countries to combat overt communist efforts to take them by force.
Despite the serious impact on the economy of Formosa of the arrival of thou-
sands of refugees, the Island was kept away from the communists and the first
steps had been taken to relieve the impact upon its economy. This assistance,
particularly to Indochina, began to have effect in building up strength to resist
direct or indirect communist aggression. In short, the Kremlin's plot to take
over all of Asia had been frustrated also.

By 1950 we were starting the next great step on the difficult course upon
which we had embarked in 1947 — the Point 4 Program to provide the
technical assistance needed to lay the basis for economic and social progress in
the underdeveloped areas of the world. Working directly with individual
nations, and through the United Nations, we began the long process of
attacking hunger, disease, and illiteracy. Programs began to take shape to
bring scientific knowledge and modern techniques to the underdeveloped
areas, mainly in the fields of agriculture, public health, and education.

Hope for a decent life had begun to dawn for tens of millions in the
underdeveloped areas of the world.

But in the fall of 1949 the Soviet Union had produced its first successful
atomic explosion. In the summer of 1950 came the Kremlin's decision to test
the courage and the will of the free world by instigating aggression in Korea.
These two events forced the United States and its allies to shift regrettably
from a program which emphasized economic recovery to a program which
emphasized urgent rearmament, especially in Europe. Kearmament on the
scale undertaken after the Korean invasion could not even have been con-
sidered had it not been for the economic recovery and the restoration of hope
and confidence that already had taken place.

Since 1950, our principal efforts in the Atlantic community of nations have
been directed toward the establishment of military security.

And since then these things have happened:

y The first international military command in the peacetime history of
the world has become a going concern.

» The NATO nations, originally 12 and now 14, have agreed on a common
strategic plan for the common defense.

^ These nations are building, together, balanced collective forces.

^ Armed forces of the original NATO nations have more than doubled
and to those have been added the powerful forces of Turkey and Greece.

t Intensive joint training exercises and war games have been carried out
on land, sea, and in the air by the armed forces of many nations.

^ The consultative machinery originally established under NATO has been
transformed into a permanent working organization.

jy While the nations of Western Europe and the Atlantic world are not yet
secure against Soviet invasion, they have created and will continue to strengthen
a powerful military deterrent to any aggression.

t At the same time there has been real progress toward the establishment
of a Western European community of nations, including the Federal Republic
of Germany. The Schuman Plan — one of the most imaginative acts of states-
manship in our times — has led to the establishment of a six-nation merger
of coal and steel resources. The same six nations are considering ratification
of a treaty to establish a common defense force with a common budget under
supranational control; other projects are pending for economic integration;
and work has been started on a draft constitution for political lcde^ation.
There have been disappointments and set-backs; we face a number of difficult
problems right now. But, over-all, the movement toward greater unity in
Europe is still continuing.

In short, what began as international cooperation for economic recovery
in Western Europe is growing into collective defense, economic integration,
and political unity. This is one of the most hopeful— and essential — develop-
ments in our time.

All this has been accomplished despite every effort short of general war
which the Kremlin could devise to stop us. It has been done, too, with con-
scious regard for the economic and social consequences of the diversion of
resources from economically constructive purposes to the military program
that has been forced upon us.

Since 1950 the United States — principally through the Mutual Security
Program — has been helping many nations outside of Europe to strengthen
their military security. We helped equip the armed forces of France and the
Associated States of Indochina in their gallant and exhaustine fight against
communist insurrection ; we helped supply the forces of the Philippines to put
down the communist-inspired Huk rebellion ; we concluded mutual defense
treaties with Japan and with the Philippines; we completed a tripartite treaty
with Australia and New Zealand for common defense of the South Pacific;
we provided both military and economic assistance to the free Chinese on
Formosa; we continued to help bolster Iranian defenses; and we are helping to
supply our Latin American friends with military equipment in line with the
Western Hemisphere defense alliance concluded in the Rio Pact.

The heavy emphasis we have placed on military preparedness in the past
few years has been brought about because we have been confronted with a

237264°— 53- 2 IX

military threat, because we and the other free nations considered it urgent
to mobilize the military and industrial resources of the free world for mutual
defense against this threat, and because the initiative in this imperative task
clearly lay with the United States.

But we have not lost sight of the fact that the Soviet design for conquest
counts on subversion as well as military aggression. In contrast to the false
promises of food and better living conditions offered by the communists, we
have joined with other peoples, particularly in the underdeveloped areas, in
tangible cooperative programs that strike directly at hunger, disease, and
illiteracy. We have aided and participated in basic economic development
projects in many parts of the world. Technical assistance programs are now
under way in 41 countries and also in many overseas territories of European
nations.

These programs of technical assistance would be vitally important quite
apart from the existence of the communist conspiracy. Our basic desire is to
help other people to help themselves build decent conditions of life in which
they can find political and social security. When we strike against the enemies
of mankind — poverty, illiteracy, hunger, and disease — we work for freedom
also; when we build the conditions in which freedom can flourish we destroy
the conditions under which totalitarianism can grow. Moreover, the resulting
increase in production and trade help, in turn, not only the underdeveloped
countries but also the United States and the whole free world.

The present Mutual Security Program has grown, by evolutionary steps,
from our first postwar efforts to bring relief from the destruction of World
War II. Today it combines our major efforts to win a global struggle against
totalitarianism and misery.

It is appropriate and desirable for the new Administration and the Con-
gress to review the Mutual Security Program. Any program that occupies
such a central part of our foreign policy structure, that requires such a large
investment of our resources, that affects so many people in so many ways, should
be so reviewed as a matter of course.

The rapid pace of events would itself require a reevaluation at this time
to determine the appropriateness of the timing, the scope, and the emphasis
of the Mutual Security Program. Without seeking to influence such a review,
it may be helpful to the new Administration and the Congress to indicate
what appear to me to be several basic considerations to be taken into account.

We know that the men now in the Kremlin are the center of a vast con-
spiracy whose inexorable purpose is to blot out human freedoms throughout the
world because those who direct this conspiracy deny the worth of the individual
human being and despise the concept of human dignity. It is clear that the
threat directed against us is simultaneously military, economic, political, and
psychological; that it might move more aggressively with any or several of
these weapons in any number of places at any time; and that a prime objective
of current Soviet strategy is to split the free world and especially ot destroy
the unity of the western alliance, that it may divide and conquer.

Clearly we cannot undertake to do all of the things that we should like
to do to meet and overcome this threat everywhere and simultaneously. In
the end certain choices have to be made — hard choices based on the best judg-
ment we can bring to bear — as to how we shall allocate our great but not
unlimited resources between use at home and use abroad, between use in
various areas of the world, and between various types of programs designed

primarily to strengthen our defenses, strengthen the free-world economies, or
strengthen the political and social forces that are working generally for the
preservation and extension of freedom.

We must face the existence of a major military threat and the consequent
economic burdens of rearmament and yet we must also continue to strengthen
our economies and to help build sound political and social institutions upon
which free societies rest; we must honor our military commitments in the
Far East and recognize the military problems in other parts of the world
and yet we must also persevere in our pursuit of military security in the
North Atlantic area ; we must be prepared to cope with unpredictable crises
and yet we must design and administer our programs with a view to the
long pull ahead.

There is no longer any responsible body of opinion in the United States
that questions the rightness of the concept of mutual security in the free
world nor of the need for American leadership and the investment of American
resources in this common enterprise. The questions that arise concern mainly
the relationship of the Mutual Security Program to our over-all political,
military, and economic policies; the magnitude of the Program; the proper
balance between military, economic, and technical assistance that should apply
within the Program; the proper emphasis of effort by geographic area; and
choices involved between the relatively short-term results and the relatively
long-term results that we are seeking.

There are three aspects of these difficult problems which I think should be
given particular attention :

1. The Mutual Security Program must be viewed within the framework
of foreign and national security policy as a whole and tailored so as to
provide the maximum support to that policy. This requires a grasp of com-
plex interrelationships. We must understand that the requirements of our
own armed forces have to be related to the requirements of the armed forces
of our friends and allies, based upon a recognition that the security of
the United States depends upon strong military defenses beyond our shores.
We must recognize that the need for assistance has to be tied to achieve-
ment of stated foreign policy objectives — for example, the ability of France
to sustain the military burden of war in Indochina directly affects her
position in the North Atlantic Alliance and the progress of the European
Defense Community. We must realize that the development of strong eco-
nomic and social institutions in the free world is dependent upon increased
productivity and economic growth in the underdeveloped areas. In particu-
lar, we must appreciate the relationship between our foreign economic policies
and our domestic economic policies which are, in fact, so closely interrelated
as to be, for most practical purposes, inseparable. Fluctuations in the general
level of business activity in this country can have a profound impact on the
economies of other nations; the continued expansion of our own industrial
economy depends directly upon increased pixxluction abroad of essential raw
materials; the role of United States private investment abroad and United
States public loan policies affect the ability of other countries to develop and
become independent of United States aid; our tariff policies and customs
procedures have a great deal to do with the ability of other nations to earn
their own way in the dollar markets. All these factors act and react on each
other. If we are to make the greatest possible progress and the most effective

use of our resources, all of our policies and programs — foreign and domestic —
must be internally consistent and must mutually support each other.

2. Programs to help build collective strength in the free world can no
longer be considered as emergency measures, but as essential to the security
of the United States in the cold war struggle which may be with us for a long
time. We have a great stake in maintaining strong economies and strong
defenses among the nations of the free world and for some time to come this
will require assistance on the part of the United States. As for the under-
developed areas of the free world, economic development and technical
assistance programs are long-range by nature.

The time has come to stop thinking about mutual defense and foreign
economic programs as stopgap measures and to think about them as activities
which for the sake of our own security require considerable forward planning.
I do not mean to suggest that grants from this Government should continue
indefinitely. But so long as there is need for any aid, there will also be need
for careful planning on a longer and more consistent basis than has been
provided by our traditional process of annual appropriations. We must work
out measures which will enable longer range planning than is now possible,
without impairing the proper responsibilities of the Congress for appropriating
funds and overseeing their expenditure.

We must all realize that the Mutual Security Program is a joint endeavor
requiring substantial contributions by each and every partner, because the
program is directed at objectives in wdrich all participants have a large common
interest. For our sake and for our partners' sake, it will be desirable to develop
a longer range approach than the one-year review and renewal of our programs
which has been the practice since the end of the Marshall Plan.

3. We need to examine anew our programs in the underdeveloped areas.
It has become increasingly clear that the steady but slow contributions from
technical assistance must be complemented, in one form or another, by capital
development. Funds are needed to help the underdeveloped countries build
such key facilities as dams, power plants, and transport, and to increase the
production of basic commodities — raw materials and food — which are essential
to the achievement of an expanding free-world economy, including our own.

There are several other aspects of the Mutual Security Program that war-
rant study and possible adjustment. For example, we need to find methods to
expedite delivery of end-item military equipment and to achieve the optimum
volume of offshore procurement. Naturally, the essential requirements of
Korea and other active combat areas must first be satisfied. But, beyond this,
in allocating military equipment, we must hold to the principle that those who
may be called upon to fight first should be adequately equipped first. The
armed forces of our allies in Europe and in critical areas in other parts of the
world are manning the frontiers of freedom. We will be sacrificing a substan-
tial measure of our own security if we do not see to it that these forces are
speedily and adequately equipped.

With respect to offshore procurement, we need to recognize that the devel-
opment of a production base abroad is essential if the free world is to have the
necessary equipment and supplies should war come and if our friends and allies
are to be in a position ultimately to assume responsibility for their own defense.
Mutual security funds must be so directed as to assure achievement of this basi<c
security objective.

XII

We need to keep constantly in mincl the crucial fact that the end objec-
tive of mutual security arrangements is the preservation and strengthening
of free-world unity. The essential unity of aims and major policies of
the western alliance is so steadfast that we can afford to disagree over details
and methods. This, in fact, is the basic strength of a democratic relationship —
that we each have views and express them — and then work out our differ-
ences. But we must be forever alert to the certain efforts that will be made
by the Kremlin to seize these differences and exploit them as issues, to con-
vince our friends and allies that they have lost their independence and that
the United States is using the lever of "aid" to coerce its allies into following
policies and programs unilaterally laid down in Washington. The donor-
recipient relationship — the suggestion of charity — implicit in the term "foreign
aid" is psychologically unhealthy. It is well known that this has caused
increasing anxiety on the part of some of our allies. We may regard this as
a welcome sign of independence and vitality on the part of people who rightly
resent any suggestion of United States dominance over their own affairs. The
term "foreign aid" is obsolete, unsound and unworthy as a conceptual basis for
the great ventures in international partnership upon which we are engaged.
As partners in a free association of independent nations we have grown in
strength and unity. As such — but only as such — can we find together still
greater strength and greater unity.

It has been our conscious purpose to maintain a high degree of flexibility
in the Mutual Security Program. Such flexibility implies the need for con-
tinuing review and reevaluation by both the Congress and the Executive
Branch. I am pleased and proud that as I leave office the Mutual Security
Program is a going concern with a record of splendid accomplishment. The
great forward strides toward collective defense, toward economic progress,
and toward free world unity that have taken place under the Mutual Security
Program will stand out as dramatic and historic accomplishments in the
twentieth century struggle for peace and decency for mankind.

The White House,

January 16, 1953.

XIII

The Mutual Security Program
During the Last Six Months of 1952

Europe

The Defense Build-up in
Europe

'T'HE 12 nations of Europe who are associated
together with the United States and Canada in
the North Atlantic Treaty Organization (NATO)
continued — during the second half of 1952 — their
steady progress in creating military, economic,
and political strength.

During December 1952, Cabinet members of all
the NATO nations attended a meeting in Paris
of the North Atlantic Council in order to review
this progress. The United States was represented
by the Secretaries of State, Treasury, Defense,
and the Director for Mutual Security. The meet-
ing received reports from the NATO Military
Committee ; from the Secretary General of NATO,
Lord Ismay; from the Supreme Allied Com-
mander of Europe, Gen. Matthew B. Ridgway;
and from the Supreme Allied Commander of the
Atlantic, Admiral Lynde McCormick. It also
received a first report on the 1952 Annual Review.
The military build-up in Europe during the
past few months must be measured against the
goals agreed to at Lisbon in February 1952. The
goals for the 1952 build-up of NATO forces, ex-
cluding Greece and Turkey, were 25 active divi-
sions and 25 reserve divisions, 4,000 aircraft, and
naval forces of about 1,600 vessels. The progress
reports submitted to the North Atlantic Council
showed that, as a result of greater defense bur-
dens undertaken by all NATO members, and as
a result of an increasing contribution by the
United States in the actual delivery of military
equipment, the ambitious goals set in February
had been nearly reached by the end of December
1952.

Among the ground forces, the 25 divisions sched-
uled to be on active-duty status were largely up
to the required standards; the bulk of the de-
ficiencies are therefore found mostly in the
strength — of men and equipment — of the reserve
divisions.

Insofar as air forces are concerned, the Lisbon
goal of 4,000 available aircraft was nearly met
by December. Flight training and ground-sup-
port organization lagged slightly behind aircraft
availability.

The naval goals were considered met.

Despite unforeseen difficulties, the 1952 force
goals, which were established purposely on opti-
mistic assumptions at Lisbon, were largely real-
ized. The principal problem in completing the
1952 task is bringing the reserve ground divisions
up to strength.

The December meeeting of the North Atlantic
Council reviewed not only the status of forces
reached at the end of 1952 but also the progress
made to date on developing plans for 1953. Firm
force goals for 1953 will be established at a subse-
quent Council meeting in the spring of 1953, at
which time the results of the 1952 Annual Review
will be considered.

Infrastructure

During the calendar year 1952 much progress
was made in developing certain fixed military
facilities such as headquarters, airfields, and com-
munications networks, which are needed for effec-
tive defense and which are used jointly by the
integrated combat forces. The United States
participates with other NATO nations in financ-
ing the cost of these common facilities which are
called "infrastructure."

The infrastructure program was started in 1950
by five nations in Western Europe: Belgium,
France, Luxembourg, the Netherlands, and the
United Kingdom. They contributed $92 million
to what has become known as the First Slice of
common infrastructure. In September 1951 the
United States and Canada joined the European
nations in a $221 million program for the Second
Slice. Since, then Italy, Denmark, and Norway
have joined in the program and at Lisbon, in Feb-
ruary 1952, the 10 participating countries agreed
to a Third Slice program amounting to
$425.6 million.

The Fourth Slice program calls for an expendi-
ture of $473 million, of which an installment of
$229.6 million was authorized for financing at the
December 1952 North Atlantic Council meeting
in Paris.

Airfields have received top priority in the
infrastructure programs to date, along with the
necessary communications facilities, and more re-
cently jet fuel storage and distribution facilities.
Of the more than 100 airfields approved for con-
struction in seven NATO countries and in Western
Germany, a very large percent are completed or
under construction. The remaining fields are in
the planning-and-survey stage. The runways
and taxiways are being built to handle the latest
jet planes.

European Defense Expenditures

During the last half of the calendar year 1952
the total defense expenditures of the European
NATO nations continued to rise. For the fiscal
year which ended June 30, 1952, the total defense
expenditures of these countries amounted to over
$9 billion. However, expenditures in the final
months of the fiscal year were approximately
one-fourth greater than expenditures in the be-
ginning of the year. In view of the rise in ex-
penditures which has already taken place, and the
further increases expected during the coming
months, the total for European defense expendi-
tures during the fiscal year 1953 will be substan-
tially over $10 billion.

These figures do not include support costs con-
tributed by the Federal Republic of Germany. If
the treaty creating the European Defense Com-
munity (EDC) is ratified, the German contribu-
tion will represent a substantial addition, in the
years ahead, to the European defense expenditures.

Although all categories of defense expenditures
will increase in fiscal year 1953, there will prob-
ably be a faster-than-average rise for military
construction and major materiel. This is due
partly to the fact that contracts which had been
entered into early in the defense program are
now resulting in increased deliveries of "long-
lead time" items, that is items which require a
long time for manufacturing and hence a long
interval between the time when contracts are let
and the time when deliveries take place. Military
construction is also being stepped up.

The United Kingdom accounts for the largest
single share of European defense expenditures
(over 40 percent) and by far the largest portion
of the major procurement and production of mil-
itary equipment. France is a close second in total
expenditure and, in addition, the second largest
producer of equipment. These two countries to-
gether account for about three-fourths of the total
defense expenditures among the European NATO
countries, and account for an even larger share
of the total production of equipment.

In most of the NATO countries the level of
defense, production, especially the production of
"hardware" items continues to reflect the increased
production capacity which has been made possible
by the United States aid through the Mutual Secu-
rity Agency,1 and, more recently, through produc-
tion resulting from the offshore procurement
program.2

Delivery of Military Equipment

The major part of the funds appropriated by
the Congress for the Mutual Security Program in
Europe is for military assistance. From the start
of the military assistance program in 1949
through the end of November 1952, funds allo-
cated to the Department of Defense for military
assistance to Europe totaled $11.2 billion. The
equipment for the military assistance program is
procured from both domestic and foreign sources.
The total value of shipments by the United
States to the Western European countries (from
the beginning of the military assistance program
through the end of November 1952) amounted to
over $2.6 billion, of which over $800 million was
shipped during the 5 months ended November 30,
1952.

1 See page 5. 2 See page 3.

During the last 6 months of 1952 there was a
substantial upward trend in the rate of shipments.
The increase is a reflection not only of increasing
availability of military equipment from United
States production lines, but is in addition, a reflec-
tion of the allocations policy established by the
President in January 1952. At that time the
President directed that allocations of military
equipment, after the requirements of Korea and
other active battle areas had been met, be made
by the Department of Defense in a way which
would assure the adequate equipping of the United
States forces in Europe, of NATO forces, and the
forces of other allies which in case of war would
be the first to be engaged.

Although shipments during the 6 months under
review were made at a rate considerably above
that for previous periods, an even higher rate of
shipments will have to be obtained during the next
6 months if the targets for the fiscal year ending
June 1953 are to be met. However, deliveries of
certain items, especially tanks and jet aircraft, are
taking place on an impressive scale. In some in-
stances, deliveries of equipment have had to be
held up temporarily because of lack of facilities in
Europe to receive and utilize available items.

Because of security regulations, it is not possible
to publish in detail military aid shipments to a
single country or to a single geographic area.
However, on a global basis, major items shipped
(from the beginning of military assistance
through November 1952) included:

Army :

Radios and radar 36, 600

Tanks and combat vehicles 18, 664

Motor transport vehicles 98, 689

Small arms and machine guns 1, 407, 213

Artillery 20, 095

Ammunition :

Small arms and machine guns

(rounds) 496,069,000

Artillery (rounds) 10,937,000

Navy:

Vessels 441

Aircraft 481

Air Force :

Aircraft 2, 311

Offshore Procurement

To help meet the need for equipment for the
European NATO forces and to assist the Euro-
pean NATO nations in developing or maintaining
an adequate production base for military supplies

and equipment, the program of offshore procure-
ment which was under way during the first 6
months of 1952 was scheduled to be increased sub-
stantially during the next 12 months. As of June
30, 1952, a total of $620 million worth of Mutual
Security Program funds had been earmarked to
pay for contracts placed in Europe under the off-
shore procurement program.

Between June and December 1952 an additional
$130 million worth of such contracts were
placed : $40 million in Italy — for naval vessels ;
$90 million in England — for Centurion tanks and
related ammunition. It is expected that during
the year ending in June 1953 offshore procure-
ment contracts amounting to $1 billion will be
placed in Europe.

Over $200 million of Mutual Security Program
funds are to be used in a joint $400 million pro-
gram— financed by the United States and certain
countries of Western Europe — for the production
of interceptor aircraft in Belgium, France, Italy,
the Netherlands, and the United Kingdom. An
even larger amount will be used for the procure-
ment of ammunition in Europe. This will have
the result not only of providing part of the initial
stocks of ammunition which are needed under the
program of United States military assistance to
the European defense build-up, but also of sub-
stantially enlarging the base for producing ammu-
nition in Europe. This will help to provide a
greater degree of self-sufficiency.

NATO Maneuvers

During the last 6 months of 1952 an extensive
series of training exercises and joint maneuvers
by the NATO armed forces were held. In these
operations, experience was gained by the various
commanders in the preparation and execution of
plans and in logistic support of field operations.

The most publicized joint exercise was held in
September 1952 and was known as Operation
"MAINBEACE." This was a joint naval op-
eration in the North Atlantic under the direction
of Admiral Lynde McCormick, Supreme Allied
Commander, Atlantic. A similar naval maneuver
known as Operation "LONGSTEP," was held in
the Mediterranean during November 1952. This
operation, in which Greek and Turkish forces par-
ticipated, was under the command of Admiral
Kobert B. Carney.

Four ground maneuvers were held during Sep-
tember.

Operation "BLUE ALLIANCE," an air maneu-
ver in which many nations participated, was also
held during September.

The ability to carry out such joint maneuvers
is a good measure of progress in building up the
defense in Western Europe. The success of such
operations depends not only upon the availability
of armed forces and equipment but also upon a
a central command structure and workable sys-
tems of communications, transportation, and
supply. Practically none of these latter essentials
existed 2 years ago.

European Economic Developments

In 1952, for the first time since 1945, Western
European over-all industrial production failed to
rise above the previous year. The continued rise
in the output of heavy industry was offset by the
decline in consumer goods. The over- all index
averaged about the same as the record output in
1951. While industrial production in the second
and third quarters of 1952 was somewhat lower
than in the corresponding periods of 1951, out-
put in the final quarter was again higher.

The year 1952 represents a period of consolida-
tion and internal adjustment in contrast to the
rapid expansion which characterized the earlier
phases of the post-Korean boom. Indeed, this
earlier phase was not without its draw-backs.
The inflation suffered by many Western European
countries after June 1950 injected considerable
distortion into the economies of Western Europe —
especially in their external financial position —
which required much subsequent correction. It
appears that the reaction to the post-Korean buy-
ing has about completed its course, thus permit-
ting a resumption of post-World War II economic
growth on a more stable foundation. The Euro-
pean nations have adopted as a broad objective the
expansion of industrial production by 25 percent
during the 5 years ending in 1956. European
military and political strength depend in large
measure upon substantial progress over the next
few years toward this goal.

Agricultural production during the crop year
1951-52 showed an increase of 3 percent over the
previous year, reaching a level 13 percent higher
than prewar. Further gains are expected in
1952-53. Only in Austria has the total output

failed to reach or surpass prewar figures. Pro-
duction of bread grains and coarse grains was
higher than the year before, while output of fats
and oils rose substantially. Sugar and potato
production were materially higher than prewar.

While total agricultural production increased,
the population also increased ; there were at least
2 million more people to feed than the year before.
As a result, per capita production showed only a
2-percent gain over 1950-51 and just about
equalled the prewar average.

Despite these over-all gains, Western Europe
is still dependent on the rest of the world for 30
percent of its food needs. Improved productivity
and higher output are therefore essential. Ac-
cordingly, the Organization for European Eco-
nomic Cooperation has raised its output goal to
25-30 percent over prewar for the 1956-57 crop
year.

Wholesale prices were generally lower at the
end of 1952 than at the beginning of the year.
Cost-of-living indexes at the end of 1952 were
about the same as at the beginning of the year or
somewhat higher.

The Dollar Gap. — The problem of the dollar
gap remains, especially for the United Kingdom.
During the 12 months ended June 30, 1952, the
United Kingdom lost more than $2 billion from
her gold and dollar reserves. The rate of loss
slowed down during the first 6 months of 1952 and
since June — with some assistance in the form of
raw materials, machinery, and other commodities
provided by the Mutual Security Agency, and as
a result of strict control of imports — payments
have been in balance.

At the end of December, Britain's gold and dol-
lar reserves totaled about $1.9 billion. In view of
the wide and sudden swings which can and have
occurred in the balance of payments position of
Britain — the United Kingdom being extremely
sensitive to economic changes all over the globe —
this level of reserves is not considered satisfactory
or even safe.

The United States provision of defense support
assistance to Britain was of substantial help in
maintaining British defense industries which, in
the absence of this support, would have lacked
raw materials or would have been devoted to the
production of export goods which could be sold
in order for Britain to buy essential imports of
food and raw materials.

The ministers of the 18-nation Organization for
European Economic Cooperation, meeting in Paris
a few days prior to the NATO meeting, empha-
sized their view that the dollar problem remained
at the center of European economic difficulties.
The "OEEC Fourth Report" adopted by the min-
isters recognized that this problem should be
solved by "trade, not aid," and that this solution
will require major European efforts in achieving
internal financial stability and in increasing pro-
ductivity and trade liberalization. This report,
though recognizing that the main responsibility
for solving the dollar problem rested with Europe,
pointed out that United States cooperation will
be essential if other countries are to earn the
dollars they need through trade and commerce.
The OEEC countries pointed to United States
foreign investment and trade policy as areas where
American cooperation was particularly important.
The European ministers noted that basic objec-
tives on both sides of the Atlantic must not be
sacrificed in the effort to close the dollar gap, and
that no panacea can be accepted which entails lack
of economic progress, large unemployment, inade-
quate defense, or living standards so low as to
threaten social stability.

Defense Support

During the last 6 months of 1952, the Mutual
Security Agency allotted $541 million and author-
ized the procurement of $447 million worth of
commodities and services for defense support to
Western Europe (including economic aid to Aus-
tria). The total value of paid shipments during
this period was $708 million, of which a large
part represented deliveries against authorizations
issued prior to the current fiscal year. The
United Kingdom and France received about 75
percent of the aid authorized.

Defense support, mostly in the form of raw ma-
terials, food, fuel, and machinery and equipment,
made it possible for the Western European nations
to devote a greater share of their production fa-
cilities to defense than would have been possible
otherwise. Aid furnished by the United States
largely represents the difference between what the
European nations need from the dollar areas to
keep their defense economies growing and what
they can pay for in dollars without diverting man-
power and industrial resources from their defense

build-up in an effort to earn additional dollars
through increased exports.

Counterpart Funds'

The European countries receiving defense sup-
port assistance under the Mutual Security Pro-
gram deposited in their special counterpart funds
accounts the equivalent of $611 million in the
5 months ended November 30, 1952.

The Mutual Security Act of 1952 requires that,
except as otherwise specifically authorized by law,
counterpart funds may be used only for programs
to carry out purposes for which United States
funds authorized by the Act would be available —
that is, primarily for military assistance and de-
fense support.

Since July 1, 1952, the Mutual Security Agency
has approved the withdrawal of the equivalent of
$495 million in counterpart funds. The bulk of
these releases — approximately 56 percent of the
total — was approved for the construction of mili-
tary installations and for the production and pro-
curement of materiel for the armed forces. Since
the approval of the Mutual Security Act of 1951,
over $800 million of counterpart funds has been
released in Western Europe for expansion of mili-
tary programs. In addition to direct military
uses, counterpart funds were channeled into de-
fense supporting industries and other uses.

The Mutual Security Act of 1952 revised the
proportion of counterpart funds to be reserved
for use by the United States so that not less than
10 percent of the counterpart deposited on or
after June 20, 1952, would be available for use by
the United States. Between July 1 and November
30, 1952, the equivalent of $35 million was set
aside for this purpose.

European Integration

In the Mutual Security Act of 1952 the Con-
gress restated "its belief in the necessity of fur-
ther vigorous efforts" in the progress toward
"political federation, military integration, and
economic unification in Europe." The Congress
also directed that the Mutual Security Program
should be "so administered as to support concrete
measures" toward these ends.

3 For a description of counterpart fund operations see
the Second Report to Congress on the Mutual Security
Program, pp. 11-12.

On July 25, 1952, the Schnman Plan for a
European Coal and Steel Community went into
effect. Joining together are the coal and steel in-
dustries of six nations (France, Western Germany,
Belgium, Luxembourg, the Netherlands, and
Italy) into a single competitive market. The
European Coal and Steel Community's High Au-
thority met for the first time in Luxembourg on
August 10, 1952, and turned its attention initially
to the organization of its own staff. The High
Authority was scheduled to make its first report to
the Coal and Steel Assembly on January 10, 1953.
It has set up several commissions to develop spe-
cific recommendations on problems confronting
the new organization.

In September 1952 a subcommittee of the Schu-
man Plan Assembly was established in Strasbourg
to undertake the preparation of a draft constitu-
tion for a proposed European Political Commu-
nity. This action was the result of a proposal
made at the May 1952 session of the Council of
Europe Assembly which had recommended that
the drafting of such a constitution be undertaken
immediately, either by the Schuman Plan Assem-
bly, or by members of the Council of Europe As-
sembly. The draft constitution is expected to
be completed early in 1953.

Vigorous debate has taken place in Europe con-
cerning ratification of the Treaty to create the
European Defense Community with its six-nation
European Defense Forces to include forces from
France, Germany, Italy, Belgium, the Nether-
lands, and Luxembourg. The Defense Commu-
nity, which, if approved by the respective parlia-
ments, would unify the armed forces of six nations
and provide a central source for the procurement
of military equipment for those nations, repre-
sents an unprecedented step in international rela-
tions and provides framework for the Federal
Republic of Germany to contribute to the defense
of Western Europe.

The Treaty for the European Defense Com-
munity provides that the Community itself, rather
than the individual member nations, may receive
military equipment provided through assistance
by other nations. The Mutual Security Act specif-
ically provides that military assistance may be
furnished by the United States to the European
Defense Community. If the Treaty is ratified,
the United States could transfer guns, tanks,

planes, and other military items through the Euro-
pean Defense Community.

The armed forces of the member nations, in-
cluding the forces to be contributed by the Fed-
eral Republic of Germany, will be under the direc-
tion of the Supreme Allied Commander, Europe.

Special Programs

Austria

The continued occupation of Austria and the
drain on Austrian resources by the Soviet author-
ities in Austria has prevented the achievement
of full economic recovery. In order to maintain
the economic independence of Austria and to
assist in progress toward further recovery, the
United States is continuing to make economic aid
available.

During the 6 months ended December 31, 1952,
the United States allotted $35 million to Austria,
mainly for the importation of foodstuffs, fuel,
and machinery. Additional aid will be made
available under the so-called Moody Program.4
The counterpart of the "Moody funds" will be
used for assistance to an Austrian productivity
center and for productivity loans to Austrian in-
dustry. These counterpart funds will be used
by the Austrian Government to help reduce the
effect of restrictive business practices and to
ensure that the benefits of increased productivity
are shared between management, labor, and the
consumers.

Spain

Congress has authorized that $125 million of
aid be made available for military, economic, and
technical assistance to Spain (in addition to the
previously authorized $62.5 million loan program
which has been entirely committed) — $100 mil-
lion under the Mutual Security Appropriations
Act of 1952, and $25 million under the Supple-
mental Appropriations Act of 1953. Negotiations
between the United States and Spain have been
in progress for several months and now appear to
be reaching a successful conclusion. Developments
during the last months raise hopes that the three
agreements — with respect to the construction of
air and naval bases in Spain, the provision of
economic and technical assistance, and the pro-

4 See page 7, "Encouragement of Free Enterprise."

vision of military assistance — will be completed
and signed early in the calendar year 1953, and
that the assistance made possible by Congress may
be made available to Spain at an early date.

Yugoslavia

In 1952 the Second Tripartite Conference on
aid to Yugoslavia was held in Washington, D. C.
It was attended by representatives of the United
States, France, and the United Kingdom. As a
result of agreements reached during this con-
ference, these three governments are continuing,
for the year ending in June 1953, a program of
tripartite assistance to Yugoslavia. It will
amount to $99 million, of which $78 million is
being provided by the United States. In addi-
tion, the United States is continuing to provide
large amounts of military assistance to help equip
the Yugoslav armed forces.

Our interest in Yugoslavia is based primarily
on defense considerations. The maintenance of
Yugoslavia's capacity to resist aggression involves
the provision of military and economic assistance,
not only to help equip the Yugoslav armed forces
but also to offset the economic effects of the dis-
ruption of relations between Yugoslavia and the
Soviet bloc and to prevent weakening of the Yugo-
slav economy and deterioration of the civilian
morale. Unfortunately, the need for economic aid
was aggravated by a severe drought that occurred
in the summer and fall of 1952. This sharply re-
duced domestic output of foodstuffs and made
large food imports necessary. Allotments of eco-
nomic aid to Yugoslavia amounted to $50 million
during the 6 months ended December 31, 1952.

Encouragement of Free Enterprise

To encourage competition of business enter-
prise, a higher rate of productivity in European
industry and agriculture, and the strengthening
of free labor unions in Europe, the Mutual Secu-
rity Act of 1952 5 provides that not less than $100
million of local currency counterpart funds shall
be used to stimulate "free enterprise and the ex-
pansion of the economies of those countries with
equitable sharing of the benefits of increased
production and productivity between consumers,
workers, and owners.1'

■ Section 9 (sec. 115 (k) of the Economic Cooperation
Act of 1948, as amended), the Moody amendment.

By December 1952 negotiations to set up special
programs and funds to achieve these objectives
had reached an advanced stage in 11 European
countries. The largest programs were being de-
veloped in France, Italy, Germany, and Austria;
smaller programs were under discussion with the
United Kingdom, Norway, Denmark, the Nether-
lands, Belgium, Greece, and Turkey.

The two principal industrial objectives of these
programs will be (1) higher productivity, i. e.,
greater output per man-hour through better prod-
uct design, better plant layout, better manage-
ment organization, and better production tech-
niques; and (2) lower sales prices of finished
products. Emphasis will be placed on the con-
cept of expanding production and enlarging com-
petitive markets, upon the elimination of restric-
tive marketing and labor practices, and on the
participation of consumers and workers in shar-
ing— in the form of lower prices and higher
wages — the benefits of expanding production.

In most countries funds will be used, on a loan
basis, to finance the adoption of new techniques
and new designs. A sizable part of the funds will
be used for the direct provision of technical as-
sistance, research, education and demonstration.
Such funds will be made available on an individ-
ual plant basis and will be administered by ap-
propriate institutions of a semigovermnental
nature, with the participation of business and
labor groups.

The actual expenditure of funds probably will
take place mainly in the latter part of this fiscal
year and in the coming fiscal year, because of the
careful preparations that must be made in estab-
lishing the appropriate institutions and in nego-
tiating and developing the specific programs at
the plant level.

The new programs and related activities are
being carefully planned to merge with the already
existing technical assistance programs which laid
the groundwork for the more aggressive produc-
tivity effort which is now under way.

Escapee Program

A beginning has been made in all major Euro-
pean countries of asylum on the problem of af-
fording escapees from the Iron Curtain better
opportunities for resettlement and a higher stand-
ard of interim care. Firm contractual relation-

ships have been entered into with the several vol-
untary agencies cooperating in the local imple-
mentation of the program, complementing the
transportation arrangements with the Migration
Committee.

Some 2,600 escapees had been resettled overseas
or were awaiting departure by December 31, 1952.
A number of projects have been undertaken to fa-
cilitate movement of escapees, such as aid in ob-
taining visas and supporting documents, counsel-
ing, and assistance in developing training. As
these intensive efforts on an individual basis reach
full potential, it is expected that the number of
departures will increase substantially.

Supplemental care projects have been initiated
to improve conditions of reception, and to furnish
additional food, clothing, medical and dental care,
and other supplies and services for escapees
awaiting resettlement. It is estimated that over
9,000 escapees are receiving direct assistance from
this activity, and many more are benefited indi-
rectly through the improvement of common-use
facilities such as living quarters and health and
sanitation installations.

Of the original allocation of $4.3 million au-
thorized by the President at the inception of the
program on March 22, 195*2, appi-oximately
$2.8 million was available for carry-over to fiscal
year 1953. In addition, nearly $2 million in for-
eign currencies has been made available for pro-
gram activity.

Dependent Overseas Territories

The dependencies of the European nations com-
prise over 75 territories with a total population of
about 173 million people. The largest such de-
pendent overseas territories are in Africa and
these, together with Malaya and the dependencies
in the Caribbean area, are of considerable stra-
tegic, economic, and political importance to
Europe, the United States, and the rest of the
free world. These territories, particularly those
in Africa, possess extensive undeveloped resources
of the raw materials and food which are essential
to the defense program of the free world and to
expanded civilian output. These territories
already make a substantial contribution of raw
materials and foodstuffs and are prevented from
making a greater contribution by the lack of cer-
tain resources, particularly those of adequate
financing and trained manpower. The Mutual
Security Agency has contributed to the overseas
development programs of the European metro-
politan countries both indirectly by assistance to
the metropoles and directly by the technical assist-
ance program that has been carried on in the
dependent overseas territories since 1949. Addi-
tional assistance in financing development of the
overseas territories is provided as part of the basic
materials program.6

0 See page 14.

The Near East and Africa

In the Near East and Africa, 12 nations re-
ceived aid from the United States through the
Mutual Security Program during the last 6
months of 1952: Greece, Turkey, Iran, the Arab
States (Egypt, Iraq, Jordan, Lebanon, Saudi-
Arabia), Ethiopia, Liberia, Libya, and Israel.

Military assistance was supplied to Greece, Tur-
key, and Iran. By virtue of their membership in
the Organization for European Economic Cooper-
ation, and more recently in the North Atlantic
Treaty Organization, Greece and Turkey receive
defense support assistance as a part of the Euro-
pean pi'ogram. The other countries in the area,
including Iran, receive assistance under the Point 4
Program, which is aimed at raising the levels of
food production, education, health, and other

services basic to sound economic and political
development.

Although the objectives of Point 4 are of a long-
range nature, and are not achieved by projects
designed to produce immediate and dramatic
effects, considerable progress has been made in
the Near East during the period of this report.
Except for Liberia, which has received United
States assistance for many years, the concept of
Point 4 Avas still new to the states in this area
at the start of 1952, and it has taken time to over-
come ingrained traditions, and suspicions of for-
eign participation in the affairs of the countries
concerned. Considering the difficult political and
economic conditions which existed in many states
of the area, progress to date has been truly re-

markable. In each country, particular emphasis
has been placed on those projects which will work
to the benefit of the greatest number of people.

In Jordan, Cooperative Services, along the lines
of the Servicios which have been the foundation of
the success of Point 4 in Latin America, have been
set up in all major fields of program activity. In
this country, with a population swollen by hun-
dreds of thousands of refugees from Palestine, ef-
forts are being made to make maximum beneficial
use of every drop of a critically scarce supply of
water. This involves the development of ground
water possibilities, the improvement of water con-
servation and distribution practices, and the con-
struction of storage facilities. Through Point 4,
funds are being made available for preliminary
surveys on the use of water from the Yarmuk
River, a tremendous potential source of water for
both irrigation and power.

In Egypt, where 75 percent of the population is
either directly or indirectly engaged in agricul-
ture and 90 percent of the country's exports are of
agricultural products, the Point 4 Program calls
for assistance in establishing an effective exten-
sion service, developing credit facilities, improv-
ing grain storage and improving and diversifying
the yield of agricultural products.

In Iran, despite an unsettled political situation,
a continued impasse on the oil issue with the
United Kingdom, a precarious financial situation,
and a growing sentiment against foreign "inter-
vention," the Point 4 Program has been moving
forward with increasing momentum. Among the
numerous projects successfully under way, prob-
ably the most outstanding is the assistance sup-
plied by the Technical Cooperation Administra-
tion to the Shah's land distribution program. In
cooperation with Iranian agencies and officials, as
well as the Near East Foundation, the Technical
Cooperation Administration is training super-
visors to assist Iranian farmers in making a livino-
from their newly acquired land. The project in-
volves financial assistance to the new landowner
so that he may buy seeds, livestock, and elementary
farm equipment.

In all states in the area, primary emphasis is
placed on agricultural and natural resource devel-
opment, because in the long run the hope of the
people in this area lies in their soil. At the same

time, attention is being given to education and
public health projects which are particularly
responsive to the needs of the people in the
crowded urban areas.

Special Programs

The Palestine Refugee Program

The United States continued to give full sup-
port to the United Nations Relief and Works
Agency (UNRWA) for Palestine Refugees in the
Near East in that Agency's development of large-
scale programs to help the refugees to become self-
supporting and in its provision of food, shelter,
and medical attention to more than 800,000
refugees on relief rolls.

The appropriation by the United States Con-
gress of $60,063,250 for Palestine refugee relief
and rehabilitation under the Mutual Security Act
of 1952, and the continuing support of many mem-
bers of the United Nations, made it possible for
UNRWA to negotiate additional programs to
help prevent this mass of homeless people from
threatening internal order and security in the
countries in which they are situated, to carry out
resettlement and development programs as rapidly
as political and financial factors will permit, and
to provide subsistence on a minimum basis pend-
ing the opening of economic opportunities for the
refugees to become self-sustaining.

A recent agreement was concluded with Jordan,
where about 450,000 — or over one-half— of the
refugee population is located, which provided for
resettlement projects designed to take care of
many thousands of refugee families. In addition
to this, the United Nations Agency is now inten-
sively studying a plan for harnessing and dis-
tributing the waters of the Yarmuk and Jordan
Rivers, which could make possible the settlement
of many thousand more families. Negotiations
have also been going forward with the Syrian
Government for a large-scale resettlement pro-
gram, and the Syrian Government has already
offered to grant large areas of state lands for
refugee use. While the problems remained great,
the good will and increasing cooperation through-
out the area gave hope that further vigorous efforts
by the United Nations Relief and Works Agency
would result in freeing many more refugees from
the precarious existence of living on relief.

Economic Aid to Israel

A special program of economic aid for the relief
and resettlement of refugees coming into Israel
was carried forward during the period under re-
view. The aid program was made possible by an
appropriation of $70,228,000 by the Congress for
this purpose, two-thirds of which had been ex-
pended or obligated by December 31, 1952.

To meet Israel's most pressing needs, roughly
half the funds made available were used for the
purchase of basic food requirements. Substantial
additional sums were expended for fodder, seeds,
fertilizers and veterinary drugs, for raw materials
used in the manufacture of clothing and footwear,

for medical supplies and for fuels. Construction
materials and equipment for the transport and
fishing industries were also supplied, and it is
hoped that increased emphasis can be placed on
developmental projects, rather than relief needs,
as the program progresses.

The Israeli Government has suffered from a
chronic and critical foreign-exchange shortage,
and every effort has been made to time the release
of funds in a manner which would also provide
maximum fiscal benefits. Intensive studies of
Israel's financial problems were undertaken in con-
nection with the economic aid program and the
Israeli Government is now taking steps to adjust
its economic activities to a level commensurate
with its financial capabilities.

Asia and the Pacific

Twelve nations in the Asia and Pacific area re-
ceived assistance from the United States under
the Mutual Security Program. Four of these
nations are in South Asia (India, Pakistan,
Afghanistan, and Nepal), and eight are in South-
east Asia and the Far East (Cambodia, Laos and
Vietnam — the Associated States of Indochina —
Burma, Indonesia, the Philippines, the Eepublic
of China on Formosa, and Thailand) .7

Military assistance was supplied during the last
half of 1952 to the Associated States of Indo-
china, the Eepublic of China on Formosa, the
Philippines, and Thailand. Shipments of mili-
tary equipment to these nations increased substan-
tially during the period under review. This mili-
tary equipment, plus advice and training provided
by the United States Military Assistance Advisory
Groups in these nations, is helping to develop
capable defense forces.

Point 4 Programs were carried on by the Tech-
nical Cooperation Administration in the Depart-
ment of State in the following countries : Burma,
India, Indonesia, Pakistan, Afghanistan, and
Nepal. Programs of economic and technical as-
sistance were carried on by the Mutual Securitj'
Agency in the Associated States of Indochina, the

7 In Burma and Indonesia the Technical Cooperation
Administration assumed on July 1, 1952, administrative
responsibility for the United States technical assistance
program as required by congressional action in the Mutual
Security Act of 1952.

Philippines, the Republic of China on Formosa,
and Thailand.

In India and Pakistan, ambitious projects for
economic development are under way. On Octo-
ber 2, 1952, the Community Development Pro-
gram in India was officially inaugurated with
impressive ceremonies.8

The Indian Government has adopted a 5-year
plan "to raise the standard of living of India's
people and open to them opportunities for a richer
and more varied life." The plan includes recom-
mendations for industry and agriculture as well
as recommendations for expanding programs of
communication, health, and education.

Of special interest is the new attitude of the
Government of India toward nationalization of
industry and toward the investment of foreign
capital in India. The first report on the 5-year
plan, which was presented by Prime Minister
Nehru on December 8, 1952, said that "nationaliza-
tion of existing enterprises is of little advantage
as most of the purposes in view can be served
by judicial regulation." Furthermore, the Gov-
ernment of India has assured foreign investors
that there will be no discrimination against
them; it has extended facilities for the remit-
tance of profits and repatriation of capital and

8 For a description of how the Community Development
Program operates, see pp. 26-27 of Second Report to
Congress en the Mutual Security Program.

has promised "fair and equitable" compensation
should there be, in the future, nationalization of
enterprises supported by foreign capital.

In Pakistan, the Point 4 Program has assisted
the Government to carry on programs for village
development, agriculture, control of disease, and
the development of natural resources.

As a result of drought in Pakistan in the spring
of 1952, an emergency need for food developed
in the fall. In normal years Pakistan produces
not only enough grain to feed its own population
but also a small amount for export. However,
this year Pakistan needed to import over 300,000
tons of wheat. To meet this need, $15 million of
Mutual Security Program funds were earmarked
for a long-term loan to Pakistan. The Export-
Import Bank handled the formal financial ar-
rangements and the Technical Cooperation Ad-
ministration was in charge of administering the
wheat program.

The loan agreement with the Government of
Pakistan was signed on September 17, 1952.
About 150,000 tons of wheat will be shipped under
this agreement. As of the middle of December,
contracts had been signed for the entire quantity.
The first shipment arrived in Pakistan on Decem-
ber 19, 1952.

During the period under review the Govern-
ment of Afghanistan, with assistance from the
Technical Cooperation Administration, set up an
administrative authority modeled along Tennessee
Valley Authority lines to develop the potentially
rich Helmand Valley. This project, in which the
Export-Import Bank and the Technical Coopera-
tion Administration are participating jointly with
the Afghan Government, is the core of Afghan-
istan's development program, calling for the
creation of 20,000 kilowatts of electric power, and
water for the irrigation and settlement of some
450,000 acres of land.

Seven agricultural technicians and one public
health doctor supplied by the Technical Coopera-
tion Administration were beginning work on
education and training in Nepal and laying the
groundwork for a village development program
modeled along the lines being followed in India.

During September-October 1952 the Burmese
Government sent an economic mission to the
United States. The Burmese mission and United
States officials concluded a program agreement
involving the expenditure of $6.5 million by the

United States and about the same amount of
rupees by the Government of Burma for specific
projects in the fields of agricultural extension and
education, irrigation and flood control, f orestry de-
velopment, environmental sanitation, field health
centers and hospital construction, education, engi-
neering, and technical training.

In Indochina, the French Union continued to
wage war against the Communist Viet Minh.
Substantial military aid from the United States
has played a major role in the campaigns against
the Viet Minh. Economic and technical aid from
the United States has helped to give the people of
these war-torn lands confidence in their future
well-being. In addition to direct assistance to the
Indochinese States, United States assistance to
France has indirectly helped the Indochinese in
their bitter battle for freedom.

In the Philippines, American assistance through
the Mutual Security Program has enabled the
Philippine Government to build up the armed
forces it needs to preserve internal security, and
to establish conditions more favorable to economic
development.

In these Islands there is emerging a pattern
which may be applied to other areas in the world :
the progression from grant aid, to government
loans, and then to the investment of private capi-
tal. Grant aid from the United States to the
Philippines is helping to assure the internal secu-
rity and basic economic and social preconditions
for the development of that nation. Such internal
security and fundamental development make pos-
sible the investment which is needed for further
economic progress. On December 4, 1952, the Ex-
port-Import Bank concluded arrangements for a
$5 million line of credit to the Philippines for
loans, to small industrial enterprises, which will
supplement large development loans like that
made for the Ambukalo hydroelectric project.
The Philippine Central Bank will re-lend this
money to private business firms on the Islands.
It is hoped that in the future there will be sub-
stantial investment of private capital — both from
the United States and other nations — which will
contribute to the growth and prosperity of the
Filipino economy.

A substantial percentage of all Mutual Security
Program funds for the Far East has gone to assist
the Republic of China on Formosa. The primary
aim of military assistance has been to train and

re-equip sufficient Chinese armed forces to protect
the Island of Formosa against any attack from
the Chinese communists on the mainland. Eco-
nomic assistance has been necessary to support
the military build-up and to help the Chinese Gov-
ernment to overcome the massive economic prob-
lems on Formosa so that economic stability can be
maintained and progress made toward achieving
a more self-supporting status.

In one year alone, 1949, the population of For-
mosa increased by almost 2 million people as a
result of evacuation from the mainland of the
Chinese Nationalist Government, units of the
Chinese armed forces, and great numbers of
civilian refugees. At that time, because of chaotic
postwar conditions, food and industrial produc-
tion on Formosa were at low levels. The economic
turmoil and sharp inflation already existing were
further intensified by the migration from the
mainland.

With United States assistance, Formosa has
largely brought inflation under control; retail
prices, which increased 75 percent in the last
6 months of 1949, an additional 72 percent in 1950,
and a further 52 percent in 1951, did not rise at
all during the first 9 months of 1952.

Agricultural production on Formosa has made
marked progress with the assistance of the Joint
Commission on Rural Reconstruction. The in-
crease in food production and taxable income in
rural areas, as well as improved rural welfare, has
contributed much to economic stability.

On November 29, 1952, the Chinese Government
presented to the United States Government rep-
resentatives a "4-year plan" which has as its ob-
jective the termination of economic aid from the
United States. Much remains to be done to create
those conditions of economic development and sta-
bility which will enable the Republic of China on
Formosa to become economically self-supporting.
These problems include attracting private invest-
ment, both domestic and foreign; increasing

export earnings; and balancing the budget
through careful control of expenditures and in-
creased tax collections.

The economic program of the Mutual Security
Agency in Thailand has emphasized the produc-
tion of more rice. Exports of rice from Thailand
can do much to bring stability to other nations in
the area which are unable to grow the amount of
rice they need. Other technical assistance pro-
grams of the Mutual Security Agency have
enabled the Thai Government to expand its
transportation facilities which are needed both
for military use and for further economic
development. >

In six states of Southeast Asia (the three Asso-
ciated States of Indochina, the Philippines, the
Republic of China on Formosa, and Thailand),
economic and technical assistance from the United
States is administered by the Mutual Security
Agency. During the last 6 months of 1952, $133
million was allotted these countries, of which
$107 million had been authorized for specific
goods and services. Payments for aid to these
four countries amounted to $58 million during
the period under review, including expenditures
authorized in previous months.

Korea

The United States provides economic assist-
ance to Korea through the United Nations Korean
Reconstruction Agency ( UNKR A ) . This Agency
was established in December 1950 and is respon-
sible for general relief and rehabilitation. Dur-
ing the continuation of hostilities, the Unified
Command has primary responsibility for emer-
gency direct relief of the civilian population.
During the last 6 months of 1952 arrangements
were completed with the United Nations Com-
mand whereby UNKRA will, during the first 6
months of 1953, carry on a $70 million program of
sustaining commodity imports and projects of
rehabilitation.

American Republics

Negotiations of the required agreements for
grant-aid military assistance were concluded with
seven countries in Latin America during the first
6 months of 1952.9 Four of the agreements be-
came effective on the day they were signed, or
shortly thereafter. The agreement with Brazil,
Chile, and Uruguay are effective when ratified
by those countries. Chile has completed ratifica-
tion.

The first shipments, on a grant basis, of military
equipment took place in July. Such military as-
sistance was supplied, during the last 6 months of
1952, to Chile, Colombia, Cuba, Ecuador, and
Peru. These shipments were in accordance with
that section of the Mutual Security Act which
provides that grant assistance may be furnished
only in accordance with defense plans which are
found by the President to require the recipient
country to participate in missions important to
the defense of this hemisphere. The grant-aid
military assistance program for Latin America is
intended to help the above-named countries to pre-
pare for hemisphere missions which the United
States might otherwise have to perform.

United States programs of technical assistance
have been in progress in Latin America for over
10 years. At present there are some 3,000 differ-
ent projects in operation — in all the Latin Ameri-
can Republics except Argentina, The program in
Latin America includes not only the basic fields
of health and sanitation, agriculture, and educa-
tion, but has been broadened to include such fields
as housing, social welfare, civil aviation, minerals
development, public roads, public administration,
and industrial development.

In July 1952 the Congress appropriated $20.3
million for the Point 4 Program in Latin America.
In the fiscal year ended June 30, 1952, direct con-
tribution to Servicio operations — funds and serv-
ices, including the value of land and buildings —

" Brazil, Chile, Colombia, Cuba, Ecuador, Peru, and
Uruguay.

averaged about $4 from the Latin American coun-
tries to every $1 from the United States.

At the end of 1952 there were about 600 United
States technicians working with almost 8,800 citi-
zens of the 19 Latin American countries. In the
field of health, Point 4 projects in operation
numbered 590, including the construction of 76
water supply systems, 14 sewerage systems, 24 hos-
pitals, 24 health centers, and one nursing school ;
the operation of 66 health centers, 14 hospitals,
and 24 mobile units; the setting-up of 60 local
training courses and 25 health education projects ;
and the direction of 12 malaria-control projects.

In the field of agriculture, the programs in
Latin America involve projects in research, train-
ing for home economics, extension services and
rural development, which include the develop-
ment of new agricultural areas. The development
program is made up of projects for land clear-
ance, irrigation and drainage, soil conservation,
food processing and storage, control over weeds,
insects and plant diseases, the operation of farm-
equipment pools, demonstration of the best use of
fertilizer, management of livestock and range
land, and the development and production of bet-
ter seeds and the establishment of nurseries.
Other projects include forest management and
road building.

During the past year, the Institute of Inter-
American Affairs, which is the operating agency
in Latin America for the Technical Cooperation
Administration, has organized a division called
the Division of Industry, Government, and Tech-
nical Services.

The industry branch of this division is con-
cerned with raising the productivity of existing
industries in Latin America. Two industrial
Servicios have been established in Brazil and Chile
and more are under consideration. These Serv-
icios assist in plant layout, in product design and
production methods and give advice ranging from
the acquisition of machine tools to the best meth-
ods of cost accounting.

Other Parts o£ the Mutual Security Program

Reimbursable Military Assistance

Reimbursable military assistance is provided
under the authority of Section 408 (e) of the Mu-
tual Defense Assistance Act of 1949, as amended
by Section 8 (b) of the Mutual Security Act of
1952. Under this Section, the President is au-
thorized to transfer — or enter into contracts for
the procurement for transfer — equipment, ma-
terials, or services to eligible foreign governments,
without cost to the United States.

Assistance in this form is characteristic of the
basic philosophy of the Mutual Security Program
as a whole. It provides a means whereby the
United States can help the friendly nations of
the world to help themselves. Requests from na-
tions for reimbursable military assistance can be
merged with the over-all procurement programs
of the United States military departments, thus
avoiding conflicting demands on the productive
capacity of the United States. Fifty-one nations
are at present eligible to make purchases of mili-
tary equipment under this authority.

As of October 31, 1952, 49 countries had sub-
mitted requests for reimbursable military assist-
ance. Forty-one of these countries had made
purchases of equipment, materials, or services
valued at $601 million ($185 million, Army ; $85
million, Navy; and $331 million, Air Force).
Purchases were made by cash advances of $355
million and the balance of $246 million through
the use of contractual obligational authority un-
der the "dependable undertaking" method of
payment, as provided for in the Mutual Defense
Assistance Act of 1949, as amended. Of the total
purchases made, $512 million was for end items,
supplies, and spare parts. Deliveries of this
equipment, were valued at $156 million and had
been made to 33 countries through October 1952.

Training

Training, while a comparatively small monetary
part of the over-all military assistance program,
is a very vital part. It is provided to insure that
the equipment supplied under the program is
properly maintained and operated, to the end
that maximum utilization of that equipment will
be achieved. The need for training is generated
by the delivery of equipment and, therefore, train-

ing requirements are directly related to the items
being supplied.

Training programs differ from country to coun-
try in relation to the type of items being supplied
and the technical advancement of the military
personnel of the recipient countries. Through
the training program we are providing a cadre of
trained instructors who, upon return to their own
country, are supplying the acquired technical
knowledge to the maintenance and operation of
the equipment and conducting their own training
programs.

In the interest of economy, training is carried
on in the United States overseas installations to
the maximum extent possible, making use of exist-
ing training facilities and personnel which are
required to support our own overseas military
forces. Where circumstances permit, training is
given directly to the forces in the field by the
sending of mobile training teams, technical repre-
sentatives, and technical specialists. To date
approximately 20,000 foreign students have re-
ceived training in United States service schools
and an additional 5,000 are currently in training.
Service schools have not been a one-way proposi-
tion, for it has been reported that the foreign
students have also contributed toward the im-
provement of our own methods and techniques.

Basic Materials Program

The Mutual Security Agency has continued to
make counterpart funds available to the Defense
Materials Procurement Agency for the purchase
and development of strategic materials which are
in short supply in the United States.10

In addition, under authority granted by Con-
gress in the Mutual Security Act of 1952 (section
514) the Mutual Security Agency is carrying out a
basic materials program which seeks to expand
the production and facilitate the delivery of essen-
tial raw materials needed not only by the United
States but by all countries receiving United States
assistance. This program will help these coun-
tries to obtain the materials necessary to expand
production, it will help reduce their dependence
upon the dollar area for such materials, it will

10 See pp. 45-46 of Second Report to Congress on the
Mutual Security Program.

reduce the drain upon the United States own re-
sources of these materials, and it will reduce the
former dependence on the Soviet Bloc for raw
materials.

In developing the program it has been found
that private financing, both from the United
States and other nations, is more readily available
for the direct production facilities than it is for
the supporting facilities such as transportation,
jjorts, and power resources. For this reason, the
basic materials program will, for the most part,
assist in financing these ancillary facilities, the
lack of which is holding back increased private
investment and increased production of materials.

Aid to U. S. Small Business

During the period July to December 1952, the
Office of Small Business in the Mutual Security
Agency expanded its program to assist United
States small business enterprises to participate in
the Point 4 Program of the Technical Cooperation
Administration, as well as in the Mutual Security
Agency program. It published 65 "Small Busi-
ness Circulars" devoted exclusively to procure-
ment for Technical Cooperation Administration
projects, and 306 Circulars on trade opportunities
resulting from the Mutual Security Agency oper-
ations. The Department of Defense, through its
Military Small Business Specialists; the Small
Defense Plants Administration, through its re-
gional offices; the Department of Commerce,
through its 42 Field Offices; and 750 individual
Field Counselors of the Mutual Security Agency
cooperated in distributing procurement informa-
tion from both the Mutual Security Agency and
Technical Cooperation Administration.

To increase the amount of procurement data
resulting from Technical Cooperation Adminis-
tration operations, Small Business Officers were
appointed by Technical Cooperation Administra-
tion Missions. Copies of the "Directory of U. S.
Companies" published by the Mutual Security
Agency were distributed in countries where the

Technical Cooperation Administration has pro-
grams in order to apprise host governments, and
local private importers, of commodities and serv-
ices available from United States small business
enterprises.

In addition, arrangements were completed for
distributing the new "Directory of Combination
Export Managers," also published by the Mutual
Security Agency, in all countries where the
Mutual Security Agency and Technical Coopera-
tion Administration have programs, and also in
the United States. This directory lists com-
modities and services which can be supplied by
small United States enterprises through com-
bination export managers. The directory will
assist small manufacturers in the United States
who are unable to afford an export department to
participate in programs of the Mutual Security
Agency and the Technical Cooperation Adminis-
tration by arranging for combination export man-
agers to perform necessary export functions.

The Contact Clearing House Service is being
expanded to include countries in the Far East,
Asia, Africa, and Latin America, and the depend-
ent overseas territories of the nations of Western
Europe. This Service, started in Europe in 1950,
encourages and helps American enterprises to
explore possibilities of investing their industrial
patents, processes, techniques, equipment, services
and/or capital abroad. It publishes specific op-
portunities for American investments abroad, and
also proposals on the part of American enter-
prises to invest abroad. This information is dis-
seminated by 5,785 volunteer, unpaid Field Coun-
selors in the United States and Western Europe.
Approximately 2,400 United States and foreign
firms have registered specific investment proposals
with this Service, which is conducted by the Office
of Small Business at nominal cost and is made
possible by the cooperation of private business
service groups, such as industry associations,
chambers of commerce and banks.

5 GOVERNMENT PRINTING OFFICE: I9S3

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