ACT FOR INTERNATIONAL DEVELOPMENT

THURSDAY, MARCH 30, 1950

UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, D. C.

The committee met, pursuant to call, at 10:30 a. m., in the caucus room, room 318, Senate Office Building, Senator Tom Connally presiding.

Present: Senators Connally (chairman), Fulbright, Wiley, Smith, and Lodge.

The CHAIRMAN. The committee will please come to order.

The committee has met this morning for some hearings on the question of the point 4 program of the President. I think the public is pretty well advised as to what that means, and we have the pleasure and honor of having with us the Secretary of State to discuss it.

Mr. Secretary, we are very pleased to have you and we are pleased to hear you on the question of inserting an amendment to the bill in the Senate on the ECA dealing with the point 4 program. Some people call it the

Secretary ACHESON. Aid for international development.

The CHAIRMAN. Aid for international development. Of course, I knew that "aid" would be in it somewhere, regardless of what you called it.

Senator WILEY. First aid?

The CHAIRMAN. Some kind of aid. At this point the bill will be put in the record.

[S. 3304, 81st Cong., 2d sess.]

Amendment intended to be proposed by Mr. Connally, on behalf of the Committee on Foreign Relations, to the bill (S. 3304) to amend the Economic Cooperation Act of 1948, as amended, viz: At the end of the bill, insert the following new title:

TITLE V

SEC. 501. That this title may be cited as the "Act for International Development".

SEC. 502. It is declared to be the policy of the United States and the purpose of this title to aid the efforts of the peoples of economically underdeveloped areas to develop their resources and improve their working and living conditions, by encouraging the exchange of technical knowledge and skills.

SEC. 503. Within the limits of appropriatons made available to carry out the purposes of this title, the President is authorized to make contributions to the United Nations and the Organization of American States and their related organizations, and to other international organizations, for technical cooperation programs carried on by them which will contribute to accomplishing the purposes of this title as effectively as would participation in comparable programs on a bilateral basis.

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SEC. 504. The President is authorized to undertake and administer bilateral technical cooperation programs carried on by any United States Government agency and, in so doing

(a) to coordinate and direct existing and new technical cooperation programs;

(b) to seek the participation of private agencies and persons to the greatest extent practicable;

(c) to make and perform contracts or agreements with, and make advances and grants to, appropriate persons, corporations, or other bodies of persons, or to State, local, or foreign governments for technical cooperation programs: Provided, That with respect to contracts or agreements which entail commitments for the expenditure of funds appropriated pursuant to the authority of this title, such contracts or agreements, within the limits of annual appropriations or contract authorizations hereafter made available, may not run beyond June 30, 1952;

(d) to provide for printing and binding outside the continental limits of the United States, without regard to section 11 of the Act of March 1, 1919 (44 U. S. C. 111).

SEC. 505. In carrying out the programs authorized in section 4, the President shall make assistance available only where he determines that the country being assisted pays a fair share of the cost of the program; provides all necessary information concerning such program and gives it full publicity; seeks the greatest possible coordination of its technical assistance programs; and cooperates with other participating countries in the mutual exchange of technical knowledge and skills.

SEC. 506. The President is authorized to prescribe such rules and regulations as may be necessary and proper to carry out this title, and to exercise any power or authority conferred on him, through the Secretary of State or through any other officer or employee of the United States Government.

SEC. 507. In order to carry out the purposes of this title

(a) the President shall, by and with the advice and consent of the Senate, appoint one person who, under the direction of the President or such person as he may designate pursuant to section 7 to exercise the powers conferred on him by this title, shall be responsible for planning, implementing, and managing the programs herein authorized. He shall be compensated at a rate fixed by the President without regard to the Classification Act of 1949 but not in excess of $15,000 per annum;

(b) such additional civilian personnel, including attorneys, may be employed without regard to subsection (a) of section 14 of the Federal Employees Pay Act of 1946 (60 Stat. 219), as amended, as may be necessary to carry out the policies and purposes of this title. Experts and consultants or organizations thereof may be employed as authorized by section 15 of the Act of August 2, 1946 (5 U. S. C. 55a), and individuals so employed may be compensated at a rate not in excess of $75 per diem.

(c) persons employed for duty outside the continental limits of the United States and employees of the United States Government assigned for such duty shall receive compensation at any of the rates provided for the Foreign Service Reserve and Staff by the Foreign Service Act of 1946 (60 Stat. 999), as amended, together with allowances and benefits which shall not exceed those established thereunder, and may be appointed to any class in the Foreign Service Reserve or Staff in accordance with the provisions of such Act;

(d) alien clerks and employees employed for the purpose of performing functions under this title shall be employed in accordance with the provisions of the Foreign Service Act of 1946, as amended;

(e) officers and employees of the United States Government may be detailed to offices or positions to which no compensation is attached with any foreign government or foreign government agency or with any international organization: Provided, That while so detailed any such person shall be considered, for the purpose of preserving his privileges, rights, seniority, or other benefits, an officer or employee of the United States Government and of the United States Government agency from which detailed and shall receive therefrom his regular compensation, which shall be reimbursed to such agency from funds available under this title: Provided further, That such acceptance of office shall in no case involve the taking of an oath of allegiance to another government.

SEC. 508. In order to carry out the provisions of this title, there shall be made available such funds as are hereafter authorized and appropriated from time to time for the purposes of this title: Provided, however, That for the purpose of carrying out this title through June 30, 1951, there is hereby authorized to be appropriated a sum not to exceed $45,000,000, including any sums appropriated to carry on the activities of the Institute of Inter-American Affairs, and technical cooperation programs as defined in section 10 herein, under the United States Information and Educational Exchange Act of 1948 (62 Stat. 6). Activities provided for under this title may be carried on under such appropriations or under authority granted in appropriations Acts to enter into contracts pending enactment of such appropriations. The President may allocate to any United States Government agency any part of any appropriation available for carrying out the purposes of this title. Such funds shall be available for obligation and expenditure for the purposes of this title in accordance with authority granted hereunder or under authority governing the activities of the Government agencies to which such funds are allocated.

SEC. 509. The President shall transmit to the Congress an annual report of operations under this title.

SEC. 510. As used in this title, the term "technical cooperation programs" means programs for the international interchange of technical knowledge and skills designed to contribute to the balanced and integrated development of the economic resources and productive capacities of economically underdeveloped

areas.

SEC. 511. All authority granted in this title shall expire on June 30, 1955, unless extended by Act of Congress.

The CHAIRMAN. All right, Mr. Secretary; we will be glad to hear you.

STATEMENT OF HON. DEAN ACHESON, SECRETARY OF STATE, ACCOMPANIED BY HON. WILLARD L. THORP, ASSISTANT SECRETARY OF STATE, AND HON. PHILIP C. JESSUP, AMBASSADOR AT LARGE Secretary ACHESON. Mr. Chairman and members of the committee, I am glad to have this chance to discuss with you the legislation which, as the chairman has just pointed out, is entitled an "Act for International Development".

FOUR COURSES OF ACTION IN THE PRESIDENT'S PROGRAM

The proposed measure, which is now being considered as an amendment to ECA legislation, is the underlying legislative authority for carrying out a program to assist the people of the underdeveloped areas of the world in their efforts to develop their economic resources. It is an integral part of a general program outlined by the President as a basis for assuring peace and personal freedom in the world. This program contained four interrelated courses of action. The first course is the continuing of our unfaltering support of the United Nations and its related agencies. The second course is the continuing of our programs for world economic recovery. The third course is the strengthening of freedom-loving nations against the dangers of aggression by providing military advice and equipment to those nations which will cooperate with us in the maintenance of peace and security. The fourth course is the program which you are now considering. It involves making available to peace-loving peoples the benefits of our technical knowledge and skills. It also involves cooperation with other free nations in fostering capital investment in areas needing development. Its aim is to help the free peoples of the world through their own efforts to produce the things they need for a decent life.

The legislation before you is the product of more than a year of careful study in which 43 agencies of the Federal Government have participated. It is the product also of consultation with interested members of the Congress and with leading members of business and labor and scientific groups. I would say that it represents the best combined judgment of all who were concerned in shaping it.

WHAT THE LEGISLATION DOES

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

As this committee well knows, the activities proposed are not new at all. For many years Americans have been sharing technical skills with other peoples, and investing their capital abroad. This is part of the American experience. This is part of the American tradition. Why, then, we may ask, did the President propose to raise these activities to the level of a national policy and a great national enterprise? Why did he single out this policy and this enterprise as one of the four cardinal aims of American foreign policy?

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

Today the free way of life is under attack in every part of the world, including those areas of the world which we call "underdeveloped."

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

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

PROGRAM'S SIGNIFICANCE FOR NATIONAL SECURITY

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

We are spending billions for military defense-as we must. We are spending other billions for economic reconstruction in Europe and vital points in the Far East-again, as we must. We are organizing joint defense through the North Atlantic Treaty and the military-assistance program—again, as we must. We are organizing joint action to remove trade barriers through tariff and reciprocal trade agreements and through the International Trade Organization. We are attempting to remove the causes of international friction and