might arise may in and of itself serve to prevent the contingencies from arising. The committee expects, of course, that if any diversion of ECA funds or counterpart funds is made, there will be a full and complete accounting of such activities. 22. GRANTS AND LOANS In the original ECA legislation it was provided that $1,000,000,000 of the total authorized should be available only in the form of loans or guaranties. Last year the amount available only for loans was reduced by Congress to $150,000,000. Loans in excess of these fixed limits were not made because of a decision by the Administrator, in consultation with the National Advisory Council, that the participating countries could not assume further dollar obligations. This committee is of the opinion that none of the 1950-51 assistance should be specifically limited to loans but that the amount so used should be left to the discretion of the Administrator, acting in consultation with the NAC. As of June 30, 1949, $972,300,000 of the United States aid had been in the form of loans as against $4,948,883,337 in the form of grants, subsidies, and contributions. The estimates for fiscal 1950 are $150,000,000 for loans as against $3,594,728,063 for grants, etc. 23. SMALL BUSINESS Last year the act was amended to require the Administrator insofar as practicable to assist American small business to participate equitably in the furnishing of commodities and services financed with ECA funds. Although ECA is not a purchasing or procurement agency and, in fact, was instructed to utilize private channels of trade to the maximum extent consistent with the purposes of the act, a considerable segment of American small business complained that they did not have sufficient information to enable them to share in the business which stemmed from ECA activities. The ECA has not reported on steps taken during the past year to assist small business to participate more fully in its programs. Circulars have been utilized to bring prospective purchasers to the attention of American businessmen. Information has been supplied on when and where to submit bids. Lists of foreign purchasers have been compiled for issuance to small business. A counseling service has been established. These are all services rendered in the United States. At the same time, the ECA has taken steps to bring the names of American exporters to the attention of European purchasers. The committee has not received any complaints from small business, and is satisfied that the ECA has made real progress in assisting small business to participate equitably in the recovery program. 24. TECHNICAL ASSISTANCE PROGRAM Under the original legislation ECA is permitted to use funds in order to extend technical assistance to the participating countries upon their request. Up to the end of 1949, 5.0 million dollars had been set aside for this purpose. Much of the cost of technical assistance activities is normally borne by the participating countries. The program consists of furnishing assistance in meeting problems pertaining to industrial productivity, marketing, agricultural productivity, manpower utilization, public administration, overseas development, tourism, and transportation and communication. To accomplish this purpose, foreign experts and delegates visit the United States; United States experts are sent abroad; the aid of international organizations is enlisted; basic surveys, technical and professional services are rendered; and the technical literature, films, and materials needed for training and illustrative purposes are procured. Under this program some 350 experts have been sent from the United States to provide service, and 481 persons have come to the United States for training. The ECA now requests $15,000,000 for this purpose based upon a careful screening of selected projects totaling over $25,000,000. A substantial part of the amount appropriated will go to the continuation of technical assistance for Greece. 25. INFORMATION PROGRAM The publicity given to United States aid varies with each country. In some there is general appreciation and understanding of the aid we are furnishing. In others it is not as well known. The committee was told that Italy has an excellent program of publicizing the source of ECA assistance and the purposes of the Marshall plan. France has been very slow in this respect, but is rapidly improving. In Britain full effect is being given to the informational program. For example, in addition to the types of publicity mentioned below, every British firm which uses Marshall-plan-aid materials carries posters telling the workers that, "Marshall aid ends in 1952, as each month goes by we must pay for more of what we need by our exports of manufactured goods." As of December 31, 1949, local currency equivalent to $12,502,950 had been spent on information projects. Western Europe's 2,000 daily and weekly papers, having a combined circulation of 110,000,000 are now publishing 4,000 Marshall-plan stories a week. Over 40,000,000 listeners hear two special ERP broadcasts in their respective languages. More than 50 documentary ECA films and ECA newsreels are being shown to a weekly audience of 30,000,000 people. 5,000,000 European fair-goers are seeing ERP exhibitions, a million ERP texts are used in German schools, and four ERP showboats ply the inland waterways of Europe. Other informational projects include posters, visual-aid lectures, forums, public-opinion polls, and research analyses. The committee feels strongly that such projects should be encouraged so that the people of the participating countries will understand fully the nature of the assistance the United States is giving. 26. TERMINATION OF TRANSPORTATION SUBSIDIES ON RELIEF PACKAGES ECA reported to the committee that in certain participating countries the need for relief packages sent via parcel post and commercial firms has decreased to the point where the United States Government subsidy authorized by section 117 (c) of the act is no longer justified. Accordingly, ECA proposes to stop paying the ocean-freight subsidy on shipment of such packages to those countries that agree that this subsidy is no longer needed, and to revise the agreements under which those countries pay inland transportation costs on such packages and admit them duty-free. At the moment the countries which appear to be in this category are the United Kingdom, the Netherlands, France, and Germany. The ECA budget estimates for fiscal 1951 reflect the reduction of these ocean-freight subsidies. Discontinuance of the subsidy as outlined will not mean that the flow of gift parcels to those participating countries affected will cease. It merely will require that, in the future, persons in the United States shipping packages to those countries pay the full rate of transportation, as they did prior to the ECA subsidy, instead of continuing to receive assistance for this purpose from the United States Government. The subsidy will not be discontinued on supplies shipped by CARE and other voluntary nonprofit relief agencies. 27. END OF THE PROGRAM IN 1952 to ECA expects the aid program to end in 1952. The Administrator has reiterated this objective on many occasions, and has stated in this connection that while it will be difficult accomplish, he believes the goal is attainable. The planning of ECA and the participating countries will continue to be directed toward that end. Progress to date indicates that the participating countries can achieve an economic position which will not require extraordinary outside assistance after 1952. According to information submitted to it, the committee believes that the dollar deficit of western Europe can be brought to manageable proportions in another 2 years. There should be no relaxing on the part of ECA and the participating countries to attain this objective. E. CONCLUSIONS 28. CONCLUDING COMMENTS ON ERP The European recovery program, now at the half way mark, has made remarkable progress toward the achievement of those great goals which the United States and the countries of western Europe jointly set up for it 2 years ago. It has injected new lifeblood into the European economy. It has served as a vigorous antidote to the subversion and intrigue of communism. It has given new strength and courage and life to the free peoples of western Europe. It has reached a new high mark in peaceful cooperation among the nations. With all this progress, much remains to be done. Above all it is essential that the countries of western Europe continue to move in the direction of economic integration. This is imperative if their people are to preserve the precious gains that have been made and to enjoy the many advantages which flow from a dynamic, expanding economy functioning in a large market area relatively free from trade restrictions. The committee is convinced that the American people can forever be proud of the role that we are playing in the recovery of western Europe. It sincerely hopes that the Congress, fully cognizant of the fact that the recovery of western Europe is vital to our own security and well-being, will throw its full support back of the program for another year. For only if this is done can we be sure that the free nations of the world will remain strong enough to continue their quest for peace and freedom. PART II. THE KOREAN AID PROGRAM Title II of the bill provides for the continuation of our aid to Korea for another year in an amount not to exceed $100,000,000. It will be recalled that last year the administration requested an appropriation of $150,000,000 for assistance to Korea during fiscal 1950. (See committee report No. 748.) While this authorization was agreed to by the Senate on October 12, 1949, it did not become law until February of this year when Congress approved $120,000,000 for the project. Meanwhile, $60,000,000 of this amount had been advanced in supplemental appropriation bills in order to keep the program going. 29. MAIN OBJECTIVES OF THE PROGRAM The authorization requested for 1951 is in furtherance of a 3-year, long-range program of economic development in Korea designed to increase production, reduce the need for imports, increase exports, and improve the standard of living of the people. The amount requested in the present bill would permit the achievement of these objectives by the continuance of raw material and fertilizer imports, and by the provision of funds for certain recovery projects. The program is based on the assumption that Korea will remain divided at the thirty-eighth parallel and that trade between the two areas is precluded. Since 1945 when our troops occupied South Korea the United States has extended various types of assistance to the Korean people. Through this aid we hope to strengthen the Republic of Korea so that it may successfully withstand the constant threat of Communist expansion from the north and serve as a possible nucleus for the eventual unification of the country on a democratic basis. The United States has taken the leadership in the United Nations in helping the Korean people to attain their goal of an independent nation, united and free from foreign domination. This program will help further our objectives in Korea and in the Far East generally. 30. MAJOR CATEGORIES OF AID The program contemplated for the fiscal year 1951 will include the following major categories: The following chart shows the way in which the aid for 1951 is expected to be expended: |