Provided further, That in the case of any such transfer, the President shall forthwith notify the Committee on Foreign Relations of the Senate, the Committee on Armed Services of the Senate and the House of Representatives, and the Committee on Foreign Affairs of the House of Representatives. I think we had better pass on this first part. Is there any objection to the first part that I read? That language is very, very broad. Senator SALTONSTALL. Mr. Chairman, if you will refer to the first part beginning with line 20 on page 8, I call your attention to what I said the other day. I t seems to me this is a case where you allow the President to sell arms anywhere in the world and we have mentioned Saudi Arabia, Liberia, and the Union of South Africa. It seems, when we go upstairs, in any event, in that case it seemed to me that is broadly the map in the case of the North European countries, in broad language, you accomplish military objectives, and I personally think we ought to discuss it. I don't object to the $100 million credit, which is section 2. I think that is probably a wise thing. But I think that language is very, very broad. We have broadened this Mat part and now we are going down to cover the Near East. We are getting into those countires which Senator Knowland was discussing recently. We are getting close into Communist China and other such places. The CHAIRMAN. There is some limitation on that. It is not widening it to take in the whole world because it says: Any other nation not eligible to join the collective defense and regional arrangement referred to in clause (B) above, but whose ability to defend itself or to participate in the defense of the area of which it is a part, is important to the security of the United States. Senator SALTONSTALL. That is correct. The CHAIRMAN. There is that limitation. Senator LODGE. Mr. Chairman, have we taken any testimony bearing on that language and showing the need for it? The CHAIRMAN. We had some general testimony on it. Senator LODGE. What was the nature of it? The CHAIRMAN. It provided for the transfer of money, material, equipment, or services to a nation under this clause. What about that, Mr. Ohly? Mr. OHLY. With regard to the points he made, as it applies to Saudi Arabia, Liberia, and South Africa, I would prefer to go off the record. IS THERE ANYTHING ON THE RECORD SUPPORTING THIS LANGUAGE? Senator LODGE. I would like to know if there is anything on the record supporting it which can be used in debate. The CHAIRMAN. Let me interrupt. Before: The transfer of any equipment, materials, or services to a nation under this clause (C), it shall provide the United States with assurances that such equipment, materials, or services are required for and will be used solely to maintain its internal security, its legitimate self defense, or to permit it to participate in the defense of the area of which it is a part, and that it will not undertake any active aggression against any other state. And then it goes on and says: Provided further, That, in the case of any such transfer, the President shall' forthwith notify the Committee on Foreign Relations of the Senate, the Committees on Armed Services of the Senate and of the House of Representatives, and the Committee on Foreign Affairs of the House of Representatives. Go ahead, Mr. Ohly. Senator LODGE. I haven't had an answer to my question. I would like to get it some time, because it will come up there on the floor, and I would like to know if there was any testimony substantiating the need for this language, of a public character, which could be used on the floor. If so, you give it, and what was the argument, so it can be used on the floor in the public argument. We had 3 weeks of public hearings on aid to Turkey and Greece. Now, here is aid to another part of the world, which I profess to think is necessary. However, there are a great many people upstairs who are not so predisposed. The CHAIRMAN. We did have some testimony by a Mr. McGhee, Assistant Secretary of State, who returned from the Near East. He supported this language on the theory that that would include Saudi Arabia, Liberia, and the Union of South Africa. Senator LODGE. Was it public testimony, on the record? Senator LODGE. Yes; if we had such testimony in for Greece, Turkey, and other places, why shouldn't we have such testimony in there for Saudia Arabia, Liberia and Union of South Africa and other places? The CHAIRMAN. It was on the record but it was not handed out. Senator PEPPER. This only provides to sell for fair value. This is not aid of any sort. I suppose with these safeguards it is for the purpose of strengthening those making up the anti-Soviet world. Senator LODGE. I am for it but I am talking for the people upstairs who are not in favor of it. MOTION LIMITING SECTION TO NEAR EAST AND AFRICA Senator SALTONSTALL. I would suggest this amendment: Line 21 on page 8 after the word "nation" add the words "in the Near East and Africa." The CHAIRMAN. Well, suppose South American countries came along. Senator LODGE. They are taken care of above and then to be perfectly frank we are not fooling anybody by this other language now. Senator KNOWLAND. Where would that go, Senator? Senator SALTONSTALL. It would go after "nation" in line 21. It is the first word. Senator SMITH of New Jersey. You would add "in the Near East and Africa"? Senator SALTONSTALL. Yes. Senator PEPPER. Mr. Chairman, since we are giving away billions of dollars to support these democratic countries against antidemocratic ones I don't see why we cannot trust our Government, especially in the face of this committee, to sell for value received equipment. If you gave away billions of dollars I don't see why you cannot sell some if it would be used to build up a country. Senator LODGE. Wouldn't you think it would be contributing considerable to public education? Senator PEPPER. I think we all know that many of these folks who are not lined up in the Soviet orbit are helpful to our side and I think public opinion would be with us in selling for cash inasmuch as we are giving it away. Senator CAIN. The question will be raised on the floor and we better have an answer. UNITED STATES MAY END UP SHORT ITSELF Senator SALTONSTALL. I suggest my amendment for discussion. I would answer the Senator from Florida that there are a great many of us back of the Armed Forces who are given to the fear that we need all equipment back here in the United States that we can use. This amendment would give the President power to sell, not to give, equipment to nations so we may be short ourselves. Senator PEPPER. He is Commander in Chief and I think he would have the Joint Chiefs of Staff recommendation. The CHAIRMAN. Wouldn't the President consult the Chiefs of Staff and the Secretary of National Defense? Senator PEPPER. I think he would. MOTION DEFEATED The CHAIRMAN. I don't think the amendment is necessary but still I want to satisfy Senator Saltonstall. I think it is a mistake to do that. We already covered it finally. This is a sale and it is not a gift. We will vote on it. All in favor of the amendment. Senator SMITH of New Jersey. May we have it again? Senator SALTONSTALL. On line 21 on page 8, after the word "nation" added "in the Near East," so it will read, "Any other nation in the Near East not eligible to join the collective defense and regional arrangement referred to in clause (B) above ***" The CHAIRMAN. All in favor hold up their hands. Those opposed. The motion is lost. All right, Senator. Is that about all? CEILING ON OUTSTANDING CONTRACTS Here is another clause that I think everybody is for. Whenever equipment or material is transferred from the stocks of, or serv ices are rendered by, any agency, to any nation as provided in paragraph (1) above, such nation shall first make available the fair value, as determined by the President, of such equipment, materials, or services. Before a contract is entered into, such nation shall (a) provide the United States with a dependable undertaking to pay the full amount of such contract which will assure the United States against any loss on the contract, and (b) shall make funds available in such amount and at such times as may be necessary to meet the payments required by the contract in advance of the time such payments are due, including the estimated amount of any damages and costs that may accrue from the cancellation of such contract: Provided, That the total amount of outstanding contracts under this subsection, less the amounts which have been paid the United States by such nations, shall at no time exceed $100,000,000. Senator SMITH of New Jersey. The word "included" is changed to "addition." The CHAIRMAN. What is that? Senator SMITH of New Jersey. On motion of Senator Green the word "included" was changed to "addition." The CHAIRMAN. The motion is changed to provide that the total amount of outstanding contracts under this subsection, less the amounts which have been paid the United States by such nations, shall at no time exceed $100 million. Is there any objection? MOTION TO REPORT APPROVED The question is on reporting the bill. The CHAIRMAN. We want to vote on the reporting of the bill. All in favor of reporting the bill with amendments will say aye, as their names are called. Will the clerk call the roll? [The clerk called the roll and the following Senators voted in the affirmative: Senators George, Thomas, Pepper, Green, Smith of New Jersey, Lodge, Connally, Chapman, Johnson, Gurney, Saltonstall, Knowland.] Senator CAIN [when his name was called]. Present. The CHAIRMAN. What is the matter, Senator Cain, haven't you made up your mind? Senator CAIN. No, sir. The CLERK. There are 12 yeas and 1 present, and no noes. Senator KNOWLAND. Mr. Chairman, I move that those not present be consulted if they want to be recorded so that they may do so. The CHAIRMAN. That will be done. Senator SALTONSTALL. Mr. Chairman, may I respect fully say I voted yes. I want to reserve the right as a member of the Committee on Appropriations to hear the discussions in relation to the actual appropriations that may be requested. The CHAIRMAN. The State Department insists that they are anxious that none of the names of the countries that are eligible under the different clauses be given publicity. Senator KNOWLAND. I think you are going to run into some difficulty in not being able to discuss them on the floor. The CHAIRMAN. We will not have that difficulty on the floor but here. We cannot hobble the Senate. Senator KNOWLAND. If the question is raised on the floor we could tell what countries are in agreement. The CHAIRMAN. I agree with you on that. We thank you, Mr. Perkins. I am going to report this bill as a committee bill, not my bill. We have authority to do it. We will report a new bill. [Thereupon, the committee adjourned to meet at the call of the chairman.] EUROPEAN INTEGRATION AND BRITISH POLICY FRIDAY, JUNE 23, 1950 UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, D.C. The Committee on Foreign Relations met in executive session, pursuant to notice, at 10 a.m., in room F-53, The Capitol, Senator Tom Connally (chairman of the committee) presiding. Present: Senators Connally (chairman of the committee), Tydings, Green, Fulbright, Wiley, Smith, and Lodge. Also present: Francis O. Wilcox, Chief of Staff; Thorsten V. Kalijarvi, staff associate; and C. C. O'Day, clerk. Also present: Honorable Paul G. Hoffman, Administrator, Economic Cooperation Administration, accompanied by Mark H. Connell, assistant, Economic Cooperation Administration. The CHAIRMAN. The committee will come to order. We have enough members to do a little business. This meeting was called a little earlier than usual on account of Senator Smith of New Jersey, who is voting in New Jersey, and he has an airplane waiting for him, and he wanted to hear from Mr. Hoffman, who is here, so we will hear from Mr. Hoffman. STATEMENT OF HON. PAUL G. HOFFMAN, ADMINISTRATOR, ECONOMIC COOPERATION ADMINISTRATION, ACCOMPANIED BY MARK H. CONNELL, ASSISTANT, ECONOMIC COOPERATION ADMINISTRATION Mr. HOFFMAN. Mr. Chairman, I do not know whether you want me to read these letters [indicating]. I would be glad to. Senator SMITH of New Jersey. I wish you would. There may be a few questions that I want to ask you. Mr. HOFFMAN, Well, sir, I perhaps better read my covering letter to the chairman of this committee [reading]: ECONOMIC COOPERATION ADMINISTRATION, Hon. Tом CONNALLY, |