MUTUAL SECURITY ACT OF 1956 THURSDAY, MAY 10, 1956 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met, pursuant to call, in room G-3, United States Capitol, at 10:45 a. m., the Honorable James P. Richards (chairman) presiding. Chairman RICHARDS. The committee will come to order, please. Ladies and gentlemen, as you know, it was impossible for the distinguished Secretary of State to be with us as the opening witness in the consideration of this bill. He has, therefore, consented to come before us, at our request, as the closing witness. The Secretary will be the last witness to be heard on H. R. 10082. We are glad to have the distinguished Secretary with us. Will you proceed. STATEMENT OF HON. JOHN FOSTER DULLES, SECRETARY OF STATE Secretary DULLES. I know that this committee has held extensive hearings on the mutual security program for next year, as proposed in the President's message of March 19, 1956. I am glad to try now to sum up the administration's position. I shall confine myself to the broad philosophy of the measure, knowing that others have dealt with details. The President has requested the Congress to authorize appropriations of $4,672,475,000 for fiscal year 1957 and to appropriate $4,859,975,000. As you know, these figures are larger than our estimated expenditures for next year, which will probably be in the neighborhood of $4.2 billion. This is approximately the same rate of expenditure as we had last year and will have this year. I wish that I could recommend a lesser amount. I cannot do so, consistently with my view of the essential needs of the United States for security. Some slight adjustments may be appropriate in view of new information which has developed since the program was submitted. But I cannot see how we can safely change the order of magnitude now proposed. It is, I think, important to see this mutual security program in proper perspective. It is an essential part of our overall security program, a program which includes the Military Establishment of the United States itself. The total figure for all forms of national security, domestic and foreign, is about $40 billion. Of this, about 90 percent is spent on our own United States Military Establishment. Approximately 10 percent is spent through foreign governments, for the most part to help our allies hold positions which are vital both to us and to them. This 10 percent makes up what we call a mutual security program. This entire program has been carefully considered by the administration. The President, the Secretary of Defense, the Joint Chiefs of Staff, and I myself, the Secretary of State, are all convinced that this expenditure is necessary for the security of the United States. This mutual security part of this program is a contribution to our security just as is our own Defense Establishment. Congress has in past years shared that view. Each year, after the most careful scrutiny, it has appropriated the funds to sustain this program at approximately the present rate of expenditure, and indeed for several years the rate of expenditure was much higher. Nothing has yet happened which in my opinion would make it prudent to terminate or curtail the present program. Last week I was in Paris attending one of the NATO ministerial meetings. There were present the 15 Foreign Ministers of the member countries. We considered at length the Soviet change of tactics and the recent developments within the Soviet Union. We agreed that these changes were on the whole encouraging. They seemed to increase the chance of peace and to suggest the possibility that Soviet Russia might ultimately have a government responsive to an educated public opinion and reflecting a code of conduct such as is accepted by other civilized nations and as is embodied in the principles of the United Nations Charter. However, we unanimously agreed that, and I now quote from the final communique, "the Western powers cannot relax their vigilance" and that "security remains a basic problem, and the Atlantic powers must continue to give priority to the maintenance of their unity and strength." This, I remind you, was the view shared by the North Atlantic Community, particularly in relation to Europe, where the Soviet Union seems to be on its best behavior. But their behavior is not so good in the Middle East, where they have played fast and loose with peace in the area by a reckless policy of dispensing arms. This is an area which is of great importance to the United States, both because it includes the State of Israel, with which the United States has close ties, and also because the area produces the ol required for industry and the military establishment of Western Europe. The situation is even less stable when we look to the Far East where the Chinese Communists maintain a threatening posture and refuse to agree to any meaningful renunciation of the use of force. As General Lemnitzer has already told you, we have an armistice in Korea, but no formal peace. In Taiwan (Formosa) there are almost daily military engagements between the forces of the Republic of China and the Chinese Communists. In Vietnam, there is an armistice, but no formal peace. In these three world positions, a total of approximately 50 million free people are confronted by Com munists who are using the 600 million people they rule to build a vast military establishment. The importance of these areas to the United States is already demonstrated by the fact that the United States has concluded treaties covering them which provide that an armed attack by the Communists upon them would be dangerous for the peace and safety of the United States. That is the language of our treaties covering these three areas. You will also recall the congressional action, led by this committee, which authorized the President to use the Armed Forces of the United States, if need be, to resist attacks which might be directed against Taiwan. We do not, of course, want to have to use United States troops to hold these areas, although we do maintain some forces in Korea. In the main, these areas are protected primarily by local forces, largely trained and equipped by the United States. But the governments of these impoverished countries cannot maintain their present forces without some economic help also. Therefore, we give not only direct military aid but also budgetary and economic aid necessary to enable these countries to have the armed forces which we judge reasonably related to the threat of aggression and our continued plans to prevent it. The estimate of military aid and defense support assistance next year for Korea, China, Indochina, and other area allies-the Philippines, Thailand, and Japan-is in the neighborhood of $1.5 billion. Of course, we recognize the armed forces of these allies are not alone sufficient to withstand the full might of Chinese Communist military power backed by the Soviet Union. But we also maintain in the general area of the Western Pacific United States mobile striking power to back up the local ground forces. The cost of this force is in our defense budget. As Admiral Radford has already testified to this committee, the two costs essentially complement each other. Neither would be sufficient without the other. I have already referred to our security interests along the Soviet perimeter in the Middle East. Pakistan, Iran, and Turkey all have common borders with the Soviet Union, and Iraq is close to it. All four are subject to Soviet threats and the proximity of Soviet power. Pakistan is an ally of ours under the Southeast Asia Treaty. Turkey is an ally of ours under the North Atlantic Treaty, and all four of these countries have united for collective security under the Baghdad Pact. These countries hold the gateway to the South, where the oil reserves so vital to the military power and industrial strength of Western Europe are located. Just beyond is the gateway to Africa. It would be reckless not to help these countries to help themselves and at the same time to help us. The estimate of expenditures for military and defense support assistance next year for these countries is in the neighborhood of $800 million. In Western Europe the military forces of NATO stand guard over the greatest industrial and military treasure that there is within the free world, except for the United States itself. So important do we consider this area that substantial United States Armed Forces are stationed in Western Europe for its defense. We help maintain the military strength of our European allies by supplying them with certain types of weapons. We also have a base agreement with Spain, and this involves substantial costs. We also think it prudent to help Yugoslavia to maintain its national independence. The expenditure for military aid to NATO-excluding Tur key of which we have already spoken and military aid and defense support for Spain and Yugoslavia is estimated for next year at roughly $1 billion. Our military assistance and supporting economic aid to the countries in these three critical areas, the Far East, the Middle East, and Europe, plus some military help to Latin America, account for roughly 83 percent of the estimated expenditures under the mutual security program for next year. These expenditures make it possible to hold vital positions at less cost than in any other way which can be contrived. These expenditures provide diversified locations around the globe from which Russia could be struck, with devastating effect, should its rulers launch a war of aggression. These expenditures are fundamental to our own peace and security. The balance of the mutual security program-the other 17 percentwill involve spending next year, as this year, a little over $700 million. While that $700 million is 17 percent of the mutual security program, it is less than 2 percent of our total program of $40 billion. This money is not directly related to military considerations, although much of the money goes to allies. Wherever they go, these expenditures are directly related to our security. They help areas in the world which are threatened by Communist subversion and which contain people, resources, and strategic locations which, in our own interests as well as theirs, should be secure from hostile domination. In these countries the political leaders and the people as a whole want to maintain their independence. They do not want to be subjected to the new Soviet colonialism that grips Eastern Europe. They are themselves carrying the main burden of seeking to preserve their liberty, but this is a hard task and they need and deserve some outside help. Our help supports their economic development and, through both our programs and those of the United Nations, such activities as public health, education, and technical assistance. Such help is essential to supplement their efforts to develop freely and independently in the world today. The importance of this aspect of the matter is emphasized by the fact that the Soviet Union, having transformed itself into an industrial state, now sees the advantage of having "a mutual security program" of its own with its allies and with other countries. It is said that imitation is the sincerest flattery. We would indeed be flattered if we could feel that the Soviet Union was sincerely seeking to strengthen the political and economic independence of other nations. Unhappily, it is demonstrable that the Soviet bloc, already impoverished in terms of consumer's goods, diverts economic strength to other peoples only for the purpose of bringing about what Lenin called the "amalgamation" of these peoples into the Soviet Communist bloc. Nevertheless, we cannot ignore the fact that the Soviet Union today measures its assistance to its satellite allies, largely Communist China, in terms of billions of dollars and its assistance to other countries in terms of hundreds of millions of dollars. It would indeed be ironical if the United States should sharply cur tail its mutual security program just at the time when the Soviet Union is moving with predatory intent into the field which we would thus vacate. The new Communist tactics make it more than ever imperative that the United States should continue the economic phase of our mutual security program. It is also important that it should be continued with assurance of continuity. Of course, I realize that one Congress cannot bind a future Congress to appropriate money. We can, however, and do have, continuing policies. It is the continuing policy of the United States to maintain its own Military Establishment. The funds for that are appropriated annually. But no one doubts that this program is a continuing one and so it needs to be, at least for the foreseeable future, as regards our mutual security program. It is, as I said, a vital component in our total program for national security. The world needs to know that this program will continue so long as there is a threat to our security. Other countries with whom we share our security effort cannot do their own planning intelligently, or appropriate their own funds dependably, or obtain supplementary funds from other quarters, unless they believe that there will be a reasonable measure of continuity in our program. Also to a limited extent, we need a measure of project continuity. That is why, Mr. Chairman, we have contemplated the committal of a modest amount of funds on a long-term basis subject, of course, to congressional appropriations on a yearly basis. We also believe that there is need for greater flexibility in the Executive. This committee has had many explanations of the long-time cycle involved in the planning and executing of this program. We are already engaged, in May of 1956, in preparing, at the request of the Bureau of the Budget, programs to be submitted for fiscal year 1958. After those programs have been reviewed by the executive branch and are finally submitted to the Congress, and after the next Congress has authorized and appropriated the funds, then the plans must be adjusted to meet that congressional action and the changing world scene. Only then can the task of implementing the plans be commenced, and there is usually a lag of a year or two between obligating the funds. and actually getting the funds into equipment, supplies and services at the foreign destination. In the case of some of the military equipment, the delay is greater. All of this points up to the importance of giving the President greater discretion, particularly with respect to the use of the distinctively economic portion of the fund. Before concluding, Mr. Chairman, I would like to say that consideration is being given to an independent study of some of the aspects of our mutual security program. There are a number of matters relating to the administration of this program which the President feels, and which perhaps members of this committee feel, could usefully be studied by men who are highly qualified but who are not available to serve the Government on a long-term basis. I have in mind certain questions which have arisen in the course of these hearings, such as the relative role of the State and Defense Departments in administering the program; whether we should seek to put more of our program on a loan rather than a grant basis; whether the program needs to be enlarged and given greater continuity to meet the new Soviet tactics; whether, and if so, how, we can speed up our program so that there is not long delay between the |