Mr. SAMUELS. These are officers of the permanent service.
Senator INOUYE. How many temporary officers do you have?

Mr. DONELAN. Actually Mr. Chairman. I do not have the precise number, but in the total group that we have, of economic and commercial offices, there are some officers of the Foreign Service Reserve officer category, and they would be of a short-term nature.

I could find that out for you. Generally these are on a special type of mission, or a short-range, or else they have been seconded to the Department of State by the Department of Commerce. But I can get the number for you.

(The following information was subsequently received for the record :)

Twenty-nine Commercial Officers are presently serving on limited, Foreign Service Reserve Officer appointments. Of these, twenty are officers of the Department of Commerce with reemployment rights in that Department.

Senator INOUYE. I have noted in your statement that you have interchanged the words commercial and economic.

In your mind, do they mean the same thing?

Mr. SAMUELS. No. There is a difference.

Senator INOUYE. Can you explain to this committee the differences?

Mr. SAMUELS. Our economic officers are more concerned generally with policy programs affecting a wide range of our economic foreign policy interest.

Senator INOUYE. These are the economic political officers?

Mr. SAMUELS. Well, I am making a distinction between political and economic officers for the moment. But we have economic officers who are concerned with general economic reporting of policy matters, for example, who are in turn with their counterparts abroad. foreign offices, finance ministries, trade ministries, and so on.

Whereas, the commercial officers are more directly concerned with commercial matters as such, U.S. exports, investments, problem of the American companies doing business abroad, inquiries, helping them market research, all the varieties of things that go into the more specific commercial area, which is somewhat distinct from the more general and more policy oriented economic work.

Senator INOUYE. Are all of the 196 officers commercial officers? Mr. SAMUELS. Yes. Those are commercial. 196.

Mr. DONELAN. Mr. Chairman, we have 196 commercial officers and we have 252 economic officers.

If I might add one explanatory note: As you know, in some of our areas around the world, we have some very small embassies. Fo instance, some may have four or five Americans.

Now, it is possible there we would have one man who would be considered the economic-commercial officer.

In other words, he would do the broader economic reporting, bu he would be trained in commercial work also.

Also, in some of the small consulates where we do economic of commercial work, you might have one officer who would do the com bined economic-commercial reporting; usually he will have severa

local assistants who will handle the detailed commercial work, such as the world trade directories, and other reporting.

Senator INOUYE. How are these individuals categorized in your personnel system?

Mr. DONELAN. They are categorized as foreign service local employees, Mr. Chairman.

In other words, they are nationals of the country in which they

Serve.

They frequently have a commercial or economic background and we have 599 commercial and economic local national employees. Mr. Chairman, they would be employed in our larger posts where we maintain commercial libraries and would maintain the library, provide service to American and local businessmen. In many other places, they have contracts with the local chambers of commerce and local businessmen. They are a very valuable asset to the opera

tion.

Senator INOUYE. How many of your section heads have had practical business experience in gathering and analyzing commercial intelligence for transmittal to American businessmen ?

Mr. DONELAN. It is difficult for me to say, Mr. Chairman. I am sare that there are some that have. There has been sort of a cyclical business in the foreign service where after the war a lot of our people that came into the economic-commercial function came from the Department of Commerce.

From time to time, people have come in from outside businesses. In the last few years, great efforts have been made to train our people, our career officers, in commercial work and economic-commercial work.

Now, I can't respond precisely to your question. I will try to

ind that out.

(The following information was subsequently received for the record:)

Of the 154 Economic-Commercial Section Chiefs worldwide, 116 have had prior experience in gathering and analyzing commercial intelligence for Pansmittal to American businessmen.

Senator INOUYE. We have been advised that most of the comercial officers had very little, if any, real experience in the area of athering and analyzing commercial intelligence. If this is so, do ou have, or do you propose to have, and specialized training program for these people?

Mr. DONELAN. Well, Mr. Chairman, we have training, and I k it's pretty good training. If I might mention that a little bit: At the present time we are training about 120 officers every year, nd this training takes place on three levels. The first level is when have the younger officer coming into the service or the functional a. and we would call him a first tour officer. He is trained at the artments of State and Commerce. Then we also give a series short courses, which include work in trade, exports, banking and ser related subjects. Since 1970, our Foreign Service Institute has been conducting twice annually a very intensive university

level course designed to provide about 60 officers a year with a high degree of expertise in current economic analysis.

Now, this course, sir, has been designed with the Department of Commerce, which also provides lecturers. We have input from the public and private sectors, and the idea is to give these officers the equivalent of graduate level courses in corporate financing, international marketing, the multinational corporation, as well as participation in a series of seminars on the business environment and public policy.

We have a third level, Mr. Chairman, which is fairly modest. We send eight officers annually for a year's residence at leading universities for graduate studies in economics or business administration. We think we have a respectable level of effort.

Senator INOUYE. Are these officers provided the opportunity to have on-the-job-training?

Mr. DONELAN. Yes, sir. In effect the first series that I spoke about represents that. And if they are visiting the Department of Commerce when they are back here on consultation or home leave, Commerce arranges sessions for them to meet with American businessmen. to go out to new factories and see how things are being done, and we think it's very progressive and we think it makes a great deal of sense.

Senator INOUYE. You have indicated that we have 196 commer cial officers. How many military officers do we have?

Mr. DONELAN. I don't have that number, Mr. Chairman; I am sorry.

In effect, you are referring, undoubtedly, to the Defense attaché that are present at the various embassies?

I wouldn't want to guess, but in terms of a large embassy, ther can be five or six officers, so there are probably maybe 400 or 50 scattered around. The Defense attachés, of course, perform a tradi tional service, and in the postwar period, with a great deal o contact between the military groups and other countries of course we have a very much larger number than usual.

(The following information was subsequently received for th record:)

The Defense Intelligence Agency projects 229 U.S. Military Attachés world wide for Fiscal Year 1973.

Senator INOYE. How many agricultural attachés would yo have?

Mr. DONELAN. After hearing the question this morning, sir, should have that. I am sorry. I do not.

Senator INOUYE. Would you say they double the commerci

officers?

Mr. DONELAN. I wouldn't want to guess on that, sir. I wouldr think they would be double, but I am not sure.

(The following information was subsequently received for t record:)

There are presently 91 professional U.S. citizen employees of the Forei Agricultural Service at 62 Foreign Service posts. These employees carry i title of Agricultural Attaché, Assistant Agricultural Attaché or Agricultu Officer.

Senator INOYE. In the internal protocol of the service where does the commercial officer stand, in relationship to the military attaché, agricultural attaché, et cetera?

Mr. DONELAN. First of all sir, as attachés, which is a diplomatic title, certainly the commercial people would rank with the military people. In our larger embassies, of course, I think you probably know, Mr. Chairman, the hierarchy includes the ambassador, the deputy chief of mission and then counselors of embassies, who are the ranking senior advisors to the ambassador in their special fields. Now, most large embassies have a political counselor, an economic counselor and a consul general. When we have an economic counselor he is responsible for economic-commercial work in the country. The counselors rank above all other officers in the Embassy.

However, at some of our largest embassies (eleven in fact), in addition to having an economic counselor because of the importance of commercial work in those areas, we also have a counselor for commercial affairs.

This is the case in such embassies as Bonn, Brazil, Mexico, New Delhi, Ottawa, Paris, Rome, Seoul, Canberra, and Tokyo.

Senator INOUYE. Are these all specially trained men or women? Mr. DONELAN. Yes. The commercial counselors again, are people who have had commercial experience, in depth. It may be a comination, as many of our officers have in the Service, of economic and commercial work, over a long number of years.

I might mention, we have a Minister for Economic Affairs in Rome. The Minister for Economic Affairs, just to illustrate how it works, Mr. Chairman, is a lady who, for the most of her career, as been a commercial officer. In Rome we also have a commercial Counselor but in addition, this particular lady also has the rank of Minister for Economic Affairs, which means that she is responsible to the Ambassador for all of our economic and commercial work ne in Italy.

Senator INOUYE. Although there is consultation between State d Commerce, Commerce has no veto power, does it, over the tion or promotion of commercial officers?

Mr. DONELAN. No

Promotion is decided by Selection Boards, which were referred this morning. There is no veto power on the Selection Boards. Boards meet every year and they examine the files of all officers are being considered for promotion. They make their recomdations to the Secretary of State for promotion.

Senator INOUYE. This promotion panel operates under the guidof the Department of State, doesn't it?

Mr. DONELAN. Yes, sir, under the guidance of the Secretary, but Specifically there is a Board of the Foreign Service which is ribed in the act of 1946.

Now, that Board, sir, is charged with the determination and the lopment of personnel policies, promotion policies, selection vies for the Foreign Service. The Board consists of representaof six agencies: State, Labor, AID, USIS, Commerce, and the Service Commission. Commerce has a permanent member on

the Board of Foreign Service. And this is the Board which in effect, sir, promulgates the precepts for promotion, the consideration that will be given. That is the overall Board.

Then during the promotion process, there are the Selection panel which formed for a temporary period of time actually to conside and review the files and make recommendations on promotion.

Senator INOUYE. Is there any established line of direct communi cation between a commercial officer and the Department of Com merce?

Mr. DONELAN. I believe that they do have a certain reportin facility, but I am not sure, Senator. I believe that the commercia officer can send certain things directly to the Department of Com merce. Most of the time, in most of the agencies serving abroad they come through the Department of State channels, with distr bution to all agencies.

I might add that, as you probably know, in the field, the Ambassa dor, of course, is responsible as the head of the country team as is called, and oversees for the President all of the functions of t mission abroad.

Senator INOUYE. This committee has received a few letters r lating to the so-called John Shaw case in Tokyo. I am certain yo are aware of this. According to the information we have receive Mr. Shaw was a highly respected commercial officer. He was r spected by businessmen in the United States and Japan, but he w not promoted, and thus was forced to retire.

I gather that there have been protests from companies such Ford, and that the Commerce Department also expressed concern.

What is the current status of the Shaw case?

Mr. DONELAN. I do not know that case, Mr. Chairman. I probab should explain that under our system, while I am Assistant Secr tary for Administration, I do not direct personnel operations.

Now, I can speak generally but in terms of Mr. Shaw if he were effect selected out-the system under which we work in the Forei Service, Mr. Chairman, is called the promotion up or the selecti out system and it is a competitive system-I would say the analo might be with the military where, if an officer is not promoted with a certain number of years or if in terms of his work based upon annual evaluation, he falls into the low percentage of his class 1 2 successive years, he can be selected out. So, Mr. Chairman, we have a promotion up or selection out system in the Foreign Servi and when an officer comes into it, he knows that as part of his c dition of employment he becomes a part of this system.

It is in the law. It is in the act of 1946. The idea or princi was to make it a very competitive service, and hopefully to make a very first class service.

Senator INOUYE. How large are the professional staffs in commercial economic section of embassies in important market are such as Germany, France. Britain, Japan?