C. Executive agreements of limited subject matter on subjects often or sometimes included in general commercial treaties, exclusive of reciprocal trade agreements under act of 1934.

B. Projects on which considerable preparation work has been done, but without approach to foreign government:

DIVISION OF INTERNATIONAL LABOR, SOCIAL, AND HEALTH AFFAIRS

Mr. RABAUT. Will you tell us something about the work of the Division of International Labor, Social, and Health Affairs, where you are requesting an increase of 6 or a total of 45?

Mr. WILCOX. That Division has to do with the relationship of the Department to the International Labor Organization. It supervises the work of the labor attachés at our missions abroad, and prepares reports on labor conditions in foreign countries.

Mr. RABAUT. Is there not duplication here of work done by the unit on cultural cooperative programs?

Mr. WILCOX. There is no duplication there so far as I know. This is purely a specialized international intelligence activity, relating to labor.

Mr. HARE. Does not the Department of Labor have an international set-up for this purpose?

Mr. WILCOX. No. The labor attachés service both the Department of Labor and the State Department; there is only one such service. Mr. RABAUT. Tell us something about the health program.

Mr. WILCOX. This Division works very closely with the United States Public Health Service; they are concerned specifically with conventions involving the control of narcotics, and they also are planning the development of an international health organization. The Economic and Social Council of the UNO voted to call an international conference to set up such a program.

There is also a very small section that is concerned with social welfare work, among women and children, which maintains contact with

83949-46- -4

the social-work groups and with the groups abroad who are interested in developing an international program.

Mr. RABAUT. That is not a health program?

Mr. WILCOX. No; these are separate sections of the same Division. Mr. RABAUT. Is that in addition to the six that you are talking about?

Mr. WILCOX. No; that is all included. In addition, they deal with migration problems, such as Mexican labor in the United States, and Jamaican labor in the United States.

Mr. HARE. Is there any special reason why this should be set up in the State Department rather than the Department of Labor?

Mr. WILCOX. This division is concerned only with the international aspects of labor affairs, in which negotiations between this Government and other governments are involved. It is not concerned with domestic labor programs at all. It is in close contact, of course, with the Department of Labor, to which it furnishes reports of various sorts.

OFFICE OF FINANCIAL AND DEVELOPMENT POLICY

Mr. RABAUT. Tell us about the next item.

Mr. THORP. The next item is that for the Office of Financial and Development Policy. There is a recommended increase of 26 positions in this office. This increase arises because of the problems connected with exchange rates and related matters, which are handled in the Division of Financial Affairs; and those problems which involve international credit, which are handled in the Division of Investment and Economic Development.

Mr. Collado is here and can give you the details with respect to each division in the Office of Financial and Development Policy.

Mr. COLLADO. There is a very small increase, one person, in the office proper. That is a secretary-assistant to the Deputy Director. The position of Deputy Director has just been filled. One of our employees returned from the Army is now in the position and he has no secretary. We want to give him one.

Mr. RABAUT. What grade?

Mr. COLLADO. CAF-6. The Division of Financial Affairs, as Mr. Thorp has said, is concerned with monetary and exchange problems. Following VJ-day, with the imminent establishment of the International Monetary Fund, the whole process of reconstruction of financial and monetary systems throughout the world, especially in the devastated countries, is progressing-with a great deal of work needed to be done. It is necessary to give thought to financial arrangements, the setting of parities of exchange in connection with the Monetary Fund and a whole host of other problems incident to opening up financial and exchange relationships between the

countries.

This Division also concerns itself with the financial side, in fact it centralizes the economic work generally, of the peace treaties with the satellite nations, Italy, Hungary, Bulgaria, Rumania, and so forth.

DIVISION OF INVESTMENT AND ECONOMIC DEVELOPMENT

Mr. RABAUT. The next item is Division of Investment and Economic Development; 12 new jobs, a total of 38.

Mr. COLLADO. That division is concerned with working on questions of United States Government credits for reconstruction and development, as well as the encouragement of private lending by banks and other investors and in all questions of the encouragement of private investment in the form of branch plants.

Mr. RABAUT. Why do you need extra help?

Mr. COLLADO. That division has become very active, because the Government of the United States, through the expansion of the Export-Import Bank last summer, and under the International Bank, which is meeting for the first time next month, is engaging in a rather important program of foreign lending. This is the division that advises the Secretary in his capacity as a member of the board of Directors of the Export-Import Bank, and that works on the directives to be given to the United States representatives on the International Bank. The division has more business; we are making a lot of loans today.

OFFICE OF ECONOMIC SECURITY POLICY

Mr. RABAUT. What is the next item?

Mr. THORP. The Office of Economic Security Policy. That is the office which concerns itself primarily with German, Austrian, Japanese, and Korean economic affairs.

Economic security controls are really the methods that have been developed for dealing with German external assets, such as the Proclaimed List and the efforts to persuade other countries to take various steps in connection with the Nazis in those countries. That program

is coming to a head. We are going to have, within the next month or two, conferences with the neutrals in an effort to come to grips with the problem of assets in such countries as Switzerland and Sweden. If those conferences are successful, we will have quite a problem of working out with them a way of disposing of those assets.

Mr. RABAUT. And that is the reason for the new personnel?

Mr. THORP. That is right; although, I think I should point out this. You will notice there were 105 people transferred from FEA. These were people in the Enemy Branch in FEA who had been working on these same problems.

It might be well to explain here that out of the 105 positions transferred from FEA, 15 positions-including personnel were allotted directly to 2 of the newly established divisions in the Office of Economic Security Policy. The remaining 90 people continue to perform the research and planning function for which no funds are requested for the fiscal year 1947.

Six of the 15 positions have been allotted to the Division of German and Austrian Economic Affairs and 9 positions to the Division of Japanese and Korean Economic Affairs. The former FEA personnel involved had been performing work similar to that being done in the two divisions. The logical thing to do was to consolidate such activities and personnel-and that was done.

If you take the "regular" positions and those financed from transferred funds together, there is actually a reduction of personnel as between those in the State Department and who have been working on these matters and those in the FEA. There ought to be and there is a reduction.

Mr. KURTH. The difference between 90, that will be eliminated by reason of the transfer of FEA employees and 49 that we are adding, makes a net decrease in all of 41.

Mr. THORP. These were people working on these problems in the FEA, subsequently transferred to the State Department.

Mr. HARE. You referred to assets.

Mr. THORP. Yes.

Mr. HARE. What do you mean by that? Do you have charge of any of the assets of any kind in Switzerland?

Mr. THORP. Only in a rather interesting and indirect way. What has happened is that the Control Council in Germany, of which the United States is one of four members, has vested in itself the German properties in Switzerland. What we are trying to do is to work out a process of taking those German properties in Switzerland, and bringing them into the reparations pool so that they will be a part of the total reparations.

Mr. STEFAN. Mr. Thorp, that Proclaimed List is about liquidated, is it not?

Mr. THORP. It is down to a hard core at the present time.

Mr. STEFAN. How many people have you working on the black list now?

Mr. THORP. Mr. Rubin, the Deputy Director, can tell you about that. Mr. RUBIN. There are about 25 people in the division who are working directly on problems relating to the Proclaimed List. However, the Proclaimed List problems in the division are very closely tied in with the problem of German external assets and the liquidation of German influence in neutral countries, the use of assets in the neutral countries for reparations purposes. In other words, particular firms in Switzerland may be on the Proclaimed List and therefore may figure in the Proclaimed List work of the division. At the same time, they are companies which are owned from Germany and therefore figure in this program of getting hold of these assets for reparation purposes.

Mr. STEFAN. The South American list is practically liquidated now, is it not?

Mr. RUBIN. No, but the South American list and the list in the European countries have both been reduced substantially. Of course, that is a continuous process, taking people off the list.

Mr. STEFAN. That list ought to be down to skeleton proportions now. How many people or how many firms have you on that list now; I am referring to the South American list?

Mr. RUBIN. The South American list adds up to a total of 3,878 names still.

Mr. STEFAN. And you have been taking them off almost every day; have you not?

Mr. RUBIN. We have taken off a very substantial number of names. Mr. STEFAN. What about the list that Great Britain has?

Mr. RUBIN. The Statutory List of Great Britain and our Proclaimed List are identical except for perhaps one or two very minor cases.

STATUES OF AMERICAN HEIRS TO PROPERTY IN GERMANY

Mr. GILLESPIE. What is the status of American heirs to property in Germany? Let us say that a German has died during the war periodhe has probably been murdered-but he has heirs in America. What is their status as to getting that property? How can they get to it? Mr. RUSSELL. You mean American citizens who are heirs?

Mr. GILLESPIE. Yes.

Mr. RUSSELL. Nothing has happened, assuming the property has been destroyed.

Mr. GILLESPIE. The property might be destroyed or damaged to some extent, but the property is still there.

Mr. THORP. That is right.

Mr. GILLESPIE. What would be the status of an American heir? He cannot correspond by mail with Germany.

Mr. RUBIN. That is one of the problems which will have to be handled by the Division of German and Austrian Economic Affairs in collaboration with the office of the legal adviser. That type of problem is one of the reasons for the requested increase in this division which handles Germany and Austria on the economic side and also one of the reasons for the increase in the office of the legal adviser, which was discussed here a while ago. In other words, we are trying to work out ways for reestablishing some sort of relations, of a normal sort, with Germany and Austria, and with the occupied areas.

Mr. RUSSELL. It is also reflected in an increase in the foreign service. We have reopened six, and expect to add two more, consular offices in Germany. So we are rebuilding the foreign service there and will attempt to go further.

Mr. GILLESPIE. With whom could these people get in touch?

Mr. RUSSELL. At the present time it would have to be with the Army, but we are attempting to arrange to take over those functions as soon as we get those consulates operating.

Mr. GILLESPIE. Will you tell me with whom they can get in touch specifically?

Mr. RUSSELL. General Hilldring, of the Civil Affairs Division of the War Department.

WEDNESDAY, FEBRUARY 20, 1946.

OFFICE OF NEAR EASTERN AND AFRICAN AFFAIRS

Mr. RABAUT. This morning we take up the Office of Near Eastern and African Affairs. I notice an increase in personnel of 9 is requested, making a total of 67, with a total estimated cost of $267,334. Mr. KURTH. Mr. Chairman, Mr. Allen, Deputy Director of this Office, will tell you about the work of the Office and why the additional personnel is needed.

Mr. RABAUT. We will be pleased to hear you, Mr. Allen.

Mr. ALLEN. The Office of Near Eastern and African Affairs has charge of the general relations of the United States with the countries