and the administrative staff servicing the information offices located in New York and San Francisco. You have been furnished with copies of the organization chart of the Department in Washington. A study of this chart will show that there have been some changes made during the year, but that the basic organization pattern has been retained. The principal changes are the following:

(1) The position of counselor was reestablished after being vacant for a number of years.

(2) The Office of Wartime Economic Affairs has been abolished and its residual functions transferred to the Office of International Trade Policy and to the Office of Economic Security Policy.

(3) The former Office of Economic Affairs has been redesignated as the Office of International Trade Policy.

(4) An Office of Financial and Development Policy has been created to handle international financial problems. These functions were transferred from the former Office of Economic Affairs.

(5) An Office of Economic Security Policy has been created to handle the economic problems arising out of the occupation of Axis coun

tries.

(6) The international information and cultural functions of the Office of Public Affairs have been merged with the international information and cultural functions transferred from the Office of War Information and from the Office of Inter-American Affairs.

(7) An Office of Budget and Finance has been created replacing the former Division of Budget and Finance to give recognition to the importance of budgetary and fiscal functions in relation to the other activities of the Department.

For the fiscal year 1946 the Congress authorized 4,241 positions, 308 of which have been merged with the information and intelligence programs. An additional 1,372 administrative serving positions were acquired by transfer from the war agencies. For the fiscal year 1947, 755 of the transferred positions will be canceled and 732 new positions are requested. Thus the total number of positions requested for 1947 is 5,282. The additional positions requested are required for a general strengthening of all phases of the Department's activities. Over 500 of these positions are needed urgently and are being requested in the next deficiency bill for 1946.

FOREIGN SERVICE

During the war, the United States sent into combat its best trained men and its most powerful weapons. To achieve a lasting peace our foreign service must be maintained in accordance with the same high standards. We must have a foreign service second to none.

The foreign service of the United States has representatives on duty at approximately 275 posts throughout the world. These representatives protect our interests and at the same time promote international cooperation. Their work is vital, whether it consists of the duties of a consul at a one-man post or a highly specialized economic function at a large post.

With the close of the war the foreign service has been deluged with problems which are taxing to the limit its resources of men and facilities. The duties of the foreign service are far more complex than

before the war and far more vital to the well-being of the United States and the world.

Political reporting and negotiation is an important part of the conduct of our foreign affairs. The foreign service will be called upon, increasingly, to carry out decisions of high policy which will be new in type and complex in character. The position of the United States in international economic affairs makes it necessary to maintain staff's abroad to report on such economic matters as agriculture, mining, aviation, petroleum labor, finance, transport, and communications. The international aspects of these economic problems affect our own national economy. Economic reporting provides interested governmental agencies and private business interests with information on which to base decisions. The liquidation of lend-lease affairs, the stabilization of currencies, the disposition of Axis resources through reparations, the control of occupied territories, are examples of postwar problems with which the foreign service is concerned. The foreign service must resume again its responsibility for the promotion and protection of American trade. If our objective of lowering world trade barriers is achieved this function will gain in importance and expand.

The cessation of hostilities has resulted in a tremendous increase in the volume of consular functions, such as the handling of visa applications, immigration, and citizenship problems, the relief and repatriation of American nationals, and protection of and reporting on the condition of American-owned property.

The destruction of transportation and communication facilities in many areas, the shortage of supplies, the rise of inflation throughout many areas of the world have complicated administration at many ports, old and new.

The foreign service structure is, I believe, sound, but steps are being taken to strengthen it through revised legislation. A bill has just been introduced into the Congress which will provide for the admission of 250 new officers in the middle and upper ranks of the service. In addition, a study is now being made which will result in the introduction of new legislation in the spring which will be designed to improve the over-all efficiency of the service.

The estimates for the fiscal year 1947 provide for the continuation of the auxiliary service on a greatly reduced scale. This temporary wartime service will be discontinued just as soon as conditions permit.

EMERGENCY FUND

The estimate for this purpose is necessary to meet emergency requirements for which the granting of specific appropriations is not feasible. It is essential to the conduct of foreign affairs that a fund be provided from which extraordinary expenditures can be made without regard to the limitations normally placed upon the disbursements of Government funds and without the necessity of publicly reporting the nature of the expenditures. This appropriation has been granted by the Congress for many years. The expenditures are made with due care and are vouchered and recorded in the same manner as expenditures from other governmental appropriations.

The estimate of $9,500,000 is a reduction of $8,000,000 from the previous year's appropriation and is to provide for two general purposes: (1) Regular annual requirements, $1,000,000.

(2) Relief and repatriation of American nationals, $8,500,000.

During the period of hostilities the Congress has provided funds for the relief and repatriation of American nationals and their dependents. Requirements for this purpose will continue for some time in spite of the end of actual combat.

INTERNATIONAL OBLIGATIONS

The estimates provide for continuing, as in past years, the United States quota contributions to international commissions, congresses, and bureaus and for the expenses of United States representation on various special commissions, such as the International Boundary and Water Commission, United States and Mexico, the International Pacific Salmon Fisheries Commission, the American-Mexican Claims Commission, and so forth.

The larger portion of the estimate is required for the operations of the International Boundary and Water Commission, United States and Mexico. I would like to take this opportunity to express to the committee the importance which the Department of State attaches to the work of this Commission. Over a period of approximately 55 years the Commission has had an enviable record in the prevention and settlement of difficulties along the boundary and in the development of cooperative projects which have proven beneficial to both countries. The Department of State and the Mexican Foreign Office exercise a policy supervision over the respective sections of the Commission.

Included in the estimates for the Commission is an item of $8,000,000 for the initiation of construction of the lowermost international dam on the Rio Grande River authorized by the United States-Mexico Wtaer Treaty which has been ratified by both governments. In accordance with the provisions of the treaty this construction must be initiated within 2 years after ratification. It is necessary, therefore, that construction be initiated just as soon as possible. Moreover, because of the international character of this and other projects along the boundary it is essential that jurisdiction and control be retained in the Department of State and the United States section. The treaty and protocol require this. The Department does intend, however, to utilize the services of other agencies such as the Bureau of Reclamation, and has no intention of creating another large construction agency. Freedom of action is necessary if the treaty objectives are to be attained.

Because they are new I want to lay particular stress on two operations covered in this budget-the international-information program and the intelligence program. Of these the information program involves the larger sum. The Department's basic policies in the field of international information are as follows:

It is accepted that a properly conceived and executed publicinformation program is an integral and essential part of the conduct of our foreign relations.

It is the policy of the Department

(a) To assist in making clear to foreign peoples the nature and objectives of American foreign policy, in order to prevent misunderstanding of American aims and policies, and to aid foreign peoples to arrive at a true understanding of American life; and to present a representative picture abroad of American opinion. These activities will promote the interests of the United States in general, and facilitate the successful carrying out of the foreign policies of the United States in particular;

(b) To cooperate fully with the United Nations Organization and other appropriate international organizations in the development and operation of a combined-information program which should effectively present the common needs, aims, and hopes of the participating countries, and the work of such international organizations;

(c) To assist and support private channels of communication in giving the world a correct understanding of America;

(d) To work for the abolition of all barriers standing in the way of international freedom of the press and of communications.

In some parts of the globe and in some media, it is not practicable for private media of communication to supply a fair and full picture of this country. When these circumstances exist, it should be the aim of the Department to supplement and facilitate private media so as to give a balanced picture of American objectives and policies.

(e) Other governments, like ours will continue to engage in public information activities. Our policy, therefore, should be to prevent destructive rivalry and to provide for the harmonious and efficient adjustment of these activities. As a general policy, the Department should take open responsibility for the official information that it communication. Further, its aim should be to identify the sources of private information that it disseminates.

There is nothing new or revolutionary in these principles. The very first sentence of the Declaration of Independence has for its subject "a decent respect to the opinion of mankind." And, although the principal function of our foreign service is to give us expert reports on other countries, a major task of our missions abroad has always been to transmit accurate information about American policy to foreign governments.

What is new is that we now propose to answer the questions the people of other lands raise about America and American policy, and to do it systematically. For it is the people, even in countries less democratic than our country, who ultimately determine foreign policy.

We are committed as a nation to a policy of collaboration with the other peaceful nations of the world, and with the peaceful peoples of the world. We cannot withdraw from them, as the experience of two world wars has shown. For better or worse we are involved in all the major international problems of the earth-through our participation in the United Nations and other international organizations, and through our bilateral and multilateral commitments.

There was a time when we could afford-or thought we could afford-to be unconcerned about what other people thought of us. If the people of other nations misunderstood us it was regrettable. The passage of time would probably correct the error. It wasn't fatal. That time is past. We shall be making decisions, within the United

Nations Organization, and independently, that will have repercussions affecting the lives of ordinary people all over the globe. Our attitude and our actions-and rumors thereof-will be matters of concern everywhere. As never before we shall have to explain ourselves and explain ourselves thoroughly and promptly.

The miracle of technology has made communications almost instantaneous. But rumors and misinformation can fly just as fast as the truth. We cannot allow false impressions or suspicions to accumulate, like a charge on an electrical plate, to the point where they are discharged in the form of serious conflict.

The war brought home to us how little we are understood, even among our friends. Often they do not understand our political system, our economic system, or our social system. Current developments are then misinterpreted for lack of the background. That is why the President has stressed the importance of presenting "a full and fair picture of American life, and of the aims and policies of the United States Government."

We propose to carry out the President's directive through the newly created Office of International Information and Cultural Affairs. This Office represents a merger of the overseas information work of the Office of War Information and the Office of Inter-American Affairs, both greatly reduced in size and adapted to peacetime rather than wartime problems, and of the Department's existing Divisions of Cultural Relations and International Information. This merger was accomplished in 4 months and without interruption in the continuity of our efforts.

From these agencies we acquired some experienced personnel, going establishments, both at home and abroad, and a tested system of communications.

I have indicated that there are two kinds of potential misunderstanding and misinformation with which we must cope. They are closely related. One kind concerns the background on America. The other concerns current developments, which frequently require background for their full interpretation. The exchange of students, scholars, and technical experts with other countries, on a two-way basis; the maintenance of United States information libraries abroad; the distribution of inexpensive documentary motion pictures, film strips,. and exhibits of still pictures, all help to fill in the background. So also does our program for providing documentary material, such as biographical data, to foreign editors; and our Russian magazine America, printed in the Russian language for Russians.

Current developments are reflected in a daily radio bulletin to our missions abroad, containing full texts of important official statements; and through our international broadcasting, particularly to areas which cannot be reached by any other medium.

The program calls for a staff of American public-affairs officers attached to our diplomatic and consular missions abroad, in addition to the home staff for radio and for servicing our officers in the field.

The Department is now responsible for this broadcasting, on an interim basis. Within the next several months proposals will be made to Congress for a more permanent disposition of short-wave broadcasting, including the disposition of the extensive installations built by the Government during the war. Regardless of how it is set up, short