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information activites themselves which, for budgetary reasons, are requested by the Radio, Press, and Motion Picture Divisions.

Mr. WIGGLESWORTH. That $700,000 is all for the housekeeping expenses of the committees?

Mr. Hisle. Included in the $700,000 is $62,169 for local small projects of the committees covering activities in the general interAmerican field.

Mr. HARRISON. That figure of $700,000 does not reflect the total cost of committee activities.

In that connection, we will furnish you a statement which will cover that completely.

(The statement referred to is as follows:)

Statement of over-all cost in 1946 of Coordination Committee activities

Amount Press

$424, 680 Motion picture..

440, 650 Radio...

976, 400 Small projects.

62, 000 Administration...

637, 831 Total..--

2, 541, 561 The activities covered by these funds are described under the Press and Publications Department, the Motion Picture Division, the Radio Division, and the Regional Division, respectively.

Mr. ROCKEFELLER. I think it should be pointed out that if all coordination committees programs were included under the regional division, the press, motion picture, and radio budgets would not reflect the entire cost of the operations of these divisions.

Mr. WIGGLESWORTH. It is hard for me to visualize how you can use $500,000 for the distribution of material prepared in this country.

Mr. JAMIESON. In Brazil, for example, we operate a feature news distribution service and prepare a good deal of material locally for distribution in Brazil. We have a good-sized staff who are engaged in that work. They are citizens of Brazil

, supervised by members of our Washington staff stationed in Brazil. The distribution of that material locally also involves the distribution of material from the United States.

Mr. HARRISON. If it is agreeable to you, Mr. Chairman, I would like to bring up this afternoon a couple of men from the committee set-up to explain the way they operate.

Mr. CANNON. It will be very well to have them here so that we may talk with them about that matter, if we so desire.

FRIDAY, MAY 4, 1943.

BASIC ECONOMY DEPARTMENT

Mr. CANNON. Resuming our consideration of the estimates for the Office of Inter-American Affairs, we take up the next item, “Basic Economy Department," one of the largest and most important phases of the work down there.

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THE INSTITUTE OF INTER-AMERICAN AFFAIRS

FISCAL STATUS OF THE CORPORATION

I notice that you have created the Institute of Inter-American Affairs, a corporation, for the carrying out of this program. tell us first what is the capitalization of this corporation?

Will you

CAPITALIZATION AND CASH PAYMENTS UNDER GRANTS

Mr. HISLE. That is shown on page 6. The total capitalization is $65,024,404, and the corporation has received to date in cash under grants from the Office of Inter-American Affairs, $51,024,404.

Mr. CANNON. You gave us the amount that had been advanced to this corporation. How much has been advanced?

Mr. Hisle. In round figures the total capital is $65,000,000, and we have advanced in cash, $51,000,000. There remains to be paid over in cash $14,000,000 of which we are asking for $3,500,000 this year.

Mr. CANNON. Which would still leave in your original capital how much to complete it?

Mr. Hisle. $10,456,710 for subsequent years.

Mr. CANNON. What other sources of revenue does this corporation have?

Mr. HISLE. The principal source of revenue is grants from the Office of Inter-American Affairs. Some income-producing activities are carried out in Costa Rica and Panama, but they are on a revolvingfund basis. We sell food products from Costa Rica principally to the Army in Panama.

Mr. CANNON. Approximately what has been received up to this time from all other sources?

Mr. HISLE. About $600,000 through the fiscal year 1945; that is, from these reimbursable operations.

Mr. TABER. So far?
Mr. HISLE. Yes, sir.

HISTORY AND PURPOSE OF THE CORPORATION

Mr. CANNON. What is the life of the corporation?
Mr. IVERSON. There is no limitation on the life of the corporation.

Mr. CANNON. What is the probable period over which you now propose to operate?

Mr. Hisle. The field programs extend through December 31, 1948. That would be into the fiscal year 1949.

Mr. CANNON. And this work would be continued, or the liquidation of this work would be continued, following the close of both wars.

Mr. HISLE. Yes, sir.
Mr. Ludlow. How was this corporation created?

Mr. Hisle. It was created under authority given the Office of Inter-American Affairs in its appropriation acts to create corporations. This authority exists through this fiscal year, but it is being deleted from the language in these estimates.

Mr. Ludlow. Do you have the authority to create a corporation to run in perpetuity?

Mr. Hisle. Yes, we do, under the authority that has been in existence since the fiscal year 1942 through the current fiscal year, but the proposed appropriation language for 1946 shows that the authority to create any additional corporations is being deleted.

Mr. Ludlow. In the text of the submission?
Mr. HisLE. Yes, sir.
Mr. HARRISON. Yes, sir; that is right.

Mr. CANNON. I believe I will ask you to give us here at this time, although I see you have a rather complete statement in your justifications, a résumé of the purposes for which the corporation was created, and the extent to which you are achieving those purposes. General DUNHAM. I offer for the record the following justification:

Basic ECONOMY DEPARTMENT

FROGRAM STATEMENT

1. The Institute of Inter-American Affairs 1945 (estimated)

0 1946(estimated)

0 The operating organization of the Department of Basic Economy is the Institute of Inter-American Affairs, a corporation created by the Office to carry out its basic economy program. The capitalization of the Institute of Inter-American Affairs required for its present programs was provided in fiscal years prior to 1945 from cash appropriations and contract authorities made available to the Office of Inter-American Affairs. In 1946, as in 1945, no new funds are required for the Corporation; however, a cash appropriation of $3,543,290 is required for further liquidation of the $18,000,000 contract authority provided the Office in 1944, as detailed below: Contract authority granted in 1944.

$18,000,000 Partial liquidation in 1945.

$4,000,000 Partial liquidation in 1946.

3, 543, 290

7, 543, 290 Remainder to be liquidated in subsequent years.

10, 456, 710 Objectives.—The objectives of the Basic Economy Department are:

1. To cooperate with the governments of the other American republics to help solve critical health, sanitation, and food problems that impair the war effort and to provide assistance which will expedite the procurement of strategic and critical materials essential to the war effort of the United Nations.

2. To cooperate with the governments of the other American republics in the control and solution of important health and sanitation problems and the improvement of food production and agricultural practices, which are essential to The economic development of the Western Hemisphere.

Operations.— The location of the armed forces of the United States and those of our American allies, the large scale recruitment of workers for the procurement of essential materials such as rubber, sisal, minerals, and the attendant migration problems, have accentuated the seriousness of the available food supply and health and sanitation facilities in the other Americas. The war has also created serious economic dislocations.

The United States must do everything possible in cooperation with the govern. ments of the other American republics to lessen the impact of these shocks and to assist insofar as possible in the maintenance and development of economic stability.

The Institute of Inter-American Affairs is a nonprofit, nonstock, membership corporation, incorporated under laws of the State of Delaware. It was caused to be created by the Office to carry out the basic economy program, the objectives and purposes of which are to aid and improve the health and general welfare of the peoples of the Western Hemisphere." It is the operating organization of the Department of Basic Economy in conducting the programs of the Office for the purpose of attaining the objectives described above.

The Institute carries on its activities with funds granted to it by the Office. Its principal activities are conducted in cooperation with the other American republics in accordance with the terms of agreements entered into between the Institute representing the United States, and the governments of the other American republics. The agreements usually provide for the programs to be performed by special agencies or services established within the frame-work of the particular Ministry or Department concerned, i. e., Ministry of Health or Ministry of Agriculture, of the governments of the other American republics. Provision is also made for the programs to be approved and conducted by mutual agreement of the parties to the agreement under the general supervision of the chief of party of the technical mission sent to the particular country. The cooperative agreements provide for contributions by both parties of funds, materials, and services, and arrangements are being made for the governments of the American republics to assume increasing responsibility for carrying on the programs with their personnel and funds.

The Department and the institute operate through the following three divisions:

Health and sanitation.—The objectives of this division may be separated into four fields:

(1) Military: To improve health conditions in strategic areas, particularly with relation to the requirements of our armed forces and those of our American Allies.

(2) Economic: Control and solution of important health and sanitation problems which are essential to the economic development of the Western: Hemisphere.

(3) Political: To carry out the obligations of this Government with relation to the health and sanitation programs assumed by it under Resolution XXX of the Ministers of Foreign Affairs Conference at the Rio de Janeiro Conference of January 1942.

(4) Morale: To demonstrate by deeds as well as words the tangible benefits of democracy in action and to win active support of the civilian population.

The long-term objective of economic development by raising the standard of public health practices and the control and solution of important health and sanitation problems is a natural corollary of the emergency aims which cannot be overlooked even in wartime, due to the importance of the continued relations of the American republics in the post-war period.

Food supply.The objectives of this division may be sep ated into three fields:

(1) War: To increase production for workers engaged in the procurement of strategic inaterials, as well as for contingents of our armed services.

(2) Economic: Increasing production of food crops for local consumption by improving agricultural practices, and, in other ways, jointly determined upon by the cooperating governments.

(3) Morale: To demonstrate by deed as well as words benefits of demccracy in action and to win active support of the civilian population.

It is important that assistance be given to food production in the other American republics, particularly at a time when a critical situation faces our domestic production. Because of the war, we are presently faced with the necessity of providing food, by local production in the other American republics in areas of chronic shortage normally dependent upon imports, for large numbers of workers engaged in the procurement of strategic materials, as well as providing food for units of our armed forces located in the other American republics.

Training Division.—The objectives of this Division may be separated into four fields:

(1) General: To administer a program of training of technicians in public health and agriculture in cooperation with the Divisions of Health and Sanitation and Food Supply of the Department of Basic Economy.

(2) Military: To adequately train technicians in the fields of public health and agriculture from the other American republics so that they may return to their countries to assist on the strategic programs already undertaken by the Institute of Inter-American Affairs in cooperation with the other American republics.

(3) Economic and technical: To train workers in the fields of public health and agriculture from the other American republics so that they may go back to their own countries to improve conditions and raise the standard of living.

(4) Morale: To give the public health workers and agricultural technicians the opportunity of first-hand acquaintance with modern American procedures, tèchniques, and organization, to give them the opportunity of getting to know the United States at first hand, to help to foster, the understanding of American techniques and standards in the other American republics.

PROGRAM EXPENSE

1. The Institute of Inter-American Affairs Estimated obligations:

1945.
1946.

0 The Institute of Inter-American Affairs is a Government-controlled nonprofit membership corporation incorporated unde he laws of the State of Delaware on March 31, 1942, pursuant to authority contained in the Third Supplemental National Defense Appropriation Act, 1942 (Public Law 353, 77th Cong., approved December 17, 1941). The operations are financed by grants from the Office of Inter-American Affairs and such grants totaled, as of June 30, 1944, $65,024,404, including $18,000,000 granted from contract authority provided the Office in fiscal year 1944. No additional grants are to be made in the fiscal year 1945. The table below, indicates the 1946 cash appropriation required to cover the cash needs of the Institute of Inter-American Affairs through June 30, 1946:

GENERAL STATEMENT ON OPERATIONS OF THE INSTITUTE

General DUNHAM. Mr. Chairman, the Institute is divided into three divisions, the Health and Sanitation Division, the Food Supply Division, and the Training Division.

The purpose of the Institute is the improvement of public health, and the alleviation of food shortages in strategic areas, thereby raising the standard of living in these countries in order to promote economic development and economic stability. One result of these activities will be the expansion of trade relations with the United States, through increased production and increased purchasing power.

It is essential that the standard of living be raised in these countries for the people if we are to accomplish this purpose. It is true that there are other factors involved in the standard of living besides public health and food supply but the standard of living cannot be raised unless there is improvement in the public health and food supply.

(Discussion off the record.)

General DUNHAM. I want to make this as brief as I can. In the public health field we are working in 18 countries of the other Americas all except Cuba and Argentina. Under the food-supply program, we are working in 8 of the countries—Venezuela, Peru, Paraguay, and Brazil in South America; Honduras, Costa Rica, and Panama in Central America; and Haiti in the Caribbean Islands.

Our method of operating is to send into each of these countries a field party composed of experienced technical personnel. The head of each field party is known as the chief of field party. We negotiate agreements with the country to set up a cooperative service within the appropriate ministry of the local government, either the Ministry of Health or the Ministry of Agriculture.

Mr. CANNON. In selecting those countries, did you select the countries in which we had the largest economic interest, or did you select those countries in which there was apparently the greatest need?

General DUNHAM. Over all, it would be on the basis of the greatest need, although we did, of course, consider not only the economic interests, but also especially at the beginning, the military interests. I might say in passing, that at the beginning, with the imminent threat of invasion, either aerial or otherwise, from Dakar, we were of considerable assistance to our own troops at Belem, and Recife, Brazil. especially with food at Recife. We produced considerable quantities

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