560 7976 UNITED NATIONS RELIEF AND REHABILITATION ADMINISTRATION, 1946 FRIDAY, NOVEMBER 16, 1945 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D. C. The subcommittee met at 10:30 a. m., Hon. Kenneth McKellar (chairman of the subcommittee) presiding. Present: Senators McKellar (chairman of the subcommittee), Hayden, Russell, Overton, Thomas, and Ball. Senator MCKELLAR (chairman of the subcommittee). The subcommittee will come to order, and House Joint Resolution 266 is before us, to appropriate $550,000,000 for UNRRA. Mr. Clayton, we shall now hear from you concerning this bill. STATEMENT OF HON. WILLIAM L. CLAYTON, ASSISTANT SECRETARY OF STATE, ACCOMPANIED BY JOHN H. FERGUSON, SPECIAL ASSISTANT TO THE ASSISTANT SECRETARY; DONALD S. GILPATRIC, CHIEF, WAR AREAS ECONOMIC DIVISION; A. H. FELLER, GENERAL COUNSEL, UNRRA; DAVID WEINTRAUB, CHIEF, BUREAU OF SUPPLIES, UNRRA; AND SAMUEL T. PARELMAN, ASSISTANT TO DEPUTY FOREIGN LIQUIDATION COMMISSIONER TOTAL FUNDS MADE AVAILABLE AND ADDITIONAL AMOUNT REQUESTED Mr. CLAYTON. Mr. Chairman and gentlemen, I appear before you this morning for the State Department to voice our warm approval and advocacy of this Resolution 266. As you know, some time ago the Congress authorized a total of $1,350,000,000 for UNRRA, of which there has been appropriated $450,000,000 and authority given to FEA to make available $350,000,000 from lend-lease funds, making a total that was made available to UNRRA of $800,000,000 out of $1,350,000,000. The object of this resolution is to appropriate the remaining $550,000,000. I shall just say in passing that Governor Lehman is appearing this morning before the House Foreign Affairs Committee in connection with a new bill asking for an additional authorization of $1,350,000,000, and he will be available to your committee later on if you wish to question him regarding some of the aspects of the administration of UNRRA. PREVIOUS APPROPRIATION ENTIRELY COMMITTED I should like to point out, Mr. Chairman, that there is an extreme urgency for prompt action in connection with this resolution which is before you this morning. UNRRA has entirely committed the $800,000,000 which has been available to them, and they have been hard put to keep functioning in a proper way so that there would be no lapse in the continuity of the procurement and delivery of supplies abroad on programs which they have already agreed upon. TRANSFER FROM SURPLUS PURCHASE ACCOUNT WITH WAR DEPARTMENT That is perhaps best evidenced by the fact that I was informed on yesterday that UNRRA had had to request formally and urgently the State Department's approval of transferring $50,000,000 from the UNRRA surplus purchase account with the War Department as a temporary and reimbursable credit to the Department of Agriculture in order to make available to UNRRA allocations of foodstuffs by that Department. These allocations would be lost to the relief pipe line if this transfer is not made immediately, and I therefore propose to support it for the State Department with all the agencies concerned. I am informing you of this proposed action because it is merely a modification of the plans which had been made for the purchase of Army surplus by UNRRA. Out of the $350,000,000 which has been made available by the Congress from lend-lease funds as a charge against our contribution to UNRRA, a total of $159,000,000 has been earmarked with the War Department for the payment to them of Army surpluses abroad, military surpluses-trucks and things of that kind-which UNRRA needed and which the War Department had indicated that they could supply. So this $159,000,000 has been set aside for that purpose. It has developed that the War Department could not make these surpluses available to UNRRA as quickly as was expected, and we have resorted now to that fund to recover $50,000,000 in order that essential foodstuffs and supplies could be procured and paid for and so that UNRRA would not lose the allocations that have been made to them of those articles. SYSTEM OF DISTRIBUTION Senator MCKELLAR. Mr. Secretary, let me ask you this question: Does UNRRA buy the food and other supplies and give them directly to the recipients, or do you simply furnish the food or money, or whatever is necessary, to the several governments? What plan has been adopted? Mr. CLAYTON. UNRRA procures and ships the supplies to the recipient country, and on arrival in the port the usual plan is to turn them over to the government of that country, and that government organizes the distribution of the supplies and does in fact distribute them. That is largely the case. UNRRA has done some of the transportation work involved by furnishing trucks, and so on, for that purpose. I should explain, Mr. Chairman, that UNRRA has a mission in each one of these countries that is located there permanently, and it is their duty to follow the distribution of these supplies and to see that they are properly distributed. PERCENTAGE OF FUNDS USED FOR SUPPLIES Senator MCKELLAR. Could you state about what percent of the supplies of-not of the supplies, but what percent of the appropriation actually goes in supplies and actually is used by the recipients of those supplies? Mr. CLAYTON. It all goes in supplies except a very small amount which is used for administration. We noted on yesterday in my testimony before the House Foreign Affairs Committee that the total of administrative and distribution expenses which UNRRA bears is only about 22 percent of their expenditures, which seems to be a very small amount. Senator MCKELLAR. TWO and one-half percent? AMOUNT FOR ADMINISTRATIVE AND OPERATING EXPENSES Mr. CLAYTON. Yes, sir. They estimate that out of the billion eighthundred-and-some-odd million, which is the total of their first program, they will have about $16,000,000 of administrative expense and a total of about $24,000,000 of mission operating expense, making a total of $40,000,000, which is about 212 percent of the total expenditure. Senator OVERTON. That includes both personnel and distribution? Mr. CLAYTON. Yes, sir. That is the total of the administrative expenses. Senator OVERTON. That is rather remarkable. Mr. CLAYTON. It really is. Senator OVERTON. What I have heard of UNRRA is that it spends a large portion of its funds in the employment of unnecessary personnel. DIVERSION OF SUPPLIES FROM THEIR PROPER USE Senator MCKELLAR. You see those statements in the paper, and that is why I am asking what is actually done with it. Now, the charge has also been made that UNRRA supplies have been used by certain governments, I won't mention the names of the governments-for other purposes. Have you found anything of that sort? Mr. CLAYTON. There is no doubt about it, that in some of these countries some small portion of the supplies have been diverted from their proper use. There is no question about that. That almost always happens in every great relief undertaking that I have ever heard anything about or know anything about. So far as we have been able to ascertain, that is a very small proportion in the case of UNRRA and is not enough to detract greatly from the effectiveness of the operation or the enterprise as a whole. Senator MCKELLAR. Could you form an estimate of about what percent? Mr. CLAYTON. I think it would be very difficult to do, Mr. Chairman, but what we have done in the State Department is this: We get these rumors and we get these reports that these supplies are being diverted to the black market in such and such a country, or that the authorities in such and such a country have used the supplies to send to their favored political adherents, and so on, and we investigate those reports to the best of our ability, and the UNRRA missions investigate them, and we have found that-with some exceptions, because those things have happened occasionally-they are the great exception rather than the rule. Senator MCKELLAR. Where you find, for instance, that a government-let us call it government B-has done that, and that government is still in existence, do you still furnish that government with the supplies? Mr. CLAYTON. Mr. Chairman, it is usually some petty official, somebody way down the line; it isn't something that is done by the central government, but it is somebody way down the line, and I think, so far as we have been able to observe, that it is of a nature that you certainly cannot say that it is a policy of any government of a recipient country to do anything of that kind Senator MCKELLAR. All right, sir; go ahead. ILLUSTRATIONS OF URGENT NEED FOR ADDITIONAL FUNDS Mr. CLAYTON. I spoke of the need, of the great urgency here of getting this appropriation quickly, and I gave as an instance that we were transferring or arranging to transfer $50,000,000 of this $159,000,000 which has been set aside to purchase Army surpluses; we are transferring that amount to the Department of Agriculture to pay for the necessary food. In addition to that, some time ago, not very long ago, in another situation in which UNRRA found that they were going to have to find some money somehow or else lose an allocation of food, it was arranged that certain procurement programs which UNRRA had with the Treasury for trucks and tractors and things of that kind would be help up, and they wouldn't make the contracts, and $50,000,000 thus released was transferred from Treasury Procurement to the Department of Agriculture in order to pay for essential food. I just mention these things to illustrate how important it is to get prompt action on this measure. BASIS OF OBJECTION TO FREE PRESS AMENDMENT There is one other matter, Mr. Chairman, that I should like to refer to, and that is that when this bill was up in the House certain amendments were added to it. We feel that it is really unfortunate that these amendments were added to the bill, added to the measure, but we do not feel we can seriously object to any of them at this time except the one relating to the free access of American radio and press representatives to the news in foreign countries. Now, I am sure that no one will misunderstand my position and that of the Department regarding a free press. We are negotiating with governments all over the world on this question all the time, and we have had a certain measure of success, but we do seriously object to the relief needs of these countries being used as a vehicle to force governments into the adoption of certain measures that they may be resisting. Senator MCKELLAR. The amendment which you speak of is the amendment under the title (B) on line 14 on page 3. You gentlemen all find that. Mr. CLAYTON. Yes, sir. Senator MCKELLAR. You think that is unnecessary? |