Now my question is this: Is there any doubt in your mind but what the makers of these tractors, trucks, and cars received, when they sold them, cost production plus a reasonable profit?

Mr. CLAYTON. No, Senator; I don't doubt it.

Senator THOMAS. Is there any doubt in your mind that the transportation systems that transported these articles from the place of purchase to their destination-is there any doubt in your mind but what they received the cost of production plus a reasonable profit? Mr. CLAYTON. No, sir; I have no doubt that they did.

Senator THOMAS. I have no doubt about it, and I assure you there is no doubt about it.

Mr. CLAYTON. No, sir; I think there is none.

Senator THOMAS. That is the foundation, Mr. Chairman, for the amendment that I am going to offer sometime during the consideration of the bill.

Senator MCKELLAR. Mr. Clayton, this is off the record.

(A discussion followed off the record.)

Senator THOMAS. Mr. Chairman, Mr. Clayton has not been in charge of this organization until very recently, and knowing him as I do, I have every confidence that from then on, if it has been bad in the past, it will be very well scrutinized.

Mr. CLAYTON. Thank you very much, sir.

(The following was presented for the record:)

HEALTH AND SANITATION PROJECTS

(See p. 20)

The United Nations Relief and Rehabilitation Administration does not by itself operate projects for the cleaning of cesspools and such type of sanitation projects. It does, however, assist member nations to establish health and sanitation projects, has provided medical and technical assistance in the develop. ment and supervision of such projects and has furnished supplies. For example, in Italy UNRRA has assisted in the reduction of malaria through providing DDT and through technical assistance in helping the Italian Government dust swamp areas. Similar projects have been developed in Greece. In China, for example, UNRRA physicians helped Chinese public-health officials in combating and eliminating an incipient cholera epidemic. The United States Public Health Service has made available to UNRRA many doctors who are helping the war-devastated nations restore a minimum of public health and sanitation work. In addition, UNRRA has furnished large quantities of health and medical supplies for use in hospitals, camps, and other centers.

Shipments of health and medical supplies to liberated areas, through Sept. 30, 1945

[In gross long tons and thousands of United States dollarsl

COMMITMENTS FOR SHELTER MATERIALS

(See pp. 20-21)

As of November 15 there were commitments for material to be used in shelter, as follows:

The commodities include such items as roofing paper, nuts and bolts, rough hardware such as hinges, spikes, screws, metal lath, some structural steel, window glass and glass substitutes, lumber, and small quantities of pipe, and household electrical fittings (conduit, wire, switches, etc.).

In addition to the above, an amount of approximately $2,000,000 has been committed for hand tools, such as hammers, screw drivers, saws, chisels, etc., thus bringing the over-all committed total to $8,891,600. The hand tools will be of invaluable assistance in the utilization, not only of the material supplied but of indigenous material and in the repair of existing dwellings.

(Whereupon, at 1:05 p. m., an adjournment was taken until Monday, November 19, 1945, at 10:30 a. m. This meeting was subsequently postponed until Tuesday, November 20, 1945, at 10:30 a. m.)

UNITED NATIONS RELIEF AND REHABILITATION

ADMINISTRATION, 1946

TUESDAY, NOVEMBER 20, 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 (presiding), Hayden, Tydings, Thomas, McCarran, and Ball.

Senator MCKELLAR. The subcommittee will come to order. We are considering House Joint Resolution 266, to appropriate $550,000,000 for UNRRA.

Have

Mr. Secretary, have you anything further to say? I reckon we shall have some members of the committee here in a minute. you anything further that you wish to say?

STATEMENT OF HON. WILLIAM L. CLAYTON, ASSISTANT SECRETARY OF STATE, ACCOMPANIED BY DONALD S. GILPATRIC, CHIEF, WAR AREAS ECONOMIC DIVISION, STATE DEPARTMENT, AND SAMUEL T. PÁRELMAN, ASSISTANT TO DEPUTY FOREIGN LIQUIDATION COMMISSIONER

PROPRIETY OF USE OF UNRRA FUNDS IN ITALY

Mr. CLAYTON. Mr. Chairman, I should like to revert to the question as to the propriety of the expenditure of UNRRA funds for assistance in Italy.

Senator MCKELLAR. Yes, sir.

LETTER FROM UNDER SECRETARY ACHESON

Mr. CLAYTON. We discussed the matter with Mr. Acheson, Under Secretary of State, who was the United States delegate on the UNRRA Council at the time that action was taken in Montreal in September 1944.

Senator MCKELLAR. Yes.

Mr. CLAYTON. And he has written a letter to you on this subject, which is intended to explain and clarify the situation. With your permission I should like to read it

Senator MCKELLAR. I wish you would.

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Mr. CLAYTON. And then hand it to the reporter.

Senator McKELLAR. Yes.

Mr. CLAYTON (reading):

The Honorable KENNETH MCKELLAR,

United States Senate, Washington, D. C.

MY DEAR SENATOR MCKELLAR: Assistant Secretary Clayton has called my attention to the fact that a question arose in the course of the UNRRA appropriation hearings before your committee concerning the authority under which the UNRRA Council first authorized a limited relief program for Italy. Since at the time of the adoption of the resolution which authorized this program I was the United States member of the UNRRA Council, I should like to clarify the matter.

The original act authorizing the United States contribution to UNRRA provides that the funds shall be used for our participation in the work of UNRRA as established by an agreement concluded by the United Nations and associated governments on November 9, 1943. The agreement is set out in full in the act. In article 1, section2 (a), of the agreement, it is declared that the purposes and functions of the UNRRA administeration shall be "to plan, coordinate, administer, or arrange for the administration of measures for the relief of victims of war in any area under the control of any of the United Nations through the provision of food, fuel, clothing, shelter, and other basic necessities, medical and other essential services; and to facilitate in such areas, so far as necessary to the adequate provision of relief, the production and transportation of these articles, and the furnishing of these services."

At the time of the adoption of the resolution in question during the session of the UNRRA Council at Montreal in the autumn of 1944, Italy was subject to the control of an Allied Commission, of which the United States and the United Kingdom were members. There was, therefore, nothing inconsistent in the action of the UNRRA Council in authorizing a limited program of relief for Italy.

May I also call your attention to the fact that at the time of the passage of the original authorization act there existed 41 resolutions adopted by the UNRRA Council in Atlantic City, the contents of which were fully explained to the Congress. They were not, however, embodied in full in the legislation and could, therefore, be modified by the Council in important respects in accordance with the terms of the UNRRA agreement. Resolution No. 1 provided that no operation should be undertaken in any enemy or ex-enemy area except with the aproval of the UNRRA Council as to the scale and nature of the operations and upon payment of any expenses in connection with such operation by the enemy or ex-enemy country. The action of the Council in Montreal provided the required approval and modified the requirement for payment on the part of Italy.

Quite aside from the provisions of the UNRRA agreement and the resolutions in force at the time of the passage of the authorization act, section 4 of the authorization act, itself, is relevant. That section provides that “In extending its approval of this joint resolution, it is the recommendation of Congress that insofar as funds and facilities permit, any area (except within enemy territory and while occupied by the enemy) important to the military operations of the United Nations which are stricken by famine or disease may be included in the benefits to be made available through the United Nations Relief and Rehabilitation Administration."

The liberated portions of Italy were not only controlled by an Allied Council, but the armies of the United Nations were fighting their way up the Italian peninsula and expending large sums of money themselves upon the relief of the Italian people in order to prevent disease and unrest which would disrupt our military effort. Under these circumstances it can hardly be contended that Congress had failed to authorize the use of a portion of UNRRA's funds for a limited program in that area.

Today our armies of occupation are in three other areas of the world which were formerly unwilling Axis partners. In Austria, Korea, and Formosa, all of which we hope to welcome back to the side of the United Nations, UNRRA has been authorized to undertake limited programs of assistance in the future, and it has been further authorized to continue its program in Italy. This action was taken in August of this year at the London meeting of the UNRRA Council.

I know you are aware of the needs which exist in these areas and the desirability of directing our efforts toward the furnishing of limited assistance to them during the critical months ahead. If supplies cannot be made available to them from abroad, political instability and chaos will almost inevitably be the result.

We have always been extremely careful to act in accordance with the directions of the Congress, and we shall continue to do so. I hope that I may have been able to clear up any misunderstanding which existed in that respect. Sincerely yours,

DEAN ACHESON, Under Secretary.

Senator MCKELLAR. Will you pass that letter up to me?
(The letter referred to was passed to Senator McKellar.)

QUESTION AS TO UNRRA PROGRAM IN GERMANY AND JAPAN

Senator MCKELLAR. Would not that reason include Japan and Germany? Is it proposed by the UNRRA to take care of all charitable work in Germany and Japan?

Mr. CLAYTON. No, Mr. Chairman. On the contrary, UNRRA has no plan or program of any kind whatsoever with reference to relief in Germany except insofar as you may term the care and repatriation of displaced persons "relief"; and it has no program whatsoever in Japan, and there is none intended, and I am quite sure that none will be proposed in the future. I do not believe that the UNRRA Council-it is my view that the UNRRA Council would never consent to and approve any such programs if they were submitted.

EXTRACT FROM ACT APPROVING UNRRA AGREEMENT

Senator MCKELLAR. Let me read this law again:

To plan, coordinate, administer, or arrange for the administration of measures for the relief of victims of war in any area under the control of the United Nations through the

I shall stop there long enough to say, under that, I imagine that refers to our own people.

Mr. CLAYTON. "United Nations," it says.

Senator MCKELLAR. United Nations people?

Mr. CLAYTON. Yes, sir; under the control of any of the United Nations.

Senator MCKELLAR (reading):

through the provision of food, fuel, clothing, shelter and other basic necessities, medical and other essential services; and to facilitate in such areas, so far as necessary to the adequate provision of relief, the production and transportation of these articles and the furnishing of these services.

FURNISHING OF AID IN ENEMY COUNTRIES

That doesn't mean that as soon as we captured territory we would start a system of rehabilitation and furnishing food and clothing to our enemies, surely. I do not think it meant that at all. I do not think that was intended; yet it seems that that is what was done in Italy.