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SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

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SUBCOMMITTEE Tp,>p\fES5'IGATE THE

ADMINISTRATION OF THE INTERNAL SECURITY

ACT AND OTHER INTERNAL SECURITY LAWS

OF THE

COMMITTEE ON THE JUDICIARY UNITED STATES SENATE

EIGHTY-FOURTH CONGRESS

SECOND SESSION ON

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

MAY 15, 1956

PART 42

Printed for the use of the Committee on the Judiciary

UNITED STATES GOVERNMENT PRINTING OFFICE 72723 WASHINGTON : 1957

Boston Public Library Superintendent of Documents

JUL 25 1957

COMMITTEE ON THE JUDICIARY

JAMES O. EASTLAND, Mississippi, Chairman

ESTES KEFAUVER, Tennessee ALEXANDER WILEY, Wisconsin

OLIN D. JOHNSTON, South Carolina WILLIAM LANGER, North Dakota

THOMAS C. HENNINGS, Jr., Missouri WILLIAM E. JEXNER, Indiana

JOHN L. McCLELLAN, Arkansas ARTHUR V. WATKINS, Utah

PRICE DANIEL, Texas EVERETT McKINLEY DIRKSEN, Illinois

JOSEPH C. O'MAHONEY, Wyoming HERMAN WELKER, Idaho

MATTHEW M. NEELY, West Virginia JOHN MARSHALL BUTLER, Maryland

Subcommittee To Investigate the Administration of the Internal Security AoT AND Other Internal Security Laws

JAMES O. EASTLAND, Mississippi, Chairman OLIN D. JOHNSTON, South Carolina WILLIAM E. JENNER, Indiana

JOHN L. McCLELLAN, Arkansas ARTHUR V. WATKINS, Utah

THOMAS C. HENNINGS, JR., Missouri HERMAN WELKER, Idaho

PRICE DANIEL, Texas JOHN MARSHALL BUTLER, Maryland

Robert Morbis, Chief Counsel

J. G. SouRWiNE, Associate Counsel

William A. Rusher, Associate Counsel

Benjamin Mandbl, Director of Research

n

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

TUESDAY, MAY 15, 1956

United States Senate, SuBcoMMin^'EE To Investigate the

Administration of the Internal Security Act and

Other Internal Security Laws of the

Committee on the Judiciary,

Washington, D. C.

The subcommittee met, pursuant to recess at 11 : 35 o'clock a. m., in room 424, Senate Office Building, Senator William E. Jenner, pre- siding.

Present : Senator Jenner.

Also present: Eobert JNIorris, chief counsel: William A. Rusher, administrative counsel; Benjamin Mandel, research director, and Robert McManus, research analyst.

Senator Jenner, The committee will come to order.

]Mr. Morris. I would like the record to show that we are 45 minutes or more late for our hearings.

The reason is that we have had a longer executive session than we had originally planned. Mr. Coe has identified a statement in which he stated that he wished to drop the protection of the fifth amendment for certain facts. That on its face would be a reversal of what he originally said. For that reason, Senator, we spent, with Senator Eastland presiding, a great deal of time going over things we had not planned to go over m executive session testimony. I think, how- ever, if we get into this, with a few questions here at the beginning, we will find that the status of Mr. Coe — his position — is not so dif- ferent from what j'ou would gather from first blush on this.

Senator Jenner. Mr. Coe, will you be sworn to testify ?

Do you swear that the testimony you are to give before the subcom- mittee will be the truth, the whole truth, and nothing but the truth?

Mr. Coe. I do.

Senator Jenner. Proceed Mr. Morris.

Mr. Morris. I would like to read from a certain portion of your statement here.

Mr. CoE. May I read the statement into the record ?

Senator Jenner. You have issued the statement to the press, have you not?

Mr. Coe. Yes.

Senator Jenner. Then we don't want a repetition here. Go ahead, Mr. Morris.

Mr. Morris. You wish to state here that the testimony of Eliza- beth Bentley before the Internal Security Committee about yourself is false. Is that right?

2873

2874 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Mr. CoE. Insofar as Miss Bentley charged me with espionage, which I believe is her testimony, which has been widely publicized over many years. It is completely false.

Mr. Morris. May we deal in specific allegations ?

Mr. CoE. As you know, I don't even know Miss Bentley.

Mr. Morris. May we deal in specific aspects of her testimony?

Did you know Natlian Gregory Silvermaster?

Mr. CoE. I certainly did; may I explain how I knew him?

Mr. Morris. Did you know William Ludwig Ullmann?

Mr. CoE. Yes, and I would like to explain how I knew him.

Mr. Morris. You may.

Mr. CoE. Nathan Gregory Silvermaster and William Ludwig Ull- mann I first met in the United States Government when I was em- ployed there. They were employed there at the same time, one of them in an office of the Treasury Department where I was employed. Inevitably, I became acquainted with Mr. Ullmann. They were both economists, I was acquainted with them and numerous other economists.

I knew Ullmann. He was a New Dealer, a person of great loyalty to his country.

Mr. Morris. Were you a Communist during the time that you knew them ?

Mr. CoE. I knew Nathan Gregory Silvermaster, I think through Ullmann, and later in a Government office where we were jointly em- ployed for a short time.

Mr. Morris. Now, were you a Communist during the period that you knew Silvermaster and Ullmann ?

Mr. CoE. I would like to preface my answer to that statement, Mr. Morris, with this. I told you in the statement I have given you that I want to waive the protection of the fifth amendment in order to clear up the allegations of espionage against Wliite, myself, and others so far as I can possibly do so. You now ask me, and I hope you will ask a good many questions on that, and I hope that all the evidence of espionage or of any other improper activities of mine, which is in the possession of the committee, will be put into the record.

Regarding questions of politics

Mr. Morris. We are not talking about politics, w€ are talking about membership in the Communist Party, Mr. Coe.

Mr. CoE. Political affiliations, membership in the Communist Party or any party, membership in any of the various senses which this com- mittee has used membership in the Communist Party to mean.

I say first, I object to being brought before a tribunal of this sort and compelled to talk about my political beliefs or affiliations, or those of anyone else.

Senator Jenner. The objection will be overruled. Will you answer the question, were you a member of the Communist Party at the time you knew Silvermaster and Ullmann ?

Mr. CoE. I believe, Senator, that since you have overruled the ob- jection, I will have to rely on the protection of the first amendment, which I think prevents your inquiring into these matters.

Mr. Morris. It doesn't prevent us from inquiring into them. It is a privilege which an inquiry of

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2875

Senator Jenner. The committee does not recognize your refusal to answer under the first amendment. This is not a tribunaL This is a duly constituted congressional committee, we are seeking informa- tion. Now, we ask that you answer the question.

Mr. CoE. Mr. Chairman, since the committee doesn't recognize the first amendment in this context, I will avail myself of my privilege under the fifth amendment not to be a witness against myself.

Senator Jenner. The committee so recognizes yovir right.

Mr. CoE. I may say for the convenience of the committee that this is a course which I shall follow generally on all political questions.

Mr. Morris. Did you pay Communist Party dues to Nathan Greg- ory Silvermaster or William Ullmann ?

Mr. CoE. I consider that the same question, Mr. Morris, in slightly a different form and, therefore, I give the same answer.

First, the objection which I assume is overruled; second, refusal mider the first amendment, which you don't recognize; and, third, refusal under the fifth amendment, which you do recognize.

Senator Jenner. Your refusal under the fifth amendment will be recognized.

Mr. Coe. Tlmnk you. Senator.

Mr. Morris. Did you pay Communist Party dues to Silvermaster or Ullmami, which, to your knowledge, was transmitted to Elizabeth Bentley ?

Mr. Coe. Mr. Morris, though I seem to wish to conserve the com- mittee's time, I don't perceive that repetition, as you are doing, of the same question, "Are you or were you a Communist?" in many forms, is doing that.

I have told you with what I thought was helpful spirit that that is one area of questions where I will defend myself in the way I have indicated. I thought you were inquiring into espionage. I am anxious to answer those questions.

Mr. MoRMS. Well, of course you know, Mr. Coe, that we have to deal in specifics. It may be that you think in terms of abstracts, but we would like to deal with concrete facts, and for that reason I have to ask you the specific questions that follow the nature of the evidence that is in our possession.

Miss Bentley has testified that you were a Communist and that you paid Communist Party dues and that she collected your dues, and that she didn't get it from your personally, but through Silvermaster and Ullmann.

With respect to the next group of questions

Senator Jenner. Would you read the question again Miss Reporter ?

(The reporter read the questions back as follows :)

Did you pay Communist Party dues to Silvermaster or Ullmann, which, to your knowledge, was transmitted to Elizabeth Bentley?

Mr. CoE. I want to answer the question, and I want to rely on the three protections.

Senator Jenner. Same record, Miss Reporter, as the other questions.

Mr. Morris. Did you ever transmit classified documents to Nathan Gregory Silvermaster in his home?

Mr. Coe. I told you, Mr. Morris, that I never at any time engaged in espionage.

Senator Jenner. I don't believe that is a proper answer to the ques- tion. Did you deliver documents is the question.

2876 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Mr. CoE. I think that would — I beg your pardon.

Mr. Morris. Did you ever transmit classified documents to Nathan Gregoiy Silvermaster in his home ?

Mr. CoE. The answer is "No."

Mr. Morris, Did you ever transmit classified documents to William Ludwig Ullmann in Silvermaster's home ?

Mr. CoE. Did I ever transmit to Ullmann — as a matter of record, Mr. Morris, Ullmann for certain periods of my Government career was under my supervision. I don't recall passing classified or even unclassified documents to him during that time. But commonsense tells me that I must have.

Senator Jenner. I don't believe that is a responsive answer. I think the question was phrased, "Did you deliver documents to Ull- mann in Silvermaster's home?" Not in the course of your duties.

Mr. Morris. Give it to him in his home ?

Mr. CoE. I have no recollection of ever having done so.

Mr. Morris. Did you give classified documents to Nathan Gregory Silvermaster at any time?

Mr. CoE. At any time?

Mr. Morris. Yes, or at any place, rather. I will take the specifica- tion "in his home" off.

Mr. CoE. Well, I gave you the answer; no.

Mr. Morris. That was in his home?

Mr. CoE. There was a brief period when Silvermaster and I were employed in the same agency. I have no recollection of giving him classified documents at that time. I doubt, so far as I recall the nature of the work, that I had very much to do with him. But it is conceivable.

Mr. Morris. Now, have you ever been in the basement of Silver- master's home?

Mr. CoE. I don't recall.

Mr. Morris. Is it your testimony that you were never in the base- ment of the Silvermaster home?

Mr. CoE. I simply don't recall. I was in his home.

Mr. Morris. And you can't tell us whether or not you were in the basement of that place?

Mr. CoE. The period when he and I were in the Government, con- cerning which Bentley has spoken, was — what, 15 years ago? I couldn't say positively that I was or wasn't in anybody's basement 15 years ago.

Is that responsive?

Mr. Morris. Yes.

Mr. CoE. May I add something about classified documents?

Mr. Morris. Yes.

Mr. CoE. As you know, I have been before a lot of these committees, and I notice that very often, questions seemed designed to suggest that there is evidence of wrongdoing. If you have any evidence that I passed classified documents improperly to these or any other people, I think you ought to confront me with it. If you haven't got it here, I certainly want you to put it into the record and give me a chance to talk about it. If you don't have any evidence, well, then, I must con- clude that the purpose of your question is to throw a sinister cloud over something where the evidence is totally lacking.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2877

Mr. Morris. Well, now, Mr. Coe, let me state this. In the first place, it is you who brought up this matter of reversing your past testimony.

Mr. CoE. Yes.

Mr. Morris. Now you are taking a position in opposition that you didn't take in the executive session a half hour ago.

Mr. Coe. Tell me about that. I don't know that that is a crime.

Mr. Morris. No ; but we are trying to get at your position.

Miss Reporter, would you come into the next room with me and read back some of Mr. Coe's testimony in the executive session.

Mr. Coe. I now recall, Judge Morris, the incident I think you refer to — or several.

Mr. Morris. There were two such instances.

Mr. CoE. Or several, in which I was asked about the transfer or possible delivery of classified documents to one or another persons, improperly.

I think I declined to answer because generally, in my own mind, as I said, I want to do everything possible to clear up questions of espionage. No evidence was presented to me in executive session on these matters, and it seemed to me that I was within my rights to decline. The question was now asked about even having thought of changing. It seems to me that though I had the right to protect myself if I wanted to by claiming the fifth amendment on that, I also have the right to drop it and not protect myself, take certain risks, put myself in jeopardy as to various laws and consequences, and since in general I have already decided to do that, I answered your question, and I will be glad to answer other similar ones.

Mr. Morris. Thank you.

Now, is it your testimony that you never transmitted classified documents to Ullman or Silvermaster, knowing that they would be given to others who were not privy to holding them? Not eligible to hold them ?

Mr. CoE. Well, if you will amend that to say that I never passed classified documents to them illegally, without authority, or contrary to law, contrary to rules and regulations of the agencies in which I was working, then I believe — then my recollection is certainly that I never did.

Mr. Morris. Will you answer without the qualification that you put on it, Mr. Coe ?

Mr. Friedman. I think he gave more than you asked for. Judge Morris.

Mr. Morris. Well, answer without the qualification.

Mr. Coe. I don't believe I ever did. To the best of my recollection, I never did. I can't conceive that I ever did if the purpose was espionage or anything improper.

Mr. Morris. Will you give me an answer without a qualification?

Mr. CoE. I have given you the answer. I don't mean by my second statement to qualify, but to add.

Mr. Morris. Wliat is your answer?

Mr. Coe. The answer is that I have no recollection of doing that whatsoever. And I don't believe I ever did.

Mr. Morris. Now, what classified documents have you transmitted to Silvermaster?

Mr. Friedman. That is an unfair question. Judge Morris.

2878 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Mr. Morris. Let me preface it by asking : have you transmitted any classified documents to Nathan Gregory Silvermaster?

Mr. CoE. I have no recollection that I ever gave Gregory Silver- master any classified documents whatsoever. There is a brief period of my Government emplo3'ment where it is quite conceivable that something I wrote or my staff wrote was transmitted by my secretary's office or by me to his office, etc., in the regular line of work. That is the only sort of exception which I should think would be common- sense, and I hope your question is not designed to entrap in any way on the basis of this.

I passed classified documents in my Government capacity to lots of people. This whole case is built around the fact, or has been built up around the fact that I knew certain people whom I knew in my Gov- ernment work. Some of them worked for me. Of course, we were related.

Mr. Morris. Do you have any knowledge that Ullmann duplicated documents in the basement of Silvermaster's home ?

Mr. CoE. Except for the testimony of Bentley, which I have read and consider incredible, I have no such knowledge.

Mr, Morris. So you have no independent knowledge that Ullmann duplicated any documents in the basement of the Silvermaster home?

Mr. CoE. I certainly can't recall any.

Mr. Morris. Is it your testimony that you never gave Ullmann any document except in the course of your official dealings with him?

Mr. Friedman. Classified?

Mr. Morris. Classfied documents except in the course of your official duties.

Mr. CoE. That's correct.

Mr. Morris. And you never gave Ullmann any documents with the knowledge that he would transmit them to any unauthorized person ?

Mr. CoE. Certainly not.

Do you have any evidence. Judge Morris ?

Mr. ]\IoRRis. Because the responses of Mr. Coe differed from what they were in executive session testimony and from his previous ap- pearance before this committee, it has been necessary to defer until this time the subject matter of the hearing that we planned today. Senator, it was certainly not the intention of the staff to go back over material that we had covered a year ago. That was necessitated by the insertion of Mr. Coe's statement into the record.^

Mr. Coe, what are you doing now ?

Mr. Coe. I am unemployed. I consider it the result of this and similar committees.

Mr. Morris. Wliat was your last job ?

Mr. Coe. I think I have had no regular job since I left the Inter- national Monetai-y Fund.

Mr. Morris. That is in December 1952.

Mr. CoE. Yes. I can recall a fee from some news agency, for writing a few pages. There may have been other instances. But aside from that, I have been unable to find work.

Mr. Morris. How have you been making a living since that time? Mr. Coe. I have supported myself on savings, largely. A few loans. Mr. Morris. Are you a Communist now, Mr. Coe ?

1 Coe's statement appears at the conclusion of the testimony.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2879

Mr. CoE. That is the same question that I informed you earlier on what my answer throughout this hearing would be. Do you want to keep repeating it ?

Mr. I^IoRRis. It has been hard to trace the consistency of your an- swers. What is your answer to that question? I haven't asked it

Mr. CoE. I will make it quite clear as I thought I did with regard to the half dozen or dozen other times it seemed to me you asked the question.

Though I shall talk quite freely and wish to talk on questions of espionage or any allegation of improper conduct of myself, and indeed of others, while I was a Government employee

Senator Jenner. I believe the question now is are you a Communist now?

Mr. Coe. Yes. I understand. I don't want to answer any ques- tions under compulsion about my political affiliations or about any- body else's political affiliations. Therefore, on the same grounds that I declined a moment ago, I decline now to answer.

Senator Jenner. That includes the fifth amendment?

Mr. Coe. That includes my right not to be a witness against myself.

Senator Jenner. It is the same record.

Then you consider the Communist Party affiliation as a political affiliation ?

Mr. CoE. It is called a party.

Senator Jenner. Do you consider it a political party in the same sense that you consider a Republican or Democratic Party in this country ?

Mr. Coe. May I consult ?

Senator Jenner. You may consult.

Mr. CoE. Well, I suppose in order to assist the committee and the judge and to take a consistent course that, since that is a question of political belief, opinion, or may be interpreted so, I will decline for reasons previously given.

Senator Jenner. Same record. Miss Reporter.

Mr. Morris. Mr. Chairman, the committee has received from the three farm organizations, the National Grange, the American Farm Bureau Federation, and the National Council of Farmer Cooperatives, a file of papers with the following letter of transmittal : This is dated May 4, 1956, sent to the Honorable James O. Eastland of the Senate Internal Security Subcommittee.

Dear Senator Eastland : On the invitation of Robert Morris, chief counsel of the Senate Internal Security Subcommittee, we are forwarding a staff report containing information with respect to certain phases of United Nations opera- tion which we believe merit study and investigation by your subcommittee. Each of the organizations which we represent has supported the United Nations and has sought to cooperate in the development of international programs to promote economic expansion and world peace. The attached information seems to provide the basis for concern as to the internal-security implications of some of the developments in this field ; however, we do not have the authority or staff to make the sort of investigation necessary to establish the validity — or lack of validity — of this information. Consequently, we cannot determine what conclusions, if any, are justified.

We solicit the assistance of your subcommittee and its staff with regard to this matter.

2880 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

That is signed, Herschel Newsom for the National Grange, Charles B. Shiiman for the American Farm Bureau Federation, and Homer L. Brinkley for the National Council of Farmer Cooperatives.

Mr. CoE. Is that to be the basis of questions directed to me?

Mr. Morris. We have just a few questions on that score.

Mr. CoE. Could I see the letter, Judge Morris ?

Mr. Morris. You may.

Mr. Chairman, I would like to take this out of order so that we can relieve Mr. Coe of his further appearance here on this subject.

Senator Jenner. Yes.

Mr. Morris. The portion of this file which bears on Mr. Coe reads as follows:

The New York Times of December 4, 1952, reported: "The International Monetary Fund announced today — December 3, 1952 — the dismissal of its secre- tary, Frank Coe, who refused last Monday to tell Senate investigators in New York whether he was now or had ever been a Communist or subversive agent taking orders from Communists."

In the same story, the New York Times also said: "As secretary of the agency— International Monetary Fund— from its inception, Mr. Coe participated in all meetings of its Board of Governors or Directors."

It was in these meetings of the IMF Board of Governors that instructions were formulated on the position to be taken by the representative of the International Monetary Fund in negotiations which were held between March and June 1949 with U. N. and other specialized agencies on the subject of an expanded technical- assistance program. The position of the International Monetary Fund through- out these negotiations was to oppose establishment of a central fund under U. N. control to finance the proposed expanded progi-am.

So firmly opposed was the International Monetary Fund to central financing — and the program control which inevitably follows — that when the central fund was established under U. N. administration, the IMF refused to participate in the U. N. expanded technical assistance program, beyond sending observers to meetings. It has never accepted money from the U. N. fund.

W^hile it is certain that V. Frank Coe knew the position of his own agency regarding a central fund under U. N. control, records have been turned up which reveal that, as early as March 10, 1949, he circulated notes on a plan which parallels the central-fund operation of the present U. N. expanded tech- nical assistance program — which was not adopted by U. N.'s Economic and Social Council until August 1949.

Throughout the period of negotiations among the international agencies on the expanded technical assistance proposal — March-May 1949 — David Wein- traub was the spokesman for U. N., and espoused the same plan as that circulated by V. Frank Coe. All of the specialized agencies strongly opposed this plan, and advocated a system of decentralized financing designed to strengthen and enlarge the technical-assistance programs which they were already conducting under the constitutional authority given them by their member governments to work in their respective technical fields.

Examination of Coe's notes will show how closely they resemble the U. N. central-fund plan which was eventually sponsored by the United States delegation to U. N.'s Economic and Social Council in July-August 1949, and finally adopted by ECOSOC over the continued opposition of the specialized agencies.

The following are excerpts from a paper circulated by V. Frank Coe on March 10, 1949, listing proposals on technical assistance program —

We are addressing ourselves to the memorandum in the form it is, because this is the memorandum we have received. I might point out that the three farm agencies, being semiofficial members of the FAO — that is, Food and Agriculture Organization, a specialized agency of the U. N. — can have access to documents which are not available to the congressional committee. They had access to the original of this document and they have made the notations that I have just read about it.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2881

In other words, they said :

Examination of Coe's notes, copy attached, will show how closely they resemble tlie U. N. central-fund plan which was eventually sponsored by the United States delegation to U. N.'s Economic and Social Council in July-August, 1949.

Now I give you this paper, Mr. Coe, and I notice it says here :

The following are excerpts from a paper circulated by V. Frank Coe on March 10, 1949, listing proposals on technical assistance program.

Do you recall that document ?

Mr. CoE. No, sir ; but I would like to explain with regard to this and other documents. I think it will be helpful to the committee.

As secretary of the fund, I must have circulated thousands of docu- ments of the Board of Directors, the staff, the governors. That, in fact, was my job, or one of my jobs, to circulate documents, to see that they got to the people who had to consider them, who had to decide what to do about it. I had, of course, similar functions during my period of Government employment.

Certainly, during the period when I was in the fund, most, perhaps 90 percent, perhaps 99 percent, of the documents were documents not prepared by me, but by others. If they represented my views, it would have been a mere coincidence in many cases. If they didn't represent my views, I had no discretion whatsoever about circulating them. I was told to circulate proper documents given me by authorized per- sons. That is what I did.

Therefore, first, the fact that these organizations say, in the letter to you, that my name was attached to a note circulating these documents has no meaning whatsoever, and I should think that would have been apparent to any person with commonsense.

Mr. Morris. Mr. Coe, you have just said you cannot recall this particular document.

Mr. CoE. May I complete my answer ?

It is a long one but it will take care of the matter.

Mr. Morris. We don't want irrelevant answers. We are wondering if you can recall this particular document ?

Mr. CoE. No, sir ; and my answer is. Why not?

This is now 7 years after. In the nature of the case, if you have a position where you circulate to scores of individuals hundreds and thousands of documents per year, it would be a miracle if you recalled any particular one, particularly one which is presented to you as an excerpt.

I have grave doubts — I should say I am sincerely disturbed that this kind of document is brought up and is presented here in excerpted and incomplete form. I am quite familiar with techniques which are made to suggest by irrelevant material. If the covering note were presented here, the status of this document would be clear. If the whole document were here, the status of this document would be clear.

May I interject to say that from a very brief perusal, I certainly would not think that it was any crime, or indeed anything of which I need be ashamed, to have circulated this document, even to have written it.

Mr. Morris. But the point is, Mr, Coe, we would like to know specifically whether (a) you wrote this document, or (&) whether you in fact circulated this document, and is it your answer that you can't recall ?

2882 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Mr. CoE, I cannot recall, but I think I can help the committee by saying that I have grave doubts that I wrote it. It appears to me from looking at it that it is not the kind of document that would have been in my competence or duties to write while I was in the fund.

It appears to me to be in the style of language which is quite differ- ent from my own.

Second, from sometliing which is said at the very beginning of the document, it suggests to me — "Attached ai'e some preliminary notes which might be laid before th^ Administrative Committee on Coor- dination at its meeting on the 18th of March."

Now, it is dangerous, I know, in view of some of the farfetched perjury trials that have been brought, to guess, but I would like to guess, in order to be helpful to the committee, that this, if it was ever circulated by me, was merely a document obtained from some other source, and circulated by me to inform the Board of Directors of the fund of what some other body, perhaps a staff or other body within the fund, perhaps some outside body, was proposing to bring up at a meeting where some of our people — that is the fund people — would be present and would have to take part in the discussion.

Mr. Morris. May I be specific ? Have you any recollection whatever about it?

Mr. CoE. I have no independent recollection whatever.

Mr. MoREis. You are not denying that you circulated this docu- ment ?

Mr. CoE. No, sir.

Mr. Morris. But you are saying that you do not believe you wrote this document ?

Mr. CoE. I don't believe I did.

Mr. Morris. Have you any knowledge where this document came from?

Mr. CoE. I have no knowledge where it came from.

Mr. Morris. Senator, the reason we asked Mr. Coe about this par- ticular document is that another document turned up, and this does not relate to Mr. Coe. This is dated March 21, 1949. I might say that, in connection with this last document which was circulated by Mr. Coe according to the only evidence before this committee, was, according to this very same paper, an expression of a stand which was against the stand taken by the International Monetary Fund at that time.

I would like to point out that there is another document here, an office memorandum to divisional directors, from the Acting Director General, on the subject of point 4 considerations dated March 21, 1949.

The Acting Director General of Food Agriculture Organization at that time was Sir Herbert Broadley, I believe his name was.

In examining this docmnent, Senator, which was distributed — and the distribution appears on this document — to 21 different sources, in the name of the Acting Director General

Mr. CoE. Of whom, may I ask ?

Mr. Morris. The Acting Director General of Food Agriculture Organization — an 18-paragraph letter.

Now Senator, the staff has gone over this. I would like to point out that paragraph 3 of the memorandum circulated by Mr. Coe reads :

• * * two continuing subcommittees of the Administrative Committee on Coor- dination may be required — an Operation Committee to supervise operations and

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2883

a suitable Finance Committee to attend to financial details. Both committees should consist of officials of U. N. and the specialized agencies of senior rank. The present working party might become the Operation Committee.

That paragraph is precisely the same, word for word, as paragraph 9 of the Sir Herbert Broadley recommendation.

Paragraph 4 of the Coe paper, that is a paper described here as having been circulated by Mr, Coe, was exactly word for word of paragraph 12 in the Sir Herbert Broadley document. Paragraph 5- is word for word the same as paragraph 13. Paragraph 6 is identical to paragraph 14. Paragraph 7 is exactly identical to paragraph 15., Paragi-aph 9 is identical to paragraph 16. Paragraph 10 is identical to paragraph 17.

Now, Mr. Coe, can you account in any way for how it is that the memorandum circulated by you on a subject in which you state a po- sition directly contrary to the position of the International Monetary Fund appears almost in toto in a memorandum circulated by the Act- ing Director General of the Food Agriculture Organization, at a time when the Food Agriculture Organization had a position directly con- trary to the position stated in your memorandum ?

Mr. CoE. May T say with all politeness, first, that on the facts, or alleged facts as you have described them, you now seem to me to be misrepresenting them.

Mr. Morris. You say I am misrepresenting them.

Mr. CoE. I say you seem.

Mr. ]MoRRis. How is that ?

Mr. CoE. I will now explain how.

First, I have yet to see the evidence from anybody. I have yet to see a direct statement by anybody that I even circulated this document. But it is quite conceivable that I did and I see no reason' to become alarmed about it.

Two, you said something to the effect that the position I stated in this document — I sincerely doubt that this document contains any words whatsoever written by me representing any position of mine — again I have explained the reasons.

Now what you

Mr. Morris. Didn't that represent your position ?

Mr. CoE. I don't laiow. I sincerely doubt that it does.

Mr, Morris, Your testimony is that you can't recall this document, isn't it?

Mr. CoE. That's right. What all of this seems to me to add up to is this —

Mr. Morris. I submit that Mr. Coe's observations at this time are completely irrelevant. If there are some facts you can add to this, Mr. Coe, you may

Mr. Friedman. I think he is trying to answer your questions in that formulation.

Mr. Morris. All right.

Mr. CoE. I am saying this because I don't want any sinister infer- ences drawn by you, the public or this committee, from what seems to me to be a perfectly normal Government operation. I doubt that any sensible person could draw such sinister inference from the facts as you have described them.

Mr. Morris. You see, there you go now.

2884 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Mr. CoE. You asked me why or how I account for the correspond- ence.

My supposition, sir, is that somebody outside the fund, some group,

or official body

Mr. Morris. Is this a supposition, or do you know this, Mr. Coe?

Mr. Coe. You asked me to account for the correspondence.

Mr. Morris. If you can.

Mr. CoE. Now, since I told you, to begin with, that I had no recol- lection of it whatsoever, obviously anything that I say is derived from my knowledge of fund operations and my answer is designed to dispel any fears you may have that my circulation, if I did circulate this document, was the result of some sinister conspiracy.

The correspondence undoubtedly or presumably comes from the fact that both documents came from a common source. You read into the record a letter in which Broadley of the Food Agriculture Organization circulates something. I don't know whether he es- pouses the views of what he circulates, but he circulates it. You state, without showing the evidence, that I circulated something remarkably similar.

JMr. Morris. We have stated the evidence, Mr. Coe.

Mr. CoE. Wouldn't the normal, reasonable conclusion be that some- body in his official capacity, some organization, sent me something, asked me to circulate it, that it Avas my duty to circulate it, that like- wise this was done with Mr. Broadley and that that happened.

Now, sir, again in a spirit of helpfulness, I think I can tell you how you can get to the bottom of this very quickly and from witnesses who are in a position to know the facts and who are not under the cloud of charges by this committee of having been spies.

Mr. Morris. Mr. Chairman, in that connection, I suggest that we ask the International Monetary Fund if we could have the original of which this is a copy.

Senator Jenner. The staff will be so ordered.

Mr. Morris. The only evidence we have is the evidence transmitted to us by the three farm organizations, and they have access to evidence not available to the subcommittee.

Senator Jenner. Direct the staff to make that request.

Mr. Coe. Judge Morris, you can probably get more information even than you are asking for, if you go through the channel that I understand was the one. There is a United States director for the fimd. I believe his name is Frank Southard. He is a United States official. He has access to all their documents. He could further, in case it turns out that I circulated this thing, further inquire there of the head of the fund whether, at the time this happened, it was per- fectly proper, indeed a duty of mine to circulate.

Senator Jenner. The staff will pursue as suggested.

Mr. Morris. I would like to call attention, before leaving that point, to the annotations made along the side, again by the three farm organi- zations, which shows that the recommendations of Mr. Coe's

Mr. Coe. Judge Morris. Please don't keep putting in the record something that says that these are my recommendations,

Mr. Morris. A paper which has been described as a paper circulated by Mr. Coe are, in fact, being practiced today, have been endorsed and are now in practice today with the various descriptions that appear in the marginal notes therein.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2885

Senator Jenner. I suggest that tlie entire document referred to be incorporated into the record and be a part of the record. Mr. Morris. For instance it says here opposite paragraph 3 :

Now exists as Technical Assistance Board (TAB).

And it says opposite paragraph 4 :

Now exists as Technical Assistance Committee (TAG).

Mr. CoE. I can only observe that how this makes me out a spy is beyond me.

Mr. Morris, There is no question like that pending.

Senator Jenner. This will go into the record.

(The document referred to was marked "Exhibit No. 303" and reads

as follows:

Exhibit No. 303

[Emphasis and numbered footnotes on this and following exhibits, together with all captions therein, were supplied by the representatives of the three farm organizations who furnished the material to the subcommittee.]

V. FRANK COE

The New York Times of December 4, 1952, reported: "The International Monetary Fund announced today (December 3, 1952) the dismissal of its secretary, Frank Coe, who refused last Monday to tell Senate investigators in New York whether he was now or had ever been a Communist or subversive agent taking orders from Communists."

In the same story, the New York Times also said : "As secretary of the agency (International Monetary Fund) from its inception, Mr. Coe participated in all meetings of its Board of Governors or Directors."

It was in these meetings of the IMF Board of Governors that instructions were formulated on the position to be taken by the representatitve of the Inter- national Monetary Fund in negotiations which were held between March and June 1949, with U. N. and other specialized agencies on the subject of an ex- panded technical assistance program. The position <>f the International Mone- tary Fund throughout these negotiations was to oppose establishment of a central fund under U. N. control to finance the proposed expanded program.

So firmly opposed was the International Monetary Fund to central financing (and the program control which inevitably follows) that when the central fund was established under U. N. administration, the IMF refused to participate in the U. N. expanded technical assistance program, beyond sending observers to meetings. It has never accepted money from the U. N. fund.

While it is certain that V. Frank Coe knew the position of his own agency regarding a central fund under U. N. control, records have been turned up which reveal that, as early as March 10, 1949, he circulated notes on a plan which par- allels the central-fund operation of the present U. N. expanded technical assis- tance program (which was not adopted by U. N.'s Economic and Social Council until August 1949).

Throughout the period of negotiations among the international agencies on the expanded technical assistance proposal (March-May 1949), David Weintraub was the spokesman for U. N., and espoused the same plan as that circulated by V. Frank Coe. All of the specialized agencies strongly opposed this plan, and advocated a system of decentralized financing designed to strengthen and enlarge the technical assistance programs which they were already con- ducting under the constitutional authority given them by their member gov- ernments to work in their respective technical fields.

Examination of Coe's notes (copy attached) will show how closely they resemble the U. N. central-fund plan which was eventually sponsored by the United States delegation to U. N.'s Economic and Social Council in July- August 1949, and finally adopted by ECOSOC over the continued opposition of the spe- cialized agencies.

The following are excerpts from a paper circulated by V. Frank Coe on March 10, 1949, listing proposals on technical assistance program (marginal notes are printe<l here as footnotes) :

2886 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

"Technical Cooperation Towards Economic Development

"suggestions for procedure

"7. Attached are some preliminary notes wliich might be laid before the Administrative Committee on Coordination at its meeting on IS March when it discusses the whole question, or alternatively presented to the Working Party at its opening meeting.

"Preliminary Notes for Consideration by the Administrative Committee on

Coordination or the Working Party

"3. * * * two continuing Subcommittees of the Administrative Committee on Coordination may be required — an Operation Committee to supervise operations and a suitable Finance Committee to attend to financial details.^ Both com- mittees should consist of officials of U. N. and the Specialized Agencies of senior I'ank. The present Working Party might become the Operation Committee.

"4. It will probably be necessary to envisage a Government Committee con- sisting of representatives of the Government which contribute" substantial amounts to the Operational Fund. This Committee should report to the General Assembly through ECOSOC. It should not attempt to examine the details of particidar schemes, but should adjudicate on broad programs submitted to it annually through the ACC from the Operations Committee. It should also receive and deliberate on annual reports from the same Committee on each year's progress. (An alternative to this suggestion would be for ACC to assume the functions proposed for the Government Committee proposed in paragraph c (c. ways of coordinating the planning and execution of the programme) and to report directly to ECOSOC.

"5. The Operational Fund should be a single fund,^ even though it might comprise various currencies. The annual programs should be financed by ovei'all grants, not particular sums from particular contributors for expenditures on particular projects in specified countries. The Operation Committee would make the appropriate simis available to the different bodies and Agencies for expendi- ture on the share of activity which each undertook in the specific or comple- mentary projects.

"6. It would be contemplated that certain Governments would continue to make funds available on a bilateral basis for development activities in countries in which they had a special interest. These activities should be related to in- ternational activities operated through U. N. and the Specialized Agencies and effective liaison would have to be established to ensure that the benefits accruing from bilateral activities were available for use or adaptation in international schemes. It will be necessary for the Operational Committee to be informed of bilateral activities, as it will be necessary for the Committee to be aware of them in planning the U. N. development schemes.

"7. It will also be necessary for the Operation Committee to be fully infoi-med of the technical activities of the U. N. and Specialized Agencies in fields outside (but related to) those planned for financing from, the Operational Fund.* Such outside projects may have considerable bearing on the development schemes themselves.

"8. In framing schemes of development it will be desirable for the Operation Committee to prepare them on broad functional bases rather than in relation to the field of activity of each Agency.

"9. The Governing Bodies (or Annual Conferences) of the various Specialized Agencies will take note of the scope or nature of programs of development pre- pared by the Operation Committee and approved in principle by the Committee of Contributing Governments. Operation Committee will, however, be guided by general principles which the Conferences of the Specialized Agencies may lay down on the subject of development and the Conferences will necessarily be responsible for seeing that their Agencies carry out development projects as efficiently as possible.

"10. In allocating sums to U. N. or Specialized Agencies for development proj- ects, alloicance loould have to be made for the general increase in operational

1 Now exists as Technical Assistance Board (TAB).

* Now exists as Technical Assistance Committee (TAG).

3 Now exists as U. N. "Special Account" — or Central Fund — for expanded technical assistance program.

* Bid to ln-injr regular programs under supervision of central authority. Eventually accomplished by USSR res. in ECOSOC, July 1949.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2887

and overhead costs tvhich ivotild he involved. FrohaUy some 20% additional sums would he required to cover this. Such continyenci/ could be covered by part of the Operational Fund being allocated to increase regular budgets and part for specific projects.''

"12. The report of the Workins Party must embody specific projects to be undertaken in the first year or two. The whole problem of development is a long-term one, partly because projects will gradually expand to full effectiveness, and partly because continuing commitments must be entered into. Therefore a 10-year program should be envisaged. Such program must itself develop and change. It cannot be worked out in detail in advance. Its supervision and development will be a matter for Operation Committee.

"13. Initial steps of a 10-years' scheme will be the assessment of resources and the preparation by underdeveloped countries (with technical assistance) of for- ward plans and programs. It will be in the carrying out of these plans that tech- nical assistance aid will be given and ultimately capital investment needed. * * *

"14. Nevertheless, even in the early period of assessment and planning, certain technical activities can be undertaken — eliminating human, animal, and crop diseases, introducing mcw strains of animals and crops.^ There are many fields of development where technical aid alone will be sufficient to produce results and little or no capital investment required.

"16. It will be necessary for the Working Party to present a budget and an allocation of financial expenditure on the various items for the first year. There- after this will be the responsibility of the Operation Committee and its Finance Committee. * * *

"17. Administrative Committee on Coordination must delegate to Operation Committee responsibility for recommending projects and priorities for implemen- tation, including the rejection of unsuitable projects^ Priorities will vary from time to time and from country to country. Flexibility of operation must be maintained. * * *

[Excerpt from article "Soviet Spy Rings Inside U. S. Government," U. S. News & World

Report]

Virginius Frank Coe

The Berle memorandum of 1939 contains the names of Frank Coe and his brother Charles (Bob) Coe. In 194S Miss Bentley publicly brought forth in testi- mony that Frank Coe was a member of her espionage ring. Yet, when the sub- committee subpenaed Coe in December 1952, he held the position of secretary of the international Monetary Fund at $20,000 a year.s

Virginius FrarLk Coe first worked for the United States Government in 1934. Since then he has held positions in Federal Security Administration, the National Advisory Defense Council, Monetary Research Division of the Ti-easury Depart- ment (Assistant Director and Director), Joint War Production Committee of the United States and Canada (executive secretary). Board of Economic Warfare (assistant to the Executive Director), Foreign Economic Administration (Assist- ant Administrator). He was the technical secretary of the Bretton Woods Monetary Conference in 1944 when the articles of agreement were drafted setting up the International Monetary Fund. The International Monetary Fund handles assets of between $7 and $8 billion and it is a specialized agency of the United Nations.

Coe refused to answer, on the ground that the answers might incriminate him, all questions as to whether he was a Communist," whether he had engaged in subversive activities, or whether he was presently a member of a Soviet espionage ring. He refused for the same reason to say whether he was a member of an espionage ring while technical secretary of the Bretton Woods Conference, whether he ever had had access to confidential Government information or security information, whether he had been associated with the Institute of Pacific Relations, or with individuals named on a long list of people associated with the organization. It was noted that he did answer questions as to his relationship

' Budget involvement of regular work of agencies tlirough contribution from Special Technical Assistance Fund.

8 Had been done by FAO for previous 3i^ years.

^ Now done by TAB executive cliairman.

** Hearing before tlie Subcommittee on Activities of United States Citizens Employed by the United Nations, pp. 227-256.

" In 1948 he denied Communist Party membership.

72723— 57— pt. 42 2

2888 SCOPE OF SOVIET ACTIVITY IN THE XJNITED STATES

with Jacob Viner, Milo Perkins, Leo Crowley, and Evar Rootli but refused to answer questions with respect to his relationship with Harry Dexter White, Alger Hiss, Philip C. Jessup, Solomon Adler, Lauchlin Currie, INIichael Greenberg, Constautine Oumansky, and a long list of others. He testified as to how he got his first Government employment, but refused to say how he obtained his subse- quent positions. Coe was dismissed by the International Monetary Fund a few days after his testimony on December 3, 1952.

March 21, 1949. Office Memobandum To : Divisional Directors.

From : Acting Director-General [initialed HB 21/5] Subject : Point 4 Considerations

At the meeting held at Lake Success on March 18 it was agreed to set up a working party to make recommendations regarding the ECOSOG resolution. The working party will meet formally at Lake Success on April 4. It will be preceded by informal discussions in Washington by those members of the working party who are able to attend.

I attach for the information of Directors a memorandum which has teen prepared in FAO ^ setting out a number of considerations to be examined by the working party.

In the meantime, the memorandum on an operational program prepared in FAO will be revised by Mr. McDougall, Mr. Gove Hambidge, and Mr. Olsen in consultation with the members of the divisions who have made suggestions on the original draft document.

Technical Cooperation Toward Economic Development

suggestions fob procedure

1. The United States resolution calls upon the ACC to prepare a report. Such a rei)ort can only be prepared by a special working party on which the interested divisions of the U. N. and the specialized agencies primarily concerned are rep- resented. Other international interests would probably be entitled to present their views to the working party and later express them on the ACC.

2. The working party will report to the ACC of which the Secretary-General of U. N. is chairman. It would be an advantage if the chairman of the working party is provided from one of the specialized agencies, or was possibly obtained from an independent source.

3. In that the Bank, Fund, FAO and the United States Government (with whom consultation will probably be necessary) are located in Washington, it would be advisable for the working party to operate in Washington, or at least start work in that city.

4. In that the working party will be concerned with issues of paramount im- portance, its membership should consist of senior oflBcials of the U. N. and spe- cialized agencies. The U. N. and each agency should each appoint two repre- sentatives— a senior official to deal with policy issues and one less senior to act in a secretarial capacity.

5. The senior members would meet from time to time to discuss and determine main issues. The secretarial inemhers ivould be in constant session and would constitute the secretariat of the working party. They would prepare papers required for consideration by the senior members and would be responsible for assembling material required for the report. In this way the secretariat would not be provided by any one organization.

6. The work of the party would probably occupy 4 to 6 weeks. It should start work as soon as possible — not later than March 28. The senior members would participate for the opening sessions of 2 or 3 days and then meet fre- quently as required. The secretarial representatives from each organization would keep in close touch with their senior (policy) members.

Preliminaey Notes fob Consideration by the Working Party*

1. The report should be prefaced by an introduction outlining the scope of the problem, the nature of the development contemplated, its objectives and the

1 See V. Frank Coe Ktatement of March 10. 1949.

* Note Bimilarity to V. Frank Coe statement circulated on March 10, 1949 (copy attached).

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2889

necessary internal conditions to insure that development measures are fully effective.

2. The working party must prepare an initial plan, with the necessary financial estimates for the first year, and also devise the appropriate machinery for allo- cating the available financial resources to the various parts of the program and for continuing supervision, development, and review of a long-term scheme.

3. In framing schemes of development it will be desirable for the working party to prepare them on broad functional bases rather than in relation to the field of activity of each agency. The same principle must be maintained in the operations of such continuing machinery as may be established.

4. In preparing a comprehensive program, the working party will require detailed plans from all agencies. FAO can cover food, agriculture, fisheries, forestry ; WHO, health projects ; ILO, questions of manpower and labor supply ; UNESCO, educational projects. No agency covers the fields of industry and transport. These are matters in which the Bank, the Economic Division of U. N. and ITO (IC) are all concerned.

5. The report of the working party must embody specific projects to be under- taken in the first year or two. The whole problem of development is a long-term one, partly because projects will gradually expand to full effectiveness, and I)artly because continuing commitments must be entered into. Therefore a 10- year program should be envisaged. Such a program must itself develop and change. It cannot be woi'ked out in detail in advance. Its supervision and development will be a matter for the continuing machinei'y.

6. The initial steps of a 10 years' scheme will be the assessment of resources and the preparation by underdeveloped countries (with technical assistance) of forward plans and programs. It will be in the carrying out of these plans that technical aid will be given and ultimately capital investment needed, as envis- aged in paragraph (18).

7. Nevertheless, even in the early period of assessment and planning, certain technical activities can be undertaken — eliminating human, animal, and crop diseases, introducing new strains of animals and crops. There are many fields of development where technical aid alone will be sufficient to produce results and little or no capital investment required.*

8. Early attention must be given to the provision and training of technicians. In this connection the enlistment of the active interest of the great universities and technical institutions would be of first-class importance. Fellowships and other methods of supplying new experts in many fields must be an early project.

9. Two continuing subcommittees of the ACC may be required — an Operations Committee to supervise operations and a suitable Finance Committee to attend to financial details. Both committees should consist of officials of U. N. and the Specialized Agencies of senior rank. The present working party might become the Operations Committee. The secretariat required for servicing the Operations Committee and finance committees of ACC should be provided jointly by the U. N. and participating Agencies, and should be located at the place most convenient for contact with the operating bodies (possibly Washington). The secretariat might be constituted by each agency or other participant providing two mem- bers— a senior policy member and a secretarial assistant.

10. It will be necessary for the working party to present a budget and an allocation of financial expenditure on the various items for the first year. There- after this will be the responsibility of the Operations Committee, and its Finance Committee. Expenditure during the early years will be less than during later years and it may be possible to allocate part of the appropriations for the early years to demonstrational undertakings and pilot plants for which commitments might be entered into during the first year or two, but expenditure not actually incurred until later.

11. ACC must delegate to Operations Committee responsibility for recommend- ing projects and priorities for implementation, including the rejection of un- suitable projects. Priorities will vary from time to time and from country to country. Flexibility of oi)eration must be maintained. Grants will be made to overall projects in which several agencies may be carrying out complementary activities — but each agency will be responsible for its aspect of the project and for the expenditure on that aspect. Once an agency has been charged with responsibility for some work there will be no detailed control or interference, except on the basis of recommendations made on the annual report. Each agency

* These are from Coe statement of March 10, 1949.

2890 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

will recruit and direct its own technical personnel, in all fields of work which are the responsibility of that agency.

12. It will probably be necessary to envisage a government committee consisting of representatives of the governments which contribute substantial amounts to the operational fund. This Committee might report to the General Assembly, perhaps through ECOSOC. It should not attempt to examine the details of particular schemes, but should adjudicate on broad programs submitted to it annually through the ACC from the Operations Committee. It should also receive and deliberate on annual reports from the same Committee on each year's progress. (An alternative to this suggestion would be for ACC to assume the functions proposed for the Government committee proposed in paragraph 3 and to report directly to P]COSOC.)

13. The operational fund should be a single fund, even though it might comprise various currencies. The annual programs should be financed by overall grants, not particular sums from particular contributors for expenditure on particular projects in specified countries. The Operations Committee would make the ap- propriate sums available to the different bodies and Agencies for expenditure on the share of activity which each undertook in the specific or complementary projects.

14. It would be contemplated that certain governments would continue to make funds available on a bilateral basis for development activities in countries in which they had a special interest. These activities should be related to inter- national activities operated through U. N. and the Specialized Agencies and effective liaison would have to be established to ensure that the benefits accruing from bilateral activities were available for use or adaptation in international schemes. It will be necessary for the Operations Committee to be informed of bilateral activities, as it will be necessary for the Committee to be aware of them in planning the U. N. development schemes.

15. It will also be necessary for the Operations Committee to be fully In- formed of the technical activities of the U. N. and Specialized Agencies in fields outside (but related to) those planned for fluaucing from the operational fund. Such projects may have considerable bearing on the development schemes them- selves.

16. The governing bodies (or annual conferences) of the various Specialized Agencies will take note of the scope or nature of programs of development pre- pared by the Operations Committee and approved in principle by the Committee of Contributing Governments, if that is established. Operations Committee will, however, be guided by general principles which the conferences of the Specialized Agencies may lay down on the subject of development and the conferences will necessarily be responsible for seeing that their agencies carry out development projects as efficiently as possible.

17. In allocating sums to U. N. or Specialized Agencies for development projects, allowance would have to be made for the general increase in operational and overhead costs which would be involved. Probably some 20-percent additional sums would be required to cover this. Such a contingency could be covered by part of the operational fund being allocated to increase regular budgets and part for specific projects.

18. Ultimately the technical aid provided will lead to extended developments for which capital investment will be required. In planning development projects regard should therefore be had to resources available from :

i. The special operational fund,

il. The resources of the International Bank,

iii. Capital available from Governments or private sources.

[Copy of an interoffice memorandum sent by an ofl[icial of an international organization to the officer who was representing still another international organ- ization in negotiations then in progress on establishing the U. N. expanded techni- cal assistance program.]

April 5, 1949.

To: .

From : .

Subject : Point 4 — United States position and central budget.

I had lunch yesterday with , of the State Department, for the pur- pose of emphasizing our views on point 4 organization, particularly with regard- to financing.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2891 After arguing in favor of a central budget for most of the time,

finally said to me, in effect, "You are beating a dead horse, the United States will not accept a central budget for three reasons:

(1) There is a general distrust of some of the U. N. personalities involved, particularly Weintraub.

(2) The pressure from those United States Government departments having direct relationships with certain Specialized Agencies (Agriculture — FAO, Public Health— WHO, CAA — ICAO, Treasury— Bank and Fund) will tend to counterbalance the single budget ideas in State and Bureau of the Budget.

(3) There is a growing distrust of the idea of setting up a budget to

which the United States will contribute 60 to 70 percent and which will

control activities indistinguishable in general from those of agencies to which

the United States contributes only 30 to 40 percent.

This argument is, to me at least, a new one, but might well be borne in mind

in connection with organizing future discussions on this subject.

Mr. Morris. I would like to put into the record, too, a paper from the farm organizations, speaking with the authority that is in the cov- ering letter, a paper which shows the position of the Communist na- tions on centralization of technical assistance authority in the United Nations.

I will just sketch this out. Senator. The thing is a full paper, run- ning approximately 20 or 30 pages.

From ECOSOC document, the summary record of the 57th meeting: Mr. Ras- sadin (Union of Soviet Socialist Republics) recalled and stressed his Govern- ment's attitude toward the use of the technical assistance funds. The special fund, established by contributions from member states, should be used directly by the United Nations and not through the specialized agencies.

From records of the 9th Session of the Economic and Social Council, July- August 1949 — on agenda item of proposed expanded technical assistance pro- gram :

Mr. Katz-Suchy (Poland) : The (U. N. Economic and Social) Council should assume direct responsibility for working out the plans, and for formulating the policy and coordinating the activities of the regional commissions and specialized agencies active in the field of economic development and technical assist- ance * * * the (Economic and Social) Council itself, or a special body set up by it, should determine priority needs in development schemes. There should be a central fund under supervision of the Council, since any other method would encourage the introduction of unhealthy political factors.

There are in that paper several other indications, in fact many other indications, that the position taken in the paper circulated by Mr. Coe, which again was reflected in the paper circulated by Sir Herbert Broadley, that that position was identical to the position of the Union of Soviet Socialist Republics for the Technical Assistance Committee and the attitude of Mr. Katz-Suchy of Poland.

Senator Jenner. The entire document will go into the record and become a part of the official record for this committee.

Mr. Morris. Before putting it into the record, I would like to point out that there is a notation here that at this time, earlier and up to this time — third page:

The most complete picture of what the United States had in mind in 1943 ap- pears in President Roosevelt's speech at the close of the Food and Agriculture Conference (June 7, 1943).

It should be noted that, in the above presidential statement, there is no infer- ence that the political problem would call for a centralized or supervisory posi- tion in the future structure of international relationships. In fact, the state- ment is clear that political relationships are equally important (and inter- dependent) with other problems facing nations in economic and social fields.

There is in that paper, too, a statement of Willard L. Thorp, United States representative in the Economic and Social Council, Ninth Ses-

2892 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

sion, Geneva, July 21, 1949, on the proposed expanded technical assist- ance program. That is the time subsequent to the circularization of this paper. There is a statement of our position, which I will read.

There are several different possible methods of financing the programs. They are closely related to the manner in which the programs are themselves deter- mined. If there were to be some single agency, either the United Nations or a new agency, which was to make program decisions from time to time and allocate funds to the appropriate agencies, then a single fund would presumably be established. If, at the other extreme, the specialized agencies were to have complete responsibility in determining their programs, other than mutual con- sultation, completely separate budgets would be the proper form of financing.

The method of developing the programs which I have suggested provides for a determination of allocations of various levels of contributions through review of ECOSOC (the U. N.'s Economic and Social Council) of the proposals of the participating agencies, and subsequent approval by the General Assembly » * *. If the ECOSOC should adopt the programing procedure which I have suggested, then the appropriate procedure for financing would need to be somewhat differ- ent from that suggested in the Secretary-General's report (which called for decentralized financing).

That statement seems to indicate, Senator, that our position was between what he describes as two extremes. I would like that whole thing to go into the record.

Senator Jenner. It will go in and become part of the record.

(The document referred to was marked "Exhibit No. 304" and is as follows:)

Exhibit No. 304

POSITION OF COMMUNIST NATIONS ON CENTRALIZATION OF TECHNICAL ASSISTANCE AUTHORITY IN THE U. N.

From ECOSOC document E/TAC/SR.57— December 9, 1953— 16th Session, Technical Assistance Committee — Summary Record of the 57th Meeting :

"Mr. Rassadin (Union of Soviet Socialist Republics) recalled and stressed his Government's attitude towards the use of the (technical assistance) funds. The Special Fund, established by contributions from member states, should be used directly by the United Nations and not through the specialized agencies."

From records of the 9th Session of the Economic and Social Council, July- August 1949 — on agenda item of proposed expanded technical assistance pro- gram :

"Mr. Katz-Suchy (Poland). The (U. N. Economic and Social) Council should assume direct responsibility for working out the plans, and for formulating the policy and co-ordinating the activities of the regional commissions and special- ized agencies active in the field of economic development and technical assist- ance * * * the (Economic and Social Council itself, or a special body set up by it, should determine priority needs in development schemes. There should be a central fund under supervision of the Council, since any other method would encourage the introduction of unhealthy political factors.''

ORIGINAL UNITED STATES POSITION ON CENTRALIZATION OF ECONOMIC AND SOCIAL AFFAIRS IN THE UNITED NATIONS

UNITED STATES FAVORED SPECIALIZED AGENCIES

By the time of the Moscow Declaration, however. United States thinking wag becoming clear in the matter of creating a series of specialized international organizations to deal with postwar problems.

A 44-nation conference had been sponsored by the United States 6 months before the 1943 Moscow meeting, to explore means of continuing the collabora- tion of the wartime allies in food and agriculture. Under United States leader- ship, the conference had recommended that a permanent internati( nal organi- zation be established to work in these fields.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2893

An Interim Commission on Food and Agriculture was formed in Washington, D. C, to draft a constitution and lay out the structure for the future Food and Agriculture Organization (FAO). This body had been at worls for more than 3 months when the Big Four meeting in Moscow announced the intention to create an organization "for the maintenance of international peace and security."

OTHER ORGANIZATIONS PLANNED

Tliere is aniplv? evidence that the United States Government expected other international conferences to be held, similar to the one on food and agriculture, and aimed at establishing permanent international organizations to work in other technical (or specialized) fields. For example, the invitation sent by the United States to ask governments to attend the Conference on Food and Agriculture (dated March 30, 1943) opens with the statement:

"The Government of the United States of America is of the opinion that it is desirable now for the United Nations and those nations which are associated with them in this war to begin joint consideration of the basic economic problems with which they and the world will be confronted after complete military vic- tory shall have been attained. Accordingly, and as a first step in this direction, the' Government of the United States proposes to convene * * * a conference on food and other essential agricultural products, and hereby invites * * *."

President Roosevelt, in his opening message to the delegates of the Food and Agiiculture Conference (May 17, 1943), also said:

"In this and other United Nations conferences, we shall be extending our collaboration from war problems into important new fields * * *."

Judge Marvin Jones, United States War Food Administrator and Chairman of the Food and Agriculture Conference, said in his opening address (May 18, 1943) :

"I greet and welcome you to this the first conference of the United Nations and Associated Nations * * * reflects a genuine desire on the part of all free peoples for a better understanding of our common problems and a united ap- proach to their solution. * * * This conference has rightfully been referred to as a forerunner of otlier conferences which unquestionably will have a part in shaping the postwar world * * *."

WHTAT UNITED STATES HAD IN MIND IN 1943

The most complete picture of what the United States had in mind in 1943 appears in President Roosevelt's speech at the close of the Food and Agriculture Conference (June 7, 1943) :

"* * * our goal in this field cannot be attained without forward action in other fields as well. Increased food production must be accompanied by increased industrial production and by increased purchasing power. There must be measures for dealing with trade barriers, international exchange stability and international investment. The better use of natural and human resources must be assured to improve the living standard ; and, may I add, the better use of these resources without exploitation on the part of any nation. Many of these questions lie outside the scope of the work you have undertaken, but their solu- tion is nonetheless essential to its success. They require, and shall receive, our united attention.

"In the political field, these relationships are equally important. And they work both ways. A sound world agi-icultural program will depend upon world political security, while that security will in turn be greatly strengthened if each country can be assured of the food it needs. Freedom from want and freedom from fear go hand in hand."

It should be noted that in the above Presidential statement there is no in- ference that the political problem would call for a centralized or supervisory position in the future structure of international relationships. In fact, the statement is clear that political relationships are equally important (and inter- dependent) with other problems facing nations in economic and social fields.

BUSSIAN OPPOSITION CAME LATER

Russian opposition to United States ideas did not crystallize until some months after the Moscow Declaration, when the full import of what was proposed be- gan to be clear to them from the constitution which was evolving in the Interim Commission of FAO. Then, they objected vigorously to any arrangement which

2894 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

would permit technical ministries of governments to work with each other directly.

The Russians insisted that all relationships among governments must be under strict political control, and they tried to prevail upon other governments I'epre- sented in the FAO Interim Commission to agree to place all of the technical organizations then being planned under the sui)ervision of an international politi- cal authority.

The extent to which the United States had adopted the separate-agency idea is indicated by the fact that prior to Dumbarton Oaks, the United States Gov- ernment had initiated conferences to consider setting up autonomous inter- national organizations in seven different fields, as follows :

May 18-June 3. 1043 : Food and Agriculture — 44 nations met at Hot Springs, Va.

October 30, 1943 : Maintenance of International Peace and Security — Big Four (U. S. A., U. K., U. S. S. R., and China) met at Moscow.

November 9, 1943 : Aid and Relief to Liberated Areas — 44 nations met in Wash- ington, D. C, to sign UNRRA Agreement.

April 19, 1944 : Education — Conference of Allied Ministers of Education and a United States Education Delegation accepted a draft constitution to be sub- mitted to governments for a permanent organization.

April 20-May 12, 1944: Labor — 40 nations met in 26th session of the Inter- national Labor Conference, at Philadelphia, to adopt "Philadelphia Charter," declaring international responsibilities for attention to postwar labor problems.

July 1-22, 1944 : Stabilization of currencies — loans for rehabilitation or indus- trialization— 44 nations met at Bretton Woods, N. H., to draw up articles of agreement for International Monetary Fund and International Bank.

As soon as Alger Hiss attained a position where he could influence State De- partment policies regarding international organizations, he moved rapidly to neutralize the results of the international conferences which had been held before he * * * (Remainder of paragraph not furnished.)

UNITED STATES POSITION ON CENTRALIZATION OF AUTHORITY IN U. N. WHEN EXPANDED TECHNICAL ASSISTANCE PROGRAM WAS BEING ESTABLISHED

Excerpts from the statement of Willard L. Thorp, United States Representative in Economic and Social Council, ninth session, Geneva, July 21, 1949, on the pro- posed expanded technical assistance program :

"* * * The United States suggests that this Council (the U. N. Economic and Social Council) should determine the basic elements in a balanced program for recommendation in the General Assembly * * * The Council should judge the program put forward in the report (from the specialized agencies) on the basis of their contribution to effective economic development. It should determine in a $15 million program, for example, how much it is prepared to recommend for agriculture, how much for health, how much for education * * *

"* * * the nature of the program, its priorities and emphasis, would be clearly formulated at this meeting (of ECOSOC) * * *

"The second problem relates to the method of establishing and collecting con- tributions for this program.

"The Secretary-General's report (prepared by the specialized agencies and U. N. in a joint working party) presents the consensus among the participating agencies that each agency would approach its membership separately, asking for sufficient funds in a supplemental budget to undertake their technical assist- ance activities * * *

"There are several different possible methods of financing the programs. They are closely related to the manner in which the programs are themselves deter- mined. If there were to be some single agency, either the United Nations or a new agency, which was to make program decisions from time to time and allocate funds to the appropriate agencies, then a single fund would presumably be established. If, at the other extreme, the specialized agencies were to have complete responsibility in determining their programs, other tlian mutual con- sultation, completely separate budgets would be the proper form of financing.

"The method of developing the programs which I have suggested provides for a determination of allocations of various levels of contributions through review by ECOSOC (the U. N.'s Economic and Social Council) of the proposals of the participating agencies, and subsequent approval by the General Assembly * * * If the ECOSOC should adopt the programing procedure which I have suggested,

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2895

then the appropriate procedure for financing would need to be somewhat different from that suggested in the Secretarj^-General's report" (which called for decen- tralized tinancing).

THE SPECIALIZED AGENCIES' POSITION ON CENTRALIZATION OF

TECHNICAL ASSISTANCE AUTHORITY IN U. N.

From the working party of the United Nations and specialized agencies on proposals for an expanded technical assistance program — submitted to the Economic and Social Council, May 20, 1949 :

"chapter 6 — FINANCE

"(1) Each oi-ganization, which considered it necessary, would establish a special budget for technical assistance for economic development and would invite its member governments to make contributions to this budget over and above their contributions to its normal budget."

U. N.'S POSITION ON CENTRALIZATION OF AUTHORITY OVER EXPANDED TECHNICAL ASSISTANCE PROGRAM

[Excerpt from article, "Technical Assistance for Economic Development — Outline of New Program," in United Nations Bulletin, June 15, 1949]

In connection with the financing of the expanded cooperative program, various methods were examined and preferences for different methods expressed.

It was — and remains — tJie vieto of the Secretary-Geiieral that in the interest of coordinated, action the most appropriate ivay of financing the program would he through the establishment of a single common fund into ivhich all special contrihiitions from govciiiments would be paid and out of which allocations tvould be made to the several international organizations to meet, subject to such broad policies as might be laid down by the Economic and Social Council and the General Assembly, the varying needs of governments for technical assistance as they arose. The majority of his colleagues from the specialized agencies were not able to subscribe to this position. They and he felt strongly, however, that the Council would wish that, in the preparation of the report requested from him, every effort should be made to reach agreed proposals. Accordingly agreement was reached on the following compromise :

Each specialized agency, which considered it necessary, would establish a special budget for technical assistance for economic development and would Invite its member governments to make contrilnifions to this budget over and above their contributions to its normal budget.

As for the United Nations, its special technical assistance budget would be in two parts, covering respectively (i) a program of technical assistance to be carried out by the United Nations itself; and (ii) a supplementary fund to be used by the Secretary-General in consultation with the Administrative Com- mittee on Coordination to finance technical assistance projects to be carried out jointly by the participating organizations, and to supplement the technical assistance budgets of these organizations when additional funds are required to facilitate the execution of essential projects.

In discussing the proposed program of technical assistance (9th Session of the Economic and Social Council, July-August 1949).

Mr. Katz-Suchy, of Poland, said:

''The {U. N. Economic and Social) Council should assume direct responsi- bility for working out the plans, and for formulating the policy and coordinating the activities of the regional commissions and specialized agencies active in the field of economic develoinnent and technical assistance * * * the {Economic and Social) Council itself, or a special body set up by it, should determine priority needs in development schemes. There should be a central fund U7ider the supervision of the Council, since any other method loould encourage the introduction of unhealthy political factors." — U. N. Bulletin, September 1, 1949.

Mr. CoE. Since yon have agreed to place this lon<^ document, which I have never seen, into the record of my hearing, I must presume or

2896 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

can anticipate that it is designed not to enhance my reputation in some way and I would like to object to the procedure for the following reasons.

Mr. Morris. Mr. Coe

Mr. CoE. May I finish my objection, please, sir? I listened while you read a long document. You asked me no questions about it.

Mr. Morris. There is no question now about it. I have listened to you, sir, time and time again, that we have been imputing to you some particular activity. I would like the record to show that as far as I am concerned there has been no imputation whatever. I think whatever inferences have been drawn by anybody has been as the result of your own behavior before this committee, Mr. Coe, and don't think anybody in this committee or otherwise has made accusations against you,

Mr. CoE. I think you called me a spy publicly and circulated docu- ments all over the Nation about me. It was circulated as a document of Eepublican campaign literature. So I think my fears of infer- ences are justified.

I would like to say that I feel I am being smeared here. It is being said or implied — an unaware reader might get the impression that Coe circulated a document once — even though the evidence isn't here that I did — advocating the channeling of aid through the United Nations. Katz-Suchy, it said, advocated that. He is a Communist. Coe is an alleged spy. Many reputable people, as you know, are today advocating that. That report is an implication that the channeling of aid through the United Nations is some peculiar Communist plot.

I wish to state in the record here that the evidence for that, so far as it concerns me, seems to be totally nonexistent.

Mr. Morris. I would like here to introduce the next paper, again from the source described, which reads in part :

In the middle of 1952, the Technical Assistance Committee (TAG) reviewed the methods of operations of the TAB and recommended to the ECOSOC a num- ber of changes in the basic resolution (establishing the U. N. Expanded As- sistance Program — 222 (IX)). The Economic and Social Council at its 14th session accepted these changes, which provided for the appointment of an Ex- ecutive Chairman and a modification in the function and responsibilities of the Board. The Executive Chairman was given the task of reviewing all program proposals, either premliminary or final, with a view to developing balanced country programs, and he was to make such recommendations to the Board on all programs as he saw it. The Chairman was also to exercise continuous supervision of the program, and to ensure that all the Board's activities were adequately coordinated. And finally, special emphasis was placed on the role of the Resident Representatives.

Now, according to the papers presented to the committee for our scrutiny and adjudication, there is a notation here that David Wein- traub was slated to get this job, but resigned under fire of Senate Internal Security Subcommittee before assuming it. David Owen later took it.

Do you have any knowledge whether David Weintraub was to as- sume that position in 1952, Mr. Coe?

Mr. CoE. I certainly do not.

In 1952? I have no recollection of the matter whatsoever.

Mr. Friedman. May I address the chairman? There are some documents being put into the record and copies being given to the press. But apparently there is no copy for me.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2897

Mr. Morris. They don't relate directly to the witness here.

Mr. Friedman. It is part of his hearing and I think I should have them.

Mr. Morris. It is not his hearing. It is an analysis to find if there is anything to support a conclusion on the basis of transmittal of these'jpapers from the three farm organizations, representing as they do, official documents. Mr. Coe was one of the witnesses and where they are related to him, I think you have the papers.

Mr. Friedman. Questions are being put to him with regard to all the documents. Is there any real objection to my having them?

Mr. Morris. No, there is not.

Senator Jenner. You may have them.

Mr. Morris. This says :

On January 8, 1947, a meeting was called at U. N. Headquarters by David Weintraub, Director of the Division of Economic Stability and Development, Department of Economic Affairs, U. N.

Now, it says here, in the third paragraph — this is now document No. 5:

A major part of the discussion centered around a draft paper circulated by Mr. V^^'eintraub. The principal section is quoted below.

That speaks for itself, Senator.

Then again there is a reference to a letter —

dated January 10, 1947, from David Weintraub to participants in the meeting which he called on January 8, 1947, to discuss steps to be taken by the U. N. Secretariat toward attainment of "balanced" economic development, including provision of technical assistance.

Although, as I told you at the meeting, this statement is not construed by us as necessarily reflecting the view of any of the agencies represented at the meeting, it will be used by the U. N. Secretariat as a guide in our own work.

This whole paper bears on the activity of David Weintraub in in- itiating and supporting the development of this particular program.

Senator Jenner. It will go into the record and become a part of the record.

(The document referred to was marked "Exhibit No. 305" and is as follows :

Exhibit No. 305

Da\t:d Weintraub and U. N. Expanded Technical Assistance Fund

(Central E^nd)

DAVID weintraub

During the planning stages of the U. N. expanded technical assistance pro- gram (ETAP), David Weintraub was the six)kesman for U. N. in its uncompro- mising drive to obtain centralized appropriation and budget, as well as centralized control by U. N. of the program. Highlights of David Weintraub's record :

Born in Kozlow, Poland, 1904, in territory now western Ukraine. Came to the United States at the age of 17 years, and was naturalized when he was 22 years old.

The United States Justice Department reported that there had been 43 deroga- tory FBI reports on Mr. Weintraub between January 31, 1945, and November 12, 1952. (New York Times, January 2 and January 7, 1953.)

During the period when the derogatory reports were being given to the Depart- ment of State, David Weintraub held the following positions : Chief, UNRRA Committee on Supplies, 1945-46. Deputy Director-General of UNRRA, 1946.

Director, Division of Economic Stability and Development, U. N. Depart- ment of Economic Alfairs, 1946 to January 6, 1953. (Resigned as a result of investigation by Senate Internal Security Subcommittee.)

2898 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Between March and June, 1949, David Weintraub and his staff in U. N.'s Di- vision of Economic Stability and Development (which included eight others later dismissed under United States security fire) prepared the U. N. position papers and laid the groundwork for establishment of central financing and U. N. control of programs in the expanded technical assistance program.

Despite strong objections by all of the specialized agencies to central financing, including prior action by governing bodies of four of them (WHO, ILO, UNESCO, and FAO) approving a plan calling for decentralized financing, the United States delegation to U. N.'s ECOSOC led the figlit to establish the financial system espoused by David Weintraub — namely, a central fund under U. N. control.

In April 1950, the State Department made an adverse report on David Wein- traub to the United Nations (New York Times, January 2, 1953.)

During the summer of 1952, the United States delegation to U. N.'s Economic and Social Council (ECOSOC) sponsored changes in the organization of the Technical Assistant Board (which is composed of representatives of the several international organizations which participate in the expanded technical assist- ance program) which provided for the appointment of an executive chairman, who was "given the task of reviewing all program proposals, either preliminary or final, with a view to development of balanced country programs, and he was to make such recommendations to the (Technical Assistance) Board as he saw fit. The Chairman was also to exercise continuous supervision of the program * * *."

It was widely rumored among the secretariats of the several international agencies that David Weintraub was slated to become the Executive Chairman of the Technical Assistant Board (TAB) when the United States delegation had succeeded in getting approval of the U. N. governments in ECOSOC for the post. (New York Times, May 25, 1952: "Mr. Weintraub is a leading candidate for a high United Nations post, but, it was said, his selection has been blocked for the time being as a result of the grand jury investigation.")

On January 6, 1953, David Weintraub resigned from the seci'etariat of U. N. as a result of publicity which followed the Senate Internal Security Subcommittee inquiry into Communist infiltration of U. N. (The New York Times of January 7, 1953, said : "Mr. Weintraub was largely responsible for a series of United Na- tions reports on world economic conditions and also was closely associated with the United Nations program of technical assistance for underdeveloped countries.")

The Men Behind the U. N. Central P"'und

"Technical assistance is probably one of the most imjwrtant subdivisions of the U. N. right now. They have asked that the United States contribute many millions of dollars to the technical assistance program so that they will be able to spend money throughout the world. It supplements and encompasses our point 4 program. The general thinking now, lioth in the State Department and in the United Nations, is that point 4 and all these international assistance organ- izations should be subordinated to the technical assistance program in the U. N." — Robert Morris, special counsel, Senate Internal Security Committee (from the Story of Communism in the U. N., U. S. News and World Report, December 5, 1952).

device for control

The most successful device yet fashioned for bringing the programs and policies of the specialized agencies under U. N. control is the U. N.-administered central fund, created to finance the "expanded" technical assistance work of seven autonomous international organizations.

Since programs are merely an expression of the ideas and purposes of people, it is pertinent to look behind the U. N. central fund to see who originally planned it, and who has since been most useful in advancing its potential for centralizing control in the U. N.

In the earlier stages of planning and establishment, the star roles were nlayed by David Weintraub and V. Frank Coe. Later, protectors and developers emerged both in the United States delegations to U. N. and in the U. N. Secre- tariat itself.

DAVID WEINTRAtm TAKES LEADERSHIP

The records seem to indicate David Weintraub was one of the leaders in the drive to give control of all of the specialized agencies to the U. N. Of Weintraub, the Senate Internal Security Subcommittee said (in its report of August 24, 1953) :

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2899

"David Weintraub occupied a unique position in setting up the structure of Communist penetration of Government agencies by individuals who have been identified by witnesses as underground agents of the Connuunist Party, and who, when aslied about the truth of this testimony, either invoked the fifth amend- ment or admitted such membership.

"He was the director of tlie national research project of the Works Progress Administration which was an object of special attention during our hearings. The project appears to have been a kind of trapdoor, through which agents of the Communist underground gained entrance to the Government."

The New York Times of January 2, 1953, reports as follows on David Weintraub :

"Washington, January 1. — A State Department memorandum listing 38 past and present United States employees of the United Nations as persons 'believed to be Communists or under Communist discipline' was made public today by the Senate Internal Security Subcommittee.

"The memorandum said 11 still were on the United Nations payroll. * * *

"One of the II named as still on the U. N. payroll was David Weintraub, Direc- tor of the Division of Economic Stability and Development. Last Tuesday a House judiciary subcommittee was told by the Justice Department that there had been 43 derogatory Federal Bureau of Investigation reports on Mr. Weintraub between January 31, 1945, and November 12, 1952. In April 1950, the State Department made an adverse report on him to the United Nations."

Robert Morris, special coimsel of the Senate Internal Security Subcommittee, said in an interview published in the U. S. News and World Report (December 5, 1952) :

"The subcommittee has revealed that David Weintraub, the head of the Eco- nomic Division, has brought in many of the ofBcials who have refused to answer questions about their Communist membership. Some of these people were asso- ciated with him in past United States Government employment. Notwithstand- ing this and other testimony about Weintraub, he still remains in his position."

The Reader's Digest for May 1954 (The Web of Subversion — condensation of the book by James Burnham) states :

"When the research project disappeared from the scene with the coming of the war, David Weintraub's governmental career continued upward in other agencies. He was with the War Production Board, became an assistant to Harry Hopkins, and was in the State Department. After that he went into the budding United Nations Relief and Rehabilitation Administration (UNRRA), where he became Deputy Director. He was, that is to say, at the top of that organization, with all its billions of dollars.

"In 1946 Weintraub has a series of quarrels with Fiorello La Guardia, then Director of UNRRA, as a result of which he was fired. But Mr. Weintraub had no occasion to seek unemployment relief. The United Nations was opening up shop, and he was evidently just the man the U. N. needed. In a jiffy he was hired, at more than $14,000 a year, and installed in the U. N. Secretariat as Director of the Economic Stability and Development Division.

"Weintraub was never one to neglect his chicks. Soon there appeared at his side his old Associate Director, Irving Kaplan, at a $12,440 salary. To preserve the traditional atmosphere, there were also present in his U. N. division Joel Gordon ($13,000), Herman Zap ($8,700), and Sidney Glassman ($8,500), all three of whom pleaded self-incrimination when later questioned about Com- munism."

Much has been made of the fact that David Weintraub brought into the U. N. Secretariat a number of people who later resorted to the fifth amendment when questioned about their Communist activities. The Senate Internal Security Subcommittee report (August 24, 1953) may provide an explanation for Mr. Weintraub's propensity for hiring people who would not discuss their political activities :

"Almost all of the persons exposed by the evidence had some connection which could be documented with at least one — and generally several — other ex- posed persons. They used each other's names for reference on applications for Federal employment. They hired each other. They promoted each other. They raised each other's salaries. They transferred each other from bureau to bureau, from department to department, from congressional committee to congressional committee. They assigned each other to international missions. They vouched for each other's loyalty and protected each other when exposure threatened."

Whatever David Weintraub's reasons were for opening the U. N. Secretariat door to so many who later were charged with being Communists, the fact is

2900 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

that he had on his immediate staff in the Division of Economic Stability and Development eight of the people who were dismissed by the United Nations following Federal grand jury inquiry and hearings by the Senate Internal Se- curity Subcommittee regarding presence of American subversives in the U. N. These eight together with appropriate highlights from their records, were :

Irving Kaplan — of whom the Senate Internal Security Subcommittee said: "Kaplan appeared before us during the inquiry into IPR (Institute of Pacific Relations)." Here is a sample of his testimony :

"Mr. SouBWiNE. Were you ever a Soviet espionage agent?

"Mr. Kaplan. I refuse to answer on the ground that it may tend to incrimi- nate me.

"Mr. SouRWiNE. Are you a Soviet espionage agent now?

"Mr. Kaplan. I refuse to answer * * *

"Mr. SouRWiNE. Did you ever conspire to overthrow the Government of the United States by force and violence?

"Mr. Kaplan. May I consult with counsel?

"Senator Ferguson. Yes.

"(Mr. Kaplan confers with counsel.)

"Mr. Kaplan. I refuse to answer on the same grounds * * *

"Senator Ferguson. Was there a ring in Washington, where Communists were active, to get other Communists in to the United States Government?

"Mr. Kaplan. I refuse to answer * * *

"Shortly after this testimony, Kaplan took the stand before the House Com- mittee on Un-American Activities on June 10, 1952. His combined testimony fills about 61 pages. On those 61 pages we find that he believed it might in- criminate him if he gave true answers to 244 questions * * *

"The man who gave Irving Kaplan his job as associate director of the National Research Project of WPA in 1935 was David Weintraub. The man who helped Irving Kaplan get his job with the Division of Economic Stability of the United Nations 12 years later was the same David Weintraub, who by that time was Director of that U. N. division.

"Whittaker Chambers involved both Kaplan and W^eintraub as Communists. He said that Kaplan gave him. Chambers, a job with the National Research Project of WPA in the 1930's as a service to the Communist conspiracy.

"Elizabeth Bentley testified that Kaplan was one of the espionage ring who gave her stolen Government secrets in the 1940's ♦ * *

"When Kaplan went to the Treasury in June 1945, it was Frank Coe wko appointed him. Coes name was on the Berle notes and he was identified by Bentley as a Communist. He invoked the fifth amendment before us last De- cember 1, 1952.

"After his return from Germany, both Coe and Harold Glas.ser rated Kaplan's Treasury work E, for excellent * * * on May 17, 1946, Kaplan was transferred by Coe to the Office of War Mobilization and Reconversion. * ♦ *"

Joel Gordon — of whom Robert Morris, special counsel for the Senate Internal Security Subcommittee, said in an interview (U. S. News & World Report, Dec. 5, 1952) :

"Joel Gordon, chief of the Current Trade Analysis Section of the Division of Economic Stability and Development, also refused to say whether he was pres- ently engaged in subversive activities against the United States, whether he had engaged in espionage, or whether he was a Communist."

The New York Times, October 23, 1952, reports :

"United Nations, New York, October 22. — Secretary General Trygve Die today dismissed one United Nations employee who had balked at answering questions about Communist activity put by a Senate subcommittee, suspended another, and placed 10 on compulsory leave. All 12 were United States citizens. * * ♦

"Suspended — Joel Gordon, chief of the Current Trade Analysis Section of the Department of Economic Affairs, with a take-home pay of $10,100. Mr. Lie said that Mr. Gordon had refused to tell the subcommittee whether he was 'now en- gaged in any subversive activities against the United States Government.' Mr. Gordon will continue to receive his salary during his suspension."

Herbert S. Schimmel — of whom the New York Times reported on October 15, 1952, in connection with hearings of the Senate Internal Security Subcommittee :

"Mr. Schimmel's testimony led to Senator O'Conor's vehement call for ousters. The economist had refused to say whether he had been a Communist while em- ployed by the Works Progress Administration. He did say that 'I was not' a Communist in 1941 when on the staff of a House committee headed by the late

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2901

Representative John H. Tolan, Democrat of California, investigating national defense migration.

"Confronted witli questions about various individuals, Mr. Schimmel pleaded that he had been ordered Monday night to appear even though his lavpyer could not be present. In the midst of Mr. Schimmel's discussion on this with Robert Morris, committee counsel, Senator O'Conor declared that it was 'a sorry day' when Americans working for an international organization could not answer questions bearing on their loyalty."

The New York Times of January 2, 1953, said :

"Washington, January 1. — A State Department memorandum listing 38 past and present United States employees of the United Nations as persons 'believed to be a Communist or under Communist discipline' was made public today by the Senate Internal Security Subcommittee * * *

"* * * listed in the memorandum as being former employees separated from their jobs after adverse comment had been handed to the United Nations : Herbert S. Schimmel, hired April 17, 1949, adverse comment December 19, 1951, terminated October 30, 1952."

With monotonous regularity, members of David Weintraub's staff refused to answer questions put to them by the Federal grand jury and the Senate Internal Security Subcommittee. The similarity of their case histories makes repetition unnecessary. Therefore, only the disposition of each, as reported in the New Yoi-k Times of January 2, 1953, will be noted here :

Sidney Glassman — of whom the New York Times (January 2, 1953) says :

"The State Department's list of 27, however, is not the complete accounting of persons dismissed by the loyalty controversy. At least 7 other i)ersons have been ousted by the United Nations. 6 of them for refusal to answer questions asked by the Senate's Subcommittee on Internal Security. They are Sidney Glassman ♦ * ♦ Herman Zap * * *."

Herman Zai) — See above report on Sidney Glassman.

Dimitry Varley — The New York Times (January 2, 1953) states:

"Washington, January 1 — A State Department memorandum listing 38 past and present United States employees of the United Nations as persons 'believed to be Communist or under Communist discipline' was made public today by the Senate Internal Security Subcommittee • ♦ * Mr. Hickerson named these 11 persons as still on the United Nations payroll : Dimitry Varley, hired October 1, 1946; adverse comment about November 21, 1950 • * ♦."

Eugene Wallach — The New York Times (January 2, 1953) says:

"These 25 persons were listed in the memorandum (of the State Department, listing United States employees of the United Nations 'believed to be Commu-P nists or under Communist discipline') as being former employees separated! from their jobs after adverse comment had been handed to the United Nations : Eugene Wallach, hired August 30, 1946, adverse comment April 21, 1950, termi- nated June 20, 1950 * • *."

Mrs. Marjorie Zai) — The same list referred to In connection with Eugene Wallach, above, included the name of Marjorie Zap, as follows :

"Marjorie Zap, hired May 5, 1947, adverse comment January 20, 1951, com- pulsory leave October 22, 1952, terminated November 21, 1952."

REORGANIZATION OF THE TECHNICAL ASSISTANCE BOARD (TAB)

24. In the middle of 1952, the Technical Assistance Committee (TAG) re- viewed the methods of operations of the TAJB and recommended to the ECOSOC a number of changes in the basic resolution (establishing the U. N. expanded technical assistance program; 222 (IX), The Economic and Social Council at its 14th session accepted these changes, which provided for the appointment of an Executive Chairman and a modification in the function and responsibilities of the Board.^ The Executive Chairman was given the task of reviewing all program proposals, either preliminary or final, with a view to developing balanced country programs, and he was to make such recommendations to the Board on all programs as he saw fit. The Chairman was also to exercise continuous supervision of the program, and to insure that all the Board's activities were adequately coordinated." And finally, special emphasis was placed on the role of the resident representatives.

25. In making the recommendations on financial arrangements for 1953, the Technical Assistance Committee also provided that all programs for 1953 were

e„!.,?^f'''^o^^'°*'"^".^ was slated to get this job, but resigned under fire of Senate Internal becunty Subcommittee before assuming It — David Owen later took it * Resolution 433 A (XIV).

2902 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

to be reviewed by the Chairman and approved by the Board before funds were allocated, whether the projects were financed from the agency automatic allo- cations or from the retained contributions account. This latter requirement and the new general responsibilities necessitated a change in the organization of the Secretariat of the Technical Assistance Board, and this was accomplished over the latter half of 1952 and in the early months of 1953.

The above paragraphs appeared in United Nations Technical Assistance Com- mittee Fifth Report of the Technical Assistance Board, Economic and Social Council Official Records : 16th session, supplement No. 10, E/2433, June 1, 1953.

United States Citizens on Staff of David Owen (Assistant Secretaby- Genekal of U. N. for Economic Affairs) Who Were Dismissed Following Inquiry by Federal Grand Jury and Senate Internal Security Subcommit- tee Into Communist Infiltration of U. N. Secretariat

Economic Stability and Development Division

David Weintraub, Director: Net salary, tax paid by U. N., of $11,800 plus an

$800 allowance. (Resigned under fire.) Sidney Glassman : Net salary of $8,500 tax paid by U. N. Irving Kaplan : $12,440 per year. Eugene Wallach.

Herbert Schimmel : Economic affairs officer, $8,500 net, tax paid by U. N. Joel Gordon : Chief, Current Trade Analysis Section, $10,000 net, tax paid by

U. N. Herman Zap (later transferred to U. N. Technical Assistance Administration;

(see note below). Mrs. Marjorie Zap : Economic affairs officer, $4,800 net salary, tax paid by U. N.

other sections of economic affairs

Hope Dorothy Eldridge : Statistical oflScer, $7,525 net salary, tax paid by U. N. Rhoda Rastoff : Transport and Communications Division.

United States Citizens on Staff of U. N. Technical Assistance Administra- tion Who Were Dismissed Following Inqxhry by Federal Grand Jury and Senate Internal Security Subcommittee Into Communist Infiltration of U. N. Secretariat

Alfred J. Van Tassel, Chief, Economic Section, Special Projects Division, U. N.

TAA— $9,000 salary net, tax paid by U. N. Stanley Graze, Executive Secretary of the Railways Operation Study Unit,

U. N. TAA— $6,000 net salary, tax paid by U. N. Herman Zap, training oflScer — $6,625 net salary, tax paid by U. N.

First Attempt by U. N. Secretariat To Control Technical Assistance

On January 8, 1947, a meeting was called at U. N. Headquarters by David Weintraub, Director of the Division of Economic Stability and Development, Department of Economic Aifairs, U. N.

According to Mr. Weintraub, the purpose of the meeting was to consider what immediate steps might be taken through the U. N. Secretariat toward the attain- ment of "balanced" programs of economic development, including provision of technical assistance. Organizations represented, with number of persons from each noted in parenthesis: FAO (2 representatives); International Bank (3 representatives) ; International Labor Office (1 I'epresentative) ; WHO (2 repre- sentatives) ; United Nations (11 representatives).

A major part of the discussion centered around a draft paper circulated by Mr. Weintraub. The principal section is quoted below :

"4. To enable the United Nations most effectively to assist in the development of the less-developed countries or areas of the world ;

"(a) The member governments of the United Nations should be invited to forward to the Secretary General detailed statements showing what agency or agencies in their countries have as their major concei*n the general economic development of their countries and giving a description of their authority, plans, programs, activities, personnel, and financial resources ;

"(&) The Secretary General should assemble and analyze the above data and make them available to the Economic and Social Council and its appropriate

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2903

commissions and subcommissions and to such other agencies or members of the United Nations as may be concerned ;

"(c) The Secretary General should keep under continuous review the progress of development in the less-developed countries or areas so that —

"(i) he may be in a position to consider appropriate and prompt action in cooperation with other Unitetl Nations or national agencies concerned, if, at any time, a development project or program, justified on other grounds, has been unable to go forward for lack of adequate international financial facilities or technical assistance;

"(ii) he may be in a position to take or promote appropriate action to ensure that development programs are consistent with the international economic policies of the United Nations; "(d) The Secretary General should consider the establishment of a consulta- tive mechanism of the United Nations agencies concerned for the purpose of ensuring that the resources of the United Nations are utilized most effectively and expeditiously to achieve balanced economic and social progress and develo)> ment ;

"(e) The Secretary General should, in cooperation with the other United Nations agencies concerned, make appropriate arrangements for the provisions of such technical assistance as member governments may request in order to enable the governments concerned to plan and carry out balanced development programs as speedily and as competently as iKtssible."

Excerpt from covering letter, dated January 10, 1947, from David Weintraub to participants in a meeting which he had called on January 8, 1947, to discuss steps to be taken by the U. N. Secretariat toward attainment of 'balanced' economic development, including provision of technical assistance:

"Although, as I told you at the meeting, this statement is not construed V)y us as necessarily reflecting the view of any of the agencies represented at the meeting, it will be used by the U. N. Secretariat as a guide in our own work."

January 14, 1947.

Note on Infoemal Discussion on Economic Development, Lake Success,

11 A. M., January 8, 1947

Mr. We'mirauh acted as chairman, and in addition to U. N. representatives, members of the staffs of the following international agencies were present : IMF, International Bank, FAO, ILO, the preparatory commission of ITO, UNESCO, and World Health Organization. The IMF was represented by Mr. Friedman and Mr. Fisher.

U. N. and the specialized agencies were asked to consider what could be done to facilitate balanced development programs in individual countries, and to insure a common approach and eflSciently coordinated action on the part of the agencies most directly concerned. The bank is naturally the most active operator in this field, but FAO will also probably wish to sponsor development projects, and IL conferences will wish to pass resolutions on the subject. IMF's interest is less direct, though they are concerned that development programs should produce balanced economies in a slightly different sense.

VN proposes to ask member fiovcrnments to submit statements listing national agencies which have general economic development as their major concern, and describing their authority, plans, programs, activities, personnel and financial resources. The document in which this request is to be embodied will be sub- mitted for comment, informally and without prejudice, to those who were present at the meeting, responsibility for it remaining, however, with U. N. The U. N. Secretariat will then be asked to keep the program development in the less de- veloped countries under continuous review, and in particular to examine the fac- tors which may be impeding it. It was pointed out that this request might over- lap with others being made by the specialized agencies such as the IMF, and it was agi-eed that the U. N. Secretariat should not make any request at this time, but, instead, each agency might report orally and informally on its activities-- in this field, and the U. N. Secretariat can then see what gaps, if any, exist.

The bank showed some intelligible concern lest the process of coordination should threaten to impair its exclusive responsibility for making decisions on loan requests made to it, and it was finally agreed that it would generally be undesirable to place the Secretary-General in a position whore he might feel obliged to advocate the claims of any member state as against a bank decision. 72723— 57— pt. 42 3

2904 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

It appears that U. N. would like to make the systematic provision of technical assistance one of its positive functions. * * * The question was raised of sending teams of investigation to suitable areas to examine development prob- lems on the spot. * * *

It appeared to be taken for granted that all the si)ecialized agencies would be invited to attend Commission and subcommission meetings, though the extent of their participation in each case is a matter of procedure to be decided by each Commission or subcommission itself.

It is proposed to continue informal meetings such as these, and the second will probably be called within the next 4 to 6 weeks.

[United Nations press release, March 25, 1949]

Statement by Secretary-General Tbygve Lie on Economic Development and Technical Assistance to Underdeveloped Countries

We shall be taking another step next week in the development of the United Nations plans for technical assistance and economic development of underdevel- oped countries.

On Thursday, March 31, there will be consultations at the offices of the Inter- national Bank in Washington, D. C, among representatives of seven of the specialized agencies and a secretariat party headed by Assistant Secretary- General David Owen. These consultations are for the purpose of establishing some of the basic policy lines to be followed In the plans on technical assistance which the Economic and Social Council requested us to prepare. After these con- sultations, an expert group will start work at Lake Success. Their draft plans should be ready for consideration by the Administrative Committee on Coor- dination in the middle of May, and I hope to be able to complete the report by the end of that month.

In the meantime, I have asked the International Bank and the International Monetary Fund, the Food and Agriculture Organization, the International Labor Office, and UNESCO to give me their views on methods of financing economic development projects. You will recall that the Economic and Social Council requested me to make reports to its next session on both technical assistance for economic development and methods of financing development projects them- selves.

I look upon these plans for an expanded United Nations program of technical assistance and for financing economic development as affording a major oppor- tunity for constructive action by the United Nations and the Specialized Agen- cies during the months ahead.

In addition to Mr. Owen, the Secretariat party to Washington will include J^rg^_AiEa3Iyrdal, top-ranking Director of the Department of Social Affairs, Mr. Martin Hill, Director of Coordination for Specialized Agencies, Mr. David Weiiitraub, Director of the Division of Economic Stability and Development, and Mr. Perez-Guerrero, Adviser on Coordination.

I expect that Mr. John J. McCloy, president of the International Bank, Mr. Camille Gutt, Director of the International Monetary Fund, aud Sir Herbert Broadley, Acting Director of the Food and Agriculture Organization, will repre- sent their agencies at the meeting in Washington.

Assistant Director-General C. W. Jenks is expected to represent the Interna- tional Labor Office. Dr. Frank Calderone, Director of Liaison Sen^ices, will represent the World Health Organization ; Dr. C. E. Beeby, Assistant Director- General in charge of Education of UNESCO ; aud Mr. E. R. Marlin, the Interna- tional Civil Aviation Organization.

The U. N. Expanded Technical Assistance Pkoqram (ETAP^

(A high-level official of an International organization prepared for the head of his agency the following summary of developments in the multilateral technical assistance program :) Subject : ETAP. Date : September 21, 1954.

President Truman's inaugural speech in January 1949, suggested, as point 4 in his international program, a technical assistance program, to be carried out both

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2905

bilaterally and through the international agencies. This general suggestion was made specific by the United States representative to ECOSOC the next mouth. ECOSOC requested the Secretary-General of U. N., in consultation with the heads of the specialized agencies, to prepare an overall plan of the program, lor presen- tation to its summer session.

The heads of the specialized agencies advised U. N. that, before setting up a working party to prepare this plan, a policy decision should be reached ou whether the proposed program would be financed and controlled centrally through U. N., or be financed through each of the agencies separately and operated by the agencies cooperatively. U. N. resisted any real discussion of this point, and opened the working party meetings before a final policy agreement had been reached. "While the specialized agencies continued strongly to argue the case for a decentralized program, the U. N. {whose spokesman ivas usually David Weintraiib) resisted any alternative to a centralized appropriation and budget and centralized by U. N. of the program. However, after about 6 weeks of dis- cussion, the report of the working party to ECOSOC was finally agreed upon. It reflected an essentially decentralized approach, despite U. N. objection'

At its summer session in 1949, ECOSOC overruled the report, and votCd for a centralized budget and appropriation, to be administered by a Technical Assist- ance Board, whose decisions would be subject to ECOSOC review.^

Since 1949, the TAB program has been active, but there has been increasing restiveness by the specialized agencies under TAB and U. N., especially as ECOSOC continued to press for more and more control over the agencies' techni- cal assistance activities. This situation came to a head this spring and summer, when a French proposal was adopted by ECOSOC, after considerable discussion, which, in essence, gave TAB and its chairman, acting as agents of ECOSOC, final say on the technical assistance programs to be carried out by the agencies.

This dissatisfaction of the agencies, particularly WHO and FAO, with this situation was reflected by people in the United States technically interested in their activities. During the congressional appropriations hearings this summer, the question was raised as to why the U. N. should have such a control over the agencies' work in this field. It was agreed (S. Kept. 2268) that a congressional study should be made of the whole question of United States relationshix>s to multilateral technical assistance, including the possibility of direct financing of the specialized agencies' programs. In making this study, there are to be consul- tations with interested parties, including the international organizations, if this seems desirable.

Mr. Morris. I have here document No. 6, Senator, entitled "Mea- sures for the Economic Development of Underdeveloped Countries. Report by a Group of Experts Appointed by the Secretary-General of the United Nations. Issued by the Department of Economic Affairs, United Nations, New York, May 1951."

Senator Jenner. It may go into the record and become a part of the record.

1 Note. — Based on this development, the International Bank and the International Monetary Fund decided they could not participate In the new program, nor be members of TAB and thus subject their own activities to possible control by a U. N. body.

2906 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

(The document referred to was marked "Exhibit No. 306" and is as follows:)

Exhibit No. 306

David Weintraub and SUNFED ( Special United Nations Fund fob Economic

Development)

also DIMITRY VABLEY

[The New York Times, August 9, 1955] U. N. Unit Pushes Huge Aid Project

economic council acts to put world group more actively in development

business

By Michael L. Hoffman

Special to the New York Times

Geneva, August 5. — The United Nations Economic and Social Council passed several resolutions today putting the United Nations more actively in business as a promoter of economic growth. The Council then closed its busy twentteth session.

The Council took the project for a huge United Natians fund to make grants bf aid to underdeveloped countries a step further. It asked the Secretary Gen- eral to poll governments on their willingness to support the project, as now drafted. It would be known as the Special United Nutioiis Fund for Economic Development. The object of the promoters is to get a General Assembly vote on the establishment of the ftind at next year's session of the Assembly.

Resolutions were also adopted giving the regional economic commissions for Europe, Latin America and Asia and the Far E;ist more authority to promote regional trade conferences and engage in trade expansion work generally. An effort by the Soviet Union to revive the project of an international trade organi- zation within the United Nations framework failed, however, to get approval.

some serious doubts

Many delegates, particularly those from countries with long experience in the processes of economic expansion, have serious doubts that the good intention in these matters will invariably be followed by good results. But the economically big countries have, on the whole, dragged their feet more quietly this year as the smaller and less developed members seek to push the United Nations further into various activities in these fields.

The United States, for instance, abstained from voting on the big fund reso- lution, but did not vote against it, although there are several features in it the State Department does not like.

The project has been tied in with the idea that a reduction in armament ex- penditures that might result from a still-to-be-achieved East-West disarmament agreement would make it easier for governments to appropriate money for aid to underdeveloped countries.

united states in stronger position

The United States delegation has been in a stronger moral and bargaining position this year than at any previous session of the Council. This year Con- gress has given the administration virtually everything asked for in the nature of technical assistance to the underdeveloped countries through United Nations agencies.

Letter of Transmittal to the Secretary General

We have the honor to submit herewith our report on Measures for the Economic Development of Underdeveloped Countries.'

^ This group suggested a large fund, from which U. N. would give grants-in-nid to nnder- dPVf'Ioi»'d countries — a plan tlien called International Development Authority, now known as Special United Nations Fund for Economic Development (SUNFED).

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2907

We are happy to be able to present a unanimous report containing recom- mendations for national and international measures to promote economic development.

In view of the wide scope of our report and its general character, we have not dealt with specific problems of particular underdeveloped countries or regions. At the request of the group, George Hakim served as Chairman. We uHsh to express onr gratitude for the valuable assistance given us by the Secretariat of the United Nations' Tiespeetfully yours,

[Signature illegible — presumably A. B. Cobtez.]

D. R. Gadgil. George Hakim. W. Arthur Lewis.

T. W. SCHULTZ.

New York, 26 April 1951.

Secretary General's Preface

This report on measures for the economic development of underdeveloped coun- tries should be regarded as a counterpart to the earlier report on national and international measures required to achieve full employment in economically more developed countries.' It was prepared by a group of experts whom I ap- pointed at the invitation of the Economic and Social Council after the Council adopted a far-reaching series of recommendations following an exhaustive dis- cussion of the earlier report. Like the earlier document, the present report rep- resents the unanimous view of its authors, who acted in their personal capacities and whose recommendations are put forward on their own responsibility.

The group was composed of Alberto Baltra Cortez, Professor of Economics, National University of Chile ; D. R. Gadgil, Director, Gokhale Institute of Politics and Economics, Poona, India ; George Hakim, Counselor, Legation of Lebanon, Washington, D. C. ; W. Arthur Lewis, Professor of Political Economy, University of Manchester, England ; and Theodore W. Schiiltz, Chairman, Department of Economics, University of Chicago, U. S. A. At the request of the group, George Hakim served as Chairman.

The Economic and Social Council invited me to appoint a group of experts to study the problem of reducing unemployment and underemployment in under- developed countries in the light of the ciirrent world economic situation and of the requirements of economic development, and to transmit the report to Member Governments and to the Economic, Employment and Development Commission. The Commission in turn has been requested by the Council to examine the re- port and to submit to the Council any comments and recommendations for action which seem appropriate. I am particularly pleased to make this report available for general discussion because it covers a subject which I commended to the fifth session of the General Assembly for consideration in the development of a Twenty-Year Programme for Achieving Peace through the United Nations. In my Memorandum to the * * *

Measures fob the Economic De\t:lopment of Underdeveloped Countries

Report by a Group of Experts appointed by the Secretary General of the United

Natians

Issued by the Department of Economic Affairs * United Nations, New York, May

1951

Part 3 — ^Ieasures Requiring International Action

intergovernmental grants

270. Before rapid economic progress can begin to be made, the governments of the underdeveloped countries will have to spend large sums in improving the human factor — on schools, on agricultural extension services, on university

* These experts met in one of a series of meetings on problems of economic development, ■whicii were organized by tlie U. N. Division of Economic Stability and Development (of which David Weintratib was Director). See p. 7 of attached statement of David Owen.

3 National and International Measures for Full Employment, December 1949, U. N. Sales No. 1949.II.A.3.

* David Owen was head of this U. N. department — David Weintraub's division (Economic Stability and Development) was operating arm of it, in charge of organizing the meeting •which produced this report.

2908 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

training, on teclinical education, and on public health. They will also have to spend large sums in improving their administration, and upon basic social capital. Most of them do not have the money required for these purposes, and they cannot borrow it. If they could get this money, its expenditure would itself stimulate both private investment and Government borrowing. Without this money, development proceeds at a slow pace, and the total inflow of capital is a mere fraction of what is needed.

271. We therefore urge most strongly that some mechanism he created for transfei~ring from the developed to the underdeveloped countries, by way of grants-in-aid, a sum of tnoney which should increase rapidly, reaching eventually a level about $3 billion a year.^ This would be equivalent to rather less than 1 percent of the national incomes of Western Europe, Australasia, the United States and Canada.

272. The principle that the better off .should help to pay for the education, the medical services and other public services received by the poorer clas.ses of the community is now well established within every Member nation of the United Nations. The idea that this principle should also be applied as between rich and poor countries is relatively new. It has, however, been put into practice on several occasions. The work of UNRRA is an outstanding example of United Nations collaboration in this sphere. But even this is far overshadowed by the munificence of the United States which in the past few years has given away to the rest of the world sums that are a multiple of the figure we are now suggest- ing that the developed countries together should transfer to the underdeveloped countries. A very large part of the grants made in recent years has gone to the peoples of Europe, who are next in line of wealth after the peoples of North America and of Australasia. The need for such assistance to Europe has now virtually ended. If some of what Europe has been receiving were now made available to the underdeveloped world, our modest target would easily be met.

273. We do not suggest that aid should be given unconditionally to under- developed countries. This would not be wise. Each grant should be linked to a specific function, and there should be international verification that the funds are used only for the purpose for which they have been granted.

274. We recommend that the United Nations should establish an International Development Authority with potver to make grants to the governments of under- developed countries * for the purposes listed in paragraph 276. We make this recommendation, conscious of the fact that some governments may prefer to set up their own organiations for this purpose, such as the Economic Cooperation Administration of the United States. Even if some governments do set up their own organizations, we nevertheless recommend that there should also be estab- lished an International Development Authority to operate in this field. We believe that an international body has certain advantages over a national body in this kind of work, such as that international verification of expenditures is more acceptable to the receiving countries. We also believe that the traditions of some of the smaller developed countries, such as the Scandinavian and Australasian countries, are such that they would wish to contribute towards this operation. The creation of an International Development Authority would enable them to do this without the burden of setting up separate organizations of their own.

275. We have not thought it necessary to draft a constitution for such an authority, since its details would depend very much on the number and types of countries willing to contribute, on the terms of their participation, and on the number of similar national organizations that might be created. The important points at tliis stage are that Members of the United Nations should agree that such an authority is necessary, and that they should have an idea of the size of the sum of money which is needed for disbursement by means of grants.

276. The functions of the International Development Authority should be as follows :

(1) To decide upon and administer the distribution of grants-in-aid for the specific purposes listed below, and to verify their utilization.

(2) To cooperate with underdeveloped countries in preparation and coordina- tion of plans of economic development by affording general assistance and, where necessary, by providing the services of technical experts and by giving grants-in- aid for the preparation of plans of economic development.

(3) To help in implementing development plans, especially in the procurement of scarce resources, e. g., capital goods, technical personnel.

6 This is origin of plan now being promoted by U. N. as "SUNFED." • Now being promoted by U. N. as "SUNFED."

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2909

(4) To make periodic reports regarding the preparation and progress of plans of development, to provide for continuous study of the problems of economic development of underdeveloped countries, and to make recommendations to the Economic and Social Council in regard to any action that may be required con- cerning these problems.

The following purposes should be considered eligible for grants; other pur- poses, which are more capable of being self-supporting, should be financed by borrowing :

(a) Research and education. This includes grants for agricultural extension services, technical schools, farm schools, local universities, and for training technicians abroad, grants to departments of governments, research institutes or universities, wherever located, working on problems of underdeveloped coun- tries ;

(b) Public health programmes, emphasizing preventive medicine and nutrition rather than curative medicine ;

(c) Subsidization of medium- and short-term farm credit;

(d) Improvement of rural public works. This includes grants for roads, rural water supplies, land reclamation, drainage, soil conservation, afforestation.

277. We have considered whether there should not also be created an institu- tion to make loans at very low rates of interest, such as one-half of 1 percent, for investment in social capital, such as roads. We have concluded that this is not necessary, since exactly the same purpose can be met by combining a loan from the International Bank with a grant-in-aid from the International De- velopment Authority, in cases where an undertaking desirable on social grounds, could not meet the full burden of loan finance.

278. A political issue of some delicacy arises with international verification of the expenditure even when grants are tied to particular functions. Some coun- tries are ruled by corrupt or reactionary cliques whose regime might be over- thrown by the people if there were no foreign aid, and who may be settled in their rule because foreign grants have become available. Members of the United Nations will not wish to have had any hand in fastening such govern- ments on peoples. They might therefore wish to lay down certain minimum conditions before an underdeveloped country was admitted to the list of those eligible to receive grants. This is a most controversial matter, on which we do not make any recommendation.

United Nations Economic and Social Council r

E/CN.l/SR. 125 31 May 1951 Original : English i General Distribution on 11 June 1951

ECONOMIC, EMPLOYMENT, AND DEVELOPMENT COMMISSION

Sixth Session

SUMMARY RECOKD OF THE HUNDRED AND TWENTT-FIFTH MEETING

Held at Headquarters, New York, on Tuesday, 29 May 1951, at 10 : 30 a. m.

Contents :

Report of the group of experts appointed by the Secretary General under Economic and Social Council resolution 290 (XI) on measures to reduce un- employment and underemployment in underdeveloped countries in light of re- quirements of economic development (E/1986) ; discussion of Commission's draft report (E/CN.1/L.17)

Chairman : Mr. Nunes Guimaraes, Brazil.

Members: Mr. Bunge, Argentina; Mr. Bury,* Australia; Mr. Masoin,* Bel- gium; Mr. Wolfson,* Canada; Mr. Cha,* China; Mr. Nosek,* Czechoslovakia; Mr. Dayras,* France ; Mr. Saksena,* India ; Mr. Bjerve,* Norway ; Mr. Madrigal, Philippines; Mr. Katz-Suchy, Poland; Mr. Chernyshev, Union of Soviet Socialist Republics; Mr. Wilson,* United Kingdom of Great Britain and Northern Ireland; Mr. Stinebower, United States of America ; Mr. Lang, Yugoslavia.

♦Alternates.

2910 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Representatives of specialized agencies: Miss Banos, Food and Agriculture Organization (FAO) ; Mr. Lopez Herrarte, International Bank for Reconstruc- tion and Development.

Representatives of nongovernmental organizations — Category A: Miss Kahn, World Fedei-ation of Trade Unions (WFTU) ; Miss Sansom, International Chamber of Commerce (ICC) ; Mr. Brophy, International Confederation of Free Trade Unions (ICFTU).

Secretariat : Mr. Weintraub, Secretary of the Commission.

Report of the group of experts appointed by the Secretary General under Economic and Social Council Resolution 290 (XI) on measures to reduce un- employment and under employment in underdeveloped countries in light of requirements of economic development (E/1986) ; Discussion of Commission's draft report (E/CN.1/L.17).

Mr. NosEK ( Czechoslovakia ) wished to emphasize, as a result of the procedure followed the previous day in discussing the Commission's draft report that the basic requirement of any report was that it should give a clear and factual record of the proceedings and should indicate all the opinions expressed in the course of the discussion and not only the majority view.

Mr. Chebnyshev (Union of Soviet Socialist Republics) wished to thank the Secretariat for its promptness in making the corrections to the summary record which he had requested the previous day.

*******

[Page 6.] Mr. Wilson (United Kingdom) suggested the insertion in the para- graph of a sentence to the effect that "in doing so, it should have regard to the formidable problem of education which is entailed in such reforms as these."

Mr. Bjebve (Norway) felt that some reference should be made to the question of taxation mentioned in Recommendation 1. As the Chairman had previously pointed out, the phrase "taxation upon a progressive basis" was ambiguous. It also gave rise to complicated problems and he could not therefore subscribe to its use without some qualification. He would personally prefer to substitute the phrase "the improvement of the taxation system".

The Chairman supported the Norwegian representative's suggestion. The point was extremely important, inasmuch as one of the main problems facing the underdeveloped countries was that of capital formation without the imposing of an undue burden on labour.

Mr. Weintraub (Secretary of the Commission) pointed out tJiat, if it was a question of interpreting the phrase used by the Group of Experts, what the latter had intended to convey ivas that the tax system should be so organized that it placed the burden on those best able to pay.

Mr. WoLFSON (Canada) remarked that other considerations also arose, for example, the problem of capital formation, to which the Chairman had drawn attention. He suggested the phrase "the establishment of taxation on a basis appropriate to the needs of development of the under-developed countries."

Mr. Masoin (Belgium) said it was clear from the relevant chapters of the report that, in making their recommendation, the experts were concerned to reduce the consumption of the wealthiest classes in the interests of domestic capital formation, either by means of direct taxation or by other methods of taxation. Their aim was not so much a system which would secure social justice as one which would promote economic development. He therefore supported the Canadian representative's suggestion.

SCOPE OF SOVIET ACTIVITY IX THE UNITED STATES 2911

United Nations Econoiiic and Sociai, Council

E/CN.1/SR.129 18 June 1951 Original : Englisli General Distribution on 19 June 1951

ECONOMIC, EMPLOYMENT AND DEVELOPMENT COMMISSION

Sixth Session

summary record of the hundred and twenty-ninth meeting

Held at Headquarters, New York, on Friday, 1 June 1951, at 10.30 a. n.

Report of the Commission to the Council (E/CN.1/L.17, E/CN.1/L.17/Add.l E/CN.1/L.17/Add.2, E/CN.1/L.17/Add.3, E/CN.1/L.17/Add.4) (continued).

Chairman : Mr. Nunes Guimares, Brazil.

Members : Mr. Bunge, Argentina ; Mr. Bury,* Australia ; Mr. Woulbroun,* Belgium; Mr. Wolfson,* Canada; Mr. Cha,* China; Mr. Nosek, Czechoslovakia; Mr. Dayras,* France ; Mr. Saksena, India ; Mr. Bjerve,* Norway ; Mr. Madrigal, Philippines; Mr. Szymanowski,* Poland; Mr. Chernyschev, Union of Soviet So- cialist Reptdlics; Mr. Wilson,* United Kingdom of Great Britain and Northern Ireland ; Mr. Stinebower, United States of America ; Mr. Lang, Yugoslavia.

Representatives of specialized agencies : Mr. Dawson, International Labour Organisation (ILO) ; Mr. Lopez Herrarte, International Bank for Reconstruc- tion and Development (Bank) ; Mr. Hassanein, International Monetary Fund (Fund).

Representatives of non-governmental organizations. — Category A : Miss Kahn, World Federation of Trade Unions (WFTU) ; Miss Sansom, International Cham- ber of Commerce (ICC) ; Mr. Woodcock, International Co-operative Alliance (ICA).

Secretariat : Mr. Weintraub, Secretary of the Commission.

Report of the Commission to the Council ( E/CN.1/L.17, E/CN.1/L.17/Add.l, E/CN.1/L.17/Add.2, E/CN.1/L.17/Add.3, E/CN.1/L.17/Add.4) (continued).

Paragraph S3 {E/CN.l/L.n/Add.2)

Mr. Lang (Yugoslavia) suggested that in the second sentence it would be more correct to say "The view prevailed" rather than "It is the Commission's general view."

Mr. Weintraub [Secretariat) suggested that the Commission might wish to delete the reference in the third sentence to the Department of Economic Affairs of the United Nations Secretariat in view of the fact that the Expanded Pro- gramme of Technical Assistance embraced the ivhole of the United Nations and the participating specialized agencies.

********

[Page 8.]

Mr. Bjerve (Noi-way) thought that the sentence referring to the part of the experts' recommendation vphich dealt with technical assistance was not clear. He did not know what the words "such need" referred to, and suggested that a more satisfactory form might be found.

Mr. Weintraub (Secretary of the Commission) suggested that the sentence might be clearer if the words "such need" were replaced by "the need for a neto international agency".

It was so agreed.

Paragraph 33 in its amended form was approved by the Commission without further comment.

The meeting rose at 12 : 50 p. m.

•Alternates.

2912 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

United Nations Economic and Social Council

General

E/CN.1/SR.128

19 June 1951

English

Original : French

ECONOMIC, EMPLOYMENT AND DEVELOPMENT COMMISSION

Sixth Session

provisional summary record of the hundred and twenty-eighth meeting

Held at Headquarters, New York, on Thrusday, 31 May 1951, at 2 : 30 p. m.

Contents :

Draft report of the Commission to the Economic and Social Council (E/CN.l/ L.17/Add.l, E/CN.1/L.17/Add.2, E/CN.1/L.17/Add.3, E/CN.1/L.17/Add.4) (con- tinued).

Chairman : Mr. Nunes Guimaraes, Brazil.

Members : Mr. Bunge, Argentina ; Mr. Bury,* Australia ; Mr, Woulbroun,* Bel- gium ; Mr. Wolfson,* Canada; Mr. Cha,* China; Mr. Nosek,* Czechoslovakia; Mr. Dayras,* France; Mr. Saksena, India; Mr. Bjerve,* Norway; Mr. Garcia,* Philippines; Mr. Katz-Suchy, Poland; Mr. Chernyshev, Union of Soviet Socialist Republics; Mr. Wilson,* United Kingdom of Great Britain and Northern Ireland ; Mr. Stinebower, United States of America ; Mr. Lang, Yugoslavia.

Representatives of specialized agencies : Mr. Dawson, International Labour Organisation (ILO) ; Mr. Lopez Herrarte, International Bank for Reconstruc- tion and Development (Bank) ; Mr. Hassanein, International Monetary Fund (Fund).

Representatives of non-governmental organizations in Category A : Miss Kahn, World Federation of Trade Unions (WFTU) ; Mr. Woodcock, International Chamber of Commerce (ICC).

Secretariat: Mr. Weintraub, Secretary of the Commission; Mr. Varley, As- sistant Secretary.

Draft report of the Commission to the Economic and Social Council (E/CN. 1/L.17/Add. 1, E/CN.1/L.17/Add. 2, E/CN.1/L.17/Add. 3, E/CN.1/L.17/Add. 4) (continued).

Paragraph 23 (continued)

Mr. Weintraub (Secretary of the Commission) read paragraph 23 of the draft report as it had been amended at the previous meeting.

Paragraph 23, as amended, was adopted. Paragraph 24

Mr. Steinbower (United States of America) suggested that the words "to res- olution XVII" should be replaced by "to resolution XVI and XVII."

Mr. Chernyshev (Union of Soviet Socialist Republicas) proposed that the end of the paragraph, from "and specifically draws" should be deleted.

Mr. BuNGE (Argentina) suggested as a compromise solution that the phrase which the U. S. S. R. representative wished to delete should be retained but that it should begin : "a majority of the members of the Commission specifically draws the Council's attention * * * ".

He felt that the Commission had been impressed praticularly by the principles embodied in the resolutions of the 4th Meeting of Consultation of Ministers of Foreign Affairs of American States, and suggested therefore that the words "and the principles on which they are based" should be added after the words "in April 1951."

*******

[Page 7.]

Mr. Wolfson (Canada) thought it would be better not to refer to the Export- Import Bank specifically, nor to make any recommendation to the Council in that connexion.

Mr. DAYitAS (France) observed that the main defect of recommendation 10 was that it seemed to imply that once an organization had been established

♦Alternates.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2913

capital for investment with a view to economic development would automatically become available.

Taking into consideration various amendments submitted by Mr. Wilson (United Kingdom), Mr. Stinebower (United States of America) and Mr. WoLFSON (Canada, Mr. Weintraub {Secretary of the Commission) suggested that the text should contain a special reference to capital from governmental sources; that part of the text which referred to the organization of foreign investment would be retained and would apply to public as well as private capital.

3/r. Weintraub's proposal was adopted.

Paragraph 27

Mr. Dayras (France) observed that, in general, it might be objected that the opening words of recommendation 11, subparagraph (a), did not call for bilateral action and took no account of the resources of the developed coun- tries. For that reason, he proposed that the words "in particular," in the second line of paragraph 27, should be replaced by the phrase "not only take into consideration the possibilities of export of capital, but should have been addressed * * *"

Mr. Lang (Yugoslavia) considered recommendation 11 to be unacceptable unless the necessity of strengthening the guarantees set forth in the Charter were emphasized.

Jlr. Chernyshev (Union of Soviet Socialist Republics) recalled that he had already commented in detail on subparagraphs (a), (b), and (c) of recommen- dation 11. His views had, accordingly, been reported in the summary records. *******

[Page 9.]

The Chairman, speaking as the representative of Brazil, recalled his previous observations concerning the wisdom of safeguarding foreign investments. For that reason, he proposed that following the words "cannot create the climate," a phrase should be added to the effect that certain representatives had, never- theless, expressed the view that capital exporting countries should take the initiative as regards measures to safeguard such foreign investments.

Mr. Dayras (France) did not think that the amendment suggested by the Chairman would serve any useful purpose unless it was accompanied by gen- eral remarks on the question of the provision of capital. The extent of the resources of the developed countries in that field should be taken into con- sideration.

Mr. WoLFSON (Canada) pointed out that the question raised by the repre- sentative of Brazil was a complex one and should be set forth in considerable detail. A brief statement might present the matter in the wrong light.

Mr. Saksena (India) supported the Chairman's view and proposed the fol- lowing wording: "Some members of the Commission felt that foreign private capital would be greatly stimulated if the developed countries were to insure it against non-commercial risks."

Mr. Dayras (France) had no objection to the wording proposed by the repre- sentative of India; such measures would obviously facilitate a solution of the problem.

Mr. Katz-Suchy {Poland) ivondered whether capital should be thought of in terms of national boundaries. In reply to a comment by the Chairman, he observed that the concern manifested by some representatives to ensure the transfer of capital appeared to be inconsistent with any desire to constitute international reserves of capital.

Mr. Chernyshev (Union of Soviet Socialist Republics) proposed that the words "The Commission * * *" at the beginning of the paragraph should be replaced by the words "The majority of the members of the Commission * * *" since his delegation did not share the view expressed in the paragraph. Further, he suggested that the last part of the last sentence, following the words "by the United Nations," should be replaced by the words "since the question dealt with in subparagraph (c) of that recommendation should be left entirely to bilateral negotiations."

Mr. Lang (Yugoslavia) proposed that the words "The Commission," in the first and third sentences of the paragraph, should be replaced by the words "The majority of the members of the Commission."

The Yugoslav amendment was adopted.

2914 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

Paragraph 28

Mr. Lang. {Yugoslavia) proposed that the words "in particular, through United Nations organisations" should be added in the fifth line, after the words "■international capital."

Mr. Bury (Australia) said that that was a substantive amendment and asked to what oi'ganizations the Yugoslav representative was referring.

Mr. Lang (Yugoslavia) said that he had in mind existing organizations and organizations that might be set up in the future.

Mr. Bury {Australia) agreed to the amendment as it applied to existing organizations but was unable to accept the implication that special bodies would have to be set up.

Mr. Wilson (United Kingdom) remarked that the Commission was anticipat- ing the succeeding paragraphs of the draft report. Paragraph 28 formed the preamble, in which a general picture of the Commission's views on group C of the experts' recommendations was presented. He suggested that the amend- ment should be discussed in connection with one of the succeeding paragraphs, which laid down the methods to be followed.

Mr. WouLBROUN (Belgium) supported the United Kingdom representative's view, adding that the majority of the Commission had unequivocably opposed the setting up of new international organizations for the financing of economic development.

Mr. Bjeeve (Norway) proposed that the words "to the underdeveloped conn-" tries" should be inserted at the same iK)int in the parasr;iph. The present text did not mention whether the flow of international capital was to be directed.

Mr. Dayras ( France ) agreed with the Belgian repre.«!entative.

Mr. Chernyshev (Union of Soviet Socialist Republics) considered that the first sentence exaggerated the part played by foreign capital. As he had already stressed, it was less the volume than the purpose of foreign investments that mattered. In exporting their capital, some countries were seeking, not to help the underdeveloped countrie.s, but to establish economic domination.

He also proposed that the words "the majority of the Commission agrees" should be substituted for "the Commission agrees * * *" in the first sentence. He would not press for liis amendment to be put to the vote ; it would suffice if his opinion was recorded in the summary record.

Mr. Lang {Yugoslavia) did not think the insertion of the phrase ''in particular through United Nations organizations" implied that new bodies %oere needed. Much of the discussion in the Commission, had, in fact, turned on the way in which the contribution of international capital could be increased through United- Nations bodies.

Mr. Bitry {Australia) observed that the main thing was to speed up the flow of international capital investments to under-developed countries. There was no need for that paragraph to impose any restriction on the source of such oapital. United Nations organizations could be mentioned in one of the foUoioiny para- graphs, dealing with the sources of capital that should be called upon.

Mr. Saksena (India) said that, if the Commission wished, in the second sentence, to draw attention to certain weaknesses in the experts' report, it should be more specific. The sentence should be either amplified or omitted entirely.

Referring to the last sentence of the first paragraph, he considered that the opinion of members who had opposed the view expressed therein ought to be given in the reimrt, and proposed the addition of the following sentence: "Other members pointed out, however, that this increased volume of foreign exchange has been obtained through the operation of factors which were not of a durable nature and that these earnings of foreign exchange could not be diverted to economic development purposes without strengthening inflationary pressures in the underdeveloped countries."

Mr. Wilson (United Kingdom) supported the first suggestion made by the Indian representative. He thought it would be useful to specify the omissions in the experts' report. Referring to the second line of the paragraph, he i>ointed out that the wording should be either "accelerated development" or "increase the rate of development."

Mr. Garcia (Philippines), in reply to the Indian representative, would prefer the second sentence to be omitted entirely rather than that the omissions of which the experts were accused should be specified. To do that would weaken the paragraph as a whole.

He supported the Indian representative's second amendment.

SCOPE OF SOVIET ACTIVITY IX THE UNITED STATES 2915

Mr WouLBROUN (Belgium) remarked that the last sentence of the paragraph contained a simple statement of fact. He failed to see any objection to its being supplemented by the Indian amendment.

(Mr Stinebower (United States of America) was in favour of the proposed additions to paragraph 28. He feared that the Yugoslav amendment might give the impression that the Commission did not unsh to increase the flow of foreign investments from sourees other than United Nations organizations.

He proposed tliat the meaning of the last sentence of the paragraph should be made clearer by the addition of the words : "especially in relation to the supplies of capital equipment likely to be available in the near future."

Mr. Weinteaub (Secretary of the Commission) read out paragraph 28 with all the suggested amendments.

Mr. WoLFSON (Canada) said that the Yugoslav amendment would not preclude recourse to sources of capital other than United Nations organizations, but that a casual reader might gain the impression that the Commission was chiefly advocating the use of the latter. He accordingly asked the Yugoslav representa- tive to withdraw his amendment, failing which he would propose that the words "international organizations' should be substituted for "United Nations organ- izations."

With reference to the Indian amendment to the second sentence, he would like the present wording of the paragraph to be retained, but would prefer the sentence to be amplified, rather than omitted.

Mr. Dayras (France) said that to adopt a form of words restricting possible sources of financing for economic development would be contrary to the general tenor of the report and to the recommendation that the Commission had adopted regarding the setting up in each country of a bank specially to deal with foreign credits.

Mr. Lang (Yugoslavia) explained that his amendment related to the title of the section containing paragraph 28 : "Action by the United Nations and other international agencies."

Mr. AVoLFsoN (Canada) felt that in that case it would be better to say "through international agencies."

Mr. AVii.soN (United Kingdom) agreed that section C dealt with action to be taken by the United Nations and other international agencies. Paragraph 28, however, was a preamble which was intended to state the general theory that international investment in underdeveloped countries ought to be substantially increased.

Mr. Lang (Yugoslavia) repeated that the title of section C covered action both by the United Nations and by other international agencies. He had already pointed out that the agencies other than the United Nations and its organization had hitherto been more active. That icas whu the future contrihution by United Nations organizations should be stressed.

Mr. Weintraub (Secretary of the Commission) wondered whether the objec- tions to the Yugoslav amendment might not be eliminated by deleting the words "in particular."

Mr. Bury (Australia) considered that that suggestion would make the sentence even les.-i acceptable.

Mr. WouT.BRorN (Belgium) pointed out that private capital was also needed for the economic development of underdeveloped countries. Accordingly, , it would not help those countries to restrict the source of capital to international organizations.

ISIr. Lang (Yugoslavia) observed that the contribution of private capital had been studied under a different heading. The paragraph under consideration dealt with international organs.

Mr. Bury (Australia) said that underdeveloped countries might receive finan- cial assistance for their economic derelopment from international sources other than United Nations organs.

]\Ir. Weintraub (Secretary of the Commission) suggested that the question should be left in abeyance for the time being, and read out the text of the para- graph as amended so far.

Mr. WoLFsoN (Canada) recalled that he had opposed the deletion of the second sentence.

The Chairman, speaking as the representative of Brazil, supported the Cana- dian representative's view, and thought that the second sentence should indicate the methods to be applied by underdeveloped countries with a view to ensuring effective utilization of foreign capital.

Mr. Bjerve (Norway) proposed that the second part of paragraph 28 Should begin with the words "Some members felt that * * *."

2916 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

United Nations Economic and Social, CJouncil

General E/CN.1/SR.132 20 June 1951 English Original : French

ECONOMIC, EMPLOYMENT AND DEVELOPMENT COMMISSION

SUMMAKY RECOKD OF THE HUNDKED AND THIRTY-SECOND MEETING

Held at Headquarters, New York, on Monday, 4 June 1951, at 2 : 30 p. m.

Contents :

Draft report of the Commission to the Economic and Social Coucil (E/CN.l/ L.20, E/CN.1/L.20/Add.l and E/CN.1/L.20/Add.2) (continued).

Chairman : Mr. Nunes Guimaraes, Brazil.

Members : Mr. Bunge, Argentina ; Mr. Bury,* Australia ; Mr. Woulbroun,* Bel- gium ; Mr. Wolfson,* Canada ; Mr. Cha,* China ; Mr. Nosek,* Czecholsovakia; Mr. Dayras,* France ; Mr. Saksena, India ; Mr. Garcia, Philippines ; Mr. Szymanow- ski,* Poland; Mr. Chernyshev, Union of Soviet Socialist Republics; Mr. Wilson,* United Kingdom of Great Britain and Northern Ireland ; I\Ir. Stinebower, United States of America ; Mr. Lang, Yugoslavia.

Representative of a specialized agency: Miss Bancs, Food and Agriculture Organization (FAO).

Representatives of nongovernmental organizations — Category A: Miss Kahn, World Federation of Trade Unions (WFTU). Category B : Miss Sansom, Inter- national Chamber of Commerce (ICC) ; Mr. Brophy, International Confedera- tion of Free Trade Unions (ICFTU).

Secretariat : Mr: Weintraul), Secretary of the Commission.

Draft report of the Commission to the Economic and Social Council (E/CN.l/ L.20, E/CN.1/L.20/Add.l and E/CN.1/L.20/Add.2) (continued).

Paragraph 22 {E/CN.l /L.20 /Add.l)

Mr. Wilson (United Kingdom) suggested that the first sentence of paragraph 22, which he considered unsatisfactory should be amended by placing a full stop after the word "indivisibility" and deleting the rest of the sentence.

Mr. Cha (China) thought that the second sentence in paragraph 22 as it stood emphasized that the underdeveloped countries agreed that the developed coun- tries must maintain a high level of economic activity and employment. It should also be made clear, however, that the underdeveloped countries must also maintain a high level of employment, and the sentence should thei'efore be changed.

Mr. Wolfson (Canada) said that the paragraph would become meaningless if the underdeveloped countries were mentioned. The present form of words merely meant that only developed countries whose economic activity was main- tained at a high and stable level could effectively help the underdeveloped coun- tries. It was too readily assumed that the developed countries could assist the underdeveloped countries regardless of their economic condition.

* If * * * * *

[Page 6.] [/Se] Paragraph 26

Mr. Lang (Yugoslavia) proposed that the following sentence should be added after the words "appreciably accelerated" in line 8 : "it is the view of the Com- mission that attention should be paid to the study of augmenting the interna- tional flow of capital through United Nations agencies." The words in paren- theses would then be deleted.

Mr. Wolfson (Canada) proposed the formula "through United Nations special- ized agencies" in order to eliminate any ambiguity. The formula proposed by Mr. Lang would automatically imply the International Bank.

Mr. Weintraxjh (Secretary of the Commission) proposed the formula "through international organizations of the United Nations."

♦Alternate.

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2917

Mr. Garcia (Philippines) proposed that the word "public" should be inserted before the word "capital" in line 5.

I\Ir. WoLFSON (Canada) proposed the deletion of the word "international" which recurred at a later point in the text.

Mr. Wilson (United Kingdom) did not find the Philippine representative's suggestion satisfactory because it contradicted subsequent paragraphs. What mattered most was to increase the flow of private capital.

Mr. Ctarcia (Philippines) said that he would not press his proposal.

Mr. WoLFSON (Canada) said that there should be an amendment to the clause "that this increased volume of foreign exchange has been obtained through the operation of factors * * * in the underdeveloped countries."

« * * » * * *

[Page 10.]

After a brief discussion in which Mr. Wolfson (Canada), Mr. Saksena (India), Mr. Lang (Yugoslavia) and Mr. Stinebower (United States of America) took part, the Commission decided not to consider the following pro- posals: (a) the Aiistralian representative's proposals; (b) the United Kingdom representative's proposal for the insertion of a preamble at the beginning of paragraph .32, and (c) the Canadian representative's proposal for the insertion in paragraph 32 of a clause indicating that some members had considered that the question dealt with in paragraph 32 had been sufficiently discussed in the Commission.

Mr. Weintraub {Secretary of the Commission) drew attention to the CounciVs procedure in considering recommendations in the reports of its Commissions. The Council considered itself seized of any recommendation submitted in those reports unless it ivas stipulated that a recommendation was subtnitted by the mdnority, in which case the Council gave it no consideration.

Mr. WoLFsoN (Canada) said that in the circumstances he would accept the Indian representative's proposal.

Mr. Wilson (United Kingdom) proposed that the words "were of the opinion" should be substituted for the words "were of the view", at the beginning of paragraph 32.

Mr. Weintraub (Seci-etary of the Commission) proposed that the word "pay- ment," in line 16 (page 2) should be replaced by the word "payments." The amended text of paragraph .32 would then read : "Some members of the Com- mission, who dissented from the majority views contained, in paragraph, SI above, were of the opinion that the Council's desire expressed in paragraph 3 of its resolution 341 (XII) to consider practical methods in conditions and policies for improving or augmenting the existing sources of external finance, both private and public, with a view to achieving an adequate expansion and a steadier * * * • * * « * « *

[Page 17.]

Mr. Wilson (United Kingdom) noted that the problem was of very great importance and that all the members of the Commission but three were agreed in recognizing the existence of the inter-relationship. As the Population Com- mission was not at present dealing with it and the Council was currently contem- plating a reorganization of the work of its Commissions the problem should be brought to the Council's attention.

The Chairman put the U. S. S. R. representative's proposal to the vote.

The U. S. S. R. proposal was rejected by 7 votes to 4, with 4 abstentions.

Mr. Chernyshev (Union of Soviet Socialist Republics) accordingly asked that the words "the majority of the Commission" should be substituted for "the Commission" in paragraph 21.

Mr. Stinebower (United States of America) suggested that a statement should be inserted after the first sentence in the paragraph, to replace the remainder of its original text, to the effect that the Commission was unable to make specific recommendations on the subject, but recommended that the Council and the Population Commission should study it.

Mr. WoLFsON (Canada) considering that the wording proposed by the United States representative could be adopted only if the Population Commission was already dealing with the matter. If that was not so the Council should be asked to invite the Population Commission to study the problem.

Mr. WoULBROUN (Belgium) found the wording proposed by the United States representative adequate. He read an extract from the Population Commission's report, making reference to both demographic and economic factors.

2918 SCOPE OF SOVIET ACTIVITY IX THE "LTSriTED STATES

Mr. Weintraub {Secretary of the Commission) quoted a draft resolution from the report of the Population Commission to the thirteenth session of the Economic and Social Council, in xchich reference was made to the inter-relationship of economic, social and demographic factors.

Mr. WoLFSON (Canada) thought that the studies of the matter contemplated by the Population Commission were merely theoretical and had no direct con- nection with what the Commis.sion was discus.sing. The Council should invite the Population Commission or other appropriate bodies to carry out more detailed studies.

The Commission adopted the text proposed by the United States represent- ative, with amendments, reading as follows :

"The Commission is unable to make any specific recommendation on this sub- ject. However, the majority of the Commission considers that the Council, itself or through such organs as it may specify, should keep the relationship between population growth and economic de^■elopment under study as a matter of importance."

Paragraphs S3 to S5 (E/CN. 1/L. 20/ Add. 2)

Paragraphs 33 to 35 were adopted.

Paragraph 26 [continued) (E/CN. 1/L. 20/ Add. 1)

Mr. Weintraiil) (Secretary of the Commission) announced that the Secretariat had drafted a text which he read: it was supported by the representatives of Brazil, India and the United Kingdom.

Mr. Stineboweb (United States of A7nerica), while he could not object to a text stating only the opinions of other representatives, he wished to have it noted in the summary record that, in his opinion, the text contained economic inaccuracies and impaired the quality of the report.

Mr. WoLFSON {Canada) shared the United States representativ-e's opinion. He considered the text faulty both in substance and in form.

Mr. Saksema {India) agreed with the United States representative's criti- cisms and suggested adoption of the amendment previously submitted by the United Kingdom representative — his approval of which he had already sig- nified.

The Commission adopted the text proposed by the United Kingdom repre- sentative, with a number of drafting amendments, to the following effect :

"That these earnings of foreign exchange, if directed to economic develop- ment purposes, might aggravate domestic inflation in underdeveloped countries."

Adoption of the report as a ivhole

Mr. Chernyshev (Union of Soviet Socialist Republics) wished to state, before the vote was taken on the report as a whole, that the report of the Group of Experts which the Commission had been considering was a harmful document and could not serve as basis for a thorough consideratiton of the problem of economic development ; the U. S. S. R. delegation had already expressed its view on the subject at the meeting of 17 May. The Commission's report which was based on the report of the Group of Experts, advised the underdeveloped countries with- out justification to make use of foreign capital rather than of their domestic re- sources. Some statements in the Commission's report were even stronger than the recommendations of the Group of Experts, in particular the statements concerning land tenure adopted at the morning meeting. The U. S. S. R. dele- gation would therefore be compelled to vote against the report.

Mr. Nosek (Czechoslovakia) also wished to explain his delegation's attitude toward the Commission's report. The Czechoslovakia delegation had already stated its objections to certain recommendations of the Group of Experts during the discussion of items 3 and 4 of the agenda. Since the Commission's report repeated the basic recommendations of the Group of Experts, his delegation was compelled to vote against it.

Mr. SzYMANOSKY (Poland) agreed with the U. S. S. R. and Czechoslovak rep- resentatives. The Commission had the important function of drawing the Coun- cil's attention to means of promoting economic development. The Commission's report, however, endorsed the ideas of the Group of Experts to which the Polish delegation had already taken exception. The Polish delegation would accordingly have to vote against the Commission's report.

Mr. Saksema (India), speaking on a point of order, observed that the members of the Commission were not being asked to approve the recommendations of the Group of Experts by their votes, but merely the Commission's report, con-

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2919

taining a summary of the discussions that had taken i^lace in the Commission and their outcome.

The Chairman, speaking as representative of Brazil, asked for his view to be recordetl in the summary record that the report of the Group of Experts was a valuable contribution to the study of the basic problem of economic development. The report covered all important aspects of the problem. Undoubtedly it had faults, but they were slight in comparison to its very real qualities. He paid a tribute to the Experts, and to the Secretary General who had chosen them, and de- clared that the report would form the basis for future detailed studies.

He put the Commission's report as a whole to the vote.

The report was adopted by 12 votes to 3.

Before adjourning- the meeting and closing the session, which might be the Commission's last, the Chairman thanked the representatives for their collabo- ration and observed that, whatever its fate, the report would testify to the spirit of cooperation that had prevailed in the Commission. He also thanked the repre- sentatives of the specialized agencies and the nongovernmental organizations, and the Secretariat, in particular Mr. Weintraub, the Secretary of the Comtnis- sion. for their valuable collaboration.

Mr. Woi-FSON (Canada), on behalf of the Commission, thanked the Chairman and the other officers of the Commission and the Secretariat.

The Chairman proposed that he should send messages, in the name of the Commission, to its past Chairmen, Mr. Wilson and Mr. Frisch.

The meeting rose at 6 : 30 p. m.

fExcerpt from article, "Assembly Acts To Further Economic Development," in United Nations Bulletin of December 1, 1&50, p. 605]

1. Need for Land Reforms

Measures to hasten agricultural progress in underdeveloped countries are dealt with in two resolutions which the General Assembly adopted. The first calls for study and recommendations by the Economic and Social Council to reform agrarian conditions, particularly land tenure systems, which hinder the economic development of many underdeveloped countries. In planning such measures, Member countries, the resolution recommends, might avail them- selves of expert advice through the expanded technical assistance program.

The second resolution calls on the Council to consider measures to facilitate and encourage the development of arid lands.

The resolutions resulted from the discussion in the Second Committee of a Polish proposal and the various amendments suggested by Argentina, Chile, Colombia, Cuba, Egypt, Haiti, Peru, the United Kingdom, the United States, and Yugoslavia.

polish proposal

Because "anachronistic agrarian conditions" are a barrier to the development of economically backward areas, a cause of low agricultural productivity and low living standards, Poland proposed that the Council should, at its thirteenth session and on the basis of a report to be prepared by the Secretary General, draw up recommendations for improving the conditions of "landless, small and middle peasants" by: (a) land reforms; (b) governmental aid through cheap agricultural credit facilities and comprehensive technical assistance; (c) construction of small factories and workshops for making and repairing essen- tial agricultural machinery, equipment and spare parts; (d) easing the tax burden; and (e) other welfare measures.

Many of the representatives agreed on the neetl for agrarian reform, esjpe- cially of land tenure .systems.

.John J. Sparkman, for instance, said that the United States supported the principle that land should belong to those who cultivated it. Accordingly, he proposed a number of amendments to promote family owned and operated farms and the development of rural cooperatives * * *.

STUDY OF ARID ZONES

In Egypt, for instance, as in many other countries in Asia, Africa, and Latin America, low rural living standards were often due rather to the low acreage under cultivation. Wherever possible, therefore, the arid zones of these areas 72723—57 — pt. 42 4

2920 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

should be brought under cultivation. This would provide more land for more equitable distribution among peasants * * *.

FINDINGS PREJUDGED

The representatives of Belgium, the Netherlands, and the United Kingdom thought the Polish proposal prejudged the findings of the investigation it called for, although thev agreed that land reforms were important.

Lord Ogmore, of the United Kingdom, also had some doubts about the motives behind the Polish proposal. In a recent statement, the Polish Minister of National Economy, had criticized Polish peasants for refusing to migrate to towns to enter industries there; he had favored the collective organization of agriculture, and had stated that rural capitalist elements would be "liquidated." Was it the intention to offer the same fate for cultivators in underdeveloped

regions? ,. ,

The United Kingdom, like the United States, also felt that the Polish proposal should have provided for participation by the Food and Agriculture Organiza- tion in the work on agrarian reforms. Lord Ogmore agreed with the repre- sentatives of Canada and South Africa, that the proposal, by calling for more reports, would delay immediate action.

He therefore proposed that the Economic and Social Council act in consul- tation with FAO and other specialized agencies concerned, to provide govern- ments of underdeveloped countries with expert advice : (a) for developing reform plans; (b) for rendering financial aid to farmers through agricultural credit facilities; (c) for constructing workshops to repair and service agricultural machinery; and (d) for other measures to promote the welfare of agricultural communities.

By this amendment, the Secretary General would not be required to report to the Council on the effect of agrarian structures on conditions of landless, small and middle peasants in economically backward countries.

Another point, made by the United States representatives, among others, was that there would not be sufficient time to prepare the study proposed by Poland for the thirteenth session of the Council. The matter should therefore be taken up at the fourteenth session.

REPLY TO CRITICISMS

Replying to Lord Ogmore's criticism of Polish intentions, Mieczyslaw Blusz- tajn said that the asrarian reforms undertaken in Poland after the war had not resulted in "liquidation" but in liberating the creative forces of peasants and creating an internal market for industrial products. Cheaper and better food had been produced for the urban population and the output of agricultural raw materials had risen. Because, however, small-holdings could not increase such output sufficiently to meet the demands of large-scale industrialization, co-opera- tive farming was needed. But this did not mean imposing reforms on peasants. Persuasion through demonstration was necessary, and cooperative farming ven- tures in Poland had been a great success as pilot projects.

While he agreed that a system of small farmers might not be the ideal one, added Mr. Blusztain, he did not believe that a standard solution could be imposed indiscriminately.

No one was proiwsing to change any country's way of life, said P. M. Chernyshev {U. 8. S. R.), who thought the United Kingdom was trying to divert attention from the need for prompt action on a vital problem.

As for the role of the FAO, the whole matter before the Committee was one which concerned economic development. This was not, therefore a matter to be referred to FAO, competent though this agency rcas in its field. To do so loould mean placing limitations upon the powers of the Economic and Social Council.

The innitation, dated March SO, 194S, which the United States sent to Allied Governments to ask them to attend the Hot Springs, Va., Conference on Food and Agriculture (which established FAO) opens as folloivs: "The Government of the United States of America is of the ojnnion that it is desirable now for the United Nations and those nations which are associated with them in this war to begin joint consideration of the basic economic problems with which they and the world will be confronted after complete military victory shall have been attained. Accordingly, and as a first step in this direction, the Government of the United States proposed to convene * * * a conference on food and other essential agri- cultural products, and hereby invites * * *

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2921

The preamble of FAO's Constitution reads: "The Nations accepting this Con- stitution, being determined to promote the common welfare by furthering sepa- rate and collective action on their part for the purpose of * * * and thus con- tributing toward on expanding world economy."

Article I of FAO's constitution reads, in part: "The Organization (FAO) shall promote and, where appropriate, shall recommend national and international ac- tion with respect to (a) scientific, technological, social and economic research relating to nutrition, food and agriculture * * * (e) the adoption of policies for the provision of adequate agricultural credit, national and international * * *. {a.) to furnish such technical assistance as governments may request."

Eventually, the Committee decided to refer the Polish proposal, together with the various amendments to a subcommittee.

Two draft resolutions vfere evolved. One dealing with the agrarian reforms es- pecially in land tenure systems, was approved by the Committee by 50 votes to 0, with 1 abstention. The other, dealing with the development of arid lands, was adopted unanimously, after one change was made in Committee.

* * *

David Weintraul) served as Secretariat adviser to the Committee in its dis- cussion on development of arid lands.

United Nations Economic and Social Council

Distr. General E/TAC/SR.57 9 December 1953 English

Original : French Sixteenth Session

Technical Assistance Committee

summary kecord of the fifty-seventh meeting

Held at Headquarters, New York on Wednesday, 25 November 1953, at 10 : 30 a. m.

Contents :

Technical assistance: Financial arrangements for the Expanded Programme of Technical Assistance (E/TAC/23, L.51 to L.53.

Present :

Chairman : Mr. de Seynes, France.

Members : Mr. Brennan, Australia ; Mr. Woulbroun, Belgium ; Mr. Cha, China ; Mr. Gorse, France ; Mr. Singh, India ; Mr. Blusztajn, Poland ; Mr. Westerberg, Sweden ; Mr. Akant, Turkey ; Mr. Rassadin, Union of Soviet Socialist Republics ; Mr. Barnes, United Kingdom of Great Britain and Northern Ireland ; Mr. Kots- chnig. United States of Ajuerica ; Mr. Alvarado, Venezuela ; Mr. Stanovnik, Yugo- slavia.

Representatives of specialized agencies : Mr. Roux, International Labour Organization ; Miss Banos, Food and Agriculture Organization ; Mrs. Rommel, United Nations Educational, Scientific and Cultural Organization ; Dr. Coigny, World Health Organization.

Secretariat : Mr. Owen, Executive Chairman, Technical Assistance Board ; Mr. Dumontet, Secretary of the Committee.

Technical assistance : Financial arrangements for the expanded programme of technical assistance (E/TAC/23, L. 51 to L. 53).

The Chairman recalled the provisions of Economic and Social Council resolu- tion 492 (XVI), part C (II) C, paragraph 7, under which the Technical Assist- ance Committee was requested to submit recommendations on the financial pro- cedures under which the Expanded Programme of Technical Assistance operated. The recommendations were to be submitted to the Economic and Social Council at its resumed session scheduled for Monday, 30 November 1953. The Working Party responsible for reviewing the financial procedures under which the Ex- panded Programme of Technical Assistance operated had presented an interim report (E/TAC/23). He declared open the discussion on the report.

2922 SCOPE OF SOVIET ACTIVITY IX THE UNITED STATES

Mr. KoTSCHNiG (United States of America) said that the United States sin- cerely hoped that the Technical Assistance Board, on the basis of the Worlfing Party's discussions, would soon be able to make specific recommendations to ensure that the best iiossible financial arrangements would be made for the Ex- panded Programme. He expected that the Technical Assistance Board would act promptly on the suggestions submitted to the Working I'arty in that con- nection which were designed to give stal>ility to the iirogramme and to avoid recurrent crises.

One of the most important questions still to be settled was that of allocations for new programmes. He assumed that the Technical Assistance Board, in deciding on the implementation of new programmes in 1954, would take care not to commit all the funds theoretically available and would set part of them aside for the continuation in 1955 of the work undertaken in 1954.

His delegation would support the Working Party's interim report, but won- dered in what form the Technical Assistance Committee would submit it to the Economic and Social Council.

The Chairman said that two procedures were possible : the Committee could authorize its Chairman to submit an oral report to the Council to explain the reasons why the TAC had been unable to make recommendations at the current session ; or the Committee could approve the Working Party's interim report and make such minor drafting changes as would in that case be necessary.

Mr. Brennan (Australia) wished to bring to the attention of the Technical Assistance Committee a matter which he had already raised in the Working Party and to which his delegation attached primary imjiortance. His delegation was deeply interested in the Expanded Programme of Technical Assistance not only because it contributed to the economic development of the underdeveloped countries but also liecause it symbolized to some extent the desire of the United Nations to play a part in their development. It must not, however, be forgotten that assistance imder the Programme was granted on the application of govern- ments and after an agreement had been concluded between the government concerned and the international agencies. It was especially important for the agreement in question to be executed according to the terms and within the time specified, unless of course the agreement had been amended subsequent to negotiation between the two parties. The financial arrangements adopted nmst be such that it would be mathematically impossible not to complete a project for want of funds. On various occasions it had been necessary to change the time limits or actual parts of the programme, and his delegation hoped that that would not happen again. The Technical Assistance Board should give the matter very special, if not absolute, priority. Any negligence in that respect might create a bad impression concerning the Expanded Programme.

The Chairman proposed that, subject to the approval of the Committee mem- bers, he should make an oral report to the Council to inform it that the Working Party had submitted no concrete proposal to the Committee on the financial arrangements to be adopted, but that it hoped to be able to make recommenda- tions in the matter later.

It was so agreed.

Mr. Rassadin (Vnion of Soviet Socialist Republics) recalled and stressed his GorernmenVs attitude totcards the use of the funds. The Special Fund, established by contributions from Member States, should be used directly by tin United Nations and not through the specialised nycncies.

The meeting rose at 11 : 10 a. m.

FAO Member Countries Which Are Not Members of the United Nations

German Federal Republic

Japan

Korea

Switzerland

Viet Nam

Tunisia

(8% percent are not members of the U. N.)

SCOPE OF SOVIET ACTIMTY IN THE UNITED STATES 2923

United Nations Member Countries Which Are Not Members of FAO

Albania

Bulgaria

Byelorussian Soviet Socialist Republic

China

Czechoslovakia

Hun.ira ry

Poland

Romania

Ukrainian Soviet Socialist Republic

Union of Soviet Socialist Republics

(13% percent are not members of FAO.)

March 1956.

Mr. Morris. I would like also to put into the record a letter of March 24, 1949, which again bears reference to the role of David Weintraub in the establishment of this particular project.

Senator Jenner. It may go into record and become a part of the official record.

(The document referred to was marked "Exhibit No. 307"' and is as follows :)

Exhibit No. 307

March 24, 1949. In reply refere to UNE.

[Confidential]

Mr. Karl Olsen,

Food aiul Agriculture Oryunization of the United Nations,

1201 Connecticut Avenue 2VW.

Dear Karl : I want to thank you, INIr. McDougall, and the members of the technical divisions of FAO for the help that they have given us in making avail- able suggestions concerning possible expanded programs of technical assistance under the "bold new program" indicated in point IV of President Truman's sijeeeh. As indicated to you orally, these suggestions are being used by us as a guide to some of our planning, but it is thoroughly understood that the projects, as you submitted them to us and as we rewrote them, commit neither you nor us at this stage. Because they do, however, constitute the only working papers that we have available at the moment on the work of FAO in relation to point IV, we are trying to see that the projects are as well defined as possible and we want to keep them on hand for use as possible examples from time to time.

I thought it might help you in planning if I passed on to you a number of comments concerning tliese projects which have been made in the course of our discussions at the working level. I am sure you will understand that in passing these comments on to you I am not indicating in any way the official endorse- ment of this Government regarding them, nor am I suggesting that you need necessarily follow them. You might, however, find some of these comments interesting and helpful in your planning for the ACC report.

1. general

"With reference to Mr. ^IcDougall's letter, we are taking note of his observations particularly with reference to the "A-2 items" which were included in our book as joint U. N./FAO projects. Since our book is not definitive, I am not pressing at this time to get a decision regarding the location of these particular projects in the U. N. scheme of things, but Mr. McDougall's notes will give us some indica- tion of the line which you are likely to follow in the AGO.

Later we shall, of course, hopie to have a more definitive view as to the criteria to be applied for setting up joint projects as against separate specialized agency projects. In fact, the whole question as to the U. N.-specialized agency relation- ship is naturally one which will occupy a considerable amount of ACC attention and we hope that a formula will be agreed upon which will be mutually satisfac- tory to everyone concerned. Meanwhile, I might .say that what prompted the inclusion of all the pilot projects in the A-2 section was, that although these proj-

2924 SCOPE OF SOVIET ACTIVITY IN THE UXITED STATES

ects are strictly agricultural technology in the imme<liate phase of operation, it was felt that they should be set up and established in relationship to other broad economic development programs. It was our thinking, therefore, that while the operation of these plants probably would be exclusively FAO in the beginning stages, the decision as to their location, the ultimate economic effects of them, and related economic services such as transportation, marketing, or indus- trial development, should all be taken into account in the early planning stages. You ivill be studying this ^natter further with Mr. Weintrauh and so loill we.

With reference to the FAO projects, I think that the most general comment that I have heard is that they do not at this stage show any overall integration into a common program. Questions have been raised in particular about the number of rather small projects since it is felt that they in themselves could accomplish very little unless they are a part of a larger enterprise. Also, the descriptions of a number of the projects still do not indicate sufficiently the extent to which the work of a number of different divisions would be involved. For example, although the programs in dairy production, agricultural machinery, land use and water control, etc. are primarily in the field of technical agriculture, they also have very definite economic implications and the economic factors of programs of this kind should be fully taken into account throughout the entire program. In these, as well as in many other programs, the nutritional objective should also be fully recognized by the inclusion of nutritionists in the particular opera- tion. It is believed, therefore, that when you come to do your draft program for the ACC you will want to concentrate on a few major, large programs which may include a number of smaller operations under one tent. It is assumed also that these programs will be developed in such a way that they show a complete recognition of economic and nutritional factors as well as technical factors involved.

2. SPECIFIC

There are some projects on which some specific comments have been made in which you might be interested. I am attaching a paper by Dr. Hazel Stiebling which concerns a number of projects in which she considers there should be a provision for nutritional work. Also, joint projects A-2-e (iv), A-2-e (vi) and A-2-e (vii) do have some elements of overlapping, partly because they were written by dilTerent organizations. Whenever you have a redraft of these items that you would care to give to us, we would be glad to include them in our background material as more representative of your thinking than the present descriptions.

Questions have been specifically asked about projects B-2-e (i), forest fire con- trol, and B-l-c (iii), forestry schools. It has been i>ointed out that these are extremely small and it is wondered how effective such a program can be over such a short time and for such small sums of money. At your convenience, you might be willing to provide us with an expanded writeup of these projects indi- cating what could be accomplished in the time siiggested and what the nature of the followup would have to be in order to secure concrete results. A question was also raised about A-2-1, transportation systems for timber extraction. The question was raised as to whether this is a matter which requires particular technical assistance or whether it is one which depends upon capital development for transportation in general, of which a byproduct would he the building of branch lines for timiier. A more complete description of this project might help to answer these question.

Projects concerned with water utilization are very troublesome and difficult to write up. It is recognized in our own Government that a part of this problem is the direct responsibility of agriculture and forestry, but you also have a larger problem of irrigation, flood control, and power development which, in our case, is handled by the Bureau of Reclamation or Army engineers. In the case of the U. N. organizations, it is clear that FAO has competence in a portion of this field but the U. N. is also planning to promote resource development programs and large-scale irrigation and flood-control projects to the extent that these can be pro- moted by the extension of technical cooperation. It is suggested that you may want to pay particular attention to the writeup of FAO's work in this field, ex- plaining even more clearly than is now done in projects B-2-b (i) and B-2-b (iii) FAO's particular work in this field. This is a subject in which it is assumed you will have some eonsultations with Weintraiib with regard to the hroad joint programs in which FAO might be expected to participate.

The question of the relationship between the agi-icultural statistics training schools described in B-2-a (ii), with the broader statistical work to be pro- moted by the U. N., has also caused us some difiiculty. Fortunately, so far as

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2925

this Government is concerned, Mr. Stuart Rice in the Budget Bureau is thoroughly familiar with the international aspects of this problem as well as the United States Government programs and will undoubtedly assist us in making an appropriate presentation of the various segments of the U. N. orgunizutions' programs in the statistical field. However, since these schools of FAO are considered to be one of your major successful projects, it is felt that it would be very useful to have a rather detailed description available as to the exact way in which such a school is organized and operated. We do not want to burden your staff excessively but if there is available a detailed report con- cerning either the Baghdad or Mexico City school, indicating the kinds of people who came, the curriculiun which was offered, the numbers of people involved, and the followup work, it would be much appreciated.

Personally, I am not satisfied with the writeup of B-l-a, improvement of government agricultural services. This is really the objective of all of the work of the organization and I do not know whether it lends itself to a separate budgetary item. If this item was intended to mean primarily educational advisory services (extension) then I think it should have been so described and it should be made clear how this service would operate in relation to the other substantive programs. You will probably remember that the United States delegation pushed very hard at the last conference to have extension or educational advisory services carried on by FAO, not just in one division, such as Agriculture, but from a central oflace which should service the entire organi- zation. We are aware of the fact that this is a most difiicult type of activity to organize since you must have people who have a genuine understanding of educational methods and who have an appreciation of the social and economic backgrounds of the different areas of the world concerned. It is my impression that there is considerable disappointment that to date FAO has not pulled together its educational advisory services into one central place in order to assist governments to do this essential job. Whether item B-l-a should cover solely this program or whether you should set it up in another place from a budgetary point of view, I do not know, but I am flagging the problem for you as one on which a good many people have commented.

Item A-2-0, food production in connection with the W'HO malaria program, is another troublesome item. We are aware of the fact that WHO has ear- marked some $4,500,000 for its part in this program and presumably FAO will be expected to develop a matching program of comparable size. Frankly, a good many of us cannot see where either organization, and most especially FAO, can possibly organize an effective program in 1 year on such magnitude. JU|St the recruitment problem alone is enormous and in the case of FAO you cer- tainly will have to make various basic surveys and do a lot of preliminary planning. Moreover, the job is bigger than just FAO/WHO which is why we placed the item as a joint project. Supposing you do eliminate malaria, who is going to build schools for the children, get railroads, sanitation, and sewage systems developed, get industries started which will employ the nonagricultural parts of the population and furnish markets for the food that FAO is going to get produced? It seems to us that this is a very important but a very long-term program and that it would be much wiser to budget on a very modest basis the first year, allowing plenty of time for surveys and planning for all segments of the economy and expanding over a period of years as new and different operations are required. This, of course, is something you will be discussing with WHO and U. N. and the views I have expressed reflect only personal com- ments rather than official observations.

There are numerous other comments that could be made about specific projects but I might mention that at the present writing it would appear that the ratio of technical agriculture now appears to be too high in relation particularly to nutrition and economics. It would seem advisable to take a look at these pro- grams from an overall i)oint of view and make sure, as Dr. Stiebling has sug- gested, that nutrition work is adequately covered in each case and also that the necessary economic analyses and surveys are provided in connection with all technical agricultural activities. Otherwise, technical development might outrun economic development at such a rate that the result might be positively harmful. We have also had a recommendation from one of the United States departments that the Crop Reporting Service be included as an integral part of economics and statistics program of FAO.

3. ADMINISTRATIVE PROBLEMS

There are, of course, many points which you will be covering under sections II and III of the Economic and Social Council's Resolution, including the funda- mental questions of financing, organization of the program, and relationship

2926 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

between the various U. N. orgiinizations. There are 1 or 2 general problems which we find we have to worlj on and I mention them to you, since you might find it useful also to be prepared on them for your discussions with AGO and later with governments. These are :

Manpower.- — It has been pointed out, both in FAO meetings and within our Government, that in many cases the bottleneck is manpower and not money. It is suggested that as a part of your budgeting for all projects you should try to get as clear an idea as possible of the number of the people needed and the sources from which you expect to get them. In this connection, you may wish to begin the development of a roster of sources of personnel, including not only Governments but private scientific and business groups, from which technicians could be secured. Having this information at hand might serve you in very good stead when you come to definite program proposals. You will, of course, need to draw upon experts from a number of different coun- tries. Perhaps a joint survey by the U. N. organizations would be better than a series of separate ones by each specialized agency, but that is a matter which you vdll know more about than I do.

RpspovaihUities as-^umed hy Governments. — You will doubtless be develop- ing for your own use, and perhaps for common approval by ACC, certain criteria and procedures to be used in connection with the commitments to be made by recipient Governments. In this connection, Mr. Caceres has already supplied us with some useful information concerning the financial arrange- ments for the FAO missions to Poland, Siam, Greece, etc. I believe you will find that procedures of this kind will need to be thought out in advance in considerable detail if the spirit of Mr. Thorp's speech and the letter of the ECOSOC resolution is to be carried out successfully.

Cowporntlre rolite of different metlwds. — We have found it necessary to make quick spot checks of the experience of international organizations and United States agencies in connection with different kinds of technical assist- ance, such as missions, consultants, short training courses, fellowships, etc. You may find it very useful also to gather all the information you can since you may need to arrive at certain criteria as to the types of metJiods to be used under particular circumstances. In this connection, you will probably find it particularly helpful to study and describe the kinds of followup that you consider necessary in order to carry any given project through to comple- tion. This element of followup is one that is of great interest to our technical people and also to budgetary oflScers who do not like to see money appropri- ated for a lot of scattered enterprises which appear to have no evidence of followthrough.

Priorities. — In conclusion, T might mention that our old friend "priorities" is still with us and will, I believe, play a considerable part in the thinking of the Governments which will have to decide what kinds of programs to authorize. FAO made a good beginning at the conference in setting up some standards for priorities and it would seem to me that you would find it useful to evaluate each of your proposed projects in the light of FAO's total effort and also in relation to general economic development. Practically every- thing that has been suggested is undoubtedly useful and needs to be per- formed some time, but it is possible that some items are firsts. To the extent that you can show that you have put first things first, I believe you will stand the best chance of justifying your program both in ACC and with Government. I hope that you will accept this letter as purely an effort to i>oint out to you some of the questions which I have seen personally during the last few weeks in working over some of these materials and some of the questions which we have had to answer for internal purposes in our planning. As I indicated earlier, this is not an official letter to you from the United States Government and you are free to use or discard any of these suggestions as you see fit.

We shall look forward to exchanging further ideas with you as plans develop and will be glad at any time to furnish such information as we are free to do that might be helpful to you. Sincerely yours,

Ursula Dttpfus. Division of United Nations Economic and Social Affairs.

Enclosure : Paper by Dr. Stiebling.

P. S. There are two items which I forgot to include in the letter. Fisheries. — I have heard no adverse comments at all about the proposed fisher- ies program. The financial estimates are noticeably very small. It is wondered

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2927

whether this is primarily because of conservative budgeting policy — a policy which the United States Government does not object to — or whether it arises from the fact that there is such a shortage of fisheries personnel that it is not possible to expand very rapidly in this field at the present time. It is assumed that the shortage of personnel does constitute a very serious handicap in this field and it might, therefore, be advisable for you to plan a relatively consei'vative fisheries program in the first year but to plan for a more rapid expansion if and when more trained people can become available to cai*ry out an expanded program of technical cooperation and advisory services.

Administrative costs. — Our figures in the book admittedly do not give a clear picture of the items the figures are intended to cover. Since we are not using our book for purposes of exact budget justifications, we have not tried to break down all these items into all the fine elements of a budget. In general, the item which we marked "administrative" was supposed to cover the basic "housekeep- ing costs" of an expanded program such as additional personnel and clerical services, bookkeeping and financial administration, travel services, stationery, cables, etc. We have not actually budgeted items such as income tax reimburse- ment, installation costs, and allowances which FAO might have to pay to per- sonnel taken on the payroll for a period of a year. We have definitely omitted from our calculations any expenditures for per diem and travel within countries and for local expenses which could be paid in local currencies since we feel these items should be covered by the recipient Governments. For budget purposes, you might need to show amounts of these items in the total cost of the project and at the same time indicate the portion of the expenses that you would expect to have covered by the local government and by the organization. Our figure for admin- istration, then, covering as it does only "housekeeping expenses," was estimated at about 5 percent of the total. This was considered by some to be a fair figure since it is the earnest hope of people working on this program that the strictly administrative costs can be kept to a minimum and that the existing establish- ment will become increasingly efiicient and absorb some of these costs through streamlining operations.

In a number of our financial statements we have an item called "Technical services, materials, etc." We could not break this down into any more detail because we did not have enough information as to the exact stei)s involved in the particular projects. You will, however, want to show for each project the approx- imate costs for items such as meetings, additional technical staff at headquarters, additional research and technical services directly connected with the project, materials used for demonstration purposes, sample seeds, vaccines, etc. It is believed that aU of these are recognized as legitimate items in work of this kind but they should be clearly shown for each project.

It is recognized also that the item referreil to in Mr. McDougall's letter for information materials, such as film strips, pamphlets, charts, etc., is a very legitimate and important item and this should be carefully figured for each of your projects. Again we did not put this into a separate item because we did not have enough information as to the proportion of this service required for each separate project. It is suggested that you will want to include anywhere from 5 to 10 i)ercent for services of this kind depending upon the nature of the project and the country and background of the people concerned. In this connection, you may find that there will be an unbearable burden upon your headquarters translation stafE if you attempt to produce all these materials at headquarters. You will probably look into the question of developing local talent and resources for producing or reproducing visual materials in native languages. In fact, this seems to be one item which might be directly chargeable to recipient governments in many cases.

Economics and statistics. — ^Just a few minutes ago I received a memorandum from Dr. F. F. Eliott of BAE but I had to give it immediately to someone else in this Government working on statistical programs. My memory of his comments on the FAO projects is :

(1) Provision should be made for beginning a crop reporting system but the exact budgetary amount to be allocated to this would depend upon the availability of manpower administrative arrangements, etc.

(2) The writeup for much of the economics and statistics work should be included under one heading, such as "Economics and Statistics Services." This should include crop reporting, world census of agriculture — assistance to governments, and national food and agriculture programs — assistance to governments.

Dr. Elliott pointed out that these are different parts of the same problem and taken together they constitute the basic operations necessary for a good economics

2928 SCOPE OF SOVIET ACTWITY IN THE UNITED STATES

and statistics sei-vice. As soon as liis memorandum has been returned to me, I will send it to you.

Rural ivelfare. — It is noted that there is no item in your list of projects for this specific item. This should not necessarily mean, however, that rural welfare aspects of FAO are being neglected. It is suggested that in your planning for programs such as rural industries, cooperatives, as well as many of the agricul- tural and nutrition programs, due account should be taken of the general welfare and social aspects of the project and staff provision should be made for these items. This part of FAO's work seems to be very much a part of a joint enterprise with the U. N., WHO, ILO. and UNESCO. It would seem advisable, therefore, for this part of FAO's program to be thoroughly worked out with the ACC where you will have a joint attack upon economic development in an area "paying due attention to questions of a social nature which directly condition economic development."

Copies to : Drs. Akroyd, Show, and Gerhardsen ; Drs. Kesteven and Buck ; Mr. Tolly and Dr. Ezekiel.

Mr. Morris. The next docmnent which we have numbered 308 — our No. 308 — is a letter which, on page 9, indicates the following :

Clearing House for Technical Information and Location of Experts. — Specific inquiries from governments for help on technical problems and in finding ex- perts to assist them have been handled to date on an ad hoc basis by the Tech- nical Assistance Unit of the Division of Economic Stability and Development.

At that time, David Weintraub was a Director of that particular agency. This indicates. Senator, that the personnel were to be taken from this particular section, of which Alfred J. Van Tassel was executive secretary at that very time. Alfred Van Tassel has also been a witness before this subcommittee, Senator. After his appear- ance before the subcommittee in New York in 1952, he was dismissed by Secretary General Trygve Lie.

I offer this to show that not only was the personnel drawn from the agency headed by David Weintraub and inquiries regarding it re- ferred to him but the information for the project was drawn by Alfred Van Tassel.

Senator Jenner, It may go into the record and become a part of the official record.

(The document referred to was marked "Exhibit No. 308" and is as follows:)

Exhibit No. 308

49/2499

15 November 1949.

Dear Me. : The enclosed note sets out briefly the present stage of

the several types of technical assistance activities which we [U. N.] are carry- ing on within the limits of our resources under General Assembly Resolution 200 (III) ^ and of requests received from Member Governments. This sum- mary is being sent to all interested specialized agencies.

I hope that it will be possible for ijon to Jet vs have a similar summ-ary of your affenci/'s technical assistance activities in due course.* Yours sincerely,

A. D. K. Owev [David Owen], Assistant Secretary-Oeneral in charge of Economic Affairs.

This letter has been sent to the following specialized agencies : FAO, Intern. Bank, Int. Monetary Fund.

1 This applied to U. N.'s regular technical assistance work, as contrasted; to the expanded Technical Assistance Program (ETAP) of which David Owen has been Executive Chairman since ml(l-19.52.

'This move to brin^ the regular technical assistance work of the specialized agencies \inder the same U. N. review as the central-fund expanded program was the result of tlie U. S. S. R. resolution in ECOSOC (July 1949) calling on the specialized agencies to report to the Standing Technical Assistance Committee of ECOSOC (now known as TAG), through the Technical Assistance Board (now known as TAB — and of which David Owen is Executive Chairman), "on their technical assistance activities, including activities financed from the special account."

SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES 2929 United Nations Department of Economic Affairs

STATUS REPOET ON TECHNICAL ASSISTANCE ACTIVITIES UNDER GENERAL ASSEMBLT RESOLUTION 200 (III), 15 NOVEMBER 1949

General Assembly Resolution 200 (III) authorizes the Secretary General to provide numerous types of technical assistance to promote the economic develop- ment of underdeveloped countries. The types of assistance which have, in fact, been most requested are :

(a) Individual experts and groups of experts worljing as a team to advise on economic development problems ;

(,6) The training abroad of the experts of underdeveloped countries through the provision of fellowships ; and

(c)The exchange and provision of information concerning technical prob- lems of economic development. There is set out below a brief summary of steps taken in these three fields by the Secretary General in response to requests from Member Governments,

(a) International Teams of Experts

(i) Haiti. — Following the presentation of the report of the United Nations Mission to Haiti, consideration is being given to appropriate measures of further collaboration with the Government of Haiti in its implementation of the recom- mendations presented in the report. An expert with wide experience in economic development work who could serve in Haiti on technical assistance services for the United Nations is being contemplated. The duties of this officer would be to follow up the work of the United Nations Mission, advising and assisting the Government as required and acting as Technical Assistance Representative in respect of such continuing assistance in specific development fields as the Gov- ernment may require. It is hoped that the specialized agencies could collaborate with the United Nations in such an enterprise and jointly with the United Nations designate such an officer.

(ii) Ecuador. — At the Government's request five experts have been advising the Government of Equador since the middle of 1949 in the following fields: €ustoms organization, reform of the Civil Service, census organization, and public finance. It is foreseen that an extension into 1950 of some part of the groups work will be needed, particularly to complete the drafting of legislation which the experts have helped to prepare.

(iii) Burma. — A statistical expert has been sent to Burma to organize and Improve the economic statistics of that country under the Ministry of National Planning. The expert took up his duties in October 1949 and it is expected that his services will be continued into 1950. It is anticipated that further assistance in other fields of economic development may be requested.

(iv) Mexico. — Detailed negotiations are far advanced and arrangements are in progress to provide three experts, one on the better utilization of local coal for the Mexican iron and steel industry and two on technical aspects of the organiza- tion of that industry. Requests for expert assistance in other fields are expected in 1950.

(v) Bolivia. — As a result of extended discussions a preliminary mission of one outside expert, assisted by two United Nations officials (one drawn from the Secretariat of the Economic Commission for Latin America ) left on 11 November for La Paz to plan, in consultation with the Government, a programme of technical assistance which has been requested in the fields of economic development and social welfare.' Upon the return of this preparatory mission, probably at the end of November, a team of experts will be organized in cooperation with the specialized agencies concerned to advise the Government in the fields mutually agreed upon.

(vi) Guatemala. — A request from the Government regarding a comprehensive mission has been under discussion for several months. It has not been possible

3 The request in the field of social welfare arises out of the advisory functions provided under General Assembly Resolution 58 (I).

2930 SCOPE OF SOVIET ACTIVITY IN THE UNITED STATES

to proceed with practical action in the alisence of certain information requested of the Government which is not yet available.

(vii) Iran. — One rei>resentative from the Economic Affairs Department and one from the Social Affairs Department have now reported on their exploratory- visit to Teheran. Negotiations are to be resumed shortly with the Iranian Dele- gation regarding the furnishing of expert assistance requested in the fields of taxation, customs tariffs and organization, and also in various social welfare fields. In further negotiations on the request for economic experts due account will be taken of the activities and arrangements in any of these fields initiated under the Government's Seven Year Development Plan and implementing any subsequent reconnnendations made by the Technical Mission of Overseas Con- sultants Inc. which visited Iran during the first half of 1949.

(viii) Chile. — In response to a request from the Government, arrangements have been proposed for the furnishing of expert advice. This will relate to policies bearing on problems of price and wage stabilization and general economic stability in relation to the economic development needs of Chile as well as on borrowing and tax policies and related fiscal and monetary problems. Tlie services of a small group of experts are being sought for this purpose. Arrange- ments are being made for a first visit to Chile of two of these experts during November-December 1949.

(ix) Afghanistan.- — Informal discussions have been initiated by members of the Afghan Delegation to the General Assembly regarding the possibilities of a broad range of United Nations technical assistance being rendered to aid the economic development of Afghanistan.

(x) Pakistan. — Discussions are planned to take place during November in Karachi upon the types of technical assistance which might be rendered in response to the preliminary inquiries of the Government of Pakistan.

(xi) Philippines. — Notification has been received of a request which this