Report of Senator Pat McCarran to the Special Subcommittee of the Senate Appropriations Committee on Foreign Economic Cooperation

AM/D - 71 February 14, 1951 player of N REPORT OF THE SPECIAL SUBCOMMITTEE OF THE SENATE APPROPRIATIONS COMMITTEE ON FOREIGN ECONOMIC COOPERATION (ECA "Watchdog Committee") Mr. McCarran, from the Special Subcommittee on Foreign Economic Cooperation, submitted the following REPORT Purpose of Report On March 31, 1950, Mr. Gordon Gray, former Secretary of the Army, was instructed by the President to make a study of the "whole complex of our foreign economic re- lations and to develop appropriate recommendations, " The report, prepared by Mr. Gray and his staff, was accepted by the President on November 10, 1950, with the statement -- * the various executive agencies concerned will draw fully on Mr. Gray's report in developing appropriate administrative action and legislative recommendations in the whole area of foreign economic policy It can be presumed that, as of the date of acceptance, the report was to be ) taken as a guide for recommendations of the executive department on all major aspects of our foreign economic policy. Since then military developments have given a new urgency to the defense problems of Europe and the Far East and the Congress will want to make examination of those problems as viewed by the Gray report. The Senate Appropriations Special Subcommittee on Foreign Economic Cooperation, pursuant to its function of studying United States economic assistance to foreign countries, has made a number of findings with respect to the operation of ECA in many countries of Europe. The subcommittee deems it useful to call attention of Congress to certain proposals of the Gray report which are policy recommendations affecting Europe's rearmament as well as Europe's political stability. The Major Recommendations of the Gray Report The 22 recommendations of the Gray report include some that propose continua- tion of present foreign aid activities without great quantitative changes, while others are radical departures, in direction and in magnitude, from former poli- cies. For example, the proposal for aid to underdeveloped areas calls for an in- crease from 150 million to a billion dollars a year in combined grants, loans, and private investment, The aid program to Western Europe, presently administered by ECA, which was to terminate, according to Public Law 472, Eightieth Congress, by 1952, is proposed for continuation for 3 or 4 more years. Many new tariff policies are suggested that go far beyond present United States tariff law and policy. In their totality the recommendations form a vast program, stipulating, in some instances, large in- creases in existing projects; in others, new activities involving direct or in- direct Government costs and burdens on the economy.