in large part upon United States military spending in Europe-purchases of military equipment, construction of bases, troop expenses, etc. The present level of these expenditures cannot continue indefinitely. Moreover, our allies are confronted by heavy and continuing costs in maintaining the Armed Forces that have been built up in part through American aid. Since Europe's total economic reserves are still too low to afford an adequate cushion for economic shocks, it will be necessary to keep our fingers crossed for some years to come. Our basic economic objective in Europe is to achieve a normal and durable economic relationship with Europe which will enable our friends and allies to stabilize their economies under conditions which will permit a reasonable rate of economic growth. In the long run, this can be accomplished only through a liberal flow of private trade and investment. Much additional thought and effort will be needed, on the part of Europe and America alike, to overcome the obstacles to the realization of this normal economic relationship.

One of the most widely publicized developments of 1954 was the series of efforts to attain practical unity among the nations of continental Europe, particularly France and Germany. One of the greatest tactical advantages possessed by the Communist bloc in the cold war is the tight discipline which it exerts over all Communist nations and peoples, thereby permitting a united tront in dealings with the outside world. In the West, we would not have a form of unity that is imposed by brute force and enslavement, even if such unity were possible. At the same time, most of the Western nations realize that we cannot effectively resist Communist penetration unless we achieve and maintain a large measure of cooperation among ourselves.

Since the end of World War II, there has been a remarkable growth of cooperation among the European nations. The OEEC, the European Payments Union, the Council of Europe, and the European Coal and Steel Community are examples of organizations within which the European governments have pursued particular kinds of cooperation. One basic problem, however, had remained unsolved the problem of Western Germany's national status and its relation to the Western security system. The United States has held several important objectives with respect to Germany. We have wanted to see German sovereignty restored, the occupation ended, and the country reunited. We have encouraged the growth of democratic institutions in Western Germany and want to preserve the most favorable climate for the maintenance of these institutions. We have sought a German military contribution to Western defense, believing that such a military contribution is essential to a truly effective Atlantic defense arrangement. We have hoped to see the Federal Republic of Germany closely associated with other Western European nations and the Atlantic community as a whole, on terms of freedom and equality.

The obvious need for German cooperation with the West, however, did not eradicate the fact that millions of Europeans, including many Frenchmen, still feared Germany. For this reason, it has been necessary to find a way to bring Germany into the European community on conditions which will insure the safety of all parties.

At first, it was proposed that the problem of cooperation between the Federal Republic of Germany and other European nations be solved by the creation of a European Defense Community, under which military forces of both France and Germany, together with those of Italy and the Benelux countries, would be merged into a common army under supranational control. By merging the military sovereignty of all six countries into a unified, federal-type entity, the necessity for establishing a separate German Army and German General Staff would have been avoided. The United States Government strongly supported the EDC plan because it was conceived and sponsored by European statesmen, because it was apparently satisfactory to both France and Germany, and also because it afforded a foundation for further progress toward unity in the political and economic fields. In August 1954, however, the French Parliament rejected the EDC Treaty, thus producing a crisis of alarming proportions.

The prompt and bold measures taken to meet this crisis augurs well for the future of the Atlantic relationship. Both Secretary Dulles and British Foreign Secretary Eden quickly visited the Continent to confer with European statesmen. In two major conferences held in London and Paris, a new series of agreements was worked out which would permit realization of the main immediate objectives of the EDC Treaty. Under these agreements, the German Federal Republic will be given virtually complete sovereignty, will join NATO and will be rearmed. In addition, there will be established a 7-nation organization, known as the Western European Union, which will include the 6 original EDC countries plus

the United Kingdom. This organization will establish and administer certain machinery for the control of armaments. It may also undertake other forms of military cooperation.

We

The new arrangements do not immediately offer the same kind of supranational framework for further advances toward Federal unity that EDC would have provided. However, they have several important advantages. When the new arrangements have been ratified and implemented, we will have solved the problem of the Federal Republic's status and its relationship to the West. will have achieved a sizable German military contingent. Moreover, by doing these things, we will have eliminated a problem which has poisoned the atmosphere of European cooperation for a long time, and will have thereby hurdled one of the most serious obstacles to further progress toward European integration. On the other hand, we must remember that critical problems still remain with regard to the reunification of Germany and the place of a united Germany in Europe. The problems can only be solved through agreement with the Soviet Union. At the moment, ratification of the Paris Agreements by all the governments concerned seems assured. Some of these agreements require approval by all the 14 NATO governments, as well as Germany. But parliamentary action has moved rapidly, and today only the upper house of the Netherlands Parliament remains to act. It is expected that all the necessary legislative and executive actions required to complete ratification will be accomplished in time for representatives of the German Federal Republic to participate in the next NATO ministerial meeting scheduled for May.

One of the most important developments of 1954 was Britain's historic offer to maintain the equivalent of four divisions on the European Continent. This offer was made as a supporting measure for the Paris Agreements and constituted recognition of the contribution which Britain would make to the stabilization of European defense. The importance of Britain's associations outside of Europe, in their bearing on the European situation, was emphasized by the settlement of long-outstanding issues with Egypt and Iran. The settlement of the oil dispute between Britain and Iran and the agreement between Britain and Egypt on the Suez bases have served to eliminate sources of serious friction in the Middle East. To the successful resolution of these difficult problems American diplomacy contributed greatly, demonstrating once again the valuable results that can be obtained through continued cooperation with our strong ally, the United Kingdom. I fully share the sentiment expressed in a radio address by Sir Anthony Eden, the British Foreign Secretary, on January 16 to the effect that relations between our two countries have never been closer.

Another important action during 1954 to eliminate friction was the Trieste Agreement, by which the administration of the territory of Trieste was divided between Italy and Yugoslavia on terms satisfactory to both governments. This agreement should eliminate a long-standing sore spot in Southern Europe and pave the way for more positive cooperation between these two countries. Here also American diplomacy contributed in a most important manner to the favorable result. In the months ahead, the elimination of similar points of friction and the encouragement of even closer cooperation among the nations of the non-Soviet world will remain major objectives of American policy.

Perhaps the most serious setback suffered by the free world during 1954 was the Communist military advance in Indochina and the subsequent agreement at Geneva by which Northern Viet-Nam fell under Communist control. While these events took place outside the European area, a European state-Francewas directly involved. For this reason, as well as the fact that the Communist advance poses a grave threat to all Southeast Asia, the situation has caused general concern in Europe, and has been a subject of intense attention by those of us who are responsible for the conduct of relations with Europe. The severity of the setback should not be minimized, since the security of all Southeast Asia remains under a dark cloud. At the same time, 1954 also produced a "silver lining" in Southeast Asia in the form of the Manila Pact, through which we joined seven other nations, both European and Asiatic, in a new mutual defense arrangement. We hope this pact will serve as a strong deterrent to aggression in Southeast Asia. In the months ahead, we expect to continue cooperation with appropriate nations of Europe, as well as a friendly nations of Asia and the Pacific, to strengthen this deterrent. Despite the fact that we sometimes disagree sharply with our European allies on the best approach to the problems of Asia, the Manila Pact shows clearly that we have been able to achieve substantial cooperation in dealing with some of the most critical of these problems.

In passing, I want to call special attention to our continued good relations and cooperation with Canada, our strong and friendly neighbor to the north. This has been particularly marked in the important field of continental defense, to which the diplomatic arm of our Government has made important contributions. Arrangements have been developed for the construction of two important early warning lines, the mid-Canada line to be built by Canada and the distant early warning line by the United States. Canadian relations in 1954 were also marked by the passage of legislation by our Congress which permits planning to proceed for the development by Canada and the United States of the St. Lawrence seaway. In any long-term relationship among free, democratic societies, the eventual test of success or failure will be found in the opinions and attitudes of the peoples concerned. The people will determine, in the final analysis, whether free governments will stand or fall, whether their countries will cooperate with other countries and whether aggression will be resisted or condoned. In addition to our negotiations with governments, therefore, one of our principal tasks is to take account of trends of thought and feeling among the European peoples and to help provide a basis for mutual understanding and respect between Europeans and Americans. One particular problem in this connection is the relentless Communist campaign to capture the minds of the European people. While Communist influence has declined appreciably in Western Europe since the end of World War II, it remains strong in several countries, and the Communists have by no means abandoned their attempts to win victory by political means. In Italy, for example, Communist voting strength is still near an all-time high. They also retain considerable voting strength in France, although they suffered losses in the recent local elections. The Communists stand ready to capitalize on unsound economic conditions, internal political divisions, suspicions and rivalries among free nations, fears of war, and any other Western weaknesses or mistakes that present themselves. In particular, they are always on the alert for any word or action by prominent Americans which can be used to stir up resentment against the United States. There are distinct limitations, of course, on what the United States Government can do to combat these Communist influences in free Europe. The problem is fundamentally one for the individual governments concerned. At the same time, we can help and cooperate with those governments which request assistance in dealing with the internal menace of communism. Through our economic and defense policies, we can help to create conditions favorable to democracy and unfavorable to Communist advances. Through our information program and allied information activities, we can counteract false Communist propaganda. In our political and diplomatic activities, we can take care to avoid statements and actions which are subject to misinterpretation and which might thereby furnish ammunition to the Communists. We are doing all these things, and are also actively considering other measures and devices by which the Communist danger to European society may be rendered less acute.

In addition to the direct danger of Communist influence, we must be concerned with psychological trends which indirectly benefit the Communists. These include attitudes of neutralism, tendencies toward appeasement, and feelings of extreme nationalism that inhibit cooperation with other nations. While there is no evidence that attitudes of this kind are more intense or more widespread than in the past, we know that the Communists are constantly trying to fan them to flame, and we also know how misunderstandings of American policies and actions can add fuel to these flames. In a continuing "cold war," it is increasingly important that we maintain the attitudes and practices of true partnership with other free nations, that we demonstrate our patience and understanding as well as our courage and firmness, that we constantly take account of the views and interests of allied governments and peoples, and that we move rapidly and decisively to iron out the occasional disagreements and differences that arise among us. Above all, we must remember that none of these differences is so important as our common interest in a common survival.

In the final analysis, friendship and respect among peoples cannot be maintained by governments alone. Much depends upon direct contacts among the peoples themselves. In one sense, every American visitor to Europe-official, soldier, businessman or tourist-is an arm of American diplomacy, conscious or unconscious. But governmental action can greatly facilitate the development of friendship and understanding among peoples. The international educational exchange program, involving the exchange of students, teachers, research scholars, leaders and other influential citizens between the United States and other free nations, has made a vital contribution to forging stronger bonds with the European The full values of this program can be realized only over a long period of

area.

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years and cannot be precisely measured at any given moment, but I am convinced that it is worth far more than it costs in terms of long-range American interests. If we are careful to remember that the "cold war" is essentially a struggle for people for their allegiances, their skills and their very minds and hearts-we will not fail to recognize the enormous advantages we are deriving from these exchange programs.

In describing our work during the past year, I have dealt only with the most significant developments and major programs. Equally important are our day-to-day relationships with the nations of Europe and the British Commonwealth. Minor problems of international relations arise very frequently, and if these are not handled properly, some could become major problems. To a very great extent, successful diplomacy is composed of a combination of many little things which add up to a big result. We must be concerned not only with global trends nor even with the spectacular acts of individual nations, but also with group interests, conflicts and everyday events within each nation. We have many officers who participate only indirectly in the major programs I have been describing. But all these officers are nevertheless essential to the success of our foreign policies and, in turn, to the protection of American security.

The task of maintaining initimate and constructive relationships with other nations over a long period of years is not simple or easy. Like numerous other tasks we face in developing and carrying out our foreign policies, it cannot be accomplished by tricks, gimmicks, or slogans. What we must rely upon principally is old-fashioned diplomacy-solid diplomatic effort allied on a day-to-day basis. There is no substitute for intelligent and energetic diplomatic talent-for the right men, in the right numbers, at the right places and the right times-with adequate supporting services. In other words, there is no substitute for hard work and for the means to get this work accomplished.

When I stop to think about it, I am always amazed at the scope and complexity of our tasks in the European Bureau of the State Department. In addition to the 27 diplomatic missions that we supervise, we also oversee the work of 82 consulates in foreign countries which are engaged in supplying various services to American citizens and American business interests. In an average week, our Bureau office in Washington receives 770 cables and 560 dispatches from foreign posts. Some of these are purely informational; others require decisions and actions by various agencies of the United States Government. In an average week we also send out approximately 200 cables and 160 instructional messages in other forms. In addition, of course, there are thousands of other memoranda, letters from American citizens, congressional requests, and so forth. All told, we are required to deal with about 18,000 separate documents each week. Sometimes a single communication from a foreign government may require weeks of research and analysis. Sometimes a single letter from a Member of Congress may compel an officer to spend several days in digging out the facts needed for a reply. The problems presented by some of these documents require consultation among as many as 7 or 8 different Federal agencies and sometimes involve decisions that can only be made by the President himself. And all this paperwork, moreover, is only a part of the total workload, which includes innumerable personal contacts with foreign officials and with private citizens.

Speaking to a group of citizens a few months ago, I said that the Department of State is our first line of defense in the cold war. It is equally true that our diplomatic establishment offers us, by all odds, our best line of defense. No man, woman, or child in this country or any other country can be sure of safety in the event another general war breaks out. Unless we can be successful in protecting our national security by political, economic, and psychological means and by the other devices of diplomacy, we may eventually find that we cannot attain protection at all except by means of a military struggle which might devastate the victorious nations along with the vanquished. It is for this reason that I have no hesitation in seeking the manpower, the money, and the supporting facilities required to do the best diplomatic job of which we are capable.

I think we can honestly say that we have done a good job in 1954. It has been a busy and productive year. In our relations with the widespread area which falls under the jurisdiction of the European Bureau, I think there can be no question but that the interests of this country are in a sounder and stronger position that they were 1 year ago. The coming year should be equally busy and filled with challenging problems. Whatever may be the military designs of the Communist bloc, or their current political tactics, we have no sign of any relaxation of their determination to penetrate the free world, by any means available, and eventually to dominate the entire planet.

But this fact need give us no cause for dismay. What has been accomplished during the past year is a good indication of what can be accomplished in the future, provided we have the means to do the job. Under the leadership of President Eisenhower and Secretary Dulles, I think we can look forward to a year in which we will not only be able to protect our basic interests but also move forward in a continuing initiative to strengthen the position of free society throughout the world.

EFFECT OF HOUSE REDUCTION

Mr. MERCHANT. The State Department appropriation bill passed by the House has the effect of denying to the Bureau of European Affairs all the increases requested for 1956.

As Mr. Wilber explained, the departmental portion of our budget is not affected. The increase relates to our operation abroad.

PERSONNEL STRENGTH ABROAD

As you will note from our budget document, we report a current overseas position authorization of 1,000 Americans and 1,364 locally employed.

While these are large figures, they are perhaps easier to understand if they are thought of as permitting an average consulate strength of 5 American employees and an average mission strength of 27 American employees.

If we exclude London, Paris, and Rome, which are our three largest missions, the average strength of our embassy and legation staffs is 18 American employees. That includes, if course, clerical help as well as officers.

In fact, there are on the average in all our missions in Europe only 10 officers engaged in political, economic, and consular work. The remainder are engaged in clerical, communications, and administrative activities.

BREAKDOWN ON PERSONNEL INCREASE REQUESTED

It is against this background that I urge the restoration of the House cut, to enable us to have an increase of 73 Americans and 66 local employees.

That is a dollar increase of $792,200. This is an increase of a little less than 6 percent. Even with that increase we will remain some 29 percent below the staffing level of 1951.

RELATIONSHIP OF FUND REQUEST TO EXPANDED ECONOMIC ACTIVITIES

PROGRAM

Senator ELLENDER. What portion of this $792,200 is included in this request that we spoke about a while ago of $1,600,000?

Mr. WILBER. There are 44 Americans, Mr. Chairman, and 51 locals. Senator ELLENDER. What does that mean in dollars?

Mr. WILBER. $558,786.

Senator KILGORE. So actually, aside from that then, your request would be how many positions and how much money?

Senator ELLENDER. According to the chart before me it would be 139 positions. How many of these additional employees would be used to augment your economic sections in the countries in which you hope to have them engaged?