GENERAL STATEMENT

Dr. CONANT. When I appeared before the committees of Congress to defend the budget last April for that coming fiscal year, the fiscal year in which we are now operating, I said that we expected to become an embassy and cease to be a high commission during that period of time. I must admit that when I made that statement last April, I thought that by now, in February of 1955, we would be an embassy, and the High Commissioner's Office would have disappeared. That has not occurred.

Nevertheless, I am still of the opinion and confident that before this fiscal year is ended, this transition will in fact have taken place. Therefore, this budget is based on the assumption that there will be an embassy in Bonn, representing the United States Government there.

In addition, of course, however, we will continue with our responsibilities as an occupying power in Berlin.

Senator KILGORE. Doctor, let me interrupt at that point. I would like to tell you that if at some point you want to say something here to the committee in executive session, and you don't want it made a part of the record, if you indicate it before you state it, it will not be made a part of the record.

Senator GREEN. Would the Commissioner prefer not to be interrupted?

Dr. CONANT. I would be glad to be interrupted.

EMBASSY STATUS

Senator GREEN. What is the difference in the cost? You speak as though it was some importance in cost to the United States Government if it is made an embassy.

Dr. CONANT. I can illustrate that by the fact that the budget which we are operating on this year is an economy even over last year's, and last year's represented a big cut over the previous year.

Perhaps the best way of putting it is that in 1952 we had a budget which for these same functions that I am presenting here was three times the budget we have here. That is because in the High Commissioner's Office we had all sorts of responsibilities and ran an import system, and we were essentially a military government.

Senator GREEN. Then do I understand that if the embassy is established, it will be a great reduction in expense?

Dr. CONANT. It will be, and we have so budgeted. It will not be a reduction in expense from what I am presenting as a budget. Senator GREEN. Can you give us an idea of the amount, assuming that your budget is correct and there is an embassy established, between that and what it would be otherwise?

Dr. CONANT. We have already made our arrangements so that in this transition year in which we are now operating, we have already given up very largely the occupation functions so that we are practically down to an embassy status.

Therefore, the difference between this budget and the budget we are now operating on represents only the economies we can make under essentially an embassy status. For this year we have already made essentially the transition.

Senator GREEN. That has already been saved then?

COMPARISON OF ESTIMATE WITH PRIOR YEARS

Dr. CONANT. That is the difference between this year's budget and the previous year, between 1955 fiscal and 1954 fiscal.

Mr. HEFNER. The 1955 budget is $7,561,479 as shown on the summary table. Our request for 1956 is $6,400,000.

Dr. CONANT. And what would it be for the last fiscal year?

Mr. HEFNER. That is $10,300,916.

Dr. CONANT. Then it goes from $10,300,916 to $6,400,000. That is a very large saving.

FUNCTIONS ELIMINATED

Senator KILGORE. At that point, what occupation functions do you have? Are there any other occupation functions that you are cutting out in anticipation of this?

Dr. CONANT. Over the period of years we have given up the socalled Land Commissioner's Office, and we have given up the occupation courts, and we have cut down the number of people concerned in our various boards.

There is also the Military Security Board, where we have a much smaller force. We have practically tapered ourselves into an embassy status there. That is the point I want to make.

Therefore, this budget does represent the savings we can represent on an embassy basis.

Senator KILGORE. You have estimated $781,000 out of $15 million appropriated. You have a savings there.

PERSONNEL STRENGTH

Senator HAYDEN. I have a question I wanted to ask there. What has been the reduction in both American and German employees? Dr. CONANT. We can give you those exact figures. I have them here. To be sure that I am not misreading our charts, I will ask Mr. Hefner to give them to you for the different years.

Mr. HEFNER. For example, during 1952, the number of United States employees totaled 1,343. In fiscal year 1955, the number of United States employees total 505. Our 1956 request is 354 United States employees and 49 employees in the Department.

Senator HAYDEN. That is from the United States?

Mr. HEFNER. Yes, in the High Commissioner's Office.

Senator HAYDEN. And then there was the question about the number of Germans employed.

Mr. HEFNER. On the local staff in 1952 we had 4,232. In 1955 it was 1,134, and our request in 1956 is for 793 local employees.

SITUATION IN BONN

Dr. CONANT. Mr. Chairman, although as I have explained we are essentially down to an embassy basis and are presenting our budget on an embassy basis for the coming fiscal year, I would like to emphasize briefly, as I have in my prepared statement, the difference between the situation that will face the Ambassador and Embassy staff in Bonn and that in other countries.