May 24, 1951
To the Congress of the United States:
Three weeks ago I transmitted to the Congress a request for 60 billion dollars for the United States defense establishment during the fiscal year ending June 30, 1952.
I am now recommending for the fiscal year ending June 30, 1952, a Mutual Security Program as follows:
(1) Military assistance to other free nations in the amount of 6.25 billion dollars.
(2) Economic assistance to other free nations in the amount of 2.25 billion dollars, primarily to support expanded defense efforts abroad.
These amounts compare with 5.3 billion dollars appropriated for military assistance, and 3.0 billion dollars for economic assistance, in the current fiscal year.
The program for our own Armed Forces and this Mutual Security Program interlock. The one builds upon the other. The purpose of each is the security of the United States--the security of American lives and homes against attack and the security of our rights and liberties as law-abiding members of the world community.
Our country has greater economic strength and larger potential military power than any other nation on earth. But we do not and we should not stand alone. We cannot maintain our civilization, if the rest of the world is split up, subjugated, and organized against us by the Kremlin.
This is a very real and terrible danger. But it can be overcome. To do so, we must work with the rest of the free world: we must join other free nations in common defense plans; we must concert our economic strength with theirs for the common good; and we must help other free countries to build the military and economic power needed to make impossible the communist dreams of world conquest.
This is hard common sense and sound economy. The dollars spent under the Mutual Security Program will build more strength in support of our security than we could build at home with the same expenditure of funds.
This Mutual Security Program brings together our various foreign aid programs, including the arms aid of the Mutual Defense Assistance Program, economic assistance for Europe--now being directed primarily to, support of rearmament--and our economic aid to underdeveloped areas under the Point IV concept. Every one of these programs has proved its worth.
In preparing the present recommendations, each of these separate programs has been revised in the light of the emergency situation that exists in the world and the extraordinary demands that are being placed on our Nation. The amounts, the geographical areas, and the purposes of the aid have all been chosen in order to bring about the greatest possible increase in the security of the United States and the whole free world.
Under this program, the United States will send tanks, guns, and planes to a number of free countries, in Europe and other parts of the world, which are building up armed forces against the threat of communist attack. We will also send economic help to a number of countries--economic help ranging from machinery and materials with which to make weapons, to seeds, medicine, and technical assistance with which to conquer communism's allies of starvation and sickness.
This program was designed with three major characteristics of the Soviet threat in mind:
First, the Soviet threat is world-wide. In Europe, in Asia, in our own hemisphere, the strategy of the Kremlin concentrates on trying to pick off the free countries one by one, so that their resources and people can be organized against the rest of the free world. That is why the Mutual Security Program includes essential help to free countries all around the world which are exposed to the danger of internal or external communist pressures.
Second, the Soviet threat is total, it affects every form of human endeavor. Communist attack may come in the form of armies marching across frontiers; or it may come in the form of internal subversion. Economic warfare, psychological warfare, political infiltration, sabotage, the marching of armies--these are interchangeable aggressive weapons which the Soviet rulers use singly or together according to shifting calculations of greatest advantage. That is why the free world must concentrate upon building not only military strength, but also economic, political, and moral strength. That is why the Mutual Security Program includes economic as well as military assistance.
Third, the Soviet threat is of indefinite duration. The free world must take into account both the possibility that the Soviet rulers may soon start all-out armed aggression, and the possibility that they may carry on their aggressive tactics for many years by measures short of all-out war.
That is why the task of the free world now is not only to build defenses urgently in the immediate future, but also to prepare for the long pull. We of the free countries must make preparations now so that when our armed forces have been built up we will be able to maintain them for years, if necessary, and at the same time grow in underlying economic strength more soundly and more rapidly than the Soviet dictatorship.
The free nations have the resources and the will to overcome all these aspects of the Soviet threat. Together, our potential strength is enormous. The free nations have 75 per cent of the world's industrial capacity and most of the world's raw materials.
Most important of all, free men, all around the world, have the determination to stop communist aggression and to achieve peace. The communist aggression in Korea dispelled any lingering doubts that the Kremlin is willing to threaten the peace of the world.
The job before the free nations is to organize their potential resources and together to convert them into actual military and economic strength. Our associates in the free world are now making vigorous efforts to this end. The Mutual Security Program will provide them with resources required to supplement and make effective their efforts. It is not a program under which we will carry the rest of the free world on our backs. It could not succeed if that were the case. The program is founded on the principle of mutual effort and the knowledge that we can help effectively only those who help themselves.
The proposed aid is related to the resources available to each recipient country, its economic stability, and the burdens it has assumed. Our aid will be provided only for essential needs that the country cannot meet by its own efforts. The need for aid will be continuously reviewed in the light of each country's performance and of economic and political changes.
The bulk of the assistance under the Mutual Security Program will be military equipment. Most of this will go to our partners in the North Atlantic Treaty, but in addition substantial quantities will be supplied to nations in Asia and the Middle East. Military equipment to supplement their own will be provided to countries when they have organized forces which require this equipment in order to become effective fighting units. With our assistance, the free world as a whole will be able to strengthen its military defenses rapidly. Without such aid, the necessary buildup would be dangerously delayed if not impossible.
In addition to supplying military equipment, this program will provide economic aid for a number of countries. In most countries in Europe, and in some countries in other parts of the world, this economic aid will enable the recipients to carry on larger defense programs than would otherwise be possible. In a few cases, some further economic help is necessary to continue progress toward recovery. In Asia and other underdeveloped areas, this program will enable the people to make headway against conditions of poverty and stagnation which are principal assets of Soviet infiltration.
The condition of the people in the underdeveloped areas would be a matter of humanitarian concern even if our national security were not involved. Major improvement in these conditions is necessarily a long-term process, in which the countries' own efforts, private investment, and public developmental loans should play the largest part. Carefully selected projects of technical assistance and initial development on a grant basis, however, can speed up this process and provide tangible benefits even in the short run.
The underdeveloped countries in Asia, South America, and Africa, produce strategic materials which are essential to the defense and economic health of the free world. Production of these materials must be increased. Loans and developmental help are needed. The development of the resources of those countries helps them by raising their standard of living and increasing their resistance to communist subversion, and helps the whole free world by increasing the supply of raw materials essential to defense and to an expanding world economy.
To enable the underdeveloped areas to expand their production of strategic materials, they must be assured of being able to obtain the essential supplies and equipment they need from our country. Indeed, our entire security program will be successful only if the materials available to the free world are distributed in the way that will best contribute to the build-up of total free world strength. The Mutual Security Program, like the program for our own Armed Forces, has been examined from the standpoint of the availability of supplies, materials and equipment that are required to carry it out. We believe these resources can and must be made available out of the expanding production of the free world.
In each area, the United States aid which I propose will be a small part of the total resources available for military and economic purposes--but that small proportion is crucial. In all these areas of the world, larger amounts of United States assistance could be put to good use and would pay real dividends. But I have limited the assistance I am recommending to what is absolutely necessary, under the emergency conditions we are in today, to help these countries build essential military and economic strength.
I propose that the total funds required under the Mutual Security Program be divided as follows:
MUTUAL SECURITY PROGRAM, 1952
[in millions of dollars]
Economic Military
Europe 1, 650 5, 240
Middle East and Northern Africa 125 415
Asia 375 555
Latin America 22 40
Administrative Expenses 78 .....
Total 2, 250 6, 250
The military aid for Greece and Turkey is included in the amount for the Middle East. The amount of the economic aid for Europe includes the economic aid for Greece and Turkey. For convenience, the estimated requirement for administrative expenses for the entire program--approximately 78 million dollars is shown as a single figure under economic aid.
The amounts requested for economic aid include 13 million dollars to be furnished the United Nations and the Organization of American States for their technical assistance programs.
The economic, as well as the military aid recommended, is grant assistance to be provided through appropriated funds. Loans by the Export-Import Bank will also continue to play an important role in our efforts to assist the economic progress of friendly countries. In order that full use may be made of the opportunities for loans, especially to develop strategic materials, I recommend that the lending authority of the Export-Import Bank be increased by one billion dollars. Not all of the increased lending authority, of course, will be used in the coming year.
With this program of assistance to the total free world effort, we will move forward rapidly toward a situation giving reasonable assurance against aggression.
Moreover, the Mutual Security Program is designed to taper off as soon as our safety will permit. The creation of effective military forces in being, coupled with increased productivity, will make it possible, within a few years, for most areas of the free world to maintain their defenses and sustain their economies without further grant assistance from this country.
The creation of this strength will provide a defensive shield against aggression for all the free world. Ever since the war, the free nations have been going' forward to develop their resources and improve the lot of their people. Ever since the war, the free nations have been working together to create a world community in which each nation, respecting world law, can play its distinctive and honorable role.
The only kind of war we seek is the good old fight against man's ancient enemies-poverty, disease, hunger, and illiteracy. This is an effort which makes use of the great elements of our strength--our economic power, our science, our organizing ability, our political principles, our enthusiasm as free men with faith in the future. This is an effort to build, not to destroy; to grow in freedom and justice and mutual respect; to replace the force of arms with the force of peaceful change.
We have no doubt about the outcome of this free world effort. But we must be strong and we must have strong partners if we are to discourage new acts of violence by the power-hungry, and to win the opportunity to carry on our work of peaceful progress.
For the time-being, therefore, the emphasis in our cooperation with the other free nations must be on building our defensive shield against aggression. This shield threatens no one. It will never be used for aggression. But it will be used instantly for defense.
The strengthening of the free world along these lines is the best hope of producing changes in the policies of the Soviet Union without a world war. Military defense forces will put a stop to the Kremlin's hope of easy conquest. Growing prosperity in the free countries will frustrate Soviet political warfare. In these circumstances, the Soviet rulers will face growing internal pressures. The peoples under Soviet control will grow more and more restive under the burden of an aggressive and futile policy of hostility toward the whole world. The rulers of the Soviet Union will be forced by these pressures to abandon their policy of aggression.
It is too early to predict how or when this policy will change. But this program of mutual security will help to bring about such a change. It is certain that the united vigor and cooperative action of the free world can produce such results if we act in time. No system based on slavery and terror can long withstand the tremendous human energies that are released by the advance of freedom.
EUROPE
For the security of the United States, for the survival of freedom in the world, free Europe is a critical area that must be defended.
The people of Europe free from Soviet control number 300 million. They operate a great industrial plant, second only to our own. They occupy a uniquely strategic location. They are at once the most tempting prize for Soviet ambitions and our strongest allies in the world struggle for freedom.
The loss of Europe to the Soviet Union would not only be tragic in itself; it would also result in a tremendous shift of world power. It would compel us to convert the United States into an isolated garrison state.
That is why, three years ago, when the countries of Europe were trembling on the brink of economic collapse, the United States launched its program of aid for European recovery.
That is why, two years ago, the United States and Canada joined ten Western European countries--Iceland, Great Britain, Norway, Denmark, the Netherlands, Belgium, Luxembourg, France, Portugal, and Italy-in the North Atlantic Treaty, declaring that an attack on one would be considered an attack on all.
The North Atlantic Treaty reflects the basic fact of international life that the freedom of Western Europe and the freedom of North America are inseparable.
Under that Treaty, defense plans have been developed by the military leaders of the North Atlantic Treaty countries. Under General Eisenhower's central command, a unified army, navy, and air force is being organized for the defense of Western Europe, composed of national forces assigned by individual nations.
The key element in the defense of free Europe is the ability to hold on the ground. Western Europe lacks the insulation of wide oceans. Major preparations must therefore be made to hold its lands--by well-armed manpower on the ground, by the great striking force of air power, and by a sea power which commands its surrounding waters and important lines of communication.
The European countries themselves are providing the great majority of the forces needed. The United States also has Army, Navy, and Air Force units in Europe, which add to the power of the combined defense forces, and more units will move there, both from this country and from Canada.
Our European partners in the North Atlantic Treaty now have over 2 million men under arms, plus large numbers of trained reserves. The bulk of Western Europe's armed forces are pledged to General Eisenhower's command. Moreover, some of these countries--notably France and Britain-have sizeable forces fighting in Malaya, Indo-China, and Korea, and have other important overseas defense commitments. The combat power of Western European forces is rising steadily as equipment becomes available and periods of military service are lengthened.
Rearmament will cause a severe drain on the Western European countries. Through their own efforts, national and collective, and with the vital assistance of the Marshall Plan, Western Europe has made a remarkable record of economic recovery since 1947. production and trade have been restored and financial conditions have been greatly improved. In the free countries of Europe, communism has been checked and thrown back. The original goals of the Marshall Plan have been largely achieved.
But the western European countries are by no means yet free from the after effects of the most destructive war in history.
They are living on a very narrow economic margin. Whereas our standard of living is nearly 50 per cent higher than it was before World War II, theirs has only recently reached their pre-war levels, which were much lower than ours.
The European countries cannot move rapidly into sufficient large-scale military production to provide all the equipment required for the essential expansion of their forces. Over the next few years, they do expect to increase their production of military equipment. In the coming fiscal year, it will be more than double the pre-Korean rate. But the most they can do will not be enough to equip their armed forces on the time schedule necessary for the common defense.
The United States, with its huge and flexible industrial capacity and greater margin for diverting resources to military production, can and should continue to supply military equipment to our allies in Western Europe. In this way, many divisions, air squadrons, and naval vessels can be brought to active duty in the next year or two which otherwise could not be.
In the immediately coming years, the crucial need is to produce the initial equipment for a very rapid buildup of forces. The expanding European productive capacity will contribute increasingly to this buildup. With this capacity, Europe should be able to meet the smaller continuing maintenance and replacement requirements without substantial outside aid.
The military aid for Europe I am recommending amounts to 5.3 billion dollars. I also recommend economic assistance for this area for the coming year in the amount of 1.65 billion dollars.
Because of the degree of economic recovery which has been attained, the total economic assistance I am requesting for European countries next year--despite the large new burdens of European rearmament--is substantially reduced from the amount we have provided in the current fiscal year.
However, in the free countries of Europe which are rearming, the proposed increases in military production and the building of armed forces will require large diversions of manpower and other economic resources away from production of goods for consumption, for investment, and for export. To carry these greatly enlarged military burdens, our partners in Europe will be taking measures to increase taxes and mobilize their resources through economic controls. Despite determined efforts in this direction they will need some continuing economic assistance.
Some aid is also proposed for Western Germany, which by its support of occupation forces is assisting the defense effort and which may later make more direct contributions to the common defense. In Austria and Trieste, which cannot directly contribute to the rearmament effort, but whose economies are handicapped by special difficulties, economic aid must also be continued to maintain political stability. Certain economic assistance for Yugoslavia is proposed to help meet its minimum requirements in maintaining strength against the threat of Soviet imperialism.
This economic aid is critical--that is, it is the essential condition of an increase in European military effort. It should make possible European production many times larger than the amount of the support given.
MIDDLE EAST
The countries of the Middle East are, for the most part, less developed industrially than those of Europe. They are, nevertheless, of great importance to the security of the entire free world. This region is a vital link of land, sea, and air communications between Europe, Asia, and Africa. In the free nations of the Middle East, lie half of the oil reserves of the world.
No part of the world is more directly exposed to Soviet pressure. The Kremlin has lost no opportunity to stir these troubled waters, as the post-war record amply demonstrates. Civil war in Greece; pressure for Turkish concessions on the Dardanelles; sponsorship of the rebellious Tudeh party in Iran; furthering of factional strife in the Arab States and Israel all reflect a concerted design for the extension of Soviet domination to this vital area.
There is no simple formula for increasing stability and security in the Middle East. With the help of American military and economic assistance, Soviet pressure has already been firmly resisted in Turkey and the Soviet-inspired guerrilla war has been decisively defeated in Greece. But the pressure against the Middle East is unremitting. It can be overcome only by a continued buildup of armed defenses and the fostering of economic development. Only through such measures can these peoples advance toward stability and improved living conditions, and be assured that their aims can best be achieved through strengthening their associations in the free world.
To these ends, I am recommending 415 million dollars in military aid, for Greece, Turkey, and Iran; a portion of this aid will be available for other Middle Eastern nations if necessary. I am also recommending 125 million dollars in economic aid for Middle Eastern countries, exclusive of Greece and Turkey for whom economic aid is provided as part of the program for Europe. This amount also includes programs of technical assistance to Libya, Liberia, and Ethiopia, three independent states of Africa whose economic problems are similar to those of the Middle Eastern countries.
Continuing military aid for Greece and Turkey will make possible the further strengthening of these countries' large and well trained armed forces, which have already displayed their valiant resolution in the fight for freedom in Korea. In Iran, continuing military aid is required to help build internal security and defense, together with economic aid to help sustain the Iranian economy and give impetus to the much needed longer-term process of economic development for the benefit of the Iranian people.
In the Arab States and Israel, the fundamental requirement is a regional approach to the basic problems of economic development. This is urgently needed to reduce existing tensions, especially through the orderly settlement of homeless refugees. The program for the Arab States will expand needed food production through the development of land and water resources. The program for Israel will help that country to maintain her economy during an especially trying period of her national development. At the same time, the program of assistance to the Arab refugees from Palesfine, which will necessarily extend beyond the coming fiscal year, has the three-fold purpose of assisting the settlement of refugees, of strengthening those States wherein they settle, and assisting both Israel and the Arab States by removing this threat to the peace of the area.
The program I am now proposing is a balanced program for strengthening the security of the Middle East. It will make a solid contribution to our hopes for peace.
ASIA AND THE PACIFIC
In Asia, in a vast area stretching from Afghanistan to Korea, free countries are struggling to meet communist aggression in all its many forms. Some of these countries are battling the communist armies of Soviet satellites; some are engaged in bitter civil strife against communist-led guerrillas; all of them face the immediate danger of communist subversion.
Soviet intentions with regard to these countries are unmistakably clear. Using the weapons of subversion, false propaganda and civil war, the Kremlin has already reduced China to the status of a satellite. The Soviet rulers have turned their satellite armies loose on the Republic of Korea. Communist rebellion is raging in Indo-China. In Burma, the Philippines, and other places, communist-inspired groups are stirring up internal disorder. In all countries, they are trying to exploit deep-seated economic difficulties--poverty, illiteracy and disease.
This campaign threatens to absorb the manpower and the vital resources of the East into the Soviet design of world conquest. It threatens to deprive the free nations of some of their most vitally needed raw materials. It threatens to turn more of the peaceful millions of the East into armies to be used as pawns at the disposal of the Kremlin.
Aside from immediate considerations of security, the continued independence of these nations is vital to the future of the free world. Many of these nations are new to self government. They have dedicated themselves to the ideals of national independence, of human liberty, and social progress. Their hundreds of millions of citizens are eager for justice and liberty and a stake in the future.
These countries demonstrate the power and vitality of the ideals of our own American Revolution; they mark the sweeping advance across the world of the concepts of freedom and brotherhood. To lose these countries to the rulers of the Kremlin would be more than a blow to our military security and our economic life. It would be a terrible defeat for the ideals of freedom--with grave spiritual consequences for men everywhere who share our faith in freedom.
All these considerations make it essential for the United States to help the free countries of Asia in their struggle to make good their independence and bring economic and social progress to their people. Where the governments of these countries are striving to establish free and stable political institutions, to build up their military defenses, and to raise the standard of living above the level of bare subsistence, we can and should give them assistance. We cannot replace their own strong efforts, but we can supplement them.
This Mutual Security Program is intended to do that. On the military side, it will supply certain of the Asian countries with items of military equipment and the training they need for their defense forces. On the economic side, it will provide a number of the Asian countries with the most urgently needed commodities, machinery, and tools, and with technical advice in such fields as agriculture, industry, health, and governmental administration.
The assistance I am recommending for Asian countries, 555 million dollars in military aid and 375 million dollars in economic aid, is so planned as to meet the most pressing needs in the various countries, and is intended to provide the crucial margin of resources which will enable them to move forward.
Military assistance under this program will go to the Chinese armies on Formosa, to help keep that island out of the hands of Communist China. It will go to Indo-China, where over 100,000 French troops are fighting side-by-side with the forces of Viet Nam, Laos, and Cambodia against communist-led forces. It will go to the Philippines and to Thailand, to help build forces strong enough to insure internal security and discourage outside attack. Some of these military assistance funds will also be available for allocation to other countries in the area if a critical need arises.
The military aid under this program will supplement other military efforts against communism in Asia. The countries we will be aiding, and a number of others, are supporting military forces with their own funds. France is supplying the largest part of the military supplies needed in Indo-China, and Britain is supplying her forces which are fighting guerrillas in the Malay States. The substantial military aid we are giving to the forces of the Republic of Korea is included in the budget for our military services.
The struggle for security and peace in Asia is far more than a military matter. In many of the Asian countries, including all the countries which need military aid, economic assistance is also required.
These countries urgently need help in their efforts to overcome the desperate conditions of poverty, illiteracy, and disease which are the heart of the Asian problem. It is a terrible fact that poverty is increasing rather than diminishing in much of Asia. Millions of people exist at bare subsistence levels.
The Asian countries are doing what they can on their own to meet this problem. An
encouraging proposal affecting a number of these countries is the Colombo Plan for technical assistance and economic development worked out under the auspices of the British Commonwealth. In addition, some aid to Asian countries will be furnished through the programs of the United Nations.
These sources of aid alone will not, however, suffice to reverse the downward trend in living standards. Aid from the United States is also necessary.
Sizeable programs of technical assistance and capital development are now being carried on by the Economic Cooperation Administration in some of these countries under the Point IV concept. A portion of the funds I am now recommending will provide for continuing these programs and extending them to other countries. These funds will be used to send out technical experts and equipment needed to improve health, agriculture, transportation, and communications services and assist in the development of natural resources.
In addition, the funds I am now recommending will provide necessary economic support for defense programs in Indo-China, Formosa, and the Philippines.
Finally, the economic aid funds I am requesting for Asia include 112.5 million dollars for the United Nations Korean Reconstruction Agency. Together with 50 million dollars which are likely to remain unexpended from funds available for Korean aid for the present fiscal year, these funds will be made available to the Agency at such time as conditions in Korea permit the reconstruction program to be undertaken.
In preparing these recommendations for economic aid, projects which should be financed by loans have been excluded. The investment of private capital and public loans from the International Bank for Reconstruction and Development and the Export-Import Bank will play an important part in the economic progress of Asia, as in other parts of the world.
In the administration of this program, loans, grants and technical assistance will be meshed together with the plans and efforts of each of the recipient countries for the development of its own resources. Only in this manner can the various kinds of outside aid available to an Asian country be used most effectively and without duplication or overlapping.
These economic programs will have as their goal the creation of conditions eliminating the need for further grant aid for economic development. Such programs look toward the creation of sound government finances and public services, and toward more stable economic and political foundations for raising living standards and creating broader opportunities. It will take time to reach these goals but they must be steadily pursued. Our aid will provide a dynamic force in that direction and will thus contribute strongly to freedom and peace in Asia.
LATIN AMERICA
The United States and the other American Republics agreed in 1947, in the Treaty of Rio de Janeiro, that an armed attack upon one of them is to be regarded as an armed attack on all, and to act together for the common defense.
Our good neighbors to the south are more than willing to share in defending the hemisphere. But there are real limits on their ability to do so without some aid from us. They produce little modern military equipment.
During World War II, defense tasks in Latin America required the use of over 75,000 United States troops as well as considerable United States naval forces. The armed forces of the Latin American states did not at that time have the equipment or training to carry out those defense tasks by themselves.
It makes good sense that, in planning the defense of this hemisphere, the United States should aid the Latin American countries to prepare for and take over certain hemisphere defense tasks that are of interest to us all; tasks they are willing to do and well able to handle, with a little help in equipping and training their forces. Consequently, I am recommending 40 million dollars in military assistance to these countries.
In addition, I recommend 22 million dollars in economic aid to carry forward the excellent technical assistance work that is now underway in the other American states in developing agriculture, natural resources, and health, education and other types of basic services. This type of assistance has already proved its worth in the Latin American area. It is helping to raise living standards, hasten economic development, and strengthen both peoples and governments in warding off the danger of communist subversion.
This grant assistance is helping to lay the foundation for an expanding volume of capital development, through public and private loans and investments, in the other American Republics. The United States is already providing major economic help to Latin American countries through loans by the Export-Import Bank. Fortunately, the relative geographic security and the economic position of the American Republics make possible large amounts of private loans and investments--the normal and desirable means of fostering economic development.
ADMINISTRATION OF THE PROGRAM
The proposed organization for administering the Mutual Security Program is based on the experience we have had so far, under the arrangements established by the Congress in legislation authorizing previous military and economic aid programs.
The administration of military aid will be handled, as at present, by the Department of Defense, which will be able to insure full coordination between United States production of equipment for our own forces and equipment for our allies. The Department of Defense is responsible for evaluating the equipment deficiencies of the forces of our allies, under mutually agreed strategic concepts, and is charged with procurement, inspection and transportation of military equipment provided by this country.
Administration of economic assistance for Western Europe and most of the countries in the Middle East, Africa, and South and Southeast Asia will be carried on by the Economic Cooperation Administration. This agency has already proved its effectiveness in aiding countries to achieve economic recovery and is now administering economic assistance in support of our mutual defense and security objectives in Europe and Southeast Asia. The economic aid programs for Latin America and certain other countries in which the economic aid is limited almost wholly to technical assistance are now administered by the Technical Cooperation Administration of the State Department. Consideration is now being given to the question of whether or not it would be desirable to transfer the administration of these programs to the Economic Cooperation Administration during the period that that agency is administering other foreign economic aid programs.
These agencies will work very closely with the Export-Import Bank and the International Bank for Reconstruction and Development in achieving a proper integration between loan and grant programs.
In order to insure coordinated policy guidance in administering military and economic aid programs, a key coordinating committee has been established composed of senior representatives of the executive agencies concerned. This International Security Affairs Committee has developed out of the experience of an executive committee that had previously been coordinating operations under the Mutual Defense Assistance Act. The chairman of the new committee, the Director of International Security Affairs, is a senior official of the Department of State confirmed by the Senate, and occupies a position authorized by the Congress under the Mutual Defense Assistance Act.
I recommend this Mutual Security Program to the Congress as another vital step along the road to real security and lasting peace. Peace through collective strength is a difficult course. It is not without danger. There can be no absolute assurance of success. But there are far greater dangers in any other course.
We cannot win peace through appeasement. We cannot gain security in isolation. We will not surrender.
Let it never be forgotten, however, that we are ready as we have always been, to follow the road of peaceful settlement of disputes, of control and reduction of armaments, of cooperation in applying man's talents to the building of a just and prosperous world society.
If the rulers of the Soviet Union did not drown their words of peace with the drums of war, if their professions of peaceful intent were matched by deeds, the century in which we live could become the brightest man has known upon this earth. For our part, if peace could be made sure, the American people would be glad to invest a part of the resources we must now allocate to defense to a large scale program of world-wide economic development.
The benefits of such a program would be immense; the cost a small part of what we must now pay to build our defenses at home and abroad. With such a program, we could, in cooperation with other peoples, inaugurate the most hopeful and fruitful period of peaceful development the world has ever seen.
This was our vision six years ago, when the war came to a close. Let us never forget it. And let us never give up our hopes and our efforts to make it a reality.
HARRY S. TRUMAN
NOTE: For the statement by the President upon signing the Mutual Security Act, see Item 250
To the Congress of the United States:
Three weeks ago I transmitted to the Congress a request for 60 billion dollars for the United States defense establishment during the fiscal year ending June 30, 1952.
I am now recommending for the fiscal year ending June 30, 1952, a Mutual Security Program as follows:
(1) Military assistance to other free nations in the amount of 6.25 billion dollars.
(2) Economic assistance to other free nations in the amount of 2.25 billion dollars, primarily to support expanded defense efforts abroad.
These amounts compare with 5.3 billion dollars appropriated for military assistance, and 3.0 billion dollars for economic assistance, in the current fiscal year.
The program for our own Armed Forces and this Mutual Security Program interlock. The one builds upon the other. The purpose of each is the security of the United States--the security of American lives and homes against attack and the security of our rights and liberties as law-abiding members of the world community.
Our country has greater economic strength and larger potential military power than any other nation on earth. But we do not and we should not stand alone. We cannot maintain our civilization, if the rest of the world is split up, subjugated, and organized against us by the Kremlin.
This is a very real and terrible danger. But it can be overcome. To do so, we must work with the rest of the free world: we must join other free nations in common defense plans; we must concert our economic strength with theirs for the common good; and we must help other free countries to build the military and economic power needed to make impossible the communist dreams of world conquest.
This is hard common sense and sound economy. The dollars spent under the Mutual Security Program will build more strength in support of our security than we could build at home with the same expenditure of funds.
This Mutual Security Program brings together our various foreign aid programs, including the arms aid of the Mutual Defense Assistance Program, economic assistance for Europe--now being directed primarily to, support of rearmament--and our economic aid to underdeveloped areas under the Point IV concept. Every one of these programs has proved its worth.
In preparing the present recommendations, each of these separate programs has been revised in the light of the emergency situation that exists in the world and the extraordinary demands that are being placed on our Nation. The amounts, the geographical areas, and the purposes of the aid have all been chosen in order to bring about the greatest possible increase in the security of the United States and the whole free world.
Under this program, the United States will send tanks, guns, and planes to a number of free countries, in Europe and other parts of the world, which are building up armed forces against the threat of communist attack. We will also send economic help to a number of countries--economic help ranging from machinery and materials with which to make weapons, to seeds, medicine, and technical assistance with which to conquer communism's allies of starvation and sickness.
This program was designed with three major characteristics of the Soviet threat in mind:
First, the Soviet threat is world-wide. In Europe, in Asia, in our own hemisphere, the strategy of the Kremlin concentrates on trying to pick off the free countries one by one, so that their resources and people can be organized against the rest of the free world. That is why the Mutual Security Program includes essential help to free countries all around the world which are exposed to the danger of internal or external communist pressures.
Second, the Soviet threat is total, it affects every form of human endeavor. Communist attack may come in the form of armies marching across frontiers; or it may come in the form of internal subversion. Economic warfare, psychological warfare, political infiltration, sabotage, the marching of armies--these are interchangeable aggressive weapons which the Soviet rulers use singly or together according to shifting calculations of greatest advantage. That is why the free world must concentrate upon building not only military strength, but also economic, political, and moral strength. That is why the Mutual Security Program includes economic as well as military assistance.
Third, the Soviet threat is of indefinite duration. The free world must take into account both the possibility that the Soviet rulers may soon start all-out armed aggression, and the possibility that they may carry on their aggressive tactics for many years by measures short of all-out war.
That is why the task of the free world now is not only to build defenses urgently in the immediate future, but also to prepare for the long pull. We of the free countries must make preparations now so that when our armed forces have been built up we will be able to maintain them for years, if necessary, and at the same time grow in underlying economic strength more soundly and more rapidly than the Soviet dictatorship.
The free nations have the resources and the will to overcome all these aspects of the Soviet threat. Together, our potential strength is enormous. The free nations have 75 per cent of the world's industrial capacity and most of the world's raw materials.
Most important of all, free men, all around the world, have the determination to stop communist aggression and to achieve peace. The communist aggression in Korea dispelled any lingering doubts that the Kremlin is willing to threaten the peace of the world.
The job before the free nations is to organize their potential resources and together to convert them into actual military and economic strength. Our associates in the free world are now making vigorous efforts to this end. The Mutual Security Program will provide them with resources required to supplement and make effective their efforts. It is not a program under which we will carry the rest of the free world on our backs. It could not succeed if that were the case. The program is founded on the principle of mutual effort and the knowledge that we can help effectively only those who help themselves.
The proposed aid is related to the resources available to each recipient country, its economic stability, and the burdens it has assumed. Our aid will be provided only for essential needs that the country cannot meet by its own efforts. The need for aid will be continuously reviewed in the light of each country's performance and of economic and political changes.
The bulk of the assistance under the Mutual Security Program will be military equipment. Most of this will go to our partners in the North Atlantic Treaty, but in addition substantial quantities will be supplied to nations in Asia and the Middle East. Military equipment to supplement their own will be provided to countries when they have organized forces which require this equipment in order to become effective fighting units. With our assistance, the free world as a whole will be able to strengthen its military defenses rapidly. Without such aid, the necessary buildup would be dangerously delayed if not impossible.
In addition to supplying military equipment, this program will provide economic aid for a number of countries. In most countries in Europe, and in some countries in other parts of the world, this economic aid will enable the recipients to carry on larger defense programs than would otherwise be possible. In a few cases, some further economic help is necessary to continue progress toward recovery. In Asia and other underdeveloped areas, this program will enable the people to make headway against conditions of poverty and stagnation which are principal assets of Soviet infiltration.
The condition of the people in the underdeveloped areas would be a matter of humanitarian concern even if our national security were not involved. Major improvement in these conditions is necessarily a long-term process, in which the countries' own efforts, private investment, and public developmental loans should play the largest part. Carefully selected projects of technical assistance and initial development on a grant basis, however, can speed up this process and provide tangible benefits even in the short run.
The underdeveloped countries in Asia, South America, and Africa, produce strategic materials which are essential to the defense and economic health of the free world. Production of these materials must be increased. Loans and developmental help are needed. The development of the resources of those countries helps them by raising their standard of living and increasing their resistance to communist subversion, and helps the whole free world by increasing the supply of raw materials essential to defense and to an expanding world economy.
To enable the underdeveloped areas to expand their production of strategic materials, they must be assured of being able to obtain the essential supplies and equipment they need from our country. Indeed, our entire security program will be successful only if the materials available to the free world are distributed in the way that will best contribute to the build-up of total free world strength. The Mutual Security Program, like the program for our own Armed Forces, has been examined from the standpoint of the availability of supplies, materials and equipment that are required to carry it out. We believe these resources can and must be made available out of the expanding production of the free world.
In each area, the United States aid which I propose will be a small part of the total resources available for military and economic purposes--but that small proportion is crucial. In all these areas of the world, larger amounts of United States assistance could be put to good use and would pay real dividends. But I have limited the assistance I am recommending to what is absolutely necessary, under the emergency conditions we are in today, to help these countries build essential military and economic strength.
I propose that the total funds required under the Mutual Security Program be divided as follows:
MUTUAL SECURITY PROGRAM, 1952
[in millions of dollars]
Economic Military
Europe 1, 650 5, 240
Middle East and Northern Africa 125 415
Asia 375 555
Latin America 22 40
Administrative Expenses 78 .....
Total 2, 250 6, 250
The military aid for Greece and Turkey is included in the amount for the Middle East. The amount of the economic aid for Europe includes the economic aid for Greece and Turkey. For convenience, the estimated requirement for administrative expenses for the entire program--approximately 78 million dollars is shown as a single figure under economic aid.
The amounts requested for economic aid include 13 million dollars to be furnished the United Nations and the Organization of American States for their technical assistance programs.
The economic, as well as the military aid recommended, is grant assistance to be provided through appropriated funds. Loans by the Export-Import Bank will also continue to play an important role in our efforts to assist the economic progress of friendly countries. In order that full use may be made of the opportunities for loans, especially to develop strategic materials, I recommend that the lending authority of the Export-Import Bank be increased by one billion dollars. Not all of the increased lending authority, of course, will be used in the coming year.
With this program of assistance to the total free world effort, we will move forward rapidly toward a situation giving reasonable assurance against aggression.
Moreover, the Mutual Security Program is designed to taper off as soon as our safety will permit. The creation of effective military forces in being, coupled with increased productivity, will make it possible, within a few years, for most areas of the free world to maintain their defenses and sustain their economies without further grant assistance from this country.
The creation of this strength will provide a defensive shield against aggression for all the free world. Ever since the war, the free nations have been going' forward to develop their resources and improve the lot of their people. Ever since the war, the free nations have been working together to create a world community in which each nation, respecting world law, can play its distinctive and honorable role.
The only kind of war we seek is the good old fight against man's ancient enemies-poverty, disease, hunger, and illiteracy. This is an effort which makes use of the great elements of our strength--our economic power, our science, our organizing ability, our political principles, our enthusiasm as free men with faith in the future. This is an effort to build, not to destroy; to grow in freedom and justice and mutual respect; to replace the force of arms with the force of peaceful change.
We have no doubt about the outcome of this free world effort. But we must be strong and we must have strong partners if we are to discourage new acts of violence by the power-hungry, and to win the opportunity to carry on our work of peaceful progress.
For the time-being, therefore, the emphasis in our cooperation with the other free nations must be on building our defensive shield against aggression. This shield threatens no one. It will never be used for aggression. But it will be used instantly for defense.
The strengthening of the free world along these lines is the best hope of producing changes in the policies of the Soviet Union without a world war. Military defense forces will put a stop to the Kremlin's hope of easy conquest. Growing prosperity in the free countries will frustrate Soviet political warfare. In these circumstances, the Soviet rulers will face growing internal pressures. The peoples under Soviet control will grow more and more restive under the burden of an aggressive and futile policy of hostility toward the whole world. The rulers of the Soviet Union will be forced by these pressures to abandon their policy of aggression.
It is too early to predict how or when this policy will change. But this program of mutual security will help to bring about such a change. It is certain that the united vigor and cooperative action of the free world can produce such results if we act in time. No system based on slavery and terror can long withstand the tremendous human energies that are released by the advance of freedom.
EUROPE
For the security of the United States, for the survival of freedom in the world, free Europe is a critical area that must be defended.
The people of Europe free from Soviet control number 300 million. They operate a great industrial plant, second only to our own. They occupy a uniquely strategic location. They are at once the most tempting prize for Soviet ambitions and our strongest allies in the world struggle for freedom.
The loss of Europe to the Soviet Union would not only be tragic in itself; it would also result in a tremendous shift of world power. It would compel us to convert the United States into an isolated garrison state.
That is why, three years ago, when the countries of Europe were trembling on the brink of economic collapse, the United States launched its program of aid for European recovery.
That is why, two years ago, the United States and Canada joined ten Western European countries--Iceland, Great Britain, Norway, Denmark, the Netherlands, Belgium, Luxembourg, France, Portugal, and Italy-in the North Atlantic Treaty, declaring that an attack on one would be considered an attack on all.
The North Atlantic Treaty reflects the basic fact of international life that the freedom of Western Europe and the freedom of North America are inseparable.
Under that Treaty, defense plans have been developed by the military leaders of the North Atlantic Treaty countries. Under General Eisenhower's central command, a unified army, navy, and air force is being organized for the defense of Western Europe, composed of national forces assigned by individual nations.
The key element in the defense of free Europe is the ability to hold on the ground. Western Europe lacks the insulation of wide oceans. Major preparations must therefore be made to hold its lands--by well-armed manpower on the ground, by the great striking force of air power, and by a sea power which commands its surrounding waters and important lines of communication.
The European countries themselves are providing the great majority of the forces needed. The United States also has Army, Navy, and Air Force units in Europe, which add to the power of the combined defense forces, and more units will move there, both from this country and from Canada.
Our European partners in the North Atlantic Treaty now have over 2 million men under arms, plus large numbers of trained reserves. The bulk of Western Europe's armed forces are pledged to General Eisenhower's command. Moreover, some of these countries--notably France and Britain-have sizeable forces fighting in Malaya, Indo-China, and Korea, and have other important overseas defense commitments. The combat power of Western European forces is rising steadily as equipment becomes available and periods of military service are lengthened.
Rearmament will cause a severe drain on the Western European countries. Through their own efforts, national and collective, and with the vital assistance of the Marshall Plan, Western Europe has made a remarkable record of economic recovery since 1947. production and trade have been restored and financial conditions have been greatly improved. In the free countries of Europe, communism has been checked and thrown back. The original goals of the Marshall Plan have been largely achieved.
But the western European countries are by no means yet free from the after effects of the most destructive war in history.
They are living on a very narrow economic margin. Whereas our standard of living is nearly 50 per cent higher than it was before World War II, theirs has only recently reached their pre-war levels, which were much lower than ours.
The European countries cannot move rapidly into sufficient large-scale military production to provide all the equipment required for the essential expansion of their forces. Over the next few years, they do expect to increase their production of military equipment. In the coming fiscal year, it will be more than double the pre-Korean rate. But the most they can do will not be enough to equip their armed forces on the time schedule necessary for the common defense.
The United States, with its huge and flexible industrial capacity and greater margin for diverting resources to military production, can and should continue to supply military equipment to our allies in Western Europe. In this way, many divisions, air squadrons, and naval vessels can be brought to active duty in the next year or two which otherwise could not be.
In the immediately coming years, the crucial need is to produce the initial equipment for a very rapid buildup of forces. The expanding European productive capacity will contribute increasingly to this buildup. With this capacity, Europe should be able to meet the smaller continuing maintenance and replacement requirements without substantial outside aid.
The military aid for Europe I am recommending amounts to 5.3 billion dollars. I also recommend economic assistance for this area for the coming year in the amount of 1.65 billion dollars.
Because of the degree of economic recovery which has been attained, the total economic assistance I am requesting for European countries next year--despite the large new burdens of European rearmament--is substantially reduced from the amount we have provided in the current fiscal year.
However, in the free countries of Europe which are rearming, the proposed increases in military production and the building of armed forces will require large diversions of manpower and other economic resources away from production of goods for consumption, for investment, and for export. To carry these greatly enlarged military burdens, our partners in Europe will be taking measures to increase taxes and mobilize their resources through economic controls. Despite determined efforts in this direction they will need some continuing economic assistance.
Some aid is also proposed for Western Germany, which by its support of occupation forces is assisting the defense effort and which may later make more direct contributions to the common defense. In Austria and Trieste, which cannot directly contribute to the rearmament effort, but whose economies are handicapped by special difficulties, economic aid must also be continued to maintain political stability. Certain economic assistance for Yugoslavia is proposed to help meet its minimum requirements in maintaining strength against the threat of Soviet imperialism.
This economic aid is critical--that is, it is the essential condition of an increase in European military effort. It should make possible European production many times larger than the amount of the support given.
MIDDLE EAST
The countries of the Middle East are, for the most part, less developed industrially than those of Europe. They are, nevertheless, of great importance to the security of the entire free world. This region is a vital link of land, sea, and air communications between Europe, Asia, and Africa. In the free nations of the Middle East, lie half of the oil reserves of the world.
No part of the world is more directly exposed to Soviet pressure. The Kremlin has lost no opportunity to stir these troubled waters, as the post-war record amply demonstrates. Civil war in Greece; pressure for Turkish concessions on the Dardanelles; sponsorship of the rebellious Tudeh party in Iran; furthering of factional strife in the Arab States and Israel all reflect a concerted design for the extension of Soviet domination to this vital area.
There is no simple formula for increasing stability and security in the Middle East. With the help of American military and economic assistance, Soviet pressure has already been firmly resisted in Turkey and the Soviet-inspired guerrilla war has been decisively defeated in Greece. But the pressure against the Middle East is unremitting. It can be overcome only by a continued buildup of armed defenses and the fostering of economic development. Only through such measures can these peoples advance toward stability and improved living conditions, and be assured that their aims can best be achieved through strengthening their associations in the free world.
To these ends, I am recommending 415 million dollars in military aid, for Greece, Turkey, and Iran; a portion of this aid will be available for other Middle Eastern nations if necessary. I am also recommending 125 million dollars in economic aid for Middle Eastern countries, exclusive of Greece and Turkey for whom economic aid is provided as part of the program for Europe. This amount also includes programs of technical assistance to Libya, Liberia, and Ethiopia, three independent states of Africa whose economic problems are similar to those of the Middle Eastern countries.
Continuing military aid for Greece and Turkey will make possible the further strengthening of these countries' large and well trained armed forces, which have already displayed their valiant resolution in the fight for freedom in Korea. In Iran, continuing military aid is required to help build internal security and defense, together with economic aid to help sustain the Iranian economy and give impetus to the much needed longer-term process of economic development for the benefit of the Iranian people.
In the Arab States and Israel, the fundamental requirement is a regional approach to the basic problems of economic development. This is urgently needed to reduce existing tensions, especially through the orderly settlement of homeless refugees. The program for the Arab States will expand needed food production through the development of land and water resources. The program for Israel will help that country to maintain her economy during an especially trying period of her national development. At the same time, the program of assistance to the Arab refugees from Palesfine, which will necessarily extend beyond the coming fiscal year, has the three-fold purpose of assisting the settlement of refugees, of strengthening those States wherein they settle, and assisting both Israel and the Arab States by removing this threat to the peace of the area.
The program I am now proposing is a balanced program for strengthening the security of the Middle East. It will make a solid contribution to our hopes for peace.
ASIA AND THE PACIFIC
In Asia, in a vast area stretching from Afghanistan to Korea, free countries are struggling to meet communist aggression in all its many forms. Some of these countries are battling the communist armies of Soviet satellites; some are engaged in bitter civil strife against communist-led guerrillas; all of them face the immediate danger of communist subversion.
Soviet intentions with regard to these countries are unmistakably clear. Using the weapons of subversion, false propaganda and civil war, the Kremlin has already reduced China to the status of a satellite. The Soviet rulers have turned their satellite armies loose on the Republic of Korea. Communist rebellion is raging in Indo-China. In Burma, the Philippines, and other places, communist-inspired groups are stirring up internal disorder. In all countries, they are trying to exploit deep-seated economic difficulties--poverty, illiteracy and disease.
This campaign threatens to absorb the manpower and the vital resources of the East into the Soviet design of world conquest. It threatens to deprive the free nations of some of their most vitally needed raw materials. It threatens to turn more of the peaceful millions of the East into armies to be used as pawns at the disposal of the Kremlin.
Aside from immediate considerations of security, the continued independence of these nations is vital to the future of the free world. Many of these nations are new to self government. They have dedicated themselves to the ideals of national independence, of human liberty, and social progress. Their hundreds of millions of citizens are eager for justice and liberty and a stake in the future.
These countries demonstrate the power and vitality of the ideals of our own American Revolution; they mark the sweeping advance across the world of the concepts of freedom and brotherhood. To lose these countries to the rulers of the Kremlin would be more than a blow to our military security and our economic life. It would be a terrible defeat for the ideals of freedom--with grave spiritual consequences for men everywhere who share our faith in freedom.
All these considerations make it essential for the United States to help the free countries of Asia in their struggle to make good their independence and bring economic and social progress to their people. Where the governments of these countries are striving to establish free and stable political institutions, to build up their military defenses, and to raise the standard of living above the level of bare subsistence, we can and should give them assistance. We cannot replace their own strong efforts, but we can supplement them.
This Mutual Security Program is intended to do that. On the military side, it will supply certain of the Asian countries with items of military equipment and the training they need for their defense forces. On the economic side, it will provide a number of the Asian countries with the most urgently needed commodities, machinery, and tools, and with technical advice in such fields as agriculture, industry, health, and governmental administration.
The assistance I am recommending for Asian countries, 555 million dollars in military aid and 375 million dollars in economic aid, is so planned as to meet the most pressing needs in the various countries, and is intended to provide the crucial margin of resources which will enable them to move forward.
Military assistance under this program will go to the Chinese armies on Formosa, to help keep that island out of the hands of Communist China. It will go to Indo-China, where over 100,000 French troops are fighting side-by-side with the forces of Viet Nam, Laos, and Cambodia against communist-led forces. It will go to the Philippines and to Thailand, to help build forces strong enough to insure internal security and discourage outside attack. Some of these military assistance funds will also be available for allocation to other countries in the area if a critical need arises.
The military aid under this program will supplement other military efforts against communism in Asia. The countries we will be aiding, and a number of others, are supporting military forces with their own funds. France is supplying the largest part of the military supplies needed in Indo-China, and Britain is supplying her forces which are fighting guerrillas in the Malay States. The substantial military aid we are giving to the forces of the Republic of Korea is included in the budget for our military services.
The struggle for security and peace in Asia is far more than a military matter. In many of the Asian countries, including all the countries which need military aid, economic assistance is also required.
These countries urgently need help in their efforts to overcome the desperate conditions of poverty, illiteracy, and disease which are the heart of the Asian problem. It is a terrible fact that poverty is increasing rather than diminishing in much of Asia. Millions of people exist at bare subsistence levels.
The Asian countries are doing what they can on their own to meet this problem. An
encouraging proposal affecting a number of these countries is the Colombo Plan for technical assistance and economic development worked out under the auspices of the British Commonwealth. In addition, some aid to Asian countries will be furnished through the programs of the United Nations.
These sources of aid alone will not, however, suffice to reverse the downward trend in living standards. Aid from the United States is also necessary.
Sizeable programs of technical assistance and capital development are now being carried on by the Economic Cooperation Administration in some of these countries under the Point IV concept. A portion of the funds I am now recommending will provide for continuing these programs and extending them to other countries. These funds will be used to send out technical experts and equipment needed to improve health, agriculture, transportation, and communications services and assist in the development of natural resources.
In addition, the funds I am now recommending will provide necessary economic support for defense programs in Indo-China, Formosa, and the Philippines.
Finally, the economic aid funds I am requesting for Asia include 112.5 million dollars for the United Nations Korean Reconstruction Agency. Together with 50 million dollars which are likely to remain unexpended from funds available for Korean aid for the present fiscal year, these funds will be made available to the Agency at such time as conditions in Korea permit the reconstruction program to be undertaken.
In preparing these recommendations for economic aid, projects which should be financed by loans have been excluded. The investment of private capital and public loans from the International Bank for Reconstruction and Development and the Export-Import Bank will play an important part in the economic progress of Asia, as in other parts of the world.
In the administration of this program, loans, grants and technical assistance will be meshed together with the plans and efforts of each of the recipient countries for the development of its own resources. Only in this manner can the various kinds of outside aid available to an Asian country be used most effectively and without duplication or overlapping.
These economic programs will have as their goal the creation of conditions eliminating the need for further grant aid for economic development. Such programs look toward the creation of sound government finances and public services, and toward more stable economic and political foundations for raising living standards and creating broader opportunities. It will take time to reach these goals but they must be steadily pursued. Our aid will provide a dynamic force in that direction and will thus contribute strongly to freedom and peace in Asia.
LATIN AMERICA
The United States and the other American Republics agreed in 1947, in the Treaty of Rio de Janeiro, that an armed attack upon one of them is to be regarded as an armed attack on all, and to act together for the common defense.
Our good neighbors to the south are more than willing to share in defending the hemisphere. But there are real limits on their ability to do so without some aid from us. They produce little modern military equipment.
During World War II, defense tasks in Latin America required the use of over 75,000 United States troops as well as considerable United States naval forces. The armed forces of the Latin American states did not at that time have the equipment or training to carry out those defense tasks by themselves.
It makes good sense that, in planning the defense of this hemisphere, the United States should aid the Latin American countries to prepare for and take over certain hemisphere defense tasks that are of interest to us all; tasks they are willing to do and well able to handle, with a little help in equipping and training their forces. Consequently, I am recommending 40 million dollars in military assistance to these countries.
In addition, I recommend 22 million dollars in economic aid to carry forward the excellent technical assistance work that is now underway in the other American states in developing agriculture, natural resources, and health, education and other types of basic services. This type of assistance has already proved its worth in the Latin American area. It is helping to raise living standards, hasten economic development, and strengthen both peoples and governments in warding off the danger of communist subversion.
This grant assistance is helping to lay the foundation for an expanding volume of capital development, through public and private loans and investments, in the other American Republics. The United States is already providing major economic help to Latin American countries through loans by the Export-Import Bank. Fortunately, the relative geographic security and the economic position of the American Republics make possible large amounts of private loans and investments--the normal and desirable means of fostering economic development.
ADMINISTRATION OF THE PROGRAM
The proposed organization for administering the Mutual Security Program is based on the experience we have had so far, under the arrangements established by the Congress in legislation authorizing previous military and economic aid programs.
The administration of military aid will be handled, as at present, by the Department of Defense, which will be able to insure full coordination between United States production of equipment for our own forces and equipment for our allies. The Department of Defense is responsible for evaluating the equipment deficiencies of the forces of our allies, under mutually agreed strategic concepts, and is charged with procurement, inspection and transportation of military equipment provided by this country.
Administration of economic assistance for Western Europe and most of the countries in the Middle East, Africa, and South and Southeast Asia will be carried on by the Economic Cooperation Administration. This agency has already proved its effectiveness in aiding countries to achieve economic recovery and is now administering economic assistance in support of our mutual defense and security objectives in Europe and Southeast Asia. The economic aid programs for Latin America and certain other countries in which the economic aid is limited almost wholly to technical assistance are now administered by the Technical Cooperation Administration of the State Department. Consideration is now being given to the question of whether or not it would be desirable to transfer the administration of these programs to the Economic Cooperation Administration during the period that that agency is administering other foreign economic aid programs.
These agencies will work very closely with the Export-Import Bank and the International Bank for Reconstruction and Development in achieving a proper integration between loan and grant programs.
In order to insure coordinated policy guidance in administering military and economic aid programs, a key coordinating committee has been established composed of senior representatives of the executive agencies concerned. This International Security Affairs Committee has developed out of the experience of an executive committee that had previously been coordinating operations under the Mutual Defense Assistance Act. The chairman of the new committee, the Director of International Security Affairs, is a senior official of the Department of State confirmed by the Senate, and occupies a position authorized by the Congress under the Mutual Defense Assistance Act.
I recommend this Mutual Security Program to the Congress as another vital step along the road to real security and lasting peace. Peace through collective strength is a difficult course. It is not without danger. There can be no absolute assurance of success. But there are far greater dangers in any other course.
We cannot win peace through appeasement. We cannot gain security in isolation. We will not surrender.
Let it never be forgotten, however, that we are ready as we have always been, to follow the road of peaceful settlement of disputes, of control and reduction of armaments, of cooperation in applying man's talents to the building of a just and prosperous world society.
If the rulers of the Soviet Union did not drown their words of peace with the drums of war, if their professions of peaceful intent were matched by deeds, the century in which we live could become the brightest man has known upon this earth. For our part, if peace could be made sure, the American people would be glad to invest a part of the resources we must now allocate to defense to a large scale program of world-wide economic development.
The benefits of such a program would be immense; the cost a small part of what we must now pay to build our defenses at home and abroad. With such a program, we could, in cooperation with other peoples, inaugurate the most hopeful and fruitful period of peaceful development the world has ever seen.
This was our vision six years ago, when the war came to a close. Let us never forget it. And let us never give up our hopes and our efforts to make it a reality.
HARRY S. TRUMAN
NOTE: For the statement by the President upon signing the Mutual Security Act, see Item 250