it has been screened by the NATO Standardization Agency. The urgency is so great that we feel that they should get some equipment now. As far as later-our equipment being declared surplus of course, it cannot be disposed of without our permission. And I think it is more important that the French have enough bazookas, even if there are two types of them, than not to have enough.

Mr. LANTAFF. One of the things that concerns me a little bit is that when your mission here approves, for example, so many bazookas of a certain type, it will probably take about 2 years after you start planning for that until that item is delivered to you in the field. By that time it might be a nonstandard item and the French would not want to accept it. So that we would have left in our country a surplus of that type equipment. I am wondering if there is any way to solve the problem.

Colonel RUSSELL. I think that our planning is looking forward enough to take in that eventuality.

Mr. LANTAFF. That is all I have, Mr. Chairman.
Mr. BONNER. Mr. Meader you have a question?

TITLE TO MILITARY AID EQUIPMENT

Mr. MEADER. There has been some discussion in the subcommittee with regard to possible United States retention of title to property given to European nations under these European aid programs.

Mr. FINE. The record ought to show, Mr. Chairman, that before we come to any conclusion that the retention of title is the over-all solution-an analysis should be made because there are administrative responsibilities which the United States Government would face. For instance, accident responsibility which might be very serious or might be very costly. There are other responsibilities which flow from the retention which might be more costly in the end. But I think we ought not to rush into a general conclusion without considering that phase of it.

Mr. BONNER. Thank you, Mr. Fine.

Mr. MEADER. I don't want to start an argument on this matter, which I have discussed here on the side with my colleagues. I simply want to get some reaction of the operating men-on how this item will effect their discharge of responsibilities.

Major General KIBLER. If I might call one more expert opinion, Colonel Pattison, on this point.

Colonel PATTISON. There is, as Mr. Fine brought out, a psychological factor involved as General Patton, being an old Army man himself, used to say, you can pull spaghetti through a key hole easier than you can push it through. And NATO is a voluntary organization-a form of partnership. * *

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STATEMENT OF LT. COL. SAMUEL F. LANGLEY, JOINT AMERICAN MILITARY ADVISORY GROUP, LONDON, ENGLAND

Lieutenant Colonel LANGLEY. I can explain the conception of the drawing on the air depot. We realize that the countries might not quickly reach the position of absorbing a whole year's level of spares

for the Air Force. Secondly, it would involve a considerable amount of money to put these spares over there. The third reason was we didn't have them to give. Consequently, it appeared to us wise to establish an Air Force depot in Europe, which could also follow through in Greece and Turkey.

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Mr. BONNER. That gives you more flexibility, doesn't it?

Mr. WARD. It will also take less inventory to do it that way.
Lieutenant Colonel LANGLEY. At any one time-

Mr. WARD. Now following up on Congressman Meader's point. Where the replacement of parts is of such growing importance, isn't it a good idea to expand this plan in order to get more flexibility and less stocking?

Lieutenant Colonel LANGLEY. I think from the Air Force point of view it is, sir. I cannot speak for the Army or Navy's point of view since I don't know their situation.

Mr. WARD. With regard to that classified material presented *

Mr. BONNER. Mr. Brodsky, do you have any questions?

Mr. BRODSKY. No, sir.

Mr. BONNER. Mr. Roback? Mr. Kennedy?

Mr. KENNEDY. A good portion of the conference has been devoted to classified matter. This material will be screened for security purposes by Army, Navy, Air Force, and Department of Defense officials. In this way, the printed record will not reflect the classified material discussed here today.

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Mr. BONNER. That is the subcommittee's plan in relation to these conferences and I am assuring your military representatives that the information we have received here today will be treated in the manner outlined. General Kibler, General Biddle, Minister Holmes, on behalf of this subcommittee, I want to thank you gentlemen and your staff for your splendid cooperation. We will now adjourn the conference until the afternoon session is called.

Mr. HOLMES. The afternoon session is called for 2:30 p. m. Thank you, Mr. Chairman.

AFTERNOON SESSION

CONFERENCE WITH REPRESENTATIVES OF THE DEFENSE

PRODUCTION BOARD, NATO

Mr. BONNER. The meeting will come to order. First we will hear from Colonel Dehority.

STATEMENT OF LT. COL CHARLES M. DEHORITY, MARINE CORPS, DEFENSE PRODUCTION BOARD

Lieutenant Colonel DEHORITY. Congressman Bonner and gentlemen, I am Lieutenant Colonel Dehority, representing SUSREP this afternoon. Mr. Batt, who is the United States member on the Defense Production Board, is in Washington. General Callahan, who is his deputy, is down at the Rome meeting of the NATO Council.

We had the executive officer and regional chief here. I head the Procurement Division; Colonel DeGoria is the executive officer; Colonel Projeria heads the Production Resources Division; Mr. Harris heads the Operations and Analysis Division; and Colonel McLaughlin has the Planning and Programs Division.

If it is agreeable with you, I will start off by having Mr. Harris give a very brief statement of the functions and duties of SUSREP.

STATEMENT OF LIONEL H. HARRIS, CHIEF, OPERATIONS AND ANALYSIS DIVISION, SUSREP

Mr. HARRIS. Mr. Bonner and ladies and gentlemen of the committee, I want in a very few minutes, to kind of pin-point the high lights of the position of our group in the North Atlantic Treaty picture. As Mr. Breithut of Ambassador Spofford's office told you this morning, the North Atlantic Treaty Organization breaks down into the Council, the Council of Deputies, and three separate agencies. Those are the Financial and Economic Board, the Military Committee, and the Defense Production Board.

FUNCTIONS OF SUSREP

Now, we belong to the Defense Production Board, which is an international body consisting of the representatives of 11 nations. Actually, there are 12 member nations of the NATO, but one, Iceland, does not participate in the Defense Production Board.

Mr. Batt, is SUSREP, that is the senior United States representative to the Defense Production Board, and our whole organization backs him up. It is our function to supply to Mr. Batt the necessary information he needs for the proper operation of the Defense Production Board. So that, I think, describes us. We are the back-up for one member of the Defense Production Board; namely, the United States member.

I should like to say a few words about the functions of SUSREP. The chief function, of course, of the senior United States representative is first, to represent the United States position in the Defense Production Board, and the second function is to be responsible for the United States activities in connection with European defense production. That is the simplest statement of our functions in the simplest way I know how as to the responsibility of our office and what SUSREP is and does.

OFFSHORE PROCUREMENT

A specific example of this is in respect to offshore procurement. It is our function to screen, investigate, to make recommendations to Washington giving our best opinions as to items which could. be best purchased in Europe. I might say that the Defense Production Board, and SUSREP in particular, is not a procurement agency. It has no funds. It is entirely a screening, investigating, advisory organization. We succeed entirely on the basis of the logic of our recommendations and the good will of the people to whom we make them.

Lieutenant Colonel DEHORITY. Do you want any further description of the functions of SUSREP or would you sooner ask questions at this point?

Mr. BONNER. Mr. Lantaff, any questions?

Mr. LANTAFF. I would like to know how you go about evaluating the capability of the various countries in NATO to produce certain end-items.

Lieutenant Colonel DEHORITY. I will ask Colonel Colby, Chief of the Production Resources Division, to answer that question.

STATEMENT OF COL. JOSEPH M. COLBY, CHIEF, PRODUCTION RESOURCES DIVISION, SUSREP

Colonel COLBY. I am Colonel Colby, Chief of the Production Resources Division, SUSREP. The initial survey of that was made by a task force's assembly of experts. They covered each of the NATO countries in a study of facilities and made certain recommendations with relation to the productive capacities for specific products in these specific countries. Following that, there have been meetings with the DPB again by groups of experts in which the facilities and productive capacities of these countries have been analyzed more completely and in detail and coordinated throughout the entire area so as to relate productive capacities with requirements in carrying out some of our own off-shore procurement recommendations. Just prior to making our off-shore procurement recommendations, we have made spot checks in the field again to see that the capacities existed in the type of place that was desired and that the machinery and that the technical skill existed before these procurement recommendations were forwarded back to the United States.

Mr. L'ANTAFF. Can you give us some specific example of allocating to Western European industry a portion of production?

Lieutenant Colonel DEHORITY. Yes, sir; there are very complete studies; for example, on the 155 howitzer and on motor vehicles relating productive capacities to the requirements and allocating these requirements to the productive facilities which exist. These plans were, I consider, quite generally complete and were forwarded to the FEB (Financial and Economic Board) for financing to get the money to carry out the production. That is where it was stopped. The thing that is needed in Europe is money to produce. The services and facilities exist. In fact, anybody who realizes that Europe is the home of the jet engine, that they produce great tanks like the Tiger tank, and that it is where much of our basic defense material springs-Europe has the ability to produce. What is needed here is the financial ability to cover costs.

Mr. LANTAFF. Well, what have we been doing with the money we have been spending on economic aid, and with other plans for utilizing that money for mutual security purposes?

Lieutenant Colonel DEHORITY. Economic aid has been handled, of course, under the ECA. That is a field which I will not dare to enter because mine is of another variety.

Mr. LANTAFF. I understand that. But isn't it true that the ECA program has been of considerable importance in rehabilitating European facilities?

Lieutenant Colonel DEHORITY. That is correct, Congressman.

Mr. LANTAFF. Hasn't that rehabilitation been directed to rebuilding those plants that you speak of? Plants that you say are capable of producing armaments?

Lieutenant Colonel DEHORITY. To a certain extent, Congressman, that is correct.

Mr. LANTAFF. How close do you work with ECA!

Lieutenant Colonel DEHORITY. We work quite closely with ECA. We, ourselves at SUSREP have no field agencies. Here in the field the only teams are the MAAG's and the ECA teams. They also do our field work for us. Almost all our work on the regional level is fully coordinated with ECA. However, you must remember that until quite recently the restriction on expenditure of ECA funds did not permit it being focused on armament production. However, the money was spent on rehabilitation, particularly on the metalworking industry which helped rehabilitate the arms industry.

COUNTERPART FUNDS

Mr. LANTAFF. Have counterpart funds been used in France or Italy for the rehabilitating or retooling of these plants? If so, would it relieve those burdens?

Lieutenant Colonel DEHORITY. Not at the present time. Now there is this-in putting over some of the new off-shore procurement you have all sorts of costs such as the use and facilities, and if machine tools do exist you have got to bring them out of storage; you have got to realine them so that you can get your production flow; that costs money. There have been a lot of discussions that when off-shore procurement really begins in earnest it may be necessary to use counterpart funds for the facilities aspect of this program. Now, whether that will ever materialize or not, I do not know. They only say that that is in the discussion stage.

Mr. LANTAFF. My only reaction is that as long as you have made these surveys and have plans for allocating a certain proportion of production to Europe you should certainly be able to coordinate any loans made by ECA from counterpart funds to your program.

Lieutenant Colonel DEHORITY. The Mutual Security Act is, of course, new, and we do not know yet what is going to be the outcome of that. I have been told recently, however, that the ECA in a certain expenditure of funds has been operating under quite a different law.

Mr. LANTAFF. If our military people approve, for example, 100 tanks for France, would you come into that picture to urge that any components of that end item could be made here?

Lieutenant Colonel DEHORITY. Oh, yes, sir, Mr. Congressman. We have a case right now which is quite baffling; for example, we have allocated on the end item program to Belgium, items which they have capacity to produce.

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Mr. LANTAFF. Could you give us an example of that end item? Colonel RUMLEY. Well, take small-arms ammunition in Belgium should we require that they produce those requirements themselves, even though with our aid their deficit to meet the 1954 objective is large? Might we better keep that end item on the program than to require meeting the deficit from Belgian production?