FEDERAL SUPPLY MANAGEMENT

(Overseas Survey)

TUESDAY, NOVEMBER 13, 1951

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON INTERGOVERNMENTAL RELATIONS

OF THE COMMITTEE ON EXPENDITURES

IN THE EXECUTIVE DEPARTMENTS,

Ankara, Turkey.

The subcommittee met Tuesday, November 13, 1951, with the ECA Mission to Turkey at Ankara, Turkey, Hon. Herbert C. Bonner, chairman of the subcommittee, presiding.

Members of Congress present: Herbert C. Bonner, chairman; Harold Donohue, W. J. Bryan Dorn, Cecil M. Harden, Charles B. Brownson, Bill Lantaff, and George Meader.

Staff representatives present: Christine Ray Davis, chief clerk; Thomas A. Kennedy, general counsel; Herbert Roback, staff member; Annabell Zue, minority clerk; Ray Ward, Bureau of the Budget; John Elliott, State Department escort officer; and Brig. Gen. Clarence C. Fenn, Department of the Army escort.

Economic Cooperation Administration Mission to Turkey representatives present: Orren R. McJunkins, acting chief of mission; Henry W. Wiens, program review officer; Clifton H. Day, controller; Alonzo Taylor, industrial officer; Arthur V. Williamson, public roads; Hugh K. Richwine, agricultural officer; Lawrence J. Hall, information officer; John Habberton, special assistant to chief; Frederick G. Draper, technical assistant officer; Joseph Svoboda, trade specialist; and Luella Edridge, reporter.

Mr. McJUNKINS. We are delighted to have you gentlemen with us. Mr. BONNER. Please state your name for the record.

STATEMENT OF ORREN R. McJUNKINS, ACTING CHIEF OF MISSION, ECA MISSION TO TURKEY

Mr. McJUNKINS. Orren R. McJunkins, Acting Chief of Mission, also Deputy Chief of Mission, ECA Mission to Turkey. We are glad to have you people with us and we will attempt, within the short amount of time allotted to us, to tell you what ECA is doing and what they intend to do in the future. I will start by introducing our group: Mr. Day, controller; Mr. Taylor, industry; Mr. Williamson, United States Bureau of Public Roads; Mr. Wiens, program review;

NOTE.-Asterisks deuote classified material deleted for security reasons.

Mr. Richwine, agricultural division; Mr. Hall, information division; Mr. Draper, TA division. I think, with your permission, I will make a few brief opening remarks and then pass on to our specialists.

BACKGROUND INFORMATION ON TURKEY

Turkey is slightly larger than the State of Texas. There are about 296,000 square miles. The population is slightly under 21,000,000 people. Ninety-eight percent of the Turks are Moslems; 82 percent of the entire population are absolutely dependent upon agriculture. We think that there is no such thing as communism in Turkey. You may find a very slight indication, but there is certainly nothing of any particular importance. The Turkish Republic was founded 28 years ago under the leadership of Ataturk and his party remained in power until May of last year. At that time the present Democratic Party took office.

Our mission realizes very fully that the United States Government has put over $81 billion into foreign aid.

We are trying today to have a good program that will get them to stand on their own feet so that we can stop as much aid as possible.

AGRICULTURAL DEVELOPMENTS

There is in Turkey this year the largest agricultural crop they have ever had in the history of the country. We don't claim the Marshall plan did it. It is due to an accumulation of things. When we arrived in 1948 there were about 2,000 tractors in Turkey. Today there are about 20,000 with 4,000 more to be delivered between now and next year. We have been able to put about 2 million additional acres of land under cultivation. There are still 8 million acres of land that have never been tilled. We are trying to make Turkey the breadbasket of this part of the world. One way of doing this is with modern agricultural equipment and with the techniques we use back in the States. I will now call on Mr. Richwine.

STATEMENT OF HUGH K. RICHWINE, FOOD AND AGRICULTURE OFFICER

Mr. RICHWINE. My name is Hugh K. Richwine, food and agriculture officer. Turkish agriculture is the backbone of the nation's economy. Agriculture produces approximately 50 percent of the national income. Agriculture earns over 90 percent of the foreign exchange that is earned. Agriculture isn't spectacular in Turkey, but without a strong agriculture I doubt very much if the Turkish Army could function very well. Turkey is fortunate in having a lot of natural resources, especially land, as Mr. McJunkins has told you. She has a favorable climate and, furthermore, she has a people that will work and people who want to learn to do better.

I know you are interested in what progress we have made. With ECA help agriculture has progressed with the No. 1 job of getting increased production. In fact, agricultural production is ahead of schedule ahead of the goals set with the Turkish Government about 212 years ago. Certainly we have spent a lot of money on agricul

ture. Approximately $50 million for machinery and requisites of production. Forty million dollars worth of those have arrived and are in use on Turkish farms.

To give you an indication of what has been accomplished-in cotton in 1948, one of the higher years of cotton production, not the highest quite, the production was 55,000 tons. This year it was 160,000 tons. Two and a half years ago we were going to be happy if we reached a production of 100,000 tons. For cereal the highest production on record was 8.9 million tons. This year it is 10.6 million tons. The goal we hoped to reach in 1952 was 10.4 million tons. Taking a look at this and taking out the weather factor, taking the highest yield before, the highest acreage, comparing both wheat and cotton and using a reasonable price (not 50-cent cotton but 30-cent cotton) there is an increase now as compared to pre-Marshall plan of $140,000,000 in production for1951. Some of the things they have spent, the money on is power farming equipment, sprayers, dusters, pesticides. We couldn't raise cotton in Turkey until we controlled the insects. We got irrigation pumps and better seeds. Most of all we haven't neglected spare parts and we are training people to look after the machinery. There were no shops for agricultural machinery in Turkey. Today there are 70 good shops and we have some good mobile units to get out into the out-of-the-way places. Agriculture has become respectable. National attention has been focused on agriculture. Due to all the information the Turkish Government has put out the peasant farmers are going ahead with a little more hope in the future and a lot more confidence.

There are some other things to do here through the technical assistance program that is trying to teach the Turks to do things for themselves. We have been trying to get them to see some of the things they can do without outside help. For example, the ministry of agriculture has in the past used a seed treater to treat wheat seed for smut. They cost quite a lot of money. Last year we got them to make one, homemade one. This year they made 1,000 and used them. They also learned to pile the seed on the ground and mix it up with chemicals, cover it over with skins and get the seed treated in that way. This year they treated 150,000 tons of seed wheat just with things they already had in Turkey except for the pesticide.

I have been emphasizing agriculture, but it always seems to me they never give agriculture enough accent. The time in Turkey to do something about agriculture has been relatively short. We hope with the increase in production that Turkey will earn enough foreign exchange to maintain her pool of machinery in Turkey and help the little farmer who uses animal equipment to keep moving up and up. We have got to watch very carefully for opportunities to work along with the Turks on improved methods and know-how.

TURKISH INDUSTRIAL DEVELOPMENTS

Mr. McJUNKINS. Industry in Turkey is about 70 percent owned and operated by the Government. This, of course, is very contradictory to the American way of thinking, but there is a reason for it. I won't attempt to try to justify it but will simply state facts. In the absence of large holdings of money the Turkish Government has taken the

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initiative to build and operate these plants so as to provide at least part of the requirements of the country. Turkish industry is what we call light industry. They have a medium-sized steel plant, some textile plants, mechanical and chemical plants, sugar plants, a few cement plants. Those are the most important plants in Turkey. Last May the Government passed a bill to encourage private foreign investment in Turkey. It protects private enterprise by (1) protection against confiscation, (2) prevents excess taxes on foreign capital, and (3) permits some of the earnings to be taken out of the country. Lever Bros. which, as you gentleman know, is one of the biggest companies, agreed to build an oleomargarine plant at Istanbul. Squibb Bros. are going to build a chemical plant there. Those may be the beginning of what we think might be a change in the industrial picture in Turkey. General Electric has already built a small light-bulb plant in Turkey.

Mr. Taylor.

STATEMENT OF ALONZO E. TAYLOR, INDUSTRIAL OFFICER

Mr. TAYLOR. Alonzo E. Taylor, San Francisco. My work here has been primarily in increasing military production *

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*The Industry Division has been trying to help the development of those things that pertain to arms manufacture more steel, coal, electric power and also, of course, our big program is working on strategic materials-the development of chrome, copper, antimonium and even asbestos. Turkey is the largest producer of chrome. The production of manganese will be 30,000 tons next year. Sulfur has been tripled. Copper has been doubled since ECA-it is now 25,000 tons a year. Those are not all we are working on, but I think it will give you the idea that military production is basically what we are interested in.

Mr. McJUNKINS. Mr. Wiens will give us the picture in programing. STATEMENT OF HENRY W. WIENS, PROGRAM REVIEW OFFICER

MILITARY PROGRAM

Mr. WIENS. Henry W. Wiens from California. Mr. McJunkins has indicated the size of the program and asked me if I would say a word or two about the military program. Our initial program was strictly economic in character but in a country with as heavy a military burden as Turkey it is impossible to carry out a strictly economic program. We hope that we are going to be able to increase production over a period of a year so that they will be able to sustain it without outside assistance. It is our estimate-and all of the present projects will be completed with the exception of one hydroelectric projectthose will be completed by the end of this fiscal year-financially speaking they will be complete, and we will be primarily interested then in assisting Turkey in their military effort. We did attempt to establish the balance that existed in prewar Europe. In prewar Europe they got their food from Eastern Europe, but with the ringing down of the iron curtain, Western Europe wasn't able to buy in the east which is one reason for the dollar shortage. We have been working in Turkey to fill this gap with Turkish food production and ex

ports. With the coming of Korea, however, we soon determined, on the basis of instructions of course, to try to reorient our program more closely to follow the military program. This developed over a period of time and we got a request from the military asking if we couldn't do something to help them expand their NCO program. No doubt General Arnold mentioned that to you. At that time our funds could not be used directly for military purposes, but we got $4,000,000 of assistance and got the Turkish Government to undertake the NCO program out of their own funds. Later on in about April the United States Government agreed to make available a total of $31,000,000, including the $4,000,000 for granting economic assistance to Turkey. We have, therefore, agreed to release counterpart * * * to increase the size of the military program * * * We waited for the passage of the new act before we could release the funds. They used their own funds in the meantime-they were working on a reimbursable basis.

Mr. McJUNKINS. Under the new Military Security Agency we are going to reorient (1) military production and (2) productivity and (3) economic programing. In addition to what Mr. Wiens has said, we have been helping out in the railroad field. We have helped them repair 250 locomotives. We have increased the coal production and also production in the steel industry. We have gotten the steel industry to turn out rails for the railroad.

I would like to have you take a few minutes, Mr. Day, to tell us what has happened to the equipment.

STATEMENT OF CLIFTON H. DAY, COMPTROLLER

ECONOMIC ASPECTS

Mr. DAY. Clifton H. Day, comptroller of the mission from Boston. I would like first to give a brief over-all picture of the total program. It is a $157,000,000 program and broken down: Consumer goods, $15,000,000; agricultural equipment, $50,000,000; technical assistance, $2,000,000 plus; industrial equipment and mining equipment, $74,000,000; public-roads program, $16,000,000; a total of $157,000,000.

The primary responsibility of the comptroller is to conduct end-use investigations commodity wise to see to it that the equipment gets in here, used promptly, used properly, and not misused. We are very fortunate insofar as Turkey is concerned that the Turkish Government's ideas coincide with our own. They recognize the need for equipment and have made a great effort to see that the equipment gets used properly and promptly. At the present time there is $800,000 worth of agricultural equipment that arrived too late for the season. That will be picked up in the development of new land areas when the season comes around again. We are working from west to east and we are the furthermost Marshall-plan country from the United States. We have to allow 4 to 6 weeks by freighter to Istanbul or Izmir, the two primary ports of Turkey.

In the industries themselves, one of the things I think should be particularly mentioned is the fact that we have a warehouse spare. parts system equally good to that in the States. Spare parts are kept in warehouses and they keep them properly classified and maintained.

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