coal yearly. Construction of mine roads and modernization of equipment is effected to double this production, thus adding to Morocco's resources of fuel and power and permitting larger exports of coal to other Mediterranean countries.

ROADS AND RAILROADS

The improvement of the Moroccan highway system and the construction of secondary and tertiary roads are being aided by about 200 million francs from the Marshall plan counterpart fund. The rail system is also being extended and modernized, with the help of 800 million counterpart francs. Among the developments planned are extensions of existing lines to the antharcite mines at Djerada and the manganese mines at Imini.

PORTS

Moroccan port factlities are also being expanded to keep pace with the protectorate's fast-growing economy. Some 350 million counterpart francs have gone into the construction of additional wharf and loading and discharging facilitise at Cahablanca, Morocco's bustling industrial center.

Other aspects of the port program involve extension and improvement of facilities at Safi, Port Lyautey, Agadir, and Fedala. Plans call for Agadir to be enlarged and equipped with a small shipyard; Fedala is to become an important petroleum center; Port Lyautey is to be deepened to receive ships up to 6,000 tons; and Safi is to become a major fishing port. Two hundred ninety-nine million francs in counterpart funds have already been earmarked for these developments.

INDUSTRIES

The industrialization of Morocco is now in full swing. The number of people employed in industry has increased from just over 7,000 in 1924 to over 120,000 today, including 100,000 native Moroccans. This amazing development, greatly fostered by ERP, is enabling Morocco to make the best possible use of its natural resources and gradually close the gap in its trade balance by increasing both its exports and the production of goods it has had to import in the past.

The constant flow of ECA-financed materials and goods into Morocco since the start of the Marshall plan has gradually eliminated shortages and bottlenecks which hampered the industrial development of the protectorate. Today, almost every branch of industry is in full expansion. Foremost of these activities is the food-processing industry. Marshall plan supplies of tin plate have helped boost the canning industry, which is taking an increasingly important place in Morocco's export trade. There are now more than 175 canning factories for the region's abundant fishing production, which has more than doubled the prewar output, and about 55 plants supplied by fruit and vegetable production. Fish exports in 1949 totaled about 40,000 tons as compared with 17,000 tons in 1938, while almost 150,000 tons of citrus fruit and truck crops were exported during the same year, as compared with 38,000 tons in 1938.

Moroccan metallurgical, mechanical, chemical, and textile industries have all benefited largely from ECA shipments of raw materials and machinery. New factories have also been set up to promote production of goods usually imported by the protectorate. For instance, Moroccan paper imports will gradually be eliminated by the installation of a new, ultramodern paper mill at Port Lyautey. Scheduled to begin production in May 1951, the new plant is being equipped mainly through the Marshall plan, which has allocated $239,000 for the purchase of machinery, including hydraulic and chemical pulpers. The plant will provide employment for about 30 French specialists and 200 local workers, and is expected to manufacture 20,000 tons of wrapping paper, newsprint, bags, and other paper products annually. Current paper production in Morocco, concentrated in two small factories at Casablanca, is restricted to about 7,000 tons of wrapping paper and cardboard packaging yearly. The output of these plants is also to be increased.

Moroccan paper needs are estimated at about 28,000 tons. Morocco had to import 18,000 tons in 1948.

A plywood factory, first of its kind in north Africa, has also been set up in the suburbs of Casablanca. ECA has supplied this factory with $174,000 worth of equipment which will permit a monthly production of 300 cubic meters of plywood, about half of which will cover local needs. The rest will be exported.

TOURISM

Marshall plan counterpart is also being used in a small way to assist the Moroccan tourist industry. It has provided 2 million francs for the building of stop-over hotels at potential tourist centers which most visitors to Morocco now miss because of the lack of hotel facilities.

Morocco is exceptionally rich in tourist attractions ranging from the variety of its landscapes and climates to the wealth of its artistic and historic sites and the picturesque traditions of the region.

Some 25,000 tourists visited Morocco in 1949. Tourism is one of the region's important dollar earners.

MARSHALL PLAN COUNTERPART AID TO MOROCCO

Total counterpart aid to Morocco through December 1950 is 10,689 million francs, broken down as follows:

FEDERAL SUPPLY MANAGEMENT

(Overseas Survey)

WEDNESDAY, NOVEMBER 28, 1951

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON INTERGOVERNMENTAL RELATIONS

OF THE COMMITTEE ON EXPENDITURES
IN THE EXECUTIVE DEPARTMENTS,
London, England.

MORNING SESSION

The subcommittee met Wednesday morning, November 28, 1951, it London, England, 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, Sidney A. Fine, 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; Brig. Gen. Clarence C. Fenn, Department of the Army escort; Robert Cartwright, General Accounting Office; and Lee Seymour, General Accounting Office.

A conference with Hon. Walter S. Gifford, American Ambassador to the Court of St. James, preceded an embassy staff meeting.

London representatives present at the Embassy included: Hon. Julius Holmes, United States Minister to Great Britain; Richard C. Breithut, Office of the United States Deputy, North Atlantic Council; Maj. Gen. Frank Kibler, Chief, Joint American Military Advisory Group; Brig. Gen. William S. Biddle, Deputy Director, Joint American Military Advisory Group; Col. Hal C. Pattison, Operations Officer, Joint American Military Advisory Group; Lt. Col. John H. Holliday, USAF, Joint American Military Advisory Group; Col. Stanley C. Russell, Joint American Military Advisory Group; Lt. Col. Samuel F. Langley, Joint American Military Advisory Group; Lt. Col. Charles M. Dehority, Marine Corps, Defense Production Board; Lionel H. Harris, Chief Operations and Analysis Division, SUSREP; and Col. Joseph M. Colby, Chief, Production Resources Division, SUSREP.

Mr. BONNER. The meeting will come to order. We will now hear from the Hon. Julius Holmes, United States Minister to Great Britain.

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

STATEMENT OF HON. JULIUS HOLMES, UNITED STATES MINISTER TO GREAT BRITAIN

Mr. HOLMES. Mr. Chairman and members of the subcommittee, the program and plan is a very flexible one. We do not want to formalize any of this presentation because we would like to be as helpful as we can and give you whatever information you want on any subject. What we have done-we had a tentative program, but it is always subject to anything you like. One of the speakers who is going to present one phase of the program this morning really gets on to a subject in which you aren't very much interested. Should you get on to a subject in which you are not very much interested and want to cut that subject out, we hope you will say so. Or if you want to pursue any given subject by a speaker more in detail than the speaker does present it, we could do that. But now we have got together a group of people to give you a picture of-mostly of the NATO set-up. Now we are going to have Mr. Breithut who represents Ambassador Spofford, who is the United States Deputy, one of the Council of Deputies, and is the Chairman of that Council, at the recent meeting in Rome. Mr. Breithut is representing him here, and he will take a few minutes-15 minutes, or more, or less, whatever you like, on the so-called regional relationships. That is, how the United States Government is represented in these various bodies that make up the complex North Atlantic Treaty Organization. He will be followed by others.

Mr. BONNER. In all probability the gentlemen of the subcommittee will want to ask certain questions-so I want to try to divide the time to the greatest advantage.

Mr. HOLMES. Yes, sir. So if that is agreeable with you, Mr. Chairman, we will begin with Mr. Breithut.

Mr. BONNER. Yes, proceed.

Mr. HOLMES. If it is agreeable with you, Mr. Chairman, we will proceed. I think that you had better go up there [indicating the head of the room].

Mr. BONNER. The Defense Production Board-is that your group? Mr. HOLMES. That matter will be discussed extensively after the 12:30 break.

Mr. BONNER. Mr. Holmes, we have a recording machine for assiste ance in preparing our record when we get back home. We would like every person when he makes a statement to give his full time. When the period of questioning comes, the person asking the question will give his name when I recognize him. The person who answers the question will then give his name.

Mr. HOLMES. Do you want a comment with respect to whether or not the material under discussion is classified, such as confidential or secret?

Mr. BONNER. Well, if you have anything that is confidential or secret in this meeting, if you will just make a note of it, we will so treat it when we transcribe the record.

Mr. HOLMES. Yes, everyone who speaks must label what he says and give it the proper classification so it will be shown in the record and can be evaluated. That is what you meant, Mr. Chairman? Mr. BONNER. Yes, Mr. Holmes.

Mr. HOLMES. Will you proceed, Mr. Breithut?