Senator BREWSTER. Wouldn't you be familiar with the figure? Mr. FOSTER. I don't think it has gone through their Parliament. Senator BREWSTER. It has been repeatedly printed in the papers that the United Kingdom is allocating $150,000,000 to Yugoslavia. But you are not familiar with that?

Mr. FOSTER. We have worked very closely with their mission on this, and if that is a public figure we will be very glad to put it in the record. I don't happen to know it as of today.

Senator BREWSTER. I have read it repeatedly. Of course, I don't know what the source is, or how authoritative it is. How much has the Export-Import Bank loaned, or is it now contemplating loaning, to Yugoslavia?

Mr. FOSTER. I think it is between 50 and 60 million, but I will have to find that figure too, sir. I don't know it.

Senator BREWSTER. How much is the International Bank proposing to loan to Yugoslavia?

Mr. FOSTER. I will supply that also.

Senator BREWSTER. Do you mean to say that has not been a matter of discussion?

Mr. FOSTER. They have had a mission out there and have made a number of examinations. The International Bank has discussed that in general terms with us, but I do not know that figure offhand, sir, no.

Senator BREWSTER. Do you not know that the figure that has been repeatedly discussed and mentioned-Mr. Black discussed it with me in Belgrade, Yugoslavia-is $250,000,000, and that that loan was contingent upon the United States and the United Kingdom and other allies providing several hundred million dollars as a basis for the justification of the International Bank making the loan? You must be somewhat familiar with those discussions.

Mr. FOSTER. I am familiar with the discussions, sir. I was not familiar with the exact amount.

Senator Brewster. You mean you didn't discuss the amount with Mr. Black?

Mr. FOSTER. Oh, yes.

Senator BREWSTER. What was the amount you have discussed?

Mr. FOSTER. We have discussed general amounts. I must confess, sir; that I do not keep all of the amounts here of all the different countries.

Senator BREWSTER. You would not remember a quarter of a billion dollars?

Mr. FOSTER. I certainly would remember it, but I don't remember all of the figures of all of the countries, and I would have to refresh my memory.

Senator BREWSTER. I was asking the amount of the International Bank loan. That figure, I think, has been current for a very considerable time.

I read a rather responsible journal-I won't say which paper it was, or publication-which compiled figures for the war and postwar period indicating that it was approaching a billion dollars that we either had put or were contemplating putting into Yugoslavia for its rehabilitation. Would that figure seem extraordinary to you, with these different items I have mentioned?

TYPE OF AID CONTEMPLATED FOR YUGOSLAVIA

Mr. FOSTER. No, sir; it would not, over a period.

Senator BREWSTER. Did you read Mr. Tito's statement yesterday that he proposed to enforce collective farming with a very firm hand? Mr. FOSTER. Yes, sir.

Senator BREWSTER. Does it impress you that, if there is revolution in Yugoslavia over the enforced collectivization, it is somewhat a question how far we should implement a policy which is rather peculiar to the Communist world?

Mr. FOSTER. There is always a definite risk, sir, which is contained in this sort of activity, and the judgment on whether it is a good risk is a combination of military, political, and economic determination. Senator BREWSTER. How far has your aid looked toward the industrial build-up of Yugoslavia, the transformation to some degree from an agricultural to an industrial economy?

Mr. FOSTER. Well, there is certainly some money intended to promote industrial activities. I think that that is not the major part of the funds, however, since it is largely an agricultural economy. There is another substantial amount developed toward greater production of raw materials which can be useful to them and to the rest of the world, and we are putting considerable additional emphasis on that in the attempt to augment those supplies.

Senator BREWSTER. I must say that in my visits there and observation I thought it was very natural for all these countries to aspire to industrialization, and I don't quarrel with it. How far it is possibly an extravagant use of what, you will agree, are our limited resources it seems to me is a question. It is primarily an agricultural country, and they have done very well in feeding themselves and helping the rest of Europe.

The collective farms that I visited did not look as though they were the answer, and evidently Mr. Tito's statement yesterday indicates he is having a great deal of trouble with them. If they could simply go along producing the way they historically did produce, with their peasant population, and help to feed not only themselves but the rest of Europe, we apparently would be considerably better off.

I hope that as you consider this program in the future you will give very careful attention to that.

Mr. FOSTER. Senator Brewster, it is our attempt always, in working out one of these economic-development programs, to utilize the resources which they have in the greatest extent. We do not attempt to transform economies. We attempt to utilize what is there to promote stability and economic ability to be self-supporting.

Senator BREWSTER. There were partially completed factories and buildings there, evidently the result of some very grandiose ideas. Have you visited there at all? .

Mr. FOSTER. No, sir; I have not.

Senator BREWSTER. Great structures which had begun to sink in the mud. It didn't look as though there had been entire prudence in the handling of whatever resources they were able to allocate. So I think it is something to be watched.

EFFECT OF INTERNATIONAL PRICES OF RAW MATERIALS ON U. K.

RESERVES

You spoke about raw materials. In addition to the 9-percent increase in agricultural production and the 44-percent increase in industrial production, is it not true that these European countries, the United Kingdom, Belgium, France, possess colonial areas which are the source of a great many of these raw materials?

Mr. FOSTER. Yes, sir.

Senator BREWSTER. And that they are associated with them and they are still in block, as we call it?

Mr. FOSTER. Yes, sir.

Senator BREWSTER. And is it not also true that, as a result of the remarkable increase in the prices of some of these commodities, particularly tin and wool and rubber, which are products of the sterling bloc and of the associated areas, they very greatly increased their dollar and gold reserves last year, the United Kingdom in particular? Mr. FOSTER. Yes, sir; that is very true.

Senator BREWSTER, How much did that amount to?

Mr. FOSTER. The total increase is of the magnitude of—I will give to you the exact figure $1,445,000,000.

Šenator BREWSTER. As of which date was that?

Mr. FOSTER. That is the United Kingdom, June 30, 1950, to June 30,

1951.

Senator BREWSTER. In other words, that is approximately a billion and a half dollars?

Mr. FOSTER. That is right.

Senator BREWSTER. And that was chiefly attributable to this increase in the price of raw materials, was it not? Weren't those the major items, the wool, the tin, and the rubber?

Mr. FOSTER. Yes, sir.

ATTEMPTS TO CONTROL INTERNATIONAL INFLATION IN RAW MATERIALS

Senator BREWSTER. What steps have you taken, or are you contemplating, to try and bring that situation under control?

Mr. FOSTER. There are, as you know, sir, a series of international materials conferences under way, which are participated in by the consuming and the producing nations. The attempt of those conferences is to first find out what the requirements picture is, what the supply picture is, to attempt to bring the prices under examination with a view to making them either lower or more stable. In a number of instances we have attained a reasonable degree of progress. There are something over 12 of such commodities. Some of those we supply from the United States; some are supplied by the sterling area; some are largely supplied by the independent nations of the Far East. And in all the cases where there is a great excess of demand over supply there are international committees at work toward that end because all of the nations recognize that an inflationary picture of this sort is unhealthy for the free world as a whole and that steps must be taken to improve it. I think we have made progress in that direction.

UNITED STATES EXPORT CONTROLS ON STRATEGIC MATERIALS

Senator BREWSTER. Have we not instituted a program of export controls on strategic and critical materials so far as we are concerned? Mr. FOSTER. Yes, sir. We have had export controls applying to all of the shortage materials and many, many other strategic materials to the world.

Senator BREWSTER. And some of them were of considerable significance to the world economy?

Mr. FOSTER. That is correct, sir.

Senator BREWSTER. Sulfur is one of them, for instance.

Mr. FOSTER. That is correct.

Senator BREWSTER. And the rest of the world has been very anxious that we should make an equitable allocation of those supplies to help out the economy of the free world.

Mr. FOSTER. That is correct.

Senator BREWSTER. And we have tried to cooperate in that wholeheartedly?

Mr. FOSTER. That is correct.

SUPPLY AND PRICES OF CRITICAL RAW MATERIALS

Senator BREWSTER. The items which are of very great significance to us in an economic sense are the wool, tin, and rubber. How far have those countries that control those sources thus far cooperated in an endeavor to allocate and to restrict the materials going to the economy of the free world and to make them available at reasonable prices?

Mr. FOSTER. Well, there has been not all the progress we would like to see in the price respect, certainly, Senator.

Senator BREWSTER. Isn't that a masterpiece of understatement? Mr. FOSTER. Well, you must remember that a good many of these are in the hands of free

Senator BREWSTER. Free enterprise?

Mr. FOSTER. Free enterprise. You must recall that these are the things that they are attempting to trade for things we are making in which it is impossible for us to give them all they want. I referred in here to the fact that it isn't dollars so much that they want as it is the ability to get commodities and machine tools.

Senator BREWSTER. They accumulated a billion and a half of these not wanted dollars in gold last year as a result of the manipulation of the supply of materails on which we were absolutely dependent, and that was in addition to what we gave them, which was very considerable.

Mr. FOSTER. I don't think any of us are very happy about the way the price situation has gone, Senator. I must say in defense of this sterling area set-up that a good many of our prices have gone as far or further. The terms of trade actually, I believe, have gone against the United Kingdom in these transactions. I think the situation is one such that all of us are concerned with the inflationary pressures still left in the price structure and attempting through international agreements to do something about it. It is a very difficult thing to control not only in those areas but in our own area, and I don't say we have any perfect solution for it yet.

I do know that the United Kingdom, to whom you have referred in this build-up of reserves, is just as concerned as we are in it and is working in general terms in this conference to help stabilize it.

Senator BREWSTER. I got the figures, and I was a little startled to see that apparently England had accumulated these materials in the year before the prices went up so that the cost to them of the price rise was apparently very much less proportionately than the cost to us. In other words, they either were very foresighted or they planned it; I don't know which. The figures are rather startling to me. I don't know whether you have looked at them for the years 1950 and 1951 or not; but, while it certainly cost them more for the supplies they secured the second year from Australia, they apparently were not caught nearly as disadvantageously as we were in the deal.

Mr. FOSTER. I have heard the opposite, sir. I am not sure. I have heard that one of the difficulties has been that the United Kingdom had been stockpiling gold when they needed the raw materials, which is one of the difficulties in their production picture that they are now up against.

Senator BREWSTER. That may be an answer to the thing. The point. I made, that would fit in with what I said, that in this last year, when the prices were way up, they didn't buy as much proportionately as they did the year before.

Now, the whole picture is a fascinating one, and I think, or I am glad, that you at any rate have it very much in mind.

Mr. FOSTER. We have, sir.

ELECTRIC POWER PROGRAM IN GREECE

Senator BREWSTER. I have one other question. This is an incidental item which developed in Greece and gave me, at least, some concern. I don't know whether or not it did the others.

It was $94,000,000 that we were putting into a hydroelectric and lignite power development project. Has that ever come to your attention?

Mr. FOSTER. The $94,000,000, sir, is an equivalent total, which is not all dollars.

Senator BREWSTER. How much of it is dollars?

Mr. FOSTER. Approximately 23 million is United States dollars. Senator BREWSTER. I wish you would check that figure. I had the same statement made to us, and later I had, from your own representatives, figures furnished which indicated that you had to use dollars to get marks, because apparently a great deal of this electrical machinery was out of Germany, and if the marks went for that purpose, they had that much less to take care of us. They show the equivalent of dollars between thirty and forty million, as I remember.

Mr. FOSTER. I think, sir-we will give you the full story, but essentially that is counterpart, EPU credits and reparations from Italy. I doubt that it is United States dollars. We have provided the dollars to engage the engineering supervision, which is an American engineering firm, but some of the equipment, as you have said, comes from Germany, some from Italy, so it is not dollar equipment, and most of the rest of it is counterpart, which comes out of the Greek counterpart funds. It is a large project and one which will have a very substantial effect on improving the Greek economy.