Mr. McCORMACK. Some of those employees will go over into this new setup and also into the Information Agency?

Mr. LOURIE. Yes, sir.

Mr. McCORMACK. How many?

Mr. LOURIE. About 20,000 of them, sir. There are about 3,700 in TCA and about 16,000 from IIA that are here in the TCA gray area of the 1953 bar, and here in the IIA black segment. These segments will come off and go into MSA, and into USIA.

Mr. BROWNSON. Will there be any overall reduction when we are all done with the reorganization plan, considering the State Department as an entity and the Information Service and the Mutual Security Agency as separate entities? Will there be any overall reduction of employees by 1954?

Mr. LOURIE. There should be. I cannot give you specifically an answer to that. I wish I could because I would like to know. There should be, a reduction by putting similar functions into various agencies, we should avoid this confusion and overlapping and reduce our numbers. You hear Mr. Hughes this morning refer to an estimated figure of about $10,900,000 savings for the information program. They will be able to make substantial reductions but I cannot tell you how much.

Mr. LANTAFF. Why is it that the number of personnel directly employed in the State Department policy functions, as such, is 12,851 before reorganization and is anticipated it will be 13,083 after this reorganization plan becomes effective. Why do you increase the number of personnel in the State Department if you are taking functions away from them?

Mr. LOURIE. Well, there are now people in these two functions who, in order to

Mr. LANTAFF. The two functions you referred to are TCA and the Information Agency?

Mr. LOURIE. Yes, sir; which will come back into the State Department, and also the Educational Exchange which will stay in the State Department, IES.

Mr. LANTAFF. Will it be necessary for TCA and the IIA to reemploy people in their agencies to perform the tasks now being performed by State Department people assigned to their areas?

Mr. LOURIE. We think not.

Mr. LANTAFF. Why are there State Department people assigned in the first place?

Mr. LOURIE. I don't know that I can answer that, Mr. Lantaff. I think it is due to the fact that when you have an overlapping and similar functions being carried out by 2 or 3 groups, you duplicate and have more people.

Mr. LANTAFF. That is exactly what I am fearful of in connection with this reorganization. Because you are going to have to maintain, in order to carry out the President's directive, liaison between the new Foreign Operations Administration and the new Information Agency and the State Department in order to insure that the State Department is effectively controlling foreign policy. It would seem to me you are going to have to set up additional positions in each of these agencies, the State Department personnel in order to maintain that personnel. That is why I can't see where we are correcting this point,

which I think is an objection. It would seem to me that your new reorganization would only tend to aggravate that.

Mr. LOURIE. I am sure my associates might know that. And I will ask them if any of them have a good answer to that question. We have Mr. Howland Sargeant here, Mr. Edwin Martin, Mr. Edward T. Wailes, Mr. Scott McLeod, and Mr. Joseph Phillips. Perhaps one of them can answer the question.

Mr. SARGEANT. I might suggest that you show them the subsequent chart which shows the transfers by functional areas. That will indicate one point that you mentioned in passing. In the 1953 bar in chart 5 now before you which is colored black and which is called the International Information Administration, under these plans the State Department retains a group of about 232 people who run the Educational Exchange Service who are now in that black bar. After reorganization you get a net increase of those 232 in the black crosshatch portion of the bar which is Department of State. I do not think myself that that reflects any increase in the number of people in the Department of State except where functions of that kind are in fact to be kept in the Department.

Mr. LANTAFF. I still don't understand why if you are breaking this down on a functional and operating basis you have to bring into the State Department some 250 people who are now in actual operation in the IIA. I mean I thought that the purpose of this was to take out of the State Department those operating functions. Why should we transfer 250 people for that purpose out of IIA? Why wouldn't they stay there?

Mr. SARGEANT. The answer is that these educational programs have a long history in the Department. They started before the Second World War.

Mr. LANTAFF. But what has that got to do with making up foreign policy? Isn't that an operation?

Mr. SARGEANT. It certainly has aspects of an operation, although in the experience of the Department a great deal of operation is actually delegated to private agencies in this country and abroad and the Department's responsibilities are primarily supervisory in this area. The exchange programs have proved to be somewhat different than these big, mass media programs, like radio or motion pictures, because they all involve for one thing face to face contact between Americans and their opposite numbers from other countries and secondly they rest on formal or informal agreements made between the Government of the United States and the Government of the other country. In that sense they are closer to being an integral part of conducting foreign relations than any of these more complex and large-scale operations.

Mr. BROWNSON. Is TCA still going to arrange their own program under which they bring trainees into the country?

Mr. SARGEANT. I believe they would do that so far as any of those programs are an integral part of TCA itself.

Mr. BROWNSON. We reorganized the Defense Department so that we have an Army Army, an Army Navy and an Army Air Force. We have a Navy Navy, a Navy Army and a Navy Air Force. We created an Air Force Air Force, an Air Force Army and an Air Force Navy. Of course within the Navy Army, or Marine Corps, we also have a

private Air Force and a private Navy. Here you are setting up an educational program in two separate places even before the ink is dry on the plan. It is some concern, it seems to me, if each one of these groups is going to expand itself to cover all the functions they had formerly. I don't think we will have any clean-cut lines of demarcation. We have educational programs already in the original concept in two different parts of the plan.

Mr. LANTAFF. I would rather imagine that this additional number of people in the State Department are going to be required in order to take care of the additional liaison that is going to be required for the Foreign Operations Administration and the new Information Agency to provide additional personnel for the ad hoc and interagency committees which will have to be created and in the long run that divorcing these operations is probably going to result in an increase in personnel other than for budget limitations, but on the contrary, speaking from a structural standpoint, it would look to me like we are going to have to increase the personnel.

Mr. LOURIE. I think, Mr. Lantaff, there are only about 232 people in the Educational Exchange today who are part of the IIA, part of the information program.

Mr. LANTAFF. As the chairman pointed out, that one of the big troubles with this point 4 exchange program is because of the fact that one agency has the so-called policy determination of running it, but the operations are divorced from the policy end of it to the point that when these exchange students get over here nobody keeps track of them because everybody says, "Well, it is somebody else's program." I think few recognize the difficulties inherent in that type of a setup and I am concerned, as is the chairman, that we are still providing for two separate type programs in that educational field.

Mr. LOURIE. I must go back to the fact that in working on this the Secretary felt that it was agreeable with us either way. For the Educational Exchange, IES, to stay in the State Department or go the other route. We think it will function because ours has been a superviso y job rather than an operational one as far as IES is concerned. Mr. BROWNSON. Do you have any idea how many students are over here on that educational-exchange program?

Mr. LOURIE. Yes, I think there are about 13,000 total. Is that -close?

Mr. SARGEANT. I would suspect there might be more than that if we counted all those who had any kind of official facilitation or assistance. We can get the exact figures when Mr. Riley arrives in a few minutes from his other appointment.

Mr. LANTAFF. You have asked a question that I think is a very intelligent question; how many students do we have involved in this program, and I think it might be well to point out that after this reorganization, it is going to be impossible for one source to answer your question.

Mr. BROWNSON. Another thing that disturbs me is that most of this work is contracted out to private agencies and yet we have 275 people overseeing the policy which directs the curricula and travels of 13,000 to 14,000 students. The actual operation in connection with the students is carried out under the educational exchange program which is contracted.

Mr. LOURIE. Thank you. Very few people realize that of the 42,000 people in the State Department there are approximately 32,000 overseas, which is this group over here. This chart shows the effect of the reorganization on the size and distribution of the staff. This is

Mr. LANTAFF. May I ask another question, Mr. Chairman, about personnel?

Mr. BROWNSON. It may be that some of these questions may be answered automatically by the charts which Secretary Lourie will present to finish his testimony.

(Chart 6 follows:)

the Secretary at the top, staff officers, and here again we show the State Department in black crosshatch, the foreign aid and Foreign Operations Administration in gray, and the USIA in black. This is the way it breaks down by these areas: Here is the regional bureau. You can see what happens to that-a transfer out of about 228 people. Intelligence, there is very little that comes out of that. Economics, there is very little, just a fine bar. Overseas, it means that the IIA, now USIA, and the gray Point 4, TCA-from an administrative standpoint it takes a number out of IIA and TCA. Security and consular affairs-about 160. It takes all of TCA out which will now become part of MSA and then of course the IIA is this black bar from here down, this section right here marked in black crosshatch, is the part we are talking about which Mr. Lantaff asked about, which is the educational exchange.

A great many questions are asked about the Ambassador's function, chief of mission, and we felt that this might help bring out his position in the country to which he is accredited.

(Chart 7 follows:)

No. 1, the President's reorganization letter says that the Ambassador shall provide effective coordination of and foreign policy direction in respect to all of the United States activities in his country. That is the way it is worded: "Provide effective coordination of, and foreign policy direction with respect to, all United States Government activities in the country "to which he is accredited." And he is to supply the general direction and leadership, and at the country level-this chart is the country level. Here is the plan as you saw it before: The Secretary of State, Foreign Operations, Defense, Treasury, and USIA going to NSC, and at the country level, the Ambassador will provide general direction and leadership to these groups.