Secretary MCELROY. General Twining can tell you the basis on which the needs of each of the countries are appraised in the light of our overall national objective-national military objectives around the world.

General TWINING. There is no grant military aid for Venezuela. This is a country to whom we sell military equipment under credit arrangements.

Mr. FASCELL. We have a 3-year agreement with them for [security deletion] million.

Mr. HAYS. You have military assistance in your book. Change the book then.

It is credit you will not be paid for. What is the difference whether they get it by credit or whether they get it by gift? I mean that is a little bit like these soft loans.

I would prefer to go down on the floor and fight for them if they called them grants, but I am a little hesitant to try to kid the American public that they are loans when they are not loans.

Secretary MCELROY. I think Venezuela would be a good sound loan. I think Venezuela can raise money.

Mr. HAYS. The same thing could be applied to many of these other countries.

Secretary MCELROY. I think, Mr. Hays, I fully agree with you that we must prepare this committee and any other Members of Congress who are willing to defend this program. We must supply you with the necessary defense in terms of country by country, because I presume that the attacks, when the attacks come, will be country-bycountry attacks.

So, we plan to appear before you with our country-by-country presentation, including such answers as there are here with regard to Venezuela. I think most people would believe that a Venezuelan loan is very likely to be repaid because, for one thing, a great deal of the output of Venezuela is shipped right here to this country, so they have the wherewithal over a period of time.

Mr. HAYS. I have one more question.

You and I are both from Ohio and you are quite a good salesman, I know that. You have proved it up here.

Now, how do I answer the question back home when the President weekly, in his press conference, keeps talking about the spenders, how do I convince them I am not a spender when I vote for this program?

I am a spender if I vote for an airport program in this country. Secretary MCELROY. I assume that you feel some necessity of answering that.

Mr. HAYS. I have done it for about 10 years and got a majority of 72 percent of the votes last year, but I would just like to know how you do it because I would like to get a bigger majority.

Secretary MCELROY. If you got 72 percent of the votes, you answer it your way because you are better than I am. I don't think you need any help.

Chairman MORGAN. Mr. Fulton.

Mr. FULTON. The question develops, What would happen if there were a cut on the U.S. military aid program proposed for fiscal year 1960 of about 25 percent? About a $350 million to $400 million cut. Where would the cut have to be prorated?

Supposing the same amount was taken out of the defense support total, what would happen? What would you have to do in readjusting the U.S. foreign aid program for fiscal 1960 ?

If you would put a statement in the record for us later, I would like to have the effect of cuts of about a 25-percent level on the two major items.

Chairman MORGAN. Can you furnish that for the record?

General TWINING. Yes.

Secretary MCELROY. We will have to make some assumptions. We will take it at 25 percent.

Mr. COFFIN. Would you yield for an amendment?

Mr. FULTON. Yes.

Mr. COFFIN. As long as you have to make your assumptions, would you consider your several cuts-10, 15, 25 percent?

Mr. FULTON. I am saying a substantial but a moderate cut. That is what I am trying to arrive at. It doesn't have to be 25 percent. Mr. FASCELL. What is a substantially moderate cut?

Mr. FULTON. I have tried to give you a 20 or 25 percent level.
Mr. FASCELL. That sounds like a meat ax.

Mr. FULTON. What would happen with a $350 to $400 million cut?
Mr. JUDD. Will you yield for another amendment?

Mr. FULTON. Surely.

Mr. JUDD. I wish, Mr. Secretary, you would point out what you had to cut last year from the planned program because of the reductions that the Congress made. The Congress did make a reduction against the wishes of some of us and it would be most valuable to us for you to show, not the projected "what may happen" which was told us last year, but what did happen.

What did you have to cut out that you had planned to do but were not able to do because of the cuts that the Congress made in the program last year?

Secretary MCELROY. AS Mr. Irwin, I am sure, will point out-because he would have to do the work on this-this is a pretty difficult thing to do.

Mr. JUDD. I know it.

Secretary MCELROY. You can, of course, give what the history was, as you suggest, but you have to make quite a lot of assumptions of what you would have to do and I think perhaps the best way to give the answer, Mr. Fulton, would be in terms of the kind of category.

This you might have to do; you might have to drop out a certain country. This would involve established priorities and require a complete review by the Joint Staff.

Mr. FULTON. I think we should have some of your overall reprograming in view of the various levels of substantial cuts.

Mr. ZABLOCKI. Will the gentleman yield?

You have asked for a substantial cut, and a moderate cut, and 25 percent. Would you amend your request to include a 50-percent cut? The information would supply an answer to my constituent, Mr. Harnischfeger.

Mr. FULTON. I would be glad to, but I want to have it done seriously. Mr. ZABLOCKI. Oh, I am serious.

Mr. FULTON. We must look ahead to see what effect on the military posture of this country, and that of our allies, and the security of the

United States and the free world, will these substantial cuts have at this time.

Secretary MCELROY. I would like to have Mr. Irwin have a chance to talk to this point.

Chairman MORGAN. Mr. Secretary, last year you requested 1.8 and you got 1.5, so you had a $285 million cut in your request last year. I think if you could follow the pattern on what you did last year, perhaps you could answer Mr. Fulton's question.

Mr. IRWIN. Without answering in detail, if you had a 25-percent cut, that would be $400 million roughly out of the $1.6 billion and would have to come, in a large measure, out of the modernization part of the program.

The first priority for use of funds is in the maintenance of existing forces. Now in the past years we have built up throughout the world forces that have to be maintained and if the money does not go for that purpose then the money spent as an investment previously deteriorates. So the first decrease and cut comes in the modernization.

Now modernization would have an effect on your military posture throughout the world. Now much of your modernization, or a large, substantial part of it this year, in 1960, will be going to NATO.

To the degree that you have to hurt that modernization, you would be hurting an area which is a firstline military area of troops standing shoulder to shoulder with our own.

Now as to the absolute detail of an operation for reflecting a cut, as the Secretary said, it will be reviewed by the Joint Chiefs, we would go to the unified commanders and ask what they would recommend be cut in their particular area. It would have to go to State to see what the political effect would be if you cut the program that had been planned for a particular country, the effect on the collective security alliance and the effect on the direct bilateral relations with the country.

Mr. FULTON. The point is, please come up with a trial balance cut for us.

Secretary MCELROY. Would the general kind of introductory remarks of Mr. Irwin be satisfactory?

Mr. FULTON. I would rather have you make a statement on what you specifically would do on various related program levels. Just to give us a pro forma balance sheet of a trial balance cut. What would you come up with?

Secretary MCELROY. This is what we might have to do. (The information requested is as follows:)

The Department of Defense submits the following information in response to Mr. Fulton's question regarding the effect of a 25 percent reduction in the amount requested for military assistance funds in fiscal year 1960:

Any reduction in MAP funds applied to specific categories or items could be supplied only on an illustrative basis at this time. This is true since any substantial reduction would require a complete review of the entire program and a possible reconsideration of our national objectives in certain countries and areas. Without such a review it is not possible to be specific as to items which would have to be deleted, or countries which would be affected.

The program recommended by the President represents the highest military priorities recommended by the MAAG's, Unified Commands, and the JCS as well as the political and economic judgment of the Department of State.

It would not be possible to effect more than a very small reduction in the amounts earmarked for the nonmateriel portions of the program. The maintenance of existing forces (the protection of our investment) obviously has first

call on any funds made available and therefore, this category could also absorb but a very minor part of any cut that may be made. It follows, therefore, that the major impact of any reduction would fall upon the category of force improvement, and would most likely result in a slowing down of the modernization of the NATO forces and the forces in Korea and Taiwan.

Chairman MORGAN. Mrs. Kelly.

Mrs. KELLY. Do you both agree that West German forces are a necessary potential for the defense of Europe and the free world? General TWINING. Yes.

Mrs. KELLY. There is no question about it?

General TWINING. No question about it.

Mrs. KELLY. In reference to the summit meeting or foreign ministers' meeting, if there is agreement on unification of Germany and demilitarization of Germany and acceptance of status quo in any form, on May 27, or thereafter, is there any need of this program at all? Secretary MCELROY. I think we would look at it at that time.

Mrs. KELLY. We must get a look at this now. We are going to have action on this before then.

Secretary MCELROY. I don't believe that you would need to be terribly concerned about enacting this much of a bill prior to a summit meeting because of any concern on the part of your committee or the Congress as a whole that overall settlements would happen that would eliminate the need for military assistance.

I think it would be delightful if it did, but I don't think you really think that

Mrs. KELLY. What do you mean "delightful?"

Secretary MCELROY. It would be very pleasant if we could get a relaxation of tension between the great powers of the world. Mrs. KELLY. By demilitarizing Europe?

Secretary MCELROY. By settlements that are policed.

Mrs. KELLY. I question any agreement along the line I previously referred to. I am not for a demilitarized Germany or settlement on the status quo of Europe.

Secretary MCELROY. I am not optimistic about it, no. I have got to hope that it will happen sometime, but I don't think it will happen for quite a bit of time.

Mrs. KELLY. That is all, Mr. Chairman.

Chairman MORGAN. Dr. Judd.

Mr. JUDD. Mr. Chairman, thank you.

One sentence in your statement here-and maybe this is not the place to ask this question-brings up a fundamental question. You sav at the top of page 2, "Aggression must be stopped."

Well, this has been our policy ever since the war-to stop aggression. But is that enough of a policy? Can it win? It is like a team standing on its 30-yard line and saying to the opponents, "Now, if you come at us, we are going to stop you. We are not going to retreat. We are not going to let you through if we can help it. But if you should fumble the ball, don't worry, we are not going to pick it up and run to your goal line. We will just stop you."

Do you think it is possible to win a war by always being only on the defensive, telling them in advance that if a probing operation doesn't succeed, there will be no penalty; they can withdraw in safety and probe somewhere else?

General TWINING. No, I think you have to have a capability of picking up the ball.

Mr. JUDD. It is not a matter of capability. We have the capability. When will we ever let them know we have also the will, that if they start a drive against us, we are not just going to stop them and push them back across our 30-yard line? We are going to grab the ball and go to their goal line.

Secretary MCELROY. I think, Dr. Judd, you are talking in a little different league from what we should be talking. This is overall national policy and whether you could pick up the ball in a probing action, let's say in the Berlin area, and push on through without picking up resistance on the part of your big enemy, which it would be very difficult to keep from leading into general war, is something that I think needs a great deal of consideration.

Mr. JUDD. That is right, but I don't believe-we are talking among ourselves here we can deny that, little by little, ground has been lost during these years. In some places I think we are picking up. Southeast Asia today is sort of turning the corner. They are a lot stronger than they were a few years ago. It looked as difficult there as Iraq looks now-Laos, Indonesia, Thailand, Vietnam. Yet they are coming through.

But I can't get away from this feeling that we encourage the Communists to keep us in trouble. We assure them they have nothing to fear. No wonder they press for conferences. They cannot lose. If they can't get us to fall into some trap they have lost no ground and there is always a chance we may stub our toe and they gain a lot of ground.

We go to the conference and we may lose; but we can't possibly win because if something we propose is to their disadvantage, they just won't agree to it. We put ourselves in positions where we can lose and can't win; and they are in positions where they can't lose and can win.

I just don't like to be always, or even for another 10 years, in this defensive position where we announce in advance, "Go ahead and try it, boys; if you fail there will be no penalty. If you succeed, then you get away with the loot."

Mr. HAYS. Will you yield to me?

Mr. JUDD. Yes.

Mr. HAYS. We had a period when we didn't have this policy from about September 1952 to February 1953, remember? We had a policy of liberation.

Mr. JUDD. That is right, and for the first time we got some real concessions from the Soviet Union. And so the Soviet Union in March of 1953 picked up that Indian proposal on prisoners of war in Korea, which it had snorted at and vetoed in December, dragged it out and said, "Now let's talk." When we had them on the defensive, they made their usual move. They said, "Let's talk," and so we talked about statement instead of liberation. We talked 2 years while they got the H-bomb. Then we talked 2 years about disarmament while they got sputnik. Then they said, no more talks on disarmament. They had gained what they were after-time-and hesitation on our part, while they got ahead in weapons.

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