5. With the cooperation of the nations of the area, the development of plans for area defense.

6. Maintaining access to the petroleum resources of the area, and seeking means to remove barriers limiting the free flow of trade.

7. The preservation of our special relationship with Saudi Arabia.

8. Encourage effective use of the region's natural resources, particularly its surface and ground waters.

9. The evolution of the Sudan toward self-government and self-determination.

The workload is expected to increase in the economic field as the new Arab development programs are brought into being. Israel financial problems will! remain burdensome and complex. Palestine refugee problems are expected to become increasingly time consuming, as preparatory work is succeeded by reintegration projects requiring continuous and detailed coordination between" UNRWA, FOA, and State. Petroleum, transport and labor problems are handled primarily at the office level while land reform, the encouragement of private investment and problems of regional cooperation deserve more concentrated attention at the Bureau level.

OFFICE OF SOUTH ASIAN AFFAIRS

The Office of South Asian Affairs has primary responsibility for the conduct of the United States relations with five countries forming an area larger and more populous than all of free Europe. The strategic location, manpower, and natural resources of the region and the influence of certain of the countries in world affairs make the area of critical importance.

There are many perplexing questions and complex situations in the region which the Office of South Asian Affairs must follow. Several of the countries became

free only a few years ago. All of them are trying to establish and maintain political institutions which the people will support. Food shortages are a problem of each of them. Extensive irrigation and agricultural development are required throughout the area. Increased industrialization on a broad scale is urgently needed. All of the countries have serious financial problems. In addition, the people of the area are calling for economic progress as a prerequisite for continuing support of present governments.

There also are other factors which require close attention.

Communist infiltra

tion has continued to expand. The Soviet Union and Communist China border on South Asia for several thousand miles and attempts at subversion by the Communists are unceasing. India's policy of "nonalinement" makes the situation a complex one.

Relations between Pakistan and Afghanistan have been strained since 1947 by Afghanistan's sponsorship of an independent "Pushtoonistan" in the adjacent border areas of Pakistan. Provocative action by foreign agents could lead to warfare. India and Pakistan still are troubled by problems which arose from partition. The quarrel over Kashmir at one point approached open warfare. Serious questions over refugees and refugee property, and the distribution of irrigation waters, together with the historic Hindu-Moslem religious conflict, continue to complicate relations.

Afghanistan is trying to reconcile the divergent interests of its tribal elements and to develop its natural resources and at the same time to resist pressure from the Soviet Union without offending that country. Nepal continues to be unstable politically with the added difficulties which it has as a buffer state between India and Communist-controlled Tibet. Ceylon, an important communications link and possessor of a large naval base, is shipping rubber to Communist China. The activity and influence of India in world affairs and particularly in the U. N. are continuing to increase. Pakistan is expected to take a more prominent part in such affairs in the coming year. India and Pakistan, and Ceylon to a lesser extent, have considerable influence in the Commonwealth. Each of the South Asian countries is of importance to the security of the entire area. Those countries need our understanding and our help. Our efforts will be well rewarded

OFFICE OF INFORMATION POLICY

The principal function of the Office of Information Policy is to develop with Bureau country offices and Department functional offices basic policy and guidances for keeping the United States Information Administration informed about United States foreign policy objectives, on a country and regional basis, as well as about international events and developments that bear upon the attainment of these objectives.

The factors which must be considered in developing these statements include as appropriate the following:

(a) The primary interests shared by the people and governments of the area or country with the people and the Government of the United States.

(b) The areas of conflicting interests.

SPHE (c) The nature of the government.

(d) The groups and individuals most capable of influencing popular attitudes and governmental decisions and their dominant characteristics.

(e) The degree of susceptibility to and penetration by Soviet communism. The degree of participation and support therein of United States objectives in international organizations.

Attendant responsibilities of this office are:

1. Provision of full information and instructions concerning the USIA program to the chiefs of diplomatic missions.

2. Provision of post guidance and consultation to USIA on foreign policy problems on an immediate basis.

3. Review of USIA proposals to insure conformity with foreign policy aims. This involves a study of: (a) The objectives of the program; (b) the assumptions on which the program is based; (c) the audiences whose interest is primarily sought; (d) the media and the techniques primarily to be employed; (e) the themes primarily to be used; (f) the degree of cooperation to be sought on the part of the last government or indigenous groups and individuals; and (g) increase or decrease of personnel whether United States or indigenous facilities or outposts.

4. Consultation on the appointments of all chief USIA representatives abroad. 5. Advising the Department's Assistant Secretary for Public Affairs in the development of IES country plans and in application of overall educational exchange practices to particular countries.

6. In cooperation with the Department's Assistant Secretary for Public Affairs, to study post by post (a) information policy guidances issued and (b) media used by USIA to assure conformance to and furtherance of foreign policy objectives. 7. While having no direct responsibility in this field, to offer and be available for advice concerning the informational treatment to be given specific issues involving foreign policy considerations.

MISCELLANEOUS SALARY EXPENSE JUSTIFICATION

Overtime payments for 1954 and 1955 are estimated at a minimum amount t required for overtime payments to lower grade personnel to meet deadlines re- sulting from political crises and priority programs. It is assumed that a continued high rate of voluntary overtime will be worked without compensation by officer personnel and that a substantial portion of overtime for clerical personnel will be compensated by time off.

In 1954 and 1955, $1,500 will be required for the employment of consultants to give the Bureau expert advice on critical political and economic problems in the Near East.

GENERAL STATEMENT

Chairman BRIDGES. We have made the justification part of the record and we will be very happy to hear, Mr. Byroade, representing the State Department.

Senator SMITH (New Jersey). What did the House do with the request?

Did they cut you?

Mr. WILBER. This particular office was not mentioned in the report so we assume the House granted what we asked for.

Mr. BYROADE. Mr. Chairman, I have no formal statement. I would like to say a word or two with your permission and be very brief. I think we are asking for an honest budget and I think we are in a position to know that is true because it is not a hypothetical one. We are asking for exactly what we are operating under this year. The figures come out to a little less, moneywise, but that is because we have, do not have some of the liquidating expenses this year we had last year. We have gone through 2 reductions, 1 at the hands of the executive branch and 1 you helped us out a bit last year. We have gone through the reduction-in-force process. I think we are down to where one can say from here on out it really affects the

type of job you want done. I think anyone would agree that the problems in this part of the world have increased in the past 2 years. Problems for the United States, that is.

The fact is, we are operating on less. It is a large area. We have 53 posts overseas; most of them are small. I would be delighted to answer any questions the committee might have.

Chairman BRIDGES. I think most of the details on this, Mr. Byroade, Mr. Wilber, and Mr. Morton, are covered in your justification and in your summary sheet.

Senator Ellender, do you have any questions?

Senator ELLENDER. What is the difference in the amount you are asking for this year and that you got last year?

Mr. BYROADE. $132,390 less.

Senator ELLENDER. Less than you got last year?

Mr. BYROADE. That is right, sir.

TOTAL EMPLOYEES

Senator ELLENDER. How many of the employees that are paid out of this appropriation are on the Washington level?

Mr. BYROADE. 112, sir.

Senator ELLENDER. 112. They are all on the Washington level? Mr. BYROADE. No, sir. We have 550 Americans overseas in this budget to man the posts overseas.

Senator ELLENDER. And all of those people are paid out of this $798,425?

Mr. BYROADE. No, sir.

Mr. WILBER. Their office is broken down into two parts. You are looking at the domestic part. On the lower part of the sheet is another line.

Senator ELLENDER. When I stated that 112 were being paid out of this $798,425, is that correct?

Mr. WILBER. That is correct.

Senator ELLENDER. This covers merely the Near East, South Asian, and African affairs. Does that cover all of Africa?

Mr. BYROADE. No, sir; it does not cover Algeria which is part of the Metropolitan France and is under the European Bureau. It does not cover the Union of South Africa. It covers everything else. Senator ELLENDER. I notice on the Foreign Service the number of employees is 1,402.

Mr. BYROADE. That is correct, sir. That is total numbers of Americans and locals.

COMPARISON OF POSITIONS AND FUND REQUIREMENTS

Senator ELLENDER. And you are asking for the same amount of money that you have just indicated that was spent last year?

Mr. BYROADE. We are asking for the same number of positions. Senator ELLENDER. How much more money are you asking for and what is the reason for it?

Mr. BYROADE. We are asking for less, sir. The only reason there is any difference is the fact that last year in the process of eliminating people, we had liquidating costs which we do not need to put in this budget. We are asking for less money.

Senator ELLENDER. How do you take care of promotions, the additional sums necessary to meet or to pay those who are promoted?

Mr. BYROADE. That factor was included in last year's budgets and the same factor for that is in this year's budget.

Chairman BRIDGES. Is that all, Senator Ellender?

Senator ELLENDER. Yes, sir.

Chairman BRIDGES. Thank you very much, Mr. Byroade. We will hear from Mr. Holland.

Senator ELLENDER. Mr. Chairman, I had asked Mr. Wilber about these reports, political as well as economic reports. I did not want to go into that this morning.

Mr. WILBER. I am assembling that for all areas.

Senator ELLENDER. There is need to discuss detail now.

Chairman BRIDGES. We will hear from Mr. Holland.

STATEMENT OF HENRY F. HOLLAND, ASSISTANT SECRETARY FOR INTER-AMERICAN AFFAIRS

BUREAU OF INTER-AMERICAN AFFAIRS

Chairman BRIDGES. Next is the Bureau of Inter-American Affairs. The House bill provides the budget estimate of $638,115 for 91 domestic positions and $6,921,533 for 1,229 Foreign Service positions, in addition to about $12,000 for related expenses. The summary estimate table and justification will be placed in the record. (The table and justification referred to follow:)

BUREAU OF INTER-AMERICAN AFFAIRS, DOMESTIC