THE DOLLAR VALUE AND NATURE OF THE SPECIAL MILITARY PROGRAM

FOR JAPAN

The total book value-which in this case is replacement value-of the special program is, as I have said, $540 million. The acquisition cost of the equipment, of course, would be considerably less-not in excess of $350 million.

Of the total program, a small part, $6.6 million, represents side arms and related equipment loaned to the Japanese local police in 1948 and thereafter. An even smaller part, $4.9 million, consists of naval equipment-small guns, radar sets, and training aids. All of this equipment has been issued to the Japanese Coastal Safety Force, which is comparable to our Coast Guard, on a loan basis.

Approximately 98 percent of the total program, $528.5 million by value, represents Army equipment. Of this total, equipment having a value of approximately $129 million was loaned to the Japanese National Safety Force prior to March 31, 1954-most of it before June 30, 1953. Equipment loaned to the Japanese consisted initially of light weapons, such as rifles, machineguns, rocket launchers, and mortars, plus armored cars and personnel carriers. Subsequently, as the force developed, heavy weapons and equipment, including light tanks and artillery, were issued.

With this equipment loaned by the United States, plus equipment supplied by the Japanese themselves, the present 4-division National Safety Force is considered about 75-80 percent equipped.

In this connection I might add that the Japanese have contributed to this force all quartermaster equipment and medical supplies, except for minor amounts of clothing and medical supplies, 80 percent of all engineering equipment, 40 percent of all vehicles, and 30 percent of all signal equipment. They have also fed, housed, and paid their own forces, and have constructed camps, facilities, and the like. In addition to the equipment already loaned to the National Safety Force, we have set aside for issue to the force equipment, mostly heavy materiel-medium tanks and the like-valued at $263 million. About 85 percent of this is presently stockpiled in Japan awaiting issue, while about 15 percent, or $38 million, represents equipment now being produced by the Japanese under offshore procurement contracts funded out of Army appropriations. This equipment will be issued to the Japanese, as soon as transfer is approved by the Congress, at a rate compatible with the ability of the Japanese to absorb the equipment. This equipment will complete the equipping of the 4-division force, and will provide equipment towards the equipping of the additional two divisions which the Japanese have agreed to raise.

The balance of the special program, about $136.5 million, will be required to complete the equipping of the 6-division force and to maintain and replace the initial issue of equipment. This equipment will be generated from Army stocks in the Far East Command as U.S. forces are redeveloped out of Japan.

I call your attention to the two charts attached to the copies of the statement before you.

[The charts referred to follow:]

TOTAL PROGRAM $540.0

DEPARTMENT OF DEFENSE

• No materiel in this program is chargeable to IDAP appropriations. All enteriel procured with Army and Navy appropriations prior to 30 June 1953.

Mr. DUVAL. Chart No. 1 shows status and replacement value of the special program as of March 31, 1954; chart No. 2 shows the quantity and replacement value of selected major items in this program which have either been transferred on loan receipt to the Japanese, are available in the Far East Command for issue, or are required to complete the program.

The equipment comprising this special program is with few exceptions rebuilt World War II equipment. While entirely serviceable, this equipment is obsolescent from the standpoint of our services. A relatively small portion of the equipment-about $46 million-represents materiel produced or being produced in Japan under contracts placed prior to June 30, 1953.

I would like to emphasize again that no new money is required to pay for the special program, since it has been funded in its entirety from past Army and Navy appropriations. The Appropriations Committees of both the Senate and House were advised of the program in off-the-record discussions during the fiscal year 1954 appropriation hearings.

THE RELATIONSHIP OF THE SPECIAL MILITARY PROGRAM FOR JAPAN

TO THE MDA PROGRAM

I would like to comment on the relationship between this special program and the mutual defense assistance program.

When this program was initiated as an emergency program in June 1950, after hostilities broke out in Korea in June 1950, there was, of course, no sovereign government in Japan. Japan was simply an occupied country. We, therefore, could not make the kind of bilateral agreement with Japan which, under section 402 of the Mutual Defense Assistance Act of 1949, and section 511(a) of the Mutual Security Act of 1951, as amended, is required as a prerequisite to the furnishing of regular mutual defense assistance. Japan was without a sovereign government until April 28, 1952, when the Japanese Peace Treaty was ratified by the Japanese Diet [Japan's national legislative body], and Japan became a sovereign power.

Subsequently, negotiations were begun with the Japanese looking toward the making of a mutual defense assistance bilateral agreement. A great deal of time was required to consummate this agreement, and it was not finally signed until March 8, 1954. It has just been ratified by the Japanese Diet, effective May 1, 1954.

Because of the absence of the required bilateral agreement, this special program that I have discussed was originally set up outside the framework of the mutual security legislation and programs, and military equipment was loaned to the Japanese in the way that I have described. Most of the equipment actually loaned to the Japanese under this program was loaned to them in fiscal years 1951 and 1952. Major issues of equipment to Japan under the special program were suspended before June 30, 1953, in an effort to speed up the negotiations with the Japanese, looking to execution of the mutual defense assistance bilateral agreement. In other words, we used that as a bargaining lever.

The only MDAP assistance actually furnished to Japan to date has been a small amount of training aid furnished to train the Japanese in the use of the equipment loaned to them. This training aid was provided before the bilateral agreement was signed under the provisions of section 513 (b) of the Mutual Security Act of 1951, as amended, which permits the President to furnish relatively small amounts of assistance to countries without regard to the requirements of the mutual security legislation. After the Peace Treaty with Japan was ratified and it became clear that we would secure the necessary bilateral agreement from her, it was decided that all future military assistance, over and above the special military program, should be funded and furnished as part of the regular mutual defense assistance program.

Accordingly, funds were requested last year for fiscal year 1954 to continue the equipping of the Japanese Defense Forces. With the funds appropriated last year, materiel programs are in process of development as follows: $40 million for Japanese ground forces, $7.5 million for Japanese naval forces, $26.2 million for Japanese air forces, and there is also a training program of $3.9 million.

These programs, of course, are designed to dovetail with the special program I have been discussing. For example, the $40 million materiel program for the Japanese ground forces will provide training ammunition and spare parts for the weapons and equipment loaned to the Japanese under the special program. The 1954 mutual defense assistance program will also provide a small number of jet transfer aircraft and jet fighters to begin development of a Japanese Air Safety Force, and some naval training aircraft for the Japanese Coastal Safety Force.

General Stewart is prepared to discuss the fiscal year 1955 MDA program which will provide additional equipment for the Japanese air forces and naval forces.

All of you know the strategic importance of Japan to our defenses in the Far East. In our opinion, the equipping of Japanese forces through this special program and the mutual defense assistance program is a vital step toward our long-range objective of making Japan a strong and independent nation in the family of free nations, who can assume her own defense responsibilities and stand as a bulwark against the forces of communism in the Far East.

We strongly recommend that the Congress approve transfer to the Japanese of the equipment contained in this special program and in the regular MDA program for fiscal year 1955.

LEGISLATIVE AUTHORIZATION OF FISCAL YEAR 1955 MILITARY EQUIPMENT TRANSFERS TO JAPAN

In closing, I would like to say a word about the legislative history of section 114 of the new mutual security bill, under which we seek authority to transfer this equipment to the Japanese. A bill containing similar provisions was sent by the Department of Defense to the chairman of the Senate Committee on Armed Services and to the Speaker of the House of Representatives at the last session. This