MUTUAL SECURITY APPROPRIATIONS, 1960

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61-00357R000500120001-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 21
• Document Creation Date: December 23, 2016
• Document Release Date: March 12, 2014
• Sequence Number: 1
• Publication Date: September 12, 1959
• Content Type: OPEN SOURCE

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1959.:
CONGRESSIONAL RECORD SENATE
SACRAMENTO, CALIF., September 12, 1959.
Senator ALBERT GORE,
Senate Office Building,
Washington, D.C.:
Based on information from Bureau of
Public Roads that no reimbursements could
be made from trust fund after October this
year, California has had to discontinue all
contract advertisements for bid and award
on highway work. Highway program is now
slowing down very rapidly. Federal Highway
Act of 1956 very definitely guaranteed that
Congress would take necessary action to
keep highway program going as set forth in
that act. Any failure .on the part of Con-
gress to meet this obligation in full will put
not only California but every other State
in ari. untenable position. In my opinion
it ls absolutely essential that Congress
shOuld put forth every possible effort to see
that the obligation of the 1956 pledge of
Coi;tgress is fulfilled. California supports
you in this endeavor. Senators KucrrEL and
ENGLE being advised of this position.
EDMUND G. BROWN,
STAT
of California.
MUTUAL SECURITY APPROPRIA-
TIONS, 1960
The Senate resumed the consideration
of the bill (H.R. 8385) making appropri-
ations for mutual security and related
agencies for the fiscal year ending June
30, 1960, and for other purposes.
Mr. HAYDEN. Mr. President, I call
up my amendment which is at the desk
which provides for an additional ap-
propriation of $323,629 for claims and
judgments. After the' Committee re-
ported the bill to the Senate, a supple-
mental budget estimate for claims and
judgments was received. My amend-
ment will provide the funds necessary
to pay these obligations.
The PRESIDING OFFICER. The
amendment offered by the Senator from
Arizona will be stated.
The LEGISLATIVE CLERK. It is proposed
to strike out lines 17 to 25, inclusive, on
page 22 and lines 1 to 8, inclusive, on
page 23, and insert in lieu thereof the
following:
CLAIMS FOR DAMAGES AND JUDGMENTS
For payment of claims for damages as set-
tled and determined by departments and
agencies in accord with law and judgments
rendered against the United States by
United States district courts and the United
States. Court of Claims, as set forth in Sen-
ate Documents Numbered 48 and 56, Eighty-
sixth Congress, $708,137, together with such
amounts as may be necessary to pay inter-
est (as and when specified in such judg-
ments or provided by-law) and such addi-
tional sums due to increases in rates of ex-
change as may be necessary to pay claims
in foreign currency: 'Provided, That no judg-
ment herein appropriated for shall be paid
until it shall have become final and con-
clusive against the United States by failure
of the parties to appeal or otherwise: Pro-
vided further, That unless otherwise specifi-
cally required by law or by the judgment,
payment of interest wherever appropriated
for herein shall not continue for, more than
thirty days after the-date of approval of this
Act.
The PRESIDING ONVICER. The
question is on agreeing to the amend-
ment offered by the Senator from Ari-
zona [Mr. HAYDEN].
The amendment was agreed to.
Mr. JAVITS. Mr. President, I should
like to get the attention of the senior
Senator from Arizona, if I can.
I understand that the Appropriations
Committee has recommended the resto-
ration of funds asked by the executive
branch for special assistance to the level
of $245 million. One of the uses for
these special assistance funds proposed
by the executive branch was to provide
incentives for private infiestment. I
wish to be sure that there is nothing in
the action of- the committee to prevent
the use of these funds for this important
purpose of encouraging greater invest-
ment by private enterprise for the de-
velopment and progress of less developed
nations.
Mr. President, I ask the distinguished
chairman that question.
Mr. HAYDEN. There is nothing in
the bill that can be construed as such a
limitation if we wanted to make use of
that program. There is no question
about that.
Mr. JAVITS. Mr. President, I am very
grateful to the chairman, because I
think the extending of inducements to
private investors for private investments,
especially in the less developed areas
where these particular funds would be
used, would be most helpful. I think it
is one of the most important efforts by
which we can lift the burden of public
investment by substituting private in-
vestment. I submit also a memorandum
on this subject to be incorporated in my
remarks. _
Mr. President, I now call up my
'amendnient designated "91059 (D) " re-
lating to the Hudson-Champlain Cele-
bration Commission, and ask that it be
read.
The PRESIDING OFFICER. The
amendment will be' stated for the in-
formation of the Senate.
The CHIEF CLERK. On page 20 after
line 11, it is proposed to insert a new
paragraph as follows:
HUDSON-CHAMPLAIN CELEBRATION Ccavux_issmx
For an additional amount for salaries and
expenses in connection with the work pre-
scribed for the Hudson-Champlain Celebra-
tion Commission in the sum of $35,000 to be
disbursed in the same manner and for the
same effect that funds have heretofore been
disbursed.
The memorandum submitted by Mr.
JAVITS is as follows:
The entire concept of the proposed fund-
ing arrangement specifically identifiable for
encouraging conditions in the developing
countries for private enterprise was to fol-
low through on the principles of Section
413 of the Mutual Security Act.
The use of the $5 million labeled "invest-
ment Incentive Fund" within the Special As-
sistance category is essentially twofold: (a)
to improve the climate and improve the in-
stitutional framework within developing
countries for private productive invest-
ment?local and foreign.
This involves the use of funds to provide
technical advice and training on the laws,
credit facilities, government services and ad-
ministration, market studies, and other ele-
ments affecting investment. decisions. It is
intended to give particular emphasis to the
strengthening or creation of local institu-
tions which are specifically designed to as-
sist private investment. For example, a
number of countries have expressed interest
in establishing industrial development cent-
em. These institutions are designed to
furnish a broad range of technical and fi-
nancial skills and advice needed in creating,
expanding and operating business enter-
17787
prises. The center which now exists in the
Philippines has helped add over $100 million
to the annual industrial output of the coun-
try during the first 3 years of its operation.
It has helped create almost 10,000.new jobs,
plus a large volume of secondary employ-
ment. Local institutions of this kind not
only serve as a major instrument for local
private participation in the economic growth
of the country, but also assist foreign in-
vestment through their work in improving
the, investment climate of these countries
and in increasing the availability of the fre-
quently indespensable local partners for for-
eign investors.
(b) To provide the information on spe-
cific areas of investment possibilities in the
developing countries necessary for stimu-
lating investor interest in relatively unfa-
miliar countries.
Recent responsible studies, such as the
Straus report, indicate that there is an even
greater shortage of specific well-planned in-
dustrial projects seeking to attract private
capital than there is of capital itself. There
is a basic need for a more active U.S. Govern-
ment program to assist developing countries
identify opportunities for private foreign in-
vestment. Funds to finance the surveys and
investigations necessary to work up the
whole range of technical and financial data
required to make a project ready for private
financing would be used from.this program.
As this information becomes available, it
would be brought to the attention of Ameri-
can business through the channels of the
Commerce Department and the Small Busi-
ness Administration. This is particularly
important if we are to encourage greater in-
terest among medium and small size busi-
nesses in investing hi the developing coun-
tries. Large firms are equipped with mar-,
kating and research staffs and have greater
experience, financial resources, and contacts.
This is not true of smaller companies. It is
important to make every effort to utilize the
experience of small and medium size busi-
nesses which might be more readily adapta-
ble to many situations in the developing
countries. It is significant that the Straus
report (p. 27) recommended that special
funds be reserved for financing surveys and
Investigation to encourage new ventures in
less developed countries.
In brief, therefore, the program proposed
is designed to facilitate greater access to pri-
vate resources of capital and managerial
know-how. It is not a program to subsidize
private companies but rather to create the
conditions and awareness which permit
greater utilization of the private sector both
in ,the developing country and in the United
States in achieving the purposes of the Mu-
tual Security Act.
Mr. HAYDEN. Mr. President, I am
willing to take the amendment to con-
ference.
Mr. JAVITS. Mr. President, I wish
to say a word about the amendment for
the information of the Senate. I am
grateful to the Senator from Arizona for
being willing to accept the amendment
and take it to conference.
A tremendous celebration is now tak-
ing place in New York State.
The law with reference to this matter,
which is now Public Law 85-614, pro-
vided an authorization of $50,000 and
that has been appropriated last year.
This additional amount is being asked as
needed now and we hope very much that
the conferees will be agreeable to ac-
cepting it. It is very significant that far
more than that amount is being spent by
the State of New York and private
sources. This request comes at the mo-
ment when Princess Beatrix is visiting
the United States. But I did not wish
even to ask the chairman of the corn-
(
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17788 CONGRESSIONAL RECORD ? SENATE .
mittee to take the amendment to confer-
ence without disclosing to the Senate the
facts of the authorizing legislation.
Nonetheless the amount is small; I
hope the Senator from Arizona will take
it to conference.
Mr. HAYDEN. I have no objection
to taking the amendment to conference.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment from the Senator from New York.
The amendment was agreed to.
Mr. KEATING. Mr. President, I also
wish to express to the distinguished Sen-
ator from Arizona my gratitude for his
willingness to take the amendment to
conference. I realize that it is a rather
unusual request. I am also very grate-
ful to my colleague, the distinguished
senior Senator from New York.
Mr. JAVITS. Mr. President, do I cor-
rectly understand that the amendment
has been agreed to?
The PRESIDING OFFICER. It has
been agreed to.
Mr. JAVITS. Mr. President, I now
call up my amendment designated "9-
11-59(A)" and ask that it be read.
The LEGISLATIVE CLERK. On page 2, it
proposed to strike out line 19, and sub-
stitute therefor the following: "to remain
available until expended, and to become
available as follows: During the fiscal
year 1960 $590,000,000, and during the
fiscal year 1961 $500,000,000."
Mr. JAVITS. First, I should like to
explain my amendment, so as to make
clear that it does not call for an in-
crease in the amount provided by this
part of the bill.
I am endeavoring to provide an appro-
priation for 1961 for the Development
Loan Fund.
It will be noted that the bill provides
an appropriation of $590 million for the
fiscal year 1960. All my amendment
seeks to have appropriated is $500 mil-
lion for 1961.
First, let me make clear that there is
legislative authority, for doing that.
The Mutual Security Act provides more
than adequate authorization for both
the year 1960 and the year 1961.
In the Second place, this amendment
calls for complying with part of the
request made by the administration to
the Appropriations Committee, which
request the Appropriations Committee
has turned down.
Indeed, the committee report makes
that very clear, and says in so many
words that the committee turns down
the request for an appropriation, for the
year 1961, of $50a million for the De-
velopment Loan Fund.
Let me refer my colleagues specifically
to page 5 of the committee report:
The $500 million requested to be appro-
priated now, to become available in fiscal
1961, has been denied.
Mr. President, why do I submit this
amendment at a time when it seems very
clear that Members are very anxious to
hold down the appropriations, rather
than to increase them?
I offer the amendment because it is
very clear that by proceeding in this
way, the appropriation need not be in-
creased, but by using our heads we can
help the foreign-aid program, without
increasing the appropriation, and can
get other countries to help us with it,
at one and the same time.
It Seems to me that if we were to fail
to take advantage of those opportuni-
ties?which will benefit us, without in-
creasing the amount of the appropri-
ation for the fiscal year 1960?we
would be unwise indeed.
Mr. President, I am also moved to
propose this amendment by virtue of
that fact that when these mutual secu-
rity appropriations come before us lit-
erally on the last day of the session, as
they did last time, and as they are corn-
ing up-this time almost on the last day
of the session, there is a great tendency
to rush them through and to more or less
keep them as they are brought in by the
Appropriations Committee, in the feeling
that, "Well, it is too late to do anything
about it." But it is by now clear the
mutual security program is the single
most important instrument of the United
States in pursuance of its foreign policy
and in its cold war struggle.
I believe it would be in derogation of
my duty if, seeing a situation as clearly
as I think I see this one, I failed to give
the Senate an opportunity to express it-
self on this question and to agree with
me, if it thinks one of the most persua-
sive reasons of all for providing some
appropriation for the year 1961 for the
Development Loan Fund is in order to-
bring the situation in line with action
we have already taken in the authoriza-
tion bill.
It will be recalled that in the authori-
zation bill, which was passed through
the Senate in July of this year, we pro-
vided, under section 413(d) , which ap-
pears at page 6 of Public Law 86-108,'
for a study of methods by which the
United States and other nations, includ-
ing those which are parties to regional
agreements for economic cooperation to
which the United States is a party, or any
of them, might best together formulate
and effectuate programs of assistance
to develop the economies of free nations
so as to advance the principal purpose
of this act as stated in section 2 thereof.
In colloquial language, what that
means is that we are going out to try to
make partnership agreements with es-
pecially the Western European industrial
nations, in order to materially increase
the amount which we can afford to deal
with in our foreign-aid activities, and
especially in foreign economic aid. It is
a fact that there are countries in the
world, for example the Federal Republic
of Germany, which are very well able to
join with the United States in partner-
ship activities for foreign economic aid,
This is a fact not only in terms of re-
sources available; this is not even an
untried field, because we have come to
the rescue, in a very important way,
within the last couple of years, of India
and Turkey, in exactly the same consor-
tiums, in cases involving the United
Kingdom, in cases involving West Ger-
many, in cases involving the World
Bank, and also including India, for a
contribution, and I think an extremely
important one, from Japan.
This has been done, and in order to
do it, and do it effectively, we cannot be
on a 1-year basis in terms of foreign
_economic aid.
.SeRtember 12
I point out that we cannot negotiate
with Germany or Japan or any other
country to do this kind of job in unde-
veloped areas on an ad hoc, one-shot
basis, as was done in India and Turkey,
but on a continuing basis. Unless we
have some continuity in the contribu-
tion which we shall offer to them, it puts
us in a position of having to make that
kind of deal. It does not seem to make
It feasible to our negotiators who are
anxious to help lift the burden of for-
eign aid from us unless we have some ap-
propriations which will make it possible
at least for 1 year beyond the current
year.
That is the basic reason for this
amendment.
I point out also that when the Presi-
dent of the United States went abroad
to Western Europe very recently on his
trip, the President made- a considerable
point of the fact that he was going to
seek cooperation from Western Euro-
pean countries in respect to foreign eco-
nomic aid. That process has begun,
with the exchange of visits between the
President and Mr. Khrushchev, with the
reports that will be made to other coun-
tries after the Khrushchev visit, with
possibly summit conferences with heads
? of other countries. It seems to me we
are shortsighted if, without increasing
this year's appropriation, we do not at
least put in the hands of our negotiators
the tools that will do them the most
Food in an effort to get main partners
in foreign aid.
It seems to me countries in Asia, Afri-
ca, and South America would cheer and
applaud the fact that the Congress of
the United States, without spending
more money than it feels it should, at
the same time is looking ahead to the
effort to get more aid to them by means
of the partnerships I have described.
It is very hard for me to understand-
why this request for the Development
Loan Fund should have been turned
down. It seems to me when we turn
down requests of that kind we are Iltrt
being wise about how the prestige, re-
sources, and wealth of the United States
can be employed. At the same time we
do not seek greater current appropria-
tions, which we fear very much in con-
nection with the increase of our deficit.
It seems to me by doing this we do more
than appropriate more money, and yet
we do not appropriate any more money
at all.
.Mr. President, I wish to give a few
facts on where this Development Loan
Fund stands and what kind of a job it
has done and why it urgently needs this
kind of approach.
There are now pending, as of June 30,
1959, loan applications which await ap-
proval and action by the Development
Loan Fund $1,514,630,000. That is the
amount on hand after using up practi-
cally 100 rtercent of the money for loans
which has been appropriated up to now.
Mr. President, I ask unanimous con-
sent that there be incorporated in the
RECORD as a part of my remarks a sum-
mary of the Development Loan Fund
proposals and commitments by geo-
graphical area as of June 30, 1959.
There being no objection, the Sum-
mary Was ordered to be printed in the
RECORD, as follows:
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1959'
CONGRESSIONAL RECORD - SENATE
Summary of Development Loan Fund proposals and commitments, by geograPhical area (as of June 30, 1959)
17789
Africa
Europe
Far East
Latin
- America
Near East
South Asia
Total
?
Charges against lending authority:
Loan and guarantee agreements signed
28,840
53, 100
118,626
49, 190
106, 100
267, 450
? 623, 306
Letters of advice issued
1,300
9,000
33, 050
15, 600
21,800
32,550
113, 300
Other project commitments
.
0
0
17,250
0
6,200
0
23, 450
Letters of advice pending
10,700
16,200
9, 300
1, 000
38, 300
0
75, 500
Total
40, 840
78, 300
178, 226
65, 790
172, 400
'
300, 000
835, 556
,
Percent of charges against lending authority
? 4.9
9. 4
21.3
7.9
20.6
35.9
100. 0
Proposals under consideration and on hand (preliminary):
Status A
22, 300
0
1 4,456
12, 700
'0
4, 500
43, 956
Statue B
41,634
17, 734
I 104, 084
22, 922
2 148, 430
41, 382
376, 186
Status 0
61, 674
221, 245
127, 919
28, 487
254, 993
274, 218
968, 530
Setus N
365
0
19,200
7, 587
71, 000
27,800
125, 952
Total
125, 973
,
238,979
* 255, 659
71, 696
474, 423
347,900
1, 514, 630
Percent of proposals on hand
8.3
15.8
16.9
4. 7
31.3
23.0
100.0
-.
Proposals no longer under consideration (preliminary):
Inappropriate for Development Loan Fund financing
8, 170
4,980
27, 864
141, 942
57, 187
9,872
250, 015
Insufficient information or withdrawn by borrower
8,046
950
82, 954
126, 007
54, 168
44,312
316,437
Being considered by other lending institutions
19, 870
64, 805
132, 444
93, 298
61, 615
2,283
374, 315
Total
36, 086
70, 735
243, 262
361,247
172, 970
56, 467
940, 767
Percent of pwposals no longer under consideration
3.8
7. 5
25.9
38.4
18.4
6.0
? 100. 0
Total proposals (A ?B-FC)
. 202, 899
,
388, 014
677, 147
498, 733
819, 793
704, 367
3, 290, 953
Percent of total
6.2
'
11. 8
20.6
15. 1
24.9
21.4
100. 0
1 Excludes status A and B items under Philippines project commitment.
'Excludes status A and B items under Turkey project commitment.
Summary of Development Loan Fund obligations and commitments (as of June 80, 1959)
[In thousands]
,
Obligations I
Other loan authorizations
and commitments as of
June 30, 1959
Total ?blip-
tions commit-
ments and
authoriza-
tions as of
June 30, 1959
Country
Loan description
-
Cumulative
Cumulative
Loan corn-
Loans
as of Jan.
as of June
mitments 2
authorized 3
(2)-F (3)+ (4)
31, 1959
30, 1959
(1)
(2)
(3)
(4)
(5)
Africa:
Ethiopia
Cotton textile mill (SAIDE)
$500
$500
Liberia '
Sawmill expansion
$190
$190
Telecommunications improvement
3,000
3,000
Subtotal, Liberia
3, 190
3, 190
3, 190
Libya
Tripoli electric power
5, 000
5,000
Nigeria
Apapa Warehouse
800
800
Nyasaland
Nyasaland and Trans-Zambesia Rys.?
$10, 700
10, 700
Somalia
Credito Somalo (agricultural lending)
2,000
2, 000
Sudan
Cotton textile mill
10,000
10, 000
Tunisia
National Railroad (rolling stock)
2,450
Esparto pulp factory
6,250
Subtotal, Tunisia
8,650
8,650
t
Total, Africa
3, 190
28, 840
1, 300
10, 700.
40, 840
.
.
Europe: .?
Netherlands
Resettlement of emigrants in Australia
3,000
3,000
3,000
Spain
Irrigation (eartinnoving equipment)
7,700
,.
General Electrica Espanola
1,200
RENFE, railway track rehabilitation
14,900
Subtotal, Spain
22,600
1,200
23,800
Yugoslavia
Nitrogen fertilizer plant
22,500
22, 500
Diesel locomotives '
5,00.0
Kosovo thermal electric power
9,000
Trebisnjica Hydroelectric, stage 1
15,050
Subtotal, Yugoslavia
22, 500
27, 500
9,000
15,000
51, 500
Total, Europe'
25,500
53,100
9,000
16,200
-
78,300
,
Far East:
Indonesia
Railway rehabilitation
3,000
Harbor rehabilitation
'
6,000
Subtotal, Indonesia .
9,000
9,000
Korea
Tong Yang Cement Plant
? 2,140
2,140
Chung Ju Power, design engineering
1, 500
Telecommunications improvement
3, 500
Korea Reconstruction Bank
5,000
Oriental Chemical Industry Co., Ltd
5,600
Subtotal, Korea
2, 140
7, 140
5,000
5, 600
17, 740
Footnotes at end of table.
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17790 CONGRESSIONAL RECORD -- SENATE
September 12
Summary of Development Loan Fund obligations and commitments (as of June 30, 1959)-Continued
[In thousands)
Country
,
Loan description
Obligations I
0 ther loan . authorizations
and commitments as of
June 30, 1959
.
Total obliga-
tions commit-
ments and
authoriza-
tions as of
June 30, 1959
Cumulative
Cumulative
Loan corn-
Loans
5
as of Jan,
as of June
mitments 2
authorized 2
(2)-F (3)-F (4)
?
31, 1959
30, 1959
/
(1)
(2)
(3)
(4)
(5)
Far East-Continued
Malaya
North Kiang Straits, port development
$10, 000
ir
Road and bridge construction ?
10,000
I
Subtotal, Malaya
20,000
$2(1. 009
Philippines
Small industry loan fund
Roads, bridges and rehabilitation of public works equipment
5, 000
18, 750
'4
Bataan pulp and paper mill
$5, 300
Mindanao Portland Cement Corp
$3, 700
Development projects 5
17, 250
, Subtotal, Philippines
23, 750
' 22, 550
3, 700
50, 000
Taiwan
Railway modernization -
'
$3, 260
3, 200
Shihmen multipurpose dam
21, 500
21, 500
Improvement of fishing industry equipment
686
Cement plant
2, 750
2, 750
Ingalls-Taiwan Shipbuilding 2
6, 500
6, 500
Byproduct coke oven
1, 000
Aluminum Corp
1,350
Small industry fund
-
2, 500
Subtotal, Taiwan
33, 950
36, 986
2, 500
39, 486
Thailand
Bangkok power distribution
20,000
Meat processing plant
750
Channel bridge
1750
Subtotal, Thailand '
21, 750
750
22, 500
Vietnam
,.
Saigon-Cholon water distribution system
19, 500
19, 500
Total, Far East
36, 090
118, 626
50, 300
9,300
178, 225
Latin America:
Argentina
Transportation, power, industry .
24, 750
24, 750
Bolivia
Sugar mill
2, 500
El Alto Airport
1, 500
Subtotal, Bolivia
2, 500
1, 500
4,000
Brazil
Rural resettlement, Carembei Castrolanda
240
-
Rural resettlement, Anhuraas Pedrinhas
300
Subtotal, Brazil .
240
300
540
Chile
Airport design engineering
300
300
Costa Rica
Resettlement .
300
300
300
Ecuador
Pan American Highway
4, 700
.
4, 700
Guatemala
Rubber production
5,000
Kenai bag factory
400
Subtotal, Guatemala
400
5,000
5, 400
Haiti
Artibonite Valley development
4, 300
4, 300
Honduras
Highway development
5,000
5,000
5,000
Nicaragua
Public utilities, Matagalpa
600
600
Paraguay
Waterworks, Asuncion
1,000
1,000
Road to Brazil
2,500
2, 500
International Products Corp. (ranching, meatpacking, quebracho)__
2,600
2,600
Telecommunications
1,000
Subtotal, Paraguay
- \ 6, 100
6, 100
1, 000
7,100
Uruguay
UTE telephone expansion
8,800
8, 800
Total, Latin America
11,400
49,100
15,600
1,000
415,790
Near East:
Greece- -
Nitrogen fertilizer plant
12, 000
. 12,000
13, 000
Iran .
Plan organization projects
47, 500
47, 500
Industrial Development Bank
5,200
Highway construction (Avej-Andimeshk)
25,000
Subtotal, Iran
47,500
47, 500
5,200
25, 000
77, 700
Israel
Development loan (power, railways, agricultural, and industrial
development).
15, 000
15, 000
Industrial Institution (development bank)
5,000
5, 000
Subtotal, Israel
15, 000
20, 000
5,000
25,000
Jordan
Electric power
1, 200
Phosphate mines
2, NO
'
1,200
2,500
3,700
Subtotal, Jordan
Lebanon
El-Bared powerplant project
NO
Agricultural, Industrial, and Real Estate Bank
,
5, 000
Subtotal, Lebanon
5,500
5, 500
Footnotes at end a table. ,
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1Y5Y CONGRESSIONAL RECORD - SENATE
Summary of Development Loan Fund obligations and commitments (as of June 30, 1959)-Continued
fin thousands]
17761
obligations 1
?
Other loan authorizations
and commitments as of
June 30, 1959
Total obliga-
tons commit-
ments and
authoriza-
tions as of
June 30, 1959
Country
Loan description
Cumulative
Cumulative
Doan corn-
Loans
?
.
as of Jan.
as of June
mitments 2
authorized'
(2)-l-(3)-l- (4)
31, 1959
30, 1959 ,
(1)
(2)
(3)
(4)
(5)
Near East-Continued
I'
?
Syria
Worsted textile plant
$1, 000
$1. 003
Turkey
Industrial Development Bank
$10,000
$10,000
Aerial mineral survey
900
Zonguldak coal development
14, 500
Plastics and related chemicals plant
6, 100
I
Electric power distribution
7,000
Koruma Chlor-Alkali and Pesticides manufacturing
$2, 800
Development projects 6
6, 200
Subtotal, Turkey
10, 000
25, 400
19, 300
? 2,800
47, 500
Total, near east
84, 500
106, 100
28,000
38, 300
172, 400
South Asia:
Ceylon
Colombo R.R. (motor coaches)
750
750
.
Highway development equipment
900
900'
'
Irrigation and land development
1,600
3,600
Subtotal, Ceylon
3, 250
3,250
3, 250
India
Railways (steel for locomotives and rolling stock)
S,PS.
0 0 0 0 0 0 0
0 0 0 0 0 0
40, 000
Road transport equipment, cement and jute industry machinery__
35, 000
Steel for public projects
18, 000
?
Steel for private projects
22,000
20, 000
Equipment for railway development
35, 000
-
Equipment for public power development
10, 000
Capital equipment for private industry
15, 000
Subtotal, India
175, obo
175, 000
20, 000
195, 000
Pakistan
Karachi water and sewerage
5, 500
0,000
Industrial Credit Corp
4, 200
4, 200
/
West Pakistan high tei?ZIon grid (power transmission)
14, 700
Karnafuli multipurpose darn
'17, 500
West Pakistan ground water development (reclamation)
15, 200
West Pakistan secondary transmission
23, 000
Railway rehabilitation equipment
9, 100
Port of Chittagong
2,000
Port of Chalna anchorage .
2,000
Sul gas transmission
2,000
Marking and charting of navigable waterways of East Pakistan
1, 750
Karachi commercial jet strip
4,800
Subtotal, Pakistan
9,700
89, 200
12,550
101,750
-
187, 950
267, 450
32, 550
300, 000
? Total, south Asia
Grand total
348, 630
6 623,300
136, 750
75, 600
835, 555
'Loans and guarantee agreements signed.
2 Loans approved by the Board of Directors, for which letters of advice have been
issued to borrowers. Also includes country development project commitments
mentioned in footnote 3.
Loans approved by the Board of Directors, but, letters of advice not yet issued.
Mr. JAVITS. Mr. President, this sum-
mary showsthat we are utilizing the
Development Loan Fund where it will do
the most good, for in the major areas,
for example, the Near East and south
Asia, which are key areas in this strug-
gle which we are waging with the Com-
munists, the greatest amount of Devel-
opment Loan Funds are now being em-
ployed.
May I point to one very fundamental
philosophical concept which it seems to
me Congress is not giving sufficient at-
tention to, and it is this: We must un-
derstand what is our strength and what
is the other side's strength. So far as
we are concerned, our strength consists
in the fact that we have credit and re-
sources and therefOre we can work along
with people who are working as reason-
ably hard as people should, who are hav-
ing some of the fruits and benefits of life
currently, instead of postponing them
until some indeterminate era in the fu-
ture. We are able to do it because we
No. 162-19
Will probably be split into 2 loans.
6 Agreement to finance projects within country development programs, subject
to approval of the specific projects.
6 Includes loan guarantee of $4,500,000.
have credit and resources in the free
world.
On the other hand, the Communists
proceed by exacting, by the strongest
discipline and the greatest amount of
tyranny, a backbreaking amount of la-
bor and forbearance, in terms of the
standards of living, from the working
people in the Communist countries.
If we handicap ourselves by refusing
to make available the amount of credit
that we should in order to facilitate, to
lubricate the whole system of the free
world, we shall find ourselves falling be-
hind, and markedly behind, what the
Communists are able to do, and we will
be in great jeopardy of losing this least
developed area.
The most salient example of that is
'India. We were suffering in India very
seriously from the fact that America was
not highly considered there, nor were
its aid programs highly considered there,
but by concentrating our aid in a major
way in that country with the $2 billion
we had already in one way or another
employed there, it has finally broken
through.
Mr. President, may we have order?
I do not mind if Members are not enough
interested to listen, but it is sometimes
difficult to talk above the din, and I do
think, with all respect, that what I am
talking about is worthy of attention.
The PRESIDING OFFICER. The
Senate will be in order.
Mr. JAVITS. Mr. President, we spent
about $2 billion in India all told, and it
finally has broken through.
U.S. News & World Report, in its issue
of August 3, 1959, stated the following:
An American today, however, constantly
hears and reads praise about what his coun-
try has done and is doing to help India.
Although there has been no letup in Soviet
aid, an independent poll taken recently
showed that, among those Indians who had
an opinion, a majority believed the United
States was doing more than the Soviet
Union. For the first time the balance tip-
ped in favor of America.
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17792 CONGRESSIONAL RECORD - SENATE September 12
Mr. President, when we see today the
tremendous significance of India in re-
sisting the aggressive forward march of
the Communist Chinese regime, I think
we begin to be impressed with what can
be done by a very modest amount of
foreign aid used and appropriated in
the right way, as compared with what
we spend every year without blinking
an eye on our military defense.
I would like to give some further facts
with respect to the Development Loan
Fund. I ask that there be inserted in
the RECORD as part of my remarks a
chart showing the loans approved, by
currency of repayment, together with a
chart showing the uses to which the
individual loans made by the develop-
ment loan fund are being employed in
the least developed areas.
There being no objection, the chart
was ordered to be printed in the RECORD,
as follows:
Loans approved, by currency of repayment,
as of June 30, 1959
Num-
ber of
loans
Amount
(in dol-
lars or
dollar
equiva-
lents) 1
U.S. dollars (see attachment)
Dinars-Yugoslavia
Ewan-Korea
New Taiwan dollars-Taiwan
Ethiopian dollars-Ethiopia
Lempiras-Honduras
Guaranies-Paraguay
Rupees-Ceylon
Drachmas-Greece
Rupees-India
Pounds sterling-Jordan
Pounds-Israel
Pounds-Libya
Rupees-Pakistan
Lira-Turkey
Pesos-Uruguay
Pesos-Philippines
Dinars-Jordan
Piasters-Vietnam
Bolivianos-Bolivia
Pesatas-Spain
Pesos-Chile
Rupiahs-Indonesia
Curzeiros-Brazil
Somalos-Somalia
Sucres-Ecuador
Baht-Thailand
Tunisian francs-Tunisia
Gourde,s-Haiti
Other-Tunisia 3
Total
Other project commitments
Loan guarantee
Total charges against lending
authority
2 24
4
5
7
1
1
3
3
8
1
3
1
11
6
1
2
1
1
2
3
1
2
2
1
2
2
1
1
$197, 115
42, 125
17, 740
32, 986
500
5,000
3,000
3,256
12.000
193,000
2. 500
25,000
5,000
101, 750
41,300
2,200
23, 750
1,200
19, 500
4,000
23, 800
300
9,000
540
2,000
2,350
21, 750
2,400
4,300
? 6, 250
102
807,600
23,450
4,500
835, 556
I Excludes other project commitments and loan guar-
antee.
2 Excludes 6 loans where part of principal repayment
is in foreign currency (Yugoslavia, fertilizer; Ecuador,
highway; Paraguay, Brazil, road; Uruguay, telephone;
Paraguay, telecommunication; Yugoslavia, Trebisnjica,
power).
z Repayable in currency of Tunisia, France, or United
Kingdom to be determined.
ATTACHMENT
Loan amounts repayable in U.S. dollars,
June 30, 1959
[Amount in thousands of dollars]
Loan agreements signed:
Argentina: Banco Central, Trans-
portation Power & Industry__
Liberia: Sawmill
Liberia: Telecommunications
Ecuador: Pan American High-
way
Netherlands: Resettlement
Yugoslavia: Pancevo fertilizer 1-
Taiwan: Ingalls-Taiwan
Footnotes at end of tables.
24, 750
190
3, 000
2,350
3, 000
5, 625
2, 000
Loan amounts repayable in U.S, dollars,
June 30, 1959-Continued
[Amount in thousands of dollars]
Loan agreements signed-Continued
.Costa Rica: SICA resettlement__
300
Malaya: North Kiang Straits_-_-
10,
000
Malaya: Roads and bridges
10,
000
Nicaragua: Matagalpa utilities
600
Iran: Plan organization project
47,
500
Paraguay: Brazil Road 2
1,000
Paraguay: International Products
Corp
,
2,
600
Sudan: Textile Mill
10,
000
Guatemala: Henaf Bag Factory...,
400
Subtotal, Loan Agreements
Signed 123,315
Letters of advice issued:
Philippines: Bataan Pulp & Paper
Mill 5,300
Nigeria: Warehouse 800
Guatemala: Rubber production 5, 000
Uruguay: UTE Telephone 4 6, 600
Thailand: Meat processing 750
Iran: Development Bank 5,200
. Subtotal, letters of advice
issued 23,650
Loan approved (letters of advise
not yet, issued) ' 50, 150
Total 197, 115
1Repayment of loan is 75 percent in Yugo-
slav dinars, 25 percent in dollars.
2First 18 payments in guaranis, last 12 in
dollars.
3 Repayment of loan 50 percent in sucres,
50 percent in dollars.
4Repayment: First 25 percent in pesos;
75 percent in dollars.
Mr. JAVITS. Mr. President, I ask
unanimous consent that there be in-
cluded in my remarks a brief statement
describing the way in which the Develop-
ment Loan Fund stimulates private in-
vestment, and that statement demon-
strates that as of June 30, 1959, about 34
percent of all the loan commitments
made out of the Development Loan
Fund, $285 million were for the private
sector in the less developed sectors of the
free world.
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
As of June 30, 1959, about $285 million, or
about 34.,percent of our total of $836 million
of loan commitments were for the use of the
private sector in the less developed areas.
Direct loans to private enterprise and to
mixed private-public organization amounted
to $115 million of the total $285 million.
We feel this is a creditable record for our
first year and a half of operation and hope to
build on it in the future. To expand our
operations in the area of private enterprise,
we will utilize direct loans, loan guarantees,
and loans to intermediate credit institutions
for relending to private entrepreneurs.
Government enterprise' will probably con-
tinue to be one of our principal borrowers
chiefly because in many of the less developed
countries a prime need is for the establish-
ment of basic facilities such as roads, ports,
and powerplants in which private investors
have expressed little interest. The establish-
ment of such facilities through government
enterprise, however, will open new oppor-
tunities for increased activity by private
enterprise in these countries, and, as a corol-
lary, develop additional opportunities for
activities in this sector by the Development
Loan Fund and others. The installation of
powerplants, for instance, can lead to the
undertaking of new private industrial enter-
prises using the available facilities; or the
opening up of new areas through the con-
struction of additional roads and related fa-
cilities can provide incentives for local entre-
preneurs to tap, with the assistance of ex-
ternal loans, the resources of a less developed
country. Therefore, DLF. assistance ' for
sound projects initiated by government en-
terprise can be regarded as a step toward
stimulating the private sector in the borrow-
ing country and permitting it to play a
significant role in a country's development.
Mr. JAVITS. Mr. President, I am al-
most through, but I do feel that what I
am proposing to the Senate is something
to which the Senate needs urgently to
give its attention.
I point out that ,the authorizations
which are available ni the Mutual Se-
curity Act to cover 1960 and 1961 far
exceed the amounts which are provided
for in the bill, and the arliount which I
am suggesting be provided for 1961.
For one year, 1960, $700 million is au-
thorized. The bill provides $590 million.
For 1961, $1,100 million is authorized.
I am proposing that we assure the De-
velopment Loan Fund of at least $500
million so it can go ahead and make
advance commitments and partnership
arrangements with other countries..
Mr. President, it seems to me that
those who are the most active in the
feeling that we ought to cut down on our
foreign aid commitments are those who
should the most favor what I am propos-
ing, because it is our one way of going
out and getting partners and thereby
relieving us and our budget of the con-
tinuous requirement for foreign aid. -
Mr. MORSE. Will the Senator yield
at that point in his remarks?
Mr. JAVITS. I yield.
Mr. MORSE. As one who meets
completely the description the Senator
from New York has just made in his
speech, that is, one who believes we
ought to cut down on our foreign aid in
reference to wherever we can show that
there is waste in the foreign aid, or that
the money is going into any project that
is not going to promote the best foreign
relations of the United States, I com-
pletely endorse the suggestion the
Senator from New York is making in
his very able speech this afternoon. It
is one of the ways in ? which we can
strengthen our foreign aid program. I
think it is also one of the ways we can
develop a sound development loan pro-
gram that puts the emphasis on the
loans rather than the policy we have
been following where there has not been,
in my judgment, the adequate check
upon the expenditure of our money that
there should be. I want to compliment
the Senator from New York on what I
think is an important contribution on
his part.
Mr. JAVITS. I am very grateful to
my colleague from Oregon and may I
say to him that one of the reasons I ad-
mire him so much, and one of the things
on which I try to qualify myself is to
meet the issues which I myself propose.
I think he does this, too. It would be
easy to-worry me about the fact that my
amendment might be construed by my
constituents as trying to increase ap-
propriations at a time when I have
thousands upon thousands upon thou-
sands of letters to reduce them, the num-
ber being equal to the number of popu-
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195.9 CONGRESSIONAL RECORD ? SENATE
lation that New York has in excess of
that of other States in proportion.
I do not believe in being intimidated
by things which, in the absence of ex-
planation, might seem wrong to my
constituents. But like the Senator from
Oregon, I am perfectly happy, any time
I think something is right, to take on
the explanation and face it, because
that is why the people of my State sent
me here, not to take the easy courses
out. I have noticed that the Senator
from Oregon, like myself, when he is go-
ing to spend money, is not afraid to vote
appropriations and vote taxes in order
to do it. So in this situation I think
the easy way out would be to say, "Don't
touch this $590 million. Let it alone."
I do not want to increase the amount
this year, though I think we are wrong
about it. I do not think that is the
thing to do, in view of the sentiment of
the country. But not to do some for-
ward planning for next year I think is
unwise, and I am grateful to my col-
league, who is a distinguished member
of the Foreign Relations Committee, for
putting the matter in focus.
Mr. President, I have the honor, be-
cause of the graciousness and the kind-
ness of the Senate, to be the chairman
of the Economic Committee of the
NATO Parliamentarians. That is a body
which has on it one representative of
the Parliaments of each of the NATO
countries, and in practically every case
he is a highly skilled economist or man
who has been deeply concerned with for-
eign economic policy. That has been a
very active committee. It has done a
good deal in the field of foreign private
investment, and it has done a good deal
in terms of trying to help the one and two
commodity countries which suffer very
materially from radical price swings,
and it is now addressing its attention to
this particular subject of partnerships
between other countries and the United
States in respect of foreign economic
aid.
I have proposed this amendment out
of deep conviction based upon this in-
timate association of the represeritatives
of the very governments which have it
within their power to cooperate and to
go into partnership with us in this mat-
ter that this is what they are waiting
for. They are waiting for the United
States to put itself in a posture where
it can really work with them, where it
does not on the one hand say it wants
partnership, wants help, and wants oth-
er people to take over some of the for-
eign aid burden, but does not actually
put itself in a position to ac.complish
that end, which this amendment pro-
poses.
Mr. President, I close upon this note.
No matter what we may be doing or
thinking in this field, we must always
bear in mind that we are not doing it
free of competition, but, on the con-
trary, we are meeting the most acute
kind of competition from the Soviet
Union and from Communist China it-
self, both of which are engaged in a
major way in the foreign aid program.
If there is any reason, therefore, which
could be more certain than that one for
the fact that we should not only pro-
ceed alone but tie on other associates
with us, it is that.
The Soviet Union foreign aid program
.is now in the area of about $2 billion.
The foreign aid program of Communist
China is of the magnitude of hundreds
of millions. It seems to us that the
greatest flattery is emulation. It seems?
to me that if anything has confirmed the
rightness of what we are doing, it is the
fact that the Communist powers, after
derisively laughing at our program, have
had to do the same thing. We were the
first in the field, and we were the most
effective in the field. If we have the
good judgment to really swing our
weight, I think it can be a decisive factor
in the victory for freedom. If we swing
less than our weight, it is we who are
being unwise and proposing to fight a
battle for survival of the most intense
kind, with one hand tied behind our
backs.
I hope the Senate will act favorably
on my amendment.
Mr. DWORSHAK. Mr. President, will
the Senator yield?
Mr. JAVITS. I yield.
Mr. DWORSHAK. The Senator from
New York is quite a realist. I should like
to ask him if he is aware of the fact that
recently, in July, the Senate passed ?the
authorization for the Inter-American
Development Bank, which commits the
United States to make available $450
million for development loans in South
America. Would it not appear logical
that, to that extent, pressure upon the
Development Loan Fund under the ICA
program would be greatly lessened, be-
cause of the new proposal to give specific
recognition to the inter-American coun-
tries?
Mr. JAVITS. What has been done in
respect of Latin-America will help very
materially; but, as every United Nations
study and every study by our own com-
mittees and experts has demonstrated,
we are so far deficient in the amount of
capital resources which the world needs
to deal with the underdeveloped areas
that every way we can increase that
amount will mean helping ourselves to
keep the world safe for freedom. The
proposal I make is exactly the same kind
as the Inter-American Bank. It pro-
poses to get others ,to contribute too.
That is the whole purpose and point of
it.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from New York.
[Putting the question.1 ?
Mr. JAVITS. Mr. President, on that
question I ask for a division.
On a division the motion was rejected.
Mr. DODD. Mr. President, I offer the
amendment 'which I send to the desk
and ask to have stated.
The PRESIDING OFFICER. The
amendment offered by the Senator from
Connecticut will be stated.
The CHIEF CLERK. ? On page 19, after
line 12, it is proposed to insert:
COMM/SSION ON INTERNATIONAL RULES OF
JUDICIAL PROCEDURE, SALARIES AND EXPENSES
For an additional amount for "Salaries and
expenses," $34,000.
Mr. DODD. Mr. President, it will not
take very long to explain this amend-
.
17793
ment. I wish to say to the distin-
guished chairman of the Committee on
AppropriatiOns that I tave discussed? it
briefly with other Members and with
the chairman. I voted in committee to
eliminate this language, but since then
I have talked with some lawyers who
have convinced me that it would be a
good idea to restore this item. If the
Senate will indulge me for 2 or 3 min-
utes, I shall explain the amendment.
The purpose of this amendment is
simple and my explanation will be brief.
It Would add to the appropriation bill
before us the amount of $34,000 to en-
able the Commission on International
Rule i of Judicial Procedure to continue
its work. Earlier this week, the House
and Senate passed a bill extending the
life of this Commission to December 31,
1961. But this action of Congress will
be nullified for all effective purposes un-
less we appropriate the small amount of
money, $34,000, necessary to pay the pub-
lic members of the Commission.
The purpose of -the Commission is to
make recommendations for reforming
the practice of State and Federal courts
in first, serving processes, subpenas, or-
ders to show cause, and other judicial
documents in foreign territory; second,
in obtaining oral and documentary evi-
dence abroad; third, in obtaining evi-
dence of foreign law; and fourth, recip-
rocally, rendering assistance to foreign
courts.
The Congress has directed the Com-
mission to draft international procedural?
agreements for negotiation by the Sec-
retary of State, and to recommend to
the President other legislation such as
amendments to the pertinent provisions
of the Federal judicial and criminal code,
and the Federal rules of civil and crim-
inal procedure. A study of the equiva-
lent procedures of the courts of foreign
countries must be made.
In addition to bringing about neces-
sary reform in the practice of our State
and Federal courts, the Commission can
be instrumental in creating interna-
tional good will through its examination
of ow' juridical relations with foreign
countries. This is especially true of the
newer countries. For example, Morocco,
just a few days ago, indicated its desire
for an examination of its unsatisfactory
juridical relations ' with the United
States.
The Commission on International
Rules Of Judicial Procedure consists of
nine members. There is also an advisory'
committee of 15 members. The paid
working staff consists of a Director, two
junior research attorneys, and one sec-
retary-stenographer. Of the $34,000 re-
quested by this amendment, 125,000 is
necessary to pay the salary of this small
staff.
The additional $9,000 is for the pur-
pose of enabling the Commission to meet
the expenses incident to a meeting of
its advisory committee and the prepara-
tion of a report. -
In brief, therefore, the purpose of the
Commission is to come up with recom-
mendations that will make legal pro-
ceedings involving acts in a foreign ter-
ritory less expensive, less cumbersome,
and less time consuming for our attor-
neys and their clients.
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17794 CONGRESSIONAL RECORD? SENATE
Unless we act in the next few minutes
to provide this Commission with the
$34,000 it needs' to continue minimal
operations, it will go out of business and
the act of Congress of a few days ago
which extended its life for 2 years will
become meaningless.
There is a great deal of talk, but pre-
cious little action, to further the goal of
developing international la W to the point
where it could make a lasting contribu-
tion to world peace. We have before us
an amendment which, while making no
pretentions toward a major advance in
international law, would provide a prac-
tical, workable means within its small
area of ironing out differences in judi-
cial procedure, differences which now
hamper and delay the operation of jus-
tice.
The cost is small, the work to be done
is important, and I urge the Senate to
adopt this amendment and thus keep
alive one of the little known but none-,
theless important agencies of our Gov-
ernment which is working to bring about.
a greater degree of international un-
derstanding.
Mr.. JOHNSON of Texas. Mr. Presi-
dent, I understand that the chairman of
the committee is agreeable to accepting
the amendment. Is that correct?
Mr. HAYDEN. .That is correct. We
will take it to conference.
The PRESIDING 01.`11etat. The
question is on agreeing to the amend-
ment offered, by the Senator from Con-
necticut [Mr. Donal.
The amendment was agreed to.
Mr. BARTLETT. Mr. President, mind-
ful of the fact that the Senate has been
engaged in a week of arduous labor here
in the Chamber, I Shall be brief in my
remarks about the mutual security ap-
propriation bill that is before us.
Some of my colleagues here may re-
call my opposition to the mutual secu-
rity authorizations bill which was passed
by the Senate earlier in the session. The
basis for that opposition was explained
by me in remarks here. I expressed the
fear that our economic assistance to un-
derdeveloped areas is too little to be
truly constructive. I voiced my objec-
tion to the practice of giving.assistance
to foreign nations which create distinc-
tions among American citizens on the
basis of race or religion. And I called
the Senate's attention to the fact that
when the United States strengthens dic-
tatorial regimes by economic assistance
the image of the United States as the
champion of free government becomes
blurred and we expose ourselves to ac-
cusations of economic imperialism. With
many other Senators, I protested the lack
of congressional controls over spending
abroad.
Mr. President, I doubt whether many
Americans realize that the Congress
does not exercise control over money
spent in other countries on a project-by-
project basis, nor even on a country-
by-country basis. In fact, Congress is
denied information which intelligent
congressional supervision would require.
Mr, President, I believe that the mem-
bers of the Appropriations Committee
are to be commended for their efforts,
and the results they have obtained in the
face of great difficulties. The adminis-
tration has told the American people, in
effect, that Congress is spendthrift when
it seeks to create an environment in
which the minimal needs of the Amer-
ican people can be met, in which the
free American economy can grow, and
in which our race with totalitarian so-
cieties can be won. To the extent that
we in Congress have sought to lead the
Federal Government along a less timid
path to develop the well-being of the
American people, we have been chas-
tised as "spenders." To the extent that
we in Congress have sought reasonable
controls and fuller details with respect
to expenditures abroad, we have been
chastised as provincial or unstatesman-
like. I know that many of my colleagues
share my bewilderment at the adminis-
tration's fetish against projects at home,
on the one hand, and its attitude that
scrutiny of projects abroad subverts
America's leadership, on the other hand.
In view, of this bewildering attitude
about expenditures, I think Congress is
to be commended for adhering to a pol-
icy of bipartisan support for the Presi-
dent hi' the foreign policy field and for
appraising foreign policy programs on
their merits.
Mr. President, let me make it clear
that I do not oppose economic assistance
to democratic, underdeveloped, nations.
As I have said previously, my concern
is that the amounts appropriated for
this 'purpose may be inadequate. We
need a bolder attack on the conditions
that breed communism, and we need a
fuller commitment to victory in the bat-
tle for men's minds. ram pleading both
for a bolder program of aid in the un-
derdeveloped areas?preferably on a
loan basis?coupled with more sensible
fiscal control and greater supervision of
assistance programs by the Congress.
Mr. President, it follows that I am de-
lighted to find section 103 in the bill
before us. This provision modifies one
_ adopted on the floor of the House of
Representatives, which mould have pro-
hibited the use of funds appropriated
for defense support, the Development
Loan Fund, special assistance or the
contingency fund for financing nonmili-
tary projects or programs not meeting
the feasibility criteria or standards
which apply to domestic flood control,
reclamation and other related programs.
I would have supported the House ver-
sion of section 103, but I regard the
language reported by our Senate com-
mittee, which requires that the use of
appropriated funds in these categories
on any new project abroad be preceded
by "a detailed evaluation which pro-
vides reasonable assurance" that bene-
fits will be at least equal to costs, as an
improvement over prior mutual security
legislation. But I do not agree that U.S.
taxpayers' dollars should be spent on
public works projects abroad with less
exacting standards than those applied
here. Indeed, Mr., President, here too
frequently we hear the "pork barrel"
charge when the benefit-cost ratio is
high. I have never heard this criticism
applied to public works undertakings
which we pay for around the globe.
I am gratified, too, to note the inclu-
sion of section 112 by the Senate Appro-
priations. Committee, to require fuller
?
Sept.ember, 12
reporting on expenditures under the
mutual security program by the Presi-
dent to the Appropriations Committees
of Congress. Once again, Mr. President,
I would have favored a much stronger
reporting provision?perhaps like that
adopted by the other body. Section 112,
however, reflects a growing awareness
not only of our right to know, but of
our need to know about the conduct of
this program.
Mr. President, section 115, included in
the pending measure, expresses the sense
of the Congress that the attempt of
foreign nations to create distinctions
among American citizens on the basis of
race or religion is repugnant to Ameri-
can principles. It seems to me this is
the least we can do in stating the fun-
damental, traditional American position.
The Senate committee which incorpo-
rated the language, and the distin-
guished senior Senator from Oregon
and the distinguished senior Senator
from New York, who led the struggle for
inclusion of this expression of congres-
sional attitude, are to be commended.
There is talk, Mr. President, that the
administration is fearful that the ap-
propriations in this act will prove to be
inadequate. I share a similar concern,
with respect to economic aid. But in
that case, it would be the duty of the
administration to come again to Con-
gress with an explanation of the foreign
developments that require greater ex-
penditures. I cannot assume that the
administration would fail to perform
this duty, if the need should arise.
Moreover, I believe that the contro-
versy over mutual security appropria-
tions provides a clear lesson for this
President and his successors: That les-
son is that reckless charges against
needed domestic projects and prophe-
cies of economic doom and gloom may
provide effective rhetoric for the oppo-
nents of liberalism, but they do not pro-
mote an atmosphere in which the
American people can respond uncriti-
cally and with full sympathy to re-
quests for vast expenditures abroad.
Mr. President, recent events in India
emphasize another problem which I dis-
cussed in my remarks about the authori-
zations act earlier this session. At that
time, I said the resources of the 'United
States might be used most effectively if
concentrated in assistance to those un-
derdeveloped, free countries which are
engaged in dramatic races with Com-
munist neighbors. Obviously, the best
example of such a country is India. In
this summer, and most especially in
recent weeks, we have seen .the violation
of India's borders by forces from Com-
munist China. We have read reports of
riots instigated against the Nehru gov-
ernment by the Communist Party in
Calcutta. These riots are probably
meant as retaliation for the dissolution,
under constitutional procedures, of the
Communist regime in the State of
Kerala.
According to information contained in
the hearings published by the House Ap-
propriations Subcommittee on Mutual
Security, 25 percent of the Development
Loan Fund allocations abroad?up to
June 12, 1959?were spent for projects
in India.
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1959 CONGRESSIONAL RECORD? SENATE
In part because of the fact that failure
to appropriate on a country-by-country
basis makes difficult the mechanics by
which Congress might express support
for a particular country, I shall not seek
to amend the act before us to require
that in the future, as in the past, at least
25 percent of Development Loan Fund
allocations be spent in India. Perhaps
the percentage should be much, much
higher. I am convinced that the raw
total figures should be higher. Perhaps,
too, the application of benefit-cost ratio
standards, pursuant to the new section-
103 of the act, would affect the percent-
age of allocation for India in the im-
mediate future. But within the limita-
tions of sound feasibility requirements,
Mr. President, I would hope that the
Development 'Loan Fund will maintain
its interest in India and will do all that
it can to support economic progress in
that country, which is so beset by the
problems of a rapidly growing popula-
tion, and which is symbolic of the efforts
of underdeveloped free nations to exceed
the economic growth, of underdeveloped
totalitarian nations.
In conclusion, Mr. President, I express
the hope that the administration will
couple future requests for mutual secu-
rity appropriations with a greater will-
ingness to keep Congress informed of ex-
penditures abroad and to allow greater
supervision of these expenditures by
Congress.
I ask unanimous consent that a book
review by the noted scholar, Miss Bar-
bara Ward, which appeared-in the New
York Times and which reports on a new
book entitled "East and West in India's
Development," be printed in the RECORD
following these remarks.
There being no objection, the article
was ordered to be printed in the RECORD,
as follows:
REVIEW Or BOOK ENTITLED "EAST AND WEST IN
IND/A'S DEVELOPMENT"
(By Barbara Ward)
In the next decades the future of Asia will
probably be decided not by tanks and bombs
but by the battle of production statistics
waged between India and China. At present,
as a result of forced saving and Draconian
discipline, China's economic growth may be
as much as three times as rapid as India's.
This projection, carried forward 20 years or
so, could tip the scales against India's demo-
cratic experiment._ The ruthless political
methods of China are not in themselves at-
tractive?particularly on the morrow of
Tibet. But its ability to provide food and,
work will weigh more and more heavily in
the scales if India meanwhile cannot fully
meet these inescapable needs.
Those who wish to study this fateful duel
in greater detail cannot do better than read
Wilfred Malenbaum's short study "East and
West in India's Development." The author,
visiting professor of economics at Massachu-
setts Institute of Technonogy, looks dispas-
sionately at the reasons for the short-fall in
India's achievements under the second 5-
year plan and finds them where, under any
noncompulsive system of government, one
would expect them to lie. India's per capita
income is not much above $60. To urge peo-
ple to save?in other words not consume?
under these conditions of minimal income is
the hardest task facing a democratic gov-
ernment and it is precisely by forced saving,
especially in the agricultural sector, that
totalitarian China has been able to forge
ahead.
In India, the mobilization of domestic
savings, particularly rural savings, has fallen
behind the planned figures. The Indian
Government may have aggravated the effect
of the short-fall by too optimistic an orig-
inal estimate of the likely capital output
ratio and?recently?by too great an effort to
divert the national trend of savings from the
private sector (where 90 percent of India's
economic activity is carried on) to public
investment.
Moreover, excessive emphasis in the future
on large capital-intensive works in the pub-
lic industrial sector might accentuate this
difficulty, draining effort and resources from
? rural renewal and smaller labor-intensive
activities. Yet the fundamental difficulty
is India's appalling poverty and the ob-
stacles thatlie, under any voluntary system,
in the way of securing sufficient savings
from a population below the borderline of
adequate consumption.
This is the crucial setting to the problem
of foreign assistance. Russian aid is sizable
and, inevitably, designed to encourage the
growth of the public sector. Western as-
sistance has been much larger but has
tended to be geared to crises rather than
to a steady, long-term look at India's de-
velopment as a whole. Yet its scale and
continuity will be absolutely decisive in the
next planning period. If Western partici-
pation is at a lower and more uncertain
level than in the last 8 years, all the trends
making for exaggeration in the public sec-
tor and neglect of healthy, resilient forces
In the private economy would be intensified.
Moreover, it is doubtful whether India could
maintain even the minimum rate of ad-
vance needed to keep pace with rising pop-
ulation and an expanding working force.
It is essential" thatpublic opinion in the
West should fully grasp the scale of India's
difficulties?and opportunities?and .the de-
cisive influence they will exercise on the sur-
vival of the "open society" in emergent
lands. Mr. Malenbaum's packed, factual and
authoritative study is the best, rapid sum-
mary available of India's problems today,
and no one interested in the great duel in
Asia can afford to leave it unread.
?
Mr. HUMPHREY. Mr. President, I
have a very minor amendment which I
have discussed with the distinguished
chairman of the committee, Mr. HAYDEN.
It is designated "9-10-59-F." I send it
to the desk, and ask that it be stated.
The PRESIDING OFFICER. The
amendment offered by the Senator from
Minnesota *ill be stated.
The CHIEF CLERK. On page 8, begin-
ning with line 9, it is proposed to strike
out all through line 11, and redesignate
the succeeding sections of title I accord-
ingly.
Mr. HUMPHREY. Mr. President, this
amendment does not involve new money,
but merely applies to the use of funds
under the act, and removes some prohi-
bitions, in connection with their use. I
would appreciate the comment of the
chairman of the committee.
Mr. HAYDEN. Mr: President, I shall
be glad to take the amendment to con-
ference.
Mr. HUMPHREY. Mr. President, I
ask unanimous consent to have printed
in the RECORD a statement I have pre-
pared regarding the amendment.
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
STATEMENT BY SENATOR HUMPHREY
The purpose of my amendment is to strike
from the pending bill, H.R. 8385, providing
17795
funds for the mutual security program for
1960, section 110 on page 8, beginning on
line 9, which had originally been inserted in
the House Appropriations Committee. This
provision in the bill reads as follows:
"SEC. 110. None of the funds herein ap-
propriated shall be used to carry out the
provisions of section 501(b) of the Mutual
Security Act of 1959."
The unfortunate effect of section 110 is to
prohibit the use from the President's con-
tingency fund of any money which might
carry out section 501(b) 'of the mutual se-
curity authorization law, Public Law 108,
86th Congress.
What would section 501(b) provide?
Section 501(b) authorizes the President, if
he so determines, to utilize up to $2 million
for, the specific purpose of authorizing _re-
search, field trials and demonstrations look-
ing toward the possible mass eradication of
selected diseases.
SECTION 110 SHOULD HAVE BEEN TREATED
EXACTLY AS COMMITTEE TREATED 111
The Senate Appropriations Committee had
its own ample precedent for eliminating the
restrictive House provision:
I point out that on page 9 of Senate Re-
port 981, the Senate Appropriations Commit-
tee rightly indicated that it removed the
"freeze" which the House Appropriations
Committee had unfortunately adopted
against the use of any funds under the very
next item?section 111?for the Eaet-West
Cultural Center in Hawaii.
I congratulate the Senate Appropriations
Committee for removing the House's un-
sound restriction in the House's version of
section 111.
The House committee had previously
justified its overall restrictions on the
ground that the subjects prohibited both in
section 110 and section 111 represented new
'programs.
It is a fact that section 111 is a "new" pro-
gram, but it also happens to be a wonder,-
fully imaginative, immensely promising pro-
gram?for an East-West Hawaiian Cultural
Center.
By contrast, section 110?which the Sen-
ate committee regrettably retained?freezes
something which is not "new," namely a
program looking toward the mass eradica-
tion of disease. This is a program on which
the United States has been engaged at least
In limited form for a period of years.
With all due respect to the distinguished
members of the Senate Committee on Ap-
propriations who labored with customary
diligence and conscientiousness on this bill,
I submit that their present version per-
petuates an equity. It freezes a mere' ex-
tension of an old program, while unfreezing
a completely "new" program.
It seems to me that bah these programs,
while unrelated, should be treated in the
same fair manner; namely, no prohibitios
on funds.
That is why I urge that we now eliminate
the House restriction by adopting my
amendment. Unless we do so, the President
cannot use any funds for this purpose.
GIVE THE PRESIDENT DISCRETIONARY POWER
The actual question of policy before the
Senate is this: Are we to tell the people of
the world that the Congress does not feel
that the President should have the discre-
tion to use even a nickel of money which
might be used for field trials to test the
eradication of disease?
Are we to tell the iieople of the world that
while they are suffering from perhaps a
dozen major regional and universal killing
and crippling 'diseases, that the United States
is not interested in. financing a nickel more
of field trials which might once and for all
help exterminate at least one or more of
these killers and cripplers?
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17796 CONGRESSIONAL RECORD ? SENATE
WHAT IS REAL ECONOMY?
What I am saying is this: It is far cheaper
to eliminate a disease by testing new
methods against it, and then applying proven
methods, than it is to tolerate a disease in-
definitely. To reject this amendment would
be false economy.
The proof of this is in the present anti-
malaria program. Malaria has cost the
world?indirectly?tens of billions of dollars
since World War II alone, in terms of lost
purchasing power, etc. -Yet, for the most
minute fraction of that sum, we are on our
way toward wiping out malaria completely.
But what about certain other dissaeses.
like sleeping sickness, cholera, etc. Do we
propose to ignore the possible prevention
and cure of these diseases which might con-
tinue to exist indefinitely?
TROPICAL DISEASES STRIKE 'U.S. TROOPS
Let me point out that I am talking not
simply of diseases affecting foreigners, I am
talking about diseases which can rage and
have raged in epidemic form among Amer-
ican servicemen 'who are stationed, for ex-
ample, in the Far East in the scores of thou-
sands. They are just a jet plane hop away,
in this contracted world.
I am talking about diseases which have
raged in Laos, for example.
Who is now to say whether United Na-
tion's forces may soon be needed in Laos or
In some other country which may be en-
dangered by Communist aggression? If
United Nations troops are needed there, I
can almost guarantee that we will be beg-
ging medical science to find the answers
against certain diseases there.
TIME IS PRECIOUS
So, the question is, "Do we or do we not
propose to use time, our greatest asset in
this fight?and take the necessary steps
now." Time is crucial. Setting up field
trials can take years and years.
Let me point out that if the Senate fails
to eliminate the House restriction, not a
single nickel of American official funds for
this type of field purpose will be available
for research in the 1960 fiscal year.
NO OTHER FUNDS IN MUTUAL SECURITY
APPROPRIATION BILL AUTHORIZE TRIALS
There is no point to the administration,
or anyone else attempting to justify the
House's restriction by asserting that "we
provide tens of millions of dollars for other
health purposes in this bill."
That is true. Unfortunately, it does not
tell the whole story. Every nickel for health
provided elsewhere in this bill is needed.
But not a nickel provided elsewhere in this
bill will be used for this particular purpose
unless we in the Senate and the distin-
guished members of the conference commit-
tee eliminate the regrettable House restric-
tion.
The choice is ours: (a) Delay and regret;
or (b) a "green light" to the President to
move ahead if he so determines.
I reiterate?the President should have the
discretionary right to use this money?$1,
$10, or $2 million?if his advisers so recom-
mend.
? _ Who are these advisers? They are the top
Specialists of the National Institutes of
Health, the Pan American Health Organiza-
tion, the World Health Organization, and
others.
They are men who may decide that $100,-
000, say, could well be used to test a new
oral vaccine?a 1 cent pill?or a liquid which
might possibly prevent some mass disease.
They are men whom we can trust and the
President can trust.
PRIVATE ENTERPRISE, I.E., DRUG COMPANIES
WOULD GET "GREEN LIGHT"
Let me point out that section 501(b) rep-
resents an approach 100 percent consistent
with the American free enterprise system.
No single ally is more important to the con-
cept of the amendment than America's pri-
vate pharmaceutical industry. It is this in-
dustry which will do as much or more than
any single force in the world to achieve the
concepts implicit in the amendment.
For it is the American pharmaceutical in-
dustry which is best qualified to develop
mass therapy drugs, for example, which
might be taken by tens of millions of peo-
ple, as a means of rapidly avoiding or curb-
ing or eliminating some infectious type of
malady.
DIFFERENCES AS COMPARED WITH OTHER
RESEARCH
Let me further point out that the type of
field work contemplated under this amend-
ment can and should be differentiated from
the laboratory and other work contemplated
under other research legislation. '
Section 501(b) contemplates mass studies
in the field; e.g., among tens of thousands
of individuals in specific regions through-
out the globe, particularly tropical and ad-
jacent areas.
To carry out section 501(b) will require the
closest possible cooperation with foreign.
governments, a matter for State Department
and ICA attention. Obviously, a field trial
cannot take place unless, too, it is, by and
large, administered by foreign nationals, e.g.,
technicians of other governments, and unless
policy decisions have first been reached in
the highest quarters to cooperate with us.
The fact that a research program will be
largely administered by foreigners actually
will represent a saving for us. Expenses can
thereby be borne partially by the foreign
government; our share of the expenses should
be a reasonable proportion. ?
CONCLUSION
Field trials are crucial. Field trials alone
can test the efficiency of a new drug. Yet if
this amendment is defeated, the "freeze"?
the prohibition?will remain on. And what
will that mean?
It will mean that the Senate will have told
the House: "Yes, it is perfectly alright for
you of the House of Representatives to for-
bid the Senate to grant the President this
discretionary power."
This to me would represent poor policy?
poor policy for the Senate, poor policy for
the Congress, poor policy for the United
States, poor policy for the world.
The PRESIDING OFFICER. The
question is on agreement to the amend- -
ment offered by the Senator from Min-
nesota.
The amendment was -agreed to.
Mr. HUMPHREY. Mr. President, I
have a second amendment which I offer.
It is No. 9-10-59--G.
The PRESIDING OFFICER. The
clerk will state the amendment.
- The LEGISLATIVE CLERK. On page 5,
between lines 10 and 11, it is proposed
to insert the following:
Special foreign policy studies: For expen-
ses of the Department of State in procur-
ing, by contract or otherwise, of special for-
eign policy studies relating to disarmament,
weapons control, and possible technical
means for enforcing arms control under a re-
duction of armaments agreement, $400,-
000.
? The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment.
Mr. HUMPHREY. Mr. President, the
amount of the amendment is in the sum
of $400,000, and the amendment is self-
explanatory. It. was requested by the
Department of State as a sum of money
which could be used tq implement spe-
September 12
cial studies in the field of weapons con-
trol, particularly as it applies to the
technical aspects of the enforcement of
any arms control measure which may be
agreed upon.
I believe this amendment is a very
important one at this time in light of
the recent decision of our Government
to reenter the discussions on the subject
of disarmament. As my colleagues know
a 10-nation commission has just been
established at the insistence ? of the
United States.
It appears to me that if we are going
to negotiate at the political level on a
subject as delicate and as important to
our national security as disarmament,
we surely should have the technical
studies that go along with it. ?
This amendment has been up before,
Mr. President. I regret that the com-
mittee has not seen fit to accept it, and
I am hopeful that the Senate will now
find it possible to accept the amend-
ment.
I filed -a statement on the Mutual Se-
curity Act with the Committee on Ap-
propriations. 'Therefore, I shall not bur-
den the RECORD with the details of the
statement except by reference.
Mr. HAYDEN. The House refused to
accept the amendment in the supple-
mental bill. We had it under considera-
tion twice. The Senate refused to ac-
cept it. Then we had it under consid-
eration in the committee. So it has been
twice rejected by the committee, and
once by the House of Representatives.
There is no possibility of its being
adopted.
Mr. HUMPHREY. I appreciate the
very candid statement of the Senator
from Arizona. I recognize the obstacles
which I face in this matter.
I still believe with a deep sense of
conviction that I am right. I regret I
am not sufficiently persuasive to con-
vince a man for whom I hold a great
deal of admiration, the distinguished
chairman of the committee, and his fel-
low members on the committee.
I ask unanimous consent to have
printed in the RECORD at this point a
letter supporting the amendment, which
I have received from the Department of
State under date of July 29, 1959. I
have reduced the amount mentioned in
the letter to $400,000.
There being no objection, the letter
was ordered to be printed in the RECORD,
as follows:
DEPARTMENT OP STATE,
Washington, D.C., July 29, 1959.
The Honorable HUBERT II. HUMPHREY,
U.S. Senate.
DEAR SENATOR HUMPHREY: This letter con-
tains the information on special foreign
policy studies requested in your letter of
July 15, 1959, acknowledged by telephone
on July 21.
In regard to funds for disarmament
studies in fiscal year 1959, the Department
included $70,000 in a suplemental appro-
priation estimate of $854,000 (H.R. 13450).
House Report No. 2221 allowed $450,000 for
the three activities included in the Depart-
ment's estimate. Senate Report No. 2360
allowed $650,000 and stated:
"Specifically the sum allowed will help
finance the expanded science program of
the Department, provide the funds neces-
sary for the disarmament activities recently
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1959' CONGRESSIONAL RECORD?SENATE
transferred to the Department, and cover
the additional costs estimated for expenses
of tour directors and interpreters escorting
U.S.S.R. delegaticns of specialists expected
to visit the United States under the East-
West exchange program in the fiscal year
1959."
Out of the resulting appropriation of
$550,000 (Public Law 85-766) the Department
set aside $70,000 for a contract for disarma-
ment study. This amount remained in re-
serve until the end of May 1959. By then
House Report No. 376 of May 21, 1959, had
disallowed the Department's request for
funds for the purpose in fiscal year 1960.
In view of this House action, later confirmed
by the Senate (Rept. No. 424) , he Depart-
inent deemed it inadvisable to proceed with
contract negotiations *then in progress.
With no limitation in the appropriation lan-
guage or in the committee reports, the De-
partment then (May 1959) reprogramed the
$70,000 for other necessary purposes.
With respect to a breakdown of our needs
in fiscal year 1960, as I indicated in my let-
ter to you of June 2 of this year one of our
principal needs is to have sufficient financial
resources to enable us to obtain expert eval-
uations that may be required as a result
both of our continuing review of disarma-
ment policy and of developments that may
occur during or in preparation for inter-
national negotiations. A similar require-
ment exists with respect to the impact of
technological developments on our disarma-
ment policy. In the absence of such evi-
dence, it is not possible to determine in
advance the priorities that should be as-
signed to certain types Of studies or to deter-
mine the allocation of funds.
Because the Department of State has not
had financial resources for technical-scien-
tific studies, we have not developed definite
programs concerning specific study projects,
their priorities, and'the most effective way of
organizing them. When it is determined
that we will have funds in a specific
amount, we plan, with the advice of experts
in the field, to make a final assessment of the
areas in which scientific-technical facts and
analysis are most critical. In the light of
the then-existing policy review and negotia-
tion requirements, we would determine the
actual programs to be undertaken. We have,
of course, already identified the range of
studies which would be useful: but we be-
lieve it would be most productive to follow
the above procedure in selecting those to
which funds would be initially allocated.
Illustrative of the studies we presently have
need for are the following:
1. Further study of improved inspection:
techniques in connection with an agreement
on cessation of nuclear weapons tests.
2. Inspection systems and arms control
arranagements for protection against sur-
prise attack.
3. Inspection systems and arms control
arrangements that would guard against the
likelihood of accidental war or a miscalcu-
lated "preemptive" war.
4. The capability of newly developed sci-
entrfic instrumentation to assist in the veri-
fication of arms agreements and continued
study of areas where improved instrumenta-
tion might assist.
5. Evaluation of inspection systems for po-
licing an agreement that all production of
fissionable material be used exclusively for
peaceful purposes.
6. Further study of the possibilities of de-
veloping scientific inspection capabilities
that might make it possible to detect the
Presence of nuclear weapons.
7. Study, of required arrangements for
authentication of messag6s furnished by in-
spection systems.
, 8. Study of communication and data-
processing systems.
9. Study of the applicability to inspection
systems of random-eampling techniques.
10. Study of inspection capabilities to ver-
ify the disposition of ballistic missiles.
11. Study of problems involved in possible
regional arms control arrangements.
If I can be of any further assistance, please
do not hesitate to call upon me.
Sincerely yours,
WILLIAM B. MACOMBER, Jr.,
Assistant Secretary.
The PRESIDING 01,1010ER. The
question is on agreeing to the amend-
ment offered by the Senator from Min-
nesota [Mr. HUMPHREY].
The amendment was rejected.
The PRESIDING OFFICER. The bill
is open to further amendment.
Mr. SPARKMAN. Mr. President, I in-
vite the attention of the chairman of the
committee to a matter which I discussed
with hiin briefly, the offering of an
amendment on page 21 of the bill, line 5,
to strike out the sum $1 million and in-
sert the sum $3,100,000. It has to do with
urban planning for the smaller cities
and towns under section 701 of the bill.
The junior Senator from Virginia [Mr.
-ROBERTSON] is. at a meeting at the pres-
ent time, and I have not had an oppor-
tunity to talk with him.
I wish very much that the chairman
would consent to take this to conference.
Mr. HAYDEN. The Senator from Vir-
ginia [Mr. ROBERTSON] is familiar with
the matter, and there will be time when
the Senator from Alabama can consult
with him. I would not want to accept
the proposal at this moment or even con-
sider it without giving my subcommittee
chairman an opportunity to be heard.
Mr. SPARKMAN. Of course, I had
talked with the chairman and told him
I would discuss the matter further with
the Senator from Virginia [Mr. ROBERT-
SON], who is a member of the Appro-
priations Committee but due to the fact
that he is detained for- the present, I
thought perhaps we could dispose of
the matter.
It is true that the amount given in
the bill should carry the agency until
the first of the year. I do not want to
push this matter unduly, and I would
be perfectly willing to let it rest with the
feeling that, if there is a greater need,
when the first supplemental comes up at
the beginning of the year it may be
considered.
Mr. HAYDEN. I assure the Senator
that at the time of the consideration of
the supplemental appropriations we will
consider it.
Mr. SPARKMAN. This is about the
only chance the smaller cities and towns
will have. This relates only to towns
of 50,000 and less in population. It is
about the only chance they have of get-
ting into the urban renewal program,
and if the fund runs out, over which
there was no controversy between the
legislative and the executive, then these
smaller places which are not able to
maintain full time planning experts, and
so forth, are simply left in the lurch.
It is important to them.
Mr. HAYDEN. There is quite a sub-
stantial sum under that item in this bill.
Mr. SPARKMAN. There was $975,000
left over from the other fund.
Mr. HAYDEN. Yes. ?
Mr. SPARKMAN. And $1 million
taken out of the new fund. That makes
17797
a total of $1,975,000. I believe the
agency suggested that they would need
close to $4 million, but, as I have said,
it is perfectly agreeable to me if we can
have that understanding.
Mr. HAYDEN. I can assure the Sen-
ator that when we hold hearings on the
supplemental appropriations next spring,
if the facts justify it, we shall be happy
to consider it.
Mr. SPARKMAN. The chairman says'
next spring. I wonder how early.
Usually a supplemental bill is acted on
pretty soon after the new session begins.
Mr. HAYDEN. Next spring. Ordi-
narily we have some urgent matter
which comes up in January. I would
say about the month of March.
Mr. SPARKMAN. But consideration
will be given whenever the need arises?
Mr. HAYDEN. Probably about the
month of March.
Mr. SPARKMAN. I thank the chair-
man.
Mr. ELLENDER. Mr. President, one
of the most arduous peacetime sessions
of Congress is now in its closing hours.
We have all worked especially long and
hard during the -past few weeks in an
effort to complete our work.
Thus, Mr. President, I am acutely
aware of the fact that Senators are tired
and are eager to close out this session of
Congress. However, I must ask the for-
bearance of my colleagues. To my
Mind, we would be remiss in our duty if
we simply approved the pending bill,
calling for appropriations to the mutual
security program, merely . because we
want to go home.
Mr. President, the pending measure
poses a real threat to the economic sta-
bility of our Government, and it is now
up to the Senate to act in order to re-
duce, if not eliminate, this threat.
Title I of this bill would make avail-
able to our foreign aid program a total
of $3,281,813,000 for this fiscal year.
May I point out to Senators that
should this body approve this additional
appropriation, the total amount of money
made available for foreign aid since the
end of World War II will reach an
amount in excess of $83 billion.
I also would like to point out that dur-
ing this same period of time, the U.S.
Government spent only $11 billion on our
much maligned public works programs.
In other words, we have spent more
than seven times as much on improving
foreign countries as we have to conserve
and preserve our own precious resources
of soil and water.
In this connection, I recall that the
distinguished minority leader made the
statement earlier this week that the Sen-
ate should uphold the President's veto of
the second public works bill on the
grounds that it was in the economic in-
terest of our country to do so.
The minority leader said:
There were 46 million youngsters who'en-
? tered the schools of America this month.
They will be the trustees of this country in
the future. They are the future custodians.
If we mess up the fiscal picture now, what
will happen to them? They will have to pay
the bill for our mistakes, for our sins of
omission and commission.
' The distinguished minority leader
[Mr. DIRKS'EN] made the statement in
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17798 CONGRESSIONAL RECORD ? SENATE
connection with his objection to spend-
ing some $800 million in future years for
public works in our own country.
Yet the pending bill contains more
than four times that amount of spend-
ing in foreign countries for this year
alone.
Mr. President, I too am gravely con-
cerned over the condition in which we
will;hand over our country to our grand-
children. I also wonder about the ever-
increasing debt load we are bequeathing
to the young people of our great country.
In my opinion, the continuation of this
wasteful program, which is concerned
only with the flinging of American dol-
lars to all corners of the globe, with little
or no consideration being given to the
impact of this spending on our own do-
mestic economy, is of far greater danger
to this country than a modest, well
planned, and long-range program of
public works.
For one thing, we can see at the very
minimum a dollar's worth of accomplish-
ment for every dollar spent on domestic
programs. I will not attempt to com-
pute the minute particle, if any, of the
value we obtain for every dollar we pour
into the foreign aid rathole.
Mr. President, this foreign aid pro-
gram has become a devouring monster,
seeking to suck the very lifeblood out of
our economy. I recall the story of the
man who adopted a young lion cub. As
the cub grew into young lionhood, the
man's friends warned him that the
animal might become dangerous. He
scoffed at these stories, saying that he
knew the lion recognized him as a friend
and would not attack him. But one
night the man accidentally cut himself.
The lion got one taste of the blood, and
unhappily that was the end of the man
who forsook the advice of his friends.
In my judgment, our foreign aid pro-
gram, which commenced its existence as
a lion cub, is now a full-grown lion and
is now ready to devour its master.
When this program was begun at the
end of World War II, it was estimated
that it would eost about $15 billion to
restore the war-ravaged economies of
the countries of Western Europe.
This goal was attained by 1953, at
which time the economies of the coun-
tries of Western Europe had reached
unprecedented heights. Yet we have
continued to pour billions of taxpayer
dollars into these countries since that
year and are continuing to do so in the
pending bill.
Mr. President, I supported the original
Marshall plan and continued to support
the program as long as its objectives had
not been reached. For this I have no
apologies.-
However, as soon as the countries of
Western Europe were restored to eco-
nomic health, and the foreign aid pro-
gram had reached the goals for which it
was created, I ceased to support it.
Instead, for, the past 7 years I have
advocated a gradual tapering off of this
program. In my judgment, the program
will never end until we begin to slow it
down.
The nations of Western Europe will
continue to take our money as long as
we offer it to them. They will continue
to lean on our shoulders.
That is why, Mr. President, I have
fought for gradual reductions in the
program. Although I have been success-
ful on occasion in securing some reduc-
tions in the foreign aid appropriations, '
I have never been able to reach my ulti-
mate objective, namely, a gradual de-
crease in expenditures for this wasteful
giveaway, because any time reductions
have been made, the subsequent year's
budget estimate has been inflated to
to cover the cuts of the previous year.
This year, despite the way our na-
tional debt has grown, the President saw
fit to increase his request for foreign aid
26 percent over and above the amount
for last year.
Even in this day and time, when my
predictions that a continuation of this
program would weaken our economy are
unhappily coming true, I have been un-
able to get the Committee on Appropri-
ations to cut one thin dime below the
amount appropriated by the House for
fiscal year 1960, which, by the way, is
$95.3 million less than the amount in the
pending Senate Appropriations Com-
mittee bill.
? Mr. President, I fear that the time has
come for drastic action. We can no
longer afford to gamble with our coun-
try's economic security. Certainly Con-
gress has not hesitated this year to pro-
vide adequately for our military security,
but this will go for naught unless we
maintain a sound economy.
I ask Senators to consider these un-
varnished facts, which, I feel, show the
precarious position in which our econ-
omy finds itself, mostly because of this
senseless giveaway program:
During calendar year 1958, the United
States lost the record amount of $2.3
billion of its gold reserves.
During this same period, the dollar
balances and gold reserves of the other
countries of the free world increased by
$4.2 billion.
For the first time since the War Be-
tween the States, the United States had
a deficit balance of payments in 1958,
totaling $3.3 billion, even though it had
a favorable balance of trade of approxi-
mately $1.7 billion. What is more, for
calendar year 1959 it is estimated that
the United States will again have a defi-
cit balance of payments in the neigh-
borhood of $5 billion.
Our national debt today stands close
to $290 billion, which is approximately
$55 billion more than the national debts
of all the other countries of the world,
including Soviet Russia.
The value of the U.S. dollar has been
steadily declining and is now at the
point where it is worth about 48 cents
in terms of 1939 dollars. In addition,
there is increasing speculation that the
United States may eventually be forced
to devalue the dollar?something which
has never been done in our glorious
history.
Foreign countries have invested about
$6.2 billion in New York in short-term
Government securities. This has the ef-
fect of having the Federal Government
borrow money on the open markets from
foreign countries at high interest rates,
and then lend that same money back to
foreign governments at low interest
September 12
rates?if indeed the money is not given
to these countries as an outright grant.
Mr. President, I have before me an
article published in the New York Times
of Sunday, September 6, 1959, dealing
with the economic dangers which face
our country. The article states, in part:
As financial officials see the situation it
will do no good to anyone if there is a
larger outflow of (foreign) aid dollars, but
the dollar becomes of dubious value. This
could happen, it is believed, if U.S. pay-
ments deficits continue on a large scale for
many more years.
Such a deficit Means that foreign coun-
tries as a whole obtain more dollars tha-n
they spend to buy American goods. They
can take the difference in gold or can keep
it in dollars and invest them in the finan-
cial markets in New York.
These invested dollars are potential
claims against gold. Already they total $15,-
651,000,000 not far below our gold -reserves
which have dwindled to $19,524,000,000.
As the claims grow and the gold stock
declines, U.S. short-term liabilities might
eventually exceed assets.
Mr. President, I ask unanimous con-
sent to have the entire article printed at
this point in the RECORD.
There being no objection, the arti-
cle was ordered to be printed in the
RECORD, as follows:
BIG TRADE DEFICIT IS SPARKING MOVE TO CUT
AID FUNDS?UNITED STATES WORRIED BY
DECREASE IN GOLD STOCKPILE AND RISE IN
FOREIGN ASSETS HERE
(By Edwin L. Dale, Jr.)
WASHINGTON, September 5.?The big defi-
cit in the U.S. balance of international pay-
ments, with its resulting outflow of gold and
buildup of foreign assets in New York, has
begun to have a major impact on adminis-
tration thinking about foreign aid.
Powerful voices, centering in financial
agencies, have begun to argue that the flow
of Government capital abroad in the form
of aid is too large for the continued strength
of the dollar.
The underlying belief in top administra-
tion financial circles is that there is an en-
tirely new situation in the world economy,
with European currencies gaining strength
while the dollar is showing the first faint
signs of vulnerability.
EMOTIONS IN CONFLICT-
The immediate results of this , view came
In President Bisenhower's trip to Europe,
during which he urged that European na-
tions undertake a far greater share of the
burden of helping underdeveloped coun-
tries.
In a sense, the administration is torn be-
tween two powerful emotions. One stems
from acceptance of the basic idea that the
underdeveloped countries must be helped
in the interest of the United States as well
as for the good of those nations that get aid.
The other is a growing fear for the future
stability of the dollar unless two related
things happen: Domestic finances are con-
trolled and the balance of international
transactions is righted. The U.S. deficit in
international transactions was, $3,400 mil-
lion last year and will probably be even larger
this year.
FUTURE SEEMS GLOOMY
As financial officials see the situation, it
Will do no good to anyone if there is a larger
outflow of aid dollars but the dollar becomes
of dubious value. This could happen, it is
believed, if U.S. payments deficits continue
on a large scale for many more years.
Such a deficit means that foreign coun-
tries as a whole obtain more dollars than
they spend to buy American goods. They
can take, the difference in gold or can keep
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1959%, CONGRESSIONAL RECORD? SENATE
It in dollars and invest them in the financial
markets in New York. These invested dol-
lars are potential claims against gold. Al-
ready they total $15,651 million, not far be-
low the gold reserve, which has dwindled to.
$19,524 million.
As the claims grow and the gold stock
declines, U.S. short-term liabilities might
eventually exceed assets. Even that would
not necessarily mean a run on? gold or
some other crises. But U.S. officials do
not like to contemplate even the remotest
possibility of such an event.
Besides, some of them, looking ahead, are
unhappy at the thought of potential pressure
on the United States from what, in effect,
would be its foreign creditors. The United
States, which has been exerting the pressure
for years, does not want to be on the re-
ceiving end.
Foreign countries are already substantial
creditors of the U.S. Government. They
have invested about $6,200 million in
New York in short-term Government securi-
ties. Thus, as one high official puts it,
"we're borrowing short from foreigners at
home and lending abroad long."
The recent deterioration in the U.S.
balance of payments has come about
mainly because of a drop in exports and a
rise in imports, not because of an increase in
foreign aid. But as financial officials view.
the situation, foreign aid is the one element
in the total balance over which the Gov-
ernment has considerable control.
It is regarded as certain that the new line
of thought in the administration will be a
major theme in conversations with foreign
finance ministers at the annual meeting here
later this month of the International Mone-
tary Fund and the International Bank for
Reconstruction and Development.
European countries have been running
strong surpluses in their balance of payments
While the United States has been in deficit.
To U.S. officials this means only one
thing: Europe should become a much
bigger exporter of capital and the United
States a smaller one.
NEW VIEW ON 'INVESTMENTS
Officials worried about international pay-
ments deficit are even beginning to take a
less enthusiastic view of investment abroad
by 'American business. Up until very re-
cently, this was wejcomed on every count,
by conservatives and liberals alike.
Now, with the payments deficit uppermost
In many minds, an investment abroad is
frequently seen as a double blow?first an
immediate outflow of dollars, and, second,
a probable setback to American exports.
The export loss occurs when an American
manufacturer, for example, builds a plant
in Europe to share in the common market
rather than try to sell goods made in -the
United States.
This feeling accounts for the Treasury's
Opposition to a bill to provide new tax in-
centives for foreign investment unless its
benefits are limited to investments in un-
derdeveloped countries.
A reflection of the growing concern about
the international payments position of the
United States came in the administration
position on the Development Loan Fund
in the foreign aid bill. The President re-
fused to support a Senate move to put the
fund's financing on a long-term basis, in-
crease its lending authority, and get around
the Appropriations Committees, even though
the President's original position backed all
three ideas.
Another reflection of the new line of
thought, paradoxically, is U.S. support for
the new International Development Associa-
tion, even though this will cost the United
States $330 million. Such a new institution
has several merits in the eyes of an official
worried about the U.S. payments deficit and
the problem of the underdeveloped countries.'
No. ld-20
It puts Europe in the lending picture for
the first time on a formal, multilateral
?scale. ?
Because it will be equipped to make "soft"
loans?loans with easy terms and repayable
in the currency of the borrower?it should
eventually ease the pressure for a larger
and larger Development Loan Fund in the
United States. The loan fund also makes
this type of loan.
Mr. ELLENDER. Mr. President, I
think it is very clear to anyone who will
take the time to seriously consider these
facts that the economic stability of this
Nation is periled by this situation.
On the one hand, our national debt is
growing higher, while, at the same time,
the demand for U.S. bonds is lessening
to the point that Congress has been asked
to remove the present limitation on in-
terest rates for these securities.
Furthermore, we are continuing to
pour millions of dollars into the very
countries which are our economic op-
ponents in the peaceful battle for world
trade.
The current foreign aid program has
been disguised by its bureaucratic bosses
as a program which gives aid only to un-
derdeveloped countries of the world.
They contend that they want to help only
the people who cannot help themselves
or have not been able to help themselves.
I submit, Mr. President, that this is
merely frosting on the cake.
The pending bill contains an item of
$1.3 billion for direct military assistance
to the free-world countries. Yet ap-
proximately half of this money is pro-
gramed, not for the underdeveloped na-
tions of the world, but for the prosperous
countries of Western Europe.
In my humble judgment, the countries
of Western Europe are well able to bear
their own defense burdens, instead of
looking to Uncle Sam to foot the bill for
their own protection.
Since we have ,been generous with the
countries of Western Europe in the past,
and have restored them to economic
health, it is folly for us to continue to
help equip their armies, when all we ac-
complish thereby is to permit them to
be more competitive with us in economic
fields.
In addition, many of the dollars spent
on the loan and grant programs carried
out under foreign aid to the underdevel-
oped countries of the world, end up in
Western Europe, simply because we do
not place any restrictions on where the
dollars may be spent.
In that connnection, Mr: President,
consider the Development Loan Fund
program. There are no restrictions as
to how and where loan proceeds from the
Development Loan Fund must be spent.
Loans can be made to India, Pakistan,
or any other country in the world. Yet,
after we lend them dollars, they can
spend those dollars anywhere they de-
sire. Believe me,, Mr. President, when
I say the record shows that a large
amount of this money is spent in Europe.
In other words, our dollars ultimately
further develop the economies of the
countries of Western Europe which now
are very prosperous.
Mr. RUSSELL. Mr. President, will
the Senator from Louisiana yield to me?
17799
The PRESIDING OFFICEP, (Mr.
BARTLETT in the chair). Does the Sena-
tor_from Louisiana yield to the Senator
from Georgia?
Mr. ELLENDER. I yield.
Mr. RUSSELL. I wonder whether the
Senator from Louisiana has had called
to his attention the point that in the ease
of some ,of these loans 'which are made
in good dollars, and which we hope will
be repaid in what is very soft currency,
in most instances the borrowers disre-
gard American contractors, when ar-
ranging for the construction of the dams,
roads, and other projects, and prefer to
use European contractors, and pay them
with these dollars; and we wind up with
a mess of soft currency, for which we do
not have the slightest use; and the Amer-
ican people, who have to pay the taxes
from which this money is obtained, have
no opportunity whatsoever to participate
in that work.
Mr. ELLENDER. The Sena-lor from
Georgia is entirely correct. The record
shows that 80 percent of the loans made
under the development loan fund pro-
gram are repaid in soft currencies, and
only 20 percent are repaid in 1 hard
currencies.
As the Senator from Georgia has just
stated, when the loans are made, the
borrowers purchase goods wherever they
can obtain them for the least amount
of money; they, place their contracts
with those who will do the work, provide
the goods, for the least amount of money.
Under those circumstances, few pur-
chases are made in our country. Few
Americans benefit. Believe me when I
say that, Mr. President.
For instance, when the borrowers have
purchased turbines with which to gen-
erate electricity from falling water, many
of the generators have been purchased
from firms located in Germany, France,
Italy, and the United Kingdom.
Here we are providing dollars with
which to assist the underdeveloped coun-
tries. However, not only is the money
spent in the prosperous countries of
Western Europe, but the money is ulti-
mately used?as I shall point out later
in my remarks?to further deplete our
gold reserves. Whenever our dollars get
into the hands of a foreign country, that
country can convert them into gold, if
they so desire. American citizens cannot
do this, but whenever any of the money
which flows out of our country falls into
the hands of a foreign country, that
country can obtain our gold for it. That
is why our gold reserves have been de-
creasing recently, Mr. President.
Mr. JOHNSTON of South Carolina.
Mr. President, will the Senator from
Louisiana yield to me?
Mr. ETLENDER. I yield.
Mr. JOHNSTON of South Carolina.
Is it not also true that several of the
countries to which we are now lending
our money obtain it at low rates of in-
terest and then turn around and lend
the money to other nations at higher
rates of interest?
Mr ELLENDER. Yes; and I was
somewhat amused a while ago to hear
the Senator from New York plead with
the Senate to appropriate $500 million
more for the Development Loan Fund
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17800 CONGRESSIONAL RECORD ? SENATE
for the year 1961. His reason for this
was the hope that we could entice our
friends in Western Europe to inaugurate
a fund with which to assist us in aiding
underdeveloped countries.
Mr. President, so far as I am con-
cerned, I would not wish to see our
country put up another dime in that
. connection. There will be ample oppor-
? tunity for the Congress to appropriate
additional -funds whenever the countries
of Western Europe show their hands,
and clearly show that they are moving
in that direction. Certainly there is no
indication that such is the case, because
in the pending bill we are giving them
over $600 million of grant aid.
Mr. JOHNSTON of South Carolina.
Is it not also true that at the present
time Western .Germany is paying back
the money it borrowed from us, although
she could pay it back much more rapidly,
but, at the same time, she is lending
money to the countries of Africa at high
rates of interest?
Mr. ELLENDER. Yes. One cannot
.find harder working people than the peo-
ple of Western Germany. But the rec-
ord shows that because of the presence
of our troops in Western Germany, much
money is spent there annually, by our
Government, to sustain our own troops.
I say to the Senate that today Ger-
many and the other countries of West-
ern Europe are so prosperous that they
should be able to carry their own military
burdens.
But the amendment which I will sub-
mit will still leave in excess of half a
billion dollars for military assistance to
Western Europe.
As I have stated, all I am requesting
Is a cut of $100 million?I ask my col-
leagues to remember that?in the
amount which otherwise would be pro-
vided for military aid. Over $600 Million
in military assistance provided by this
bill will go to countries which are the
most prosperous, namely, the countries'
of Western Europe, exclusive of Greece
and Turkey.
Mr. RUSSELL. Mr. President, will
the Senator from Louisiana yield again
to me?
Mr. ELLENDER. I yield.
Mr. RUSSELL. Let me add that not
only are many of these countries as
prosperous as the United States is, but,
in addition, they certainly do not have to
mortgage their futures, in order to take
care of these expenditures.
Mr. ELLENDER. Certainly the Sen-
ator from Georgia is correct.
Simply stated, Mr. President, we are
using our money to subsidize industry
in the prosperous countries of the world,
so that they can compete with us. . We
do not have to be experts in economics
to realize that this competition is now
beginning to hurt our own domestic busi-
ness enterprises.
Mr. ERVIN. Mr. President, will the
Senator yield?
Mr. ELLENDER. I yield for a ques-
tion.
Mr. ERVIN. I should like to make a
statement, and then ask a question. If
the information which I read a few days
ago, to the effect that the United States
has a larger national debt than all of the
other nations on the face of the earth put
together is true, then these other nations
are better off than we are.
Mr. ELLENDER. May I tell my good
friend that I have just stated for the
RECORD that our debt is $55 billion more
than the combined debts of all the other
countries in the world, including Russia.
Mr. MORSE. Mr. President, will the
Senator yield for a further question?
Mr. ELLENDER. I yield.
Mr. MORSE. The Senator is talking
about the state of prosperity of countries
which are still getting large amounts of
money from the American taxpayer.
Would the Senator like to comment on
the difference between the amount of
taxes which are collected in this country
from our taxpayers and the taxes that are.
not collected from the taxpayers of those
other countries?
Mr. ELLENDER. In the past I have
placed in the RECORD lists of those taxes.
Of all the countries in Western Europe,
the British people are about the only
ones who pay in full measure. Britain
has ways and means of forcing her people
to pay their taxes, as is done in our own
country. But when we consider the situ-
ation in France, Italy, Greece, and other
countries in Western Europe, we find
that about the only taxes the people actu-
ally pay there are excise taxes. When it
comes to income taxes, those people are
able to evade them.
May I say that with the prosperity now
being enjoyed by Europe, if those coun-
tries could actually collect the taxes from
their citizens which their laws' impose,
they would not need a dollar from us.
On the contrary, they could be assisting
us to carry the load of helping under-
developed countries.
As I have said many times before on
this floor, so long as we provide the dol-
lars, I do not expect the countries of
Western Europe to make a move toward
helping the underdeveloped countries.
They are going to continue to lean on
us so long as we permit them to do so.
Mr. MORSE. Mr. President, will the
Senator yield for one more question?
Mr. ? ELLENDER. I yield.
Mr. MORSE I think the Senator
from Louisiana has put his finger on
what is a very vital problem, which we
are going to have to face. I have been
severely criticized for trying to make
savings on what I considered to be inex-
cusable waste in the foreign aid program.
One of them involves this very point. I
do not propose to vote hundreds of mil-
lions of dollars to be used by these pros-
perous countries, because what it really
adds up to, when one gets to the bottom
of it, is that we are asking the taxpayers
of the United States to assume the tax
burdens of a lot of tax evaders in those
countries that are getting hundreds of
millions of dollars from us, when those
taxpayers are capable of paying a
heavier tax load. They are "passing the
buck"?and I think that is a good figure
of speech?to the American taxpayer.
Mr. ELLENDER. The distinguished
Senator from Oregon is right. I go back
to the proposition I previously referred
to, namely, that the countries of Western
Eurorie have never been as prosperous as
they are today. I am not permitted to
September 12
state what each country obtains by way
of cash from our country by virtue of
the presence of our Armed Forces in
their countries, but such expenditures
for the current year will amount to over
$3 billion.
We send money abroad to maintain
our own troops and to carry out our
share of obligations under the NATO,
SEATO, and other agreements.
To further answer my good friend
from Oregon, as I have just pointed out,
almost every dollar that we appropriate
in this country for the Development
Loan Fund will not find its way back to
our own country. Instead, the bor-
rowers are going to purchase what they
need where they can get those products
the cheapest?and that is in .Western
Europe or Japan. ?
Mr. TALMADGE. Mr. President, will
the Senator yield at that point?
Mr. ELLENDER. I yield to my friend
from Georgia.
Mr. TALMADGE. Is it not true that
our gold reserves are the lowest now that
they have been in some 20 years?
Mr. ELLENDER. The Senator is cor-
rect. We have a little over, $19 billion
in gold reserves, when only a few years
ago such reserves totaled some $24
billion.
Mr. TALMADGE. Is it not true that
for 1958 our net balance of payments
showed a deficit of $3 billion?
Mr. ELLENDER. If I may advise my
friend, it will be $5 billion in 1959.
Mr. TALMADGE. So all the money
that we spend overseas in this effort will
help increase the net deficit in our bal-
ance of payments; is that correct?
Mr. ELLENDER. That is right. That
is what we are doing. I do not want to
say tO Senators that the foreign aid
program is entirely responsible for that.
I do not say that.
Mr. TALMADGE. But it is a con-
tributing factor?
Mr. ELLENDER. It is the major
contributing factor.
Mr. TALMADGE. Mr. President, will
the Senator yield further?
Mr. ELLENDER. I yield.
Mr. TALMADGE. Is it not also true
that many American manufacturers and
corporations are building branch fac-
tories abroad, so they can utilize rela-
tively cheap labor in reference to the
cost of ours, and employ people in those
countries, while our own people are los-
ing jobs in this country? In other
words, we are exporting jobs as well as
sending nioney overseas. Is that cor-
rect?
Mr. ELLENDER. The Senator is cor-
rect. I do not recall the exact figures
now, but it is my recollection that dur-
ing the past 4 or 5 years the export of
our capital to England alone has in-
creased 8 or 9 times. What is happen-
ing is that "General Motors, Ford, and
other large U.S. companies find it con-
venient to build factories abroad to take
advantage of cheaper labor. Of course,
that means an additional outflow of
American dollars. All of those facts
added together increase the deficit in
our balance of payments and put us in
the red in so far as that balance is con-
cerned.
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19591* CONGRESSIONAL RECORD ? SENATE
Mr. TALMADGE. I thank the dis-
tinguished Senator. I compliment him
on the fight he is making for the Ameri-
can people, the taxpayers, and the Amer-
ican economy.
Mr. LONG of Louisiana. Mr. Presi-
dent, will the Senator yield? -
Mr. ELLENDER. I yield to my col-
league.
Mr. LONG of Louisiana. The Sena-
tor will recall, I am sure, that some years
ago we were told we had to give $17
billion to Europe because they would not
be able to pay it back. Let me ask the
Senator if it is not true that those same
European countries now hold enough
dollar credits to practically empty Fort
Knox. We have given it to them, and
they now have all the money it would
take to pay it back, if they ever had the
desire to do it.
Mr. ELLENDER. As I pointed out,
[foreign nations hold almost $16 billion
in claims against our Government in
the way of dollars, bonds, and other
securities.
Mr. LONG of Louisiana. That is held
by those same countries.
Mr. ELTRNDER. Of course. They are
all prosperous now.
Mr. LONG of Louisiana. Out of the
$17 billion we gave to them $21/2 billion
was applied to abolish the national debts
in 6 countries.
Mr. ELLENDER. Mr. President, I also
wish to point out that today we are
suffering the results of some of the things
we did in this field a few years ago. Since
that time some of our hard-earned cash
has been used to develop automobile fac-
tories in Firance and Italy. Now those
factories are in competition with U.S.
factories. One can see these little "bugs"
going about the streets in abundance.
[Laughter.] I do not know what the
increase in such vehicles has been, but
every time I go from my apartment to
the Capitol I see those little cars in abun-
dance. Sometimes I feel as though I will
run over them. They are on the streets
in huge nuMbers, and the increase will
no doubt continue.
As I have pointed out, we are making
it possible, through the expenditure of
our borrowed dollars, the outflow of
capital from the United States, and for
foreign competition to flourish. These
expenditures are going to cause us to
have a deficit in our balance of payments
of about $5 billion this year. If we con-
tinue it will mean either more taxes for
our people or that we will go deeper into
the red.
? What has made America great is the
initiative of our people. We can de-
stroy that initiative overnight if we foist
on the American taxpayer a tax burden
so great as to stifle initiative.
Mr. President, what really makes me
angry is to see the prosperous countries
of Western Europe not only balancing
their budgets but decreasing the taxes.
We are sending borrowed money to those
countries, and now we are being asked to
raise the ante on our own interest rates.
Why, Mr. President, every time we raise
the interest rate 1 percent on our huge
debt we add to our tax load a carrying
charge of $2.9 billion per year.
Imagine that.
And yet that situation is going to exist
until we start to reduce our debt. I can-
not see any possibility of our reducing
our debt in bad times, if we cannot do it
in good times.
Let us consider last year. The record
shows that with all the prosperity in our
country our national debt increased
$121/2 billion. If in good times we can-
not reduce our debt, what is going to
happen in bad times?
Mr. LONG of Louisiana.. Mr. Presi-
dent, will the Senator yield?
Mr. ELLENDER. I yield to my friend.
Mr. LONG of Louisiana. Is it not true
that we have paid off the national debts
of six European countries with our for-
eign aid money, and we are now deeper
in debt than all the nations on earth
put together?
Mr. ELLENDER. Plus $55 billion, I
want to remind my colleague.
Mr. ERVIN. Mr. President,' will the
Senator yield?
? Mr. ELLENDER. I yield.
Mr. ERVIN. I will ask the Senator
if, as a matter of fact, Congress has made
any bona fide effort to pay off any part
of the national debt?
Mr. ELLENDER. We could not. Our
expenditures are greater than the
amount we take in.
I will say to my good friend, he will
remember that we were supposed to have
a balanced budget during fiscal year
1958. I think we were in the black by
about $1.5 billion. However, within :3
or 4 months after June 30 we were in
the red again. What happened, I be-
lieve, is that we did not pay our bills on
time, and therefore a little money was
left over. There has not been a legiti-
mate balanced budget in this country for
many years.
, Mr. ERVIN. Is this not the tragic
truth:? That the Congress has been ap-
propriating the unearned income of un-
born generations of Americans who are
to be left as a legacy the biggest debt
which one generation ever saddled upon
- another?
Mr RTJENDER. There is no doubt
about that. Our debt has never been
so great as it is now. I hate to say it,
but I do not see how we will be able to
pay it. When our country's national
debt is more than that of the rest of the
world put together?including Russia?.
plus $55 billion, it is time for the Senate
to take a good look before we continue
these programs.
Mr. President, it is my considered opin-
ion that there are two areas in the pend-
ing bill where cuts could very easily be
made?namely, military assistance and
defense support.
Mr. President, I offer an amendment
which I send to the desk, the purpose
of which is to cut the military support
program from $1.3 billion to $1.2 billion.
The PRESIDING OFFICER. The
amendment will be stated for the infor-
mation of the Senate.
The LEGISLATIVE Cimuc. On page 2,
line 8, it is proposed to strike out
"$1,300,000,000" and to insert in lieu
thereof "$1,200,000,000."
Mr. ELLENDER. Mr. President, this
amendment would reduce the amount of
money for military assistance by $100
17801
million. I might point out at this tine
that this amendment was rejected by
our own Appropriations Committee by a
tie vote of 13 to 13.
As I have previously stated, a good
portion of this money is programed to
be spent to help the countries of Western
Europe defray the costs of modernizing
their own armies.
Based upon the administration's justi-
fications, in excess of $600 million is pro-
gramed for this area of .the world.
I cannot for the life of me understand
why we should be asked to contribute
more than $600 million to help maintain
armies in countries which are now more
prosperous than they have ever been.
During the course of the Senate hear-
ings on this bill, I asked Defense Secre-
tary McElroy why more efforts were not
being made to have the tountries of
Western Europe carry more of the
burden.
I would like to read from that hear-
ing:
Senator ELLENDER. I have only one ques-
tion, Mr. Secretary. I am not going to go
Into any details of the programs in various
countries.
However, the record already made will show
that I have expressed the belief that many
of the countries receiving assistance from us
should be helping us with the burden we are
carrying rather than obtaining aid from us.
Your statement indicates that efforts are
being made to get these countries to do
more, but, nevertheless, we continue to assist
them.
What recent efforts have been made to get
these people to give more assistance to us?
Secretary McEisoy. More assistance to
themselves, I think, is the way I would say
it. The things that have been going on
include the purchasing of equipment by the
Germans for the equipment of their forces.
Senator ELLENDER. The Germans are well
able to do that;
Secretary McEcnox. I agree, sir.
Senator ELLENDER. In the past, however, we
have given Germany vast sums of money
which have contributed in no little way to
her recovery.
Secretary McErsor. That is right.
Senator ELLENDER. I am just wondering
why other countries in Western Europe are
unable to do what the Germans are doing.
Why is not more effort made to get them
to assist us?
Secretary MCELROY. I think your belief is
that we are not doing as much as we should
and I think you may be right, Senator.
Senator ELLENDER. You mean in that di-
rection?
Secretary McEasoy. That is right.
Senator ELLENDER. That is what I have
been talking about. Your predecessor said
he was going to do it. What are you doing
now?
Secretary McELnov. I think conditions were
less favorable during the time of my pred-
ecessor than they are now, sir. I think the
financial position of the Western European
countries has very considerably strengthened
in the last 2 or 3 years.
So I have far greater agreement now with
your position on the strength of it than I
think I could have had, say, 3 years ago.
In my opinion, Prance is an example of a
country where there must be considerably
greater support of their military establish-
ment, out of their own resources.
It is apparent from this testimony that
even Secretary McElroy would like to
have more help from the countries of
Western Europe in preparing for their
own defense.
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17802 CONGRESSIONAL RECORD ? SENATE
Secretary McElroy cited France as an,
example of a country which must give
greater support to its own military estab-
lishment.
Yet, do Senators know that France is
programed to receive more than three
times the amount of military assistance
under the pending measure than she re-
ceived during the last fiscal year?
What is more, this action is being taken
In the face of France's request that we
remove our airbases located there merely
because we will not hand over our atomic
weapons to General De Gaulle.
In other words, we are telling the
French, "Kick us in the teeth when we
are trying to help you defend your own
country, and in return for this, we will
treble the amount of money we give
you."
If this is a- precedent, then perhaps all
of our other so-called allies will order
American fighting men from their soil,
just so they can receive increased grants
under the military assistance program.
But above and beyond this, the high
dollar balances and the vast gold re-
serves presently held by the countries of
Western Europe should preclude the ne-
cessity of us furnishing aid to these
countries, even if there are no other good
and sufficient reason.
Mr. President, as I have previously
stated, the dollar balances and gold re-
serves of the Western European coun-
tries will continue to increase during this
fiscal year because of the dollars which
will be spent by the underdeveloped
countries as a result of grant economic
assistance, and Development Loan Fund
dollars received from us.
In addition, our own Defense Depart-
ment will spend overseas in excess of $3
billion in fiscal year 1960, and this entire
amount will enter into the international
balance of payments picture to further
contribute to our alarming deficit bal-
ance of payments.
I have at my desk a table entitled, "U.S.
Defense Expenditures Entering the In-
ternational Balance of Payments," which
shows how these dollars will go to the
countries of Western Europe.
Unfortunately, this table has been
labeled "secret" and I cannot make it
available to the American public.
However, I invite Senators to come by
my desk and look at these figures. They
.show only too well that, for the most
part, these dollars are going to go directly
into the pockets of those countries which
have the least need for more American
dollars..
I would also like to point out to Sena-
tors,- that in addition to Western Europe,
our former enemy Japan is in for a siz-
able portion of the 'military assistance
appropriation. However, I am not able
to give that exact figure since it has been
labeled "secret." Suffice it to say that it
is a large amount.
Mr. President, I am able to tell?it is
not a secret?that Japan spends only be-
tween 1 and 2 percent of its gross na-
tional product for defense, as compared
to our expenditure of 10.4 percent of our
gross national product.
Augmenting the money we are spend-
ing in Western Europe and Japan
through this military assistance pro-
gram, and the spending there by our own
Defense Department, there will be a large
amount of private investment flowing
into these very same countries.
For calendar year 1958, U.S. private
investment overseas amounted to $2.9
billion and the bulk of this amount was
invested in Western Europe.
To further increase the dollar balances
and the gold reserves of these countries,
there are vast amounts of tourist dollars
which will also be spent in these coun-
tries during the coining year.
For calendar year 1958, tourism re-
sulted in $2.2 billion being spent in the
countries of Western Europe alone._
In other words, Mr. President, as our
national debt grows to new levels, and
demands are made for the Federal Gov-
ernment to raise interest rates, our so-
called allies are continuing to enjoy al-
most unlimited prosperity. ?
They are able to reduce their national
debts and, in many cases, their taxes,
while we are faced with the grave threat
of a run on our dwindling gold reserve
and, for the second successive year, a
deficit balance of payments.
Mr. President, there are four ways in
which U.S. dollars find their way into
the pockets of the prosperous countries
of Western Europe and Japan:
Through Defense Department spend-
ing to'support our troops based in these
countries, through private investment by
U.S. citizens, through tourist spending,
and finally through foreign aid.
I do not believe that any Senator feels
that Congress should enact any type of
restriction on the rights of individuals
either to invest their money in a foreign
country, or to visit a foreign country as
a tourist.
Likewise, it is necessary for us to
maintain our own armed services in for-
eign countries, and the resultant mili-
tary spending must be continued, al-
though I do believe that some reductions
could be made in this field.
Through the process of elimination
there is only one area where we can make
a reduction in this outpouring of Amer-
ican dollars, and that area, Mr. Presi-
dent, is foreign aid, since this is the
only field over which we can exercise
any control.
,As I have said many times in the past,
we must mark a beginning of the end
of foreign aid programs. This country
cannot take the position that every year
from now until eternity?or bank-
ruptcy?we shall continue to spend
some $3/billion per year on aid to foreign
countries.
In my judgment, a step in that direc-
tion would be a favorable vote on my
motion to reduce military assistance
spending for this fiscal year by $100
million.
I ask that the Senate adopt the
amendment.
Mr. HOLLAND. Mr. President, I sug-
gest the absence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. HOLLAND. Mr. President, I ask
unanimous consent that the order for
the quonim call be rescinded.
Septemb,pr 12
The PRESIDING OF'FICER. Without
objection, it is so ordered.
Mr. SALTONSTALL. Mr. President, I
hope that the amendment of the Senator
from Louisiana (Mr. ELLENDERI will not
be adopted. I should like to speak very
briefly on this subject.
The Appropriations Committee gave
careful consideration and devoted long
hearings to these questions, and particu-
larly the question of military assistance.
We realized that the House had gone into
the subject very thoroughly. We took
several votes in committee, and decided
to leave the amount as the House re-
ported it. I?hope the Senate will sup-
port the committee in that action.
I say that for this reason: The Presi-
dent's original request was for $1,600 mil-
lion. This was cut down in the authori-
zation bill to $1,400 million in the final
authorization. I think the Senate voted
for $1,300 million, and the conference
reported .$1,400 million. The House al-
lowance was $1,300 million. If the Sen-
ator's amendment is adopted the amount
will be reduced still lower, to $1,200
million.
I point out that the Draper Committee,
which was an objective committee of re-
sponsible citizens, recommended that the
amount should be $2 billion rather than
even the $1,600,000 which the President
approved.
Mr. BRIDGES. Mr. President, will
the Senator yield?
Mr. SALTONSTALL. I yield to the
Senator from New Hampshire, the senior
member of the committee on the minor-
ity side.
Mr. BRIDGES. Is it the Senator's
position that, having arrived at a figure
on this bill for the various items, he is
not only going to oppose any decreases,,
but he is going to oppose any increases;
that he is going to support the bill as
itis?
Mr. SALTONSTALL. That is correct.
We had a discussion on both sides of the
table in the committee room, and we
agreed that we would not ask for any in-
creases and would refuse any decreases,
but would support the bill as it came out
of the committee.
Mr. JOHNSON of Texas. Mr. Presi-
dent, will the Senator yield to me?
Mr. SALTONSTALL. I yield.
Mr. JOHNSON of Texas. A few mo-
ments ago the Senator from' New York
offered an amendment increasing the
amounts in the bill, and I urged the Sen-
ators not to support that amendment
because I thought the bill the committee
had reported was the best bill obtain-
able. It is very close to the House bill.
The House committee had long, extended
hearings, as did the Senate committee.
I do not believe that we could improve on
the bill by adding amendments on the
floor either increasing or -decreasing the
amounts, and I hope the amendment of
the Senator from Louisiana will not be
accepted.
Mr. BRIDGES. I agree with the posi-
tion of the majority leader and the Sen-
ator from Massachusetts. I think they
have stated a position which certainly
was the general attitude of most of those
present, and in which I concur.
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195Y?, CONGRESSIONAL RECORD ? SENATE
Mr. SALTONSTALL. I thank the Sen-
ator from New Hampshire. I spoke to
the Senator from Texas, and I told the
Senator from New York that I could not
support his amendment, though person-
ally I favored a bigger development loan
fund.
Mr. DIRKSEN. Mr. President, will the
Senator yield?
Mr. SALTONSTALL. I yield to the
Senator from Illinois.
Mr. DIRKSEN. The original request
was for $1,600 million. The House fig-
ure was $1,300 million. The Senate
committee figure is $1,300 million. The
Draper committee, which went all over
the world and examined into every sen-
sitive area, still felt that this was too low
and that $400 million should be added?,
Mr. SALTONSTALL. The Senator is
correct.
Mr. DIRKSEN. lam delighted to hear
the majority leader say that in his judg-
ment the committee figure ought to be
supported and that the amendment now
pending to cut military assistance by
another $100 million ought to be voted
down.,
Mr. *SALTONSTALL. I hope that the
Senate will stand by the committee and
refuse the amendment of the Senator
from Louisiana.
Mr. RUSSELL. Mr. President, I ask
for the yeas and nays on the pending
amendment.
The yeas and nays were not ordered.
Mr. RUSSELL. Mr. President, I re-
gret that the Senate refuses to go on rec-
ord as to this amendment. I do not
know the reasons which prompt that
action. It has been customary when
amendments of his kind have been
offered in committee and have been voted
upon by a very close vote in the commit-
tee and then brought to the floor of the
Senate, for the-Senate to have a record
vote.
I do not know whether the decision
grew out of the statement of the Senator
from Massachusetts that the committee
agreed not to offer any amendments on
the floor. At least he left the inference
that the committee agreed not to offer
any. I was not present when any such
agreement as that was made. On the
contrary, I had understood that the Sen-
ator from Louisiana had stated specifi-
cally that he would carry the amendment
to the floor.
Mr. BRIDGES. Will the Senator yield
tome?
Mr. RUSSELL. I yield.
The PRESIDING OFFICER. The
Senate will be in order. The Senator
will suspend until the Senate is in order.
The Senator from New Hampshire may
proceed.
Mr. BRIDGES. I do not thing there
was any agreement of the committee.
The committee did not agree to that end,
I will say; it was only an agreement
among some of the members of the com-
mittee. Many of them may have differed
with that, and some of them probably
had a different opinion, but there was an
agreement among some of the members
of the committee, and that is what the
distinguished Senator from Massachu-
setts was referring to.
Mr. SALTONSTALL. Will the Sen-
ator yield?,
Mr. RUSSELL. ' Yes.
Mr. SALTONSTALL. I do not want
to leave any inference that the Senator
from Louisiana agreed not to offer any
amendment. What the Senator from
New Hampshire states is correct. , I
should like to make it clear that there
was discussion on both sides of the table
among some of us to the-effect that we
would not offer any amendments.
Mr. RUSSELL. Many of these amend-
ments have been brought to the floor of
the Senate in the past few years. Al-
most invariably for the past 5 or 6 years
they have been voted on, and until this
year the Senate has not displayed any
hesitation about going on record on the
amendments.
Mr. LANGER. Mr. President, will the
Senator yield?
Mr. RUSSELL. I yield.
Mr. LANGE'R. I agree fully with the
distinguished Senator, and I should like
to' ask him: Were the yeas and nays
ordered?
Mr. RUSSELL. No. The Chair stated
that the Senate had refused to go on
record on this matter of very vital im-
portance to all of the American people,
and I dislike, Mr. President, to see the
Senate put in a position of being afraid
to go on record on a matter of this
importance.
Mr. SMATHERS. Mr. President, I am
one of those who would like very much
to support the amendment. I know
there are many others who would like to
support the amendment who did not ask
for an opportunity to speak on it when
the Senator from Louisiana was making
his explanation about it because we
thought it might precipitate further
debate. We wanted to get to a vote, but
we did want to get on record.
If we do not have an opportunity to
get on record with a vote, then I, and I
am sure many others, are going to take a
little time and explain why ,this atnend-
ment should be adopted; and it seems
to me that if it is a fact that the leader-
ship wants to get on with the debate, the
quickest way in which it could be done
would be to ask for the yeas and nays
and have a vote.
Mr. JOHNSON of Texas. Mr. Presi-
dent, I ask for the yeas and nays.
The yeas and nays were ordered.
Mr. FULBRIGHT. Mr. President, I
will not detain the Senate very long. I
wish to say only a few words in oppo-
sition to the amendment.
A good deal has been said in the press
about the welcoming of Mr. Khrushchev,
who will arrive next Tuesday. If we
want to give him a really warm welcome,
I can think of nothing better to please
him than to cut this appropriation fur-
ther. He will then recognize that the
Senate and,the Government have no-dis-
position to put up real opposition to him,
and I am sure, if he does nothing else, he
will go away extremely pleased by the
action of the Senate to further cut the
appropriation for our defense effort.
The President and all of the military
people have recommended $1,600 mil-
lion. The , House of Representatives,
17803
which is notoriously parsimonious on
'ushers of this kind, in fact on any-
thing in the foreign field, recommended
$1,300 million, and now some Senators
want to go the House one better.
I thust say I find 'it very distasteful
to have to get up and defend the appro-
priation in view of the attitude of the
President on our civil works program,
on housing, and several other things.
However, we spent many months in
committee studying this program, far
longer than the Appropriations Commit-
tee. We recommended $1,600 million,
not because we want to throw away the
public's money, but because all of the
administration, civilian and defense,
made a very good case that this money
will be well spent in our defense.
-They all make the point that a dollar
spent in equipping foreign troops, be-
cause of the lower cost of all kinds of
materials and especially for the upkeep
of the troops, goes further in the field
than it does here. It is true, perhaps,
that those troops are not so reliable as
ours. I would not want to argue that
point. But some of the foreign troops
are very useful and are used in opposi-
tion to troops of a similar nature in Asia,
for example, as well as in Europe. They
are extremely useful. But, in any ease,
I do not set myself up as an authority,
-trying to prove to the Senate on the
merits that this money is needed. I only
cite the authority We have in this coun-
try, the Joint Chiefs of Staff, and, as I
recall, the Draper Committee, composed
of some of the leading military leaders,
including Admiral Radford, General-
Draper, and two or three other admirals,
whose names I cannot recall at the mo-,
ment. But the opinion was very heavily,
weighted among the military, many of
whom have recently retired from the
service, but who certainly are not out of
touch with affairs. They not only rec-
ommended $4.6 billion, but also an addi-
tional $400 million for the NATO area,
which the committee recommended in
the provision with regard to the alloca-
tion of these funds.
I do not know .what more I could say
to this body. If the Senate wishes to
cut it, it may. I say that to cut more
from this project is to weaken the hands
of the President in the forthcoming
meetings and demonstrates an unwill-
ingness to support the foreign aid pro-
gram. ?
Mr. SALTONSTALL. Mr. President,
will the Senator yield?
Mr. FULBRIGHT. I yield.
Mr. SALTONSTALL. 1 know the Sen-
ator from Arkansas will agree with me
when I say that more than one-third of
this amount is allocated to the Far East,
where there is so much of a problem
today.
Mr. FULBRIGHT. The Senator from
Massachusetts is quite correct. We are
now faced with the so-called brush wars,
which have already broken out. We are
already sending small arms into the
area. I do not know what we are think-
ing about when we want to reduce this
amount. If it is the wish of the Senate
to do it, then I suppose logically all of
it should be cut out. To do this would
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17804 CONGRESSIONAL RECORD ? SENATE
Indicate that we have no confidence at
all in the whole program.
Mr. JOHNSON of Texas. Mr. Presi-
dent, will the Senator yield?
Mr. ruLBRIGHT. I Tield.
Mr. JOHNSON of Texas. Mr. Presi-
dent, I commend the very courageous
attitude expressed by the Senator froth
Arkansas. He has great knowledge in
this field. He spent several weeks hold-
ing hearings in connection with the
authorization act. It is very odd for
any of us to come along now and say
4'0h, this is foreign aid," and vote to re-
duce the amount. I think the Senator
from Arkansas has expressed the
thought which should be expressed, and
I hope the Senate will not further reduce _
the amount in the bill. I_ think it is
already weak enough.
Mr. FULBRIGHT. I would go one
step further and say that if the amount
is reduced substantially, the President
will insist on calling Congress back into
session, and I think he would be justified
in doing so, because we are dealing with
the defense of the Nation, not with lux-
uries within the countries. There are
many things we would all like to have,
which we know are not absolutely essen-
tial to our defense. All the best minds
in the Government, such as they are,
agree that this program is essential.
Mr. HOLLAND. Mr. President, will
the Senator yield?
Mr. FULBRIGHT. I yield.
Mr. HOLLAND. I commend unquali-
fiedly the position taken by the distin-
guished Senator from Arkansas, chair-
man of the Committee on Foreign Rela-
tions. I remind the Senate that sub-
stantially more than one-third of this
amount will go to NATO countries. I
remind the Senate that it has been
widely publicized that the first objective
which our esteemed guest of next week
has in mind is the breaking down of the
NATO association. It seems to me that
nothing could be more calculated to
make it clear that we do not stand ready
to fulfill our commitments in NATO and
NATO countries than to reduce this par-
ticular item.
Two or three weeks ago we passed the
authorization bill. In the bill now be-
fore us we have already cut the amount
for this item down to $100 million less
than the amount authorized. We are,
$300 million under the budget request.
It seems to me that for us to cut the
amount again at this time, and at this
critical hour, and when so much of the
amount will go to the NATO countries,
would be just about the worst thing we
could do because it would indicate an
unwillingness to stand by our obligations
under the NATO agreement.
Mr. LONG of Louisiana. Mr. Presi-
dent, I shall not burden the Senate for
more than 2 minutes. The junior Sen-
ator from Louisiana has spoken on this
subject on the floor of the Senate many
times. It has been one of the most
frustrating experiences he has had in his
life. Every time waste, graft, and mis-
management have been exposed, the
answer has been: "More money." The
answer has not been to find some way to
cut the waste and graft, it has simply
been a demand for more money.
The point has been made that one-
third of the money will go to the NATO
coatries. When I first came to the Sen-
ate, I was firmly convinced that I should
not vote for the foreign aid program.
Then I heard the great speech by Sena-
tor Vandenberg, and I voted for a higher
figure.
Subsequently I made some study of the
matter. We were told-we had to give the
money to Europe, because Europe could
never pay it back; they,would never be
able to pay it back.
I ask Senators to check the record.
The European countries hold $17 billion
of credits against Uncle Sam. As I said
earlier, they can almost empty Fort
Knox. Give them about 2 more years,
and they will call on those credits. Once
they know we do not have enough gold
to pay, there will be a rush on the banks
to empty Fort Knox. Europe has enough
with which to pay for everything we have
given them.
-Oddly enough, the $17 billion which
Europe is holding works out to the same
$17 billion we gave?yet it was said that
this money must be given, because
Europe would never be able to pay it
batk.
I am told that one-third of the money
goes to the NATO countries. We have
paid off the national debt of six of those
countries. We have paid off the whole
debt. They are debt free. I am happy
to be able to say that. But the United
States is deeper in debt than all the other
nations of the earth put together. Yet
we paid off their debts.
I am very happy to know that some-
body is not in debt. The United States
paid its debts but it is deeper in debt
than all the other countries put together.
We ought to insist on some commit-
ment. One would think that .by the
time we had given them all that money?
$4 billion, $5 billion, or $6 billion a year?
they would do something in return?for it.
For many years we have had a pro-
gram of Federal aid to the States. If a
State wants highway aid, welfare aid, or
any other kind of aid, it is necessary for
it to make many commitments. Down
my way, it is necessary to agree to so
many conditions in order to get highway
aid that some say we should turn the
whole program down.
But there is a whole string of Federal ?
aid conditions. The President has prac-
tically told the States that if they want
Federal money, they will have to agree
to meet certain conditions to get it.
But how many conditions do Senators
think the countries of Europe agree to in
order to get our money? Not a single
one. None. They take the money? and
do with it pretty much as-they please.
Much graft has been exposed in the
program, but when the charge of graft
is raised, the answer is always the same:
"Give them more money." -
Until we can find some way to make
this program begin to make sense, it
seems to me that some of us have a right
to protest against the way the program
is being managed.
The senior Senator from Louisiana
[Mr. ELLENDER] knows that, with respect
to our-own public works, every time it is
desired to construct so much as a drain-
September 12
age creek in Louisiana or anywhere else'
in the United States, it is necessary to
spend 10 years justifying it. It is neces-
sary to have the approval of the Gover-
nors and everyone else affected. By the
time the project is authorized, par for
the course often has been 10 years for
major projects before the first money
was made available.
In Europe, however,- some 2,800 con-
struction projects have been authorized,
and a thousand were abandoned. They
were abandoned because they were not
justified in the beginning. Yet we go
ahead and appropriate for such projects.
Until we begin to make some sense
out of this program, we are well justified
in squeezing down on the amount of
money and trying to find some way to
get some benefit out of the money. Oth-
erwise, it seems to me that spreading it
around 60 nations affords us very little
in return.
I wish to state that it is true that
a foreign soldier can be armed " more
cheaply than can an American soldier.
The only trouble is that once we arm
the foreign soldiers?even if we. do so
more cheaply?we cannot be sure that
they will fight for us when we need
them.
For instance, consider the situation in
connection with the attacks on Laos.
My guess is that $1 out of every
$60 that we provide by means of this
program goes to Laos. When the fight-
ing starts, however, we have to send our
own troops; no other troops go to help us.
Therefore, while it is true that a- f or-
eign soldier can be armed more cheaply
than can an American soldier, the vital
point which we must keep in mind is
that when the fighting starts the for-
eign soldiers may stay home, and we can
only count on our own soldiers to engage
in the fighting. The result is that all
the money we spend on arming foreign
troops is wasted if we do not obtain
any good results from those expendi-
tures.
Mr. President, my senior colleague [Mr.
ELLENDER] has submitted an amendment
which, if agreed to, will help us avoid a
great deal of waste, and will help us
obtain some tangible results from the
money we spend.
I hope the amendment will be
agreed to.
Mr. ELLENDER,. Mr. President, I
shall not repeat the arguments I have
previously submitted.
At this time I merely wish to empha-
size only one point: namely, that out of
the military assistance of $1.3 billion now
provided in this bill $634 million is pro-
gramed to go to the countries of Western
Europe which are well able to take care
of themselves.
My amendment does not affect the
funds which will go to Turkey, or to
Greece, to the Far East, or to southeast
Asia.
Mr. President, I repeat that the coun-
tries of Western Europe are well able to
maintain their own defense establish-
ments?to provide their own armed,
forces with needed military equipment.
Therefore, I propose that $100 million
be deleted from the funds proposed to
be made available to the countries of
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1959' ? ? 4 ? CONGRESSIONAL RECORD ? SENATE
Western Europe?countries which are
just as well able to pay such costs as the
United States.
The PRESIDING OFFICER (Mr.
BARTLETT in the chair) . The question
is on agreeing to the amendment of the
Senator from Louisiana.
On this question, the yeas and nays
have been ordered; and the clerk will call
the roll.
The Chief Clerk called the roll.
Mr. MANSFIELD. I announce that
the Senator from Massachusetts [Mr.
KENNEDY], the Senator from Montana
[Mr. MURRAY], the Senator from Mis-
souri [Mr. SYMINGTON] are absent on of-
ficial business.
I also announce that the $enator from
Indiana [Mr. HARTKE] and the Senator
from Wyoming [Mr. O'MAHONEY] are
absent because of illness.
I further announce that, if present and
voting, the Senator from Massachusett
[Mr. KENNEDY] and the Senator fro
Missouri [Mr. SYmincron] would ea,ch
vote "nay."
Mr. KUCHEL. I announce that the
Senator from Utah [Mr. BENNETT] iS ab-
sent on official business of the Joint Com-
mittee on Atomic Energy.
The Senator from Arizona [Mr. GOLD-
WATER] and the Senator from Kentucky
[Mr. MORTON] are necessarily absent.
The Senator from Maryland [Mr.
BEALL] and the Senator from Nebraska
[Mr. lisusnA] are detained on official
business.
If present and voting, the Senator from
Maryland [Mr. BEALL], the Senator from
Utah [Mr. BENNETT], and the Senator
from Arizona [Mr. GOLDWATER] Would
each vote "nay."
On this vote, the Senator from Ne-
braska [Mr. ThirsicA] is paired with the
Senator from Kentucky [Mr. MORTON].
If present and voting, the Senator from
Nebraska would vote "yea," and the
Senator from Kentucky would vote
"nay."
The result was .announced?yeas 37,
nays 53, as follows:
'AS-37
Anderson Engle Proxmire
Bartlett Ervin Robertson
Bible Frear Russell
Butler Gruening Schoeppel
Byrd, Va. Johnston, S.C. Smothers
Byrd, W. Va. Jordan Stennis
Cannon Kerr Talmadge
Chavez Langer Thurmond
Curtis Long, La. Williams, Del.
Douglas McClellan Yarborough
Dworshak Magnuson Young, N. Dak.
Eastland Mansfield
Ellender Morse
NOT VOTING-10
Beall Hruska Murray
Bennett Kennedy O'Mahoney
Goldwater Morton Symington
Hartke
So Mr. ELLENDER'S amendment was re-
jected.
Mr. DIRKSEN. Mr. President, I move
to reconsider the vote by which the
amendment was rejected. *
Mr. JOHNSON of Texas. Mr. Presi-
dent, I move to lay that motion on the
table. ?
The motion to lay on the table was
agreed to.
Several Senators addressed the Chair.
Mr. GORE. Mr. President, a point
of order.
Mr. JOHNSON of Texas. Mr. Presi-
dent.?
The PRESIDING OFFICER. The
Senator from Texas.
Mr. JOHNSON of Texas. I yield to
4,2.1.1 Senator from Michigan.
NAYS-53
Aiken Green McNamara
Allott Hart Martin
Bridges Hayden Monroney
Bush Hennings Moss
Capehart Hickenlooper Mundt
Carlson Hill Muskie
Carrolli Holland Neuberger
Case, N.J. Humphrey Pastore
Case, S. Dak. Jackson Prouty
Church ' Javits Randolph
Clark Johnson, Tex. Saltonstall
Cooper Keating Scott
Cotton Kefauver Smith
Dirksen Kuchel Sparkman
Dodd Lausche - Wiley
Fong - Long, Hawaii Williams, N.J.
Fulbright McCarthy Young, Ohio
Gore McGee
SCHOOL CONSTRUCTION ASSIST-
ANCE ACT OF 1959?REPORT OF A
COMMITTEE?MINORITY, SUPPLE-
MENTAL, AND INDIVIDUAL VIEWS
Mr. McNAMARA. Mr. President,
from the Committee on Labor and Pub-
lic Welfare, I report favorably, with
amendments, the bill (S. 8) to authorize
an emergency 2-year program of Fed-
eral financial assistance in school con-
struction to the States, and I submit a
report (No. 1011) thereon. I ask unani-
mous consent that the report be printed,
together with minority, supplemental,
and individual views.
Mr. MORSE. Mr. President?
The PRESIDING OFFICER. Without
objection?
Mr. MORSE. Mr. President, reserv-
ing the right to object?and I was ad-
dressing the Chair under the unanimous-
consent request?I request that I be rec-
ognized.
Mr. JOHNSON of Texas. Mr. Presi-
dent, do I not have the floor?
The PRESIDING Ow10ER. The
Senator from Texas has the floor.
Mr. JOHNSON of Texas. *I yield to
the Senator from Illinois.
Mr. MORSE. Mr. President, a point
of order. The Senator from Texas
yielded in order for the Senator from
Michigan to make a unanimous-consent
request. When a unanimous-consent
request is made, any Senator has a right
to object.
Mr. McNAMARA. Mr. President, I
did notask the majority leader to yield
for the purpose of asking unanimous
consent. I will strike out my unani-
mous consent request, V there is no other
way to avoid an argument.
Mr. MORSE. Mr. President, a par-
liamentary inquiry.
The PRESIDING OFFICER. The
Senator from Oregon will state his par-
liamentary inquiry.
Mr. MORSE. Does the filing of a
report require unanimous consent?
The?PRESIDING OFFICER. Will the
Senator repeat his inquiry?
Mr. MORSE. Does a request to file
a report require unanimous consent?
17805
The PRESIDING OFFICER. It does
require unanimous consent.
Mr. MORSE. I would like to reserve
the right to object to the unanimous-
consent request. It will save time ? if I
may have half a minute to state my rea-
sons. Then I will yield the floor.
The Senator from Michigan has asked
permission to file what I consider to be a
report off a very, very important bill, a
bill that proposes a school construction
program. When that bill goes on the
calendar, and it should go on the calen-
dar, I think this Congress should stay in
session lOng enough to take action on
that bill. This is the type of legislation
the Senator from Oregon has been talk-
ing about which, in my judgment, places
a clear obligation on Congress to take
action on it before we adjourn. Cer-
tainly, we would have a very difficult time
justifying to our constituents adjourning
before we take the action that ought to
be taken to aid the school children of
this country by the adoption of an educa-
tion bill that will provide for the con-
struction of the classrooms we need if
we are to train the brains of this country
in time to meet the competition Russia
is going to give the free world in the years
immediately ahead.
_ I think that not only should the bill
go on the calendar, but I think we should
stay in session for whatever period of
time is necessary, Mr. President, to pass
the proposed legislation and to pass cer-
tain amendments 'which I think ought
to be added to the bill, such as an addi-
tional amendment to give to the school-
teachers of this country sqme Federal
aid in respect to their salaries, to accom-
plish two things: First, so that we will
not have a shortage of teachers; and, sec-
ondly, so that teachers who are not get-
ting enough pay can be better paid, since
we are failing to get the most competent
teachers in some instances.
Mr. President, I do not object.
Mr. McNAMARA. Mr. President, if
the majority leader will yield further, I
wish to say that I certainly do not dis-
agree with what the distinguished Sen-
ator from Oregon has had to say. It is
the hope of our committee that we can
get the bill 'on the calendar this year.
We do not have our reports printed. We
do not think we will be able to have this
accomplished in the next couple of days.
We have little hope of getting the bill
through both Houses of Congress at this
session.
Again I commend the Senator for his
-views. When the proper time comes, we
hope the climate will be such that his
views will prevail.
The PRESIDING OFFICER. Without
objection, the bill will be placed on the
calendar. Without objection, the re-
quest for printing of individual, supple-
mental, and minority views is granted.
Mr. JOHNSON of Texas. Mr. Presi-
dent, I yield to the Senator from Illinois.
Mr. DIRKSEN. Mr. President, while
most Senators are present in the Chain-
ber I should like to inquire whether the
distinguished Senator from Louisiana
has more than one other amendment to
offer. My understanding is that there
is only one additional money amendment
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17606 CONGRESSIONAL RECORD ? SENATE
to be considered, and that the discussion
will be reasonably short, so that there will
be a vote in a relatively short time.
Mr. JOHNSON of Texas. Does the
Senator desire the yeas and nays on the
amendment?
Mr. PT.T;FINDER. That will be all
right with me.
Mr. JOHNSON of Texas. Mr. Presi-
dent, I yield to the Senator from Mary-
land, and then I will yield the floor.
S. 223?CONSTRUCTION OF DAM BY
POTOMAC RINCTRIC POWER CO.
ON POTOMAC RIVER
Mr. BUTLER. Mr. President, the re-
ceipt of an invitation to attend the cere-
monies on September 24 formally dedi-
? cating the new electric energy generat-
? ing station of Potomac Electric Power
Co., at Dickerson, Md., prompts me to
make a few remarks at the close of this
session with respect to S. 223 which is
cosponsored by my distinguished col-
league [Mr. BEALL] and myself, which
would permit the company, at its own ex-
pense, to construct a dam near the con-
fluence of the Potomac and Monacacy
Rivers so that the company and its cus-
tomers could secure maximum use, pro-
ductivity, and efficiency from this great
new plant. The first generating unit in
the Dickerson plant went into operation
in June of this year, and the second unit
-will be in operation approximately 1 year
from now. At that time, the company
will have expended over $100 million in
the construction of this plant so vital to
? the needs of the entire area. However,
? unles the company is permitted to build
the proposed dam, it will not be feasible
or practical to build the third and fourth
generating units in the present plans of
the company.
S. 223 is the third legislative effort of
my colleague [Mr. BEALL] and myself to
secure the congressional approval neces-
sary before the proposed dam may be
constructed. The Senate Public Works
Committee failed to take any action on
S. 3913 introduced in May 1956 and S.
698 introduced in 1957, and no action was
? taken by the committee this session on
? S. 223. I should point out, however, that
the House Public Works Committee did
report favorably on H.R. 11481, a com-
panion bill to S. 3913, in the waning days
of the 2d session of the ..,84th Congress,
bit\not in time for the Home itself to
act on that favorable report.
Senators will recall that the company
had originally selected a site in Loudon
County, Va., for its new generating plant;
but due to considerable opposition to that
site by the Army Corps of Engineers and
others, a subcommittee of the Senate Dis-
trice of Columbia Committee, under the
chairmanship of the distinguished senior
Senator from Oregon [Mr. MORSE], held
extensive hearings and recommended
that the company not build its proposed
plant at the Loudon County site. The
subcommittee recommended further that
:the company consult and cooperate with
the Corps of Engineers in the selec-
tion of a different and new site for the
proposed plant; and, as a result of such
consultation and .cooperation, the Dick-
erson, Md., site was selected.
It is to the credit of the distinguished
senior Senator from Oregon [Mr. MORSE]
that he has supported each legislative
proposal to construct the proposed dam
on the Potomac River, and all of us-inter-
ested in this vital matter are grateful for
his support. ?
I wish to compliment the company for
going forward with the construction of
the plant at Dickerson, despite the failure
' of the various legislative proposals to
construct the required dam, and despite
the onerous amendments to the proposed
legislation which have been proposed by
some of the Government agencies. In
? short, these proposed amendments would
permit the Government to cendemn the
dam when constructed without proper
' and appropriate reimbursement to the
company; but, more immediately per-
tinent, the proposed amendments, ' if
adopted, would prevent the company
from mortgaging or pledging the sub-
stantial investment it would have in the
dam. In these critical days of acceler-
ated expansion of electric energy gener-
ating units, utilities need readily avail-
able every mortgageable and bondable
asset.
The primary reason for the proposed
amendments to S..223 is to hold the Gov-
ernment harmless against the day when
the Government might want to build a
multipurpose dam in the River Bend
area of the Potomac River. I am willing
to rely upon two distinguished authori-
ties in the public power field with respect
to the need for a multipurpose darn on
the Potomac River for power purposes;
the distinguished senior Senator from
Oregon [Mr. Moan] and Supreme Court
Justice William 0. Douglas.
In connection with the Chesapeake &
Ohio Canal National Historical Park leg-
islation, the Senator from Oregon [Mr.
Moasz] on April 28 told the Senate,
among other things:
. What about power? Is there a power
shortage in this area? Is there in this area
great need for power? That is a question
of fact; and we must ascertain the answer.
However, as far as I know, on the basis
of my understanding of the facts, at the
present time there is no power shortage in
this part Of -the country.
Let me-say, as one who has fought here for
15 years for the protection of the public's
interest in public poiver projects along with
private utility projects, that I have never
favored discriminatory legislation which
would seek. to put' private power operations
out of business. We need both private and
public operations.
Therefore, Mr. President, I do not favor
? construction of the dam if it is true that at
the present time there is in this area ade-
quate power for both its present and future
needs.
In his April 28 speech, the Senator
from Oregon [Mr. MORSE] referred also
.to the opposition of Supreme Court Jus-
tice Douglas to the proposed River Bend
Dam; and the Washington Post of April
7 and 28 quotes remarks of Justice Doug-
las in opposition to the construction of a
'-'multipurpose dam at River Bend.
Potomac Electric Power Co. has. dem-
onstrated dramatically its full accept-
ance of its high responsibility to antici-
pate and meet the present and future
electric energy needs of all consumers in
its service area; and, as in the instance
Septein;.er 12
of its going forward with the construc-
tion of the new plant at Dickerson, Md.,
at grave, substantial, and calculated
financial risks. It has been this com-
pany's initiative and good citizenship
which, to use the words of the Senator
from Oregon [Mr. Moan], made certain
"that at the present time there is in this
area adequate power for both its present
and its future needs."
The company has kept faith with its
customers, present and future, and with
Congress in accepting the recommenda-
tion of the Senate District of Columbia
Subcommittee in selecting -a new and
different site for the much needed addi-
tional electric 'generating plant, and I
hope that in the next session of Con-
gress, the Senate and the House will
quickly and promptly enact S. 223, with-
out the proposed onerous amendments,
so that the company may go forward
with its plans for a third and fourth
generating unit at the Dickerson plant in
order that the company may continue to
meet adequately the increasing electric
energy needs of the area.
MUTUAL SECURITY APPROPRIA-
TIONS, 1960
? The Senate resumed the consideration
of the bill (H.R. 8385) making appro-
priations for mutual security and re-
lated agencies for the fiscal year ending
June 30, 1260, and for other 'purposes.
Mr. GORE. Mr. President, I raise a
point of order in regard to the language
on page 18, line 15, beginning with the
word "provided", through line 17. The
language against which I raise the point
of order- is as follows: "Provided, That
all such advances shall be repaid to this
appropriation on or before June 30, 1960,
and upon such repayment this account-
shall be withdrawn."
Mr. President, I make the point of
order that repayment of advances made
to the highway trust fund from the gen-
eral fund is a matter of statutory law.
Subsection (2) of subsection (f) of sec-
tion 209 of the Highway Revenue Act-
of 1936 reads as follows:
Repayment of advances from general fund:
Advances made pursuant to subsection (d)
shall be repaid, and interest on such ad-
vances shall be paid, to the general fund of
the Treasury when the Secretary of the
Treasury determines that moneys are Avail-
able in the trust fund for such purposes.
Such interest shall be at rates computed in
the same manner as provided in subsection
(e) (2) for special obligati-6ns and shall be
compounded annually.
I submit, Mr. President, that the lines
which I have read from the bill purport
to change, and would change by legis-
lation, the law. Therefore, I make the
point of order that the language which
I have read, beginning with the word
"Provided" on 15, and continuing
through lines 16 and 17 on page 18, is
legislation on an appropriation bill.
Mr. ROBERTSON. Mr. President, a
parliamentary inquiry.
The PRESIDING OFFICER. The
Senator from Virginia will state it.
Mr. ROBERTSON. Can a Member of
the Senate make a point of order against
a number of lines in an amendment with
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