THE RUBLE WAR: THE CRISIS AND BEYOND

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62S00545A000100090122-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 38
• Document Creation Date: December 9, 2016
• Document Release Date: August 30, 2000
• Sequence Number: 122
• Publication Date: July 21, 1958
• Content Type: PREL

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, e 6
Mit MLR Ws The cii.i.and Beyond"
6,,2?17,4 FA.A..?-It
en?-?-?
- 4 ija, )(A.404:141.ciA01?.?
As troadsmat over tho
01111111LIMIDNIXTMOSK
ihmilsy, July 21, 195C?
1102 'WI 1DT
11113MID DT
Fran Studio 61
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chard C. Hot A CBS ws CorrsspoAtnt, formany year* a
reporter in Garalny and Russia, recently toured /Mail
Argentina, Chile. Peru and Uruguay for the program.
Daniel
OW Nom Moscow
955.195?), ourrently
three- years
Washington D.0
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war upon you in the peaceful field of trade
win over the United States. The threat to
the ICBM. but Lathe field of peacefUl pro-
Leis this, and it will prove the euperiority
of
oceesion, an
words had a propagandist ring to them. But a few
American in special eharge of knowing what the Ruseians are doing
and planning, told the United States that thou. words vere in deadly
earnest. IA s speech, NO. Allen Bolles, the head of Americe's
"-----moyertemammomw
Central Intelligence, said that the United States has fased no greater
threat in its peacetime history than the war of trade and aid that
Ihreshahav ea frankly declared upon us last Fall.
In the past week, the scunting crisis in the Biddle Seat has
absorbed the world atteetion. By most of the evidenos that we
have the timing of that crisis was almost inadvertentt Russia had
not thought it would heppen when it did, ass.? is believed to have
been taken by surpriee by the tieing as welters. The best informed
opinions we have boon able to gather area It will not cause big Wen
? 1 ?
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their
sD) For
trtion; and her main instrument Ruble War
to aat.?d:free economy. aim to use
tion an a politi&1 weapon on a sai.e without
. On that enduring Soviet len to au.bv.rt our
we report to you now
the Rdble War look in the areas of each of
to def
First, how
the eorreepondents now about to report to us First'ttMtan Burdett.
ADM, In the Middle Best - ever since the last big oriel*, the
&iez iiii, the door has homicide open to Soviet penetration and
the siaehave been streaming through that door. Today, they have
list of or than eighty development projects three key countries,
Syria, iiigypt and Temen1 In those same countries we are doing
thing
SMIETW
EALISCWAt
d than the Communist bloc and basi were doing a better
job. But the flat is the Russians are tieg a bigger run for
the ruble than we are getting a bang far the buck.
SKIM Richard C. Bottelet
HOTTBLh In South *masa the flaseians are only beginning to
penetrate. A irety shrew observer in Chile told me, *The Soviet
Union *Undo in Latin America today Tabers it stood in the Middle at
five years ago. The feet? is it4s coming in like a harpoon
Z
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til
on which Russia shown its hand; shown that when a nation dos ta.k
Soviet economie sid it mgy find itself paying Mosoowts political prt
DMITRI Daniel Schorr*
In Russia - it looks as though economic penetration in a
licy, not to he altered by the, shiftlog winds in the cold
4 economic ogpacity to make trouble ter us is in-
=ROM,
borne of those statements ?trot frau
the area where the 5402 risi. eave Russia her opening and where the
f rebellion now, momentarily, distracts from the abiding
of trade war. the Biddle -Zest* Winston Burdett*
aUEDzTr The story- of these twenty months. since Sues is briefly
thus The United has in :effect. boycotted lapt.and. Syria the
the British have been excluded from the: area;ad the
ve mated ins, Here ere some of the vbtch the
with their eateIlitee have already gotten off the ground
in Arab countriest in Syria, Russian teOhnielens in tour Ilyushin
plane* ere buey surveyingt wing the entire eountry. Bulgaria
engineers are building everythieg from silos to airporte* iRgypt.
ultramodern Soviet oil, rigs ere drillieg in the desert! and, RUMWATI,
spirt* ere drawing plane for the espansion, of Agyptie ail refineriee:
their first move in the field of- Middle laster oil* The Casaba have
3
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uract -ti)
tting up a huge
? Soviet
factory Athousand miles to the south in
building a modern port on the Red Sea
first big pbUc wort* project that this flasite kingdom has
un blOwny, from the coast to the eapital, i*
built by Chinese Communisits. the firstpoizt about the Soviet
oft is that thee* Ronsidutdommanpment projects in Sgypt for
example, are not just selected Showpieces to make 4 propaganda *lath
They cover the whole sow of Rgypt *modern economy. They were
selected by the Sgyptians se part of their own inftstrial Ptve?
Tear Plan. The Soviet aid i* not a grants it's not charity. The
Russians are offering lompatermeredit, so the Agyptians can get two
things* technical help and machinery. The total credits a hundred
and seventp.sight million dollars, movers more than a quarter of the
cost of the Five-Sear Plan. Repayment is over twelve years. Interest,
two and & half per cent. The standard rates on Western loans are
from four and 4 half to five and a half per cent.
fnare's second way idtieh tho Russians have tightened
an 4gypt. They have given Sgypt a market for
and most important emport cotton, at a time
no aotton outlets in the West ind# they have
ru with wheat and oil at i tiz. when the United
reasons nade it luipou?ble for &apt to gat
West.
these
41117Pt ua be9n tbisy S
only 2IA of tbfr 'mottos
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? 4 ?
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I( DONTID)
i96, it
sources of foreignarobange. i. of iadep.ndt
of the ieat baa ben converted into deepening depeedence on the Sast.
Several things have impelled Semler to turn Zasts
his need for industrial assistance, and Arab
also bed immediate eoonomic reasons
lie, ehieh controls world cotton prices, has
vulnerable to the Soviet trade straegle hold
in the iong r, bavevor,aidmey be the more sigmificant of Moscow's
two .00nossit 4 major segment of i3pt's industrial economy
will beano Veviet-based under her present Five-Tear Flan Russian
La eaten and Russian kerosene ie burned up, but Soviet apinning
miUiaM iron smelter*, steel plant and refineriee and shipyards,
these are permanent installations that establish a permanent rolatioei.
abip, with Egyptian factorise dependent on the Soviet bloc tor spares.
They Ow the Ruesians a permanent base. If the present program works
well they mill seek to expand that boob and they will gain a new
economie and political leverage in a country that is booming or
nor. the gateway to Africa
taZjSC1t!(t What is happening in the Middle at tedgy, could
men in the Aar East If the Middle Sast is the immed1at4
Soviet target, certainly the biggest termn of area people and
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vAusec -TB
door targets more than fourteen milliom square milas istrotohing from
Indonosia to Afghanistan; people, about onewciuszter of the world's
population. Ibis is the heart-land of neutralism. Tho largoot
grouping of newly-bsdependent fbrner eolonlos; long an rationalism
and poverty, short on administretion and economics, The United States
has pumped more than a billion dollars in 000nomio aid into this area
since World War Two. Until 1955, we ...the Vast w.rs virtually the
only aid dispenses.* in the business. Then, Ihrushohev and Bulganin
toured Asia like a Santa Claus acts offering hospitals and atoel mills
barter trod. And credit at lower interest rate than ours Tho main
Soviet targst in tho area - the jaekpot -is India. Three years
ago* &mint aid to India amounted to $116 million. Sine* than, it
has piled up to $295 millions almost three4ourths the total of our aid
to India over the same period. Sough]; this is the proportion of United
tee and Soviet bloc aid to seven nsutral nations .. seven neutral.
ain Um*. Sot *very Coamnnist blot: deal turned out to be as
es it aounded. But hy and large what tho Soviets promised
they delivered ...usually tooter than we did And while our aid is
appreciated tv sober economists the Russians r. playing to the
gallery and stooling tho bows. Dat as show you bows Cambodia. Sere
is Buddhist Cambodia. So neutral it doesn't recognise Borth or South
KOMI- at or West Gornany4 Communist or Mationalist China, tut
accepts aid from both side*. We helped build thie hospital for
huddhist monks. fted China supplied the surgieal equipmont inside.
Our main Lid effort is an important nsw road, 132 miles through the
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KAI.= Tip) jungle from Pnompenh the capital to a new seaport
the Trench are bull.ding. But this $5 million hospital Bussian
gift* Mill in themodel :nage is getting just as much publicity.
But Cambodians are rightly not concerned about keeping aid in sepa.rate
compartments, so American aid cement is going into ?Lizi t1
Raemian hospital. If that wes a split, hervIs a bigger an. aid
goods, tile, porcelains, sawing emehines ohinawareo ro
cares a few blocks from the Isceria3. Cause for an invorties.
tion perbapsA except that this hoppotil to be Commemist aid and
Communist aid programs weer hare to worry about critic* on the home
front. Burma. Theme foundation stones were the beginning and the
end of an AltiOrialtO hospital IA Rangoon. The Burgles* stopped all
rtcw aid in 1953 ? asked it back in 19%, a bit disillusioned with
liaise:Ian buster trade* Bow our aid program ma the Russians.
t we harm no dieplay to match this one in p3Ain view or OovrmsAt
otfioss in %Lagoon The Russians oome bearing gifts end a* In all
Sczthut&sing their ocameratiel personnel outnumber our five to
eoil reclamation project cannot notch the glamor of a.
gift tcbflo oul school being bui.lt with &mien tool* and the
haip of aIaa technicians* to be staffed naturall,r ? by Ituselen
teober. AU to be paid for some 4ey ky return gift of Burmese
by the tug Is now standard Bosnian .quLpt.
In no the lamb pathway from 1113$84.a to India
$oviet id tapa s.Cur in effort t? sn irriipAtion project
this rt* 1nd anew. raw *femme korat about It. blast
Afghans can't read. But at tbay can see are these Susaian busses
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RALISC
)
mme
4 Soviet jects ha
cornered aot of the wheat and put hundreds of looal bakers out of
business the -fghans really don't like the bread ?- it's soggy
inside*
In Iadia the Rammians don't make manyTheiz
ii till less than half of our total aid but it's skillfully
4 The showcase project is this *dial Steel Mils part
*eondrive4ear Plan, towards which Russia is lending
Fifty thousand Indians employed on the
t will produce one Uio,a tons of steel
mirian standards but one...fifth of India s
ion.What ideating* Rhilai with Russia is not
but350 aussian technicians helping to
too happy to tell you the Buselans
arhe paid on .i1 'r amignments
hat th Rumaians live modestly S. two-family
houses, three rooms to a family -ander conditions sst overseas
American* would scorn. Theoretically the Resew are only supposed
to advise the Indians how to go about the job threogh Raglish
present steel
speaking Russians, ut at of themre do,tiiiyoursoalf types like
the fellow perched ci the outside of this blast :armee The furnace
incidentally will fire up in Decemberor ehedule,
nd everywhere, incredible as it seems, the bureaucratic
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$OiOs 1 think there is a big gsp between consitment and
it is for this reason perhaps? that you do not reap
of good will you could of course. With ths
tjaviet Union so got the impression that their goods
before the ink of thso contract driod 4P.
bandrio, vs call Communist aid ocoonosic
eall our aid efoonomis eggrecaiost. What do
you think our so are?
30katER101 WW1, you ogress with ma that tibia is not oaey to mover
that question. it if I venture to svis I would evect that the
3oviet Union aro out to prove to the world that economi
relations between countries would oleo be based upon Socialist
principles. Cu the other hand,I upset that the United States
aro sell aware that thoy oan only sustain their 8000,0147 if the
?their parts of tho world are also on a high level of economic
cbsvelopment. I think for the United Btatee it is a matter"Or---'
.nU.ght.aed .s1t-intest. Prosperity after all ia the host
tool to preserve democraoy
9 --
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n is the Ws of d, Dr Bostandrio,
is t up for
Weat
agreement that doubles its
from one to two pper mat of
a neutral Asian, friendly to the
tostion is very di
our 121 billion Mershall flan the
foreign aid program in history.
feet. Aa a result West Zemke
the Wussians. Trade yes, to a
this Spriug signed a three-Tear
di th Mbsoow. But doubles it oar
Own frreign trade. Aid?
There's been little opportunity for Bbsoow, so far, in Europe.
That is, with two notable exceptions One in Ioeland, a reluctant
partner in our Atlantic alliance. A tiny country, not very important
on the economic ledger*, but very important on the pap. It lies
midway along a direct Una or air attack from Bessie to the United
States With the air bass, that we now have there we can out off
attack. In Soviet hands, as an air or a submarine base, it could
threaten a* ~tautly.
Soviet hands. It lives
lowland has, had great trouble lolling the oatch of its fisheries
cept to Rummies In 1952 Iceland meld nothing to the Russians
.oday one-ithira of its trade is with the Soviets. If Nascow
topped buying new, iclandls eaanapy would almost collapsei,
To fortify the econoey and to increase Iceland's dependence on
economically, Iceland is slipping into
fishing. But for the last six years,
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LSES4A(COT,D) he aiao 0
lonetera credit to 1 s big chunk of .any iar a
country of only one hundred and sixty thousand
The other target of the 3ovit bloc in Amoy." the chief
o, has been the maverick Comma* oountry1igpaitvie. And
political strings attached to Soviet economic aid have
plain sight. after Ihrushohev literally kissed end made
up itth to in 1955, nothiog, it seemed, was too good for the
*mow offered to take the goods that the Ingoslavs
seU eleowhere, even including livovotz the local
And in exchange, Russia offered to eapply Tito with
erittcriI raw terials that be couldn't afford to buy elseehere.
credits to help Tito build new projects all
A 10 million nitrate fertiliser plant
BigZde, impressive machine factories" equipment for lead
dredging equipment for canals' and, biggest of all,
and electric power couples. Amway one half billion
aid wee promieed, all told. The largest amount
try outside the Soviet bloc. That was the promise.
to accept the political conditions attached
to accept doctrinal donation by his ex.
mow the OCOMOMie bait has been yanked
paid to the Yugoslays have been
all practioel purposes cancelled.
1 visited a coupi of week* ago one of the project* that
Russian money was sopposed to ktkr for, a huge 470 million fer-
Fgrimaamago0190WatIriajAARMSQ144,514maziOWS1072ecing
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LEES 0
took as a
the
it'.
copper.
I of a tariff an mapper,
The Soviets cane
vire* Little Ulnas,' has woca
as a the United States ham a special tariff
and in the first half of this
%tgl*y's beat customer* Brasil has coffee to
and the Soviet bloc offers to
r*tvLrn for oil end precious things like
to separate the vs.po
the best in either
to import Soviet au
fOr a teeth
Chevy would cost* Communist and tonimstrarauxii
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They flatter these proud Gauntries, with attention and blame back-.
urdnees on Yankee imperiali
This preparatory stage of the Roble liar is basked * with
and with floods etas/ulnas and periodicals filled with
mailing Soviet pemsante and happy workers and pictures of big
machines that are meet impressteo in undeveloped Gauntries. And
Soviet chess Players, dancers, scientists, eoeposers, athletes and
,ionrnalists have been swarming Geer south Amerios in recent months
The reason is this: South american governante and businessmen do
not want to trade with the Soviet Minn. But **anode neoesaitY
kewps pushing thus in that direotion and Macaw wants to convince
them that you can do business with the Kremlin.
At preunt, only three eountries in Latin Unica have
dtptic relet4one with Buda. Chile will OMR .0i/1 UMW and
othramay follows
Cammunism and Karl 1hrx tat&ck at in all tht*
usatcan't hope to communise Catholic Soith America any more
tn. it can the Molds= of the Biddle Bast But that's not
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And a it builds, .cnriet influence pick. up and the
Ifteil intense
MaZis
but ab
is what
e source
to be plowed back into sore expansion. The
phenomenal. In 1950 Russia's gross nath:0a1
of all goods end services* bad gram to a hundred billion dollars,
ii third 8441 tench as aeavricats. Six pearl later, both had grown, but
Itusida bad cautioned gaining on se, now up to 40 of our total
Three years from now, it's reckoned, the Soviet MIP mill be 230
billion, fully ball as mach as ours. It was in February, 194,
t the Kremlin rulers ibroally decided to strike the )osture of a
kware" nation. Ithrushchev aonwinced hie followers tbat a minims
investment, with fleetly, symbolic projects, could provi maxisom.
mileage inprojecting an image of Soviet strength abroad, Wilding
good wiU, encouraging neutralism increasing tension in the free
bier's', widens/nisi lesstern infinenCle. itWI MAY more a, gimmick
than a program, typified by this sort of incidents On a tour of
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11
At a
AaStWita/ line untouched t Wawa hands
in Savosibirlik the Chioago of Siberia where only a village stood
daaaden ago Aad in Sverdlovsk in the Urals Russiafs
progma. I
stool indettotry
real trade program
-suffiadency and to
face* outward to
the Kremlin rulers
the specialisation
of tr.id uo,but with a cautious entry into
and a paiitiily-direated foreign aid
program,. immodestly publicised. Total
bloc commitments ars about $1.5 billion. But spread out over so
long A period that the annual cost is only- 200 million. At that
rate Russia (toed double her aid with ease. And it.
doesult all come from Russia. In f
of the machinery
from Czechoslovakia and from &at Gersawt Russia's chief lieutenant
in the foreign aid campaigns Med China or political reasons -
allowed to handle some of the snb..coatracting for Asia. Xbreign
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SGIrnJut 'D) enoegh themselves, so they can't understand
Mndoztta to the other underprivileged
4gmtien aidegraement wee signed the details
but not in *scow. On trade the Soviet
drive La oLy Her total :amigo% commerce ie still
bat there are ominous signs. Aussia's
bit ctLo is riai while ours is tallieg. This year her
's output will be 22% to our 3E% Arid that Op
is n4*ig. Aussie has started exporting to
cutting prime, disterbieg world rkets.But
unlike America, which pour. more than 90% of her 1ttn into
eor goods, Angela still keep* almminma from the enemas?. her
people eook with oast.iron pots and they don't know about aluminom
set aluminum exports; next _pi it then what?
bility for economic werfare is less than advertised,
but it La groving.Runniug ageinst it AM the pressures of the
needs of Awl Odra, the post-auwary
requirements of th iatsUit.s. at RUISIAL is uneconomic force
to be reckomed wi
SMITH: Well, in our own nation's cpit?,
those in ?barge of our plans to meet the Yasi
divided in their concerti Thoy are about 50%
the Ausaians will do but they're at least 540%
we mey fail or neglect to do ourselves Our huge advantage in this
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reciprocal trade program i
of age whereby the President is empowered to ]n triff grsdsz
to at otbs sell to us to earn dollar* to buy from us with. Xed.
to stimulate 6 healthy trade between us and other
gen
o
24'odu4g at a
aid dras
question.
out of the
rebellion is
of
world record economy has been prodUcing
year, while Russia's economy has been
AlOWlast year
*mats of Representa
the usefulness of the whole program into
key Senate committee ripped U. insides
bill, What Gauped this Ceogreesionel
but some wsuggested to ne it was largely
carried out by Democrats and large am a protest *pinWt many
things the Administration has been doing, not lat. the Presidentis
stand ea the adameuGoldfine affair, Mew, in the nett few days
these issuee oome up for infal settlement In our Congress. The
lest few days or week, therefore will tell Voothor for a year tG
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thes forward in her Ruble.
on and Gongroso have withheld
ons tOO4 MOW, one of tho
by Peter
bigger run
like to ask
oonld you strt
t into tho
an official
oall as bask
4 of the
rtant
f it is so,
I think some of the raena &r
Southeast Anion country
Iambi& He wasn't in and I
rtaats I said, The voice' on the
*accuse no important forYou-
tha paint is I think we've heard and wo have to
rtnt to us fighting Ctmommism just isn't to AsLans.
!poster of economic domination. it'o in tho
the old oolonial master. With its socialist
bloc in mom or less absolved of the suspicion
of that kind. With Red Chine a major partners
say there's nobody here but us Asians. Their
they halm a standard of living closer to tho
the bloc endorsos the neutral policy of these
p *Don't te.ke sides; w'11 help you
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(aINT'Ot iiers we must always justify the foreign aid
program ae Cold 4,:ar ammunition publicly in Congress, right in this
studio, and the verdict among the .slausin1 Tore not just helping
L$. YOu're ;Nat trying to fight the iiU*414U1S.."
-aV4-TUt Ack Hottelet,
g':)TTLall in Latin America - ''utwalans ere
14icker on their feet than we are. Heres a continent e ts-
tieI17 rich in reeouroes that just the water running off the Mader
Mountains could lied, up the Western Hemisphere from mad-to.end, in
this potential wealth most of the people live in poverty aut they're
becoming keenly aware of how mueh they're missing. And the !bassians,
spipatnetically, otter them a short cut into this Twentieth Century,
,4uick leap frmm a farm economy- to industrial power and plenty.
loviet reality, of course, is far avow - the .rioviet
price which is taken out of the hides of the people, an Lan ,chorr
*aid. This Is far away, so the $ovist snake oil cimaes to eeem
most attractive. *41 on the other hand, come- in toe often atith
wagging fingers, telling the Latinos to put their houses in order
and pey their debts- and stamp out corruption whioh of course,
they take as rich man's advice. It may be very good advise, it
-0* the wrong wey. the other hand aur double-ostandard keep*
showing. Our price supports and fare inibeidies and protective
tariffs are tried up here. but when the other MAU puts his govern-
t Into business end. insists on doing things in his own strange
way, we- too often look At it ae uicked.
Krnest Leiser:
IZIL.ER4 Nell, Romani, I W4$ given one reason. Mattis, %salmi
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spt more
eranFt*
you Americana," he said
dollars, to give a count yo a make one big announcesent and then
that's that. Now, the hassians, he said, ?announce that they're
their money by at official of tPi. Vest
pl. of weeks ago t Ole with
that when you havea hundred million
go
to give a hundred million dollar audit when they first get
They make a Dimond amouncement when the country comes
to begin negotiations They announce it a third tine when
acted. And they announce it a fourth
to oe
ots the oney, it
four hun red mi 11
finally handed over. y the time the country
-
le think that the i? have given them
liars_ instead of a hundred millions
-mother, somewhat more serious explanation
Yugoslav, who pointed out that the 3oviet money is
gevenin th. form of thing* you can eingle Out 571 ?That was
ilt by
In. the fo
identify as oars.
4i ?U:
J don'
aim
aid to Tegoalavial on the contrary,
Things that the Yugoslays can't
gn on us. It seems to me sometimes tha
iieg out of their kind of foreign. aid bee- ie fr* thee it
relatively new phencetenon The peopi. are constantly being
se4 in the first- place if thy are able to 4o it and,
Indian told me is Moscow, that they should want to
rtain amount of that extra mileage, I think in a
it.
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it aid program s to be expected. As whenttcoves
qu*s or foreign aid, however, I think there theY
do Rot *ore rnileagebecause they *trees the fL&ryand gymbolie
kind of phenomenons the thing which you can go into both quickly
and silyvithout taking any responsibility for an overall foreign
aid prograt.
AIRDMI
the krab world the kneeling are
they get maximum publicity out or
ry acts of courses is colossal.
I think that thatally the reason for their soon s.
Th*jr pro a is ccessfUl because ?t' based based on A policy and
13,iroach to foreign aid that's acceptable to the rob government*.
The liussiane don't come along and say *Kers ten million Collars;
wile * dee with it. " They accept the ideas of the Egyptian* on
Whit_ opt needs and what she vents. rurthermore, in these develop-
t schemes, the Ruseiens aren't givik anything away. They've I
learned I thinks that charity can Do offensive, Their leng-term
redit deal with the mittens is 'ow Popular with %apt eimpXY
*scowls ostensibly Ws a business arrangement and presume:017
anyway these credits are eventually going to be repaid. And so
for Egypt it does not have the odor of poIer patties.
And then the Russians do not have the Point Figur
on top or the show, the visible representative of
r advlsinj, directing interfering and generally
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making himself a perfect p?litical target for hypersensitive
nationalists. I think the Russians are succeeding simply because
theymake it seem at least that their economic aid has no political
strings attached to it.
SMITH: Well, some of the things you've said suggest a
ry basic question, that the Russians are simply making their
projecte seem so important. Is is possible that Soviet penetration
is not really a threat? Could we have some answers on that? Daniel
Schorr.
SCHORR: W.U, I would put it this think that Soviet
penetration is not a quantitative threat I do think it is a
qualitative threat. When I say it is not quantitative I mean that
they haven't yet reached a point where they have the kind of
portable surplus that can threaten us in any way. It's been
exaggerated and it will be so for same time to come in spite of
all her great gloat. However, when it comes to the qualitative
side by stressing the symbols of foreign aid and concentrating
on key sensitive areas and especially on tgypt, which Winston
has talked so well about, they -can get certain spectacular effects.
That is, of course, if you want to consider foreign aid a threat
at all. I don't want to raise an irrelevant question at this
time but George Kerman, has asked a questionas to whether foreign
aid is a threat. Whether perhaps it might not be best to let
Hussia get her feet all enmired in foreign aid and, to laza
metaphor, to get some of the headaches that we've developed and to
get quite enmeshed in the same thing. Perhaps, it might be a good
thing, he suggests.
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tha
.at do
Alussian penetration into f
a
eventk Aly here wi
a
d ie not iii7
s of their
di liurionment among the
reeipi8nt countries with ,,tuselan help, Lut 1 do not think that we
can take aty particLr comfort from that fact and I don't think
that we ow ase that bueeiee troubles are going to be a positive
help to us. And iertiiUj I do not believe we can afford to let
the masiar; go it alone in the Middle %ast Mere is a threat in
that area d it going unthallenged by us. 1 thine that we've
at to accept the fact that the Russians Are in the Middle Meet
as traders* engineers, adviser*, teehnicians. Their presence
there is inescapable. i don't think inciAeltaLly, that the mere
presence of Soviet technician' is ucti of a threat. The technicdans
in e.grpt, for *ample, keep very much to themselves. May are not
allowed to circulate or to fraternise. guch more disturbing
think, Is the scale an which the missions are now building training
schools for industrial workers, exelanging professors lath asab
verelties, haneing out scholarships to 4rab students. This year
for example, for the first tine there are more flrian students
g to :Ioviet-bloc swamis on scholarships than to the schools
of he entire Free itmrld and if this gees on we nar find one day
that 3yria oeetern-educated middle-olaas has simply disappeared
by attrition and Leen replaced by a Soviet-educlted middle-class.
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*ally" of count, the throat is simply that if
voavr thefi Id of Aid to tho Fussians then some day wo nay
ftd that thoy control a largo and critical sector of tho modern
f the 4rab oountrios.
;otter,Kalischer, have you any comments on this
queeUn or ether kassia is really it throat?
i'ALI3C-4.1tt Tee" I think Winston is risht and Kennon iv wrong.
asked Prosidont 3akarno of Indonesia it hie thought there win,*
tringo attachod to Soviet or American Aid. This was his reply
and i tot Lot's be realistio" *hail wo? Ln a eertain SAWN,
1I $dand All trod* haw* string*. Savoie one country supplies
our tion sorvico with two dredges. That moans our irrigation
servica is tied to that country for spare parts and so on. 9ut if
you mean does American or .-ommunist aid cow with the conditions
of al or tatlitary support tho answer is a flat no." well
L think it io implicit in that *newer that there don't halm to to
suoh c If aid goes from drodges to ammo' to heavy
industry" all BQppltd by or side the recipient nation io
nilly' on that se0 President Sukarno', personal foreign aid
phil000phy ie summed up hy something olso he said to sonebo4
He said he was sure the Russians mould build Indonesia a sports
tacit= for the 1962 As an samosa and then tho Americans would 3ump
at tho chance to Guild them a hot,/ to put the visitors in. And
you know he's right
;AIM tapas, 1CM Hottolet
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threat,
would
The stake in
u ask the qu..tiox in term of the ',wrist
in terns of vhat's et stake
feturea Ale well known that we
have skimmed the ere of our natural resources and: our reserves
are obviously diminieb .ng from dep4o.?day? The Latin Aaerican
continent is our but, our nearest and ult a:y tour vital wares
of supp*y right now. LAlin Ameriea is the cnd bigeest market
tor our goods And its twenty publics_ are our firm friends and
rters in the United Nations, which is, t.rrlbly important
right t this instants te can help these be it shining
examl ej we can help them be AM opportunity for us; an example
to the un loped nations of afriea. and 4Sia that frted04 too offers
sperity and a better one than the Soviets have to offer.
Jrt the other hand if ws lose Lati eric&1 we lose a great deal,
argot t at if the 3ov1.sts wore ever to assert their
tnf1uce on Latin Vmerica American 5earity would be et an end
The, ' t
r.et Leiser.
Howard tion is no
L' non-Soviet Er?pe, except Afl I have indicated
in Ice' . aelly the Luropeans reel a. deal the Ito
t its less of a threat thoughout the world
ft*
we make it appear to be. They sey that the amount of credit
the Soviets loan actually extend Is meager compared to vhat we
0. Aftd that because of the needs of iJusela's own growing
ttlat this is; going to continue to be the case for a long time.
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and th
ropeeneconomists o*rncde that
s lective in pieking out eireconomic targets
the most of thee in propogonda point of view.
Oy and large, the attitude in !rope is that expreesed a couple
of we*kv ogO in Thg 19qApip LARnprOtt, which le a prettd sober and
sensible publication. It ended a piece on Ian economic
ertetration with this comment; "The Soviet eeonLc challenge
Cfttt4deep concern, in the long rot, only if the stern
instrti conomies fail to keep on growing themielv
tor a
foreign aid he very bosic and simple quortiqn is oelng asked
all over thi
and see that
corruption in
Aould we not abanthn the whole idea if it does not wtn friends
'411A
yo d gentlemen have been out of this country
et. me tell you that in the gathering struggle ov
ond I want to pat that qetton to you now
n?ver are. Is there not too much waste and
ti sid? Pees it reAly yield Its any benefits?
for is and Follaais,oan relly get more mileage with le aid to
others than we 4ve7 What do you think of thot? tAnton EUrdett.
d,:rrt ell lioward, as I said, In the three countries
boon talking about there is no American oid pro-srao and there-
for, thereto no corruption think there should be an aid program
tfo*r because otherwise, ve MA:f find that UM eountries have no
Ltcrnatie, no p1e. to torn exzept to ?scow.
Kolieeher.
411 in AlliS e end some
U n forst aid. Therese waste and corruption in the
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United Ste
a
quarter scadal I don't
point is Vat *veil
we ahould stop giving
the United. States Ar ely In: CaMbodia lemre a few minutes up y03 saw
tt large pile of rotting aid equipment tiNe Chinese Communists, ate
nese aid goods and erriug the proceeds to. the Ceibodians.
?coeds in loeal, curreney, they are turniag them over to
bal governors In CaMbodDx for their own local, a14 prO
to, be spent ver e hey see it aed no accounting to
is foreign aid pork barrelligg ls on a soele I
te, But t4e point is: Vat the Chimebe are not
to CeMbodia if some of that money so 1d
going to cut of
to turn uv in the Calbodien eqeivalent of deep freemera or
ts.
SHIM: Dick
BOTTELET: Weli, I tiink even tte vt Peter :as said
uae over-
eormottoa Le Levin 44erioe reac rovortions you could well mil
ei Vssre's a story that the onAy train that really rune ii1 in
Ltth America is te, gravy train. It affects private etarris I
t ayjust as emeh as it does gmverament, sad it does not affect
aid program. Rut la az y cams in Latia Aerie& great grants
Id are not the answer.
t Leiser.
well ecutally Howard as you know, one of the remarkable
esj.eets of our zeige sAL programa in Europe :1,as been that there's been
v1rtti.iy no careuption. Mike Tegoslevie as just one example. We
pick many. We turned over $782 millioo In economic aid to
lava in poet eight years, end there hasn't been a single
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Is
III
1
III
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for a uxury hotel In Beigrode W;i they don't really need,cuid
been better uned. But tee fact remain% that during a veri
trying to break Tito economioelly, ww aept Tito 's country
after all, that %ea whet we set out to ao.
If I oould add one word oere, Howard. Alto
Soviet foreign ald, I would say one thtag - thoot or
don't tiAnt, is any monopo44Gfr1 CIU foreign
We 1Jw* auad out .;ust from seeing wbat's ned In Burme 116,43e
lied up on docas, only to got wet and be useleon. We
.:;een earl re0 macinery on farms in India that couldn't be used
because o farm big enouC to ume it, just some of the outward
yabols of waste ovet foreign aid. There hoz never been ay kind
by tteir perlieteat, by their Sovremenroovlet. I don't
tthktht leo Lato get too alarmed about a little veste,
it's good mils to .-,ear about vice elsewhere.
SMITH :
you
o:A-4 z
mode, We-
Well, In the few moment-, remeining to tie 1' tet
te an economic policy or the United StM*c that w .11
Rdble Wr. Now, beeiJog la mind the crittion. you
d You sUBBest tat wo 40 that we're oot nov dOlne
Daniel.. Schorr,. would you start,
SCHORR: Well sir, '11 write you a
,74t-pe because I briog
of urzy after having lived a c lole of yea:o ftaala
rg exletrienced their climate. 4e owl' tt-ts a ruble Jeer,
i ts & rdble ear let's use same of the geoheaiseo Of mar. 1 would
at we forma Mod, not we, but the United State form some
dioatioglamkr, perraps called the Foreign Boonomi?
tiog Board built oolong tiIloes of the War Production Board
of World War Tye, And that this body be given the job of coordinating
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all ign aid projects? all these of the t and also enlisting
privaLte indnetryi bringing it in to do the jeb that cannot be done by
government. I mould suggest that if necessary- that me give these indus
tries something like coat-plus contract to go into tho underdeveloped
areas and do the kind of work that couldeft be done by inametrIrtwommo
there would be no incentives I speek of incentive because- in our society
because it is- e democratic. oc1*ty1 it requires incentive. And 1 any
the mcet profound problem me face is to find the mechanism
Wit the, impact end the concentration on. target- areas
by c means that the RUSSUAS today get by regimentation.-
think it can be dame and I think it fumiamentally important
fcr that kind of thiAg.nnet be done.
durdett at do you think about %hie
Set la
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great big ?crflnsti
throw, sway many of
.ry to begin all over
ther I very hippy with what
ion. It doesn't seem to be
tion or that what it
gvrtnt agency. I think
old idesi about how to edeinieter
am. And Its going on the
assumption that cmr atm has to be to find alley of extending help that
is so flexible and so presentable to foreilphftentries that we eau
b.Egypt for example* OTO4 when we don't liks lesser and can go on
b.iping d?pite the up* mod downs of politica I **June that we either
hsve to do tt*or that ve have to abandon the VW to the RUSSIOMX,
of r ideas spring from Marshall Plan experiences -which were
*U rit. Those ideas were all right for Europe but for the parts
of the w'1d thatwe've been discussing* they Inly don't fill the
bLii. Tb f thing I think* is that evonomio aid meet? be detached
from politic far as possible. The administering of aid ought to be
t*ken out of the hands of policy-making bodies and as far as possihde
out of the field of adminietration, orients and eharity should go
Thtra should be new and flexible 1oai and credit arrangements
interest* We should give private ent.rpri.e a way to oeibat the
Soviet drive and government aboul4make it morthuhile for private
enterprise to do so
That mmy see like a rather eztsv*gant idea, *t the West
have done exactly thet by quite a
are the only ones in the Middle East who are now providing a check to
the t offensive there.. The German operations in Egypt* which he's
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4
a
th
lor use
Mt Dan, I think you deserve a ten.second rebuttal to that answers
SOttts In tan seconds, I mould only *ay, Winston, that I don't think
me ere in any basic disagreements I 'mould only say that I dont think
that coordination is the opposite of flazibility. And think that
what has been done in went aernany can be done in our may too providing
incentives to private industry
Stant Peter galleohers Can you holp ii rtte a policy nes7
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KA
think we've set to attract young American engineers
in.the-foild men, into foreign aid service, perhaps through
holarshipe with the first two years after graduation going
overseas. All through ketheast Asia, I heard one univeraal
American to-Chalets= mere too high priced, lived too high, while
mould go anywhere, thsy didn't *Ind the neeqpitooe. Well
one private American technician I know, vas getting two
a month Psi sure as worth it but him oontrect
Uovernment to give him commensurate housing
cia1 *aid,*ion sorry, but I *** afraid President Sukarno
hsv* to mote out of Merdeka Paseo* We don't have commensurate
dollars a month* A Mirenve asked me ghat had
pd t? th Ai'tanmixelonery .pirit. Be said that Dr, Gordon Sea.
goon Seagraves mho is 111 up in the :Shan Mille with
in good will to the United States about thirty
Milton do11s, at. nt aid prices* I don't think that ell the high
vei piamt *111 beat the Commentate in the Milne tar unless we can
go into the field, at the level of the pecple
eyz trying to sip1 and slag it out ulth their gloves and their air
HOTTM Ts The first thing to do is clean out a lot of cobwebs
looking at aouth America in terms of Carmen Mirenda, rhumba rhythm and
banana revolutions* Pert,r years from now, Latin America mill have twice
the population of the United states acid at least twice the natural
sources* Its growinb pains are terrible but we got to share then
in cur mutual iftterest*
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'D) s
s at le
we're dealing itba
got to
proud and sensitive as We ain't
them but we still enjoy nervous
Latin Americana ere
we make the new world
timid. Welve always
the obis* Look at
?Man
?1, iti high time to write thm rulsefor
Hemisphere. he nine tan
scathe et a time in W?sahingt,
lieb. Washington is the pi&cu
blame rests When the leen la turned
and it needn't be a new oneat all
roads transport power, fee
put responsibility in Latin American
support it with our loam grants in every serious ;rliwet
no me ter how unorthodox it may be, whether it be national, private or
ination of both. Of course there'd be a riak. drat it would get
*V&7 from the eld Park.aserieen bromides and for the first time rally
lea in a prograa of common actions various would benefit.
rcr us that we have five million unemployed hero at bows
Americane need every dangle nsehine be eau build Let
tr. Iso b a vast Increase in ezehangee among students, professors,
ngineers sponsored by government and the big
d*t1on s4 by pristm industry because the Latin Assericens are as
gmorent of le as we are of them.
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33
we've ne-
*WO to fit the
back ea that
t oX the wee
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WITH Well, I'm going
to sun up from his side
.erexel well one fundamental thing we can do Howard obviously, la
to enlist our more prosperous European allies in a, joint program of
eounter-penotration in the uncommitted countries. Winston has telked
*bout it the West Lemma= are doing, but actually they've just begun
be their government subsidised industrial credits for kgypt. They can
do a lot more, end I've been told by their *Metals that they een be
persuaded to do a lot mere in concert with us. We don't ned anew
Marshall Plan of American gifts. We do need and could get a new Atlantic
lien= plan of generous but intelligently directed long term ereditm
Wells gentlemen, I would like to try to sueserise acne of the
thin? you've said. You've painted a strange picture* We've been
by Russia to a contest of economics in which all the Main
basic adeantages are on our side we have the hugest production for use
in thie contest of any nation on eerth and of may nation in history.
And despite Sputnik our geberal know-how to cenvey to *there is itill
undoubtedly the world's best. But our advantages, you say, are being
smelled out by new things Burdett and Rottolet suggest that in the
middle test mad Latin America it is simple default by us. were barely
working uhile the Russians are busily ingratiatIng themeless with nem
proset1 The wuseians are dealing in loam, far the in part which
$o not offend sensitive national pride of emu =time while we de*
mainly in aid which bears the stigma of charity. Our teebnialsna nest
live and work oo *high managerial level in thaw countries while
Russia's tend to -wick an sem% more modest seals uhere the people
happen to be, And finally, the Bunts= sinplydranstise their effort
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rrn (iVT)1
mar th.n im do.
rDest Leiser made LI
military
vhich sounds contradictory
is. Re saidl we should not try to discourage our
from increasing their trade with Russia in non-
needed,
amp'
situation, X have two to add Zx this
hare to be aroused to the urgent necessity of this effert which the
American people are not aroused to at the present time. Congress it
eeems to me, most be made to valise that the effort is a necessary and
regular part of our national lite. We should not have to debate foreign
*id and reciprocal trade as strange, new, controversieleroposals each
yew. They mit become ocemenplaces, regular, natural 'things to do
Debate on than should not be ae to whether they should be done; it
should be limited to that is the moat affective way to do them. America
has risen to maey unexpected world rsaponsibilities in the past decade
nd we have becalm accustomed to even when we start licked
ut to this challenge we will eartainlytave to rise mach taster than
wetye been doing at present or we apy lope the Ruble W.
Good evening
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