CONGRESSIONAL RECORD--SENATE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000500020001-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 15, 2016
• Document Release Date: February 18, 2004
• Sequence Number: 1
• Publication Date: January 1, 1962
• Content Type: OPEN

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1962 CONGRESSIONAL RECORD - SENATE
that hs-i$ against the trend of municipali-
ties to ask the Federal Government to cure
all the ills of the cities. It is unlikely,
however, that the Kennedy administration
would settle for an advisory-only type De-
partment, and if Federal money is channeled
to the cities, controls will follow.
A Federal Housing and Urban Affairs post
more than likely would result in a further
dilution of local government powers and
create a more highly centralized Federal
Government, which from our point of view is
too centralized already.
GOVERNMENTAL FISCAL POLICIES
Mr. DWORSHAK. Mr. President, we
are continually receiving literally hun-
dreds of requests for new money spend-
ing programs in this body each day from
various groups, both within and without
our Nation's borders. Today I invite the
attention of my colleagues to a request of
a different nature-a call for more fiscal
responsibility and soundness.
While it would be a pleasure to be able
to approve every fund request made of
us, I am certain that most of us agree
that spending our Government into
bankruptcy would not only soon make
impossible the granting of any fund re-
quests, but might actually cause can-
cellation of some programs now operat-
ing. Thus it is essential that all Ameri-
cans be made aware of the fiscal limita-
tions of their Government; and I feel
that groups like the Associated Taxpay-
ers of Idaho are doing an outstanding
job in face of many obstacles.
I ask unanimous consent that the news
release and policy statement of the As-
sociated Taxpayers of Idaho be printed
at this point in the RECORD as a part of
my remarks.
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows: -
The Associated Taxpayers of Idaho de-
clared today that only a fiscally responsible
Congress, determined to evaluate the Gov-
ernment's financial requirements on the
basis of reasonable, but tough, spending
priorities, could insure that the new Federal
budget just submitted by President Kennedy
would remain in balance.
The new budget for the fiscal year 1963,
which begins next July 1, forecasts net bud-
get receipts in that fiscal year will total $93
billion. It estimates that Federal expendi-
tures (exclusive of trust fund expenditures
for highway construction, social security,
etc.) will total $92,537,000,000, and that there
will be a surplus of $463 million.
Noting that the revenue and spending
levels must be predicted 18 months in ad-
vance of the fiscal yearend, Max Yost, execu-
tive manager, spokesman for the statewide
citizen taxpayer organization, cautioned that
the fiscal budgetary result will depend in
large measure upon maintenance of a healthy
economy, and upon the fiscal actions of the
session of Congress just under way.
"Citizens of Idaho have no small stake in
the new budget," Yost said. "Idaho's share
of the $92.5 billion total of estimated Federal
expenditures will amount to $240,596,200."
(This estimate is based upon a formula for
allocating the Federal tax burden among the
States, developed by the tax foundation, a
national research and citizen education
agency.)
"There is a need for Congress to apply stern
priorities in considering Federal spending
programs," the statement continued. "Ex-
915
penditures for protection purposes-defense, government. Further encroachment by gov-
International affairs, and related national ernment at all levels can only lead to cur-
security programs-will total $55,686,000,000 tailment and destruction of personal liber-
under this new budget. These programs will ties, individual incentive, and our productive
cost Idaho's taxpayers an estimated $144,- capitalistic system."
783,600. Our share of the $9,398,000,000 bud-
geted for interest on our huge national debt
will amount to another $24,434,800. REPORT ON SHIPMENTS OF STRA-
"The remainder of the estimated spending TEGIC GOODS TO THE COMMU-
total-$27,797,000,000-is for domestic civil NIST BLOC
benefit programs and general government
activities. Idaho's share of these expends- Mr. KEATING. Mr. President, during
tures is an estimated $72,272,200. It is sig-
nificant that spending for these nondefense
programs has been steadily rising, even in
these times of international tensions and
crises.
"The implications are clear, Insuring the
balanced budget just submitted by President
Kennedy-a budget in precarious balance at
best-can only be achieved by a fiscally re-
sponsible Congress, supported by our citi-
zens, which is determined to evaluate the
Government's financial requirements on the
basis of reasonable, but tough, spending
priorities-providing for the essentials, post-
poning the merely desirable, and reject-
ing nonessential or unsound spending
programs."
The following statement of governmental
fiscal policies was adopted at the associa-
tion's 15th annual meeting, December 13,
1961. The association will follow this policy
vigorously during 1962 in its work with
local, State, and Federal levels of govern-
ment:
"STATEMENT ON GOVERNMENTAL FISCAL POLICIES
"Government today is so big and compli-
cated that its operations demand the ap-
plication of the best and most thorough
fiscal controls. The Associated Taxpayers
of Idaho, recognizing the unprecedented ex-
pansion of government and its correspond-
ing tax impact strongly recommends the
following:
"1. A dedication of fiscal responsibility at
all levels of government to provide; an an-
nual budget review which will relate re-
ceipts and expenditures; the elimination of
deficit financing at the Federal level, ex-
cept in .times of grave emergency; and the
elimination of expenditures outside the
budget through trust funds and other de-
vices which bypass traditional appropria-
tion procedures.
"2. That the facts be given to the people
of the entire problem of government fi-
nancing, particularly the projection of fu-
ture costs of new and contemplated pro-
grams, to give the taxpayers a realistic
price tag of the function or proposals.
"3. That the operation of State and local
governments be stre gthened, decreasing the
reliance on so-called grant-in-aid programs,
and that the demands to match Federal
funds be decreased, thus restoring the bal-
ance of power among the levels of govern-
ment.
"4. That equity be the guiding principle
in levying of taxes of all levels of govern-
ment.
"5. That the emphasis on productive jobs
is a critical challenge of the 1960's and all
phases of government should be directed
accordingly.
"The Associated Taxpayers of Idaho vigi-
lantly demand that mounting military
budgets, caused by the critical interna-
tional situation, be closely scrutinized and
that any increases that may be deemed nec-
essary be' offset by an equitable control of
domestic civilian spending.
"The Associated Taxpayers of Idaho
strongly disagrees with the expressed theory
that public spending should be enlarged in
relation to private spending. Our Ameri-
can system of free enterprise has flourished
under the concept of private ownership of
property, individual initiative, and limited
the congressional recess the Internal Se-
curity Subcommittee had under study
the operations and effectiveness of U.S.
export controls on shipments of strategic
goods to the Sino-Soviet bloc. For this
purpose partly in conjunction with Sen-
ator DODD and staff members, I spent
considerable time discussing with U.S.
Embassy officials and some representa-
tives of other countries the problems
confronting us in carrying out existing
arrangements and programs. Informa-
tion obtained as a result of these con-
versations raises serious questions with
regard to whether our present control
programs are working effectively.
In my view, in the present state of
world affairs, it would be inexcusably
shortsighted for the United States or
any free-world country to cooperate in
building up the military or economic
strength of the Communist bloc. in the
light of the continued and, at times, in-
creasing belligerence of the Soviets and
their Chinese cohorts, it is obvious that
every increase in Communist strength
increases the threat to our own security.
I just cannot fathom the apparent will-
ingness of some members of the free-
world community to contribute valuable
equipment and know-how to the Reds
which may be used against all of us.
In Berlin, the United States, French,
and British soldiers are functioning'un-
der wartime alert conditions just a few
yards from a powerfully armed poten-
tial enemy. We have separated families,
interrupted schooling, and imposed other
severe hardships on tens of thousands of
American reservists to bolster our Berlin
garrison and our general combat readi-
ness. We have given repeated assur-
ances of our readiness to fight, if neces-
sary, to preserve Berlin's freedom. In
Asia, the fighting began many years ago
and smolders even at this moment in
Laos and Vietnam where we today have
casualty lists.
In the face of this military crisis,
some of our allies persist in sending
planes, electronic equipment and other
strategic items to those who have vowed
to bury us. In a shocking display of a
double standard, nations seemingly ready
to ask the ultimate sacrifice from their
young men are unwilling to. interfere
with profitable trade opportunities with
the adversary. I believe there would be
an overwhelming outcry of indignation
if-all the people were fully aware of the
facts. No one can possibly justify a
business-as-usual attitude at a time of
such grave danger.
No one should underrate the military
or economic capabilities of the Sino-
Soviet bloc. No one can deny their
ability, without any help from the West,
to develop and maintain a tremendous
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CONGRESSIONAL RECORD - SENATE January 29
military machine and an increasingly
productive economy. There is danger,
however, in overrating, as well as in
underrating, the potential foe. Despite
the spectacular Soviet scientific achieve-
ments in the past decade, every expert
I have consulted agrees that the Com-
munists crave our technology and prod-
ucts and can offer very little of value to
the West in exchange. Western trade
with the bloc is not a balanced proposi-
tion in which the West gets as much as
it gives. More typically, it is a question
of exchanging machine tools for feathers
and electronic equipment for furs. It is
-incredible that despite the economic ad-
vantages of the West, the Reds have
been able to set conditions in trade
which give them every possible benefit
in the exchange.
The Reds are strong, but their efforts
surreptitiously, as well as openly, to ob-
tain a host of special items from the
United States and our allies give every
evidence that even they believe that we
are stronger. In any event, when your
opponent is strong to begin with, it is
suicidal to help make him stronger if
you can avoid it.
Whatever shortcomings there may be
in U.S. programs, it must be acknowl-
edged that the United States has done
more than any of our allies in attempt-
ing to curb the flow of strategic mate-
rials to the Communist bloc. Respon-
sibility for the present situation does
not lie primarily in U.S. policies, but
in the failure of our allies to cooperate
fully. For this reason I am dismayed
by reports that a preinaugural Presi-
dential task force under now Under Sec-
retary of State Ball has recommended a
virtual scrapping of the existing embargo
on exports of strategic materials to na-
tions of the bloc. I cannot believe that
either the President or the Congress will
accept this recommendation. If any-
thing is to be scrapped, I hope it will be
this task force report and not continued
American efforts to prevent the Com-
munists from building up their war po-
tential and industrial power with our
help.
In my opinion, the free world has
missed an opportunity to utilize trade as
a powerful weapon on our side of the
struggle. Our trade advantage should be
employed to the maximum extent pos-
sible to win concessions from the bloc
and to further Western objectives. Cer-
tainly nations willing to fight should be
willing also to take the initiative in -pro-
moting an economic counteroffensive
against the Communists. If this in-
volves some sacrifice of profits or other
temporary benefits, it is a price we have
to pay to help assure the ultimate victory
of freedom over communism. Further-
more, it is not too much to expect such
sacrifices when we are asking thousands
of young men and women to be ready to
sacrifice their very lives to preserve the
outposts of freedom throughout the
world.
This is no time to talk about scrapping
export controls on shipments to the bloc.
On the contrary, we should be consider-
ing ways of making these controls more
effective. Getting the closer cooperation
of our allies must be our No. 1 objective
in this regard.
During our trip, we conferred with of-
ficials in the United Kingdom, France,
West Germany, Belgium, the Nether-
lands, . Austria, Italy, Switzerland, and
Israel. The situation varies in each of
these countries, but I would like to high-
light briefly some of the conditions we
found:
CURRENT BLOC PROCUREMENT FROM THE WEST
About 25 percent of the commerce of
the Communist-bloc nations is with
countries outside the bloc. All of this
trade is carefully planned and regulated
by state agencies within the bloc. In the
U.S.S.R. all foreign commerce is under
the jurisdiction of the Minister of For-
eign Trade, who is also a member of the
Central Committee of the Communist
Party. Bloc trade generally is coordi-
nated by the Council for Mutual Eco-
nomic Assistance, which meets in
Moscow weekly. Foreign trade is skill-
fully planned by the bloc countries to
enable them to reap the greatest possible
advantage out of every transaction.
Such trade is related closely to Soviet
political and military objectives, and
ordinary commercial considerations
sometimes are completely ignored.
The long-range objective of the Com-
munists naturally is to develop economic
self-sufficiency in order to avoid any de-
pendence on the West. Nevertheless,
they are ready to utilize as much ad-
vanced Western technology and supplies
as we are willing to exchange for sur-
plus bloc goods. Almost 80 percent of
all Sino-Soviet-bloc trade with nonbloc
nations is with the industrial countries
of the West, the principal bloc imports
being manufactured goods and machin-
ery and equipment. The principal bloc
exports to the West, in contrast, are raw
materials, food, beverages, tobacfo, fats,
and oils.
In recent months bloc countries have
procured from the West such items as
a 525,000-volt transformer, electronic
equipment for four reversible cold roll-
ing mills, computers, 50,000-foot altime-
ters, two mass spectrometers for use in
nuclear and electronic research, instru-
mentation and control equipment for an
oil refinery, electrical machinery for jet
aircraft, high voltage testing equipment,
a $12.6 million hydropower station for
a plant on the Soviet-Norwegian border,
a sheet metal press, complete equipment
for a plant in Rumania to produce 100
trucks per month, equipment for an au-
tomated plant for manufacture of dielec-
tric cardboard-used in insulating wires
and cables-an aluminum rolling mill,
a plant to produce railway wheels and
allied products, complete equipment for
a cellulose plant, precision machine
tools, a semichemical pulp plant, a plant
producing hydrogen cyanide, a sodium
hydroxide plant, 50,000 tons of synthetic
rubber, a complete asphalt plant, a com-
plete nylon plant, a highly automated
polystyrene plant, a polyethylene plant
worth over $30 million, a nylon tire cord
plant, 3 large urea plants, optical lens
grinders, papermaking machinery, a
5,500-ton lifting capacity floating dock,
a complete cement plant with a daily
output of 1,800 tons, almost 35 vessels
including more than 15 tankers, diesel
engines, earthmoving machinery, over
150 excavators, hundreds of tractors,
almost a thousand railroad cars, copper
rods, steel plates, 240,000 tons of steel
pipeline, natural gas pipeline, precision
tubing, ball bearings, and 500 tons of
lacquered tinplate.
All of these transactions and dozens
of others occurred within a period of 18
months, and similar procurement con-
tinues to this very moment at a rate of
over a billion dollars a year. There is
no doubt of the importance of such
items in building up sectors of the Sino-
Soviet economy. Their contribution to
the welfare of the bloc has been con-
ceded even by Khrushchev. Unquestion-
ably, over a period of years the NATO
countries have made a substantial con-
tribution to Communist growth and
power by being major suppliers of ad-
vanced technology and machinery to
the Sino-Soviet bloc.
There are no signs of a change in this
situation. In recent weeks, for example,
the United Kingdom has concluded an
agreement for the sale of six Vicker's
Viscount planes to Red China. These
planes can easily be used to transport
Communist troops to Vietnam, Laos,
Korea, and other hot spots. Moreover,
the planes are equipped with radar and
navigational equipment, which is on the
COCOM strategic list for embargo to the
Sino-Soviet bloc. COCOM-the Co-
ordinating Committee for International
Controls-is an international agency in
which we participate with our allies
which coordinates and enforces unani-
mously agreed upon controls on ship-
ments to Communist countries.
I have urged the Department of State
to take whatever steps are possible to
prevent these Viscounts from ever being
delivered to Communist China, and the
Department has made strong objections
to the British. The United Kingdom,
however, appears not only to be deter-
mined to fulfill this order, but to fill
additional Red orders for similar prod-
ucts. This attitude on the part of our
principal NATO ally undermines the
whole strategic control system and is
bound to encourage similar deals by
other countries.
If this international control system of
trade with the Sino-Soviet bloc col-
lapses, the Reds will have scored a
major victory. A unilateral U.S. em-
bargo can have only a limited impact,
and it is simply inequitable to impose
the whole burden on American industry
and workers. There is a situation in
my own State now in which an Ameri-
can-based subsidiary of an interna-
tional company has been denied an ex-
port license for the shipment of paper-
making machinery to the U.S.S.R., even
though the same equipment can be made
and shipped by other foreign companies
with impunity. The American concern,
moreover, is located in an area of sub-
stantial unemployment, which makes
the burden even more severe. I can well
understand the feeling on the part of
the company and its employees that the
denial of an export license under such
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1962 CONGRESSIONAL RECORD - SENATE
circun'rrtances makes them pay a heavy
price with little return to U.S. interests.
A unilateral control system also raises
tremendous enforcement problems, even
with regard to products on which the
United States may have a substantial
monopoly. Once the goods leave the
United States, it is practically impossible
for us to control their use or transship-
ment without cooperation from other
countries. There have been thousands
of cases of diversion since our control
machinery was set up in 1948, and while
the critical areas may change, this trend
continues unabated to this day. Some
countries, including our closest allies,
actually resent any effort to enforce our
unilateral controls against transship-
ment of U.S.-origin goods as interference
in their internal affairs, and with some
exceptions none will give us any formal
cooperation.
'These difficulties are no justification
for authorizing the sale to the Sino-
Soviet bloc of any U.S. goods which our
experts rate strategically important.
Our objective instead must be to induce:
our allies to accept similar controls and.
narrow the differences between the
United States' positive list and the in-
ternational list administered by COCOM,
This could perhaps best be done by as-
signing the control function to NATO
while continuing to enlist the participa-
tion of non-NATO countries, such as
Japan, which is a member of COCOM.
Such a move would serve to emphasize
the close relationship between the eco-?
nomic and military aspects of the cold
war and perhaps would encourage
greater exploitation of our economic ad-
vantages in achieving our objectives.
TRADE TACTICS IN GERMANY
West Germany offers a concrete ex.
ample of the ability of the West to em-
ploy economic measures to advantage.
In 1960, Soviet East German agents be..
gan interfering with access to Berlin
of West German civilians, contrary to
Four Power agreements on Berlin. As
a result, the West Berlin administrator
of the Interzonal Trade Agreement,
which regulates trade between West Ber-
lin and East Germany, gave notice that
the agreement would be terminated by
December 31, 1960. This was equivalent
to saying that there would be an em-
bargo on trade with East Germany un-
less the harassment of civilian traffic to
West Berlin from the Federal Republic
ceased.
The result of this announcement was
prompt and dramatic. The harassment
did cease, and there apparently have
been no instances of interference by the
Soviets and their East German agents
917
This experience also raises a question Furthermore, we cannot rely on our
as to why similar measures were not allies to enforce unilateral U.S. policies
taken when the Soviets erected their with regard to Cuba any more than they
prison wall around East Berlin. This enforce unilateral U.S. controls in other
hideous structure-a monument to the areas of the world such as Red China.
weakness and barbarism of the Commu- As I have noted, we get less than full co-
nists-was a much more drastic in- operation under such circumstances,
fringement of Four Power agreements since the other countries take the posi-
on access to West Berlin than were the tion that they are under no obligation
provocations in 1960. An economic to enforce U.S. laws within their terri-
squeeze in 1961 similar to that employed tory. Adding Cuba to the COCOM list,
with such effectiveness in 1960 might on the other hand, would commit each
have had tremendous impact. Doubt is COCOM country to a policy of at least
sometimes expressed as to whether the avoiding shipments and transshipments
Soviets are convinced of our determina- of strategic goods to this Red outpost in
tion to fight for Berlin if necessary de- the Western Hemisphere.
spite the solemn pledges which have
been made. Maybe the Soviets are
skeptical about the willingness of the
West to risk a military showdown when
it still appears to be unwilling to risk
a much less perilous economic show-
down. Of course, we are ready to fight
for Western rights in Berlin, but how
can we possibly justify sending troops
to battle before we have exploited to the
full the possiblities of achieving our
goals by an economic squeeze on the
bloc?
It is my strong conviction that a
Western economic initiative would im-
prove prospects for a favorable settle-
ment of differences with the Soviets.
We should have learned by now from
a dozen examples that firmness is the
most constructive attitude in dealing
with the Communists. The Communists
are most certainly waging economic
warfare against the West. An economic
counteroffensive against them could pay
richly in the allied effort to advance
peace with freedom not only in Berlin
but throughout the world.
CONTROLS ON CUBA
Cuba, on which the United States has
imposed a total embargo, is not treated
as a Communist bloc country by
COCOM. This means that our allies are
free to fill any gaps in Cuban imports
which may result from the unilateral
U.S. embargo.
There is no longer any doubt of Cuba's
complete fidelity to communism, and its
formal recognition as a bloc country by
COCOM should certainly be pressed by
the United States. Information gath-
ered during my trip suggests that no
such effort has yet been made by the
Department of State. It is difficult to
understand the Department's reluctance
to enlist the cooperation of the COCOM
countries in our efforts to cut off strate-
gic trade with this Communist satellite
now that its status is recognized by
everyone and its adherence to commu-
nism has been conceded by Castro
MOBILIZING PUBLIC OPINION
These observations certainly raise
serious questions about the willingness
of our allies to carry out necessary meas-
ures to effectively regulate trade with the
bloc. There should be no misunder-
standing, however, about the extent of
free world solidarity in the struggle
against tyranny. The nations of the
free world are united in their funda-
mental objectives, and I would not want
anything I have said to suggest that
the Western alliance is weak or divided.
I have been discussing only one as-
pect of the broad and multifaceted free
world alliance. I am convinced that on
this question of trade with the bloc we
have not achieved the cooperation of our
allies which the situation justifies. This
is not because those with whom we have
joined together to defend freedom are
soft on communism or will be unwilling
to stand with us when our determination
is put to the test.
It is not a difference in objectives
that is at the root of the problem.
The difficulties arise out of less lofty con-
siderations. To put the matter directly,
most of these difficulties arise out of the
unwillingness of the governments in-
volved to deny to private economic inter-
ests profitable opportunities for trade
with the bloc. They appear to be un-
usually vulnerable to potent domestic
pressure and most fearful,of the domes-
tic political repercussions of any effort
to join in a more effective economic
squeeze against the Communist bloc.
Personally, I find it hard to believe
that any people who cherish freedom
would accept the present conditions if
they were fully aware of the implica-
tions. Even Switzerland, which avoided
the ravages of both World Wars and
scrupulously maintains its neutrality to
this day, is the scene of a genuine citi-
zens' movement to curb trade with the
East. In recent months signs have ap-
peared in store windows throughout
Switzerland reading "No More Trade
With the East. In this store no com-
------..----
that date. It is obvious that the Soviets It is not enough to ask our allies to modities are sold which were manufac-
were more deeply concerned about the prevent evasion of the U.S. embargo. tured behind the Iron Curtain." In one
repercussions on East Germany of a They should be expected to join forces town in Switzerland, Thun, the signs were.
halt in goods from-the.West than they with us against trade in strategic goods decorated with drawings by teenagers
were in continuing to interfere with ac- with this puppet state just as we have all after hearing the nature of communism
cess to West Berlin from the Federal joined together in barring such trade to explained to them in the schools. Ac-
Republic. This experience illustrates other bloc countries. The fact that Cuba cording to reports which have appeared
better than any theoretical arguments or in the Swiss press, this boycott, though
statistical tables the importance of West- is so close to the shores of the United only recently started, has shown remark-
ern goods to the bloc and the possibil:i- States is no reason for it to be omitted able success.
ties of exploiting our trade advantage from the international control system the The United States must do its best to
to protect and advance free world allies have imposed upon every other convince not only allied officials, but the
rights. satellite state. people of the free world of the dangers
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CONGRESSIONAL RECORD -SENATE January 29
inherent in present bloc trade policies
and the advantages to the West of em-
ploying trade, as a cold war weapon.
Instead, the United States has allowed
these problems to become shrouded in
secrecy and most people simply are un-
aware of the functions of organizations
like COCOM and the dangers to its ef-
fectiveness posed by such transactions
as the United Kingdom's sale of Vis-
counts to the Red Chinese. Some of
these issues involve military and other
security matters and must, of course, be
classified. But we have cooperated in
imposing a veil of secrecy on many
transactions not for security reasons but
simply to avoid embarrassment to na-
tions willing to make questionable deals
with the Reds.
This attitufle effectively prevents any
mobilization of public opinion against
such transactions. Perhaps if U.S. dip-
lomats showed less concern for the sen-
sitivities of our allies, our allies would
show more concern for our own sensitiv-
ities, and in the process, all of us would
be more apt to pursue the course dic-
tated by principle rather than expedi-
ency. I may be overly optimistic about
the reaction of the free world com-
munity to a full and frank disclosure of
the facts, but the countries of the world,
committed to free institutions, really
have no choice. Free people have to be
told the truth. There is no other way
of preparing them for the sacrifices
which they may be called upon to mak
to perserve their freedom. I
ALASKA'S POWER NEEDS
Mr, GRUENING. Mr. President,
Alaska, which has had the benefit of
only one Federal hydro power project
which was authorized some 15 years ago
and supplies the metropolis of Anchor-
age with electric current as well as the
two neighboring REA cooperatives, the
Chugach and the Matanuska, will soon
be running short of power. The prob-
lems and needs of west-central Alaska,
which is also the so-called railbelt area,
have been the subject of a series of ar-
ticles published in the Fairbanks News-
Miner. I have presented the first four
of these articles in the Appendix of the
CONGRESSIONAL RECORD. I ask unanimous
consent that the fifth article be inserted
in the RECORD at this point.
There being no objection, the article
was ordered to be printed in the RECOR>,
as follows:
MINE-MOUTH
POWER STUDY AUTHORIZED 13Y
USIBELLI
(By Paul Lien)
to make a study for the purpose of construct-
ing a mine-mouth powerplant at Usibelli coal
mines on Healy Creek between the towns of
Healy and Suntrana in the Alaska railbelt
area.
Two sizes of units were presented; namely,
22,000-kilowatt and 33,000-kilowatt plants.
Unit costs of energy of the 22,000-kilowatt
plant were expected to be 11.07 mills per
kilowatt-hour bus bar (bus bar is a con-
ductor carrying electric current) and would
be delivered to Fairbanks for 13.07 mills per
kilowatt-hour.
The unit costs of energy of the 33,000-
kilowatt plant are expected to be 10.39 mills
per kilowatt-hour and 12.39 mills per kilo-
watt-hour delivered to Fairbanks.
The Parsons-Stefano report further stated
that projected kilowatt requirements from
recent studies by the Federal Power Com-
mission and other agencies for the Greater
Fairbanks area indicated the growth rate
will require an additional 40,000 to 50,000
kilowatts to be delivered by 1970.
PROJECTED INCREASE
This was conservatively based on a pro-
jected 10 percent per year rate of increase
in power consumption. Historical energy
sales for the previous 8-year period were
said to substantiate this.
No consideration was given in the report
to the projected increased requirements need
in the areas presently supplied by Golden
Valley Electric Association outside the
greater Fairbanks area. It was conceived
that this demand could be even more.
Accelerated load growth rapidly develop-
ing in the Greater Fairbanks area, combined
with the extension of power to the adjacent
areas shows that a shortage will develop
unless increased supply is provided, accord-
ing to the Parsons-Stefano study. They said
the problem was further aggravated by the
fact that much of the present generating
equipment has an increasingly high oper-
ating and maintenance cost and is rapidly
approaching complete obsolescence and re-
tirement.
LOW COST
In conclusion the Parsons-Stefano report
stated the mine plant at Healy was feasible
as a low cost source of power for supplying
the Fairbanks area. It further concluded
that it would be competitive with any known
source of power likely to be proposed as an
interim supply, pending developments such
as the Rampart Dam project, or similar
large hydroelectric projects producing very
low cost power.
It was recommended that a further study
be made so financing can be secured and
action taken without delay.
Estimated cost of the 22,000-kilowatt plant
was estimated to be $5,600,000, and the
33,000-kilowatt unit $7,400,000.
Ten years was given to amortize the loan.
If a 20-year amortization period was set
up and Rural Electric Administration funds
used costs to the consumer would be lower.
Power from the 22,000-kilowatt plant
would be delivered in Fairbanks for 10.34
mills per kilowatt-hour, and from the 33,000-
kilowatt plant for 10 mills per kilowatt-hour.
Working toward a common goal to relieve
the power shortage in Alaska, towns along
the railbelt have gone together to form a
power pool for the purpose of studying this
problem and to find a solution.
Hydroelectric plants have been suggested
at both Rampart and Devil Canyon, but they
are long range projects, and will take many
years to build.
In an effort to get quicker interim power,
badly needed, focus was brought to bear
on using mine mouth steamplants, which
could possibly provide a reasonable interim
source of power.
Usibelli Mining Co., Inc. of Fairbanks?
authorized Parsons-Stefano, a joint venture,
FARMERS-REAL HEROES IN
FIGHTING INFLATION
Mr. PROXMIRE. Mr. President, it is
my understanding that in a few days the
President of the United States will send
to Congress his farm message, asking for
a substantially changed farm program.
The position of the farm worker with
respect to the rest of the economy and
society has been badly misunderstood by
much of the public and badly distorted
by the Nation's press.
I bring these points up because yes-
terday the New York Times revealed that
the price index, the cost of living, had in-
creased one-half of 1 percent during
1961.
This was the smallest increase in the
price level since 1955. Prices were as
nearly stable as they have been at any
time during the past 6 years.
Any analysis of what happened to
prices over, the past year discloses, in
my judgment, that the real hero of price
stability is the farmer. The fact is that
last year every major component of the
cost-of-living index other than food
increased-most of them substantially.
For example, medical care increased by
almost three percent. Reading and
recreation increased 21/2 percent. Ap-
parel, transportation, housing-all of
these elements in the cost of living-in-
creased. But the cost of food declined.
It declined almost 1 percent-0.8 per-
cent. The reason for the drop in the
cost of food is, of course, that the farmer
is doing a more efficient and productive
job than he has done before. The farmer
has consistently, over the last 15 years,
improved his efficiency and productivity
more rapidly than has any other element
of American society. This lower cost of
production of food last year was the
prime element in maintaining stable
prices.
The fact is that we American consum-
ers are better fed at a lower real cost
than ever before. We talk about the fact
that prices for food have over the past
30 years increased. All prices have in-
creased in this generation. But when we
recognize how much wages have in-
creased, we can see, I think, how the
farmer and his efficiency have benefited
the economy.
One hour's factory work buys 83 per-
cent more round steak, 120 percent more
milk, 138 percent more oranges, or 169
percent more bacon than in 1929.
In the past 30 years we have had this
real increase in the living standards of
Americans because of the great strides in
productivity and efficiency by American
farmers. Yet it is an unfortunate fact
that the incomes and living standards of
farmers have not kept pace with other
sectors of our prosperous economy.
Mr. SYMINGTON. Mr. President,
will the Senator from Wisconsin yield?
Mr. PROXMIRE. I yield.
Mr. SYMINGTON. I commend the
able senator from Wisconsin for making
his statement today. The farmer is al-
ways the butt of criticism. I noticed the
other day that a particular stockpile
which we seldom if ever hear criticized,
namely, the stockpile of metals, miner-
als, and materials, is worth many billions
of dollars more than the stockpile of
agricultural products. These stockpiles,
in both cases, are owned by the tax-
payer.
Would not the able Senator from Wis-
consin agree as he pursues ably his pol-
icy of defending the farmers of this
country on the floor of the Senate, that
there will probably be more need, in case
of hostilities for agricultural surpluses
than there will be -for any surplus of
metals and minerals?
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CONGRESSIONAL RECORD - SENATE 911
for the work he has been doing during Revised: "Today, as in the past, the only
his short term as chief executive. real way to increase the strength of our
On behalf of the people of Idaho, I Nation is to strengthen what is under at-
tack-to strengthen the individual."
wish to extend our condolences to the Original: "Challenge of communism-
State of Montana and its people, and Communist challenge-the Communist
also to express our sympathy to the Gov threat."
ernor's family. Revised: "Challenge of competing idealo-
Mr. MANSFIELD. I thank the Sen- gis-c General the White's speeches from Sep-
tember from Idaho for his remarks on this temFrom ber 21, 1960, to April 25, 1961:
occasion. Original: "Since the Air Force's future of-
fensive and defensive missions, as we reach
CENSORSHIP OF SPEECHES BY farther out into aerospace."
MILITARY LEADERS Revised: "Since the Air Force's future
missions, as we reach farther out in aero-
Mr. MILLER. Mr. President, in space."
yesterday's edition of the Washington thOriginal: w "Approximately 90 percent of striking power."
Evening Star there is an illuminating Revised: "A very large percentage of the
article, written by Cecil Holland, setting deterrent power. "
forth some examples of censorship of Original "These same forces could also
military leaders' speeches, which have contribute substantially to a general war
been developed during the course of the effort."
present hearings before the special sub- Revised: "These same forces could also
committee of the Senate Armed SerV- contribute substantially to a major aggres-
ices Committee. It seems to me, Mr. sio~iginal: "The Seconomic-military
by a regime which can
fortunate President, that controversy much of could this have un- been potential is guided Soviet
eliminated if there had been a require- count en on the backing-however however unenthusi-
astic--of cn
the Russian people. In addition,
meat that censorship policy be clearly the Soviets have another great intangible
defined and be made a matter of public resource which can best be described as gall.
of free discussion of alternative solutions
to our problems that we must rely on for
our future progress.
General White's speeches: Current Com-
munist propaganda to the world concen-
trates on the same central theme which it
has always emphasized, the destruction of
capitalism, colonialism, and imperialism.
But, under this guise, they really intend
the destruction of everything which does not
bend to their will. * * *
If our cold war efforts fail, armed conflict
could occur * * * as has happened in the
past. The Korean and Taiwan actions are
examples.
Furthermore, the Soviets have demon-
strated by their intensive research and de-
velopment programs that they unquestion-
ably seek a clear military advantage over
the fere world alliance at the earliest pos-
sible date.
General Trudeau's speeches: The three
sputnik satellites lend substance to Com-
munist claims of an intercontinental bal-
istic missile and their lunar probes should
clinch them.
SHIPMENTS OF ARMS TO CUBA
Mr. MILLER. Mr. President, in the
January 26 edition of the Des Moines
Register there is an interesting article
entitled "Contain Castro's Cuba," writ-
ten by Mr. Walter Lippmann. I believe
a reading of this article would be helpful
in evaluating this thorny problem.
However, I should point out that I must
disagree with Mr. Lippmann's statement
that we cannot blockade Cuba. We can,
Mr. President. For a year and a half I
have been advocating that we do so, in-
sofar as war materiel is concerned. Our
policy should be: "No war materiel in
and no war materiel out," permitting
trade with other nations on other items
as the policy of those nations dictates.
I think it is very shortsighted to have
permited 50,000 tons of war materiel to
be shipped into Cuba already, thus plac-
ing those Cubans who might wish to rise
up against their Communist dictator in
in the same position as that of the Hun-
garian patriots who could not beat off
tanks with sticks. How long must this
be permitted to continue, Mr. President.?
Are we to sit idly by while more war
goods are shipped in, for eventual re-
shipment to support Castro-type upris-
ings in other Latin American countries?
Are we to sit idly by until the threat
posed against this country by Mig's and
missiles with nuclear warheads becomes
record. In such ' a circumstance, our They are showing ever-increasing confl-
military speakers would know what the Bence-even arrogance-in their military
policy was, and could have their and scientific strength and growth of their
speeches drafted accordingly. More- influence, spawned and perpetuated in bru-
over, if the publicly announced censor- tal wars, dedicated to the mission of world
revolution-their fervor for subversion and
ship policy appeared to be too soft or force makes them believe that Communist
indecisive, so far as the American people domination of the world is inevitable. They
are concerned, sufficient pressure could are further strengthened in this belief by
then be brought to bear on the Con- their close partnership with Communist
gress and the White House to have it China."
changed appropriately. Revised: "Furthermore in any revolution
I ask unanimous consent that Mr. of the Communist threat we cannot disre-
Holland's article be printed in the gard the close partnership between Soviet
RECORD. Russia and Communist China."
Original: "The unquestionable capacity to
There being no objection, the article repel and decisively counter any attack."
was ordered to be printed in the RECORD, Revised: "The unquestionable capacity to
as follows: decisively counter any attack."
THE EXACT WORDS IN CENSORSHIP Original: "Weapon systems have been de-
(By Cecil Holland) veloped to overpower either."
Revised: "Weapon systems have been (Censorship as practiced in the Pentagon de-
veloped to overcome either."
and in the State Department has come un- From General Trudeau's speeches covering
der fire. At hearings last week on charges the period from August 1, 1961, to Decem-
that military leaders have been muzzled, ber 8, 1961:
the Senate Armed Services Preparedness Original: "On toward the turn of the cen-
Subcommittee was told that references in tury-world communism."
speeches to communism often were toned Revised: "On toward the turn of the cen-
down. Adm. Arleigh A. Burke, retired Chief tury-Sino-Soviet communism."
of Naval Operations, testified he thought Original: "There are voices today which
changes made in many of his speeches were whisper that the vicious, dangerous, and
capricious. Gen..Thomas D. White, former false doctrine of peaceful coexistence and
Army research and development, said some whisper that the vicious, dangerous, and false vention as a matter of self-preservation?
of the changes made in his speeches gave doctrine of aggression masquerading as Mr. Lippmann's containment by surveil-
him cause for wonder about the motivation peaceful coexistence and expediency." lance suggestion would, I fear, merely
involved. These are some examples of the original: "If the Russians can mobilize
actual blue pencil of the censors at work on 1,000 scientists and a billion dollars to seize lead to the very situation of direct inter-
the speeches of the three officers as pre- space, we must equal and surpass this effort vention which he so persuasively argues
sented at the hearings.) or lose space." against at this time.
From drafts of Admiral Burke's speeches Revised: "If the Russians can mobilize I ask that Mr. Lippmann's article be
from January 1, 1961, to August 6, 1961. 1,000 scientists and a billion dollars to try printed in the RECORD.
Original: "The Communists, however, are to dominate space, we must equal and sur- There being no objection, the article
not going to abandon their relentless drive pass this effort or give them a free hand." was ordered to be printed in the RECORD,
toward world empire even though they dare (Some passages were deleted entirely and
not risk the inevitable retaliation that a not revised or deletion was suggested. Some as follows:
nuclear war would bring." examples from the speeches of the three CONTAIN CASTRO'S CUBA
Revised: "Potentto ial aggresso surrender their ob however, officers follow:) (By Walter Lippmann)
cannot expected Admiral Burke's speeches: One speech
jectives without tcaa struggle." WASHINGTON, D.C.-The Conference of
Original: "Today the United States is en- dealing with the destructive forces of com- American Foreign Ministers in Uruguay has
gaged in a grim competition with an alien munism at work in Southeast Asia, Africa not concluded its work as this article is writ-
philosophy that has taken over whole coun- and Cuba was censored in its entirety. ten. But it is not too soon to say that there
tries without firing a shot. That is why For just this sort of free, unrestricted is being created an artificial and misleading
the only real way to increase the strength thinking has produced most of the remark- standard by which to judge what is going on.
of our Nation is to strengthen what is under able accomplishments throughout our Na- Much too often the issues at Punta del Este
attack-to strengthen the individual." tion's history. And it is precisely this kind are treated in terms of the United States
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912 - CONGRESSIONAL RECORD - SENATE January 29
winning or losing: If the condemnation of
Fidel Castro is very severe and is accom-
panied by an all-around rupture of diplo-
matic relations and of trade relations, we
win; anything less than this Is something of
a defeat.
This, I believe, is much too simple a view
of an extremely difficult problem. The prob-
lem is how to contain and isolate Castro's
revolutionary interventions, how to turn the
Cuban Government from its attempt to be-
come a full satellite of Moscow, how to con-
vert it into a good and reliable member of
the hemispheric system.
STRONG WORDS CAN'T STOP IT
This will not be done by strong words in
a resolution. Strong words never stop any
revolution. Almost certainly it cannot be
done by breaking off diplomatic relations in
this hemisphere. The more Cuba becomes
a part of the Soviet and Chinese system,
the more it will use their channels to other
states.
It cannot be done b a trade em-
Although there are people who affect to think
that there is no such thing as the opinion
of mankind, or that a decent respect for it
is unmanly, the uproar around the world
would be tremendous.
IT WOULD BE SMASHED
The inter-American system would be
smashed. Whatever happened to Castro
himself in Cuba, Castroism, fused with anti-
Yankeeism, would rage throughout the
hemisphere. And we, in the meantime,
would have entangled ourselves in a guerrilla
war nourished from outside Cuba.
It would be like the?British war in Malaya,
like the French wars in Indochina and in
Algeria. There is no reasonable ground for
thinking that intervention in Cuba could
be a short, swift, and clean-cut operation.
It could not be.
Believing this, believing that intervention
would be a calamity. I can see no alterna-
tive to a policy of vigorous and alert cony
tainment. /
I
barge. For 80 percent of Cuba's trade
now with the Communist bloc and the rest
is with Mexico, Canada, and Western Eu-
rope. Cuba's trade with the other Ameri-
can states is negligible. Castro, we must
remember, is not nearly so dependent on the
Western Hemisphere as was Rafael Trujillo.
There is no, good reason for crying out
that we have been defeated because the
biggest countries in South America will not
vote for sanctions that would make big
headlines in the United States but could
have no substantial and decisive effect on
Castro's regime. What can be done that is
worth doing?
A BASIS FOR CONTAINMENT
The first thing to do is, as Brazil, and Ar-
gentina have been arguing, to lay a sound
juridical basis for the containment of Cas-
tro. Existing hemisphere law was drafted
by men who were thinking of World War If.
They were thinking of the threat which had
been posed of a Nazi or Fascist conquest of
South America.
If that were the present danger, if there
were real danger of a Soviet military estab-
lishment in Cuba, those old treaties would
still be quite useful. But the existing law
is not directed accurately against the meth-
ods of the cold war.
There is every reason to think that we can
work out with the assistance of the big
South American countries a statement of
hemispheric law which fits the problem of
Castro.
ESTABLISHING SURVEILLANCE:
With a law amplified and clarified, we can
move with general consent to organize inter-
American machinery, in which we would take
an active part, to expose and counter Castro's
agents in this hemisphere.
Moreover, while we cannot blockade Cuba,
we can establish surveillance by sea and air
and, without violating Cuban airspace, we
can keep close watch on the military situa-
tion for signs of active Soviet intervention.
This is a general policy of containment,
patiently, persistently, and actively admin-
istered. There is one alternative to it. That
would be for the United States to occupy
Cuba, overthrow Castro, and set up a Cuban
Government that we like.
WRINGING HANDS
There are many among us who favor doing
this. If it were done, there would at first
be very considerable rejoicing and enthu-
siasm among those who do not look beyond
the excitement of the moment.
Once when the church bells were ringing
in London to celebrate the beginning of a
war, a statesman who had opposed the war
said, "Today they are ringing the bells. To-
morrow they will be wringing their hands."
A U.S. occupation of Cuba would have
enormous and far-reaching consequences.
THOMAS JEFFERSON AND THE
KENNEDY ADMINISTRATION
Mr. MILLER. Mr. President, in the
January 20 issue of the Washington Eve-
ning Star, the lead editorial, in com-
menting on some of the speechmaking at
the recent Democratic rally here in
Washington, deftly points out how read-
ily the President follows the example of
Thomas Jefferson where it will suit the
purposes of the New Frontier and how
readily Thomas Jefferson will be ignored
when to do so will also serve those pur-
poses. I ask unanimous consent that
this editorial be printed in the RECORD.
There being no objection, the editorial
was ordered to be printed in the RECORD,
as follows:
to mention his views on economy by spokes-
men for an administration which is urging
Congress to raise the national debt ceiling
above the $300 billion mark.
FIRST ANNUAL REPORT OF PRESI-
DENT KENNEDY'S COUNCIL OF
ECONOMIC ADVISERS
Mr. MILLER. Mr. President, in to-
day's issue of the Wall Street Journal
the lead editorial, entitled "Political
Magic," makes some very cogent obser-
vations regarding the First Annual Re-
port of President Kennedy's Council of
Economic Advisers, pointing out the pit-
falls that can exist in a report which
deals rather loosely with such terms as
"prroductivity," "unemployment," and
"gross national product."
One of the most surprising matters
pointed out in this most excellent edi-
torial is the fact that in commenting
on gross national product the Council of
Economic Advisers includes Government
spending as a part of the total output,
rather than taking into account only
nongovernmental spending.
I ask unanimous consent that the edi-
torial be printed in the RECORD at this
point.
There being no objection, the editorial
was ordered to be printed in the RECORD,
as follows:
POLITICAL MAGIC
Economic jargon can be confusing at best,
but in the mouths of Government economists
it is sometimes something far more serious.
Mere words become shibboleths, and the
shibboleths become the excuse for policies
of the most far-reaching consequences.
The current case in point is the First
Annual Report of President Kennedy's Coun-
cil of Economic Adivsers, wherein repeated
reference is made to terms like "productiv-
ity," "unemployment," and "gross national
product." Though each is an extremly slip-
pery concept, the economic advisers are quite
prepared to use them glibly, with too little
examination of their meaning.
They muse, for example, about the vir-
tues of rising productivity. And they sug-
gest, as a guide for noninflationary wage
behavior, that wage increases in each in-
dustry not exceed the trend rate of produc-
tivity increases in industry in general.
That is all very nice, perhaps. But what
is productivity? The advisers give the usual
definition., "output per man-hour." Only in
the most oblique way do they even hint that
productivity rises as a result of more and
better equipment for workers to work with.
That is, as a result of the increasingly cost-
ly capital investment of management.
Yet this is the very key to productivity.
It is certainly misleading, to say the least,
to talk about rising industrial productivity
and rising industrial wages as though they
were all mainly the outcome of extra intel-
lectual or physical effort put out by work-
ers. The Government would do better to
refrain from devising national policy
"guides" based on this kind of misappre-
hension.
A much more direct "trigger" of Govern-
ment action is the unemployment rate. The
economic advisers spend some time making
clear that they are against involuntary un-
employment-do they think anyone is for
it? And somewhere along the line they
seem to admit that unemployment is a far
more complex phenomenon that the official
figures would indicate. In human as well
as economic terms, for instance, it makes a
good deal of difference whether the unem-
ployed person is a housewife with a work-
UNMENTIONABLE
The speechmaking at Saturday night's
Democratic rally was in the best partisan
tradition. The past was reviewed with pride
and the future appraised with hope. If the
political opposition ever did anything worth-
while, it evidently escaped the notice of the
Democratic orators. After all, the party
faithful had not shelled out $100 a plate to
hear about the virtues, if any, of the G.O.P.
We were especially interested in the re-
marks of President Kennedy. He linked the
major programs of his administration with
those of former Democratic Presidents-
Woodrow Wilson, Franklin D. Roosevelt, and
Harry Truman. He also remarked that in
determining that the United States will not
be second in space, we follow Thomas Jef-
ferson who sent Lewis and Clark to explore
the Northwest.
The President, however, did not allude to
other areas in which his administration, as
well as those that preceded it, would have
no desire to follow Thomas Jefferson. Par-
ticularly, we have in mind a Jefferson state-
ment as quoted by C. Northcote Parkinson in
his little book, "The Law and the Profits."
Mr. Jefferson commented, as follows:
"I place economy among the first and most
important virtues, and public debt as the
greatest of dangers to be feared. * * * To
preserve our independence, we must not let
our rulers load us with public debt. * * *
We must make our choice between economy
and liberty or profusion and servitude.
"If we run into such debts, we must be
taxed in our meat and drink, in our neces-
sities and comforts, in our labor and in our
amusements. * * * If we can prevent the
Government from wasting the labor of the
people, under the pretense of caring for them,
they will be happy."
Naturally, while ringing Thomas Jefferson
into the act, there would be no inclination
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