AMERICAN DILEMMA: FROM LAOS TO SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000200140059-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 16, 2016
• Document Release Date: February 2, 2005
• Sequence Number: 59
• Publication Date: April 7, 1964
• Content Type: OPEN

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1964 CON-ORESSIONAL RECORt - MUSE 6951
I approved of the methods that were being
used to certify qualified recipients of food
stamps. I felt thatin Uniontown they were
doing a good job 'of policing the program.
The bans that were handling the selling of
the food stamps were making a good profit
and the stores that were participating in
the program were doing a fine job of mer-
chandising.
By way of explanation of the profit one
banking firm is making, a spokesman for
the GaIeton National Bank and its several
subsidiary banks throughout Fayette County
told us that they had collected $30,000 in
gross receipts for handling food stamp cou-
pons. The bank's actual profit was the
amount left after their expenses, which we
were told included hiring an extra employee
and purchasing a machine for canceling the
stamps.. We were told the banks charge 35
cents per transaction, which was paid for
by the State of Pennsylvania.
(a) Parenthetically, however, I'would like
to say here that a great many retail groceries
have expressed their support of this food
stamp plan on the basis that they feel it
would circulate many more food dollars
through all their stores. Frankly, I think
this may be a highly optimistic preconclu-
sion. From my study of how It is working
in the Uniontown area, it s bms quite appar-
ent that as this program shakes down there
will be certain grocery stores in strategic
areas who will find it to their advantage to
key the bulk of their groce-rybusiness'to the
patronage of food stamp customers and this
will leave the majority of groceries in the
position of receiving only a token income
from the food stamp source.
-2. I approve of this program's goal to try
and help out low-income families to put more
of their dollars into food that provides an
adequate and balanced diet. Of course, we
have been, trying to do this with our families
onwelfare for many years and have not been
successful.
3. I cannot agree that this program when
implemented to its full potential.w_ will, not, re-
quire more employees for both State and
Federal level to carry on increased activity
in policing it, educating the retailers .and
giving good screening to the applicants.
4. I also feel that this program should re-
quire some State participation. I am not
prepared to say at just what, level this State
participation should be and I do not think
that any of us can come up with a sound
conclusion on this point with the evidence
we have so far available from the pilot proj-
ects that have been carried on,in the. past 2
Years. As to cost, here again, we have ab-
solutely no firm figures to go on or to use
when we try to sell this program to the tax-
payers of America.
want to take the full of a
If you potential
nationwide food stamp.-Program and, base it
on the needs of those people, here is what you
get-one-sixth of the Nation's population
of 195 million people comes. out to 32. mil-
lion people. Using figures from- both the
distribution and the food stamp, plans we
must assume an average help per person in
either program of $5 a month in fopd,value.
In other words, $5 worth of fogd, paid for by
the taxpayers and given to needy people. If
you gave $5 worth of food a month to 32
million people you would spend $160 mil-
lion a month or $1.9 billion a, year. If you
tried to give them $10 worth of food_a month,
that would cost you $3.8 billion a year. That
is the present potential of a nationwide- pro-
grain of bringing help to .every person who
is in need of food. Now, let's look at what
we will spend on the pilot project right now.
We have 48 projects in action at an estimated
cost of $1 million a project. Testimony shows
that there are 240 more areas that. have ap-
plied to come under the food stamp plan.
In other .Words, if this bill passes, the Gov-
ernment would immediately be asked to pro-
vide for projects on hand that would cost
you $283 million a year. This bill calls for
an appropriation of only $75 million for the
first year. It seems to me that the Secre-
tary of Agriculture is going to have quite a
problem as well as quite a political headache
trying to determine which areas shall re-
ceive the benefits of the food stamp plan and
which areas shall not.
These are general conclusions. Now I
would like to talk to you about a specific
project in my own State. I have before me a
report made to me by the director of the
food stamp pilot project in Grays Harbor
County in the State of Washington, Mr. L.
L. Hegland (may I submit the opinion that
is expressed in this report is a bipartisan
one. Mr. Hegland is the direct appointee of
our Governor Rosellini who is a Democrat).
This is a pilot project in a distress area
which was started last summer. I have been
watching it with great interest as part of
my study of this whole proposed plan.
Previous to this there was a pilot project
in the neighboring State of Oregon in the
city of Portland that was far from an un-
qualified success. There is a pending pilot
project in my own hometown of Yakima in
my district which has been delayed I assume
because of the experience they have had in
Grays Harbor. Let me present to you in
his own words the testimony of the man
who has had the direct responsibility at the
State level for this food stamp plan in Grays
Harbor.
Mr. Hegland provided me with a report
comparing the direct food distribution and
food stamp distribution programs in the
State of Washington. He also provided a
food stamp questionnaire summary which
was conducted in Grays Harbor County in
which they mailed to all nonrecipients who
had used the direct food distribution pro-
gram a questionnaire. This report shows
that over half of the people who no -longer
participate are unable to do so because of the
limitation of their cash funds. Bear in
mind that these are people who are not on
assistance.
Mr.,Hegland concludes, "On the basis of
the survey and the fact that approximately
only one-third of the eligible people in Grays
Harbor County are using the stamp program,
we have some real question about the ex-
pansion of this program." Mr. Hegland goes
on to say; "Basically, the surplus commodity,
distribution program was designed to do
two things-use up surplus foods and supply
a more adequate diet to persons of low in-
come. It appears that the food stamp pro-
gram accomplishes only a part of this, and
the direct food distribution program does a
much more adequate job both on using.up
surplus commodities and of being available
to a larger number of low-income people."
I support further pilot projects of the
food stamp plan in the interest of getting
more meaningful data on its efficiency to
reach the goals we desire and, very im-
portantly, as to what its overall costs will
be. Since there is quite obviously a poten-
tial of annual expenditures of billions of
dollars in a nationwide welfare program of
this sort, I think it is imperative- that we
make haste slowly since I am sure that we
all agree that once a program of this par-
ticular nature is launched and agreed to by
the Federal Government, the dictates of
political realities are that it will be very
difficult, if not impossible, to stop or sus-
pend.
EXTENSION OF REMARKS
Mr. ALBERT. Mr. Speaker, I ask
unanimous consent that the gentleman
from New York [Mr. MURPHY] may be
permitted to include extraneous matter
in his remarks on General MacArthur
and that these remarks-be included in
the RECORD of yesterday under a previous
general leave permission.
The SPEAKER. Is there objection to
the request of the gentleman from Okla-
homa?
There was no objection.
T!I
AMERICAN DILEMMA: FROM LAOS
TO SOUTH VIETNAM
(Mr. FLOOD (at the request of Mr.
ALBERT) was granted permission to ex-
tend his remarks at this point in the
RECORD and to include extraneous mat-
ter.)
Mr. FLOOD. Mr. Speaker, in the
course of my career in the Congress as
a Representative from Pennsylvania, I
have had exceptional opportunities to
observe and study the operations of the
world revolutionary movement known as
the international communistic conspir-
acy. This experience has been incident
to official assignments as a member of
the House Committee on Foreign Affairs,
the Subcommittee on Defense of the
Committee on Appropriations, and of the
special committee to investigate the
massacre of some 15,000 Polish officers
at Katyn by the international political
organization known as the Union of So-
viet Socialist Republics. In addition, I
have made extensive studies of the prob-
lems of the Caribbean, including those
of the Panama Canal and interoceanic
canals generally.
The enormous territorial conquests
since World War II by the forces of com-
munistic revolution, conducted with con-
summate skill and impelling violence,
have been directed toward objectives of
high strategic importance. These in-
clude the Chinese mainland with its
teeming millions, major portions of the
Malay barrier controlling vital sea routes
between the Pacific and Indian Oceans,
countries dominating the Suez Canal and
its approaches, Cuba on the northern
flank of the Atlantic approaches of the
Panama Canal and British Guiana and
Venezuela on its southern flank.
Preceded by systematic infiltration and
subversion, these conquests have been
made through the scientific application
of the age-old principle of paralysis of
victim states and peoples in lieu of the
far more costly and hazardous means of
open warfare. Conducted in the form
of vast flanking movements, the Red
takeovers have been of magnitude that
places the revolutionary planners among
the most audacious and successful strate-
gists of history. Their operations have
included the extension of their own do-
mains by absorbing the satellite nations,
and then with the "stop thief" cry of
colonialism, have led the movement for
liquidation of European colonies, aided
and abetted by the United States.
What impresses most about the terT
ritorial losses sustained by Western na-
tions is that, without exception, the perils
were clearly foreseen and understood by
experienced observers and timely warn-
ings given all governments, including our
own.
Notable among the competent authori-
ties who have spoken out is Maj. Gen.
Charles A. Willoughby, who, as chief of
intelligence for General MacArthur in
the Southwest Pacific. and Far East,
1941-51, had an unparalleled opportu-
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 6952
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CONGRESSIONAL RECORD - HOUSE April 7
nity to observe, study, and report upon
the activities of Red power. The results
of his investigations, which he has pain-
stakingly recorded In official reports and
authoritative books, in hearings before
congressional committees and in numer-
ous issues of his Foreign Intelligence
Digest, form a vast reservoir of di-
gested knowledge that is indispensable
for study in connection with the formu-
lation of national policies that are in-
tended to improve conditions as seen and
understood. Unless such authoritative
writings are studied by responsible plan-
ners in our Government and their les-
sons heeded, our country is destined to
repeat the mistakes of the past; and this,
despite the fact that the requisite infor-
mation was, and still Is, readily available
in recorded form for those who seek it.
The latest contribution by General
Willoughby shows a startling parallel be-
tween what is now taking place in the
Jungles of southeast Asia and what oc-
curred in Korea in an article on the
"American Dilemma: From Laos to
South Vietnam" in the February-March
1964 issue of Christian Crusade of Tulsa,
Okla. This repeats a 1961 thesis by him
in the Weekly Crusader opposing U.S. in-
volvement in a ground war in southeast
Asia and emphasizes the imperative nec-
essity for avoiding policies that will pit
the limited and educated youth of the
United States against the inexhaustible
and expendable. illiterate manpower of
distant Asia, armed with Czech or Soviet
machineguuns or other lethal weapons
-and practicing all the barbaric atrocities
typical of Communist revolutionaries.
In order to make General Willoughby's
latest contribution available to the more
thoughtful framers of our national poli-
cies, in the Congress and the executive
`branch, and to the Nation at large, I
quote the article as part of my remarks:
THE AMERICAN DILEMMA FROM Leos TO SOUTH
VIETNAM
(By Gen..Charles A. Willoughby, retired)
3I'NAMARA REPORTS
Overshadowed by the headlines announc-
ing De Gaulle's recognition of Red China,
a very recent admission by the Secretary of
Defense (who knows the score?) was prac-
tically ignored. He appeared before the
House Armed Services Committee-which
made it very official indeed. As usual, typi-
cal Journalese threw in a semantic monkey-
wrench.' The quotes; "? ? ? the South
Vietnam war is going badly despite theover-
throw of the Diem regime" and on antiguer-
rilla fighting "? * * I must report that the
Communists have made considerable progress
since the coup." There is obviously a lame
suggestion that the war has been affected
by the coup? A slight change in phraseology
will correct this; "The war is going badly as
a result of the overthrow of the Diem regime
and not despite It." There is no other im-
mediate explanation for the "considerable
progress of the enemy"? Then the grim re-
minder that "the United States must be
ready to take all necessary measures."
What measures? Accentuated air power
(with which I go along) or accentuated
ground troop support (which would be dis-
astrous) in the light Of the French experi-
ences, in the same area.
THE VIETNAM ENTANGLEMENT
A mosaic of editorial opinion tells the
story. I often disagree with the capitol
brainwashers but In this instance, the grim
reality Is unmistakable.
"North Vietnam (Communist) holds the
key to the struggle. In 1958 Hanoi (Ho Chi
Minh) decided to send guerrillas and military
supplies across the border. Communist
losses In the South can easily be repaired by
continuous reinforcements."
The choice before the President Is not so
much what he will do in South Vietnam but
what he will do withNorth Vietnam. John-
son is faced with ugly decisions; they esti-
mate a showdown by summer: to continue
limited commitments and prolong a- wasteful
stalemate-or strike for victory by Fending
many more troops to Vietnam (in an election
year?).
Deliberately excluded from his list of
choices Is a withdrawal from Vietnam.
American policy may be overtaken by harsh
events this summer and the drama of De
Gaulle's recalcitrant flirtation with Red Chi-
na Is probably a welcome diversion, a Tru-
manesque red herring.
As usual, professional military elements
are brushed aside. No admission Is made
that the Vier. lam stalemate is an exact repli-
ca of the North Korean war, i.e., the free
entry Into action of Chinese reinforcements
from a diplomatic sanctuary. The present
sanctuary is Hanoi and sheltered lines of
supply through Laos, from North to South.
Unless this line of supply is Jugiar vein) Is
cut or the source of supplies, Hanoi (the Red
base) punished, the "stalemate" will con-
tinue. The continuity of stalemate, at the
expense of pitting expensive American con-
scripts against the cheap cannon fodder of
southeast Asia, Is abhorrent. Asa profession-
al soldier, I feel that way, and addressed
President Kennedy, who faced the same
problem then that Johnson inherited:
A LETTER To THE PRESIDENT
"OCTDBEa 28, 1961.
"His Excellency JOHN F. KENNEDY,
The President of the United States:
"Operations in the tropical jungle of Viet-
nam require special qualifications. This spe-
cial experience accrues only in one theater on
a large scale-MacArthur's Southwest Pacific
Area.
"The professionals in Washington, D.C.,
who 'have that experience are Generals
Decker and Eddleman. They fought from
New Guinea to the Philippines. Complete
data are available In the MacArthur records.
I invite attention to the development of the
Philippine resistance movement volumes I, II
and IV. 'The Intelligence Series S.W.P.A.'
"As regards southeast Asia, I am on record
in special articles, beginning with 1954. and
extensive testimony before various congres-
sional committees.
"Before committing American troops, the
debacle of the French in Indochina should
be carefully considered. They had local
knowledge acquird in over a century of oc-
cupation, which American troops could not
possibly match. Here follows a grim remind-
er of French troops strengths and losses, in
that terrain (1954), viz:
1, The French had 681,000 men available, as of (952. By 19.54, their losses were. Killed, 92,000; missing, 28,000; and
wounded, 114,000 (excluding provincial arrilrs).
Aggregates
Men avail-
able
Wounded
Missing
Killed
2. French contingents-----------------------------------
267,000
--------------
--------------
Metropolitan, etC --------------------------------
76,000
48,000
4,000
19,000
Foreign Legion ...................................
17,000
10,000
8.000
7,000
North Africans___________________________________
37,000
11,000
2,000
? 13,000
Sen gsk'ere-------------------------------.-----.--
21,000
11.000
4,000
10,000
Native units .............. ............ .__._------
.
100,000
87.000
12,000
43,000
..... ...........................
3. Provincial armies ..- ......................
310, 000
260
000
1
(I
i)
Vietnam Army-----------------------------------
Cambodian Army--------------------------------
,
28,000_
(I
~
(I
=
{)
1
Laotian Army-----------------------------------
22,000
(
"I arrived at certain conclusions in 1954
and again in 1958: The expensive Western
draftee cannot be equated with the illiterate.
Asiatic cannon-fodder, armed with Czech or
Soviet machineguns. The use of American
ground troops is 'attrition-suicide' "
"This dangerous Imbalance In manpower
requires a new strategic policy: the calcu-
lated employment of nuclear mass-destruc-
tion weapons to offset the inexhaustible
manpower of Asia. The use of these modern
weapons (and the air delivery system) Im-
poses no more moral strain than when Tru-
man unleashed the first atomic bomb on
Hiroshima--indeed, the provocation was far
CHARLES A. WILLOuGHBY,
Major General, U.S.A., Retired.
S Invite attention to a previous paragraph.
I stated the impasse of an expensive, frus-
trating stalemate: "the limited commit-
ments which make it impossible to advance
with safety, or to retreat with honour." I
also gave a constructive solution:"the calcu-
lated employment of nuclear mass destruc-
tion weapons to offset the inexhaustible man-
power of Asia."
CAMERONE: 1883-DIENaIENPHu : 1954
The current deteriorating situation in
Indochina (Laos, Cambodia, Vietnam) is
immediately traceable to the operations (and
collapse) of the French, in the period 1948-
1954. In a strict sequence of cause-and-
eHect, today's problems are unintelligible
without an examination of recent history.
The title references are linked by events in
the picturesque annals of the French For-
eign Legion which fought and died gallantly
in these places. Each year, the legion form-
ally commemorated the defense of the
"Hacienda de Camerone" April 30, 1883, when
a detachment of 62 Legionnaires held the
post against 2,000 Mexicans, to the last man.
"Faire Camerone" has become a slogan
around the campfires of the legion, to de-
note a fight that was hopeless from the be-
ginning and could have only one ending.
Dienbienphu. an equally desperate inci-
dent of the war in Tonkin (1954) cannot fail
to become a similar, tragic legend. It
should also become a warning against any
hasty formula to employ American infantry
in that thoroughly treacherous area, to
maintain the "prestige of the West" and
"hold the line" against communism-famous
cliches by assorted draftdodgers and em-
busques. Our "prestige" was challenged in
Cuba and not in Laos and the "line to be
held" runs through metropolitan Berlin and
not through Vietnam.
The French have a word for it: "Plus ca
change, plus ca reste la meme chose." It
has all happened before. The Spanish Civil
War was the first blueprint for the attempted
takeover of prospective Soviet victims; it was
a blueprint followed for Greece, Korea, and
Indochina-except that the Spaniards won
hands down, politically and on the field of
battle: there was then no talk of armistice,
cease-fire, disarmament, or appeasement; it
was a showdown-and communism has never
raised Its treacherous head below the Pyre-
nees. The Russians learned something
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there-though the West persisted in har-
assing Spain in the madness that the gods are
said to decree before the end.
TIm FRENCH POSITION: DE GAULL'E INrEANSIGENT
De Gaulle's somewhat startling recognition
of Red China is deeply rooted in history and
personal memory: history-in that France
operated for a century in the present Viet-
nam region. While she lost her war against
Ho Chi Minh, she was in the same fix as the
Dutch. Faithful wartime allies thrown to
the dogs, In U.S.-U.N. diplomatic in-
trigues, under the aegis of a professed but
phony anticolonialism, ignoring Russian
slave economy and domination and pushing
to extremes in fanning African nationalism
which was nothing but agitation by pro-
fessional troublemakers of the Nkrumah,
Tours, and Castro variety.
Personal resentment-in that De Gaulle
was manhandled and "chivvied" by two
sadistic experts: Roosevelt and Churchill.
He had no easy time after 1945. The an-
glophile predilections of the United States
always gave preferential positions to'England.
She could recognize Red China-without a
murmur from Washington. She was given
access to nuclear secrets (after contributing
a German spy, Klaus Fuchs, to infiltrate the
Manhattan project and pass them on to
the Kremlin) while France had to spend it-
self dizzy to duplicate what we already had
available. In the end, this was a public dec-
laration of distrust in American leadership,
shared by several European allies.
It is not clear what this recogntion will
do above and beyond what British recogni-
tion did, some 10 years ago. It may upset
the United Nations' applecart-but that
creaking monstrosity needs upsetting, sooner
or later.
What infuriates Washington-and with
justification-is the puny contribution of
France to the NATO general defense scheme.
A ragged group of French resistance fight-
ers newly emerged from underground
huddled outside the Hanoi Opera House one
rainy night shortly after V-J Day. They had
starved, risked their lives to save downed
American pilots, and provided us with infor-
mation. Inside, General Phillip Gallagher
sat in an opera box with Ho-chi-Minh. The
two made speeches, shook hands to the flash
of camera bulbs, swore mutual support. The
leader of the group in the rain, against whom
Ho and the American general were uniting, is
today one of France's Soviet affairs special-
ists. One of his officers (also present that
night in Hanoi) is in the Palais Matignon
office of the French Premier. Another is in
the French Embassy in Brussels, and a fourth
is a colonel in Algeria.
Said a Paris weekly when Mr. Couve de
Murville exchanged harsh words with Dean
Rusk in Bangkok in late March:. "150 Ameri-
can agents have been working in Laos for 6
years to drive out first the French and after
them the Pathet Lao."
The 1954 Geneva Accord made France re-
sponsible for defense of Laos with the right
to maintain 8,000 men at Seno. Relations
were good, there was no bitterness. Gradu-
ally forces were reduced to 3,000. Algeria
forced the recall of 2,500 more. Americans
replaced them. By common consent they
stayed in their own fields for a time; then
the familiar popularity contest against our
ally started. A French professor paying a
courtesy call on the USIS chief in Vientiane
was greeted by the latter's wife, holding a
long drink, and a sneer. In February Boun
Oum told French troops to get out. Couve
de Murville was asked for military support 1
month later.
Is there a chance of closer cooperation in
the future? Probably not. American agents
in the field and "policy" at home adhere to
the fallacy that the valid anti-Communist
force is the non-Communist left. Result:
In each country, including our own, an alli-
ance between Communists and us against
the anti-Communist right and center is cre-
ated. Under such combined weight, a left-
ward slope on which sheer force of gravity
does the rest.
WHAT IS BRITAIN'S POSITION?
Said Lord Beaverbrook's paper (the Ob-
server), "Central Inteligence Agency has in
the past run its own policies, quite separate-
ly from the State Department, in Laos, Viet-
nam, and Egypt. CIA is active in Washing-
ton politics. Its top men talk to a journal-
istic elite there and with these briefings buy
precious support." Britain had never beer}
consulted. She wanted no repetition of
Malaya. Besides, Laos was only a prelude, as
Britain saw it: South Vietnam Is the big ob-
jective.
INDOCHINA AND NATO
While figures were carefully soft-pedaled,
a fair estimate indicates (see "Letter to the
President") that about half a million men,
French plus native auxiliaries, were engaged
in Indochina; the bulk of the French, at
least 80 percent were Legion Etrangere and
Moroccans; about 30,000 were Armee Metro-
politaine or volunteers, comprising 7,000 of-
ficers and 23,000 noncommissioned offi-
cers, principally technical staffs. This group
can be said to represent cadres for four to
six European divisions and was used by
the French as an argument to explain the
delay in furnishing NATO contingents. The
same situation prevailed as regards Red-
agitated Algiers. The capacity of France
to mobilize adequate military forces in Eu-
rope and in Asia is difficult to assess; how-
ever, past performance of several Euro-
pean powers is illuminating to say the least,
viz:
Divisions
191.4-18
1939-45
1928
1960
Percent
Benellux_________
18
22
17
4a
25
Great Britain___
89
49
23
4
18
France ----- -----
118
90
25
4
16
Germany -------
248
190
10
9
90
Italy -------- ----
45
60
25
8
31
Compared with the output in the 1928 column (a
normal peacetime year with the Russian threat negli-
gible),
is totally inadequate. of the Western Allies
(last column) percentage
Since 1914, the French have never had less
than 25 to 30 Regular Army divisions in
being; this is a point of considerable signifi-
cance and has a direct bearing on their capac-
ity to meet the modest requirements for
NATO; actually, the same discrepancy must
be charged against other member powers-
Italy, Belgium, the Dutch, none of them
seem able to develop anything like the num-
ber of prewar divisions in a normal peace-
time year like 1928. Granted for the sake
of argument, that the spiral of living costs
and materiel costs have shot up to two or
three times the prewar levels, the collateral
dollar contributions of the United States
have been proportionally enormous in terms
of local currencies. There cannot be an ar-
gument that manpower is not still available
in mid-Europe, to be conscripted as required,
a process to which Europeans have been
socially conditioned for over a century.
Such considerations make even a suggestion
that Americans be drafted for Indochina
abhorrent-unless and until local native
draftees have been called in greater numbers
than to date. Who wants to die for Pnom
Penh?
CONCLUSIONS AND RECOMMENDATIONS
1. The Indochina situation in (1954
and afa.in in 1964) is a repetition of the
worldwide Communist conspiracy-as in
Korea, in Greece and in Spain.
2. The strategic impact is more important
than Korea, which was bloodletting with-
out recompense: the stakes in southeast
Asia are bigger, higher, better.
3. The stakes are access to and control
of enormous strategic raw materials: rub-
ber, manganese, oil, tungsten, tin and rice.
4. In 1941-45 the Japanese made a major
bid for these stakes. The Communist gen-
'eral staff follows the Japanese blueprint.
5. The Japanese master plan did not stop
in Indochina. It moved westward toward
Siam, Malaya and Burma, and southward to-
ward Indonesia and the control of the Malay
barrier.
6. In the meantime, French Indochina
had to face the challenge, 1945-54,
7. While the French assumed a frontline
responsibility, the United States carried 80
percent of the costs of the war (1954).
8. The defense of Dienblenphu was a
brilliant chapter. in the annals of the For-
eign Legion. It belongs with the great de-
fense of "Hacienda de Camerone," April 30,
1863, when 62 legionnaires fought 2,000
Mexicans to the end.
9. Dien Bien Phu did not settle the Indo-
china nor the greater. Asiatic problems. It
has grown beyond the French and called for
collective action. Since the United Nations
are notoriously ineffective, a regional, geo-
graphical accord had to be developed. It is
to the credit of the Eisenhower-Dulles team
that steps were taken to make this possible,
i.e., a "Pacific Treaty Organization" expanded
from the tentative ANZUS, the Australia-
New Zealand-United States Treaty. It is
now known as SEATO.
10. As diplomatic maneuvers are contin-
gent on effective military forces, there must
be a reexamination of military means in the
current global struggle. The West lost its
ascendancy when it sold its exclusive modern
weapons-rifles, machineguns and artillery,
armed the inexhaustible cannon fodder of
Asia, and thus created an impossible discrep-
ancy of numbers and ground forces : the ex-
pensive Western draftee cannot survive, in
ratios of 1 to 10 or higher, against expendable
Asiatic coolies armed with Russian or Czech
tommyguns.
11. It is a corollary that hostile or neutral-
ist Asiatic manpower should be balanced by
friendly Asiatic manpower. The Soviets
have been more successful than the West
to utilize foreign troops under a nationalist
or volunteer cover. We must do likewise.
The immediate reservoir for the West is
Thailand, Vietnam, Formosa, the Philippines.
The Nationalist Chinese Army has a right
for action against mainland Chinese. Other
vulnerable people in the Pacific area can
probably be induced. to defend themselves
under this formula; they need armies and
they need training. American aid thereafter
must be sharply limited to defense and not
to socialistic welfare schemes; the American
economy cannot stand both. As a corollary,
there must be a sharp break with previous
welfare-state or socialistic projects within
America. Taxed to the breaking point of
diminishing return, the United States must
shift from welfare-butter to guns, in a sit-
uation that was never more critical for West-
ern civilization, than the inroads of Attila
and Ghengis Khan.
12. The dangerous impasse of manpower
supremacy can be resolved only by a re-
examination of armaments balances, along
the following lines:
(a) Increased security to prevent further
sales or thefts (thru espionage and Commu-
nist sympathizers) of modern inventions,
i.e. airplane design; atomic design; improved
weapons design, etc.
(b) The exploitation of "mass destruc-
tion" weapons to offset the inexhaustible
manpower of Asia, employed as the cannon-
fodder of communism and a tool of the mod-
ern Ghengis Khans in the Kremlin,
(c) A decision to use these weapons, in
whole or in part, imposes no more moral
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strain than when Truman unloosed the first
atomic bombs on Hiroshima and Nagasaki;
indeed-the provocation was far less.
(d) The basic principle of employment has
already been accepted when Washington an-
nounced "massive retaliation" by the Air
Force,
(e) These weapons can utilize older
models, now in stock, to creat a belt of
"scorched earth"across the avenues of entry
of the Communist hordes in Asia, applying
the same principle of the "cordon sanitaire"
that was openly planned for Eastern Europe,
in the twenties.
13. The supremacy of the West at sea
and in the air can deliver these weapons
without recourse to ground forces.
14. The fear and Implication that this ac-
tion will bring Russia into open war, is
always present, everywhere. In the Far East,
however, the strategic situation is unfavor-
able to Russia and Red China. They have
no Navy that can challenge the West out
there. They are vulnerable in a single supply
line in Siberia, the Trans-Baikal Railway,
which can be reached by American planes
from present positions. A single air mission
will isolate Soviet Siberia from its European
base of supply. A single air mission will
paralyze every port from Vladivostok to
Shanghai, selected at random.
Finally, it is not yet established that a
Russian or Chinese conscript will fight with
greater skill than an American draftee, The
greatest mass surrenders in World War II
were made by Russian soldiers. It Is not yet
established that the Russian or Chinese
conscript will the for Pnom Penh with any
greater enthusiasm than his American
counterpart-when Kali, the Goddess of
Death and Destruction will raise her blood-
stained arms and call for sacrifice on the
darkest night of November.
PANAMA CANAL ZONE: MOST COST-
LY U.S. TERRITORIAL POSSES-
SION
(Mr. FLOOD (at the request of Mr.
ALBERT) was granted permission to ex-
tend. his remarks at this point in the
RECORD and to include extraneous mat-
ter.)
Mr. FLOOD, Mr. Speaker, among the
questions frequently raised incident to
current discussions over the Panama
Canal are the juridical status of the
United States in the Canal Zone and the
cost of its acquisition.
The sovereignty of the Canal Zone and
the title to the Panama Canal were
covered at length in my address in the
RECORD of March 9. In broad terms, the
zone may be described as an extension of
the territory of the United States subject
to the laws of our country.
In addition to obtaining the grant of
sovereignty over the Canal Zone from
Panama, the United States acquired title
to all land and property in the zone
through purchase from individual
owners.
To enable realistic comparisons with
the costs of other territorial purchases
On my request, the Department of the
Army, on March 31, 1964, reported that
the total cost of acquiring the Canal
Zone Is now over $144,568,571, In this
light, the Panama Canal Zone Is the most
costly territorial extension ever acquired
by the United States. No wonder Presi-
dent Theodore Roosevelt likened it as
comparing in importance with the Loui-
siana Purchase.
The Indicated $144,568,571. of course,
does not include the costs of construct-
ing the Panama Canal and the various
canal and defense installations In the
zone, which are enormous and total bil-
lions. To even discuss the Idea of retro-
cession to Panama of the Canal Zone
with all the vast investment that It rep-
resents is like suggesting negotiations
for the return of the Louisiana Purchase
and the vast investment in It to France.
The indicated exchange of letters fol-
lows:
Hon. saerasrr Ans.
Secretary of the Army,
The Pentagon, Washington, D.C.
DEAR Ma. SacRETARY: The records of the
Congress indicate that in addition to the
purchase of sovereignty over the Canal Zone
by Panama, which was indemnified for this
grant, the United States acquired title to all
the land and property in the Canal Zone,
including the.holdings of the New Panama
Canal Co. of France and the Panama Rail-
road. from individual owners.
In order that the Congress may be accu-
rately Informed as to the total cost of ac-
quiring the Canal Zone and its auxiliary
areas full information in tabular form Is
desired.
An early reply Is respectfully requested.
Sincerely yours,
DANIEL J. FLOOD,
Member of Congress.
DEPARTMENT Or THE ARMY,
OFFICE OF THE UNDER SECRETARY,
Washington, D.C., March 31, 1984.
DEAR Ms. FLOOD: In reply to your request
In your letter of March 23, the following is
a tabulation of the cost of acquisition of the
Canal Zone as reflected in the accounts of
the Panama Canal Company:
Republic of Panama:
Original payment, 1904 (1903
treaty) ------------------- #10,000,000
Annuity, 1913-43 (1903, 1936,
and 1955 treaties) ---------
30, 150, 000
Property transfers:
Property in Panama City and
Colon. 1943---------------
11,759,956
Water system In Panama City
and Colon (unamortized
cost) ---------------------
560,226
1955 treaty transfers --------
22, 260, 500
Colombia (1922) --------------
25,000,000
Compagnie Nouvelle du Canal
de Panama (1904) -----------
40, 000,000
Total--------------------
144,388,571
and acquisitions, I shall list the major
The assets acquired from the New French
C
l C
ones:
ana
ompany included 688,887 shares of
Date and Territory Cost
Year 1803-Louisiana Purchase- $18, 000, 000
Year 1821-Florida Purchase-_ 6, 574, 057
the stock of the I1anama Railroad Company.
The remaining 1,013 shares were acquired
from Individual owners for about $150,000
Year 1848-Mexican Cession, in-
included In the item "Private titles, stock,
cluding California----------- 15,000,000
and claims."
Year 1853- Oadeden Purchase- 10, 000, 000
Sincerely,
Year 1867-Alaska Purchase---- 7, 200, 000
MAE, T C. MCPHsasoN
Jr
Year 1904--Canal Zone-------- -----------
,
.,
Deputy Under Secretary of Army (1A).
CHANGING GENERAL ACCOUNTING
OFFICE AUDITS OF THE FEDERAL
HOME LOAN BANKS AND THE
FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION FROM
A FISCAL YEAR TO A CALENDAR
YEAR BASIS
(Mr. FASCELL (at the request of Mr.
ALBERT) was granted permission to ex-
tend his remarks at this point in the
RECORD and to include extraneous mat-
ter.)
Mr. FASCELL. Mr. Speaker, under
existing provisions of the Government
Corporation Control Act the financial
transactions of the Federal Home Loan
Banks and of the Federal Savings and
Loan Insurance Corporation are required
to be audited by the General Accounting
Office for each fiscal year ending June 30.
The Comptroller General of the United
States is required to make a report to the
Congress of each such fiscal year audit
not later than January 15 following the
close of each fiscal year.
I am introducing a bill which would
amend these provisions so as to require
General Accounting Office audits of the
Federal Home Loan Banks, and of the
Federal Savings and Loan Insurance
Corporation, to be on a celandar year,
rather than a fiscal year, basis. The bill
would further provide that the Comp-
troller General's reports to the Congress
on such audits must be made not later
than July 30 following such calendar
years.
A recommendation that the Congress
enact such legislation as to audits of the
Federal Home Loan Banks was made by
the Comptroller General on February 14,
1964, when he transmitted to the Con-
gress the latest audit report of the Fed-
eral Home Loan Banks, for the fiscal
year ended June 30, 1963. Subsequently,
on March 31, 1964, by letter to me, the
Comptroller General recommended that
such legislation also include GAO audits
of, and the Comptroller General's re-
ports on, the Federal Savings and Loan
Insurance Corporation.
The 12 Federal home loan banks and
the Federal Savings and Loan Insurance
Corporation maintain their accounting
and financial records on a calendar year
basis, the normal business year of the
banking industry. They also prepare
their financial statements-which are
included In the Federal Home Loan
Bank Board's report to the Congress-on
a calendar year basis.
Adoption of the changes proposed in
my bill would permit financial reporting
to coincide with the accounting periods
of the Federal home loan banks and of
corporation. It would also facilitate the
General Accounting Office's audits of
those agencies. The waste and duplica-
tion of effort presently involved in com-
posing the operating figures of the Fed-
eral home loan banks and of the Federal
Savings and Loan Insurance Corporation
to a fiscal year basis In order to comply
with existing reporting requirements
would be obviated.
The Legal and Monetary Affairs Sub-
committee of the House Committee on
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